This section is from the book "The Law Of Real Property and Other Interests In Land", by Herbert Thorn Dike Tiffany. Also available from Amazon: A Treatise on the Modern Law of Real Property and Other Interests in Land .
71. Rawson v. Plaisted, 151 Mass. 71, 23 N. E. 722.
72. Williams v. Baker, 62 N. J. Eq. 563, 51 Atl. 201 claim to judgment and enforce it by execution against the mortgaged property.73
Execution for mortgage debt. The levy, upon the mortgaged property, of an execution under a judgment against the mortgagor for the mortgage debt, has usually been regarded as operating oppressively upon the mortgagor since, while a sale under such a levy deprives him, at the mortgage creditor's option, of the right of redemption from the mortgage,74 the circumstances of such a sale, and the frequent uncertainty as to what actually passes thereunder, are calculated to deter persons other than the creditor from bidding at the sale, the mortgagor thus being deprived of his interest in the land, the equity of redemption, without securing the value thereof or an adequate credit upon the mortgage debt. In some jurisdictions there is a statutory prohibition of such a levy and sale,75 in some it will be enjoined by a court of equity,76 and in some the sale is regarded as absolutely nugatory, the rights of the mortgagor and mortgage creditor being unchanged thereby.77
In a number of jurisdictions, an execution sale of the mortgaged property under a judgment for the mortgage debt, is regarded as effective to divest the since he has already been paid from the proceeds of the execution sale, and (lie previous owner of the land, against whom the execution was issued, having been, by the execution sale, divested of his interest, payment cannot be made to him as such owner.81 The only alternative would seem to be to regard such former owner, the mortgagor or his transferee, as subrogated to the rights of the mortgage creditor, to the extent to which the mortgage debt was paid by the execution sale of his interest, so as to obtain reimbursement from the purchaser.82 Otherwise, the purchaser would be relieved from paying the mortgage debt, subject to which he purchased. If, on the other hand, the view is adopted that the purchaser takes subject to the mortgage lien only to the extent that the debt secured thereby is not extinguished by the payment made by him on the execution sale, the incumbrance diminishes as the bid is increased, so long as this latter does not exceed the mortgage debt as previously existing, so that, up to that point, it is immaterial what one bids,83 while any greater bid is in effect for the property free from the lien, as the debt is to be paid out of the amount realized on the sale. Under such a view, the confusion and uncertainty which might naturally exist in a possible purchaser's mind, as to the effect of the amount of his bid upon the amount of the incumbrance to which the purchase is subject, would tend to prevent bidding by persons other than the mortgage creditor, and so operate injuriously to the mortgagor.84 Moreover, if the bids are made on the theory that the sale will be subject to the mortgage lien as it before existed, and yet the mortgage debt is in fact diminished by the mortgagor's interest, but different views have been expressed as to the operation of the sale in other respects. Occasionally the purchaser has been regarded as taking title free from the mortgage lien, the execution sale being thus equivalent in effect to a foreclosure sale under the mortgage, and the lien being extinguished by the sale.78 Under such a view, the mortgage creditor, by having the execution levied on the mortgagor's interest in the land, in effect waives his lien thereon. Such a view has been expressly dissented from in at least two jurisdictions,79 and in others there are adjudications to the effect that the jourchaser at the execution sale acquires the "equity of redemption" only, that is, that he takes subject to the mortgage lien.80 Conceding that he does take subject to the mortgage lien, the question then presents itself whether he takes subject to the lien as it existed before the sale to him, or whether what he pays on the sale is to be applied in reduction of the mortgage debt and the lien incident thereto. If the purchaser is regarded as taking the property subject to the mortgage lien as it existed before the sale, without any reduction in the mortgage debt by reason of the payment made by him on the execution sale, there is a difficulty as to the person to whom the mortgage debt is eventually to be paid. It cannot well be paid to the mortgage creditor,
73. Seaman v. Hax, 14 Colo. 536, 9 L. R. A. 341, 24 Pac. 461; Cushing v. Hurd, 4 Pick. (Mass.) 253, 16 Am. Dec. 335; Walters T. Defenbaugh, 90 111. 241.
74. See Atkins v. Sawyer, 1 Pick. (Mass.) 351, 11 Am. Dec. 188; Camp v. Coxe, 1 Dev. & B. (N. C.) 52.
75. See Delaplaine v. Hitchcock, 6 Hill (N. Y.) 14; Gale v. Hammond, 45 Mich. 147, 7 N. W. 761; Boone v. Armstrong, 87 Ind. 168.
