Ritch v. Eichelberger

| Fla. | Jul 1, 1869

HABT, J.,

delivered the opinion óf the court.

The first ground of demun’er in this case is, that the complainant shows by his bill no right to the discovery or relief sought. The bill is filed for the foreclosure of a mortgage alleged to have been duly executed by Eichelberger, a defendant, and acknowledged and recorded, and that there is due by its conditions over twelve thousand dollars. It prays a decree for the amount to be found due, and that it may be satisfied out of the property mortgaged, by a foreclosure of the equity of redemption. It alleges that the defendants have conspired and confederated to defeat and deprive him of his mortgage lien by certain unjust and inequitable acts, and have placed obstructions in the way in order to prevent him from enforcing his legal and equitable rights as a mortgagee, demands the removal of those obstructions, and that he may have such relief as he may be equitably entitled to without detriment or injury to any other person.

Let us look at the facts as they are stated in the bill. The complainant, Ritch, holds a mortgage upon valuable plantation property, and also upon a town lot in Ocala, on which some twelve thousand dollars is due. Royall has a judgment which is a prior lien, on which some six hundred dollars is due, upon which execution issued and was levied upon the plantation property, and upon certain other property in Ocala not included in the mortgage, and much more than sufficient to satisfy the execution. Upon the sale day in December, 1868, on which day the property had been advertised to be sold, L’Engle & McConnell, two of the defendants, purchased the Royall judgment and execution, and then the sale under it was postponed to January, 1869. Subsequently to the making and recording of the mortgage, Cohen, Hanckell & Co., by L’Engle & McConnell, their attorneys, obtained judgment for a large amount against Eichelberger, upon which judgment execution was issued and levied upon the same property which had been levied upon under the Royall execution, and upon still other lands of Eichelberger, which were of considerable value, and also subject to the lien of the Royall judgment and execution. In January, 1869, the sheriff sold, under the Cohen, Hanckell & Co. execution, lands not covered by the mortgage, but subject to the lien of the Royall judgment and levied upon under it, for an amount more than sufficient to pay the Royall execution. At the same time the sheriff offered for sale in bulk the property levied upon under the Royall execution, including the mortgaged lands. The complainant protested against the sale being made in this manner without avail. He then requested the sheriff to offer the property for sale in parcels, according to the subdivisions described, or any fraction of any such subdivision, offering to bid for it the full amount of the execution. This was refused by the sheriff and by the owners of the execution. The complainant then tendered'the whole amount of the execution in payment thereof, whereupon the money, in legal tender notes, was taken and counted over by the defendant, L’Engle, and then refused by bim ; whereupon the same tender was made to the sheriff, and refused by him. The sale under the Royall execution was again postponed, and the sheriff then advertised for sale the mortgaged lands only under that execution, omitting and releasing the other property previously levied on, and advertised the said other property for sale under the Cohen, Hanekell & Co. execution, both sales to take place in March, 1869, and the property so levied on under the Cohen, Hanekell & Co. execution, (and which had before been levied on and offered for sale in January under the Royall execution and released from it,) was then on March sale day sold under the Cohen, Hanekell & Co. execution to said defendant, L’Engle. Afterwards, on the said March sale day, the sheriff offered for sale all the mortgaged property except tho town lot, when complainant again offered and tendered payment in full of the Royall execution, which tender was refused. He then requested the sheriff to put up and offer any one of the subdivisions of the land as advertised, or any fractional part thereof, offering to bid the whole amount of the Royall execution. This was also refused, and the whole plantation property ■ was then offered for sale, and actually sold to said L’Engle for two thousand dollars, and the sheriff executed deeds therefor to said L’Engle. The amount bid was first applied to the Royall execution and costs, and there remained a balance in the sheriff’s hands of $1,164: 72. The town lot in Ocala would not sell for more than $2,000 or $8,000, and is the only portion left of the mortgaged property not sold under this Royall execution, and is entirely insufficient in value to satisfy the mortgage debt of the complainant.

Why the amount of the Royall execution was not accepted by the sheriff or by the owners of the execution when offered and tendered, and why the sheriff refused to sell the town property, or a small fraction of any of the property under the circumstances, so that the complainant might preserve some adequate security for his mortgage debt; or why any portion of the mortgaged property should be sold, (other property having been levied on sufficient to satisfy the execution and released to junior creditors,) or why that other property was released from levy, it is difficult to conjecture, upon the statement made in the bill, except upon the theory ‘and for the reasons alleged by the complainant.

