4 Wend. 381 | N.Y. Sup. Ct. | 1830
By the Court,
The defendants plead four pleas, the object of which seems to be to set up the same defence, to wit, a satisfaction of the debt by an extinguishment of a mortgage which was given as collateral security at the same time the bond was executed.
The effect of a foreclosure of a mortgage given to secure a bond debt, has been fully considered by Mr. Justice Story, in Hatch v. White, (2 Gallison, 152,) who comes to the conclusion that in all the cases there is no difference of opinion among the learned jurists whose decisions had been considered, “ that at law a foreclosure of the mortgage is no bar to an action on the attendant bond.” In the case of The Globe Ins. Co. v. Lansing, (5 Cowen, 380,) the question was whether a foreclosure of the mortgage, and a sale under it, operated as an extinguishment of the debt, and it was there held that it was an éxtinguishment no further
The defects in tire first plea are, 1st. It does not appear whether the sale to Fellows was by virtue of an older or a junior lien to that held by the plaintiff. 2d. It does not appear whether the purchaser had notice of the mortgage. 3d. It does not appear what was the value of the mortgaged premises; nor is there an averment to shew any thing in this whole transaction which looks like a connection of the estates of mortgagor and mortgagee. The same defects are
The third plea states that Fellows, by the sheriff’s deed became seised of the equity of redemption; and that being requested by the plaintiff either to pay the debt due him or to assign to him the equity of redemption in the mortgaged premises, Fellows conveyed for the consideration of one dollar, whereby the plaintiff became seized thereof, and the debt became paid and satisfied. The fourth plea is like the third, except it contains the additional averment that the plaintiff on the 17th November, 1825, sold the premises in fee for $650 to John Harford.
We thus learn in these pleas, by way of inference, that Fellows purchased the equity of redemption in the mortgaged premises, and that the plaintiff became the assignee of the same for a nominal consideration; and that he sold the premises in fee for $650. Had the third plea contained an averment that the value of the premises when the equity of redemption was conveyed to the plaintiff was equal to the amount due on the bond, or had the fourth plea contained an averment that the property was of the same value when the equity of redemption was conveyed to the plaintiff as when he sold to Harford, or was of value equal to the amount due on the bond, I should think the pleas good in substance, though in some respects informal.
The only effect of the sheriff’s sale was to substitute Fellows in the place of the mortgagor; when, therefore, the mortgagor released his equity of redemption for a nominal consideration to the mortgagee, the latter had the whole estate. Whether this effect is produced by a technical merger of the equitable into the legal estate, according to 2 Cowen, 246, or whether he holds the legal estate discharged of the condition, according to 2 Mason, 539, it is not important to enquire. The mortgagee becomes absolute owner, as he would by a foreclosure; and if the property when he thus receives it is equal in value to the debt for which it was mortgaged, it is payment in full; otherwise, not; but, in any event, is payment, pro tanto, according to its actual value.
The pleas are all bad, and the plaintiff is entitled to judgment upon them, with leave to the defendants to amend, on payment of costs.