Court Opinion

ID: 6578532
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:36:25.191885+00
Date Added: 2024-06-11T15:57:11.569959
License: Public Domain

PlRK, J.
It is unquestionably true in ordinary cases, that where A holds two mortgages upon the same land and B owns the equity of redemption, a foreclosure of one of the mortgages will extinguish B’s equitable interest in the premises.
And it is equally true that A may so conduct toward B that the latter will be entitled to equitable relief against such a result. As if J. should say to B, after the decree of foreclosure was passed and before the time limited for redemption had elapsed, that he might pay the mortgage debt after the time limited had expired, and no advantage should be taken of the decree, and B should in consequence suffer the time to expire without paying the debt. Or if A should obtain his *64decree by fraud, or after he had obtained it should deceive B in relation to the time limited for redemption, and B should in consequence fail to redeem. In these cases a court of equity would allow B to redeem if he should bring a petition for the purpose, and had not impaired his equitable rights by any negligence or acquiescence, and the .rights of third parties had not intervened. A party must not only come with clean hands into a court of equity, but he must deal in good faith with the court, as well as with his adversary, in order to obtain a decree that shall preclude any further relief to the party against whom it is rendered.
In the case under consideration a majority of the court are of the opinion that the respondent obtained . his decree by fraud, or by conduct grossly inequitable to the petitioner, and in either case the petitioner should have the right to redeem the premises notwithstanding the foreclosure.
While the case was pending in court and at the term in which the decree was passed, the respondent agreed with-the. petitioner that certain payments that had been made by the petitioner, but which had never been applied by the respondent in part payment of either of the notes, should be applied to the note secured by the second mortgage.
Up to this time the petitioner had defended in the suit. His defense consisted in efforts to reduce the claim of the respondent. The respondent was desirous to avoid his defence and obtain a decree for the full amount of the first mortgage claim. In this state of things it was agreed that the payments that had been made should apply to the second mortgage debt, and that the petitioner should disappear in the suit, and suffer the respondent to obtain a decree for the full amount of the first mortgage claim. In consequence of the agreement the petitioner abandoned his claim to have the payments apply to the first mortgage debt, withdrew his defense, and suffered the respondent to take his decree for the full amount of the first mortgage claim.
After the decree was passed the respondent refused to fulfill his agreement, brought a petition to foreclose the second *65mortgage, and claimed the full amount of the note. The conduct of the respondent in this transaction should deprive him of all benefit resulting from his decree. He never intended to fulfill his agreement at the time it was made, but adopted that course to gain advantage over an ignorant and confiding foreigner.
He also gave the petitioner to understand that he should have the right to redeem the premises when a petition should be brought to foreclose the second mortgage, for it seems that it was a part of the agreement that the respondent should erase from his petition so much as referred to the second mortgage, and that all the rights of the parties should finally be determined in a petition thereafter to be brought.
The respondent brought such petition when the time limited for redemption in his decree was on the eve of expiring, and prosecuted his claim long after he had full title to the premises, if his foreclosure was of any avail. Under all these circumstances we think the petitioner still has the right to redeem the premises. Brown v. Wheeler, 17 Conn., 845 ; Roe v. Jerome, 18 id., 138; Dyer v. Cady, 20 id., 563 ; Cowles v. Bacon, 21 id., 451.
There is no error in the decree complained of.
In this opinion McCurdy, J., concurred ; Hinman, C. J., dissented; Butler and Carpenter, Js., did not sit.