Whitney v. M'Kinney

The Chancellor.

I do not apprehend it to be necessary, in all cases of a bill to foreclose by the assignee of a mortgage, that the mortgagee should be a party defendant. In Hobart v. Abbott, (2 JP. Wms. 642.) and in Johnson *147 v. Hart, ( 3 Johns. Cas. 322 .) the mortgagee assigned his mortgage not absolutely, as in this case, but by way of mortgage, and he had, of course, a right to redeem, as against his own assignee. The mortgagee was, therefore, held, in those cases, to be a necessary party. But where the assignment is absolute, and the mortgagee parts with all his interest in the mortgage, and there is nothing special and peculiar in the case, the assignee is under no necessity to make the mortgagee a party to a bill to foreclose. The general principle, as declared in Fenton v. Hughes, (7 Ves. 287.) is, that a person, who has no interest in the suit, and is a mere witness, against whom there could be no relief, ought not to be party.. In Williams v. Sorrell, (4 Ves. 389.) which was a bill by an assignee to foreclose, the mortgagee does not appear to have been a party, though there had been payments made to the mortgagee before the assignment. So, in the analogous case of a mortgage assigned, and a bill by the mortgagor to redeem, he need not bring the original mortgagee before the Court, for the assignee, as standing in his place, will be decreed to convey. (Hill v. Adams, 2 Atk. 39. Lord Eldon, in 9 Ves. 269. S. P.) So, also,in Whitworth v. Davis, (1 Ves. & Bea. 545.) it was held, that a bankrupt, who had assigned all his legal and equitable interest, was not a necessary party to a bill against his assignees.

But the present case has been supposed to disclose special circumstances, rendering it proper that Crocker, the mortgagee, should be made a party defendant; and it becomes necessary to examine these circumstances, in order to ascertain their import and effect.

The bill states, that C., the mortgagee, took possession of the mortgaged premises, or the principal part of them, and enjoyed the rents and profits until the assignment to the plaintiff, and which assignment purports to be a full and absolute assignment of all his right and interest as a *148 mortgagee. This fact does not require him to be a party. The defendant will have a right, no doubt, as against the plaintiff, to have an account of these rents and profits. But what interest has C. in the taking of that account, more than the mortgagee had in respect to the previous payments in the case of Williams v. Sorrell? The taking the account is only to ascertain the credit due on the mortgage, and will only be material as between the parties to this suit, and will not conclude C. one way or the other. Whatever the net value of those rents and profits may be, that value will go to the crédit of the defendant on his mortgage, and no relief can be granted on this bill, as against C., in respect to the rents and profits, be they more or less. It will be a question merely between the parties to this suit, as to the extent of the credit to which the defendant may be entitled upon the mortgager ' This fact, therefore, does not require that the mortgagee should be made a party.

It also appears by the bill, that the mortgagee claimed, under a parol agreement, concurrent, in point of time, with a certain stipulation indorsed upon the mortgage, the absolute right and title to the land in law and equity, and that the defendant held the equity of redemption as a naked trustee for him. But1, from the bill itself, I should conclude that the defendant was entitled to the right of redemption, notwithstanding any such parol agreement; and that the assignment of the bond and mortgage to the plaintiff, and the delivery of the possession under it, stopped the mortgagee from setting up any such parol agreement, in contradiction to his own assignment, giving to the plaintiff the right to deal with the mortgage as a valid and subsisting incumbrance. Assuming the equity of redemption still to reside in the defendant, (and this is the conclusion arising upon the facts in the bill,) the surplus moneys, if any, after satisfying the mortgage. Would go to the defendant, and not to Croclcer, the mort *149 gagee. If we are to take the charges in the bill to be true, in judging upon the demurrer, C. has no interest in • • this suit, for it seeks only payment of the mortgage debt, or a foreclosure of the defendant’s equity of redemption. The decree would only affect that equity, and would leave the rights and claims of the plaintiff and C., as between each other, unaffected, as being matter foreign to the suit.

It might, perhaps, be convenient to the plaintiff to have brought C. into Court, so as to have a decision in this cause, not only of his claims against the defendant upon the mortgage, but also of the assumed rights and pretences of C., under the parol agreement. But this would be confounding different causes of action in one suit, and it does not rest with the defendant to raise this objection of want of parties; for, as the mere owner of the equity of redemption, he has no interest in the question, or in any future litigation, to arise between C. and the plaintiff. It would be as to him res inter alios acta.

I shall, consequently, overrule the demurrer, and order the defendant to put in a good and sufficient answer in six weeks; and that the question of the costs of the plaintifi, upon this demurrer, be reserved to the final hearing.

Demurrer overruled.