Brooks v. Kelly

63 Miss. 616

Opinion

Cooper, C. J.,

delivered the opinion of the court.

The foreclosure sale under which the complainant purchased the lands in controversy had not been confírmed by the court at the date of the institution of this proceeding, nor had there been confirmation m pais by persons authorized to ratify the sale. Before the day of sale Butler had parted with his entire interest in the lands, and thereafter could do no act prejudicial to the rights of his vendees. It is true that Brooks was a purchaser pendente lite of the equity of redemption, and because he was he took subject to whatever action should be taken in the suit, and upon confirmation by the court his title to the equity of redemption would be cut offj but he was not affected by any act of ratification in pais by Butler. The confirmation by the court of the sale under which Kelly bought since the institution of this suit cannot be considered for any purpose ; Kelly was not the owner of the land when he exhibited his bill, and because he was not he can have no relief on it predicated on that relation to the property. We approve the action of the Chancellor in treating the complainant as a mortgagee? and this, of course, disposes of the claim asserted by Sweatman.

As between tlje complainant, Kelly, and the defendants, Martin and Brooks, this condition of things exists: the defendants are senior mortgagees (or trustees of the legal title with a charge ou the land) for the sum originally due from Butler to Martin, with legal interest thereon; Kelly has a second mortgage upon the land for the sum due from Butler to Kelly & Co., and Brooks and Martin, subject to these two mortgages, are the owners of the equity of redemption in the land. Kelly is not bound by the sales made to Shirley and Brooks, for he never assented thereto, and his rights cannot be affected by contracts to which he was not a party. On the other hand, he cannot recover from Brooks and Martin the rents and profits of the land for the time they have been in possession. He was qot entitled to them as against Butler while he was in possession of the land, and would not now be if he were yet the owner. He cannot, therefore, collect them as debts due to him from Brooks and Martin. Butler, having sold the equity of redemption, is not entitled to such rents as mortgagor, and because he is not they cannot be applied as credits on the debt which constitutes a prior charge on the land in favor of Brooks and Martin. The Chancellor, therefore, rightly refused to direct an account to be stated of their value. He also was right in directing an abatement of all interest after the respective sales by Butler to Shirley and Brooks on the sums for which the parcels of land were sold ; as between Butler and defendants, Martin and Brooks, each sale was a liquidation of the mortgage debt to the extent of the price at which the land was taken.

Accepting as correct the account stated in the court below (and no exceptions were taken to the items thereof), it appears that Martin and Brooks, as against Kelly, are entitled to a prior charge on the property for the principal and interest of the debt originally due by Butler to Martin, to wit, the sum of two thousand three hundred and thirty-one dollars and thirty-five cents; Kelly, as second mortgagee, is then entitled to full payment of his mortgage debt, to wit, the sum of one thousand seven hundred and eighteen dollars, and the remainder of the proceeds of the sales of the lands should then be returned to Brooks and Martin, the owners.

The objections we find to the decree of the Chancellor are that it concludes Kelly by the sales made to Shirley and Brooks, to which sales he did not and has not assented; and also that it subjects Brooks’ lands to sale for payment of the sum awarded to Kelly, and turns Brooks over to a new litigation with Martin for relief as to matters which can be settled in the present suit.

