Case Name: John Stoney, John Magrath, and others, v. Henry Shultz, Thomas Harrison, and others
Court: South Carolina Court of Appeals
Jurisdiction: South Carolina
Decision Date: 1834-01
Citations: 1 Hill Eq. 465
Docket Number: 
Parties: John Stoney, John Magrath, and others, v. Henry Shultz, Thomas Harrison, and others.
Judges: O’Neall and Harper, Js., concurred.
Reporter: South Carolina Equity Reports
Volume: 10
Pages: 316–341

Head Matter:
John Stoney, John Magrath, and others, v. Henry Shultz, Thomas Harrison, and others.
The general rule that there is no implied warranty in sales made by a sheriff or other ministerial officer, applies exclusively to the quality and property of the thing sold ; it does not apply to cases where the sheriff or other officer assumes an authority where none is given by law. In every case there is an implied covenant on the part of the sheriff, that he has authority to sell; and the recital in his deed of his authority, as effectually estops him, as if it had been an express covenant. [*493]
Under the Act of 1791, the Court of Law has no authority to foreclose a mortgage of lands where the mortgagor is out of possession ; and the sheriff having in such case, under an order of the Court of Law, sold the mortgaged premises and received the purchase money and applied it to the satisfaction of the mortgage and a judgment against the mortgagor, the sale is void, and the purchaser has the right to be reimbursed the sum paid. Primarily the sheriff is liable, as also are the parties who received the benefit, and at whose instance the sale was made ; but in order to avoid multiplicity and circuity of action in the Court of Law, this Court will order the lands to be sold to reimburse the purchaser, and in relief of the mortgage and judgment creditor. [*495]
Judgment creditors of a co-partnership may be compelled by the purchasers of the individual property of one of the partners, to exhaust the partnership property before they resort to the property purchased by them ; and if the creditors release the partnership property from the lien of their judgments, they are without any remedy against the purchasers. (Ob. dial.) [*496]
At common law the legal estate vests in the mortgagee ; after condition broken he is entitled to the possession of the land, and may maintain a possessory action against any one in possession and is entitled to receive the rents from the tenants. The Act of 1791, (1 Faust, 63) has made no change in the common law in this respect, where the mortgagor is out of possessionthe proviso of the Act renders it wholly inoperative when the mortgagor is out of possession; and therefore in such case the mortgagee still has a right to receive and retain the rents, having given notice of the mortgage to the tenants in possession. [*497]
A sale and conveyance of land by the sheriff, in pursuance of an order from the Court of Law for the foreclosure of a mortgage, when the mortgagor was out of possession, although void as official acts, for the want of authority in the Court of Law to make the order, will still operate as an assignment of the legal estate of the mortgagee. The sheriff will be regarded as the private agent of the mortgagee, and although his authority be only by parol, the answer of the mortgagee admitting the facts, is a sufficient compliance with the Statute of Frauds. [*499]
In ordering a sale of mortgaged premises which had been sold by the mortgagor subsequent to the mortgage, in lots to several purchasers at different periods, the Court directed the sale of the lots in the order in which they had been conveyed —beginning with tbe last, and proceeding according to the order of the dates, to the first [*500]
Allowing credit on a sale of land for the foreclosure of a mortgage, is not a violation of the obligation of contracts. [*500]
Order by the Chancellor for the publication of notice to creditors to come in and prove their demands reversed, sufficient notice having been previously given. [*500]
The mortgagee is only entitled to the land and the rents accruing from it in the condition it was when mortgaged ; and where the mortgagor had sold the land, and the purchasers had improved, and thereby increased the rents, the Court directed the rents to be so apportioned that the mortgagee should only receive the ground rents. ['*501]
On the 5th of May, 1823, Henry Shultz purchased 398 acres of land called the Leigh Tract, from Whitefield Brooks, Commissioner in Equity, for $15,500, and mortgaged the same for the money. The mortgage was not paid, but Shultz built a town on the land, and added it to the town of Hamburg; and on the 4th June, 1824, mortgaged the same land with the exception of one lot, to W. E. Snowden, for $36,000. On the 3d December, 1824, W. E. Snowden failed, and assigned this mortgage .among other things to John Stoney and John Magratk, in trust for his creditors. On the 18th January, 1825, Shultz sold at public sale a number of lots in Hamburg, being part of the mortgaged land. The sale was continued on the 22d' February and 28th March, 1825, and many lots were disposed of. By the terms of the sale half the purchase-money was to be paid in cash, and all notes or debts of Henry Shultz to be received in payment; the other half to be secured by *bonds bearing interest at seven per cent., the interest payable annually, and the principal at the option of the purchaser.
Afterwards Mr. Brooks sued on Shultz’s bond and recovered a judgment at law, and at Spring Term, 1821, an order was made by consent for the sale of the premises, on the first Monday in June next, on a credit of six and twelve months, the titles to be signed but not delivered ; and in case of failure of the purchaser, the sheriff to re-sell under the same levy. On the first Monday in June, 1821, the sheriff sold, and Shultz became the purchaser at $55,000. He did not pay any money, and on the 4th December, 1827, the sheriff, by the directions of the plaintiff, exposed the'premises to sale for cash, when John Williamson became the purchaser for $22,000. The purchase was made on the joint account of John Williamson, John Stoney, John Magrath, Paul Fitzsimmons and C. Breighthaupt. The sheriff received the money, made him a deed for the land, and out of the money received from Williamson, paid Mr Brooks principal, interest aud costs, and paid the judgment of Augustus Moore v. Henry Shultz. Williamson attempted to take possession— some of the tenants attorned to him, and others refused, against whom actions at law were commenced.
At October Term, 1828, Henry Shultz was admitted to the benefit of the Insolvent Debtors’ Act, and assigned all his estate, including his right in the 398 acres, to Thomas Harrison, who refused the trust.
In April, 1830, Law Journal, 184, one of Williamson’s actions was tried at Edgefield, and the plaintiff was nonsuited, on the ground that the sale by the sheriff was irregular and void, and the Court of Appeals dismissed the motion to set aside the nonsuit.
Williamson died, and John Stoney and John Magrath proved his will.
October 4th, 1830. Bill filed by .John Stoney, John Magrath, and W. E. Snowden, against Henry Shultz, Harrison and the purchasers of Hamburg lots, twenty-six in number, prays the appointment of a trustee in place of Thomas Harrison, and that Shultz may be restrained from suing the tenants of Williamson. That an account may be taken of the amount of the incumbrances, and that the premises may be sold, and Snowden’s mortgage paid.
'^October 8th, 1830. Bill filed by John Stoney, John Magrath, Paul Fitzsimons, and C. Breighthaupt, against Henry Shultz, Whitefield Brooks, and Thomas Harrison, prays that they may have the benefit of Brooks’ mortgage and of the judgment, to which the money paid by Williamson was applied. That Thomas Harrison may execute his trust, or that another trustee be appointed.
4th December, 1830. An order was made restraining Shultz from suing Williamson’s tenants; and appointing Her Boyce and Thomas Harrison, trustees for the insolvent estate of Henry Shultz, authorizing them to take possession of all the estates included in Shultz’s schedule, saving to the purchasers from Shultz, their rights.
8th December, 1830. Plaintiffs amended the bills by making Boyce and Harrison parties, and praying that the estate of Shultz might be distributed, according to the Insolvent Debtors’ Act, and that the trustees may execute their trust.
1st February, 1831. The trustees advertised for all demands against Shultz to be rendered to them, which was continued for three months.
2d May, 1831. Bill-filed by John Stoney and John Magrath, against the purchasers from Shultz, states that Shultz was indebted to insolvency, to a great number of persons who recovered judgments against him, prior to January, 1825. That the lands in the hands of the purchasers are liable to those judgments, as well as the mortgages of Brooks and Snowden. Prays for injunction and receiver.
June, 1831. A reference was ordered, and the Commissioner was ordered to ascertain the debts and assets of Henry Shultz.
20th July, 1831. A dispute having arisen between Mr. Whitner, one of the defendants, and his tenant, as to the order of December, 1831, the Chancellor explained the order by declaring that Mr. Whitner had liberty to proceed against his tenant, who had attorned to Williamson.
1st October, 1831'. Bill filed by John Stoney, John Magrath, Paul Fitzsimons and C. Breighthaupt, against B. F. Whitner, James Clark, B. M. Blocker, Maurice Johnson and James Cobb, sets forth the debts due ^ Shultz on mortgages *and judgments prior to January, 1825 — the assignment of the judgments to Paul Fitzsimons, on the joint account of himself, Williamson, and the other complainants; Shultz’s sale to the defendants ; the sale by the sheriff, the purchase of Williamson and his entry. That the tenants of the defendants attorned to him ; that since the Court have determined that Williamson did not acquire the fee simple, he must be considered as a mortgagee in possession, and accountable for the rents and profits, but the defendants have commenced actions against the tenants for the recovery of double rents, damages, &c.; that the defendants are bound to contribute to pay off the mortgages and judgments; and that the rents received by Williamson are a proper subject of account, between complainants and defendants. That the land is not sufficient to discharge the liens upon it. That the defendants unconscientiously retain possession, though they have not such a title as will enable the assignees of Shultz to compel them to pay the purchase-money, and run away with the rents, which ought to be applied to the payment of the creditors of Shultz, who have their liens on the land.
