Case ID: scl_29/html/0053-01.html
Source: Caselaw Access Project
Author: {"author": "Butler, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Edmund Waddle vs. Cureton and Joyce.
    
    1. L purchased from R, a lot of land, with a Hotel thereon, and to secure the payment of the purchase money, executed to the latter, a note and a mortgage of the premises, of the same date. R transferred the note and •security to C, with credits on the note, but still leaving a balance, unpaid, of about one thousand dollars. The purchaser, being largely indebted to' various persons, proposed to the attornies, in whose hands the demands against him had been placed, to make satisfactory arrangements with his ■creditors before return-day, which was about ten days after his proposition was made; but, in the mean time, sold a famify of negroes to the defendants, with an understanding that the sale was to be kept secret until after return-day. Immediately after this transaction, L, under pretext of a short excursion, left the State finally. Attachments were taken out by his creditors, judgments obtained, and executions issued, under which the lot of land in question was sold by the sheriff, plaintiff, W, being the highest bidder. W made an arrangement with certain persons, by which they took the title upon his bid, with an understanding that he was to satisfy the mortgage held by C; he paid the balance of the note held by C, and took a transfer of the same, an entry being made on the mortgage that it was satisfied. Plaintiff issued an attachment on the note, making defendants garnishees, who returned that they had nothing liable to its operation, upon which he filed a suggestion falsifying their return.
    
      2. It was held that no more was sold at the sheriff’s sale, than L’s equity of redemption, and that the purchaser was under an obligation to pay off the amount due on the mortgage, in addition to the amount of the purchase, to be applied to the junior executions.
    3. The land being offered for sale, with public notice of a subsisting mort* gage, the bidders were to be regarded as having reference to their legal liability to take the land subject to the debt; and whether plaintiff be regarded as the purchaser, or as a bidder refusing '.to comply with the terms of sale, or as one suffering title to be made to others on his bid, with an obligation on his part to discharge the lien of the mortgage, the consequences would be the same.
    4. As to the question, whether plaintiff and C had a right to cancel the security, and leave the demand still subsisting against the mortgagor, it seems if the mortgagor had been present and consented to such arrangement for his own benefit, it might have been effected; or if it could be fnade to result to his advantage, the court might presume his assent — but where, as in this case, it must be regarded as a mere device to relieve the plaintiff, and would have operated to the prejudice of the absent debtor, no such assent could be presumed.
    
      5. Tbe plaintiff having no foundation for his attachment, could not acquire any right under a judgment referrible to it.
    6. If a mortgagee should elect to proceed against his original debtor at law, after the equity of redemption in the mortgaged premises has been sold under Ji. fas. and should attempt to collect his debt out of other property of the mortgagor, the Court of Equity would either stay such proceeding, or compel him, upon payment of the debt, to assign over his debt and security to his debtor, so as to enable the debtor to indemnify himself out of the mortgaged premises in the possession of the purchaser. Vide 2 J. C. R. 128.
    7. Whether the purchaser might have avoided an obligation to pay the mortgage debt by giving up the land, not considered.
    8. It was as competent for defendants to inquire into the validity of plaintiff’s demand, as it was for him to impugn their sale.
    
      Before Butler, J. at Greenville, Fall Term, 1843.
    This was a suggestion filed by the plaintiff, Waddle, for the purpose of falsifying a return which the defendant» had made, as garnishees in an attachment taken out by him against one Blackman Ligón.
    The merits of the case will be fully understood from the special verdict found by the jury, and the facts as stated in the opinion of the presiding Judge.
    
      Special Verdict.
    
    We find that the plaintiff, Edmund Waddle, was the highest bidder for a lot of land in the town of Greenville, sold by the sheriff, under executions junior to a mortgage executed by Blackman Ligón to Emily Rowland, to secure the purchase money of said lot of land, to wit, $3000; that said mortgage, and note of same date and amount, are duly transferred to Peter Gauble, with some credits on the note, and that at the time of the sale of said lot there was still due on said note to Cauble, about one thousand dollars. We further find, that the sum bid by Edmund Waddle, for the lot of land, was forty-one hundred and fifty dollars, which, by an arrangement and understanding entered into between E. Waddle, R. Cox, J. Moore, and J. Farr, was paid by the said Cox, Moore and Farr, and, therefore, the sheriff made titles to them ; and that E. Waddle did pay to P. Cauble about one thousand dollars still due on Iiis note, and took a transfer of the same, with an entry simultaneously made by Cauble, that the mortgage was satisfied. We further find, that Edmund Waddle has recovered judgment for balance on said note, say about one thousand dollars and interest. We further find that the sale of negroes now in controversy, from Blackman Ligón to the defendants, was fraudulent.
    If, upon the foregoing statement of facts, the plaintiff’ has a legal right to establish the affirmative of this issue, then we find for the plaintiff. But if otherwise, we then find for the defendant.
    
