129 N.Y.S. 291 | N.Y. App. Div. | 1911
On .the 25th of August, 1898, the defendant, who was then the owner of certain real estate in the city of Bew York, mortgaged the same to the United States Life Insurance Company to secure the payment of a bond given at the same time in the sum of $90,000, payable in five years. The bond and mortgage contained covenants that the principal sum should be reduced by the payment of $10,000 within two years from their date and that in default thereof the whole amount should become due. A few days later the defendant conveyed the- real estate in question to one Brown, subject to the mortgage,, the amount of
The $10,000 was paid by Brown with his own money, and the agreement of the insurance company, while in form with Mrs. Kingsbury, was in fact with him and for his benefit, and she, the day after it was made, assigned the same to him. Shortly after the agreement was made Brown conveyed the real estate to a third party, subject to the $90,000 'mortgage. He held the assignment from Mrs. Kingsbury until October, 1903, when he assigned it to this plaintiff. A few days after the assignment to the plaintiff the insurance company — the $80,000 not having been paid to it — commenced an action to
The assignment to Mrs. Kingsbury was, in legal effect, an assignment to Brown. ■ He testified that he paid the $10,000 — that it was his money — and the court so found. Notwithstanding the fact that the bond, was not mentioned in the assignment by the insurance company to Mrs. Kingsbury, it was, in effect, an assignment of so much of the mortgage debt, and. for the obvious reason that a portion of ■ the mortgage could not be assigned without a corresponding portion of the debt itself. (Merritt v. Bartholick, 36 N. Y. 44; Munoz v. Wilson, 111 id. 295.) When the mortgage was given the mortgagor was the principal debtor and the land merely security, but this relation was modified, when the mortgagor conveyed to Brown. • The land then became the primary source from which the mortgage had to be satisfied. (Tice v. Annin, 2 Johns. Ch. 125; McKinstry v. Curtis, 10 Paige, 503; Howard v. Robbins, 170 N. Y. 498.)
The general rule is that where land is conveyed by the mortgagor the question as to where the primary liability rests depends upon the agreement of the parties to the conveyance. If the mortgagor conveys with warranty and receives the whole purchase price, then he remains primarily liable for the
In Tice v. Annin (supra), the chancellor, in speaking of a mortgagor’s right to subrogation as against the land which he sold subject to a mortgage, said: “If the mortgagee himself * * * sells the equity of redemption by execution at law to satisfy the very debt for which the mortgage was taken, and he then proceeds at law against the mortgagor’s person or other property for the residue of the debt unsatisfied by the sale of the equity, or if the whole debt was satisfied by the sale of the equity, the same consequence must follow. He must, at all events, on being paid, assign over to the mortgagor the bonds and Mortgage to enable him to compel the purchaser of the equity to refund him the debt out of the land charged. If, however, the mortgagee ■ * * * has put it out of his power to assign, by placing the whole debt and security in the hands of the purchaser, a new and greater difficulty arises. To allow the purchaser to go on and compel the mortgagor to pay the mortgage debt to him and then to compel him to assign over the mortgage to the mortgagor so as to enable him to recover the money back again, would be an idle and absurd proceeding. There seems to be no other alternative but to consider the debt as extinguished in the hands of the purchaser. He purchased only the equity of redemption, and of course subject to the
There is also another reason why the complaint was properly dismissed, and that is the judgment in the foreclosure action, which, in my opinion, is a complete bar to the maintenance of this action. Whatever right, if any, this plaintiff had, came, originally, through the assignment of the insurance company. When, therefore, she and the mortgagor were made parties defendant in the foreclosure action she had to there assert whatever claim she had. (Code Civ. Proc. § 1627.) The judgment in that action determined the amount of the mortgage debt and when that judgment was paid and satisfied, it became res adjudicata upon that subject. If the $10,000- now sought to be recovered were not considered in determining how much .was due in the foreclosure action, it was the fault of the present plaintiff and no one else. That judgment is binding upon her. But it is. suggested there was no occasion to litigate, in the foreclosure action, the defendant’s liability for the amount here sought'to be recovered, because that was a debt separate from his liability for the remaining $80,000. I am unable to see any force in the suggestion! If it be true that there was $90,000 due from this defendant at the time the foreclosure action- was commenced, that constituted a single indebtedness-so far as he was concerned, and for which but a single cause of action could be maintained. If no assignment had been made of the $10,000 the msurance company could not have split up its cause of action and maintained an action first to recover $80,000 and then another to recover $10,000. It could not confer upon others what it did not itself have the right to do. (Dickinson v. Tysen, 125 App. Div. 735.)
It follows that the judgment. appealed from is right and should be affirmed, with costs.
Ingraham, P. J., Scott, Miller and Dowling, JJ., concurred.
Judgment affirmed, with costs. _