Farmers & Merchants Bank v. Holliday

I concur in affirming the judgment, but I do not concur in the reasons for overruling the second and third grounds of appeal. Subdivision 1 of section 348 of the Code of Procedure reads:

"Final judgments entered in any Court of record in this State, subsequent to the 25th day of November, A.D. 1873, shall constitute a lien upon the real estate of the judgment debtor in the county where the same is entered for a period of ten years from the date thereof; and a transcript of such judgment may be filed in the office of the clerk of the Court of Common Pleas of any other county, and, when so filed, shall constitute a lien on the real property of the judgment debtor in that county from the date of the filing thereof, with the same force and effect as the original judgment, for the period of ten years from the entry of said original judgment Provided, That the verdict of a jury, where rendered for an amount of money, and the order of the Court, in a cause tried or determined by the Court, upon a money demand, shall be a lien upon all the real estate of the person against whom the same is rendered, from the rendition of such verdict or order until the expiration of the five days from the rising of the Court at which the same was rendered:Provided, further, That all such verdicts and orders rendered and issued at the same term of Court shall have no priority one over another, notwithstanding they may be rendered and issued on different days of said Court."

The last proviso, that verdicts and orders of the same term shall have no priority one over another, is not relevant to the present issue. It was not intended to affect the priorities of transcripts filed in another county, but only the liens given by the proviso immediately preceding it to verdicts and orders obtained during the term from their date until the expiration of five days after the term, when the final judgments thereon could be entered. These provisos were added to the section by the act of 1909, 26 Stat. 39. Prior to that time, a verdict, or an order for judgment, did not constitute a lien upon the real estate of the judgment debtor, until the judgment was entered thereon; and, under rule 3 of the Circuit Court, the clerk is forbidden to enter any judgment, without special leave of the Court, until the expiration of five days after the Court has adjourned for the term. The purpose of the rule was to allow all judgments obtained at the same term to have equal rank, provided, of course, they were entered on the same day; and these provisos were so framed as to carry out that intention. But prior to that time the Court had, and still has, power in its discretion to grant special leave to the clerk to enter judgments on verdicts and orders obtained during the term, before the final adjournment thereof. That was done in this instance, and a number of judgments were entered against the defendant, Holliday, on the same day; and, of course, they all took equal rank as liens upon his real estate in Marion county.

We must, therefore, treat the question at issue just as if all these judgments had been entered on the same day after the Court had adjourned for the term. That being so, we are brought to the question whether the mere filing of a transcript of judgment with the clerk of Court of another county than that in which the original judgment was entered constituted a lien upon the real estate of the judgment debtor therein before it was entered upon the "Abstract of Judgments;" and that question must be answered in the negative. No doubt, there is a technical difference between the "filing" and the "docketing" of transcripts; and section 348 says that, "when so filed," the transcript shall constitute a lien, etc. But the language of that section must be read and interpreted in connection with sections 339, 340 and 341, in the light of the history of the legislation upon the subject, and the decisions of this Court construing that legislation to ascertain the legislative intent. This Court has uniformly held that the mere filing of a judgment roll, decree, or transcript thereof with the clerk constitutes no lien, until it is entered upon the book called the "Abstract of Judgments," which the clerk is required by section 339 to keep, and upon which he is required by section 340 to enter every judgment. Harrison v. Mfg.Co., 10 S.C. 278; Reid v. McGowan, 28 S.C. 74,5 S.E. 215; Mason v. Music Co., 45 S.C. 11, 22 S.E. 755. While it is true, as held in the case last cited, that a judgment is not the less a judgment, in the sense that it is a filed determination of the rights of the parties, and, perhaps, for other purposes before it is so entered; nevertheless, the cases cited hold that the administrative act of entry is required to give it force and effect as a lien upon the real estate of the judgment debtor in the county, and entitles the judgment creditor to enforce it by execution. It follows that the transcript of the judgment of the Peoples Bank filed with the clerk in Dillion county on June 2d did not become a lien until it was entered on June 3, 1913, and it ranks equally with the transcript of the judgment in favor of the Farmers Merchants Bank which was entered the same day.

Upon the next proposition, which involves the adjustment of the priorities of the various liens, we must keep in mind the fact that a judgment is a lien only upon the land of the judgment debtor situated in the county in which such judgment has been entered, and not upon his lands in any other county; and for that reason, a judgment creditor is allowed by statute to file and docket a transcript of his original judgment in any other county in which his debtor may own real estate, in order that he may acquire a lien upon it; also, that, in respect of legal liens, priority in time ordinarily secures priority in right. As the judgments entered in Marion county, on June 2d, were not liens upon the lands in Dillon county, they had no priority over those entered in Dillon county on June 3d, even though they were prior in date. Therefore, the judgment creditors who filed their transcripts in Dillon county have priority of right to the surplus fund left from the sale of the Dillon county lands; and, as their original judgments are of equal rank with those of the other judgment creditors in Marion county, they are entitled, after the application of that surplus to their judgments, to share ratably with the other judgment creditors in the surplus fund realized from the Marion county lands.

Under the equitable two fund doctrine, if there had been no judgments in Dillon county, the mortgagee could have been required to exhaust those lands in satisfaction of his mortgage to the exoneration of the Marion county lands in favor of the Marion county judgment creditors;e converso, as to the Marion county lands in favor of Dillion county judgments, if there had been no judgments in Marion county. But, as there were judgments in both counties, and as the Marion county judgments had no priority over the Dillon county judgments in respect of the lands in Dillon county, and as the Dillon county judgments had no priority over the Marion county judgments in respect of the lands in Marion county, neither had the right to have the equitable two fund doctrine applied so as to disturb the legal liens acquired by the others in the respective counties. In the administration of legal liens, equity follows the law, and gives them rank according to their legal priorities. 1 Story's Eq., sec. 553. Therefore, the Court properly held that the mortgage must be paid out of the two funds realized from the sale of the lands in both counties, each fund contributing ratably its proportion of the mortgage debt, leaving the surplus from the lands in each county to be applied to the judgment liens thereon, according to their priorities.

The two fund doctrine rests upon equitable principles, and, therefore, it will not be allowed to defeat the equities of third persons over whom the parties invoking it have no superior equities. Wardlaw v. Oil Mill,74 S.C. 368, 54 S.E. 658, 114 Am. St. Rep. 1004. In applying the rule, the maxim, "Qui prior est in temporepotior est in jure," has peculiar force.

MESSRS. JUSTICES WATTS and GAGE concur in the opinion delivered by MR. JUSTICE HYDRICK.