Strever v. Earl ( 1891 )

Hardin, P. J.

1. The assignment of the mortgage interest to plaintiff’s testator by the defendant was valid, though not acknowledged. In Heilbrun v. Hammond, 13 Hun, 479, in speaking of the assignment of a mortgage, the court said: “The assignment, so far as it operated to transfer the title of the bond and mortgage, was effectual without an acknowledgment.”

2. By force of the assignment executed by the defendant to plaintiff’s testator, the testator became an independent owner of. that portion of the mortgage necessary to secure the sum of $140; and the assignment expressly declares, viz.: “The said mortgage is to be the property of both, in proportion to the amount as above specified,” etc. At the time the mortgage was taken it appears by the evidence that Dr. Douglas held an account against the mortgagor or her husband for some $40, and that he advanced some $20 in money, and executed a promissory note for $80 to the defendant, and thereupon received the assignment in question. Subsequently the assignor’s estate paid the promissory note. Apparently the defendant received full consideration for the $140 mentioned in the assignment, and to the extent of $140 defendant ceased to be owner of the mortgage, either in law or in equity. That the same passed to the testator, and from him to the plaintiff; tond no payment of such sum was made to the testator in his life-time, nor has the same, or any part thereof, been paid to the plaintiff in her individual or representative capacity. She, by virtue of the terms of the will of her husband, became the owner of that interest in the mortgage, and as such owner of the interest in the mortgage, and the lien created by the same, to secure the payment of that sum she prima facie was entitled to enforce the mortgage against the premises covered thereby. After such assignment the defendant was not the sole mortgagee in equity, and the mortgagor, having notice of such assignment having been made, could not properly pay the whole amount of the said mortgage to the defendant. His release given to her after her knowledge of the execution of the assignment would not operate, as between her and him, to discharge the mortgage or extinguish the interest acquired by the plaintiff’s testator in virtue of the assignment of the mortgage and the lien created thereby. When the defendant took a deed of the premises, he had no right to discharge the lien held by the plaintiff upon the premises, and any agreeffient entered into by him with the mortgagor, that in consideration of her conveyance of the premises the mortgage should be discharged, could not operate to extinguish or satisfy the lien outstanding in favor of the plaintiff. Appellant calls oui attention to Davis v. Spencer, 24 N. Y. 386. We are of the opinion that the case does not sustain the contention of the appellant. In that case it was found, upon evidence, “that the parties did agree thatthe mutual debts should be applied in cancelment and discharge of each other, so far as they equaled each other in amount, and to the amount of the smallest, and that without any further action by them, that is, that the agreement was executed, not executory.” The case in hand differs from that one in the circumstance that there is no evidence that the plaintiff ever consented that her lien in the premises should be extinguished by a deed of the premises to the defendant. We think there was no merger on the occasion of the defendant’s taking a deed of the premises from the mortgagor. At that time he was aware that there was outstanding a lien in favor of the plaintiff which she held in virtue of the mortgage and his assignment to his testator, and she never consented that her lien or “the charge should sink into the general legal ownership of the land, and become extinguished.” Clift v. White, 12 N. Y. 525. Appellant calls our attention to De Lisle v. Herbs, 25 Hun, 486. We tind nothing in that case which supports the contention of the appellant. It is said in the course of the opinion, viz.: “Ordinarily, when the legal and equitable title unite in the same person, the equitable is merged into the legal estate. This result will not follow where it is against the express br implied purpose or intention of the person owning the two titles. .So, where it is for the interest of such person to prevent the union of the two estates, the law will imply an intention to keep alive the equitable estate.” Nor do we think that Lynch v. Pfeiffer, 110 N. Y. 33, 17 N. E. Rep. 402, aids the appellant. Although that case'perhaps is an authority for saying that so far as the defendant’s mortgage interest remained in the premises it was swallowed up by the deed which he received from the mortgagor. Not so, however, as totheinterest in the premises held by the plaintiff in virtue of the mortgage and the assignment thereof. We think, upon the evidence, the court was warranted in finding “that plaintiff at no time assented to, or intended to assent to, any merger of her interest in the said mortgage by the conveyance of the land