Case ID: law-times-ns_1/html/0279-01.html
Source: Caselaw Access Project
Author: {"author": "TRüsíkey, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Supreme Court, Pennsylvania.
    
    LAHR'S APPEAL.
    B. executed and deliveied in 1871 to a Building Association a mortgage upon his real estate; the mortgage was never recorded. In 1874, 5 and 6 numerous judgments were entered against B. Subsequently in 1876 judgment was entered on the bond accompanying the mortgage, under which the premises were sold. Held, that in the distribution of the fund the unrecorded mortgage of the building association can take nothing as against these liens in point of law, nor is it entitled to any preference in equity. If it is, it must be by bringing home to these several plaintiffs actual notice of the existence of this unrecorded mortgage, not only before their respective liens attached, but before the debts upon which they are founded were contracted by B.
    Rights and disabilities of married women ; respective rights of property of husband and wife.
    An honest judgment voluntarily given by a husband to secure a debt owing to the wife is good in law; for the prevention of fraud clear and satisfactory proof of a wife’s claim against her husband is exacted in a degree not required of others, but when established she is entitled as another would be.
    Appeal from Court of Common Pleas of Northumber-land county.
    This is an appeal of Elias Lahr, Trustee of Harriet Burns, from the decree of the court confirming the report of the auditor appointed by said court, to distribute the fund in' court arising from the sale of the real estate sold by the sheriff as the property of Andrew Burns. The following is a history of the case:
    On the 18th day of February, .1871, Andrew Burns purchased a oertain lot of ground from S. W. Murray et al. The deed was acknowledged on the same day. On the 23d day of February, 1871, Andrew Burns and Harriet his wife, by assignment on the back of this deed, duly acknowledged, assigned all their interest to the lot of ground described in the deed aforesaid to “The Mutual Building and Saving Fund Association of Milton.” The deed and assignment were duly recorded in the proper office on the 25th of February, 1871.
    On the 23d day of February, 1871, being the day the assignment was made to “The Mutual Building and Saving Fund Association of Milton,” the said Association executed through their President and Secretary, under the seal of the Association, a separate defeasance, declaring that the lot of ground mentioned in the deed aforesaid was held as collateral security for a loan of $800 to said Andrew Burns, and that upon the repayment of the sum of $800 loaned to said Burns, the said Association agreed to re-convey to said Burns. The defeasance was not recorded.
    