25th October, 1831. An injunction was granted,- preventing the defendants named in the bill of 2d May, 1831, from suing the tenants of Williamson, or persons holding under him.
December, 1831. Harrison and Boyce were appointed receivers for all the Hamburg lots. But a proviso was inserted that this order' should not extend to purchasers from Shultz in actual possession ; and the trustees of Mrs. Whitner .were allowed to retain, on giving security. This order was further explained by an order of 28th January, 1832, to the same effect.
The answers of K. Boyce and T. Harrison, submit to perform the order of the Court. The answer of Mr. Brooks admits the sale and the receipt of the money due on the mortgage from Williamson ; avers that he has paid it over without notice; that one-ninth part thereof was paid to the complainants, as assignees of Snowden; he has no objection to a. decree, setting up the mortgage in favor of the plaintiffs, and insists he is improperly made a party.
*B. F. Whitner claims three lots — insists that one is the lot excepted, in the mortgage to Snowden — that the other two were bought on the 18th of January, 1825 — that the sale was advertised many weeks — that Shultz reserved part of the lots for the payment of Brooks— that he owned one-ninth part of that mortgage himself. He understands that his purchase was secure from that mortgage. Shultz stated that he had given Snowden a mortgage, but it was not recorded in time, and would not affect the sale, and that Snowden, who was present, consented to the sale. That Snowden himself was a purchaser, and there appeared the utmost privity between him and Shultz ; half the purchase-money was not to be paid, unless both parties agreed. The defendant supposed Snowden was to be paid by his purchases, or out of the reserved property or the reserved payments. That the lots sold high ; two of them were bought by the defendant for $1,600. He paid half the purchase-money, and complied with the terms, by improving. That he knew Snowden had stopped payment, but did not know he had assigned : and the first public notice by his assignees was on the 10th February, 1825. He trusts that the Court will not suffer the assignment to avoid Snowden’s consent to the sale, and operate so great a fraud to tona fide purchasers.
That he was in peaceable possession, and rented to Holmes, Gray, and Tatom — that the plaintiffs prevailed on his tenants to withhold the possession and rents of the premises; that the defendant sued his tenants, and the case was delayed, first to await the trial of the action at law, and since by pretence of an injunction. That one of his tenants has become insolvent, and the circumstances of the others are doubtful. He prays that the plaintiffs be decreed to pay his rents.
B. F. Whitner’s answer to the bill of October, 1831, states that-B. F. Whitner & Co., about the 28th July, 1825, bought lot No. 1, for $1,000, and paid for it money, goods, work, labor, &c., and in taking up a debt of Shultz to Weyman. That in .-they bought two unimproved lots for $1,600 dollars, and paid $800. That these lots were seized and so^’ an(^ *00nTeyed by the sheriff to Morgan P. Earle, and after-wards by him to J. N. Whitner, and this defendant, in trust for his family, insists his purchase was fair and bona fide. That the trust estate is liable to pay the $800, and he has always been willing, provided his title is cleared up. That Williamson and his agents claim to be the owners of the Lehigh tract, under color of a title from Thurmond, sheriff of Edgefield, although they were notified, by Shultz, that the sale was illegal, and they have no equitable right to set up the mortgage, because they bought with notice. That they colluded with his tenants to get possession, and prevented him from recovering, by postponing the trial. That the rents were, for the front stories on No. 1, $500, and for the lower story, a rent equal to $260. For the tavern on No. 1, and the stables on the other two lots, $600 — in all $1,850, when the plaintiffs interfered. That he claims double rent, viz.: from Tatom, from 4th December, 1827, to the 1st August, 1831, and from Holmes a.nd Gray from the 1st October,. 1828, to the 1st August, 1831. That by the plaintiff’s admission, they are liable for the tenants, and bound to account to the defendants for rents and- double rents, amounting to $8,177. That Tatom is dead — insolvent; Gray has also died, and is believed to be insolvent. He hopes to prove that the premises were restored to him by the consent of the plaintiffs, or their agent.
That the judgments which the plaintiffs claim, are founded on Bank bills, issued by the Augusta Bridge Company. That in 1826 they filed a bill, alleging that they or many of them were fraudulent, or kept open by collusion, and an injunction was granted against them. That the plaintiffs afterwards, in 1828, purchased up these judgments, on speculation, for twenty-five or thirty cents on the dollar, or thereabouts. That the above bill was then dismissed, and another filed against the Bank of the State of Georgia, charging that these judgments constituted an equitable lien on the Augusta Bridge, and praying that a receiver of tolls might be appointed. That this bill was afterwards dismissed, in consequence of a compromise between the Bank and the plaintiffs, by which the Bank refunded to the plaintiffs the sum they had paid for the judgments,* it being agreed at the same time, that the judgments should be kept open to aid the plaintiffs in their speculations on Hamburg, if necessary. That Shultz made a compromise with the Bank in 1829, in regard to his claims on the Augusta Bridge, which included these same judgments. So that if they ever constituted a. lien on the property now iu dispute, they have been long since satisfied, and are now kept open by connivance of the parties, for the purpose of fraud.
That the bill filed by the assignees of Snowden, does not make the plaintiffs parties, so as to make them account for mesne profits, and a very small part of these profits has accrued on the property embraced in the mortgage to Snowden, to which any pretence of claim can be set up. He prays that the plaintiffs may be decreed to pay the rents and profits they are wrongfully withholding from him.
The answers of the other defendants, Holloway, Marsh, Johnson, Co- vington, Blodgett, Clark, Knight, Hall, and Ware, rely on the same grounds.
The answer of James Cobb relies on a lease of the 16th January, 1824, from Shultz to Warharn Cromwell, at $500 per annum ; to pay a debt of $3,000, defendant took an assignment from Cromwell. He insists that this lot is excepted in Snowden’s mortgage — that the rents from this lot, while Williamson had possession, were worth $910 per annum. He claims eighteen lots as purchaser, in January, 1825.
Mr. Terry, the Commissioner of the Court, by his report, dated ■- -, found the sum due, on the account of the mortgage to Brooks, and a judgment of Augustus Moore, which was paid off by the money received from Mr. Williamson. He found the amount due on the judgments against Henry Shultz, assigned to Williamson, to be $8,120; and the amount on Bridge bill judgments, to be $33,114 — and the amount due on Snowdon’s mortgage.
The report states that he had given notice by the newspapers for all creditors to come in, and sets forth a schedule of all the debts which had been proved.
The report finds that the assets to pay these debts consist* of three hundred and ninety-eight acres, of which the principal value consists of the lots of Hamburg. That about forty of these lots are improved, and they are nearly all claimed by purchasers from Shultz, in 1825 and 1826, a statement of which is annexed to the report. That these purchasers had given evidence of the damages they had sustained by Williamson’s interference, and of Snowden’s assent to the sale in 1825.
The plaintiffs'excepted, that the report contained a judgment of Otis & Lawrence, in the list of debts, which had not been proved ; and set forth a list of debts, in the order in which they should be paid, as the Commissioner had found, and ought to have reported them.
These several causes were heard as one, by Chancellor Johnston, at Edgefield, on the 19th June, 1832.
Evidence was given to invalidate the Bridge bill judgments, which were assigned in 1827 to Paul Fitzsimons, on account of himself and the other plaintiffs. Payment of those judgments is resisted on the ground that they are partnership debts of John M’Kinnie and Henry Shultz, and should be paid out of the Augusta Bridge, as partnership property; and that the plaintiffs have released the Bridge, and thereby parted from their rights. This defence depends on the following case :
On the 1st of Juty, 1816, John M’Kinnie and Henry Shultz formed a partnership, under the name of the Bridge Company, and issued paper money, called “ Bridge Bills.” The stock of the company consisted of the bridge, valued at $75,000 ; houses in Augusta, valued at $25,000, and lands in Carolina, valued at $5,000. On the 21st April, 1818, Shultz, in consideration of $63,000, and a covenant to save him harmless from the partnership debts, conveyed all his interest in the Bridge Company to Barna M’Kinnie, and retired from the concern, which was announced on the 10th February, 1819. On the 12th March, 1819, John & Barna M’Kinnie executed their bond to Shultz, in $500,000, conditioned to save him harmless from the Bridge bills. On the 10th June, 1819, J. & B. M’Kinnie mortgaged the bridge, with other property, to the Bank of the State of Georgia, to secure $90,000. Under an execution against Barna M’Kinnie, *the bridge was sold, and bought by the Bank. In May, 1821, the mortgage of J. &B. M’Kinnie was foreclosed, and the property advertised for sale. On the 9th May, 1821, Henry' Shultz and C. Breighthaupt filed their bill in the United States Court at Savannah, to enjoin the sale of the Bridge, insisting that it was partnership property and should be applied to pay Bridge bills. C. Breighthaupt joined in the suits, as a holder of Bridge bills. The injunction was granted, and on the 28th December, 1821, an order was made by consent, appointing F. Walker and C. Fitzsimons, Commissioners, to take possession and sell the Bridge, and requiring all parties to join in a power of attorney to them. This was done, and they sold the bridge on the 28th November, 1822', for $70,000, to the Bank of Georgia, who paid the money, which was deposited in their vaults, to abide the events of the suits. By another order $5000 were directed to be paid to the plaintiffs, upon security to account for the same when required. The bill was afterwards dismissed for want of jurisdiction. Whereupon Shultz took possession of the Carolina part of the Bridge ; and John Williamson filed a bill against the Bank, Shultz and M’Kinnie claiming payment of the judgments assigned to Fitzsimons, on the same grounds taken by Shultz in the bill in the Federal Court. The Bank compromised with all the parties. On the 30 December, J. M’Kinnie, B. M’Kinnie and their wives released dowers and all demands. On the 8th May, 1829, P. Fitzsimons,'in consideration of $10,000, released all claims on the bridge, under the Bridge Bill judgments ; and on the 15th September, 1829, Henry Shultz, in consideration of the like sum, released all his demands. The following documentary evidence was produced by the defendants, viz.: Paul Fitzsimons to the Bank of Georgia, 8th May, 1829 — release ; Henry Shultz to the Bank of Georgia, 15th September, 1829 — release.
