Coles v. . Appleby

Miller, J. Two principal questions arise in this case. First. Whether the bond and mortgage described in the complaint and sought to be foreclosed were paid and satisfied before the assignment to the plaintiff. Second. As to the provision in the judgment in reference to the order of sale made by the court. The first question is raised by exceptions taken *118 by the counsel for the appellant to several of the findings of fact made upon this trial. Among other things, the judge found that Joseph Coles, to whom the mortgage was originally given by Benham, about the first of November, 1873, for the consideration therein mentioned, assigned the bond and mortgage to the plaintiff; that it was delivered to him and he has since been, and still is, the owner thereof. The error alleged is a want of consideration paid by the plaintiff for the assignment. The evidence upon the trial established that Mr. Beach, who at the time was the attorney for the plaintiff, requested him to bring to his office a bond and mortgage for $600 which the plaintiff held against one Betts, and which Betts wished to pay. The plaintiff brought the Betts bond and mortgage with a satisfaction-piece and delivered the same to Beach. The Betts bond and mortgage was satisfied, and the bond and mortgage now in question delivered to the plaintiff by Beach in place thereof. W e think that the plaintiff, by the surrender of the old bond and mortgage, parted with a full value, taking in lieu thereof an assignment of the bond and mortgage which is the subject of foreclosure in this action,- and this was a sufficient consideration for the assignment to him. In reference to the question of payment the judge found that Joseph Coles and Beach had an accounting and a settlement, in which was included as a part payment the amount' due on the $600 mortgage; but that it was not the intention of ' the parties that said bond and mortgage were to be thereby satisfied and paid. An exception was taken to the latter part of the finding. The same question is presented by an exception taken to the refusal of the court to find that the mortgage had been paid and satisfied in full to Joseph Coles by Beach. The point to be determined is whether the finding of the court as a conclusion of law that the mortgage was not paid was justified. The testimony showed that Beach had said that he would pay the bond and mortgage, and that he afterward certified, upon making a loan of Appleby, that the property was free of all1 liens and incumbrances, except one which was specially named. *119 Joseph Coles swears that the first he ever heard that it was claimed he had assigned it was after Beach’s death ; that he has no recollection of making the assignment, and that Coles, the plaintiff, never paid any thing for the assignment to him. In opposition to this it appears that no satisfaction-piece of the bond and mortgage was delivered at the time of the settlement, on the third of July, 1873, and that Beach merely paid the amount due to Joseph Coles. Coles does not remember whether he at the, time delivered the bond and mortgage to Beach, and states he might not have delivered it until November, 1873, when he made the assignment. It is proved that Beach, after the settlement, directed an assignment to be prepared, and this was executed and delivered with the bond and mortgage on the third of November, 1873, to the plaintiff’s wife, and she was informed that they were in place of the" Betts bond and mortgage. Beach was the owner of the premises, and paid the interest on the mortgage until May, 1877. Subsequently, in a schedule of this property, he directed his clerk to state, in connection with a statement as to the mortgaged premises, that it was subject to a mortgage of §600. Even if it be assumed that there was more testimony to show that the conduct of Beach was inconsistent with the assignment of the bond and mortgage, yet, with the assignment executed by the mortgagee, his want of recollection and other evidence, there is strong- testimony to establish that it was intended to keep the mortgage alive as an existing and a valid security. In Champney v. Coope (32 N. Y. 543), the question as to what constituted the payment of a mortgage is discussed, and it is laid down in the opinion of the court that when the amount due is paid, the intent of the parties in making such payment, whether to extinguish or keep alive the security, will govern. (See, also, Harbeck v. Vanderbilt, 20 N. Y. 395 ; Kellogg v. Ames, 41 id. 263.) Having this principle in view as the weight of evidence stood, the court were fully justified in the finding made and the refusal to find as severally excepted to, as well as in the legal conclusion arrived at,’ that *120 the bond and mortgage was not satisfied, and was a valid and existing lien on the premises described therein. It is said that Beach was agent of Benham and received the money to pay the $600 mortgage. This is undoubtedly the case; but he was equally the agent of Joseph Coles and of the plaintiff, and as his obligation to all of them was