Schrack v. Shriner

Mr. Justice Sterrett delivered the opinion of the Court November 20th 1882. The mortgage on which the scire- facias issued was given in March 1868, by C. H. Shriner to Samuel Schrack, the plaintiff, to secure $3,000 purchase money, payable in annual instalments of $500 each with interest. In December of that year Shriner, the mortgagor, conveyed an undivided moiety of the premises to Swenk, and in 1873 he conveyed the other moiety to Lincoln and Smith. In 1874 Smith conveyed his interest in the last mentioned moiety to Lincoln, and two years thereafter Lincoln purchased the other undivided moiety from Swenk, and thus he became sole owner of the mortgaged premises. In September 1873 Lincoln and Smith paid plaintiff $1,594.16, in consideration of which he released from the mortgage lien the undivided moiety which they a few months before had purchased from Shriner. When Lincoln purchased the first mentioned moiety from Swenk, April 1st 1876, he made inquiry as to how much of the mortgage debt was unpaid, and having-ascertained from plaintiff that it was $1,684.51, he indorsed that sum on the bond as the balance then due, and retained that amount out of the consideration money he had agreed to pay Swenk. Ho afterward paid plaintiff the interest thereon for two years in succession. The scire facias issued against Shriner, the mortgagor, with notice to Swenk and Lincoln as terre tenants, for the balance above mentioned with interest from April 1st 1878. It is not pretended that any part of it was ever paid. The defence, as fully disclosed in the special pleas of the terre tenants, is that by releasing the last moiety conveyed by the mortgagor, with notice of his first vendee’s equity, etc., the _ undivided half first conveyed, and owned successively by Swenk and Lincoln, was released from the lien of the mortgage. The equitable effect of the first sale made by the mortgagor, and payment of the purchase money to him, was to cast the burden of paying the mortgage debt, primarily, on the remaining moiety of the mortgaged premises, which, as is conceded, was at all times amply sufficient to pay the incumbrance. . In equity the moiety remaining in the hands of Shriner primarily owed [456] the mortgage. It was, so to speak, the principal debtor, while the other moiety occupied merely the relation of surety. The contention of the terre tenant is that by releasing the former, after being notified by the purchaser thereof, the plaintiff precluded himself from enforcing the lien against the latter. The mere execution of the release by the plaintiff, without more, would not have the effect of discharging the lien of his mortgage from the residue of the land. As is said in McIlvane v. Mutual Assurance Co., 12 Norris 30, the owner of a mortgage or other real estate security, in assigning or releasing the same, is dealing with his own property and lias a right to do as he pleases, provided he does not violate the maxim, sic utere tuo ut alieno non laedas. A mortgagee, for example, may release part or the whole of the mortgaged premises without inquiring whether a junior incumbrancer or vendee has intervened. It is the duty of the latter, if he intends to claim an equity through the prior incumbrance, to give the holder notice so that he may act with his own understandingly; and, if he fails to do so, the consequences of his neglect must be visited on himself. "While the law makes it the duty of every man to so deal with his own as not to injure another unnecessarily, it imposes on the latter a greater obligation to take care of his own property than it does on a stranger to take care of it for him. To hold otherwise would compel the senior incumbrancer to do for the holder of the junior security, or a subsequent vendee, what, in equity and good conscience he ought to do for himself. The doctrine is one of equity jurisprudence and not of positive law, and hence to affect the conscience of the former he should have actual and not merely constructive notice of the equity claimed by the latter. There was some conflict of testimony as to the character of the notice given by Swenk to the plaintiff, and whether it was given before or after the release. That, however, was a question for the jury, and it appears to have been fairly submitted to them. The testimony of the defendants tended to prove such notice to the plaintiff as should have stayed his hand from releasing. Swenk testified, among other things, that shortly after he had purchased and paid for the first undivided half, and before the release was executed, he saw the plaintiff and notified him of these facts, and at the same time told him that Shriner’s remaining half of the land was good for the mortgage debt; and the plaintiff thereupon admitted that it was. The only inference the plaintiff could reasonably draw from this was that Swenk expected him to look to that moiety of the land for the payment of his lien. While the plaintiff, in his testimony, did not deny the fact of notice, he was inclined to think it was given after and not before the release, but he eould not speak posi [457] tively. The learned judge, referring to the testimony as to when the notice was given, charged the jury that time, in that regard, was material. “ If the plaintiff had no notice until he had executed the release, he would not be prejudiced by it, but if he was warned and had notice before, he released at his peril, and absolved the land from the payment of the mortgage.” Speaking of the duty of a senior incumbrancer, he said in another part of his charge: “ He is not bound to search the record downward in order to ascertain whether there are junior incumbrancers or vendees of the debtor that may be injuriously affected by the release of a portion of his lien. But he dare not release when he has notice or warning that the rights of others may be impaired by his so doing.” Considering the charge as a whole and with reference to the facts of the case, as the jury were justified in finding them from the testimony, it is a fair and adequate presentation of the fiiw as recognized in several of our cases : Nailer v. Stanley, 10 S. & R. 450; Taylor’s Ex’rs v. Maris, 5 Rawle 51; Paxton v. Harrier, 1 Jones 312; Carpenter v. Koons, 8 Harris 222; Lowry v. McKinney, 18 P. F. Smith 294, and Amanda Martin’s Appeal, 1 Out. 85. In Taylor’s Exec’rs. v. Maris, supra, Mr. Justice Sergeant says the effect of a release by the mortgagee must depend on the circumstances of the case. If he “ has notice that by such an act he sacrifices the interest of a subsequent lien creditor, he will be bound to withhold his hand ; or, if he proceeds, will be responsible for the loss incurred. He may have this knowledge in the very creation of the mortgage. As if two or more severally seised of land join in a mortgage, they are all in geqnali jure entitled to contribution amongst themselves ; and if the mortgagee should release the land of one from the mortgage, leaving the whole sum to be levied of the remaining lands, he would be doing an act of injustice of which he was fully cognizant. So, when the mortgage was originally by one, and a purchaser of part from the mortgagor intervenes, and before releasing that fact is known to the mortgagee.” That portion of the charge complained of in the first specification, and the answer to plaintiff’s first point should be considered in connection with the general charge. Indeed, the. learned judge refers to it specifically for further answer to plaintiff’s first point. When thus viewed, there can be no serious objection to either. There is no error in the answer to plaintiff’s second point. The fact that Lincoln computed the amount due on the bond, and indorsed it thereon, and afterward paid the interest to plaintiff, in the absence of Swenk, and, so far as appears, without his consent, cannot defeat his equity; nor can the further fact, that Swenk did not demand the residue of the purchase [458] money from Lincoln for several years, have any such effect. If there had been an agreement between Lincoln and Swenk that the former should pay Schrack, it might have been otherwise; but there is no evidence from which the jury would have been justified in finding any such agreement. The equity of Swenk to have his undivided moiety relieved from the lien of the mortgage until the other half was first exhausted, was not personal to himself alone. There is nothing in the circumstances of the case to prevent his vendee from asserting that equity. If the lien of the mortgage was discharged, by reason of the release, before Lincoln purchased, it could not re-attach afterwards. The fourth assignment is not sustained. The plaintiff’s fourth point was also rightly refused. Judgment affirmed. Sharswood, C. J., dissented.