Clement v. Kaighn

The Chancellor. By the interlocutory decree in this cause, it was referred to one of the masters of the court to ascertain and report the amount duo to the complainant, and also the amount due, if anything, to sundry creditors upon judgments specified in the bill of complaint, and also to ascertain and report the order and priority of the said mortgage and judgments. The master reports that Stephen Coulter, one of the defendants, recovered judgment against Charles Kaighn, the — 54 — mortgagor, in the Supreme Court, on the 'twenty-third of January, 1858, upon which judgment there appeared to be due, at the date of the report, $12,103.93, but that no execution issued upon this judgment until June twenty-fifth, 1862, since the filing of the complainant’s bill of complaint ; that the complainant’s mortgage, duly executed and acknowledged, was recorded on the twenty-sixth of December, 1859; that from January ninth, to June sixteenth, 1861, there were nineteen judgments recovered against the mortgagor, upon seventeen of which writs of fieri facias were issued to the sheriff of the county of Camden, where the premises lie. Upon this state of facts, the master reports that he is unable to determine the order which the judgment of Coulter should occupy in the distribution of the proceeds of the sale of the mortgaged premises, whether it should be paid prior to the complainant’s mortgage, thus having priority over the judgments to which it is subject, or whether it should be paid after the said judgments, thus losing its priority over the complainant’s mortgage. The entry of Coulter’s judgment, being prior in point of time to the complainant’s mortgage, is made by the statute a prior encumbrance. The judgment binds the land from the entry of- the judgment on the records of the court. Nix. Dig. 761, § 2. But the record of the complainant’s mortgage, being prior to the entry of the defendant’s judgments, is a prior encumbrance to those judgments. Nix. Dig. 550, § 10. The order of priority of the several encumbrances, had no executions been issued upon the subsequent judgments, is perfectly clear. The embarrassment is created by the fact that executions were issued upon the junior judgments, and levied upon the land before any execution was issued upon the first judgment; and by the provision of the statute, which under such circumstances postpones the prior to the junior judgment, or in terms enables the junior judgment to sell the land clear of the encumbrance of the prior judgment. Real estate in New Jersey was made subject to the pay — 55 — ment of debts, and the proceedings of the sheriff thereon, regulated by the provincial act of December second, 1743. 1 Neville 279; Allison 129. By the first section of that act, it is declared that real estate within the province, belonging to any person indebted, shall be liable to and chargeable with all his just debts, and shall be chattels for the satisfaction thereof, in like manner as personal estates are seized, sold, or disposed of for the satisfaction of debts. By the third section, it is enacted that the sheriff shall make to the purchaser as good and sufficient a conveyance for the land purchased under the provisions of the act as the owner of the land could have made at the time of the judgment, and that the purchaser, by the said deed, shall be vested with as good and perfect an estate as the owner was seized of or entitled unto at or before the said judgment, and as fully as if the lands were sold and conveyed by the owner to the purchaser. The sixth section declares that the purchaser shall hold the premises so purchased free and clear of all other judgments, by virtue whereof no execution has been executed upon the real estate so purchased. The seventh section directs that no process against real estate shall issue until the record of the judgment and the process shall have been inspected by one of the justices of the Supreme Court, and it shall have been certified by him that no error is therein apparent to him, and the said judgment and process shall be recorded in a book to be kept for that purpose before sending such process to the sheriff or other officer. The tenth section directs that, where sundry executions have issued requiring the sale of real estate, such priority and preference shall be given as the law gives in the case of executions against personal estate only. Then, as now, executions bound personal estate from the time of the delivery thereof to the sheriff. 2 Bla. Com. 421; Nix. Dig. 248, § 3. These provisions of the act of 1743 have substantially continued in force till the present time. They will be found — 56 — embodied, in tlie act of February 18th, 1799, § 1, 3, 4, 8, 12, 13; Paterson 369; Rev. Laws 430. The second section of the act of 1799 provides that the judgment shall bind the lands only from the time of the actual entry of such judgment on the minutes or records of the court; whereas, by the common law, it operated from the first day of the term in which it was entered, and by the statute of frauds, 29 Charles 2, ch. 3, from the day of signing the same. 3 Bla. Com. 420. In the revision of 1846, the act of 1799 was broken up, and its provisions incorporated in two different acts. The first, eighth, twelfth, and thirteenth sections are retained as the first, third, eighth, and ninth sections of the “ act making-lands liable to be sold for the payment of debts.” Nix. Dig. 722. The third and fourth sections of the act of 1799 compose the third and fourth sections of the act respecting executions. Nix. Dig. 248. The construction of these provisions cannot be affected by their change of collocation. They are in pari materia, and form parts of one entire system. Their construction must be the same as if they remained, as originally enacted, parts of the same statute. The acts of 1846 are cotemporaneous, both being approved upon the same day. If the fact- had been otherwise, no inference could properly be drawn from the circumstance that