Court Opinion

ID: 6139701
Source: CourtListenerOpinion
Date Created: 2022-02-05 14:35:12.310344+00
Date Added: 2024-06-11T08:54:35.046058
License: Public Domain

Woodworth, J.
On the 17th June, 1817, Caleb Johnson gave a mortgage to James O. Wattles, to secure the payment of $12,000. On the 2d August, 1817, a judgment was docketted in favor of Wattles against Johnson for $2000. Executions issued on this, and three other judgments, (all subsequent to the mortgage,) and on the 20th April, 1818, the mortgaged premises were sold in separate parcels. William H. Sabin purchased the first .parcel for $205, which, at the time of sale, was worth $2000. Wattles purchased the residue at $440.
The facts stated.
The value of the mortgaged premises appears to have • been somewhere between $6000 and $10,000. Deeds were executed by the Sheriff to the purchasers.
Reuben West testified, that before the close of the sale, he heard Wattles publicly say, he had a mortgage on the pro perty, executed by Johnson.
Several other witnesses testify, that they were present, and heard no claim set up under the mortgage. It is in proof, that before the sale, Wattles at different times, stated that Johnson had given a quit claim deed of the premises. This evidence, however, is insufficient to establish a release: *283it was so considered by the Chancellor, and was not pressed on the argument. After the sale, Wattles repeatedly declared he had purchased the equity of redemption, and that his title to the property was then complete. Notwithstanding these declarations, it is very evident he did not consider the mortgage extinguished. Nicholas P. Randal testified, that after the sale he asked Wattles, why he let Sabin bid off the property for so small a sum? he answered that Sabin would be glad to give it up, as he had enough upon it to induce him to do so. Randal believes that the mortgage was mentioned as the incumbrance on the property. Whatever may have been the opinion of Wattles as to the then state of his title, it is apparent he did not consider the mortgage a mere caput mortuum, but a valid security.
On the 9th Nov. 1818, Wattles for the consideration of $9331 assigned the bond and mortgage of Johnson to the appellant, and covenanted that there was due $12,000. On the same day, for the purpose of giving additional security, he executed a bond and warrant of attorney to confess a judgment, which was docketed on the 12th Nov. 1818. On the 21st August, 1819, an amended specification was filed. On the 26th May, 1818, Sabin assigned all his right and title in the mortgaged premises to Wattles. On the 14th June, 1819, Wattles quit claimed the premises to the respondent, for the alleged consideration of $10,000. The deed though absolute in its terms, was given to secure the respondent against a note of $5000, and a bond of indemnity executed to Amos P. Granger. As additional security, Wattles made an assignment, dated June 14th, 1819, of his share of the partnership goods and effects in the firm of D. Morey & Co., and also all the personal property belonging to him, then at their distillery, ashery, store and shop in Onondaga. Under this assignment the respondent became entitled to, and actually received a large amount of merchandize, with other articles, which constituted a fund, to be applied to the particular objects specified in the assignment. What the result would be on an account taken, cannot at present be particularly ascertained, nor is it material to inquire, if the appel*284Iant is entitled to hold the mortgaged premises to satisfy his claims.
The appellant was a fair purchaser of the bond and mortgage.
' The appellant appears to be a fair purchaser of the bond arid mortgage; John Meeker was justly indebted to him in $9331, for goods sold; Wattles assumed the debt, and Meeker was discharged. As a consideration for this responsibility, Wattles received from Meeker a large amount in goods, which afterwards passed to the firm of Morey & Co. The bond and mortgage were taken in the regular and ordinary course of business. Nothing like unfairness is discoverable, and the appellant dealt with the mortgagee on equal terms. The assignment was not a suspicious instrument, as his honor the Chaficellor seems to consider it. Such a conclusion casts a shade over the transaction, at variance with its real character.
Whether purchase by mortgagee, of equity of redemption, merges equitable, in legal estate. General rule.
The most important question is, whether the purchase of the equity of redemption, by uniting the equitable and legal estate, created a merger, and thereby prevented the mortgagee from setting up the mortgage as a subsisting security.
The rule is, that wherever a-greater estate and a less coincide and meet in one and the same person, without any intermediate estate,,the less is immediately annihilated, or. in the law phrase, is said to be merged, that is, sunk or drowned in the greater. (2 Black. Com. 177. 3 Lev. 437, 2 Rep. 60, 61.)
Semi. Where part of legal and equitable estate unite, the latter may be merged pro tanto.
1 have not met with any case where the question of merger was raised, on the union of part of the equitable and legal interest; yet do not perceive any valid objection to allow it pro tanto.
Whether the doctrine of merger applies.
The inquiry now is, does the doctrine of merger apply 1 In Jackson v. Hull, (10 John. 481,) the mortgagee obtained judgment, and on execution, the equity of redemption was sold to a purchaser for less than the debt. In an ejectment by the mortgagee, to recover the premises, the Court considered, that the sale was only of the residuum of interest, remaining in the mortgagor, after the execution of his mortgage, and that the mortgagee was entitled to recover.
Mergers never favored by law; still less in equity.
In Co. Lit. 338 b. it is said, “ mergers were never favored in Courts of law, and still less in Courts of Equity.” *285They are never allowed, unless for special reasons, and then only to preserve the intention of the parties. (15 Vin. 362, (A. 5.) Phillips v. Phillips, (1 P. Wms. 41.)
Where there is a union of rights, equity will preserve .them distinct, if the intention so to do, is either express or implied. (4 Brown, C. C. 403.) The distinction stated by Lord Hardwicke is, that when the owner of the fee, in which the charge would otherwise merge, manifests his intent that the charge should subsist, his intent, if clear, shall prevail. (Chester v. Willis, Ambler, 246. 2 Fonbl. 169, n. a.) In Compton v. Oxenden. (2 Ves. Jun. 264,) Lord Thurlow observes, “ it is a clear principle, both at law and in equity) that where there is a confusion of rights, where debtor and creditor become the same person, there is an immediate merger, but that equity will preserve the rights distinct, according to the intent express or implied. Wherever it is more beneficial for the person entitled to the charge to let the estate stand with the incumbrance upon it, than to take it discharged of the incumbrance, that circumstance will have a controling influence in deciding on the implied ° xj a intent.” The argument on both sides seems to have proceeded in accordance with these principles; the respondent contending that Wattles had uniformly manifested his intention to consider the mortgage merged, by declaring himself the absolute owner of the premises purchased at the Sheriff’s sale.
Equity keeps rights distinct where intention is to keep them so.
tinct is benefithis wül™^fl.u®nce in 4®-ciding on m-tent,
The offer of Wattles to sell as absolute owner, and his declarations prior to the assignment of the mortgage to the appellant, are supposed by the respondent’s counsel to be decisive on this question; but I apprehend they ought not to be viewed in that light. Whatever opinion Wattles may have formed on the question of law under discussion, it is perfectly clear he did not consider his mortgage extinguished, for immediately after the sale he speaks of the mortgage, as the incumbrance relied on to induce Sabin to give up his purchase. He may have declared that he was the owner, but in making out his right to that character, he evidently did not lose sight of an existing mortgage, and considered it as forming a part of his title. Whether he had correct legal notions on this question is perfectly immaterial; the point is, did he *286declare or intend to declare that the mortgage was extinguished ? If he did not, the proof is defective. His view of ownership, we must understand, as consistent with a valid incumbrance by way of mortgage. His declarations were substantially correct, at least, so far as any purchaser could have an interest; and, admitting the mortgage was not merged, yet Wattles, having an election to treat it in that manner, might well offer to convey a good title; for the moment he executed a conveyance of the fee simple of the estate, then his election having been carried into effect, the purchaser would acquire a good title, and the mortgage be extinguished. No fraud would be committed; for, until Wattles acted, his declarations were indifferent. Until there was some person in interest, no one had a right to complain, whether he represented himself as owner, or rested on the mortgage as a valid security. Whatever Wattles may have said, one fact of decisive importance is conceded—no individual obtained- any interest or claim upon the premises, from the 20th April, 1818, when the sale took place, until the 9th November following, when the assignment to the appellant was made.
*285not Consider extinguished86 His conduct o^1 thi head,
*286Had he conveyed in feo, this would have extinguished mortgage. '
Other facts irreconcilable with idea of .merger.
But there- are other facts in this cause, which, on the supposition that Watties was of sane mind, are irreconcilable with the idea of merger. That portion of the premises bought by Sabin was worth, unincumbered, $2000; it was bid off for $205. Would the mortgagee stand by and permit this purchase, if resort could not be had to his mortgage? Could he have so intended ? Certainly not. When he purchased the residue himself, did he intend that the mortgage should merge thus far, and take his chance of establishing its validity as to the portion purchased by Sabin ? I apprehend not. His security and interest concurred, in suffering the charge to remain. Besides, it is in proof that the mortgaged premises were not equal in value to the amount due.
If mortgage extinguished by merger, bond cannot to set up.
If the mortgage is extinguished, on the principle of merger, it can no more be set up, than if it had been fully paid. What, then, becomes of the bond ? If the mortgage is satisfied, it is declared that the bond, given as collateral security, shall also he void. Could Wattles have intended *287to abandon all claim to the residue ? and if not, did he against his interest, intend that a merger should thke place and unnecessarily risk the issue of the question, whether Johnson was any longer holden on the bond ?
But if Johnson was not exonerated, what is to be the ’ measure of recovery? How is it to be ascertained? If entitled to relief when prosecuted on the bond, it must be by drawing the mortgagee into an expensive litigation in Chancery, in order to ascertain the extent of his liability, and how much shall be credited to him from the face of the bond ? i,
,L Difficulty as to balance.
But the conclusive answer to the argument, derived from the declaration of Wattles, that he was the absolute owner, is this : until he made a disposition of the property, and un- . til some person acquired an interest, he was at perfect liberty to consider the mortgage merged or not, as might be most beneficial. If the question is to be decided by intent, express or implied, when does it become fixed and unchangeable? Certainly not until some one acquires an interest, and thereby obtains a right to draw it in question. It would be novel in principle, and I apprehend without pre cedent in any book of authority, that a stranger should urge, “ you once declared the mortgage was merged, and, al though, at the time, it was indifferent to all the world in what manner you treated it, you are bound by that election.”
