Case Name: Henderson et al. v. Stewart et al.
Court: Supreme Court of North Carolina
Jurisdiction: North Carolina
Decision Date: 1825-12
Citations: 4 Hawks 256
Docket Number: 
Parties: Henderson et al. v. Stewart et al.
Judges: 
Reporter: North Carolina Reports
Volume: 11
Pages: 256–263

Head Matter:
Henderson et al. v. Stewart et al.
From Wake.
The purchase money of land unpaid, is a lien on the land where ni> conveyance has been made of it, unless there is evidence that the land was not looked to, or such lien has been abandoned. When, therefore, A purchased real estate, and a conveyance was to be made ■ when the purchase money was paid, the vendor has a lien on the land for the purchase money: and A having afterwards mortgaged the premises to B, and B having paid the purchase money, he may tack the money paid to the sum due on the mortgage-, for the payment is for A’s benefit, it discharges the lien, and enables him to demand the leg-al title.
Under ordinary circumstances, the purchaser from a mortgagee stands in his place, and must submit to a redemption on the same terms; for though he may purchase for a large sum, and though he has the legal title, yet he has not equal equity with the mortgagor, for he buys -with notice; his title being on its face for the security of money, should put him ón inquiry; and any thing which puts one on inquiry is sufficient notice.
There are cases, however, where a different rule prevails; as where the purchaser advances the money and takes a conveyance for the benefit of the mortgagor or his heirs, and not for his own benefit. But, as in this case, the defendant took an absolute conveyance to himself, and in his answer denied complainant’s right to redeem he must be viewed as a mere assignee of the mortgagee, and must submit to a redemption on the same terms, and is not entitled to the sum which he has actually advanced.
The bill slated, that one Peter Casso, being seised in fee simple of a lot of ground in the city of Raleigh, by deed dated December 23, 1800, mortgaged the same t® one Moore, a merchant of Petersburg, to secure the payment of g2,841 12; that Casso made large payments to Moore at different periods during his life, and afterwards to his executor; that Moore died in the year —, after devising the lot aforesaid to his son and heir at law, Archibald Moore, and appointed one Bowden his executor; that Peter Casso afterwards died in 1811, leaving a wife and several children, among whom was Mary, the wife of Alexander Lucas; that administration on the estate of Casso was granted to John Hodges, as being the highest „ . , , , . . creditor of Casso, and the personal assets being msum-cient to satisfy the demand of Hodges, he proceeded regularly against the real estate of Casso, and at August term, 1816, of Wake County Court, obtained a decree against the heirs of Casso, to be satisfied out of the real estate, descended, for 134Z. 7s. 6d. a Ji. fa. regularly issued thereon to the sheriff of Wake, who levied on and sold the lot aforesaid to Alexander Lucas for $625, whereby the absolute right of and to the inheritance, and equity of redemption in said lot became vested in Lixas.
The bill farther stated, that Lucas was indebted to the complainants in the sum of $5,000 by bond; and to secure this debt, he conveyed the lot before mentioned, in trust, to satisfy the same; and the trustees, in pursuance of their authority, sold the same, when the complainants became the purchasers, and took a deed in fee simple from the trustees.
The bill farther stated, that the sheriff of Wake had neglected to make a deed to Lucas at the time of his purchase under the execution of Hodges, and that Alexander Lucas died without ever obtaining any conveyance from the sheriff; that Moore, in his life time, and Bowden his executor since his death, had received from the rents and profits of said lot, large sums, which not only kept down the interest, but nearly extinguished the principal.
That in the year 1814, the defendant Stewart, pretending to have purchased the interest of Moore for a valuable consideration, and to be assignee of the same; or pretending to be agent for Bowden the executor, or Archibald Moore the heir at law, entered upon and bath ever since continued to occupy, the premises, receiving therefrom large rents and profits, whereby the whole debt has been extinguished. That the complainants had often applied to the sheriff for a deed, and to Bowden, Archibald Moore, and Stewart, the defendant, in a friendly manner, exhibiting to them their title, and requesting them to come to an account and settlement of what remained due on the mortgage, which requests were denied on divers pre-teneos; and complainants now offered in their bill to pay whatever might be due on the mortgage, and prayed to be permitted to redeem.