      Opinion of the presiding Judge.
    
    The distinct purport of the above special verdict, will appear from the following statement of facts.
    Blackman Ligón was largely indebted to different creditors, about thirty in number, who had placed their demands in the hands of Messrs. Townes and Choice, for collection. These attorneys had informed Ligón that they had these demands, and were authorized to make such arrangements with him as would secure them. To a proposition that he should confess judgment, Ligón had made objections, saying that he would make satisfactory arrangements with his creditors before return-day, which was about ten days after these propositions were'made. Ligón went to the defendants, who were trading in negroes, and proposed to sell them Hester and her children, the same that are in controversy in this case. Joyce, one of the parties, came up to Greenville, where Ligón resided, and bought the negroes for one thousand dollars, with the understanding that he should keep the sale a secret till after return-day — this being on Saturday. On Sunday, Ligón went off, under pretext of visiting Glenn Springs. On the Wednesday ensuing, it was pretty well ascertained he had left the country, for Texas. A number of attachments were on that day taken out by his creditors. In due time, judgments were recovered, and executions issued. Under these executions, a lot of land in Greenville, with a valuable Hotel situated thereon, was sold by the sheriff, at which sale E. Waddle was declared to be the highest bidder. Ascertaining that he would have to pay oft' the mortgage, referred to in the above verdict, he entered into some arrangements with, and obligations to, the other persons named, to let them take the title, upon his bid, to themselves, with an understanding that he was to pay off and satisfy the mortgage held by Cauble; and with a view of accomplishing this end, and of extricating himself from the difficulty in which he had involved himself, he paid off the balance of the note held by Cauble, and took a transfer of it to himself, with an entry on the mortgage itself, that it was satisfied. The word “satisfied,” is written across the mortgage. As the indorsee or bearer of the note thus transferred to him, he issued an attachment, and made the defendants in this issue garnishees. They returned that they had nothing in their hands liable to the operation of the attachment; whereupon, Waddle filed his suggestion, falsifying the return.
    Under this statement of facts, with those found by the special verdict, the question arises, has Waddle any of the rights of a creditor'? In other words, could'Waddle acquire any demand against Ligón, by the transfer of the note secured by mortgage'? The purchase money of the lot of land was, no doubt, payable to the junior executions, under which the sale was effected. Was not the bid on the junior executions, ipso facto a satisfaction of the mortgage 1 This involves the proposition, was not the purchaser, or purchasers, under an obligation to pay off the amount due on the mortgage, in addition to the amount of the purchase, to be applied to junior executions'? If Ligón had been present, he could have required the money paid into the sheriff’s office, to be applied most for his benefit; and, as a consequence, could have objected to any arrangements in relation to the mortgage, that might be made to his prejudice. He might well have objected to the mortgage being satisfied, without including the note secured by it. It would have been in his power to compel the purchasers at sheriff’s sale to pay the mortgage in addition to the amount of their bid. And have not the present defendants the same rights that their vendor would have had, had he been present, and been a party in the controversy 1 Such is my judgment — and the postea is accordingly ordered to be delivered to the defendants.
    The plaintiff appealed, on the following grounds.
    1. Because his Honor erred in deciding that Waddle had none of the rights of a creditor of Ligón, by the purchase of Ligon’s.noté from Cauble.
    2. Because his Honor erred in deciding that the bid of Waddle was, ipso facto, an extinguishment of the mortgage, although he never received titles, or complied with the terms of the sale.
    3. Because the judgment of Waddle against Ligón, regularly entered up, and unsatisfied, was proof conclusive that Waddle was a creditor of Ligon’s.
    4. Because the garnishee in attachment can take no exceptions to the regularity of the proceedings in attachment, and the defendants had no right to contest Waddle’s recovery against Ligón.
    5. Because the assignee of the mortgage was not bound to make his demand out of the house and. lot, but had a right, even after the sheriff’s sale, to pursue any other property which'belonged to Ligón, the mortgagor.
    6. Because a mortgage may be released by a mortgagee, without destroying the debt secured by the mortgage.
    7. Because the mere bidding off lands at sheriff’s sale, vests no legal right in the purchaser, until titles are executed.
    8. Because the decision of his Honor, in ordering the postea to be delivered to the defendants, was, in other respects, contrary to law and evidence.
    Should the judgment of the Circuit Court, awarding the postea to the defendants in this case, be reversed, the defendants gave notice that they would move the Court of Appeals for a new trial, upon the following grounds.
    1. Because his Honor, the presiding Judge, refused to admit in evidence the record in the case of Win. A. Oureton and others vs. Robert Cox and others, attaching creditors of B. Ligón, which was an issue to try the title to the same negroes, and a verdict found for the plaintiffs in that issue, who are the defendants in this.
    
