Allen v. Allen

Dodd, V. C.

The complainants ask that Joseph W. Allen, the obligor and mortgagor, and William Gibby, Joseph E. Allen and others, who, as grantees of the mortgaged premises, assumed with their *495 grantors to pay and discharge the mortgage, may be decreed to pay the deficiency, if any, of the mortgage debt, after applying thereto the proceeds of the foreclosure sale. That the obligor, Joseph W. Allen, is not liable to such a decree, was, settled by •this court in Newark Savings Institution v. Forman, 6 Stew. Eq. 436. It was there held that the act of March 12th, 1880 (P. L. of 1880 p. 265), was not unconstitutional, though it deprived the complainant of the right to a personal decree against the obligor, for the reason that while the remedy previously existing in equity was taken away by the act, there remained the remedy of an action at law on the bond.

Against the defendants in this case, who are sought to be personally charged for deficiency, on the ground that they assumed with their grantors to pay'the mortgage debt, and so became liable, in equity, to the holders 'of that debt, the above act has ■not been held to take away the right to a decree in equity, as in the ease of the Savings Institution v. Newark, it was held to do in respect to the obligor. The equitable obligation against the grantees who so assumed, the mortgage still remains, and may, I think, be enforced, but not in this suit to foreclose. The language of the act cannot be so construed as to prevent the holder of the mortgage from bringing a suit for that purpose, if a deficiency should be found to exist after foreclosure sale. The act •prohibits a decree for deficiency only “in all proceedings to foreclose.” To construe it as prohibiting the enforcement of an equitable obligation, ^enforceable nowhere else than in equity, would be to extend the act beyond its plain terms. The relief in equity is regulated, but not destroyed. The demurrer in the present case must, therefore, be sustained, and also, for the same reasons, the defence set up in the answer of the defendant William Gibby.

Assuming that the taxes referred to in the answer are liens upon the mortgaged premises (as they seem to be considered in the briefs), the question whether they are prior to the mortgage, and entitled to be first paid, is settled by the cases of Trustees &c. v. Trenton, 3 Stew. Eq. 667, and City of Paterson v. O’Neill, 5 Stew. Eq. 386. The charter of the city of Rahway (P. L. of *496 1865 p. 499), read in the light of the above cases, manifests a clear legislative intention to make taxes, assessed after the execution of a mortgage, a lien on the premises against which they are assessed, prior to the lien of the mortgage.

There should be a reference to a master, to ascertain the amount dire on the mortgage, and also the amounts due for taxes.