Case Name: Aymar against Bill and others
Court: New York Court of Chancery
Jurisdiction: New York
Decision Date: 1821-12-31
Citations: 5 Johns. Ch. 570
Docket Number: 
Parties: Aymar against Bill and others.
Judges: 
Reporter: Johnson's Chancery Reports
Volume: 5
Pages: 570–572

Head Matter:
Aymar against Bill and others.
December 31st.
Though a mortgagee may, by way of extinguishment, release all his interest to the mortgagor; yet he cannot convey it as a subsisting interest, absolutely, or by a way of mortgage, to a third person; especially, when the mortgage has not become absolute, and there has been no foreclosure For the debt cannot reside in one person, and the pledge in another.
Bill, to forclose a mortgage executed to the plaintiff, by the defendants Bill and J. D. Crane, on the 26th of August, 1818, upon a house and lot in the fifth ward; and also upon a house and lot in Vandewater street, in the city of New-York. The mortgage was executed to secure the payment of a bond for 4,500 dolllars, given by those two defendants to the plaintiff, to secure the purchase money of the house and lot. in the jfifth ward, which the plaintiff had then sold, and conveyed to those two defendants. The mortgage was duly registered on the day after its date. The defendant Bill, had previously, on the 9th of April, 1817, mortgaged the lot in Vandewater street to the defendant J. D. Crane, to secure the payment of one thousand dollars, which mortgage was registered on the same day, and was assigned by J. ID. Crane, on the 22d of September, 1818, to V. Fare, of whom the defendant F. is administratrix , and she, by her answer, claimed a preference over the plaintiff.
The question was, whether the mortgage to the plaintiff had a priority of lien over the mortgage executed by the defendant Bill to the defendant Crane, upon the lot in Vandewater street.
The point was argued by Dyckman, for the plaintiff, and by J. L. Riker, for the defendants.
The counsel for the plaintiff contended that the plaintiff had acquired an interest in the Vandewaler street iqt, by the mortgage from Bill, the owner of the equity, and was in a capacity to accept of a conditional release from Crane of his interest as mortgagee. He admitted, that so far as related to third persons, who had no interest in the pledge, the interest of the morgagee could not be sold or mortgaged separately from the bond or debt. A mortgagee may take a release of the lien of a judgment. It is every da^’s practice; and why not take the release of the lien of a mortgage ? Might it not have been done by a formal instrument, reciting all the circumstances ? Here the mortgage deed has sufficient granting words. It releases all the “ Estate, right, interest, claim and demand whatsoever,” of the two mortgagors to the lot in Vandewater street, as well as to the lot in thejfifth ward.
The counsel for the dependent F. insisted, that Crane had no interest in the lot in Vandewater street which he could sell or mortgage, as the mortgage was a mere security for the debt. (1 Mad. Ch. Tr. 11 John. Rep. 534. 4 John. Rep. 43. 1 P. Wm. 460. Domat, b. 3. tit. 1 Art. 9.) A mortgage may be released, which is not here pretended ; but it cannot exist independent of the debt. Nothing passed by the mortgage from Crane but his interest in the land purchased Irom the plaintiff, and nothing more was intended to pass. There is no estoppel against him, because he had an interest, which passed by the mortgage. (Co. Litt. 42. a. 327. b.) The plaintiff had no interest prior to the mortgage, on which the release could operate.

Opinion:
The Chancellor.
The interest of Crane, as mortgagee of the lot in Vandewater street was not, at the time of the execution of the mortgage to the plain tiff, an interest in the land, capable of being the subject of sale, either absolutely, or by way of mortgage, distinct irom the debt it was intended to secure. It does not appear from the case that the debt to Crane was even due, when the mortgage to the plaintiff was executed ; and it is clearly to be inferred, that the mortgage had not been foreclosed, or possession taken under it. Though such a mortgage interest may be, by way of extinguishment, absolutely released to the party, having the equity of redemption, yet it cannot be conveyed asa still subsisting interest, by way of mortgage, because ¡hat would separate she debt and the pledge, the latter to reside in one person, while the debt resided in anothen This cannot be done; and the case of Jackson v. Willard, (4 Johns. Rep. 41.) is decisive on the point-It is evident, that no such absolute release was. intended in ¡his case; and the act of Crm& in uniting in the mortgage with Bill, is rather to be referred to the legal estate which he derived from the plaintiff, than to his interest as such a mortgagee. He had an interest, which he was capable of mortgaging, and which he no doubt intended to mortgage, and the mortgage deed can have full operation by being applied to that interest. It cannot be applied to> his interest as a mortgagee in the other lot, consistently with principles of law, because he had no interest, in that character, capable of alienation, so long as he retained the debt.
There must be a sale of the mortgaged premises including the lot in Vandewater street, but with a reservation of ¡he junior right of the defendant F. to the proceeds of that lot. '
Decree accordingly.