Till 3d person w. might^onSlder mort' gage merged, or not.
*ntent did not till this;
It does not appear that Wattles had done any act previous to the 9 th Nov. 1818, which prevented his setting up the mortgage as a charge on the land. On that day he made his election, acted under it, and for a bona fide con sideration, assigned to the appellant. The intention not to consider the mortgage merged, then and not before, became fixed. At this time there was no conflicting claim.
Which ^ was and not before! tJa^péilant61'4
There is no principle of law or equity with which I am acquainted, that can, on the present state of facts, rightfully deprive the appellant of the security thus taken. Whatever question there might be as to Wattles’ intent previously, none could exist after this transfer.
cannotPbf del prived of his secunty-
*288But it is contended, that the appellant was bound to re cord thé assignment, in order to protect himself against a subsequent transfer by Wattles. The received opinion has been, that (except in certain counties) an assignment need not be recorded.
Whether appellant hound to record assignment.
Premises not within the military tract.
The premises in question do not lie in what is termed the military tract, and consequently are not governed by the act, requiring all deeds and conveyances of or concerning, or whereby any of the military bounty lands may be affec ted in law or equity, to be recorded.
Assignment not within registry acts;
The act of March 23, 1821, first directed the recording of deeds, conveyances or writings concerning lands in the towns of Onondaga and Salina, where the premises are situated. The act concerning mortgages, (1 R. L. 372,) prescribes the manner in which the mortgage shall be registered, but does hot extend to the case of an assignment; it was therefore optional with the appellant to record or not. The omission cannot be urged as a ground to postpone his security.
And would not have been notice if recorded.
Assignee takes subject to account.
Payments after assignment, without notice, allowed.
Not necessary to • give notice of assignment to purchaser.
If the assignment had been recorded, it would not have been noticed, for the plain reason, that recording was not required by law. The principle is well settled, that when an assignment of a mortgage takes place, without the privity of the mortgagor, the assignee takes subject to the account between the mortgagor and the mortgagee, Mathews v. Wallwyn, 4 Ves. Jun. 118,) and that payments to the mortgagee, after assignment, without notice, must be allowed by the assignee. (Williams v. Sorrell, 2 Ves. Jun. 389.) I apprehend this is all the risk the assignee incurs. I have not met with any case that places the rights of the assignee on other or different ground, or that gives countenance to the suggestion, that the assignee must, at his peril, give notice to a subsequeut assignee, or purchaser from the mortgagee Such a doctrine is' not only most unreasonable in itself, but would shake the foundation of security by mortgage assignment, hitherto deemed equal to that of the original mortgage, with the exceptions I have stated. It would, in fact, be no security, beyond the responsibility of the person making the assignment; for the assignee has no *289means of ascertaining how often, and to whom, the mortgagee may have subsequently assigned. Such notice is not necessary for the protection of a subsequent purchaser. The registry of the original mortgage is notice to him of its existence. If he will deal without asking for the mortgage or requiring it to be cancelled, he comes, without a semblance of equity, to demand that the prior bona fide assignee shall be postponed to his claim. Where the mortgagee makes a second assignment, the assignee knows that a prior assignment may have been made, and consequently must, as to that fact, repose on the responsibility and integrity of his assignor. If he should be deceived, it is more equitable that he should suffer, than to divest the right of the first assignee, who had acquired the legal estate.
But is this pretended hardship any thing more than every purchaser of land was liable to, since the existence of this government, until the last acts requiring deeds to be recorded ? Every grantor had the power of conveying a second time, and no doubt the power was sometimes exercised by fraudulent individuals. It was never seriously urged that the second purchaser had any remedy against the first purchaser, because his deed was not recorded or notice given.
The conveyance by Sabin to Wattles, on the 26th May, 1819, does not change the rights of the appellant. There being no merger as to any part of the mortgaged premises, the mortgage stands valid, and is not affected by any of the subsequent transfers.
No merger. Mortgage not affected by subsequent transfers.
But it is contended by the appellant, that independent of the assignment, he gained a priority, in consequence of the judgment docketed against Wattles, Nov. 12,1818. The act of April 21st, 1818, required the filing of a particular statement and specification of the nature and consideration of the debt or demand. If omitted, the judgment shall be adjudged fraudulent, as respects other bona fide judgment creditors, and every bona fide purchaser for valuable consideration. According to Lawless v. Hacket, (16 John. 149,) the first specification did not comply with the act. I am not inclined, at this day, to unsettle that rule. It has been acted upon and recognized in the Supreme Court, and in Chancery, as giving the true construction of the statute. No doubt valu*290able estates have been acquired and are now held under it, though if it were ' res integra, it might be questionable whether the statute required so minute a specification. The judgment, then, under the. first specification, cannot avail, if the respondent be considered a bona fide purchaser for valuable consideration, within the meaning of ' ^ the act.
*289Whether judgment gave priority.
Specification insufficient.
*290And cannot avail, if respondent is a chaser^6 PUr"
Mortgagee a within27Eliz.
Term purheuds “"every acquisition ex-scent. equity™1118
Mortgagees ™edpurcha-d sers-
It is held, in England, under the statute 27 Eliz. respecting conveyances made to defraud purchasers, that a mortgagee is a purchaser, within the act, although the statute speaks only of estates of inheritance for life or years, (3 Cruise, 378, tit. 32, ch. 22, sec. 38, 49. Chapman v. Emery, Cowp. 280.) The term purchase, is of very extensive signification, and comprehends every species of acquisition in contradistinction £0 hereditary descent and escheat. (Co. Lit. sec. 12.) In Equity a purchaser is considered as a person, who without fra (i> and for valuable consideration, acquires a right or interest, and is, therefore, so far favored, that his title shall not be impeached in Equity. (1 Eq. Ca. ab. 353, A, and the cases there cited.) I think the terms of the act may be satisfied by including mortgagees within the word purchasers. Although the popular understanding is, a purchaser in fee, the reason and spirit of the act protect the mortgagees, as well as subsequent judgment creditors. The former are equally within the mischief intended to be remedied.
And it follows that notice of judgment cannot prejudice respondents,
This being the construction of the act, it seems to follow, that notice of such a judgment cannot prejudice the respon¿font's rights ; for it is only notice of a judgment declared by the act to be fraudulent, and consequently not obligatory ' on the respondent.
It is not like a prior mortgage, where registry is required for purpose of no-
But it is contended that the respondent did not purchase bona fide, because he had notice of the appellant’s judgment, and the case of Dunham v. Dey, (15 John. 568,) is supposed to support this doctrine. There is, however, a manifest distinction. In that case, it was decided that a person who takes a conveyance of land, Avith notice of a prior unregistered mortgage, is not a bona fide purchaser, Avho can gain a . . , „ priority by having his deed first recorded. Inow the unregístere¿i mortgage Avas a valid security. It had every essen *291n;.! a just demand between the parties. It could only be defeated by an omission to register, if a purchaser intervened. But notice, in such a case, supersedes registry. The object intended by the statute, which is to apprize the purchaser, is attained. ' The unregistered mortgage is not declared fraudulent, but shall be postponed.
where actual notice supersedes registry.
The statute relating to specifications had other objects in view. Numerous frauds had been committed by entry of judgments on bonds and warrants for fictitious demands. To detect the fraud was a principal object, by requiring a minute statement, which would enable the purchaser, or subsequent judgment creditor, to unravel the fraud. If this was not filed, it was then adjudged fraudulent. The creditor might disregard it. He had a right to consider it fraudulent. If notice of such a judgment is a substitute, the statute is a nullity. Apply the doctrine to a subsequent bona fide judgment creditor. He has notice of the first judgment, but the other essential is wanting—a good specification. The judgment, then, cannot strengthen the appellant’s claim. He must rest on his assignment, which, in the view I have taken, is amply sufficient.
Specification required fo. other objects.
And unless filed judgment may be disregarded.
It has been contended, that if the appellant took nothing as assignee of the mortgage, by reason of the merger, then he is entitled to the premises, under the words granting the same to him, his heirs and assigns forever. This ground, I think, would be tenable, if the granting words were not restricted in their operation; but the habendum is, “ to hold the same as fully as the mortgagee might hold and enjoy the same by virtue of the mortgage and bond accompanying the same.” These expressions unequivocally show that no right or title was granted, but such as might be acquired by the assignment of a subsisting mortgage.
Whether assignment enures as a grant.

Habendum.

If it be admitted that the respondent is entitled to the prior lien, then I am of opinion the decree is erroneous, in allowing the respondent to be satisfied out of the mortgaged premises, to the whole extent of the balance due him. His conveyance was solely a security for a note of $5000, and. a bond executed with Wattles to Amos P. Granger.
If respondent has preference, decree erroneous hi allowing general bal-
*292It does not. appear that Wattles ever assented to this;
Or that advances were made on credit of assignment.
Mortgage to secure future advances good.
Pledge may he security for farther loans; as if this be
The first objection to this allowance is, it no where appears that Wattles ever assented that the mortgage should secure any thing beyond the specific objects for which it was given. The assignment of the partnership goods to the respondent was subsequently taken as a collateral security. There is no proof that advances were made on the credit of the original security. A mortgage made to secure against future as well as present responsibilities is undoubtedly good. In some cases, a subject pledged for a debt may be considered as a security for further loans. The cases referred to by his honor the Chancellor, in Hendricks v. Robinson, (2 John. Ch. Rep. 309,) do not support the right claimed by the respondent. In Shirras v. Craig, (7 Cranch, 34,) the mortgage was executed, in part, to secure the payment of money actually due at the time, and in part to secure sums to be advanced. So, in The United States v. Hooe, (3 Cranch, 73,) the mortgage was to secure against existing and future responsibilities. The attempt here is, without any understanding or agreement, to hold the mortgaged premises charged for a general balance. It is highly probable, from the testimony, that on an account taken, (after first applying partnership property to the payment of partnership debts,) a sufficient sum will remain out of the merchandize and other articles assigned as a collateral security with the mortgage, to pay off and discharge the note of $5000, and the responsibility incurred by the bond to Granger.
