Wessel v. Brown
Wessel v. Brown
Opinion of the Court
delivered the opinion of the court.
The original bill sought to subject an alleged equity of redemption of respondents, N. P. and J. E. Saunders, in a tract of land containing 205-| acres, alleged to have been sold at execution sale, and purchased by respondent, George F. Akers, to the satisfaction of a judgment recovered by complainant against Mrs. C. H. Brown, N. P. and J. E. Saunders, for about $4,600, and upon which execution has been issued and returned nulla bona.
The amended and supplemental bill alleged that since filing the original bill complainant learned that said respondents had redeemed the land from respondent Akers, but had ascertained that the same was encumbered by a deed of trust executed by respondents, Mrs. C. H. Brown and N. P. and J. E. Saunders, to West H. Humphreys, before the recovery of complainant’s judgment, to secure about $2,762 due from said respondents to one B. N. Johnson; that said land was also encumbered by a mortgage executed to J. P. Helm, by said respondents to secure him as their ■ surety upon an appeal bond in an appeal taken by them to the Supreme Court, from a decree of the chancery court rendered against them in favor of one ■ Granberry for about $2,800, which cause was still pending in the Supreme Court, and sought to subject the equitable interests of said N. P. and J. E. Saunders and of Mrs. Brown, if she had any in said land, • subject to said prior encumbrances, to the satisfaction of complainant’s said judgment, etc.
The answers both to the original and supplemental and amended bills of the respondents, Mrs. Brown and J. E. and N. P. Saunders, admitted the recovery of complainant’s judgment and return of nulla bona, and the sale of said land under execution and purchase by said Akers, but denied that said Akers had been paid his demand for which said land was sold since the original bill in this cause was filed, and admit the execution of said deed of trust to West H. Hum-phreys for the benefit of Johnson, a copy of which is made an exhibit to the amended bill and filed in this cause, and also the mortgage for the benefit of Helm as alleged.
Said West H. Humphreys was made a party respondent to the amended and supplemental bill, but during the progress of the cause in the chancery court, on the 4th of January, 1879, the cause was dismissed ■as to him upon the rule docket and also as to said Akers, an admission having been entered upon the record that the amount of his bid upon the land had been fully paid off before the amended bill ivas filed.
The chancellor decreed a sale of the interest, either legal or equitable, which said respondents, Mrs Brown and 1ST. P. and J. E. Saunders had in said land, for the satisfaction of complainant’s judgment, interest and costs, subject to said mortgage and deed of trust, and •the respondents have appealed.
It is now insisted, with apparent earnestness, that was error of the chancellor to decree a sale of the
No such question was made in the court below either by demurrer or answer to the amended bill.
The power of a chancery court to subject an equity in lands to the satisfaction of a debt, subject to prior encumbrances, has been too long and too well settled now to admit of doubt. A mortgage or deed of trust i| but a security for a debt. In equity, the mortgagor or conveyor is held the owner of a beneficial interest in the land, and this right he may sell or convey as any other property. It is not subject to sale by execution under our law — being a purely equitable interest, and therefore is to be reached in a court of equity, either under its inherent powers or-under Code, sec. 4283, et seq., authorizing a judgment creditor to subject property not subject to execution: Weakley v. Cookrell, 2 Tenn. Ch., 320, 321.
We have been referred to no case — we know of none — and think it safe to assume that none can be found, where it has been held that a judgment creditor, with a return of nulla bona (which is not now necessary under the provisions - of our Code), who comes into a court of chancery seeking to subject the equitable interest of a mortgagor on land to the satisfaction of his judgment, subject to the mortgage, has been denied that mode of relief.
It is within the power of- the mortgagor to show what prior encumbrances upon the property are, but which the respondents in this ease have not attempted to do, however, and if by failing so to do, their interests are endangered, we have no power, in such a case as the one now under consideration, to prevent it.
There is no error in the decree of the chancellor, and it must be affirmed with costs.
