Изображения страниц
PDF
EPUB

terms of the mortgage. He must be held to know that the purchaser had acquired nothing by the sale except the mortgagor's equity of redemption, and that the relators had the primary right of possession, the legal title to the property, and the right to apply the same to the payment of the debt for which they were sureties, and that, if anything belonged to the purchaser, it was only what was left of the proceeds after the said debt had been paid, unless the purchaser himself would then and there pay said mortgage debt. His knowledge of these facts made it a breach of his official duty to allow the property to be removed beyond the reach of the mortgage. This breach of duty makes him liable on his bond. The fact that the mortgagees have paid out nothing as yet is no defense to the action, any more than it would be a defense to the foreclosure of the mortgage.

It is true that he has nothing to do with deciding upon the validity of the mortgage or passing upon the questions involved in its terms as between the parties, but he must hold the possession of the goods until those questions have been settled, and if he surrenders it sooner he does it at his peril: McDaniel v. State, 118 Ind. 239. We think, therefore, that the facts pleaded disclose a valid cause of action, and the demurrer was properly overruled.

The remaining question arises upon the overruling of the motion for a new trial. It is urged that the amount of the finding is excessive. The court, as we have seen, adopted as the measure of damages the amount of the debt to secure which the mortgage was given.

The value of the property was proved to be greater than the amount of such debt. The smallest value placed upon it by any witness was $375. Less than this the court could not have found it to be. Where the value of the property 663 is found to be less than the amount of the debt, the measure of damages is such value of the property; while if the value of the property is more than the debt, the amount of the indebtedness furnishes the measure for the amount of the damages: Slifer v. State, 114 Ind. 291.

Tested by this rule, the court correctly placed the damages at $240.65, the principal and interest of the notes for which the re lators are liable.

We find no error in the record.
Judgment is affirmed.

LEVY OF EXECUTION ON MORTGAGED PERSONAL PROP. ERTY.-The law on this subject does not seem to be well settled. Equitable interests are not generally subject to execution: Note to

Harris r. Alcock, 32 Am. Dec. 167; and this applies to a debtor's equi. table interest in personal property: Rose v. Bevan, 10 Md. 466; 69 Am. Dec. 170. A statute authorizing a sale of the interest of a pledgor or mortgagor on execution does not authorize an attachment of such interest; and a mortgagor of chattels, without right of possession, has been beld to bave no legal interest wbich can be sold under a statute providing that when personal property is pledged by way of mortgage or otherwise, the pledgor's right and interest may be sold on execution against him: Tannabill v. Tuttle, 3 Mich. 104; 61 Am. Dec. 480. Whether a mortgagor of a chattel bas guch an estate therein as is subject to levy and execution sale is not settled in South Carolina: Mc. Knight y Gordon, 13 Rich. Eq. 222; 94 Am. Dec. 164. In New Jersey, it is held that the interest of a mortgagor in mortgaged chattels in possession of the mortgagee may be levied upon under execution, but they cannot be taken from the mortgagee without an offer to pay the mortgage debt. The officer may advertise the interest of the mortgagor for sale, and, on the day of sale, he may require the mortgagee to expose the property to the view of bidders, and enforce obedience to that duty on the part of the mortgagee by virtue of his writ. Hence, if a sheriff, with potice of the mortgagee's claim, attaches the entire mortgaged property, and it is subsequently sold by the auditor in attachment, the sheriff is liable to the mortgagee for the mortgage debt: Fox v. Cronan, 47 N. J. L. 493; 54 Am. Rep. 190. The cases, however, are more uni. form in support of the proposition, that after condition broken, mortgaged chattels, whether in possession of the mortgagor or of the mortgagee, are not subject to levy and sale under execution at the instance of the mortgagor's creditore: Ex parte Lorenz, 32 S. C. 365; 17 Am. St. Rep. 862, and note; Manchester v. Tibbetts, 121 N. Y. 219; 18 Am. St. Rep. 816; Leadbetter v. Lead better, 125 N. Y. 290; 21 Am. 8t. Rep. 738.

[merged small][ocr errors][merged small][merged small][merged small]

CLAPP V. HADLEY.

(141 INDIANA, 28.) MORTGAGES-FORECLOSURE-DISTRIBUTION OF SUR PLUS.-A mortgagee holding two mortgages on the same land against the same mortgagor, and a certificate of purchase under & foreclosure sale of the second mortgage, at which he bid the amount of the principal, interest, and costs, is entitled to a lien for the pay. ment of the amount secured by such mortgage upon the surplus arising from a subsequent sale under the first mortgage, although the decrees foreclosing the mortgages were obtained at the same time, without provision made in either for the distribution of any surplus arising from a foreclosure sale.

