Meigs v. Bunting

• Decision Date: 06 April 1891
• Docket Number: 175
• Citation: 141 Pa. 233,21 A. 588
• Parties: A. V. MEIGS ET AL. v. S. C. BUNTING ET AL
• Court: Pennsylvania Supreme Court

21 A. 588

141 Pa. 233

A. V. MEIGS ET AL. v. S. C. BUNTING ET AL

No. 175

Supreme Court of Pennsylvania

April 6, 1891

Argued January 23, 1891

APPEAL BY C. D. CLARK FROM THE COURT OF COMMON PLEAS NO. 3 OF PHILADELPHIA COUNTY.

No. 175 July Term 1890, Sup. Ct.; court below, No. 366 March Term 1889, C.P. No. 3.

On April 18, 1889, Arthur V. Meigs and William M. Meigs executors of the will of J. Forsyth Meigs, deceased, brought scire facias upon a mortgage, dated November 26, 1873 recorded the same day, and covering certain premises on Twenty-third street, Philadelphia, against Samuel C. Bunting Jr., with notice to Charles D. Clark and others terre-tenants. Charles D. Clark having appeared and filed an affidavit of defence, a statement of facts was agreed upon between him and the plaintiffs, by a writing filed, to have the same effect as if found in a special verdict by a jury. The facts so agreed upon were in substance as follows:

On February 9, 1873, there was entered of record in the District Court of Philadelphia county a judgment against Samuel C. Bunting, Jr., and in favor of Robert W. Ryerss, upon a bond and warrant of attorney for $8,000, payable in one year from November 4, 1872, with interest thereon payable half yearly. The judgment bond recited the fact that it was accompanied by a mortgage of two lots of ground on Walnut street, Philadelphia. This recital, however, was not noted on the docket entries. The mortgage thus referred to was dated November 4, 1872, and was duly recorded. It was satisfied of record on October 31, 1874, by Frederick B. Vogel, by virtue of an assignment thereof to him from Ryerss, dated September 23, 1874, and recorded October 29, 1874. On the date of that assignment, the judgment in favor of Ryerss was marked to the use of Vogel. It was never marked satisfied. On October 29, 1874, and January 9, February 12 and September 2, 1875, releases of property from the lien of the judgment were filed. On November 15, 1875, the judgment was marked by Vogel to the use of George F. Power. An alias writ of fieri facias was issued on November 20, 1875, and on December 18, 1875, the defendant obtained a rule to open the judgment, with a stay of the execution.

The affidavit upon which said rule was granted, averred that the debt of $8,000 was paid by the defendant to Ryerss, whereupon satisfaction was entered upon the accompanying mortgage; that the judgment ought to have been satisfied at the same time, but that Vogel caused it to be assigned to him without the defendant's knowledge or consent; that, as soon as he learned of this, the defendant objected to it, but Vogel said it was for his protection that the judgment was kept alive, and that when the transaction was closed it would be satisfied, or marked to use, as the defendant might direct; that, in violation of the agreement made and of the defendant's rights, Vogel afterwards marked the judgment to the use of Power, who had no lawful right whatever to hold or control it.

The rule was discharged by the court on February 5, 1876; but on March 18, 1876, by agreement of the respective counsel of the parties, it was reinstated. On May 16, 1877, the rule was withdrawn by agreement filed. A release of certain premises from the lien of the judgment was filed on June 9, 1877.

On June 11, 1875, Ephraim Clark obtained a judgment in the Court of Common Pleas No. 1 of Philadelphia county, against Samuel C. Bunting, Jr., for $12,000, upon which an alias writ of fieri facias was issued January 26, 1877, and one of the lots of ground described in the mortgage of Bunting to Meigs, was levied upon. By virtue of a writ of venditioni exponas, issued in the same case, said lot was sold by the sheriff on March 5, 1877, for $2,600, but, the terms of sale not having been complied with, an alias writ was issued and the lot was again sold by the sheriff on April 2, 1877, Charles D. Clark becoming the purchaser at the second sale. The sheriff made a deed therefor to Clark, which was acknowledged May 12, 1877, and duly recorded.

After argument of the case stated, the court, without opinion filed, entered judgment against the terre-tenant for the amount of the mortgage debt, with interest from June 16, 1878, whereupon the terre-tenant Clark took this appeal, specifying that the court erred:

1. In not entering judgment for the defendant on the case stated.

2. In entering judgment for the plaintiffs on the case stated.

Judgment reversed, and judgment on the case stated for the terre-tenant Clark.

