Moore v. Harrisburg Bank

The opinion of the Court was delivered by Kennedy, J. Being of opinion that the court below erred in their direction to the jury on the question of merger, raised in this case; and that a correction thereof, in this particular, will dispose of and determine the whole matter in controversy, between the parties, in favor of the plaintiffs in error, John and William Moore, it is, therefore, rendered unnecessary to notice or to pass upon the other matters assigned for error. The agreement for the purchase of the lands in question, by John Moore, of John D. Mahon, appears to have been entered into on the 18th day of June A. D. 1831. John D. Mahon, by the agreement, which was executed under the hands and seals of the parties, bound himself, in the first part of it, “ to coiivey by good and •sufficient conveyance in law, unto the said John Moore and his heirs, free from all incumbrances whatever (except what is thereafter specified) all those tracts or parcels of land as follows:” then describing them.) And again, in a subsequent part thereof, it is provided, that “ the said several tracts of land are to be conveyed by the said John D. Mahon to the said John Moore and his heirs, 'by deed, with general warranty and free from all incumbrances, •except the mortgage on the mill or Laird tract, which was given by the said John D. Mahon to Griffith Evans, of Philadelphia, to secure the payment of ten thousand dollars. This mortgage is to •remain on said land, and to be paid off as herein set forth.” This is the only incumbrance that is mentioned, as being excepted, in the agreement, and consequently is the same that is referred to, in the first part of the agreement, containing the covenant on the part of Mr Mahon, to convey the lands clear of incumbrances. By the agreement, Mr Moore binds himself to pay off the mortgage to Mr Evans of ten thousand dollars, (though, in fact, two mortgages, of five thousand dollars each, were intended to be embraced by the mention of one, of ten thousand dollars,) within certain periods •therein set forth. And Mr Mahon, again, covenants to reimburse :Mr Moore within specified periods after the latter shall have paid the mortgage, in the way therein agreed on. But notwithstanding all this, the parties expressly agreed further, that “it is to be understood that the said Moore is not bound to make any of the pay — 147 — ments to Griffith Evans, until Mr. Mahon shall have complied with his covenants in the agreement set out.” It also appears from the evidence of Judge Line, who was employed by the parties to draw and prepare for execution, the several deeds of conveyance and mortgage mentioned in the agreement, so that the agreement might be carried into effect, that after having done so, and each party had signed and sealed such as were to be executed by him; and he had taken the acknowledgments of the same, Mr Moore objected to taking or accepting the deed of conveyance from Mr Mahon, on account of liens against the property, conveyed by it to a large amount, that he was not aware of. That after some altercation, they finally agreed to go to Mr Caruthers’ office, with a view, as it seemed, by means of his advice, to try and adjust the difficulty, and accordingly went. The mortgage to Mr Evans was there spoken of, and Mr Caruthers advised that this mortgage should be paid by Mr Moore, and an assignment thereupon taken of it to himself, that he might by means thereof make himself secure. This proposition, as Judge Line thought, came first from Mr Ma-hon himself, and was agreed to by Mr Moore; and they, in order to make some preparations for the accomplishment of it, agreed to set off the next day for Philadelphia, where Mr Evans resided, to see him on the subject. The evidence of Judge Line has been objected to by the counsel on behalf of the bank or the defendants, because, as they contend, it goes to alter and change materially the effect of the written agreement between the parties, as also the deeds executed by them to each other, in pursuance of it. The rule, however, which prohibits parol evidence from being admitted and taken into consideration, when its tendency is to alter, vary,contradict, add to, or impair, a deed or written instrument, is not applicable here: because the utmost the counsel for the defendants in error can claim, is, that from the written agreement and deeds executed in fulfilment thereof, when taken together with the subsequent payment made to Mr Evans, of the amount of the mortgage by Mr Moore, notwithstanding it was thereupon assigned to the latter by the former, that a presumption of law arose, that it was paid by Mr Moore in discharge of an obligation imposed upon him by his written agreement, and that the mortgage thereby became extinguished. But. this being a presumption merely, may, in most cases, I apprehend, be rebutted by other evidence, either written or parol. It may be, however, and it would seem as if there are cases in which it was held, that the law produced a merger even in opposition