Case ID: yeates_3/html/0560-01.html
Source: Caselaw Access Project
Author: {"author": "Brackenridge, Justice. Yeates, Justice. Smith, Justice.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*John Keen, for the use of the Carpenter’s Company of Philadelphia against Martha Swaine, administrator of Ebenezer Swaine, and John M'Cawley, assignee of George M‘Cawley.
    A sale by a sheriff oil a levari facias on a second mortgage, free of all incumbrances confirmed, under the special circumstances of the case.
    Qu. Whether a sale under a subsequent mortgage or judgment, can affect the security of prior mortgages or judgments ?
    Levari facias sur mortgage returnable this term, on which a sale of the mortgaged premises was had by the sheriff on the 30th July 1803.
    A motion was made by Mr. Levy to set aside the sale, on the affidavit of James Swaine, stating that a sale had been made by the sheriff on a prior mortgage to Matthew Vandeusen, on the 3d June 1801, of the two houses mortgaged, when he the said James purchased the eastermost house, free of ground rent, for $1800, and Martha Swaine the westermost house, subject to a yearly ground rent of $30, for $1730; that the first mortgagee agreed to let the principal of his mortgage lay if the interest was paid up, and he the said James in expectation of getting a deed from the sheriff, paid him sundry sums of money, which inclusive of the interest paid to the first mortgagee up to the 25th July 1803, amounted to $11 i4x9a6o; that he and said Vandeusen had informed the sheriff of their agreement, but that the carpenter’s company having bought in the second mortgage from John Keen, proceeded to sell the premises by the sheriff on the 30th July 1803, on the same mortgage ; and that the said sheriff then sold the ¡premises clear of all incumbrances to the highest bidder, thereby rendering it necessary for the purchaser to advance a much larger sum in ready money than he ought, and occasioning a great sacrifice of the property, the eastermost house being sold for $1450, and the westermost house for $1190, and that the said sheriff had no authority from Vandeusen to sell the premises in that way, particularly as the defendant had shortly before, viz. on 18th July 1803, (about 12 days before the last sale,) paid to the said Vandeusen $30f% on account of the interest on his mortgage.
    Matthew Vandeusen, the mortgagee, was also examined. He swore, that on the 3d June 1801, he agreed to wait for his principal, for one year, with James Swaine aforesaid, on receiving of his interest, and informed the sheriff thereof accordingly that he has received his interest up to the 25th July 1803, and that in the same month the sub-sheriff enquired of him whether he wanted his money, to which he answered in the affirmative; and the sub-sheriff observed thereupon, if he did not want his *money, he must go to the sheriff and declare so under his hand, and the witness replied he would not do that. [*562
    Mr. Levy contended, that if the last sale was set aside the delay would be inconsiderable. It was clear on general principles, that a mortgagor could not affect the first mortgagee, by any subsequent incumbrances. The latter has the legal estate vested in him, subject to the equity of redemption in the mortgagor.
    Smith, J. I know not the meaning of those words, as applied to mortgages in Pennsylvania, where they are mere securities for the payment of money. On default of payment, remedy is to be had by sueing out a scire facias, and not as in England, by a bill to foreclose the equity of redemption.
    Mr. Levy. And yet amongst us, an ejectment may be supported on a mortgage, and a late case of this kind occurred at Nisi Prius in this city. I have understood that it was determined in this court, that a sale under a second mortgage could not affect the first. Febiger’s lessee v. Craighead, March term 1796.
    Yeates, J. The question was then fully debated, but no adjudication given on the general principle, the judges having disagreed in opinion thereon. The resolution was grounded on the loan office act, and the co'urt guardedly so expressed themselves.
    Mr. Levy. The practice of selling lands under later judgments is replete with inconveniences. The prior incumbrancers rely on the goodness of their security, and have frequently no notice of the sale. Added hereto, the sheriff gets poundage on .the whole sum, which is injurious as well to debtors as creditors. If he sells under subsequent judgments, he should sell subject to prior incumbrances, and then no injury is done. Besides all sheriffs are not equally worthy of trust, and the security which they give is ill proportioned to the money which passes through their hands. It is obvious that the sheriff here depreciated the property by selling the whole for ready money, when Vandeusen did not require his principal. He had no power to sell the houses, freed of the first mortgage, unless by the express authority of Vandeusen; and the latter so far from impowering him to do so, actually received the interest up to the 25th'July, a few days before the second sale, under his agreement with the *first purchaser. The sale therefore has been without k'S63] authority.
    Mr. J. Sergeant in behalf of the sale, urged that no general rule could be laid down in such cases. A mortgagee here has a lien on the. mortgaged premises in the same manner that a judgment creditor has a lien on all the lands of his debtor.Both are securities for the payment of money, and no more; and though a mortgagee to some purposes may be considered as having the legal title in him, so as to recover in ejectment, yet on such recovery he shall only hold the lands until his principal and interest is paid. It will not be said that the mortgagor is so far devested of the legal interest that he may not maintain an ejectment against the stranger. Lands in this state in defect of personal estate, are made chattels for the payment of debts, and prior incumbrancers can no more prevent a sale of lands under subsequent judgments, than prior execution creditors can prevent a sale of goods levied on by later creditors, discharged of their lien, in England. The money arising from the sales will be applied according to the priority of claims in both instances. But admitting that mortgages here are to be considered in a stronger point of view than mere securities, it only results that the purchaser and not the prior mortgagee runs the risque of a sale on a second mortgage. And if the money produced by the sale will satisfy the first incumbrancer, the purchaser may secure himself by looking to the appropriation of his money. It is certain, that the mortgagor may redeem, and the same right becomes vested in the sheriff’s vendee. Every one thus obtains his right.
    James Swaine has no reason to complain. If the terms of sale had been different at the second sale from the first, he might have some grounds of complaint; but this was cautiously guarded against, and the purchasers were placed on the same footing. Vandeusen agreed to wait one year for his money; his agreement to wait longer is barely constructive, and this construction is repelled by his conversation with the under-sheriff. He wanted his money, and would not give it under his hand to the sheriff that he would wait longer.
    Referred to in 2 Rawle 65 ; 3 Rawle 153 ; 35 Pa. 185.
    See act of April 6, 1830, P. L. 293; act of April 16, 1845, L. 488; act of March 23, 1867, P. L. 44.
    The court denied the motion to set aside the sale, under the special circumstances of the case, but declined giving any determination on the principle controverted.
    The Chief Justice subjoined. It may be attended with dangerous consequences, if the security of a prior mortgage could *be impaired by the latter incumbrances. A sheriff may p ,- be unworthy of trust, and his security inadequate. ' L 5 4
   Brackenridge, Justice.

I have always thought that‘no sub-. sequent judgment could have any effect by a sale, injurious to prior judgments.

Yeates, Justice.

On the other hand, there are dangers, that the lands sold subject to prior mortgages or judgments, will not bring their full value. Judgments may be entered by way of security. Payments may be set up by the debtor, and controverted by the creditor. How can the sheriff ascertain in such cases the amount of prior incumbrances, or persons desirous of purchasing become acquainted therewith ? No one can tell what the purchase money will amount to, and the result will be injurious to creditors, debtors and purchasers. What sticks with me, is, that mortgages and judgments are mere securities for the payment of money. At the same time, I admit, that injustice may be done, by selling lands subject to prior incum-brances, without giving full notice to such creditors. But this difficulty might I think, be obviated by the court.

Smith, Justice.

There are great dangers and mischiefs on both sides of the question ; and it will require great consideration before the court can lay down any general rule on the subject.