Carley v. Fox

Cooley, J. The bill in this case was filed to set aside a'Statutory foreclosure of a mortgage. The facts important to its decision are the following: In May, 1873, George Carley, the husband of complainant, conveyed to defendant a farm in Benton township, subject to the payment by defendant of a mortgage thereon for two thousand dollars. It is conceded that by accepting this conveyance defendant became personally liable for the payment of the mortgage under the decision of this court in Crawford v. Edwards, 33 Mich., 359. The farm was also subject at this time to another mortgage for $945 given by George Carley and complainant, and covering besides this, certain property in St. Joseph owned by complainant. The latter mortgage was given for the debt of George Carley, and Mrs. Carley, in respect to her lands covered by it, was entitled to all the rights of a surety. Carley’s deed to the defendant made no exception in respect to the last-mentioned mortgage, and as the deed was one of warranty, defendant was entitled to protection from Carley as against it, but he had no corresponding right as against complainant, who, though she joined in the deed conveying it, could not be liable upon the covenants. Hovey v. Smith, 22 Mich., 170, 172. From this statement it appears that the farm was the first fund for the satisfaction of the mortgage for $945, and that complainant had a right to insist that it be first sold for that purpose. We also think, that her release of her contingent right of dower in the farm [390] to defendant, gave ■ her a right to insist for her own protection upon his performance of his undertaking to pay off the mortgage of $2,000. It is true that if he did that, and was then obliged to pay the mortgage of $945 also, he wbuld have a claim against George Carley for the sum last mentioned, but this fact could not affect the equities of complainant. He put himself, by his purchase, in a position which exposed him to that risk. "While this was the position of the parties, the owner of the smaller mortgage proceeded to foreclose it under the power of sale, but instead of selling the farm first as he should have done, he sold complainant’s property first, and it was bought by defendant for the amount due and costs. As between complainant and defendant this was a wrongful sale, and defendant acquired no rights thereby except the right to the mortgage. But as he became owner of the mortgage while also owning the land from which it should be satisfied, the purchase should be deemed a payment and satisfaction if the farm was sufficient for the purpose. That the farm was sufficient for the purpose clearly appears: indeed the preponderance of evidence is that the value was considerably more than both mortgages. The decree appealed from set aside the deed on the foreclosure, and it must be affirmed with costs. The other Justices concurred.