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Wilkinson v. Bank of N.O

Supreme Court of Mississippi, Division B
Jan 8, 1934
150 So. 218 (Miss. 1934)


No. 30559.

October 16, 1933. Suggestion of Error Overruled January 8, 1934.


Statute requiring advertisement of foreclosure sale to name mortgagor whose property is advertised is in derogation of common law and must be strictly pursued (Code 1930, section 2167).


Advertisement of foreclosure sale, which failed to name mortgagor in possession who was the last vendee through original mortgagor, rendered sale void, notwithstanding advertisement named original mortgagor (Code 1930, section 2167).

ON SUGGESTION OF ERROR. (Division B. Jan. 8, 1934.) [151 So. 761. No. 30559.]


Persons foreclosing mortgages by sales should carefully follow conditions in trust deed and pertinent statutes (Code 1930, section 2167).

2. MORTGAGES. " Mortgagor" within statute requiring advertisement of foreclosure sale to name mortgagor includes remote grantee who assumed mortgage debt with mortgagee's consent ( Code 1930, section 2167).

Code 1930, section 2167, provides, in part, that foreclosure sale of mortgaged lands shall be advertised, and notice thereof posted, and such notice and advertisement shall disclose the name of the mortgagor or mortgagors whose property is advertised for sale.


Error, if any, of attorneys in not naming subsequent grantees who assumed mortgage, in advertisement of foreclosure sale, held not within maxim that common error sometimes passes current as law.

APPEAL from Chancery Court of Chickasaw County.

Thos. H. Haman, of Houston, for appellant, W.A. Wilkinson.

On the acceptance of J.L. Ward as a member of the Houston Farm Loan Association, coincident with the transfer of stock in the association from Wilkinson, the original borrower, to Ward, on the assumption of the obligation by Ward, Wilkinson was released by operation of the Federal law from any liability on account of the loan.

Act of Congress of July 17, 1916, chap. 245, secs. 7, 8, 9, 11, 12, 14; Title 12, secs. 270, 733, 741, 761, 771, 772 and 791, U.S.C.A.

There was no agreement by appellant when he sold to Ward and was let out of the association to remain liable, as agreed when Ward sold to Peden. There was no reservation by the association or appellee when appellant was let out and Ward accepted in his place, as to any liability against Wilkinson. The acceptance of Peden in place of Ward was on a different agreement.

Federal law covers agreements entered into under this act.

Scott v. Federal Land Bank of Louisville, 175 N.E. 16.

The release of the principal debtor as such, even though he stipulates that he will remain liable secondarily, releases the surety of such principal debtor, if done without the consent of the surety. Anything done by the assured which would operate to change the obligation of the surety without the consent of the surety releases the surety. An extension of time on the debt, the addition of a surety, the release of a co-surety or of the principal, without the consent of the surety releases him, and likewise the additions of burdens to the suretyship or the lessening of the security.

Jones v. Carpenter, 106 So. 127, 90 Fla. 407; Tennessee Valley Bank v. Sewell, 107 So. 834, 214 Ala. 362; Brownson v. Hannah, 11 So. 731, 51 A.L.R. 976; Houck v. Graham, 106 Ind. 195, 55 Am. Rep. 727; Hall v. McHenry, 19 Ia. 521, 87 Am. Dec. 451; Nelson v. Brown, 62 Am. St. Rep. 755; Abell v. Coons, 68 Am. Dec. 229; Klapworth v. Dressler, 78 Am. Dec. 69; Calvo v. Davies, 29 Am. Rep. 130; George v. Andrews, 45 Am. Rep. 706; 21 R.C.L. 1062, 1063; 21 R.C.L. 1072; 27 Cyc. 1351, 1352; Interstate Land Investment Co. v. Logan, 72 So. 36, 196 Ala. 196; Gilliam v. McLemore, 106 So. 99, 141 Miss. 253; Smith v. Childress, 119 Miss. 20, 80 So. 346.

Whether Wilkinson, who had long before sold and conveyed the property to Ward, who had sold and conveyed same to Peden, could be "the mortgagor whose property is advertised" within the meaning of the statute, is of some doubt, especially in this case where by written instrument the mortgage had accepted first Ward and later Peden as the borrower and the owner of the land and the shares of Wilkinson, the original mortgagor.

Section 2431, H, chap. 180; Section 2167, Code 1930.

