Cornell University Law Library The Moak Collection PURCHASED FOR The School of Law of Cornell University And Presented February 14, 1893 IN HEnORY OF JUDOE DOUQLASS BOARDMAN FIRST DEAN OF THE SCHOOL By his Wife and Daughter A. M. BOARDMAN and ELLEN D, WILLIAMS The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924022802783 A TREATISE LAW OF MORTGAGES REAL PROPERTY THE STATE OF NEAAT YORK, WITH BEFBEBNCBS TO THE DECISIONS OF THE FEDEEAL COURTS, AND OF THE COURTS OF THE VARIOUS STATES ; AN APPENDIX OF FORMS. By ABNER C. THOMAS, C0ira8ELL0K-AT-LAW. SBCOND EDITION, BEVI8ED AND ENLARGED. NEW YORK: BAKER, VOORHIS & CO., PUBLISHERS, 66 NASSAU STREET. 1887. Entered, according to Act of Congress, in the year eighteen hundred and seventy-seven, by ABNER C. THOMAS, In the office of the Librarian of Congress, at Washington. COPTBIQHT, 1887, BY ABNER C. THOMAS. nil E. O. JENKINS' SONS, PRINTERS, NEW YORK. PHEFACE TO THE SECOND EDITION. The first edition of this work was published in 1877. The kind reception which it met with encouraged the author to undertake its enlargement and possible improvement, and this has been his recreation for a number of years during the hours that could be spared from more urgent employment. The general plan of the book will be found not to have been greatly changed, but the matter has been re-arranged in some respects, and revised, and largely added to, and the whole has been divided into sections with an appropriate heading to each. The years which have elapsed since the publication of the first edition have been unusually fruitful of mortgage litigations, and it is believed that every reported decision of the courts of this State, having any bearing on the rights of parties to mort- gages of land, has been cited. In addition to this the reports of the decisions of the Courts of the United States and of the Appellate Courts of other States and Territories, have been examined, and the cases based upon prtaciples accepted here, and not resting upon merely local statutes, have been referred to. This examination was made without the aid of any digest or text-book, from the reports themselves, volume by volume. The Forms in the Appendix have been revised or re- writ- ten to conform to the requirements of the Code of Civil Pro- cedure. It was originally proposed to treat mortgages of personal property as well as mortgages of real estate, in this edition as was done in the first, but as the work progressed it was discovered that no reasonable amount of condensation would permit this to be done within the limits of a single volume. iv PREFACE TO THE EIRST EDITIOIST. and for this reason the portions of the first edition concerning mortgages of personal property have been omitted, and with additions may some day be published as a separate work. The author submits the book to his brethren in the pro- fession with the hope that it may prove as useful to them as its preparation has been agreeable to him. ABNER C. THOMAS. 10 Wall Steeet, New York, z July 1, 1887. PREFACE TO THE FIRST EDITION. The fact that mortgages of land are, in the State of 'New York, almost as common as absolute conveyances, is evidence of the most convincing character that the law which governs the rights and remedies of the parties to them, has been wisely framed and is justly administered. The conclusion which may be reached from so casual an observation of results will be abundantly justified by a study of the law itself ; and it is beyond dispute that the law of mortgages of real property in this State is admirably adapted to the business needs of our people. Mortgages of chattels do not afford such satisfactory secu- rity to the mortgagees as do mortgages of real estate ; but, as an offset to this, they are regarded with favor by failing debt- ors who desire to shield their property from the demands of their creditors. They are not so common as mortgages of real estate, but the questions which arise concerning the rights of parties claiming under them, and of those claiming in hostility to them, are numerous and important. The aim of the author in preparing this work has been to present in a convenient form an intelligible statement of the law governing the rights and remedies of parties to mortgages in this State, and to collate and arrange under appropriate divisions all of the decisions of the courts of this State rela- tive to the topics treated. Decisions of the English courts, PEEFACE TO THE FIRST EDITION. V and of the courts of tlie other States of our Union, and of the United States, have also been cited for the purpose of illus- trating principles which have received approval here. The Appendix of Forms was designed to furnish the kind of help which a busy lawyer, unfamiliar with the practice in litigations which specially concern mortgages, could not get from a mere statement of principles. It was, therefore, at- tempted to avoid inserting forms which were, on the one hand, so common as to be kept for sale by the stationers, or on the other, so unusual as to be but seldom needed. In thus taking his readers into his confidence as to what he has tried to accomplish, the author expressly disclaims any pretension to having entirely succeeded in his endeavors. He sincerely wishes that the book were more complete and satis- factory, and he sends it out into the world in the hope that, in spite of its defects, it may serve to lighten, somewhat, the labors of an overworked profession. ABNER 0. THOMAS. Tribune Building, New Yoek, January 3, 1877. TABLE OF CONTENTS. References are to Sections. CHAPTEK I. SEOTIOKS HISTORY OF MOETUAGES AND THEIE NATURE, . 1-30 CHAPTEE II. CONDITIONAL SALES, 31-40 CHAPTEE III. EQUITABLE MORTGAGES AND IMPLIED LIENS FOR PUR- CHASE MONEY. Equitable mortgages, 41 Equitable mortgages by deposit of title deeds, . . . 42-51 The lien of a vendor for unpaid purchase money, . . 52-64 Priority of equitable mortgages as against subsequent pur- chasers and iacumbrancers, 65-70 Remedy proper for an equitable mortgagee, . . . 71-75 CHAPTEE IV. WHO MAY MORTGAGE AND HOW. What may be mortgaged, 76-80 Mortgages executed under powers, 81-85 Execution and delivery, 86-91 The debt secured, 92-108 Mortgages of partnership real estate, 104^112 Mortgages from husband to wife, 113 Mortgages by corporations, 114^181 Mortgages by national banks, 132-133 Mortgages of the lands of infants, 134-140 Insane persons, 141-143 Mortgages of lands of deceased persons to pay debts, . . 144-145 Mortgages of burial and cemetery lots, .... 146-148 Vlll TABLE OP CONTENTS. CHAPTER V. EXTENT OF THE LIEN, AND REMEDIES ON ACCOrNT OP WASTE. SECTIONS Lien of a mortgage on a right of action for damages to the estate, 149-153 Mortgages on leasehold estates, 154-157 Mortgages by raUroad companies, 158-159 Lien upon emblements, ...... 160-165 What are fixtures as betweeit mortgagor and mortga;gee, . 166-172 Eule as to fixtures between lessor and lessee, . . . 173-174 Conflicting claims to chattels affixed to mortgaged realty, . 175-180 Injunction to restrain waste, ...... 181-187 Action for damages caused by waste, .... 188-191 CHAPTEE VI. MORTGAGES FOR FUTURE ADVANCES OR OBLIGA- TIONS, 192-203 CHAPTER VII. TiaiE FOR THE PAYMENT OF THE MORTGAGE DEBT. Extension of time for payment, 204-207 Extension by renewal of notes, 208-212 Effect of extension on rights of sureties, .... 213-220 When a refusal by a creditor to collect a debt discharges the surety, 221-227 Shortening the time of payment under the default clause, . 228-234 CHAPTER VIII. RIGHTS OF MORTGAGEE IN POSSESSION, AND ACCOUNT- ING BETWEEN MORTGAGOR AND MORTGAGEE. Rights of mortgagee in possession, 285-244 Accounting between mortgagor and mortgagee, . . . 245-264 CHAPTER IX. THE PRIMARY FUND FOR THE PAYMENT OF MORTGAGES AND PRIORITIES INDEPENDENT OF THE RECORDING ACTS. The primary fund for the payment of mortgages, . . 265-280 Priorities independent of the recording acts, . . . 281-297 CHAPTER X. ASSIGNMENT OF MORTGAGES, "..... 298-334 TABLE 0¥ CONTENTS. IX CHAPTEE XI. THE PAYMENT AND DISCHARGE OP MOETGAGES. SECTIONS What payment will discharge a mortgage, . . . 335-341 Who may receive payment, 342-359 Application of payments, 360-362 Discharge by merger, 363-380 Discharge by release of part of the security, . . . 381-388 Changes in the form of the debt, ..... 389-393 Discharge by extending time for payment of mortgage debt, 394 Discharge by estoppel, 395 Discharge by tender of payment, 396-409 Presumption of payment from lapse of time, . . . 410-416 Discharge of mortgages upon the record, .... 417-430 Setting aside and cancelling the discharge of a mortgage, . 431-438 Reissue of paid mortgage, 439-443 Subrogation, 4 41 1 56 CHAPTEE XII. THE RECORDING ACTS. What instruments may be recorded, Acinowledgment or proof, Method of recording. Effect of the record. Who protected by recording acts. Notice as affecting recording acts, Recording assignments of mortgages. Judgment liens suspended upon appeal. 457-460 461-464 465-478 474-481 482-486 487-495 496-503 504-505 CHAPTEE XIII. MORTGAGES TO THE COMMISSIONERS OE THE UNITED STATES DEPOSIT FUND. Origin of the fund, 506-508 Effect of these mortgages as record notice, .... 509-512 Provisions of law specially applicable to mortgages to the loan commissioners, 513-518 Rights of mortgagors under mortgages to the loan commis- sioners, 519-521 Sale of the mortgaged premises under the statute, . . 522-528 X TABLE OP CONTENTS. CHAPTER XIV. INSUBAJJCE AGAINST FIEE. sections Insurable interests of parties to mortgages, .... 529-532 Form of contract of insurance 533-543 " Mortgagee clause " in policy, 544^545 Agreement to insure contained in the mortgage, . . . 546-549 Enforcing payment by insurers, 550-553 Eights of the parties where the premium is paid by the mortgagor, 554r-557 Eights of the parties where the premium is paid by the mortgagee, 558-561 When the insurer is entitled to be subrogated to the rights of the mortgagee, 562-564 CHAPTER XV. THE ASSUMING OP MOETGAGES. Agreement to assume mortgage, 565-578 Grounds upon which the mortgagee may enforce the agree- ment to assume, 579-587 Effect of the agreement where the grantor is not obligated to pay the debt, 588-590 Eelations between parties after agreement to assume, . . 591-594 Defenses to actions on covenants to assume mortgages, . 595-604 CHAPTER XVI. MAEEIED WOMEN. Power of married women to mortgage their lands, . . 605-610 Liability of married women for deficiency upon foreclosure, . 611-619 Eight of dower in the equity of redemption, . . . 620-627 CHAPTER XVII. INTEEEST AND TJSUEY. Interest, . 628-631 Usury 632-672 CHAPTER XVIII. EEDEMPTION, 673-698 CHAPTER XIX. ACTIONS TO EEDEEM, 699-717 TABLE OF CONTENTS. XI CHAPTEE XX. PAETIES TO ACTIONS FOR THE FOEECLOSURE OF MORT- GAGES. SBOTIONS Who are proper plaintifEs in foreclosure cases, . . . 718-728 Who are necessary defendants in foreclosure cases, . . 729-740 Who are proper defendants in foreclosure cases, . . . 741-742 When the assignor of the mortgage is a necessary or proper party to an action to foreclose it, 743-746 Enforcing personal obligation for debt in foreclosure suit, . 747-750 Unnecessary parties, 751-754 CHAPTER XXI. NOTICE OF THE PENDENCY OF THE ACTION TO FORECLOSE, 755-774 CHAPTEE XXII. PRACTICE EST ACTIONS TO FORECLOSE MORTGAGES. Proceedings prior to judgment, 775-826 Judgment for deficiency, . . .... 827-833 Force and effect of judgment, 834^837 Stay of proceedings on appeal, 838-840 CHAPTER XXIII. DEFENSES AND COUNTERr-CLAlMS IN ACTIONS TO FORE- CLOSE. 841-851 852-853 854-855 856-857 858-869 870-877 What may be litigated in actions to foreclose. How a defect of parties may be objected to, Proceedings at law for the -same debt, .... Infancy as a defense, Failure of consideration for a purchase-money mortgage. Counter-claims in foreclosure cases, .... When a grantee may defend who has taken subject to the mortgage, Defense of defect of title to the mortgage. 878-882 883-884 CHAPTEE XXIV. RECEIVERS OF RENTS. When a receiver will be appointed, 885-901 Powers and duties of the receiver, 902-907 Xll TABLE OF CONTENTS. CHAPTER XXV. COSTS. SECTIONS Costs in actions to foreclose, ....... 908-918 Costs in surplus proceedings, 919 Costs in actions to redeem, 920 CHAPTER XXYI. HOW THE SALE TJNDEE THE JUDGMENT OP FOEE- CLOSUEE SHOULD BE MADE, .... 921-942 CHAPTER XXVII. WHEN THE SALE SHOULD BE MADE IN SEPAEATE PAE- CELS, AND OEDEE OP THE SALE OF SUCH PAECELS. Sale in separate parcels, 943-956 Order of sale, 957-965 CHAPTER XXVIII. SETTING ASIDE THE SALE IN FOEECLOSUEE, AND OEDEEING A EESALE, 966-987 CHAPTER XXIX. EIGHTS AND OBLIGATIONS OF THE PUECHASEE AT THE SALE UNDEE THE JUDGMENT OP FOEECLOSUEE- Who may purchase, 988-993 Contract of the purchaser and enforciag its performance, . 994^996 What kind of a title the purchaser must take, . . . 997-1007 When a purchaser will be excused, .... 1008-1012 CHAPTER XXX. ESTATE OF THE PUECHASEE AT THE SALE UTSTDEE THE JUDGMENT, AND HOW POSSESSION MAY BE OBTAINED. Title of purchaser, 1013-1023 Contracts made by mortgagor before foreclosure, . . 1024^1026 Purchaser's title after defective foreclosure, . . . 1027-1080 Obtaining possession, 1031-1038 TABLE OF CONTENTS. XIU CHAPTEE XXXI. SURPLUS PROCEEDINGS. SECTIONS 1039-1043 1044-1052 1053-1061 1062-1064 1065-1074 Provisions of law relating to distribution of surplus, What may be litigated, Who is entitled to surplus, Are surplus moneys real or personal property, . Practice in proceeding to distribute surplus, CHAPTEE XXXII. REMEDIES OF THE MORTGAGEE, OTHER THAN BY PRO- CURING A SALE OF THE MORTGAGED ESTATE. Strict foreclosure, 1075-1083 Action at law on debt, 1084-1089 Leave of court to sue after foreclosure, .... 1090-1096 Ejectment, 1097-1098 CHAPTEE XXXIII. FORECLOSURE BY ADVERTISEMENT. General policy of the statutes, 1099-1102 Practice before sale, 1103-1114 Notice of sale, 1115-1122 Sale, 1123-1129 Restraining the sale by injunction, 1130-1134 Setting aside sale, 1135-1138 Title of the purchaser, 1139-1143 Evidence of the foreclosure, 1144-1151 Costs, ... 1152-1153 Distribution of surplus, . 1154-1157 Obtaining possession, . . ^ .... 1158-1159 PAGES APPENDIX OF FORMS, . . 747-796 INDEX TO FORMS, 797 GENERAL INDEX, . . .... 801 WDEX TO CASES CITED. References are to Sections. Abbe V. Goodwin, 673. Abbott V. Allen, 600, 859, 863, 865, 869, 873. V. Banfield, 11 18. V. Curran, 728, 739, 926. V. Upton, 340. Abell V. Coons, 592. Abernethy v. Society of the Church of . the Puritans, 128. Abrahams v. Claussen, 671. Abrogast v. Hays, 410. Acer V. Hotchkiss, 444, 445. V. Merch. Ins. Co., 541. Ackene v. Winston, 628. Ackerman v. Hunsicker, 192, 201, 202, 466. Ackley v. Parmenter, 938. Adair v. Adair, 298. Adams v. Adams, 19. V. Beadle, 160, 164. V. Brown, 259. V. Essex, 818. V. Greenwich Ins. Co., 541. V. Niemann, 100. V. Sayre, 708, 990. Addison v. Gandassequi, 570. Adger v. Pringle, 294. Adkins v. Lewis, 253. ^tna Ins. Co. v. Tyler, 64, 559, 562. yEtna Life Ins. Co. v. Baker, 414. Agate V. King, 871, 874. Agawam Bank v. Strever, 99. Agricultural Ins. Co. v. Barnard, 143. Ahem v. Goodspeed, 324, 331. ■V. White, 286. Ahrend v. Odiorne, 43. Aiken v. Morris, 869. Ainsley v. Mead, 618. Ainslie v. Wilson, 374. Albany City Bank v. Schermerhom, 904. Albany City Savings Institution v. Burdick, 598, 850. Albany, etc., Co. v. Crawford, 19. Albany Fire Ins. Co. v. Bay, 606, 607. Albert v. Grosvenor Investment Co., 204. Alderson v. Ames, 286. Aldrich v. Lapham, 792. V. Reynolds, 160, 162, 645, 1 132. V. Stevens, 765. V. Willis, 456. Alexander v. Rea, 850. V. Walker, 929. Algur V. Gardner, 642. AUard v. Lane, 419. Allen V. Brown, 1 54. V. Cadwell, 492. V. Clark, 683. V. Dermott, 1084. V. Elderkin, 1021. V. Everly, 414. V. Franklin Ins. Co., 529. V. Fogg, 19. V. Jaquish, 204. V. Loring, 70. V. Moone)', 171. V. Poole, 134. V. Shackelton, 865. V. Vermont Mut. Fire Ins. Co., 543- V. Woodruff, 45. AUerton v. Belden, 665, 666, 667, 708. V. Lange, 302. Allison V. Armstrong, 29. V. McCune, 188. V. Schmetz, 645. Althouse V. Radde, 998. Alvis V. Morrison, 467. American Ins. Co. v. Oakley, 280, 784, 952, 966, 969, 976, 985, 996, ion. American Trust Co. v. North Belle- ville Quarry Co., 191. Amerman v. Wile, 121. Ames V. Richardson, 546. XVI INDEX TO CASES CITED. Bef&reTices are to Sections. Anderson v. Austin, 956,«iii2, 1127. w. Foulke, 995- V. Hubble, 436. V. Lauterman, 245, 252. V. Neff, 292. V. Tannehill, 60. Andrews v. Gillespie, 743, 746, 850. •v. Hubbard, 271, 680, 683. V. Monilaws, 618. V. Myers, 912. V. Schaffer, 607. V. Steele, 742. Andrus v. Vreeland, 364. Angel V. Boner, 364. Anketel v. Converse, 60. Anonymous, 801, 811. Anson v. Anson, 29. Archambue v. Green, 419. Argall V. Pitts, 885, 896. Armstrong v. Freeman, 637. V. Gilchrist, 847. V. McAlpin, 448. v. Murdock, 918. V. Short, 850. Arnold v. Crowder, 172. V. Curl, 858. ■V. Patrick, 58, 66, 67. V. Rees, 777. V. Stebenson, 105. Arnot v. E. R.R. Co., 565. V. McClure, 1148, 1149, ii5i. V. Post, 398. Artcher v. Douglass, 872. V. McDuffie, 99. Arthur v. Com'l and R.R. Bank, 114. Asay 7/. Hoover, 23, Asendorf w. Meyer, 231, 233, 818. Ashford v. Watkins, 608, Aspinwall z>. Balch, 531, 532. Astor V. Hoyt, 23, 26, 149, 155. ■V. Miller, 23, 155. V. Palache, 915. ■v. Romayne, 939. V. Turner, 885, 895, 896, 904, 1020. V. Westchester Gaslight Co., 122, 124. Atcheson v. Mallon, 993. Atherton v. Torrey, 338. Atkins V. Lewis, 22. Atkinson v. Duify, 1109. ■V. Hewett, 188. Atlantic Dock Co. v. Leavitt, 567, 575.. Atlantic Ins. Co. v. Storrow, 444, 562. Atlantic Savings Bank v. Hetterick, 1048. Atlantic Sav. Bk. v. Hiler, 1048, 1052. Atwood V. Bears, 492. V. Small, 738. Auble, Adm'r of, v. Trimmer, 633. Augier v. Schieffelin, 464. Aultman v. Jenkins, 261. 7/. McGregor, 293. Austin V. Chittenden, 878. V. Hall, 347. zi. Shaw, 2^9. V. Sprague M'f'g Co., 17. V. Trustees, etc., 782. Averill v. Guthrie, 292. V. Loucks, 109, 1053. V. Taylor, 352; 675, 676, 685, 703, 722, 728, 1105. Ayers v. Dixon, 577. V. Hays, 344. V. Probasco, 87. V. Rivers, 293. Aymar v. Bill, 26, 302. Ayres v. Adams, 452. V. Wattson, 212, 214. Babcock tj. Bridge, 203. V. Morse, 208. V. Utter, 166. Bache v. Doscher, 937, 1053. V. Purcell, 789, 911. Bacon v. Brown, 193. V. Cottrell, 682. zi. Goodnow, 448. v. Van Schoonhoven, 344, 418, 419, 458, 500. Badger v. Phinney, 856. Bailey v. Adams, 206. V. Alleghany Nat. Bank, 79. V. Bailey, 18, 674. z/. Crim, 478. ■V. Richardson, 371. V. Timberlake, 477. Baily v. Smith, 308. Bainbridge v. Richmond, 99. Baird z/. Jackson, 167, 279. Baker v. Clark, 262. V. Lorillard, 139. V. Mather, 494. V. Pierson, 1027. V. Terrell, 446, 577. V. Thrasher, 36, 40. V. Union Mut. Ins. Co., 327. V. Whiting, 29. Bakes v. Gilbert, 60. Baldwin v. Crary, 350. Ballin v. Dillaye, 566, 612. Baldwin v. Moffitt, 450. V. Norton, 341, 414. Ballou V. Taylor, 414. Referenax are to Sections. INDEX TO CASES CITED. XVll Bangs V. Duckenfield, 143. V. Mosher, 218. V. Strong, 213, 217. Bank v. Anderson, 436, 437. V. Arnold, 161. V. Bacharach, 792. V. Bryan, 308. V. Butterfield, 282. V. Eldridge, 342. V. Morsell, 192. V. Sav. Inst'n, 472. V. Sawyer, 492, V. Thayer, 381. V. Wentworth, 850. Bank for Savings v. Frank, 281, 297, 314, 384, 459. 493- Bank of Albion v. Burns, 212, 215, 220, 275. 394. 610. Auburn v. Roberts, 149. Commerce, Appeal of, 200. England v. Tarleton, 294. Lansingburgh v. Crary, 175. Montgomery County's Appeal, 200, 201. Munroe v. Culver, 332. Ogdensburgh v. Arnold, 885, 890, 945. Orleans ^'. Flagg,845,846,io54. Plattsburgh v. Piatt, 897. Rochester v. Emerson, 832. Rome V. Mott, 189. Royalton v. Gushing, 109. U. S. V. Davis, 384, 493. V. Winston, 444. Utica V. Finch, 93, 94, 192, 193, 195, 197, 203, 208, 212, 292, 389, 439, 897. Utica ■z/. Wager, 633. Banks v. Van Antwerp, 664. V. Walker, 751, 843, 859, 863, 1018. Banta v. Brown, 982. V. Garmo. 449. V. Maxwell, 979. Barber ■z'. Cary, 1127. V. Graves, 782. Barclay v. Blodgett, 300. Bard v. Poole, 743. V. Steele, 804, 964. Baring v. Moore, 933. Barker v. Bradley, 565. V. Bucklin, 565. V. Burton, 751, 776, 834, 843, 912. V. Flood, 337, 367. V. International Bank of Chi- cago, 879. Barlow v. Myers, 342. Barnaby v. Parker, 850. Barnard i). Bruce, 835, 910. V. Jennison, 248. V. Moore, 200. V. Onderdonk, 410, 837. Barnes v. Brown, 678. V. Camack, 423, 424, 431. V. Decker, 753. V. Mayor, etc., of New York, 152. V. Mott, 378, 433, 444, 448, 958. V. Stoughton, 948, 974. V. Wintringham, 340. Bamett v. Nelson, 248. V. Zacharias, 324, 649. Barney v. Myers, 386. Bamum v. Hempstead, 84. Barrett v. Carter, 16. V. Lewis, 52. V. Prentiss, 413. Barron v. Newberry, 732. V. Paulling, 251. Barry v, Hamburg-Bremen Ins. Co. 540. V. Merchants' Exch. Co., 1 14, 192. V. Ransom, 872. Barthet v. Elias, 652, 874. Bartlett v. McNeill, 1095. Barton v. May, 708, 717, 920. Bartow v. Cleveland, 690, 908, 914. Bascom v. Smith, 364. Baskins v. Calhoun, 878. Bassett v. Brady, 576, 602. V. Daniels, 308. Bates V. Delaven, 859. zi. Norcross, 478. V. The People's, etc.. Associa- tion, 261. V. Reynolds, 779. V. Rosekrans, 667, 874. Bathgate v. Haskins, 870, 871, 872, 915. Battell V. Torrey, 1 39. Bauer v. Pierson, 493. Baughman v. Gould, 865. Baum V. Grigsby, 69. Bay V. Williams, 602. Bayles v. Glenn, 308. V. Husted, 686, 690. Bayley v. Greenleaf, 66, 70, 288. Baxter v. Smack, 1089. Beach v. Cooke, 423, 424, 699, 709, 710, 716, 1083, 1098. V. Ruggles, 788. Beale v. Ryan, 1 5. Beals V. Neddo, 308. Bean v. Brown, 360. Bearce v. Barston, 637. xvm INDEX TO CASES CITED. Iteferencea are to Sections, Beard v. Smith, 1062. Beardsley v. Ontario Bank, 158. Bearss v. Ford, 30, 33. Beatty v. Brummett, 13, 24.. Bebee v. The Bank of New York, 312. Beck v. Tarrant, 53, 59; Beckenbaugh v. Nally, 999. Becker v. Howard, 691, 765. Beckham v. Drake, 570. Beckman v. Sikes, 160. Bedell v. Carll, 302. V. McClell'an, 1131. Bedford v. Backhouse, 478. V. Tupper, 470. Beecher v. Ackerman, 423, 424, 652, 666, 667, 708. V. Marquette & Pacific Roll- ing Mill, 122. V. Stevens, 105. Beekman Fire Ins. Co. v. First Metho- dist Episcopal Church, 1060. V. Gibbs, 948, 1044. Belden v. Meeker, 342, 497, 498. V. Slade, 692, 717. Belding v. Manly, 293, 301. Belknap v. Sealey, 865. Bell V. Birdsall, 1035. V. Day, 641. ■ V. Fleming, 200. V. Fleming, Exr., 193. V. Lent, 645, 646. V. Mayor of New York, 246, 256, 624, 682. V. Radcliff, 196. V. Tate, 843. V. Tenny, 365. Bellamy v. Brickenden, 264. Bellas V. McCarty, 458. Belmont V. Coman, 575, 596. V. O'Brien, 1004. Belloe V. Rogers, 750. Bement v. Plattsburgh & Montreal R.R. Co., 158. Bendy v. Townsend, 337. Benedict v. Oilman, 238, 255, 304, 682, 692, 698, 711, 717, 910, 920, 1030, 1027, 1077, 1082, 1142, 1 143. V. Hunt, 865. Benham v.. Rowe, 259. Benjamin v, Elmira, Jefferson & Can- andaigua R.R. Co., 834. Bennett v. Austin, 990. V. Bates, 878, 881. V. Cook, 630. V. Holt/ 38. Bennett v. Keehn, 879. V. Nichols, 433. V. Stephenson, 231. V. Wolverton, 17. Bennock v. Whipple, 16. Benson v. Sayre, 760. V. Stewart, 459. Bentley v. O'Brien, 19. V. Vanderheyden, 341, 592. Benton v. Barnet, 787. V. Nieholl, 15, 381. V. Sumner, 195. Berdan v. Sedgwick, 651, 658, 881. Berdell v. Berdell, 21, 24. Bergen v. Bennett, 698. V. Carmen, 1050. Bergens Savings Bank v. Barrows, 278. Bergen v. Urbahn, 305, 355, 813. Berkshire Life Ins. Co. v. Hutchings, 601. Bernhardt v. Lymburner, 965. Bernheimer v. Willis, 874. Berry v. Mutual Ins. Co., 43, 458. V. O'Connor, 96, 192. Berryhill v. Kirchner,'492. Besser v. Hawthorn, 364, 365. Best V. Brown, 569. Bethlehem v. Annis, 33. Bettison v. Budd, 28. Betts, in re, 204, 206. V. Birdsall, 1035. Betz V. Heebner, 300. Bevier v. Covell, 633. V. Schoonmaker,9i9, 1074, 11 54. Bicknell v. Byrnes, 832, 933, 938, 994. Biddle v. Brizzolara, 830. Bidwell V. Northwestern Ins. Co., 535. Bierce v. Red Bluff, 493. Bigelow V. Bush, 740, 742, 748, 853. V. Cassedy, 689. Biggins V. Brockman, 363. Bigier v. Waller, 238. Bill V. Fish, 634. :.. Hall, 731. Billington v. Forbes, 979. V. Wagoner, 218, 2ig, 662, 668. Billings V. Billings, 92. Bingham v. Kirkland, 478, 492. Binsse v. Paige, 575, 596. Bird V. Belz, 820. V. Keller, 23. Birdsall v. Patterson, 632, 649. Birke v. Abbott, 446, 590. Birmingham Iron Foundry v. Hatfield, 778. Birnie v. Main, 381. Eeferences are to Sections. INDEX TO CASES CITED. XIX Bishop V. Allen, 97, 466. V. Bishop, 166. V. Schneider, 464, 470. Bissell V. Bugbee, 576. V. Kellogg, 2CX3, 425, 665, 666, 669. Bixby V. Smith, 998. Black V. Kuhlman, 626. Blade v. Noland, 813. Blair v. Ward, 383, 384. Blake v. Dennett, 1109. Blakely v. Calder, 998, 1005. Blancke v. Rogers, 180. Blancow v. Bugby, 1 57. Blanco v. Foote, 1077. Blazey v. Delius, 944, 947. Bleeckerz/. Graham, 1154. Bliss V. Wallis, 917. Blodgett V. Hitt, 452. Blood V. Humphrey, 607. Bloom V. Burdick, 782, iioi. V. Noggle, 46, 487. Bloomer v. Mclnerny, 633. V. Sturges, 730, 744, 745, 1022. V. Waldron, 81. Bloomingdale v. Barnard, 408. Blossom V. R.R. Co., 924. Blumenthal v. Jassoy, 308. Blunt V. Norris, 321. V. Syms, 257, 259. Blydenburgh v. Northrop, 622, 1053, 1058. . Blyer w. Monholland, 216, 273, 572, 579. 591. 598. Board of Supervisors of Iowa Co. v. Mineral Point R.R. Co., 845. Board of Supervisors of Tompkins Co. V. Bristol, 350. Boarman v. Catlett, 444. Bockes V. Hathorn, 310, 335, 441, 917. Bodine v. Edwards, 969. Bodkin v. Merritt, 1027. Bogart, Matter of, 549. Bogert V. Bogert, 826. V. Furman, 1062. V. Hertell, 298, 299, 348. Bollesi'. Beach, 565. V. Carli, 284. V. Chauncey, 208, 501. V. Duff, 237, 716, 775, 835, 888, 889, 891, 902, 1030, 1076, 1077, 1083. V. Wade, 336. Boiling V. Munchen, 778. Bollinger v. Choteau, 731. Bolton V. Brewster, 235, 241. Bonesteel v. Sullivan, 848. Bonham v. Gallaway, 210. Bool V. Mix, 857. Boon V. Pierpont, 410. Booth V. Barnum, 95, 97, 476. V. Kehoe, 155. V. Packet Co., 245, 253, 264. V. Swezey, 332. Boqut V. Coburn, 675, 680. Bordewell v. Colie, 333. Borland v. Walrath, 462. Borst V. Boyd, 410, 696. V. Crommie, 49. ■V. Corey, 53, 341, 414. Boston Bank ». Chamberlin, 134. Boston & N. Y. Air-Line R.R. Co. v. Coffin, 159. Bostwick V. Frankfield, 364. V. McEvoy, 24. V. Menck, 794. Boswell V. Goodwin, 192, 199, 200, 201. Bosworth Tj. Vandewalker, 782. Bottineau v. Ins. Co., 1105. Boughton V. Smith, 648. Bowen v. Beck, 567. V. Bell, 193. V. Kaughran, 1051. V. Kurtz, 565, 576. V. Mandeville, 1089. Bowers v. Johnson, 44, 306. Bowery Nat. Bank v. Duncan, 22. Bowery Savings Bank v. Richards, 904. Bowes V. Seeger, 347. BowUng V. Cook, 344, 458. Bowman v. Manter, 443. Bowne v. Lynde, 274, 591, 960. Boyd V. Anderson, 850. V. Dodge, 913. V. Mundorf, 478. Boyle V. Williams, 740, 750, 800. Boynton v. Jack way, 1031. Bozarth v. Landers, 843, 844. Brackett v. Barney, 643. V. Baum, mi, 11 13. V. Sears, 193. V. Wyman, 993. Bradley v. Bosley, 54, 60, 71. V. Snyder, 1027. Brady z/. Waldron, 181, 183. Bragdon v. Hatch, 1 109. Brainard v. Cooper, 675, 685, 710, 730, 1028. Bram v. Bram, 751. Braman v. Bingham, 416. V. Dowse, 338. •v. Hess, 661. Bramhall v. Flood, 95. Brant v. Robertson, 38. XX INDEX TO CASES CITED. Beferetices are to Sectiona. Brasher v. Cortlandt, 995. Brasted v. Sutton, 287. Brazer v. Lancaster Bank, 292. Breckenridge v. Brooks, 248, 259. Breese v. Bange, 170, 1017. V. Busby, 976. Breevoort v. Mcjimsey, 145. Bremen -v. Whitaker, 172, 180. Brevoort v. Brevoort, 734, 736. V. Jackson, 953. V. Randolph, 261, 691. Brewer v. Staples, 273, 274, 571, 722. Brewster v. Games, 354, 498. V. Clamfit, 193. V. Wakefield, 98, 628. Brick V. Brick, 18, 674. Brickell v. Batchelder, 818. Bridge V. Hubbard, 652. Bridgeport v. N. Y. & N. H. R.R. Co., 114. Brigden v. Garhart, 292. Briggs V. Briggs, 978. V. Dorr, 300. V. Partridge, 570. Bright V. Piatt, 149. Brinckerhoff v. Thallheimer, 943. Brink V. Hanover Fire Ins. Go., 543. Brinkerhoff w. Brown, 702. V. Lansing, 211, 389, 495, 714,715, 1083, 1131. V. Marvin, 192, 200. Brinkman v. Jones, 236. Brinkmyer v. Browneller, 199, 200. V: Helbling, 195, 199. Brisco V. Earl of Banbury, 494. Briscoe v. Power, 273, 274. BriscoU V. Bronaugh, 69. Britton's Appeal, 290. Britton v. Hunt, 731. Bristol V. Morgan, 749. Brock way v. Wells, 717, 920. Broderick v. Smith, 231. Brodribb v. Tibbetts, 818. Broman v. Young, 155. Bronner v. Loomis, 505. Bronson v. LaGrosse & Milwaukee R.R. Co., 879. Brooklyn Park Com. v. Armstrong, 1000. Brooks V. Avery, 638, 647. V. Rice, 365. Brown v. Belts, 1 1 59. V. Brown, 727. V. Blydenburgh, 334, 354, 355. V. Byam, 60. V. Ghamplin, 633. V. Cherry, 1129. Brown v. Clifford, 18, 19. ■u. Dean, 1 5, 472. V. Delany, 1105. V. Dewey, 18, 19, 34, 35, 36, 38. V. Dickerson, 862. V. Frost, 698, 837, 954, 966, 969, 972. 973. 988, 1020. V. Gaffney, 21. V. Hermann, 612. V. Henry, 420. V. Johnson, 705. V. Johnston, 322. V. Jones, 13. V. Keeney Settlement Cheese Association, 181, 845. V. Kiefer, 192, 195. V. Lapham, 338, 364. V. Lynch, 13. V. Marzyck, 102 1, 1034. ■V. Mott, 661. V. Nichols, 784. V. Phillips, 27. V. Simons, 958. V. Smith, 1 142. V. Snail, 712. V. Volkening, 384, 492, 752, 845. V. Welsh, 1 1 36. V. Wilbur, 520. V. Willis, 830. Browning, in re, 1003, 1004. Brownlee v. Martin, 674. Bruce v. Bonney, 299, 445. Brundage v. Domestic and For. Mis,s. Soc, 751. 843- Brundred v. Walker, 338. Bruenich v. Weselmann, 328. Brumley v. Fanning, 183. Brunson v. Brooks, 492. Bruse v. Nelson, 433. Bryan v. Butts, 23, 1148, 1151. V. Howland, TJ. Bryant v. Damon, 294. V. Pennell, 160. V. Pollard, 337. V. Stephens, 48. V. Vix, 308. Bryer's Appeal, 364. Buchan v. Sumner, 104, 105, 1049. Buchanan v. Griggs, 135, 857. V. Life Ins. Co., 230, 895. Buck V. Phcenix Ins. Co., 529, 530, 531- V. Seymour, 158. Buckingham v. Corning, 667. Buckley v. Garrett, 557. V. Wells, 606. Bucklin v. Bucklin, 92, 100, 113, 837. ^ferences are to Sections. INDEX TO CASES CITED. XXI Buckmaster v. Kelly, 877. Buckout V. Swift, 184. Budd V. Van Orden, 22, 33. Buffalo Savings Bank v. Newton, 987. Buffalo Steam Engine Works v. Sun Mut. Ins. Co., 535, 536, 544, 555- Building Association v. Piatt, 205. V. Whitacre, 467. Bulkley v. Dayton, 347. V. Hope, 366. Bull V. Titsworth, 598. Bullard v. Raynor, 647, 648, 652. BuHwinkle v. Ryker, 793, 828. Bullock V. Battenhousen, 95. Bumpas v. Datson, 95. Bumpus V. Platner, 600, 859. Bunce v. Reed, liio, 1127, 1151. Bunker v. Anderson, 79. Burbank v. Gould, 577. V. Warwick, 308. V. Wiley, 105. Burchard v. Fraser, 865. V. Phillips, 1 06 1. Burdick v. Jackson, 46, 51. Burger v. Hughes, 46, 54, 377. Burhans v. Hutcheson, 308, 344. Burkam v. Burk, 77, 850. Burke v. Adair, 1 1 50. V. Nichols, 859. Burlingame v. Parce, 887. V. Robbins, 66. Burnet v. Denniston, 292, 402, 682, 685, 1 121, 1 122, 1 129, 1130. Burnett v. Pratt, 343, 721. Burney v. Lyman, 107. Bumham v. De Bevorse, 731. Burnhisel v. Firman, 628. Burns v. Collins, 546. V. Thayer, 391. Burr V. Beers, 576, 582, 583, 585. V. Veeder, 261, 448, 691, 809. Burrall v. De Groot, 667. ' Burroughs v. Reiger, 758, 760. Burrs v. Burrs, 291. Burt V. Dewey, 333. V. Saxton, 204, 206. Burtis' Adm'r v. Wait, 341, 610. Burton v. Reagen, 436. Buse V. Page, 31. Busenbarker v. Rainey, 850. Buswell z'. Poineer, 391. Bush V. Bush, 96, 850. V. Cooper, 29. V. Lathrop, 310, 312, 317, 318, 319- V. Livingston, 671. V. Sherman, 971. Bush V. White, 28. Bunn V. Vaughan, 724. Butcher v. Stultz, 1 3. Butler v. Blackman, 818. V. Miller, 212, 373, 393. V. Page, 167. V. Price, 413. V. Tomlinson, 758, 760. V. Viele, 487, 1028. Butterfield v. Okie, 66. Butterworth v. O'Brien, 663. Butts V. Broughton, 48, 251. V. Peacock, 96. Cabeen v. Breckenridge, 492. Caconillat v. Rene, 468. Cadman v. Peter, 19. Cady V. Jennings, 87. V. Sheldon, 298. Cage V. Her, 293. Cain V. Hanna, 293. Calhoun v. Lumpkin, 33, 235. Calkins v. Calkins, 415. V. Isbell, 415, 696, 710, 920. V. Munseli, 713. Galium V. Branch Bank of Mobile, 455. Calvo V. Davis, 216, 217, 446. Cambridge Valley Bank v. Delano, 494. Camden v. Alkire, 17. V. Vail, 60. Cameron v. Chappell, 638. V. Irwin, 700, 11 29. Camp V. Coxe, 1086. Campbell, Matter of, 341. . V. Campbell, 266. V. Dearborn, 15, 38. V. Hall, 773. V. Macomb, 186, 205, 943, 944- V. Roach, 71. V. Smith, 576, 587, 1093. V. Swan, 972, 1125. V. Trotter, 433. V. Vedder, 360, 364, 365, 497, 498- Campion v. Kille, 290. Canal Appraisers v. The People, 126. Canal Commissioners v. The People, 126. Canandaigua Academy v. McKechnie, 26, 464. Candee I/. Burke, 11 18, 11 37, 11 38. Candler v. Pettit, 794. Canfield v. Shear, 565. Cannon v. Kriepe, 274. V. McNab, 15. Capehart v. Biggs, 11 30. XXI 1 INDEX TO CASES CITED. B^erences are to Sections. Capehart v. Dettrick, 229, 414. Card V. Bird, 621. Carey v. Rawson, 13. V. Reeves, 850. Carley v. Fox, 567. Carlisle v. Wilkin's Admr., 341. Carleton v. Jackson, 338, 363. Carman ,v. Pultz, 347, 403. V. Trude, 333. . Carmichael v. Adams, 847. Carnahan v. Tousey, 601. Carow V. Kelly, 647. Carpenter v. Black Hawk Gold Min- ing Company, 100, 1 14, 123, 1104, 1133. V. Blote, 200. V. Bowen, 23. v. Brenham, 1027. V. Longan, 308, 310, 315. V. Manhattan Life Ins. Co., 191. V. O'Dougherty, 42, 302, 303, 324, 720. V. Providence - Washington Ins. Co., 531. V. Walker, 178. Carper v. Hunger, 298. Carr v. Carr, 13. Carradine v. Wilson, 645. Carriage Co. v. Kinsella, 672. Carrington v. Brentz, 766. Carroll v. Deimel, 776. Carson v. Byers, 96. V. Ingalls, 671. Carstan v. David, 608. Carter v. Goodin, 620. V. Holahan, 590. V. Rockett, 546. V. Walker, 626. Caruther v. Hall, 274. Cary v. Bancroft, 360. V. White, 482. Caryl v. Williams, 303, 874. Case V. Carroll, 678. V. Hall, 333. V. Peters, 19. V. Price, 736. Casenove v. Cutler, 259. Casey v. Buttolph, 235, 367. Cashman v. Henry, 566, 590, 612. V, Martin, 400, 962. Cason V. Chambers, 413. Cassidy v. Schedel, 215. Catlin V. Grissler, 936. V. Harned, 912. Catterlin v. Armstrong, 1028. Caulkins v. Bolton, 724. Cawley v. Kelley, 847. Cavander v. Bulteel, 105, 106. Cazet V. Hubbell, 967, 995. Central Gold Mining Co. v. Piatt, 123, "33- Central National Bank of New York v. Clark, 987. Cerf t/. Ashley, 718. Chadborn w. Rahilly, 281. Chafee v. Fourth Nat. Bank, 17. Chalmers v. Turnipseed, 933. ?/. Wright, 25s, 698, 711, 1 1 50. Chamberlain v. Beck, 787. V. Choles, 1037. V. Dempsey,652, 667,913, 928. Chamberlin v. Lyell, 741, 751, 823. Champion v. Brown, 66, 67. Champlin v. Laytin, 866. Champney v. Coope, 336, 337, 364, 441, 443- 444- Chandler v. Chandler, 71. V. Dyer, 292, 675. V. White, 345. Chapin v. First Universalist Church, 299. V. Thompson, 659. Chapman v. Chapman, 345. V. Draper, 765. V. Foster, 614. V. Jenkins, 208, 2H. V. Liggett, 52, 58. V. Robertson, 870. V. West, 765. Charter v. Stevens, 11 29. Chase v. Box, 362. Chase's Case, 38. Chase v. Ewing, 103. V. Peck, 47, 64, 74, 235, 241, 445, 699. V. Steel, loj. V. Welsh, 488. V. Wingate, 165. V. Woodbury, 274. Chautauqua Bank v. White, 328. Chateau v. Thompson, 439. Chauncey 7/. Arnold, 87. Cheesebrough v. Millard, 277, 382, 383, 449- Cheney v. Woodruff, 531, 1020. Cherry v. Monro, 274, 571, 685, 722. Chesebro v. Tilden, 635. Chester v. Bank of Kingston, 99. V. King, 742. Chesterman v. j^ardner, 859. Chew V. Brumagen, 743. Ee/erences are to Sections. INDEX TO CASES CITED. XXIU Cheww. Chew, 431. Chicago Lumber Co. v. Ashworth, 86. Chicago R.R. Co. v. The People, 1 14. Chiekering v. Faile, 29. Childs V. Childs, 238, 1027. Chiles V. Wallace, 163. Chipman v. Tucker, 91. Chittenden v. German- Amer. Bank,i 1 1 . Cholmondeley v. Clinton, 713. Choteauz/. Thompson, 199, 209. Christian v. Cabelt, 1 001. Christie v. Herrick, 743. Christner v. Brown, 215. Christy v. Fisher, 29. Christopher v. Christopher, 65. Church V. Brown, 1 57. V. Gilman, 90, 568. V. Kidd, 908. V. Maloy, 219, 668, 671. City Council of Charleston v. Ryan, 345- City National Bank and York County National Bank, Appeals of, 286. City of Norwich v. Hubbard, 149. Claubaugh v. Byerly, 281. Claflin v. Ostrom, 298. V. Reese, 232. Clark V. Binninger, 885. V. Brown, 284, 287. V. BuUard, 282. V. Bush, 243. V. Clark, 367. V. Cleveland, 774. V. Dales, 206. V. Davis, 867. V. Disson, 324. V. Finlan, 247. V. Fontain, 381. V. Hall, 52, 288. V. Harens, 769. v. Henry, 18, 674. V. Iglestrom, 305, 355. V. Lyon, 16. V. Mackin, 448, 500. V. Munroe, 286, 621. V. Rayburn, 191. [v. Reyburn, 736. V. Robins, 259. V. Rowling, 380. V. Sickler, 226, 594. V. Sisson, 326. V. Smith, 253, 256, 259. V. Wat.obn, 472, Clarke v. Roberts, 319. V. Sheehan, 634. Clark's Case, 1060. Clarkson v. Read, 995. Clarkson v. Skidmore, 1057. Clary v. Owen, 174. Clason V. Corley, 885, 1020. V. Morris, 444. Claverly v. Phelp, 736. Clay V. Banks, 338. V. Hildebrand, 792, 850. Cleaver v. Green, 1137. Clemens v. Clemens, 736. Clement's Ex'rs v. Bartlett, 477. Clementson's Ex'r v. Streeter, 859. Cleveland v. Boerum, 732, 755, 765, 857. Clevinger «<. Ross, 492, 1135, 1137. Clift V. Nay, 436. V. White, 364, 367. Clinie v. Wood, 166. Clinton v. Hope Ins. Co., 555. Clove V. Lambert, 166. Clowes V. Dickinson, 271, 280, 958, 965. Clute V. Emmerich, 448, 467, 477, 930. V. Robison, 310. V. Voris, 1014. Coari v. Olsen, 492. Coates V. Cheever, 624, 625. Cobb V. Dyer, 431, 436. V. Thornton, 830, 832. V. Titus, 661. Coburn v. Anderson, 36, 37. Cochran v. Flint, 180. Coddington v. Bispham, 896. Coe, Trustee, z>. Pennock, 158. Coffey V. Hunt, 24. Cogswell V. Cogswell, 57, 268. Cohn V. Colby, 341. V. Hoffman, 365. Cohoes Co. V. Goss, iioi, 1105, 1148. Coit V. Fougera, 62. V. Houston, 398. Colburn v. Morton, 990. Cole V. Bausemer, 647. V. Duncan, 341. v. Germania Fire Ins. Co., 545. V. Hall, 143. ■V. Malcolm, 378, 447, 448, 685. V. Moffitt, noi. V. Sackett, 212, 376, 391. V. Savage, 653, 667, 11 30. Colehour v. State Savings Institution, 149. Coleman v. Eraser, 136, 449. V. Manhattan Beach Imp. Co., 79- V. Post, 99. V. Van Rensselaer, 103, 303. Coles V. Appleby, 274, 336, 441, 958.. V. Coles, 23, 1 10, 620. XXIV INDEX TO CASES CITED. Seferences are to Sections. Coles V. Forrest, 736. z/. Marble, 15. Colgrove v. Tallman, 594, 723. Collahan v. Linthicum, 557. Collard v. Huson, 281, 293. Colliers. Faulk, 192, 194. V. Whipple, 964, 966, 983. Collins, /« re, 827, 1092. V. Carlile, 193. Collins' Petition, 7501 Collins V. Riggs, 692. V. Rowe, 571, 573, 596, 878. V. Standish, 11 53. V. Torry, 338, 363, 620, 624. CoUis V. Day, 134. CoUumb V. Reid, 104. Columbia Bank v. Jacobs, 433. Columbia Ins. Co. v. Lawrence, 546. Colwell V. Woods, 15. Coman v. Lakey, 51, 121. Combs V. Hawes, 18. Comer v. Allen, 609. Commercial Bank 7/. Cunningham, 192, 193- Commercial Ins. Co. v. Spankneble, 540. Commissioners of the United States Deposit Fund v. Chase, 528. Commonwealth v. Councils of Pitts- burgh, 331. Comstockw. Drohan, 567,577,591,1093. Concklin v. Hall, 1005. Concord Union Mut. Ins. Co. v. Wood- bury, 552, 555. Condit V. Baldwin, 641. Cone 2/. Combs, 887. Conger v. Duryee, 1027. V. Lancaster, 103. V. Ring, 990. Congregation Beth-Elohim v. Central Presbyterian Church, 128. Conkling v. Secor Sewing Machine Co., 118, 122, 881. Connard v. Colgan, 90. Connecticut v. Jackson, 630. Connecticut Mut. L. Ins. Co. v. Bul- tee, 29. Connecticut Mut. L. Ins. Co. v. Tyler, 593- Connelly v. Dickson, 885. Connor v. Eddy, 27. Conover v. Hobart, 640. V. Mut. Ins. Co., 540. Conrad v. Atlantic Ins.' Co., 192. Conroy v. Fuller, 309. Constant v. American Home Mission Societyi 493. Conway's Ex'rs v. Alexander, 31,33, 4°- Conwell V. McCowen, 89. Cook v. Banker, 65, 289. V. Barnes, 670. V. Clark, loi. V. Craft, 261, 289, 291. ■V. Culbertson, 252, 255. V. Kraft, 65. V. Mancius, 1066. V. Ottawa University, 253. V. Shone, 282. V. Travis, 478, 479, 480, 491, 492. Coolidge V. Brigham, 333. Coombs V. Jordan, 94. Cooper V. Bigly, 383. V. Brook, 15. V. Foss, 576, 851. V. Hornsby, 1128. V. Jackson, 29. V. Newland, 298, 302, 304. Cope V. Wheeler, 76, 644, 645, 881, 1062, 1154. Coppin V. Fernyhough, 494. Corbett v. Woodward, 308. Cord V. Hirsh, 742. Cordova v. Hood, 60, 61, 68. Cordts V. Hargrave, 569. Corley v. Lashley, 950. Corlies v, McLagin, 167, 172. Corn Exchange Ins. Co. v. Babcock, 6i6, 618. Cornell v. Corbin, 865. V. Hall, 31, 38. v. Fresco tt, 216, 273, 579, 591, 592, 723- V. Woodruff, 28, 934. Corner v. Sheehan, 896, 990. Corning z/. Smith, 751, 834, 843, 1018, 1054. Cornish v. Abington, 345. Cornog V. Comog, 620. V. Fuller, 344, 458. Corpman v. BacCastow, 472. Corwin v. CoUett's Ex'rs, 369. V. Wesley, 333. Costello V. Mead, 345. Coster, Matter of, 355, 837. V. Clarke, 998. Costigan v. Newland, 11 54. Cottrell's Appeal, 447. Couch V. Millard, 908. Coulton zi. Jackson, 446. Coursen v. Canfield, 867. Courser's Will, 731. Coutant V. Servoss; 81, 275, 387, 388, 856. Covell V. The Tradesmen's Bank, 317. References are to SecUmis. IKDEX TO CASES CITED. XXT Coudrey v. Carpenter, 960. V. Coit, 600, 862. Cowley V. McLaughlin, 477. V. Shelby, 79, 98, 448. Cox V. Esteb, 850. V. Hoxie, 202. V. McBurney, 1062. V. Ratcliffe, 24. I/. Wheeler, 446, 722, 944, 1 127, 1 128. Coy V. Downie, 858. Coyle V. Davis, 19, 381. Craddock v. Thurley, 1006. Crafts V. Aspinwall, 59. Craig V. Parkis, 227, 298. V. Tappin, 193, 197, 200, 203. Crain v. McGoon, 396, 398. Cram v. Bradford, 805. V. Hendricks, 661. Cramer v. Benton, 876. V. Lepper, 652, 878. Crane v. Board, etc., 60. V. Bonnell, 38. V. De Camp, 1 5, V. Deming, 199. V. Evans, 354. V. Hubbel, 671. V. McDonald, 707. V. Stiger, 979. V. Turner, 50, 76, 297, 314, 458, 459. 479. 498. 500- V. Ward, 228. Craver v. Wilson, 883. Crawford v. Edwards, 567. Cremer v. Higgin'son, 360. Crippen v. Morrison, 180. Critcher v. Walker, 36. Crippen v. Culver, 1005. V. Heermance, 54, 377, 632, 649, 670, 671. Crocker v. Crocker, 312. V. Whitney, 132, 362. Croft V. Bunster, 308, 310. Crofts V. Crofts, 680. Crofut V. Wood, 494. Crogan v. Spence, 75 1; Croghan v. Livingston, 782. ■v. Miner, 72. Cromwell v. The Brooklyn Fire Ins. Co., 546, 5SS. V. Hull, 937. Crooke v. O'Higgins, 742. Crooker v. Holmes, 414, 712. Crowe V. Lewin, 599. Crowell V. Currier, 604. V. Hospital, etc., 604. CuUinick v. Swindell, 174. CuUum V. Erwin, 294. Culver V. Badger, 569, 598. V. Bigelow, 638. V. Harper, 621. V. Sisson, 103. Cumberland v. Codrington, 266. Coal Co. V. Hoffman, 990. Co. V. Sherman, 990. Cunningham v. Buckingham, 492. V. Cassidy, 280, 950, 952, 976. V. Knight, 286. Cupfer V. Frank, 832. Currie v. Cowles, 876. Curry v. Schmidt, 167. Curtis V. Bush, 600, 859, 862. V. Flinn, 97. v. Gooding, 1027. V. Hitchcock, 759, 769. V. Leavitt, 663. ■V. McDougal, 134. V. Root, 284. V. Tyler, 575, 579, 749, 829. V. Williamson, 570. Curtiss V. Tripp, 395. Cushman v. Luther, 99. Cuthburt V. Haley, 645. Cutler V. Ammon, 70. V. Davenport, 76, 298. Cutting V, Lincoln, 1064. Cutts V. Guild, 319, Dailey v. Abbott, 235. Daily v. Kingon, 789, 823. Dale V. McEvers, 261, 685, 691. Daly V. Burchell, 742, 761. V. Jacott, 941. Daniel v. Coker, 245. Danner Land & Lumber Co. v. Ins. Co., 19. Danzeisen's Appeal, 13. Darby v. Freedman's Savings, etc., Co., 610. Darcy v. Blake, 892. Darling v. Rogers, 84. Darst V. Bates, 208, 281. V. Gale, 193, 439. Dart V. McAdam, 873. Darvin v. Hatfield, 716. Dauchy v. Bennett, 685, 687, 688. Daughady v. Paine, 68. Davenport v. Cummings, 96. V. Shants, 178, 180. V. Turpin, 731, 836. V. Widowell, 850. Da\ idrow v. Westchester Gaslight Co., 124. XXVI INDEZ TO OASES CITED. Beferenc&i are to Sections. Davies v. Austin, 310, 649. Davis V. Barr, 310. V. Bean, 261. V. Bechstein, 310, 322, 847. V. Clarlc, 865. V. Dendy, 258, 259. V. Dresback, 13. V. Duffie, 705, 717. V. Eastham, 18. V. Fargo, 362. V. Hamilton, 68. V. Hardy, 593. V. Hulett, 567. v. Ins. Co., 544. ' V. Maynard, 390. V. Pearson, 66. V. Winn, 682. Davison v. De Freest, 864, 1062. Daws V. Craig, 436, 437. Day v. Mooney, 364, 568. V. Perkins, 42, i66, 173, 790. V. Strong, 400, 406, 409, 686, 692. Dayhuff v. Dayhuflf, 72. , Dayton v. Melick, 865. Dean v. Anderson, 46. V. Applegarth, 230. V. Walker, 590. Deane v. Hutchinson, 458. Dearborn v. Cross, 204. De Armond v. Preachers' Aid Soc.,625. Decker v. Boice, 483, 498, 500, 1 1 14, 1129, 1 141. V. Clarke, 458. De Forest v. Farley, 948, 1005, 1017, 1044. V. Fulton Fire Ins. Co., S46. Degerraand v. Chamberlin, 569. De Grant v. Graham, 1083. Dela V. Stanwood, 249. Delacroix v. Bulkley, 204. Delancey v. Stearns, 314, 482. Delaplaine v. Lewis, 742. De Lashmitt v. Sellwood, 1028. De la Vergne v. Evertson, 911, 919. Delaware Bank v. Jarvis, 333, 746. D. & H. Canal Co. v. Bonnell, 879. Del., L. & W. R.R. Co. v. Burkhard, 213. V. Scranton, 969. Delespine v. Campbell, 731. De Leuw v. Neely, 809. De Lisle v. Herbs, 365. Demainville v. Mann, 155. Demaray v. Little, 979. Demarest v. Berry, 251. V. Wynkoop, 695, 1 105, 1 140, 1 149, 1150. Demott V. Stockton Paper Ware Mfg. Co., 455. Den V. Wright, 235. Denham v. Cornell, 1062, 1064. Denick v. Hubbard, 223. V. N. Y. & R. Lime, etc., Co., 1 22. Denning t/. Smith, 519, 520, 521, 522, 523- Denston v. Morris, 859. Denton v. Cole, 337. V. Nanny. 622, 730, 731, 1058. V. Noyes, 784. Depew V. Dewey, 971, 1137. De Pierras v. Thorn, 47. De Ruyter v. St. Peter's Church, icxs, 114, 127, 1053, 1071. Despard v. Walbridge, 18. De Stuckle v. Tehuantepec R.R. Co., 917. Detweiler v. Breckenkamp, 228. Devitt V. Sullivan, 1020. Devlin v. Murphy, 601. V. Shannon, 656. Dewey v. Brownell, 253, 256. V. Ingersoll, 384. De Witt V. Brisbane, 883. V. Van Sickle, 310, 321. De Wolf z/. Capital City Ins. Co., 537. V. Johnson, 632, 652, 653. V. Sprague Mfg. Co., 17. Dey V. Dunham, 16, 472, 487. Deyermand v. Chamberlain, 598. Dezell V. O'Dell, 327. Dias V. Merle, 705, 707. Dial zi. Reynolds, 72. Dibblee v. Mitchell, 17. Dick V. Ins. Co., 530, 562. V. Livingston, 680. V. Maury, 455. Dickason v. Williams, 363. Dicke V. Wright, 87. Dickerman v. Lust, 767. Dickerson v. Small, 929. V. Tillinghast, 482. Dickey v. Land Co., 672. Dickinson v. Codwise, 610. V. Dickey, 926. Dickson v. Chorn, 275. V. Frazer, 935. Dietz V. Farish, 917. Dillaye v. The Commercial Bank of Whitehall, 319. Dillon V. Anderson, 384, 493. Dime Savings Bank of Brooklyn v. Crook, 842. Dimon v. Bridges, 230. V. Dann, 230, 475. Beferences arc to Sections, INDEX TO CASES CITED. XXVll Dingley v. Bank of Ventura, 49, 58. Dings V. Parshall, 407, 448, 675. Dinkelspeil v. Franklin, 329. Distilled Spirits, The, 384, 493. Divinger v. Branigan, 52. D'lverness v. Leavitt, 143. Dix V. Van Wyck, 647, 657. Doctor V. Smith, 844. Dodd V. Neilson, 17, 731, 998. V. Parker, 461. Dodge V. Crandell, 204, 205, 847. V. Perkins, 98. V. Wellman, 13. Doe V. Beavan, 157. V. Carter, 157. V. Hogg, 157. V. Vallajo, 850. Doherty v. Stimmel, 487. Dollard v. Taylor, 987. Dolman v. Cook, 644. Donnington v. Meeker, 639. Dohohue v. Chase, 247. Doody V. Pierce, 360. Dooley v. Potter, 681. Doolin V. Ward, 993. Doolittle z/. Lewis, 351, 352, 727,728, 1099, 1 100, 1 105, 1 129. Dorn V. Harrahan, 575. Dorr V. Dudderar, 181. V. Leach, 843. V. Peters, 565, 571, 577. Doty V. Baker, 623. Doubleday v. Kress, 354. Dougherty v. Colgan, 34, 255. Douglas V. Bishop, 381. Douglass V. Cross, 572. V. Durin, 342. V. Houston, 1062. V. Peele, 281, 460. ■V. Satterlee, 299, 348. V. Wells, 602. V. Woodworth, ion, 1057. Dowe V. Schutt, 638. Dows V. Congdon, 713, 987. V. Morewood, 361. Downard v. Groff, 160. Downer v. Fox, 448. V. Smith, 29. Downing v. Marshall, 916. Downs V. Hopkins, 990. Doyle V. Peerless Pet. Co., 480. Dozierz'. Mitchell, 251, 850, 990. Drake v. Barker, 493. V. Wright, 467. Draper v. Mann, 381. V. Romejm, 218. V. Stouvenel, 613. ; Draper v. Trescott, 219, 662, 668. Drew V. Lockett, 444. Drexell v. Tyrrell, 884. Driggs V. Simson, 378. Drury v. Clark, 742, 748, 792. Dubois' Appeal, 300. Dubois V. Hull, 56, 61, 71. V. SchafFer, 43 1 . Duboisson v. Folkes, 218. Dudgeon v. Smith, 1074. Dudley v. Bergen, 431. Duff, Matter of, 987. Duffy V. McGuinness, 365. Dukes V. Turner, 681. Dumell V. Ferstagge, 208. Duncan v. Dodd, 973, 984, 986. V. Miller, 850. Dunham v. Cudlipp, 638. V. Dey, 208, 389, 390, 472. V. Minard, 410, 1004. Dunkley v. Van Buren, 827. Dunlop V. Avery, 459, 546, 547. Dunn V. Parsons, 388. V. Snell. 29. Dunning w. Fisher, 599, 600, 861, 1027. V. Leavitt, 242, 599, 600, 861. V. Merrill, 645. V. Ocean Nat. Bank, 1062, 1063, 1 1 57. Dunshee v. Parmelee, 208. Durant v. Kenyon, 79. Durham v. Bischoff, 602. Durkee v. Nat. Bank of Fort Edward, 482. Dusenbury v. Hurlburt, 121, 284, 287, 856. Dutch Church v. Mott, 126, 128. Dutton V. Ives, 308. Duval 7/. Covenhoven, 464. Du Val V. Johnson, 86. Dyett V. Pendleton, 862. Dwight V. Newell, 65. V. Phillips, 765, 1014, 1 1 50, 1151. V. Webster, 228, 231. Eagle Beneficial Society Appeal, 465. Eagle Fire Ins. v. Cammet, 734, 736. V. Pell, 261, 374, 691. V. Lent, 135, 730, 751, 843.857,859, 1018, 1054. Eagle Ins. Co. v. Flanagan, 1039, 1042. Fames v. Hardin, 18. Earle v. David, 1094. V. Hammond, 671. Earnshaw v. Stewart, 414. xxnu INDEX TO CASES CITED. Seferences are to Sections. Eastburn v. Kirk, 908. Eastman v Shaw, 639. V. Thayer, 712. Easton v. PickersgiU, 935, 936. Eaton V. Jaques, 155. V. Simonds, 259. V. Truesdail, 98. Eaves v. Estes, 178, 180. Eckford v. De Kay, 19. Eckerson v. VoUmer, 781. Eckert v. McBee, 40. Eddy V. Graves, 204. V. Traver, 277, 382. Edgerly v. Emerson, 444. Edrington v. Harper, 33, 38. Adm'r, v. Heffner, 427. Edwards v. Bodine, 859, 864. V. The Farmers' Fire Ins. & Loan Co., 398, 701, 1098. V. McKernan, 458. V. Wall, 19. Eggeman v. Harron, 295. Eiland v. Radford, 38. Eitel V. Bracken, 324, 328. Eisenberg v. Albert, 215. Elder v. Rouse, 103. Eleventh Avenue, Matter of opening, 150. Eleventh Ward Savings Bank v. Hay, 281. Elias V. Verdugo, 844. Elliot Five Cents Savings Bank v. Commercial Union Assurance Co., 557- Elliot V. Plattor, 60. V. Wood, 16, 669, iioi, 1126, 1 129, 1133. Ellis, Adm'r, v. Lemine, 294. Ellis V. Horrman, 490. V. Johnson, Trustee, 567, 602. V. Kreutsinger, 546. V. Lindley, 431. V. Messervie, 310. Ellison V. Pecare, 959. Ellsworth V. Lockwood, 407, 444, 687, 688, 722, 951, 954, 95^,1125,1127. Elmendorf v. Lockwood, 742. Elmer v. Leper, 259. Elsberry v. Boykin, 90. Elston V. Piggott, 991. Elwell V. Chamberlain, 662. V. Grand St. ^ Newtown R.R. • Co., 159. V. Robbins, 919, 1074, Elwood V. Diefendorf, 220. V. Woolcott, 228. Ely V. Bush, 343. Ely V. Ely, 562. V. McNight, 310, 565, 592. V. Scofield, 334, 418, 421, 498. V. Wilcox, 492. Emanuel College v. Evans, 8. Emerson 7/. E. & N. A. R.R. Co., 159. Emery v. Gordon, 355. Emigrant Ind. Sav. Bank v. Clute, 456, 843- Emigrant Ind. Sav. Bank v. Goldman, 741, 751, 843, 844, 1018, 1019, 1053, 1054. Emmons v. Hindman, 102, 181. Empire City Bank, Matter of, 143. Endel^'. Walls, 15, 238. English V. Carney, 293, 294. Engle V. Haines, 274. V. Underbill, 1096. Ennis v. Harmony Fire Ins. Co., 552. Enos V. Sutherland, 22. Ensign v. Colburn, 162, 181. Ensworth v. King, 90. V. Lamberts, 730, 852. Equitable Life Ass. Sy. v. Bostwick, 573- Equitable Life Ass. Sy. v. Cuyler, 667, 874. Equitable Life Ass. Sy. v. Stevens, 827 1091, 1095. Erie County Savings Bank v. Roop, 275. Erskine v. Townsend, 24. Erwin v. Shuey, 86. Esterly v. Purdy, 99. Estevez v. Purdy, 642. Etna Ins. Co. v. Finch, 721. Etzler V. Evans, 436. Evans v. Ellis, 310. Evans Gaslight Co. v. State ex rel. Reitz, 379. Evans v. Kimball, 365. V. White, Adm'r, 290. Everitt v. Huffman, 815. V. Strong, 298, 299. Evert V. McBee, 33. Evertson v. Booth, 279, 300. V. Central Bank, 449. V. Evertson, 310, 482. V. Johnson, 928. V, Sawyer, 155. V. Tappen, 624. Excelsior Fire Ins. Co. v. Royal Ins. Co. of Liverpool, 530, 544, 556, 559, 560, 562. Exchange Fire Ins. Co. v. Early, 806, 810. Eyster v. Gaff, 732. References are to Sections. INDEX TO CASES CITED. X3XX Fagen v. Davison, icxo. Fair v. Brown, 29. Fairbank v. Cudworth, 185. Fairchild v. Lynch, 363, 567, 572, 596. V. Fairchild, 104, Fairfield Savings Bank v. Chase, 493. Fake v. Eddy, loi. v. Smith, 333. Falis v. Conway Ins. Co., 678. Falkner v. Printing Co., 889, 896, 913. Fanning v. Dunham, 665, 666, 709. Fanshawe v. Lane, 112. Fargo V. Ames, 105. Farmer's Loan and Trust Co. v. Car- roll, r;. Farmer's Loan and Trust Co. z>. Dick- son, 758, 760. Farmer's Loan and Trust Co. v. Hen- drickson, 158. Farmer's Loan and Trust Co. v. Maltby, 287, 458, 480. Farmer's Loan and Trust Co. v. Mil- lard, 919. Farmer's Loan and Trust Co. v. Sey- mour, 964, 1039, 1042. Farmer's Loan and Trust Co. v. Wal- worth, 357, 420, 422. Farmer's National Bank of Salem v. Fletcher, 333. Farnham v. Mallory, 829. Farrar ■z'. Chauffetete, 170. Fassett v. Mulock, 271, 298. V. Smith, 196, 431, 436. Faulkner v. Overturf, 790. Faure v. Winans, 261, 264, 548, 554, 691, 809. Fay V. Grimsteed, 664. V. O'Neill, 774. V. Valentine, 712. Feeters v. Lamborn, 216. Feldman v. Beier, 304, 360, 391. V. Gamble, 92. Fellows V. Commissioners of Loans of Oneida County. 641 . V. Harrington, loi. V. Longyor, 642. V. Prentiss, 214. Fells V. Barbour, 29. Felton V. Brooks, 555. V. Smith, 60. Fenno v. Sayre, 478. Ferdon v. Miller, 608. Fergus v. Wilmarth, 557. Ferguson v. Crawford, 784, 834. V. Ferguson, 817. V. Hamilton, 324. V. Kimball, 897, 958, 1 104. Ferguson v. Smith, 781. V. Wagner, 400. V. Wooley, 1153. Ferrer v, Pyne, 859, 869. Ferris v. Crawford, 216, 273, 591, 722. V. Ferris, 228, 231. V. Hendrickson, 358. V. Houston, 24, 235. Fessler's Appeal, 194. Foster v. Townshend, 904. Fetes V. O'Laughlin, 97. Fiacre v. Chapman, 262. Fiedler v. Darrin, iS, 37, 632, 633, 649. 664. Field V. Hawxhurst, 1065. Fielder v. Varner, 1 1 54. Fields V. Helms, 710. Finley v. Simpson, 567, 575. Firestone v. The State, 1053. First National Bank v. Essex, 369. V. Hayzlett, 290. First National Bank of Batavia v, "Tar- box, 109. First National Bank of Canandaigua v. Garlinghouse, 618. First National Bank of Corry v. Stiles, 320. First Nat. Bank of Paterson v. Byard, 196. First Nat. Bank of Waterloo v. El- more, 133. Fish V. Dodge, 565. V. French, 308. V. Hay ward, 204, 216. V. Howland, 60, 67. Fisher v. Beckwith, 89. V. Hepburn, 143. , V. Hersey, 980, 987, loio. V. Johnson, 448. Fisher's Ex'r v. Mossman, 495. Fisk V. Duncan, 860. V. Potter, 58, 67, 68, 288. Fiske V. Tolman, 571, 573. Fitch V. Cotheal, 338, 363, 610. V. Forman, 347. V. Remer, 644. V. Wetherbee, 17. Fitchburg Savings Bank v. Amazon Ins. Co., 533. Fithian v. Corwin, 298. Fitzsimmons v. Beam, 632. Flagg V. Mann, 34, 490, 492. V. Munger, 446, 595, 601. Fleischauer v. Doellner, 594. Fleischman v. Stern, 324, 649. Fleiss V. Buckley, 1043, 1050, 1062. Fleming v. Burnham, 1000, looi. XXX INDEX TO CASES CITED. He/erences are to Sectione. Fleming v. Gilbert, 204. Fletcher v. Carpenter, 304. v. Chase, 451. V. Holmes, 23, 712. V. Morey, 47. Flower v. Elwood, 293, 389. Floyer v. Livingston, 674. Flynn v. Powers, 135, 612, 857. Fogarty v. Sawyer, 24. Fogel V. Pirro, 235, 255, 673, 681, 694, 698,711. Foley V. Rose, 294. FoUett V. Hall, 290. Foote V. Lathrop, 781. Ford V. Cobb, 167, 179. V. David, 589. ■V. Olden, 30, 678. V. Stewart, 298, 300. V. Smith, 71. Foreman v. Foreman, 1062. Forman v. Marsh, 1064. Forstall v. Blanchard, 361. Fort v. Burch, 281, 312, 483, 484, 486, 487; 4-97, 500, 1021. Foster v. Heals, 332, 334, 355. V. Beardsley Scythe Co., 474. V. Fouat, 291. V. Hughes, 686. V. Paine, 390. V. Powers, 68. V. Reynolds, 193. V. Townshend, 847, 904. V. Union Bank, 1027. V. Van Reed, 304, 544, 556, 560. Foster's Appeal, 108, 286. Fox, Adm'r, v. Fraser, 17. V. Lipe, 82, 235, 241, 1098. V. Parker, 213. V. Wray, 358, 438. Fouch V. Wilson, 60. Fougera v. Moissen, 883. Fowler v. Bush, 391. V. Fay, 363. V. Hoffman, 548. V. Johnson, 11 19. V. Merrill, 478. V. Scully, 132. Fowleyz/. Palmer, 548, 552. Francis v. Church, 971, 979, 986. Frank v. Wessels, 813. Frankland v. Moulton, 174, i8o. Franklin Bank v. Piatt, 340. Franklin v. Gorham, 680. V. Hayward, 364, 379, 836. Franklin Savings Ins. Co. v. Central Ins. Co., 538. Franklin v. Talmadge, 467. Franklin v. Van Cott, 1055, 1068, 1070, 1072. Franklynt/. Hayward, (030, 1077, 1081. Fraser v. Prather, 255, 797. Frayser v. Trustees Indiana Asbury University, 206. Frecking v. Roland, 614. Freedman v. Gamble, 672. Freeligh v. Piatt, 128. Freeman v. Auld, 202, 571, 652, 879, 880. V. Munns, 967. V. Peay, 90. V. Schroeder, 281, 1055. Freeson v, Bissell, 75. Frelinghuysen v. Colden, 751, 843, 885, 888, 904, 1018, 103 1. French v. Baron, 258. V. Burns, 15. V. De Bow, 433. V. Kennedy, loi, 630. V. New, 793, 828. v. O'Brien, 482. V. Shoemaker, 741. V. Shotwell, 651. V. Stone, 433. Frickee v. Donner, 218. Friemansdorf v. Watertown Ins. Co., 551- Frieze v. Chapin, 11 30. Frink v. Adams, 21. V. Hampden Ins. Co., 552. V. Le Roy, 235. V. Thompson, 1148. Frisbee v. Thayer, 25. Frisbie v. Lamed, 212, 376, 391. Frost V. Beekman, 292, 461, 472, 476, 491. 494- V. Bevins, 680, 962. V. Frost, 280. V. Koon, 388, 792, 844, 1018, 1054. V. Myrick, 979. V. Peacock, 622, 1058. V. Yonkers Savings Bank, 297, 363, 400, 406, 408, 409, 448, 477, 685, 686, 687, 689. Fryatt v. The Sullivan Co., 179. Frye v. Bank of Illinois, 200. Fryer v. Rockefeller, 790, 1004, 1006. Fuhrman v. Loudon, 464. FuUam v. Stearns, 171, 178. Fuller V. Brown, Matter of, 969, 971. V. Hunt, 879. V. Schribner, 765. V. Van Geesen, 997, 1021. . Fulton V. Mathews, 206, 223. V. Whitney, 990. Beference9 are to Sections. INDEX TO CASES CITED. XXXI Fullerton v. McCurdy, 31, 38. Funk V. McReynolds, Adm., 293. V. Murphy, 681. Furbish v. Sears, 100. Furnas v. Durgin, 577. Furniss v. Ferguson, 333. Gabbert v. Schwartz, 308. Gaffney v. Hicks, 601. Gage V. Brewster, 692, 711, 730, 1027, 1029. Gahn v. Niemcewicz, 212, 213, 215, 394, 610. Galatain v. Erwin, 876, 877. Gallagher v. Egan, 796, 908, 912. Gallatain v. Cunningham, 790. Gallatin County v. Beattie, 23; Galpin v. Page, 1017. Galway v. Fullerton, 107. Gans V. St. Paul Ins. Co., 543. V. Thieme, 434, 445, 449. Gantt v. Gantt, 337. Gantz V. Toles, 1109. Garanflo ii. Cooley, 160. Garber v. Henry, 203. Gardiner v. Schermerhorn, 978, 983, 985. Gardner v. Astor, 363. V. Brower, 735. V. Diederichs, 293. V. Emerson, 94. V. Finlay, 167. V. Heartt, 188, 189, 190. V. James, 443. Garlock v. Goertner, 416. Garnsey v. Rogers, 579, 583, 584, 585, 587. Garr v. Bright, 908, 910. Garrett v. Lynch, 1017. V. Puckett, 494. Garson v. Green, 52, 60, 288. Garwood v. Admrs. of Eldridge, 449. Gaskill V. Wales, 449. Gaskin v. Anderson, 1005. V. Meek, 925, 941. Gates V. Bennett, in. Gate wood v. Gatewood, 445. Gault V. McGrath, 209. Gausen v. Tomlinson, 281, 460. Gaylord v. Cincinnati German Build- ing Ass'n, 458. V. Knapp, 14, 60, 102, 813. Genter v. Morrison, 86. George v. Andrews, 216. V. Arthur, 1 109, 11 10. V. Grant, 112, 114. V. Wood, 272, 681. Georgia R.R. Co. v. Walker, 1030. Gerber v. Sharp, 293. German Savings Bank v. Sharer, 919, 1043, 1074- Gerrish v. Black, 247, 259. Gerry v. Post, 785, 797. Gerwig v. Shetterly, 670. Getting w. Mohr, 11 59. Gibbes v. Jenkins, 1 54. Gihbs, Matter of, 1074. Gibson v. Crahore, 683. V. McCormick, 386. V. Milne, 436. V, Renne, 206. V. Stearns, 633. V. Wilson, 100. Giddings v. Seward, 354. Gifford V. Allen, 213. V. McCloskey, 569. Gilbert v. Gilbert, 434, 449. V. Haire, 271. V. Holmes, 92. V. The North Am. Fire Ins. Co., 568. Gilchrist v. Couch, 482. V. Cough, 467, 476. Giles V. Baremore, 410. 11. Comstock, 102 1. V. Lewis, 818. Giil V. Lyon, 271, 958. V. Pinney's Adm'r, 478. Gillespie v. Moon, 850. Gillett V. Balcom, 160, 790. Gillette v. Smith, 341, 390, 414, 1084. Gillig V. Maas, 113, 281, 302, 459, 498, 502, 626. Gillis V. Martin, 253. Gilman v. Brown, 65, 71. V. Moody, 281. V. Telegraph Co., 896. Gimble v. Stottle, 149. Girard Trust Co. v. Stewart, 573. Girardin v. Lampe, 461. Given v. Kemp, 652. Glacius 2/. Fogel, 750, 831. Gleason v. Moen, 876. GUdden v. Hunt, 308, 499. Globe Ins. Co. v. Lansing, 827. Globe Marble Mills v. Quinn, 173, 174. Glover v. Payn, 31, 33. Glynn v. Building Ass'n, 17. Goddard v. Coe, 15. V. Sawyer, 195. Godfrey v. Watson, 258. Goelet V. McManus, 481. Goff i". Rogers, 95. Goldsmith ^z. Brown, 218, 221, 661, 829. xxxu INDEX TO CASES CITED. EeferiTitea are to Sections. Goldsmith v. Osborne, 699, 975. Gooch V. Vaughan, 11 30. Goodall, Case of, 8. V. Mopley, 721. Goodbar v. Dunn, 283. Goodell V. Harrington, 969, 987. Goodenow v. Curtis, 100. Goodhue v. Berrien, 813. V. Churchman, 819. Goodman v. Keney, 870. Goodrich V. Kimberly, 29. Goodwin v. Gilbert, 575. V. Keney, 366. V. Mass. Mut. Life Ins. Co., 543- V. Simonson, 223, 995. Gorden v. Bell, 279. V. Manning, 68. Gordon v. Massachusetts F. and M. Ins. Co., 529. V. Saunders, 995. V. Ware Savings Bank, 557. Gorham v. Anderson, 462. Gorton z/. Paine, 29. Gould V. Bennett, 777. V. Gager, 981. ■V. Holland Purchase Ins. Co., 540. V. Horner, 664. V. Libby, 972, 981. V. Marsh, 301, 308, 310, 315. V. Mortimer, 966, 969. Goulding v. Bunster, 336. Gouverneur v. Elmendorf, 600, 859. V. Lynch, 271, 958. Gower v. Howes, 743. Grady v. Ward, 1003, 1004. Grafton Bank v. Doe, 341. Graham v. Bleakie, 995, 1004, 10x35. V. Dickinson, 444. •v. Linden, 398, 400, 624. V. Phoenix Ins. Co., 550. V. Stewart, 851. Grandin v. Hernandez, 692. Granger v. Crouch, 281, 293, 294, 460. Grant v. Bissett, 292. V. Duane, 444, 675, 702, 738. V. Griswold, 797. V. Spencer, 788. V. Tallman, 600, 859, 869, 873. Graser w. Stellwagen, in. Gratten v. Wiggins, 294, 681. Graves v. Blanchard, 908. V. Briggs, 485. V. Hampden Fire Ins. Co., 556. V. Rogers, 366. Gray v. Brignardello, 1017. Gray v. Van Blarcom, 642. Graydon v. Church, 718. Green v. Butler, 67b, 679. V. Deal, 281, 314, 460, 481. V. Dixon, 681, 753, 767. V. Fry, 310, 340, 398. V. Hart, 298, 300, 347. V. Kemp, 652. V. Lamb, 259. V. Milbank, 448. V. Morse, 652, 659. V. Slayter, 494. V. Supervisors, 459. Greenault v. Davis, 333, 862. Greene v. Tyler, 643. V. Warnick, 281, 297, 314, 498. Greenpoi.it Sugar Co. v. Kings County Mfg. Co., 117. Greenpoint Sugar Co. v. Whittin, 117, 118, 119, 121, 122. Greer v. Higgins, 492. V. Turner, 245. Gregg V. Von Phul, 345. V. Wells, 345. Gregory v. Thomas, 212, 374, 391. V. Hartley, 577. V. Campbell, 81 5, 947, 953. Grerther v. Alexander, 879. Gressinger v. Dessenburgh, 91. Griffin v. Burtnett, 199. V. New Jersey Oil Co., 193, 633. Griffith V. Allen, 175. V. Griffith, 491, 766. V. Hadley, 976. 7/. Merritt, 877. V. Robertson, 1089. Grimball v. Mastin, 847. Grimes v. Kimball, 813. Grimstone v. Carter, 458, 472, 487. Grinnan •z/. Piatt, 205, 206. Grissler v. Powers, 324. Griswold v. Fowler, 731, 742, 765, 954, 955- V. Griswold, 342, 419. V. Miller, 755, 765. V. Onondaga County Savings Bank, 361. Grocer's Bank v. Neet, 321. Groff i". Morehouse, 238, 11 14, 1142. Gross V. Welwood, 242. Grosvenor v. Atlantic Fire Ins. Co. of Brooklyn, 533, 534, 552. V. Day, 855, 1087, 1 127. Grove v. Todd, 464. Grover v. Hall, 11 36. V. Thatcher, 365. Grow V Garlock, 839. Beferences are to Sections. INDEX TO CASES CITED. XX'Xlll Grugeon v. Gerrard, 717. Grussy v. Schneider, 231. Gubbings v. Harper, 16. Guckenheimer v. Angevine, 88. Guest V. The City of Brooklyn, 928, 1 109. Guggenheimer v. Geiszler, 636. Guion V. Knapp, 220, 271, 381, 383, 384, 388, 958. Gulden v. O'Bryne, 228. Gunn V. Barry, 433. Gunnell z/. Cockerill, 11 50. Guy V. Du Uprey, 445. HackenhuU v. Westbrook, 778. Hackney v. Vrooman, 45, 306. Haddon -v. Jones, 94. Hadley v. Chapin, 790. V. N. H. Ins. Co., 552. Hagan v. Walker, 741. Hagenbuch v. Phillips, 608. Hagerty v. Allaire Works, 206. Hkgthorp V. Hook, 255. V. Veale, 40. Hague V. Inhabitants of West Ho- boken, 955. Haight V. Continental Ins. Co., 540. Haile v. Nichols, 880. Haines v. Beach, 675, 682, 692, 730. V. Pahlman, 354. V. Taylor, 985. V. Thompson, 19. Haldade v. Sweet, 837. Hale V. Baker, 53. v. Clausen, 967, 987. V. Gouverneur, 232. V. Morgan, 432. V. Omaha Nat. Bank, 482. V. Patton, 231, 356. V. Rider, 10S4. Hall V. Bamber, 818, 944. V. Cashman, 454. V. Constant, 206. V. Crouse, 99, 193. V. Davis, 847. V. Edwards, 384. V. Erwin, 883. V. Hall, 712. ^ V. Jewell, 16; V. Nelson, 731, 740, 758, 764, yyj, 852. ^ V. Smith, 1006. \ V. Van Cleve, 18. V. Westcott, 28. Hall's Ex'rs v. Lambert's Ex'rs, 97. Halliday v. Hart, 206. Hallinger v. Bates, 731. Hallock V. Smith, 58, 60, 66, 731. Halsey v. Martin, 304. V. Reid, 216, 273, 274, 571, 572, 575. 577. 579. 59'. 722, 960. Halstead v. Bank of Kentucky, 478. V. Board of Commrs. of take Co., 850. Hamell v. Gillespie, 596. Hamilton v. Austin, 160, 161. V. Fowlkes, 69. V. Gunther, 555. V. Jones, 261. V. Lubukee, 971. V. Van Rensselaer, 628. Hamlin v. McCahill, 823. Hampson v. Suydenham, 134, Hampton v. Nicholson, 431. V. Phipps, 455. Hancock v. Fleming, 567. V. Hancock, 467, 719, 741, 823. V. Harper, 19, 22. Hancock's Appeal, 293, 294. Handley v. Munsell, 688, 877. Hannon v. Hilliard, 851. Hanover Fire Ins. Co. v. TomUnson, 832. Hansard v. Hardy, 1083. Hansell v. Lutz, 446. Hanson, ex parte, 872. Harbeck v. Vanderbilt, 336, 444. Harbison v. Vaughan, 831. Hardin v. Hyde, 652. Hards v. Burton, 246, 274. Hardwick v. Mynd, 390. Hare v. Van Deusen, 62. Harlem Savings Bank v. Micklesburgh, 829. Harman v. May, 33. Harmer z/. Priestly, 717. Harmon v. Hilliard, 790. V. Price, 505. Harmony Building Association v. Bur- ger, 171. Harp V. Calahan, 23. Harper v. Ely, 239, 259. V. Leal, 146. Harper's Appeal, 15, 194, 255, 682. Harrington z/. Fitchburgh Ins. Co., 551. V. Slade, 765. Harris v. Barmore, 189. V. Cook, 345, 420, V. Fly, 275, 806. V. Haynes, 178. V. Jex, 404, 406. V. Mulock, 356. XXXIV INDEX TO CASES CITED. Seferences are to Seouom. Harrison v. Bray, 870. V. Guerin, 279. V. Phillips Academy, 16. V. Simons, 785, 797. V. Trustees, etc., 678, 679. Harscig v. Brown, 355. Hart V. Chalker, 95, 203. V. Haydon, 847. V. Sheldon, 178. V. Ten Eyck, 22. V. Wandle, 238, 271, 274, 304, 571, 711, 1024, 1027. Kartell, in the Matter of, 341. Hartford Fire Ins. Co. -v. Walsh, 540. Hartford and New York Transporta- tion Co. V. First Nat. Bank, 343. Hartley v. Harrison, 446, 571, 601, 652, 655, 878. V. Tatham, 202, 311, 409, 880. Harwell v. Lehman, 743. Harwood v. Kirby, 78. Hasbrouck v. Shuster, 794. V. Tappen, 204. Hasford v. Johnson, 253. Haskell v. Burdette, 213, 215. V. The State, 274. Haskill 7'. Sevier, 90. Hassam v. Barrett, 18. Hasselman v. McKernan, 1028. Hastings v. Westchester Fire Ins. Co., 544. 545- Hatch V. Mayor, etc., of New York, 152. V. Morris, 445. Hatcher v. Chauncey, 818. Hatfield v. Reynolds, 354. Haughwout V. Garrison, 664. Hawke v. Snydaker, 381, 386. Hawkins v. Thurman, 60. Hawley v. Bradford, 6io, 620, 622, 627. V. Cramer, 489, 764. V. Foote, 212, 376. Haworth v. Taylor, 24. Hay V. Star Fire Ins. Co., 556, 560, 563. Hayden v. Bucklin, 755. V. Snow, 598. Hayes v. Dickinson, 765, 896, 898, 901. V. Fray, 728.. V. Harmony Grove Cemetery, 1 001. V. Ward, 213, 279, 382, 444, 723. Haynes v. Stevens, 27. Hays V. Thomae, 785, 797. Haywood v. Jones, 664. V. Nooney, 286. V. Shaw, 491, 1055. Hay worth v. Worthington, 13. Hazleton v. Wakeman, 987. Headly v. Goundry, 419. Heath-w. Second National Bank, 133. V. Page, 98. Hebbard v. Haughian, 193, 565. Hedden v. Cowell, 436. Heermans v. Clarkson, 335, 349. V. Ellsworth, 334, 355, 358. Heeter v. Glasgow, 462. Heffron v. Flanigan, 287. Held v. Vreeland, 571. Heilbrun v. Hammond, 342, 464, 498. Heilman v. Westchester Fire Ins. Co., 551- Heintze v. Bentley, 96, 200. Hekla Fire Ins. Co. v. Morrison, 843. Helck V. Reinheimer, 843. Hellreigel v. Manning, 1000. Helmer v. Krolick, 308. Hemans v. Lucy, 13. Hemtnenway v. Mulock, 87. Henderson v. Herrod, 301. z/.. Pilgrim, 344, 458. V. Truitt, 274. Hendrickson v. Wooley, 282. Hendrickson's Appeal, 460. Hendrix v. Gore, 193. Hening v. Punnett, 1017. Henley v. Hotaling, 31. Henn v. Coninsby, 354. Hennesy v. Farrell, 235. Henry v. Anderson, 105. V. Clark, 674. V. Davis, 9, 677, 717. '■V. Root, 134, 856. Henseler v. Nickum, 286. Hepburn v. Griswold, 404. Herkimer v. Rice, 529. Herrick v. Borst, 224. Herron v. Herron, 18, 608. Hess V. Final, 91. Hetfield v. Newton, 654, 664. Hetzell V. Barber, 334, 358, 401, 478. Hewes v. Wiswall, 492. Hewitt V. Rankin, 105, 108. Hewsen v. Deygert, 951, Heyer v. Deaves, 924. w. Pruyn, 341,413,414. Heyman v. Beringer, 354. Hiatt V. Renk, 790. Hibernia Sav. and Loan Soc. v. Conlin, 809. Hickman v. Cantrell, 38. Hickock V. Scribner, 705. Hicks v. Bingham, 362. V. McGarry, 567. V. Marshall, 141. JSefereTices are to Sections- INDEX TO CASES CITED. XXXV Hidden v. Jordan, 248. Higgins V. Chamlserlain, 162, 191. High V. Batte, 71. Higinbotham v, Stoddard, loog. Hill 7^. Beebe, 212, 374, 376, 391. V. Butler, 859. V. Eldred, 45. V. Epley, 345. V. Grant, 31, 33, 40. V. Gwin, 184, 191. V. Hill, 2g. V. Howell, 381, 388,628. V. Linn, 18. V. McReynolds, 805. V. Minor, 879, 11 19. V. McNichol, 476. V. Wentworth, 178. Hill's Administrator v. McCarter, 274. Hillhouse v. Dunning, 14. Hilliard v. Allen, 252. Hills w. Loomis, 18, 21. Hilton V. Catherwood, 341. Himmelmanz/. Fitzpatrick, 396. Hincliffe v. Shea, 626. Hinchman v. Stiles, 296. Hines v. Langley, 60. Hinsdale v. Humphrey, 575. Hirsch v. Livingston, 731, 767, 997. V. Trainer, 141, 324, 329. Hiscock V. Phelps, 27, 104, 1*5. Hitchcock V. Fortier, 251. V. Hari-ington, 23, 620, 624. V. The Northwestern Ins. Co., 284, 856. v.\J. S. Bank of Penn., 1075. Hitesman v. Donnel, 87. Hobartt/. Hobart, 941. Hodges V. The Tennessee Marine and Fire Insurance Co., 18, 529, 540. Hodgson V. Heidman, 750. V. Shaw, 444. V. Treat, 767. Hoeffler v. Westcott, 331, 333, 660. Hoey V. Kinney, 1062. HoiSnan v. Burke, 929, 956. V. Mackall, 17. Hogan V. Hoyt, 826. V. Stone, 247. Hoile V. Bailey, 13. Holbrook v. Am. Ins. Co., 555. V. The Receivers of the American Fire Ins. Co., 872. Holcomb V. Holcomb, 741, 751, 823, 843, 1018. Holden v. Garrett, 290. v. Gilbert, 230, 870, 874. Holden v. Risan & Co., 675, 879. V. Sackett, 1017, 1027. V. Trust Co., 628. Holbridge v. Gillespie, 30, 154, 674, 677. 678. Holland v. Baker, 738. V. Hodgson, 191. V. Johnson, 214. Hollenbeck v. Donell, 161, 886, 8go, 896. V. Shoyer, 431, 434. Holm V. Taylor, 778. Holmes v. Boyd, 133. V. French, 300. V. Grant, 18, 33, 36, 37. V. Holmes, 403, 625. V. Powell, 492. V. Remsen, 351. V. Williams, 645. Holt V. Baker, 418. V. Creamer, 96. Holton V. Bowman, 238. Home Ins. Co. v. Dunham, 634. V. Head, 991. V. Smith, 150. Homeopathic Mut. Life Ins. Co. v. Marshall, 462. Homeopathic Mut. Life Ins. Co. v. Sixbury, 937, 1065. Hone V. Fisher, 14, 102, 303, 375, 824. Honore v. Hutchings, 38. ■V. Lamar Fire Ins. Co., 562. Hoodless V. Reid, 230. Hook z/. Creamer, 192. Hooker v. Martin,'i49, 150. V. Pierce, 478. Hooper, ex f arte, 440. Hoopes V. Auburn Water Works Co., 1016. Hope Fire Ins. Co. ■v. Cambrelling, 491. Hope V. Liddell, 494. Hopkins v. Adams, 813. V. Garrard, 69. V. Stephenson, 256. V. WoUey, 274. Hopkinson v. Rolt, 200. Hoppock V. Conklin, 983. Hopson V. MXxA Axle and Spring Co., 718. Horn V. Cole, 345. V. Keteltas, 18, 33, 34, 38. Hornby v. Cramer, 690, nil, 1122. Horst V. Dague, ^^. Horstman v. Gerker, 310. Horton v. McCoy, 1062, 1064. Hosford V. Nichols, ^(>, 7$^, 1088. Hoskins v. Carter, 484. XXXVl INDEX TO CASES CITED. References are to Sections. Hoskins v. Wall, 52. Hosmer v. Campbell, 958. Hotchkiss V. Clifton Air Cure, 975, 996. Hottenstein v. Lerch, 492. Houbie v. Volkening, 231, 356. Hough v. Barton, 813. V. Osborne, 293. Hourtunne v. Schnoor, 462. House V. Eisenlord, 909. V. House, 267, 624. V. Lockwood, 1079. Houston V. Houston, 285. Hovenden v. Knott, 877. Hovey v. Hill, 768. How w. Vigiyes, 8. Howard v. Chase, 494. V. Farley, 230. V. Gresham, 308. V. Harris, 674. ■V. Hatch, 1 109, 1 148. Howard Ins. Co. v. Halsey, 220, 381, 383, 384, 489, 490, 494. Howard Nat. Bank v. Toomes, 132. Howe, Matter of, 46, 66, 288. Howe's Ex'rs v. Towner, 79. Howell V. Leavitt, 242. V. Mills, 968, 973, 984, 987. V. Ripley, 885, 896, 898. V. Western R.R. Co., 229. Howery v. Helms, 980, 989. Howland v. Blake, 19, 462. Hoxie V. Carr, 105. Hoy 1/. Bramhall, 274, 336, 338. Hoyle V. Plattsburg & Montreal R.R. Co., 158. Hoyt V. Doughty, 47. V. Hoyt, 498. V. Martense, 76, 718, 743, 745, . 1022. V. Savings Institution, 971. Hubbard v. Cummings, 856. V. Ensign, 573. V. Gurney, 212, 214. V. Norton, 27. V. Ogden, 215. V. Savage, 192, 199, 203. V. Shaw, 257. V. Stetson, 18. Hubbell v. Blakeslee, 93, 99, 197, 208, 336, 439, 441. V. East Cambridge Savings Bank, 171, 178. v. Moulson, 24, 235, 700, 1098. V. Sibley, 693, 694, 1121, 1135. Huber v. Disbold, 285. Hudson V. Kelly, 707, 717. Huebsch v. Scheel, 273. Hufmann v. Hulburt, 213, 224. Hughes V. Edwards, 413. V. Johnson, 93, 94, 208, 298. V. Kearney, 66. V. Schraff, 38. Hulbert v. McKay, 1068, 107 1. Hulett V. Whipple, 58, 70, 288. Hummel v. Brown, 98. Humphreys v. Danser, 208. V, Martin, 293. V. Thorn, 60. Hunt V. Amidon, 600. V. Bay State Co., 174. V. Chapman, 870, 917. V. Harding, 818. V. Hunt, 365, 487. V. Johnson, 50, 113, 458. V. Keech, 228, 230. V. Makemson, 692. V. Middlebrook, 916. V. Purdy, 222. ■V. Wallis, 819. Huntingdon,' Case of, 610. Hunter v. Le Conte, 398. Hurmden v. Roberts, 243. Huston V. Neil, 108. Hiisted V. Dakin, 1045, 1046, 1047. Hutchins v. Hebbard, 99, 328, 649. V. Hutchins, 20. V. King, 188. Hutchins' Adm'r v. Clark, 354. Hutchinson v. Abbott, 647. V. Swartsweller, 391, 433. Huxford V. Eslow, 426. Hyde v. Tanner, 145, 449, Hyland v. Stafford, 1129, 11 30. IdMfftgs V. Bruen, 903. Ijames v. Gaither, 455, 476. Illinois Fire Ins. Co. v. Stanton, 551. Ingall V. Fay, 181. Ingalls V. Morgan, 277, 279, 384, 444. 493. 957- iHgCTSoU V. Mangarn, 782, 998. Ingraham tj. Disborough, 310. Innes v. Purcell, 941. Insurance Co. v. Brown, .194. V. Marshall, 449. V. Norton, 543. V. O'Donnell, 215. V. Stinson, 531. V. White, 13, 18. International Bank v. Bowen, 441, Irving V. De Kay, 84. Irwin V. Bidwell, 107. Isenhart v. Brown, 113, SefereTices are to Sections. INDEX »t> CASES CITED. XXX\ai Isett V. Lucas, 293. Ives V. Stone, 472. Jack V. Nichols, 645. Jackman v. Beck, 78. Jackson v. Allen, 234. V. Austin, 284, 286, 856. V. Blodgett, 298, 342. V. Bowen, 238, 692, 1081, 1 137, 1 142. V. Bradford, 882. V. Bronson, 298. V. Burchin, 857. V. Burgott, 39. V. Cadwell, 489. V. Carpenter, 857. V. Chamberlain, 478. V. Colden, 487, 1 149. V. Corliss, 157. V. Crafts, 398, 1 1 29. V. Davis, 494. V. De Witt, 621, 625. V. Dominick, 669, 1129. V. Dubois, 24, 290, 1097. V. Edwards, 622, 623, 971,998, lOIO. V, Gardner, 79. V. Given, 491. V. Gumaer, 464. V. Henry, 312, 645, 669, 1 1 00, 1 129, 1 140. V. Hill, 72. V. Lawrence, 18. V. Littell, 27. V. Losee, 755, 857. V. McChesney, 484, 491. V. Malin, 88. V. Morse, 11 29. V. Phillips, 39. V. Perkins, 461, 462, 568. V. Phipps, 568. V. Post, 281, 478, 481, 487. V. Pratt, 412. V. Reid, 484, 499. V. Reon, 803. V. Rhoades, 520. V. Richards, 39, 459, 474, 568. V. Rumsey, 461. V. Sackett, 414. V. Sheldon, 234. V. Schoonmaker, 461, 462. V. Slater, 415, 696. V. Stackhouse, 342, 419. V. Stafford, 1097. V. Turner, 1 104. V. Tuttle, 647. Jackson v. Van Valkenburgh, 312, 472, 487, 500. V. Voorhis, 519. V. Willard, 23, 26, 302. V. West, 39, 487. Jacobs V. Denison, 478. Jacobson v. Dodd, 321. Jaffrey v. Hursh, 81. Jagger Iron Co. v. Walker, 391. James v. Brown, 384. V. Hubbard, 271, 279, 280, 958, 965, 1056. V. Johnson, 18, 25, 197, 334, 364, 440, 472. V. Morey, 25, 42, 310, 364, 366, 439, 496, 649. V. Oakley, 652. V. StuU, 1 102. V. Worchester, 188. . Janinski v. Heidelberg, 781. Jarmen v. Wiswall, 749. Jarnegan v. Gaines, 210. Jarvis v. Rogers, 197, 440. Jay V. Ensign, 912. Jencks v. Alexander, 630, 951, 11 19, 1121, 1125, 1127. Jenkins v. The Continental Ins.Co.,685, 687, 689. V. Freyer, 271, 958. V. Hinman, 887. V. Quincy IMut. Fire Ins. Co., 529. Jenkinson v. Ewing, 1084. Jenness v. Cutler, 610. Jensen v. Weinlander, 929. Jerome v. McCarter, 741. Jerry v. Rosell, 279. V. Woods, 300. Jester v. Sterling, 206, 216. Jewell V. Harrington, 202, 880, 882. Jewett V. Miller, 328. Jewitt V. Davis, 339. V. Hamlin, 1084. John and Cherry Streets, in re, 673. Johnson v. Anderson, 197, 361, 439, 440. V. Brown, 294, 301. V. Buckhaults, 818. "v. Bush, 639, 883. V. Candage, 301, 680. V. Corbett, 22, 57, 268, 277. V. Gere, 863. V. Harmon, 1027. V. Hart, 743. V. Johnson, 298, 300. V. Moore, 88. V. Parmely, 337, 445, 880. xxxnii INDEX TO CASES CITED. References are to Sections. Johnson v. Payne, 261, 448. ■V. Sandhoff, 235, 238. V. Shepard, 829. V. Sherman, 155. v. Stagg, 458. V. White, 183, 186. V. Zink, 216, 363, 685, 686, 688, 722. Johnson's Appeal, 361. Johnston v. Gray, 674. V. Riddle, 896. V. Wallace, 462. Jonas V. Jonas, 847. Jones V. Brogan, 94, 443. V. Caswell, 993. V. Clark, 242, 1026. V. Conde, 827. V. Detroit Car Co., 174. V. Fletcher, 256. V. Franks, 30. V. Guaranty & Indemnity Co., 123, 192. V. Insurance Co., 878. V. Laphara, 76. V. Mack, 1027. V. Matthie, 1131. V. Merchants' Bank of Albany, 414. V. Merritt, 616. V. Parsons, 105. V. Phelps, 281, 460, 910, 913. V. Quinnipack Bank, 300. V. Robinson, 482. ■V. Smith, 492. V. Stienbergh, 661, 829. V. St. John, 751, 843, 1018. V. Trusdell, 219, 668. v. Witter, 767. Jones' Ex'r v. State Banking Co., 20i. Jordan v. Cheney, 301. V. Furlong, 441. V. Poillon, looi, 1002. V. Smith, 1084. Joslyn V. Wyman, 442. Judd t/. O'Brien, 1116, 11 18, 11 19. V. Seaver, 671. V. Seekins, 364. Judge V. Reese, 33. Judson V. Dada, 276, 459, 595, 601. Jumel V. Jumel, 216, 273, 341, 591. Kamena ^z. Huelbig, 317. Kane v. Cortesy, 213. Kaufman v. Walker, 929. Kay V. Whittaker, 730, 740, 877, Kearney v. Macomb, 37. V. Post, 1014. Kearsley v. Cole, 217. Keating v. Price, 204. Keegan v. Cox, 1 34. Keeler v. Davis, 328. V. Keeler, 156, 1034. Keller v. Ashford, 568. V. Orr, 610. Kelley v. Whitney, 308. Kellog V. Smith, 26. Kellogg V. Adams, 639, 640. V. Ames, 336, 366, 443, 592. V. Howell, 969, 972, 973, 983. V. Olmstead, 206. V. Rand, 271, 958, 961. V. Smith, 305, 316, 501. Kelly V. Austin, 173. V. Geer, 569. V. Israel, 931. V. Roberts, 602. V. Ruble, 52. V. Scott, 324. V. Searing, 802, 807, 808. Kelsey v. Bradbury, 380. V. Lyon, 177. Kelso V. Fleming, 593. Kemble v. Wallis, 397. Kendall v. Niebuhr, 383, 384, 386, 387, 493- V. Treadwell, 1077, 1083. V. Woodruff, 385, 386, 387. Kenicott v. Supervisors, 308, 310. Kennedy v. Greene, 490. Kennelly v. Kelly, 275. Kent V. Agard, 18. V. Lasley, 19. V. Walton, 639, 645. Kenton v. Vandergrift, 423. Kenyon v. Segar, 879. Keogh V. McManus, 898. Kepley v. Jansen, 731, 818. Keppler v. Merkle, 941. Kerngood v. Davis, 52. Kemochen v. N. Y. Bowery Fire Ins. Co., 530, 563. Kerr v. Hill, 160. V. Kingsbury, 174. V. Russell, 462. Kerrigan v. Force, 926. Kershaw v. Thompson, 1 03 1. Kerwin, ex parte, 87. Kessler v. The State ex rel. Wilson, 470. Ketcham v. Wood, 201, 466. Ketchem v. Jauncey, 194, 200. Ketchum v. Johnson, 38. V. Shaw, 625: Ketzmiller v. Van Rensselaer, 626. • Beferencea are to Sections. INDEX TO OASES CITED. XXXIX Keyes v. Wood, 300, 301. Kidd V. Conway, 611. Kierstead v. Avery, 291. Kiersted v. O. & A. R.R. Co., 570. Kies V. Tifft, 227. Kieser v. Baldwin, 208. Kiff z/. Weaver, 298. Kilborn v. Robbins, 272, 274, 363. Kilmer v. Smith, 598. Kilner v. O'Brien, 645. Kimball v. Myers, 99. Kindberg v. Freeman, 767. King t/. Baldwin, 213, 218, 221, 723. V. Ballantine, 625. V. Bardeau, 1006, 1007, 1009. ■V. Duntz, 717, 920, iioi, 1113. V. Harrington, 304. V. Knapp, 1007. V. McVickar, 279, 367, 675, 876. V. Merchant's Ex. Co., 100, 114. V. Morris, 981. V. Newman, 38. V. Piatt, 939, 964, 978, 979, 987. V. Smith, 181. V. St. Michaels, 11. V. State M. F. Ins. Co., 243, 562. V. Warrington, 18. V. West, 1045, 1046, 1047. V. Whitely, 575, 580, 581, 589. V. Wilcomb, 160, 164, 175. Kingsland v. Chetwood, 85, 105 1. Kinnear v. Lowell, 577. Kinsey w. Bailey, 178. Kinsley v. Davis, 435. V. Scott, 843. Kinstrey 7/. Curtis, 688. Kipp V. Brandt, 733, 767. V. Delamater, 788. Kirby v. Fitzgerald, 1 1 54. Kirchner z/. Schalk, 191. Kirkham v. Dupont, 681, 753. Kirkpatrick v. Caldwell's Adm'r, 485. V. Ward, 487. Kirkwood v. Thompson, 243. Kirton v. Braithwaith, 231. Kistner v. Sindlinger, 105. Kitchell z: Mudgett, 449, 494, 626. Kitchen v. Lee, 134, 856. Kittle V. Van Dyck, 286, 621, 743, 852. Klapworth v. Dressier, 576. Klein v. McNamara, 33, 36, 37. Klinck V. Price, 15. Kline v. McGuckin, 23, 194. Klock V. Cronkite, 367, 378, 11 19, 1121. Knapp V. Burnham, 785, 807, 816. V, Lee, 600, 861. Knapp v. Maltby, 87. V. Smith, 613. Knarr v. Conaway, 183. Kneeland v. Moore, 363. Kneettle v. Newcomb, 146, 328, 649. Knickerbacker v. Eggleston, 822, 921, 963- Knickerbocker v. Boutwell, 273. Knickerbocker Life Ins. Co. v. Hill, 647. Knickerbocker Life Ins. Co. v. Nelson, 632, 654, 656, 776, 878, 881. Knight I/. Drane, 11 30. V. Moloney, 995, 1004. V. Ray, 294. Knoblock z>. Zochwetzke, 592. Knoles v. Barnhart, 338, 569. Knox V. Lee, 404. Koester v. Burke, 293. Kohler ^/. Kohler, loii. Kornegay t/. Spicer, 11 30. Kortright v. Cady, 23. 24, 236, 261, 396, 398, 406, 409, 691. V. Smith, 740, 743, 853. Kountze v. Hotel Co., 896. Kraft?/. James, 1027. Kramer v. The Trustees of the Farm- er's Bank, 194, 200. Kuhrs V. McGeah, 212. Laclede Bank v. Keeler, 1137. Lacustrine Fer. Co. v. L. G. & Fer. Co., 484, 491. Ladue v. Detroit, etc., R.R. Co., 200, 201, 202. Lady Superior v. McNamara, 90, 719. Lafarge v. Herter, 218, 662. La Farge Ins. Co. v. Bell, 27 1 , 958. La Farge v. Van Wagenen, 938, 977. Laflin v. Griffiths, 170, 176, 188. Laing v. Martin, 671. V. Titus, 798. Laing's Ex'rs v. Byrne, 601, 604. Lamb v. Cannon, 285. V. Jeffrey, 085. V. Montague, 680. Lambert v. Leland, 433. Lambertson v. Van Voorhis, 58, 66. Lamoille County National Bank v. Bingham, 650. Lamont v. Cheshire, 765, 767. L'Amoreaux v. Visscher, 324, 649. L'Amoureux v. Vandenburgh, 310. Lampman, Matter of, 139. Lamport v. Beeman, 57, 72, 268. Lancaster v. Smith, 420. Lance's Appeal, 17. Land £0. v. Peck, 60, 448, 738. xl IWDES TO CASBS CITED. Eeferences are to SeeUons. Land v. Wilcox, 60. Lane v. Conger, 955. V. Hitchcock, 188, 190. V. King, 160, 165. V. Ludlow, 64, 66, 288. V. Nickerson, 295, 297. •v. Shears, 15. Langdon v. Buel, 298, 300, 342. V. Gray, 671. Langford v. Barnard, 8. Lang] in v. Braley, 76. Lang's Heirs v. Waring, 105. Lanier v. Smith, 843. Lansdowne v. Ederton, 995. Lansing v. Capron, 837, 943. V. Goelet, 1076. V. McPherson, 983. V. Woodworth, 192, 200. Lants V. Crispe, 658. Lantz V. Buckingham, 147. Lapping v. Duffy, '836. Large v. Van Doren, 443. Larkin v. Misland, 1057. Lash V. McCormick, 11 37. Lashbrooks v. Hatheway, 196. Latham v. McCann, 869. V. Udell, 91. Lathrop v. Godfrey, 869, 871, 873, 883. V. Heacock, 781. Lattimore v. Harson, 204. Laverty v. Moore, 1015. Law V. McDonald, 908, 910. Lawrence v. Brown, 328, 649. V. Clark, 482. V. Cornell, 934, 1004, 1056. V. Delano, 1013. V. Farley, 568. V. The Farmer's Loan and Trust Co., 9, 15, iioi. V. Fox, 582. " V. Knap, 298. V. Lawrence, 719, 725. V. Towle, 567. V. Tucker, 193, 196. Lawson v. Barron, 234. V. Moffatt, 18. Lawton v. Sager, 919, 1074. Laylin v. Knox, 451. Layman v. Whiting, 1148. Leahy ■z/. Arthur, 892. Learned v. Geer, 1125. Leary v. Hoggs, 104. V. Schaffer, 625. Leavenworth v. Cooney, 624. V. Packer, 876. Leavitt v. Cruger, 781. V. Tyler, 764. , Ledyard v. Butler, 25, 201, 481. Lee V. Chadsey, 642. V. Methodist Episcopal Church of Fort Edward, 129. V. Parker, 751, 834, 843, 1018. V. Porter, 858, 869. V. West Jersey Land Co., 207. Leeds v. Cameron, 192. Leet V. McMaster, 11 16, 1135. Lefebere v. Detroit, 849. Lefevre v. Laraway, 973, 984, 989. Leggett V. McCarty, 859. V. McClelland, 454. V. Mutual Life Ins. Co., 736. Leighton v. Orr, 848. Leitch V, Wells, 760. Leitzbach v. Jackman, 448. Le Neve v. Le Neve, 478, 492. Lenihan v. Haraann, 732, 1006. Lenox v. Reed, 17. Lents V. Craig, 933. Leonard v. Morris, 749, 750, 829, 831. Leows V. De Forest, 194. Lesley v. Johnson, 324, 637, 671. Leslie v. Merrick, 848, 851. Lessee of Cooper v. Galbraith, 478. Heister v. Fortner, 472. Lester v. Barron, 202, 880. Levy V. Mayor, etc., of New York, 190. V. Merrill, 416, 425. Lewis V. Anderson, 105, 482. V. De Forest, 200. V. Kirk, 308, 309. V. Montgomery Mut. B. and L. Asso'n, 567. V. Palmer, 444. V. Payn, 88. ■V. Small, 16. V. Smith, 751, 834, 843, 844, 1018, 1054. Libby v. Hopkins, 360. Lidderdale's Ex'rs v. Robinson, 447. Lieby v. Wolf, 478. Life Ins. Co. v. Howell, 831. V. Rowand, 478. V. Slee, 13. Ligtner v. Mooney, 478. Lilly V. Dunn, Adm'r, 23. V. Palmer, 274, 363. Lim. Bank v. Mallett, 213. , Lindsay v. Bates, 58, 300. Linthicum v. Tapscott, 53. Lippold V. Held, 391. Lithauer v. Royle, 910. Littauer v. Goldman, 333. Littell V. Zoutz, 972, 973. Little V. White, 637. Ee/eretices are to Sections, INDEX TO CASES CITED. xli Littlefield v. Crocker, 626, Littlewort v. Davis, 16. Livingston z*. Byrne, 985. V. Dean, 310, 312, 649. V. Harris, 666, 667, 709. V. Mclnlay, 192. V. Mildrum, 835, 948, 949, 1044, 1050. V. Newkirk, 57, 72, 268. V. Rendall, 797. Lloyd V. Mason, 904. V. Quinby, 836. Loan Ass'n v. Beggham, 381, 388. V. Hawlc, 278. Loan and Trust Co. v. Munson, 230. Lock V. Fulford, 271. Locke V. Horner, 575, 577. Lockman v. Ellis, 917. V. Reilly, 737, looi. Lockwood V. Fawcett, 831, 1088. V. Fox, 941. V. McGuire, 971. V. Sturdevant, 365. V. Marsh, 434, 449. Loeb V. Willis, 830, 1088. Loehr v. Colborn, 455, 737. Lofsky V. Maujer, 885, 890, 896, 898. Logan V. Smith, 308, 566. Logue's Appeal, 13. Lot V. Thomas, 27. Lomax v. Bird, 444. Lombard v. Dows, 96, 192. London and Westminster Loan and Discount Co. v. Drake, 174. Long V. Long, 809. V. Lyons, 816, 946. Longan v. Carpenter, 315. Longfellow v. Moore, 363. Loomer v. Wheelwright, 135, 275,610, 857. Loomis V. Balheimer, 222. V. Bedell, 862. V. Eaton, 878. V. Loomis, 13. Looney v. Quill, 271. Lord V. Lane, 364, V. Morris, 411. •V. Vane, 365. V. Wilcox, 60, 71. V. The Yonkers Fuel Gas Co., 114, 117, 118, 123. Loring v. Manufacturers' Ins. Co., 535. Lossee v. Ellis, 776, 908. Losey v. Bond, 134, 879. V. Simpson, 478, 479. Lathrop's Case, 731. Loucks V. Van Allen, 1043. Loudon V. Waddle, 562. Love V. Blair, 15. Lovejoy v. Bowers, 105. V. Vose, 445. Loveland v. Shepard, 227. Lovett V. German Reformed Church, 791, 1026, 1036. Low V. Allen, 413. V. Purdy, 990, noi, 11 12. Lowenstein v. Phelan, 228, 229. Lowery v. Peterson, 58. Lowman v. Yates, 206. Lowndes v. Chisholm, 259. Lowry v. Smith, 476, 626. V. Tew, 675. Lucas V. Hendrix, 847. Luce V. Hinds, 829. Luckey z/. Gannon, 552. Lucking v. Wesson, 448. Ludington v. Slauson, 869, 873. V. Taft, 908. Ludlow V. Cooper, 105. Lycoming Ins. Co. v. Jackson, 11 29. Lyle V. Ducomb, 192. Lyman v. Little, 451. V. Lyman, 271, 387. V. Sale, 943, 944. Lynch, Matter of, 143. V. Cunningham, 233. V. Hancock, 451. V. Livingston, 463. V. Meyers, 941. V. Utica Ins. Co., 46, 47. Lynde v. Budd, 134, 856. V. McGregor, 96. V. O'Donnell, 785, 797, 1033. Lyon V. Lyon, 137, 785. V. Powell, 18, 844. V, Robbins, 680, 683. McArthur v. Schenck, 637. McAusland v. Pundt, 1017. McBride v. The Farmers' Bank of Sa- lem, 727. V. Lewisohn, 949. McBurney z/. Wellman, 13, 18, 1097. McCabe v. Bellows, 620. V. Farnsworth, 346. V. Swap, 338, 363. McCarthy v. Graham, 827. V. Peake, 895. McCauley v. Grimes, 286. McClelland v. Bishop, 229. McCoUough V. Colby, 794. McConneaughey z/. Bogardus, 1128. McConnell v. Blood, 171, 178. McCormick v. Knef, 1027. xlii INDEX TO CASES CITED. Seferences are io SecttoThS McCotter v. Jay, 966, 985. McCoy V. O'Donnell, 830. McCrackan v. Valentine's Executors, 812. McCraney v. Alden, 645. McCrea v. Purmont, 193. McCrossen v. Harris, 261. McCuUom v. Turpie, Adm'r, 958. McCumber v. Gilman, 253. McCurdy v. Clark, 293. McDaniels v. Colvin, 194, 196, 201. V. FlowerBrookManuf. Co., 449. McDermott v. Hennessy, 919, 1074. McDole V. Purdy, 60. McDonald & Co. v. Kellogg, 17. McDonald v. Mallory, 917. ■V. Mobile Life Ins. Co., 879- McDougal V. Downey, 818. McDougald v. Capron, 444. McFillan v. Hoffman, 610. McGan v. Marshall, 857. McGiven v. Wheelock, 364, 378, 443. McGovern v. Life Ins. Co., 11 25. McGown V. Sandford, 939. V. Wilkiiis, 997. V. Yerks, 734, 852. McGowan v. Branch Bank at Mobile, 787. V. Newman, 810. V. People's Fire Ins. Co., 540. V. Smith, 286, 621. McGregor v. McGregor, 725. McGuire v. Van Pelt, 208. McHany v. Schenk, 971. McHugh V. Smiley, 23. Mcllvain v. Assurance Co., 383. V. Kadel, 605, 607. Mclntyre v. Humphreys, 18. V. Plaisted, 562. McKay v. Green, 52, 72. V. Wakefield, 850. McKeague v. Hanover Fire Ins. Co., 171, 172. McKechnie v. Steriing, 532. McKernan v. Robinson, 1092, 1094. McKillip V. McKillip, 62. McKinney v. Miller, 36, 271. McKinster v. Babcock, 95, 193, 195. McKinstrey v, Merwin, 292, 364, 365, 1083. McKinstry v. Curtis, 273. McKinzie v. Perrill, 106. McKnight v. Clark, 346. V. Gordon, 478. McLane v. Geer, 874. McLaren v. Hartford Fire Ins. Co., 531, 532. V. Watson's Ex'rs, 298. McLaughlin v. Cosgrove, 669. V. Green, 361. V. Teasdale, 955. McLean and Jackson's Appeal, 294. McLean v. Lafayette Bank, 383, 723. V. Tompkins, 685, 798. V. Towle, 685, 722. McLelland v. Coffin, 398. McLoughlin v. Curts, 451. McMahon v. Russell, 242, 620, 624. McMasters v. Wilhelm, 310. McMechan v. Griffing, 492. McMillan v. Otis, 84. V. Richards, 24. McMullin's Adm'r v. Neal, 455. McMurray v. McMurray, 782, 966, 971. McNamara v. Culver, 33. McNeil V. The Tenth National Bank, 319, 322. McPherson v. Housel, 857. V. Rollins, 342. McRea v. Cent. Nat. Bank of Troy, 168. McReth V. Simmons, 53. McReynolds v. Munns, 823. McRimmon v. Martin, 68. McSorley v. Larissa, 682. Mabbett v. White, iii. Mabie v. Hatinger, 419. Macaulay v. Porter, 40, 472. Machette v. Warless, 194. Mack V. Austin, 103, 617. V. Mack, 302. V. Wetzler, 23, 302. Mackellar v. Rogers, 892. Mackenzie v. Alster, 11 12. Macloon v. Smith, 843. Macomber v. The Cambridge Mut. Fire Ins. Co., 533, 542. V. Dunham, 628. Madaris v. Edwards, 363. Madison Avenue Baptist Church v. Baptist Church in Oliver Street, 127, 130, 235, 239, 240, 242, 250, 682. Magnusson v. Williams, 1137. Maguire v. Park, 1 78. Mahagan 7/. Mead, 958. Mahaiwe Bank v. Culver, 1089. Maher v. Lanfrom, 206, 2i5. V. Newbauer, 409. Main v. Ginthirt, 885. S£ferences are to Sections. INDEX TO CASES CITED. xliii Main v. Schwarzwaelder, i66. Maine v. Alexander, 86. Malcolm v. Allen, 234, 794, 818, 949. Mallett V. Page, 431. Malloney v. Horan, 626. Mallory v. West Shore R.R. Co., 229, 230. Manhattan Brass and Manufacturing Co. V. Thompson, 616. Manhattan Life Ins. Co. v. Glover, 617. Manly v. Slason, 69. Mann v. Cooper, 830, 841. Mannings. Elliot, 11 34. V. Moscow Presbyterian So- ciety, 129. V. Tyler, 664. w. Young, 641, 642. Manufacturer's & Mechanic's Bank v. Bank of Pennsylvania, 487. Mapes V. Brown, 754. Maples V. Millon, 160, 166. March v. Lowry, 778. V. Ludlum, 521, 973. Marcy v. Dunlap, 88. Margott V. Renton, 204. Marie v. Garrison, 993. Markham v. O'Connor, 395. Markoe v. Andras, 49, 58. Marks v. Pell, 18, 19, 695. Mario w v. Barlew, 751. Marquat v. Marquat, 46, 52. Marsh v. House, 667. V. Lowry, 778. V. Marsh, 19. V. Pike, 216, 273, 446, 579, 591, 592, 593. 594, 704. 722, 723, V. Ridgway, 929, 983. 7/. Russell, 993. Marshall v. Davies, 261, 593, 594. v. Wing, 400. Marston i/. Brittenham, 230. ■V. Marston, 1083. Martin z/. Alter, 17. V. Beatty, 289. V. Canale, 60. V. Franklin Fire Ins. Co., 551. V. Fridley, 238, 1027. V. Kelley, 681. V. Morris, 767. V. Mowlin, II, 347. V. Rapelye, 204. V. Trumbull, 105. Martin's Appeal, 381. Martindale v. Parsons, 565. Martine v. Lowenstein, 785. Marvin v. Prentice, 37, 426, 710. V. Smith, 626. Marvin v. Vedder, 208, 443. Marvine v. Hymers, 633. Maryland Permanent Land and Build- ing Society of Baltimore v. Smith, 671, 937. Masich v. Shearer, 68. Mason v. Ainsworth, 297. V. Anthoni', 324, 649. V. Beach, 342, 343, 419. ■V. Lord, 310, 647, 649, 657. Masters v. Templeton, 60, 741. Mathews v. Coe, 647. V. Duryea, 622, 1053, 1058, 1 1 54. V. Everett, 281. V. Lindsay, 877. V. Switzler, 362. Matlock V. Todd, 848. Mattair v. Card, 608, 865. V. Payne, 877. Matteson v. Thomas, 451. Matthews, Matter of, 140. V. Aikin, 273, 444. V. Lindsay, 398. v. Porter, 19. V. Sheehan, 34, 38. V. Skinker, 133. Mathewson v. Western Assurance Co., 561. Mattix V. Neaud, 17, 60. Matzen v. Schaeffer, 448. Matzon v. Griffin, 167. Maxfield v. Willey, 28. May V. Borel, 488. V. Gates, 675. V. Le Clair, 22. V. May, 933, 967, 969, 979, ion. Mayer v. Grottendick, 208. v. Salisbury, 913. Mayor, etc., of Alexandria v. Patten, 360. Mazuzan v. Mead, 661. Meacham v. Steele, 381. Mead v. Hous. and N. R.R. Co., 778. V. Leavitt, 308. V. Mitchell, 736. V. Parker, 459, 1089. V. York, 208, 439, 443. Meador v. Meador, 43. Mears v. Kearney, 48, 71. Mechanic's Bank v. Bank of Niagara, 294. V. Edwards, 652. V. Godwin, 106. V. N. Y. and N. H. R.R. Co., 326. z'.Townsend,326,329. xliv INDEX TO CASES CITED. Mechanic's Bank of Williamsburgh v. Foster, 664. Mechanic's Building Ass'n v. Ferguson, 420. Mechanic's Savings Bank v. GoflF, 593. Mechanic's and Trader's Bank v. Rob- erts, 877. Medley v. Elliot, 263. Medsker v. Parker, 625. Meech v. Bennett, 993. V. Ensign, 576, 590. Meehan v. Forrester, 21, 22. V. Williams, 492. Meeker v. Claghorn, 570. V. Wright, 113, 609. Meeks v. Whately, 341. Megargle's Adm'r v. Megargle, 391. Megary v. Funtis, 354. Meigs V. Rinaldo, 901. V. Willis, 751, 843, 877, 1031, 1037. Meley v. Collins, 345. Melick V. Dayton, 867. Menagh v. Whitwell, 105. Mercantile Mutual Ins. Co. v. Calebs, 562. Merchant v. Thompson, 608. Merchant's Bank v. "Thomson, 751, 843, 844, 995, 1018. Merchant's Ex. Bank v. Commission. Warehouse Co., 647, 653, 663, 664, 665. Merchant's Ins. Co.w. Grant, 134: V. Hinman, 218, 221, 723, 976. Merchant's Nat. Bank of St. Paul v. Southwick, 644. Meriam v. Harsen, 464. Merrill v. Agricultural Ins. Co., 542. V. Chase, 439, 442. V. Smith, 95. V. Swift, 194, 200. Merriman v. Hyde, 482. V. Moore, 565, 590. Merritt v. Bartholick, 23, 26, 227, 302, 304- ' V. Home, 1138. V. Hosmer, 680. V. Judd, 173. V. Lincoln, 218, 221, 224. V. Yates, 464. Merwin v. Star Fire Ins. Co., 533. Mescall v. Tully, 742. Methodist Episcopal Church v. Jaques, 908. Metz V. Todd, 215. Meyer v. Bishop, 924. Meyer v. Lathrop, 216. V. Muscatine, 633. V. Patterson, 924. Michigan Panelling Co. v. Parvell, 433- Michigan State Ins. Co. v. Lewis, 540. Michigan State Ins. Co. v. Soule, 273, 274. Mickles v. Dillaye, 254, 255, 338, 698, 700, 711. V. Maxfield, 273. V. Townsend, 24, 26, 310, 312, 338, 363. 364- Middlesex v. Thomas, 434. Middletown Savings Bank w.Bacharach, 29. Milk V. Christie, 467. Millandon v. Brugiere, 913. Miller v. Aldrich, 546. V. Ansenig, 18. V. Avery, 863. V. Bowles, 885. V. Burke, 942. V. Burroughs, 628. V. Case, 877, 964, 1039, 1042. V. Collyer, 995. V. Holbrooic, 206. W.Hull, 643, 778, 938, 977, 1123. V. Kerr, 662. V. Kolb, 1016. V. Lindsey, 370. V. Lockwood, 194. V. McCan, 213, 219, 668. V. Macomb, 1000. V. Plumb, 166. V. Remley, 818. V. Whittier, 196. V. Winchell, 447, 577. Mills V. Bliss, 771. V. Comstock, 472. V. Dennis, 775, 812, 841, 953, 1077, 1080. V. Shepard, 149. V. Van Voorhies, 621, 731, 781. V. Watson, 216, 273, 577. Millspaugh v. McBride, 364, 365. Miner v. Beekman, 255, 448, 693, 694, 695, 697, 698, 709, 711. V. Sheehan, 96. Minnesota v. St. Paul Co., 158. Mingus V. Condit, 105. Minn v. Berkshire, 447. Minor v. Hill, Adm'r, 11 19. V. Perry, 565. V. Terry, 596. Minturn v. Farmer's Trust Co., 665. Heferences are to iSections INDEX TO CASES CITED. xlv Mississippi Valley R.R. Co. v. Chicago, St. Louis & N. O. R.R, Co., 159. •Mitchell V. Bartlett, 885, 1020, 1021, 1 148. V. Bowne, 831. V. Clark, 341. V. Cook, 334. V. Coombs, 94. V. Reed, 154. V. Smock, 455. Mix V. Andes Ins. Co., 113, 530, 609. V. Hotchkiss, 261, 552, 792. Moakley v. Riggs, 227. Moffett V. Roche, 275, 279. Mohawk Bank v. Atwater, 951. Mohr V. Manniere, 143. MoUan v. Griffith, 266. MoUer v. Duryee, 1 54, 934. V. Muller, 741, 937. Monell V. Smith, [92, 194. Monio V. Perkins, 628. Monroe v. Poormun, 462. Montague v. Boston & Albany R.R., 259. v. Dawes, iioi. Montgomery v. Chadwick, 256. V. Merrill, 160. V. Scott, 848. V. Spect, 33. Moor V. Falk, 813. Moore, Matter of, 557, 561. V. Beasom, 448. V. Cable, 246, 253, 256, 258, 259, 695. V. Cameron, 228. V. Degraw, 251. V. Dunn, 269. V. Fuller, 608. V. Hamilton, 365. V. Harrisburg Bank, 364. V. Ingram, 52. V. Madden, 18. V. Metropolitan National Bank, 310, 311, 318, 319, 322. V. Moore, 275. V. Ragland, 192. V. Shaw, 832. V. Sloan, 307, 334, 470, 498, 503. V. Thomas, 445. V. Titman, 293. V. Ware, 294. Moore's Appeal, 571, 573. Morford v. Davis, 660, 662. Morgan z/. Donovan, 159. V. Louisiana, 114. V. Martin, 229. V. Plumb, 1083. Morgan v. Shinn, 674. V. Smith, 217. V. Walbridge, 255. Moring v. Dickerson, 284. Morrell v. Dickey, 351, 727. V. Noyes, 158. Morrill v. Morrill, 193. Morris v. Bacon, 301, 309. V. Budlong, 34, 248. V. Floyd, 652, 653. V. Keyes, 461. V. Morange, 835. V. Morris, Adm'r, 849. V. Mowatt, 26, 767, 997, 998, ion. V. Tillson, 94. V. Tuthill, 884. V. Wads worth, 475. V. Wheeler, 740, 852, 909, 914. V. Woodward, 980. Morrison v. Bank of Commerce, 29. V. Beckwith, 958. V. Brand, 33, 39, 474. V. McLeod, 256. V. March, 492. ■ V. Morrison, 403, 817. V. Robinson, 682. Morrow v. Turney, 252. V. U. S. Mortgage Co., 294. Morse v. Byam, 11 18. V. Curtis, 499. Morton v. Thurber, 636. Moses V. Murgatroyd, 1062. Mosely v. Marshall, 269. Mosher v. Campbell, 424, 426. V. Vehue, 162. Moshier v. Norton, 247. Moss, Matter of, 1153. V. Shear, 29. Motley V. Manufacturer's Ins. Co., 552. Mott V. Clark, 499. V. Mott, 1003. V. Walkley, 972, 973, 983, 988. Mount ?/. Potts, 381. Mower v. Pitt, 809. Mowry v. Bishop, 631, 633. f. Sanborn, 195, 1104, 1110, 1 119, 1 144, 1 147, 114S, 1150, 1151. Moyer v. Hinman, 492, 765. V. Shoemaker, 859. Muldon V. Whitlock, 391. Mulford V. Muller, 18. V. Peterson, 364, 365. MuUanphy v. Simpson, 680. Mulligan's Appeal, 271, MuUison's Appeal, 639. xlvi INDEX TO CASES CITED. Eeferences are to Sections. Mullison's Estate, 314. Mulvey v. Gibbons, 698. Mundy v. \Vhittemore, 308, 608. Munn V. Commission Co., 639, 661. Munro v. Merchant, 235. Munson, Matter of, 152. V. Dyett, 569, S90. Murdock v. Empie, 979. V. Ford, 293. V. Gifford, 171. Murphy v. Elliot, 363. V. Nathans, 493. Murray v. Ballou, 478, 755. V. Barney, 652. V. Blatchford, 299, 347, 348. V. Deyo, 834. V. Harway, looo. V. Judson, 647, 659. V. Lylburn, 310, 312, 649, 755. V. Marshall, 213, 216. ■V. Smith, 565, 573, 596. V. Walker, 18, 1097. Musgrove v. Bouser, 487. Mutual Benefit Life Ins. Co. v. How- ell, 597. Mutual Ins. Co. v. Transchnicht, 1065. Mutual L. Ins. Co. v. Antlfony, 1073. V. Balch, 531, 532. V. Belknap, 896. V. Bigler, 183. V. Bowen, 647, 847, 1044, 1046, 1052. V. Dake, 467^ 470, 1029. V. Davies, 223, 594. V. Hunt, 141, 1005. •V. Kashaw, 641. V. Nat. Bank of Newburgh, 183, ■V. Sage, 935. V. Salem, 1048. V. Spicer, 904. V. Sturges, 347. V. Tallman, 532. V. Wilcox, 458. Mutual Safety Ins. Co. v. Hone, 541. Myers' Appeal, 194. Myers v. Buchanan, 467. V. Dorman, 993. V. Estell, 885. V. First National Bank, 213. V. Storms, 79. Myrick v. Selden, 772. Naarz/. Union, etc.. Land Co., 827. Nagle V. Taggart, 781. Naitner v. Tappey, 212. Nash V. Mitchell, 617. National Bank v. Gunhouse, 2op. V. Lewis, 664. V. Peck, 229. V. Piemer, 858. National Bank of Genesee v. Whitney, 132. National Bank of Metropolis v. Orcutt, 664. National Bank of Newburgh v. Bigler, 394- National Bank of Norwalk v. Lanier, 46. National Bank of Topeka v. Rowill, 132. National Fire Ins. Co. v. Loomis, 992, 995- V. McKay, 27, 870, 871. National State Bank v. Hibbard, 1069. Nay lor z/. Throckmorton, 281. Neal v. Allison, 361. Neale v. Reid, 546. Nealis v. Bussing, 903. NefTz/. Crumbaker, 67. Neilson v. Blight, 300. Neligh V. Michenor, 458. Nelson v. Boyce, 192, 200, 201. •v. Drake, iii, 115. V. Hall, 867. V. Iowa & Eastern R.R. Co., 199. V. Montgomery, 913. V. Pinegar, i8i. New V. Wheaton, 21. New Bedford Institution v. Fairhaven Bank, 455. Newcomb v. Bonham, 674. ■V. Hale, 225, 227. Newell V. Hill, 575. V, Pennick, 692. V. Whigham, 156, 1034. Newhall v. Burt, 16. N. J. Franklinite Co. v. Ames, 738. Newkirk v. Newkirk, 192. Newman v. Dickson, 877. New Orleans National Bank v. Ray- mond, 133. New Orleans, etc., R.R. Co. v. Harris, 114. Newsam v. Finch, 206, 214. Newton v. Sly, 625. V. Stanley, 726. N. Y. Fire & Marine Ins. Co. v. Bur- rell, 914, 917. N. Y. Ins. Co. V. Howard, 360. N. Y. Life Ins. Co. v. Glass, 889. B&ferences are to Sections. INDEX TO CASES CITED. xlvii N. Y. Life Ins. Co. v. Meeker, 365. V. Vanderbilt, 1074. V. White, 472, 473, 480, 511. N.Y. L. Ins. & Trust Co. v. Bailey, 731. V. Beebe, 331. V. Covert,4i3. V. Cutler, 271, 958, 964, 1031,1033. V. Man n i n g, 631. V. Milnor,27i, 381, 822, 845, 963- ^'. Rand, 1033, 1035- V. Smith, 334, 497, 498. V. Staats, 511. V. Vanderbilt, 271,1056. Nice's Appeal, 482. NichoU V. Nicholl, 966, 971. Nichols V. Baxter, 546. V. Briggs, 414. V. Frothingham, 99. z/. Hill, 881. ■V. Iremonger, 881. V. Lee, 338. V. Nussbaum, 324, 329, 649. Tj. Smith, 1090. ii. Weed Sewing Machine Co., 884. Niemcewicz v. Gahn, 275, 383, 394. Nightingale v. Maginnis, 671. Niles V. Coult, 271. V. Harmon, 958. V. Nye, 626. V. Ransford, 240. Niven v, Belknap, 345. Nodine v. Greenfield, 734, 736. Noe V. Gibson, 904. Nolte V. Libbert, Adm'r, 719. Noonan v. Ilsey, 859. v. Lee, 228. Norbury v. Seeley, 877. Norris v. Morrison, 624. V. Wood, 325. North American Fire Ins. Co. v. Handy, 828. North River Bank v. Rogers, 855, 1087. Northampton Bank v. Balliet, 304. Northern Ins. Co. of N. Y. v. Wright, 227. Northrop v. Sumney, 867. Northrupz'. Wheeler, 1113. Norton v. Warner, 353, 675, 718, 723. V. Whiting, 919. Norwalk Bank v. Sawyer, 105, 106. Norwich Fire Ins. Co. v. Boonier, 562. Norwood V. De Hart, 590. Nosier v. Haynes, 336, 337, 439. Nott V. Hill, 801. Noyes v. Clark, 228, 231, 232. V. Hall, 492. V. Patrick, 96. V. White, 294. Nugent V. Riley, 575. Oakes v. Estate of Buckley, 859. O'Brien v. Ferguson, 667. V. Young, 628, 629. O'Conner v. Shipman, 232. Odell V. Hoyt, 234. V. Montross, 30, 677, 678, 679, 713- V. Wilson, 844. ©'Dougherty v. Felt, 188. V. Remington Paper Co., 380, 718. O'Hara v. Baum, 198. V. Brophy, 796, 908, 912. V. Haas, 444, 455. Ohio and Mississippi R.R. Co. v. Kas- son, 647. Olcott V. Heermanns, 349. V. Robinson, 928. Olds V. Cummings, 308. Olendorf v. Union Bank, 206. Oliphant t/. Esterly, 208. Oliver i/. Decatur, 895. V. Piatt, 736. Olmstead v. Tarsney, 398. Olmsted v. Elder, 520, 526. Ombony v. Jones, 164. Onderdonk v. Gray, 245. V. Mott, 139. O'Neil V. Capelle, 16. V. Clark, 601, 604. V. Gray, 5, 917. Ontario Bank v. Strong, 811, 815. Oppenheimer z/. Walker, 280,965, 1056. V. Wright, 610. O'Reilly v. Donoghue, 37. Orrick v. Durham, 68. Oriental Financial Corporation v. Over- end, 217. Ornn v. Merchant's National Bank, 133. Ortmann v. Plummer, 52. Orvis V. Powell, 958. Osbom V. Carr, 292. Ostrom V. McCann, 857. xlviii INDEX TO OASES CITED, Beferences are to Sections. Otis V. McMillan, 1140. Ottman -v. Moak, 444. Ould v. Stoddard, 61. Outtrin v. Graves, 11 31. Overstreet v. Baxter, 15. Owen V. Barrow, 354. V. Cawley, 608, 612. V. Moore, 71. Pabodie v. King, 206. Packard v. Kingman, 390, 391. Packer v. Rochester & Syracuse R.R. Co., 23, 24, 1013, 1024, 1026. Page V. Ordway, 196. V. Pierce, 301. V. Waring, 492. Paige V. Cagwin, 332. V. Chapman, 308, 310. Pain V. Packard, 221, 723. Paine v. Jones, 216, 592. V. Smith, 995. V. Upton, 1007. Palmer z*. Bates, 11 29, Palk ■!/. Clinton, 713. Palmer v. Foote, 1084. V. Guernsey, 1 5, 40. V. Mead, 1075. V. Miller, 134. V. Simpson, 66. ■z/. Snell, 279. V. Windrom, 850. Pancoast v. Duval, 948. Parfitt V. Warner, 981. Paris V. Hulett, 1075. Park Commissioners v. Todd, 149, Parke, ^. Neeley, 478. Parker v. Browning, 903. V. Child, 379, 1027, 1030, 1081. V. Hartt, 873. V. Jeaks, 598. Pardee v. Stewart, 1024, 1026. V. Treat, 33, 584, 585. V. Van Auken, 363, 685, 687, • 702. Parkinson v. Hanbury, 243, 248. V. Jacobson, 859. V. Sherman, 880. Parkist v. Alexander, 50, 292, 458. Parkman v. Welch, 386. Parks V. Jackson, 64, 66, 288, 765. ■V. Morris Axe & Tool Co., 333. v. Parks, 19. Parmelee v. Dann, 298, 300. Parmentier v. Gillespie, 201. Parmer v. Parmer, 30. Parsell v. Thayer, 1 5. Parshall v. Lamoreaux, 660. Parson z'. Wells, 700. Parsons v. Hoyt, 284. V. Lent, 472. V. Lyman, 351, 727. Partridge v. Swazey, 478. Patchin v. Pearce, 206. Paterson v. Clark, 188. Paton o. Murray, 725, 735. Patrick v. Eels, 905. Patrick's Appeal, 294. Patterson v. Birdsall, 377, 434, 450. V. Clark, 671. V. Edwards, 62. V. Triumph Ins. Co., 551. V. Yeaton, 30, 678. Pattison v. Hull, 298, 300, 342, 361. V. Powers, 854, 1092. Pattoii V. Accessory Transit Co., 237, 889. V. Adkins, 571. Patty V. Pease, 271, 383, 385, 388,958. Paulus V. Latta, 492. Paulding v. The Chrome Steel Co., 1 22. Pauley v. Canthorn, 731. Payn v. Grant, 844. Payne v. Avery, 475. V. Becker, 626. V. Burnham, 324, 325, 327, 616, 618, 649. V. Hook, 741. V. Patterson, 16. V. Wilson, 46, 49, 58, 63, 66, 342, 364- Payse v. McGuire, 73. Peabody v. Roberts, 693, 694, 730,731, 1028. V. Tarbell, 22. Pearce v. Wilson, 1 5, 849. Pearsall v. Kingsland, 647. Pease v. Warren, 302. Peckham v. Haddock, 48, 439, 442. Peck V. Knickerbocker Ice Co., 1020, 1034. V. Mallams, 410, 724. v. Minot, 335, 362, 441. V. N. Y. & N. J. R.R. Co., 977, 987. Peet V. Beers, 448. Pell z-. Ulmar, 235, 519, 520, 526, 699, 1098. Pence v. Armstrong, 79, 455. Pendleton v. Fay, 310. Penfield v. Goodrich, 216. V. James, 915. Penn. Mut. Life Ins. Co. v. Semple, 181. Penny v, Corwithe, 87. Seferences are to Sections. INDEX TO CASES CITED. xlix Pensineau v. Pulhman, 13. People V. Beebe, 836. V. Berner, 224. V. Board of Stock Brokers, looi. V. Colborne, 1 1 53. V. Erie Railway Co., 754. V. Globe Mutual Ins. Co., 1002. V. Keyser, 343, 347, 348, 421, 724. V. Knickerbocker Life Ins. Co., 626. V. Merchant's Bank, 990. V. Miner, 348. V. New York Central Railroad Co., 987. V. Prescott, 1117. V. Sigel, 348. V. Ulster Common Pleas, 1154. People ex rel. Ainslee v. Hewlett, 18, 632. Bridenbecker v. Pres- cott, 1159. Day V. Bergen, 935. Grissler v. Stuyvesant, 155- Johnson v. Nevins, 143. Tremont Bank v. Con- nolly, 765. Weber v. Herbel, 955. People's Bank v. Pearson, 213. Pepper v. Shepherd, 955. Percival v. Gale, 197. Perdue v. Aldridge, 790. Perean v. Frederick, 88, 462. Ferine v. Dunn, 714, 715, 716, 1083. Perkins v. Keller, 1109. V. Squeer, 216. V. West, 18, 492. Perot V. Lavassuer, 342. Perrin v. Kellogg, 94. Perrine v. Striker, 667. Perry v. Board of Missions of Albany, 48, 71. Peterson v. Chem. Bank, 298, 352, 727. V. Clark, 15, 191. Petry v. Ambrosher, 66, 742. Pettengrill v. Mather, 423. Pettibone v. Griswold, 95, 203. V. Stevens, 279. Pettus V. McGowan, 498. V. McKinney, 52. Petty V. Mays, 1021. V. Styward, 347. Peugh V. Davis, 18, 38, 248, 674. Peyser v. McCormack, 795. Pfettz V. Pfettz, 238. Phelan v. Boylan, 29. Phelan v. Olney, 301. Phelps V. Johnson, 374. V. Sullivan, 298. V. Wood, 908. Philad., etc., R.R. Co. v. Woelpper, 158. Philbrook v. Clark, 41 1. Phillip V. Gallant, 329. Phillips V. Bank of Lewistown, 304. V. Croft, 19. V. Hulsizer, 15, 18. V. Mackeller, 637, 641, 642. V. Walker, 941. V. Winston, 158. Phinney v. Day, 29, 167. Phippen v. Stickney, 993. Phoenix Ins. Co. v. Floyd, 544, 545, 564. V. Mut. Life Ins. Co., 540. Phyfe V. Riley, 235, 241, 699, 1098. V. Warden, 55, 154. Pickard v. Sears, 345. Pickett V. Barron, 334, 498. V. Jones, 298. Pico V. Gallardo, 21. Pierce v. Balkam, 787. V. Emery, 158. V. George, 180. V. Goddard, 167, 179, 189. V. Goldsberry, 206. V. Robinson, 38. V. Tiersch, 865. Pierson v. Hooker, 347. Pigott's Case, 88. Pike V. Goodnow, 413. V. Seiter, 570. Pinnell v. Boyd, 652, 878. Pique V. Arendale, 492. Piser V. Lockwood, 780, 998. Pitney v. Leonard, 489, 764. Pitts V. Parker, 52. Plant V. Shryock, 459. Planter's Bank v. Dodson, 448. Piatt V. Brick, 686. V. Gilchrist, 863. V. Griffith, 199. V. Newcomb, 324, 331, 649. V. Piatt, 966. V. Squire, 295. Plimpton V. Ins. Co., 546. Plumb V. Cattaraugus Ins. Co., 328, 649. V. Robinson, 691. Poillon V. Martin, 317. Polhemus v. Tfainor, 154. Pollard V. Noyes, 624. Pomroy v. Rice, 390. 1 IKDEX TO CASES CITED. Heferences c^re to semmi: Pond V. Clark, 211, 390. Ponder v. Ritzinger, 391. V. Tate, 887. Pool V. Horton, 587. Poole V. Johnson, 255. Pope V. Burrage, 11 28. V. Jackson, 174. V. Mead, 285. Port V. Embree, 482. Porter v. Barclay, 741. V. Lord, 779. V. Muller, 86, 565, 731. V. Nelson, 40. V. Read, 444. V. Woodruff; 66_. Post V. Bank of Utica, 648, 652, 666, 667,708. ' " - V. Bernheimer, looi. V. Carmalt, 310. V. Dart, 64^, 652, 657. ■». Dorr, 886, 896, 898, V. Embree, 291. V. Kearney, 155. V. Leet, 936, 1008. V. Robbins, 208. Potter V. Crandell, 721. V. Cromwell, 168, 178. V. Rowland,; 759, 763. Potts V. Plaisted, 398, 400. Poughkfeepsie Savings Bank v. Winn, 935- Powell V. Conant, 91. V. Smith, 341, 366, 414. v. Tuttle, -526. V. Waters, 638, 639, 645. V. Williams', 252. Power z'. Lester, 23, 27, 113, 302, 372, 626. Powers V. Dennison, 167, 1 80. V. Trenpr, 819. ' Powesheik z/. Dennison, 1119.. Pratt V. Adams, 647, 659. '' V. Bank of Bennington, 368,. 500. V. Clark, 71. ' ~ ' ' V. Hoag, 758, 771. V. Huggins, 14, 341, 4i;4., 11. Ramsdell, 690, 914. V. Stearns, 210. V. Stiles, 908. V. Tinkcom, 1 109. V. Van Wyck's Ex'r, 71. Prentice v. Kiiickerbocter Life Ins. Co., 543- Prentiss v. Cornell, 1005. Prescott V. Trueman, 765. Preston v. Briggs, 167, 174, 180. V. EUingtofl, 58. Preston v. Henning, 206. Price V. Bray ton, 160. V. Cutts, 46. V. Grgver, 195. V. Karnes, 19,' Prickett v. Seybert, 48. Prinele 7/. Dunn, 464. Probst V. Brock, 162/. Proctor V. Farnham, 995, 996. V, Robinson, 726. v'. Thrall, 395. Prouty V, Eaton, 361, 362, 84^. V. I'rice, 366, 847. ' Providence Co. Bank z/. Benson, 546. Pryorz/. Wood, 310. Pueblo & A. V. R..R, Co. v. Beshoas, 24. > ■ ■■. Purdy f, Dpyle, 1059. V. Huntingtori; 302, 314, 370, 458,497,4^8, 502. - Purnell i^. Vaughari, 11 39. Piirser v. Andets.oh, 208, 330, 441, 443. Pursley J/. Forth, 337. Putnam v. Clark, 321. ' vl CoUamore, 363. V, Lewis, 391. V. Ritchie, 255, 698, 711. Pyle V. Pennock, 178. Quaw V. Lameraux, 962, 976. Quinby w. Manhattan Cloth & Paper Co., 172. ■■ ' ■ Quincy v. Cheeseman, 890. Quinn v. Brittaini "23^, 245, 253, 675, 798, 709, 8S9, " • ' - Quirk v. Rodman, 36. Race V. Gilbert, 941. Radcliffz/. Rowley,; 425. Rahway Savings Inst: v. Irving Street Baptist Churchj 171. ' " '' " Rammelsberg^ v. Mitchell, 105. Ramsey i/. IDaniels, 448. ' Rar)d3.11 v. Lovyer, 27. ' I/. R'aab, S35. V. Sanders, 33, 35^, 36, Randell v. VOti Ejlert, 940J' Randfield v., Randfield, 964. Randle v. Boyd, 844. Randlet v. Herl'en, 859. Randolph v, Wilsoh, 598. Rankin v. Refornied Protestaiyt Dutch Church, 789. ' ■'"■'' "• ' Ranney v. Hardy, 492.. V. McMuUen, '602. V. Peyser, 898, S99. Rapalye v, Rapalye, 267. toSecHons, INDEX TO OASES CITED. Rapelye v. Anderson, 66i, 829. V. Prince, 261, 448, 691, 809. Rapp V. Stoner, 573. Rardin v. WaJpole, 451. Rathbone v. Clark, 822, 960, 963, 1 1 20. V. Hooney, 730, 751,843,844. V. Warren, 213. Rawiszer v. Hamilton,, 364, 1034. Rawson v. Lampman, 284, 736, 856. Rawson's Adm'xz/. Copeland, 575, 596. Rray V. Adams, 42, 46, 286. V. Oliver, 929. Raymond v. Holborn, 1027; Raynoi: v. Lyons, 22. V. Ray nor, 303, 623, 624, 11 13. V. Selmes, 711, 986, ion, 1012, 1027. V. Wilson, 478. Reading v. Weston, 652. V. Worton, 33. Reagan v. Hadley, 445. Real Estate Trust Co. v. Balch, 598. V. Keech, 671. v. Rader, 324, 671. V. Sea g reave, 324, 649. Rector, etc., Christ P. E. Church v. Mack, 937, 1013, 1024,, 1025. Redden v. Miller, 11 36. Reddick v. Gressman, 8i8. Reddish v. Ritchie, 310. Redman v. Punington, 228. Redmond v. Packenham,, 1129, Reed v. BulUngton, 341. V. Eastman, 652. V. Gannon, 489, 490. V. King, 445. V. Latson, 873, 880, 883. V. McKee, 849. V, Marble, 334^ 498, 731, 1031. V. Ounby, 290. V. Reed, 36. Reeder -v. Nay, 389. Reel V. Wilson, 767. Rees V. Overbaugb, 88. Reese v. Kinkead, 52. V. Rutherfurd, 629. V. Scully^ 308, 310. Reeside v. Peter, 929. Reeves v. Hayes, 308, 334., V. Kimball, 310. Reformed Dutch Church in Saugerties, Matter of the, 126, 128. Reid V. McCrum, 547. V. Middleton, 904. V. Sprague, 322. Reinback v. Crabtree, 664. Reineman v. Robb, 310. Reinig v. Hecht, 831. Remington v. Palmer, 56.5. Remington Paper Co. v. O'Dougherty, 425. Remsen v. Beekman,,22l, 222, 594, 723. V. Hay, 678. Renard v. Brown, 1027. Renand v. Conselyea, 724. Rensselaer & Saratoga R.R. Co. v. Davis, 919. Renwick v. Macomb, 1039. Requa v. Rea, 966, 967, 983, 995, 101 1. Rexford v. Widger, 648, 652, 667. Reynolds v. Dishon, 410, 837. V. Lounsbury, 327. V. Munns, 987. V. Ward, 206. Rhoades v. Canfield, 460. Rhodes v. Buckland, 1130. V. Dutcher, 996. V. Evans, 750, 831. Ricard v. Sanderson, 584, 598. Rice V. Barrett, looi, loio. V. Dewey, 167, 376, 392, 495. V. Goddard, 600, 861, 869. V. Harbeson, 269, 279. V. Mather, 638. V. Mormer, 96. V. Rice,.i4. Rich V. Doane, 37, 38. Richards w. McPherson, 60. v. MerrimacR.R. Co., 114. V. N. W. Protestant Churchy 128. V. Richards, 941. V. Warring) 310. Richardson v. Baker, 71. V. Codding^on, 360. V. Hamblett, 48. V. Jones, 995. V. McKim, 293. V. Wright, 376.. Richmond'!/. Gray, looi. Riddle v. George, 281. Rider, Matter of, 973. V. Bagley, 8S7, 896. Rider v. Vrooman, 896, 898. Rigby, ex par U, 299. Riggs V. Purcell, 157, 1006. V. Purssell, 324. Rigler v. Light, 281. Rigney v. Lovejoy, 435, 448. Riley v. Hoyt, 487, 491. V. Rice, 879. v. Sexton, 459. m INDEX TO CASES CITED. References are to Sections, Ring'Z'. Steele, 481. Ring's Ex'r v. Woodruff, 261. Ripley v. Harris, 1 32, 200. Risk V. Hoffman, 446. Ritch v. Smith, 206, 215. Ritter 7/. Phillips, 202, 628, 880. •v. Worth, 464. River Clyde Trustees v. Duncan, 354. Roach V. Cosine, 15. Robbins 7/. Cheek, lor. V. Todman, 437. V. Wells, 727. Roberts v. Cocke, 98. V. Fleming, 255. V. Halstead, 300, 301, 418. •V. Jackson, 496. V. Mansfield, 293, 294. V. Stigleman, 720. V. Sutherlin, 235. V. Wiggin, 856. V. Wood, 341, 843. Robertson v. Campbell, 38. V. Cossett, 174. Robinson v. Bates, 626. z>. Brennan, 79, 933. V. Cropsey, 18, 31, 33, 36. V. Glass, 848. V. Leavitt, 435, 448. V. McGregor, 1064. V. Meigs, 970. V. Pebworth, 493. V. Preswick, 166, 176, i8i, 892. V. Robinson, 268, 275. -v. Russell, 185. V. Ryan, 238, 261, 304, 448, 691, 692,711,809, 1027, 1081, mo, 1137, 1142. V. Stewart, 448. V. Willoughby, 33. V. Williams, 66, 192, 194, 200, 203, 288. Rochester Savings Bank v. Averell, 119, 122. Rockwell V. Hobby, 42, 44, 66. V. Humphrey, 38. Roddam v. Morley, 413. Roddy's Appeal, 275. Roder v. Ervin, 298. Roderigas v. East River Savings Inst'n, 359. Rodgers v. Bonner, 765. Rodman v. Sanders, 53. Rogers v. Abbott, 290. V. De Forest, 84. V. Dill, 139. V. Eagle Fire Ins. Co., 575. Rogers v. Herron, 252. ■V. Hosack's Ex'rs, 562. V. Ivers, 1050. V. McLean, 997. ■V. Traders' Ins. Co., 211, 389, 390. 537- Rolston V. Brockway, 301. Roney v. Moss, 103. Roosevelt v. Bull's Head Bank, 400. V. Carpenter, 269, 1086. w EUithorp, 787, 911, 1065. V. Gardiner, 467. Roosevelt Hospital v. Dowley, 741. Roosevelt-z/. N. Y. and Harlem R.R. Co., 400. Root V. Collins, 271. V. Wheeler, 1053, 1 1 14, 1 142. V. Wright, 584, 586, 742, 878. Rosa v. Butterfield, 663. V. Jenkins, 909, 913, 917. Rose V. Kimball, 306. V. Meyer, 790. 7'. Rose, 432. V. Watson, 682. Rosevelt v. Bank of Niagara, 311, 360, 675, 685. Ross V. Boardman, 1030, 1077. Ross & Co's & Elsbrie's Appeal, 464. Ross V. Shurtleff, 71. V. Terry, 304, 333, 1089. V. Worthington, 494. Roussel V. St. Nicholas Ins. Co., 552. Rowan v. Sharpe's Rifle Mfg. Co., 199. Rowe V. Ream, 492. Rowell V. Mitchell, 396. Rubens v. Prindle, 216, 228, 234, 273, 591- Ruckman v. Astor, 700. Rue V. Doll, 40. Ruhe V. Law, 995. Runyan v. Mesereau, 23, 302, 347. V. Stewart, 453. Rushmore v. Gracie, 749. Russell V. Allen, 273. V. Austin, 624. V. Duflon, 1 1 54. V. Ely, 235. V. Kinney, 202, 880. V. Miner, 431, 445. V. Pistor, 274, 338, 363, 378, 446, 581, 592. V. Southard, 37, 562. V. Weinberg, 222, 594. V. Whitely, 1027. V. Winne, 96. Ryan v. Dox, 13, 18, 990. V. Preston, 532. Befermuies are to SeMona. INDEX TO CASES CITED. liii Ryder v. Gaes, 339. Ryerson v. Willis, 868. Sage V. McLaughlin, 1075. Sager v. Tupper, 271. Sahler v. Signer, 13, 235, 367. Sailly V, Elmore, 222, 226. St. Andrew's Church v. Tompkins, 203, 292. St. John V. Bumpstead, 235, iioi. V. Palmer, 333. V. Spaulding, 458, 499. St. Joseph Mfg. Co. v. Daggett, 963. Sales V. Lusk, 887. Salisbury v. Philips, 102. Salmon v. Allen, 377, 711, 1028, 1081. Sammis v. Mathews, 638. Sample v. Rowe, 301. Sanborn v. Osgood, 865. Sanders v. Farrell, 836. V. Hooper, 862. V. Lake Shore & Michigan Southern Railway, 629. V. McDonald, 758, 1027. V. Wilson, 248. Sandford v. Bulkley, 720. V. Travers, 600, 859, 863. Sands Ale Brewing Co., Re, 546, 547. Sands v. Church, 653. V. Pfeififer, 172, 178. Sanford v. Hill, 271. V. McLean, 449. V, Sanford, 1005. Saunders v. Frost, 920. V. Stewart, 18. Savage v. Howard Ins. Co., 540. V. Long Island Ins. Co., 284, 856. V. Scott, 94. Saville v. Saville, 995. Savings Bank v. Grewe, 298. V. Munson, 381. Savings Bank of Utica v. Wood, 965, 1056. Saving & Loan Soc. v. Gibb, 109. V. Meeks, 850. Sawyer v. Lyon, 684. V. Pritchett, 308. V. Weaver, 574. Saxton V. Hitchcock, 31, 38. Sayles z/. Smith, 1123. Sayre v. Austin, 628. V. Hewes, 200, 296. Scarborough v. Stinson, 259. Scarry v. Eldridge, 790. Schafer v. Reilly, 311, 314, 323. Schaffz/. O'Brien, 1092. Scharck v, Shriner, 271, 383, 385. Scheibe v, Kennedy, 818. Schell V. Stein, 470. Schenck w. Kelley, 28, 243, 263. Schen 7/. Lehning, looi. Schermerhorn v. Talman, 666, 667, 708, 709. V. Prouty, 941. Schiffer v. Feagin, 94. Schley v. Fryer, 569, 572. Schmidt v. Hoyt, 290. Schmucker v. Sibert, 413, 566. Schroepel v. Shaw, 218, 219, 221. Schroeppel v. Corning, 639, 647. Schryver v. Teller, 271, 958. Schultz V. Pulver, 351. Schulze V. Bolting, 200. Schumber v. Dillard, 482. Schutt V. Large, 481. Schwinger v. Hickok, 828. Schwickerath v. Cooksey, 850. Scofield V. Doscher, 827, 1090, 1091. V. State Nat. Bank of Lincoln, 133. Scott V. Brest, 258. V. Frink, 204. V. Gallagher, 492. V. Johnson, 664. V. Stockwell, 206, 212, 214. V. Trustees, etc., 115. Scranton v. Clark, 333. Scrivner v. Dietz, 845. Sea Ins. Co. v. Stebbins, 237, 885, 889, 892, 904, 905. Seaman v. Hicks, 767, 997, 1009. Seaver v. Durant, 235, 700. Sebring v. Conklin, 877. Second Baptist Society in Canaan, Mat- ter of the, 128. Security Fire Ins. Co. v. Martin, 811, 812. Sedgwick v. Fish, 937. V. HoUenbaek, 23. V. Johnson, 300. Selchow V. Stymus, 565. Selden v. Mann, 181, 186. Selkirk v. Wood, 788. Selleck v. French, 98. Sellwood V. Gray, 1027. Semon v. Terhune, 478. Seton V. Slade, 674. Severance v. Griffith, 14, 102, 303. Seward v. Huntingfton, 455, 1027. Seymour v. Canandaig^a R.R. Co., 47. V. De Lancey, 1000, 1003. V. McKinstry, 484. Shaeffer v. Chambers, 245, 247, 248. liy IKDEX TO CASES CITED. Beferenoea are Shafer v. Bear River, etc., Mining Go., 103. V. Reilly, 332. Shanahan v. Perry, 574. Shannon v. Hall, 467. Shapley v. Abbott, 328, 649. Sharp z/. Barker, 228, 232, 261. V. Cutler, 813. V. Shea, 477. V. -Wyokoif, 628. Shattuck V. Lamb, 863. Shawe/. Bell, 158. V. Carpenter, 92. V. D wight, 425. V. Heisey, 1077. V. Hoadley, 742. V. McNish, 734. V. Newsam, 293. Shaver v. Williams, 433. Shays v. Norton, 15, 19. Shear v. Robinson, 462. Shearer I/. Shearer, loj, 108. Shed V. 'Garfield, 790. Sheddy v. Gerau, 336. Sheehan v. Meyer, 154. Sheehy v. Mandeville, 98. Sheffield's Ex'r v. McClain, 338. Shelden v. Bennett, 720. Sheldon v. Edwards, 167, 364. V. Ferris, 270, 363. V. Haxtun, 643. V. Patterson, 626. V. Wright, 928. Shepard v. Ins. Co., 540. V. The Mayor, etc., of New York, 149. V. Philbrick, 160. V. Shepard, 113, 203. Shephard v. Little, 193. V. Shephard, 79. Shepherd v. Murdock, 892. Sheppard v. Steele, 360. Sheridan v. Andrews, 773. V. Jackson, 900. Sherill v. Crosby, 519. Sherman v. Dodge, 520, 523. V. Sherman, 340. V. Willett, 160, 163, 565, 1 127, 1151. Sherwood v. Archer, 645. V. Dunbar, 427. V. Hooker, 715, 716. V. The Mayor, etc., of New York, 149. V. Reade, 520, 525. V. Wilson, 423. Scheuy v. Latta, 295, Shields v. Lozear, 240. Shillaber v. Robinson, 13. Shinn v. Shinn, 446. Shirk V. Andrews, 1030. Shirkey v. Hanna, 720. Shirley ii. Sugar Refinery, 60, 66, 67. Shirras v. Craig, 85, 95, 193, 195. Shook V. State, 218. Shorb V, Beandry, 865. Shotwell V. Smith, 885, 887. Shrieve v. Harkinson, 903. Shriver^/. Shriver, 239, loao, looi, 1003. Shuart v, Taylor, 173. Shufelt V. Shufelt, 647, 855, 1087. Shuler v. Maxwell, 969. Sibbett V. Stryker, 18. Sibley v. Baker, 271. Sickles V. Flanagan, 638. Sidenberg zi. Ely, 28, 261, 448. Siewart v. Hamel, 6^9, 640, 830. Sigel V. Johns, 615. Silsbee v. Smith, 708. Silver Lake Bank v.. North, 261, 448, 685, 691, 809. Simers v. Saltus, 862, 1026. Simms V. Kelly, 608. Simon v. Schmidt, 674. Simons V. First National Bank, 133, I9S- V. Pierce, 175. Simonson v. Blake, 793, 828. V. Falihee, 469. Simpson v. Del Hoyo, 319, 331, 448. V. Simpson, 1086. Sims V. Hammond, 297, 302. Simson v. Brown, 590, 6q2. V. Ingham, 360. V. Satterlee, 718. Sinclair v. Armitage, 76. Singer ManuPg Co. v. Rook, 462. Singer v. Troutman, 223. Sinking Fund Com'rs v. Peters, 591. Sinnett v. Cralle, 1017. Sirett V. Hooper, 98. Sisson V. Hibbard, 178, 179. Siter V. McClanachan, 292. Skeel V. Spraker, 271, 364, 366, 367, 958^ Skelton v. Scott, 85, 790. Slater v. Breese, 79, 279. Slaughter v. Swift, 235. Slausen v. Watkins, 577, 592, 723, Slee V. Manhattan Co., 18, 1 54, 264, 353^ 69s. 717.74s. 910. 920, 1022, 1099, iioo, iioj, 1129, 1149. Sleight V. Reed, 1048. Slicer v. Hyde Park, 1 50. Sloan V. Frothingham, 238, 1 1 38. Befefemeiare to Sections. iStdex to cases cited. Iv Sloan V. Holcomb, 89. V. Rice, 208, 390. Slocum V. Glass, 979. Slbsson V. DufiF, 1052. Sraalley v. Doughtey, 664. V. Martin, 818. Smart v. Bement, 877, 962, 964, 1042. V. Haring, 623. V. McKay, 818. Smedberg v. Sinlson, 645. Smidt V. Jackson, 1077. Smith V. Atnerican Life Ins. Co., 966. V. Austin, 445. V. Brackett, 146. V. Brand, 13. V. Caniiell, 27. V. Clarke, loio. V. Col. Ins. Co. 559. V. Cross, 590, 638, 639, 652, 667, 878. V. Diirell, 340. V. Fellows, 88. V. Fititig, 859. v. Frayler, 221. V. Gage, 765. V. Gardner, 238, 711, 1027. V. Graham, 94, 879. V. Hague, 160. v. Hathorn, 632. V. Heath, 151. V. Heermaiice, 981. V. High, 5i. V. Hutchinson, 81. V. Jackson, 492, 1049. V. Jencks, 164. V. Joyce, 797, 1017. ■V. Kelly, 680, 683, 887. V. Kidd, 354. V. Lusher, 107. V. ^yers, 671. V. Neilsqn, 449. V. Newton, 800. 