Court Opinion

ID: 6311926
Source: CourtListenerOpinion
Date Created: 2022-02-18 20:16:35.888248+00
Date Added: 2024-06-11T08:59:06.407860
License: Public Domain

The opinion of the Court was delivered by
Gibson, C. J.
The loss attendant on this purchase is one which it was supposed the act. of 1830 was calculated to produce. The design of the legislature was to restore the law to what it was supposed to have been before the decision in Willard v. Norris, sanctioned by that in the Presbyterian Corporation v. Wallace; in the latter of which it was pressed upon us with unusual energy that a mortgage of land sold by a subsequent judgment remained a lien on it. in the hands of the purchaser, and yet that the mortgagee might take satisfaction out of, the proceeds at his option. Indeed there seems to have previously been a remarkable want of precision in the notion entertained of it both by the profession and the people. It is not surprising therefore that a purchaser familiar with the early *419difficulties of the subject should have fallen into a belief that the legislature intended only to prevent a dissolution of the mortgage lien without depriving the mortgagee of his asserted right to take the purchase money. But whatever the design, it is decisive that the statute is not susceptible of that construction. It enacts that the lien of a mortgage prior to other liens, except other mortgages, quit rents, and purchase money due to the commonwealth, shall not be destroyed or affected by a sale on a writ of venditioni exponas; and the same restricted effect is allowed to a sale on a younger levari facias. The substance of the enactment, though clumsily expressed, is that no more than the equity of redemption shall be sold on an execution against the mortgagor. Not a word in it to give the mortgagee a double chance of satisfaction by resorting to the proceeds and the land too, and thus making the latter pay double the amount of its value. And without a provision for it, would such a chance be a reasonable or a natural result of the statute1? By the principles of the common law, nakedly restored in this instance, a mortgage vests the freehold, and a subsequent judgment consequently binds the equity of redemption which alone is sold on it, in England by decree, and here by venditioni exponas. And it is sold as the exclusive right of the mortgagor, the price of it consequently going to those who are incumbrancers on it; and, as regards the excess, to the mortgagor himself. It is a surplus resulting, but distinct,from the thing pledged; and as execution of it neither disturbs the mortgagee’s security, nor divests an interest on which he has a lien, he can make no pretence of claim to the price of it. He might just as well attempt to claim the price of a voluntary conveyance of the mortgagor’s equity. When, in analogy to the sale of a chattel, the freehold was sold discharged of equities and liens, the mortgagee’s fund was necessarily translated from the land to the proceeds of it; but when the statute fixed it in the land by restoring the instrument to its common law properties, it necessarily bounded his resort to that alone. It was because his power had been taken away from him that he was formerly let in on the produce of it; but a purchaser of the mortgagor’s right to redeem, standing as he does in the place of the debtor, pays but for the privilege of exercising it; and it was a misconception of the statute to suppose that the restoration of the mortgage to its primitive qualities could give him the whole estate in the hands of the purchaser, and the speculative value of the mortgagor’s right of defeasance to boot. Bidders are now compelled to keep the price bidden distinctly below their estimate of the incumbered value; and to suffer the mortgagee to touch the proceeds of the equity would put just so much into the purchaser’s pocket at the mortgagor’s expense, an injustice I would not unnecessarily impute to the legislature as an intentional one. It was not more to prevent losses incident to the sale of a doubtful title than to guard against an arbitrary use of the mortgagee’s supposed priority, that his lien was held be divested by a judicial sale, and the proceeds of it substituted for the lapc}t *420The construction claimed would restore the former mischiefs without adding a particle to the security intended to be protected. When, then, it was declared that the mortgagee had not only a lien which might not be divested, but also an estate which might not be sold on any execution except his own, it was substantively declared that he should have nothing by the execution of another.
This construction disposes of all the points but one: and even that is not worthy of a separate consideration ; for the constitutionality of the act will not bear a doubt. Nothing but an agreement with the judgment creditor and the mortgagor could give the mortgagor the purchase money. The judgment creditor sells the mortgagor’s right of defeasance, and a bare waiver of his preference would entitle those next in succession, or the mortgagor himself. Now though it is conceded that there was a license to use the judgment as far as it might serve to turn the property into cash, it is not said that there was a transfer of its priority ; and the mortgagee could receive by virtue of it only as an assignee. It is therefore fortunate for the justice of the case, that the residue has been appropriated to the elder mortgage by a decree which has passed irrevocably in rem judicatam. This, and the probable enhancement of the property, will, it is hoped, prevent any considerable loss. The defalcation of agency and repairs from the rents while the premises were in the mortgagee’s possession, belongs to an account which is to be settled when the mortgage comes to be paid out of the property, but not till then.
Decree affirmed.