¶1It will not be necessary to set out the pleadings in this case. The questions involved will sufficiently appear by the following statement:
¶2On the 13th of February, 1865, David S. McKernan executed a mortgage on certain real estate in Indianapolis to Tompkins A. Lewis.
¶3On the 5th of June thereafter he executed another mortgage upon the same real estate to one Edward P. Quinn, to secure a promissory note of that date for five hundred dollars payable six months after date.
¶4On the xoth of January thereafter, he executed another mortgage upon the same real estate to James H. McKennan, the appellant.
¶5Each of the mortgages was duly recorded,
¶6Quinn sold and assigned his note and mortgage to the appellees.
¶7In 1866, Lewis instituted an action to foreclose his mortgage, to which James H. McKernan, the appellant, was a party and filed his cross bill against David S. McKernan, to foreclose his mortgage. David S. McKernan was not served with process in the cross complaint and did not appear to it. Neither Quinn nor the appellees were made parties to the action or had any notice of it. There was a decree of foreclosure, and that the proceeds of the sale should be applied first to the payment of the amount of Lewis’ mortgage, interest, and costs, and next to the amount of the appellant’s mortgage, and the overplus, if any, to be paid to the mortgagor. The property was sold by the sheriff on the decree, to the appellant, for the sum of nine thousand two hundred *505and thirty-nine dollars and eighty-six cents, which he paid to the .sheriff and received a certificate of sale. The sum of seven thousand eight hundred and fifty dollars and seventy-six cents was applied to the payment of Lewis’ decree, interest, and costs, and the sum of one thousand three hundred and eighty-nine dollars and ten cents, being the overplus, was paid to the appellant on and in satisfaction of his mortgage. The last mentioned sum was paid to the appellant with the assent of the mortgagor, who, after the sheriff’s sale, conveyed the mortgaged property to the appellant by warranty deed. Afterward the appellant sold and conveyed the property by warranty deed to one Johnson for nine thousand two hundred and fifty dollars. He also assigned to him the sheriff’s certificate of sale, and at the-expiration of one year from the date of the sale, Johnson received a deed from the sheriff. The mortgagor was, at the time of the decree of foreclosure, and has been ever .since, wholly insolvent. Since the sale to Johnson, the property has so depreciated, that it would not sell for more than enough to pay off Lewis’ decree.
¶8A demurrer to the complaint was overruled, and an answer filed, to which a demurrer was sustained. Exceptions were taken to both the rulings. The appellant failing to amend his answer, final judgment was rendered against him for the amount due on the Quinn note and mortgage.
¶9We do not think it necessary to set out the answer. It does not materially affect the case. If the complaint is good, the ánswer is bad.
¶10An appeal was taken to the general term, where the judgment was affirmed. From that judgment an appeal has been taken to this court.
¶11The errors assigned in general term were in overruling the demurrer to the complaint, and in sustaining the demurrer to the answer. The error assigned in this court is, that the court below in general term affirmed the judgment of the court below in special term.
¶12The decree of foreclosure and sale of the mortgaged prem*506ises have not affected the rights of the appellees. Their mortgage was junior to Lewis’ and senior to the appellant’s. The equities of the mortgagor and all other parties to the action are barred by the decree and sale. As to the appellees, the foreclosure can only have the effect to transfer to the purchaser the interest of the mortgagee in the mortgage foreclosed, who occupies the position of an assignee. Arnot v. Post, 6 Hill N. Y. 65; Murdock v. Ford, 17 Ind. 52, and cases there cited; Waller v. Harris, 7 Paige, 167.
¶13How have the appellees been prejudiced by the sale? They can foreclose their mortgage and redeem by paying the ampunt of Lewis’ mortgage as well as if his had not been foreclosed. Their rights and interests were neither sold nor barred. They remain unaffected. If they were not sold, what right had they to any of the purchase-money? Their mortgage, was subject to Lewis’. The appellant’s mortgage was subject to theirs. That is their exact position now. The mortgage held by the appellees had been duly recorded, and the purchaser will be presumed to have bid and made the purchase with reference to it; De Ruyter v. The Trustees, etc., 2 Barb. Ch. 555; and also with reference to the right of the holder of that mortgage to redeem on payment of the amount of the Lewis mortgage, and that he would stand in the position of an assignee of that mortgage as against the holder of the Quinn mortgage, then held by the appellees. Arnot v. Post and Murdock v. Ford, supra.
¶14Johnson occupies no better position as to the title of the property than the appellant would if he had not made the sale. His title is derived through the sale on the decree of foreclosure, and he will be affected by all defects and irregularities of the sale that appear of record. Piel v. Brayer, 30 Ind. 332. He was bound to take notice of the Quinn mortgage, that it was senior to the appellant’s, and that the holder had hot been made a party to the foreclosure suit through which he derived title.
¶15The appellees having lost no rights by the foreclosure, *507and no interests of theirs having been sold, they have no right to any of the avails of the sale.
¶16When they seek to redeem, there may be a question between them and Johnson, if he is in possession, as there was in Murdock v. Ford, as to how far he must account for rents, waste, etc. But we need not discuss or pass upon it in this case. Nor is it necessary for us to consider the questions which may arise between Johnson and the appellant, in an action for breach of covenant upon his deed. We will not anticipate such an action. It is foreign to the (Question before us.
¶17Whether the mortgaged property has increased or diminished in value since the sheriff's sale, or whether the appellant has sold at a profit or loss, cannot affect the rights of the parties in this action. The note secured by the Quinn mortgage became due in December, 1865, more than a month before the mortgage was given to the appellant. The decree of foreclosure of the Lewis mortgage .was rendered in May, 1866, and the sale under the decree to the appellant was made on the 28th day of July, 1866. This action was commenced on the 19th day of May, 1871. The appellees have taken no steps to collect their debt by foreclosure or otherwise, or to redeem the mortgaged premises. It will cost no more to redeem how than it would before the sheriff’s sale, except the accumulated interest. Their right to-redeem still remains. It is optional with them now, as it has been, whether they will avail themselves of such right or not.
¶18The appellees claim that the “ surplus shall be marshalled according to the priorities of the equities.” We have seen that the appellees had no equities in or to the surplus. Consequently, it was not a case for marshalling the surplus. “ In the sense of the courts of equity, the marshalling of assets is such an arrangement of the different funds under administration as shall enable all the parties, having equities thereon, to receive their due proportions, notwithstanding any inter.vening interests, liens, or other claims of particular persons *508to prior satisfaction, out of a portion of these funds.” Story Eq., sec. 558.
¶19It is also suggested that the appellees could elect to recognize the sale as valid, and demand enough of the surplus after paying off the Lewis mortgage to satisfy theirs. But the appellant cannot be compelled to become the purchaser of their interest against his will. He did not purchase any interest of theirs at sheriffs sale, and they cannot compel him to pay for it by electing to affirm a sale which was never made. What the appellant purchased was the mortgagor’s equity of redemption in satisfaction of the mortgage, as between them; and as against the appellees, he became the purchaser and assignee of the mortgage to Lewis.
¶20The demurrer to the complaint ought to have been sustained.
¶21The judgment of the Marion Superior Court is reversed, with costs. The cause is remanded, with directions to the court in general term to reverse the judgment of the special term, and to remand the cause to the special term, with instructions to sustain the demurrer to the complaint, and for further proceedings in accordance with this opinion.