7/. Ostermeyer, 591. *. Putnam, 157. v. Read, 574. V. Rice, 188. V. Roberts, 364, 366, 367, 741. V. Robei-tson, 447. V. Shay, 1027. V. Smith, 58, 356, 774. V. Starr,^ 298. V. Stevens, 301. V. Tiffaiiy, 298, 352, 885. V. Townsend, 212, 215, 220, 275, 394, '610. 7/. Truslow, 565, 571, ^98. V. Webb, 332, 727. Smith V. Wells, 998. V. Winter, 218. Smith Paper Co. v, Servin, 172. Smithers v. Heather, 639. S. & M. R.R. Co.w. Lancaster, 229. Smyth V. Knickerbocker Life Ins. Co., 332, 498, SCO, 649. V. Lombardo, 324, 649. V. McCool, 1009. V. Munroe, 324, 332, 618, 649. ■z/. Rowe, 27. Snedeker v. Snedeker, 1050, 1052. V. Wa,rring, 166, 167, 170. Snelling v. Mcl.ntyre, 448, 453. Snoddy v. Leavitt, 29. Snyder v. Robinson, 362. V. Snyder, 365. V. Stafford, 271, 280, 381, 932, 964, 965, 1056. V. Summers, 577. Solberg v. Wright, 294, 1105. Soule V. Ludlow, 279, 1114, 1125, 1135, 1137- V. The Union Bank, 554. South Baptist Society of Albany v. Clapp, 129.. South Fork Canal Co. v. Gordon, 1017. Southampton Boat Co. v. Muntz, 11 30. Southard v. Dprrington, 261, 448. Southbridge Savings Bank v. Exeter Machine Works, 180. Southern Central R.R. Co. v. Town of Moravia, 628. Southern L. I. & T. Co. v. Packer, 663. Southworth v. Parker, 387. V. Scofield, 367. V. Van Pelt, 188, 190. Souverbye v, Arden, 90. Sowarhy v. Russell, 230. Spwden V. Craig, 180. Spader v. Lawler, 201. Spafford v. First National Bank, 132. Spargner v. Hall, 848.. Sparkman v. Gove, 567. Sparks v. The State Bank, 460. Spaulding v. Hallenback, 575. Spear z". Cutter, 186. V. Haddon, 94, . V. Whitfield, 363. Spears v. Hartley, 341, 414. V. Mayor, etc., of New York, 1 52. Speigleineyer v. Crawford, 685. Spencer v. Ayrault, 364, 371, 631. V. Fredendall, 439. V. Harford, 1083. v. Spencer, 102, 213, 216. Speilman v. KUest, 458, 488. Ivi INDEX TO CASES CITED. Beferences are toSecUona. Splahn V. Gillespie, 1017. Spring V. Fisk, 232. V. Reed, 642. V. Sandford, ICXJ4. V. Short, 65, 66, 67, 70, 288. Springfield F. & M. Ins. Co. v. Allen, 529. 544- Springsteene v. Gillett, 832. Spurgeon v. Collier, 674. Spurgin v. Adamson, 255, 680. Spyer v. Fisher, 779. Stackpole v. Robbins, 377, 379, 836, 1 1 37. Stafford v. Adair, 731. V. Ballou, 295. Stafford Nat. Bank v. Sprague, 17. Stafford v. Van Rensselear, 281, 294, 460. Stahl V. Charles, 983. V. Hammontree, 859. Stanclifts v. Norton, 228, 232, 261. Stanley v. Beatty, 293, 301. V. Valentine, 432, 436. Stansell v. Roberts, 286. Stanton 7/. Kline, iioi, mo. Stantons v. Thompson, 364, 365, 448. Staples V. Fenton, 492. Starling v. Blair, 79. State V. Bradish, 287. V. Davis, 467, 476. V. Glenar, 159. V. Martin, 155. V. Newark, 433. State Bank v. Tweedy, 293. State Bank of Bay City v. Chappelle, 17. State Savings Bank v. Kicheval, 167. Strause v. Josephthal, 306. Steadman v. Hayes, 25. Steam Navigation Co. v. Weed, 1 1 J. Stearns v. Porter, 95. V. Quincy Mut. Life Ins. Co., 546. V. Welsh, 938. Stebbins v. Hall, 446, 571, 573. V. Howell, 358, 438. Steel V. Steel, 1 5. Steele v. Mealing, 454. V. Sturges, 904. Steen v. Clayton, 937. Steere v. Childs, 271, 273, 961. Stephen v. Beale, 751. Stephens v. Allen, 38. V. Casbacker, 601, 655. v. Hall, 877. V. Illinois Mutual Fire Ins. Co., 531. V. Shannon, 52, 53, 68. Sterling v. Rogers, 374. Stern v. O'Connell, 758, 760, 767. Stembergh v. Schoolcraft, 1005. Stevens v. Bank of Central New York, 1049. v. Batchelder, 476. v. The Buffalo and New York R.R. Co., 158. ■V. Cooper, 382, 388, 684. V. Dennett, 345. V. Miner, 716. V. Reeves, 650, 743. V. Veriane, 914, 915. Stevenson v. Black, 571. V. Fayerweather, 765. Stewart v. Bramhall, 663. V. Clark, 868. V. Hutchins, 47, 1097. V. Hutchinson, 46, 1014. V. Jones, 114. V. McMahan, 381. Stidham v. Matthews, 68. Stiger V. Bent, 300, 342, 354, 742. Stillman v. Stillman, 368. V. Van Beuren, 896. Stilwell V. Van Epps, 794. Stimson v. Arnold, 1021. Stockwell V. The State, 79, 730. Stoddard v. Gailor, 334, 813. V. Hart, 43, 93, 197, 409.439- V. Whiting, 13, 33, 458, 678. Stoddart v. Rotton, 472. Stone V. Lane, 94. V. Scripture, 352, 727. V. Seymour, 630. Stonebreaker v. Kerr, 478. Stoney v. The American Life Ins. Co., 647. Storer v. Bounds, 45. Storm V. Smith, 1017. Story 7/. Hamilton, 1128, 11 51. Stoughton V. Pasco, 95, 203, 465. Stout V. Folger, 577. V. Rider, 642. Stove V. Bounds, 674. Stover V. Wood, 431, 445. Stow V. Tifft, 121, 149, 284, 621, 856. Stowe V. Merrill, 16, 99. Strang v. Beach, 850. Stratton v. Putney, 18. Street v. Beal, 680. Strong V. Burdick, 28, 262. V. Converse, 365. V. DoUner, 1020. V. Ins. Co., 529, 531. V. Stewart, 18. V. Van Duerson, 285. Seferences are to Sectt(mB. INDEX TO CASES CITED. Ivii Strpther 7/. Law, 1105. Stryker v. Storm, 984. Studabacker v. Marquardt, 878. Stunner v. Bachelder, 340. Sturtevant v. Sturtevant, 16. Stuyvesant v. Hall, 271, 347, 348, 381, 384,388,421,478,765, 958, V. Hone, 384, 765. Suffern v. Johnson, 944, 953. Suffield V. Baskervil, 103. Suffolk Fire Ins. Co. v. Boyden, 562. Sullivan v. Toole, 167, 172, 191. Summers v. Kanawha, 28. Sumner v. Anderson, 105. V. Barnard, 27. V. Waugh, 310. Susquehanna Canal Co. v. Bonham, 114. Sussex Mut. Ins. Co. v. Woodruff, 530. Sutherland v. Rose, 423, 424, 702, 716. V. Woodroff, 661. Suydem v. Bartle, 854, 1095, 1096. Swaine v. Ferine, 624. Swan V. Yople, 302. Swartz's Ex'rs v. List, 294, 309, 344,458. Swartwout v. Curtis, 357, 420, 421. Sweeney v. Williams, 324. Sweet V. Jacocks, 1062. V. Van Wyck, 317. Sweetman v. Prince, 333.- Sweetzer v. Jones, 178, 879. Swett V. Sherman, 273, 274. Swezey v. Thayer, 1062, 1064. V. Willis, 1062. Swift V. Kraemer, 391, 453. V. Stebbins, 738. Swope V. Leffingwell, 443. Syracuse Bank v. Tallman, 885, 887. Tabele v. Tabele, 620, 622, 627, 919. Tabor v. Foy, 308, 310. Taft V. Taft, 91. Tainter v. Hemingway, 565. Talbot V. Berkshire Co., 600. Tallman v. Bressler, 155. V. Farley, 286. Tallmadge v. Wallis, 600, 859, 869. V. Wilgers, 384. Talmage v. Pell, 883. Tarbell z/. Bradley, 105. V. West, 105, 458, 478. Tartt z/. Clayton, 11 28. Tasker v. Bartlett, 231, 356. Tate V. Jordan, 760. Tator V. Adams, 1052. Tatum Bros. v. Walker, 710. Taylor v. Adams, 1028. V. Kearn, 1013. V. McLain, 18. V. Page, 308, 310. V. Post, 93, 94, 197, 208, 286. v. Root, 908, 909. V. Short, 388. V. Stibbert, 1006. V. Thomas, 99. V. Wendell, 267. V. Wendling, 96. V. Wing, 296, 628, 629. Tefft V. Munson, 27, 458, 480. Temple v. Whittier, 11 29. Tenbrook v. Lansing, 1020. Ten Eyck v. Craig, 23, 28, 243, 263. Ten Hoven v Kerns, 201. Terhune v. Taylor, 671. Territory of Utah v. Golding, 15. Terry v. Woods, 340. Terwilliger v. Brown, 990. Texvia v. Evans, 87. Thayer v. McGee, 419. V. Mann, 341, 414. V, Marsh, 590. V. Torrey, 571. Thebaud v. HoUister, 367. Third National Bank v. Blake, 608. Thomas' Appeal, 439. Thomas, Petition of, 1064. V. Brown, 1096. V. Desmond, 790. V. Dickinson, 565. V. Dunning, 736. V. Hanson, 620. ■V. Kelsey, 477, 1055. V. Olney, 97. V. Simmons, 363. V. Vinton, 175, 180. Thomas' Adm'rs v. Von Kapff's Ex'rs, 546. Thomason v. De Mott, 774. Thompson, Matter of, 659. V. Berry, 645. V. Chandler, 292. V. TheCommissioners,523. V. Davies, 993. V. Dimond, 996. V. Hickey, 147. V. Jarvis, 847. V. Maxwell, 487, 850. V. Mount, 982. V. Schmieder, 1007, 1009. V. Spittle, 105. V. Van Vechten, 647, 657, 847. V. White, 91. Iviii INDEX TO CASES CITED. Siclltbiii. Thomson v. Baildiiig Association, 79. V. Smith, 75. V. Wilcox, 79, 475, 491. Thome v. Newby, 747, 827. Thornton v. Enterprise Ins. Co., 564. V. Nat. Exchange Bank, 398. V. Pigg, 1084. Thorp V. Keokuk Coal Co., 575, 576, 589. Thorton v. Irwin, 343. Thurman v. Cameron, 461. Thurston v. Cornell, 635. V. Marsh, 233, 6go, 914. Tibbetts v. Moore, 178. Tibbs V. Morris, 13, 18, 37. Tice V. Annin, 273, ^78, 446, 722, ro85. Tichenorz/. Dodd, 571, 867. Tiernan v. Thurman, 68. « 7/. Wilson, 951. Tiffany v. Willis, 1089. Tifft V. Buell, 290. V. Horton, 167, 178, 179, i8b. Tilden v. Streeter, 19. Tillinghast v. Frye, 683. Tillotson V. Boyd, 596. Tillou V. Kingston Mutual Ins. Co. 530, 534- Titus V. GtenS Falls Ins. Co., 543. V. Neilson, 620, 622, 624. V. Velie, 912. Tobias v. The Mayors etc., of N. Y., 80. Toles V. Adee, 222. Toll V. Hiller, 335, 441, 833, 985. Tomlinson v. Thompson, 189. Tompkins v. Hyatt, 1006. V. Seely, 685. V. Tompkins, 204. Toome v. Cohset, 674. Toomer v. Randolph, 235; Toplis V. Baker, 354.1, 414. Torrey v. Bank of Orleans, 273, 274, 960, 990. V. Foss, 813. Totten V. Stuy^efeant, 773-. Tousley v. Tousley, 97. ToWer P. White, 1065. Towner v. McClelland, 368. Townsend, Ih the Mattbr of, 430. Townsend t>. Empite Stdhe Dressing . Co., 196, 204, 439. %>. Goelet, 425. V. Ward, 571; Tracy v. N. Y. Steam Faucet Co., 877. Tradesman's Association v. Thompson, 434. 449- Trader's Ins. Co. z>. Robert, 534. Traphagen v. IrWin, 478. Trask v. Vinson, 600, 861. Traveller's Ins. Co. v. Patten, 29, 731. ■V. Ybunt, 851. Trayser v. Trustees of Indiana AsbUry University, 204, 937. Trenton Bakirig Co. v. Woodworth, - 889. Trecothick v. Austin, 351. Trimble v. Thorhe, 225. Trimm v. Marsh, 23, 24, 242, 243. Triplett v. Paririlee, 185. Tripp V. Cook, 972, 973, 983, 985. V. Vincent, 96, 192, 216, 273, 341, 591- Trotter v. Hughes, 575, 581, 589. V. Irwin, 53. Troost V. Davis, 255. Tl-dup V. Haight, 4^4, 936. Trucks V. Lindsey, 38. Triill V. Bigelow, 499. ■V. Fuller, 180. V. Skinner, 30, 678. Trullinger v. Kolford, 375. Truscott V. King, 95, 99, 192, 195, 201, 203, 208, 362, 478. ■Trust Co. V. Fisher, 253. Trustees, etc., v. Anderson, 604. Trustees of Almshouse v. Smith, 413. Trustees Can. Academy v. McKechnie, 464. Trustees of Jones v. Roth, 754. Trustees of Northern Dispensary of N. Y. V. Merriam, 598. Trustees of Union College v. Wheeler; 297, 314. 319, 334> 381. 384. 401. 492. 49;*'- Tryon v. Sutton, 79, 851. Tuck V, Hartford Fire Ins. Co., 541. Tucke V. Bucfkholz, 84:8. Tucker 7). Cooney, 862. V. Moireland, 857. Tulley V. Harloe, 96, 193. Turk V. Funk, 287. 7/. Ridge, 102. Turman v. Cooper, 650. Turner, in re, 139. V. Flinn, 436. V. Kerr, 15. V. Peck, 59. V. Quincy Ins. Co., 551. V, WilkittSon, 18, 19, 21, 33, 36, 25!2. Turnipseed v. Cunningham, 38. Tuthill V. Davis, 645. V. Morris, 399, 405, 686. V. Tracy, 1 148. V. Wilson, 570. Hsferetuxs Ore to SecMone. INDEX TO CASES CITED. lik Tuttle V. Jackson, 487, 489. Tutwiler v. Dunlap, 877. Tydings v. Pitcher, 68. Tylee v. Yates, 392. Tyler v.. Etna Fift Ins. Co., 541. V. Granger, 24. Tyrrell v. Ward, 449. Tyson v. Applegate, 736. V. Cox, 218. Twombly v. Cas&idy, 448, 456, 685, 686, 688, 690. Uhlei- V. Semple, 100, 199. Ulrick V. Drischell, 792. Ulster Co. Savings Institution v. Deck- er, 544, 545, 564. Ulster Co. Savings Ihstittition z/. Leake, 544. 545. 564- Umfreville v. Reelef, 13. Underbill v. Atwatfir, 439, 441. V. Crennan, 43^. Unger v. Liter, 620, 621. Union v. Sprague, 17. Union Bank v. Bell, 736. V. Emerson, 166, 172. Union Dime Savings Instn. v. Ahda- riese, 924. Union Dime Savings Instn. v. Duryee, 290, 505. Union Dime Savings Insth. v. Osley, 1047. Union Diine Savings Insth. %/. Quinh, 244. Union Dime Savirigs Inistn. v. Welmot, 324, 638, 647. Union Instn. for Savings V. City of Bos- ton, 628. Union Ins. Co. v. Van Rensselaer, 1042. Union Nat. Bank v. Matthews, 133. United States v. Hool, 192. v. New Orleante R.R. Co., 159. V. Powell, itf27. U. S. Bank v. Chapih, 628. U. S. Ins. Co. V. Shriver, 4581 U. S. Rolling Stock Co., Matter of, 778. U. S. Trust Co. f. N. Y., W. S. & B. R.R. Co., 907. y Upson V. Milwaukee Nat. Bank of Wis- consin, 896. Urquhard v. Brayton-, 576. Usina v. Wilder, 79. Vail V. Foster, 60. V. Hamiltoh, 118, 12S. Valentine, Matter of, 14J. V. Belden, ^9<3. Valentine v. McCue, 928. V. Van Wagner, 228. Vallejo V. Randall, 778. Van Amburgh v. Kramer, 1 1 3, 609, 626. V. Lester, 302. Van Bergen v. Demarest, 1 1 34. Van Beuren v. Gaasbach, 628. Van Bokkelen v. Taylor, 419. Van Buren v. Olmstead, 18, 245, 248, 675, 717, 920. Vance v. Foster, 532. Van Dayne w. Shann, 1027. Vandegraaf v. Medloek, 546. Vandemark v. Schoomnaker, 181. Vandei-bilt w. Schreyer, 1089. Vandercook v. Baker, 308. V. The Cohoes Sav. Insti- tution, 687, 964, 966. Vanderheyden v. Gary, 770. Vanderkemp v. Shelton, 238, 273, 334, 446, 497, 498. 692, 711, 741, 823, 1024, 1027, 1 142. Vanderpoel 'z/. Van Allen, 17I, 175. Vanderslice v. Khapp, 181. Vanderveer ». Conover, 81. Vandiveer v. Stickiley, 80. Van Dusen v. Worrell, 18, 22. Van Duyne v. Thayer, 25, 235, 241, 620, 699, 1098. Van Epps v. Van Epps, 990. Van Etta v. Evenson, 87. Van Hookw. Throckmorton, 1031,1034. Van Horn i>. Powers, 568. Vah Home v. Grain, 284, 856. Van Huson v. Kanoner, 398. Van Kueren Ij. Corkins, 332, 334, 354, 355. 358. 458. 497, 500, 501. Van Nest v. Latson, 742. Vannice v. Bergen, 436. Van Orden v. Btidd, 22. Vanordeh v. Johnson, 383. Vail Orttian v. McGregor, 462. Van Pelt v. McGraw, 176, 188, i«9. Van Rensselaer v. Clark, 281, 481. V. Denniison, 76. V. Stafford, 2811 314, 460. Van Schaack v. Saunders, 1 1 1 2-. Van Sickle v. Palmer, 328. Van Slykfe v. Sheldon, li»i. ■V. Van Loan, 271, 962, 964. Van Tassell v. Wood, 635, 643, 657. Van Thornily v. Peters, 291; Van Valen v. Schermertefn, 568. Van Valkenburgh v-. Trustees of Schools, 955; Van Vechten v. Terry, 738. Ix ISTDEX TO CASES CITED. Beferemxes are to Sections. Van Wagenen v. La Farge, 833. Van Winkle v. Williams, 449. Van Wyck v. Alliger, 184. V. Baker, 20. V. Walters, 642. Varick v. Briggs, 312, 483. Varian v. Stevens, 779. Varney v. Hawes, 97. V. Stevens, 29. Vartie v. Underwood, 275, 622, 731, 1058. Vassear v. Livingston, 874. Veazie v. Williams, loio. Vechte v. Brownell, 1 1 30. Veeder v. Fonda, 767, 929, 997, 1008, loii. Verdin v. Slocum, 736, 998. Verges v. Giboney, 423. Vehue v. Mosher, 165. Vermilya v. Beatty, 727. Vernon v. Smith, 546. Vernum v. Babcock, 678. Vert V. Voss, 455. Vick v. Smith, 360, 361. Vickery v. Dickson, 638, 645, 646. Viele V. Judson, 307, 345, 436, 470, 498, 503. 971- Vilas V. Jones, 219, 667, 668. Villa V. Roderiguez, 30, 678. Vincent v. Moore, 261. Vleit V. Young, 15. Vogan V. Caminetti, 198. Voorhees v. Bank, etc., 797. V. McGinnis, 166, 168, 175, 178, 179, 180. Voorhis v. Freeman, 178. Voris V. Thomas, 263. Vredenbergh v. Burnet, 281, 294. Vreeland v. Loubat, 742. V. Torrey, 151. V. Van Blarcom, 567. Vroom V. Ditmas, 238, 692, 717, 910, 920, 1027, 1 1 37, 1 142. Vrooman v. Dunlap, 102. V. Turner, 566, 576, 590, 612. Vroome 11. Van Home, 351, 727. Waddell v. Carlock, 48, 53. Wade, Case of, 8. Wadsworth v. Lyon, 380, 444, 1085. V. Williams, 338, 363. Wagner v. Hodge, 735. Wake V. Hart, 1 109. Wakefield Bank v. Truesdell, 206. Wakeman v. Price, 987. Walbridge v. James, 941. Walcott V. Morris, 15. Waldo V. Richmond, 295. Waldron v. Waldron, 267. Wales z/. Sherwood, 567, 591. Walker v. Buffands, 281. v. Cockey, 1104. V. Covar, 279. V. Dement, 294. V. Goldsmith, 573. V. Mebane, 392. V. Sherman, 173. V. Snediker, 192, 197, 203, 440. V. Vaughan, 158. Wall Street Fire Ins. Co. v. Loud, 892. Wallace v. Feely, 950. V. Field, 837. V. Harris, 91. Wallis V. Long, 419. Walls V. Baird, 103, 385. V. Endel, 18. Walsh V. Powers, 612, 857. V. Rutgers Fire Ins. Co., 238, 245, 711, 1027. v. Weidenfeld, 917. Waltermire v. Westover, 414. Walters v. Walters, 284, 391. Walthall, Ex'r, v. Rines, 243. Walton V. Cronly, 155. V. Hollywood, 261, 448. Walworth 2/. Farmers' Loan & Trust Co., 954. Wandle v. Turney, 706. Wanzer v. Cary, 302, 334, 358, 370. Ward V, Cooke, 200, 201. V. Dewey, 1028. V. James, 938, 941, 942. V. Kilpatrick, 172. V. McNaughton, 731. V. Price, 363. V. Van Bokicelen, 743. Warfield v. Fisk, 18. V. Trickey, 221. Waring w. Loder, 529, 534, 555. V. Smyth, 24, 88, V. Waring, 770. Warner v. Blakeman, 365, 443, 1 1 29, 1 136. V. Gouverneur, 873, 885, 891. V. Van Alstyne, 55, 59, 66, 72, 288, 621. V. Winslow, 472. Warren v. Boynton, 271, 960. V. Fenn, 66. V. Fmn, 60, V. Taylor, 105, 107. V. Warren, 448. Warwick v. Dawes, 643. V. Hammell, 895. Kf/erences are to Sections. INDEX TO OASES CITED. ]xi Washington Co. v. Slaughter, 291, Washington Life Ins. Co. v. Flei- schauer, 896, 898. Waterman v. Curtis, 259. V. Hunt, 107. V. Matteson, 191. V. Webster, 342, 357. Waters v. Hubbard, 273, 274, 792. V. Stewart, 23. V. Waters, 419. Waterson v. Devoe, 28. Watkins v. Hill, 208, 390. Watt V. Alvord, 731. ■V. Burnett, 383. Watson V. Bailey, 664. V. Church, 781. V. Dundee M. & Ter. Invest. Co., 1027. ■zA Fuller, 628. V. Hunter, i86, 191. V. McLaren, 324, 330. V. Spence, 235, 239, 1028, 1098. V. Wilcox, 449. Way V. Patty, 60. Waydell v. Luer, 212, 376, 391. Wayman v. Cochrane, 300. Weaver v. Barden, 482. V. Edwards, 436. V. Toogood, 273. Weathersley v. Weathersley, 38. Weber v. Fowler, 467, 763. V. Zeimet, 274. Webb V. Haselton, 308. V. Stone, 97. Webster v. Phoenix Ins. Co., 543. V. Singley, 362. V. Vandeventer, 299. V. Van Steenbergh, 482. Weed V. Calkins, 829, 1093. V. Covin, 102, 103. V. Hornby, 261, 262. V. Stevenson, 13, 15, 743. Weeks v. Tomes, 760, 761, 770, 998. Weems v. Coker, 813. Weide v. Gahl, 16, 21. Weil V. Fischer, 324, 649. Weil & Bro. v. Uzzell, 844. Weir V. Mosher, 348. Weisburger v. Weisner, 492. Welch v. Beers, 273, 274. V. Buckins, 621. V. Priest, 304. Weld V. Rees, 1137. V. Sabin, 448. Welland Canal Co.z/. Hathaway, 328. Welling V. Ryerson, 685. Wells V. Chapman, 652. V. Francis, 72. V. Hydraulic Co., 792. V. Lincoln Co., 1027. V. Maples, 171, 180. V. Rice, 235. V. Tucker, 680. V. Wells, 1 104, 1 109, 1 1 27. Wendell v. Wendell, 7S9, 911. Wernwag v. Brown, 628. Weseman w.-Wingrove, 935. West Point Iron Co. v. Reymert, 464. West V. Reed, 679. Westbrook v. Gleason, 64, 319, 458, 482, 483, 486, 497, 500. Westcott V. Gunn, 212. Westerlo v. De Witt, 302. Western Bank v. Sherwood, 231. Western Ins. Co., etc., v. Eagle Fire Ins. Co., 583, 741, 823. Western Res. Bank v. Potter, 741,743. Westervelt v, Ackley, 613. Westfall V. Hintze, 453. V, Jones, 310. V. Westfall, 21. Westgate v. Handlin, 1123. Wetherell v. City Fire Ins. Co., 539. Wetmore v. Roberts, 238, 255, 698, 711, 1114, H42. Weyh V, Boylan, 324, 326, 330, 649, 797. Whalin v. White, 1020. Wh.irfw. Howell, 14, 36. Wharton v. Moore, 167. V. Webster, 191. Whealan v. McCreary, 25. Wheeland v. Swartz, 38. Wheaton v. Voorhis, 664. Wheeler v. Benedict, 224. ■V. Kirtland, 149. V. McFarland, 281. V. Morris, 731, V. Scully, 780. V. Van Keuren, 1039, 1065. V. Wheeler, 299, 348. V. Willard, 435. Wheelock v. Lee, 667. Wheelwright v. Depeyster, 363, 382, 384- White V. Albertson, 782. V. Bartlett, 741, 767. V. Bogart, 1052. V. Brown, 264, 562. V. Carpenter, 46. V. Coulter, 759, 766, 781, 974, 98s. V. Duggan, 298. Ixii INDEX TO, CASES CITED. 'to iSectiOT^f, White V. Evans, 1028. V. Graves, 462. V. Knapp, 364. V. Leslie, 86, 281. V. Lester, 519, 520; V. McClellan, 11 18, 1119.. V. McNett, 616. V. Moore, 472, V. Patton, 480. V. Poillon, 1043., V. Seaver, 1006. V, Southerland,, 308, V. Stretch, 858.' V. Turner, 638. V. Willianns, 58, 60, Whitehead v. Fisher, 294, 1027. Whitmore v. Shiverick, 105. Whiteworth v. Rhodes, 1131, Whitfield V. Riddle,, 11 28. Whiting V, Gearty, 602, Whitlock V. Waltham, 354.. W"hitbeck v. Rowe, 956.! Whitney v. Allen, 1020. Whitney Arms Co. v. Barlow, 115. Whitney v. Buckman, 851. V. City of New Hayen, , 149, V. Dinsmore, 862, v. Franklin, 338, V. McKinney, 707,, 743.. ■V. N. Y. and Atlwtip I^.R. Co., 893. V. Townsend, 31. ■V. Union Trusl; Co. of N. Y., 115. Whittacre v. Fuller, 212. Whittemore v. Gibbs, 300. Whittick V. Kane, 18, 21, 472, 679. Whittington v. Flint, 383. V. Wright, 478; Whitton V. Whitton, ic». Whittredge v. Edmunds, 961 Wilbor V. Danolds, 1033. Wilbur V. How, 993. V. Warren, Matter of, 578. Wilcox V. Allen, 293, 555., V. Campbell, 578. V. Howell; 329. z/i Wilcox, 108. Wilder z-. Brooksi 458. Wiles V. Peck, 607. Wiley V. Angel, 985. Wilhelm v. Woodcock, 38. Wilkes V. Harper, 444, 449. Wilkinson v. Roper, 38. Willard v. Wood, 575. Willets V. Van Alst, 994. Williams v. Allen, 671. ' Williams v. Ayrault, 644, V. Beard, 23., V. Birbeck, 459, 497. V, Buck, 647. 7/. Crow, 52. V. Eaton, 831. V. Fitzhugh, 666, 671. v.. Gilbert, 200. V. Gillies, 570. V. Hern on, 916. V. Houghtaling, 630. V. Perry, 958. V. Robinson, 888. V. Storrs, 351, 727. V. Tatnall, 290. V. Thorn, 302, 472. v^ Tilt, 647. V. Townsend, 28, 262, 691, 818. V. Walker, 354. ?-, Wilson,, 388. V. Woodard, 81. Williamson v. Brown, 203, 487, 488, 490. V. Champlinj 854,, 1090,- 1096. V, Dale, 982, V. DuSfy, 616. V. Field, 736, 1004, V. Geriach, 898. ■V. N. J. South. R.R. Co., 158. Willich V. Taggart, 204._ Willis V. Henderson, 738, V. Twambly, 856. Wilsey v._ Dennis^ 568. Wilson V. Boyce, 79, 851. V. Ejgenbrodt, 293. V. Grant, 840. V. Harvey, 646. V. Hunter, iii. w. Kimball, 302, 433, 435. z/. King, 565. V. Maltby, 185, 188, ,189,, 191. V. Russ, 77. V. Russell, 201. V. Stillwell. 577. V. Troup, 8?, 298, I ICQ, 1 104, 1105. V. Vaugn, 97. V. Wilson, 76. Winchell v. Coney, 97. Windsor z/. Kennedy, 361. Winebrener v. Johnson, 692, 731. Wing V. Cooper, 38. V. Field, 238, 239. V. Hayford,, 381. References are to 8ecU gagor is, somewhat inaccurately, termed the equity of redemption. Before forfeiture the right to redeem was a legal right, even at com- ' Bowery Nat.- Bank v. Duncan, I2 Hildebrand, 46 Mo. 284 ; Asay v. Hoo- Hun, 405. ver, 5 Pa. St. 21 ; 45 Am. Dec. 713; * Hancock v. Harper, 86 111. 445. McHugh v. Smiley, 17 Neb. 620. ' Waters V. Stewart, i Caines' Cas. 47 ; * Runyan v. Mersereau, ii Johns. 534 ; Jackson V. Willard, 4 Johns. 42 ; Runyan Hitchcock v. Harrington, 6 Id. 290; 5 V. Mersereau, 11 Id. 534 ; Astor v. Mil- Am. Dec. 22g ; Coles v. Coles, 15 Id. ler, 2 Paige, 68 ; Astor V. Hoyt, 5 Wend, srg; Harp v. Calahan, 46 Cal. 222; 603 ; Packer v. Rochester and Syracuse Lilly v. Dunn, adm'r, 96 Ind. 220. R. R., 17 N. Y. 283, 295 ; Kortrlght v. 'Sedgwick v. HoUenback, 7 Johns. Cady, 21 N. Y. 343 ; Power v. Lester, 376. 23 N. Y. 527 ; Merritt v. Bartholick, 36 ' Trimra v. Marsh, 3 Lans. 309 ; s. c. N Y. 44 ; Gallatin County v. Beattie, 3 affi'd 54 N. Y. 599 ; Ten Eyck v. Craig, Montana, 173 ; Mack v. Wetzlar, 39 Cal. 5 N. Y. Sup. (T. & C.) 65 ; s. c. 2 Hun, 247 ; Fletcher v. Holmes, 32 Ind. 497 ; 452 ; s. c. affi'd 62 N. Y. 406. Williams v. Beard, i S. C. 309 ; Carpen- ' Kline v. McGuckin, 24 N. J. Eq. 411. ter V. Bowen, 42 Miss. 28 ; Woods v. ' Bird v. Keller, 77 Me. 270. § 24.J MOETGAGES AND THEIE NATXTKE. 19 mon law, and at present tte right of the mortgagor to pay the mort- gage debt, and hold the estate discharged of the hen, is an inseparable incident to the relation of mortgagor and mortgagee, both at law and in equity, and it cannot be taken away without judicial sentence or a sale under a power or by the consent of the mortgagor, though the rem- edy for its enforcement may be barred by lapse of time, just as any other right may be forfeited by neglect. But while the right of re- demption is the most marked of the rights of the mortgagor as against the mortgagee, it is not the only one. The mortgagor is, for every purpose consistent with the validity of the mortgage as a lien, the legal owner of the estate, and, being in possession, he may main- tain trespass even against the mortgagee.' § 24. Right of mortgagee as to possession. — At common law, and in this State prior to 1830, the mortgagee, after default, had a right to maintain ejectment against the mortgagor and all claiming under him to obtain possession of the mortgaged premises.' But this right was taken away from him by the Revised Statutes,' and the only right he now has in the land before foreclosure is to take pos- session of it, with the consent of the mortgagor, after the debt has become due and payable, and to retain such possession until the debt is paid.'' This right to retain possession is protected by the courts just as the similar right of the pledgee of personal property is pro- tected, but the mortgagee acquires no estate from his possession.' The possessory right continues only so long as the relation of debtor and creditor subsists, and when the debt is discharged, the right of possession ceases with it.° While the mortgagee cannot get into pos- session without the consent of the mortgagor, still, if* he gets into possession, he may defend his possession upon the title conveyed by the mortgage, and cannot be removed by an action of ejectment, but the only remedy is by an accounting in equity,' the title of the ' Runyan v. Mersereau, ii Johns. 534 ; Colo. 32 ; Fogarty v. Sawyer, 17 Cal. 6 Am. Dec. 393 ; Bryan v. Butts, 27 589 ; McMillan v. Richards, 9 Cal. 365 ; Barb. 503. Bostwick v. McEvoy, 62 Cal. 496 ;' Ty- * Jackson v. Dubois, 4 Johns. 216; ler v. Granger, 48 Cal. 259 ; Cox v. Rat- Erskine v. Townsend, 2 Mass. 493 ; Mc- cliffe, 105 Ind. 374. Millan v. Otis, 74 Ala. 561 ; Ferris v. * Waring v. Smyth, 2 Barb. Ch. 135. Houston, 74 Ala. 163 ; Coffey v. Hunt, ^ Packer v. The Rochester & Syracuse 75 Ala. 236. R.R., 17 N. Y. 295. » 2 R. S. 312, § 57 ; Code of Civ. Pro. « Kortright v. Cady, 21 N. Y. 365 ; § 1498 ; the same rule adopted in other Trimm v. Marsh, 54 N. Y. 606. States. Pueblo & A. V. R. Co. v. ' Hubbell v. Moulson, 53 N. Y. 225. Beshoas, 5 Pac. Rep. (Colo.) 639; 8 20 MOETGAGES OF EEAL PEOPEETY. [§§ 25-26. mortgagee being sufficient to enable him to maintain his possession at law.' Ejectment wiU not lie in favor of a grantee Under an absolute deed given as security/ and such a deed does not deprive the grantor of the right to recover for the rents and profits of the land between the date of the deed and the reconveyance to him.' § 25. A mortgagee is deemed a purchaser sub modo ; he is so regarded every day under the statute respecting fraudulent sales, and protected vrithin the saving clause in favor of subsequent pur- chasers in good faith,* and if he obtains his mortgage for a present and valuable consideration, he holds, to the extent that it may be necessary to protect his debt, all of the rights of a iona fide pur- chaser.* So, too, a mortgage is an estate for the purpose of entitling a mortgagee who had received a release from the mortgagor, to insist that, to the extent of the mortgage, the wife of the mortgagor could not claim dower." § 26. A mortgage is a lien, and it is a mere shadow of the debt which it was made to secure. A transfer of the debt carries with it the mortgage, but a transfer of the mortgage without the debt is a nullity.' Before foreclosure the mortgagee has no interest in the land capable of being conveyed or mortgaged, for it is impossible to separate the debt from the pledge, so that the latter shall reside in one person, while the debt shall reside in another.' The interest of the, mortgagee in the land cannot be sold on execution, neither is he bound before entry, by a covenant running with the land." A mortgage is a lien, if it be nothing more, and a warranty against incumbrances will estop a grantor from 'setting up a mortgage as against his grantee, which existed at the time of the warranty." A mortgage under seal is a " deed " so as to permit an officer au- ' Mickles v. Townsend, i8 N Y. 584, s. c. sub nam. James v. Morey, 2 Cow. and cases cited. 246 ; Whealan v. McCreary, 64 Ala. ' Berdell v. Berdell, 33 Hun, 535 ; 319 ; Steadman v. Hayes, 80 Mo. 319. Beatty v. Brummett, 94 Ind. 76, and ° Van Duyne v. Thayre, 19 Wend. 162. cases cited ; Cox v. Ratcliife, 105 Ind. ' Merritt v. Bartholick, 36 N. Y. 44; 374- Kellogg v. Smith, 26 N. Y. 18. ° Haworth v. Taylor, 108 111. 275. 'Jackson v. Willard, 4 Johns. 41 ; Ay- ■•Per Nelson, Ch. J., in Frisbee v. mar v. Bill, 5 Johns. Ch. 570. Thayer, 25 Wend. 399 ; Ledyard v. But- " Morris v. Mowatt, 2 Paige, 586 ; As- ler, 9 Paige, 137. tor v. Hoyt, 5 Wend. 603. ' James v. Johnson, 6 Johns. Ch. 417 ; '° Mickles v. Townsend, 18 N. Y. 575. §§ 27-28.] MORTGAGES AND THEIR NATURE. 21 thorized to take acknowledgments of deeds to certify as to its execu- tion." § 27. After acquired title of mortgagor. — A mortgage is also treated as a conreyance when questions arise relative to the amount of interest upon which it is a charge/ or relative to the effect of the covenants contained in it. So a mortgage without covenants creates a lien only upon the interest of the mortgagor in the land at the time of its execution, and he is not estopped from showing what that was as against one claiming under the mortgage,' and he is not precluded from subsequently acquiring and claiming under an outstanding and paramount title.* But a warranty of title contained in a mortgage will estop the mortgagor from questioning that, at the date of the mortgage, he had title, and if he subsequently acquires the para- mount title, it wiU inure to the benefit of the mortgagee and his legal representatives. ' A mortgage, without covenants for title, will transfer all of the in- terests, both legal and equitable, of the mortgagor, and if the mort- gagor thereafter acquires a legal claim to what, at the time of execut- ing the mortgage, he had an equitable title, this will inure to the benefit of the mortgagee. Thus, where the owners of land fronting on a highway executed a mortgage thereon, intending to have the same bounded by the centre of the highway, but the description ex- tended only to the exterior line, and afterward a quit-claim deed to the centre of the highway was made to the mortgagor, it was held that this title inured to the benefit of the purchaser at a foreclosure sale under the mortgage.' Where a grantor takes a mortgage for part of the purchase money, the covenants for title operate only upon the estate derived from the mortgagee, and the mortgagor is not precluded from purchasing and setting up a hostile claim.' § 28. Purchases at tax sales by mortgagee. — There is no such i-elation of trust between a mortgagor and a mortgagee, not in ' Canandaigua Academy v. McKech- "Smyth v. Rowe, 33 Hun, 422. nie, 19 Hun, 62. ' Randall v. Lower, 98 Ind. 255 ; Brown ' Hiscock V. Phelps, 49 N. Y. 97. v. Phillips, 40 Mich. 264 ; Haynes v. 'National Fire Ins. Co. v. McKay, 5 Stevens, 11 N. H. 28 ; Smith v. Cannell, Abb. N. S. 445. 32 Me. 123 ; Hubbard v. Norton, 10 * Jackson v. Littell, 56 N. Y. 108 ; Conn. 422 ; Sumner v. Barnard, 12 Mich. Power V. Lester, 23 N. Y. 532. 459 ; Connor v. Eddy, 25 Mo. 72 ; Lot ^ Tefft V. Munsoi), 57 N. Y. 97. v. Thomas, 2 N. J. 407. 22 MORTGAGES OF EEAL PEOPEETT. [§ 29. possession, as prevents the latter from acquiring an adverse claim or lien to or upon the mortgaged premises and enforcing the same with like effect as any stranger could. The mortgage is a mere security for a debt, and imposes no duty upon the mortgagee to protect the interests of the mortgagor, unless ther^ is some special covenant creating such a duty. The mortgagee, therefore, if he be not in possession, may purchase the mortgaged property at a sale for taxes, and may set up this title as against the mortgagor ;' the mortgagee may also acquire any other outstanding and hostile title, and set it up against the mortgagor, if nothing else than the relation of mort- gagor and mortgagee existing between the parties, prevents.' If the mortgagee elects to pay a tax imposed upon the mortgaged property for his own protection and that of the mortgagor, he may add the amount so paid to the mortgage indebtedness and collect it in his capacity of mortgagee, and the right to do this depends upon equitable principles alone, and not upon the presence of a " tax clause " or other stipulation in the mortgage.' But if he elects to assume the rights of a purchaser at a tax sale, he must proceed as any other similar purchaser would, and he will gain nothing from his position as mortgagee." Claiming as mortgagee to add the amount paid to his debt will operate as a waiver of the tax title.' A mortgagee in possession, who is receiving the rents of the property or enjoying its use, owes a duty to the mortgagor to apply those debts in paying taxes or other incumbrances prior to the mortgage, and, while he may demand a credit for such payments, he cannot allow the land to be sold for taxes in violation of his duty and set up against the mortgagor a tax title acquired while thus in possession." § 29. Purchases at tax sales by mortgagor and those claiming under him. — As a general rule it may be said that a per- son who is under any obligation either moral or legal to pay a tax upon land cannot omit to pay such tax and then set up a purchase ' Cornell v. Woodruff, 77 N. Y. 203, ' Sidenberg v. Ely^ 90 N. Y. 257 ; 43 206 ; Williams v. Townsend, 31 N. Y. Amer. Rep. 163. See also infra Ch. 415 ; Hill V. Hill, 4 Barb. 419 ; Bush v. VIII. ■White, 85 Mo. 339 ; Waterson v. Devoe, * Williams v. Townsend, 31 N. Y. 411. 18 Kan. 223 ; Bettison v. Budd, 17 Ark. ' Strong v. Burdick, 52 Iowa, 630. 546 ; Summers v. Kanawha, 26 W. Va. ' Ten Eyck v. Craig, 62 N. Y. 406, 422 ; 159 ; contm Hall v. Westcott (R. I.), 34 Schenck v. Kelley, 88 Ind. 444 ; Hall v. Alb. L. J. 227. Westcott (R. I.), 34 Alb. L. J. 227 ; Max- " Bush V. White, 85 Mo. 339. field v. Willey, 46 Mich. 252. § 30.] MORTGAGES AND THEIR NATURE. 23 under it.' A mortgagor cannot permit the estate to be sold for taxes, and by purchasing it on such sale acquire a title against the mortga- gee ; " the same rule will apply to a grantee of the mortgagor or to any other person claiming under the mortgagor who is in possession of the property.' A second mortgagee is under no obhgation to protect the lien of the first mortgagee by payment of the taxes or by purchasing the premises for his benefit at a tax sale ; but if he does pay or purchase, the act constitutes a protection to the first mortgagee, for the reasoa that his interest is in the equity of redemption and his rights rest upon those of the miortgagor. He may add the sum paid to his claim as against the mortgagor, but he cannot thus acquire a title superior to the prior lien.' And a person who obtains title throiigh the fore- closure of a second mortgage cannot gain any benefit as against the prior mortgagee either by paying taxes or by purchasing at a sale for taxes. ° § 30. Purchase of equity of redemption by mortgagee. — A mortgagor and mortgagee may at any time after the creation of the mortgage and before foreclosure make any agreement concerning the estate they please, and the mortgagee may become the purchaser of the right of redemption. A transaction of that kind is, however, regarded with jealousy by courts of equity and will be avoided for fraud, actual or constructive, or for any unconscionable advantage taken by the mortgagee in obtaining it. It will be sustained only when honafide ; that is, when in all respects fair and for an adequate consideration." An agreement to waive or extinguish the right of ' Moss V. Shear, 25 Cal. 38; Christy ^Connecticut Mut. L. Ins. Co. v. Bultee, V. Fisher, 58 Cal. 256. 45 Mich. 113 ; Middletown Savings Bank ^ Dunn V. Snell, 74 Me. 22 ; Vamey v. v. Bacharach, 46 Conn. 513 ; Goodrich v. Stevens, 22 Me. 331 ; Downer v. Smith, Kimberly, 48 Conn. 395 ; Baker v. 38 Vt. 464; Bush V. Cooper, 26 Miss. Whiting, 3 Sumner, 476 ; Gorton v. Paine, 599 ; Fair v. Brown, 40 Iowa, 209 ; 18 Fla. 117 ; Phelan v. Boylan, 25 Wis. Cooper v. Jackson, 99 Ind. 566 ; Allison 679 ; Woodbury v. Swann, 59 N. H. 22 ; V. Armstrong, 28 Minn. 276 ; 41 Amer. Chickering v. Faile, 38 111. 342 ; Anson Rep. 281 ; Connecticut Mut. L. Ins. Co. v. Anson, 20 Iowa, 55. V. Bultee, 45 Mich. 113, 120 ; Fells v. ' Snoddy v. Leavitt, 105 Ind. 357 ; Barbour, 58 Mich. 49 ; Snoddy v. Leav- Cooper v. Jackson, 99 Ind. 566. itt, 105 Ind. 357. ' Odell v. Montross, 68 N. Y. 499, 504 ; ' Travellers' Ins. Co. v. Patten, 98 Holridge v. Gillespie, 2 Johns. Ch. 30 ; Ind. 209 ; Cooper v. Jackson, 99 Ind. Trull v. Skinner, 17 Pick. 213 ; Patterson 566 ; Morrison v. Bank of Commerce, v. Yeaton, 47 Me. 306 ; Ford v. Olden, 81 Ind. 335 ; Fair v. Brown, 40 Iowa, 209; L. R. 3 Eq. Cas. 461 ; Jones v. Franks, 33 Phinney v. Day, 76 Me. 83. Kans.497; Villa v.Rodriguez,79 U.S. 323. 24 MORTGAGES OF KEAL PKOPEBTT. [§ 30. redemption cannot be made contemporaneously with the execution of the mortgage,' and if made afterward the burden of proof will rest upon the mortgagee to show its fairness." If a purchase is made by the mortgagee from the mortgagor the title of the mortgagor will only pass out of him by a deed under seal containing words of grant, and an agreement evidenced in any other way will not suffice, however just the bargain may be, even if the mortgage be in form an absolute conveyance.' The only other way to extinguish the mortgagor's right of redemp- tion is by foreclosure in one of the forms permitted by law. ' Bearss v. Ford, io8 111. i6 ; Parmer ' Jones v. Franks, 33 Kans. 497. V. Parmer, 74 Ala. 285. ° Odell v. Montross, 68 N. Y. 499. CHAPTER II. CONDITIONAL SALES. § 31. Conditional sales are valid. 32. A mortgage and a conditional sale are in some respects quite sim- ilar. 33. The chief and most obvious dis- tinction between a mortgage and a conditional sale. 34. Absence of a covenant to pay debt is not conclusive. 35. Remedies reserved by the con- tract. § 36. 37- 38. 39. 40. Inadequacy of price. The subsequent dealings of the parties with relation to the trans- action. Each case must stand on its own special circumstances. The mere fact that a conveyance with an agreement to reconvey was recorded as a mortgage. Examples of conditional sales and mortgages. § 31. Conditional sales are valid. — It is entirely competent for the grantor of an estate to require, as part of the consideration upon which he parts with his property, that the grantee shall agree to resell it to him within a certain time for a stipulated price. Such an agree- ment is not in any sense a mortgage, and there is no principle of law which forbids it from being made.^ To deny the power of two indi- viduals, capable of acting for themselves, to make a contract for the purchase and sale of lands, defeasible by the payment of money at a future day, or, in other words, to make a sale with a reservation to the vendor of a right to purchase the same land at a fixed price and at a specified time, would be to transfer to courts of equity in a consider- able degree the guardianship of adults as well as of infants.' Such a contract is known as a conditional sale, and is enforce^ according to its terms. The grantor must regain his estate, if at all, under his contract. If a time is named under which he must repurchase, it is of the essence of his contract, and he cannot be relieved on the ground that a penalty or a forfeiture is incurred. A court of equity ' FuUerton v. McCurdy, 55 N. Y. 637 ; Hill V. Grant, 46 N. Y. 496 ; Saxton v. Hitchcock, 47 Barb. 220 ; Glover v. Payn, ig Wend. 518 ; Whitney v. Town- send, 2 Lans. 249 ; • Henley v. Hotaling, 41 Cal. 22 ; Buse v. Page, 32 Minn. III. ^ Conway's Executors v. Alexander, 7 Cranch, 237 ; Cornell v. Hall, 22 Mich. 377- 26 MOETGAGES OF BEAL PEOPEETY. [§§ 32-33. "will not vary the express terms of his contract, or give him the benefit of an extension in point of time for which he has not stipulated.' § 33. A mortgage and a conditional sale are in some re- spects quite similar. — They are both conveyances, and both contain provisions for the revesting of title in the grantor, and the great mark of difference between them is that a right of redemption is an inseparable incident to a mortgage, incapable of destruction or extinguishment, save by the judgment of a court of equity, a sale under a power, or the free consent of the mortgagor given for a valu- able consideration ; while in the case of a conditional sale the rights of the vendor are those expressly reserved to him by the agreement, and those only. Ever since the doctrine of an equity of redemption was first declared, the ingenuity of greedy lenders and of anxious borrowers has been taxed to evade it, and their contracts, though really intended as securities in the nature of mortgages, have fre- quently been clothed in the form of contracts of conditional sale. To distinguish the true nature of such transactions is, therefore, not always easy. § 33. The chief and most obvious distinction between a mortgage and a conditional sale is that a mortgage is always col- lateral to a debt, and the existence of a debt has been said to be the decisive test upon this point.'' A mortgage being a conveyance made as security, it is plain that a mortgage can have no existence unless it be accompanied by a debt or obligation which it is made to secure, but in the case of a conditional sale the grantor is free to avail himself of the option to repurchase the property or not, as he may see fit. As was remarked by Maeshall, Ch. J., in Conway's Exec- utors V. Alexander (7 Cranch, 218), " the inquiry must be whether the contract in the specific case is a security for the repayment of ' Robinson V. Cropsey, 2 Edw. Ch. 147; N. H. 35; Montgomery v. Spect, 55 affi'd 6 Paige, 480 ; Henley v. Hotaling, Cal. 352 ; Klein v. McNamara, 54 Miss. 41 Cal. 22. 90 ; Randall v. Sanders, 87 N. Y. 578, ^ Story's Eq. Jur. § 1018 b ; Morrison afii'g 23 Hun, 611 ; Budd v. Van Orden, V. Brand, 5 Daly, 40 ; Holmes v. Grant, 33 N. J. Eq. 143 ; Judge v. Reese, 9 8 Paige, 243 ; Horn v. Keteltas, 46 N. C. E. Green (N. J.) 387 ; Calhoun v. Y. 605 ; Hill V. Grant, Id. 496 ; Stoddard Lumpkin, 60 Tex. 185 ; Bearss v. Ford, V. Whiting, Id. 627 ; Pardee v. Treat, 108 111. 16 ; Harman v. May, 40 Ark. 18 Hun, 298 ; Reading v. Warton, 7 146 ; Evert v. McBee, 27 Kans. 232 ; Conn. 143 ; 18 Am. Dec. 89 ; Edrington McNamara v. Culver, 22 Kans. 661 ; V. Harper, 3 J. J. Marsh (Ky.) 353 ; 20 Robinson v. Willoughby, 65 N. C. 520 ; Am. Dec. 145 ; Bethlehem v. Annis, 40 Turner v. Wilkinson, 72 Ala. 361. §§ 34-35.] CONDITIOKAL SALES. 27 money or an actual sale. If a seenrity in the nature of a mortgage is intended, it is necessary that the mortgagee should have a remedy against the person of his debtor ; if this remedy really exists, its not being reserved in terms will not affect the case ; but the remedy must exist in order to justify a construction which overrules the express words of the instrument." ' § 34. Absence of a covenant to pay debt is not conclusive. — If the existence or the non-existence of any evidence of debt were the only distinction between mortgages and conditional sales, a wide latitude would be offered for oppression in cases where the value of the security is so great that the creditor would seek to conceal the fact of indebtedness rather than to incorporate it in the evidence of the agreement. "While, therefore, the fact that there is no promise on the part of the grantor to pay the debt is a circumstance entitled to considerable weight, as tending to show that the conveyance was not intended as a mortgage, and that the relation of debtor and cred- itor did not exist, it is only one of several circumstances to be con- sidered, and is not conclusive.^ As was remarked by Marshall, Ch. J., in the case already cited : " The want of a covenant to repay the money is not conclusive evidence that a conditional sale was in- tended, but it is a circumstance of no inconsiderable importance." § 35. Remedies reserved by the contract. — Another means of determining whether a contract is a conditional sale or a mortgage, though this may perhaps be almost identical with the one just con- sidered, is to inquire as to which class of contracts the mutual rights and remedies which are reserved by it to the parties belong. In the case of a mortgage, the mortgagee is restricted to his debt and interest, but, as an offset to this, he has the personal responsibihty of the debtor ; if the security be greater in value than the debt, the mort- gagor receives the benefit of it ; but if it be less, he must respond for the difference. The mortgagor has the right of redemption, but the mortgagee has the right of foreclosure, and the remedies are mutual and reciprocal. In the case of a conditional sale, on the contrary, the debt is extinguished by the conveyance, and unless the grantor avails ' Robinson v. Cropsey, 3 Edw. Ch. long, 78 N. Y. 543, rev'g s. c. 16 Hun, 138 ; Glover v. Payn, 19 Wend. 518. 570 ; Matthews v. Sheehan, 69 N. Y. s Horn V. Keteltas, 46 N. Y. 605 ; 585 ; Dougherty v. McColgan, 6 Gill Brown v. Dewey, iSandf. Ch. 56 ; Flagg & J., 275. V. Mann, 14 Pick. 467 ; Morris v. Bud- 28 MORTGAGES OF REAL PEOPERTY. [§ 36. hiinself of the privilege granted by the contract, the loss from the decrease in value, or the profit from an increase, must belong to the grantee.' But this test cannot be relied upon with safety, because the right to foreclose and to redeem do not depend upon each other, and do not always co-exist," and there may be a loan or a debt with- out personal liability." § 36. Inadequacy of price. — ^Among the circumstances which are of weight in this class of cases, may also be noted the value of the property as compared with the consideration, and great inade- quacy of price will be an indication that a security was intended and not a sale." But where the price paid at the time of the conveyance is inadequate, it will not become a mortgage if the grantee also cove- nants to pay a further sum in case the grantee does not call for a re- conveyance, for a credit may be given to the grantee for the price, without affecting the nature of the transfer as an absolute sale.* The following is the language of Chancellor Walwoeth, in Holmes V. Orci/iit (8 Paige, 243, 258) : " There is frequently great difficulty in determining whether a conveyance was intended by the parties as a mortgage or mere security for money, or as a conditional sale. But, as a general rule, where the contract and conveyance are made upon an application for a loan of money, this court, for the pur- pose of preventing usury and extortion, will construe it to be a mort- gage, whenever the person to whom the application for the loan is made agrees to receive back the money advanced, with legal interest, or a larger amount, and to reconvey the property within a specified time thereafter, whatever may be the form of the written contract, if it is apparent that the real transaction was a loan of money. And gross inadequacy of price is always a strong circumstance in favor of the supposition that a sale of the property was not intended." On the contrary, if the consideration paid is about the fair cash value of the property, the fact that there was no contract for the repayment of the ' Randall v. Sanders, 87 N. Y. 578, v. Anderson, 62 How. 268 ; McKinney 583, affi'g 23 Hun, 611. V. Miller, 19 Mich. 142 ; Turner v. Wil- ' Coote on Mortgages, 50. kinson, 72 Ala. 361. ' Brown v. Dewey, r Sandf. Ch. 56. ^ Baker v. Thrasher, 4 Den. 493 ; * Robinson V. Cropsey, 2 Edw. Ch. 138; Quirk v. Rodman, 5 Duer, 285. s. c. 6 Paige, 480 ; Reed v. Reed, 75 Me. " Brown v. Dewey, 2 Barb. 28 ; Wharf 264 ; Holmes v. Grant, 8 Paige, 243, v. Howell, 5 Binn. 499 ; Klein v. Mc- 258; Brown v. Dewey, 2 Barb. 28; Namara, 54Miss. 90 ; Critcherv.Walker, Wharf V. Howell, 5 Binn. 499 ; Coburn i Murphy, (N. C.) 488 ; 4 Am. Dec. 576. §§ 37-38.] CONDITIOWAL SALES. 39 purchase money and interest wbicli was binding upon the person making the conveyance, so as to make his general right to redeem as a mortgagor, and the corresponding right of the grantee to recover back his money instead of keeping the land, mutual and reciprocal, is a strong circumstance in favor of constniing the contract to be a conditional sale and not a mortgage." ' § 37. The subsequent dealings of the parties with relation to the transaction, in recognizing the existence of a debt or other- wise, may be shown to characterize their own understanding of their contract, but it must be remembered that the bargain received its character at its inception, and no subsequent event short of a new agreement can change a security into a sale or convert a sale into a, security." So also the relative position of the parties before and after the bar- gain may be considered. If the negotiation which preceded was for a loan,' and if the grantor retained possession afterward, these would be circumstances tending to show that a mortgage was intended, while, if the grantee first made apphcation to purchase, and entered immediately into possession, the presumption would be in favor of treating the transaction as a sale, and the agreement for repurchase as enforceable only according to its terms." § 38. Each case must stand on its own special circum- stances. — It will be observed that the line of distinction between what constitutes a mortgage and what a conditional sale, is not very clearly defined, and each case may be said to stand upon its own special circumstances.' In some cases it is said that where there is a doubt, the instrument will be construed to be a mortgage, because in this way the grantee, who is repaid the amount of his advances and interest, cannot be grievously injured," while in others the grantor is ' See also opinion of McCoun, V. C, v. Grant, 8 Paige, 243 ; Russell v. South- in Robinson v. Cropsey, 2 Edw. Ch. 138, ard, 12 How. (U. S.) 139 ; O'Reilly v. affi'd 6 Paige, 480 ; Randall v. Sanders, Donoghue, Ir. Rep., 10 Eq. 73 ; Coburn 87 N. Y. 578, affi'g 23 Hun, 611. v. Anderson, 62 How. 268. ^Kearney v. Macomb, l5 N. J. Eq. '^Saxton.v. Hitchcock, 47 Barb. 220. i8g. * Trucks v. Lindsey, 18 Iowa, 505 ; ° Holmes v. Grant, 8 Paige, 243; Hughes v Schraff, 19 Iowa, 342 ; Weath- Tibbs V. Morris, 44 Barb. 139 ; Marvin ersley v. Weathersley, 40 Miss. 469 ; V. Prentice, 49 How. 385 ; Fiedler v. Wing v. Cooper, 37 Vt. 179 ; Honore v. Darrin, 50 N. Y. 441 ; s. c. 59 Barb. Hutchings, 8 Bush (Ky.) 687 ; Cornell v. 651 ; Klein v. McNamara, 54 Miss. 90. Hall, 23 Mich. 377 ; Crane v. Bonnell, i *Rich V. Doane, 35 Vt. 125 ; Holmes Green. Ch. 264 ; Ketchum v. Johnson, 3 30 MORTGAGES OF KEAL PEOPESTT. [§ 39. required to furnish ample proof before an instrument which is abso- lute upon its face is adjudged to be subject to a right of redemption ; ' and where the grantor endeavors to show, not only that the instru- ment is a mortgage, but also that it is void for usury, the proof is re- quired to be clear and convincing.'' No general rule of universal application can be found, except that where the evidence is such as to create a doubt in the mind of the court, the transaction is held to be either a mortgage ° or a. conditional sale, according as the rules governing the one relation or the other will serve the ends of substantial justice and prevent fraud or oppression. Each case must be decided in view of the peculiar circumstances which belong to it and mark its character ; the only safe criterion is the intention of the parties, and this is to be determined from all of the facts under which the instrument was executed, as well as from the written memorials of the transaction.* "Where a dispute arises as to whether a transaction is really a con- ditional sale or a mortgage, the grantee has the same right to bring an action to have it adjudged absolute as the grantor has to have a right of redemption established.' § 39. The mere fact that a conveyance with an agreement to reconvey was recorded as a mortgage will not impress that character upon it. The object of the recording act was to pro- tect subsequent purchasers and incumbrancers; but an omission to comply with its provisions in. recording a conveyance would not in- validate such conveyance as between the parties, nor would an errone- ous recording thereof impair any existing right." Green. Ch. 370 ; Robertson v. Campbell, Campbell v. Dearborn, 109 Mass. 130 ; 2Call.(Va.)42i; Kingv.Newman,2Munf. Eiland v. Radford, 7 Ala. 724 ; Wilkin- (Va.)4o; Matthewsv.Sheehan,6gN.Y.585; son v. Roper, 74 Ala. 140; Brant v. Turnipseed v. Cunningham, 16 Ala. 501 ; Robertson, 16 Mo. 143 ; Crane v. Bon- 50 Am. Dec. igo ; Edrington v. Harper, nell, i Green. Ch. 264 ; Hickman v. Can- 3 J. J. Marsh (Ky.) 353 ; 20 Am. Dec. 145. trell, 9 Yerger (Tenn.) 172 ; 30 Am. Dec. ' Fullerton V. McCurdy, 55 N. Y. 637 ; 396 ; Pierce v. Robinson, 13 Cal. 116 ; Chase's Case, i Bland Ch. (Md.) 206; Peugh v. Davis, 96 U. S. 336; Rockwell v. 17 Am. Dec. 277. . Humphrey, 57 Wis. 410; Bennett v. Holt, * Brown v. Dewey, 2 Barb. 28. 2 Yerger (Tenn.) 6 ; 24 Am. Dec. 455, 'Stephens v. Allen, 11 Oreg. 188. ' Rich v. Doane, 35 Vt. 124. ^Horn V. Keteltas, 46 N. Y. 608; " Morrison v. Brand, 5 Daly, 40 ; Jack- Wheeland v. Swartz, i Yeates, 579 ; son v. Richards, 6 Cow. 617, 619 ; Jack- Stephens V. Allen, II Oreg. i88 ; Wil- son v. Burgott, 10 Johns. 457; Jackson helm V. Woodcock, 5 Pacif. Rep. (Oreg.) v. Phillips, 9 Cow. 94 ; Jackson v. West, 202 ; Cornell v. Hall, 22 Mich. 377, 383 ; 10 Johns. 466. § 40.] CONDITIONAL SA.LES. 31 § 4:0. Examples of conditional sales and mortgages. — In Maeaulay v. Porter (71 N. Y. 173), a conveyance of property was made which was accompanied by the following agreement, executed by the grantee : " In consideration of a sale and conveyance of a house and lot by T to me (describing it), I, P, agree to take said property, subject to a mortgage of $1,200 ; all other incumbrances and taxes to be paid ofE by T; and I will pay her in cash, $1,300, and I will sell the property, at her discretion and mine, within the year, and divide the property equally. I wiU loan her $500 and take her note, to be paid within the year, or sooner, if the property is sold. If the property shall be sold within four months, I will cancel the note and surrender it to her. The premises may be sold at the op- tion of either party for not less than $4,000. If not sold within one year from date, all interest of T in the premises shall cease." It was held that the defendant, P, under his deed, took the fee of the land, subject to no other condition than that he should account for one-half of the profits on a sale thereof, if made within a year, and that the deed was properly recorded among absolute conveyances. The agree- ment was not a defeasance, which was to render the deed void on the payment of any sum of money, nor was there anything in the trans- action in the nature of a mortgage. The grantee, P, was not a cred- itor taking the land to secure any debt. ISTo debt existed, or was created in respect to the $2,500 paid for the property. If the land had depreciated, the grantee would have had no claim for reimburse- ment, nor was any privilege reserved to the grantor to redeem on payment of any sum. These circumstances were declared by Ka- PALLO, J., to be of great importance in determining the character of the transaction. In Palmer v. Ournsey (7 Wend. 248) there was an existing debt. The land was conveyed, in consideration of the debt, which was evidenced by a note. The note was surrendered. An agreement which was held to be a defeasance, was to the effect that if the land should sell for enough to pay the amount of the debt, and the prior mortgages on the premises, and the trouble of the grantee, he would pay back to the grantor all the overplus. There was no limit of time for the sale, nor was the grantee to get anything out of it but his debt and the trouble of collecting it. The court held that this agree- ment showed that it was not the intention of the grantor to part with any more of his interest than enough to satisfy the plaintiff's debt and the prior mortgages, and therefore it was intended only as security for 32 MORTGAGES OF REAL PROPERTY. [§ 40. the debt. This ruling would have led to the conclusion that the grantor might have redeemed, and it was applied to the case, by holding that the debt was not extinguished by the conveyance, though the note was surrendered, and that the payee could recover on the note, the whole value of the property having been consumed by the prior mortgages. That case was, however, disapproved in the subsequent case of Baker v. Thrasher (4 Den. 493). In that case, an absolute deed was accompanied by a covenant, reciting that the deed had been given for the purpose of paying a debt, and agreeing that if the grantor could find a purchaser within a year, the grantee would convey to such purchaser for the amount of the debt and interest ; but that if the sale should not be made within a year, the grantee would pay for the land such additional sum as might be fixed by appraisers. It was held that this agreement did not make the deed a mortgage, there . being no condition under which the title could ever be revested in the grantor, but it being intended to remain in the grantee, or the person to whom he might convey.' In Conway v. Alexander (Y Cranch, 218), land had been conveyed to a third person in trust, to reeonvey to the grantor, if he should re- pay the purchase money before a day named, and, if not, then to convey to the purchaser. The money was not tendered at the time provided. There was no bond or other evidence of debt, and the court held the transaction to be a conditional sale and not a mort- gage. Where a person negotiated with the owner of land for its purchase, but, being unable to pay the price, induced a third person to become the purchaser, who, at the time, stated if he would make certain pay- ments at a specified time, he would convey the property to him, it was held that the transaction was an absolute purchase with a parol conditional agreement of sale and not a mortgage.' The owner of a farm contracted with a person to procure a pur- chaser upon the agreement that he should have all he could obtain over $2,000 for his trouble. To give effect to this agreement, the farm was conveyed to the person intending to act as a broker, who re- conveyed on condition that the reconveyance was to be void on ' Per Rapallo, J., in Macaulay v. Por- Doll, 107 111. 275 ; Eckert v. McBee, 27 ter, 71 N. Y. 173, 179. See also Rue v. Kans. 232. « Hill V. Grant, 46 N. Y. 496. § 40.] coin)iTio]srAL sales. 33 repayment of $2,000. The reconveyance was held to be a conditional sale and not a mortgage.' A conveyance of a leasehold and personal property made by a creditor to a debtor, npon the terms that the indenture is to be void if the grantee, his executors or assigns, should omit to pay certain debts, is not a mortgage, but a conveyance upon condition to be avoided by proof of the omission to pay the debts.' ' Porter V. Nelson, 4 N. Hamp. 130. ' Hagthorp v. Veale, 7 Gill & J. (Md.) 13 ; 26 Am. Dec. 594. CHAPTER III. EQUITABLE MORTGAGES AND IMPLIED LIENS EOE PTJECHASB MONET. EQUITABLE MORTGAGES. i 41. Definition ofan equitable mortgage. EQUITABLE MORTGAGES BY DEPOSIT OF TITLE DEEDS. 42. English rule. 43. Rule in this State. 44. The case of Rockwell v. Hobby. 45. In Hackney v. Vrooman. 46. When an agreement for a lien upon land is enforced in equity as a lien. 47. If the agreement for a lien be in writing. 48. Examples of equitable liens. 49. Lien reserved in deed of convey- ance. 50. A writing properly authenticated, by which an equitable lien is created, may be recorded. 51. Liens created by parol. THE LIEN OF_A VENDOR FOR UNPAID PURCHASE MONEY. 52. Nature of the lien. 53. Debt barred by limitation. 54. Lien lasts until debt is paid. 55. Improvements made upon the land by the purchaser are subject to the lien. 56. Lien not affected by disabilities of vendee. 57. Statute. 58. Assignment of vendors' liens. 59. When a third person may enforce a vendor's lien. § 60. What amounts to a waiver of a vendor's lien. 5i. The taking of a bond or note from the vendee for the payment of the purchase money will not dis- charge the lien. 62. The lien is waived when the parties agree to substitute something else for the unpaid purchase money. 63. Not waived where the intent is to preserve it. 64. Lien of a vendee for money paid on contract of purchase. PRIORITY OF EQUITABLE MORTGAGES AS AGAINST SUBSEQUENT PURCHASERS AND INCUMBRANCERS. 65. General rule. 66. The lien for purchase money. 67. A conveyance to a bona fide pur- chaser. 68. As to what shall be sufficient no- tice. 69. If the original vendor remains in open possession. 70. When judgment will have priority. REMEDY PROPER FOR AN EQUITABLE MORTGAGEE. 71. By suit in equity. 72. Parties to action. 73. Defenses. 74. Retaining possession. 75. Tender of deed before action to enforce lien for purchase money. EQIHTABLE MOETGAGBS. § 41. Definition of an equitable mortgage. — There is a class of liens wMcli are known by the name of " Equitable Mortgages." They differ from mortgages in the fact that there is no conveyance of the land, either absolute or conditional, and the lien arises under the con- § 42.] EQUITABLE MORTGAGES AND IMPLIED LIENS. 35 tract or agreement of tlie parties. An absolute conveyance with a parol defeasance is, properly speaking, a mortgage, and is governed by all of the rules whicb apply to a mortgage in any other form ; bnt such contracts are often spoken of as equitable mortgages, in order to distinguish them from mortgages in which the defeasance is incor- porated in the conveyance. A better term to apply to such securities might be to designate them as conveyances which are equitably mort- gages ; but the ordinary term of equitable mortgages is convenient and need not be misunderstood. An equitable mortgage of the kind which it is now proposed to discuss is a Hen upon real estate, not created by a conveyance from the mortgagor, of such a character that it is recognized in equity as a security for money, and is treated in equity in some respects as a mortgage.' Equitable mortgages are simply securities by which no legal inter- est in the property mortgaged passes to the creditor, and thus include those transactions in which property, or the evidences of property, come into the hands of the creditor, upon a written or verbal, express or imphed, agreement that such property shall be answerable for the debt, as well as those transactions in which the intention or duty of creating a charge on property is held to arise from an express or im- phed contract to render that property liable.'' EQUITABLE MOETQ-AGES BT DEPOSIT OF TITLE DEEDS. § 42. English rule. — A common mode of creating such a lien in England is by a deposit of title deeds as security for a loan of money. In the absence of a recording act, and where a vendor or mortgagor of land is required to produce the evidences of his title on every transfer or mortgage of his property, such a pledge may be a convenient and safe way for securing a loan. It has been held not to be an invasion of the statute of frauds, and the English courts of equity have sus- tained the right of the lender to retain the deeds until the loan was repaid, and have enforced the lien by a sale of the land.' In the ab- sence of proof to the contrary, evidence of an advance of money and the finding of title deeds of the borrower in the possession of the lender have been held to establish an equitable mortgage." ' Bouvier's Law Diet. and cases cited ; Day v. Perkins, 2 Sandf . ' Fisher on Mortgages, 51. Ch. 359 ; Ray v. Adams, 4 Hun, 332 ; ^ Coote on Mortgages, 248 ; Fisher on James v. Morey, 2 Cow. 246 ; Carpenter Mortgages, 51 et seq. • v. O'Dougherty, 67 Barb. 397. * Rockwell V. Hobby, 2 Sandf. Ch. 9, 36 MOETGAGES OF REAL PKOPEETY. [§§ 43-45. § 43. Rule in this State.— Where a recording act is in full force, and where, consequently, the possession of title deeds is a matter of small importance, their deposit would constitute but a slight security ; ' and in this State the doctrine of equitable mortgage by deposit of title deeds is almost unknown, because we have no practice of creat- ing liens in this manner.*' The mere fact that title deeds were found in the possession of the creditor would certainly afford no presump- tion of hen, and it is a question fairly open for dispute as to whether the doctrine can exist under our statutes.' § 44. The case of Rockwell v. Hobby (2 Sandf. Oh. 9) goes farther toward sustaining the doctrine of eqidtable lien by deposit of title deeds than any other reported decision in this State. In that case a son paid a mortgage incumbrance on his mother's property with his own money, and took a receipt in his own name ; the mort- gage was not cancelled nor discharged. There were strong equitable considerations in his favor, and though the evidence was vague, it ap- peared to be probable that an assignment of the mortgage either was made, or was intended to have been made. The parties to the trans- action were dead, but the mother's unrecorded title deed to the prop- erty was found in the possession of the sou's representatives ; and as one ground for doing justice in the case, the vice-chancellor held that this was evidence sufficient to sustain the lien. The decision was plainly a fair and just one, but no subsequent case has followed it to the extent of its full claims. It is criticised in Bowers v. Johnson (49 ]Sr. T. 432), and, in that case, where an advance of money was shown, coupled, with the possession by the lender of a mortgage be- longing to the borrower, it was held that there was no, presumption that the mortgage had been deposited with him as collateral security. It was observed by the court that the case of Rockwell v. Hobby {supra) might well stand upon its own special circumstances, but that since mortgages are, in this State, rarely transferred by an agreement and delivery without writing, in the absence of written evidence there is a presumption against any transfer. § 45. In Hackney v. Vrooman (62 Barb. 650), a bond and mort- gage were found, after the mortgagor's death, in a tin box, con- ' Berry v. Mutual Ins. Co., 2 Johns. Mt does not exist in Tennessee. Mea- Ch. 603. dor V. Meador, 3 Heisk. (Tenn.) 562 ; nor ' Stoddard v. Hart, 23 N. Y. 561 ; see in Massachusetts, Ahrend v. Odiorne, also Berry v. Mutual Ins. Co., 2 Johns. n8 Mass. 261. Ch. 603. §§46-47.] EQUITABLE MORTGAGES AND IMPLIED LIENS. 37 taining paid notes, papers of old dates, bills of goods, old outlawed notes due him, and other miscellaneous papers ; and this fact, with proof of a declared intention of the mortgagee to give the bond and mortgage to his daughter, who was the wife of the mortgagor, was held to be sufficient to establish such gift. The delivery of a contract for the purchase of lands by the pur- chaser to a third person as security for becoming a guarantor for such purchaser, and without any written assignment, constitutes an equita- ble mortgage.' So, an assignment of a certificate of entry upon lands of the United States as security for a debt has been held to create an equitable lien upon the land." § 46. When an agreement for a lien upon land is enforced in equity as a lien. — It has been said that an agreement for a mortgage is, in equity, a specific lien upon the land.' This must not be con- strued to mean that a parol promise to give a mortgage can be en- forced except in very special cases. Such a contract, to be vaKd, must be in writing ; and the advancing of money is not such a part performance as will take the case out of the statute of frauds.' The exceptions to the rule wiU be found in cases where there is an ele- ment of accident, fraud, or mistake, and where, upon the well-estab- lished principles of courts of equity, relief may be given.' An agreement in writing, upon a valuable consideration, to give a mortgage," or a mortgage defectively executed, or an imperfect at- tempt to create a mortgage, or to appropriate specific property to the discharge of a particular debt, will create a hen in equity, the rule being founded upon the maxim that a court of equity looks upon things agreed to be done as actually performed.' § 47. If the agreement for a lien be in writing, a court of equity will not be embarrassed by its being in a form somewhat un- usual, and when it is plain that the parties intended to impose a charge upon land as a security for the performance of their engage- ' Allen V. Woodruff, g6 111. ii. v. Anderson, 34 N. J. Eq. 496, and cases ' Storer v. Bounds, i Ohio St. 107 ; collected by reporter in note. Hill V. Eldred, 50 Cal. 398. ^ Ray v. Adams, 4 Hun, 332. ' In the matter of Howe, i Paige, 125, ' Lynch v. Utica Ins. Co., 18 Wend. 130; ig Am. Dec. 395; White v. Car- 236. penter, 2 Paige, 264 ; Payne v. Wilson, ' Payne v. Wilson, 74 N. Y. 348 ; Na- 74 N. Y. 348 ; Burdick v. Jackson, 7 tional Bank of Norwalk v. Lanier, 7 Hun,488; Bloom v.Noggle, 4 0hioSt. 45. Hun, 623; Burdick v. Jackson, 7 Id. * Marquat v. Marquat, 7 How. 417 ; 488 ; Burger v. Hughes, 5 Id. 180 ; Price V. Cutts, 28 Ga. 142. See Dean Stewart v. Hutchinson, 29 How. 181. 38 MORTGAGES 01" EEAL PROPERTY. [§ 48. ments, the agreement will be treated as conferring rights similar to those ordinarily evidenced by a mortgage.' The same rule will hold where the parties do not explicitly so contract, but it is manifestly equitable that the land should be charged. For example, in a case where two owners of adjoining parcels of land mortgaged both par- cels to secure the debt of one, who gave his bond to the other, con- ditioned to pay the whole debt, it was held that this bond created an equitable mortgage and might properly be recorded." It has been said that an agreement for a lien or charge m rem, constitutes a trust, and is governed by the general rules, applicable to trusts.' § 48." Examples of equitable liens. — Where a married woman purchased land and gave her note therefor, in which she said : " For the payment of which I hereby pledge my sole and separate estate, being 514 West Forty-third Street," the lien of the vendor was en- forced by a sale." So a declaration in a promissory note executed by a mortgagor to a mortgagee that it " shall be covered by the mort- gage," or " shall be subject to the mortgage," shows an intention to make the mortgage a valid security for the debt and creates an equit- able lien or mortgage on the premises for its payment,' even though the debt which the mortgage, at its inception, was intended to secure, has been paid." A covenant by a debtor with his creditor to purchase certain lands and then to mortgage them to him, will be enforced in a court of equity by a decree of sale.' An agreement between vendor and vendee that the latter shall execrfte to the former a mortgage upon the land to secure payment of the purchase money, will give to the vendor or his assigns the same rights in equity as if the mortgage had been executed.' Where, by a contract for the sale of land, the vendor retains the title as security for the unpaid purchase money, and the vendee exe- ' De Pierres v. Thorn, 4 Bosw. 266 ; ' Butts v. Broughton, 72 Ala. 294. Seymour v. The Canandaigua R.R. Co., . * Peckham v. Haddock, 36 111. 39 ; see 14 How. 531 ; Chase v. Peck, 21 N. Y. also Waddell v. Carlock, 41 Ark. 523 ; 581; Lynch V. iftica Ins. Co., 18 Wend. Prickett v. Seybert, 71 Ala. 194; Bry- ^36 ; Stewart v. Hutchins, 6 Hill, 143. ant v. Stephens, 58 Ala. 636. ^ Hoyt V. Doughty, 4 Sandf. 462. ' Wright v. Shumway, i Biss. 23 ; 2 ' Fletcher V. Morey, 2 Story, 555. Am. Rep. 20. ■• Mears v. Kearney, i Abb. N. Cas. " Richardson v. Hamblett, 33 Ark. 237. 303- §§49-51.] EQUITABLE MOETGAGES AND IMPLIED LIEN'S. 39 cutes his notes therefor, the contract and notes may be sold and en- forced in equity as a mortgage.' In Perry v. Boa/rd of Missions, etc., of ATharvy (102 N. Y. 99), a conveyance was made to a religions corporation of a dwelliDg-house, which was intended to be used as a residence for a bishop. The trustees of the corporation passed a resolution that the land property be mortgaged for the payment of the sum required for repairs and fitting it up for the desired purpose. In reliance upon this resolution the plaiutifE incurred expense, and it was held that he had an equitable lien. It wa& also declared by the court that the plaintifE's case was within the general doctrine of equity which gives a right equivalent to a lien, when in no other way the rights of parties can be secured. § 49. Lien reserved in deed of conveyance. — A lien upon lands may also be created by a reservation in the deed of conveyance," and a charge for the support of a third person, when so reserved, has been held to be vahd." A lien so reserved, by express terms, in the deed of conveyance of the property, is more than a vendor's implied Hen, and is not lost by assignment of the notes given for the debt, but passes to the assignee.* § 50. A writing properly authenticated by which an equitable lien is created may be recorded in like manner as a technical mortgage, and its record will confer the same rights as to priority over subsequent incumbrances.' § 51. Liens created by parol. — ^While a parol agreement to ex- ecute a mortgage will not create a Hen on the land as between the parties to it, because of our statute of frauds, this is a rule of evi- dence, merely, and a subsequent performance of the agreenient will be vaHd for some purposes as of the time when the parol promise was given. This rule was appHed in a case under the bankruptcy law, when, but for the previous parol agreement, the mortgage would have been void as to creditors." Where a mortgage was executed by a corporation for part of the pur- chase price of chattels purchased by it, and the mortgage was void be- 1 Wright V. Troutman, 8i 111. 374. 467 ; Payne v. Wilson, 74 N. Y. 348 ; " Dingley v. Bank of Ventura, 57 Cal. Markoe v. Andras, 67 111. 34. 467. ' Hunt V. Johnson, 19 N. Y. 279 ; = Borst V. Crommie, 19 Hun, 209. Crane v. Turner, 7 Hun, 357 ; Parkist ■* Dingley v. Bank of Ventura, 57 Cal. v. Alexander, i Johns. Ch. 394. « Burdick v. Jackson, 7 Hun, 488. 40 MORTGAGES OF KEAL PKOPEKTT. [§§52-53. cause of a statute prohibiting the executing of mortgages by the cor- poration, the lien was sustained on the ground that the essence of the transaction between the parties was to transfer, not a complete title, but a mere right to redeem, from the mortgage.' THE LIEN OF A VEITOOE FOB m^'AID PmtCHASB MONET. § 52. Nature of the lien. — The vendor, upon the sale of real -es- tate, has in all cases an equitable lien upon the estate sold, for the un- paid purchase money, as between himself and the vendee, unless there is either an express or implied agreement to waive such lien. Prima faoie the purchase money is a lien on the land, and it lies with the purchaser to show that the vendor agreed to rest on other security." The lien does not exist in favor of a person who advances money to purchase lands, but only between the vendor and vendee and the persons representing them, and then only for the purchase money.' But the fact that the vendor, at the request of the vendee, gives the deed in the name of the vendee's wife, does not preclude the vendor from enforcing his lien.* Where one conveys his interest in copartnership lands to a co- partner, he is entitled to a vendor's lien, on the death of the copart- ner, before payment, in the absence of fraud and there being no creditors of the deceased's estate.' A vendor's lien extends to equitable titles, subject to the risk that "bona fide purchasers from the legal holder may intervene." The vendor has the same hen while the contract is executory, and may have the land sold in discharge of the Men if such remedy is re- quired for his protection.' § 53. Debt barred by limitation. — A vendor's lien is a mere equity in favor of the vendor and his legal representatives, the effect of which is to preserve to him and them a qualified title to the land, ' Coman v. Lakey, 8o N. Y. 345. Barrett v. Lewis, 106 Ind. 120 ; Diven- ' Garson v. Green, i Johns. Ch. 308 ; ger v. Branigan, 95 Ind. 221. In other Clark V. Hall, 7 Paige, 382 ; Pitts v. States it is not recognized at all. Moore Parker, 44 Miss. 247 ; Stephens v. Shan- v. Ingram, 91 N. C. 376 ; Hoskins v. non, 43 Ark. 464 ; Chapman v. Liggett, Wall, 77 N. C. 249 ; Smith v. High, 85 41 Ark. 292. N. C. 93 ; Kelly v. Ruble, 11 Oreg. 75. 3 Marquat v. Marquat, 7 How. 417 ; ■« Williams v. Crow, 84 Mo. 298. McKay v. Green, 3 Johns. Ch. 56 ; Pet- ^ Rggse v. Kinkead, 18 Nev. 126. tus V. McKinney, 74 Ala. 108. In some * Ortmann v. Plummer, 52 Mich. 76. States it exists in favor of a third per- ' Kerngood v. Davis, 2 S. C. 183. son who advances purchase money. §§ 54-55.] EQUITABLE MOETGAGES AND IMPLIED LIENS. 41 until its price has been paid ; it cannot exist apart from the debt, and "when the statute of limitations runs against the debt the Hen also ceases to have any force.' Where a judgment is obtained on a pur- chase-money note preserving it from the statute of limitations, the lien is also preserved.^ If the circumstances of the case are such that the vendor of the land would not be barred by the statute of limitar tions, a person who has acquired his rights would not be." § 54. Lien lasts until debt is paid. — It may also be said that un- less there be a waiver, express or implied, the hen remains so long as the debt lasts. Thus, where the vendor and vendee before full per- formance of the contract made a usurious agreement, and the mort- gage given in pursuance of that agreement was set aside, it was held that the original debt was not invalidated, and that the unpaid pur- chase money remained an equitable lien upon the land.' So, where a bond and mortgage for the purchase money was defectively exe- cuted, a vendor's lien was enforced." So, also, where by the fraud of the vendee, a part of the price of the land sold in fact remained un- paid, although the vendor supposed it had been paid in full at the time, there is no waiver of the equitable lien for the part of the price that actually remains impaid. If, upon the sale of a farm, the pur- chaser should pay for half of it in good money, and for the other half in the worthless bills of a broken and insolvent bank, from which nolhing could be obtained, the vendee fraudulently representing such bills to be good and collectible, the vendor would have the right to elect either to rescind the sale and have a reconveyance of the land, or to charge the land itself with the portion of the purchase money which re- mained unpaid, as an equitable lien. If, instead of being a sale for cash, other property be given in exchange, and the vendee by fraud induces the vendor to believe that the property he is receiving is more desirable than it really is, the vendor can enforce his claim for damages, which in reality represents a portion of the purchase money, as a lien upon the land.' § 55. Improvements made upon the land by the purchaser are subject to the lien, both in his hands and in the hands of his ' Borst V. Corey, 15 N. Y. (i Smith), 772 ; contra Hale v. Baker, 60 Tex. 505 ; Waddell v. Carlock, 41 Ark. 523 ; 217. Linthicum v. Tapscott, 28 Ark. 267 ; ^ Beck v. Tarrant, 61 Tex. 402. McRath V. Simmons, Lead. Cas. ' in Eq. ^ Rodman v. Sanders, 44 Ark. 504. Vol. I. p. 496 (4th ed.) Amer. Notes and * Crippen v. Heermance, g Paige, 211. cases cited ; Stephens v. Shannon, 43 ^ Burger v. Hughes, 5 Hun, 180. Ark. 464 ; Trotter v. Irwin, 27 Miss. * Bradley v. Bosley, i Barb. Ch. 125. 42 MORTGAGES OF EEA.L PROPERTY. [§§ 56-58. legal representatives,' and when the Hen is upon a lease, it extends to a renewal upon it." § 56. Lien not affected by disability of vendee. — The lien is created by operation of law, the vendor retaining an interest in the land to the amount of his lien, hence it is not affected by the disabili- ties of the vendee, even though the vendee be a company, which, by a statutory provision, has no power to mortgage real estate or to give any Ken thereon.' § 57. Statute. — ^It is provided by statute that whenever any real estate, subject to a mortgage executed by an executor or testator, shall descend to an heir or pass to a devisee, such heir or devisee shall sat- isfy and discharge such mortgage out of his own property, without resorting to the executor or administrator, unless there be an express direction in the will of such testator that such mortgage be otherwise paid." The sole object of the statute was to change the rule of the common law under which the heir or devisee has the right to call upon the representative of the decedent to pay off the mortgage. A vendor's lien is not a mortgage, and it has often been held, both before and since the statute, that in case of unpaid purchase money, the heir or devisee is entitled to have the same paid out of the per- sonal property." § 58. Assignment of vendors' liens. — The transfer by indorse- . ment of a note given for purchase money, does not transfer the lien, except in so far as that may be necessary to protect the vendor as in- dorser. "Where a vendor had negotiated the note, but was obliged to take it up himself when it fell due, his claim to a lien on the land was sustained, but the assignee of the note or other security has never been permitted to enforce a lien in his own behalf." The lien exists in favor of the vendor, and to insure to him the payment of the pur- chase money. If he assigns the claim to a third person, and the transfer be absolute and unaccompanied by any guarantee of the vendor, and for the beneiit of the assignee, and if the lien be not men- tioned it will be gone forever, unless the claim again becomes the property of the vendor, when the lien will revive in his favor.' The ' Warner v. Van Alstyne, 3 Paige, 513. 231 ; Johnson v. Corbett, 11 Paige, 265 ; ' Phyfe V. Wardell, 5 Paige, 268. Lamport v. Beeman, 34 Barb. 239 ; = Dubois V. Hull, 43 Barb. 26. Wright v. Holbrook, 32 N. Y. 587. * I R. S. 749, § 4. ' White v. Williams, i Paige, 502. 'Livingston V. Newkirk, 3 Johns. Ch. 'Preston v. Ellington, 74 Ala. 133; 312 ; Cogswell v. Cogswell, 2 Edw. Ch. Lindsey v. Bates, 42 Miss. 397. § 59.] EQUITABLE MOETGAGES AKD IMPLIED LIEKS. 43 reason of this rule is, that there is no peculiar equity in favor of the third person, and it wiU not apply where the transfer is for the pur- pose of paying the debt of the vendor, so far as it may be available, and is therefore for his benefit. In such a case the equity con- tinues.' "While an assignment of the debt will not operate as a transfer of the lien, the lien may be assigned with the debt by express terms," and it passes to an assignee for the benefit of creditors as part of the vendor's property.' It has also been said that the lien may be as- signed by parol.* A lien carved out of the estate by the express contract of the par- ties or reserved by the vendor by the terms of his deed, stands on a different basis with respect to an assignment of it from the implied liens for the purchase money which are recognized by courts of equity in favor of *a vendor who has voluntarily parted with his entire legal title. Where the Hen is created by contract a transfer of the debt carries the lien.' Where a husband was the owner of an equitable lien for unpaid purchase money, and united with his wife in a conveyance of the property, under a mistaken belief that his wife had title, it was held that the grantee acquired the equitable lien.° § 59. When a third person may enforce a vendor's lien. — A lien for purchase money may, under some circumstances, also be en- forced in favor of a third person, notwithstanding doubts formerly expressed on that subject. As, for example, it may be enforced by marshalling assets in favor of legatees and creditors, and giving them the benefit of it by the way of substitution to the vendor when he seeks payment out of the personal assets of the vendee ; or in favor of a widow, whose dower right may be affected by the lien.' So, if a subsequent incumbrancer or purchaser from the vendee is com- pelled to discharge the lien of the vendor, he will, in like manner, be entitled to stand substituted in his place against other claimants on • Hallock V. Smith, 3 Barb. 267 ; Smith Peterson, 75 Ala. 109 ; Dingley v. Bank V. Smith, 9 Abb. N. S. 420. of Ventura, 57 Cal. 467. ' Smith V. Smith, 9 Abb. N. S. 420 ; * Lamberton v. Van Voorhis, 15 Hun, Chapman v. Liggett, 41 Ark. 292. 336 ; Arnold v. Patrick, 6 Paige, 310 ; 3 Hallock V. Smith, 3 Barb. 267. Fisk v. Potter, 2 Keyes, 72 ; Hulett v. * Fisher on Mortgages, 62. Whipple, 58 Barb. 227. ' Payne v. Wilson, 74 N. Y. 348 ; ' Warner v. Van Alstyne, 3 Paige, Markoe v. Andras, 67 111. 34 ; Lowery v. 513. 44 MOETGA&ES OF BEAL PEOPEETY. [§ 60. the estate, under the vendor, and to have the assets marshalled in his fa- vor.' And if one of two parties, vrhose lands are jointly subject to a vendor's lien, pays a judgment for the debt, he is entitled to subro- gation to the vendor's rights, for the purpose of enforcing his right of contribution.'' § 60. What amounts to a waiver of a vendor's lien.— The giv- ing of a lien for the unpaid purchase money is supposed to be in- tended in every transfer of real estate, unless the parties by their conduct show that no such security was contemplated, and the lien will be defeated if the vendor do any act manifesting an intention not to rely upon the land for security. It will not be affected by taking the mere written obligation of the vendee, even though it be negotiable, and any bond, note, or covenant, given by the vendee alone, is considered as intended only to countervail the receipt of the purchase money contained in the deed, or to show the time and manner in which the payment is to be made, unless there is an ex- press agreement to waive the equitable hen.^ Neither is it waived by taking a renewal note.' On the other hand, the lien is considered as waived whenever any security is taken on the land or otherwise, for the whole or any part of the purchase money, unless there is an express agreement that the equitable lien upon the land shall be retained. "Where, by agreement of the parties, there is express security, either by the obligation of a third person,' or by express lien upon the estate or some portion of it, or upon other property, for a portion of the purchase money, it excludes the idea of an implied lien for the residue." Where the note of a third party is given in payment of a part of the purchase money, the lien would not be waived for the balance, and there is strong reason and some authority for holding that the taking ' Story's Eq. Jur. § 1227 ; Turner v. Board, etc., 87 Ind. 162 ; Lord v. Wil- Peck, I Barb. Ch. 549 ; Crafts v. Aspin- cox, gg Ind. 491. wall, 2 N. Y. 1,2 Comst.) 289. « Fish v. Rowland, i Paige, 20 ; Shir- ' Beck V. Tarrant, 61 Tex. 402. ley v. Sugar Refinery, 2 Edw. 505 ; Vail ' Garson v. Green, i Johns. Ch. 308 ; v. Foster, 4 N. Y. (4 Comst.) 312 ; Gay- White V. Williams, I Paige, 502 ; Shir- lord v. Knapp, 15 Hun, 87 ; Camden v. ley V. Sugar Refinery, 2 Edw. 505 ; War- Vail, 23 Cal. 633 ; Richards v. McPher- ren v. Finn, 28 Barb. 333. son, 74 Ind. 158 ; Masters v. Templeton, * Cordova V. Hood, 17 Wall. i. 92 Ind. 447; Hawkins v. Thurman, i ' Masters v. Templeton, 92 Ind. 447 ; Idaho Ter. (N. S.) 598 ; Land Co. v. Way V. Patty, i Ind. 102; Crane v. Peck, 112 111. 408; contra, Anketel v. Converse, 17 Ohio St. n. § 61.] EQUITABLE. MOETGAaES AND IMPLIED LIENS. 45 of such an obligation as security for a portion of the amount, will not affect the lien as to the residue.' Thus, where two persons agreed to exchange lands, the first agreeing to pay certain mortgages on his land and also giving back a mortgage on the land conveyed to him, and he failed to pay the mortgage on his land, it was held that the second party had a right to a vendor's lien for the amount of the mortgages on the land conveyed to him, and that it was not waived by his taking back a mortgage for another part of the purchase price.' Taking the note of the husband for land conveyed to the vnfe is not a waiver of the vendor's lien.' A vendor's lien is not lost by the acceptance of securities which have no legal vahdity." And where the vendor was, subsequently to the sale, by fraudulent representations induced to accept a worthless bond in payment of a portion of the purchase money, it was held that this was not a payment and that the vendor's lien still sub- sisted.' The surrender of a mortgage voluntarily on a fair contract is an abandonment of it, and does not revive the equitable lien." § 61. The taking of a bond or note from the vendee for the payment of the purchase money, will not discharge the lien, and there is no good reason why the prosecution of such a bond or note should have that effect. The obtaining of a judgment upon the debt may, with other facts, be some evidence of an intention to waive the lien ; but, in itself, it does not amount to a waiver.' It may, indeed, be said that the taking of security of any kind for the purchase money, is only evidence of an intention to abandon the lien, and that even when it is very strong, it does not amount in itself to a waiver, but that the inference of a waiver which is thus created may be rebutted by proof of an agreement or of circumstances leading to the presump- tion of an agreement to the contrary.' ' Hallock V. Smith, 3 Barb. 267. Langley, 85 Ind. 77 ; Lord v. Wilcox, gg ^ Elliott V. Plattor, 43 Ohio St. igS. Ind. 4gi. ' Bakes v. Gilbert, g3 Ind. 70 ; Felton 'Brown v. Byam, 65 Iowa, 3-4 ; Mc- V. Smith, 84 Ind. 485 ; Martin v. Canall, Doll v. Purdy, 23 Iowa, 277 ; Bradley v. 72 Ind 67 ; Humphrey V. Thorn, 63 Ind. Bosley, i Barb. Ch. 125. 2g6; Anderson v. Tannehill, 42 Ind. "Mattix v. Weand, ig Ind. 151. 141. ' Dubois V. Hull, 43 Barb. 26 ; contra, * Bakes V. Gilbert, 106 Ind. 558 ; Fouch Ould v, Stoddard, 54 Cal. 613. V. Wilson, 60 Ind. 64 ; 28 Am. Rep. 651 ; * Fisher on Mortgages, 63 ; Cordova v. Felton V. Smith, 84 Ind. 485 ; Hines v. Hood, 17 Wall. i. 46 MORTGAGES OF REAL PEOPEETT. [§§ 62-64. § 62. The lien is waived when the parties agree to substitute something else for the unpaid purchase money, as the covenant or obKgation of the vendee to do some collateral act.' In such a case the covenant or obligation takes the place of the unpaid purchase money, and forms part of the consideration. There is, therefore, no part of the purchase money unpaid, and the vendor's lien is only in- tended to secure such a debt. If a debt or obligation of another kind has been created by the parties, they must also create security for it if they desire it to be secured.'' As examples of this rule, a covenant to support a third person, given in payment for a conveyance of land, is not secured by any equitable hen upon the land so conveyed ; ' and a covenant against incumbrances contained in a deed given as part of the purchase price for other real estate can be enforced only as the personal obligation of the person making it.* So, also, the hen is lost when the vendee has done all that he agreed to do, as where he de- livered a deed of other property to a third person in escrow, even though such third person wrongfully refuses to surrender it.' § 63. Not waived where the intent is to preserve it. — An equitable lien created by contract or by an ineffectual attempt to create a legal lien, is not waived by thereafter taking a mortgage properly executed so as to give priority to intermediate incumbrances. In such a case the equitable lien has had an existence and the law is not anx- ious to imply a waiver. Whether it has ceased to exist depends upon the rules of equity which determine whether a w'aiver has taken place. It is a general rule that where an equitable and legal estate meet and vest in the same ownership, the former is merged in the latter. But the doctrine of merger, as applied to mortgages, is founded upon equitable princi- ples, and is only applied where equity requires that it should be. "Where the owner of the legal and equitable titles has an interest in keeping those titles distinct, as where there is an intervening incum- brance, he has a right so to keep them, and the equitable title will not be merged and thereby extinguished.' § 64. Lien of a vendee for money paid on contract of pur- chase. — Another example of an equitable lien is furnished, where ' McKillip V. McKillip, 8 Barb. 552 ; * Hare v. Van Deusen, 32 Barb. 92. Patterson v. Edwards, 7 Cushman's Mis- * Coil v. Fougera, 36 Barb. 195. sissippi R. 67. * Per Folger, J., in Payne v. Wilson, •^ Hare v. Van Deusen, 32 Barb. 92. 74 N. Y. 348, 353. 3 McKillip V. McKillip, 8 Barb. 552. §§ 65-66.] EQUITABLE MORTGAGES AND IMPLIED LIENS. 47 some part of the purchase money has been paid upon an executory contract for the purchase of lands, the title remaining in the vendor. In such a case the vendee acquires a lien upon the property to the extent of the money paid, and it is well settled that his interest will be protected against any one but a hona fide purchaser and incum- brancer, who has advanced money or property without notice of the vendee's equity. In suclf cases, the vendee is considered in equity as the owner, and the vendor as his trustee, and the equitable rule is enforced of treating that as done which was agreed to be done.' PEIOEITT OF EQUITABLE MOETGAGES AS AGACNST SUBSEQUENT PUE- CHASEES AND mCUMBEANCEES. § 65. General rule. — ^Vendors' liens for unpaid purchase money are the most common of equitable hens, and the adjudications upon them are the most numerous, but the rules which fix their priority as against judgments and the like will also determine the priority of other equitable liens. They will in general prevail as against every- thing except the claims of purchasers for value and without notice." It must be remarked, however, that an equitable lien cannot prevail to divest rights which existed before the lien was created, and that an equity against one person cannot be enforced against another." § 66. The lien for purchase money exists not only as against the vendee himself, but as against his heirs and other privies in estate, and also as against all subsequent purchasers having notice that the purchase money is unpaid. To the extent of the lien the vendee be- comes a trustee for the vendor ; and his heirs and all other persons claiming under him or them, with such notice, are treated as in the same predicament." As Lord Kedesdale remarked in Hughes v. Kea/rney (1 Schoale & Lefroy, 132), " the heir cannot be permitted to hold what the ancestor unconscientiously obtained ; and is it not a thing unconscientiously obtained when the consideration is not paid ? " Upon the same principle the lien is said to exist as against a widow's claim for dower," or as against a judgment creditor of the ' Lane v. Ludlow, 6 Paige, 316, n. ; 'Cook v. Kraft, 3 Lans. 512 ; s. c. sub Parks V. Jackson, n Wend. 442; ^tna nom. Cook v. Banker, 50 N. Y. 655; Ins. Co. V. Tyler, 16 Wend. 385 ; Chase Dwight v. Newell, 3 N. Y. (3 Comst.) V. Peck, 21 N. Y. 585 ; Westbrook v. 185 ; Spring v. Short, 90 N. Y. 538. Gleason, 14 Hun, 245. * Story's Eq. Jur. §1217; Davis v. ' Christopher v. Christopher, 64 Md. Pearson, 44 Miss. 508. 583 ; Gilman v. Brown, 4 Wheat, 256. ' Warner v. Van Alstyne, 3 Paige, 513. 48 MORTGAGES OP REAL PROPERTY. [§§67-68. vendee/ unless special equities are shown," or an assignee for the benefit of creditors/ or a purchaser from the vendee with notice or who paid no new consideration,* or a holder of a subsequent mechan- ic's lien," or a claim to homestead rights subsequently set apart.' And, in general, a vendor's lien will prevail against any subsequent equal equity unconnected with any legal advantage, or an equitable advantage, giving a superior claim to the legal estate.'' It will be preferred to a mortgage given without new consideration by a wife to secure her husband's debt.' § 67. A conveyance to a bona fide purchaser will destroy a lien upon the land,' but it wiU still attach to any interest in the land re- tained by the vendee. For example, a mortgage taken by him from the purchaser will be subject to the hen, not only in his hands, but also in the hands of his assignee with notice." A mortgage executed to a third person for money advanced to pay part of the purchase money will be superior to the vendor's imphed lien for the balance." The lien of the vendor is subordinate to the rights of a junior mort- gagee of the crop without notice." § 68. As to what shall be sufficient notice, in order to charge a second purchaser, it has been held that a purchaser is bound to take notice of all liens shown to exist by the vendor's title deed." "Where the deed recites full payment of the consideration, the hen cannot be enforced against a purchaser for value without proving actual notice that the whole of the purchase money had not ' In the matter of Howe, i Paige, I2g ; ' Butterfield v. Okie, 36 N. J. Eq. 482 ; Lane v. Ludlow, 6 Id. 316, n. ; Parks v. Bayley y. Greenleaf, 7 Wheat, 47. Jackson, 11 Wend. 442; Rockwell v. 'Butterfield v. Okie, 36 N. J. Eq. Hobby, 2 Sandf. Ch. g ; Robinson v. 482. Williams, 22 N. Y. 386 ; Lamberton v. ' " Fish v. Rowland, i Paige, 20 ; Shir- Van Voorhis, 15 Hun, 336. ley v. Sugar Refinery, 2 Edw. 505 ; 'Spring V. Short, 90 N. Y. 538, 543. Champion v. Brown, 6 Johns. Ch. 402 ; See § 70. Fisk v. Potter, 2 Abb. App. Dec. 138 ; * Shirley v. Sugar Refinery, 2 Edw. 2 Keyes 64 ; Spring v. Short, 90 N. Y. 505 ; Warren v. Fenn, 28 Barb. 333. 538 ; ZoU v. Carnahan, 83 Mo. 35. * Arnold v. Patrick, 6 Paige, 310 ; " Arnold v. Patrick, 6 Paige, 310. Champion v. Brown, 6 Johns. Ch. 398 ; " Neff v. Crumbaker, 4 Ohio St. 85. Hallock V. Smith, 3 Barb. 267; Burlin- "Wooten v. Bellinger, 17 Fla. 289. game v. Robbins, 21 Barb. 327 ; Petry " McRimmon v. Martin, 14 Tex. 318 ; V. Ambrosher, 100 Ind. 510 ; Porter v. Tiernan v. Thurman, 14 B. Mon. 277 ; Woodruff, 36 N. J. Eq. 174. Daughady v. Paine, 6 Minn. 452 ; Ste- ' Payne v. Wilson, 74 N. Y. 348. phens v. Shannon, 43 Ark. 464 ; Stid- * Palmer v. Simpson, 69 Ga. 792. ham v. Matthews, 2g Ark. 650. §§ 69-70.] EQUITABLE MORTGAGES AND IMPLIED LIENS. 49 been paid.' But when a deed shows upon its face that the purchase money is yet unpaid, any purchaser from the grantee is chargeable with notice of the vendor's lien.^ The lien may also be expressly re- served in the deed, and this will be notice.' Where the agent of a railroad company conveyed a parcel of land to the company with knowledge that a mortgage was already in ex- istence to secure the bonds of the corporation which would immedi- ately attach, it was held that the legal lien of the recorded mortgage would take precedence of the lien for unpaid purchase money.* § 69. If the original vendor remains in open possession, this will be notice of his rights, especially if the purchaser shall have heard of an agreement between his vendor and the occupant," and generally any notice will be sufficient which ought to put the pur- chaser, as a reasonable man, upon inquiry." Thus, knowledge on the part of a subsequent purchaser, that some portion of the purchase money is unpaid, without knowing how much or how it is secured, is sufficient to put him upon inquiry and charge him with notice.' § 70. When judgment will have priority. — A lien for unpaid purchase money will be inferior to the lien of a subsequent judg- ment if the judgment be recovered for money advanced by the cred- itor; in reliance upon an apparently unencumbered title,' or if a judg- ment which is an apparent lien is transferred to a honafide purchaser.' In such cases the judgment creditor will stand in equity as a quasi purchaser or mortgagee. A vendor relying upon his lien ought to reduce it to a mortgage, so as to give notice of it to the world. If he does not, he is in some degree accessory to the fraud committed'on the public by an act which exhibits the vendee as the complete owner of an estate on which he claims a secret lien." Eut a merely ordinary creditor who has given credit supposing that the debtor was the owner of property unencumbered and had ability to pay, and who is' mis- ' Gordon v. Manning, 44 Miss. 756. " BriscoU v. Bronaugh, i Tex. 326. ' Cordova V. Hood, 17 Wall, i ; Masich ' Manly v. Slason, 21 Vt. 271 ; Baum V. Shearer, 49 Ala. 226 ; Tydings v. v. Grigsby, 21 Cal. 176. Pitcher, 82 Mo. 379 ; Orrick v. Durham, 'Hulett v. Whipple, 58 Barb. 224; 79 Mo. 179. Spring v. Short, 90 N.Y. 538, 543 ; Cut- ' Davis V. Hamilton, 50 Miss. 213 ; ler v. Ammon, 65 Iowa, 281 ; Allen v. Foster v. Powers, 64 Tex. 247. Loring, 34 Iowa, 499. *Fisk V. Potter, 2 Abb. Ct. of App. ° Prec. in Chan. 478. Dec. 138 ; 2 Keyes, 64. "Per Marshall, C. J., in Bayley v. ' Hopkins v. Garrard, 6 B. Mon. 66 ; Greenleaf, 7 Wheat. 46, 51. Hamilton v. Fowlkes, 16 Ark. 340. 4 50 MORTGAGES OF EEAL PROPERTY. t§§ 71-72. taken in tHs respect, does not acquire the rights of a party who ad- . vances money within the rule above stated. In relying upon the re- sponsibility of the apparent owner of real estate every creditor takes the chance of being mistaken, and unless a fraud has been committed by means of which a lien is created and a creditor is defrauded, such creditor occupies no different position than an ordinary creditor. The question as to the good faith of the parties in the transaction is a proper subject for consideration by the court, and in a case where a mortgage was executed long after the delivery of a deed to the mort- gagor, but pursuant to an agreement made at the date of the deed to secure the purchase money, such mortgage was held entitled to pri- ority over a judgment subsequently docketed.' EBMEDIES PEOPEE FOR AN EQUITABLE MOETGAGEE. § 71. By suit in equity. — The remedy for the equitable mort- gagee is to enforce his lien by a proceeding in the nature of a suit in equity, and he may do this even though he has a remedy at law." He is not obliged to bring an action at law in the first instance,' and the fact that he has obtained a judgment upon the debt will not impair his right to enforce the lien.* The relief will consist in directing a sale of the land,' and the proceeding will resemble closely an action to foreclose a mortgage." § 72. Parties to action. — The action may be brought by the per- son authorized to receive payment of the debt ' or his personal repre- sentatives,' and the vsddow '' and heirs at law of the vendee '° are neces- sary defendants. A person claiming adversely to the title is not a proper defendant." The administrator of the vendee having no in- ' Spring V. Short, go N.Y. 538. notes ; Lord v. Wilcox, 99 Ind. 491 ; ^ Mears v. Kearney, i Abb. N.C. 303. Chandler v. Chandler, 78 Ind. 417 ; i ^ Bradley v. Bosley, i Barb. Ch. 125 ; Sugd. on Vend. 394. Pratt V. Clark, 57 Mo. 189 ; Campbell v. * Dubois v. Hull, 43 Barb. 26. Roach, 45 Ala. 667 ; Owen v. Moore, ' Perry v. Board of Missions of Al- 14 Ala. 640; Richardson v. Baker, 5 J.J. bany, 102 N.Y. 99. Marsh (Ky,.), 323 ; Maryland Pub. Gen. ' Ross v. Shurtleff, 55 Vt. 177. Law C.ode^ i860, p. 99 ; High v. Batte, ' 2 Story Eq. Jur. § 1227. 10 Yerg. (T.enn.) 186. In some States " Dayhuff v. Dayhuff, 81 111. 499. the plaintiff must first exhaust his legal ' McKay v. Green, 3 Johns. Ch. 56. remedies. Ford v. Smith, i MacArthur '° Jackson v. Hill, 39 Tex. 493; McKay (D.C.), 592 ; Pratt v. Van Wyck's E-x'r, v. Green, 3 Johns. Ch. 56. 6 GiUand J.(M.d.)595; Gilman v. Brown, n Wells v. Francis, 7 Col. 396; Dial v. I Mason, 192; Smith's Lead. Cas. in Reynolds,6 Otto,34o; Croghan v. Miner, Eq. (Am. ed.), vol. i., pp. 366, 373, and 53 Cal. 15. §§73-76.] EQUITABLE MOKTGAGES AND IMPLIED LIENS. 51 terest in tlie land need not be joined.' Since, as between the heir and the administrator the debt for purchase money is primarily charge- able upon the personal estate," it is believed that it would be proper, though not necessary to join the executor or administrator as a de- fendant. § 73. Defenses. — The defenses appropriate in an action to fore- close a vendor's lien are those that would be proper in an action to foreclose a purchase-money mortgage. Failure to put the vendee in possession is a breach of the covenants for quiet possession and of warranty of title and constitutes a defense, as also is fraud in conceal- ing prior incumbrances.'' § 74> Retaining possession. — If the equitable mortgagee be in possession of the premises, he may retain possession until his just claims be satisfied, and the proper way for the person owning the legal title to acquire possession is not by an action of ejectment, but by an action to redeem and for an accounting.* § 75. Tender of deed before action to enforce lien for pur- chase money. — It is an open question as to whether a party can by action enforce as an equitable mortgage, a claim for the unpaid purchase money upon an executory contract for the sale of lands where he has an election of remedies, either by ejectment to recover the premises, or an action for the amount due on the contract." A judgment in such an action was sustained by the Court of Appeals when the objection was not made in the court below, and it was held that, conceding the remedy sought to be proper, it was not necessary for the plaintifi to show that he had tendered a deed before com- mencing his suit.' The rule would be otherwise, however, and a tender of a deed should be made before suit is brought if the vendor dies ; at least unless the heir or devisee of the vendor is made a party so as to be bound by the judgment. The reason of this is fouild in the fact that the right to the purchase money will be in the personal representatives of the vendor, while the power to give the convey- ance will be in his heir or devisee.' ' McKay v. Green, 3 Johns. Ch, 56. ^ Payse v. McGuire,, 81 Ky. 608. 2 Wright V. Holbrook, 32 N. Y. 587 ; * Chase v. Peck, 21 N.. Y. 581. Lamport v. Beeman, 34 Barb. 239 ; Liv- ' Freeson v. Bissell,, 63 N. Y. 168. ingston v. Newkirk, 3 Johns. Ch. 312 ; ' Id. Warner v. Van Alstyne, 3 Paige, 513. ' Thomson v. Smith, 6.3 N. Y. 301. CHAPTEE IV. WHO MAT MOETGAGE AND HOW. ■WHAT MAY BE MORTGAGED. § 76. Rules controlling conveyances ap- plicable, 77. Mortgages of equitable interests. 78. Mortgages of undivided interests. 79. Description of the mortgaged real estate. 80. Mortgages of lands held adversely. MORTGAGES EXECUTED UNDER POWERS. 81. Power to sell does not confer power to mortgage. 82. A power to mortgage includes in it, of necessity, a power to con- sent to the usual and customary provisions which are commonly inserted in mortgages. 83. A devise of lands to executors or other trustees, 84. A conveyance of land in trust to mortgage. 85. Where a mortgage is executed by an executor or other trustee for a part of the purchase money. EXECUTION AND DELIVERY. 86. Execution and acknowledgment. 87. Neither a grant nor a mortgage can take effect without a grantee being named in it. 88. Alterations after execution. 89. Delivery, go. Acceptance. 91. Delivery in escrow. THE DEBT SECURED. 92. Debt must be valid. 93. Mortgage lien must be complete at its inception. 94. If the defeasance is in writing, it cannot be enlarged by subsequent parol agreement. I 95. The condition of the mortgage • should give reasonable notice of the amount of the incumbrance. 96. Over-stating debt a badge of fraud. 97. Inaccuracies in description of debt. 98. A note is sufficiently identified as the one secured by a mortgage. 99. Parol evidence to aid description of debt. 100. A mortgage may secure future or contingent obligations, and it is not necessarily a security for a debt, loi. The construction of the condition of a mortgage depends upon the same rules which control other classes of writings. 102. Personal covenant to pay amount secured. 103. The covenant to pay must be spe- cific and distinct. MORTGAGES OF PARTNERSHIP REAL ESTATE. 104. Partnership real estate chargeable with partnership debts. 105. Mortgage by one partner of his in- terest in partnership real estate. 106. Notice that real estate is partner- ship assets. 107. As between the partners. 108. Dower in partnership real estate. 109. Equities of individual partners and their several creditors, no. What real estate is partnership assets. 111. Power of one partner to mortgage firm real estate. 112. Mortgages by limited partnerships. MORTGAGES FROM HUSBAND TO WIFE. 113. Valid in equity if made direct frqm husband to wife. 76.] WHO MAY MORTGAGE AND HOW. 53 MORTGAGES BY CORPORATIONS. ^114. Power to mortgage. 115. Executing mortgage by corpora- tion. 1 16. Mortgages by corporations organ- ized under the Manufacturing Act. 117. Form of assent of stockholders. 118. Who must sign assent. 119. When assent must be made and filed. 120. Act of 1875 as to mortgages prior to that date. 121. Purchase-money mortgage by cor- poration. 122. Who may take advantage of lack of assent of stockholders. 123. What debts may be secured by manufacturing companies. 124. Gaslight companies. 125. Mortgages by clubs and societies. 126. Mortgages of the lands of religious corporations. 127. Supervisory power of the court. 128. When order of court is neces- sary. 129. Where a mortgage is given to se- cure a debt legally contracted. 130. By whom application to be made. 131. Mortgages by charitable societies. MORTGAGES BY NATIONAL BANKS. 132. Provision of statute. 133. Later decisions. MORTGAGES OF THE LANDS OF INFANTS. §134. Ratification of mortgage made during infancy. 135. Disaffirmance of a mortgage made during infancy. 136. Subrogation. 137. A mortgage executed by a guard- ian of an infant to himself. 138. Proceedings under the statute to mortgage lands of infants. 139. Proceedings under this statute must strictly conform with the letter of the law. 140. Costs in proceedings to mortgage lands of infants, lunatics, etc. INSANE PERSONS. 141. A mortgage executed by a person of unsound mind. 142. Mortgages of the lands of lunatics and habitual drunkards. 143. Jurisdiction of the court over lands of insane persons. MORTGAGES OF LANDS OF DECEASED PERSONS TO PAY DEBTS. 144. Jurisdiction of surrogate. 145. The heir or devisee may sell or mortgage. MORTGAGES OF BURIAL AND CEMETERY LOTS. ■ 146. Cancelling exemption of private burial lots. 147. Lots in public cemeteries. 148. Mortgages of burying-grounds by church or religious corporations. WHAT MAT BE MOETGAGED. § 76. Rules controlling conveyances applicable. — A mortgage being a conveyance as a security for the payment of a debt or the performance of an obligation, it follows that no mortgage can be valid in all its parts unless the conveyance is such as to transfer some in- terest or estate, and the debt or obligation is one that the law will recognize. The conveyance is to be judged by the law of the place where the land is located,' but the validity of the debt may depend upon the law of the place where the contract was made or is to be performed.' Since every conveyance made as security for a debt or obligation is 'Hosford V. Nichols, i Paige, 220; ''Cope v. Wheeler, 53 Barb. 350 ; s, C. Cutler V. Davenport, i Pick. 8l. affi'd 41 N. Y. 303. 54 MOEXaAGBS OF EEAL PEOPERTT. [§ 77. a mortgage, it follows that any property which may be conveyed may also be mortgaged, and any present interest, legal or equitable, in real or personal property; which can be the subject of a sale, may be the subject of a mortgage.' For example, the interest of a person in possession of land under a parol contract of sale, may be sold, and it may therefore be mortgaged,^ and a mortgage security may itself be- come the subject of mortgage by being assigned as security for a debt of the mortgagee.' A mortgage of rents issuing out of land under a grant in fee, re- serving rent, creates a lien on incorpolreal hereditaments and is not a mere chose in action or personal property, and is to be treated as a mortgage of real estate and not of chattels.* § 77. Mortgages of equitable interests. — A vested equitable Hfe estate is such an interest in land as will pass by a mortgage of the same ; and where such an estate is conveyed or encumbered by the cestui que trust without the concurrence of the trustee holding the legal title, it will become the duty of the trustee to recognize the rights of the grantee or mortgagee. But the purchaser under such a mortgage will take only such rights as the mortgagor had, to wit, a life estate.'^ Where a testator directed his executor by his wiU to sell his real estate, and, after having set aside a specified sum for his widow, to divide the remainder among his children ; and, before the executor sold the real estate, a son of the testator mortgaged his interest there- in, it was held that the mortgage by the son was to be treated as an equitable assignment of his interest in the proceeds of the sale." A mortgage by a cestui que tomst, assuming to mortgage real estate the title to which is in the trustee, creates no lien on the realty, but the cestui que trust having the right to rents and profits, the mort- gage is a valid lien upon them. The decree on the foreclosure of such a mortgage will direct the trustee to apply the net rents to the payment of the debt, and the trustee is, therefore, a necessary party.' 'Crane v. Turner, 7 Hun, 357, affi'd 'Hoyt v. Martense, 16 N. Y. (2 Smith) 67 N. Y. 437 ; Wilson V. Wilson, 32 Barb. 231. 328. * Van Rensselaer v. Dennison, 35 N. 'Crane v. Turner, 7 Hun, 357, affi'd Y. 393, 401. 67 N. Y. 437 ; Sinclair v. Armitage, 12 * Bryan v. Howland, 98 111. 625 ; Bur- N. J. Eq. 174 ; Jones v. Lapham, 15 kam v. Burk, 96 Ind. 270. Kans. 540; Langlin v. Braley, 25 Kans. 'Horst v. Dague, 34 Ohio St. 371. 147. ' Wilson V. Russ, 17 Fla. 6gi. §§ 78-79.] WHO MAY MORTGAGE AND HOW. 55 § 78. Mortgage of undivided interest. — ^The Code of Proced- Tire ' following the Eevised Statutes,'' provides as to actions for parti- tion as follows : " The plaintiff may, at his election, make a creditor having a lien on an undivided share or interest in the property, a de- fendant in the action. In that case he must set forth the nature of the lien, and specify the share or interest to which it attaches. If partition of the property is made, the lien, whether the creditor is or is not made a party, shall thereafter attach only to the share or inter- est assigned to the party upon whose share or interest the lien at- tached ; which must be first charged with its just proportion of the costs and expenses of the action in preference to the Hen." ' Independent of our statute, a mortgagee of an undivided interest would not be bound by the partition between the co-tenants to which he was not a party or assented.* § 79. Description of the mortgaged real estate. — The same rules will control in construing the description of real estate in a mortgage that would apply if it were an absolute grant. In answer- ing the question as to whether a mortgage is incapable of taking ef- fect and void by reason of vagueness and uncertainty in the descrip- tion of the mortgaged premises, we are to regard the rule that a deed should never be held to be void when the words may be applied to any intent to make it good, and to that end they are to be taken most strongly against the grantor, for he should not be allowed to say that a description framed by himself was so indefinite that, upon an en- forcement of the mortgage, no title to the property could be ac- quired." It is enough, therefore, if, by any particular in the descrip- tion, the thing granted can be sufficiently ascertained to enable the court to say that the words chosen by the parties were intended to relate to it ; and for that purpose we may go beyond the face of the deed if it refers to some subject matter in respect to which we can locate and apply the description.' A general description of all of the land owned by the mortgagor in a certain county is sufficient, and the purchaser at a sale under foreclosure of such a mortgage can re- cover in ejectment.' And a mortgage of " all my property," or " all ■ Code of Civ. Pro. § 1540. " Per Danforth, J., in The People ex ^"2 R. S. 318, §§ 8, 9 ; Laws 1830, ch. rel. Myers v. Storms, 97 N. Y. 364; 320, § 41. Coleman v. Manhattan Beach Imp. Co., 2 Harwood v. Kirby, i Paige, 469. 94 N. Y. 229 ; Thomson v. Building * Jackraan v. Beck, 37 Ark. 125. Ass'n, 103 Ind. 279. ' Jackson v. Gardner, 8 Johns. 394 ; ' Durant v. Kenyon, 32 Hun, 634 ; Tryon v. Sutton, 13 Cal. 490. Starling v. Blair, 4 Bibb. (Ky.) 288. 06 MORTGAGES OF EEAL PEOPEETT. [§ 80. my lands wherever situated," is not void because of the generality of the description.' So a description of land as "all my right, title, interest, and claim in and to the farm of A. B., deceased," is suffi- cient.' And a description as follows has been held sufficient : " Cer- tain land situate in Bridgeport, and described as follows, it being our home farm, containing about 180 acres." ' Omitting to name the state, county, or township in the description of premises in a mortgage will not invalidate the instrument, where other adequate elements of identification exist ; and it is not essen- tial that the property should be so described as to identify it without the aid of extrinsic evidence, but it is always competent to connect the written description with the material subject matter by proof of the surrounding circumstances.* In a suit in equity for foreclosure it is not competent for the mort- gagor to prove by parol evidence that he intended to convey an in- terest in the land different from that specified in the mortgage. ° A mortgage containing a defective description, if not so uncertain that it cannot be rendered certain by averment, may be reformed and foreclosed against a subsequent purchaser for value without actual notice, such description being sufficient to put the purchaser on in- quiry." § 80. Mortgages of lands held adversely. — Every grant of lands is absolutely void, if at the time of the delivery thereof, such lands shall be in the actual possession of a person claiming under a title ad- verse to the grantor. But every person having a just title to lands of which there shall be an adverse possession may execute a mortgage on such lands ; and such mortgage, if duly recorded, shall bind the lands from the time the possession thereof shall be recovered by the mortgagor or his representatives. And every such mortgage shall have preference over any judgment or other instrument, subsequent to the recording thereof ; and if there be two or more such mort- gages, they shall severally have preference according to the time of recording the same respectively.' ' Wilson V. Boyce, 92 U. S. 320 ; ' Cowley v. Shelby, 71 Alab. 122 ; Usina v. Wilder, 58 Ga. 178. Shepard v. Shepard, 36 Mich. 173. ' Bailey v. Alleghany Nat. Bank, 104 * Pence v. Armstrong, 95 Ind. 191 ; Pa. St. 425. Bunker v. Anderson, 32 N. J. Eq. 35. ^ Howe's Ex'rs v. Towner, 55 Vt. 315. But see Thomson v. Wilcox, 7 Lans. ■• Slater v. Breese, 36 Mich. 77 ; Rob- 376. inson V. Brennan, 115 Mass. 582; Stock- ' i R. S. 739, §§ 147, 148. A mort- well V. The State, loi Ind. i. gage of lands held adversely executed §§81-84.] WHO MAY MORTGAGE AND HOW. 57 Where a mortgagee was in possession of the mortgaged property at the time of the execution of the mortgage, but was afterward ousted, it was held that these statutes did not operate to invalidate an assign- ment of the mortgage executed after the time of such ouster.' M©ETGAGES EXECUTED UNDEE POWERS. § 81. Power to sell does not confer power to mortgage. — Al- though a mortgage is a defeasible conveyance, or a conveyance made as security, a power to sell, whether contained in a will or elsewhere, does not, in itself, confer a power to mortgage." But such a power may be derived by implication from other parts of an instrument creating a power to sell. Thus, when A receives a deed with power to sell for the benefit of B, and at the same time executes a mortgage for the purchase money, the mortgage is valid.' § 82. A power to mortgage includes in it, of necessity, a power to consent to the usual and customary provisions which are commonly inserted in mortgages, and among these is a clause authorizing the mortgagee to sell on. default of prompt payment.* On the same principle, a clause imposing on the mortgagor the duty of keeping the buildings on the mortgaged premises insured, would be proper ; as also would be a clause making the term of credit depend on the prompt payment of interest. These latter clauses would also properly be inserted by a person authorized to borrow money under a general authority to bargain with the lender as to the security to be given and the term of credit. § 83. A devise of lands to executors or other trustees to be sold or mortgaged, where the trustees are not also empowered to re- ceive the rents and profits, does not vest any estate in the trustees ; but the trust is vahd as a power, and the lands descend to the heirs, or pass to the devisees of the testator subject to the execution of the power.' § 84. A conveyance of land in trust to mortgage for the bene- by person out of possession is void in 58 Micii. 246 ; Vandeveer v. Conover, Alabama. Vandiveer v. Sticlsney, 75 40 N.J. Eq. 161; Smith v. Hutchinson, Ala. 225. 108 111. 662. ' Tobias v. The Mayor, etc., of N. Y., ' Coutant v. Servoss, 3 Barb. 128. 17 Hun, 534. * Wilson v. Troup, 7 Johns. Ch. 25 ; " Blopmer v. Waldron, 3 Hill, 361, s. c. affi'd 2 Cow. igs ; Fox v. Lipe, 24 overruling dictum in Williams v. Wood- Wend. 164. ard, 2 Wend. 487, 492; Jaffrey v. Hursh, » i R. S. 727, § 56. 58 MORTGAGES OF KEAIi PEOPERTT. [§§85-86. fit of creditors is not one of the trusts authorized by the Kevised Statutes, and therefore no estate will vest under it in the trustees.' § 85. Where a mortgage is executed by an executor or other trustee for a part of the purchase money of the land covered by it, no question of authority to execute the mortgage can be raised with- out also repudiating the conveyance, since the contract must be taken as a whole, and the benefits received under it cannot be retained by a cestui que trust while at the same time the burdens it imposes are denied." "Where a person had title to an undivided moiety of land and power to convey, without any legal or equitable interest in the balance, a mortgage by which he assumed to pledge the whole, but which did not recite the power, was held to afEect only the part to which he had title.' A person taking a mortgage executed under a power of attorney is chargeable with notice of the extent and limitations of the power.