Case ID: mass_25/html/0347-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Per Curiam.\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Joshua West versus John Chamberlin.
    Taking possession of a mortgaged estate for the purpose of foreclosure does not operate as a payment of the mortgage money ; for the land still remains only a security for the money.
    S having mortgaged an estate to W to secure the payment of several notes, W assigned the notes and mortgage to C, taking from C a written agreement with regard to one of the notes, which was for 500 dollars, that he, C, .would pay 500 dollars to W as soon as it could be collected on the note of S. C received 30 dollars of S on account of this note, and took possession of the mortgaged premises for the purpose of foreclosure, and S occupied the estate for some time after-wards as tenant to C, but S, being insolvent, never paid C any thing for rent.— In an action brought by W against C on his contract before the three years for foreclosure liad expired, the declaration also containing a count for money had and received, it was held, that the taking possession of the mortgaged premises did not amount to payment of the mortgage, and therefore that G was not liable on his 'Contract; that C was not liable to pay the 30 dollars until the whole sum was collected, without notice from the plaintiff before bringing a suit for it ; and that C, in this action, was not liable for rent which he had not actually received.
    Assumpsit on the following contract, dated October 1, 1824 : — “For value received I promise to pay Joshua West or order five hundred dollars as soon as it can be collected on Allen Smith’s note due 1 February, 1826, and interest. John Chamberlin.”
    One count upon this contract alleged that the money had been collected of Smith ; another count was for money had and received.
    The case was tried before Parker C. J.
    It was proved that the defendant had received 30 dollars of Smith, which amount was indorsed on Smith’s note.
    The only other evidence in support of the first count arises out of the following facts. On May 23, 1823, Smith, who had purchased an estate of the plaintiff, for which he had given the note above mentioned and several other notes, mortgaged the estate to the plaintiff to secure the notes, and the plaintiff, on October 1, 1824, assigned the mortgage and notes to the defendant, who then gave the promise sued upon. The defendant, on June 7, 1826, brought a suit on the mortgage to foreclose, on which the conditional judgment was rendered in May, 1827, under which, by consent, the defendant entered and took possession in July of the last-mentioned year , and Smith then became tenant to the defendant.
    
      It was insisted by the plaintiff’s counsel, that the taking possession of the mortgaged estate by the defendant should be considered as payment of the note, so far as to make the defendant liable to the plaintiff on the contract in suit; but this was overruled.
    It was also insisted, that the defendant must be considered as liable for the amount of the rent accruing from the time of his taking possession, until the estate was left by Smith ; but this was also overruled, there being no evidence that Smith had paid any rent, and he being poor and embarrassed.
    It appeared in evidence, that since the commencement of this action, the defendant had sold all his interest in the mort< gaged estate, but the judge ruled that this evidence would not support the action.
    The defendant, by direction of the judge, was defaulted, and judgment ordered to be entered for 30 dollars and interest; to which the defendant objected, on the ground that he was not liable for any partial collection of the note, without a previous demand.
    The plaintiff moved for a new trial, on account of the ruling and opinion of the judge in regard to the effect of the proceedings under the mortgage.
    The default was to be taken off, and the plaintiff to become nonsuit, or a new trial to be granted, or judgment to be entered on the default, according to the opinion of the Court.
    
      Sept. 10th.
    
    
      Dewey and Porter, for the plaintiff,
    insisted that the defendant’s taking possession of the mortgaged property amounted to a payment of the mortgage so far as to make him liable to the plaintiff on his contract. They cited Amory v. Fairbanks, 3 Mass. R. 562; Newall v. Wright, 3 Mass. R. 154; Hatch v. White, 2 Gallison, 152; Omaly v. Swan, 3 Mason, 474; 3 Pow. Mortg. 944, 945, 1001, 1006, notes; Derby Bank v. Landon, 3 Connect. R. 62.
    The defendant, by taking possession, rendered himself accountable for the rent. He was to blame for letting the mortgaged premises to Smith, who was insolvent.
    No notice or demand was necessary before bringing the action ; it was the defendant’s duty, when he received the 30 dollars, to pay that sum to the plaintiff, without waiting for any demand. Com. Dig. Pleadei, C69, C75; Brice v. Carre, 1 Lev. 47; Hard. 42; Luntv. Padelford, 10 Mass. R. 231.
    
      Hubbard and Marsh, for the defendant.
    The cases cited on the other side are far from sustaining the position, that the entry of the defendant for the purpose of foreclosure amounts to payment; and to give such an effect to that act would be unreasonable. Marshall v. Bryant, 12 Mass. R. 321; Hill v. Halford, 2 Bos. & Pul. 413.
    The plaintiff cannot recover on the money count, as the special contract is unrescinded. 2 Phil. Ev. 83; 2 Com. Contr. 19 ; Robertson v. Lynch, 18 Johns. R. 451. The defendant is not bound to pay any thing until the whole amount is collected. Penoyer v. Hallett, 15 Johns. R. 332 ; 10 East, (Am. ed.) 395, note; Dorr v. Mew England Mar. Ins. Co. 4 Mass. R. 231. And certainly he is not bound to pay every small sum which he may collect, until he is called on for if.
    
      Sept. 12th.
   Per Curiam.

We think it very clear that the suit and judgment on the mortgage, and the entry and possession under it, cannot be construed a payment of the debt by Smith to the mortgagee. The whole is but a process to compel payment, and is only equivalent to an entry to foreclose without a judgment. To consider it payment would be to compel the mortgagee to become a purchaser,' when he might choose to hold the premises as a pledge or security for the debt.

After foreclosure, the indefeasible title being in the mortgagee, the estate may be valued, and he may then be deemed to have received payment pro tanto. The cases cited are all of the latter sort, where the right of redemption is extinguished. Such must have been the case of Amory v. Fairbanks, which has been much relied on.

In regard to the sum of 30 dollars, for which ■ a verdict has been rendered for the plaintiff, we think that on a contract to pay a sum of money, when it should be collected out of certain funds, the promisor is not obliged to pay over every small sum as he shall collect it; certainly not without a demand. It must have been expected that the defendant should have time to collect the whole sum due to the plaintiff. There may be cases where only a part can be collected, and there it may be proper to pay it over ; hut this case is not of that kind.

Plaintiff nonsuit. 
      
       See Hedge v. Holmes, 10 Pick. 380; 1 Hilliard’s Abr. 341, et seq. and cases cited; Revised Stat c. 107, § 33.