Ashmead & Langstroth v. McCarthur

The opinion of the court was delivered, by Thompson, C. J. The controversy in this case is between two separate mortgagees, and whether the understanding or contract between them that the junior mortgagee should buy the mortgaged property subject to the senior, was binding on them under the. circumstances developed after the sale. These circumstances were, that there existed a small judgment against the mortgagor, which was a prior lieri to the first mortgage on the property covered by both, the existence of which was unknown to both parties, and the effect of which was to discharge the. lien of both under the sale made by the junior mortgagees or the judgment-bond accompanying their mortgage. Not only was there an understanding, as the jury have found, that the junior mortgagees should buy subject to the prior mortgage, but notice to that effect was given at the sale, and was read, it is true, as a matter of accommodation to the party who was to read it for the senior mortgagee, by one of the counsel for the junior mortgagees, but when the sale proceeded, he bought in the property, at the sum of $250; which of itself shows that it was bought in under the agreement proved by the witnesses below. The learned judge submitted the question to the jury, whether, under the evidence, there was a contract or understanding between .these mortgagees about the purchase of the property, and instructed them that if they found 9that the defendants had so purchased the plaintiff was entitled to ^recover whatever was due on the mortgage.in his trust and charge for the building association. There was no error in this, as Zeigler’s’Appeal, 11 Casey 182, Loomis’s Appeal, 10 Harris 318, Crook’s v. Douglass, 6 P. F. Smith 53, and other cases, abundantly show. I will not analyze these cases to show what they plainly prove, namely: that there was no error in the instruction of the .learned judge. It will be remembered that the arrangement, referred to, affects no parties but those who ’made 'it, and it is not easy to see why they could not contract for a rule as between themselves, differing from a mere result of law. We do not in the least mean to impugn the rule that, as a general thing, judicial sales discharge all liens which are not protected from discharge by law or their own nature. [330] That principle was suspended to some extent in this case by contract between the only parties, as they supposed, that were interested in the matter. The lien dockets were open to both, and neither deceived the others as to the prior lien. The defendants got an advantage by the arrangement, and it would be unfair to the other party to allow them to keep it, and at the same time repudiate the arrangement under which they obtained it. This is enough for this case, and seeing no error in it the judgment is Affirmed.