Dissenting Opinion
delivered the following dissenting opinion:
On the 18th of August, 1876, complainant filed his-
The bill alleges that complainant recovered a judgment in the Law Court of Davidson county, against Narcissa P. Saunders and Mrs. A. V. Brown, from which judgment they appealed to the Supreme Court, and J. E. Saunders became their surety on the appeal bond. At the January term, 1876, of the Supreme Court, and on the 5th of April, 1876, the judgment was affirmed in the Supreme Court and judgment rendered against Miss Saunders and Mrs. Brown for the sum of $4,152.60, the amount of the judgment in the Law Court, and the further sum of $484.07, the interest accrued thereon to April 5th, 1876, making together the sum of $4,637.07, and the costs of the Supreme and Law Courts, as well as against J. E. Saunders, the security on the appeal bond.
The bill alleges that an execution issued on said judgment from the Supreme Court on 'May 20, 1876, against said parties to the sheriff of Davidson county, and was returned on the 3d of July, 1876, “no property to be found of either of the defendants.” A certified copy of said judgment in the Supreme Court is filed and made a part of the bill, and that a certified •copy of the execution and return thereon will be filed ■on or before the hearing if required ■ that within a ■day after the rendition of the judgment in the Supreme Court, a duly certified copy of the same was filed for .registration, and was registered in Davidson county, in which county the defendants at the time resided, on ■the 7th of April, 1876.
The bill prays that writs of attachment and injunction may issue, “and the estate of Mrs. Brown and-Miss Saunders and J. E. Saundei% be attached — that the equity of redemption of Miss Narcissa and J. E. Saunders, and the interest, if any, qf Mrs. A. V. Brown, in and to the land aforesaid be attached, and they be enjoined from disposing of the same. The-bill alleges that complainant is informed and believes,, that defendants, Miss Saunders and Mrs. Brown, have made a conveyance of their personal property with the view of delaying their creditors. The bill prays that the equity of _ redemption of the parties and the interest of Mrs. Brown be sold for the payment of his judgment.
A copy of the judgment in the Supreme Court was. filed with the bill, with the certificate of .the register, showing the same was registered at the time alleged, in the bill.
A demurrer was filed to the bill by Mrs. Brown ' and Miss Narcissa and J. E. Saunders, which was-overruled by the chancellor, except the cause assigned ,to that part of the bill which seeks discovery as to-personal property, which is well taken, and the samé-is sustained, and that part of the bill dismissed.
J. E. Saunders, Narcissa P. Saunders and Mrs..
On the 28th of June, 1878, complainant obtained ^eave to file an amended and supplemental bill, , which
. This amended and supplemental bill charges that George F. Akers, who had purchased the land in the-original bill mentioned at execution sale, has since the-filing of the original bill been paid in full of his demand, and all claim upon the 55 acre tract has been relinquished by him, or at least he has been paid in full of hjs claim against said land. The Edgefield property described in the bill was not redeemed by defendants from him, and the time for redemption having expired the same is now the property of said Akers.
Complainants again charge that the defendants own no property subject to execution, and that since filing his original bill the complainant has ascertained the fact that there was in existence at the time he obtained his judgment referred to in the original bill, a deed of trust; said deed of trust was executed by the defendants, Mrs. A. V. Brown, N. P. and J. E. Saunders, to West H. Humphreys, trustee, to secure a debt to B. B. Johnson in the sum of $2,762.50, being four notes, one for $610, payable in five months at 10 per cent, three others for $217.80 at 6 per cent, due and payable respectively in six, twelve and eighteen, months. Said notes are dated June 14, 1874. The deed' has been duly registered in the register’s office of Davidson county, a duly certified copy will be filed upon the hearing, and when filed is asked to be made a part of the bill; that said deed expressly contracts that all homestead or exemption claim is specially waived; that complainant does not know how much money
Complainant has also learned that there is another encumbrance on said property — that suit was instituted in the chancery court of Davidson county in the case of James H. Granbury v. J. E. Saunders and others, and J. P. Helms became their surety on the appeal bond in said cause and took a mortgage on said realty to secure him, which was registered in August, 1878. The defendants, Saunders and others, appealed from the decree ordering a sale of said land and are now litigating the same. The amount for which the decree was obtained was about $2,800, and no part of that has been satisfied. Complainant does not admit that the Granbury decree has priority over him, though it. may have. Helms’ conveyance is subsequent to his judgment at law. Complainant does not know whether there is any other encumbrance on said land, and calls upon defendants to answer whether there is any other encumbrance. Complainant charges that his judgment interest and costs thereon are still due and unpaid. Complainant prays that said realty described ” in the original bill, the Melrose tract of 55 acres, and described accurately in the deed of trust of defendants, or rather all of the legal or equitable estate of said defendants therein, owned by them or either of them at date of the Law Court judgment, on the 3d day of February, 1875, be sold on terms of not less than six nor more than twenty-four months time, and free
