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Frost v. Yonkers Savings Bank.

CTION by the owner of a fourth mortgage to restrain the defendant from selling premises under judgment of foreclosure of an older mortgage, and for leave to redeem, etc. The opinion states the facts. The plaintiff had judgment on the point in question, which was reversed by the General Term, and he appealed.

Samuel A. Noyes, for appellant.

Matth. H. Ellis, for respondent.

EARL, J. [After deciding another point.] There was a judgment against the mortgagor, owned by Prime, which was older than either of the mortgages; and Lawrence, who then owned the fourth mortgage, desired to sell the same to plaintiff, who objected on account of the prior lien of the judgment. He then, for the purpose of inducing plaintiff to take his mortgage, procured from Prime a written instrument, whereby he agreed with him, Lawrence, that the lien of the judgment should. be postponed, and should be considered subsequent to the mortgage. Thereupon Lawrence assigned the mortgage to the plaintiff; thereafter Prime caused an execution to be issued upon his judgment, and the mortgaged premises to be sold thereon. At the sale the premises were purchased for the defendant, and a sheriff's certificate of sale was given to it. It had no notice of the agreement postponing the lien of the judgment until after the purchase at the execution sale. After all this it commenced the foreclosure of its mortgage. Upon these facts the defendant claims that the plaintiff was not entitled to redeem from and have an assignment of the mortgage, without also paying up and redeeming from the sheriff's sale upon the execution.

The referee decided against this claim, and also decided that the lien of defendant, under the sheriff's certificate, was subsequent to the plaintiff's mortgage, and whether the referee decided correctly or not, depends upon the effect of the agreement between Prime and Lawrence.

It is not disputed that the agreement was good between the parties thereto. There is no reason why plaintiff, as assignee, may not have the same benefit of the agreement which Lawrence could have had. Lawrence made the agreement for the benefit of his mortgage. Its purpose was to fix the relative position to be occu

Frost v. Yonkers Savings Bank.

pied by the two securities, and it affected and attached itself to the securities whoever owned them. The agreement made the mortgage the senior security, and its character as such was not destroyed by its sale to the plaintiff.

If Prime had become the purchaser at the sheriff's sale, it is not disputed that his title would have been subsequent to the mortgage. His general lien under the judgment would have been converted into a specific lien on the real estate covered by the mortgage. A purchaser at an execution sale can get no better title than the judgment actually gives him. If a If a judgment has been satisfied, although not cancelled of record, even a bona fide purchaser under an execution issued upon the judgment will get no title. Wood v. Colvin, 2 Hill, 566; Carpenter v. Stilwell, 11 N. Y. 61; Merrill, 14 id. 456.

Craft v.

The docket of a judgment is not for the protection of purchasers under the judgment. It is for the benefit of the judgment creditor and the protection of purchasers from the judgment debtor. The sole purpose of an execution is to enforce a judgment for just what is due, and no more. An execution and the sheriff are instrumentalities provided by law, by which a judgment creditor enforces his judgment, and the sheriff can give no better title or greater right by a sale on an execution than the judgment creditor could give, if he were allowed to seize property and sell by virtue of his judgment without an execution. If the judgment is void or has been paid, the purchaser takes nothing. The rule of caveat emptor applies to every purchaser at a sheriff's sale, of either real or personal property, by virtue of an execution. He buys at his peril, and if by any valid agreement the judgment has lost its apparent position as a lien upon real estate, his lien under his purchase is just that which the judgment creditor had. It is true that thus purchasers at sheriff's sales may sometimes be misled, but the courts have ample power usually in such cases to relieve them.

It was no more necessary for Armstrong to record this agreement than it would have been to have recorded a written discharge or satisfaction of the judgment, if he had paid it to protect himself against a subsequent sale under the execution. The recording act has nothing to do with the case.

The plaintiff is in no way estopped. He did nothing to induce the defendant to purchase. It does not even appear that he knew of the sale and purchase under the execution at the time they trans

Frost v. Yonkers Savings Bank.

pired. He was not bound to give defendant notice of the agree ment or to record it.

We conclude, therefore, that the judgment was postponed to plaintiff's mortgage, and that he had the right to redeem from defendant's mortgage, and have the same assigned to him without also paying or redeeming from the judgment, and that the decision of the referee was right.

The order of the General Term, so far as it reverses the judg ment entered upon the report of the referee, must be reversed, and that judgment affirmed; and so far as it affirms that judgment it must be affirmed, neither party to have costs upon the appeal to this court.

All concur, except ALLEN, J., not voting.

Judgment accordingly.

CASES

IN THE

SUPREME COURT

OF

MASSACHUSETTS.

LOCKE V. LEWIS.

(124 Mass. 1.)

Partnership — sale by partner of partnership goods in payment of his private

debt.

Where a partnership has so intrusted one partner with the partnership goods that he is enabled to deal with them as apparently his own, and to induce the public to believe them to be his, a sale by him of such goods, in pay. ment of his private debt, to one who has no knowledge or notice that they are partnership goods, is valid as against the partnership and its creditors.

EPLEVIN. The opinion states the facts. fendant, and plaintiffs excepted.

T. H. Sweetser & F. A. Worcester, for plaintiff.

D. S. Richardson & L. Wallace, for defendant.

Verdict for de

GRAY, C. J. This case presents an important question of the law of partnership, which has been several times argued, and has received great consideration from the court. The apparent conflict in the cases cited at the bar, changes in the court, doubts entertained by some of the judges, the consequent necessity of

Locke v. Lewis.

making a full examination of the authorities upon the subject, and the pressure of other duties, have delayed the judgment to the present time.

The case, briefly stated, is as follows: It is replevin of three carriages. In September, 1870, a copartnership previously existing between the plainttff and Isaiah L. Robinson and his son Daniel C. Robinson, in the business of manufacturing carriages at Nashua in the State of New Hampshire, was dissolved, the plaintiff left the firm, and the Robinsons gave him their promissory note for the balance of his unpaid interest therein, and formed a new firm under the style of I. L. Robinson & Son, and continued the business at the same place. In October, 1870, the two Robinsons formed a limited partnership, under the laws of New Hampshire, under the name of I. L. Robinson & Co., with Chase, Parkinson and Greeley, in which the Robinsons were general partners and the other three were special partners. In February, 1871, the Robinsons sold the carriages in question to the plaintiff in payment of their note to him, and he gave the note up to them. The plaintiff's testimony tended to show that he bought the carriages in good faith, that he thought two of them were the same that the old firm had on hand when he sold out to the Robinsons, and that he did not know that the limited partnership existed or was carrying on business, or that any one but the Robinsons had any interest in the carriages sold to him. The defendant, a deputy sheriff, afterward attached the carriages on mesne process against all the partners in the limited partnership. The report assumes that the carriages was part of the stock in trade of this partnership; and the single question reserved for our determination is of the correctness of the ruling, under which a verdict was ordered for the defendant, and which was, in substance, that the sale by the two general partners, in payment of their own debt, of goods which were in fact goods of the partnership, but were not known to the creditor to be such, was void as against the partnership and its creditors.

The general partners were clothed not only with apparent but with actual authority to sell the property in question. "The law treats each partner," says Mr. Justice STORY in his Commentaries, "as possessing a dominion over the entirety of the property, and not merely over his own share, and therefore as clothed with all the ordinary attributes of ownership. This doctrine indeed seems