September, 1829 — Release of all demands on the Bridge.
J. Williamson v. the Bank of Georgia, John M’Kinnie and Henry Shultz. Bill filed 6th May, 1828. Answer of the Bank, 10th May, 1828.
Stoney & Magrath, assignees of Snowden, u. Andrew Lowe. Bill filed 25th May, 1826.
*Tke plaintiffs produced an office copy. — Henry Shultz to Barna M’Kinnie. Conveyance of the Bridge and Bridge Company Stock.
J.,& B. M’Kinnie to the Bank of the State of Georgia. 10th June, 1829. Mortgage of the Bridge.
William Lambkin to the Bank of the State of Georgia — 19th December, 1821. Deed for the Bridge.
The Bank of Georgia v. J. & B. M’Kinnie. Foreclosure of Mortgage —May, 1821..
Mr. Hale was examined for the plaintiffs.
The Bank had large claims against the M’Kinnies, and took a mortgage dated 3d May, 1819. There was a misnomer — and another mortgage was executed on the 10th June, 1819. The mortgage was foreclosed, and the Bank received possession from the sheriff of Richmond, and kept the possession until the suit in the Federal Court. — After that suit was dismissed, the Court of Equity took possession of the Carolina end, and the Bank kept the Georgia part. A compromise was made with Paul Fitzsimons, 28th May, 1829. The Bank claimed under their title. — They did not admit the right of Fitzsimons; but not knowing what the issue of a suit might be, paid for a release of all demands— compromised with the M’Kinnies first — the dower of their wives was released, and they gave up the title deeds. Another compromise was made with Shultz, the 15th September, 1829.
Shultz may have given up some Bridge bills, which he said he had bought, or which were delivered to him as agent for others. The M’Kinnies owe the Bank more than $90,000 in executions.
Cross-examined. The profits of the bridge have been generally received by the Bank. The tolls have amounted to upwards of $100,000. The Bridge has been almost rebuilt. Last year, for the first time, something was carried from the Bridge to the profit of the Bank Bridge bills have sold at 12-g- cents on the dollar. ' The Bank claimed in their own right, under their mortgage and the sale of the sheriff of Richmond.
The transcript of the proceedings in the Federal Court, *was introduced, to show on what grounds the Brigde was supposed tbe liable to the Bridge bills, and how the claim was resisted.
The defendants called James Marsh. He stated that Snowden was at the sale in January, 1825, and told him he and Shultz had come to an understanding, and he expected to buy the property himself. He did not tell witness he had made an assignment.
Robert M’Donald examined. Breighthaupt told him they bought up Bridge Bills — some at 3Tf, some at 50 cents — bought as low as they could, to protect Snowden’s debt.
Henry Shultz was called as witness. His testimony was objected to, but received.
“ It was known at the sale that Snowden and Brooks had mortgages, and that they were not paid. As to Brooks’ mortgage, property was reserved, and if that was insufficient, I sold subject to the mortgage. As to Snowden, I said he is present and consents — he was five or six feet from me at the time. Snowden and I had made an arrangement. — He was to buy a square — I knew he had made an assignment, but I did not make it known. He brought me a letter from his assignee, saying he was authorised to-settle the Hamburg business — I considered that this left him the same power he had before. That letter cannot be found. It was agreed that I should receive half the purchase money in my notes, the rest in seven per cent, stock, which he was to take in payment of his mortgage, till it was satisfied. He bought one lot and paid the money.” [Here were produced the original papers of the settlement between him and the M’Kinnies, and an entry respecting the bridge as part- of the stock of the Bridge Company, liable to the payment of Bridge bills.]
He admitted the advertisement shown him, and that he intended to sell, whether Snowden consented or not. — Thinks Snowden an honest man. — He never asked Snowden for a release, thought it unnecessary.
Mr. S. said he compromised with the Bank at $10,000; he bound himself not to induce the Bridge Bill holders to sue the Bank.
*Defendants offered in evidence a receipt of C. Breighthaupt to George Glenn, for $5000, paid by order of the Federal Court in the case of Shultz and Breighthaupt v. the Bank of Georgia.
The Chancellor by his decree, declared the mortgage of Brooks and the judgment of Moore to be subsisting incumbrances for the benefit of Williamson — that the lands in the hands of the purchasers were liable as well to the Bridge Bill judgments as to the mortgage of Snowden; and that Williamson should account as a mortgagee in possession — but that a portion of the rents should be allowed to the purchasers for their improvements.
His Honor ordered the lands to be sold on a credit — the case to be referred again to the Commissioner to ascertain the debts of Shultz, and to take the accounts — and ordered Breighthaupt to account for the $5000, received from the Federal Court in May, 1825.
The plaintiffs appealed from so much of this decree as declares that the rents received by Williamson, are liable to be apportioned between him and the purchasers who have improved. They also appeal from the order made by his Honor in the following particulars.
1. The sale of the premises on credit. They submit to the Court that they are entitled to be paid in money, and that if payment of a debt which is their due can only be obtained by a judicial sale on credit, the decree or order of the Court in such cases is to all intents and purposes as much a violation of the obligation of contracts, as an instalment, replevin or alleviation law.,
2. The reference to the Commissioner. — They bring to the view of the Court that the trustees advertised for creditors three months, and that Mr. Boyce has set forth in his answer, the names of the creditors who have come in to prove their demands. That the Commissioner afterwards by the order of the Court advertised three months for creditors, and has made his report of the creditors who have proved, and of the amount of their demands, and the order of reference is therefore superfluous — that it tends to delay and burthen *with additional expense, the complainants and all the creditors who have come in, and that it ought not to be made.
3. From the apportionment of the rents — they submit that Mr. Williamson is accountable, as a mortgagee in possession — that the amount of rents which came to his hands is to be deducted from his debt, and that he is not answerable for those rents in any other way.
4. From the order requiring Mr. Breighthaupt to .account for $5000, received from the Register of the Federal Court, in May, 1825. Mr. B. insists that this transaction has no connection with the present suit— that if he is accountable to any body it is to the Bank of Georgia, or the Federal Court, and he has accounted to both, and his bond has been given up — that he is certainly not accountable for the same in this suit, and that the reference ordered is neither proper in itself nor embraced in the pleadings.
Defendants appeal from the decree of the Chancellor :
1. Because lie erred in setting up Brook’s mortgage in favor of the complainants and Moore’s judgments.
2. Because if complainants are entitled to be subrogated to Brooks— it can only be to those rights which would have accrued if the sale had been good — they have no Equity to more than a valid sale would have given them.
3. Because the Chancellor erred in establishing the Bridge Bill judgments on the Hamburg lots.
4. Because the Chancellor erred in establishing the lien of the Bridge Bill judgments against the lot owners.
5. Because he erred in decreeing that the rents, however obtained by Williamson and Ms representatives, should not be returned to the lot owners.
6. Because he erred in not decreeing that the lot owners should receive rents and double rents, for those lots from which they had been ejected,
1. Because he erred in not decreeing that the lots should be sold according to the dates of the deeds for them, beginning with the youngest.
The case was argued at May Term, 1833.
*Blanding, for the defendants.
First — As to the rights of the executors of Williamson under Brook’s mortgage. — He contended, 1st, that they have none; 2d, that they have none against the lot holders.
