Folsom v. Lockwood

By the Gowrl — Emmjjtt, C. J. — When a mortgage is given to secure the payment of money, it is the debt itself that is [190] secured, and not the note or other instrument by which it may be evidenced. Hence the general rule that the lien of the mortgage lasts as long as the debt; and that nothing but actual payment of the debt, or an express release, will operate as a discharge of the mortgage. 1 Hill, on Mortgages, 448-9, sec. 4. There is nothing in this case to exempt it from the operation of this rule. The action is brought to foreclose the mortgage, and the mortgagee states in his complaint that the debt still remains unpaid, and that no proceedings have been had at law, save that in the exercise of a power of sale contained in the mortgage, he had sold the mortgaged premises by advertisement, but that the said sale, at the instance of the mortgagor, had been set aside, and declared null and void, by the judgment and decree of the District Court of the proper county. There is no pretense that any portion of the debt has been paid, or that there has been an express release of the mortgage, but it is insisted that the said sale under the power, though adjudged to be illegal and void, yet operated to discharge the mortgage lien. We think this proposition was by no means established. No one of the cases referred to in the brief of Defendant’s Counsel, seems to us to maintain any such doctrine. They are mostly to the effect — that a judgment creditor, having once sold on execution the interest of the judgment debtor in certain real estate, cannot afterwards redeem the lands under the statute relating to redemption, although his judgment may not be fully satisfied. They all depend more upon the construction of particular statutes than upon any general principle. The sections of our statute to which we have been referred, seem to establish that the power of sale contained in a mortgage is a “lien or charge” on the land mortgaged, and passes by an assignment of the mortgage. This implies that the “lien or charge” thus created or declared, would not exist, without the statute, or would be lost in case the mortgage was assigned. There is room therefore for distinguishing between this lien or charge, and the lien of the mortgage. The former, [191] but for the statute, might be lost by an assignment, although the latter would, still exist in favor of the assignee, without a statutory declaration to that effect. But these sections do not aid us in determining what is the only material question in this case, which is, whether the debt remaining wholly unpaid and there being no express release oí the mortgage, the mortgage lien does not still exist, notwithstanding an abortive attempt to foreclose by advertisement under the statute. They might throw some light on the question, whether the power of sale could again be resorted to, or could be exercised more than once, but these questions do not necessarily arise in this case. There are decisions in some of the States to this effect, but they are predicated more or less upon the peculiar statutes of those states, and it is believed that none go farther, independent of the statutes, than to assert the principle that property cannot be more than once exhausted, in satisfaction of the same debt. And we might admit the correctness of this general principle, yet it would by no means follow that it would apply to the case of a sale, made in pursuance of a power, which at the instance, and for the benefit of the mortgagee had been set aside and declared null and void, by the judgment of a court of competent jurisdiction. Such a sale could not be said to have exhausted the mortgaged property, or made any application of it, in satisfaction of the debt; because the subsequent adjudication thereon, left the parties in the same condition, in their relations to each other, that they occupied before the illegal exercise of the power was attempted. As between the mortgagor and mortgagee, the former would have had the right, perhaps, to affirm the sale, and hold the latter personally responsible for any injury he may have suffered thereby. Lowell vs. North & Carll, 3 Minn., 32. But he cannot have it set aside, and at the same time have the benefit of an affirmance. It cannot be inadequate to pass even the interest of the mortgagor in the property, and yet sufficient to destroy the lien of the mortgagee. The sale should not be held valid for one purpose, and void for another. We hold therefore that as the debt secured by the mortgage [192] remains unpaid, and the mortgaged property has in no degree bee'n applied to the payment of the debt, the lien of the mortgage exists, notwithstanding the illegal foreclosure by advertisement — that having been set aside by the judgment of a court of competent jurisdiction, at the instance of the mortgagor. . . The judgment of the District Court overruling the demurrer of the Defendants to the complaint, is affirmed; and as there are infant Defendants, whose interests may not be sufficiently protected without a trial, we will remand the case to the District Court, for such further proceedings, a3 may ap • pear to be necessary.