54 S.W.2d 716 | Tenn. | 1932
The petition for condemnation was filed in the name of the highway commissioner on January 16, 1928, averring that Joe Gaut was the owner of the land sought to be appropriated. As a matter of fact the land belonged to his mother, Mrs. Elizabeth J. Gaut, his sisters and himself. On March 23, 1928, Joe Gaut and certain of his sisters conveyed their interest in the land to his mother and the other sisters. Later an intervening petition was filed in the condemnation suit and the true owners of the land made parties thereto.
On April 14, 1928, pending this condemnation suit and before an award of damages was made, the owners of the tract mortgaged it to secure a loan of $23,000 by the *367 complainant bank. This mortgage was recorded on May 3, 1928.
The award for the right-of-way taken was made some months after the execution and registration of this trust deed and, as stated above, the sum awarded as damages was distributed among the owners of the land by the county, except for a small amount turned over by agreement of the parties to the complainant bank to meet a payment on the mortgage indebtedness then due.
It may be conceded that Monroe County had notice of the mortgage executed by the owners of the land over which the right-of-way was condemned prior to the payment of the damages awarded to such owners. Nevertheless, under the authority ofCounty of Obion v. Edwards,
It is urged, however, that the application for this loan was made to the complainant bank in November, 1927, before the condemnation suit and the contemporaneous taking of the land. It is said that this application for the loan contained an agreement to execute a *368 mortgage upon the land to secure said loan, that the agreement was in effect an equitable mortgage itself, and that the mortgagee was in equity the owner of the land at the time of the taking and entitled to the damages.
This court has discussed equitable mortgages and equitable liens in several recent cases, Hunt v. Curry,
It is next said on behalf of complainant bank that the mortgage executed by the landowners contains language equivalent to an express assignment of the damages awarded to them. The paragraph relied on is this:
"The parties of the first part agree that any and all moneys due and payable to them or any of them in settlement of any and all damages or rents, accruing by reason of any and all leases now on or which may be placed on the above real estate during the term of this deed of trust shall, at the option of the party of the second part, belong to and be paid to party of the second *369 part, and if so paid, applied to the reduction of the principal or interest of the loan hereby secured."
It seems to us that to read the word damages in the paragraph quoted as referring to damages allowed for a right-of-way taken over the land is a strained and unwarranted construction.
The punctuation and the entire sense of the paragraph show that the damages as well as the rents mentioned are damages "accruing by reason of any and all leases, etc., etc." This mortgage was executed on a printed form and we assume that the expropriation of lands on which complainant bank makes loans is a thing occurring so seldom that its form instruments do not cover such contingency. We are satisfied the mortgage before us did not and was not intended to operate as an assignment of damages to lands so taken. The condemnation suit was a matter of record and the complainant bank could have readily secured its right to this award by an assignment containing apt words, if it had been so disposed.
It is again insisted by the complainant bank that the warranty of title contained in the mortgage was effective to pass the landowners' right to this award of damages subsequently paid. This proposition is not tenable. The warranty in the deed would have passed an after-acquired title of the landowners. As shown, however, in County of Obion v. Edwards, supra, and the cases therein reviewed, the right to damages for land condemned is a personal right of the owner at the time the land was taken. InCounty of Obion v. Edwards, supra, this court quotes and follows Roberts v. Northern Pacific R. Co.,
Some other points made by the complainant bank do not require discussion and, for the reasons stated, the decree of the chancellor is affirmed. *371