Carroll v. Batson, 196 N.C. 168 (1928)

Oct. 17, 1928 · Supreme Court of North Carolina

196 N.C. 168

W. H. CARROLL v. LEVY BATSON et al.

(Filed 17 October, 1928.)

1. Deeds and Conveyances — Timber Deeds — Construction and Operation— Mortgages.

Where a grantor of lands reserves the right to timber thereon for a period of five years with.the right of renewal thereof at expiration upon payment of a stipulated amount, and then sells the timber reserved according to this agreement; and the grantee of the lands mortgages the same, and the mortgagees foreclosed: Held,, the purchaser at the foreclosure sale acquires title •to the land, and to the timber thereon subject to the timber deefl,, and when no tender of the stipulated amount for renewal is made before the expiration of the five years he may enjoin further cutting of timber by the grantee in the timber deed.

2. Trial — Talcing Case or Question from the Jury — Nonsuit.

Where the evidence is conflicting as to whether the price for an extension of time for the cutting and removing timber from lands under the provisions of a timber deed has been tendered and issue is raised for the determination of the jury, a motion as of nonsuit thereon will be denied.

Civil action, before Harris, J., at March Term, 1928, of Sampson.

The evidence tended to show that on 13 January, 1920, Ben W. Southerland and wife conveyed to I. L. Tilton and wife by deed recorded 16 January, 1920, 303 acres of land. Said deed contained the following reservations: “The party of the first part reserves the right to all timber eight inches in diameter and up on the above tract for a period of five years from date, with the privilege of extending said right three years by paying said party of the second part “$100 per year.” Tilton and wife executed and delivered to Southerland a mortgage deed upon the land of even date and duly recorded, securing four purchase-money notes of $1,750 each. The mortgage deed made no reference to the timber reserved in the deed. On 12 October, 1923, Southerland and wife conveyed the timber upon said land to defendants, Batson and'Hopkins. The timber deed to Batson and Hopkins referred to the deed to Tilton for the land and the reservations therein, and further recited1:’"'“It'is understood that the said parties of the second part are to hake" "five years to remove said timber,” etc. Batson and Hopkins executed "a mortgage deed to Southerland to secure the purchase money. • The defendant Dennis bought the interest of Hopkins in the timber! "" "Southerland" transferred the Tilton notes to the Atlantic Bank1 and Trust Coxhpany. On 13 November, 1923, the Atlantic Bank and Trust Cbmpkny: instituted a foreclosure suit against Southerland and Tilton and "Wife.1 Tn'thé foreclosure suit it was adjudged “that the equity bf redemption; of'ááid defendants in and to the land described above be, and the‘shine is bebeby foreclosed and barred, and said lands are hereby "condemned to be sól'd and the proceeds thereof applied in payment upon'thó:Tndébfédhes¡i!!ó!f defendant.” It was further adjudged that-'Wt'R: ’Allen be appoihtéd commissioner" of the court and directed to sell the land' ón" 18 ■ February, 1924, pursuant to the judgment, which sale was made on 21- November", 1924. Allen, commissioner, executed and delivered " to-- the"- plaintiff, Carroll, a deed for the land formerly owned "by Tilton. "The commissioner’s deed recites that Ben' W. Southerland became the; last and highest bidder for the land and that the salel'was-confirmed’. But it further appears that since confirmation Southerland with the approval of the court transferred his bid.to Carroll, and the court directed the" commissioner to execute-and deliver the deed-for said landi-toi-CarrolL .-It would therefore seem that Southerland was. not considered by the court as the purchaser of the land, but that Carroll, the plaintiff, was the actual purchaser. An injunction restraining the defendants from -cutting timber on the land had been issued and continued to .the hearing. The plaintiff contended that the extension money had not been tendered to him for the privilege of cutting on or before .13 January, 1925. The defendants offered evidence to the contrary. At the close of .the evidence the defendants moved for judgment as of nonsuit and for dissolving the restraining order.

The trial judge decreed: “It is thereupon considered, ordered and adjudged that the plaintiff take nothing by his said action; that the defendants, Batson and Dennis, are the owners of the timber described in the pleadings herein and have the right to renew the same at any time until 1 February, 1931, same being the time granted to them after allowing the time which has elapsed during the" péndency of this action when they were prevented from exercising said right!” It was further adjudged that the injunction be dissolved and the plaintiff taxed with the cost.

