Barnes v. Upham

Beach, J. The second special defense to the first count is based on the theory that the defendant, after *494 having parted with the equity of redemption, was entitled to notice of the pendency of the proceedings for the foreclosure of the first mortgage, and that it was the duty of the second mortgagee, if she elected not to redeem, to give such notice in case she desired to hold the defendant on the note. Neither of these propositions is sound. In the first place, the defendant, by a conveyance of the equity, had parted with his entire interest in the premises. As the record title stood he had no interest in the premises sufficient to give him a standing in the foreclosure proceedings, and therefore was not in law entitled to notice. Nor was the second mortgagee under any equitable obligation to give the defendant notice. The case is not analogous to that of a pledgee who allows the pledge to be taken out of his hands on the demand of a stranger without notifying the pledgor to give him an opportunity to defend. Independently of the fact that the plaintiff never had physical custody of the premises, the security which she held had been already, by the defendant’s own act, subjected to be taken on foreclosure before the second mortgage was executed. Consequently both the parties to the second mortgage knew that the first mortgage was liable to be foreclosed, and that the security of the second mortgage was liable to be extinguished by such foreclosure. Admittedly, it was not the duty of the plaintiff to protect the defendant against the extinguishment of the security of the second mortgage note. Defendant knew all the facts, and the plaintiff was legally and equitably entitled to assume that if he chose to part with the equity and with his right to notice of foreclosure proceedings, he would protect his own interests in his own way. The answer does not expressly allege whether the defendant has or has not done so by requiring the grantee of the equity to assume and agree to pay the second mort *495 gage note. But the material consideration is that he had full knowledge of the risk which he ran when he parted with the equity in the premises. Presumably he received a satisfactory consideration for assuming that risk. At any rate, he was not dependent upon, and therefore was not entitled to, any assistance from the second mortgagee in looking after his own interests. The second special defense to the third and fourth counts stands on the claim that as a condition of recovery on the mortgage notes, the plaintiff must tender or offer an assignment of the mortgage security. That is not our law. The mortgagee has always been permitted to bring foreclosure, ejectment, or an action on the note. 2 Swift’s Digest, 167. He is not bound to tender or offer a release of the mortgage until the debt is satisfied. Resort to a court of equity in order to compel a release is no longer necessary, for by § 5105 of the General Statutes the execution and delivery of a release of the mortgage, after written request and satisfaction thereof, is required under a penalty for failure to do so. Turning now to the plaintiff’s appeal from the judgment for defendant on the cause of action stated in the second count, the finding of facts is that the note for $1,900, described in the second count, was assigned by the plaintiff to a third party to secure an indebtedness of $500, that the plaintiff has not paid the $500 for which the note was pledged as collateral security, and that the note was not in the possession of the plaintiff at the time of the trial, but is now “in the hands of some other person, and was produced upon notice by her to counsel of defendant, having passed by indorsement through the hands of several parties, and neither the Waterbury Coal & Lumber Company [the original pledgee] nor the true holder of the note is a party to the case.” The finding that the plaintiff was *496 not the “true holder” of this note, justifies and requires the conclusion that the plaintiff had not sustained the burden of proving her ownership. There is no error. In this opinion Prentice, C. J., Roraback and Wheeler, Js., concurred.