Schumpert v. Dillard, Pinson & Co.

1. Conveyance. When void for uncertainty in names. A mortgage of land to “ Pinson, Dillard & Co.” is not void for uncertainty, in not giving the surnames of some of the members of the firm, and in omitting the Christian names of all of them. And even if the title only vested, by the conveyance, in those whose surnames were mentioned, the niortgage would inure to the benefit of all of the members of the firm, and they might all join in the suit to enforce it. 2. Mortgage. Valuable consideration. Pre-existing debt. A mortgage given for a pre-existing debt is not invalid for want of valuable consideration, as against a prior unrecorded mortgage, where the time of payment of the debt is extended by a note taken four days before the execution of the mortgage, if it appears that the giving of the note and the execution of the mortgage formed one transaction. 3. Chancery. Practice. Notes exhibited in foreclosure suit. In a suit to foreclose a mortgage, if the debtor has given a promissory note, or other personal obligation, for the debt secured by the mortgage, it must be produced at the hearing of the cause, or its loss or destruction proven. And where there has been a renewal note given, unless it appears that the first note has been surrendered, the creditor must exhibit both notes on the hearing. 4. Same. Foreclosure suit Statute of limitations pendente lite. A suit brought to foreclose a mortgage, within the statutory limitation, cannot be affected by the fact that the note given for the mortgage debt becomes barred after the filing of the bill, but before the hearing of the cause. 5. Same. Mortgage. When discharged by subsequent security. A defendant resisting the foreclosure of a mortgage, on the ground that it has been paid and discharged hy a deed in trust subsequently given, must, by proof, overcome the presumption of law that the deed in trust was taken only as further security for the debt, and not in payment and discharge of the mortgage.

Appeal from the Chancery Court of Clay County. Hon. L. Brame, Chancellor. The case is stated in the opinion of the court. 1. A fatal defect in the mortgage is that it is made to the “ firm of Pinson, Dillard & Co.” “A grant to L. B. & Co. vests the title in L. B. alone. Winter v. Stock, 29 Cal. 411; Gossett v. Kent, 19 Ark. 607 ; Arthur v. Weston, 22 Mo. 370 ; Jackson v. Sisson, 2 Johns. Ch. 321; Beaman v. Whitney, 20 Me.; Fanshaw ’s Oase, F. Moore, 229 ; 1 Wood, on Conv. 162 ; Jackson v. Corey, 8 Johns. 388 ; Hornbeck v. Westbrook, 9 Johns. 74; Moreau v. Sufferans, 3 Sneed, 595 ; Jarvis v. Babcock, 5 Barb. 139; Hornbeck v. Sleight, 12 Johns. 199; McGuire v. Ramsey, 4 Eng. (Ark.) 518; 3 Washb. on Real Prop., 3d ed., 237, 238 ; 1 ib. 574, and note 1; Wanderlin v. Cadozan, 50 Cal. 613; McCauley v. Fulton, 44 Cal. 355. “A grant to ‘ A or B ’ is void for uncertainty.” 3 Washb. on Real Prop., 3d ed., 239, 529, sec. 29, and note 4. A grant to a person by surname only, -without something to show who was intended, is void for uncertainty. 3 ib. 238, and note 9. This mortgage to the “ firm of Pinson, Dillard & Co.” must certainly be void for uncertainty. If it had been made to R. A. Pinson & Co., it would have been a conveyance to R. A. Pinson alone, who would have held as trustee for the firm. If it had been a deed of trust to a trustee for the use of Pinson, Dillard & Co., no reason is perceived why the trustee should not take the legal title. But in this case the instrument calls itself a deed of trust, and yet no trustee is named. It is made directly to the “ firm of Pinson, Dillard & Co.” The evidence shows that there were two Dillards in the firm, and complainants, to make the matter still more complicated, claim that an indebtedness of “Schumpert & Petty” to “ Dillard, Pinson & Co.” was embraced and intended to be secured. In this firm of Dillard, Pinson & Co. was a foprth partner, R. L. Coffin. Under the decisions above quoted the legal title was not conveyed to R. A. Pinson, J. W. Dillard, T. B. Dillard, or P. L. Coffin. R. L. Coffin was not named, and was not a member of the firm of Pinson, Dillard & Co. There were two Dillards, and it is evident that the legal title did not pass to either, for it is impossible to tell which was the “ Dillard ” and which was the “ Co.;” and, as we have shown above, a grant to “A or B,” or “ to a person by surname only,” is void for uncertainty. The same reason and authorities apply to “ Pinson,” where “ Dillard & Co.” are left out; there only remains the surname “ Pinson,” without anything in the