Ellsworth v. . Lockwood , 1870 N.Y. LEXIS 25 ( 1870 )

It will not be difficult to dispose of this case, when the relations of the parties are properly understood. The plaintiff and Brady were jointly the purchasers of the land from Lockwood; and, although the deed was taken by Brady alone, it was thus taken for their joint benefit. As between themselves, they were equally liable and bound to pay the purchase price. The plaintiff was to make the first payment by giving his note for the $500, which he was expected to pay. Mott was procured to indorse the note, and to secure him for indorsing, and for no other purpose, Brady was to give and did give him a deed of the land, absolute in form. When plaintiff paid the note, Mott was to convey the land to him. Brady was to occupy the land, and when he paid his proper portion of the purchase money, he was to have title to one-half of the land.

The deed to Mott, though absolute in form, was undoubtedly only a mortgage and could only operate as such, and Mott could only use it as such. He could not, in case he suffered loss by his indorsement, bring ejectment to recover possession of the land. His only remedy would have been a foreclosure of his mortgage. The deed certainly, and, perhaps, the paper executed at the same time, by Mott to plaintiff, should have been recorded, not in the book of deeds, but as a mortgage in the book of mortgages. Its record in the book of deeds was of no account. When the note was paid and the mortgage thus became satisfied, a reconveyance was not necessary to vest the title in the mortgagor; but, if the deed had been recorded as a mortgage, it could have been satisfied and canceled if recorded like any other mortgage. If any person had purchased the lands of Mott, knowing that he had taken this deed merely as a mortgage, he would have got no better title than Mott had. But if, relying upon the warranty deed and the record as a deed in the clerk's office, any person, believing that Mott's title was perfect, had purchased the lands of him in good faith, paying value, he would have obtained all the title which the deed purported to give, and Brady would have been estopped from denying his title.

The plaintiff, therefore, did not make the note indorsed by Mott as surety for Brady, and when he paid it, he did not pay a debt which Brady was primarily liable to pay. Hence when he paid the note, he was not entitled, within the cases cited by the learned counsel for the appellant, to be subrogated to the rights of Mott in the mortgage which he held to secure the same debt. But he may have been entitled to a conveyance from Mott of the land, according to Mott's agreement of November 15th, 1849. Whether he was or not, is now of little importance, as in July, 1851, the equity of redemption was conveyed to him by Brady, and he thus became the legal and equitable owner of the lands, subject to the mortgage to Lockwood. He was in no way liable to pay the Lockwood mortgage. By the conveyance of the land by the mortgagor, without any agreement on the part of the grantee to pay the mortgage, the land became primarily bound in equity to pay the mortgage, and the mortgagor remained merely surety for the payment of the mortgage debt. Hence, the only standing the plaintiff had in reference to this land at the time of the mortgage foreclosure was as owner. As such merely, while he had the right to pay up and discharge the mortgage, he had no right to ask for or compel its assignment to him. There are doubtless cases, where the owner may compel an assignment of a mortgage, as where a mortgage covers a tract of land all equally charged with its payment, and the owner of a portion of it is compelled to pay it; or, where the mortgage covers a tract of land and a portion has become equitably bound to pay the whole, and the owner of the portion not thus bound has been obliged to pay it. In these cases, an assignment may be demanded so that, in the one case contribution can be enforced from the land equally bound, and in the other case, the mortgage may be enforced against the land equitably bound for the whole. Other cases might be instanced. But in every case, to enable the owner of the land to compel an assignment of a mortgage, there must be some equitable reason for it. Here there was none. The only pretense for claiming the assignment was on account of the claim which Ketchum and Joslyn set up to the land. The facts in reference to that claim do not appear very distinctly. It is not clear, upon the evidence or upon the findings of the referee, whether Perine was authorized as the agent of Mott to contract for the sale of the land to them, or whether they knew certainly that Mott's title was merely a mortgage, or whether they knew of the existence of the paper dated November 15th, 1849, executed by Mott. Their claim may, therefore, have been good, within the principles above laid down, or it may not have been. If it was good, then the plaintiff was not entitled to an assignment of the mortgage for the purpose of annoying or harrassing them. If it was not good, then the plaintiff did not need the protection of the mortgage, and he could have paid up the mortgage and asserted his right in an action of ejectment, or he could have bid the property up to its value at the sale and claimed the surplus. I can, therefore, see no good reason upon which the plaintiff could base a claim for the assignment of the mortgage and no equitable right that was to be worked out by keeping the mortgage alive in his hands. (See Pardee v. VanAnken, 3 Barb., 534; Johnson v. Zink, 52 Barb., 396; Hayes v. Ward, 4 John. Ch., 130; Halsey v. Reed, 9 Paige, 446;Marsh v. Pike, 10 Paige, 595; Ferris v. Crawford, 2 Denio, 595.)

It is true that a short time before the 20th day of November, 1852, Lockwood said he would assign the mortgage; but on the 20th day and at all times after, when the question came up, he said he would not assign the mortgage for reasons which he stated. The sale did not take place until the 10th day of December, and hence it cannot with propriety be said that the plaintiff was misled by what Lockwood said before the 20th of November. He should have come to the sale prepared to protect his rights by bidding, or he should have instituted legal proceedings to secure such relief as he claimed to be entitled to.

It is also claimed that the foreclosure sale should be set aside, because more land was sold than enough to satisfy the mortgage. The land was described in the mortgage as a single tract, and although, since the giving of the mortgage, the land has been divided into two parcels, which were then separately occupied, yet the mortgagee was not bound to sell in parcels, even if he had the right to do so. He could sell the property, as described in the mortgage. (Lamerson v. Marvin, 8 Barb., 9;Griswold v. Fowler, 24 Barb., 135; Cox v. Wheeler, 7 Paige, 250.) If the plaintiff had been the only person besides the mortgagee claiming any interest in the land, it would most probably have been the duty of the mortgagee, under the circumstances disclosed in this case, to have sold a part only of the land. But here, at the sale, it appears that other parties also set up some claim to the land, and they did not consent to a sale in parcels. The mortgagee was not called upon then and there to decide between these different claimants, but had the right to sell the land in the usual way by the description contained in the mortgage.

The proper place in Warren county to post a notice of mortgage foreclosure is on the Court House door at Caldwell, notwithstanding chapter 176 of the Laws of 1845 authorizing certain terms of the County Court to be held in Glen's Falls.

I therefore reach the conclusion upon the whole case that the judgment must be affirmed with costs.

LOTT, J., also read an opinion for affirmance, on the ground that the defendant, Lockwood, was not bound to sell in parcels, and that although, if the plaintiff had himself offered the money and demanded an assignment, he would have been entitled thereto; yet MacGregor was a stranger and was not entitled to receive an assignment of the mortgage.

HUNT and SMITH, JJ., were for reversal both on the ground of the right to an assignment of the mortgage and also that stated in the opinion of SUTHERLAND, J.

GROVER and FOSTER, JJ., were also for reversal.

EARL, Ch. J., LOTT and INGALLS, JJ., for affirmance.

Judgment reversed and new trial ordered.