
    Harriet L. Gibbes and Mary H. Gibbes vs. Anna M. Holmes, Mary Thayer and others.
    
      Practice — Devise—Mortgage — Pleadings — Parties—diction at Law. '
    
    Case sent to the Court of Errors, and then, after argument in that Court, withdrawn.
    A devise by the mortgagee of the mortgaged premises, carries with it the mortgage and all the securities for its payment.
    To a bill by the devisee of the mortgagee against the representatives of the mortgagor, the executor of the mortgagee is a necessary party; and the personal representative of the mortgagor is also a necessary party.
    Plaintiffs’ right being prima facie good, but their bill being defective for want of proper parties: — Reid, that the Circuit Chancellor erred in dismissing plaintiffs< bill, and leave given them to amend on payment of costs.
    The defence being that the bond, mortgage to secure the payment thereof, and judgment on the bond, must be presumed paid or satisfied from lapse of time, Ordered, that an action at law be brought on the bond to determine the question of payment or satisfaction, and that the pleadings be made up and question decided as if the action had been commenced on the day the bill was filed.
    BEFORE DÁRGAN, CI-I., AT CHARLESTON,
    FEBRUARY, 1858.
    Sarah Ruth Simons died on October 9th, 1852, leaving a last will and testament bearing date May 21st, 1850, by which she devised as follows :
    “The house and lot No. 77 Tradd street, formerly the property of my friend and relation, C. S. Thayer, which I have held under a mortgage and judgment since the year one thousand eight hundred and thirty, I give and bequeath to the three daughters of my said deceased friend, Caroline S. Gibbes, Anna Maria Holmes, and Mary Thayer, during their lives, or during their widowhood or unmarried state, while they shall stand in need of support or maintainance therefrom. But if either of them should marry, or die, or by the good Providence of God have an accession of 'property, and not stand longer in need of a maintenance or support from the above property, to the above Caroline S. Gibbes,being still a widow, and at her death to her two daughters, Harriet L. Gibbes, and Mary H. Gibbes; or in case of the death of either of the said daughters, to the surviving daughter. The taxes, repairs, and insurance, have been paid by those who have had the use and income of the said property, and is therefore left free from any incumbrance whatever.”
    The bill was filed August 10, 1857, by Harriet L. Gibbes and Mary H. Gibbes, against Anna M. Holmes and Mary Thayer, to recover possession of the house and lot No. 77 Tradd street. The plaintiffs alleged, for reasons set forth in their bill, that the title of their devisor, Mrs. Simons, was merety equitable; that the defendants had received an accession of fortune which rendered them independent, and they had removed from the house No. 77 Tradd street, and could no longer claim the exclusive enjoyment of it; and that the plaintiffs’ mother, Caroline S. Gibbes, had assigned her interest to them. The other important facts of the case are stated in the circuit decree which is as follows:
    Dargan, Ch. Amidst the obscurity and twilight which the lapse of years has shed around this case, there are some of the facts, and those very material, that stand out with great clearness, about which no doubt is entertained. ^ It is certain that Mrs. Caroline Thayer was indebted to Andrew E. Thayer; by bond dated 15th June, 1826, in the .penal sum of $4,991.66, conditioned for the payment of $2,495.83 in five equal annual instalments; that to secure the paj^ment of the said bond, Mrs. Caroline S. Thayer executed a mortgage, bearing the same date, of the house and lot No. 77 Tradd street, the subject matter of this litigation ; that afterwards, on 13th February, 1830, a judgment was rendered on this bond for the penalty thereof, there being then due $2,263.38, besides $24.50 for the costs of the suit; that a fieri facias on the said judg-meñt was lodged with the Sheriff on the 13th February, 1830; that on the 6th November, 1830, Mrs. Sarah Ruth Simons paid to Andrew E. Thayer the balance then due on said judgment, namely, $1,715, and took his receipt for that sum with a promise expressed therein that he would execute and deliver to her an assignment of the judgment, and also of the said mortgage; and that he did afterwards, on the 15th November, 1830, by his Attorneys, J.B. Thompson and J. Clarke, execute and deliver to the said Sarah Ruth Simons an assignment of the said mortgage. All these are facts that are not disputed.
    Equally certain are the following facts : That between Mrs. Thayer and Mrs. Simons there subsisted intimate relations of friendship and consanguinity; that Mrs. Simons was wealthy, while Mrs. Thayer was circumscribed in her pecuniary affairs; that the latter was unable to pay this debt without much inconvenience; that Mrs. Simons, from motives of friendship and affection, came forward for the relief of her friend from the pressure of this debt, and thus became the purchaser and assignee of the judgment and mortgage, with the understanding that as to the payment of the same to Mrs. Simons, Mrs. Thayer was to have an indefinite indulgence. This compact was religiously observed by Mrs. Simons. Mrs. Thayer enjoyed the premises to the day of her death, and afterwards they continued to be occupied and enjoyed by two of her daughters to whom she had devised them.
    Thus, it will be perceived, that in its inception, this transaction between the two ladies wore the simplest form imaginable. It was precisely as if Mrs. Thayer had executed the bond and mortgage to Mrs. Simons. It was the common case of the mortgagor retaining the possession of the mortgaged property.
    We must next inquire if there are any subsequent facts that altered or disturbed these simple relations of mortgagor and mortgagee.
    The position assumed in the answer, that Mrs. Simons made a giftvof this debt to her debtor, Mrs. Thayer, is scarcely deserving of a passing notice. There is nothing in the evidence or the history of the transaction that affords it the semblance of support. Such an idea never got afloat until after the death of Mrs. Simons, and then it only floated in the imagination of those whose interest it was to sustain such a position. Certainly there is no evidence to that effect.
    The defendants have pleaded the statute of limitations. It is a misconception, I think, to suppose that the statute of limitations has any application to this case. If it is meant to apply as a bar to the debt, it cannot prevail. If a mortgage be given to secure a simple contract debt, when the debt is barred, the mortgage is discharged. Anything that satisfies or destroys the debt discharges the mortgage. But this debt was secured by a bond and the debt afterwards passed into the form of a judgment; arid neither of these forms of indebtedness is subject to the plea of the statute of limitations. If the plea of the statute of limitations is intended to apply to the land, that is also a misconception. The statute does not run in favor of the mortgagor against the mortgagee. In the beginning, the possession of the mortgagor is permissive. The character of the possession cannot be changed and made adverse without notice to the mortgagee. They stand to each other in the. relation of trustee and cestui que trust. A third party, who is a purchaser without notice, may hold adversely to both, and ten 3rears’ possession by such a party may defeat the title of both mortgagor and mortgagee. But.as between these two, nothing can discharge the mortgage but the payment of the debt or its effectual discharge in some other way.
