Court Opinion

ID: 6664004
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:04:47.940953+00
Date Added: 2024-06-11T16:00:16.724358
License: Public Domain

Archer, J.,
delivered the opinion of this court.
The doctrines in reference to the application of payments, have been elaborately examined by the solicitors ; but we apprehend, that so far as regards the interests of the respondent, in the proceeds of sale, refered to in the proceedings, he can have no interest in these questions. As a vendor of the land, he had, as his security, his lien for the purchase money, and the notes given by Tongue with the security of the complainant, Drury and Skinner furnished additional security. He is surely entitled to full payment from the one security, or the other; or if one is insufficient, from the other. Unless this was the object of the parties, why was the security taken? The land may be deteriorated in the hands of the vendee, by neglect, mismanagement, or waste, or by the depression of lands in the market; to guard against such possible results, security is asked, that the vendor shall in all events be safe, and obtain his purchase money.
Now, it is asked, that the proceeds of the sale of the lands, which do not exceed more than one half of the purchase money for which the land was originally sold, should be applied either to the first note which falls due, or rateably applied *329to all the notes. The consequence of such an application might be, that the vendor would lose the very object which it had been his design, and the design of the parties to secure; one half the purchase money may be insufficiently secured, and that half maybe on the last notes that are due. If, therefore, the application is made to the first notes that are due, the vendor loses one half his purchase money, and the same will be the result, in the like circumstances, if there should be a rateable application of the proceeds among the securities.
The case before us is unlike the case of a payment made by the vendee. The property has been sold upon which the vendor had his lien, and the sale has established the fact, that the vendee’s equitable right in the land, was without any value; the sale not having produced a sum sufficient to pay the vendor’s equitable lien. The product of the sale should be applied under the direction of the Court of Chancery, in such a manner as would give security to the vendor, which could be done, in this case, by enquiring into the pecuniary condition of the sureties. If any one of the sureties should be found insolvent and unable to pay, then the Court of Chancery would secure the vendor, by applying so much of the proceeds of sale as would extinguish the obligation thus endangered. In no other manner could justice be done to the vendor. If instead of a sale of the land, the equitable right of the vendee had been alone sold, the case would then have stood in the same condition as if the vendee had made a payment on the land, and we should then have been called upon to determine, among the sureties, the proper and legal application of the purchase money.
Time may be occupied in ascertaining the condition of the sureties. Shall the complainant be compelled to stay his collection of the obligations given him for the purchase money, until these enquiries be made? As they become due we think he has a right to enforce their payment, and such of the sureties as pay may be subrogated to the rights of the vendor, to the extent of any interest they may be ascertained to have in the purchase money.
*330It may, on investigation, be ascertained, that some one or more of the sureties may be insolvent, in which event there would be nothing to which the complainant could be subrogated ; and it may eventuate, that all are solvent, and able to pay; should this be the fact, then the proceeds of sale, after payment of the unsecured notes, should be rateably distributed in extinguishment of the obligations to which there are sureties.
We are of opinion, the Chancellor was right in dissolving the injunction.' It appears that the credits claimed on the judgments, the vendor was willing to have made, and direction had been given to that effect. On this ground therefore, there would have been no foundation for the injunction; and as the credits have now been actually given,, no injustice can be done the appellant by affirming tbe decree.
DECREE AFFIRMED.