Court Opinion

ID: 6678158
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:18:04.864548+00
Date Added: 2024-06-11T16:00:45.728855
License: Public Domain

The opinion of the court was delivered by
Mr. Chiee Justice McIver.
The facts of this case are so fully and clearly stated in the Circuit decree, that it is needless to restate them here, as that decree, together with plaintiff’s exceptions, and the additional grounds, upon which the defendants have given proper notice that they will rely to sustain the decree, should all be incorporated in the report of the case. But inasmuch as the dates of the several transactions out of which this controversy arises should be kept steadily in mind, we will restate them here.
On the 1st of January, 1885, Mary Miller conveyed a tract of land, containing 290 acres, which is the subject matter of this action, to the defendant, E. O. Miller, the consideration stated in the deed being $2,000. On the same day, E. C. Miller executed her mortgage on the said laud to secure the payment of her note for $1,000, doubtless a part of the purchase money. On the 6th of March, 1891, the said Calvin Brice obtained judgment against E. C. Miller, which judgment was afterwards transferred to the plaintiff, by the deed of assignment made by *45Brice to the plaintiff. On the 16lh day of August, 1892, Mary Miller died intestate, and letters of administration on her estate were subsequently granted to the defendant, Samuel G. Miller. On the 9th of December, 1892, execution was issued to enforce the above mentioned judgment in favor of Calvin Brice, and the same was levied on said 290 acre tract of land, as the property of E. C. Miller. On the 29th of December, 1892, E. C. Miller conveyed the said land to Samuel G. Miller, as administrator of Mary Miller, the consideration stated in said deed being the sum of $1,800. This deed contained the stipulation set out in the decree of the Circuit Judge, whereby the mortgage above referred to, then held by Samuel G. Miller, as administrator of Mary Miller, should be left open to protect the land against intervening encumbrancers. Agnew v. Railroad Company, 24 S. C., 18. On the same day (29th December, 1892), Samuel G. Miller, as administrator as aforesaid, gave his note to E. C. Miller for the sum of $1,000. On the 5th day of January, 1898, the land was sold by the sheriff under the execution above referred to, at which sale the plaintiff became the purchaser, and received titles from the sheriff.
Soon after this (at what precise date is not stated), but before the commencement of this action, the plaintiff offered to Samuel G. Miller, administrator as aforesaid, to pay the amount of the mortgage debt, and demanded possession of the land, which offer and demand was refused, and thereupon this action was commenced on the 24th of January, 1893, for the purpose, substantially, of being allowed to redeem the mortgaged premises, by paying the full amount of the debt secured thereby, as he had alleged in his complaint his readiness and ability to do, and of having the deed and mortgage held by Samuel G. Miller cancelled, and that he should be let into possession of the said land. It seems that E. C. Miller was not originally made a party to the action; but Samuel G. Miller claimed in his answer that she was a necessary party to the action, and prayed that she be joined therein as a party defendant. The motion to that effect being granted, E. O. Miller filed her answer, in which she sets up, amongst other things, a claim that she was entitled to . a homestead in the tract of land in controversy, *46which exceeded in value the amount of the mortgage debt, and that said tract of land “could not be divided without material injury to the value of the same;” and she furthermore alleged that the note for one thousand dollars given to her by the said Samuel G. Miller “represents the amount to be paid this defendant for her homestead in the said land.”
1 In the first place, we are unable to agree with the Circuit Judge in holding that E. C. Miller was a necessary party to this action, but, on the contrary, it seems to us that she was neither a necessary nor a proper party to the action. She certainly was not a necessary party, as mortgagor, after having conveyed away her entire interest in the mortgaged property, as she had done here, before this action was commenced. Pom. Rem., § 387. And even assuming, as we do, that she was once entitled to a homestead, we do not see how that could make her a necessary party, in face of the undisputed facts that she had twice before voluntarily stripped herself of the right of homestead; first, by her mortgage, and second, by her deed to Samuel G. Miller. Even if it be conceded that the note of $1,000, given her by Samuel G. Miller as a part of the purchase money of the land w'hen he bought from her, was intended to represent the value of her homestead right, that would not render her a necessary party, for if any such right then existed, it was vested in Samuel G. Miller, and not in her. But we will not rest our decision upon the error in holding Mrs. Miller to be a necessary party, for, as it seems to us, it is of but little practical consequence whether she be made a party, or not.
2 3 Passing by, then, this question as to parties, we will proceed to consider the case on its merits. Inasmuch as the mortgage to Samuel G. Miller by E. C. Miller must, under the decision in Agnew v. Railroad Company, 24 S. C., 18, still be regarded as open, notwithstanding the fact that the land which it covered has been conveyed by the mortgagor to the mortgagee, by reason of the express stipulation to that effect, inserted in the conveyance, we find here a tract of laud upon which there were two liens; first, that of the mortgage, which covered the whole of the land, and *47second, that of plaintiff’s judgment, which, unquestionably, covered so much of the land as was in excess of the homestead, conceding, for the present, that such right of homestead -still existed. Under this state of things there can be no doubt, since the case of Bradford v. Buchanan, 39 S. C., 237 (which was probably not brought to the attention of the Circuit Judge, as it had been then but very recently decided), that the land could be sold, subject, of course, to the senior mortgage, and subject, also, to any homestead claim therein, if any then existed, although the Circuit Judge seems to have thought otherwise. Now, when Mrs. Miller conveyed the whole of the land to S. G. Miller, then the holder of the mortgage, which was done before the sale by the sheriff, under which the plaintiff claims, she parted with any right of homestead therein which she may have once had, and which had been previously encumbered by the lien of the mortgage. Section 1998 of the General Statutes, as amended by the act of 1889 (20 Stat., 381), expressly provides: “That no right of homestead shall exist or be allowed in any property, real or personal, aliened or mortgaged, either before or after assignment, by any person or persons whomsoever, as against the title or claim of the alienee or mortgagee, or his, her, or their heirs or assigns.” So that it is very manifest that Mrs. Miller had absolutely divested herself of all right of hometead in the said land before the sale by the sheriff to the plaiutiff. Hence she did not, and could not have, set up any claim to have any homestead laid off to her before the said sale was made; nor did her grantee set up any such claim at that time, so far as appears.