76. Carpenter v. Bowen, 42 Miss. 28; Tice v. Annin, 2 Johns.
Ch. (N. Y.) 125; Van Mater v. Conover, 18 N. J. Eq. 38; see Lydecker v. Bogert, 38 N. J. Eq. 136.
77. Powell v. Williams, 14 Ala. 476, 48 Am. Dec. 105; Barker v. Bell, 37 Ala. 358; Atkins v. Sawyer, 1 Pick. (Mass.) 351, 11 Am. Dec. 18S; Camp v. Coxe, 1 Dev. & B. (N. C.) 52; Simpson v. Simpson, 93 N. C. 373. That this is so when the mortgage creditor himself purchases at the execution sale, see Lumley v. Robinson, 26 Mo. 364; Young v. Ruth, 55 Mo. 515.
78. Youse v. McCreary, 2 Blackf. (Ind.) 243; Crooker v. Frazier, 52 Me. 406; Lord v. Cro-well, 75 Me. 399; Fosdick v. Risk, 15 Ohio, 84, 45 Am. Dec. 562. But see Fithian v. Corwin, 17 Ohio St. 118; Horbach v. Riley, 7 Pa. 81; Day v. Lowrie, 5 Watts (Pa.) 412. See Waller v. Tate, 4 B. Mon. (Ky.) 529; Matthews v. Eddy, 4 Ore. 225. But if the sale was under a judgment on a part only of the notes secured by the mortgage, it could not, it seems, affect the right of another person, holding the balance of the notes, subsequently to foreclose. Pugh v. Fairmont Gold & Silver Min. Co., 112 U. S. 238, 28 L. Ed. 684.
79. Ireland's Lessee v. Hall, 10 Johns. (N. Y.) 481; Rice v. Wil-burn, 31 Ark. 108; Whitemore v. Tatum, 54 Ark. 457.
80. See McClure v. Mounce, 2 McCord L. (S. C.) 423, and cases cited in next following notes.
81. Goring's Ex'r v. Shreve, 7 Dana (Ky.) 64.
82. Tice v. Annin, 2 Johns. Ch. (N. Y.) 125; Lumley v. Robinson, 26 Mo. 364.
83. Tice v. Annin, 2 Johns. Ch.
(N. Y.) 125; Goring's Ex'r v. Shreve, 7 Dana (Ky.) 64.
84. Van Mater v. Conover, 18 N. J. Eq. 38; Lumley v. Robinson, 26 Mo. 364.
Amount of the bid, the effect may be that the mortgagor will get nothing for his interest in the land, while the purchaser will obtain a credit on the incumbrance to which he is not entitled.85
If the mortgage creditor himself is the purchaser at the execution sale, the effect of the sale might possibly be different from its effect when a stranger is the purchaser. It has been decided in one state that, whatever might be the effect of a sale to another, by a sale to the creditor he acquires the absolute title free from the mortgage,86 while in another state a sale to him has been regarded as nugatory.87 So while in one state such a sale to the creditor has been regarded as effecting a total extinction of the debt,88 in another it has been held to extinguish the debt only to the amount of his bid.89
Even in a jurisdiction in which it has been held that the mortgagor's interest in the land, his "equity of redemption," cannot be levied on under an execution for the mortgage debt, it has been decided that one having a debt secured by a first mortgage can levy on the right of redemption from a second mortgage on the same land.90 And it has, in the same jurisdiction, been decided that execution may be levied on a mortgagor's equity of redemption, in behalf of one to whom the mortgage note has been assigned without the mortgage.91
An execution sale of the mortgaged land under a judgment on part of the notes secured by the mortgage does not affect the right of the holder of others of the notes as regards a proceeding to foreclose.92
85. Carpenter v. Eowen, 42 Miss. 28.
86. Cottingham v. Springer, 88 111. 90.
87. Lumley v. Robinson, 26 Mo. 364.
88. McLure v. Wheeler, 6 Rich. Eq. (S. C.) 343.
89. Lydecker v. Bogart, 38 N. J. Eq. 136.
90. Johnson v. Stevens, 7 Cush. (Mass.) 431.
91. Crane v. March, 4 Pick. (Mass.) 131, 16 Am. Dec. 329; Andrews v. Fiske, 101 Mass. 422.
92. Pugh v. Fairmont Gold &