Case ID: nj-eq_6/html/0031-01.html
Source: Caselaw Access Project
Author: {"author": "The Chancellor.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

WILLIAM WINTERS v. PETER D. HENDERSON ET AL.
    1. When a mortgagor, after giving the mortgage, sells to a third person a part of the mortgaged premises, the part remaining in the mortgagor should, in a decree for sale, be directed to be sold first.
    
      ‘¿. On a foreclosure bill in such a case, a decree was taken in the general form for the sale of so much of the mortgaged premises as would be sufficient ‘o pay the debt, and a fi.fa. was issued to the sheriff, commanding him, in the terms of the decree, to make sale.
    3. On the petition of one of the defendants, a purchaser from the mortgagor of a part of the premises, and the facts therein stated, an injunction was allowed, restraining the sheriff from selling the part which had been conveyed to this defendant until the further order of the qourt; and it was subsequently directed that the part remaining in the mortgagor should be first sold.
    On the 3d December, 1824, John Winters gave to Joanna J. bhawger a mortgage on four lots separately described in the mortgage. On the 8th August, 1827, the mortgage was assigned by the mortgagee to William Winters, the complainant. On the same 8th August, 1827, the tract first described in the mortgage was conveyed to Peter D. Henderson. On the 24th September, 1830, the administrator of the mortgagor conveyed the three other tracts described in the mortgage to J. J. Shawger, the original mortgagee, who had previously assigned the mortgage as aforesaid. John Smith and Richard li. Smith are in possession of the said three tracts, claiming title under deeds from J. J. Shawger and the heirs-at-law of the mortgagor.
    The bill was filed June 19th, 1845, by William Winters, for the foreclosure of the mortgage and sale of the mortgaged premises, against Henderson and his wife, and the Smiths and their wives.
    The Smiths filed a demurrer to the bill, Henderson and wife fid led to appear, and a decree pro eon. was entered against him on the 18th September, 1845. The demurrer of the Smiths was overruled December 16th, 1845. They neglected to answer ; and in March, 1846, without any order of reference to a master, for the purpose of getting a report iiow the property should be sold, a final decree was taken against all the defendants, in the general form, for the sale of so much of the mortgaged premises mentioned in the bill as would be sufficient to satisfy the mortgage; and a ji. fa. was issued to the sheriff, commanding him to make sale.
    On the 29th August, 1846, Henderson filed his petition, stating that, immediately after the service of the subpoena on him, he, being ignorant of the character of the process and of his duty under it, and believing it to be necessary for him personally to appear at Trenton, to answer the command thereof, and residing in a thinly-settled part of the county of Morris, made preparations to go to Trenton, according to the command of the process. That on his way to Trenton, passing through the village of Roekaway, in Morris county, he applied to L. A. Chandler, Esq., a solicitor of this court, and showed him the copy of the subpoena, and told him he was on his way to Trenton to answer the same. That he had been in the habit of advising with said Chandler in legal matters, and relied on him for such directions as were necessary to defend the suit. That Chandler told him it was unnecessary for him to go to Trenton at all to answer the subpoena. That relying on this information, and being unacquainted with proceedings in chancery, and unable to read or write, and being ignorant of any such mortgage, he desisted from going to Trenton, and went home, and laid the subpoena by, believing it was unnecessary for him to take any steps to answer it; and that, if it was necessary for anything to be done by him, the said Chandler would inform him. That he frequently saw Chandler afterwards, but that he did not, nor did any other person inform the petitioner that it was necessary for him to defend the suit in any way; nor did he know, suppose or believe it was necessary to do so till after he heard that the land was advertised for sale by the sheriff. The petitioner then states, that the sealed bill, to secure which the mortgage was given, was paid by John Winters, in his lifetime, to J. J. Shawger, in her lifetime, before the mortgage was assigned to William Winters; and that the sealed bill remained in the possession of one John Hardy, administrator, &e., of J. J. Shawger, till a very short time before the bill was filed, and was never assigned by the said Hardy to the complainant. The petition then states the proceedings had in the cause; that under the Ji. fa. the sheriff had advertised all the lands mentioned in the bill for sale on the 31st August,’ 1846, and when applied to by the solicitor of the petitioner, said he expected to sell the land so conveyed to the petitioner, as set out in the bill, first, to raise and satisfy the amount due on the said execution ; that when he, the petitioner, purchased the said first-described tract, on the 8th August, 1827, $200, the consideration mentioned in his deed from the said John Winters and his wife, the mortgagors, was a full and fair price for the said first-described tract; and that the said John Winters and wife conveyed the same to him in fee simple; Winters warranting in the deed that it was free from encumbrance, and that be would warrant the same to the petitioner against all persons whatever, free from all manner of encumbrance; and that the said deed to the petitioner was recorded July 1st, 1828. The petition states that the proceedings and decrees in the said foreclosure suit were a surprise upon him ; and insists that the final decree is irregular, inasmuch as it appears, by the complainant’s bill, that the conveyance of the three last-mentioned tracts was subsequent to the conveyance of the first tract to the petitioner, and that said three tracts are liable to be first sold to pay the mortgage; that he gave a note with security for the $200, the consideration for the tract bought by him, which note was after-wards paid, under the firm belief that the tract so bought by him was free from all encumbrance.
    The petitioner prays that the decree may be set aside or opened, and the petitioner be permitted to answer the bill, or that a reference may be ordered, to ascertain the priority of the conveyances, and whether the mortgaged premises can be sold in parcels, and that the decree may be so amended as to order ihe parts of the mortgaged premises not belonging to the petitioners to be first sold. The petition was sworn to in the usual form, the petitioner subscribing it by his mark.
    A copy of this petition, and of a notice of the motion to the court, were served on the solicitor of the complainant and on the solicitor of the Smiths.
    On reading the foregoing petition, and a further petition stating the service of a copy thereof, and of the said notice as aforesaid, and that the complainant’s solicitor and the sheriff threatened, notwithstanding, to proceed to sell the lands of the petitioner, and praying an order staying the sale till the further order of the court, an order was made staying the sale.
    
