Barton v. Kingsbury

The opinion of the court was delivered by Prout, J. In this case the orators seek to open the decrees of foreclosure, referred to in their bill of complaint, and that they may be allowed to redeem the mortgaged premises, with a view of protecting themselves against a liability arising on their covenants contained in a deed by which they conveyed twenty-five acres, parcel of the mortgaged premises. The interest conveyed by the orators, by virtue of this deed, passed from their grantee “ by levies and mesne conveyances,” as alleged in the bill of complaint, prior to the commencement of proceedings of foreclosure by the defendant, to which the orators were not made parties. Upon these facts, and inasmuch as the orators derived title from the mortgagor in ignorance of the mortgages held by the defendant or his assignors, and having conveyed with covenants of warranty, seizin, possession, and against incumbrances to Puffer, [643] whose title, thus derived, passed from him as indicated, it is claimed by the orators that they were necessary parties to the foreclosure in question, and invested with the right of redemption ; and they also insist that it is unaffected by the foreclosure, as they were not made parties to that proceeding. The interest of the orators, in respect to which this claim of a right of redeeming is made, does not partake, either in its nature or incidents, of a subsisting interest in or incumbrance upon the mortgaged property. It is an incidental interest, arising wholly by virtue of the covenants referred to, contained in the orators’ conveyance, which are an assurance of title, binding them ; by which and the terms of their deed they divested themselves of all interest in the estate and property to which they refer and relate. The orators, then, have no interest in the mortgaged premises, and if not, it is difficult to see upon what ground or for what reason it is indispensable to make them principal parties to the foreclosure, which affects only the title to the estate and those having an interest in it. The mortgagor of course stands in a relation to the property peculiar to himself, but it is not of his rights we are now speaking. The general rule, as laid down in all the cases, in order to cut off an incumbrance or subsequently acquired interest in the mortgaged premises, requires the mortgagee, in proceedings of foreclosure, to notice those liens and interests, and to make those holding them parties, as well as the mortgage debtor. The reason of the rule is, the existence of such lien or interest in the premises affected in the one case, and the mortgagor’s relation to and liability for the debt in the other ; who alike have ‘a right of redemption. But it will hardly do to say that this rule applies to every one and all who may be injuriously affected by a decree of foreclosure, upon whom rests an outstanding liability in consequence of existing covenants of title, independent of any such interest in the property, or relation to the mortgage debt, or that they are necessary parties ; and that, unless they are, the decree must be opened, an accounting of rents and profits had, and they let in to redeem. The general creditors of the mortgagor are often injuriously affected by a decree of foreclosure. As such, they, in some sense, are interested in the redemption of the property, yet it is [644] not such an interest, independent of a lien upon the property, that they are even proper parties, although their debtor’s entire estate may be swept beyond their reach by a decree of foreclosure. It is in this attitude and relation that these orators stand ; certainly, as respects the rights of the mortgagee. But regarding them by virtue of the conveyance to them as in privity with the mortgagor, their grantor, and as interested in the redemption of the premises in discharge of their covenants and liability, they were only proper as distinguished from necessary parties to the foreclosure, and the chancellor, on application, might in his discretion allow them to come in and be heard in respect to the accounting, and in ascertaining the amount due on the mortgage, as the merits and equity of the case might demand; which, as it seems to us, is all that can be required, as obviously in many cases it would be impossible for the mortgagee to trace out and discover all in the chain of title having a similar interest to that which the orators set up in this case, which may run through many conveyances and cover a long period of time in respect to an estate thus entangled. Any other rule would lead to endless controversy and often result in great hardship. Lockwood v. Benedict et als., 3 Edw. Ch. R., 472; Whitney v. McKinney, 7 Johns. Ch. R., 144. See also Soule et als. v. Albee et als., 31 Vt., 142, which is directly in point. The leading facts which impel us to this conclusion are, that the orators had no subsisting interest in the mortgaged property when the foreclosure proceedings were commenced. If their grantor conveyed to them the equity of redemption, as the case shows he did, they conveyed it to Puffer, leaving the orators destitute of any interest, or right of redemption, which we hold to be necessary. These conclusions render it unnecessary for us to consider any other question involved in the case, and alluded to by counsel in the arguments, which we do not decide. The decree of the chancellor is affirmed.