Gracey v. Myers's Adm'x

JOHNSON, Judge delivered the opinion of the Court: The main question presented by the record, is, whether the sixty-eight acres, or the one hundred and ten acres, are primarily liable for the debt secured by the deed of trust executed by Joseph Myers and wife to N. S. White, trustee, which trust included both tracts. As the statement of the case shows, Myers had purchased in 1856 the tract of sixty-eight acres of H. W. Castleman ; and at that time it was conveyed to him. In 1866 said Castleman conveyed to said Joseph Myers the one hundred and ten acres, and for the payment of the purchase-money, amounting to $7,000.00, Myers executed a deed of trust on both tracts ot sixty-eight, and one hundred and ten acres, which trust was promptly recorded. In March, 1866, Joseph Myers and wife conveyed to John Myers the one hundred and ten acres; and on the 21st — 202 — day of May, 1868, John Myers and wife, conveyed the said sixty-eight acres to John and William Gracey; and after 1871, H. W. Castleman assigned to the Graceys three of the $1,000.00 bonds secured to be paid in the said deed of trust to N. S. White, trustee. In Gill v. Lyon et al., 1 Johns. Ch. 447, it was held: “ that a purchase of. a 'part of lands mortgaged from the mortgagor, is not bound to contribute ratably with a purchaser of the equity of redemption under a judgment subsequently obtained, towards the discharge of the mortgage; unless the residue of the mortgaged premises prove insufficient to extinguish the debt.” See also Clover v. Dickinson et al., 5 Johns. Ch. 235; Nailer v. Stanley. 10 Serg. & R. 450. In Conrad v. Harrison et al., 3 Leigh 532 it was held, that where “ S. mortgaged a parcel of three hundred and sixty acres of land to B. to secure a debt due to him ; then S. mortgages all of the same land except seventy-five acres to H. to secure a debt due to him, these seventy-five acres being excepted and reserved out of this secured mortgage, because the mortgagor was then in treaty with a third person for the sale thereof to him, which treaty was afterwards broken off, and then S. mortgages the whole parcel of three hundred and sixty acres to C. to secure a debt due to him, that H., the second mortgagee, has a right against S. the mortgagor, B., the first mortgagee, and C., the third mortgagee, to insist that the debt due to B. shall be satisfied out of the parcel of seventy-five acres, reserved out of the second mortgage to H. so as to lease that part of the subject mortgaged to H. untouched, and applicable to the satisfaction of the debt due him ; and that C., the third mortgagor, has no right to call on H., the second mortgagee, to contribute pro rata to the satisfaction of the debt due to B., the first mortgagee.” See McCluny v. Bierne, 10 Leigh 394. In Henkle’s ex’r. &c. v. Allstadt et al, 4 Gratt. 284, it was held, that where a tract of land is subject to a mortgage, and the owner of the land sells a part thereof, and — 203 — conveys it with general warranty, and then sells the remainder of the tract, “thepart last sold is primarily liable for the satisfaction of the mortgage debt." See also Jones &c. v. Myrick’s ex’rs, 8 Gratt. 179. In Jones et al v. Phelan & Collander, 20 Gratt. 229, the doctrine of Conrad v. Harrison was approved and applied to a deed of trust on personal property. In that case the statement in the syllabus is : “G. is tenant of a house and lot leased of S.; and he gives a deed of trust on a part of the personal property in the house to secure a debt to P., which is released. He afterwards gives another deed of trust on all the property in the house to secure a debt to J. S. distrainee for a year’s rent upon the property embraced in the deed to secure P. By consent of all the parties all the property conveyed in the deeds is sold, and after paying the rent there is a balance left. Held, 1st. S. is entitled to be paid his year’s rent out of the proceeds of the whole property if necessary; but the proceeds of the property not embraced in P.’s deed is to be applied first to pay S. 2d. After S. is satisfied, P. is entitled to have the balance of the proceeds of the property embraced in his deed applied to pay pro tanto his debt.” Applying the foregoing principles, which are settled law, to the case before us, a conclusion is easily reached. Suppose this was a case, in which Castleman, the vendor of Joseph Myers, was seeking to enforce his lien under the deed of trust to White, would he not be compelled first to exhaust the sixty-eight acres, if Myers had not conveyed it? Clearly he would. The Graceys bought the tract of sixty-eight acres, and it was conveyed to them, with full notice of the trust-deed long subsequent to the conveyance of the one hundred and ten acres by their vendor to John Myers. Then clearly under the authorities we have cited, and according to the clearest principles of equity, Castleman would have been compelled to exhaust first under his trust-deed the" tract of sixty-eight acres, becaus.e they had been last aliened. Now — 204 — the Graceys who where the assignees of Castleman, as to $3,000.00 of said debt so secured in said trust-deed, with notice of said trust, can occupy no better position than their assignor; and if Castleman could not primarily resoi’t to the one hundred and ten acres for the payment of the three $1,000.00 bonds secured in said trust, the assignees could not do so. The court therefore erred in holding that the said tract of one hundred and ten acres of land conveyed to John Myers by Joseph Myers was primarily liable to the payment of the said three $ 1,000.00 bonds. The tract of sixty eight acres is primarily liable for the payment of said debt as claimed in the petition of John Myers, as is clearly shown in the commissioner’s reports and proceedingsin the cause; and the said tract of one hundred and ten acres can only be held liable for any part thereof, in the event the tract of sixty-eight acres is insufficient to pay the balance of the debt secured in said trust to White. It can under the circumstances of this case make no difference that the debt, secured on the one hundred and ten acres and the sixty-eight acres, was tor the purchase-money of the one hundred and ten acres. It is not pretended Syiiabus 2. that there was any lien retained for the purchase-money in the deed from Castleman to Joseph Myers for the said one hundred and ten acres; and