Court Opinion

ID: 7984265
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:23:53.960628+00
Date Added: 2024-06-11T16:35:08.752086
License: Public Domain

Peyton, C. J.:
It appears from the record in this case that Howell Hinds was indebted to Foley, Avery & Co. in the sum of $40,579.55, as evidenced by sundry promissory notes; and for the purpose of securing the payment of said notes, on the 1st day of February, 1867, he made and executed to William L. Nugent a deed of trust to certain lands therein described, situate in the county of Washington.
The said deed of trust provides that in case said notes are not paid at the maturity thereof, the said Nugent, as trustee, at the request of any bona fide holder of any of said notes, is authorized and required to take possession of said lands, and sell the same at public auction for cash, or so much thereof as shall be sufficient to pay said notes, or such of them as shall be due and unpaid, together with the expenses of executing the trust.
*273And that on the 17th dajr of May, 1869, the said Nugent, under and by virtue of the power given him by said deed of trust, sold and conveyed the real estate covered by said deed, to Robert Pugh, who afterwards instituted an action of ejectment in the circuit court of said county against Mary A. Hinds and others, to recover the possession of said lands.
And that on the 7th day of February, 1870, the said Robert Pugh filed his bill on the chancery side of the circuit court of said county, alleging therein that the said Nugent, for the purpose of favoring and benefiting the said Mary A. Hinds, allowed her to remain in possession of the premises, and, as her agent, in January, 1870, he leased the same for the year 1870 to E. P. Byrne and Thomas Hinds for the sum of $3,800, which the complainant insists belongs to him.
The complainant further alleges, in his bill, that the said Mary A. Hinds is insolvent, and if she is permitted to collect said rent it will result in a loss of the same to him, on account of her inability to respond for the amount thereof to complainant, and therefore he prays for an injunction restraining the said Mary A. Hinds from collecting, and the said tenants from paying the said rent to her. And that upon a final hearing the said rents and profits may be declared by the court to belong to the complainant, and that the same may be decreed to be paid to him.
In the answer of Mary A. Hinds, she avers that she is the widow of the said grantor, Howell Hinds, who departed this life in said county of Washington, in the year 1868, intestate, seized and possessed of the lands conveyed by said deeds of trust, and that as such widow she is entitled to dower in the premises, and has a right to retain possession of the same until her dower shall be assigned her. And she further insists that the rent of said lands for the year 1870 belongs to her.
Upon the final hearing of the cause on the bill, *274answer pro confesso as to defendants, E. P. Byrne and Thomas Hinds, and exhibits, the court,decreed that the defendants deliver possession of the tract of land in said deed of trust and bill of complaint specified, to complainant, and that $1,500 of said rent be paid to the complainant and the remainder to defendant, Mary A. Hinds. And from this decree the defendants prosecute this appeal, and present for our consideration and determination the important question whether the said Mary A. Hinds, as the widow of the said Howell Hinds, deceased, is entitled to dower in the lands in controversy under the statute of 1857, which provides that the widow shall be entitled to “ one-third part of all the lands, tenements and hereditaments of which her husband died seized and possessed, or which he had before conveyed otherwise than in good faith and for a valuable consideration, and whereof said widow had not relinquished her right to dower as provided for by law.” Rev. Code of 1857, p. 467, art. 162.
It fully appears from the bill and the answer in this case, that the deed of trust of the lands embraced therein was executed to secure the payment of an antecedent debt due by the said Howell Hinds to Eoley, Avery & Co. And it is insisted on the part of the appellant, Mary A. Hinds, that the conveyance was not for that reason for a valuable consideration, and did not affect her right to dower in the lands thereby conveyed.
It seems to be conceded by counsel in the argument that the appellant, Mary A. Hinds, Avas the wife of Howell Hinds at the time he executed the deed of trust under which the appellee claims title to the lands in controversy, and it not appearing that she had relinquished her claim to dower in the lands covered by said deed of trust, we will proceed to determine whether that instrument has the effect of precluding her right to dower in the premises.
