Findlay v. Hosmer

| Conn. | Nov 15, 1817

Swift, Ch. J.

A mortgagee has a right to pursue all his remedies till he has obtained satisfaction of his debt; but it will never be permitted that he should obtain more than his debt. The notes collaterally secured by the mortgage, were a proper claim against the estate*; and the commissioners wero bound to allow them as a debt. When the estate of the deceased insolvent debtor is sold, the equity of redemption must be sold ; and in ascertaining the value, the amount of the mortgage money is to be considered, deducting from it the probable average that the insolvent estate will pay. If the land, then, should not be worth more than the money due on the mortgage, the equity is of no value, and the mortgagee may obtain less than his debt. If the land be worth more, then the purchaser will give a price accordingly*. On a petition to redeem, I apprehend that a court of equity would consider the average, as a payment to apply on the mortgage; but, at any rate, if the mortgagee should refuse to receive it, and the court should not think they could apply it to the mortgage debt, then the purchaser, by an application to a court of equity, could avail himself of the benefit of the average.

The mortgagee foay as well purchase the equity of redemption as any other person ; and it may often be a convenient mode of extinguishing the right; and though it is true, as a general proposition, that where the mortgagee purchases of the mortgagor the equity of redemption, it will operate as a release of his debt 5 yet this is because a presumption arises from the nature of the transaction, that such was the intention of the parties $ for, in such case, it will be supposed the mortgagee will give only the value of the land beyond the debt j yet in the present ease, the presumption is altogether different, The mortgagee, if he purchases, must consider the mortgage debt to be only what remains after a deduction of the average to which he becomes entitled by a judgment of the court of probate. He then bids upon a calculation that the original mortgage will be discharged ; but that he is entitled to the average allowed on his debt. There can, then, be no presumption, that he intended to waive or release his claim to it | of course, such a purchase of the equity of redemption by the mortgagee will not vacate his claim to the average due from the insolvent estate.

Further, it may be remarked, that the court of probate has no power to expunge the claim of a creditor from the report of commissioners. A court of probate has no author ity, in the case of insolvent estates, to admit or reject the claims of creditors, only ift the course of an appeal. It would be strange, if a court of probate, in a summary man ncr, upon an ex parte hearing, could strike out the claim of a creditor. He hits no power but to strike the average upon the debts found by the commissioners, according to the amount of the estate. If any creditor has been improperly allowed a debt, or his debt has been in any way satisfied, the commission must be opened, or some other proper mode adopted to correct the error.

Í am of opinion that there is no error in the judgment complained of.

In this opinion the other Judges severally concurred.

Judgment affirmed.