Hall v. Way

Carpenter, J.

The defendant purchased a piece of property of one Camp, subject to a mortgage to the plaintiff, assumed the mortgage debt, and promised Camp that he would pay the same. Before the commencement of this suit Camp assigned his claim growing out of this promise to the plaintiff. This suit is brought to recover the amount of the mortgage debt of the defendant.

The defense is that Camp received in exchange for the property certain real estate in Bloomfield, subject to a mortgage to the Society for Savings for $1,400, which mortgage Camp assumed and promised to pay; but has not paid the same except as it was paid by a foreclosure of the premises. Camp mortgaged the property received by him to the defendant, subject to the mortgage to the savings bank, to secure the sum of $1,700, which mortgage the defendant subsequently foreclosed. After that the savings bank foreclosed its mortgage, Camp failing to redeem.. The defendant did not redeem within the time limited, but afterwards, pursuant to an agreement previously made with the savings bank, paid the amount due to the bank, including interest and cost, and took a deed of the property to himself. The properly was worth $3,500—more than the amount of both mortgages upon it. In this state of things the defendant insists that he has a right to set off against the plaintiff’s demand the claim held by the savings bank—$1,400.

*472 The Superior Court refused to allow the set-off and rendered judgment for the plaintiff for the full amount of his el aim. A motion in error brings the record before this court for a revision of that question.

The argument of the learned counsel for the defense is, that the note to the Society for Savings being due it was payable immediately, and . Camp failing to pay, the defendant had an immediate right of action against Camp, and might recover the full amount of the savings bank note without paying it himself; and that this right of action remains to him notwithstanding the foreclosure proceedings; and therefore that he has a right to set off the amount of that note in this suit.

Possibly the defendant’s right of action remains to him, as claimed, but the weak point in the argument is in assuming that the rule of damages remains the same. Let us illustrate by supposing that the defendant had brought a suit immediately after the transaction and recovered and collected of Camp the full amount of the indebtedness to the savings bank. What would have been the consequence? Camp would have made good his promise; the defendant would have been in funds with which to pay the debt to the savings bank, and it would have been clearly his duty to pay it. Camp having paid for the property would have had a right to a clean title, and the defendant might have been compelled not only to pay the savings bank, but also to procure a discharge of the mortgage to Camp. The result would have been the same as it would have been if Camp had paid the money directly to the savings bank. The transaction would have ended substantially as the parties contemplated that it should—Camp paying the debt and having the property, and the defendant being fully indemnified.

Contrast this with what actually occurred. Camp did not pay the debt in cash, either to the savings bank or to the 'defendant. The defendant paid the money to the savings bank and was entitled to indemnity. If Camp had repaid him in money it seems very clear that no set-off could be allowed. But the security which the savings bank held, and *473 wlrich was more than sufficient to pay the debt, in consideration of such payment by the defendant, has been transferred to him and he now owns it free from any incumbrance. In that he has received full indemnity. If the parties remain in that situation the defendant loses nothing, leaving his obligation to pay the plaintiff’s demand in full force. He has paid his money it is true, but he has received a full equivalent. Camp in effect paid the debt.

The defendant now seeks to pay his own debt to Camp, (assigned to the plaintiff,) with a claim which he once had against Camp, but which now, in legal contemplation, has been satisfied. If therefore any right of action remains to the defendant, which is very doubtful, it is a bare technical right, without any claim to more than nominal damages. There is therefore, as the counsel for the plaintiff well observes, nothing to set off.

There is a little complication growing out of the form of the transaction. The decree of foreclosure was permitted to take effect, whereby the title became absolute in the savings bank. The defendant then formally purchased of the savings bank by paying the debt and cost, which amounted to less than half of the value of the property. But this was done in pursuance of an agreement previously made. The substance of the transaction was a redemption by the defendant. The form in which it was done is immaterial. The defendant and the savings bank could not by agreeing between themselves to change the form of doing the thing, place it in the power of the defendant to collect, unjustly, the amount of the debt of Camp or Hall.

There is no error in the judgment.

In this opinion the other judges concurred.