Jessup v. Nixon
Jessup v. Nixon
Dissenting Opinion
dissenting: I signed the petition for a rehearing in this action so that again this long drawn out controversy could be reconsidered. I cannot make up my mind that the petition should be allowed.
On 30 March, 1896, Erancis Nixon, Jr., died and left several children, all are dead except Cornelia T. Jessup, the plaintiff, a minor six years of age at her father’s death. On 11 August, 1921, she brought this action, nearly ten years after she became of age, against her uncle the defendant.
The case came on for trial at April Term, 1923. The issues submitted to the jury and their answers thereto will explain the controversy:
“1. Was the deed from David Cox, mortgagee to the defendant, invalid and ineffective to pass the equitable title to the land in question, because made without notice of sale and advertisement, as alleged in the complaint? Answer: Yes.
2. Was said deed invalid and ineffective to pass the equitable title to said land because the same was sold subject to the homestead rights of the children, as alleged in the complaint? Answer: Yes.
3. What was the fair market value of said land at the time of said sale, to wit, 1 July, 1896 ? Answer: $1,250.
4. Did the defendant fraudulently procure the foreclosure of said mortgage and the sale of said land and cause the same to be sold subject to the dower interest of the widow and the homestead rights of the children of Francis Nixon and thereby obtain the same at a grossly inadequate price, as alleged in the complaint? Answer: No.
5. Did the defendant, while administrator, and with a purpose of purchasing-the property in question at an undervaluation cause or know*127 ingly permit it to be understood at sucb sale tbat be was purchasing sucb property for the benefit of tbe heirs of Eraneis Nixon, deceased, as alleged ? Answer: No.
6. Is plaintiffs’ cause of action barred by tbe ten-year statute of limitations, as alleged in tbe answer? Answer: No.
7. Did plaintiffs discover, or could they by due diligence have discovered prior to three years before tbe commencement of this action tbe fraudulent conduct of defendant alleged in tbe complaint and referred to in tbe fourth and fifth issues? Answer: (Not answered by jury.)
8. Is plaintiff’s cause of action based on alleged fraudulent conduct of defendant barred by tbe three-year statute, of limitations as alleged in tbe answer? Answer: (Not answered by jury.)”
Judgment on tbe verdict was rendered for tbe plaintiff and on appeal this Court found error. 186 N. C., 100. Tbe case came on for trial again at April Term, 1928, and tbe following issues were submitted to tbe jury and their answers thereto :
“1. Did tbe mortgage sale from Dr. David Cox, to tbe defendant, Thomas Nixon, fail to comply with tbe terms of tbe mortgage, in tbat said sale was bad and made without written notice for thirty days tbat prompt payment was expected, and, in default thereof, sale would be made under tbe power of tbe mortgage, as alleged in tbe complaint? Answer: Yes.
2. Did said mortgage sale fail to comply with tbe terms of said mortgage, in tbat said sale was bad and made subject to tbe dower rights of tbe widow, and to tbe homestead rights of tbe children of Francis Nixon, Jr., as alleged in tbe complaint? Answer: Yes.
3. Is plaintiff’s cause of action barred by tbe statute of limitations, as alleged in tbe answer? Answer: No.”
Tbe only serious contention is tbat tbe defendant Thomas Nixon failed to comply with tbe terms of tbe mortgage “in tbat said sale was bad and made without written notice for thirty days tbat prompt payment was expected,” etc.
It will be noted tbat tbe defendant was administrator of Francis Nixon, Jr., and tbe judgment at April Term, 1923, found: “What was tbe fair market value of said land at tbe time of said sale, to wit, 1 July, 1896? Answer: $1,250. Did tbe defendant fraudulently procure the foreclosure of said mortgage and tbe sale of said land and cause tbe same to be sold subject to tbe dower interest of tbe widow and tbe homestead rights of tbe children of Francis Nixon and thereby obtain tbe same at a grossly inadequate price, as alleged in tbe complaint? Answer : No.”
From tbe proceeds of tbe sale and other assets, defendant bad 53 per cent to pay on Francis Nixon, Jr.’s, debts. Tbe fair market value of tbe
The principle is well stated in McIntosh, N. C. Prae. and Proc., p. 103-4, as follows: “It does not follow that, because the statutes of limitations may bar a remedy in equity as at law, the court will grant' equitable relief in every case where the statute has not barred. Laches, or unreasonable delay, independently of any statute of limitation, will prevent relief in equity, upon the principle that equity aids the diligent and not the slothful. "When a claimant has slept on his rights until the rights of innocent third persons have intervened, or it would be otherwise inequitable to change the existing conditions, equitable relief may be denied, although the statute of limitations has not barred the claim. Conscience, good faith, and reasonable diligence are necessary to call forth the exercise of the peculiar powers of a court of equity. No particular rule can be given as to what will constitute laches; it must depend upon the circumstances of each case.”
Opinion of the Court
Are the heirs at law of a deceased mortgagor precluded from setting aside a sale of the mortgaged premises, not made in compliance with the terms of the mortgage, when at the time of said sale the estate of the mortgagor was insolvent and unable to pay more than fifty-three per cent of the indebtedness thereof?
