Kellogg v. Ames

Leonard, J. (dissenting.)

When Douglass re-issued the . mortgage he owned the premises affected with the lien thereof, in fee, and had the power as well as right to create any charge or incumbrance thereon which he thought proper. There is no one before us who had, at that time, any right to object to the mortgage being kept outstanding, except the mortgagor, and he makes no objection to it, and asks for no relief in respect to it, and his interest relates only to his personal liability and not to the land. Douglass could, at his pleasure, insist that the payment by him operated as a merger, but no one besides had the right or the interest in the premises to make such claim. The re-issuing of the mortgage by the insertion of the name of the plaintiff in the assignment thereof) and its delivery with the mortgage to him, created or continued the lawful lien of the mortgage upon the land to the extent of the consideration paid by the plaintiff, or by the firm of which he was a member. No one was affected injuriously by the mortgage except the very person who owned the land and continued the mortgage in full operation. Whether the liability of the bondsman was continued, it is not now necessary to inquire, as he has raised no question in that respect, although it may be conceded that there is nothing appearing which would authorize any judgment against him personally. That concession, however, in no way affects the right of the plaintiff to exhaust the security afforded by the pledge of the land.

The rights and equities of the appellant Ames are the only remaining subject to be considered. The mortgage and assignment were duly recorded, and that was constructive notice to him of their existence and that the plaintiff had some equities which were entitled to consideration. But that was not the only notice which the appellant had that the mortgage was outstanding, and that the plaintiff claimed to hold it as a valid and subsisting security against the property. When he purchased the premises he had actual knowledge of all these facts. As against Douglass no one can doubt the right of the plaintiff to foreclose and sell the mortgaged premises. How then can the plaintiff’s right be cut off by one who knew of the existence of that right at the time he made his purchase ? We have no evidence of the actual value of the mortgaged premises. The value may or may not be double the sum paid by the appellant and expressed as the consideration in the conveyance to him. It must be assumed that he knew the hazard of his attempt, and arranged the price to be paid for the land accordingly. He made the purchase upon the hazard that he could by litigation defeat the lien of the mortgage. It is absurd to reason about the rights or equities of such a party.

[New York General Term, November 2, 1863.

The judgment is right and should be affirmed with costs.

Hew trial granted.

Sutherland, Leonard and Barnard, Justices.]