Bullard v. Leach

The opinion of the court was delivered by Bennett, J. The object of this bill is to enable the orator to set up the mortgage executed by Calvin W. Greenleaf to the Mutual Manufacturing Company, as against the title of Leach, under his attachment and levy of execution upon Greenleaf’s equity of redemption. It is claimed by the defendant’s counsel, that as the plaintiff purchased the equity of redemption of Greenleaf, with notice of the prior attachment of the orator, and having agreed, as a consideration of the purchase, to pay the mortgage debt, and having paid it he cannot now set up the mortgage against Leach. The case does show, that when Greenleaf conveyed to the orator, he did agree to pay the mortgage debt as the consideration for the deed. At this time there had been no levy of Leach’s execution ; and it does not appear that anything was said at the time between Bullard and Greenleaf, in regard to keeping the mortgage on foot; but the mortgage and the notes secured by it, had been previously purchased by one Daniel Gay, and were held by him ; and Bullard, for the sake of getting time, or rather to save costs, agreed with Gay to pay what might be due on the notes, and it was then understood between them, that Bullard might have the benefit of the mortgage. We appi'ehend that, under the cix’cumstances of this case, the payment of the mortgage debt to Gay, should not operate to extinguish the mortgage lien, and that the conveyance of the equity of redemption to Bullard should not operate as a merger of his equi [495] table rights, under the mortgage, to set it up for the protection of his own title. The principle, which it seems may be abstracted from the cases is, that where money due upon a mortgage is paid, it may operate to cancel the mortgage, or in the nature of an assignment of it, placing the person who pays the money, in the shoes of the mortgagee, as may best subserve the jiurposes 0f justice, and the just and true interest of the parties. The purpose however must be innocent, and injurious to no one. See Starr v. Ellis, 6 John. Ch. 393, and Robinson et al. v. Leavitt, 7 N. Hamp. 99, 100, 101 and 110, and cases there cited. Towle v. Hoit, 14 N. Hamp. 61 Payne v. Hathaway, 3 Vt. 212. Downer v. Pox et al. 20 Vt. 388. Slocum v. Gatlin et al. 22 Vt. 138. The case of Myers v. Brownell, 1 D. Chip. 448, has a strong analogy to the case at bar in its leading facts, and there, it was held that a conveyance of the equity of redemption to the mortgagee, in payment of the mortgage debt, by a deed of warranty with the usual covenants, did not operate as a merger of the mortgage, so as to give priority to an intervening incumbrance by way of an attachment and a subsequent levy of execution. It was not necessary that there should have been the express consent of Greenleaf, when he conveyed to Bullard that the mortgage should be kept on foot for his benefit. It may well be presumed, it being necessary for the purposes of justice; and we have in this case the express assent of the assignee of the mortgage that it might; and the interest of Bullard required that it should be, and his intention to have it kept on foot is fully manifested by his agreement with Gay to that effect, and no injury or injustice is done to Leach. It was as to him immaterial whether he paid the amount of the incumbrance to Gay or to Bullard, in order to render his levy available to him. And if the plaintiff cannot set up this mortgage, injustice is done him ; instead of paying the mortgage debt simply, as agreed between the plaintiffs and Greenleaf, he would be compelled also, in addition, to pay Leach’s debt. The mortgage to the Mutual Manufacturing Company was on record, and that was sufficient notice to Leach of all facts relating to the mortgage which he might have ascertained upon reasonable inquiry. Green v. Slater, 4 John.. Ch. 38. 17 Vt. 329. The deed from Greenleaf to Bullard excepted from the cove [496] nants the mortgage; but in the case of Myers v. Brownell, the deed was with the usual covenants, without any exception, and yet it was held that the deed did not create a merger of the mortgage. It was said in argument that this bill was, at all events, prematurely brought. But if we take it for granted, tha\ the defendant is not too late in making this objection, still we think it cannot avail him. It is well settled that a creditor having a lien upon real estate, which has been perfected, may redeem, and every person who has an interest in the mortgaged premises should be made a party. Although the mortgagor’s right of redemption under the statute had not run, when this bill was brought; yet we have no doubt that after the levy of the execution, Leach had such a fixed, certain and definite interest in the premises that he may well be made a party to a bill to foreclose the equity of redemption. If, jDending the suit, it should turn out that the mortgagor had redeemed the premises from the levy, it might furnish a reason why a decree should not, after that, pass against the levying creditor. In regard to the tender made to the orator, that, by the master’s report, is found not to be adequate, and of course it can be no bar to the proceedings in this bill. We see no reason to question the correctness of the chancellor’s decree, and the same should be affirmed with the costs in this court, and the case is remanded with an affirmance of the decree below.