The right of substitution or subrogation is derived from the civil law, 1 Poth. on Ob. 245. The security may require a creditor to assign all securities. There are different classes of cases — one is subrogation, the other, substitution ; 1 Poth. on Ob. 320. Where a security pays off a debt he must get an assignment, or demand it, to entitle him to the rights of the creditor: but the Court will not make the substitution in favor of a stranger who voluntarily pays the debt and relieves the fund ; 1 Domat, 360. He is entitled to the place of the creditor, 1st, where there is an assignment; 2d, where he pays under a judicial order; 3d, where he pays with the assent of the debtor. But if any will be prejudiced there will be no substitution. 4 Eq. Hep. T4; Smith v. Cunningham, Harp. Eq. B,ep. 91. And see 8 D. & E. 310a 614 ; 1 lb. 21, as to the right at common law to pay money for another. Before the judgment of Brooks, Shultz had sold and put the lotholders in possession — at the sale to foreclose the mortgage he forbid it, and gave notice that it was void on the ground that the credit at the first sale had not expired. With a knowlege of these facts the sale was made, the money paid, and the titles executed. The complainants did not then contend for the right of subrogation. There were two sureties liable before the lot-holders — the unsold lots, and Shultz’s personal property. But Shultz having sold and being out of possession when the mortgage was foreclosed, the order for the sale was void as against Shultz’s purchasers in possession. Williamson bought, therefore, only the unsold lots, and his subrogation can only extend to them. Moore’s judgment must stand on the same footing. According to the proviso of the Act of lY91, (1 *Faust, 63,) and the decision iti Durand v. Isaacs, 4 M’C. 54, where the mortgagor is out of possession, and his alienee in the Court of law cannot order a foreclosure — the order was therefore void as against the alienee. But the ground of relief relied on appears to be mistake. There was no mistake of fact, and it is not a mistake in law, in which both concur in mind. It may be ignorance of the law in one, but this affords no ground of relief.
Secondly. What effect is Snowden’s mortgage to have against the purchasers of January, 1825 ? One lot and two leases previously executed, held by Whitner and Cobb, were excepted from the mortgage. But the decree does not exempt them. The decree of the Chancellor supposes that nothing was sold but the equity of redemption, but it is contended that there was a sale of the absolute fee. Snowden was present, was himself a purchaser, permitted the *sále, and the fee simple value was given, and it was stated that there was property reserved sufficient to pay the mortgage, which statement he did not contradict. His presence and acquiescence was a waiver of his lien, 1 Domat, 363 ; ^ Yes. 389 ; or otherwise a fraud will have been practised .on the purchasers.
Suppose, however, all the mortgages and judgments to be set up, still the defendants are entitled to rents and profits, and double reuts The’ Chancellor supposes the proviso to the act of 1791 to be a qualification to the whole act, and that therefore, as between the mortgagee and alienees of Shultz, the mortgagee is the legal owner. In this, however, it is submitted, he is mistaken. The first part of the proviso declares that it shall not defeat suits pending at its passage ; the second merely qualifies the right of foreclosure, and restricts it to a particular case, and does not apply to *the second clause of the act, which denies the possessory action in toto. The equity of redemption, as it is called in the act, has been held to be a legal estate, and the subject of levy and sale by the sheriff, as the property of the mortgagor; but if the Chancellor’s construction be correct, there is no legal estate.
If this construction be correct, who is entitled to the rents and profits ? The rule is correctly laid down in Green v. Biddle, 8 Wheat. 81, that the right to the rents and profits depends upon the fact who has the legal or equitable estate. It is admitted that in England, where there is an elder mortgage or judgment, a junior judgment or mortgage creditor may have an account for the rents and profits ; but it is'denied that a naked judgment creditor, or that a naked mortgage, has that right. The reason assigned, is that he has a complete remedy at law; and the reason why it is allowable in the first case is, that the legal estate is in the mortgagee, and there is therefore no remedy: 3 Atk. 244, Meade v. Orreey, Powell on Mortgages, 232: Duke of St. Alban’s case, 3 Yes 25. The alienee of th.e mortgagor is the owner of the legal estate, subject to the incumbrance. An account for rents and profits cannot be taken until after condition broken. A mortgage in this State is on precisely the same footing." Snowden had no legal estate — his is merely an equitable interest, and his presence and assent to the sale, rebuts his equity, and precludes his right to an account for rents.
He contended that the lotholders were entitled to a decree for whatever they might have recovered from their tenants at 'law; or that the injunctions be dissolved.
As to the right of the alienees to the value of their improvements.— Under our act the alienee is the legal owner of the estate. No such question can ensue between mortgagor and mortgagee ; for all the mortgagor’s property is liable to the payment of his debt, but the alienee is only subject to be divested of the mortgaged property. The act having refused jurisdiction in such case to the Courts of law, shows that the legislature supposed that the alienee might have equities which could not be set up at law. The civil *law allows for improvements in cases of hypothecation. 1 Poth. 335. In Green v. Biddle, 8 Wheat. 81, the question is investigated, and the authority of Porter’s 'case, 1 Co. 17, recognized. Pow. on Mortgages, 1040. There will be no difficulty in allowing the value of the improvements out of the sale, should, one be ordered. And this can be done by ascertaining the present value of the lots unimproved, or the value when sold, and subtract it from the amount of the sales. When Williamson comes in for subrogation, the Court will not allow it beyond the thing mortgaged; and Snowden’s conduct should prevent Mm from asking or receiving any thing beyond that; for the terms of the sale in his presence were that the purchasers should improve, and his consent entirely precludes him from denying the purchasers’ rights to rents on the improvements.
As to the Bridge Bill judgments. He contended from the facts that it appeared that the Bridge, having been partnership property, was previously liable to the payment of these judgments before the private property of Shultz should be subjected to them — the judgments being existing liens on the Bridge, and the complainants having after a course of litigation compromised their claims, and released their lien on the Bridge, operated as a release and discharge of the judgments, so far at least as the defendants the alienees of Shultz are concerned. Levey v. Hampton, 1 M’C. Ch. 116; 1 Eq. Rep. 321; 1 Poth. on Ob. 322, no. 521.
Pettigru, for the plaintiffs.
1. The mortgage of Brooks is still a subsisting debt. A security which has been cancelled or given up without satisfaction, may be the subject of equitable jurisdiction. Burrows v. M’Whann, 1 De Saus. 409. Even at law a satisfaction has been vacated in favor of an assignee, Wardell v. Eden, 1 Johns. Rep. 531, note, S. C. 2 Johns. C&s. 121. If Thurmond had no right to sell, he had no right to receive payment. The money received from Williamson therefore is as money received to Williamson’s use by Brooks and Moore. When the sale was declared void, every thing which depended on the sale — the right of the purchaser to the land — the right of the creditor to the price paid — the right of Shultz to the application of the money to the satisfaction *of the judgment and mortgage, are all discharged. Barton v. Petits, t Cr. 288. If the money was still in Mr. Brooks’ hands there could be no doubt that he ought to pay it back; and if Williamson has a right to a return of his money, the acknowledgment of that right is equivalent to an admission that some one has a right to enforce the mortgage. But it is said that the mortgage, though it might, avail the vendors, cannot be set up in favor of Williamson— that the Leighs are satisfied, and of course the mortgage is extinct.— But Williamson is not 'satisfied, and the mortgagees are bound to make good his loss, so far as they can by allowing him to stand in their place, and to operate his relief through their equity. This is called substitution, and the rules by which it is governed must be sought in the English Chancery, not in the civil law — subrogation is not a word known to our law. The limitation of this Equity, which the learned counsel would deduce from the civil law, to the exclusion of,a person who has voluntarily paid, is not well founded. King v. Baldwin, 2 Johns. Ch. Rep. 554; Hayes v. Ward, 4 Johns. C. C. 123 ; Green v. Hart, 1 Johns. Ch. Rep. 580. The idea that no one can be allowed to stand in the place of a creditor whom he has paid off, unless that payment was made under legal compulsion, is directly contrary to Harris v. Lee, 1 P. Wms. 483; Marlow v. Pitfield, Ibid. 569 ; Henshaw v. Wilson, (MS.) Charleston, 1828, in this Court. He that voluntarily pays the debt of another without request cannot recover as for money paid to the use of the other; and Equity does not aid a mere intermeddler. But there was nothing officious in Mr. Williamson’s conduct. The mortgagees who advertised the land and invited bidders, cannot make him suffer for their blunder, by calling him a volunteer.
2. The mortgage of Snowden. It is not pretended that this is paid, but it is said that Snowden was present consenting to a sale, and therefore against purchasers his mortgage is void. If the purchasers had been ignorant of Snowden’s mortgage, and he had seen them buying without giving notice, they would have had a defence against him on the ground of concealment. But notice was publicly given of his mortgage, and the title deeds recite a story which amounts *to this : *that Shultz and the purchasers, finding that Snowden has concealed his mortgage from them, have thought proper to contract for the. purchase and sale of the mortgaged premises, in order to prevent this concealed mortgage from being set up against them. It is unnecessary to discuss seriously the question, whether a verbal assent would be enough from a mortgagee. For it is apparent that no consent was asked or given, and the sale was evidently a mere juggle. Snowden was brought there as part of the contrivance, and the deeds of conveyance are nothing but a trick.