From said judgment the plaintiff appealed.

Faircloth & Fisher for plaintiff.

Richard L. Herring and R. D. Johnson for defendants.

BbogdeN, J.

What interest does the grantee of land have in timber reserved therefrom in the deed of the grantor ?

This question was considered by the Court in Mining Co. v. Cotton Mills, 143 N. C., 307, 55 S. E., 700. The law is thus stated whore the, land was conveyed in fee with an exception or reservation of the timber: “In such case, if a time or event is specified upon which the timber must be cut, the reservation expires upon the happening of the. event or expiration of the time. . . . Whether the right to cut timber is a grant, or a reservation, it expires at the time specified. When no time is specified a grantee of such right takes upon the implied agreement to cut and remove within a reasonable time. He has bought the timber for that purpose, whereas when a grantor of the fee reserves or excepts the timber, he is not providing for timber-cutting, but reserving a right, and should be entitled to hold till this is put an end to by the grantee giving notice for a reasonable time so that the grantor may elect to cut or sell this right to another.”

Again in Hornthal v. Howcott, 154 N. C., 228, 70 S. E., 171, the owner of the land sold the timber with the right to cut and remove the same within four years. Thereafter he sold the land by deed reciting the reservation of the timber. It was held that the grantee of the land was the owner of all the timber not cut within the time stipulated. It has been further held that notice that an extension privilege would be exercised must be- given to the grantee of the land. Bateman v. Lumber Co., 154 N. C., 248, 70 S. E., 474; Kelly v. Lumber Co., 157 N. C., 175, 72 S. E., 957; Powell v. Lumber Co., 163 N. C., 36, 79 S. E., 272.

In Shannonhouse v. McMullan, 168 N. C., 239, 84 S. E., 259, the Court said: “Applying these principles, if the timber should not be cut in five years it' would, then belong absolutely to the defendants as purchasers of-the land, and they could cut it when they wished to do so. In other words, when the defendants bought the land they also bought the right to extend the time for cutting, and the latter was merged in the title to the land, and therefore no interest can become due.”

It is clear, therefore that, under the decisions applicable, Tilton as purchaser of the land from Southerland acquired title to all the timber reserved by the grantor Southerland at the expiration of the reservation contained in the deed. In other words, at the expiration of the reservation .the timber followed the land and became a part thereof. Hence the timber deed to Batson and Hopkins could not enlarge the right of the grantor Southerland to the reserved timber nor impair the interest of Tilton, tbe owner of tbe land. Tbe execution and delivery of tbe pur-ebase-money mortgage on tbe land by Tilton to Southerland did not bave tbe effect of enlarging tbe right of Southerland or bis interest in tbe timber. “Tbe legal title to property, whether real or personal, conveyed by a mortgage deed, passes to and vests in tbe mortgagee, who bolds tbe same, however, only for purposes of security. Tbe equitable or beneficial title remains in tbe mortgagor, who, as to all persons except tbe mortgagee, is considered tbe true owner of tbe property. With respect to tbe property conveyed to him as security, tbe mortgagee has such rights only as are required for tbe protection of bis security, and it is for this reason that be is considered as tbe bolder of tbe legal title.” Bank v. Lumber Co., 193 N. C., 757, 138 S. E., 125.

Under tbe foreclosure proceeding and the deed from Allen, commissioner, pursuant thereto, Carroll, tbe plaintiff, became tbe purchaser of tbe land. Tbe manifest effect of tbe foreclosure proceeding was to divest Tilton of title to tbe land by barring and destroying bis equity of redemption. Tbe plaintiff, Carroll, as purchaser of tbe land at tbe foreclosure sale, succeeded to tbe right of Tilton. As heretofore pointed out, Tilton was entitled to .all timber not cut within five years or during tbe extension privilege specified in tbe deed from Southerland to him. Tbe deed provided that .the extension privilege was dependent upon payment to Tilton of tbe sum of “$100 per year.” Carroll, tbe purchaser of tbe land at tbe sale, testified that no extension money bad been tendered or paid to him on or before 13 January, 1925, when tbe original five-year reservation period expired. Tbe defendants offered evidence to tbe contrary. Therefore an issue of fact is sharply drawn and such issue must be determined by a jury.

Reversed.