Court Opinion

ID: 6236630
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:34:02.886957+00
Date Added: 2024-06-11T08:58:04.173677
License: Public Domain

Mr. Justice Green
delivered the opinion of the court,
*149We think the first assignment of error is sustained. It appears upon the face of the auditor’s report and by the testimony returned with it, that certain moneys, amounting in the aggregate to $709.18, had been paid by the assignee prior to the assignment directly to Mary Smith, the holder of the mortgage against Friling, the assignor. Other payments were made by the assignee after the assignment, in full discharge of the judgment on the mortgage, and for these credit was allowed to the assignee. But the payments made before the assignment were not allowed. The auditor seems to have been influenced mainly by the consideration that there was no written transfer of any portion of the mortgage by Mrs. Smith to Brice, and that there was a transfer of other assets to Brice by Friling to secure him for the payments made to Mary Smith on her mortgage, and against certain liabilities he had incurred for Friling. He does not state whether anything was realized by Brice from the transfer of the book account that could or would be applicable to the repayment of the moneys paid on the mortgage. In the absence of any testimony or finding to that effect, it is fair to presume that Brice obtained no indemnity from that source. On the question whether there was any agreement or understanding by which Brice was to be secured for such payments, there was testimony which does not appear to have.been contradicted in any manner. A. N. Brice testified as follows : “ I had made advances to make up the difference between this sum ($4106) and the credit in my account of $5109.10.” Mr. Wolverton asks Mr. Brice how he was to be secured for these several advancements. Answer: “I was to be repaid out of the mortgage. They were simply advancements on the mortgage. These payments were not of my own individual fund. I was not reimbursed in any other way by Mr. Friling. * * * I had no arrangement with J. W. Friling for this security. He knew that I was to be secured in this way. It was a verbal understanding; there was nothing written. * * * Mrs. Smith asked me how 1 wanted to be secured for the payment of this money. I replied I was to be secured out of the mortgage. She said ‘ very well, then, I don’t want to see you lose the’money advanced.’ Mr. Friling said something like that in her presence. He had no security then to give.”
This testimony was in no way contradicted or impeached, and is therefore to be accepted as true. The conclusion of the auditor was not a finding of fact adverse to the testimony, but a conclusion of law, holding it to be insufficient to create any interest in the mortgage or the debt secured thereby. In that conclusion, as well as in the opinion of the court to the same effect, we think there was error. There was no pretence of any kind of fraud or collusion on the part of Mr. Brice in making the payments or in taking credit for them in his account. On the contrary, the argument is that he did not take sufficient care of his interests by procuring a *150written transfer of a part of the mortgage corresponding with his payments. If a writing were necessary in order to create in him an interest in the mortgage, the decision of the auditor and court below would be right. But it has been frequently held that a written transfer is not necessary to accomplish that result. In Lithcap v. Wilt, 4 Phila. 64, it was held that “ the essential difference between the purchase of a debt and the payment of it, depends upon the intention of the parties at the time; but the payment by a stranger to the obligation, of the debt, or by one whose liability was secondary, is prima facie a purchase.” In Wilson v. Murphy, 1 Phila. R. 106, the court say, “ There is no doubt that a mortgage may be kept alive even after payment in full, if such was the intention of the parties, and even though there be no actual assignment to a trustee. Equity will consider that as done which was agreed to be done, and not' suffer the trust to fail for want of a trustee.” In McCall v. Lennox, 9 S. & R. 304, Tilghman, C. J., says: “An assignment of the debt carries with it the benefit of the mortgage, although the mortgage be not specifically assigned. From the moment the debt is assigned the mortgagee becomes the trustee of the assignee.” In the same case Gibson, J., said: “Chancery will order a security to be assigned in favor of a surety who has paid it.” And Duncan, J., said: “ Whatever will give the money will carry the estate in the land along with it. The estate in the land is the same thing as the money due upon it. * * * The assignment of the debt or forgiving it will draw the land after it as a consequence. It would do it though the debt were only given by parol: Weston’s Lessee v. Mowlin, 2 Burr. 969.” And again, “the debt being paid or in any other manner extinguished, the mortgagee becomes a trustee for the mortgagor.” In Johnson v. Hall, 3 Johns. Cas. 329, Kent, J., said: “ When the note to secure which the mortgage was given was negotiated, the interest in the mortgage, which was given for no other purpose than to secure that note, passed of course. It required no writing, no assignment on the back of the mortgage.” * * * “ Whoever was owner of the debt was likewise owner of the security.” In Rickert v. Madeira, 1 Rawle 328, Rogers, J., says: “ Whatever will give the money secured by the. mortgage will carry the mortgaged premises along with it. The forgiving the debt, although by parol, will draw the land after it as a consequence.”
It has been many times decided that a mortgage may be transferred by parol, and that when given to secure notes payable ,to bearer, the holder is the equitable owner of the mortgage. Whoever pays the debt for the mortgagor'is the equitable owner of the mortgage. See 1 Hilliard on Mortgages 243, 253.
We think the authorities cited show that when one who is a stranger to the obligation pays the debt in whole or in part, in the absence of evidence to the contrary, he becomes by implication a *151purchaser of the debt to the extent of his payment. In the present case Brice was an entire stranger to the debt due by Friling to Mrs. Smith. He was under no kind of obligation to pay it. There is no affirmative testimony that when he made the payments he thereby intended to extinguish the indebtedness to that extent. This lack of testimony would alone qualify him to be regarded as a purchaser. But the case is stronger than that. The testimony already quoted, contradicted by no one, shows that he at least intended to be secured by the mortgage given to secure the debt upon which the payments were made. When he testified, “I was to be repaid out of the mortgage. They were simply advancements on the mortgage;” and “Mrs. Smith asked me how I wanted to be secured for the payment of this money, I replied I was to be secured out of the mortgage. She said ‘very well, then, I don’t want to see you lose the money advanced,’ ” a clear case of concurrent assent is made out between Brice and the mortgagee to treat the payments as the, acquisition of an interest, and not as on absolute extinguishment. Certainly if he had paid the entire debt he would have become the equitable owner of the mortgage, and could have compelled its transfer to himself. We see no reason why a partial interest could not be acquired by a partial payment in the same manner as an entire interest by an entire payment. In equitable contemplation it is the fact of payment which creates the interest, and this controlling fact has the same effect in principle whether the payment be partial or entire. When Mrs. Smith brought suit on her mortgage she claimed, and took judgment for, the whole amount of the mortgage and interest, without any deduction for the payments made by Brice. This was in apparent conformity with the understanding testified to by Brice, and adds strength to the other affirmative testimony on that subject. She was then the legal owner of the mortgage and judgment to the extent of the amount remaining due to her, and the trustee for Brice as to the amount paid by him. This being so, Brice was entitled to credit for the whole amount of the judgment and interest paid by him, and the auditor and court below were in error in rejecting the credit for $709.18 paid prior to the assignment.
As to the second error assigned, we do not, in view of all the circumstances of the case, see any sufficient reason for interfering with the action of the court below in regard to the compensation of the accountant, and this assignment is not sustained.
Decree reversed and record remitted, with direction to the court below to allow the accountant credit for the full sum of five thousand one hundred and nine dollars and ten cents ($5109.10) paid to Mary Smith at the same time and in the same manner as appears in the original account of the assignee, the costs of this appeal , to be paid by the appellees.