Bayard v. Lombard

THIS case was brought up, by writ of error, from the Circuit Court of the United States for the Eastern District of Pennsylvania.

On the 25th of July, 1845, a judgment was entered on a bond and warrant of attorney, given by Henry M. Bayard to Israel Lombard and Charles O. Whitmore, in the Circuit Court of the United States for the Eastern District of Pennsylvania, upon which a writ of fieri facias was issued, returnable to April session, 1846, which was returned by the marshal for that district as levied on certain tracts of land, the property of the said Henry M. Bayard, in the County of Lancaster, in said district, and which were condemned by the inquisition returned with said writ as not of a clear yearly value beyond all reprises sufficient within the space of seven years to satisfy the debt and damages in the said writ mentioned.

A writ of venditioni exponas was issued, returnable to April session, 1847, upon which the said tracts of land were sold to Ann Caroline Bayard for the sum of $61,200; of which the sum of $60,333.80, being the net amount, after deducting commissions and costs, was agreed to be considered as paid into court.

Upon a motion made on behalf of the Dauphin Deposit Bank, to take out of court the amount of the judgment recovered, on the 28th of August, 1845, by the said bank against the said Henry M. Bayard, in the District Court for the County of Lancaster, for $2,500, James Hepburn, Esquire, was appointed by the court, on the 7th of June, 1847, auditor, to report who are entitled to the moneys so considered as in court, who, on the 20th of September, 1847, filed his report, which directed that the judgments against the said Henry M. Bayard be paid according to their priority, without regard to the court in which they were recovered.

As this report examines a point of great interest to the profession throughout the United States, namely, the extent of the lien upon real estate which is created by a judgment in the Circuit Courts of the United States, and as the report was confirmed by the Circuit Court of the Eastern District of Pennsylvania, it is thought proper to insert it.

'To the Honorable, the Judges of the Circuit Court of the United States for the Eastern District of Pennsylvania.

'The undersigned, the auditor appointed by your honorable court, as per certificate annexed, marked A, with instructions to report who are entitled to the moneys in the said certificate mentioned, as being in court, by the agreement of the parties claiming the same, secured by a sale of the property of the defendant, situated in Lancaster County, Pennsylvania, by an execution directed to the marshal of this district, in the suit of Lombard and Whitmore v. Henry M. Bayard, in this court, respectfully reports:--

'That he gave notice to all persons interested in the matter referred to him, by advertisements published for three weeks in the 'Democratic Union' at Harrisburg, and in the 'Pennsylvanian' at Philadelphia, as directed by the order of court, stated in the said certificate, and as will appear from schedule B, hereto annexed; and that he was attended at the time and place in the said advertisements mentioned, and at the several adjournments of the case, by John M. Read, Esq., who appeared for Lombard and Whitmore, for the use of Haldeman and McCormick; C. B. Penrose, Esq., who appeared for the Middletown Bank; Calvin Blythe, Esq., and W. Harris, Esq., who appeared for the Dauphin Deposit Bank; William H. Rawle and William Rawle, Esquires, who appeared for R. H. Bayard; and Mr. Wilson, President of the Farmers' Bank of the State of Delaware, who attended on behalf of the said bank.

'The execution above mentioned issued from this court in this case of Lombard and Whitmore v. Henry M. Bayard, whose real estate in Lancaster County was levied upon and sold by the marshal of this district to Ann Caroline Bayard, on the 9th day of April, 1847, for the sum of $61,200, subject to a mortgage of $18,000, the marshal's deed to which was acknowledged to the purchaser on the 15th day of April, 1847; and the sum of $61,200, the said purchase-money, is the sum considered in court, and mentioned in the said certificate marked A, and is the subject of reference to the undersigned.

'A list of the judgments hereto annexed, marked C, will exhibit the several claims upon the fund, which are stated in the said list in the order of their dates respectively. The question for examination respects the liens of these judgments; and if the judgments in this court are liens upon the lands of the defendant situated in Lancaster County at the time of the sale, then the judgments are to be paid in the order of their dates, as stated in the list; but if the judgments of this court are not liens on the said lands, then the judgments of Richard H. Bayard, of January 20, 1844, and those of Lombard and Whitmore, of July 25, 1845, and July 29, 1845, are to be postponed as to the fund for distribution.

