Case Name: John Duncan, vs. James Fisher and Alexander Edwards
Court: Court of Chancery of South Carolina
Jurisdiction: South Carolina
Decision Date: 1806-05
Citations: 2 Des. Eq. 369
Docket Number: 
Parties: John Duncan, vs. James Fisher and Alexander Edwards.
Judges: [Present, Chancellors Rutiedge, James and TnoMrsoK.j
Reporter: South Carolina Equity Reports
Volume: 2
Pages: 369–375

Head Matter:
[Present, Chancellors Rutiedge, James and TnoMrsoK.j
John Duncan, vs. James Fisher and Alexander Edwards.
There being two mortgage creditors on the same property, and a third creditor having Obtained a judgment subsequent to both, who was about to sell the premises under his execution, the court restrain» edhim at the instance of the younger mortgagee, until the mortgages should be foreclosed; which the two mortgagees were directed to do with expedition.
MAY, 1806.
THE complainant stated that in 1802, be received from Philip Gadsden, a mortgage of sundry property, and amongst the rest, a lot on Charleston Neck, of about eleven acres, to secure a debt of $40,000, due from Christopher Gadsden & Co. That some time since, John M. Ehric obtained a judgment at law against P. Gadsden, and levied his execution on that lot, and advertised it for sale by the sheriff for cash, but afterwards countermanded the sale, appearing contented to wait till P. Gadsden could make arrangements to pay him. That Alexander Edwards bought this judgment, and took an assignment from Eh-ric, and again advertised the land for sale in October last, for cash. That Alexander Edwards is agent of James Fisher, who is the holder of a mortgage from P. Gadsden, prior in date to that of complainant, comprehending sundry property, and amongst the rest, this same lot of 11 acres : that his mortgage covers some property not included in complainant’s mortgage, and very probably adequate to the payment of James Fisher’s debt, without resorting to the property mortgaged to complainant, and complainant contends that Mr. Fisher ought first to resort to the property of this latter description. That the lot in question doubly mortgaged, is in possession of Miss Edwards, defendant’s sister, and to enable her to buy it in at an under rate, (at a cash sale,) this mode of getting an assignment of the judgment has been resorted to, so as to sell it under execution, thereby to make Mr. Fisher’s mortgage effective, without the usual process of foreclosure, which might afford time and opportunity to raise money and redeem, or make the property sell more advantageously upon a short credit,- as is usual in cases of foreclosed mortgages.
That the whole property mortgaged to complainant and James Fisher, is not more than sufficient for both the debts; that Ehric’s judgment is subsequent to both. But complainant states that the debt to J. Fisher is founded on two bonds, one in 1789, and the other in 1793 : at the latter period a mortgage was given. In a subsequent year another mortgage was given, not as additional security,butto secure payment of the same bonds and interest ; and after that, a third mortgage for the same end. — » Complainant contends that the second mortgage cancelled the first, and the third the second, and he has no right to be paid until complainant is satisfied. And complainant also contends that the debt due James Fisher, is either a fictitious debt, or has been chiefly paid off — the debt was never claimed until the bonds appear to have nearly doubled themselves — .that the incumbrances are kept up in order to defraud complainant, and to enable Miss Edwards to possess herself of the lot at an under value ; that the assignment of this judgment is taken for that purpose also; and though taken in the name of Alex. Edwards, Jas, Fisher is the real purchaser, and is seeking to enforce it to the prejudice of complainant, without the forms usual in cases of mortgaged property. The complainant therefor^ prays injunction, discovery and relief.
Defendant Alexander Edwards, answers, that John M. Ehric had obtained judgment against Philip Gadsden on his note; but he also obtained judgment against Mary Edwards on'the same note as indorser; and when defendant; found that Ehric was about to take the property of defendant’s sister, in execution for the debt, he applied to Eh-ric on her behalf, requesting he would resort to the property of P. Gadsden in the first instance, he being the real debtor, and to this Ehric assented, on condition that if the proceeds of the property should be insufficient, defendant should give his note with his sister’s endorsement; or her note with defendant’s endorsement, for the debt, and take an assignment of the judgment. This was assented to, and Ehric Was proceeding to sell P. Gadsden’s property, when the sale was prevented and postponed by the inter» ference.of complainant and P. Gadsden. Defendant fear*? ing his sister’s property would be sold by Ehric, took au assignment of the judgment, for which he paid g843 58 ; which he hoped would be repaid by Gadsden, and defendant not be obliged to apply to his sister for it.
j)enjes that he was Mr. Fisher’s agent: Fisher refused his consent to the assignment ofth; judgment or sale of the lot mortgaged to him. He d'.-nb s th r. Miss Edwards intended to purchase at sheriff 's sales, or that defendant wished to sell it at an undervalue Believes if it were sold, and another lot sold with it, (which is claimed by the Santee Canal Company) both of which are included in Mr. Fisher’s mortgage, it would fall short of his debt. That in getting the assignment, he intended no injurv to complainant, and believes he cannot be injured, as Mr. Fisher’s debt is more than the value of the property. That said mortgage was to secure a real debt — defendant drew up the mortgages. The two last were given for and in lieu of land released from the first, and it was done at the desire of the said Philip Gadsden.
