Court Opinion

ID: 5460425
Source: CourtListenerOpinion
Date Created: 2022-01-09 19:34:24.525281+00
Date Added: 2024-06-11T08:32:51.344994
License: Public Domain

Leonard, J.
(dissenting.) Allen & Stevens had the power to charge the premises with the payment of any moi ogage which they had executed, by their conveyance to Bu/kley, although not a dollar had been advanced by the mortgagee.
Bulkley and his heirs and assigns were estopped from denying the validity of the mortgage. Allen & Stevens, after conveying the premises to Bulkley, might lawfully take an assignment of the mortgage to themselves and enforce its collection, although the mortgagees had not advanced a dollar thereon ; the terms of the conveyance to Bulkley having made the mortgage a charge on the premises. The present plaintiffs may lawfully enforce the collection of the whole mortgage money; one half of the amount being collected for the benefit of Allen & Stevens, and to be applied by the plaintiff in part satisfaction of his demands against them.
The defendant Auld did not make inquiry of the right party, as to the amount due or advanced on the mortgage. He should have made his inquiries of the holder of the mortgage ; not of the insurance company, who had ceased to hold it, or have any interest therein.
Had the insurance company foreclosed the mortgage while they were the holders of it, their duty would have required them to collect the whole amount, if they were notified of the terms of the conveyance from Allen & Stevens to Bulkley, in respect to assuming the payment of the whole mortgage. There is no evidence tending to show that Bulkley, or his assigns, were entitled to receive the remainder of the sum secured by the mortgage, over and above the $2000 advanced by the insurance company to Allen & Stevens. The right to receive the residue of the money which the insurance *595company agreed to advance belonged, prima facie, to the mortgagors, Allen & Stevens. If the insurance company, or its assignee, collected any thing on the mortgage, over and above the sum advanced by the insurance company, it would be as trustee for Allen & Stevens. They were interested to the extent of one half of the amount of the mortgage after their conveyance to Bulkley, and they had the power to make any disposition of that interest which they thought proper.
[New York General Term,
May 5, 1862.
■ The judgment should be affirmed with costs.
Hew trial granted.
Ingraham, Leonard and jRoseTcrans, Justices.]