3. As to the judgments against Henry Shultz and John M’Kinnie. It is denied by the defendants that the money due on these judgments can be levied of Henry Shultz’s land, and the reason given is, that they are judgments for the partnership debt of Henry Shultz and John M’Kinnie, trading under the name of the Bridge Company, and that the complainants in consideration of $10,000, have released all their claim in the Augusta Bridge. To refute this objection, it is necessary to consider how partnership property stands in relation to creditors, at íaw, in equity, and in bankruptcy. At law the partnership creditor can take either the joint or separate effects of either partner. The separate creditor can take the joint effects only sub modo. Moody v. Payne, 2 Johns. Ch. Rep. 584 ; The King v. Sanderson,-50. Thus at law there is no difficulty in the joint creditor seizing the separate effect; the difficulty regards the separate creditor only. The rule in equity has reference only to the rights of partners as between one another. They are joint-tenants not only of the goods of which the stock is first constituted, but of the effects acquired in the course of trade; and nothing is to be considered as the absolute property of a partner, but the residue or balance'due him after an account has been taken and all the debts have been paid. West v. Skip, 1 Yes. 242.
In bankruptcy, the same principle which governs in equity, viz., that the share of the partner is only the residue or balance of the account, is made the foundation for a rule of distribution between creditors. Partnership creditors take the joint effects, and separate creditors take the separate effects.* But let it be observed that this is strictly a rule in bankruptcy, and that where there is no bankrupt laws there is no room for the introduction of it. There is nothing but the bankrupt law which can prevent a judgment creditor of the partnership from extending the land of one of the partners. Equity cannot enjoin him. Moody v. Paine, 2 Johns. Ch. Rep. 584. If John M’Kinnie and Henry Shultz were actually carrying on business as partners, and were jointly possessed of the Augusta Bridge, and Shultz seized in severalty of the town of Hamburg, there is nothing to prevent a judgment creditor of the two, from taking the land of one of them in execution. Suppose the case of an English partnership. As long as there is no commission of bankruptcy, there would be no authority to interfere with ’the creditor in the choice of his remedies. But when a commission issues, the joint-creditors acquire an interest in the joint effects, and the separate credi'ors in the separate effects. Unless the Court has the power of making a distribution of the separate effects, it cannot interfere with the equal right of an execution creditor. If one partner were to file a bill against another, the Court of Chancery would get jurisdiction of the partnership effects, and cause them to be applied to partnership debts : but Chancery jurisdiction stops here. It cannot prevent the joint creditor from his legal execution against the separate effects, because it has no right to distribute the separate effects of the partner among his separate, creditors. The notion, therefore, that separate effects are to be applied to the payment of the separate creditors, to the exclusion of joint creditors, arises from a misconception of the different powers that belong to the Chancellor in a Court of Chancery, and sitting under the’ authority of a statute of bankruptcy. In the latter jurisdiction he has the power of doing complete justice ; he distributes both the joint and separate estate; Chancery can distribute the joint estate only. The separate is governed entirely by the rules of the common law, as long as there is no statute of bankruptcy. The bankrupt law cuts down all creditors to a level, but where there is no bankrupt law there is no authority to divest a judgment creditor of the lien of his judgment.
*There is nothing then to prevent partnership creditors from extending the land of one of the partners. To the other objection, viz., that they have released the bridge, the answer is, that the Augusta Bridge never was liable to these judgments at all, and the money paid by the Bank of Georgia was purely the price of peace. An examination of the dates will show that Mr. Shultz parted from all his interest 'in the bridge, long before these judgments were obtained. The defendants contend that the sale made by Mr. Shultz does not prevent the bridge from being assets to pay the creditors of Henry Shultz and John M’Kinnie. But even under the bankrupt law creditors have no lien before a commission issues on the partnership effects. And if one partner bona fide disposes of his interest in the partnership effects to the other, they become separate effects; if to a third person, taking his place in the partnership, they become the effects of the new firm. This is precisely the case of Ex parte Ruffin, 6 Ves. 119. The notion that the effects can be followed after a bona fide alienation, is without any authority, and all the litigation in the Courts of this State and Georgia, and the United States, was founded on a total misconception of the ease. Ex parte Williams, 11 Ves. 3 ; Ex parte Fell, 10 Ves. 341; Ex parte Rowland-son, 2 Ves. & B. 114; Duffv. E. I. Co., 15 Ves. 215.
4. The next ground relates to the right of Mr. Williamson as a mortgagee, to recoup the rents received from the Hamburg lots, in the amount of his mortgage.
We contend that he is a mortgagee in possession. The notibn that a mortgagee can in no case enter, depends on the construction of the Act of 1191; but it seems impossible to deny that the proviso in that Act saves and exempts all cases where the mortgagor is out of possession from its operation. It is said that it is unreasonable that the mortgagee should be debarred from entering upon the mortgagor himself, but allowed to enter on his assignee. There is nothing unreasonable in it, however, and it is in strict accordance with the idea of the Legislature, which was to regard the equitable rights of the mortgagor and *mortgagee. As between them, it is the money which is due, and the mortgagee should sue on his bond. But when a stranger has got into possession there is no equitable consideration at all between him and the mortgagee. Lord Mansfield would not allow a tenant to set up a title in trustees, when the plaintiff’s action was not meant to disturb the possession of those trustees. Bristow u. Pegge, 4 Cow. 309 ; 1 John. Rep. 158, note. Though the Court of King’s Bench has since discountenanced these cases, it must be confessed that they rendered the action of ejectment more useful, and subserved the ends of justice better than the old rules which the judges have re-established. At all events there is no reason why the Legislature should not give the preference to the more liberal form of procedure; and by confining the mortgagee to his bond when the question is between him and the mortgagor, and leaving him to his right of entry, according to the terms of the mortgage deed, when the controversy is between him and a stranger; they have followed Lord Mansfield’s leading, and made the leading action conform to the equitable right.
But that Mr. Williamson was entitled to the rents, is proved by this, that the case disclosed by his bill was sufficient to ground an order for a receiver. If the Act of 1191, does not prevent him from entering, he is a mortgagee in possession. If it does, then he is like a second mortgagee, who is entitled to a receiver, simply because he has no right of entry; Berney v. Shell, 1 Jac. & Walk. 641. “If the person in possession of real estate, which is assets, has, in his answer, stated the circumstances to be such that the Court cannot help seeing that it must become responsible to the demand, the Court will, in the first instance, put a receiver in the estate;” 8 Yes. 11 ; Angel v. Smith, 1 Yes. 338. It is often granted on the filing of the bill, that is obtained at a suit of creditors, 1 Cox. 422; Jones v. Claughton, Jacob, 573. In favor of a tenant in common against his companion ; Street v. Anderton, 4 Bro. C. C. 414. In the case of partners ; Peacock v. Peacock, 16 Yes. 49. And against the legal title, Lloyd v. Passingham, 16 Yes. 59. And in the case of a second mortgagee; Berney v. *Shell, 1 Jac. & Walk, 641. When a receiver is appointed, if the land is in the possession of tenants, they must pay their rents to him upon being served with the order. When the owner is in possession himself, the course is to apply to the Court, that the owner may deliver possession to the receiver; Griffith v. Griffith, 2 Yes. 401; Wilkinson v. Colley, 5 Bur. 2694.
Preston, for the defendant,
in reply. 1. Can Brooks’ mortgage be set up in favor of the plaintiffs ? In the discussion of this question, all those incidentally connected with it will be considered.
It is not matter of common right, that one, by paying the debt of another, can become his creditor. His substitution in the place of the creditor is an exception to the ordinary rules_of the law ; and even where one is compelled to pay another’s debt, he may not be remitted to the creditor’s rights. As where the goods of a stranger having been dis-trained on the premises for rent in arreai’, and he pays the rent in order to release his goods, he may maintain an action against the tenant for money paid, which is a mere personal demand; but can he be remitted to the rights of the creditor — the right of distress ? The broad proposition, then, that one may pay the debt of another, and thus make him a debtor, is too monstrous to be sustained. But it is contended that the payment being made by mistake, entitles the plaintiffs to the benefit of the mortgage. The rule laid down in Sugden, 181, is that, generally, mistakes in a deed or other contract in writing will be relieved against as between the contracting parties. It does not declare that the party paying shall be remitted to the rights of the creditor; and none of the cases cited sustain the position, that the mere mistake of one of the parties will not confer that right — the mistake must be mutual — unless there be privity in law or fact between the parties. The case cited from 1 John. Ch. 60T, was that of a guardianship bond payable to the People, when it should have been to the infant; and that in 2 Atk. 203, was the cause of a mistake in drawing a deed contrary to the intention* of the parties. These are cases of mistake in form. Hunt v. Rousemanier, 8 Wheat. 211, does not decide the question of mistake in law — it is expressly reserved. The case of Campbell & Chambers v. Rochelle, 1 M’C. Ch. 53, was that of a mere mistake of a ministerial officer charged with the execution of process. There is a difference between ignorance and mistake. The first implies a want of information, whiph is accessible to the party, and which, by industry, he might have obtained; and the latter implies false information communicated to him. but here there is neither. Shultz forbid the sale, and informed them that the title was not good. But to entitle a party to relief on the grounds of mistake in law, the mistake must be mutual — this was not the case here, for the sheriff was the agent of both parties, and he was fully notified of both the law and fact; and Shultz having forbid the sale, cannot be bound by it. In Lowndes v. Chrisholm, 2 M’C Ch. 455, there was a mutuality of mistake, and there was privity between the parties; the surety there was compelled to pay in consequence of his obligation. 2 John. Ch. 554; 4 John. Ch. 123; 4 John. Ch. 550, and 1 Eq. Rep. 409, were cases of payment by securities, and they were held to be entitled to be remitted to the rights of the creditor; and in the case from 1 John. Ch. 580, the question was whether the delivery of a mortgage was an assignment, and it was held to be so. In all those cases where the parties claimed and were allowed subrogation, they were under legal obligations to pay the debts — there was no such obligation here. Williamson was under no obligation to pay for the purchase, for there was no authority to sell. He has paid the money on this sale without any legal obligation to do so. He was a mere volunteer, acting with full notice, wilfully trusting to his own judgment, and should abide by the consequences of his own folly.