    But a more serious ground of defence is, that which assumes that the debt must be presumed to be satisfied from the lapse of time. If this presumption prevails, the mortgage is as completely discharged as if the debt had been satisfied by actual payment. Where the statute of limitations applies, it is presumptio juris et de jure. It cannot be rebutted. A debtor may admit that the debt has not been paid, and in the same breath insist upon the protection and bar of the statute. But a presumption' of satisfaction, arising from the lapse of time may be rebutted. The simple lapse of twenty years, without any auxiliary circumstances on either side, is sufficient to create a presumption of payment. A much shorter period with corroborative circumstances in aid of the presumption, will have that effect, while more than twenty years will not raise the presumption if there be.rebutting circumstances to satisfy the mind that the debt has not been paid.
    In this case more than twenty years have elapsed since the last express recognition of the existence of this debt on the part of Mrs. Thayer. But in my judgment the circumstances are sufficient to rebut the presumption of payment arising from this cause. The rebutting circumstances are these: Mrs. Thayer was poor, and not-likely to have paid the debt unless pressed, while Mrs. Simons was rich, and was not likely to press her needy relative and friend. The very purpose with which Mrs. Simons became the purchaser and assignee of the debt and mortgage, was that Mrs. Thayer might be indulged, and it is not reasonable or consistent that she should forthwith have coerced her to pay the debt. From the evidence of Mrs. Caroline S. Gibbs, it appears that Mrs. Thayer was aware that Mrs. Simons had paid the debt and had taken an 'assignment of the mortgage, and that she acknowledged herself highly indebted to Mrs. S. for this act of kindness. She spoke of Mrs. S. as the owner of the house, and in the repairs and leases of the premises, she always consulted with and acted with the advice of Mrs. Simons. I think the presumption of payment arising from the lapse of time, is very satisfactorily rebutted.
    I am of the opinion, therefore, that at the time of Mrs. Simons’ death, the judgment was still outstanding and unsatisfied, and the mortgage of force. It was a chose in action, secured by aA'ereupon the house and lot No. 77 Tradd street by virtue of the mortgage. Mrs. Simons never had such an interest in the lot as would give a title to her devisees under her will. In Englañd, where the mortgagee is vested with the legal estate, it seems to be clearly settled that he can transfer the title to his devisee. Even general words, devising all his real estate, fyc. will convey the legal estate vested in the testator as mortgagee, unless there be restrictive words shewing that such was not his intention. But in this State, where our Act has destroyed the legal estate of the mortgagee, and adopting the equity doctrine, has declared that the mortgagor is the legal owner of the land, and the mortgagee only a creditor, with a lien on the land for the security of his debt, I apprehend that no one would imagine that the principle of the English decisions would apply to a case in our Courts; for, of course, the testator could only devise such interest in land as he possessed at the time, and having nothing but a lien on the land, (nothing more than a judgment creditor has,) he could not devise that by his will. He might bequeath the debt, secured by the mortgage, and the lien would accompany it.
    Whether, in this case, the words of the codicil of Mrs. Simons would be sufficient to pass to her devisees this debt with the mortgage as a security, I am not so well assured; Mrs. Simons, inops consilii when she made this codicil, was firmly persuaded that she owned the fee in the Tradd street lot, discharged from all right on the part of Mrs. Thayer’s heirs or devisees to redeem; and being so impressed, she proceeded to dispose of it as if she owned it absolutely.
    The following is her language: “The house and lot No. 77 Tradd street, formerly the property of my friend and relative C. S. Thayer, which I have held under a mortgage and judgment since the year 1830,1 give and bequeath to the three daughters of my said deceased friend, Caroline S. Gibbes, Anna Maria Holmes and Mary Thayer, during their lives, &c.” The testatrix does not affect to give the debt secured by the mortgage and judgment, but devises the house and lot specifically. Whether this is sufficient (in another proceeding) to give to the devisees named in the codicil the money due on said judgment and secured by the mortgage, when it shall have been collected, I have not considered, and express no opinion. But in either view of the case, I think the executor or personal representative of the testatrix a necessary party in any judicial proceeding which has for its object the enforced payment of the debt by a foreclosure of the mortgage or otherwise. If Mrs. Simons had clearly and unequivocally bequeathed the judgment debt and the mortgage as a chose in action, or a chattel interest, still the personal representative of the testatrix would be a necessary party in a suit for the foreclosure of the mortgage. I know not how the choses in action of a testator or intestate can be recovered, except by an action in the name of the executor or administrator.
    As an English writer has expressed it, “ So long as the money and lands in mortgage retain their respective character impressed upon them in equity, that is, so long as the debt remains the principal, and the land the pledge, so long will the mortgage be personal assets, and, accordingly, if the mortgage be in fee, and the mortgagee dies, his heir of devisee will be a trustee for the executor.” This supposes a case where the title or legal estate in the mortgagee descends to his heir at law or vests in his devisees by his will. It is still assets, and the heir or devisee is trustee for the executor* And again the same writer says: “The law is now clear, that whatever may be the form of the mortgage, it will be part of the personal assets óf the mortgagee, and consequently on his death, will, unless he direct to the contrary, belong to his personal representatives.” If the mortgagee die intestate, the mortgage debt is assets in the hands of the administrator, to tie administered as the law directs. If he bequeaths it specifically, it still must go into the hands of the executor, where it will be subject, in the first instance, to the payment of debts, and what remains of the proceeds, be it all or a part, must be paid by the executor to the legatee. Like every other chattel interest, it must first pass to the legal representatives*
    
