Hunt v. Stiles

| Superior Court of New Hampshire | Dec 15, 1839

Upham, J.

Where a mortgagee enters upon and takes possession of land mortgaged, the entry is either for condition broken, and for the purpose pf foreclosure, or to receive the current rents and profits of the land, for the better security of the mortgaged debt. If the entry is for the latter purpose, no foreclosure will be effected until the mortgagee gives due notice to the mortgager, after condition broken, that he shall hold the premises for such breach. Where a mortgagee entered, to take the rents and profits of land merely, before condition broken, and held the same fourteen years after the condition broken, without notice of an intention to foreclose, it was holden to be no foreclosure. 13 Mass. R. 309, Scott vs. McFarland; 3 Ditto 138, Newall vs. Wright; 2 Ditto 493, Erskine vs. Townsend; 12 Ditto 514, Pomeroy vs. Winship.

If, however, the entry is subsequent to condition broken, it will be presumed that the entry was made for the purpose of foreclosure, unless the contrary appear. 5 Mass. R. 109, Taylor vs. Weld. Such is this case. The entry was here made after condition broken, and to foreclose the mortgage, as no other intention was intimated; and the question then arising is, as to the effect of the foreclosure upon the notes named in the mortgage.

It is well settled that foreclosure of a mortgage operates as payment of the debt to the value of the mortgaged property. 3 Mass. R. 562, Amory vs. Fairbanks; 3 Mason 474, Omaly vs. Swan; 9 Cowen 346, Lansing vs. Goelet; 4 Kent's Com. 183. The object of such entry is to procure payment by foreclosure, unless payment should be otherwise made, and the land discharged ; and whenever the title to the land is perfected by this process, the debt is extinguished so far as there is actual value received.

It seems to be here conceded that the value of the land was not sufficient to meet the entire mortgage debt; and the mortgagee claims to elect which of the notes shall be regarded as paid, and which not. Where several notes have fallen due prior to an entry to foreclose, .we are not prepared to say that a special entry may not be made for the purpose of foreclosing the mortgage upon a particular note. This, however, is questionable; as the consecutive order of the notes connected with the lien may so determine the order of payment as to prevent any change in this respect by the mortgagee. But where only one note has fallen due, an entry to foreclose must be upon that note.

In this case, the first note had been paid. The second note had fallen due prior to the entry, and the third note became due a few months before the foreclosure. The entry to foreclose could only have relation, then, to the second note ; and the payment received is necessarily upon that note. It is now said that there is an attachment made of other property, sufficient to pay this note, and if it is- paid by the mortgaged property the attachment will be lost, and that the remaining notes cannot be collected. If this is so, the misfortune is that the mortgagee, in pursuing his double remedy, at his own election, has perfected his mode of payment by the land in the first instance. If lie liad other means of collection, of which he might have availed himself more to his interest, he should have seen to this. But payment having once been made, all other liens must cease. It is too late for him now to reverse the order of his proceedings, and appropriate the funds received to the payment of either note, at his election ; or, rather, the election has already been made, and payment perfected under it, and the state of facts cannot now be changed. The note, therefore, in suit has been paid by the foreclosure of the mortgage, and there must be

Judgment for the defendant.