Andrus v. Burke

• Decision Date: 07 February 1901
• Citation: 48 A. 228,61 N.J.E. 297
• Parties: ANDRUS v. BURKE et al. (three cases).
• Court: New Jersey Court of Chancery

48 A. 228

61 N.J.E. 297

ANDRUS

v. BURKE et al. (three cases).

Court of Chancery of New Jersey.

Feb. 7, 1901.

Foreclosure by John E. Andrus against Timothy Burke and others. Exceptions to master's report ascertaining the amount due and fixing priorities between junior incumbrancers. Report confirmed.

Henry V. Condict, pro se.

R. S. Hudspeth, for Fallon and other judgment creditors.

PITNEY, V. C. The defendant Burke is the owner of three several pieces of property subject to a mortgage or mortgages held by the complainant Andrus, upon which three several suits of foreclosure were commenced. The defendants Fallon, Condict Hennessy O'Brien, and Oakley are severally judgment creditors of Burke. Fallon's judgment was entered June 5, 1900, Condict's judgment was entered on June 9th, Hennessy and O'Brien's judgments on June 11th, and Oakley's on June 14th; all by confession. Mr. Condict also held an ordinary warranty deed absolute, executed by Burke and wife to him, for all the property covered by the mortgages, dated January 12, 1900, for the consideration of $3,700, acknowledged on that day, but lodged for record on June 9th, a few moments after Mr. Condict entered the rule for judgment in his favor against Burke. That deed, it is shown by most conclusive evidence, was given by way of mortgage to secure Mr. Condict for $3,000 advanced on that day, and for $700 due from Mr. Burke to him for professional services. It was kept off the record at the request of Burke, who was a contractor, and at that time engaged in carrying out a heavy contract. Prior to the entry of Condict's judgment Burke had repaid him $500 on account of the borrowed money, so that on June 9th, when the deed was lodged for record, Mr. Burke owed him $3,200, besides interest, of which $2,500 was for borrowed money; and on the night before the entry of the judgment and record of the deed Mr. Burke confessed judgment to Mr. Condict for $2,500, the consideration of which judgment was the balance due on the $3,000 cash advanced to him on January 12th, and secured by the deed in question. The contest is between these several creditors.

The peculiarities in the case are these: That Fallon at once issued an execution upon his judgment, but directed the sheriff to return it without levy, and upon it founded supplemental proceedings to reach assets not liable to levy; while Mr. Condict and the other judgment creditors duly issued execution, and levied on the mortgaged premises. Treating Mr. Condict's deed as a mortgage, brings the case as to the $700 not included in his judgment directly within that of Clement v. Kaighn, 15 N. J. Eq. 47. In that case there was—First, a judgment, upon which no execution had ever been issued; second, the complainant's mortgage; and, third, divers judgment creditors of the mortgagor, with executions and levies, subject, of course, to the complainant's mortgage. And it was held that the first judgment creditor, by falling to issue an execution on his judgment, was postponed not only to the subsequent judgment creditors who had issued and levied executions, but also to the complainant's mortgage, which was subsequent to the older judgment. If in that case there had been no judgments recovered, with executions and levies, subsequent to the complainant's mortgage, that mortgage would have been clearly subsequent in priority of payment to that of the older judgment. But it was held that, because judgments subsequent to the complainant's mortgage had been recovered, followed by executions and levies, which placed them prior to the older judgment, it also placed the complainant's mortgage prior to the older judgment. I have never been able to understand the logic of this reasoning, having been taught while a law student that the legal puzzle presented by the situation was insoluble on any known principles. The difficulty, of course, is to find any reason why, after A.'s priority over B. is clearly established, the subsequent intervention of the Hen of C. should change the priorities between A. and B. But the decision of Chancellor Green was followed without question by the court of errors and appeals in Hoag v. Sayre, 33 N. J. Eq. 552, and, of course, is binding upon me.

Applying that case here, Fallon must be placed after Condict, not only for the amount of his (Condict's) judgment, which has precedence over Fallon's by reason of its first levy, but also as to...