* EXECUTION AND DELIVEET. § 86. Execution and acknowledgment. — It is provided by the Kevised Statutes, that every grant in fee or of a freehold estate, shall be subscribed and sealed by the person from whom the estate or in- terest conveyed is intended to pass, or his lawful agent ; if not duly acknowledged, previous to its delivery, according to the provisions of the statutes, its execution and delivery shall be attested by at least one witness; or if not so attested, it shall not take effect as against a purchaser or incumbrancer, until so acknowledged.' This provision is equally applicable to mortgages." In cases where from lack of a seal,' or for want of proper acknowledg- ment,' or from any other technical cause, an effort to execute a mort- gage fails of legal validity, it may nevertheless be enforced as an equitable lien." A mortgage does not become void because the name of the mort- ' Rogers v. De Forest, 7 Paige, 272 ; rison, 31 Barb. 155 ; Wood v. Chapin, Barnum v. Hempstead, 7 Paige, 568 ; 13 N. Y. 509. Darling v. Rogers, 22 Wend. 483 ; Irv- " White v. Leslie, 54 How. 394 ; Porter ing V. De Kay, 9 Paige, 52i,afB'd 5 Den. v. Muller, 53 Cal. 677. 646. ' Erwin v. Siiuey, 8 Ohio St. 509. 'Skelton v. Scott, j8 Hun, 375. 'Maine v. Alexander, 9 Ark. 112; 47 ' Shirras v. Craig, 7 Cranch, 34. Am. Dec. 732. * Kingsland v. Chetwood, 39 Hun, 602. "See ante, Chap. lU., §§4610 51 ; Du ' I R. S. 738, § 137 ; Center v. Mor- Val v. Johnson, 39 Ark. 182. §§ 87-88.] "WHO MAT MORTGAGE AND HOW. 59 gagee is not stated accurately if the person intended can be sufficiently identified. "Where G. and W. were partners under the name of the Chicago Lumber Co., 'and received a mortgage by the latter name, it was held enforceable by them.' § 87. Neither a grant nor a mortgage can take effect without a grantee being named in it.' So an insttument in the form of a mortgage, but containing the name of no mortgagee,- does not become effectual by delivery to one who advances money on the agreement that he shall hold the paper as security for a loan.' But if such an instrument is prepared and delivered by the mortgagor to a person authorized to use it to obtain money for the mortgagor, and to insert th.e name of the mortgagee, this can be done and the mortgage will be valid.* And, in general, any alteration may be made in a mort- gage after its execution, provided it be done with the authority and consent of the mortgagor.' Where a mortgage is executed in blank, an authority to fill in the name of a mortgagee may be implied where the use is made of the instrument which was authorized by the mortgagor." But where a different use is made of the instrument from that authorized by the mortgagor, it will be void and will create no lien, and this rule has peculiar force when the mortgagee knows that his name was filled in after execution and without the knowledge of the mortgagor.' Where a bond and mortgage were executed with the name of the mortgagee blank, and delivered to a third person with authority to raise money for the mortgagor, and he deKvered them for his own benefit, filling in the name of a mortgagee, it was held that they were utterly void as against the mortgagor.' The record of a mortgage from which the name of the mortgagee is omitted does not charge a subsequent purchaser with notice thereof." § 88. Alterations after execution. — If a mortgage is altered by a mere stranger while it is out of the possession of the mortgagee, ' Chicago Lumber Co. v. Ashworth, 26 * Hemmenway v. Mulock, 56 How. 38. Kans. 212. ' Knapp v. Maltby, 13 Wend. 587 ; ' A mortgage for the benefit of a third Woolley v. Constant, 4 Johns. 54 ; Penny party intended to run to a trustee, from v. Corwithe, 18 Johns. 499 ; ex parte which the name of the trustee is omitted, Kerwin, 8 Cow. 118 ; Texvia v. Evans, i is not void for such omission if it con- Anst. 228. tains the means of ascertaining the trus- ' Van Etta v. Evenson, 28 Wis. 33. tee ; Hitesman v. Donnel, 40 Ohio St. ' Ayers v. Probasco, 14 Kans. 175. 2S7. " Cady V. Jennings, 17 Hun, 213. ^ Chauncey v. Arnold, 24 N. Y. 330. " Dicke v. Wright, 49 Iowa, 538. 60 MOETaAG-ES OF KEAL PEOPEETT. [§ 89. and without his knowledge or consent, this does not work a destruc- tion of it. But if an alteration is made without the consent of the party against whom it is sought to be enforced, either by the plaintiff who brings the action upon it, or by some other person while the in- strument is in the possession or custody of the plaintiff, such altera- tion will discharge the original instrument without substituting any new contract or obligation in its place.' This principle has been applied where a mortgage executed by a married woman was altered by her husband by changing the name of the mortgagee without her express consent. The husband de- rived no authority from the marital relation nor from the possession of the instrument to dispose of the mortgage otherwise than accord- ing to its strict terms." So, a mortgage was held void and incapable of reformation which was made by a married woman to secure her husband's debt, and which the husband assumed to correct in respect to an erroneous description.^ Where a mortgage is altered after execution, either by changing the description of the mortgaged property ' or by inserting an addi- tional obligation,' it becomes entirely void. And the doctrine of equitable subrogation wiU not be apphed to relieve the mortgagee." § 89. Delivery. — A valid delivery of a mortgage may be made to any one of two or more persons interested in its enforcement. Thus, where upon a dissolution of a copartnership, one partner assumed the payment of a firm note and executed a mortgage to secure its pay- ment, and as indepanity to the other partner against his liability thereon, a delivery of the mortgage to the firm creditor was held sufficient as a delivery to his copartner.' A mortgage takes effect" from its delivery and not from its date.' The destruction of a mortgage after delivery will not impair its valid- ity as against the mortgagor and others claiming under him with notice. This principle was applied in a case where a purchase-money mortgage, after being recorded, was destroyed by the wife of the mortgagee." ' Jackson v. Malin, 15 Johns. 297 ; * Perean v. Frederick, 17 Neb. 117. Rees V. Overbaugh, 6 Cow. 746 ; Lewis ' Johnson v. Moore, 33 Kans. 90. V. Payn, 8 Id. 71 ; Waring v. Smyth, 2 * Guckenheimer v. Angevine, 81 Barb. Ch. 119 ; Pigott's Case, 11 Coke, N. Y. 394 ; Johnson v. Moore, 33 Kans. 27 ; Shep. Touch. 69. 90. « Smith V. Fellows, 41 N. Y. Super. (9 ' Conwell v. McCowen, 81 111. 285. J. & S.) 36. ' Id. ' Marcy v. Dunlap, 5 Lans. 365; John- ° Sloan v. Holcomb, 29 Mich. 153. son V. Moore, 33 Kans. 90. §§90-91. J WHO MAT MOETGAGE AKD HOW. 61 If a mortgage is not Toluntarily delivered, no title, passes, though the mortgagor may by his carelessness in permitting the mortgagee to gain possession of the mortgage, be estopped from denying the validity of the delivery as against third persons claiming by purchasfe from the mortgagee.' § 90. Acceptance. — There must not only be a mortgagee in order to constitute a valid mortgage, but the mortgage must also be accept- ed by him." Slight evidence of an acceptance will ordinarily be suf- ficient, since the contract is presumptively beneficial, and if it be delivered to a third person for the benefit of the niortgagee, an ac- ceptance will be implied from his conduct in subsequently claiming rights under it.' "Where a mortgage was written and signed by the mortgagor, and was filed by him in the recorder's office for record, and it was subse- quently found in the mortgagee's possession, this was held sufficient prvfna facie evidence of a delivery.* And, in a similar case, but where the mortgagee never had possession of the instrument, delivery was inferred.' So, where the mortgagor who delivered the mortgage to the recording officer was shown to have received the consideration therefor." § 91. Delivery in escrow. — ^Where a mortgage is placed in the custody of a third person to deliver to the mortgagee, on the happen- ing of a specified event, no valid delivery can be made until the con- dition imposed is satisfied, and if delivered before that is done, the mortgage cannot be enforced.' "Where a mortgage was left with a firm of attorneys acting for both parties, to be dehvered only on the consent of both, and there was a conflict of testimony as to whether such consent was ever had, the fact that the mortgagee was found in possession of the mortgage, and the mortgagor in possession of an instrument executed by the mortgagee, to show what the mortgage was given for, was held to be decisive, and evidence offered by the mortgagor to show that the mortgage was given to defraud his cred- itors, was excluded^^ I Fisher v. Beckwith, 30 Wis. 55 ; s. c. ' Elsberry v. Boykin, 65 Ala. 336. II Am. R. 546. * Connard v. Colgan, 55 Iowa, 538. ' Freeman v. Peay, 23 Ark. 439. ' Chipman v. Tucker, 38 Wis. 43 ; s. ' Lady Superior v. McNamara, 3 Barb. c. 20 Am. R. i ; Powell v. Conant, 33 Ch. 375 ; Souverbye v. Arden, i Johns. Mich. 396 ; Gressinger v. Dessenburgh, Ch. 240 ; Church v. Gilman, 15 Wend. 42 Mich. 580 ; Thompson v. White, 48 656 ; Ensworth v. King, 55 Mo. 477. Conn. 509. * Haskill V. Sevier, 25 Ark. 152. " Hess v. Final, 32 Mich. 515. 62 MORTGAGES OF EEAL PEOPERTT. [§§92-93. A mortgage has no efficacy if its delivery depends upon a condition precedent which is to be performed after the death of the mortgagor.^ THE DEBT SECUEED. § 92. Debt must be valid. — The debt being the principal, and the mortgage lien merely the security for it, there can be no YaKd mort- gage independent of a valid debt. So, a deed in the nature of a mortgage to secure a bargain, which is contrary to the policy of the law, will be void." Where the rights of creditors do not interfere, a mortgage may be valid as against all persons but the mortgagor, though given vrithout consideration. So, where a father made a voluntary provision for his child by a mortgage, this was held as valid as against his heirs, as a transfer for a valuable consideration.' If a mortgage is made to secure debts arising out of several trans- actions which can be separated, and some are legal while others are not, the mortgage will be valid for that part of the debt which is free from illegality." This was so held where a part of the debt sought to be secured was for a sale of Hquor in violation of a statute.' A mortgage given for a vaHd debt is good although the purpose of the mortgagor in executing it was to defraud his other creditors." § 93. Mortgage lien must be complete at its inception. — A mortgage made to secure one debt cannot, by parol, afterward be made to stand for a new or different debt, even between the parties ; and the cases which recognize the admissibility of parol testimony to establish the actual contract made between the parties at the time of the grant, must be distinguished from those in which attempts have been made to enlarge the scope of the mortgage after its inception.' The grant must be in writing under seal, and must comply with all of the formalities prescribed by law for absolute conveyances . of land ; and while the defeasance -may rest in parol and may provide ' Taft V. Taft, (Mich.), 26 Northwest- * Feldman v. Gamble, 26 N. J. Eq. ern Rep. 426 ; 33 Alb. L. J. 264, in which 494. case there is an elaborate examination of ' Shaw v. Carpenter, 54 Vt. 155 ; s. c. the authorities on conditional delivery 41 Am. R. 837. and delivery in escrow ; Latham v. * Billings v. Billings, 31 Hun, 65. Udell, 38 Mich. 238 ; Wallace v. Harris, 'Taylor v. Post, 30 Hun, 446 ; Hughes 32 Id. 380. V. Johnson, 38 Ark. 285 ; Stoddard v. Hart, 2 Gilbert v. Holmes, 64 111. 548. 23 N. Y. 556 ; Hubbell v. Blakeslee, 8 ^Bucklin V. Bucklin, r Abb. App. Cas. Hun, 603; Bank of Utica v. Finch, 3 242. Barb. Ch. 293. §§94-95.] WHO MAT MORTGAGE AND HOW. 63 for future advances or for almost any kind of present or future obli- gation, the agreement made at the time of the grant must control all of the subsequent dealings of the parties with the security.' § 94. If the defeasance is in writing, it cannot be enlarged by subsequent parol agreement.^ So a mortgage originally given to secure an indebtedness for one firm cannot, by parol, be extended to secure an obligation to a new firm.' An agreement indorsed after its maturity upon a note secured by mortgage, by which the rate of interest is increased, is a personal covenant merely, and is not secured by the lien, even against the mortgagor,* though an agreement in writing to that effect for a valu- able consideration has been enforced where no rights of third persons have intervened.' An agreement between the mortgagor and mortgagee, tending to increase the mortgage, will always be void against a junior incum- brance." As between the parties, and to prevent fraud, the courts have sometimes refused to give rehef to a mortgagor except on condition of his doing equity, even where this practically resulted in enforcing a parol agreement, by which the lien of a mortgage was extended after its inception.' § 95. The condition of the mortgage should give reasonable notice of the amount of the incumbrance, in order that junior in- cumbrancers and purchasers may ascertain from the record the extent of the lien claimed under it. It has even been held in some cases in Connecticut that reasonable definiteness of description is essential where the amount of the debt is liquidated or capable of ascertain- ment at the time of the execution of the mortgage." But no such ' See Chap. VI. as to effect of agree- * Smith v. Graham, 34 Mich. 302. ment for further advances made after * Gardner v. Emerson, 40 111. 296 ; execution of mortgage ; Chap. VII. as to Coombs v. Jordan, 3 Bland Ch. (Md.) extension of time by renewal of notes 284 ; 22 Am. Dec. 236 ; Jones v. Brogan, secured by mortgage; Chap. XI. as to 29 N. J. Eq. 139; Perrin v. Kellogg, 38 reissue of paid mortgage. Mich. 720 ; Mitchell v. Coombs, 96 Penn. 'Hughes V. Johnson, 38 Ark. 285; St. 430 ; Schiffer v. Feagin, 51 Ala. 335. Morris v. Tillson, 81 111. 607 ; Savage v. ' Stone v. Lane, 92 Mass. (10 Allen) Scott, 45 Iowa, 130; Bank of Utica v. 74. Finch, 3 Barb. Ch. 293 ; 49 Am. Dec. * Pettibone v. Griswold, 4 Conn. 158 ; 175. s. c. 10 Am. Dec. 106 ; Stoughton v. ^ Taylor v. Post, 30 Hun, 446. Pasco, 5 Conn. 442 ; s. c. 13 Am. Dec. * Spear v. Hadden, 31 Mich. 265 ; Ha- 72 ; Booth v. Barnum, 9 Conn. 286 ; s. ven V. Jones, 45 Mich. 253. c. 23 Am. Dec. 389 ; Hart. v. Chalker, 64 MOETGAOES OF HEAL PEOPEETT. [§§ 96-97. doctrine has ever been approved in this State, and a mortgage is valid if it contains within itself a description of the debt or refers to some other paper or to some other facts outside of any paper from which the extent of the claims of the mortgagee can be ascertained. A truthful statement of the debt is desirable, since any attempt at con- cealment or misstatement will be material if questions of fraud are raised.' § 96. Over-stating debt a badge of fraud. — A mortgage given to secure a debt actually due, but drawn for a larger sum, with intent on the part of both parties to the instrument to defraud or delay creditors, may be adjudged void at the instance of creditors." In the absence of explanatory evidence, over-stating the debt is a badge of fraud and may, in itself, be sufficient to establish a fraudulent in- tent so as to avoid the mortgage as to existing creditors." The burden of establishing the honesty of the transaction is thereby cast upon the person claiming under, the mortgage,* but it is not conclusively fraud- ulent if it appears that it was not made to defraud other creditors.' Knowledge by the mortgagee that his debtor is trying to magnify his liabilities and wants him to take a mortgage for a sum so large that, if his other creditors should regard it as an honest security, his lands would be put effectually beyond their reach, makes it his duty to inquire as to his debtor's object, and failure to do so will vitiate such a mortgage m toto, though partly founded on a good considera- tion." § 97. Inaccuracies in description of debt. — The liabiKty intend- ed to be secured should be sufficiently described in the mortgage,' but 14 Conn. 77 ; Merrill v. Smith, 18 Conn. v. Scott, 55 Iowa, 114 ; Butts v. Pea- 257 ; 46 Am. Dec. 315 ; Bramhall v. cock, 23 Wis. 359 ; Rice v. Morner, 64 Flood, 41 Conn. 68 ; Stearns v. Porter, Wis. 599 ; Lynde v. McGregor, 95 Mass. 46 Conn. 313 ; Bullock v. Battenhousen, 172. 108 111. 28. * Carson v. Byers, 67 Iowa. 606 ; Lom- ' Per Marshall, Ch. J., in Shirras v. bard v. Dpws, 66 Iowa, 243. Craig, 7 Cranch, 34 ; Truscott v. King, ' Bush v. Bush, 33 Kans. 556 ; Whit- 6 N. Y. (2 Seld.) 147 ; McKinster v. tredge v. Edmunds, 63 N. H. 248 ; Wood Babcock, 26 N. Y. 378 ; Bumpas v. Dat- v. Scott, 55 Iowa, 114 ; Berry v. O'Con- son, 7 Humph. (Tenn.) 310 ; 46 Am. Dec. nor, 31 Alb. L. J. 357 ; Noyes v. Patrick, 81 ; Goff V. Rogers, 71 Ind. 459. 58 N. H. 618 ; Berry v. O'Connor, 33 ° Heintze v. Bentley, 34 N. J. Eq. Minn. 29 ; Miner v. Sheehan, 30 Minn. 562. 419 ; TuUey v. Harloe, 35 Cal. 302. ' Taylor v. Wendling, 66 Iowa, 562 ; ' Holt v. Creamer, 34 N. J. Eq. 181 ; Tripp V. Vincent, 8 Paige, 176 ; Daven- Russell v. Winne, 37 N. Y. 596. port V. Cummings, 15 Iowa, 219 ; Wood ' Thomas v. Olney, 16 111. 53. §§98.] WHO MAY MORTGAGE AKD HOW. 65 where there was an accidental omission to insert in a mortgage the amount of the bond it was intended to secure, it was Iield that this did not invalidate the mortgage or postpone its lien to that of a sub- sequent mortgage.' Even an intentional omission to set out in the mortgage the amount of a note which it is intended to secure, will not subordinate it to creditors having no actual notice of the mort- gage." A mortgage has been held valid when made to secure a spec- ified debt amounting to a certain sum " or thereabout," the debt being a little larger than the amount named." Clerical inaccuracies in the description of the debt will not afEect the lien of the mortgage as against the mortgagor or his subsequent judgment creditors, provided the debt is clearly identified as the one intended to be secured.' A valid mortgage may be made for the payment of money without particularly describing the writing which forms the evidence of the debt, and even without giving any independent evidence thereof.^ If an attempt is made to describe the evidence of debt in the recitals in the mortgage, it is not necessary that all of the particulars of the paper should be set forth, and it is enough if the paper produced by the mortgagee appears with reasonable certainty to be the one in- tended.° Where a mortgage was executed by several persons on property owned jointly to secure the mortgagee on a recognizance and contained also the following clause : " and pay him all sums of money now due or that may be due from us hereafter," and each of the mortgagors owned separate debts to the mortgagee, but did not know, through their own neglect, that the special clause was in the mortgage, it was held that their debts were secured.' § 98. A note is sufficiently identified as the one secured by a mortgage when it is identical with the one described in the mort- gage in dates, amount, and in the names of the maker and payee, al- though in the mortgage the payee is described " as " trustee, while in the note the word " as " is omitted.' ' Hall's Ex'rs v. Lambert's Ex'rs, 3 215; 34 Alb. L. J. 210; Curtis v. Flinn, Halst. (N. J.) 651; s. c. 51 Am. Dec. 46 Ark. 70. 272. ' Varney v. Hawes, 68 Me. 442 ; Fetes ' Wilson V. Vaugn, 61 Miss. 472. v. O'Loughlin, 62 Iowa, 532. 3 Booth V. Barnum, 9 Conn. 286. « Webb v. Stone, 24 N. H. 282. * Tousley v. Tousley, 5 Ohio St. 78 ; ' Bishop v. Allen, 55 Vt. 423. Winchell v. Coney, 6 N. E. Rep. (Conn.) * Cowley v. Shelby, 71 Ala. 122. 5 66 MORTGAGES OF REAL PEOPEETT. [§ 99. A mortgage which does not distinctly identify the debt or provide a time of payment, is held to be due as soon as given.' § 99. Parol evidence to aid description of debt. — "Where the condition of a mortgage described two notes for $150 each and one of the notes intended to be secured was, in fact, for $150, but the other was for $200, but in all other respects they corresponded with those described in the mortgage, it was held that it might be shown by parol that they were the notes intended to be secured, and that the mortgage was not necessarily void.' A note payable " one after date " may be identified as one payable in one " year " after date, to correspond with the one de- scribed in the mortgage.' A chattel mortgage executed to an indorser of a note to secure payment of that note, has been shown by parol to have been intended as security for the mortgagee and another indorser as well, and the mortgagee was said to hold as trustee for himself and the other in- dorser." Where a mortgage is given to secure a bond for a certain time, it is competent to prove, by parol, that it was really given to secure an open account, the balance of which was continually varying, or for future advances,' or to indemnify the mortgagee for becoming surety on a note,' and it has repeatedly been held that parol evidence to show the purpose and intent for which a security was executed is not regarded as contradicting or varying its terras or efEect.' It is even permissible to show, by parol, that the mortgagee' is a trustee for other persons whose debts the mortgage was intended to secure.' ' It is competent for the mortgagor to show in defense to a mort- ' Eiton V. Truesdail, 40 Mich, i ; ' Esterly v. Purdy, 50 How. 350. Sheehy v. Mandeville, 7 Cranch, 208 ; ^ Kimball v. Myers, 21 Mich. 276 ; s. Hummel v. Brown, 24 Penn. St. 313 ; c. 4 Am. R. 487. Selleck v. French, i Conn. 32 ; Roberts ' Truscott v. King, 6 N. Y. (2 Seld.) V. Cocke, 28 Grattan, 207; Heath v. 147, 161 ; Chester v. The Bank of Kings- Page, 63 Penn. St. 108 ; Sirett v. Hooper, ton, 16 N. Y. 336, 343 ; Agawam Bank 62 Me. S4 ; Dodge v. Perkins, 9 Pick. v. Strever, 18 N. Y. 502 ; Hutchins v. 369 ; Brewster v. Wakefield, 22 How. Hebbard, 34 N. Y. 24 ; Bainbridge v. (U. S.) 118, 127. Richmond, 17 Hun, 391, affi'd 78 N. Y. 2 Cushman v. Luther, 53 N. H. 562. 6i8. "Stowev. Merrill, 77 Me. 550; Nichols 'Artcher v. McDufBe, 5 Barb. 147; V. Frothingham, 45 Me. 220, and cases Hall v. Crouse, 13 Hun, 557, 561 ; Hub- cited, bell V. Blakeslee, 71 N. Y. 63, 69 ; Bain- * Bainbridge v. Richmond, 17 Hun, bridge v. Richmond, 17 Hun, 391, affi'd 391 ; s. c. affi'd 78 N. Y. 618. 78 N. Y. 618. §§100-101. J WHO MAT MOETGAGE AND HOW. 67 gage given, on its face, to secure tlie payment of a certain sum of money, that it was really given to indemnify sureties on a recogni- zance of bail, and that the sureties had been discharged without being damnified ; in such a case a honafide assignee takes only for the pur- poses of the indemnity.' Parol evidence is not admissible to contradict the written condition ot a mortgage, as, for instance, to show that it was intended that the lien should cease on payment of a part of the debt." § 100. A mortgage may secure future or contingent obliga- tions and it is not necessarily a security for a debt. Thus, it may secure an accommodation indorser for liability incurred by the indorsement.' Or it may be conditional on the removal of certaia specified defects of title, and will then secure those only, and will not be enforceable by showing other defects not set forth in the condition.* Or it may be given to indemnify the mortgagee from an obligation to support a third person.' So, where a mortgage made to secure certain payments as well as the performance of a certain specified agreement, further provided that it should also become security for the performance of a certain other agreement if the mortgagor elected to perform the second agreement, it was held that, after election and notice by the mortgagor, such mortgage became security for the per- formance of the second agreement as efEectually as if the same had been set forth in the mortgage." Mortgages to one person in trust for the benefit of others have re- peatedly been used and upheld by the courts,' and a mortgage to sev- eral persons jointly may be made to cover separate debts." Where an indorsement is given on the faith of a mortgage, the liability thus assumed is a sufficient consideration, and the mortgagee will be protected under the recording acts against subsequent pur- chasers." § 101. The construction of the condition of a mortgage de- pends upon the same rules which control other classes of writ- ings. Where the condition of a mortgage, dated June 28, 1871, was > Colman v. Post, lo Mich. 422. ing Co., 65 N. Y. 43, 53 ; De Ruyter v. ' Taylor v. Thomas, 61 Geo. 472. St. Peter's Church, 3 N. Y. (3 Comst.) ' Gibson v. Wilson, 38 Ark. 207. 238 ; King v. Merchant's Exch. Co., 5 ♦Goodenow v. Curtis, 33 Mich. 505. N. Y. (iSeld.) 547 ; Bucklinv. Bucklin, i 'Whitton V. Whitton, 38 N. H. 127. Abb. App. Dec. 242. • Furbish v. Sears, 2 Clifford, 454. ° Adams v. Niemann, 46 Mich. 135. ' Carpenter v. Black Hawk Gold Min- ' Uhler v. Sample, 20 N. J. Eq. 288. 68 MORTGAGES OF EEAL PEOPEETt. [§ 101. that the principal should be paid on April 1, 18T3, " with interest annually on the first day of April in each year," and an action was commenced to foreclose the mortgage upon the ground of default in the payment of interest alleged to have become due April 1, 18T2, it was held that by the stipulation as to interest, reference was had to, and it was intended to provide for a payment of interest prior to, the time when the principal became due, and that the plaintiff's claito was well founded.' Where a bond dated in October, 1827, was conditioned for the payment of a sum of money in three instalments, to wit, on the 1st May, 1830, 1st May, 1832, and 1st May, 1834, and then followed these words, " or of the interest thereof or any part thereof, to be paid yearly and every year after the same commences, then, etc.," it was held that the interest must be deemed to have commenced on the first day of May, 1828 ; that is, that interest from the date of the bond for one year should be paid on May 1, 1828, and annual pay- ments of interest should thereafter be made on that day, thus making the annual interest payable partly in advance or before the expiration of the year for which it was payable.^ Where the condition of a bond dated Dec. 14, 1833, was that the obligor should pay to the obligee the " sura of $3,200, to be paid in manner following, viz. : $1,000 on the first of April next, the re- mainder in four annual payments thereafter of $550 each, interest annually," it was held that the obligee was not entitled to any interest during the interval between the date of the bond and April 1, 1834, when the first payment was to be made. This construction was aided by the fact that the words " with interest on the whole " had been stricken out of the bond before execution." Where a bond and mortgage dated March 18, 1831, were con- ditioned to pay " the just and full sura of $1,256.50, with interest after the first day of April next, in fourteen equal annual payraents on the first day of April of each and every year after the first day of next April," it was held that the interest on each instalment became due when the instalment was payable and not before. Interest is not payable before the principal on which it accrues, unless there be a special agreement to that effect.* 1 Cook V. Clark, 68 N. Y. 178, affi'g 3 ' Fellows v. Harrington, 3 Barb. Ch. Hun, 247 ; 5 T. & C. 493. 652. ■^ Fake v. Eddy, 15 Wend. 76 ; Robbins * French v. Kennedy, 7 Barb. 452. «.. Cheek, 32 Ind. 330. § 102.] WHO MAT MOETGAGE AISTD HOW. 69 § 102. Personal covenant to pay amount secured. — It is pro- vided by statute that " no mortgage shall be construed as implying a covenant for the payment of the sum intended to be secured ; and where there shall be no express covenant for such payment contained in the mortgage, and no bond or other separate instrument to secure such payment shall have been given, the remedies of the mortgagee shall be confined to the lands mentioned in the mortgage." ' And no covenant can now be implied in any conveyance of real estate, whether such conveyance contains special covenants or not.^ Where a mort- gage, therefore, is taken for the security of a pre-existing indebted- ness, without any intention of discharging the original debtor from personal responsibility upon his former security, his liability upon that security will remain, notwithstanding the debt is further secured by such mortgage.^ But if the original indebtedness is intended to be discharged and a mere mortgage is taken to secure the amount, without any express covenant to pay the same, and no bond or sep- arate instrument is given to secm-e such payment, the mortgagee has no remedy upon any implied agreement of the mortgagor to pay the amount secured by the mortgage, but must resort to the land alone, or the proceeds thereof, for payment. The result will be the same where an absolute deed is taken as a mere security for the repayment of the consideration of such deed instead of an ordinary mortgage ; and where there is no covenant or other instrument rendering any one personally liable for the debt intended to be secured." Where a mortgage without an accompanying bond is given upon an advance of money, in the absence of evidence to the contrary, the pre- sumption is that the advance was made upon the terms and conditions contained in the mortgage ; and if the mortgage contains no cove- nant or promise on the part of the mortgagor to pay the money ad- vanced, the mortgagee must look to the mortgaged premises alone for reimbursement. This is so even though the mortgage contains an incorrect recital to the effect that a bond of the mortgagor had been given." Where an agreement to sell land for a certain price is consum- mated by a payment of part of the amoimt in cash and the delivery ' I R. S 738, § 139; Severance v. 'Gaylord v. Knapp, 15 Hun, 87 ; Hone Griffith, 2 Lans. 38 ; Weed v. Covill, 14 v. Fisher, 2 Barb. Ch. 559. Barb. 242 ; Salisbury v. Philips, 10 * Hone v. Fisher, 2 Barb. Ch. 559, Johns. 57 ; Turk v. Ridge, 41 N. Y. 201. 569. ' I R. S. 738, § 140. ' Spencer v. Spencer, 95 N. Y. 353. 70 MORTGAGES OF REAL PROPERTY. [§§103-104. of a purchase-money mortgage for the balance, the mortgagor is not personally liable for the amount secured in the absence of a bond or express covenant.' § 103. The covenant to pay must be specific and distinct.' Where a mortgage executed by a married woman contained the fol- lowing words : " This grant is intended as security for the payment of the sum of $1,200, money loaned and advanced to said party of the first part for the benefit and on the credit of her ■ separate estate and property, and said party of the first part hereby charges her separate estate with the payment of said sum," it was held on demurrer that this was not a covenant to bind the mortgagor personally.' If a debt existed, the language might have been used in evidence as an ad- mission,* but such debt would have to be pleaded.' If there be a personal covenant to pay the amount secured by the mortgage it may stand quite independent of any collateral obligation. Where a mortgage was given by one of the joint makers of a note which contained a covenant to pay the " sum of money " mentioned in the note, and the other joint maker was thereafter on payment of a small sura entirely released, it was held that the covenant contained in the mortgage was not discharged." MOETGA&ES eF PAETNEESHIP EEAL ESTATE. § 104. Partnership real estate chargeable with partnership debts.' — ^Where the title to land is taken in two or more persons the legal effect of the conveyance is to constitute them tenants in com- mon of the premises therein described, and each can deal with his in- terest as such tenant in common by deed or mortgage so as to trans- fer all the title he has and make it subject to a valid lien. But where tenants in common prima facie are also copartners in business, and partnership funds have been expended in the purchase of the real property for the use of the copartnership, -and the same has been ■Vroomanv. Dunlap, 30 Barb. 203. son, 3 N.Y. (3 Comst.) 264; Couger v. "^ Shafer v. Bear River, etc , Mining Lancaster, 6 Yerg. (Tenn.) 477 ; Roney Co., 4 Cal. 294. V. Moss, 74 Ala. 390. 3 Mack V. Austin, 95 N. Y. 513, affi'g ' Mack v. Arthur, 95 N.Y., 513; Weed 29 Hun, 534. V. Covin, 14 Barb. 242. * Suffield V. Baskervil, 2 Mod. 36 ; " Walls v. Baird, 91 Ind. 429. Chase v. Ewing, 51 Barb. 597; Coleman ' See elaborate article on " Equity of V. Van Rensselaer, 44 How. 368 ; Elder Partnership Creditors," 34 Alb. L. J. V. Rouse, 15 Wend. 218; Culver v. Sis- 344, 364. § 105.] WHO MAT MORTaAGE AKD HOW. 71 used for partnership purposes by agreement to that end, it is to be treated in equity as partnership assets.' It is made liable for debts due to the creditors of the copartnership.'' And where moneys of the firm have been expended upon such real estate in the improvement of it, the same rule follows as to its enhanced value. Other rules as to the disposition of partnership as- sets also apply in such case. The creditors of the partnership are entitled to priority of payment thereout, and the creditors of an indi- vidual member of the copartnership are to be preferred to those of another member, and one member to another, or to his creditors for any amount paid in by the one in excess of the share he was bound to contribute, or in excess of his proportion of the debts of the concern." § 105. Mortgage by one partner of his interest in partner- ship real estate. — Where, in such a case, one of the apparent tenants in common mortgages his interest in the real estate for a present con- sideration to a hona fide mortgagee who has no notice that the land is partnership assets, such mortgage will be a valid lien and will take precedence of the claims of firm creditors. But if the mortgage is given for an antecedent debt, and the mortgagee parts with no value upon the faith of the security, or if he takes it with knowledge of the factfe, in such a case the mortgage will be subject to all equities superior to his own of any person or persons interested in the land." It is now well settled that a purchaser from one partner of his in- terest in the partnership, acquires no title to any share of the part- nership effects, but only his share of the surplus after an accounting, and the adjustment of the partnership affairs.^ But where the legal title to partnership lands is vested in one partner, his iona fide grantee or mortgagee for a present valuable consideration, takes his title free from the equities of the other partners or of copartnership creditors. But if he have notice that the land is partnership assets,. he takes subject to their equities, since a partner cannot sell or mort- gage his interest in partnership property so as to deprive his copart- ners or the copartnership creditors of their lien thereon for partner- ship habihties." So a mortgage on real estate of a firm, executed by 1 Leary v. Boggs, i N. Y. S. Reptr. ' Hiscock v. Phelps, 49 N. Y. 97. (G. T.) 571 ; Collumb v. Reid, 24 N. Y. ■* Hiscock v. Phelps, 49 N. Y. 97 ; 505 : Hiscock V. Phelps, 49 N. Y. 97 ; Mingins v. Condit, 23 N. J. Eq. 313. Fairchild v. Fairchild, 64 N. Y. 471. ' Menagh v. Whitwell, 52 N. Y. 147 ; ' Hiscock V. Phelps, 49 N. Y. 97, 103; Beecher v. Stevens, 43 Conn. 587. Buchan v. Sumner, 2 Barb. Ch. 165. ,^ Buchan v. Sumner, 2 Barb. Ch. 167 ; 72 MOETGAGES OF EEAL PEOPERTY. [§ 106. the surviving partner to secure the payment of an individual liability, creates a lien only to the extent of his interest.' Where one member of a firm held the legal title to real estate which, in equity, was the property of the firm, and mortgaged it to secure his own precedent debt, it was held that the lien of the mortgage was not superior to the prior liabilities of the firm.^ And there would be no distinction between partnership debts incurred before or after the mortgage.' Where the legal title to land held for partnership uses was in one member of the firm and another member executed a mortgage of all of his interest in said real estate, it was held that this created a lien only upon such balance as might be found due to the mortgagor upon the winding up of the concern ; that the recording of it did not give any notice to a purchaser for value of the property from the legal owner, such transfer being made in the course of liquidation of the co- partnership affairs, and that even if such purcha,ser had received ac- tual notice of it, his title would not have been affected or impaired thereby." The fact that a partner's interest in partnership real estate is mortgaged for the purchase money of his share in the partnership is immaterial ; he can only mortgage what he has, which is a share subject to partnership debts.° A mortgage by one partner of his in- terest- in copartnership property is valid so far as to create a lien on what may be found to be his share after satisfying firm creditors and the claims of his copartners." And such a mortgage of partnership real estate is relieved of all partnership equities as soon as the busi- ness of the partnership is closed and the firm debts are paid.' § 106. Notice that real estate is partnership assets. — Knowl- edge that the real estate is used by the copartnership in carrying, on its business will put a person dealing with one partner for a mortgage Tarbell v. West, 86 N. Y. 280 ; Hoxie Kistner v. Sindlinger, 33 Ind. 114 ; Jones V. Carr, i Sumn. 183 ; Hiscock v. Phelps, v. Parsons, 25 Cal. 102 ; Fargo v. Ames, 49 N. Y. 97 ; Cavander v. Bulteel, L. R. 45 Iowa, 491 ; Warren v. Taylor, 60 9 Ch. App. Cas. 79 ; Norwalk Bank v. Ala. 218. Sawyer, 38 Ohio St. 339 ; 27 Alb. L. J. ' Lang's heirs v. Waring, 17 Ala. 145. 185 ; Arnold v. Stevenson, 2 Nev. 234 ; ^ Lewis v. Anderson, 20 Ohio St. 281. Whitmore v. Shiverick, 3 Nev. 288 ; ' Lovejoy v. Bowers, 11 N. H. 404. Burbank v. Wiley, 79 N. Car. 501 ; * Tarbell v. West, 86 N. Y. 280 ; s. c, Henry v. Anderson, 77 Ind. 361 ; Love- sud nam. Tarbell v. Bradley, 7 Abb. N. joy V. Bowers, 11 N. H. 404; Sumner Cas. 273. V. Anderson, 8 Ohio, 328 ; 32 Am. Dec. ' Chase v. Steel, 9 Cal. 64. 722 ; Martin v. Trumbull, Wright, 386 ; * Thompson v. Spittle, 102 Mass. 207. Rammelsberg v. Mitchell, 29 Ohio St. ' Hewitt v. Rankin, 41 Iowa, 35 ; 52 ; Ludlow V. Cooper, 4 Ohio St. i ; Shearer v. Shearer, 98 Mass. 107. §§107-108.] WHO MAY MORTGAGE AND HOW. 73 lien upon inquiry to ascertain the nature of the equitable rights of the other partners even if it will not operate as notice of such equita- ble rights.' In England it would amount to notice.'' § 107. As between the partners, each has a lien on the partner- ship assets for advances made to the concern or to the otlier partners in the course of carrying on the firm affairs, and the rights of the partner making the advances as against the common property are not dependent upon or increased by a mortgage executed to him thereon ; his lien is, in any event, superior to charges created by his copartners for their individual debts, and is inferior to the claims of partnership creditors.^ The application of partnership property to the payment of partner- ship debts is the equity of the partners and not of the creditors, and therefore the partnership, while it is solvent, may sell or mortgage its property to one of the partners ; and if the sale or mortgage is made or given in good faith and for valuable considerations, it will be valid against the claims of the partnership creditors. And although if such mortgage be retained by the partner until the bankruptcy of the firm, he will not be allowed to enforce it against the company assets to the exclusion of the partnership creditors, because he is himself liable to these creditors, yet the assignee of such mortgage for value during the solvency of the firm, will hold it unafiiected by the claims of the partnership creditors.* A mortgage given by a member of a firm to the firm is valid. It is in no sense a mortgage to himself .° § 108. Dower in partnership real estate. — The rule of equity which treats partnership real estate as partnership assets, exempts it from the usual incidents of dower, and deprives the heir of a de- ceased owner of the fee from his inheritance until the partnership debts are fully paid. The land is said to be converted into personal property for the purpose of adjusting the partnership affairs. So, where certain real estate was purchased by partners with partnership means for partnership purposes, and was mortgaged to secure the ' Mechanics' Bank v. Godwin, 5 N. ' Irwin v. Bidwell, 72 Penn. St. 244 ; J. Eq. (i Halst. 334). Warren v. Taylor, 60 Ala. 218. ^Cavanderv. Bulteel, gL. R. Ch. App. * Waterman v. Hunt, 2 R. 1. 298; Cas. 79. And see McKinzie v. Perrill, 15 Smith v. Lusher, 5 Cow. 688; Burney v. Ohio St. 162 ; 2 Lead. Cas. in Eq. (4th Lyman, i Story, 423. Am. ed.) 180 ; Norwalk Bankv. Sawyer, ^ Galway v. FuUerton, 17 N. J. Eq. 38 Ohio St. 339 ; 27 Alb. L. J. 185. 390. 74 MORTGAGES OF EEAL PEOPEBTY. [§ 109. payment of a partnership debt, and was afterward sold on a fore- closure of the mortgage and purchased by the partnership creditors, leaving a balance of the partnership debt unpaid, the firm and its members being insolvent, it was held in a partition suit by the widow of one of the partners, that she had .no interest in the property, though she did not sign the mortgage and was not a party to the fore- closure." But the rule is not extended beyond the necessity of protecting firm creditors for their debts, and the individual partners for their shares in the firm assets. So far as the individual owners are con- cerned, after the property is reheved from the demands of firm cred- itors and of their copartners, the land is to be treated as real estate in which their wives have dower, and it descends to their heirs and does not pass to their personal representatives.'' § 109. Equities of individual partners ariti their several cred- itors. — The equitable rule which requires partnership assets to be first applied to liquidate partnership obligations, also requires that the in- dividual property of the partners should not be taken for firm debts until the joint estate is first exhausted. And where a member of a partnership mortgaged his separate property to secure a partnership debt and became insolvent, his individual creditors were held to be entitled to have the partnership property first applied to discharge the debt so secured.^ So, also, where a partner mortgages his private property to secure a partnership debt which is also secured by a mortgage on partnership property, he stands as surety for the partnership, and is entitled to be subrogated to the rights of the mortgagee ; and the creditors of such surety are entitled to the same right of subrogation as the surety him- self, the partnership property being the primary fund, the private property collateral.* But where one of two partners executes a mortgage upon his sep- arate property to secure a debt of the firm, an action to foreclose the mortgage may, after the death of the mortgagor, be maintained with- out any showing by the plaintiff that the partnership is insolvent or that he has pursued his remedy upon the debt against the surviving partner.' ' Huston V. Neil, 41 Ind. 504. ' Averill v. Loucks, 6 Barb. 470. ^ Hewitt V. Rankin, 41 Iowa, 35 ; * Bank of Royalton v. Gushing, 53 Vt. Shearer v. Shearer, 98 Mass. 107 ; Fos- 321. ter's Appeal, 74 Pa. St. 391 ; Wilcox v. ' Saving and Loan Society v. Gibb, 21 Wilcox, 13 Allen (Mass.) 252. Cal. 595. §§110-111.] WHO MAT MOETGAGE AND HOW. 75 A mortgage made by an individual to secure " any and all indebt- edness" from the mortgagor to the mortgagee, does not secure a debt owing by the firm of which the mortgagor is a member. Pari> nership debts are joint and not joint and several.' § 110. What real estate is partnership assets. — In order that land the title of which is owned in common by members of a partner- ship shall be treated as partnership assets, there should be proof either of an agreement to that effect between them, or it should be shown that the land was purchased with partnership funds. The mere cir- cumstance of a joint ownership of title is not, in itself, a partnership, and the legal rights of tenants in common in land are not inconsistent with a partnership in which they have also invested personal proper- ty. So, where a partnership existed between tenants in common of land, and the property was sold and conveyed by their joint deed, but one partner received the entire consideration, he was held liable in an action at law brought by his partner for the moiety of such consideration, and it was determined that the rights of the plaintiff in such action did not in any way depend upon a settlement of the part- nership accounts.^ § 111. Power of one partner to mortgage firm real estate. — It is within the power of any member of a partnership, notwithstand- ing the protest of his copartners, to mortgage any part of the firm as- sets to secure payment of a partnership obligation or to obtain a loan of money for partnership uses.' But one partner may not mortgage the individual property of his copartner without his consent or ac- quiescence under such circumstances as to create an estoppeL'' A mortgage by one pai-tner of partnership real estate standing in his own name as owner,, to raise money to pay firm debts, is within such partner's implied authority and binding on the firm.' So, in a case where partnership real estate was held by one partner, and an- other partner assumed to mortgage it in the name of the firm for a firm debt, this mortgage was held to create a valid lien which was superior to a subsequent mortgage executed by the record owner of the legal title." ' First National Banlc of Batavia v. * Gates v. Bennett, 33 Ark. 475. Tarbox, 38 Hun, 57. e Chittenden v. German Amer. Bank, 2 Coles V. Coles, 15 Johns. 158. 27 Minn. 143. 3 Nelson v. Drake, 14 Hun, 465; Mab- , ^^g^^ ^_ Hunter, 14 Wis. 683. bett V. White, 12 N. Y. 454 ; Graser v. Stellwagen, 25 N. Y. 315. 76 MORTaAGES OF EEAL PEOPERTT. [§ 112. § 112. Mortgages by limited partnerships. — The statute of this State relating to limited partnerships provides that every sale, assign- ment, or transfer of any of the property or effects of such partnership made by such partnership when insolvent or in contemplation of in- solvency or after or in contemplation of the insolvency of any part- ner, vpith the intent of giving a preference to any creditor of such partnership or insolvent partner over other creditors of such partner- ship ; and every judgment confessed, hen created, or security given by such partnership under the like circumstances and with the like in- tent shall be void as against the creditors of such partnership.' Every such sale, assignment, or transfer of any of the property or effects of a general or special partner made by such special or general partner when insolvent or in contemplation of insolvency or after or in contemplation of the insolvency of the partnership, with the intent of giving to any creditor of his own or of the partnership, a pref- erence over creditors of the partnership, and every judgment con- fessed, lien created, or security given by any such partner, under the like circumstances and with the like intent, shall be void as against the creditors of the partnership.^ These provisions relate, of course, only to limited partnerships and to the general or special partners in limited partnerships.' They make preferences in contemplation of insolvency attempted to be created for the benefit either of a creditor of the firm or of an indi- vidual partner void, regardless of any knowledge of the creditor or the intent of the partner; the invalidity of the preference is not made to depend upon any knowledge of collusion or fraud on the part of the creditor. In this respect the provisions under consider- ation are unlike other statutes declaring transactions between debtor and creditor or third party void.' Under this statute a mortgage executed by a special partner upon his individual real estate to secure money loaned, part of which was used to pay an individual debt to the mortgagee and the balance of which was used to pay other individual debts of the mortgagor, was declared to be void upon a demurrer to the complaint. At the time of the giving of the mortgage the mortgagor had, by his acts, become liable as a general partner, and he was insolvent, and the mortgage ' I R. S. 766, § 20. of this statute may be found in Fanshawe ' Id. 767, § 21. V. Lane, 16 Abb. Pr. 71. ° A very clear exposition and history •* Per Potter, J., in George v. Grant, 20 Hun, 372. § 113.] WHO MAT MORTGAGE AND HOW. 77 was given witli intent to give the mortgagee and other individual creditors a preference over the firm creditors, and it was received by the mortgagee with knowledge of such facts and intent.' An answer was afterward interposed in this case, and a trial having been had, a very different result was reached. The mortgage, though made by a special partner, on his individual property, for the purpose of raising money to pay his individual debts, was shown to have been executed for a present consideration to nearly its entire extent, and it was' to the extent of such present consideration declared valid, the portion reserved by the mortgagor to satisfy his individual claim being rejected. Mortgages given for money advanced at the time were held to be valid, and the Court of Appeals declined to pass upon the general question as to whether a mortgage of individual property executed by a special partner would or would not be void." MORTGAGES FEOM HUSBAND TO WIFE. § 113. Valid in equity if made direct from husband to wife. — While a deed of conveyance from a husband directly to his wife has been held to be void, the doctrine has been regarded as very tech- nical, and has easily and frequently been evaded, and it has uniform- ly been held, even independent of our peculiar statutes relative to the rights of married women, that such a conveyance may be sus- tained in equity where the wife has been regarded as a person having a separate existence, separate rights, and a capability of holding separate property ; and unless wholly without consideration, a conveyance de- fective in consequence of the common law rule is upheld.^ If no rights of creditors intervene, a mortgage may be made from a husband to his wife as a mere gift/ and a mortgage for a just consid- eration executed by a husband to his wife may be enforced in equity." It was a rule of the common law that when a man married a woman to whom he was indebted, the debt was thereby released, because hus- band and wife made but one person in law, which unity of persons disabled the wife from suing the husband. In this State the Code and the acts of 1848 and 1849 have completely swept away the com- ' George V. Grant, 20 Hun, 372, ''Van Amburgh v. Kramer, 16 Hun, ^ Id., 97 N. Y. 262, affi'g 28 Hun, 69. 205; Isenhartv. Brown, 2 Edw. Ch. 341 ; 2 Meeker v. Wright, 76 N. Y. 262, Bucklin v. Bucklin, i Abb. App. Cas. 242; rev'g s. c. II Hun, 533 ; s. c. 7 Abb. N. Hunt v. Johnson, 44 N. Y. 27. C. 299 ; Shepard V. Shepard, 7 Johns. Ch. ^ Mix v. Andes Ins. Co., 9 Hun, 397. 57 ; Hunt V. Johnson, 44 N. Y. 27. 78 MOETGAGES OF REAL PROPERTY. [§§ 114r-115. mon law rale wMeh gave the husband rights in and control over the property of the wife, and a mortgage executed by a man to a woman whom he afterward marries, is no longer affected by the marriage.' A wife having a vahd mortgage on her husband's real estate, does not lose her lien by joining in a deed of the property for the purpose of passing her dower.'' MORTGAGES BY COEPOEATIONS. § 114. Power to mortgage. — Corporations, unless restrained by their charters, have power to mortgage their property, whether real or personal, to secure debts either for borrowed money or for other considerations,' but no corporation can, without some statute allowing it to do so, either sell or mortgage its franchises.* A mortgage of the real property and franchises of a mining cor- poration has been held valid as to the real property included in it, but inoperative as to the franchises.' The franchises, privileges, rights, and liberties, which are not per- mitted to be mortgaged by a corporation," are the corporate franchises and rights which become vested in the company by virtue of its or- ganization as a corporation under a general law. These do not include patent rights, licenses, easements, or privileges acquired by the com- pany after its incorporation, either from individuals or corporations, which are in the nature of property, of which the company has the power to dispose.' » § 115. Executing mortgage by corporation. — ^Where the avails of a mortgage made by the oflEicers of a corporation are appUed to corporate uses, slight evidence of authority to execute it will be suffi- ' Power V. Lester, 23 N. Y. 529, affi'g ing Co., 65 N. Y. 43, 50 ; Susquehanna s. c. 17 How. 413 ; Meeker v. Wright, Canal Co. v. Bonham, 9 Watts & S. 27 ; 76 N. Y. 262. Arthur v. Com'l and R.R. Bank, 9 ^ "VanAmburghv. Kramer,i6Hun,205; Smedes & M. (Miss.) 394 ; NewOrleans, Gillig V. Maas, 28 N. Y. 191 ; Power v. etc., R.R. Co. v. Harris, 27 Miss. 517 ; Lester, 23 N. Y. 527. Stewart v. Jones, 40 Mo. 140. 2 Carpenter v. Black Hawk Gold Min- ' Carpenter v. Black Hawk Gold Min- ing Co., 65 N. Y. 43, 49 ; DeRuyter v. ing Co., 65 N. Y. 43, 50. St. Peter's Church, 3 N. Y. (3 Comst.) «Lawsof 1878, ch. 163. 238 ; Barry v. Merchant's Exchange Co., ' Lord v. The Yonkers Fuel Gas Co., 1 Sand. Ch. 280 ; King v. Merchant's loi N. Y. 614 ; Bridgeport v. N. Y. & N. Exchange Co., 5 N. Y. (i Seld.) 547 ; H. R.R. Co., 36 Conn. 255 ; Chicago R. Richards v. Merrimack Railroad, 44 N. R. Co. v. People, 73 111. 541 ; Morgan v. H. 127. Louisiana, 3 Otto, 223. * Carpenter v. Black Hawk Gold Min- § 116.] WHO MAT MORTGAGE AND HOW. 79 cient. The affixing of the corporate seal will in all cases raise a pre- sumption of authority.' If a corporation receives benefits under a contract made by one of its officers, a part of which contract included the executing of a mort- gage, the company will not be allowed to repudiate the mortgage without returning the consideration for it. In other words, the com- pany holding the moneys and benefits derived under the mortgage would be estopped from questioning the authority of its officers to make the contract upon which its title to such moneys and benefits depends.'' Where the trustees of a religious society mortgaged its property without signing the mortgage in proper form, parol evidence was held admissible to charge the society as principal in the mortgage.' § 116. Mortgages by corporations organized under the man- ufacturing act. — ^A statute passed in 1811 permitted the formation of corporations for certain manufacturing purposes.* In 1822 it was enacted, in order to remove doubts as to the power of the trustees of manufacturing companies formed under this statute, to secure debts contracted by them, by mortgaging their real estate, " that it shall be lawful for the trustees of any such company to secure the payment of any debt contracted or to be contracted by them in the business for which they were incorporated, by mortgaging all or any part of the real estate of such company ; and every mortgage of such trustees shall be as valid to all intents and purposes as if executed by an in- dividual owning the real estate : provided, that the written assent of the stockholders owning more than two-thirds of the stock of the company shall first be given." ' In 1848 the various laws then existing relating to manufactur- ing, mining, or chemical corporations were gathered together and re- enacted in a statute which, as much amended, is now in force. The second section of that statute provides that persons filing the required certificate shall be a body politic and corporate, and they shall by their corporate name be capable in law of purchasing, holding, and conveying any real and personal estate whatever, which may be nec- essary to enable the said company to carry on their operations named ' Whitney v. The Union Trust Co. of Steam Navigation Co. v. Weed, 17 Barb. N. Y., 65 N. Y. 576. 378. "^ Nelson v. Drake, 14 Han, 465 ; Whit- ' Scott v. Trustees, etc., 50 Mich. 528. ney Arms Co. v. Barlow, 63 N. Y. 62 ; * Laws of 1811, ch. 67. ' Laws of 1822, ch. 213. 80 MORTGAGES OF EEAL PEOPEETT. [§ 117. in such certificate, but shall not mortgage the same or give any hen thereon.^ Any corporation formed under the said act or of the acts amending or extending the same, may secure the payment of any debt hereto- fore contracted or which may be contracted by it, in the business for which it was incorporated, by mortgaging all or any part of the real or personal estate of such corporation ; and every mortgage so made shall be as valid to all intents and purposes as if executed by an indi- vidual owning such real or personal estate, provided that the written assent of the stockholders owning at least two-thirds of the capital stock of such corporation shall first be filed in the office of the clerk of the county where the mortgaged property is situated." In all cases where a corporation shall have heretofore made or shall hereafter make a mortgage of any of its real estate situated beyond the limits of this State, and the recording officer of the county in which such real estate is situated shall have refused or shall refuse to file or record the assent, as now required by law, it is hereby declared to be and to have been a sufficient filing of the assent of the stock- holders if such assent shall have been or shall hereafter be filed in the office of the clerk of the county where the company has its principal nlace of business within this State." It has also been enacted that " any company formed under the act entitled ' An act to authorize the formation of corporations for manu- facturing, mining, mechanical or chemical purposes,' passed February 17, 1848, or of the acts amending or extending said act, may secure the payment of any debt heretofore contracted or which may be con- tracted by it, in the business for which it was incorporated, by mort- gaging all or any part of the goods and chattels of such corporation, and also the franchises, privileges, rights, and liberties thereof, pro- vided that the written assent of a majority of the stockholders owning at least two-thirds of the capital stock of such corporation shall first be filed in the office of the clerk of the county where the corporation has its principal place of business, and also in the office of the clerk of the county where such goods and chattels are situated." * §117. Form of assent of stockholders. — The statutes prescribe no form in which the required assent of the stockholders shall be ' Laws of 1879, ch. 200. ' Laws of 1869, ch. 706. " Laws of 1864, ch. 517 ; Laws of 1871, * Laws of 1878, ch. 163. ch. 481. § 118.] WHO MAT MOETGAGE AND HOW. 81 given. The object of the legislature is the protection of the stock- holders and to guard against the power of the officers of the company to incumber its property without the consent of at least two-thirds of the stockholders. The written assent is the evidence required by the statute, and as no particular form is specified or required, any form which they may choose to, adopt and which contains reasonable evi- dence of the consent of two-thirds of the stockholders to the making of the mortgage in question, is sufficient. If the instrument contains enough to specify and identify the mortgage to which the stock- holders intended to give their assent, it is sufficient. An instrument in the following form, which did not specify the amount of the in- tended mortgage, has been held a sufficient compliance with the law : " Know all men by these presents, that we, the undersigned stock- holders of the Kings County Manufacturing Company, and owning more than two-thirds of the capital stock of the said company, do hereby severally consent that the Kings County Manufacturing Com- pany execute to the Greenpoint Sugar Company a bond conditioned for the payment of , and a mortgage to secure the same upon the lands and premises by them owned, situate in the city of Brook- lyn, county of Kings, in the State of New York or any part thereof. Dated October 21, 1869." ' The blank space left in the place where an amount was ob- viously intended to be inserted, was said not to be fatal to the suffi- ciency of the assent, and the legal import of the document was held to be to authorize the securing of the full amount of any vahd debt which existed and which was permitted by law to be so secured. And parol evidence was held to be admissible to show the situation of the parties and the amount of the debt in contemplation of the parties at the time.' The consent of the requisite proportion of the stockholders of a manufacturing company to the mortgaging of its " real and personal estate" will not sustain a mortgage of its "franchises, privileges, rights and liberties." ° § 118. Who must sign assent. — For the purposes of the act the amount of stock actually issued and owned must be regarded as the amount of the capital stock. The design was to confer this power of ' Greenpoint Sugar Co. v. Kings Coun- ' Greenpoint Sugar Co. v. Whitin, 6g ty Manfg. Co., 7 Hun, 44 ; s. c. affi'd 69 N. Y. 328, affi'g s. c. 7 Hun, 44. N. Y., 328. ' Lord v. Yonkers Fuel Gas Co., 99 N. Y. 547. 6 83 MOETGAGES OV KEAL PEOPEETY. [§ 119. assent upon those who represented two-thirds of the actual stock. They represent two-thirds of the pecuniary interest and property of the corporation. Otherwise it might happen that there would not be a sufficient ownership of the stock to enable the company to execute a mortgage at all.' Where a part of the stock is owned by the corporation, it cannot give assent for the shares so owned by it to make up the requisite two- thirds, neither can the assenting stockholders be deemed to represent a proportionate amount of the stock owned by the corporation. It is also exceedingly doubtful as to whether the shares so held by the corporation may be deducted from the whole number in ascertaining if the assent of the requisite two-thirds has been obtained. But where the corporation has transferred part of the stock held by it as security for debt, by transfers absolute upon their face, the transferees must be counted as stockholders, and may sign the requisite consent.'' The act of 18T8 ' requires the assent of " a majority of the stock- holders owning at least two-thirds of the capital stock," etc. Whether the intention was to require the consent of a majority in number of all the stockholders of the company, as well as a two-thirds majority of the stock, cannot be said to be finally determined.* § 119. When assent must be made and filed. — It is not requi- site for the validity of the mortgage, that the written assent of the stockholders be filed before the mortgage is made. The reasonable construction of the statute is that the mortgage is valid from the filing of the assent. It provides in substance that any mortgage au- thorized by the act shall be as valid as if executed by an individual, provided that the assent is first filed, etc. The validity of the mort- gage is made to depend upon the filing of the assent, and it follows that from the time of filing the mortgage is valid. There is no doubt that a filing at the time of recording the mortgage, which is the final step in perfecting the security, is sufficient." The literal reading of the proviso in the act of 1864, makes the obtaining and filing of the assent of stockholders, conditions precedent to the mortgaging of corporate property. The object of the legis- lature was to protect the stockholders, and it does not preclude them ' Greenpoint Sugar Co. v. Whitin, 69 ' Laws of 1878, ch. 163. N. Y. 328. •'Lord V. Yonkers Fuel Gas Co., gg N. 'Vail V. Hamilton, 85 N. Y. 453, affi'g Y. 547, 558. 20 Hun, 355 ; see Conkling V. Secor Sew- 'Greenpoint Sugar Co. v. Whitin, 69 ing Machine Co., 55 How. 269. N. Y. 328, affi'g s. c. 7 Hun, 44. §§120-121.] WHO MAT MOETGAGE AND HOW. 83 from ratifying a mortgage and by a subsequent assent validate an originally unauthorized transaction. What the stockholders might originally have done, they may hereafter do, where there are no inter- vening rights. The purpose of the statute in requiring the assent to be filed seems to have been to perpetuate the evidence of the fact, and to free titles acquired under mortgages by corporations from the uncertainty which would attend them if the extrinsic fact of assent were not a matter of public record. The consent of the stock- holders is the important and essential thing. The filing is formal and subsidiary. The corporation could not be heard to allege as a defense to the mortgage that although assented to, the evidence of the assent was not recorded ; and a subsequent mortgagee or purchaser stands in no better position.' § 120. Act of 1875 as to mortgages prior to that date. — By laws of 1875, Chapter 88, it is provided that in all cases where a cor- poration had theretofore executed a mortgage upon any of its real es- tate, and the written consent of persons owning two-thirds or more of the capital stock of such corporation shall have been given to the mortgaging of such real estate at or before the time of the giving of such mortgage, but from accident or mistake the said consent had not been filed in the office of the clerk of the county in which such real estate is situated as required by law, it shall be lawful for the clerk of said county to receive and file in his office the written consent so given accompanied by the affidavit of any officer or stockholder of such corporation, showing that such consent was in fact made and signed at the time the same purports to have been made and signed, and that the signatures thereto are genuine ; and in such case, on filing such consent and affidavit, the said mortgage shall have the like validi- ty and effect from and as of the time of the filing of such consent and affidavit as if the same had been given at that time and had been accompanied or preceded by the filing of such consent ; provided that nothing therein contained shall affect any action or legal proceeding then pending, or impair any intermediate right acquired by lien or otherwise, in or to the property of the corporation affected by such mortgage. § 121. Purchase-money mortgage by corporation. — Where a corporation buys real or personal property, atid secures a part of the purchase money by a mortgage lien on the property thus acquired, ' Rochester Savings Bank v. Averell, 96 N. Y. 467, affi'g 26 Hun, 643. 84 MOETaAftES OF EEAL PEOPEKTT. [§ 122. such mortgage is part of the transaction upon which the title of the corporation depends, and does not require the assent of stockholders to render it valid.' § 122. Who may take advantage of lack of assent of stock- holders. — The objection that a mortgage by a manufacturing com- pany is void by reason of the lack of the required assent of stock- holders, may be made by a receiver of the corporation, appointed on the application of a creditor, who may bring an action to have it set aside,' but it is at least doubtful whether such an objection would be available to a person claiming in hostility both to the corporation and to the mortgagee, as for instance the holder of a junior lien.' A person taking a junior mortgage with knowledge of a prior mortgage, as to which a consent had been given which was not properly filed, is not in a situation to contest the earlier lien." And the purchaser of an equity of redemption under a judgment against the corporation has been declared not to be entitled to benefit by an omission to ob- tain or file the consent for the giving of the mortgage.' This rule was applied when the plaintiff became the purchaser at a sale under his own judgment, by the terms of which the property was sold " subject to whatever sum might be due upon said property by virtue of the mortgage." ° In Pcmldmg v. The Chrome Steel Co. (94 IST. T. 334, 341), the following language is used by Andrews, J. : " That assent has been considered by us as exacted for the benefit and protection of stock- holders against improvident or corrupt acts of the officers of the cor- poration, and not because the legislature regarded the mortgaging of corporate property as improper per se, and it is at least doubtful whether any but stockholders can complain that the condition was not complied with." ' A stockholder may impeach a mortgage of a manufacturing corpo- ration for lack of the requisite assent of stockholders, or because not ' Coman v. Lakey, 8o N.Y. 345; Amer- * Rochester Savings Bank v. Averell, man v. Wile, 24 N.J. Eq. 13, 17 ; Green- 26 Hun, 643. point Sugar Co. v. Whitin, 69 N. Y. 328; * Per Cooley, J., in Beecher v. Mar- Stow V. Tifft, 15 Johns. 458; Dusenbury quette & Pacific Rolling Mill Co., 23 V. Hurlbert, 59 N.Y. 541. Alb. L. J. 316. 'Vailv. Hamilton, 20 Hun, 355 ; s. c. « Conkling v. Secor Sewing Machine affi'd, 85 N. Y. 453 ; Astor v. Westches- Co., 55 How. 269. ter Gaslight Co., 33 Hun, 333. ' Citing Greenpoint Sugar Co. v. Whit- ' Greenpoint Sugar Co. v. Whitin, 6g in, 69 N. Y. 328. N. Y. 328. § 123. J WHO MAY MORTGAGE AWD HOW. 85 given for a debt of the corporation ; bnt in an action to do this, the burden of proving all material facts will rest upon the plaintiflE.' § 123. What debts may be secured by manufacturing compa- nies. — The statute permits manufacturing corporations, under condi- tion of procuring consent of stockholders, to mortgage their property "to secure the payment of any debt heretofore contracted or which may be contracted by it in the business for which it was incorpora- ted." " In Gentral Oold Minvng Co. v. FlaU (3 Daly, 263), a mort- gage had been made by such a corporation to trustees therein named, to secure coupon bonds. Some of these bonds were transferred at par in satisfaction of a debt of the company ; others were sold at a discount of from 25 to 50 per cent., and $30,000 of such bonds were pledged for a loan of $5,000, and, such loan not being paid, they were sold for that amount and interest. The question was raised as to the validity of the mortgage, and the General Term of the Com- mon Pleas held, reversing the Special Term, that the corporation might lawfully execute a mortgage to secure a debt not yet made, and might authorize the sale of the bonds secured by the mortgage in order to raise money for use by the corporation. In Ca/rpenUr v. Black Hawk Oold Minvng Co. (65 N. Y. 43, 49), a mining com- pany, organized under the statute under consideration, authorized a mortgage to secure bonds, some of which were transferred to credit- ors of the company, and it was said by Eael, C, that the mortgage was valid only for such part of the bonds as had been used in securing debts of the company, though the company and the stoeldiolders would probably be estopped as to such of the purchased bonds as were in the hands of l)ona fide holders. In the language of the learned judge : " A mortgage upon real estate is allowed only to se- cure the payment of debts. It caimot be made to raise money merely to carry on the operations of the company." In a later case, the question of the validity of a mortgage executed by the trustees of a manufacturing company in pursuance of due con- sent of the required portion of stockholders, where bonds secured thereby were sold to raise money to pay debts of the corporation, was directly presented. It was then held that " there is nothing in the act which requires that in the case of a trust mortgage to secure ne- gotiable bonds to be thereafter issued, the debts authorized to be se- ' Denike v. N. Y. & R. Lime, etc., Co., ' Laws of 1864, ch. 517 ; Laws of 1871, 80 N. Y. 599. ch. 481 ; Laws of 1878, ch. 163. 86 MORTGAGES OF EEAL PEOPEETT. [§§124-125. cured should be in existence at the time the mortgage and bonds are prepared and executed. Every conceivable intent of the statute is effectuated, provided the bonds are negotiated only for the purpose of paying debts contracted before the negotiation of the bonds. Where a bond of this description, having no previous vitality, is de- livered to a creditor of the company to pay or secure his debt, the delivery of the bond is the act by which his debt becomes secured. The security to the creditor then for the first time comes into being, and is as effectual as if the mortgage were executed at the same time with the delivery of the bond. The effect is the same if the bond is sold to provide means to pay a debt existing at the time of the sale, and the proceeds are paid to the creditor." ' § 124. Gaslight companies. — The effect of the provision of the act of 1872 " amending the act of 1848 ' providing for the formation of gashght companies, which authorizes a corporation organized under it to purchase property and borrow money necessary for its corporate business, and to issue bonds and to mortgage its property and franchises to secure any debts so contracted, was to supersede the provisions of the amendatory act of 1867,' which required the written consent of two-thirds of the stockholders to the execution of a mort- gage.^ § 125. Mortgages by clubs and societies. — The Supreme Court may, upon the application of any society, association, or corporation, now or hereafter incorporated under the act entitled " An act for the incorporation of societies or clubs for certain social and recreative purposes," passed April 11, 1865, and the acts amendatory thereof, or under Chapter 267, of the Laws of 1875, entitled "An act for the incorporation of societies or clubs for certain lawful purposes," and of the several acts extending and amending said act, in case it shall deem it proper, make an order for the mortgaging of any real or personal estate belonging to any such corporation, and direct the ap- plication of the moneys arising therefrom by the said corporation, and upon like application may confirm any bond or mortgage heretofore given by any such corporation, and thereupon such bond and mort- ' Per Rapallo, J., in Lord v. Yonkers ' Laws of 1848, ch. 37. Fuel Gas Co., 99 N. Y. 547, 556 ; Jones ^Laws of 1867, ch. 480. V. Guaranty and Indemnity Co., loi U. ' Davidson v. Westchester Gaslight Co., S. 622. 99 N. Y. 558, rev'g Astor v. Westches- « Laws of 1872, ch. 374, § 2. ter Gaslight Co., 33 Hun, 333. §§126-127.] WHO MAT MOETGAGE AND HOW". 87 gage shall be a legal obligation and a valid Hen upon the premises or property covered thereby, from the date of record thereof.' § 126. Mortgages of the lands of religious corporations. — By the common law of England, all corporations capable of acquiring property were also capable of aliening it or charging it with the pay- ment of debts.* But in the reign of Elizabeth and of her successor, several statutes were passed restraining alienations of church property by religious corporations, and restricting the power of leasing. These statutes forming a part of the law of England at the time of the set- tlement of this State by colonists from England, under the charter of the Duke of York, became a part of the laws of the colony, although they were not afterward re-enacted here.' § 127. Supervisory power of the court. — By Laws of 1813, c. 60, § 11 (3 Edm. St. 694), it was enacted that it should be lawful for the chancellor of this State, upon application of any religious cor- poration, in case he should deem it proper, to make an order for the sale of any real estate belonging to such corporation, and to direct the application of the moneys arising therefrom, by tjie said cor- poration to such uses as the same corporation, with the consent and approbation of the chancellor, shall conceive to be most for the in- terest of the society to which the real estate so sold did belong : jpro- vided that the act should not extend to any of the lands granted by this State for the support of the gospel. The powers formerly exercised by the chancellor are now vested in the Supreme Court. This statute was a re-enactment of a statute passed in 1806, and furnishes evidence that the legislators believed that the common law restrained religious corporations from ahenating their property, and that they thought it necessary to empower the chancellor to authorize such sales to be made." The jurisdiction of the Supreme Court to make an order authoriz- ing the conveyance of the lands of a religious corporation under this statute, depends upon the facts before the court when it makes the ' Laws of 1884, ch. 68 ; amending Laws 5 Wend. 423, 445 ; Canal Appraisers v. of 1869, ch. 629. , The People, 17 Wend. 571, 584. » Dutch Church v. Mott, 7 Paige, 77, * De Ruyter v. The Trustees of St. 83 ; Matter of the Reformed Dutch Peter's Church, 3 Barb. Ch. 119 ; s. c. Church in Saugerties, 16 Barb. 237, afiS'd 3 N. Y. (3 Comst.) 238 ; Madison 241. Avenue Baptist Church v. Baptist Church ' Canal Commissioners v. The People, in Oliver Street, 46 N. Y. 131, 142. 88 MORTGAGES OF REAL PEOPEETT. [§§128-129. order. Its jurisdiction cannot be upheld by showing that facts ex- isted which were in no way placed before the court or brought to its attention or considered by it.' And an unauthorized conveyance by a religious corporation of its real estate, cannot be held valid because it has been executed and deUvered, the purchaser put in possession, and the corporation paid the consideration therefor." § 128. When order of court is necessary. — The statute does not grant to the courts any power to direct the sale of any of the property of a religious corporation. The authority of the court is entirely nega- tive, and it can only ratify or refuse to ratify the bargains which the cor- porations elect to make.^ It was formerly thought to be necessary that the consent of the court should be obtained before any contract of sale had been entered into,' but the later decisions are to the effect that it is sufficient if such consent be obtained at any time before the conveying of the property.' It is only where an absolute transfer of the title is contemplated, that the consent of the court is necessary. The sale of a pew, where the purchaser acquires merely a limited usufructuary right," or the conveyance of an easement or right of burial in the churchyard,' do not require to be approved by the court. So, the trustees of a relig- ious corporation have the power to remove their house of worship from one lot to another, or from one village to another, without ap- plication to the court." § 129. Where a mortgage is given to secure a debt legally- contracted, this is not such a sale of the property as requires an order of the court to render it valid." The object of the law is to prevent a misapplication of the trust funds," and it is not necessary to invoke the sanction of the court, in order to impose a specific lien where a ' Madison Avenue Baptist Church v. nethy v. Society of the Church of the Oliver Street Baptist Church, 73 N. Y. Puritans, 3 Daly, i. 82. ' Richards v. Northwest Protestant ' 14. Church, 32 Barb. 42 ; s. c. 20 How. 317 ; 5 Matter of the Reformed Dutch 11 Abb. 30. Church of Saugerties, 16 Barb. 237 ; ° Matter of the Second Baptist Society Wyatt V. Benson, 23 Id. 327 ; s. c. 4 in Canaan, 20 How. 324. Abb. 182. " Manning v. Moscow Presbyterian ^ Dutch Church in Garden Street v. Society, 27 Barb. 52 ; Lee v. Methodist Mott, 7 Paige, 77. Episcopal Church of Fort Edward, 52 ' Congregation Beth-Elohim V. Central Barb. 116. Presbyterian Church, 10 Abb. N. S. 484. "' South Baptist Society of Albany v. ^ Freligh v. Piatt, 5 Cow. 494 ; Aber- Clapp, 18 Barb. 36. §§130-132.] WHO MAY MOBTGAGE AKD HOW. 89 valid general charge previously existed. But where the mortgage is made as security for a loan of money obtained at the time of its exe- cution, it would at least be prudent to obtain the approval of the court to the transaction. § 130. By whom application to be made. — The application for permission to sell or mortgage church property can be made by the trustees having control of the temporal affairs of the corporation, and it is not necessary that a majority of the corporators should au- thorize the trustees to initiate the proceeding.' § 131. Mortgages by charitable societies. — By Laws of 1854, c. 50, it is made lawful for the Supreme Court of this State, upon the application of any benevolent, charitable, scientific, or missionary so- ciety, incorporated by law, in case it shall deem it proper, to make an order for the mortgaging of any real estate belonging to said corpo- ration, and to direct the application of the moneys arising therefrom, by the said corporation, to such uses as the same corporation, with the consent and approbation of the said court, shall conceive to be most for the interest of the society to which the real estate so mortgaged belongs. MOETGAGES TO NATIONAL BANKS. § 132. Provision of statute. — The statute of the United States under which national banking associations are permitted to be formed, authorizes such associations to loan money upon personal security, but the following restriction is made as to real estate : " A national banking association may purchase, hold, and convey real estate for the following purposes and for no others : First, such as may be necessary for its immediate accommodation in the transac- tion of its business. Second, such as may be mortgaged to it in good faith by way of security for debts previously contracted." Third, such as shall be conveyed to it in satisfaction of debts previously contracted in the course of its dealings. Fourth, such as it shall pur- chase at sales under judgments, decrees, or mortgages, held by the association, or shall purchase to secure debts to it. But no association shall hold the possession of any real estate purchased to secure any debts due to it for a longer period than five years." ^ 1 Madison Avenue Baptist Church v. Vt. 349 ; Woods v. Bank, 83 Pa. St. 57 ; Baptist Church in Oliver Street, 46 N. Spafford v. First Nat. Bank, 37 Iowa, Y. 131. 181. « Howard Nat. Bank v. Toomes, 51 = R. S. of U. S. § 5137. 90 MOETGAGES OF EEAL PEOPEBTT. [§ 133. The language of the statute by implication prohibits a loan upon real estate security or the taking of mortgages for money to be ad- vanced in the future, and for a time it was supposed that such mort- gages were void, and could not be enforced against the persons mak- ing them.' § 133. Later decisions. — These decisions have, however, been reversed and overruled by the Supreme Court of the United States, and the doctrine now established is that the security taken is valid as between the bank and its debtor and can be enforced, and that what- ever objection there may be to a mortgage for future advances from the prohibitory provisions of the statute, that objection can only be urged by the government.'^ A mortgage to a national bank has, since the later decisions, been enforced for future advances.' Where a national bank lawfully held a mortgage on real estate, it was held that it might protect its interests by purchasing a prior mortgage on such real estate, and that it might compel the assignment to it of such prior mortgage, the circumstances of the case being such as would confer the right to such assignment independent of its cor- porate character." So, when a national bank, holding a junior lien, pays the prior incumbrance, it may take a new mortgage for its in- demnity.' And a national bank may purchase at foreclosure sale the land which had been mortgaged to it." A national bank may sell its real estate and take back a mortgage for the purchase money.' A national bank organized as a successor to a State bank, may maintain an action to foreclose a mortgage executed to the State bank as security for a note and assigned to it by the State bank.' 'Crocker v. Whitney, 71 N. Y. 161 ; \f. Matthews, 19 Alb. L. J. 132, rev'g Mat- Woods V. People's Nat. Bank, 82 Pa. St. thews v. Skinker, 62 Mo. 329. 57 ; Fowler v. Scully, 72 Pa. St. 456 ; ' Simons v. First National Bank, 93 Wobds V. Bank, 83 Pa. St. 57 ; Nat. Bank N. Y. 269. of Topeka v. Rowill, 2 Dillon (C. Ct. R.) * Holmes v. Boyd, go Ind. 332. 371 ; Ripley v. Harris, 3 Biss. C. Ct. R. ' Ornn v. Merchant's National Bank, 190. 16 Kans. 341. ^National Bank of Genesee v. Whit- ' Heathv.SecondNat.Bank,7oInd.io6. ney, 13 Otto, 99, rev'g Crocker v. Whit- ' New Orleans Nat. Bank v. Raymond, ney, 71 N. Y. 161 ; s. c. 23 Alb. L. J. 29 La. An. 355 ; s. c. 29 Am. R. 335. 355 ; First Nat. Bk. of Waterloo v. El- ' Scofield v. State Nat. Bank of Lin- more, 52 Iowa, 541 ; Union Nat. Bank coin, 9 Neb. 316 ; s. c. 31 Am. R. 412. §§ 134^135.] WHO MAT MORTGAGE AND HOW. 91 MORTGAGES OF THE LANDS OF INFANTS. § 134:. Ratification of mortgage made during infancy. — A mortgage made by an infant is voidable but not void, and he may, after coming of age, ratify and confirm it. If the mortgage is given on the purchase of the mortgaged property, the mortgage and the deed constitute part of the same transaction and it is not competent for him to ratify the deed and repudiate the mortgage. By retaining the land he will make himself bound by the mortgage.' A conveyance of the mortgaged property by the infant after com- ing of age in which the mortgage is recognized as valid will amount to a ratification,' and a repudiation of the mortgage will not necessa- rily be implied by a conveyance which does not mention it." So, where an infant, with the approval of his father, obtained money upon a mortgage, and after reaching maturity died, leaving a will in which he directed " all his just debts to be paid and satisfied," and then devised the property to his mother without mentioning the mortgage, it was held that the court was justified by the circum- stances under which the loan was made, in laying hold of any equita- ble construction which could possibly be given to the will, and to hold it to be a confirmation instead of an avoidance of the bond and mortgage.' A part payment of a mortgage executed during infancy, made after coming of age, will constitute a ratification of iV "Where an infant executed a mortgage, and after becoming of age executed a deed of the property to a trustee without receiving any consideration, and afterward redelivered and reaffirmed the mortgage, this latter act was held to establish the mortgage as a vaUd security from its date, and to render it paramount to the title under the deed." § 135. Disaffirmance of a mortgage made during infancy must be by some act clearly expressing an intention to do so per- formed promptly after coming of age.' If this is attempted to be ■ Henry v. Root, 33 N. Y. 526, 553 ; ' Palmer v. Miller, 25 Barb. 399. Lynde v. Budd, 2 Paige, 191 ; Kitchen * Merchant's Ins. Co. v. Grant, 2 Edw. V. Lee, II Paige, 107; Curtis v. Mc- Ch. 544; Hampson v. Suydenham, Nel- Dougal, 26 Ohio St. 67 ; CoUis v. Day, son's Ch. R. 55. 38 Wis. 643. * Keegan v. Cox, 116 Mass. 289. ^ Lynde v. Budd, 2 Paige, 191 ; Bos- * Palmer v. Miller, 25 Barb. 399. ton Bank v. Chamberlin, 15 Mass. 220; ' Loomer v. Wheelwright, 3 Sandf. Ch. Allen V. Poole, 54 Miss. 323 ; Losey v. 135. Bond, 94 Ind. 67. 92 MOETGAaES OF EEAL PEOPEETT. [§§ 136-138. accomplished by a deed, the document must be of such a nature as to be inconsistent with the mortgage, so that both cannot stand together.' Where a mortgage executed by a person who was an infant when it was executed, but who has since come of age, is attempted to be foreclosed, the defense of infancy must be interposed before judg- ment. The defendant cannot wait to ascertain whether there will be a surplus before questioning his personal liability." § 136. Subrogation.— A person advancing money to pay off an incumbrance on the real estate of a person mentally incapable to con- tract, is entitled to be subrogated to such incumbrance, and the same rule would prevail in the case of an infant.' § 137. A mortgage executed by a guardian of an infant to himself, as such guardian, is valid as against him, and on the fore- closure of such mortgage, if the entire amount is realized and the rights of the infant are thus protected, a valid title will pass which a purchaser will be required to accept.* § 138. Proceedings under the statute to mortgage lands of infants. — Any infant seized of any real estate, or entitled to any term of years in any lands, may, by his next friend or by his guardian, apply to the court for the sale or disposition of his property. On such application the court appoints one or more suitable persons guardians of such infant ; the guardians are required to give bonds, and the court then proceeds in a summary manner by a reference to inquire into the merits of the application. Whenever it shaU appear satisfactorily that a disposition of any part of the real estate of such infant, or of his interest in any term of years, is necessary or proper, either for the siipport and maintenance of such infant, or for his edu- cation ; or that the interest of such infant requires, or will be sub- stantially promoted by such disposition, on account of his said property being exposed to waste and dilapidation, or on account of its being wholly unproductive, or for any other pecuKar reasons or circumstances, the court may order the letting for a term of years, the sale or other disposition of such real estate or interest, to be made by such guardian or guardians so appointed, in such manner and with such restrictions as shall be deemed expedient." /i { ' Buchanan V. Griggs, 24 Northwestern 'Coleman v. Fraser, 3 Ky. 300. Rep. 452 ; Eagle Fire Ins. Co. v. Lent, i * Lyon v. Lyon, 67 N. Y. 250. Edw. 301. ' Code, § 2348 f if j^?. See also Rules ^ Flynn v. Powers, 35 How. 279; s. c. 55 to 59. affi'd 36 How. 289. §§ 139-140.] WHO MAT MORTGAGE AND HOW. 93 There can be no doubt that the statute authorizes the mortgaging of the lands of infants as well as the sale of them, but, in practice, it is seldom proper to mortgage when a sale can be made, and it is not a common thing to do. The reason for this may be found in the fact that to mortgage an infant's land is to run him into debt, and it does not often happen " that the interest of such infant requires, or wiU be substantially promoted by," the imposing upon him of an obligation to pay Interest on borrowed money. § 139. Proceedings under this statute must strictly conform to the letter of the law, for the court has no authority outside of the enactment.' The infant must be seized of the estate, that is, he must hold the legal title, or the proceedings cannot be taken at all f but it is said that courts of equity have an inherent jurisdiction, independent of statute, to order a sale of the equitable estate of in- fants, and upon a similar reason they may also authorize the mort- gaging of such equitable interests.^ Each and every of the steps prescribed by the statute must be ob- served in order to make the mortgage valid. Thus, it is required that before a mortgage can be made, the special guardian of the in- fant must enter into an agreement therefor subject to the approval of the court, and must report the agreement to the court upon oath." A disregard of this formality has been held to make the mortgage void." The report of the referee on an application to mortgage the lands of infants, should contain within itself a specification of the objects to which the avails should be applied without requiring an examin- ation of the evidence or of any other papers. The final order authoriz- ing the mortgage ought also to specify these objects. The duty of the special guardian is to apply the money received by him in con- formity with the order under which he acts, and he cannot refuse to pay a debt directed by such order to be paid on the ground that, in his opinion, the infant is not liable therefor." § 140. Costs in proceedings to mortgage lands of infants, lunatics, etc. — There is no statute providing for commissions to be paid to special guardians appointed in proceedings to sell or to mort- ' Rogers.-v. Dill, 6 Hill, 415 ; Baker v. ^ Wood v. Mather, 38 Barb. 473 ; In re Lorillard, 4 N. Y. (4 Comst.) 257 ; On- Turner, 10 Barb. 552. derdonk v. Mott, 34 Barb. 106 ; Battell * Code, § 2356. V. Torrey, 65 N. Y. 294. ' Battell v. Torrey, 65 N. Y. 294. ' Baker v. Lorillard, 4 N. Y. (4 Comst.) ^ Matter of Lampman, 22 Hun, 239 257 ; Wood V. Mather, 38 Barb. 473. 94 MOETGAaES OF EEAL PEOPEETT. [§ 141. gage infants' real estate. Nor is there any fixing the cost and ex- pense wHieh may be allowed in conducting the same, and no pro- vision is made for attorney's fees or the expenses of a reference. AU the costs and allowances which can be charged upon the fund are within the discretion of the court, and are fixed and provided for in the standing rules. From the time the proceedings are initiated for the purpose of securing a sale, mortgage, or lease of an infant's real estate he is made a ward of the court and the proceeds of the sale are Tinder its care and protection.' The special guardian who is to repre- sent the infant, is named by the court to do such service and make such inquiries as may be required of him, and he has no other duty to perform. He is entitled to such compensation for his services as the court may deem reasonable.' In this respect he stands in the same relation to the court as special guardians who are appointed in actions and other proceedings.^ INSANE PEESONS. § 141. A mortgage executed by a person of unsound mind, who has been duly found by inquisition to be insane, is presumably void. This presumption may be overcome by evidence, and where the evidence shows that such person, though weak in body and feeble in mind, is not devoid of reason and judgment, and has a fair mem- ory, he will be held competent to make a valid mortgage.* In an action upon a contract made by a person found by inquisition to have been insane at the time of making it, the plaintiff can recover only by showing that the defendant was sane at that time, or that the consideration moving to him was of such a nature that justice and equity require the claim to be paid out of his estate." "Where a bond and mortgage were executed by one who was, in fact, insane, to secure a loan made to her in good faith, without fraud or unfairness, and without knowledge of the insanity or notice or information calUng for inquiry, of which loan the lunatic had the benefit, they were held to be. valid and binding, and that the fact that she was afterward, upon inquisition taken, declared to be insane, did not affect their validity." ■ Code, § 2360. ' Rule 50. » Hicks v. Marshall, 8 Hun, 327. s Matter of Matthews, 27 Hun, 254, 'Mutual Life Ins. Co. of N. Y. v. affi'd 90 N. Y. 688. Hunt, 79 N. Y. 541, affi'g s. c. 14 Hun, * Hirsch v. Trainer, 3 Abb. N. C, 274, 169. and note. §§142-143.] WHO MAT MORTGAGE AKD HOW. 95 § 142. Mortgages of the lands of lunatics and habitual drunk- ards. — Any idiot, lunatic, or person of unsound mind, seized of any real estate, or entitled to any term for years in lands, may, by com- mittee duly appointed, apply to the Supreme Court for the sale or disposition of them. Proceedings must be taken in most respects quite similar to those on an application to dispose of the real estate of an infant ; a bond should be given by the committee, and the court will make the order whenever it shall be made to appear to be for the in- terest of such idiot, lunatic, person of unsound mind, or habitual drunkard.' As in the case of the estates of infants, it is generally better to re- lieve the necessities of lunatics and drunkards by selling their prop- erty than by mortgaging it. § 143. Jurisdiction of the court over lands of insane persons. — The fihng of a petition which shows the existence of a valid outstand- ing debt of the lunatic, requiring the disposition of his real property to enable the committee to pay, vests the court with jurisdiction of the subject matter under the act,* and such jurisdiction would not be diverted by subsequent irregularities in the proceeding, unless they were taken in violation of some express provision of the statute.* By section 1 of title 2 of the act in question, the Supreme Court is in- vested with general jurisdiction over the persons and property of lu- natics and persons of unsound mind, and except as restrained and limited by the provisions of the statute, has power and authority to direct the plan and method of their custody, and such disposition of their property as in its judgment is for the best interest of the luna- tic. This jurisdiction is in no sense a limited jurisdiction to be exer- cised as in the case of special proceedings authorized by statute, but pertains to the general jurisdiction of the court, and is limited only by the express requirements of the statute." The powers conferred are similar to those formerly vested in the Court of Chancery, and the care and custody of the persons and property of lunatics and others ' 2 R. S. 53, § II ; Laws of 1864, ch. Pr. 59 ; Fisher v. Hepburn, 48 N. Y. 50 ; 417) § 5 i Laws of 1869, ch. 627 ; Laws People ex rel. Johnson v. Nevins, i Hill, of 1874, ch. 446, title 2, § 9 ; §§ 2345 to 154 ; Cole v. Hall, 2 Id. 625 ; Matter of 2364 of the Code. Empire City Bank, 18 N. Y. 199 ; Mohr ' Laws of 1874, ch. 446, title 2. v. Manniere, loi U. S. 418. ^ Agricultural Ins. Co. v. Barnard, 96 * Per Ruger, Ch. J. , in Agricultural N. Y. 525, 531 ; Bangs V. Duckinfield, 18 Ins. Co. v. Barnard, 96 N. Y. 525, 531, N. Y. 592 ; D'lvernois v. Leavitt, 8 Abb. rev'g 26 Hun, 302. 96 MOETGA&ES OF REAL PEOPEETT. [§ 144.' of unsound mind, wHcli was formerly exercised by the cliancellor, is now confided to the Supreme Court. These powers are usually exercised by the court through a committee, and he acts as the officer of the court, and is always subject to its control and direction.' Even the entire omission by the committee to give a bond on the applica- tion was held not to afEect the validity of the proceeding.'' The jurisdiction given to the court under the Revised Statutes in reference to the sale, mortgage, or lease of the real estate of a lunatic, is, however, a special statutory one, and can only be exercised as the statute directs. So, where an order to sell and convey the real estate of a lunatic recited the necessity of the sale to be only for the support of the family of the lunatic, it was presumed that the court made the order for that purpose and disregarded other grounds stated in the petition. The act of 1864 does not authorize a sale for that purpose, but only for the support and education of the infant himself and the promotion of his interests for the reasons specified in the statute." The portion of the Revised Statutes and the statutes giving to the court power to sell or mortgage the lands of lunatics and other in- competent persons, were repealed in 1880,' at the time of the enact- ment of the portions of the Code of Civil Procedure having reference to the same subject.' The question as to whether the jurisdiction given by the Code is general or special has not been judicially passed upon. MOETGAGBS OF LANDS OF DECEASED PEES0N8 TO PAY DEBTS. § 144. Jurisdiction of surrogate. — After the executors or admin- istrators of any deceased person shall have made and filed an inven- tory according to law, if they discover the personal estate of their testator or intestate to be insufficient to pay his debts, they may, at any time within three years after the granting of their letters testar mentary or of administration, apply to the surrogate for authority to mortgage, lease, or sell so much of the real estate of their testator or intestate as shall be necessary to pay such debts." The application to the surrogate should be by petition, and the method of procedure intended for the protection of the rights of the various parties in interest, is quite fully set forth in the Code of Civil 'Agricultural Ins. Co. v. Barnard, ' Matter of Valentine, 72 N. Y. 187. 96 N. Y. 525 ; Matter of Lynch, 5 Paige, * Laws of 1880, ch. 245. 120. ' Sec. 2345 et seq. ^ Agricultural Ins. Co. v. Barnard, 96 * Code of Civ. Pro. § 2749 et seq. ; 2 N. Y. 525. R. S. 100, § I. §§ 145-146. j WHO MAY MORTGAGE AND HOW. 97 Procedure, tlie numerous statutes in force before the passage of the Code being now repealed.' § 145. The heir or devisee may sell or mortgage land at any time after the death of his ancestor or testator, but the purchaser or mortgagee takes subject to the right of the administrator to have the same sold for the payment of debts. The habihty of the land for such debts, in case of a deficiency of assets, is a statutory hen running with the land for three years." But if a mortgage subject to such a lien has been foreclosed, and a surplus remains after paying the mort- gage debt, such surplus is the primary fund for the payment of debts, and must be resorted to before any attack can be made on the lands in the hands of the purchaser, even though the administrator was not a party to the foreclosure.' MOETQAGES OF BUEIAL AND CEMBTEET LOTS. § 146. Cancelling exemption of private burial lots. — The new Code of Civil Procedure makes a change in the law relative to the mortgaging of exempt property, including private or family burying lots and homesteads. A mortgage executed after May 1, 18Y7, upon property so exempt, is ineffectual until the exemption has been cancelled by the recording of a certificate subscribed and ac- knowledged by the mortgagor, except that such mortgage is vahd to the extent of the purchase money of the same property secured thereby." Such exemption may be created under Sections 1396 to 1399 of the Code as to land set apart as a family or private burial-ground, or as to a lot of land occupied as a residence by a householder having a family, or by a married woman. The terms upon which such ex- emptions may be secured, and its extent, are set forth in the sections cited. Previous to this provision of the Code, it had been held that an ' Code of Civ. Pro. § 2749 et seq. See monds' edition of the statutes, as follows : 2 R. S. loo, § I ; Laws of 1837, c. 460, Vol. II., p. 102 ; Vol. IV., pp. 494, 499, %H.o et seq.; Laws of 1843, c. 172 ; Laws 506,508; Vol. VI., pp. 126, 142, 234; of 1847, c. 298 ; Laws of 1850, c. 82 ; Vol. VII., pp. 433, 485 ; Vol. IX., pp. Laws of 1850, u. 150 ; Laws of 1850, c. 327, 585. 162 ; Laws of 1863, c. 362, § 6 ; Laws of ^ Hyde v. Tanner, i Barb. 75 ; Laws 1863, c. 400 ; Laws of 1864, c. 71, § 9 ; of 1837, t. 460 ; Laws of 1869, t. 845 ; Laws of 1869, c. 260 ; Laws of 1869, c. Laws of 1873, c. 211. 845 ; Laws of 1872, c. 92 ; Laws of 1873, ^ Brevoort v. Mcjimsey, i Edw. 551. c. 211. Said statutes may be found in Ed- *Code of Civ. Pro. § 1404. 7 98 MOETGAGES OF EEAL PROPEETY. [§ 147. agreement to waive an exemption, when made part of the transaction out of which the indebtedness arose, is void as against public policy.' It had also been held that a homestead exemption could be waived by a separate instrument executed simultaneously with a mortgage given to secure a precedent debt, and accompanied with the surrender of collateral securities ; but that such waiver in favor of the mortgagee operated to discharge the exemption so as to let in the hen of a prior judgment.' § 147. Lots in public cemeteries. — A statute declaring that cemetery lots shall not be liable to sale on execution does not preclude mortgaging such lots, nor does it prevent a foreclosure of such mort- gage by their sale. Such a statute does not apply to a voluntary act of the owner affecting the title, and a mortgage of a burial lot is not void as against public policy. A mortgage of a burial lot in Green- wood Cemetery has on these principles been enforced by a judgment of foreclosure and sale.' In the case above referred to there had been no interment in the lot mortgaged, and, in a later case, it was held at special term, by Yaih Voest, J., that where a person has taken a conveyance of a burial lot and has made interments therein of the dead of his family, it is in such condition that it cannot be mortgaged to secure payment of a debt or the return of money borrowed. The mortgage was in the form of an absolute conveyance, and the mortgagee notified the mortgagor to remove the bodies of his buried children, with a threat that if the mortgagor did not he would. An injunction to restrain such removal was sustained. The burial lot was situated in Green- wood Cemetery, the charter of which did not contain, in terms, any absolute restraint upon the power of voluntary alienation of a ceme- tery lot by an owner.' By section 11 of chapter 133 of the Laws of 1847, entitled " An act authorizing the incorporation of rural cemeteries," it is provided that when plots or lots shall be transferred to individual owners, and after there shall be an interment in a lot or plot so transferred to in- dividual owners, such plot or lot, from the time of such interment, shall be forever after inahenable, and shall, upon the death of the ' Harper V. Leal, lo How. 276 ; Kneet- 'Lantz v. Buckingham, 11 Abb. N. S. tie V. Newcomb, 31 Barb. i6g, affi'd 22 64 ; s. c. sui nam. Lautz v. Buckingham, N. Y. 249. 4 Lans. 484. " Smith V. Brackett, 36 Barb. 571. * Thompson v. Hickey, 59 How. 434. § 148.] WHO MAT MOETGAGE AND HOW. 99 holder or proprietor thereof, descend to the heirs at law of such holder or proprietor, and to their heirs at law forever ; and chapter 310 of the Laws of 1879 declares that it shall not be lawful to mort- gage land used for cemetery purposes, or to apply it in payment of debts. § 148. Mortgages of burying-grounds by church or religious corporations. — It is provided by Laws of 1842, c. 215, that it shall not be lawful for any church or religious corporation to mortgage any burying-gronnd used for the interment of human remains, for the use of which they shall have received compensation, without the previous consent, in writing, of three-fourths in number of the con- gregation or society of such church or corporation ; which consent shall be proved or acknowledged, in the same manner as deeds are now required by law to be proved or acknowledged, and shall there- upon be recorded in the oflBce of the register of the city, or clerk of the county in which such burying-ground is situated. ' CHAPTEE V. EXTENT OF THE LIEN, AKD REMEDIES OK ACCOtrNT OP WASTE. LIEN OF A MORTGAGE ON A RIGHT OF ACTION FOR DAMAGES TO THE ESTATE. §149. A mortgage carries with it the prior right to damages. 150. The remedy of mortgagee confined to the award. 151. Dedication to public use. 152. NewYorlc City streets. 153. Mortgage lien on undivided inter- est. MORTGAGES ON LEASEHOLD ESTATES. 154. Lien on lease and renewals. 155. Liability of mortgagee for rent. 156. Redemption by mortgagee from default of mortgagor. 157. The giving of a mortgage on a lease. MORTGAGES BY RAILROAD COMPANIES. 158. After acquired rolling stock. 159. After acquired real estate. LIEN UPON EMBLEMENTS. 160. A mortgage is a lien upon grow- ing crops. ' 161. Use of emblements by mortgagor. 162. Remedies of mortgagee. 163. Growing crops and timber. 164. Nursery trees. 165. Rights of purchaser at foreclosure sale. WHAT ARE FIXTURES AS BETWEEN MORT- GAGOR AND MORTGAGEE. 166. General rule. 167. Time of annexation. 168. Tests. §169. The permanent character of the annexation. 170. Intention in making annexation. 171. Examples of what does not pass with the land. 172. Examples of what passes with the land. RULE AS TO FIXTURES BETWEEN LESSOR AND LESSEE. 173. As between lessor and lessee. 174. Structures erected by a lessee. CONFLICTING CLAIMS TO CHATTELS AF- FIXED TO MORTGAGED REALTY. 175. As against chattel mortgage. 176. If chattels affixed to land. 177. A curious question. 178. The intention of the owner. 179. Character of annexation. 180. Examples. INJUNCTION TO RESTRAIN WASTE. 181. When injunction allowed. 182. Provision of the Code. 183. Who may apply for injunction. 184. Inadequacy of security. ^ 185. Insolvency of mortgagor. 186. Limitations of injunction. 187. General principle. ACTION FOR DAMAGES CAUSED BY WASTE. 188. Remedy of mortgagee against per- sons who have committed waste. 189. Intent to injure security. 190. Measure of damages. 191. Miscellaneous examples. LIEN OF A MOETGAGE ON A EIGHT OF ACTION FOE DAMAGES TO THE ESTATE. § 149. A mortgage carries with it the prior right to damages awarded for an injury done to the freehold, whereby the security has been impaired, especially where the debtor is insolvent. When § 150.] EXTENT OE THE LIEN. 101 damages are awarded for a public improvement, they arise from or grow out of the land, by reason of the injury which has diminished its value. In equity they are the land itself, for the award takes the place of the reduced value of the land.' The title to the land, to the extent of his lien, is in the mortgagee,' and he has an equitable lien on the award for the amount of his debt.' If an award be made to the mortgagee for lands taken for a pubUc improvement, the lien of the mortgage is thereby transferred to the award ; it cannot be foreclosed as against the lands thus taken, and the proper remedy is by a regular proceeding to obtain the award." But if no award is made to or received by the mortgagee, he cannot bring an action against the public to obtain the award, and, his lien not being destroyed or taken away, his only remedy is by fore- closure.' The lien of a mortgage has been held to extend to damages award- ed to the owners of land for depreciation of the value of mill prop- erty, occasioned by the abandonment of a canal.' Where land, under the charter of a railroad was condemned for the use of the company, and the mortgagor alone was made a party to the proceeding, it was held that the mortgagee was entitled to have the sum awarded applied toward the payment of the mortgage and the rest of the land held for the balance.' § 150. The remedy of mortgagee confined to the award. — Where, by a regular proceeding, title to mortgaged land is taken for public use, the municipal corporation acquiring such title cannot thereafter be foreclosed, for the reason that it holds by a right-para- mount to the mortgage, and the only remedy remaining to the mort- gagee must be against the award or against the person who has col- lected it." The title of the mortgagor to the land being extinguished ' Bank of Auburn v. Roberts, 44 N. ^Shepard v. The Mayor, etc., of New Y. 192, affi'g s. c. 45 Barb. 407. York, 13 How. 286 ; Hooker v. Martin, ^ Stow V. Tifft, 15 Johns. 458. 10 Hun, 302 ; Colehour v. State Savings ' Bank of Auburn v. Roberts, 44 N. Y. Institution, 90 111. 152. 192, affi'g s. c. 45 Barb. 407; Astor v. ^ Sherwood v. The Mayor, etc., of New Hoyt, 5 Wend. 603 ; Gimbel v. Stotle, 59 York, 11 Abb. 347. Ind. 446 ; Park Commissioners v. Todd, * Bank of Auburn v. Roberts, 44 N. 112 111. 379 ; Wood V. Westborough, 140 Y. 192, affi'g 45 Barb. 407. Mass. 403 ; contra under special statute. ' Bright v. Piatt, 32 N. J. Eq. 362 ; Whitney v. City of New Haven, 45 Conn. Wheeler v. Kirtland, 12 C. E. Gr. (N. J.) 303 ; City of Norwich v. Hubbard, 22 534 ; Wood v. Westborough, 140 Mass. Conn. 587 ; Mills v. Shepard, 30 Conn. 403. loi. ' Hooker v. Martin, 10 Hun, 302 ; 102 MORTGAaES OF EEAL PKOPEKTY. [§§151-152. by the proceedings of eminent domain, the purclaaser under a subse- quent foreclosure of the mortgage acquires no title either to the land taken or to the award representing it, which may still be collected of the mortgagee if necessary to satisfy his demand, and the balance after payment of the debt is the property of the owner of the equity of redemption.' In Slicer v. Hyde Pa/rk (55 Yt. 481), it was held that a mortgagee of a farm is not entitled to a decree of foreclosure against a town as to its interest in a highway, although it was laid through the mort- gaged premises after the execution of the mortgage ; the damages were paid to the mortgagor, no notice was given to the mortgagee, and the property was worth less than the debt, for the reason that the town did not acquire the title to the highway, but the people only secured an easement. § 151. Dedication to public use. — While a mortgagee cannot be bound by a donation of a portion of the mortgaged property for a public use made by the mortgagor without his consent, still he may be bound by his express consent thereto by acts equivalent to a posi- tive donation or by way of estoppel, and his consent may sometimes be implied from his making no objection or by his subsequent acts.' Thus, where lands covered by a mortgage were in part afterward laid out by the mortgagor as a public street and occupied and treated as such by the municipal authorities, and subsequently the mortgagee released part of the premises adjoining the street and described it as bounding on the street, it was held that the lands lying in the street were, as against the mortgagee, subject to the public rights acquired by the dedication.' § 153. New York City streets. — The terms of the statutes regu- lating the opening of streets and avenues in the city of New York show that the report of the commissioners is not to be conclusive as to the persons entitled to the damages to be awarded, because it is provided that, even after payment to the person named in the award, the rightful claimant of the damages may recover them of the per- son thus paid, and further, that before the person named in the award can recover the amount thereof of the city, he must prove Matter of opening Eleventh Avenue, 8t ' Home Ins. Co. v. Smith, 28 Hun, N. Y. 437, 453 ; Home Ins. Co. v. 296, 301. Smith, 28 Hun, 296, 300 ; Slicer v. Hyde ' Smith v. Heath, 102 111. 130. Park, 55 Vt. 481. ' Vreeland v. Torrey, 34 N. J. Eq. 312. §§ 153-154. J EXTENT OF THE LIEN. 103 not only the report of the commissioners, but his right and title to receive the same.' The final report of the commissioners, when confirmed by the court, is conclusive so far as to determine the value of the property taken, and to preclude all persons from thereafter making any claim to the land, their exclusive remedy being against the award.^ The ascertainment of the names of the persons whose lands are taken, and to whom damages are to be paid, is merely incidental to the main purpose, which is for the guidance of the city authorities and the protection of the city. The city will be justified in paying the per- son named in the award, unless it has received notice of an adverse claim ; but after such notice, and certainly after suit commenced for the award, by a mortgagee or other person, the city would pay at its peril ; and in the case of conflicting claims the city may com- pel an interpleader, and thus relieve itself from embarrassment or double responsibility.' § 153. Mortgage lien on undivided interest. — The Code pro- vides, with reference to actions to partition real estate, that " the plaintiff may at his election make a creditor, having a lien on an un divided share or interest in the property, a defendant in the action. In that case he must set forth the nature of the lien, and specify the share or interest to which it attaches. If partition of the property is made, the lien, whether the creditor is or is not made a party, shaU thereafter attach only to the share or interest assigned to the party upon whose share or interest the lien attached ; which must be first charged with its just proportion of the costs and expenses of the action, in preference to the lien." * MORTGAGES ON LEASEHOLD ESTATES. § 154. Lien on lease and renewals. — When a leasehold interest is mortgaged, the mortgagee acquires a lien upon the entire rights of the mortgagor under the lease, including the covenants of renewal. If the mortgagor obtains a renewal of the lease, either because of the covenants contained in it, or from his being in possession as tenant, or from his having such particular interest, such renewal inures to ' Rev. L. of 1813, ch. 86, §§ 183, 184, ^gpears v. Mayor, etc., of N. Y., 87 vol. 2, p. 418 ; Spears v. Mayor, etc., of N. Y. 359, 374 ; Barnes v. Mayor, etc., N. Y., 87 N. Y. 359, 373. of N. Y., 27 Hun, 236 ; Hatch v. Mayor, 'Matter of Munson, 29 Hun, 325, etc., 82 N. Y. 436. 337. * Code of Civ. Pro. § 1540. 104 MOETaAGES OP EBAL PROPERTY. [§ 155. the benefit of the mortgagee, and his lien attaches to it ; ' and the mortgage Hen extends to a right of renewal even if no renewal has been obtained.^ This is particularly so in the case of church leases, leases from trustees of charities, or from other persons where there is but a slight probabihty of the renewal being refused, if the tenant consents to pay the increased rent which the landlord may think proper to require.' Upon a similar equitable principle, it is also the rule that where a mortgagee, by reason of being in possession, obtains a renewal of a lease in his own name, it is treated as a continuance of the old lease, and he must hold it for the mortgagor, and subject to his right to redeem." A mortgage given by a lessee upon the leasehold interest does not give the mortgagee any right to the rents coming from the tenants of the mortgagor." The mortgagor cannot confess away or release the rights of the mortgagee in the premises ; and if the lease contains a clause for for- feiture in case of waste, the mortgagee's rights cannot be divested without his consent or judicial decree." § 155. Liability of mortgagee for rent. — The mortgagee of a term, who has never taken possession, is not an assignee of the whole term or liable for the rent, the mortgage being but a security, and the legal title remaining in the mortgagor.' A naked right and a beneficial enjoyment are distinguishable,' and it is only where a mort- gagee takes possession that he has the estate cum onere, and becomes liable as assignee upon the covenants contained in the lease." But a mortgagee who forecloses and purchases the property, and goes into possession, is liable for rent, and may be dispossessed for non-payment." 1 Slee V. Manhattan Co., i Paige, 48 ; 5 Id. 603 ; Evertson v. Sawyer, 2 Id. Jiolridge v. Gillespie, 2 Johns. Ch. 30; 507; Johnson v. Sherman, 15 Cal. 287; MoUer v. Duryee, 21 W. Dig. 458. Broman v. Young, 35 Hun, 173, 180. ' MoUer v. Duryee, 21 W. Dig. 458 ; ' Demainville v. Mann, 32 N. Y. 207. Sheehan v. Mayer, 41 Hun, 6og. • ° Tallman v. Brassier, 65 Barb. 369 ; ' Phyfe V. Warden, 5 Paige, 268, and Astor v. Miller, 2 Paige, 68 ; Eaton v. cases cited ; Gibbes v. Jenkins, 3 Sandf. Jaques, Doug. 454 ; Walton v. Cronly, Ch. 130, and cases cited ; Wunderlich v. 14 Wend. 63 ; Broman v. Young, 35 Reis, 31 Hun, I, and cases cited ; Mitchell Hun, 173, 180; Booth v. Kehoe, 71 N. y. Reed, 61 N. Y. 123. Y. 341, 343. * Holridge v. Gillespie, 2 Johns. Ch. 30. '° People ex rel.Grissler v. Stuyvesant, ' Polhemus v. Trainer, 30 Cal. 685. 3 N. Y. Sup. (T. & C.) 179 ; s. c. i Hun, " Allen V. Brown, 60 Barb. 39. 102 ; s. c. afB'd 58 N. Y. 323 ; Post v. ' Astor V. Miller, 2 Paige, 68 ; Walton Kearney, 2 N. Y. (2 Comst.) 394 ; The V. Cronly, 14 Wend. 63 ; Astor v. Hoyt, State v. Martin, 14 Lea (Tenn.) 92. §§ 156-157.] EXTEKT OP THE LIEN. 105 § 156. Redemption by mortgagee from default of mort- gagor. — It is provided by Laws of 1842, c. 240, that, in case the mortgagor of a term be removed from the premises by summary proceedings under the statute for non-payment of rent, if the unex- pired term of the lease under which the premises are held, exceed five years at the time of issuing the warrant upon such proceedings, any mortgagee of the lease, or of any part thereof, who shall not be in possession of the demised premises, who shall, within one year after the execution of such warrant, pay all rent in arrear, all costs and charges, and perform all the agreements which ought to have been performed by the first lessee, shall not be affected by such recovery. Whenever any half year's rent or more is due from the lessee, and the landlord proceeds by ejectment to recover the possession of the property, the time within which the lessee, his assigns or personal representatives, may redeem, by paying the rent in arrear and costs and charges, is limited by statute to six months after possession of the demised premises shall have been taken by the landlord under any execution issued upon a judgment obtained by him in any such action of ejectment, after which time the. lessee and his assigns, and all other persons deriving title under the said lease from such lessee, are barred and foreclosed from all relief or remedy in law or equity.' But in order to bar a mortgagee of the lessee from a right to redeem, the writ of possession must be executed by an open, visible, and notorious change of possession, and unless such possession is given it is not sufficient to set running the six months' limitation." § 157. The giving of a mortgage on a lease is not a violation of a covenant not to assign, inasmuch as a mortgage of land in this State is not a grant of the legal title or of the possession, but a mere security.' Neither is such a covenant violated by a sale under a judg- ment of foreclosure. Such a sale is a judicial sale in a hostile pro- ceeding, a sale m mvitum, and such sales are held not to violate this covenant.* Such covenants are restraints which courts do not favor. '2 R. S. 506, §§ 33, 34; Witbeck v. 406; Piatt on Leases, 258 ; Doe v. Hogg, Van Rensselaer, 64 N. Y. 27. 4 Dowl. & Ry. 226 ; Doe v. Beavan * Newell V. Whigham, 102 N. Y. 20 ; 3 Manl. & Sel. 353. 23 W. Dig. 543 ; Keeler v. Keeler, 102 "Riggs v. Purcell, 66 N. Y. 193, 200; N. Y. 30. Doe V. Carter, 8 Term. R. 57 ; Jackson ^Riggs V. Purcell, 66 N. Y. 193, 200 ; v. Corliss, 7 Johns. 531 ; Smith v. Put- Taylor's Landlord and Tenant (2d ed.) nam, 3 Pick. 221. 