Court Opinion

ID: 5559611
Source: CourtListenerOpinion
Date Created: 2022-01-11 00:47:49.131376+00
Date Added: 2024-06-11T08:35:26.264309
License: Public Domain

Bleckley, Justice.
Certain land belonged to Mrs. Carroll. Huntington held *285a mortgage on it to secure a debt which she owed him. Mrs. Carroll sold the land for full value to Ray, taking his negotiable note for the price, and giving him her bond for titles. In the bond she referred to the mortgage and directed Ray to pay it off, giving the direction in a way to imply that so much of the price included in the note as was necessary to discharge the mortgage should or might be so applied by Ray. Mrs. Carroll sold and transferred the note to Noyes, who paid for it, not full value, but its value less the mortgage debt. Noyes bought with notice of the mortgage and of all the facts which control Ray’s rights, whatever they are, as against Mrs. Carroll. The mortgage was not paid. It was foreclosed, and the land was sold under the judgment of foreclosure, Noyes being the purchaser. He, retaining the land thus acquired, brought suit against Ray upon the note, his claim being for the balance after deducting what the land sold for at the mortgage sale. The question is, can he recuver?
lie stands in Mrs. Carroll’.-, shoes, having taken the note from her with notice of all the facts. The land was sold away from Ray, not as his property or to pay his debt, but as Mrs. Carroll’s property and to pay her debt. Suppose she had not transferred the note, and had herself purchased the land when sold as her property at the mortgage sale, and then dispossessed Ray, could she have collected any part of the note without restoring the consideration for which it was given, that is, the land ? Surely not. We can see no propriety in making the amount which the land brought at the sale the measure of Ray’s credit on the note. If the land had been sold as his, under process against him, what it brought would have been his money ; but as it was sold under a mortgage fi. fa. against Mrs. Carroll, as her property, what it brought was Mrs. Carroll’s money, and there is no reason for treating that money as standing in lieu of the land, relatively to Ray. What he stipulated to g§t was the land, free from incumbrances, not the proceeds of a sale of the land under an incumbrance. The only *286fact against him is that, under the direction given him in Mrs. Carroll’s bond for titles, he ought to have paid off the mortgage and protected the property, taking credit on his note for the amount so paid; but to make him forfeit the land, or some arbitrary part of its value, for omitting to do this, would be too harsh. The direction in the bond, considering that the mortgage would mature before Ray’s note became due, is to be looked at, perhaps, as more in the nature of a permission than a command. Even treating Ray as having covenanted to discharge the mortgage by the application to it of a part of the purchase money which lie was to pay for the land, the breach of his covenant should be followed by bis accounting for the actual damages which resulted from it, and not by his exclusion from ail interest in the land through a purchase of the land at the mortgage sale by Mrs. Carroll, or JSI oyes, her transferee. If some other person had been the purchaser at that sale, or if Noyes stood exempt from the restraints that would have rested on Mrs. Carroll had she not transferred the note, we might see the way to a different conclusion; but as it is, the verdict was correct, and there was no error.
Judgment affirmed.