Wilsford v. Johnson

• Court: Mississippi Supreme Court
• Writing for the Court: COOK, J.
• Citation: Wilsford v. Johnson, 141 Miss. 739, 105 So. 736 (Miss. 1925)
• Decision Date: 26 October 1925
• Docket Number: 25120
• Parties: WILSFORD et ux. v. JOHNSON et al. [*]

105 So. 736

141 Miss. 739

WILSFORD et ux. v. JOHNSON et al. ^[*]

No. 25120

Supreme Court of Mississippi

October 26, 1925

Division A

(Division A.).

1 MORTGAGES. Agreement for extension rescindable for nonperformance of agreement constituting consideration for extension.

Agreement for extension of time of payment of mortgage debt could be rescinded, and foreclosure had on the debt maturing under original terms, mortgagor having refused to carry out the provision of the agreement that, as consideration for the extension, he would execute a chattel mortgage as additional security.

2 MORTGAGES. Mortgagee not entitled to rents.

A mortgagee is not entitled to the rents as against the mortgagor in the absence of agreement therefor.

3 LIENS. Remedy of junior mortgagee paying interest on first mortgage is not equitable lien but merely subrogation to first mortgagee's rights.

A junior mortgagee, who, to prevent foreclosure of senior mortgage, pays interest accrued on such mortgage, which covered only the land, and not the rents and profits, is not thereby entitled to any equitable lien on the profits from the land, but any remedy that he has for such payment is by subrogation to rights of first mortgagee.

4. MORTGAGES. Even additional damages for wrongful injunction against sale under mortgage would not authorize lien on rent.

Even if it be an exceptional case, warranting other damages, in addition to the statutory damages for delay occasioned by wrongful issuance of injunction staying sale under mortgage this would not create or authorize the granting of a lien on the rents accruing during the delay.

HON. E. N. THOMAS, chancellor.

APPEAL from the chancery court of Sunflower county, HON. E. N. THOMAS, chancellor.

Suit by T. F. WILSFORD and wife against J. N. Johnson and others, for injunction with cross-bill by defendants. From an adverse decree, complainants appeal. Affirmed in part, and in part reversed and rendered.

Affirmed. Reversed.

Chapman, Moody & Johnson, for appellants.

The real parties in interest, as shown by the record, are T. F. Wilsford, as the owner of the land and personal property, and J. N. Johnson, his creditor, whose debt was secured by the deed of trust executed by the former to Quinn, as trustee. Primarily, of course, the duties and obligations of each are based on this instrument and the agreement of extension, heretofore mentioned, as a modification of that instrument. Therefore, the vital question is, was the agreement, heretofore copied in full, in effect, and binding on the parties hereto, when, in January, 1924, Quinn, as trustee, attempted to foreclose the deed of trust, the sale under which was enjoined. If it was, then the decree, from which the appeal is prosecuted, is erroneous. If it was not said decree is still erroneous.

I. Necessary consequence if the agreement was in effect. On December 3, 1923, all of the indebtedness, except ten thousand two hundred dollars, secured by the deed of trust executed by Wilsford and wife to Quinn, as trustee, for Johnson, was paid. By the terms of an extension agreement, the payment of such indebtedness was extended to be paid five thousand one hundred dollars with interest on ten thousand two hundred dollars on or before December 10, 1924, and five thousand one hundred dollars, with interest thereon, on or before December 10, 1925. If said agreement was in effect then the action of Quinn, as trustee, in proceeding to foreclose said deed of trust, was wrongful and the injunction, restraining said sale, was rightfully granted. This, of course, is the necessary consequence, if as stated, said agreement was in effect and binding on the parties thereto.

The injunction, when sued out, was rightfully granted; for on that date, as stated, no part of the indebtedness secured by said deed of trust was then due; and as a consequence, the conditions of said deed of trust had not been breached. But, by the lapse of time, a portion of the indebtedness was due when the cause was tried. If the amount then due was paid, the deed of trust could not on that date be foreclosed. We say this because, if by the terms of said agreement the payment of said indebtedness has been extended, then there was no default on the part of Wilsford so long as said injunction was in effect. 27 Cyc. 1459, par. 7.

The said agreement, pursuant to which the payment of said indebtedness was extended, provided that as a consideration for such extension, Wilsford would execute a chattel deed of trust on certain property, therein described, to additionally secure the payment thereof. He failed, when requested, to execute such deed of trust. A default, on his part, could not, of course, at his instance, render the agreement void and of no effect. Kent v. Stevenson, 90 So. 241.

