Court Opinion

ID: 6677814
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:17:44.698406+00
Date Added: 2024-06-11T16:00:45.105703
License: Public Domain

Mr. Justice McGowan,
dissenting. The facts of this case are so fully stated in the Circuit decree,1 that they need not be restated. See, also, the case of Rabb v. Flenniken, twice reported, in 29 S. C., 278, and 32 S. C., 189. All that is necessary at present is to keep clearly in view the dates of the different transactions. (1) On December 18,1867, was executed the deed of Mary Begina Holley, conveying a tract of land to Thomas W. Babb, as trustee, giving power of sale, reinvestment, &c. (2) On February 20, 1879, the trustee Babb, conveyed about 400 acres of the aforesaid land to David B. Flenniken in fee,' without reinvesting the proceeds of sale, according to the terms of the trust deed. (3) On December 27,1879, Flenniken, being in possession of the laud, sold and conveyed it to one Wade Pickett for $2,500, taking Pickett’s bond and mortgage of the *154premises to secure the purchase money. (4) On January 1, 1880, the said bond and mortgage were duly transferred by Flenniken to Giles J. Patterson, who, first having the records examined, and being informed by a lawyer that the title was good, and having no notice whatever of any secret vice in it, paid Flenniken for the same in cash the full market price thereof. (5) On February 4,1881, Pickett concluded to abandon his purchase, and conveyed back to Flenniken the equity of redemption in the land.
Down to this point, nothing was heard of any hidden equity to the land, or affecting the legal title to it. (6) But on January 23, 1884, action was commenced by Cassandra H. Babb and her children then living, to set aside the conveyance of her trustee to Flenniken as a fraudulent breach of trust, Thomas W. Babb, her trustee, and Flennikeu being alone made parties defendant. Lis pendens was filed, long litigation followed, the result of which will be referred to hereafter. (7) On December 5, 1885, Flenniken, being embarrassed, executed to one James A. Brice an assignment of his property, including the equity of redemption in the aforesaid tract of land, for the benefit of his creditors. After this assignment, Giles J. Patterson brought an action against Brice, the assignee of creditors, to foreclose the mortgage assigned to him. He made no one a party but Brice, but filed notice of lis pendens. A decree of foreclosure was rendered, and the land sold under an order of court on October 5, 1887. When the property was offered for sale, notice was given of the claim of the defendants. The land was bid off by Patterson, the holder of the mortgage, for less than was due on the bond and mortgage. Titles were made to him by order of the court, and he was let into the possession.
The proceeding of Mrs. Babb to set aside the deed of her trustee to Flenniken was not finally decided uutil 1889, when a j udgment was entered that Flenniken should hold the said trust tract of land subject to the trusts in the original Holley deed. The parties obtained an order from Judge Norton appointing Edward J. Babb trustee, and requiring Flenniken to execute and deliver to the new trustee a deed of the aforesaid premises upon the original trusts. That was done; and the *155sheriff, under the order of the court, was about to deliver to the substituted trustees possession of the premises, when Giles J. Patterson instituted this action to enjoin the sheriff and the other defendants from thus proceeding, praying that the effort to deliver possession of said premises may be declared to be null and void, that the plaintiff may be restored to the possession of said premises, and that the defendants may be restrained from interfering in any way with the possession of the plaintiff or his tenants, &c. A supplemental complaint was filed, to prevent the tenant of the plaintiff from attorning to and paying-over the rents to the attorney of the trustee and cestui que trust, which repeated the prayers of the original complaint, “and for such other and further relief as may be just and equitable.” After the trial of the case, but before the decree was filed, the plaintiff departed this life, and the name of his executrix, M. Virginia Patterson, was by order of the court substituted as plaintiff.
The cause was heard by his honor, Judge Fraser, who held “that, to the extent of the mortgage, the plaintiff’s title was good, and that he has a right to the possession of the premises bought under his foreclosure proceedings, and that he can not be turned out of possession under any proceeding to which he was not a party. At the same time, I am inclined to the opinion that, under the foreclosure proceeding, and after the filing of notice of Ms pendens, and express notice of the claims of the trustee and cestui que trust, he did not purchase such a title as would extinguish the equity of redemption existing in favor of the trust estate; and that the trustee has still a right to redeem the mortgage. I do not, however, see how that can be accomplished in this action, as the answer sets up no such claim, and makes no offer to redeem. James A. Brice held subject to this mortgage, and also to the trusts of the original deed. This decree, therefore, must be without prejudice to any action the trustee and his cestui que trust may hereafter be advised to bring for the redemption of the mortgaged premises,” &c.
