Aiken v. Gale

Eastman, ,J.

The cases are numerous which hold that payment of a debt secured by a mortgage may operate either as a discharge of the mortgage or an assignment, as *505 may best subserve tbe purposes of justice. Robinson v. Leavitt, 7 N. H. 100 ; Bell v. Woodward, 34 N. H. 90; Wilson v. Kimball, 27 N. H. (7 Foster) 300 ; Bailey v. Willard, 8 N. H. 429; Barker v. Parker, 4 Pick. 505; Thompson v. Chandler, 7 Greenl. 377; Hatch v. Kimball, 7 Shep. 9.

If tbe payment be made by a third person, who has an interest to protect, it may operate as an assignment, even if the mortgage be formally discharged. Rigney v. Lovejoy, 13 N. H. 252; Robinson v. Leavitt, 7 N. H. 99, 101.

And one who has paid money due upon a mortgage of land, to which he had a title which might have been defeated thereby, has a right to hold the land as if the mortgage subsisted, until he shall have received the money due on it from some one who is entitled to redeem. Towle v. Hoit, 14 N. H. 61; Pratt v. Law, 9 Cranch 498 ; James v. Morey, 2 Cowen 246; Starr v. Ellis, 6 Johns. Ch. 395 ; Lockwood v. Sturtevant, 6 Conn. 374 .

In equity, the party entitled to an assignment of a mortgage may be regarded as subrogated to the rights of the mortgagee without an assignment. Jenness v. Robinson, 10 N. H. 219 ; Downer v. Fox, 5 Wash. 393 ; Parkman v. Welsh, 19 Pick. 238 . And in Furbush v. Goodwin, 25 N. H. (5 Foster) 425, it was held that nothing more is necessary to discharge the interest of a mortgagee, and re-vest the estate fully in the mortgager, than the payment of the debt, or the performance of the duty, the payment or performance of which the mortgage was intended to secure.

In Taylor v. Bassett, 3 N. H. 294, where two were severally seized of distinct parcels of a tract of land, which had been previously mortgaged to a third person, and one of them had paid the debt and taken an assignment of the moi’tgage, it was held that he might consider the mortgage as discharged, and bring an action for contribution, or consider it as subsisting, and hold the land till the other paid a reasonable contribution. ■ The principle of that case is recognized in Robinson v. Leavitt, 7 N. H. 109; *506 Taylor v. Porter, 7 Mass. 355 ; Allen v. Clark, 17 Pick. 47 ; Salem v. Edgerly, 33 N. H. 46; Jenness v. Robinson, 10 N. H. 219, and other cases that might be cited.

In Gibson v. Orehore, 5 Pick. 152 , it is said that if several estates are mortgaged by one mortgage, and the mortgager afterwards conveys the estates separately to different persons, although each owner of the separate estates may redeem, yet it can only be allowed upon the payment of the whole mortgage debt. And tbe party so redeeming will be entitled to hold the whole estate mortgaged until he shall be reimbursed what he has thus been compelled to pay beyond his due proportion. Hubbard v. Ascutney Mill Dam Co., 20 Vermont 402.

Where the equities of the pazties are equal, the owners of several parts of mortgaged property are bound to contribute izi proportion to the relative value of their parts ; and neither of such pallies can, by obtaining an assignment of the mortgage, compel the other to pay more than his ratable proportion of the debt. Salem v. Edgerly, 33 N. H. 46 ; Allen v. Clark, 17 Pick. 47 ; Stevens v. Cooper, 1 Johns. Ch. 425 ; Doe v. Thompson, 22 N. H. (2 Foster) 218; Parkman v. Welch, 19 Pick. 238 .

Upon these principles, which we regaz’d as well established by the authorities, it is manifest' that the demand-ant is entitled to a conditional judgment upon the mortgage. The legal title is in him, and the action may. be maintained in his name for the benefit of Webber. The payment of the money to the mortgagee by Webber did not necessarily operate as a discharge of the mortgage, and the demandant has the right, for Webber, to hold both lots until the tenant, or those whose interests he represents, shall pay what in equity he ought.