On the 26th of October, 1878, J. E. and N. P. Saunders and Mrs. Brown file their answers. The answer denies that George F. Akers has been paid iii full of his demand in which said land was sold since the filing of the original bill; admits the Edgefield •property has never been redeemed, and it may be true Akers claims - it. As to what 55 acre tract of land •complainant refers to in his bill, respondents cannot •undertake to state, but say they own no such tract of land. They admit the execution of the deed of trust to* West H. Humphreys ' for the purpose stated in the bill, and the debt therein' secured was a just ■debt, being in part for borrowed money. Admits there is another encumbrance in favor of Granbury in reference to which a suit is now pending in the Supreme Court by appeal, and J. P. Helms is the surety upon the appeal bond, and to secure him as such surety a mortgage was executed to him as alleged, but do not
Ho answer is filed by Akers or Humphreys. The following entry is copied into the record: “ Endorsed •on back of bill, dismissed as to George F. Akers and W. H. Humphreys, trustee.” There is no date to this endorsement, and there is no decree of the chan-cery court dismissing the hill as to these parties. Ho proof is taken in the case, nor any exhibits filed as proof except the certified copy of the Supreme Court Judgment, '• and the deed of trust to West H. Hum-phreys, which only conveys 55 acres to secure the debt to B. R. Johnson. The oath to the answers is not waived and they are all sworn to.
•On the 5th of June. 1875, the cause was heard by the chancellor upon the original and amended and supplemental bill, and answers thereto and exhibits filed. '
The decree, after reciting the Supreme Court judgment, the issuance of the execution thereon and return of nulla bona upon said execution, and setting out the boundaries of the land says: “The said Harcissa E. and J. E. Saunders each own an undivided half •interest in said real estate, their respective interests
Complainant, it appears, has abandoned the relief' sought in the original bill; that is, an attachment and,
The complainant has framed his original bill and amended bill upon the following sctions of the Code:
Section 2984 is as follows: "A judgment or decree shall not bind the equitable interest of the debtor in' real estate or other property, unless within sixty days-from its rendition a memorandum of the judgment or decree, stating the amount and date thereof, with the names of the parties, is registered in the register’s office of the county where the real estate is situated.’’
In relation to the jurisdiction of chancery courts, section 4282 of. the Code is as follows: “ They have exclusive jurisdiction to aid a creditor by judgment or decree, to subject the property of defendant which cannot be reached by execution, to the satisfaction of the judgment or decree, under the provisions of this Code.”
It is conceded that complainant had a duly certified copy of his judgment registered in the county Avhere the real estate is situated, and within the time required by the Code, but he has failed to have a. duly certified copy of his execution filed in the record with the return thereon, showing that the defendants had no property which could be reached by execution. In the case of McNairy v. Eastland, 10 Yer., 309, the-
But even if it was necessary that a judgment creditor should issue his execution and have a return thereon of nulla bona before he could file a bill to subject the equitable interest of a judgment debtor to the satisfaction of his judgment, still in this case complainant expressly alleges that he did have an execution issued upon his judgment in the supreme court, and the same was returned nulla bona on the 3d of July, 1876. The answer says, “they suppose it is true the ji. fa. issued from said judgment at the time ■stated, and that the officer made the return thereon in the manner and at the date stated in the bill,” clearly admitting the issuance and return of the execution, •and waived the necessity of its being filed in the record.
The more serious and difficult question urged by •defendant’s counsel is, that the proper and necessary parties were not before the court — that the pleadings and proof did not fix and ascertain the interest of said defendants in the real estate, and to sell the equitable interests of the defendants with this uncertainty, would deter bidders and cause a ruinous sacrifice of the -property of defendants, and be productive of a ¡multiplicity .of suits.
