Court Opinion

ID: 6696033
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:51:10.544026+00
Date Added: 2024-06-11T16:01:14.796844
License: Public Domain

Walker, J.,
after stating the case: This action was brought by the plaintiff against the administrator of J. J. Perkins, the judgment debtor, and other parties interested in the controversy, to enforce the lien of the judgments recovered by him in Beaufort Superior Court, and, in furtherance of that purpose, to have a sale of the land which is covered by the homestead, and the proceeds applied to the payment of the said judgments, the homesteader having died, and the right to subject the land to the satisfaction of the debts evidenced by the judgments having accrued to him, the plaintiff.
The first objection to plaintiff’s recovery is that the judgments were not duly rendered in Beaufort Superior Court. The record entry con*261tains all tbe essential elements of a judgment, and it was not necessary to tbe validity of tbe judgments tbat tbey should have been signed by tbe judge. It was beld in Bond v. Wool, 113 N. C., 20, tbat while it is more regular, and for many reasons tbe better course, tbat a judgment should be signed by tbe judge, tbe provision of tbe statute is not mandatory, and, consequently, an entry “Judgment as per transcript filed,” is sufficient to constitute a judgment. It has been repeatedly beld tbat tbe requirement as to signing a judgment is merely directory. Rollins v. Henry, 78 N. C., 342; Keener v. Goodson, 89 N. C., 273; Sumner v. Sessoms, 94 N. C., 371; Ferrell v. Hales, 119 N. C., 212.
Tbe motion to set aside tbe judgments for irregularity came too late, and should bave been made in tbe Superior Court of Beaufort County, where tbey were originally rendered, but tbe ground of tbe motion, tbat tbe actions should bave been brought in Pitt County instead of Beaufort County, was insufficient, as an objection to tbe venue should be made before judgment, for it should be taken in apt time, and if tbe defendant pleads to tbe merits be will be deemed to bave waived it. McMinn v. Hamilton, 77 N. C., 300; Lafoon v. Shearin., 91 N. C., 370; Morgan v. Bank, 93 N. C., 352; Clark’s Code (3 Ed.), sec. 195, p. 149, and note.
Tbe defendant argued tbat tbe entries on tbe records were mere fragments, and too uncertain to be considered as solemn judgments of tbe court, but we think otherwise. We bave discussed this question somewhat already, but we may add tbat if Rollins v. Henry, supra,, is examined, it will be found tbat tbe judgment in tbat case consisted 'merely of memoranda and was not as definite and complete as those in question here, and it was beld to be valid and sufficient; and in Bond v. Wool, supra, tbe entry, “Judgment as per transcript filed,” was considered as sufficient to show a regular judgment of tbe court.
We think there was some evidence tbat Iienry C. and Edward Parsons bad tbe beneficial interest in the judgment, but if there was not such evidence it cannot avail tbe defendants, as tbe judgments were taken in tbe name of Mr. Satterthwaite, and, nothing else appearing, be was tbe legal owner of tbe one and tbe beneficial owner of tbe other, as tbe record now shows, at tbe time of bis death, and bis administrator can bave them enforced or collected for tbe benefit of tbe true owner. Tbe presumption is tbat tbe plaintiff in a judgment is tbe owner of it, and tbe burden of proof must be on tbe one who alleges tbe contrary. If Mr. Satterthwaite was not tbe beneficial owner of one of tbe judgments be was, as nominal plaintiff, at least a trustee, as be recovered tbe judgment in bis own name, and having tbe legal title, be would bold it for tbe use and benefit of the real owner. These are matters to be settled between George II. Brown, administrator, and tbe real owners *262of tbe judgment, and do not concern the defendants, as they will be protected by payment to the plaintiff of record. Whether he had a right, in law, to sue on the notes, as- he did, cannot be questioned collaterally, at this stage of the proceedings, as an objection for defect of parties must be taken by answer or demurrer or it will be considered as waived. Revisal, secs. 475, 476, 477 and 478; Usry v. Suit, 91 N. C., 406; Kornegay v. Steamboat Co., 107 N. C., 115, and cases cited at p. 117. It is not necessary that the Parsons should be parties, so far as the defendants are concerned, as the latter may safely pay to the plaintiff on the record, as we have shown, and to fortify this further, we now cite Newsom v. Russell, 77 N. C., 277: “It is not the duty of the maker of the note to see to the .application of the money, and it is even less his duty to fight the battle of the creditors of the bankrupt. What interest is it to him if he is absolved from further liability by payment of his debt upon a judgment regularly obtained against him?” But it may be expedient to determine the fact as to the beneficial interest of the Parsons, so that the plaintiff may know how to pay out the fund when received by him and to protect him against any mistake in that regard. Plaintiff has filed a petition for a certiorari to correct the record, so as to show that it was admitted at the trial that the Parsons were the beneficial owners of the judgments, with a letter from the presiding judge to that effect, but we do not deem it necessary to act upon it at all, as we have decided not to disturb the finding on the sixth issue, and it does not concern the defendant if the Parsons are- not parties. The court may make other parties as defendants in this action, if the issues to be submitted require it; because of their interest therein. The motion of the appellants for judgment of nonsuit was properly overruled. The question involved in the nonsuit of plaintiff on the motion of Virginia H. and Harry W. Perkins will be hereinafter considered.
