Browne v. Perris , 23 Abb. N. Cas. 226 ( 1889 )

Lawrence, J.

It has been held that where the equity of redemption is conveyed to a mortgagee, under an express written agreement between the parties that the deed shall not operate as a merger, except at the election of the mortgagee, equity will preserve the two estates distinct, unless the mortgagee appears to have elected that they should be merged. Spencer v. Ayrault, 10 N. Y. 202; Compton v. Oxenden, 2 Ves. Jr. 264; James v. Morey, 2 Cow. 246; Abbott v. Curran, 98 B. Y. 665. But in all such cases equity will look to the real and actual intention of the parties. Applying this principle to the case at bar, it seems to me that the disposition which should be made of it is clear. When William Gr. Perris took an assignment of the mortgage in question from the Hew York Life Insurance Company, and paid $4,000 therefor, he took the same as a muniment of title, and it was expressly declared in the instrument of assignment that such was the object thereof, and that the mortgage was “not to merge in the fee of the land covered thereby, which is now owned by the said party of the second part.” “Muniments of title” is a general expression for all the means of evidence by which an owner, corporate or individual, may defend title to real property. Abb. Law Diet.; Bouv. Law Diet. It must be held, therefore, that Mr. Perris kept the mortgage alive for the purpose of protecting and defending his title to the property upon which it has been a lien. He had paid the money secured by it to the life insurance company, but kept it outstanding as a means of defending his title, if, for any reason, that title should be attacked. It cannot, in the face of the language of the assignment, be held that he meant to keep the mortgage alive for the purpose of impairing or defeating his interest in the fee to the extent of the consideration expressed in the mortgage. I do not regard section 4, tit. 5, c. 1, pt. 2, Rev. St., as affecting this case, because that section refers to a mortgage which is an actual lien upon the property, and which it was the intention of the owner of the fee to keep outstanding as such. It does not refer to a mortgage which is simply kept outstanding as a muniment of title. The cases of Spencer v. Ayrault, 10 N. Y. 202, and Abbott v. Curran, 98 N. Y. 665, do not aid the defendant, because in each of those cases the money had not been, in fact, paid by the mortgagor. Here it was paid by Perris, the owner of the fee, subject to its lien, and the instrument was kept alive, as before stated, for the sole purpose of aiding him in defending his title. To sustain the position of the defendant it must be decreed that the estate of Perris should twice pay the amount of the mortgage, which would not be consonant with equity. I am therefore of the opinion that there should be judgment for the plaintiff, as prayed for in the complaint. Findings may be settled on two days’ notice.