Court Opinion

ID: 7091817
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:06:50.003993+00
Date Added: 2024-06-11T16:13:07.014046
License: Public Domain

Stockton, J.1
By the conveyance from Barrow to Dillon, the legal title of the grantor in real estate, passed to Dillon, the trustee, subject to be defeated on the payment of the money by Barrow in accordance with the terms of the deed of trust. Barrow retained only a right to redeem, and upon this interest the judgments in favor of Cook & Sargent, Whittaker and Biggs, were liens. Our statute has made judgments in the Supreme or District Courts liens upon all *412interests in real estate, legal and equitable. Code, sections 2485, and 26.
Upon farther examination of the authorities, since the petition for a rehearing was filed, we are of the opinion, that this equitable interest of Barrow in the land, is represented by the surplus in the hands of the trustee, after the sale, by him, to satisfy the debt secured by the deed of trust, and that the lien of the judgments, is continued in respect to this surplus.
The lien of the judgments does not attach to the land in the hands of the purchaser, after a sale by the trustee, and he takes the same unaffected by such liens. But as the surplus proceeds, after discharging the debt secured by the deed of trust, stand in the place of the debtor’s right of redemption, and represent that right, the lien of the judgments upon the right of redemption may, in equity, be enforced against the surplus in the hands of the trustee.
The judgments, then, of the complainants, Cook & Sargent, and of the defendants, Whittaker and Biggs, were equal liens upon the surplus in the hands-of Dillon, and it devolved the duty upon them of taking some step to have the fund appropriated to the payment of their judgments. If some steps were not taken, and some notice not given to Dillon of these judgments, and of the lien thereof, upon the money of Barrow in his hands, he would have been without fault and without liability if he had paid it over to Barrow. It does not result that the trustee is to make search and inquiry whether there are any liens upon the money in his hands. It devolves upon the parties claiming to hold such liens to give notice of them, and to enforce them, at the earliest practicable moment.
There can be no question but that the surplus money in the hands of the trustee, after satisfying the deed of trust, was the personal property of Barrow, liable as any other property of the owner to be seized in execution for the payment of his debts. If the jurisdiction of a court of equity had first attached, for the purpose of enforcing the *413lien of complainants’ judgment, or of distributing tbe proceeds of Barrow’s interest in tbe land among those of bis creditors baring equal liens, sucb jurisdiction would not have been ousted by any subsequent proceeding in garnishment against Dillon, to subject tbe money in bis bands to tbe payment of judgments against Barrow. That court would have proceeded to enforce its jurisdiction first acquired by directing Dillon to pay out tbe money in his bands in satisfaction, so far as it would go, of tbe liens existing against tbe funds in his bands. But no step of this kind was taken by the complainants until the 14th January, 1857, more than two weeks after tbe sale by the trustee, and after tbe money, in contemplation of law, was in bis bands. In tbe meantime tbe defendants, Whittaker and Biggs, on tbe day of tbe sale by the trustee, as soon as they ascertained that tbe land sold for more than was sufficient to satisfy tbe amount due on tbe deed of trust, garnished, by due process of law, tbe surplus amount in the bands of tbe trustee. This proceeding was, under our statute, á seizure of and levy upon tbe money in the bands of Dillon, at tbe day of tbe sale, and effectually bound tbe amount in tbe bands of Dillon from that time. It was a mode fixed and appointed by law by wbieh tbe property and estate of Barrow in tbe surplus money in Dillon’s hands, might be appropriated to the payment of any judgments against him.
Dillon, in reply to tbe garnishee process, in addition to bis answer that be bad so much money of tbe defendant, Barrow, in bis bands, might state how it came into bis bands, and tbe nature of claim by tbe complainants -by virtue of their judgment. But this judgment and lien could be no bar to tbe right of tbe other creditors, by virtue of their garnishee process, to have tbe amount in tbe bands of tbe trustee first applied in payment of their claims, by reason of their having first seized tbe same.
As between judgment creditors whose liens are of tbe same date, he who first takes tbe property in execution has tbe preference to be first paid out of its proceeds. And *414this is the rule, whether the property be real or personal estate, or choses in action not subject to actual or manual seizure, and which by our statute are taken and seized only by garnishment. Adams & Concklin v. Dyer, 8 John. 347; Watterman et al. v. Haskin, 11 Ib. 228; Burny v. Bogett, 1 Howard, Miss., 39.
The law favors the diligent creditor and will suffer no interference, by one who has slept on his rights, for the purpose of taking from him the fruits of his superior diligence. The levy of the sheriff under the writs of execution on the judgments of Whittaker and Biggs, was a seizure and appropriation of the money in Dillon’s hands, and the subsequent filing of a bill in equity, by the complainants, could not take away the priority thus acquired.
We have said that, in contemplation of law, the surplus money, after satisfying the deed of trust, is in Dillon’s hands. He had the right to require that the whole amount bid by the complainants for the land, at the sale, should be paid to him. Until it is so paid to him, the complainants have no standing in court. They have no right to say that they hold the amount bid by them at the sale, in their hands, ready to pay the same to the trustee, provided, and on condition that he will consent to retain the surplus in his hands until the rights of the complainants thereto, or to a portion of the same, can be determined. The trustee could well demand that the whole amount bid by complainants for the land, should be paid before executing a deed for the land.
It results from these considerations that the complainants have no valid claim to set off their judgment against Barrow, against any portion, of the amount due from them on their bid to the trustee. The complainants and Barrow stand in no such -relation to each other as that the right of set-off can arise. The legal title to the land was in Dillon, and it ivas with him they were dealing, not with Barrow. Their rights as purchasers only arise on the payment of the purchase money, and they could not claim, as they do in their petition, *415to have a conveyance from the trustee, and at the same time the right to hold on to the money in their hands on an assumed right to set off their judgment against Barrow against the surplus conjectured to be remaining in Dillon’s hands, after satisfying the amount due on the trust deed.
We may add that this claim on the part of complainants has only been made upon the argument, and is not set up in their petition. They therein expressly claim that the judgments. recovered against Barrow, are all liens upon the surplus in the hands of the trustee, and pray that the same may be applied in payment of the said judgment pro rata. The decree of the District Court is affirmed.
Decree affirmed.

 wrisht, C. J., dissenting.