From time immemorial it has been held by the courts that the law looks upon a mortgagor with a kindly eye, and this legal beneficence has grown into a maxim “that once a mortgage always a mortgage.” Ray v. Patterson, 170 N. C., 226, 87 S. E., 212. It is also beyond question in this jurisdiction that the heirs at law of a deceased mortgagor may maintain an action to redeem. Rich v. Morisey, 149 N. C., 37, 62 S. E., 762; Morris v. Carroll, 171 N. C., 761, 88 S. E., 511.
The opinion of the Court in 196 N. C., 33, followed the opinion reported in 186 N. C., at p. 100, and the petition to rehear attacks the legal soundness of that opinion. In 186 N. C., 100, 118 S. E., 896, the Court said: “The plaintiffs must show that the assets of the estate were sufficient to pay his debts before they could ask the court to decree that they recover this land and its rents when the creditors had not been paid in full.” In other words, this proposition means, as the writer interprets it, that the heirs at law of a deceased mortgagor cannot assert the right to redeem even though the sale he invalid, when it appears that the estate was insolvent, and that it would be necessary to sell the land at any event to make assets to pay debts. The cases cited in the opinion in 186 N. C., 100, in support of the principle announced are Highsmith v. Whitehurst, 120 N. C., 123, 26 S. E., 917, and Russell v. Roberts, 121 N. C., 322, 28 S. E., 406. In the IlighsmÁth case an action was instituted to sell the land to make assets and the administrator was the purchaser at the sale. The widow and heirs at law of the mortgagor sought to redeem the land. It did not appear that the sale had been improperly made, and the attack upon the sale failed, because in referring to the proceeding- the Court declared: “And while it is not as formal as it might have been, it appears to have been substantially correct and authorized the defendant administrator to sell the land.” Clearly the equity of redemption was properly extinguished, and the only question left in the case was whether the conveyance could be set aside on the ground of fraud for the reason that the administrator was the purchaser of the property. The Court said: “Indeed, it is shown that the plaintiffs could not have been injured by the purchase of Barnhill, though made for the administrator, as the land sold for $1,211, when the jury on the trial of this case found that at the date of the sale it was only worth $1,200.”
These cases, therefore, hold that if the power of sale is properly exercised, the equity of redemption is properly extinguished, and hence, in order to set aside a conveyance upon the ground of fraud because it was purchased by a person acting in a fiduciary relation, injury must be shown, and in such event, if no injury is shown, the conveyance will not be set aside.
However, the case at bar presents both aspects of the legal question, because the jury has found that the power of sale was not properly exercised, and that the sale was invalid from the beginning. Indeed, the proposition that the insolvency of the estate of the mortgagor precluded the exercise of the right of redemption was considered by this Court in Rich v. Morisey, 149 N. C., 31. In that opinion the Court said: “The defendants except to his Honor’s refusal to permit them to show that O. B. Morisey was insolvent at the time of his death. We see no error in this. It was not relevant to, and could not affect the verdict upon any issue, besides, with the final account of the administrator in evidence, unimpeached, insolvency was clearly shown.”
In the case at bar the report of the administrator clearly showed insolvency, and thus the Rich case is positive authority that mere insolvency of the estate will not preclude the heirs at law of the mortgagor from asserting the right of redemption where the sale of the land was not properly made.
After careful examination, we are of the opinion that the decision in 186 N. C., p. 100, with respect to the right of redemption is not in accord with the weight of authority or the logic of the law.
The decision of the Court reported in 196 N. C., 33, adopted the view that the decision in 186 N. C., 100, was the “law of the case,” and, therefore precluded further inquiry. Ray v. Veneer Co., 188 N. C., 414, 124 S. E., 756; Mfg. Co. v. Hodgins, 192 N. C., 577, 135 S. E., 466; Newbern v. Tel. Co., 196 N. C., 14, 144 S. E., 375. Undoubtedly this is a strong position and presents serious legal difficulty. However, it has been held in School Directors v. City of Asheville, 137 N. C., 503, 50 S. E., 279, that the doctrine of “law of the case” does not preclude the Court from reviewing its own decision, “certainly when no rights of property have become vested or change made in the status of the parties by reason of a ruling at some former stage of litigation.” Furthermore, in the appeal reported in 186 N. C., p. 100, the Court expressly said that “there was no evidence that due notice and advertisement of sale were not given in 1896, or that the mortgage sale was not regular.” In the record now before us.the jury finds upon competent evidence that the
There are many exceptions in the record, and we have given earnest and careful consideration to the records, the briefs, the petition to rehear, and the additional briefs filed by the parties, and have come to the conclusion that the judgment rendered at the April Term, 1928, of Perquimans Superior Court ought to be upheld and affirmed, and it is so ordered.
Petition allowed.
Reference
- Full Case Name
- CORNELIA T. JESSUP v. THOMAS NIXON
- Cited By
- 3 cases
- Status
- Published