106 MOETaAGES OF EEAL PEOPERTT. [§§ 158-159. They are regarded with the utmost jealousy, and very easy modes have always been countenanced for defeating them.' MOETGAGES BT EAILEOAD COMPANIES. § 158. After acquired rolling stock. — The question as to whether the rolHng stock of a railroad, that is to say, the cars aiid locomotives used with the road, are fixtures, so as to pass under a mortgage of the track or roadway, has been much discussed, and though there have been conflicting decisions in this State, the Commission of Appeals has put an end to the controversy by deciding in Soyle v. Plattsburgh & Montreal E.E. Co. (54 N. Y. 314), that the cars used on a rail- road are personal property, and do not pass with a mortgage of the real estate. The rolling stock of a railroad is originally personal in its character ; it is subservient to a mere personal trade, the transpor- tation of freight and passengers, and the track exists for the use of the cars rather than the cars for the use of the track. There is no annexation, no immobihty from weight, there is no localization in use. The only element on which an argument can be based to support the character of realty is adaptation to use with and upon the track. Even in respect to this were the same contrivances adopted by a tenant for use in his trade upon leased lands, his right to remove both cars and track would be beyond question.' It being established that rolling stock is personal property, it would seem to follow that, even if rolling stock be described in a mortgage, the mortgage would not cover such cars as might subsequently be ac- quired by the road, though as to this point a contrary view has been taken in a number of cases outside of this State." § 159. After acquired real estate. — ^Neither a man nor a corpo- ' Church V. Brown, 15 Ves. 265 ; Blen- stock passes with the mortgage of the cow V. Bugby, 2 W. Black. 766 ; Tay- real estate, The Farmers' Loan & Trust lor's Landlord and Tenant, §§ 402, 403 ; Co. v. Hendrickson, 25 Barb. 484. 2 Piatt on Leases, 250. ' Coe, trustee, v. Pennock, 6 Am. Law ^ Per Johnson, C, in Hoyle v. Platts- Reg. 27 ; s. c. 23 How. U. S. 117 ; Phil- burg & Montreal R.R. Co., 54N. Y. 314, lips v. Winston, i B. Mon. 431 ; Pierce affi'g s. c. 51 Barb. 45 ; s. c. sub nom. v. Emery, 32 N. H. 484 ; Buck v. Sey- Bement v. Plattsburgh & Montreal R.R. mour, 46 Conn. 146 ; Morrell v. Noyes, Co., 47 Id. 104 ; Stevens v. The Buffalo 56 Me. 458 ; Shaw v. Bill, 95 U. S Rep. & N. Y. R.R. Co., 31 Id. 590; Beards- 15 ; Philad., etc., R.R. Co. v. Woelpper, ley V. The Ontario Bank. 31 Id. 619 ; 64 Penna. St. 366; Walker v. Vaughan, Minnesota Co. v. St. Paul Co., 2 Wall. 33 Conn. 577 ; Williamson v. N. J. South. (U. S.) 609, and note ; Pierce v. Emery, R.R. Co., 15 Alb. L. J. 503, and cases 32 N. H. 484. Contra, that the rolling cited. § 159.] EXTENT OF THE LIEN. 107 ration by general terms only can mortgage so far as subsequent pur- chasers and creditors are concerned, everytMng that it may there- after acquire through all time ; for this would be a mere pledge of its capacity of acquisition, and would afford no sort of indication of what was to pass under the instrument. A distinction is made by some of the authorities between mortgages of future acquisitions executed by railroad companies and similar instruments made by natural persons. It is said that a mortgage of a railroad and its future property will carry all after-acquired property appurtenant to and necessary for building and operating the road, and carrying out the purposes for which it was created, while a similar instrument will be inoperative if executed by a private person. This is true if the mortgage ex- ecuted by the private person is upon a specified piece of property, without reference to any accretion or addition to it ; because there can be no accretions of property appurtenant to the person of the mort- gagor ; but it is untrue, if the individual has mortgaged his business and the property there appurtenant to, or afterward to grow out of and be added by accretion to the particular business that is pledged. Thus, a natural person equally with a corporation can execute a valid mortgage of a ship and the profits of its voyage, or of a factory and the machinery then in it and to be placed in it, or of a farm and the products to be produced upon it, or a flock of sheep and its natural increase and future-grown wool. And so a railroad company can ex- ecute in general terms a valid mortgage of its roadbed and franchises, and all of its real and personal property then owned or thereafter acquired : provided the future acquisitions be such as belong naturally to the business of constructing and maintaining the road and its pri- mary end as a common carrier of passengers and freights. The things which may be deemed essential or useful, and therefore appurtenant to the great work of building and operating a railroad, will frequently be more extensive and varied in their character than those which can properly be regarded as accretions to the business of a private person ; but the principle is the same, and where the facts concur, the law must be the same as to both.' A mortgage of all the railroad of said company " as the same is now or may be hereafter located or constructed, and all the lands that are ' Per Chalmers, J., in Mississippi (Miss.), 24 Alb. L. J. 269 ; Elwell v. Valley Railway Co. vs. Chicago, St. Grand St. & Newtown R.R. Co., 67 Louis & New Orleans Railway Co. Barb. 83. 108 MOETGAGBS OF EEAL PEOPEETT. [§ 160. or may be included in the location of the road or required by said company for the purpose of the railroad," etc., covers lands purchased after making the mortgage if within the lay-out of the road, or need- ed for the purposes of the road, but not otherwise.^ Where a railroad is mortgaged by a description which minutely designates the line of road, specifying the land on which it is located necessary for the use and occupation of the road, its rolling stock, etc., and adds, "and all rights, privileges, franchises, and property whatsoever, now belonging or to be acquired by said," etc., this will not include property owned by the corporation not used or to be used iu connection with its railroad.^ Such a mortgage does not cover the future earnings of the road.^ A mortgage given by a railroad will not override a lien given for purchase money on property thereafter acquired, though such lien be not recorded." LIEN UPON EMBLEMENTS. § 1607 A mortgage is a lien upon growing crops and emble- ~meSEs^en though they be sown after its execution, and they will pass to a purchaser upon foreclosure as against either the mortgagor or his vendee or lessee. ° This appears to be in accordance with the principle that where the determination of an estate depends upon the voluntary act of the owner thereof, or where the estate is defeasible by a right paramount, or by a forfeiture or breach of condition de- pending on his own act or omission, he who has the paramount right, or who enters for the forfeiture or breach of condition, is entitled to the emblements." By the common law, the payment of the mort- gage money at the time fixed upon by the parties was in the nature of a forfeiture of the estate by the mortgagor, and authorized the mortgagee to enter immediately and take the emblements ; but in equity he held them, as he did the land, only as security for the mort- ' Boston & N. Y. Air Line R.R. Co. v. Balcom, 6 Barb. 370 ; Sherman v. Wil- CofBn, 50 Conn. 150. lett, 42 N. Y. 146 ; Hamilton v. Austin, '•^ State V. Glenar, 18 Nev. 34 ; Morgan 36 Hun, 138 ; Maples v. Millon, 31 V. Donovan, 58 Ala. 242. Conn. 598 ; King v. Wilcomb, 7 Barb. ' Emerson v. European & N. A. R.R. 263, 267 ; Price v. Brayton, 19 Iowa, Co., 67 Me. 387 ; 24 Am. R. 39. 309; Adams v. Beadle, 47 Id. 439; * United States v. New Orleans R.R. Downard v. Groff, 40 Id. 597; Bryant Co., 12 Wall. 362. V. Pennell, 61 Me. 108 ; Montgomery v ' Lane v. King, 8 Wend. 584 ; Shep- Merrill, 65 Cal. 432. ard V. Philbrick, 2 Den. 174 ; Aldrich v. « Coke, Litt. 55. Reynolds, i Barb. Ch. 613 ; Gillett v. §§ 161-162.J EXTENT OP THE LIEN". 109 gage debt, and upon redemption he was bound to account for such emblements. Having the legal right, however, and the land and its products being a security to the mortgagee for his debt, a court of equity will not deprive him of his legal right to the emblements until the mortgage money and interest are fully paid.' Growing crops pass to the purchaser at the foreclosure sale in the absence of an express contrary agreement or waiver." § 161. Use of emblements by mortgagor. — Before foreclosure the mortgagor may lawfully use the mortgaged property in the usual and customary way without incurring hability. If the mortgaged property consists of agricultural lands, he may gather his crops or take the fruit of the trees growing upon it, or he may use the land for the rearing of trees, which he may dig up and sell. It is not ^aste for a mortgagor of agricultural lands to sell timber or to re- move or change fixtures, if done in good faith, in the usual course of good husbandry, and before foreclosure has been begun or before de- fault has occurred upon the mortgage. Nor is it waste for him to seU stone from open quarries or minerals from open mines, if done in the usual coui-se of such business, though the product removed may exceed the value of the remaining freehold.' After foreclosure is begun, the plaintiff may, if the security is in jeopardy, intercept, through the aid of a receiver, the rents or emblements, or both, upon the theory that the whole estate is pledged as security for .the debt, and that the creditor is immediately entitled to his money or the property pledged.' But in such a case a receiver is not entitled to recover for rents collected or emblements removed prior to the date of his appointment, his right being confined to subsequent rents and profits and to rents uncollected or emblements ungathered at the time of his appointment.^ The mortgagor may also be restrained by in- junction from removing fixtures, emblements, or the like." § 162. Remedies of mortgagee. — If the mortgagee is restrained from foreclosing by injunction, at the instance of the owner of the equity of redemption, and the growing crops are in the meantime removed, he is entitled to their value as an element of damage if there ' Aldrich v. Reynolds, i Barb. Ch, 613. ' Hamilton v. Austin, 36 Hun, 138, ^ Beckman v. Sikes, 10 Pacif. Rep, 142. (Kans.) 592 ; Smith v. Hague, 25 Kans. * Hollenbeck v. Donnell, 94 N. Y. 347 ; 246 ; Garanflo v. Cooley, 33 Kans. 137 ; Bank v. Arnold, 5 Paige, 40. 5 Pacif. Rep. 766 ; Kerr v. Hill, 27 W. ' Hamilton v. Austin, 36 Hun, 138. Va. 576. "See infra, §§ 181 to 187. 110 MOETGAGBS OF EEAL PEOPBRTT. [§§ 163-164. be a deficiency ; ' and while tlie mortgagor may, if he acts in good faith, cut timber upon the mortgaged premises, whenever he can do so without committing waste, and appropriate the timber thus cut to his own use, even though he be insolvent, he may be restrained by in- junction from doing so if it can be shown that the timber is being cut in a fraudulent and unconscientious attempt to strip the mortgaged premises of the timber thereon, with the intention of defrauding the mortgagee out of his security." And it is said that the mortgagee has a lien on timber fraudulently cut down and removed after the com- mencement of foreclosure.' § 163. Growing crops and timber. — Although growing crops will ordinarily pass to a purchaser at a foreclosure sale, they will not so pass if they are expressly excepted, on the principle that the mort- gaged premises may be sold in separate parcels, and a purchaser can only claim what has been offered and bid upon." While timber, after it is cut, becomes personal property, a mort- gage on real estate for part of the purchase money, which expressly provided that the mortgagee should have a lien upon timber cut on the premises, has been held valid as against a judgment creditor of the mortgagee who claimed under a debt antecedent to the mort- § 164. Nursery trees. — Emblements may partake of the charac- ter both of real and personal property ; as where the owner of land and another enter into the business of farming or of rearing young trees. In such a case, the plants, while affixed to the soil, are personal property as between the copartners, but a part of the realty as be- tween the owner and his subsequent mortgagee ; and it has been held, contrary, it is thought, to the general principle, that a mortgagee with notice, or a purchaser under the mortgage without notice, takes a lien upon or acquires an interest in the trees, subject to a settlement of the partnership affairs." Where a tenant has a right to crops he may mortgage them as per- sonal property.' ' Aldrich v. Reynolds, i Barb. Ch. ' Wood v. Lester, 2g Barb. 145 ; Chiles 613. V. Wallace, 83 Mo. 84. ' Ensign v. Colburn, 11 Paige, 503 ; * King v. Wilcomb, 7 Barb. 263. But Emmons v. Hinderer, 24 N. J. Eq. 39. see this case criticised in Omboney v. ' Higgins V. Chamberlain, 32 N. J. Eq. Jones, 19 N. Y. (5 Smith) 240. 566 ; Mosher v. Vehue, 77 Me. 169. ' Smith v. Jencks, i Den. 580 ; s. c. I * Sherman v. Willett, 42 N. Y. 146. N. Y. (i Comst.) 90. §§ 165-167.] EXTENT OF THE LIEN. Ill Where a mortgagor planted nursery trees and mortgaged them as cBattels, and the mortgage on the land was foreclosed, it was held that the pm-chaser at the foreclosure sale acquired title to the trees.' § 165. Rights of purchaser at foreclosure sale. — The mort- gagor's lessee is not entitled to crops growing on the premises as against a purchaser at a sale in foreclosure under the mortgage ; and the mortgagee becoming the purchaser, may maintain trespass against the lessee for taking and carrying away the crops.^ As between the mortgagor and a purchaser at the foreclosure sale under the mortgage, the manure belongs to the latter. The rules as between landlord and tenant do not apply." The manure of the cattle on the land is regarded as a fixture, and the same remedies ex- ist against removing it as would apply in case of the removal of a substantial part of the real estate.' WHAT AEB FIXTTIEES AS BETWEEN MOETGAGOE AND MOETGAGEE. § 166. General rule. — In determining whether chattels affixed to land or to erections upon land, will pass under a mortgage of the realty, the same rules will apply which control when similar questions arise between grantor and grantee, and whatever wiU pass by a con- veyance will also be bound by a mortgage." As in the case of a grant, the greatest rigor is exercised in favor of considering the prop- erty as realty, and as against treating it as personalty, and the less stringent rules which prevail as between landlord and tenant do not apply." § 167. Time of annexation. — It is immaterial as to whether the chattels are affixed to the land before or after the execution of the mortgage, and as a general rule they become bound by the mortgage whenever they become a part of the realty.' This rule is subject to ' Adams v. Boadle, 47 Iowa, 439 ; 29 inson v. Preswick, 3 Edw. 246 ; Main v. Am. R. 487. Schwarzwaelder, 4 E. D. Smith, 273 ; ' Lane v. King, 8 Wend. 584 ; 24 Am. Babcock v. Utter, 32 How. 439 ; s. c. i Dec. 105. Abb. App. Dec. 27 ; Union Bank v. Em- ^Chasev.Wingate, 68Me. 204; 28 Am. erson, 15 Mass. 159 ; Clove v. Lambert, R. 36. 78 Ky. 224. *Vehue v. Mosher, 76 Me. 469; 31 ^Snedekerv.Warring,i2N.Y. (2Kern.) Alb. L. J. 103.' 170 ; 2 Kent's Com. 343 et seq.; Day v. ^ Voorhees v. McGinnis, 48 N. Y. 278; Perkins, 2 Sand. Ch. 359 ; Climie v. Snedeker v. Warring, 12 N. Y. (2 Kern.) Wood, L. R. 3 Exch. 257 ; Maples v. 170 ; Bishop v. Bishop, 11 N. Y. (i Kern.) Millon, 31 Conn. 598. 123 ; Miller v. Plumb, 6 Cow. 665 ; Rob- ' Gardner v. Finley, 19 Barb. 317 ; 112 MORTGAGES OP EBAL PBOPEETY. [§ 168. some exceptions, and a mortgage on real estate will not always bind chattels which do not belong to the mortgagor or which have pre- viously been mortgaged as chattels ; ' neither will it bind personal property which has been annexed subsequent to the mortgage, if equities in favor of third persons require that it shall continue to be personal." A house or other addition or improvement of a permanent char- acter erected by the owner of the equity of redemption without any agreement with the mortgagor, becomes paft of the realty and passes with it to a purchaser under the foreclosure of the mortgage.' So, as between mortgagor and mortgagee, a frame building resting on wooden blocks laid on the ground, designed as an office in connection with a mill, but detached therefrom and intended by the mortgagor to be removed, is subject to the lien of the mortgage, although erected after the mortgage was executed, and its removal will be restrained by injunction.' The same rule was held to apply to a frame building erected on the mortgaged premises by the mortgagor's husband. ° One who buys mortgaged premises without actual knowledge of the mortgage, the mortgage being recorded, and puts betterments thereon, subjects them to the lien of the mortgage, and can have no compensation for them except from the surplus after the payment of the mortgage." § 168. Tests. — There are several tests in the form of general prin- ciples that will aid in the determination of questions as to what are fixtures : 1. The rule is quite uniform that to give to articles, personal in their nature, the character of real estate, the annexation must be of a permanent character. There are exceptions to this rule in those arti- cles which are not themselves annexed, but are deemed to be of the freehold from their use and character, such as millstones, fences, statuary, and the like. Snedeker v. Warring, 12 N. Y. (2 Kern.) ■ Sheldon v. Edwards, 35 N. Y. 279 ; 170; Ricev. Dewey, 54 Barb. 455 ; Cor- Ford v. Cobb, 20 N. Y. 344. liss V. Van Sagin, 29 Me. 115 ; Winslow '' Tifft v. Horton, 53 N. Y. 377. V. Merchants' Ins. Co., 4 Mete. 306; ' Matzon v. Griffin, 78 111. 477 ; Wood Sullivan v. Toole, 26 Hun, 203 ; Butler v. Whelen, 93 111. 153 ; Baird v. Jackson, V. Page, 48 Mass. (7 Mete.) 40 ; Curry v. 98 111. 78. Schmidt, 54 Mo. 515 ; Preston v. Briggs, ''State Savings Bank v. Kicheval, 65 16 Vt. 124; Powers v. Dennison, 30 Vt. Mo. 682 ; 27 Am. R. 310. 752 ; Pierce v. Goddard, 39 Mass. (22 ' Wright v. Gray, 73 Me. 297. Pick.) 359 ; Phinney v. Day, 76 Me. ' Wharton v. Moore, 84 N. C. 479 ; 37 83. Am. R. 627. §§ 169-170.J EXTENT OF THE LIEN. 113 2. A second test, but not so certain in its character, is that of adaptability to the use of the freehold. 3. A third test is that of- the intention of the parties at the time of making the annexation.' These are tests, knd valuable ones, but they cannot always be relied upon, and it would be difficult to frame any statement of principle, however elaborate, which would reconcile all of the cases. Each case stands upon its own special facts, and the indefiniteness of the law allows an ingenious judge to find reasons for administering in almost any case what the circumstances which surround it lead him to believe to be substantial justice. § 169. The permanent character of the annexation will always be an important element in determining whether the chattel becomes a part of the realty or not, and it will not be presumed to be the in- tention of a party to remove an article from a building when such removal could not be effected without injury to it. But this in itself will not be conclusive. § 170. Intention in making annexation. — In many cases the in- tention of the annexation is held to be more important than the char- acter of it. As an illustration of this principle, it may be mentioned that the keys of a house, which are not annexed to it at all, or the doors and blinds, which are affixed to it in such a way as to be capable of easy removal, are, beyond question, parts of the realty, the purposes of their use and the evident intention of the person who affixed them being controlling considerations. So a sun-dial and a monument, which were not affixed to land except as they were held in their places by their own weight and the weight of the pedestals on which they stood, were held to pass under a mortgage of the real estate." The question of intention enters into and makes an element in each case, and the circumstances are to be taken into account to show whether the erections were made for the permanent improvement of the freehold or the temporary purposes of trade. If, for example, machinery were put into a building for use with a water-power exist- ' Per Hunt, C. , in Voorhees v. Mc- and cases cited ; McRea v. Cent. Nat. Ginnis, 48 N. V. 278, 282, and cases Bank of Troy, 66 N. Y. 489. cited ; Potter v. Cromwell, 40 N. Y. 287, ^ Snedeker v. Warring, 12 N. Y. (2 Kern.) 170. 8 114 MOETGAGES OF BEAL PEOPEETT. [§ 171. ing upon the land/ or if it were attached at the time of the erection of the building,' it would form a part of the realty, and would pass with a mortgage of the land ; but if the same machinery were put into a barn, there. to be moved by a horse traversing in a circle around a beam, the presumption would be that the intention was to remove it, and that it retained its character of personalty/ § 171. Examples of what does not pass with the land. — In Cresson v. Stout (IT Johns. 116), spinning and carding machines in a mill, fastened to the floor by cleats, nails, and stout wooden pins, were held to be personal property. So in Yanderpoel v. Yam Allen (10 Barb. 157), machinery in a cotton-mill was secured to the building by cleats tacked to the floor to keep them level, and they were held to be fix- tures. So in Mwrdook v. Gifford (18 IT. Y. 28),' looms in a woolen factory, fastened to the floor, by screws to keep them steady, were adjudged to retain their character of personalty. So, also, machines resting upon the floor of a building by means of iron legs fastened to the floor by screws only for the purpose of steadying them when in use, and which, although of great weight, connected with shafting, and adapted for use and necessary in the business carried on in the building, can be removed without injury to the building, so that they may be used elsewhere, are not covered by the mortgage on the land.* A Baltimore heater, and an iron frame in the nature of a weather- vane fastened to the roof, both remain personal property notwith- standing their use with the land.' So, also, do gas flxtures which are simply screwed on to the gas-pipes of a building, and can be de- tached by unscrewing them ; and mirrors which are not set into the walls, but are put up after the completion of the building, being sup- ported by hooks or other supports driven in or attached to the wall, and which can readily be detached from these supports without in- terfering with or injuring the walls, form no part of the realty, and do not pass under a mortgage of the premises." So, a shingle ma- ehine standing on a box the size of the machine, made of four-inch ' Breese v. Bange, 2 E. D. Smith, 474. len v. Mooney, 130 Mass. 155 ; Winslow ' Laflin v. Griffiths, 35 Barb. 58. v. Merchant's Ins. Co., 4 Met. 306. ^ Farrar v. Chauffetete, 5 Den. 527, ' Harmony Building Association v. 531. Berger, 99 Pa. St. 320. * Hubbell V. East Cambridge Savings " McKeage v. Hanover Fire Ins. Co., Bank, 132 Mass. 447; McConnell v. 8r N. Y. 38; 37 Am. R. 471, affi'g 16 Blood, 123 Mass. 47 ; 25 Am. R. 47 ; Al- Hun, 239. § 173.] EXTENT OF THE LIEN. 115 plank about sixteen inches high, not framed, nor fastened to the floor, except that on one side there was a strip, so that it could not slip ; and a planing-machine, not fastened to anything, but held in its place by its own weight, have been held not to pass on the foreclosure of a mortgage on the land.' And a portable iron furnace for heating a church, standing on the cellar floor and held in position by its own weight, and capable of being detached with its pipes without injury to the building, is not subject to a mortgage on the building.^ An engine and boiler, steam-gauge, water-tank, steam-pump, and shafting, designed permanently to increase the value of a building for occupation as a manufactory, become subject to the lien of a mortgage on the land ; but this is not so as to machines not essential or espe- cially adapted to the use of the building as a manufactory." Machinery in a bedstead manufactory and grist-mill, consisting of a planing-machine, a machine for cutting screws, a turning-lathe, a circular saw and frame, and a boring-machine, which, though spiked to the floor, studs, and parts of the building, could be removed, and were in fact removed without difficulty, or injury to the building or machinery and used in another building, were held to be personal property as between the mortgagor and mortgagee of the land." § 172. Examples of what passes with the land. — ^As be- tween mortgagor and mortgagee platform scales fastened to sills laid upon a brick wall set in the ground for weighing stock and grain and intended for permanent use, are part of the realty.^ So are boilers, engines, shafts, and steam-pipe used for heating purposes, and attached to the freehold for its permanent improvement." The same principle includes engines, boilers, etc., used in a flour-mill, and per- manently fastened to the building which has its foundation in the ground, and they pass under the foreclosure of a mortgage which was a lien on the property previous to their annexation to it.' And, in general, when machinery is so attached as to show that it was designed for the permanent benefit of the freehold, it will pass with the land.' ' Wells V. Maples, 15 Hun, 90. ' Arnold v. Crowder, 81 111. 56 ; 25 ' Rahway Sav. Inst. v. Irving St. Bap. Am. R. 260. Church, 36 N. J. Eq. 61. * Quinby v. Manhattan Cloth & Paper » McConnell v. Blood, 123 Mass. 47 ; Co., 24 N. J. Eq. 260. 25 Am. R. 12 ; Winslow v. Merchant's ' Sands v. Pfeiffer, 10 Cal. 258. Ins. Co., 45 Mass. (4 Mete.) 306. 'Bremen v. Whitaker, 15 Ohio St. * Fullam V. Steams, 30 Vt. 443. 446. 116 MOETGAGES OF REAL PKOPERTT. [§§ 173-174. A kettle in a fulling-mill used foi* dyeing cloth, being set in brick- work, passed to the mortgagee of the mill.' An iron table weighing thirty-three tons, resting on brick founda- tions, and placed in a factory for the manufacture of plate glass, and adapted only for use in such factory, has been held to be bound by a mortgage of the real estate though it could be removed without injury to the realty.' Where a mortgagor of a mill, after making the mortgage, put into the miU a shingle-machine and apparatus attached to it, it was held to become a part of the freehold.' Mirrors set into the walls of a house at the time of its erection, and not merely hung upon hooks, are part of the land.' And hop- poles used in cultivating a farm are subject to the mortgage upon it.' EULE AS TO FIXTDEES BETWEEN LESSOE AlTD LESSEE. § 173. As between lessor and lessee, the rule as to what are fixtures is more favorable to the tenant than is the rule between grantor and grantee, or mortgagor and mortgagee. And where a tenant of a mortgagor afiSxes machinery or other fixtures to the mort- gaged property for a temporary purpose incident to his tenancy, he may remove them, though, as between mortgagor and mortgagee, the mortgage lien would attach to them.' But when the lessee makes a mortgage of his leasehold interest, his rights as between him and his mortgagee must be tested by the principles which obtain between mortgagors and mortgagees of real estate.' § 174. Structures erected by a lessee on the leased property, in such a way as to be capable of removal, do not come within a sub- sequent mortgage of the premises, although the lessee neglects to remove them during the term and accepts a renewal of the lease from the mortgagor.' Where a tenant puts machinery upon the demised premises which were incumbered by a mortgage, and afterward purchased the prop- ' Union Bank V.Emerson, 15 Mass.isg. "Kelly v. Austin, 46 111. 156; Globe 'Smith Paper Co. v. Servin, 130 Mass. Marble Mills v. Quinn, 76 N. Y. 23. 51. 'Day V. Perkins, 2 Sand. Ch. 359; 'Corlies v. McLagin, 29 Me. 115. Shuart v. Taylor, 7 How. 251 ; Merritt * Ward V. Kilpatrick, 85 N. Y. 413 ; v. Judd, 14 Cal. 59 ; Walker v. Sherman, compare McKeage v. Hanover Fire 20 Wend. 636. Ins. Co , 81 N. Y. 38 ; 37 Am. R. 471. 'Kerr v. Kingsbury, 39 Mich. 150 ; 33 'Sullivan v. Toole, 26 Hun, 203. Am. R. 362. § 174. J EXTENT OF THE LIEN. 117 erty subject to such mortgage, and the mortgage was subsequently foreclosed, it was held that the right to remove the machinery was not extinguished by the merger of the lease in the fee, although the machinery was so annexed that, as between vendor and vendee, it would be part of the realty. The estate which the tenant had was merged in the estate in fee. But the ownership of the chattels, which was vested in him before the conveyance of the land, was separate from and independent of the lease, and was not derived from the lessor. The chattels were not a part of the inheritance. This own- ership was not merged, because it was not carved out of the fee, and the doctrine of merger did not apply. The machinery did not be- come a part of the fee in the absence of any evidence of intention on the part of the owner that the character of the property should be changed.' Trade fixtures set up by partners on realty owned in undivided interests by the individuals who composed the partnership, the firm having only the use of it, though fastened by screws and bolts, were held not to be covered by a mortgage on the land as against a cred- itor of the firm claiming under a bill of sale for a partnership debt. It was said by Cooley, J. : " JSTo doubt had the real estate been part- nership property, fixtures attached by the partners might have become part of it."" A mortgagee cannot hold as a fixture an embossing-press owned and put into a building by a lessee of the mortgagor.' In this case the press weighed about 5,000 pounds, and had no other substantial attachment to the realty than its weight.* "Where a tenant adds fixtures to mortgaged real estate, and mort- gages them as chattels, and afterward surrenders the term, this does not effect such a merger as will defeat the claims of the owner of the chattel mortgage.' A tenant at will of the mortgagor who adds fixtures to the mort- gaged property acquires no right to remove them that would not belong to the mortgagor, and the rules as to fixtures which prevail between mortgagor and mortgagee have application." ' Globe Marble Mills Co. v. Quinn, 76 ' Pope v. Jackson, 65 Me. 162. N. Y. 23. See contra, Jones v. Detroit * Id. Car Co., 38 Mich. 92 ; 31 Am. R. 314 ; 'London & Westminster Loan & Dis- Cullinick v. Swindell, 3 L. R. Eq. 249 ; count Co. v. Drake, 6 Com. B. N. S. Frankland v. Moulton, 5 Wise. 16 ; Pres- 798. ton V. Briggs, 16 Vt. 124. ' Clary v. Owen, 15 Gray (Mass.) 522 ; "Robertson v. Corsett, 39 Mich. 777. Hunt v. Bay State Co., 97 Mass. 279. 118 MORTGAGES OF EEAL PEOPEKTY. [§§ 175-177. CONFLICTING CLAIMS TO CHATTELS AFFIXED TO MOETGAGED EEALTT. § 175. As against chattel mortgage. — If, after the chattels are affixed to the land, a mortgage of the real estate is executed, and subsequently the chattels are mortgaged as personal property, the question as between the mortgagee of the land and the mortgagee of the chattels will be as to whether, when the chattel mortgage was executed, the property covered by it was real or personal estate.' But if the chattel mortgage were executed before the mortgage on the land, the mortgagee of the land having notice of the prior inciun- brance, the act of the parties in treating the property as personal would, as between them, make it so." So a mortgage of growing trees would create a valid lien upon them, and upon forfeiture of the condition of the mortgage, they would, in law, be severed from the land." So, too, where a mortgage of real estate was executed subse- quently to the making of an agreement by which a third person be- came a partner with the mortgagor in the business of nurserymen, it was held that such third person might enforce the partnership right to nurse the trees and shrubs planted until fit for market, as against a purchaser with notice under the foreclosure of the mortgage.* And the priority of the lien of a chattel mortgage upon a frame building subsequently removed by the mortgagor to and upon other lands, is not defeated or affected by a subsequent mortgage upon such other lands given by the same mortgagor to a mortgagee having full knowledge of the prior chattel mortgage.* § 1 76. If chattels affixed to land become bound by a mortgage of the real estate, they cannot be removed except by consent of the mortgagee, who may restrain their removal or destruction by in- junction, even as against the owner of the equity of redemption, if such removal will render his security inadequate or precarious.' The mortgagee may also maintain an action against a wrong-doer who re- moves such fixtures, and that either before or after foreclosure, and whether he is in possession or not.' § 177. A curious question was presented in KelseyY. Lyon (97 ' Vanderpoelv.Van Allen,ioBarb.i57. ^ King v. Wilcomb, 7 Barb. 263. But ' GrifEn v. Allen, not reported, but see Thomas v. Vinton, I2i Mass. 139. cited in Clinton's Digest ; Voorhees v 'Simons v. Pierce, 16 Ohio St. 215. McGinnis, 46 Barb. 242. ' Robinson v. Preswick, 3 Edw. 246. * Bank of Lansingburgh v. Crary, i ' Laflin v. Griffiths, 35 Barb. 58 ; Van Barb. 542. Pelt v. McGraw, 4 N. Y. (4 Comst.) no. § 178.] EXTENT OF THE LIEU". 119 N. T. 629), wliicli was an action for the conversion of certain machin- ery in a planing-mill. Plaintiff claimed title under a chattel mort- gage from one Matthias. Matthias had a mortgage upon the premises upon which the planing-mill was located. The mortgagors executed to him a bill of sale of the personal property in the mill, not including the machinery in question, which they considered as part of the realty, and put him in possession of the real estate. He subsequently foreclosed his mortgage, and bid in the property. Thereafter he exe- cuted the chattel mortgage. The real estate was afterward sold upon foreclosure of a prior mortgage held by defendant, who became the ■purchaser, and eutered into possession. Finch, J., said : " The plain- tiff's title to the machinery was dprived from the chattel mortgage of Matthias, and is dependent upon it. If that machinery was so an- nexed to the realty as to become parcel of it, Matthias acquired title by the foreclosure of his real estate mortgage, but subject, neverthe- less, to the prior mortgage, the foreclosure of which cut off and destroyed his .lien and resulting title. The appellant avoids this diffi- culty only to encounter another. He argues that the machinery was personal property, but if so, Matthias got no title by foreclosure of his real estate mortgage and never acquired one in any other way." § 178. The intention of the owner in affixing chattels to the freehold is frequently held to be controlling. Thus, where a com- bined boiler and engine of six-horse power, standing on wheels six inches in diameter, the wheels resting on the ground and not in any way annexed to the building, was placed in a tub manufactory, and a prior mortgagee of the land claimed a Ken upon the boiler and en- gine, and a subsequent holder of a chattel mortgage also claimed such lien, it was held to be erroneous to direct a jury to find that the chat- tel mortgagee was entitled to them. It was said by the General Term of the Fifth Department that the court should have submitted the question to the jury as to whether it was the intention of the owner of the property to permanently attach and use the boiler and engine with the premises, and that, if he did sOj they became fixtures, and subject to the lien of the mortgage upon the real estate. The method of attaching them, whether by their mere weight or by screws or nails or masonry, was to be regarded as material only as evidence bearing on the question of intention.' 1 Hart V. Sheldon, 34 Hun, 38. Citing v. McGinnis, 48 N. Y. 278 ; Potter v. TifEt V. Horton, 53 N. Y. 377 ; Voorhees Cromwell, 40 N. Y. 287 ; Winslow v. 120 MORTGAGES OF EEAL PEOPEETY. [§ 179. Where a chattel mortgage for the purchase money of a steam boiler was takeu, and the boiler was afterward attached to the freehold, it was held that the chattel mortgage itself could be resorted to as evi- dence of the intention of the parties to have it remain personal prop- erty.' Boilers and engines, not attached to the realty, although in a shed which would have to be removed in order to take away the former, and machines fastened to the floor by cleats, screws, and nails, and connected by the belting to the shafting, are personal property as be- tween a mortgagee of the land and a mortgagee of the machinery. " The later decisions establish that machines may remain chattels for all purposes, even though physically attached to the freehold by the owner, if the mode of attachment indicates that it is merely to steady them for their more convenient use, and not to make them an adjunct of the building or soil." ' § 179. Character of annexation. — The distinction between cases where the chattels may continue to be personal property after being affixed to the land and where they may not, seems frequently to rest upon their essential character, and whether they can be removed without serious damage to the freehold, or substantially destroying their own quality and value.* If they can be so removed, they will continue personal if the rights of third persons require, even though as between the mortgagor and mortgagee they would pass with the land ; but if they cannot be removed without substantial injury to the real estate or to themselves, they cease to be personal, and become real estate, hable to the burdens which rest upon the land and subject to be transferred vnth it. If the rights of third persons are invaded by this change of the character of the property, they must seek their remedy against those who wrongfully converted the personal into real property.* Merchant's Ins. Co., 4 Met. 306 ; Sands ^ Carpenter v. Walker, 140 Mass. 416 ; V. Pfeiffer, 10 Cal. 258 ; Hill v. Went- 33 Alb. L. J. 318 ; McConnell v. Blood, worth, 28 Vt. 428 ; Harris v. Haynes, 34 123 Mass. 47 ; Hubbell v. East Cam- Vt. 220 ; Sweetzer v. Jones, 35 Vt. 317 ; bridge Sav. Bank, 132 Id. 447 ; Maguire FuUam v. Stearns, 30 Vt. 443 ; Voorhis v. Park, i N. E. Rep. 750. V. Freeman, 2 Watts & Sergt. (Pa.) ^ Ford v. Cobb, 20 N. Y. 344 ; Tlfft 116 ; Pyle v. Pennock, Id. 390. v. Horton, 53 N. Y. 377 ; 13 Am. R. 537 ; 1 Kinsey V. Bailey, 9 Hun, 452 ; Eaves Sisson v. Hibbard, 75 N. Y. 542, affi'g V. Estes, 10 Kan. 314 ; Tibbetts v. 10 Hun, 420. Moore, 23 Cal. 208 ; Davenport v. * Voorhees v. McGinnis, 48 N. Y. Shauts, 43 Vt. 546 ; Sisson v. Hibbard, 278 ; Fryatt v. The Sullivan Co., 5 Hill, 75 N. Y. 542, affi'g 10 Hun, 420. 116 ; Pierce v. Goddard, 22 Pick. 559. § 180. J EXTENT OE THE LIEN. 121 § 180. Examples. — Where a chattel mortgage was executed on fixtures prepared to be attached to a building, as essential parts of it, and which were thereafter so attached, the lien of the chattel mort- gage was held to be subordinate to a mortgage afterward given on the land.' But where an engine was buUt for a mill, and before it left the owner's shop a mortgage was taken on it with a stipulation that it might be removed at any time, it was held that the engine con- tinued to be personal property as against a previous mortgage of the land.'' In a similar case where the mortgage on the real estate was executed after the machinery was affixed to the real estate, the mortgagee of the land having no notice of the chattel mortgage, it was held that the machinery was bound by the mortgage of the land.* And where a boiler was sold under an agreement that the title to it should remain in the vendor until payment, and it was then placed by the vendee in a machine-shop and so annexed to the realty as to become part of it, it was held that the lien of a subsequent mortgage of the real estate attached to it.* Machinery so attached to the mortgaged premises as to become part of it, becomes subject to a mortgage thereon even against a partner of the mortgagor who paid half of the cost under an agreement with the mortgagee that it should be treated as personalty.' If one erect a building for his own use upon the land of another by virtue of a parol license from the owner with privilege of re- moval, the lien of a subsequent mortgagee of the land wiU attach to it.' And the Hen of a prior mortgagee will also attach to it.' In a case where machinery was attached to a building in such a way as to show that it was designed to be permanent, and such an- nexation was made by the owner with the consent of the owner of a chattel mortgage thereon, such chattel mortgage, though duly filed and recorded, was held to be inoperative as against a subsequent hona fide mortgagee of the real estate.* 1 Pierce v. George, io8 Mass. 78 ; ii ■* Southbridge Savings Bank v. Exeter Am. R. 310 ; Voorhees v. McGinnis, 48 Machine Works, 127 Mass. 542 ; Daven- N. Y. 278 ; Frankland v. Moulton, 5 Wis. port v. Shauts, 43 Vt. 546. But see I ; Trull V. Fuller, 28 Me. 545. Sowden v. Craig, 26 Iowa, 156. ' Eaves v. Estes, roKans. 314 ; 15 Am. ' Thomas v. Vinton, 121 Mass. 139. R. 345 ; Tifft V. Horton, 53 N. Y. 377 ; ^ Powers v. Dennison, 30 Vt. 752. 13 Am. R. 537; Crippen v. Morrison, 13 'Preston v. Briggs, 16 Vt. 124. Mich. 23. ° Bremen v. Whitaker, 15 Ohio St. ^ Bremen v. Whitaker, 15 Ohio St. 446. 446 ; Pierce v. George, 108 Mass. 78. 122 MOKTGAGES OF REAL PEOPEETT. [§ 181. Where a person, being in possession of machinery belonging to another, affixed it to and used it in connection with his saw-mill, which had previously been mortgaged, in a way so that it was capable of being removed without material injury to the building, and the owner of the machinery having no actual knowledge of the mortgage, and not consenting to the annexation any further than his assent could be inferred from the nature of the property and the use for which it was designed, it was held that the hen of the mortgage on the land did not extend to the machinery.' Where the owner of a sash and blind factory purchased and placed in it a moulding-machine and a planiug-machine to be used therein, which rested on the main floor of the building, one of which was bolted to the floor for greater flrmness in use, and the other of which was of sufficient weight to be steady without fastenings, and executed a mortgage on the real estate and afterward executed a chattel mort- gage upon the machines, it was held that the machines were not sub- ject to the mortgage of the real estate, but passed under the chattel mortgage." INJUNCTION TO EESTEAIN WASTE. § 181. When injunction allowed. — The owner of the equity of redemption is entitled to the possession and enjoyment of the mort- gaged property, even after the condition is said to be forfeited at law, but good faith will require him not to use the estate in such a way as to injure the security of the mortgagee. Where the security is ample he will ordinarily be allowed to enjoy the property in his own way,' but if it be scanty or doubtful, an injunction may be obtained by the mortgagee to restrain him from committing waste.' And even where the right to cut timber is specially reserved to the mort- gagor by the terms of the mortgage, he wiU be restrained if his con- duct shows that he is exercising such right in bad faith.' ' Cochran v. Flint, 57 N. H. 514. v. Keeney Settlement Cheese Associa- " Blancke v. Rogers, 26 N. J. Eq. 563 ; tion, 59 N. Y. 242 ; Dorr v. Dudderar, see Wells v. Maples, 15 Hun, 90. 88 111. 107 ; Nelson v. Pinegar, 30 111. 'Story's Eq. Jur. §915; King v. 473; Vanderslice v. Knapp, aoKans. 647; Smith, 2 Hare, 239 ; Ingell v. Fay, 112 Vandemark v. Schoonmaker, 9 Hun, 16. Mass. 451. ^ Ensign v. Colburn, 11 Paige, 503 ; * Brady v. Waldron, 2 Johns. Ch. 148 ; Emmons v. Hinderer, 24 N. J. Eq. 39 ; Selden v. Mann, 2 N. Y. Leg. Obs. 328 ; Ingell v. Fay, 112 Mass. 451 ; Penn. Ensign v. Colburn, 11 Paige, 503 ; Rob- Mut. Life Ins. Co. v. Semple, 38 N. J. inson v. Preswick, 3 Edw. 246 ; Brown Eq. 314. §§ 182-183.] WASTE. 123 § 182. Provision of the Code. — It is provided by the Code of Civil Procedure in the title affecting actions relating to real property, that " if, during the pendency of an action specified in this title, the defendant commits waste upon or does any other damage to the prop- erty in controversy, the court or a judge thereof may, upon the ap- phcation of the plaintiff, and due proof of the facts by affidavit, grant, without notice or security, an order, restraining him from the commis- sion of any further waste upon or damage to the property. Diso- bedience to such an order may be punished as a contempt of the court. This section does not affect the plaintiff's right to a per- manent or a temporary injunction in such an action." ' § 183. Who may apply for injunction. — ^Where a mortgagee is in possession, he may be stayed by injunction from committing any act which would injure the estate of the mortgagor.^ So, too, where a mortgage is a Ken on two parcels of land, or where a person not in possession is a surety for the mortgage debt, an injunction may be procured by any person interested in the preservation of the security afforded by the estate primarily liable for the debt, which will restrain the person in possession of that estate from diminishing its value.^ This latter proposition may, perhaps, be received with some caution, for Chancellor Kent, in Brumley v. Fcmning (1 Johns. Ch. 501), stated it to be the rule that a mortgagor who has sold his equity of redemption without taking any indemnity against his bond, cannot have an injunction against his vendee to stay waste on the ground that he will be answerable for what the land may fail to satisfy of the mortgage debt. The committing of waste may be restrained at the suit of any per- son having an interest to protect, including a surety for the mortgage debt, or one whose property is secondarily liable for its payment.* After a sale pursuant to a judgment of foreclosure, but before the delivery of the deed thereunder, the court may, upon the application of the purchaser, restrain the mortgagor who remains in possession from removing machinery claimed by the purchaser to constitute a part of the realty. But the court should not in granting such injunction in- sert phrases in the order which might be construed to impose a per- petual restraint upon the mortgagor from asserting a right to the ' Code of Civ. Pro. § i68i. = Johnson v. White, ii Barb. 194. ^ Brady v. Waldron, z Johns. Ch. ■'Johnson v. White, 11 Barb. 194; 148. Knarr v. Conaway, 42 Ind. 260. 124 mOETGAGES OF EEAL PROPERTY. [§§ 184^186. possession and ownership of such machinery. The order should be without prejudice to the right of either party to bring an action to determine the question whether the machinery did or did not pass by the referee's deed.' § 184. Inadequacy of security. — The mortgagee of land on which a house is standing is not entitled to an injunction against the mort- gagor or his assigns from removing the house from the lot, except upon proof that the lot without the house would be inadequate for the mortgage debt." § 185. Insolvency of mortgagor. — The right to restrain the im- pairing of the security may exist though the mortgagor be solvent, since the creditor bargained for both the obligation of the debtor and the security of the land," but the insolvency of the mortgagor must be established where the use of the property which is sought to be enjoined is one which is usual and customary, and only becomes im- proper because of the danger caused thereby to the rights of the mortgagee.* § 186. Limitations of injunction. — The remedy by injunction is only intended to restrain the committing of future waste. If prop- erty has wrongfully been detached from the freehold, and has there- by been converted from real to personal property, it will be relieved from the lien of the mortgage,' and, whatever may be the remedy of the mortgagee for the wrongful severance, a court of equity will not enjoin against its removal at the instance of the mortgagee. The mortgagee had no right to its custody even while it was annexed to the land, and no good reason could be given for keeping it on the real estate after it had been separated from it, except that such a course might perhaps be a convenience to the mortgagee when he came to enforce his judgment for deficiency." Neither will the mortgagor be compelled to rebuild or repair build- ings on the mortgaged premises which, without his fault, as by the action of fire or of storms, have been destroyed or become ruinous. 'Mutual Life Ins. Co. v. Bigler, 79 worth, 33 Wis. 358; Triplett v. Parmlee, N. Y. 568, modifying s. c. sub nom. 16 Neb. 649. Mutual Life Ins. Co. v. Nat. Bank of * Robinson v. Russell, 24 Cal. 467. Newburgh, 18 Hun, 371. ' Wilson v. Maltby, 59 N. Y. 126. ''Buckout V. Swift, 27 Cal. 434; Van "Johnson v. White, 11 Barb. 194; Wyck V. AUiger, 6 Barb. 507, 511 ; Hill Spear v. Cutter, 5 Id. 486; Watson v. V. Gwin, 51 Cal. 47. Hunter, 5 Johns. Ch. i6g ; Selden v. ^ Eden on Inj. 119 ; Fairbank v. Cud- Mann, 2 N. Y. Leg. Obs. 328. §§ 187-188. J WASTE. 125 It is tlie duty of the mortgagee, if he wishes to provide against such contingencies, to do so in his contract or by insurance." § 187. General principle. — The jurisdiction of courts of equity to interfere by way of injunction, in cases of waste, may be referred to the broadest principles of social justice. It is exerted where the remedy at law is imperfect, or is wholly denied ; where the nature of the injury is such that a preventive remedy is indispensable, and it should be permanent ; where matters of discovery and account are incidental to the proper relief ; and where equitable rights and equit- able injuries call for redress, to prevent a malicious, wanton, and capricious abuse of their legal rights and authorities by persons having but temporary and limited interests in the subject matter.' ACTION FOE DAMAGES CAUSED BY WASTE. § 188. Remedy of mortgagee against persons who have com- mitted waste. — Where waste is committed by the mortgagor, or by his grantee, or by any other person on the mortgaged premises, by removal of fixtures upon which the mortgage has attached as a Hen, or otherwise, and the value of the security is reduced so that the mortgagee will not be able to obtain complete satisfaction for his debt ; and the person committing such waste having knowledge of the existence of the mortgage, and that the value of the security will be injured by his wrongful acts, and the waste being committed either for a fraudulent purpose to cheat the mortgagee, or for the purpose of making a gain at the expense and to the injury of the mortgagee ; in such case the mortgagee may have an action for damages against the person committing such waste, in the nature of an action on the case at common law.^ . Such an action is not based upon the assumption that the plaintiff's land has been injured, but that his mortgage as a security has been impaired. His damages, therefore, would be hmited to the amount of injury to the mortgage, however great the injury to the land ' Campbell V. Macomb, 4 Johns. Ch. 534. Van Pelt v. McGraw, 4 N. Y. (4 Comst.) ' Story's Eq. Jur. § gig. no ; Wilson v. Maltby, 5g N. Y. 126 ; 'Yates V. Joyce, 11 Johns. 136; Lane Allison v. McCune, 15 Ohio St. 726; 45 V. Hitchcock 14 Id. 213 ; Gardner v. Am. Dec. 605 ; Smith v. Rice, 56 Ala. Heartt, 3 Den. 232 ; Southworth v. Van 417 ; Hutchins v. King, i Wall. 53 ; At- Pelt, 3 Barb. 347 ; Laflin v. Griffiths, 35 kinson & Hewett, 63 Wis. 3g6 ; James v. Id. 58 ; O'Dougherty v. Felt, 65 Id. 221 ; Worchester, 141 Mass. 361. 126 MOETOAGES OF BEAL PEOPEETY. [§ 189-190. might be, and it will therefore be of no consequence whether the injury occurred before or after forfeiture.' § 189. Intent to injure security. — This action is not maintain- able upon the ground of mere negligence, but it must be shown that the defendant intended to injure the plaintiffs security.^ It is not necessary that the primary object of the defendant was to injure the plaintiff ; if he knew that such would be the consequence of his acts, and if he still did them for his own unlawful gain, he will be liable.' A mortgagee cannot recover against a purchaser of a house on mortgaged land who removes it, where the latter had no knowledge of the insolvency of the mortgagor, and there is no proof that the purchaser acted fraudulently." Neither can a mortgagee enforce his Ken against buildings which have been removed from the mortgaged land, or have become parts of another freehold.' In analogy to the right of action which the mortgagee has against a person who wilfully injures the security, he might probably also have a right of action against a sheriff who should intentionally omit to satisfy a judgment out of the chattels of the mortgagor, in conse- quence of which the judgment became a charge upon the real estate prior to the mortgage ; but no action of this kind would lie against a sheriff for mere negligence, unless the act were done fraudulently and with intent to diminish the security of the mortgage creditor.' § 190. Measure of damages. — The remedy of the mortgagee against parties who have injured the security is confined to the amount of damage which the mortgagee has suffered, however great the dam- age to the land may be, and he cannot succeed without alleging and proving that the remainder of the mortgage security and the per- sonal responsibility of the mortgagor are insufficient to afford him complete indemnity.' ■Van Pelt v. McGraw, 4 N. Y. (4 *Tomlinson v. Thomson, 27 Kans. Comst.'* no, 112. See Peterson v. Clark, 70. 15 Johns. 205, where it was held that a 'Harris v. Barmore, 78 Ky. 568 ; mortgagee could not maintain trover for Pierce v. Goddard, 22 Pick. 559 ; 33 Am. trees cut by the mortgagor before for- Dec. 764. feiture. 'Bank of Rome v. Mott, 17 Wend. ' Gardner v. Heartt, 3 Den. 232 ; Bank 554. of Rome V. Mott, 17 Wend. 554. 'Lane v. Hitchcock, 14 Johns. 213; 'Van Pelt v. McGraw, 4 N. Y. (4 Gardner v. Heartt, 3 Den. 232 ; Levy v. Comst.) no; Wilson v. Maltby, 59 The Mayor, etc., of N. Y., 3 Robt. 194; N. Y. 126. Southworth V. Van Pelt, 3 Barb. 347. § 191.J WASTE. 127 § 191. Miscellaneous examples. — ^Wiere a second mortgagee, being in possession of tlie mortgaged property, known to him to be an inadequate security and the mortgagor being known to be insolv- ent, cut timber from the land, thereby lessening its value, the holder of the first mortgage seized such timber and converted it to his own use, and on being sued for such conversion was held entitled to allege the foregoing facts as a valid counter-claim.' In a case where, with intent to injure the mortgagee's security, the owner of a chattel mortgage on certain hop-poles, who had parted with no new consideration on receiving such chattel mortgage, re- moved them from the land, the mortgagee of the land was held justi- fied in selling the poles under a judgment for deficiency obtained on a foreclosure of his mortgage. It was said that an action of trover could have been sustained, and that the rule in this State, which con- siders a mortgage of real estate as creating a Hen rather than vesting a title, does not change this question.' It may be remarked that if trover could be sustained, so also could replevin, and it has been held in Ehode Island that a mortgagee may maintain replevin against a mortgagor in possession for wood and timber cut upon the mortgaged estate in waste of the same and in substantial diminution of the security.' Under the theory of mortgages which prevails in this State and pursuant to which a mortgage is not a title, but a lien, and that without any right to possession, it may be doubted, notwith- standing the case of the hop-poles already cited, as to whether any action in the, nature either of trover or replevin would lie by the mortgagee, his remedy being an action for damages in the nature of an action on the case.* It has been held that timber, posts, rails, and cord-wood made from trees on the mortgaged premises fraudulently cut down by the mort- gagor after the commencement of the foreclosure and removed to neighboring lands, may be sold to make up any deficiency in the mortgage debt after the sale of the land.° And when, after a decree of foreclosure against an insolvent corporation, it quarried stone on ' Carpenterv. Manhattan Life Ins. Co., * Peterson v. Clark, 15 Johns. 205; 93 N. Y. 552, affi'g 22 Hun, 49. Wilson v. Maltby, 59 N. Y. 126 ; Kirch- ^ Sullivan v. Toole, 26 Hun, 203, citing ner v. Schalk, 39 N. J. L. 335 ; Hill v. Watson V. Hunter, 5 Johns. Ch. 169. See Gwin, 51 Cal. 47 ; Clark v. Reyburn, i also Holland v. Hodgson, L. R. 7 C. P. Kans. 281. 328. ' Higgins V. Chamberlin, 32 N. J. Eq. ' Waterman v. Matteson, 4 R. I. 439. 566. 128 MOETaAGES Oi" EEAL PEOPEBTY. [§ 191. the premises, which stone still remained on the ground, it was held that as between the mortgagor and mortgagee such stone was subject to the mortgage.' After the foreclosure of a senior mortgage and a sale thereunder, it is unnecessary for a junior mortgagee to foreclose and sell under his mortgage in order to maintain an action against a grantee of the mort- gagor for an injury to his mortgage interest." ' American Trust Co. v. North Belle- ^ Wharton v. Webster, 56 Wis. 356. ville Quarry Co., 31 N. J. Eq. 89. CHAPTER VI. MOKTaAGES FOE FUTUEE ADVANCES OE OBLIGATIONS. ) 192. Validity of mortgages for future advances. 193. Parol evidence. 194. When no sum is mentioned. 195. Examples. 196. Construction. 197. Agreement for further advances made subsequent to mortgage. ig8. A mortgage is only enforceable for the amount actually advanced. § 199. Priority of mortgages for future advances. 200. Where mortgagee is not obligated to make the advances. 201. Notice to charge mortgagee. 202. Extent of lien as against the grantee of the mortgagor. 203. Recording of mortgages for future advances. ' § 192. Validity of mortgages for future advances. — ^Mortgages may be given to secure any valid debts or obligations, and they may as well be given to secure future advances or contingent debts as those which already exist and are certain and due.' The giving of a mortgage to secure future advances by a debtor in failing circumstances is not, in itself, proof of a fraudulent intent." The mortgagee in such a case is a purchaser for value, and his rights are not aflEected by a prior unrecorded mortgage.^ But when such a mortgage is executed in contemplation of insolvency for an amount in excess of the indebtedness from the mortgagor to the mortgagee. ' Ackerman v. Hunsicker, 85 N. Y. 43 ; Brown v. Kiefer, 71 N. Y. 610 ; Judge Story, in Conrad v. The Atlantic Ins. Co., I Pet. 386, 447 ; Leeds v. Cameron, 3 Sumn. 448 ; United States v. Hboe, 3 Cranch, 73 ; Hubbard v. Savage, 8 Conn. 215 ; Walker v. Snediker, Hoff. Ch. 145; Commercial Bank v. Cunningham, 24 Pick. 270 ; Lylev. Ducomb, 5 Binn. 585; Monell V. Smith, 5 Cow. 441 ; Lansing v. Woodworth, i Sandf. Ch. 43 ; Barry v. Merchants' Exchange Co., i Sandf. Ch. 280, 314 ; BrinckerhofI v. Marvin, 5 Johns. Ch. 320 ; Bank of Utica v. Finch, 9 3 Barb. Ch. 297 ; Livingston v. Mclnlay, 16 Johns. 165 ; Truscott v. King, 6 N. Y. (2 Seld.) 160 ; Robinson v. Williams, 22 N. Y. 383 ; Collier v. Faulk, 69 Ala. 58 ; Nelson v. Boyce, 7 J. J. Marsh (Ky.) 401 ; 23 Am. Dec. 411 ; Berry v. O'Con- ner, 33 Minn. 29; Jones v. Guaranty, etc.,. Co., 101 U. S. 622 ; Boswell v. Good- win, 31 Conn. 74 ; Hook v. Creamer, 34 N. J. Eq. 181. ; Bank v. Morsell, i Mac- Arthur, (D. C.) 155. " Newkirk v. Newkirk, 56 Mich. 525. ' Moore v. Ragland, 74 N. Car. 343- 130 MOETGAGES OP KEAL PEOPEETT. [§ 193. this throws upon the mortgagee the burden of proving the honesty of the transaction.' § 193. Parol evidence. — In order that a mortgage for future ad- vances or liabilities may be valid, it is not absolutely necessary that the purpose and object of the security should be set out in the mortgage itself, or in the defeasance, although such a course is the more direct and open one, and is calculated to prevent the raising of questions by junior purchasers or incumbrancers. It is a general rule that parol evidence cannot be given to contradict or deny written evi- dence, but to this rule there are some exceptions. Parol evidence may be given to contradict or explain a mere receipt, and this rule was long since applied to the acknowledgment of the receipt of the consideration expressed in a deed.' In McCrea v. Pv/rmort (16 "Wend. 460), the English and Ameri- can cases were largely considered, and it was held that it might be shown that the consideration was iron, of a specified quantity, valued at a stipulated price, instead of money paid, as expressed in the deed. And it was said in the opinion that the cases decided surrendered the consideration clause to the utmost latitude of inquiry, whenever this should become material to a personal action between the parties.' As was said by Maeshall, Ch. J., in Shi/rras v. Craig (^ Cranch, 34), " it is not to be denied that a deed which misrepresents the trans- action it recites, and the consideration on which it is executed, is lia- ble to suspicion, and it must sustain a rigorous examination. It is always advisable fairly and plainly to state the truth, but if, upon in- vestigation, the. real transaction should appear to be fair, though somewhat variant from that which is described, it would seem to be unjust and unprecedented to deprive the person claiming under the deed of his real equitable rights, unless it be in favor of a person who has been, in fact, injured and deceived by the misrepresentar tion." ' It has been adjudged, in several cases, that parol evidence is admis- sible to show the purpose and intent for which a mortgage was exe- cuted, though upon its face it should appear to be for the payment of a specified sum of money. It may be shown that its purpose was se- ' Lombard v. Dows, 66 Iowa, 243 ; ' See also Hebbard v. Haughian, 70 Tripp V. Vincent, 8 Paige, 176. N. Y. 54. ' Shephard v. Little, 14 Johns. 210 ; * See also Craig v. Tappin, 2 Sandf. Bowen v. Bell, 20 Id. 338. Ch. 78. §§194-195.] MOKTGAftES FOE FTTTTTEE ADVANCES. 131 curity for future advances or responsibilities, or for balances which might be due from time to time.' A mortgage purporting to be given for a note, may be shown to have been given for indemnity only.'' A mortgage for a specific sum may be shown to be intended as se- curity for a general balance^ of accounts or anticipated dealings, by the terms of a receipt for the security, given by the mortgagee and accepted by the mortgagor at the time of its delivery.' Parol evidence is also admissible to show that the mortgage was given to secure advances to be made by a party not named in the mortgage,* or to a person other than the mortgagor.' § 194. When no sum is mentioned. — If no sum be mentioned, but if the purpose of the mortgage is stated to be to secure the pay- ment of all future advances, or of all liabilities of a certain kind to be thereafter incurred, this wiU be sufficient, for, in a technical sense, that is certain which can be made certain,' and if the instrument is sufficiently certain to be valid against the mortgagor, it will also be equally valid as against all persons claiming under him.' An absolute deed, intended as security for future advances or re- sponsibilities, is valid as a mortgage, and the purpose for which it was given may be shown by parol.' § 195. Examples. — ^In Shvrras v. Oraig (7 Cranch, 34), a mort- gage purported to secure a debt of £30,000 sterling to all the mort- gagees. It was shown by parol evidence that the intent and purpose of the mortgage was to secure different sums due at the time to dif- ' Marvin, J., in McKinster v. Bab- ' Robinson v. Williams, 22 N. Y. 380 ; cock, 26 N. Y. 378, 380 ; Lawrence v. Miller v. Lockwood, 32 N. Y. 299 ; Mo- Tucker, 23 How. U . S. 14 ; Bank of nell v. Smith, 5 Cow. 441 ; Kramer v. Utica V. Finch, 3 Barb. Ch. 293 ; Hall The Trustees of the Farmers' Bank, 15 V. Crouse, 13 Hun, 557 ; Bell v. Flem- Ohio, 253 ; Merrills v. Swift, 18 Conn, ing's Ex'r, 12 N. J. Eq. 13 ; Foster v. 266 ; Loews v. De Forest, 20 Conn. 442 ; Reynolds, 38 Mo. 553 ; Brewster v. Ketchum v. Jauncey, 23 Conn. 127; Col- Clamfit, 33 Ark. 72 ; Collins v. Carlile, Her v. Faulk, 69 Ala. 58 ; Witzinski v. 13 111. 254 ; Darst v. Gale, 83 111. 136 ; Everman, 51 Miss. 841 ; Insurance Co. Hendrix v. Gore, 8 Oreg. 406 ; Tully v. v. Brown, 11 Mich. 266 ; Machette v. Harloe, 36 Cal. 302 ; Griffin v. N. J. Oil Wanless, i Colo. 225 ; McDaniels v. Co., II N. J. Eq. 49 ; Bacon v. Brown, Colvin, 16 Vt. 300. 19 Conn. 29. ' Youngs v. Wilson, 27 N. Y. 351. ' Morrill v. Morrill, 53 Vt. 74. ' Harper's Appeal, 64 Pa. St. 315 ; 2 Brackett v. Sears, 15 Mich. 244. Fessler's Appeal, 75 Id. 483 ; Myers's * Hall V. Crouse, 13 Hun, 557. Appeal, 42 Id. 518 ; Kline v. McGuckin, ' Commercial Bank v. Cunningham, 25 N. J. Eq. 433. 24 Pick. 270 ; 35 Am. Dec. 322. 133 MORTGAGES OP EEAL PEOPEKTT. [§ 195. ferent mortgagees, and advances afterward to be made and liabilities to be incurred to an uncertain amount. In Bamk of Utica v. Finch (3 Barb. Ch. 293), a mortgage for $30,000 was recorded, and it was held that the holder might show that it was, as a matter of fact, made as security for future advances, and that he might be secure in his lien to the extent of his advances within that amount, except as such lien might be affected by the equities of subsequent grantees or incumbrancers attaching previous to any advance. In Truscott v. King (6 N". Y. [2 Seld.] 147), a judgment was con- fessed for $20,000. It was shown by parol evidence that the purpose of the judgment was security for future advances. In McKvnster v. Bahcoch (26 N. Y. 378), a chattel mortgage re- cited that the mortgagor was indebted to the mortgagee in the sum of $1,000, being for money advanced, and that the mortgage was made to secure said debt. It was shown by parol evidence that the real consideration of the mortgage was the indorsement by the mort- gagee of the mortgagor's note for $1,000, and of other notes which were substituted therefor ; and the mortgage was enforced for the amount which the mortgagee subsequently paid on account of such indorsements. In Brown v. Kiefer (71 E". Y. 610), a chattel mortgage for $5,000 was given, payable on demand, which was intended by the parties to secure present and future indebtednesses. It was held to be valid, not only as between ihe parties, but also as against creditors. In Price v. Orover (40 Md. 102), a mortgage for $30,000, proved by parol to be to indemnify the mortgagee, who was a broker, against loss in carrying a specified number of shares of stock, was held valid.' In Simons v. Fi/rst National Bank (93 IS". Y. 269), the mortgage recited a consideration of $5,000, and the condition was as follows : " This grant is intended as collateral security for the payment of any indebtedness of the said first parties to the said party of the second part, by note or otherwise ; and whenever the said first party shall have paid all such indebtedness, this mortgage shall become null and void ; which said sums, principal and interest, the said parties of the first part hereby covenant and agree to pay to the party of the second part, in the manner and at the time or times aforesaid, and this con- veyance shall be void if such payment be made as herein specified." ' , ' Brinkmeyer v. Helbling, 57 Ind. 435. « See condition of a mortgage to secure §196.] MORTGAGES FOR FUTURE ADVANCES. 133 A mortgage to indemnify an Indorser of " a note of $2,000, made payable to the order of the grantor, and by him signed and indorsed," is sufficiently certain, and the note may be identified by parol." § 196. Construction. — The rules applicable to the construction of all writings will control as to mortgages for future advances, but in cases where the language is ambiguous the courts lean toward a con- struction which will furnish to the creditor the most complete in- demnity. Thus, if the condition of the mortgage is broad enough to cover future claims, and the language used does not forbid its appli- cation to existing debts and liabihties as well, both may be collected under it.' Where the condition of a mortgage deed provided for payment by the mortgagor to the mortgagee, in these words : " also what I may owe him on book," and it appeared that there was no account at the time, it was held that the condition referred to future accruing accounts.' Where a mortgage was given to secure a note for $5,500, and such advances as there had been or might be made within two years, not to exceed in all an indebtedness of $6,000, and advances were made, the mortgage was held good to cover the advances and the note for $5,500.' A mortgage expressed to be " given to secure whatever indebted- ness may at any time exist from the mortgagor to the mortgagee," includes an obligation incurred by the mortgagor by indorsing the note of a third person.' A mortgage expressed to be " executed as a continuing security for an amount not exceeding $93,600," secures future advances although the mortgagor was at the time of its delivery indebted to the mort- gagee in a greater sum." A mortgage drawn to cover any demands held by the mortgagee against the mortgagor will not authorize the mortgagee to buy up claims against the mortgagor and enforce them, unless such an intent is very clearly expressed in the mortgage.' a general balance for notes, drafts, or * Lawrence v. Tucker, 23 How. (U.S.) other commercial paper. Mowry v. San- 14. born, 68 N. Y. 153, 154. ' First Nat. Bank of Paterson v. By- ' Goddard v. Sawyer, 9 Allen (Mass.) ard, 26 N. J. Eq. 255. 78 ; Benton v. Sumner, 57 N. H. 117. * Fassett v. Smith, 23 N. Y. 252. *Page V. Ordway, 40 N. H. 253. ' Lashbrooks v. Hatheway, 52 Mich. 3 McDaniels v. Colvin, 16 Vt. 300 ; 42 124. Am. Dec. 512. 134 MOETGAGES OF EEAL PEOPEETT. [§ 197. Where the purpose of the security appears upon its face, only that purpose can be accomplished by it,' and if the limit of the amount for which it is to stand, or of the time within which the advances are to be made, is specified, that amount cannot be exceeded, and advances made after the time stipulated for will not be secured." § 197. Agreement for further advances made subsequent to mortgage. — When a mortgage is made in the form of an absolute deed, the agreement of defeasance being in parol, it is competent, as between the parties, that the transfer should be allowed to stand as security for further debts or advances subsequently incurred, even though the terms of redemption contemplated when the conveyance was first made did not provide for such subsequent demands. In- deed, if nothing be said, the presumption would be, in such a case, that the new credits or advances were given or made by the creditor on the faith of the security in his hands. It was a rule of the civil law that if a debtor pledged property to secure a debt, and afterward another debt was contracted, the creditor might retain for both debts, provided that there was nothing to negative the presumption of an implied contract that the pledge should be so applied,' and there is strong reason to enforce the same rule in cases where the jurisdiction of equity is invoked to enforce a redemption of lands which had in form been absolutely conveyed. But when the mortgage recites the debt which it is made to secure, there is no implication of an intention to secure any further debt. In such a case, an agreement made subsequently to the execution of the mortgage, that it shall stand for a new debt, would not have any bind- ing force, even as between the parties, for the instrument speaks for itself, and the written evidence of one contract cannot, upon any principle, be sustained as evidence of another. The lien, as created by the mortgage for the payment of one debt, ceases by the satis- faction of that debt, and a new li4n can only be created by a new grant." So, where a mortgage was made to a member of a firm as trustee for himself and his copartners, as security for advances there- after to be made by that firm, it was held not to operate as security ' Townsend v. Empire Stone Dressing * Stoddard v. Hart, 23 N. Y. 556 ; Co., 6 Duer, 208 ; Bell v. Radcliff, 32 Hubbell v. Blakeslee, 8 Hun, 603; Bank Ark. 645. of Uticav. Finch, 3 Barb. Ch. 293; John- 8 Miller v. Whittier, 36 Me. 577. son v. Anderson, 30 Ark. 745 ; Percival ' Jarvis v. Rogers, 15 Mass. 389; James v. Gale, 40 N. J. Eq. 440. V. Johnson, 6 Johns. Ch. 417, 429. §§198-199.] MOETGAGES FOE FUTURE ADVANCES. 135 for advances or credits given by a new firm formed in part of mem- bers of the old.' While there may be some question as to the effect of an agreement made susequent to the execution of a mortgage for holding it as secu- rity for new advances, as between the parties to such an agreement, there can be no question as to its effect as against junior purchasers or incumbrancers. As to them, a mortgage which has been paid cannot be revived as a lien, and, whether they have notice of their rights or not, the titles or liens which have once vested in them cannot be taken from them without their consent." § 198. A mortgage is only enforceable for the amount act- ually advanced upon it.° A mortgage given by a married woman to indemnify the indorser of her husband's paper is in no manner for the benefit of the holder of the paper, and an assignment of such a mortgage will only carry the right to recover the amount actually paid on the paper by the mortgagee up to the time of the assignment ; and a reassignment of the mortgage will have no effect to change the rule.* § 199. Priority of mortgages for future advances. — Where a mortgage is executed to secure the payment of future advances, it being part of the contract under which the mortgage is made, that the mortgagee shall make the advances at certain definite periods, and that the mortgagor shall then accept them and pay interest upon them, the rights of the parties become fixed at the date of the de- livery of the security, and the mortgage will protect the mortgagee against subsequent incumbrancers whose rights are acquired before the advances are actually made ; provided, of course, such subsequent incumbrancers are not purchasers for value without notice either from the public records or otherwise. In such a case the debt is present, though the payment is future, and the security is as valid as if the advances were made at its date.' The circumstance that the ' Taylor v. Post, 30 Hun, 446. Reg. 79 and note, 91, 92, by Judge Red- * Walker v. Snediker, Hoff. Ch. 146 ; field ; Rowan v. Sharpe's Rifle Mfg. Co.,' Craig V. Tappin, 2 Sandf. Ch. 78, 83. 29 Conn. 329 ; Griffin v. Burtnett, 4 Edw. ' Vogan V. Caminetti, 65 Cal. 438'. 673 ; Hubbard v. Savage, 8 Conn. 215 ; *0'Hara v. Baum, 88 Penn. St. Witzinski v. Everman, 51 Miss. 841; 114. Nelson v. Iowa & Eastern R.R. Co., 8 'Story's Eq. Jur. § 1023 c; Crane v. Am. R.R. Rep. 82 ; Brinkmyer v. Hel- Deming, 7 Conn. 387 ; Boswell v. Good- bling, 57 Ind. 435 ; Brinkmyer v. Brown- win, 31 Conn. 74 ; s. c. in 12 Am. Law eller, 55 Ind. 487. 136 MOETGAGES OF REAL PEOPEETT. [§ 200. agreement to make tlie advances is by parol, will not affect the mort- gagee's rights.' The same rule will apply where a mortgage is made to indemnify the mortgagee from becoming a surety or indorser, and such a mort- gage will have priority over a lien subsequently acquired, although the mortgagee may not be called upon to pay anything until long afterward." So, where a mortgage is given to secure a person who is bound to accept drafts, the lien of the mortgage attaches from the date of the obligation to accept.' § 200. Where mortgagee is not obligated to make advances. — But other questions wiU arise when the mortgagee is not obligated to make the advances. In such cases the mortgagee holds a lien upon the land, at any given time, for the actual amount of his advances at that time ; * but if, with knowledge of a subsequent lien, he makes further advances, his rights as to the new advances would be inferior to such subsequent lien.° And it makes no difference that the later mortgage, of which notice is given, is also given to secure future advances to be made or not, at the option of the mortgagee, so long as advances under it are actually made before the advances under the prior mortgage over which they claim precedence." A mortgage for future advances is prior as a lien, for all advances ' Piatt V. Griffith, 27 N. J. Eq. 207. Cas. 514 ; Bank of Montgomery Coun- ' Uhler V. Semple, 20 N. J. Eq. 288. ty's Appeal, 36 Penn. St. 172 ; Bell v. ^Choteau v. Thompson, 2 Ohio St. Fleming, i Beasley (N. J.) i, 16; Frye 114- V. Bank of Illinois, 11 111. 367, 381; '' Robinson v. Williams, 22 N. Y. 380 ; Story's Eq. Jur. § 1023 c ; Article by Bissell V. Kellogg, 60 Barb. 617, affi'd Hon. J. F. Redfikld, in Am. Law Reg., 65 N. Y. 432 ; Brinckerhoff v. Marvin, 5 vol. 2, N. S. iz ; Ripley v. Harris, 3 Johns. Ch. 320, 327 ; Craig v. Tappin, Biss. igg ; National Bank v. Gunhouse, 2 Sandf. Ch. go ; Lansing v. Woodworth, 17 S. Car. 489 ; Ladue v. Detroit, etc., I Id. 45 ; Kramer v. The Trustees, etc., R.R. Co., i3Mich.38o; Boswell v. Good- of Farmers' Bank, 15 Ohio, 253 ; Mer- win, 31 Conn. 74 ; Brinkmyer v. Brown- rills V. Swift, 18 Conn. 266 ; Lewis v. De eller, 55 Ind. 487 ; Ward v. Cooke, 17 Forest, 20 Id. 442 ; Ketchum v. Jauncey, N. J. Eq. 93 ; Heintze v. Bentley, 34 N. 23 Id. 127 ; Carpenter v. Blote, I E. D. J. Eq. 562 ; Sayre v. Hewes, 32 N. J. Smith, 491 ; Ward v. Cooke, 17 N. J. Eq. 652 ; Barnard v. Moore, 90 Mass. Eq. 93 ; Schulze v. Bolting, 8 Bissell, (8 Allen) 466 ; Appeal of the Bank of 174' Commerce, 44 Penn. St. 423 ; Nelson v. ' Brinckerhoff v. Marvin, 5 Johns. Ch. Boyce, 7 J. J. Marsh (Ky.) 401 ; 23 Am. 320, 327 ; Robinson v. Williams, 22 N. Y. Dec. 411. 380 ; Hopkinson v. Rolt, 9 Ho. Lords « Boswell v. Goodwin, 31 Conn. 74. § 201. J MORTGAGES FOE FUTURE ADVANCES. 137 made thereunder within the limit, to a judgment recovered subse- quent to the giving of the mortgage, though the advances were made after the recovery of the judgment, but without notice of it.' § 201. Notice to charge mortgagee. — The question still remains as to what notice is sufficient to charge the mortgagee with knowledge of the rights of the incumbrancer subsequent to his mortgage, and, as to this point, there has been some diversity of opinion. There is no question that actual personal notice is sufficient, but the authori- ties differ as to whether the recording of the subsequent incumbrance is notice to the holder of the mortgage of earlier date, so far as ad- vances which may thereafter be made by him are concerned. On the one hand, it has been said that the record of the prior mortgage should put the junior incumbrancer upon inquiry, and that it is for him to be diligent in guarding his rights,'' while, on the other, it has been held that the person holding the prior mortgage should be bound by the notice contained in the public records at the time when the advance is actually made.' In this State it was held at two General Terms that a mortgage was only valid for the amount actually advanced at any given time, and that a junior incumbrancer acquired a lien as of the date of the re- cording of his security, which would take precedence of advances sub- sequently made upon the older lien, who was, in common with all other persons, bound by the notice given by the public records. These cases cited and approved the reasoning on this point contained in the first edition of this work.* But the Court of Appeals has set- tled the question in AokeriTMn v. Hunsicker (85 N. Y. 43 ; 39 Am. E. 621, rev'g s. c. 21 Hun, 63), by determining that a party who takes a mortgage to secure further optional advances, upon recording his mortgage, is protected against intervening liens for advances ' Williams v. Gilbert, 37 N. J. Eq. 84. ^Ten Hoven v. Kerns, 2 Penn. St. 96; ^ Bank of Montgomery County's Ap- Parmentier v. Gillespie, g Id. 86 ; Bos- peal, 36 Pa. St. 170 ; Ward v. Cooke, 17 N. well v. Goodwin, 31 Conn. 74 ; Ledyard J. Eq. 93 ; Wilson v. Russell, 13 Md. 495 ; v. Butler, 9 Paige, 132. So held under Nelson v. Boyce, 7 J. J. Marsh (Ky.) peculiar language of the Ohio statute. 401 ; see Truscott v. King, 6 Barb. 346 ; Spader v. Lawler, 17 Ohio, 371 ; 49 Am. s. c. rev'd 6 N. Y. (2 Seld.) 147. Article Dec. 461 ; Ladue v. Detroit & Milwau- by Judge Mitchell in 11 Am. Law Reg. kee R.R. Co., 13 Mich. 380. N S. 273 ; note by Judge Redfield, 12 * Ketcham v. Wood, 22 Hun, 64 ; Ack- Am. Law Reg. 79 ; McDaniels v. Col- erman v. Hunsicker, 21 Hun, 53. vin, 16 Vt. 300 ; 42 Am. Dec. 512. 138 MOETGAGBS OF EEAL PROPERTY. [§ 202. made upon the faith and within the limits of the security, until he has notice of such intervening lien, and that the recording of the subsequent Hen is not constructive notice to him. The opposite rule is said to impose the burden of diligence upon the wrong person. The party taking the subsequent security may protect himseKby notice, and, as is said by Mr. Jarman in his notes to " Bytherwood's Convey- ancing " : " No person ought to accept a security subject to a mort- gage authorizing future advances without treating it as an actual ad- vancement to that extent." ' § 302. Extent of lien as against the grantee of the mortgagor. — A purchaser of the equity of redemption of mortgaged property who takes, subject to a mortgage, the entire amount of which is allowed to him out of the consideration, has nothing to do with the bargain out of which the mortgage arose or as to whether the amount secured by it has abeady been or is intended to be advanced; in either event he must allow his estate to be subjected to the full amount of the mortgage lien, for that was his bargain.'' Where a grantee takes subject to a mortgage for advances, which the mortgagee has, for a consideration, agreed to make on the per- formance of certain specified conditions, the mortgage is a lien for the full amount, though the advances have not been made, because the mortgagee has agreed to make them, and has assumed a hability on the faith of the security.' But if the mortgage is for voluntary advances, a stipulation in the conveyance of the equity of redemption to the effect that the prop- erty is subject to the mortgage, will not operate to give the mortgage any force beyond the amount actually advanced upon it ; the prop- erty will be subjected to the hen as it really exists and to no greater extent.* It must be borne in mind, however, that the recording of the deed is not notice to the mortgagee, who may continue to increase his lien by making new advances until he shall receive actual notice of the transfer.' ' See also Jones' Ex'r v. State Bank- Jewell v. Harrington, 19 Wend. 471 ; ing Co., 34 N. J. Eq. 543. Hartley v. Tatham, 26 How. 158 ; i ■^ Freeman v. Auld, 44 N. Y. 50, rev'g Robt. 246 ; Lester v. Barron, 40 Barb. 25 How. 327, 44 Barb. 14, 37 Barb. 587; 297 ; Ladue v. Detroit & Milwaukee R. Ritter v. Phillips; 53 N. Y. 586. R. Co., 13 Mich. 380. *Cox V. Hoxie, 115 Mass. 120. ' Ackerman v. Hunsicker, 85 N. Y. 43; ^Russell V. Kinney, i Sand. Ch. 34 ; 39 Am. R. 621, rev'g 21 Hun, 53. § 203.] MOETGAGES FOE FUTTJEE ADVANCES. 139 § 203. Recording of mortgages for future advances. — The record does not always show, neither is it intended to show, the amount actually due or unpaid on a mortgage. It only shows the utmost amount or sum which the mortgage was intended to secure, and the only remedy for a purchaser or incumbrancer, even in ordi- nary cases, on finding a large mortgage ahead of him, is to ascertain, by inquiry from the mortgagee, who is bound to state his claims fair- ly, what amount is actually owing or unpaid upon it.' If a mortgage for future advances shows upon its face the object for which it is given, the recording of it will put a honafide pur- chaser or incumbrancer upon inquiry, and an application to the mort- gagee will enable him to ascertain the extent of the claims made under it.' If the mortgage be nominally for the payment of a cer- tain sum of money, it cannot be shown to have been intended as a lien for a greater amount, and moneys not mentioned in the mort- gage cannot be covered by it to the prejudice of subsequent hens.' ' Craig V. Tappin, 2 Sandf. Ch. 78. 7 Johns. Ch. 14 ; Bank of Utica v. Finch, ^ Youngs V. Wilson, 27 N. Y, 351 ; 3 Barb. Ch. 293 ; Walker v. Snediker, Robinson v. Williams, 22 N. Y. 387 ; Hoff. Ch. 145 ; Pettibone v. Griswold, Williamson v. Brown, 15 N. Y. 354 ; 4 Conn. 158 ; Stoughton v. Pasco, 5 Id. Witzinski v. Everman, 51 Miss. 841; see, 442 ; Shepardv. Shepard, 6 Id. 37 ; Hub- contra, Babcock v. Bridge, 29 Barb. 427, bard v. Savage, 8 Id. 215 ; Hart v. ^ Truscott V. King, 6 N. Y. (2 Seld.) Chalker, 14 Id. 77 ; Garber v. Henry, 6 147 ; St. Andrew's Church v, Tompkins, Watts, 57, CHAPTER VII. TIME FOE THE PAYMENT OF THE M0ET6AGE DEBT. EXTENSION OF TIME FOR PAYMENT. § 204. Extension by parol agreement. 205. Effect of extension. 206. Consideration for extension. 207. Extension must bind both debtor and creditor. EXTENSION BY RENEWAL OF NOTES. 208. Mortgage secures tlie renewal notes. 209. In order to constitute notes to be renewals. 210. A change in the renewal obliga- tion. 211. Examples of extension by renewals of notes. 212. Extension does not, in general, impair lien. EFFECT OF EXTENSION ON RIGHTS OF SURETIES. 213. When an extension of time will discharge a surety. 214. If the principal debtor gives to his creditor his note. 215. Land of one person mortgaged for debt of another. 216. Release of mortgagor by extension of time to his grantee. 217. Extension reserving rights of surety. 218. Extension to discharge surety must be for good consideration. § 2ig. Usurious consideration for exten- sion. 220. Creditor must know. WHEN A REFUSAL BY A CREDITOR TO COLLECT A DEBT DISCHARGES THE SURETY. 221. Creditor should collect debt on re- quest of surety. 222. Reason of the rule. 223. Request to collect must be explicit. 224. Surety only relieved to extent of actual injury. 225. No one not really a surety will be relieved. 226. Surety discharged by collusion be- tween debtor and creditor. 227. Guarantor of collection released by neglect to sue. SHORTENING THE TIME OF PAYMENT UNDER THE "DEFAULT CLAUSE." 228. Nature of the "default clause." 229. Default clause is for benefit of mortgagee only. 230. Construction of provision as to default. 231. Place where interest must be paid. 232. Excusing default. 233. Practice when default is excus- able. 234. When default of payment of inter- est is waived. EXTENSION OF TIME FOE PAYMENT. § 204. Extension by parol agreement. — The time for the pay- ment of the mortgage debt may be extended by agreement of the parties. If the obligation be under seal, and still remains executory, it has been held that an agreement in writing of equal solemnity is necessary to alter the contract in any essential particular, and that. § 205.] TIME FOR PAYMENT OF MORTGAGE DEBT. 141 too, whether the substituted agreement be supported by a new con- sideration or not.' But after the breach of a sealed agreement, it may be modified or wholly rescinded by an executory parol agreement, upon a sufficient consideration.'' A subsequent agreement extending the time of the debtor does not operate to destroy the original agree- ment, but only to modify it in respect to the time of payment.'' Although a parol agreement may not be technically sufficient to alter the terms of a contract under seal if made before the breach of such a contract, it may operate as a waiver of a right to enforce the obligation for a limited time if made upon sufficient considerar tion, and no court would enforce a specialty contract at the time of its maturity where the debtor had bargained and paid for indulgence, on the mere ground that such bargain was by parol.* Where an intending purchaser of mortgaged real estate called on the mortgagee, who promised that if he would purchase the premises and pay an instalment the following spring and make certain im- provements, and pay interest annually, he would extend the time of the payment for twenty years ; and the purchase was accordingly made on the faith of this promise, the purchaser assuming the mort- gage and making the payment and improvements agreed upon, this was held to extend the mortgage as agreed.' The agreement of extension must be made after the delivery of the bond and mortgage, since no parol evidence can be given of an agreement before or at that time in contradiction of the writing." In the absence of evidence of collusion, an agreement executed by the general guardian of infant mortgagees, extending the time of payment of principal in consideration of a payment of interest in advance, is valid.' § 205. Effect of extension. — If a valid agreement for the exten- ' Allen V. Jaquish, 2i Wend. 628 ; * Burt v. Saxton, i Hun, 551 ; Scott Eddy V. Graves, 23 Wend. 84 ; Dodge v. Frink, 53 Barb. 533 ; Tompkins v. V. Crandall, 30 N. Y. 294. Tompkins, 21 N. J. Eq. 338 ; Margott v. " Dodge V. Crandall, 30 N. Y. 294 ; Renton, Id. 381 ; Re Betts, 4 Dillon, Lattimore v. Harsen, 14 Johns. 330 ; 93 ; 7 Reporter, 225 ; Frayser v. Trus- Dearborn v. Cross, 7 Cow. 48 ; Fleming tees of Indiana Asbury University, 39 V. Gilbert, 3 Johns. 528 ; Keating v. Ind. 556 ; Albert v. Grosvenor Invest- Price, I Johns. Cas. 22 ; Delacroix v. ment Co., L. R. 3 Q. B. 127. Bulkley, 13 Wend. 71 ; Townsend v. ' Burt v. Saxton, i Hun, 551 ; 4 T. & Empire Stone Dressing Co., 6 Duer, 208 ; C. 109. Fish V. Hayward, 28 Hun, 456. * Martin v. Rapelye, 3 Edw. Ch. ' Hasbrouck v. Tappen, 15 Johns. 200 ; 229. Dodge V. Crandall, 30 N. Y. 294. ' Willich v. Taggart, 17 Hun, 511. 143 MOETGAGES OF EEAL PKOPEKTT. [§ 206. sion of tlie time of payment of the mortgage debt be made, it will constitute a defense to an action for the foreclosure or enforcement of the mortgage commenced before the expiration of the new term of credit.' A mortgage cannot be foreclosed until the debt which it secures is due and payable, even though the security be impaired and rendered precarious by the delay.^ § 306, Consideration for extension. — ^A promise to forbear the collection of a debt, not founded upon a new consideration, is void ;° but it has sometimes been thought that mutual promises, on the one hand to waive payment at the time specified, and to accept of the money at a later date, and on the other to pay principal and interest at the expiration of the extended term of credit, furnished sufficient consideration for each other.* In Orirman v. Piatt (31 Barb. 328), a grantee of the mortgagee, who was not personally liable for the payment of the mortgage debt, sent a check to the mortgagee of the amount of an instalment of in- terest then due, with a note asking for an extension of the time of payment, and telling the mortgagee to use the check if he would ex- tend. The mortgagee used the check, and it was held that this amounted to an acceptance of the proposition and an extension of the mortgage, and that an injunction would lie to restrain foreclosure until the expiration of the time asked for. An agreement to increase the interest to the legal rate from a smaller rate is sufficient consideration for an extension.' So, also, is payment of interest or of part of the principal in advance ; " or the assuming of the mortgage debt by a purchaser in reliance upon such an agreement ; ' or the payment of an instalment of interest by a grantee of the mortgagee not personally obligated to make such pay- ' Grinnan v. Piatt, 31 Barb. 328 ; Saxton, i Hun, 551 ; s. c. 4 N. Y. Sup. Dodge V. Crandall, 30 N Y. 294. (T. & C.) 109 ; Pierce v. Goldsberry, 51 2 Campbell v. Macomb, 4 Johns. Ch. Ind. 52 ; Bailey v. Adams, 10 N. H. 534 ; Building Association v. Piatt, 5 162. Compare Wakefield Bank v. Trues- Duer, 675. dell, 55 Barb. 602 ; Preston v. Henning, ' Miller v. Holbrook, i Wend. 317 ; 6 Bush (Ky.) 556. Reynolds V. Ward, 5 Wend. 501 ; Patchin ' Haggerty v. Allaire Works, 5 Sand. V. Pierce, 12 Wend. 61; Gibson v. Renne, 231. 19 Wend. 389 ; Pabodie v. King, 12 * Newsam v. Finch, 25 Barb. 175 ; Re Johns. 426 ; Fulton v. Matthews, 15 Betts, 4 Dillon, 93 ; 7 Reporter, 225 ; Johns. 433 ; Hall v. Constant, 2 Hall, Maher v. Lanfrom, 86 111. 513. 185. ' Burt V. Saxton, i Hun, 551 ; 4 T. & * Clark V. Dales, 20 Barb. 42 ; Burt v. C. log. §§207-208.] TIME FOE PAYMENT OF MOETGAGE DEBT. 143 ment ; ' or the giving by the debtor of additional security for the debt." The payment by the debtor of part of the debt, the whole being due, does not furnish a consideration for a stipulation to extend the balance, since, in making such part payment, the debtor only does what the law requires him to do.° § 207. Extension must bind both debtor and creditor. — Both mortgagor and mortgagee must be parties to any agreement for exten- sion in order that they shall be entitled to rights under it. Thus, a mortgagor is not entitled to the benefit of an agreement between the mortgagee and his assignee pursuant to which the time for the ps,y- ment of the mortgage is to be extended, and the assignee may fore- close notwithstanding.* EXTENSION BY EENEWAL OF NOTES. § 208. Mortgage secures the renewal notes. — "Where a mort- gage is given to secure the payment of a particular debt mentioned therein, the mortgagee cannot, as against subsequent purchasers or incumbrancers, hold it for an entirely distinct and different debt, upon parol proof that it was intended to cover that debt also ; and when the original debt is paid, the mortgage will cease to be a lien.' But where the mortgage is given to secure a particular debt, with a con- dition to be void on payment, the mortgagee does not lose his security by the mere extension of the time of payment, although the exten- sion is in the form of a renewal of the note which is held as a col- lateral security for the payment of the same debt, where it is not the intention of either partyto discharge the mortgage security.' ' Grinnan v. Piatt, 31 Barb. 328 ; Jes- Purser v. Anderson, 4 Edw. 17 ; Marvin ter V. Sterling, 25 Hun, 344. v. Vedder, 5 Cow. 671 ; Taylor v. Post, 'Jester v. Sterling, 25 Hun, 344 ; Fray- 30 Hun, 446 ; Hubbell v. Blakeslee, 8 ser V. Trustees Indiana Asbury Univers- Hun, 603 ; Hughes v. Johnson, 38 Ark. ity, 39 Ind. 556. 285. 2 Ritch V. Smith, 60 How. 13 ; Id. 157; 'Dunham v. Dey, 15 Johns. 555 ; The Lowman v. Yates, 37 N. Y. 601 ; Halli- Bank of Utica v. Finch, 3 Barb. Ch. 293; day V. Hart, 30 N. Y. 474 ; Olendorf v. Chapman v. Jenkins, 31 Barb. 164 ; Bab- Union Bank, 31 Md. 126 ; Scott v. Stock- cock v. Morse, 19 Barb. 142 ; BoUes v. well, 65 How. 249 ; Kellogg v. Olmstead, Chauncey, 8 Conn. 389 ; Mayer v. Grot- 25 N. Y. 189. tendick, 68 Ind. i ; Kieser v. Baldwin, *Lee V. West Jersey Land Co., 29 N. 62 Ala. 526 ; Sloan v. Rice, 41 Iowa, 465; J. Eq. 377. Post V. Robbins, 35 Iowa, 208 ; Humph- ' Mead v. York, 6 N. Y. (2 Seld.) 449 ; reys v. Danser, 32 N. J. Eq. 220 ; Du- Truscott V. King, 6 N. Y. (2 Seld.) 147 ; mell v. Ferstagge, 23 Ind. 397 ; Dunshee 144 MOETGAGES OF REAL PEOPEETY. [§§309-210. If the debt secured by the mortgage is put in judgment, the lien is not thereby lost, but the mortgage still subsists as security for the judgment.' When a note secured by mortgage is indorsed and transferred, the acceptance by the indorsee of a new note, while it discharges the mortgagee as indorser of the old note, in the absence of an agreemeat to the contrary, does not extinguish the debt or impair the mortgage security." § 209. In order to constitute notes to be renewals which shall take the place of the notes secured by the mortgage, it is not neces- sary that they shall be issued for the same amounts, at the same periods, and that each successive note has been appUed to take up its immediate predecessor, and it will be sufficient if the notes finally given represent the original debt which the mortgage was made to secure.' So, a mortgage lien to indemnify mortgagees against loss by reason of their having accepted drafts for the accommodation of the mort- gagors, is not necessarily lost by a change of the evidences of liability, as where the first acceptances are taken up with the proceeds of hke acceptances made for that purpose.' § 210. A change in the renewal obligation that wiU change the identity of the debt will be fatal to its connection with the mortgage. Thus, if a note payable in any legal tender and secured by mortgage is surrendered on the receipt of a new contract, payable in gold, the new debt cannot be collected under the original lien.' So, where a party having a note secured by mortgage, after institution of pro- ceedings in bankruptcy by him against the maker, entered into an agreement with the other creditors of the maker to dismiss the pro- ceedings in bankruptcy against the maker, and to take a new note, payable in two years from date with interest, in the absence of proof of a contrary intention of the parties, it was held that the mortgage was released." And where A gave a mortgage to B, to indemnify him in case he should have to pay the debt of A, conditioned that A should pay and satisfy the note by renewal or otherwise, and A re- V. Parmalee, ig Vt. 172 ; Oliphant v. ' Gault v. McGrath, 32 Penn. St. 392. Esterly, 36 Ark. 69; Watkins v. Hill, 25 *Choteau v. Thompson, 3 Ohio St. Mass. (8 Pick.) 522. 424. ' Darst V. Bates, 95 111. 493. ' Pratt v. Stearns, 31 Cal. 78. ' McGuire v. Van Pelt, 55 Ala. 345. ' Jarnagan v. Gaines, 84 111. 203. § 211.] TIME FOR PAYMENT OF MORTGAGE DEBT. 145 newed his note witli difEerent securities, whereupon B assigned the mortgage to the new securities ; it was held that the rights of B ceased upon the renewal and that the mortgage could not be assigned so as to cut o£E the intervening rights of other mortgagees.' § 211. Examples of extensions by renewals of notes. — In Brviickerhoff v. Lomsmg (4 Johns. Ch. 65), a mortgage was given as security for $1,050, represented by a note given to a bank, which note was renewed from time to time, it being reduced to $400, and afterward increased to $T20 ; it was held that the mortgage stood as security for the last note. It was thought that the increase of the debt on the periodical renewal, provided that the debt was kept with- in its original limits, did not affect the security, and that the last note and all intermediate renewals represented the same debt for which the mortgage was given, subject only to those fluctuations in amount which are customary in such bank operations. In Chapman v. Jenkins (31 Barb. 164), a maker of a note ex- ecuted a chattel mortgage to his sureties and indorsers, to secure them for their liability as such, and they were duly charged by notice of non-payment. The note was paid by the proceeds of a new note made by the mortgagor and indorsed by the mortgagees, for the ex- press purpose of raising money to pay the first note. It was held that the mortgage continued as security for the amount of the second note, and that parol evidence was competent to show the relations of the parties, and that it was not intended that the payment of the first note with the proceeds of the second should extinguish the mortgage. In Rogers v. The Traders' Ins. Co. (6 Paige, 583), the mortgagee of a steamboat, who had taken the mortgage as security for the pay- ment of a note indorsed by him, was compelled to pay the note when it became due, and to save the credit of the drawers, he gave them his new note to take up the old one, instead of suffering it to be pro- tested. It was held that the debt for which the mortgage was given was not extinguished, and that the mortgage still remained a yaUd lien upon the boat for the security of the amount due the mortgagee. In Pond V. Clarh (14 Conn. 334), a mortgage was given to secure the mortgagee for his indorsement of certain specified notes. Such notes as they became due were renewed by the substitution of other notes or drafts having different names upon them, but the obligation ' Bonfaam v. Gallaway, 13 III. 68. 10 146 MORTGAaES OF EEAL PKOPERTT. [§ 212. of the original indorsement by the mortgagee was preserved through all the renewals, and the substituted paper was ultimately discharged by him. It was held that the mortgage remained in full force for the substituted indorsements. § 213. Extension does not, in general, impair lien. — It is ex- tremely well settled in this State that the taking of a debtor's note does not merge or extinguish the demand for which it is taken,' al- though it be expressly agreed to take the note in satisfaction.'' It is true that a mortgage is but an incident of the debt, so that when the debt is gone, that is gone also ; but it is an error to consider a mortgage as incidental to the note instead of the demand. Accurately speak- ing, a note is not a debt at all, any more than any other mere promise. Unless founded on a consideration, it is good for nothing between the original parties. A note is really the evidence of a debt, and a mort- gage to secure a note is simply a security for the debt evidenced by the note. The conclusion is inevitable that the security stands until it is in some way separately cancelled, or until the debt itself is dis- charged. Taking a substituted note does not affect the debt, and con- sequently cannot affect the security.' Taking a note of the debtor as collateral security merely to a bond indebtedness without any agreement, either express or implied, for an extension, has been held not to operate as a binding extension so as to release the lands of a surety.* But an extension of the time of pay- ment of a note secured by mortgage without the consent of the surety, if this extension is made by accepting- a renewal note, has been held to operate as a discharge." The validity of the lien is not impaired though the time for the payment of the debt be extended by stipulation between the original parties after the land upon which it is a charge has been transferred to a purchaser." Though this will be different where the land stands as a surety for the debt of a person other than its owner." So, ' Gregory v. Thomas, 20 Wend. 17 ; Duer, 107 ; Gahn v. Niemcewicz, 11 Waydell v. Luer, 5 Hill, 448 ; Cole v. Wend. 312, afB'g s. c. 3 Paige, 614. Sackett, I Hill, 516. "Scott v. Stockwell, 65 How. 249, » Cole V. Sackett, i Hill, 516 ; Waydell affi'd 28 Hun, 641. V. Luer, 5 Id. 448 ; Hawley v. Foote, 19 * Ayres v. Wattson, 57 Penn. St. 360 ; Wend. 516: Frisbie v. Larned, 21 Id. Hubbard v. Gurney, 64 N. Y. 457. 450, 452. ' Kuhrs V. McGeah, 38 Ohio St. 468. ' Hill V. Beebe, 13 N. Y. (3 Kern.) ' The Bank of Albion v. Burns, 46 556, 562 ; Butler v. Miller, i N. Y. (i N. Y. 170, afB'g 2 Lans. 52 ; Smith v. jCpmst.) 496, 500 ; Westcott v. Gunn, 4 Townsend, 25 N. Y. 479. Sec. 215. §§213-214.] TIME FOE PAYMENT OF MORTGAGE DEBT. 147 an extension of time does not impair the security so as to give any new rights to the holders of junior liens.' EFFECT OF EXTENSION ON EIGHTS OF STJEETIES. § 213. When an extension of time will discharge a surety. — If the payment of the mortgage debt is secured by the collateral obli- gation of some other person who occupies the position of a surety with relation to it, such surety will be discharged by any valid and binding agreement made by the mortgagee with the principal debtor, without the consent of the surety, by which the time for the payment of the mortgage debt is extended or postponed ; and this, not only whether any loss has thereby happened to the surety or not, but even if it has been an actual benefit.' One reason for this rule may be found in the fact that the extension of time makes a material change in the contract ; the original agreement is thereby annulled, and the surety is under no obligation under the agreement which is substi- tuted for it.' Another reason, and this is the one which has received the most favor in courts of equity, is that by the extension the surety may be delayed for a time in the assertion of his equitable claim to make payment and be subrogated to the rights of the creditor.* The surety is by such extension also delayed in the right which he would otherwise enjoy, of coming into equity by a bill against the debtor and the creditor, to compel the debtor to make payment, and to have the estate upon which the debt is a charge sold for its satisfaction.' § 214. If the principal debtor gives to his creditor his note, payable " in one day after date," the surety is discharged.' The acceptance of a promissory note made for a definite time, as a condi- tional payment, operates as an extension ; ' though it has been held ' Bank of Utica v. Finch, 3 Barb. Ch. 30 Vt. 711 ; Myers v. First Nat. Bk., 75 293; Naltner v. Tappey, 55 Ind. 107; 111. 257 ; Del. L. & W. R.R. Co.'v. Burk- Whittacre v. Fuller, 5 Minn. 508. hard, 36 Hun, 57. ^Gahn V. Niemcewicz, II Wend. 312 ; 'Rathbone v. Warren, 10 Johns. Huffman v. Hulbert, 13 Id. 375 ; Miller 587. V. McCan, 7 Paige, 451 ; Fox v. Parker, ■'Bangs v. Strong, 10 Paige, 11 ; King 44 Barb. 541 ; Haskell v. Burdette, 35 v. Baldwin, 2 Johns. Ch. 554, 560. N.J. Eq. 31 ; Kane v. Cortesy, 100 N. 'King v. Baldwin, 2 Johns. Ch. 554, Y. 132 ; Bangs v. Strong, 7 Hill, 250 ; 560 ; s. c. 17 Johns. 384 ; Hayes v. Ward, Murray v. Marshall, 94 N. Y. 611 ; Spcn- 4 Johns. Ch. 123, 132 ; Story's Eq. Jur. cer V. Spencer, 95 Id. 353 ; Lim. Bank § 639. V. Mallett, 34 Me. 547 ; Gifford v. Allen, ^Fellows v. Prentiss, 3 Den. 512. 3 Mete. (Mass.) 258 ; Wright v. Bartell, 'Hubbard v. Gumey, 64 N. Y. 457 ; 43 N. H. 548 ; People's Bank v. Pearson, Ayres v. Wattson, 57 Penn. St. 360. 148 MORTGAGES OP EEAL PROPERTY. [§ 215. that this is not the case if the note is received as collateral security merely.' In Newswrn v. Fvnch (25 Barb. 175) a promissory note for $25 was signed by the defendant as surety. Before it became due the maker of the note paid $10 on account, and, in consideration of this payment, it was agreed that the maker of the note "might have his own time to pay the balance," and it was held that this extended the time after the note became due by its terms for such a period as, under all the circumstances of the case, should be reasonable, and that the surety was discharged. A defense of a surety to a promissory note alleging that the payee, without. the knowledge or consent of the surety, released a mortgage on real estate executed by the principal maker to the payee to secure the note, and extended the time for a definite period after maturity, in consideration of a new mortgage, is good.^ § 315. Land of one person mortgaged for debt of another. — It is not necessary that the whole estate of one person should be bound as collateral to the debt of another in order to give him the rights of a surety. It is sufficient if any part of his property is pledged in such a way that it may become answerable for an obligation which it is the duty~of some other person or estate, in the first instance, to pay and discharge. If, therefore, the real estate of a wife is mortgaged by her to secure the payment of her husband's debt, her lands stand as surety for the obligation, and any valid and binding extension of the time of payment, made without her consent, vrill discharge the lien." But where a husband and wife executed a note and mortgage on the wife's land to indemnify an indorser on the husband's note, it was held that the extension of the time of payment of the husband's in- dorsed note did not release the mortgagor, the mortgage note never having been extended.* Payment by a debtor of a part of the debt after the maturity of the whole is not a consideration sufficient to make an agreement of extension binding, and a surety will not be discharged thereby.' ' Scott V. Stockwell, 65 Hpw. 249, 22 Kans. 363 ; Chrlstner v. Brown, 16 afiS'd 28 Hun, 641. Iowa, 130 ; Metz v. Todd, 36 Mich. 473 ; 'Holland v. Johnson, 51 Ind. 346. Insurance Co. v. O'Donnell, 41 Ohio St. ' The Banlc of Albion v. Burns, 46 N. 650 ; Eisenberg v. Albert, 40 Ohio St. Y. 170 ; s. c. 2 Lans. 52 ; Smith v. 631 ; Haskell v. Burdette, 35 N. J. Eq. Townsend, 25 N. Y. 479 ; Gahn v. Niem- 31. cewicz, II Wend. 312 ; Niemcewicz v. * Wise v. Willard, 4i-Ohio St. 679. -.Gahn, 3 Paige, 614 ; Hubbard v. Ogden, " Ritch v. Smith, 60 How. 13 ; Id. 157. § 216.] TIME FOE PAYMENT OF MOBTGAGE DEBT. 149 An extension of the mortgage debt will not discharge sureties on an undertaking to pay an occupation rent, pending an action to foreclose.' § 216. Release of mortgagor by extension of time to his grantee. — ^In the cases cited in which sureties hare been discharged by the conduct of creditors in extending the time of payment, or in refusing to enforce payment when they might have done so, the rela- tionship of principal and surety has, in general at least, been estab- lished/by contracts to which in each ease the creditors, the debtors, and the sureties, all were parties. The relationship of principal and surety was, in every case, one which was created by the contract of the parties. But when reference is had to rights under mortgages of land, there are many cases where the law designates one .person or fund as being the proper one for the satisfaction of the mortgage debt, and other persons or funds as sureties, and where, these rights do not arise from the original form of the contract under which the mortgagee claims, but from equitable considerations depending on contracts or transactions to which the mortgagee was a stranger. As an example of such a question, the case may be put of a mort- gagor who conveys the mortgaged estate to a person who assupaes lie payment of the mortgage debt. The mortgagor, after this transac- tion, is, as between himself and his grantee, only obligated to pay the debt if his grantee does hot, and in the language of the decisions he is spoken of as being a surety.' If the grantee does not personally obligate himself to pay the debt, still, if the conveyance be made subject to the mortgage, the land is the primary fund out of Avhich the debt should be collected, and the mortgagor stands as its surety.' Where the grantee has assumed the payment of the mortgage debt, making himself personally liable for its payment, a binding extension of time to the grantee has been adjudged to release the mortgagor on the principles applicable to all sureties.' ' Cassidy v. Schedel, g Hun, 340, * Calvo v. Davies, 73 N. Y. 211 ; 29 affi'd 71 N. Y. 603. Am. R. 130; George v. Andrews, 60 ' Rubens v. Prindle, 44 Barb. 336 ; Md. 26 ; 45 Am. R. 706 ; Paine v. Jones, Cornell v. Prescott, 2 Barb. r6 ; Tripp 76 N. Y. 274 ; Fish v. Hayward, 28 Hun, V. Vincent, 3 Barb. Ch. 613 ; Jumel v. 456 ; contra, Perkins v. Squeer, i T. & Jumel, 7 Paige, 591 ; Halsey v. Reed, 9 C. 620 ; Meyer v. Lathrop, 10 Hun, 66, Id. 446 ; Marsh v. Pike, 10 Id. 595 ; affi'd 73 N. Y. 315 ; Jester v. Sterling, Blyer v. MonhoUand, 2 Sandf. Ch. 478 ; 25 Hun,. 344. In Ohio the mortgagor is Ferris v. Crawford, 2 Den. 595 ; Mills only released to the extent of loss suf- V. Watson, i Sweeney, 374. fered by him. Feeters v. Lamborn, 43 " Johnson v. Zink, 52 Barb. 396. Ohio St. 144. 150 MOETGAGES OF EEAL PEOPEETT. [§§217-218. Where the grantee has not personally covenanted to pay the mort- gage, the conveyance being made merely subject to it, the mortgagor has also been held to be discharged by such an extension, on the ground that, although no technical relation of principal and surety exists between the mortgagor and his grantee, still, as the land is the primary fund for the payment of the debt, in respect thereto and to the extent of its value the grantee stands in the relation of a principal debtor, and the grantor has an equity similar to that of a surety." § 217. Extension reserving rights of surety. — ^When, in an agreement between a creditor and the principal debtor extending the time of payment, the remedies against the surety are reserved, the agreement does not operate as an absolute, but only as a qualified and conditional, suspension of the right of action. The stipulation in that case is treated in effect as if it was made in express terms subject to the consent of the surety, and the surety is not thereby discharged." § 318. Extension to discharge surety must be for good con- sideration. — ^But there is no positive duty incumbent on the creditor to prosecute measures of active diligence ; and therefore mere delay on his part, at least if some other equity does not interfere, unaccom- panied by any valid contract for such delay, will not discharge the surety.' The extension must be part of an agreement for that pur- pose, of such a nature that it can be enforced by the debtor ; that is, it must be upon a good consideration.* It must also have been made without the consent of the surety, for it would be unjust to allow a man to evade his obligations because of conduct of his creditor which he himself had encouraged or sanctioned.' In a case where a wife mortgaged her land to secure a debt of her husband, upon which she was liable only as surety, and the mortgagee! ' Spencer v. Spencer, 95 N. Y. 353 ; Co. v. Hinman, 34 Id. 410 ; s. c. 13 Abb. Murray v. Marshall, 94 N. Y. 611, over- no ; Merritt v. Lincoln, 21 Barb. 249 ; ruling Penfield v. Goodrich, 10 Hun, 41, Schroeppel v. Shaw, 3 N. Y. (3 Comst.) and contra, Maher v. Lanfrom, 86 111. 513. 446 ; King v. Baldwin, 2 Johns. Ch. 554. » Per Andrews, J., in Calvo v. Da- * Draper v. Romeyn, 18 Barb. 166 ; vies, 73 N. Y. 211, 217 ; 29 Am. R. 130 ; Zane v. Kennedy, 73 Penna! St. 182. Bangs V. Strong, 10 Paige, 18 ; Kearsley ^ Wright v. Storrs, 32 N. Y. 691, affi'g V. Cole, 16 M. & W. 128 ; Oriental Fi- 6 Bosw. 600 ; La Farge v. Herter, 11 nancial Corporation v. Overend, Gurney Barb. 159 ; Bangs v. Mosher, 23 Id. 478 ; & Co., 7 H. of L. Cas. 348 ; Morgan v. Tyson v. Cox, Turn. & R. 395 ; Smith Smith, 70 N. Y. 537. v. Winter, 4 M. & W. 519 ; Dubuisson ' Story's Eq. Jur. § 326 ; Goldsmith v. v. Folkes, 30 Miss. 432 ; Shook v. State, Brown, 35 Barb. 484 ; Merchants' Ins. 6 Ind. 113. §§ 219-220.] TIME POR PATMENT OF MOKTGAGE DEBT. lol voluntarily granted indulgence to the husband, it was held that this did not operate to release the wife in the absence of any showing that the mortgagee had in any way agreed or bound himself to give fur- ther time.' § 219. Usurious consideration for extension. — An agreement to extend the time for the payment of a debt granted upon a usurious consideration is void if the borrower so elects, but it will be binding upon the lender accepting the usury." If the person submitting to the usury prefers to do so in order to obtain the additional time, it win not be competent for the creditor to make his own violation of law a reason for refusing to perform' his bargain, but the borrower cannot insist upon a credit for the amount paid, and at the same time claim the benefit of the extension.' If the agreement by which the mortgage was extended shall have been made upon a usurious consideration, it will nevertheless operate to extinguish the claims against the surety. The defense of usury is personal to the borrower, and it is not competent for the usurer to claim any advantage because the contract which he has assumed to make is such that the law, at the instance of the other party to it, will declare it to be void.' § 220. Creditor must know. — In order that the contract for for- bearance shall operate to release the surety, it is necessary that the mortgagee shaU, at the time of making it, know that the relation of principal and surety exists.' But if the relation of the parties ap- pears by matter of public record, existing at the time when the mort- gage is executed, or if the mortgagee subsequently receives notice of facts sufficient to put him upon inquiry, he is bound by all of the facts which a proper examination of the public records or proper in- quiry elsewhere would disclose.' He cannot close his eyes and then plead his blindness as an excuse for trespassing upon the equitable rights of a surety. ■ Frickee v. Donner, 35 Mich. 151. 10 Paige, 76. Contra, Vilas v. Jones, i ' Billington v. Wagoner, 33 N. Y. 31 ; N. Y. (i Comst.J 274 ; Schroeppel v. Draper v. Trescott, 29 Barb. 401 ; con- Shaw, 5 Barb. 580. trd, Jones v. Trusdell, 23 N. J. Eq. 555 ; *Elwoodv. Deifendorf, 5 Barb. 398. Id. 121. *Bank of Albion v. Burns, 46 N. Y. ' Church V. Maloy, 70 N. Y. 63, aflS'g 170 ; Smith v. Townsend, 25 N. Y. 479 ; 9 Hun, 148. Guion v. Knapp, 6 Paige, 41, 42 ; How- ■• Billington v. Wagoner, 33 N. Y. 31 ; ard Ins. Co. v. Halsey, 4 Sandf. 565 ; s. Draper v. Trescott, 29 Barb. 401 ; Miller c. affi'd 8 N. Y. (4 Seld.) 271. V. McCan, 7 Paige, 451 ; Vilas v. Jones, 152 MORTGAGES OF EBAL PEOPERTT. [§§ 231-222. WHEN A EEFUSAL BY A CEEDITOE TO COLLECT A DEBT DISCHAEGES THE STJEETY. § 221. Creditor should collect debt on request of surety. — While, as has already been said, mere neglect of the creditor to en- force payment of a debt when due will not discharge the surety where there has been no valid agreement for an extension, and where the creditor is not requested by the surety to take proceedings for the satisfaction of his demands,' the creditor cannot refuse to collect when called upon by the surety to do so, without taking upon him seK the risk of the subsequent insolvency of the principal debtor or deprecia- tion in value of the primary fund. Whatever may have been the current of decision elsewhere, the principle was settled in this State many years ago, and has since been steadily maintained, that if a surety request a creditor to collect the debt from the principal, and the creditor refuse or neglect to do so at a time when it is collectible, and from a subsequent change of circumstances it becomes uncollecti- ble, the surety is by such conduct of the creditor exonerated from his liability. ° § 233. Reason of the rule.^It is manifest that if the creditor actually collude with the principal to cast the debt upon the surety, the latter should be exonerated ;' so also if, by omitting to do an act on the requirement of the surety, which equity and his duty to the surety enjoin on him to do, the surety is injured by the omission, the latter ought not to be held. It is inequitable and unjust that the surety's liability should continue from improper motives, at the op- tion and for the convenience of the creditor and against the surety's will and express wish, until the principal becomes irresponsible. Duty enjoins the creditor to enforce payment from the party prima- rily liable ; and if requested by the surety to collect the debt when it is collectible from such party by measures of active dihgence, and the creditor refuses or neglects to do it until it becomes uncollectible from the principal, such conduct ought to be a defense in equity to •Goldsmith v. Brown, 35 Barb. 484 ; man, 25 N. Y. 552, 555 ;■ King v. Bald- Merchants' Ins. Co. V. Hinman, 34 Id. win, 17 Johns. 384 ; Pain v. Packard, 13 410 ; s. c. 13 Abb. no ; Merritt v. Lin- Johns. 174 ; Warfield v. Trickey, 23 W. coin, 21 Barb. 249 ; Schroeppel v. Shaw, Dig. 92. Contra, Smith v. Freyler, (Mon- 3 N. Y. (3 Comst.) 446 ; King v. Bald- tana) 29 Alb. L. J. 448. win, 2 Johns. Ch. 554. * Sailly v. Elmore, 2 Paige, 497. '' Per Wright, J., in Rerasen v. Beek- §§ 223-225.] TIME roE payment of mortgage debt. 153 any suit brouglit against the surety to charge him with the payment of the debt.i § 223. Request to collect must be explicit. — In order to dis- charge the surety by reason of a neglect on the part of the creditor, it must be shown that the creditor was requested to enforce the col- lection of the debt by due process of law. Nothing short of an ex- plicit expression of the desire of the surety that the creditor shall resort to his legal remedies, will be sufficient." § 224. Surety only relieved to extent of actual injury. — But failure on the part of the creditor to comply with the request of the surety to enforce payment of the debt, will not operate to exonerate the surety, unless it results iu actual injury to him, and then only to the extent of such injury. The solvency of the debtor, or the suffi- ciency of the fund at the time when the request to collect was made, and subsequent insolvency or insufficiency, are essential parts of the defense of the surety, and must be alleged and proven by him.' A mere possibility or probability that compliance with the request of the surety would have resulted in the satisfaction of the debt, will not exonerate him, unless it be shown that the debt could have been col- lected out of the property primarily liable by legal process.* § 225. No one not really a surety will be relieved. — The doc- trine that a surety is entitled by notice to call upon the creditor to proceed to collect the debt by legal proceedings against the principal on the debt becoming due, although no such obligation is imposed by the contract, and that the creditor f aihng to comply is discharged to the extent of the loss sustained by the delay, has not always been regard- ed with approval by the courts, and the tendency is not to enlarge or extend it. This doctrine, though frequently criticised, has not been overruled, but the courts have not been disposed to apply it except in cases where the surety became such at the inception of the contract, or that relation was created by dealings between the parties originally ' Per Wright, J., in Remsen v. Beek- v. Davies, 44 N. Y. Super. (12 J. & S.) man, 25 N. Y. 552, 557 ; Russell v. Wein- 172 ; 56 How. 440 ; Fulton v. Matthews, berg, 4 Abb. N. C. 139, affi'g 2 Id. 422 ; 15 Johns. 