Evening star. [volume] (Washington, D.C.) 1854-1972, 1876-04-17
Important Decision I'm n Building As
ISOLATION Case by the q. y. Supreme



The case OF Morsell ct al. VS.. The First
National Bank OF Washington, decided by
the Supreme Court OF the United States on
the 10th OF last month, is of great practical
utility TO the legal profession and the COM
munify. The unanimous OpiniOn of the
court was delivered by Mr.. Justice Swayne,
and presents the main question at issue IN
50 clear a manner as to exclude the possi-
bility OF doubt in the future. The record
shows that the appeal was taken by the
washington Co operative Building and De-
Posit Association from decree OF the Su E.
preme Court of this District passed in case
OF the First National Bank OF Washington
We. John W. MOrselI, Miclael p. CalIan ct
al, On the following state of facts:-No-
yember 4, 1861, Morsell purchased certain
real property in the city of Washington, and
executed deed OF trust to secure the bal
ance OF the purchase money, (S1O, 0O0) Oc-
tober q, 1SG9, he purchased advances on his
stock In the Aforesaid building assocIa
ton and, 10 secure the payment OF dues,
&C. &c, in accordance with the consti-
tuition OF the association, he executed the
usual bond and the deed of trust on the
same property January p, 1871, the
bank obtained Judgment against Morsell,
and on the 10Th OF February of the same
year Means, Skinner & Co of Baltimore.
the judgments having been rendered by
the Supreme Court of the District March
LIST, ISL, Morsell executed another deed
OF trust TO secure. the association the
prompt payment OF dues, sc. Under this
last trust 81 800 and upwards were due on
the I'd OF September, ISL, when the bank
MED a Judgment creditors bill in equity
making Morsell and the building associa-
tion and its trustees, parties defendant. The
property was sold pursuant to a decree of
The court upon this bill, and the proceeds
which were not sufficient to pay the ex-
penses Of sale, the building association debt,
and the judgments, were held subject to the
further order of the court. A controversy
over the fund accordingly arose before the
auditor (Mr. Walter S. Cox, who, I'm an
elaborate report, sustained the claim of the
association 10 the entire fund, nOtwithstand-
ing portion was secured by the last deed of
trust, which post dated the judgments. The
counsel Of the judgment creditors excep pied
10 the report OF the auditor: list. Because il
gave priority in payment to the amount
secured by the last deed of trust over the
judgments. ID. Because it accorded the
building association "a large sum for exorbi-
tsnt fines imposed upon and charged against
the defendant M)rselI;" and Sd, Because IL
allowed to the building association unlaw-
money, sc. The Supreme Court of the Dis
trict in general term (Mr. Justice wylie dis
SentiDg) decided that the Judgments having
been rendered aud docketed prior to the
record of the last deed OF trust should have
priority OF payment out OF the funds. The
building association appealed to the SUI
preme Court of the United States.
Although the common understanding OF
the law by the profession here, prior to the
decision ofthiS case by the District Supreme
Court, was that a judgment did not create a
lien upon real property If 1t was encountered
by 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 considerable doubt and I'M
certainty about II. Many valuable land
titles In the District had been passed on
the theory that judgments were not liens on
an equity OF redemption-a right to redeem
from an Northumberland until the nling
OF q judgment creditors bill TO enforce such
Judgment against the specific property OF the
debtor thus encountered, 1t remained wholly
unaffected by all judgments rendered subse-
quent TO such encumbrances. And so II was
In this case. When the judgments were rem
dered, MOrsell had no interest in the prop
erty excepting an equity of redemption,
OF trust, and II was held by the Supreme
Court Of the United States that an equity OF
redemption in lands In the Maryland part
OF the District of Columbia, under the COM
mon law, which was In force in 1901, the date
OF the cesstOn, and Is yet in force-could not
besold under execution against the Judgment
deotor-that the lien OF Judgment here
grows out of the right TO take
property in execution, and where il cannot
be so taken there is no lien until the filing OF
the bill in equity, whereby lien Is created
dating from the date OF filing such bill. This
Is what is called in law a Us pendeas, 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 nled. That created lien In favor
OF the judgment creditors. There was none
before. This was posterior to the execution
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 audi
tors report, and in giving priority in pay
ment 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
record disclosed building association &C.
count in the usual form, charging dues on
conformity with the constitution OF the as
ISOLATION, and although its claim 10 the
entire fund was contested by the Judgment
creditors, because of "hnes," "exor0itant
interest" SC, &c, yet the Supreme Court of
the United States, upon thorough examina-
ton OF tie whole record delivered the unani-
nous opinion 70 which we have referred.
More than usual interest attaches TO this
case, because 1t is the first In which the va
lidity OF building association contract. i'm
the form usually made by our District asso-
Citations, has been adjutica,ed by the Su-
preme Court Of the United States. There mas
been much discussion and litigation In our
District courts On the subject, and their de-
cisions have been generally acquIescei a b
the building associations, but although the
amount In issue (about 81 500 wss com para
lively small, the Washington Co operative
determined 70 make q test case, and obtain
a decision from the highest legal author
ity. Their success will be likely to
save much time and litigation in the