Eddy v. Smith

By the Court, Nelson, J. The deed from Shears to the plaintiff below conveyed to the plaintiff the premises conveyed by the mortgage, subject to that incumbrance and the lien of the judgment. These discharged, his title became perfect; but they must be first satisfied out of the land or otherwise. The defendant might have levied the amount of his judgment, •and afterwards foreclosed his mortgage, the purchaser under the judgment holding subject to that prior incumbrance. Instead of pursuing that course, he enforced the latter lien, and the purchaser took the title clear of the judgment, and now the assignees of the mortgagor supposes himself entitled to the surplus money. The equity of the case is palpable; the only question is as to the law. The above exposition shows that the action is well brought in the name of the plaintiff. At the time of the sale, and when the money was received by the defendant, all the interest in the laud, over and above satisfying the mortgage, (the judgment out of the case) was invested in him. It was, there [490] fore, his money raised out of his property. The right to the money jg not derived from any implied contract contained in the mortgage, which in this state is deemed a mere security f°r the debt, but upon the fact that he was lawfully possessed, of the title and ownership of the premises. The mortgage being but security for the debt, all over it belonged to the owner of the fund out of which it was raised. The case of Coates v. Stewart, 19 Johns. R. 298, is an authority on this point. There the plaintiff sustained the action on the ground that he was the assignee by operation of law, i. e., a pur-' chaser under a judgment execution. Here the plaintiff is an assignee, by the act of the party, by deed. In neither case was it an assignment of the surplus monies, because none existed till afterwards raised out of the estate which had passed by the assignment. The material question in the case is, whether the defence is good at law ? The principles of this action are liberal, beyond that of any other known to the practice of the courts. “It lies,” says Mr.. J. Blackstone, “ when one has received money belonging to another, without any valuable consideration given on the receiver’s part; for the law construes this to be money had and received for the use of the owner only, and implies that the person so receiving, promised and undertook to account for it to the true proprietor.” And it is applicable to almost every case where a person has received money, which, in equity and good conscience, he ought to refund. The action is equally beneficial to the defendant, because the defence to the claim, as well as the claim itself, is governed by the above principles. Lord Mansfield has said, in Moses v. Macferland, 2 Burr. 1010, “It is the most favorable way in which he can be sued; he can be liable no further than the money he has received; and against that may go into every equitable defence upon the general issue ; he may claim every equitable allowance, &c.; in short, he may defend himself by every thing, which shows that the plaintiff ex cequo et bono is not entitled to the whole of his demand, or any part of it.” These principles have, ever since their development, been recognized as sound, both in England and here, and are of [491] daily application. 2 Comyn on Contr. 1. 4 Johns. R. 249. l Wendell, 360. They are, in my judgment, conclusive in favor of the defence, and dispense with the trouble and expense of a resort to another forum. Judgment affirmed.