Court Opinion

ID: 7285805
Source: CourtListenerOpinion
Date Created: 2022-07-25 20:26:54.339549+00
Date Added: 2024-06-11T16:19:07.456674
License: Public Domain

The Chancellor.
A prior mortgagee is not bound to notice the bill of a subsequent mortgagee filed on his mortgage, though he is made a defendant in the bill. The interest mortgaged to a subsequent mortgagee is an interest subject to the prior mortgage. The subject matter of the subsequent mortgage is the property or interest which the mortgagor has remaining in him after having given the first mortgage. This interest thus mortgaged to the subsequent mortgagee is an interest well known and understood, and may be foreclosed or sold under the decree of this court, on a bill by the subsequent mortgagee against the mortgagor of that interest. The subsequent mortgagee, on filing a bill for the foreclosure or sale of that interest, is not bound to make the prior mortgagee a party to his proceeding.
The prior mortgagee, though made a defendant, and served with process in the suit of the subsequent mortgagee, may take no notice of that suit, and file his bill on his own mortgage, and make the subsequent mortgagee a party. This is so from the nature of the different interests mortgaged. If it were not so, the control of the first mortgagee over his own securities, as to the time when ho will inforce them, and as to the time and mode of selling the property on execution, might be taken away from him by any person who might choose to make a loan and take a mortgage subject to his.
The subsequent mortgagee may file a bill either for a foreclosure and sale subject to the prior mortgage, or a bill to redeem the prior mortgages and for a sale to raise the redemption money and the amount of his own mortgage; or, if he files a bill and makes the prior mortgagee a party, and makes the proper prayer, and the prior mortgagee, by the course he takes in that cause, consents to it, the court may make a decree for the sale of the property, and that out of the proceeds the mortgages be paid according to priority.
*536In this case the bill is filed by a subsequent mortgagee and the prior mortgagee is made a party defendant. He need not have noticed the proceeding at all. JBut he filed a demurrer to the bill; and one cause of demurrer assigned is, that the complain-, ant asks to have the mortgaged property sold, and to be paid the amount of his mortgage out of the proceeds of the sale.
I think the bill and the prayer of it are not properly framed. It neither admits nor denies the prior mortgages; and its prayer is, that the mortgagor be decreed to pay the amount of the complainant’s mortgage, or that, in default thereof, the mortgagor and prior mortgages maybe barred and foreclosed from all equity of redemption or claim of, in and to the mortgaged premises; and that the mortgaged premises may be sold, and that out of the proceeds he may be paid the amount of his mortgage; and for such other and further relief &c.
The facts stated in his bill do not entitle him to either branch of the specific relief prayed; nor to any relief under the general prayer. What he cannot get without the consent of the prior mortgagee he may properly be said not to be entitled to. He has neither prayed that the equity of redemption mortgaged to him may be sold, or that he may be permitted to redeem.
A man holding a subsequent mortgage may file a bill stating that a prior mortgage has been given, and setting up that it is fraudulent, or void, or has been paid, and ask to have it so decreed, and make the person holding it a party, and ask to have the premises sold to pay the mortgage; and if he shows that the prior mortgage is void, or has been paid, it will be put out of his way. But if it turn out that the prior mortgage is good, the mortgaged premises cannot be ’ sold to pay the prior mortgages without the consent of the prior mortgagee; all that the subsequent mortgagee could sell, without the consent of the prior mortgagee, would be the equity of redemption mortgaged to him.
I do not consider this a bill of that character. The complainant sets out the prior mortgages, and says, as to each of them, that he neither admits nor denies it. He then says, that the mortgagor and prior mortgagees, combining &c, pretend that there are oth- *537or incumbrances, prior to his mortgage; f whereas he charges there are no such prior incumbrances as is pretended, or, if any such do exist, they are fraudulent and void as against him, or have been paid off, and ought to be decreed to be delivered up to be cancelled or declared to be of no effect against him.
This cannot be considered as a bill attacking the validity of the mortgages which the complainant has set out in his bill as prior to his, and which he says he neither admits nor denies. The stating part of the bill shows nothing against the validity of those mortgages; makes no allegation of any facts or circumstances on which the complainant relies as a ground on which to contest their validity.
As a bill in the other aspect, i. e., with a view of obtaining a sale of the mortgaged premises to pay the mortgages according to their priority, the bill is defective. It prays for nothing to which he would be entitled as a subsequent mortgagee.
A bill by a subsequent mortgagee, i. e., a mortgagee of the equity of redemption, may pray a sale of the interest mortgaged to him, a sale subject to the incumbrance of the prior mortgage ; or, that he may be permitted to redeem the prior mortgage and have the premises sold to pay such redemption money and his own mortgage; or, that the mortgaged premises may, if the prior mortgagee consent thereto, be sold, and that out of the proceeds the mortgages may be paid according to priority.
But if the prior mortgagee refuses to consent to a sale on his mortgage, the complainant on the subsequent mortgage must take one of the other modes of relief prayed.
He can at least obtain a sale subject to the incumbrance of the prior mortgage.
If upon a bill by a subsequent mortgagee as usually drawn here, the prior mortgagee takes such a course, either by answer, or by putting in his mortgage before the master, as shows his consent, the mortgaged premises will be ordered to be sold, and the mortgages directed to be paid according to priority.
The complainant in this case asks nothing which he is entitled *538to as against the prior mortgagees, and therefore should not have brought them into court.
D emurrer allowed ; with leave to amend.
Order accordingly.