Jenkins v. . Daniel

Eurohes, J. On the 10th of August, 1888, the plaintiff John IT. Jenkins borrowed of A. N. Daniel, the testator of *166 the defendant Ida Daniel, the sum of $150, for which the said J. H. Jenkins and his wife, Mary E., executed their note to the said A. N. Daniel, due the 1st day of January, 1890; that at the same time they made and executed a mortgage to the said Daniel upon the land in controversy to secure the payment of said note and some other indebtedness; that the land so conveyed in said mortgage belonged to the feme, Mary E., then the wife of the said John H. Jenkins; that on the 12th day of February, 1890, the said John II. Jenkins executed a chattel mortgage and crop lien to said A. N. Daniel, in which it is stated to be “in, consideration of $12, and one note due Bynum & Daniel, and one due A. N. Daniel, as described in the mortgage of February 22nd, and August 10, 1888., and the further sum of $150, to be advanced from time to time during the year as needed,”.conveying the following property, 1 mule, 2 iron axle casts, 3 head of cattle, 1 sow and pigs, all farming implements, 1 bay mare about eleven years old, and all other personal property of every description, not herein mentioned or described, also a lien on all crops, etc.” “And if by the 15th day of November, 1890, the aforesaid indebtedness has not be discharged by the proceeds of the sale of said crops or otherwise, then the party of the second part is authorized to take possession of said property and sell the same, or so much thereof as will satisfy the amount then remaining due, and all costs and expenses in any way incurred by said seizure and sale. “But if said indebtedness shall be paid off and discharged by the 15th day of November, 1890, then this conveyance to be null and void.” On the 4th day of July, 1891, the wife, Mary E., died, leaving her husband, J. II. Jenkins, and the infant plaintiff, her surviving; and in February, 1892, the mortgagee sold the *167 land at public auction on tbe premises, when the defendant Mrs. Sarat Speight, wife of the defendant J. T. Speight, became the purchaser at the price of $320, and has paid the purchase money, and the mortgagee made her a deed therefor. The plaintiff J. H. Jenkins was present at the sale and made no objection thereto. All the children and heirs at law of Mary F. Jenkins were then, and seem to be still, minors under 21 years of age, and sue by their guardian, J. BE. Jenkins. The mortgagee, A.' N. Daniel, before the date of said sale, to-wit, on the 1st day of April, 1891, caused to be cancelled all the mortgages he had against the plaintiff J. BE. Jenkins, except that of the 10th of Augustj 1888, under which the sale was made, and the defendant Speight bought. The plaintiffs admit in their complaint that there was about two hundred dollars due on the note of the 10th of August, 1888, at the date of the sale. But they allege that, as no place was named in the power of sale contained in the mortgage, the sale should have been made at the courthouse in Greene County; that on account of the sale not having been so made, the land sold for much less than its value; that defendant Speight has been in possession of the land ever since the sale, receiving the rents and profits, and has damaged the land by tearing away the fences, and has cut and sold a quantity of timber off the land, which, when taken together, amount to more than the balance due on the note of $150, which should be applied to its discharge. The plaintiff further contends that the discharge of the other mortgages in which the $150 was secured was a discharge of the debt and lien upon the land of the wife, Mary E. Jenkins, and mother of the other plaintiffs, and they contend on the argument here that the mortgage of Eebruary, 1890, extended the time for enforcing the mortgage of the 10th of August, 1888, and that the mortgage security was thereby *168 discharged; that the mortgage only conveyed a life estate in the land. Of these many contentions of the plaintiffs, there is bnt one about which it seems there should be any doubt, and that is the extension of time caused by the mortgage of February, 1890. It is admitted by the plaintiff that there was about two hundred dollars due on the note of $150, at the date of the sale; and this being so-, it authorized the sale. Jordan v. Farthing, 117 N. C., 181, where it is held that if one dollar is due it authorized the sale. This was said in a case where there was no claim that the lien of the mortgage had been discharged, and that contention is the serious element that enters into this case. The debt secured was that of the husband, and the land mortgaged as security was that of the wife, and was only security for the husband’s debt. Sherrard v. Dixon, 120 N. C., 60. The extension of time without the consent of the surety discharges the surety, or the security given by a third party. Bank v. Summey, 119 N. C., 591; Sutton v. Walters, 118 N. C., 495. This presents the question whether the mortgage of February, 1890, extended the time of payment of the note of the 10th of August, 1888, secured in both mortgages. If it does, it was a discharge of the lien of the mortgage of the wife on her land. The mortgagee would have no right to sell under the same, and the defendant Speight would acquire no title by reason of said sale and her purchase. It is held in Harshaw v. McKesson, 65 N. C., 688, that time for the payment of the debt secured by the mortgage, in that case, was extended. But in