The -defendant Stewart, submitted whether, under the facts disclosed by complainants, they could be permitted to redeem; and stated in his answer, that Casso in 1800 became indebted to Moore in the sum before mentioned, and executed the mortgage deed as set forth in the bill; that Moore was under the impression and belief that there were liens on the lot prior to his, particularly one held by Hamilton, the British agent, and he accordingly purchased Hamilton’s claim for §1100; that Moore died as stated in the bill, having devised the lot to Archibald Moore, his son; and that Casso continued in possession of the premises until 1808, when he left the state, his wife and family still remaining in possession; that in 1811 Casso died, and his family continued in the occupation of the lot until 1814, when Archibald Moore came to Raleigh to adjust the claim against Casso; that Mrs. Casso, the widow, applied to the Hon. H. Potter, as her friend, to liquidate the account, and accordingly he and Archibald Moore did settle the account, and ascertained the balance up to June 1814, to be §4,178, due Moore; that Moore, was anxious to close the business, hut expressed his desire to consult the convenience of Mrs. Casso; that Mrs. Casso, whose daughter Stewart had married, seemed much distressed, and intreated the defendant to advance the sum found to be due on the mortgage, that her friends joined in her solicitations, but this defendant declared his inability to raise so large a sum, wrhen Archibald Moore, influenced by feelings of kindness towards Mrs. Casso, agreed to release a part of his claim, and consented to receive §3,500, which the defendant Stewart paid Jiim, and Moore then executed a deed to Mrs. Casso and her heirs for the lot; that not long after Mrs. Casso conveyed the lot to Stewart, but that she remained in possession as the tenant of Stewart until 1817", with the»exception of a store-house which Stewart placed on the lot in 1814, the actual possession of which, by himself or his tenants, Stewart had had for more than seven years; that Lucas, immediately after Mrs. Casso'1 s death, took possession of the dwelling-house, and kept it until he died. Defendant admitted the sale under the execution of Hodges, and the purchase by Lucas, but averred that the purchase was avowedly made, not for the benefit of Lucas only, but of all the heirs of Casso. Defendant admitted the purchase by complainants at the sale under the. deed of trust, and affirmed that complainants had then full knowledge of the monies advanced by this defendant; that the money advanced by this defendant in discharging incumbran-ces, and in necessary repairs on the lot, amounted to 89,469:44; that he had received for rents and profits gl,981:31.
Defendant farther answering said, that complainants had applied to him for a settlemeut; that he gladly assented thereto, and offered to relinquish all claim upon receiving his money advanced with interest thereon; that T. y. Devereux and J. F. Taylor, esquires, were selected to settle the accounts, and Mr. Taylor, after the settlement, reported the balance due this defendant to be g6,889:19; that the complainants admitted it to be correct, and promised to secure the payment thereof to this defendant by a promissory note; that complainants requested this defendant to make a draft for a deed of conveyance, which he did; but on the day appointed for the execution of the deed and receiving the note, the complainant Henderson informed defendant that the matter should be settled by a Court of Equity, declined closing the business, and filed the present bill.
At a former term it was referred to the clerk and master to take an account of the monies' due on the-mortgage. of monies due the defendant Stewart for advances made to relieve the mortgage, and for improvements of a per-u . * * manent and substantial nature put on the mortgaged pre-nl¡ses> ancj generally of all matters of accounts involved in tiie cause.
The clerk and master, among other matters, reported, that Moore paid to Thomas Hamilton <$• Co. §1,080:35, on the 4th of February, 1802, in the purchase of a prior claim with which the lot was incumbered; and he charged the mortgaged premises with this sum and interest,, and credited Stewart by the same amount.
Farther he reported, that the mortgaged premises were bound for the interest on the sum due from Casso to Moore, from the 23d of December, 1803, the time fixed in the mortgage for the payment of the money, though the mortgage deed was executed the 23d of December 1800. He reported also the value of the improvements made by Stewart at §2500.
To the report exceptions were filed, for that the money paid to Hamilton <$• Co. should not be taken into account, and could not be tacked; arid also for that the improvements put on the mortaged premises was valued at more than they were worth.
From the testimony in the cause it appeared that Cas-so had contracted for the purchase of the lot from one Mford, and gave his hond for the purchase money, but received no title from Mford; he afterwards mortgaged the lot to Moore and Hamilton became assignee of the bond given to Mford.

