21 Vt. 331 | Vt. | 1849
The opinion of the court was delivered by
There can be no doubt, but that there should be a decree of foreclosure against Black, for the sum due from him on all the notes. Whoever may be the owner of the notes, Black is absolutely liable for their payment, and the mortgage may be enforced against him for whatever sum remains due on them. The important questions in the case regard the respective rights and interests of Keyes and his wife, the administrator of Houghton, and Wood, Grant & Co., in the mortgage debt, and in the security for enforcing its payment.
The note of $500, which is found in the possession of Mrs. Keyes, must be presumed to have been delivered to her by Houghton, in execution of his trust; and she is doubtless entitled to the benefit of it. Assuming, what it seems probable an accounting will show to be the case, that, as against Houghton, she was also entitled to the amount of the two notes, which were passed by him to Wood, Grant & Co., the question is, whether she can be allowed to enforce her claim against them.
Although the two notes, in equity, belonged to Mrs. Keyes, yet they were payable to Houghton, or his order, and he, upon the face of them, appeared to be the owner. The notes being negotiable paper, he might transfer them, before they became due, for a valuable consideration, to any one having no notice of the trust, and such transfer would pass a good title to them, not only against Houghton, but also against Mrs. Keyes, the beneficiary of the trust. This doctrine is too well settled, to be controverted. It is said, however, that, by the law of New York, where the transfer of these notes was
The next inquiry is, what are the respective rights of the plaintiff, Mrs. Keyes, and the defendants Wood, Grant & Co., in the mortgage security 1
It is claimed in behalf of the plaintiffs, that, even if Wood, Grant & Co. have acquired a good title to .the notes, they have obtained none to the security, and that a decree should be made upon that basis. If Houghton had been the equitable and legal owner of the mortgage, and had transferred all the notes secured by it, retaining the mortgage in his hands, there can be no doubt, but that the assignee of the notes would, by the assignment of them, have become also the equitable assignee of the mortgage. The debt being the principal, and the security the incident, the transfer of the one carries with it the other. It may now be considered as well settled,
The question arises, how far these principles are applicable to the assignment of a part of a debt, the whole of which is secured by mortgage. In Langdon v. Keith, 9 Vt. 300, it was said by the court, that when a part of the mortgage notes are assigned and a part retained, it was entirely matter of contract between the mortgagee and assignee, how far and for whose benefit the mortgage should be holden. In that case the mortgagee had sold part of the notes and with them had assigned the whole mortgage, and the assignee was therefore, by contract, entitled to the whole security, as between him and the mortgagee. But it was not determined, what would have been the rights of the assignee of a part of the notes, in the absence of any express contract in regard to the security. And the question, as to what contract the law would imply in regard to the security, upon the separation of the notes into the hands of different owners, does not appear to have been adjudicated in this state.
In Pattison v. Hull, 9 Cow. 747, it was held, that an assignment under seal from the mortgagee of a judgment, recovered upon one of several mortgage notes, passed to the assignee a corresponding interest in the mortgage security, and that parol evidence was inadmissible, to show that the assignor intended to reserve the mortgage. In Donley v. Hays, 17 Serg. & Rawle 400, a mortgage had been given to secure several bonds, and the mortgagee had assigned a part of the bonds, at different times, to different persons, but retain
If the mortgagee sell all the notes specified in a mortgage to one person, we have already seen, that the mortgage passes with them, as incident to the debt. And why shall not a sale of a part of the notes carry with it a corresponding part of the mortgage ? The security in the hands of the mortgagee is spread equally over the whole debt. It is incident to every part of the debt, to one part as much as to another, and it is difficult to perceive, why an assignment of a portion of the mortgage notes, in the absence of any contract to the contrary, should not be an assignment of a pro rata portion of the mortgage. It would seem, that the land would be as much appurtenant to the notes assigned, as to the notes retained ; and we are disposed to hold, that, unless the mortgagee, on a transfer of a portion of the notes, chooses, by contract, to separate them from the security, the security, to the extent that it would attach to them in his hands, should accompany them to the assignee.
In this case, there being no evidence of any contract between Mrs. Keyes and Houghton, by which any of the notes were to have a preference, in regard to the security, over the others, the mortgage must be deemed to have been in her hands as equal security for all the notes. The sale and transfer, therefore, of the two notes by Houghton to Wood, Grant & Co., passed to them a corresponding portion of the mortgage, which they, with her, are entitled to enforce against the mortgagor.
It is claimed in behalf of Wood, Grant & Co., that, by contract with Houghton, their notes are to have priority in the security over the note in the hands of Mrs. Keyes. But we are not satisfied, that they are entitled to such priority. By the declaration of trust the note, which was placed in her hands, belonged- in equity to her, and, as against Wood, Grant & Co., she is entitled to all the advantages
Upon-the assumption, that Houghton, in his lifetime, received his full portion of the mortgage debt, and that the residue unpaid, as between him and Mrs. Keyes, belongs to her, she is entitled, with Wood, Grant & Co., to a foreclosure of the mortgage against Black; and in case the land is not redeemed they should hold the same as tenants in common in proportion to the amount of the principal and interest of the notes held by each. But Mrs. Keyes should have the right, before the time of payment of the redemption money by the mortgagor, to redeem the notes from Wood, Grant & Co., by paying the amount due them in equity from Houghton and upon such redemption of the notes by her, she will be entitled to receive from the mortgagor the sum due on all the notes.
If upon an accounting between Mrs. Keyes and the administrator of Houghton, it should turn out that Mrs. Keyes, from the note in her hands, together with the sum she would receive from Wood, Grant & Co., would obtain more than her share of the mortgage money, the overplus would belong to the estate of Houghton,
The result is, that the decree of the court of chancery is to be reversed and the case remanded to that court to make a decree in conformity to the principles before stated.