Case ID: ohio_10/html/0071-01.html
Source: Caselaw Access Project
Author: {"author": "Hitchcock, J. Lane, C. J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*The Farmers Bank of Canton v. The Commercial Bank of Lake Erie.
    Lands mortgaged may be sold on judgment and execution against the mortgagor.
    This is a certiorari to the court of common pleas of the county of Cuyahoga.
    It brings into this court the proceedings in the court of common pleas, upon a motion to appropriate money, made on execution ; and the case is submitted, on an agreed state of facts, in substance as follows:
    The Farmers Bank of Canton, on August 12, 1837, recovered judgment, in the Supreme Court of Cuyahoga county, against Alanson Penfield, for $3,126.06, including costs, which was remanded to the court of common pleas for execution. Upon this judgment no execution was issued within one year succeeding its rendition and return to the court of common pleas, nor until after the recovery of a judgment by the Commercial Bank of Lake Erie, as hereinafter stated.
    On April 16, 1838, Alanson Penfield mortgaged a house and lot on St. Clair sti’cet, in Cleveland, with other property, to Peter Pen-field and Horace Penfield, to indemnify them against their liabilities as sureties for the said Alanson Penfield to the Commercial Bank of Lake Erie, on several notes, amounting in the whole to $11,000, which it is agreed is more than the whole value of the property mortgaged. Said Peter and Horace have not paid, nor have they been expressly relieved from any of said liabilities.
    'On July 1, 1839, the Commercial Bank of Lake Erie recovered judgment, in the court of common pleas of Cuyahoga county, against Alanson Penfield, for $4,388.36, including costs. Within one year after the date of this judgment, an execution was issued on the same, and also an execution on the judgment in favor of 72] the Farmers Bank of Canton. *Both these executions bear date and were delivered to the sheriff on the same day. They were both' levied on the house and lot on St. Clair street, which were offered for sale and bid off by the Commercial Bank for $2,076, being more than two-thirds the appraised value.
    On this state of facts, the court of common pleas decided that the Commercial Bank had the better lien, and ordered the money to be paid over accordingly.
    To reverse this order, this writ of certiorari is prosecuted.
    Harris & Brown, for the plaintiff:
    Alanson Penfield had no interest in the mortgaged premises upon which the judgment of the Commercial Bank could operate aB a lien, he having a mere equity of redemption, which could not be sold upon execution at law, but must be subjected to sale by proceeding in equity under section 16 of the chancery act. 29 Ohio L. 84. The judgment of the Farmers Bank of Canton operated as a lien upon the land, which is preferable to that created by the mortgage to P. and H. Penfield.
    S. J. Andrews, for the defendant,
    cited McCormick v. Alexander, Ohio Cond. 254; Earnfit v. Winans, Ib. 504; Shuel v. Ferguson, Id. 505 ; Waymire v. Staley, Id. 606 ; Thompson v. Atherton 6 Ohio, 30; Ely v. McGuire, 2 Ohio, 223; Phelps v. Butler, Id. 224; Baird v. Kirtland, 8 Ohio, 21 ; Jackson v. Willard, 4 Johns. 41; Stewart v. Waters, 1 Caine’s Cases, 47; Hitchcock v. Harrington, 6 Johns. 290.
   Hitchcock, J.

From the statement of the case, it will be seen that the lien of the judgment of the Farmers Bank of Canton had lost its preference as to any other bona fide judgment creditor, at the time the execution on that judgment was issued. But the lien of the Commercial Bank of Lake Erie was in full force, if at any time the judgment in its favor operated' as a lien upon the property sold. But it is insisted *by counsel for the plaintiff, [73 that this latter judgment did not operate at all as a lien, on account of the mortgage which had been executed previous to its rendition, and it is further insisted that mortgaged premises can not be sold on execution.

