Case ID: scl_15/html/0336-01.html
Source: Caselaw Access Project
Author: {"author": "Nott, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The State vs. Laval, City Sheriff.
    By the English law, a mortgage is a conveyance of land as a security for money to be paid in future, ai.d dei> „suble upon the payment of the money within the time presonoed. If the money he not ¡paid according to the contract, the deed becomes absolute, and the fee of the land is vested in the mortgagee.
    In Equity, however, it is considered in the nature of a pledge, and that Court will interp’ose its authority and extend to the mortgagor further time to redeem, although nis-remedy is lost at law. That is what is called an equity of redemption.
    But by our act of 1791, the fee continues in the mortgagor, and the mortgagor is entitled to redeem even after the time stipulated.
    Under this act the right to redeem is a legal right, and does not require the aid of the Court of Equity.
    A mere equity is not the subject of an execution, and though in England an equity of redemption cannot he levied on, yet here -the right of the mortgagor being a legal one, maybe levied' upon and sold. - . ■ ■
    The purchaser takes the place of the mortgagor, with all his rights, privileges and disabilities.
    If the land he sold under an execution older than the mortgage the purchaser takes it discharged of the mortgage, and if he pur chases under the mortgage, he takes it subject tothe judgment.
    If land be sold under a junior execution, the purchaser acquires a good title, and the money is applied to the several executions according to their priority.
    The execution is considered as a mere authority to sell without ' regard to the distribution of the fund afterwards.
    It seems that judgments and executions, though dormant, pre- ■ serve their liens for any indefinite period of time.
    Where a purchaser buys under an execution, there being a pri- or mortgage, he takes subject to the mortgage, and may redeem.
    But where there were prior and subsequent judgments and an intermediate mortgage, and the purchaser bought under a judgment subsequent to the mortgage, on a rule against the Sheriff by the owner of the subsequent judgment to shew cause why the money was not paid over to nis execution, the Court refused to decide the' rights of the parties on a rule, and thought the remedy was in Equity, the prior judgment and mortgage creditors to bo made parties.
    This was a rule upon tbe Sheriff in the City Court, for not paying over money collected on an execution of J. R. Morgan. The Sheriff shewed for cause why tbe monies had not heen paid over, that the fund in his hands had been claimed by different parties. It appeared that he had levied on a house and lot in the City of Charlestqn, the property of Frederick Naser, by virtue of an execution at the suit of James R. Morgan against the said Fredrick Naser; that there had been several judgments obtained both in the City Court of Charleston and in the Court of Common Pleas for Charleston District, against the said Frederick Naser, previous to the judgment obtained by James R. Morgan, but that the said F. Naser, after those judgments were obtained, but prior to that of Morgan’s, had executed a mortgage of the said house and lot to one John Stent, which mortgage was properly re corded, and that Morgan’s judgment was the eldest of those against Naser, subsequent to the mortgage. At the sale, under Morgan’s execution, the property brought three hundred and ten dollars, and he now claimed that the nett amount of the proceeds of the sale should be paid to him. The elder judgments also claimed the amount in the Sheriff’s hands, and the Recorder directed that the fund should be applied to the eldest judgment, and gave the following reasons:
    The Recorder. The case ex parte the City Sheriff 1 M'Cord, R. 399, decided that when a levy and sale were made of mortgaged lands under a subsequent execution, nothing passed to the purchaser but the defendant’s equity of redemption, and the Sheriff was directed to pay the proceeds to the judgment creditor. That case for the first time in this country established the principle that an Equity of Redemption was such an interest in the land remaining in the mortgagor as was liable to seizure under execution. Now every interest whatever, which the debtor had or could acquire in the land during the existence of a judgment, became bound by it, and where the Sheriff converted any part of that interest into money, it became payable to the first judgment creditor, otherwise suck sale would be the means of depriving such judgment creditor of the benefit of his lien quoad ibis interest. It is true this interest did notarise so as to become separable till the mortgage was executed, but as soon as it did arise, if it was worth any thing, it inured to the benefit of the eldest judgment, in the same manner as subsequent improvements of the land would have done. I am aware of the speculative difficulties which this construction, founded on the case of the City Sheriff, may give rice to, but I can arrive at no other conclusion than this, for if the Equity of Redemption be an interest in the land, (which we now cannot doubt, as it may be levied on, sold or released,) tbe lien of the first judgment must act on it.
    From this decision Furman for Morgan appealed and made the following points : 1st, That by the decision ex parte tbe City Sheriff, 1st M'Cord, 399, it was evident that the only interest levied upon bythe Sheriff was the Equity of Redemption, remaining in the defendant, Naser, after execution of the mortgage to Stent, and consequently the purchaser at his sale only became entitled to that interest, and took the property subject to the mortgage and ail liens prior to it.
    2d. That under Morgan’s execution the Sheriff could not sell more than that execution bound; that this sale did not affect judgments prior to the mortgage in any respect but only transferred the right remaining in the defendant, Naser, after executing the mortgage, and that whatever a purchaser thought that was worth, and would give for it, the plaintiff, Morgan, was entitled to.
    3d. That the judgments prior to the mortgage had still their original lien upon the property, and it might still be sold by them, and it was unreasonable that they should receive this fund and still have the whole property subject to their liens.
    
