Stark v. Fulton

Ethridge, J., delivered the opinion of the court. The appellant started suit in this case in the circuit court on a promissory note which had been secured by a deed of trust, after which an agreement between the appellant and the defendants C. L. Fulton and E. 0. Fulton that a loan would be procured from the Federal Land Bank and paid upon the indebtedness, and that appellant would waive or cancel her deed of trust and take a second.deed of trust for the balance of'the land. The suit in the circuit court was transferred to the chancery court by the circuit judge, and in the chancery court the appellant filed her bill setting forth the deed of trust given by C. L. Fulton and E. O'. Fulton to W. H. Reynolds. Mrs. Annie Stark, the appellant, by virtue of the settlement of the estate of said Reynolds, and by written assignment of record, became the owner of the debt. She alleged that she received as part payment of the said debt sixi hundred dollars procured from the Federal Land Bank, leaving a balance of two hundred sixty-two dollars and eighty cents which balance is evidenced by written acknowledgment of indebtedness, a copy of which is attached to the bill, also the deed of trust is attached as an exhibit to the bill; that there was a balance due of three hundred seventy-three dollars and fifty-six cents including a note for one hundred ten dollars and'seventy-six cents with six per cent, interest. It is further alleged that in order to secure the loan from the Federal Land Bank it was necessary for the appellant to cancel her deed of trust, and that it was agreed between appellant and the defendants that appellant would receive six hundred dollars, and that t'he defendants would execute a [642] deed of trust on the property embraced in the original deed of trust as a second deed of trust to secure her balance due; that, relying upon this promise, the appellant' released and canceled her deed of trust, and the loan was received and .six hundred dollars applied to the indebtedness of the complainant, and the benefits thereof were accepted by the defendants, but they neglected and refused to execute to her said deed of trust as they promised and agreed to do, and that the defendants have substantially no other property; but Mrs. E. 0. Fulton is a necessary party to the cause by virtue of the fact that she is the wife of E. O'. Fulton and that she and her husband occupy the above described land as a home. The bill prays for a specific performance of the agreement to compel the defendants to execute the deed of trust according to the agreement to the extend of the amount now owing with interest; or that a lien be decreed upon the property, and prays for all special and general relief meet and proper. The agreement referred to in the bill made an exhibit reads as follows: “Starkville, Miss., July 30; 1921. ‘ ‘ This agreement as follows: E. 0. Fulton being indebted to Mrs. Annie Stark in the sum of nine hundred eighty-five dollars and fifty cents, evidenced by promissory notes and trust deeds upon the land upon which application is made to Federal Land Bank of New Orleans, La., for a loan, through Self Creek NFLA of Starkville, Mississippi, it is hereby agreed by and between the parties that if the loan be secured from, said Federal Land Bank, said Mrs. Stark is to receive the sum of six hundred dollars direct from the Federal Land Bank of New Orleans, La., upon receipt of which she will cancel her trust deed and satisfy her lien upon said land, three hundred thirty-three dollars; that said E;. O'. Fulton will then execute to said Mrs. Stark second trust deed upon said land to .secure the balance due her upon said Df/T, [643] said Ffilton’s wife to join in the execution of said obligation. “[Signed] E. O'. Fulton, “Mrs. Annie R. Stark. “By C. R. Stark. “Witnesses: “Joitn'DI. Gbbeinei, Jr. “G-. Odie Daniel.” The bill was demurred to separately by O’. ¡D. Fulton, and E. 0. Fulton and Mrs. E. 0. Fulton, and the demurrer was sustained and the bill dismissed without prejudice, for the reason, as stated by the chancellor, that the bill does not present a cause for equitable relief and that the complainant, if she hasi any claim against the defendants or either of them, will find her recourse -in a civil action for debt, from which decree this- appeal is prosecuted. The chancellor evidently proceeded upon the theory that the wife of E. O'. Fulton did not sign the agreement to execute the second déed of trust on the land as she did not sign the agreement, and that the court could not enforce by specific performance an agreement by the husband to encumber the homestead. The bill nowhere shows that the original deed of trust was void. It does not show that E. 0. Fulton at that time was a, married man or was living upon the land. The presumption is that legal instruments are valid, unless the invalidity appears upon their face when they are duly executed and acknowledged. We must therefore assume that the original deed of trust to Reynolds was a valid and subsisting deed of trust upon the interests of the grantors in the original deed of trust, and that it was in force as a legal instrument when the agreement was made, that the owner would accept six hundred dollars and a second deed of trust on the said lands in satisfaction of her first lien, and, as the bill alleges this agreement was carried out on appellant’s part and par [644] tially executed ou the part of the appellees, relying on the faith of the agreement, that appellant’s lien will not in equity be lost. E'quity regards that as being done which ought to be done, and, as the original lien was in force and valid at the time of the said agreement, equity will preserve the lien and the court should have retained jurisdiction. .If for any reason the original instrument was void that , would have to be pleaded. By section 289 (g), Bjemingway’s Code (section 532-, Code of 1906), it is provided that “the chancery court shall have full jurisdiction in . •. . all cases transferred to it by the circuit court, or remanded to it by the supreme court. ’ ’ No exception appears to have been taken to- the action of -the circuit court in transferring the cause to the chancery court, and the cause- being transferred because in the- opinion of the circuit court the chancery court was the proper forum, that court ought to have retained. jurisdiction and granted whatever relief the appellant was. entitled to, whether that relief be strictly equitable relief or not. Therefore the demurrer should have been overruled by the chancery court, and the judgment of the chancery court sustaining the demurrer will be set aside and an order entered here overruling’ the demurrer, and the cause will be remanded with leave to the defendants, to answer the bill within thirty days1 after the mandate is received in the court below. Reversed and remanded.