25 Gratt. 448 | Va. | 1874
delivered the opinion of the court.
In this case, the vendor of a tract of land having taken two bonds for a balance of unpaid purchase money, made an assignment of the one last falling due,' retaining the first in his own possession. The land is insufficient to satisfy both bonds, and the question before us is, which is entitled to priority of payment.
The representatives of the vendor or assignor, as he-may be termed, insist that inasmuch as the bond retained first matured, it is, by the terms of the contract, to be first paid; and this affords a sufficient, ground for precedence of satisfaction out of the fund provided as a security for the debt.
In support of this pretension much reliance is-placed upon the case of Gwathmeys v. Ragland, 1 Rand. 466. In that case a deed of trust had been given to secure the payment of the debt. The obligee made an assignment of the second note. He after-wards assigned the third and last note to another person, and with it the deed of trust. This court held
I do not understand the court in that case as deciding that the maturity of the notes gave priority, hut that the first assignee had by the act of assignment acquired lights which could not he defeated by any act of the assignor. One of these was the right to subject the proceeds of sale of the land to the satisfaction of his debt in the manner directed by the deed. The first assignee being the holder of the note first due had the preference, as well by priority of assignment as by the express directions of the deed.
In the present case, the written agreement contains no stipulation whatever in regard to the time or mode of payment. One of the bonds is payable 1st of January 1859, and it is therein stated to be for the second payment of the purchase money. The other bond is payable the 1st of January 1860, and is stated to be for the third and last payment. Obligations of this sort, to pay in successive instalments, are usually, if not universally, made for the accommodation of the debtor. Uo one ever supposes the effect of such an arrangement is to give priority of satisfaction to the first instalments out of a common fund equally hound for the whole and every part of the debt.
The rule is well settled, that both deeds of trust and mortgages are regarded in equity as mere securities for the debt, and whenever the debt is assigned, the
This question has been the subject of judicial consideration in other states. In some of them it has been held that the rights of the assignor and assignee to the benefit of the incumbrance are equal, and the fund must be divided between them according to their several proportions. In none of them has it been held, so far as my reading extends, that the assignor is entitled to the preference merely by reason of his having retained the bonds first maturing. In Griggsby v. Hair, 25 Alab. R. 327, the very reverse was held. It is there decided, that where several notes taken for the purchase money of land are assigned at different times, the assignment of each note is pro tanio an assignment
In his Commentaries, 1 vol. 353, Judge Tucker takes substantially the same view. He thus lays down the rule: “It is said if several bonds be secured by mortgage, and the fund prove insufficient to pay all, and the bonds he assigned to different persons, who shall have priorty? I should conceive that he should have preference who was first assignee; for by the assignment he at once acquired a preference over his assignor, who then remained the holder of the other bonds; and this, preference would not be taken away by subsequent assignments.” It will be perceived that, according to Judge Tucker’s opinion, the priority of the parties depends not upon the maturity of the bonds, but upon the date of the assignment. In this view of the case he is strongly supported by the case 'of Taylor's adm'r v. Spindle, 2 Gratt. 44, 71. In that case Glass had sold to Baker a tract of land for which Baker paid in cash, fifteen hundred dollars, and executed his four bonds for the deferred instalments, payable respectively in 1816, 1817, 1818 and 1819. It did not appear what had become of the two first bonds; it was alleged they had been paid. They were not, however, the subject of controversy. The bond due in 1818 was assigned to Basye and by him to Spindle. That due in 1819 was assigned to Hormán and by him toRixey. This latter assignment was made in 1815; the date of the other does not appear. The purchaser of the land claimed an abatement of the purchase money on account of a deficiency in the number of acres;
Clparly, according to Judge Standard’s opinion, the right of the parties was to be determined, not with reference to the time of the maturity of the bonds, but the date of the assignment. There would seem to be no substantial distinction between the ease of a deficiency of the fund, arising from the mere depreciation of the property, and a deficiency resulting from an abatement of the purchase money. If the first assignee is entitled to throw upon the second the whole burden of the abatement of the purchase money, he may with equal reason, require him to bear the loss arising from the depreciation of the property, or from any other cause.
The same principles apply to the case of several purchasers at different times, of several parcels of land, subject to the lien of a mortgage or deed of trust. It is well settled that the last purchasers can not call upon the first for contribution; but they, the former, must sustain the whole burden of tjhe incumbrance to the extent of their purchase. In such case, as the alienor cannot call upon the purchaser for contribution to the relief of the land reserved by him, his subsequent alienee, standing in his place, can occupy no higher ground. Conrad v. Harrison, 3 Leigh 532; McClung v. Beirne, 10 Leigh 394.
