Court Opinion

ID: 3587711
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:37:13.161251+00
Date Added: 2024-06-11T13:59:26.194435
License: Public Domain

In this controversy, respecting surplus moneys, the respondent, William Peet, as receiver of Blydenburgh, represents his interest, and the appellant, Bingham, equally represents the interest of Johnson, whose equity of redemption he has acquired. The assignment of the mortgage by Blydenburgh to Underhill was by way of mortgage of that instrument, to secure the note which Blydenburgh had *Page 432 
given to Underhill. The suit was against Blydenburgh as the mortgagee of the original mortgage, and against Johnson as the mortgagor of the real estate. All the defendants suffered the decree to be taken, as confessed, and the usual order of foreclosure and sale was made. But instead of applying the proceeds of the sale, after payment of the amount due to Underhill and the costs, to the discharge, as far as it would go, of the balance of the mortgage debt, it was directed to be deposited with the county treasurer, subject to the order of the court. As Underhill was only the assignee of Blydenburgh, and had no other or greater rights than he had, I am of opinion that the decree affirming, as it did, the validity of the mortgage, and the equitable right of Blydenburgh and his assignee to enforce it, precludes the appellant from raising the questions principally discussed by his counsel. It establishes that the mortgage was a valid security and incumbrance in the hands of Blydenburgh, and that he had a legal right to assign it by way of mortgage to Underhill. The appellant's points affirm that the mortgage was not operative, and was incapable of being enforced by the mortgagee or any assignee of his. The only position which I conceive to be open to Johnson, or his grantee, Bingham, to litigate, is that of payment to Blydenburgh of the mortgage debt, except so much thereof as was required to pay the note held by Underhill, or a set-off of enough to cover the balance of the mortgage debt beyond the debt to Underhill and interest.
There is no pretense of a payment of these particular mortgages, or of a set-off against the moneys due thereon. The surplus moneys are claimed on the ground that under the terms of the agreement of the 15th March, 1856, and the facts proved in connection with that agreement, Blydenburgh had no right to treat the mortgage as an operative security, or to assign it, and that the assignee was equitably precluded from enforcing it. The contrary of that position was held by the Supreme Court in the case of Braman v. Johnson, and that judgment has been affirmed in this court, and, as I *Page 433 
have said, the decree in the present case is a further adjudication against that defense.
But if we look again into the agreement the same result will follow. Although all of the large number of lots purchased by Johnson were embraced in a single conveyance, containing a general covenant of warranty, the mortgages were each upon the separate lots, and a provision in the agreement renders the covenant several and distributive, as though a separate deed and covenant had been given in respect to each of the several parcels of land embraced in each of the mortgages. After providing that in any action on the covenants, the consideration of the purchase of all the lots shall be reckoned as $200,000, and it is added that "if the title of any particular lot or lots shall fail, he (the grantor, Blydenburgh) shall only be held responsible for the first proportional part of such consideration for such lot or lots." The value of each lot or lots included in each mortgage, as adjusted by the parties, is the money secured by the mortgages respectively, and the covenants are therefore to be construed as though each parcel had been conveyed for the sum expressed in the mortgage, which was given by the purchaser to the vendor. It is not contended that Blydenburgh had not a good title to each of the lots embraced in this foreclosure, though he had no title to some others of them, or that any of the incumbrances which existed upon them has ripened into a title. The sale was subject to the rights of all of the prior incumbrancers, none of whom appear to have been made parties to the foreclosure. The moneys, therefore, which have been paid to Underhill, and the residue of the proceeds of the foreclosure sale, which is the subject of this controversy, represent the value of the interest acquired by Johnson, under his conveyance from Blydenburgh.
But I am of opinion that Blydenburgh had a right to treat the mortgage in question as a perfect and operative security on account of a default on the part of Johnson to perform the agreement. By a clause in the instrument Johnson was bound to pay $15,000 in three installments, the last one being payable by the 15th of July, four months from the date of *Page 434 
the agreement, for the purpose of discharging arrears of taxes and assessments. This stipulation seems to have been a condition precedent to the various stipulations by Blydenburgh for the advantage of Johnson; for it is declared to be essential to the proper working of the general arrangement; and also that in case of failure on the part of Johnson in this respect, Blydenburgh might at once enforce payment of all the bonds and mortgages. Blydenburgh was to afford certain accommodations and facilities to enable Johnson to raise the money. These were to consist in Blydenburgh assigning some of the bonds and mortgages to the parties who should advance the money, making such a deduction from the amount as Johnson would be entitled to, upon the payment of the amount himself; or to assign some of the bonds and mortgages as collateral security. But Johnson was to find the lenders, or, as it is expressed, raise the money. This he omitted to do. The main object of the agreement, it is apparent, was to obtain the advantage of Johnson's address and management in procuring funds to extricate the estate from its embarrassment, and it was obviously a most important matter, upon which the whole enterprise hinged. The only pretense of money raised by or through the agency of Johnson, was that spoken of by Bingham; but it was shown that this was obtained by the assignment of mortgages by Blydenburgh to Bingham as late as August and September, 1856, and after the default of Johnson in raising the $15,000. After such default, Blydenburgh, as we have seen, had a perfect right to demand and enforce payment of all the bonds and mortgages, and he could therefore assign them at his pleasure. The defect in the argument of the appellant's counsel consists in treating the assignments of mortgages made by Blydenburgh after the default of Johnson, as payments made by the latter under the agreement, of so much of the purchase-money. I consider, on the contrary, that in assigning them, after the default, Blydenburgh was only availing himself of his rights as mortgagee, which had become perfect by the default of Johnson in raising the $15,000.
The order should be affirmed. *Page 435