The statute does not merely require that the name of the mortgagor be disclosed, but the name of the mortgagor whose property is being advertised, i.e., the mortgagor owning the property.

This court has held that the requirements of this statute are strictly construed against the mortgagee, and that strict compliance with the statute is necessary for a valid sale and the passing of title thereby.

The statute is mandatory and invalidates a sale not complying with the provisions of the statute.

Fauntleroy v. Mardis, 123 Miss. 353, 85 So. 96; Moris v. Lindsey, 124 Miss. 742, 87 So. 12; Lake v. Castleman, 116 Miss. 175, 76 So. 877; Wilczinski v. Watson, 110 Miss. 86, 69 So. 1009.

The Federal statute of July 17, 1916, and March 4, 1923, section 921 of Title 12 U.S.C.A. requires that if there shall be default under the terms of any indorsed first mortgage held by a Federal Land Bank, the National Farm Loan Association through which said mortgage was received by said Federal Land Bank, shall be notified of said default, providing that said association may then be required to make good the default. There is no proof that such notice was given to the Houston National Farm Loan Association through which the mortgage was received.

Federal Act, secs. 720 and 761, U.S.C.A.

J.H. Ford, of Houston, for appellant, J.L. Ward.

The powers granted under the Federal Farm Loan Act will not be extended by the courts beyond the provisions of the act itself.

Wheeler v. Greene, 280 U.S. 49, 52, 74 L.Ed. 160.

When the Federal Land Bank permits the purchaser from the original borrower or his vendee to assume the mortgage and the stock interests of such borrower, it necessarily releases the original borrower or his vendee so permitted to sell said land, from all liability for such loan.

12 U.S.C.A., sec. 781, par. 2, sec. 791, par. 3.

Herbert M. Fant, of New Orleans, Louisiana, for appellee.

As between the grantor of mortgaged premises and a grantee who assumes the mortgage, personal liability for the mortgage debt is transferred from the former to the latter. But this is not so as to the mortgagee; the assumption of the mortgage does not deprive him of any rights or remedies he possessed against the mortgagor, or relieve the latter from liability from the debt secured, unless the mortgagee has expressly agreed to release him, and to accept the purchaser as his debtor in place of the mortgagor.

27 Cyc. 1352; Campbell v. Clay, 36 P. 909.

Appellee's acceptance of Ward's assumption did not, in the absence of an express agreement, release Wilkinson and if ultimately Wilkinson should pay the indebtedness, he will be entitled to reimbursement from Paden.

Stallings v. Lane, 88 N.C. 214; Scanland v. Settle, 19 Tenn. (Meigs) 169; Green v. Warrington (S.C.), 1 Desous 430; Merriman v. Parkey, 191 S.W. 327, 136 Tenn. 645; Pruden v. Williams, 26 N.J. Eq. 210.

T.H. Hedgepeth, Herbert M. Fant, both of New Orleans, Louisiana, and T.M. Thomas, of Tupelo, for appellee.

It is admitted that the published notice of sale did set forth the name of the mortgagor who executed the trust deed. The question at issue, therefore, is whether or not, under the law as applied to the facts of this case, that was sufficient and valid notice. The appellee maintains that it was a legally sufficient notice under which a valid sale could be made, and was in fact consummated by the appellee acting through its substituted trustee.

Section 2167, Mississippi Code of 1930.

It will be noted that the act does not state in words that the notice of sale must set forth the name of the owner of the equity of redemption at the time of the foreclosure sale or of any subsequent assumer of the indebtedness, whether such name shall happen to be within or without the actual knowledge of the trustee or of the beneficiary.

Appellee wishes also to suggest to the court that as a practical matter it does not believe that much actual good would result to subsequent owners of the equity of redemption in mortgaged property about to be foreclosed by requiring that their names should appear in the notice of sale.

The appellee now asks the court to give the construction of the statute now contended for by it, regardless of the court's own personal feeling in the matter, because of such long continued interpretation of the statute by many thousands of persons along lines as now contended for by the appellee, and thus to prevent incalculable harm to millions of dollars in property values.

Wade v. Woodward et al., 145 So. 737.

The delay and expense incident to a foreclosure and sale in equity have brought power of sale mortgages and trust deeds into general favor both in England and America.