      I hold, that in a suit for foreclosure, the personal representative, of the mortgagee is a necessary party; and it the mortgage be assigned, the personal representative of the assignee, by a parity of reasoning, is also a necessary party. In this case it is said that no one named as executor has qualified, nor has there been any administration. But this is nothing to the point. The legatee cannot sue. There must be an administration, and if the executor "will not qualify, nothing can be easier than to take out letters of administration cum testamento annexo.
    
    It is ordered and decreed that this bill be dismissed.
    The Complainants appealed on the grounds:
    1. That the devise of the house to Anna Maria Holmes, Mary Thayer, and Caroline S. Gibbes, with remainder to complainants in fee, is a good devise of all the interest of the testatrix, Mrs. Simons, in the house. But she was a mortgagee, and the mortgagor out of possession, and the remainder limited to complainants has vested in possession, by which it is clear that they are entitled to maintain this suit in the character of mortgagees.
    2. That the case does not fall within the Act of 1791, because the mortgagor is out of possession, and the 'question is to be determined upon the relations existing between the equitable mortgagee and parties claiming as heirs or devisees of the mortgagor, independent of that Act.
    3. That it is not a questien whether the personal representative of the mortgagor is a necessary party to a bill of foreclosure, but whether the assignee of a mortgage may maintain a bill for foreclosure without joining the assignor as a party.
    4. That there is no need to amend, because the executor of Mrs. Simons consented to the legacy; and the legacy, even considering it independent of the mortgage, as a mere gift of money, is a specific legacy, and the consent of the executor vests the property in the legatee.
    5. That even if the bill was defective, in not making Mrs. Simons’ executor a party, the defect is of form only, and should not have led to the dismissal of the bill, but an order for leave to amend.
    