the debt secured oh both tracts in the deed of trust is like any other debt so secured. It is objected by counsel for appellee Riddle, that in the consideration of the above question the depositions of H. W. Castleman could not be considered, as it is claimed that they were rejected by the court. One exception to the commissioner’s report, with which said depositions are returned, is “that the deposition of H. W. Castleman was taken without due and proper notice to the defendants, and if such was not the case, the deposition is irrelevant, and is not responsive to the requirements of the order of reference or re-commitment. There were five exceptions to said report by defendants — 205 — of which this was one. The order of re-commitment contains this direction to the commissioner: to reportw “all matters which he may deem pertinent, and that may be required by any of the parties to the said cause.” There were two depositions of the said Castleman taken, one on the 5th of March, 1874, and the other on the 20th of March, 1874. Only two other depositions were taken before the commissioner under said order. The decree founded on this report, recites, that “this cause came on again to be heard this 18th day of November, 1875, on the papers formerly read, and on the report of commissioner, &c.. * * and the exceptions thereto by the plaintiffs and defendants, and on the depositions of witnesses, and was argued by counsel. On consideration whereof the court doth overrule the exceptions of the plaintiffs, and doth sustain the exceptions of the defendants to the report herein indicated, and proceeding to make such decree on the various questions presented in the record of the said causeas seems just and proper, doth adjudge” &c. I think that the depositions of Castleman were relevant. There is no evidence that the court acted upon the exception to the deposition of Castleman ; but the inference from the decree reciting that the cause was heard -“upon the depositions of witnesses” is that it was heard upon the depositions of all the witnesses. There was no exception to the depositions, but to the deposition, and which one was excepted to is not stated. We think that the court in sustaining the exceptions generally without stating the grounds, and then proceeding to hear the cause “upon the depositions of witnesses” and pronouncing a decree upon the merits of the case, virtually overruled the exception to the Castleman deposition, and as the notice did not show which one of the depositions was excepted to, the exception should have been overruled. 1 think however the question we have been considering is fairly presented by the record outside of the Castleman depositions. — 206 — The next question presented is: Was John Myers entitled to be substituted to the rights of Castleman, or his assignee, to the lien against the sixty-eight acres as to the $105.81 over paid purchase-money ? The general rule is, that where one is compelled to pay money, which another ought to pay, he is entitled to be substituted to the rights of the creditor against the debtor, whose duty it was to have paid it. But that principle can have no application here, because it is shown in the case that John Myers paid a large sum of money directly to his father, instead of paying it to the discharge of the liens against the land he had purchased of him, and because he over paid the purchase-money due his father by mistake, it may be to the amount of $105.81, is no reason why he should be entitled to be subrogated to the rights of Castleman, it may be .to the injury of other parties. The decree was right in requiring the estate of his father to reimburse him, but farther than that he had no right to ask relief against his own carelessness. Whether the hearing of the cause upon the petition of H. R. Riddle was error, or not, is immaterial to the appellant, John Myers. In the view of the case we have taken the result to the appellant would have been'the same, if the decree had required the $5,000.00 and interest to have been paid to the personal representative of Joseph Myers. It is assigned as error by appellees, William and John Gracey, that the court overruled their exception to the report of commissioner Kearsley, which exception was, “ that the report had not remained in the commissioner’s office ten days after it was completed.” Whether it was error for the court to overrule this exception or not, we will not decide in this case, because the question does not fairly arise. It appears from the record, that a deposition was taken before the commissioner on the 20th of March, 1874, and the report itself is dated, “ Commissioner’s office, Charlestown, March 21,1874 therefore it is evident that the recital in the decree of the 18th of — 207 — November, 1875, made more than eighteen months after the report was completed, that the case was beard on papers formerly read, &e., and “ on the report of commissioner, George W. T. Kearsley, filed on the 15th day of March, 1874, is a misrecital and clerical error. Therefore it does not appear in the record when the report was in fact filed. For the foregoing reasons, the decree of the 10th November, 1873, and the decree of the 15th of November, 1875, and the decree of the 24th day of April, 1877, in so far, and so far only, as said decrees or either of them settle and declare, that the one hundred and ten acres of land conveyed by Joseph Meyers and wife to the appellant, John Myers, is primarily liable for any balance of the debt yet unpaid secured by the deed of trust to N. S. White, trustee, executed by Joseph Myers and wife to secure a debt of $7,000.00 to H. W. Castleman, and settles and declares, that the said sixty-eight acres is not primarily liable to the payment of any such unpaid balance, and was not liable therefor,- unless the said one hundred and ten acres should prove insufficient to pay it, are reversed, set aside and annulled, and the appellees other thap the personal representatives of Joseph Gracey deceased must pay to the appellant, John Myers, his costs about his appeal in this Court expended; and this cause is remanded to the circuit court of Jefferson county, with instructions to further proceed therein according to the principles settled in this opinion, and further according to the rules governing courts of equity. Judges HayMOND and Moore Concurred. Decree Reversed. Cause Remanded.