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Martin v. Wagener.
does not militate against this position, or indeed touch it in any point. The incumbrances upon the property in that case were against the common ancestor, not as in this case against one of the co-tenants. It was not a case of voluntary partition. The case arose, and was decided, before the adoption of the Revised Statutes. The interest seems to have been less than the fee, and although the court awarded a partition, it is decided that the law, at that time, did not sanction a judicial sale of that species of common property, and a distribution of the proceeds of the sale among the incumbrances and co-tenants, as was prayed for in that case.
III. In addition to those already adverted to, there are other special circumstauces in the case, imparting cumulative energy to the appellants' equity. 1. The interest, original and acquired, of Russell Martin in the land south of the river, is ample in value to satisfy both judgments, and was made so by the property the appellants parted with as a consideration for the interest they acquired from him. 2. If the appellants' interest is to be sacrificed for the benefit of Clark, they have no redress whatever; Russell Martin's insolvency has precluded them from the possibility of reimbursement. In a case like this, the insolvency of the judgment debtor is the recognized basis of an appeal to the consideration of the court. (Wright v. Austin, 56 Barb. 13. Skeel v. Spraker, 8 Paige, 191.) Clark, however, can lose nothing which he is equitably entitled to, by the enforcement of the Upham judgment against the lands south of the river, for the value of those lands is the best possible indemnity to him.
IV. The equities of the appellants are not affected by the fact that the judgment in favor of the Chautauqua County National Bank, under which Clark acquired title to the lands south of the river, was rendered prior to the conveyance from Russell Martin to them. Clark took no
Martin o. Wagener.
greater equity by his purchase than that which the bank itself had.
V. The provisions of the Revised Statutes, (S$ 70 to 74, art. 3, title 5, ch. 6, part 3,) cited by the referee in his opinion, have no effect whatever upon the question in this case, against the appellants. 1. Those provisions only apply to the case of equities affected by an execution sale that has already taken place, and have no necessary bearing upon questions involved in an action like this, anticipating and providing against a sale. 2. The sole object of the provisions, as clearly appears from the context, and as stated by the revisers, is to give a party, whose property has been sold against his equity, a right to use the judgment, under which the sale took place, for his own indemnity and reimbursement, and for that purpose to prevent its satisfaction. The revisers indeed expressly state, that the statute is not designed to supersede, but to conform to the rules as to priority of right embodied in the unwritten law of the State. So also says the court in the only case in which these provisions are referred to, (James v. Hubbard, 1 Paige, 228.) 3. The statute itself comprehensively and expressly recoguizes the unwritten law as the rule of construction, and is far from imperatively embodying the theory that time is the test of priority. Section 70 enacts that when the whole of a judgment " or more than a due proportion thereof, shall be levied upon the lands" of a party, he may compel a contribution from other lands. The words italicised, taken in connection with the context, clearly imply that the lands of such party may, for some special reason, be liable primarily upon the common incumbrance, even as against subsequent grants or incumbrances. 4. That the statute does not exclude the modification of the time rule by the interposition of other equities, will appear from another consideration. If a judgment debtor, owuing several parcels of realty, should alienate one parcel under a deed containing the express provision
Martin v. Wagener.
59 446 62552 63 10 46a ile 47a 418
that the grantee should pay the judgment, and should afterwards convey the other parcels to different purchasers, can it be contended that the statute would confer upon the first grantee the right to levy contribution against the other purchasers, or prevent them from insisting that his parcel should be first resorted to under the judgment. Again; can it be claimed, as the true construction of the statute, when it uses the term “conveyance," that the rights of a party, who purchases by contract and afterwards takes a deed, are governed by the date of the deed itself, and not by the date of the contract.
Third. If the second proposition is sound, it follows, as an inevitable deduction, that the interest acquired by the appellants from Russell Martin, have by the act of the respondent, Mrs. Wagener, been exempted from liability on the Upham judgment, and she has precluded herselt from enforcing it against that interest.
