Hughes v. Mount Vernon Bank

4 Ga. App. 23 | Ga. Ct. App. | 1908

Hill, C. J.

The Mount Vernon Bank held four notes secured by a mortgage on real estate. The bank sued the notes to judgment and had the execution levied on thepnortgaged property. It was agreed between the mortgagor and the mortgagee that the entire estate should be sold. Just before the sale, the plaintiff in error lodged with, the sheriff a general judgment against the mortgagor, of date younger than the mortgage but older than the judgment based on the mortgage debt, and notified the sheriff to hold up the funds. The property was then sold; and all parties admit that it brought full value. The plaintiff in error claims that, his judgment is entitled to priority. This is'the sole question before the court.

“A mortgagee does, not waive his lien by suing and recovering judgment on the note or bond secured, or attaching the pronerty of the mortgagor in an action on the mortgage debt.” 27 Cyc. 1164 (e); Lanahan v. Lawton, 50 N. J. Eq. 276 (3), (23 Atl. 476); Clark v. Tuggle, 18 Ga. 605; Ely v. Ely, 6 Gray (Mass.), 439; Jones on Mortgages (3d ed.), §1215. The mortgage creates a lien on the premises to secure the payment of the debt, and, as a general rule, the lien will continue-until the debt is paid. The merger of the notes into judgment does not extinguish the debt, and until the judgment is satisfied the lien does not fall. Torrey v. Cook, 116 Mass. 163; Ely v. Ely, supra; Butler v. Miller, 1 N. Y. 496. “When property which is subject to a mortgage which has not been foreclosed has been levied on by other process, the lien of which is junior to that of the mortgage, the effect of the levy is to seize the equity of redemption only, and this interest in the property will be all that will pass k> the purchaser. See Harwell v. Fitts, 20 Ga. 725; Hynds v. Crosby 93 Ga. 542 (21 S. E. 63). The sale may, however, be converted into a sale of the entire interest in the property, by the concurrent consent of the mortgagor, mortgagee, and levying creditor, and in such case the proceeds of the sale will be applied to the payment of the unfore■ciosed mortgage according to its priority. Civil Code, §2759.” DeVaughn v. Byrom, 110 Ga. 904, 907 (36 S. E. 267); Milner v. Pitts, 117 Ga. 794 (45 S. E. 67); Osborne v. Hill, 91 Ga. 137 (16 S. E. 965). Two liens attach to the funds arising from the sale, — the lien of the mortgage, and the lien of the other judgment creditor against the equity of redemption, by virtue of his general judgment against the mortgagor. Since the mortgage lien is older, it should be first satisfied. “The priority of liens, whether by mortgage or judgment, is governed exclusively by the date of their acquisition, the first in 'time being the first in right.” 27 Cyc. 1173; Marshall v. Hodgkins, 99 Ga. 592 (27 S. E. 748).

Judgment affirmed.