| New York Court of Chancery | Sep 15, 1847
With regard to the last of these credits, (the set-off claimed,) it is sufficient to say, that if the voucher upon which it is claimed, can hereafter be used as the evidence of a title to reimbursement from any one, it can certainly not be set off against the claim of this complainant founded upon his mortgage. If the defendant t ewart, has, in respect of this transaction, a claim against any party, it is against the estate of Thomas R. Cross, upon which letters of administration were granted to him and the complainant. Surely, the complainant, Brown, cannot, out of' his own estate, be made to pay the debt of a man upon whose estate he has administered, to his co-administrator, in a proceeding like the present. If he, the complainant, be liable exclusively for the payment of this debt, it is a liability in his representative character, and cannot be set off against a debt due him in his own right. With respect to the remaining credit, claimed by this defendant, independently of the other objections insisted upon in the argument, I deem the settlement and the sealed acknowledgment of the 21st December, 1843, as conclusive against it, in the present state of this case. If the defendant, Stewart, was entitled to this credit, he was so entitled prior to, and at the date of the
I think it, therefore, very clear, that so far as this defendant has attempted to remove the ground upon which this injunction rests, by attempting to show an extinguishment of the complainant’s claim, he has not succeeded, but that the latter must, at least in this stage of the cause, be considered as having a title to sue-upon the mortgage.
The object of this bill, as we have seen, is not only to procure a sale of the property mortgaged, for the payment of the claim of the complainant, but upon the averment of the sale of a portion thereof, and the apprehended disposition of the residue by the defendant, and the consequent diminution or destruction of the security for the debt, the court was called upon to interpose its conservative power for the protection of the rights of the complainant.
That a mortgagee, prior to the period when he may proceed to foreclose and sell the property mortgaged, may, by a bill in equity, with such averments as are contained in this bill, obtain an injunction as a preventive remedy against the apprehended danger, has been decided by the Court of Appeals. Clagett et al. vs. Salmon, 5 G. & J., 314. But that court has not decided, nor do I find it, so far as my examination has extended, expressly decided anywhere, that the court will put forth its authority in this way after the debt has become due, and consequently at a period when the mortgagee has a right to ask for a foreclosure and sale of the property. I do not, however, find the contrary to be decided, and it seems to me the administration of justice would be defective if the power invoked by this bill is denied the court.
If a mortgagor in possession is committing waste, equity will restrain him by injunction ; though in one case, Lord Thurlow appeared to question the doctrine, upon the notion that the
It is true, that it is established in Maryland, that unless there is some agreement between the parties to the contrary, the mortgagee is entitled to the possession of the property, immediately upon the execution of the mortgage, and this without regard to whether there is a forfeiture or not. Jamison vs. Bruce, 6 G. & J., 72. And hence it follows, that though either before or after forfeiture at law, the mortgagee may take possession of the property, or recover it by an action of replevin, he is not on this account precluded from the right of having it protected in this court, until it can be made available by a decree for the payment of the debt charged upon it.
If it be urged, that there is no necessity for the interposition of the court in this case by injunction, because the debt being due, the, mortgagor may possess himself of the property by replevin, the answer is, that the same right would exist, though the debt was not due, and in the latter case the Court of Appeals have expressly affirmed the power of this court to preserve the property by injunction.
Though the case of a mortgage forms an exception to the general rule, that a party shall not be allowed to sue in law and in equity for the same debt, and a mortgagee may, without restraint, sue upon all his remedies at once, (having nevertheless but one satisfaction,) yet he is under no obligation to do so, and it would certainly be falling short of the demands of justice, and the exigency of the case, if this court, when the remedy is sought exclusively here, has not the power in a proper case, to protect the subject of the controversy from destruction, while the suit is depending. 3 Powel on Mortgages, 966 and note 1; Jones vs. Conde, 6 Johns. Ch. Rep., 77.
I am, therefore, of opinion, that when a mortgagee files a bill in equity for a sale of the mortgaged property, for the satisfaction of his debt, being then due, and alleges, that it being in possession of the mortgagor, has been, or is about to be wasted : or where it consists of personalty, is about to be removed be
But, although an injunction may be granted in such a case . as is made by this bill, yet it is liable to be dissolved as in other cases, upon the coming in of the answer, if the equity upon which it is founded, is sworn away or denied, and it remains to be seen, whether the equity of this bill is so sworn away.
It has already been remarked, that the attempt to show, that the complainant’s claim has been extinguished, is unsuccessful, as the case now stands upon bill and answer, and, therefore, he must be regarded for the purpose of the present motion, as a mortgage creditor, and entitled to all the remedies which rightfully belong to that position. ' This relation by itself, however, would not have entitled him to an injunction in the first instance, nor would it now entitle him. to a continuance of it. He must') show, not only that he has a claim as mortgagee, but that without the prompt intervention of this court by injunction, he would, by the wrongful and fraudulent act of his debtor, be de-^s prived of his security. This was done by the bill, and after a careful examination of the answer, I am of opinion, that some of the material allegations of the former are neither admitted nor denied, and consequently the injunction must be continued.
It is settled that when a motion to dissolve an injuction is heard on bill and answer, so much of the bill as is not denied by the answer, is taken for true, and that if any one of its material allegations remains unanswered, the injunction will be continued till the final hearing, because in such a case, the equity upon which the injunction issued is not sworn away.
I am of opinion, that the complainant’s second, third, fourth, fifth and sixth exceptions to the answer of Stewart are
The allegations in the bill, upon which the third, and fourth exceptions are founded, relate to the application, and present position of the money for which the mortgaged slaves were sold. It was certainly material to trace this money, and discover where it is deposited, as otherwise it could not be applied at the proper time, to the payment of the claim of the complainant, should such payment hereafter be decreed. The right of the complainant to have such application made, depends upon whether the money alleged to be in the bank, arose from the sales of the slaves, or other property included in the mortgage. The bill so alleges, but the answer instead of' admitting or denying this allegation, by which the money in bank'could be identified with that which the defendant received from the sales of the slaves, which he confesses he sold, states that he applied the money to his, the defendant’s own use. Now this identity of the money in bank, is an important fact, for upon it depends the right of the complainant, to have it appropriated specifically to the payment of his claim,'the principle being, that when mortgaged property is turned into money, the mortgagee, has a right to have it applied to the payment of his claim; his rights remaining unaltered by the conversion of the property into money, Astor vs. Miller, 2 Paige, 68.
[No appeal was taken from this order.]