Wake County NcArchives Court.....Henderson, V. Stewart 1825
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Deb Haines http://www.genrecords.net/emailregistry/vols/00003.html#0000719 February 8, 2009, 8:17 pm

Source: Nc Court Reports, Vol 11, 1826
Written: 1825

December Term 1825

HENDERSON, et al. v. STEWART et. al. 

From Wake.

The purchase money of land unpaid, is a lien on the land where no conveyance 
has been made of it, unless there is evidence that the land was not looked to, 
or such lien has been abandoned. When, therefore, A purchased real estate, and 
a conveyance was to be made when the purchase money was paid, the vendor has a 
lien on the land for the purchase money; and A having afterwards mortgaged the 
premises to B, and B having paid the purchase money, he may tact the money 
paid to the sum due on the mortgage; for the payment is for A's benefit, it 
discharges the lien, and enables him to demand the legal title.

Under ordinary circumstances, the purchaser from a mortgagee stands in his 
place, and must submit to a redemption on the same terms; for though he may 
purchase for a large sum, and though he has the legal title, yet he has not 
equal equity with the mortgagor, for he buys with notice; his title being on 
its face for the security of money, should put him on inquiry; and any thing 
which puts one on inquiry is sufficient notice.

There are cases, however, where a different rule prevails, as where the 
purchaser advances the money and takes a conveyance for the benefit of the 
mortgagor or his heirs, and not for his own benefit. But, as in this case, the 
defendant took an absolute conveyance to himself, and in his answer denied 
complainant's right to redeem, he must be viewed as a mere assignee of the 
mortgagee, and must submit to a redemption on the same terms, and is not 
entitled to the sum which he has actually advanced.

The bill stated, that one Peter Casso, being seized in fee simple of a lot of 
ground in the city of Raleigh, by deed dated December 23, 1800, mortgaged the 
same to one Moore, a merchant of Petersburg, to secure the payment of $2,814 
12; that Casso made large payments to Moore at different periods during his 
life, and afterwards to his executor; that Moore died in the year —, after 
devising the lot aforesaid to his son and heir at law, Archibald Moore, and 
appointed one Bowden his executor; that Peter Casso afterwards died in 1811, 
leaving a wife and several children, among whom was Mary, the wife of Alex(257)
ander Lucas; that administration on the estate of Casso was granted to John 
Hodges, as being the highest creditor of Casso, and the personal assets being 
insufficient to satisfy the demand of Hodges, he proceeded regularly against 
the real estate of Casso, and at August term, 1816 of Wake County Court, 
obtained a decree against the heirs of Casso, to be satisfied out of the real 
estate, descended, for 134l. 7s. 6d. a fi. fa. regularly issued thereon to the 
sheriff of Wake, who levied on and sold the lot aforesaid to Alexander Lucas 
for $625, whereby the absolute right of and to the inheritance and equity of 
redemption in said lot became vested in Lucas.

The bill further stated, that Lucas was indebted to the complainants in the 
sum of $5,000 by bond; and to secure this debt, he convoyed the lot before 
mentioned, in trust, to satisfy the same; and the trustees, in pursuance of 
their authority, sold the same, when the complainants became the purchasers, 
and took a deed in fee simple from the trustees.

The bill further stated, that the sheriff of Wake had neglected to make a deed 
to Lucas at the time of his purchase under the execution of Hodges, and that 
Alexander Lucas died without ever obtaining any conveyance from the sheriff; 
that Moore, in his lifetime, and Bowden his executor since his death, had 
received from the rents and profits of said lot, large sums, which not only 
kept down the interest, but nearly extinguished the principal.

That in the year 1814, the defendant Stewart, pretending to have purchased the 
interest of Moore for a valuable consideration, and to be assignee of the 
same; or pretending to be agent for Bowden, the executor, or Archibald Moore 
the heir at law, entered upon and hath ever since continued to occupy the 
premises, receiving therefrom large rents and profits, whereby the whole debt 
has been extinguished. That the complainants had often applied to the sheriff 
for a deed, and to Bowden, Archibald Moore, and Stewart, the defendant, in a 
friendly manner, (258) exhibiting to them their title, and requesting them to 
come to an account and settlement of what remained due on the mortgage, which 
requests were denied on divers pretences; and complainants now offered in 
their bill to pay whatever might be due on the mortgage, and prayed to be 
permitted to redeem.

