Donk Bros. v. St. Louis Glucose & Grape Sugar Co. , 17 Ill. App. 369 ( 1885 )

Pillsbury, P. J.

The assignee of Heyer held the property assigned charged with the attachment liens of Donk Bros. & Co. and the appellees, and the St. liOuis court ordered him to sell subject to all incumbrances, which he did, and reported the sale to the court, which was approved.

At the sale actual notice was given by the attorney of appellees of the levy of their attachment writ upon the property then offered for sale, and it was purchased by Lovingston, Marshall and Lubke, as trustees for appellant company, although not then organized, but in contemplation, and upon its organization the trustees executed their trust by conveying to it.

The property being offered for sale, and sold expressly subject'to all incumbrances, and the purchaser having notice of the particular liens then existing against it, we think the presumption must be indulged—nothing further appearing— that the amount of these liens was taken into consideration by the purchaser jin fixing the amount to be paid for the interest acquired, and that, the price paid was a sum which, in the judgment of the buyer, did not exceed the value of the property less the incumbrances. Atherton v. Toney, 43 Ind. 211; Thompson, adm’x, v. Thompson, 4 O. S. 349; Mathews v. Aiken, 1 Comst. 595; Kinnear v. Lowell, 34 Me. 302; 1 Jones on Mort., § 736.

Purchasing the property in this manner, it became in the hands of appellant company the primary fund between all the parties out of wdiich these liens should be discharged (Comstock v. Hitt, 37 Ill. 542; Fowler v. Fay, 62 Ill. 375), as fully as though the grantee had assumed their payment in the deed, this latter assumption by a grantee not having any greater effect to subject the property to such payment than the former, but giving to the lien holder a personal action against the grantee. 1 Jones on Mort., § 736; Sweetser v. Jones, 35 Vt. 317,

In either case, the company, in order to become invested with the entire estate in the property, must see to it that the incumbrances are discharged, and as b etween it and its vendor, the primary duty was cast upon it to do so (Shuler v. Hardin, 25 Ind. 386); and it is said in Cherry v. Munroe, 2 Barb. Ch. 618, where the equity of redemption was purchased subject to an outstanding mortgage, that the purchaser had no legal right to have the mortgage debt charged upon the mortgagor personally instead of charging it upon the land upon which it was charged by the mortgage.

The purchaser of an equity of redemption subject to existing liens is only entitled to what he purchases, and while he may not be personally liable for them payment as he has not promised to pay them, it is his duty to pay them or surrender the property in their discharge; and to allow him to compel his grantor to discharge the incumbrance on the ground of a personal liability for the debt would- in effect invest him with the entire estate free from all liens when he took, it specially charged therewith. The injustice of such a proceeding is so apparent that courts of equity in eases where the lien creditor has enforced payment of the debt thus charged upon the land from the mortgagor have not hesitated to subrogate him to all the rights of the creditor by considering him as the equitable assignee of the mortgage lien, and thus permit him to subject the premises to sale to reimburse him for such payment. Kinnear v. Lowell, supra; Baker v. Terrell, 8 Minn. 195; Tice v. Amine, 2 Johns. Ch. 125; Yerris v. Crawford, 2 Denio, 598; Mathews v. Aiken, supra.

A grantee, therefore, under such a sale to him, can not, by paying the lien creditor the amount of the incumbrance, take an assignment of the debt to himself and hold it as a valid claim against his grantor, nor use it as a set-off in an action by the vendor for the purchase money (Shuler v. Hardin, supra); and having become the owner of the lien and as between him and his vendor the primary obligation, if he would save his purchase, resting upon him to pay the debt the law treats the assignment to himself as a payment of the debt and the land discharged therefrom. Converse v. Cook, 8 Vt. 164; Lilly v. Palmer, 51 Ill. 331; Williams v. Thurlow, 31 Me. 392; Tice v. Amine; Baker v. Ferrell; Atherton v. Toney, supra.

So where land is conveyed subject to two liens of which the vendee is advised and makes his price accordingly, he can not take an assignment of the senior one and retain it to the prejudice of the junior. Converse v. Cook; 1 Jones on Mort., supra.

Applying the foregoing principles to the facts of this case the questions involved are not difficult of solution. The appellant company bought the property expressly subject to the claims of these attaching creditors, and the property was charged with their payment, and it was incumbent upon it to discharge such liens if it would save its purchase. ¡Recognizing the position in which it stood, as soon as Donk Bros. & Co. obtained their judgment and the amount of their lien judicially ascertained, an assignment of the judgment was procured from Donk Bros. & Co. to Metcalf, a member of the company, who afterward assigned the same to the company for the nominal consideration of ten dollars and re1 eased to it any right or lien he had to any of the property attached. Ho attempt was thereafter made to assert any right under said judgment, and none would probably ever have been asserted if the buildings and fixtures purchased had not been destroyed by fire, thus materially reducing the value of the property purchased; but the rights of the parties became fixed prior to such loss and must be determined irrespective of it.

In my opinion the assignment of the judgment to the company—it at the time having control of the fund primarily charged with ¡its payment—operated as an extinguishment of it and a dissolution of the attachment, and thereafter the company held the property discharged of any lien arising therefrom, and could not keep it alive to the prejudice of appellees, whose claim upon the property was of equal dignity as that evidenced by the judgment purchased. Strout v. Natoma Co., 9 Cal. 78, and cases above cited.

Being equitably bound to pay both liens, and having paid one in the manner above stated, it had the effect of leaving all the property attached by appellees subject to the payment of their judgment; and it being equitable that as against the company they should be paid in full, as the company ought to have paid it upon rendition of judgment, no error is perceived in the action of the court in so ordering the funds in court applied, and the order will be affirmed.

Order affirmed.