This leaves the three principal questions in the case for consideration: First, whether the judgments are barred by the statute of limitations; second, whether the Bernards are entitled to have the Perkins’s part of the land (lot No. 33) sold, it being the last part conveyed by J. J. Perkins, before their land is resorted to by the plaintiff; and, third, whether the court should have submitted to the jury the issues tendered by the Bernards.'
As to the statute of limitations, we do not think it barred the plaintiff’s right to proceed in the collection of. the judgments by suit. Mr. Gulley has stated his contention in behalf of the Bernards very frankly and very clearly. We quote from the supplemental brief: “The record shows that the so-called judgments were docketed'31 November, 1870, the homestead was allotted on 18 February, 1871, or 3 months and 7 days afterwards. The statute of limitations was not suspended from 1 November, 1883, to 11 March, 1885, making 3 year 4 months and *26310 days to be added. Tbe present statute, Revisal, see. 686, was passed 6 February, 1905, and tbis action was begun 15 August, 1913, making 8 years 6 months and 9 days between tbe two date.s. These three periods, when added together, make 10 years 1 month and 26 days, showing that the action is unquestionably barred.”
By the Laws of 1869-’70, ch. 121, ratified 25 March, 1870 (Battle’s Rev., eh. 55, see. 26), what is called “the reversionary interest” in a homestead was forbidden to be sold, and it was further provided .that the statute of limitations should not run against any debt owing by the owner of the homestead affected by the act during the existence of his interest in the homestead. This act was construed in McDonald v. Dickson, 85 N. C., 248. It was not incorporated in the Code of 1883, which became effective on 1 November of that year, and it was held in Cobb v. Halyburton, 92 N. C., 652, 654, that it ceased to operate from that day and the statute of limitations again began to run, and it continued to do so until 11 March, 1885 (Laws 1885, ch. 359), when another act was passed with this provision: “The statute of limitations shall not run against any payment owing by the owner of a homestead or homestead interest during the existence of such homestead or homestead interest, whether the same has been or shall hereafter be allowed, assigned and set apart under execution or otherwise.” The word “payment” used in this statute, which from the context it was reasonably inferred meant “judgment,” and was by some misprision of the copyist substituted for the latter word, produced some uncertainty in regard to the matter until 24 January, 1887, when the Legislature corrected the phraseology by substituting the words “judgment against” for the other words, “payment owing by,” so that it would read generally that the statute of limitations should not during the existence of the homestead affect any judgment against the owner thereof. The acts of 1885 and 1887 now constitute a part of Revisal, sec. 685.
We need not decide whether the Bernards are entitled in the computation of time elapsed, when the statute of limitations was operative, to the first period claimed by them, that is, the 3 months and.7 days between the date of docketing the plaintiffs’ two judgments and the date when the action was commenced, nor need we consider the other claim of 1 year 4 months and 10 days from 1 November, 1883, to 11 March, 1885, as we are of the opinion that they are not entitled to count the period last claimed, that is, 8 years 6 months and 9 days, our construction of the act of 6 February, 1905 (Laws of 1905, ch. Ill), as brought forward in the Revisal, sec. 686, being quite different from the one relied on by learned counsel. That section provides: “The allotted homestead shall be exempt from levy so long as owned and occupied by the homesteader or by any one for him, but when conveyed by him in the mode authorized by the Constitution, Article X, sec. 8, the exemption *264thereof ceases as to liens attaching prior to the conveyance. The homestead right being indestructible, the homesteader who has conveyed his allotted homestead can have another allotted, and as often as may be necessary: Provided, this shall not have any retroactive effect.”
