9 Paige Ch. 517 | New York Court of Chancery | 1842
The first question presented by the demurrer in this case is, whether the purchaser of mortgaged premises which were redeemed within the time allowed by the act of 1837 for that purpose, was entitled to the rents and profits received by him, intermediate the sale and the time of redemption, in addtion to his purchase money and ten per cent interest thereon, where the owner of the equity of redemption neglected to give security to prevent such purchaser from taking possession 1 Upon this question I think the vice chancellor came to the correct conclusion. Where the mortgaged premises were insufficient to pay the amount due thereon, so that the mortgagee would be compelled to bid the full value of the premises at the time of the sale, to enable him to recover his debt and costs, the legislature probably would not have had the right to deprive him of the use of the premises for a year, to give the owner of the equity of redemption a further time to redeem, without giving security for the use of the property in the mean time, in case he should not elect to redeem. For that would, to a certain extent, impair the obligation of the contract, as to a mortgage executed before the redemption law took effect.
The spirit and intent of the original redemption law unquestionably was to give to the purchaser the amount of his purchase money and interest only, at the rate of ten per cent, if the premises should be redeemed. But as, by the rules and practice of this court, the purchaser at the master’s sale was to be let into possession as soon as the eight day order nisi to confirm the report of the sale had become absolute, it became necessary to alter the rule on this subject so as to protect the rights of both parties; by permitting the owner of the equity of redemption to retain the possession, upon his giving security for the rents and profits if he should not elect to redeem, and allowing the purchaser to take possession for his own protection where such security was not given. The 135th rule as amended, therefore, was a judicial construction as to the spirit and intent of the redemption act of 1837. And that construction had been
The vice chancellor allowed the demurrer upon the supposition that the conveyance and assignment of the equity of redemption to the complainant, as the same is stated in the bill, was not broad enough to transfer to him the rents and profits which had accrued after the sale and before the premises were redeemed. In this construction of the assignment to the complainant, I think the learned vice chancellor overlooked the principle upon which this court proceeds in allowing the redemption of mortgaged premises. A sale and assignment of the equity of redemption, where the mortgagee is in possession, necessarily carries with it to the purchaser the right to an account for the rents and profits of the mortgaged premises, as an incident to the right of redemption. For he has the right to offset the amount of the rents received by the mortgagee, while in possession, against the principal and interest due upon the mortgage. Thus, in the anonymous case of what Lord Hardwicke called the prowling assignee, who for a very inconsiderable sum bought an equity of redemption of mortgaged premises of which the mortgagee had been in possession for a long time, his lordship, though it w.as with
The decree appealed from ig therefore reversed with costs, and the demurrer is overruled. The defendant must pay the costs upon the appeal and upon the demurrer; and he answer the bill within the usual time, unless further time is given by the vice chancellor, to whom the proceedings are remitted.
