Phillips v. Chamberlain

Supreme Court of the United States April 15, 1884

Phillips v. Chamberlain, 61 Miss. 740 (1884)

Campbell

Opinion of the Court

Campbell, C. J.,

delivered the opinion of the court.

We accept as correct the Chancellor’s conclusion as to the facts of this case as embodied in his decree, but we dissent from his view of the law applicable to this conclusion. Our view is that the deed of trust executed by Smith, on the 22d of April, 1878, to secure Phillips, was invalid, and not enforceable, as against the complainants in this suit, and that it should be canceled, so far as they are concerned, and that Mrs. Phillips,should'not be permitted to invoke it as against them, but that the Dew & Kirksey mortgages and the Tarleton judgment are the only claims she has *749which are paramount to the demands of these complainants. As to the other demands to secure which the deed of trust of 22d of April, 1878, was given, Mrs. Phillips holds them, as they were before the deed of trust was executed, and it is not a security for them against complainants. The deed of ■ trust being invalid as to them, the several demands it was made to secure are left as they were before it was given, and each stands on its own foundation, as if the deed of trust had never had existence.

We therefore affirm the decree of the Chancellor, except that part of it which upholds the trust deed of 22d of April, 1878, as a valid security, and gives the amount secured by it precedence as a lien on the property conveyed -by it over the demands of the complainants, and cancels the Dew & Kirksey mortgages and the Tarleton judgment, and as to these matters the decree is reversed on the cross appeal, and the said deed of trust is declared to be of no effect as against the complainants, who are entitled to subject said property to their demands next after the payment of the Dew & Kirksey mortgage debts and the Tarleton judgment.

An account will be taken on the principles indicated by the decree, but Phillips must not be charged with any increase of rent by reason of improvements made for which compensation is denied. Tatum v. McClellan, 56 Miss. 352.

The costs of this appeal are taxed against appellants, and the cause remanded to he proceeded with in accordance with this opinion.

Reference

Full Case Name: R. W. Phillips v. John C. Chamberlain
Status: in most instances
Syllabus: 1. Fraudulent Conveyance. Invalid security. Subrogation. Case in judgment. S., combining fraudulently with' P. for the purpose of effecting a settlement with his (S.’s) creditors, executed as part of the scheme a deed of trust for P.’s benefit on certain real estate. P. then, pursuant to the arrangement, bought up and paid off many claims against S., and took an assignment to a judgment and a mortgage, both of which were liens upon the land conveyed by the trust deed. The land was sold under the trust deed and P. became the purchaser, crediting the amount paid by him for S.’s benefit on the amount pretended to be secured by the trust deed. P. conveyed the land to his wife by deed of gift. Subsequently certain judgment creditors filed a bill to subject the land to the payment of their debts. Held, that as to existing creditors the trust deed was no security either to P. or his grantee, but that the assignment of the judgment and mortgage was valid, and P.’s grantee was entitled to be subrogated to the rights of the assignors notwithstanding the fraud in the trust deed. 2. Accounting. Bents and profits. Improvements. Where an account is taken between a.party in possession of land which creditors are seeming to subject to the payment of debts, the party in possession is not to be charged with increase of rent by reason of improvements made by him and for which he is allowed no compensation.