433 ; Denick v. Hubbard, 27 16 Alb. L. J. 164 ; Loomis v. Balheimer, Hun, 347. 5 Abb,. N. C. 263. 2 People v. Berner, 13 Johns. 383 ; 'Hunt V. Purdy, 82 N. Y. 486 ; Teles Huffman v. Hulbert, 13 Wend. 377; V. Adee, 84 N. Y. 222 ; Singer v. Trout- Merrittv. Lincoln, 21 Barb. 249; Wheeler man, 49 Barb. 182 ; Goodwin v. Simon- v. Benedict, 36 Hun, 478. son, 74 N. Y. 133 ; Mutual Life Ins. Co. ^ Herrick v. Borst, 4 Hill, 650. 154 MORTGAGES OF REAL PROPERTY. [§§ 226-227. bound bj tlie contract subsequent thereto of which the creditor had notice.' Thus, the court refused to apply the rule to the case of an indorser for value on the ground that the indorser, though in the nature of a surety, is answerable upon an independent contract, and it was his duty to take up the biU when dishonored.'' And in a case where there was a guaranty of payment made by a vendor on the sale to the plaintifE of a bond and mortgage, the former receiving the amount of the security as the consideration of the transfer, the court held the assignor's engagement, though collateral in form, was in substance an original undertaking, and that it was his duty to pay the mortgage debt when it became due, and that he could not by any notice impose upon his assignee the duty of proceeding against the land.' §236. Surety discharged by collusion between debtor and creditor. — The surety will also be discharged without any request being made by him for the collection of the debt, if the principal debtor wrongfully colludes with the creditor to retain his liability ; as if the money be offered by the debtor to the creditor on the day it falls due, or afterward, and he, without the consent of the surety, re- quests the debtor to retain it longer, for this operates as a fraud upon the surety.* But to accomplish this result there should be a formal tender.' It has been held that where a mortgagee, out of kindness for the heirs of the mortgagor, and in the belief that the real estate would rise in value, delayed foreclosure until the property had so deprecia- ted as to be an inadequate security, he would not be allowed to pro- ceed against the administrators for the collection of the deficiency, they ha-sdng paid out the whole personal property for the payment of other debts, knowing that the real estate was, at the time of the death of the mortgagor, sufficient to pay the debts charged upon it." § 227. Guarantor of collection released by neglect to sue. — Where a mortgage is assigned with a guaranty of collection, it is a condition precedent that the creditor shall diligently endeavor to collect the amount from the principal debtor by exhausting the ordi- nary legal remedies for that purpose, and if he fails to do this, the ' Per Andrews, Ch. J., in Newcomb *Sailly v. Elmore, 2 Paige, 497. V. Hale, 90 N. Y. 326, 329. ^ Clark v. Sickler, 64 N. Y. 231. 'Trimble V. Thorne, 16 Johns. 151. * Johnson v. Corbett, 11 Paige, 265, ' Newcomb v. Hale, 90 N. Y. 326. 272. §§228-229.] TIME roE payment of moetgage debt. 155 guarantor is discharged. So, the allowance of tlie lapse of one term after the debt becomes due, without suit against the principal, has been held to effect such discharge ;' and a delay of six months in foreclosing a mortgage has been determined to release the guarantor." A delay of two years and nine months after the mortgagee had been expressly requested by such a surety to proceed and enforce the col- lection of the demand while the security was probably good, has been adjudged sufficient to require the release of the surety.' This rule does not extend to the case of a guararftor of payment whose duty it is to make payment in the first instance.* § 328. Nature of the " default clause." — It is a common thing to insert in bonds secured by mortgages, a clause known as a " default clause," which is to the effect that, if any instalment of interest or principal, or any tax on the mortgaged property shall remain unpaid for a certain number of days after it becomes due, the principal sum shall, at the option of the mortgagee, become due and payable. Such a stipulation is entirely valid and will be enforced by the courts ; it does not impose any penalty upon the mortgagor, and he must abide by the contract which he makes. The time of payment is the only thing which is contingent, and the parties have a perfect right to make the prompt payment of interest, or any other condition or event, the criterion which shall determine when the principal shall become due.' § 229. Default clause is for benefit of mortgagee only. — If the stipulation is drawn so as to provide that the entire amount of the debt shall become due on a default in payment of an instalment of interest or the like, it is stiU for the benefit of the mortgagee only. ' Kies V. Tifft, i Cow. g8. 28 Barb. 29 ; Rubens v. Prindle, 44 Barb. 'Craig V. Parkis, 40 N. Y. 181 ; see 336; Dwight v. Webster, 32 Barb. 47 ; also Moakley v. Riggs, 19 Johns. 69 ; s. c. 19 How. 349 ; s. c. 10 Abb. 128 ; Loveland V. Shepard, 2 Hill, 139 ; Mer- Hunt v. Keech, 3 Abb. 204; Elwood v. ritt V. Bartholick, 36 N. Y. 44. Wolcott, 32 Kans. 526 ; Sharp v. Barker, ^ Northern Ins. Co. of N. Y. V. Wright, 11 Kans. 381 ; Stanclifts v. Norton, 11 13 Hun, 166, affi'd 76 N. Y. 445. Id. 218 ; Noonan v. Lee, 2 Black (U. S.) *Newcombv. Hale, 90 N. Y. 326. 500; Gulden v. O'Byrne, 7 Phila. (Pa.) ' Crane v. Ward, Clarke, 393 ; Noyes 93 ; Redman v. Punington, 65 Cal. 271 ; V. Clark, 7 Paige, 179 ; Valentine v. Van - Lowensteih v. Phelan, 17 Nev. 429 ; Wagner, 37 Barb. 60 ; s. c. 23 How. Detweiler v. Breckenkamp, 83 Mo. 45 ; 400 ; Ferris v. Ferris, 16 How. 102 ; s. c. Moore v. Cameron, 93 N. C. 51. 156 MOKTOAGES 0¥ KEA.L PEOPERTr. [§ 230. and it cannot be taken advantage of by the mortgagor so as to permit him to pay the debt, though the time originally stipulated for has not expired.' A clause of this kind does not operate against the mortgagee so as to set the statute of limitations running against him as to the instal- ments of the debt not due." And a foreclosure on default of a first note, and payment thereof out of proceeds of sale, will not be a bar to an action to charge an indorser on one of the notes falling due sub- sequently.' § 230. Construction of provision as to default. — The clause making the whole amount due on failure to pay an instalment of in- terest or of principal, need not be recited in the mortgage if it con- tains a reference to the bond containing such clause, as by saying that payment is to be made " according to the condition of a certain bond bearing even date with the mortgage." The object of the mortgage is to reinforce that obligation ; and a reference in the mortgage to the paper containing such obligation, makes the bond a part of the obli- gation for all essential purposes.' But the converse of this proposition is not true, and if the default clause be inserted in the mortgage and be not included in the bond, the debt may become due for the purpose of enforcing the lien, when only an instalment of it would be due for the purpose of an action at law to recover the debt. This was held in a case where a mortgage of a railroad gave to the trustees the right to enforce the entire mort- gage on any default, but the separate bonds which were secured by the mortgage contained no such provision." The court will not imply any agreement of this kind, and when a mortgage authorized a sale of the mortgaged premises for the pay- ment of the whole debt, it was held that this merely authorized a statutory proceeding by advertisement, and that an action to foreclose could be stayed by payment of the instalment due.' ' Lowenstein v. Phelan, 17 Neb. 429 ; ' McClelland v. Bishop, 42 Ohio St. S. & M. R.R. Co. V. Lancaster, 62 Ala. 113. 555 ; McClelland v. Bishop, 42 Ohio St. * Dimon v. Dunn, 15 N. Y. 498, rev'g 113 ; Mallory v. West Shore R.R., 35 N. s. c. su6 nam. Dimon v. Bridges, 8 How. Y. Supr. Ct. 174 ; Morgan v. Martin, 32 16. Mo. 438 ; contra, National Bank v. Peck, ' Mallory v. The West Shore Hudson 8 Kans. 8. River R.R. Co., 35 N. Y. Sup.-(3 J. & S.) ' Capehart v. Dettrick, 91 N. C. 344 ; 174. Howell V. Western R.R. Co., 94 U. S. " Holden v. Gilbert, 7 Paige, 208. 463. § 231.] TIME FOE PAYMENT OP MOETGAGE DEBT. 157 The mere production of tlie bond and mortgage, from whicli it appears that more than the stipulated time has expired since the in- stalment of interest became due and default was made thereon, is suflScient prima facie to entitle the mortgagee to judgment for the whole amount of principal and interest.' Unless so required by the terms of the bond and mortgage, it is not necessary to give the mortgagor notice of an intention to exercise an option to make the whole indebtedness due on failure to pay in- terest." § 231. Place where interest must be paid. — Payment of inter- est must be made to the creditor himself, or to some person author- ized by him to receive it, and the creditor may require it to be paid to him at any place vrithin the State.' In the absence of any fraud or trick on the part of the mortgagee, it is no excuse for the mortgagor that he could not find the mortgagee in season to make payment." But if the mortgagee has been guilty of any fraud or oppressive conduct, the court will not allow him to profit by his own wrong, and will stay his proceedings." In general a debtor is bound, if no place of payment is specified in the contract, to seek the creditor and make payment to him person- ally. But this rule is subject to the exception "that if the creditor is out of the State when payment is to be made, the debtor is not obliged to follow him, but readiness to pay within the State in that case will be as effectual as actual payment to save a forfeiture. It may perhaps be that, although a' creditor is absent from the State when a payment is due, if he has a house therein where he resides, it is the duty of the debtor to tender the money there, or otherwise his obligation is not discharged. However this may be as a general rule, no such duty rests upon a mortgagor, and he is not obliged to part with his money to a third person without satisfactory evidence of his ' Sowarby v. Russell, 6 Rob. 322 ; 4 ' Gnissy . v. Schneider, 50 How. 134, Abb. N. S. 238. affi'd 55 How. 188. ' Howard v. Farley, 3 Robt. 599 ; ^ Bennett v. Stevenson, 53 N. Y. 508 ; Hunt V. Keech, 3 Abb. Pr. 204 ; Hood- Asendorf v. Meyer, 8 Daly, 278 ; Dwight less V. Reid, 112 111. 105 ; Marston v. Brit- v. Webster, 32 Barb. 47 ; s. c. 19 How. tenham, 76 Id. 611 ; Loan & Trust Co. 349 ; 10 Abb. 128 ; contra, Noyes v. V. Munson, 60 Id. 371 ; Buchanan v. Clark, 7 Paige, 179. Life Ins. Co., 96 Ind. 510; Young v. ^Ferris v. Ferris, 16 How. 103; 28 McLean, 63 N. C. 576 ; contra. Dean v. Barb. 29, 32 ; Western Bank v. Sher- Applegarth, 65 Cal. 391. wood, 29 Barb.-383 ; Broderick v. Smith 15 How. 434 ; 26 Barb. 539. 158 MORTGAGES OP EEAL PBOPEETY. [§§232-233. authority. If the mortgagee desires that the interest should be paid to any agent of his within the State, he should notify the mortgagor that such agent is entitled to receive it, and if he leaves the State without doing so, the mortgagor is not obliged to tender the money at his residence, and failure to do so will not operate to make a mort- gage due, under a default clause.' "Where an attorney, authorized to receive payment, wrote to the debtor requiring payment to be made to him at his office at a time named, and then absented himself therefrom, leaving a boy in charge, a tender to the boy was held sufficient to save costs." § 233. Excusing default. — ^Wbere the plaintiff, an assignee of the mortgage, colluded with his assignor to prevent the mortgagor from ascertaining who was then the owner of the mortgage, and thus prevented him from making payment to the right person within the time fixed by the condition, a stay of proceedings was ordered by the court on the ground that, under such circumstances, it was inequitable to permit the assignee to take advantage of the breach of the con- dition.' Mere negligence of the mortgagor, or forgetfulness as to the place or person to whom payment is to be made, will not excuse non-pay- ment or prevent the whole amount of the debt from becoming due pursuant to the terms of the mortgage because of such default.' The court has no more power to relieve a party from the effect of a " default clause " in a mortgage where the default complained of is the non-payment of a tax imposed on the mortgaged premises, than it would have if the default were in non-payment of an instalment of interest.' The fact that the mortgaged estate belongs to a mere surety, as to a wife, while the debt was the husband's, can make no difference, for when the whole debt becomes due the court has no power to stay proceedings on payment of mere interest and costs.' § 233. Practice when default is excusable. — ^Wten the mort- gagor has a valid excuse for not paying interest in time, he cannot pay the money into court on an ex parte order. The proper practice 1 Hale V. Patton, 6o N. Y. 233 ; Task- * Spring v. Fisk, 21 N. J. Eq. 175. er V. Bartlett, 5 Cush. 359 ; Houbie v. " O'Connor v. Shipman, 48 How. 126 ; Volkening, 49 How. i6g. Stanclifts v. Norton, 11 Kans. 218 ; Sharp " Kirton v. Braithwaith, i M. & W. v. Barker, Id. 381. 3io;Grussyv.Schneider,5oHow.i34,i37. 'Hale v. Gouverneur, 4 Edw. 207; ' Noyes v. Clark, 7 Paige, 179. Claflin v. Reese, 54 Iowa, 544. § 234.] TIME FOE PAYMENT OF MOETGAGE DEBT. 159 is to offer to pay the amount to tlie plaintiff, and, on his refusing to receive it, to apply to the court, upon papers excusing the default, for an order staying proceedings in the action.' In a proper case, and uppn imposing suitable terms, an application of this kind will be en- tertained, thoiigh the motion be not made until the action to foreclose is at issue.' § 234. When default of payment of interest is waived. — If the mortgage shall have become due by operation of the agreement rela- tive to prompt payment of interest, an unconditional payment of interest will waive the default and revive the term of credit.' But if the mortgagee shall accept payment of an instalment of principal or interest larger than the interest in default, he will not thereby waive his right to insist upon the payment of the balance.^ Where, after a default had occurred in payment of interest, the mortgagor and mortgagee entered into an agreement to forgive the default on the performance by the mortgagor of certain conditions, it was held that, in the absence of full performance of such conditions, the mortgagee's right to insist upon the default still remained, even though payment of interest, which was one of the conditions, had been made and accepted." The right to insist that the principal has become due is not waived by the commencement of an action to foreclose for non-payment of interest, and upon the expiration of the time stipulated in the interest clause, a supplemental complaint may be filed for the collection of the principal.' ' Thurston v. Marsh, 5 Abb. 389 ; s. v. Sheldon, 5 Cow. 448 ; Lawson v. Bar- c. 14 How. 572. ron, 18 Hun, 414. ' Lynch v. Cunningham, 6 Abb. 94 ; * Malcolm v. Allen, 49 N. Y. 448 ; Asendorf v. Meyer, 8 Daly, 278. Rubens v. Prindle, 44 Barb. 336. * Malcolm v. Allen, 49 N. Y. 448 ; ' Odell v. Hoyt, 73 N. Y. 343. Jackson v. Allen, 3 Cow. 220 ; Jackson " Malcolm v. Allen, 49 N. Y. 448. CHAPTER VIII. EIGHTS OF • MORTGAGEE IS POSSESSION, AND ACCOTJNTrPTG BETWEEN MOETGAGOE AND MORTGAGEE. RIGHTS OF MORTGAGEE IN POSSESSION. §235. Right to retain possession. 236. Nature of mortgagee's right of pos- session. 237. Appointment of a receiver against mortgagee in possession. 238. How a mortgagee may obtain pos- session. 239. Apartywhoislawfullyinpossession. 240. Examples of lawful possession. 241. Further examples. 242. Further examples. 243. Right to acquire an adverse title. 244. Foreclosure by mortgagee in pos- session. ACCOUNTING BETWEEN MORTGAGOR AND MORTGAGEE. 245. Liability of mortgagee to account for rents and profits. 246. Principles. 247. In the absence of evidence of fraud or negligence. Z48. A person who occupies the legal position of a mortgagee. § 249. The liability of the mortgagee to account commences. 250. Where one religious corporation conveyed its church property. 251. A mortgagee in possession owes duties to junior lienors, 252. Holding as mortgagee. 253- Right of amortgagee in possession to make repairs. 254. The same rule. 255. Exceptions. 256. In cases where a mortgagee is not compensated. 257. Counsel fees. 258. Compensation for services in talj- ing charge of estate. 259. Rule in this State. 260. Accounting between mortgagor and mortgagee. 261. Money paid for taxes, assessments, and other charges. 262. An assignment. 263. Purchase at tax sale. 264. Insurance premiums. EIGHTS OF MOETGAGEE IN POSSESSION. § 235. Right to retain possession. — Formerly the mortgagee could maintain ejectment after a default, but this remedy was taken away by the Eevised Statutes.' If, however, the mortgagee obtains possession without force, by consent ' of the mortgagor or by legal proceedings, or in any other legal mode, he is entitled, as well since as before the statute, to hold it against the mortgagor until his debt is paid out of the rents and profits or otherwise.' The question as to '2 R. S. 312, § 57 ; Code, § 1498. v. Spence, 20 Wend. 260; Fox v. Lipe, ° Roberts V. Sutherlin, 4 0reg. 219. 24 Wend. 164; Casey v. Buttolph, 12 * Van Duyne v. Thayre, 14 Wend. 233; Barb. 637 ; St. John v. Bumpstead, 17 Phyfe v. Riley, 15 Wend. 248 ; Watson Barb. 100; Munrov. Merchant, 26 Barb. § 236.] EIGHTS OF MOEXaAGEE IN POSSESSION. 161 whether a mortgage debt has been paid by a receipt of rents and profits, cannot be passed upon in an action of ejectment, for the reason that the application of such rents and profits is not made by the law, but upon equitable principles and in equitable actions only.' § 236. Nature of mortgagee's right of possession. — The fact that, since the Revised Statutes, a mortgagee cannot maintain eject- ment against the mortgagor, and that even since those statutes the mortgagee, being in possession, may retain it until the debt is paid, presents no anomaly or inconsistency in the law. The mortgagee's right to bring ejectment, or, being in possession, to defend himself against an ejectment by the mortgagor, is but a right to recover or retain possession of the pledge for the purpose of paying the debt. Such a right is but the incident of the debt, and has no relation to a title or estate in the lands. Any contract for the possession of lands, however transient or limited, will carry the right to recover that pos- session ; and such was deemed to be the nature and construction of a mortgage, it being considered that the parties intended the possession of the thing hypothecated should go with the contract. Ejectment was not, in fact, a real action at the common law. That remedy, in its origin, was only to recover possession according to some temporary right ; and it was only by the use of fictions that the title was at length allowed to be brought into controversy. When the legisla- ture, by express enactment, denied this remedy to mortgagees, they undoubtedly supposed they had swept away the only remaining vestige of the ancient rule of the common law which regarded a mortgage as a conveyance of the freehold ; yet there is nothing inconsistent or anomalous in allowing the possession, once acquired for tlie purpose of satisfying the mortgage debt, to be retained until that purpose is accomphshed. When that purpose is attained, the possessory right instantly ceases, and the title is, as before, in the mortgagor, without 383 ; Winslow v. McCall, 32 Barb. 241 ; rell, 20 Wis. 42 ; Wells v. Rice, 34 Ark. Bolton V. Brewster, 32 Barb. 389 ; Sah- 346 ; Madison Avenue Baptist Church ler V. Signer, 44 Barb. 606 ; Randall v. v. Oliver Street Baptist Church, 73 N. Raab, 2 Abb. 307 ; Fogal v. Pirro, 17 Y. 82 ; Russell v. Ely, 2 Black (U. S.) Abb. 113; s. c. 10 Bosw. 100; Pell v. 575; Calhoun t. Lumpkin, 60 Tex. Ulmar, 18 N. Y. (4 Smith) 139 ; Chase v. 1S5. Peck, 21 N. Y. (7 Smith) 586 ; Hubbell v. > Ferris v. Houston, 74 Ala. 163 ; Dai- Moulson, 53 N. Y. 225 ; Deny. Wright, ley v. Abbott, 40 Ark. 275; Seaver v. 2Hals.(7N. J. Law)i75; 11 Am. Dec. 546; Durant,39Vt. 103; Toomer v. Randolph, Johnson v. Sandhoff, 30 Minn. 197; Frink 60 Ala. 358 ; Slaughter v. Swift, 67 Ala, V. Le Roy, 49 Cal. 317 ; Hennesy v. Far- 494. 11 163 MORTGAGES Or REAL PEOPERTT. [§§ 237-238. a reconveyance. The notion ' that a mortgagee's possession, whether before or after default,- enlarges his estate, or in any respect changes the simple relation of debtor and creditor between him and his mort- gagor, rests upon no foundation. We may call it a just and lawful possession, Kke the possession of any other pledgee, but when its object is accompKshed, it is neither just nor lawful for an instant longer.' § 237. Appointment of a receiver against mortgagee in pos- session. — It is, as a general rule, the settled doctrine of the courts of equity, that when anything is due to a mortgagee in possession, he will not be deprived of such possession by the appointment of a receiver, and the question of indebtedness will not be tried upon affi- davits. If the mortgagee will swear that a balance remains unpaid, a receiver wiU not be appointed. This is particularly so when the mortgagee is responsible, and is able to account for and pay any excess of rents and profits after the payment of his debt, or will give secu- rity to do so. If it appears that the mortgagee is irresponsible, or that the rents and profits will be in danger of loss, or that the mort- gagee is committing waste upon or materially injuring the prem- ises, a different rule will prevail, and a receiver will be appointed. The question is always one addressed to the sound discretion of the court in view of the particular facts and circumstances of the case presented.' § 338. How a mortgagee may obtain possession. — The legal remedy of a mortgagee to obtain possession of the property by eject- ment being abolished, and the right of the mortgagee, whose mort- gage is due, to retain possession lawfully acquired having been repeatedly adjudged to still continue, it remains to be considered under what circumstances the possession of a mortgagee will be lawful, so as to entitle him to the benefits of this rule. Where a mortgage has been defectively foreclosed, by reason of some irregularity that leaves the rights of lienors junior to the mort- gage in full force, but the proceeding is regular so far as to bind the mortgagor who has the right of possession, the purchaser under the mortgage sale may lawfully obtain possession. Having obtained such ' Per CoMSTOCK, Ch. J., in Kortright ^ BoUes v. Duff, 35 How. 481 ; Quinn v. V. Cady, 21 N. Y. 343, 364 ; Brinkman Briltain, 3 Edw. 314 ; Patten v. The Ac- \y. Jones, 44 Wis. 498. cessory Transit Co., 4 Abb. 237 ; Sea Ins. Co. V. Stebbins, 8 Paige, 565. § 239.] EIGHTS 0¥ MOETGAGEE IN POSSESSION. 163 possession, he will become the owner of the property as to all persons bound by the proceedings,' and as to all rights not so bound he will stand as an assignee of the mortgage in lawful possession under it." It is with reference to persons so circumstanced that questions as to the rights of mortgagees in possession now most frequently arise ; and it is obvious that in such cases, the right to possession having been determined by the proceeding to foreclose, it cannot again be liti- gated by proceedings on behalf of the owner of the equity whose rights have become finally barred. A mortgagee who takes possession without foreclosure and against the consent of the mortgagor, is a trespasser, and the remedy of the mortgagor is at law and not in equity, and the fact that he was a lunatic when possession was taken, does not give him a standing in a court of equity after the restoration of his reason. ° § 239. A party who is lawfully in possession of the mortgaged premises for another purpose, as, for instance, under a contract to purchase them, will, by the purchase of overdue and unpaid mort- gages upon the premises, become substituted in the place of the mortgagees, and will be entitled by subrogation to the rights which the mortgagees woxdd have had if they had entered into possession ; * but one in wrongful possession of mortgaged premises cannot, by purchasing a mortgage upon which no default has occurred, acquire a right to hold the land as mortgagee in possession." A purchaser upon, and in possession under, a foreclosure sale, void as against the owner of the equity of redemption, because he was not made a party to the foreclosure suit, does not stand in the position of mortgagee or assignee of the mortgage in possession, but as a stranger.* But if the owner of the equity of redemption consents that such pos- ' Vanderkemp v. Shelton, 1 1 Paige, 28 ; 10 Ohio St. 339 ; Bigler v. Waller, 14 Groff V. Morehouse, 51 N. Y. 503 ; Wet- Wall. 297. more v. Roberts, 10 How. 51. ' Endel v. Wall, 16 Fla. 786 ; Pfettz ' Wing V. Field, 35 Hun, 617 ; Hart v. v. Pfettz, 14 Md. 376. Wandle, 50 N. Y. 381 ; Robinson v. * Madison Ave. Baptist Church v. Ryan, 25 N. Y. 320 ; Walsh v. Rutgers Baptist Church in Oliver Street, 2 Robt. Fire Ins. Co., 13 Abb. 33; Benedict v. 642. Gilman, 4 Paige, 58 ; Smith v. Gardner, ' Madison Ave. Baptist Church v. 42 Barb. 356 ; Jackson v. Bowen, 7 Cow. Baptist Church in Oliver Street, ig Abb. 13; Martin v. Fridley, 23 Minn. 13; 105 ; s. c. rev'd on other grounds, i Abb. Vroom v. Ditmas, 4 Paige, 526 ; John- N. S. 214 ; 30 How. 455 ; 3 Robt. 570. son V. Sandhofi, 30 Minn. 197 ; Holton * Shriver v. Shriver, 86 N. Y. 575 ; v. Bowman, 32 Minn. 191 ; Sloan v. Froth- Watson v. Spence, 20 Wend. 260. ingham, 72 Ala. 589 ; Childs v. Childs, 164 MOKTGAG-ES OF REAL PEOPEETY. [§240. session be taken, the purchaser cannot thereafter be driven from pos- session without first paying the amount due upon the mortgage.' A mortgagee who enters as purchaser under a sale in foreclosure which is afterward set aside for an irregularity and fraud, has been held to be lawfully in possession as mortgagee.'' § 240. Examples of lawful possession. — In MaMson Ave. Bap- tist Church V. Oliver Street BaptAst Church (73 IST. Y. 82, 94), Eael, J., uses the following language : " "While under our present law a mortgagee cannot bring ejectment to obtain possession of the mort- gaged premises, being lawfully in possession under a mortgage upon which some amount is due, he can retain such possession against the mortgagor until such amount is paid. It is ordinarily sufEcient that the mortgagee is lawfully in possession after default upon the mort- gage. The court will not then deprive him of the possession until the mortgage has been paid. The possession need not be given under the mortgage nor with a view thereto." In this case the defendant acquired possession under a conveyance of the property, which was sought to be set aside and declared to be void. It was held that the order authorizing the conveyance was void, the court having no juris- diction to grant it. The defendant had no title under the deed, which was determined to have no legal effect, but, inasmuch as it acquired possession by the consent of the plaintiff, it was declared to be enti- tled to remain in possession by virtue of a mortgage which it held until the amount due on that mortgage was satisfied. In Shields v. Lozea/r (34 N". J. Law 496 ; s. c. 3 Am. E. 256), the vendor of land received a purchase-money mortgage and remained in possession under a lease by the terms of which he covenanted to yield and surrender such possession at its expiration. The lease expired, and the mortgage became due on the same day, and it was held in an action of ejectment brought by the landlord, that the mortgagee was entitled to continue to hold the premises under the mortgage, the mortgage money not being paid, without first surrendering the prem- ises to his landlord, and that the tenant by an assertion of his rights as mortgagee did not violate the rule which estops him from disputing his landlord's title. In Niles v. Romford (1 Mich. 338 ; 51 Am. Dec. 95), a mort- gage was foreclosed under a power of sale, but the proceeding was irregular and did not bind' the mortgagor, whose tenant was in pos- ' Wing V. Field, 35 Hun, 617. * Harper v. Ely, 70 IIL 581. § 241.J EIGHTS OF MORTGAGEE IN POSSESSION. 165 session. The purchaser under the foreclosure conveyed his title to such tenant, who claimed ownership against his landlord, the mort- gagor. In an action of ejectment brought by the mortgagor, it was held that while the deed did not convey the title, it operated to assign the mortgage, and that the tenant could lawfully purchase a valid mortgage and continue in possession under it against his landlord. §241. Further examples. — In Winslow v. McCall (32 Barb. 241), a mortgage had been foreclosed by advertisement. The owner of the equity of redemption was in possession of the property by his tenant at the time of the sale in foreclosure, and although he was duly served with the requisite notice his tenant was not. After such sale he became the assignee of a mortgage which was past due, and the owner of which had not properly been served with notice of the fore- closure, and thereupon he claimed to be entitled to continue in pos- session as mortgagee. This claim was sustained by the court, Paekee, J., remarking : " Cornwall was then (when the mortgage became due) in possession — a possession legally acquired and of which he had never been divested. I think he is from that time to be deemed a mortgagee in possession. It is not necessary that he should have obtained possession as mortgagee either by consent of the mort- gagor or by legal proceedings. It is sufficient if he obtained posses- sion in some legal mode." Bolton V. Brewster (32 Barb. 289) was an action of ejectment to recover possession of a farm in Queens County The defendant claimed title under an executor's deed, and he also claimed a right to possession under a past due mortgage. The defendant's claim of title was not sustained, for the reason that the wiU had been proved before the surrogate of New York County, while the testator at the time of his death was an inhabitant of the city of Hudson, but the claim of the defendant to a right to retain possession under his mort- gage was sustained by the court. It will be noticed that the posses- sion was obtained from an executor, the will never having been proved, but the question as to whether the executor had any more right to give possession than he had to grant the title does not appear to have been considered. In Phyfe v. RUey (15 Wend. 248), the defendant being a mort- gagee entered into possession under a deed from the mortgagor, which was executed subsequent to the docketing of a judgment under which the plaintifE claimed title. The possession was held to have been law- 166 MOBTGAGES OP EEAL PEOPEETY. [§ 242. fully acquired, and it was determined that the defendant could not be dispossessed in an action of ejectment until the mortgage had been paid.' In Fox V. Lipe (24 Wend. 164), a mortgage which contained no valid power of sale was foreclosed by a sale under the statute, and the mortgagee entered into possession. It was held that ejectment would not lie until the mortgage was paid. Yam Dv/yne v. Thayre (14 Wend. 233) was an action of eject- ment by a widow for dower, and the mortgagee was protected in his possession. It was alleged that the mortgagor, who was the husband of the plaintiff, " had either surrendered the possession of the prem- ises to the heirs of the mortgagee in extinguishment of the mort- gage or had abandoned the premises, and the heirs had entered under the mortgage." § 243. Further examples. — Notwithstanding the fact that a mortgagee is now precluded from maintaining ejectment against the mortgagor, a tenant of the mortgagor is still permitted to attorn to a mortgagee after the mortgage has become forfeited," and it has been held that, after such attornment, the tenant can resist an action brought against him by the mortgagor for rent." It would therefore seem that one lawful way for a mortgagee to acquire possession of the prop- erty would be to persuade the tenant of the mortgagor to attorn to him. Gross V. Wel/wood (90 N. Y. 638) was an action of ejectment. The de- fendants claimed, through one Bergen, first as mortgagee in possession under a mortgage executed by the plaintiff, and second under a tax lease executed to Bergen. The court held that it rested upon the de- fendant to show that he had a right to the possession. The tax lease was void, and the defendant, at the trial, abandoned all claim under it. The evidence as to the possession by Bergen was conflicting. The court says : " It was therefore an issue which the jury alone could determine. It was for them to say whether Bergen was in fact in possession, and if so, the character of that possession, and whether lawfully acquired or not ; ' and as the verdict established that defend- ant's possession was not taken under the mortgage, plaintiffs were entitled to recover." In Howell v. Lemitt (95 N. T. 617 ; 29 Alb. L. J. 483), a mort- gage had been foreclosed and a title perfected thereunder pursuant to 'See also Chase v. Peck, 2i N. Y. ^CitingTrimin v. Marsh, 54 N. Y. 599; 581. 13 Am. R. 623 ; Madison Avenue Church ' I R. S. 744, § 3 ; I Edw. St. 696, § 3. v. Oliver Street Baptist Church, 73 N. ^ Tones V. Clark, 20 Johns. 51. Y. 94. § 243.] EIGHTS OF MOETGA.GEE IK POSSESSION. 167 which and by means of a writ of assistance possession was acquired by the purchaser. The summons had been attempted to be served by publication upon the owner of the equity of redemption, but this was unavailing, for the reason that the defendant was dead, though this fact was not known to the plaintiff. An action of ejectment was brought by the children of the owner of the equity and was resisted by the defendants, .who were grantees of the purchaser at the foreclosure sale, who claimed the position of mortgagees in possession. The court said : " In most of the cases which have upheld the right of the mortgagee (to retain possession) his possession was obtained with the consent, express or implied, of the owner of the land, although in some of them the mode of acquiring possession did not distinctly ap' pear, and in many the rule is stated quite broadly and with little of restriction or limitation. It is scarcely necessary to review the author- ities and consider them in detail, for none of them have ever gone so far as to hold that a possession of the mortgage, acquired either by force or fraud, against the will and consent of the rightful owner, and without even color of lawful authority as it respects such owner and amounting only to a pure trespass, was sufficient to defend an action of ejectment. The possession requisite for such a defense must have about it at least some basis of right as against the owner evicted. Often his assent may be inferred from slight circumstances, but the right cannot be founded upon an absolute wrong. To hold that one who has merely a Hen and but an equitable right can get a legal one by the commission of a trespass, would be neither logical nor just." ' A purchaser under the foreclosure of a junior mortgage, in which the wife of the mortgagor did not join, may purchase a prior mort- gage in which the wife did join, and defend his possession under it against the widow's claim for dower until such mortgage is paid." § 243. Right to acquire an adverse title. — The relation between the mortgagee and the mortgagor, or his grantee, is not one of trust or confidence, nor has the mortgagee any duty to perform which in- capacitates him from purchasing an outstanding title thereto. Neither does any duty to protect the equity of redemption against a sale thereof, arise because the mortgagee is in possession ; nor is any power, in fact, conferred upon the mortgagee for that purpose.' ' See also Dunning v. Leavitt, 85 N. ' McMahon v. Russell, 17 Fla. 698. Y. 30, rev'g 20 Hun, 178. Article in 26 ' Kirkwood v. Thompson, 2 De G. J. Alb. L. J. 526 ; 27 Id. 6. & S. 613 ; Clark v. Bush, 3 Cow. 151 ; 168 MORTGAGES OF REAL PEOPEETT. [§ 244. A mortgagee in possession may, therefore, cause the premises to be sold under an execution in his favor against the mortgagor, and be- come the purchaser at such sale, and after the purchase is consum- mated, he may set up the title thus acquired against the claim of the mortgagee to redeem.' In a very limited sense, a mortgagee may be said to be a trustee. There may be a duty resting upon a mortgagee in possession to dis- charge a particular claim against the land. If in such a case he omits to do it, and allows the land to be sold on such a claim, and becomes the purchaser, he would hold the title in trust for the mortgagor. A mortgagee in possession is allowed, and it may be his duty to pay taxes on the land out of the rents and profits. If he suffers the land to be sold for taxes in violation of his duty, and purchases on the sale, he would, upon general principles, be deemed to hold the title as trustee. So, if a mortgagee is allowed to take possession, and undertakes to pay the interest on other liens out of the rents and profits, and fails to do so, he could not purchase the land for his own benefit in hostility to the mortgagor on foreclosure of an incumbrance for non-payment of interest which he was bound to pay.' § 244. Foreclosure by mortgagee in possession. — There is nothing in the position or legal claims of a mortgagee in possession which will restrain him from bringing an action to foreclose his mort- gage and extinguish the rights of the mortgagor by a sale of the property. And where an action of foreclosure was discontinued upon a stipulation being made by which the amount due upon the mortgage was reduced, and the mortgagee was given substantially the same rights which the law confers upon a mortgagee in posses- sion, but no time was specified within which the mortgagee could insist upon the immediate payment of the amount secured by the mortgage, it was held that the mortgagee was not required to wait more than three years, it. being shown that the revenue from the property did not suffice to reduce the amount of the lien.^ see also Parkinson v. Hanbury, i Drew Ala. 92 ; Hurmdenv. Roberts, 6 Fla. 711; & Sm. 143; s. c. 2 De G. J. & S. 450; L. Wordier v. Busch, 43 Mo. 231. R. 2 H. L. Cases, i. ^Per Andrews, J., in Ten Eyck v. ' Trimm v. Marsh, 54 N. Y. 599 ; Ten Craig, 62 N. Y. 406, 422 ; Schenck v. Eyck V. Craig, 2 Hun, 452 ; s. c. 5 N. Y. Kelley, 88 Ind. 444. Sup. (T. & C.) 65 ; s. c. affi'd 62 N. Y. ^ Union Dime Savings Institution v. 406 ; King v. State M. F. Ins. Co., 7 Quinn, 63 How. 211. Gush. 7 ; Walthall, Ex'r, v. Rines, 34 §§ 245-246.] ACCOUNTING. 169 ACCOTTNTrNG BETWEEN MOETGAGOE AND MORTGAGEE. § 245. Liability of a mortgagee to account for rents and prof- its. — A mortgagee in possession should endeavor to make the prem- ises produce a fair rental. His duty is said to be that of a provident I owner,' and, while he is not in general liable for imaginary profits which he did not receive, but only for actual rent, he must answer for his fraud or wilful neglect. He may not turn out a sufficient tenant, or refuse a higher rent, without becoming thereby responsible for the rent lost." If by reason of the fraud or neglect of the mort- gagee the premises are not rented out at a fair cash rent, the mort- gagee may be charged such rent as might have been received with reasonable care and prudence.' A mortgagee in possession is to take the fair rents and profits, but he is not bound to engage in any specu- lations for the benefit of his mortgagor, and is only liable for wilful default." He is liable to account to the mortgagor for all rents, issues, and profits received by him, and for all waste and destruction of the premises, and he must deduct the allowance for these matters from the amount due on the mortgage." An agreement between the mortgagor and mortgagee, when the mortgage debt bears interest, that the latter shall use and occupy the mortgaged premises without being liable for rents and profits, unless supported by a consideration other than the forbearance to foreclose the mortgage, is not such a vahd contract as will bar the right to an action for them.' § 246. Principles. — The principles upon which a mortgagee who takes possession of the mortgaged premises without a regular fore- closure is to account, are substantially the same as those which the Revised Statutes have adopted in relation to the damages of a dow- ress in cases where her dower has been withheld from her after it was demanded : that is, the mortgagee is to be charged with the net profits which he has received, or which he might have received with- ' Shaeffer v. Chambers, 2 Halst. Ch. Morts. 492 ; Wash. Real Prop. vol. i, (N. J.) 548 ; 47 Am. Dec. 211. p. 578 ; Walsh v. Rutgers Fire Ins. Co., « Coote on Morts. 557; Powell on 13 Abb. 33 ; Booth v. Steam Packet Co., Morts. 949 a ; Wash. Real Prop, vol. i, 68 Md. 39. p. 578 ; Fisher on Morts. 492. ' Onderdonk v. Gray, 19 N. J. Eq. 65 ; ' Van Buren v. Olmstead, 5 Paige, 8 ; Greer v. Turner, 36 Ark. 17 ; Daniel v. Quinn v. Brittain, 3 Edw. 314. Coker, 70 Ala. 260. * Powell on Morts. 950; Fisher on ' Anderson v. Lauterman, 27 Ohio, 104. 170 MORTGAGES OP EEAL PEOPERTT. [§§ 247-248. out any negligence on his part, after payment of taxes and ordinary repairs and other expenses of that character ; but without charging him with the increased rents and profits arising from any permanent improvements made by him.' It is the duty of the mortgagor, if he have the opportunity, to give notice to the mortgagee that the estate can be made more productive, and to assist him in making it so. If he omits to do this, and hes by making no objection to the mortgagee's proceedings, this fact will weigh strongly against him if he afterward attempts to charge the mortgagee with mismanagement.' And the burden of proving the receipt of rents and profits rests upon the mortgagor. If he does not introduce such evidence, it does not lie with him afterward to complain of the decree." § 247. In the absence of evidence of fraud or negligence the mortgagee can only be charged with rents and profits actually received by him, and not with the supposed value of the property.' But if fraud or gross neglect is shown, he will be charged with what he might have received if he had been honest and diligent.' It has even been held that the burden rests upon the mortgagee to prove his diligence and good faith where the property has been unproductive, in order to relieve himself from a charge for rental value.' The mere fact that after the mortgagee's taking possession a tene- ment was left unoccupied, in the absence of proof that the mortgagee was negligent in the matter of procuring a tenant, will not charge the mortgagee with its rental value.' It has been said that a mortgagee in possession should be charged with rents, according to the equities of the case, upon the basis either of gross receipts, net receipts, or rental value.' § 248. A person who occupies the legal position of a mort- gagee, under circumstances which lead him to believe that he is the owner of the property, is only to be charged with what he actually receives, and not for what he might have received." 1 Per Chancellor Walworth, in Bell ' Moshier v. Norton, lOO 111. 63. V. The Mayor, etc., of New York, 10 ^Shaeffer v. Chambers, 6 N. J. Eq. Paige, 73 ; citing Moore v. Cable, 1 548. Johns. Ch. 385 ; 1 R. S. 743, § 21. 'Donohue v. Chase, 139 Mass. 407. ^ Fisher on Morts. 491. ' Worthington v. Wilmot, 59 Miss. 608. ' Hards v. Burton, 79 III. 504. "Morris v. Budlong, 78 N. Y. 543, 556, * Hogan V. Stone, i Ala. 496 ; 35 Am. rev'g 16 Hun, 570 ; Parkinson v. Han- Dec. 39 ; Gerrish v. Black, 104 Mass. bury, 2 L. R. i ; Barnard v. Jennison, 400 ; Clark v. Finlan, 90 111. 245. 27 Mich. 230. §§249-251.] ACCOtJNTING. 171 If instead of renting tlie property the mortgagee elects to occupy and enjoy it himself, he will be required to account on the basis of a fair rental ; such as might have been received with reasonable care and prudence,' independent of the question of the amount of net profits actually received by him therefrom.' But if the mortgagee has been unable to procure a tenant, and has caused the land to be tilled himself, he will be chargeable only with the net results, and it has been said to be his duty to make use of the property himself in such a case.' He is under no obligation to work the land himself if he can rent it." And he will not be charged anything if the use is worth nothing.' A mortgagee will not be charged interest on rents received by him ; he receives no compensation for his services, and this will be set off against interest." § 349. The liability of the mortgagee to account commences when he first receives profits which ought to be applied in reduction of his claims. So, on a bill to redeem brought by the widow of a mortgagor, the mortgagee was required to account from the date of his entry into possession, and not merely from the time the plaintiff became a widow.' § 350. Where one religious corporation conveyed its church property to another under an order which was void for jurisdictional defects and the grantee held mortgages which were valid hens, and on an accounting with respect to the amount due on such mortgages, it appeared that the defendant had paid out more than it had received of pew rents for the costs and expenses of maintaining religious ser- vices which were for the benefit of both parties, it was held that the defendant should not be charged with the rents and profits, but should bear all expenses while the property was in its possession, and should lose the interest accruing during that period on the amount of its de- mands.' I § 251. A mortgagee in possession owes duties to junior lienors as well as to the mortgagor,' and a subsequent mortgagee -has a right 1 Van Buren v. Olmstead, 5 Paige, 8. ' Peugh v. Davis, 2 Mackey (D. C.) 23. ' Barnett v. Nelson, 54 Iowa, 41 ; 37 * Breckenridge v. Brooks, 2 A. K. Am. R. 183 ; Sanders v. Wilson, 34 Vt. Marsh, 335 ; 12 Am. Dec. 401. 318. ' Dela V. Stanwood, 62 Me. 574. 'Shaeffer v. Chambers, 2 Halst. (N.J.) ° Madison Ave. Bap. Church v. Bap- Eq. 548 ; 47 Am. Dec. 211. tist Church in Oliver St., 73 N. Y. 82, * Hidden v. Jordan, 28 Gal. 301. modifying 41 N. Y. Supr. (g J. &S.) 369. 172 MOKTGAaES Or REAL PROPERTY. [§ 252. to compel him to make proper deductions for rents and profits re- ceived by him.' And a senior mortgagee in possession, with knowl- edge of a junior mortgage, who permits the mortgagor to receive the profits of the property to the prejudice of the junior mortgagee, will be postponed to the junior mortgagee for that amount." So, where a mortgagee having taken possession, rented the prop- erty to the widow and adult heirs of the mortgagor and then omitted to collect the rents, it was held on a bill to redeem in which the in- fant heirs were included as parties, that the mortgagee must, as to them, account for the rents as if he had collected them.^ § 252. Holding as mortgagee. — A mortgagee in possession after condition broken with the assent of the mortgagor, is presumed, until the contrary is shown, to occupy in his character of mortgagee ; and as such is liable to account for rents and profits. Thus, where a ten- ant in possession purchased outstanding past due mortgages on the premises, and after the expiration of his term continued in possession and in receipt of rents and profits, such continued occupancy, until the contrary is shown, is presumed to be under the mortgage and not as a tenant holding over.' And a mortgagee who also had a claim to a lien under a mechanic's lien statute, which was legally invalid, who was put into possession by the mortgagor under an agreement that the rents and profits should apply upon the latter lien, was held, as between himself and the creditors of the mortgagor holding junior liens, to be in possession as mortgagee, and the rents were deducted from the mortgage debt.' But a mortgagee who takes a conveyance from the mortgagor and enters thereunder, does so under his title, and not as the holder of a mere lien, and is not accountable as such to the holder of a junior in- cumbrance, as against whom his mortgage may be enforced for its full amount." A grantee under a deed absolute on its face, but made as security for a debt, is a mortgagee simply, and as such must account for rents and for proceeds of sales of the property with interest, and for waste.' 'Moore v. Degraw, i Halst. (N.J.) 'Anderson v. Louterman, 27 Ohio, 104. Ch. 346. ' Hilliard v. Allen, 4 Cush. 532. ^ Hitchcock V. Fortier, 65 111. 239 ; ' Rogers v. Herron, 92 111. 583. Demarest V. Berry, 16 N. J. Eq 481. 'Turner v. Wilkinson, 72 Ala. 361 ; ^ Butts V. Broughton, 72 Ala. 294 ; Cooke v. Culbertson, 9 Nevada, 199 ; Dozier v. Mitchell, 65 Ala. 511 ; Barron Powell v. Williams, 14 Ala. 476 ; Mor- V. PaulUng, 38 Ala. 292. row v. Turney, 35 Ala. 131. §§ 253-254.J ACCOUNTiKG. 173 § 253. Right of a mortgagee in possession to make repairs. — The mortgagee is entitled to be credited for moneys expended by him to keep the premises in necessary repair ;* but when he under- takes, without the consent of the mortgagor, to make improvements on the property, though they may be of a beneficial and permanent character, he does it at his peril, and has no right to look to the mort- gagor for an allowance. It would be unjust that he should be at liberty to improve as he thought most beneficial to himself, and thereby perhaps deprive the mortgagor of the power of redeeming." In Moore v. Gahle (1 Johns. Ch. 385), it was held that the clear- ing of wild land did not constitute necessary repairs, and Chancellor Kent remarked that, " to make the allowance would be compelling the owner to have his lands cleared, and to pay for clearing them, whether he consented to it or not. The precedent would be liable to abuse, and would be increasing difficulties in the way of the right of redemption. Many a debtor may be able to redeem by refunding the debt and interest, but might not be able to redeem under the charge of paying for the beneficial improvements which the mortgagee had been able and willing to make." § 254. The same rule was expressed by Denio, J., as follows :' "Where the conventional relation of mortgagor and mortgagee is shown and acknowledged between the parties, there is no reason why the latter should be allowed to obstruct the right of redemption by expending money upon improvements. He can at any time call upon the debtor, by suit of foreclosure, to elect whether he will pay the debt or incur an absolute forfeiture ; and if he is found making cost- ly improvements, there is good reason to suspect a design to avail himself of the present inability of the debtor to discharge the incum- brance in order to confirm his title to the estate by embarrassing the right of redemption. The general rule is therefore understood to be that upon taking the account in a suit for redemption against a mort- gagee in possession, he is to be charged with the rents and profits, and be allowed only for necessary reparations." * ' Gillis V. Martin, 2 Devereux Eq. v. Smith, Saxton's N. J. Rep. 123; Cook (N. C.) 470 ; 25 Am. Dec. 729; Dewey v. Ottawa University, 14 Kans. 548; Mc- V. Brownell, 54 Vt. 441 ; 41 Am. R. 852; Cumber v. Oilman, 15 111. 381; Trust Hasford v. Johnson, 47 Ind. 479 ; Mc- Co. v. Fisher, 106 111. 189. Cumber V. Oilman, 15 111. 381 ; Adkins 'Mickles v. Dillaye, 17 N. Y. (3 Smith) V. Lewis, 5 Oreg. 292 ; Booth v. Packet 80. Co., 63 Md. 39. *See also Story's Eq. Jur. § 1016 b ; 4 ' Quin V, Brittain, Hoff. Ch. 354; Clark Kent's Com. 167. 174 MOETGAGES OY REAL PROPEETT. [§§255-256. § 255. Exceptions. — The rule refusing an allowance for perma- nent improvements to the mortgagee, is subject to some exceptions. Where valuable and permanent improvements have been made in good faith by a person standing upon the legal footing of a mort- gagee, but who supposed himself to have acquired the absolute title, as by a purchase under a foreclosure which was defective and failed to cut off a right of redemption, if the person entitled to redeem neglect to apprise the mortgagee of his error, and allow him to go on in ex- pending money upon the property, the value of the permanent im- provements will be allowed to the mortgagee upon redemption. The improvements, being made by the mortgagee in the belief that he was the owner of the property, and that belief to some extent having been induced by the person entitled to redeem, the person seeking relief at the hands of a court of equity, must do equity and pay for the benefits which he receives from the improvements.' So, where a title had been conveyed by the mortgagor to the mort- gagee, the latter was adjudged to be entitled to retain the property, as against a junior lien of which he had no notice, for the amount of his mortgage and valuable permanent improvements put by him upon the estate after the date of the grant." And where the instrument ad- judged to be a mortgage was an absolute deed, the equitable owner was required to pay for repairs and improvements, made on the faith of an absolute title, which enhanced the value of the property. ° § 256. In cases where a mortgagee is not compensated for improvements, he is not charged with the profits received by him from such improvements.' But if a charge is made and allowed for the expense of improvements, the mortgagee is also chargeable with the increased rental resulting therefrom.' So, a mortgagor cannot charge a mortgagee in possession for waste ' Mickles v. Dillaye, 17 N. Y. (3 Smith) MacArthur (D. C), 206 ; Spurgin v. 80 ; Wetmore v. Roberts, 10 How. 51, Adamson, 62 Iowa, 661 ; Poole v. John- and cases cited; Fogalv. Pirro, i7Abb. son, 62 Iowa, 611; Morgan v. Walbridge, 113 ; s. c. 10 Bosw. 100 ; Chalmers v. 56 Vt. 405. Wright, 5 Robt. 713 ; Benedict v. Gil- ^Troostv. Davis, 31 Ind. 34. But see man, 4 Paige, 58 ; Putnam v. Ritchie, 6 Catterlin v. Armstrong, loi Ind. 258. Paige, 390 ; Miner v. Beekman, 50 N. Y. ^ Harper's Appeal, 64 Pa. St. 315. 337 ; Dougherty v. Colgan, 6 Gill & J. * Moore v. Cable, i Johns. Ch. 385 ; 275 ; Hagthorp v. Hook, i Gill & J. Bell v. The Mayor, 10 Paige, 49 ; Clark 270; Troost V. Davis, 31 Ind. 34; Roberts v. Smith, Saxt. (N.J.) 121, 138; Hop- V. Fleming, 53 III. 198 ; Harper's Ap- kins v. Stephenson, i J. J. Marsh, 341 ; peal, 64 Pa. St. 315 ; Cookes v. Culbert- Jones v. Fletcher, 42 Ark. 422. son, 9 Nev. 199; Eraser v. Prather, i 'Montgomery v. Chadwick, 7 Iowa, 114. §§ 257-258.] AccouNTmo. 175 for clearing and cultivating the land, and also with the improved rent arising from such clearing ; though it has been said that he may do either at his election.' Claims for money disbursed in making repairs should be asserted before judgment in the action to foreclose or redeem, since they can- not be made charges on the land independent of such judgment.^ § 257. Counsel fees. — A mortgagee of land in possession is en- titled to be allowed for reasonable counsel fees, paid in a proper endeavor to collect the rents and profits; and he is not liable for damages done to the estate, without his knowledge, by his tenant, provided the latter was one to whom the estate might properly be leased ; or for wood cut and used on the premises, for firewood and repairs, by such tenant.' § 258. Compensation for services in taking charge of estate. — The English courts have always looked with jealousy at the de- mands of the mortgagee, beyond the payment of his debt. They have allowed the mortgagee to agree with the mortgagor for the ap- pointment of a receiver to be paid by the latter, but they have held that neither the mortgagee, nor his assignee or executors, can have any allowance for personal care or trouble in receiving the rents of the estate, notwithstanding an agreement with the mortgagor for that purpose.* As a general rule, they have imposed on the mortgagee the duty of collecting the rents himself, without compensation ; but they have allowed him to employ another person to do so at the ex- pense of the estate, when the nature of the property was such that great time and trouble would be sacrificed by personal receipt of the rents, so that a provident owner, whose time was of value, would probably have appointed a bailiff receiver.^ The reason given for refusing to allow the mortgagee for time and trouble spent in taking care of the estate is, that such an arrangement tends directly to facil- itate usury and oppression. So, where a mortgage provided that the mortgagee should be in receipt of the rents and have £60 a year for his trouble, and, after retaining this amount with the interest, should ' Morrison v. McLeod, 2 Ired. Ch. * Moore v. Cable, i Johns. Ch. 385, 388 ; 108. Fisher on Morts. 499 ; French v. Baron, ' Dewey v. Brownell, 54 Vt. 441 ; 41 2 Atk. 120 ; Godfrey v. Watson, 3 Id. Am. R. 852. 518. ' Hubbard v. Shaw, 94 Mass. (12 Allen) ' Fisher on Morts. 499 ; Coote on 120 ; Blunt V. Syms, 40 Hun, 566 ; i N. Morts. 353, 557 ; Davis v. Dendy, 3 Y. St. Reptr. 455. Mad. 170. 176 MORTGAGES 01' REAL PEOPEETT. [§§ 259-260. pay the balance to the mortgagor, it was held that he was liable to a qui tam action for usury.' § 259. Rule in this State. — In the other States the rule is similar to that adopted in England, in refusing the mortgagee compensation for his own services,'' but allowing him to charge as against the rent for the expense of collecting it where such expense was actually in- curred, and where the premises were so situated that the employing of an agent was a reasonable and a proper thing to do." It has been said that in this State there is no fixed rule applicable to all cases determining whether or not a mortgagee in possession is, upon an application of the mortgagor to redeem, entitled to commis- sions upon the amount received and expended by him, and that the decision of this question rests in the discretion of the court or referee trying the action. In one case commissions were refused to the mortgagee, and costs were also adjudged against liim. ISTo rule is suggested by which the discretion of the court is to be guided.* In a later case compensation was refused, and it was said that no commis- sions can be legally claimed or allowed.' In Massachusetts, when a mortgagee enters upon default for the purpose of foreclosure, the question as to commissions has arisen more frequently than in this State. In an action to redeem it has been held that the mortgagee in possession, having entered for breach of condition, is entitled to ordinary commissions, and, in special cases, to more.' A similar rule prevails in Connecticut.' The fact that the mortgagor consented to the appointment of an agent at a fixed compensation for a part of the time the mortgagee was in possession, has been held to be competent though not conclu- sive evidence that the continued employment of an agent at the same rate was proper.' § 260. Accounting between mortgagor and mortgagee. — An 1 Scott V. Brest, 2 Term R. 238. Ch. (Md.) 455 ; Harper v. Ely, 70 111. ^ Eaton V. Simonds, 14 Pick. 98 ; Clark 581 ; Davis v. Dendy, 3 Mad. 170. V. Robins, 6 Dana, 350 ; Benham v. * Green v. Lamb, 24 Hun, 87. Rowe, 2 Cal. 387 ; Breckenridge v. ' Blunt v. Syms, 40 Hun, 5()6 ; i N. Brooks, 2 A. K. Marsh, 335 ; Clark v. Y. St. Reptr. 455. Smith, Saxt. (N. J.) 121 ; Elmer v. Lo- * Casenove v. Cutler, 4 Met. 246 ; per, 25 N. J. Eq. 475 ; Moore v. Cable, Adams v. Brown, 7 Cush. 220 ; Mon- I Johns. Ch. 385, 388. tague v. Boston & Alb. R.R. 124 Mass. 2 Scarborough v. Stinson, 15 La. An. 242 ; Gerrish v. Black, 104 Mass. 400. 665 ; Lowndes v. Chisholm, 2 McCord ' Waterman v. Curtis, 26 Conn. 241. ' Casenove v. Cutler,. 4 Met. 246. § 261.J ACCOUN-TING. 177 account between the mortgagor and mortgagee as to the amount due upon the mortgage debt, may be required by any person obligated to pay that debt, or having any interest in or lien upon the mortgaged estate subordinate to the mortgage. Questions as to the amount due to the mortgagee can be raised in any Utigation in which the mort- gage is sought to be enforced or relief is asked against it. The methods for raising questions of account are pointed out in chapters of this work touching " Foreclosure " and " Redemption." § 261. Money paid for taxes, assessments, and other charges. — A mortgagee, whether in or out of possession, who has paid taxes on the mortgaged premises in order to preserve his security, may charge such taxes in his account against the mortgagor, and recover them under the mortgage.' So, also, he may charge money used in paying a valid assessment for a pubhc improvement f or in paying rent on a perpetual lease in fee to prevent a re-entry and to preserve his security,' or in satisfying an execution upon a prior judgment.* If the mortgagee pays a tax or assessment which he is under no obli- gation to pay, he will be preferred, to the extent of the money thus paid, to prior incumbrancers whose liens the payment has served to protect.' The right of the mortgagee to protection for moneys disbursed by him in discharge of taxes and other prior liens on the property, de- pends upon equitable principles alone, and not upon the presence of a " tax clause " or other stipulation in the mortgage," though such a clause is valid.' Money paid by a mortgagee for taxes on other prior charges or liens on the estate is not chargeable against the estate apart from the mortgage, and is uncollectible when the mortgage is satisfied ; and, whether the amount paid is or is not included in the sum for which ' Sidenberg v. Ely, 90 N. Y. 257 ; 43 v. Barker, Id. 381; Ring's Ex'r v. Wood- Am. R. 163 ; Marshall v. Davies, 78 N. ruff, 43 Ark. 469. Y. 414; Weed v. Hornby, 35 Hun, 580; ' Rapelye v. Prince, 4 Hill, 119 ; Dale Faure v. Winans, Hopk. Ch. 283 ; Burr v. McEvers, 2 Cow. 118 ; Brevoort v. V. Veeder, 3 Wend. 412 ; Eagle Fire Ins. Randolph, 7 How. 398. Co. V. Pell, 2 Edw. 631 ; Kortright v. ^ Robinson v. Ryan, 25 N. Y. 320. Cady, 23 Barb. 490 ; Robinson v. Ryan, * Silver Lake Bank v. North, 4 Johns. 25 N. Y. 320 ; Wright v. Langley, 36 Ch. 370. 111. 381 ; Mix V. Hotchkiss, 14 Conn. ' Cook v. Kraft, 3 Lans. 512 ; Davis 32 ; Southard v. Dorrington, 10 Neb. v. Bean, 114 Mass. 360. 122; Johnson v. Payne, 11 Neb. 269; * Sidenberg v. Ely, 90 N. Y. 257; 43 Walton v. Hollywood, 47 Mich. 385 ; Am. R. 163. Stancliff v. Norton, 11 Kans. 218 ; Sharp ' Hamilton v. Jones, 62 Cal, 473. 12 178 MOETGAGES OF REAL PEOPERTT. [§§ 262-263. the mortgage is foreclosed, there can be no subsequent or separate proceeding against the mortgagor to enforce its payment.' A mortgagee in an invalid mortgage has been held to be entitled to a lien on the land for taxes paid by him." And as between the mort- gagor and mortgagee payments made in good faith by the mortgagee for taxes and assessments which proye to have been illegally assessed, may be included in the foreclosure decree.' § 262. An assignment to the mortgagee of the charge or hen paid by him, is neither necessary nor proper if it is desired to collect the amount paid, under the mortgage. By a purchase at a tax sale, the mortgagee may acquire a lien which he will be allowed to enforce, but he will not be able to enforce a claim for the amount thus paid in his character as mortgagee.* He will have the rights of a purchaser at a tax sale, and he will also be a mortgagee ; thus being the holder of two different demands, each secured by its appropriate remedies. But it has been held that, if he will waive his tax title, he may add the amount paid for it to his claim as mortgagee.' The owner of an undivided half interest in real estate who has mortgaged his half interest is liable only for the tax on his share, and cannot be made to pay the whole tax by the mortgagee who pays the same to protect his Ken." § 263. Purchase at tax sale. — If a mortgagee in possession be in the receipt of rents or profits, it is not only his right but his duty to use them in the preservation of the estate by paying taxes or other incum- brances prior to the mortgage. If he suffers the land to be sold for taxes, in violatjon of his duty, and purchases on the sale, he would, upon general principles, be deemed to hold the title as trustee.' He cannot set up against the mortgagor a tax title acquired while thus in possession. ' On a like principle, neither the mortgagor nor his grantee in pos- session can acquire any right hostile to the mortgage by paying taxes on the mortgaged premises, since it is his duty to make such pay- ment." And a payment made in the form of a purchase on a sale for such tax has no greater effect." 'Vincent v. Moore, 51 Mich. 618; * Strong v. Burdick, 32 Iowa, 630; Young V. Brand, 15 Neb. 601 ; McCros- Baker v. Clark, 52 Mich. 22. sen V. Harris, 10 Pacif. Rep. (Kans.) 583. * Weed v. Hornby, 35 Hun, 580. ' Aultman v. Jenkins, 19 Neb. 209. ' Per Andrews, J., in Ten Eyck v. 'Bates V. People's, etc., Asso'n, 42 Craig, 62 N. Y. 406, 422. Ohio St. 655. 'Schenck v. Kelley, 88 Ind. 444. * Williams V. Townsend, 31 N. Y. 411; ° Medley v. Elliott, 62 111. 532. Fiacre v. Chapman, 32 N. J. Eq. 463. "Voris v. Thomas, 12 111. 442. § 264.] ACCOUNTING-. 179 § "264. Insurance premiums. — As a general rule, if no provision is made in the mortgage for insuring the premises, a mortgagee has no right to charge in his account for premiums paid for effecting in- surance upon the mortgaged premises.' In 8lee v. Momhattam, Co. (1 Paige, 81), where the mortgagees had long been in possession of the premises, the court allowed them to charge for insurance pre- miums " under the peculiar circumstances of the case." Questions of insurance are further considered in Chapter XIV. of this work. ' Faure v. Winans, Hopk. Ch. 283 ; Brown, 2 Cush. 412 ; Booth v. Packet Fisher on Morts. 493, 494 ; Bellamy v. Co., 63 Md. 39. Brickenden, 2 J. & H. 137 ; White v. CHAPTEE IX. THE PEIMAET FUND FOE THE PAYMENT OP MOETG-AGES, AND PEIOEITIES INDEPENDENT OF THE EEOOEDING ACTS. THE PRIMARY FUND FOR THE PAYMENT OF MORTGAGES. §265. Statute. 266. Rule prior to Revised Statutes. 267. Application of the statute. 268. Limitations of the rule. 269. The sole object of the statute. 270. Mortgages of leaseholds. 271. Charging parcels of land in inverse order of alienation. 272. Examples. 273. Land conveyed expressly subject to mortgage debt. 274. Where parcels are expressly charged with mortgage. 275. Land of one person mortgaged for debt of another. 276. Release from primary liability. 277. Subrogation. 278. Junior liens protected. 279. Controlling remedy of mortgagee. 280. Sale made in one parcel. PRIORITIES INDEPENDENT OF THE RE- CORDING ACTS. 281. Priority of mortgages as controlled by agreements of parties. § 282. Examples. 283. Conflicting claims to priority. 284. Priority of purchase-money mort- gages. 285. Examples. 286. What is a purchase-money mort- gage. 287. Conflicts between mortgages given by purchasers at time of pur- chase. Mortgages for purchase money given after delivery of deed. No priority for money paid for im- provements. 2go. Priority of mortgages over judg- ments. Reforming mortgages. The doctrine of tacking. Several debts secured by the same mortgage. 294. Assignment of part of debt secured by mortgage. 295. Priority awarded to defeat fraud. 296. Agreements for priority where there are intermediate liens. 297. Assignees bound by equities con- trolling priority. 288. 289. 291. 292. 293- THE FBTIVTARY FUKD FOE THE PAYMENT OF MOETGAGES. § 265. Statute. — ^It is provided by statute that " whenever any real estate, subject to a mortgage executed by any ancestor or testator, shall descend to an heir or pass to a devisee, such heir or devisee shall satisfy and discharge such mortgage out of his own property, without resorting to the executor or administrator of his ancestor, un- less there be an express direction in the will of such testator that such mortgage be otherwise paid." ' ■ I R. S. 749, § 4. §§ 266-268.] THE PEIMAKY FUND. 181 § 266. Rule prior to Revised Statutes. — This is a different rule from that which prevailed prior to the Eevised Statutes. The rule then was that when a man gave a bond and mortgage for a debt of his own contracting, the mortgage was understood to be merely a collateral security for the personal obligation, and the debt was re- quired to be paid out of personal assets. But when a man had pur- chased, or had received by devise to him, land with an incumbrance on it, he became a debtor only in respect to the land ; and if he promised to pay it, it was said to be a promise rather on account of the land, which continued notwithstanding to be the primary fund. It was sometimes said that the estate which had received the benefit should also bear the burden. As to wills, the testator might, by ex- press directions, charge a mortgage debt upon his personal assets, or, even without express words, he might do so by such dispositions and language as were tantamount ; as, for instance, if the continuance of the charge primarily on the land would be repugnant to some of the provisions of the will and defeat them.' § 267. Application of the statute. — The statute was passed to remedy what seemed to the revisers to be an injustice," and it plainly has an advantage over the former rule in being definite and intelligi- ble. The rule of the statute applies as well to cases of intestacy as to cases where the mortgagor has disposed of the whole or a part of his estate by will,' and the provision which makes the real estate the primary fund for the payment of the mortgage debt, is never dis- turbed except by some clear and express direction in the will.* The general expression in a will, "after all my lawful debts are paid and discharged, I give," etc., is not " an express direction that the mort- gage be otherwise paid," such as the statute requires, in order to ex- empt the devisee from its payment, ,and charge the executors with the payment thereof out of the assets of the testator in their hands. ° § 268. Limitations of the rule. — But this provision of the statute does not apply to a case where the mortgage is a collateral security only for the debt of others ; and the executors have funds in their hands of the principal debtors, which the law devotes to the • Cumberland v. Codrington, 3 Johns. " House v. House, 10 Paige, 158. Ch. 229, 257, 272 ; Mollan v. Griffith, 3 * Taylor v. Wendell, 4 Bradf. 324 ; Paige, 402 ; Campbell v. Campbell, 30 Waldron v. Waldron, Id. 114. N. J. Eq. 415. ' Rapalye v. Rapalye, 27 Barb. 610. 2 See Revisers' Notes, 3 R. S. (2d ed.)6oo. 182 MOETGAGES OF REAL PEOPEETY. [§§ 269-270. payment of such principal debt. It only applies as between devisee or beirs and the personal representatives of the estate of the testator or intestate. So, where the land of one partner is mortgaged to pay a copartnership debt, the copartnership assets are the primary fund for its payment.' The statute only applies to mortgages where the Ken is created by the act of the parties, and is without effect upon liens which arise by operation of law, as in the case of the equitable lien of a vendor for unpaid purchase money. It has often been held, both before and since the statute, that in case of such unpaid purchase money, the heir or devisee is entitled to have the same paid out of the personal property.' § 269. The sole object of the statute was to change the rule of the common law, under which the heir or devisee had the right, in cer- tain cases, to call upon the personal representatives of the decedent to pay off the mortgage. , It does not, by its terms, purport to affect the rights of creditors, but simply to establish a rule of habihty as between devisees or heirs and the personal representatives. Where there is a personal liability by contract, to which the mortgage is a collateral security, it was not the design of the statute to deprive the party of his right to enforce that liability ; nor was it intended to compel a resort to any mode of marshalling assets for the purpose of adjusting the equities as between the representatives and third par- ties.' It does, however, make the land the primary fund for the payment of the mortgage debt,' and where the rights of the creditor will not be prejudiced, a court of equity may compel the land to be sold and the proceeds applied to the debt, before allowing the mort- gagee to proceed against the personal assets of a deceased mort- gagor.' § 270. Mortgages of leaseholds. — The mortgage of a leasehold interest in lands is a mortgage upon part of the personal estate, and ia payable out of personal assets, though this does not impair the right of a creditor to enforce his specific hen.' ' Robinson v. Robinson, i Lans. 117. brook, 32 N. Y, 587 ; Roosevelt v. Car- ' Wright V. Holbrook, 32 N. Y. 587 ; penter, 28 Barb. 426. Livingston v. Newkirk, 3 Johns. Ch. * Mosely v. Marshall, 27 Barb. 42. 312 ; Cogswell v. Cogswell, 2 Edw. 231 ; ' Rice v. Harbeson, 2 N. Y. Sup. (T. Johnson v. Corbett, 11 Paige, 265 ; Lam- & C.) 4 ; Moore v. Dunn, 92 N. C. port V. Beeman, 34 Barb. 239. 63. Per Davis, I., in Wright v. Hoi- « Sheldon v. Ferris, 45 Barb. 124. § 271.] THE PEIMAET FUND. 183 § 271. Charging parcels of land in inverse order of aliena- tion. — When the mortgagor sells a parcel of the land, with warranty J against the incumbrance, or for full consideration, the parcel remain- ing in his hands is the primary fund for the payment of the mort- gage, that is to say, the different parcels of land are to be charged in the inverse order of their alienation.' The same principle is applica- ble to subsequent incumbrances upon different parcels of the mort- gaged premises, either by mortgage or judgment.^ For the purpose of determining the equity between the respective owners of parcels of land subject to a mortgage upon all, a mortgage is to be regarded as an alienation ^ro tcmto at the time of its date;" and a purchaser at a foreclosure sale acquires the equity of a grantee as of the date of the mortgage foreclosed.* A parol sale of part of the mortgaged premises, followed by pos- session and improvements on the same by the vendee, is sufficient as between the vendee and the mortgagor and those claiming under him, having actual notice of the parol sale, to throw the burden of the mortgage upon the part of the premises retained by the mort- gagor.' The principle of charging different parcels of the mortgaged prem- ises, which have been sold at various times subsequent to the mort- gage, in the inverse order of their alienation, is not always confined to the original alienations by the mortgagor, who is personally liable for the payment of the debt. The principle is equally applicable to several conveyances at different times by a grantee of the whole or a part of the mortgaged premises, where he conveys with warranty. ' Gill V. Lyon, i Johns. Ch. 447 ; ford v. Hill, 46 Conn. 42 ; Looney v. Clowes V. Dickinson, 5 Id. 235 ; Gouver- Quill, 3 Mackey (D. C.) 51. neur v. Lynch, 2 Paige, 300 ; Guion v. ' Stuyvesant v. Hall, 2 Barb. Ch. 151 ; Knapp, 6 Id. 35 ; Patty v. Pease, 8 Id. James v. Hubbard, i Paige, 228 ; Jen- 277 ; Snyder v. Stafford, 11 Id. 71 ; Kel- kins v. Freyer, 4 Id. 47 ; Skeel v. Spra- logg V. Rand, 11 Id. 5g ; New York Life ker, 8 Id. 182 ; Schryver v. Teller, 9 Id. Ins. and Trust Co. v. Milnor, i Barb. 173 ; New York Life Ins. and Trust Co. Ch. 353 ; Stuyvesant v. Hall, 2 Id. 151 ; v. Vanderbilt, 12 Abb. 458 ; Andreas v., The New York Life Ins. and Trust Co. Hubbard, 50 Conn. 35c. V. Cutler, 3 Sandf. Ch. 176 ; La Farge ' Mulligan's Appeal, 104 Pa. St. 503. Ins. Co. V. Bell, 22 Barb. 54 ; Warren * Hart v. Wandle, 50 N. Y. 381 ; Kel- V. Boynton, 2 Id. 13 ; Schrack v. Shri- logg v. Rand, 11 Paige, 60; La Farge ner, lOoPenna. St. 451; Gilbert v. Haire, Fire Ins. Co. v. Bell, 22 Barb. 67 ; Fas- 43 Mich. 283 ; McKinney v. Miller, 19 sett v. Mulock, 5 Col. 466 ; Lyman v. Mich. 142 ; Niles v. Coult, 30 N. J. Eq. Lyman, 32 Vt. 79 ; Sibley v. Baker, 23 30 ; Lock V. Fulford, 52 111. 166 ; Van Mich. 312. Slyke V. Van Loan, 26 Hun, 344 ; San- ' Root v. Collins, 34 Vt. 173. 184 MORTGAGES OF BEAL PEOPEETY. [§§ 272-273. In such case the several grantees take the land with all of its equita- ble rights and burdens.' And the right of each purchaser or incum- brancer to have the parcels in the hands, of the debtor, at the time he naakes his purchase or acquires his lien, applied to the payment of the prior lien, cannot be disturbed by anything which takes place after his title or lien is perfected, and each new claimant must take subject to prior equities. The principle under which several parcels of land covered by the same mortgage are subjected to the lien in the inverse order of their alienation, has no application where the successive conveyances are to the same party. A purchaser of all of the parcels of the mortgaged property has no equity to require that they shall be sold away from him in the inverse order in which he purchased." § 272. Examples. — One who takes a deed of a parcel of real es- tate with warranty against incumbrances may, upon discovering that it is incumbered, in common with other property, with a prior mort- gage, purchase such mortgage and enforce it primarily against the balance of the mortgaged property remaining in the hands of his grantor. And such grantor cannot protect himself or his property by the purchase of a subsequent mortgage upon it.° Where land which was subject to a mortgage was afterward sold, with f uU covenants of warranty and against incumbrances, in two different lots to different purchasers at different times, and the mort- gagee afterward entered (under the law of Massachusetts) for the purpose of strict foreclosure, and the foreclosure became absolute as to the lot last sold, it was held that the owner of the lot first sold might redeem by paying the balance due upon the mortgage debt after deducting the full value of the other lot with the buildings thereon, and that it was immaterial that the buildings had been erected after he acquired his title.* § 273. Land conveyed expressly subject to mortgage debt. — iWhere land is conveyed expressly subject to a mortgage thereon, the land is the primary fund as between grantor and grantee, and those deriving title from the grantee, for the payment of the mortgage ■ Guion V. Knapp, 6 Paige, 35 ; San- ' Kilborn v. Robbins, 90 Mass. (8 Al- ford V. Hill, 46 Conn. 42 ; Sager v. Tup- len) 466. per, 35 Mich. 134. ■> George v. Wood, 93 Mass. (11 Allen) ' Steere v. Childs, 15 Hun, 511. 41. § 274.] THE PRIMAET FUND. 185 debt ;^ and this is so even if the mortgagee holds other collateral secu- rity." The purchaser of the land acquires the equity of redemption merely, that is to say, the right to own the premises on paying the mortgage debt ; and he must either pay the debt, or allow the iands to be appropriated toward its payment. So, too, where land is sold under a junior judgment or mortgage, the purchaser acquires the equity of redemption merely, and the land is the primary fund for the payment of the mortgage.' If the purchaser of the mortgaged premises assumes the payment of the mortgage debt, the land is the primary fund for the payment ;* but if this be insufficient, the purchaser must, as between him and his grantor, discharge the obligation. The land is the security both of the mortgagor and of his grantee, as against their respective cove- nants ; but the debt is that of the grantee, and the mortgagor stands merely as his surety.^ A subsequent purchaser or incumbrancer of a portion of the mort- gaged property takes subject to any explicit provisions in a prior grant or mortgage of the property as to the order in which the parcels shall be sold, and that without any reference to the considerations for which such preferences were agreed upon." Each purchaser and incumbrancer is chargeable with notice of the provisions of the pre- vious deeds of his grantor, and of mortgages executed by him.' § 274. Where parcels are expressly charged with mortgage. — But if a portion of mortgaged land be conveyed subject to the whole mortgage, the amount of which is allowed out of the purchase money, the parcel conveyed is the primary fund to pay the debt." ' Jumel V. Jumel, 7 Paige, 591 ; Tripp v. Vincent, 3 Barb. Ch. 613 ; Ju- Huebsch v. Scheel, 8i 111. 281. mel v. Jumel, 7 Paige, 591 ; Halsey v. ^ Brewer v. Staples, 3 Sandf. Ch. 579. Reid, 9 Id. 446 ; Marsh v. Pike, 10 Id. 2 Tice V. Annin, 2 Johns. Ch. 125 ; 595 ; Cornell v. Prescott, 2 Barb. 16 ; McKinstry v. Curtis, 10 Paige, 503 ; Blyer v. MonhoUand, 2 Sandf. Ch. 478 ; Russell V. Allen, 10 Id. 249 ; Vander- Ferris v. Crawford, 2 Den. 595 ; Mills v. kemp V. Shelton, 11 Id. 28 ; Weaver v. Watson, i Sweeny, 374. Toogood, I Barb. 238 ; Matthews v. * Mickle v. Maxfield, 42 Mich. 304. Aikin, i N. Y. (i Comst.) 595. 'Steere v. Childs, 15 Hun, 511 ; Jumel * Torrey v. Bank of Orleans, g Paige, v. Jumel, 7 Paige, 591 ; Harris v. Fly, 649 ; Briscoe v. Power, 47 111. 447 ; Wa- Id. 421 ; Knickerbocker v. Boutwell, 2 ters V. Hubbard, 44 Conn. 340 ; Mich. Sand. Ch. 319. State Ins. Co. v. Soule, 51 Mich. 312 ; ° Bowne v. Lynde, 91 N. Y. 92 ; Hal- Welch V. Beers, 90 Mass. (8 Allen) 151 ; sey v. Reed, 9 Paige, 446 ; Russell v. Swett V. Sherman, 109 Mass. 231. Pistor, 7 N. Y. (3 Seld.) 171 ; Zabriskie 'Rubens v. Prindle, 44 Barb. 336; v. Salter, 80 N. Y. 555 ; Hart v. Wandle, 186 MORTGAGES OF BEAL PEOPEKTT. [§ 274. So, too, if by the terms of tlie bargain, the grantee of a parcel of the land is to assume a specified portion of the mortgage, such portion then becomes a specific lien on the parcel so conveyed.' And where a mortgagor conveys a part of the mortgaged lands by warranty deed, without reference to the incumbrance, such deed ex- empts the part sold from contribution, either to the mortgagor or to subsequent purchasers of the residue of the mortgaged lands.' Where a conveyance was made " subject, however, to the payment by the grantee of all existing liens upon said premises," this was held to charge the part conveyed with a portion of the mortgage in the proportion which its value bore to the whole security at the time of the conveyance.^ The primary liability of a portion of the mortgaged property, under a stipulation on the part of the grantee assuming the whole mortgage as part of the purchase money of such portion, will not be disturbed by a reconveyance of a part of the portion so conveyed to the grantor, and the several parts will remain liable for their propor- tions of the debt.' It has been held that where a conveyance is made of a portion of the mortgaged property in which no mention is made of incum- brances, and there are no circumstances showing a contrary intention, the presumption is that the grantor is to pay the whole mortgage, and the portion of the mortgaged lands remaining in his hands will be the primary fund for such payment.' Where joint owners of property, subject to a mortgage executed by themselves, made partition, and one of them assumed to pay off the whole of the incumbrances on the property, the portion of the property granted to the person so assuming will, as between the 50 N. Y. 381 ; Engle v. Haines, 5 N. J. « Henderson v. Truitt, 95 Ind. 309 ; Eq. (I Halst.) 186 ; 43 Am. Dec. 634 ; Chase v. Woodbury, 6 Cush. (Mass.) Lilly V. Palmer, 51 III. 331 ; Caruther v. 143 ; Kilborn v. Robbins, 8 Allen (Mass.) Hall, 10 Mich. 40 ; Cherry v. Monro, 2 466. Barb. Ch. 618 ; Brewer v. Staples, 3 ^ Hoy v. Bramhall, 19 N. J. Eq. 563 ; Sand. Ch. 579 ; Cannon v. Kreipe, 14 Hill's Administrators v. McCarter, 27 Kans. 324 ; Coles v. Appleby, 22 Hun, N. J. Eq. 41 ; Briscoe v. Power, 47 111. 72, afB'd 87 N. Y. 114. 447. ' Torrey v. Bank of Orleans, 9 Paige, * Weber v. Zeimet, 30 Wis. 283 ; Bowne 649 ; Briscoe v. Power, 47 111. 447 ; Wa- v. Lynde, 91 N. Y. 92. ters V. Hubbard, 44 Conn. 340 ; Mich. ' Hopkins v. Wolley, 81 N. Y. 77 ; State Ins. Co. v. Soule, 51 Mich. 312 ; contra, Haskell v. The State, 31 Ark.' Welch V. Beers, go Mass. (8 Allen) 151 ; 91. Swett V. Sherman, 109 Mass. 231. §275.] THE PKIMAET FUND. 187 mortgagors, be the primary fund for the payment of the mortgage, and on foreclosure will be first sold." § 275. Land of one person mortgaged for debt of another. — Where m'oney is raised on the real estate of a wife for the benefit of a third person, the husband joining with his wife in the bond, the land is the primary fund for the payment of the debt." And where a husband and wife owning undivided half parts of real estate, mort- gaged the whole to secure a debt of the husband, his half was held in equity to be primarily liable to pay the debt." So, where a husband and wife mortgaged a homestead to secure the payment of a partnership debt of a firm of which the husband was a member ; and subsequently to the execution of the mortgage the said firm made an assignment for the benefit of its creditors, the mortgagors were held entitled to have a pro rata share of the pro- ceeds of the assets of the partnership in the hands of the assignee, ap- plied in relief of the obligation, their homestead standing as security only for the balance.* Where one mortgage is made to secure unpaid purchase money of two parcels of land belonging to different owners, each parcel is prima- rily hable for its own price.' Where two persons jointly purchased land and gave a mortgage for the purchase money and made amicable partition, and one paid his share of the mortgage debt, the parcel held by the other was directed to be sold first in satisfaction of the balance due upon the mortgage." Where a testator mortgaged his individual real estate to secure the payment of the notes of his firm, and died before their payment, having devised the mortgaged property without express direction in his wiU for the payment of the mortgage, it was held that the firm assets in the hands of his executors were primarily liable to satisfy the mortgage.' To charge a purchaser with the equity of one person whose lands are mortgaged for the debt of another, such purchaser must have ' Hards v. Burton, 79 111. 504. Barb. 561; Smith v. Townsend, 25 N. Y. 'Moore v. Moore, 21 How. 211; Mof- 479 ; Bank of Albion v. Burns, 46 N. Y. fett V. Roche, 77 Ind. 48. 170. ' Erie County Savings Bank v. Roop, ^ Dickson v. Chorn, 6 loWa, 19. 80 N. Y. 591 ; Loomer v. Wheelwright, ' Coutant v. Servoss, 3 Barb. 128. 3 Sand. Ch. 135; Niemcewicz v. Gahn, * Roddy's Appeal, 72 Penna. St. 98. 3 Paige, 614; Vartie v. Underwood, 18 'Robinson v. Robinson, i Lans. 117. 188 MORTGAGES OF REAL PROPERTY. . [§§ 276-277. notice of the facts. Thus, two persons owned a piece of land in com- mon, and one of them owned another piece ; both pieces were mort- gaged to secure the debt of the person owning the latter parcel, who thereafter conveyed the latter parcel to a purchaser without .notice and with warranty against incumbrances. Subsequently he sold his undivid- ed interest in the parcel owned in common to one without knowledge of the other facts, and it was held that the purchaser of the parcel held in severalty might insist upon the whole debt being satisfied out of the parcel held in common, and that the purchase of the half in- terest in the latter piece was to be in no degree prejudiced by the rascality of his grantor, but was to take as if the mortgage debt had been the debt of both of the parties to the instrument.' § 376. Release from primary liability. — One who purchases part of mortgaged lands and agrees with his grantor to assume the whole mortgage in exoneration of the residue of the lands, can discharge his land from the consequences of that assumption by agreement with his grantor, made while stiU the owner of the residue of the land subject to the mortgage, and a grantee of the residue after such discharge cannot claim the benefit of the assumption. The grantee succeeds only to the equities of the grantor existing at the time of the convey- ance, and that without any question of notice. The case will be quite different if the discharge is given after the grantor has sold the resi- due of the land to a party who has relied on the assumption.^ § 877. Subrogation. — Where a creditor has two funds, to either of which he may resort for the satisfaction of his debt, and one of which is primarily liable for the payment thereof, the owner of the latter fund stands in the relation of surety for the owner of the pri- mary fund in the application of the equitable principle of substitution in behalf of sureties. A surety, or a party who stands in the situation of a surety, is entitled to be subrogated to all the rights and remedies of the creditor whose debt he is compelled to pay, as to any fund, lien, or equity which the creditor had against any other person or property on account of such debt.' If the mortgagee knowingly and voluntarily do any act which shall impair or destroy this right of subrogation, he, and not the person who stands as surety, can be made to sufier ; and it is on this principle that the release of a portion of Kennelly v. Kelly, 51 Conn. 329. ' Eddy v. Traver, 6 Paige, 521 ; ' Judson V. Dada, 79 N. Y. 373, Cheesebrough v. Millard, iJohns.Ch. 412. §§ 278-279.] THE PEIMAEY FTJKD. 189 the mortgaged premises, which are primarily liable, with notice of the equities of other parties, is held to he pro tanto a discharge of the mortgage.' It has also been said that a mortgagee having a claim upon two funds, may lose his claim upon one of them by mere laches, and that if a mortgagee, to accommodate the heirs of a deceased mortgagor, delays foreclosure until the lands fall in value, he cannot thereafter call upon the personal estate." § 278. Junior liens protected. — Where the holder of a first mort- gage has received ample collateral security for its payment, the rights of a subsequent mortgagee cannot be defeated by the assignment of the first mortgage without the collaterals to a person having knowl- edge of the facts.' So, stock in a corporation assigned as collateral to a mortgage upon real estate, will, as between the mortgagor and the second mortgagee, be applied to the payment of the mortgage before recourse is had to the land ; and this equity will not be defeated by a levy on the stock under a judgment against the mortgagor.* § 279. Controlling remedy of mortgagee. — The duty of the creditor holding the prior lien is a negative one, and consists in re- fraining from doing any act which shall injure or destroy the rights of the person who stands in the situation of surety for the debt. There is no general rule which compels the creditor to look to the principal debtor, and exhaust his remedy against the primary fund, before he can be permitted to resort to the fund which is only sec- ondarily liable ; ° but there are cases where the remedy of a creditor may, in equity and good conscience, be so controlled by the court as to preserve the rights of both creditor and surety, and enable them both to escape without injury." But a court of equity will take care not to give the surety or junior creditor this relief, if it will endanger thereby the prior creditor, or in the least impair his prior right to raise the debt out of both funds. The utmost that equity enjoins in such a case is, that the creditor who has a prior right to two funds, ' Ingalls V. Morgan, lo N. Y. (6 Seld.) * Loan Association v. Hawk, 27 N. J. 187- Eq- 335- ^ Johnson v. Corbett, 11 Paige, 265, ^ Hayes v. Ward, 4 Johns. Ch. 131 ; 272. JeTy V. Resell, 32 Ark. 478. " Bergen Savings Bank v. Barrows, 30 * Ingalls v. Morgan, 10 N. Y. (6 Seld.) N. J. Eq. 89. 178, and cases cited ; Harrison v. Gue- rin, 27 N. J. Eq. 219. 190 MORTGAGES OF EEAL PEOPEETY. [§ 279. shall exhaust that to which the junior creditor cannot resort. But when there exists any doubt as to the sufficiency of that fund, or even where the prior creditor is unwilling to run the hazard of getting it out of that fund, there is no principle which can take from him any part of his security until he is completely satisfied.' The cases have never gone so far as to sanction an interference with the remedies of the mortgagee, when such action will trench upon his rights or oper- ate to his prejudice.' A mortgagee's right to prompt foreclosure will not be impeded by compelling him, in the interest of a subsequent purchaser of the re- maining land, to first resort to his personal remedy against a purchaser of a part of the mortgaged premises from the mortgagor, who as- sumed to pay a part of the mortgage debt.' In some cases, it has been said that the junior creditor who desires to control the remedy of the senior creditor should give secu- rity against the expense and risk involved in the proceeding ; * and if any right of the senior creditor would be sacrificed by delay, he will not be compelled to wait without indemnity in order to protect junior equities.' A mortgagee of land on which there is an outs1;finding prior ven- dor's lien, whose. mortgage also includes other lands as well as personal property, will be compelled in equity at the suit of the vendor hold- ing such vendor's lien, to exhaust the other lands and property be- fore resorting to the land affected by the vendor's lien, and this although the mortgagee holds a lien superior to the vendor's Hen, because he had no notice thereof when he took his mortgage." In a ease where a mortgagee had intentionally refrained from taking satisfaction out of a fund primarily hable, his bill to foreclose on the remaining property was dismissed.' Where a mortgagee holding a lien upon two funds comes into a court of equity to ask equitable relief, as, for instance, to set aside a sale made against the fund secondarily liable, he may be compelled to exhaust the primary fund for the payment of his debt ;° so, too, if the primary fund is outside of the jurisdiction of the court, the cred- ' Evertson v. Booth, ig Johns. 493 ; * Hayes v. Ward, 4 Johns. Ch. 131. King V. McVickar, 3 Sandf. Ch. 192. 'James v. Hubbard, t Paige, 228. ^Story's Eq. Jur. §633; Slater v. 'Gordon v. Bell, 50 Ala. 213. Breese, 36 Mich. 7 ; Walker v. Covar, ' Moffett v. Roche, 77 Ind. 48. 2 S. Car. 16. ' Soule v. Ludlow, 3 Hun, 503 ; s. c. 3 Palmer v. Snell, ill 111. 161. 6 N. Y. Sup. (T. & C.) 24. §§ 280-281.J PRIORITIES. 191 itor may be refused relief until he shows that he has exhausted his other remedy.' And the court, on the foreclosure of a first mortgage, may, for the protection of junior liens, require the plaintiff to first make application of a collateral security in his hands.'' The rule requiring the mortgagee to seek satisfaction out of the fund in which the junior lienor has no interest, is subject to the limi1> ation that if other persons have a superior equity, their rights must be respected.^ § 280. Sale made in one parcel. — ^Where several parcels of mort- gaged land are included in one judgment of foreclosure, the equities of the various parties in interest are commonly protected by selling the parcels in the order of their equitable liability to pay the mortgage debt. Where the mortgaged premises can be economically or profit- ably sold in parcels, this afEords a convenient method of protecting the rights of all concerned, without trespassing on the just claims of the prior creditor ;^ but cases may be supposed of several parcels of land bound by the same judgment, and subject also to a prior lien, where a sale in gross under the judgment would be more beneficial to all the parties concerned than one in detail,* and, in such cases, the court will not compel the mortgagee to adopt a disadvantageous method of sale, in order to enable junior incumbrancers or owners the more easily to adjust their equities as between themselves." It will be remembered that the order of sale in parcels is only of value to preserve equitable rights, and that equitable rights do not depend upon forms. No matter how the fund may have been created, it will be marshalled and distributed according to equitable rules, quite independent of the form in which the sale was made, and the parcels are sold separately or in a certain order for mere convenience of the court in applying such rules.' PEIOEITIj;S INDEPENDENT OF THE EECOEDING ACTS. § 281. Priority of mortgages as controlled by agreements of parties. — Where two mortgages have the same date, and are acknowl- > Rice V. Harbeson, 2 N. Y. Sup. (T. « Frost v. Frost, 3 Sandf. Ch. 188. & C.) 4, afB'd 63 N. Y. 493. . 'Clowes v. Dickinson, 5 Johns. Ch. ' Pettibone v. Stevens, 15 Conn. 19. 235 ; s. c. affi'd 9 Cow. 405 ; James v. ' Baird v. Jackson, 98 111. 78. Hubbard, i Paige, 228 ; Snyder v. Staf- *Walcott V. Schenck, 23 How. 385. ford, 11 Id. 71; Oppenheimer v. Walker, 5 Cunningham v. Cassidy, 17 N. Y. 3 Hun, 30; s. c. 5 N. Y. Sup. (T. & C.) 276 ; American Ins. Co. v. Oakley, q 325. Paige, 259. 192 MORTGAGES OE EEAL PEOPERTT. [§ 281. edged and delivered at tte same time, the recording acts have no application in determining their priority." In such a case, the under- standing, agreement, and intention of the parties will control as to which shall have a preference over the other, so as to be a prior lien upon the premises,'' and the assignees of such mortgages, even with- out notice, would, it seems, be bound by such agreements." In the absence of agreement or equities to the contrary, two mort- gages executed and delivered at the same time are of equal lien,' even though maturing at different dates,' and recorded at different times." Although one mortgage cannot acquire priority over another de- livered at the same time, by being recorded earlier, still where one is recorded shortly before the other, this may furnish evidence of an in- tention to give it priority.' And in the absence of evidence of any other fact, priority of record will control. ° In order to avoid the effect of the recording act, and to awai-d to one mortgage equality of lien over another,, previously recorded, it should appear clearly and beyond doubt that the two mortgages were in fact executed not only on the same day, but at the same time, and that each mortgagee had knowledge of the rights being acquired by the other." The owner of a mortgage may contract to relinquish his right of legal precedence to another of junior date, and if the contract be made in good faith and be founded on a valuable consideration, a court of equity would adjust the rights of the parties accordingly.'" Such an agreement, however, is not entitled to be recorded, nor would the record be constructive notice to anybody." 'Granger v. Crouch, 86 N. Y. 494; ■• Vredenburgh v. Burnet, 31 N. J. Eq. Stafford v. Van Rensselaer, g Cow. 316, 229 ; Eleventh Ward Savings Bank v. afE'g Van Rensselaer v. Stafford, Hopk. Hay, 55 How. 444; Riddle v. George, 58 569 ; Douglass v. Peele, Clarke, 564. N. H. 25; Gausen v.Tomlinson, 23 N. J. ^ Jones V. Phelps, 2 Barb. Ch. 440, 446; Eq. 405. Fort V. Burch, 5 Den. 187 ; Jackson v. ^ Collerd v. Huson, 34 N. J. Eq. 38, Post, 15 Wend. 588 ; Van Rensselaer v. and valuable note of the reporter. Clark, 17 Id. 25 ; Greene v. Warnick, ^ Gausen v. Tomlinson, 23 N. J. Eq. 64 N. Y. 220, rev'g Greene v. Deal, 4 405 ; Walker v. Buffands, 63 Cal. 312. Hun, 703 ; Rigler v. Light, 90 Penna. ' Naylor v. Throckmorton, 7 Leigh. St. 235; Wheeler V. McFarland, 10 Wend. (Va.) 98 ; 30 Am. Dec. 492. 318; Gilman v. Moody, 43 N. H. 239; 'Clabaugh v. Byerly, 7 Gill (Md.) 354; Freeman v. Schroeder, 43 Barb. 618 ; 48 Am. Dec. 575 ; White v. Leslie, 54 Wray v. Fedderke, 43 N. Y. Super. Ct. How. 394. (11 J. & S.) 335; Chadbornv. Rahilly, ° White v. Leslie, 54 How. 394. 28 Minn. 394 ; 10 N. W. Reptr. 420 ; '° Darst v. Bates, 95 111. 493. Matthews v. Everett, 23 N. J. Eq. 473. " Gillig v. Maas, 28 N. Y. 191, 213 ; ^ Greene V. Warnick, j«^rffl. Bank for Savings v. Frank, 56 How. §§ 282-283.] PEiOEiTiES. 193 § 282. Examples. — ^Where a mortgagee without payment released Ms mortgage of record to enable the mortgagor to mortgage the same lands to another person and for an agreed amount, but with the agree- ment that as between the parties it should remain in full force there- after, and subsequently a third mortgage was made to a person having notice of the facts, it was held that the first mortgage, though released of record, continued a lien as against the third.' If a mortgagor and mortgagee agree that the mortgage shall not be recorded, in order that the mortgagor may raise more money on the land, notice of such mortgage and agreement on the part of a second mortgagee, who records his mortgage first, wiU not let in the first mortgage to priority.'' A mortgage to secure $1,200, with an incorrect description, was recorded, and thereafter a second mortgage, covering the same prop- erty intended to be mortgaged by the first, was made, which con- tained the words, " except one mortgage for |1,200." Subsequently the mortgagor executed a new mortgage to correct the mistake in the first description, and it was held that the second mortgagee was charged with notice of the first mortgage, and the corrected mort- gage was given a prior lien.' Where a mortgage was given on real estate, incumbered by an un- recorded mortgage, with an agreement that the second mortgage should be a prior lien and first recorded, but the holder of the first mortgage fraudulently recorded his first, it was held that, as between the original parties and aU persons with notice of the facts, the second mortgage was the prior lien ; but that the rule was otherwise as against the innocent assignee of the first mortgage.* § 283. Conflicting claims to priority. — "Where D had a first mortgage on certain lands, which was void for uncertainty as to Gr as to part of the land, but good as to L, who had notice of the mistake ; while L has a second mortgage which sufficiently described the land, and which was prior to G, who had attached, it was held that the third incumbrancer (G) was entitled to nothing until the second (L) was paid ; and that the second had no right to any of the fund until an amount equal to the first mortgage (D) had been taken therefrom, and that the first mortgagee should not be allowed to charge against 403, afii'd 45 N. Y. Super. (13 J. &. S.) ' Hendrickson v. Wooley, 39 N. J. 404. Eq. 307. ' Bank v. Butterfield, 100 Ind. 229. ^ Clark v. Bullard, 66 Iowa, 747. * Cook V. Shone,. 63 Iowa,. 352. 13 194 MORTGAGES OF EEAL PEOPERTY. [§§ 284r-285. the second any sum which, by reason of his laches, had been appro- priated to the third incumbrancer.* § 284. Priority of purchase-money mortgages. — It is provided by statute that whenever lands are sold and conveyed, and a mort- gage is given by the purchaser at the same time to secure the pay- ment of the purchase money, or any part thereof, such mortgage shall be preferred to any previous judgment which may have been ob- tained against the purchaser." And also that, where a husband shall purchase lands during coverture, and shall at the same time mortgage his estate in such lands to secure the payment of the purchase money, his widow shall not be entitled to dower out of such lands as against the mortgagee or those claiming under him, although she shall not have united in such mortgage, but she shall be entitled to her dower as against all other persons." The equity of the rule which secures to the vendor of property a priority of lien for the purchase price, commends itself to our sense of justice, and, quite independent of statute, the rule would be the same. Indeed, even if no mortgage were given, the vendor would hold a lien for his unpaid purchase money, which would be prior to the claims of all persons, except iona fide purchasers from his vendee, unless he should do some act which manifested a willingness to waive the lien.* The theory upon which the rule is based seems to be that neither the vendor nor any person claiming under him, unless for a valuable consideration and without notice, shall hold and enjoy the estate without paying for it, and that, to the extent of the unpaid purchase money, the title still remains in the vendor. The deed and the mortgage back are regarded as the same transaction, and taking the whole together the purchaser acquires only the right of redemption." § 285. Examples. — A mortgage for purchase money has no pri- ority over other liens upon the property existing at the time of the conveyance to the mortgagor. ° 1 Goodbar v. Dunn, 6i Miss. 6i8. Grain, i Paige, 455 ; Rawson v. Lamp- « I R. S. 749, § 5 ; Codej § 1254 ; Curtis man, 5 N. Y. (i Seld.) 456 ; Hitchcock V. Root, 20 III. 53 ; Parsons v. Hoyt, 24 v. The Northwestern Ins. Co., 26 N. Y. Iowa, 154. 68 ; Dusenbury v. Hulbert, 59 N. Y. 541 ; 3 1 R. S. 741, 1 5 ; Walters v. Walters, Savage v. The Long Island Ins. Co., 43 73 Ind. 425. How. 462 ; Moring v. Dickerson, 85 N. < See Vendor's Lien for Purchase C. 466 ; Curtis v. Root, 20 111. 53 ; BoUes Money, §§ 52, 65. v. Carli, 12 Minn. 113 ; Clark v. Brown, ' Stow V. Tifft, 15 Johns. 458 ; Jackson 85 Mass. (3 Allen) 509. ■V. Austin, 15 Id. 477 ; Van Home v. '^Houston v. Houston, 67 Ind. 276. § 386.] ' PEIOEITIES. 195 ^ A purcliase-inoney mortgage has priority over a mechanic's lien for work and materials done and furnished on the employment of the purchaser, before the time of the delivery of the deed, for which the vendor has contracted no personal obligation.' Where a widow assigns her dower right and takes back a mortgage to secure the consideration, her equities are the same as if she had conveyed the land and taken back a mortgage for the purchase price, and such mortgage is prior to the lien of a judgment against the grantee, though he was the heir of the husband of the dowress." § 286. What is a purchase-money mortgage. — A mortgage given to a third person who advances the purchase money, has the same priority over a prior judgment as if made to the vendor.' It has also been said that a mortgage given for future advances to im- prove the property at the time of the mortgagor's taking title, would be entitled to a preference over the prior creditors of the mortgagor.' A mortgage from a lessee to his lessor, delivered at the same time with a lease for ninety-nine years, to secure future advances, has also been held to have a preference over a previous judgment against the mortgagor." So, a mortgage executed some time after the mort- gagor acquired title, to a person who was his surety for the purchase money, was preferred to a prior judgment against the mortgagor." When a deed and mortgage back are acknowledged and recorded simultaneously, the presumption is that the latter was for purchase money.' A recital in a mortgage that it was given for purchase money will not make it a purchase-money mortgage if it was not so in fact.' And, on the other hand, a mortgage actually given for purchase money will have all of its proper qualities though no such recital is contained in it.' ' ' Lamb v. Cannon, 38 N. J. Law, Nickum, 38 Md. 270 ; Stansell v. Rob- 362 ; Huber v. Disbold, 25 N. J. Eq. erts, 13 Ohio, 148 ; Foster's Appeal, 3 170 ; Strong v. Van Duerson, 23 N. J. Pa. St. 79. Eq. 369. * Tallman v. Farley, i Barb. 280. * Pope V. Mead, 99 N. Y. 201. ' Ahem v. White, 39 Md. 409. " Jackson v. Austin, 15 Johns. 477 ; " Haywood v. Nooney, 3 Barb. 643. Ray V. Adams, 4 Hun, 332 ; Kittle v. ' Cunningham v. Knight, i Barb. Van Dyck, i Sand. Ch. 76 ; Clark v. 399. Munroe, 14 Mass. 351 ; McCauley v. " Taylor v. Post, 30 Hun, 446. Grimes, 2 Gill & Johns. 318 ; McGowan ' Appeals of City National Bank and V. Smith, 44 Barb. 232 : contra. Alder- York County National Bank, 91 Pa. St. son V. Ames, 6 Md. 56 ; Henesler v. 163. 196 MORTGAGES OF REAL PROPERTY. [§ 287 § 287. Conflicts between mortgages given by purchaser at time of purchase.^ — In Dusenbv/ry v. Hulbert (59 N. Y. 541), a curious question was presented upon the conflicting claims of two mortgages to priority. In that case a contract was made by the owner of the land to sell it, part of the price to be paid in cash and part to be secured by a purchase-money mortgage. Prior to receiv- ing the deed, the intended purchaser falsely represented to a third person that he had title and could give a first mortgage, and upon this statement and upon his promise to make such a mortgage, he obtained a loan of $1,500. Subsequent to getting the money the transfer was closed, and a purchase-money mortgage was given. The vendee then executed a mortgage to secure tlie $1,500 loaned, and recorded it with his deed, but the vendor omitted to record his mort- gage for some days afterward. The court held that the purchase- money mortgage had priority ; the mortgage to the third person did not take eflEect until it was executed and after the delivery of the deed, and it then became a lien on his interest only, which was a mere equity of redemption. The third person was not protected by the recording acts, because the mortgage, when made, was in payment of an antecedent indebtedness, and the mortgagee did not part with anything on the faith of the mortgage, or because of the condition of the public records. Where a purchaser of land gave two mortgages for purchase money, one to his vendor and another to a third person for money used to make a cash payment, and both mortgages were recorded on the same day, the latter first, the mortgage given to the vendor was held to have priority.' Where a grantee gave back a purchase-money mortgage before de- livery of the deed, and afterward, at the time the deed was actually delivered, he also mortgaged the premises to a third party, in whose presence the delivery of the deed was made, and who had no notice of the prior mortgage, it was held that the delivery of the deed in the latter's presence was notice to him that, until then, the mortgagor had no title to incimiber to his prejudice, and that the second mortgage took precedence of the mortgage given to the vendor of the property." ' Turk V. Funk, 68 Mo. 18 ; 30 Am. R. = Heffron v. Flanigan, 37 Mich. 274; 771 ; Clark v. Brown, 3 Allen (Mass.) Farmers' L. & T. Co. v. Maltby, 8 509 ; Heffron v, Flanigan, 37 Mich. 274 ; Paige, 361 ; State v. Bradish, 14 Mass. Brasted v. Sutton, 29 N. J. Eq. 513. 296. §§ 288-289.J PEIORITIES. 197 § 288. Mortgages for purchase money given after delivery of deed. — A mortgage, to be entitled to all of the special qualities of a mortgage for purcliase money, should be given at the time of the de- livery of the deed. If it be given to a third person for money loaned to purchase the property, it will stand, as any other mortgage for borrowed money as of its date, and will consequently be inferior in lien to prior judgments against the mortgagor, unless given at the very time of the vesting of the title in him, and as a part of that transaction.' If given to the vendor of the land it will hold priority over judgments obtained against the mortgagor prior to the vesting of the title in him,'' as well as over the claim of his widow for dower." As a general rule, the hen will prevail against general judgment cred- itors of the vendee.* Where a vendor does not receive payment of the entire amount of the consideration for the purchase money, he has an implied lien for the balance which may be enforced as against the vendee and all per- sons holding under him, except purchasers in good faith.'' If a mort- gage is given by the vendor for such purchase money, its validity as against creditors and other Hens will be tested by the sufficiency of the vendor's implied lien at the time of the dehvery of such mort- gage." Such lien cannot generally exist against purchasers in good faith, under a conveyance of the legal estate without notice, where the purchase money has been paid.' It has also been determined that a judgment creditor who advances his money upon the faith of an unincumbered title upon the record, without notice, is entitled to the lien acquired thereby, in preference to the secret, unrecorded lien of the vendor for part of the purchase money. ° But such a judgment will not prevail unless it is procured and docketed so as to become a legal hen prior to the delivery and recording of a mortgage executed for such unpaid purchase money." § 289. No priority for money paid for improvements. — There is no principle of equity by which a purchaser of real estate which, at ' Garson v. Green, i Johns. Ch. 308 ; ' See Vendor's Lien, ante, §| 52, 65. Clark V. Hall, 7 Paige, 382. « Spring v. Short, 90 N. Y. 538. ' In the matter of Howe, i Paige, 129 ; ' Fisk v. Potter, 2 Keyes, 64 ; 2 Abb. Lane v. Ludlow, 6 Id. 316 n. ; Parks v. App. Dec. 140 ; Bayley v. Greenleaf, 7 Jackson, n Wend. 442; Robinson v. Wheat. 46; Garson v. Green, i Johns. Williams, 22 N. Y. 386. Ch. 308, 309. ' Warner v. Van Alstyne, 3 Paige, 513. * Hulett v. Whipple, 58 Barb. 224. ■* Hulett V. Whipple, 58 Barb. 224. ' Spring v. Short, 90 N. Y. 538. 198 MORTGAGES OF EEAL PEOPBETY. [§ 290. the time of the purchase, is subject to the hen of a judgment, can claim improvements subsequently made by him, although without knowledge of the judgment, to be exempt from the lien. The law supposes the party purchasing to know of the lien, and charges on him the consequences of such knowledge. If, when such a lien ex- ists, he voluntarily expends money on the premises, the same becomes subject to the lien. Any other rule would actually destroy the lien of a judgment on real estate. The principle upon which equitable liens are allowed to have priority, is that the contract was made before the docketing of the judgment. After that date the property, with any subsequent improvements, is subject to the lien.' So, money expended in improvements by the mortgagor or his grantee subsequent to the mortgage, cannot be given a hen prior to that of the mortgage.'' § 290. Priority of mortgages over judgments. — The recording acts are only intended to protect hona fide purchasers ; that is to say, purchasers for a present and valuable consideration, who have notice 1 of no facts except those which are disclosed by the public records. An unrecorded mortgage will therefore be entitled to a preference I over a subsequent assignment for the benefit of creditors, which was duly recorded,' or over a subsequently docketed judgment,' or over a subsequent attachment.' But a iona fide, purchaser under the dock- eted judgment would be protected against the unrecorded mortgage.' j Where the liens of a mortgage and of a judgment attach at the same time, the former is paramount.' - The lien of a mortgage unrecorded at the date of a judgment, but re- corded before a sale upon an execution issued thereon, is prior to the lien of the judgment, and the purchaser buys with constructive notice of the mortgage.' ' Where a judgment is marked "secured on appeal," or "hen sus- pended on appeal," pursuant to the provisions of our Code, a mort- ' Per Ingraham, J., in Cook v. Kraft, 45 Pa. St. 172 ; FoUett v. Hall, 16 Ohio, 3 Lans. 512 ; 41 How. 279 ; 60 Barb, iii ; 47 Am. Dec. 365. 409; s. c. affi'd sub nam. Cook v. Banker, ° First National Bank v. Hayzlett, 40 50 N. Y. 655. Iowa, 659 ; Campion v. Kille, 15 N. J. ' Martin v. Beatty, 54 111. 100. Eq. 476 ; Rogers v. Abbott, 128 Mass. ' Wyckoff V. Remsen, 11 Paige, 564. 102 ; Reed v. Ounby, 44 Mo. 204. * Jackson v. Dubois, 4 Johns. 216; ° Jackson v. Dubois, 4 Johns. 216. Schmidt v. Hoyt, i Edw. 652 ; Williams ' Tifft v. Buell, Gen. T., March, 1856, V. Tatnall, 29 111. 553 ; Britton's Appeal, cited in Clinton's Digest. ' Holden v. Garrett, 23 Kans. 98. §§ 291-293. J PEiOEiTiES. 199 gage thereafter given, thougli for an antecedent debt, acquires priority if the mortgagee acts in good faith.' In order that a mortgage lien shall take precedence of a judgment, it must be a valid and consummated lien. So, a mortgage executed but not delivered to or accepted by the mortgagee, will not displace an attachment,'' even though such undelivered mortgage has been recorded.' § 291. Reforming mortgage. — A judgment being a general lien on the land of the debtor, is subject to every equity which exists against the land in the hands of the judgment debtor at the time of docketing the judgment.* So, where a defective mortgage is perfected or corrected, and subsequent judgments are recovered prior to such correction, the mortgage will be prior,° though this might depend upon the character of the mistake and the nature of the transaction." The description of property contained in a mortgage cannot be re- formed or changed to the prejudice of a iona fide purchaser, and a person who takes a junior lien for a past due indebtedness and, in con- sideration of the hen, extends the time of payment and also agrees to purchase and carry another mortgage executed by the debtor, is such a purchaser.' "Where, upon the renewal of a note, the mortgage securing the same was cancelled and a new one executed upon the same property, the lien of the second mortgage was held to date only from its execu- tion as against one who, without actual notice of any claim to the con- trary, purchased the property under a judgment which was a lien prior to the date of such execution.' § 292. The doctrine of tacking. — It was an estabhshed doctrine in the English chancery that a lona fids purchaser, and without notice of any defect in his title at the time of the purchase, may law- fully buy any statute, mortgage, or incumbrance, and if he can defend by them at law, his adversary shall have no help in equity to set those incumbrances aside. And as mortgagees are considered in equity as purchasers pro tcmto, the same doctrine was extended to them, and a ' Union Dime Savings [nstitution v. Kraft, 41 How. 279 ; 60 Barb. 409 ; 3 Duryea, 67 N. Y. 84. Lans. 512. '^ Evans v. White, Adm'r, 53 Ind. i. * Van Thornily v. Peters, 26 Ohio St. ' Woodbury v. Fisher, 20 Ind. 387. 471. * Kierstead v. Avery, 4 Paige, g. ' Post v. Embree, 54 Iowa, 14. * Burrs V. Burrs, 3 Ves. Jr. 576 ; Foster 'Washington Co. v. Slaughter, 54 V. Fouat, a Serg. & R. 11 ; Cook v. Iowa, 265. 200 MOETGAGES OF REAL PEOPEETT. [§ 293. mortgagee who had advanced his money without notice of any prior incumbrance, might, by getting an assignment of a statute, judgment, mortgage, or recognizance, protect iimself from any incumbrance subsequent to such statute, judgment, mortgage, or recognizance, though prior to his mortgage ; that is, he would be allowed to tack, or unite his mortgage to such old security, and would by that means be entitled to recover all moneys for which such security was given, together with the money due on his mortgage, before the interme- diate mortgagees are entitled to recover anything.' Thus if a third mortgagee without notice of a second mortgage, should purchase in the first mortgage, by which he would acquire the legal title, the second mortgagee would not be allowed to redeem the first mortgage without redeeming the third mortgage also." The general reasoning by which this doctrine was maintained was that as between the various incumbrancers the equities are equal, and that, in such case, the law must prevail.' This doctrine was known as the " equitable doctrine of tacking "; it has been disapproved by most writers as tending to gross injustice, and it stood until repealed in 1874, as a monument of the misleading tendency of technical rules which have no foundation in the principles of natural justice. The doctrine of tacking is inconsistent with our recording acts, and has never been adopted or recognized in this State. In the first place the English rule only protects a third mortgagee who purchases without notice of the second mortgage, and the record gives such notice ; in the second place the recording acts themselves control in regulating priority.* The doctrine of tacking has also been repudiated in other States having recording acts." § 293. Several debts secured by the same mortgage. — A class of decisions in some of the other States seem to establish as an arbi- trary rule that where there are several holders of notes or bonds se- cured by one mortgage, and such notes or bonds mature at different ' Bouvier's Law Diet., tit. Tacking ; 2 v. Carhart, Hopk. Ch. 234; Bank of Fonbl. Eq. 306. Utica v. Finch, 3 Barb. Ch. 293, 298. "^ Story's Eq. Jur. § 412. ^ « Osborn v. Carr, 12 Conn. 196 ; Aver- 8 Id. § 413. _ ill V. Guthrie, 8 Dana, 82 ; Brazee v. * Grant V. Bissett, i Cai. Cas. in Er. Lancaster Bank, 14 Ohio, 318'; Ander- 112; Frostv. Beekman, i Johns. Ch. 298, son v. Neff, 11 S. & R. 208 ; Thompson 299 ; Parkistv. Alexander, I Id. 398, 399; v. Chandler, 7 Me. 381; Siter v. Mc- McKinstry v. Marvin, 3 Id. 466 ; Burnet Clanachan, 2 Gratt. 305 ; Chandler v. V. Denniston, 5 Id. 35 ; St. Andrew's Dyer, 37 Vt. 345. Church V. Tompkins, 7 Id. 14 ; Brigden § 294.] PEIOEITIES. 201 dates, those first falling due liave priority of lien, for the reason that the power to first foreclose implies such priority.' They treat the holders of such notes and bonds as having successive mortgages whose liens arise in the order of agreed payment. After all, these decisions probably rest upon the idea of intention and equity, although they seem to infer the intention somewhat arbitrarily from the one fact of a difference in the maturing of the notes and bonds. While it may be granted that such a fact is one to be taken into consideration and have its weight, it should not be deemed as controlling or to serve as the basis of an arbitrary and inelastic rule.'' The authorities are not uniform, and numerous cases hold that where a mortgage is made to secure two or more obligations, each must, in the absence of special agreement, shaxe pro rata in the fund irrespective of their dates of maturity.' "Where two or more debts are secured by as many mortgages exe- cuted at the same time, they take equal liens and one does not gain priority by its earlier maturity.