Foley v. Rose

An assignment, duly recorded, by the holder of a mortgage containing a power ol sale, and made to secure two notes for $1000 and $2000, of “the said mortgage deed, the real estate thereby conveyed, so far as the same is security for said note of $1000, thereby secured,” transfers the mortgage as security in the first place for the payment of the whole of the note of $1000, although the assignment contains no covenant of warranty.

Contract to recover $511.28. The case was submitted, to the Superior Court, and, after judgment for the plaintiff, to this court, on appeal, on agreed facts in substance as follows: On November 18, 1873, John Foley mortgaged a parcel of land to Benjamin B. Ware and John Q. A. Clifton, to secure the payment of two promissory notes, one for $1000, payable in three years, and the other for $2000, payable in five years. The mortgage deed contained a power of sale, and provided that “ out of the money arising from such sale, the grantees or their representatives shall be entitled to retain all sums then secured by this deed, whether then or thereafter payable,” rendering the surplus, if any, to the grantor. Ware and Clifton afterwards indorsed the note for $1000 to the plaintiff, and at the same time executed to him a deed of assignment, which was duly recorded on January 1, 1874, by which they assigned, transferred and set over to him and his assigns “the said mortgage deed, the real estate thereby conveyed, so far as the same is security for said note of one thousand dollars thereby secured.” On April 26, 1876, Ware and Clifton indorsed to the defend ant the note for $2000, and at the same time executed to him a deed of assignment of “ the said mortgage deed, the real estate thereby conveyed, and the note and claim for two thousand dollars thereby secured.” The defendant purchased this note and assignment for value, and in good faith. John Foley made default in the payment of interest due on both notes; and the plaintiff duly advertised the premises for sale by auction', on September 15, 1876, under the power of sale contained in the mortgage, and on that day sold the same to the defendant, then still the holder of the $2000 note, as the plaintiff had previously well known, for the sum of $2010, he being the highest bidder therefor, and a memorandum in writing of such purchase and sale was duly signed by the defendant, and the plaintiff executed to the defendant in due form a deed of the premises. The plaintiff also procured a conveyance to the defendant by John Foley, the mortgagor and owner of the equity of redemption at the time of the sale, to perfect the title of the defendant under the deed of the plaintiff, if from any cause defective, and the defendant paid to the plaintiff all that the plaintiff claimed of the net amount of the purchase money, except the sum of $511.28, in dispute. If, under the assignment to the plaintiff and the above facts, the plaintiff was entitled to have the whole of his note of $1000 and interest first paid in full, out of the mortgage security, or any fund that represents it, before the defendant, as the holder of the $2000 note was entitled to receive anything on account of his note, then judgment was to be rendered for the plaintiff for $511.28; otherwise, judgment was to be rendered for the defendant.