to the intention of the parties as it appeared upon the face of the deed or written instrument itself; as where a lease for years and a remainder for life were limited to the same person by the deed, the estate for years was held to merge in the estate for life. 1 Inst. 54 b. Uthen v. Godfrey and others in note to Dyer 309; Clark v. Sir John Sydenham, Yelv. 85. But it has been said and contended since, that there is no rule or case in which a merger — 148 — shall be permitted to take place when the several estates may stand; and that merger only takes place when it is necessary to preserve the intention of the parties. Stevens v. Bret ridge, Ld Raym. 36; 1 Lev. 36. And, though this may not be altogether true or strictly correct, yet it will be found that there are many instances in which, with a view to carry the intention of the parties into effect, the law of merger has been held inapplicable; and where, as Sir William Grant, master of the rolls, in Forbes v. Moffatt, 18 Ves. 390, says, “A.court of equity is not guided upon this subject by the rules of law. It will sometimes hold a charge extinguished, where it would subsist at law; and sometimes preserve it, where, at law, it would be merged. It is also very clear, that a person becoming entitled to an estate, subject to a charge for his own benefit, may, if he chooses, at once take the estate and keep up the charge. The question, in such case, is upon the intention, actual or presumed, of the person in whom the estates are united. In most'instances it is, with reference to the party himself, of no sort of use to have a charge on his own estate; and, when that is the case, it will be held to sink, unless something shall have been done by him to keep it on foot.” And, in conformity to this doctrine, he held, in that case, that a mortgage was not merged or extinguished by becoming united in the same person with the fee; because it was to be presumed that such was the intention of the party from the greater advantage being against merger in favour of the personal representatives; it not appearing from the acts or declarations of the party, what his actual intention was in regard to it. But in the case under consideration there is no room nor occasion to presume what the intention of Mr Moore was in paying to Mr Evans the amount of his mortgage, and taking an assignment of it to himself, after having become the owner of the fee; because it was expressly avowed arid agreed that it should not sink, but be kept on foot for the purpose of indemnifying him against subsequent incumbrances existing agaiust the estate, when he accepted of the deed conveying to him the fee in it. Hence this case does not rest on mere presumption, which would doubtless be also sufficient to prevent a merger of the mortgage, but is much stronger against it than the case of Forbes and Maffett. And Sir William Grant also further says, in that case, that “ upon looking into all the cases in which charges have been held to merge, I find nothing which shows that it was not perfectly indifferent to the party in whom the interests had united, whether the charge should or should not subsist; and in that case I have already said it sinks.” But here it is perfectly obvious that it made all the difference imaginable to Mr Moore, whether the mortgage was kept on foot by him or not, as long as the incumbrances created subsequently to it on the estate existed; and held to them by those who are now seeking to take the estate from him, in order to have their claims under those imcumbrances ■paid; so that if keeping the mortgage on foot will protect or save — 149 — him, it shows how important it was for him to do so. In the case of Helmbold v. Man, 4 Whart. 410, this court recognised the principles and doctrine here mentioned in its fullest extent, and in deciding that case carried them much further than it is necessary to do here, in order to decide against a merger. Parol evidence to prove the intention against merger was also admitted to a greater extent there than here. It has, however, been argued that Mr Moore, under his written agreement with Mr Mahon, for the purchase of the estate, was bound to pay off the mortgage of Mr Evans; but it is clear also from that agreement that he was not bound to do so until Mr Mahon should first discharge and relieve the estate from all the other incumbrances upon it. Mr Mahon’s covenant, in this behalf, was not that he would make a deed containing a covenant on his part to discharge the estate from the incumbrances resting upon it, but that he would convey the estate by a deed with general warranty, and fiee from all incumbrances; that is, as I take it, freed and discharged from all incumbrances, and not' with general warranty and covenant that is free from all incumbrances, with the exception of the mortgage to Mr Evans. If it had not been the understanding of the parties in making their agreement that the estate should be freed and discharged from all incumbrances at the time when it should be conveyed, the phrase “and