Court Opinion

ID: 5550023
Source: CourtListenerOpinion
Date Created: 2022-01-10 21:33:00.122814+00
Date Added: 2024-06-11T08:35:02.731604
License: Public Domain

The Chancellor.
Is the sum of three thousand dollars mentioned in the pleadings and master’s report, to be1 deducted from the amount of the debt, which otherwise, ap- , . . pears to be due on this mortgage, or notr
Juba Storrs, Lucius Storrs and Caryl mortgaged to Williams for ten thousand dollars, on the fifth day of June 1814; Williams afterwards, became indebted to them, in the sum of three thousand dollars, for goods sold and money lent; and this debt was incurred, before Williams assigned the mortgage to the bank. In this state of facts, it was just, that the debt from Williams for three thousand dollars, should be credited and applied to the reduction of the greater debt due to him from his mortgage debtors; and the mortgagors had a right to insist that such a setoff should be made. The consent of Williams to this setoff, was not necessary. He "had no right to object to it; nor could he prevent it, otherwise than by paying his debt of three thousand dollars: and such a payment would have been in effect, equivalent to the setoff, as it would have enabled the mortgagors immediately to repay the same sum, on account of the mortgage. The .right of Juba Storrs, Lucius Storrs and Caryl to make this setoff, was an absolute right in them ; it was as perfect as any right of -setoff can ever be; and that which should have been done, is considered in equity, as done. But as Williams might have paid his debt of three thousand dollars, or might have voluntarily given credit for it, on the mortgage, the mortgagors were not obliged to assert their right of setoff until a demand of payment or some other cause, should render it necessary to adjust the true amount of the mortgage debt. The right of the mortgagors to make this setoff there-, fore, continued to reside in them; and no adjustment had taken place between them and Williams, on the thirtieth day of December 1818, when the complainants obtained their judgment against the mortgagors. The effect of this judgment was, to bind all the rights of the mortgagors over the mortgaged land, as those rights then existed; and to substitute the complainants in their place, with their rights. The right of the mortgagors to make this setoff, then became the right of the complainants, as judgment creditors; and.they *584may now assert that right, as the mortgagors might before have done.
Thus, when the complainants obtained their judgment, or certainly, before the assignment of the mortgage by Williams to the bank on the fifth day of June 1819, the mortgage debt was in equity, reduced by this sum of three thousand dollars. This sum being a just credit against the mortgage debt, in favor of the mortgagors, must be allowed to the complainants, who as judgment creditors succeeded to all the rights of the mortgagors. The bank took the mortgage subject to all the rights and equities which existed against it, in the hands of Williams. Clute against Robison, 2 John. 595. No subsequent agreement or transaction between the mortgagors, the mortgagee and the assignee or any of them, can impair or affect the rights of the complainants, as judgment creditors of the mortgagors. The complainants have done no act relinquishing their right to this setoff; and it must be allowed as a credit in ascertaining the amount of the debt due on the mortgage.