| S.C. | Mar 24, 1890
The opinion of the court was delivered by
The appellant, a merchant of Orangeburg, on the 22nd day of May, 1889, executed a mortgage to one J. H. Beckman, covering his stock of goods, to secure $877 of indebtedness, which mortgage was duly recorded. The debt intended to be secured was evidenced by bond, dated 22nd May, 1889, and due one day after date, &e. After the execution of the mortgage, certain parties obtained judgments against Lorenz, the appellant, in June thereafter;, among them F. W. Wagener & Co. and J. W. Brigham & Co., the cause of action in the Wagener & Co. judgment being an account for groceries furnished. Executions were issued upon both of these judgments, and a levy made the same day upon the stock of goods of Lorenz. Neither of said judgments had endorsement made that they were based upon the purchase money of the stock of goods in question.
Immediately after the levy, Beckman, the mortgagee, appointed the sheriff, Salley, his agent to take possession of and sell said stock of goods, which was done, the sale being made on the first Monday in July, 1889 ; the sheriff having advertised that, by virtue of a certain mortgage and certain executions, he would on that day sell said stock of goods, &c., “levied on as the property of Lorenz under Beckman’s mortgage, and at suits of F. W. Wagener k Co. and others.” The proceeds of the sale amounted to more than sufficient to pay the mortgage debt by $534.10, which balance remained in the hands of the sheriff after paying off said mortgage, costs, and expenses, and the contest here is over this balance. Lorenz claims it from the sheriff as an exemption to him under the homestead law. The judgment creditors claim it as applicable to their judgments.
The matter was brought before the court below by rule on the sheriff. His honor, Judge Hudson, who heard the rule and return thereto, adjudged that the judgment creditors were entitled to the money, and he dismissed the rule, ordering the sheriff to pay the amount in his hands to said creditors. This ruling was based — first, upon the two-fund doctrine, and, secondly, that the basis of the Wagener & Co. judgment wuis a debt contracted in the purchase of the- stock of goods; a-nd although there was no
No question was made at the hearing below as to the validity of the mortgage. It was not assailed in any way, nor was it denied that the condition thereof had been broken before the levy of the executions by the sheriff. The mortgage, then, being unimpeached, and the condition thereof broken, the title to the property had unquestionably passed to Beckman, the mortgagee, and therefore, when it was levied upon, it did not belong to Lorenz, the mortgagor. Hence the executions had no lien thereon, nor had the sheriff any right to levy, and, in addition, the mortgagee had a perfect right to take possession as he did. It is true, the mortgagor would have had the right to redeem before sale, and still has the right to an accounting from the mortgagee. Under this state of the law, which is undoubted, as will be seen from an examination of the following cases from our own court: Reese v. Lyon, 20 S. C., 20; McClendon v. Wells, Ibid., 520; Levi v. Legg, 28 Id., 284; Williams v. Dobson, 26 Id., 112: Ex parte Knobeloch, Ibid., 336, we cannot see how the judgment creditors have any claim in this case to this money in the hands of the sheriff. The legal title thereto belongs to the mortgagee, as it is the product of the sale of the property of the mortgagee. True, as is said above, the mortgagee is subject to an accounting with the mortgagor; but until such accounting, the proceeds of the sale of the mortgage property is in contemplation of law in the hands of'the mortgagee.
We do not see, then, how the question of the two-fund doctrine could arise. That doctrine is applicable where the debtor has property over which one creditor may have a lien as a whole, and another creditor only on a part; and the question arises whether or not the first creditor should not be required to exhaust so much of the property as is not covered by the lien of the second creditor, before going on the latter. These are not the facts here. The debtor here, instead of having two funds as a matter of contest between his creditors, is without even one fund. The property in dispute does not belong to him ; it belongs to a third party, the mortgagee, Beckman. Nor do we see any application of the act requiring a certificate to be endorsed on a judg
We think his honor’s rulings were error, having no application here for the reasons given; the property in question — we mean the money in the hands of the sheriff — not belonging to the debtor, but to a third party, who is not before the court. The questions raised and decided have no application to 'the case. We adjudge nothing now as to the right of the debtor Lorenz in this money under the homestead law, should it ever reach him upon an accounting with the mortgagee. We only adjudge now that the judgment creditors have no claim on it in its present shape, for the reason that in law it belongs to the mortgagee, and not to their debtor.
It is the judgment of this court, that the judgment of the Circuit Court be reversed.