The Bernards insisted that under section 686 of the Eevisal, if the owner of the homestead, against whom a judgment has been taken, conveys it, he thereby subjects it to sale under execution issued upon the judgment, and that, as the creditor can thus proceed against him, the effect of the section is to put the statute of limitations in motion again as to homesteads which have been conveyed by their owners. We need not say how this is, or give any precise opinion upon the meaning of that statute, as there is a proviso to it which prevents it from being retroactive in its operation. In our case the judgments were rendered, and the homestead allotted and conveyed by its owner long before the statute (Eevisal, sec. 686) was enacted. It would, therefore, be made to operate retroactively if applied to the facts in this record. It was thought just and right that it should not do so, as it might otherwise be open to very serious objection. At any rate, the Legislature has plainly said it shall have no such effect, but a prospective one alone, and this is a sufficient reason for the law. In Davenport v. Fleming, 154 N. C., 291, the Court considered the act and said, by Justice Solee, in regard to this feature of it: “A construction of section 686 of the Eevisal does not seem to be involved in this appeal, for the section itself contains the provision that the same shall have no retroactive effect, and the determinative facts all transpired before the section was enacted. Chapter 3, sec. 3, Laws 1905.” And in Crouch v. Crouch, 160 N. C., 447, the Court, by the Chief Justice, said: “It is true that under the act of 1905, ch. Ill, now Eev., 686, the homestead exemption ceased as to this tract of land when the homesteader conveyed it to Abernathy. But 'the act specifically provides that it shall not have any retroactive effect; therefore the land did not become subject to plaintiff’s execution till 1905, and the defendant has neither held the land seven years under color of title nor is the lien of the judgment barred by the ten years statute of limitations.” We therefore conclude on this question that the last claim of the Bernards cannot be allowed, and the eight years six months and nine days counted as a part of the time during which the statute of limitations was running, and, this being so, it follows that the judgments are not barred by it. Farrar v. Harper, 133 N. C., 71, does not apply. It decided very different questions: first, as to whether the act of 1885, ch. 359, suspended the running of the statute of limitations until there had been an actual allotment of the homestead; and, second, as to whether the act of 1901, ch. 612, extending the time two years for allotting homesteads, prevented the running of the statute against a judg*265ment wbicb was already more than ten years old. We answered botb questions in tbe negative.
Tbe next inquiry is, wbetber tbe Bernards are entitled to bave tbe paid of lot No. 33, wbicb was conveyed to W. W. Perkins by J. J. Perkins, sold under tbe decree of tbe court to satisfy plaintiff’s judgments before their part of tbe said lot is sold for that purpose, as tbe same was conveyed to them by tbe judgment debtor, J. J. Perkins, before be conveyed tbe remainder thereof to W. W. Perkins.
The doctrine seems to be established that where there is a lien by judgment resting upon land, part of which is sold by the debtor, the remaining portion will be sold before resorting to the land first sold to satisfy the debt, and the rule extends to a purchaser of the remaining land from the judgment debtor as well. Tbe rule, with its exception ■or qualification, is thus stated in 23 Cyc., 1392 and 1393: “Where part of tbe land subject to tbe lien of a judgment has been sold, equity will require the judgment creditor, seeking to enforce bis lien, to proceed first against that portion remaining unsold, provided this can be done without injustice to him and without involving him in litigation or danger of loss. So, also, where part of tbe land has been mortgaged, tbe judgment creditor must first háve recourse to that portion remaining in the bands of tbe debtors; and where part of the land has been mortgaged and part aliened in fee the judgment creditor must first proceed to sell tbe debtor’s equity of redemption in tbe mortgaged lands before coming upon tbe property conveyed in fee. Where lands .subject to the lien of a judgment have been sold or encumbered by tbe owner at different times to different purchasers there is no contribution among tbe successive purchasers, but tbe various tracts are liable to tbe satisfaction of tbe judgment in tbe inverse order of their alienation or encumbrance, the land last sold being first chargeable, unless the judgment creditor breaks tbe order of liability by a voluntary release of one or more of tbe tracts.”