instrument to show what “ Pinson ” was intended. And to show that neither R. A. nor any other Christian name ivas intended, the instrument calls itself a “ trust deed,” and says that it is entered into between P. M. Schumpert, of the first part, and the “ firm ” of Pinson, Dillard & Co., of the second part. The conveyance is to a “firm,” a partnership, which has no corporate existence, and is incapable of suing or being sued as a firm, without some designation of who compose the firm. 1 Chitty’s PI. 11, 12, margin, and notes. In fact, the members comprising a “ firm ” might be changed ad libitum, as is frequently done, and still retain the firm-name, and if the members can claim anything at all, it cannot be more than an equitable title. No legal title is conveyed to any of them. Ilornbeclc v. Sleight, 12 Johns. 199. Besides, it is made to “ the firm of Pinson, Dillard & Co.,” and their heirs, etc. A “ firm ” cannot have heirs, executors, or administrators, and if it could be held' that Pinson was sufficiently designated for him to take the legal title, yet when he died there was no person designated who was to take, and the legal title was either in nubibus or reverted back to P. M. Schumpert, and from him to Wier — in either of which cases Wier’s superior equity would be let in. 2. We think that it is shown and admitted that the original mortgage was taken to secure a pre-existing debt, and that complainants have utterly failed to show any new or binding consideration. In such cases it is established more firmly than any other-principle of law that the mortgagees are not bona-fide purchasers for a valuable consideration. Perkins v. Swank, 43 Miss. 359 ; Hinds v. Pugh, 48 Miss. 268 : Wells v. Morrow, 88 Ala. (n. s.) 125 ; Boydr. Bell, 29 Ala. 713; Cary v. White, 52 N. Y. 141; Dickerson v. Tillinghast, 4 Paige, 215 ; Coddlington v. Bay, 20 Johns. 637; Hamlin v. Wright, 26 Wis. ; Jenkins v. Schwab, 14 Wis. 1; Goolc v. Helm, 5 Wis. 107 ; Petrie v. Clark, 11 Serg. & P. 377 ; Stalker v. McDonald, 6 Hill, 93 ; Watkins v: Edwards, 23 Texas, 447 ; Blanchard v. Tyler, 12 Mich. 339 ; Johnson v. Graves, 27 Ark. 557 ; Cunningham v. Schley, 41 Geo. 426 ; Glinski v. Zanadski, 8 Pla. 405 ; Baze v. Arper, 6 Minn. 220; Boone v. Chiles, 10 Pet. 211; Perry on Tr., secs. 219-221; 3 Washb. on Peal Prop., 3d ed., 289, 290; 2 Hill, on Mort., 4th ed., 494, 499, 500; ib. 469, and note a; 1 Story’s Eq. Jur., secs. 410, 416, 436; 2 ib., secs. 1232, 1502, 1503; Story’s Eq. PL, secs. 604 a, 805, 807 a; ib., secs. 806, 811; 2 Am. Ld. Cas., 5th ed., 233 ; 2 Ld. Cas. in Eq. 103-109. 3. The trust deed to Pinson, Dillard & Co. was given in satisfaction of the mortgage. “Where a debt is secured by note and mortgage, the taking of a new note and new mortgage, as collateral or additional security, operates as an ex-tinguishment of the note and mortgage first given, if superior equities have intervened,” as is the case here. Cissna v. Haines, 18 Ind. 496. “ When the payee of a mortgage note gave it up, and took a new note for a different amount, and without any agreement to show that it was still to be secured by the mortgage, he loses his right to the security, as against other creditors also secured by the same mortgage.” Wilhelm v. Leonard, 13 Iowa, 330. Suppose the new note was for a larger amount; it could not be secured by the mortgage even by agreement. If it is for a smaller amount that is partly paid, it must be shown that it was agreed for the new note to be secured by the mortgage. Dunshee v. Parmelee, 19 Vt. 172. ‘ ‘ When a mortgagee takes from the mortgagor another mortgage on the same and other property, extending the law-day and securing other creditors, the taking of the pew note and new mortgage is a waiver of the right to enforce the first.” Billingsly v. 'Harrell, 11 Ala. 775. “ For no creditor can claim under a mortgage, whose debt was not originally intended to be secured by it.” Vose v. Bowman, 6 Wall. 452. All the objections apply in the present case : first, superior équities have intervened ; sfecond, the new note and trust deed is for a different amount; third, it is not even contended that there was any agreement that the old mortgage was to continue in force ; fourth, a new creditor, R. L. Coffin, comes in, with an indebtedness, not from Schumpert,-but from “ Schumpert & Petty;” fifth, the law-day is extended; sixth, the trust deed is not on all the same property; seventh, there was an actual contract that the mortgage was to be given up or destroyed. All the authorities we have been able to investigate hold that the Chancery