The defendant Stewart, submitted whether, under the facts disclosed by 
complainants, they could be permitted to redeem; and stated in his answer, 
that Casso in 1800 became indebted to Moore in the sum before mentioned, and 
executed the mortgage deed as let forth in the bill; that Moore was under the 
impression and belief that there were liens on the lot prior to his, 
particularly one held by Hamilton, the British agent, and he accordingly 
purchased Hamilton's claim for $1,100; that Moore died as stated in the bill, 
having devised the lot to Archibald Moore, his son; and that Casso continued 
in possession of the premises until 1808, when he left the state, his wife and 
family still remaining in possession; that in 1811 Casso died, and his family 
continued in the occupation of the lot until 1814, when Archibald Moore came 
to Raleigh to adjust the claim against Casso; that Mrs. Casso, the widow, 
applied to the Hon. H. Potter, as her friend, to liquidate the account, and 
accordingly he and Archibald Moore did settle the account, and ascertained the 
balance up to June, 1814, to be $4,178, due Moore; that Moore, was anxious to 
close the business, but expressed his desire to consult the convenience of 
Mrs. Casso; that Mrs. Casso, whose daughter Stewart had married, seemed much 
distressed, and intreated the defendant to advance the sum found to be due on 
the mortgage, that her friends joined in her solicitations, but this defendant 
declared his inability to raise so large a sum, when Archibald Moore, 
influenced by feelings of kindness towards Mrs. Casso, agreed to release a 
part of his claim, and consented to receive $3,500, which the defendant 
Stewart paid him, and Moore then executed a deed to Mrs. Casso, and her heirs 
for the lot that not long (259) after Mrs. Casso conveyed the lot to Stewart, 
but that she remained in possession as the tenant of Stewart until 1817, with 
the exception of a store-house which Stewart placed on the lot in 1814, the 
actual possession of which, by himself or his tenants, Stewart had had for 
more than seven years; that Lucas, immediately after Mrs. Casso's death, took 
possession of the dwelling-house, and kept, it until he died. Defendant 
admitted the sale under the execution of Hodges, and the purchase by Lucas, 
but averred that the purchase was avowedly made, not for the benefit of Lucas 
only, but of all the heirs of Casso. Defendant admitted the purchase by 
complainants at the sale under the deed of trust, and affirmed that 
complainants had then full knowledge of the monies advanced by this defendant; 
that the money advanced by this defendant in discharging incumbrances, and in 
necessary repairs on the lot, amounted to $9,469:44; that he had received for 
rents and profits $1,981:31.

Defendant farther answering said, that complainants had applied to him for a 
settlement, that he gladly assented thereto, and offered to relinquish all 
claim upon receiving his money advanced with interest thereon; that T. P. 
Devereux and J. F. Taylor, esquires, were selected to settle the accounts, and 
Mr. Taylor, after the settlement, reported the balance due this defendant to 
be $6,889:19; that the complainants admitted it to be correct, and promised to 
secure the payment thereof to this defendant by a promissory note; that 
complainants requested this defendant to make a draft for a deed of 
conveyance, which he did; but on the day appointed for the execution of the 
deed and receiving the note, the complainant Henderson informed the defendant 
that the matter should be settled by a Court of Equity, declining closing the 
business, and filed the present bill.

At a former term it was referred to the clerk and master to take an account of 
the monies due on the mort(260)gage, of monies due the defendant Stewart for 
advances made to relieve the mortgage, and for improvements of a permanent and 
substantial nature put on the mortgaged premises, and generally of all matters 
of accounts involved in the cause.

The clerk and master, among other matters, reported, that Moore paid to Thomas 
Hamilton & Co. $1,080:35, on the 4th of February, 1802, in the purchase of a 
prior claim with which the lot was incumbered; and he charged the mortgaged 
premises with this sum and interest, and credited Stewart by the same amount.

Farther he reported, that the mortgaged premises were bound for the interest 
on the sum due from Casso to Moore from the 23d of December, 1803, the time 
fixed in the mortgage for the payment of the money, though the mortgage deed 
was executed the 23d of December, 1800. He reported also the value of the 
improvements made by Stewart at $2,500.

To the report exceptions were filed, for that the money paid to Hamilton c& 
Co. should not be taken into account, and could not be tacked; and also for 
that the improvements put on the mortgaged premises was valued at more than 
they were worth.

From the testimony in the cause it appeared that Casso had contracted for the 
purchase of the lot from one Alford and gave his bond for the purchase money, 
but received no title from Alford; he afterwards mortgaged the lot to Moore 
and Hamilton became assignee of the bond given to Alford.

The cause was argued upon the exceptions, by Badger for complainants, and 
Gaston, contra; when Henderson, Judge, delivered his opinion as follows:

Without deciding on the right of the mortgagee to tack to the mortgage money 
other demands of a personal nature which he may have against the mortgagor, 
and if he can as against the mortgagor, whether such right is ex(261)tended 
against an assignee for value, of the equity of redemption, and whether a 
purchaser of the equity of redemption, at a sheriff's sale, is such an 
assignee, I am very clearly of opinion that the mortgagor Moore has, in this 
case, the right of tacking the money paid to the Hamiltons; because I think it 
was an incumbrance, and a lien on the land, and which prudence dictated to him 
to remove to give efficacy to the mortgage.

