Court Opinion

ID: 6618557
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:26:29.918985+00
Date Added: 2024-06-11T15:58:37.366730
License: Public Domain

ON REHEARING-.
Some question is made whether the petition charges the threatened sale of the whole three hundred and twenty acres, or merely the one hundred and twenty acres which were not sold under the execution sale at which defendant purchased two hundred acres of the land. But in our view it makes no difference which defendant was endeavoring to do. The same equitable principle applies. He was not allowing the fact of his having purchased the two hundred acres to relieve the *73one hundred and twenty acres remaining with the mortgagor. Where one buys at execution sale, land which has charged on it a mortgage which is prior to the judgment under which the execution is issued, he only purchases the equity of redemption and takes the land subject to the mortgage. Lovelace v. Webb, 62 Ala. 271. And so does he, if he purchases of the mortgagor, if his deed is made subject to the mortgage. And the land is as much liable for the debt as if the purchaser had agreed that it should be. Guernsey v. Kendall, 55 Vt. 205. In either case, though there i no personal liability of such purchaser for the mortgage debt, the land he purchases is a primary fund for the payment of the mortgage debt. Walker v. Goodsill, 54 Mo. App. 635; Fuller v. Hunt, 48 Iowa, 167; Guernsey v. Kendall, supra. And it is justly held that, generally, such purchaser can not deny the validity of the mortgage when it is asserted against the land. Johnson v. Thompson, 129 Mass. 398; Railroad v. Cazenove, 83 Va. 749; Fuller v. Hunt, supra; 1 Jones on Mort., sec. 744. However, there might be circumstances relieving a purchaser from such disability.
These general observations are applicable to the case before us. This defendant purchased plaintiff’s equity of redemption in two hundred acres of the land which was subject to the mortgage, and then purchased the mortgage, which he is now undertaking to enforce against that portion of the mortgaged premises yet held by 'the mortgagor, to the exclusion of that portion he bought (at least, that is the effect of the claim made by the petition), when, at best, the land yet held by the mortgagor is only liable, under the circumstances which surround the parties, to its proportion of the mortgage debt. A further • examination of the authorities discovers many others than the Pennsylvania case cited in the original opinion, which directly *74support the view originally taken. In Tice v. Annin, 2 John. Oh. 125, it is said by Chancellor Kent: “If a judgment creditor, other than the■ mortgagee, sells the equity of redemption, the mortgagor reaps the benefit of that equity, by having it applied toward the payment of his other debts, and the mortgage debt ■remains, without any confusion, as a distinct and separate incumbrance: and if the mortgagee, in such a case, should elect to proceed against the original debtor at law, instead of seeking to foreclose his mortgage, and should endeavor to collect his money out of other property of the mortgagor, this court must either stay such a proceeding, or compel him, upon payment, to assign over his debt and security to his debtor, so as to enable the debtor to indemnify himself out of the mortgaged premises. The one course or the other would be indispensable to prevent the purchaser of the equity from obtaining and holding the whole interest in the land, when he purchased, and paid only the value of, the equity of redemption.77
And so it was said in Lovelace v. Webb, 62 Ala. 271, that the mortgaged “premises continue the primary fund for the payment of the mortgage debt, and the purchaser of the equity of redemption takes it subject to the paramount lien of the mortgage. His purchase is of the equity only; it is its value only, the law intends, for which he bid and paid. While he incurs no personal liability for the payment of the mortgage debt, whatever of interest he acquires in the land is subject to the mortgage. Meyer v. Prayn, 7 Paige, 470; Vanderkamp v. Shelton, 11 Paige, 28; Fink v. Reynolds, 33 Ill. 495; Stephens v. Church, 41 Conn. 369. The mortgagor is not bound legally or equitably to pay the. mortgage debt, or contribute to its payment, for the ease or benefit of the purchaser of the equity of redemption.77
*75In Russell v. Allen, 10 Paige, 249, the following, taken from the syllabus, finds direct application to the case before us: “Upon a purchase of lands, under a judgment, which lands are subject to the lien of a prior mortgage given by the judgment debtor, the premises in the hands of the purchaser are primarily liable for the payment of the mortgage debt; and the judgment debtor is neither legally nor equitably bound to pay off such prior mortgage, for the benefit of the purchaser under the judgment.” And in Vanderlcamp v. Shelton, 11 Paige, 34, the chancellor said that: “The legal presumption in such cases is, that the purchaser of a mere equity of redemption only bids to the value of such equity of redemption, beyond the amount of the previous specific lien upon the premises. It would therefore be clearly unjust and inequitable to permit him to keep the land at the price thus bid, and to resort to the personal liability of the mortgagor to satisfy the amount of such specific lien.”
Without further quotation from adjudicated cases, which leave no doubt as to the correctness of the conclusion reached in the original opinion, we cite as applicable to the question, the cases of Atherton v. Toney, 43 Ind. 211; and Shuler v. Hardin, 25 Ind. 386; as well as the views expressed in 1 Jones on Mortgages, section 736. Cases with the peculiar facts of this have, perhaps, not frequently arisen, but where kindred questions have been up for adjudication, there seems to have been but one conclusion and that so eminently just and equitable that we have no hesitation in giving it effect in the present instance.
Judgment reversed and cause remanded.
All concur.