Admitting this principle, as a general rule, to be correct, it might be well questioned whether it would apply in this case. This mortgage was executed for the purpose of indemnifying the mortgagees against any liability which they might be subjected to in consequence of having become the securities of the mortgagor to the Commercial Bank. To it tlio bank was in no shape a party. The judgment recovered was upon one of the notes upon which the mortgagees were securities, and the sale of the property would go so far to release them from their liability. To the extent of the amount made, they would be absolutely released. The result of the argument of counsel is this: the mortgagees can not hold the property, because they are purchasers, and as to all purchasers the judgment of the Farmers Bank is still a lien. The Commercial Bank had no lien, because the property had been previously mortgaged. But the question, whether mortgaged premises can be sold on execution is not a new one in this state. If it were we might have some difficulty about it. In the cases of Ely v. McGuire, 2 Ohio, 223, and of Phelps v. Butler, 2 Ohio, 224, it was held, that where the mortgagor was in possession and the condition had not been forfeited, the land mortgaged might be sold on execution against the mortgagor. This is precisely the situation of the case before the court. The mortgagor was in possession, and the mortgagees had not sustained any loss in consequence of their liabilities. The same principle was recognized in the case of Baird v. Kirtland and others, 8 Ohio, 21. A majority of the court sitting in this case feel bound by these decisions.* Nor do we see'any evil which can result. The interest of mortgagees are not affected. And when it is considered that the land must be sold for two-thirds its appraised value, certainly a mortgagor has no reason to complain.

74] *Tlie order of the court of common pleas is affirmed, with costs.

Lane, C. J.,

being a stockholder in the Commercial Bank, did not sit in this case, and Grimke, J., dissented. ,

Judgment affirmed. 
      
      In Ohio, since the first organization of its government, the judgment of a court of record has operated as a lien upon the real estate of a judgment debtor. The earlier statutes creating and regulating this lien were found in some respects defective, especially during the pecuniary embarrassments which succeeded the late war. Beal estate could not be sold for less than two-thirds its appraisal. Debtors resisted payment, hoping that time would give additional value to their property. Creditors declined to accept payment in real estate, lest its value should still further diminish. No time was limited within which it was necessary for a plaintiff to sue out execution, or make a levy, in order to secure or enforce his lien. In these respects every one was permitted to consult his own interest or convenience. Judgment liens therefore accumulated; and senior judgment creditors, not choosing to take real estate in discharge of debts, which they deemed secure, often held the entire property of a judgment debtor beyond the reach of all other creditors.
      These inconveniences were sought to be removed by three successive acts of the legislature.
      The act of February 1, 1822 (2 Chase’s L. 1234): which provides “that in all cases where the party obtaining judgment shall .neglect, for the space of one year after the first day of the term, in which such judgment shall have been rendered, to sue out execution thereon, and cause the same' to be levied according to the provisions of this act, such judgment shall not operate as a lien upon the debtor’s estate to the prejudice of any other bona fide judgment creditor." . . . “ And in all cases where judgments have heretofore been rendered, and on which executions shall not have been taken out and levied prior to the taking effect of this act, it shall be lawful for the plaintiff in any such judgment to have execution thereon, and cause the same to be levied, according to the provisions of this act, at any time within six months next after the taking effect of this act; and after such levy, the judgment on which such execution issued, shall not operate as a lien on the residue of the debtor’s estate, to the prejudice of any other bona fide judgment creditor.”
      The act of February 4, 1824 (2 Chase’s L. 1297): which provides “that no judgment heretofore rendered, or which may be hereafter rendered, on which execution shall not have been taken out and levied before the expiration of one year next after the rendition of such judgment, shall operate as a lien on the estate of any debtor, to the prejudice of any other bona fide creditor.”
      The act of March 1, 1831, now in force (3 Chase’s L. 1709): which, in this respect, is a re-enactment of the statute just quoted, of February 4, 1824.
      The first case which arose under these statutes was that of McCormick v. Alexander, decided in 1825, in 2 Ohio, 65.
      There, in 1821, before any time had been limited by statute for the levy of executions, two judgments were rendered, one in March, in favor of Evans, and the other in the next July, in favor of McCormick. The junior judgment was levied six, and the elder twenty months, after their respective dates. In 1825, a sale was had on the elder judgment. In the meantime, the act of 1824 had taken effect.
      It was conceded that under the statute in force when Evans obtained his j udgment, his lien was perfect, and that if the property had been sold prior to the act of 1824, the proceeds would have been his. But as the act of 1824 repealed former statutes, and expressly took away the lien where no levy had been made within a year after the date of any judgment, it was held that Evans’ judgment had lost its priority; and McCormick took the money.
      The operation of this rule was deemed so severe, that an attempt was made to change it the next year, in Patton v. Sheriff of Pickaway County, 2 Ohio, 395, but without success; and in 1831, the legislature, by re-enactment of the provisions in the act of 1824, confirmed the construction given to it by the court, and so the rule has remained unchanged to the present time.
      A series of decisions has followed, which, with other rules laid down by this court, relative to the lien of judgments, may be ranged under four heads:
      I. As between judgment debtor and judgment creditor.
      
