McReynolds v. Munns

2 Keyes 214 | NY | 1865

Campbell, J.

So far as mere legal rights are concerned upon a bill of foreclosure, the only proper parties to the suit are the mortgagor and the mortgagee, and those who have acquired rights or interests under them subsequent to the mortgagé. Such was the language of the chancellor- in Eagle Fire Company v. Lent (6 Paige, 637), and that language is" quoted and' approved in Corning v. Haner v. Smith (2 Selden, 82). • There were no rights, other than legal, involved in the foreclosure of plaintiff’s mortgage. The prior mortgages were valid and subsisting liens on the property. The plaintiff’s mortgage was due, and he had a legal right to commence and prosecute an action for the sale of the equity of redemption, and the foreclosure of all those who held incumbrances subsequent to his. But what equities were existing in his favor as against prior incumbrances? If- the rents were not properly applied to keep down interest on such prior mortgages, or if the buildings needed repair, the plaintiff, by becoming the owner of the equity of redemption, subject to such prior liens, could himself make the application of the rents or make the necessary repairs, and so could any other purchaser, if one could be found willing to purchase subject to such prior incumbrances. As owner of the equity of redemption, the purchaser could compel the prior mortgagees to discharge their liens, if such mortgages had become due. But this discharge of liens could only be compelled on a full payment of principal and interest. This is all that purchasers can do. In our country the fluctuations in the value of real estate are very great, j Lands which to-day are a slender security for money which may have been loaned by way of mortgage, become amply sufficient security to-morrow. But if the plaintiff’s theory be correct, the mortgage^,as against a subsequent incumbrancer by way of mortgage, cannot exercise his own judgment as to whether he will retain his lien until the security becomes good. | The junior incumbrancer may say to him that he will sell the property to-day, and he will not wait for its increased value to-morrow. If it brings sufficient to pay the prior mortgage, well; but, whether it does or not, whatever is paid must be received in full satisfaction and discharge of the lien. The prior incumbrancer might thus say to the junior incumbrancer, because the latter had taken his security subject to such right on the part of the former. The rights of the parties could not be thus reversed, except with the express assent of the prior incumbrancer. $ Ho such assent was given by Sherman. There are no allegations in the complaint of any equitable consideration calling for such a judgment as was entered in this case. I very much doubt whether the court had power to enter such á judgment as was entered in this case on default. But it was clearly irregular, and was rightly opened by the Supreme Court. I think the order appealed from should be affirmed.

Five of the judges agreeing that the order in this case was not appealable, the appeal must be dismissed with costs.

All concur.