Hodges v. Phinney

Grant, J. (after stating the facts). The question, as stated by the complainant’s counsel, is: Could she buy the mortgage upon the land admeasured to her as dower, and enjoy all the rights thereunder that Dutton, the original mortgagee, had? As stated by the defendant’s counsel the question is: Is not a widow endowed, owning a mortgage covering the land set off to her as dower, bound to keep the interest down? It is the duty of the life tenant to pay the interest on incumbrances existing at the time the tenancy was created. A dowress forms no exception to the rule. 4 Kent, Comm. 74; House v. House, 10 Paige, 158. In the case [540] before us the entire real estate was mortgaged. One-third of it was assigned to the complainant as her dower, 'burdened with one-third of the entire mortgage debt. The mortgage was past due. If we adopt the complainant’s view, she can recover the entire amount of the mortgage against the remainder-man, - and her estate will be enlarged to the extent of the payment. In that event the land in which she was endowed would be worth about $4,400, instead of $3,100, which was the value assigned to her. Such holding would be not only contrary to law, but to equity as well. Whether the life-tenant or the remainder-man redeems or takes an assignment of the! mortgage, each must contribute to the payment of the principal according to the value of his interest. Much conflict formerly existed among the authorities upon this point, but the well-settled rule now is that the dowress must pay the present value of an annuity based upon the annual interest which the law requires her to pay. The • rule is thus stated in an early and leading case: “How is the plaintiff [a dowress] to contribute ratably to discharge the mortgage debt? If she was to pay one-third of the debt and interest (exclusive of costs) paid by the defendant, together with interest on that one-third from the time the defendant paid it, there could be no •doubt that this would be, to the defendant, a satisfactory contribution. But the plaintiff has only a life interest in the dower, and payment of the entire one-third of that debt would be unjust. It would be making her pay for a life estate equally as if it was an estate in fee. The more accurate rule would appear to be that she should 'keep •down’ one-third of the interest -of the mortgage debt, by paying, during her life, to the defendant, the interest of one-third part of the aggregate amount of the principal and interest of the mortgage debt paid by the defendant, to be computed from the date of such payment. But, as it would be inconvenient and embarrassing to charge her with such annuity, then let the value of such annuity from the plaintiff (her age and health considered) be ascertained by one of the masters of this court, and be deducted from the amount of the rents and profits so coming to her; and, if that value should exceed the amount of [541] the rents and profits so coming to her, that then the residue of such value be deducted from the dower to be assigned to her, out of the house and land mentioned' in the bill. The question is, if an estate in fee in one equal third part of the premises ought to pay the one equal third part of the mortgage debt and interest paid by the defendant, then what proportion ought the plaintiff’s life estate in that one-third part to pay? I apprehend the value of such an annuity would be that result.” Swaine v. Perine, 5 Johns. Ch. 482. . In chapter 24,1 Scrib. Dower, the subject will be found very fully and ably discussed, and the authorities fully cited. This annuity cannot, however, be based upon the rate of interest contained in the mortgage, but must be based upon the legal rate of interest at the time the first decree' is rendered. The contest is no longer between the mortgagee and those whose duty it is to pay, but between the latter, who are required to contribute, and as between whom there is no agreement to be bound by the rate fixed in the mortgage. Their relation is none other than that where one pays money for the benefit of another without any agreement as to the rate of interest. The legal rate of interest (6 per cent.) must control. The decree will be reversed, with costs, and the case remanded to the court below, with instructions to enter a final decree in accordance with this opinion. The other Justices concurred.