*275Dower, being intended for the sustenance of the wife and the- nurture and education of the younger children, is much favored by the law. And it has been held that our statute, authorizing a conveyance by the husband to operate as a bar of the widow’s dower, being in derogation of her common law right, should receive such construction as will fully protect her rights within the limitation to the husband’s, power of alienation specified in it. Jiggitts v. Jiggitts, 40 Miss. 725.
■ In order to arrive at a correct solution of the question presented for our decision, it will be necessary to •ascertain what is a valuable consideration in the conveyance of real estate.
Whatever the rule may be in the case of negotiable instruments, it is well settled that a conveyance of lands or chattels as a security for an antecedent debt will not operate as a purchase for value. 2 Lead. Cas. Eq. (3d Am. ed.) 104, and 2 Am. Lead. Cas. 233 (5th ed.) To constitute a party a purchaser for valuable consideration, he must have advanced some new consideration, either in money or property, or have relinquished a pre-existing security for his debt, or have done some act on the faith of the purchase itself which cannot be retracted. Rowan v. Adams, S. & M. Ch. 49; Rollins v. Callender, Freem. Ch. 295; Emanuel and Barnett v. White, 34 Miss. 56, 63.
In the case of Pope et al. v. Pope et al. 40 Miss. 516, Pope had executed a deed of trust to certain real and personal property, to secure antecedent debts due by him to D. B. Nabors & Co. It was insisted, on behalf of Nabors & Co., that they must be considered as purchasers for valuable consideration. But the court said, they do not occupy that attitude because it was not an absolute conveyance, but a mere security for a pre-existing debt. In such case, it is settled that a party does not come within the exception of the statute of frauds in favor of bona fide purchasers. And this doctrine is *276re-affirmed in the case of McCloud v. First National Bank, 42 Miss. 112.
In Pack v. Harney, 4 S. & M. 255, the court say: “ The statute protects a bona fide purchaser, because he jiarts with his money under the belief that he is getting a title uncontaminated with fraud. But the creditor parts with nothing. The giving of the deed of trust does not extinguish his debt, nor did he contract on the faith of such security. He is not a purchaser, nor does he part with his money for an interest in the land.”
In the case of Perkins v. Swank, 43 Miss. 360, this court, in reviewing the case of Pope v. Pope, remark that, so far as the court declares that a deed in trust or mortgage, executed to secure a ]ire-existing debt, does not make the mortgagee a purchaser for value, so as to avail of the statute, we think is in accord and harmony with the authorities.
Mr. Chancellor Walworth, in the case of Dickerson v. Tillinghast, 4 Paige, 215, held that a transfer to a grantee in payment of a pre-existing debt, without giving up any security or divesting himself of any right, or placing himself in a worse situation than he was in before, of an estate upon which there was a prior unrecorded mortgage of which the grantee had no notice, did not make him a purchaser, in the sense of the rule, for a valuable consideration; but that there must he some new consideration in order to entitle him to a preference over the prior mortgagee.
Mr. Justice Story, in the case of Morse v. Godfrey, 3 Story, 390, in commenting upon the case last above cited, says: “ I do not say that I am prepared to go quite to that length, seeing that, by securing the estate as payment, the pre-existing debt is surrendered and’ extinguished thereby; but; here there was no such surrender, extinguishment or payment, and the general principle adopted by the learned chancellor is certainly *277correct, that there must be some new consideration moving between the parties, and not merely a new security given for the old debts or liabilities, without any surrender or extinguishment of the old debts and liabilities or the old securities therefor.” He further said, that the case of Swift v. Tyson, 16 Pet. 1, did not apply. In the first place, there the bill was taken in payment and discharge of a pre-existing debt; in the next place, it was a case arising upon negotiable paper, and who was to be deemed a bona fide holder thereof, to whom equities between other parties should not apply. Such a case is not necessarily governed by the same considerations as those applicable to purchasers of real or personal property, under the rule adopted by courts of equity for their protection.
