Commercial Bank of Manchester v. The Coroner of Yazoo county, 6 Howard 530

Mr. Chief Justice Sharkey delivered the opinion of the court. It appears by the record in this case, that twelve executions were placed in the hands of the coroner, and by a levy and sale under one of them, he received the sum of thirty eight hundred dollars. The several executions are not set out at length in the bill of exceptions, and therefore constitute no part of the record, and still if the judgment is erroneous on its face it must be reversed.

It appears by the recital to the judgment, that the money was -made by a levy and sale under the plaintiff’s execution, but instead of adjudging it to the plaintiffs, the court ordered the money to be distributed amongst the several claimants, according to the priority of judgments on which the executions had issued. To this the plaintiffs excepted. The question here presented was virtually settled by the decision at the present term in the case of Thomas Andrews v. Doe ex dem.

Wilkes, in which case if was held, that a prior judgment lien is entitled to priority of satisfaction, and that a sale under a junior judgment does not divest the lien of the elder. A younger judgment creditor has a right to sell, but he sells subject to the prior lien, and he sells nothing but an incumbered property- As he does not interfere with the prior lien, he is of course entitled to whatever his execution may bring. Having a right to sell, he is entitled to the fruits of that sale. The older lien is always protected without the aid of the court.

Purchasers buy with a view to it, and it is scarcely presumable that they will give more than the worth of an incumbered estate; and why divest the younger judgment creditor of the product of that which he has a right to sell, and apply it to the extinguishment of a lien which is not affected in any way by the sale? Wherever the law protects the sheriff’s vendee who buys under a junior lien, it also protects the prior lien by appropriating the money to its extinguishment; and it is on this principle alone that such interposition can be justified.

But here we have seen that the law does not protect the purchaser under a junior judgment; he is a purchaser with notice, and takes subject to the prior lien, hence the reason for such an appropriation of money by the court fails. It would be a folly to say that the younger judgment creditor has a right to sell, but that he is not entitled to the fruits of that sale when it injures no one. If the elder liens were thereby divested, then there would be a propriety in satisfying them in their order of priority, as far as the money would do so, but they are not divested nor disturbed.

The proposition is undoubtedly clear, that a junior judgment creditor may levy on property which is incumbered by an elder judgment. For what purpose may he sell? Is it merely for the purpose of aiding the elder judgment, by having the proceeds applied to extinguish it? If this be all, the proceeds of property which was liable to be sold under his execution, would not be liable to the satisfaction of that execution. What signifies the naked power to sell, without any power of the proceeds. The language of Judge Story, in the case of Conrad v.

The Atlantic Insurance company, 1 Peters, 443, will illustrate this position. He says, that a general lien on land by judgment does not per se constitute a right of property, but it confers a right to levy to the exclusion of adverse interests subsequently acquired; and when the levy is made, the title relates back to the judgment, and cuts out intermediate incumbrances.

Subject to this, the debtor has power to sell, or “it may be levied upon by any other creditor, who is entitled to hold it against every other person except such judgment creditor, and even against him unless he consummates his title by a levy on the land under the judgment. In that event the prior levy is as to him void, and the creditor loses all right under it.” If this be the law, it presents two important questions.

If under the junior judgment a levy and sale may be made which will hold the property even against the elder judgment, unless it be consummated, how can the proceeds of such sale be applied to an unexecuted lien? Suppose the plaintiff should become the purchaser at the sale under his junior lien, which he has a right to do, without payment of money if his claim be equal in amount to the sum bid, would the court notwithstanding order him to pay the money into court, so that it might be applied to the older lien?

We cannot think that to do so would be either just or legal; as if the amount was not sufficient to extinguish the prior lien, the elder judgment creditor might again sell, and thus the first purchaser would lose his property, his debt, and the amount paid into court. But if a levy and sale be absolutely void as to the older creditor, how can he claim the benefit of it? Being void as to him, it must also be unproductive. If he can claim the benefit of a sale, it surely must be on the ground of protecting his prior lien.

This is undoubtedly the reason which gave rise to the appropriation of money made under execution. It was a rule of policy adopted by the courts for the purpose of protecting purchasers at sheriff’s sales. The reason of the rule does not hold here, and neither can the rule itself. The court, therefore, evidently erred in appropriating money which had been made by a sale under the execution of the plaintiffs in error to the payment of older judgments, which were not at all affected by that sale.

If the sheriff had levied all the executions, as he should have done, then if a doubt had arisen in reference to the rights of parties, it would have been proper for the court to have made the appropriation. The judgment must be reversed, and the cause remanded.