Security Mortgage & Trust Co. v. Gill

27 S.W. 835, 8 Tex. Civ. App. 358, 1894 Tex. App. LEXIS 172
Court of Appeals of Texas·Decided October 10, 1894·No. No. 918.·Published·Cited by 16 cases

Opinion

KEY, Associate Justice.

Appellant’s first amended original petition, omitting formal parts, contains the following averments, viz: That on the 20th day of July, 1889, one J. T. Somerville executed a deed of trust or mortgage on the 600 acres of land, for the rent of which the suit was brought, to secure appellant in the payment of six notes, one for $86.65, and five for $240 each, due on the 1st days of December of 1889, 1890, 1891, 1892, 1893, and 1894, respectively. That it was stipulated in said deed of trust, that if any of said notes should mature and not be paid, at the option of the legal holder of said notes all of the same should at once become due and payable. That default was made in the payment of the one of said notes which matured December 1, 1891, and appellant, on the 9th of May, 1892, exercised its option and declared all of said notes to be then due and payable, and had the trustee in the mortgage or deed of trust to advertise and sell the 600 acres of land covered by the mortgage, on the 8th of June, 1892; and appellant became the purchaser and received from the trustee a *360 good and valid deed therefor, and thereby became the legal owner of said land on the 8th day of June, 1892, and has ever since been the owner of the same, and entitled to the possession thereof and the rents and profits from the same. That on the 27th of November, 1891, Somerville, the mortgagor, made a lease of the 600 acres of land to appellee B. Bush for the year 1892, and that appellee Bush agreed to pay Somerville for- the use of said land for the year 1892 the sum of $1200, and gave his notes for said amount, to wit: three notes for $400 each, due respectively October 1, October 20, and November 20, 1892. That Somerville transferred the notes to the appellee John A. Gill, and that Gill is demanding that the appellee Bush pay to him said amount of $1200 for the rents of said land, and hinders and prevents Bush from paying it to plaintiff (appellant). That the reasonable rental value .of the farm is $1500 a year, and the appellant is entitled to rent for the year 1892. That if appellee Gill paid a valuable consideration for said rent notes (which is not admitted, but denied), he bought the same with full knowledge, both actual and constructive, that Somerville was, at the time of the alleged transfer of said notes to him, in default in paying plaintiff the mortgage notes; and that, under the deed of trust securing the same, appellant had the right and power at any time to foreclose the mortgage and divest the said Somerville, the lessor, of all right to the possession of the land and undue rents thereon. Appellant prayed for the rents due for said farm for the year 1892, and for general and special relief.

The defendant Bush answered, that he owed the money, $1200, and deposited the same in court, and prayed that the court determine to whom it belonged. Defendant Gill interposed a general demurrer to appellant’s petition, which was sustained; and judgment was rendered against Bush in favor of Gill for the full amount of the notes. Only the plaintiff has appealed, and the correctness of the court’s ruling on the demurrer is the only question to be decided.

At the common law, as a general rule, rent not due when the land is sold is regarded as an incident to the reversion and passes with it to the purchaser, and is not apportionable as to time. This doctrine was applied in Hearne v. Lewis, 78 Texas, 276, where it was held, that a note given by a tenant for rent and payable to an administrator was owing to and collectible by one who, during- the term of the lease, but before the maturity of the note, purchased the rented premises at a probate sale made by the administrator. To this general rule there are exceptions, however, and the rent may be severed from the reversion, in which case a subsequent grant of the reversion does not ordinarily pass the rent. 12 Am. and Eng. Encyc. of Law, 754. There .can be but little doubt that an assignment of a note given for rent will, in law, sever the rent from the land.

In Childers v. Smith, 10 B. Monroe, 235, the Supreme Court of Kentucky say: “The third plea relies upon the common law principle that the legal title to the rent is incident to the reversion and passes *361 with it, unless expressly reserved in the grant. But this principle, though substantially true as' stated, is not literally or universally so. For the rent, though an incident of tbe reversion, may be separated from it by a grant of the rent alone, in which case a subsequent grant of the reversion does not pass the rent. And if the $200 secured by this note is to be regarded as rent, and if the five year’s’ lease for which it was to be paid was carved out of the present legal interest and estate of the plaintiff, leaving the immediate reversion in him, then, as the execution of the note for this rent to a third person certainly vested in him the legal title to the rent (at least as far as-secured by the note), it seems necessarily to follow that the legal title to the rent and to the reversion, being thus in different persons, and therefore actually separated, the former was no longer an incident to the latter, and did not and could not pass by a subsequent grant of the reversion.”

Considering the same subject, the Supreme Court of Alabama, in Insurance Company v. Oliver, 78 Alabama, 158, used this language: “A different rule applies when the claim for rent is assigned while the lessor is the owner of the reversion. Being the holder and owner of the claim, and having the right to transfer it, his assignment passes to the assignee all his rights thereto, and effectually severs the rent from the reversion. If the lessor subsequently conveys the reversion, tbe rent, having been thus severed, does not pass as incident thereto. The legal effect of the deed can not operate to pass what the lessor does not own, however general and absolute may be its terms.”

Our own Supreme Court, in Willis v, Moore, 59 Texas, 628, held, that the sale of the crop growing or standing in the field ready to be harvested would operate as a severance of the crop from the land, so that the crop would not pass to the purchaser of the land. See also 1 Washburn’s Beal Property, fifth edition, page *338.

This narrows the case down to one controlling question, which may be thus stated: As against a mortgagee holding under a mortgage executed and recorded prior to the making of the lease contract, has a mortgagor the power to sever the rent from the reversion, so as to prevent an application of the doctrine applied in Hearnev. Lewis, supra?

If the common law rule, that a mortgage vests title with right to possession and revenues in the mortgagee, prevailed in this State, he might have some ground upon which to predicate an objection to the mortgagor’s assigning a claim for rent owing for the use of the premises anterior to a foreclosure of the mortgage. But such is not the rule here. With us, it is well settled that a mortgage is a mere lien upon the property and vests no estate on the mortgagee;, and in this respect there is no distinction between a mortgage and a deed of trust. Wright v. Henderson, 12 Texas, 43.

In view of this difference between the rights of the mortgagee at common law and under the law of this State, it was held in Willis v. Moore, supra, that an unharvested crop raised by the mortgagor upon the mortgaged premises belonged to him, and that his sale thereof be *362

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Security Mortgage & Trust Co. v. Gill, 27 S.W. 835, 8 Tex. Civ. App. 358, 1894 Tex. App. LEXIS 172 (Tex. Ct. App. 1894).

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