James v. Hubbard

1 Paige Ch. 228, 1828 N.Y. LEXIS 374, 1828 N.Y. Misc. LEXIS 45

Opinion

The Chancellor :—The charge of fraud made against the defendant Hubbard, is fully met and disposed of by the answer and proofs. It is also denied in the answer, that Tuckerman had any lands in Willsborough or Denmark which were subject to the lien of the judgment, and no evidence is adduced to support that allegation in the bill. The situation of the Bridgewater lands is also fully explained in the answer.' If there had been other lands in the counties of Oneida, Lewis or Essex, or even in the county of Madison, which were subject to the lien of this judgment, it could have made no difference in this case, as the hen of the judgment would have expired before those lands could have been advertised and sold. If the complainant wished to have those lands first applied, he should have offered to pay the amount of the judgment to Hubbard, and have taken an assignment of the same, if there was time to advertise and sell. But as there was not, it is probable, that by filing a bill against the several parties in interest before the expiration of the ten years, he might under the equity of the statute, (sess. 36, ch. 50, sec. 1, 1 R. L. 500,) have preserved the lien so far as to compel contribution according to equitable principles. At all events, if the remedy was gone as it respected himself, he had no right to require that Hubbard should lose the benefit of his hen on the lands which were advertised by the sheriff.

The only question then in this case is, what was equitable between the parties in relation to the lands actually *advertised by the sheriff of Madison ? In Clowes v. Dickinson, (5 John. Ch. Rep. 235,) it was decided that a judgment creditor had no right to enforce his judgment against the land of a subsequent purchaser, so long as there was other land remaining in the hands of the judgment debtor or his heir at law, sufficient to satisfy the lien.

Footnotes

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[1] In that case, also, a pretty strong opinion is intimated by the court, that as between successive purchasers there is to be no contribution, but their lands are chargeable with the incumbrance in" the inverse order of alienation: that is, the lands of the last purchaser are to be first charged. The eleventh section of the act concerning judgments and executions, (1 Rev. Laws, 503,) provides, that where lands or tenements, in the hands of several persons, shall be liable to satisfy any judgment or debt of record, and the whole, or more than a due proportion, shall be paid by or levied upon the lands of any one or more of them, the person aggrieved may have a writ out of Chancery, setting forth his or their grievance, directed to the justices of the Supreme Court, commanding them to hear the complaint, and to do justice to the parties, &c. I am not aware that any proceedings have ever been had under this section of the statute, or that a construction has been given to it in any of our courts. But there appears to be nothing in its provisions inconsistent with the principle assumed by Chancellor Kent, and insisted on by the complainant in this case. It frequently happens that judgments and mortgages are liens upon the lands of several persons where there is equality of equity, and where contribution would be just and proper; as in the case of several conveyances to different persons by the judgment debtor at the same time; or where the lands, bound by the judgment, are in the hands of the heirs at law of the debtor, or of different persons claiming under them.

Wherever the judgment creditor disposes of a part of the land held by the judgment, the purchaser has an equitable right to have the judgment discharged out of the residue of the property. Although a subsequent purchaser has an equal equity to have the land which he has purchased and *paid for discharged from the lien of the judgment, as against the debtor, the first purchaser having the prior equity must be preferred. Where the equities are equal, and neither has the legal right, the maxim qui prior est in tempore potior est injure prevails. (Covell v. The Tradesman's Bank, ante, 131.) It does not follow from what has been said, that the date of the conveyance is in all cases to determine.the question as to the priority of equity between different purchasers. That is prima facie the time when the equitable right accrues. But if it should turn out that a purchaser had contracted for the purchase of his land and actually paid for the same, he would be preferred in equity to a subsequent purchaser, although the conveyance to the latter might be prior in point of time.

