Loud v. Lane

Wilde, J. This is a writ of entry to recover possession of premises which the demandant claims under a mortgage from George Blanchard to the Hingham Institution for Savings, and by said corporation assigned to the demandant. The question is, whether, upon the facts reported, the mortgage was extinguished by the said assignment. And we are all of opinion that it was not. When the demandant took the assignment, he held the same premises by virtue of a subsequent mortgage to him from the said Blanchard; and he had the right to pay off the previous mortgage and to extinguish the same, or to take an assignment of it, and to keep up the incumbrance, for his own benefit, and to protect himself against intervening incumbrances. This right of election is well established by the authorities cited by the demandant’s counsel. Gibson v. Crehore, 3 Pick. 482. Barker v. Parker, 4 Pick. 505. James v. Morey, 2 Cow. 246, and 6 Johns. Ch. 417. Gardner v. Astor, 3 Johns. Ch. 55. The general rule is, that where the legal title by the mortgage becomes united with the equitable title, so that the owner has the whole title, the mortgage is merged and extinguished by [519] the unity of possession. But if the owner of the legal and equitable titles has an interest in keeping those titles distinct, he has a right so to keep them, and the mortgage will not be extinguished. This principle is decisive in favor of the demandant in the present case. The case of Wade v. Howard, 6 Pick. 492, cited by the tenants’ counsel, is not within the principles now laid down; for in that case the mortgage was not assigned, but was released and discharged. And it is very clear that a release of a mortgage will operate as an extinguishment of the mortgagee’s title. So a release of an equity of redemption does not operate by way of merger of the estate conveyed by the- mortgage, but as an extinguishment of the equity of redemption. Dexter v. Harris, 2 Mason, 531. We are therefore of opinion, upon the facts reported, that this action may be well maintained; the demandant having the legal title. But he will not be entitled to an unconditional judgment for possession. The tenants have a right, by virtue of their lease, to redeem the prior mortgage; (Bacon v. Bowdoin, 22 Pick. 401, and 2 Met. 591 ;) and they will be entitled to have a conditional judgment entered, in conformity to the Rev. Sts. c. 107, §<§> 3, 5. New trial granted.