The only question about which we have had any sezious doubt in the case, is, as to the sum for which the conditional judgment should be entered up; whether for the full amount of the debt secured by the mortgage, or for *507 such sum only as upon an examination in equity it should be found the tenant ought to pay.

And this leads, in the first place, to the inquiry how far, under the statute, the court may go into the equities between the parties to a mortgage, or those holding their rights, in making up a conditional judgment upon a writ of entry on such mortgage.

By the practice in this State, in actions brought by a mortgagee to recover possession of the mortgaged premises, the mortgagee has his election to count generally upon his own seizin in his demesne as of fee, without any mention of the mortgage, either before or after condition broken; and if the tenant suffers default or pleads such plea as does not bring the mortgage to the notice of the court, so that a conditional judgment may be taken, the usual common law judgment is entered, and the tenant, if there is any disagreement relative to a redemption, or as to the amount due, will have to resort to his petition to the court or to his bill in equity. But if the mortgagee commences his action, counting upon the mortgage deed with a proferí, or upon a seizin in fee and in mortgage, there can be no judgment entered for the demandant but the conditional one prescribed by the statute. McDaniel v. Cater, 21 N. H. (1 Foster) 229; Briggs v. Sholes, 14 N. H. 266.

The general issue to a special count upon a seizin in fee and in mortgage puts in issue only the title of the plaintiff under the mortgage; and if the mortgage is not properly and legally executed, or if it has been fully paid, so as to have no longer any legal effect, the issue will be made out for the defendant. The performance of the condition makes void the mortgage. Batchelder v. Taylor , 11 N. H. 129, 131; Rev. Stat., chap. 131, sec. 4; Swett v. Horn & als., 1 N. H. 332.

But if the mortgage is duly executed, and any sum is shown to be due, the plaintiff will be entitled to his con *508 ditional judgment. ' The amount for which this judgment is to be entered cannot be determined upon the general issue; and the finding of the jury upon that plea, of the sum due upon the mortgage, is not evidence upon the hearing to establish the amount for which the judgment is to be entered. Batchelder v. Taylor , 11 N. H. 129.

If the issue is found for the plaintiff, or if the defendant suffers default without plea, or confesses the cause of action, the court decide what sum is due, upon independent evidence laid before them.

In an action founded, upon an alleged seizin in fee generally, if the tenant confesses the demandant’s seizin in' fee and in mortgage, and denies any seizin except in mortgage, or if he pleads that the plaintiff is seized in mortgage and not otherwise, and judgment is entered on such confession, or the issue is found for the tenant on such plea, none but a conditional judgment can be entered. McDaniel v. Cater, 21 N. H. (1 Foster) 229; Bickford v. Daniels, 2 N. H. 71. And where the count is in that form, the tenant, after default or verdict, may plead in bar, or file a suggestion, against any other judgment than one of mortgage, averring that the title of the demandant is only by mortgage. This the demandant may admit by demurrer, or deny by taking issue on the facts averred; and in the latter case the issue can be tried by jury, and the question settled by common law principles. If the fact should be found for the tenant, a conditional judgment would then be made up by the court upon other evidence; but if the finding should be against the allegation that the action is upon a mortgage, the plaintiff would be entitled to have the plea set aside. Briggs v. Sholes, 14 N. H. 266, 267 ; Bickford v. Daniels, 2 N. H. 71. And this suggestion may also be filed in any stage of the proceedings, whether before or after verdict. Briggs v. Sholes, 14 N. H. 262.

In theory, the court assess the damages and settle the amount for which the conditional judgment is taken, but *509 in practice, in all ordinary eases, where nothing is to be done but simply to ascertain the amount due upon the notes secured by the mortgage, the computation is made by the demandant’s attorney. In cases of doubt, however, and requiring an examination of evidence independent of what appears upon the notes themselves, the court investigate the matter and settle the amount foi[ which the judgment shall be taken.

But can the court, under the statute, go into all the equities between the parties, and determine, in this form of action, the amount which the tenant should in equity pay in order to hold the land ?

The provision of the statute is as follows : “ In actions on mortgages the judgment shall be conditional, that if the mortgager, or person having his right, shall pay to the mortgagee, or person having his right, the sum the court shall adjudge due, within two months after judgment rendered, with interest, such judgment shall be void, otherwise a writ of possession shall issue.”

