Opinion
No. 33573.
February 13, 1939. Suggestion of Error Overruled March 13, 1939.
MORTGAGES.
Deed of trust "in renewal and extension of" predecessor's deed of trust which was on land only was not sufficient on its face to convey the timber on the land.
APPEAL from the chancery court of Perry county; HON. D.M. RUSSELL, Chancellor.
A.T.L. Watkins, of New Augusta, and J.P. Edwards, of Mendenhall, for appellant.
The trustee is the holder of the legal title, notwithstanding the owner may be in possession or may occupy, until forfeiture, and it would be futile to attempt to divest the title by giving a second mortgage.
19 Standard Cyc. of Procedure, page 941.
In construing contracts the intention of the parties must be ascertained from the instrument itself, giving "effect" to every clause and word.
9 Cyc., page 577, A and B, 2 and 3, page 578, 5, page 579, 6, page 580, 582, D, page 583, 6, page 584, 585, H, page 587.
When the restricting clause "this in renewal and extension of a certain deed of trust given by S.F. Mills and Frances Mills his wife" (in possession of Perry County Bank) was written into the printed form, it was not for pastime, it has an important meaning, and could have meant but one thing, Mr. Albritton had already mortgaged the timber, and it was still in force and effect, and Perry County Bank ratified that stipulation, in that it did not cancel the Mills trust deed until five months after the irregular foreclosure, having record knowledge and personal knowledge of its existence. The Mills trust deed recites "except the timber," the Mills trust deed was not cancelled until November 6, 1930. The Albritton trust deed against the timber, dated February 10, 1928, was never cancelled.
The trust deed from Albritton to Perry County Bank excluding the timber, dated January 29, 1929, foreclosed June 2, 1930, the bank evidently ratified and confirmed the Mills trust deed, Albritton's trust deed being a junior or second mortgage and its holding in tact the Mills trust deed or a list lien on land, except the timber, and it is continued long after the attempted or fraudulent foreclosure.
A trustee must follow the mode, manner and terms of the instrument in foreclosing, else the sale will not be valid, if there is any material variation.
McCaughn v. Young, 85 Miss. 277.
A junior mortgage must pay into the hands of the trustee the full amount of his bid, for first mortgagee.
McPherson v. Davis, 95 Miss. 328.
A mortgagee cannot bid at his sale, unless the mortgage confers that right, especially when everyone except himself is prohibited from bidding as in this case.
Boyd v. Clark, 52 Miss. 623, 80 Miss. 31.
If Albritton had attempted to give Perry County Bank a lien on the timber, it would have been a nullity, under section 2118, Code of 1930, he could not have lawfully conveyed and the right and lien of D'Lo Guaranty Bank was not affected under section 2152 of the Code.
Perry County Bank is estopped to deny its acceptance of the junior trust deed from Albritton, in its entirety, for the manifest reason, it acted on said contract, by foreclosing and is chargeable with full knowledge and assent to every word in the contract, it is chargeable with full knowledge of the restrictive clause "except the timber."
When an instrument refers to some other writing, it becomes a part of the contract, as effectively as if copied therein.
Lee v. Long, 118 So. 320.
An instrument conveys only the property described therein and which was manifestly intended to be conveyed.
Finkbine Lbr. Co. v. Saucier, 116 So. 763.
We respectfully urge the court to carefully consider all of the foregoing assignments and we verily believe that the decree of the Chancery Court should be reversed and a judgment of this court entered cancelling any claim of Perry County Bank or its assigns to the timber on N 1/2 of NE 1/4-SE 1/4 of NE 1/4 sec. 17 T. 2 N, R. 10 West, and extend the time in which appellant may remove said timber, for such time as the court finds that he has been prevented from removing the same, by injunction or otherwise; and we respectfully urge the court to enter judgment on the sworn answers and items of damages as filed, it not being denied by either plea or proof.
Hannah, Simrall Foote, of Hattiesburg, and H.D. Young, of New Augusta, for appellee.
We believe that the only question to be decided by this court is whether these words in appellant's deed of trust to Perry County Bank, "This deed of trust is in renewal and extension of a certain deed of trust given on the aforesaid land by S.F. Mills and Frances Mills, his wife," serve to except from said deed of trust the timber on said land, and whether the lien of that deed of trust was properly foreclosed.
A cardinal rule of construction is that all contracts and other instruments shall be construed, if possible, so as to give effect to all of its provisions and thus to effectuate the intention of the parties thereto, and that for the purpose of ascertaining this intention the entire instrument and all of the circumstances surrounding the parties should be considered. The court should, as nearly as possible, assume the position of the parties to the instrument, consider the circumstances of the transaction between them, and then read and interpret the words of the instrument in the light of these circumstances.
