Davis v. Winn , 84 Mass. 111 ( 1861 )

Hoar, J.

We can have no doubt that the defendant is not precluded from claiming of the plaintiff the amount due on his mortgage, by the proof which he made of his debt against the estate of Cummings. The plaintiff claims under the heirs of Cummings. They had no equity which could require the exoneration of the mortgaged premises, as the result of any partial payment from the personal estate of their ancestor. The rule which makes the proof by a creditor of his entire claim against an insolvent estate a waiver of any security which he holds, is only a rule for marshalling assets between creditors, and has no application to a controversy directly between the creditor and the debtor, or those who have only the debtor’s rights. But, in this case, the master’s report finds that the defendant was only permitted to prove against Cummings’s estate the residue of his claim, after deducting the estimated value of the mortgaged premises. He was thus in effect compelled to accept the property, which he had taken as a security, in satisfaction of his debt, as far as it would go. If the mortgaged estate had afterward depreciated in value, he must have borne the loss. This state of facts ought rather to be equitably regarded as a complete bar to the right of redemption by the heirs of Cummings, than as giving them any pretence to redeem without paying the whole debt. The rights of a purchaser from them are in this respect no better.

The other point presented by the report is equally free from difficulty, The defendant, being in possession of the mortgaged estate under his mortgage, after the death of the mortgagor, was compelled to pay a prior mortgage, in order to protect his title. He had therefore, as against the mortgagor and those claiming, under him, a right to indemnify himself for this payment out of the mortgaged estate. . But the prior mortgagee discharged his mortgage upon the record, instead of assigning it; and the plaintiff claims to stand in the position of a bona fide purchaser without notice, and contends that he should not be obliged to pay a mortgage which the record showed to be discharged and satisfied, at the time he purchased the equity. There is certainly some force in the reasoning by which this position is supported; but, without intending to give an opinion upon it, we think the facts disclosed by the report render it of no avail. The whole amount which the defendant now asks to be allowed to him is less than the amount of his mortgage and interest, after deducting what was received from the estate of Cummings. The defendant has been charged with a large amount of rents and profits of the estate, which accrued before the plaintiff’s title was acquired. If the plaintiff bought, trusting to the record, there was nothing on the record to show that anything should be deducted from the amount due on the defendant’s mortgage on account of these rents and profits. Up to the year 1855, they were matter of account with the heirs of Cummings ; against whom the right to apply them to reimburse the defendant for the sum paid to redeem the prior mortgage was indisputable. As they were more than sufficient to pay that sum, as no account had been settled by which they were otherwise applied, and as the plaintiff will not, in any event, be called upon to pay more than appeared by the record to be due, it is equitable that they should be so applied now.

The result is, that the plaintiff will have a decree that he may redeem upon paying the amount which the master’s report shows to be due upon the mortgage, with interest and costs, subject to an account for rents and profits since the date of the report.

Decree accordingly.