Dollar Savings Bank v. Burns

87 Pa. 491 | Pa. | 1878

Mr. Justice Gordon

delivered the opinion of the court,

From the history of this case we gather the following: James M. Burns, the defendant, borrowed from the Dollar Savings Bank, on or about the 10th of October 1864, the sum of $2000. To secure this amount he executed to the bank his bond and mortgage. This mortgage, being duly recorded, became the first lien on certain real estate of the mortgagor, situated in the borough of East Birmingham. Afterwards, Samuel McClurkan, the plaintiff, obtained a judgment against Burns, on which execution was issued, and, in due course, this same property was levied upon and sold to the plaintiff for the sum of $2700.

After McClurkan had, in this manner, acquired the defendant’s title to the property, the bank obtained judgment on its mortgage and issued a levari facias. Before sale, however, McClurkan paid the amount due the bank, and took from it an assignment to himself of the bond and mortgage. Then, on the 10th day of the same month, on the levari facias already in the sheriff’s hands, the property was offered for sale and bid off by McClurkan for $300. He then sent the bond to the county of Indiana, and there caused judgment to be entered on it to December Term 1876. On the petition of the defendant, the court opened this judgment and let him into a defence. When the case came on to trial, the court, holding that the payment by McClurkan extinguished the mortgage and that he took nothing by the assignment, directed a verdict for the defendant. Whether this action of the court was right or wrong is for us now to consider.

When McClurkan bid off the property at the sale, on his own judgment, he bid subject to the mortgage of the bank, and what he acquired by the sheriff’s deed was Burns's equity of redemption. The mortgage, by the Act of 1880, being a charge upon the land, 'the bid of the plaintiff, on the sale on the subsequent judgment, necessarily included this charge, and it became part of that bid. It is, therefore, obvious that as long as McClurkan chose to retain the premises he had acquired at the official sale, he could, by no process, direct or indirect, compel Burns to pay any part of the mortgage-debt, for that he had agreed to do himself. But more than this, had Burns been compelled to pay this debt, he would have been entitled to subrogation to the rights of the bank in the mortgage: Hansell v. Lutz, 8 Harris 284. And why this ? Answer, in order that he might be enabled to enforce the mortgage against the land, which was the primary fund for its payment, otherwise the purchaser would unjustly escape the payment of the full amount of his bid. When, therefore, McClurkan paid the bank, he only did what he had agreed to do by his bid; the payment was in relief of his own land, and hence the assignment was fruitless. Suppose, upon payment, the bank had refused to assign, could the plaintiff have gone into court and compelled a subrogation ? Certainly not, for that was a right which the mortgagor would have had, had he paid the bank, and that in order that he might enforce it against the purchaser at the sale, on the subsequent lien; how then can this purchaser claim the right to enforce a debt against the mortgagor which the mortgagor could have compelled him to pay ? If, however, he was not at law entitled to subrogation, then the assignment could give him no right as against the mortgagor, for it was, after all, but subrogation by the voluntary act of the bank. Whatever equity he had arose from the payment of the mortgage, and as that act gave him no equity as against Burns, the transfer by the mortgagee did not better his condition.

And in this there is no hardship put upon McClurkan; he was not obliged to pay the mortgage; he was not personally bound by it; he might have abandoned his position as owner ®f the equity, and might have allowed the bank to proceed upon its mortgage and sell the premises. He then could have bought in the property for any price at which the bank might choose to let it be knocked down, but in that case, to be sure, he would have had to bid against the bank, and it is not probable he would in that event have obtained the premises for the paltry sum of $300, the amount for which they were sold, to himself, after he had obtained the control of the writ.

He did not, however, see fit to adopt this course; he chose rather to stand in Burns’s right to retain the possession of the property and exercise his privilege as owner of the equity of redemption, and, having thus made his choice, he cannot now be permitted to abandon that choice, clothe himself with the powers of the mortgagee and pursue the mortgagor for money which he of right ought to pay and did pay to disencumber his own property.

The conclusion thus arrived at is supported by abundant authority. Mr. C. J. Black, delivering the opinion of the court in Carpenter v. Koons, 8 Harris 222, says: “ The Act of 1830 provides that if the oldest lien be a mortgage, and the land be sold on a judgment, the sheriff’s vendee shall take it subject to the mortgage. When the defendant made his purchase, therefore, he had, manifestly, no claim either on the mortgagor or anybody else, to pay off the whole mortgage and relieve him entirely from what was, probably, the most burdensome part of his contract. His share of the mortgage formed a part of the price he agreed to pay for the land. The statute of 1830 entered into and made one of the elements of his contract. There is,” continues the learned justice, “a wide and palpable difference between one who buys land subject to a mortgage and has a reduction in the price equal to the amount of the lien, and another who pays its full value and stipulates for a title clear of encumbrances. Such a distinction is anything in the world but a theoretical subtlety.” The like doctrine is held in Hansel v. Lutz, already cited. And in Cooley’s Appeal, in 1 Grant 401, where certain persons who had purchased an estate at sheriff’s sale, encumbered by prior mortgages, paid off those mortgages and took an assignment, it was held they were not entitled to be paid out of the assigned estate of the mortgagor. The court there said, citing Hansel v. Lutz, that the purchasers bought subject to the prior mortgages, and that when they paid them they did nothing more than their duty, and that the taking of an assignment to themselves was wholly fruitless.

So then, on authority, when McClurkan paid the mortgage he did no more than, under the Act of 1830, was his duty to do. His assignment was fruitless and gave him no right when executed, and the force of a sale afterwards certainly did not help the matter. If, by force of that assignment, he had no right as against the mortgagor, nothing that he could afterwards do would put into that paper what was not there when it was made.

The judgment is affirmed.