Court Opinion

ID: 7895830
Source: CourtListenerOpinion
Date Created: 2022-09-08 21:52:26.710412+00
Date Added: 2024-06-11T16:32:04.693546
License: Public Domain

Alvey, J.,
delivered the opinion of the Court.
This is a very plain case, and it requires no extended discussion to decide it.
The mortgage made to Blanchard, as trustee of the estate of Waters, bears date the 23rd of December, 1869; and subsequently thereto Mrs. Read, the mortgagor, becoming insolvent, made a deed of assignment of all her property, of every kind and description, to Stewart and O’Donnell, trustees, for the benefit of her creditors generally ; the deed of assignment providing for payment of the debts according to legal priority.
Prior to the mortgage of the 23rd of December, 1869, now in question, Blanchard had loaned Mrs. Read other sums of money, being part of the trust funds in his hands, and taken mortgages as security therefor on other property than that embraced in the mortgage in controversy ; and a considerable amount of money still remains due and owing on these prior mortgages.
By the mortgage of the 23rd of December, 1869, now the subject of contention, it is recited that the mortgagor had *429covenanted to pay the mortgage debt on or before January 1st, 1818, with interest, &c.; with a proviso, that if she, her representatives or assigns, should well and truly pay, or cause to he paid, to Blanchard, the trustee, or his successors in the trust, the mortgage debt of $10,000, and interest, as in the mortgage set forth, and perform all the covenants on her part to be performed, “ then this mortgage shall be void.”
It is admitted that the mortgage debt, with all interest thereon, had been fully paid before the time designated in the mortgage ; and it is not claimed or pretended that any covenant on the part of the mortgagor remained unperformed. There was therefore no breach or default on the part of the mortgagor or her assigns.
Blanchard, the mortgagee, has died, and the appellant has succeeded him in the trust; and O’Donnell, one of the assignees of Mrs. Read, having died, Stewart is the surviving assignee or trustee for the benefit of the creditors of Mrs. Read, under the deed of assignment.
The hill in this case was not filed for redemption of the , mortgaged premises, hut it was filed by the surviving trustee under the deed of assignment, for the purpose of procuring a release of record of the mortgage of the 23rd of December, 1869, and thus to have removed what was supposed to he a cloud upon the title to a portion of the mortgaged premises. The appellant, while admitting the full payment of the mortgage debt before it fell due, according to the terms of the mortgage, insists that he holds the legal title under the mortgage, and that he should not he required to release or surrender that legal title until he is paid what remains due on the prior mortgages, and which the property embraced in those mortgages is largely insufficient to pay. He insists that he has such right or interest in the mortgage sought to he released as will enable him to require, as a condition of executing the release, the payment of the balance due on the prior mortgages ; and *430that this is justified by the doctrine of tacking or consolidation of securities, as enforced by Courts of- equity.
There is, however, no sort of ground for-this contention, either by the law of this State, or that of England. In the first place, it being conceded that the mortgage debt has been fully paid, it has long been the settled law in this State, that, even in Courts of law, after the mortgage is satisfied, the legal estate is regarded as having reverted to and become vested in the mortgagor, or those claiming under him; and that the mortgagee can neither recover in ejectment upon such mortgage title, nor set it up in defence, as against the mortgagor, or those who may hold under him. Morgan vs. Davis, 2 H. & McH., 9, 17; Paxon vs. Paul, 3 H. & McH., 399; Beall vs. Harwood, 2 H. & J., 167. But here, the mortgage having been satisfied before the day of payment, and there being, consequently, no forfeiture, by the express terms of the condition, the mortgage, ceased to be operative, and is declared to be void. In such case, according to all the authorities, the land returns to the mortgagor, without any re-conveyance or release, by the simple operation of the condition, free and clear of the mortgage. 2 Prest, on Conv., 200, 201; 4 Kent Com., 193; 2 Washb. R. Prop., (3rd Ed.,) 162, and cases there cited. And, according to our decisions, to which we have referred, substantially the same result follows, whether the payment or satisfaction be before or after the day of payment fixed by the mortgage. It is the full satisfaction that operates to extinguish the mortgage title.
