Boos v. Morgan
| Decision Date | 02 February 1892 |
| Docket Number | 15,507 |
| Citation | 30 N.E. 141,130 Ind. 305 |
| Parties | Boos v. Morgan et al |
| Court | Indiana Supreme Court |
From the Wabash Circuit Court.
Judgment reversed.
B. F Ibach, B. M. Cobb and C. W. Watkins, for appellant.
J. B Kenner and U. S. Lesh, for appellees.
The appellant alleges in his complaint that on the 15th day of April, 1876, Milton Hendrix recovered a judgment against the appellee Lucas for nine hundred and seventeen dollars, in the Huntington Circuit Court; that Lucas was then the owner of three parcels of land situate in Huntington county, and described in the complaint; that one of the parcels was of the value of four hundred dollars; that Lucas sold it to Henry Kemp; that the other parcel was of the value of twelve hundred dollars; that Lucas sold to the appellee Morgan the second of the parcels of land for one thousand dollars; that the third parcel of land was of the value of fifteen hundred dollars, and was sold to John Edgar; that the judgment in favor of Hendrix was a lien upon all of the several parcels of land. The complaint further alleges that, after Morgan purchased of Lucas the second parcel of land, Lucas became the owner of another parcel; that this last or fourth parcel was purchased from Lucas by the appellant; that the appellant paid the full value of the land; and received a warranty deed therefor; that at the time of his purchase of the fourth parcel of land from Lucas the appellant had no actual notice or knowledge of the existence of the Hendrix judgment; that Lucas was, at the time of the appellant's purchase, the owner of personal property of the value of two thousand dollars, and real property of the value of two thousand dollars; that all of this property was situated in Huntington county and subject to execution. It is also alleged in the complaint that Lucas became the owner of another parcel of land before the sale of the appellant; that the land of which he became the owner was sold by Lucas since the appellant became the owner of the fourth parcel of land; that on the 7th day of October, 1880, John Morgan paid the Hendrix judgment; that "Morgan attempted to take an assignment of the judgment, which attempt was made in the order book by one L. P. Milligan under and by virtue of a pretended power of attorney, which power of attorney was never recorded;" that on the 3d day of April, 1880, Hendrix caused an execution to be issued on his judgment; that the sheriff levied the execution, but returned it without a sale, and a venditioni exponas was issued; that a sale was made of the lands on this last writ, and the lands purchased by Morgan; that he entered satisfaction on the record of the judgment assigned to him. It is still further alleged in the complaint that the appellant had no notice of the judgment or the proceedings thereunder until after the sale; that he then examined the records, and found that the judgment had been entered satisfied; that the writ on which the sale was made was issued with the entry of satisfaction uncancelled, and without any disposition of the property levied upon under the former writs, or any order vacating the first sale; that the appellant had no notice of the last sale until long after it was made.
The position first assumed by counsel is that the assignment of the judgment by Milligan, the attorney in fact of the original judgment creditor, was ineffective because the power of attorney was not recorded. There is no strength in this position. If, as the complaint tacitly concedes, Milligan was the attorney in fact of the judgment creditor, the assignment is not ineffective merely because the instrument investing the attorney with authority was not recorded. The statute requiring a power of attorney to be recorded does not apply to power to assign judgments.
A more serious question than that disposed of arises on the contention that Morgan paid the judgment. The complaint avers that he did pay it, but it also shows that he took an assignment of it. We think it quite clear that if Morgan had extinguished the judgment by payment, he could not use it to the injury of the appellant, as the latter had a right in equity to have the other property of the judgment debtor first subjected to the payment of the judgment lien. As Morgan was not primarily liable for a judgment, and as he did take an assignment of the judgment, the conclusion required by the authorities is that he did not extinguish the judgment. It is settled beyond controversy that where the purchaser of land pays off a judgment for which he is not liable, and there is an intention manifested to keep the lien alive, equity will preserve it for his protection and use for equitable purposes. Troost v. Davis, 31 Ind. 34; Hanlon v. Doherty, Ind. 37; Strohm v. Good, 113 Ind. 93, 14 N.E. 901; Elston v. Castor, 101 Ind. 426 (51 Am. Rep. 754); Hewitt v. Powers, 84 Ind. 295; Lowrey v. Byers, 80 Ind. 443; Smith v. Ostermeyer, 68 Ind. 432; Hows v. Woodruff, 12 Ind. 214; Barnes v. Mott, 64 N.Y. 397. We hold, upon this point, that the payment did not extinguish the lien of the judgment but whether equity will suffer Morgan to use it to the injury of the appellant is quite another question. That question we will presently consider. All we do now is to adjudge that there was no complete or absolute extinguishment of the judgment. In holding this we necessarily affirm that the case is not within the rule that where one pays off a judgment for which he was primarily liable the judgment is extinguished.