    On the same day the assignment of the deed was made to the Association, to wit, February 23, 1871, Andrew Burns executed a bond with warrant of attorney to enter judgment. No judgment was entered until the 13th of October, 1876.
    The following judgments were entered upon record after the date of the deed from S. W. Murray et al. to Andrew Burns, and are held by the following plaintiffs, viz:
    Levi Truckenmiller, now for the use of Elias Lahr, v. Andrew Burns. No. 1207 Aug. Term, 1874. Debt, $73.60. Entered August 3, 1874.
    Levi Truckenmiller, now for the use of Elias Lahr, vs. Andrew Burns. No. 1208 August Term, 1874. Debt, $131.21. Entered August 3, 1874.
    Israel Carl, now for the use of Elias Lahr, vs. Andrew Burns. No. 395 March Term, 1876. Debt, 23.08.
    Elias Lahr,in trust for Harriet Burns,vs. Andrew Burns. No. 516 March .Term, 1876. Debt, $498. Entered March 8th, 1875.
    "Wm. Burns vs, Andrew Burns. No. 10 June Term, 1876. Debt, $175. Entered March 13, 1876.
    Wm. B. Kemerer vs. Andrew Burns, No. 490 March Term, 1876. Entered April 18,1876.
    The Mutual Building and Saving Fund Association -of Milton vs. Andrew Burns. No. 379 Nov. Term, 1876. Beal debt, $800. Entered Oct. 13, 1876.
    Albert Cadwallader, assignee -of Thomas Artley, vs. Andrew Burns. No. 84 January Term, 1877. Debt, $32.71. Entered Dec. 2, .1876.
    The Mutual Building and Saving Fund Association of Milton, issued a writ offi. fa. on the 9th of October, 1876, entered to No. 164 November Term, 1876. In the praecipe the Sheriff was directed to levy upon the house and lot of ground belonging to Andrew Burns. The Sheriff did levy the house and lot of ground and advertised it and sold the same to the Association for $50. This sale was set aside because there was no waiver of inquisition.
    On the 17 th of November, 1876, an alias fi. fa. was issued to No. 12 January Term, 1877, by “The Mutual Building and Saving Fund Association of Milton” on their judgment. The Sheriff made a levy on the samé property again. An inquisition was held and the real estate levied upon condemned. These proceedings were also set aside on the gi ound that the judgment upon which the writ issued was a conditional one, and that there was not a suggestion filed by the plaintiffs or their attorney, that default had been made by the defendant, &c.
    On the 22d day of January, 1877, a pluries writ of fi. fa. was issued by said Association. The same lot of ground was again levied upon and condemned.
    On the 8th of May, 1877, a venditioni exponas was issued on the Association judgment, the property sold to “The Mutual Building and Saving Fund Association of Milton,”, for $750, the said Association refused to comply with the conditions oí sale', and the Sheriff returned the property unsold.
    On the 10th of July, 1877, an alias writ of venditioni ex-ponas issued on the judgment of the Association. At this sale Elias Lahr became the purchaser at the price or sum of $650. lie was the owner at the time of the sale of all the judgments entered prior to that in which he was trustee for Mrs. Burns. The Sheriff made a special return -at the instance of Elias Lahr, the purchaser. From that return it appeared that the Sheriff retained the following costs: Attorney $4.25, Orier .15, Prothonotary $8.65, and $21.45 costs of sale, and $10 on account of.former Sheriff’s costs, amounting in aggregate to the sum-of $44.50. That sum was paid to the Sheriff by the purchaser. The balance of the purchase money was claimed by the purchaser as being the first lien creditor on the following judgments, viz., Nos. 1207 and 1208 August Term, 1874, and Nos. 395 and 516 March Term, 1876. The fund was referred to an auditor to make distribution, who distributed the fund as follows: to judgments Eos. 1207 and 1208 August Term, 1874, and Eos. 395, debt, interest and costs, and480 March Term, 1876, debt and interest, leaving a balance of $8.81. which was decreed to the Mutual Building and Saving Fund Association to apply upon the mortgage.
    Upon the question of costs, the auditor said: “* * it is conceded that * * $44.50 ought to be allowed. * * The balance of the costs, to wit,$56.60, which are objected to, on advertising former sales of this same property by the Sheriff, no sale having taken place. One sale was set aside by the court, at the instance of the defendant, on account of informality in putting up notices in time upon the premises. Eo decree was made by the court as to these costs. The second sale was set aside, by consent, for informality, without a decree as to the costs by the court. Under these circumstances, upon the authority of Hess & Robbins vs. Gallagher, 5 Luz. Legal Register, 104, and the cases cited upon argument in the notes of testimony, your auditor is of opinion that the Sheriffs costs should be allowed in full. And they are so allowed. As the case now stands these costs will go to the plaintiff in the ven. ex. if not allowed to the Sheriff, the plaintiff’s counsel insists that they should be allowed in that way.”
    Exceptions filed to this report were overruled and the report confirmed, wheyeupon this appeal was taken, and the following assignments of error filed. The court below erred:
    1. In not sustaining the exceptions filed to the report of the auditor by Elias Lahr, trustee for Harriet Burns.
    2. In ruling that the auditor was right in postponing the judgment of Elias Lahr, trustee, to the mortgage of the Mutual Building and Saving Fund Association of Milton.
    8. In awarding any portion of the money to the judgment of William B. Kemerer, and in excluding the judgment of Elias Lahr, trustee for Harriet Burns.
    4. In allowing costs, other than the actual costs to effect the sale.
    
      June 25, 1879.
   Opinion by

TRüsíkey, J.

Speaking of the j udgments against Andrew Burns, the auditor says: “They are the first and only liens of record, and in point of law are entitled to the proceeds of sale. The unrecorded mortgage of the Building Association can take nothing as against these liens in point of law, nor is it entitled to any preference in equity. If it is, it must be by bringing home to these several plaintiffs actual notice of the existence of this unrecorded mortgage, not only before their respective liens attached; but before the debts upon which they are founded were contracted by Burns.” This principle, governing the distribution, has been uniformly held by the courts from Semple v. Burd, 7 S. & R. 286, to Corpman v. Baccastow, 8 Horris, 363.

In Britton’s Appeal, 9 Wright, 172, it was decided that a mortgage, executed before, but not recorded until after judgments had been entered against the mortgagor, is entitled to priority over them in the distribution, when the judgment creditors had actual knowledge of the mortgage before the debts were contracted for which their judgments were obtained. The tact of such knowledge was emphasized by Justice Strong. His reasoning places him who gives credit and takes judgment after notice of the mortgage on the footing of a purchaser with notice, and does not apply to one who gave credit without notice or knowledge. As respects the latter, the ruling of the auditor is a reflex of the professional understanding, as expressed in the phrase: “Such mortgage is good against a judgment creditor wi-h notice before his debt was contracted;” repeated as late as McLaughlin vs. Ihmsen, 35 Legal Intel! 5. Ho equitable principle demands postponement where the credit was given prior to the mortgage, or the creditor’s knowledge thereof. Then he stands as clear of wrong as an innocent purchaser, and his judgment, though entered after knowledge of the mortgage, will take as the first lien. The reason for postponement,where credit is given with notice or knowledge, is the same as applies to a purchaser under like circumstances, namely, that if he seeks to defeat the estate of the mortgagee he is guilty of fraud; but when the credit is given before, the element of fraud in contracting the debt is wanting.. It matters not that the creditor was present at the execution of the mortgage and was silent. That will not preclude his use of lawful remedies, nor give the mortgagee a superior equity. Creditors are equal in merit, and the law favors the vigilant. Where a debtor gives one a mortgage, and another, whose contract was prior, a judgment note, the latter, it first entered of record,, is the prior equitable as well as legal lien.

