Lee v. Stone , 5 G. & J. 1 ( 1832 )

Dorset, J.

delivered the opinion of the court.

Among the numerous grounds upon which the decree of the Chancellor is attempted to be reversed, the appellants have urged one, which, if sustainable, would remove all motive for further litigation on the various questions which have been discussed in the progress of the cause. It has been contended, that Booth’s interest in the land sold, being a mere equitable estate, a judgment at law against him would create no lien upon it, that, in a Court of Equity, would give it a preference over the claims of his creditors generally. This position we cannot sanction. Courts of Chancery in adjusting the conflicting rights of creditors, following by analogy the principles of the common law, will, as far as equity and good conscience permit, regard a judgment as a lien upon the equitable real estate of the debtor. 1 Pow. Mortg. (Coven. Ed.) 263, 4, 276, 281, 2, 307, and 2 Ib. 607, 8.

The appellants have also insisted upon another principle, which if established would be equally conclusive on the matters in controversy; and that is, that the payments to Edmund Key, the guardian, having been made without the previous sanction of the Court of Chancery, were made by Booth in his own wrong, and ought not to be carried to his credit in ascertaining the balance of the purchase money due to the heirs of Jordan. To support a doctrine fraught with so much hardship and injustice, no unbending rule of law, or equity, has been adduced. We know of none that could sustain it; and think the credits properly allowed, upon the established rule in chancery, that acts done bona fide without an order, for the doing of which, an order would on application have been passed as a matter of coursé, shall be regarded in the same light as if emanating, from an order previously obtained for that purpose. But suppose it were otherwise, and that this objection if taken in due season were well founded. The appellants have precluded themselves from all benefit which they might otherwise have derived from it, by their agreement of the 21st of June, 1826, and by the Chancellor’s order under that agreement, ratifying the auditor’s statement, from which ratification no appeal was taken within the time prescribed by the act of Assembly.

By this order of the Chancellor, all the payments were confirmed as credits to be deducted from the balance of the purchase money then due by Booth's estate; and if there were errors in it, the time has elapsed within which their correction must have been sought. But there was no such error. Even if the ground first assumed to maintain the auditor’s statement were untenable, the agreement of the parties is ample for that purpose. Upon no principle of fair construction, can the appellants’ interpretation of it be supported. They seek to evade the eonclusiveness of the Chancellor’s order, from its not having been appealed from within the limited time, and to open to scrutiny and revision, the items in the auditor’s statement, by that part of the agreement which states,, that “ it is further agreed, that if a sale should be made under this agreement, if it should be made appear to the satisfaction of the Chancellor, that there are other moneys due to the heirs of Richard Jordan, from the estate of the said Jeremiah Booth, that then, and in that case, the proceeds of the sale shall be applied to the payment thereof, as well as to the before mentioned sum of $2018.93, with interest and costs, provided there are no other claims against the estate of the said Jeremiah Booth, entitled to a preference or participation in the fund.” But this part of the agreement was never designed to license a nullification, or impeachment of the auditor’s statement, or any part of its contents; but was intended simply to authorise the appellants to increase and secure the payment of the balance due them, by proving claims against the estate of Booth, not professed to be adjusted by the audit, manifestly looking to the claim now insisted on against Booth, as the security of Key, in his guardian’s bond.

It has been further contended, that the appellants are to be first paid, as well the balance due them from Key, as that which appears on the auditor’s account; Booth, as the security, being answerable for the defalcations of the guardian ;—that the appellants being seized of the legal estate in the land sold, their legal title could not be taken from them until they were paid, not only the remaining balance of the purchase money upon whatever account due from Booth to them; and this pretension is rested upon the familiar principles of equity, “ that he who seeks equity, must do equity; that a multiplication or circuity of action should he avoided.”

But these principles have never been carried to the extent, that would be necessary to their affording relief to a party in the predicament of the present appellants. They stand here in the character of complainants seeking to enforce their lien, for a balance of the purchase money, by a sale of the premises on which their lien attaches; and require this court not only to enforce their lien, but to tack to it another debt, apart from such their application entitled to no priority over other creditors; and this to the exclusion of another creditor before the court, whose debt is secured by a lien on the premises. If there be any case to warrant this requisition, it has not been presented to our notice in the argument; and has certainly escaped our researches upon the subject. It is true, that if a mortgagor goes into chancery to redeem, upon the axioms of equity above mentioned, he will not be permitted to do so but upon payment, not only of the mortgage debt, but of all other debts due from him to the mortgagee. In this there is no prejudice to the rights of others; no body has a right to complain : no injustice is done to any body.

But it is also true, that if the mortgagee seek a foreclosure in chancery, the mortgagor will be permitted to redeem upon payment of the mortgage debt only, no matter to what amount, on other accounts, he may stand indebted to the mortgagee. And it is equally clear, that if a subsequent mortgagee, or judgment creditor, file a bill to redeem, he will be permitted to do so upon the payment of the mortgage debt alone. Whilst these well settled principles of equity remain unshaken, upon no system of analogy or consistency can the claim of the appellants be gratified. Their doctrine is, in effect, simply this, that in all cases where the sale of the real estate of a deceased debtor is decreed, the debts due to the heirs at law, to whom such estate has descended, be their nature what they may, must first be paid, even to the exclusion of judgment creditors. To such a length the doctrine of tacking has never yet been carried.

The views we have expressed of the prominent features of this case, render it unnecessary to investigate the auditor’s statements, to ascertain whether the alleged error of having twice credited the guardian with the same expenditure of $555.25, exist or not; as the result of such an investigation could not affect the Chancellor’s decree. If there be such error, it would only vary the general balance due to the appellants. It forms no part of the amount secured by their specific lien, and would be postponed until the judgment of the appellees were wholly paid, for which the entire fund in dispute is greatly inadequate.

DECREE AFFIRMED WITH COSTS.