The authorities to which we have referred conclusively answer the appellant's contention that, as Morgan was the owner of the fee, the lien of the Judgment was merged when he acquired it by assignment. It is a settled principle of equity jurisprudence that the technical doctrine of merger can not be applied against a party not liable for a debt, who pays it off to protect property acquired from the person primarily liable. The intention and the situation of Morgan prevented a complete and absolute merger, and kept the lien of the judgment alive in his favor for equitable use. 2 Pomeroy Equity, sections 791, 792, 797.
The remaining question upon this branch of the case would be one of much difficulty if it were not settled by a former decision. Granting that there was no complete extinguishment of the judgment either by payment or by merger, there yet remains the question, can Morgan so use the judgment lien as to subject the land of the appellant to sale to satisfy it? As the initial step in the discussion, we state, as a fundamental principle, that merger is never prevented when fraud or wrong would result if it were defeated. Worthington v. Morgan, 16 Sim. 547; Hutchins v. Carleton, 19 N.H. 487; McGiven v. Wheelock, 7 Burb. 22. This is a just principle, and adherence to it is required by considerations of consistency as well as considerations of justice. A legal rule stands, unless confronted by a superior equity. If a legal rule will secure justice, equity will do nothing to defeat its operation, but, on the contrary, will do all in its power to give a complete and effective force. If, therefore, it is not equitable to defeat merger against the appellant, as to him equity will give the legal doctrine full sway, although as to others it may interpose to break down the rule of the law. Whether the appellant is in such a situation as to ask equity to allow the legal rule to take its course, we will hereafter determine and declare. Another matter demands consideration before examining the question of the influence exerted by the position which the appellant occupies, and that is this: Morgan must rely entirely upon equity to prevent a merger as against the appellant, and if what he asks is unconscionable, equity will not lend him a helping hand. Equity keeps the judgment alive only that it may be used by him for an equitable purpose. He can not, therefore, succeed upon equitable principles, unless his case is one in which good conscience requires that a legal rule be broken for his benefit, and the judgment kept alive in furtherance of justice. The legal rule is against him, and only equity can relieve him. His appeal is to a court of conscience, and it will be fruitless if his case is tainted by fraud or wrong. Kitts v. Wilson, post, p. 492. While it may be true that there is no complete merger under the legal rule, it does not follow that the judgment will be kept alive for an inequitable purpose.
We come now to the question, what is the equity of the situation? If it is with Morgan, the appellant must fail; if against him the legal rule must, if we adhere to principle, and do not yield to the former decision, prevail, and the appellant succeed. Appellees' counsel say: "A sale of one tract of land is not invalid, notwithstanding one who was a later purchaser might have an order in equity for a sale in the inverse order had he properly applied for the same." They cite Sansberry v. Lord, 82 Ind. 521. It seems clear that the assertion of counsel, if it correctly states the rule, proves that their client is in no situation to invoke the aid of equity to overthrow a rule of law for his benefit against one possessing such equities as the appellant possesses. In the case to which counsel refer it was said: "It is presumed to be the duty of the judgment debtor, as between himself and his vendee, to pay the judgment, and if he retains any of the property encumbered by it, a court of equity will, without impairing the lien, require the judgment creditor to first exhaust the property held by the debtor so as to protect his vendee." This doctrine is strongly against the appellee Morgan, for he is here asking the...
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