199 A. 643 | Conn. | 1938
Lead Opinion
The material facts of this case are these: In 1934, the defendant Ely Culbertson purchased from the plaintiffs an estate in Ridgefield consisting of land, buildings, household furniture, live stock, farm utensils and tools for the sum of $120,000 of which $22,000 was paid in cash and the balance, $98,000, by a note secured by a mortgage upon the real and personal property. From the date of the purchase until the latter part of 1936, Culbertson carried fire insurance covering his own interest and the interest of the plaintiffs as mortgagees upon the building and furniture to the extent of $141,600, and paid the premiums. On August 24th, 1936, a fire occurred and an outbuilding was burned. This building has never been rebuilt and the amount of fire insurance recovered from the companies was $10,000. This amount was received by Culbertson and later turned over to the plaintiffs and applied by them in reduction of the mortgage debt. *335 After the fire the insurance companies cancelled the policies covering the premises. The first of such cancellations became effective October 31st, 1936, notice having been given October 21st. On October 22d 1936, one of the plaintiffs wrote Culbertson advising him of the cancellation notice and requesting that the insurance be replaced. Upon receipt of this information, Culbertson obtained fire insurance on the buildings and furniture in the amount of $80,000, covering only his interest and not the interest of the plaintiffs as mortgagees. On November 13th, 1936, the plaintiffs procured fire insurance upon the buildings and furniture to the extent of $98,700, and on December 23d 1936, procured additional insurance thereon to the extent of $32,900, making a total of $131,600. The premiums on these two amounts of insurance were $253.13 and $84.37 respectively. The insurance so procured covered the interest of the plaintiffs as mortgagees and also of Culbertson as owner. On December 7th, 1936, Culbertson refused by letter to obtain insurance covering the plaintiffs' interest as mortgagees; and thereafter on January 12th, 1937, the plaintiffs demanded that he reimburse them in the amount of $253.13 for the insurance premium paid, and notified him that unless he made such payment on or before January 20th, 1937, they reserved the right to declare the entire principal of the mortgage due. On June 7th, the plaintiffs notified Culbertson that they were exercising their option to demand payment of the note and mortgage because of his failure to pay them the insurance premiums, and upon his failure to make such payment on July 14th, they commenced the present suit.
On May 13th, 1937, Culbertson conveyed to "The Culbertsons, Incorporated," the mortgaged premises subject to mortgages and incumbrances of record. *336 No notice was given the plaintiffs of this conveyance. On the trial, the defendants were allowed to offer in evidence over the objection of the plaintiffs a copy of the minutes of the corporation, "The Culbertsons Incorporated" dated May 1st, 1937, showing a vote of the directors of the corporation to assume the mortgage on the Culbertson property. The plaintiffs had no notice or knowledge of this minute until the time of trial. The mortgage note provided that "upon default in the payment of any installment upon the principal or interest on this or any prior mortgage note, or taxes, assessments or insurance premiums for a period of five days after the same shall become due and payable, or upon failure to obtain the written assumption and agreement to pay this note according to its terms by the grantee in the event of a conveyance, then the entire balance remaining unpaid hereon shall immediately become due and payable at the option of the holder hereof." The plaintiff relies upon two grounds of default: (a) That the defendant did not pay the insurance premiums for the protection of the mortgagees' interest, (b) that a second default occurred when the deed was given to the corporation without the grantee assuming the payment of the mortgage.
Our law has recognized for many years the right of the mortgagee to reimbursement for certain expenditures made in protecting his security in the mortgaged premises. General Statutes, 4731, provides in part: "Judgment may be given for the recovery of taxes assessed and paid upon the loan, and the insurance upon the estate mortgaged to secure the loan, whenever the borrower has agreed in writing to pay such taxes or insurance or both." General Statutes, 5081, provides: MORTGAGE DEBT TO INCLUDE WHAT. Premiums of insurance, taxes and assessments paid by the mortgagee, and the payment of interest or instalments *337
of principal due on any prior mortgage or lien by any subsequent mortgagee or lienor of any property to protect his interests therein, shall be a part of the debt due such mortgagee or lienor." Payments of any of these items by the mortgagee to protect his interest are made by the statute a part of the debt. Sperry v. Butler,
In Eberich v. Solomon,
The sale or gift of an equity of redemption casts upon the grantee no obligation to the mortgagees to pay the mortgage debt, unless he agrees to do so. Norwich Gas Electric Co. v. Norwich,
There is error and a new trial is ordered.
In this opinion, MALTBIE, C.J., and BROWN, J., concurred.
Dissenting Opinion
The principal issue concerns the right of the plaintiffs to declare due and demand payment of the entire principal of the note and mortgage because of failure of the defendants to pay to them the amount of the premiums on $131,600 of insurance taken out by the plaintiffs to protect their interest in a debt of $75,000. Neither the note nor the mortgage contained any provision requiring the mortgagor to maintain insurance for the benefit of the mortgagee, as in Eberich v. Solomon,
As to the matter of the assumption agreement, it appears from the finding that exercise of the option to accelerate and demand payment was not activated thereby but was based, at the time, entirely upon failure to pay the insurance premiums. Therefore, whatever may be the legal status as to the efficacy of the vote of assumption it is not necessarily such as, in equity, to entitle the plaintiffs to foreclose. Petterson v. Weinstock,
In this opinion HINMAN, J., concurred. *341