Miller v. Lewis

4 N.Y. 553 | NY | 1851

Lead Opinion

Gardiner, J. delivered the opinion of the court.

The agreement executed by Hubbell on the 25th of September, authorized Miller- to extinguish the lien upon the premises, for the purchase money, by the payment of the amount bid, at the end of three years, with annual interest, at the rate of seven per cent; and the judgment debtor was concluded by his acceptance of the covenants, from claiming or exercising the right of payment or redemption, before that period. The language of the instrument is, that “ in case said Miller should at the expiration of the term last aforesaid, pay to Hubbell or his representative the amount of the bid,” &c. In a word, the amount of the purchase money paid at the sale was converted into an investment for three years, with annual interest, irredeemable by the debtor until the expiration of that period. These, it is hardly necessary to say, were not the rights secured to the judgment debtor by the statute; nor was this the interest in the land acquired by the purchaser, by virtue of the sale made by the sheriff. (2 R. S. 371, §§ 45, 51.) But the latter is the only interest which the legislature have authorized a junior judgment creditor to demand or acquire. The act provides that if the persons entitled to redeem within the year, shall omit so to do, “ then the interest vested in the purchaser by such sale, may be acquired by any creditor whose judgment is a lien upon the land, within three months thereafter.” (2 R. S. 372, § 50.) The statute has no application where the interest vested by the sale is changed, by an agreement between the purchaser and owner of the fee. The creditor is in such case left to his common law remedy, by sale or redemption, if the substituted interest is redeemable.

It was said that “this agreement'neither extinguished the lien acquired by the sale, nor altered the nature of it.” "When it can be shown that an interest in land, defeasible upon the payment of a sum of money, with ten per cent interest, at any time within the year, is the same with one defeasible on the [559] payment of the same snm, at the expiration of three years, with annual interest at seven per cent, I shall assent to the proposition. It is true, they are both liens to secure the payment of money; but for different sums and for different periods. They are not liens of the same nature; for one depends upon the statute, the other on contract. If the certificate of sale had been altered so as to conform to the agreement of the 25th of September, it would have been utterly void as a statute security. If the parties had indorsed upon ithe instrument thus changed, an express agreement, that the sheriff should convey according to its terms; they could not enlarge the official obligations of the officer by this stipulation, or bind him to convey the land, at the end of three, any more than after a lapse of twenty years, or within six months of the sale. (2 R. S. 374, §§ 62, 63.) If the sheriff, in either case, voluntarily executed a deed, he would act as the agent of the parties, and its validity would rest exclusively upon their agreement. If he refused, the lien could only be enforced in equity. The relief, therefore, sought by the complainant involves the determination of two questions: 1st. Was the agreement of the 25th of September valid, between the parties ? and if so, was it obligatory upon creditors of Miller having notice of the contract, who subsequently acquired liens by judgment upon the premises ? The first proposition was affirmed by the supreme court in their decision, admitted by the counsel of the defendants; and will, it is presumed, be denied by no one. If true, it will be found in this case decisive of the second question above suggested. The general rule, undoubtedly is, that any person may for a valuable consideration, in good faith, dispose of any right or interest in, or pertaining to his real estate, at pleasure; and that his contracts will bind all his creditors, existing or subsequent, who have not obtained liens upon the property. They claim through the debtor, and of course subject to his bona fide con tracts. The principle is sufficiently obvious without an author! ty, but it was distinctly affirmed by this court in Candee v. Lord (2 Comst. 269; Cowen & Hill's Notes, 1436.) The honesty of the agreement under consideration is not controverted by the defendants. Indeed, there were no creditors to be defrauded [560] by judgment or otherwise, when it was made.

If then Perrin, who became a creditor of the complainant and obtained a lien subsequent to this arrangement, is not concluded by it, it must be because the statute confers upon him the right to acquire the interest sold by the sheriff, irrespective of any arrangement between the purchaser and the owner of the premises. The statute to which we are referred, contains no prohibition against any bona fide contract between the purchaser and the debtor, in relation to their respective interests in the property sold; nor does it expressly, or by implication, confer upon the redeeming creditor the right to overreach and annul a contract, valid between the parties, and to acquire an interest which neither the debtor nor the original purchaser possessed, when the judgment became a lien.

In Ex parte Peru Iron Co. (7 Cowen, 540,) it was said that “ one having purchased land at a sheriff’s sale, acquired a mere lien, which he might discharge or release without the consent of a junior judgment creditor.” And in the Bank of Vergennes v. Warren, that “ the original purchaser may part with his interest in the land upon such terms as he deems proper.” (7 Hill, 93.) How every change of the lien of a purchaser is a relinquishment of the original interest conferred by the sale, to the extent oí the change. According to the authorities, he may release all his interest and thus defeat a redemption by a judgment creditor. I see no reason why he may not substantially modify it by contract with the debtor, although the same consequence ensues.