free from all incumbrances” was not, according to its ordinary acceptation, at all suited to express the meaning of the parties; but, according to its usual acceptation, was well adapted to convey the idea that the estate was not only to be conveyed with a covenant of general warranty on the part of Mr Mahon, but that it should, at the time of his doing so, be free from all incumbrances whatever, excepting the mortgage of Mr Evans. Had it been the understanding of the parties that the incumbrances were not to be paid off and the estate released from them before it should be conveyed, but to allow a future day for that purpose, upon the faith merely of a covenant on the part of the grantor to do so, the time would have been mentioned and fixed. This, however, not having been done, it is clear that the import of the original agreement is, that the estate was to be conveyed freed and acquitted from all incumbrances, except the Evans mortgage. But Mr Mahon afterwards not being able to do this, Mr Moore refused to accept of the deed of conveyance from him; and then the verbal agreement, testified to by Judge Line, was made by the parties before Mr Moore would accept of the deed by which he was, upon paying the mortgagc to Mr Evans, to take an assignment of it and to have the benefit of it for the purpose of protecting him in the estate against the other incumbrances, which are the same, that it is now claimed by the defendants in error, the estate ought to be made liable for without regard to the mortgage or the sale of the estate which was effected by a judicial proceeding upon it. Mr Moore and Mr Mahon had a right to — 150 — change and alter the original agreement, in this respect, as they pleased. The lien creditors of Mr Mahon were not parties to it; and would not be said to have any interest in it. It was not competent for Mr Moore and Mr Mahon to make any agreement that would prejudice them in their rights; nor could they claim to control Mr Moore and Mr Mahon in changing their agreement, or in releasing each other from obligations created by it. They might have rescinded it in tolo if they had pleased; and the creditors of Mr Mahon could not have objected thereto; nor would they have any cause to complain of it now. But it has been said, that from the face of the written agreement and the circumstance of Mr Moore’s having placed the deed, conveying the estate in fee to him, upon record, the creditors of Mr Mahon were justified in drawing the conclusion which, as they contend, the law made therein, that the Evans mortgage was paid and extinguished when taken up by Mr Moore; and having thus been induced to believe that it was so, they, therefore, became entitled to the benefit of a merger of it. It may be that a person who has become a creditor, or has parted with his rights upon the faith of a legal presumption of the merger of a mortgage, fairly raised by the acts of the party in whom the right to the mortgage and the estate in fee has become united, all of which is placed upon record, shall be entitled to have the mortgage considered merged as respects him, and that the holder of it shall not he permitted to gainsay it; yet it is clear here, that the persons claiming to have the benefit of a merger of the mortgage parted with nothing upon the faith of any such legal presumption. They had been creditors of Mr Mahon and obtained their liens upon the estate before; their condition was not made worse than before, by keeping the mortgage alive. Mr Moore having become the owner of the estate in fee, with the mortgage upon it as a charge, did not use their money or means in obtaining an assignment of the mortgage; he procured it with his own means, and not with theirs, nor yet with those of their debtor, Mr Mahon. In short, in no way whatever did either they or Mr Mahon contribute to the payment of the consideration upon which Mr Moore obtained an assignment of the mortgage from Mr Evans, and have therefore no colour, even of pretence, in equity, for claiming that Mr Moore should not have the same benefit and advantage from it that Mr Evans would have been enti.tled to, had he not parted with it to Mr Moore. But this is not all; they had no ground whatever for making such presumption of the mortgage being merged, as is alleged. Because they, being themselves the holders of the incumbrances on the estate, must have known, if they looked at the original agreement, that by it Mr. Mahon was bound to discharge them before Mr Moore could be required to pay Mr Evans’ mortgage. But knowing that their claims, under the incumbrances, were not paid, they consequently, so far as the written agreement went, had no — 151 — right to presume that it was in pursuance of it, that Mr Moore had paid and taken an assignment of the mortgage; because, until the incumbrances were satisfied and the estate freed from them, Mr Moore was not bound to pay the mortgage. If they, then, have lost any thing by lying by, because they believed the mortgage was extinguished, that otherwise they would have