      Hh. That iba effect oí íhe decision of the Recorder 'was to oust the plaintiff, Mo.-gan, while it conferred no j ea> advE.nie.ge upon C m prior judgments, who might notwithstanding this sale b;-, the Sheriff', at any time realize the amounts of their liens upon tbe property; but tbe Plaintiff, Morgan, was precluded from acting, though the property was sufficient for the satisfaction of Ms claim also.
    5th. That though it was the general rule that the oldest judgment and execution takes the fund, yet the present case formed an exception. The properly being sold subject to the mortgage was necessarily sold subject to the judgments that were prior to it also, and the purchaser only gave for it the amount it was worth over and above all those liens, that being the interest bound by Morgan’s execution.
    6th. That the judgment creditors prior to the mortgage were entire strangers as to the proceeds of this sale made by the Sheriff. That the only parties concerned in it were the defendant, Waser, whose Equity of Redemption has been transferred out of him by tbe salo, to the purchaser, who for the amount bid by him at the sale, was invested with the right then possessed by Naser, and by paying off the prior incumbrances, might take the whole estate, and tbe plaintiff, Morgan, who was entitled to receive the amount the property was found to bo worth over and above the prior incumbrances, and which was ascertained by the sale.
    
      Eckhard, contra.
   Nott, J.

