Stromberg v. Lindberg

Gilfillan, C. J. A chattel mortgage vests in the mortgagee the legal title, subject to be defeated by performance of the condition in the mortgage, a right or equity of redemption remaining in the mortgagor. Formerly, at law, the mortgagee’s title became absolute upon a default; but courts of law now accept the equitable rule, fhat the right of redemption continues until it is barred or foreclosed, in the manner provided by law or in the mortgage. See also Gen. St. c. 39, §§ 5-9. Where the mortgagee forecloses under the power of sale in the mortgage, he stands, with respect to the mortgagor’s rights in the property, in the position of a trustee, and is held to the exercise of good faith and proper care and diligence to avoid any sacrifice of those rights, not necessary to the reasonable enforcement of his own. Although the mortgage cover much more property than is necessary to his security, he may, under his mortgage, for his security, take possession of the whole; but where, without prejudice or great m.convenience to himself, he can satisfy his debt by a sale of [516] part, lie is, if the interests of the mortgagor require it, bound' so to sell. If he unnecessarily sell the whole, and especially if he do so, not in good faith to. satisfy his debt, but, as the court below in this case has found, in order to secure, by use of the power of sale, some further advantage — to effect some purpose not contemplated by the mortgage, he ought to be, and is, liable to the mortgagor for the damages sustained by him through such oppressive use of the power of sale. The claim of the mortgagor in such a case is not a debt which is the subject of levy. The levy by defendant upon the surplus in his hands, after the sale and satisfaction of the mortgage-debt, did not affect the plaintiff’s cause of action against him. Judgment affirmed.