Case ID: sc-eq_27/html/0343-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Per Curiam.\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

M'Lure, Brawley & Co., and others, vs. B. F. Wheeler.
    
    Where judgment is recovered on a note to secure the payment of which a mortgage of land had been given, the sheriff can sell under the^./u. no greater interest in the land than the equity of redemption.
    The purchase of the equity of redemption by the mortgagee extinguishes the mortgage debt, and the effect is the same whether the purchase be directly from the mortgagor, or from the sheriff under ají./a.
    The mortgagee who had taken certain notes from the mortgagor as oollatteral security, purchased at sheriff’s sale the equity of redemption: Held, that he thereby extinguished the mortgage debt, and was bound to account for the notes.
    
      Before Dunkin, Ch., at York, June, 1853.
    This case will be sufficiently understood from the circuit decree, which is as follows :
    Dunkik, Ch. This is a bill preferred by the judgment creditors of Elisha Jaggers, deceased. It seems that on 2d February, 1842, Jaggers purchased from the defendant a tract of land in York district, containing six hundred and forty acres, for three thousand three hundred dollars. The purchase money was to be paid in four successive annual instalments from March 1, 1842; for which Jaggers gave his four several promissory notes; and to secure the payment thereof, executed a mortgage of the premises. The first note of eight hundred and twenty-five dollars became due 1st March, 1843. At the time of the sale, the defendant had received from Jaggers a note on Thos. M’Lure for four hundred and sixty-one dollars, which was taken by him in part payment of the first note. On the 1st April, 1842, Jaggers also placed in defendant’s hands, as collateral security for the performance of his contract, certain notes of Harvey Jaggers for nine hundred dollars, not then due, and three notes of George W. Bell for three hundred and seventy-five dollars, also not then at maturity.
    On 11th March, 1843, the defendant took from Jaggers a confession of judgment for three hundred and sixty-one 31-100 dollars, being the balance due on the first note. He caused a levy to be made on a negro of Jaggers’s on I8th July following, which was sold, and the proceeds of. sale, to wit, two hundred and fifty dollars, were applied in payment of the execution.
    On 20th October, 1843, Jaggers died, intestate, leaving a widow and children. On 20th November, 1843, the defendant took out letters of administration on the estate, and on the 8th December, the personalty was sold by him for one hundred and eighty-two dollars twenty-five cents. Two days before this sale, the defendant caused his execution to be levied on the land. A sale was accordingly made by the sheriff on the 1st January, 1844, and the defendant became the purchaser at nine hundred dollars.
    Many observations were submitted at the hearing as to the very prompt manner in which the defendant had enforced his demands against the estate of this intestate ; and in the view which the defendant’s counsel takes of the effect of the sheriff’s sale, it might be necessary to enter into a very close inquiry of the amount then due to the defendant, and of other antecedent and accompanying circumstances. But in the judgment of the Court this inquiry may well be pretermitted.
    After the decisions in ex -parte City Sheriff, 1 M’C. 399, and M’Clure vs. Mounce, 2 M’C. 423, it would seem superfluous to raise a question as to the effect of the sheriff’s sale. It is precisely the same whether the mortgagee became the purchaser or a third person. The thing sold, that on which alone the sheriff had any authority to levy the execution, was the mortgagor’s equity of redemption.
    The proceeds of sale are payable not to the mortgagee,- qua mortgagee, but to the eldest judgment creditor, or to the mortgagor himself after satisfaction of such judgments. In this case, it appears that the money was paid to the sheriff, the execution of defendant was satisfied, and about eight hundred and forty dollars, the surplus, was paid to the defendant. Some evidence was relied on to shew that the entire premises, and not merely the equity of redemption was sold. But the answer to this is anticipated by the judgment of the Court in M’Clure vs. Mounce. Besides, whatever may have been the impression of the defendant, the price at which it was knocked down and on a credit sale, would lead to the conclusion that this impression was not very general.
    As has been intimated, it makes no difference whether the mortgagee is the purchaser at sheriff’s sale or a stranger; and this furnishes a solution to the only remaining inquiry. Purchasing the equity of redemption, a stranger would take the land subject to the obligation to discharge the incumbrance. That was the condition of the defendant on 1st January, 1844. It was ruled in Schnell vs. Schroder, Bail. Eq. 334, (and the doctrine has been since repeatedly recognized) that a purchase of the equity of redemption by the mortgagee extinguishes the mortgage debt; and that the effect was the same, whether the purchase was directly from the mortgagor or from the sheriff under an execution against him. Whatever amount remained unpaid on the mortgage debt on 1st January, 1844, was then extinguished and satisfied. The sum of nine hundred dollars, as well as all collateral securities, such as the notes of Harvey Jaggers and George W. Bell, as well as the sales of the personalty (which became due in September or October, 1844,) were assets in the hands of the defendant as administrator, and applicable to the payment of other creditors of the intestate. It is stated that Harvey Jaggers was insolvent; of course the defendant will be at liberty to make proof on this subject.
    It is ordered and decreed, that the defendant account for his administration of the estate of Elisha Jaggers, deceased, upon the principles of this decree, and that it be referred to the Commissioner to state such account. It is further ordered and decreed, that the Commissioner cause to be published once a month, in York and Chester, a notice to the creditors of Elisha Jaggers, deceased, to establish their' demands before him prior to the first day of April next, and that the Commissioner report thereon, as well as on the accounts of the administrator, and that he -file his report at least three weeks prior to the next meeting of this Court for York district.
    The defendant appealed on the grounds:
    1. Because it is submitted that the purchase of the equity of redemption by the defendant, under the circumstances could not operate as an extinguishment of the mortgage debt.
    2. Because it was held that nothing but the equity of redemption could be sold ; when it is submitted that the defendant had the right, and did sell the whole interest in the land.
    3. Because even if the purchase by the defendant amounted to an extinguishment of the mortgage debt, the defendant would only be liable for the balance of the sale after satisfying the execution under which the sale was made.
    4. Because it is unnecessary to obtain an order of foreclosure when there is no intermediate jndgment between the mortgage and the judgment on the mortgage debt.
    5. Because the defendant had the right to the proceeds of the sale under the executor’s Act.
    6. Because if the purchase of the equity of redemption by the mortgagee extinguished the mortgage debt, the defendant was entitled to the proceeds of said sale — his being the oldest execution against the intestate.
    7. Because the complainants, if entitled to any thing, were only entitled to redeem the land by paying up the mortgage debt, or to have the land re-sold for that purpose.
    8. Because the defendant is not liable to account for the personal estate of Elisha Jaggers, the same having been applied to his judgment before the sale of the land.
    9. Because all the complainants, except the minors, were barred by the statute of limitations.
    10. Because if the purchase by the mortgagee did operate as a satisfaction of the mortgage debt, and he is bound to account for the purchase money, yet he ought not to account for the Bell & Jaggers notes.
    
      11. Because if the purchase operated as a satisfaction of the debt, the defendant would be entitled to the proceeds of sale.
    
      Witherspoon, for appellant.
    
      Melton Sp Eaves, contra.
   Per Curiam.

We do not differ from the Chancellor in this case. It is, therefore, ordered that the decree be affirmed, and the appeal dismissed.

Johnston, Dunkin, Dargan and Wardlaw, CC., concurring.

Appeal dismissed.