Court Opinion

ID: 6670389
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:09:29.45274+00
Date Added: 2024-06-11T16:00:29.796652
License: Public Domain

Tuck, J.,
dissented, and delivered the following opinion:
I concur in opinion with my brother judges, that this record should be remanded, to enable the parties, by proper proceedings, to bring into the case the lands sold by (he Olagetts to Bane and not included in the mortgage to Winters. I do not perceive that justice can be done to the parties without subjecting all the lands now held by Bane to the incumbrances thereon, according to the well known principle, that where one creditor may resort to two securities and another has a resort only to one, the former shall be required to enforce his claim first against that fund upon which the latter has no lien.
In considering the mortgage to the appellee, Winters, and its effect upon the rights of the Olagetts, I have arrived at a different conclusion from that indicated by the court in the opinion filed. It is manifest to my mind, that they did not-design to extinguish their lien for any portion of the purchase money due by Bane; and', unless there be some settled rule of-law giving such effect to their concurrence with him in executing the mortgage, that instrument should receive no other interpretation than that which its terms indicate as the intent of the parties to it. Lord Mansfield, in the case of Eaton vs. Jaques, 2 Doug., 460, said: “ To do justice between men, it is necessary to understand things as they really are, and construe *131instruments according to the intent of the parties.” Calvert vs. Bradley, 16 Howard, 593. This is a leading principle, which should be departed from oidy when the law has clearly assigned a different effect to the language employed.
In my opinion, the Clagetts, by uniting in the mortgage, postponed so much of their lien as vendors for the accommodation of Bane and Winters, “with a view to secure and make safe” to the latter his debt of two thousand dollars, and to no greater extent. This is the express object of the mortgage, which contains tire usual clause of defeasance on payment of this debt. If the debt had been paid by Bane, for whose benefit would this payment have operated? Would not the Clagetts have been restored in equity to their prior position as against Bane? He could not have said that the vendor’s lien had been extinguished by the mortgage; and yet, if extinguished for Watson’s benefit, is it not gone as to everybody? This, indeed, was the argument on the part of the appellant. But any such pretension on Bane’s part would have been against the terms and design of the instrument and little short of a fraud upon the Clagetts, which no court could countenance. The question there is, shall they be in a worse plight as to Bane, and those claiming through him, merely because he did not pay the debt? It is true that Watson cannot be injured by these arrangements, but will the law improve his position where the parties have not so intended at the expense of the vendors? The title has never been in Bane but is in Winters, not as the real owner, though at law he is so considered, but as the mere holder of the land as a security for his debt, on the payment of which, equity treats him as a trustee for the mortgagors, according to the intent of the parties. Bane was in no better condition, as to this property, after, than he was before the mortgage. There was no point of time, after the rendition of Watson’s judgment, at which Bane had a more perfect title or larger interest in the land covered by the mortgage, on which the judgment could fasten as a lien, than he had at the moment it was obtained. In this respect the case differs from Alderson vs. Ames & Day, 6 Md. Rep., 52, where the vendee having paid for the land and taken the deed to himself, we *132held, (hat the mortgage existing at the time the legal title wgo completed in the purchaser was a lien, in preference to the one executed to Day. If Bane had taken a deed to himself and then given the mortgage to Winters, the cases would have been governed by the same principle.
It was insisted in argument, that the Olagetts, by uniting in the mortgage, extinguished their claim against that portion of the land, and that it did not operate as an assignment, pro tantf), of their lien as vendors, for which the case of Schnebly vs. Ragan, 7 G. & J., 120, was much relied on. Ido not consider that case as authority beyond the very point there decided. The court say, in so many words, that they do not intend to gq further than to decide the case before them on its particular circumstances. The judge delivering the opinion does discuss th.e general doctrine, and I think it may be fairly inferred that he entertained the opinion, that according to the authorities soph a lien might pass by express assignment, though it could not by implication or construction. But he does not say in whqt the difference between these modes of transfer consists. Looking to the case then under review, and those referred to in the opinion, I conclude, that he considered one class as embracing those where the writing between the parties imported an intent that the lien should pass, and fhat he meant to designate, as implied or constructive assignments, those where the lien was claimed by operation of law, in the absence of any thing on the paper to indicate such an intent, as, for example, where the vendor merely indorses or assigns the note of his vendee for the purchase money. The cases referred to in which the lien was held not to have passed were of this character. But where the instrument states an agreement, or shows an intent between the parties that the lien shall pass as a security for the amount due on the purchase money, there is no less reason for allowing such a transfer than there is for giying to the assignee of a debt the benefit of a mortgage taken for is security, where the mortgage is not expressly assigned.
