Bassett v. Mason

Church, J. The facts in this case disclose a strong equity in favour of this application, which should be enforced, unless there be some adverse principle, so stubborn, that we are bound to yield to it. It is quite certain, that unless there be a remedy for this plaintiff, he must be subjected to the payment of the debt, and also to the loss of the land pledged for its security. We do not think the law furnishes an adequate and certain remedy to the plaintiff, and that he can effectually interpose a plea of payment to the action now pending on the note. Had the mortgage, which was given to secure the note now in suit, and against which suit this injunction is prosecuted, been foreclosed, such foreclosure would have operated as a payment even at law, because it is found to be true, that the value of the mortgaged property exceeds the amount of the note. 2 Greenl. Ev. 524. And this principle has been recognized as the law of this state, from an early period of our judicial history ; but it has not been extended beyond cases of foreclosure. The court, in the early case of Coit v. Fitch, Kirby 254. says, that “ neither ejectment, nor any proceedings on the land, will discharge the debt, unless it be a foreclosure of the equity of redemption.” The mortgage given by Alfred and David, Bassett to secure the payment of this note of 2000 dollars, to Andrew, has never been foreclosed. When Mason foreclosed his subsequent mortgage, he was not the owner of this note ; he had not then purchased the first mort-g&ge. Either Andrew, the payee of the note, or Ellis, his assignee, then owned this note and mortgage ; and neither of them were made parties to Mason’s bill or decree. Afterwards, Mason got in the whole legal estate in the land, by purchasing the interest which Colbourn had acquired by the levy of his execution, and by taking an assignment of the first mortgage, and a quit-claim deed from the mortgagee. Thus the legal and equitable interests became united in him. If this operated as a merger of the estates, it did so only in equity. This species of merger is a doctrine of a court of equity only. The reason is obvious; for whether the union [137] of the legal and equitable interests shall operate as a merger, and thus as the satisfaction of a debt, depends upon equitable - circumstances. As a general rule, it is true, that such union of interests operates as a satisfaction of the mortgage ; yet a court of equity, for reasons which it will approve, often treats these interests as distinct, and the mortgage as out-standing, although there has been an apparent union of the estates the mortgagor and the mortgagee in the same person. A question of intention is sometimes to be settled, and the effect upon third persons to be considered. Gardner v. Aston, 3 Johns. Ch. R. 52. James v. Johnson, 6 Johns. Ch. R. 417. Starr v. Ellis, Id. 393. Tice v. Annin, 2 Johns. Ch. R. 125. Cox v. Wheeler, 7 Paige’s Ch. R. 248. Freeman v. Paul, 3 Greenl. R. 260. Thompson v. Chandler, 7 Greenl. R. 377. It is proper, therefore, if not necessary, that the question whether satisfaction or not, be left to the decision of the equity courts. This question being left to us, we do not hesitate, in the present case, to declare, that, by the union of the estates of mortgagor and mortgagee here, in Mason, the defendant, this mortgage should be treated as satisfied, and this debt as can-celled. If there is no existing equity of redemption, under the first mortgage, still in David Bassett, as the court believe, Mason has a perfect title to the land mortgaged. This is the primary fund for the payment of this note, and it must stand appropriated to this purpose ; otherwise the debt remains, while the creditor has received its equivalent, which he refuses to release. The present parties alone are interested in this question — no third persons have interests which can be affected by its decision ; and it is obvious from the answer of the defendant, that his intention, in purchasing the interest of Col-hourn, and the Andrew mortgage, was, to perfect in himself the entire estate in this land,-both legal and equitable. By treating this debt as satisfied, we carry out the original purpose of the defendant, and do entire justice to all. We shall advise the superior court, therefore, that this bill [138] be granted, with an injunction to stay the further prosecution of the action upon the note. In this opinion the other Judges concurred. Decree for plaintiff.