Court Opinion

ID: 6414258
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:54:58.283477+00
Date Added: 2024-06-11T15:51:29.002334
License: Public Domain

Hoar, J.
It is very clear that the plaintiff’s right to redeem *535hia mortgaged stock has not been foreclosed. The statute requisitions for foreclosure have not been complied with.
The next question which presents itself is, whether the plaintiff" is entitled to a transfer of the stock on payment of the amount remaining due on his note, for which it is agreed that the stock was originally held by the defendant as collateral security. The agreement to hold the stock transferred as collatera. security, and by which the defendant agreed to reconvey it on payment of the note, contains these words : “ The loss on John Osborn’s house being bound by the same transfer of stock.” At the time this agreement was made, the defendant had purchased of the plaintiff" and one Williams a mortgage on John Osborn’s house; and had foreclosed the right of redemption by taking possession of the mortgaged premises in the presence of two witnesses, whose certificate of the fact was duly sworn to and recorded ; and the three years for redemption had expired. The only objection to the validity of the foreclosure is, that the certificate was not made on the back of the mortgage; and this is not required by the statute, and is unimportant. It thus appears that the stock was mortgaged not only to secure the payment of the note, but as an indemnity against any loss which the defendant might sustain on his purchase of the mortgage, which had resulted in the ownership of the house. That there has been a loss on the house, in any mode of viewing it, is evident. At the date of the agreement, November 17th 1857, the defendant had received nothing for the eight hundred dollars which it had originally cost him, and for more than four years’ interest upon that sum ; and the master finds that the house was then and has ever since been worth only eight hundred dollars. On the 2d of December 1857, the plaintiff gave his guaranty to the defendant against loss on the house, and in this the amount chargeable to the house up to the preceding July was stated at ten hundred and sixteen dollars. It is true, as the plaintiff contends, that the guaranty was a new and independent contract, on a new consideration; but it related to the same subject matter ; and is strong evidence of the understanding of the parties, both of the sum to be charged to the account of the house, and *536of the mode in which the question whether there would be a loss should be decided—namely, by a sale. There has been no sale, nor have there been any receipts from the house which would reduce its cost to its value.
The defendant is not bound, therefore, to reconvey the stock to the plaintiff, merely upon payment of the amount remaining due upon the note, but is entitled to hold it until he has been indemnified for the loss upon the house. And this result is decisive against the maintenance of the suit in its present form, because the bill does not recognize in any way the rights of the defendant to hold the stock except as collateral security for the note; and does not offer to have any account taken, or to pay anything upon any further liability.
But as great expense has been incurred in ascertaining the facts upon which the rights of the parties depend, they have very wisely agreed that the bill may be amended as the court shall think is requisite, upon proper terms, and that thereupon the account shall be settled upon the report of the master already made, in such manner as the court shall direct.
The plaintiff will therefore be allowed to amend his bill by introducing proper averments to show that the defendant holds the stock which he seeks to redeem as security for any loss upon the Osborn house, as well as for the payment of the note; and by praying for an account to be taken of the loss upon the house, and that it may be ascertained by a sale of the house, unless the defendant elects to take it at the master’s valuation, which he may do.
The plaintiff may then have a decree for the reconveyance of the stock, upon paying the amount found due according to the report of the master, after the value of the house has been fixed by a sale under the order of the court, unless the defendant is satisfied to take it at the valuation fixed by the master.
Interest is only to be allowed on the principal sum of eight hundred dollars, and not upon ten hundred and sixteen dollars. The accounts rendered by the defendant show that such was his understanding of the agreement; and the sums received for dividends on the stock were as applicable to reduce the interest on *537the eight hundred dollars which the house cost, as they were to the note.
There is nothing in the relation of the parties which we think should make the defendant chargeable with any rent which he did not receive, or entitled to any commissions.
We do not think the defendant was guilty of any loches in not making a sale of the house, as his letter of May 18th 1858, and the plaintiff’s indorsement on the guaranty under date of May 22d 1858, show that the sale was deferred by consent of both parties; and the plaintiff is not shown since that time to have requested that a sale should be made. The tender was insufficient in amount, and does not affect the rights of the parties.
Neither party is to have costs up to the present time. Not the plaintiff, because he has brought a suit which he could not maintain, in utter disregard of a substantial and well founded right of the defendant; nor the defendant, because he has unjustly denied and resisted the plaintiff’s right to redeem on any terms.
After the amendment of the bill allowed by the court has been made, the cause will be referred to a master, with directions to cause a sale of the Osborn house, unless the defendant elects to retain it at the valuation already fixed; and then to state the account in conformity with the rules above given, and to take an account of the dividends, interest, rents, taxes and expenses since the last report, unless the parties can agree without further litigation.