3 Jones on Mortgages (8 Ed.), sec. 2285, chap. 40; First Nat. Bank v. Bell S. C. Min. Co., 8 Mont. 32, 35, 19 P. 403, affirmed 156 U.S. 470, 49 L.Ed. 497; Fleming v. Barden, 127 N.C. 214, 37 S.E. 219, 53 L.R.A. 316; Shew v. Call, 119 N.C. 450, 27 S.E. 33, 56 Am. St. 678; Kornegay v. Spicer, 76 N.C. 95; Eubanks v. Becton, 158 N.C. 230, 73 S.E. 1009.

The notice of sale need not name the owners of the equity of redemption, or the subsequent mortgagees, or others who have acquired an interest in the estate from the mortgagor since the mortgagee's title accrued.

3 Jones on Mortgages (8 Ed.), sec. 2384; Silva v. Turner, 166 Mass. 407, 44 N.E. 532; Learned v. Foster, 117 Mass. 365; Dyer v. Shurtleff, 112 Mass. 165, 17 Am. Rep. 77; Roche v. Farnsworth, 106 Mass. 509; Cogan v. McNamara, 16 R.I. 554, 18 A. 157; Hoffman v. Anthony, 6 R.I. 282, 75 Am. Dec. 701; Alexander v. Chipstead, 152 Ga. 851, 111 S.E. 552.

It will be noted that Massachusetts cases are almost entirely relied upon to support the textual statements, and the textual statements are in point, therefore, only to the extent that the Massachusetts decisions cited were made under a Massachusetts statute similar to the Mississippi statute on the point under consideration.

Several of the other states, aside from Massachusetts, however, do require by their respective laws that the published notice of sale shall set forth the name of the mortgagor, but in no such instance has the appellee been able to find any state decision in a court of last resort under such a law to the effect that the use of the word "mortgagor" in such a statute comprehends and includes the name of any subsequent owner of the equity of redemption under and through the mortgagor, whether or not such subsequent owner may have assumed the indebtedness secured by the mortgage or trust deed.

3 Laws of Michigan, 1929, sec. 14428; C.L. Mich. 1857, sec. 5180; C.L. 1871, sec. 6915; H.O.W., sec. 8500; C.L. 1897, sec. 11136; C.L. 1915, sec. 14952; Hebert v. Bulte, 42 Mich. 489, 4 N.W. 215; Lee v. Clary, 38 Mich. 223; Lau v. Scribner, 197 Mich. 414; Bacon v. Insurance Company, 131 U.S. 238, 9 Sup. Ct. 787; Brown v. Burney, 128 Mich. 205, 87 N.W. 221; McCardia v. Billings, 10 N.D. 373, 87 N.W. 1008, 88 Am. St. Rep. 729; 27 Cyc. 1467; Reading v. Waterman, 46 Mich. 107, 8 N.W. 691.

Past Mississippi decisions construing the Mississippi statute indicate that while this court will insist that the plain requirements of the statute shall be met, that the court is, nevertheless, committed to a policy of as liberal construction of a notice of sale as is possible under all of the circumstances, having in mind the enforcement of the contract as written, and reference is made in this connection particularly to Mississippi cases as follows:

Readus v. Easterling, 110 So. 769, 145 Miss. 13; Weyburn v. Watkins, 44 So. 145, 90 Miss. 728; Tishomingo Sav. Inst. v. Duke, 1 So. 165.

Wells, Wells Lipscomb, of Jackson, J.M. Thomas, of Tupelo, T.H. Hedgepeth and Herbert M. Fant, both of New Orleans, for the Federal Land Bank of New Orleans, in support of suggestion of error.

While this sale was made on the 5th day of August, 1929, before the Mississippi Code of 1930 went into effect, nevertheless the statute law in force at that time, chapter 180, Laws of 1908, was to the same effect as section 2167 of the Mississippi Code of 1930.

The provision of said section 2167 of the Code of Mississippi of 1930, to-wit: ". . . The mortgagor or mortgagors whose property is advertised for sale" does not require that the names of grantees from the mortgagor, who assumed the indebtedness secured by the mortgage, be included in the notice or advertisement of sale under such deed of trust.

While it is true that this specific legal proposition has never come before this court, construing this Mississippi statute, the Supreme Court of West Virginia, under an exactly similar statute and under exactly similar facts, has come to exactly the opposite conclusion of this court, as set forth in the case at bar.

Shea v. Ballard, 61 W. Va. 255, 123 Am. St. Rep. 981.

