Turner ex rel. Hartman v. Flenniken

Opinion by Mb,. Justice Williams, The important facts in this case are not in controversy. Three brothers, viz, Elias A., James D. and William F. Flenniken became the owners by inheritance, at some time prior to April, 1863, of a tract of land--containing three hundred and sixty-six acres. They mortgaged this tract to Rachel H. Turner on the tenth day of April, 1863, for the payment of the sum of fourteen hundred dollars with interest, and the mortgage [474] was duly recorded. In 1864 they sold forty-five acres off the land to B. F. Wright, and Mrs. Turner released the lot so sold from the lien of the mortgage. They next sold a lot containing ninety-one acres and twenty-seven perches to Richard Moffett, who went into possession in 1868. In 1869 he paid the purchase money, which was five thousand four hundred and twenty-seven dollars, and received from the three brothers a deed of general warranty for the land. He had no actual knowledge of the existence of the mortgage and for that reason did not demand a release from its lien when he paid the purchase money to the Flennikens. He continued in possession till 1877 when he sold to Sharpneck, the appellant, for six thousand dollars. Sharpneck paid the purchase money and took his deed in May, 1877, recorded the deed, and went at once into possession. He too was ignorant of the existence of' the mortgage. In April, 1877, Hartman, who was the father-in-law of William F. Flenniken, took an assignment of the mortgage, upon which there appeared to be due the sum of six hundred and nine dollars. During the following month he released the lien of the mortgage from one hundred thirty-nine-acres and thirty perches of the tract owned by and in possession of James D. Flenniken. In August of the same year he-released the balance of the tract, containing ninety-three acres, which his son-in-law, William F. Flenniken, had sold to John G-rago. The portions of the land so released by Hartman were worth many times the amount remaining due upon the mortgage, and, when they were made, no part of the mortgaged premises remained unreleased except the lot sold to Moffett in-1868. Upon this state of facts the scire facias in this case was issued and served on Sharpneck as terre tenant. He defended upon two grounds: first, that the mortgage having been given in 1863 was, in 1891, when the writ of scire facias was issued, presumed to be paid; and, second, that the releases by Hartman of the land which was hable to him in case he was compelled to pay the mortgage had deprived him of the power to-reimburse himself, and were for that reason, on equitable principles, a release of his land from liability. The first line of defence was met by the testimony of witnesses showing what payments had in fact been made on the [475] mortgage and how much remained due upon it. This was a competent reply to the presumption of payment, and, if the evidence was sufficient to satisfy the jury that a balance remained due, it effectually disposed of this branch of the defence. The second line of defence was objected to as irrelevant and incompetent. The objection was sustained and the evidence offered in support of it was excluded. Tbis ruling, which is the subject of the third, fourth and fifth assignments of error, raises the important question in this case. The equitable doctrine asserted by the appellant seems to have been recognized to some extent at a very early day in this state. It was distinctly formulated and asserted in Nailer et al. v. Stanley, 10 S. & R. 450. In that case a judgment was a lien upon three or more lots of land. One of these was then sold to A, the value of the remaining tracts being more than enough to pay the judgment. A second tract was then sold to B. The judgment creditor levied on the tract sold to B, who was compelled to pay the judgment. He then sought' contribution from A, but it was held that he had no equitable right to resort to A, or his lot, as his title was acquired subsequently to that of A. This has been followed in an unbroken line of cases extending over more than seventy years. In Mevey’s Appeal, 4 Pa. 80, decided in 1846, the rule was extended to mortgages, and it was held that the court “ may and will so direct the sheriff to-sell, and in such order, as will produce the most money and at the same time protect the rights and equities of the terre tenants.” The consequences to the mortgagee of disabling himself for protecting the equities of terre tenants were first declared in Paxton v. Harrier, and Henniger, terre tenant, 11 Pa. 312. In that case a tract of land was covered by a mortgage. The first piece sold was that bought by Henniger, who paid Harrier, the mortgagor, the purchase money. The balance was sold to several purchasers, in separate parcels, each of whom paid a part of the mortgage debt proportioned to the number of acres-bought by him, and received a release of his land from the lien of the mortgage. The mortgagee then issued a scire facias upon the mortgage, and served Henniger as terre tenant, and sought to recover the balance of the mortgage debt, which bore476 the same relation to the whole debt as the quantity of land in Henniger’s lot bore to the whole tract covered by the mortgage. Henniger set up as a defence the release of the lots, subsequently sold, by the mortgagee, and the fact that his remedy over against them had thus been taken away by the act of the mortgagee. This was held to be a good defence upon the scire facias because the land released was primarily liable for the mortgage money as between its owners and the prior vendee. This case was followed by Martin’s Appeal, 97 Pa. 85, in which the rule was stated to be that pieces of land, subject to a common incumbrance, when sold successively by the owner, are liable for the incumbrance, in the inverse order of alienation. Consequently if the holder of the incumbrance releases the pieces last sold, this will, if the pieces released are of sufficient value to pay the debt, operate to discharge the lien of the incumbrance on the parts previously sold. This was so far qualified in Schrack v. Shriner et al., 100 Pa. 451, as to make the knowledge of the holder of the mortgage an element to be considered in the application of the equitable doctrine. If he was without any knowledge 'of a previous sale of a part of the premises, and acted in good faith in the making of a release for another part of the land bound by the mortgage, then the rule ■of Paxton v. Harrier would not apply ; but if he knew of the previous sale or of facts that fairly put him upon notice, then the subsequent release of the remainder, if of sufficient value to pay the debt, would operate as a release of tbe lot first sold. This case was commented on and followed in Milligan’s Appeal, 104 Pa. 503. The distinction between junior incumbrancers and successive purchasers is considered in McIlvaine v. The Mutual Assurance Company, 93 Pa. 30. A junior incumbrancer must give notice ■of the position of his lien to the mortgagee if he would affect him with notice of his situation. Knowledge in fact of the position of a purchaser of land bound by the mortgage is enough, no matter how that knowledge is acquired. If it was clear upon the evidence that Hartman had knowledge of the possession and claim of Moffett and Sharpneck when he made the releases to the holders of the balance of the mortgaged premises, then the court below should have negatived [477] the plaintiff’s first point, and given a binding instruction in favor of the defendant. If this question was involved in doubt it should have been submitted to the jury with instructions to find for the defendant if they found Hartman knew of the prior sale when he executed the subsequent releases. It is not necessary that he should have seen the deed or been informed of the exact date or terms of the sale. _ It is enough if he had knowledge of the fact that Moffett, or after him Sharpneck, was in possession claiming under a previous sale from the mortgagors. The judgment is reversed for the reasons now given and a. venire facias de novo awarded.