Durant v. . Crowell

Davis, J., (after stating the facts). Without considering in detail the voluminous evidence contained in the record, it appears from the mortgage deed, executed by Taylor to Durant on the 6th day of July, 1857, that the land in controversy was conveyed to the said Durant to secure the payment of $23,170, borrowed, and from the evidence, this was largely more than the agricultural value of the land, and though it was of considerable value for mining purposes, it was much more than the value of a life estate therein. This inherent fact, and the affidavit of Taylor, who executed the mortgage deed, to the effect that it was the understanding and agreement of the parties that the land should be conveyed in fee to secure the said loan, and that it was by the ignorance, mistake or inadvertence of himself *371 and Durant, or of the draftsman of the mortgage, that words of inheritance were omitted — that no part of the said mortgage debt has been paid, but that every part thereof is still due and payable — that at the time of the execution of the mortgage, it was undertood and agreed, and so expressed in the mortgage, that he was not to be personally liable for the said debt, but that the land was to be the only security, establish an apparent right in the plaintiff, to have the deed corrected and reformed. The deed of June 26th, 1857, executed by Durant and Judson to Taylor, conveyed a fee, and the mortgage deed refers to it, and purports to convey “ all the estate, title and interest, dower and right of dower, of the said parties of the first part therein,” making it apparent that the estate in fee was intended as a security for the debt. But the feme defendant says she was a purchaser at a fair and open public sale, and as the highest bidder, without notice, &c., and it is insisted that, as against her, all the equities of the plaintiffs are fully met. The land was bid off, says the answer, by Wager and As-bury for the feme defendant. It was worth, according to the answer $2,500 “ on the market.” Flow, the administrator of Downing and the commissioner who sold the land, makes oath, in effect, that he never believed that the title of his intestate was good, and that he had frequently told his (Downing’s) heirs, that he did not have a title — that he had heard Downing say that, he held the land for others. Howie states in his affidavit, in substance, that he rented a portion of the land in question for several years; that fre•quently during that time Downing told him that he (Downing) held the land for the Durants, who held the mortgage ; that he was the agent for the Durants merely. That after the death of Downing, he continued on the land and paid rent to James Flow, the administrator of Downing, and sometimes to Mrs. Wager, the daughter of Downing, or to W. H. D. Wager, till about 1878, when he heard that Gen. Rufus *372 Barringer, of Charlotte, was Durant’s agent, and signed a paper agreeing to hold the land in his possession as tenant of said Durant, and that this writing, which is filed as an exhibit, was witnessed by James Flow, the administrator of Downing. Cochrane, another witness, makes affidavit upon information and belief, that it was announced at the sale, before the bidding commenced, so that the announcement could be heard by all present, that only the interest of Downing was sold, and that it was bid off by Wager and Asbury with full knowledge of the fact. Mr. Barringer makes affidavit, that he was in 1867 employed as attorney and agent for Durant, and sets out, in detail, an arrangement with Hugh Downing, und er which he remained in possession of the land, recognizing the encumbrance of the mortgage and its lien upon the land, and after his death, an arrangement with the heirs of Hugh Downing, under which they were to hold the land for five years. “ That from the death of Hugh Downing, until 1882-3, his’active administrator (Jas. Flow) and his heirs at law frequently and from time to time admitted to affiant thaf the said mortgage debt was unpaid, and was a subsisting lien upon the land, and that during the period of affiant’s agency for Durant, which agency was well known to the administrator and heirs of Downing and Wager, and to the defendant, M. E. Crowell, as far back as 1878, * * * * there was no adverse possession to affiant as agent up to 1882, or 1883. 'That defendant M. E. Crowell was present during the negotiations which resulted in the contract for a lease, * * * * and that neither he, in his own right or otherwise, nor his wife, ever claimed the land, till the year 1882, or ’83.” That under the contract of lease, the rents were paid by Wager for the years 1880, ’81 and ’82. There are also letters of Downing, written in 1866, filed as exhibits, recognizing the mortgage debt as a lien upon the property. *373 It appears that the parties interested in the mortgage resided in New York, and the mineral value of the land was of chief consideration with them, and the negotiations referred to by Mr. Barringer in his affidavit account for the delay in bringing the action. These facts, taken in connection with the vast disproportion between the price paid by the feme defendant and the actual value of the land, would seem to fix the defendant with notice. The fact that property, worth at the lowest estimate $2,500, and, according to some of the evidence, $8,000, for agricultural purposes, with a large speculative value for mining purposes, should be bid off at the insignificant price of $66, was certainly sufficient to put her on inquiry. “ Only the purchaser of the legal title, without notice of a prior equity, can hold against such equity;" Winborn v. Gorrell, 3 Ired. Eq., 117; Polk v. Gallant, 2 D. & B. Eq., 395; Hamlett v. Thompson, 1 Ired. Eq., 360. In this case, the defendant acquired only the title which Downing had, which was not a legal title, if any title at all. We think the plaintiffs have established an apparent right to have the mortgage deed reformed and the property sold to pay the debt, and that this apparent right is-not sufficiently controverted by the answer, and if there is danger of the rents and profits being lost, they are entitled to have a receiver. The plaintiffs allege the insolvency of the defendants, and danger of loss; the defendants admit the insolvency of M. E. Crowell, but say that the/eme defendant is entirely solvent, and worth $2,500 or $3,000 in excess of her exemptions. The only other evidence upon this point is: 1st. The affidavit of James Flow, in which he says: “that the said Delia A. Crowell had no property at her marriage, in her own right, and has since owned none, except the tract of land claimed by her in this action2d. The certificate of the property listed by M. E. Crowell, agent for D. A. Crowell, in 1886, amounting to $4,647, of which $4,000 is for *374 the land in dispute in this action. Of course the value of the land in controversy can not be considered in determining the security to which the plaintiffs are entitled, and where there is imminent danger of loss by insolvency of the defendant, it is within the rightful authority and the duty ■of the Court to secure the rents and profits, through the appointment of a receiver; Kerchner v. Fairley, 80 N. C., 24; Rollins v. Henry, 77 N. C., 467; Kron v. Dennis, 90 N. C., 327; or to permit the defendant to remain in possession, upon the execution of a bond, payable to the plaintiff, with security approved by the Court in such sum as may be deemed sufficient to secure the rents and profits and such damages as may be adjudged in favor of the plaintiff, upon .a final determination of the action. Lumber Company v. Wallace, 93 N. C., 23. ■ There was error in refusing to allow the motion of the plaintiffs. Let this be certified, to the end that the Court below may make such order in the cause, in accordance with this opinion,, as will secure the plaintiffs against loss by reason of the insolvency of the defendants. ■ Error. Reversed.