Case Name: Barnabas Hedge versus William Holmes
Court: Massachusetts Supreme Judicial Court
Jurisdiction: Massachusetts
Decision Date: 1830-10
Citations: 10 Pick. 380
Docket Number: 
Parties: Barnabas Hedge versus William Holmes.
Judges: 
Reporter: Massachusetts Reports
Volume: 27
Pages: 387–389

Head Matter:
Barnabas Hedge versus William Holmes.
If » mortgagee forecloses and then conveys to a person having another mortgage on the same estate, in an action by the latter mortgagee, to recover the debt secured by his mortgage, the mortgager is not entitled to prove, as evidence of payment of such debt, that the mortgaged premises and the rents and profits thereof are of greater value than the sums secured by both mortgages, for by the conveyance to the plaintiff from the other mortgagee the plaintiff obtained an absolute title wholly independent of his own mortgage.
Assumpsit on a promissory note made by the defendant to the plaintiff. Plea, the general issue.
At the trial, before Morton J., the defendant offered to prove that on November 22d, 1808, the day of the date of the note, he gave the plaintiff a mortgage deed of certain real estate as collateral security for the note, that the plaintiff had entered into possession of this estate, that it was of greater value than the amount of the note, and that the rents and profits were of greater value than the amount of the note.
The plaintiff showed, that on April 6th, 1808, and also on July 13th, 1811, the defendant mortgaged the same premises to the Plymouth bank, that these last mentioned mortgages were put in suit, a conditional judgment rendered thereon, and possession of the estate given to the attorney of the bank, by the sheriff, by virtue of a writ of possession, on November 13th, 1817, and that on December 6th, 1821, the bank released the mortgaged estate to the plaintiff.
The defendant then offered to prove, that from the time of the delivery of possession to the bank, he had continued to have possession of two parcels of the real estate mentioned in the mortgages, and that from the date of the deed of the bank to the plaintiff, the plaintiff had continued to receive the rents and profits of the residue of the estate, and that these rents and profits were of greater value than the amount of the note declared on. He further offered to prove, that the land of which the plaintiff had taken possession, was of greater value than the aggregate of the sums due on the mortgages to the bank and on the note on which this action was brought.
But this evidence was rejected and a verdict was returned for the plaintiff. If the evidence was admissible, a new trial was to be granted ; otherwise judgment was to be rendered on the verdict.
Oct. 26th
Eddy
insisted that the evidence offered by the defendant was admissible. The bank, by foreclosing the third mortgage, must be deemed to have paid the two preceding mortgages, and all the equitable estate and charges on the land became merged in the legal estate. If there was no merger, the defendant has a right to consider the plaintiff as holding under his own mortgage. It would be contrary to the plainest principles of equity, to view him as a stranger purchasing of the bank. Gardner v. Astor, 3 Johns. Ch. R. 53 ; Starr v. Ellis, 6 Johns. Ch. R. 393; James v. Johnson, ibid. 417 ; Burnet v. Denniston, 5 Johns. Ch. R. 35 ; James v. Morey, 2 Cowen, 246 ; Aymar v. Bill, 5 Johns. Ch. R. 570 ; Jackson v. Willard, 4 Johns. R. 41 ; Forbes v. Moffatt, 18 Ves. 384; 4 Kent’s Comm. 100 ; Freeman v. Paul, 3 Greenl. 260; Newhall v. Wright, 3 Mass. R. 138 ; Pomeroy v. Winship, 12 Mass. R. 514 ; Scott v. M'Farland, 13 Mass. R. 309.
Beal and J. Thomas, for the plaintiff.

Opinion:
Shaw C. J.
afterward drew up the opinion of the Court. The plaintiff having shown a good right to recover upon a promissory note, was entitled to a verdict, unless the defendant could establish some legal defence. In order to prove payment, in whole or in part, the defendant offered to show that a mortgage, bearing even date with the note, was given for its security, and that the plaintiff had been in the possession of the estate, and that the rents and profits, and the value of the estate itself, were more than the amount of the note.
It is now a well settled rule of law in Massachusetts, that where a bond or simple contract debt is secured by mortgage, and the mortgagee enters for condition broken, and proceeds to foreclosure so as to hold the land free of redemption, he shall be deemed to have taken it in payment, and if the value of the land equals or exceeds the debt, it shall extinguish it ; otherwise it shall enure by way of payment pro tanto, and the value shall be ascertained by appraisement, when suit is brought for the debt. Newhall v. Wright, 3 Mass. R. 150 ; Amory v. Fairbanks, 3 Mass. R. 562. Had the plaintiff entered and foreclosed the mortgage given as a security for this debt, it would have been competent evidence of payment under the rule.
But it appears from the facts, that the same premises were conveyed by two distinct mortgage deeds to the Plymouth bank by the defendant, to secure debts to them. One of these preceded, and the other was after that given to the plaintiff. It further appears that the bank entered under a judgment on their mortgages, by an habere facias, in November 1817, and of course, their title became absolute in November 1820. In December 1821, the bank released to thes plaintiff. By this conveyance he obtained an absolute title wholly independent of his own mortgage. Before this deed of the bank to him, he as well as the mortgager was foreclosed by the judgment in favor of the bank, and the lapse of three years.
There is therefore'no evidence, and no presumption, that he ever entered under his own mortgage, and he cannot therefore be held to account either for the value of the estate, as having foreclosed, or for rents and profits, as having been in under his mortgage. The evidence was therefore rightly rejected, having no tendency to show a payment, and there must be judgment on the verdict.
See Revised Stat. c. 107, § 33; West v. Chamberlain, 8 Pick. 336; Briggs v. Richmond, post, 396