      II. As between judgment creditor and purchaser from a judgment debtor.
      
      III. Priority of lien among several judgment creditors.
      
      IV. Miscellaneous points.
      I. As between judgment debtor and judgment creditor.
      
      The duration of the lien in this case is perpetual. If the judgment becomes dormant, by lapse of time, the lien sleeps with it; and if the judgment be revived, the lien revives also, and so on, indefinitely. Norton v. Beaver, 5 Ohio, 178.
      
        II. As between judgment creditor and purchaser from a judgment debtor.
      
      If lands are sold, bona fide, before judgment, and the judgment debtor retains the legal title, he is merely a trustee for the purchaser, and a judgment against him is no lien on the lands. Manly v. Hunt, 1 Ohio, 257; Barr v. Hatch, 3 Ohio, 527.
      The lien relates to the first day of the term. Where, therefore, a term commenced on the 20th, and judgment was taken, during the term, on the 25th, and the defendant conveved his lands to a bona fide purchaser on the 21st of the same month, the judgment held the lands. Urbana Bank v. Baldwin, 3 Ohio, 65.
      While the lien exists, it binds the land into whatsoever hands it-may pass. But where no execution is issued for five years, or where five years elapsed between any two executions, so that the judgment becomes dormant, there a purchaser will hold the land. And it is no matter whether the purchase is made before or after the judgment becomes dormant. If the judgment creditor suffers the five years to elapse, and afterward revives, he has lost his lien as against any intermediate bona fide purchaser. Norton v. Beaver, 5 Ohio, 178.
      Where land is purchased from- a judgment debtor, the purchaser may in equity require the property of the debtor, or lands subsequently sold by him, to be first exhausted in satisfaction of the judgment. Ford v. Skinner, 7 Ohio, 148, pt. 2.
      Where lands lie in one county, and a judgment is rendered in another, and the lands are seized in execution, sold, sale confirmed and deed ordered; and afterward, but before the actual execution of the sheriff’s deed, a deed more than six months old from the judgment debtor to a stranger, and made before the levy of the execution, is placed on record, the purchaser on the execution has the better right. Scribner v. Lockwood, 9 Ohio, 184.
      Where a levy is made on goods and chattels sufficient to pay the debt, and during the levy, the judgment creditor sells his real estate to a bona fide purchaser, and afterward, by consent of parties, the goods and chattels are restored to the defendant, the purchaser holds the real estate discharged from the lien of the judgment. Ford v. Skinner, 7 Ohio, 148, pt. 2 — overruling the same case in 4 Ohio, 378. But a levy on real estate is not a satisfaction of the judgment. Reynolds v. Rogers, 5 Ohio, 169.
      A purchaser from an administrator under an order of court to sell for the payment of debts, holds the estate discharged of liens. Bank of Muskingum v. Carpenter, 7 Ohio, 21, pt. 1.
      Where a mortgage is defectively executed, a subsequent judgment against the mortgagor is not a lien upon the lands. Bank of Muskingum v. Carpenter, 7 Ohio, 21, pt. 1.
      A mortgage, executed after the term at which a judgment for the penalty of a bond is taken, but before the term at which the amount due in equity is ascertained, has the priority; and the lien of such judgment is only from the first day of the term at which the amount due in equity is ascertained; and then only for that amount. Tower v. Wells, 8 Ohio, 136.
      III. 'Priority oí lien among several judgment creditors.
      