It has been recognized by this Court in Jackson v. Sloan, 76 N. C., 306, where Justice Bynum said: “Tbe rule of equity is, that when one creditor can resort to two funds for tbe satisfaction of bis debt, and another to one only of the funds, tbe former shall first resort to tbe fund upon wbicb the latter has no claim, as that by this means of distribution botb may be paid. And it is an analogous principle of equity that where a debtor whose lands are encumbered by a judgment lien sells one portion of it, tbe creditor who has a lien upon that which is sold and upon that which is unsold shall be compelled to take his satisfaction out of the undisposed of land, so that thus the creditor and tbe purchaser botb may be saved. Rollins v. Thompson, 21 Miss., 521; Russell v. Howard, 2 McL., 489; Alston v. Munford, 1 Brock., 267; Hermon on Ex., 224. But this, however, is never done when it trenches *266on tbe rights or operates to tbe prejudice of tbe party entitled to go-upon both funds. Meech v. Allen, 17 N. Y., 300; United States v. Duncan, 4 McL., 607; McCulloch v. Dashiell, 1 Harris & Gill, 96.” See,, also, Francis v. Herren, 101 N. C., 497; 2 Story’s Eq. Jur., sec. 1233 a; Clark v. Wright, 24 S. C., 526.
This equity bears a close resemblance to tbe doctrine of marshaling,, “which grows out of the principle that a party having two funds to-satisfy his demands shall not, by his election, disappoint a party who-has only one fund. If A, for example, holds a first mortgage against only one of these parcels, natural justice would seem to require that A should not resort in the first instance to the parcel covered by B’s mortgage, but should endeavor to collect his debt from the lot charged with his encumbrance alone, and resort to the portion covered by B’s mortgage only for the purpose of making up any deficiency.” Bispham’s-Pr. of Equity, sec. 340. But, as has been observed, this equity is never enforced against the creditor when he will, in any substantial way, be-prejudiced by it, and if it were not for the other questions involved we-would hold that the plaintiffs in the Satterthwaite judgment would be-delayed or embarrassed in the collection of his debt and put to extra cost and expense, and the doctrine, therefore, would not apply; but there are-other matters to be determined in which he has an interest and the other parties a very vital one. It is asserted that the judgment in favor of W. M. B. Brown, administrator of Richard Short, has never been paid,, but is still due and owing, and is a charge upon the lands of J. J. Perkins or his assignees, while this is denied on the other hand.' There is also-controversy as to whether this judgment was assigned to Perkins’s wife, and afterwards given to him in her will, thereby being extinguished, and. also a contention by W. W. Perkins, administrator, and heirs, that it was assigned to him. O. M. Bernard also claims that six hundred dollars of this judgment was assigned to him. As to this claim of O. M. Bernard, it appears that if there was such an assignment it was made-for the purpose of protecting the land conveyed to Bernard’s wife by J. J. Perkins'from any lien of the judgment of W. M. B. Brown, administrator of Richard Short, and as we hold that the land so conveyed is discharged from any such lien, the question as to this assignment becomes immaterial. The paper-writing, dated 24 July, 1893, and entitled a “release,” which was given by R. A. Tyson to Mrs. Bernard,, quitclaims to her the parcel of land conveyed to her by J. J. Perkins. But R. A. Tyson had no estate or interest in the land, being merely a judgment creditor, having nothing more than a lien thereon. It has been held in this Court that a judgment does not vest any estate or interest in the land upon which it is a lien, but only gives to the plaintiff in it the right to have it applied to the satisfaction of his debt. Bruce v. Nicholson, 109 N. C., 202; Baruch v. Long, 117 N. C., 509; Bryan v. *267Dunn, 120 N. C., 36; Dail v. Freeman, 92 N. C., 357; Murchison v. Williams, 71 N. C., 135. It would seem, therefore, necessarily to follow that it was intended, as the legal effect of the instrument, that the land should he released and exonerated from the judgment lien, as this is all that he, R. A. Tyson, could do, and we so hold upon the facts as they now appear.
But the other questions embodied in the issues tendered by the Ber-nards must be submitted to the jury in order that the facts may be found as to whether the said judgment was paid by J. J.-Perkins, and, if not, whether he assigned it to his wife and in her will she gave it to him, which, of course, would extinguish it, as the two antagonistic rights of creditor and debtor had merged in one and the' same person. The issues might be a little more clearly drawn, but we leave this with the court below, and will not anticipate what the evidence may be by any attempt to formulate them ourselves. We will suggest, though, that an issue be submitted as to whether J. J. Perkins paid the judgment out of his own money before the time it is alleged that he assigned it to his wife. As to issue No. 7, tendered by the Bernards, if Mrs. Bernard paid the full consideration of $1,000 for the land conveyed to her by J. J. Perkins, and it is released, as we hold, from the lien of the judgment, we do not see how an assignment of $600 of the judgment to C. M. Bernard can be sustained, other than as confirming the release to his wife, unless it was an independent transaction based upon a different consideration. But it may be necessary to settle this matter by a finding of the jury unless the parties can agree as to the true nature of the transaction.
