Blakemore v. Wise

Harrison, J., delivered the opinion of the court. This controversy involves the right to priority between certain judgment lien creditors of J. Walter Davies. A number of sebsequent liens are audited, but, in considering the question presented it is only necessary to mention the following judgments: (1) . One confessed and docketed February 1, 1894, in favor of the appellant, Harris O. Blakemore. (2) . One confessed and docketed July 27, 1894, in favor of the appellee, J. A. Patterson. (3) . One confessed and docketed August TO, 1894, in favor of the appellee, J. W. Wise. These judgments rest as liens upon the following real estate owned by the debtor Davies. (1) . A tract of 222 A. 2 E. 7 P. upon which there is a prior deed of trust securing unpaid purchase money supposed to amount to the value of the land. (2) . A tract of 112 A. 28 poles which is free of encumbrance prior to said judgments. [272] On October 1, 1891, tbe judgment debtor sold and conveyed 66 A. 2 R. 13 P. of land to one Robert Skinner, who failed to record bis deed until March 19, 1894. It thus appears that tbe judgment in favor of tbe appellant Blakemore, dated February 1, 1894, attached as a lien to tbe Skinner land before bis deed was recorded, while tbe judgments in favor of Patterson and 'Wise respectively were subsequent in time to tbe recordation of that deed, and bound only tbe two first named tracts still owned by Davies. On September 10, 1894, Robert Skinner borrowed $2,080, and secured tbe same by deed of trust on tbe land bought by him from Davies. In this deed tbe appellant, Harris C. Blake-more, united, releasing tbe lien of bis judgment as to tbe Skinner land. It is contended that inasmuch as tbe appellant, Blakemore, held tbe first judgment lien upon tbe three tracts of land, and voluntarily released tbe same as to tbe Skinner tract, be bad thereby limited bis security to tbe prejudice of Patterson and Wise, and should therefore be postponed to them to tbe extent of tbe value of tbe property released. Tbe Circuit Oourt took this view, and decreed accordingly, and it is from this decree that Blakemore has appealed. To invoke tbe doctrine of marshalling securities both sources of payment must belong to tbe common debtor. Tbe equity is not invoked against tbe doubly secured creditor, but against tbe common debtor, and cannot be invoked against the common debtor if that course would trench upon tbe rights, or operate to tbe prejudice, of tbe creditor entitled to tbe double fund. A dams Eq. (5 Am. Ed.), marg. p. 272; Russell v. Randolph, 26 Gratt. 717, 718. In tbe case at bar both securities held by tbe appellant Blake-more did not belong to tbe common debtor, Davies. The judgment of appellant bound tbe lands owned by Davies, and also tbe land owned by Skinner. Davies bad no property rights in tbe land be bad sold and conveyed to Skinner. Tbe purchase [273] money secured by vendor’s lien was a mere chose in action, passing to whomsoever the bonds representing the deferred payments might be assigned. Appellant’s judgment was not a lien on this chose in action, but it was an express statutory lien upon the land as a result of the failure of Skinner to record his deed before the judgment was docketed. Patterson and Wise were not injured by Blakemore’s releasing his lien on the Skinner land. They had no lien on that land, and were junior lienors on the Davies land. Their situation would be the same, if Blakemore had not made the release, for the primary security of Blakemore was the land still owned by Davies, and Skinner could have compelled him to exhaust that before resorting to his land, which was the ultimate security. It is contended that the unpaid purchase money due from Skinner to Davies was a “common fund,” and primarily liable to the payment of Blakemore’s judgment; that when Blake-more released his lien on the Skinner land it was his duty to have had the unpaid purchase money due from Skinner applied to his judgment to the relief of Patterson and Wise, and that his failure to do this is ground in equity for postponing him to the junior judgment in favor of Patterson and Wise. There is no evidence in the case showing what the amount of this unpaid purchase money was. The deed from Davies to Skinner recites that Skinner, on the 1st of October, 1891, executed his bonds for six annual deferred payments of $600 each, but what became of these bonds, how many of them were unpaid, or who held such, if any, as were unpaid on the 10th' of September, 1894, when Blakemore released the lien of his judgment upon the Skinner land, does not appear. . Upon the facts disclosed by the record there was no obligation resting upon Blakemore to take any steps to make his judgment out of any unpaid purchase money due from Skinner to Davies. He had no lien on the purchase money in the hands of Skinner, no suit was pending in which he could ask to have [274] such a fund so applied, no execution had been issued on his judgment, and there was no lien, either legal or equitable, that he could enforce against the bonds representing said purchase money. The law gave Blakemore a lien on his debtor’s land, and he had a right to rest upon that lien without pursuing his debtor’s personal property. He was under no obligation in respect to the claims of Patterson and Wise. Their judgments were obtained before his lien was released as to the Skinner land. They had equal notice of the recorded deed showing that the vendor’s lien was reserved to secure Skinner’s purchase money, and their hens being less well secured, they were more interested, than Blakemore, in having that purchase money applied to the judgments against the common debtor. Skinner had a right before any suit was brought, or execution issued, to pay his purchase money to Davies, and in this case he ran no risk in doing so, for the land still held by Davies was ample to satisfy the Blakemore judgment. The court is of opinion that the appellant, Harris O. Blake-more, did not prejudice his rights by releasing the hen of his judgment as to the Skinner land; and is entitled to have said judgment satisfied from the proceeds of sale, as the first hen on the tract of 112 A. 28 poles of land owned by J. Walter Davies, and as the second hen on the tract of 222 A., 2 B., 27 P. owned by said Davies — the unpaid purchase money due from Davies first hen on the last named tract. Por these reasons the decree appealed from must be reversed and annulled, in so far as it is herein declared to be erroneous, and in other respects affirmed, and the cause remanded to the Circuit Court for further proceedings therein in accordance with the views expressed in this opinion. Reversed in part.