The appeal in this ease has been brought upon six different grounds, all of which may he resolved info the single question, to whom does the money in the Sheriff’s hands belong. Connected with that question, various views have been taken of the case which it is necessary to consider. A mortgage according to the English law, is a conveyance of land as a security for money to be paid in future, and defeasable upon the payment of the money within the time prescribed. If the money be not paid according to the contract, the deed becomes absolute, and the fee of the land is vested in the mortgagee. In Equity, however, it is considered in the nature of a pledge, and a Court of Equity will interpose its authority and extend to the mortgagor further time to redeem, although his remedy is lost at law. That is what is called an Equity of Redemption, and I take it to be a well settled rule of law, that a mere equity is not the subject of a levy and sale under an execution. A fi. fa. can operate only on a legal estate, and it is confounding all legal distinctions to say, that an execution can be levied on an Equity of Redemption. It is said that in Massachusetts, Connecticut and New York, an Equity of Redemption may be levied on and sold under a fi. fa. from a Court of Law. I have not looked into those cases, because the question is quite unimportant as it regards the case now under consideration. For our act of 1791 expressly provides that the fee shall still continue in the mortgagor, and that the mortgage shall be considered only as a pledge for the security of the money, and the mortgagor is entitled to redeem even after the time stipulated by the parties for x-edemption is past. It is true that the act of 1797 does call this in conformity with the language of the English books, an Equity of Redemption, but it is clearly a misnomer. The right to redeem is unquestionably a legal and not an equitable right. The mortgagor has the legal estate, because it is so expi’essly declared by the act. He has a legal right to redeem because that, is as expressly given. It is a legal and not an equitable right, because it is so given, and because the aid of the Court of Equity is not necessary to the exercise of it. But. T am not disposed to dispute about words, so we can all understand them in the same sense ; for by whatever name it is called the effect of a levy and sale by execution must be the same. Ordinarily, it is the interest oí the mortgagor, alone that is levied on, and dial interest, whatever it may be, is transferred to tee purchaser. He takes the place of the mortgagor with all his rights, privileges and disabilities; that is to say, he takes the land subject to the incumbrance with the right to redeem, and that was the case of the City Sheriff, 1st. M’Cord, 399. The circumstances of that case were as follows: — The land had been mortgaged to Colonel Sass. It was sold under an execution obtained subsequent to the mortgage and bought by him. It was held, in the language of the Court, that he had purchased the Equity of Redemption only, or as I understand the decision, he purchased the legal estate subject to his own mortgage, by which the mortgage was extinguished. If it had been purchased by any other person, the purchaser would have bad the right to redeem, and if he had neglected to do so, the mortgagee might foreclose his right by a sale of the premises. There is, however, one exception to this rule : If the land be sold under an execution older than the mortgage, 1 presume the purchaser would take it discharged of the mortgage, indeed, connected with this subject, it appears to me that there are four distinct classes of cases: 1st. Where there are several executions of various dates without any other lien or incumbrfence on the land. 2nd. Where there is an execution with a subsequent mortgage or incumbrance. 3rd. Where there is a mortgage only with a subsequent execution ; and, 4th. Where there is an execution, a mortgage and subsequent execution, each bearing date in the order mentioned, which is the case now under consideration. In the first case, our decisions have been, that judgments and executions preserve their liens (it would appear to me) for any indefiniteperiod of túne; and, therefore, if ha so;ü andar a junior execution, tbs purchaser acquires a good title and the money must be paid to the several creditors according to the priority of those liens. Tire execution is considered as a mere authority to soil without regard to the distribution of the fund afterwards. I have not myself been friendly to those ,decisions which go to support a perpetual lien of a dormant execution, and have uniformly resisted the doctrine in every shape in which it has been presented, and I believe that it is peculiar to this State; but it is too well established now by a series of decisions to be controverted.

In the second class of cases, the judgment and execution creditors cannot be effected by the mortgage, because, having a prior lien, the purchaser under the execution, as has already been remarked, takes the property discharged from the mortgage, and a purchaser under the mortgage, must take it subsequent to the elder liens.

In the third, we have also seen that the purchaser takes-the property subject to the incumbrance, or if it is a more palatable expression, he purchases only the Equity of Redemption.

The last, and the only case in which there appears to be any difficulty, is the case now before us. The difficulty which has arisen in this case is owing, perhaps, partly to the decisions of our Courts, and partly to the act of the Legislature, by which legal and equitable rights are so blended together, that it is difficult to determine to which jurisdiction they most properly belong. In order to see the operation of these conflicting claims or liens, it is only necessary to look to the effect of the various motions arising out of this case. Suppose the land in question to be worth two thousand dollars, and to be mortgaged to secure a debt of one thousand. — If a purchaser under a junior execution bid one thousand dollars, he must pay that sum to the sheriff, and is still liable to pay one thousand more to redeem the laud from the mortgage. If the younger execution creditor is entitled to the. purchase money, and the elder executions sf.ll retain their liens, then the purchaser lias acquired nothing. lie loses both his money and the land. If the elder execution cieditors are entitled to the money, and still to retain their lien, tVn the purchaser gets nothing; for they not only hold the money, but may still proceed to sell the land. If the purchaser mav hold the land against the elder creditors, and they are entitled only to the purchase money, then the mortgagee holds the lend as a security for his debt against the elder liens and they receive only one half of what they are entitled to. From, these difierent views, it is apparent that in a ease circumstanced like this, justice can never be d'.\a in this summary way b> a rule upon the sheriff. Indeed, it appears to me very doubtful whether a Court of Law can in any way administer the relief which such a case requires. A Court of Equity, by bringing all the parties before it, can adjust their respective claims, and distribute to each his due in a more ample manner than can be done by any other method, and is, in my opinion, the only competent tribunal to effect the object. I am of opinion, therefore, that the decision of the Court below should be reversed, and that the rule should be dismissed, and that the parties should be left to litigate (heir rights by suit, either in law or equity, as they ’may be advised.

Judgment reversed.