Defendant J. Fisher denied that A. Edwards acted in the premises as his agent or with his funds, but that he re-> fused his consent. That he held a mortgage long prior to complainant: denies that the other mortgaged property would suffice for his debt, though sold on an extensive credit, even if the claim of the Santee Canal Company on one of the lots should fail. Denies that the bonds' were given for a debt not bona fide due, or that discounts exist against it, or that payments have been made to lessen the amount. He sets forth the debts for which the bonds and mortgages were given. The reason of the second and third mortgages was to substitute property released from the first, at the instance of Mr. Gadsden. Defendant denies that he intended to sell at an under value, which if true, complainant might have prevented by attending the sale. That if he should sell at an under value, he would be a sufferer, as part of his debt would remain unpaid, all the -other property of Mr. Gadsden being bound for debts to the extent of its probable value. Admits he has been indulgent to P. Gadsden, and submits that he had full right to exercise his discretion in this respect.
An injunction had been granted in the first instance on the filing of the bill; and the case was now argued by Mr. Pa ingle and Mr. Duncan for the complainant, and by Mr. Edwards (in pro. pert) Mr. Desaussure and Mr. Ford for defendants.
It was argued for complainant that these several mortgages for one and the same debt, carry the indications of contrivance, and ought to be well scrutinized. That the court will, in all cases, so mould the conflicting rights of creditors against the same property as that one shall not be allowed to prejudice or prostrate the other. That Fisher’s mortgage ought to be restricted in the first instance to the property not covered by both, so that the other may have a chance of being paid. That the judgment creditor being subsequent to both, ought not to be allowed to interfere, as it was plain he could have no payment out of the property; and if allowed to force it to a cash sale, he might materially injure the rights of the others, and particularly of the complainant who held the prior mortgage. Cited 1 Eq. Ca. abr. 142, and 1 Atk. 52,0,
For the defendant, it was admitted that by modern decisions, where one mortgagee abounds in securities, and the other holds a claim on a small portion of the property, this court will interfere and compel the former to go at first, upon that part of his security not pledged to the other. Butthatisnotthe case here, as Mr. Fisher’s answer fully shews. As to the mortgagor, all he possessed was an equity of redemption, and that is a valuable interest that shall go to his other creditors ; 2 Com. 636 : and the second creditor shall redeem, lb. 637, 638. An Equity of Redemption is an interest constituting an actual estate which may be devised, granted, and intailed, and of which there is a possessio fratis, and a tenancy by the cur-tesy | it may be conveyed by bargain and sale, and if devised, must be done according to the statute of frauds, t Atk. 603. 2 Atk. 15. 2 Com. 441. And our act of Assembly for foreclosing mortgages at law, enacts the same thing in substance. And they contended that the equity of redemption was a tangible interest on which an execution may be levied; and ajudgment creditor is not bound to wait the operation or. measures of the mortgagee. This would be to subj ect the legal rights of one party to the convenience or caprice of another. If the mortgagee does not choose to foreclose and proceed, the judgment creditor may hasten the business by selling, subject to the mortgage, which is in fact to sell that equity of redemption, which is a substantial tangible interest in the debtor.

Opinion:
Chancellor James
delivered the following decree of the court:
It is stated in the complainants bill, that Philip Gads» ^en executed three separate mortgages to James Fisher, the amounts of which are specified in said bill. That subsequent thereto, Philip Gadsden duly executed a mortgage to complainant, in which was included certain property which had been previously mortgaged to J. Fisher. That a certain John M, Ehrick obtained a judgment against P. Gadsden, which is suggested in complainants bill to have been assigned to Alexander Edwards - as agent for J. Fisher, for the purpose of having the property levied on by virtue of an execution, founded on the aforesaid judgment, and selling the same atan inconsiderable price, by means whereof, Miss Edwards might be benefited. It is contended for complainant, that the property mortgaged exclusively to J. Fisher, should be sold in the first instance before any recourse should be bad against that which had been doubly mortgaged to J. Fisher and John Duncan; and in no event to sell the property included in the mortgage to complainant, until the proceeds of the sales of the property mortgaged to J. Fisher were exhausted. The defendants deny unequivocally that Alexander Edwards acted as an agent for J. Fisher, but that the purchase of the judgment aforesaid was a meritorious act, and that a bona fide consideration was given therefor. The said Alexander Edwards contends that being a judgment creditor, it would be hard to deprive him of the benefit of his judgment, by permitting the mortgages before mentioned to lie in a state of dormancy, which would have a tendency to keep his debt continually locked up, and would unquestionably operate a fraud. That the property mortgaged to Fisher will be entirely incompetent to the payment of his debt, exclusive of the lot included in the complainants mortgage, and of course the whole mortgaged property must be sold. The court can see no propriety in a selection of the property tobe sold; nor why one person should be taken into its peculiar protection, in preference to another. That the judgment creditor is entitled to enforce a foreclosure of the mortgage, we have no doubt.
It is therefore ordered and decreed, that James Fisher and John Duncan, do proceed with all possible expedition to foreclose their respective mortgages, and that the injunction be continued until the further order of this court;
It is not to be inferred from this expression of the court, that it meant to lay itdown that there are no cases in which thecourt would interfere between different mortgagees of the same property. There is a large branch of equity doctrine on the subject of double mortgagees, which would doubtless be applied by the court to proper causes brought before it,