Mortgagee cannot tack against mortgagor, nor creditors but may against heir.
Not in any other case.
The rule laid down in Jones v. Smith, (2 Ves. Jun. 376,) is, that a mortgagee cannot tack a bond against the mortgagor, nor against creditors, but may against the heir, to prevent circuity of action. But if the heir assign the equity of redemption, the assignee who brings his bill to redeem, shall pay the mortgage only, and not the bond. (1 P. Wms. 776.) In Lowthian v. Hasel, (3 Brown’s Ch. Rep. 162,) it was held that a mortgagee, having also a bond, cannot tack it against other specialty creditors, tho’ he may against the heir. Lord Thurlow observes, in natural justice the right has no foundation ; the creditor having another special security, cannot give him, in justice, any priority; it has not been done in any case, but that of the heir, and merely to prevent circuity.” *293So in Hamerton v. Rogers, (Ves. Jun. 513,) a bill of foreclosure was dismissed with costs, so far as it sought to tack a bond to a mortgage against creditors. To these may be added the case of ex parte Hooper, (1 Mer. 7,) where a mortgage was held no security for subsequent advances made on the strength of a parol engagement.
These cases conclusively show that the respondent cannot divert the securities taken from the objects specified, when it formed no part of the original agreement, nor was ever assented to subsequently by Wattles, and particularly when an objection is interposed by a bona fide creditor holding a judgment made valid by an amended specification.
Mortgage no security for subsequent advances made on parol engagement.
Respondent cannot divert securities from original objects.
But even admitting that the respondent may apply the fund to satisfy advances not contemplated when the mortgage was given, the doctrine will not allow such application after the 21st August, 1819, when the amended specification was filed, from which time the judgment became operative, against subsequent judgment creditors and purchasers, and became a lien on the mortgaged premises. If the respondent is allowed for advances between the 14th June, and 21st August, 1819,1 apprehend the allowance must stop there. The appellant’s right then became perfect, to ’require that the fund remaining be exclusively applied to discharge the note and bond of indemnity. After that day the respondent had no power to disregard the appellant’s judgment. This point is not noticed by the Chancellor. As its correctness cannotj I think, be well questioned, I presume it was overlooked; otherwise it would probably have produced a modification of the decree.
Or if he could, they cannot extend to advances made after 21st August. 1819.
My conclusion, then, is, that the appellant is entitled to hold the mortgaged premises under the assignment for the demand therein specified, oil the ground, that there was no merger, and consequently that the mortgage was a valid security. But secondly, if it were otherwise, then I am of opinion that all the property received by the respondent, under the assignment made by Wattles, subsequent to the mortgage, be applied, if necessary, in discharge of the note of $5000, and the bond of indemnity, after first satisfying *294partnership debts due on the 14th June, 1819; and that the mortgaged premises be holden by the respondent as charged with the balance only, if any, after making such appropriation ; it being the clear intention of the parties, that the fund should, in the first instance, be exclusively applied in this manner. If, however, it be decided that the securities cover subsequent advances, they ought only to include such as were made between the 14th Jane and 21st August, 1819, when the appellant’s judgment becoming effectual, interposed a legal and equitable barrier against a further allowance.
*293Recapitula/ tion.
*294I am of opinion that the decree of his Honor the Chancellor be reversed. -
Question is whether mortgage, when assigned, was subsisting.
Sutherland, J.
The great question in this case is, whether the mortgage given by Caleb Johnson to James 0. Wattles, on the 24th day of J une, 1817, and which was assigned by Wattles to William James, the appellant, on the 9th day of November, 1818, was, at the time of such assignment, an unsatisfied 'and subsisting mortgage. For, although many other topics are presented by the case, and were elaborately and ably discussed by the learned counsel who argued it, a diligent examination has satisfied me, that the question of merger must control the decision of this Court.
Statement of facts.
The facts out of which this question arises are briefly these: —One Caleb Johnson,being indebted to James O. Wattles, in the sum of $12,000, for the purpose of securing that sum executed to him, on the 24th June, 1817, a bond together with a mortgage on certain lots and buildings in the village of Onondaga. The mortgage was duly registered on the 17th day of July thereafter. On the 20th day of April, 1818, all the right and title of Caleb Johnson to the mortgaged premises were sold by the Sheriff of Onondaga, under several executions upon judgments against Johnson, obtained in the Onondaga Common Pleas. The premises were sold in two parcels. The first under a judgment in favpr of Wattles for $2000— of which William H. Sabin became the purchaser, for the sum of $205 : The residue, under four other judgments in favor of different persons, of which residue James O. Wattles became the purchaser for the sum of $440. Conveyances *295were, on the same day, executed by the Sheriff to Sabin <fc Wattles, for the parcels thus purchased by them respectively. All the judgments were subsequent to the mortgage. Nothing passed, therefore, by the sale and conveyances of the Sheriff but Johnson’s equity of redemption in the mortgaged premises.
Wattles being thus the owner of a mortgage on the whole of the premises, and of the equity of redemption in a portion of them, became indebted to William James, the appellant, in the sum of $9331; and for the purpose of affording to him additional collateral security, on the 9th day of November, 1818, assigned to him the bond and mortgage in question, covenanting in the assignment, that the sum of $12,000 remained due. On the 26th day of May, 1819, Sabin conveyed to Wattles all his estate and interest in the mortgaged premises ; and on the 21st day of July thereafter, Wattles conveyed the whole of the premises to the respondent, Davenport Morey, by way of security against certain responsibilities incurred by Morey for him. The deed bore date on the 14th June, 1819, and though absolute in terms, is admitted to have been given by way of security or mortgage only. It was recorded as a deed, on the 13th day of January, 1821.
The respondent, Morey, expressly denies in his answer any notice or knowledge of the assignment of the mortgage from Wattles to James, until the fall of the year 1820, and there is no evidence in the case to falsify or impeach this denial. 1 shall, therefore, consider him in the discussion of this point, at least a bona fide mortgagee, standing in equal equity with the appellant, entitled to contest with him, and, if he can, to impeach upon principles either of law or equity, the validity of his prior incumbrance.
It is contended, on the part of the respondent, that admitting the mortgage to have been a subsisting security at the time of its assignment to the appellant, he having neglected to record the assignment, cannot set up the mortgage as against the respondent, who had no notice of its assignment, when he took his conveyance of the 14th June, 1819.
Whether the assignment should have been recorded.
*296If this proposition can be sustained, it must be, I apprehend, upon one of two grounds—either that the assignment of the mortgage was required, by law, to be recorded, or that the respondent stands in the place of the mortgagor, and is entitled to have all, the equities subsisting between him and the mortgagee, at the time when he received notice of the assignment, adjusted and satisfied, before the assignment can take effect.
The registry act in relation to military bounty lands does not apply;
Nor do any registry acts.
It was admitted upon the assignment, that the registering act of January, 1794, in relation to military bounty lands, has no application to this case; the premises in question being in the Onondaga reservation, and that reservation being no part of the military bounty lands. And there was no other act requiring deeds, in relation to lands in the Onondaga reservation, to be recorded, until the act of March 23d, 1821, which applied to conveyances only, made after the 1st of July following.
Registry not notice.
At the time, therefore, when the appellant became the assignee of the mortgage, there was no law requiring him to record the assignment. If he had caused it to be recorded it would have been a voluntary and inefficacious act. In judgment of law, it would have been notice to no one. (Bushell v. Bushell, 1 Sch. & Lef. 103. Latouche v. Dunsany, id. 157. Underwood v. Ld. Courtown, 2 id. 64. Morecock v. Dickens, Ambl. 678.) Not to the mortgagor, because he is entitled to actual notice, and would not be affected with the constructive notice resulting from a registry of the assignment, even if it was required by law to be registered. Not to a subsequent grantee or mortgagee, because the law will not intend that to be known, for the existence of which there is no legal necessity. ‘ No presumption can be indulged, that if the assignment had been recorded, the respondent would have become apprized of the fact. He was not bound to examine the records. It is not, therefore, to be supposed that he would examine them.
Rights of appellant not affected by the omission.
The rights of the appellant, therefore, are not affected by the circumstance of his not having recorded the assignment of the mortgage. *297There is no doubt of the position, that the assignee of a mortgage takes it subject to the equities which may exist between the mortgagor and the mortgagee, or which may accrue at any time before notice of the assignment is brought home to the mortgagor. (Matthews v. Wallwyn, 4 Ves. Jun. 118. Williams v. Sorrell, 4 id. 389.) But this principle, I apprehend, is confined to transactions between the mortgagor and the mortgagee, and from the very nature of things is inapplicable to dealings between the mortgagee and third persons.
Assignee of mortgage takes subject to equities between mortgagor and mortgagees :
But this is confined to mortgagor and mortgagee— does not apply to mortgagee and third persons.
If I have been successful in showing that the assignee is not bound to record the assignment, and that a voluntary registry would not be constructive notice to any person, then it necessarily follows, that whatever notice is required to be given must be actual and not constructive ; for I know of no other act which it can be supposed the assignee was bound to perform, from which notice could be inferred, except the act of registering. Now it is utterly impossible for the assignee of a mortgage to know with whom the mortgagee may subsequently deal in relation to the mortgaged premises.
Take the case before the Court. How was the appellant to know, on the 9th day of November, 1818, when he took his assignment, that Wattles, on the 24th day of June, 1819, would convey the mortgaged premises to the respondent. If he had no means of knowing that he was, or was to become, interested in the subject matter of assignment, how could he give him notice that he was the proprietor of the mortgage 1
The case of Williams v. Sorrell, (4 Ves. 389,) which the Chancellor cites in support of the broad position, “ that all dealings with the mortgagee, before notice of the assignment, are valid,” was a case between the mortgagor and the assignee of the mortgagee, and the simple question was, whether, after an assignment of the mortgage, payments made by the mortgagor to the mortgagee, without actual notice of the assignment, were to be allowed. It was held that they were, although the assignment had been registered. The same principle was settled in Matthews v. Wallwyn, (4 Ves. 118,) and, I am persuaded, there is not a case to be *298found, in which the principle has been applied to dealings between the mortgagee and third persons. (Vid. Clute v Robinson, 2 John. Rep. 595.)
