Court Opinion

ID: 6232282
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:24:41.890741+00
Date Added: 2024-06-11T08:57:54.944057
License: Public Domain

*462Concurring opinion by
Agnew, J.
Edward M. Heilner held what is termed a coal-lease of lands in Columbia county. He mortgaged it to Sturtevant & Co., on the 17th of September 1858. His title to the lease was sold at sheriff’s sale, on the 19th of November 1861, and bought by Alexander W. Rea. The Miners’ Bank of Potts-ville, as assignee of Sturtevant & Co., sued out a scire facias on the mortgage of Heilner to December Term 1862. On the trial, Rea, who took defence, contended, that at the time of the sheriff’s sale there was rent due and unpaid upon the coal-lease, which was a lien on the mortgaged premises prior to the mortgage, and that the sheriff’s sale divested the lien of the mortgage. The court so charged the jury, and submitted the evidence to them, whether any rent was due and unpaid at the time of the sale, instructing them, if none, to find a verdict for the plaintiff. The jury found for the defendant, which, under the instruction, was a finding of rent due and unpaid. There was a question whether the additional ten per cent, rent on the money invested in improvements was a rent in law, but the court said there was no distinction, and left the whole to the jury, who returned a general verdict. It cannot, therefore, be now known, whether their finding was based on the ten per cent, rent, or on the coal and house rents.
Upon this state of facts there was error in the charge if the rent due upon the coal-lease was not a charge or lien upon the lease; or if a lien on it, there was error if the sheriff’s sale did not divest the lien of the mortgage.
Upon the first ground it cannot be said the court fell into error, without overruling the ease of Spangler’s Appeal, reported in a note to Wood’s Appeal, 6 Casey 277. There, the very point was ruled, that a right of entry to forfeit the estate for non-payment of rent creates a lien. Lowrie, J., said: “ But the right of entry in the present case is, to forfeit the estate without discharging the arrears. It may be said, therefore, that the right of entry neither enforces nor secures the arrears; and how then can it be called a lien for the arrears ? Yet, it would seem strange that the inherently more efficient remedy by entry to forfeit the estate, should be less a lien upon the estate, or impose less liability upon it, than the less efficient remedy to receive the profits in payment of the arrears. A right of entry upon a man’s own mines, to work them for the benefit of the lessees, might be a very inefficient remedy.” In the present case, the landlord of the coal-lease actually came into court, and claimed his rent out of the proceeds of sale which was awarded to him in the court below, and affirmed by this court upon appeal of the execution-creditor. This, therefore, was an express adjudication of the very point, for without a lien the landlord had no claim upon the proceeds of the sale of the lease itself. Whether Spangler’s Appeal was correctly decided on principle, I am not disposed to *463inquire, as the case before us can be decided on a ground quite as decisive, and much more beneficial in its influence to the interests of the mining leasehold mortgages intended to be protected by the legislature. Supposing the court right upon the first point, the next question is, whether the sheriff’s sale divested the lien of the mortgage. The court below thought it did, if there was rent in arrear and unpaid at the time of the sheriff’s sale, on the ground that the rent ran back by relation to the lease, and thereby antedated the mortgage. The question arose under the Act of April 27th 1855, Brightly’s Purdon 330, § 128. That act declared it u to be lawful for any léssee for term of years of any colliery, mining land, manufactory, or other premises, to mortgage his or her lease or term in the demised premises, with all buildings, fixtures, and machinery thereon, to the lessee belonging and thereunto appurtenant; with the same effect as to the lessee’s interest and title, as in the case of the mortgaging of a freehold interest and title, as to lien, notice, evidence, and priority of payment: Provided, That the mortgage be in like manner acknowledged and placed on record in the proper county, together with the lease, and that such mortgage shall in nowise interfere with the landlord’s rights, priority, or remedy for rent, and such mortgages may be sued out as in other cases.”
