1 N.J. Eq. 338 | New York Court of Chancery | 1831
If Black be liable at all, in personam, it must arise out of the general principles of equity resulting from his situation as a purchaser of the equity of redemption, subject to the mortgage, and being in possession of the mortgaged premises, receiving the rents, issues and profits thereof;—or, it must spring out of some express agreement, whereby he is to be charged, distinct from his liability as a purchaser. Let us examine these grounds, and see whether they will sustain the plaintiffs in their claims.
On general principles, as held in this court, the purchaser of an equity of redemption is not personally liable for the amount of the mortgage debt. By the purchase and sale, the personal liability is not changed as between the mortgagor and mortgagee. The obligor is still answerable to the obligee on his bond, and
In this case, .Black is the purchaser of the equity of redemption at sheriff’s sale. He also held two of the original bonds, by assignment from Whitall. On one of these bonds a judgment had been entered up, and his purchase was under an execution on this judgment. He is also the assignee of the mortgage. As it regards that part of the mortgage debt due from Howell to Black, it is extinguished by the purchase. Black purchased the equity of redemption for one dollar. Strictly speaking, the debt remains: but if, as holder of the bonds, he were to resort to his suit at law against Howell, the obligor, for the recovery of the money ; it is manifest that as purchaser, and bound to indemnify the mortgagor, he might be immediately prosecuted by the mortgagor and the money recovered back again: Tice v. Annin, 2 John. C. R. 129. This, as the court said in that case, would be an idle and absurd proceeding ; and therefore there seems to be no other alternative, than to consider the debt as extinguished in the hands of the purchaser.
But the controversy here is not between the mortgagor and the purchaser. The mortgagor has not been disturbed, nor is he called on to pay the bonds. William Stevenson, one of the complainants, is the holder of the second bond, by assignment from Whitall; and Woodruff holds the third and fourth bonds, also by assignment from Whitall. By virtue of these assignments they claim to have an interest in the mortgage; and insist that
It is a general rule, that where there are a bond and mortgage, the assignment of the bond operates as an assignment of the mortgage. The bond is the principal, the mortgage is the incident. There are some exceptions to this rule, not necessary now to be noticed. I think the principle will well apply to the case before the court. When Whitall assigned to Stevenson the second bond, retaining the mortgage himself, Stevenson became equitably interested in the mortgage to the amount of his debt or bond ; and Whitall, holding the mortgage, was a trustee for Stevenson, pro tanto. And so, in like manner, he became a trustee for the executors of Woodruff to the amount of their two bonds. But what rights are conferred by this equitable interest in the mortgage 1 Had Stevenson and Woodruff any claim whatever against Whitall, personally, (while he held the mortgage,) growing out of the transfer of the bonds ? I conceive not. Their claim was upon the mortgage, or the estate bound by the mortgage, and that only. Is, then, Black placed, in any sense, in a different situation as assignee of the mortgage ? His rights and liabilities are the same, and not different. He stands, quoad hoc, in the shoes of Whitall. Have they, then, any claim against Black personally, growing out of his situation as purchaser of the equity of redemption 1 We have seen that by such purchase his own claim was extinguished ; but did he thereby make the whole mortgage debt his own, and become personally liable to
The complainants have not, then, as I apprehend, any such rights against the defendant, growing out of general principles of equity, independent of any special contract, as are set up in their bill. If the suit can be maintained at all, it must be on the ground of the alleged contract entered into at the time of the sheriff’s sale. This remains to be examined.
Black certainly was not bound by his bid after the alteration made in the conditions of sale, even if he were before. He might have withdrawn his bid, if he had chosen, and avoided all this difficulty. But he was not bound to do so. He was the veal plaintiff in the execution, and of course interested in the sale of the property. It is clear, from the evidence, that Black did not intend to subject himself personally to the payment of the bonds; and such was the understanding of the sheriff. The alteration was made at the instance of Woodruff, not of the sheriff; and the sheriff told Black, before the purchase, that he did not consider him liable, and that he*and Woodruff could settle the matter between themselves. But whatever may have been the intention of the sheriff, he was not justified in imposing terms on the purchaser different from those imposed by the law. He was the officer of the law, and as such, bound to sell according to the direction of the law, and not the direction of any interested person. It would be strange, indeed, if it were otherwise. It would be in the power of a sheriff to embarrass, if not wholly defeat, any sale, by the imposition of terms such as the law will not warrant. It is the duty of the sheriff to sell the property according to the exigency of the writ. If he undertake, by any conditions of sale, to vary the relative position of parties, and to create liabilities which the law does not impose, he exceeds his authority, and the party is not bound. What was the sheriff required to sell ? Only Howell’s right to the property—his equity of redemption. If the purchaser became liable to pay the bonds, a condition of sale to that effect was unnecessary. If there was no such liability, surely it cannot be permitted to the sheriff
I am clearly of opinion, that there was no new contract created by the additional terms of sale, in favour of these complainants. The property was sold subject to the incumbrance, whatever that might be, in the same way that other property similarly situated, is always sold. The sheriff could only sell and convey the right of Howell, the mortgagor, which was the right to redeem. That was the right purchased by Black, subject to all proper equities ; and these are to be ascertained by the known and settled principles of equity, and not by the terms which a sheriff or creditor may, without authority, choose to impose.
But taking up the subject in another point of view, and considering the alteration of the conditions of sale properly made, and Black, the defendant, bound by it, docs it amount to a special personal contract to pay the money due on the bonds to these complainants? The original articles stipulated that the property would be sold subject to the payment of the mortgage from Howell to Whitall- The addition was, “ and the several bonds secured under the mortgage.” Does this amount to a special contract with the complainants, so as personally to bind Black for the payment of the money ? The sheriff was a public officer, and, strictly speaking, not the agent of any one; or if of any one, it must be of the defendant in execution, whose property he sells, rather than of third persons. May not, then, this contract be considered as enuring to the benefit of Howell, for the purpose of indemnifying him against his personal liability on the bonds ? And if so, is there any new duty imposed on the purchaser ? Taking the property subject to the incumbrance, equity imposes on him the duty of indemnifying the obligor against personal responsibility; and that is all this contract imports, if considered as made for the benefit of the obligor.
Again, if this is to be considered as a personal undertaking by Black, in behalf of these complainants, to pay the money due on the bonds, the right of coming into this court for relief may well be questioned : such contract can as well be enforced in a court of common law.
Bill dismissed.