Assignee, tho’ subject to equities of debt- or, &c., not affected by latent equities of third arsons, notice.
Indeed, the Chancellor has most clearly recognized and enforced the distinction in the cases of Murray v. Lylburn, (2 John. Ch. Rep. 441,) and Livingston v. Dean (id. 479.) In the first case he says, “ It is a general and well settled principle, that the assignee of a chose in action takes it subject to the same equity it was subject to in the hands of the assignor. But this rule is generally understood to mean the equity residing in the original obligor or debtor, and not an equity residing in some third person against the assignee. The assignee can always go to the debtor, and ascertain what claims he may have against the bond or other chose in action, which he is about purchasing from the obligee ; but he may not be able, with the utmost diligence, to ascertain the latent equity of some, third person against the obligee. He has not any object to which he can direct his inquiries, and for this reason the claim of the assignee, without notice of a chose in action, was preferred in the late case of Redfearn v. Ferrier & others, (1 Dow. Rep. 50,) to that of a third party setting up a secret equity against the assignor. Lord Eldon observed, in that case, that if it were not to be so, no assignment could ever be taken with safety. I am not aware that this decision was the introduction of any new principle, in the case of actual bona fid,e purchasers, or assignments by contract.” In Livingston v. Dean, the Chancellor remarks, “ Though the assignee of a bond and mortgage takes it subject to all the equity of the mortgagor, yet as to the latent equity of a third person against the mortgagee, as possessor of the mortgage, the case is different. The assignee does not take the mortgage subject to such an equity, unless he has notice of it expressly or constructively.”
Admitting, therefore, that the equity of the respondent, whatever it may be as it respects the mortgagee, had existed at the time of the assignment of the mortgage to the appellant, instead of being bound to give notice to the assignment to the respondent, the appellant would have held *299the mortgage discharged from the respondent’s equity unless he had personal, notice of it.
But it is said that the appellant suffered Wattles to remain in possession of the mortgaged premises after the assignment, claiming as owner, whereby he enabled him to per-. petrate a fraud by dealing with the property as his own.
The possession of Wattles was consistent with the claim of the appellant. He claimed only as mortgagee. Wattles was in fact the mortgagor, and according to the established usage of the country, was permitted to retain possession, ° j 7 r i
Whethersuf_ feting Wattles p°ossrees™o™ af“ feeted appei-
Wattles he-mg mortgagor, his possession was consistent appeiiant.m °f
The rale, that whoever purchases an estate from the owner, knowing it to be in the possession of tenants, is bound to inquire into the estates those tenants have, (Taylor v. Stibbert, 2 Ves. 437, Hiern v. Mill, 13 id. 118, Hall v. Smith, 14 Ves. 426, Daniels v. Davison, 16 id. 249,) and all the consequences which flow from it, are applicable to this case, No such tenant, nor any one claiming, under him, contest the rights of the appellant. If Morey was in possession at the time of the assignment to the appellant, it was as tenant to Wattles, either at will, or from year to year; and not as pretending to claim any right of property in the_ premises. Whatever his rights were, they all accrued subsequent to the assignment. ‘ But Morey was not, at that time, in possession. I shall have occasion hereafter to show, that he did not go into possession until December, 1818, at the shortest, and probably not until still later. Johnson, then, the mortgagor, was still in possession. Does he, or any one claiming under him, attempt to impeach the equity of the appellant 1
. Rule chargwfth^knowledge of title of session, not
ant of Wattles
I have already said, that the possession of Wattles, after the assignment, was consistent with it; and if he pretended to be the absolute owner of the property, the law will not charge the appellant with knowledge of such claim; nor can he be held responsible for the consequences which may result from it, however fraudulent they may be, unless he is made a party to the fraud, by proof that he knew that Wattles claimed to have the absolute estate, and, after such knowledge, still left him in possession. Whether knowledge of such claim would make him a party to tie fraud, *300it is not necessary to inquire; for there is not the least evidence in the case to affect him with such knowledge.
I am, therefore, clearly of opinion, that the appellant has not forfeited, by any act, either of omission or commission, any right acquired by him under the assignment of Nov. 9, 1818.
Nature and extent of interest assigned.
Wattles had legal estate; and equitable interest in two-thirds.
Sabin, the residue.
It remains, then, to inquire into the nature and extent of the interest which passed by that assignment. Wattles, at the time of the assignment, had the legal estate as mortgagee in the whole of the mortgaged premises, and the equitable interest of the mortgagor in about two-thirds, under the purchase made by him,-at the Sheriff’s sale, on the 20th April, 1818. The equity of redemption in the remaining third being in Wm. H. Sabin.
Whether union of the two estates in Wattles, extinguished mortgage.
It is contended on the part of the respondent, that by the union of the legal and equitable estates in. Wattles, the mortgage became extinguished, at least to the extent in which that union had taken place; that if the mortgage subsisted for any purpose after that union, it was only as an incumbrance upon that portion in which Sabin had the equity of redemption. The assignment to the appellant, therefore, it is contended, passed no interest in the residue.
Merger, at law, is when greater and less estate meet in the same person, without intermediate estate.
Less estate merged. E. g. Tenant for years, who acquires reversion in fee.
A merger at law, is defined to be “ where a greater estate and a, less, coincide and meet in one and the same person, in one and the same right, without any intermediate estate.” The less estate is immediately annihilated, or, in the law phrase, is said to be merged, that is, sunk or drowned in the greater. Thus, if there be tenant for years, and the reversion in fee simple descends to, or is purchased by him, the term of years is merged in the inheritance, and shall never exist any more.” (2 Black. Com. 177.)
Rule in equity same; but controlled by intention.
The rule in equity is the same as at law, with this modification, that at law it is invariable and inflexible. In equity it is controlled by the expressed or implied intention of the party in whom the interest or estates unite. (Compton v. Oxenden, 4 Brown Ch. Cas. 403. 2 Vesey, Jun. 264. Forbes v. Moffatt, 18 Vesey, 384. Wade v. Paget, 1 Brown Chan. Cas. 368. Gardner v. Astor, 3 John. Ch. Rep. 53.)
*301It was argued for the appellant, that the doctrine of merger is not applicable to this case, because the whole legal and equitable estates, in the whole subject matter of the mortgage, were never united in the same person. It is obvious that there was no merger as to that portion of the mortgaged premises, in which Sabin acquired an equitable interest, because he had no legal estate into which his equitable interest could sink. But 1 have bee"n unable to realize the weight of the considerations which were drawn from this circumstance against a merger as to the residue.
thereTan^be merger pro jsr0" merger part of
The whole legal and equitable estates must unite or there can be no merger. Blackstone says, (2 Com. 103,) “ an estate in lands, tenements, and hereditaments, signifies such interest as the tenant hath therein.” The estate of Wattles, in the mortgaged premises, was his legal interest in each and every portion of them. The estate of Johnson in the same premises, was his equitable interest in each and every portion of them. When Wattles, therefore, became the purchaser of Johnson’s equitable interest in two-thirds of the premises the whole legal and equitable in estates those two-thirds were united in him; and I can perceive no reasons why that might not have been a merger pro tanto.
Estates must
An estate in lan?3’ i8 as tenant hath Estate of
Watties his leJohnson^6 his in‘
How 2-3 of m^ht^e mer„ ged
Wiscot’s case, (2 Co. Rep. 61,) is a direct authority for the doctrine, that a portion of a particular estate may be merged without the residue. It is there said, “ if the reversion be granted to tenant for life, and another in fee, the estate for life is extinct for a moiety; for tenant for life cannot purchase or get the reversion or remainder of the same land, but the estate for life will be merged, having regard to the estate which he hath gotten in the reversion.” That is, there shall be a merger so far as the particular and residuary estates unite. The tenant in that case having the whole of the estate for life, and a moiety of the reversion, only a moiety of the estate for life merged; leaving him with an absolute estate in one, an estate for life in the residue, reversion in fee m the stranger. This is a case precisely analagous in principle to the one before the Court.
This may be 80 at law > r
To say that after a merger has taken place there can be no foreclosure of the mortgage, nor any action upon the *302bond, and that therefore there can heno merger of a part of the mortgaged premises, is begging the question. There can, strictly speaking, perhaps be no foreclosure as to that portion in relation-to which a merger has taken place, because the fact of merger presupposes the annihilation of the equity of redemption, which is the only object and effect of a strict foreclosure. But what is to prevent a foreclosure as to the residue ? ’ It can not be questioned that there may be a foreclosure as to one portion of mortgaged premises and not as to the residue. It is the uniform practice of a Court of Chancery to prevent a sale of the whole mortgaged property, where it is made to appear that a portion of it will produce a fund sufficient to pay the mortgage debt; and where it is obvious that it would be either useless or inequitable for the foreclosure to embrace the whole mortgaged premises, there can be no doubt of the authority or the disposition of a Court of Equity to restrict it to a particular portion.
*301mart! gage merges, ing ta prevent ("residue6 38
*302The only difficulty, which it appears to me can possibly arise, is as to the apportionment of the debt; and under the ample discretion which Courts of Equity exercise in relation to mortgage securities, I am persuaded that the difficulty from this source would not be found formidable. All the parties in interest are necessarily brought before the Court, The rights of all are disclosed, and the decree- is moulded according to the exigencies of the various and complicated equities of the case. This plastic power of a Court of Equity has never been exercised with more vigor or benignity, than in the Chancery of this state. The case of Tice v. Annin, (2 John. Ch. Rep. 125,) is but one of many illustrations which might be produced of the truth of this remark.
Bond may be sued for balance.
The same observations are applicable to the difficulty which, it is alleged, would be found in fixing the measure of recovery, in any suit which might be instituted upon the bond, for the balance remaining due after the merger.
I am, therefore, of opinion, that a merger in relation to that portion of the mortgaged premises, the legal and equitable titles in which were united in Wattles, would not be prevented by the fact, that no such union had taken place as to the residue.
*303It remains, then, to inquire whether there was a merger ¡>f any portion of the premises; and this will depend entirely upon the intention of Wattles, either expressed or implied, that there should or should not be a merger.