described therein to the defendant, or to release any security afforded thereby for the payment of her interest or share in the debt secured by the mortgage.” The evidence fails to show that the plaintiff gave any consent, prior to the defendant’s taking the deed, that it should have the effect now claimed for it, and it also fails to show that she or her agent ever consented that it should have such effect; although it appears in evidence that the defendant, in one of the conversations he held with Newton, a brother-in-law of the plaintiff, who was seeking to collect the supi due to the plaintiff upon the mortgage, stated that he (the defendant) had taken a deed of the premises in payment of the mortgage. The evidence fails to establish thatNewton ever assented that it should have such effect, even if it were conceded that he had authority to makesuch assent. Under such circumstances, it is obvious that the defendant’s act could not defeat the plaintiff’s mortgage lien. In Brown v. Blydenburgh, 7 N. Y. 144, it was held, viz.: “Where the holder of a bond and mortgage assigns it to.a third person as a security for a loan, and subsequently receives from tlie mortgagor a conveyance of the mortgaged premises, and at the time executes to him a discharge of the bond and mortgage, the land so conveyed continues, subject to the mortgage, in the hands of the assignee.” In the course of the opinion it was said: “It was clearly a fraud on the part of At. well to give this certificate of satisfaction; because he had previously assigned the mortgage to Calder, and knew that he had no authority to discharge it.” It may be conceded that, so far as the defendant had the beneficial ownership Of a portion of the mortgage at the time he received a deed of the premises, there was a merger, and that the deed operated as a satisfaction of the interest in the mortgage remaining in the defendant, and an extinguishment of the lien pro tonto of his ownership in the mortgage. Still the deed was inefficient to discharge the interest in the real estate held by the plaintiff, and her lien or interest in the premises was not extinguished or merged by the conveyance so given to the defendant. Miller v. Lindsey, 19 Hun, 207, which follows Purdy v. Huntington, 42 N. Y. 334. No merger would have taken place if the defendant, at the time he took the deed, liad made an agreement to pay off the mortgage interest held by the plaintiff. In Skeel v. Spraker, 8 Paige, 182, it was held, viz.: “ Where a mortgagee has assigned his mortgage as a security for a debt due by him to a third person, his taking back a conveyance of the mortgaged premises, and agreeing to pay the debt to tile assignee, does not operate as a merger of the mortgage, either in law or in equity.” Appellant calls our attention to Asche v. Asche, 113 N. Y. 232, 21 N. E. Rep. 70, and upon examination we find nothing in the case which sustains the position of the defendant. In the course of the opinion in that case it was said: “Merger is accomplished in law when two or more estates in the same property unite in the same person, and, when such estates comprise the whole legal and equitable interest in such property, the person holding them becomes the absolute owner. * * * But this cannot take place where there is an intermediate estate.” Nor do we think the circumstance that, after the defendant obtained the deed, he took possession of the premises, and continued to hold possession thereof, and that the plaintiff acquired knowledge of that fact, and for some time thereafter omitted to assert her lien by foreclosure proceedings, impairs or defeats the plaintiff’s lien. The plaintiff had made efforts to collect the debt, and continued to make efforts, and, according to the testimony of some of the witnesses, the defendant repeatedly promised to pay off and discharge the indebtedness held by the plaintiff, and secured by the mortgage and assignment of a portion thereof to her testator. We think no acquiescence or assent or ratification was shown by the evidence which should estop or prevent the plaintiff from enforcing her lien upon the premises. Our attention is called to Harrower v. Heath, 19 Barb. 331. In that case an agreement was assented to by the plaintiff, “not only before the arrangement between them for that purpose was consummated, but was in various ways recognized and ratified by him afterwards. ” That case is clearly distinguishable from the one before us. The views already expressed sufficiently dispose of the exceptions taken to the findings as made, and to the refusals to find. We are of the opinion that the plaintiff had a valid lien upon the premises at the time of the commencement of her action, to the extent of the mortgage debt owned by her and assigned by the defendant to her, and that as between the plaintiff and the defendant, who was the sole owner of the fee, she was entitled to foreclose the mortgage for the purpose of enforcing payment of the debt and interest. Such was the effect of the judgment given at special term. Judgment affirmed, with costs. All concur.