* And a single mortgage given to secure obligations to difEerent per- sons, maturing at difEerent times, has been held, in Indiana, to be equivalent to the simultaneous giving of separate mortgages, and no priority was allowed, although in that State the rule is otherwise if the notes had been payable to the same party and had passed into the hands of different owners.' § 294. Assignment of part of debt secured by mortgage. — It has been determined in some other States that where a mortgage se- cures several notes, and the mortgagee assigns one of them, retaining the others, the claim first assigned is entitled to priority of payment." ' Isett V. Lucas, 17 Iowa, 503 ; Ayers ° Per Finch, J., in Granger v. Crouch, V. Rivers, 64 Iowa, 543 ; Koester v. 86 N. Y. 494, 500. Burke, 81 111. 436 ; Funk v. McReynolds' ' Wilson v. Eigenbrodt, 30 Minn. 4 ; Adm'rs, 33 Id. 481 ; Moore v. Titman, English v. Carney, 25 Mich. 178 ; Mc- 33 Id. 358 ; Flower v. Elwood, 66 Id. Curdy v. Clark, 27 Mich. 445 ; Wilcox 438 ; Gardner v. Diederichs, 41 Id. 158 ; v. Allen, 36 Mich. 160 ; Hancock's Ap- Humphreys v. Martin, 100 Id. 592 ; peal, 34 Pa. St. 155 ; Cage v. Her, 5 Stanley v. Beatry, 4 Ind. 134 ; Mur- Smedes & M. 410 ; 43 Am. Dec. 521 ; dock V. Ford, 17 Id. 52 ; Hough v. Belding v. Manly, 21 Vt. 550. Osborne, 7 Id. 140 ; Gerber v. Sharp, 72 * CoUerd v. Huson, 34 N. J. Eq. 38 ; Ind. 553 ; Roberts v. Mansfield, 32 Ga. Cain v. Hanna, 63 Ind. 408 ; Granger v. 228 ; State Bank v. Tweedy, 8 Black. Crouch, 86 N. Y. 494. (Ind.) 447 ; 46 Am. Dec. 486 ; Richard- ' Shaw v. Newsam, 78 Ind. 335. son V. McKim, 20 Kans. 346 ; Aultman ' Bryant v. Damon, 6 Gray (Mass.) 564 ; V. McGregor, 31 Kans. 329 ; Winters v. Foley v. Rose, 123 Mass. 557 ; Cullum Bank, 33 Ohio St. 250. v. Erwin, 4 Ala. 452 ; Knight v. Ray, 75 203 MORTGAGES OF REAL PROPERTY. [§ 294. But this doctrine has been rejected in this State/ and in many oth- ers." In making the assignment it is competent for the assignor, with the assent of the assignee, to award such priority as he may see fit to each of the.notes;' and, if there is no special agreement, the court will nevertheless award such priority as under the special circum- stances of the case will be found to be in accord with the intention of the parties, either as actually expressed or as derived from the nat- ural equity of the situation." Thus, if one of several notes so secured is assigned by the mortgagee upon a representation that it is a first Hen, such representation will make it so as against the assignor.^ In the absence of agreement or of special circumstances, showing a contrary intention, or creating a different equity, the assignee of a fractional part of a debt secured by mortgage, will tskej)ro rata with the holders of the other parts where the proceeds of the property are not suflBeient to pay all.° The circumstance that the assignor has or has not guaranteed the payment of a note does not affect the question of priority of lien, and where one of two notes secured by the same mortgage was assigned in the usual form, and the other was transferred by indorsement, the mortgagee was held entitled to be protected as against the indorsed note to the extent of a^ro rata share in the security.' Where an account for future advances was secured by mortgage, and a note for part of the account was taken and transferred to one person, and the mortgage and account was afterward transferred to another, who was ignorant of the note, each was held entitled to a pro rata share of the proceeds of the mortgaged property.' Where a grantee of an equity of redemption, who was not person- ally obligated for the mortgage debt, paid and took up one of several notes secured by the mortgage, under an agreement with the mortgagee Ala. 383 ; Roberts v. Mansfield, 32 Ga. '' Per Finch, J. , in Granger v. Crouch, 228 ; Whitehead v. Fisher, 64 Tex. 638. 86 N. Y. 494, 498 ; Mechanics' Bank v. ' Granger v. Crouch, 86 N. Y. 494. Bank of Niagara, 9 Wend. 410 ; Stafford '^ Johnson v. Brown, 31 N. H. 405; v. Van Rensselaer, 9 Cow. 316 ; Vreden- Moore v. Ware, 38 Me. 496 ; Hancock's bergh v. Burnet, 31 N. J. Eq. 229 ; Grat- Appeal, 34 Pa. St. 155 ; Swartz v. List, tan v. Wiggins, 23 Cal. 16. 13 Ohio St. 419. ' Vredenbergh v. Burnet, 31 N. J. Eq. ' Ellis' Adm'r v. Lamine, 42 Mo. 153 ; 229. Bank of England v. Tarleton, 23 Miss. ° McLean & Jackson's Appeal, 103 Pa. 173 ; Grattan v. Wiggins, 23 Cal. 16 ; St. 255 ; Patrick's Appeal, 105 Pa. St. Noyes v. White, 9 Kans. 640 ; Solberg v. 356. Wright, 33 Minn. 224 ; Walker v. De- ' English v. Carvey, 25 Mich. 178. ment, 42 111. 272. " Adger v. Pringle, 11 S. Car. 527. § 295. J PEiOEiTiES. 203 that he might hold them in the same manner that the mortgagee had held them, it was held that he was entitled to the same priority of lifen that a stranger would have who took an assignment thereof.' § 295. Priority awarded to defeat fraud. ^ — The priorities of suc- cessive mortgage liens are sometimes controlled to promote justice and prevent fraud. Thus, where the parties to a mortgage agreed that a new mortgage should be executed to cure a defect in the title, and on the same day that the new mortgage was given, but prior thereto, a mortgage was fraudulently given by the mortgagor to his father-in-law, which was first recorded, it was held that the latter security must give way to the other lien.° So, where a trustee unlaw- fully invested trust funds in a mortgage upon lands upon which he held a mortgage of older date, it was adjudged that equity would give priority to the second mortgage over the first, even in the hands of an assignee having notice of the facts.' Where two mortgages were made to a vendor of land at the time of the delivery of the deed, and were both recorded at the same minute, one being for $1,000, payable in five years, and containing a recital that it was given for purchase money, and the other being for $2,000, payable in ten years, and not containing any such recital; and the mortgagee sold the $1,000 mortgage to a person to whom he represented that it was a first mortgage, and that he had purposely made it so, so that he could sell it, it was held that such repre- sentations gave priority to the $1,000 mortgage, and that it retained such priority against a subsequent lona fide purchaser of the $2,000 mortgage.* If a mortgagee of land represents to a third person that the debt, which his mortgage was given to secure, is paid or satisfied, and that nothing is due on the mortgage, and such person, by reason of that representation, relinquishes rights and takes a mortgage on the land, his mortgage will be prior to the first, though that was on record when the representation was made.' The owner of a second mortgage who stands by in silence while the mortgagor induces the first mortgagee to release his lien, and to accept a third mortgage, in reliance upon a false statement that it is 1 Morrow v. U. S. Mortgage Co., 96 ' Shuey v. Latta, 90 Ind. 136. Ind. 21. *Lane v. Nickerson, 17 Hun, 148. ' Eggeman v. Harrow, 37 Mich. 436 ; ' Piatt v. Squire, 53 Mass. (12 Mete.) Waldo V. Richmond, 40 Mich. 380. 494. 204 MORTGAGES OF BEAL PROPERTY. [§§ 296-297. next to the one released, will be postponed to the mortgagee attempted to be defrauded.' § 296. Agreements for priority where there are intermediate liens. — Where the holder of a first lien agrees to surrender his prior- ity to the holder of a third, the effect of such an agreement is, not to give the last lien a preference over the intermediate lien or to give it an interest in the first one. If the first lien is satisfied and paid, the demands of the stipulation are fully met, and the owner of the last lien has all his rights secured to him by permitting him to proceed against the property, and he can have no interest in the money paid by the mortgagor or owner of the premises. If, in such a case, foreclosure and sale should be necessary, and the proceeds of such sale should be insufficient to pay all of the liens, so much of such proceeds as would otherwise be applicable upon the first hen must be applied to the last as will be necessary to satisfy it.' In Sayre v. Hewes (32 W. J. Eq. 662), the complainant was a judg- ment creditor with an execution hen junior to two prior chattel mort- gages. The first chattel mortgage was filed in the wrong county, and the fihng was therefore not available ; the second chattel mortgage was filed in the proper county, but the second mortgagee had actual notice of the first lien and therefore took subject to it. The execu- tion lien was prior to the first mortgage because it had not been properly filed, and it was adjudged that since the execution creditor could not be advanced before the first without advancing him also be- fore the second, his Ken must of necessity be advanced to the first place as against both the first and second incumbrances. § 297. Assignees bound by equities controlling priority. — The principle is fully settled that an assignee of a mortgage must take it subject to the equities attending the original transaction. If the mortgagee cannot enforce it, then the assignee has no greater rights. The true test is to inquire, what can the mortgagee do by way of enforcement of it against the property mortgaged ; and what he can do, the assignee can do, and no more. As a purchaser of a chose in action, he must always abide the case of the person from whom he buys, and he stands entirely in the place of the latter." Where the ' Stafford v. Ballou, 17 Vt. 329. ' Per Miller, J., in Crane v. Turner, ^ Taylor v. Wing, 84 N. Y. 471, rev'g 67 N. Y. 437, 440 ; Trustees of Union 23 Hun, 233. See also Hinchman v. College v. Wheeler, 61 N. Y. 88 ; Greene Stiles, 9 N. J. Eq. (i Stock.) 361. v. Warnick, 64 N. Y. 220. § 297.] PEI0EITIE8. 205 assignor of a mortgage has knowledge of facts that will affect its priority with respect to other liens on the property, the assignee will be charged by and affected with such knowledge, even though he has no actual notice.' An agreement between a mortgagee and the holder of a prior judg- ment giving the mortgage priority, affects and attaches itself to the securities whoever thereafter owns them, and this without any record of such agreement or memorandum made of it on the docket of the judgment. A purchaser at an execution sale under such judgment would get no better title than the judgment actually gave him, and that would be a title subject to the mortgage. The docket of a judg- ment is not for the protection of purchasers under the judgment. It is for the benefit of the judgment creditor and the protection of pur- chasers from the judgment debtor.'' It has been doubted whether an assignee of a mortgage is charged with knowledge of an agreement for priority executed after the in- ception of the mortgage,' but he has been held bound by the estoppel of his assignor in dealing with another security of equal date and record by reason of which priority was awarded to it." ' Crane v. Turner, 67 N. Y. 437, affi'g ' Bank for Savings v. Frank, 56 How. 7 Hun, 357; Simsv. Hammond, 33 Iowa, 403, afB'd45 N. Y. Super. (13 J. & S.)404. 368; Mason V. Ainsworth, 58 111. 163. *Lane v. Nickerson, 17 Hun, 148. ^ Frost V. Yonkers Savings Bank, 70 And see Frost v. Yonkers Savings Bank N Y. 553, 560, rev'g 8 Hun, 26. sutra CHAPTEE X. ASSIGNMENT OP MOETGAaES, J 298. How an assignment of a. mort- gage can be made. 299. Assignment by one of several mortgagees. 300. Assignment of debt carries with it the mortgage lien. 301. Several notes secured by the same mortgage. 302. In strictness the lien not trans- ferable apart from the debt. 303. Where there is no personal lia- bility. 304. Transfer of mortgage construed to assign the debt. 305. The bond should be delivered on assignment. 306. Presumption is against a parol assignment. 307. Noting assignment on margin of record. 308. Transfer of negotiable note se- cured by mortgage. 309. Lien controlled by recording acts, though to secure negotiable pa- per. 310. Assignee of mortgage takes sub- ject to equities of debtor. 311. Where the question is as to valid- ity of the debt. 312. Distinction between latent equi- ties atjd equities of the obligor. 313. Equities of third persons claim- ing rights in the property. 314. A review of some of the cases. 315. Curious questions will be pre- sented. 3 316. Equities of third persons claim- ing rights in the mortgage. 317. The following cases will illus- trate. 318. A similar question. 319. These principles had been ap- plied. 320. In First National Bank of Corry V. Stiles. 321. When real or personal property is obtained from one by fraud. 322. Limitations of last-mentioned rule. 323. Rules for determining what equi- ties are destroyed by assign- ment. 324. When mortgagor will be estopped from defending against assignee. 325. Estoppel a protection to extent only of consideration. 326. Form of statement to create es- toppel. 327. The statement must have been acted upon. 328. The statement must be believed. 329. The statement must be 'fairly ob- tained. 330. An estoppel may also be created by conduct, 331. Estoppel by statements of an agent. 332. Who are bound by such estoppel. 333. What covenants are implied in an assignment of a mortgage. 334. Notice of the assignment of a mortgage should be given to the mortgagor. § 298. How an assignment of a mortgage can be made. — As a mortgage is a mere incident of tlie debt which it is intended to secure,^ it follows that whatever is sufficient to transfer the title to ' Green v. Hart, i Johns. 580 ; Jack- son V. Blodgett, 5 Cow. 202 ; Jackson v. Bronson, ig Johns. 325 ; Wilson v. Troup, 2 Cow, 231 ; Cooper v. Newland, 17 Abb. 342. i § 298.] ASSIGNMENT OF MOETaAGES. 207 the debt will also transfer the interest of the mortgagee in the land.' Upon this principle, since one of several executors or joint creditors can assign a debt, one of them can also assign the security which accompanies the debt." Upon a like principle, the debt being the principal obligation, a guaranty of its payment will generally pass with an assignment of the debt as a security collateral thereto, and a formal assignment of the guaranty will not be necessary to vest the same in the assignee of the bond ;' but this wiU not apply unless the covenant of guaranty is such that it can properly be assigned.* An assignment of a mortgage and of the debt secured by it may be by parol,° and no seal is required on an assignment of a bond and mortgage." An assignment executed in blank is valid, the person to whom it is delivered being authorized by the mortgagee to fill in the name of a mortgagee, and a purchaser, acting in good faith, wiU be protected, though the authority of the agent is to do nothing but deliver the assignment.' A mortgagee does not lose his interest in the mortgage by assigning it as collateral security for a debt, even though he stipulates in the assignment that he is to forfeit all such interest if he fails to pay the debt on a specified day.' And he retains such interest if he takes the note of the assignee for the balance due him, payable when the mort- gage is collected.' A mortgage given to indemnify the mortgagee against a contingent liability, is assignable.'" A foreign executor or administrator may make a valid assignment of a mortgage on lands in this State without qualifying under our laws." ' Wyman v. Smead, 31 How. i ; Lang- ^ McLaren v. Watson's Ex'rs, 26 Wend, don V. Buel, 9 Wend. 80 ; Jackson v. 425 ; Craig v. Parkis, 40 N. Y. 181 ; Blodgett, 5 Cow. 202 ; Parmelee v. Claflin v. Ostrom, 54 N. Y. 581 ; Cady Dann, 23 Barb. 461 ; Pattison v. Hull, v. Sheldon, 38 Barb. 103. 9 Cow. 747 ; Lawrence v. Knap, i Root * Smith v. Starr, 4 Hun, 123. (Conn.) 248 ; i Am. Dec. 42 ; Fassett v. ^ Kiff v. Weaver, 94 N. C. 274. Mulock, 5 Cal. 466 ; Johnson v. John- ° Roder v. Ervin, i Montana, 632. son, 81 Mo. 331 ; Adair v. Adair, 78 ' Phelps v. Sullivan, 140 Mass. 36 ; Mo. 630 ; Pickett v.- Jones, 63 Mo. 195 ; White v. Duggan, Id. 18. Savings Bank v. Grewe, 84 Mo. 477 ; ' Hughes v. Johnson, 38 Ark. 285. Ford V. Stuart, 15 Neb. 92. " Fithian v. Corwin, 17 Ohio St. 118. ^ Bogert v. Hertell, 4 Hill, 492 ; s. c. '" Carper v. Munger, 62 Ind. 481. 9 Paige, 52; 3 Edw. Ch. 20; Everit v. " Peterson v. Chemical Bank, 29 How. Strong, 5 Hill, 163. 240 : s. c. 32 N. Y. 21 ; Smith v. Tif- 208 MORTGAGES OF EEAL PEOPEETY. [§§ 299-300. § 299. Assignment by one of several mortgagees. — Where a mortgage is made to a copartnership firm composed of several per- sons, it may be assigned by any one of them.' So, a mortgage made to two or more persons to secure a debt payable to them jointly, may be assigned by either of them on behalf of both." It is well settled that if a man appoints several executors, they are esteemed in law as but one person representing the testator, and that acts done by any one of them which relate to the delivery, gift, sale, or release of the testator's goods, are deemed the acts of all.' Accord- ingly, an assignment of a mortgage by one of several executors will be valid and effectual.'' The rule which permits one of several executors to transfer a debt due to the estate which he represents, does not apply in the case of several trustees who are not executors. Thus, a mortgage made to certain persons as trustees of an association not incorporated, can be transferred only by an assignment executed by all of the trustees." § 300. Assignment of debt carries with it the mortgage lien. — In the absence of an express agreement to the contrary, an assign- ment of a note or other evidence of debt secured by mortgage, how- ever informally made, will carry with it the mortgage lien." The assignee of the debt secured by mortgage is entitled to the benefit of the security, though he did not know of its existence at the time of the assignment.' fany, i6 Hun, 552. Contra, Cutter v. Green v. Hart, i Johns. 590 ; Evertson Davenport, 18 Mass. (i Pick.) 81. v. Booth, 19 Johns. 491 ; Ford v. Stuart, ' Everit v. Strong, 5 Hill, 163, affi'd 19 Johns. 342 ; Briggsv. Dorr, 19 Johns. 7 Hill, 585 ; Bogart v. Hertell, 4 Id. 492 ; 95 ; Pattison v. Hull, 9 Cow. 747 ; Bar- s. c. 9 Paige, 52. clay v. Blodgett, 5 Cow. 202 ; Langdon ' Bruce V. Bonney, 12 Gray (Mass.) v. Buel, 9 Wend. 80 ; Holmes v. French, 107. 70 Me. 341 ; Whittemore v. Gibbs, 24 2 Bac. Abr. Executors and Adminis- N. H. 484 ; Keyes v. Wood, 2i Vt. 331 ; trators D. and cases cited. Roberts v. Halstead, 9 Pa. St. 32 ; 49 * Bogart V. Hertell, 4 Hill, 492 ; Am. Dec. 541 ; Jerry v. Woods, 6 Sm. Wheeler v. Wheeler, 9 Cowen, 34 ; Mur- & Marsh (Miss.) 139 ; 45 Am. Dec. 274 ; ray v. Blatchford, i Wend. 583 ; Doug- Johnson v. Johnson, 81 Mo. 331. Where las V. Satterlee, 11 Johns. 16 ; Ex parte deeds of trust, are used instead of mort- Rigby, 19 Ves. 462. gages, the same principle applies, and ' Chapin v. First Universalist Church, the lien passes by an assignment of the 8 Gray, 580; Austin v. Shaw, 10 Allen, debt. Stiger v. Bent, iii 111. 328. An 552 ; Webster v. Vandeventer, 6 Gray, equitable assignment of the note has the 428. same effect to transfer the security. ° Parmelee v. Dann, 23 Barb. 461 ; Sedgwick v. Johnson, 107 111. 385. Neilson v. Blight, i Johns. Cas. 205 ; ' Betz v. Heebner, i Penna. 280. § 301.J ASSIGNMENT OF MORTGAGES. 209 An assignment of a judgment for a debt carries tlie debt, and if the debt is secured by a mortgage it carries also the mortgage interest. So, if the assignment be of only a part of the judgment, a propor- tionate interest in the mortgage passes.' An assignment by a member of a copartnership of " all debts due to the firm," carries a mortgage given to secure a firm debt.^ The assignee of a debt secured by a reservation in the deed of the vendor, may enforce such lien without any formal transfer of it.° A mortgage of indemnity given to a surety does not pass with a transfer of the debt, and the surety can release the mortgage ; although, if unreleased, it would have inured to the benefit of the creditor and of his assignee.* § 301. Several notes secured by the same mortgage. — Where a mortgage is given to secure payment of several notes or demands, it is an incumbrance upon the land for the security of all and each of the notes in whose hands soever they may legally be until all are paid." An assignment of one of the notes or claims so secured will transfer a proportionate part of the Uen,° unless an agreement is made to the contrary, which agreement will. then control.' So, an assign- ment of part of the notes secured by a mortgage, accompanied by an assignment of the mortgage itseK, and of all the mortgagor's right to the premises conveyed thereby, does not extinguish his interest in the mortgage for one of the notes retained by him and subsequently assigned to another." Where a note and a mortgage to seciu'e it were made and the mort- gage was duly recorded, and the note was indorsed and transferred by the mortgagee, who thereafter also sold another note of simOar tenor to a person without notice, giving him also an assignment of the mortgage, it was held that the holder of the first note had the better title to the security." If a mortgage is given to secure negotiable promissory notes, and the notes are transferred, the mortgagee and all persons claiming ' Pattison v. Hull, g Cow. 747 ; Way- 631 ; Stanley v. Beatty, 4 Ind. 134 ; man v. Cochrane, 35 111. 152. Sample v. Rowe, 24 Ind. 208 ; Phelan ^ Du Bois' Appeal, 38 Penna. St. 231. v. Olney, 6 Cal. 478 ;, Belding v. Manly, ' Lindsey v. Bates, 42 Miss. 397. 21 Vt. 550 ; Smith v. Stevens, 49 Conn. *Jonesv.QuinnipackBank,29Conn.25. 181. 5 Johnson v. Brown, 31 N. H. 405. ' Rolston v. Brockway, 23 Wis. 407. « Gould V. Marsh, i Hun, 566 ; 4 T. & 'Page v. Pierce, 26 N. H. 317. C. 128 ; Henderson v. Herrod, 18 Miss. " Morris v. Bacon, 123 Mass. 58, 14 210 MOET&AGES OP REAL PKOPEETY, [§ 302. under Mm will hold the mortgaged property in trust for the holders of the notes,' although such holders did not know of the mortgage.' So, where several debts secured by one mortgage have become the property of different persons, and the assignee of the mortgage has foreclosed and has thereby acquired legal title to the property, he holds it with its rents and profits in trust for the holders of the debts, according to their respective amounts.' § 303. In strictness the lien not transferable apart from the debt. — A mortgage is not considered a conveyance of land within the statute of frauds, and it may be assigned by parol.* The assign- ment must, however, be of the bond or evidence of debt as weU as of the mortgage, since the transfer of the mortgage without the debt is a nullity, and no interest is acquired by it. The security cannot be separated from the debt and exist independently of it ;° and it is a legal maxim that the incident shall pass by the grant of the principal, but not the principal by the grant of the iacident." If, therefore, the wife of a mortgagor is also the owner of the mortgage, the mort- gage will not be assigned to a purchaser by a conveyance in which she joins, nor will her lien be inferior to a subsequent mortgage in which she joins in order to bar her inchoate right of dower ;' and the same rule will apply where one of several joint owners of prop- erty holds a mortgage upon it, and joins in a deed of all his estate, title, and interest.' The pght of a mortgagee to hold the mortgaged premises as secu- rity for his debt does not pass by a conveyance of " all his lands, tene- ments, and hereditaments." ° In Wrniser v. Gary (T6 JST. T. 526, affi'g s. c. 12 Hun, 403), a bond and mortgage was executed by a wife as collateral security for her ' Jordan v. Cheney, 74 Me. 35g. mar v. Bill, 5 Johns. Ch. 570 ; Cooper v. ' Keyes v. Wood, 21 Vt. 331 ; Roberts Newland, 17 Abb. 342. ■V. Halstead, 9 Penna. St. 32 ; 49 Am. * Merritt v. Bartholick, 36 N. Y. 44 ; Dec. 541. s. c. 47 Barb. 253; Carpenter v. O'Dough- ' Johnson v. Candage, 31 Me. 28. erty, 67 Barb. 397. ' Allerton v. Lang, 10 Bosw. 362 ; Be- ' Power v. Lester, 23 N. Y. 527 ; s. c. .dell V. Carll, 33 N. Y. 581 ; Westerlo v. 17 How. 413 ; Gillig v. Maas, 28 N. Y. DeWitt, 36 N. Y. 340; Mack v. Mack, igijVan Amburgh v. Lester,i6Hun,205. 3 Hun, 323 ; s. c. 5 N. Y. Sup. (T. & C.) ' Aymar v. Bill, 5 Johns. Ch. 570 ; Pur- 528 ; Wilson v. Kimball, 27 N. H. 300; dy v. Huntington, 42 N. Y. 334; see, Pease v. Warren, 29 Mich. 9 ; Runyan centra, Williams v. Thorn, 11 Paige, 459; 'V. Mersereau, 11 Johns. 534 ; 6 Am. Dec. Swan v. Yople, 35 Iowa, 248. 393- ' Mack v. Wetzlar, 39 Cal. 247, 254 ; 'Jackson v. Willard, 4 Johns. 41 ; Ay- Sims v. Hammond, 33 Iowa, 368. §§303-304.] ASSIGNMENT OF MORTGAGES. 211 husband's debt. The mortgagee assigned the bond and mortgage to bona fide purchasers, and afterward received the debt due him from the husband, and promised to discharge the mortgage. In an action to foreclose the mortgage, it was held that the assignment of the bond and mortgage was an assignment of a mere security, while the prin- cipal debt remained untransferred, and that it was inoperative. The debt of the husband being cancelled, the mortgage was not supported by any consideration. A different rule would have been applied if the bond and mortgage had been given not as security for, but in pay- ment of, the husband's debt. § 303. Rule where there is no personal liability. — The rule that the mortgagee's interest in the land is not capable of being as- signed by itself, must be qualified so as to include only cases where there is a mortgage debt, for a mortgage hen may exist without any personal obhgation. It is provided by statute that " no mortgage shall be construed as implying a covenant for the payment of the sum intended to be secured ; and where there shall be no express covenant for such payment contained in the mortgage, and no bond or other separate instrument to secure such payment shall have been given, the remedies of the mortgagee shall be confined to the lands mentioned in the mortgage." ' The assignment of a mortgage given without a bond or other extrinsic evidence of debt, and containing no express covenant to pay, transfers to the assignee all of the mortgagee's claim under the mortgage ; that is to say, his remedy against the land.' And while an assignment of the mortgage without the debt is inoperative at law, it wiU be protected in equity in order to carry out the mani- fest intention of the parties.' § 304. Transfer of mortgage construed to assign the debt. — Although an assignment of a mortgage apart from the bond is not availing, still where a contract is made for an assignment of the mort- gage, the court may infer an obligation to assign the bond also,* and a power of attorney authorizing the assignment of mortgages, impUedly includes the assignment of bonds accompanying the mortgages.' So, an assignment of a mortgagee's interest in the mortgaged premises' ' I R. S. 738, § 139. Van Rensselaer, 44 How. 368 ; Carpen- ' Hone V. Fisher, 2 Barb. Ch. 560 ; ter v. O'Dougherty, 67 Barb. 397. Severance v. Griffith, 2 Lans. 38 ; Caryl ' Raynor v. Raynor, 21 Hun, 36. V. Williams, 7 Lans. 416; Coleman v. * Foster v. Van Reed, 70 N. Y. 19. ' Feldman v. Beier, 78 N. Y. 293. 212 MOKTGAGES OK KEA.L PEOPEETY. [§§305-306. lias been held to carry with it the right to receive payment of notes secured by the mortgage.' And a deed of conveyance of the mort- gaged property executed by the mortgagee, duly executed and re- corded, has been awarded priority over a prior unrecorded assignment of the debt and mortgage.' If a mortgage is assigned without any express mention of the debt, it would nevertheless be presumed to be the intention of the parties to transfer the debt as well, if it has not already been assigned to another person.' "Where land is mortgaged by an absolute deed with a secret defeas- ance, an absolute conveyance of the premises by the mortgagee to a third person amounts to an assignment of the mortgage.* And where the mortgagee has made an effort to foreclose his mort- gage, which, by reason of irregularities in his proceedings, is not suffi- cient to cut off all of the persons having rights in the equity of re- demption, the purchaser acquires by virtue of such proceedings, and as against all of the persons not cut off, aU of the rights of an as- signee of the mortgage and of the debt secured by it.' § 305. The bond should be delivered on assignment. — Since the transfer of the debt carries with it the mortgage, it is quite im- portant for the purchaser of the mortgage to require the production and delivery of the bond where there is one. If he neglects to do so, he is said to be chargeable with negligence fatal to his right to recover upon the mortgage as against a prior purchaser who had acquired possession of the written evidence of the debt, and in this respect he is not protected by the recording act." § 306. Presumption is against a parol assignment. — ^While a mortgage, and the debt which it secures, may be assigned by delivery, the possession of a bond and mortgage, coupled with proof of an advance of money, is not in itself sufficient to establish a transfer, either absolute or conditional. In England, a very common mode of ' King V. Harrington, 2 Ailcens (S. C.) istown, i8 Pa. St. 394 ; Fletcher v. Car- 33 ; 16 Am. Dec. 675. penter, 37 Mich. 412. ' Welch V. Priest, go Mass. (8 Allen) * Halsey v. Martin, 22 Cal. 645. 165. ' Hart V. Wandle, 50 N. Y. 381 ; Rob- ' Cooper V. Newland, 17 Abb. 342; inson v. Ryan, 25 Id. 320 ; Benedict v. Merritt v. Bartholick, 36 N. Y. 44 ; s. c. Oilman, 4 Paige, 58. •47 Barb. 253 ; Ross v. Terry, 63 N. Y. "Kellogg v. Smith, 26 N. Y. 18; Clark 613; Northampton Bank v. Balliet, 8W. v. Iglestrom, 51 How. 407; see Bergen & S. (Pa.) 311 ; Phillips v. Bank of Lew- v. Urbahn, 83 N. Y. 49. § 307.] ASSIGNMENT OF MOETGAGES. 213 securing a loan of nioney is by depositing the title deeds of the bor- rower with the lender for that purpose, and such deposit constitutes a valid hen in equity ; but here mortgages are very rarely transferred by an agreement and dehvery without writing, and, in the absence of written evidence, there is a presumption against any transfer." There must be an intention so to transfer accompanying the dehvery. Where there is an intention to have a written assignment, a mere manual delivery does not pass title," and the written paper must not only be executed, but it must also be delivered." A transfer has, however, been inferred where a bond and mortgage were found among the papers of the deceased wife of the mortgagor, who was the daughter of the mortgagee, also deceased. Parol proof was also furnished of declarations on the part of the mortgagee of an intention to give the mortgage to his daughter.* § 307. Noting assignment on margin of record. — It is desir- able that the assignment of a mortgage should contain a description sufficiently definite to identify what is intended to be transferred. If possible, the time and place of the record of the mortgage should be set out, so as to enable the clerk to make a memorandum of the assignment on its margin. An omission of these precautions may operate to create great confusion if not forfeiture of rights. In Moore v. Slocm (50 Barb. 442),' assignments of mortgages were put upon record, which described the mortgages only by the names of the parties to them and their amounts ; no memoranda of the as- signments were msi.de on the margins of the original mortgages, and no acttoal notice was given to the prior mortgagees, and the assignees were held foreclosed by sales in actions to which they were not parties, and of which they had no notice. So, also, in Yiele.Y. Judsonil^ Hun, 328),° an assignment with an indefinite description was recorded at the time of recording the mortgage ; the assignment was not noted on the margin of the mortgage, and the clerk thereafter received a certificate of satisfaction executed by the mortgagee, and discharged the mortgage of record. The assignee of the mortgage knowing of its discharge took no steps to restore it, and he was held by the General Term to forfeit his priority of lien in favor of a junior in- ' Bowers v. Johnson, 49 N. Y. 432. ' Overruled in Viele v. Judson, 82 N. ' Strause v. Josephthal, 77 N. Y. 622. Y. 38. ' Rose V. Kimball, i5 N. J. Eq. 185. * Reversed in Viele v. Judson, 82 N. Y. * Hackney v. Vrooman, 62 Barb. 650. 32. 214 MOETaAGES OP BEAL PROPEKTT. ■ [§ 308. cumbrance in good faith. This latter decision was reversed by the Court of Appeals, and in doing so the ruling in Moore v. Slocm (supra) was also distinctly and by name overruled. In doing so, Finch, J., remarked : " It is claimed, however, that the assignment to Viele was so imperfect that the clerk could not note it on the record of the mortgage, and, therefore, it was not constructive notice. The assignment contained the name of the assignor, and of the maker of the mortgage, the date of the same, and a covenant of the amount due. Unless, which is not pretended, there was some other mortgage of Decker bearing the same date, there was no uncertainty or am- biguity. It was entirely possible for the clerk to find this mortgage on his records, and be sure it was the one referred to. No rule com- pels a statement of the place of record or a description of the lands to make it the duty of the clerk to record. He did do so in fact. That he did not note the assignment in the margin of the record is of no consequence. He might have done so if he had pleased. We have ■been referred to no statute making it the duty of the clerk to thus note the record of an assignment in the margin of the mortgage. It is purely a matter of convenience. Whether done or not, in no manner affects the rights of the assignee. For his protection the law only required his assignment to be recorded. It did not impose the additional condition of a note on the record." ' § 308. Transfer of negotiable note secured by mortgage. — Keasons of pubhc policy have created and sustained the rule that a honafide purchaser of commercial paper before maturity will be pro- tected against defenses and equities existing between the original parties. We have already seen that where a negotiable note is se- cured by mortgage the transferee acquires a title to the security, though it be not named, and even though he had no knowledge of it. In such cases it has been attempted to inquire into the considera- tion of the debt where the security is sought to be enforced, and in some States this is permitted to be done.' In this, as in a majority of the States, however, a purchaser of a note who is permitted to enforce the debt which it represents, is held entitled to the lien by which it is secured, and no defense is permitted against the security which does not operate to defeat the debt.° It is ^ Viele V. Judson, 82 N. Y. 32. mings, 31 111. 188 ; Baily v. Smith, 14 " Towner v, McClelland, i lo 111. 542 ; Ohio St. 396 ; Corbett v. Woodward Bryant v. Vix, 83 111. 11 ; White v. (Oregon), 11 Chicago L. N. 246. Southerland, 64 111. 181 ; Olds v. Cum- » Gould v. Marsh, 4 N. Y. Sup. (T. & § 309. J ASSIGNMENT OF MORTGAGES. 215 not material as to wlietlier the debtor is or is not also tlie owner of the mortgaged property, since by creating a lien to secure commercial paper he binds his land by all rules giving such obhgations, and a wife of the mortgagor is bound by the lien by executing the mortgage, though not a party to the notes.' Where notes secured by mortgage are indorsed and transferred before maturity, it is no defense to a foreclosure brought by the hold- ers of such notes to show that payment was thereafter made to the mortgagee.'' Tf negotiable notes or drafts secured by mortgage are transferred after maturity,' or for a past consideration,* or to a person having notice of the facts,' they are open to all defenses in like manner as they would be if not accompanied by any security. A purchaser of a negotiable note before maturity, secured by a mortgage of a woman who did not sign the note, will not be pro- tected if it can be shown that her signature to the mortgage was ob- tained by duress." § 309. Lien controlled by recording acts, though to secure negotiable paper. — The rule which protects commercial paper se- cured by mortgage is controlled by the recording acts to the extent to which they may be apphcable, and where a mortgage which secures a negotiable note has been released of record, it loses its negotiable character to the extent that any third person who may purchase the property in good faith will obtain the full, complete, and absolute title thereto, freed from all equities, liens, interests, trusts, or incum- C.) 128 ; s. c. I Hun, 566 ; Reese v. igg ; Beals v. Neddo, 10 Cen. L. J. 187 ; Scully, Walker Ch. R. 248 ; Carpenter i McCrary, U. S. C, 206 ; Burhans v. V. Longan, 16 Wall. (83 U. S.t 271 ; Hutcheson, 25 Kans. 625 ; Lewis v. Kenicott v. Supervisors, Id. 452 ; Saw- Kirk, 26 Alb. L. J. 328 ; 28 Kans. 497. yer v. Pritchett, 19 Wall. (86 U. S.) 147 ; ' Gabbert v. Schwartz, 69 Ind. 450. Taylor v. Page, 6 Allen, 86 ; Croft v. ^ Mead v. Leavitt, 59 N. H. 476 ; Blu- Bunster, 9 Wis. 503, 510 ; Kelley v. menthal V. Jassoy, 29 Minn. 177 ; Car- Whitney, 45 Wis. no ; Paige v. Chap- penter v. Longan, 16 Wall. 271 ; Button man, 58 N. H. 333 ; s. c. 21 Alb. L. J. v. Ives, 5 Mich. 515 ; Croft v. Bunster, 518, and cases cited ; Bassett v. Daniels, 9 Wis. 503. 136 Mass. 547 ; Dutton v. Ives, 5 Mich. * Howard v. Gresham, 15 Ga. 347 ; 515 ; Helmer v. Krolick, 36 Mich. 371 ; Fish v. French, 15 Gray (Mass.) 520. Webb V. Haselton, 4 Neb. 308 ; 19 Am. * Glidden v. Hunt, 24 Pick. (Mass.) R. 638 ; Mundy v. Whittemore, 15 Neb. 221. 647 ; Reeves v. Hayes, 95 Ind. 521 ; * Burbank v. Warwick, 52 Iowa, 493. Gabbert V. Schwartz, 6g Ind. 450; Bayles "Bank, etc., v. Bryan^ 62 Iowa, 42 ; v. Glenn, 72 Ind. 5 ; Logan v. Smith, 62 'Burbank v. Warwick, 52 Id. 493 ; Tabor Mo. 455 ; Vandercook v. Baker, 48 Iowa, v. Foy, 56 Id. 539. 216 MORTGAGES OF REAL PROPERTY. , [§ 310. brances existing in favor of any holder of the note or mortgage, whether the note is satisfied or not.' So, where there has been a re- corded assignment of the mortgage a subsequent transferee of the note will not be entitled to the benefit of the lien.' § 310. Assignee of mortgage takes subject to equities of debtor. — ^Where a negotiable note is secured by a mortgage, a hona fids assignee, before maturity, takes it free from any equities between the original parties ;' but a bond, whether secured by mortgage or not, and whether it be in the hands of the obligee or of his assignee, carries with it no conclusive presumption of validity. It is a mere chose in action ; the obligor may impeach its consideration or estab- lish any other valid defense against it while it remains in the hands of the obligee, and, as a general rule, his rights in this respect cannot be changed by a transfer of the rights of the obligee to a third person. In the transmission of property of any kind from one person to ail- other, the former owner can, in reason, only transfer what he himself has to part with, and the other can only take what is thus transferred to him. The cases in which, from motives of public policy, to pro- mote the currency of certain securities, to prevent fraud, or to aid the vigilant against the careless, the party to whom the transfer is made is allowed to claim a greater interest than was possessed by the other, are exceptional, and no general rule protects the assignees of bonds secured by mortgages from the defects in the titles of their assignors. The rule as generally stated is, that the purchaser takes only the interest which his assignee had to part with ; or, as was ex- pressed by Lord Thdelow : " A purchaser of a chose in action must always abide by the case of a person from whom he buys." " This (he said) I take to be the general rule." * In other words, as the doc- trine is more commonly expressed, the assignee of a chose in action takes it subject to the same equities to which it was subject in the hands of the assignor. 'If these equities are understood to mean only the equities residing in the original obligor or debtor, the au- ' Lewis V. Kirk, 26 Alb. L. J. 328 ; 28 Scully, Walker Ch. R. 248 ; Carpenter v. Kans. 497 ; Conroy v. Fuller, 30 Iowa, Longan, 16 Wall. (U. S.) 271 ; Kenicott 211 ; Swartz's Ex'rs v. List, 13 Ohio St. v. Supervisors, Id. 452 ; Taylor v. Page, 4ig. 6 Allen, 86 ; Croft v. Bunster, 9 Wis. '' Morris v. Bacon, 123 Mass. 58. 510 ; Paige v. Chapman, 58 N. H. 333 ; 'Gould V. Marsh, 4 N. Y. Sup. (T. & s. c. 21 Alb. L. J. 518, and cases cited. C) 128 ; s. c, I Hun, 566 ; Reese v. * Davies v. Austin, I Ves. 247. § 311.J ASSiaNMENT OP MORTGAGES. 217 thorities will be found to be numerous and uniform in favor of the proposition.' An assignee's claim will be subordinate to a parol agreement be- tween the mortgagor and mortgagee, after the making of the mort- gage, by which the amount secured by the mortgage was reduced ' or discharged." § 311. Where the question is as to validity of the debt. — It would seem to be settled that where the question is as to whether the debt exists, all defenses are as available against the assignee as they were against the original party to the instrument. If the debt is con- ceded to exist, it at once becomes a piece of property, and the rights of the owner or assignee of a bond must be judged by the same rules which would govern in the case of a horse or of a share of stock." But the owner of the debt cannot, by transferring it, make any difference in the obligation of the debtor ; and when the validity or the amount of the debt is in dispute, whether the debtor or those ' Murray v. Lylburn, 2 Johns. Ch. 441 ; Livingston v. Dean, 2 Johns. Ch. 479 ; James v. Morey, 2 Cow. 246 ; Pendleton V. Fay, 2 Paige, 202 ; Evertson v. Ev- ertson, 5 Paige, 644 ; L'Amoureux v. Vandenburgh, 7 Paige, 316 ; Evans v. Ellis, 5 Den. 640 ; Ellis v. Messervie, II Paige, 467 ; Richards v. Warring, i Keyes, 576 ; Bush v. Lathro p ■'•' >J "V- 535 ; Reeves v. Kimball, 40 N. Y. 299 ; Mason v. Lord, 40 N. Y. 476 '; Moore v. Metropolitan National Bank, 55 N. Y. 41 ; Ingraham v. Disborough, 47 N. Y. 421 ; Clute V. Robison, 2 Johns. 5^5 ; Ely V. McNight, 30 How. 97 ; Westfall V. Jones, 23 Barb. 9 ; Mickles v. Town- send, 18 N. Y. 575 ; Bockes v. Hathorn, 20 Hun, 503 ; Davis v. Beckstein, 69 N. Y. 440 ; Tabor v. Fay, 56 Iowa, 539 ; Horstman v. Gerker, 49 Penna. St. 282 ; De Witt v. Van Sickle, 29 N. J. Eq. 209 ; Reddish v. Ritchie, 17 Fla. 867. In Penn- sylvania the rules as to equities on the assignment of mortgages differ from most of the other States. The assignee of a mortgage takes the same subject to all equities between the mortgagor and mortgagee, but not subject to the equi- ties between the mortgagor and a prior assignee of a mortgage. Reineman v. Robb, 98 Penna. St. 474. The assignee of a mortgage is not affected by a collat- eral agreement made between the mort- gagor and mortgagee at the time of the execution of the mortgage, by which it was stipulated that the mortgagee should release the lien from any lots which the mortgagor might sell on receiving a rea- sonable portion of the purchase money. McMasters v. Wilhelm, 85 Penna. St. 218 ; Pryor v. Wood, 31 Id. 142 ; Davis v. Barr, 9 S. & R. 141. And a mortgage debt in the hands of an assignee of the mortgagee is not affected by payments of money made by the mortgagor for the benefit of the mortgagee previous to the assignment, with the understanding that such payments were to be credited on the mortgage debt, unless by indorse- ment or other mode or memorandum of credits, such proportion of the debt was in fact reduced by an application of the sums so paid. Post v. Carmalt, 2 Watts & Serg. 70 ; 37 Am. Dec. 484. * Green v. Fry, 93 N. Y. 353. ' Sumner v. Waugh, 56 111. 531. * Moore v. The Metropolitan National Bank, 55 N. Y. 41. 218 MOKTaAGES OF KEAL PEOPEETT. [§ 312. claiming under him, as grantees,' or judgment creditors," or mechanics' lienors,' or otherwise interested, are on the one side ; or whether the original creditor or his assignee be found on the other side, are ques- tions of no importance. The debt cannot be either created or en- larged by passing it from hand to hand ; and the debtor, or those claiming his rights, may assert them at any time, and as against any person to whom the claims of the creditor may have been transferred. It is a matter of no importance to the debtor as to what the nature of the dealings of the creditor with his debt has been, and unless he has made himself a party to a transfer by his acts or statements, he can defend himself equally well if the transfer be for a valuable consider- ation as if it be for none at all. § 312. Distinction between latent equities and equities of the obligor, — In an early case ' it was said by Chancellor Kent that the rule that the purchaser of a chose in action takes it subject to the same equity it was subject to in the hands of the assignor, was not to be understood to include an equity residing in some third person against the assignor. The assignee can always go to the debtor and ascertain what claims he may have against the bond or other chose in action which he is about purchasing from the obligee ; but he may not be able, with the utmost diligence, to ascertain the latent equity of some third person against the obligee. He has not any object to which he can direct his inquiries, and for this reason it was thought to be equitable that if he became a purchaser for value, without notice of any defect in the title of his assignor, and with no means of ascertaining whether there was any such defect, he ought to be protected. Chancellor Kent gave, as an illusti^tion of a latent equity, a case of the setting up by a third person of a secret equity against the as- signor,° and such an equity would be unquestionably disregarded in favor of a bona fide purchaser without notice." In all such cases, and wherever notice to an assignee is fatal to his claims, a Tjona fide pur- chaser without notice is not prejudiced by notice to his assignor.' ■ Hartley v. Tatham, 24 How. 505. ' Murray v. Lylbum, 2 Johns. Ch. 441. ' Rosevelt v. Bank of Niagara, Hopk. ' Crocker v. Crocker, 31 N. Y. 507. Ch. 579. ' Jackson v. Henry, 10 Johns. 185 ; ' Schafer v. Reilly, 50 N. Y. 61. Jackson v. Van Valkenburgh, 8 Cow. * Murray v. Lyiburn, 2 Johns. Ch. 260 ; Varick v. Briggs, 6 Paige, 323 ; 441 ; Livingston v. Dean, 2 Johns. Ch. Fort v. Burch, 5 Den. 187; ,Busb-'»rfew 479. throp, 22 N. Y. 549. §§313-314.] ASSIGNMEKT OF MORXGAGES. 219 In Bebee v. I'he Bank of New York (1 Johns. 529), Chancellor Kent attempted to sustain the distinction between latent equities and equities of the obligor, and he was overruled. Judges Spencee and Tompkins both disagreeing with him. He afterward reaffirmed the doctrine in Murray v. Lylhv/rn (2 Johns. Ch. 441), and in Living- ston V. Dean (2 Johns. Ch. 479). It is not clearly defined what a latent equity is,' and the phrase could hardly be taken as a safe guide, even if the distinction between patent equities and latent equities could be maintained. In the case of Bush v. Lathrop (22 IST. Y. 535), it was, indeed, determined, after a very elaborate examination of the authorities by Judge Denio, that the distinction had no found- ation in our jurisprudence. § 313. Equities of third persons claiming rights in the property. — Upon general principles, a mortgagor can only charge the estate to the extent of his interest in it, and the mortgagee can transfer only such interest as he receives. The presumption, ' therefore, is that, as between the equities of persons claiming interests in or liens upon lands, the one which is prior in time is also prior in right, and that an assignee of a mortgage stands exactly in the posi- tion of his assignor, whether the rights of that position were known to him at the time of receiving the assignment or not. Those cases in which the assignee of a mortgage acquires a priority over other rights in the estate which was not possessed by his assignor, are ex- ceptions to the general rule, and such priority is derived in most, if not in all cases, from the provisions of the recording acts, or from the equitable doctrine of estoppel. § 314. A review of some of the cases in which such questions have arisen may be useful. In Van Benssdaer v. Stafford (Hopk. 569 ; affi'd on appeal in 9 Cow. 316), one Tan Dusen sold to "W. lands which he had bought of Van Eensselaer, and for which he was partly indebted to V. R., and took from "W". two mortgages of equal date, intending that one should have priority and be assigned to Y. K. for the original purchase money due to him. The mortgages were registered concurrently, but one of them was soon after assigned to Y. R. Afterward Y. D. as- signed the other to Stafford in good faith, for value, without notice of Y. E.'s intended priority. It was held that Stafford stood in the place of Y. D., and held his mortgage subject to all the equity which ' Mickles v. Townsend, i8 N. Y. 580. 220 MOETGAGES OF EEAL PEOPEKTT. [§ 314. Y. R. had against Y. D., and Y. E.'s mortgage was declared to have a priority. In Greene v. Deal (4 Hun, Y03), two bonds and mortgages of the same date were executed upon the same property for the purchase money. It was intended by the parties that they should be equal -as to priority. They were recorded on the same day, but one was re- corded at a later time than the other. After the recording of both of the mortgages, the one which had first been recorded was assigned to a purchaser who paid value, and who had no notice of the agreement that the mortgages should be equal as to priority. The Supreme Court, at General Term (4 Hun, 703), held that the assignee might avail himself of the earlier recording of his mortgage, and that it was a prior lien to the other ; but the Court of Appeals reversed this de- cision, and decided that the assignee of the mortgage was bound by the parol agreement which had been made by his assignor with the owner of the other incumbrance.' Aside from the recording acts, the assignee took his mortgage subject to the equities between his assignor and the other mortgagee ; and there was nothing to estop the other mortgagee from asserting his rights, as he did nothing to induce the assignee to purchase, and did not, by any act or omission, mislead him. The recording act did not affect the rights of the parties, as that only applies to svhsequent incumbrances which are first recorded, and neither mortgage was a subsequent conveyance to the other, both being executed at the same time. The only effect of the recording of an assignment of a mortgage is to protect the assignee against a sub- sequent sale of the mortgage itself, the recording act only applying to successive purchasers from the same sellers." The assignee of the mortgage first recorded was held not to have gained any rights by his assignment as against the owner of the other mortgage, except such as had been possessed by his assignor.' In Ddancey v. Stea/rns (66 N. T. 15Y), B. took a mortgage in pay- ment of an antecedent debt, and without relinquishing any security or giving any new consideration. B. had notice at the time of an un- recorded mortgage on the same premises. Subsequently B. assigned the mortgage for value to R., who had no "notice of the unrecorded mortgage. It was held by the Court of Appeals that E. stood in no better position than B. as to such unrecorded mortgage, and that al- ' Greene v. Warnick, 64 N. Y. 220. " Purdy v. Huntington, 42 N. Y. 334. ' Greene v. Warnick, 64 N. Y. 220. § 314.] ASSIGNMEKT OF MORTGAGES. 221 thougli, on the question of notice, the lona fide assignee of a mort- gage for value may stand in a better position than the mortgagee, he cannot on the question of the consideration of the mortgage, either as between himself and the mortgagor or third persons. In Crane v. Turner (67 N. T. 437), Pierce had executed a mort- gage upon premises of which he had possession under a contract of sale, and, after the receipt of a deed, he conveyed the premises and received from the grantee, who had notice of the prior mortgage, a mortgage for part of the purchase money. Pierce then assigned his mortgage to the defendant Turner, assuring him that it was the first lien. In an action to foreclose the mortgage. Turner claimed that his mortgage was entitled to priority. Both mortgages having been duly recorded, it was held that, as Pierce would be estopped from claiming a priority if he had retained the mortgage, his assignee had no superior right, and was also estopped, and that the recording act did not aid the defendant. In Ba/rik for Sa/oings v. Franh (56 How. 403 ; s. o. 45 N. T. Super. [13 J. & S.] 404), a mortgagee had executed an agreement post- poning the lien of his security to a junior mortgage. He subse- quently sold the mortgage to a person whose attorney, in the course of investigating the title, learned of this agreement, and it was there- fore held binding upon him. In Schafer v. Reilly (50 IS". Y. 61), a mortgage was made without consideration, to be sold by the mortgagee for the benefit of the mortgagor, and it was duly recorded. Subsequent to the record of the mortgage, a mechanic's lien upon the property was perfected. After the perfecting of the mechanic's lien a purchaser of the mort- gage received an assignment of it, and paid a valuable consideration therefor, relying upon a sworn statement of the mortgagor (untrue in fact) that the mortgage was a valid security for the whole amount secured by it, and that the money was advanced by the mortgagee for it. It was held that the mortgage became vahd only because of the estoppel of the mortgagor, and that its lien commenced at that time ; that the holder of the mechanic's lien was not bound or prej- udiced by the acts of the mortgagor subsequent to the time when his rights vested, and that his equities were superior to those of the assignee of the mortgage.' ' See also Trustees of Union College v. Wheeler, 6i N. Y. 88 ; Mullison's Estate, 68 Pa. St. 212. 222 MORTGAGES OF EEAL PKOPEKTY. [§§315-317. It may properly be said that the principles of these cases do not afford encouragement to purchasers of mortgage secm-ities. § 315. Curious questions will be presented in connection with negotiable promissory notes secured by mortgages, as between the indorsees or transferees of such notes, (whose rights were perfected subsequently to the perfecting of a lien upon or a conveyance of the mortgaged premises,) and the lienor or grantee. As against the maker of the note the indorsee will acquire a perfect title free of all de- fenses ;' but it does not at all foUow that if a valid Ken is obtained upon the land before the note comes into the hands of a iona fide purchaser, the holder of the lien may not assert any of the defenses which existed against the note at the time his right accrued, in order to protect his title. § 316. Equities of third persons claiming rights in the mort- gage. — If the validity of the mortgage be conceded, and if there be no question as to its priority of lien, there may still be question as to the title of the mortgagee to it, and of his right to assign it. A debt secured by mortgage is an article of personal property, and an assign- ment of it will, for most purposes, be judged by the same rules which control transfers of other choses in action. If, the mortgagee shall have parted with the title to one person, he cannot thereafter confer a title on another ; " but there are cases where the true owner of a mortgage may, by allowing another person to hold the apparent title,, confer upon him the power of conveying it. § 317. The following cases will illustrate the rules which gov- ern in this class of questions : In CoveU v. The Tradesmen's Sank (1 Paige, 131), CoveU had a sealed note for $2,425 against Hunt, payable to himself ia a year. He borrowed $100 of Mullins, and pledged the note to secure it, in- dorsing his name in blank. M. being indebted to the Tradesmen's Bank in $2,600, and pretending to own the note, transferred it to the bank in payment of $1,000 of that debt, and received the balance of the note in money. He indorsed the note in blank, and dehvered it to the bank. All this was within two months after the sealed note was given. Covell having paid M. iu full, claimed the note of the ' Gould V. Marsh, 4 N. Y. Sup. (T. & Longan, 16 Wall, 271 ; Longan v. Car- C.) 128 ; s. c. I Hun, 566 ; Carpenter v. penter, i Col. J. 205. « KeUogg V. Smith, 26 N. Y. 18. § 318.] ASSIGNMENT OF MORTGAGES. 223 bank, and it was held, tliat having both the prior equity and the legal title, he was entitled to the note. In Poillon v. Ma/rUn (1 Sandf. Oh. 569), Poillon, who was the owner of a mortgage, sold and transferred it to the managing clerk of WiUiams, who was his solicitor and confidential adviser, for worth- less notes of a county bank, being persuaded to make the sale in part by the conduct of "W. A few days after, the first assignment was de- stroyed, and a new one was made by P. to B., for the benefit of W. After this, J. bought the mortgage from W. in good faith, for value paid, without notice, and received an assignment from B. It was held, that the transfers to W.'s clerk and to his friend for his benefit were void, because of the confidential relation between him and P. It was further held, that J. was not protected as against P.'s prior equities, and that he must lose the mortgage which he had innocently purchased. In Sweet v. Van Wyck (3 Barb. Ch. 647), it is said that where a bond and mortgage are assigned as security for debt, a subsequent as- signee takes the same, subject to the right of the original assignor to redeem the securities, upon paying the amount of the loan for which such bond and mortgage was pledged, with interest. It does not ap- pear, in this case, whether the assignee was or was not a iona fide purchaser without notice. In Bush V. Lathrop (22 N. T. 535), a mortgage for $1,400 and in- terest, was assigned as collateral security for $268.20, by an instru- ment absolute upon its face, with a consideration expressed of $268.20. The assignee afterward transferred it for its full value, and the ques- tion was presented as to whether the final assignee could hold the mortgage for its full amount. The authorities were quite fully re- viewed by Denio, J., and it was held, by a divided court, that the holder of the mortgage was bound by the condition for redemption, and that the equity of the assignor was not destroyed by the assign- ment.' § 318. A similar question was, however, presented in Moore v. The MetropoUtcm National Bamk (55 IST. Y. 41 ; 14 Am. E. 173), and the principle in Bush v. J^throp was there repudiated and over- ruled. The distinction between patent and latent equities was not reKed upon, but it was held that where a person has conferred upon another an apparently valid title to a chattel, he ought, equitably, to ' Kamena v. Huelbig, 23 N. J. Eq. 78. 224 MOETGAGES OF REAL PROPERTY. [§ 319. be precluded from asserting his title against a Ixyna fide purcliaBer from such apparent owner upon the faith of the title which he had apparently given. Another reason was that were the rule otherwise, it would afford opportunities for the perpetration of frauds upon the purchasers from such apparent owners. Where one, known to be the owner of chattels, dehvers them to another, together with an absolute written transfer of all his title thereto, he thereby enables him to hold himself out as owner, and as such, obtain credit upon and make sales of the property ; and if, after he had so done, the owner was permit- ted to come in and assert his title against those dealing upon the faith of these appearances, the dishonest might combine and practice the grossest frauds. Another reason is that such a case is a proper one for the application of the legal maxim that, where one of two inno- cent parties must sustain a loss from the fraud of a third, such loss shall tall upon the one, if either, whose act has enabled such fraud to be committed. § 319. These principles had been applied in MoNeU v. The Tenth National Bcmk (46 N. T. 325 ; 7 Am. E. 341), to a case where the transfer was of shares of stock in an incorporated company, and in Moore v. The Metropolitan National Bcmk {supra), they were held to apply with all of their force to choses in action. There is no reason why the owner of a horse or of bank shares, who has given to another a transfer of all his right thereto for some other pur- pose than of passing the title, should be precluded as against a hona fide purchaser from such person, from asserting his title, while, under the same state of facts, he may reclaim from such purchaser a bond and mortgage or .a certificate of indebtedness. As to the former, he is estopped, and as to the latter, the innocent purchaser will also be protected.' A similar principle was declared in DiUaye v. The Commercial Bank of Whitehall (51 N. Y. 345), in which it was determined that where a trustee is clothed with full power to manage and control the trust estate, an assignment by him of a mortgage impressed with the trust to a hona fide purchaser or pledgee, cannot be impeached by the cestui que t/rust. ' See Cutts v. Guild (57 N. Y. 229), in 61 N. Y..88, affi'g 59 Barb. 585 ; Clarke which the doctrine of Bush v. Lathrop v. Roberts, 25 Hun, 86; Westbrook v. was approved by the Commission of Ap- Gleason, 79 N. Y. 23, 30 ; Simpson v. peals. See also to the same effect, Del Hoyo, 94 N. Y. i8g. Trustees of Union College v. Wheeler, §§320-322.] ASSIGNMENT OF MOETGAGES. 225 § 320. In First National Bank of Corry v. Stiles (22 Hun, 339), a bond and mortgage for $10,000 had been made by McKay to J!f ash on an arrangement by which they were to be sold by J^ash and the proceeds applied to the payment of certain drafts drawn by McKay on Nash and accepted by him for the accommodation of McKay. Instead of selling them they were assigned by Nash to the Union Banking Company in part as security for past indebtednesses, and the bank relying upon the assignment at the same time dis- counted other paper for said JSTash to an amount exceeding $10,000, the proceeds of which were applied in taking up paper previously discounted for said Nash by said assignees upon which Nash and other parties were liable. The plaintiff, as the owner of one of the drafts which was to have been paid by the mortgage, brought the action against the defendant, as trustee of the Union Banking Com- pany, to restrain the enforcement of the mortgage. It was held that the assignment was sufficient, that the Union Banking Company ac- quired title to the bond and mortgage thereby, and that the action could not be sustained.. § 321. When real or personal property is obtained from one by fraud upon the purchase thereof, and the vendor thus intention- ally parts with the title, the vendee can always by a sale to a 'bona fide purchaser for value, give a good title as against the vendor. So, where a conveyance of real estate was obtained by fraud and the grantee mortgaged the property and the mortgage was thereafter purchased by a person having no notice of the fraud and for value, it was held that it* could be enforced.' A bona fide assignee of a mortgage is entitled to hold it as against the original assignor, who, by placing it in his agent's hands, assigned in blank or for a particular purpose, gave such agent an opportunity to commit a fraud upon him.' But a person taking such assignment as security for an antecedent debt is not a bona fide assignee for this purpose.' A mortgage executed to defraud creditors will be good in the hands of a bona fide assignee for value.' § 323. Limitations of last-mentioned rule. — The cases of Mc- ' Simpson v. Del Hoyo, 94 N. Y. i8g. * Blunt v. Norris, 123 Mass. 55. ' Putnam v. Clark, 29 N. J. Eq. 412 ; ^ De Witt v. Van Sickle, 29 N. J. Eq. Grocers' Bank v. Neet, 29 N. J. Eq. """ 449 ; Jacobson v. Dodd, 32 N. J. Eq. 403. 15 209. 226 MORTGAGES OF REAL PEOPERTT. [§ 323. Weil V. The Tenth National Bank {supra) and Moore v. The Met/ro- politam National Bank {supra) do not either of them interfere with the well-settled rule that the purchaser of a chose in action takes it subject to the equities between the original parties. These cases only have application where the security is valid at its inception and the apparent ownership has been conferred by assignment from the owner. In such case such owner is estopped from asserting his title against a ionafide purchaser for value, who purchased upon the faith of such apparent absolute ownership. The equities of mortgagors are in no way affected by those decisions.' The title of a bond and mortgage does not pass under an assign- ment which is neither delivered to nor accepted by the assignee, though it be recorded. So, where an assignment of a mortgage was made as a collateral security and was recorded, but was never deliv- ered, the original bond and mortgage remaining in the hands of the mortgagor, who continued to collect and receipt for the interest in his own name ; and the mortgagee assigned them again to a pur- chaser for value, the second assignee was held to have the better title.'' In Beid v. Sprague (9 Hun, 30), a mortgage was held in trust for the use of a lunatic for her life, with remainder to the mortgagee. The mortgage was a part of the purchase money on a sale of a por- tion of the trust estate, and the nature of the trust did not appear upon its face. The mortgage was assigned as security for a debt, and it was held that the assignee occupied precisely the position of the assignor, and that a court of equity might enforce the trust against him, § 323. Rules for determining what equities are destroyed by assignment. — The following propositions appear to be sustained by the decisions already cited : 1. The assignment of a bond and mortgage operates as a grant or transfer of the interest of the assignor in the debt or obligation, and in the land as security therefor. This is all that, in any event, or under any circumstances, can be received by the assignee from the assignor. 2. The assignee may acquire the rights of third persons, either under the recording acts, because the rights of such third persons did not appear upon the public records when a positive rule of law re- ' Davis V. Bechstein, 69 N. Y. 440. ' Brown v. Johnston, 7 Abb, N. C. 188. § 324.] ASSIGNMENT OF MOETGAaES. ' 227 quires that they should so appear, or because such third persons have by their actions or by their omitting to act, rendered it inequitable that they should assert their rights as against him. In either case, the rights of the assignee may be said to depend upon an estoppel against the persons whose rights are cut off for his benefit. Such an estoppel operates as an equitable grant, and the rights which are ac- quired by the assignee, and which were not possessed by the assignor, depend upon such estoppel or equitable grant, and not upon the assign- ment. 3. The liability of the mortgagor upon his bond for the debt is inherited by his personal representatives, no matter in whose hands the obligation may be, and he may render a void bond or obligation binding upon himself and them in the hands of a purchaser of it, by acts which render it dishonest to deny that it is so. In the same way he may, so long as the land continues to be his, bind the land by the mortgage by way of estoppel, and thereby cut off a defense which might otlaerwise be made; and such estoppel will bind him and those who acquire interests in the land under him subsequent thereto. But it will not bind interests which vested previous to such estoppel,' and the owners of interests which had previously vested can only have their property taken away from them by some act or neglect of their own, as, for instance, by omitting to record the instruments upon which their rights depend, when the law requires that they should be recorded. 4. When questions arise as to the title to the mortgage itself, all the claimants agreeing with regard to its validity, such questions are to be decided upon the same principles which would govern if the subject of the controversy were a horse or any other chattel, except that the recording acts are to be considered in the cases to which they may apply. § 324. When mortgagor will be estopped from defending against assignee. — Since a mortgage carries with it no conclusive presumption of validity, it is never safe to take an assignment of a mortgage without first making inquiry of the parties who might pos- sibly have some claim or defense against it, as to their rights^ If this inquiry be made in good faith, the answers in relation to the instru- ment are conclusive as against the parties making them, and all per- sons afterward claiming under such parties, in favor oi the person ' Schafer v. Reilly, 50 N. Y. 61. 228 MORTGAGES OF EEAL PEOPEETY. [§§325-326. maMng tlie inquiry and acting upon tlie information received, by way of estoppel.' If the mortgagor states to a person about talcing an assignment that the mortgage is valid and free from defenses, and if such person believes such statement to be true, and if he acts upon it in good faith, it will protect him, even though the mortgage be void for usury.^ § 325. Estoppel a protection to extent only of consideration. — The rule which enforces an estoppel injpais is an equitable one, and should not be subverted to the assisting of oppression, and there is neither reason nor justice in the enforcing of a rule of ethics to ena- ble the recovery of usurious profits. If a person attempted, by the construction of an estoppel, to enforce a void mortgage of $1,000 pur- chased for $100, it should be permitted upon some other ground than the principles of morality and good conscience. These principles would denounce it as oppression and extortion, and courts should be cautious not to establish an iron rule, the practical operation of which subverts the very principle upon which it is based. For these reasons an estoppel will not operate to enable the purchaser of a mortgage to make a speculation out of the falsehood of the mortgagor, and it will only protect him to the extent of the amount of money actually ad- vanced by him upon the faith of the mortgagor's statement as to the validity of the security, with legal interest. § 326. Form of statement to create estoppel. — To create an estoppel, it is necessary that the statement be made to the person 1 Union Dime Savings Inst. v. Wei- Real Estate Trust Co. v. Seagreave, 49 mot, 94 N. Y. 221 ; Payne v. Burnham, How. 489 ; L'Amoreaux v. Visscher, 2 2 Hun, 143; s. c. 4N.Y. Sup. (T. &C.) N. Y. 278; Nichols v. Nussbaum, 10 678 ; 62 N. Y. 69 ; Eitel v. Bracken, 6 Hun, 214 ; Smyth v. Munroe, ig Hun, J. &S. 7; Watson V. McLaren, 19 Wend. 550 ; Real Estate Trust Co. v. Rader, 53 557 ; Lesley v. Johnson, 41 Barb. 359 ; How. 231 ; Weil v. Fischer, 42 N. Y. Ferguson v. Hamilton, 35 Id. 427; Clark Supr. (10 J. & S.) 32 ; Smyth v. Lom- V. Sisson, 5 Duer, 408 ; Fleischmann v. bardo, 15 Hun, 415 ; Barnett v. Zacha- Stern, 24 Hun, 265, aiE'd 90 N. Y. no ; rias, 24 Hun, 304 ; Piatt v. Newcomb, 27 Carpenter v. O'Dougherty, 2 T. & C. Hun, 186; Payne v. Burnham, 62 N. Y. .427; Kelly V. Scott, 49 N. Y. 595; Hirsch 69 ; Ahern v. Goodspeed, 72 N. Y. 108 ; V. Trainer, 3 Abb. N. C. 274 ; Grissler Riggs v. Purssell, 89 N. Y. 608 ; Weyh V. Powers, 81 N. Y. 57 ; 53 How. 194 ; v. Boylan, 85 N. Y. 394. J7 Am, R. 475 ; Real Estate Trust Co. v. * Payne v. Burnham, 62 N. Y. 6g, Rader, 53 How. 231 ; Sweeney v. Wil- rev'g s. c. 4 N. Y. Sup. (T. & C.) 678 ; 2 Jiams, 36 N. J, Eq. 627. Hun, 143 ; Norris v. Wood, 14 Hun, '^ Mason v. Anthony, 3 Keyes, 609 ; 196. §§ 327-328.] ASSIGNMENT or MORTGAGES. 229 about to act upon it, and with intent that he shall do so. Every mort- gage or other written obligation of indebtedness contains within itself a statement of facts which imports vahdity, but the statement does not prevent the person promising from availing himself of any vahd defense ; for the declaration falls with the contract.' But where a certificate is made by a mortgagor in such form as to be an open let- ter to every person contemplating the purchase of the security, ex- pressly declaring its validity, he will be bound to the truth of his statements in favor of any person who may have relied upon them, even though such certificate bears the same date as the mortgage.'' § 327. The statement must have been acted upon. — An estop- pel in pcds is defined to be " an admission or statement, made by one individual, intended to influence the conduct of another with whom he is dealing, and actually leading him into a line of conduct which must be prejudicial to his interests, unless the party making the ad- mission or statement be cut off from the power of retraction." " In such a case it would be against good conscience and a frauds to deny the truth of the statement thus made and acted upon ; and this is the point upon which the question of estoppel turns." An indispensable requisite of an estoppel m pais is that the con- duct or representation was intended to, and did in fact, influence the other party to his injury. It is not sufficient that a person is made to believe that an estoppel wiU be made in the future.' § 328. The statement must be believed. — By an estoppel a man's mouth is closed so as to prevent him from showing the truth, and the law wiU only enforce it when the rule of policy is also a plain rule of morals. The doctrine of estoppel vnjpais rests upon equity, good conscience, and honest dealing ; it is not sufficient that the statement was believed to be a protection as a matter of law, but the facts stated must be believed and relied on, and a change of posi- tion must be induced by such reliance on their truth." No mere form will work an estoppel ; and if the person inquiring,' or his agent in 1 Mechanics' Bank v. N. Y. & N. H. * Baker v. The Union Mutual Ins. R.R.Co.,i3N.Y.638;Clarkv. Sisson,22 Co., 43 N. Y. 283. N. Y. 312 ; Weyh v. Boylan, 85 N. Y. 394. ^ Payne v. Burnham, 62 N. Y. 69. ^ Weyh V. Boylan, 83 N. Y. 394, 401 ; * Welland Canal v. Hathaway, 8 Wend. Mechanics' Bank of Brooklyn v. Town- 483 ; Shapley v. Abbott, 42 N. Y. send, 29 Barb. 569. 443. 3 Dezell V. Odell, 3 Hill, 219 ; Rey- ' Shapley v. Abbott, 42 N. Y. 443 ; nolds V. Lounsbury, 6 Hill, 534. Kneettle v. Newcomb, 31 Barb. i6g. 230 MORTGAGES OF EEAL PROPERTY. [§§ 329-331. the special transaction/ have knowledge of the facts, a statement made for the purpose of affording him a legal protection will not answer. If he does not believe the statement to be true, it will not protect him." A statement that a mortgage is valid, is, therefore, no protec- tion to a party to the transaction out of which the defense arose,' even though he received the statement and acted upon it, believing that it would afford him protection.* § 329. The statement must be fairly obtained, without any trick or fraud, since one who claims the protection of an equitable rule, must himself act equitably.' It is therefore desirable that a per- son who intends to rely upon such a statement should be satisfied that its meaning is well understood by the person who is making it, and that he should be able to prove that his conduct was such as to ex- clude all presumption of unfairness or of artifice on his part. If he himself does nothing which ought to mislead, the person with whom he deals will not be allowed to mislead or to defraud him, and will be held to the truth of the statement. The statement will in such a case be held to operate as an estoppel, even though it is signed by a per- son who does not understand the language in which it is written, or the purpose for which it is to be used," or by a person of feeble mind.' § 330. An estoppel may also be created by conduct without words, and where a mortgage was paid, but with the knowledge and assent of the mortgagor was assigned to a purchaser for value with- out notice, it was held valid as against the mortgagor.' So, where an assignee of a right of action takes an assignment with the debtor's assent, though he merely stands by in silence, the debtor is estopped to impeach it.° § 331. Estoppel by statements of an agent. — An estoppel is ' Hutchins v. Hebbard, 34 N. Y. 24 ; * Eitel v. Bracken, 6 J. & S. 7 ; Shap- Plumb V. Cattaraugus Ins. Co., 18 N. Y. ley v. Abbott, 42 N. Y. 443. 394 ; Lawrence v. Brown, 5 N. Y. (i * Wilcox v. Howell, 44 N. Y. 398 ; Seld.) 401. s. c. 44 Barb. 396 ; Mechanics' Bank v. * Keeler v. Davis, 5 Duer, 507 ; Law- Townsend, 17 How. 569 ; Nichols v. rence v. Brown, 5 N. Y. 394; Chautau- Nussbaum, lo Hun, 214. qua Bank v. White, 6 Id. 236 ; Jewett v. * Dinkelspiel v. Franklin, 7 Hun, 339 ; Miller, 10 Id. 402 ; Eitel v. Bracken, 6 Phillip v. Gallant, 62 N. Y. 256. J. & S. 7. ' Hirsch v. Trainer, 3 Abb. N. C. 274. ' Van Sickle v. Palmer, 2 N. Y. Sup. ' Purser v. Anderson, 4 Edw. 17. (T. & C.) 612 ; Breunich v. Weselmann, ' Watson's Ex'rs v. McLaren, 19 Wend. 49 N. Y. Super. (17 J. & S.) 31. 562 ; Weyh v. Boylan, 85 N. Y. 394, 397. § 332.] AS8IGNMEKT OP MORTGAGES. 231 not created by the false statement of an agent as to a matter not within the scope of his agency.' But where a bond and mortgage are made and delivered to the mortgagee for the purpose of sale, he is thereby constituted the agent of the mortgagee, with authority to do any act or make any statement with regard to them found neces- sary to make a sale and incidental thereto. If such mortgagee de- clares falsely in the course of a negotiation for such sale that the bond and mortgage were made to him for full value and are valid securities in his hands, and a purchaser relies on such declaration, the mortgagor is bound by them and cannot assert the facts in defense." So, where application was made to a banking firm by one of its customers for a " good " bond and mortgage, and they furnished a bond and mortgage executed by one of the members of the firm to another, it was held that all the members of the firm, including the parties to the securi- ties, were estopped from alleging them to be usurious and void." § 332. Who are bound by such estoppel. — An estoppel binds the person making the statement, and all claiming under him subse- quent to the time when it has become binding by the change of posi- tion which it induces, but it cannot bind strangers. It operates, as it were, as an equitable assignment of the rights of the person estopped, but it concludes no one else." The grantee of a person bound by an estoppel is also bound by it, upon the principle that a man can only convey such rights as he has, but statements and admissions made by the grantor of a chose in action, and which have not become binding as estoppels, do not have any such effect. A declaration made by a mortgagee prior to an assignment, to the effect that the mortgage is void for usury, is not even admissible against his assignee for value," neither are any other declarations or admissions which have not influenced the conduct of the persons to whom they were made in dealing with the security.' Even a receipt in writing, signed by the mortgagee, is not in itself conclusive evidence of payment as against his assignee for value, for a receipt is but a written admission, and is always capable of explana- ' N. Y. Life Ins. and Trust Co. v. ^ Hoeffler v. Westcott, 15 Hun, 243. Beebe, 7 N. Y. (3 Seld.) 364. , * Schafer v. Reilly, 50 N. Y. 61. = Ahern v. Goodspeed, 72 N. Y. 108, ' Booth v. Swezey, 8 N. Y. (4 Seld.) 114; Piatt V. Newcomb, 27 Hun, 186; 276. Hoeffler v. Westcott, 15 Hun, 243. See * Paige v. Cagwin, 7 Hill, 361 ; Smith also Commonwealth v. Councils of Pitts- v. Webb, i Barb. 230. burgh, 34 Pa. St. 496, 520. , 232 MOETGAGBS OF EEAL PEOPERTT. [§ 333. tion.' A receipt is, however, evidence, in connection with proof of payment as part of the res gestce.'' A statement of the mortgagit^o the effect that there was no legal or equitable defense to the mortgage, upon the faith of which a pur- chaser of the security paid value, estops the mortgagor, and all there- after claiming under him, from setting up a parol agreement between the mortgagor and mortgagee at the time of the execution of the mortgage, by which the mortgagee was to release certain portions of the premises on specified conditions.' A married woman may be estopped by a statement as to the valid- ity of a mortgage which is rehed upon by a purchaser, in the same manner as if she were sole." § 333. What covenants are implied in an assignment of a mortgage. — The authorities state in general terms, that the vendor of a chose in action, in the absence of express stipulations, impliedly warrants its legal soundness and validity. If there are exceptions to this rule, they do not exist where the invalidity of the debt or secu- rity sold arises out of the vendor's own dealing with or relation to it.' An absolute transfer carries with it by imphcation, also a covenant that the vendor has a perfect title," except where the vendor has not the possession of the chose in action, in which case such a covenant is not implied.' In addition to the warranty of title on the sale of a mortgage, there is imphed a warranty that it is not a forgery ;° that it is unpaid ; that there is no legal defense to its collection," and that it can be enforced when it shall become due according to its terms.'" In an action upon such implied warranty it is not necessary before bringing the suit to offer to reassign and return the bond and mort- gage," and this although there might be value in their ownership in consequence of the covenant of a subsequent grantee of the mortgagor ' Foster v. Beals, 2i N. Y. 247. ^ Burt v. Dewey, 40 N. Y. 283 ; Car- ' Bank of Monroe v. Culver, 2 Hill, man v. Trude, 25 How. 440. 531 ; Van Keuren v. Corkins, 66 N. Y. ' Scranton v. Clark, 39 Barb. 273 ; s. 77, affi'g 4 Hun, 129. c. afE'd 6 Trans. App. 132. ' Smyth V. Knickerbocker Life Ins. ' Corwin v. Wesley, 2 J. & S. 109. Co., 21 Hun, 241, affi'd 84 N. Y. 589. » Fake v. Smith, 7 Abb. N. S. 106 ; '' Smyth V. Munroe, 19 Hun, 550. HoefHer v. Westcott, 15 Hun, 243. * Delaware Bank. v. Jarvis, 20 N.\Y. '" Furniss v. Ferguson, 34 N. Y. 485, 226 ; Littauer v. Goldman, 9 Hun, 231 ; affi'g s. c. 3 Robt. 269. Farmer's Nat. Bank of Salem v. Fletcher, " Parks v. Morris Axe & Tool Co., 54 44 Iowa, 252. N. Y. 586. § 334. J ASSIGNMENT OF MORTGAGES. 233 to pay them, to which defendant would be entitled on paying the judgment.' The implied warranty accompanying the sale of a chattel or of a chose in action is similar in efEect to the covenant for quiet enjoyment in respect to lands.^ In actions upon such covenants it is necessary to show that the possession of the grantee has been disturbed,' though not necessarily by process of law;' and in order to recover upon the implied covenants in an assignment of a chose in action, it must be shown that the assignee has actually suffered a loss that would not have come to him if the covenants had not been broken. He may voluntarily surrender his rights to the true owner, and take upon himself the burden, aS against his assignor, of showing the title of the claimant ;' but, so long as the assignee is in the enjoyment of the thing sold, he cannot maintain an action against his assignor. Nor can he, by an amicable arrangement, settle with the claimant and ex- tinguish the adverse title. He must submit and surrender his claims, or there must be a judicial determination in favor of the adverse claimant," and even a judicial determination is not conclusive until a payment or assignment directed to be made by it has actually been made.' § 334. Notice of the assignment of a mortgage should be given to the mortgagor. — The assignee of a bond and mortgage, as well as assignees of other choses in action, must give notice of the assignment if he wishes to protect himself against a iona fide pay- ment to the assignor, or his duly constituted agent, by the debtor.' By the express provision of the statute the recording of the assign- ment is not of itself to be deemed notice of such assignment to the mortgagor, or his heirs or personal representatives, so as to invalidate any payment made by them, or either of them, to the mortgagee." If the assignee neglects to give actual notice himself, he must, in order ' Ross V. Terry, 63 N. Y. 613. ' Burt v. Dewey. 40 N. Y. 283. ^ Delaware Bank v. Jarvis, 20 N. Y. ' James v. Johnson, 6 Johns. Ch. 427 ; 226 ; Coolidge v. Brigham, 5 Mete. 68 ; s. c. 2 Cow. 246 ; N. Y. Life Ins. & Trust Bordewell v. Colie, i Lans. 141. Co. v. Smith, 2 Barb. Ch. 82 ; Trustees * Case V. Hall, 24 Wend. 102. of Union College v. Wheeler, 61 N. Y. * Greenvaultv. Davis, 4 Hill, 643 ; St. 88, iii; Heermatis v. Ellsworth, 64 N. Y. John V. Palmer, 5 Hill, 599. 159; Stoddardv. Gailor, 90N.Y. 575; Van 5 Sweetman v. Prince, 26 N. Y. 224 ; Keuren v. Corkins, 66 N. Y. 77, affi'g Bordewell v. Colie, i Lans. 141 ; Burt v. 4 Hun, 129 ; s. c. 6 T. & C. 355. Dewey, 40 N. Y. 283. ° t R. S. 763, § 42 ; Reed V; Marble, * Bordewell v. Colie, i Lans. 141. 10 Paige, 409. 234 MORTGAGES OF EEAL PEOPEBTT. [§ 334. to avoid the effect of payment to the assignor, show that the debtor, before making it, in some other way acquired knowledge of the fact. Notice may be inferred, of course, from the circumstances attending the transaction ; but the true question is one of good faith. The failure to produce the bond and mortgage by the mortgagee at the time of receiving the payment, with the suggestion of a false reason to excuse it, and the insolvency of the mortgagee, are not sufficient, as a matter of law, to put the mortgagor on inquiry and charge him with notice that the mortgage has been assigned.' A colorable or fictitious payment, plainly contrived by the mortgagor and mortgagee for the purpose of defrauding the assignee, will not affect his rights,^ and the fact of payment must be shown by something more than the mere admission or receipt of the mortgagor.' If actual notice of the assignment be given to the mortgagor, subsequent payments to the mortgagee will be invalid, and will not operate to reduce the mortgage debt.* But if no notice is given to him, even a tender to the mortgagee, without actual payment,- may discharge the mort- gage lien." In the absence of notice of the assignment, the mortgagor may negotiate with the mortgagee for a discharge of the debt upon a surrender of the land." If the assignment be properly recorded, it is notice to the holders of prior mortgages to such an extent as to entitle the assignee of the subsequent incumbrance to be made a party to the foreclosure of the senior one.' If, however, by any means the assignment is not duly recorded, the assignee must give actual notice to the holder of a prior mortgage ; and if he fails to do so, he will be cut off by a decree of foreclosure of such mortgage, although he was not made a party to the foreclosure. ° 1 Foster v. Beals, 21 N. Y. 247. ^ Hetzell v. Barber, 6 Hun, 534. ^ Brown v. Blydenburgh, 7 N. Y. 141. ^ Wanzer v. Cary, 12 Hun, 403. ' Foster v. Beals, 21 N. Y. 247. ' Vanderkemp v. Shelton, 11 Paige, 28; ^ Mitchell V. Cook, 17 How. no ; s. c. Pickett v. Barron, 2^ Barb. 505 ; Wins- affi'd 29 Barb. 243 ; s. c. rev'd on other low v. McCall, 32 Barb. 241 ; Ely v. Sco- grounds, 7 N. Y. (3 Seld.) 538 -, Reeves, field, 35 Barb. 330. Gd'n, V. Hayes, 95 Ind. 521. ' Moore v. Sloan, 50 Barb. 442. CHAPTEH XL THE PAYMENT AND DISCHAKGE OP MOETGAaES. WHAT PAYMENT WILL DISCHARGE A MORTGAGE. i 335- As to whether a payment effects a discharge or a transfer. 336. Keeping mortgage alive by ex- press agreement. 337. A mortgage lien may be kept alive to do equity. 338. A mortgage may be held discharg- ed though an assignment be taken. 339. An assignment will always be sus- tained as against one having no equitable claim. 340. Any act which suffices to discharge a debt. 341. Loss of the remedy for the debt. WHO MAY RECEIVE PAYMENT. 342. Since the debt is the life of the mortgage. 343. A mortgage made to several per- sons to secure several debts or liabilities. 344. The recording acts have applica- tion. 345. Forged certificate of satisfaction. 346. Authority of agent may be estab- lished by estoppel. 347. When one of several mortgagees may acknowledge satisfaction. 348. One of two or more executors. 349. A receiver. 350. County treasurers. 351-352. Power of a foreign executor or administrator. 353. An assignee of a mortgage who holds it as security. 354. Possession of the bond is in some cases evidence of authority to collect. 355. Bond should be produced and sur- rendered on payment in full. ; 356. Where payment should be made. 357. Where the discharge of a recorded mortgage is executed by a per- son other than the mortgagee. 358. Remedy against person unlawful- ly cancelling lien. 359. Payment to an administrator. APPLICATION OF PAYMENTS. 360. Application by the parties. 361. As between secured and unsecur- ed claims. 362. Where no specific application is made by the parties. DISCHARGE BY MERGER. 363. When a, mortgage will be dis- charged under the doctrine of merger. 364. The doctrine of merger as applied to mortgages is founded upon equitable principles. 365. A merger will not be adjudged for the benefit of an infervening in- cumbrance. 366. Merger controlled by estoppel. 367. A merger can only occur. 368. No merger unless the title and debt are in the same person at the same time. 369. No merger when conveyance is set aside. 370. Purchaser cannot rely on merger shown by the public records. 371. Preventing merger by clause in conveyance or assignment. 372. No merger caused by marriage of mortgagor and mortgagee. 373. When the taking of a higher se- curity will extinguish an inferior one. 374. Debt remains though new obliga- tion be given. 236 MOBTGAGES OF EEAL PEOPEETT. § 375. New mortgage without bond may discharge debt. 376. New obligation or security may discharge if so agreed. 377. No merger in a void security. 378. Payment of collateral security in • general cancels debt. 379. Merger of mortgage in judgment of foreclosure. 380. Judgment does not merge cause of action as between defendants. DISCHARGE BY RELEASE OF PART OF THE SECURITY. 381. When a release of a portion of the security will cancel the mortgage pro tanto. 382. The reason for this rule. 383. The mortgagee is not prejudiced by release unless he has notice of the facts. 384. What notice is sufficient. ' 385. The effect of a release by the mort- gagee must depend upon the circumstances of the case. 386. Where two parcels of land owned by different persons are equit- ably bound pro rata. 387. It is only when the release is given in violation of equitable rights. 388. In every case the mortgage will only be affected to the extent of the value. CHANGES IN THE FORM OF THE DEBT. 389. Lien not commonly affected by changes in form of debt. 390. Court will look at real nature of the transaction. 391. New obligations or securities. 392. Agreement to take note in pay- ' ment must be founded on new consideration. 393. Rule as to merger in securities of a higher nature. DISCHARGE BY EXTENDING TIME FOR PAYMENT OF MORTGAGE DEBT. 394. Where the property of one per- son is pledged to pay the debt of another. DISCHARGE BY ESTOPPEL. 395. If the mortgagee should represent. DISCHARGE BY TENDER OF PAYMENT. 396. Rule at common law. 397. Rule in this State. §398, 399. 400. 401. 402. 403. 404. 405 406- 409, A valid tender can be made. The tender must be kept good to sustain action for affirmative re- lief. What tender is sufficient. To whom tender may be made. Mortgagee must accept a proper tender without imposing condi- tions. Where a mortgage is given con- ditioned for the support of the mortgagee. Mortgagee may rely on decisions of the highest courts. Tender must be clearly proved. 408. Who may make a tender suffi- cient to discharge the lien. Junior lienor may not discharge by making a tender. PRESUMPTION OF PAYMENT FROM LAPSE OF TIME. 410. When a mortgage is discharged from lapse of time. 411. The statute controls. 412. Delay in foreclosing for less than statutory period. 413. Payments made by mortgagor after granting mortgaged estate. 414. Mortgage under seal not barred until twenty years, though debt be barred in six. 415. The rights of the mortgagor, like those of the mortgagee, may also be barred by lapse of time. 416. Possession by a mortgagor of the bond and mortgage. DISCHARGE OF MORTGAGES UPON THE RECORD. 417. Statute. 418. Certificate of satisfaction is with- in the recording acts. 419. Other means of evidencing dis- charge. 420. The record of discharge is no more valuable than the certifi- cate of satisfaction. 421. Who may execute certificate of satisfaction. 422. Discharge by officer of limited powers. 423. Right of person paying mortgage to certificate of satisfaction. 424. Actions to discharge mortgages. 425. Who may bring action to discharge mortgage. §335.] PAYMENT AND DISCHARGE. 237 § 426. Action for damages for refusal to execute discharge. 427. Effect of discharging lien upon the debt. 428. Special proceedings to discharge mortgages of record in certain cases. 429. Such petition may be presented to the Supreme Court. 430. This statute was designed. SETTING ASIDE AND CANCELLING THE DISCHARGE OF A MORTGAGE. 431. Certificate of satisfaction cancel- led for fraud or mistake. 432. A release can only be operative when it is duly delivered. 433. Reinstating mortgage so as to protect against junior liens. 434. Where a valid lien is discharged in consideration of an invalid one. 435. Satisfaction on the record set aside, 436. Who may resist the reinstatement of a cancelled mortgage. 437. The law protects only the vigi- lant. 438. Action for damages for unauthor- ized discharge. REISSUE OF PAID MORTGAGE. 439. Mortgage absolutely cancelled by payment of debt. § 440. A mortgage made at its inception to secure future advances. 441. Debt must be actually satisfied. 442. Reissued mortgage sustained to do equity. 443. Junior titles and liens always pro- tected. SUBROGATION. which 444. General principles upon subrogation is allowed. Volunteer or meddler is not pro- tected by subrogation. For the purpose of being entitled to subrogation. Even where there is only a color- able obligation to pay. The right of a junior incumbrancer to be subrogated. 449. Lender of money to be used in paying prior lien. Usurer not protected by subroga- tion. Subrogation may be awarded to compel contribution. Subrogation may also be decreed to remedy a mistake. Preventing an inequitable claim for dower. Surety subrogated to security given to co-surety. Subrogation of creditor to collat- eral securities held by sureties. Pleadings to assert right of sub- rogation. 445- 446. 447. 448. 450. 451. 452. 453- 454- 455- 456. WHAT PAYMENT WILL DISCHARGE A MORTGAGE. § 335. As to whether a payment effects a discharge or a trans- fer. — The fact that a mortgagee pays money to thfe mortgagor, or that, after the making of the mortgage, the mortgagor becomes in- debted to the mortgagee in continuing the transactions out of which the mortgage indebtedness arose, does not necessarily operate to satisfy or discharge the mortgage. Whether the payment is or is not to be credited on the mortgage debt, or the new debt is or is not to be off- set against the old, are questions purely of fact, depending upon the intentions of the parties.' Payment of a mortgage by a third person is a good payment if it is afterward ratified.^ ' Peck v. Minot, 3 Abb. App. Dec. ' Heermans v. Clarkson, 64 N. Y. 465 ; Bockes v. Hathorn, 20 Hun, 503 ; 171. Toll V. Hiller, ii Paige, 228. 238 MORTGAGES OF EEAL I'ROPRRTr. [§ 336. § 336. Keeping mortgage alive by express agreement. — Even if the payment is made by the mortgagor out of his own means on account of the mortgage debt, yet if it is agreed at the time of the payment that the mortgage shall not be extinguished, but shall be kept alive and be transferred to another creditor of the mortgagor, and payment is made and received on that condition, the agreement is valid, and such a payment will not extinguish the mortgage ; and the creditor to whom the mortgage is assigned under such an arrange- ment may enforce it. No one is injured by such a transaction. The debtor could make the payment for account of the creditor to whom he desired the mortgage assigned, and the creditor could ratify the transaction by accepting the assignment. The result is the same as if the creditor had himself purchased the mortgage with means fur- nished by the debtor.' Thus the performance of an agreement by a mortgagor to pay the mortgagee a sum equal to the amount of his debt, if he would assign the mortgage to the mortgagor's attaching creditor as security instead of the attachment, does not extinguish the mortgage ; and it can be enforced by the creditor, although, for a temporary purpose, he had reassigned it to the mortgagee, who afterward assigned it back again." Where a person paying the amount due upon a bond and mortgage is under no equitable obligation to discharge it, the question as to whether such payment is or is not a discharge will be governed by the intent with which the payment is made, and tlje mortgage will not be deemed to be discharged if the intent was to keep it alive as a valid security.' Where money was advanced to a mortgagor to take up a mortgage, and the money was paid to the mortgagee, who, some days later, assigned the mortgage to the person who had advanced the money, it was held that if this assignment was made in pursuance of a contract between the assignee and the mortgagor, it was a valid security ; but if the assignment was made after the money had been paid to the mortgagee, and not in pursuance of any contract, the mortgage was extinguished and afforded no security to the assignee." 'Per RAPALLO,J.,inHubbellv. Blakes- ^ Sheddy v. Geran, 113 Mass. 378. lee, 71 N. Y. 63, 70, rev'g s. c. 8 Hun, ^ Coles v. Appleby, 87 N. Y. 114 ; 603 ; Coles V. Appleby, 22 Hun, 72 ; Champney v. Coope, 32 N. Y; 543 ; Har- Sheddy v. Geran, 113 Mass. 378 ; BoUes beck v. Vanderbilt, 20 N. Y. 395 ; Kel- V. Wade, 4 N. J. Eq. (3 Green.) 458 ; Hoy logg v. Ames, 41 N. Y. 263. V. Bramhall, 19 Id. 74 ; Goulding v. ■■ Nosier v. Haynes, 2 Nev. 53. Bunster, 9 Wis. 513. §§337-338. J PAYMENT AWD DISCHARGE. 239 § 337. A mortgage lien may be kept alive to do equity. — A mortgage is not discharged, either as to the owner of the property or as to subsequent incumbrancers, if paid by the owner of the equity of redemption, but with the funds of a third person, for the purpose of purchasing it for such third person.' Where a bond and mortgage was owned by a corporation which declined to execute an assignment, but dehvered instead a certificate of satisfaction, it was nevertheless held to be unpaid, and was enforced in favor of a person who, at the request of the owner of the equity of redemption, and under an agreement for the assignment, had paid the money." A mortgage is not satisfied when paid by joint mortgagors un- equally, and assigned by consent to the wife of the largest payer, ^ or when paid by and assigned to one of two tenants in common of the equity of redemption.' In these cases the mortgage survives for the purpose of enforcing contribution. A mortgage given to an accommodation indorser of a note to in- demnify him, is not discharged by a payment of the note made by such indorser, even though a memorandum of full payment is made on the note.' On the same principle a mortgage of personal property, made to secure an indorser on a note, is not discharged by the in- dorser's lending money to the mortgagor which is applied to the pay- ment of the note, unless the parties intend that the mortgage shall thereby be discharged." A junior mortgagee who pays a senior mortgage, and has it assigned to himself, and afterward assigns it to a third person in order that a sale may be made under it, and attends at such sale and participates therein by bidding on the property, is estopped from claiming that the mortgage is paid, though the result of the sale is to deprive him of his junior lien.' § 338. A mortgage may be held discharged though an as- signment be taken. — The same principles of equity which will keep a mortgage alive in order to do justice, will operate to decree a mort- gage satisfied where that is necessary to protect substantial rights, and 1 Denton v. Cole, 30 N. J. Eq. 244 ; * Barker v. Flood, 103 Mass. 474. Nosier v. Haynes, 2 Nev. 53 ; Champney ' Bendy v. Townsend, 109 U. S. 665. V. Coope, 32 N. Y. 543. ^ Bryant v. Pollard, 92 Mass. (10 Al- " Johnson v. Parmly, 14 Hun, 398. len) 81. 3 Gantt V. Gantt, 15 S. Car. 610. " Pursley v. Forth, 82 111. 327. 240 M0ETGAGE8 OF EEAL PKOPEETT. [§ 338. payment by a person equitably bound is a discbarge, even though an assignment be taken.' A person who with the funds of the mortgagor and. as his agent has paid off a mortgage, cannot keep the security alive by having it assigned to himself -^ even if he has a valid claim against the mort- gagor and merely seeks to hold the mortgage as security for such claim.' If an assignment is made of a mortgage at the request of the mort- gagor who furnishes a part of the consideration, the mortgage in the hands of the assignee and against subsequent incumbrancers at the time of the assignment, is paid to the extent of the portion of the purchase price advanced by the mortgagor.' A grantor who covenants against incumbrances and who subse- quently pays off a mortgage existing at the time of the conveyance, cannot, by taking an assignment to himself, keep the security alive, since the payment must be regarded as having been made for the benefit of the grantee.^ If a grantee who has taken land expressly subject to a mortgage which he covenanted to pay, pays the amount due on the mortgage and takes an assignment to himself, the mortgage will be deemed paid as to the widow of the grantor who joined in the mortgage but not in the deed." So a purchaser who has not assumed a personal obligation to pay a mortgage, but who has taken his title subject to it, may not, by taking an assignment of the mortgage debt, obtain a right to set it off against an unpaid balance stiU owing to his vendor on the purchase.' When a married woman gave to a firm of which her husband was a member, her note for his indebtedness to the firm ; and the firm indorsed the note and gave a mortgage to secure its payment, and she voluntarily paid the note and took an assignment of the mortgage, it was held that the mortgage was discharged by her.' ' Knolls V. Barnhart, 71 N. Y. 474 ; " Sheffield's Ex'r v. McClain, 18 N. J. Mickles v. Dillaye, 15 Hun, 296; Mickles Eq. iz8. V. Townsend, 18 N. Y. 575 ; Russell v. ' Nichols v Lee, 10 Mich. 526. Pistor, 7 N. Y. 171 ; Fitch v. Cotheal, 2 « Hoy v. Bramhall, 19 N. J. Eq. 74. Sand. Ch. 29 ; Wadsworth v. Williams, ^ Brundred v. Walker, 12 N. J. Eq. 100 Mass. 126 ; Brown v. Lapham, 3 140. Cush. 554; Braman v. Dowse, 12 Cush. ^ McCabe v. Swap, 96 Mass . (14 Allen) 227 ; Collins v. Torry, 7 Johns. 278 ; 188. Clay V. Banks, 71 Ga. 363 ; Carlton v. ' Atherton v. Torrey, 43 Ind. 211. Jackson, 121 Mass. 592. ° Whitney v. Franklin, 28 N. J. Eq.126. §§339-340.] PAYMENT AND DISCHAKaE. 241 § 339. An assignment will always be sustained as against one having no equitable claim -upon the person paying its consid- eration. So, where the holder of an equity of redemption in a parcel of land, who was under no obligation to pay either of two mortgages existing on the land and duly recorded, in ignorance of the second mortgage, for the purpose of perfecting his title, made a part payment on the first mortgage, and afterward, on being informed of the second mortgage, paid the balance due on the first mortgage and caused that mortgage to be assigned to a third person in trust for himself, it was held that the holder of the second mortgage was not entitled to re- deem the first except by paying its full amount." It wiU not lie in the mouth of a mortgagee whose entire demand has been paid, to complain that the assignment he gave should have been a certificate of satisfaction, and that he was defrauded into exe- cuting it." § 340. Any act which suffices to discharge a debt discharges also a mortgage made to secure it, and the surrender of a note by the payee to the maker is prima facie a satisfaction or release of the debt' A parol agreement by which the mortgage debt is consented to be cancelled in compromise of a fraud, is a sufficient satisfaction of it.* PajTuent of a debt secured by mortgage discharges the lien." The debt is, indeed, the life of the mortgage, without which it can have no existence, since there can be no security where there is nothing which can be secured. So it has been said that the arrest of the mortgagor on final process, discharges both the debt and the Hen, though this is not the effect of an arrest upon mesne process." A mortgage made to a surety on a note of the mortgagor for his indemnity, has no vitality after a new note has been given to, and accepted by, the creditor, signed by the mortgagor with other sure- ties,' or after the discharge of the surety by the creditor,' or after the note has been paid." A mortgage has been held to be discharged where a payment was made with intent to efEect such discharge, but, by mistake, a certifi- ■ Ryder v. Gaes, 130 Mass. 227. * Terry v. Woods, 14 Miss. 139. ' Jewittv. Davis, 92 Mass. (10 Allen) 68. ' Abbott v. Upton, 36 Mass. (19 Pick.) ' Sherman v. Sherman, 3 Ind. 337. 434. * Green v. Fry, 93 N. Y. 353. ' Stunner v. Bachelder, 30 Me. 35. ' Smith V. Durell, 16 N. H. 344 ; 41 ' Franklin Bank v. Pratt, 31 Me. Am. Dec. 733. . 501- 16 242 MORTGAGES OF EEAL PEOPERTY. [§ 341. cate of satisfaction of a similar mortgage on adjoining property was given and recorded, by means of which the mortgagee lost his Ken on the mortgage described in the certificate.' The mistake was held to be imputable to the mortgagee under the special circumstances of the ease. § 341. Loss of the remedy for the debt. — ^Where a mortgage was given by a principal debtor to his surety, and was transferred by the latter to the creditor for value, the subsequent discharge in bank- ruptcy of both principal and surety was held not to destroy the Hen of the mortgage, or to afEect the right of the aasignee to foreclose.' So, the Hen of a mortgage is not impaired by a discharge of the mort- gagor from the debt by composition proceedings in bankruptcy.' And where one mortgaged his real estate to secure the debt of an- other, a subsequent discharge in bankruptcy of the latter did not re- lease the mortgagor from his obHgation on the mortgage as surety." A discharge from the debt under a State insolvent law will not operate to discharge the lien of a mortgage given to secure it.° A mortgage may be enforced though the debt which it is given to secure is barred by the statute of limitations." Where the claim of the mortgagee against the personal estate of a deceased mortgagor was lost by failure to present the note secured by mortgage within the time required by law, this did not preclude him from enforcing the mortgage security.' And, where the holder of a promissory note indorsed it to a third person, and gave the latter a mortgage to secure its payment, and the assignee failed to charge the indorser by notice of non-payment, this did not release the land from the burden of the mortgage.* Where a mortgagor conveys the mortgaged premises to a mort- gagee, who assumes payment of the debt, the grantee thereupon be- ' Barnes v. Wintringham, 32 Hun, 43. « Gillette v. Smith, 18 Hun, 10 ; Pratt 2 Carlisle v. Wilkins, Adm'r, 51 Ala. v. Huggins, 29 Barb. 277 ; Heyer v. 371. Pruyn, 7 Paige, 465 ; Borst y. Corey, 3 Cohn V. Colby, 57 How. 168. 15 N. Y. (i Smith) 510 ; Thayer v. Mann, * Burtis, Adm'r, v. Wait, 33 Kans. 19 Pick. 537; Baldwin v. Norton, 2 Conn. 478 ; In re Campbell, i N. B. R. 165 ; 163 ; Spears v. Hartley, 3 Esp. 81 ; Cole V. Duncan, 58 111. 176 ; U. S. Rev. Toplis v. Baker, 2 Cox, 123 ; Powell v. St. (1878), § 5118 ; In re Hartell, 7 N. B. Smith, 30 Mich. 451. R. 559 ; Reed v. BuUington, 11 N. B. R. 'Grafton Bank v. Doe, 19 Vt. 463. 408; Meeks v. Whately, 10 N. B. R. 'Mitchell v. Clark, 35 Vt. 104; Hilton 498 ; Roberts v. Wood, 38 Wis. 60. v. Catherwood, 10 Ohio St. 109. 'Heyer v. Pruyn, 7 Paige, 465, 469. § 342.] PAYMENT AND DISCHARGE. 243 comes the primary debtor, and the land also stands as the mortgagor's indemnity from his personal obligation. A release of the mortgagor, under these • circumstances, from all liability from the debt, is a per- sonal discharge merely, and does not discharge either the mortgage security or the personal obligation of the purchaser.' And even if the purchaser has made no personal covenant to assume, but has merely taken the land charged with the lien, such a release will not exonerate the land." WHO MAT EISCEIVE PAYMENT. § 342. Since the debt is the life of the mortgage, payment of the debt -will discharge the lien.° The debt may be paid or dis- charged in any way that the parties may agree upon.* The person entitled to receive payment of the debt is the person whose certificate of satisfaction is necessary to cancel the Hen, and this is so even if such person is not the nominal mortgagee." Thus, where a mortgage was made to Jasper Waterman, by the terms of which in- terest was to be paid annually to his mother, Sarah "Waterman, during her life, and at her death part of the principal was to be paid to Jasper, and the balance to his brother's minor children as they respectively became of age ; and after the death of the mother and the coming of age of such infants, the money was paid to Jasper, who executed a certificate of satisfaction, such certificate of satisfaction was set aside as unauthorized and void.' The infant beneficiaries under the mort- gage were held to be, for all practical purposes, parties to the mort- gage as effectually as if they had been assignees of it.' The statute directing the clerk to discharge a mortgage on the record on the presentation of a certificate of the mortgagee, his per- sonal representatives or assigns, acknowledged, etc.,' does not give to the mortgagee power to discharge it when he has no right to re- ceive the money secured by it." ' Bentley v. Vanderheyden, 35 N. Y. ^Waterman v. Webster, 33 Hun, 611; 677. McPherson v. Rollins, 21 W. Dig. 254. *Jumel V. Jumel, 7 Paige, 591 ; Tripp 'Citing Pattison v. Hull, 9 Cow. 747 ; V. Vincent, 3 Barb. Ch. 613. Barlow v. Myers, 64 N. Y. 44; Payne v. * Jackson v. Stackhouse, i Cow, 122 ; Wilson, 74 Id. 354, 355; Perot v. Lavas- Jackson V. BlQdget, 5 Cow. 202 ; Lang- seur, 21 La. Ann. 529. don V. Buel, g Wend. So. ' i R. S. 761, § 28. *GriswoId V. Griswold, 7 Lans. 72. "Waterman v. Webster,, 33 Hun, 611 ; 'Stiger V. Bent, iii 111. 328 ; Bank v. Heilbrun v. Hammond, 13 Id. 475 ; Bel- Eldridge, 102 U. S. 545. don v. Meeker, 47 N. Y. 308. 244 MORTGAGES Oi- REAL PEOPEKTT. [§§ 343-344. A mortgagor may pay or settle with the person having the appar- ent authority to receive satisfaction, and a discharge executed by such person will prevail against a secret equity, of which the person making the payment has no notice.' A release from the heirs of a deceased mortgagee will be inopera- tive to cancel the mortgage ; such release must be executed by his executor or administrator.^ A release from the next of kin will also be void." § 343. A mortgage made to several persons to secure sev- eral debts or liabilities can only be fully discharged by the consent (' of all persons claiming rights under it.* Thus, where three indorse- ments were procured upon a bill of exchange and a mortgage of in- demnity given to the three indorsers ; and two of them thereafter acknowledged satisfaction after a new obligation, similarly indorsed, had been given to raise money for its payment, it was held that an entry of discharge on such acknowledgment was no release.' A mortgage made to an indorser by the maker of a note, merely to secure the indorser, may be discharged by the latter at his pleasure ; but where it is agreed that the indorser shall hold the mortgage, not only for his own security, but also for security of the creditor, a con- veyance of the mortgaged property to a party who had notice of the agreement will not defeat the equitable rights of the creditor." The rule would be different if the conveyance had been to a purchaser paying value on the faith of the satisfaction and without notice of the special purpose for which the mortgage had been given.' If one of two persons holding several demands secured by the same mortgage is also the duly authorized agent of the other, a pay- ment to him discharges the debts of both." § 344. The recording acts have application to a certificate of discharge of a mortgage, and therefore where a mortgage is made to secure one or more notes, a discharge upon the record is valid, so as to protect a purchaser or junior incumbrancer, if there be no record of any assignment of any of such notes, and in the absence of notice.' ' Mason v. Beach, 57 Wis. 607. * Hartford & N. Y. Transportation ' Douglas V. Durin, 51 Me. 121. Co. v. First Nat. Bank, 46 Conn. 569. 2 Woodruff V. Mutscher, 34 N. J. Eq. ' Mason v. Beach, 57 Wis. 607. 33, ' Ely V. Bush, 89 N. C. 358. ■* Burnett v. Pratt, 22 Pick. 556 ; Peo- ° Swartz's Ex'r v. List, 13 Ohio St. pie V. Keyser, 28 N. Y. 230. 419 ; Cornog' v. Fuller, 30 Iowa, 211 ; ' Thorton v. Irwin, 43 Mo. 153. Bowling v. Cook, 39 Iowa, 200 ; Hen- §§ 345-846.] PAYMENT AND DISCHARGE, 245 But a mortgagor who pays to the original mortgagee after the transfer of the note is not entitled to any protection.' § 345. Forged certificate of satisfaction. — No right can be founded upon a forgery, and a forged certificate of satisfaction, though duly recorded, will aSord no protection to a purchaser rely- ing upon it." But it has been contended and held that a person whose rights are attempted to be affected by such a forgery owes a duty to third persons who may rely upon the record either to enforce his mortgage by foreclosure, or bring an action to reinstate it upon the record within a reasonable time ; and that, if he fails to do one of these, he may be deemed to be estopped from alleging that the paper is a forgery.' The notion that a man may be estopped by not bringing a lawsuit, is not in harmony with the general current of judicial reasoning, and the case above alluded to has been criticised and overruled.* The only obligation which a person owes to others likely to rely upon a forged paper purporting to be executed by him, is to answer truthfully all inquiries made to him concerning it, and not to keep silence when silence could be construed as an affirmation of the genuineness of the paper. He must be honest and candid, and when a failure to speak' may operate as a fraud upon third per- sons, even silence may operate as an estoppel." But no affirmative action is demanded, and the forged paper being a nullity may be disregarded until some claim is made under it.' Where a mortgagee indorsed his name with seal on the mortgage, and parted with the possession of it, and satisfaction was thereafter written above his signature vrithout his knowledge, and duly recorded, an innocent purchaser was held to be protected.' § 346. Authority of agent may be established by estoppel. — No equity arises, even in favor of a subsequent incumbrancer, where derson v. Pilgrim, 22 Tex. 464; Bacon 550; Horn v. Cole, 51 N. H. 287 ; Ste- V. Van Schoonhoven, ig Hun, 158, affi'd vans v. Dennett, Id. 324 ; Gregg v. Von 87 N. Y. 446; Ayers v. Hays, 60 Ind. Phul, i Wall. 280; Hill v. Epley, 31 452. Pa. St. 331 ; Chapman v. Chapman, 59 ' Burhams v. Hutcheson, 25 Kans. Id. 214 ; Pickard v. Sears, 6 Ad. & El. 625. 469 ; Gregg v. Wells, 10 Id. 90 ; Niven ' Harris v. Cook, 28 N. J. Eq. 277. v. Belknap, 2 Johns. 573. " Costello V. Mead, 55 How. 356. * Viele v. Judson, 82 N. Y. 34 ; Chand- * Viele V. Judson, 82 N. Y. 34, 39, ler v. White, 84 111. 435 ; Meley v. Col- overruling Costello T. Mead, supra. lins, 41 Cal. 663. ' Viele V. Judson, 82 N. Y. 34, 39 ; ' City Council of Charleston v. Ryan, Cornish v. Abington, 4 Hurls & Norm. 23 S. C. 339 ; 53 Am, Rep. 713. 246 MORTGAGES OF EEAL PKOPEETY. [§§347-348. there is a release by one claiming to be the agent of the mortgagee, but is not so.' But an authority may be inferred from the actions of a mortgagee, which would estop him from denying such authority ; as, where a father has so conducted himself as to authorize third per- sons to believe that his son was the real owner of the mortgage." § 347. When one of several mortgagees may acknowledge satisfaction. — According to the decisions in this State, a mortgage is but a security, and is treated as a mere personal contract." If \ there be more than one mortgagee, so far as the mortgagor is con- icerned they are to be regarded as one person, and he has a right to Ideal with each as representing all." By accepting a joint mortgage, each mortgagee gives to every other the power which this principle imphes, as each member of a copartnership clothes each of his co- partners with power to bind him in all matters within the scope of their joint business. Except for the purpose of receiving payment and acknowledging satisfaction, the powers of an ordinary joint ob- ligee over the obligation would not probably correspond with those of a partner, but to that extent they are identical, and the obligor may safely pay to one of several joint obligees." The death of one of two joint mortgagees does not deprive the other of the right to receive payment of and to discharge a mortgage held by both, but renders such right exclusive in the survivor." In all cases, however, of a dis- diarge of a mortgage by one of two or more joint mortgagees, the person receiving the payment is, in equity, treated as a trustee for the money received by him for the benefit of those entitled. His right to receive payment and discharge the mortgage is a mere legal right, and he has no exclusive title to the fund.' § 348. One of two or more executors may lawfully receive pay? ment of and discharge an obhgation due to the estate of his testator,, whether it be made to his testator or to him and his co-executor, or ' McKnight v. Clark, 29 N. J. Eq. 14 Johns. 172 ; Bulkley v. Dayton, 14 105. Johns. 387 ; Murray v. Blatchford, i ' McCabe v. Farnsworth, 27 Mich. 52. Wend. 583 ; Stuyvesant v. Hall, 2 Barb. ' Green v. Hart, i Johns. 580 ; Runyan Ch. 151 ; Wright v. Ware, 58 Ga. 150. V. Mersereau, 11 Johns. 534 ; Martin v. « Per Seldln, J., in The People v. Mowlin,' 2 Burr. 978. Keyser, 28 N. Y. 235 ; Mutual Life Ins. * Carman v. Pultz, 21 N. Y. 550. Co. v. Sturges, 32 N. J. Eq. 678. ' The People v. Keyser, 28 N. Y. 235 ; ' Petty v. Styward, i Eq. Cas. Abr. Bowes V. Seeger, 8 Watts & Serg. 822 ; 290 ; 2 Fonbl. Eq. 103, and notes ; 2 Pierson v. Hooker, 3 Johns. 68 ; Austin Story's Eq. Jur. § 1206 ; 2 Powell on V. Hall, 13 Johns. 286 ; Fitch v. Forman, Morts. 699, 700. §§349-351.] PATMEKT AND DISCHARGE. 247 ■whether his co-executor be dead or alive ; and one of two adminis- trators may do the same.' The same power belongs to a sm-viving trustee." § 349. A receiver authorized to execute upon payment formal satisfaction and discharge of mortgages in his hands as such oflBcer, has authority to receive payment of the amount of a mortgage, although the same may not be due at the time.° § 350. County treasurers have the power to release the whole or any portion of the property covered by mortgages to them, and that without direction of the court, and without the knowledge of the beneficiaries.' But this rule does not prevail where the moneys invested are the proceeds of the sale of infants' lands in partition, and such mortgages can only be regularly cancelled by order of the court.* § 351. Power of a foreign executor or administrator." — It is a principle arising from international comity, that personal property has no locality, and that it is subject to the law which governs the pBrson of the owner, as well in respect to the disposition of it by act inter vivos, as to its transmission by last will and testament, and by succession upon the owner dying intestate.' A mortgage is per- sonal property, and the rights of next of kin, legatees, and others, to a mortgage, are to be determined by the law of the domicile of the mortgagee. But the right which an individual may claim to personal property in one country, under title from a person domiciled in an- other, can only be asserted by the legal instrumentalities which the institutions of the country where the claim is made have provided. The foreign law furnishes the rule of decision as to the vahdity of the title to the thing claimed ; but in respect to the legal assertion of that title, it has no extraterritorial force. As a result of this doctrine, it is now generally held everywhere, and it is well settled in this State, that an executor or administrator appointed in another State has not, ' Stuyvesant v. Hall, 2 Barb. Ch. 151 ; ^ Heermans v. Clarkson, 64 N. Y. 171 ; Douglass V. Satterlee, 11 Johns. 16 ; Mur- Olcott v. Heermans, 3 Hun, 431. ray v. Blatchford, i Wend. 583 ; Wheeler * Baldwin v. Crary, 30 Hun, 422. V. Wheeler, 9 Cow. 34 ; Bogert v. Her- ' Board of Supervisors of Tompkins tell, 4 Hill, 492 ; People v. Miner, 37 Co. v. Bristol, gg N. Y. 316. Barb. 466 ; 23 How. 223, rev'g s. c. 32 ^ See articles in 34 Alb. L. J. 263, 286, Barb. 612 ; Weir v. Mosher, 19 Wis. 311. 'Story's Confl. of Laws, §§ 376, 380, ' Hill on Trusts and Trustees (3d Am. 383 ; 2 Kent's Cora. 428, 429 ; Holmes v. ed.) 442 ; Lewin on Trusts and Trustees, Remsen, 4 Johns. Ch. 460 ; Shultz v. 284; The People v. Keyser, 28 M. Y. Pulver, 3 Paige, 182; s. c. 11 Wend. 228 ; The People v. Sigel, 46 How. 151. 