121 N.J. Eq. 157 | N.J. Ct. of Ch. | 1936
Complainant's suit for relief is based on the following statements in its bill of complaint:
June 24th, 1933, the defendant, Augusta Wichner, recovered a judgment in our supreme court against Thomas E. Halpin and caused his arrest on a capias issued thereon. Thereafter Halpin filed a petition in the Hudson common pleas under the act for the relief of persons imprisoned on civil process and an assignee was appointed, to whom Halpin assigned all his real and personal property, and by subsequent *158 order of said court Halpin was discharged from confinement on account of any debts by him previously contracted. The defendant was listed among Halpin's creditors and appeared in said proceedings. January 30th, 1935, Halpin's assignee conveyed certain lands known as lots 27 to 31 (included in the debtor's assigned assets) to Sarah Halpin, who on February 15th, 1935, mortgaged lots 29 to 31 to complainant, which mortgage was subsequently foreclosed and the mortgaged premises conveyed to complainant by the sheriff. April 14th, 1936, complainant recovered a judgment against Sarah Halpin and Thomas E. Halpin and under execution issued thereon, lots 27 and 28 were conveyed to complainant — thus complainant claims to own lots 27 to 31. The defendant "recently" issued alias execution (presumably on her judgment against Thomas E. Halpin), levied on lots 29 to 31, and has caused those lots to be advertised for sale.
Complainant claims that by reason of the insolvency proceedings and the assignee's conveyance, the lien of defendant's judgment on lots 27 to 31 was lost and that defendant's attempt to sell lots 29 to 31 under her execution endangers complainant's title and creates a cloud thereon. Complainant's prayer is for a decree that defendant has no lien on any of the five lots, and that defendant be restrained from asserting a lien thereon and be decreed to release said lots from the purported lien of her judgment. Defendant moves to strike out the bill on the ground that it discloses no cause of action, and on other grounds which may be condensed into the single ground that the bill shows defendant's judgment to be a lien on the five lots prior to the title acquired by complainant.
The statute involved in this motion is known as the Insolvent Debtor's act and is found in 2 Comp. Stat. 1910 pp. 2824 etseq. The design of the act is solely to abolish imprisonment on civil process where a debtor is willing to deliver up to his creditors all his estate toward the payment of his debts.Steelman v. Mattix,
Section 18 of the statute provides that the debtor's assignee shall be vested with as ample title to all lands assigned as the debtor himself had, which means that by his assignment a debtor can vest in his assignee no better title than the debtor holds. In the instant case, prior to the date Halpin made his assignment, the defendant had recovered her judgment against Halpin, and that judgment became and remained a lien on Halpin's land from the date of its entry (3 Comp. Stat. 1910 p. 2956 § 2;Reeves v. Johnson,
It has been held that an assignment made by an insolvent debtor passes the right of an insolvent in the same plight and condition that he possessed them, and that one who took title *160
by virtue of a conveyance from the assignee of such debtor, took subject to an equitable lien for purchase-money in favor of a former grantor of the conveyed land, although the purchaser from the assignee had no notice of the lien. Vandoren v. Todd,
I think there can be no doubt but that the title to lots 27 to 31 which Halpin transferred to his assignee and the title the assignee conveyed to Sarah Halpin, was subject to the lien of defendant's judgment, and that such lien attached to and followed lots 29 to 31 in the hands of complainant who acquired title through Sarah Halpin's mortgage covering those lots and the foreclosure thereunder, and that complainant is not entitled to the relief it seeks against defendant's judgment and execution levied on those lots. Defendant's motion should prevail against the bill of complaint so far as the bill asserts a claim against lots 29 to 31 superior to that of defendant's judgment.
The situation as to lots 27 and 28 is different. Although Sarah Halpin held title to those lots subject to defendant's judgment, the bill alleges the subsequent recovery of complainant's judgment against her, execution issued thereon, and sale to complainant thereunder. The priority by virtue of earlier entry of defendant's judgment over complainant's judgment could be lost by failure of defendant to issue execution on her judgment, or, if issuing execution, failing to make levy on lots 27 and 28 before the issuance and levy *161
thereunder of execution on complainant's judgment. 4 Comp. Stat.1910 p. 4676 § 9; Clement v. Kaighn,