While, as we stated hereinabove, this identical proposition of law has never been before this court, still this court has been called upon to adjudicate rights and remedies involving facts similar to those in case at bar in which the mortgagor has conveyed the land mortgaged to a grantee by deed, in which deed the grantee assumed and obligated himself to pay the indebtedness secured by the mortgage, and this court in its opinions has had occasion in a large number of instances to refer to such grantees who assumed the indebtedness secured by the mortgage.

Barnes v. Jones, 111 Miss. 337, 71 So. 573; Lee v. Newman, 55 Miss. 365; Gilliam v. McLemore, 141 Miss. 253, 106 So. 99.

We think it is a potent fact to be gravely considered by this court that in not one of these opinions has this court ever referred to such a grantee, who assumed the indebtedness under deed from mortgagor, as a "mortgagor." On the contrary, this court has referred to such grantee as "the vendee" or "the purchaser" or "the grantee of the mortgagor."

When a statute is of doubtful import or meaning the consequences of any particular construction should be considered and weighed by the court whether such consequences be good or bad.

Briscoe v. Buzbee et al., 143 So. 887; Venable v. The Wabash Western Railway Co., 112 Mo. 125; Conrad Furniture Co. v. Miss. State Tax Collector, 160 Miss. 185, 133 So. 652.

The law so favors the public good that it will in some cases permit a common error to pass for right.

Wade v. Woodward et al., 145 So. 737.

The court erred in reversing and dismissing the case in any event. If reversed the cause should have been remanded so that the lien of the Federal Land Bank of New Orleans on the land in question might be enforced to raise the money due under the note secured by the mortgage and assumed by the two subsequent grantees and for granting personal judgment against either or all of Walter A. Wilkinson and wife, J.L. Ward, and R.W. Paden.

Watkins Eager, of Jackson, amicus curiae, in support of suggestion of error.

We submit that there has been a literal compliance with the terms of the contract, where an advertisement is made, which gives the name of the mortgagor. To hold that the vendee of the mortgagor, assuming the indebtedness, is, himself, the mortgagor, is to do more than to hold the mortgagee to the strict letter of the contract. It is, upon the other hand, by inference, and even by doubtful construction, adding terms not contained either in the contract, or the statute.

Potter v. Fidelity Deposit Company of Maryland, 58 So. 713, 101 Miss. 823.

It is not necessary that we ask the court, in the instant case, to give the statute a strict construction, but we respectfully submit that the requirements of the statute should not be extended by inference or by construction.

We have turned to our own cases, in an endeavor to locate a case, if we could, in our books, where the word "mortgagor" and the word "vendee" who assumed the indebtedness, have been used interchangeably. We find running through our cases the word "mortgagor," used in a large number of cases, to-wit:

Stark v. Fulton, 101 So. 857, 136 Miss. 637; Lipscomb v. Jack, 20 So. 883; Swartz v. Lieber, 32 So. 954; Gross v. Jones, 42 So. 802, 89 Miss. 44.

The foregoing are only a few cases, but we have referred to each and every case in the Mississippi Reports where the word "mortgagor" is used, and in no case is the word used interchangeably with the word "vendee," who had assumed the indebtedness.

Houston v. Building Association, 80 Miss. 31.

The authorities are well settled that a plain and unambiguous statute is its own construer, and that nothing shall be added thereto. This court has repeatedly held that a court should not restrict or enlarge an unambiguous statute.

City of Hazlehurst v. Mayes, 51 So. 890, 96 Miss. 656; Hamner v. Yazoo Delta Lbr. Co., 56 So. 466, 100 Miss. 349; State v. Traylor, 56 So. 521, 100 Miss. 544.

Following this rule, the term "mortgagor" does not include anyone except the person who executed the mortgage upon the property in question.

Mitchell v. Williams, 124 So. 430.

Shands, Elmore Causey, of Cleveland, amici curiae,

We propose to consider the right of Messrs. Wilkinson and Ward to bring in question the validity of the in support of the suggestion of error. trustee's foreclosure. Those gentlemen are sureties. They are not those highly favored litigants, accommodation sureties, but they are sureties for value received. They occupy the position of sureties as against Paden.

Gilliam v. McLemore, 141 Miss. 253, 273.

The debt was in default. So were the sureties "always in default and guilty of laches after the maturity of the debt in not paying it off."

Clopton v. Spratt, 52 Miss. 251, 259.

