Case ID: scl_5/html/0140-01.html
Source: Caselaw Access Project
Author: {"author": "CoiiCocK, and Smith, .Is., Brevard, J., Bay, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

CONSTITUTIONAL COURT, COLUMBIA,
    APRIL, 1813.
    Sarah Eaves v. Administrator Thomas Knox.
    When mortgaged property was sold under the mortgage for less than th® debt due on the bond, (to secure, the payment of which the mortgage •was given,) the question was raised, whether the balance due on that bond, could have preference over other specialties not secured by mortgage. Grimke, J., held that the mortgage gave the debt no such preference, except as to the property specially mortgaged. Colcock, and Smith, Js., were of opinion that the mortgage gave this debt a higher yank in the scale of payments than other debts. Brevard, and Bay, Js , held, that after the mortgaged property was sold, the mortgage was junclus offiew, and had nothing on which it .could operate in preference to other specialties.
    Motion to revers.e the decision of the Court of Common Pleas of Tork district, on demurrer. Judge Grimke, presiding.
    The action was covenant. Plea set forth condition of bond, and stated that a certain tract of land was mortgaged to secure the payment. Replication, that the land was sold under the mortgage, and joinder. Judgment for the plaintiff.
    The question made upon this demurrer was, whether when mortgaged property is sold under the morlgage for less than enough to satisfy the whole debt mentioned in the mortgage, the balance of that debt, it being by bond, can have preference to be satisfied out of the assets to other specialty debts not secured by mortgage. Judge Grimke held, that the mortgage gave the debt no such preference, except as to the property specifically mortgaged ; and that property-having been sold under the morlgage, the balancé of the debt, unsatisfied by such sale, was to be placed in the rank of other specialties, for which no security by way of mortgage was given.
    26th Nov., 1812.
    Hooker, for the defendant,
    contended the .mortgage was given to secure the payment of the whole debt; all the properly of the mortgagor was bound to pay the whole debt. The A. A. 1789, P. L. 491, gives a preference to judgments and mortgages, with executions, to be satisfied out of the assets of a deceased, before bonds and other obligations. In this case the specific property mortgaged was sold under the morlgage, but it was insufficient lo satisfy the debt. The mortgagor had other property not mortgaged, but subject to the payment of other bond or specialty debts. This debt, secured by the mortgage, was entitled to be first •completely satisfied before the other creditors claiming by specialty, but having no lien on the property by mortgage, could claim to be satisfied out of that property. The order arid gradation prescribed by the A. A. 1789, for the payment of debts, must be observed, although it is declared that no preference shall be given to creditors in equal degree. 1. Funeral and other expenses of the last sickness. 2. Charges of probate of will, or letters of administration. 3. Debts due to the public. 4. Judgments, mortgages, and executions, the oldest first. 5. Bonds and other obligations. 6. Debts due on account. This debt being secured by mortgage, gave it a higher rank in the scale of payments. It is the mortgage which entitles the debt to a higher rank, and not the nature of the debt.- ' Suppose the debt was secured by a promissory note and a mortgage} it would be equally entitled to a pieference to other debts secured by specialty, but not by mortgage. So the law is written. Tangible property mortgaged, may perish, or sell for less than the .debt, yet the debt maintains its rank. Its precedency would not be ¡lost by casual and accidental circumstances.
    No counsel appeared to argue on behalf of the plaintiff.
    Judge Nott had been concerned as counsel for him.
    30th Nov., 1813.
   CoiiCocK, and Smith, .Is.,

expressed opinions .in substance agreeing.with the arguments of Mr. Hooker, in favor ■of the motion.

Brevard, J.,

inquired as to the nature and operation of a mortgage ; a personal security for the payment of a debt, does not vest real property in possession. It is as a pawn, or pledge, only possession is in the mortgagor; gives a lien on the property mortgaged, to satisfy thereout the debt due. If that property be insufficient to satisfy the debt, the residue will stand without any security by mortgage, and be on a footing with other debts secured by bonds, or other obligations. After the mortgaged property is sold, the mortgage is Junctus officio, and has nothing on which it can operate. The preference of mortgages to specialty debts, given by the A. A. 1789, extends only to the mortgaged property, because the lien, created by mortgage, extends only to such property; whereas judgments and executions affect the property generally -; the first from the entry of judgment, as to real property, and the latter from the lodgment of execution, as to personal estate. The lien is general, and not particular. These, with mortgages, are ranked together, and the lien first created is to be first satisfied', and exclusively; but only so far as -the lien extends.

Bay, J.,

was of the same opinion. The security cannot be ex. tended beyond the value of the thing pledged by way of security. The whole of the debt was secured by the specialty. The whole debt was also meant to be further secured by a mortgage of land ; ^ut ^ turned out that this security was deficient. It only secured part of the debt. So far as it was deficient the security failed ; but this did not impair the security by bond ; and for the residue of the debt, after applying the proceeds of the mortgaged property sold, it remained as if no mortgage had been given.

Motion refused.