75 N.J. Eq. 319 | New York Court of Chancery | 1909
The complainant Mrs. Atwood,’ holder of a first mortgage, obtained a final decree on foreclosure on November 23d, 1905,
On the hearing it was conceded by counsel for Wiebke that, in view of the decisions of our courts, called to his attention since the filing of the bill, it could not be claimed that, as against subsequent encumbrancers, the amount claimed to have been' agreed to be paid by Carmer in addition to the face of the decree could be added, but it is now claimed that as against the Carmer and Wells and Matthews voluntary grantees, the agreement, if proved on the final hearing, may be effective to charge their interest in
In Cassidy v. Bigelow (1874), 25 N. J. Eq. (10 C. E. Gr.) 112, Chancellor Kunyon held that a second mortgagee had an absolute right to redeem the first mortgage at any time after it was due, and to receive an assignment, but this absolute right was denied by the court of errors and appeals, and the right of the second mortgagee to redeem against the consent of the first mortgagee was declared to exist only in case of special equities, such as endangering his security, of which the first mortgagee must • be advised, and the right to an assignment was denied. In this case the subsequent mortgagee, after decree for sale and before sale, filed a bill to redeem after a tender of amount due to the mortgagee himself on the decree demanding an assignment. The mortgagee refused to accept the tender and deliver an assignment, but offered to accept the amount due in satisfaction of the decree. The court below held that the tender was good and de
The above decree for sale to pay complainant’s debt only, contained, it will be observed, a decree also foreclosing all rights of defendants “when sold as directed by the decree.” This decree for sale, made under section 53 of the Chancery act, is in lieu of the decree of strict foreclosure. Such decree fixed a time beyond which the right of redemption ceased, and the fixing of such time was a necessary incident to making the equitable right to redeem available. Pending this time, the right of redemption existed, and the court, in a strict foreclosure suit, often enlarged it beyond the time fixed. 2 Dan. Ch. Pr. (6th Am. ed.) *999. And the right of redemption not being by the terms of the final decree cut off until sale, it must, I think, continue to exist until that time.
In Campbell v. Macomb (Chancellor Kent, 1820), 4. Johns. Ch. 534, this right of redemption, by paying off the decree, was given to the purchaser of the equity of redemption and for the reason (at p. 536) that the whole inducement to the sale is to
The decree itself does not operate as a merger of the debt or of the estate of the mortgagee (Deshler v. Holmes (Court of Errors and Appeals, 1888), 44 N. J. Eq. (17 Stew.) 585), but it does fix, finally, as between the parties and those claiming under them, the time and method of foreclosing the right of redemption, and as this is made on the application of the complainant, who will have the right to enforce it, by the issuing of the execution directed, it would seem to follow necessarily from the nature of the decree that every defendant or claimant under him, whose right of redemption is thus for complainant’s benefit made subject to foreclosure upon the sale, under the decree, must still have the fundamental equitable right of redemption after decree.
Before any decree for sale taken by the first mortgagee, or at least before the filing of his bill to foreclose, the rule settled by the court of errors and appeals (Bigelow v. Cassidy), as generally applicable, would apply, viz., that against the first mortgagee’s consent, the subsequent encumbrancer, in order to redeem, must show special equities. A first mortgagee who has not by his own judicial proceedings called upon the subsequent encumbrancer to pay his mortgage or directly affected or'impaired the right of the subsequent encumbrancer to realize on his security, is in a position to claim the protection of this general rule against redemption, so long as he desires the security to remain. But by filing a bill, which in terms asks a decree or payment and foreclosure on default, followed by tak
:The defendant Neighbor, as second mortgagee, will be entitled to redeem upon payment to complainant of the amount of the decree, with interest and sheriff’s costs, and also the amount actually paid by Wiebke for insurance on the premises since purchasing the decree. As the original mortgage covered such insurance, which had expired, the purchaser had the right to protect his interest by insurance after the decree, and by supplemental bill or otherwise, if necessary, to have this amount added to the decree. Wiebke is not, however, entitled, as against subsequent encumbrancers without notice, to1 add to the decree the amount previously deducted, as being payments - made by the owner. By operation of law, such payments enure to the benefit of the subsequent encumbrancer. Traphagen v. Lyons (Court of Errors and Appeals, 1884), 38 N. J. Eq. (11 Stew.) 613, and cases cited at p. 616, &c. This payment of the amount due on the decree with interest and insurance, together with the sheriff’s costs, for which complainant is liable, must be made to the complainant or his solicitor, within a time to be fixed, and
Costs will not be allowed to either party—not to the complainant Wiebke, because the substantial and only dispute between himself and Mr. Neighbor at the time of the disputed tender was the right to add the additional amount to the decree, which dispute has been decided against complainant on the basis of decisions previously made and covering the point involved; nor will costs be allowed to the defendants applying to redeem, because an assignment was demanded or requested at the time of tender, and because the offer to pay the sheriff was not an offer of payment in satisfaction of the decree, and the present application is for a payment, with claim for a delivery of the bond and mortgage uncanceled. Such payment complainant, after his decree for sale, was not bound to' consent to, nor was the sheriff authorized to accept it, unless ordered by the court.