Opinion
08-06-1888
WAIT'S EX'R v. SAVAGE et al.
Shafer & Durand, for complainant. A. W. Cutler, for defendants Prances and Walter P. Savage. A. G. Richey & Son, for defendant Wait.
On bill to foreclose a mortgage.
Shafer & Durand, for complainant. A. W. Cutler, for defendants Prances and Walter P. Savage. A. G. Richey & Son, for defendant Wait.
BIRD, V. C. The complainant files her bill to foreclose a mortgage which had been given to her testator by the mortgagor before his marriage to the wife who survived him, and who now claims an interest in dower in the mortgaged premises. The defendant Frances is the widow of Joseph W. Savage, the mortgagor. She also claims a lien on the lands mortgaged, by virtue of a mortgage given by her husband to Edward S. Savage, as her trustee, for $3,000, and by him assigned to her. She also claims that she is entitled to the rents and profits of the said lands from the time of the death of her husband, notwithstanding the fact that she was not in possession; she alleging that she surrendered the possession to the mortgagee, at his instance, without knowing her legal rights. She also claims that she has an interest in said lands, subject to the mortgage of complainant, as above intimated. Erskine L. Wait claims that after the mortgage of the complainant is paid, and such interest in dower as Mrs. Prances Savage is entitled to, that then he is entitled to the surplus money arising from the sale, by virtue of a deed of conveyance made by the sheriff, in compliance with an execution issued upon a judgment at law against Joseph W. Savage, the mortgagor. He claims that the lien which he has under said judgment and sale is prior to the lien of Mrs. Savage under her said mortgage for $3,000. He says that, although her mortgage bears date prior to the entry of the judgment under which the sale was made, the fact is that the judgment creditor had no notice of such mortgage at the time of the entry of his judgment, the said mortgage not then having been recorded. He also says that when he purchased the property he had no knowledge of the mortgage. This want of notice is not disputed. But it is earnestly insisted, on behalf of the widow, Mrs. Savage, that the deed under which Erskine L. claims is null and void, because the sale was effected by virtue of an execution which had been issued prior to the death of the judgment debtor, and that no scire facias had been taken out after the death to revive the judgment. The defendant Walter insists that the mortgagee has been in possession since the death of the mortgagor, and that the complainant should account for the rents and profits. It is also claimed in behalf of both defendants that all the credits to which the defendants are entitled have not been indorsed on the mortgage. It is said that the mortgagee was, in his life-time, an agent and trustee for the mortgagor, and as such received moneys which he has not accounted for, and which he received for the express purpose of discharging the liens which he might lawfully discharge by virtue of the conditions of the bond and mortgage.
First, as to the rights of the widow of the mortgagor. The general rule is that she is entitled to an account of the rents and profits from the time ofthe death of her husband, and to receive the one-third of the net proceeds. Hopper v. Hopper, 22 N. J. Law, 715. But if no other interests were in the way, she would not be entitled to the whole proceeds on the ground presented, viz., that, being in possession at the death of her husband, she surrendered to the mortgagee in ignorance of her legal rights. I find nothing in the case to satisfy me that any advantage was taken of her. Besides, it will be remembered that this mortgage was given by the mortgagor before his marriage with his present widow. But, she having surrendered possession, her rights are simply those of a widow out of possession. Smallwood v. Bilderback, 16 N. J. Law, 497. But is she entitled to an account of the rents and profits, from the time of the death of her husband, as against the mortgagee of her husband, the husband having executed the mortgage before marriage? Has not such mortgagee the right to the unqualified possession against all the world, until his mortgage is satisfied? The mortgagee must account when in possession, and the law charges him with the full value of the premises, and compels him to credit it on his mortgage. This he is obliged to do until the whole amount due is satisfied. After this is done, if there be anything left, the rights of the widow and heirs are to be adjusted. The widow is only entitled to her share in the surplus after the mortgage debt is paid. Hinchman v. Stiles, 9 N. J. Eq. 454; Hartshorne v. Hartshorne, 2 N. J. Eq. 349; and 1 Scrib. Dower, 595. Therefore, from these authorities, I cannot but conclude that the mortgagee, when in possession, is entitled to the rents and profits until his claim is wholly paid, as against the widow, who became the wife of the mortgagor after the execution of the mortgage, as well as against the heir.
In the second place, which is in right, after the complainant Frances Savage, the widow, who took an assignment of the mortgage made by her husband to his son, as trustee for her, for $3,000, or Erskine L. Wait, who purchased the land upon a sale made by the sheriff, under an execution issued on a judgment which was obtained after the mortgage was executed and delivered, but before it was recorded, and that, too, without any notice of such mortgage? As I understand the argument of counsel for Mrs. Wait, he regards the sale made by the sheriff as null and void, and also the deed made in pursuance thereof, to Erskine L. Wait, because the sale so made was made by virtue of an execution issued prior to the death of the judgment debtor, and not executed until after his death. He insists that in every such case no sale can be effectual without first reviving the judgment by scire facias, which was not done in this instance. I think that, in New Jersey, the law is well settled against this contention. Rickey v. Hillman, 7 N. J. Law, 180. But, in addition to this, I cannot but think that, in equity, the purchaser will be permitted to stand in the place of the judgment creditor, in case there should appear to be any defect in his title under the sheriff's sale. The judgment was a prior lien to the mortgage, because recorded first and without notice of the existence of the mortgage. In the hands of the creditor this judgment would take precedence of the mortgage of Mrs. Savage, and to my mind, on the plainest principles of equity, the sale by the sheriff operated as an assignment of the judgment, to the extent of the lien thereof on this land, to Erskine L. Wait. Whatever interest the judgment creditor had in this land, by virtue of his judgment, that interest passed to the purchaser, for a valuable consideration. He was the highest bidder, and paid the price offered. And this price the judgment creditor accepted and has the benefit of. Clearly, therefore, the purchaser ought to stand in the place of the judgment creditor. On this ground, too, he would come in ahead of Mrs. Savage. This view of the case renders it unnecessary for ma to speak of the effect of the absence of an allegation or statement in the answer respecting this last question, except to add that, as I understand the rule, courts do not decide a case against the resisting party, except so far as the issue is raised by the pleadings.
The proof does not establish the charge that the testator, in his life-time, received moneys as the agent of the mortgagor, which he was to appropriate towards the satisfaction of the mortgage now being foreclosed, and did not so appropriate them, or that he received any other moneys of the mortgagor, and has not appropriated them to some proper purpose, to the benefit of the mortgagor in fulfillment of his duty as agent. I understand that all the proofs which the parties have to offer are in the printed book which has been presented, respecting the accounts between these parties. I shall therefore advise a reference to a master to take and state an account, and to report the amount due to the complainant on her mortgage, on the testimony now on file. The officer who makes the sale will be directed to pay all the surplus money into court, after satisfying the decree for the complainant, when the court can ascertain the amount to be invested for the widow during her lifetime. The rest of such surplus will be ordered paid to Erskine L. Wait, at once, as purchaser, and the amount so invested for the widow will be ordered to be paid to him at the death of the widow.