363 ; Vroom v. Van Home, lo Paige,S49, 248 MORTGAGES OP REAL PROPERTY. ; [§§ 352-353. »s such, any authority beyond the sovereignty by virtue of whose laws he was appointed.' But if residents of this State have in their possession property which belongs to a party domiciled abroad, or are indebted to him, they may recognize any valid title claimed under him arising out of any act m pais, by testament or by succession upon intestacy, and may voluntarily deliver over the property or make payment of the debt. In Vroom v. Van Home (10 Paige, 549), Chancellor Walwoeth stated that the result of the cases in this State seemed to be that a foreign administrator appointed by the proper tribunal of the decedent's domicile, was authorized to take charge of the property here, and to receive debts due to the decedent in this State, where there was no conflicting grant of letters here, and it could be done without suit.'' § 352. {Continued^ — An executor or administrator of a deceased non-resident mortgagee, appointed by the proper jurisdiction in the place of domicile of the mortgagee, may receive payment of the mortgage, though our courts will not aid him in compelling payment. He may even foreclose the mortgage by advertisement in this State, that being a matter of contract and not of jurisdiction," and his as- signee may foreclose by action, the disability to sue being personal, and not an infirmity inhering in the subject of the action,'' but he cannot himself be heard in our courts vrithout having quahfied under our laws. If there be a conflict between a foreign executor or ad- ministrator and one appointed in this State, the authority of the domestic executor or administrator to receive payment of debts and to discharge mortgages is exclusive, and a satisfaction of a mortgage by a foreign executor or administrator is no defense to an action by the domestic executor or administrator to foreclose." § 353. An assignee of a mortgage, who holds it as security. — When a mortgage is assigned as security, the assignee may foreclose xnd hold the fund over and above his debt in trust for the assignor,' ' Denio, J., in Parsons v. Lyman, 20 ^ Doolittle v. Lewis, 7 Johns. Ch. 45 ; N. Y. 112 ; Morrell v. Dickey, i Johns. Averill v. Taylor, 5 How. 476 ; s. c. i Ch. 153; Doolittle V. Lewis, 7 Johns. Ch. Code R. N. S. 213. 45 ; Vroom v. Van Home, 10 Paige, ■* Peterson v. Chemical Bank, 29 How. 549. 240 ; s. c. 32 N. Y. 21 ; Smith v. Tiffany, ' Parsons v. Lyman, 20 N. Y. 115 ; 16 Hun, 552. Trecothickv. Austin, 4 Mason, 33; Will- ' Stone v. Scripture, 4 Lans. 186. iams V. Storrs, 6 Johns. Ch. 353 ; Doc- 'Slee v. Manhattan Co., i Paige, 48 ; little V. Lewis, 7 Johns. Ch. 45. Norton v, Warner, 3 Edw. 106. § 354.] PAYMENT AND DI8CHAEGE. 249 and, since he may compel payment, he may lawfully receive it and give a sufScient acquittance and discharge. § 354. Possession of the bond is in some cases evidence of an authority to collect. — Payment may as well be made to an agent of the mortgagee as to the mortgagee personally. Possession of the mortgage, and particularly of the bond, as representing the debt, has been thought to be evidence of authority to receive payment of in- terest and even of principal.' Payments made in good faith to the son of the mortgagee in possession of the papers are valid, but the presumption of authority in the son to receive payments ceases on the death of his father.' "Where money has been invested through an attorney, who is allowed to retain possession of the bond and mort- gage, these facts together justify the mortgagor in assuming that the attorney is authorized to make collections both of principal and inter- est, and to collect the principal in one sum or in instalments. In order to afEord a perfect protection to the mortgagor, however, he should take the precaution to require the production of the bond at the time of each payment, and the indorsement thereon of the pay- ments as made. The withdrawal of the bond by the mortgagee will work a revocation of the imphed authority.' On the same principle, the possession of the bond by a legatee, entitled under i will to the interest for life, is evidence of an authority to collect such interest ; though, if the principal be not due, it does not authorize a collection of the principal.* It is incumbent on a debtor who makes a payment to an attorney to show that the securities were in the attorney's pos- session on each occasion when the payments were made, and it is not incumbent on the creditor to show notice to the debtor of the with- drawal of the papers from the possession of the attorney." An attorney with whom a bond and mortgage is intrusted " to be foreclosed,"- is noifc authorized to receive notes for its payment, pay- ' Van Keuren v. Corkins, 4 Hun, izg, loi ; Smith v. Kidd, 68 N. Y. 130, 137 ; affi'd 66 N. Y. 77. Doubleday v. Kress, 50 N. Y. 410 ; Henn ' Megary v. Funtis, 5 Sandf. 97. v. Coninsby, i Ch. Cas. 93 ; Haines v. ^ Williams v. Walker, 2 Sandf. Ch. Pahlman, 25 N. J. Eq. 179 ; Stiger v. 325 ; Hatfield V. Reynolds, 34 Barb. 612 ; Bent, iii III. 328. Brown v. Blydenburgh, 7 N. Y. (3 Seld.) ^ Giddings v. Seward, 16 N. Y. (2 Smith) 141; Story on Agency, § 104 ; Whitlock 365. V. Waltham, i Salk. 157 ; River Clyde ' Smith v. Kidd, 68 N. Y. 130 ; Brew- Trustees V. Duncan, 25 Eng. L. & Eq. ster v. Games, Ct. of App. Dec. 7, 1886; 19 ; Owen v, Barrow, 4 Bos. & Pull. 35 Alb. L. J. 95 ; probably in 103 N. Y. 250 MOETG-AaES OF REAL PROPERTY. [§ 355. able at a future day, nor is he authorized to extend the time of pay- ment.' A written power of attt)mey authorizing an attorney in fact to sat- isfy mortgages, does not authorize him to execute a certificate of discharge without receiving payment of the debt.' A person who deals with an agent is bound to know the extent of his agency, and a mortgagor who pays interest or principal to any one but the mortgagee does so at his peril, and must be prepared to prove the authority of the agent to whom the payment is made. This is peculiarly the case when payments of principal are made before ma- turity to an attorney whose only authority is to receive interest.' § 355. Bond should be produced and surrendered on payment in full.— When an obligor has discharged his bond, he is entitled .to have it given up and cancelled. Neither the obligee nor any other person is entitled to retain it for their convenience without his assent. A third person discharging a bond and mortgage, for his own safety, may demand possession of the bond and mortgage, and when the maker discharges them he is entitled to have the instruments cancelled.* Payment to a mortgagee after the mortgage has been assigned by him, will be good if the mortgagor have no notice of the assign- ment ; ' but if the payment be of the whole amount owing upon the mortgage, and the bond is not produced by the mortgagee, this is sufficient to put the mortgagor upon inquiry, and unexplained, to render him chargeable with knowledge of the fraud." If payment is made to the mortgagee of only a portion of the amount due, the production of the bond need not be required. The possession of the securities is an important circumstance where the payment is made to the agent or attorney ; but it is by no means con- trolHng when they are made to the mortgagee. In such a case a fail- ure to produce the bond and mortgage is insufficient as a matter of law to put the mortgagor upon inquiry.' Where a rnortgagee turned over to his wife a mortgage and note in satisfaction of claims held by her against him, and afterward formally ' Heyman v. Beringer, i Abb. N. Cas. Y. 77 ; Harman v, Ellsworth, 64 N. Y. 315. 159- * Hutchins, Adm'r, v. Clark, 64 Cal. " Brown v. Blydenburgh, 7 N. Y. (3 228. Seld.) 141 ; Emery v. Gordon, 33 N. J. " Crane v, Evans, i N. Y, St. Repr. 216; Eq. 447. 24 W. Dig. 163, aflS'g 2 How. N. S. 310. ' Van Keuren v. Corkins, 66 N. Y. 77, * Matter of Coster, 2 Johns. Ch. 503. 80, affi'g s. c. 4 Hun, 129 ; Foster v. 'Van Keuren V. Corkins, 6 N. Y. Sup. Heals, 2i N. Y. 247; contra, Clark v. (T. & C.) 355 ; 4 Hun, 129, aiB'd 66 N. Igelstrom, 51 How. 407. § 356.] PAYMENT ANB DISCHAEaE. 251 assigned the same without delivery to a third person, the mortgagor who made payment to the wife was protected.' Possession of the bond may be necessary to a recovery upon the mortgage. Where a bond is recited in the mortgage, the non-pro- duction of the bond on the trial in an action to foreclose, is evidence of a discharge of the mortgage debt, and, if unexplained, is conclusive against plaiatiff's right to recover.' § 356. Where payment should be made. — If no place is ap- pointed, either in the bond or mortgage, at which the principal or interest is to be paid, the debtor is bound to seek the creditor, to make the payment, not the creditor to seek the debtor to receive pay- ment ; no demand is necessary before bringing suit.' But this rule is subject to the exception, that if the creditor is out of the State when payment is to be made, the debtor is not obliged to follow him, and readiness to pay within the State will, in that case, be as effectual as actual payment to save a forfeiture. It may, per- haps, be that, although a creditor is absent from the State when a payment is due, if he has a house therein, where he resides, it is the duty of the debtor to tender the money there, or otherwise his obli- gation is not discharged. However this may be as a general rule, no such duty rests upon a mortgagor, and he is not obliged to part with his money to a third person without satisfactory evidence of his au- thority. If the mortgagee desires that the interest should be paid to any agent of his within the State, he should notify the mortgagor that such agent is entitled to receive it, and, if he leaves the State without doing so, the mortgagor is not obliged to tender the money at his residence, and failure to do so will not operate to make a mort- gage due under a default clause.' So, where a mortgagee removed from the State and went to Eu- rope, without informing the mortgagor who was authorized to receive the interest and instalments as they became due ; and the first infor- mation the mortgagor had of the authority of any person to act for the mortgagee, was the service of papers in an action to foreclose, whereupon he made a tender of the principal and interest to the at- torney, which was refused ; it was held that this was a sufficient ten- der, and that the lien of the mortgage was thereby extinguished.^ ' Harscig v. Brown, 34 Mich. 503. ■• Hale v. Patton, 60 N. Y. 233 ; Task- ' Bergen v. Urbahn, 83 N. Y. 49. er v. Bartlett, 5 Cush. 359. ' Harris v. Mulock, 9 How. 402 ; Smith ' Houbie v. Volkening, 49 How. V. Smith, 25 Wend. 405. 169. 252 MOETGAGES OP HEAL PBOPERTT. [§§ 357-359. § 357. Where the discharge of a recorded mortgage is exe- cuted by a person other than the mortgagee, a subsequent in- cumbrancer is bound to inquire by what authority such person as- sumed to discharge it, and is chargeable with notice of all the facts which the reasonable prosecution of such inquiry would elicit. Thus, where a general guardian of infants, appointed by an order of the Court of Chancery, specially authorizing a release " upon receiving a bond and mortgage " upon other property, executed a release without receiving the bond and mortgage, it was held to be void even as to honafide purchasers.' § 358. Remedy against person unlawfully cancelling lien. — In the absence of notice of the assignment of the mortgage, the mort- gagor may lawfully pay the money secured by it, to the mortgagee, or may negotiate with him for a release or cancellation of the hen.* But it does not follow that a mortgagee who has transferred the security may honestly deal with it. Such deahng, as between him and his assignee, is a fraud on his part, and he wiU hold the money received as a trustee, and will be hable for the damage occasioned by his release. The measure of damages in an action for unlawfully ex- ecuting a release is not Umited to the deficiency after an application of the remaining security, but is the value of the portion released, not exceeding the debt.' § 359. Payment to an administrator of the mortgagee, duly ap- pointed after regular proof of death has been held to be valid, even as against the mortgagee himself, who was supposed to be dead when the letters of administration were issued ;* but if such letters were issued by a clerk in the surrogate's office without due judicial inquiry into the fact of death, they are void, and a person paying on the faith of them will not be protected against the living creditor.* To bind a living man to be dead by force of a judgment, all proceedings leading up to that judgment must be entirely regular. ' Swartwout v. Curtis, 5 N. Y. (i Seld.) » Stebbins v. Howell, 4 Abb. Ct. of 301 ; The Farmers' Loan & Trust Co. v. App. Dec. 297 ; Ferris v. Hendrickson, Walworth, i N. Y. (i Comst.) 433 ; Wat- i Edw. Ch. 132 ; Fox v. Wray, 56 Ind. erman v Webster, 33 Hun, 611. 423. * Van Keuren v. Corkins, 66 N. Y. 77, "Roderigas v. East River Savings affi'g 4 Hun, I2g ; 6 T. & C. 355 ; Heer- Inst'n, 63 N. Y. 460 ; 20 Am. R. 555. man v. Ellsworth, 64 N. Y. 159; Het- 'Roderigas v. East River Savings zell V. Barber, 6 Hun, 534 ; Wanzer v. Inst'n, 43 N. Y. Supr. (11 J. & S.) 217, Gary, 12 Hun, 403. affi'd 76 N. Y. 316 ; 32 Am. R. 309. §§ 360-361. J PAYMENT AND D18CHAEGE. 253 APPLICATION OF PAYMENTS. § 360. Application by the parties. — The payment by the mort- gagor to the mortgagee of a sum of money will not operate to reduce the amount due on the mortgage until it has been actually applied toward such reduction.' The right to make such application rests in the first instance with the person making the payment," and, if he makes no such application, it may be made by the mortgagee.^ A mortgagee is not bound to apply on the mortgage money re- ceived from the mortgagor, if he has other occasions to use or apply it ; nor would he have any right to apply it on the mortgage before its maturity.' This right of application continues in the mortgagor and mortgagee until some new right intervenes, but when a junior lien attaches on the property either by judgment or mortgage, the owner of such lien has the right to have any indebtedness which may exist from the mortgagee to the mortgagor applied in extinguishment of the mort- gage debt ; and this right of the junior incumbrancer is absolute, and in general is not subject to be defeated by the parties to the mort- gage, unless there are equities in favor of the mortgagee, which should operate to defeat the application of the rule.' § 361. As between secured and unsecured claims. — If one debt be a mortgage debt and the other a simple account, it has been said that, in the absence of an application by either party or of evidence showing a contrary intention or establishing a different equity, the law will apply the money to the mortgage debt in preference, on the ground that it will be more for the interest of the debtor to have this debt discharged.' But this rule will not be adhered to in special ' Simson v. Ingham, 2 Barn. & C. 65 ; * Richardson v. Coddington, 49 Mich.i. Gary v. Bancroft, 14 Pick. (Mass.) 315 ; ' Prouty v. Price, 50 Barb. 344 ; Rose- Doody V. Pierce, 9 Allen (Mass.) 141. velt v. Bank of Niagara, Hopk. 579, ' N. Y. Ins. Co. V. Howard, 2 Sand, affi'd 9 Cow. 409. ' Ch. 183 ; Vick v. Smith, 83 N. C. 80; "Pattison v. Hall, 9 Cow. 747, 765 ; Bean v. Brown, 54 N. H. 395 ; Libby v. Dows v. Morewood, 10 Barb. 183 ; Hopkins, 104 U. S. 303. Prouty v. Eaton, 41 Barb. 409; Windsor * Campbell v. Vedder, i Abb. App. v. Kennedy, 52 Miss. 164 ; Neal v. AUi- Dec. 295; 3 Keyes, 174; Sheppard v. son, 50 Miss. 175; McLaughlin v. Green, Steele, 43 N. Y. 52, 60 ; Feldman v. 48 Miss. 205 ; Vick v. Smith, 83 N. C. Beier, 78 N. Y. 293 ; Cremer v. Higgin- 80 ; Johnson v. Anderson, 30 Ark. 745 ; son, I Mason, 338; Mayor, etc., of Alex- Forstall v. Blanchard, 12 La. An. i. andriav. Patten, 4 Cranch, 317. 254 MOETGAGES OF EEAL PROPERTY. [§ 362. cases where equity requires that the application should be made on the secured debt.' Where a mortgage given by a principal to his factor to secure an existing debt, provided that it might be extended to future advances, and should remain as a continuing security up to a stipulated sum ; and advances were made by the factor to an amount exceeding the stipulated sum secured by the mortgage,, and consignments of goods were sent to the factor, the proceeds of which were credited to the principal in a general account, it was held that, in the absence of ap- plication by the parties, the credits were to be applied first to that part of the debt not secured by mortgage, and to the mortgage debt thereafter." § 362. Where no specific application is made by the parties of payments upon a running account, they will be applied in equity to the first items of indebtedness, although the creditor may hold security for the payment of those items and none for the balance.' Where a mortgage is given to secure a balance of an account, and, thereafter, other transactions are had between the parties, the ques- tion as to whether the mortgage is paid depends upon the intention of the parties, and is to be disposed of as a question of fact upon all of the circumstances of the case.* A payment will be applied on a demand for which the person making it is personally bound in the first instance, rather than upon one for which he or his estate stand as surety." Money received by the mortgagee from the sale of a portion of the mortgaged estate," or as the price for a release of a portion of it,' must be applied by him to a reduction of the mortgage debt in preference to an unsecured claim. But if several notes are secured by the same mortgage, the mortgagee may apply the proceeds of a portion of the estate to such notes as he sees fit, as, for instance, to one unsecured by indorsement rather than to one which is thus secured.' Payments made on the mortgage are first to be applied to any inter- est which may be due, and the balance is to be credited on principal.' ' Griswold v. Onondaga Co. Sav. Bk., * Snyder v. Robinson, 35 Ind. 311. 93 N. Y. 301, 306. * Webster v. Singley, 53 Ala. 208 ; 25 'Johnson's Appeal, 37 Penn. St. 268. Am. R. 609. 'Truscott V. King, 6 N. Y. {2 Seld.) ' Hicks v. Bingham, 11 Mass. 300. 147; Crocker v. Whitney, 71 N. Y. 161. ° Matthews v. Switzler, 46 Mo. 301. * Peck V. Minot^ 3. Abb. App. Dec. "Davis v. Fargo, Clarke Ch. 470; 465 ; 4 Robt. 323. Chase v. Box, Freem. Ch. 261. § 363. J DISCBCAEGE BY MEEGEE. 255 Payment of a collateral Becurity is ordinarily a payment on the principal debt.' UISCHABGE BY MEBGEE. § 363. When a mortgage will be discharged under the doc- trine of merger. — ^When the rights of the mortgagee and of the owner of the equity of redemption become vested in the same person, the lien is said to be merged in the title, and thereby to become de- Btroyed." On the same principle, where the person equitably bound to pay a mortgage and to relieve the land from its payment, becomes the owner by assignment of the mortgage debt, it becomes thereby satisfied and paid.' This is so, even if the assignment be taken in the name of a third person.* So, where a husband and wife executed a mortgage on the hus- band's land for his debt, and a mortgage on the vsdf e's land as collateral to it ; and the mortgagee bought the husband's equity of redemption in the land, it was held that the wife's land was discharged, the price allowed for the husband's land being greater than the mortgage debt.' So, also, a party holding a life estate in mortgaged premises is . bound to i^y the interest on the mortgage during the continuance of his estate, and if he becomes the assignee of the mortgage, the inter- est accruing while both titles are united in him cannot afterward be collected under the mortgage lien.' AgaiQ, where a senior mortgagee received a conveyance of the mortgaged premises and assumed the payment of a junior mortgage, his own mortgage was held to be merged and discharged, so that the junior mortgage took precedence.' When the owner of an equity of redemption pays off the mortgage and takes an assignment of it to himself, it becomes merged in the legal title and is extinguished, unless it appears that there is some beneficial interest in keeping it distinct." And where the mortgaged ' Prouty V. Eaton, 41 Barb. 409. ' Wheelwright v. Depeyster, 4 Edw. ' Gardner v. Astor, 3 Johns. Ch. 53 ; 232 ; Ward v. Price, 12 N. J. Eq. 8 Am. Dec. 465 ; Collins v. Terry, 7 543. Johns. 278. * Sheldon v. Ferris, 45 Barb. 124. ' Mickles v. Townsend, 18 N. Y. (4 ' Fowler v. Fay, 62 111. 375 ; Knee- Smith) 575 ; Russell v. Pistor, 7 N. Y. land v. Moore, 138 Mass. 198 ; Wads- (3 Seld.) 171 ; Putnam v. Collamore, 120 worth v. Williams, 100 Mass. 126 ; Carl- Mass. 454 ; Kilborn v. Robbins, 8 Allen, ton v. Jackson, 121 Mass. 592 ; McCabe 466 ; Fairchild v. Lynch, 46 Supr. (14 J. v. Swap, 14 Allen, 188. & S.) I. " Gardner v. Astor, 3 Johns. Ch. 53 ; * Fitch V. Cotheal, 2 Sandf. Ch. 29. 8 Am. Dec. 465. 256 MOETGAaES OF BEAL PEOPEETY. [§ 364. land and the mortgage both vest in the same person, the mortgage debt cannot thereafter be enforced against the mortgagor,' though the land be at that time of less value than the amount of the debt.^ Where a sherifE on selling land upon execution announced that the sale was made subject to a prior lien, and the bidders so understood it, and the holder of the Uen purchased, this was held to extinguish both his hen and his remedy on the note secured by it.' This is par- ticularly so if the holder of the junior lien after purchasing, mort- gages or conveys the property.* In this State an assignment of a mortgage may be compelled where payment is made by a person not equitably holden to make such pay- ment, and an assignment is necessary for his protection.^ If the person asking for such assignment is the mortgagor who has con- veyed the property, or there is some intervening incumbrance, or there is any reason why the appearance of merger should be avoided, the assignment may be required to be made to a person nominated by him." § 364. The doctrine of merger as applied to mortgages is founded upon equitable principles, and is only apphed where equity requires that it should be. Whether a transaction shall be held in legal eHect to operate as a payment and discharge, which extinguishes the mortgage, or as an assignment, which preserves and keeps it on foot, does not so much depend upon the form of words used as upon the relation subsisting between the party advancing the money, and the party executing the transfer or release, and their relative duties. If the money is advanced by one whose duty it is, by contract or otherwise, to pay and cancel the mortgage, and relieve the mortgaged premises of the lien, a duty in the performance of which others have an interest, it is held to be a release and not an assignment, although in form it purports to be an assignment. When no such controlling obligation or duty exists, such an assignment is held to be an extin- guishment or assignment according to the intent of the parties, and their respective interests in the subject have a strong bearing on the question of intent.' ' Lilly V. Palmer, 51 111. 331. 538 ; Madaris v. Edwards, 32 Kans. ' Dickason v. Williams, 129 Mass. 284. 182 ; Longfellow v. Moore, 102 III. 289. * Pardee v. Van Auken, 3 Barb. 534 ; ' Biggins V. Brockman, 63 111. 316 ; Frost v. Yonkers Savings Bank, 70 N. Murphy v. Elliott, 6 Blackf. (Ind.) 482 ; Y. 553. Speer v. Whitfield, 10 N. J. Eq. 109. * Johnson v. Zink, 52 Barb. 396, affi'd * Thomas v. Simmons, 103 Ind. 51 N. Y. 333. 'Shaw, C. J., in Brown v. Lapham, § 365.] DISCHAKGE BY MEEGEE. 257 The general rale is, that where the title to the land and the owner- 1 ship of the mortgage debt become vested in the same person, the mortgage is thereby merged and extinguished ; but if the owner of the legal and the equitable titles has an interest in keeping those titles distinct, as, for instance, where there is an intermediate incumbrance,' he has a right so to keep them, and the mortgage will not be extin- guished.'' So, too, if the mortgage be assigned to the owner of the equity of redemption, in order to keep it alive with a view of a sub- sequent assignment, no merger will take place. The merger of a mortgage in the fee will not take place unless the intent of the par- ties, or the equitable rights of innocent third persons, require that it shall merge.' There can be no merger unless the title of the mortgaged estate has voluntarily been accepted by the mortgagee." § 365. A merger will not be adjudged for the benefit of an intervening incumbrance, even where the mortgaged premises are conveyed by the mortgagor to the mortgagee for the express purpose of satisfying the mortgage debt, and avoiding the expenses of a fore- closure.' So, the assignee of a mortgage may, after acquiring the equity of redemption under a deed, executed by the mortgagor, but not by his 3 Cush. 557 ; Franklin v. Hayward, 6i Boner, 38 Barb. 425 ; Day v. Mooney, How. 43 ; McGiven v. Wheelock, 7 4 Hun, 134 ; Judd v. Seekins, 62 N. Y. Barb. 22. 266 ; Rawiszer v. Hamilton, 51 How. ' Mulford V. Peterson, 35 N. J. L. 127; 297 ; Smith v. Roberts, 91 N. Y. 470 ; Campbell v. Vedder, i Abb. App. Dec. Bostwick v. Frankfield, 74 N. Y. 207 ; 295 ; Stantons v, Thompson, 49 N. H. Payne v. Wilson, 74 N. Y. 348 ; Bi^yar's 272 ; Millspaugh v. McBride, 7 Paige, Appeal, iii Pa. St. 81 ; Moore v. Har- 509 ; McKinsfry v. Merwin, 3 Johns, risburg Bank, 8 Watts, 138. Ch. 466 ; Besser v. Hawthorn, 3 Oreg. * Andrus v. Vreeland, 29 N. J. Eq. 129. 394. ^ Lord V. Lane, 8 Mete. 517. ^ Brooks v. Rice, 56 Cal. 428 ; Cohn ' James v. Morey, 2 Cow. 246 ; Mills- v. Hoffman, 45 Ark. 376 ; Duffy v. Mc- paugh V. McBride, 7 Paige, 509 ; Skeel Guinness, 13 R. L 595 ; Lockwood v. V. Spraker, 8 Paige, 182 ; White v. Sturdevant, 6 Conn. 387 ; Bell v. Tenny, Knapp, 8 Paige, 173 ; James y. John- 29 Ohio St. 240 ; Mulford v. Peterson, son, 6 Johns. Ch. 417 ; Spencer v. Ay- 35 N. J. L. 127 ; Stantons v. Thompson, rault, 10 N. Y, (6 Seld.) 202 ; Day v. 49 N. H. 272 ; Besser v. Hawthorn, 3 Mooney, 4 Hun, 134 ; Clift v. White, 12 Oreg. 129 ; Hunt v. Hunt, 14 Pick. 384 ; N. Y. (2 Kern.) 519 ; Mickles v. Town- Evans v. Kimball, i Allen (Mass.) 240 ; send, 18 N. Y. 582 ; Champney v. Coope, Lord v. Lane, 8 Mete. 517 ; Campbell v. 32 N. Y. 543, rev'g s. c. 34 Barb. 539 ; Vedder, i Abb. App. Dec. 295 ; Mills- Bascom v. Smith, 34 N. Y. 320 ; Shel- paugh v. McBride, 7 Paige, 509 ; Mc- don V Edwards, 35 N. Y. 279 ; Angel v. Kinstry v. Merwin, 3 Johns. Ch. 466. 17 258 MOETGAGES OF REAL PEOPEETT. [§ 366. ■wife, hold a mortgage executed by both as a part of his title to pro- tect himself against a claim of the wife to dower." Where an infant had an inchoate right of dower in an equity of redemption, and joined with her husband in conveying the land, and afterward claimed dower, it was held that the prior mortgage had not become merged by an assignment thereof to the owner of the equity, and that the plaintiff must take dower subject to the mortgage.^ And a mortgage of land attached since the making of the mortgage will not, on being assigned to a purchaser of the equity, merge in the equity so as to give the attaching creditor a preference.' When the union of the legal and equitable estates ia the same per- son has taken place, and there is no equitable right to be preserved by keeping them distinct, the mortgage will be extinguished, and cannot thereafter be revived by the mortgagor for the purpose of overturning a lien subsequent to the date of the mortgage ;' but, on the other hand, where the mortgaged premises are purchased by the mortgagee, and he cancels the mortgage as part of the purchase price, the mortgage will still be enforced in his favor as against the claims of judgment creditors who became such subsequent to the execution of the mortgage.' § 366. Merger controlled by estoppel. — A person who has ac- quired both the mortgage Hen and the title, is, until he has made a disposition of the property, and until some other person has acquired an interest, at perfect liberty to consider the mortgage merged or not, as may be most beneficial." The owner of land who treats a mortgage on the same which has been transferred to him as a valid instrument, and transfers it as such, is estopped from insisting as against the assignee or any one claiming under him that, in his hands, it has merged or disappeared in the fee ;' and a purchaser from such owner after the recording of the as- signment by the latter, stands in no better position than his grantor.' On a like principle, a mortgagee who sells land upon which he holds ' New Jersey Ins. Co. v. Meeker, 40 ' Warner v. Blakeman, 36 Barb. 501 ; N. J. L. 18 ; Snyder v. Snyder, 6 Mich. s. c. affi'd 4 Keyes, 487. 470 ; Strong v. Converse, 90 Mass. (8 ' James v. Morey, 2 Cow. 246 ; Smith Allen) 557. V. Roberts, gi N. Y. 470, 476. '' De Lisle v. Herbs, 25 Hun, 485. ' Goodwin v. Keney, 47 Conn. 486. ' Grover v; Thatcher, 70 Mass. (4 Gray) * Kellogg v. Ames, 41 N. Y. 259, rev'g 526. 41 Barb. 218 ; Skeel v. Spraker, 8 Paige, ^ Moore V. Hamilton, 48 Barb. 120. 182; Powell v. Smith, 30 Mich. 451; Graves v. Rogers, 59 N. H. 452. § 367.] DISCHARGE BY MERGER. 259 a mortgage, for a full consideration, and represents it to be clear of incumbrance, will be estopped from thereafter enforcing tbe mort- gage against tbe purchaser or his grantees.' § 367. A merger can only occur where the entire property liable to pay the debt, and the whole debt, are both owned by the same person ; and it cannot exist where even a portion of the property so liable is owned by any other person than the owner of the mortgage.' Wlien a portion of the real estate upon which the mortgage is a lien is conveyed to the mortgagee, the question as to whether the mort- gage, or any part of it, is merged or satisjBed, will be one of intention. If the mortgagee on such purchase pays full value, without deduction for the mortgage or any part of it, and the real bargain is that the remainder of the estate in the hands of the grantor shall bear the whole debt, then the conveyance will operate as a release of the lien as to the property so conveyed, and the mortgage may still be en- forced as to the remainder.' But if the contract of sale imposes upon the grantee the obligation of paying the whole or any specified por- tion of the mortgage debt, equity will enforce such contract, and to the extent that justice may require, there wiU. be a merger. "Where the owner of a mortgage becomes devisee,* or heir,' as tenant in common of an undivided interest in the mortgaged land, the two estates do not become united so as to discharge any por- tion of the mortgage debt. So, where a tenant in common receives an assignment of a mortgage on the estate, he may hold and enforce it for the purpose of compelling contribution from his; co-tenant." Neither can a merger happen where the mortgagee acquires merely a defeasible title, as by becoming a purchaser at a sale under a judg- ment, the judgment creditor still retaining a right to redeem.' Where there was a bequest of the income of a mortgage to the widow of the testator, and of the principal, after her death, to the mortgagor, it was held that the debt was not extinguished, but was kept on foot for the purpose of paying the interest to the widow, and that she could maintain an action to foreclose the mortgage." ' Bulkley v. Hope, i Kay & J. 482. ' Thebaud v. HoUister, 37 N. J. Eq. * Skeel V. Spraker, 8 Paige, 182. 402. 5 Smith V. Roberts, 91 N. Y. 470, affi'g * Barker v. Flood, 103 Mass. 474 ; 62 How. ig6 ; Clift v. White, 12 N. Y. King v. McVickar, 3 Sandf. Ch. 192 ; (2 Kern.) 526 ; Klock v. Cronkhite, i Casey v. Buttolph, 12 Barb. 637. Hill, 107. 'Southworth v. Scofield, 51 N. Y. " Clark V. Clark, 56 N. H. 105 ; Sah- 513. ler V. Signer, 44 Barb. 606. " Hancock v. Hancock, 22 N. Y. 568. 260 MORTGAGES OP REAL PEOPEETY. [§§368-370. § 368. No merger unless the title and debt are in the same person at the same time. — An assignee of the mortgage, by the assignment, becomes the mortgagee, and the original mortgagee there- after has no estate left in the land, and if he afterward acquires the interest left in the mortgagor, he does not thereby obtain an estate which merges that of the assignee.' So, where mortgaged real estate is sold by the mortgagor, subject to the mortgage, and subsequently the mortgage is acquired by the mortgagor's executors, the mortgage still remains a valid incumbrance, and can be enforced against the land in the hands of the mortgagor's grantee." § 369. No merger when conveyance is set aside. — ^Where a mortgagor, holding the equity of redemption in trust, wrongfully conveyed the mortgaged premises to the mortgagee, with notice of the trust, giving him new security for his debt, and the cestui que trust set the conveyance aside, the mortgage was held not to merge in the conveyance, but to stand for the security of the mortgagee.' So, where a conveyance was made by a mortgagor to a mortgagee to defraud other creditors, which was set aside by a decree at their in- stance, the mortgage was not lost, and there was no merger.* § 370. Purchaser cannot rely on merger shown by the public records. — The case of Purdy v. Hwntvngton (42 IST. T. 334), is interesting as illustrating the danger to purchasers of relying upon a merger of the mortgage interest with the title as it appears upon the records. In "that case, the defendant purchased the land from one who, from the records, appeared to be the owner both of the mort- gage and of the title, for value and without notice of any defect in the title, but it happened that the mortgage was owned by a third person under an unrecorded assignment, whose claims were held to be valid. It is clear that the decision was correct outside of the recording acts. The court held that the conveyance, with full covenants of title to the land, did not amount to an assignment of the mortgage, and that if it did, since the conveyance was recorded among the deeds, it did not operate to protect the purchaser as an assignment of the mortgage. So, in Miller v. Li/iidsey (19 Hun, 207), a mortgage was made 1 Pratt V. Bank of Bennington, lo Vt. ' Corwin v. CoUett's Ex'rs, i6 Ohio St. 293 ; 33 Am. Dec, 201. 289. ^StiUmai) v. SliUman, 21 N..J. Eq, *• First National Bank v. Essex, 84 Ind. 126. 144. §§371-373.] DISCHARGE BY MEEGEE. 261 without any accompanyiag bond, and containing no covenant to pay the debt. The mortgage was recorded, and was sold and assigned by the mortgagee, but the assignment was not recorded. The grantee ot the property thereafter conveyed by warranty deed to plaintiff, who brought an action to have the mortgage declared cancelled. It was held on the authority of Purdy v. JSunlmigton {supra) that the mortgage was not merged or satisfied, but was in full force. The case was distinguished from one where there was a payment of the mortgage by the transfer of other real estate than that mortgaged, where it was held satisfied in all respects as if paid in cash.' § 371. Preventing merger by clause in conveyance or assign- ment. — Where the equity of redemption is conveyed to the mort- gagee with an express written ^.greement between the parties that the deed shall not operate as a merger of the mortgage except at the election of the mortgagee, equity will preserve the estates distinct and give full force to the bargain.^ A merger may therefore be pre- vented by a clause in the conveyance to the mortgagee or in the assign- ment of the mortgage.' § 372. No merger caused by marriage of mortgagor and mortgagee. — It was a general rule of the common law that where a man marries a woman to whom he is indebted, the debt was thereby re- leased. Thus, if the husband, being the obligor, took the obligee to wife, the bond was discharged at law, and the unity of persons dis- abled the wife from suing the husband. In this State, the Code and the acts of 1848 and 1849 have completely swept away the common- law rule which gave the husband rights in and control over the prop- erty of the wife, and now a wife may enforce a mortgage as against her husband." § 373. When the taking of a higher security will extinguish an inferior one. — The rule that security of a higher nature extin- guishes inferior securities, wUl be found to apply to the state or con- dition of the debt itself, and means no more than'this, that when an account is settled by a note, a note changed to a bond, or a judgment taken upon either, the debt as to its origiaal or inferior condition is extinguished or swallowed up in the higher security ; and that all the memorandums or securities by which such inferior condition was ' Wanzer v. Cary, I2 Hun, 403. * Bailey v. Richardson, 9 Hare, 734. ^ Spencer v. Ayrault, 10 N. Y. (6 Seld.) ' Power v. Lester, 23 N. Y. 527 aifi'g 202. ' s. c. V How. 413, 262 MORTGAGES OF REAL PROPERTY. [§§374-375, evidenced lose their vitality. It has never been applied to the extin- guishment of distinct collateral securities, whether superior or inferior in degree. These are to be cancelled by satisfaction of the debt or voluntary surrender alone.' So, where a note secured by a mortgage on certain personal property was given, and subsequently a bond and warrant of attorney for the amount of the note was also given, upon which judgment was entered and execution was issued, it being agreed between the parties that judgment should be taken as col- lateral to the mortgage, this was held not to operate as an extinguish- ment or discharge of the mortgage lien.' § 374. Debt remains though new obligation be given. — The same rule was applied where a mortgagee of chattels surrendered the original note, and took a new note and new mortgage on the same property, and it was held that he did not thereby extinguish the lien of the prior mortgage.' So, where the holder of a bond and mort- gage of real estate paid taxes and assessments on the mortgaged prem- ises, and took a fresh bond and mortgage on the same property for the amount of such payment from the grantee of the mortgagor, this was held not to extinguish his right to add the amount paid by him to the first mortgage and hold the mortgagor for the deficiency. The taking of the fresh bond and mortgage was not per se a discharge. It was not taking security of a higher nature for the same demand, BO as to extinguish the former, but the superadding of the personal liability of the owner of the equity of redemption was rendering the one collateral to the other, and not substitutional.* A mortgage given as collateral to a promissory note will not extin- guish it, although it contain a proviso against personal responsibility on the mortgage ;* and, on the same principle, a sealed mortgage of a chattel is nof an extinguishment of the debt,° § 375. New mortgage without bond may discharge debt. — Whenever a mortgage under seal is taken as security for a pre-exist- ing debt not evidenced by a sealed instrument, the mortgage is, in a sense, a higher security, but the taking of it will not discharge the debtor from his original obligation, unless that be the intention of the parties. But if the original indebtedness is intended to be discharged, ' Per Johnson, J., in Butler v. Miller, * Eagle Ins. Co. v. Pell, 2 Edw. 631 ; I N. Y. (i Comst.) 496, 500. Young v. Guy, 12 Hun, 325. ^ Butler V. Miller, I N.Y.(i Comst.) 496. °Ainslie v. Wilson, 7 Cow. 662; ^ Hill V. Beebe, 13 N. Y. (3 Kern.) Phelps v. Johnson, 8 Johns. 54. 556 ; Gregory v. Thomas, 20 Wend. 17. 'Sterling v. Rogers, 25 Wend. 658. §§376-377.] DISCHARGE BY MEEGEK. 263 and a mere mortgage is taken to secure the amount without any ex- press covenant to pay the same, and no bond or separate instrument is given to secure such payment, the mortgagee will be without any remedy against the mortgagor personally. The form of such a trans- action would not conclusively estabUsh an intent to release the mor<> gagor, but it would operate as evidence of such an intent.' A mechanic's lien on real property is waived by taking a mortgage on the same property for the amount of the lien.'' § 376. New obligation or security may discharge if so agreed. — A promise to perform a promise which has already been made upon sufficient consideration, does not operate to release or extinguish the original obligation, and it is too well settled in this State to admit of a doubt, that the taking of a debtor's note does not merge or ex- tinguish the demand for which it is taken, even though it be expressly agreed to take the note in satisfaction.' A reason for this rule is found in the fact that a promise to release the original obligation would in such a case be without consideration. If it is agreed to take the note of a third person, or the indorsement of a third person in payment of the original debt, or if any advantage is gained by the creditor on his promise to release the primary obligation, there is no reason to believe that such an agreement would be without force. So, where the negotiable promissory notes of a mortgagor, bearing inter- est, were given and received as payment of an instalment of interest due upon the mortgage, this was held to be payment, though the notes were not paid.* § 377. No merger in a void security.— A bond is a higher secu- rity than a note, because the law impresses upon it a more conclusive character, and a judgment is higher than either of them for the same reason. But, properly considered, neither the note, the bond, nor the record of judgment are delts. They are severally evidences of debt, and the debt itself exists as a legal proposition depending upon facts shown in whole or part by such evidence. If the creditor is armed with the better evidence, he is not allowed to use the poorer ; and this is almost the entire extent of the doctrine. If, therefore, the new security or evidence is defectively executed, so as not to operate ' Hone V. Fisher, 2 Barb. Ch. 559. 19 Wend. 516 ; Frisbie v. Lamed, 21 Id. " TruUinger V. Kolford, 7 Oreg. 228; 450, 452; Hill v. Beebe, 13 N. Y. (3 33 Am. R. 708. Kern ) 556 ; Richardson v. Wright, 58 Vt. » Cole V. Sackett, i Hill, 516 ; Waydell 367. V. Luer, 5 Id. 448 ; Hawley v. Foote, ■'Rice v. Dewey, 54 Barb. 455. 264 MOETGAGES OF EEAL PEOPEETT. [§ 378. as evidence at all ;' or if it is the evidence of a contract which is Tisurious, and is for that reason void, it cannot displace or extinguish the original debt." Upon the same reasoning, although a mortgage is extinguished by the entry of a judgment of foreclosure and sale, it can only be extinguished by a valid judgment, and it is of fuU force when the judgment has been set aside as irregular.^. So, the cancel- lation of the judgment without payment of the mortgage, as, for example, by consent of the parties, would not impair the validity of the mortgage, but would only operate to destroy an evidence of the validity of the lien which the obtaining of the judgment had furnished. § 378. Payment of collateral security in general cancels debt. — "While the giving of new or collateral security for a debt secured by a mortgage does not discharge the lien, the payment of such col- lateral 'security will always extinguish it, except in cases where the preservation of the lien is an equitable right of the person who makes the payment. Thus, where two persons executed a mortgage, and one of them afterward assumed the debt and gave other security for it, the payment of that security was held to satisfy the mortgage.* The proper test in all cases, is as to whether the person who paid the debt is the one who ought equitably to pay it. If he is only second- arily liable, then he is entitled to be subrogated to the rights of the mortgagee for his own indemnity.' If it shall appear by a matter of public record that a security taken as collateral to a mortgage debt has been paid, purchasers of the mort- gaged estate have a right to rely upon this as a satisfaction and dis- charge of the mortgage. So, where a judgment was recovered on a bond secured by a mortgage, and an execution was issued thereon, upon whfch other lands were sold, and the execution was returned satisfied, and the judgment cancelled, a purchaser for value who took title while these facts appeared upon the records, and who went into possession, was held to have acquired a perfect title, and it was de- termined to be inadmissible to inquire, as against him, as to whether ' Burger v. Hughes, 5 Hun, 180. * Russell v. Pistor, 7 N. Y. (3 Seld.) ^ Crippen V. Heermance, 9 Paige, 211; 171; Klock v. Cronkhite, i Hill, 107; Patterson v. Birdsall, 64 N. Y. 294. Tice v. Annin, 2 Johns. Ch. 125; Barnes * Stackpole v. Robbins, 47 Barb. 212 ; v. Mott, 64 N. Y. 402; Cole v. Malcolm, see Salmon v. Allen, 11 Hun, 29. 66 N. Y. 363. * McGiven v. Wheelock, 7 Barb. 22. §§379-380. J DISCHARGE BY MERGER. 265 the proceedings in wliich the judgment had been obtained were' regular.' § 379. Merger of mortgage in judgment of foreclosure. — A mortgage is merged in a judgment of foreclosure, in the sense that, after the rendition of such judgment, the creditor being furnished with a better and more efficacious security may not resort to the poorer and inferior one. But this rule cannot operate to benefit per- sons not bound by the judgment, and, as to them, the mortgage re- mains in full force.' So, a mortgage is not merged by the entry of a judgment on it and a sale made under such judgment to the mort- gagee, so as to benefit the holder of a second mortgage not made a party defendant to the foreclosure.' And, since a valid mortgage can only be merged in a valid judgment, a judgment setting aside a fore- closure and sale of mortgaged premises as illegal and fraudulent, is no bar to a subsequent foreclosure of the same mortgage, the mortgage itself and its lien being unaffected by the said judgment.* § 380. Judgment does not merge cause of action as between defendants. — Where a principal and surety are Sued upon any obliga- tion securing a debt, as between the plaintiff and the defendants, the obligation becomes merged in the judgment ; but it is not necessarily merged as between the defendants. The merger is not so complete that the courts may not look behind the judgment to see upon what it is founded, for the purpose of protecting equitable rights connected with the original relations of the parties ; and the judgment, instead of being regarded strictly as a new debt, is sometimes held to be merely the old debt in a new form, so as to prevent a technical merger from working injustice.* The rule has been well formulated thus : " The merger of a cause of action has no effect upon the liabilities of the co-plaintiffs or the co-defendants between each other. Those liabilities are not in issue in the case, and, therefore, are not affected by the final determination of the action. In extinguishing a demand a judgment has no greater effect than mere payment. It leaves the liability of other parties to the defendant unaffected. A recovery upon a note against the maker and indorser does not so merge the ' Driggs V. Simson, 3 N. Y. Sup. (T. ^ Parker v. Child, 25 N. J. Eq. 41. & C.) 786. ^ Stackpole v. Robbins, 47 Barb. ' Franklin v. Hayward, 61 How. 43 ; 212. EvansGasLightCo.v. State ^j; re/. Reitz, 'Clark v. Rowling, 3 N. Y. (3 Comst.) 73 Ind. 219 ; 38 Am. R. I2g. 216. 266 MORTGAGES OF REAL PEOPEETT. [§ 381. note as to prevent the indorsers from paying the judgment, receiving the note, and maintaining an action upon it against the maker." ' Upon this principle, where a judgment of foreclosure was entered, and a sale had thereunder to a person owning the equity of redemp- tion, who was not equitably bound to pay the mortgage, but the sale was never carried out by the executing of a deed, for the reason that such defendant toot an assignment of the bond, mortgage, and decree, it was held that the judgment did not preclude such defendant, as assignee of the bond, from bringing an action upon it against the maker, who was both legally and equitably the person who, under the circumstances of the case, ought to pay it." Where a bond and mortgage were assigned as security for a debt, and the assignee brought an action to foreclose, claiming only the amount due him, and obtained a judgment, this was held not to merge the mortgage so as to prevent the mortgagee from paying the amount due to his assignee, and bringing a new action in his own behalf.' DISCHARGE BY EBLEASB OF PART OF THE SEOUEITT. § 381. When a release of a portion of the security will cancel the mortgage pro tanto. — It is a principle of equity, that where mortgaged premises are subsequently sold to different purchasers in parcels, such parcels, upon a foreclosure of the mortgage, are to be sold in the inverse order of their alienation, according to the equita- ble rights of different purchasers, as between themselves, in reference to the payment of the mortgage, which is a lien upon the equity of redemption in all the parcels. And the same principle of equity is applicable to subsequent incumbrances, upon different portions of the mortgaged premises, either by mortgage or judgment.* It has also been determined that if the mortgagee, in such case, with full notice of the equitable rights of the subsequent purchasers or incumbrancers, as between themselves, releases a part of the mortgaged premises ; which in equity is primarily liable for the payment of his debt, he 1 will not be permitted to enforce the Ken of his mortgage against I other portions of the premises, vrithout first deducting the value of Jthat part of the premises which has been released by him.' ' Freeman on Judgments, §227; Wads- * Stuyvesant v. Hall, 2 Barb. Ch. 151 ; worth V. Lyon, 93 N. Y. 201, 213 ; Kel- N. Y. Life Ins. & Trust Co. v. Milnor, sey V. Bradbury, 21 Barb. 531. i Barb. Ch. 353 ; Snyder v. Stafford, 11 'Wadsworth v. Lyon, 93 N. Y. 201. Paige, 71. 'O'Dougherty v. Remington Paper * Stuyvesant v. Hall, 2 Barb. Ch. 151 ; Co., 81 N. Y. 496. Guion v. Knapp, 6 Paige, 35 ; Howard §§ 382-383.] DISCHAEGE BY RELEASE. 267 Upon tlie same principle, where payment of the mortgage debt is assumed by a purchaser, and the mortgagee, with notice of the facts, releases a part of the mortgaged land to the purchaser, and the re- maining part proves insufficient, the mortgagee cannot look to the mortgagor for payment of the deficiency caused by the release.' The mortgagor is entitled to credit for the value of the part released and is liable only for the balance.* If a mortgagee has diminished the security of a subsequent pur- chaser without his consent by releasing the mortgagor from his per- sonal liability, the land so purchased will be held to be fully dis- charged from the lien.' § 382. The reason for this rule may be found in the fact that the owners of the property only secondarily liable for the payment of the mortgage debt stand as sureties, the property primarily liable being the principal fund. Among the equitable rights and privileges of a surety are the following : that the creditor shall first resort to the primary fund, where there are two, for the payment of his debt, so as to relieve as far as possible the property of the surety, and that the creditor shall do no act, without the express consent of the surety, to impair the benefit of a substitution to which the surety may be enti- tled. These are familiar rules in a court of equity," and it follows that if a creditor knowingly acts in disregard of these principles, he, and not the surety, should suffer the evil consequences. § 383. The mortgagee is not prejudiced by release unless he has notice of the facts. — The right to have the lands which have been sold by the mortgagor charged in the inverse order of their alienation, is not strictly a legal, but an equitable right, and is gov- erned by those equitable principles upon which a court of equity protects the rights of sureties, or of those who are standing in the Ins, Co. V. Halsey, 4 Sandf. 565 ; s. c. v, Nicoll, 24 Minn. 221 ; Martin's Ap- affi'd 8 N. Y. (4 Seld.) 271; The Trustees peal, 97 Pa. St. 85. of Union College v. Wheeler, 61 N. Y. • SavingsBankv.Munson,47Conn.3qo. 88 ; Hill V, Howell, 36 N.J. Eq. 25 ; ' Bank v. Thayer, 136 Mass. 459 ; Mount V. Potts, 23 N. J. Eq. 188 ; Loan Wing v. Hayford, 124 Mass. 249 ; Dra- Asso'n V. Beaghen, 37 N, J. Eq. 98 ; per v. Mann, 117 Mass. 439. Birnie v. Main, 29 Ark, 591 ; Stewart v. ' Coyler v. Davis, 20 Wis. 564. McMahan, 94 Ind. 389 ; Douglas v. * Wheelwright v. Depeyster, 4 Edw. Bishop, 27 Iowa, 214 ; Wolf v. Smith, 244 ; Cheesebrough v. Millard, i Johns. 36 Iowa, 454 ; Hawke v, Snydaker, 86 Ch. 409 ; Stevens v. Cooper, i Johns. Ill, 197 ; Meacham v. Steele, 93 111. 135 ; Ch. 425 ; Hayes v. Ward, 4 Johns. Ch, Clark V. Fontain, 135 Mass. 464; Benton 123 ; Eddy v. Traver, 6 Paige, 521. 268 MOETGAGES OF KEAL PROPEETT. [§ 384. situation of sureties. And the conscience of the party who holds the incumbrance is not affected, unless he is informed of the existence of the facts upon which this equitable right depends, or he has a suffi- cient notice of the probable existence of the right to make it his duty to inquire for the purpose of ascertaining whether such equitable right does in fact exist. If, therefore, the prior purchasers are so negligent as to leave the holder of an incumbrance to deal with the- mortgagor, or with a subsequent grantee of a portion of the premises, under the erroneous supposition that the lands conveyed to the prior purchasers still belong to the mortgagor, the mortgagee will not lose his lien by executing a release to one who happens to be a subsequent grantee. The principle that a creditor who has a hen on two funds may discharge the lien as to one without impairing his legal claim on the other, if he has no reason to suppose it will interfere with the equitable rights of any one, has been distinctly recognized.' To de- prive a creditor of his legal claim against the property of a person, standing in the situation of a surety, on the ground that such creditor has done an act which is inconsistent with the equitable rights of a surety, not only the fact of the suretyship must exist, but it must be known to the creditor at the time of the act complained of," or he must have either actual or constructive notice of it.' § 384. What notice is sufficient. — The recording of a subsequent conveyance of, or mortgage on, parcels of the premises is not notice to the prior mortgagee, and if such mortgagee releases a portion of the premises without actual notice of such deed or mortgage, his lien upon the residue will not be impaired.* The recording of subsequent transfers or incumbrances may, however, be material, if it can be shown that the mortgagee had notice of facts and circumstances suffi- cient to put him on inquiry, for the public records furnish the infor- ' Cheesebrough v. Millard, i Johns. McLean v. Lafayette Bank, 3 McLean, Ch 409. 588 ; Cooper v. Bigly, 13 Mich. 463 ; * Chancellor Walworth, in Guion v. Sharck v. Shriner, Pa. St. Nov. 20, 1882 ; Knapp, 6 Paige, 42, 43 ; Niemcewicz v. 27 Albi L. J. 336 ; Whittington v. Flint, Gahn, 3 Paige, 614 ; Patty v. Pease, 8 43 Ark. 504. Paige, 277. * Wheelwright v. Depeyster, 4 Edw. * Howard Ins. Co. v. Halsey, 8 N. Y. 233 ; Talmadge v. Wilgers, 4 Edw. 239, (4 Seld.) 271 ; Kendall v. Niebuhr, 58 n. ; Stuyvesant v. Hone, i Sandf. Ch. How. 156 : Mcllvain v. Assurance Co., 419, affi'd Stuyvesant v. Hall, 2 Barb. 93 Pa. St. 30 ; Watts v. Burnett, 56 Ala. Ch. 151 ; Howard Ins. Co. v. Halsey, 8 340 ; Blair v. Ward, 10 N. J. Eq. 119 ; N. Y. (4 Seld.) 271 ; Blair v. Ward, 10 Vanorden v. Johnson, 14 N. J. Eq. 376; N. J. Eq. 119. § 385.] DISCHAEGE BY RELEASE. 269 mation whicli a mortgagee, desiring to act fairly, would naturally seek." If the mortgagee can be shown to have knowledge of the record of a conveyance, as if the release itself recites such record, he is put upon inquiry,, and is bound by the knowledge which an exam- ination of the records would furnish him.' It is enough to charge the mortgagee with notice if he has been informed, by letter or otherwise, of the names of junior purchasers from the mortgagor, and if their deeds are on record." And if the mortgagee has employed an attorney in the transaction, before the delivery of the release, and such attorney has acquired knowledge of the contents of the conveyances, the knowledge of the attorney will be treated as that of his cUent.* The actual occupancy of the purchasers from the mortgagor, by residence in dwellings erected on portions of the mortgaged premises, is constructive notice to the mortgagee, and he is chargeable with the consequence thereof, and cannot do anything in derogation of their rights or to their prejudice.' § 385. The effect of a release by the mortgagee must depend upon the circumstances of the case. — If he has notice that by such an act he sacrifices the interest of a subsequent lien creditor, he will be bound to withhold his hand, or, if he proceeds, will be responsible for the loss incurred. He may have this knowledge in the very cre- ation of the mortgage. As if two or more severally seized of land join in a mortgage, they are all, in equali jure, entitled to contribu- tion among themselves ; and if the mortgagee should release the land of one from the mortgage, leaving the whole sum to be levied of the remaining lands, he would be doing an act of injustice of which he was fuUy cognizant. So, when the mortgage was originally by one, and a purchaser of part from the mortgagor intervenes, and before releasing, that fact is known to the mortgagee." ' Guion V. Knapp, 6 Paige, 41, 42; 184; Dillon v. Anderson, 43 N. Y. 231, Howard Ins. Co. v. Halsey, 4 Sandf. 238 ; The Distilled Spirits, 11 Wall. 356 ; 565 ; s. c. affi'd 8 N. Y. (4 Seld.) 271. Bank for Savings v. Frank, 56 How. ^ Howard Ins. Co. v. Halsey, 8 N. Y. 403, 414. (4 Seld.) 271. 5 Trustees of Union College v. Wheel- ' Hall V. Edwards, 43 Mich. 443 ; Dew- er, 61 N. Y. 88, 98 ; Brown v. Volken- ey V. IngersoU, 42 Mich. 17 ; James v. ing, 64 N. Y. 76 ; Dewey v. IngersoU, 42 Brown, 11 Mich. 25 ; Howard Ins. Co. Mich. 17. V. Halsey, 8 N. Y. (4 Seld.) 271. « Per Sterrett, J., in Sharck v. Shri- * Kendall v. Niebuhr, 58 How. 156, ner, Pa. St. Nov. 20, 1882 ; 27 Alb. L. 164 ; Bank of the U. S. v. Davis, 2 Hill, J. 336. 451 ; Ingalls v. Morgan, 10 N, Y. 178, 270 MORTGAGES OP EEAL PEOrEETY. [§§ 386-387. It is not always that a release of a part of mortgaged premises given with knowledge of a prior conveyance of another part that re- mains nnreleased, is held inequitable. It is not a technical discharge of that part ; nor is it an equitable release or discharge, unless upon the principles of natural equity and justice, it ought to operate against the mortgagee giving the release.' § 386. Where two parcels of land owned by different persons are equitably bound pro rata for the mortgage debt, and the mort- gagee, with knowledge of the facts out of which this equity arises, releases one parcel, his security will be deemed diminished for the benefit of the other parcel, to the extent that the parcel released ought equitably to have contributed to its payment. So, where a mortgage covered two parcels of land and the equity of one was transferred to A, and the equity of the other to B ; and the mortgagee released A's parcel from the mortgage, it was held that B, on redeeming, could not compel A to contribute, but that he was entitled to have an abate- ment of such a proportion of the sum due on the mortgage as the value of A's parcel bore at the time of the execution of the mortgage, to the value of both parcels.^ And when, after the mortgaged prem- ises had passed to several devisees, and the mortgagee released, one devisee's portion, it was adjudged that the others were liable only for that share of the debt for which their portions would have been liable if no release had been made.' Where several parcels are justly bound for the payment of the debt, the mortgagee will incur no penalty for releasing one or more on re- ceiving their fair quota of the amount due, and the balance of the debt will remain a valid charge on the remainder.' So, the mortgagee may properly release portions of the mortgaged property in conformity with the terms of the mortgage itself, if that instrument contains provisions requiring releases to be given on cer- tain specified terms.' § 387. It is only when the release is given in violation of equitable rights of third persons that it will operate to cancel or ■Per Walworth, Ch., in Patty v. * Barney v. Myers, 28 Iowa, 472. Pease, 8 Paige, 277; Kendall v. Woodruff, ' Woodruff v. Stickle, 28 N. J. Eq. 549 ; 87 N.V. I, 7 ; Walls V. Baird, 91 Ind. 429. Hawke v. Snydaker, 86 111. 197; Ken- ^ Parkman v. Welch, 36 Mass. (19 dall v. Niebuhr, 58 How. 156, 165, affi'd Pick.) 231. sub nam. Kendall v. Woodruff, 87 N. ' Gibson v. McCormick, 10 Gill & J. Y. i. (Md.) 65. § 388.] DISCHAEGE BY RELEASE. 271 reduce the mortgage. Between the parties a part may be released and the balance held,' and there are cases where equity would approve a release. So, where one of two tenants in common has paid his share of a joint mortgage, and the other has mortgaged his share a second time, the former is equitably entitled to a discharge ; and if it is given, this will not justify the later mortgagee to demand that the prior mortgage be postponed, or be held to be diminished in amount.'' If the release is the eqiiitable right of the person receiving it as against the portion of the property remaining, no deduction can be made from the mortgage debt because of it. So where, after the making of the mortgage, a portion was conveyed by the mortgagor for a full consideration and with warranty against the lien, the por- tion so conveyed, may justly be released by the mortgagee without impairing his lien against the balance remaining in the hands of the mortgagor and his subsequent grantees and mortgagees.^ So, where the mortgagee released in pursuance of an agreement con- temporaneous with the mortgage, and under which it was made, it was held that such release did not affect the hen of the mortgage as to the parcels not released." § 388. In every case the mortgage will only be affected to the extent of the value of the property released ;' and the owners of property not released cannot be suffered to escape payment of the fair proportion of the mortgage debt, which they would equitably have been obligated to pay if the release had not been executed." It will be remembered that the release to a subsequent purchaser is not a technical discharge of the lands previously conveyed, from the hen of the incumbrance. So fax as the release relates to the orig- inal parties to the mortgage, each and every part of the mortgaged premises is bound for the payment of the whole debt, and a release of one portion does not in any manner affect the lien up«n the resi- due.' A release or discharge of one portion of the mortgaged prem- ' Coutant V. Servoss, 3 Barb. 128. Koon, 30 N. Y. 428 ; Dunn v. Parsons, '' Southworth v. Parker, 41 Mich. 198. 40 Hun, 77 ; Loan Ass'n v. Beaghen, 27 ' Lyman v. Lyman, 32 Vt. 79. N. J. Eq, 98 ; Hill v. Howell, 36 N. J. "* Kendall v. Niebuhr, 58 How. 156, Eq. 25 ; Williams v. Wilson, 124 Mass. afB'd sub nam. Kendall v. Woodruff, 87 257. N. Y. I. ' Stevens v. Cooper, i Johns. Ch. 6 Guion V. Knapp, 6 Paige, 35 ; Stuy- 425. vesant v. Hall, 2 Barb. Ch. 151 ; Frost v. ' Coutant v. Servoss, 3 Barb. 128. 272 MORTGAGES OF REAL PROPERTY. [§§ 389-390. ises does not operate as an equitable release or discliarge of other portions, unless upon the principles of natural equity and justice it ought thus to operate against the party making the release to the sub- sequent grantee. So, where the entire value of the property released is credited upon the mortgage, no injury can come to any one, and no other property is affected.' If the mortgage was not an actual lien on the portion attempted to be released by reason of a lack of title in the mortgagor, no injury, could be done by the release, and the owners of the remaining prop- erty could derive no advantage from it.'' CHANGES IN THE FOEM OF THE DEBT. § 389. Lien not commonly affected by changes in form of debt. — As a general rule the mere change in the form of the debt does not satisfy a mortgage given to secure it, unless it is intended so to operate. The lien of the debt attaches to the mortgaged property, and the lien can, as between the parties, only be destroyed by the payment or discharge of the debt, or by a release of the mortgage. Mere change of the form of the evidence of the debt in nowise afEects the lien. A renewal of the note, its reduction to a judgment, or other change not intended to operate as a discharge of the lien, still leaves it, as between the parties, in full vigor.' § 390. Court will look at real nature of the transaction. — In cases of this kind the court will always look to the real nature of the transaction, and will not consider a mortgage discharged by the mere change, 'or even the destruction of another security for the same debt, if it was not the intention of the parties to destroy the lien of the mortgage. In the case of Hardwich v. Mynd (1 Anst. Ill), the court of Exchequer decided that the taking of a bond from the mort- gagor for the arrears of interest, which bond was never paid, was not a disAarge of the lien of the mortgage for such interest, although a receipt was actually indorsed upon the mortgage for the interest. So, in the case of Davis v. Mayna/rd (19 Mass. 242), where the mort- ' Patty V. Pease, 8 Paige, 277. Ch. 65 ; Bank of Utica v. Finch, 3 Barb. ' Taylor v. Short, 27 Iowa, 361 ; s. c. Ch. 293 ; Rogers v. The Traders' Ins. I Am. R. 280. Co., 6 Paige, 583 ; Reader v. Nay, 95 ^ Per Walker, J., in Flower V. Elwood, Ind. 164; see, also, mtte, §§ 208 to 66 III. 438 ; Dunham v. Dey, 15 Johns. 212, Chap. VII. 554 ; Brinckerhoff v. Lansing, 4 Johns. § 391. J DISCHARGE BY EELEASE. 273 gage was given to secure payment of a sum of money due on a prom, issory note, and the mortgagee afterward accepted a recognizance for the sum due, and left the mortgage with the justice before whom the recognizance was acknowledged, who delivered it to the mortgagor, the Supreme Court of Massachusetts held that the lien of the mort- gage was not thereby discharged. And in the case of Dwnhmrij v. Dey (15 Johns. 555), the Court of Errors in this State decided that where a mortgage is given to secure the payment of a promissory note, the subsequent renewal of the note is not to be considered an extinguishment of the original debt, so as to discharge the lien of the mortgage.' Where the mortgagor sold the land to a third person, and, by a contract of novation, the mortgagee delivered up the mortgage notes to the mortgagor and accepted the notes of the purchaser for the same indebtedness, the mortgage was held to stand as security for the new notes." Where an unauthorized alteration was made in a note secured by mortgage, it was held that this rendered the note void, but did not affect the validity of the debt for which the note had been given, and the mortgage lien was enforced.' § 391. New obligations or securities. — It is extremely weU settled in this State that the taking of a debtor's note does not merge or extinguish the demand for which it is taken.* If the demand is in the form of a note and that is secured by a mortgage, the mortgage is an incident of the debt. But it is an incident of the debt itself and not of the note which is evidence of it. Accurately speaking, a note is not a debt at all, any more than, any other mere promise. Unless founded on a consideration, it is good for nothing between the original parties. Since taking a substituted note does not affect the debt, it cannot affect the security. "^ In the absence of a special agreement that a note of the debtor shall operate as fuU satisfaction for interest or principal on a bond I Per Walworth, Ch., in Rogers v. ^Gregory v. Thomas, 20 Wend. 17; The Traders' Ins. Co., 6 Paige, 583; Waydell v. Luer, 5 Hill, 448 ; Cole v. Pond V. Clark, 14 Conn. 334. Sackett, i Hill, 516. ' Foster v. Paine, 63 Iowa, 85 ; Sloan ' Hill v. Beebe, 13 N. Y. 556, 562 ; V. Rice, 41 Iowa, 465; Packard v. King- Jagger Iron Co. v. Walker, 76 N. Y; 521, man, 11 Iowa, 219; Watkins v. Hill, 8 affi'g 43 N. Y. Supr. (11 J. & S.) 275; Pick. 522 ; Pomroy v. Rice, 16 Pick. 22. Hutchinson v. Swartsweller, 31 N. J. Eq. ^Gillette v. Smith, 18 Hun, 10. 205; Lippold v. Held, 58 Mo. 213. 18 274 MOETaAGES OF REAL PEOPEETY. [§§392-393. secured by a mortgage, the mortgagee is not precluded from collect- ing the same.' The giving of a receipt in full or even the indorse- ment of the amount as a payment upon the bond, will not establish an agreement to take the note absolutely in payment of the original debt." But an indorsement of a receipt for an instalment of principal made upon a bond in consideration of a promissory note for the ex- press purpose of enabling the mortgagee to sell the note and mortgage to raise money, will be treated as a payment on account of the mort- gage and not as a mere change of security.^ A second mortgage for the same debt will not, in the absence of express agreement, be treated as a discharge of a prior mortgage, but as collateral to it." § 392. Agreement to' take note in payment must be founded on new consideration. — 'So presumption vrill be indulged of an agreement to accept a new obligation or security in satisfaction of an old one. The presumption will always be that the new promise or security is a collateral to the old one. And, unless there be some new consideration moving between the parties, an agreement that a fresh promise shall be taken as full performance of a broken one, is void for the reason that it is without consideration. "When this reason does not apply, the rule no longer prevails. If any new or addi- tional security or other benefit is obtained by the creditor, or any detri- ment is sustained by the debtor, the agreement will be enforced. So, if notes bearing, interest are given for an instalment of interest due upon a mortgage, upon an agreement that they shall be in full pay- ment, they will be so treated." Or the notes of a third person given and received as payment will discharge the original debt." § 393, Rule as to merger in securities of a higher nature. — If a bond is given for a note secured by mortgage, or if a judgment is ' Cole V, Sackett, i Hill, 516 ; Hill v. » Fowler v. Bush, 38 Mass. (21 Pick.) Beebe, 13 N. Y. 556; Frisbie v. Larned, 230. 21 Wend. 450, 452 ; Waydell v. Luer, 5 * Gregory v. Thomas, 20 Wend. 17 ; Hill, 448. " Hill V. Beebe, 13 N. Y. 556 ; Ponder v. ^ Feldmai} v. Beier, 78 N. Y. 293; Jag- Ritzinger, 102 Ind. 571; Walters v. Wal- ger Iron Cp. v. Walker, 76 N. Y. 521, ters, 73 Ind. 425 ; Burns v. Thayer, loi affi'g 43 N. Y.. Supr. (11 J. & S.)275; Put- Mass. 426; Swift v. Kraemer, 13 Cal. nam v. Lewi?, 8 Johns. 389 ; Buswell v. 526 ; Packard v. Kingman, 11 Iowa, 219. Poineer, 37 N. Y. 312; Muldon v. Whit- * Rice v. Dewey, 54 Barb. 455. But lock, I Cow. 290 ; Megargel's Adm'r v. see Tylee v. Yates, 3 Barb. 222. Megargel, 105 Pa. St. 475. ° Walker v. Mebane, 90 N. C. 259. §§ 394-395.] DISCHARGE BY ESTOPPEL. 275 obtained for the debt, the mortgage lien still remains until payment. The rule that a security of a higher nature extinguishes inferior se- curities, only apphes to the state or condition of the debt itself, and means no more than this, that when an account is settled by a note, a note changed for a bond, or a judgment taken upon either, the debt as to its original or inferior condition is extinguished or swallowed up in the higher security ; and that all the memorandums or securities by which such inferior condition was evidenced, lose their vitality. It has never been applied to the extinguishment of distinct collateral securities, whether superior or inferior in degree. These are to be cancelled by satisfaction of the debt or voluntary surrender alone.' mSCHAEGE BY EXTENDING TIME FOR PAYMENT OF MOETGAGE DEBT. § 394. Where the property of one person is pledged to pay the debt of another, the owner of the property is the surety of the debtor. If, therefore, the mortgagee, without the consent of the owner of the property, makes a vahd and binding agreement giving time to the principal debtor, the mortgaged premises wiU thereby be released and discharged from the lien of the mort- gage." This rule apphes in favor of a wife, where her lands are pledged as security for the payment of her husband's debt.' In order to be available to the surety, the contract of extension must be binding and without his consent, and the mere taking of fur- ther obligations payable in the future, the right to proceed upon the collateral being expressly reserved, does not operate to discharge the mortgaged property." DISOHAUGE BY ESTOPPEL. § 395. If the mortgagee should represent to a person intending to purchase the mortgaged premises that the mortgage had been paid, and such person should purchase, relying upon such statement, the mortgagee would not, on the plainest principles of justice, be allowed thereafter to enforce his claims. So the mortgagee, by holding out a third person as being authorized to act for him in making bargains ' Per Johnson, J., in Butler v. Miller, ' The Bank of Albion v. Bums, 46 N. I N. Y. (i Comst.)496, overruling s. c. Y. 170; Smith v. Townsend, 25 N. Y. I Denio, 407. 479. 'Smith V. Townsend, 25 N. Y. 479; * National Bank of Newburgh v. Biglter, Gahn v. Niemcewicz, 11 Wend. 312; 83 N. Y. 51, 66. See further as ta effect Niemcewicz v. Gahn, 3 Paige, 614. See of extending time, an/e, p. 147.. ante, Ch. VII., §§ 213 to 220. 276 MOETGAaES OF REAL PEOPERTY. [§§ 396-397. in relation to the mortgage, may be bound by estoppel by the acts of his apparent agent, and the mortgage may be satisfied and discharged even without actual payment.' Where a mortgagee was present at an auction sale of the mortgaged land, and it was announced by the auctioneer that the title was per- fect and clear and unincumbered, and he failed to make any correc- tion of said announcement, and the purchaser bought under the im- pression that he was getting an unincumbered title, and took a deed, and paid his money, the mortgagee was held to be estopped from claiming under his mortgage, although the mortgage was recorded at the time of the sale.'' Where the grantee of a mortgagor, being about to sell the mort- gaged premises, procured the mortgagee to execute to the purchaser a bond conditioned that the said mortgagee would save the purchaser harmless from all costs and damages in consequence of any previous incumbrance upon the premises, it was held that the effect of this was to release the land from the incumbrance.' DISCHARGE BY TENDEE OF PAYMENT. § 396. Rule at common lavr. — By the ancient common law, a mortgage was a grant of land defeasible on the condition subsequent of paying the money at the exact time specified. On failure to per- form that condition, the grant was absolute, and neither tender nor payment made afterward, would have the effect to revest the title.* The speqified time of payment was called the law day, because after default, the legal rights of the mortgagor were gone.' A legal ten- der at the day appointed by the mortgage for the payment of the money, divested the estate of the mortgagee, even though payment \were refused." § 397. Rule in this State. — In this State the law is well settled ;that a mortgage is a mere security or pledge of the land covered by it for tie money borrowed or owing, and referred to in it. It is al- ways permissible for the mortgagor to redeem by paying the amount , due at anytime before foreclosure; acceptance of payment of the 'Curtiss V. Tripp, Clarke, 318. Grain v. McGoon, 86 111. 431 ; 29 Am. ' Markhatp v, O'Connor, 52 Ga. 183. R. 37. ' Proctor V. Thrall, 22 Vt. 262. 'Comstock, Ch. J., in Kortright v. * Rowell V. Mitchell, 68 Me. 2i ; Him- Cady, 21 N. Y. 355. ijpelmann v. Fitjspaitrick, 50 Cal. 650; « Kortright v. Cady, 21 N. Y. 343. §§ 398-399.J DISCHARGE BY TENDER. 277 amount due will discharge the incumbrance on the land, and tender and refusal are equivalent to performance.' § 398. A valid tender can be made at any time after the debt is due, and the tender of the amount due upon a mortgage, will dis- charge the lien." This is to be taken with the reservation that the debt or duty remains, and that the rejected tender at or after the stipulated time of payment or performance, has the effect only to dis- charge the party thus making it from all the contingent, consequen- tial, or accessory responsibilities and incidents of his contract, but without releasing his prior debt. The tender extinguifihes the hen and saves interest and costs, but the debt remains. The creditor by refusing to accept does not forfeit his right to the thing tendered, .but he does lose all collateral benefits or securities.' Since the tender and refusal do not extinguish the debt, but only defeat a particular rem- edy, it is not necessary that the tender should be kept good, or that the money should be brought into court.* § 399. The tender must be kept good to sustain action for affirmative relief. But even if a sufficient tender is made out, no action for affirmative relief and the extinguishment of the mortgage can be maintained without keeping the tender good. A party com- ing into equity for affirmative relief must himself do equity, and this would require that he pay the debt secm-ed by the mortgage, and the costs and interest, at least up to the time of the tender. There can be no pretense of any equity in depriving the creditor of his security for his entire debt, by way of penalty for having declined to receive payment when offered. The most that can equitably be claimed would be to reheve the debtor from the payment of interest and costs subsequently accruing, and to entitle him to this relief he ' Kemble v. Wallis, lo Wend. 374. Olmstead v. Tarsney, 69 Mo. 396. And ' Kortright v. Cady, 21 N. Y. 343, rev'g in Indiana. McClellan v. Coffin, 93 Ind. s. c. sub nam. Kortright v. Blunt, 23 456. Contra, Matthews v. Lindsay, 20 Barb. 490 ; Jackson v. Crafts, 18 Johns. Fla. 962 ; Grain v. McQoon, 86 111. 433. no; Edwards V. The Farmers' Fire Ins. ^ Kortright v. Cady, 21 N. Y. 343; & Loan Co., 21 Wend. 467; and s. c. Hunter v. Le Conte, 6 Cow. 728; Coit affi'd 26 Wend. 541 ; Arnot v. Post, 6 v. Houston, 3 Johns. Cas. 243. Hill, 65, rev'd on other grounds, 2 Den. * Kortright v. Cady, 21 N. Y. 343 ; 344; Graham V. Linden, 50 N. Y. 547; Jackson v. Crafts, 18 Johns, no; Ed- Green V. Fry, 93 N. Y. 353. The same wards v. Farmers' Fire Ins. &Loan Co., rule in Michigan. Potts v. Plaisted, 30 21 Wend. 467 ; and s. c. affi'd 26 Wend. Mich. 149 ; Van Husan v. Kanoner, 13 541 ; Arnot v. Post, 6 Hill, 65, rev'd on Mich. 303. And also in Missouri. Thorn- other grounds, 2 Den. 344. ton V. Nat. Exchange Bank, 71 Mo. 221 ; 278 MORTGAGES OF REAL PROPERTY. [§ 400. must have kept his tender good from the time it was made. If any further advantage is gained by a tender of the mortgage debt, it must rest on strict legal rather than on equitable principles. The circiun- stance that a security has become or is invalid in law, and could not be enforced, even in equity, does not entitle a party to come into a court of equity and have it decreed to be surrendered or extinguished without paying the amount equitably owing thereon. Even securities void for usury would not be cancelled by a court of equity without payment of the debt, with legal interest, until by statute it was other- wise provided.' I 400. What tender is sufficient. — The tender should be of the full amount due upon the mortgage, and it does not affect the ques- tion whether the person owning the legal title to the mortgage holds it in his own right or as trustee for some other person. In any event, to discharge the lien, the tender must be for the whole amount due upon the mortgage," and it must also be unconditional.' The holder of the mortgage is entitled to a reasonable time to ex- amine his papers and compute the amount due. He is not bound under penalty, and at the hazard of losing his entire debt, to carry at all times in his head the precise sum due on any particular day. The proof must be full, clear, and satisfactory that the tender was made in good faith, and was understood by the holder to be a present, ab- solute, and unconditional tender, intended to be in full payment and extinguishment of the mortgage, and not dependent upon his first executing a receipt or discharge, or any other condition or contin- gency. If the amount tendered be suflScient, the lien will be dis- charged whether it be accepted or not, and that without the execution of any paper.' A tender, with a demand for an assignment to the person paying, does not affect the lien.° Where the mortgagor said, in making a tender : " I will pay you this money if you will first transfer the mortgage and note to a third person," it was held that the mortgagee's rights were not affected by a refusal to accept." ' Per Rapallo, J., in Tuthill v. Mor- Barb. 554 ; Cashman v. Martin, 50 How. ris, 81 N. Y. 94, 100. 337. * Graham v. Linden, 50 N. Y. 547. * Potts v. Plaisted, 30 Mich. 149. ' Roosevelt v. Bull's Head Bank, 45 " Frost v. Yonkers Savings Bank, 70 Barb. 579 ; Roosevelt v. The N. Y. & N. Y. 553 ; Day v. Strong, 29 Hun, 505. Harlem R.R. Co., 30 How. 230 ; s. c. 45 « Ferguson v. Wagner, 41 Ind. 450. §§ 401-405.] DISCHAEGE BY TENDER. S'l^Q After an action has been commenced on a mortgage, a tender of an amount to discliarge it should include costs.' § 401. To whom tender may be made. — The tender may be made to any person who is authorized to receive it. So, although a mortgage may have been assigned, still, if no notice of such assignment has been given to the mortgagor, he may lawfully continue to treat with the mortgagee as the owner ;" and a tender to the mortgagee, even after the assignment, would be vahd, and would be as effectual to extinguish the hen of the mortgage as an actual payment.' § 402. Mortgagee must accept a proper tender, without im- posing conditions. — If the tender be properly made, the mortgagee has no right to impose conditions upon which alone he will accept it ; as, for instance, that another debt be also paid, and a sale made after a vahd tender had been refused on such a pretense, would be void.* § 403. Where a mortgage is given conditioned for the support of the mortgagee, or of the payment to him of a stipulated weekly or monthly allowance, the refusal of the mortgagee to accept the support or the payment of the specified sum, will operate to waive the condition, and to discharge the lien of the mortgage." § 404; Mortgagee may rely on decisions of the highest courts. —In Hm-ris v. Jex ("66 Barb. 232 ; s. c. affi'd 55 IST. Y. 421), the defend- ant was a grantee of premises subject to certain mortgages executed prior to the legal tender act. After the decision of the Supreme Court of the United States holding that act void as to antecedent contracts,' and before the reversal of that decision,' the defendant tendered payment of the mortgages in legal tender notes, which was refused. It was claimed by the defendant that this operated to dis- charge the hen of the mortgages, but it was held, that the plaintiff had a right to rely on the decision of the highest court in the land, and that the tender being insufficient, according to the law of the land, as then declared, did not discharge the hen of the mortgage. § 405. Tender must be clearly proved. — In view of the serious consequences resulting from the refusal of such a tender, the proof ' Marshall v. Wing, 50 Me. 62. * Morrison v. Morrison, 4 Hun, 410 ; ' Trustees of Unio^ College v. Wheel- Young v. Hunter, 6 N. Y. (2 Seld.) 204; er, 61 N. Y. 88. Holmes v. Holmes, 9 N. Y. (5 Seld.) 527; ^ Hetzell V. Barber, 6 Hun, 534. Carman v. Pultz, 21 N. Y. (7 Smith) 547. * Burnet v. Denniston, 5 Johns. Ch. ^-Hepburn v. Griswold, 8 Wall. 605. 35 ' Knox V. Lee, 12 Wall. 457. 280 MOETGAG-ES OP EEAL PROPERTY. [§§406-407. should be very clear that it was fairly naade, and deliberately and in- tentionally refused by the mortgagee or some one duly authorized by him, and that sufficient opportunity was afforded to ascertain the amount due. At all events, it should appear that a sum was abso- lutely and unconditionally tendered sufficient to cover the whole amount due. The burden of that proof is on the party alleging the tender.' § 406. Who may make a tender sufficient to discharge the lien. — It has been debated as to whether the tender which will dis- charge the lien of the mortgage may be made by any person other than one personally obligated for the payment of the mortgage debt. In Korbright v. Cady (21 IST. T. 343), the tender was made by a grantee of the mortgaged premises, and the tender was held to be equivalent to payment, so far as its effect upon the mortgage as a hen was concerned ; but it does not appear whether the grantee had or had not made the debt his own by assuming it. The reasoning of the court is, however, based largely upon the theory that the debt was that of the person who offered to pay it. In Harris v. Jex (66 Barb. 232), the question was raised, and it was there held by the Gen- eral Term, in the first department, that a grantee who had received merely the equity of redemption, without obligating himself person- ally for the payment of the debt, could not discharge the incumbrance without actual payment. It was thought that, in such a case, the right of the grantee was limited to a privilege to redeem from the lien, and that such redemption could not be effected by a mere offer to redeem. It was argued that a tender could not be made by a mere stranger to a contract, so as to oblige the creditor to accept it, and it was determined to be unreasonable to allow the grantee to discharge the land, which was in his hands the fund upon which the debt was primarily chargeable, by any act which would continue the debt in fuU force against the mortgagor personally. This decision came be- fore the Court of Appeals for revifew, but that court expressly de- clined to pass upon the question, and the judgment was affirmed upon other grounds." In a later case the doctrine has been repudiated.^ § 407. {Oontinued.) — ^In Dvngs v. Parshall (7 Hun, 522), a junior mortgagee who was a defendant in an action to foreclose the prior in cum- ' Per Rapallo, J., in Tuthill v. Mor- 'Frost v. Yonkers Savings Bank, 70 ris, 81 N. Y. 94, 99. N. Y. 553 ; Day v. Strong, 29 Hun, ' Harris v. Jex, 55 N. Y. 421. 505. § 408.] DISCHAEGE BT TENDEE. 281 br-ance, made an offer after the entry of a judgment of foreclosure and sale, to pay all moneys due upon it, and requested an assignment ; this was refused, the money was placed in a bank for the owner of the judgment and there left, and aii action was commenced to compel the assignment asked for, with an injunction. The relief was granted, and it was said by Mullin, P. J., that " no distinction is perceived as to the effect of a tender, between that of a mortgagor to a mortgagee, and of a subsequent incumbrancer to the same party to redeem. In each case the effect is to discharge the lien on the mortgaged premises, and if tender discharges the lien in one case, it ought to have the same effect in the other." It will be noticed that the same effect was not given to the tender of the junior incumbrancer, for the tender was kept good, and there is no intimation in the case that it was intended to discharge the lien of the prior mortgage. Actual payment by the jjerson asking to redeem would not have had that effect. If a mort- gage debt is paid by a person who stands in the position of surety for it, either because of his collateral personal obligation, or because of his ownership of a subordinate interest in the property, the debt and lien are not thereby cancelled. They remain in full force, but they are thereafter equitably the property of the surety, and may be enforced by him without any formal assignment.' "When a surety redeems he does not satisfy the mortgage, but he becomes the equitable pm-chaser , of it, and an offer or tender to redeem is an offer to purchase. The rights of the surety are equitable, and it is hard to perceive any just principle upon which he would acquire any rights in the mortgage without keeping his tender good, a thing which the owner of the property would not be obliged to do. So, also, if such surety be re- leased, or if his junior lien be satisfied, and if his tender be not kept good, the owner of the estate upon which the mortgage is a charge, could not avail himself of a tender which was not made or intended for his benefit, and which, if accepted, would have operated only to transfer the lien and to change the ownership of the obligation. § 408. {ContimAied.) — In Bloorwmgdale v. Bcumard (Y Hun, 459), and in Frost v. Yonkers Samings JBank (8 Hun, 26), the right of a junior incumbrancer to destroy any of the rights of a prior mortgagee, or even to delay his remedies by a mere offer to pay, coupled with a demand for an assignment, was distinctly denied, and it was held that the claim to an assignment depended upon the special circumstances ' Ellsworth V. Lockwood, 42 N. Y. 89. 282 MORTGAGES OP EBAL PEOPEETT. [§§ 409-410. of each case, and that it would not be granted except when it was necessary for the protection of equitable rights. § 409. Junior lienor may not discharge by making a tender. — In Frost v. Yonkers Savings Bamk (TO N. T. 553), the Court of Ap- peals declared that the owner of the land subject to a mortgage, com- monly called the owner of the equity of redemption, has the right always to pay and satisfy a mortgage past due. And it matters not whether he is personally liable to pay the debt secured by the mort- gage. The right to discharge his land from the incumbrance is ia- cident to the ownership, and when he makes a lawful tender he destroys the lien.' But a junior incumbrancer may not occupy the same position as the owner of the land. There is certainly not always the same reason for allowing him to discharge the incumbrance, and, if he has such a right, it can only be exercised by an absolute tender of payment, which, if received, will discharge the debt and incum- brance. A tender with a demand for a transfer of a security, does not satisfy these requirements. Such a tender may give a party a footing in equity to compel the transfer desired if he. is otherwise entitled to it, but it does not operate to discharge the hen.' A party having no interest in the mortgaged premises or in the tender made, has no right to make a tender in his own behalf.' PEESUMPTION OF PATMENT FEOM LAPSE OF TIME. § 410. When a mortgage is presumed to be discharged from lapse of time. — It is a well-settled rule, both at law and in equity, that a mortgage is not evidence of a subsisting title, if the mortgagee has not entered, and there has been no interest paid or demanded for twenty years. These facts authorize and require presumption of payment.' Such conclusive presumption does not arise at any earlier time than twenty years after the last payment of principal or inter- est ;' and the mortgagee will not lose his right by lapse of time where there has been a payment of interest, or a promise sufBcient to take the case out of the statutory limit, which promise as the law now ' Citing Kortright v. Cady, 2i N. Y. •• Giles v. Bareraore, 5 Johns. Ch. 545 ; 343 ; Stoddard v. Hart, 23 Id. 560 ; Dunham v. Minard, 4 Paige, 441 ; Borst Hartley v. Tatham, i Keyes, 222. v. Boyd, 3 Sandf. Ch. 501 ; 2 R. S. 301, '•' Frost V. Yonkers Savings Bank, 70 §48; Code of Civ. Pro. §381. N. Y. 553 ; Day v. Strong, 29 Hun, 505. ' Peck v. Mallams, 10 N. Y. (6 Seld.) ' Maher v. Newbauer, 32 Cal. 168. 509 ; Boon v. Pierpont, 28 N. J. Eq. 7. § 411. J DISCHAEGE BY LIMITATIOIiT. 283 stands muBt be in writing/ or where the statute of limitations has been prevented from running by statutory disabilities. If an action is commenced to foreclose and a judgment is entered, the lien is still liable to be defeated by the same presumption of pay- ment founded upon lapse of time. If the mortgage stands alone without payment or proceedings to enforce it for twenty years, the presumption of payment accrues. If by virtue of foreclosure a new security has been taken, the same policy will, under the same circum- stances, raise the same presumption." Upon this principle it has been held that where there has been a foreclosure sale, not followed by a conveyance to the purchaser, or any recognition of the mortgage by the mortgage debtor, it will be presumed after the lapse of twenty years that the land had been redeemed from such sale.' Where a surety paying the debt of the principal becomes subro- gated to the rights of the creditor in a mortgage given by the prin- cipal debtor to secure notes, his action to foreclose the mortgage for his reimbursement is limited to six years, even when the mortgage contains an express covenant to pay the debt." § 411. The statute controls. — The statute of limitations in this State differs essentially from the statute of James I. and from the statutes of limitation in force in most of the other States. Those statutes apply in their terms only to particular legal remedies, and hence courts of equity are said not to be bound by them except in cases of concurrent jurisdiction. In other cases courts of equity are said to act merely by analogy to the statutes and not in obedience to them.' But in this State " the distinction between actions at law and suits in equity and the forms of those actions and suits have been aboUshed," ° and the statute controls all actions whether heretofore denominated legal or equitable. The statute is peremptory and pro- vides as follows : " The following actions must be commenced within the following periods after the cause of action has accrued. "Within twenty years, an action upon a sealed instrument," etc' An action upon a mortgage to enforce its lien is as much barred by this statute as an action on a bond to recover a judgment for money damages, and no help can be given by the coxu-t to the plaintiff unless facts ' Code oi Civ. Pro. § 395. * Arbogast v. Hays, 98 Ind. 26. 5 Per Danforth, J., in Barnard v. ' Lord v. Morris, 18 Cal. 482. ^ Onderdonk, 98 N. Y. 158, 166. " Code of Civ. Pro. § 3339. ' Reynolds v. Dishon, 3 Bradw. (111.) ' Code of Civ. Pro. §§ 380, 381. 173- 284 MORTGAGES OF REAL PROPERTY. [§§ 412-413. can be shown to bring his case within the exceptions which the stat- ute itself prescribes. In this respect the rule here is difiEerent from those States proceeding upon a different principle.' No question of mere presumption of payment can control, for presumptions may be rebutted, but the court must refuse to enforce the lien after twenty years whether payment has been made or not. § 413. Delay in foreclosing for less than statutory period. — "While no conclusive presumption of payment arises in less than the time prescribed by the statute of limitations, the fact that the mortgagee has neglected to assert his rights for any considerable period will be of weight, with other circumstances, as an evidence that payment has been made. In an early case, where no steps had been taken to put the mortgage in force, nor had any demand been made under it for nineteen years previous to the trial, it was said that the jury would have been weU warranted to have presumed it "satisfied." § 413. Payments made by mortgagor after granting mort- gaged estate. — The mortgage wiU continue to be valid so long as the debt which it secures is not barred by the statute, and anything which will prevent the statute from running against the debt, will also pre- vent the remedy on the security from being destroyed by lapse of time. This rule may operate curiously where the mortgaged estate has been acquired by some person other than the one who is personally ob- - ligated for the payment of the debt. Thus, in the case of Hughes v. Edwards (9 Wheat. 490), the Supreme Court of the United States held that purchasers from the mortgagor who had either actual notice of the mortgage at the time of their purchases, or had constructive notice by means of the registry, were bound by a previous acknowl- edgment of the person under whom they claimed, of the existence of the indebtedness within twenty years. In such a case the owner of the property is said to sit in the seat of his grantor, and he is bound by his previous recognition of the mortgage as a subsisting lien upon the premises within twenty years.' Not only wiH the grantee of the mortgaged premises be bound by the acts of the mort- ' In Phibrook v. Clark, 77 Me. 176; for interest or enforcing the mortgage on 32 Alb. L. J. 179, a mortgage was en- that account. forced after twenty years because the ' Jackson v. Pratt, 10 Johns. 381. mortgagor was the mother of the mort- ' Heyer v. Pruyn, 7 Paige, 465. gagee, and he had refrained from asking § 414. J DI8CHAEGE BY LIMITATION. 285 gagor or otlier person under whom he claims, anterior to the convey- ance, but he may also be bound by acts subsequent to the vesting of his rights ; and it has been held that a payment or new promise made by the mortgagor or other person liable to pay the debt, after the per- son so liable has transferred the property, will keep the debt and the security alive as against the estate.' A payment of interest by a tenant for Hfe will keep the mortgage alive as against the persons entitled to the mortgaged estate in re- mainder.' §414. Mortgage under seal not barred until twenty years, though debt be barred in six. — The statute of limitations does not affect the rights of parties, except as it takes away their remedies ;' it does not assume to declare a debt satisfied or paid after a certain space of time, but it only enacts that an action must be commenced within that time, or the courts will not thereafter enforce the demand. If, therefore, a simple contract debt, that is to say, one evidenced in such a way that the statute will prevent an action from being brought upon it after the expiration of six years, is secured by a mortgage under seal, the remedy upon the mortgage by foreclosure will remain for twenty years, though the remedy upon the personal liability of the debtor will be gone at the end of six. Thus, for example, a mortgage under seal to secure a promissory note, may be enforced after the debt has been barred by the statute, and at any time within twenty years.* ' N. Y. Life Ins. & Trust Co. v. Covert, renewal of the mortgage secured thereby 6 Abb. N. S. 154, rev'g s. c. 29 Barb. 435 ; only as between the original parties there- 3 Abb. App. Dec. 250 ; Barrett v. Pren- to, and does not affect the rights of third tiss, 57 Vt. 297. But see contra, Pike parties to the property accruing after ex- V. Goodnow, 12 Allen (Mass.) 472 ; ecution of the mortgage, but prior to the Schmucker v. Sibert, 18 Kans. 104 ; 26 renewal and while the debt was barred. Am. R. 765. Where three persons ex- Cason v. Chambers, 62 Tex. 305. Regu- ecuted their joint and several mortgage lar payment of interest by grantee of on land to secure their joint and several equity of redemption does not prevent promissory note to the mortgagee, and the running of the statute of limitations one of them left the State, and the note against the liability of the grantor on the afterward became barred by the statute obligation. Trustees of Almshouse v. of limitations as to the two who remained Smith, 52 Conn. 434; Butler v. Price, in the State, it was held that the lien of 115 Mass. 578. the mortgage was also barred as to the ' Roddam v. Morley, i Des. & Jo. i. interest in the land, and that it could only ' Waltermire v. Westover, 14 N. Y. (4 be enforced against the interest of the one Kern.) 16. as to whom the note was not barred. * Gillette v. Smith, 18 Hun, 10; Pratt Low V. Allen, 26 Cal. 143. A renewal v. Huggins, 29 Barb. 277 ; Heyer v. of the note after the same is barred by Pruyn, 7 Paige, 465 ; Borst v. Corey, the statute of limitations operates as a 15 N. Y. (i Smith) 510; Thayer v. Mann, 286 MORTGAGES OP HEAL PROPERTY. [§§ 415-416. Upon the same principle, in an action to recover possession of a pledge, given to secure a debt against which the statute of limitations had run at the time of the commencement of the action, it was held that although the creditor had, from lapse of time, lost his remedy against the debtor personally, he had not lost his remedy against the pledge.' Pajnnent is one thing, a mere presumption of payment quite another. The test principle of the whole matter is simply this : the statute of limitations only bars the remedy, and if the creditor has any available security he may enforce it.' The presumption of payment from lapse of time is available as a shield, but not as a weapon of attack or as a ground for affirmative relief, and an action to cancel a mortgage cannot be sustained on the mere ground of lapse of time and without proof of actual payment.' State insolvent laws, hke statutes of limitation, afEect the remedies of creditors and do not operate to cancel debts, and for this reason the lien of a mortgage remains after the discharge of the mortgagor under a State statute.* § 415. The rights of the mortgagor, like those of the mort- gagee, may also be barred by lapse of time, and a grant to the mortgagee may be inferred from continued possession and enjoyment by him for twenty years, under certain circumstances, but this presump- tion wiU be rebutted if the mortgagee commences proceedings to fore- close either by advertisement or by action, and »nch proceedings will revive the right of redemption.' § 416. Possession by a mortgagee of the bond and mortgage is presumptive evidence of payment," especially when they are re- tained by him for many years, and are found among his papers at the time of his death.' igPick. 537; Baldwin v. Norton, 2 Conn, is outlawed. Earnshaw v. Stewart, 64 163; Spears V. Hartley, 3 Esp. 81; Toplis Ind. 513. V. Baker, 2 Cox, 123 ; see Jackson v. ' Jones v. Merchants' Bank of Albany, Sackett, 7 Wend. 94 ; Powell v. Smith, 4 Robt. 221. 30 Mich. 451; jEtna Life Ins. Co. v. 'See article 14 Alb. L. J. 209. Baker, 84 Ind. 301 ; Ballou v. Taylor, ' Allen v. Everly, 24 Ohio St. 97. 14 R. I. 277 ; Thayer v. Mann, 19 Pick. * Heyer v. Pruyn, 7 Paige, 465, 469. 535; Crooker v. Holmes, 55 Me. 195; 'Jackson v. Slater, 5 Wend. 295 ; Cal- 20 Am. R. 687 ; Nichols v. Briggs, 18 S. kins v. Calkins, 3 Barb. 305 ; Calkins v. Car. 474; Capehart v. Dettrick, 91 N. C. Isbell, 20 N. Y. 147. 344. And if the mortgage be given ° Braman v. Bingham, 26 N. Y. 483 ; to secure a note, a personal obligation Garlock v. Goertner, 7 Wend. 198. may be enforced on a covenant to pay 'Levy v. Merrill, 52 How. 360. contained in the mortgage after the note §§ 417-419.] DISCHAEGE OF EECOED. " 287 DISCHAEGE OF MOETGAGES UPON THE EECOED. § 417. Statute. — It is provided by statute that any mortgage that has been registered or recorded, or that may hereafter be recorded, shall be discharged upon the record thereof, by the officer in whose custody it shall be, whenever there shall be presented to him a certifi- cate signed by the mortgagee, his personal representatives or assigns, acknowledged or proved, and certified in proper form to entitle con- veyances to be recorded, specifying that such mortgage has been paid or otherwise satisfied and discharged. Every such certificate, and the proof or acknowledgment thereof, shall be recorded at full length, and a reference shall be made to the book and page containing such record, in the minute of the discharge of such mortgage, made by the officer upon the record thereof.' § 418. Certificate of satisfaction is within the recording acts. — This is a simple mode of reconveying or releasing the land from the lien of the mortgage. The " satisfaction piece " is a " conveyance " under the recording act ; for by it an interest in real estate is aliened and the title of real estate is affected in law and in equity. It oper- ates to transfer back to the mortgagor the mortgage interest held by the mortgagee." While the record of a certificate of satisfaction of a mortgage,, exe- cuted by its apparent record owner, is a protection to a purchaser who pays value on the faith of it,' it is not so to one whose hen was acquired while the mortgage was in full force upon the record as a lien. As to such person, a certificate executed by the mortgagee after he has parted with the mortgage is of no value, though recorded.' § 419. Other means of evidencing discharge. — The statutory method of releasing the lien of a mortgage is not the only permissible or legal means of accomplishing this result, and a quitclaim convey- ance from the mortgagee to the owner of the equity of redemption is commonly made when the object is to release a part of the mort- gaged premises.' A writing on the back of the mortgage may accom- plish the release,' and a bond of indemnity may operate in the same ' I R. S. 761, §§ 28, 2g. Bacon v. Van Schoonhoven, 19 Hun, * Bacon V. Van Schoonhoven, 19 Hun, 158; Mason v. Beach, 55 Wis. 607;. 158. Mabie v. Hatinger, 48 Mich. 341; Wood- ' Ely V. Scofield, 35 Barb. 330 ; Holt bury v. Aikin, 13 111. 639. V. Baker, 58 N. H. 276. ' Waters v. Waters, 20 Iowa, 363 ; * Roberts v. Halstead, g Pa. St. 32. AUard v. Lane, 18 Me. 9. ' Waters v. Waters, 20 Iowa, 363 ; 288 M0ETGAGE8 OP REA.L PROPERTY. [§ 420. way.' A release in writing, but not under seal, of the land covered by the mortgage, though perhaps not good at law, is valid in equity ;' and even an unwritten agreement to satisfy a mortgage for a good consideration is a sufficient defense against a foreclosure of it.' A release under seal from the mortgagee to the mortgagor, whereby for value received and in consideration of one dollar he released the mortgagor from all indebtedness, " whether on book account, note, or any other way," was held to discharge a mortgage to secure a prom-' issory note.* But a release under seal of moneys due on a bond secured by a mortgage, " and also in full of all debts, demands, exe- cutions, and accounts of whatsoever nature," has been held insufficient to justify a discharge of the mortgage lien, there being other evidence that such was not the intention of the parties.' A receipt for the debt would, if uncontradicted, operate to extin- guish the mortgage, but would be open to explanation. A quitclaim deed by a mortgagee of the premises covered by his mortgage may operate as an assignment, or as a release, according as the grantee may elect and equity may require." § 420. The record of discharge is no more valuable than the certificate of satisfaction, and a worthless certificate does not gain anything of vahdity by being engrossed by a recording clerk and noted upon the margin of the instrument.' Thus a forgery is a nul- lity at all times ; and a certificate of discharge, executed by a person not duly authorized to execute it, is no protection even for a iona^fide purchaser, though it be recorded and duly certified by the recording officer.' In the absence of proof of any act on the mortgagee's part mis- leading the purchaser, the fact that the mortgage has been erroneously cancelled of record by the register is no defense to its foreclosure, even if the purchaser has paid full value for the premises in good faith and relying on the record." ' Archambau v. Green, lo Minn. 520. ' Harris v. Cook, 28 N. J. Eq. 345 ; ' Headly v. Gormdry, 41 Barb. 279 ; Mechanics' Building Association v. Fer- Wallis V. Long, 16 Ala. 738. guson, 29 La. Ann. 548. ' Griswold v. Griswold, 7 Lans. 72, ° Swarthout v. Curtis, 5 N. Y. (i Seld.) affi'd 52 N. Y. 631. 301 ; Farmers' Loan & Trust Co. v. Wal- ■• Van Bokkelen v. Taylor, 62 N. Y. worth, i N. Y. (i Comst.) 433. 105. ' Brown v. Henry, 106 Penna. St. 262; ' Jackson v. Stackhouse, i Cow. 122. Lancaster v. Smith, 17 P. F. Smith (Pa.) ' Thayer v. McGee, 20 Mich. 195. 427. §§ 421-422. J DISCHARGE OF KECOKD. 289 § 421. Who may execute certificate of satisfaction. — Tliis statute does not mean that all of the mortgagees, or their personal representatives, must execute and acknowledge the certificate of satis- faction in order to authorize the officer in whose custody the record of the mortgage shall be, to record it, and discharge the mortgage on the record. Such certificate is sufficient if executed and acknowl- edged by any person or persons authorized to receive payment of the mortgage ;, as, for instance, a mortgage may be cancelled by any one of the executors of a mortgagee.' If a mortgage is discharged upon the record by a person who ap- pears by the record to be the owner of it, even though it has actually been assigned, it will operate to cancel the mortgage as against sub- sequent purchasers and mortgagees in good faith and without notice, but as to all other persons the validity of the mortgage will not be impaired." Where a discharge of a recorded mortgage is executed by a person other than the mortgagee, as by a guardian of an infant, a subsequent purchaser is bound to inquire by what authority such person assumed to discharge it, and he is chargeable with notice of all the facts which the reasonable prosecution of such inquiry would ehcit. Where, therefore, a guardian for infants was directed to give a bond previous to satisfying a mortgage, and he failed to give the bond and executed the certificate of satisfaction which was recorded, it was held that such discharge did not protect subsequent hona fide incumbrancers against the claims of the infants by virtue of their mortgage.^ § 423. Discharge by officer of limited powers. — Where moneys deposited with a special officer, as a clerk of the Court of Chancery, have been invested under special directions of the court, in a mort- gage payable to such officer in his official capacity, such clerk has no power to discharge the mortgage without the order of the court ; and if he do execute such a discharge vnthout actual payment, and with- out the order of the court, it is void even as against lona fide pur- chasers of the property.* ' The People v. Keyset, 28 N. Y. 226 ; gages to the People of this State may be Stuyvesant v. Hall, 2 Barb. Ch. 151. discharged of record upon the treasurer's 2 Ely V. Scofield, 35 BarJ). 330. receipt, countersigned by the comptrol- = Swarthoutv.Curtis,5N.Y.(iSeld.)30i. ler, setting forth that the whole sura due * Farmers' Loan & Trust Co. v. Wal- on such mortgage has been paid, i R. S. worth, I N. y. (i Corast.) 433. Mort- 175, §§ 36, 37. 19 290 MORTGAGES OF EEAL PKOPEETY". [§§423-425. § 423. Right of person paying mortgage to certificate of sat- isfaction. — It is a matter of serious importance to the owner of mort- gaged premises that upon payment of the mortgage debt he should be furnished with a document which will cancel the apparent lien of record. He is, in equity and fairness, entitled to a proper voucher. But there is no summary way in which a delivery of a certificate of satisfaction can be enforced. The remedy of the mortgagor, in case a certificate of satisfaction is refused, is to pay the debt in the sight of witnesses, and then to bring an action to cancel the mortgage and compel the execution of a satisfaction piece.' Where the mortgage is in the form of an absolute deed, with a parol defeasance, the grantee may, on payment of the debt, and in an action brought for that purpose, be required to execute a reconveyance." A person demanding a certificate of satisfaction of a mortgage, should prepare the instrument and present it to the mortgagee, at the same time offering to pay the expenses of execution." § 424. Actions to discharge mortgages. — It is in the power of a court of equity either to cancel a mortgage shown to be discharged or paid, or to revive a mortgage where the cancellation of it has been obtained by fraud and the equitable rights of the parties require such relief." An action to cancel a mortgage may also be brought by the mortgagor if it be usurious, or if the parties differ as to the amount owing upon it, and the plaintiff may in one action ask to have a mort- gage discharged because it is paid, and also to be allowed to redeem if it be not fully paid." A county court has jurisdiction of an action to compel the satisfac- tion of a mortgage, and for damages for a wrongful refusal of the rnortgagee to execute a certificate of satisfaction.' § 435. Who may bring action to discharge mortgage. — An action to cancel a mortgage or other lien cannot be maintained by a person who has no interest in or lien upon the land affected by it. Even though the plaintiff has warranted the title against the lien,' or 1 Beach v. Cooke, 28 N. Y. 508; Barnes '' Pettengill v. Mather, 16 Abb. 399. V. Camack, i Barb. 392 ; Sutherland v. * Barnes v. Camack, i Barb. 392. Rose, 47 Barb. 144 ; Beecher v. Acker- ' Beach v. Cooke, 28 N. Y. 508 ; Suth- man, i Abb. N. S. 141 ; Sherwood v. erland v. Rose, 47 Barb. 144 ; Beecher Wilson, 2 Sweeny, 684 ; Verges v. Gibo- v. Ackerman, i Abb. N. S. 141. ney, 47 Mo. 171. ' Mosher v. Campbell, 30 Hun, 230. " Sherwood v. Wilson, 2 Sweeny, 684 ; ' Bissell v. Kellogg, 60 Barb. 617. .Kenton v. Vandergrift, 42 Pa. St. 339. § 426. J DISCHAKaE OF EECOED. 291 has conveyed the land with a covenant with his grantee to procure the lien to be discharged/ this wiU not furnish a proper basis for the action. But where a plaintiff had conveyed the lands covered by a mort- gage, and the purchaser had withheld an amount of the purchase money sufficient to pay the amount unpaid upon the mortgage, and the same was deposited in a trust company to abide the event of a proceeding to procure a satisfaction of the mortgage and to pay what- ever might be found due thereon, the action was held properly brought by him." The inchoate title of a purchaser of lands on execution after the expiration of the time for redemption by the judgment debtor, is such an interest and title as entitles the purchaser to maintain an action for the cancellation of instruments or incumbrances which, within the doctrine of courts of equity, are clouds upon the title." And, in re- spect to paid judgments and mortgages, it is well settled that the court may grant relief by compelKng their satisfaction of record where they are continued as apparent liens for inequitable purposes.' § 426. Action for damages for refusal to execute discharge. — The statutes of many of the States require a mortgagee, on full pay- ment being made or tendered to him, to furnish a proper voucher or release sufficient to remove the apparent lien from the record under a specific penalty to be recovered by action. No such remedy can be had in this State, but an equitable action will lie to compel satisfac- tion and for actual damages sustained by an unreasonable refusal to execute a proper certificate of satisfaction.^ Even where a statutory penalty is attached to a refusal to execute a proper discharge, this penalty will not be enforced where the mort- gagee honestly believes that his claim is not satisfied and refuses on that ground.' It has been said that damages can be recovered for a wrongful re- fusal to execute a proper document to remove the apparent lien of a mortgage from the record ; but it is by no means well established what the proper measure of damages would be in such an action. ' Townsend v. Goelet, ii Abb. Pr. 187. erty, 81 N. Y. 474 ; i Story's Eq. § 703 ; ' Levy V. Merrill, 14 Hun, 145. Radcliff v. Rowley, 2 Barb. Ch. 23 ; ' Remington Paper Co. v. O'Dough- Shaw v. Dwight, 27 N. Y. 244. erty, 81 N. Y. 474. ' Mosher v. Campbell, 30 Hun, 230. ■• Remington Paper Co. v. O'Dough- * Huxford v. Eslow, 53 Mich. 179. 292 MORTGAGES OF REAL PROPEETT. [§§ 427-428. Such damages only can be recovered as are tlie necessary and legiti- mate results of the wrongful refusal, and a judgment rendered against a mortgagee, whose mortgage was in the form of an absolute convey- ance with a parol defeasance, for the difference between the amount of the loans and the interest thereon from the time of making the same and the time when the defendant refused to reeonvey, and the market value of the land at the latter time, and the counsel fees in- ■curred by the plaintiff in an equity suit brought against the defendant and others, was reversed as altogether unauthorized.' It was also said to be doubtful as to whether any action for damages could be sus- tained after the plaintiff had pursued his equitable remedy to judg- ment." § 427. Effect of discharging lien upon the debt. — The execut- ing of a certificate of satisfaction and the discharge of the mortgage upon the record does not, of itself, discharge the debt, but only the security." And a release of part of the mortgaged premises does not, in the absence of equities of third persons, impair the debt or reduce the amount of the lien on the other property." A release made by the holder of a first mortgage, solely for the purpose of giving priority to a second mortgage, will not prevent the foreclosure of the mortgage as against the mortgagor.' § 438. Special proceedings to discharge mortgages of record in certain cases. — It will sometimes happen that a mortgage will be allowed to remain uncancelled upon the record, though the debt which it has been made to secure has been paid. In order to provide for such cases, it has been enacted that the mortgagor named in, or any person having any interest in any lands described in any mortgage of real estate in this State, which is recorded in this State, and which, from the lapse of time, is presTimed to be paid, may present his peti- tion to the courts mentioned in this act, asking that such mortgage may be discharged of record. Such petition shall be verified ; it shall describe the mortgage, and when and where recorded, and shall allege that such mortgage is paid ; that the mortgagee has, or if there be more than one mortgagee, that all of them have been dead for more than five years ; or if such mortgagee be a corporation or association, that such corporation or association has ceased to exist and do business as ' Marvin v. Prentice, 94 N. Y. 295. * Edgington, Adm'r, v. Hefner, 81 111. 'Id. 341- ' Sherwood v. Dunbar, 6 Cal. 53. ' Wood v. Wood, 61 Iowa, 256. § 429.J DISCHAEGE OF RECOED. 293 Buch for more than five years ; the time and place of his or their death, and place of residence at the time of his or their death ; whether or not letters testamentary or of administration have been taken out, or, if a corporation or association, its last place of business ; the names and places of residence, as far forth as the same can be ascertained, of the heirs of such mortgagee or mortgagees; or if such mortgagee be a corporation or association, then the names of one or more of the receivers, if any were appointed, or of the person who has the care of closing up the business of such corporation or association ; and that such mortgage has not been assigned or transferred, and if such mort- gage has been assigned, state to whom, and the facts in regard to the same. Provided, however, that if such mortgage has been duly as- signed by indorsement thereon or otherwise, but not acknowledged so as to entitle the same to be recorded, then it shall be competent for the court at any time within the period aforesaid, upon proof that all the matters hereinbefore required to be stated in said petition are true, and that the assignee of such mortgage, if living, or his personal representative, if dead, has been paid the amount due thereon, to make an order that such mortgage be discharged of record. § 429. Such petition may be presented to the Supreme Court in the county where the mortgaged premises are situate, or when situate in the city of New York, to the Superior Court thereof, or when situate in the city of BufEalo, to the Superior Court thereof. The court, upon the presentation of such petition, shall make an order requiring all persons interested to show cause at a certain time and place, why such mortgage should not be discharged of record. The names of the mortgagor, mortgagee, and assignee, if any, the date of the mortgage and where recorded, and the town or city in which the mortgaged premises are situate, shall be specified in the order. The order shall be published in such newspaper or newspapers, and for such time as the court shall direct. The court may also direct the order to be personally served upon such persons as it shall designate. The court may issue commissions to take the testimony of witnesses, and may refer it to a referee to take and report proofs of the facts stated in the petition. The certificate of the proper surrogate or sur- rogates, whether or not letters testamentary or of administration have been issued, shall be evidence of the fact ; and the certificate of the clerk of the county or counties in which the mortgaged premises have been situate since the date of said mortgage, shall be evidence of the 294 MORTGAGES OF REAL PROPERTY. [§§430-431. assignment of such mortgage, or of the notice of the pendency of an action to foreclose such mortgage, and of such other matters as may be therein stated ; or if a notice of the pendency of an action to fore- close such mortgage has been filed, then his certificate that such mort- gage has never been foreclosed. Upon being satisfied that the mat- ters alleged in the petition are true, the court may make an order that the mortgage be discharged of record; The county clerk, upon being furnished with a certified copy of such order, and paid the fees al- lowed by law for discharging mortgages, shall record said order and discharge the mortgage of record.' § 430. This statute was designed to remove an incumbrance which has been paid, and an allegation of payment must be explicitly made in the petition. The object of the statute seems to have been to relieve mortgagors and those claiming under them in a summary way from an incumbrance which, as stated in the first section of the act, from the lapse of time, is presumed to be paid, if it have in fact been paid, but satisfaction of which cannot be obtained without a^ formal proceeding therefor in a court of equity, in consequence of the death of the mortgagee, and of the fact that no letters testamentary or of administration have been granted in this State.'' The fact of payment must be distinctly alleged and proven, and it is not sufficient to show that the mortgage is so old that the statute of limitations would be a good defense if a foreclosure were to be attempted upon it.' SETTING ASIDE AND CANCELLING THE DI8CHAEGE OF A MORTGAGE. § 431. Certificate of satisfaction cancelled for fraud or mis- take. — A court of equity will set aside a cancellation of a mortgage upon satisfactory proof that it was procured by fraud, or done by mistake, provided it can be done without prejudice to any rights ac- quired upon the faith of such cancellation.