The rule upon this subject is perspicuously stated by the master of the rolls, Sir William Grant, in Forbes v. Moffatt, (18 Ves. 389.) He says, “ it is very clear that a person becoming entitled to an estate, subject to a charge for his own benefit, may, if he choose, at once take the estate and keep up the charge. Upon this subject, a Court of Equity is not guided by the rules of law. It will sometimes hold a charge, extinguished, where it would subsist at law, and sometimes preserve it where, at law, it would be merged. The question is upon the intention, actual or presumed, of the person in v)hom the interests are united. In most instances, it is with reference to the party himself, of no sort of use to have a charge on his own estate; and where that is the case, it will be held to sink, unless something shall have been done by him to keep it on foot.” The same general doctrine is laid down and acknowledged in all the cases. (Lord Compton v. Oxenden, 2 Ves. Jun. 263. 4 Br. Ch. Cas. 398, S. C. Thomas v. Keymiss, 2 Vern. 348. Gardner v. Astor, 3 John. Ch. Rep. 53. Mills v. Comstock, 5 id. 214. Starr v. Ellis, 6 id. 393. 2 Fonbl. 162, ch. 6 s. 8.
Merger depends on expressed or implied intention of mortgagee.
The rule upon this sub» ject.
One consideration, therefore, is, whether Wattles has done anything to determine that election which he undoubtedly , , . . ... , , . J had. If not, the question will be upon the presumption of law under the circumstances of the case.
Whether WattIeB did any thing to determine his election.
The first point to be settled under this head of inquiry is, within what period was Wattles bound to make his election whether the equitable and legal estates should remain distinct or become united in his hands ; for, until this is determined, we know not what acts or declarations of his are to be taken into consideration. If he was bound to make his election within a given time, six months for instance, then we have only to examine whether, within that period, he did any thing that determined the election. If not, then we resort to the presumption of law which arises upon the *304case; and that presumption must control, although it be re polled and contradicted by the clearest and most unequivo cal manifestation of his intention, subsequent to the lapse of the given time.
*303Within what Eenod was he elect?
*304Most of the English cases have gone upon presumed intention.
Most of the English cases have been decided upon the presumed intention of the party, there being no evidence of his actual intention. Thus, the case of Ld. Compton v. Oxenden, (4 Br. Ch. Cas. 398,) was one of a lunatic, who was incapable of expressing any intention. So also of ex parte Grimstone, (Ambl. 706,) and Powell v. Morgan, (2 Vern. 90,) Thomas v. Kemish, (id. 348,) and Lawrence v. Blatchford, (id. 457,) were cases of infancy. An intention in the two first cases, (Powell v. Morgan, and Thomas v. Kemish,) had been expressed, it is true, by the making of wills, but the Ld. Chancellor, in Ld. Compton v. Oxenden, says, "the cases of infants turn upon a supposed intent. The Court saw, in Thomas v. Kemish, that it was much more beneficial for the infant that the interest should continue pernal.”
But in one case, the acts of party were examined for a series of years, and up to time of his death.
But in Forbes v. Moffatt, (18 Ves. Jun. 389,) the acts of the party were considered and examined for a series of years, and up to the time of his death, for some evidence of his intention as to the continuance or merger of the charge; and no act of his.having been found, which was decisive upon the point; the case turned upon the legal presumption of his intention, that the charge should not merge, because it was for his interest that it should not. No resort was had to legal presumption of his intent, until the whole period between the time when the estates united and the death of’ the party, (which was ten years,) had been searched in vain for some conclusive evidence of his actual intention.
The decisions in the chancery of this state considered, as to the time within which the party must elect.
In Gardner v. Astor, (3 John. Ch. Rep. 53,) more than three years had elapsed after the union of the legal and equitable estates, before the mortgage was assigned. It was heard upon bill and answer: of course there was no proof in the case, and no act appeared to have been done by Winter, between the time when the two estates come into his hands, and the time when he assigned the mortgage to Gardner. But the Chancellor appears to have put his decree upon the ground that the assignment was in fact made subse *305quent to the conveyance to the defendant Astor; it not having been acknowledged until after that period, Astor swearing that he believed it was not made until after the conveyance to him, and there being no proof to show, as the Chancellor remarks, when it rvas actually made.
The case of Mills v. Comstock, (5 John. Ch. Rep. 214,) was decided upon its own peculiar circumstances, and the question of election did not there arise. The Chancellor put his decree, upon the ground that the assignment of the mortgage to Comstock was a deed or conveyance within the meaning of the registering act of Jan. 8, 1794, and not having been registered, was fraudulent and void as against Mills; who was a subsequent purchaser for valuable consideration. The assignment being void, the mortgage was to be considered still in the hands of Herrick, and the deed from him to Mills, being the first act of his Avhich legally affected the transaction, must necessarily be considered as conclusive evidence of an election on his part, that the two estates should unite; because that deed purported to convey an estate which it could not convey unless a merger had taken place. But, as I have already remarked, the Chancellor put it upon the ground of fraud.
In Starr v. Ellis (6 John. Ch. Rep. 393) the Chancellor does say, “ that unless some beneficial interest be shown to require the charge to be kept up, or the intention to keep up the charge be immediately and duly declared, it shall merge.” Upon an examination of that case, it will he found that the assignment of the mortgage was from a father to his son. The bill alleges the assignment to have been fraudulent. The son appears not to have answered. ' The father, it is true, denies the fraud, and says the assignment was made in satisfaction of a debt due from him to his son. The proofs taken in the cause are not stated. What they must have been may be inferred from the language of the Chancellor. He says, “ the facts warrant the charge of a fraudulent combination between the two defendants to set up the mortgage to the prejudice of the plaintiff’s title which he purchased of the defendant, Samuel Ellis. The credit *306of the answer of Samuel Ellis is very much shaken by the proofs against the truth of some of its averments, and I am entirely satisfied, that the mortgage has been fraudulently assigned, and set on foot to injure the plaintiff’s title. The assignment to the son, if even before the plaintiff's purchase, was colorable only. The marks of fraud are upon every part of this transaction."
It will be perceived, then, that in the opinion of the Chancellor, this was a case of actual gross and glaring fraud; that the assignment was colorable only; and (admitting the mortgage to have been a subsisting security) would have been void, not only against a bona fide purchaser, but even against the creditors of the father. The question of merger did not, therefore, necessarily arise in the cause; for whatever might have been the opinion of the Chancellor upon that point, the assignment must have been declared void on the ground of fraud. The observation of the Chancellor, therefore, “ that the intention to keep up the charge must be immediately declared," comes to us with a diminished weight of authority. He must have perceived that the question of fraud controlled the case, and perceiving that, it is not disrespectful to him to suppose, that he gave to the other features of the case a consideration less laborious and profound than he would otherwise have done. In questioning the correctness of that position, therefore, I consider myself as combatting the impressions merely, and not the authority of the Chancellor. But there was, in truth, in that case, a lapse of 14 months between the purchase of the mortgage by Samuel Ellis and the assignment to his son. And if the case had turned upon the question of merger, all that would have been decided by it is, that if the party in whom the legal and equitable estates unite, does not, within 14 months, declare his intention that they shall or shall not remain distinct, the law will presume his intention from the circumstances of the case. To establish the rule that the intention of the party shall be immediately declared, or the law shall declare it for him,' would be virtually to take from him the privilege of election. How is he to make his intention known, except by his acts in relation to the property which is the sub*307ject of the charge 1 Is not a reasonable time, then, to be allowed him 1 Is he to be compelled immediately to assign the charge, if he intends to keep it distinct ? or to sell the fee, if he intends the charge shall merge ?
If the law gives him the privilege of election, it will give him a reasonable time within which to make it. This appears to me to be the good sense of the rule; and it is clearly sanctioned by the authorities to which I have adverted— particularly by the case of Forbes v. Moffatt
He is to have a reasonable time.
What is to be considered a reasonable time, must depend, in some degree, upon the circumstances of each case, upon the nature of the charge, the situation of the property, and the circumstances of the individual.
And what is reasonable time depends on circumstances, &c.
Let us, then, inquire whether Wattles, within a reasonable time after he became the purchaser of the equity of redemption, did any thing which clearly manifested his intention that it should or should not merge in the legal estate. The circumstances relied upon to show that Wattles considered the mortgage as merged, and so intended, are, that after the Sheriff’s sale, he entered into possession of the premises— that he repeatedly declared the whole title to the Johnson -property (except the. interest acquired by Sabin at the Sheriff’s sale) was in him—that he offered to sell it, and said he would give a clear title.
Circumstances of this case, in reference to that point.
It does not appear that Wattles, himself, ever entered into the actual possession of the property. Johnson, the mortgagor, continued in the house until the spring of 1819—that is, for a year after the sale—and Morey, the respondent, took possession of the residue, under some agreement with Wattles, either in the fall of 1818, or the succeeding winter. Reuben West says he entered in December, 1818. Thaddeus M. Wood says the latter part of the year 1818. Wm. vlark says in November or December, 1818. Asariah Smith says in the winter of 1818 and 1819. The. witnesses all speak of the whole mortgaged premises; for the 15th interrogatory, to which these answers are responsive, asks when D. Morey, went into possession of the premises contained in the deed marked B. Now the deed marked B is the deed of the 14th June, 1819, from Wattles to D. Morey, for the *308whole of the mortgaged' premises. The entry, therefore, of Morey, as the agent or tenant of Wattles, extended not only to that portion, the equity of redemption in which had been purchased by Wattles, but also to that, the equity of redemption in which had been purchased by Sabin, The entry and possession were precisely the same in relation to both portions.
*307MoreyTthe^’espondent, enoTisiS^™16* Wattles never
*308As mortgagee.
The question then is, in what character did he enter—as mortgagee or absolute owner ? I answer, as to Sabin’s portion, he must have entered as mortgagee, because he had no right to enter in any other character. The inference, then, is irresistible, that he entered into the whole as mortgagee, and mortgagee only.. As far, therefore, as the taking possession of the mortgaged premises affords any evidence of Wattles’ intention, it is that he meant to keep the legal and equitable estates distinct.
