36 Ark.] NOVEMBER TERM, 1880. 69 Oliphint v. Eckerley. OLIPHINT V. ECKERLEY. I. MORTGAGE : Renewmg note Is not payment: As between the parties, the renewal of a note secured by a mortgage is not payment, and in the absence of some agreement or a plain mani feqtation of a contrary intentin n, trip ceeurity reniquic intact 2: SAME : Mortgemeahle estates In equity not only vested remainders but contingent future interests may be conveyed or mortgaged: 3: BANKRUFTCY : Does not discharge liens: Specific liens are not discharges by bankruptcy_ They may still be enforced, but a personal judgment can not he rendered agamst the bankrupt. APPEAL from White Circuit Court in Chancery. Hon: J, N: CYPERT Circuit Judge. T, I. Oliphirit, for appellant Court erred in overruling the demurrer as to (Dliphint Adams et al, v. Stilwell, 29 Ark: The discharge of Oliphint in bankruptcy, discharged the debt, and it would not revive as a lien upon after-acquired
70 SUPREME COURT OF ARKANSAS, [36 Ark. Oliphint v. Eckerky, property: Bailey v. Moole, 21 DT, 165; Peck v: Jennings, 7 Howard, 613_ The deed no estoppel, as the mortgagee knew of the true state of the title 3 Wash. on R. Prop., pp. 72, 76. The title not being in use, did not pass without covenant of warranty. Jackson V. Trright, 14 John., D03 ; Dart v. Dart, 7 Con., 252; 2 Smith's Lead Ca , 624; Simms V, Skein, 3 Pickering, 52 aad 61 ; Blouchard v, Brooks, 12 Pick., 47 , Bisphain's Eq., sec, 280. Nothing at law, not in possession nor vested in right, can be granted or assigned: Co. Lit., 269 ; 3 Wash On R Prop , p 87. J. W. House, for appellee : The after acquired title passed to the mortgagee: 5 Ark., CQ3 55 ilL, 73 ; 27 th:, 61; Jones on Mortgages, vol I, secs. 561, 67y, 825 Substitution of note no discharge of the lien. Hilliard on Mortgages, pp. 482 and 483 I J ones on Mortgages, sec: 355; 2 do., sees. 024 and 042 8 Am. Dec., 282 and 538. STATEMENT. EAhaiN, J. Eckerley sued Oliphint and wife, to foreclose a mortgage made by them of certain real property, on the twenty-ninth of May, 1873, to secure a debt, evidenced by Oliphint's note for $1,002:20 of even date with the mortgage, due January 1, 1874; showing, further, that this note had been renewed by Oliphint on the twenty-third of January, 1874, by the execution of another note for the same amount, payable January 1, 1875, with the same rate of interest to be calculated from the date of the first note: There was the usual prayer for judgment, sale of lands, etc. A demurrer, as to Oliphint, was overruled: No further
36 Ark.] NOVEMBER TERM, 1880. 71 Oliphint Eckerley: proceedings were had against his wife, who had died ; and her heirs were not brought in, Oliphint answered, denying that he had any interest in the property when the mortgage was made, saying that it had been the sole and separate property of his wife, limited to himself at her death ; exhthitmg the conveyance under which she held, and alleging the death of his wife on the tw enty-third of July, 1876, at which time, he says, all his right accrued. Also, that, before that time, he had been adjudged a bankrupt on the twenty-eighth of June, 1876, and had received his discharge on the eleventh of October following. To this answer a general demurrer was sustained, and defendant failed to answer further. The court proceeded, upon the bill and exhibits, to ren-- der the usual decree of foreclosure: without any personal decree against defendant for any balance. The lands were sold for an amount less than the debt, and purchased by complainant. Defendant appealed. OPINION. 7 Mortgage : Renewing note is not payment: The demurrer to the complaint, so far as Ciliphint was concerned, was properly overruled. As between parties. renewal is not payment ; and in the absence of some agreement, or plain manifestation of a contrary intention, the securities remain intact. Equities of innocent parties, who become subsequent incumbrancers, under the bona fide belief that the first debt was discharged are not here concerned. 2. Mortgageable estates_ The demurrer to the answer should not have been sustained: It showed no defense against the foreclosure, for it has long been too well settled for argument. that, in equity, not only vested remainders, but contingent future interests may be conveyed or mortgaged. But the discharge was a good answer to the complaint, so far as it claimed a personal decree,
72 SUPREME COURT OF ARKANSAS, L36 Ark, Oliphint v Fckerley_ The debt was released, although the interest in the security remained with the creditor for all the fruits it might yield: 3. Banki uptcy: Does not discharge liens. Specific liens are not divested by bankruptcy. The computation of the debt was necessary to ascertain its extent, but gave no right to a decree for payment to be enforced by execution, or any otherwise, against other property. The answer was good pro tanto, as a partial defense, and saved all from the sweeping effect of a general demurrer. Still, no harm ensued from the error, The decree was confined to the enforcement of the lien, and upon the whole record, is right: Let it be affirmed. SUPPLEMENTAL, OPINION ( on motion for reconsideration.) Appellant, on motion for a reconsideration of the opinion heretofore delivered, calls the attention of the court to the deed exhibited with his answer, by which he obtained all the interest he had in the land when it was mortgaged ; and from which, if it were properly before us, it would appear that the land had been conveyed to the wife of appellant in her own right, absolutely, with a condition that if it should not be sold by her, or in some way disposed of before her death, then the title should vest in appellant. He urges upon the court that, whilst a mere contingency mav be mortgaged, in equity, yet the lien does not actually attach until the contingency happens That in this case his discharge in bankruptcy intervened between the execution of the mortgage and the happening of the contingency upon which his interest vested: that it was, therefore, after-acquired property, and. free from his debts. We can not look to exhibits, made as evidence, in questions arising on demurrer. The answer does not make the
36 Ark ] NOVEMBER TERM, 1880, 73 Oliphint Eckerley: case of a contingent, but vested remainder, and although the demurrer was improperly sustained, yet the decree gives the defendant the benefit of every defense made by his answer. But upon principle and authority we would not hold the point good if there had been a hearing. After-acquired prop-ert y of a bankrupt. is discharged from liability for prior debts, and can not be taken in execution for them ; but this does not apply to mortgages of contingent interests made on valuable consideiation, any more than to mortgages of vested interests, The theory upon which these mortgages are sustained upon property to be afterwards acquired, or afterwards coming into existence, is that the equity for a lien attaches co instanti when the property vests or comes into existence, and the right to this prospective equity is a sort of equitable property, which, if given upon valuable consideration, is not revocable—making a specific lien in equity as effectually as if created at law, It is evident that upon its vesting, or coming into existence, subsequently to the discharge in bankruptcy of the grantor, the property comes with the lien, and is onl y vested sub modo the discharged 'bankrupt He gets the property with the lien upon it, and it is that interest which he gets, that is freed from all debts that might have been proved in the bankrupt proceedings, Overrule the motion for reconsideration. EAKIN, J.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.