'The case was submitted to the auditor without argument; and having to depend upon his own research in ascertaining the law involved in the subject of inquiry, the defects that may be apparent in the view of the case now about to be submitted may be the more readily accounted for.

'It would seem that the lien of judgments on the real estate of defendants, obtained in the courts of the United States, was for a long time the subject of doubt. The first case, in point of date, that I have met with, is that of Konig v. Bayard, October term, 1829, 2 Paine's Rep., decided in the Circuit Court of the United States for the Southern District of New York. In that case, it was held that the judgment created a lien upon the lands of the defendant, from the time it was docketed, according to the rule in the State courts; and that the lands of a debtor were liable to be taken in execution after they had passed into the hands of a bon a fide purchaser, by a conveyance subsequent to the judgment, and prior to the issuing of the execution; and the principles upon which the judge founded his opinion may have weight in the present case.

'It was held, 'that the liability of lands to execution in the courts of the United States does not arise from any act of Congress expressly making them so liable, but from the operation of the process acts of 1789 and 1792; the State law upon the subject, being thereby adopted, should be considered as also adopting the effect and operation of the judgment as a lien. The repeated decisions in the courts of the United States, although they have not directly decided the point, had proceeded upon the presumption, that the lien created by a judgment in the United States courts upon land, and the mode of proceeding to obtain satisfaction of the judgments, are regulated entirely by the State laws. That Congress, by the process act, adopted both the form and effect of executions as established by the State laws in 1789. That their form and effect in this State [New York] depended upon the State act of 1787, which requires the sheriff to take the goods and chattels of the defendant, and, if sufficient cannot be found, then to make the debt and damages out of the land, &c., whereof the defendant was seized on the day on which such lands become liable to such debt. That the execution thereupon extends to, and operates upon, the lands of which the defendant was seized on that day; and that this was its effect, which had been adopted by the process act.'

'The next case, in point of time, that I have met with, is that of Tayloe v. Thompson, in the Supreme Court of the United States, 5 Peters, 35, decided in a case taken up under the laws of Maryland. It was contended for the plaintiff in error, that no statute of Maryland authorized the sale of lands for debt, and that the statute of 5 George II., antecedent to the Revolution, was the only legislation upon the subject. That that statute rendered lands in the Colonies subject to execution as chattels, and this only in favor of British merchants; and no execution having issued upon the lands in question before the title to them passed to the plaintiffs, consequently, as in the case of chattels, no lien attached upon the judgment.

'The court, in delivering their opinion, said,-'This statute (5 Geo. II.) has been adopted and in use in Maryland ever since its passage, as the only one under which lands have been taken in execution and sold. It has long received an equitable construction, applying it to all judgment creditors. As Congress has made no law on this subject, the Circuit Court were bound to decide the case according to the law of Maryland; which does not consist merely in enactments of their own, or the statutes of England in force or adopted by their legislation. The adjudication of their courts, the settled, uniform practice and usage of the State, in the practical operation of its provisions, evidencing the judicial construction of its terms, are to be considered as part of the statute, and as such furnishing a rule for the decision of the Federal courts. The statute, and its interpretations, form together a rule of title and property, which must be the same in all courts. It is enough for this court to know that, by established usage, the statute (5 Geo. II.) has been acted on and considered as applying to all judgments in favor of any person; and that sales made under them have been held valid as titles. Though the statute does not provide that the judgment shall be a lien from the time of its rendition, yet there is abundant evidence that it has always been so considered, and so acted on.' And the judge concludes by saying, that there was 'no doubt that the courts of Maryland had decided it as a rule of property from the earliest period, that a judgment is a lien per se on the lands of the defendant.' And, therefore, the lien of the judgment in the Circuit Court was sustained from the date of its rendition.

'In the case of the Manhattan Company v. Evertson, 6 Paige, 465, the question that bore upon the doctrine of lien depended upon the question, whether a judgment in the United States Circuit Court for the Southern District of New York was a lien upon lands lying within the Northern District of the same State; and in delivering his opinion the Chancellor says,-'There is no act of Congress making a judgment in a court of the United States a lien on lands, either within the general territorial jurisdiction of the court, or elsewhere. The existence of such a lien must therefore depend upon the local law of the State where the land is situated upon which such a lien is claimed.

