Source: https://supreme.justia.com/cases/federal/us/115/439/
Timestamp: 2019-04-22 16:07:02+00:00

Document:
The assignee of a mortgage in Pennsylvania obtained judgment of foreclosure against the mortgagor and, by injunction, issued in a proceeding in equity at the suit of the assignee of the equity of redemption, was restrained from sale under the judgment. It was ordered in this suit in equity that the injunction stand until the holder of the mortgage transfer the bond and mortgage, and assign the mortgage suit, on receiving full payment of debt, interest, and costs. Subsequently the injunction was dissolved and the mortgagee was authorized to proceed upon the mortgage unless the defendant in the foreclosure suit should pay the same before a day named in the order, which time was extended by a subsequent order to another day named. No payment or tender of payment was made by anyone until after the expiration of the last-named day. Held that after the last-named day, the mortgagee was not bound to transfer the debt and suit, but could proceed at law on the mortgage and judgment.
United States, although entitled to peculiar respect, when the questions decided arise upon the local law of the state.
The sanction of the court to a conveyance under proceedings and judgment for foreclosure of a mortgage in the Orphans' Court of Philadelphia, being a judicial act, such a deed describing the estate as conveyed subject to an outstanding mortgage, estops the grantee from denying the validity of the mortgage.
If a mortgage in Pennsylvania covers two or more tracts of land, and a sheriff under judgment for foreclosure and execution sells one tract for more than enough to pay the mortgage debt, and then proceeds to sell the other tracts, and all the sales are duly completed, and the deeds to the purchasers duly executed and delivered, without objection on the part of the owners, it is too late to object to the regularity of the proceedings.
In Pennsylvania, the fact that a judgment for foreclosure of a mortgage was erroneous and could have been reversed upon a writ of error does not invalidate a sheriff's sale made under the judgment while the same stands in full force and unreversed.
This was an action of ejectment to recover possession of certain real estate in Philadelphia, brought by the plaintiff in error, a citizen of New Jersey, against the defendants in error, citizens of Pennsylvania, in which there was judgment for the defendants below, which is brought here for review by this writ of error.
1. In 1861, George W. Roberts was seized of the premises in dispute, situate at the S.E. corner of Broad and Oxford Streets, containing in front on Broad Street 48 feet, and extending in depth on Oxford Street 143 feet. On April 13, 1861, the said George W. Roberts mortgaged the same to the Reliance Insurance Company, of Philadelphia, to secure the sum of $5,000.
"and under and subject to the payment of the mortgage debt or sum of $5,000, with interest, made and executed by the said George W. Roberts to the Reliance Mutual Insurance Company, of Philadelphia, dated April 13, 1861, and recorded in mortgage book A.C.H., No. 9, page 71,"
etc. This provision is made in the habendum of the deed, but not in the premises. On the fifth day of February, A.D. 1864, this conveyance was duly acknowledged before the Orphans' Court aforesaid.
3. On February 11, 1865, John Rice and wife conveyed the said premises to Sarah A. Jermon in consideration of $8,000 "under and subject to the payment of the said mortgage of $5,000" held by the Reliance Insurance Company.
4. On June 5, 1867, the said mortgage of $5,000 was duly assigned by the Reliance Insurance Company aforesaid to the defendants, who subsequently foreclosed the same by proceedings in the Supreme Court of Pennsylvania to July term, 1867, No. 154. The action was brought against George W. Roberts, and judgment was duly obtained upon two returns of nihil, but after judgment, both the said Sarah A. Jermon and J. Wagner Jermon appeared and made several applications to open the judgment, which were refused.
5. On February 17, 1868, J. Wagner Jermon and Sarah Ann, his wife, filed a bill in equity in the Supreme Court for the Eastern District of Pennsylvania, to January term, 1868, No. 60, averring that the defendants were creditors of J. Wagner Jermon and were proceeding upon the mortgage for the purpose of realizing their claims against J. Wagner Jermon, and also averring that Sarah A. Jermon had caused a tender to be made of principal, interest, costs, etc., to the defendants, and requested them to execute an assignment of the mortgage prepared and presented to them, which they refused.
injunction do stand until the defendants Lyon and Taylor do execute an assignment of the bond and mortgage referred to in the bill, and a transfer of the suit brought upon the said mortgage, upon receiving payment of the debt and interest secured thereby, together with all costs, upon the execution of which assignment and transfer the said injunction shall be dissolved,"
&c., which said decree was affirmed by the supreme court February 23, 1869, and a procedendo awarded.
