32 Barb. 241 | N.Y. Sup. Ct. | 1860
The principal question in this case is whether the foreclosure of the mortgage by Cannon barred the assignee of the Heartt mortgage, and this I find a difficult
If then Betts, who was an assignee of the Heartt mortgage, was entitled to notice on the foreclosure of the Cannon mortgage, no notice having been served on him, he was not foreclosed, and his rights under his mortgage were not affected by the foreclosure and sale. He stood after the foreclosure precisely as though none had been made.
At the time of the foreclosure and sale, Pike was in possession; and was in, as I think, as the tenant of Cornwell. He entered under the lease from Cornwell, the term in which continued until the 1st of April, 1858. Cornwell was then the owner of the premises, subject to the mortgages, and so continued until the sale under the foreclosure proceedings, on the 12th day of October, 1858, to the defendant McCall. How although a memorandum was subjoined to the lease on the 10th day of March, 1858, signed and sealed by B. D. and W. P. Bandall, and the lessee Pike, as follows: “We, the undersigned, hereby mutually agree that the above lease may stand for one year from the first day of April next, and that for value received, we promise and agree, each to the other, to be governed in all respects by said lease for the term above specified;” still there is nothing to show that the Bandalls had or claimed any interest in the premises, and no such interest or claim can be inferred from the terms of the memorandum, but the inference rather is, that they stipulated on behalf of Cornwell, as his sureties, or possibly as his agents. The agreement is, that the lease shall stand for another year. Pike does not agree to pay any rent to the Bandalls, but to Cornwell. The . next succeeding year a similar extension is
On the 9th of March, 1859, Cornwell became the owner of the Heartt mortgage, with all the rights of Betts under it. On the 1st of April, 1859, that mortgage became forfeited by the non-payment of the amount remaining unpaid and which their became due, to wit, $100 and interest thereon from 1st April, 1858. Cornwell was then in possession—a possession legally acquired, and of which he had never been divested. I think he is from that time to be deemed a mortgagee in possession. It is not necessary that he should have obtained possession, as mortgagee, either by consent of the
It is contended by the defendants’ counsel that the lien of the Heartt mortgage is transferred from the premises to the surplus remaining in the hands of Cannon, from the foreclosure and sale under the mortgage held by him, and such surplus being sufficient to satisfy the Heartt mortgage, that Cornwell has no right to the possession of the premises under that mortgage.
The case of Slee v. Manhattan Company, (1 Paige, 48,) cited to sustain that position, does not, I think, sustain it. There, Slee owed the Manhattan Company $2000; and, holding a mortgage against Frear & Hallowell for $4000, he assigned it to the company as collateral security for the pay
Upon the whole case, I do not see why the plaintiff is not entitled to recover.
In regard to the damages, no question was made, on the trial, nor in the briefs submitted, as to the rule. The plaintiff claims to recover back the $500 of the purchase money paid by her at the time of the conveyance, but makes no claim in regard to the $900 bond and mortgage wMch she at the same time executed-to the defendants. On what principle she assumes $500, as the measure of damages, I do not quite understand. The title which she has obtained by the conveyance to her, is good against all the world, except this mortgagee in possession, and he is entitled to hold possession only until Ms debt shall be paid, by the rents and profits of the premises, or otherwise. When the debt is paid in that way or any other, the obstruction to her possession ceases, and her title is complete and umncumbered, except by the mortgage wMch she, herself, gave to the defendants. If the
In White v. Whitney, (3 Metc. R. 81,) it was held that when land, that is subject to a mortgage, is conveyed with a covenant of warranty, and the grantee is ousted by the mortgagee, the rule of damages upon a suit on the covenant, is the value of- the estate at the time of the ouster, unless that value exceeds the amount due on the mortgage; but if it it exceed that amount, then that amount is the measure of damages. Chief Justice Shaw says, in giving the opinion of the court in that case, “ If the right of redemption is not foreclosed, and the land may be redeemed for less than its value, the amount to be paid for such redemption—the amount due on the mortgage—-will be the measure of damages, because it will afford the plaintiff complete indemnity. Cases may be supposed where the outstanding mortgage, though assuming the form of a paramount title, which, if not redeemed, would take-the whole estate, and evict the covenantor; yet, being very small in amount in comparison with the value of the estate, it would be plainly for the interest of the owner and holder of the equity of redemption to redeem. In such a case it would be quite unreasonable to hold that the covenantee, on such an eviction, should recover damages to the full value of the estate.” In Donahoe v. Emerey, (9 Metc. R. 63,) it was held that when a grantee, who is evicted by the holder of a mortgage, made prior to his grant, sues his grantor on his covenant for quiet enjoyment, he is not entitled to recover damages beyond the amount of the mortgage debt, if the mortgage be not foreclosed.
Justice Wilde says, “ The rule laid down was adopted in"
Parker, Justice.]
As no question was made by the defendants, on the trial, in regard to the amount claimed by the plaintiff, so that they might, perhaps, be deemed to assent to her right to recover that amount, if entitled to recover at all, I should not have started that question, did I not find myself confronted with it, and were it not one, a wrong decision of which would be cause for a reversal of the judgment, as it would be entirely competent for the defendants to except to the report of the referee for any error in the rule of damages adopted- in it. I am, therefore, compelled to meet and decide the question, and both from the principle and authority, to hold the rule above stated.