The sureties do not and have never claimed that they had the least intention, or purpose, or ability, or even hope themselves of paying the debt, or any part of it.

The right of the sureties, in this case, was not ignored; it was respected and performed in full. The duty of the creditor was in substance from the standpoint of the sureties performed to the limit. We found nothing in the records which impugns the good faith of the creditor or the trustee. The trustee by mistake, it was an innocent mistake, he pursued the usual custom of such trustees in vogue for twenty-five years, or more, omitted a legal requirement as the court holds. But thereby he caused no hurt, suffering, damage, or injury to the sureties. Moreover, his act was somewhat their act. If the trustee was the agent of the creditor acting for it, so was he also the agent of the sureties and acting for them.

Graham v. Fitts, 53 Miss. 307, 313; Barkwell v. Swan, 69 Miss. 907, 915; Picard v. Shantz, 70 Miss. 381, 383; Payne v. Commercial, 6 S. M. 24, 39; Canal Bank Trust Company v. Brewer, 147 Miss. 885, 909.

We contend that the word "mortgagor," as used in section 2167, Mississippi Code of 1930, is not applicable to the defendant Paden in this cause.

As has been pointed out in the brief of Federal Land Bank filed on this suggestion of error, one occupying his position in this cause has never before in our jurisprudence been referred to as a mortgagor.

A mortgagor is one who conveys such an estate. Paden conveyed no estate. The estate had been conveyed years before. A mortgagor grants. Paden granted nothing and added nothing to the grant which had already been made, and was perfect so far as the mortgage was concerned.

Jones v. Fidelity Loan Company, 63 N.W. 553; Capps v. United States, 274 Fed. 357, 359.

Argued orally by Thos. L. Haman, for appellant, and by T.H. Hedgepeth, for the appellee.

Appellee filed its bill in the chancery court of Chickasaw county against W.A. Wilkinson and J.L. Ward, who are the appellants, and R.W. Paden to quiet and establish its title to certain lands in Chickasaw county bought by it at a mortgage foreclosure sale, and to recover a deficiency judgment against the defendants in the sum of approximately five thousand dollars.

In 1922 Wilkinson was a member of the Houston National Farm Loan Association of Houston, in this state, and the owner of one hundred shares of stock of the association. He obtained a loan from appellee in the sum of ten thousand dollars, giving a note therefor and a mortgage on his lands in Chickasaw county to secure the note.

In 1923 Wilkinson conveyed the mortgaged lands to appellant J.L. Ward in consideration of Ward's assuming the balance due on the mortgage indebtedness to appellee; other considerations were mentioned in the conveyance. The assumption of the indebtedness to appellee was set forth specifically as a part of the consideration for the conveyance.

In 1924 Wilkinson and Ward joined in a written application to the Houston National Farm Loan Association requesting that Wilkinson's stock in the association be transferred to Ward. In the application Ward reasserted his assumption of the mortgage indebtedness to appellee and agreed to carry out all the conditions and stipulations contained in the original application of Wilkinson. Appellee was given notice of the application for the transfer of the stock from Wilkinson to Ward and approved the same and recognized Ward as principal mortgagor.

In 1928 Ward conveyed the mortgaged property to R.W. Paden in consideration of Paden's assuming the balance due on the mortgage indebtedness and other considerations mentioned in the deed. The assumption by Paden of the mortgage indebtedness was expressly and plainly set forth in the conveyance. On the same day the conveyance was made from Ward to Paden, they both joined in a written application to the Houston National Farm Loan Association and appellee requesting the association to admit Paden to membership therein and that Ward's stock in the association be transferred to Paden, and that Paden be recognized and accepted as the principal mortgagor "with the reservation that neither the original borrower nor any subsequent transferees shall be released from the obligation until it is fully paid." The stock was accordingly transferred to Paden with the approval of appellee, and thereafter appellee recognized Paden as the principal mortgagor.

On August 5, 1929, default having been made in the payment of the mortgage indebtedness, foreclosure took place under the power of sale by the trustee, and the property was bought in by appellee for the sum of five thousand dollars. Upon demand of appellee, Paden and his tenants refused to surrender possession of the lands. Thereupon appellee filed its bill in this case to quiet and establish its title to the lands and to recover possession thereof and a deficiency judgment.

