Baldwin v. Jenkins

Mr. Chief Justice Smith delivered the opinion of the court. This was a bill in the circuit court of Yazoo county, for a foreclosure and sale of land, alleged to have been mortgaged by the defendant, Jenkins. The first question in the case is in regard to the character and effect of the valid agreement, indorsed upon the deed of conveyance from Duval to Jenkins. The facts of the transaction were as follows: The land had been previously conveyed in trust, to said Duval, by Battaile & Brashear, to secure the payment of certain notes, made by the grantors. Duval, at the instance of W. S. Eskridge, an assignee of one of these notes, advertised and sold the land, agreeably to the terms of the trust-deed. The sale, according to its stipulations, was to be made for cash. Jenkins became the purchaser, having a previous understanding with Eskridge, the beneficiary under the trust-deed, [210] that he should have time for the payment of the purchase-money, giving personal security, and a lien upon the land, to secure the payment. A deed to Jenkins, by the trustee conveying the land in fee, was executed on the 5th of December, 1840, the day of sale. A receipt for the purchase-price of the land, and a discharge therefor, of the trustee, by Eskridge, was indorsed thereon. At the same time, and in execution of the previous understanding, an agreement was indorsed on the said deed, which was signed, sealed and acknowledged by Eskridge and Jenkins, by which it was contracted, that Esk-ridge should take from Jenkins these promissory notes, payable in one, two, and three years, respectively, from date, each for the sum of $320, to be drawn by said Jenkins, and T. H. Kell; and that “this should act” as a lien upon the land before mentioned, until the notes should be satisfied in full. The deed, with the indorsements, was delivered to the registrar of deeds, for record on the day of its execution. There can be no question, that, according to settled doctrine, the indorsed agreement became a part of the -deed of conveyance from Duval to Jenkins; as much so as if it had been incorporated with it. Harrison v. Trustees of Phil. Acad., 12 Mass. 456; 4 N. Hamp. R. 171; 3 Bibb’s R. 10 ; 4 Kent, Com. 141-143. Hence, by tlie deed of Duval to Jenkins, it is expressly declared, that it shall operate as a lien upon the land, as a security for the payment of the money specified in the notes. The clear and certain intention of the parties in equity must determine the character of the instrument. In this case the facts exclude all doubt. It was the evident design of the parties that the land conveyed should stand as a security for the purchase-money, in addition to that afforded by the joint notes of Jenkins and Kell. The agreement indorsed on the deed, does not, in terms, affect to re-convey the land in mortgage to Eskridge. This, however, seems to have been the evident intention of the parties. No precise form of words is necessary to constitute a mortgage; and every contract for the security of money, by the conveyance of real estate, will in equity be holden as such. 7 Johns. Ch. R. 40. A deed, absolute upon the face of it, will be holden as a mortgage, if [211] such appear to be the intention. 4 Kent, Com. 142. We are bound to'regard this transaction as operating the same effect. The same view appears to have been taken of the subject by the chancellor, in the case of the Planters Bank v. Pinkerton, S. & M. Ch. R. 40, where, in the deed of conveyance, it was stipulated that the land should be bound for the payment of the purchase-money. The notes made by Jenkins and Kell were assigned by the payee; the first to Baldwin, the two last to the other complainant, George Eskridge. Upon their non-payment, these parties respectively brought suit against the makers ; obtained judgments, and levied on the land, which was sold by the sheriff. Defendant Hayman was the purchaser, (for the sum of $181, ■ an amount much less than the sum due upon the notes,) and he subsequently conveyed to the defendant Lucas. It is settled, that under the law of this state, the equity of redemption of the mortgagor is not the subject of seizure and sale under an execution at law. Thornhill v. Gilmer, 4 S. & M. 153; Goodwin v. Anderson et al., 5 Ib. 730; Prewett v. Dobbs, 13 Ib. 431. Regarding the land in contest, as subject to the mortgage lien of complainants, the sale under the executions was ineffective. Hayman acquired no title by the purchase. But it is insisted, that the complainants, by proceeding to sell the land under the executions emanating on their judgments at law, have waived their right of a foreclosure and sale of the equity of redemption. This question is settled in the case of Goodwin v. Anderson, above referred to. In that case, May was the purchaser of a lot in the town of Aberdeen. He executed two writings obligatory for the purchase-money, and took a bond for titles from the vendors, in which they stipulated to make titles when the purchase-money should be paid. The first writing obligatory, not being paid at maturity, suit was brought upon it, and the lot then in question was sold under execution at law, to satisfy the judgment. The levy of the execution on the lot was made at the instance of the vendors and that of the usee, to whom the writing obligatory had [212] been transferred. Goodwin became the purchaser, at a price less than the amount of the purchase-money. He demanded title in fee of the vendors, and, upon their refusal to make it, he filed his bill to compel them to do so. The vice-chancellor dismissed the bill; and this court, in a well considered opinion, affirmed his decree. Although in a case like the present, where the defendant in the execution has no interest in the land, which can be" seized and sold under an execution at law, the mere fact that the party occupying the attitude of mortgagee and plaintiff in the execution, directed or procured the levy and sale of the land, will not debar him of right to proceed in a court of equity for a foreclosure and sale of the mortgaged premises. Yet it cannot be doubted, that a purchaser at the sale, who should be induced to bid for the land, by the fraudulent concealment, or by acts of false and fraudulent misrepresentation, on the part of the plaintiff in the execution, would take it discharged of the mortgage lien. A more stringent rule seems to have been adopted by the chancellor in the case of Thompson v. McGill, Freem. Ch. R. 401. This case is irreconcilable with that of Goodwin v. Anderson. Moreover, the facts of that case do not appear fully to sustain the conclusions of the chancellor. In the case at bar, it does not appear, by direct evidence, that the land in question was executed and sold at the instance of the complainants. It is true, however, that one of their attorneys was present at the sale, and bid for the land. But, admitting that the levy and sale were had by their direction, in that respect it would be precisely the case of Goodwin v. Anderson. There is no pretence for charging the complainants or their agents with improper or fraudulent conduct. The deed to Jenkins, with the indorsed agreement thereon, had been duly recorded. This was notice to all, of the character of Jenkins’ interest in the land. The evidence shows that Hayman had sufficient notice of the existence of complainant’s lien, to have put him upon inquiry. It was certainly not the complainant’s fault, if he trusted to the statement of the sheriff, that he [213] thought the title would be good, as the land was to be sold for the purchase-money. The land was sold, according to the evidence, for less than one half of its cash value, at the time. This is a circumstance, though of no very conclusive character, from which it may be inferred, that the bidders at the sale were not ignorant of the fact that Jenkins’ title was not perfect. Under these circumstances, it would be unjust to hold, that the complainants are precluded from asserting their lien upon the land. On the other hand, as the sale under the execution passed no title to the vendee, and as the proceeds of the sale were applied to the satisfaction of complainant’s demands against Jenkins, it would seem to be but just and equitable, that the defendants should be substituted to the place of the judgment creditors, to the extent of the bid at which the land was struck off to Jenkins. To this view of the subject, this court seemed inclined in the cases of Gilmer v. Thornhill, and Goodwin v. Anderson. We reverse the decree of the circuit court, and remand the cause to be proceeded with in conformity to the principles here laid down.