Opinion:
The cause was argued upon the exceptions, by Badger for complainants, and Gaston, contra; when Henderson, Judge, delivered his opinion as follows:
Without deciding on the right of the mortgagee to tack to the mortgage money other demands of a personal nature which he may have against the mortgagor, and if he can as against the mortgagor, whether such right is ex tended against an assignee tor value, of the equity of redemption, and whether a purchaser of the equity of redemption at a sheriff's sale is such an assignee, I am very clearly of opinion that the mortgagor Moore has, in this case, the right of tacking the money paid to the Ha-miltons; because I think it was an incumbrance, and a lien on the land, and which prudence dictated to him to remove to give efficacy to the mortgage.
I give no opinion whether the purchase money after title is made forms such lien,' but I think it clearly does where title is not made, unless it appears that such lien was not relied on or abandoned; as if by the agreement title was to be made at a period before the purchase money became due. In this case it appears from the evidence that Casso. the mortgagor, had contracted with Mford for the purchase of the lot, which he afterwards mortgaged to Moore; that he gave his bonds for the purchase money, with John G. Blount as security, but did not receive title to the land; that these bonds were transferred by Mford to the Hamiltons. Casso could not compel Mford to make title until these bonds were paid off. Moore, therefore, by paying off these bonds, destroyed this equitable lien and enabled Casso to call for the legal title. It was done for Casso's benefit, it thereby enabled Casso to fulfil his warranty to Moore. This exception must therefore be overruled.
I think the clerk erred in not allowing interest from the date of the deed, notwithstanding the deed calls for only the nett sum at the end of three years, for the parties treated the contract as a conditional sale, and'the rents were to come in lieu of interest; but the parties in 1814, and this Court now, considers it only as asecurity for money. Moore should, therefore, haye interest on his money then due.
Although, under ordinary circumstances, the assignee of the mortgagee should stand in his place, and must submit to arcdemptionupon the same terms; and though, in general, it be true that it is no defence for him to say, that the payments or other deductions claimed by the mortgagor do not appear upon the papers, becáuse it is enough that it appears that it was redeemable, and it was his own act to purchase, and he might have informed himself, for the assignment only substitutes him to the mortgagee; yet there are cases where the sum really paid by the assignee shall be paid before a redemption shall be allowed, even when the mortgagor has been entirely passive; when be has lent his aid to swell the amount, there is no doubt but that such will be the case. Such cases arc when the mortgagor is, an infant, or perhaps a feme covert, and is about to be turned out of possession, or to suffer injury, and one as a friend, and in order to preserve the mortgagor's rights and save him from injury, bonajidc, advances money; and in this case, but for the assignee's taking an absolute deed to himself, and in his answer denying the right of the heirs to redeem, I think this would have been such a case; the more especially as he paid several hundred dollars less than the respectable gentleman who drew the mortgage deed reported to be due, after having examined the case as the friend of, and at the request of the widow; but his taking an absolute deed and denying the right of redemption, shows too strongly that he was not acting on the part of or in behalf of the heirs of the mortgagor, but for his own benefit; he must therefore stand upon the rights of the mortgagee. I should have mentioned above, in addition to the circumstances there stated, that Casso had left his wife and children without affording them means of redemption, or any other place of residence, and I regret very much that I am compelled to view the assignee as acting for his own benefit, and not for that of the heirs; but I am not satisfied how the report of the master differs so much from the gentleman who settled the account in '1814. Justice requires, I think, that we should be informed, if possible, of the items of that settlement; I think the case should be referred to the master to ascertain them.
I think that the master erred in fixing.the value of the improvements: the evidence warrants no farther than glSOO at most. If the master went on the grounds that the improvements yield annually such á sum as, according to common calculations, requires an expenditure of S2500 to be made, he overlooks the ground rent, which belongs to the mortgagor. As to the assignee standing (in ordinary cases) in the place of the mortgagee, I think that the rule is as laid down by Lord Eosslyn, and approved of by Lord Eldon, he can claim no greater rights; and that the rule laid down by Lord Kenyon is fallacious, for although he has the law on his side by obtaining the legal title from the mortgagee, he has not equal equity; he is not a purchaser without notice; for his title being for the security of money, he is thereby put upon inquiry as to the sum due; and that which puts a person on inquiry is sufficient notice. '
There is another and a very important point, which I 'wish to have brought before the Court; it is alleged in the answer and supported by proofs; and that is, whether Lucas did not become, upon his purchase, a trustee for the heirs of Casso? I wish that question to be reserved and spoken to.
The other judges concurred in the opinion of Judge Henderson, and it was decreed that the lot be sold by the master, reserving the cause for farther consideration of the points on which his honor Judge Henderson expressed a wish for farther examination.