From the views here presented, the plaintiffs are not entitled to be subrogated or substituted to a right of action, or Hen, as against Shultz; and, a fortiori, they cannot be against the lotholders. But concede Shultz’s liability, and that the liens may be set up as against him, the question is different* as to his purchasers. Brooks received the money and made an entry of satisfaction on the mortgage, and after this some of the tenants purchased. If Brooks came by the money in mistake, the entry of satisfaction was no mistake. It is an abrogation of the security of the lien, and the Court will not set it up as against bona fide purchasers. But should the Court remit the plaintiff to Brook’s rights, they will be made to account for all losses sustained by Williamson’s interference. If his conduct has operated to their prejudice and reduced their rents, or if he has been the means of their losing their rents, he should redress them ; for the Court in setting up an equity will take care that equity shall be done by the party in whose favor it is set up.
At sheriff’s sales there is no warranty. A purchaser is not bound to look into the regularity of the sale ; but he must, at his peril, see that the sheriff has authority to sell, and if he fail to do so, and there is a want of such authority he must abide the consequences. Where a purchaser at sheriff’s sale fails to recover, for want of authority in the sheriff to sell, has he the right to set up the judgment or execution ? There are many such cases, but none can be found where the purchaser has been remitted to the rights of the creditor — at most he can only maintain an action to recover it back. Is not a sale under a mortgage an order of foreclosure, subject to the same rules ?
It is admitted, that according to the authority of Durand v. Isaacs, 4 M’C. Rep. 54, the Court of law had no right to foreclose, except as regards the lots of which Shultz was in possession. The mistake was in the order, and the plaintiffs have no right to go beyond the sale, and to obtain relief on the ground that the Court of law exceeded its jurisdiction, for this would be to affect the rights of third persons, which the Court will take care to guard against in making, substitution. If, then, the sale should be made good, it can only extend to the unsold lots, and the mistake can only be corrected that far; for otherwise, Williamson, by making a purchase at a sale which is void, acquires more rights than if the sale had been good
*But it is contended for the complainant that Williamson was the assignee of the mortgagee in possession. Equity will regard as done what ought to have been done — but can Equity make that assignment in such way as to operate nunc pro tunc ? If however that is done the complainants are not entitled to rents and profits. .In England lands are not liable to sale on execution, they may be extended, and there all mortgagees and judgment creditors are entitled to the rents and profits. And a receiver has been appointed when by descent the title was cast on an infant, 1 Cox. Ch. 433. But the reason being different here a different doctrine must prevail. By the decision in Durand v. Isaacs, the words of the proviso in the Act of 1191 must be applied to the first clause, and when so applied the same meaning must be preserved in its modification of all the other clauses. The words “ out of possession” mean a want of actual possession. The intention of the Act Was to declare the rights of the parties — that the mortgagor was still the owner of the land, and the mortgagee of the money lent; and this is still more manifest by the explanatory of 1191, (2 Faust 157.)
As regards the appointment of a receiver. This is in a great measure discretionary with the Court, but the Court will be cautious of interfering with the rights of prior claimants, Jeremy. Eq. 248. The purchasers are in possession claiming the legal title, and under the circumstances the Court would not undertake to decide the legal right, and appoint a receiver.
As to Snowden’s mortgage. It is conceded that most of the cases of standing by and permitting another to purchase, are cases of concealment. But the principle is applicable to this case. — The fraud practised on the purchaser is the ground of the rule ; Sugd. 522; Tarrant v. Terry, 1 Bay, 239. If one stand by and permit another to buy, or build upon his land, he will be concluded from asserting his right; and if he encourage the purchaser, his expressions are stronger than his silence. Snowden was present, an arrangement to satisfy his mortgage was announced in his presence, the purchasers were required to build, and they paid the fee simple value — under these circumstances his lien should re8'ar(ied *as lost or waived, or otherwise the Court will assist in practising a fraud on the purchasers.
As to the Bridge Bill judgments. ■ Let it be conceded that at law the plaintiffs would have the right to sell any of the property of either of the parties. Still it is insisted that the fund primarily liable to the payment of the partnership debts has been released. One of the considerations set out in the deed is the liability which B. M’Kinnie was under to pay the debts of the concern : this was a pledge of the property for the payment of the partnership debts. The bridge was ordered to be sold for foreclosure by the decree of the Georgia Court — no sale was made — and the subsequent settlement is a satisfaction of the mortgage. But the complainants paid only fifty cents on the dollar for their incumbrances; if they are set up, will they be allowed beyond the amount paid for them ?
As regards the improvements they should be allowed for — when ascertained, they can be deducted from the amount of rents and profits. The alienees having the legal title could have removed their buildings before foreclosure, and no action could have been maintained against them, but if they have permitted them to remain, those beneñtted should account for their value.
Pettigru, in reply.
Relief will be extended to those who pay money voluntarily, 1st, when one lends money to a wife to pay for necessaries, he is put in the place of the seller; IP. W. 483; 2d, in the case of infants, 1 P. W. 569 ; 3d, where money is lent to a trustee who expends it for the benefit of the trust estate.
Brooks put up for sale all that was mortgaged to him, and Williamson became the purchaser of that interest, whatever it was. He is therefore the assignee of Brooks’ interest, and is not to be remitted merely to the unsold lots — the mere purlieus of Hamburg.
Chancery will grant an injunction to prevent judgment creditors from selling mortgaged lands, 2 Johns. Ch. 125. The Court will interfere whenever it is clear that the estate is liable as assets for the payment of debts, 16 Yes. 59. See also, 3 Atk, 530,-. As regards Snowden’s consent to the *sale it is within the Statute of Frauds. See Pasley v. Freeman, 3 T. R. 51.
Blcmcling.
There is no case in which a receiver has been appointed where there is a mere lien which can be satisfied by a sale of the estate.
The cause was postponed for consideration, and at this Term the Court delivered the following decree.
In order that the arguments of counsel and the decision of the Court on the construction of this Act may be understood by those unacquainted with our statute law, the preamble and the first and second sections, of the Act, together with the explanatory Act of 1797, are here inserted.]
“ Whereas mortgagees are generally meant merely as securities for debts, and no actual estate is intended to be conveyed, by the mortgagor to the mortgagee ; but the mortgaged estate is intended, and ought to be considered only as a pledge for the payment of the principal and interest due on the debt meant to be secured. And whereas, the present mode of foreclosing mortgages of real estates, is tedious and expensive, and the right of the mortgagor to his equity of redemption, is in the present mode of exercising that right, attended with inconvenience : Now for the easier and speedier advancement of justice, in obtaining the payment of debts se-
cured by mortgage, and for ascertaining wben tbe equity of redemption of the mortgagor shall be barred:
Be it enacted, &c., That on judgment being obtained in the Court of Common Pleas on any bond, note or debt, secured by mortgage of real estate, it shall and may be lawful for the judges of the Court of Common Pleas, in case of any judgment having been obtained subsequent to the property’s being mortgaged, and prior to the obtaining judgment in the action hereby allowed to be commenced, to order the sale of the mortgaged property for the satisfaction of the moneys secured by the said mortgage, and to give a reasonable extension of the time when the sale is to take place, not exceeding the term of six months from the judgment; and also to give a reasonable credit on the sale of the mortgaged premises, not exceeding the term of twelve months from the sale ; and the mortgagor shall be for ever barred and foreclosed by such sale from his equity of redemption, in as complete a manner as if the same had been foreclosed in a Court of Chancery ; any law, usage or custom to the contrary notwithstanding : Provided always, That if at any time before such sale, the mortgagor shall tender to, or pay into the hands of the plaintiff, or his agent or attorney, or to the sheriff, all the principal money and interest meant to be secured by such mortgage, and also all the costs of the suit, the sale shall not take place, but the mortgagee shall enter satisfaction on the said mortgage, and the mortgaged premises shall be for ever exempt from the said mortgage.
