Case Name: Pitman Building and Loan Association, complainant, v. Raymond Wright et al., defendants
Court: New Jersey Court of Chancery
Jurisdiction: New Jersey
Decision Date: 1930-04-15
Citations: 106 N.J. Eq. 47
Docket Number: 
Parties: Pitman Building and Loan Association, complainant, v. Raymond Wright et al., defendants.
Judges: 
Reporter: New Jersey Equity Reports
Volume: 106
Pages: 47–49

Head Matter:
Pitman Building and Loan Association, complainant, v. Raymond Wright et al., defendants.
[Decided April 15th, 1930.]
Mr. Morton C. Haight, for the complainant.
Mr. Willis Tullis Porch, for the defendant Horace T. Smedley.

Opinion:
Leaming, V. C.
There can exist no doubt touching the rights of the respective parties herein. The only issue is the claim of defendant Smedley, as owner of the second mortgage, that, as against him, complainant's mortgage should be charged with payment to the amount of the value of certain pledged stock. Complainant, the elder creditor, possessed two securities, only one of which was subject to the lien of the junior creditor. In the absence of intervening equities this entitled the latter, as owner of the second mortgage, to have the former, as owner of the first mortgage and pledgee of the stock, to apply, in the first place, the security peculiar to itself. It appears herein that with actual knowledge of the existence of the second mortgage complainant voluntarily surrendered the stock, its peculiar security. It follows that as against the second mortgage the first mortgage must be held to have been paid to the extent of the value of the stock at the time of its relinquishment.
It appears, however, that $755.70 was at that time applied to delinquent dues, fines, interest, insurance premiums and delinquent taxes. Since these applications enured to the benefit of the second mortgage that amount will be deducted from the withdrawal value of $1,099.50, and a credit will be imposed upon complainant's mortgage for only the difference. The following authorities fully support the views above stated. Herbert v. Mechanics Building and Loan Association, 17 N. J. Eq. 497; Washington Building and Loan Association v. Beaghen, 27 N. J. Eq. 98; Bacon v. Devinney, 55 N. J. Eq. 449; Sudbury v. Merchantville Building and Loan Association, 57 N. J. Eq. 342.
A reference may be made to a master to ascertain the amount due on the respective mortgages.