The published notice of the sale set forth the name of the original mortgagor, Wilkinson, but did not set forth the name of Paden. Appellants contend that for that reason the foreclosure sale was void. The applicable provision of section 2167, Code 1930, is in this language: "And such notice and advertisement shall disclose the name of the mortgagor or mortgagors whose property is advertised for sale. No sale of lands under a deed of trust or mortgage shall be valid unless such sale shall have been advertised as herein provided for, regardless of any contract to the contrary." This provision of the statute did not appear in the Code of 1906 (section 2772). That section of the Code was amended by chapter 180, Laws of 1908; the only change made in the statute by this amendment was the provision of the statute quoted above as it appears now in section 2167, Code 1930.

In volume 3 (8 Ed.) of Jones on Mortgages, sections 2285-2288, there is a discussion of the origin and history of the foreclosure of mortgages in pais. The author says, among other things, in section 2285: "Powers of sale in a mortgage are contractual, and as there are many opportunities for oppression in their enforcement courts of equity are disposed to scrutinize them, and to hold the mortgagee to the letter of the contract."

The statute is in derogation of common law and must be strictly pursued. It will be noted that the statute itself, in effect, so provides, for it expressly declares all sales made in violation of this clause shall be void. What does the phrase in the statute "mortgagor or mortgagors whose property is advertised for sale" mean? Is the statute satisfied if the advertisement states alone the original mortgagor and fails to name the last vendee through the original mortgagor — in this case, Paden? Ward and Paden were as truly mortgagors as was Wilkinson; they assumed the mortgage indebtedness as a part of the consideration of their conveyances, and this was done with appellee's knowledge and approval, and after each conveyance the vendee was recognized as the principal mortgagor. When the foreclosure took place neither Wilkinson nor Ward owned the land, but Paden did. Paden was therefore a mortgagor whose property was advertised for foreclosure. The policy of the statute is that those who own the mortgaged premises have notice — constructive notice — of the time and place of the foreclosure sale, so that they can be present and bid or have bidders present to protect their interests. Wilkinson and Ward were interested, but not so much so as Paden. Paden was the mortgagor in possession; he was the mortgagor whose property was advertised for sale. That could not be said of either Ward or Wilkinson. Still, Ward and Wilkinson were interested in Paden having notice, for, under the law, Paden had become the principal debtor and Ward and Wilkinson, his sureties, in the order named. Gilliam v. McLemore, 141 Miss. 253, 106 So. 99, 43 A.L.R. 79. We hold, therefore, that the failure to name Paden in the advertisement as mortgagor rendered the sale void.

Appellee contends, however, that the sale ought to be upheld "on account of the dire consequences that would flow from a contrary construction of the statute," and to sustain that contention it refers to the case of Conard Furniture Co. v. Mississippi State Tax Commission, 160 Miss. 185, 133 So. 652, 656. In that case the court held that in construing a statute of doubtful meaning "the consequences of any particular construction should be considered, whether they be good or bad." The trouble about that argument is we have here a statute which, in our judgment, is not of doubtful construction; it just says "mortgagor or mortgagors whose property is advertised for sale." That signifies Paden in this case and nobody else. He was the mortgagor whose property was advertised for sale and the only one whose property was advertised for sale.

Reversed, and bill dismissed.


Various suggestions of error by the appellee and by several attorneys amici curiae have been filed challenging the opinion heretofore rendered in this case.

We have given the suggestions of error careful and protracted consideration, have examined the available authorities, and we think the decision recently rendered in this case is correct. The statute involved is section 2167, Code 1930, which was chapter 180, Laws 1908, reads as follows:

" How Lands Sold Under Mortgages and Deed in Trust. — All lands comprising a single tract, and wholly described by the subdivisions of the governmental surveys, sold under mortgages and deeds of trust hereafter executed, shall be sold in the manner provided by section one hundred and eleven of the constitution for the sale of lands in pursuance of a decree of court, or under execution. All lands sold at public outcry under deeds of trust hereafter executed, or other contracts hereafter made, shall be sold in the county in which the land is located, or in the county of the residence of the grantor, or one of the grantors in the trust deed, provided that where the land is situated in two or more counties, the parties may contract for a sale of the whole in any of the counties in which any part of the land lies. Sale of said lands shall be advertised for three consecutive weeks preceding such sale, in a newspaper published in the county, or, if none is so published, in some paper having a general circulation therein, and by posting one notice at the courthouse of the county where the land is situated, for said time, and such notice and advertisement shall disclose the name of the mortgagor or mortgagors whose property is advertised for sale. No sale of lands under a deed of trust or mortgage shall be valid unless such sale shall have been advertised as herein provided for, regardless of any contract to the contrary. An error in the mode of sale such as makes the sale void will not be cured by any statute of limitations, except as to the ten-year statute of adverse possession."