The decisions I have cited relate to controversies
The assignee, in the case supposed, has three remedies: An absolute right to resort to the debtor himself; 2d, to the lien upon the land; and 3d, contingently to the assignor himself. The loss of the latter remedy, by the want of due diligence, can no more affect the right of recourse to the land than it can ■affect the right of reverting to the debtor himself. The assignment of the bond is, ipso facto, an assignment of the lien. Having once vested by the assignment, that lien is not divested by the failure to sue the debtor. The assignee having two remedies, both absolute and undoubted, may resort to either. The case of Rippordon v. Cogine, 8 B. Mon. R. 465, is a direct authority upon this point. The court say, the fact that the assignee had no recourse upon the assignor, did not sever the lien from the note; but as he (the assignee) acquired the equitable right to the note itself, he ■acquired with it the equitable right to all remedies for its enforcement. The continued substance of the ■lien in his (the assignee’s) favor, or for his benefit, does ■not depend upon the subsistence or continuance of a personal liability of the assignor to him, nor upon
In the present case, the charge of laches equally applies to the assignor as to the assignee. At the time of the assignment the first bond had been due several months; the second'was not due until the first of January thereafter. So that the assignor had nearly a year the advantage of the assignee in prosecuting a suit against the common debtor. But he wholly failed to take any step to enforce this liability. Under the-circumstances, the assignee had the right to suppose the first bond had been paid, or at any rate that it would constitute no obstacle in his way. During all the succeeding years it does not appear he had the slightest, intimation the debt had not been paid, or that the assignor claimed the right to appropriate to his exclusive use the benefit of a security he had already transferred to the assignee. Under these circumstances, it seems to me the assignee has the superior equity; and if a loss is to ensue from the partial failure of the security, it ought not to be imposed upon him.
It only remains to notice one other ground taken by the counsel of the appellee—it is, that the vendor reserving the legal title may, upon default in the payment of the purchase money, bring his ejectment against the purchaser, and recover and hold possession of the premises; and he cannot be required to convey the title or surrender the advantage until his purchase money is paid. The argument proves too much. It is conceded that if the vendor assigns the bond first due, the assignee has the preferable right to subject the land; and yet, in that case, the vendor having the legal title may recover in ejectment, and it might be-contended with equal reason he could not be com
I cannot perceive, therefore, how in a contest between the vendor and his assignee the former can derive any advantage from his retention of the legal title, or from the fact that he may recover in ejectment against the purchaser who may be in default. If, as I have attempted to show, the assignée has the preferable right to the land fund, all the rights of the vendor as against the vendee must be held to be in subordination to that right. Upon the whole, whether we consider the case upon general principles, or with reference to the peculiar circumstances attending it, I think the assignee has the superior equity. The decree of the Circuit court must therefore be reversed with costs.
A question arises, however, as to the extent of the reversal. At the time the decree of the Circuit
Monoure, P., dissented.
This day came again the parties by their and the court having maturely considered the transcript of the record of the decree aforesaid, and the * arguments of counsel, is of opinion, for reasons stated in writing and filed with the record, that the appellant, William H. McClintic, has the preferable right to satisfaction of the bond in his hands out of the proceeds of the sale over the bond retained by the vendor; and that the Circuit court erred in holding that said bonds must be paid in the order in which they matured. It is therefore adjudged, ordered and decreed, that the decree of the Circuit court, of the 14th day of May Í872, be reversed and annulled, and that the appellees pay to the appellant his costs by him expended in the prosecution of his appeal here.
The court is further of opinion that the said Circuit court erred in decreeing a sale of the land until the said William McClintic was, by some proper proceeding, brought before the court, and the question of priority settled between the conflicting claimants. And this court would for said error now reverse the decree of the 16th day of October 1869, and set aside the sale thereunder, but that the purchasers at that sale are interested in the decision of that question, and ought to have an opportunity of being heard in opposition to any order affecting their interest. The court doth therefore order that this cause be remanded to the Circuit court, and that a rule, if desired by the appellees, be awarded by that court against' said purchasers, to show cause why /aid sale shall not be set, aside, and the said tract of land be resold; and thereupon the said court shall render such decree in the premises as may be just and proper under all the cir
Decree reversed.