      The cases under this head are embodied in these nine rules.
      1. That under the acts of 1824 and 1831, an elder judgment, not levied within a year after its date, loses its priority, as against a junior judgment, levied within a year; and this whether the judgments are before or after the passage of these acts. McCormick v. Alexander, 2 Ohio, 65; Waymire v. Staley, 3 Ohio, 366; Thompson v. Atherton, 6 Ohio, 30.
      2. That where an elder judgment is levied within a year, and after the year the levy is set aside at the instance of the plaintiff, a junior judgment, levied within its year, has a priority. Patton v. Sheriff of Pickaway County, 2 Ohio, 395.
      3. That a levy must be made on the properly in question, within a year after the judgment; and a levy on other property, though within the year, will not save the lien, as to property not levied on. Shuee v. Ferguson, 3 Ohio, 136.
      4. If there be several judgments, and no levy on either of them within the year, they stand on an equal footing, and he who afterward first levies, gains a priority. Shuee v. Ferguson, 3 Ohio, 136; Waymire v. Staley, 3 Ohio, 336; Sellers v. Corwin, 5 Ohio, 398.
      5. If an elder judgment be levied on.certain lands after its year, and a junior judgment be levied on the same lands within its year, but after the levy of the elder judgment, the junior judgment has a priority. Shuee v. Ferguson, 3 Ohio, 136.
      6. The lion of a junior judgment, on all property not levied on under an elder judgment within the year, continues one year after its date, to the exclusion of the elder judgment, provided the junior judgment was "rendered before the levy under the elder judgment; but a levy under the elder judgment, though after the year, if made before the date of the junior judgment, has a priority. Shuee v. Ferguson, 3 Ohio, 136.
      7. Where the court, in pursuance of the statute, order execution against a surety to be stayed, the lien upon his land is notwithstanding lost, unless a levy be made within the year. Earnfit v. Winans, 3 Ohio, 135.
      8. Where lands are sold under a judgment, and more than five years afterward the sale is set aside by consent of parties, the judgment thereby loses its lien, as against subsequent judgments. Lytle v. Cin. Man. Co., 4 Ohio, 459; ante, 59.
      9. Where an elder judgment is levied after the year and a sale made upon it, and afterward another sale of the same lands is made on a, junior judgment levied within its year, the title passes by the latter sale, although when the first said was made, the second sale had been set aside by an order of the common pleas, the order being afterward reversed by the supreme court. Walpole v. Inks, 9 Ohio, 142.
      IY. Miscellaneous points.
      A judgment does not bind an equitable interest in land. Roads v. Symmes, 1 Ohio, 281; Jackman v. Halleck, 1 Ohio, 318; Douglas v. Huston, 6 Ohio, 156; Scott v. Douglas, 7 Ohio, pt. 2; Baird v. Kirtland, 8 Ohio, 21.
      But whether the equity of a person in possession does not pass by a sale of his possessory right under execution so as to enable a purchaser to control it, is an open question. Scott v. Douglas, 7 Ohio, 227.
      The existence, validity, and extent of a judgment lien are matters purely legal, dependent on statutory provisions. If it fail at law, it can not be aided in equity. Mi. Ex. Co. v. Turpin, 3 Ohio, 514; Douglas v. Houston, 6 Ohio, 156.
      One in possession of lands has an interest which may be sold on execution, and the judgment debtor is not permitted to dispute the estate of him who chooses to take it. Phelps v. Butler, 2 Ohio, 224; Gray v. Tappan, Wright, 117; Biddle v. Bryan, 5 Ohio, 48; Scott v. Douglas, 7 Ohio, 227, pt. 1; Jackson v. Williams, ante, 69.
      The lien of a vendor for the purchase money has a preference over subsequent judgments, and all other later rights, except those of. a purchaser for a valuable consideration, without notice. Patterson v. Johnson, 7 Ohio, 226, pt. 1.
      Lands under mortgage may be sold upon a judgment against the mortgagor. Phelps v. Butler, 2 Ohio, 222; ante, 71.
      Judgments in the circuit court of the United States for the Ohio district are a lien upon all lands of the defendant within the state. Sellers v. Corwin, 5 Ohio, 398.
      A judgment is not a lien upon lands acquired after its rendition. Roads v. Symmes, 1 Ohio, 281; Phelps v. Butler, 2 Ohio, 224. But in such case, .the lien attaches from the date of the levy. Miller v. Murphy, 4 Ohio, 92. On a sci.fa. to charge lands on a justice’s judgment, no lien attaches till execution levied. Jackman v. Halleck, 1 Ohio, 318.
      A purchaser, under a judgment against the heir, acquires no right, as against a devisee, though the will be not recorded till after the sale, and the purchaser had no notice of it. Hall v. Ashby, 9 Ohio, 96.