the same, and the plaintiff advanced his money gipon the security of the bond and mortgage, and it was duly assigned to him by a proper instrument and] for a valuable consideration, if [iffwas' intended that the mortgage should not be paid but kept alive, no reason exists why the plaintiff should be deprived of the right to the mortgage by virtue of the assignment to him. He received it in good faith, and unless the bond and mortgage was actually paid, is entitled to collect the amount secured thereby out of the mortgaged premises. Under the circumstances the appellant is less entitled to the protection of a court of equity, because at the time he made the loan an examination of the records would have disclosed that the plaintiff’s mortgage stood unsatisfied. No such examination was made, and hence it was his own laches which has placed him in the position he now occupies. It may also be remarked that Beach was acting for himself at the time in purchasing the premises, and it cannot, therefore, be assumed that at the same time he was attorney for Joseph Coles alone. The right of the plaintiff to enforce the bond and mortgage does not rest upon a parol agreement to restore the mortgage, but upon the intention at the time to preserve it as a lien shown by the assignment itself and the circumstances attending the transaction. If there was no intention, as the court have found, to pay and satisfy the bond and mortgage, then the plaintiff was the owner thereof and more than an equitable assignee of the same. He had paid a consideration and the assignment vested the title in him without any limit or restriction whatever. Even if the equities were equal, the plaintiff had a written assignment of the bond and mortgage which made him the lawful owner thereof. The rule that the assignee of a mortgage takes it subject to all the latent equities can have no application to this case, and cannot *121 be invoked for the benefit of the appellant, as his rights were acquired sometime after the assignment to the plaintiff. And although the purchaser must abide the case of the person of whom he buys, yet if there was, as we have seen, an intention to assign, the title of the assignee became perfect and complete. In regard to the order of sale directed by the court, , it is of no importance to the plaintiff which of the two lots covered by the mortgage is first sold, as both are liable for the demand by virtue of the same. As to Benham, both must be sold before any claim can be made against him upon the bond for a deficiency ; but if the premises conveyed by him to Baldwin are first sold, he may be liable on the covenants in the deed to Baldwin. Benham does not ask for any such relief in his answer, and Appleby asks that the premises conveyed to Baldwin be first sold, and neither Baldwin nor Mrs. Weeks, his grantee, are parties to the action. In regard to Beach, Apple-by’s grantor, and Benham, Baldwin’s grantor, Beach having retained the purchase-price of the premises bought by him of Benham and sufficient money to pay the mortgage, and having undertaken to pay it, he would be estopped from claiming that the portion of the premises not conveyed to him should be first sold, or that the bond and mortgage in suit had not been paid, and if the controversy was between them the provision in the judgment as to the order of sale would be correct. Each of the grantees respectively occupies the same position as his grantor and stands in his place. Such being the case the provision in the judgment as to the order of sale was manifestly right. The deed to Baldwin and to Beach bear date and were executed evidently at the same time, and the fact that the deed from Benham to Beach was recorded before the deed to Baldwin does hot, we think, change the relations or obligations of the parties under all the circumstances presented, and the recording act can have no application. The rule as to the order of sale is an equitable one, and governed entirely by equitable principles, and no valid reason appears which sanctions a change in this respect. The question put to the witness, Joseph Coles, as to the pre *122 eise time when he received the mortgage was- competent as a cross-examination, the witness having testified upon that subject upon his direct examination. There was, we think, no objection to the introduction as evidence of the Betts bond and mortgage.to William Coles for $600, and of the satisfaction-piece thereof, and of the other testimony in connection therewith tending to show that the plaintiff had parted with value for the bond and mortgage in controversy and that it was a substitute for the Betts bond and mortgage. The testimony showing Beach’s acts was also competent upon the question as to his intention. There was no error in the refusal of the court 'to find that Beach died seized of the premises, or to its finding that his children took no estate and were not necessary parties, and as to the costs of their guardian ad litem, that question is not now properly presented. The judgment should be affirmed. All concur. Judgment affirmed.