Court Opinion

ID: 6951183
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:32:00.73579+00
Date Added: 2024-06-11T16:08:05.066240
License: Public Domain

Mr. Justice Beckwith delivered the opinion of the court: On the 1st of November, 1855, Asher W. Tinder made his ten promissory notes for $1,000 each, payable to John A. Brittenham or order, on the 1st day of April in the years from 1857 to 1866, inclusive, with interest annually in advance, and ■ also executed a mortgage deed of several tracts of land to secure payment of the same. The first year’s interest upon the notes was paid in-advance. On the 14th of April, 1856, Brittenham sold and transferred to James McReynolds the notes falling due on the 1st day of April in the years 1857 and 1858. McReynolds sued Tinder, declaring upon the note due 1st April, 1857, and at the April Term, 1857, of the Circuit Court for Piatt county, recovered judgment thereon for $1,087tVó damages and costs. Afterwards, McReynolds sued out an execution upon the judgment, and caused the same to be levied upon the premises mortgaged, excepting eleven acres thereof. The premises levied upon were sold by the sheriff to McReynolds, on the 13th of October, 1857, for the amount of the execution and costs. None of the lands sold were redeemed; and on the 29th August, 1859, the sheriff conveyed the same to McReynolds. On the 29th August, 1859, Brittenham sold and transferred to McReynolds the notes falling due on the 1st day of April in the years 1860, 1861, 1862, 1864, 1865 and 1866, which are now held by his administrators. In September, 1859, Brittenham recovered a judgment against Tinder for $504T2g3g, the balance then due on the note falling due 1st April, 1859, and on the 24th January, 1861, assigned this judgment and the note falling due 1st April, 1863, to the plaintiff in error. The sale of an equity of redemption upon execution, other than for the debt secured by mortgage upon the premises, vests the estate sold in the purchaser, subject to the payment of the mortgage debt. It is necessarily made for so much less than the property would have sold for had it been unincumbered. The debtor is thereby divested of property apparently sufficient to satisfy the indebtedness secured by the mortgage; and he has a right to demand its application upon the liability. The purchaser is not allowed to take and hold the entire interest in the land, since he purchased, and paid only the value of the equity of redemption. If payment of the mortgage debt is enforced (under such circumstances) from other property of the mortgagor, he will be subrogated to all the rights of the mortgagee, so as to enable him to indemnify himself out of the mortgaged premises. The application of these well settled rules prevents any injustice to the mortgagor, the mortgagee, or the purchaser. Where such a sale is made upon execution for the whole or a part of the mortgage debt, great difficulties occur in adjusting the rights of parties. In some instances such sales have been* held to be void. Goring's Executor v. Shreve, 7 Dana, 64; Swigest v. Thomas, id. 220; Bronson v. Robinson, 4 B. Mon. 142; Waller v. Tate, id. 529; Atkins v. Sawyer, 1 Pick. 351; Washburn v. Goodwin, 17 Pick. 137; Camp v. Coxe, 1 Dev. and Bat. 52; Powell v. Williams, 14 Ala. 476; Baldwin v. Jenkins, 23 Miss. (1 Cush.), 206. The law will not suffer a debtor to be divested of his property for the purpose, nominally, of discharging his liabilities, when the manner in which it is sought to be done nowise tends to accomplish that end. It provides appropriate modes for subjecting the property of debtors to the payment of their debts, and it is no hardship upon creditors to require them to pursue those modes. While justice requires that creditors shall have their just dues, it forbids unjust and unnecessarily oppressive modes of obtaining them. The laws of this State, regarding sales under foreclosure of mortgages, were designed to secure to mortgagors the value of their property over and above the mortgage debt, and a sale upon execution for the whole or a part of the same debt would defeat the policy of the law, and utterly destroy the value of an equity of redemption. The interest of a mortgagor subject to a sale upon execution, is ascertained by deducting the amount of the mortgage debt from the value of his pro’perty and a sale of the residuary interest to discharge the debt so deducted would never give to the mortgagor the value of his property over and above the incumbrance. In the case under consideration, McBeynolds did not pay anything for the equity of redemption conveyed to him. He acquired the value of the property over - and above the mortgage debt, by merely canceling a portion of the same. To illustrate: Property worth $5,000 may be mortgaged for only $1,000; now if the equity of redemption is exposed for sale, upon an execution, for the mortgage debt, and the mortgagee becomes the purchaser for $1,000, he would take the property for his debt and deprive the mortgagor of the benefits that might accrue to him if the property were sold in a proper manner to satisfy the indebtedness. But whatever effect the sale under the execution in favor of McReynolds had upon the rights of Tinder, inasmuch as he is now in court and does not question its validity, or justice, we are not called upon to interfere in his behalf. McReynolds, Brittenham, Tinder, or those claiming under them, have never questioned the validity of the sale; and we are not required to assert rights for parties which they do not assert for themselves. Considering, as we must, the sale to be a valid one, until its validity is controverted in some appropriate manner, we are of the opinion that McReynolds acquired the property subject to the payment of a pro rata share of so much of the mortgage debt, as the sale left unsatisfied. The law will not consider the note held by McReynolds, and which fell due April 1, 1848, and the six notes, subsequently acquired by him, extinguished. The whole of the property mortgaged was not sold under the execution in favor of McReynolds, and it was for his interest to keep the notes in force, to preserve Ms lien upon the residue of the property mortgaged. There is no evidence of any intention on the part of McReynolds to cancel them, or to discharge his lien upon the residue of the property; and as no intention of that kind was manifested, equity will consider the notes as subsisting, or as extinguished, as may be most conducive to his interests. Campbell v. Carter, 14 Ill. 286. The seven notes held by the representatives of McReynolds are a lien upon the mortgaged premises, as well as the judgment and note assigned to the plaintiff in error, and the holders of the same are entitled to a priority in their payment, according to the order of their maturity; the judgment in favor of Britten-ham. taking the place of the note upon which it was rendered. Vansant v. Allmon, 23 Ill. 30. The judgment in favor of McReynolds was satisfied by his own act, and it is no longer a lien upon the premises. The persons claiming under McReynolds hold the equity of redemption acquired by him, in lieu of so much of the mortgage debt as was canceled. The position of these parties is one chosen by McReynolds, and so long as he and they abide by it, none of them can complain of the consequences. The property, after the liens thereon are discharged, belongs to them, and they have no right to retain Tinder’s equity of redemption with its benefits, and receive that which was surrendered to him for it. The parties claiming under Tinder and McReynolds, respectively, are entitled to have the mortgaged property, if it should be more than sufficient to discharge the liens, exhausted for that purpose ratably, according to the value of the several parcels. •McReynolds was under no obligation to entirely disincumber the land sold to Kelley ; nor was Tinder or Kelley under any obligation regarding them other than such as the law imposed upon them. Under such circumstances, if the property is more than sufficient to satisfy the liens, equity will apportion the incumbrance between the'parties ratably, according to the value of the parcels they hold respectively. The decree of the court below is reversed, and the cause is remanded for further proceedings not inconsistent with this opinion. Decree reversed.