Finley v. Thayer

Mr. Chief Justice Walker delivered the opinion of the Court: This was a suit in equity, brought by Joel K. Finley, in the Clay Circuit Court against William Thayer, Edwin B. Aldrich, Seth Thayer, Charles H. F. Abrens, C. Lackey, W. W. Willard, and H. 0. Goodman, to enjoin the collection of two promissory notes, for about two hundred dollars each, given by complainant to the first named four of the defendants. It is alleged in the bill, that a power of attorney was also executed at the same time, to confess a judgment on the notes if default should be made in their payment; that after their maturity, at the August Term, 1859, of the Marion Circuit Court, the payees caused a judgment to be confessed on the notes; an execution was afterwards issued, and returned with a credit of ten dollars. In the spring of 1860, an alias execution was issued and levied on a part of lot five, in block one, and in square four, in the town of Salem, Illinois; which was returned in the month of May, in that year, satisfied in full, by a sale of the property. That W. H. Thayer became the purchaser ; in doing so he acted for, and was one of, the plaintiffs in execution. That the land was not redeemed, and after the expiration of fifteen months he received a sheriff’s deed for the premises thus sold. That at the time, and previous to the sale, complainant owned the lot levied upon, together with a number of others adjoining thereto. That he had purchased the lots for the sum of $4,000, and had paid on the purchase $3,500, and had given a mortgage thereon to secure the payment of the remaining $500 of the purchase money; which was on record when the levy was made. That after purchasing, complainant put $350 worth of improvements upon the lot in controversy. That it was worth the sum bid by plaintiffs in execution, over and above its pro rata, share of the money necessary to redeem it from the mortgage. That complainant had plenty of other property liable to execution, and that Black, who was security on the notes, was a man of wealth, and that the purchase of this lot was purely a matter of choice by plaintiffs in execution, and by no means a matter of necessity. That Lemen, to whom the mortgage was executed, proceeded to foreclose, and had the lot sold, and became the purchaser of all the mortgaged premises in satisfaction of his debt. That at the date of the sale under the foreclosure, complainant had lost all right to redeem from the sale to Thayer; and one year after Lemen’s purchase, one Mills, a judgment creditor of complainant, redeemed from the sale under the mortgage, and received a sheriff’s deed, and became the owner of the property. Afterward the Thayers, Aldrich and Abrens, prosecuted a writ of error to the Supreme Court of this State, on their judgment against the complainant; and, on a trial, of the same the judgment was reversed, for errors committed by them in confessing it. That they had brought suit on one of the notes, and recovered a judgment, notwithstanding complainant interposed a plea, setting up the facts as a defense, and had sued out an execution, and had placed it in the hands of the coroner of Marion county, complainant then being the sheriff of the county, and that they were about to have it levied upon the property of Black. That they also intend to bring suit for the recovery of the other note. That the sale of this lot satisfied and discharged these notes, and that they should not be permitted again to sue and recover on them. The bill prays for an injunction to stay the collection of the judgment already obtained, and restrain them from suing on the other note. The venue of the case was changed to Fayette county. Defendants filed a demurrer to the bill, which the court sustained, and a decree was rendered dissolving the injunction, and dismissing the bill. Complainant brings the case to this court on error, and asks a reversal of the decree. Under our statute, the equity of redemption in the lot was subject to levy and sale on the execution, in precisely the same manner as unincumbered real estate. When the equity of redemption of the mortgagor is sold on execution, it passes, if not redeemed, to the purchaser, subject to the payment of the mortgage. Such a purchaser is, by the sale, substituted to all of the rights of the mortgagor in the premises, but to nothing more. The sale is of the equity of redemption, and the purchaser takes it with the burden, and he is supposed to fix the price he pays at the sale, with reference to the incumbrance on the property, and subject to which he purchases. He no doubt deducts from the value of the property the amount of the mortgage debt, and then regulates his bid with reference to the value above the incumbrance. The amount thus bid becomes an unconditional satisfaction, to that extent on the execution. In this case, one of the plaintiffs in execution became the purchaser for the amount of the execution, and it was thereby as fully satisfied as if the purchase had been made, and the money paid by a stranger. It is, however, urged, that there was some kind of legal or moral warranty or guaranty on the part of the debtor, that the purchaser should acquire a fee simple title at the sheriff’s sale. But we have been referred to no authority announcing such a rule, nor are we aware that any such exists. On such a sale, the purchaser has notice of the incumbrance, and expects to get back his money on a redemption, or to acquire the equity of redemption, and, by discharging the lien, to become the owner of the fee. There is no suggestion that complainant did or said any thing to induce the purchase, or otherwise to mislead the plaintiffs in execution. He did not agree to redeem from the mortgage if they would purchase the lot. He no doubt could have done so, but was under no legal or moral obligation to do so, and therefore was guilty of no wrong by refusing. The principle of caveat emptor applies in such sales, and the purchaser must be bound by his acts, unless misled by fraud. And, having purchased under the execution, the obligation was upon plaintiffs in execution, if they desired to render their equity of redemption available, to redeem from the mortgage. They acquired all they purchased, and, having lost it by their own laches, it would be highly unjust now to permit them to impose the loss upon another person, who seems to be entirely free from blame. It is also contended, that, by reversing the judgment under which the sale was made, the sale was avoided and canceled thereby, and thus left the notes in full force, free from all defense, precisely as if the judgment had never been rendered. We do not perceive that such effects flow from a reversal of a judgment. Suppose this judgment had been satisfied by personal property, or by money paid by plaintiff in error, would it be pretended that the notes could be again collected % In such a case it is apparent that such a satisfaction could be interposed as a bar to a recovery. And in what do the two cases differ. Here there was a satisfaction to the extent of the judgment by sale of the property of plaintiffs in error, to which they acquired title, and which by their neglect they have lost, it is true, but that does not change the rights of the parties under.-the satisfaction of the debt due on the notes. They acquired the equity of redemption, and have not restored it to plaintiff in error. They by their bid said it was worth the amount of that judgment, and they thus deprived him of that amount of his property, and with it they satisfied that amount of the notes, and he should not bear the loss produced by their acts. Hor will defendants be heard to say the proceeding was illegal. Although the judgment was erroneous it was not void. It bound all parties and-, privies until reversed. And, the sale being fully warranted, their acts under it were binding, and before defendants can repudiate them they must restore plaintiff in error to the position he was in prior to their sale. But by failing to protect the equity of redemption they have placed it beyond their power. It would therefore be manifestly unjust to permit defendants in error, after having satisfaction of their debt, without placing plaintiff in error in statu quo, to again sue and have another satisfaction of the notes. The only remaining question is, whether this defense is legal or equitable. Ho objection is perceived to its being interposed as a bar to the recovery on the notes. The law permits the party, in a suit at law, to set up and rely upon a legal satisfaction obtained under legal proceedings. A former recovery may be so pleaded. And so of payment, accord and satisfaction, and other such defenses. The satisfaction was at law, and, to permit it to be pleaded, is only allowing the party to rely upon a legal defense. There is no account to state, or equitable titles to subject to the process of the court. There is therefore no necessity for turning,the party around to a court of equity, when his defense can be as readily made at law as in equity. For the reason, therefore, that the defense is at law, the decree of the court below must be affirmed. Decree affirmed.