This being the case, equity creates no new title; but, in those cases where the legal title is not extinguished, equity, according to the English rule, merely refuses to take away the protection which the legal estate affords to the party holding it, except upon terms ; and in case a party holds two mortgages from the same person, though •of distinct estates and to secure separate debts, if such *431mortgages become absolute at law, the one cannot be redeemed by the mortgagor without his redeeming the other ; and this principle has been carried so far by the English Chancery, that the purchaser of the equity of redemption of one estate, though without notice of the existence of the mortgage on the other, cannot redeem the one without redeeming the other also. Jones vs. Smith, 2 Ves. Jr., 377; Mills vs. Jennings, 28 W. R., 549. If, therefore, the estate conveyed hy the one mortgage he deficient in value to secure the mortgage debt, or should turn out to he of no value, and the value of the other estate should he more than sufficient to pay its own mortgage, the mortgagee, hy the English rule, obtains the benefit of the surplus value of the latter to make up the deficiency of the former. Margrave vs. Le Hooke, 2 Vern., 207; Pope vs. Onslow, Ib., 286; 2 Spence Eq. Jur., 726. But the doctrine has never been sanctioned or recognized to such an extent in this State. It has been said, in former decisions of this Court, that, in order to prevent circuity of action, and upon the principle that he who seeks ’equity must do equity, if a mortgagor goes into equity to redeem, he will only he permitted to do so upon payment, not only of the mortgage debt, but of all other debts due from him to the mortgagee ; but that the principle does not apply to affect the rights of third parties ; they cannot be prejudiced by it. Chase vs. McDonald, 7 H. & J., 160; Lee vs. Stone, 3 G. & J., 1, 20; Gelston vs. Thompson, 29 Md., 595. Indeed, as against creditors and purchasers or assignees of the mortgagor, who may seek to redeem, the doctrine of tacking or ’ consolidation, as it obtains in England, would seem tobe plainly inconsistent with the provisions of our Code in regard to mortgages and the effect allowed to the registration thereof. Code, Art. 16, sec. 23; Art. 24, secs. 19 and 29; and Art. 64, sec. 2. See also 4 Kent Com., 177, 178.
Here, however, the very foundation of the principle, upon which tacking or consolidation is allowed, even *432according to the English doctrine, is wanting. There has been no forfeiture of the condition of the mortgage, and, consequently, the legal estate has never become absolute; hut that estate has revested in the mortgagor, or those claiming under her, upon payment of the mortgage debt, by the terms of the mortgage itself. There being no default, there was therefore no equity of redemption, in the sense of a Court of equity ; and where there .is no- equity of redemption requiring the assistance of a Court of equity to enforce it, the doctrine of tacking or consolidation has no application whatever. Cummins vs. Fletcher, (in the English Court of Appeals,) 28 W. R., 772.
(Decided 29th June, 1881.)
The only question in the case about which there could he any doubt, is as to the right of the complainant to file the bill to remove a cloud from the title. The title in this case is in point of law free from the operation of the mortgage of the 23rd of December, 1869 ; but as there is no evidence of record of the exoneration of such title, and as the defendant has refused to execute a release, and makes further claim upon the mortgaged premises, doubt and question might arise, with parties unacquainted with the fact of the discharge, as to the effect of the apparent mortgage title. In such case, we think, the jurisdiction of a Court of equity may he invoked, to prevent prejudice to the title, and to require the mortgagee, or those claiming under him, to release of record, all claim to the mortgage, as prescribed by the Code, Art. 24, secs. 33, 34 or 35 ; and thus free the title of record of all question by reason of the existence of the mortgage, which has been both in fact an din law discharged. See case of Gray vs. Jenks, 3 Mason, 526.
We think the decree below was right, and it must therefore he affirmed.

Decree affirmed, with costs to appellee.