On April 3, 1869, the supreme court aforesaid decreed that the injunction should be dissolved and the defendants hereto should be at liberty to proceed upon their said mortgage unless the said J. Wagner Jermon or Sarah A. Jermon should pay the same before the 20th of April, 1869. On April 20, 1869, the time was, upon the application of J. Wagner Jermon, extended to May 10, 1869. No payment or tender was made on or before May 10, 1869.
Lot No. 1. S.E. corner of Broad and Oxford Streets, 48 feet on Broad Street by 111 feet on Oxford Street.
Lot No. 2. South side Oxford Street 111 feet east of Broad Street, 16 by 48 feet.
Lot No. 3. South side Oxford Street 127 feet east of Broad Street, 16 by 48 feet.
"and it appearing that the plaintiffs in the writ are entitled to be paid the sum of $5,748.47, being the amount of principal and interest to day of sale of the mortgaged premises sued on in this case, I have taken their receipt for the same, and balance of purchase money I have as within commanded."
Nos. 1 and 2 was duly acknowledged and delivered to the said defendants. No disposition was made of lot No. 3.
7. As to lot No. 3. By virtue of certain proceedings in the District Court of Philadelphia County of December term, 1866, No. 1421, the premises situate on the south side of Oxford Street, 127 feet east of Broad Street, 16 feet by 48 feet, were exposed to sheriff's sale on January 3, 1870, upon a venditioni exponas issued December 3, 1869, under a judgment obtained by W. A. Arnold against J. Wagner Jermon and Sarah A. Jermon, his wife. The first count of the narr. filed in this action was for materials furnished to the said premises at the request of said Sarah A. Jermon. The second count was for materials furnished at the request of J. Wagner Jermon and Sarah A. Jermon, and the judgment was confessed in open court. At the sale, the premises were purchased by defendant, and on January 22, 1870, the sheriff's deed therefor was duly acknowledged and delivered to defendants.
8. That on the 3d July, A.D. 1872, an ejectment was brought in the Supreme Court of Pennsylvania, sitting at nisi prius to July term, 1872, No. 130, by J. Wagner Jermon and Sarah A. Jermon against these defendants, wherein a verdict was rendered for these defendants, and on March 6, 1876, this was affirmed by the Supreme Court of Pennsylvania, sitting in banc.
9. On March 7, 1876, Sarah A. Jermon, wife of J. Wagner Jermon, conveyed the premises in dispute to William L. Gibson, a citizen of the State of New Jersey, for the consideration of $500. This conveyance purports to be made by Sarah A. Jermon alone. J. Wagner Jermon joined in the covenants, and both she and her husband signed and sealed the deed, and it was separately acknowledged.
but that such an assignment was not made, and the parties, Lyon and Taylor, absolutely refused to make the assignment and receive the money. Counsel, on being asked, say that the money was ready, but was not actually shown Lyon and Taylor or their attorney, and aver that an actual tender was not necessary under the refusal of Lyon and Taylor to take the money and make the assignment."
It will be observed that the tender referred to in this offer was not made by the party obliged to pay the debt or entitled to do so for the purpose of removing the encumbrance of the mortgage upon the property, nor in payment of the mortgage debt and in satisfaction of the mortgage and the judgment rendered thereon, but was an offer made by a stranger to pay the amount due on account thereof, accompanied with a demand to execute an assignment to a named third party of the debt and securities, compliance with which was a condition of the offer of payment. If accepted, the effect would have been to transfer the debt and mortgage and judgment rendered thereon to an assignee, and not to extinguish it. This the plaintiffs were under no legal obligation to do, neither by contract nor by the terms of the decree referred to, inasmuch as the time within which such payment might be made for that purpose was limited by the decree to May 10, 1869. After that, they were expressly left at liberty by the decree itself to proceed at law upon the mortgage and judgment previously rendered thereon.
