Cornell v. Prescott

Harris, J. I think the defendant Prescott has not succeeded in showing that the plaintiff, in the first suit, is a mere nominal party, holding the assignment of the James mortgage for the benefit of Latham Cornell. But in the view I have taken of the case it is of no importance whether William W. Cornell or Latham Cornell is to be regarded as the party beneficially interested in the mortgage. When Prescott and Cornell purchased the mortgaged premises of Lansing, and assumed the payment of the mortgage as a part of the purchase money, they became, in equity, the principal debtors ; and although Lansing still remained liable for the payment of his bond, he was so liable ouly as the surety of Prescott and Cornell. After Cornell had paid his share of the mortgage, although the whole of the premises remained liable to be sold for the payment of the mortgage, yet a court of equity would direct Prescott’s share of the property to be first applied to the satisfaction of the mortgage. The lien of the mortgage upon Cornell’s share of the property would be regarded as in the nature of a security for Prescott’s debt. According to the principle laid dojvn by the [19] chancellor in Marsh v. Pike, (10 Paige, 597,) L. Cornell, the moment he had paid his share of the James mortgage, would have had the right, without paying Prescott’s share of the mortgage, to apply to a court of equity to compel Prescott to pay off his share of the mortgage, so that its lien upon the whole property might be discharged and he be protected against the bond of indemnity they had executed to Lansing. But if L. Cornell could thus compel Prescott to discharge his share of the mortgage, I can see no reason why he would not be entitled, upon the same principle, on paying the bond and mortgage, to be substituted in the place of the mortgagee. Assuming that Latham Cornell, and not William W. Cornell, was the real owner of the James mortgage after it was assigned, I know of no rule which would require this court to hold such an assignment to be an extinguishment of the mortgage as between Prescott and Latham Cornell. But whatever right Prescott might have bad, to set up such a defence while L. Cornell remained a joint owner of the mortgaged premises with him, he certainly could have no such right after he had become the purchaser of L. Cornell’s interest and had assumed the payment of the very mortgage, which he now claims was then held by Cornell, as a part of the purchase money. Having in March, 1841, purchased of L. Cornell his share of the property, and, instead of paying the purchase money or executing a new security upon the property, having agreed to pay the mortgage which he now pretends was then owned by L. Cornell, he is, I think, equitably estopped from setting up, as a defence against the mortgage, the payment by L. Cornell while he remained a joint owner of the property. In any view I have been able to take of the case, the mortgage sought to be foreclosed in the first suit is to be regarded as a valid subsisting lien upon the mortgaged premises, and the plaintiff is entitled to a decree to enforce it. In respect to the mortgage in the second suit, I can see no ground upon which Prescott can rest the defence he has set up. When Cornell became the owner of that mortgage, Prescott had become the owner of the whole of the mortgaged premises, [20] and was bound not only to pay the mortgage but to indemnify every other person liable for its payment, against such liability. Why, then, might not Cornell, as well as any other person, become the owner of that mortgage, and as such enforce its payment against the party and the property primarily and equitably liable for its payment ? If, as was held by the chancellor in the case of Marsh v. Pike, Lansing, the mortgagor, might, himself, have paid this bond and mortgage, and have been substituted in the place of the mortgagee, not only as to the remedy against those who had agreed to indemnify him, but also against the mortgaged premises, there certainly can be no good reason why Cornell should not be permitted to do the same thing. The same principle would apply to each case. Both being liable for the payment of the debt, and Prescott being liable to indemnify each against his liability, either would have the right, for the purpose of relieving himself from his responsibility for the payment of the debt, to file his bill to compel Prescott to pay off the mortgage to the holder, or to pay the mortgage himself and become its owner, and then as in this case file his bill of foreclosure. The decree of the vice chancellor in each case must be affirmed, with costs.