(56 Misc. Rep. 126.)

#### KELS v. WEST et al.

(Yates County Court

October, 1907.)

Mortgages—Sai/e—Order of Offering for Sale.

Two parcels of land were mortgaged to secure a certain debt, and one of them was thereafter released and a new mortgage given on it by the original mortgagor as collateral security to the first mortgage. The mortgagor thereafter sold the parcel that was not released, retaining title to the parcel that had been released and remortgaged. *Held,*on foreclosure of both mortgages, the parcel covered by the collateral mortgage still 'belonging *to the*mortgagor should first be sold *to*pay the mortgage *debt.*

[Ed. Note.—For cases in point, see Cent. Dig. vol. 35, Mortgages, § 1516.J

Action by George Kels against Jacob West and others for foreclosure of mortgages. Motion for confirmation of report of referee as to surplus money. Report confirmed.

George S. Sheppard, for the motion.

H. C. Harpending, opposed.

KNOX, J.

Upon foreclosure of two mortgages in this action,, held by plaintiff, a surplus has arisen of $117. To this surplus the defendant Lewis lays claim under a mortgage held by him upon one *1109of the parcels sold. The plaintiff insists he is entitled to it because of a judgment recovered by him against the defendant West. September 20, 1884, West gave a mortgage to Freeman in the sum of $1,125, on two pieces of land, one of 11% acres and the other 7% acres. March 28, 1885, the mortgagee released to the mortgagor the 7% acres from the operation of this mortgage, and then, on March 29, 1890, assigned the mortgage then resting on the 11% acres to the plaintiff. April 15, 1885, West executed another mortgage to Freeman covering the 7% acres above mentioned and a small piece of 3 acres. The latter piece of 3 acres is not involved in the foreclosure action. This last-mentioned mortgage recited that:

> “This mortgage is made as collateral security to a certain mortgage made and executed by the said Jacob West to the said Benjamin F. Freeman to secure the payment of .the sum of $1,125 and interest thereon in five years from the 1st day of April, 1885. Said mortgage is dated on the 20th day of September, 1884, and recorded in Tates county clerk’s office, in Liber 43, at page 174, on the 7th day of November, 1884. This grant is intended as a security for the payment of the sum of $1,125 in five years from the 1st day of April, 1885, with interest thereon from April 1, 1885; said interest payable annually on the 1st day of April of each and every year according to the terms and conditions of the said mortgage.” .

This mortgage was also assigned to the plaintiff, and the two mortgages are set out in the complaint. February 1, 1887, West conveyed the 11% acres to one Margeson, and on the same date took a mortgage thereon for part of the purchase money. This mortgage was assigned by West to the defendant Lewis. April 13, 1905, the plaintiff recovered a judgment against West and another for $130.70. Upon the sale the 7% acres were first sold, the proceeds of which were insufficient to satisfy the mortgage claim of plaintiff; and thereupon the other parcel of 11% acres was sold and sufficient funds were obtained to satisfy the plaintiff’s mortgage claim and leave the surplus of $117.

Notwithstanding the order in which the two parcels were actually sold, counsel for the judgment creditor insists that the sum realized for the parcel last sold should first be applied on the mortgage debt, thereby extinguishing the mortgage lien and claim of Lewis, and that then the surplus in question would be regarded as having arisen from the sale of the other parcel, and consequently would belong to the judgment creditor. It seems to me, however, that, in case an application to the court had been made for directions as to the order in which the parcels should have been put up for sale, direction would necessarily have been given to sell the premises in the order which was actually adopted and followed by counsel for plaintiff in the action.

The referee has reported the surplus to belong to Lewis by virtue of his mortgage claim. I can see no error in the report, and therefore conclude that the same should be confirmed.