Kortright v. Blunt , 12 How. Pr. 424 ( 1855 )

Cowles, Justice.

The lien of the taxes which had been charged upon lot 1533 was discharged by the payment made by the master out of the surplus moneys on foreclosure of the Mutual Insurance Company mortgage, and that lien could not be made to attach to the land again in favor of Kortright particularly, as against a subsequent and bona fide purchaser for value—which was the case with Cady.

This is not the case of a payment of taxes by the mortgagee voluntarily, in order to save the mortgaged premises from a tax sale, and thus tacking such lien for taxes to his mortgage, and pursuing it as a charge on the land in his own favor. It was a payment made by mistake on the part of the master, at a time when he supposed he should need the avails of lot No. 1533, to make up the amount to be raised under that decree. It is enough, however, so far as the defendant Cady is concerned, to say that he has purchased without knowledge or notice of the facts respecting such taxes, and they, being extinguished of record, cannot be recharged as against him. The plaintiff, therefore, had no right to insist on the amount of those taxes being embraced in Cady’s tender.

The next question is, did the tender made by Cady in August, 1847, discharge the mortgaged premises from the lien of the mortgage!

The courts of law and equity in this state have not been agreed whether tender after law day operated a discharge of the lien of the mortgage. The court of chancery has held that it did not. (Merritt agt. Lambert, 7 Paige, 344.) The supreme court has held that it did. (Jackson agt. Crofts, 18 J. R. 110; Edwards agt. Farmers’ Insurance and Loan Co., 21 Wend. 467.)

The case of Post agt. Arnott, (2 Denio, 344,) in the late court of errors, has left the question still in doubt.

Under these circumstances, I feel inclined to follow the ruling of the former court of chancery upon this question.

There are obvious reasons why a tender on the day the mortgage falls due should be held to discharge the lien. That is, the day of payment fixed by the security itself. Both parties are supposed to act in reference to it, and to know the exact amount then due. The mortgagor is then bound to pay, and the mortgagee to receive the money. Neither can be taken by surprise, and tender then by the mortgagor is equivalent to payment, so far as the right to a longer lien on the land is concerned.

But if the mortgagor allows that day to pass, and becomes thus in default, it is hardly just that he should be at liberty, after the lapse of months or years, perhaps also, after partial payments of principal and interest, to select his own time and occasion for the making of a tender, when the holder of the security may be very illy prepared to know whether the amount tendered is correct or not, and acquire by such a tender the same advantages he would had the tender been made on law day. If he allows the stipulated time of payment to pass, it seems to me it is not equitable to allow a tender of the money to discharge the lien, unless the tender is kept good, and the money afterwards brought into court. It may be said, that reasonable notice of the intention to make the tender, if made after law day, would enable the mortgagee to ascertain the exact amount due; and that after such notice, the mortgagee should be held to decline receiving the money tendered at the peril of losing the lien.

There is no little force in this view of the case, and it might be conclusive did it not leave it always as an open question, whether such reasonable notice had been given. The more simple, and, as it seems to me, equitable rule, is to hold, that if tender is punctually made on law day, it operates a discharge of the lien. But if not made until after law day, that it does not discharge the lien, unless the tender is kept good.