41 C.J. 449; 4 Thompson on Real Property, sections 3101, 3322.
An examination of the appellant's deed of trust to Perry County Bank discloses that the granting clause is all inclusive and contains no inference that any part of the estate granted is to be excepted from the grant. It expressly conveys to the trustee "the following described property situated in Perry County, Mississippi, . . ., containing 160 acres more or less together with all appurtenances thereto attached or belonging." Then follows the above-mentioned recital which is immediately followed by, "and any increase of property real or personal that may be acquired by purchase or otherwise, the title to which unto said trustee or any successor we warrant and agree forever defendant." Then immediately follows the habendum clause to the effect that the conveyance is in trust to secure the debt, etc. We do not think that the granting clause of this deed of trust, which is absolute in its terms, can be qualified or restricted by any subsequent recital repugnant to the grant, and particularly by any subsequent recital that is not perfectly clear in regard to the qualification or limitation.
4 Thompson on Real Property, sec. 3324; 41 C.J. 450.
This conclusion is supported also by the general rule of construction of conveyances that any exception or reservation in an instrument of conveyance is construed most strongly against the grantor on the ground that the words are his, that an exception of the fee is not implied, and that the intention to make an exception must appear in clear and express terms. If the grantor intends to make any exception in the instrument, it is easy for him to do so, and if he does not clearly express any such intention, an intention to make an exception will not be implied.
4 Thompson on Real Property, section 3283.
The question involved in this case is whether the appellee, as the vendee of certain land from the Perry County Bank, obtained title to the timber in question, and in regard to the cutting and removal of which she obtained injunctive relief in the court below against the appellant. The bank purchased the land at a foreclosure sale under a deed of trust executed in its favor by appellant. Some time prior thereto appellant had conveyed the land to one S.F. Mills, but expressly reserved from the operation of the deed "all standing green timber six inches and upwards" in diameter, with ten years in which the grantor could cut and remove the same. While Mills was the owner and in possession of the land, he and his wife borrowed the sum of $1,000 from the same bank secured by a deed of trust on the land "except the timber as reserved by L.A. Albritton in his deed to us." It was to secure this same indebtedness that the appellant, Albritton, executed his deed of trust in favor of the bank hereinbefore mentioned, since Mills had in the meantime reconveyed the land to appellant. In the deed of trust given by appellant to the bank in lieu of the Mills' deed of trust, it was stipulated that the same was "in renewal and extension of a certain deed of trust given on the aforesaid land by S.F. Mills and Frances Mills, his wife, and is a first lien on said land." The deed of trust referred to in the above quotation excepted the timber as hereinbefore stated. When the appellant's deed of trust to the bank was given, the records disclosed that the D'Lo Guaranty Bank held a first lien on the timber and a second lien on the land, the timber lien being represented by a deed of trust executed by appellant, and the second lien on the land by a deed of trust executed by Mills in favor of appellant and later assigned to said bank. In this situation, appellant executed a new deed of trust to the D'Lo Guaranty Bank to secure a total indebtedness then owing by him of $1,375, on the same day of the execution of his said deed of trust to the Perry County Bank, and it was stipulated therein that the same was a second lien on the land, since the Perry County Bank held the first lien. No specific reference was made to the timber in either of these two last mentioned deeds of trust, unless it be said that the fact that appellant recited in his deed of trust to the Perry County Bank that it was "in renewal and extension of" the Mills' deed of trust in favor of said bank (which reserved the timber), amounted to a reservation of the timber on which the other bank then already held the first lien. We do not think the deed of trust in favor of the Perry County Bank, containing the above quoted provision, is sufficient on its face to convey the timber in view of the denial contained in the answer of appellant of the contention of appellee to the effect that it was the intention and understanding of the appellant and the two banks that the Perry County Bank was getting a lien on the timber and that the lien of the other bank was to be a junior lien as to both the land and timber. Appellee introduced in evidence all the conveyances hereinbefore referred to and rested her case without further proof. This was not sufficient. The issue should be determined in the light of the facts with reference to the agreement and understanding of both banks and appellant, as to the timber, at the time of the execution of the two last mentioned deeds of trust. It is averred in the answer, in response to the allegation of the bill of complaint to the effect that the Perry County Bank was to acquire a first lien on the timber, that the said bank had both constructive and actual knowledge that the D'Lo Guaranty Bank was then holding a first lien on the timber and that appellant was without authority to supplant the same. Moreover, it was alleged in the bill and denied in the answer that appellant had already cut and removed all the timber he desired to cut at the time of the execution of these deeds of trust, and had abandoned the remainder.
For the reasons above stated, the cause will be reversed and remanded for rehearing on the proof as to the issues of fact raised by the pleadings.
Reversed and remanded.