13 Abb. Pr. 33 | N.Y. Sup. Ct. | 1861
—The lien of the plaintiff’s mortgage, with all the rights attaching thereto, was left untouched by the sale, to which he was not a party. As to him,,the insurance company were still mortgagees, and nothing more; and the only consequence of their proceedings to foreclose the mortgage was, that they became mortgagees in possession. This is substantially conceded by the defendants, when they contend that this action should have been simply a bill to redeem. The proposition, if it needs authority, is sustained by the cases of Slee a. The Manhattan Company (1 Paige, 48) and Vanderkemp a. Shelton (11 Ib., 28), in which latter case there had been a foreclosure of a first mortgage in chancery without making the junior incumbrancer a party. The case of Vanderkemp a. Shelton is on all fours with the present, both as to the facts and the mode of relief. But it is supposed to be overruled by the case of Post a. Arnot, (2 Den., 344). The latter case is itself distinctly overi-uled upon the main point decided, as to the effect upon the mortgage of a tender after the law-day, by the present Court of Appeals, in Kortright a. Cady (21 N. Y., 343). It can hardly be said at present to be an authority for any thing. The point discussed in the case, however, so far as it is material to the present controversy, both in the Supreme Court (6 Hill, 65) and in the Court of Errors (q. s.), was a question of strict legal right. The action was ejectment, and the question was, whether the title of the mortgagee was extinguished by a tender after the law-day, so that no redemption was necessary subsequently, and no right of possession remained. The Court of Errors seem to have held, as far as the question was involved in the case, that a tender afrer the law-day, but before foreclosure, did not discharge the lien of the mortgage. The contrary is now expressly
It is conceded that the plaintiff would have a right to redeem the premises from the defendant’s mortgage. If he should do so, and should acquire their possession and title, he would himself become a mortgagee in possession. The equity of the mortgagor to redeem his mortgage has not been extinguished or cut off. The utmost effect of the foreclosure and sale under the first mortgage upon this equity was, to transfer it to the Butgers Insurance Company, as if they had taken a deed from Burr. And if this be so, then after the second mortgagee had acquired possession of the land by redemption from the insurance company paying their mortgage, they could redeem in turn, as grantees or assignees of the equity, by paying the whole debt to the plaintiff, who would be, as to the unextinguished equity, only a mortgagee in possession. In truth, the only question would be, in such a case, where the equity resided. Its existence could not be denied. As to the second mortgage, the rights and relations of the parties were not affected by what had taken place. The present plaintiff continued to be merely a mortgagee, and his title would not be perfected until the equity of redemption had been extinguished. If he had redeemed from the insurance company, it would still have been necessary for him to have foreclosed the equity of redemption, to have perfected his title. This is only stating with some detail and particularity the consequences of the principle, that the plaintiff is still a mortgagee, and nothing more, and unaffected by the foreclosure to which he was not a party. It follows, that it was not only regular but necessary to institute a suit like the present; and it does not lie with the Butgers Insurance Company, at any rate, to object that it is brought against the mortgagee and subsequent incumbrancers, as well as against themselves, to foreclose their equities against the plaintiff’s mortgage.
But the learned counsel for-the defendants contends that his clients were improperly made parties to such a suit, because they are prior mortgagees; and he asserted the broad and somewhat startling-proposition, that prior incumbrancers are never proper parties to a foreclosure suit. It might be sufficient to cite
In the present case, the Rutgers Insurance Company were still mortgagees as to the present plaintiff. He might have redeemed from them, but as he had also a right, and was in effect compelled, to proceed to foreclose the mortgages, and parties claiming under the latter, and subsequent to his mortgage, he had the ordinary right to make the holders of the prior mortgage parties to his suit, and to take the usual decree against them. All that they can claim upon such a decree is, that their costs and debt should "be first paid out of the proceeds of the sale. There is no reason why the plaintiff should pay them, if the proceeds are insufficient. If these defendants have been compelled to attend two litigations and two sales in order to protect their interests, it has resulted from their own negligence in not making the necessary parties to their own suit. They could not ask the court to name a:, price at which the property should be set up, nor was it necessary to fix a time within which the sale must take place. If the plaintiff improperly delayed to proceed under the judgment, the defendants, the insurance company, could.obtain an order of the court committing its execution to them..
As the Rutgers Insurance Company have been in possession of these premises, it became necessary to take an account of the rents received and the expenditures made by them, in order to ascertain the amount due them, and which must be paid them out of the proceeds of the sale. The county judge found, upon the evidence before him, that the gross or nominal rents of the property were $926.60, but that the defendants only collected $268.90. He does not find that there was any negligence on their part, and therefore there is no cause appearing for charging them with any thing more than what they actually received. They are entitled to be allowed their payments for assessments and taxes, 'amounting to $389.23, and for necessary repairs, amounting $363.51, and also to interest on the amount due them from the date of their decree. The judgment must be modified, by correcting the amount directed to be paid to the Rutgers Fire Insurance Company, according to these principles. Neither party will have costs of this appeal.
Present, Emott, P. J., Brown and Scrugham, JJ.