It is argued that the term "mortgagor" or "mortgagors" whose property is advertised for sale, only refers to the original mortgagor, and does not apply to one who has assumed the mortgage debt, although such assumption was by the consent and with the acquiescence of the mortgagee, as in this case.

The term "mortgagor" is to be construed in connection with the whole statute, having in view the purpose and object to be attained by the statute. In 5 Words Phrases, First Series, page 4607, it is defined as follows: "The term `mortgagor,' as used in Comp. Laws, section 4365, providing that when a mortgage has been satisfied the mortgagee must, on demand of the mortgagor, execute a release, includes grantee or heir. Jones v. Fidelity Loan Trust Co., 63 N.W. 553, 555, 7 S.D. 122." In the same book: "Under Revised Statutes, sections 4150, 4151 [Ohio] providing that mortgages not followed by a change of possession shall be void as to subsequent mortgages, etc., recorded as required by the latter section, which provides that the mortgage shall be deposited with the clerk of the township where the mortgagor resides at the time of the execution thereof, it is held that the term `mortgagor' means each mortgagor, and so a mortgage of goods and chattels, executed by members of a partnership — one of whom lives in the county where the property is situate, and the other in another county of this state — upon property jointly owned by them, which is not accompanied by an immediate delivery, and followed by an actual and continued possession, of the things mortgaged, is void as against an assignee for the benefit of creditors of such mortgagors, subsequently appointed, unless, pursuant to Revised Statutes, section 4150, the mortgage, or a true copy thereof, be properly filed in the township where each of the mortgagors resides, notwithstanding the fact that such assignee had, at the time of the execution of the mortgage and of the assignment, full knowledge of the execution and filing of the mortgage in the township where one of said mortgagors resided and where the goods and chattels were situate," citing Westlake v. Westlake, 47 Ohio St. 315, 24 N.E. 412.

In 3 Words Phrases, Second Series, page 458, under the title "Mortgagor" it is said: "Revised Codes 1899, section 5845 (N.D.), authorizing a suit by a `mortgagor' to restrain foreclosure by advertisement, includes any person claiming title to the mortgaged premises under and in privity with the original mortgagor," citing Scott v. District Court, 15 N.D. 259, 107 N.W. 61, 62. It is also said: "As used in Revised Codes 1905, section 7454 (N.D.), providing that when the mortgagee or his assignee has commenced foreclosure proceedings by advertisement, and it shall be made to appear by the affidavit of the mortgagor that the mortgagor has a legal counterclaim or any other valid defense, foreclosure may be enjoined, the word `mortgagor' includes persons in privity to and claiming under the mortgagor; and a subsequent mortgagee may take the necessary affidavit and enjoin the sale," citing State v. Buttz, 21 N.D. 540, 131 N.W. 241. Again in this same volume it is said: "As used in Revised Statutes 1899, section 4342 [Mo. (Mo. St. Ann. sec. 3060, p. 1890)], requiring the inclusion of the mortgagor and actual tenant or occupier of the land among the defendants in all actions to foreclose mortgages, the term `mortgagor,' so far as it relates to the foreclosure of the equity of redemption, refers to the actual owner of the equity, who is an indispensable party to any kind of a foreclosure proceeding, but the absence of the grantor in a deed of trust constitutes no defect of parties, where, prior to such action, he has conveyed his equity of redemption," citing McCauley v. Brady, 123 Mo. App. 558, 100 S.W. 541.

In Wood v. Schwartz et al., 212 Iowa, 462, 236 N.W. 491, it was held that the term "mortgagor" is one who holds title to mortgaged premises; and that, where a husband owned land, and his wife signed a mortgage with him, she was not a mortgagor and was not bound to pay the taxes.

The Michigan court held to the contrary in Oades v. Standard Savings Loan Association, 257 Mich. 469, 241 N.W. 262. In that case it was held naming of the mortgagor was mandatory; that the courts may not disregard positive provisions of statutes; that slight and inconsequential irregularities in notices of sale will not vitiate same; and that execution by a wife of husband's mortgage does not bar her right of dower, but subjects it to the lien, and that the wife was a mortgagor.

