Court Opinion

ID: 5233073
Source: CourtListenerOpinion
Date Created: 2022-01-06 17:02:06.049169+00
Date Added: 2024-06-11T08:27:41.633189
License: Public Domain

Putnam, J.:
The complaint in this foreclosure shows that although Mrs. Castrogiovanni assumed the payment of the two prior mortgages, she did not undertake to pay the one now in foreclosure, and no personal judgment against her is asked. In this situation the land becomes the primary fund for payment, and if Mrs. Castrogiovanni, to protect her interests, raises the sum due, she may possibly have a remedy over against Palasca and Polito, upon their bond.
Mrs. Castrogiovanni did not answer in the suit. She arranged to raise the money to pay plaintiff by a loan through the David Mayer Brewing Company, which, in view of the other incumbrances on the property, stipulated for an assignment of the plaintiff’s mortgage. This was directed by the Special Term, also that upon payment of principal, interest and costs, the Mayer Brewing Company should be substituted in the force closure suit.
Can an owner of the equity of redemption thus require a mortgagee to assign the debt, so as to let the debtor raise the money from a third person ?
If the respondent, Mrs. Castrogiovanni, had assumed the payment of this mortgage, and then remained the one primarily answerable for the debt, she would show no ground to demand an assignment of the mortgage. (Dunstan v. Patterson, 2 *32Phill Ch. 345 [COTTENHAM, L. C.]; 27 Cyc. 1294d; Ettsworth v. Lockwood, 42 N. Y. 89.) In such case a tender of the mortgage indebtedness may be conditioned on the production of the bond and mortgage, with execution of a satisfaction piece. (Halpin v. Phenix Ins. Co., 118 N. Y. 165.)
Where, however, the mortgage payment comes from one who is not primarily liable, so that an assignment to keep the mortgage alive will be a more complete protection to the person paying the money, the mortgagee may be compelled to make an assignment of his security. (Johnson v. Zink, 52 Barb. 396; 51 N. Y. 333; Cole v. Malcolm, 66 id. 363; Twombly v. Cassidy, 82 id. 155; Welling v. Ryerson, 94 id. 98, 103; Howard v. Robbins, 170 id. 498; Pom. Eq. Juris. § 1214; Jones Mort. [6thed.] § 793.)
Whether or not such a formal assignment will keep the mortgage alive in equity, however, does not depend on such an instrument. An assignment which does not increase the liens on the property may be directed without notice to the junior incumbrancers. (Twombly v. Cassidy, supra.) The decisions -of New York have extended the principle beyond the ancient rule which limited such substitution to sureties only, and now recognize a right to keep on foot a mortgage security, by one who pays it off, but who nevertheless may still require its continuance for the ultimate adjustment of the liabilities of other owners or incumbrancers, or reimbursement by persons liable over for its payment.
The more general right to have a mortgage assigned should not work harm. The mortgagee gets his money, and his assignment should be without recourse. In general, any person not the principal debtor, primarily and absolutely liable for the mortgage debt, by paying off a mortgage thereby becomes the equitable assignee thereof, and may keep alive and enforce the lien so far as it may be necessary for his own benefit. (Pom. Eq. Juris. § 1212.) A formal assignment preserves this equity as against the rights of strangers or purchasers. If the assignment for any reason becomes the means of injury or oppression, equity will disregard it, but the right to procure such an assignment is less liable to abuse than to forbid it, as did the older authorities, to any but strict sureties. (Bigelow v. Cassedy, *3326 N. J. Eq. 557.) Thus the assignment of a mortgage may now be enforced under the statutes in Michigan, Pennsylvania and Iowa. (Jones Mort. [6th ed.] § 1087.)
To afford a complete relief, the precedents also justify substituting the assignee as dominus litis in the pending foreclosure suit, or in directing that such suit be discontinued upon an assignment being executed. (Twombly v. Cassidy, supra.) Such an assignment may, in form, refer to the court order directing it, and may also contain the usual covenant as to the amount due and as against the mortgagee’s acts, without further covenants on behalf of the assignor, and being otherwise without recourse.
I, therefore, recommend that the order appealed from be modified as provided in the last clause of the opinion, and as so modified affirmed, without costs.
Jenks, P. J., Burr, Carr and Rich, JJ., concurred.
Order modified as provided in the last clause of opinion, and as so modified affirmed, without costs.