Tousley, Gilbert and Granger’s evidence, that ' Wattles claimed title and right to sell.
Sylvanus Tousley, Thomas I. Gilbert, and Hezekiah L. Granger, all swear, that in the summer of 1818, Wattles claimed to have a complete and perfect title to the Johnson property, and a right to sell and dispose of it, (except Sabin’s portion ;) and so he most unquestionably had. He had the legal estate by his mortgage, and the equitable by purchase ; and he had the power of uniting them whenever he pleased. But does the assertion of that fact afford any evidence of a present subsisting intention to unite them ? Clearly not. It is well remarked by the Master of the Rolls, in Forbes v. Moffatt, “ that the owner of a charge is not, as a condition of keeping it up, called upon to repudiate the estate. The election he has to make, is not whether he will take the estate or the charge, but whether, taking the estate, he means the charge to sink into it, or to continue distinct from it.” I lay out of the case all the declarations which Wattles is said to have made, that he had a deed for the property from Johnson., They are clearly incompetent evidence, as against the appellant, of the existence of the deed. Nor do they, in my judgment, afford the slightest evidence upon the point now under discussion.
Nothing found 10 determine
The assignment of the mortgage from Wattles to James, is the next event in the order of time; and, indeed, it was an-*309tenor to the possession of the mortgaged premises taken by Morey. The balance of evidence is, that Morey did not enter until December, 1818. The assignment was on the 9th of November preceding. It was entitled, therefore, to be first considered in determining the intent of Wattles.
I apprehend there can be no difference of opinion, as to x 1 e * the decisive evidence which this assignment affords of Watties’ intention to keep the charge distinct from .the legal estate. It contained a solemn covenant, that the bond and mortgage were a subsisting security, and that the sum of $12,000, was then due upon it. It was the first act, on the part of Wattles, after the union of the two estates in his hands, which affords any evidence of his intention whether they should be kept distinct or not. It was within six months and a half after he acquired the charge, which I cannot consider an unreasonable time to allow him for making his election. It affords, then, in my judgment, competent and conclusive evidence of the actual intention of Wattles that there should be no merger, and precludes all inquiry into the presumption of intent which the law, in the absence of such evidence, might have inferred from the facts in the case.
election till assignment. The assign- ^ decisive evidciico of ties’ intention a°iarg®ep tinct from the Iegal estate‘
When the assignment was made, there were no claims or rights in conflict with it. Nothing had been done by Wattles to render it unjust or inequitable to keep the estates distinct, in conformity with his declared wish and intention. No man had dealt with him upon the legal presumption of merger, and no one had a right to question or impeach the transaction between him and the appellant. That the demand of the appellant, for which he took the assignment of the mortgage as security, was just and equitable, as against Wattles, has not been, and cannot be denied. He received for it a full and fair consideration, and unless he has forfeited the rights thus acquired, by his subsequent acts, he is entitled to a full and unconditional enjoyment of them.
I have endeavored to show that the appellant has done every thing which he was bound by law to do. Let us inquire, for one moment, whether the respondent, in dealing with Wattles, exercised the caution which, as a prudent man, ne ought to have done. It was a matter of public notoriety, *310that Wattles had a mortgage upon the Johnson property. jt was als0 matter of record, for the mortgage was registered. The respondent, had legal, and undoubtedly actuknowledge of the fact. When he took his conveyance, therefore, on the 14th of June, 1819, he knew that , ... . . Wattles’ title to the property conveyed originated m a mortgage. He knew, then, that the mortgage was one of the title deeds to "the estate. If he knew of the purchase of the equity of redemption by Wattles, he also knew, in judgment of law, that it was in the power of Wattles still to keep the equitable and legal estates distinct. He knew that an assignment of the mortgage by Wattles, immediately, or within a reasonable time after the purchase of the equity of redemption, would determine his election, and pass the legal estate to his assignee. He knew that the possession of the title deeds, if not indispensable, is a measure of prudent precaution on the part of the purchaser; for he took from Wattles the deeds from the Sheriff and Sabin to him. Did he then act with the proper caution, not only in omitting to demand the mortgage, as one of the title deeds, but in omitting to make any inquiry concerning it. If he had asked for the mortgage, and its delivery had been evaded or refused, it would have excited suspicion and inquiry, which would have led to a discovery of the assignment. To whom, then, is negligence imputable, and who has trusted most ?
*309re^ÓndeMex! ercised the ^prudenTman *310ought to have done in deal-tie&Wlth Wat*
Whether, as supposed,'^the appellant dealt with a suspiclous instmtbe14 ‘“assi'af went. °
The Chancellor says, “ The assignee has no right to cornplfdn. He dealt with a suspicious instrument that ought f0 jiave pUt him upon inquiry. He knew, or was bound to J r i. j know, for it was matter of record, that Wattles had pnrohase(^ i*1 the equity to at least three-fourths of the premises, Why did he not record the assignment, and why did he not take a new mortgage? The answer to most of these inquiries is to be found in the considerations which I have already submitted. James had no actual knowledge of the purchase by Wattles. The recording of the Sheriff’s deed was not notice to him, in judgment of law; for, by law, it was not necessary to record it. He did not record his assignment for ■ the same reason. He may not have taken a new mortgage, *311because he did not know that Wattles had it in his power to give one: or, if he did know it, he understood that a new mortgage could cover but three-fourths of the premises, and he may have taken the assignment, because he preferred security upon the whole to security upon a portion of the premises. The instrument with which he dealt may have been a suspicious one, though, I must confess, I have been unable to discover what rendered it so.
But concede the fact, that here was sufficient to put James upon inquiry, and that he did inquire; what discovery could the most diligent investigation have made, which would have warned him against taking the assignment. He would have learned that the legal and equitable estates were both in Wattles—that he had done no act which evinced an intention, on his part, that the former should merge in the latter—that he had neither parted with, nor incumbered either—and that there was no living being whose rights or interests would be, in the remotest degree, affected by his determination to unite or to preserve the two estates distinct. If he had asked the respondent whether he had any interest in the question, he would have learned that he had not. The most diligent inquiry would, therefore, have resulted in a conviction, on the part of the appellant that there was no legal or equitable objection to his taking the assignment. His right, therefore, is not only first in point of time, but it is supported by the better equity. I am, accordingly, of opinion, that the decree of his Honor the Chancellor should be reversed.
right 6¡¡ first in point of pOTtedby^ho better equity;
And the decree should be
It will be perceived, that the view which I have taken of the case, has rendered it unnecessary for me to consider whether the appellant’s judgment was valid, as against the respondent’s mortgage, or not; though I should be inclined to the opinion, that it was not, upon the authority of Lawless v. Hackett, (16 John. 149,) and Brinkerhoff v. Marvin, (5 John. Ch. Rep. 320.) without having given to the subject much consideration. An examination of the accounts between Wattles and Morey is also unnecessary; for, having come to the conclusion that the appellant’s mortgage is first *312to be satisfied, the amount, for which the respondent’s is to stand, must be perfectly immaterial to the appellant. It there should be any surplus, it may be matter of discussion between Wattles and Morey.
*311the appellant’s wou1™not afwant of a pro- [!“ sPecifiba‘
*312Wattles for-feM his right mortgage to chase'8by^not disclosing the WhaFwattles acquired of to confirm as signment.
I have also omitted to consider what interest Sabin acquired in the mortgaged premises, by this purchase at the Sheriff’s sale. Whether the equity of redemption merely, or the whole estate, in consequence of Wattles’ silence as to incumbrances; because, whatever he acquired passed to Wattles, by his subsequent release, and neither he nor his grantee can. set up the fraud to bar the incumbrance of the appellant. If he acquired from Sabin any thing beyond the equity of redemption, it enured to the benefit and confirmation of his deed of assignment to the appellant, and did not pass by his deed to the respondent. (Trevivan v. Lawrance et al., 1 Salk. 276, 2d res. Palmer v. Ekins, 2 Ld. Raym. 1550. Jackson v. Bull, 1 John. Cas. 90, per Kent, J.)
Savage, Ch. J.
(After stating the facts, substantially, as' detailed by Woodworth and Sutherland, Justices.)
The object of the bill.
The appellant seeks to foreclose the mortgage assigned to or to recover the money on his judgment against Wattles.
Defence.
The respondent claims to hold the premises in pledge for the objects for which they were mortgaged, and also for a general balance due to him from Wattles.
To determine correctly the rights of the parties, it becomes important to ascertain those of Wattles on the 9th November, 1818.
The mortgage is still an mcumbraitce ed'inoperathm by the sheriff’s
The mortgage was given upon sufficient consideration, and there can be no doubt that the whole $12,000, and more were advanced by Wattles. It must then be still a subsist-J ing incumbrance unless it has become inoperative in consequence °f the Sheriff’s sale of the 20th April, 1818. The Sheriff sold the equity of redemption only. (Jackson v. Hull, 10 John. 481.) There is no pretence for alleging that the mortgagee, by his silence at the sale, forfeited his rights. His mortgage was registered, which was notice to all the world; and the judgments upon which the executions issued were *313younger than the mortgage. Two witnesses heard Wattles give notice of his claim ; others, though present at the sale, did not hear this notice ; but it is clear that the bidders knew of the mortgage, or they would not have suffered property worth 8 or 10,000 dollars to be sold for 645 dollars. That Sabin knew of the mortgage, is proved by his subsequently conveying to Wattles for a nominal consideration. Whether Wattles had a deed from Johnson, previous to the sale, I think very immaterial, as it must have been of later date than the judgments on which the sale was made. When, therefore, Sabin purchased one-fourth of the mortgaged premises, there can be no doubt that he had a good title to the equity of redemption for so much, whether Wattles had a previous deed or not. Sabin was the owner A of this equity of redemption on the 9th November, 1818; and as to that part- of the mortgaged premises there could be no merger. The mortgage was certainly valid pro tanto ; and the appellant’s right was complete before Sabin conveyed to Wattles, which was not till the 26th May, 1819. The doctrine of merger, as derived from the decisions in Great Britain and this state, seems to be this : that when the legal and equitable estates become united in the same person, the equitable is merged in the legal estate unless, 1. the party in whom they unite manifest an intention to keep them separate : or 2d, it is manifestly his interest to keep them so ; but when it is indifferent whether they unite or not, or when an intention to unite them is shown, then they shall be united. In this case, it has not been shown that Wattles had any interest in keeping the two estates separate ; and so far as his intentions are in evidence, from his declarations or his acts, previous to his assignment of the 9th Nov. they all go to prove a merger. His declarations that he owned the ° A ° whole property, and his offers to sell, prove it.
gab¡n acqu¡_ red the equity^ne^fourth of the Premi" ses:
And as to that be
_ . . merger when ^fie ^estates meet,
”to keep them sedeclarations, ‘S &c-> S° t0 prove merger, Assignment as ^re^an unregistered mortgaffe-
In my opinion, therefore, the assignment of Johnson’s mortgage, so far as the property purchased at the Sheriff’s sale by Wattles is concerned, can have no greater effect than that of an unregistered mortgage.