It is certain, if said agreement was in effect, that the indebtedness secured by said deed of trust was not then due and, as a matter of course, the conditions of said deed of trust had not been broken; and, when Quinn, as trustee, attempted to foreclose said deed of trust, the conditions thereof not having been broken, his action was wrongful, and the injunction, therefore sued out restraining a sale by him, was rightfully granted. If so, then the action of the lower court in holding that said injunction was wrongfully sued out, and the decree awarding damages against the appellants because of that was erroneous. See Benedict v. Benedict, 15 Hun. 307; 2 High, Inj., sec 1650; Burroughs v. Jones et al, 79 Miss. 214, 30 So. 605.

II. Necessary consequences if agreement was not in effect. One cannot, in the same suit, treat the contract as rescinded and rely on it. The principle is so elementary that it should not be necessary to cite authority in support of it. But see 13 C. J. 823, sec 683; Harden v. Lang, 36 S.E. 100; Timmberman v. Stanley, 1 L. R. A. (N. S.) (Ga.) 379.

If Johnson, because of the breach by Wilsford, had the right to rescind, and did rescind the agreement, such rescission abrogates the same, not partially but completely, and, after such an election to rescind, Johnson cannot insist on rights thereunder.

If the contract was rescinded by Johnson, both he and Wilsford were returned to their previously existing rights. As the contract was, as to the extension, a modification of the deed of trust Johnson could, of course, resort to his rights thereunder, but he could not reap the benefits of the contract, rescinded by him and, at the same time and in the same suit, reap the benefits of the deed of trust which, as to the extension, was modified by the agreement. 13 C. J. 623, sec. 683, and cases cited in notes.

Therefore, even if it be assumed that the contract was not in effect, or rather had been rescinded, the decree must be reversed, as it gave Johnson the benefits based on the agreement and, as a consequence, deprived Wilsford of property, or his right to the use thereof, to which Johnson had no lien on or interest in.

Johnson elected to repudiate the agreement because of the breach thereof by Wilsford, yet when the original bill was filed, Johnson then filed a cross-bill in which he set up the agreement and claimed the benefits thereof. That is to say, he claimed an equitable lien on the agricultural products grown on said land for the year 1924. He based his claim on the agreement by Wilsford to execute a chattel deed of trust thereon. But he charged that the land had been rented by Wilsford to one, N. L. Wise, for five thousand dollars.

Whether by the agreement Johnson was given a claim against and a lien on the rent agreed to be paid by Wise, it is unnecessary now to decide. The point is that if the agreement was not in effect as to Johnson it was not as to Wilsford; and if not, Johnson had no claim against, or lien on the rent agreed to be paid by Wise, evidenced by his rent note for five thousand dollars. Therefore, the decree perpetually enjoining Wilsford from negotiating transferring or assigning such rent note was clearly erroneous.

Furthermore, if the agreement was not in effect, then, as a matter of course, Johnson had no lien on the agricultural products growing out of the agreement by Wilsford, to execute a, chattel deed of trust, thereon.

Everett & Foreman, for appellants.

Johnson's right to the equitable lien, which was given him in the decree, arose under the contract of extension entered into between himself and Wilsford.

By this contract the payments mentioned in the trust deed, which is Exhibit A to the bill, were extended and the trust deed would mature a year later than the date mentioned in the trust deed. Johnson, however, claims that the contract was breached by Wilsford, ill that Wilsford failed to renew the trust deed when he called upon him to renew the same; and or that reason be was entitled to foreclose under the original trust deed; and treating the contract as breached, he advertised the lands for sale. However, when the bill for the injunction was filed by Wilsford, Johnson answered and made his answer a cross bill and there he set up the fact that he was entitled to a lien on all of the crops grown by Wilsford for that year. The trust deed which was extended by the contract, covered all of the personal property owned by Wilsford and the only additional right which Johnson could acquire under a new trust, in accordance with the contract, would be a lien on the crop for 1924. He had everything else.

We have no statute authorizing the mortgaging of crops before they are planted. Therefore, a trust deed executed by Wilsford to Johnson in December of 1923 on the crop for 1924, would convey nothing, except the title to the personal property which Johnson already had. Sillers v Lester, 48 Miss. 513; Cacey v. Stovall, 50 Miss. 396; ...