Court Opinion

ID: 6573907
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:32:29.236335+00
Date Added: 2024-06-11T15:57:00.311072
License: Public Domain

The opinion of the court was delivered by
Hall, J.
This is a bill in equity, brought by the assignee of a mortgage against the mortgagor and subsequent mortgagees, praying for a decree of foreclosure. A decree of foreclosure is resisted by Wardner and Hubbard, two of the subsequent mortgagees, who insist, that their peculiar relation to the complainant is such, as to prevent his being entitled to such a decree against them.
The general doctrines of equity, in regard to several owners of an equity of redemption, have not been much controverted in the argument ; and they indeed appear to be quite well settled. When several persons are interested in land, which is incumbered by a mortgage, whether that interest be as owners of distinct parcels of the land, or as tenants in common of the whole, the mortgagee is not, in general, obliged to take notice of their separate and distinct interests, but, on the non-payment of the mortgage money, is entitled (unless, perhaps, under very peculiar circumstances,) to a decree of foreclosure against all of them jointly. If the amount of the decree be not paid, the mortgagee takes the whole land, and the rights of the claimants to the equity are extinguished. None of the several owners of the equity are obliged to redeem; but each of them is at liberty to do so, for the protection of his own interest; and when one of several owners does so redeem, he becomes substituted, in equity, in the place of the mortgagee, and is entitled to hold the land, as if the mortgage existed, until the other owners pay him their shares of the incumbrance, — their shares being the pro rata value of their respective interests. The party redeeming becomes, in effect, the assignee of the mortgagee, for the purpose of enabling him to obtain the whole title to the land, if the other owners decline to contribute their respective shares towards the removal of the incumbrance. 2 Etory’s Eq., sec. 1023, 1227. Silver Lake Bank v. North, 4 Johns, *406Ch. R. 370. Pettz, v. Clark, 5 Pet. R. 481. Gibson v. Crehore 5 Pick. 152. Robinson v. Leavitt, 7 N. H. 73. Jenness v. Robinson, 10 Ib. 215. Russell v. Austin, 1 Paige 192.
In this case, in the absence of any contract between the second mortgagees in regard to the removal of the incumbrance of the HalJ mortgage, the plaintiff might have paid that mortgage, and then beer» substituted in the place of Hall, for the purpose of obtaining a contribution from them, and, in default of their payment, of enforcing a forfeiture of their interests. That the plaintiff, after paying his share of the mortgage, purchased and took an assignment of the residue, cannot in any degree impair the rights, which he would have obtained by the payment of the whole; and unless there is something in the contract between the parties to take the case out of the general rule, there can be no valid objection to the making of the decree of foreclosure claimed.
It is insisted in behalf of the defendants Wardner and Hubbard; that the contract between them and the plaintiff, which provided for a different ratio of contribution, towards the removal of the incum-brance, from that of their respective interests in the subsequenl mortgage, and by which they were to be indemnified out of tin: mortgaged premises, is to be construed as entitling them to be indemnified out of the land, before the second mortgage could be enforced upon it. If this be the correct construction, it is not perceived how it should be a sufficient answer to the present bill. By the agreement each of these parties was to pay one third of tin: mortgage now sought to be foreclosed, and then they were to bo indemnified out of the land. The payments were to precede tho indemnity. The complaint of the bill is, that the contract, the performance of which was to be the foundation of the indemnity, has not been performed by the defendants; that the payments have nof; been made; that, in consequence of the failure of these defendants to make their payments, the plaintiff has in effect been obliged to make the payments for them. The question is not, how the plaintiff shall have satisfaction for the third of the incumbrance which he was bound to pay and has paid, but what remedy he is entitled to, against the defendants, for making payments for the protection cl his own interest in the land, which they ought to have made. We see nothing in the contract, which should deprive the plaintiff of the *407equitable remedy, which would, in ordinary cases, be afforded to one of several persons interested in an equity of redemption, who removes the whole incumbrance. We think the plaintiff is entitled to a contribution from the two defendants of the respective shares of the Hall mortgage, which they were to pay, unless they choose to allow their interests in the equity to be extinguished by a failure of payment under a decree of foreclosure.
Whether, after a payment by the two defendants of their respective thirds of the Hall mortgage, they are to be indemnified for those payments out of the 1 and, before the subsequent mortgage takes effect, or whether the sums paid are to be added to their several debts against the corporation, as specified in the mortgage to them, and their indemnity is to be obtained under that mortgage, are questions which we think do not arise in this case.
The result is, that the decree of the chancellor is affirmed, and the case remanded to the court of chancery to carry it into effect.