113 N.J. Eq. 413 | N.J. Ct. of Ch. | 1933
In March, 1927, Frank W. Skinner and wife gave their bond and mortgage to complainant to secure the payment of $7,500. The mortgage covered an irregular shaped tract which I have divided into parcels and marked 1, 2 and 3. Parcel 3 is a narrow strip twenty feet wide front and rear by one hundred and thirty-three feet deep, fronting on a public highway and over this strip is the only means of access for parcels 1 and 2 to any public road. About a year after the mortgage was given, complainant without receiving any consideration released to Skinner from the lien of his mortgage parcel 2, and at the same time Skinner and wife conveyed *414 said parcel to defendants. It was intended that Skinner's deed should include a right of way over parcel 3 but such grant was omitted from the conveyance. By a subsequent deed, dated November 13th, 1928, recorded November 19th, 1929, Skinner and wife conveyed to defendants the same parcel 2, together with the right in perpetuity to use a right of way over parcel 3, in common with Skinner, the owner of parcel 1. The mortgage was not released as to said right of way and the grant thereof was therefore subject to the mortgage lien.
April 22d 1931, complainant filed his bill to foreclose his mortgage which then covered parcels 1 and 3, but he failed to name defendants, who then owned a right of way over parcel 3, as parties and at the foreclosure sale parcels 1 and 3 were sold to complainant February, 1932, for $100. He filed his bill herein July 13th, 1932, alleging that the failure to include defendants in his foreclosure suit was due to inadvertence on the part of his solicitors, and that he purchased said premises at the foreclosure sale in good faith, without knowledge of the right of way held by defendants and praying that an account be taken of the amount due on his mortgage, and that defendants be decreed to pay him that amount or be debarred and foreclosed of all equity of redemption in the mortgaged lands.
When a complainant in foreclosure has purchased in good faith at his mortgage foreclosure sale and the title thus acquired is not conclusive against an encumbrancer not made a party to the suit, he is entitled to file a bill in strict foreclosure and call upon the owner of the outstanding encumbrance to redeem from the mortgage debt, or be foreclosed of his equity of redemption.Parker v. Child,
Defendants had actual knowledge that complainant's mortgage covered parcel 3 and they knew when Skinner, by his second deed, conveyed to them a right of way over that parcel that the mortgage thereon had not been released and having elected to acquire the easement subject to the mortgage, they should not now be permitted to hold it entirely discharged of such lien. Had complainant made defendants parties to his foreclosure suit, defendants would have had the right to require complainant to first sell parcel 1, together with a right of way over parcel 3, and if thereby a sum insufficient to satisfy complainant's decree was realized, then to sell parcel 3. Complainant having sold parcels 1 and 3 together deprived defendants of the advantage of separate sales, and it would be inequitable to now compel defendants to redeem both parcels by paying complainant's whole decree, in order to protect their rights in one parcel. If parcel 1 with a right of way over parcel 3 is not worth the amount due complainant, all that complainant can now demand is that defendants pay whatever sum is needed to make up the deficiency, or be foreclosed of their equity of *416
redemption in parcel 3; provided the deficiency does not exceed the value of said parcel. Mutual Life Insurance Co. v. Eastonand Amboy Railroad Co.,
I shall advise a decree that defendants have sixty days within which to pay said amount to complainant and upon payment or tender of that amount complainant shall release, grant and convey to defendants the same right of way that the deed from Skinner to defendants purports to grant, free from complainant's mortgage, or other lien, and that if defendants default in such payment, they shall be foreclosed and debarred of their equity in the premises to which complainant holds title.
This suit would have been unnecessary had complainant's solicitors in foreclosure not made a mistake. Moreover, complainant's bill seeks to compel defendants to pay the whole mortgage debt and in this he has not succeeded. It does not appear that defendants made any tender to complainant for a release or grant of the right of way they claim and the decision herein is partially against them. Costs will not be allowed either party. Folkman v. Myers,