On a former appeal between Martin and Brooks we sustained a demurrer interposed by Martin to a cross-bill exhibited against him by Brooks, by which independent relief was sought on this state of facts. When Brooks advanced for Butler the sum which was necessary to pay off Martin, Martin executed to him a warranty deed for the lands (except the lands which had been sold to Shirley), and because of this warranty, and for a prospective breach of it by the decree which he apprehended might be made in this suit, Brooks, by his cross-bill, sought to procure a decree over against his co-defendant, Martin, in this suit. We then held, and properly, that a mere prospective danger of injury did not amount to a breach of warranty, and that in no event could that be made the subject of a cross-bill in this suit. But it does not follow because a cross-bill, improper in one respect and unnecessary in another, was not permitted to be exhibited the equities of all the parties should not be kept in view and enforced, as far as practicable, in granting relief on the original bill. This seems to have been appreciated by the learned Chancellor, who puts his decision directing the sale of the Brooks land and exonerating that of Martin, on the ground that, in the sale to Shirley, Martin did not get more than he was then entitled to receive. This is true, but it is also true that Kelly’s right to subject the Shirley land was not at all impaired by this sale, that Shirley subsequently re-conveyed the land to Martin, and that this is a suit against each and every part of the whole body of land mortgaged by Butler, and this being the case, the equities of the defendant owners, as between themselves, ought to determine the method of sale. On this branch of the case the facts are that in 1874 Martin, with the consent of Butler, sold to Shirley one hundred and sixty acres of the land at the price of one thousand two hundred and fifty dollars, credited Butler with that sum, and afterward, by purchase from Butler, re-acquired the land. In 1877 Martin, claiming that Butler then owed him one thousand eight hundred and ninety dollars and ninety-two cents, received that sum from Brooks as payment by Butler, and conveyed by warranty deed the remainder of the land to Brooks, who was to hold the title as security for the money advanced for Butler. It now appears that of the sum so paid eight hundred and nine dollars and fifty-seven cents was usurious interest, which Martin had no right to demand or receive, and which has, therefore, been disallowed by the court. This should be refunded, if necessary, by Martin rather than paid again by Brooks. A proper result in this respect can be reached by apportioning the prior charge, two thousand three hundred and thirty-one dollars and thirty-five cents, to which Brooks and Martin are entitled, as follows : one thousand eight hundred and ninety dollars and ninety-two cents to Brooks, and four hundred and forty dollars and forty-three cents to Martin. This puts each party in the position he agreed to occupy—Martin with the Shirley land at one thousand two hundred and fifty dollars, of which he has received eight hundred and nine dollars and fifty-seven cents in the collection of the usurious interest, and for the remainder of four hundred and forty dollars and forty-three cents he has a prior charge on it, and Brooks with the land conveyed to him, charged in his favor with the sum he advanced on it, one thousand eight hundred and ninety dollars and ninety-two cents. Neither Kelly nor Martin are required to refund to Brooks the sum he paid to Butler to obtain possession of the land held by him, nor are Kelly or Brooks required to make good to Martin the difference between one thousand two hundred and fifty dollars and the sum he paid to Shirley for his land.

It is necessary that both tracts of land shall be sold, for Kelly is entitled to nothing unless both tracts produce a sum in excess of the prior charge of two thousand three hundred and thirty-one dollars and thirty-five cents. And out of any surplus that may exist after the payment of that sum he is entitled to full payment of his debt. As the record now presents the case in condition for a final decree, and in view of the fact that this is the sixth appeal which has been taken in it, we will enter a final decree here.

The decree of the court below is affirmed on the appeal of D. L. Sweatman, and is reversed on the appeal and cross-appeals of Brooks and Kelly. The commissioner appointed by the court below is appointed commissioner to execute this decree. He will sell, according to law, all the lands described in the bill and claimed to be included in the Kelly mortgage, making separate sale of that owned by Brooks and that owned by Martin. Out of ■the proceeds of sale he will first pay the costs of executing this decree. If the aggregate amount then remaining in his hands shall not exceed the sum of two thousand three hundred and thirty-one dollars and thirty-five cents and interest thereon at six per cent, from October 15, 1885, he will return to each owner the amount realized from the sale of his land less one-half of the costs of executing this decree; if the aggregate amount shall exceed the said sum of two thousand three hundred and thirty-one dollars and thirty-five cents, and interest, he shall pay to the defendant Brooks, from the proceeds of the sale of his land the sum of one thousand eight hundred and ninety dollars and ninety-two cents, with interest thereon at six per cent, per annum from October 15,1885; he shall also in like manner pay to the defendant, Martin, the sum of four hundred and forty dollars and forty-three cents, with interest thereon at six per cent, per annum from October 15,1885, from the proceeds of the sale of his land. If, after making the payments as directed to Brooks and Martin, there remain in his hands a sum not exceeding one thousand seven hundred and eighteen dollars and interest thereon at six per cent, per annum from October 15, 1885, he shall pay the same to C. D. Kelly.

If the sum, after paying Brooks and Martin as directed, exceeds the sum of one thousand seven hundred and eighteen dollars and interest, he shall, in paying the debt due to Kelly, first exhaust the fund realized from the sale of the Brooks land, and this being done, any balance shall be paid out of the other. After so paying the debt to Kelly he shall return to Martin any sum which shall remain arising from the sale of his land, and to Brooks any sum remaining from the sale of his land. One-half of the costs of this appeal and one-half of the costs of lower court (save only the costs of executing this decree) are directed to be paid by the complainant, Kelly, and one-fourth of the same costs by each of the defendants, Brooks and Martin. The costs decreed to be paid by each party respectively shall, if not otherwise satisfied, be paid out of any funds in the hands of the commissioner to which such party may be entitled under this decree. The commissioner, having executed this decree, shall make report of his proceedings to the chancery court from which this appeal is taken for its approval.

Reversed and decree here.