A court always seeks to secure the best price in the sale of land under its decree, and, therefore, it is necessary to determine the status of the W. M. B. Brown judgment, not only to settle all disputed matters so that the land can be sold to determine how the proceeds of sale shall be distributed, as that judgment is older in date, and, therefore, is prior in lien to the other two, but in order to remove the cloud from the title and get a sound price for the land. As the junior judgment creditor has an interest in the settlement of these matters there will be no additional delay to him if we direct that the Perkins part of the lot be first sold, before there is a sale of the Bernard lot, as these questions must be determined before any sale of the land can be had, and recovery of his debt will not be jeopardized, nor will be in the least embarrassed thereby.
We therefore conclude: First, that the plaintiff holds valid judgments against J. J. Perkins, which are liens upon the lands in question (lot No. 33). Second, that said judgments are not barred by the statute of limitations, and that plaintiff is entitled to have them sold for their satisfaction. Third, that if the judgments are not paid within a time to be fixed by the court, and it therefore becomes necessary to sell the *268land, that part of it which was conveyed to W. W. Perkins shall be first sold before the part thereof which was conveyed to Mrs. Lucy Gr. Bernard is sold to pay the indebtedness.
This conclusion is practically the same that would be reached had we .affirmed the ruling of the court that the Bernard land alone be sold, for in such an event the Bernards would be entitled to pay the amount of the debt to the plaintiff herein and have the judgment assigned for their use and benefit, in which case they would be subrogated, by virtue of the assignment, to the rights of the plaintiff as against the Perkins interest in the land, or if they had been compelled to pay it by a sale of their land, or by compulsion of legal process or a decree of court, which is substantially the same thing, they would be subrogated in equity to the rights of the plaintiff, as their land occupies, in contemplation of equity, the position of surety to the debt, the Perkins land being the principal, .and the liability of the Bernard land, as between it and the Perkins land, being secondary, and the creditor being satisfied and out of the way, thus giving full play to the enforcement of this plain equity as between the two parcels of land upon which the lien of the judgment rests.
“The equity of subrogation springs naturally out of the two equities just considered, of contribution and exoneration, and is, in fact, one of the means by which those equities are enforced. Subrogation is an ■equity called into existence for the purpose of enabling a party secondarily liable, but who has paid the debt, to reap the benefit of any securities or remedies which the creditors may hold as against the principal ■debtor and by the use of which the party paying may thus be made whole. This equity may be used to enforce the equity of exoneration .as against the principal debtor, or of contribution as against others who are in the same rank. This equity of subrogation is one eminently cal■culated to do exact justice between persons who are bound for the performance of the same duty or obligation, and is one, therefore, which is much encouraged and protected.” Bispham’s Equity (6 Ed.), secs. '335 and 336.
The duty rested upon the principal debtor, J. J. Perkins, before he conveyed to "W. W. Perkins, to pay off the debt in exoneration of that part of the land he first sold’ to Mrs. Bernard, or forfeit the remaining portion of the land to the extent necessary to do so, and when he conveyed that part to W. W. Perkins the latter took it subject to the same ■equity. Polk v. Gallant, 22 N. C., 395; Winborne v. Gorrell, 38 N. C., 117; Durant v. Crowell, 97 N. C., 373. So it results that, whichever way we view it, the right to have the Perkins land sold first before theirs was subjected to the payment of the debt belonged to the Bernards.
It was erroneous to grant the nonsuit against the plaintiff in favor of the Perkins land. It is true the plaintiff did not except, but the Ber-*269nards did, and they are entitled to have it set aside, in order to have-tbeir equity fully administered, and tbis will be done.
Tbe ease will proceed further in tbe Superior Court according to tbis opinion, and as botb tbe Bernards and Perkinses resisted plaintiff’s recovery by denying tbe validity of tbe judgments, and as tbe nonsuit obtained by tbe Perkinses bas been set aside, tbe costs of tbis Court will be divided equally between those defendants, tbe Bernards to pay one-half and tbe Perkinses tbe other half.
Error.
Justice BeowN did not sit during tbe argument of tbis ease and took no part in the decision.