gained, it is chargeable entirely to their own mistake, or want of vigilance in not inquiring into the matter, so as to ascertain correctly the reason and object of Mr Moore’s taking an assignment of the mortgage, when he paid it to Mr Evans. But it is also said that the sale, made by the sheriff, of the estate, under the judgment obtained upon the mortgage, in the name of Griffith Evans, after his assignment of it to Mr Moore, is so irregular and repugnant to truth, as to be void and of no effect whatever. It is contended that the writ of scire facias, commencing the suit upon the mortgage, instead of being sued out in the name of Griffith Evans, ought to have been sued out in the name of John Moore, he having become previously the assignee of it; that then the irregular and anomalous character of the proceeding would have appeared, and been such as that the court would not have entertained it, because it would have appeared that the same person was plaintiff and defendant in the suit. And if this would have been its fate,'had the proceeding been commenced and carried on without disguise, it ought not to avail the party himself any thing for having thus imposed upon the court. There is nothing in this objection. The writ of scire facias was well sued out in the name of the mortgagee; and it may be questionable, at least, whether it could have been sustained in the name of the assignee; because the claim in the action of scire facias is for money, and therefore a bare chose in action, and consequently not assignable at common law; and I am not aware that we have any statute expressly making it so. If it can be maintained at all, it must be by a constructive inference drawn from the act of 1705, proceeding for and directing the proceeding by scire facias upon a mortgage, when a year or more has run after it has become payable, for the purpose of obtaining payment of the mortgage-debt by a judicial sale of the estate granted by the mortgage. The scire facias being an action for the recovery of the debt, is altogether different from an action of ejectment founded upon a mortgage, which is brought for the recovery of the possession of the mortgaged premises, and rests entirely upon the right to the possession of the estate which is derived from the mortgage, and considered as transferable at common law. Upon this ground, it has been held that the assignee of a mortgage may maintain ejectment in his own name; but I am not aware that it has ever been held that he may maintain a scire facias in his own name. In the next place it is proper to observe, that a scire facias upon a mortgage is not an action or proceeding in personam, but in — 152 — rem. And notwithstanding the scire facias, sued out in the name of Griffith Evan's, was served upon Mr Moore, it was only because the sheriff found he was the terre-tenant of the estate in the mortgage, that he served the writ upon him. It was the estate, and the rights of those who had claims or liens upon the estate, that were to be affected by the proceeding, and not the personal rights of any oiie. Mr Moore was willing, though the owner of the estate in fee, to give it up to be disposed of by the proceeding upon his mortgage; and if he were willing to do so, upon What principle of equity or justice could any other object to it? I confess I can discover none. The proceeding by scire facias upon a mortgage, in this state, may be regarded as a substitute for a bill of foreclosure in a court of chancery. Having no court of this kind, the legislature adopted and authorised the scire facias to be sued out of our cpmmon law courts, and the proceedings directed to be had thereon, as an expedient for the bill of foreclosure. This being the purpose which the legislature intended, no doubt, to subserve by such writ, it would seem to be right, in order to attain the end, that whenever the party would be entitled to have the aid of a court of chancery to render a mortgage, of which he had become the holder, effectual, and to give him the full benefit of it when he desires it, though it be against his own estate, to permit him to maintain his action by suing out and prosecuting his writ of scire facias. It can not be pretended that John Moore would not have been entitled to the aid of a court of chancery, if we had had such, when he caused the writ' of scire facias to be sued out and prosecuted upon the mortgage assigned to him by Mr Evans; or, if it should, the cases referred to above show conclusively that he would, for the purpose of having his mortgage made available to him, by relieving his estate from the subsequent charges upon it, so far as it might prove insufficient to pay them, after satisfying the amount of his mortgage first. We therefore think that the proceeding by scire facias upon the mortgage in the name of Mr Evans, and the sale of the estate which followed in pursuance thereof, were valid, and discharged the estate from all liens created subsequently to the recording of the mortgage. Judgment reversed, and a venire de novo awarded.