      2. Because Edmund Waddle, the plaintiff, having voluntarily made himself a creditor of B. Ligón, long after, and with a full knowledge of, the purchase of the negroes by the defendants, there could be no fraud as to him.
    3. Because there was not sufficient proof of fraud to authorize the verdict of the jury.
    Perry, for the plaintiff.
    The defendants stand convicted of fraüd. The jury have found the sale of the slaves fraudulent. They still belong to Ligón. The defendants have no right to them. They are not even creditors of Ligón.
    The defendants, as garnishees, have no-right to question the regularity of the proceedings against the absent debtor, Ligón. See Foster vs. Jones, 1 McCord, .116; Chambers and Sadler vs. McKee, 1 Hill, 229; Kincaid vs. Neall, 3 McCord, 201; Camberford vs. Hall, 3 Id. 345 ; McBryde vs. Floyd, 2 Bail. 209.
    The judgment in this case is conclusive, until reversed; 3 McCord, 346; 2 Dane’s Am. Dig. 635; Kemp’s Lessee vs. Kennedy, 5 Cranóh, 173.
    No title passes, or estate vests, by the merely bidding off lands at sheriff’s sale. This was all that Waddle did. The land was resold by the sheriff at his risk, and purchased by another. See Herbemont vs. Sharp, 2 McCord, 264; Minter vs. Dent, 2 Bail. 291.
    The mortgagee is not bound to look to the mortgaged property for the payment of his debt, but may sue on the bond "and proceed against any -other property belonging to the mortgagor. Burnell Vs. Martin, Doug. Rep. 401; Booth vs. Booth, 2 Atk. 343 ; 3 Johnson’s Ch. Rep. 330 ; Hughes vs. Edwards, 9 Wheat, 489; 4 Kent, 174; 6 Johnson’s Ch. Rep. 77.
    A mortgage is not the debt, but the mere security of the .debt. So declared by the Act of 1791, (5 Stat. at Large, 169) Wilson Vs. Troup, 2 Cowen, 195; Hawkins vs. King, 2 A. K, Marshall’s Rep. 109; Barnes vs. Lee, 1 !Bibb, 566; Drayton vs. Marshall, Rice’s Eq. Rep. 378; Green vs. Hart, 1 Johnson, 580; 4 Kent, 186.
    A release of the mortgage does not extinguish the debt secured by the mortgage. . 2 N. Hampshire Rep. 13; 5 Am. Dig. 297; Hampton Vs. Levy, 1 McCord Ch. Rep. 116; 2 Gallisson, 152; -5 'Condensed U. S. Rep. 657.
    
      
      Sullivan, contra.
    Waddle was no creditor of Ligón. The mortgage debt was extinguished by his purchase. Could hé have foreclosed against the persons who took the titles'? In matters of substance, the garnishee may contest. Cited 4 Kent, 162; Exparte City Sheriff, 1 McCord, 399,
    The plaintiff is a mere volunteer.
    
      Young, same side.
    The purchaser of the equity of redemption made himself liable for the debt, Cited 2 Johnson’s Ch. 125.
    
      Henry, argued the case in reply.
   Curia, per

Butler, J.