This question being removed from the controversy, it is urged by counsel for defendants in error that the judgment of the Supreme Court of Pennsylvania in the ejectment in favor of the defendants against the immediate grantors of the present plaintiff below, referred to in the eighth finding of fact, if not entitled to the force of an estoppel as res adjudicata, is at least an authoritative decision of the highest court of the state upon the law of the case, which, as it involves only questions of title to real estate within its territory dependent on its local jurisprudence, ought to furnish the obligatory rule of decision for the courts of the United States.
is regulated by statute. 1 Brightly's Purdon's Digest Laws of Pennsylvania 535.
By the Act of April 13, 1807, two successive verdicts and judgments in favor of the same party will defeat a third ejectment. but where there is verdict against verdict, and judgment thereon, a verdict and judgment in a third ejectment is conclusive. Britton v. Thornton, 112 U. S. 526.
As a precedent, the decision of the supreme court of the state, though single, is entitled to peculiar respect because all the questions decided arise upon the local law of the state, but it cannot have conclusive force in the courts of the United States unless it has become a rule of property. Burgess v. Seligman, 107 U. S. 20; Carroll County v. Smith, 111 U. S. 556.
The plaintiff in error, being a citizen of New Jersey, had a constitutional right by virtue of that fact to invoke the jurisdiction of the courts of the United States, and is entitled to their judgment upon his rights under the laws of Pennsylvania.
The title of the plaintiff is derived from Sarah A. Jermon. Her title was vested in her by the deed from Rice mentioned in the third finding of fact, and that of Rice was acquired by the conveyance described in the second finding, and the proceedings in the Orphan's Court of Philadelphia from which it resulted. Each of these conveyances contains a recital that it is made under and subject to the payment of the mortgage under which the defendants claim.
It is contended, on behalf of the plaintiff in error that he is not estopped by these recitals to deny the existence of the mortgage and to assert that in point of law it was extinguished by the sale ordered by the Orphans' Court, such sales being required by law to be clear and discharged of all liens in the hands of the purchaser, and that consequently he is at liberty to insist that the subsequent sale, made under the mortgage as a subsisting and valid lien, was void.
"just a case when, if the price of the estate belonging to the mortgagee is still in the purchaser's hands, he is in equity estopped from denying that the sale was made subject to the mortgage,"
"having bought the estate with the understanding that he bids so much less for it and should hold that much in his hands to be applied to the excepted mortgage, it does not lie in his mouth at least to say he takes the land discharged of it, under the operation of the general rule that a judicial sale discharges all encumbrances except those expressly secured by statute."
In that case, the circumstances of the sale rested in parol, proof being admitted of what took place, while here they constitute recitals in the very deed which furnishes to the plaintiff in error the foundation of his title. It follows, therefore, that the defendant in error had a lawful right to proceed upon his mortgage; that the judgment thereon was valid, and that the execution sale in pursuance thereof, so far at least as lot No. 1 is concerned, was effectual, when confirmed and executed by the sheriff's deed, to pass the legal title, and to cut off and destroy that of the plaintiff in error.
But other objections are made to the validity of the proceedings under the execution in reference to that part of the premises described as lot No. 2. The levari facias issued upon the judgment upon the mortgage directed the sale of the mortgaged premises for the satisfaction of the debt, describing them as divided into three lots. Lot No. 1 was purchased by the defendants, the owners of the mortgage and plaintiffs in the action, for the sum of $10,000, and lot 2 at the same sale, was also purchased by them for the sum of $2,000. The sheriff's return showed that he took from the purchasers their receipt as plaintiffs in the writ for the amount of the debt and interest, and that he had the balance of the purchase money, as commanded.
It is now contended on behalf of the plaintiff in error that the sale of lot No. 1, being for more than was due to the defendants herein on the mortgage debt, satisfied the judgment and exhausted the authority to proceed further under the writ, and that the sale of lot No. 2 to the plaintiffs in the execution was therefore void for want of power in the sheriff to make it.
Under the laws of Pennsylvania, the proceeding upon a mortgage was by scire facias, in which, judgment having been rendered for the amount of the debt, interest, and costs, the mortgaged premises are directed to be seized and sold on execution by a levari facias for the satisfaction thereof. 1 Brightly's Purdon's Digest, Laws of Pennsylvania 483, § 122.
and only after notice to all parties in interest. Ib., 658, § 122.
To this proceeding the judgment debtor is a party, and at the hearing may make any objection to the confirmation of the sale. The action of the court has all the effect of a judicial decree. Foster v. Gray, 22 Penn.St. 1, 15.
