Case ID: ohio-st_18/html/0376-01.html
Source: Caselaw Access Project
Author: {"author": "White, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Richard Dempsey v. Solomon W. Bush and others.
    1. A surety against whom and his principal judgment has been recovered, has the right, in equity, on paying the amount due on the judgment, to he subrogated to the rights of the judgment creditor in the judgment; and this right of the surety will not be defeated by the fact that there was no stipulation therefor by the surety at the time of making the payment, nor by the fact that he was at the time ignorant of the existence of such right.
    2. In an action to subject mortgaged land to sale, and to ascertain and marshal the liens thereon, a judgment creditor, who was properly made a party while his judgment was alive, will not lose his right to share in the distribution of the money arising from the sale, by the fact that his judgment became dormant pending the action.
    Appeal. Reserved in the district court of Ross county.
    Solomon W. Bush owned eighty-eight acres of land in Ross county in the year 1859 and subsequently, until it was sold by the sheriff, in the year 1866, as hereinafter stated.
    In November, 1859, the executors of William Ross obtained a judgment for three thousand four hundred and twenty-one dollars and forty-nine cents, in the court of common pleas of Ross county, against Solomon W. Bush as principal, and John Bush, Jacob Bush, and Aaron Stookoy, as sureties, upon a note executed by them on November 19, 1856, to William Ross, then living.
    In April, 1860, pursuant to an arrangement, Solomon W. Bush executed to Richard Dempsey a mortgage upon the eighty-eight acres of land to secure a note of four thousand dollars,.bearing ten per cent, interest, then past due; and *all the parties to the [877 Ross judgment agreed to allow the mortgage to stand as a lien prior to the judgment.
    On February 5, 1861, the executors of Ross sued out execution or their judgment, and on February 8, 1861, it was levied on the eighty-eight acres of land, and on lands of all the sureties, and thon .returned.
    On February 18, 1861, Solomon W. Bush executed to James Dean ' and Aaron Stookoy a further mortgage on the eighty-eight acres (which was then recorded) to secure: 1. James Dean from loss for having become his surety on a note to Milton Hegler for one thousand and eighty-four dollars, at ten per cent., made in May; 1855, and then past due; and, 2. Aaron Stookey against loss for having become his surety on a note to said Hegler for one thousand dollars, at ten per cent., made in August, 1856, and then past due. On February 11, 1863, Dean was compelled to pay to Hegler one thousand three hundred and forty-three dollars and nineteen cents, the amount of his said note; and on May 19,-1865, Stookey was compelled to pay to Hegler one thousand four hundred and ninety dollars and thirty cents, the amount of his said note.
    The judgment of Ross’ executors against Solomon W. Bush and sureties, being the next lien on the land after Dempsey’s mortgage, was afterward paid off by the sureties as follows : John Bush first paid, one-third of it about the year 1861, but claims nothing in this suit; Jacob Bush paid one-third, say on August 8, 1864; and Aaron Stookey paid the other third, say on May 19, 1865.
    On August 19,1865, Jacob Bush assigned his right and interest in the judgment, arising from his payment of the one-third, to Henry Stookey, a brother of Aaron.
    These two payments, made by Jacob Bush and Aaron Stookey, of one-third each, were made without being pressed by execution, but at the request of the executors, and in order to relieve their own lands, which they desired to sell, trom the lien of the judgment; and were made without any agreement between the executors and sureties, except that they were in full of the judgment; and without any intent on the part of the sureties either to assert 378] or to abandon any ^supposed right of subrogation to the original creditor’s judgment, and without any knowledge on their part of the existence of such right of subrogation, although intending to assert all their proper or general rights in the premises.
    On September 20, 1865, Dempsey brought the present suit, in the court of common pleas of Ross county, against Solomon W. Bush and wife, to foreclose his said moi-tgage, and made all subsequent lienholders defendants.
    On November 17,1865, Henry Stookey, assignee aforesaid, and Aar-on Stookey, filed their answers and cross-petitions in the action, admitting Dempsey’s priority, and sotting forth the two-thirds payment of the Ross judgment, and claiming the right in equity, by reason thereof, to be subrogated to all the rights, priorities, and liens, as hold by the executors under said judgment before payment, to the extent of the amount paid by each.
    On November 22,1865, the court found the amount due on Dempsey’s mortgage, and ordered the eighty-eight acres of land to be sold by the sheriff, out of the proceeds of which his mortgage was first to be paid, and the residue of the proceeds to be brought into court, to be distributed among the subsequent lienholders, according to priority.
    In January, 1866, the order of sale was issued to the sheriff.
    On February 16, 1866, James Doan, by consent, filed his answer, setting up his mortgage of February 18, 1861, and his payment of the one thousand three hundred and forty-three dollars and nineteen cents, and insisting on the priority thereof over said claims of Henry and Aaron Stookey for subrogation; and further setting up and claiming that the Ross judgment had become dormant, and its lien lost; no execution having been issued on it since February 5, 1861, and no revivor having been made.
    On February 24, 1866, the sheriff sold the eighty-eight acres of land at public sale for ten thousand and fifty dollars; and paying off, by consent, Dempsey’s claim and the taxes on the land, he brought the residue into court for distribution among- other -lien-holders.
    At the March term, 1866, the court referred the case to a master commissioner to report priorities of lien. The master *filed [379 his report, setting forth the facts as hereinbefore stated, and submitting to the court the legal questions as to whether James Dean and Aaron Stookey, under their mortgage, or Henry Stookey and Aaron Stookey, by right of subrogation, had the next lien on the lands after Dempsey and the taxes.
    At the June term, 1866, the court confirmed the master’s report, and adjudged that Henry and Aaaron Stookey, by reason of the payment of the Ross judgment, were not entitled to be subrogated to the position of the judgment creditors as to the lien on the land; and also adjudged that the lien of thgt judgment became dormant on February 5, 1866, and that Dean and Aaron Stookey, under their mortgage, had the next lien after Dempsey, and decreed accordingly.
    Henry and Aaron Stookey appealed from the decree of the common pleas, so far as it affected their rights, and the district court reserved the questions thus presented to it for the decision of this court.
    
