43 N.J. Eq. 25 | New York Court of Chancery | 1887
The complainant moves to strike out a plea filed by the defendants, on the ground that the matters stated in it constitute no bar to her right of action. In order to determine whether the plea is sufficient or not, it is necessary to know on what facts the complainant bases her right of action. They may be briefly stated as follows: On the 31st day of December, 1873, Andrew Mount and "William S. Mount executed a mortgage on real estate situate in the county of Monmouth, to George D. H. Gillespie and John K. Meyers, to secure the payment of a bond, made on the same day, conditioned for the payment of $275,000, on demand. Gillespie and Meyers, the mortgagees, were directors of the Manhattan Company, and the bond and mortgage were made to them to secure a debt which a firm, of which Andrew and William S. Mount were members, owed to the Manhattan Company. The bond and mortgage were executed with the understanding that they were to be assigned to the Manhattan Company, and they were so assigned accordingly. The Manhattan Company, on the 2nd of January, 1874, after obtaining title to the bond and mortgage, wrote a letter to
The complainant traces her right to this excess in this wise: Andrew Mount was adjudged a bankrupt, under the federal bankrupt law, in April, 1876 ; an assignee in bankruptcy was subsequently appointed, to whom the estate of the bankrupt was duly assigned; he, in February, 1879, sold and conveyed the mortgaged premises, together with all his rights and equities therein, to William S. Mount, who, by a proper conveyance, executed in October, 1885, passed all his rights therein to the complainant. These are the facts on which the complainant’s right of action rests.
The defendants meet the case made by the complainant by a plea, which avers that on the 28th of May, 1875, they filed their bill in this court against Andrew Mount, William S. Mount and others, for the foreclosure of their mortgage by a sale of the mortgaged premises; that Andrew and William S. Mount appeared and answered the bill; that the case was put
This plea, it is contended, is faulty in two important particulars. • First, because it does not show that the assignee in bankruptcy was made a party to the foreclosure suit; and not having been made a party, it is insisted'that the rights with which he became invested, by force of the bankrupt law, were 'unaffected by the decree and sale made in that suit; and secondly, it is insisted that the defendants by their letter of January 2d, 1874, to Andrew Mount, became bound to exercise for his benefit the power of sale contained in the mortgage, and that they were not relieved from the performance of this duty by the foreclosure and sale of the mortgaged premises, inasmuch as they became the purchasers thereof at súch sale; -in other words, that they by their letter took on themselves a trust in favor of Andrew Mount to sell the mortgaged premises for his benefit, which was not destroyed or extinguished - by the sale and conveyance under the decree of foreclosure, but was continued in full force by the fact that they acquired title to the mortgaged premises at such sale.
There is nothing in the first objection. The foreclosure suit had been pending nearly a year before Andrew Mount' was ad-' judged a bankrupt. He had áppeared to the suit and filed an
The second objection also seems to me to be without substance. The • letter upon which it is founded did not, in my judgment, change the contract relations existing between the parties, by force of the mortgage, in the slightest degree, except
The claim that the letter of January 2d, 1874, created a trust relation between the defendants and Andrew Mount, imposing upon the defendants the duty, if they purchased the mortgaged premises at judicial sale, to hold and dispose of them for his benefit, is, in my judgment, purely fanciful. There is nothing in the letter, as I read it, which gives the least support to this claim. The only duty which the defendants assumed by the letter was, in case they realized more from the security than was sufficient to pay their debt, to render the surplus to Andrew Mount. As already remarked, the defendants were at liberty to adopt any method or remedy, for realizing upon the securities, which the law furnished. The remedy which they adopted was a foreclosure of this particular mortgage by a judicial sale of the mortgaged premises. Their right to resort to this remedy was, in my judgment, beyond dispute, and I regard as equally certain that the title that they thus acquired to the mortgaged premises invests them, so long as it stands, with all the rights and equities which inhered in the parties, whether complainant or defendant, at the time of the institution of the suit.
The case upon which the complainant wholly relies to vindicate her claim that the defendants took title to the mortgaged premises, under the sale in foreclosure, for the benefit of Andrew Mount, or those standing in his right, is Brown v. Tyler, 8 Gray 135. It appeared in this case that the plaintiff’s intestate had assigned a mortgage which she held on the lands of one Gard
The facts stated in the plea constitute, in my judgment, a complete bar to the complainant’s action. The motion to strike out must therefore be denied, with costs.
The first plea having been adjudged to be sufficient, the additional pleas are useless, and should, for that reason, be struck from the record.