Walker, Smith & Co. v. Baxter, 26 Vt. 710

Walker, Smith & Co. v. Baxter

26 Vt. 710 | Vt. | 1854

The opinion of the court was delivered by

Isham, J.

We are satisfied, upon an investigation of this case, that'the decree of the probate court must be affirmed. The purchase by Mr. Baxter, of the Fletcher mortgage, vested in him the interest of Mr. Fletcher, with that of his own, as mortgagee of the premises. The allowance of the demands secured by mortgage, as claims against the estate of the mortgagor, will have no effect to defeat or impair that security, or prevent t-heir being taken into account, in the allowance of such dividends against the estate, as may be ordered by the probate court. Until the claims are fully paid and satisfied by the mortgagor, or some person having his interest, they stand in the same situation, as other claims allowed against the estate, for which no security by mortgage was ever obtained.

There is no propriety in saying that the claim due and allowed to Mr. Baxter, or that which was allowed to Mr. Fletcher, and now owned by Mr. Baxter, was paid or satisfied, in the purchase by him, of the equity of redemption at the public sale by the administrator, under the license and order of the probate court. It is unquestionably true, that the union of the two estates effected *715by that purchase, vested in Mr. Baxter an absolute title and estate to the premises, But it has too often been decided in this state, to be now questioned, that such a purchase will not be considered a merger of the different estates of the mortgagor and mortgagee, so as to operate as payment or satisfaction of the debts for which the mortgages were given, when it will operate inequitably, or to the injury of the mortgagee. At law, the rule in relation to the merger of estates is somewhat more strict, than that which prevails in equity; but whether the matter arises at law or in equity, the estates of the mortgagor and mortgagee, when united, will not be considered or treated as merged, so' .as to operate as payment or extinguishment of the debt, unless such was the evident intention of the parties; nor will that result follow, if there exists some beneficial interest on the part of the mortgagee, that requires to be protected, and where it is for his benefit to keep the legal and equitable interests separate and distinct. This rule exists where the equity of redemption is released by the mortgagor himself during his life, and it applies with greater force, when that interest is obtained by the mortgagee, at a public sale by the administrator, for the benefit of all the creditors of the estate. Myers v. Brownell, 1 D. Chip. 548. Marshal v. Wood, 5 Vt. 250. Slocum, v. Catlin, 22 Vt. 137. Baldwin v. Norton, 2 Conn. 161. Lockwood v. Sturdevant, 6 Conn. 390. 4 Kent’s. Com. 105. In the case of Forbes v. Moffat, 18 Ves. 384, the rule was recognized, that the whole question rests upon an expressed or presumed intention of the parties; and that the debt will be treated as paid and satisfied when it is evident that the release of the equity of redemption to the mortgagee was made with a view to satisfy the debt; otherwise, it will have no such effect. The master of the rolls, in that case observed, “ that it is very clear, that a person becoming entitled to an estate subject to a charge for his own benefit, may if “ he chooses, at once, take the estate and keep up the charge, and “ upon looking into all the cases, in which charges have been held “ to merge, I find nothing which shows that it was not perfectly in- “ different to the party in whom the interests were united, whether “ the-charge should, or should not subsist.” In cases where there is no interest on the part of the mortgagee to keep the two estates separate and distinct, a merger is effected by a union of the estates, the less estate sinks into the greater, and the debt will be *716treated as paid and satisfied, particularly if the value of the mortgaged premises is equal to the amount of the debt. If the equity of redemption in this case had been purchased by some other person, no one would question the right of Mr. Baxter, to receive these dividends, and then proceed, by a foreclosure of the mortgage, to obtain payment for the balance of his debt; for, in equity, and at law, he is entitled to both. By that procedure, he would obtain just what he now obtains by an affirmance of the decree of the probate court.

It is not to be presumed that Mr. Baxter, in purchasing the equity of redemption, was so regardless of his interest, as to pay therefor the estimated value of that equity, for the benefit of the estate, and thereby throw away his right to these dividends. That could not have been his intention, or the understanding of any one interested in that estate.

The case is free from any difficulty as to the real intention of the parties, and shows conclusively, that the estate was publicly offered for sale, subject to the application of this dividend on the claim of Mr. Baxter, which was secured by those mortgages; and that it was upon this basis the value of the equity of redemption was estimated at the sale. It is expressly stated, that at the time of the sale, the administrator gave public information, of the existence of these mortgages, and that Mr. Baxter was the assignee of the Fletcher mortgage, and that in his opinion fifty per cent, would be paid on all the claims allowed, including the claims allowed to M'essrs. Baxter and Fletcher, and that Mr. Baxter purchased that interest relying upon the representation that the dividends were to be paid to him. In affirming the decree of the probate court, we are manifestly carrying into effect the intention of the parties, and the equity of the case.

The judgment of the County Court must be affirmed, and the case certified to the probate court.