93 S.E. 927 | N.C. | 1917
Plaintiff brought this suit to foreclose a mortgage executed 1 May, 1906, by Maxwell Brothers Lumber Company, on land, timber trees, and other property therein described, to M. D. Lane, for the purpose of securing the payment of sixteen notes, two for $2,537.50 and $1,250, respectively, and each of the other fourteen notes for $2,500, some of them due 1 July, 1907; others, 1 October, 1907, and the remaining ones at different dates thereafter; the whole amount thus secured being $38,787.50. The mortgage was duly registered in Craven County on 15 May, 1906. M. D. Lane assigned to the plaintiff the notes secured by the mortgage for full value, and for the purpose of indemnifying plaintiff as surety or endorser of M. D. Lane on certain notes, also described in the complaint. The plaintiff was compelled to pay some of the notes on which (404) he was surety, or endorser, to the amount of $9,814.32.
Defendant entered upon the land, and has cut and removed large quantities of timber trees thereon, the land having little or no value apart from the timber. On 21 January, 1910, Maxwell Brothers Lumber Company executed to the plaintiff their note for $1,060.83, payable six months after date, with interest from date, and secured the payment of the same by a mortgage on the same property as is described in the first mortgage, except the timber rights on two of the tracts of land. All the mortgages and deeds were promptly and duly recorded. That nothing has been paid on the *435 note for $1,060.83, except the sum of $500, on 19 February, 1914, and the balance thereof has been due and payable for some time; that afterwards the Maxwell Brothers Lumber Company conveyed the lands to M. D. Lane, subject, however, to the mortgage of 21 January, 1910, to the plaintiff, and M. D. Lane then conveyed, or contracted to convey, to the defendant corporation all the standing timber trees on the said land, with the right to cut and remove the same.
Plaintiff alleges that there is now due to him upon said notes and mortgage the sum of $10,275.15, and that if the defendant is permitted to cut the timber, or to continue to cut the same, as it is now doing, it will destroy the same, it being the most valuable part of the security for the payment of his notes, it having already cut 8,000,000 feet, valued at $25,000. The following allegations appear in the complaint:
"1. That notwithstanding this plaintiff's notes and mortgage, held as hereinbefore set out, the defendants have failed and refused to pay any amount whatever thereon to this plaintiff, and threaten to continue to cut and remove the timber from the aforesaid lands and every part thereof.
"2. That said lands are valuable chiefly for the timber thereon, and if the defendants are allowed to continue to cut and remove the timber from said lands this plaintiff's security will be seriously impaired, if not entirely destroyed, and he will be without remedy.
"3. That this plaintiff has notified the defendants of its claim against the aforesaid timber, and the defendants have failed to make any arrangements therefor, but are continuing to cut and remove the timber from the aforesaid lands.
"4. That there is no cleared land of any extent embraced within the boundaries of the lands described in said deed, and no cultivated area thereon."
The motion came on to be heard before the judge at the time and place appointed in the order temporarily restraining the defendants from cutting timber or removing the same from the land, and after argument by counsel, and consideration of the matter, the motion for a continuance of the injunction was refused, and the plaintiff appealed.
after stating the case: It has been fairly well settled that a court of equity will not enjoin an ordinary trespass, such as entering upon land and working turpentine trees, or cutting wood *436
and making staves thereon, unless irreparable injury is threatened — that is, one for which there can be no sufficient recompense in money. It is therefore held that in such cases an averment of the defendant's insolvency is necessary, for if he is not insolvent and the plaintiff can recover an equivalent in money for the loss sustained by the trespass, the damage cannot in any proper sense be called irreparable. Gause v. Perkins,
We do not deem this case as one in tort for trespass upon the land, but as an action in the nature of a bill in equity to foreclose the mortgage described in the complaint, and to protect by injunction the rights of the plaintiff until a foreclosure can be had. There could not be an action of trespass, because the plaintiff has neither the actual nor constructive possession of the land. Drake v. Howell,
There is a perfect analogy between the case of the mortgagee holding notes secured by the mortgage, or some of them, in his relation to the mortgagor in possession committing waste upon the land, or the timber standing thereon, and that of the (407) plaintiff towards M. D. Lane, mortgagee, and the defendant, his assignee, the latter being on the land and alleged to be wasting *438 the timber. So that, the authorities cited apply to the facts of our case.
There can be no doubt, therefore, that the court has the power to protect the plaintiff's security against serious impairment. The defendant, when it acquired title to the timber from M. D. Lane, the original mortgagee, took it charged with the plaintiff's lien upon the timber, or his equity to have satisfaction of his debt out of it. It is a trustee to this extent for the plaintiff, and is guilty of a breach of his trust in committing waste by cutting timber and thus destroying the property it holds in trust, or impairing its value as a security.
This is not an action of trespass, wherein formerly it was required, and even now in some cases it is necessary, that plaintiff should allege and show insolvency of the defendant, or irreparable damage, in order to obtain an injunction against injury to land or timber. Thompson v. Williams,
But the cases of Lumber Co. v. Wallace,
It cannot be successfully denied that if the plaintiff has the equity which he alleges in his complaint, he is entitled to have it *440 enforced, and if the defendant continues to do what he says he (409) will do unless restrained by the court, the result will surely be that plaintiff's security for the payment of his notes will be gravely menaced, if not totally destroyed.
There was a contention of the defendant which should perhaps be noticed before closing this opinion, which was that when M. D. Lane purchased the equity of redemption from the mortgagor there was a merger of the legal and equitable title in him, but we do not see how this can be, or at least we may say there was not an entire merger, as the notes secured by the mortgage had been acquired by the plaintiff, and the mortgagee and mortgagor could not then defeat his equity or destroy his security under the mortgage. There will be a merger only to the extent that the mortgage has acquired the equity, and his purchase of the equity of redemption will not constitute a complete merger unless he holds all of the debts secured by the mortgage. If any of the outstanding debts are held by others, their rights are preserved and remain intact, and the merger takes place, if at all, only subject to those rights or to the satisfaction of the unpaid debts. "Under the rules of law, the ordinary consequences of the purchase of acquisition of the equity of redemption in mortgaged premises by the mortgagee is to merge the two estates, vest the mortgagee with the complete title, and put an end to his rights or title under the mortgage. But to this end, it is necessary that, holding the mortgage already, he should acquire nothing less than the complete legal title in fee, and that the two estates or interests should unite in the same person in the same right. Further, this rule is not invariably applied in equity, but may be disregarded and the fusion of the two estates prevented when, in the particular case, this is required by justice, the well-established principles of equity, or the intention of the parties, the mortgagee having an election in equity to prevent a merger and keep the mortgage alive." 27 Cyc. 1377(2). And again, at p. 1379, it is said: "If the holder of one of several bonds secured by the mortgage acquired the whole property, his bond is satisfied, although the mortgage will continue as security for theholders of the other bonds," citing Rotheschild v. Bay City Lumber Co.,
There was error in the ruling of the learned judge. Let this case be remanded to the court below, with instructions to enter a decree in substantial agreement with the suggested in this opinion and founded on the two cases of Lewis v. Lumber Co., supra and Lumber Co. v. Wallace, supra; and, further, to make the mortgagor, Maxwell Brothers Lumber Company, and the mortgagee, M. D. Lane, parties, either plaintiffs or defendants, in the way provided by the statute, as it appears that they have, or may have, an interest in the result of the action.
It is so ordered.
Error.
Cited: Hurwitz v. Sand Co.,