"By the common law, a freehold could not be reached by a judgment, except in the case of an heir, upon a judgment bond, or other specialty. The statute of 13 Edward I., which gave the writ of elegit, by which one half of the land of the judgment debtor might be taken in extent, did not, in terms, create a lien, so as to prevent a sale by the debtor before execution; but the uniform construction of the statute has been, to give such a lien, from the entry of the judgment, upon the lands which could be reached by the process of the court. And when the British statute of 5 George II., ch. 7, subjected lands in the Colonies to sale on execution, the same principle was adopted in the Colony of New York, and in most of the Colonies, as to the lien of the judgment upon real estate which might be thus sold; and this lien was held to extend to all freehold lands which could be reached by an execution out of the court in which the judgment was entered. And when a judgment was removed from an inferior into the Supreme Court, and there affirmed, such judgment became a lien upon all lands of the debtor throughout the State, from the time of the docketing of the judgment in the Supreme Court. Such was the state of the law here [New York] at the time of the Revolution.

"The act of 1787, which was substituted in the place of the British statute subjecting lands to execution, recognizes the existence of such lien in the form of the execution which is directed by the statute to be issued against the lands of the debtor, as the sheriff is directed, in case the personal estate is insufficient to pay the judgment and costs, to levy the same on the lands and tenements whereof the judgment debtor was seized on the day the lands become liable, or at any time afterwards.

"And that a judgment of a court of the United States is a lien upon the real estate of the debtor, in accordance with the local law of the place where the land lies, is settled by the Supreme Court. 5 Peters, 358.

"Upon the principle which has been adopted by Congress, and by the Supreme Court of the United States, the legal effect of a judgment as a lien upon the real estate of a defendant, whether such judgment is rendered in a court of the State or in a Federal court, where no direction on the subject has been given by the sectional legislature, must necessarily be governed by the local law, although the mode of proceeding to enforce such lien, where it exists, may not be the same in the courts of the State and Federal courts. I have no doubt, therefore, that the lien of a judgment recovered in one of the Circuit or District Courts of the United States, within the limits of this State, is a lien upon the lands of the debtor lying within the territorial jurisdiction of such court, for the term of ten years from the docketing of such judgment, in the same manner that a judgment of a court of record in one of the State courts is a lien.

"And the only difficulty is in determining whether the lien, according to the true principle of the local law, extends to all lands which may be reached by the execution of the court, or only to such as are within the territorial jurisdiction to which the original process of such court extends.' And the Chancellor concluded by saying, 'but with some hesitation, that a judgment recovered in the Circuit Court, in either of the districts, is a lien upon real property lying in any part of the State within which the Circuit Court is held.' And he added, that, if a county court were authorized to issue execution throughout the State, the principle of the local law would extend the liens of the judgments thereafter recovered throughout the State; that such was the construction of Virginia, permitting execution upon a judgment in a local court to be issued to other counties; and cited 2 McCall, 186.

'In the case of Konig v. Bayard, heretofore referred to, the same doctrine is held, that the lien of a judgment upon the lands of a defendant existed by virtue of the right to take it in execution and sell it in satisfaction of the debt.

'The case of the United States v. Morrison, 4 Peters, 124, was taken up to the Supreme Court of the United States by appeal from the Circuit Court for the Eastern District of Virginia. The Chief Justice, in delivering the opinion, says,-'In Virginia there is no statute which, in express terms, creates a lien upon the lands of the debtor. As in England, the lien is a consequence of the right to take out an elegit. Different opinions seem to have been entertained of the effect of any suspension of the right. By the construction of the Circuit Court, the party who sued out a ''fi. fa. could not resort to an elegit until the remedy on the fi. fa. was shown by the return to be exhausted'; that is, that the lien was suspended until the return of the fi. fa.'', and the adverse right, having attached in the mean time, was preferred to that claimed under the judgment.

'But soon after the judgment in the Circuit Court, and before the case came up to be heard in the Supreme Court, the Court of Appeals of the State decided that the right to take out an elegit was not suspended by suing out a ''fi. fa.'', and consequently, that the lien of the judgment was continued pending the proceedings on that writ. And upon the ground of this decision of the Court of Appeals, establishing the law of the State, the judgment of the Circuit Court was reversed, and the cause remanded; the Chief Justice observing, that 'this court, according to its uniform course, adopts that construction of the act which is made by the highest court of the State.'