107 Tenn. 476 | Tenn. | 1901
On July 27, 1886, W. A. Collier and Alice T. Collier, his wife, executed a deed of trust on 203 acres of land, near the city of Memphis, to William M. Smith and John P. Houston, trustees, to secure an indebtedness of $7,513.10 to Henry T. Ellett. That indebtedness was evidenced by the promissory note of Collier and wife, maturing September 30, 1886, and the conveyance was promptly registered.
November 2, 1892, the same grantors executed another deed of trust on the same land to Smith & Guión, trustees, with the view of securing to the Union & Planters’ Bank a large indebtedness, con
Henry T. Ellett died and his widow became the owner of his note and security. She was about to have the first deed of trust foreclosed, when, on June 29, 1894, Collier and wife induced Mrs. Fannie A. Wheeless, a widow, to purchase the debt and lien of Mrs. Ellett, and grant further indulgence. Besides the transfer by Mrs. Ellett of her note and security, Mrs. Wheeless, on the day last mentioned, received from Collier and wife a written instrument reciting the facts of the transaction, acknowledging Mrs. Wheeless as their creditor and as the beneficiary under the first deed of trust, providing that the land ‘ ‘ shall stand as security ’ ’ to her ‘ ‘ to the same extent and effect as originally intended for the said note ’ ’ to Henry T. Ellett, stipulating for one year’s additional indulgence, agreeing to pay reasonable attorney’s fees for the necessary protection or enforcement of her rights, binding Mrs. Collier’s separate estate secondarily, etc.
On -February 21, 1895, John F. McCallum, “in payment of the ($5,500) note indorsed by him,” executed to the bank his individual note for $5,714.15, pledging the note so paid as collateral for the note so executed. At the same time Joseph Haines and Casey Young each took precisely the same course with
On that day the Union and Planters’ Bank, the beneficiary under the second deed of trust, filed the original bill in this cause, to prevent the sale and to foreclose the second deed of trust for its own benefit. The injunction was too late to arrest the sale, but it was in time to restrain the execution of' the deed. By consent, however, the deed was after-wards delivered, subject to the final decree to be made in the cause.
The theory of the bank’s bill is that the first deed of trust was barred and its lien extinguished absolutely by the ten years’ statute of limitations (Acts 1885, Oh. 9), and that, as a consequence, the second deed of trust became operative as a prior charge on the land in favor of the bank as beneficiary. Mrs. Wheeless, by answer, denied the bank’s contention as to the law of the case in toto, and, by cross bill, asserted priority in herself as owner of the Ellett debt and deed of trust, and by virtue of the instrument executed to her by Collier and wife at the time she became such owner.
The time • was opportune, for his indorsers had sued the bank for large amounts of usury asking that they be credited on those debts or some of them, and there may have existed some other claim of equities in his favor. The bank' agreed to satisfy or transfer all of those debts, which with interest to that time aggregated nearly six times as much, for $5,000.
This latter sum, Mr. C. W. Metcalf, a distinguished lawyer and personal friend of W. A. Collier, was ready to furnish for the purpose indicated ; but, as he was unwilling to make the advance to Collier himself, the latter’s son, Thos. B. Collier, a young gentleman then in college was requested to take the matter up in his own name. He agreed to do so, but being without money, Mr. Metcalf furnished him the $5,000 for the bank, and it executed á written transfer of those several debts. This instrument, however, through a misunderstanding on the part of the bank’s attorney, named C. W. Metcalf instead of Thos. B. Collier as transferee, when in fact it was intended by them that the legal title to the notes should be vested in the latter of these gentlemen, and that the former should hold them only as collateral security; but .rather than have the instrument reformed they agreed be
Subsequently they, by appropriate pleadings and orders, became parties to this cause, and it proceeded thenceforth with them as complainants, in the right of the bank and in its room and stead. Mrs. Wheeless, by amended cross bill, attacked the bank’s 'transfer, charging that the transaction was, in reality, a purchase of his own debts by W. A. Collier, and, therefore, a complete satisfaction of them and an extinguishment of the bank’s deed of trust. This charge was denied.
After the bank’s transfer to Metcalf, he, by direction of Thomas B. Collier, surrendered to John P. McCallum and to Joseph Haines, respectively, without payment, their respective individual notes for ■$5,114.15 each, but retained, as supposed living obligations, the two original $5,500 notes which they, as indorsers, had taken up from the bank and deposited with it as security for those individual notes.
Hearing the case finally on all of the pleadings and full proof, the Chancellor adjudged, in effect, that the first, or Ellett, deed of trust was barred and extinguished by the ten years’ statute, invoked by the bank and its successors in interest, and, therefore, that the sale thereunder by the trustees therein, and their deed to Mrs. Wheeless, as purchaser, were void; that the second, or the bank’s,
We will not discuss or formally state the several assignments of error, but will content ourselves with a brief statement of our conclusions on a few controlling questions.
2. The lien of the first, or Ellett deed of trust, was “barred” and “discharged” by the lapse of jiore than ten years between the maturity of the secured note and the sale by the trustees. Acts 1885, Ch. 9, Sec. 1; Shan., 4464; McElwee v. McElwee, 97 Tenn., 649; Runnels v. Jacobs, 100 Tenn., 397. Hence that sale and the deed by the trustees passed no title. It matters not that W. A. Collier and wife may have intended the paper executed by them to Mrs. ~W heless as a renewal of the Ellett deed of trust, and that she may have so understood it, for no language' that could have been employed would have extended the life of that deed of trust, especially as against intermediate lienors, beyond the period of ten years from the maturity of the Ellett note. The statute is plain, positive, and unyielding on this point.
3. That paper, though dependent for a description of the land upon the Ellett deed of trust, was in law effective as a new conveyance, from its date and delivery as to the makers, and from its registration, the day after the commencement of this suit, as to all other persons. Mrs. Wheless, as the owner of the Ellett note, might have foreclosed the Ellett deed of trust by a sale of the land at any
4.That deed of trust, however, has been preserved, as against the conveyance of the same property to Mrs. Wheeless, only to the extent of $5,000 actually paid through Mr. Metcalf for the bank’s debts. Thomas B. Collier’s purchase of those debts under the circumstances mentioned was, as against that conveyance, of which he had full notice, a satisfaction-of the bank’s deed of trust except as to the amount paid, his purchase, as against Mrs. Wheless, being tantamount to a like purchase (with legal title to Mr. Metcalf as security) by his father, who owed the debts, arranged the details, and brought him into the transaction. No one in such relation and with such notice, making such a purchase, under such circumstances, will, in equity, be allowed priority beyond the amount of the outlay actually made, with interest.
5. Mr. Metcalf, who advanced the $5,000 and received the transfer in the manner heretofore recited, is entitled in his own right, or through Thomas B. Collier, to have the bank’s deed of trust foreclosed for his reimbursement, and that is the full extent to which the priority of that instrument has been preserved as against the conveyance to Mrs. Wheeless.
6. As against W. A. Collier, the debtor, who
7. The fee allowed to the attorney of Mrs. Wheeless is justified by the proof.
Modify decree of Court below and enter one here in accord with this opinion.