205 A.D. 781 | N.Y. App. Div. | 1923
The assumption of the mortgage debt by the grantee of mortgaged premises does not release the mortgagor from his obligation upon the bond secured by the mortgage. The liability of the obligor remains for the deficiency, the amount of which can be determined only after the sale of the mortgaged premises. The obligor desires naturally that he should be relieved from this liability. He can be so relieved by a sale of the premises or by an instrument executed by the mortgagee or his assigns releasing him from his personal liability upon the bond. Such release may be given and the mortgagee left to look solely to the mortgaged premises for payment without extinguishing the mortgage debt, if such intent be expressed in the release. (Thomas Mort. [3d ed.] § 14; Jones Mort. [6th ed.] § 983; Conover v. Palmer, 123 App. Div. 817.) The Schenectady Holding Company refuses to execute such release, although the defendant, appellant, consents in open court that if such release of his personal obligation be executed by the Schenectady Holding Company the foreclosure action now being prose
In our view the defendant, appellant, need not rest content under his personal liability upon this bond, which liability is uncertain in amount and subject to the constant risk of depreciation in the value of the mortgaged premises, due to falling prices or other causes. An action may at any time be brought against him as the obligor by the mortgagee, or his assigns, upon the bond without foreclosure of the mortgage. (Marshall v. Davies, 78 N. Y. 414, 421.) The mortgage was simply collateral security for the debt it secures. This debt being due the mortgagor is entitled upon payment of the amount to an assignment of the bond and mortgage to himself, or in order to avoid complications as to title, to one nominated by him to aid in relieving him from his liability, to the end that by foreclosure reimbursement may be had from the proceeds of a sale of the mortgaged premises (Johnson v. Zink, 51 N. Y. 333); or he may maintain an action in equity to secure payment of the mortgage debt from proceeds of sale of mortgaged premises. (Marsh v. Pike, 10 Paige, 595.) The Adirondack Trust Company stands here as the nominee of the defendant, appellant, to enforce payment of the mortgage debt by a sale of the mortgaged premises.
Whatever right the Schenectady Holding Company may have to demand and receive an assignment of the bond and mortgage its right is subordinate to and derived from the mortgagor. The mortgage was outstanding when the lease was made and the rights of the lessee are derived from the lessor, the defendant, appellant. If the relief demanded upon this motion be denied the Schenectady Holding Company, it is not -unjustly prejudiced. It may purchase the premises upon the foreclosure sale and thus protect its lease, or it may release the defendant, appellant, from his personal obligation upon the bond, retaining its right to reimbursement from the premises. That the defendant, appellant, has a right to be relieved from his continuing personal liability, the amount of which is uncertain, upon this bond cannot be doubted, and the maintenance of his right is so consistent with justice that the citation of no further authority is necessary.
The order should be reversed, with ten dollars costs and disbursements.
H. T. Kellogg, Acting P. J., Kiley, Hinman and Hasbeottck, JJ., concur.
Order reversed on the law, with ten dollars costs and disbursements.