Youngman v. Elmira & Williamsport Railroad

The opinion of the court was delivered, May 5th 1870, by

Sharswood, J.

Several points have been made and questions discussed in the able and elaborate argument of the learned counsel for the plaintiffs in error, which, in the view we take of the case, it is unnecessary here to consider. The title of the premises, it is agreed, was in Willard prior to August 2d 1856. On that day he conveyed to the Williamsport and Elmira Railroad Company. On the 31st of March 1857, this company executed a mortgage to trustees to secure certain bonds to be issued.

On the 28th April 1860, these trustees united with the trustees under two prior mortgages, in a conveyance to Edward S. Whelen, who by deed dated May 11th 1860, conveyed to the Elmira and Williamsport Railroad Company, the plaintiff below.

The defendant’s title was grounded on a judgment recovered by John Jones against the Williamsport and Elmira Railroad Company, in the District Court for the city and county of Philadelphia, a testatum fieri facias issued thereon, and entered on the docket of Lycoming county January 16th 1860.

The lien, therefore, upon which his title vested, and to which it must relate, was subsequent to the date of the mortgage of 1857.

Whether the sale made by the trustees under the mortgage was pursuant to the powers contained in that instrument, so as to bar and extinguish the equity of redemption of the mortgagor, is a question which does not arise on this record. The conveyance to Whelen was at least effectual as an assignment of the mortgage, and he and his assigns from that time stood in the shoes of the original mortgagees: 1 Washburne on Real Property 519. That a mortgagee or his assignee may maintain ejectment and recover possession of the mortgaged property before the condition is broken, unless there is a stipulation in the instrument to the contrary, is too well settled in this state to be any longer a subject of question: Lessee of Simpson v. Ammon, 1 Binn. 175; Smith v. Shuler, 12 S. & R. 240; Knaub v. Esseck, 2 Watts 282; Martin v. Jackson, 3 Casey 504. The provision made in the mortgage of 1857, oh the subject of possession, plainly excludes the premises claimed' in this ejectment. The language is, “subject nevertheless until default shall have occurred as hereinafter mentioned to the possession and use of the said party of the first part, their successors and assigns, and their president, managers, officers and agents, on the road of the said company, or on any other road, subject to this mortgage, according to the effect and meaning of the several acts and supplementary acts of the legislature, incorporating or concerning the said party of the first part.” Now the contention of the plaintiffs in error must be and has been that the premises in dispute form no part of the road, else their title by the sheriff’s sale under the testatum fails altogether. The road with all its appertenances being necessary to the exercise of the franchises granted by the sale, could not be levied on and sold under an execution on a judgment against the corporation: Ammant v. The New Alexandria and Pittsburg Turnpike Road, 13 S. & R. 210; The Susquehanna Canal Co. v. Bonham, 9 W. & S. 29; Shamokin Valley Railroad Co. v. Livermore, 11 Wright 465. The lot in question then being no part of the road is left unaffected by this provision, and the right of the mortgagee to enforce his legal title by an ejectment remains as at common law. The plaintiffs in error having succeeded to the rights of the mortgagors, could doubtless have set up any equity in them to defeat the recovery. They could have shown that no bonds had been issued for the security of which the mortgage had been given, or that if issued they had been fully paid and satisfied; but then the onus was upon them to make this out, otherwise the primfi facie legal title of the assignees of the mortgage must succeed.1 Nothing of the sort was attempted or pretended.

But it is contended that the mortgage of 1857 was extinguished by the decree of this court in equity, January Term 1860, No. 6, and the sale made under it, though at the same time it is most strenuously maintained that the court had no jurisdiction of that cash, and that the decree being coram non judioe was therefore a nullity. The plaintiffs in error are on the horns of a dilemma. If the court had jurisdiction, then the decree, however erroneous in law or in fact, was conclusive, and a valid title passed in pursuance of the sale made by the trustees under it; if the court had no jurisdiction, then its decree was a nullity, and the rights and titles of the parties remain as though it liad never been made. If a mortgagee were to proceed by scire facias in a court having no jurisdiction, the purchaser under such proceedings having in good faith paid his money, would be entitled in equity to be subrogated to the mortgage. It clearly would not be extinguished by a void proceeding. We have no question in this case of equitable subrogation; for there is a legal conveyance of the land, which in law is an assignment of the mortgage, duly executed by the mortgagees themselves.

Here the cause might well be rested. This view concedes that the court had no jurisdiction of the bill in equity so as to decree a sale which would extinguish the mortgage of 1857 and the equity of redemption of the mortgagors. It is by no means clear, however, that this is so under the principles of the case of Bradley v. The Chester Valley Railroad Co., 12 Casey 141. It is there admitted, that if the mortgage create a trust and provide that the power of sale is to be executed by the trustee in certain contingencies, he may be controlled, restrained and directed by a court of equity at the suit of a party standing in the relation of a cestui que trust. Now it was for the court to decide whether the contingency had happened which gave them jurisdiction, and that decision could not be impeached collaterally, either by the parties, or those who, not being necessary parties, were bound by the decree. In this category was John Jones, the judgment creditor. He had no encumbrance on the property until after the commencement of the proceedings in this court. It is perfectly well settled, that encumbrancers who become such pendente lite, are not necessary parties to a bill to foreclose, although they are bound by the decree, for they can claim nothing except what belonged to the person under whom they assert title, since they have constructive notice; and there would be no end of such suits, if a mortgagor might by new encumbrances, created pendente lite, require all such encumbrancers to be made parties: Story’s Eq. Pleadings, § 194; 1 Washburne on Real Property 593; Bishop of Winchester v. Paine, 11 Vesey 194, 197; Garth v. Ward, 2 Atk. 174; Adams v. Paynter, 1 Coll. 532. The vendee of the sheriff by deed acknowledged December 2d 1864, long subsequent to the decree, was of course bound by it if the judgment creditor was. But even if this were not so, the Act of Assembly of March 12th 1860, Pamph. L. 682, cures the defect. It would surely have been competent for the legislature to have authorized a sale by the trustees, even if the contingencies had not occurred. Nobody would have had any right to object but mortgagors and the cestuis que trust, the bondholders. They were parties consenting, as the act recites; at least we hear of none who dissented. They raised no voice against the sale. The legislature then ratified the jurisdiction of the court, authorized the attorney of the first mortgage bonds to become the purchaser at the sale, and to convey the title so acquired to the new company incorporated by the act under the name of the Elmira and Williamsport Railroad Company, the plaintiffs below in this ejectment. We think, therefore, that the instruction of the learned judge below to the jury to render a verdict for the plaintiffs was right. Judgment affirmed.