Hardy v. Beverly Savings Bank

Morton, J. We think that this case is governed by George v. Wood, 9 Allen, 80. In that case it was held that a mortgagee who had released a portion of the mortgaged premises was not bound to contribute to a subsequent mortgagee of the existence of whose mortgage he had no notice, actual or constructive, at the time of such release. It was further held that the fact that such subsequent mortgage had been duly recorded was not constructive notice to him. See also Bates v. Norcross, [114] 14 Pick. 224; Western Union Telegraph Co. v. Caldwell, 141 Mass. 489. In the opinion in George v. Wood, 9 Allen, 80, 84, it is said that when a purchaser from the mortgagor seeks to enforce his equity against a mortgagee who has released a portion of the mortgaged premises prior to" the conveyance to such purchaser, “ it is reasonable to require strict proof of notice. He [the purchaser] takes his title with full knowledge that it is subject to the mortgage; and if he does not perfect it by a release, he ought not to subject the mortgagee to the constant necessity of investigating transactions between the mortgagor and third persons subsequent to the mortgage, in order to protect him; when by giving notice he can so easily protect himself. The establishing of such mere collateral equities, which do not affect the legal title, cannot be considered as within the pimposes intended to be accomplished by the statutes for registration of deeds.” We think that this reasoning applies to the case of an attachment of an equity of redemption, and that if the attaching creditor wishes to protect any interest that he may have in the proceeds remaining in the mortgagee’s hands upon a foreclosure sale he should give due notice to the mortgagee. Upon a foreclosure sale the' attachment is not transferred by operation of law to the funds in the hands of the ■mortgagee. It is only by due proceedings in equity that the ■creditor can secure the benefit of his attachment if there should be a surplus remaining in the mortgagee’s hands- upon the foreclosure -sale. And we think that, as said in George v. Wood, he ■can easily protect himself by giving notice to the mortgagee, •and that it is more reasonable to require him to do so than, it is to compel the mortgagee at his peril to keep run of all attachments and conveyances subsequent to his mortgage. See Jones, Mortgages, § 1930; Fisher, Mortgages, § 846; Robbins, Mortgages, 914; Thorne v. Beard, [1895] A. C. 495; M’Lean v. Lafayette Bank, 4 McLean, 430. ' We see no difference in principle between the case of a release of a portion of the mortgaged premises by the mortgagee and the case of payment of the “surplus remaining on a foreclosure sale. Decree affirmed ; Mil dismissed.