Again, the right of redemption insisted upon by the defendants is irreconcilable with the language and spirit of the statute. The law confers the privilege of “ acquiring the interest vested in the purchaser by such sale,” upon “ creditors having judgments that are a lien upon the premises sold.” (§§ 50, 51, 55, supra) The right is stridi juris. (20 Wend. 538, 561.) The continuance of the interest vested by the sale is pre-supposed, and is just as indispensable to the exercise of the right as the lien of the judgment. They must co-exist. But so long as the [561] interest obtained by Hubbell by the sheriff’s sale substituted, there was neither creditor nor judgment. And when there was a judgment creditor and lien, the interest had ceased. (§ 59, last clause.)

“ The object of our statutes,” as remarked judges of our courts, “ was to prevent the sacrifice of the debtor’s property and to make the land bring its utmost value, by means of an auction among creditors. (7 Cowen, 343 ; 4 Denio, 144.) But according to its provisions the action can not commence until the debtor’s rights are foreclosed. (§§ 50., 56.) When he suffers the period allotted to him exclusively for redemption, to expire, and thus demonstrates his inability to preserve the property for himself, creditors may consider it as offered by law to the highest bidder. Here, however, the debtor by contract secured the land to his own use for three years, with the right then to extinguish the only lien upon it. The arrangement left the residue of his real estate unincumbered, and subjected this part of it to the claims of his creditors, fifteen months beyond the period limited by statute.

This contract, we are informed, although obligatory upon the parties, can not affect a/ny redeeming creditor; that the statute provision, “ that he may acquire all the rights of the original purchaser,” gives him a vested right to pay a debt which the purchaser could not exact from the debtor, and to acquire an interest in land which the former had relinquished for a valuable consideration. We do not so construe the law. We see nothing in its provisions to revive an interest that has once been extinguished by the act of the purchaser. It follows that Hub-bell, from the 25th of September, when his covenant was executed and delivered, had no interest in the premises which could be acquired by statute redemption.

What has been suggested renders it unnecessary to determine whether Perrin was estopped, by the agreement of the 25th of September, from redeeming. He was not a party to the covenant executed by Hubbell, but it would not be difficult to prove that he was a party to the agreement, of which that covenant was a part execution. The proposition of the complainant to purchase the moiety of the premises owned by Perrin, Burns and Hubbell, including the stipulation subsequently given by [562] the latter. The sale was made, and the mortgage given and accepted in pursuance of that proposition. After participating in the advantages of the sale and soliciting the execution of the covenant by which Miller precluded himself from redeeming under the statute, it would seem that Perrin was not at liberty to invalidate the contract as judgment creditor, and by the same act deprive his vendee of his property, and his co-vendors of their security.

If Perrin could not redeem, the only remaining question is, whether Lewis, as his assignee, was in any better condition. It is unnecessary to inquire, whether he was bound by the equities affecting the assignor; for the case shows that he was assignee in form only. Perrin deposes “ that he found obstacles in the way of redeeming in his own name.” And this-is the only satisfactory reason, to be gathered from the evidence, for the assignment. Lewis had express notice of the agreement of Hubbell, which was attached to the certificate, and placed in his hands by the sheriff. In addition it is shown, that a-few days before the expiration of the fifteen months, the necessary papers for the redemption were prepared by the procurement of Perrin, by his counsel; that he subsequently requested Lewis to purchase the judgment; that on the day of the redemption, Lewis, who resided in the country, met him by arrangement; that the assignment was executed, and the money paid at the office of the same counsel; that on that day Perrin drew $400 from the bank, and he testifies “ that fie might have lent Lewis his check.” These facts strongly indicate that the assignment was for his benefit. But there is another which is decisive. He was a man of wealth, his judgment was secure beyond a contingency, and he himself was one of the mortgagees of the premises to be redeemed. Under these circumstances, he solicits Lewis, “ with whom he was on intimate and confidential terms,” to purchase the judgment ; stands by when the redeeming papers were prepared; which the moment they were used, would in all probability ruin Miller, and take from himself, and his associates, real estate [563] valued at nine thousand dollars, upon which their respective mortgages were liens. It is impossible to doubt the real object of the transaction. It is not to be presumed that he would aid in the consummation of a project, which the public might deem oppressive, and his co-mortgagees dishonorable, gratuitously; certainly not at a sezdous and known sacrifice of his own interest.

We think the necessary conclusion is, that Lewis was a mere trustee for Perrin, standing in his place, and succeeding to his lights, as against the complainant. That consequently the redemption attempted by him was inoperative and void, for the reasons sug gested. The decree of the supreme court must be reversed.