"Most of the cases recognize the deliberative and judicial character of an acknowledgment taken in open court, founded upon the conceded right of all parties having an interest in the question to appear and dispute the propriety or regularity of the official sale, and all of them, from Murphy v. M'Cleary, 3 Yeates 405, to Dale v. Medcalf, 9 Penn.St. 108, distinguish between those objections that touch the foundation of the proceeding, by impeaching the authority of the officer or establishing the existence of fraud, and those which simply suggest irregularities in the process of sale. The absence of authority or the presence of fraud utterly frustrates the operation of the sale as a means of transmission of title, and avoids it from the beginning. Either may therefore be insisted on, even after a formal acknowledgment of the conveyance, but mere irregularities, whether of omission or commission, which do not render the officer powerless or taint the transaction with turpitude may be cured by the tacit acquiescence of those who ought to speak in time."
The correctness of this rule that the acknowledgment of the sheriff's deed in consummation and confirmation of the sale cures all defects except want of power to sell in the officer or fraud in making it being conceded, it is still contended that in the present case, the power of the sheriff to proceed with the sale of lot No. 2 ceased after he had made enough by the sale of lot No. 1 to pay the judgment debt, with interest and costs, and that consequently the sale of the letter was void for want of authority to sell.
But the sheriff acted strictly within the command of his writ. That was to seize and sell the mortgaged premises. If he proceeded to sell more than was sufficient to pay the debt, it was at most but a mere irregularity, even if it could be so considered.
He had no judicial authority to determine questions that might arise upon the sale or questions of distribution. The sale of lot No. 1 might, so far as he or anyone could know, be set aside, and the proceeds of lot No. 2 might prove to be necessary to satisfy the execution. His duty was merely ministerial, and so long as he pursued only the literal precept of the writ, he cannot be said to have acted without authority and be converted thereby into a wrongdoer. For aught that he might know, and for aught that we can tell from the present record, the whole proceeds of the sale of both lots may have been necessary to pay other liens upon the property, entitled to satisfaction on distribution. The presumption certainly is, in accordance with the maxim omnia proesumuntur rite et solemniter esse acta, that the surplus was either so applied, in which case, no more property was sold than was necessary, or it was paid as the law directs to Mrs. Jermon, its owner, and in that event she certainly is not in a situation to complain of the invalidity of a sale, the fruits and proceeds of which she received and has ever since continued to claim and hold as her property. She was a party to the proceeding, and had the opportunity then to present to the court the very objection now made to the validity of the sale, that more property had been sold than was in fact necessary to answer the exigency of the writ and satisfy the demands entitled to the proceeds. That was a question peculiarly for that court to determine, and that was the appropriate time for its determination. It was either then made or waived, and, in either view, the action and judgment of the court in directing the acknowledgment and delivery of the deed was conclusive. We conclude, therefore, that the objections to the title acquired by the sale of these two lots cannot be maintained.
consequently all proceedings under it, including the sale on execution to the defendants, are void because the declaration, one count of which was for materials furnished to the premises sold at the request of the wife, does not sufficiently allege a contract binding upon her as a married woman, and because the judgment was confessed, and not rendered upon a verdict or finding of the facts.
"Unless, then, in this case, Mrs. Jermon or those claiming under her would be absolutely concluded by the judgment under which the sheriff's sale took place, which constitutes the foundation of the vendor's title, from controverting her liability for the debt for which that judgment was confessed, in an action of ejectment to be hereafter brought for the property, the purchaser will be exposed to the annoyance and peril of such litigation."
"As to the premises number three, it may be conceded that the judgment against Mrs. Jermon was erroneous and might have been reversed upon a writ of error, but this would not destroy the sheriff's sale made under the judgment, while standing in full force and unreversed. This judgment was obtained by W. A. Arnold, with whom Lyon and Taylor had no connection."
The opinion in Swayne v. Lyon, ubi supra, is cited with approval also in Quinn's Appeal, 86 Penn.St. 447, 453.
We have examined with care all the decisions of the Supreme Court of Pennsylvania cited by counsel for the plaintiff in error, and do not find any that are inconsistent with its judgments upon the title here in question, in Swayne v. Lyon and Jermon v. Lyon, to which we have referred.

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