79 Tenn. 391 | Tenn. | 1883
delivered the opinion of the court.
On the 1st of January, 1876, Fowlkes, his wife not joining in the conveyance, made a deed conveying two tracts of land in Dyer county, specifically describing the separate tracts, to S. K. Lntta, trustee, to secure the payment of . debts due A. L. & J. C. Finá-banles, Peter E. Wilson, Parr, Nolen & Co., E. K,. Vernon and H. Clark. This deed was to run until the 1st ,oi January, 1877, when, if the debts were not paid, the property was to be sold, and, after expenses of the trust, the proceeds to -be applied pro rata to discharge the specified debts. This deed was duly acknowledged and noted for registration on 4th of January, 1876. On this day another deed was made by Fowlkes and wife, conveying the same tract of land to Latia, as trustee, together with several horses and other stock, to secure the same debt of $ 1,510 due to A. L. & J. C. Fumbanks, that had been embraced in the former deed of trust of the 1st of January. This second deed of trust was noted for registration a short time after the first. Afterwards, in October, 1879, neither of the other deeds having been foreclosed, Fowlkes conveyed several growing crops of corn and cotton directly to A. L. & J. C. Fum-banlts, to secure the payment of this debt, authorizing the trustees to sell the same publicly or ship, as they might deem best, and apply the proceeds to the payment of the debts. These conveyances are known as exhibits A, C, and -D.
The matter standing thus, in January 1880, S. K..
The main theory of this bill is, that A. L. & J. C. Fumbanks, by taking the later securities for their debt, were obtaining in some way an unfair and un-conscientious advantage and preference over the other parties secured with them by the first, deed, and that this ought not to be permitted by a court of equity. What this advantage is, so far as the land in the second deed of trust is concerned, it would be difficult to see in any view that may be taken of it. It was a conveyance made and registered after the first, therefore subordinate to it, as to all the rights conveyed under the first deed, and could in no way override the previous rights acquired. We know of no principle of law or sound justice in such a case that forbids a creditor, when he has obtained one security for his debt, if he deems it inadequate, obtaining additional security that shall make it safe. The fact
The real equity, however, made by the facts stated in the bill, and asserted as secondary ground of relief, though not with strict accuracy, is, that complainants have but the one security to which they can resort for satisfaction of their debts, while defendants, having an interest in that' also, yet have obtained and hold two others, and should be compelled to resort to these first, before going on the fund in which the complainants have their sole rights, and then come on the common fund only to the extent of the balance of their debt unsatisfied, after exhaustion of the other and individual securities taken and held by them.
The question is, can this equity be sustained on the facts stated ?
The doctrine on this subject may be thus stated: “Where parties, whose legal rights being confined to one fund, would fail to obtain satisfaction of their just claim if left to the course of law, equity interferes in order to afford complete justice by means of what is called marshaling of assets, which is such an arrangement of the different funds, under administration, as that they -may as far as possible, without injustice, be applied in satisfaction of the various claims, notwithstanding certain parties have a right to priority of satisfaction out of some one or more of such funds: Wait’s Actions and Def., vol. 3, p. 174. As if A has a mortgage upon two different pieces of property,
It is true this equity is cautiously administered, so as not to trench injuriously upon the contracts of parties or do wrong to the creditor. But when thus-qualified, it is one of which no one can complain. In fa'ct it is but little more than the principle of requiring a creditor, who has a debt entitled to share-in a fund where others have a like interest with him
¥e therefore hold, that complainants have the right to have the personalty conveyed in the subsequent, deeds of trust sold, the 'deeds enforced, and the proceeds applied upon the debt of defendants ns a credit, before they can go on the common fund under the first-deed of trust. The sale' of land under the first deed of trust, however, need not be delayed, if it shall be seen that it will take all the property in all the deeds to pay the debts secured, as the purpose is simply to have the proceeds of the property conveyed under the second deed of trust appropriated to respondents’ debts, before appropriation of the fund arising from a sale of the land among the common creditors secured bv me first deed, so that A. L. & J. C. Fumbanks
In administering the equities arising under these trusts, it is the duty of the court, so to decree as shall best serve the rights of all the parties, the debtor as well as the creditor. We think, with that view, the court should, in making the sale of the land conveyed, sell the separate tracts, selling first the tract on which Fowlkes and family do not reside, and then, if necessary, the other tract, or so much as may be necessary to pay balance found due the creditors. In selling this last or residence tract, the court may, if desired by Fowlkes and wife, first lay off the 'homestead, and then the tract may be offered with the homestea'd reserved, - and if this with remainder, after homestead expires, will pay balance of debts secured by first deed, after the other securities have been applied, to A. L. & J. C. Fumbanks’ debt, then the homestead shall be preserved; but if not, and the entire interest will be necessary to pay the debts charged, then the tract will be sold not subject to homestead,, or including the homestead right, as extinguished for reasons hereinafter given.
As to the effect of the second conveyance, by husband and wife, in trust to secure the debt of respondents, we need but say, that under the case of Crook v. Lunsford, 2 Lea, 238, the conveyance by an absolute deed and surrender of possession, by husband and
The result is the chancellor’s decree, dismissing complainants’ bill, is reversed; the costs of this court to be paúl by complainants, the costs below as adjudged by the chancellor.
The case will be remanded to be proceeded in under this opinion.