The bill charges that said deed of trust and notes were made and executed by way of and for the purpose of a compromise of a large debt, amounting to double the amount of said promissory notes, before that time due and owing from said Howell Hinds to the firm of Foley, Avery & Co., who were to look solely to the land conveyed by said deed of trust as the only means for the payment of said debt. And the deed provides also, that owners of said several notes, their representatives and assigns, shall look, as stated in the bill, solely and exclusively to the lands embraced therein, for the payment of said debt and interest, it being the intention of the parties to said deed that upon the failure or default in the payment of said notes, the said conveyance shall be held and deemed a complete payment thereof, so far as the said Howell Hinds is concerned. This is in effect a sale of the land in payment of the debt, with a condition of re-purchase upon payment of the notes ; and, although a precedent debt, is not a consideration that will raise or sustain a bargain and sale of lands (Ward v. Lambert, Croke Eliz. 394; Doe v. Hampton, 8 Ired. 457), unless the *278deed is taken in satisfaction, and not merely as a collateral security. Yet such a conveyance may be good as an equitable assignment, because equity looks to the object which is the ultimate satisfaction of the debt. 2 Am. Lead. Cas. 168; 3 Lead. Cas. Eq. (3d Am. ed.) 368.
In the case under consideration, it may be said that the deed was taken in satisfaction. It was the result of a compromise by which Foley, Avery & Co. relinquished one-half of their claim against Howell Hinds, and took, as stated in the bill and covenanted in the deed, and not denied in the answer, the conveyance of the lands in controversy, which, in the language of the deed, “ shall be held and deemed a complete payment” of the othor half of said indebtedness. And all the authorities agree, that if the creditor relinquish a preexisting security for his debt, that will constitute him a purchaser for valuable consideration, and if that be so of the security merely, a multo fortiori, must the relinquishment of the debt itself have that effect ?
And the authorities generally agreed that where the conveyance is not in extinguishment and discharge of the debt, there must be some new consideration moving from the creditor to the debtor, but that consideration need not, however, consist in the payment of money or money’s worth. If the creditor cedes any existing right, or agrees to forbear enforcing his remedies and give time, there is a valuable consideration in the legal sense of the term. The transfer of a note or bill of exchange in satisfaction of debt, is consequently a negotiation for value, because the creditor gives up his original demand, and would be without remedy if he could not enforce the obligation which has been given in exchange. 2 Am. Lead. Cas. 226; Goodman v. Simons, 20 How. (U. S.) 343, 371; Emanuel v. White, 38 Miss. 56.
The giving time of payment was said, by Chief Jps*279tice Gibson, in the case of Petrie v. Clark, 11 Serg. & Rawle, 377, 388, to be a present and valuable consideration, and a pledge on such terms the same as a pledge for money down; and this remark was cited and confirmed by Mr. Justice Rogers, in Depaw v. Waddington, 6 Whart. 220, 236, with the additional observation that, in cases of this description, the existence of a consideration is every thing, its amount or adequacy nothing, unless it is a merely colorable consideration.
The record shows that at the time this transaction took place, time was given to pay the notes which were given in renewal of that portion of the pre-existing debt, which had not been relinquished, from one to five years inclusive. This constituted the creditors, according to the current of authorities, purchasers for a new and valuable consideration.
Upon the whole, we consider that the giving up one-half of the debt, and giving time for the payment of the other half, and that Howell Hinds was discharged from the debt, and that Poley, Avery & Co. were to rely solely upon the land for the payment and satisfaction of their claim against the said Hinds, take this case out of the rule of law laid down in the forepart of this opinion with respect to securities for antecedent debts, and furnish a valuable consideration for said conveyance within the true intent and meaning of our statute, so as to bar the widow of dower in the premises.
The decree of the court below must, therefore, be affirmed.