      Selden S. Cooke, for Dean :
    1. As to the dormancy of the Ross judgment, and the loss of its lien.
    
    Notwithstanding the sureties, by their answers in November, 1865, show that their judgment and its lien were then in force and alive, yet this court, either as one of law or equity, must necessarily hold now, that (five years having elapsed on February 5, 1866, without execution) the judgment was satisfied and paid. This is the presumption of the law, and of the statute; and equity must adopt the same rule and presumption, for the reason that equity follows the law. Code, secs. 422, 447 ; S. & C. 385, 1160 ; 2 Story’s Eq., sec. 1216a; 2 Ohio, 71, 75; Miami Exporting Company v. Turpin, 3 Ohio, 514; Douglas v. Houston, 6 Ohio, 162; Sellers Lessee v. Corwin, 5 Ohio, 403; Davidson v. Root, 11 Ohio, 100; Myers v. Hewitt, 16 Ohio, 453; Norton v. Beaver, 5 Ohio, 178; Earnfit v. Winans, 3 Ohio, 185 ; Neate v. Marlborough, 8 Myl. & Craig, 407, 415; Lytle v. Cin. Man. Co., 4 Ohio, 466.
    2. As to the right of the sureties to be subrogated to the right and lien of the executors of Ross under their judgment.
    The case of Neilson v. Fry, 16 Ohio St. 552, does not settle this 380] ^'question in favor of the sureties. That was a case between co-sureties alone, there being no intervening rights or claims of third persons set up in it.
    The executors held the judgment lien until 18C5. Their rights then became extinguished by payment; and from that time onward the sureties held their equitable lien (and it ought to date only from the time they got it) ; and they ought to be allowed to hold priority as against all third persons obtaining lions after |>ayment in 1865 ; but they ought not, in justice, bo permitted to extend their equitable lien backward so as to override an equally just and lawful lien acquired before they acquired any rights by payment, or did any act or took any step toward obtaining a lien of any kind.
    Dean became surety for Bush before they did. He paid off his surety debt before they did. He obtained his mortgage before they wore damnified to the extent of a cent, and long before they acquired any right of subrogation. Dean has in law the prior lien. The lien of the judgment creditors was also a legal one, but the one sought for the sureties is but an equitable lien, and where the equities are equal, the law must prevail. In all matters Dean was first injured, and in all matters Dean was first to act.. Ought not this priority give him the first, if not the superior right? In justice it ought. Doan is superior in time on all points. It is this which gives him the superior right; Equity, then, does not require the subrogation, but forbids it. 1 Story’s Eq., sec. 64; Green v. Ramage, 18 Ohio, 428
    
