Summary
THIS was an appeal by Alexander Mode and Jane Johnson, Jun., from the decree of the Court of Common Pleas of Chester county, distributing money in court arising from the sale of real estate by the sheriff under writs of execution.
Samuel Eckstein was on the 9th May 1825, the owner of a paper-mill, messuage and four adjoining tracts of land in Chester county, containing about 130 acres, which on that day he mortgaged to Alexander Mode and William Mode to secure the payment of $5000 in instalments, of which $1000 had been since paid off, which mortgage was recorded on the 11th May 1825. In August 1825, Eckstein conveyed the premises to John Carson. On the 12th November 1825, Carson mortgaged them to Eckstein to secure the payment of $1000. This mortgage was subsequently assigned to and was now held by Jane Johnson, Jun.
Judgment was entered in the Common Pleas of Chester county on the 26th February, 1828, in favour of Eckstein, against Carson, for another debt of $2526.94, arid by proceedings under it, the premises were levied on and sold by the sheriff, on the 22d June, 1829, to Anthony Kelty, for $1795, and the sheriff’s deed acknowledged on the 3d August, 1829. Neither the levy, sheriff’s return, deed, nor any of the proceedings of record in the suit, alluded to these mortgages. In Kelly’s written subscription to the contract of sheriff’s sale, deed and sheriff’s return, the consideration stated was $1795. The appellants alleged that this sale was made subject to their mortgages, as well by the understanding and agreement of all parties, as under the conditions of sale. The third condition of sale was, “ the premises are sold free and clear of all liens by judgment or execution, and subject to all legal encumbrances by mortgage, will or otherwise, created prior to the lien of the judgment on which the premises are sold.” The sheriff proved the conditions, and also that they were generally the same as those under which they usually sold during the time ■■he was in office up to that date and after for some time: but these differed from others in having the word “ will” inserted in this condition. He had in his possession certificates of the mortgages above-mentioned. It was his practice' to exhibit them, but he did not recollect exhibiting these. He did not read them, but mentioned he had them if any one wanted to see them. He thought the property then worth $7000 or $8000. His uniform practice was to read the conditions of sale, and he did not doubt they wore read at this sale. Kelty proved he bought subject to the mortgages; that he knew of Mode’s and Johnson’s mortgages, but did not know who informed him. He bid $1700 or $1800 under that impression. Figures, calculated by some one on a post, showed him afterwards the amount of the mortgages and interest, and the sum he bid, but the interest was more than he expected. He paid interest to Mode on his mortgage for several years.
On the 8th May 1838, Kelty mortgaged the premises to Phelps and Spafford, of Connecticut, to secure the sum of $5200, previously contracted for placing machinery in the mill. This mortgage Was subsequently assigned to the Norwich Bank, and again by them to the Bank of Chester county.
To May Term, 1842, Mode sued out an amicable scire facias on the mortgage, in the Common Pleas of Chester county, against Eckstein, mortgagor, and Kelty, terre-tenant, by which it was agreed that Kelty purchased the premises expressly subject to the payment of the mortgage debt, aVpart of the price of the lands, and assumed the payment of the debt and interest, such being the understanding and arrangement between all the parties concerned at the sheriff’s sale, and had continued to pay interest, &c., and judgment was confessed .for $472-6, balance due at that date on the mortgage. To the same term-an amicable scire facias against Carson’s administratrix and Kelty, terretenant, of the same tenor and effect, was entered and judgment confessed for $1031.16.
To the same term, in the case of the Norwich Bank against Kelty, an amicable scire facias was entered and judgment confessed for $5526.78. A levari facias issued on each of the above judgments, under which the real estate in question was sold and the fund in court raised.
Other liens were entered against Kelty and bound this property, viz: James Newlin’s mechanic’s lien, on the 19th Dec., 1837, for $109.93; Eli Fredd’s judgment, on the 13th March, 1838; Nathan Baker’s judgment, Sept. 19th, 1839 ; Bank of Chester Co’unty, judgment, Feb. 17th, 1840; Jos. S. Lovering & Co’s, mortgage, Aug. 13th, 1841; Thomas Bond’s mortgage, Oct. 8th, 1841; Thomas Strode’s judgment, May 6th, 1842; Norwich Bank’s judgment (on bond accompanying mortgage) May 9th, 1842; Thos. Strode’s judgment, May 9th, 1842. These creditors claimed the proceeds in the court below, contending that the mortgages were extinguished by the sheriff’s sale in June 1829. The appellants, to repel this, called a number of witnesses to show, by conversations and declarations of the creditors and by parol proof, that these creditors had notice of the existence of the mortgages at or before the times their debts' were contracted and liens obtained, and that the Chester county Bank procured the sheriff’s sale in 1829, and received the money as the party interested.
The court below (Bell President) was of opinion that since the cases of Willard v. Morris (2 Rawle 56) and Corporation v. Wallace (3 Rawle 109), it was not to‘be questioned that by the law of Pennsylvania a judicial sale’ under a judgment against the owner of land made before the Act of 6th April, 1830, discharged the lien of a prior mortgage for the payment of money and turned the mortgagee round on the fund, which by operation of law was substituted for the land, whatever was the price brought or was done with the proceeds. The mortgagee was bound to look to the fund in the sheriffs hands, and if he failed to do so, could not have recourse to the land. But such purchaser might agree to buy the land subject to the mortgage, and if he did so, equity would hold him to his bargain; and he would take it cumonere, according to Fickes v. Ersick (2 Rawle 166); Shultze v. Diehl (2 P. R. 273); Stackpole v. Glassford (16 Serg. & Rawle 163); Barnet v. Washebaugh (Ib. 414); Twelves v. Williams (3 Whart. 485): Roberts v. Williams (5 Ib. 170); Berger v. Hiester (6 Ib. 210). According to these cases, one who with a full knowledge of a prior encumbrance proclaimed by the sheriff, agrees by parol to purchase subject to it, makes his bid with an eye to it and purchases accordingly, is bound by his agreement and holds the land subject to the burden. It was not necessary it should appear by the levy, conditions of sale and sheriffs deed; it was sufficient if it appeared by the conditions of sale and by the clear evidence of the purchaser and others, that he bought under the condition that his bids were made with reference to a mortgage for $5000; and with his final bid of $1795 he, as well as the bystanders, all considered he was to give $6795 for the property, and that he had paid the interest till within two or three- years before the last sale of the property. That as to subsequent encumbrancers the question was, whether they had due notice of the existence of the mortgages prior to the origin of their respective claims, and if such notice was given, their liens were subservient. The court then .went into the question whether these subsequent mortgagees and judgment creditors had such notice. The conditions of sale were not constructive notice: for one looking into Kelty’s title would be led to the sheriff’s sale, which, for aught that appeared on record, gave him a title clear of all prior encumbrances: for the conditions of sale are not returned with the record, and make no part of it, and he was not bound to inquire further. These mortgages, therefore, stood as unrecorded mortgages, giving alien against the land in the hands 'of the' purchaser and against all others with notice. As then there was no constructive notice, the court inquired whether there was evidence of actual notice to the posterior encumbrancers of the fact that Kelty held subject to Mode’s and Johnson’s mortgages. After examining the testimony of the witnesses, whose depositions' had been taken, the court thought there was not notice prior' to the origin of their claims, and decreed that the mortgages of Mode and Johnson should not be paid, but the money should be distributed among the subsequent creditors.
Syllabus and headnotes are prepared by the reporter or publisher, not the court, and are not part of the opinion.