Court will keep alive a prior mortgage after a renewal mortgage has been given, so as to cut out intermediate incumbrances ; but no one has held that the mortgage will be kept alive so as to cut out a prior equity to itself. It was always allowable for a party with a prior equity to buy in a prior legal title, so as to.protect his equity, and this though it was a mere naked legal title. Equity favors the prior equity, and'no reason can be shown why it should keep alive a junior legal title to defeat a prior equity. It keeps alive the prior legal title, in cases of intermediate incumbrances, to protect the prior equity, and the doctrine contended for by complainants would ■ suhvert the very foundation of the equity doctrine on this subject; and we think the doctrine in Oissna v. Haines, 18 Ind. 496, is the true one. 1 Story’s Eq. Jur., sec. 64 c, and notes. 4. No decree of foreclosure can be rendered on a mortgage and note without their production, or an accounting by affidavit for their absence. Young v. McKee, 13 Mich. 552; Bucas v. Harris, 20 111. 165; Bennett v. Taylor, 5 Cal. 502; Sowarby v. Bussell, 6 Robt. (N. Y.) 322 ; Burgwin v. Bichardson, 3 Hawks, 203; Carr v. Bielden, 18 111. 77; Ben v. Wade, 1 Spen. 291; Harlan v. Smith, 6 Cal. 173; Bunshee v, Parmelee, 19 Yt. 172; Beers v. Haioley, 3 Conn. 110; White v. Harrison, 11 111. 361; Wilkins v. Wilkins, 4 Port. 245-249 ; May v. Taylor, 22 Texas, 348; Vickery v. Bester, 4 How. (Miss.) 293 ; Brown v. Sadler, 13 La. 205 ; Pipes v. Norton, 47 Miss. 61; Story on Prom. Notes, sec. 106 ; 2 Hill on Mort., 4th ed., 200, secs. 57-59 ; ib. 201, secs. 61, 62. “It does not make any difference that the answer admits the execution of the mortgage and note. They must be filed in the cause and produced on the trial.” Young v. McKee, 13 Mich. 552. “ Where the existence of the mortgage and note is disputed, they must-.be produced, or their absence satisfactorily accounted for, and there must be a finding on this issue.” May v. Taylor, 22 Texas, 348; 2 Hill, on Mort., 4th ed., 200, sec. 58. Here the validity and existence of the original mortgage and note is disputed by both answers and the evidence of Schumpert and T. C. White. 5. A judgment in a court of concurrent jurisdiction makes the matter res adjudicata in' both. Houston v. Boyston, 1 Smed. & M. 238 ; McCraven v. Borbes, 6 How. (Miss.) 569 ; Greeny. Bobinson, 5 How. (Miss.) 80; Glidewéll v. Hite, 5 How. (Miss.) 110. Complainants cannot claim that they failed in the Circuit Court because they could not attack the bona fides of Wier’s deed.- . Fraud is cognizable both at law and in equity, and if a party' fails to set it up at law, he cannot do so in equity. ■ Brewer v. Harris, 2 Smed. & M. 84; Allen v. Hopson, Freem. Ch. 276. Ejectment can be sustained on a mortgage. Trustees Jefferson College v. Hickson, Freem. Ch. 474; 2 Hill, on Mort.,-4th ed., 115, sec. 2; ib. 123, secs. 11, 12; ib, 127, sec. 17. Besides, they have by written agreement abandoned the ground that the deed to Wier was “ a sham; ” and if the court, had jurisdiction on tMs gronncl, they have, voluntarily ousted the jurisdiction. It was true they could still file a bill against Schumpert to-foreclose, btit .they could nokmake Wier a party, for the question of legal title, as to him, was res acljudicata, and he was .a prior incumbrancer. Story’s Eq. PL, secs. 148, 193, 230. Now, if they could make him a party at all, it must be expressly as'a prior- incumbrancer. The Circuit Court case was. commenced in 1872,. and ended on August 3, 1874, and the chancery suit was not commenced till September, 1874, after Wier’s rights had been fixed -by the Circuit Court. Story’s Eq. PL, sec. 193. 6: Refusing to permit the defendants to file amended or supplemental answers, showing that both the mortgage and trust notes had become barred by the statute of limitations pendentelite, was'error. > We think the laws justify us in saying that, when the note becomes barred by the statute of limitations, the lien of the mortgage expires with it, and that the note may become barred pendente lite a suit on the mortgage. Adams’ Eq., 3d Am. ed., 307 and note 1, marginal p. 110; Huntington v. Babbitt, 46 Miss. 533 ; Maddox v. Jones, 51 Miés. 531; Blodgett v. Waltham, Hill & D. Supp. 65 ; Sherman v. Sherman, 3Tnd. 337 ; l.Hill. onMort., 4thed., 474, andnote a ; 2 ib. 27, sec.