L. H. Wrigley and L. W. Walker, for the appellante
T. M. Eells and H. G. Zimmerman, for the appellees.

28 HACKNEY, J. The appellee executed two mortgages of a tract of land in Noble county, one in the year 1871 and the other in the year 1886. These mortgages were held by the appellant, one as mortgagee and the other as assignee, when, on the twenty-third day of May, 1893, he procured separate decrees foreclosing them. Neither decree, so far as appellant's allegations disclose, made any reference to the other or any order concerning the distribution of the surplus arising from sales upon such decrees.

On the twenty-fourth day of June, 1893, the appellant purchased under the junior mortgage decree for the full 29 amount of the principal, interest, and costs, and, upon payment of the costs only, he secured a receipt for the amount of his bid and a certificate of purchase.

Later, and on the first day of July, 1893, at a sale upon the senior mortgage decree, the appellant became the purchaser of

said lands for the sum of twelve hundred and twenty-one dollars and thirty-two cents in excess of the principal, interest, and costs of said decree. This surplus Hadley sued to recover, and the appellant intervened by cross-complaint, setting up the foregoing facts, and alleging the insolvency of Hadley and that the lands were worth less than the sum of the two mortgages. The court sustained a demurrer to said cross-complaint, and that ruling presents the only question necessary to our decision.

It will be observed that the legal title to the mortgaged property was in Hadley, and, if the transactions stated constituted

satisfaction of the liens involved in the mortgages, decrees, and purchases, there would be little doubt that the appellee was entitled to the surplus. It is so provided by statute: Rev. Stats. 1894, sec. 1118; Rev. Stats. 1881, sec. 1104; Firestone v. State, 100 Ind. 226.

As to the senior mortgage and decree, there is no question but that they were satisfied, so far as they created any liability against the appellee, and the sale under that decree divested all interest of the appellee in the property, excepting the right of redemption and the possible right to the surplus. Treating the appellant's rights under the two mortgages, decrees, and sales as distinct each from the other, and as if held by different persons, there is and can be no question but that the sale under the senior decree cut off and thwarted every right of the purchaser under the junior decree, so far as the land was concerned, save only the possible right of redemption. As to these rights of redemption, we are not concerned, 30 but, by the concession of these considerations, we have but the remaining inquiry as to the extent of interest in or lien upon the surplus fund, if any, which the holder of the junior certificate had as against the appellee. Was the purchase under the junior decree effective to satisfy the appellee's debt secured by the junior mortgage and bring him within the statutory provision as to the surplus? Certainly not, if we regard the purchase under the senior decree as extinguishing any claim under the junior purchase which could ripen into title.

To hold the debt satisfied is to conclude that the land, worth less than the amount of the combined debt, has sold for a sum sufficient to satisfy the whole debt, with twelve hundred and twenty-one dollars and thirty-two cents in addition, or, that the appellee has paid the combined debts with property not to exceed the value of such debts, and that he has twelve

[graphic]

hundred and twenty-one dollars and thirty-two cents overplus. Looking to the appellant's situation to learn if his credits have been discharged, we find that the senior decree is satisfied, and that, instead of having received property, or interest that may ripen into property, to be held in satisfaction of the junior mortgage, he has an empty and fruitless certificate of purchase, made so by the satisfaction of the senior debt. Nor can it be said that the appellant, having bid in the property upon the junior decree, and receiving a certificate of purchase, thereby extinguished all liens theretofore existing by virtue of his mortgage and decree.

In the recent and well-considered case of Robertson v. Van Cleave, 129 Ind. 217, it was held that the holder of a certificate of purchase under a junior lien was not an owner, but that he was a lienor with the judgment, under which he purchased as the basis of his lien: See, also, Jewett v. Tomlinson, 137 Ind. 326.

We conclude, therefore, that appellant's junior lien 31 was not extinguished, as against the appellee, though it was required to surrender priority to the senior decree and purchase. After this surrender of priority, to what, if anything, did the lien attach? If there had been other and still younger liens, their holders could not, in good conscience, have asked to supersede the appellant's junior lien in the distribution of the surplus arising from the sale under the senior lien. Nor would it appear that the appellee, whose debt remains unpaid, could, with better conscience, ask to take the fund, that which was the result of the property mortgaged for the payment of that debt. We answer, therefore, that equity must attach that lien to the surplus fund, and that, for the enforcement of the lien, the fund is the property inortga od

In Ha bersham v. Bond, Ga. Dec., pt. 2, 46, it was held that the lien of a junior mortgage is destroyed by a sale under the foreclosure of an elder one, but that the junior mortgagee has an equitable claim to the surplus arising from the sale, after satisfying the elder mortgage.

In Hart v. Wingart, 83 Ill. 282, the purchaser under a junior lien was held to be entitled to the surplus fund arising from a sale in satisfaction of the senior lien.

In West v. Shryer, 29 Ind. 624, it was held that a junior mortgage was entitled to participate in the surplus arising from the satisfaction of a senior mortgage, where such surplus was claimed by attaching creditors, whose liens were, in point of time,

« ПредыдущаяПродолжить »