In applying the case of Schnebly vs. Ragan, it is important to observe the ground on which the decision was placed. The court held that the lien did not pass because it was extin*133guished. But how ? By reason of the endorsement without recourse to the vendor, whereby he had derived the same benefit from the transfer as if bis claim had been paid. Having no equity himself against the land his assignee could claim none through him. The equity remains until the vendor is satisfied. The cases referred to by the judge go further, they show that, where the vendor assigns the note of the vendee for the purchase money, the lien remains with him as vendor, if he is liable on the note either by express guaranty, or where he may be made responsible by due diligence on the part of the assignee against the maker of the note. In one case the lien was enforced by Lord Eldon, in favor of the vendor, because he was obliged to take up the vendee’s note which he had negotiated ; but in the other such relief was denied to an assignee, where it did not appear that the vendor remained liable. This is the view taken of the law by the late Chancellor, in Dixon vs. Dixon, 1 Md. Ch. Dec., 220, where he held that the lien exists for the security of the vendor, and continues as long as may be necessary for that purpose. If these cases have any application to the one before us, they appear to militate against the views presented on the part of the appellant. It is manifest that the Clagetts had not been paid when the mortgage was executed, nor since. For this reason the objection to their claim, as holders of the vendor’s lien, after payment thereout of Winter’s mortgage, on the ground of extinguishment by satisfaction, cannot apply. If they have lost this remedy they have done so improvidently, and without any consideration, either of advantage to themselves, or damage to Watson, who claims the benefit of their act. Are they not within the principle of these decisions ? They are, to be sure, not liable as endorsers of the vendee’s notes, which although a contingent responsibility only, would have protected them if the transaction had been of that character, but they have not been paid, and are without security, if the argument on the part of the appellant be correct, which places them in a worse predicament. They are, in my judgment, as equitably entitled to the benefit of the *134security as if they were endorsers of the vendee’s note. Th.e argument carries us too far when extended to legitimate results. If the lien has been extinguished, it is gone forever as against every person ? Rut can this be so as against Bane, who assented to the arrangement and profited by it. Equity will not tolerate any such idea, and if not as to Bane, the same consequence must follow as to a creditor claiming by judgment against him.
That the parties to this deed intended it to operate as an assignment of the lien, I have no doubt. Their object was to have Winters’ debt “secured and made safe.” This, undoubtedly, could not have been accomplished more effectually than by making him the first incumbrancer. Indeed this view of the case is necessary to give effect to the deed, for it is by no means clear that Winters will be paid if the vendor’s lien be treated as extinguished, and Watson’s judgment let in before the mortgage. The judgment had been rendered, and we must presume that the parties had knowledge of its existence. The only way that Winters could be made safe, as against that judgment, was by becoming assignee of the vendor’s lien. If the mortgage is allowed that interpretation, Watson will be in the same situation that he occupied before, and the transaction will affect the Clagetts and Winters only. As to them the former thereby postponed so much of their preferred lien; but Watson cannot be affected injuriously, nor should his interest be promoted by the arrangement. He has no reason to complain, whereas the Clagetts may be seriously injured if the mortgage should have stamped upon it a character and corresponding effect different from the intent of the parties.
Whether this be treated as an assignment of the lien, or as a postponement by the Clagetts of their claim, pro tanto, for the benefit of Winters, appears to me to be of little importance. In either aspect of the case the result must be the same. I have no doubt that a prior incumbrancer may agree to postpone, provided it does not affect other creditors. This was allowed in Alexander vs. Ghiselin, 5 Gill, 187, where the *135court, with consent of the parties claiming a specific lien on the negroes, by a stipulation at the bar, qualified the agreement under which they claimed, so as to give judgment creditors a priority over them. It was a matter between these incumbrancers, which did not concern the other creditors, as to whom the trust fund stood, as if the qualification had not been annexed to the alleged agreement. If that rule be applied here, the judgment of Watson will not be displaced, but. will sustain the same relation to the other incumbrances on the mortgaged property that it occupied before the mortgage was executed, leaving the equities arising out of that instrument, as between the parties to it, to be adjusted among themselves, and without prejudice to the rights of others.
For these reasons I differ from the court as to the instructions for the ultimate distribution of the proceeds of sale.