- 28, and note 2 ; Heirs of Boss-v. Mitchell, 28 Texas, 150 ,- BerJcins v. Sterne, 23 Texas, 561; Tuclcer v. Shade, 25 Ohio St. 355; Yates v. Weeden, 6 Bush, 438. ‘ The chancery-suit cannot keep alive the note. “ When any mortgage or deed in trust shall be given, or shall have b'een given, to secure the payment of any sum of money specified in any-writing, no action, suit, or other proceeding shall be brought or. had upon such mortgage or deed in .trust but within the time that may be allowed for the commencement of an action at law,- upon- the writing, in which the sum of money secured by such mortgage or deed of trust may be specified; and in all cases where the remedy at law to recover the debt shall be barred, the remedy in equity on .the mortgage shall be barred.” Code 1871, sec. 2150; Partee y. Mathews, 53 Miss. 140 ; Eggleston v. Watson, 53 Miss. 339. If the Legislature had intended that the chancery suit should keep alive the mortgage, the first clause of this statute was all that was necessary; but the latter clause is totally repugnant to any such construction, and unequivocally evinces a contrary intention. And this intention is still more manifest under the Code of 1857, under which this mortgage and trust deed were made, for there the two clauses pf the statute are wholly disconnected. Code 1857, p. 399, art. 4. The only question is, “Is the remedy at law to recover the debt barred? ” If a creditor obtain judgment, and then file a bill to set aside a fraudulent conveyance to make his judgment effective, it does not keep alive the judgment lien, but the same, unless sued on or revived, will become barred pendente lite. McGutchen v. Miller, 2 Geo. 65. If a chancery suit cannot keep alive a judgment on a note, it is difficult to see how it can keep alive a note before judgment. The mortgage is a mere security for the note, and the note has never been sued on, or ever filed, or produced in the chancery suit'. The Chancery Court has never had the note under its jurisdiction or control. 1. It.is claimed that .the mortgage is fatally defective, in being made to “ Pinson, Dillard & Co.” The authorities cited on this point do not sustain the idea of such a defect as will vitiate the mortgage or destroy the lien. It is said by counsel for the appellants that “ a grant to a person by surname only, without something to show who was intended, is void for uncertainty.” 3 Washb. onRealProp. 238,note 9. linsist that the conveyance to “Pinson, Dillard & Co..” is sufficient to show what persons were meant in the deed, and that it cannot be void for uncertainty, in accordance with the principle above cited. 2. The appellants object that the original mortgage to Pin-son, Dillard & Co. was given to secure a pre-existing debt. This involves the question as to whether Pinson, Dillard & Co. were purchasers for a valuable consideration. Extension of time in the payment of the debt is a valuable consideration. 2 Hill, on Mort. 448, sec. 40 ; Byron v. Gummings, 41 Miss. 192; Gary v. White et al., 52 N. Y. 138. Dillard in his deposition says there was an extension of time, and Schumpert says the same thing. 3. It is contended in the answer of the appellants that there was such a novation in the reception of the new note and deed of trust as extinguished the old note and mortgage, because of the insertion of Coffin’s name in the new security. But Coffin had an interest in the original debt as secured, and the leaving of his name out of the papers does not preclude him from asserting his rights under them. Novation is the substitution of a new obligation for an old one, which is thereby extinguished. To effect such a transformation, several things are requisite, one of which is, there must be an express intention to innovate; there must be the animus novandi — a novation is never presumed. In this instance, as an evidence that there was no intention of a novation, complainants held both the old and new securities. No mere agreement for the transformation of one contract into another is of effect until carried into execution; a good novation is an accord executed. 2 Bouv. L. Die. 243, sec. 9 ; 1 Pars, on Con. 217; Ranster v. Ford, 46 Miss. 289 ; Lewis v. Storke, 10 Smed. & M. 120 ; 2 Pars, on Con. 681. To constitute accord and satisfaction, the agreement must not be merely executory, but executed and accepted. Barnes v. Loyd, 1 How. 584; Gisson v. Doherty, 43 Miss. 538 ; 2 Pars, on Con. 687. A mortgage can only be canceled by payment or an express release. 1 Hill, on Mort. 476, sec. 3; Summers & Brannin v. Roos <& Go., 42 Miss. 749. A new note executed by a mortgagor, and delivered in lieu of one previously given, does not affect the security. Whittaker v. Dick <& Go.,. 