Nestor v. Davis

McLain, J., delivered the opinion of the court. This bill was filed by complainants for the purpose of redeeming certain lands. The facts are that the ancestor of the complainants was the owner of the land, and that he executed to Duke Bros. & Co. a trust deed upon the property for the purpose of securing a debt due by the grantor to Duke Bros. & Co. Shortly before the death of the grantor, which occurred in 1885, the grantor delivered certain property to Duke Bros. & Co. in settlement of the debt, except there remained a balance due of fifty dollars. Shortly after the death of the grantor it is alleged that one Thomas E. Davis, the ancestor [205] of the defendant, falsely and fraudulently represented to Duke Bros. & Co. that Mrs. E. W. Nestor, the widow of the grantor, desired Duke Bros. & Co. to assign to him, the said Thomas E. Davis, the said deed of trust, and that said Thomas E. Davis falsely and fraudulently represented to the said Mrs. Nestor that Duke Bros. & Co. were preparing to sell the property under the deed of trust, and, that by reason of such false and fraudulent representations he prevailed upon the said Mrs. Nestor to consent to the transfer, and, further that the said original holders of the debt would not have assigned, but for the false and fraudulent representations made by the said Davis. The bill further alleges that the fraud practiced upon them and their mother by said Davis was not made known to them, and by the exercise of reasonable diligence they did not discover the same until ten years before the filing of this bill; further, that immediately after the transfer of the deed of trust to Davis he went into possession of the land, and has been in possession thereof continually thereafter; and, further, that J. E. Davis, the defendant, an heir of said Thomas E. Davis, had full knowledge of all the facts, and has been receiving the rents and profits of said land; further, that complainants have often requested the defendant to render an account for the amount he claimed under the said deed of trust, but the same has been refused; further, that the rents received by the defendant are more than sufficient to satisfy the debt. The complainants pray that an account be taken of what is due the defendant for the principal and interest on said sum secured by said deed of trust, and, further, that an account may be taken of the rents and profits of the said land which have been received by the defendant, and that upon such an accounting the proper decree shall be rendered. To this amended bill a demurrer was interposed, sustained, and the bill dismissed, and the case comes to this court upon the action of the chancellor in sustaining the demurrer. [206] While the amended hill is very loosely and inartificially drawn, and while the pleadings are construed most strongly against the pleader, yet we think that the allegations of the hill are such as require an answer. The first ground of demurrer is that the amended hill fails to show whether “the release of the land in controversy from the deed of trust was in writing, or whether it rested in parol.” While the bill alleges that there was an assignment of “the deed of trust, yet we construe the bill to mean that the purpose and intent of the parties was to assign the debt, and that the assignee was to, and could, take only such interest as the beneficiaries in the trust deed had at the date of the assignment. Davis paid to Duke the amount of the debt due him, with the understanding that he (Davis) was to acquire the interest which Duke owned at that time. This was equivalent to an equitable assignment of the debt. The debt was the principal, the deed of trust merely an incident, and the assignment was not an assignment of real estate, or of any interest in real estate, but simply an assignment of the debt. In order for the assignee to have a legal title, the assignment should have been in writing; but the payment of the debt, with the understanding that the payor was to acquire the rights of Duke, constituted an equitable assignment of the debt, and consequently, the parol assignment was good. The general principles will be found, on an analysis of the case, to be that whether a given transaction shall operate as a payment, which satisfies and discharges the trust deed, or as an assignment, which keeps it alive, does not depend so much upon the language used, description of the act done, as upon the relations subsisting, or that spring up, between the party advancing the money and others who had, or have, acquired interests in respect to the property. The second cause of demurrer is that the amended bill fails to offer to do equity, in that it fails to tender or [207] offer to pay the debt, the amount Davis paid for this land. This is an offer to redeem, and while, ordinarily, it is necessary for the complainant to tender with his bill the amount due under the mortgage, yet this principle has no application where an accounting has been shown to be necessary to ascertain the amount due, and especially where the amount is not known to the party seeking redemption and cannot be ascertained by him because of the fault of his adversary in refusing to furnish information which it is his duty to furnish. Aust v. Rosenbaum, 74 Miss. 893, 21 South. 555. The third cause of demurrer is that the amended bill fails to show wherein and how the complainants have used due diligence, and what they have done to discover their rights in the matter in controversy. Under section 3092 of the Code of 1906, which is simply a rescript of the former statutes, when a mortgagee, after condition broken, shall obtain the actual possession, the mortgagor, or any perón claiming through him, cannot bring a suit to redeem the mortgage, unless brought within ten years after the time at which the mortgagee obtained such possession. The facts show that Davis had been in possession of the land for more than ten years, and the object and purpose of the allegation in the bill is to avoid this limitation; and, under section 3091 of the Code, this can be done by showing that in every case of.a concealed fraud the right to bring the action shall be deemed to have first accrued at and before the time at which the fraud shall, or with reasonable diligence might, have been first known or discovered. And while it is necessary to state the facts which constitute a fraud, so as to let the court judge as to whether a fraud was perpetrated or not, yet the rules of pleading do not require that the facts shall be set out in the bill, showing what diligence has been exercised by the party to discover the fraud. All that is required is to state in the pleading that the party has exercised reasonable diligence and has failed [208] to discover it. Of course, when the case comes on for hearing, it will be necessary for the party to satisfy the court by evidence that he has exercised this reasonable diligence, and, if he fails so to do, then he is not entitled to the exception engrafted upon the statute. Cause reversed, and defendant allowed sixty days from the filing of the mandate in the court below in which to answer the bill. iReversed.