At the time when this mortgage was assigned, the appellant took a judgment, which is not impeached as to the fair*314ness of the transactions between the parties; but a techninicai objection is raised, that the specification required by the statute, then in force, was insufficient. The decision & th® case of Lawless v. Hackett, (16 John. 149,) is in point, anc* sh°ws the objection to be well founded. In the view which I have taken of this subject, it does not become necessary to question the correctness of that decision. It may, however, be proper to remark, in passing, that the evil proposed to be remedied by the law of 1818, was the facility of committing frauds in entering up judgments by confession; as it was the practice, (whatever might be the real consideration,) to state it to be money lent. The legislature, therefore, required the nature and consideration of the debt to be stated in the specification; but. when the Court carried it so far as to require every item of the plaintiff’s account to be specified the legislature seem to have considered the remedy worse than the disease, and, in 1821, repealed the act.
*313_ Appellants Ju<3sment-
*314Obj t d t as wanting a catioif spec‘fi" ■
But the re spondent is a ly^fofa^urchaser, and the “wander defect of a specification.
As the objection to this specification is strictly technical, if it be considered tenable, a technical answer should be re-' ceived. By the act, a judgment without a specification, shall be adjudged fraudulent as it respects any other bona fide judgment creditors, “ and every bona fide purchaser for valuable consideration, of any lands bound or affected by such judgment.” The respondent is not a judgment creditor. He is simply a mortgagee. He is not, there-f°re’ technically a purchaser: (Berry v. Mutual Insurance Company, 2 John. Ch. Rep. 612;) nor do I think the legislature contemplated a mortgage creditor by the terms bona fide purchaser for valuable consideration. In the language of the Chancellor, in Searing v. Brinkerhoff, (5 John. Ch. Rep. 331,) “ purchasers are there mentioned in A contradistinction to creditors, and the word is used in the common and popular sense.” “ The act ought not to be extended by construction ; and the ordinary lien of the judgment creditor who might happen through the inadvertence, or the error of counsel, to omit as particular a specification as the act required, ought not to be impaired except in favor of those particular persons, who can bring themselves clearly and strictly within the letter and within the mean- . *315ing and policy of the exception. In my judgment it is no answer to say that a mortgagee comes within the reason and policy of the act. The legislature may have had wise reasons for excluding mortgagees from the benefits of this act, as well as the act authorizing the redemption of lands sold on execution. (Matter of Saunders Van Rensselaer v. The Sheriff of Albany, 1 Cowen’s Rep. 501.) It is sufficient for us*that ita lex scripta est.
I am, therefore, clearly of opinion, that the appellant is entitled to the benefit of his judgment. It was a perfect lien as against the respondent. He admits, in his answer, that he knew of this judgment before the 14th June, 1819, and he did not know till January, 1821, that there was any objection to the specification. All his arrangements were made with Wattles, and his securities taken, under the expectation that the judgment was a lien upon the lands of Wattles, and to he satisfied in preference to his mortgage; and, in December, 1819, this judgment was the only obstacle in the way of an absolute purchase.
And the ap¡^¿auttg benefit of his iudSment
The result of my opinion on this part of the case is, that the plaintiff is entitled to the benefit of his judgment, and to his mortgage also, upon the fourth part of the premises purchased by Sabin at the Sheriff’s sale, on the 20th April, 1818.
A”d to h,s one-fourth of purchase™^ Sabin.
As to the other three-fourths of the premises, the respondent, I think is entitled to preference in the satisfaction of his mortgage, if any thing remains after the payment of James’ judgment, unless his rights are affected by other circumstances in the case, constituting the equities of the parties. This part of the case, his Honor the Chancellor thought decidedly in favor of the respondent, and placed much reliance on the fact, that the appellant had neglected to record his assignment. It was conceded on the argument, that the recording acts, which relate to the mili¿ary lands, have no application to the premises in question, they not being a part of those lands; and this concession destroys that part of the Chancellor’s argument, which is predicated on the necessity of recording the assignment. I know of no law requiring the assignment of a mortgage to be recorded.
It was not the^^Zsígnmei»t should 8 wcordei
^ quiing this,
*316If notice of the assignment is not given to the mortgagor ke is protected in any payments he may make to the mortgagee. And this is the extent of the risk run by the as* signee, who neglects to give notice of the assignment.
mortgagor6 fa alone necessa-
operated as an unregistered mortgage as to
pendent never being registered as a mort-
to be considered an mortgage”11
Appellant Iirs prsfoisiics in this view,
I have already stated, that I consider the appellant’s assignment operative as to one-fourth of the premises, and as to the other three-fourths, it must be placed upon the footing of an unregistered mortgage. The respondent’s morto-gn-g Was recorded as an absolute deed, but was- never re- ° ° * gistered as a mortgage. They are both, therefore, unregistered mortgages. (Dey v. Dunham, 2 John. Ch. Rep. 189.) The second mortgage does not necessarily gain a- ' . . ? , , .. , preference unless registered; and not even then, if the second mortgagee has notice of the first mortgage. The rule, “qui prior est tempore, potior est jure” applies, unless the appellant has been guilty of fraud or culpable negligence, by leaving Wattles in possession of the mortgaged premises. Fraud is not imputed, and in point of negligence, the parties are equal, “ it is a common rule, (say the books) that when of two persons equally innocent, or equally blameable, one must suffer, the loss shall be left with him on whom it has fallen; and here comes in the other rule, that the equities being otherwise equal, the priority of time must determine the right.” (Berry v. Mutual Insurance Company, 2 John. Ch. Rep. 603.) It seems to me, therefore, that the appellant is entitled to preference as to the unregis tered mortgage upon the three-fourths of the property purchased by Wattles at the Sheriff’s sale.
But if remortgage^akc preference, ^ be as to the intended tobe secured by it.
dent had other security from oúght to have himsolflfieCl
But even if the respondent’s mortgage were to have preference, it could extend only to the objects for which the indemnity was given, to wit, the Auburn note, and the Wattles and Granger debts. As an additional security, Wattles assigned i™ stock) &c., and some other personal property. The parties have presented very contradictory statements as to the amount of the security afforded by means of the personal property. Taking the accounts attached to the respondent’s answer, it appears that he had abundant security in this property. And as he knew of the appellant’s judgment when he took that security, and did not then doubt its valid*317ity, he was most grossly negligent in omitting to.indemnify himself.
On the whole case, therefore, I am of opinion, that the decree of his Honor, the.Chancellor, should be reversed.
Bowne, Burt, Dudley, Green,- Hathaway, Hunter, King, Lefferts, Mallory, and Redfield, Senators, concurred in the result of the opinions delivered as above by the Judges.
Cramer, Senator. In this case, from the facts detailed in the pleadings and proofs, it appears that Johnson gave a bond and mortgage to Wattles, to. secure the payment of $12,000, dated the 24th day of June, and registered the 17th day of July, 1817. The mortgaged premises were sold on the 20th day of April, 1818, by virtue of executions on several judgments docketed subsequent to the execution of the mortgage. Wattles, the mortgagee, became the purchaser, at the sale, of three parcels of the premises, took a deed from the Sheriff, and had it recorded on the 28th day of the same month. William. H.. Sabin purchased one parcel of the premises at the same sale, and-Wattles, on the 9th day of . November, 1818, assigned the mortgage of Johnson to the appellant, as security for a debt previously contracted by one Meeker, for $9331. Wattles, on the 14th day of June, 1819, for a valuable consideration, sold, in fee, the whole of the premises, covered by the Johnson mortgage, to the respondent. ■ Prior to this conveyance, Wattles had purchased of Sabin all his right and title to the mortgaged premises. But this purchase was not made until after the assignment of the mortgage to the appellant.
Summary ef tlie facts
This is a brief summary of the facts in the case, which I have deemed most material in forming a correct decision. Several other points were made, and all very ingeniously discussed by the counsel; yet it appears to me, from the view, I have taken of the subject, that the real merits are confined to very narrow limits, and depend entirely on the doctrine of merger, .as recognized and settled in the Courts *318of law and Equity in this country, and that from which we ¿er;ve our SyStem of jurisprudence.
*317Meats- déof'met * ger..
*318_ , , , Contest db-tween lona fide creditors.
I will here premise, that I consider this case, from all which has been presented to the Court, a fair contest between bona fide creditors to obtain securities for their res-j pective debts or liabilities, from a debtor who was willing to ¿efrau¿ either of them.
1st point
pomt'
Rule is that when legal and equitable claims unite in the16 equitable claim is merged‘
i shall first, then, consider whether the legal and equitable estates had vested in Wattles under such circumstances that, in judgment of law, the mortgage was extinguished by merger as to those parts of the premises purchased by him at the Sheriff’s sale; and if so, secondly, whether that part purchased by Sabin, and quit-claimed to Wattles after the assignment, can, by any rule of law, be exempted from the operation of the Johnson mortgage in the possession of the respondent. From all the authorities which I have been able to examine, I consider the rule well settled, and I think it a rule founded upon good sense and justice, that when the ¡e„a¡ an¿ equitable claims are united in the same person, ° * the equitable title is merged, and no longer exists except in special cases. In support of this position, the cases of Gardiner v. Astor, (3 John. Ch. Rep. 53,) Mills v. Comstock, (5 id. 214,) Staar v. Ellis, (6 id. 309,) and Compton v. Oxenden, (2 Ves. Jun. 261,) are explicit and decisive.
