Court Opinion

ID: 5468379
Source: CourtListenerOpinion
Date Created: 2022-01-09 20:11:10.605433+00
Date Added: 2024-06-11T08:33:12.276669
License: Public Domain

Hand, Justice.
The affidavit of the service of notice of sale on Galloway and others was presumptive evidence of the service. (2 R. S. 547, § 12, and § 10, as amended by the act q/1844,. Ch. 346, § 2; Arnold agt. McClure, 4 Ben. 41; Cohoes Co. agt. Goss, 13 Barb. 137.)
Recording a mortgage, or an assignment of a mortgage, it is said, is not notice to a prior mortgagee. (Stuyvesant agt. Hone, 1 Sandf. S. C. R. 419; King agt. McVickar, 3 id. 192; andi *54see New-York Life & Trust Co. agt. Smith, 2 Barb. S. C. R. 82; Reed agt. Marsh, 10 Paige, 413; Williams agt. Rubeck, 1 Hoff. C. R. 359; Cheeseboro agt. Millard, 1 J. C. R. 414; James agt. Morey, 2 Cow. 246; Roberts agt. Jackson, 1 Wend. 485, 1 R. S. 762, §§ 37, 38.)
But a foreclosure by advertisement under the statute, without giving a junior mortgagee notice, does not take away his right to redeem. (2 R. S. 346, § 8, as amended by § 4 of Chap. 346, of laws of 1844; Vanderkemp agt. Shelton, 11 Paige, 28; and see King agt. Dantz, 11 Barb. 191; James agt. Stull, 9 Barb. 482; Pardee agt. Van Auken, 3 id. 537.) The assignment is not notice to the mortgagor for some purposes. (1. R. S. 763, § 41.) But an assignee, whose assignment has been recorded, I think has the same rights as incumbrancer as the mortgagee. (1 R. S. 762, §§ 37, 38.) The plaintiff, therefore, has a right to redeem.
But upon what terms it may be done, is another question. The defendants, Claxton, Cramer, and Bullard, insist that the value of improvements made by Claxton, since he purchased of Sexton, should be allowed to Claxton or his mortgagees. If Claxton is so entitled, his mortgagees have a preference as to that part of the fund payable to him.
As between mortgagee and mortgagor, clearly no such claim can be allowed. The mortgagee in full possession can not thus burden the right of redemption. He may be allowed for repairs and for protecting the title, and is not obliged to lay out anything more. (Cable agt. Moore, 1 J. C. R. 387; Landon agt. Hooper, 6 Beav. 246, 2 Stor. E. Ju. 1016 b.; and see Bell agt. Mayor of New-York, 10 Paige, 73; Green agt. Biddle, 8 Wheat. 1; Russell agt. Blake, 2 Pick. 505; Hughes agt. Williams, 12 Ves. 493; Godfrey agt. Watson, 3 Atk. 517.) He is liable for the fair rents and profits actually received, and no more; unless lost by his wilful default or gross negligence. (4 Kent. 166; Van Buren agt. Olmsted, 5 Paige, 1; Hughes agt. Williams, 12 Ves. 493.) But it is said Claxton is a purchaser without notice, and was ignorant of this claim when he made the improvements. From the testimony in this case, it is pretty clear that he *55had no actual knowledge; though the assignment was notice so far as to prevent the foreclosure of the prior mortgage from cutting off the right of redemption. The rights of the mortgagors, however, were foreclosed by that sale, and the property sold for all that it was worth. As the matter stood then, the interest of the plaintiff was not worth one dollar. Claxton undoubtedly supposed he was owner, and has expended about $6,000 in improvements. Has equity no power to give him relief! Where the owner of real estate has a perfect remedy at law, and has been guilty of no fraud, and there is no acquiescence, he is not obliged to pay for improvements, though made in good faith. (Putnam agt. Ritchie, 6 Paige, 390; 2 Sto. Eq. Jur. § 799, a & b, 1237-8.) But it is sometimes otherwise, when he is obliged to apply to equity for relief. Then he must do equity. (Id.) And in a few cases the mortgagee has been allowed the value of his permanent improvements. (Benedict agt. Gilman, 4 Paige, 59; Exton agt. Graves, 1 Vern. 178; Quanell agt. Bickford, 1 Madd. R. 270; Whalley agt. Whalley, id. 484; and see 4 Kent. 167; Robinson agt. Ridsey, 6 Madd. R. 2; Clark agt. Abbott, 15 Vin. 473; Reed agt. Reed, 10 Pick. 398; Smith agt. Sinclair, 5 Gilman’s R. 108; Hardy agt. Reeves, 4 Ves. 480; Conway agt. Alexander, 7 Cranch, 218.)
In Benedict agt. Gilman, the subsequent liens, were judgments. But a junior mortgage and a judgment are both incumbrances ; and the revised statutes, under which the mortgages in that case were foreclosed, expressly preserved the rights of a judgment creditor on a statute foreclosure. (2 R. S. 546, § 8, 1st ed.) After such foreclosure, the better opinion seems to be that he has only an equity of redemption, a mere lien. (Post agt. Arnot, 3 Den. 344; Benedict agt. Gilman, supra; Vroom agt. Ditmars, 4 Paige, 526; 1 Hill, 110; 6 id. 69.) A mortgage in this state has been deemed nothing more. (Astor agt. Miller, 2 Paige, 68; Astor agt. Hoyt, 5 Wend. 602; Waring agt. Smith, 2 Barb. C. R. 179.) And the principle, decided in Benedict agt. Gilman, applies to mortgages as well as judgments. If so, the plaintiff must then go to equity. Indeed, he is seeking relief there. And, under all the circumstances, I *56think he must allow Claxton the value of his permanent im • provements. I do not put it on the ground that the executor had actual notice of the foreclosure before Claxton purchased, and stood by while he was expending the money. (2 Star. Eq. Jur. § 1,237.) But on the ground that Claxton, having purchased and improved as owner and in good faith, and the interest of the plaintiff at the time of the sale being of no value, it would be unjust for a court of equity to take from the former to give to the latter the value of these improvements. The mortgagees of Claxton, or their solicitors, had, or were chargeable with, notice; but they are creditors of Claxton; and if he is protected, they must be paid out of what he received.
As the premises have been occupied most of the time since the sale, the interest that would have accrued on the balance due on the Van Nort mortgage may he considered equal to the rents and profits of the property in the condition in which it was purchased.
The premises must be sold, and out of the avails $80.30 due on the Van Nort mortgage on- the 23d day of February, 1850, and the value -at the time of the sale of any permanent improvements thereon, made by Claxton before the commencement of this suit, must be deducted, out of which sums the mortgagees on the property given, and other liens created by him, are to he paid according to their priority; and the balance, if any, paid to Claxton. The remainder, after such deduction, must be applied to the payment of the claim of the plaintiff and his costs; and he must have judgment against the defendants, Roberts, Allen, and Hickock, for any deficiency. And if there should be a surplus of this portion of the preceeds, after suck payment, it must be applied to extinguish other subsisting liens, if any, on the property, according to their priority. As between the plaintiff and the defendants, Claxton, Burr, Cramer, and Bullard, neither- of these parties can have costs against the other.