"Where a party has two funds out of which he can satisfy his debt, and another creditor has a lien posterior in point of time on one of the funds only, the first creditor will, in equity, be compelled to resort to that fund which the junior creditor cannot touch, in order that the junior creditor may avail himself of his only security, where it can be done without injustice or injury to the debtor or creditor. This principle, which is so equitable and just, was thus illustrated by Lord Hardwick in Lanoy vs. The Duke and Dutchess of Athol, 2 Atk., 446 : “ Suppose,” he said, “ a person who has two real estates mortgaged both to one person, and after-wards only one estate to a second mortgagee, • the court, in in order to relieve the second mortgagee, have directed the first to take his satisfaction out of that estate only which is not included in the mortgage to the second mortgagee, if that is sufficient to satisfy the first mortgage, in order to make room for the second mortgagee.”

But a court of equity will take care not to give the junior creditor this relief if It will endanger thereby the prior cred. itor or in the least impair his right to raise his debt out of both funds. Evertson vs. Booth, 19 Johns., 486" court="N.Y. Sup. Ct." date_filed="1822-02-15" href="https://app.midpage.ai/document/evertson-v-booth-5474494?utm_source=webapp" opinion_id="5474494">19 John., 486. And it is ■further held in that case that the junior creditors might Lave applied to pay up the prior incumbrance, and thus substituting themselves in the place of the prior mortgagee, have availed themselves of all his rights • and in Schreyver vs. Teller, 9 Paige Ch., 173" court="None" date_filed="1841-05-04" href="https://app.midpage.ai/document/schryver-v-teller-5548570?utm_source=webapp" opinion_id="5548570">9 Paige, 173, the Chancellor says: “ If the judgment creditors were seeking to enforce collection of them judgments against the mortgaged premises, (their-judgments being also a lien upon other lands,) to the prejudice of the mortgagee, he would have an equitable - right to insist that if he paid the judgments, he should have an assignment thereof to enable him to obtain a repayment out of the surplus proceeds of the property not mortgaged in preference to purchasers or incumbrancers of that property, whose claim thereon had accrued subsequent to the date of his. mortgage.” In Rathbone and others vs. Clarke and others,. 9 Paige Ch., 648" court="None" date_filed="1842-10-04" href="https://app.midpage.ai/document/rathbone-v-clark-5548675?utm_source=webapp" opinion_id="5548675">9 Paige, 648, the Chancellor remarks that the proper decree in a case where the rights of the defendants were not set . out in the bill of foreclosure, and the right to a foreclosui’e was not questioned, was to direct the master to sell the mortgaged premises in the inverse order of the alienation, of the several parcels, and according to equity as between the defendants; leaving the master to settle the order of sale upon the principles of equity.

The equitable and legal rights of junior incumbrancers in such cases, and the duty of officers in making sale, are thus emphatically treated by Chancellor Kent in Woods vs. Monell, 1 John. Chy. R., 502 : “ I have no doubt of the value and solidity of the rule, that where a tract of land is in parcels distinctly marked for separate and distinct enjoyment, it is, in general, the duty of the officer to sell by parcels, and not the whole tract in one entire sale. To sell in parcels is best for the interests of all the parties concerned. The property will produce more in that way, because it will accommodate a greater number of bidders and tends to prevent odious, speculations upon the distress of the debtor. Nor does the officer act within the spirit of his authority if he sells more than is requisite to satisfy the execution. To sell a whole tract when a small part of it would be sufficient, or probably sufficient for the purpose, is a fraud that ought to set aside the sale. .The principle which I have-suggested has received a judicial sanction, (Rowley vs. Webb, 1 Binney, 61 ; Extrs. of Stead vs. Course, 4 Cranch, 403" court="SCOTUS" date_filed="1808-03-14" href="https://app.midpage.ai/document/steads-executors-v-course-84878?utm_source=webapp" opinion_id="84878">4 Cranch, 403 ; Hewson vs. Deggert, 8 Johns., 333" court="N.Y. Sup. Ct." date_filed="1811-08-15" href="https://app.midpage.ai/document/hewson-v-deygert-5472880?utm_source=webapp" opinion_id="5472880">8 Johns., 333,) and whenever a case comes fairly within the reach of it, I shall very willingly adopt and apply it.”

