Moroney v. Copeland

[417] The opinion of the Court v/as delivered by Sergeant, J. The appellant in this case is the purchaser at the sheriff’s sale, and he excepts to the decision of the Court below on several points. The first exception is, that the Court erred in not allowiug the amount claimed by George Pepper. This amount, the appellant contends, ought to be considered as arrears of ground-rent, which constituted a lien on the land, and was therefore payable out of the proceeds of sale by execution, which were brought into Court to be distributed. The decision of this question'depends on the construction to be-given to the articles of agreement of the 10th o’f November, 1835, between Pepper of the one part, and Br.own and Copeland of the other part, which, in some respects, is rather of an unusual kind. By this agreement, Mr. Pepper, being the owner of a large lot of ground, contracts with Brown and Copeland, to sell and convey it to them for the sum of twenty-nine thousand seven hundred dollars, payable at the option of Brown and'Copeland, either in cash, or in ground-rents issuing out of the premises, to be reserved in deeds to be executed by Pepper in favour of purchasers to be procured by Brown and Copeland, and which when secured by brick buildings, are to be credited towards the purchase-money at a fixed rate. They then covenant to pay the said sum of twenty-nine thousand seven hundred dollars, with lawful interest from the 1st of October, 1836, or to secure it by ground-rents. The whole transaction is to be closed in four years; and so much of the purchase-money and interest as is not then secured by ground-rents, is to be paid off; and on payment, a deed is to be made by Pepper to Brown and. Copeland. - It is then covenanted by Brown and Copeland, that until such payment, .Pepper shall have all the remedies for the recovery of so much of the said annual sum of seventeen-hundred and eighty-two dollars (which is the amount of interest on the twenty-nine thousand seven hundred dollars,) as .is not then secured by ground-rents from sub-purchasers, which are usual in ground-rent deeds in Philadelphia, and as fully as if the covenants therein contained and clauses of re-entry were therein fully and verbatim repeated: it being expressly covenanted, that in case of failure in the.fulfilment of-the agreements and covenants therein contained,' Pepper should have the power to re-enter without legal proceedings and hold for his exclusive use and benefit, without right of claim by Brown and Copeland to or for any damage therefor." There seems to be in .these articles of agreement, an endeavour to make the annual sum payable on the purchase-money, and not secured by ground-rents, itself a ground-rent, at the same time that it is in its nature and by the terms of the agreement, interest on the purchase-money. These two descriptions of claim, however, are so essentially repugnant and incompatible, that it is impossible, in [418] legal contemplation, that they can co-exist in the same thing. To constitute a ground-rent, there’must be a conveyance of the land— rent being a redditus or return in consideration of the use of the land. But Mr. Pepper does not convey the land : he merely articles that he will convey it at certain future periods, either to persons named by Brown and Copeland, who will take the land on ground-rent; and erect buildings, or to Brown and Copeland themselves, on payment of the purchase-money, and interest. Till then, Pepper holds the land in his possession, and is to receive interest on the purchase-mopey. How can the idea of a ground-rent and right of entry, be conceived, where the vendor has not conveyed the land, nor even contracted to deliver the possession to the vendees, as is the case with all the residue of the land on which ground-rents have not been secured? Besides, if the interest is a lien, the purchase-money itself must be a lien: the last clause of the articles puts them on the same footing, giving a right of re-entry fpr a failure to perform the covenants and articles generally. This, however,'is not pretended by the appellant, and would be in contravention of the doctrine established in Auwerter v. Mathiot, (9 Serg. & Rawle, 397,) that on a sale by the sheriff of the equitable title of the vendee, the judgment creditors of the vendee are entitled to be paid out of the proceeds of sale, and not the vendor, to whom the purchase-money is due. The latter retains his lien, and may follow the land into the hands of the sheriff’s vendee. This doctrine applies equally to the principal and interest of the purchase-money, which are ihseparablé in their nature.. Interest is said to follow the principal, as the shadow does the substance. If the one is by these articles created a lien in the nature of á ground-rent, there is no reason why the other is not. The appellant cannot insist that the interest is a lien payable out of the proceeds, but the' principal is not. He must claim both as such, or neither. There may, possibly, be some purposes for which the latter clauses in this instrument would be serviceable to the. vendor, as against the equitable title of the vendees; but we concur with the Court below, that the sum in question must be considered as interest, and not in nature of a-ground-rent, constituting'such a lien on the premises as is payable out of the proceeds of the sheriff’s sale of the title of Copeland. The decree of the Court below in this respect must therefore be affirmed. 3, 4. The next question is as to the taxes, and the claim for iron pipes, filling, paving'and curbing foot-ways, which by act of assembly are liens on the property in which Brown and Copeland had an equitable estate at the time they were assessed and incurred. The interest-of Copeland was sold by execution on a judgment against him, and the money was brought into Court; and the question is, whether the whole of these claims are to be paid out of the purchase-money, or only half of them or none of them X The general rule is, that-with the exception of the first mortgage, (which is [419] exempted by act of assembly,) a judicial sale converts'the interest sold into money, and divests all liens on the land existing at. the time of sale. The lien here resembles a judgment against both: it bound the interest in the whole -land; the tenants in common being respectively entitled to an undivided moiety in the whole, neither having the whole of an undivided moiety. -On a sale of the interest of one tenant in common by execution on a judgment against him, the lien of a prior judgment against both is payable out of the proceeds : and the lien of these taxes being against the land of both jointly, is in the nature of a joint judgment, and must be paid out of the proceeds of sale. But as the effect of such payment is to take the interest of one to pay the whole, he, or those who represent him, have a right of contribution from the other co-tenant, to reimburse them the one-half thus paid. Copeland would lose one-half of this money now applied to the payment of Brown’s share of the taxes: and equity would seem' to require, that he should be subrogated to the liens of these claims on Brown’s interest,'so far as respects the half of them thus paid, according to the decision in Ramsey's Appeal, (2 Watts, 228.) The act of the 16th of June, 1836, sect. 86, gives the Court power in these cases of distribution of money raised by execution, “ to hear and determine the same according to law and equity.” It would be equitable in the present case to make such a decree ; and it is therefore ordered and decreed, that these claims be paid in full out of the proceeds of the sale brought into Court, but that Bro_wn.be subrogated for one-half thereof, to the liens of the claimants against Copeland’s interest in the land sold by the sheriff, in the same manner, and to the same extent, as they existed in these claimants at the time of the sheriff’s sale: provided that on the settlement of accounts between Copeland and Brown, the latter is found indebted to Copeland, and then for the amount so due, or such portion thereof as the liens may extend to.. Decree accordingly.