Reed v. Fidelity Insurance Trust & Safe Deposit Co.

| Pa. | Oct 4, 1886

Mr. Justice Trttnkey

delivered the opinion of the Court,

Charles H. Egner being the owner of the undivided one seventh part of certain real estate, mortgaged the same to the plaintiffs. Afterwards he filed a bill in equity against his co-tenants for partition, in which proceeding, on January 25th, 1877, a decree was made allotting the whole of the real estate to the defendant, charged with owelty, of which charge the sum of $4,796.02 became payable to said.Eguer for his interest, “ and by said decree the said trustees were authorized to raise from the sale of personal securities sufficient money to pay off said charges, and upon payment of the same to the said Charles Egner for owelty of partition, it was ordered that the said Charles Egner should execute a full release of said premises of and from said charge for owelty of partition and of all estate, right, title, and interest therein.” In pursuance of said decree the defendant afterwards paid to Egner the whole of the charge, and.Egner gave a release and conveyance of all his interest in the premises.

The right of tenants in common to make partition, and enjoy all its incidents, is paramount to the right of the lien-creditor against any one of the tenants. If necessary to effect the legitimate purpose of the partition, the lien must be shifted to the part allotted to the debtor, or if none be allotted to him, the lien against the land becomes divested. If the whole or a part of the land be allotted to the debtor and charged with owelty, the owelty is a prior lien to the lien he had given for his undivided interest: McCandless’ Appeal, 98 Pa. St., 489. Where a proceeding for partition results in a judicial sale of the land, the lien which had been created by one of the tenants is divested from the land, but continues on the money raised by the sale; “money raised in cidentally by process of partition is land in another form, and attended with inheritable qualities : ” Wright v. Vickers’ Administrator, 81 Id., 124.

Section 49 of the Act of March 29th, 1832, provides that in partition in the Orphans’ Court, where the share of an heir shall be converted into money, either by owelty due him, or by virtue of a sale, before confirmation of the partition, or sale, the Court may appoint an Auditor to ascertain whether there are any liens or other incumbrances on such real estate, and if liens appear, the Court may order the amount of money which is payable to the party against whom the lien exists, to be paid into Court to be distributed among creditors or others entitled. That Act applied in Lucas’ Appeal, 53 Pa. St., 404. There, the sale was by administrators, under an order of Court, and they neglected to move for the appointment of an Auditor to ascertain liens. They were compelled to pay the money to judgment-creditors according to priority. It was said that they were simply officers of the Court to make sale and receive the proceeds, with no power to pay part of the fund to whom it did not belong. The share of the tenant belonged to his judgment-creditors, and neither he nor the administrators could divert it from them.

This case is in the common pleas, and not within the Act of 1832. The money does not arise from sale. The Court decreed that it should be paid to Charles Egner. Owelty is somewhat in the nature of purchase money for land, and the party who pays it, the purchaser. • The paramount rights of tenants in common may compel conversion, and the mortgage becomes a lien on the proceeds of sale; or on the owelty, if no sale. While it is true that the tenants in common derive title from Charles Egner, each knew that his co-tenants could create liens on their respective interests. When one acquired title to all the land, he acquired the titles that had been vested iu his co-tenants. The decree determined the value of the respective shares, and the sum to be paid for owelty; and it deprives the mortgagee of all remedy on his mortgage, if: the lien on the money is discharged. Without a similar statute to the Act of 1882, Courts of equity are not prone to despoil persons who have had no opportunity to be heard, nor will such effect be given to their decrees, unless in obedience to plain rules of law.

The mortgagee was not a party; notice was not given to him of the proceeding for partition. He was resting on his recorded security, and no person could acquire the title of Charles H. Egner without notice of that security. It is the duty of a tenant who takes the land divested of a lien against his co-tenant, either to make application to pay the money into Court because of the lien, or pay the lien itself. lie holds the money subject to the lien. It is not a good answer to the lien-creditor to say, “ I paid the money to your debtor, on a decree in a suit where he, and I were parties, without notice to you, and without advising the Court of your lien.”

It is alleged that the partition was at the instance of Charles Egner, that the mortgage was by Charles H. Egner, and therefore, the, record of the mortgage is not notice to purchasers. But it is not alleged that in fact Charles H. Egner was the plaintiff in the partition. His name appears in the plea, as printed, the person to whom the money was owing for his interest in the premises. A search for liens against Charles H. Egner, devisee of Charles Egner deceased, was all that was necessary. The omission of a letter from his name, by mistake, or design, in the partition proceeding, did not change his name, as devisee or heir, in the line of title.

Judgment reversed, and now judgment for the plaintiff for thirteen hundred and four -AA dollars.