Exceptions.
. indiffisrent to claim Should subsist or not, ^always mer-
The only exceptions to this rule are, first, when there is a declared intention on the part of the mortgagee, that the equitable and legal titles shall continue distinct; secondly, where an intention to continue the mortgage may be fairly presumed from the acts of the mortgagee; and thirdly, where the law will presume such intention from the circumstances of the case, without regard to the acts of the mortgagee, which it will do in two cases:—First, when for the interest of the party, the mortgage should continue: And secondly, when from the situation of the parties, (as in the case of an infant,) he cannot make his election. These are all the cases to be found in which the mortgage will be deemed a subsisting incumbrance, when the mortgagee has the legal and equitable estates united in himself. But when it is indifferent par{y; whether the charge should or should not subsist *319it always merges. Forbes v. Moffatt, (18 Ves. 393.) Do the facts detailed in this case bring it within any of the exceptions above mentioned ? To me, it is obvious they do n0t-
The testimony taken in this case shows most conclusively, that there was no declared intention on the part of Watties, that the mortgage should continue. All his acts and declarations before, at, and after the sale, manifest, most unequivocally, an intention on his part to unite the titles and to extinguish the mortgage; such as purchasing of Johnson the equity of redemption; his silence at the sale, and, after sale, representing himself as absolute owner of the premises, and offering to sell them in fee. The fact of his silence at the sale, is supported by every witness who has testified, with the single exception of West, who says that he attended the sale, and after the property was put up by the Sheriff, heard Wattles publicly say, that he had a mortgage on the property executed by Johnson, for $12,000. But the testimony of West is contradicted, and I think perfectly destroyed by the witnesses examined, who were present at the time; all unimpeached, and ten in number. And how could the declaration of Wattles, in relation to this mortgage, be deemed public, even if it were made to West, when the Sheriff, and every other person present, who has been examined, heard nothing of it. In fact, it is not to be presumed, that Wattles should have made such a declaration in the presence and hearing of those witnesses, as he had before that time declared to most of them, that he had purchased the equity of redemption of Johnson.
si10Ws'VintenS tion to unite estate8,
Nor can I imagine that any beneficial object, as to Watties, could exist for continuing the mortgage. Indeed, it was for his advantage that it should merge; for, by the merger, he became absolute owner in fee, and went into actual possession of the premises, whereby he was enabled to obtain a credit from the respondent, which, as mortgagee, he probably could not have obtained.
No benefit t0 Watties from continuing the mort* gage.
There are no circumstances from which the law can raise a presumption in favor of the existence of this mortgage, *320either on account of any supposed advantage to Wattles, or any disability on his part to make an election.
*319No circum_ ^ncea from sume its continuance.
*320Mortgage be-mg once merged, is always 80
The mortgage being thus merged, in judgment of law, no subsequent intention or act of his could make it a valid subsisting incumbrance as to that part of the premises purchase¿ by at the Sheriff’s sale. This is a necessary conseJ lt , .J quence of the legal principle in relation to merger. The mortgage had become cancelled, and was completely extinct, so far forth as the titles had united in Wattles.
Assignment FngSed except mortga^e^uppurchase, for thatnCe Wptrt wouid have to
The assignment of this instrument to the appellant, on the 9th November, 1818, therefore, passed nothing, except the rateable proportion which that part of the premises purchased by Sabin would have to contribute. The true test the assignee’s rights is, what interest could the mortgagee give at the time of executing the assignment ? That, and that only, could pass to the appellant; for Wattles could confer no greater or other interest than such as he at that time possessed; and if he had legally released three-fourths of the premises to Johnson, from the effect of this mortgage, before the assignment to the respondent, it would hardly be pretended that the assignee, under such circumstances, could hold the parts thus released, still subject to the mortgage ; and, in judgment of law, he had thus released before the assignment.
Assignee of takefSubject to all equities, &c
There is no rule more distinctly settled than this, that the assignee of a mortgage takes it, subject to all the equities subsisting between the mortgagor and mortgagee at the time of the transfer. The circumstances of this case clearly demonstrate the propriety, the justice and the necessity of the rule, that whenever the two estates are united, the equitable estate should merge; otherwise, bona fide purchasers, using every possible precaution and diligence, might be defrauded or postponed to the assignee of a dormant mortgage.
Decree errotiiat™partpurchased by Sa- ' As to this, mortgagee not extinct.
But the decree of his Honor, the Chancellor, is, in my judgment, erroneous as to that part of the premises purchased by Sabin. In him theré was no legal estate into which the equitable could sink. " The legal and equitable estates were never vested in Wattles, he having parted with ’ ° r *321the former by an assignment of the mortgage to the appellant anterior to his acquiring the Sabin title. Wattles, therefore, had a perfect right, at the time he made the assignment, to- pass the mortgage, as to this portion of the premises, to the appellant. And that right, having been thus fairly and legally acquired, in th.e ordinary course of business, should not be defeated, or at all affected, by a subsequent conveyance from Sabin to Wattles, to which the appellant was an utter stranger, unless, in order to protect himself against an innocent purchaser, he was bound to register the assignment.
I am of opinion, that the appellant was not bound by any rule of law, (however prudent it might have been,) to record the assignment of the mortgage. It is not embraced in the words of the act.relative to military titles: for the premises in question are not included in the military bounty lands, as was assumed by his Honor the Chancellor. Nor was the appellant bound to give notice of the assignment to any person but the mortgagor. The case of Williams v. Sorrell, (4 Ves. 389,) relates only to dealings between mortgagor and mortgagee, before notice of assignment, and.has no application to dealings between mortgagee and third persons, who are not parties to the original contract. The moneys, therefore, that might arise from the sale of that portion of the mortgaged, premises, or so much thereof as would amount to its rateable proportion, ought, in my judgment, to have been awarded to the appellant.
^"record88^» assignment,
Assignee is not except mortgagor"
Much has been said on the subject of the appellant’s prior judgment. In answer to that, I will only remark, that if any reliance is to be placed on the validity of that judgment, the appellant has a clear and certain remedy at law to enforce it, and ought not to ask this Court or the Court of Chancery to aid him for that purpose.
Remedy on atil™6nt W3S
I am of opinion, that the decree of his Honour the Chancellor should be reversed, so far as it respects that portion of the premises purchased by Sabin, and affirmed as to the residue.
Bronson, Clark, Easton, Lynde, McIntyre, Ogden Thorn and Wheeler, Senators, concurred.
*322Bowker and Wooster, Senators, were for affirming the Chancellor’s decree.
A majority of the Court being for a reversal of the decree . , the following rule was thereupon entered : ® **■
_ , For rfivcrs&l 13.
in part.r 9VCrSaI
For affirm-“"Decree of reversal.
Rule. This case having been heard, and due deliberati°n being thereupon had, and the bill, as to the defendant, Caleb Johnson, having been taken pro confesso—It is ordered, adjudged and decreed, that the decree of the-Court of Chancery of the 28th day of Oct. A. D. 1822, be, and the same is hereby reversed and vacated.
Order of re-certain t0 balance on mortgage, c.
And it is further ORDERED, adjudged and DECREED, that ^ be referred to one of the Masters of the said Court; to ascertain and report the balance justly due for principal and interest, upon the mortgage from the defendant, Caleb Johnson, to James O. Wattles, mentioned in the pleadings in this cause, and also the balance justly due to the appellant, for principal and interest, on the bond from James O. Wattles to the appellant, also mentioned in the pleadings in this cause.
Order of sale.
And how to dispose of píoseeds.
And it ÍS further ORDERED, ADJUDGED and DECREED, that upon the coming in and confirmation of the said report, the mortgaged premises, as the same are described in the said mortgage from the defendant, Caleb Johnson to the said James O. Wattles, to wit—All that certain piece or parcel of land, (describing the mortgaged• premises') or so much thereof as may be requisite, be sold at public auction, at the court-house in the county of Onondaga, or on the premises, by any one of the Masters of the said Court of Chancery, the said Master giving six weeks public notice of the time and place of such sale, by an advertisement, containing a brief description of the said premises, to be inserted in a public newspaper printed in the said county, and a copy thereof to be affixed on the outer door of the said court-house ; and, further, that the Master making such sale execute to the purchaser or purchasers of the said premises, a good and sufbcient deed or deeds of conveyance for the same, and out of the proceeds of such sale pay to the solicitor of the appeliaUf} the appellant’s costs in the Court of Chancery to be taxed, and also the balance so reported to be due to him, up> *323on the aforesaid bond and judgment, with interest from the date of the report, taking receipts for such payments, and filing the same, with the report of such sale; and that he bring the residue of the proceeds, if any there be, into the said Court of Chancery, to be applied under the order of the said Court, towards the payment of any balance, to be ascertained as the said court shall direct, that may be found due to the respondent, Davenport Morey, from the said James O. Wattles ; and that the Master make report of his proceedings in the premises, with all convenient speed.
And it is further ordered, adjudged and decreed, that the said Caleb Johnson and Davenport Morey, on the request of the complainant .or his solicitor, or of the purchaser or purchasers of the said mortgaged premises, deliver over all deeds, demises or writings, whatever, relating to or concerning the said mortgaged premises.
-y0 ¿ei¡ver title deeds, &c.
And it is further ordered, adjudged and decreed, that the said Davenport Morey, and all persons claiming under him, or who have come into the possession of the mortgaged premises, pendente lite, deliver and yield up the possession thereof to the complainants, or to whomsoever shall become the purchaser or purchasers thereof at said sale, on his, her or their producing to the said Davenport Morey, or to the person or persons in the possession of the said mortgaged premises, the deed executed by the Master pursuant to such sale as aforesaid, or that, in default thereof, a writ or writs of execution issue, for the purpose of putting such purchaser or purchasers into such full and peaceable possession.
To deliver purchaser. t0
And it is further ordered, adjudged and decreed, that the record and proceedings be remitted to the Court of Chancery, that this decree may be fully executed.