      Petigru, Pettigrew, for appellants.
    
      Flagg, Yeadon, contra.
   After argument in the Equity Court of Appeals that Court made the following order:

Wardlaw, Ch.

This Court recognizing fully the maxim, equitas sequitur legem, which indeed has become a statutory regulation by the Act of 1836, reorganizing the Courts of the State, finds embarrassment in determining whether the case of Stover vs. Duren, 3 Strob. 448, and others, which may have followed it, were intended to propound new doctrine as to presumptions of fact, and desires conference with the Law Court on this question.

It is ordered that this case be sent to the Court of Errors for the determination of the following question.

Whether or not under the pleadings and evidence in this case, including the answers, the bond of Caroline Thayer to Andrew E. Thayer, dated June 15, 1826, and the mortgage ox the same date, and the judgment rendered on the bond February 13, 1830, should be presumed to be satisfied, or in any way extinguished or discharged at the time of filing the bill August 10, 1857 ?

It is further ordered, that a message be sent to the Law Court inquiring on what day it would suit their convenience to meet us for the adjudication of this question.

Johnston and Dunkin, CC., concurred.

After argument in the Court of Errors, the case was withdrawn from that Court, and now the opinion of the Equity Court of Appeals was delivered by

Johnston, Ch.

The question, whether the bond and judgment mentioned in the pleadings were subsisting and valid obligations, at the filing of the bill, was referred to the Court of Errors. But after argument and conference, it was deemed advisable to withdraw it. The whole case is, therefore, now before this Court, and we are to make such disposition of it as in our judgment is most proper.

One portion of the appeal raises the enquiry whether the Chancellor was right in holding that the personal representative of Mrs. Simons, the owner of the mortgage,tshould have been made a party. In our opinion the devise of the mortgaged premises carried with it, in equity, a right to the securities, consisting of the bond, judgment and mortgage, by which the title, legal or equitable, to the thing devised, is to be sustained; and that the executor of the devisor is a necessary party, inasmuch as his assent is requisite to the passing these securities to the devisee.- He is, also, a proper party to the question in the case, whether the mortgage and the securities on which it depends, were paid off and extinguished, or partially satisfied, before they came to the hands of the devisee.

We, therefore, approve the Chancellor’s opinion on this point; but we are not of opinion that, for the omission of this party, the bill should have been dismissed. In a case like this, where the plaintiff’s right is,prima facie good, the bill-should have been retained, and leave given to amend, on proper terms.

We are also of opinion that the personal representative of Mrs. Thayer, the mortgagor, should be brought before the Court, through whom, as a proper organ, to insist upon and establish any payments she, in her life time, or he, after her death, may have made. If there be, in fact, no such representative, the plaintiffs may proceed as they may be advised, in causing letters of administration to be granted, and then . making the party.

With respect to the question whether the bond and judgment were extinguished or still subsisting obligations at the filing of the bill, this Court prefers that those questions be determined at law, inasmuch as the instruments on which they arise are legal instruments, and the questions themselves purely legal questions; and it will direct an action at law, in which the defendants shall, and are hereby required to admit service of the writ as of the date of the filing of this bill, and to make up the pleadings, without objection, with reference to that time. This course is necessary to present the question existing in this case, truly to the law Court.

It is therefore ordered that the decree, so far as it dismisses the bill, be set aside; and that the plaintiffs, on the payment into Court, within three months from this date, of the costs which have heretofore accrued in this case, (and unless this payment is made, the defendants to be at liberty to move that the bill be dismissed,) be at liberty to amend their bill so as to make a party plaintiff of the personal representative of Mrs. Sarah R. Simons, and a party defendant of the personal representative of Mrs. Caroline S. Thayer 5 and that they have leave further to amend their bill by introducing into the prayer thereof a prayer for such further particular relief as they may be advised, and for general relief — the existing defendants being at liberty to answer said amendments, and the new defendant to answer the original bill and amendments.

And let the cause in the meantime be remanded to the Circuit Court, and when the pleadings aforesaid are made up, let the action at law as aforesaid, be instituted in Charleston District — the pleadings therein made up and set down in that Court for hearing. Any further proceeding in this cause, in the meantime, to be the subject of motion in the Circuit Court in Equity.

Dunion and Wardlaw, CC., concurred.

Decree modified.  