As the law expressly puts leasehold mortgages of collieries and mining lands on the footing of mortgages of freehold, as to lien and priority of payment, it is manifest the legislature intended them to be subjected to the provisions of the Act of April 6th 1830, Purd. 325. That act provides: “ Where the lien of a mortgage on real estate is or shall be prior to all other liens upon the same property, except other mortgages, ground-rents, and the purchase-money due to the Commonwealth, the lien of such mortgages shall not be destroyed, or in any way affeeted by any sale made by virtue or authority of any writ of venditioni exponas.”
But it is manifest that the purpose of. the legislature in this assimilation, must be frustrated in every instance in which the lease contains a clause of re-entry for non-payment of the rent. The lease, being the subject of the mortgage, is necessarily prior to the mortgage, and the rent must therefore always be a prior lien. Clauses of re-entry belong to all these mining leases from the necessity of the case. Mining exhausts the land itself, and if the landlord have no clause of re-entry for non-payment of the rent, he may lose, not only his rent, but that part of his land which has been exhausted of its minerals. The legislature, therefore, could not have intended that the rent, which necessarily precedes the mortgage, should take away the security intended by this act to be given to leasehold mortgages. These mining leases have become a very important species of property, involving an outlay of large capital to make them productive. They develop the resources of the state, and the intention was to *464make them a secure basis for loans to carry on the mines. The law requires the lease to be recorded along with the mortgage. But it is manifest capitalists will not venture money on the faith of a security, which at every rent-day is liable to slip through their fingers by means of the arrears becoming a prior lien. The construction of the law which divests the lien of the mortgage, by a sheriff’s sale whenever the rent is in arrear, is fatal to its purpose, and we must see whether there is not that in the law which points to a different result. To my mind there clearly is.
The legislature declared its intent in the proviso, “ that such mortgage shall in nowise interfere with the landlord’s rights, priority, or remedy for rent.” But certainly the legislature did not intend by this proviso to undo and destroy the whole effect of the preceding enactment, which declared that the lessee might mortgage his lease “with the same effect as in the case of the mortgaging of a freehold interest, and title as to lien,” &c. The difficulty, it seems to me, is easily reconciled when we turn to the Act of April 6th 1830, governing the mortgage of the freehold interest. There we find ground-rents as one of the exceptions, and the fact that a prior ground-rent exists will not divest the lien of the mortgage; but a judicial sale leaves it and the mortgage still standing and maintaining the same relative position towards each other after the sale. The lien of the mortgage remains, and the ground-rent landlord retains all his remedies against the land unaffected by the mortgage.
So in this case the manifest purpose of the legislature, and the promotion of the object in view, require the same interpretation to be put upon the rent reserved to the landlord of the leasehold estate. In all respects it is analogous to the ground-rent. It is reserved throughout the term of the estate, follows it, and fastens upon it in the hands of every owner. The landlord has like remedies for its recovery, and his rights are expressly protected in the proviso. The mortgage is to have the same effect as to lien as a freehold mortgage. Why then should it have a different effect when we Come to the rent reserved ?
The intent of the legislature, the reason of the thing, and interests of all parties, it seems to me, require that we should give to the rent of a landlord of a leasehold the same effect which is given in the Act of 1830 to a ground-rent of a freehold. Without this the intended assimilation of the legislature is not complete. This case itself illustrates the inconvenience and embarrassment produced by holding to the opposite conclusion.. Here a lease worth thousands of dollars, mortgaged for $10,000, was sold for $300. Why was this ? If the sale divested the lien of the mortgage, a full price should be bidden. But here comes the difficulty. If there were no rent in arrear, then the lien was not divested; if there were, then it was. But how was the bidder to know this ? It was a disputed fact in the trial. It was *465not a matter of record. The lease was, but how much had been paid upon the rent was a fact outside.
Placing the rent in this case on the same footing as a ground-rent upon a freehold, the lien of the mortgage was not divested, the court erred in their instructions, and the judgment should be reversed, and a venire de novo awarded.
Justices Strong and Read concur in this opinion as to the construction of the Act of 27th April 1855.