Summary
In Hook v. Fentress, 62 N.C. 235, Pearson, C. J., says that "A vendor of land who has let the purchaser into possession and retains the legal title as a security for the payment of the purchase money occupies the relation of a mortgagee when the mortgagor is in possession, and has the right to take possession at any time and go into the pernancy of the profits, and may, on notice given, require the tenants to pay the rent to him, to be applied to keep down the interest, and any surplus to the discharge of principal."
Summary of this case from Hinson v. SmithOpinion
(June Term, 1867.)
1. One effect of the doing away with execution by ca. sa. is to originate a jurisdiction in equity to compel the application of legal choses in action to the satisfaction of debts. As preliminary to its exercise in any case the court will require: 1st, That the debt shall be established by a judgment at law, and 2d, That the want of property subject to fi. fa. shall be shown by a return of nulla bona, or by other sufficient proof.
2. Whether in exercising this jurisdiction other creditors will be allowed to come in and make themselves parties, and take a share of the fund, quaere.
3. A vendor of land who retains the title and allows the vendee to go into possession, may at any time take possession, or on notice given may require those in possession to pay the rents to him, to be applied to keep down the interest and, if any surplus, to the discharge of the principal.
4. Where the tenant of one who claimed under a bond for title from A, had, by virtue of a sublease, become entitled to certain rents which he had promised to transfer to the obligee in the bond, in order to be by him applied in discharging the debt still owing to A for the purchase money: Held, that a bill filed after such promise had been made, would not enable A to intercept these rents and appropriate them to a debt owing by the tenant to himself.
BILL filed in 1865, before Fowle, Provisional Judge, under an ordinance of the Convention of that year, and at Spring Term, 1866, transferred to the Court of Equity for WAKE. Judgment pro confesso had previously been taken against the defendants Randall and Bowen.
Haywood, for the complainants.
Moore, for the defendant Fentress.
At Fall Term, 1866, the cause was set for hearing upon the bill and answer of Fentress and the proofs, and transferred to the Supreme Court by consent.
The facts were that the complainants had sold a valuable house and lot in Raleigh to one Robson, a resident of Mississippi, and had given him a bond for title, a considerable part of the purchase money being unpaid; Robson had purchased for the benefit of the wife and family of the defendant Fentress, who was insolvent, and the Fentress family resided in it; also that Robson was willing at the time of his purchase that Mrs. Fentress, if she chose, might be substituted to the (230) advantages of his bargain; in 1865 Fentress leased a portion of the house to Randall and Bowen, the other defendants, and at the time when this bill was filed they owed several hundred dollars for rent; this rent by contract was made payable to Fentress, but he testified that he had always considered himself as acting for Robson in that matter; and it was shown that afterwards, and before the bill had been filed, an authorized agent of Robson's had called upon him and demanded that the rents when paid should be turned over to him to be applied towards the purchase money, and that he had promised that they should be; to the same effect was a correspondence by letter between Robson and Fentress, which also occurred before the bill was filed.
We agree to the proposition assumed by Mr. Haywood, that the effect of the act of the Legislature which takes from creditors the right to have execution by writ of capias ad satisfaciendum, is to originate a jurisdiction in equity by which (233) debtors will be compelled to apply legal choses in action to the discharge of their debts. This jurisdiction rests on the ground that there would "otherwise be a failure of justice." Wherever there is a right there is a remedy, and if a party be "remediless at law," it is the province of the courts of equity to give relief. Two things are necessary to induce the court to take jurisdiction. The fact of indebtedness must be established by a judgment at law; for that is a pure legal question. The fact that the debtor has no property which can be reached by the writ of fieri facias must be established by the return of nulla bona, or, under special circumstances, by some other sufficient proof. (See the authorities cited on the argument.) Whether in the exercise of this jurisdiction the court, on the maxim "equality is equity," will allow other creditors to be made parties, and come in for a distribution of the fund, is a question well worthy of consideration.
We also agree to the proposition assumed by Mr. Moore, that a vendor of land, who has let the purchaser into possession and retains the legal title as a security for the payment of the purchase money, occupies the relation of a mortgagee when the mortgagor is in possession, and has the right to take possession at any time and go into the pernancy of the profits, and may, on notice given, require the tenants to pay the rent to him to be applied to keep down the interest, and any surplus to the discharge of principal. (See the authorities cited on the argument.) Whether there is a distinction in cases of imperfect mortgage; that is, the mortgage of an equitable estate, or a sale by a vendor who has not obtained the legal title, is a question not presented by this case, even supposing that Robson is under obligations to allow Mrs. Fentress to have the property on payment of the purchase money with interest. And upon this we are not at liberty to intimate an opinion; for (234) we put our decision on the ground that Fentress, in renting the property, either acted as the agent of Robson, or, if acting then for himself and intending to put the rents to his own use, that his subsequent letters to Robson and his admissions and assurances to the agent of Robson, before the plaintiffs filed their bill, had the effect of an equitable assignment of the rents and an appropriation of them to the liquidation of the balance of purchase money due by Robson to the plaintiffs; and consequently that they have no right to intercept the fund and apply it to another debt owing by Fentress to them, as is the object of this bill.
PER CURIAM. Bill dismissed with costs.
Cited: Powell v. Howell, 63 N.C. 284; Dunn v. Tillery, 79 N.C. 499; Hinson v. Smith, 118 N.C. 507.