4 But it is said, that while Mrs. Miller may have thus divested herself of all right of homestead, yet her alienee, S. G. Miller, had acquired such right before the sale by the sheriff, and, therefore, he took so much of the land as would be necessary to constitute the homestead which he had bought, free from the lien of plaintiff’s judgment; and the cases of Cantrell v. Fowler, 24 S. C., 424, Ketchin v. McCarley, 26 Id., 1, Wood v. Timmerman, 29 Id., 175, and Martin v. Bowie, 37 Id., 102, are cited to sustain this view. While it is true that the first two of these cases were cases in which it was conceded *48that the whole of the land owned by the judgment debtor did not exceed in value the sum of one thousand dollars, and it must necessarily be the homestead of the debtor, yet in the last two of these cases such was not the fact, and the doctrine was applied to cases where the land exceeded in value the said sum, and where the homestead had not been laid off. But in the case of Martin v. Bowie, supra, the claimant, not the creditor, was required to institute proper proceedings to have the homestead laid off within a prescribed time, or else be barred from asserting any claim of homestead. So that while the position contended for may be correct, if there was nothing else in the case, and the plaintiff would not be entitled to any portion of the land embraced within the limits of the homestead, provided the claimant of the homestead should, within a time to be prescribed by the decree of the court, institute proper proceedings to have the homestead specifically designated and laid off, and failing to do so, his claim should be barred, yet in this case something else does appear not found in either of the cases above cited, to wit: that here there was a mortgage, now held by the defendant, S. G-. Miller, which was a first lien upon the entire tract of land, homestead and all, which lien was expressly left open, when the entire land was sold to said S. Gr. Miller by Mrs. E. C. Miller, by the agreement of the parties, and the question is, what effect these facts have upon the rights of the parties.
If this mortgage was now held by a third person who was seeking to enforce such lien by a sale of the mortgaged premises, it seems to us, that, upon well settled principles, the plaintiff would have an equity to require the holder of the mortgage to apply so much of the proceeds of the sale as represented the homestead, upon which he had a lien, to the extinguishment of such lien before going upon the proceeds of the sale of the balance of the land in excess of the homestead, upon which alone the plaintiff has a lien, as was plainly indicated (though not decided) in the recent case of American Freehold Land Mortgage Company v. Moody, 40 S. C., 187, and this upon the familiar principle known as the two fund doctrine. Or if, as in the case of Bradford v. Buchanan, 39 S. 0., 237, the plaintiff had become *49the purchaser of the mortgage, the same principle would apply, and the plaintiff would have the right to sell the entire land under the lien of the mortgage free from any claim of homestead, and thus acquire a valid title to the whole of the laud. And if the plaintiff is allowed to redeem the mortgaged premises by paying the mortgage debt, as he asks, we do not see why the same principle should not apply; for, in that event, he would practically become the assignee of the mortgage, and entitled to all the rights incident to that relation, in equity at least.
5 It is contended, however, that the two fund doctrine cannot apply in this case, for the reason that the tract of land iu question is a single tract, “not susceptible of division,” as found by the Circuit Judge, though there seems to be but little, if any, evidence to sustain such finding — nothing but the single statement in the testimony of Mrs. E. O. Miller, that “the land, being in one single tract, it could not be divided satisfactorily,” which seems to be a mere expression of her opinion; and, for this reason, it is claimed that there are not here two funds. And the cases of Ex parte Kurz, 24 S. C., 468, and Ex parte Carraway, 28 Id., 233, are relied upon to sustain this view. We do not think that these cases are applicable, for the reason that the decisions there did not rest upon the ground that there were not two funds, but really upon the ground that there were not two creditors. In the former case, the judgment debtor had no legal title to the land in question, but was in possession nnder a contract to purchase, and, therefore, no claim of homestead could be asserted until the purchase money was fully paid; nor could the general judgment creditors subject any portion of the land to the payment of their judgments until after the judgment for the purchase mouey had been paid. After it was paid there then remained only the general judgment creditors, and there was, therefore, no room for the two fund doctrine. In the other case, there were originally mortgage as well as judgment creditors, but the mortgages having been paid, by consent of all parties, out of the proceeds of the sales of the land, before any claim was made by the judgment creditors to set up the two fund doc*50trine, it was then too late for_ them to do so, as the only creditors who then remained stood precisely on the same footing.
What effect the view which we have taken of this ease may have upon the question as to the liability of S. Gr. Miller on the note of one thousand dollars, given to Mrs. Miller as part of the purchase money of the land conveyed to him by her, is not properly presented by the pleadings, and cannot, therefore, be considered by us; and we do not desire to be regarded as intimating any opinion as to that matter.
The judgment of this Court is, that the judgment of the Circuit Court be reversed, and that the case be remanded to that court for such further proceedings as may be necessary to carry out the views herein announced.