      P. D. Vroom moved to open the decree, and cited 7 Paige 609.
    
      JS. W. Whelpley, on behalf of the complainant, cited 2 Green Ch. B. 461.
    He read an affidavit made by Richard R. Smith, stating that, before the time for answering had expired, he, for himself anti wife, and in behalf and by authority of John Smith and wife, in order to save the costs of putting in an answer, as they otherwise would have done and intended to do in case the arrangement had not been made, arranged and agreed with the complainant’s solicitor, that no answer should be put in by the Smiths, provided that part of the mortgaged premises which was in Henderson’s possession should be first sold, which arrangement was entered into between him'and the complainant’s solicitor; that, at the lime of the said arrangement, he believed that those parts of the premises claimed by and then in the possession of the Smiths were not liable to the payment of the mortgage debt, by reason of the said mortgage having been paid off; and considered and believed that if Henderson did not and would not resist the suit, the part of the premises claimed by him, and in his possession, ought to be first sold, and would be sufficient to pay the decree and costs; that if the decree be opened, he believes that they, the Smiths, can satisfy the court that the mortgage had been paid off long before the filing of the bill; that if the Smiths should, unexpectedly, fail in the making such proof, the deponent verily believes that, on a reference to a master as to priorities, the said Smiths can establish by proof that, as between them and Henderson, the part in Henderson’s possession should be first sold to pay the mortgage.
    Mr. Whelpley said that he made no bargain or arrangement’ with the Smiths; that their solicitor said to him that Henderson had agre'ed to pay the mortgage, and that the jumper course was to sell Henderson’s part first. The contest was between the defendants, and he, Mr. W., was not bound to settle the difference between them. All Henderson is entitled to is to have it referred to a master, to report how the property should be sold. If he is not right in this, yet the court should not open the decree except on payment of costs ; and Henderson should be confined to the case he makes by his petition, that is, that the mortgage has been paid off. He should not have leave to make any other defence.
    
      Mr. Vroom replied.
   The Chancellor.

If the debt secured by this mortgage is still subsisting, the lands last conveyed are liable to be first sold to pay it. So far, then, as relates to this mortgage debt, and the estate of the mortgagor, and the rights of Henderson as against that estate, the administrator of the mortgagor could only sell the three tracts, subject to the whole mortgage. These three tracts were in the hands of the purchaser from the mortgagor’s administrator, subject to the same equity in favor of Henderson that they were subject to in the hands of the mortgagor. I think Henderson is entitled to relief. Without putting the action of the court on his ignorance, but charging him with full knowledge of the mode of proceeding in a foreclosure suit, and allowing him full knowledge of his equities, as we must also do, lie had just grounds for relying that such course would be taken as to subject the three tracts last conveyed to be first sold; and it appears to me that on the facts stated in the bill and the decree as it stands, it would have been proper for the complainant's solicitor to direct the sheriff to sell those three tracts first. But it seems the Smiths now-make difficulty; and Henderson seems to have just ground to apprehend that his tract may be sold first. The question is as to the mode in which relief can be extended to Henderson. I say to Henderson, for I see no principle on which any relief can be extended to the Smiths. Indeed they have asked none. But if they had, the only relief they could have asked would have been the opening of the decree, and permitting them to answer and set up that the debt was paid. On what ground could they ask the court to open the decree ? They appeared and demurred to the bill, and after their demurrer was overruled failed to answer. Nay, they say they intended to answer, and would have done so and have set up that the mortgage was paid, if they had not thought they had made an arrangement with the complainant’s solicitor, .that Henderson’s tract should be sold first. Now the only defence that would have answered their purpose would have been that the mortgage had been paid ; and if they had so little confidence in that defence, or so little regard for the rights of Henderson, as, instead of answering, to take their chance of inducing the sheriff, or the complainant’s solicitor, to sell Henderson’s tract first, I do not see that the court ought, or that it can, on any recognized principle in regard to opening decrees, open this decree in their favor. I do not see that, at present, there is any need of inflicting, on either of the parties the expense of opening the decree, or of a reference. The bill states the facts sufficiently, and, as against the Smiths, it should stand as confessed. I see no objection to making an order on the sheriff to sell the three tracts last conveyed, first. There can be no doubt they will bring enough to pay the debt. If they should not, the matter may be again agitated, and the court will decide whether the decree shall be opened to let Henderson in to defend. If it be said, on the part of the Smiths, that the court should not interfere at all, unless it opens the decree and gives them an opportunity to defend, I do not think they stand in a position to ask that of the court.

Order accordingly.

Cited in Weatherby v. Slack, 1 C. E. Gr. 493.