176 A. 880 | Conn. | 1935
On November 27th, 1914, Mennone owned a tract of land in Madison and on that day he mortgaged it to Chittenden to secure a note for $2000. This mortgage was later assigned to the plaintiff. On May 21st, 1919, Mennone conveyed part of the tract, which we shall call parcel A, by warranty deed, free of incumbrances, to Scranton and by mesne conveyance the title to it came to the defendant. On December 21st, 1922, Mennone conveyed another part of the tract, which we shall call parcel B, to the Lovedays, by warranty deed subject to a balance of $1500 due upon the mortgage from him to Chittenden; on the same day the Lovedays mortgaged this land to the plaintiff to secure a note of $1100; and subsequently the plaintiff foreclosed this mortgage and took title to the land. On June 29th, 1929, Mennone conveyed the remainder of the tract, which we shall call parcel C, by warranty deed, free of incumbrances, to the defendant. Certain buildings were erected upon parcel A while Scranton owned it. While interest on the debt secured by the mortgage to Chittenden was paid up to May 27th, 1931, the owners of parcel A have paid *358 neither interest nor any part of the principal since 1919 and have in no way recognized any personal obligation to pay the debt. In this action the plaintiff is seeking to foreclose the Chittenden mortgage, now owned by him, as regards parcels A and C. The trial court found that when the plaintiff foreclosed his mortgage upon parcel B the amount of the debt fixed in the judgment was $1327.60 and that the value of the land was then $2450; and it applied the difference in these sums in reduction of the amount it found due the plaintiff upon the mortgage now being foreclosed and entered its decree that unless the defendant paid this sum his equity of redemption as regards parcel A would be barred. The defendant has appealed from this judgment. He claims that any action against him upon the note is barred by the statute of limitations, and hence the mortgage cannot be foreclosed against him; and, in the alternative, that upon the facts judgment ought to enter for him, or that he was entitled, upon the payment of the entire amount of the debt secured, to have all three parcels transferred to him, or to redeem parcels A and C upon payment of that portion of the debt which the value of these parcels bears to the aggregate value of the three tracts, or that the entire value of parcel B should be applied to the payment of the debt found due in the present action and the balance applied to the mortgage the plaintiff foreclosed upon that tract.
In a long line of decisions, from Belknap v. Gleason,
Originally the mortgage now being foreclosed rested *360
upon the entire tract. When Mennone conveyed parcel A free of incumbrances; the effect of that transaction was to place the entire burden of the mortgage primarily upon the land retained by the grantor, and to that extent relieve the land conveyed. 3 Jones, Mortgages (8th Ed.) § 2085. That principle rests upon a twofold ground. On the one hand, it is a fair presumption under such circumstances that the purchaser paid the entire value of the land conveyed to him regardless of the mortgage, and to permit the mortgage to be enforced against the land would derogate from the grant made to him. On the other hand, the assertion of the mortgage against that land would be contrary to the grantor's warranty, for the breach of which the purchaser would have a cause of action against him. The purchaser's right to have the entire mortgage satisfied by the grantor is recognized in equity, and upon proper pleading is given effect in an action to foreclose the mortgage. The right is equitable in its nature and that being so its enforcement against a subsequent purchaser of the land retained would necessarily depend upon notice to him, actual or constructive, of the former conveyance. Guion v.Knapp, 6 Paige Ch. (N. Y.) 35, 42. Where the portion of the tract remaining after the first conveyance is later sold and transferred to another, it is generally held that the grantee will be obligated to recognize the equity of the purchaser of the first tract. Hiles v.Coult,
In Brown v. Simons,
There is no hardship in this rule. A successor in title to the land retained after the first conveyance, in searching back his title, necessarily finds that it formed a part of a larger tract all covered by a single mortgage, of which a portion has been conveyed away. He cannot in safety ignore the deed of that portion. He must examine it, if for no other reason than to see that the original owner, after that conveyance was made, still retained title to all the land which he purported thereafter to transfer. Being pointed so directly to that deed and charged with knowledge that under the law its terms might materially affect his obligation under the mortgage, reasonable care requires that he examine not only the description in it but the terms it contains as they might affect the burden of that mortgage.
Defendant, having acquired title to parcel A under a warranty deed reciting that the land was free of incumbrances, became possessed of an equitable right to have the burden of the mortgage first imposed upon the remaining land in the tract. When parcel B was *363
subsequently conveyed to the Lovedays, they took it subject to the same equity. The fact that the plaintiff at the same time took a mortgage upon, instead of a deed of, this parcel cannot in any way free him from the equity, as a mortgagee is just as much bound by the notice of that equity as he would be if he had acquired title by warranty deed. McIntire v. Parks,
The defendant was entitled to have parcels B and C first applied to the discharge of the mortgage debt, and the question remains as to the burden resting upon these parcels respectively. Where successive portions of a tract all of which is subject to one mortgage are conveyed by warranty deeds, free of incumbrances, the rule is stated to be that the liability to discharge the mortgage rests upon them in inverse order. 3 Jones, Op. Cit., § 2085. In this instance the finding states that Mennone conveyed parcel B to the Lovedays subject to a balance of $1500 due upon the Chittenden mortgage. We have not the deed before us nor any extraneous facts which might interpret the intention of the parties. Standing by itself it falls short of a sufficient indication of an intent to charge the entire mortgage upon the land conveyed. Had that been intended it would be natural to expect the deed would have contained a definite assumption by the grantee of the mortgage. See Hubbard
v. Ensign,
When the plaintiff by the foreclosure of the mortgage on parcel B and entry into possession perfected his title to it, he took the land in satisfaction of the mortgage upon that particular parcel. This is not a case where a part of the land mortgaged is conveyed to a mortgagee in satisfaction in whole or part of the debt or in lieu of a foreclosure. See Brooks v.Benham,
There was no such merger of title as would extinguish the debt due under the Chittenden mortgage. By his foreclosure the plaintiff did not acquire the entire tract covered by that mortgage but only a part of it. The only debt that could thereby be extinguished would be the portion of the charge resting upon that part, parcel B; and there would be no merger of the title of the entire tract covered by the Chittenden mortgage by reason of the foreclosure of parcel B, at least as regards parcel C. Delaware Hudson Canal Co. v. Bonnell,
As between parcels B and C equity would apportion *366
the burden in accordance with their respective values.Osborn v. Carr,
The defendant, upon paying the entire debt, would not have the right to acquire all three pieces free of the mortgage. Had parcel B been included in the foreclosure proceedings and had the defendant then, in order to redeem his property, paid the entire debt, he would have been subrogated to the right to enforce the mortgage against parcel B for such an amount as represented the just proportion of the mortgage debt it should bear; and the plaintiff as owner of parcel B could have redeemed the land by paying that sum. The result of such a transaction would have been the same as that accomplished by the bringing of the foreclosure action against the tracts not owned by the plaintiff and by a judgment permitting the defendant *367 to redeem that one of them subject to the mortgage by paying to the plaintiff the just proportion of the debt it ought to bear. In this way the defendant is given the benefit of all the rights and equities he possesses and much circuity of action is avoided. The judgment of the court should therefore be that parcel A is owned by the defendant free and clear of the mortgage and that the defendant is entitled to redeem parcel C by the payment of such proportion of the debt found due as the value of parcel C bears to the aggregate values of parcels B and C taken together.
Costs in equitable actions are in the discretion of the court; General Statutes, § 2271; Shaw v. Jackson,
There is error, the judgment is set aside and the case remanded to be proceeded with according to law.
In this opinion the other judges concurred.