The proceeding by which the amount is determined for which judgment is to be entered, has usually been termed a “hearing in chancery.” Thus in Batchelder v. Taylor, 11 N. H. 129, Parker , C. J., in speaking of the finding of the jury upon the general issue, says that it “cannot be received in evidence on the hearing in chancery.” And so is the marginal note to the ease. In Bickford v. Daniels, 2 N. H. 72, Woodbury, J., says, “ and concerning mortgages, our power as a court of equity does not begin until the conveyance in question is first ascertained to be a mortgage.” And by the statute then in force the court were empowered to “ chancer the forfeiture.” 1 N. H. Laws 68. In the change of phraseology that has been adopted in the statutes giving power to the court to determine the amount for which the conditional judgment shall be entered, it has not been understood that there has been any material change in the law.

*510 In Briggs & al. v. Sholes, 14 N. H. 262, it was held that, in a writ of entry on a mortgage, the defendent has the right to have the triple deduction allowed hy the statute for usury to he made from the whole sum due, and that the conditional judgment should he made up for the balance only.

In Stewart v. Clark, 11 Met. 389 , which was a writ of entry to foreclose a mortgage, Shaw, C. J., says, that the provision of the statute will authorize the court to enter any decree which may be made in an equity suit, in order to accomplish the purposes of the mortgage, and to issue any process to carry such decree into effect.

The Massachusetts statute is more specific in its provisions than ours, and may perhaps give larger powers. In the ease cited, an auditor was appointed “ to assess damages for a conditional judgment.”

Cross actions are always to be avoided when, by the principles of law, they may be; and although we think that, where the matters between the parties interested in a mortgage are complicated, the better practice is for a bill in equity to be brought to foreclose the mortgage, instead of a writ of entry for possession, and that there may be eases where the court would not investigate the matters in making up a conditional judgment, but turn the party round to a bill in equity, still, that the statute is comprehensive in its meaning and intention, sufficiently so to cover the present ease; and that the equities between the parties may be examined in determining the sum for which the judgment shall be rendered.

But what ought that sum to be ? The case finds that the lots are of equal value, and if the parties are in equali jure, then each should contribute an equal proportion towards the extinguishment of the debt. Stevens v. Cooper, 1 Johns. 425 ; Salem v. Edgerly, 33 N. H. 46; Herbert’s Case, 3 Co. 14; Harris v. Ingleden, 3 P. Wms. 98, 99.

Both parties hold under quitclaim deeds from Gooden. *511 They have like titles from the same grantor, and would seem to be in the same position, unless there is something growing out of the bond or agreement, given by Gooden to "Webber, to save him harmless from the mortgage on lot No. 528, which should alter that position.

There is no suggestion in the case that Ayer had any actual knowledge or notice of that instrument, and nothing is disclosed that should put him on inquiry. The bond was not a matter for record. The existence of the mortgage was known, and Gooden conveyed to both "Webber and Ayer by quitclaim deeds only. Had the deed to "Webber been a warrantee with full covenants, or had it contained a covenant embracing the condition in the bond, it would become a question for examination, whether, upon such a state of facts, Ayer or the tenant, standing in the position of their grantor, could successfully defend lot 529 against the payment of the whole mortgage debt. Cushing v. Ayer, 23 Maine 383 ; Champion v. Brown, 6 Johns. Ch. 402 .

Such, however, are not the facts. All that was given by Gooden to "Webber, to save him from the effect of the mortgage, was the agreement, which was nothing but a personal undertaking by Gooden, and could not in any way affect the title to the land. It was no part of the title, was not incorporated in the deed, and was no incumbrance upon the land ; but was simply a personal obligation, to which "Webber could resort in case of a breach of the condition, and to which he may now resort, if he sees fit. The solvency of Gooden was a matter to which he should have looked when he took the bond.

So far, then, as this case shows, the parties are in equali jure, and the lots of land, being of equal value, they must contribute equally to the extinguishment of the mortgage debt.

The demandant must, therefore, have a conditional judgment for one half the amount due upon the mortgage.