The equitable rights as between successive purchasers being established, the next question which arises is, what are their rights as against the judgment creditor ? In several cases the principle has been recognized, that where a creditor has a right to resort to two funds for the satisfaction of his debt, the party who has a subsequent claim upon one fund, only, may compel him to exhaust the other fund before he resorts to that in relation to which such subsequent claim exists.[1] (Evertson v. Booth, 19 John. 486; The New York and New Jersey Steamboat Ferry Company v. The Association of the Jersey Company, 1 Hopk. 460.) It is insisted by the defendant’s counsel that this can only be done by a resort to the equitable power of this court in the first instance; and I am not aware of any case where it has been held that the creditor must, at his peril, decide upon the equitable rights existing among the holders of different portions of the property on which he has a general lien for the satisfaction of his debt.

If the agent of Hubbard had left the sheriff to exercise his own discretion in deciding upon the equitable claims of the different purchasers of the land, I should have no difficulty in this case in deciding that the purchase of the complainant’s farm must stand, and that his remedy was against the other parties, to compel them to refund the purchase-money to *him, so far as they were benefited by such sale in discharging their own lands from the lien of the judgment. On the other hand, if the complainant had made all the owners of the lands, which he now insists should have been first sold, parties to this suit, I should have no difficulty in doing justice between them.

No decree can be made affecting the rights of the owners of the half acre sold to Reynolds, or the three-tenths of ten acres sold to Curtis and McConnell. All the lands were sold which Had been aliened subsequent to the Berry farm. It appears by the pleadings and proofs, that all the right and title which Tuckerman ever had to that farm ought to have been sold before either of the small pieces, or the lands of the complainant were charged. And as the heirs of Berry are parties to this suit, the complainant’s equitable claim against that farm can still be enforced. I shall, therefore, direct that the same be sold under the direction of one of the masters of this court, and that the proceeds of such sale be applied in satisfaction of the amount for which the complainant’s lands were sold; and if there is any thing remaining after satisfaction of that amount, that it be applied in payment of the complainant’s costs in this suit. But as it also appears, by the pleadings and proofs, that the title to that farm is in dispute, it must be sold at the risk of the purchaser. The complainant must also be at liberty to redeem his land from the sale to Hubbard, on paying to him the amount of the purchase-money with interest thereon, at the rate of seven per cent, per annum; deduct ing the $13, which, by mistake, had not been credited on the judgment.

It is stated in the proofs, although I have not been able to find any allegation of the fact in the bill or admission in the answer that the reason why the Reynolds’ lot was not sold was, that there had been some agreement with Hubbard, by which that lot was discharged from the lien of the judgment. If such was the case, the complainant had a right to have the value of the lot deducted from the amount due on the judgment before his lot was sold. If, therefore, the Berry lot shall prove insufficient to satisfy the amount charged on the complainant’s farm, with costs, as above mentioned, it must *be referred to a master to examine and report whether Hubbard had done any act by which the lien of his judgment on the Reynold’s lot had been legally or equitably discharged, previous to the sheriff’s sale; and if it had been so discharged, the master is further to report thé value of that lot at the time of the sheriff’s sale, allowing the. owner to retain the possession thereof until the expiration of the time of redemption on sheriff’s sales; and that on the coming in and confirmation of such report, the value so reported, with the interest thereof, or so much as may be necessary to satisfy the balance due to the complainants as aforesaid, be paid to him by the defendant Hubbard, or allowed towards the redemption of the complainant’s land from the sheriff’s sale.

Clowes v. Dickinson, 9 Cow. 403; Guion v. Knapp, 6 Paige, 39; Eddy v. Trarver, 521; Gill v. Lyon, 1 John. Ch. 447.

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Halsey v. Reed, 9 Paige, 446; Ayres v. Husted, 15 Conn. 504-519. The equitable doctrine in regard to the marshaling securities, is applicable only where one party has a lien or interest in two funds, with a right to resort to either or both, and another party has a lien on or an interest in only one of those funds. The Farmers' Loan and Trust Co. v. Walworth, 1 Comst. 433.