      W. H. Safford, for the Stookeys :
    1. The sureties who paid off the Ross judgment have the right, in equity, to be subrogated to the lien of that judgment. The payment of the judgment by the sureties did not destroy its lien as to them, but gave them a right to its benefit. 1 Lead. Cas. in Eq. 96, 110-112, and cases there cited; Seymour v. King, 11 Ohio, 842; Douglass and Harris v. Carlisles, 12 Ohio, 169; Imsly v. Anderson, 3 Call, 329 ; 1 Desaus. 409 ; 1 Hill’s Ch. 344-351; Lathrop and Dale’s Appeal, 1 Barr. 512 ; Russell v. Taylor, 1 Ohio St. 327, 330 ; Neilson and Churchill v. Fry, 16 Ohio St. 552.
    *2. The lien of the judgment was not discharged by the [881 fact that five years from the date of the last execution expired during the pendency of the proceedings in this case. The bringing of the suit, and the filing of the answers by way of cross-petitions on the part of the Stookeys, fixed the status of the rights of the respective lienholders; and any decree thereafter rendered would relate back to the time of the commencement of the action. At that time the sureties had in equity a good and valid lien on the land of Bush, prior in time to the claims of the other creditors, except that of Dempsey. Five years had not then elapsed from the issuing of the last execution, nor until after the sale of the land was ordered by the court. The pendency of the suit preserved the liens as they were when it commenced.
   White, J.

Two questions arise in this case: 1. Whether the payment by the sureties to the judgment creditors extinguished the judgment; 2. Whether the priority of the judgment and the 'right to have it paid from the proceeds of the sale of the land were lost by the judgment becoming dormant during the pendency of the action.

For all purposes involved in this suit, both questions, in our opinion, require a negative answer.

It was the duty of Solomon W. Bush, the principal debtor, to pay the judgment and save the sureties harmless; and, as against the latter seeking indemnity from the property subject to the lien of the judgment, ho can not avail himself of the payment made by them. In respect to this claim of the sureties to indemnity, he occupies the same position as if the judgment had not been paid; and the effect of satisfying the judgment creditors was to entitle the sureties, in equity, to be subrogated to the rights of the former in the j udgment not only as against the principal debtor, but against all subsequent lienholders standing in his shoes.

It is true James Dean, who contests the claim of the sureties, is a mortgagee, but his mortgage is subsequent and subject to the judgment, and his rights under the mortgage are no greater against the sureties than they were against the judgment creditors, in whose place the sureties stand.

382] *The solution of the second question is found in the fact that the subject-matter of the suit is of equitable cognizance, and that the parties call into action the equitable jurisdiction of the court.

The land sought to be subjected to sale was, at the commencement of the suit, subject to two mortgages and a large number of judgment liens. By the records, the judgment in favor of Ross’ executors was prior to plaintiff’s mortgage; but, by agreement between the parties, the mortgage was to be first paid. In this state of the title, a sale upon execution would not have been an adequate remedy. This could only be afforded in equity, in a suit to which all the lienholders wore parties, and where the various liens could be ascertained and marshaled, the property sold discharged of such liens, and the proceeds properly distributed.

Such is the character of this suit, instituted by the plaintiff as mortgagee to foreclose his mortgage, and to which the judgment creditors are parties; and its prosecution having resulted in a sale of the land, it has, in equity, performed the same office as respects the judgments, which would have been performed by sale'on execution had that form of process been available and resorted to.

The object of the suit, from its commencement, was to subject the land to sale for the benefit of the parties; and it would be exacting a vain thing of a judgment creditor to require him, pending the suit, to make'an .ineffectual attempt, by execution, to accomplish the object for which the suit was being prosecuted.

•The action is a proceeding in equity to enforce the payment of the judgments and mortgages from the land; and in distributing the money resulting from its prosecution, it seems to us no good reason exists in equity why a judgment creditor, who was properly made a party while his judgment was alive, should lose his right to share in the distribution by the omission to issue execution, which, under the state of the title, could not have resulted in a sale of the land.

The nature and object of the suit was the execution and enforce-383] ment of the liens of all the parties; and, when properly *and successfully resorted to, it may well be hold to supersede the necessity of other modes of execution.

In this case, answers, in the nature of cross-petitions, had been filed and the order of sale made before the judgment became dormant. It would, perhaps, have been more regular to have settled the liens by decree before or at the time of ordering the sale. Had this been done, the fact that his judgment afterward became dormant would clearly have been no ground for denying the right of the creditor to share in the distribution. The fact that the rendering of the decree was deferred until after the sale, and to the time the money was brought into court for distribution, did not, in equity, alter the rights of the parties from what they would have been, had the decree been pronounced earlier in the progress of the case.

Judgment to be entered in accordance with this opinion.

Day, C.J., and Brinkerhoff, Scott, and Welch, JJ., concurred.