153 Conn. 267 | Conn. | 1965
The plaintiff took a first mortgage from the named defendant, hereinafter referred to as the corporation, on four contiguous tracts of land, hereinafter referred to as parcel A. The defendant Paul Pellegrino was subsequently given a mortgage by the corporation on one of these four tracts, hereinafter referred to as parcel B. After the Pellegrino mortgage was given and recorded, the corporation granted a mortgage on parcel A to the defendant Edward M. Derman. All three mortgages were properly executed by the corporation and were recorded in the order given.
"When the corporation subsequently encountered financial difficulties, two foreclosure actions were begun, one by Pellegrino, on May 18, 1963, and the
In a ease such as this where there is a surplus after satisfying the prior mortgage, the liens of the junior encumbrances are transferred to the surplus fund, and the court determines the claims asserted by the junior encumbrancers. See Markey v. Langley, 92 U.S. 142, 155, 23 L. Ed. 701; Gault v. Bacon,
The disposition of this surplus represents the real controversy in this case. The only disputants are Pellegrino, who holds the second mortgage on one of the four tracts, and Derman, who holds the second mortgage on the other three and in effect has a third mortgage on the single tract upon which the Pellegrino mortgage is a second. The Superior Court, on the motion for a final supplemental judgment, heard testimony as to the respective values of the land on which these two disputants held their second mortgages, in order to apportion the surplus according to these values. Derman was the only party to offer evidence, and from this evidence the court concluded, as indicated by the memorandum of decision, to which we turn for a clarification of the finding, that the single tract on which Pellegrino held a second mortgage had a value of $35,000 and that the three tracts on which Derman held a second mortgage had a total value of $69,000.
In accordance with this valuation, the trial court determined that Derman was entitled to a pro rata share of 66.35 percent of the surplus. Since the amount thus allocated was slightly more than enough to satisfy Derman’s claim of $9748.59, the court ordered that Derman be fully satisfied and that the entire balance of the surplus, or $5424.93, be paid toward Pellegrino’s claim of $16,343.50. Prom a final judgment rendered thereon, Pellegrino has brought the present appeal.
The principal claim raised by Pellegrino is concerned with the rule applied by the lower court in disposing of the surplus fund from the foreclosure sale. Essentially Pellegrino claims that a rule of priorities rather than a rule of apportionment should
Pellegrino’s only interest was in parcel B and, as to parcel B, he was a second mortgagee. His equity in parcel B was limited to a claim on that portion of the value of the property remaining after the first mortgage had been satisfied. The circumstances did not require that the debtor’s assets be marshalled so as to protect the security of Pellegrino’s lien. If the first mortgage could have been satisfied by drawing on the debtor’s property in such a manner as to assure payment of both mortgages, to the burden of the debtor, equity would have required that it be done; but if the burden is to fall on another creditor, by dissipating his security, the same equitable considerations are not present and the rule does not apply. See Andreas v. Hubbard, 50 Conn. 351, 364.
Pellegrino also cites the rule that a mortgage is to be satisfied, in situations where subparcels of the mortgaged property have been subsequently conveyed by the mortgagor (without an assumption of the mortgage), in the inverse order of alienation. The stated rule is clearly applicable when the mortgagor conveys a fee interest in one or more portions of the mortgaged property. Savings Bank v. Creswell, 100 U.S. 630, 642, 25 L. Ed. 713; New
The case of Lomas & Nettleton Co. v. DiFrancesco, 116 Conn. 253, 164 A. 495, has been cited by Pellegrino in support of his claim that a rule of priorities, rather than a rule of apportionment, should have been employed by the lower court. The court in that case said (p. 258): “If, upon proper pleadings, the holder of a junior mortgage upon one of two lots covered by a mortgage being fore
The distribution of a surplus from a foreclosure sale lies within the equity jurisdiction of the court. Gruss v. Curry, 132 Conn. 22, 26, 42 A.2d 358; Desiderio v. Iadonisi, 115 Conn. 652, 655, 163 A. 254; Beach v. Isacs, 105 Conn. 169, 176, 134 A. 787. Apportionment is an appropriate equitable remedy when the circumstances require that it be employed. Andreas v. Hubbard, 50 Conn. 351, 370; 4 Pomeroy, Equity Jurisprudence (5th Ed.) § 1222. “The principle, Equality is equity, or Equity delighteth in equality, is of very wide and general application. ... It furnishes a practical rule for the guidance of equity courts in their administration of reliefs, whenever they obtain jurisdiction over a great variety of cases, unless some compulsory dogma of the law stands in the way.” 2 Pomeroy, op. cit. § 405. In the present case, where no such dogma compels a contrary result, we believe the two second mortgagees should be treated equally and that it was proper for the court to apportion the surplus between them according to the respective values of their security.
A secondary claim of Pellegrino is that the trial court was bound by the returns of the court-appointed appraisers in determining valuation.
The court did not commit error in taking evidence relating to the value of these properties and in weighing that evidence with all the other evidence before it, which included the returns of the court-appointed appraisers. It held a hearing for that purpose, and both parties had ample opportunity to offer additional evidence. There is no claim that the resulting finding of the court was not supported by the evidence thus produced. Under these circumstances, the finding of the court as to valuation cannot be disturbed.
There is no error.
In this opinion the other judges concurred.