Court Opinion

ID: 6575246
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:33:39.742371+00
Date Added: 2024-06-11T15:57:04.101573
License: Public Domain

The opinion of the court was delivered by
Bennett, J.
Whatever may have been the previous opinion, the case of Lovell v. Leland, 3 Vt. 581, settled the doctrine that a decree in chancery and an expiration of the time of redemption, and possession taken under the decree, operated as a satisfaction of the mortgage notes, if the property was adequate for that purpose: and if not, pro tanto. But it is now claimed that the principle adopted in the case of Lovell v. Leland, should be confined to cases where the decree of foreclosure is had in the court of chancery, that the case of Lovell v. Leland may stand consistently with the case of Strong v. Strong, 2 Aik. 373. But it may be remarked, that the case in Aiken is not put upon any peculiar distinction of the effect of a decree of foreclosure, whether made in a court of chancery or in a court of law, in an action of ejectment. The court evidently went-upon the ground, that as a general principle a foreclosure of the equity of redemption was not a satisfaction of the mortgage debt, unless the mortgagee elected to treat it as such.
But this was not the principle point in the cause, and was evidently passed off without very full consideration.
We apprehend, that in principle the cases are opposed; and that there is no good ground for a distinction between them; and for one, I think, it is as well to overrule a case, if found to be un*312sound, directly, as to do it indirectly. The effect of a decree of foreclosure must be the same, whether obtained upon a bill in chancery, or in an action of ejectment.
The only reason which occurs to me, that can be assigned for a distinction is, that in one case the primary object of the proceeding is to cut off the equity of redemption, and in the other to get possession of the mortgaged premises. But if the mortgagee elects to sue in ejectment, he knows that he gives to the mortgag- or an election to surrender up the possession upon the recovery in ejectment, or to come in with his motion to redeem, and thereby suspend the writ of possession; and in such case the statute enacts, if he does not pay the sum found due, by the time fixed by the court, his equity of redemption shall be foreclosed. If the mortgagee in either case should abstain from going into possession the mortgage debt would, no doubt, not be satisfied.
But in the present case possession followed the foreclosure, and we are to take it on this bill of exceptions, that the property was ample to satisfy the debt.
But it has been said, that as the mortgage was given by Clark to Weeks to indemnify him for signing this note, as one of the co-sureties with the defendant, and by Weeks assigned to the plaintiff, and the action of ejectment brought by the plaintiff, as assignee of the mortgage, the principle will not apply, however it might be in other cases. We think that when this mortgage was executed by the principal debtor to one of the co-sureties on the note, conditioned that he would pay the note and save the surety harmless, a trust was thereby created, and also an equitable lien on the lands for the benefit of the plaintiff, and that the surety as mortgagee held the property subject to such trust, and that he might in equity be compelled to give the plaintiff the benefit of such Ken for the security and payment of his debt; and if the mortgagee has voluntarily done what he might be compelled to do, the plaintiff most certainly should have the same benefit from the act, that he could have had if the assignment had been made under a decree in chancery.
That the plaintiff had s.uch an equitable lien on the mortgaged premises, is too well settled to need authority. The case cited from the 8th of Metcalf p. 20, is directly in point. As this equitable lien was to secure the payment of the note from the princi*313pal, the amount due on the note was the sum which the principal debtor was bound to pay before the lands could be released from the mortgage; and this note has been in legal effect'paid by the principal, by means of the mortgage property, and the surety must of course be discharged.
Judgment of the County Court is reversed.