that case the time was extended by the express terms of the mortgage; the mortgage was given to secure a debt then past due and unsecured, *169 and the Court beld that the time agreed to be given was the only consideration, for giving the mortgage. It is also held in Kane v. Cartesy, 100 N. Y., 132, that giving a second mortgage, securing a debt secured by a former mortgage, in which the time stated for the foreclosure of the second mortgage was at a later date than that fixed in the former mortgage, was an extension of time of payment, and discharged the lien of the first mortgage. This case, it must be admitted, is very much like the one under consideration. While, on the other hand, it is distinctly held not to be an extension of time xa. Emes v. Weddowson, 19 Eng. C. L. Eep., 316, (0. & P., 151), in a case very much like the one now under consideration, where it is said “that an assignment of property for the purpose of securing debts due and to' be due, with a power of sale upon giving 6 months notice, is only a collateral security, and, without a special clause to that effect, does not suspend the remedy by action against the debtor.” The same doctrine is held to be the law in 2 Brandt on Sureties and Guarantees, ’ sec. 367, to-wit: “It has been repeatedly held that the mere fact that the creditor takes from the principal a mortgage or trust deed of property as collateral security for the debt, does not of itself, in the absence of an agreement to that effect, extend the time or discharge the surety.” In Meguiar v. Groves, 1 Fed. Rep. 279, it is said: “The giving of a chattel mortgage to secure a pre-existing debt will not discharge sureties of the debtor, unless the mortgage on its face purports to extend the time of payment of the debt.” Where a mortgage is given by the principal debtor to secure other indebtednes, and a former debt is included in such mortgage, which already has security, and the time of foreclosure of said mortgage is at a later date than the matur *170 ity of the doubly-secured debt, this mortgage will be held to be only collateral security to the doubly-secured debt, and not an extension of time, unless it be agreed as a consideration that the time for the enforcement of the doubly-secured debt should be extended, and that such second mortgage did not discharge the original security. Brandt, supra. The case of Harshaw v. McKesson, supra, is distinguishable from this case and can not control our opinion here. In that case there was an express agreement for an extension of time, which was the only consideration for the mortgage. That is not so in this case. Here, the second mortgage is given to secure other indebtedness, and for the purpose of obtaining future advances to make a crop. There is no contract or stipulation or agreement to extend time on the note for which the former mortgage was given, and we can not, by construction, give it that meaning and effect. It seems to us that this second mortgage was or might have been a benefit to the first security, as it became an additional security for the debt, furnished by the principal debtor, which the original security could have compelled the trustee mortgagee to exhaust before the first mortgage would be liable. But this was a matter between the first security and the mortgagee, and does not extend to the purchaser at the mortgage sale, as it is admitted that there was a considerable balance due on the first mortgage debt at the time of the sale. The mortgage conveyed the fee simple estate under sec. 1280 of The Code. We do not think the other grounds urged by plaintiff invalidate the sale. It is found by the referee to have been open and fair, and that the plaintiff J. H. Jenkins was present and did not object; that the land brought a fair price, and according to the evidence (in the opinion of the intelligent referee) as much as it would have brought if sold at the court-house *171 of Greene Oounty, which, was a considerable distance from the land; and that there was no place specified as to where the sale should take place. The sale being valid, it conveyed the title to the land to the purchaser, Speight, free of any trust relations between her and the mortgagors, and she is not liable to account- for rents and profits, or for waste. But as between the mortgagors and mortgagee, between whom the trust relations existed, the mortgagee is liable to account to the mortgagors for the price the land sold for, and also for the property conveyed in the second mortgage; and whatever is found to be due, if anything, will inure to the benefit of the infant plaintiffs to the value of the land. And the defendant Ida Daniel being the representative of the trustee, it will devolve upon her to account for these funds. Hall v. Lewis, 118 N. C., 517; McLeod v. Bullard, 84 N. C., 515. It was suggested by defendant on the argument that in any event J. II. Jenkins had conveyed his interest, which according to plaintiffs’ contention was a life estate (tenant by the couitesy), and that plaintiff could not recover on that account, as that estate had not terminated. However this may be (and we do not decide it), we have preferred to put oúr judgment upon the merits of the case as affecting the rights of the parties. That the judgment of the court below be affirmed as to the defendants Speight and wife. But if the plaintiffs are so advised, the case should be continued as to the defendant Daniel that the matters may be inquired of, as indicated in this opinion. Modified and affirmed.