Case ID: sc-eq_6/html/0395-01.html
Source: Caselaw Access Project
Author: {"author": "Nott, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

E. Thayer Assignee, &c. v. John Cramer and Martha E. Gibbes and C. Lowry.
    1826.
    
      Charleston.
    
    The bill stated that John Cramer and Thomas Bass, on the 1 Oth of April 1807, executed their joint and several bond to Jane Creighton, in the penal sum of $1,400 conditioned for the payment of $700, with interest from the date, on or before the 1st day of July 1807, together with a mortgage of all that lot of land situate in Lane in the city of Charleston, known and distinguished in a plan of the same by No. 8, measuring and containing, &c. as will appear by a reference to the said mortgage, of record in the office of Register of Mesne Conveyances for Charleston district. That the principal and interest was not paid at the time limited, but afterwards Cramer made sundry payments up to the 23d of May 1818,amountingto$S56.39. That the said Jane Creighton after executing the bond, and before the time appointed for payment, assigned to complainant all the right, title and interest which she had therein, by virtue whereof complainant commenced a suit at law in the Court of Common Pleas and obtained judgment thereon, and having taken out an execution was about to levy it upon and sell the said property, when for the first time he was apprised that the said John Cramer, after the. execution of the mortgage and before the rendition of judgment, had executed a conveyance in fee simple of all his right and interest in the premises' to Charles Lowry, who af-terwards conveyed it to Martha E. Gibbes, by reason whereof complainant could proceed no further as the legal estate had passed out of Cramer. The bill prayed for an account and payment of his debt or a foreclosure of his mortgage. The defendant relied on the statute of limitations.
    
      A purchaser with' nofdaima" title by pos-the gage being d notice,
    
      Thompson, Chancellor.
    By the act of the legislature of 1791, the mortgagor is considered as the owner of the land, and the mortgagee could not support an action of trespass to try titles until a foreclosure, and no lapse of time under twenty years will operate as a bar. The plea must therefore be overruled. This is a hard case on Mrs Gibbes, but the Court is not aware of any way to extricate her from it, except by throwing the responsibility on the shoulders of Lowry. His contract with Cramer was to take up the bond, and his not having done so was a moral fraud, whereby all this litigation and expense has occurred. It is nothing but justice, therefore, that he should bear the burthen arising from his own improper conduct. It is therefore ordered and decreed, that Charles Lowry do account for and pay to the complainant the whole of his demand with interest and costs; and in the event of his being unable to do so, that John Cramer shall pay and satisfy the demand with interest and costs; and provided he should not be of ability to do it, that then Mrs Martha E. Gibbes shall pay and satisfy the claim of complainant with interest and costs, or that the equity of redemption be forever barred and foreclosed.
    Mrs Gibbes appealed, on the ground that her possession, and that of the person under whom she claimed, gave her a title by possession.
    
      Dunkin for the appellant.
    In the cases he cited the Court held that possession would bar a judgment creditor, although the defendant might have known of the judgment. Smith v. M’Ra, 2 Bay, 339. Cholett v. Hart, 2 Bay, 160.
    
      Aprill826.
    . , A mortgage in this state vey^fee!011" the demption is past‘
    If instead of a mortgage there had been an actual conveyance, the possession of Mrs Gibbes would have been protected by the statute, and that although the purchaser had notice of the conveyance. 2 Bay, 429. Now if in those cases the statute would be a bar, what reason can be given why a mortgage should operate differently 9
    Grimke, contra.
    The sale of the fee by the mortgagor, before the judgment at law, put.it out of the jurisdiction of the law Court, and the case is one of pure equity jurisdiction.
    In jEngland the fee passes by the mortgage, and the mortgagee has his remedy by action, of ejectment. But the act of 1791 has changed the law in this respect, and places the mortgagor in possession in the situation of trustee for the mortgagee, and in such case the trustee can not protect himself under the statute. The recording of the mortgage was notice to Mrs Gibbes, and she must be regarded as the assignee of the trust, and is bound by the rules which apply to trustees. The cases of mortgages differ from judgments in this: Jfirst. In the latter there is an entire absence of the character of trustee. Second. The mortgage has a specific and the judgment a general lien.
    
      
       See Cholmondeley v. Clinton, 2 Mer. 173.
    
   Curia, per

Nott, J.

In this case it is the opinion of the Court that the decree of the Chancellor ought to be © ^v affirmed. Mrs Gibbes is the only appellant, and the ground on which she relies is, that having been five years in possession she is protected by the statute limitations. A mortgage of land in this state does not convey a fee, even after the time of redemption is past. The legal title still remains in- the mortgagor, and the land is only considered as a pledge to secure the payment of the money. The mortgagor must therefore be considered as a trustee for the mortgagee, and cannot be considered as holding adversely. And a purchaser hav-jng a knowledge of the trust places himself in the same . . P , , r. situation, making himself thereby a trustee. Murray v. Ballou, 1 Johns. Cha. Rep. 575. 3 Vern. 271. 2 Fonbl. 152. The act requiring mortgages to be recorded was in-for the purpose of giving , notice to creditors and subsequent purchasers. And as the mortgage in this case was recorded, we must consider the defendant as a uur-chaser with notice, and as holding subject to that in-cumbrance. She purchased only'what we usually call the equity of redemption, though under our act it is a legal not an equitable right. And although she has the title, still it is subj’ect to that lien with the right to redeem. Upon any other construction a person selling on a long credit might lose his security before the right to foreclose would accrue, for thé purchaser might be in possession five years before the debt had become due.

The legal title is still m the mortgagor, tee°for mortgagee, hold trust ^Mior can anyone who fromhim with mortga«-eftIle

gage being1" notice to a* purchaser,

This case is supposed to come within the principle laid down in the cases of Smith v. M’Ra, 2 Bay, 339, and Cholett v. Hart, 2 Bay, 160, where it was held that the statute of limitations would protect a purchaser against a judgment or execution creditor. It must be confessed that there is some analogy in the cases, though not so striking, as would at first appear. Judgments and executions are liens on all a man’s property, but not specific liens on any particular part. It would not be permitted that a creditor with a judgment or execution, for a thousand dollars for instance, should hold it as a net thrown .over an estate of perhaps twenty thousand dollars, ready to draw in such . part ás he might think proper at any indefinite period of time. The Court did wisely therefore in those cases, to quiet the purchaserin his possession. Their error was, perhaps, in suffering personal property, in the hands of a bona fide purchaser, to remain subject to a dormant execution for such a length of time. But the rule does not apply to this case where there was a lien on the specific property of which the purchaser had notice. The motion therefore must be refused.

Decree affirmed.