Brawner v. Watkins , 28 Md. 217 ( 1868 )

Grason, J.,

delivered the opinion, of this Court.

On the 26th October, 1850, Lyne Shackelford executed a mortgage to Gwyn, Reid & Taylor, to secure the payment of his note to them for $2,364.37. On the 6th May, 1853, they obtained a decree, on the equity side of the Circuit Court for Charles county, for the' sale of the mortgaged premises for the sum of $1,583.77, the balance then due upon the mortgage. Subsequently to the date of the decree, Thompson, Stewart and Mathews endorsed a note for Shackleford to Walter Mitchell for the sum of $1,750, and with the money thus raised, Shackelford’s indebtedness to Gwyn, Reid & Taylor was paid, and the mortgage and decree were assigned to Thompson, Stewart and Mathews, for the purpose of securing and indemnifying them as such endorsers; and on the 13th December, 1853,' Shackelford executed a mortgage to them of the same premises, for the purpose of fully securing and indemnifying them against their liability as said indors•ers; in which mortgage the assignment of the previous mortgage and decree to them for the same purpose is recited. At the February Term, 1853, of the Circuit Court for Charles couniy, the appellees obtained a judgment against Lyne Shackelford for the sum of $396.59. In March, 1854, Shackelford died intestate, and on the 26th June, following, William P. Mills filed a creditors’ bill against his administrator and heirs-at-law, for the sale of his real estate for the payment of his debts, on the ground that his personal estate was insufficient for that purpose. Thompson, Stewart and Mathews not having been made parties to the original bill, Mills filed an amended bill, asking that they might be made parties aiid that their interest in the said real estate might be decreed to be sold. They filed their answer admitting that they were the holders of the mortgage of the 13th December, 1853, and alleging that the mortgage and decree of Gwyn, Reid & Taylor had also been assigned to them. The appellees were not made parties to these proceedings. A decree was passed for the sale of the said real estate, and one Peregrine Davis became the purchaser; the sale was ratified, the purchase money was paid and distributed under the direction of said Court, after due notice to the creditors of Shackelford to file their claims in the cause; and the appellant derived his title to the land from Davis, the purchaser at the trustee’s sale. In April, 1861, the appellees sued out a writ of scire facias upon their judgment, which was served upon the appellant, as terre-tenant of Shackelford, and at the trial two prayers were offered, one by the appellees and the other by the appellant ; the former of which was granted and the latter rejected by the Court; and the judgment being against the defendant below, he appealed. The question, presented by both prayers, is whether or not the judgment of the appellees could be enforced against the land, of which Shackelford had died seized, and which was then in the possession of the appellant. It has been contended that a judgment creditor, not a party to the cause, is not bound to seek payment out of the proceeds of sale in the hands of the trustee, but that he may prosecute his lien against the property, after its conveyance to the purchaser; and the cases of Duvall, and others, vs. Speed, and others, 1 Md. Chan. Dec., 229, and Brooks vs. Brooke, and others, 12 G. & J., 307, were relied upon as decisive of this proposition. In each of these cases the judgment creditor held the prior lien, and not having been made a party to the cause, it was very properly decided that ho might prosecute his lien against the land in the hands of the purchaser. The case before us is very different from either of these. The mortgage of Gwyn, Eeid & Taylor, was prior to the judgment of the appellees, and conveyed the legal title to the land, and consequently the judgment of the appellees was a lien upon the mortgagor’s equity of redemption only. The mortgage and decree having been assigned to Thompson, Stewart and Mathews, they stood in the place, and acquired all the rights and interest, of the assignors. They were then the holders of the legal title under a mortgage prior to the judgment of the appellees, were parties to the cause and their interest in the land was decreed to be, and was, sold by the trustee. Under these circumstances the appellees were bound , to seek payment of their judgment from the proceeds of sale in the hands of the trustee.

(Decided 12th February, 1868.)

It has also been argued that the payment to Gwyn, Beid Taylor, was a satisfaction and extinguishment of their mortgage and decree, and that the judgment of the appellees thereby became the prior lien upon Shackelford’s land. It is true, as a general rule, that a payment of the money by one, whose duty it is to pay, extinguishes the mortgage; but there are exceptions even to this rule. Whether a payment will be considered a satisfaction and extinguishment or not, depends upon the interest and rights of third parties, and the intention of the parties to the transaction at the time of payment. 1 Hilliard on Mortgages, 535; Walker vs. Stone, et al., 20 Md. Rep., 198. In this case there was an express assignment of the mortgage and decree, and, from all the facts contained in the record, it was clearly the intention of all the parties to the transaction, that the mortgage and decree should not be extinguished, but should be kept alive and assigned, as they actually were, to Thompson, Stewart and Matthews.— Erom these views it follows that there was error in granting the appellees’ prayer as well as in rejecting the prayer of the appellant; and, as it is finally settled that the appellees’ judgment is not a lien upon the land in the appellant’s possession, the judgment of the Court below must be reversed.

Judgment reversed.