Jones v. . Warren

Clarkson, J. Is the claim, the subject matter of this action, held by A. J. Pollard, assignee of Gurney P. Hood, Commissioner of Banks, founded upon a judgment docketed subsequent to the registration of the deeds of trust held by the appellee banks, superior to the claims of the appellee banks ? We think not. The judgment of the court below, in part, is as follows: “It is further ordered, considered, adjudged and decreed that the mortgages or deeds of trust heretofore given by Walter Warren referred to in the petition filed in this action do not constitute liens or encumbrances upon any of the real estate described in said deeds of trust or mortgages or in or against any undivided interest therein, but are merely equitable assignments of the interest of Walter Warren in and to the net proceeds derived from the sale of said real estate, and further that none of the judgments against Walter Warren constitute liens or encumbrances against any of the real estate owned by the estate of J. B. Warren, whether described in the complaint or not.” In the judgment rendered by the court below, under the facts and circumstances of this case, we think the right result has been reached. It may be that the liens of the deeds of trust attached to the land until sold and followed the proceeds. N. C. Code, 1935 (Michie), section 4170, in part, is as follows: “An administrator with the will annexed has all the rights and powers, and is subject to the same duties, as if he had been named executor in the will.” In Item 13 of the will, above set forth, it is said, in part: “All the remainder and residue of my estate consisting of real estate,” etc., is to be disposed of and one-third given and bequeathed to Walter Warren. In Ferebee v. Proctor, 19 N. C., 439 (446), Ruffin, C. J., said: “If the will does not devise the land,' but creates a power to sell it, then, upon the execution of the power, the purchaser is in under the will, as if his name had been inserted in it as devisee. But, in the meantime, the land descends, and the estate is in the heir. The power is not the estate, but *735 only an authority over it, and a legal capacity to convey it. These are elementary maxims. But it is supposed that the testator had disposed of this land by directing a sale of it absolutely, and a division of the proceeds, so as to turn it out and out, as it is called, into personalty; and that this defeated the descent. When sold, the estate of the heir will certainly be divested; but such a provision in the will is only the creation of a power; it is a disposition of the proceeds of the land, but not a disposition of the land itself; and that consequently descends. The doctrine of conversion is purely equitable. The law knows nothing of it. A court of equity, by considering that as done which ought to be done, deals with land ordered to be sold as if it were sold. But a court of law always looks upon land as land, and has regard only to the legal title, which is unaffected by any power, whether it be a naked one, or coupled with an interest, or a trust until the power be executed.” Speed v. Perry, 167 N. C., 122 (129). In the Speed case, supra (p. 130), it is written: “The rule which we have just mentioned is well expressed in Beam v. Jennings, 89 N. C., 451. In that ease, Justice Ashe, with his usual clearness and vigor of style, has stated the final conclusion in this Court upon the question whether, when a power of sale is conferred in a will, the land descends to the heirs or vests in the devisees until the power is fully executed. He remarks that, ‘On this question there is, in the decisions of the courts and among the text-writers, considerable diversity of opinion. Some hold, with whom is Mr. Hargrave, in his note on Coke Litt., 113, that whether the devise be to the executors to sell the land, or that the executors shall sell, or that the land be sold by the executors, a fee simple will be vested in the executors; but in Sugden on Powers, 133, and Williams on Executors, 579, it is laid down that until a sale by the executors, where a power of sale of land is given by the will, the land descends in the interim to the heirs at law.’ He then approves what is said by Chief Justice Ruffin in Ferebee v. Proctor, supra” (quoted above). Barbee v. Cannady, 191 N. C., 529; Hoke v. Trust Co., 207 N. C., 604. This action was commenced 23 September, 1933, some 20 years after the death of J. B. Warren. It will be noted that J. B. Warren directed the executor to pay his son Walter (Warren) one-third of the net balance “I give and bequeath the same to him.” Suppose the executor or his successor had never sold the “remainder and residue” of the real estate, what would become of it? Who owned it? “The land descends in the interim to the heirs at law.” We think the four deeds of trust before mentioned, which were duly recorded, from their language gave a lien on the real estate, and when sold and converted into money an equitable lien in their favor attached to same and the judgment purchased by the appellant Pollard was subject to the liens of said deeds of trust. *736 In Munds v. Cassidey, 98 N. C., 558 (563), we find it written: “Tbe instrument is unmeaning unless tbe construction put upon it embraces tbe moneys to wbicb tbe assignors would become entitled wben tbe conversion is made by tbe executor.” B. O. Everett, Esq., was permitted upon bis application to file brief as attorney for Harvey Harward, trustee of Walter Warren, bankrupt. From tbe view we take of tbis case, tbe trustee in bankruptcy bas no interest in tbis controversy. Tbe liens were acquired long before Warren’s adjudication of bankruptcy, 18 June, 1937. It will be noted that tbe trustees in tbe deeds of trust were careful and distinguished attorneys of long practice at tbe bar: B. Percy Beade, L. P. McLendon and W. S. Lockbart. Tbey took these deeds of trust to secure large sums of money, relying no doubt on tbe decisions of tbis and other courts as followed by tbe learned and able judge in tbe court below. Tbe court, by consent and acquiescence of all parties, bas found tbe facts and entered a final judgment. It will be presumed, nothing else appearing, that tbe court bas found facts wbicb will support tbe judgment. Tbe judgment of tbe lower court should be sustained for tbe reason that tbe law, as interpreted by tbe courts of tbis State and others, is to tbe effect that tbe deeds of trust given by Walter Warren constituted equitable assignments of bis interest in tbe proceeds of tbe sale of tbe property described therein, and that tbe judgment creditors have no lien against tbe land; and further, that tbe order of priority of registration of tbe deeds of trust is tbe correct rule to follow as between tbe mortgage creditors and judgment creditors of Walter Warren. Upon tbe entire record, we think, for tbe reasons given, tbe judgment of tbe court below should be Affirmed.