127 N.Y. 117 | NY | 1891
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *119
The plaintiffs, as owners of one of the lots, had the right to redeem the premises from the lien of the prior $14,000 mortgage by paying the full amount of that mortgage to the party entitled to it. But such redemption was not the sole purpose of the action. The plaintiffs, by it, sought relief which would require all the owners of the several lots covered by the mortgage to contribute to that end their proportionate shares of the burden. And the result given by the judgment of the Special Term was that the plaintiffs be permitted to redeem the land covered by the mortgage by paying the amount of it, less the proportional sum with which the lots 13 and 14 were found chargeable; and upon such payment the other lots respectively should be charged with their proportionate shares, and such of them as default in payment by the owners permitted, should be sold to realize the amount they respectively should bear of the burden of such prior lien, and by way of reimbursement of the plaintiffs. Barring the charge made upon lots 13 and 14, and the deduction of the amount of it from that of the mortgage, there is no reasonable opportunity for controversy about the determination and judgment of the Special Term. The redemption by the plaintiffs and their reimbursement by means of charging the due proportion upon the other lands covered by the mortgage, are well recognized rights to be afforded by a court of equity. (Pom. Eq. Jur. § 411; Cooper v. Stevens, 1 John. Chy. 425; Salem
v. Edgerly,
The equities of the owners of twelve of the lots covered by the mortgage were equal. The other two lots, 13 and 14, had, before the trial, been sold on foreclosure of prior mortgages, and the proceedings had for that purpose were apparently in due form; and unless such foreclosure and sale were collusive and in fraud of the plaintiffs, those two lots were not legally subject to the contribution charged upon them. The trial *122
court found upon that subject that Asa W. Parker was the attorney for the Packards; that the assignment of the first mortgages were, by his request, made to Ralph G. Packard as his appointee; that the assignment of two of those mortgages covering the lots 13 and 14 to Mary A. Sweezy was made, the suit for the foreclosure of them was instituted and perfected by sale after the commencement and during the pendency of this action, without notice to any of the respondents; and that such assignment and foreclosure were collusive and fraudulent and done for the purpose of destroying the lien of the $14,000 mortgage on those lots, and of throwing the burden of it wholly upon the other twelve lots, and compelling the owners of them to pay it to save their property. There was some evidence tending to support the view of such purpose. While the defendants Packard do not appear personally to have taken part in the business relating to the mortgages, they seem to have been represented by Mr. Parker, who, in such relation to Ralph G. Packard, suggested to Mrs. Sweezy the subject of the purchase of those two mortgages, and it was upon his negotiation that the assignment of them was made by him as such representative or attorney and taken by her. At that time Mr. Parker had the legal title to those two lots derived from his purchase on the sale of the foreclosure of the mortgage held by his wife, Sophie G., and next subsequent to that for $14,000. The sale of the two lots on the foreclosure of the mortgages assigned to Sweezy had the apparent effect of divesting him of the title as well as relieving them from the lien of the mortgage in question which he had assigned to Josiah S. Packard, and Parker and his wife had the legal title subject to that mortgage of eight more of those lots. He was cognizant of the sale of the lots 13 and 14 on the foreclosure of the mortgages, and attended it, and although those lots were worth much more than the amount secured by the first mortgages upon them, they were sold for sums little less than sufficient to satisfy those mortgages and expenses of the foreclosure. It is difficult to account for this action of Parker in seeking Mrs. Sweezy to take the *123
assignments, making them to her, and the speedy foreclosure and sale for the amount produced by it, consistently with entire good faith in the transaction. The inference from his evidence was permitted that he represented the Packards in the matter, and that the assignment was made with a view to the foreclosure, and to accomplish it without the knowledge of the owners of three of the lots, who claim they had no notice of it until proved by the defendants at the trial, and thus cast the burden of the $14,000 mortgage on the other twelve. Neither Mrs. Sweezy or the purchaser, Doody, was called by the defendants to testify on the subject of the transaction, to repel any imputation which might arise out of it bearing upon the question of good faith of the defendant Parker in his relation to the sale and to the purchase by them. The defendants could not properly do indirectly that which they would not be permitted to do directly. After the commencement of this action it would not have been fair for them, without some notice to the defendants, to have taken proceedings to relieve a portion of the land from the lien of the second mortgage to defeat contribution of such portion to the burden of redemption, or reimbursement of the plaintiffs making it; and if, through the assignment, such was the purpose, it should be equally ineffectual to accomplish it. The suit subsequently brought to foreclose the $14,000 mortgage was not necessarily the subject of any such imputation, because all the owners of the remaining lots were made parties defendant, and they had the means of protecting themselves. Without referring here more specifically to the evidence tending in that direction, we think the inferences derivable from it were warranted as found by the court, that the assignment of the two of the first mortgages and the foreclosure of them, were collusive and fraudulent as against the plaintiffs and the respondent defendants in such sense as to justify the equitable relief given, as effectually as if the mortgagee had then voluntarily released the two lots from the lien of the $14,000 mortgage. In such case the amount of the mortgage in behalf of the owners of other lots for the purposes of the redemption would have been *124
proportionally reduced. (Cheesebrough v. Millard, 1 John. Chy. 409; James
v. Hubbard, 1 Paige, 228; Guion v. Knapp, 6 id. 35; Stuyvesant v. Hall,
2 Barb. Chy. 151.) It follows that there was no error in the direction of the interlocutory judgment. And the value of the lots respectively in excess of the amounts secured by the first mortgages upon them, and the proportionate amount upon that basis of the $14,000 mortgage chargeable upon each of them as found by the referee, was well supported by the evidence. The final judgment treated as due upon the mortgage the amount remaining after deduction of the proportionate sum found to have been so chargeable upon the lots 13 and 14. But the General Term so modified the judgments as to direct that on payment of the declared proportionate share of any lot, it should be released from the lien of the mortgage. This modification was made upon the appeal and application of the defendants Maben and Brown. And while it may be that, in view of the value of the several lots, such method of redemption would not result prejudicially to the mortgagee, it is not in accordance with the equitable rule applicable to such cases. The principle upon which rests the right of redemption of mortgaged premises, requires that the whole amount of the mortgage debt be paid, and this is requisite to redemption by the owner of a portion only of the mortgaged premises. The mortgagee cannot, as a rule, be required upon the basis of an apportionment to take a sum less than the whole amount due him, and release the lien of his mortgage upon any of such premises. The relief of such owner redeeming is in his remedy, founded upon the principle of subrogation to the rights of the mortgagee, against the other portions of the mortgaged premises, and to thus seek or compel contribution. (Smith v. Kelley,
The judgment entered upon the order of the General Term should be affirmed, except so far as it modified the interlocutory and final judgments, and as to such modification reversed, and those judgments affirmed, with costs to the plaintiffs and without costs to any other party.
All concur, except BROWN, J., not sitting.
Judgment accordingly.