one statute was prior in time to the other. Both were mere re-enactments of long subsisting laws, whose construction was well settled and whose operation was regarded as beneficial. Beverting, then, to the plain provisions of the statutes, they declare that the judgment shall bind the lands from the time of the actual entry of the judgment on the records of the court. Nix. Dig. 722, § 2. It constitutes a valid encumbrance as against all subsequent alienations, mortgages, and judgments. And if the land be sold and conveyed by virtue of an execution upon the judgment, the deed will vest in the purchaser the same estate in the premises as the defendant in — 57 — execution was entitled to at the entry of the judgment. Nix. Dig. 723, § 8. But if the plaintiff in the first judgment neglect to sue out execution; he loses the priority to which he is otherwise entitled over subsequent judgments upon which executions are sued out. The provisions of the statute, so far as they are material to the present inquiry, are as follows : “Whereas other judgments, by virtue of which the sale under execution is made, might affect the real estate so sold, if no provision be made to remedy the samo; and whereas persons who have not taken, or will not take out executions upon their judgments, ought not to hinder or prevent such as do take out-executions from having the proper effect and fruits thereof, therefore be it enacted, that the purchaser shall hold the real estate by him purchased as aforesaid free and clear of all other judgments whatsoever on or by virtue of which no execution lias been taken out and executed on the real estate so purchased.” Nix. Dig. 724, § 9. The statute, in terms, relates merely to the title which a purchaser by virtue of a sheriff’s sale under an execution at law shall acquire. It declares that the purchaser under a sale by virtue of an execution issued upon a junior judgment shall hold the land dear of all judgments upon which no execution has been taken out and executed on said land. In effect that gives to the junior judgment, by virtue of which the land is sold, priority over the senior judgment upon which no execution hath been sued out and executed upon the land. But the design of the statute is to give to the plaintiff in the junior judgment upon which execution is first sued out “ the proper effect and fruits thereof.” The operation of the statute cannot, therefore, be limited to the case of a sale under the junior judgment, where no execution hath been sued out upon the senior judgment and levied upon the land. Eor if that were so, it would enable the plaintiff in the prior judgment to sue out and levy his execution upon such judgment after the levy under the execution upon the junior judgment, and thus defeat the express — 58 — object of the statute by preventing the plaintiff in the junior execution “ from obtaining the effect and fruit thereof.” To give effect, therefore, to the statute, it is necessary to hold that the plaintiff in the junior judgment, by suing out and levying the first execution upon the land, acquires a priority of lien, which cannot be affected by any execution subsequently issued, nor by any mode in which the land may be sold. The issue of the execution upon the junior judgment, and its delivery, duly recorded, to the sheriff, destroys the priority which was enjoyed by the older judgment, and transfers it to the junior judgment. It reverses the priority of the encumbrances, no matter in what mode the land may be sold. This, I think, must have been the result if there were no further provision upon the subject. But the statute further declares, that where sundry executions issue against the goods and lands of the same person, then the like priority and preference shall be given as is given in writs of execution against goods only, viz. they shall bind the property from the time that the writ, duly recorded, shall be delivered to the sheriff. Nix. Dig. 248, § 3, 4; 722, § 3. It is well settled, in the construction of these provisions, that executions against real estate have priority according to the time of their delivery, duly recorded, to the sheriff, irrespective of the dates of the judgments. Elmer v. Bursen, Penn. 187; Johnston v. Darrah, 6 Halst. 282; Voorhees v. Chaffees, 4 Zab. 507. The same order of priority must obtain where the sale of the land is made by virtue of a decree in equity. The pro-' ceeds of the sale must be distributed according to the order of the legal priority of the encumbrances. The encumbrance of Coulter’s judgment upon the mortgaged premises, by reason of his failure to sue out execution, must be postponed to the encumbrance of the junior judgments upon which executions have been sued out and executed. As an inevitable consequence, it must be postponed, also, to the encumbrance of the complainant’s mortgage, which is prior to the junior judgments, and whose priority — 59 — cannot be affected by any laches of the plaintiff in the prior judgment. The plaintiff in the prior judgment can prevent that consequence only by satisfying the subsequent judgments. If the land be sold by virtue of an execution issued upon the junior judgment, the purchaser would take title clear of the prior judgments, but subject to the mortgage. In effect, the prior judgment would be postponed not only to the subsequent judgments, but also to the mortgage. This is the inseparable consequence of the laches of the plaintiff in not suing out execution upon his judgment. The same result will follow from a sale under a decree of this court. It never could have been contemplated that the order of the encumbrances should be changed or affected by the tribunal out of which the execution issued. This would put it in the power of the mortgagee or of the prior judgment creditor, by purchasing the mortgage, to defeat the purpose of the statute, and the rights of the junior judgment creditor acquired under it. The order of priority of the respective encumbrances will be decreed accordingly.