Briggs v. Planters' Bank

The Chancellor. The complainants are the assignees of certain promissory notes, given by Smith and Creecy to James R. Creecy, for the purchase of a town lot, No. 9, in the city of Yazoo. The notes, together with the deed from J. R. Creecy, retain, in express terms, a lien, upon the lot so sold for the payment of the purchase money. The Planters’ Bank having obtained a judgment against J. R. Creecy, prior to his sale, subsequently sued out an execution of fieri fa-cias, and caused the same to be levied on the lot aforesaid. The complainants filed their bill to enjoin a sale under that judgment, alleging in substance that the bank might have had satisfaction out of other property of said Creecy; that property of his was taken and sold under junior judgments; and that the bank neglected to have the proceeds of such sales applied in satisfaction of its claim; that there is another fund in litigation in this court belonging to J. R. Creecy, to which the bank should be compelled to resort. The bill prays that the lien retained on the lot may be enforced in exclusion to the bank, and that the injunction may be made perpetual. The answer denies that there has been any delay on the part of the bank in enforcing the collection of its claim, or that there has been any money collected on junior judgments against said Creecy; which should have been applied to that of the bank. It is admitted that there is another fund to which the bank would have a right to .resort, but that that fund is in litigation, and it is doubtful [584] whether it can ever be made available. There is no testimony in the case. The lien retained on the lot of land is in the nature of an equitable mortgage, which the assignee might enforce in equity against any subsequent incumbrancers having notice of its existence. I can have no doubt that it created such ah interest as was assignable in equity. It is wholly different in its nature and incidents from a vendor’s equitable lien. The one is created by virtue of express contract; the other arises by implication, and is the creature 'of abstract principles of equity. But in this case the lien of the bank is prior in date to that of the complainants, and looking to the facts of the case as shown in the bill and answer I can see nothing which would authorize him to say that that priority has been waived or abandoned. The bank does not appear to have done any thing to prejudice or defraud the complainants of their rights. A party can not be divested of a prior lien unless there is some fraud or deception in the transaction. Trustees of Fraiser v. Centre, 1 McCord’s Ch. Rep. 278. There seems to be no foundation whatever for the claim made in the bill to compel the bank to resort to another fund than the lot of land. The marshalling of securities between different creditors or incumbrancers, proceeds upon the principle that full justice may be thus done to all parties without prejudice to any. A court of equity never compels a party having a prior lien upon two funds to resort to one only, in order that a junior lien may be satisfied out of the other, unless it appears that the one which is not affected by the junior lien is fully adequate to the satisfaction df the prior lien, and that the remedy for reaching it is prompt and efficient. 1 Story’s Eq. 528. The fund to which the complainants would compel the bank to resort, is one depending upon the contingencies of a law suit, and which, if it were even accessible to the bank, is not shown to be sufficient for the satisfaction of its judgment. I think no case can be found where the holder of the oldest lien has been compelled to resort to such remote contingencies in favor of a junior incumbrancer. I cannot, then, find any thing in this case which entitles the complainants to retain the injunction heretofore granted against the Planters’ Bank, and this disposes of the case so far as that defendant is concerned. [585] I have more difficulty about the order I should make as to the other defendants. The bill has been taken for confessed against Smith and Creecy, and so far as they have any interest in the town lot the complainants would seem to be entitled to their decree, to enforce the lien which they hold upon it, subject to the prior lien of the bank. If the lot will bring more money than will satisfy the judgment of the bank, the complainants will have a clear right to apply the surplus in satisfaction of their claim. In the sale to Smith and Creecy the lot appears to have been estimated at eight thousand dollars; the judgment of the bank is something over three thousand, which is subject to be discharged in its owp issues; which a,re now only worth some thirty-eight or forty cents in the dollar. This leads me to suppose that there may be a surplus arising from the proceeds of the sale of the lot. The proper mode of retaining control over such probable surplus, with a view to its application, is the difficulty which presents itself. Ordinarily, where there are different incumbrances upon the same property, before the court, .the course is to direct a sale, and have the money brought into court to be applied according to their respective priorities. But this takes place where both incumbrances are of a character which can only be enforced in this court. Here there are no obstacles at law in the way of the bank to the enforcement of its judgment. The bank asks nothing at the hands of the court, and the complainants show no equity against it, to restrain its action at law. It is obvious, then, that it would be most unjust to hold up the injunction against the bank until a sale could be effected under the complainants’ bill, and especially as such sale must, under the statute, be made on a credit of not less than six months, when the bank is entitled to a sale at once, for cash. On the other hand, this 'court has no power to order the sheriff who may be charged with the collection of the judgment of the bank to bring any surplus that may come into his hands into this court. This would be in palpable conflict with the jurisdiction of the circuit court. The sheriff must act in obedience to the command of the process; which command is, that he return the money into that court, to which the application of it rightly belongs. Turner v. Fendall, 1 Cranch, 133; Jones v. Jones, 1 Bland’s Ch. R. 461. In view of these difficulties, the [586] question recurs, what form of decree will meet the demands of the case. There are many cases in which a court of equity, in order to dispose of the whole matter in controversy between all the parties, grants relief with qualifications and conditions. It seems to me that the proper decree here will be to dissolve the injunction against the bank, and to declare the complainants entitled to enforce their lien as against the defendants, Smith and Creecy, and to direct a sale of the lot in controversy, subject to the prior lien of the bank. Let the case be referred to the clerk to compute the amount due to the complainant, and report thereon; upon the coming in of which a decree may be drawn in conformity with the foregoing views, dismissing the bill as to the other defendants, against whom no relief is prayed. The defendants Smith and Creecy to pay costs.