I. The appellants, by their transaction with Russell Martin, became, in equity, his sureties in relation to this judgment, and were entitled to vindicate their equitable right as such, by an action instituted for that purpose in advance of a sale under the judgment, or, in the event of a sale of their interest under it, to be subrogated to it, as a means of reimbursement out of the land south of the river. (Eddy v. Traver, 6 Paige, 521. Marsh v. Pike, 10 id. 595. Clowes v. Dickinson, 9 Conn. 402. Hayes v. Ward, 4 John. Ch. 122. Ferris v. Crawford, 2 Denio, 595. Vartie v. Underwood, 18 Barb. 561. Tisdale v. Jones, 38 id. 523.)
II. The value of the interest of Russell Martin, in the land south of the river, acquired from the appellants, was, as found by the referee, amply sufficient to satisfy this judgment, and was the only means of indemnity and reimbursement available to the appellants.
III. If, as the referee has decided, and is probably the fact, the contract executed by Mrs. Wagener to the defendant Clark, at the time she took the assignment of the
Martin v. Wagener.
judgment, was binding upon her, and consequently upon whomsoever should succeed her under it, whether by subrogation or otherwise, it operated as an utter destruction of the judgment as a means of security or reimbursement to the appellants, and therefore, within well established and unexceptionable rules of law, precludes her from resorting to the property of the appellants. (3 Kent's Com. 124, marg. Guion v. Knapp, 6 Paige, 35. Stuyvesant v. Hall, supra. James v. Hubbard, supra. Pitts v. Congdon, 2 Comst. 352.)
IV. It is a matter of no importance that Mrs. Wagener executed this contract without actual notice of the appellants' equities. 1. Notice is never exacted where it is intrinsically impossible to be given. The appellants had no available means of affecting her with actual notice, for they could not anticipate that she contemplated purchasing the judgment, or that if she did purchase it, she would be required to, or would, enter into such a contract. They had no more reason to suppose she designed to buy it, than that any other citizen of the United States would do so. 2. As all the contracts and conveyances that evidenced their equities, were on record at the time she entered into the contract, she was affected by constructive notice, the only notice, indeed, that could be given to any purchaser of the judgment. 3. Her position did not, in any view of the case, entitle her to notice, or call for the exercise of any diligence on the part of the appellants to give her notice, even if any degree of diligence in that direction would have resulted in giving it. She was in no sense within the rule which exempts the owner of the incumbrance, who, in good faith and without notice of an equity subsequent to his incumbrance, releases a part of the incumbered property to the prejudice of that equity, from responsibility to the person in whose favor the equity exists. The reason of the distinction between the two cases is obvious. In the one case the owner of the equity knows, or is bound to know, and can always ascertain, who and
Martin v. Wagener.
where the owner of the incumbrance is, and has the power to affect him with notice. Not so, however, with the purchaser of an incumbrance. No amount of diligence can identify him in advance of his purchase. It is only after the fact is accomplished that he is ascertainable. 4. The purchase by Mrs. Wagener of the Upham judgment was the purchase simply of a chose in action, and she took the assignment of it burdened with all the equities pertaining to it in favor of the appellants, whether she had notice of those equities or not. (Ely v. McNight, 30 How. 97. Westfall v. Jones, 23 Barb. 9. Mickles v. Townsend, 18 N. Y. 575. Bush v. Lathrop, 22 id. 535, and cases there cited.
Hartley v. Tatham, 1 Keyes, 222. Blydenburgh v. Thayer, 3 id. 293.)
Fourth. If the contract of Mrs. Wagener did not have the effect of exonerating the appellants' property from the judgment, it was void as to the appellants, as being an apparent obstruction to the vindication of their rights; and they are entitled to judgment, postponing a sale of their interest to that of the land south of the river, under the judgment, there is no principle of equity that would prevent the court from declaring it void. 1. It was a fraud upon the appellants. 2. It was a fraud upon Mrs. Wagener, if she made the contract in good faith, and without notice, because its effect was, if carried out, to prevent her from enforcing a judgment, for which she paid value, against the only property liable upon it. 3. Clark had, or was bound froin his situation to have, full knowledge of the condition and rights of all the parties in interest. He purchased the lands south of the river under the judgment in favor of the bank, and could not avoid understanding by what means the interest of Russell Martin, thus acquired by him, had been made three sevenths instead of one seventh. He had owned the Upham judgment ever since July 1867. All the elements of information were within his own hand, and that he had availed himself of them is proved by the fact, that he exacted the contract in question from