We understand from the bill in the case at bar, that the lands subject to the mortgage and which were levied upon under the Royall execution were described as several distinct lots and parcels, making it necessary to produce a map or survey for the purpose of identifying and describing each parcel and the quantity and value of each.

The cases of Clowes vs. Dickenson, 5 Johns. Chy., 235, and Gill vs. Lyon, 1 J. Chy., 447, cited by counsel, and many other cases which we have examined, are so uniform and so pointed in the same direction, that we think there can foe no conflict of opinion in regard to the question here presented.

The purpose of the plaintiff in the Royall judgment, or of the owners of the execution, was, legitimately, to collect the amount due thereon. The acceptance of the payment tendered by a junior creditor having a lien upon a portion of the property, made for the evident purpose of protecting his rights, would have given the prior creditor all that he could get by the delay and the expense of making a sale. The request of the mortgage creditor that the prior creditor first exhaust the defendant Eiclielberger’s other property already under levy before coming upon the mortgaged portion, was one which the prior creditor and the officer were bound to respect. The actual release from levy of property-levied upon by virtue of the execution under the prior judgment, and of sufficient value to pay the execution twice over, and the sale of that property which constituted the principal security of the complainant against his repeated remonstrances, and in the face of a repeated tender of the amount due up to the moment of the sale on the execution, so involves the officer who made the sale that he is deemed to have been properly made a party to this suit.

It was urged in the argument that this bill is prematurely-brought as against the purchaser under the Royall execution, and that the complainant should first have proceeded to the sale of that part of the property covered by the mortgage, which was not sold under the execution. The bill alleges that it has depreciated in value since the date of the mortgage, and is not of present value enough to pay more than about one-sixth of the mortgage debt. The future progress of this suit will show whether this is time or not. For the present, its truth is admitted by the demurrer.

It is contended for appellants that, admitting the alleged indebtedness of Eichelberger to Eitch, and that the mortgaged property unsold is not sufficient to pay it, the court cannot disturb the title of L’Engle acquired by the sale of March, 1869, under the Eoyall execution, the judgment and execution not being alleged to be fraudulent, unless the proceedings by the sheriff were illegal; and that under such circumstances, even if, after sale, the judgment should be reversed, the title of an innocent purchaser with-, out notice will not be disturbed. The case made by this bill sets forth that the proceedings by the Sheriff were irregular and illegal, and that the purchaser had notice and conspired with the sheriff in his acts that made them so ; and the doctrine contended for does not apply.

It was suggested in argument that L’Engle and McConnell had no interest in nor control over the Eoyall execution at the time when the levy was made, and not until ten months thereafter; that the bill shows no benefit that could accrue to them or to Eichelberger, from which to presume collusion; that if there was any, it must have been ©n the part of Eoyall or his attorney and the former sheriff who made- the levy, neither of whom is a party to this suit. It is true that the bill complains of the levy, but it also complains of the sale, and of the part that L’Engle & McConnell and Eichelberger took in it; and. as L’Engle & McConnell were the owners of the Eoyall execution at the time of the alleged illegal sale, and one of them became the purchaser of the said mortgaged property under it, the making parties of them reaches the most material facts complained •of, so as to enable tbe court to do equity between all tbe parties actually in interest.

It is argued that a judgment as soon as entered, and a fi. fa. as soon as delivered to the sheriff, create a lien upon all sthe property of the defendant within the jurisdiction of the court rendering the judgment; that a fi. fa. may be levied upon any property that is subject' to it; that the defendant in execution may have the levy discharged by pointing out «other property sufficient to satisfy the judgment; and that fraud is not shown because the defendant does not see fit to ■do so. It was not so much the levy as the sale that oppressed the complainant; and here the defendant in execution is not charged with fraud upon the plaintiff in execution, but it is charged that while he (the defendant in execution) had abundance of property not subject to the junior lien to satisfy the prior lien, he and the other defendants, knowing this fact, so contrived the sale as to sacrifice most of complainant’s securities, when justice to all did not require it; that the intention and effect of said contrivances were to weaken or destroy the plaintiff’s security, to prevent competition, and to encourage and reward unjust speculation by the defendants at the expense of complainant, greatly to his injury.