And be it further enacted by the authority aforesaid, That no mortgagee shall be entitled to maintain any possessory action for the real estate mortgaged, even after the time allotted for the payment of the money secured by mortgage is elapsed, but the mortgagor shall be still deemed owner of the land, and the mortgagee as owner of the money lent or due, and shall be entitled to recover satisfaction for the same out of the land in the manner above set forth. Provided always, That nothing herein contained shall extend to any suit or action now pending, or when the mortgagor shall "be out of possession, nor to contravene in any way, the ordinance,entitled, “An ordinance to encourage subjects of foreign states to lend money at interest on real estates within this State,” nor to deprive any person or persons of ■any right which he, she or they may have at the time of passing this Act.”
[ The explanatory Act of 1797, 2 Faust 157, is as follows:]
“ Whereas under the act, entitled, “An act for establishing an easier and cheaper ■mode of recovering money by mortgage on real estates, and barring the equity of ■redemption, and for abolishing the fictitiohs proceedings in the action of ejectment,” •doubts have arisen, whether a mortgagee, taking a release of the equity of redemp•tion from his mortgagor, can be considered as legally and fully seized of the premises mortgaged, inasmuch as that Act declares that the premises mortgaged are ¡still to be deemed the estate of the mortgagor, and only a pledge in the hands of the mortgagee, who is not thereby vested with any legal estate, and therefore cannot be ibenefitted by such a release ;
Be it therefore enacted, &c., That all releases of the equity of redemption made since the passing of the said Act, or hereafter to be made, shall have the same force :and effect in law as if the said Act had not been passed.”

Opinion:
Johnson, J.
Both parties have appealed from the decree of the Circuit Court, and the grounds stated open for consideration most of the leading points in the cause. I propose to consider them in the order in which they are put down in the brief, beginning with those of the defendants, as going more directly to the merits.
The first and second may be resolved into the general question, whether the mortgage to Brooks and Moore's judgment can be set up as a lien on the Leigh tract of land generally, and more particularly, whether the mortgage can be set up in opposition to the rights of those who purchased lots from Shultz before the mortgage was ordered to be foreclosed. 1. The very able argument of the Chancellor in support of his views of this question, vindicates, very satisfactorily, his order setting up those liens. I will notice, however, some. of the arguments which have been urged by the counsel in support of this ground of the motion with great apparent confidence. The most prominent are, first, that Williamson having purchased with notice that the sale was premature and irregular, is not entitled to relief: Secondly, That all that Williamson can claim is to be put in the same situation that he would have been if the sale had been regular and valid, and that according to this rule, he would only be entitled to have the mortgage set up against the unsold lands, because the law Court had no authority to order the foreclosure as to the lots which had been sold.
1. The general rule very clearly is, that there is no implied warranty in sales made by a sheriff or other ministerial officer in his official capacity, but that applies exclusively to the quality and property of the thing sold. Thus *in a sale made by a sheriff of goods taken in execution, there is no implied warranty, on the part of the sheriff, that the goods are intrinsically worth anything, or that the defendant has any property in them. He only undertakes to sell the interest which the defendant may happen to have in the goods, in the condition in which they are. .But the principle does not apply to cases where the sheriff or other officer assumes an authority where none is given by law. It will hardly be questioned, that if a sheriff induce persons to purchase at his sales, by pretending that he has the authority of law for the sale, when in truth he has not, the purchaser must be without remedy. It is a fraud for which he would be responsible, and the principle equally applies when he acts upon a void authority. In any case the sheriff is bound to show that he is legally authorized to do that which he assumes to do virtute officii. The case in hand does not entirely depend even on that rule. In his deed to Williamson, the sheriff recites the order of foreclosure of Spring Term, 182Y, the sale on the first Monday in June, thereafter, and the failure of the purchaser to pay the purchase-money according to the terms of the sale, the advertisement of the subsequent sale, and the sale to Williamson — and in pursuance thereof he undertakes to convey. ' Here there is an express declaration on the part of the sheriff of his authority to sell, and although it is stated by way of recital, he is as effectually estopped as if it had been in the form of an express covenant. Com. Dig. Estopel, B. 5. Buller N. P. 298. In effect it is a covenant on the part'of the sheriff that he has authority to sell, and the same thing is implied in every sale he makes. Conceding, then, Williamson had notice of the circumstances from which the want of authority to sell has been deduced in the case of Williamson v. Farrow, here is the guaranty of the sheriff against the consequences. One of two persons who are equally confident of their title to the same article of property, undertakes to sell it to a third who knows all the circumstances, and covenants to warrant the title — did any one ever yet suppose that he would not be bound by that warranty. In principle this is that ease. The sheriff, supported by *Brooks the mortgagee, undertook to sell the land; Shultz denied their authority, on the ground that the time for the payment of the money had not passed. Was Williamson obliged to sit in judgment on this controversy, and decide at his peril ? Might not the sheriff covenant for his authority to sell ? And is he not bound ?
2. The authority of the Law Court to order the foreclosure of mortgages on lands is derived from the Act of 1T91, and in that Act there is an express proviso, that nothing therein contained shall extend to any suit or action then pending, "or where the mortgagor shall be out of possession." But this I regard as wholly unimportant to this branch of the case. The complainants do not ask to have Williamson's purchase carried into effect. That was adjudged against him in Williamson v. Farrow— he took nothing by the purchase. But upon the principle before laid down, they have the right to ask to be reimbursed the sum which Williamson paid. It is money paid on a consideration which has wholly failed, and upon the plainest principles of common sense and common honesty, they are entitled to recover it back. Primarily the sheriff is liable, because it was he who received the money and guaranteed his authority to sell. Upon the same principle Brooks too is liable, for the sheriff acted under his authority and for his benefit, and paid the amount of the mortgage to him. It seems also that Brooks received it in the capacity of Commissioner in Equity, and in his answer he states that he had paid it over to the persons entitled, and against them he has an unquestionable remedy. The same thing may be said of the amount paid on Moore's judgment, and the object of this bill is not as the argument supposes — a claim on the part of the complainants to be subrogated to the rights of the mortgagee and the judgment creditor, but that the multiplicity and circuity of action which would be necessary in a Court of Law may be avoided and justice done to all the parties at once, that the lands may now be sold to satisfy the mortgage and judgment, in relief of the mortgage and judgment creditor — and it may be asked what wrong is done to the defendants by this mode of ^proceeding. In the end the money due on the mortgage and judgment must be paid, and that is all that is claimed now.
The third and fourth grounds of the defendants' motion call in question the legality of the order of the Circuit Court setting up the judg ments on the Bridge Bank Bills assigned to the plaintiffs, particularly in opposition to the rights of the lot-owners who purchased from Shultz.
The argument in support of these grounds assumes that these judgments were a lien on the Bridge at the time the defendants (the lot owners) purchased from Shultz, and that the release of it by Paul Fitzsimons, operated as a fraud on them, as it operated to exempt a fund primarily liable, and threw the burthen on the individual property of Shultz.
If this assumption was supported by the facts, I should be inclined to think with the defendants' counsel, that the judgment creditors ought to be left to their remedy against that fund, or having released it, they are without remedy. The judgments were for parnership debts. The Bridge according to this allegation was partnership property and liable to the judgments. The defendants, the purchasers of lots from Shultz, claim that the judgment creditors may exhaust that remedy before they resort to the property purchased by them. I need not resort to authority to show that a judgment creditor will be compelled to resort to the property of the debtor to satisfy his judgment in relief of property purchased from him by a stranger; and this is, as I understand it, the case made by the facts assumed. They are not however supported by the proof.
The property in the Bridge was in John and Barna M'Kinnie, who constituted at that time the Bridge Company. They mortgaged the Bridge to the Bank of Georgia, on the 10th June, 1819, to secure the payment of $98,000; and on a bill filed in the Federal Court at Savannah to which the judgment creditors and Shultz, the Bank of Georgia and John and Barna M'Kinnie, were parties — an order was obtained by consent that the Bridge should be sold and the money brought into Court. On the 28th Nov. 1822, it was accordingly sold, and purchased by the Bank at-^IOjOOO, being $28,000 less *than the amount of their mortgage, and the proceeds were, by the order of the Court, deposited in the Bank. That bill was afterwards dismissed for want of jurisdiction, but if the Bridge Company had at that time any property in the Bridge, it was divested by the sale. If we are referred to the fund in Bank arising from the sales of the Bridge, that is swallowed up by the prior lien of the mortgage.
An entry made in the books of the Bridge Bank, pledging the Bridge amongst other things for the redemption of the bills issued by the Bank and on which these judgments are founded, is set up by the defendants as a lien on the Bridge, as paramount to the mortgage, being anterior in point of time. This is well answered in the Circuit Court decree. There was no evidence that the Bank of Georgia had any notice of this entry. In itself there was nothing to divest the Bridge Company of the property in the Bridge. Conceding that it possessed all the requisites of a legal and binding contract, from the nature of it, the right and power of the disposition of the Bridge must have been reserved to the Bridge Company ; for that was the only mode in which they could make it available in the payment of the bills, and they alone are responsible for the disposition they made of the proceeds. The sums paid to Shultz and Fitzsimons cannot be otherwise regarded than as the price of peace. The sum received by Fitzsimons was properly ordered to be credited on the judgments. It was paid on that account, and although by a stranger, supposing it even voluntary, it is pro tanto a satisfaction.