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Dissenting Opinion

Jewett, J. (dissenting.)

It can not be denied but that it was competent for Hubbell and Miller, as between themselves, at any time after the sale made by the sheriff, to make any contract which they might deem proper, postponing, varying, or wholly releasing the rights of Hubbell as such purchaser, given by the statute. But unless such agreement should be made within a year after the sale, and had the effect of a redemption by Miller, it could not affect the right of any other creditor of Miller who should, within the fifteen months, recover a judgment against him, being a lien upon the premises, to redeem from Hubbell as such purchaser under the provisions of the statute. (2 R. S. 371, § 51.) As between the judgment debtor and any other person who should become his creditor by judgment, &c. within the fifteen months, a redemption within the year after the sale, by the debtor, &c. is the only mode prescribed by law to prevent the interest which vested in the purchaser by the sale from being acquired within three months after the expii’ation of such year by any other ci’editor of the judgment debtor, (having a judgment, &c. being a lien upon the premises,) by paying to the purchaser the sum of money which he paid on such sale, with interest. (2 B. 8. 310, §§ 45, 49—51.) Sections 45,46,49 and 50 provide that the judgment debtor, &c. within one year from the time when such sale shall have been made, may redeem, the sale by the payment to the purchaser, &c. of the sum of money which was bid on the sale with interest on snch sum. from [564] the time of sale, at the rate of ten per cent a year. And upon such payment being made by any person so entitled to redeem any real estate so sold, the sale of the premises so redeemed, and the certificates of such sale, shall be null and void. And in case the persons so entitled shall omit to redeem, the premises so sold, or any part of them, within the year before prescribed, then the interest vested in the purchaser by such sale may be acquired within three months after the expiration of such year, by the persons and on the terms thereinafter prescribed.

It was no doubt competent for Miller, by an agreement with Hubbell during the year, to redeem the sale by other means than the actual payment in money of the sum bid on the sale with interest, as prescribed by the statute. But in order to have the effect of a redemptionwhatever the parties should agree upon as a substitute for actual payment, must be agreed and intended to be given and received as payment or satisfaction of the sum bid with interest, so that as well the sale as the certificates of sale would become void thereby. Ho agreement between Miller and Hubbell, in respect to the rights of either variant from such as prescribed by law, under the sale, leaving the salo and certificates of sale in force for any purpose as such, could have the effect to divest any of Miller’s judgment creditors, who would otherwise have a right to redeem from Hubbell, within three months after the expiration of a year from the sale, of such right; for it depends not upon the volition of the debtor or purchaser to be exerted in any other manner than by a redemption of the sale, but rests upon the statute and can not be defeated otherwise than by a compliance with its provisions.

It can not admit of a doubt, but that if there had been no redemption by Lewis or any other judgment creditor of Miller, within the time prescribed by the statute, and Miller had omitted to pay to Hubbell the amount bid by him with interest annually, within or at the expiration of three years from the time of the sale, that Hubbell would have had the right to take a deed from the sheriff, as such, for the conveyance of the premises to him pursuant to his purchase, by which he would have ac-[565] quired all the title and interest which Hiller had in the premises on the day of the docket of the judgments under which the sale was made, or which he had afterwards and prior to the sale acquired; notwithstanding his covenant with Miller; for the reason that his purchase would not have been redeemed, discharged or relinquished. Thus circumstanced, lewis could not have availed himself of the lien which he had by his judgment upon the premises in any other way than by redeeming as he did, without incurring the hazard of wholly losing it, by Miller’s omitting to pay Hubbell within the terms of his covenant. If instead of redeeming he had procured the premises to be sold under an execution upon his judgment, and had become the purchaser, and after the expiration of fifteen months, no redemption having been made, had taken a deed from the sheriff for the conveyance of them to him, his title might have been defeated subsequently by the failure of Miller to pay Hubbell, by a deed from the sheriff to Hubbell for the conveyance of the premises to him pursuant to his purchase.

If the agreement or covenant of Hubbell with Miller of the 25th of September, 1845, be construed according to its sense and meaning, as.collected from its terms, understood in their plain, ordinary and popular sense, there is no room to say that it is a mortgage, of in the nature of a mortgage, or that it amounted to a redemption of the sale, or as evidence of it. It carefully avoids any change of the legal effect of the sale made by the sheriff to Hubbell, except to extend to Miller a right, so far as Hubbell could, as such purchaser, control it, to redeem the sale from him until the expiration of three years from the day of sale, by paying to him the sum bid by him with annual interest, and covenanting in the meantime to refrain from perfecting his title to the premises as purchaser, pursuant to the sale; and upon the condition that Miller paid him the amount bid by him with annual interest at the expiration of said three years, then to release and discharge the premises from all claim which he had acquired by reason of said sale.

