Buzzell v. Still

[494] The opinion of the court was delivered by ROWELL, J. The mortgage of April 17, 1877, from Benjamin W. Still and wife to Mary A. Still, warranted the premises free from every incumbrance except the Erary mortgage, of which the petitioner is assignee, and which he is now seeking to foreclose. Thus Mary A. Still had actual notice of the Frary mortgage when she took her mortgage. She also had constructive notice of it, as it was on record. Hence she took her mortgage subject to it. The petitioner was made a party defendant in the suit to foreclose her mortgage. The only allegation in the petition in that case in respect of this petitioner’s interest in the premises was, that he claimed title thereto “by deed or otherwise.” He then owned the Frary mortgage and held his deed of October 30, 1878, which had been duly recorded, and which, though absolute in form, was a mortgage in fact, and inferior to Mrs. Still’s mortgage. The petitioner made no answer in that case, and the petition was taken as confessed and the ordinary decree of foreclosure passed against all the defendants, and none of them redeemed, so the decree became absolute. It is now claimed that that decree bars the Frary mortgage, and that therefore the petitioner cannot have a decree of foreclosure upon it. But this is clearly not so. One holding a senior mortgage, the superiority of which is not drawn in question by the bill brought to foreclose a junior mortgage, is not divested of his prior right by the ordinary decree of foreclosure therein against him, for such right is not in issue. The clause in such decrees, that the defendant and all persons claiming under him “ shall be foreclosed and forever barred from all equity of redemption in the premises,” relates only to sucli rights and interests as are inferior to the mortgage that is -foreclosed, and not to such as are superior. Emigrant etc. Savings Bank v. Goldman, 75 N. Y. 127; Lewis v. Smith, 9 N. Y. 502; 61 Am. Dec. 706; Strobe v. Dow [495] ner, 13 Wis. 10; 8 Am. Dec. 709, and note; Shaw v. Chamberlin, 45 Vt. 512; Bowne v. Page, 2 Tyler, 392. The effect of the decree foreclosing the Mary A. Still mortgage was, to cut off the equity of redemtion as to the defendant’s inferior rights in the premises, and thereby to convert the conditional title conveyed by that mortgage into an absolute title; but in all other respects the rights under that mortgage thus made ■absolute were left to be determined by the deed itself. It then ■stood just as it would have stood had the mortgage been an absolute deed in the first place ; St. Johnsbury & Lake Champlain R. R. Co. v. Willard, 61 Vt. 134; and had it been an absolute •deed in the first place, it would have conveyed nothing as against .the Frary mortgage but the equity of redemption, for that was .all the mortgagors had to convey. The defendants claim a merger and that -the defendant Eu.gene Still is a bona-fide purchaser without notice. But there is nothing in the petition to show a merger, as is abundantly shown by the law of merger as laid down in Carpenter v. Gleason, 58 Vt. 244. Neither is there anything alleged on which said Still can stand as a bona-fide purchaser without notice. Decree reversed, demurrer overnded, petition ad/judged sufficient, and.cause remanded.