I give no opinion whether the purchase money after title is made forms such 
lien; but I think it clearly does where title is not made, unless it appears 
that such lien was not relied on or abandoned; as if by the agreement title 
was to be made at a period before the purchase money became due. In this case 
it appears from the evidence that Casso, the mortgager, had contracted with 
Alford for the purchase of the lot, which he afterwards mortgaged to Moore; 
that he gave his bonds for the purchase money, with John G. Blount as 
security, but did not receive title to the land; that these bonds were 
transferred by Alford to Hamiltons. Casso could not compel Alford to make 
title until these bonds were paid off. Moore, therefore, by paying off these 
bonds, destroyed this equitable lien and enabled Casso to call for the legal 
title. It was done for Casso's benefit, it thereby enabled Casso to fulfill 
his warranty to Moore. This exception must therefore be overruled.

I think the clerk erred in not allowing interest from the date of the deed, 
notwithstanding the deed calls for only the net sum at the end of three years, 
for the parties treated the contract as a conditional sale, and the rents were 
to come in lieu of interest; but the parties in 1814, and this Court now, 
considers it only as a security for money. Moore should, therefore, have 
interest on his money then due.

Although, under ordinary circumstances, the assignee of the mortgagee, should 
stand in his place, and must submit to a redemption upon the same terms; and 
(262) though, in general, it be true that it is no defence for him to say, 
that the payments or other deductions claimed by the mortgagor do not appear 
upon the papers, because it is enough that it appears that it was redeemable, 
and it was his own act to purchase, and he might have informed himself, for 
the assignment only substitutes him to the mortgagee; yet there are cases 
where the sum really paid by the assignee shall be paid before a redemption 
shall be allowed, even when the mortgagor has been entirely passive; when he 
has lent his aid to swell the amount, there is no doubt that such will be the 
case. Such cases are when the mortgagor is an infant, or perhaps a feme 
covert, and is about to be turned out of possession, or to suffer injury, and 
one as a friend, and in order to preserve the mortgagor's rights and save him 
from injury, bona fide, advances money; and in this case, but from the 
assignee's taking an absolute deed to himself, and in his answer denying the 
right of the heirs to redeem, I think this would have been such a case; the 
more especially as he paid several hundred dollars less than the respectable 
gentleman who drew the mortgage deed reported to be due, after having examined 
the case as the friend of, and at the request of the widow; but his taking an 
absolute deed and denying the right of redemption, shows too strongly that he 
was not acting on the part of or in behalf of the heirs of the mortgagor, but 
for his own benefit; he must therefore stand upon the rights of the mortgagee. 
I should have mentioned above, in addition to the circumstances there stated, 
that Casso had left his wife and children without affording them means of 
redemption, or any other place of residence, and I regret very much that I am 
compelled to view the assignee as acting for his own benefit, and not for that 
of the heirs; but I am not satisfied how the report of the master differs so 
much from the gentleman who settled the account in 1814. Justice requires, I 
think, that we should be informed, if possible, of the items of that 
settlement; I think the case should be referred to the master to ascertain 
them. (263) I think that the master erred in fixing the value of the 
improvements; the evidence warrants no farther than $1,800 at most. If the 
master went to the grounds that the improvements yield annually such a sum as, 
according to common calculations, requires an expenditure of $2,500 to be 
made, he overlooks the ground rent, which belongs to the mortgagor. As to the 
assignee standing (in ordinary cases) in the place of the mortgagee, I think 
that the rule is as laid down by Lord Rosslyn, and approved of by Lord Eldon, 
he can claim no greater rights; and that the rule laid down by Lord Kenyan is 
fallacious, for although he has the law on his side by obtaining the legal 
title from the mortgagee, he had not equal equity; he is not a purchaser 
without notice; for his title being for the security of money, he is thereby 
put upon inquiry as to the sum due; and that which puts a person on inquiry is 
sufficient notice.

There is another and very important point, which I wish to have brought before 
the Court; it is alleged in the answer and supported by proofs; and that is, 
whether Lucas did not become, upon his purchase, a trustee for the heirs of 
Casso? I wish that question to be reserved and spoken to.

The other Judges concurred in the opinion of Judge Henderson, and it was 
decreed that the lot be sold by the master, reserving the cause for farther 
consideration of the points on which his honor Judge Henderson expressed a 
wish for farther examination.

Cited, Patten v. Mining Co., 71 N. C., 563.

Additional Comments:
North Carolina Reports, Volume 11
Cases Argued and Determined in the SUPREME COURT of NORTH CAROLINA.
For December Term 1825 and June Term 1826 
by Francis L Hawks (Vol. IV)
Annotated by Walter Clark
Richmond: James E Goode Printing Company, Printers
1897

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