69 N.J. Eq. 580 | New York Court of Chancery | 1905
(after statement).
The decree on appeal directing the subrogation of Edwin Alíen to the lien of the judgment settled the right to subrogation as against the parties to the suit, and all persons bound by the decree, but does not itself execute or work out the subrogation, and on the remittitur the cause is now before this court for that purpose. At the timie of filing the original bill, the Mapes company, as judgment creditor, and Cornelius hT. Conover, as judgment debtor, and owner of the lands, subject to the judgment and levy, were the only persons directly interested either in the judgment, or in the mortgaged chattels or land, and if this situation had continued pending the suit and until the remittitur, the subrogation would have been worked out by a decree -(on supplemental bill, if necessary) that upon payment of the judgment by the receiver, the judgment creditor assign the judgment to Edwin Allen for the collection thereby of the amount found due to him by the decree. If the security to which subrogation was to be made were a decree of this court made in the suit, or an equitable lien, like a mortgage, before the court for foreclosure or redemption, then the subrogation might be effected directly by a decree of this court directing the sale of the lands to pay the party entitled to be subrogated. But the judgment is a purely legal lien on lands which wTere not and could not be subject to the direct order or decree of this court in the suit, and the only control over the lands subject to the judgment is by directions as to the legal ownership or control of the judgment. The right to subrogation is not the same as the right to an assignment, but an actual .assignment may be necessary in order to effect subrogation. 3 Pom. Eq. Jur. (3d ed.) 1214 In Hill v. White, 1 N. J. Eq. (Sax.) 435, an assignment of a mortgage was directed for this purpose, while in Bigelow v. Cassedy, 28 N. J. Eq. (11 C. E. Gr.) 557 (Court of Errors and Appeals, 1875), it was held that no assignment was necessary, the lands to be sold being under foreclosure in the suit. In the present case the principle of subrogation has been extended to a new class of cases, viz., cases arising under the Recording acts, where the grantee or mortgagee has failed to comply with these acts, and his property has been subsequently taken by a judg
As to David A. Conover, the other tenant in common, and the defendants holding title under him to the lands partitioned by the voluntary deeds in December, 1895, the judgment, however, must be considered as paid by the judgment debtor at the time of the assignment, and their lands, under the rule in Traphagen v. Lyons, supra, were ipso facto relieved by the payment. This is the undoubted right of these claimants under David A. Conover, so far as relates to Speyers and Cornelius N. Gonover. Neither of these persons could .¡enforce the judgment against them, for two reasons—first, because the judgment was paid by the judgment debtor and the assignment in Speyers’ name was held for Conover’s benefit; second, because both of them accepted the partition and claim lands under it. Neither of them, therefore, could repudiate the partition. As to these owners, therefore, the question is whether Edwin Allen, as subrogated in equity to the judgment, and notwithstanding its payment by the assignment, is entitled to enforce it as still an existing lien on the lands convej'ed to David A. Conover in the partition in the lands or the subsequent purchasers from him. Two of these purchasers—Mrs. MacLaughlin and Mrs. Parker—bought their lands expressly relying on the satisfaction piece, and on the statement that the judgment was paid so far as Cornelius N. Conover and his lands were concerned. These two were purchasers after Metlar, and as between Metlar and them their lands were first -liable. Edwin Allen claims that as to all of these purchasers he is entitled to enforce the judgment as still
Second. The delay in the prosecution of the appeal until
If the lands of Cornelius N. Conover, which I find to be still liable to be sold for payment of the judgment, do not produce sufficient to pay the amount to which Edwin Allen is entitled under the decree on appeal, then the defendants Cornelius N. Conover, Nevins, as administrator of Mrs. Boice, the defendant Speyers and the Mapes company, are liable to make up the deficiency. This order of liability results from my conclusion that the judgment was really paid by the debtor, and that it was kept alive by the assignment for the purpose of returning to him the money paid or secured to be paid. As to the order of liability, it now strikes me that the judgment debtor, as receiving the money, is first liable; the estate of Mrs. Boice, a party to the suit, to whom the judgment debtor paid the money over with notice, is secondly liable; Speyers, who allowed the payment of the judgment to himself for the purpose of passing it to the judgment debtor, is thirdly liable. As to the Mapes company, while it appears that the receiver, who was their attorney and knew of the assignment to Speyers, paid the money, as he supposed, to Speyers, and did not know that it was received by the attorneys as money belonging to the judgment debtor, yet by their assignment to Speyers pendente lite of the judgment, respecting which an order limiting their control was expressly prayed, they have placed the ■ judgment beyond their control and prevented the carrying out of the conditions imposed by the court of appeal. They must therefore be held liable to Edwin Allen for this result.
If the transaction of the assignment be considered a purchase and not a payment of the judgment, then the liability for deficiency would be somewhat different. The liability in that case would extend only to the difference in the value of the lands received in the partition by the judgment debtor, or subsequently inherited from his mother, and the value of his undivided interest in the whole, lands at the time of the decree in chancery. This difference would be all which, if the judgment continued a lien, was lost by the action pendente Hie of either the Mapes company or Speyers in reference to the judgment. For this deficiency, as between themselves, Speyers would be first liable. If, after receiving the money due on the judgment as his money, he gave it to Conover, the judgment debtor, and released the judgment, he has no equity to a return of the money, or to any further claim on the judgment.
I will advise a decree directing an assignment of the judgment to Edwin Allen, but upon the terms that no proceedings thereunder be taken to sell the lands released to David A. Con-over and Gertrude Y. Boice in the voluntary partition, and that upon the execution of the assignment these lands be released from the judgment. Decree as to further relief, including injunction against use of the warrant of satisfaction and personal liability of any of the defendants, settled on notice.