Daniel, in his Chancery Practice and Pleading, p. 181, says: “It is the constant aim of a court of equity to do complainants, justice by deciding upon and settling the rights of all parties interested in the subject of the suit, so as to make the performance of the order of the court perfectly safe to those who are compelled to obey it, and to prevent future litigation.”'
Judge Story, in his work on Pleadings, sec. 72, says:. “It, is a general rule in equity that all persons materially interested, either legally or beneficially, in the subject-matter of a suit, are to be made parties to it, either as plaintiffs or defendants, however numerous they may be, so .that there may be a complete decree, which shall bind them all. By this means the court is enabled to make a complete , decree between the parties, to prevent future litigation by taking away the necessity for a multiplicity of suits, and to make it perfectly certain that no injustice is done either to the parties before it, or to others, who are interested in the subject-matter, by a decree which might otherwise be grounded upon a partial view of the real merits.”
The bill charges that J. P. Helms has a lien upon said land which is subsequent to complainant’s lien, and there is not one word of proof to show whether the lien of Helms is prior or subsequent to the lien, or what is the amount involved in the suit for which he is surety on the appeal, having taken said mort.gage upon the land to secure him as such surety. The decree directs the clerk and master to sell all the interest of defendants, legal and equitable, in said 2051.-acres of land, and unless otherwise directed by J. E. • Saunders and N. P. Saunders, he will sell their in
If the object of. the complainant is to invoke the aid of a court of equity to collect his debt, this would, be the most certain means- to accomplish that object.. If it be to sacrifice the property of defendants, a court, of equity will not aid him to do it.
It may be that a large portion of the debt of B.. H. Johnson has been paid, that the result of the litigation with Granbury has removed his lien, and the liability .of Helms as surety has been removed, and the-sale of only a small portion of this valuable tract of land would be sufficient to pay complainant’s debt and-all interest thereon, and still leave defendants a home. By affirming the decree of the chancellor, all of their-interest, legal and equitable, would be sacrificed, sold free from redemption, and the purchaser would be either the complainant or some speculative adventurer,; who would turn them out of possession and take his chances in the litigation which would follow, whether-the small investment he made would be lost or win a fine estate. -I do not think that courts of chancery ought to lend its aid to any such proceedings, and while I cannot find any case directly adjudicating the
Judge McFarland says: “ It is. argued that to hold contrary to the, chancellor’s conclusions, will be arbitrarily to override a well-settled line of decisions and disregard well-settled law. The authorities, however, have never been adopted in this State, and it is more than probable that an attempt to revive and apply them now would be a great surprise to the profession.” He 'says: “The practice in this State has always
No principle of law is better settled than the jurisdiction of a court of equity to aid an execution creditor in removing embarrassments in the way of a •sale, so as to prevent a sacrifice of the property, and •ascertain the precise interest sold: See Parrish v. Saunders, 3 Hum., 431; Tony v. Page, 10 Hum., 541; Haskins v. Everett, 4 Sneed, 531.
“ Wherever there is uncertainty as to what that interest is, it would operate prejudicially to the judgment creditor by leaving him in doubt as to. what •his bid should be. It would also work injuriously to the judgment debtor, in the eye of the wal, by deterring bidders.” See Kerr v. Kerr, 3 Lea, 228.
In view of these authorities, as well as the inevitable sacrifice of the property and ruin of the defend-ants, without any benefit to the complainant, we think the decree of the chancellor should be reversed, and the cause remanded to the chancery court of Davidson, with leave to the complainant to amend his bill by making all who have liens upon the land sought to be •sold parties, and ascertain by proper references the priority of said liens, the amount of the debts secured by the same, whether said liens exist upon the whole •or a portion of said tract of land, the precise interest ■of defendants in the same, and for a sale of said lands, ■or so much thereof as may be necessary to pay said debts, according to their priorities, and the judgment •of complainant and all interests and costs.
Reference
- Full Case Name
- George H. Wessel v. Mrs. C. H. Brown
- Status
- Published