Irvine v. Shrum

| Tenn. | Sep 23, 1896

Wilkes, J.

E. H. Irvine and wife, Allean Irvine, executed a deed of trust upon certain real estate to one Gifford, to secure a debt due from the husband to defendant, Shrum. The wife’s name was signed to the deed, but it did not appear in the body, or conveying part of the instrument. The trust deed was foreclosed, and Shrum became the purchaser. Thereupon the wife filed her bill in chancery, enjoining him from taking possession of the property and claiming homestead therein. While this suit was pending, Shrum learned that there was a debt for purchase money upon the land and a deed of trust to secure the same. Shrum thereupon bought the purchase money notes, and. caused the mortgage to secure them to be foreclosed and bought under the foreclosure sale, and took deed from Montague, the trustee. He thereupon, by leave of the Court, filed a cross bill, alleging the purchases under both trust deeds, and asked that title be decreed to him free of all homestead or rights in Irvine and wife, or either of them. This was demurred to on the ground that Montague’s right to enforce the trust for the purchase money was barred by the statute of limitation, inasmuch as his notes were barred; that the legal and equitable title to the property had become merged in Shrum, and the purchase money debt had been satisfied and the lien discharged thereby. This demurrer was overruled, and answer was made and proof taken, and decree was rendered fixing the right of Shrum to the land superior to the right of homestead and awarding a writ of possession, and from this decree the complainant appealed. The case has been heard by the Court of Chancery Appeals, and the decree of the Chancellor affirmed, and complainant has appealed to this Court and assigned errors, raising the same question already passed upon. We see no error in the decree of the Chancellor and Court of Chancery Appeals. The right of Montague to sell under his deed of trust was not barred by the statute of limitation, even though, as to the notes secured thereby, the statute may have run so as to bar the recovery of any personal judgment on them. The trust and lien of the mortgage is an express and not merely an implied one. Fisher v. Fisher, 9 Bax., 71; Lincoln v. Purcell, 2 Head, 143; Gudger v. Barnes, 4 Heis., 570; White v. Blakemore, 8 Lea, 62; Smith v. Goodlett, 8 Pickle, 230; Harris v. Vaughn, 2 Tenn. Chan., 483.

Neither was there a merger of the legal and equitable titles so as to extinguish the debt and cancel the lien. When Shrum bought under the Grifford trust he became the owner of the reversion-ary interest in the land — that is, the owner of the land subject to the homestead interest. By purchasing the mortgage notes he did not acquire any equitable title or interest in the land. Montague, under his mortgage, held the legal title to the land superior to the homestead right, but for the purpose of securing the purchase money notes ohly. Shrum did not become vested with this legal title or right, but simply held the debt, which was an incumbrance on the land, and had only the right to call upon the trustee, Montague, to sell the land for the extinguishment of such lien. This he did, bought at the sale, and became thus vested with all the right which Montague could confer under the power contained in his deed of trust. It is true that when an equitable estate vests in the same person in whom is the legal title to the same premises, the usual rule is that the equitable merges into the legal estate. But, in order to merge, the two estates must be co-extensive as to the same property, and the doctrine is not a favorite with the Courts and will not be applied against the intention and interest of the holder of the legal title. Moore v. Luce, 72 Am. Dec., 629; 15 Am. & Eng. Enc. L., 313 et seq.; 2 Pomeroy’s Eq. Jur., Secs. 788-791; Jones on Mortgages, 848; United States Insurance Co. v. Murphy, 111 U. S., 744.

Here the effort is to merge the greater estate held by Montague into the more limited or less estate in remainder or reversion obtained under the Clifford trust and conveyance. We can see no valid reason why Shrum should not buy under the Montague foreclosure and obtain all the rights which he could under that trust, in order to protect the title he already had or to enlarge his estate in the premises, and this he might do pending the action to determine his right under the Gifford trust, and without leave of the Court in which that action was pending. We have been cited to no authority and can see no reason why Shrum should not in good faith justify the title he already had or buy in an additional assurance, or independent interest.

It is finally said that if any right existed to foreclose the mortgage under the trust, it could only be exercised by making the sale under the orders of the Chancery Court and not by mere motion of the trustee out of Court. It is the purpose of such deeds of trust to furnish an easy means of foreclosure without the aid of the Court. It is true the party foreclosing is not precluded from going into Court, if there should arise or exist any complication which the aid of the Court is required to remove; but unless there is some reason therefor, the proper practice is to sell without incurring the cost of a Court proceeding. Clark v. Jones, 9 Pickle, 642.

We can see no error in the decree of the Chancellor and Court of Chancery Appeals, and they are affirmed with costs.