The fifth and sixth grounds of the defendants' appeal, object to the amount and disposition of the rents made in the Circuit Court decree,, and may be conveniently considered in the same general view.
At the common'law there is no question that as mortgagee, Brooks was entitled to the possession of the land after .the condition of the mortgage was broken, or that he might have maintained a possessory action against the mortgagor or any one else in possession, and was entitled to enter upon a vacant possession ; and if a mortgagee give notice to the tenant in possession,' that the money secured by the mortgage has *not keen paid, the tenant is bound to account with him not only for the accruing rents but for the rent in arrear; and the mortgagee may resort to the summary remedy by distress, and in Moss v. Gallimore, Doug. 270, Lord Mansfield says, that he considers "this remedy a very proper additional advantage to mortgagees, to prevent collusion between the tenant and the mortgagor." Thus stood the common law, and according to this rule there is no question about Brooks' right to receive the rents after notice to the tenants that the money due on the mortgage was unpaid.
We are next to inquire whether the Act of Assembly of 1791, has made any change in the common law in this respect. That act seems to have been intended principally to give jurisdiction to the Law Courts, to enable them in a particular case, (the case where a judgment had been obtained against the mortgagor by a third person,) to foreclose the mortgage and bar the equity of redemption. But it goes on to declare, that "the mortgagee shall not be entitled to maintain any possessory action for the real estate mortgaged, even after the time allowed for the payment of the money secured by the mortgage is elapsed, but the mortgagor shall be deemed the owner of the land, and the mortgagee of the money lent or due;" and then follows a proviso, that nothing therein "contained shall extend to any suit or action then pending, or when the mortgagor shall be out of possession. " A doubt has been thrown out, whether this proviso extends to the declaration, that " the mortgagor shall be deemed the owner of the land," and hence it was intended to be concluded, that the mortgagee could in no instance and under no circumstances maintain a possessory action, aiid could not therefore be entitled to rents and profits. The proviso follows the declaration in the same clause, and I cannot conceive of language more appropriate than that used to express the idea that not only that declaration, but the whole act should be inoperative when the morgagor was out of possession. And it has received that construction in the case of Durand v. Isaacs, 4 M'C. 54, in which it was ruled that the Law Court had no jurisdiction in cases of mortgages when the mortgagor was out of possession; and Judge Nott, in delivering the judgment of the Court in that *case, has given the most satisfactory reasons why the exception ought to 'have been made. I take it therefore as clear, that Shultz the mortgagor being out of possession, the rights and powers of Brooks as mortgagee, in respect to the purchasers of lots in possession under Shultz, must be determined according to the rule of the common law, and according to that he had a right to receive and retain the rents, having given notice of the mortgage to the tenants in possession.
The question then arises whether Williamson and the plaintiffs, his representatives, are entitled to the same rights and immunities.
According to the preceding view, as between Brooks the mortgagee, and the assignees of Shultz, tenants in possession, the legal estate was in Brooks, subject to the equity of redemption, He had therefore a right to convey the land itself, subject to this equity, or he might have assigned the mortgage, with or without having entered upon and taken possession of the premises.—Matthews vs. Wallwyn, 4 Ves. 118; Clute vs. Robinson, 2 John. Rep. 612. The sheriff, under the authority and by the direction of Brooks, did make a deed, by which he undertook to convey the fee in these lands to Williamson unconditionally; and although that was a greater interest than Brooks had in the land, the minor interest, whether of the legal estate subject to the equity of redemption, or the right to assign the mortgage whereby the legal estate would pass, was necessarily covered by it. In this view the sheriff must be regarded as the private agent of Brooks, and not as acting in his official capacity ; and if it be objected that his authority from Brooks was by parol, and void under the statute of frauds, it is an answer, that the facts are admitted by Brooks in his answer to this bill — a confirmation of the act. Williamson was therefore entitled to all the rights of Brooks, and necessarily to the rents The seventh and last ground of appeal on the part of *the defendants, complains of error in the decree of the Circuit Court, in not directing the sale of the lots in the order in which they were conveyed by Shultz, beginning with the last, and proceeding according to the order of the dates, to the first.
The counsel for the complainants have consented to a modification of the decree, according to this suggestion. I do not regard it however as depending entirely on the concession of counsel. As between the complainants and defendants the whole is equally liable, but amongst the defendants themselves, there is an equity which ought to be kept in view. Knowing of the mortgage and judgments, the first purchasers must necessarily have looked to the residue of the land as a security for the satisfaction of them. Every subsequent purchase diminished the amount of this security, and operated as a fraud upon the first purchasers.
I shall now proceed to notice the grounds of appeal taken on the part of the complainants.
1. The order that the land shall be sold on a credit of twelve months, as to three-fourths of the purchase money, is complained of as a violation of the obligation of contracts.
This order is in conformity with the practice of the Court of Chancery, both in this country and England. In the Act of 1191, before referred to, authority is expressly given to the Law Courts to give time for the payment of the money due on the mortgage, and a credit on the sales. It is founded, as I understand it, upon the principle of Equity, that the mortgagor has a right to redeem, at any time, until he is bound by the presumption arising from lapse of .time, according to the construction of the contract, he has the right to redeem at an indefinite period, and it follows necessarily, that a sale on a limited credit is no violation of the obligation of that contract. I think also that it might be justified on the footing of a lex fori, for its use is universal, and co-existent with the Courts of Chancery over mortgages.
2. Notice to the creditors of Shultz to come in and prove their demands has been already twice given — once according to the answer of Boyce. ^7 Commissioners appointed* under the order of, the Court, and once under the order of the Court, and I have heard no suggestion that there are any yet to come in : and I presume that the order for the publication of further notice, and allowing time for them to come in, was made through abundant caution, and without the knowledge of the fact that notice had already been given. If there are other creditors, it is their own fault that they have not come in and proved their debts. They are not therefore entitled to the indulgence of the Court, nor ougtt the complainants to be longer delayed on that account — in this respect therefore the decree must be reformed.
3. The decree of the Circuit Court directs that the rents of the lots which have been sold by Shultz and improved by the purchasers, should be so apportioned that Williamson's executors should take only the ground rent; and by the complainants' third ground, it is understood that they claim to be entitled to the rents, as increased by the improvements.
There is apparently much equity in this order, and I am disposed to think it may be vindicated upon principle. There was no obligation on the part of Shultz to improve the lots, nor were the purchasers from him bound to do it. The mortgagee was, by the contract entitled to the land and the rents accruing from it, in the condition it then was, and no more. The improvements made did not diminish, but increased the value of the rents, regarding them merely as ground rents, and according to the principle of the order, the executors of Williamson are allowed this increased value. In doing justice to the lot-owners, even more than strict justice is meted out to Williamson's executors.
4. The fourth and last ground is conceded by the counsel for the defendants — so much of the decree therefore as directs that Breighthaupt shall account for the $5000 which he received under the order of the Federal Court, must be reversed.
It is therefore hereby ordered and decreed, that so much of the decree of the Circuit Court as directs that the Commissioner shall advertise in the gazettes, for all the creditors who have not done so, to render in their demands by a day fixed by him — and so much thereof as directs a reference to ascertain* whether Breighthaupt received the sum ordered to be paid to him by the Federal Court, and what disposition he made of it, and what proportion of it should have gone to the credit of those iudgments: be and the same is hereby set aside and reversed.
And it is further ordered and decreed, that in executing the order for the sale of the Lehigh tract of land, the Commissioner do first sell the lots and lands whereof Henry Shultz was seized at the time he was admitted to the benefit of the " Act for the relief of insolvent debtors," the lots separately, and the lands not divided into lots, either in a body or in parcels as he may judge most beneficial to all concerned; and next lots in the hands of purchasers, or so many thereof as may be necessary for the payment of all the liens established by this decree — reserving to Shultz's alienees the right of priority amongst themselves according to their deeds — the lots held by subsequent deeds to' be sold before those held by prior deeds, and when two or more deeds have the same date, the Commissioner shall himself determine the order in which the lots shall be sold, reserving to the owners of the lots sold, the right of contribution from the owners of lots that it may be unnecessary to sell, if such should be the case. And to enable the Commissioner to carry this order into effect without delay, he is hereby authorized to require the owners of all lots to exhibit their title deeds or other muniments before him, at such times as he shall appoint — and if any difficulty should arise as to the order of the dates of the deed, he will report the same to the Circuit Court.
And lastly, it is ordered and decreed, that the decree of the Circuit Court, so far as the same is not inconsistent with this decree, be, and the same is hereby affirmed.
O'Neall and Harper, Js., concurred.
But see the opinion of the Court delivered by Johnson, J., in Smith and Cuttino v. Osborne and others, ante, 342, where the reason given why the Statute of Limitations should not bar a mortgage lien, is that the legal estate is not in the mortgagee, even where (as in that case) the mortgagor was " out of possession."