From this decree the defendants appeal to this court upon the following exceptions: [See ante, p. 139.]
There is some confusion in this case, arising from the fact *156that Mrs. Rabb filed her complaint against the trustee and Flenniken, without making Patterson, who held the mortgage, a party; and, on the other hand, Patterson, in his foreclosure proceedings, impleaded no one but Brice, assignee, for the creditors of Flenniken, without any reference whatever to the claim of Mrs. Rabb and her children. So that, although both parties proceeded in their respective lines to judgment, really the main question .between the parties was not touched by either. The court, therefore, in these cases was not informed of all the facts, and there can be nothing in the judgment of either of them like an adjudication of the point now to be considered. It is elementary and fundamental, that no one is bound by the judgment in a case to which he was not a party. The conflict, however, as to the actual possession of the premises made this action necessary, in which, for the first time, the claimants are brought face to face before the court. The question is an important one — whether Patterson, the purchaser for full value of the bond and mortgage from the mortgagee, is entitled to the protection of a purchaser for value without notice; and its consideration should not be embarrassed by anything which, it might be supposed, was decided in the cases referred to.
In order to prevent confusion, therefore, we will go back to the time when Mrs. Rabb filed her complaint to set aside the deed, which her trustee, with her consent, made to Flenniken (January 23, 1884), and see how the matter then stood. At that time Patterson was in possession of the bond and mortgage, having purchased the same for full value some years before, with no notice whatever of any claim on the part of third persons of any hidden equity in the land mortgaged. ■The claim as developed was a mere equity, and the question is whether Patterson could defend himself against it by the higher equity of innocent purchaser for value. There is no positive law creating or defining that plea, but it is purely equitable. If Patterson had taken a conveyance of the land from Pickett, instead of an assignment of the purchase money mortgage given to Flenniken, I suppose that there would have been no doubt as to his right to .protect himself by the plea. *157Wherein does this case differ in principle from the one stated? We think, in this State, it is settled, that “A mortgagee of lands is a purchaser within the meaning of the rule which protects a purchaser for valuable consideration without notice.” See Haynsworth v. Bischoff, 6 S. C., 159.
This seems to be conceded, but it is said that the case of Haynsworth and Bischoff did not go so far as to include the assignee of a mortgagee; that in such case the mortgage being merely anunuegotiable chose in action, another principle intervenes, viz: that the assignee takes subject to all equities which may be developed as to the land mortgaged. It is true, that the case of Bischoff did not, in express terms, embrace the case of an assignee of the mortgagee; but we do not see why the principle decided does not apply. It has been considered, that although a mortgage might be so far considered as a mere chose as to be discharged by equities between the mortgagor and mortgagee, against which the assignee might protect himself by making inquiry of the former at the time of the assignment, yet that with regard to the equities of third persons the case was different, and an assignment for value was to be regarded as a purchase. There has been discussion on the subject, and possibly difference of opinion, but we do not propose to reopen the argument. We agree with the Circuit Judge, on the force of the authorities cited by him in his decree, that to the exteut of the mortgage the plaintiff’s title was good. We also concur in his intimation, that Patterson, at the sale of the land under his foreclosure suit against Brice, did not purchase such a title as would extinguish the equity of redemption existing in favor of the trust estate. We hold, first, that to the extent of the mortgage the plaintiff’s title was good, but that'the purchase and conveyance at the foreclosure sale in the case of Patterson v. Brice did not carry to the purchaser the equity of redemption iu land. Second, that the trustee and cestui quetrusts have the right to redeem the premises in question, by (paying, the balance due upou the mortgage debt, after allowing, of course, all proper credits of payments, rents, &c. Third, that unless the defendants take action to redeem the land in a reasonable time, the plaintiff, or his representative, disregard*158ing tbe former foreclosure proceedings, may proceed anew to foreclose his mortgage on the land in question, giving, of course, all just credits on the mortgage debt. The injunction to stand in the meantime only to maintain the status quo. I think the judgment below should be affirmed.
Judgment reversed.

Quite as fully stated in the opinion by Mr. Justice Pope. — Reporter.