The sale from Ligón to defendants, was valid as between themselves, and must be regarded good as to all the world, except the unsatisfied creditors of Ligón. It becomes important, therefore, to inquire whether Waddle occupies such a position as to entitle him to the rights either of an attachment or judgment creditor. To approach this question, we must have reference to the state of things that existed at the time the attachment issued. It is as much competent for the defendants to inquire into the validity of plaintiff’s demand, as it is for him to impugn their sale. In this respect, their rights are mutual; and if Waddle had no legal demand against Ligón when he sued out his attachment, the judgment founded upon it will afford him no protection. It is a contest between one assuming to be a creditor, and a purchaser for valuable consideration, so far as it regards the vendor.

All that was sold at sheriff’s sale, was Ligon’s equity of redemption; and that sale was effected by judgment creditors other than the mortgagee ; the land was offered for sale, with public notice of a subsisting mortgage, to secure the payment of about one thousand dollars. All bidders must be regarded as having reference to their legal liability to take the land subject to the debt; whether Waddle is to be regarded as the purchaser, or as a bidder who refused to comply with the terms of sale, or as one who suffered title to be made to others on his bid, with an obligation on his part to discharge the lien of the mortgage, the consequences will be the same.

In the first point of view, he could not get a perfect title to the land, without paying the mortgagee the amount of his debt. In the second case supposed, he would be obliged to suffer the land to be resold at his risk and loss; and that loss, it seems to be admitted, would be the amount of the mortgage debt. Upon a resale, with an understanding that the mortgage was to be paid off besides the amount of the sum bid for the land, the price would have been $3141, instead of $4,141. And in the third case, the obligation to discharge that mortgage, did, in fact, subject Waddle to a liability to pay about $1000. It seems he paid the sum to the mortgagee, and took an assignment of the note, and had the mortgage marked satisfied. Was not this money paid in extinguishment of a demand against Ligón, and which Waddle was under a legal obligation to pay for the benefit of Ligón 1 It is said that he and'Cauble had a right to cancel the security, and leave the demand still subsisting against the mortgagor. If the mortgagor had been present, and consented to the arrangement for his own benefit, it might, perhaps, have been effected. And if it could be made to result to his advantage, the court might presume his assent. But where this must be regarded as a mere device to relieve Waddle, and will certainly operate to the prejudice of the absent debtor, by depriving him of $1000 towards the payment of his debts, no such assent should be presumed ; such a presumption would not comport with the legal rights of the parties, or the moral justice of the case. When Waddle took up the note and had the mortgage marked satisfied, he not only extinguished the demand of the mortgagee, but discharged himself from a legal liability for the same amount. The debt and mortgage became thereby paid. This is a simple, and, perhaps, satisfactory view of the case, and from which it would follow that Waddle, having no foundation for his attachment, cannot acquire any right under a judgment referable to it. He is like one occupying the position of a purchaser of the equity of redemption, who has paid off the mortgage debt, and has the evidence and security of the debt in his own hands. In such a case, as is well said in the- case of Tice vs. Annin, 2 J. C. R. 129, “there seems to be no other alternative, but to consider the debt as extinguished in the hands of the purchaser. He purchased nothing but the equity of redemption, and, of course, subject to the mortgage debt, and his purchase of that debt was nothing more than an extinguishment of the incumbrance on his own land.” The result would be, that the purchaser of Ligon’s Hotel, and Waddle, together, gave, in fact, over and above the mortgage debt, $4141, with an additional obligation to discharge that debt. That must be the consequence in all such cases, or the purchaser must hold the land subject to the mortgage.

It is said, however, that the mortgagee is not compelled to resort to the mortgaged property of his debtor, but may resort to any other property for the satisfaction of his debt. If the mortgagee, in such a case, shall elect to proceed against his original debtor at law, after the equity of redemption in the mortgaged premises has been sold under fi. fas. and should attempt to collect his debt out of other property of the mortgagor, the Court of Equity would either stay such proceeding, or compel him,, upon payment of the debt, to assign over his debt and security to his debtor, so as to enable the debtor to indemnify himself out of the mortgaged premises in the possession of the purchaser ; 2 J. C. R. 128. In no point of view, therefore, could the purchaser avoid an obligation to pay the mortgage debt whilst he held the land. He might avoid this obligation, perhaps, by giving up the land. That is a point not involved in this case, and, of course, I give no opinion upon it. Judgment below affirmed, and this motion dismissed.

O’Neall, Evans, Wardlaw, and Richardson, JJ. concurred.