218 Miss. 813 | Miss. | 1953
The ultimate question for decision in this case is whether the mortgage lien of Ainsworth, appellant, is superior, or subject to, the title of Lee, one of the appellees, to a lot described as follows: “Beginning at a point where the South line of Lot 8 of Block 28 of the Original Survey in the Town of Bay Springs, Mississippi, intersects the Eastern line of the Right of Way of Highway No. 15, run thence East 80 Feet, thence North 60 feet, thence West to the Right of Way of Highway No. 15, run thence South along the Eastern line of said Right of Way to the point of Beginning. Section 29, Township 2 North, Range 10 East, Second Judicial District, Jasper County, Mississippi.”
The question arises under these circumstances: On September 3, 1947, Willie Jones and G. G. Gregory executed a deed of trust to Joe A. McFarland, Jr., Trustee, for the use and benefit of Burnham Ainsworth, conveying said lot. This trust deed was executed to secure payment of the principal sum of $8,500.00, money borrowed from the beneficiary by the mortgagors, plus the interest on said principal. Jones and Gregory, as evidence of such indebtedness, executed to Ainsworth ten promissory notes, aggregating, principal and interest, $10,830.50, the first note being due and payable September 1, 1949, and one note being due each year thereafter. The trust deed also, by its express terms, secured any other indebtedness which might be owing Ainsworth by mortgagors incurred before the foreclosure of the trust deed. On September
On September 15, 1947, Gregory and Jones sold to D. H. Lee a one-third undivided interest in an automobile agency business they were operating and which was located upon said described lot, and on that day, by warranty deed, conveyed to Lee a one-third interest in said business and in all the personal property owned by the partnership of Gregory and J ones, and a one-third interest in the lot conveyed by the Ainsworth trust deed and four other lots not included in that trust deed. That deed contains a provision that Lee “* * * shall be liable for one-third (%) of the indebtedness of aforesaid business. Subject to an outstanding indebtedness to Burnham Ainsworth, Bay Springs, Mississippi, as presently existing.” That deed was duly recorded November 25, 1947.
On August 31, 1949, Gregory sold his undivided one-third interest in said automobile business to Willie Jones, and, on that same day, executed a warranty deed to Jones conveying such interest in the business and in the Ainsworth lot. in that state of the title Jones owned a two-thirds and Lee a one-third undivided interest in said business and the lot in question.
About the time Gregory sold to Jones, request was made of Ainsworth that he satisfj^ his trust deed, release Gregory and take a newr trust deed from Jones. Gregory agreed to do that. Gregory had no actual knowledge that Lee then owned one-third of the business and one-third of the lot covered by the Ainsworth trust deed. However, Lee’s deed was on record and was constructive notice to Gregory.
On December 15,1951, Ainsworth and McFarland, trustee, filed the bill in this cause against Lee and Jones, praying the court to ‘ ‘ order a foreclosure of this deed of trust executed by Willie Jones and G. G. Gregory and later a renewal by Willie Jones to Burnham Ainsworth as against the named defendants herein and according to law, and said defendants or any who might claim from them, be estopped from asserting any title or claim to the real estate herein set forth,” and for general relief.
J ones did not answer the bill. Lee answered, admitting the execution and recordation of the foregoing instruments as set out above, but contending, as his main point, that the satisfaction and cancellation by Ainsworth of the trust deed given him by Jones and Gregory, and the release of Gregory from the debt, and acceptance of Jones as his debtor, with Jones’ trust deed securing the same, worked a novation of the original debt, was a waiver of the lien under the first deed of trust, resulting in Jones’ title to the lot under his deed from Gregory and Jones being superior to the claim of Ainsworth under his new trust deed. Lee filed a cross bill asserting this contention. The trial court dismissed the bill.
The new debt arrangement between Ainsworth and J ones was a novation of the old obligation. There are three kinds of novation: (1) where the debtor and creditor remain the same, but a new debt takes the
The chancellor dismissed Ainsworth’s bill “without prejudice to any and all rights of the complainants in and to the deed of trust executed by Willie Jones to Joe A. McFarland, trustee, for the benefit of Burnham Ainsworth. ” The bill here was to foreclose in equity whatever rights Ainsworth had under both the Gregory-Jones trust deed and the trust deed later signed by Jones alone. It asked the court to “order a foreclosure of this deed of trust executed by Willie Jones and G. G. Gregory and later a renewal by Willie Jones to Burnham Ainsworth * * *.” Lee only has a one-third interest in the lot. He could not prevent the foreclosure and sale, even under the Jones trust deed, of the two-thirds interest conveyed to Ainsworth as beneficiary in the Jones trust deed. The court should have proceeded to foreclose in equity the two-thirds interest Ainsworth held as security for his debt rather than dismiss the bill. For that reason and for that purpose the cause should be reversed and remanded.
This proceeding, of course, does not involve and does not affect the personal liability, if any, of Lee for the
The costs on this appeal will be taxed equally between Ainsworth and Lee.
Affirmed in part, reversed in part and remanded.