Case ID: ohio-st_14/html/0349-01.html
Source: Caselaw Access Project
Author: {"author": "Scott, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

McBride & Murphy v. Nicholas Longworth.
    1. Where lands incumbered by various liens are sold in judicial proceedings at the suit of one of the lienholders, and on cross petitions of the different defendant lienholders, and are purchased at such judicial sale by a defendant lienholder, and the proceeds of sale are distributed among the several incumbrancers, by order of court, agreeably to their ascertained priorities ; such purchaser, though a party to the suit, is entitled to the protection which the policy of the statute affords to purchasers at judicial sales, upon the reversal of the judgment or decree under which the sale was made.
    2. In a decree ascertaining the amount and priorities of liens, whore statutory penalties consequent upon appeal, are allowed; such penalty, so allowed on a prior lien, is not entitled to preference, on distribution, over the amounts due on the subsequent liens.
    Bill or Review. Reserved in the district court of Hamilton county.
    This is a bill of review, filed in the district court of Hamilton county, October 12, 1854, seeking to reverse a decree of the late supreme court in said county, rendered at the March term, 1851, and the subsequent orders of distribution, etc., made pursuant thereto.
    Nicholas Longworth, on the 31st March, 1849, executed a deed to Robert E. Johnson for ground on the southwest corner of Race and Fourteenth streets, Cincinnati; and Johnson, at the same time, executed a mortgage to Longworth to secure the payment of a note for the purchase money — $2800, with interest from April 22, 1847, and the principal in two, three, four, five, six, seven and eight years, equal installments; and-$3360 in ten years, with interest from May 10, 1847. Long-worth received a note, indorsed by Einkbine, in payment of $200 — one half of the first installment of the $2800.
    Johnson contracted with McBride & Murphy to build six three-story brick dwelling-houses on the premises. They built the houses, took a lien to secure the amount due them for labor and materials, filed their petition in the commercial court to collect the same, and Longworth filed a cross petition, asking a decree for purchase money. Horace Young and other lienholders, were also made parties defendant in the case. A decree was entered in the commercial court of Cincinnati, June 6, 1850. Johnson appealed, and the decree in the supreme court, entered March term, 1851, found the amount then due Longworth to be $1919 77; and added a penalty of five per cent., making the sum awarded Longworth $2015 75. Horace Young was found to have the second best lien, and McBride & Murphy the third. The amount found due McBride & Murphy, including a penalty of five per cent.’, was $3244 73. Liens were also found in favor of other parties, and their priorities determined.
    The decree ordered the several,liens to be paid in ten days; and in default of such payment, directed, the sheriff to sell the property, and out of the proceeds to pay, first, the costs; second, to pay Longworth $2015 75; third, to pay Longworth the balance of his mortgage debt, principal and interest; fourth, to pay the liens in their order of priority found by the decree in favor of others; and the cause was remanded to the commercial court for the execution of- this decr.ee.
    Longworth became the purchaser of the property; and distribution was made as the decree of the supreme court directed.
    The decree of confirmation and distribution was entered July 28,1851.
    
      Longworth purchased at...........................$10067 00
    The proceeds were distributed to pay costs..........................$ 131 00
    Longworth........................... 7815 03
    H. Young............................ 2114 00
    McBride & Murphy................ 6 28 $10067 00
    The case arising on the bill of review and the demurrer of Longworth thereto, was reserved by the district court at its May term,. 1861, for decision here.
    
      J. T. Orapsey, for complainants in review.
    
      V. Worthington, for Longworth.
   Scott, J.

Per Curiam. We find no error to the prejudice • of the complainants in review, in the original decree now sought to be reversed, which would justify the reversal of the order of sale. The statute in force when these proceedings took place, provides : “ That if any judgment or judgments, in satisfaction of which any lands or tenements belonging to the party, hath or shall be sold, shall at any time thereafter be reversed, such reversal shall not affect or defeat the title of the purchaser or purchasers; but, in such case, restitution shall be made of the moneys by the judgment creditor, for which such lands or tenements were sold, with lawful interest from 'the day of sale.” Swan’s Stat. of 1841, p. 479.

It is true that it was held in the case of Hubbell v. Adm’rs of Broadwell, 8 Ohio Rep. 120, that where a mortgagee purchases the mortgaged premises, under judicial proceedings had on the mortgage, and continues to hold them until the judicial proceedings are reversed, the mortgagor may redeem the premises ; no new rights having intervened. The court held in that case that the mortgagee was to be regarded as a party merely, and not as a purchaser within the meaning of the statute. But, that was a case in which the sale was ordered at the suit of the mortgagee alone, and for the sole purpose of satisfying his debt. There were no other parties in interest, but the mortgagor and mortgagee; and, as bet tyeen them, full justice could be done, after reversal. But the case here, stands otherwise. These premises were sold, under proceedings instituted for that purpose, by lienholders other than Longworth; in fact, by the complainants themselves. The sale was ordered at their suit, and on the cross petition of other parties as well as that of Longworth. Large portions of the proceeds of sale have been distributed under the order of the court, to other parties, who may now be insolvent. Under these circumstances we think Longworth is to be regarded as a purchaser; and entitled to the protection which it was the policy of the statute to aftord to purchasers at judicial sales.

Still, errors m the distribution of the proceeds of sale, may well be corrected, on'review, when the necessary parties are before the court. The only parties complaining here, are McBride & Murphy, whose lien, by the decree fixing priorities, and making distribution, was postponed to those of Long-worth and Young.

It is alleged, that in ascertaining the amount of Longworth’s lien, credit was not given for the $200 note of Einkbine, which had been transferred in payment to Longworth; and that the court erred in giving the penalties allowed to Longworth and Young precedence over complainants’ lien.

We have had a careful computation made of the amount of Longworth’s claim, at the date of the decree of distribution (July 28, 1851), and find it to be $7623 87, exclusive of penalty. He was allowed on distribution, including penalty," $7815 03, being an excess over the amount of his lien of $191 16. .

In the distribution, a penalty of $98 48 was also allowed to Young. However properly these penalties may have been allowed as against the debtor, Johnson, who had appealed the case, and who is not complainant here, yet they were no part of the debts secured by the mortgages of the parties, and were not entitled to preference in their payment over the complainants’ lien. The right to the penalties accrued in consequence of the appeal; while complainants had a specific lien of a much older date.

■ We think there was error in the decree of distribution which gave to Longworth $191 16, and to Young $98 48, which should have been decreed to complainants.

To this extent the decree of distribution will be reversed, and a decree entered, requiring the payment to complainants of these sums by the parties improperly obtaining them, with interest upon them severally since July 28, 1851.