Case ID: vt_1/html/0395-01.html
Source: Caselaw Access Project
Author: {"author": "Hutchinson, J,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Phelps Smith vs. Edmund Lamb, Jun.
    That a decree of foreclosure of a mortgage, satisfied by payment, is no bar to a suit on the mortgage securities brought to recover a sum not included in said decree.
    More especially if defendant’s testimony prevented the same sum from being included in said decree. <
    This was an action of Assumpsit,decided in the County Court for the defendant,upon a statement of facts agreed to by the parties; exceptions were taken to the decisions, and the cause was brought up to this court for a revision of those decisions. The case agreed to was as follows: “ Action of assumpsit upon two promissory notes, one dated October 14, 1818, for the sum of thre.e hundred and fifty seven dollars and two cents, payable in two years from its date to the plaintiff or his order; the other of the same date, for the sum of fifty four dollars and forty five cents,payable to the plaintiff,or his order, in one year from its date. Plea non assumpsit, and issue joined to the court. The following, facts were agreed to by the parties, and were offered in evidence by the defendant in bar of the action : (the plaintiff contending they constituted no bar to his recovery, and objected to their admission as evidence for that purpose; and the court overruled the objectiqn.)That when said notes were given, a mortgage was also executed of certain lands in Milton, by the said Edmund Lamb, jun. to the said Pkelphs Smith, to secure the payment of said notes — that afterwards, to wit, on the 20th day of September 1 8 1 9, the said Phelps Smith assigned-said notes and mortgage to one Bertram. R. JYichols — that on the 22d day of December, 1818, the said Edmund Lamb, jun. conveyed said mortgaged premises to Samuel Ilolgate, jun. deducting from the consideration' the nominal amount of said notes — that after said notes fell due, JYichols brought his bill in chancery against the said Samuel Ilolgate, jun. to foreclose the equity of redemption which the said Ilolgate had to the said mortgaged premises — that Ilolgate in his answer to said bill, alleged usury; and to prove it,relied upon the testimony of the said Edmund Lamb, jun.which was objected to by the orator,on account of the incompetency of the witness; but the objection was overruled by the court, and upon his testimony the court on the 30th day of December, 1826,made a decree against the said Samuel Ilolgate, junior the payment of the sum of three hundred twenty seven dollars and sixty eight cents 'only, which was less than said notes and interest could have been, by the sum of two hundred and forty dollars and thirty one cents. The decree has been satisfied by payment of tire amount of it by the time limited therefor, and the present action is brought to recover the balance of said notes.”
    
      Jlllen, for the plaintiff contended, That the decree upon the mortgage securing these notes, w’as procured upon the testimony ,-of the defendant,Lamb,in this suit; and now the question is,can that decree be pleaded in bar to a recovery upon these notes for the balance not paid ? The plaintiff contends that the decree is not a bar and cites 2 Ailc.R.138,JYichols vs. Ilolgate.No one ought in justice to be bound by a verdict, although a privy to it, when his adversary was not also a party, and consequently where the verdict may have been founded upon the evidence of that party •himself. — 1 Starkie’s Ev. 180. — Gilbert’s Ev. 30. — 4 Burrow, 2251, Abraham vs. Bann. A person who could have received no prejudice from the verdict, had it been the contrary way, shall not derive any benefit from it, when it turns out in his favor.— 1 Starlcie, 186, 196. — 6 Sch. 466. — 4- B. & Jl. 410, Ward vs. Wilkinson. A judgment operates by way of estoppel; and estoppels must be founded on mutuality. — 1 Starlcie, 186.
    