5 How. 296. A party having a specific lien upon property cannot be divested of it, except by some distinct act of his own amounting to a waiver or absolute abandonment of it. Heard v. Hvans, Freern. Ck. 79 ; Paris v. Kelley et al., 10 Smed. & M. 184. When parties intend the substitution of a new debt or obligation for an old one, their intention to that effect should be positively declared, or, in whatever way expressed, be made so evident as not to admit of a doubt. Ooelsrell v. Johnson, 28 Ark. 193; Smith v. Poster, 5 Oreg. 44. 4. It is assigned for error “that the decree was rendered without the production of the mortgage and trust deed and notes.” The record shows that there was never any demand made for the production of the original mortgage, deed of trust, or notes, until an account was ordered to be stated by the commissioner, when the chancellor decided that they were not required to be produced; hence there has been no failure to account satisfactorily for the absence of these papers. Many precedents are cited by opposing counsel on this point, many of which are under statutes of particular states. Under our state decisions, however, it is not required to produce the mortgage and note. The indebtedness is not denied in Wier’s answer; it is admitted in Schumpert’s answer, and proven by Dillard’s testimony. The only purpose of producing the mortgage or note is merely as instruments of evidence. A certified copy of the mortgage is on file, which is sufficient under the statute, unless non est factum is pleaded. In a proceeding to foreclose a mortgage, when the answer admits the execution of the mortgage and note, and does not deny that the amount claimed in the petition is due, there is nothing for the plaintiff to prove. Qooley v. Hobart, 8 Clarke (Iowa), 358. “A question might be made whether anyone but the makers of the note could insist on its production at the trial. They have admitted the debt by the mortgage, and this is sufficient to charge third persons with notice of the debt secured. The only reason why the makers could insist on the production of the note is that it may have been indorsed, and a third person may at any future period present it for payment. Dean et al. v. Lizardi et al., 2 Cushm. 425. “The mortgage, though but a collateral security, is the foundation on which the jurisdiction of a court of chancery rests. In this proceeding the notes are immaterial. If it describe the debt intended to be secured by it, that is sufficient, even though no note be given. It is taken to' secure the payment of the debt; the note is but evidence of the debt.” Morse v. Glayton, 3 Smed. & M. 373. In the case at bar the existence of the mortgage and note is not disputed; the only question is whether the deed of trust and note were taken in satisfaction and extinguishment of the mortgage and note. . 5. It is also objected by the appellants that the matters involved in this suit are res adjudícala. We deny that the merits of this case were involved, or could be involved, in the former suit. Agnew v. Mcllroy, 10 Smed. & M. 352. The former suit was an action of ejectment, involving the legal title to the land in controversy, derived from a sale under a deed of trust, in which no title had passed, because the legal title had previously been conveyed in the mortgage, and was outstanding in the mortgagees. In the ejectment suit, the object was to recover possession of the land on the strength of the legal title ; in this it is sought to subject the land to sale for the satisfaction of the debt the mortgage was given to secure. The former action was incompetent. Qoopwood v. Baldwin, 3 Cushm. 129. A judgment, or any other pleading, which does not go to the foundation of the action, is not a bar to a subsequent suit. Johnson v. White, 13 Smed. & M. 584. A judgment is conclusive only in respect to the grounds covered by it, and the law and facts necessary to support it. The People v. Johnson, 38 N. Y. 63 ; McKnight v. Dunlap, 4 Barb. 136 ; Shannon v. Bnglehart, 34 Barb. 198. The jurisdiction of the two courts is not concurrent in reference to the matters passed upon in either suit. 6. It is also assigned as error, the “ refusing to permit the defendants to file amended or supplemental answers, showing that both the mortgage and trust deed had become barred by the statute of limitations pendente lite.” An application of "this sort comes too late, after the cause has been' heard and the chancellor ready to render a final decree, even if there were substantial grounds for the application. But we think that the statute of limitations.' cannot be pleaded in -the manlier here proposed. '.