Mr. John G. Johnson, for the appellant:

1. There was no proof that the bond, on which the judgment prior to the plaintiffs' mortgage was entered, had really been paid at the time of the sheriff's sale. On the contrary, there is the strongest presumption that it had not been, arising from the fact that the rule to open the judgment was ultimately discharged by agreement, and the lien of the judgment stands at the present time against Bunting in full force. It will not do to say that the withdrawal of the rule was collusive, inasmuch as its effect was to leave the debtor at the mercy of the judgment creditor, to the extent of upwards of $8,000. Whilst, as between obligor and obligee, a presumption of payment arises from the marking of satisfaction upon the accompanying mortgage, this presumption may be overturned by other evidence. In other words, such marking is evidence of payment, but not conclusive evidence: Fleming v. Parry, 24 Pa. 50; Hughes v. Torrence, 111 Pa. 617; West's App., 88 Pa. 341.

2. Without commenting on what is well known, that in this city it is usual, after a sheriff's sale and the acquisition of title to the mortgaged premises by the mortgagee or by a third person, to clear the title by entering satisfaction upon the mortgage, and that the bond is never supposed to be satisfied thereby, it is sufficient for us to argue that the case of Seiple v. Seiple, 133 Pa. 472, decides nothing more than that after a mortgagee has entered satisfaction upon the mortgage, the burden is thrown upon him to prove that the accompanying bond was not paid. It is unnecessary to discuss the question whether a purchaser at sheriff's sale is bound to look in the recorder's office, to ascertain whether there may not be a mortgage which accompanied the judgment bond marked satisfied; we are willing to be charged with notice of all that could have been ascertained by such an examination at the time of the sheriff's sale.

3. Nor is it necessary to ask the court to say whether the decision in Patterson v. Given, 15 Phila. 347, that an intervening mortgage will not be divested, if the purchaser at the sale was the owner of the judgment prior thereto and knew that it had been paid, is correct. If necessary, we would contend that that case was not well decided, because the effect of a sheriff's sale must not be made to depend upon the person of the buyer, as, if all buyers are not under the same rule of divestiture or nondivestiture, there can be no certainty in the bidding and the debtor will suffer. All that we need to contend for is that the existence of a dispute as to the fact of payment of the prior judgment, will not prevent the divestiture of an intervening mortgage. Nothing more appears in the present case than that there was such a dispute. Must the buyer, obliged to act at once, take the chance of the ultimate decision of such a dispute? If the prior judgment lien be valid on its face, and be not marked paid, it stands on the record as a lien, and all the incidents of such lien must follow.

4. At common law, a sheriff's sale divests all liens. The Meigs mortgage was not prior to all other liens, but was subsequent to a judgment not marked paid and about the payment of which there was a dispute, as the record disclosed. The result of this state of the record was that the act of April 6, 1830, P.L. 293, saving from divestiture mortgages prior to all other liens, except other mortgages, etc., did not apply, and the common-law effect of divestiture followed the sale. This court has frequently expressed its judgment as to the vital necessity of making the record the sole test by which to determine the effect of sheriffs' sales: Reading v. Hopson, 90 Pa. 497; Harper's App., 4 W.N. 49; Coyne v. Souther, 61 Pa. 457; Magaw v. Garrett, 25 Pa. 322; Goepp v. Gartiser, 35 Pa. 133. In conclusion, we appeal to the recent case of Saunders v. Gould, 134 Pa. 446, holding that if the fact of payment is not shown by the record, and is unknown to the purchaser, the mortgage will be divested.

Mr. William M. Meigs and Mr. John Samuel, for the appellees:

1. The case of De Witt's App., 76 Pa. 283, very positively charges the defendant Clark with all that he would have learned from an examination in the office of the recorder of deeds, and notice of everything appearing upon the record of the prior judgment, in favor of Ryerss, is fixed upon him by the decisions in Kirk's App., 87 Pa. 243; Cohen's App., 10 W.N. 545; Goepp v. Gartiser, 35 Pa. 130. We do not contend that the mere taking of a rule to open renders a judgment of no effect, but we do contend and the cases decide that persons interested are required to make inquiry as to the truth of the facts stated in the affidavit on which the rule is granted: Griffiths v. Sears, 112 Pa. 523; Biddle v. Tomlinson, 115 Pa. 299; Cohen's App., supra; Parke v. Neeley, 90 Pa. 52. And see further, as to notice, Miller v. Fluck, 26 W.N. 213; Patterson v. Given, 15 Phila. 347.

2. Clark knew, then, when he purchased the property, that the judgment was a fraud and a sham, owned and controlled by the defendant Bunting, for his own purposes. Not only was this set forth by Bunting's affidavit, but the collusion by which the judgment was kept open was indicated...