      Van JYess,for the defendant. By the decree and the satisfaction thereof, the mortgage was discharged, which could not have been the case, except on the ground that the debt was discharged- — the debt being the principal, and the mortgage only collateral to it. The _ fact that Edmund Lamb, jun. was admitted as a witness to prove usury in the case of the foreclosure, and the question whether he was properly admitted by the court, have nothing to do with this case. A mortgagee may proceed- in either, or both,of two ways to obtain satisfaction — that is, by foreclosure and a suit on the contract against the debtor ; the one is a proceeding against the property,and the other against the person. But a satisfaction obtained either way is a bar to any further proceedings. It can make no difference-in this case, that the bill of foreclosure was between the assignee of the mortgagee and the assignee of the mortgagor: it was a proceeding against the property, in which the court had the power to ascertain and fix the sum for which the. property was holden, and such ascertainment of the sum, and the payment thereof, is as much a bar to this suit, as if those proceedings had been between the orignal mortgagee and mortgagor. No authorities are found directly in point, because, it is believed-, no suit has ever been brought on the principles of this case.— But- the following cases are in some measure analagous in principles. Where different parties are liable on & bill or note, suits may be commenced,and judgment taken against each of them,but the satisfaction of one judgment discharges the others, except as to costs: and where satisfaction is obtained on a judgment against one, before judgments are obtained in the suits against the others, those suits fall to the ground, and instead of the plaintiff’s saving his cost in them, the defendants even recover their costs. — Cowr cn’sJY. Y. Justice, 115-16, 129-30. — 2 Mass. 171.
   Hutchinson, J,

delivered the opinion of the court. This ac-. t-ion comes up from the County Court upon a case agreed, and. has been argued upon a motion for a new trial,which will be found necessary if the decision below was wrong; for, that decision being for the defendant, the damages remain unliquidated.

The plaintiff has declared upon two notes given him by the .defendant, and the defence set up, and allowed by the county court, was, that the notes were secured by a mortgage, and the plaintiff bad assigned the notes and mortgage to one Bertram. R. Nichols, and the-defendant bad assigned his equity of redemption to one Hol-gate : and Nichols had ohtained a decree of foreclosure against Holgate; but Holgate, by his answer, had set up usury in his de-fence in part, and supported his answer, upon this point, by the testimony of this defendant, Lamb, and thereby rendered the sunr decreed to be paid upon aredemption,less, by about two hundred and forty dollars, than tbe amount of the notes and interest. To-recover that sum this action -is brought. The defendant offered the above facts in his defence, adding thereto, that Holgate had paid the amount of the decree within the time limited therein, and thereby discharged -the land from the incumbrance.

It seems the county court admitted this testimony,on the ground that the decree was binding upon all parties and privies, both with regard to the sum and the satisfaction. Had the court of chancery supposed this doctrine tenable, when th.e bill of foreclosure-was ’before them, Lamb would not have been admitted to testify in that suit. Hé would have had an interest to throw off of himself, by his testimony, all that he threw off of Holgate. But, if his testimony in favor of Holgate tended, as the court then supposed, to leave due from the witness the sum for which he relieved Holgate, his testimony was against his interest. And, upon the-question of policy in cases where the witness offered has placed his name to a notegiving it credit, the court considered the case of Walton vs. Shelby over-ruled by tbe case of Jordaine vs. Lash-brook et al. But that decision, procured by the testimony of Lamb, can never be used in his favor. Reason -and justice forbid it. -Authorities will not warrant -it. Lamb was not a party to that suit. He might-have-declined testifying -because called'to swear against his interest. But he claimed no excuse from that consideration. Had he been made a party to that bill of foreclosure, -he could not have been a witness -for -the respondent. Had he been a party, and-set up usury in his answer, he must have proved it by. testimony aliunde, or -it would have availed him nothing. The matter substantially drawn in issue in the chancery suit.was, what sum-formed an equitable lien upon .the mortgaged premises ? This was ascertained: - and upon that point, Lamb had mo interest, in reference to tbe. title of tbe premises, as it then stood, or would stand after the decree. His apparent interest was to have the full amount of tbe notes included in the decree, and remain a lien upon the mortgaged premises, the title of which had wholly gone from him. If, under these circumstances, he would volunteer to testify for Holgaie, and that when objected to by the orator, Nichols, as appears by the report of the case, he ought to pay the sum remaining due upon the notes.

Allen, for "plaintiff1.

Han Ness, for defendant.

A decree of foreclosure with or without satisfaction, or whether there be an actual redemption or not, is no bar to a suit upon the mortgage securities, otherwise than pro tanto. If there is no redemption, tbe orator obtains the land; but that does not bar an action upon the notes secured by the mortgage. If the decree is1 satisfied, that is payment pro tanto, and no further. A pursuit to collect, after a decree of foreclosure, lays a foundation for opening the decree, if the mortgagor so elect; but such pursuit is not prevented by the decree.

A new trial is granted; and the action passes to the County Court for such trial.