■Burns’s, wife joined in the mortgage and undoubtedly knew the contents of both its parts and of the accompanying bond. About five years'thereafter he gave a judgment note to Elias Lahr for her use. The auditor finds the consideration of that note was money she got from her father’s estate,- ten or eleven years ago, which she loaned to her husband, taking no security for it until this judgment was given. Hence, at the date of the mortgage, this debt had run a little over three years. To characterize it as a “stale debt,” “barred by the statute of limitations before the unrecorded mortgage was executed,” ill accords with the fact found, or the law. The statute of limitations does not begin to run against a married woman, on a loan to her husband, till his death: Towers vs. Hagner, 3 Wharton, 48; Kutz’s Appeal, 4 Wright, 90.

Over thirty years ago it was enacted that “all property, of whatever name or kind, which shall accrue to any married woman during coverture, by will, descent, deed of conveyance or otherwise, shall be owned, used and enjoyed by such married woman as her own separate property.” The husband is sometimes slow to. comprehend the full extent of this innovation on rights he formerly enjoyed; and • so are his creditors. The statute does not disturb the relation of husband and wife — a union of two persons — but to some extent upsets the theory that her legal existence is suspended during coverture, Their unity, his headship, his power and influence, over her, are facts, as distinctly recognized in the statutes as in the common law. Therefore, she cannot convey or encumber her property, save as authorized by statute; and very rarely, if at all, will her silence or acts in presence of her husband, operate as an estoppel. Hothing can be more natural than that she will lend her money to her husband, and that he will give her a security for it whenever he sees financial embarrassment approaching. Such loans and securities are sanctioned by numerous decisions. She has the same right to loan to him as to a stranger; it is as lawful for him to secure that loan as any other. Strangers may sue him and obtain judgment adversely, his wife cannot. The law* permits an insolvent debtor to give judgments to his creditors as he prefers. An honest judgment, voluntarily given by a husband to secure a debt owing to his wife, is* just in law, and he who denounces the act as wrong in morals must take a singular view of the promptings of affection and interest. Who could be more worthy his preference than she ? and for whom could he feel greater concern. Until the Legislature changes the law these loans will be made and securities given. Her property vests in her as her separate estate; and the husband’s is his separate estate. In view of their respective rights of property, why should her judgment be postponed to one who loaned him money,though he used it to improve his land? Were a stranger holding a j udgment in the place where Mrs.. Burns’s stands he would take the money. Iler’s is equally meritorious. Eorthe prevention of fraud, clear and satisfactory proof of a wife’s claim against her husband is exacted in a degree not required of others, hut when established she is entitled as another would be.

The Association claims the money raised by sale' of Burns’s land by virtue of the mortgage given to secure money he borrowed. It cannot tend to defeat the. judgment of Haniet Burns, to give a detailed description of the paits of the mortgage, one, in form, an absolute conveyance, the other a defeasance, when, if it be not a mere mortgage, for that reason, it cannot take a dollar' of the fund. The rights ahd disabilities of married women, except as secured or removed by statute, remain as at common law. We fail to discover in the facts found by the auditor, an act of Harriet Burns which estops her from demanding and receiving the moneyjlue on her judgment. To hold that anything she did is an equitable^estoppel, as between her and the mortgagee, would be to assert a principle most dangerous to the rights of married women, unsupported by reason or precedent.

As distribution was made the question of costs did not affect the appellant. Her judgment ought not to be prejudiced by costs accrued on a posterior'-lien whiehjwero unnecessary to sale: Fry’s, Appeal, 26 P. F. Smith, 82. Costs on writs set aside for cause or by consent, she not being in fault or a party consenting, can not be paid out of money belonging to her. Allowance of $44.50 is [said to be conceded, which sum seems to include a portion for which she is not liable.

Decree reversed, and it is now considered and decreed that $44.50 be paid on costs of writ as per auditor’s statement ; thatthe costs of audit, and respective amounts due on the thi’ee judgments, anterior to judgment No. 516 of March Term, 1876, Elias Lahr for use of Harriet Bums, be paid as per auditor’s report, and that the balance of the fund, $271.32, be appropriated to said judgment in favor of Elias Lahr for use of Harriet Burns. Costs of this appeal to be paid by appellees. — Intelligencer.

Mr. .Justice Mae Arthur, of the District Supreme Court, has a rich vein of humor running through his ordinary dignified demeanor. A lawyer was arguing before him recently one af the numerous cases of domestic infelicity, with which the present docket is burdened. Said the attorney, “Separating the apartments of my client and this lady was a curtain from ceiling to- floor; certainly there was nothing out of the way in that.” “No,” replied his honor, “ and not much in the way, either,”