It is further argued that if a fi. fa. be levied upon prop «erty subject to a mortgage junior to the judgment, the mortgagee has a remedy provided by law, and should pursue that remedy. He should file his bill of complaint to marshal the «defendant’s assets, and should call in all his prior lien creditors. If he neglects to pursue his proper remedy until after «& sale of the property, it is too late to ask that the sale be ¡set aside, and the title vested in the purchaser disturbed.

This doctrine might be applied if the vendee was not by the allegations in the bill excluded from any present ruling in favor of innocent purchasers.

The authority of the sheriff to change the levy made by a former sheriff is denied by appellants. Such denial would imply that such officer is bound by the levy made by his predecessor, however erroneous, oppressive, or fraudulent it might be, and though he might be aware of gross illegality in it, be would be powerless to change it for a legal and just levy, and would be obliged to sell all of the former levy as made, and in bulk, even though lie might be Assured that any small part of it would bring enough to satisfy the execution. Thompson’s Digest, 355, is cited as sustaining this argument, but the statute does not go that far, and a diligent search of the authorities fails to disclose such a restriction upon the official authority of any sheriff. Indeed, the sheriff’ clid abandon the levy in January, 1869, of a part of the property levied on and advertised, and sold only the mortgaged property under the senior judgment.

It is argued that if the defendant in execution had forbid the sale and tendered payment, there , would be some force in it, but -that the appellee was in nowise connected with the process, and had no right to instruct the sheriff. That, having neglected to take the necessary steps to restrain the sale, he could only come in as a bidder, and by becoming the purchaser, obtain relief by bill to foreclose his mortgage, praying that the surplus should be substituted for the land and applied to the payment of liis mortgage debt. In Burnett and others vs. Donniston and others, 5 Johns. Ch. R., 35, Chancellor Kent held that where a subsequent judgment or mortgage creditor tenders to a naortgagee the full amount of the debt and interest due on the prior mortgage, with costs, which he refuses to accept, unless another debt due to him from the mortgagor not charged on the premises is also paid, but proceeds' to sell the land under the mortgage, such sale is irregular' and void. Dor can the defendant, W. G. D., (says the Chancellor,) be entitled to protection as a Iona ficle purchaser without notice. It is in proof that the plaintiffs, or one of them, was present at the sale, and in the presence of the defendant, W. G. D., forbade the sale, and stated publicly the right of the plaintiffs and the fact of the tender.

The sheriff had authority to accept the payment tendered by this mortgagee, and had he done so and tendered it to the execution creditors, it was all that they had any right to demand, and they must have been held to be satisfied with it. It was no part of the duty of the sheriff to exercise his authority in such a manner as to-result in needless injury to the existing interests of any person, and no part of the object of the execution to aid any person in impairing that mortgage lien. No person but the sheriff had any lawful • control of the sale. He had authority to discontinue it, and had he returned the writ, “ satisfied by payment by Henry L. Ritch, a mortgagee of the land levied on, in order to save his mortgage lien,” no court would have ever questioned the justice of his act. The refusal to accept the payment afforded no protection to any rights of the defendant in execution 5 it was no right of his to have his property thus sold, nor that of the plaintiff in execution, nor his assigns, whose only right was to have the amount of their judgment debt. The tendency of the refusal and the sale was to impair the mortgage lien, and the bill alleges that to have been the inten-. tion, and that Eichelberger, and L’Engle & McConnell, the assignees'of the execution, and one of them the purchaser. of the mortgaged property, conspired with the sheriff against the complainant to have it done. If this is true, and it is admitted by the demurrer, the bill is full of equity. Nor is the appellee justly subject to the charge of neglect of Ms remedy. ■ He had a right to expect that the sale would be fairly conducted by the sheriff, and that the tracts of land would b.e offered separately by the descriptions by which they had been levied upon and advertised, so that he could bid the full amount of the execution for any one of them, and thus save Ms lien. It was the duty of the sheriff so to offer them, if he sold them. By his acts -the complainant was hedged in by circumstances in nowise essential to justice, that left him no just opportunity to save his lien. The officer of the law was evidently working against him, and from no fault of Ms, when it was the duty of the officer to act justly, favoring no one. Had he accepted the tendered payment, the property and all questions concerning it would have remained as they were, the execution would have been paid, and no injustice resulted to any one.