Neither Miller or Hubbell had the power, as I have before remarked, if disposed to do so, to cut off or affect the right of any judgment creditor of Miller to redeem from Hubbell [566] and thereby acquire his interest as a purchaser, within three months after the expiration of a year subsequent to the sale, except by a redemption being made pursuant to the provisions of the statute, within the year.

In respect to the ground taken, that the redemption made by Lewis is void, because Perrin recovered his judgment against Miller fraudulently, it is sufficient to remark that it is wholly unsupported by the evidence in the case.

As to the remaining ground insisted on by the complainant, that the papers produced to the sheriff by Lewis as evidence of his right to redeem were defective, it is proper to say, that the right of redemption can not be successfully asserted by a judgment creditor, unless he complies substantially with the requisites prescribed by the statute. ( Van Rensselaer v. The Sheriff of Albany, 1 Cowen, 510 ; Walker v. Harris, 20 Wend. 555; The People v. The Sheriff of Broome, 19 id. 87; The People v. Ransom, 2 Hill, 51.)

It is alledged in the bill and admitted by the answer, that on or about the seventh day of October, 1845, Perrin commenced a suit against Miller in the court of common pleas of Monroe county, in an action of assumpsit, and that such proceedings were had therein, that afterwards, on the eighth day of September, 1846, he recovered a judgment therein against Miller in said court for $171,60 damages and $36,68 costs, and that the same was on that day docketed in the office of the clerk of said county, and that Lewis, on the 15th day of December, 1846, in order to entitle himself to acquire the title of Hubbell to the premises mentioned, produced to and left with the said sheriff, who made the sale, as evidence of his right, a paper purporting to be a copy of the docket of said judgment recovered by said Perrin, certified in the manner following:

“ Monroe common pleas. Darius Perrin v. Andrew Miller. Damages, $171,60; costs, $36,68. Docketed, September 8, 1846, at 10, A. M. L. Parrar, attorney.

“ State of Hew-York, Monro,e county, ss. Clerk’s office, Rochester, December 10,1846. I certify the preceding is a true [567] copy of the docket of an original record of a judgment on file in this office. In testimony whereof, I have hereunto set my, hand and affixed the seal of the court of common pleas of said county, this 10th day of December, 1846.

[l. s.] S. A. Leach, deputy clerk.”

It is objected, first, that this certificate does not correctly set forth the name or style of the court in which the judgment was rendered; in other words, that there is no such court as the “ Monroe common pleas second, that the certificate does not show against whom the judgment was rendered; and third, that the docket is not certified by the clerk of the court, but by S. A. Leach; and if a deputy clerk was competent to certify, it did not appear that he was such deputy, or that the clerk was absent when the certificate was made. The two first objections do not require a particular notice. They are clearly not well taken.

As to the other objection, it is made necessary by 2 R. S. 373, sub. 1 of § 60, that a copy of the docket of the judgment, &c. be “ duly certified by the clerk of the court, or of the county in which the same is docketed.” By 2 R. S. 210, § 14, clerks of the several counties (except the city and county of Mew-York,) were made clerks of the courts of common pleas and general sessions of their respective counties. By 1 R. S. 876, § 56, every county clerk is required to appoint some proper person deputy clerk of his county, and by § 58, and the laws of 1831, p. 279, § 1, it is provided that whenever the county clerk shall be absent from the county or from his office, &c. his deputy may perform all the duties appertaining to the office of clerk of the county, except that of deciding upon the sufficiency of sureties for any office. These references show that the deputy clerk of the county of Monroe was vested with complete authority to certify a copy of the docket, in the absence of the clerk from his office, &c. The certificate purports to have been signed by the deputy of the clerk, attested by affixing the seal of the court of common pleas of Monroe county.

The deputy is a public officer acting under his official oath, and the law will presume that the clerk was either absent from his office, or incapable of performing the duties of his office at the time the deputy signed the certificate. The certificate [568] is prima facie evidence as well that the deputy signed it, as of his authority to act. (Cowen & Hill’s Notes, 1247 to 1250; Downing v. Ruger, 21 Wend. 178; Thurman v. Cameron, 24 Wend. 87.)

It is also objected that the certificate is defective, because it does not certify that the copy had been “ compared [by the clerk] with the original, and was a correct transcript therefrom and of the whole of such original.” It is a sufficient answer to this objection to say, that in The People v. Ransom, (4 Denio, 145,) affirmed in this court (2 Comst. 490,) it was expressly adjudged that such objection could not be sustained. Upon the whole, I am of opinion that the decree of the court below should be affirmed.

Bronson, Ch. J. concurred in that opinion.

Decree reversed.