In Grasswick v. Miller, 82 Mont. 364, 267 P. 299, it was held that a wife, who joined in execution of her husband's note as one of the makers, and executed a mortgage to secure the note, became the mortgagor within the meaning of Revised Codes 1921, section 8255, providing that mortgagor's after acquired title inures to mortgagee, notwithstanding claim that mortgage was signed by her merely for purpose of relinquishing inchoate dower right, mortgagor being person who makes the mortgage. At page 303 of the Pacific report, the Supreme Court said: "However, a mortgagor is `he who makes a mortgage' (Bouv. Law Dict.), and the plaintiff, who assumed personal liability for the debt attempted to be secured by the mortgage, became a mortgagor within the meaning of section 8255, above. In Lohman State Bank v. Grim, 69 Mont. 444, 222 P. 1052, this section was held to estop the wife of Grim under circumstances wherein the equities of the wife were much stronger than those of this plaintiff, and under fact conditions analogous to those of the present case, except that the filing made was under the Homestead Act instead of the Desert Land Act."

It will be seen from these authorities that the term "mortgagor" has been given various meanings, and frequently includes one who has assumed payment of a mortgage, or one who stands in privity to a mortgagor.

It is well settled in this state that where a person assumes a debt owed by another, secured by a mortgage on land or otherwise, the mortgagee may maintain a suit against such person. Barnes v. Jones, 111 Miss. 337, 71 So. 573, Dodge v. Cutrer, 100 Miss. 647, 56 So. 455, Lee v. Newman, 55 Miss. 365, and Gilliam v. McLemore, 141 Miss. 253, 106 So. 99, 43 A.L.R. 79. It is also well settled that persons foreclosing mortgages by sales in pais should carefully follow the conditions embraced in the deed of trust, including the pertinent statutes which will be read into the deed of trust. Jones v. Salmon, 128 Miss. 508, 91 So. 199, Rawlings v. Anderson, 149 Miss. 632, 115 So. 714, and McCaughn v. Young, 85 Miss. 277, 37 So. 839. The manifest purpose of the legislative amendment in 1908 to section 2772, as it stood in the Code of 1906, was to require a foreclosure in pais to disclose the name of the mortgagor. We cannot disregard that part of the statute reading "whose property is advertised for sale." That was intended to apply to persons who owned the property at the time of the sale and who had assumed the mortgage debt. We have no doubt it was within the power of the Legislature to require notice to be given so as to disclose the name of the one who had assumed the debt, and who owned the property at the time of the sale.

However, we think the Legislature was actuated by the purpose of giving notice not only to the original mortgagor, but to the general public as well, by disclosing the name of the person who had assumed the mortgage, so that such person and his friends, relatives, and creditors, and the general public also, might be induced to bid on the property. Yellowly v. Beardsley, 76 Miss. 613, 24 So. 973, 71 Am. St. Rep. 536. This purpose is manifest from the statute referred to above.

We are of opinion that the statute is clear, and we cannot avoid the effect of noncompliance therewith, although it may impose regrettable hardship upon persons who have not observed its provisions. The law in this state is favorable, on the whole, to creditors, but, in regard to foreclosure notices, the Legislature has imposed conditions designed to benefit mortgagors.

Finally, we are presented with the argument that the practice of members of the bar has been not to name consequent mortgagors who have assumed the original mortgage debt, and that, if they were in error in their construction of the statute, such error has been committed so often as to be condoned by the maxim, "communis error facit jus" (common error sometimes passes current as law).

There is nothing by which we can assume that the members of the bar have, in fact, construed the statute as contended. We have no method of knowing the extent to which the erroneous constructions have been applied in foreclosure sales. There is no room for the application of the maxim in this case.

It is finally urged that we should not have dismissed the bill, but should have retained it for the purpose of legal foreclosure under the deed of trust.

It appears that alternative relief was prayed for. The suggestion of error will be overruled, but the cause will be remanded for further proceedings in conformity to the views in this opinion.

Suggestion of error overruled and cause remanded.

Summaries of

Wilkinson v. Bank of N.O

Supreme Court of Mississippi, Division B
Jan 8, 1934
150 So. 218 (Miss. 1934)
Case details for

Wilkinson v. Bank of N.O

Case Details


Court:Supreme Court of Mississippi, Division B

Date published: Jan 8, 1934


150 So. 218 (Miss. 1934)
150 So. 218

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