It is argued that the sheriff is not competent to decide upon equities between parties hot connected with the process ; and yet, by refusing to accept the payment by one so •■deeply interested in the property, as he must have known the complainant to be, he refused the best possible performance of the duty imposed upon Mm, and did discriminate in favor of one against another-.

It may be true that in the prayer of the bill there are matters of relief prayed which are not warranted by the facts stated, but there are some to which the complainant is entitled. There is also a general prayer for relief.

It is usual to add the general prayer for such relief as the particular circumstances of the case m.ay require ; so that if the complainant mistakes the'relief to which he may be entitled, the court may yet afford him that relief to which he he has a right, and it has been said that a prayer for general relief, without a prayer for particular relief, to which the party thinks himself entitled, is sufficient, and that the particular relief which the case requires may be prayed at the bar. Cooper’s Eq. Pl., 14; 2 Atk., 3. And may amend the prayer for relief in order to pray for other relief, where improper relief has been prayed. Cooper’s Eq. Pl., 333 ; 12 Vesey, 48. This demurrer goes not to any particular thing prayed for, but to the whole prayer for relief; and if the Mil shows a fight to any of 'the relief sought, the demúrrer is not good, though some portions of -the prayer may not be well founded, and may be mere surplusage.

The second ground of demurrer is, that the bill is multifarious. It is true that there is a considerable portion of the bill devoted to the narration of matters which may be unimportant and irrelevant, but this is not necessarily multifariousness. To render a bill multifarious, it must contain two or more good grounds of suit, which cannot properly be joined in the same bill against the same or different defendants. 9 Paige Ch., 188" court="None" date_filed="1841-05-04" href="https://app.midpage.ai/document/many-v-beekman-iron-co-5548573?utm_source=webapp" opinion_id="5548573">9 Paige, 188. A plaintiff may have a good cause of action against each of several defendants, but the determination of each of which severally does not affect the others; or where a party is brought in as a defendant upon a record, and he has no connection with the case made by the bill against others. In such a case the party so brought in may demur, but more properly for a misjoinder of parties. Story’s Eq. Pl., par. 530. “ In order to determine whether a suit is multifarious, or, in other words, contains distinct matters, the inquiry is not whether each defendant is connected with every branch of the cause, but whether the plaintiff’s bill seeks relief in respect of matters which are in their nature separate and distinct.” “ If the objeet of the suit be single—but it happens that different persons have separate interests in distinct questions which arise out of that single object—it necessarily follows that such differerent persons must be brought before the court, in order that the suit may conclude the whole subject.” “ A billin equity is not multifarious where one general right is claimed by the plaintiff, although the defendants may have separate and distinct rights.” 1 Daniel’s Ch. Pl. and Pr., mar. p. 386, and note 2. “ And in the case of the Attorney General vs. Poole, where the case against one defendant was so entire as to be incapable of prosecution in several suits, but yet another defendant was a necessary party in respect of a portion only of that case, it was decided that such other defendant could not object to the suit on the ground of multifariousness.” Ibid., top p., 401. It is thought that these authorities meet all the grounds of argument urged in support of this objection. Tested by any rule laid down in the books, the bill in this case is not liable to the objection.

The third ground of demurrer is, that William Royall is. • -a. necessary party, as shown by the bill. ' The bill shows that Royall, the plaintiff in the execution, sold and assigned his ■ judgment and execution to L’Engle & McConnell in- Decern- ' ber, 1868, after it had been levied upon the mortgaged property, and upon other property of Eichelberger sufficient to ' satisfy the judgment without reaching the mortgaged property, and that after the assignment by Royall, the sheriff, by • direction of L’Engle & McConnell, released from the levy the property not mortgaged, and advertised for sale, and ' sold, only the mortgaged property. This is the wrong complained of, and Royall was in nowise a party to it, nor can he be affected by this suit in any event. He is not a necessary party.

The fourth ground of demurrer, that the complainant has a remedy at law as to Eichelberger, was not insisted on.

The order of the Circuit Court, overruling the demurrer, must he affirmed.