Lee v. . Giles

Hoke, J., after stating the case: Our statute, Revisal, sec. 3082 (Code ’83, secs. 2104-2115), provides that the dower or right of dower of a widow and such lands as may be devised to her by his will, if such lands do not exceed the quantity she would be entitled to by right of dower, although she has not dissented from such will, shall not be subjected to the payment of debts due from the estate of her husband during the term of her life, etc. In the present instance the widow did not dissent from her husband’s will within a period of six months, the time as required by the law, and further having duly qualified as executrix and acted as such for seventeen months, the privilege was no longer open to her. She held, therefore, under the will and not against it, and the petition and decree for dower does not in strictness confer that or any other estate on her, but is a method permissible and proper under the statute by which her estate and interest is protected from creditors for the stipulated period of her natural life. Tripp v. Nobles, 136 N. C., 99; Perkins v. Brinckley, 133 N. C., 86; Shackelford v. Miller, 91 N. C., 181; Simonton v. Houston, 18 N. C., 408. This being the correct position, the petition and decree for dower did not amount in form or effect to a dissent from the will nor to any renunciation of the devisee’s estate under it, and her mortgage carried to the mortgagee as security for her debt the entire estate, subject to the rights of creditors as they may have existed under the conditions presented. On that question the mortgage to secure $1,300 borrowed money, having been executed by the sole devisee more than two years, to wit, five years and one month, after the death of the testator, *546 is effective against creditors, if taken in good faith and without notice of the insolvency of the testator’s estate. Revisal, sec. 70; Francis v. Reeves, 137 N. C., 269; Bunn v. Todd, 115 N. C., 138; Arrington v. Arrington, 114 N. C., 157. There is no claim or suggestion in this instance that the mortgagee had actual notice, but it is insisted for plaintiff that the dower proceedings amounted in law to constructive notice, and that the widow being in possession of the property under a proceeding authorized by law and based on a petition containing allegations of insolvency, such possession is of itself sufficient to conclude the mortgagee as to notice; but we are of opinion that this position cannot be maintained on the facts as they appear of record. Our decisions are in full accord with the principle that when one buys real property from a vendor when a third person is in the open and notorious possession, the purchaser is held to take with knowledge or notice of the rights, legal or equitable, of the possessor — a position that is held to be conclusive with us, and obtains also in favor of the landlord of the- present occupant. Staton v. Davenport, 95 N. C., 11; Tankard v. Tankard, 79 N. C., 54; Edwards v. Thompson, 71 N. C., 177. The doctrine in question assumes that the interests acquired antagonize the rights of the occupant, and proceeds upon the theory that a purchaser is held to inquire of such occupant how and in what way he holds his possession, and the better considered authorities are to the effect that it should receive a reasonable construction, and, being designed to prevent an acquisition of property under circumstances suggestive in many instances of fraud, should not be unduly extended to the injury of innocent and meritorious claimants. In the present case, as we have seen, the dower proceedings did not in fact confer any estate on the widow and devisee. The judgment created no lien on the property, nor did the index of judgments give any indication or suggestion of the nature of the proceedings or the contents of any petition. At that time no adversary proceedings on the part of the creditors or any one of them had been instituted which threatened or tended to threaten the ownership of the widow. These were *547 not commenced until more than a year after the execution of the mortgage, to wit, in April, 1892. When the mortgagee, therefore, was approached for a loan of money, it was by an occupant in possession as sole owner under the terms of her husband’s will, and we think this was the extent of the knowledge that should be imputed to her under any reasonable or proper application of the principle of constructive notice, a ruling that best comports with the reason on which the doctrine rests and with the principles established by the weight of well-considered authority. Francis v. Reeves, 137 N. C., supra; Ferguson v. Edrington, 49 Ark., 207; Lincoln v. Thompson, 75 Mo., 613; Mullin v. Butte Hardware Co., 25 Mont., 525; Smith v. Tale, 31 Cal., 180; Rodgers v. Hussey, 36 Iowa, 664; Le Neve v. Le Neve, 2 White and Tudor’s Leading Cases Eq., Part 1, p. 109; 2 Pomeroy Eq. Jur., 1027. See note to Niles v. Cooper, 98 Minn., 39; Garbritt v. Mayo, 128 Ga., 269; s. c., 13 L. R. A. (N. S.), 76; Effeson v. Turpin, 44 W. Va., 426. In Lincoln v. Thompson, supra, it was held: “Possession may in some cases be evidence of a claim, but when a particular claim is notorious and is sufficient to account for possession, no one is called on to speculate as to the existence of some other claim.” And in the citation to Pomeroy’s Equity the author says: “The decisions may be regarded as agreeing upon the conclusion, which also seems to be in perfect harmony with sound principle, that where a title under which the occupant holds has been put on record, and his possession is consistent with what appears of record, it shall not be constructive notice of any additional or different title or interest to a purchaser who has relied upon the record and has had no actual notice beyond what is thereby disclosed.” The conclusion arrived at on this feature of the case is no wise affected by the fact referred to by plaintiff, that Thomas A. McCoy, the son of the testator, joined his mother in the execution of the mortgage. This was no doubt for the reason that by the terms of the will an interest was devised to him’ in case the mother should remarry, and has no significance one way or the other on the question of notice. *548 While we hold that the mortgagee, to the extent of that interest, was an innocent purchaser within the purview of the statute, we concur with his Honor’s view, that there has been no valid foreclosure of the mortgage. Recurring to the facts of record, it appears that in April, 1892, A. M. Lee, for himself and all other creditors, instituted a general creditors’ bill against .the executrix and sole devisee, for an account of the personalty and to enforce collection of their claims by judgment and otherwise by sale, if necessary, of all the real estate mentioned in the will of A. A. McCoy, deceased. In 1895, and before any proceedings commenced by the mortgagee, the heirs at law of the testator were duly made parties defendant. Judgment was entered, condemning the land, at February Term, and on sale plaintiff purchased and took a deed for the property. Under our decisions, this suit was notice to all persons interested of its purpose, and amounted to a lis pendens as to all the real estate of Judge McCoy embraced in the will and situate in the county of Sampson (Arrington v-. Arrington, 114 N. C., 151), and on sale had under the decree the commissioner’s deed conveyed to the plaintiff the equity of redemption, which at its institution and at the time of sale was in the dev-isee, subject to the payment of the testator’s debts. To the foreclosure proceedings instituted by the mortgagee, returnable to February Term, 1897, neither the creditors nor any one representing them were made parties, and under the principles - recently announced in the well-considered case of Jones v. Williams, 155 N. C., 179, the interest arising to the creditors by reason of their suit and lis pendens was unaffected by the decree in the foreclosure proceedings. From this it follows that this defendant, the representative and devisee of Mrs. Giles, the mortgagee, has a valid lien on the entire property for the amount of his debt and interest, subject to a credit of the rents and profits of the property at $100 per year from the time possession was taken under the attempted foreclosure proceedings. That the plaintiff is the owner of said property subject to the above lien. That the appeals of plaintiff and defendant be modified in accordance with this opinion. The *549 costs of eacb appeal be equally divided between, them and an ordinary decree of foreclosure by sale of tbe property be entered. Modified and affirmed. WalKer and Allest, JJ., not sitting.