Clark v. Jackson , 64 N.H. 388 ( 1887 )

For the purposes of this case it is agreed that the value of the Massachusetts lands was much less than the amount of the mortgage debt, and that the plaintiff purchased the equity of redemption for a nominal sum at the auction sale by the mortgagor's assignee in insolvency, "because he believed that to be the least expensive way of foreclosing his mortgage." Under these circumstances, and as against those lands, the union of the titles of the mortgagor and mortgagee undoubtedly became perfected in the latter, and his remedy exhausted, but the mortgage debt was neither satisfied in fact nor extinguished in law. To hold otherwise would obviously be inequitable, and in such case it is held that the union of titles will not of itself he considered a merger so as to operate as payment or satisfaction of the mortgage debt; and this is the rule both at law and in equity. Walker v. Baxter, 26 Vt. 710. To the extent of the value of the property acquired, at the time when the mortgagor's right therein was extinguished, the plaintiff's mortgage debt is to be regarded as satisfied, and his mortgage lien released, but no further.

A foreclosure upon that property would have had this effect (Smith v. Packard, 19 N.H. 575, Green v. Cross, 45 N.H. 574, Fletcher v. Chamberlin,61 N.H. 438, 2 Jones Mort., s. 950); and no reason is perceived why the purchase of the mortgagor's equity should not have the same effect. The process of foreclosure is only one of the ways and remedies of a mortgagee to obtain an absolute title to the property. Among others, he may obtain such title by becoming the purchaser of the equity of redemption at a sale by the mortgagor's assignee in insolvency, or on execution, both of which may often be a convenient and inexpensive mode of procedure; and as the law gives the mortgagor the same right to redeem from a sale as from a foreclosure, and imposes the same accountability for rents and profits upon the mortgagee, there would seem to be no difference in principle between the one mode and the other in respect of the mortgage debt; and we are of opinion there is none.

Such, also, is the weight of authority. "The purchase of the equity of redemption by the mortgagee at a sale by the mortgagor's assignee in insolvency or on execution is not at law a satisfaction of the mortgage debt, and the mortgagee is not estopped from claiming that the property is of less value than the amount of the debt." 2 Jones Mort., s. 950; Murphy v. Elliott, 6 Blackf. 482; Johnston v. Watson, 7 Blackf. 174; Speer v. Whitfield, 2 Stock. 107; Lydecker v. Bogert, 38 N. J. Eq. 136; Walker v. Baxter, supra; Findlay v. Hosmer, 2 Conn. 350; Post v. Tradesmen's Bank,28 Conn. 420; — and see Marston v. Marston, 45 Me. 412; Puffer v. Clark, 7 Allen 80; Spencer v. Harford, 4 Wend. 381; and Hartz's Appeal, 40 Pa. St. 209.

The plaintiff may therefore maintain this action, and if no other means are or have been taken to ascertain the value of the Massachusetts lands embraced in his mortgage, it may be proved on the trial under the plea of nul disseizin. Green v. Cross, supra.

Case discharged.

CARPENTER, J., did not sit: the others concurred.