The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1876-05-04
rsnuortans Decision tn q BniIdsss As.
sarinaion Case by the United States
ss~p..xnssnc Court - fssfi9.s ff$& "

.crinsion Case by the United states
Gr,;,c ease 81 Morseil ct al as. The First
National Bank OF Washington DECIDED by
No supreme Court OF the Ur ,ifea states On
,he a1tf Of last month, IL great practical
Utility to tho legal probes Aon and the com.
nunity. The unanimc as opinioa OF the
court was delivered BY Mr.. Justice Swayne,
md presents the mr. 80 question At issue In
20 clear manner Is TO exclude the posi-
bilits Of doubt IN the future The record
Slows that tte sppeal was taken by, the
Washington Cooperative Building and De
posst Assoc iatssa from decree Of the SUI
,srcme Court "a this District passed IN case
Of the F irst National Bank OF Washington
US. JOHN W. Norsell, Michael p. Callan, ct
al. en- the aaalowfng state OF facts: Noyenl-
Der 4, 1861, .Morsel psschased certain real
properts On the city IF Washington, and
executed deed Of trust TO secure the bal
ancc OF the purchase>money (sl0,000). DC
fober 81, 1869, he purchased advances on his.
stock lin the aforesaid building association,
and 10 secure the payment OF dues, &C.,
&c, In accordance with the constitu-
tioa OF the association, he executed the
usual bond and the deed OF trust on the
same property. january "a, 1871, the bank
obtained Judgment against Morselt, and
on She 10th Of February Of the same year
Means, skinner g. Co., Of Baltimore, OBJ
tanned judgment against him, both OF
the judgments having been rendered by
the Supreme Court Of the District. March
/, 1871, MorselI executed another deed OF
trust to secure the association the prompt
payment Of dues, &c. Under tins last trust
1880 and upwards were due on the ga OF
September, 1871, when the bank hled
in m
MorseIi and the building association and
Its trustees parties defendant. The pro-
perty was sold pursuant to decree OF the
court upon this bill, and the proceeds,
which were not sufficient to pay the eX-
penses of sale, the building association dept,
an(! the judgments, were held subject to the
further order OF the court. a controversy
over the fund accordingly arose beIore Inc
auditor Mr.. Walter S. Cox, who, In an
elaborate report, sustained the claim OF the
ossociation TO the entire fund, notwlthstand-
,inp n norton was secured by the last deco
of trust, which p0St-dated the judgments.
The counsel for the Judgment creditors eN-
scepted to the report OF the auditor: LIST: Be
cause it gave priority in payment 10 the
amount secured by the last deed OF trust
over the judgments. Cd. Because it accord
ed the building association ga large sum
for eXorbitant fines imposed upon and
charged against the defendant Morsell";
and Sd, because it allowed to the building
association unlawful and unreasonable ln-
terest for the use Of money, &c. The SUI
preme Court OF the District, in general
Term (Mr. Justice Wylie diSsentingG decided
that the judgments having been rendered
and docketed prior to the record OF the Last
deed Of trust should have priority OF pay
ment out OF the funds. The building as
sociation appealed to the Supreme Court OF
the United States.
Although the common understanding OF
the law by the profession here, prior to the
decision OF this case by the District Supreme
Court, was that o judgment did not create
lien upon real property II it was encum-
bered by a deed Of trust or mortgage at the
time of the rendition of the Judgment, yet
there had been no direct adjudication OF
the point by the Supreme Court OF the
United States, and hence there was consid-
cradle doubt and uncertainty about it.
MANY valuable land titles in the District
had been passed on the theory that judg-
ments were not liens on an equity OF
redemption-a right to redeem from
an encumbrance-and until the, filing
of characterization bill to enforce such
Judgment against the specific property OF the
debtor thus encountered, it remained wholly
unaffected by all judgments rendered subse-
Quent to such encumbrances. And so 1t was
in this case. When the judgments were rem
dered Morsell had no interest in the proper
ty excepting an equity Of redemption, having
previously encountered it by deeds OF trust,
and it was held by the Supreme Court Of
the United States that an equity Of redemp-
ton in lands in the Maryland part OF the
District OF Columbia, under the common
law which was in force in 1901, the date OF
the cession, and is yet in force-could not be
sold under execution against the Judgment
debtor-that the lien OF Judgment here
grows out OF the right to take property In
execution; and where it cannot be so taken
there is no lien until the filing OF the Dill IN
equity, whereby lien is created dating
from the date of filing such bill. This is
what is called in law lis pendenS, the lien
growing out OF the tendency OF the suit.
The Supreme Court says: "The judgments
in no wise affected the trust premises until
the bill was filed. That created lien in
favor OF the judgment creditors. There was
none before This was posterior to the exc
cution of both the deeds OF trust in favor OF
the association and to all the advances made
under them. The court below was clearly
in error in sustaining the exception to the
auditors report, and in giving priority in
payment to the judgments over the amount
secured by the last deed Of trust"
Another important feature in this case is,
that Notwithstanding the fact that the re-
cord disclosed o NEUTRALITY-SUSPICIOUS. &C.
count in the usual form, charging dues on
advances, premiums, fines, &c, strictly in
conformity with the constitution Of the as
ISOLATION, aud although its claim to the en-
tire fund was contested by the judgment
creditors, because Of "fnes," ''eXorbitant
interest,"" &C., &C., yet the Supreme Court
OF the United States, upon thorough exam
ination OF the whole record, delivered the
unanimous opinion to which we have fe-
ferred.
More than usual interest attaches to this
case, because it is the first in which the va
lidity of NEUTRALITY-SUSPICIOUS. contract, in
the form usually made by our District asso-
Citations, has been adiudicated by the SUI
premc Court OF the United States. There
has been much discussion and litigation in
our District courts on the subject and their
, decisions have been generally acquiesced in
by the building associations, but although
the amount in issue about 81, 5OW was com.
paratiyely small, the Washington Co6perc.
tive determined to make test-case and OBJ.
tain decision from the highest legal author.
ity. Their success will be likely to save
much time and litigation in the future
Washington Star.
KELLY WORKING AT HIS M0ToR.-[ From