Gleason v. Carpenter

Start, J. The orator, by his bill, shows that defendants Carpenter, Woodward and Morton were tenants in common with C. J. Gleason of a second mortgage interest in the premises at the time C. J. Gleason paid the first mortgage, and insists that C. J. Gleason thereby became subrogated to all the rights and interest of the first mortgagee in the premises. In view of the allegation and claim, the demurrer cannot be sustained on the ground that the bill shows a merger of the two estates. It was not necessary to set forth in the bill all the circumstances that attended the conveyance of the equity of redemption to C. J. Gleason and the payment of the first mortgage incumbrance by him. Sufficient is stated in the bill to raise an inference that C. J. Gleason intended to keep the two estates separate; and, until the contrary appears, this is suffi [402] cient. When money due upon a mortgage is paid, it may -operate to cancel the mortgage, or in the nature of an assignment of it, as may best serve the purposes of justice and the true interest of the parties. Bullard v. Leach, 27 Vt. 491. When a mortgagee holding the entire mortgage interest takes :a conveyance of the land mortgaged, the question of merger 'depends, in equity, on his intention; and, in the absence of an 'expressed intention, it may be presumed that he intended to '.keep the mortgage on foot, if it appears, from all the circumstances, that it was for his interest to* do so*. Carpenter v. Gleason, 58 Vt. 244, 4 Atl. 706. In Howard v. Clark, 71 Vt. 424, 45 Atl. 1042, 76 Am. St. Rep. 782, it is said that, as a general rule, the conveyance of the equity of redemption to a mortgagee will not constitute a merger of the legal and equitable estates, when, from all the circumstances, it is apparent that the best interests of the mortgagee require the two* estates to be kept separate, unless it is found that such was the intention of the mortgagee. The intention of the mortgagee governs, and when his intention to* merge the two estates is established, it controls. The case of Carpenter v. Gleason, before cited, was a foreclosure suit by Carpenter, Woodward and Morton against C. J. Gleason to* foreclose Gleason’s equity of redemption in the premises in question in this suit, and it was held that the conveyance of the equity of redemption to Gleason did not operate to merge his interest in the second mortgage; and the bill was dismissed. The defendant’s objection that the bill cannot be maintained, because a mortgage cannot be assigned and kept on foot by a redemption certificate, is not sustained. The certificate may have purported to be in full discharge of the decree; yet, as we have seen, a court of equity will, even in such cases, keep the mortgage on foot, and treat the transaction as a purchase [403] rather than a payment of the decree, as may best subserve the purposes of justice. The rights acquired by C. J. Gleason under the first mortgage, by reason of his having paid the amount of the decree, could, for a valuable consideration, be transferred to the orator, notwithstanding he did not advance the money to redeem the premises. Wheeler v. Willard, 44 Vt. 640; Spaulding v. Crane, 46 Vt. 292. The defendants insist that the orator has slept upon his rights and been negligent in asserting them. This defense cannot be interposed by demurrer. Drake v. Wild, 65 Vt. 611, 27 Atl. 427. The other questions argued by counsel for the defendants are not raised by the demurrer,' and the consideration of them is deferred until they are properly before us. The pro forma decree is reversed, the denvwrrer overruled, bill adjudged sufficient, and cause remanded.