* If it be established that a certificate of satisfaction was executed ' Laws of 1862, c. 365, as amended by v. Schafifer, Id. 401 ; Hampton v. Nich- Laws of 1868, c. 798, and Laws of 1873, olson, Id. 423 ; Stover v. Wood, 26 Id. c. 551. 417 ; Ellis V. Lindley, 37 Iowa, 334 ; ''Brady, J., in the matter of Town- Cobb v. Dyer, 6g Me. 494 ; Hollenbeck send, 4 Hun, 31 ; s. c. 6 N. Y. Sup. (T. v. Shoyer, 16 Wis. 499 ; Mallett v. Page, &C.) 227. 8 Ind. 364; Barnes v. Camack, i Barb. 2 The matter of Townsend, supra. 392 ; compare Chew v. Chew, 23 N. J. ^ Russell V. Miner, 42 Cal. 475 ; Dud- Eq. 471. ley V. Bergen, 23 N. J. Eq. 397 ; Dubois §§432-433.] CANCELLING DISCHAEGE. 295 tlirough fraud or mistake, it should be declared void, and, as be- tween the parties to it, the mortgage will continue a vahd lien upon the premises. Those who acquire subsequent titles or liens stand in no better condition than the mortgagor, unless they are hona fide purchasers or incumbrancers for value and without notice, in which case they will be protected.' But if the fraud by which the certificate is obtained amounts to a felony, it is utterly void as to all persons. By felony, in this con- nection, those acts are intended which constitute felonies at common law, and not statutory felonies; and a discharge obtained by false pretenses merely will be valid to protect a hona fide purchaser.'' § 432. A release can only be operative where it is duly de- livered, and, upon this principle, where a mortgagee executed a re- lease of one of two parcels of land covered by the mortgage and sent it to a third party to deliver to the mortgagor, provided his said mortgage was a first lien on the remaining parcel, and the mortgagor knew of the condition ; but because of mistake as to the facts the agent delivered the release, and the mortgage proved not to be a first lien as provided, it was held that the delivery did not bind the mort- gagee." Where a release of a mortgage was executed by the mortgagee, and sent to an agent to be delivered on payment of the balance due on the mortgage, and a subsequent purchaser procured the same to be sur- rendered to him upon his promise to pay in a few weeks, which he neglected to do, it was held that the release was inoperative." It has even been said that an innocent purchaser would not be protected by the record of a certificate of satisfaction not duly de- livered.' § 433. Reinstating mortgage so as to protect against junior liens. — Where a mortgagee took a part of the property in satisfaction of his mortgage, in ignorance of subsequent mortgages which had been fraudulently concealed, an action was sustained to set aside the satisfaction piece." Again, a purchaser of property who paid a mortgage, and caused ' Fassett v. Smith, 23 N. Y. 252. « Lambert v. Leland, 2 Sweeny, 218 ; ° Id. State V. Newark, 25 N. J. 197 ; Gunn v. 8 Rose V. Rose, 20 W. Dig. 334. Barry, 15 Wall. 610 ; Columbia Bank v. * Hale V. Morgan, 68 111. 244. Jacobs, 10 Mich. 349; Bennett v. Nichols, = Stanley v. Valentine, 79 111. 544. 12 Id. 22 ; French v. Stone, 6 Cent. L. J. 296 MOKTaAGES OF REAL PKOPEETT. [§§ 434-435. it to be satisfied lq ignorance of a subsequent judgment, was held entitled to have the mortgage revived for his protection.' Where a mortgagee, for the purpose of extending the time of pay- ment, took new notes secured by a new mortgage on the same land, giving up the old notes and entering satisfaction of the old mortgage, in ignorance of the fact that the mortgagor had, only a day or two before, given another mortgage to a third person, which was on record at the time, it was held that in equity his lien on the land was not subordinate to the intervening mortgage, and his lien was rein- stated.^ Where a mortgagee discharged his mortgage on certain lands in consideration of a conveyance of a portion of them, which he under- stood to be unincumbered, but on which, in fact, an attachment had been levied since the mortgage had been given, it was held that the discharge should be set aside.^ § 434. Where a valid lien is discharged in consideration of an invalid one. — Where a usurious mortgage was given in consider- ation for the cancellation of two valid securities and the new mort- gage was adjudged void for the usury, the court, in an action brought for that purpose, set aside the certificates of satisfaction of the two prior mortgages, and declared them valid and subsisting liens upon the land." Upon a similar principle a lender who paid a mortgage and pro- cured it to be discharged, relying upon a mortgage which was void for lack of power in the mortgagor to execute it, was subrogated to the paid mortgage, and the cancellation of it was set aside for his protection.' A satisfaction executed oa the faith of a check or note which is not paid may be cancelled and the mortgage reinstated and enforced." §435. Satisfaction on the record set* aside. — Where a mort- ' Barnes v. Mott, 64 N. Y. 397, 401 ; * Underhill v. Crennan, 25 Hun, 569 ; Hutchinson v. Swartsweller, 31 N. J. Eq. Patterson v. Birdsall, 64N.Y. 294, affi'g 205 ; Wilson v. Kimball, 27 N. H. 300. s. c. 6 Hun, 632. = Campbell v. Trotter, 100 111. 281 ; ' Gans v. Thieme, 93 N. Y. 225 ; Gil- Bruse V. Nelson, 35 Iowa, 157. bert v. Gilbert, 39 Iowa, 657; Trades- ' French v. De Bow, 38 Mich. 708 ; men's Association v. Thompson, 32 N. Michigan Panelling Co. v, Parvell, 38 J. Eq, 133 ; Lockwood v, Marsh, 3 Nev. Mich. 475; Columbia Bank v. Jacobs, 10 138, Mich, 349 ; Shaver v, Williams, 87 111, ' Middlesex v. Thomas, 20 N. J. Eq. 469; i§ AiP. h. Reg, (N, S.) 132, 391 J Hollenbeckv. Shoyer, 16 Wis. 499. § 486.] cajstcellijstg disohae&e. 297 gage security is paid by a surety or other person having equitable rights as a surety, by reason of subsequent interest in the mortgaged property, the person making such payment becomes entitled to en- force the mortgage under the equitable doctrine of " subrogation." " Such right is never allowed to be defeated as against persons not hona fide purchasers because of circumstances that a formal discharge was executed. The cases on this doctrine are numerous and are collated in another part of this work." § 436. Who may resist the reinstatement of a cancelled mort- gage. — A discharge of a mortgage upon the record, though obtained by false and fraudulent representations, will be a complete protection to a purchaser for value and without notice, as to whom the record will no longer be notice of its existence.' But a mere judgment creditor of the mortgagor has no equity that will enable him to resist the reinstatement and enforcement of the mortgage," though a pur- chaser under the judgment has been said to stand in a better position.^ A person who has parted with value and taken a deed or mortgage upon land is protected against a mortgage then discharged of record, because such is the provision of the recording act,^ and for no other reason. The cancelled mortgage, though it may still be valid, having been stricken from the record, stands as an unrecorded mortgage, and the rights of the parties are to be measured as if it had never been recorded. An unrecorded mortgage has priority over a subsequent judgment recovered against the mortgagor, and therefore a discharge fraudulently obtained may be cancelled, though the effect of such can- cellation is to divest the lien of a judgment recovered for a meritori- ous consideration, even in reliance upon the discharge. So, a junior mortgagee who grants indulgence to the mortgagor in reliance upon a discharge of the prior mortgage and thereby largely increases his lien, may not resist a cancellation of the discharge if the facts render such cancellation equitable as between the original parties to it. The mere delay and granting of indulgence does not render the junior ' See § 444 ; title, Subrogation^ ' Fassett v. Smith, 23 N. Y. 252 ; Viele '§§ 444, 456; see also Robinson v. v. Judson, 15 Hun, 328; Etzler v. Evans, Leavitt, 7 N. H. 95 ; Rigney v. Lovejoy, 61 Ind. 56 ; Hedden v. Cowell, 37 N. J. 13 N. H. 252 ; Wilson v. Kimball, 27 N. Eq. 89 ; Turner v. Flinn, 72 Ala. 532. H. 300 ; Kinsley v. Davis, 1883, Feb. * Stanley v. Valentine, 79 111. 544. (Me.) ; 27 Alb. L. J, 473 ; Wheeler v. * Vannice v. Bergen, 16 Iowa, 555. Willard, 44 Vt. 640. » I R, S. 756, § i. 298 MOETGAaES OF EEAL PEOPEETT. [§§ 437-438. mortgagee a hona fide purchaser within the meaning of the record- ing act.' A grantee of mortgaged premises whose conveyance recites that the property is subject to a mortgage, has no equity to resist the can- cellation of it upon the record, if he has not paid it and such cancel- lation was made under a mistake of fact.'' Where a note and mortgage was assigned as collateral security, and thereafter, either by fraud or mistake, the mortgagee caused it to be marked satisfied upon the record, it was still treated as a valid and subsisting mortgage in favor of the assignee against a subsequent mortgagee vdth notice.' If the assignment had not been recorded and no notice of it could have been shown, the rule would have been otherwise.* § 437. The law protects only the vigilant. — "Where by a mutual agreement the mortgagor was to procure money from a third party and pay ofE the mortgage, which the mortgagee was to release, and the lender was to have a new mortgage, and all three parties met in the register's office to carry out the transaction, which was so far car- ried out as to have the release of the old mortgage and the new mort- gage both delivered, and the money was given to the mortgagor, who suddenly fled with it, it was held that the release could not be set aside, and that the loss must fall upon the prior mortgagee, who had parted with the release before getting the custody of the money.' Upon a similar principle, where, through failure of the assignee of a mortgage to record his assignment, the way was opened for a fraudu- lent satisfaction of the mortgage by the assignor, and the mortgagor, acting in good faith, paid the amount due to the assignor, the assignee was without remedy under the mortgage." § 438. Action for damages for unauthorized discharge. — Where a person not entitled to receive the money due upon a mort- gage, having assigned it, still appears of record to be its owner, a certificate of discharge executed by him will be a protection to a hona fide purchaser, but he wiU be liable to an action for damages by the ' Weaver v. Edwards, 39 Hun, 233. * Daws v. Craig, 62 Iowa, 515 ; Bank, ' Cobb V. Dyer, 69 Me. 494. etc., v. Anderson, 14 Iowa, 544. ' Gibson v. Milne, i Nev. 526 ; Clift ' Robbins v. Todman, 28 Kans. 491. v. Nay, 105 Ind. 355 ; Burton v. Reagan, * Daws v. Craig, 62 Iowa, 515 ; Bank, 75 Ind. 77 ; Anderson v, Hubble, 93 Ind. etc., v. Anderson, 14 Iowa, 544. 570 ; 47 Am. R. 394. §§ 439-440.] KEissuE of paid moetgage. 299 true owner if such discharge was unauthorized. In such an action the measure of damages will be the value of the part of the security released, not exceeding the amount of the debt secured.' In an action by the assignee of a note secured by mortgage against the assignor, to recover damages for the alleged unlawful act of the defendant in satisfying such mortgage while the note remained un- paid, the complaint should allege the value of the security, which will be the measure of damages." EEISSTJE OF PAID MOETGAGE. § 439. Mortgage absolutely cancelled by payment of debt.— A mortgage executed to secure a specific debt ceases to have any force after the payment of that debt, and cannot be revived to secure a new obligation, even as between the parties, without a new grant.^ The written evidence of one contract cannot be used as the evidence of another and a different contract ; and when the original object for which the mortgage was given has been fully accomplished and satis- fied, it cannot be revived and kept on foot by a parol agreement sub- sequent to its creation, for other objects than those agreed upon at the time of its execution. The debt is the principal thing and the mortgage a mere incident. The first is the substance, the latter its shadow. When the first is destroyed by payment the latter vanishes. It cannot become the incident to another principal nor the shadow of another substance.* § 440. A mortgage made at its inception to secure future ad- vances, or for a general balance of account arising on a series of transactions, stands on a different footing. As between the parties there may be times when the security could not be enforced for any sum, and thereafter it could grow and diminish in value according to ' Stebbins v. Howell, 4 Abb. App. ^Per Shankland, J., in Mead v. York, Dec. 297. 6 N. Y. (2 Seld.) 449 ; see also Spencer * Fox V. Wray, 56 Ind. 423. v. Fredendall, 15 Wis. 660 ; Darst v. ^ Stoddard v. Hart, 23 N. Y. 556 ; Gale, 83 III. 136 ; Johnson v. Anderson, Hubbard v. Blakeslee, 8 Hun, 603 ; 30 Ark. 745 ; Peckham v. Haddock, 36 Bank of Utica v. Finch, 3 Barb. Ch. 111. 38. A new delivery of a paid mort- 293 ; James v. Morey, 2 Cow. 246, 292 ; gage has been held to make a new mort- Townsend v. Empire Stone Dressing gage of it. Underbill v. Atwater, 22 N. Co., 6 Duer, 208 ; Merrill v. Chase, 85 J. Eq. 16. And a brief memorandum Mass. (3 Allen) 339 ; Thomas' Appeal, under seal indorsed on an old mortgage 30 Pa. St. 378 ; Nosier v. Haynes, 2 would doubtless create a new lien. Cha- Nev. 53. teau v. Thompson, 2 Ohio St. 114. 300 MORTGAGES OF EEAL PROPERTY. [§§ 441-442. the varying condition of the account. But all of this would be in accordance with the contract made at the time of the creation of the lien, and the wide latitude for the admission of parol proof to demon- strate the real nature of the contract, has heretofore been considered in treating of mortgages for future advances.' Where the defeasance is by parol and the mortgage is in the form of a conveyance absolute on its face, the security may be peculiarly elastic, and it has even been said, that in the absence of proof, the presumption would be that new credits or new advances were given or made by" the creditor on the faith of the security in his hands.'' If this be so, it is because of a presumed contract made at the time of the original grant, for even in the case of a mortgage with a mere parol defeasance, something more than a subsequent parol agreement is necessary to enlarge the lien.' §441. Debt must be actually satisfied. — ^But in order that a mortgage shall cease to have force, the debt must actually be paid and satisfied, and we have already seen that this is frequently a question depending on niceties of intention and of fact, and that the mere circumstance that the debtor delivers money or property to his cred- itor is not always controlling.' Although a mortgage may be without force as between the parties because of payment, this will not be allowed to defeat the claims of a purchaser of the securities on the faith of its apparent validity, if the sale is made with the approval and concurrence of the mortgagor.' In such a case the mortgagor will be estopped from alleging that the mortgage is satisfied. This principle has also been declared where a purchaser of land who had paid notes secured by mortgage, obtained a loan on such notes by representing them to be valid." § 442. Reissued mortgage sustained to do equity. — Equitable principles have sometimes successfully been invoked in aid of an at- tempt to hold a mortgage for a debt created subsequent to the crea- tion of the lien, and a court of equity wiU not grant affirmative rehef ' Ante, §§ 193 to 197. II Paige, 228 ; Hubbell v. Blakeslee, 71 ''Jarvis v. Rogers, 15 Mass. 389; N. Y. 63, 70 ; Coles v. Appleby, 87 N. Y. James v. Johnson, 6 Johns. Ch. 417, 429. 114 ; Champney v. Coope, 32 N. Y. Contra, Ex parte Hooper, 19 Ves. 477. 543. 2 Walker v. Snediker, Hoff. Ch. 145 ; ' Purser v. Anderson, 4 Edw. Ch. 17 ; Johnson v. Anderson, 30 Ark. 745. Underhill v. Atwater, 22 N. J. Eq. 16 ; ^ Ante, §§ 335 to 341 ; Peck v. Mi- Jordan v. Forlong, 19 Ohio St. 89. not, 3 Abb. App. Dec. 465 ; Bockes v. ' International Bank v. Bowen, 80 111. Hathorn, 20 Hun, 503 ; Toll v. Hiller, 541. §§ 443-444. J suBEOGATiosr. 301 against such a mortgage, except upon condition of doing equity.' So, where an agreement to revive the hen of a paid mortgage to se- cure a new debt was held to be inoperative on the ground that a new instrument under seal was legally necessary, justice has been done by giving effect to the contract by holding that it operated as an equita- ble mortgage." § 443. Junior titles and liens always protected. — However the rule may be as between the parties primarily obligated to pay the mortgage debt, and those entitled to demand such payment, it is en- tirely clear that a mortgage which has once been cancelled by pay- ment cannot afterward be revived to the prejudice of persons whose rights have vested prior to such attempted revival.'' And the case will not be altered by the circumstance that no receipt for such pay- ment is given.* SDEEOGATION. § 444. General principles upon which subrogation is allowed. — It is a general principle controlling in courts of equity that where a surety, or one in the position of a surety, pays the debt of his prin- cipal, he is entitled to be put in the place of the creditor, and to all the means which the creditor possessed, to enforce payment against the principal.* Chancellor Kent said, in Hayes v. Wa/rd (4 Johns. Ch. 130) : " This doctrine does not belong merely to the civil law system. It is equally a settled principle in the English chancery, that a surety will be entitled to every remedy which the creditor has against the principal debtor, to enforce every security, and to stand in the place of the creditor, and have his securities transferred to him, and to avail himself of those securities against the debtor ; the right of the surety stands not upon contract, but upon the same prin- ' Joslyn V. Wyman, 87 Mass. (5 Allen) fingwell, 4 Mo. App. 525 ; Bowman v. 62 ; Merrill v. Chase, 85 Id. (3 Allen) 339. Manter, 33 N. H. 530. ^ Peckham v. Haddock, 36 111. 38. * Large v. Van Doren, 14 N. J. Eq. 208. * Marvin v. Vedder, 5 Cow. 671 ; Pur- ' Wadsworth v. Lyon, 93 N. Y. 201, 212; ser V. Anderson, 4 Edw. Ch. 17 ; Mc- Champney v. Coope, 34 Barb. 539 ; 32 Given v. Wheelock, 7 Barb. 22 ; Mead N. Y. 543 ; Lewis v. Palmer, 28 N. Y. V. York, 6 N. Y. 449 ; Warner v. Blake- 271 ; Harbeck v. Vanderbilt, 20 N. Y. man, 36 Barb. 501 ; Kellogg v. Ames, 41 395 ; Clason v. Morris, 10 Johns. 524 ; Barb. 218 ; Champney v. Coope, 32 N. Wilkes v. Harper, 2 Barb. Ch. 338 ; Y. 543, rev'g 34 Barb. 539 ; York Co. Matthews v. Aikin, i N. Y. (i Comst.) Savings Bank v. Roberts, 70 Me. 384 ; 595 ; Hodgson v. Shaw, 3 Myl. & K. Gardner v. James, 7 R. I. 396 ; Jones v. 183 ; Edgerly v. Emerson, 3 Foster (N. Brogan, 29 N. J. Eq. 139 ; Swope v. Lef- J.) 555 ; Story's Eq. Jur. § 499. 302 MOETGAGES OP BEAL PEOPEKTY. [§ 445. ciple of natural justice upon which one surety is entitled to contri- bution from another." This right of subrogation, as it is called, does not depend upon any assignment, but rests upon principles of equity and fairness. In an- other part of this work the right to an evidence of transfer on pay- ment being made is considered.' The present topic touches the rights of parties in the absence of any formal assignment. The doctrine of subrogation is a device to promote justice. "We shall never handle it unwisely if that purpose controls the effort, and the resultant equity is steadily kept in view.' The right to be subrogated on payment is not identical with the right of redemption.' No person has a right to redeem from a mort- gage except the mortgagor and those who have derived some interest in or lien upon the mortgaged premises under him ;' but the right to pay and be subrogated belongs to every surety. The doctrine of subrogation or substitution, at first applied in be- half of those who were bound by the original security with the prin- cipal debtor, has been greatly extended ; and the principle, modified to meet the circumstances as they have arisen, has been applied in favor of volunteers intervening subsequent to the original obUgation, and as between different classes of sureties, and in the marshalling of assets, and prescribing the order in which property and funds shall be subjected to the discharge of different classes of obligations, and as between different classes of creditors, so as to do substantial justice and equity in each case." Where the payee of a promissory note transferred it by indorse- ment, and the maker thereafter secured the debt by a mortgage to the indorser, and the payee was afterward compelled to pay the note, he was held entitled to enforce the mortgage for his indemnity." § 445. Volunteer or meddler is not protected by subrogation. • — A mere stranger who voluntarily pays money due on a mortgage, ' Chap. XVIII., tit. Redemption. ' Per Allen, J., in Barnes v. Mott, 64 N. •^ Per Finch, J., in Acer v. Hotchkiss, Y. 397, 402; Story's Eq. Jur. §§ 633, 635, 97 N. Y. 395, 402. 636 ; Bank of United States v. Winston, ' Ellsworth V. Lockwood, 42 N. Y. 89. 2 Brock. 252 ; Ingalls v. Morgan, 10 * Story's Eq. Jur. § 1023 ; Grant v. N. Y. (6 Seld.) 179 ; Atlantic Ins. Co. v. Duane, 9 Johns. 612 ; Lomax v. Bird, i Storrow, 5 Paige, 285 ; Graham v. Dick- Verm. 182 ; Boarman v. Catlett, 13 Sm. inson, 3 Barb. Ch. 169. & Marsh (Miss.) 149 ; McDougald v. * O'Hara v. Haas, 56 Miss. 374 ; Ott- Capron, 7 Gray, 278 ; Porter v. Read, man v. Moak, 3 Sand. Ch. 431 ; Drew v. ig Maine, 363. Lockett, 52 Beavan, 499. § 446.] SUBEOGATION. 303 and fails to take an assignment of it, but allows it to be cancelled and discharged, cannot afterward come into equity, and in the absence of fraud, accident, or mistake of fact, have the mortgage reinstated and himself subrogated to the rights of the mortgagee.' A stranger to a mortgage debt has a right to bargain for its pur- chase and to take an assignment which will vest in him all of the rights of the mortgagee," but a court of equity will not lend its aid to enforce a claim of a mere volunteer to pay off a mortgage on the lands of another, neither will it subrogate such a volunteer to the rights of a mortgagee under a mortgage thus paid.° In order that a person shall be excluded from the benefit of a right to subrogation, he must be in truth a mere volunteer and meddler in an afiair that does not concern him, since the rule appears to be to grant the right to every one else . whose equitable rights appear to require it. All persons bound as sureties for the debt, or holding junior Hens on the property, or holding an interest in the property as dowress or tenant by the courtesy or the hke,' are protected by sub- rogation. And even a third person may be subrogated to the rights of a lienor if he pays such Uen at the request of a person personally obligated for its payment, or who is the owner of the estate upon which it is a charge.^ So, where one advances to another money to pay a lien on the latter's property and he is to receive a security for his loan, and the security given is for any cause void, the lender will be subrogated by a court of equity to the rights of the paid lienor, and may enforce them as far as necessary to make good his debt where no prior equities have intervened." A third person may also have a mortgage which has been paid by him revived for his benefit, when fraud, accident, or mistake make it equitable that this should be done.' § 446. For the purpose of being entitled to subrogation every person is a surety who is compelled to pay a debt not his own, either ' Acer V. Hotchkiss, 97 N. Y. 395 ; Guy son v. Parmely, 14 Hun, 398 ; Stover v. V. Du Uprey, 16 Cal. 195 ; Wotff v. Wal- Wood, 26 N. J. Eq. 417 ; Reed v. King, ter, 56 Mo. 29Z. 23 Iowa, 500 ; Reagan v. Hadley, 57 '•^ Lovejoy v. Vose, 73 Me. 46. Ind. 509 ; Sheldon on Subrogation, §§ 8, ' Smith V. Austin, 9 Mich. 465. 19, 20 ; Russell v. Mixer, 42 Cal. 475 ; * Gatewood v. Gatewood, 75 Va. Bruce v. Bonney, 12 Gray, 107. 407. ~~~~ ' Chase v. Peck, 21 N. Y. 581 ; Hatch * Wolff V. Walter, 56 Mo. 292. v. Morris, 3 Edw. Ch. 313 ; Moore v. ' Gans V. Thieme, 93 N. Y. 225 ; John- Thomas, i Oregon, 201. 304 MOETGAaES or EEAL PKOPEETT. [§ 447. because of a contract or because it was necessary to do so to preserve some junior lien or interest in property upon which such debt was a charge. The contract out of which the relation of surety arises need not of necessity be between the creditor and the surety. A person may be treated for some purposes in equity as a surety who, as between himself and his creditor, is the principal debtor ; as, for in- stance, when a third person has, for a valuable consideration received from the debtor, assumed the debt and made it his own. This is the case where a mortgage debt is assumed by a grantee of the mort- gagor." So, too, where a mortgagor conveys the equity of redemp- tion, though the purchaser makes no personal covenant topay the mortgage debt. In such a case the mortgaged premises become the primary fund for the payment of the debt, and, if the mortgagor pays the debt to protect himself from an action on the bond, he will be entitled to be substituted to the mortgage security as it originally existed, with the right to proceed immediately against the land for his indemnity." A purchaser cannot be subrogated to the benefit of an incumbrance which he has agreed to pay,' except for the purpose of protecting him against the inequitable claims of persons having no rights in his covenant. § 447. Even where there is only a colorable obligation to pay in protecting an estate supposed to exist, the right of subrogation will arise. Thus where a purchaser at a foreclosure sale, supposing he had acquired a perfect title, paid a valid prior mortgage, and the sale was set aside because of irregularities, it was held that the purchaser was entitled to be subrogated to the rights of the holder of the lien which he had discharged.* So, where an executor assumed to convey real estate of his testator, and the purchaser, in reliance on the title thus obtained, discharged a valid mortgage ; and a child born after the date of the will, and not provided for therein, brought ejisctment to recover the land, the title ' Stebbins v. Hall, 29 Barb. 524 ; Rus- kemp v. Shelton, 11 Paige, 28 ; Marsh sell V. Pistor, 7 N. Y. 171 ; Flagg v. v. Pike, 10 Paige, 595 ; Cox v. Wlieeler, Munger, 9 N. Y. 483 ; Hartley v. Har- 7 Paige, 248 ; Baker v. Terrell, 8 Minn, rison, 24 N. Y. 170 ; Shinn v. Shinn, gi 195 ; Wood v. Smith, 51 Iowa, 156 ; 111. 477 ; Risk V. Hoffman, 69 Ind. Hansell v. Lutz, 20 Pa. St. 284. 137. * Birke v. Abbott, 103 Ind. i ; Coulton ' Calvo V. Davies, 73 N. Y. 211 ; Tice v. Jackson, 121 Mass. 592. V. Annin, 2 Johns. Ch. 125 ; Vander- * Muir v. Berkshire, 52 Ind. 149. § 448.] SUBEOGATION. 305 of the heir was sustained, but the right of the purchaser to be subro- gated to the lien which he had paid was carefully preserved in the judgment.' The equitable doctrine of subrogation is also applied where a party is compelled to pay the debt of a third person to protect his own rights or to save his own property. Subrogation is founded on prin- ciples of equity and benevolence, and may be decreed where no con- tract or privity of any kind exists between parties. "Whenever one not a mere volunteer discharges the debt of another, he is entitled to all the remedies which the creditor possessed against the debtor." § 448. The right of a junior incumbrancer to be subrogated in the place of a senior incumbrancer upon payment of the Ken of the latter, rests upon the principle that justice and equity require that he should be entitled to the rights and securities of the senior incum- brancer. He is bound to pay the demand of the senior incumbrancer, and, upon so doing, it is but equitable and just that he should be al- lowed to control the lien which stands in the way of obtaining the amount of his debt.' One who levies on the equity of redemption of a mortgagor, and pays ofE mortgages to which his levy is subject, becomes by such pay- ment the assignee in equity of the mortgages, and is entitled to all the rights of the mortgagees in the premises.* A mortgagee of personal property who purchases a claim secured by a prior attachment lien on the property, acquires an equitable lien as against attachments levied subsequently to the mortgage for the moneys thus expended, though the statutory lien of the prior attach- ment may have been technically extinguished by the enforcement of the mortgage.' Where a mortgagee was compelled, for his own security, to satisfy an execution against the mortgagor on a prior judgment, he was held entitled to retain out of the proceeds of the sale the amount advanced with interest." ' Smith V. Robertson, 8g N. Y. 555. 363 ; Frost v. Yonkers Sav. Bank, 70 N, " Cole V. Malcolm, 66 N. Y. 363, 366 ; Y. 553 ; Weld v. Sabin, 20 N. H. 533 ; sr Cottrell's Appeal, 23 Penn. 294; Lidder- Am. Dec. 240 ; Dings v. Parshall, 7 Hun, dale's Ex'rs V.Robinson's Adm'r,2 Brock- 522 ; Land Co. v. Peck, H2 111. 408. enbough, 159; Miller v. Winchell, 70 N. * Warren v. Warren, 30 Verm. 530; Y. 437. Lucking v. Wesson, 25 Mich. 443. ^Per Miller, J., in Clark v. Mackin, * Armstrong v. McAlpin, 18 OhioSt. 184. 95 N. Y. 346, 351; Twombley V. Cassidy, ^Silver Lake Bank v. North, 4 Johns, 82 N. Y. 155 ; Cole v. Malcolm, 66 N. Y. Ch. 370. 20 306 MOETGAGES OP REAL PKOPERTT. [§ 448. Where a person advanced money on mortgage to take up a prior mortgage on the faith of a memorandum on the docket of a judg- ment, to the effect that it was " secured on appeal," and such memo- randum was void by reason of a want of notice of application for the order, the person advancing the money was held entitled to be subro- gated to the rights of the holder of the discharged mortgage.' The ovnier of real estate upon which there are two mortgages, who pays money on the prior lien in ignorance of the junior incumbrance, will be subrogated as to the amounts so paid for his indemnity." Payment of a mortgage by a person having an interest to protect operates as an assignment whenever justice requires it." Where a second mortgagee pays the first mortgage, the law will presume an assent by the prior lienor to the use of all securities in his hands in order to produce his reimbursement, where equity requires that to be done.* And when a purchaser of property pays off a prior incumbrance, and an attempt is made to subject the property in his hands to still other and subordinate incum- brances existing at the time of his purchase, it has been held that a court of equity will substitute him to the rights of those whose in- cumbrances he has paid off." This principle has been applied to the case of a fraudulent purchaser of a debtor's property who paid off an incumbrance upon it while he held the title." It was there said that it was entirely equitable that the defendant should be substituted in the place of the creditor whose debts he had paid ; although the con- veyance was void as to creditors, it was valid between the parties, and the debts were paid as a consideration in part for the conveyance.' A person who beheves himself to be the owner of real estate or iwho has an incumbrance upon it, who pays taxes or assessments,^ or ' Green v. Milbank, 3 Abb. N. C. 138. 'Clutev. Emmerich, ggN. Y. 342, afB'g ''Simpson v. Del Hoyo, 94 N. Y. i8g; 26 Hun, 10; Planters' Bank v. Dodson, Barnes v. Mott, 64 N. Y. 397 ; 21 Am. 9 S. & M. (Miss.) 527 ; Peet v. Beers, 4 R. 625 ; Grreen v. Milbank, 3 Abb. N. C. Ind. 46 ; Fisher v. Johnson, 5 Id. 492. 138 ; Snelling v. Mclntyre, 6 Abb. N. C. * Robinson v. Stewart, 10 N. Y. 189. 469 ; Matzen V; Schaeffer, 65 Cal. 81. ' Per Daniels, J., in Clute v. Emmer- ' Bacon v. Goodnow, 59 N. H. 415 ; ich, 26 Hun, 10, 15, afB'd 99 N. Y. 342. Stantonsv. Thompson, 49 Id. 272; Moore " Sidenberg v. Ely, 90 N. Y. 257; 43 V. Beasom, 44 Id. 215 ; Rigney v. Love- Am. R. 163 ; Miner v. Beekman, 50 N. joy, 13 Id. 247 ; Robinson v. Leavitt, Y. 337 ; Clute v. Emmerich, 26 Hun, 10 ; 7 Id. 73, 100 ; Ramsey v. Daniels, 1 Silver Lake Bank v. North, 4 Johns. Ch. Mackey (D. C.) 16. 37° ; Burr v. Veeder, 3 Wend. 412 ; ■•Downer v. Fox, 5 Wash. Ver. 388 ; Rapelye v. Prince, 4 hill, iig ; Southard Cowley V. Shelby, 71 Ala. 122. v. Dorrington, 10 Neb. 122 ; Johnson v. § 449.] STJBROGATION. 307 rent,' or other charges or liens in protection of his title or lien, can claim a right to be reimbursed for such payments as against a real owner or a prior lienor. § 449. Lender of money to be used in paying prior Hen. — It is true that a volunteer cannot acquire either an equitable lien or the right to subrogation f but one who, at the request of another, ad- vances his money to redeem or even to pay off a security in which | the other has an interest, or to the discharge of which he is bound, is not of that character, and in the absence of an express agreement, one would be implied, if necessary, that it shall subsist for his use, and it will be so enforced. But the doctrine of substitution may be ap- plied, although there is no contract, express or implied. It is said to rest " on the basis of mere equity and benevolence," ' and is resorted to for the purpose of doing justice between the parties." So, where a mortgage was made by an executrix on real estate already incum- bered by a previous mortgage, for the purpose of paying the prior lien and of securing a lower rate of interest, and this was carried out, the paid mortgage being cancelled and discharged ; and the executrix did not possess lawful power to execute the mortgage, it was held that the person advancing the money upon it was entitled, as against those taking the title of the premises, to have the satisfaction piece cancelled, and to be subrogated to the hen of the original mortgage.' And where money was loaned on the security of a mortgage sup- posed by the lender to be valid, but in fact the mortgage was forged and void, and the loan was made for the purpose of paying off a prior valid mortgage, the lender, or his assignee, was held entitled to sub- rogation to the rights of the prior mortgagee, there being no inter- vening rights." And for money advanced for necessaries and to pay off an incumbrance on his real estate for a person mentally incompe- Payne, ii Neb. 26g ; Walton v. Holly- ° Gans v. Thieme, 93 N. Y. 225 ; Gil- wood, 47 Mich. 385 ; Leitzbach v. Jack- bert v. Gilbert, 39 Iowa, 657 ; Trades- man, 28 Kans. 524 ; Rapelye v. Prince, men's Association v. Thompson,, 32 N. 4 Hill, 119. J. Eq. 133; Insurance Co.. V. Marshall, ' Robinson v. Ryan, 25 N. Y. 320. 32 N. J. Eq. 103 ; Lockwood v. Marsh, ' Sanford v. McLean, 3 Paige, 122 ; 3 Nev. 138. Contra, Banta v. Garmo,. i Wilkes V. Harper, i N. Y. (i Comst.) Sand. Ch. 383 ; Garwood v. Adm'rs of 586 ; 2 Barb. Ch. 338. Eldridge, i Green's Ch. (N. j:) 145 ; Mc- ^ Cheesebrough v. Millard, i Johns. Daniels v. Flower Brook Manuf. Co.,. 22 Ch. 409 ; I Story's Eq. Jur. § 493. Vt. 274 ; Watson v.. Wilcox, 39 Wis. 643. ■■Per Danforth, J., in Gans v. * Evertson v. Central Bank, 33 Kans. Thieme, 93 N. Y. 225, 232. 352 ; Gilbert v. Gilbert,. 39 Iowa, 657. 308 MOETGAGES OF EEA.L PEOPERTT. [§ 450. tent to contract, the party making the advances is entitled to a charge against his estate and to be subrogated to the benefit of the incum- brance which he has discharged.' So, where a person loaning money took a deed of trust as security, and applied a portion of the money so loaned in the discharge of a prior incumbrance on the premises embraced in his deed of trust, it was held that he was entitled in equity to be subrogated to the rights of the prior lien holder in respect to his security, although there was a formal release of the prior incumbrance, so as to protect him against the intervening lien of a judgment.^ Where a mortgagee cancelled a mortgage made by the ancestor and accepted a new security executed by the heir, he was heldentitled 'to a revivor of the earlier lien as against the claims of general credit- ors of the estate.' But the mere fact that borrowed money was used to pay off a mortgage or other lien upon land will not give the lender a right to be subrogated to the lien." § 450. Usurer not protected by subrogation. — "Where the holder of a junior mortgage, in pursuance of a usurious contract with the owner of the equity of redemption, himself paid the prior lien, which, together with the junior mortgage, were thereupon cancelled of record, and a new security taken to include both mortgages and a bonus of $1,000 in addition, this latter security was adjudged void, but it was held that the satisfied junior mortgage was thereupon re- vived and that the junior mortgagee also had a right to be subrogated :to the prior lien. He had a right to pay and be subrogated by virtue ,of his junior Hen, and this right was not destroyed by the usury.' But where a loan of money on usurious terms was made by a per- son having no junior lien to protect, for the purpose of paying a prior valid mortgage, which was discharged and a new mortgage was taken, no right of subrogation was held to exist, for the reason that the pay- ment was not made by the mortgagee, but the loan was made to the mortgagor, who used the money thus obtained to make the payment. Jn the case previoasly cited' the right to subrogation had its founda- ' Coleman y. Eraser^ 3 Ky. 300. 105; Gaskill v. Wales, 36 N. J. Eq. 527 ; ^ Tyrrell v. Ward, 102 111. 29 ; Gaskill Kitchell v. Mudgett, 37 Mich. 8t. ■y. Wales, 36 N. J. :Eq,. 527. ' Patterson v. Birdsall, 64 N. Y. 294 ; ' Hyde v. Tanner, ii Barb, 76. 21 Am. R. 609, affi'g 6 Hun, 632. * Smith V. Neilson, 13 Lea ,(Tenn.)46i; * Patterson v. Birdsall, supra. \yan Winkle y. WiUjam^,, 38 N. J. Eq. §§ 451-452.] STTBROGATION, 809 tion in the payment made by the junior incumbrancei', and the fact that he laade it pursuant to a usurious bargain, was not a necessary part of the transaction ; but where the usurious loan was made to the mortgagor, who made the payment, all of the rights of the mortgagee had to be traced through the illegal contract, and depended upon and fell with it.' § 451. Subrogation may be awarded to compel contribution. — Where tenants in common mortgage their lands for their joint debt, each is a surety of the other to the extent of the portion of the debt which the other ought to pay ; and if one pays the entire debt he will be subrogated to the rights of the creditor to the extent neces- sary to compel contribution from his co-tenant.'' Where a mortgagee obtained a judgment of foreclosure and one of several purchasers from the mortgagor paid the judgment, it was held that equity would work a subrogation of such purchaser to the rights of the mortgagee, so far as might be necessary to enable the former to compel contribution from persons liable thereto.' So, a mortgagee who has been compelled to pay an existing incum- brance, as well on the lands mortgaged to him as on other lands, may enforce the lien to compel the owner of such other lands to pay his proportion of the incumbrance." A person who owns a portion of mortgaged premises which, as be- tween himself and other owners of other portions, is not primarily bouad for the payment of the mortgage debt, may, upon paying the debt, enforce the lien against the other parcels which ought equit- ably to bear the burden.' A surety on one of seven bonds secured by a mortgage, on paying the bond on which he was obligated was held entitled to a propor- tionate part of the mortgage.' § 452. Subrogation may also be decreed to remedy a mistake. — Upon this principle a person who purchases real estate which is subject to a mortgage and a judgment lien, and who pays the mort- gage and causes it to be satisfied and discharged upon the record, without any knowledge of the judgment, is entitled to be subrogated ' Baldwin v. MofBtt, 94 N. Y. 82, affi'g * Lyman v. Little, 15 Vt. 576. 26 Hun, 209. ' Rardin v. Walpole, 38 Ind. 146; Lay- '^ McLoughlin v. Curts, 27 Wis. 644 ; lin v. Knox, 41 Mich. 40. Fletcher v. Chase, 16 N. H. 39. * Lynch v. Hancock, 14 S. Car. 66. ^ Matteson v. Thomas, 41 III. no. 310 MOETGAGES OF EEAL PEOPEETT. [§§453-454. to the mortgage as against the judgment creditor.' So, also, where a purchaser at an administrator's sale, without notice of any defect in the proceedings, which were really without validity, paid the pur- chase money, which was used in paying a valid mortgage on the land, it was held that he was subrogated to such mortgage, which was to be treated as in full force for his benefit and protection." § 453. Preventing an inequitable claim for dower. — Where a mortgage upon lands, executed by a husband and wife, was created to pay off a prior mortgage upon the premises, executed by the mort- gagor before his marriage, it afterward appearing that the wife, at the time she executed the last mortgage, was an infant, but that the fact of such infancy was not disclosed, it was held that the person taking the mortgage was entitled to be subrogated to the rights of the mortgagee under the first mortgage, and to have the same revived and enforced for his benefit, as against the claim of the wife of the mortgagor for dower.' So, where an unmarried man executed a mortgage and subse- quently married, and then executed a new mortgage to persons who paid off the first mortgage on its being released, the release of the old mortgage and the executing of the new being on the same day, it was held that the transaction was, in legal effect, an assignment of the first mortgage in consideration of the money advanced by the second mortgagees ; not the creating of a new incumbrance, but a changing of the form of the old.* In a similar case, however, only differing in the circumstance that the mortgagor falsely represented to the mortgagee that he was not married, and his wife, who was living apart from him, did not sign the new mortgage, the right of subrogation to the discharged secu- rity was refused, it being stated that the wife was " innocent." * § 454. Surety subrogated to security given to co-surety. — A mortgage given by the principal debtor to one surety for his indem- nity inures to the benefit of a co-surety, and the mortgagee cannot apply the money realized thereon to any debt other than that speci- fied in the mortgage to the prejudice of his co-surety.' But a surety is not entitled to the benefit of a mortgage given to ' Ayres v. Adams, 82 Ind. 109. * Swift v. Kraemer, 13 Cal. 526. ' Blodgett V. Hitt, 29 Wis. 169. = Westfall v. Hintze, 7 Abb. N. C. ° Snelling v. Mclntyre, 6 Abb. N. C. 236. 469 ; Runyan v. Stewart, 12 Barb. 537. ° Steele v. Mealing, 24 Ala. 285. § 455. J SUBROGATIOK. 311 indemnify his co-snrety after the co-sureties' loss had been adjusted by each of the sureties paying one-half of the demand.' A mortgage given by the wife of the principal debtor upon her separate estate, for the exclusive use and benefit of one of her hus- band's sureties, does not inure to the benefit of his co-sureties.^ § 455. Subrogation of creditor to collateral securities held by sureties. — A principal creditor has also been held to be authorized to lay hold upon all collateral securities given by the principal debtor for the discharge of the debt. Upon this principle, when the maker of a note executes a mortgage on his property to indemnify his ac- commodation indorsers on the note, the holders of the note will be entitled to the benefit of the mortgage, and may in equity siibject the mortgaged property to the satisfaction of his debt," and this right cannot be defeated by a release of the mortgage executed by the mortgagee.* If, however, the owner of the note has proved it against the several estates of the maker and indorser in bankruptcy, and by his vote has secured the discharge of the indorser, he cannot compel an assignment of the mortgage to himself.^ Where a mortgage was assigned by a principal debtor to a trustee for the protection of his surety, with authority to collect the amount due on the mortgage and pay the debt from the proceeds, on default of payment the creditor was held to be entitled to the security." So, the payee of a promissory note who transfers it by indorsement, and afterward, on failure of payment by the maker, is compelled to take it up, is entitled to enforce a mortgage executed by the maker to the indorser, while he held the note, to secure it.' A surety on appeal from a judgment recovered upon a note secured by a mortgage, when compelled to pay the judgment, is entitled to be subrogated to all the rights of the mortgagee under the mortgage." ' Hall V. Cashman, i6 N. H. 462. * Dick v. Maury, 17 Miss. 448 ; Loehr ' Leggett V. McClelland, 39 Ohio St. v. Colburn, 92 Ind. 24 ; Mitchell v. 624. Smock, 94 Ind. 108. 'Dick V. Maury, 17 Miss. 448 ; New ^ New Bedford Institution v. Fairhaven Bedford Institution v. Fairhaven Bank, Bank, 91 Mass. (9 Allen) 175. gi Mass. (9 Allen) 175; Ijames v. Gaither, * Galium v. Branch Bank of Mobile, 93 N. C. 358 ; Demott v. Stockton Paper 23 Ala. 770. Ware Mfg. Co., 32 N. J. Eq. 124 ; Loehr ' O'Hara v. Haas, 46 Miss. 374. V. Colburn, 92 Ind. 24 ; McMuUin's ° Pence v. Armstrong, 95 Ind. 191 ; Adm'r v. Neal, 60 Ala. 552. Vert v. Voss, 74 Ind. 565. 312 MORTGAGES OF REAL PEOPEETY. [§ 456. In order that the creditor may claim subrogation to a secnrity, it must appear that it was given by the person primarily obligated to pay the debt. No such subrogation can take place so as to give the creditor a claim upon a mortgage given by one of two sureties on his own real estate to his co-surety to protect him from loss by reason of having become surety for the principal.' § 456. Pleadings to assert right of subrogation. — ^Where an action is brought to foreclose a mortgage, and a defendant who pays the debt desires to obtain a legal assignment in aid of his equitable claim to subrogation, no special averments need be made in his an- swer, and the relief may be granted to him upon a motion made in the action.'' But if a mortgagee has paid a prior lien and desires to tack it with his own, he must set out the facts upon which he relies in his complaint.' The reason for this rule is found in the fact that in a mere action of foreclosure, a title acquired prior to the execution of the mortgage can neither be contested nor defeated.' ' Hampton V. Phipps,io8 U.S. (i Davis) = Emigrant Ind. Sav. Bank v. Clute, 260; Seward v. Huntington, 94 N. Y. 33 Hun, 82 ; Aldrich v. Willis, 55 Cal. 81. 104, rev'g 26 Hun, 216. * Emigrant Ind. Sav. Bank v. Clute, ''Twombly v. Cassidy, 82 N. Y. 155. 33 Hun, 82. CHAPTER XII. THE EECOEDING ACTS. WHAT INSTRUMENTS MAY BE RECORDED. §457. Statute. 458. Instruments within the statute. 459. What instruments gain nothing from being recorded. 460. Where two mortgages are talcen and recorded simultaneously. ACKNOWLEDGMENT OR PROOF. 461. In order that an instrument shall be entitled to be recorded. 462. Impeaching certificate of acknowl- edgment. 463. Who may certify as to proof or acknowledgment. 464. Sufficiency of certificate. METHOD OF RECORDING. 465. In order to be valid as against strangers. 466. A mortgage given for advances to be made. 467. Defective record. 468. Omission of seal. 469. The mistake of a recording clerk. 470. Indexing the record. 471. Conveyances and mortgages must be recorded in different sets of books. 472. The record must be according to law. 473. Order of record. EFFECT OF THE RECORD. 474. The effect of the record is limited to giving notice. 475. What the record of a deed is no- tice of. 476. The registry of a mortgage is no- tice of the contents. 477. Priority of unrecorded convey- ances and mortgages over judg- ments. 478. Record is notice only when grant- or's deed is also recorded. 47g. Notice of grantor's title. 480. Covenants of seizin and title. §481. Extent to which records must be searched to insure safety. WHO PROTECTED BY RECORDING ACTS. 482. The recording acts only protect bona fide purchasers. 483. Purchase from one having notice. 484. Burden of proof. 485. Subsequent purchasers alone pro- tected. 486. The recording acts protect only those who record their deeds. NOTICE AS AFFF.CTING RECORDING ACTS. 487. What actual notice is equivalent to a record. 488. Constructive notice. 489. Notice to put upon inquiry. 490. Degree of inquiry required. 491. The notice which will put a party upon inquiry. 492. Possession as notice. 493. Notice to an agent. 494. Recitals in conveyances. 495. The mere silence of a mortgagee. RECORDING ASSIGNMENTS OF MORTGAGES. 496. Before the passage of the Revised Statutes. 497. Under the provisions of the Re- vised Statutes. 498. The recording of the assignment is notice. 499. To what extent recording assign- ment protects assignee. 500. Assignment is a " conveyance." 501. Production of bond on assign- ment. 502. Assignment of mortgage must be recorded among mortgages. 503. Noting assignment on margin of record. JUDGMENT LIENS SUSPENDED UPON AP- PEAL. 504. It is provided by Section 1256 of the Code. 505. Purchasers and mortgagees "in good faith." 314 MORTGAGES OF EEAL PEOPEETY. [§§ 457-458. WHAT INSTKUMENTS MAY BE EECOKDED. § 457. Statute. — It is provided by statute that "every conveyance of real estate within this State, hereafter inade, shall be recorded in the office of the clerk of the county where such real estate shall be situated ; and every such conveyance not so recorded shall be void as against any subsequent purchaser, in good faith and for a valuable consideration, of the same real estate, or any portion thereof, whose conveyance shall be first duly recorded.' It is further provided that the term " real estate,'' as used in the act, shall be construed as co- extensive in meaning with " lands, tenements, and hereditaments," and as embracing all chattels real, except leases for a term not exceed- ing three years. The term " purchaser " is to be construed to em- brace every person to whom any estate, or interest in real estate, shall be conveyed for a valuable consideration ; and also every assignee of a mortgage or lease, or other conditional estate. The term " convey- ance" is to be construed to embrace every instrument in writing, by which any estate, or interest in real estate is created, aliened, mort- gaged, or assigned ; or by which the title to any real estate may be affected in law or equity, except last wills and testaments, leases for a term not exceeding three years, and executory contracts for the sale or purchase of lands." § 458. Instruments within the statute. — The statute applies to mortgages, whether they be of freehold or of leasehold estates,' and written agreements which create equitable incumbrances in the nature of mortgages may be recorded, and the record will be notice to sub- sequent pui'chasers.' So the estate of a purchaser in possession of lands under a parol contract of sale may be mortgaged, and such mortgage may be recorded, and will be notice to subsequent pur- chasers and incumbrancers.^ A mortgage of a lease for less than three years is a chattel mort- ' I R. S. 756, § I. V. Shriver, 3 Md. Ch. 381 ; Bellas v. '^ I R. S. 762, §§ 36, 37, 38. McCarty, 10 Watts, 13 ; Neligh v. Mich- ' Johnson V. Stagg, 2 Johns. 510; Ber- enor, 3 Stockt. 539; Wilder v. Brooks, ry V. Mutual Ins. Co., 2 Johns. Ch. 603. 10 Minn. 50 ; Tarbell v. West, 86 N. Y! * Parkist v. Alexander, i Johns. Ch. 280 ; Edwards v. McKernan, 55 Mich. 394 ; Hunt v". Johnson, ig N. Y. (5 520, and cases cited. Contra, Grimstone Smith) 279. V. Carter, 3 Paige, 421 ; Farmers' Loan ' Tefft V. Munson, 63 Barb. 31 ; John- & Trust Co. v. Maltby, 8 Paige, 361 ; son V. Stagg, 2 Johns. 509 ; Stoddard v. Crane v. Turner, 7 Hun, 357 ; s. c. affi'd Whiting, 46 N. Y. 627 ; U. S. Ins. Co. 67 N. Y. 437. § 459.] THE EECOEDING ACTS. 315 gage, and must be filed in conformity with the provisions of law gov- erning such securities ;' but if the lease is for more than three years, it must be recorded just as if it were a mortgage on a fee." A mort- gage of such a lease, if the lease and mortgage are duly recorded, will be protected against a subsequent mortgage of the fee." A " satisfaction piece " of a mortgage under our statutes," is a simple instrument for reconveying or releasing the land from the lien of the mortgage. It is a " conveyance " under the recording act ; for by it an interest in real estate is aliened, and the title to real estate is affected in law and in equity.'' A certificate of satisfaction properly recorded is therefore a protection to a honafide purchaser of the property, even though the mortgage has been transferred by an unrecorded assign- ment." So, a release of part of a mortgage security is a " conveyance " of real estate under the recording act, and the record of it is constructive notice to subsequent purchasers.' An assignment of a bond and mortgage is a " conveyance " and is notice to subsequent purchasers of the same security,' though it is not notice to the mortgagor or his legal representatives." § 459. What instruments gain nothing from being recorded. — A power of attorney to assign a mortgage,'" and a power to collect a mortgage and to execute satisfaction," are neither of them within the recording acts, and their record will not operate as notice. So, too, an agreement between two mortgagees fixing the priority of their several mortgages, is not entitled to record, and if recorded, will be inoperative as to subsequent purchasers." A covenant to assume and pay a mortgage debt is not a conveyance of real estate, and does not come within the recording act, and put- ' Deane v. Hutchinson, 40 N. J. Eq. ling v. Cook, 39 Iowa, 200 ; Henderson 83. V. Pilgrim, 22 Texas, 464. ' I R. S. 762, § 36 ; Gaylord v. Cincin- ' Mutual Life Ins. Co. v. Wilcox, 55 nati German Building Ass'n, 2 Cin. 163 ; How. 43 ; St. John v. Spaulding, i T. & Johnson v. Stagg, 2 Johns. 510; Berry C. 483. V. Mutual Ins. Co., 2 Johns. Ch. 603; 'Westbrook v. Gleason, 79 N. Y. 23; Decker v. Clarke, 11 C. E. Green (N. J.) Purdy v. Huntington, 42 N. Y. 334. 163; Spielman v. Kliest, 36 N. J. Eq. 199. " Van Keuren v. Corkins, 66 N. Y. 77, ^ Spielman v. Kliest, 36 N. J. Eq. 199. afB'g 4 Hun, 129. 4 I R. S. 761, §§ 28, 29. " Williams v. Birbeck, Hoff. 359. = Bacon v. Van Schoonhoven, 19 Hun, " Jackson v. Richards, 6 Cow. 617. 158, affi'd 87 N. Y. 446. " Gillig v. Maass, 28 N. Y. 191; Crane " Swartz's Ex'r v. List, 13 Ohio St. 419; v. Turner, 67 N. Y. 437 ; Bank for Sav- Cornog V. Fuller, 30 Iowa, 211; Bow- ings v. Frank, 56 How. 403. 316 MORTGAaES OF REAL PEOPERTT. [§ 460. tiug it upon record does Bot give constructive notice to any one.' So, also, the recording act has no application to a covenant contained in a mortgage by the terms of which the mortgagor agrees to keep the property insured for the benefit of the mortgagee, and notice of such a covenant must depend upon proof independent of its provisions. It does not contemplate that such a covenant in a mortgage shall be more e£Eective from the fact that such mortgage is placed on the record or that the recording makes it an incumbrance upon the mort- gaged property. The object of the recording act was to protect sub- sequent purchasers and incumbrancers against previous unrecorded instruments, and not against a covenant relating to the policy of in- surance upon buildings upon the premises. Instruments which affect the land and the title are entitled to record, and not such as relate to collateral matters.'' It is not necessary to record an extension or renewal of a mortgage in order to charge purchasers with notice, the original mortgage being unsatisfied of record, even though the statute of limitations has run since such record." A mortgage of land containing a provision by which the mort- gagors pledge the " rents, issues, and profits " of the premises, though duly recorded, is not notice to a purchaser of the rents due or to grow due of the special lien upon them. The obligation of a tenant to pay rent is a chose in action and not real estate." § 460. Where two mortgages are taken and recorded simul- taneously, the recording acts have no application, and their priority must be determined by equitable rules.' In such a case a court of equity will recognize and enforce an agreement or understanding as to priority ;" and the same rule will apply if one mortgage is accident- ally recorded a short time before the other.' In Greene v. Deal (64 JS". Y. 220),' the Court of Appeals held that the recording acts did not apply as between two mortgages both given for part of the ' Judson V. Dada, 79 N. Y. 373 ; Mead ' Granger v. Crouch, 86 N. Y. 494 ; V. Parker, 29 Hun, 62. Stafford v. Van Rensselaer, 9 Cow. 316, '^ Per Miller, J., in Dunlop v. Avery, affi'g Van Rensselaer v. Stafford, Hopk. 8g N. Y. 592, 598. 569 ; Douglass v. Peele, Clarke, 563. ' Plant V. Shryock, 62 Miss. 821; Ben- * Jones v. Phelps, 2 Barb. Ch. 440. son V. Stewart, 30 Miss. 49; Green v. ' Rhoades v. Canfield, 8 Paige, 545; Supervisors, 58 Miss. 337. Sparks v. The State Bank, 7 Blackf. 469. * Riley v. Sexton, 32 Hun, 245 ; Wood ' Rev'g Greene v. Deal, 4 Hun, 703. V. Lester, 29 Barb. 145. §§ 461-462. J THE RECORDING ACTS. 317 purchase money of the same property, and that fact appearing upon their face, and both bearing the same date, but one of which was re- corded a few hours before the other. The recording act declares that a conveyance not recorded shall be void as against any subsequent purchaser whose conveyance shall be first duly recorded, but it does not assume to control the rights of parties under instruments both of which were executed and delivered at the same time. Where a mortgage and judgment were entered of record the same day ; the mortgage which was not for purchase money being first entered, but there was nothing on the record to show the precise time of the entry of either, it was held that they were of equal lien.' This was under a statute making the iien of a mortgage as against a judgment to depend on priority of record. Priority of record will not give preference to one mortgage over another given at the same time to the same person.''' ACKNOWLEDGMENT OE PEOOP. §461. In order that an instrument shall be entitled to be recorded, it is necessary that its authenticity be attested in the form prescribed by the statute regulating the acknowledgment and proof of deeds. If this be omitted, or if the acknowledgment be in- formal or defective, the record, being unauthorized, will not be notice.' A certificate of acknowledgment which conforms on its face with the statute, is proof of its own genuineness ; and where it describes the proper officer acting in the proper place, it is taken as proof both of his character and local jurisdiction.^ The certificate is not conclusive, however, and the party affected by it may question its validity and the force and effect of the formal proof.' § 463. Impeaching certificate of acknowledgment. — It is pro- vided by statute as follows : " The record of a conveyance duly re- corded, or a transcript thereof, duly certified, may also be read in evidence with the like force and effect as the original conveyance. Neither the certificate of the acknowledgment, or of the proof of any ' Hendrickson's Appeal, 24 Penna. St. * Thurman v. Cameron, 24 Wend. 87. 363. ' Jackson v. Schoonmaker, 4 Johns. ^Gansen v.Tomlinson, 23 N.J.Eq. 405. 161; Jackson v. Perkins, 2 Wend. 308; ' Frost V. Beekman, i Johns. Ch. 288; Morris v. Keyes, i Hill, 540; Jackson v. Dodd V. Parker, 40 Ark. 536 ; Girardin Rumsey, 3 Johns. Cas. 234 ; Thurman v. V. Lampe, 58 Wis. 267; Wood v. Reeves, Cameron, 24 Wend. 87. 23 S. C. 382. 318 MORTGAGES OF EEAL PBOPEETT. [§ 462. conveyance, nor the record or transcript of the record of such con- veyance, shall be conclusive, but may be rebutted, and the force and effect thereof may be contested by any party affected thereby. If the party contesting the proof of a conveyance shall make it appear that such proof was taken upon the oath of an interested or incompetent witness, neither such conveyance, nor the record thereof, shall be re- ceived in evidence until established by other competent proof." ' It has been said that the true view is that the certificate of ac- knowledgment ie, prima facie proof of the facts it contains, if within the officer's range, but is open to rebuttal between the parties by proof of gross concurrent mistake or fraud. In favor of purchasers for valuable consideration withoutf notice, it is conclusive as to all matters which it is the duty of the acknowledging oflicer to certify, if he has jurisdiction. As to all other persons it is open to dispute." In the absence of proof of fraud and collusion on the part of the officer taking and certifying the acknowledgment of a mortgage or other instrument, the officer's certificate in proper form will, for the purpose of protecting a hona fide purchaser, prevail over the un- supported testimony of the mortgagor that the same is false and the instrument is forged.' It has also been said that in taking the ac- knowledgment of a married woman to a deed or mortgage, the officer acts judicially, and, in the absence of fraud or duress, the evi- dence of the parties to the instrument is not admissible to contradict his official certificate, and to vitiate the instrument as against the title thereunder of a Tyonafide grantee or mortgagee.* A certificate of proof or acknowledgment to an instrument does not preclude any person affected by it to deny that the instrument was delivered,' or to show that one of the grantors was an infant, or non compos Tnentis." • I R. S. 759, § 17. Marshall, 32 N. J. Eq. 103, and cases ' Wharton Ev., § 1052, and cases cited: cited by the court and by the reporter Heeter v. Glasgow, 79 Pa. St. 79 ; s. c. in a valuable note ; Shear v. Robinson, 21 Am. R. 46. 18 Fla. 379, and cases cited ; White v. ' Pereau v, Frederick, 17 Neb. 117; Graves, 107 Mass. 325; s c. 9 Am. R. Heeter v. Glasgow, 79 Penna. St. 79 ; 38 ; Kerr v. Russell, 69 111. 666 ; s. c. 18 Gorham v. Anderson, 42 111. 514 ; Mon- Am. R. 634 ; Singer Manuf'g Co. v. roe V. Poormun, 62 111. 523 ; Borland v. Rook, 84 Penna. St. 442; s. c. 24 Am. R. Walrath, 33 Iowa, 130; Van Orman v. 204; Johnston v. Wallace, 53 Miss. 331; McGregor, 23 Iowa, 300 ; Hourtunne v. s. c. 24 Am. R. 699. Schnoor, 33 Mich. 274 ; Rowland v. '^ Jackson v. Perkins, 2 Wend. 308. Blake, 97 U. S. 624. ^ Jackson v. Schoonmaker, 4 Johns. * Homeopathic Mut. Life Ins. Co. v. 161. § 463-464. J THE EECOKDIJSTG ACTS. 319 § 463. Who may certify as to proof or acknowledgment. — The act of taking and certifying tlie acknowledgment involves the dis- charge of no judicial duty which would incapacitate a person related to one of the parties from acting. It is merely a ministerial act, and may be performed by a person who is so related to the parties as to be disqualified as a judge or juror.' § 464. Sufficiency of certificate. — If the certificate of acknowl- edgment is substantially defective, the paper cannot be read in evi- dence, and, though recorded, the record will not be effectual as notice.' And if the record shows no sufficient acknowledgment it will not be operative, though the original instrument is duly acknowl- edged." A certificate of proof or acknowledgment need not be in the pre- cise language of the statute, but is to be liberally construed, and is sufficient if it shows a substantial compliance with the statute.'' The recording of an instrument as a notice to subsequent purchas- ers or incumbrancers is not invalidated by proof of a latent defect in the acknowledgment. Thus, where the acknowledgment of an assign- ment of a mortgage was taken in New Jersey by a notary public of New York, but the certificate was in due form and purported to have been taken in New York, and the assignee had taken the assignment in good faith for a sound and adequate consideration, the record was held sufficient, and evidence of the irregularity was not permitted." Where the venue was laid in a county where the ofiicer had no juris- diction, it was held that parol proof was admissible to show that, as a matter of fact, it was taken in his county." ' Lynch v. Livingston, 6 N. Y. (2 Seld.) 561 ; Meriam v. Harsen, 4 Edw. Ch. 70 ; 422. s. c. 2 Barb. Ch. 232 ; West Point Iron '' Merritt v. Yates, 71 111. 636 ; s. c. 22 Co. v. Reymert, 45 N. Y. 703 ; Ritter v. Am. R. 128 ; Grove v. Todd, 41 Md. Worth, 58 N. Y. 627, rev'g s. c. i T. & 633 ; s. c. 20 Am. R. 76. C. 406, As to acknowledgment by cor- ^ Bishop V. Schneider, 46 Mo. 472 ; s. poration, see Trustees Can. Academy v. c. 2 Am. R. 533. So also if the statute McKechnie, go N. Y. 618. requires a witness and the record does ^ Heilbrun v. Hammond, 13 Hun, 474 ; not show one. Pringle v. Dunn, 37 Wis. Ross & Co.'s & Elsbrie's Appeals, 106 449; s. c. 19 Am. R. 772. Pa. St. 82; Fuhrman v. Loudon, 13 ■* Canandaigua Academy v. McKech- Serg. & R. (Pa.'' 386 ; Angler v. Schief- nie, 19 Hun, 62 ; Jackson v. Gumaer, 2 felin, 72 Pa. St. 106; s. c. 13 Am. R. 659. Cowen, 552 ; Troup v. Haight, Hopk. * Angler v. Schieffelin, 72 Pa. St. 106 ; 239 ; Duval v. Covenhoven, 4 Wend. s. c. 13 Am. R. 659. 320 MORTGAGES OF REAL PEOPEETT. [§§ 465-467. METHOD OF EECOEDING. § 465. In order to be valid as against strangers, a mortgage should give reasonable notice of the incumbrance. But to constitute such reasonable notice it is not requisite that the condition should be so c(impletely certain as to preclude the necessity of extraneous in- quiry ; and it is sufficient to state the subject matter of the mortgage and that from which, by the exercise of common prudence and ordi- nary diligence, the extent of the incumbrance may be ascertained.' So, a clause in an indemnity mortgage, to the effect that it is made to secure the payment of all sums now due or to grow due to the mortgagee from the mortgagor hereafter, is sufficient." Where a recorded mortgage recited that the bond was " condi- tioned for the payment of $1,500, lawful money of the United States, as in and by said obligation will appear," but the bond was condi- tioned for the payment of $1,500, lawful silver money of the United States, it was held that the mortgage could be satisfied by a lonafide purchaser without notice, by the payment of the amount in lawful money of any description.' § 466. A mortgage given for advances to be made is notice to all intending purchasers and incumbrancers to its full amount, and this without regard to the question whether the advancements are optional or not. By such a record all persons are put upon inquiry to ascertain to what extent the advances have been made, and they may by notice prevent other advances to their prejudice.* § 467. Defective record. — A recording officer is liable for any damage caused by his erroneous or defective performance of his du- ties,' as by marking a discharge upon the wrong mortgage, in conse- quence of which a purchaser suffers loss." An omission in the record of the middle name or initial of the mortgagor, or a mistake in it, wiU not affect. It is enough if one christian name is properly added to the surname.' ' Stoughton V. Pasco, 5 Conn. 442. Y. 257 ; State v. Davis, 96 Ind. 539; Gil- ' Bishop V. Allen, 55 Vt. 423. christ v. Gough, 63 Ind. 576. ' Eagle Beneficial Society Appeal, 75 ' Building Ass'n v. Whitacre, 92 Ind. Pa. St. 226. 547. ^ Ackerman v. Hunsicker, 85 N. Y. 'Clutev. Emmerich, 26 Hun, 10; Frank- 43, rev'g s. c. 21 Hun, 53, and overrul- lin v. Talmadge, 5 Johns. 84 ; Roosevelt ing Ketcham v. Wood, 22 Hun, 64. See v. Gardinier, 2 Cow. 463 ; Milk v. Chris- further as to this, ante, §§ 201 to 203. tie, i Hill, 102 ; Weber v. Fowler, 11 ' Mutual Life Ins. Co. v. Dake, 87 N. How. 458. §§ 468-470.] THE EECORDING ACTS. 331 The record of a mortgage from which the name of the mortgagee is omitted, does not charge a subsequent purchaser with notice.' After a paper is properly recorded, it continues to be notice even if the record is destroyed by fire.'' § 468. Omission of seal. — It has been held that a purchaser from the mortgagor will not be charged with constructive notice of a mort- gage, the record of which shows that it was not under seal.' § 469. The mistake of a recording clerk cannot operate to en- large the effect of a conveyance. For this reason, where a release of part of mortgaged premises was correctly made and executed, and in recording it the word "except" was erroneously omitted from the description, whereby an entirely different meaning was given to it, it was held that the mistake in the record could be shown, 6ven as against a person purchasing on the faith of it.* § 470. Indexing the record. — General statutes require the clerks in the various counties of this State, and the registers in the counties of New York and Kings, to keep proper indices of the conveyances, mortgages, and other instruments left with them for record. For a wilful or fraudulent omission to note any paper in the proper index, any clerk or register would be liable to be indicted, and he would for any such omission, whether caused by mere neglect or otherwise, be liable in damages to any person who might thereby be made to suffer. The index, however, is not an essential part of the recording of any instrument. When a conveyance is delivered to the clerk, the stat- ute provides that it shall be " considered as recorded from the time of such delivery." ' A:^er such delivery nothing more need be done to keep the record perfect, except at the proper time to record it in its proper order in the proper book ; and yet if the conveyance in the. meantime, before the record thereof, should be mislaid at the clerk's office, or lost or purloined, the record would still remain complete.. In such case there could be no index of such conveyance, because^ until the time for recording it had arrived, it could not be known in, what book, or in what place in any book, it would be recorded." ' Drake v. Wright, 49 Iowa, 538. * Simonson v. Falihee, 25 Hun,, 570. ^ Shannon v. Hall, 72 111. 354 ; 22 Am. ' Kessler v. The State ex rel. Wilson, R. 146 ; Alvis V. Morrison, 63 111. 181 ; 24 Ind. 313 ; Wood & Bown's Appeal, 14 Am. R. i'i7 ; Myers v. Buchanan, 46 82 Penna. St. 116. Miss. 397. ' Mutual Life Ins. Co. v. Dake, 87 N. ' Caconillat v. Rene, 32 Cal. 450. Y. 257, affi'g s. c. i Abb.. N.. C 381 ; 21 322 MOETGAGES OF REAL PEOPEETY. [§§471-472. §471. Conveyances and mortgages must be recorded in dif- ferent sets of books. — The statute requires that different sets of books shall be provided by the clerks of the several counties, for the recording of deeds and mortgages ; in one of which sets, all convey- ances absolute in their terms, aad not intended as ruortgages or as securities in the nature of morlgages, shall be recorded ; and in the other set, such mortgages and securities shall be recorded. Every deed conveying real estate, which, by any other instrument in writ- ing, shall appear to have been intended only as a security in the nature of a mortgage, though it be an absolute conveyance in terms, shall be considered as a mortgage ; and the person for whose benefit such deed shall be made, shall not derive any advantage from the recording thereof, unless every writing, operating as a defeasance of the same, or explanatory of its being designed to have the effect only of a mortgage pr conditional deed, be also recorded therewith, and at the same time." § 472. The record must be according to law. — It is a general principle that where the recording of an instrument is made con- structive notice, the record, to be effectual, must be according to law." Upon this principle, and under these statutory provisions, it has been held that the recording, as a deed, of an absolute deed intended as security in the nature of a mortgage, is not notice to a subsequent bona fide grantee or mortgagee, even though the defeasance is not in writing,' and the like effect will follow if the deed and the defeasance are both recorded among the conveyances.* If the defeasance is by parol, the mortgagee should execute a written defeasance and record it with the deed among the mortgages.' A deed, absolute on its face, but intended 'as security, though registered as a deed, is valid between the parties as a mortgage." If Bedford v. Tupper, 30 Hun, 174; Bishop Dunham v. Dey, 15 Johns. 555 ; James V. Schneider, 46 Mo. 472 ; 2 Am. R. v. Johnson, 6 Johns. Ch. 417 ; White v. 533 ; Schell v. Stein, 76 Penna. St. 398 ; Moore, i Paige, 551 ; Ives v. Stone, 51 18 Am. R. 416 ; see, also, Viele v. Jud- Conn. 446 ; Clark v. Watson, 141 Mass. son, 82 N. Y. 32, rev'g s. c. 15 Hun, 248. But see Bank, etc., v. Sav. Inst'n, 328, and ovefrrulings, Moore v. Sloan, 62 Miss. 250. .50 Barb. 442. ■'Jackson v. Van Valkenburgh, 8 Cow. ' I R. S. 756, §§ 2, 3. 260 ; Brown v. Dean, 3 Wend. 208 ; ''N. Y. Life Ins, Co. v. White, 17 N. White v. Moore, i Paige, 551 ; Grim- Y. 469 ; Frost v. Beekman, i Johns. Ch. stone v. Carter, 3 Paige, 421 ; Corpman 288 ; Lessee of Heister v. Fortner, 2 v. Baccastow, 84 Penna. St. 363. Binn. 40 ; Parsons v.. Lent, 34 N. J. Eq. ^ Warner v. Winslow, i Sandf. Ch. 167. 430 ; White v. Moore, i Paige, 551. ^Dey V. Dunham, 2 Johns. Ch. 182 ; *James v. Johnson, 6 Johns. Ch. 417. ■§§473-474.] THE EECOKDINa ACTS. 323 it be recorded as a deed, the record is a nullity, but, upon the mort- gagee acquiring the equity, the record of the deed becomes operative.' Where a conveyance is accompanied by an agreement which gives to the grantor a right to a portion of the profits on a resale within a specified time, and which requires the grantee to sell if a specified price can be obtained ; such an agreement is not inconsistent with the vesting of the title, and the conveyance is a deed and shoiild be re- corded as such." When a conveyance, absolute upon its face, is intended as a mort- gage, the purchaser from the grantee with notice of the facts, stands in the place of the equitable mortgagee.' But where a deed intended as security is recorded, the defeasance not being recorded, a purchaser for value from the grantee, without notice of the defeasance, will hold an absolute title as against the grantor and his grantees. It is an ab- solute deed, as regards third persons, and a iona fide purchaser will take the land discharged of the equity of redemption of the mort- gagor.* § 473. Order of record. — Conveyances are directed to be recorded " in the order and as of the time when the same shall be delivered to the clerk for that purpose." ' If a county clerk should record amort- gage or deed in a blank space left in a book which had ceased to be used for current records, or in the book in use at a place among rec- ords of a date long anterior to the time it was left for record and to its date, it could not be affirmed that it was recorded according to law, or that it furnished the notice to subsequent incumbrancers or purchasers which the statute has provided for. The manner in which mortgages made to the commissioners for loaning the United States deposit fund are required to be recorded, is substantially the same, and the entry of such a mortgage out of the order due to its date, and upon a page which should have contained a mortgage several years antecedent in execution, is not notice to a subsequent mortgagee in good faith.° EFFECT OF THE EECOED. § 474. The effect of the record is limited to giving notice. — The effect of recording an instrument is limited to giving notice. It ' Warner v. Winslow, i Sandf. Ch. Whitlick v. Kane, i Paige, 202 ; Stod- 430. dard v. Rotton, 5 Bosw. 378. ^ Macaulay v. Porter, 71 N. Y. 173. ' i R. S. 260, § 24. 'Williams v. Thorn, 11 Paige, 459. 'N. Y. Life Ins. Co. v. White, 17 N. * Mills V. Comstock, 5 Johns. Ch. 214 ; Y. (3 Smith) 469. 824 MOBTGAGES OF EEAL PEOPERTT. [§§475-476. confers no validity upon the instrument whicli it did not have before, and for this reason the recording of a mortgage which has not been delivered is a nullity, and the subsequent assent of the mortgagee will not give him a preference over a person who has acquired rights in the property.' Any instrument which upon its face is regular, and purports to be a conveyance or a mortgage, may be recorded. But if it is not ia truth what it purports to be, it will not be aided by being engrossed by a recording clerk and put upon the files of a pubhc office." § 475. What the record of a deed is notice of. — A deed duly recorded is evidence not only of the transfer and title, but of the covenants contained in it," and the record of a mortgage is notice of the statements contained in it which describe the debt, either in accu- rate terms or by reference to the bond which it is intended to secure.* The record of a mortgage which, upon its face, does not contain an accurate and full statement of the debt secured, is nevertheless notice of its existence and contents, and the purchaser with such notice is bound by all of the equities which the holder of the mortgage had against the mortgagor whose place he takes. Th^ condition of a pur chaser in such a case is precisely the same as it would have been at common law, if he had purchased with actual notice of the prior mortgage. ° A mortgage, properly recorded, is notice to all persons that such an instrument exists, and that its contents are what is spread upon the record." § 476. The registry of a mortgage is notice of the contents of it, and of no more, and the purchaser is not to be charged with notice of facts which the records do not disclose. He is not bound to attend to the correctness of the registry. That is the business of the mortgagee, and if a mistake occurs to his prejudice, the conse- quences of it lie between him and the clerk, and not between him and the honafide purchaser. The act, in providing that all persons might have recourse to the registry, intended that as the correct and sufficient source of information ; and it would be a doctrine produc- ' Foster v. Beardsley Scythe Co., 47 498. But see Payne v. Avery, 2i Mich. Barb. 505. 524. 'Jackson v. Richards, 6 Cow. 617; 'Youngs v. Wilson, 27 N. Y. 351, Morrison v. Brand, 5 Daly, 40. rev'g s. c. 24 Barb. 510. ' Morris v. Wadsworth, 17 Wend. 103. ' Thomson v. Wilcox, 7 Lans. 376. * Dimon v. Dunn, 15 N. Y. (i Smith) §§ 477-478. J THE KECOEDIN-G ACTS. 325 tive of immense miscliief to oblige the purchaser to look, at his peril, to the contents of every mortgage, and to be bound by them when different from the contents as declared in the registry. The registry might prove only a snare to the purchaser, and no person could be safe in his purchase without hilnting out and inspecting the original mortgage, a task of great difficulty. The statute did not mean to put the party upon further inquiry. The registry was intended to contain, within itself, all the knowledge of the mortgage requisite for the purchaser's safety. On this principle, a mortgage for $3,000, in- correctly registered as being for $300, was held to be notice to a sub- sequent purchaser only for the smaller amount.' Where a mortgage was made to secure debts, one of " $30 or there- abouts," and another of " $40 or thereabouts," and the debts were $25.21 and $59.66 respectively, this was held sufficient to bind subse- quent purchasers." § 477. Priority of unrecorded conveyances and mortgages over judgments. — An unrecorded conveyance or mortgage is prior to a judgment docketed subsequently to the time of its delivery.' It is obvious that this rule invites frauds and perjuries, and in some States statutes have been enacted to extend the benefits of the record- ing acts to judgment creditors." Not only is the judgment creditor deferred to the prior unrecorded mortgage or conveyance, but the purchaser at the sheriff's sale under the judgment takes his title sub- ject to all of the infirmities of the lien and subject to be cut down or defeated by unrecorded liens or grants." The rule is different in New Jersey ' and in Alabama.' An attaching creditor is not a purchaser in a sense that would give him priority over a grantee or mortgagee holding under a prior unre- corded deed.' I 478. Record is notice only when grantor's deed is also re- corded. — The recording acts do not declare what effect shall be given ' Frost V. Beekman, i Johns. Ch. 288 ; * Clement's Ex'rs v. Bartlett, 33 N. J. s. c. afE'd 18 Johns. 544; Gilchrist v. Eq. 43; Bailey v. Timberlake, 74 Ala.221. Gough, 63 Ind. 576 ; Hill v. McNichol, * Clute v. Emmerich, 99 N. Y. 342, 76 Me. 314 ; Stevens v. Batchelder, 28 350 ; Frost v. Yonkers Savings Bank, Me. 218 ; Lowry v. Smith, 97 Ind. 466 ; 70 N. Y. 553. State V. Davis, 96 Ind. 539 ; Ijames v. " Sharp v. Shea, 32 N. J. Eq. 65. Gaither, 93 N. C. 358. ' Bailey v. Timberlake, 74 Ala. 221. 2 Booth v. Barnutn, 9 Conn. 286. ' Cowley v. McLoughlin, 141 Mass. Thomas v. Kelsey, 30 Barb. 268. 181. 326 MOETGAGES OF BEAL PBOPERTT. [§ 478. to the recording of conveyances upon the point of notice. They de- clare that, unless recorded, they shall be void as against subsequent purchasers in good faith and for value whose conveyances are iirst recorded. The courts, by construction, make the record of a con- veyance notice to subsequent purchasers ; but this doctrine is sub- ject to the limitation that it is notice only to those claiming under the same grantor, or through one who is the common source of title.' One of the rules as to notice from the registry of conveyances is, that the registry of a conveyance of an equitable title is notice to a subse- quent purchaser of the same interest or title, from the same grantor, but that it is not notice to a purchaser of the legal title from a person who appears by the record to be the real owner.' Thus, where a copartnership firm purchased and paid for real estate to be used for the purposes of its business and took the legal title in the name of one of the partners, the record of a mortgage executed by one of the other members of the firm of all of his right, title, and interest in the property, was determined to be no notice to a pur- chaser from the partner holding the title. ° When the deed of a vendor is not recorded, the record of a mort- gage given by his vendee for the purchase money will not be notice to a subsequent purchaser.^ Where a deed and a mortgage to the grantor to secure part of the purchase money were executed simultaneously on February 28, and were recorded together on March 3 at noon, and another mortgage on the same premises to another person, also stating that it was given to secure part of the purchase money, was executed March 1, and was recorded March 3 shortly before noon, itVas held that the first mort- gage was entitled to priority, and that the record of the second mort- gage was not notice to the first mortgagee, the vendor, since at that time the vendee's deed had not been recorded." ' Le Neve v. Le Neve, 2 L. C. in Eq. v. Bank of Kentucky, 4 J. J. Marsh, 208, note ; Murray v. Ballou, i Johns. 558 ; Wiseman v. Westland, i Younge & Ch. 565 ; Stuyvesant v. Hall, 2 Barb. Jerv. 117 ; Bedford v. Backhouse, W. Ch. 151 ; Raynor V.Wilson, 6 Hill, 469; Kelynge, 5; Traphagen v. Irwin, 18 Cook v. Travis, 20 N. Y. 400 ; Ligtner Neb. 195. V. Mooney, 10 Watts. 407 ; Leiby v. ^ pg^ Andrews, J., in Tarbell v. West, Wolf, 10 Ohio, 83 ; Bates v. Norcross, 86 N. Y. 280. 14 Pick. 224 ; Whittington v. Wright, 9 a Tarbell v. West, 86 N. Y. 280. Ga. 23 ; Fenno v. Sayre, 3 Ala. (N. S.) "i Losey v. Simpson, 11 N. J. Eq. 458 ; Losey v. Simpson, 3 Stockt. 246 ; 246. Truscott V. King, 6 Barb. 346 ; Halstead ' Boyd v. Mundorf, 30 N. J. Eq. 545. § 479. J THE EECOEMNQ- ACTS, 337 A sheriff's deed given in pursuance of a judgment and sale upon execution, is treated as if given by the judgment debtor himself. It conveys precisely what he could have conveyed when the judgment was docketed. The sheriff, by authority of law, takes his property and conveys it to satisfy hie debt, and the transfer of title is the same as if the sheriff had in fact acted as the authorized attorney of the debtor. The grantee in such a case holds, not under the sheriff, but under the debtor, and the deed, when recorded, is protected by, and has the benefit of, the recording act.' The fact that a mortgage is dated later than the time when it was recorded, does not give priority to another mortgage recorded after the record of the first, but before its date.^ A mortgage recorded but not delivered, and held by the mortgagor ready for dehvery when the loan to be secured by it is made, is not operative as against other liens until its dehvery," except in favor of ionajide purchasers of it.* A mortgage not recorded until after the death of the mortgagor is not for that reason inoperative as against the general creditors of the estate." A mortgage dated and recorded before the deed to the mortgagor is dated and recorded, is nevertheless notice to a purchaser from the mortgagor after the recording of his deed." But the record of the mortgage is not notice to a purchaser from the grantor of the mort- gagor until his deed is recorded.' § 479. Notice of grantor's title. — While it is true as a general rule that a purchaser is not bound to search the records for incur - brances as against a title not appearing by the records, ° this is not a universal rule, and it is not applicable when the purchaser has act- ual notice of the existence of a mortgageable estate, in the person ' Per Earl, J., in Hetzel V. Barber, 69 ^ Life Ins. Co. v. Rowand, 26 N. J. N. Y. I ; Jackson v. Chamberlain, 3 Eq. 389. Wend. 620 ; Jackson v. Post, 15 Wend. ^ Bailey v. Crim, 9 Bissell, 95. 588, 596 ; Hooker v. Pierce, 2 Hill, 650 ; ' Gill v. Pinney's Adm'r, 12 Ohio St. Lessee of Cooper v. Galbraith, 3 Wash. 38. C. C. R. 546, 550 ; McKnight V. Gordon, "Semon v. Terhune, 40 N. J. Eq. 364, 13 Rich. Eq. 222, 239. and note. ^Jacobs V. Deni^on, 141 Mass. 117; 'Bingham v, Kirkland, 34 N.J. Eq. Parke v. Neeley,^go Pa. St. 52 ; Stone- 229. breaker v. Kerr, 40 Ind. 186 ; Partridge * Cook v. Travis, 20 N. Y. 402 ; Losey V. Swazey, 46 Mo. 412 ; Fowler v. Mer- v, Simpson, 3 Stockt. 246, rill, ri How. (U. S.) 375. 328 MOETGAGES OF EEAL PBOPEKTT. [§§ 480-481. against whom the search is made, prior to the date of the evidence of such person's title to the absolute fee. So, where a person who was in possession of land under a parol contract of purchase, executed a mortgage which was recorded, it was held that, as against one who knew the nature of the interest of the mortgagor, such mortgage was constructive notice.' § 480. Covenants of seizin and title. — A mortgage recorded be- fore the date of the mortgagor's title is not ordinarily -notice to a subsequent purchaser." If, however, the mortgage contains covenants of seizin and of title,' and the title is subsequently acqiiired by the mortgagor, he will not, in a court of justice, be heard to say that he had not title at the time it was executed, or that the title did not pass to the mortgagee. The doctrine is also well settled that the estoppel binds not only the parties, but all privies in estate, privies in blood, and privies in law ; and in such case, the title is treated as having been previously vested in the mortgagor, and as having passed imme- diately upon the execution of his mortgage by way of estoppel. A record, therefore, of the mortgage prior t6 the acquisition of title by the mortgagor, is in such a case, constructive notice to a subsequent purchaser in good faith.' § 481. Extent to which records must be searched to insure safety. — If a conveyance be made for a valuable consideration and without notice to the grantee, either actual or constructive, of any other grant or incumbrance, the grantee will be protected as against all subsequently recorded transfers and Kens. This protection will also be extended to a purchaser from the grantee, and if such pur- chaser could know that the first transfer had been honaJulesxidL with- out actual notice, outside of the records, of any defect, he could ex- amine the records down to the date of the record of the conveyance to his grantor, and there stop. If, however, the conveyance from the original grantor had been without consideration, or if it had been re- ceived by the grantee when he had notice of an unrecorded convey- ance, which was afterward recorded, the innocent purchaser from such grantee would be bound by the subsequent record.* ' Crane v. Turner, 7 Hun, 357, afB'd Co., 44 Barb. 239 ; i Story's Eq. Jur. 67 N. Y. 437. §§ 396, 397. « Farmers' Loan & Trust Co. v. Malt- « Tefft v. Munson, 57 N. Y. 97 ; White by, 8 Paige, 361 ; N. Y. Life Ins. Co. v. v. Patten, 24 Pick. 324. White, 17 N. Y. 469; Cook v. Travis, * Jackson v. Post, 15 Wend. 588; Van 20 N. Y. 400 ; Doyle v. Peerless Pet. Rensselaer v. Clark, 17 Wend. 25 ; Ring § 482.] THE BECOEDING ACTS. 329 Since a purchaser is charged with notice of all recorded instruments made by any person through whom the title passed, which contain covenants of warranty, even though they be recorded prior to the date of the conveyance to the persons by whom they are made, it is necessary, in order to insure absolute protection, that he should search the records from the time that each owner became of full age. And since some one of the conveyances through which he must trace title may have been without actual consideration, though a consideration be expressed, and since some one of the grantors may have had actual notice of an unrecorded instrument, he must also search for convey- ances and mortgages made by each and every of the grantors down to the time when he himself pays his consideration and records his deed. It is not the practice to make so thorough an examination of the records, and if made, it would, in our principal cities, impose an oppressive tax and expense upon real estate transfers.' As the law stands, it is believed by many conveyancers to constitute a dangerous trap fbr honest purchasers.' WHO PEOTECTED BY EECOEDING ACTS. § 482. The recording acts only protect bona fide purchasers. — No person is protected by the recording acts who is not a " purchaser in good faith and for a valuable consideration." He must not only have received his deed without notice of the prior unrecordeH deed, but he must also have surrendered some security or valuable right." The receiving of the property as security for, or in pay- ment of, a precedent debt, when no security is surrendered or any- thing of value parted with, is not a purchase for a valuable considera- tion.' The extension of the time for the payment of a debt will make a V. Steele, 3 Keyes, 450 ; Goelet v. Mc- Westbrook v. Gleason, 79 N. Y. 23 ; Manus, i Hun, 306, affi'd by Court of Merriman v. Hyde, g Neb. 113. Appeals ; Schutt v. Large, 6 Barb. 373. ' Young v. Guy, 87 N. Y. 457, aiB'g s. See contra, Greene v. Deal, 4 Hun, 703, c. 23 Hun, i ; De Lancey v. Stearns, 66 rev'd 64 N. Y. 220 ; Ledyard v. Butler, N. Y. 157. See as to a valuable consid- 9 Paige, 132. ^ eration within the meaning of the re- ' See Greene v. Deal, 4 Hun, 703, and cording acts, Dickerson v. Tillinghast, 4 note. Paige, 215 ; Evertson v. Evertson, 5 Id. " Webster v. Van Steenbergh, 46 Barb. 644, and cases cited ; Weaver v. Barden, 211 ; Lawrence v. Clark; 36 N. Y. 128 : 49 N. Y. 286. 330 MOETGAGES OF REAL PEOPEETT. [§§ 483-484, mortgagee a purchaser for value.' But the mere taking of collateral security on time will not have this effect.'' Where an assignment of a mortgage was made in payment in part for a precedent debt and in part for value, the assignee was protected as against equities only to the extent of the money actually .paid on the faith of the security." A person who receives a conveyance and pays- nothing, but simply gives his bond and mortgage to secure the entire consideration paya- ble at a future day, is not a purchaser for a valuable consideration.'' But a person in the possession of lands under a contract of purchase, who has made payments under the contract, and has made valuable improvements upon the premises, and who takes a deed and surren- ders his equitable title, giving a purchase-money mortgage for the balance of the price, is a purchaser for value within the recording act, and is protected from a prior unrecorded mortgage.' An unrecorded grant or mortgage has a preference over a subse- quent general assignment." § 483. Purchase from one having notice. — A lona fide pur- chaser who records his deed is protected by the recording acts from all unrecorded conveyances and mortgages of which he has no notice, even though his grantor may have had notice of them.' § 484. Burden of proof. — A party claiming the beneiit of the recording act as a purchaser in good faith, has the burden of proving the payment of consideration." And a person seeking to charge another with notice, must prove that fact." A deed acknowledging the payment of the purchase money is ' Durkee v. Nat. Bank of Fort Edward, * Westbrook v. Gleason, 79 N. Y. 36 Hun, 565 ; Hale v. Omaha Nat. Bank, 23. 39 N. Y. Supr. (7 J. & S.) 207 ; Weaver 'Westbrook v. Gleason, 89 N. Y. V. Barden, 49 N. Y. 286 ; Gilchrist v. 641. Couch, 19 Alb. L. J. 276 ; Schumber v. ^ Wyckoff v. Remsen, 11 Paige, 564 ; Dillard, 55 Miss. 348 ; Port v. Embree, Nice's Appeal, 54 Pa. St. 200. 54 Iowa, 14 ; Jones v. Robinson, 77 Ala. ' Wood v. Chapin, 13 N. Y. 509 ; Fort 499. V. Burch, 5 Denio, 187 ; Westbrook v. ^ Gary v. White, 52 N. Y. 138, rev'g 7 Gleason, 79 N. Y. 23, 31 ; Decker v. Lans. I ; Lewis v. Anderson, 20 Ohio Boice, 83 N. Y. 215, 221 ; Varick v. St. 281. Briggs, 6 Paige, 323 ^French v. O'Brien, 52 How. 394; "Seymour v. McKinstry, 21 W. Dig. citing Weaver v. Barden, 49 N. Y. 286, 77 ; Withers v. Little, 56 Cal. 370. where this subject is elaborately dis- "Jackson v. Reid, 30 Kans. 10; Hos- cussed in two opinions, reaching differ- kins v. Carter, 66 Iowa, 638 ; Fort v. ent conclusions. Burch, 6 Barb. 5o. §§485-487.] THE EECOBDING ACTS. 831 prima facie evidence that the grantee was a purchaser in good faith for a valuable consideration within the recording act.' § 485. Subsequent purchasers alone protected.^-Where an administrator sold land, in ignorance of an unrecorded mortgage upon it, for the purpose of obtaining assets to pay creditors, under an order of the court, it was held that while the purchaser was protected under the recording acts, this did not relieve the administrator from the equitable charge of the mortgage lien, which was directed to be paid out of the proceeds of the land in preference to general creditors.^ Where a mortgagor, with the intent and purpose to defraud his mortgagee and defeat his lien, executes a junior mortgage and pro- cures it to be recorded prior to the recording of the prior mortgage, he is liable in damages to the holder of the first mortgage. The basis of the action is the dishonest purpose, the burden of proving which rests upon the plaintiff.^ § 486. The recording acts protect only those who record their deeds. — It will also be noted that no one is protected by the recording acts, except a person " whose conveyance shall be first duly recorded." ' NOTICE AS AFFECTIBTG EECOEDING ACTS. § 487. What actual notice is equivalent to a record. — The object of the recording acts is to protect the vigilant, by affording to every purchaser the means of ascertaining the condition of the title which he is about to purchase. An unrecorded deed is always good as against the grantor or his heirs, '^ and also as against all persons who take title from the grantor with actual notice of it.° The recording acts supply a means of giving notice, and all pur- ' Lacustrine Fer. Co. v. L. G. & Fer. * Fort v. Burch, 5 Den. 187 ; Jackson Co., 82 N. Y. 476 ; Wood v. Chapin, 13 v. Van Valkenburgh, 8 Cow. 260 ; But- N. Y. (3 Kern.) 509 ; Jackson v. Mc- ler v. Viele, 44 Barb. 166 ; Thompson v. Chesney, 7 Cow. 360. Maxwell, 16 Fla. 773 ; Manufacturers' & ^ Kirkpatrick v. Caldwell's Adm'r, 32 Mechanics' Bank v. Bank of Pennsyl- Ind. 299. vania, 7 Watts & Serg. (Pa.) 335 ; 42 ^ Graves v. Briggs, 6 Abb. N. C. 38. Am. Dec. 240 ; Kirkpatrick v. Ward, 5 * Fort V. Burch, 5 Den. 187 ; West- Tenn. (B. J. Lea) 434 ; Hunt v. Hunt, brook V. Gleason, 79 N. Y. 23, rev'g s. 38 Mich i6i. In Ohio a purchaser for c. 14 Hun, 245. value has superior title to an unrecorded ' Jackson v. Colden, 4 Cow. 266 ; mortgage of which he has notice. Do- Jackson V. West, 10 Johns. 466 ; Wood herty v. Stimmel, 40 Ohio St. 294 ; Bloom V. Chapin, 13 N. Y. (3 Kern.) 509. v. Noggle, 4 Ohio St. 55. 332 MOETGAGES OF REAL PROrEKTY. [§ 488. chasers are bound to acquaint themselves with the facts which are spread upon the public records, but they cannot, by doing this, disre- gard all information which may reach them from other sources. The earlier cases, both in England and -in this country, favored the doc- trine that actual notice, in order to be a substitute for record notice, , must be more clear and distinct than would be required in the absence of a recording act,' but some later decisions disregard or repudiate the distinction. There is no foundation in reason for a rule which would require more evidence to establish a want of good faith under the recording acts than in any other case, and the authorities are suf- ficient to show that such distinction is not uniformly recognized at the present day by the courts." Though the record is not constructive notice of any fact not ap- pearing on it, an inspection of the record will be actual notice and may suggest inquiries which will charge a purchaser with notice.' § 488. Constructive notice. — Notice is of two kinds, actual and constructive. Actual notice embraces all degrees and grades of evi- dence from the most direct and positive proof to the slightest circum- stance from which a jury would be warranted in inferring notice. It is a mere question of fact, and is open to every species of legitimate evidence which may tend to strengthen or impair the conclusion. Constructive notice, on the other hand, is a legal inference from ^es- tablished facts, and, like other legal presumptions, does not admit of dispute. " Constructive notice," says Judge Stoet, " is in its nature no more than evidence of notice, the presumption of which is so vio- lent that the court will not even allow of its being controverted." * A recorded deed is an instance of constructive notice. It is of no con- sequence whether the second purchaser has actual notice of the prior deed or not. He is bound to take, and is presumed to have, the requisite notice. So, too, notice to an agent is constructive notice to the principal, and it would not in the least avail the latter to show that the agent had neglected to communicate the fact.' In such cases, the law imputes notice to the party, whether he has it or ' Dey V. Dunham, 2 Johns. Ch. 182 ; 'Musgrove v. Bonser, 50 Oreg. 313 ; Jackson v. Van Valkenburgh, 8 Cow. s. c. 20 Am. R. 737. 260 ; Riley v. Hoyt, 29 Hun, 114. * Story's Eq. Jur. § 3gg. 'Williamson v. Brown, 15 N. Y. 354, = Chase v. Welsh, 45 Mich. 63B ; May 358 ; Tuttle V. Jackson, 6 Wend. 213 ; v. Borel, 12 Cal. gi ; Spielman v. Kliest, Jackson v. Post, 1 5 Wend. 588 ; Grim- 36 N. J. Eq. igg. stone V. Carter, 3 Paige, 421. §§ 489-490.] THE EECOKDIKG ACTS. 333 not. Legal or implied notice, therefore, is the same as construc- tive notice, and cannot be controverted by proof.' § 489. Notice to put upon inquiry. — If direct and actual notice be given to the purchaser of the very fact of the existence of the prior conveyance, and of all the rights which were acquired under it, as, for instance, by showing to him the conveyance itself, there can be no difficulty in charging him with the consequences if he assumes to disregard the existence of equities which are so plainly exhibited to him. But actual notice is seldom so full and satisfactory as to furnish all the details which a purchaser would desire to know, and it is sometimes so vague as merely to suggest the possibility of the existence of a previous conveyance. It is i?.ot necessary to show ex- press notice of the particular instrument, but notice of any fact calculated to put a party upon inquiry is, in the absence of explana- tion, sufficient to charge him with notice of all instruments which an inquiry would have disclosed. The degree of notice required is, in the language of the authorities, such as " would lead any honest man using ordinary caution to make further inquiries." " § 490. Degree of inquiry required. — The cases received a care- ful examination by Judge Selden, in WilUwmson v. Brown (15 IS. Y. 354, 362), and he stated the true doctrine on this subject to be, " that where a purchaser has knowledge of any fact sufficient to put him on inquiry as to the existence of some right or title in conffict with that he is about to purchase, he is presumed either to have made the inquiry and ascertained the extent of such prior right, or to have been guilty of a degree of negligence equally fatal to his claim to be considered a hona fide purchaser. This presumption, however, is a mere inference of fact, and may be repelled by proof that the pur- chaser failed to discover the prior right, notwithstanding the exercise of proper dihgence on his part." " In the same case Judge Paige states the rule as follows : " A party in possession of certain informa- tion will be chargeable with a knowledge of all facts which an inquiry suggested by such information, prosecuted with due diligence, would 'Per Selden, J., in Williamson v. 461; Hawley v. Cramer, 4 Cow. 717; Brown, 15 N. Y. 354. See article 29 Jackson v. Cadwell, i Id. 622 ; Tuttle v. Alb. L. J. 244. Jackson, 6 Wend. 213. ' Reed v. Gannon, 50 N. Y. 345, 349 ; ' See also Reed v. Gannon, 50 N. Y. Howard Ins. Co. v. Halsey, 8 N. Y. (4 345, 350. Seld.) 275 ; Pitney v. Leonard, i Paige, 334 MORTGAGES OF EEAL PKOPESTT. [§ 491. have disclosed to him." ' In Howard Ins. Co. v. HaUey (4 Sand. 5Y8), Judge Duee states the rule as follows : " The rule of law that must govern us is as inflexible as it is just, that he who is bound to inquire before the performance of an act, by which he has reason to believe that the rights of others may be affected, is chargeable with a knowledge of all the facts that an inquiry properly made would have disclosed to him." In Flagg v. Mcmn (2 Sumner, 554), Judge Stoet states the rule as follows : " If he does not inquire, he is bound in the same manner as if he had inquired and had positive notice of the title of the party in possession." In Heed v. Oannon (50 N. Y. 345), a trust deed of certain chattels was executed by a husband for the benefit of his wife, from whom he was separating, in which he covenanted to pay " any lien, mortgage, or incumbrance, of whatever kind or description, existing on the same," within a specified time. This was held to be sufficient to put the trustee upon inquiry as to the extent and description of the exist- ing incumbrances referred to, and to charge him with notice of them. In JElUs V. Horrmcm (90 N. Y. 466), the authorities were elabo- rately examined by Judge Teact, and a purchaser of real estate was held bound by knowledge of a vendor's lien from statements made to him by the person from whom he purchased to the effect that she " had to pay $500 on the place now." This was held to be sufficient to notify him that there was a vendor's lien and to put him upon inquiry as to its extent. § 491. The notice which will put a party upon inquiry must be actual notice." A purchaser is bound by the constructive notice furnished by the public records, but he is never constructively put upon inquiry by them. He may get actual notice of facts by papers which are irregular or defective in their execution when he inspects and examines the copies of them in the books in the clerk's office, and knowledge so acquired may put him upon inquiry, but he is not legally chargeable, under the recording acts, with knowledge of any fact except those which the records disclose. The object of recording deeds is not to suggest inquiries, but to answer them.° Notice may be given to the purchaser, or to his agent or attorney ' Citing Howard Ins. Co. v. Halsey, 4 'Frost v. Beekman, i Johns. Ch. 288; Sand. 575; Kennedy V. Greene, 3 Mylne s. c. affi'd 18 Johns. 544; Thomson v. & Kees, 6gg. Wilcox, 7 Lans. 376 ; Riley v. Hoyt, 29 *See article in 2g Alb. L. J. 244. Hun, 114. § 492.] THE KECOEDING ACTS. 335 in the special transaction ;' but while, as a rule, it is true that the knowledge of the attorney is the knowledge of his client, the principle does not apply where the attorney is himself the borrower." Where a conveyance or mortgage is good for want of notice of a prior unrecorded incumbrance, it cannot be affected by subsequent notice of it. Persons taking title under the grantee or mortgagee will be protected, no matter what notice they may have had, for it would be idle to pronounce a title valid which would not be equally valid when transferred to a new owner.' § 492. Possession as notice. — As a general rule, the law regards the actual occupancy of land as equivalent to notice to all persons dealing with the title, of the claim of the occupant." But this is not an absolute proposition which is to be taken as true in all possible relations. The circumstances known may be such that the occupancy will not suggest to a piirchaser an inquiry into the title or claim under which it may be held ; and where the inquiry may be omitted in good faith and in the exercise of ordinary prudence, no one is bound to make it. Possession out of the vendor and in another person only suggests an inquiry into the claims of the latter. Ordinarily that in- quiry should be made, because it evinces bad faith or gross neglect not to make it. But the question in such cases is one of actual notice, and such notice will be imputed to a purchaser only where it is a reason- able and just inference from the visible facts. He cannot wilfully close his eyes and then allege good faith, nor can he pause in the examination where the facts made known to him plainly suggest a further inquiry to be pursued. The adjudged cases which have been the most carefully considered, do not carry the doctrine of notice, as implied or inferred from circumstances, further than is here in- dicated." ' Haywood v. Shaw, i6 How. iig. Neve, Amb. 436 ; s. c. 2 Lead. Cas. in "The Hope Fire Ins. Co. v. Cambrel- Eq., 4th Am. Ed. 180 ; Wade on Notice, ling, I Hun, 493. §§ 273-306 ; Holmes v. Powell, 8 De G. 'Cook V. Travis, 22 Barb. 338; Jack- M. & G. 572 ; Berryhill v. Kirchner, 96 son V. Given, 8 Johns. 137 ; Jackson v. Pa. St. 489 ; Hottenstein v. Lerch, 104 McChesney, 7 Cow. 360; Lacustrine Fer. Pa. St. 454 ; Rowe v. Ream, 105 Pa. St. Co. V. L. G. and Fer. Co., 82 N. Y. 476, 543 ; Noyes v. Hall, 97 U. S. 34; Coari 483 ; Griffith v. Griffith, 9 Paige, 315. v. Olsen, gi 111. 273 ; Clevingerv. Ross, * Ranney v. Hardy, 43 Ohio St. 157 ; 109 111. 349 ; Branson v. Brooks, 68 Ala. Cunningham v. Buckingham, i Ohio St. 248 ; Pique v. Arendale, 71 Ala. 91 ; 264 ; Bank v. Sawyer, 38 Ohio St. 339 ; Weisburger v. Wisner, 55 Mich. 246 ; Prrkins v. West, 55 Vt. 265 ; Morrison Allen v. Cadwell, Id. 8. v. March, 4 Minn. 422; Le Neve v. Le ^Comstock, J., in Cook v. Travis, 20 336 MORTGAGES OF REAL PROPERTY. [§ 493. The possession which will be equivalent to actual notice to a sub- sequent purchaser, must be an actual open and visible occupation in- consistent with the title of the apparent owner by the record ; not equivocal, occasional, or for a special and temporary purpose. Con- structive possession will not suffice.' Where the owner and occupant of a house and lot conveyed the same to her son, and took back a lease for her life, and there was no change in the possession, and the conveyance was recorded, but the lease was not, it was held that the possession of the mother was no notice of her rights to a mortgagee of the son.' So, the residence of a wife on lands with her husband is no notice to purchasers from him that she claims rights in them.'' § 493. Notice to an agent is for some purposes deemed equivalent to notice to the principal. But to have it operate in this way, the agency must be of such a nature as to make it the duty of the agent to communicate the information to his principal.' Notice to an at- torney employed to examine a title of a defect in it would be as operative as if it were given to his principal,' and the rule will em- brace other agents." But in all these cases notice to bind the prin- cipal should be notice in the same transaction or negotiation ; for if the agent, attorney, or counsel was employed in the same thing by another person or in another business or affair, and at another time, since which he may have forgotten the facts, it would be unjust to charge his present principal on account of such a defect of memory.' N. Y. 400 ; Jones v. Smith, i Hare, 43 ; ^ Paulus v. Latta, 93 Ind. 34. Hewes v. Wiswall, 8 Greenl. 94 ; Flagg ^ Fairfield Savings Bank v. Chase, 72 V. ftlann, 2 Sumn. 555 ; McMechan v. Me. 226 ; s. c. 39 Am. Rep. 319, 322, Griffing, 3 Pick. 156; Scott v. Gallagher, note; Drake v. Barker, 54 Vt. 372; 14 Serg. & R. 333 ; see Trustees of Bierce v. Red Bluff, 31 Cal. 160. Union College v. Wheeler, 61 N. Y. ' Constant v. American Baptist Home 88. Mission Society, 3 How. N. S. 517 ; In ' Brown v. Volkenning, 64 N. Y. 76, galls v. Morgan, 10 N. Y. 178 ; Bauer v. 83 ; Page v. Waring, 76 N. Y. 463 ; At- Pierson, 46 Cal. 293. wood V. Bears, 47 Mich. 72 ; Smith v. ' Bank of the United States v. Davis Jackson, 76 111. 254 ; Bingham v. Kirk- 2 Hill, 451 ; Dillon v. Anderson, 43 N. land, 34 N. J. Eq. 229; Cabeen v. Breck- Y. 231 ; The Distilled Spirits, 11 Wall, enridge, 48 111. 91 ; Ely v. Wilcox, 20 356 ; The Bank for Savings v. Frank, Wis. 523 ; Moyer v. Hinman, 13 N. Y. 45 N. Y. Supr. Ct. R. 404 ; Kendall v 180 ; Greer v. Higgins, 20 Kans. 420 ; Niebur, Id. 542, affi'd 46 Id. 544 ; 87 Meehan v. Williams, 48.Penna. St. 238 ; N. Y. i ; Robinson v. Pebworth, 71 Ala. Noyes v. Hall, 97 U. S. 34 ; article in 29 240. Alb. L. J. 265. ' I Story Eq. Jur. § 408 ; Yerger v. ^ Staples v. Fenton, 5 Hun, 172. Barz, 56 Iowa, 77. §§ 494r-495.] THE KECOKDIKG ACTS. 337 A principal with knowledge of facts derogatory to the title which he is about purchasing cannot protect himself by the employment of an agent who is ignorant of them.' § 494. Recitals in conveyances. — ^A grantee is ordinarily charge- able with notice of the stipulations and recitals of the conveyances under which he claims title, and if the premises are expressly de- clared to be subject to a specified mortgage, he may not defeat the claims of the mortgagee because such mortgage was not recorded.'' Upon the same principle a second mortgagee takes subject to a prior unrecorded mortgage expressly referred to in the deed to his grantor and excepted therefrom.' It has also been said that if there is any- thing contained in any deed or record constituting a part of the chain of title which a prudent purchaser ought to examine, to induce an inquiry in the mind of an intelligent person, he is chargeable with notice of the facts so contained,* and some early cases, and particu- larly some English cases, carry this doctrine to an extreme length.' But the principles upon which our recording acts are based require that the notice of a purchaser shall be limited to the facts actually spread out upon the pubhc records. The function of a record is not to suggest inquiries, but to answer them." A purchaser is bound to note the exceptions and reservations from his title contained in earher deeds, but inquiries outside of the records are not required unless the omission to make them can be said to amount to bad faith. So it has been held that a purchaser will not be charged with notice of an unrecorded mortgage merely because a previous conveyance recites that the premises are subject to a mortgage of a certain amount, but without disclosing the name either of the mortgagor or the mort- gagee.' § 495. The mere silence of a mortgagee who has recorded his mortgage, when he is present at the execution of a subsequent con- veyance or mortgage, is not sufficient to affect his right, unless that ^ Murphy v. Nathans, 46 Pa. St. ' Brisco v. Earl of Banbury, i Ch. Ca. 508. 287 ; Coppin v. Fernyhough, 2 Bro. C. ' Howard v. Chase, 104 Mass. 249 ; C. 291 ; Hope v. Liddell, 21 Beav, 183 ; Kitchell V. Mudgett, 37 Mich. 81 ; Gar- Howard Ins. Co. v. Halsey, 8 N. Y. rett V. Puckett, 15 Ind. 485 ; Ross v. 271 ; Green v. Slayter, 4 Johns. Ch, 38. Worthington, 11 Minn. 438. " Frost v. Beekman, i Johns. Ch. 288, ' Baker v. Mather, 25 Mich. 51. affi'd 18 Johns. 544. * Cambridge Valley Bank v. Delano, ' Crofut v. Wood, 3 Hun, 571 ; Jack- 48 N. Y. 327, 336. son V. Davis, 18 Johns. 7. 23 338 MORTGAGES OF EEAL PEOPERTT. [§§ 496-497. silence was intentional and for the purpose of deception. That infer- ence is not to be drawn from silence alone, but from the operation of our recording acts. There must be active fraud charged and proved, such as false representations or denial upon inquiry, or artful assur- ances of good title, or deceptive silence when information is asked. The burden of the charge and of the proof lies upon the purchaser. He must make out the fraud, and the mortgagee is to be presumed innocent until proved to be guilty.' Where a mortgage was duly executed and recorded and the mort- gaged premises were subsequently sold at sherifE's sale on a judgment subsequent to the recording of the mortgage, and the mortgagee was present at the sherifE's sale and kept silent in respect to his mortgage, it was held that he was not estopped from asserting his prior claim.' EECOEDIKG ASSIGNMENTS OF MORTGAGES. § 496. Before the passage of the Revised Statutes, an assign- ment of a mortgage might be recorded, and the record was evidence,' but it was not required to be recorded ; and on the principle that the law will not intend that to be known for the existence of which there is no legal necessity, it was held that the recording of an assignment of a mortgage did not amount to constructive notice.* § 497. Under the provisions of the Revised Statutes the prin- ciples of the recording acts are extended to an assignment of a mort- gage of an interest in real estate ; and it has been determined that the assignment of a mortgage of real estate is a " conveyance " within the meaning of those acts. The record of such an assignment is con- structive notice thereof to all subsequent assignees of the mortgage who purchase it from the assignors ; and unless such assignment is recorded, it will be invalid as against a subsequent assignee or pur- chaser of the mortgage in good faith and without notice, whose assign- ment shall be first duly recorded." It is, however, provided that ' Brinckerhoff v. Lansing, 4 Johns, affi'd 47 N. Y. 307 ; Fort v. Burch, 5 Den. Ch, 65 ; Rice v. Dewey, 54 Barb. 455 ; 187 ; Williams v. Birbeck, Hoff. Ch, 359; Fisher's Ex'r v. Mossman, 11 Ohio St. 42. New York Life Ins. & Trust Co. v. Smith, ''■ Fisher's Ex'r v. Mossman, n Ohio 2 Barb. Ch. 82; Purdy v. Huntington, St. 4a, 46 Barb. 389; The Trustees, etc., v. ° Roberts v. Jackson, i Wend. 485. Wheeler, 59 Barb. 585 ; Campbell v. * James v. Morey, 2 Cow. 246. Vedder, 3 Keyes, 174; Purdy v. Hunt- ' Vanderkemp v. Shelton, 11 Paige, 28; ington, 42 N. Y. 334; Westbrook v. Glea- Belden v. Meeker, 2 Lans. 470 ; s. c. son, 79 N. Y. 23. § 498.] THE BECOEDING ACTS. 339 " the recording of an assignment of a mortgage shall not be deemed in itself notice of sach assignment to a mortgagor, his heirs or per- sonal representatives, so as to invalidate any payment made by them, or either of them, to the mortgagee." ' § 498. The recording of the assignment is notice, therefore, to I subsequent assignees of the mortgage in good faith and for a valuable \ consideration. It is not notice to the mortgagor, or his heirs or per- i sonal representatives, for the purpose of invalidating payments made | by them, or either of them, to the mortgagee ;' but it is notice to ' subsequent grantees of the mortgagor,' and it may also be ques- ' tionable as to whether it is not for certain purposes notice to the mortgagor himself. In some cases the statement has been broadly made that it is notice only to subsequent assignees of the mortgage ;* but this notion has been distinctly overruled." It is notice to all per- sons, save as excepted by the statute." On the other hand, it has been determined that the record of an assignment is notice to a purchaser at a foreclosure under a prior mortgage, and that if the assignee is not made a party, his claim will not be barred by the sale.'' It has also been held that an assignment of a mortgage, duly recorded, is con- structive notice, as against a grantee of the mortgagor, that the mort- gagee can no longer deal with the mortgage interest ; and that a subsequent discharge or release of the Ken of the mortgage executed by him is invalid.' It has been asserted that the record of an assignment of a mortgage is notice to all the world except the mortgagor, his heirs- and per- sonal representatives ;° and this doctrine seems to be sustained by the more recent decisions." ' I R. S. 763, § 41. See Van Keuren v. * Decker v. Boice, 83 N. Y. 214, 221. Corkins, 66 N. Y. 77, affi'g 4 Hun, ° Viele v. Judson, 82 N. Y. 32. 129. ' Vanderkemp v. Shelton, 11 Paige, 28, ^ Pettus V. McGowan, 37 Hun, 409. approving Clarke, 321 ; Moore v. Sloan, ^ Brewster v. Carnes, Ct. of App. Dec. 50 Barb. 442 ; Pickett v. Barron, 29 Barb. 7, 1886 ; 35 Alb. L. J. 95 ; probably in 505 ; Winslow v. McCall, 32 Barb. 241 ; 103 N. Y. Ely V. Scofield, 35 Barb. 330. * Greene v. Warnick, 64 N. Y. 220; 'Belden v. Meeker, 47 N. Y. 307; s. c. Crane v. Turner, 67 N. Y. 437 ; Reed v. 2 Lans. 470 ; Smyth v. Knickerbocker Marble, 10 Paige, 409; Campbell v. Ved- Life Ins. Co., 21 Hun, 241 ; Heilbrun v. der, 3 Keyes, 174; Purdy v. Huntington, Hammond, 13 Hun, 474. 42 N. Y. 334 ; The New York Life Ins. ' Ely v. Scofield, 35 Barb. 330. & Trust Co. V. Smith, 2 Barb Ch. 82 ; '" Decker v. Boice, 83 N. Y. 215; Smyth Hoyt V. Hoyt, 8 Bosw. 511 ; Gillig v. v. Knickerbocker Life Ins. Co., 84 N. Y. Maass, 28 N. Y. 191. 589. 340 MORTGAGES OF EEAL PEOPEETT. [§§499-500. The recording of an assignment of a mortgage is notice to a pur- chaser of the equity of redemption, and payments made by him to the assignor after the assignment are invalid and do not bind the assignee.' § 499. To what extent recording assignment protects as- signee.— The hona fide purchaser of a mortgage who procures the assignment to him to be properly recorded, is protected by the re- cording acts as against previous unrecorded releases, or agreements to release, executed by his assignor." The purchaser of a recorded mortgage, without actual notice of a prior unrecorded mortgage, obtains priority, and this rule prevails notwithstanding the party from whom he purchased had notice.' § 500. Assignment is a " conveyance." — An assignee in good faith, and for a valuable consideration, of a recorded mortgage gets no preference over an unrecorded deed or mortgage by reason of such record of the assigned mortgage, when the mortgagee or assignor himself could not claim it in consequence of having had notice, or by reason of any other equity." The contrary rule, which was declared in Jackson v. Van Valkenb'wrg'k (8 Cow. 260), under the former statute, cannot, in view of the decisions under the Revised Statutes, be regarded as any longer in force." But it does not follow that an assignee of a mortgage does not gain a preference over an unrecorded mortgage by reason of the prior recording of his assignment. An assignment of a mortgage is " conveyance " within the recording act. An assignee, therefore, whose assignment is first recorded, and who takes his assignment in good faith and for a valuable consideration, is protected against all unrecorded mortgages which are, as to him, by the express terms of the statute, void. The assignee in good faith and for value of a mortgage, by recording his assignment may, in this way, gain priority over a prior unrecorded mortgage, although it could not be claimed by his assignor." ' Brewster v. Games, Ct. of App. Dec. Mass. ii2 ; Glidden v. Hunt, 41 Mass. 7, 1886 ; 35 Alb. L. J. 95 ; probably in 221. 103 N. Y. ■• Decker v. Boice, 83 N. Y. 215, 2ig ; * St. John V. Spaulding, i N. Y. Sup. Fort v. Burch, 5 Den. 187 ; Westbrook (T. & C.) 483. V. Gleason, 79 N. Y. 23. ' Jackson v. Reid, 30 Kans. 10 ; Wade » Per Andrews, J., in Decker v. Boice, on Notice, §§ 241, 262 ; Trull v. Big- 83 N. Y. 215, 219. elow, 16 Mass. 406 ; Mott v. Clark, 9 « Decker v. Boice, 83 N. Y. 215, affi'g Penna. St. 399 ; Morse v. Curtis, 140 s. c. 19 Hun, 152 ; overruling Crane v. Turner, 67 N. Y. 437. §§ 501-502. J THE EECOKDING ACTS. 341 So, where a mortgage was assigned and the assignment was record- ed, a release subsequently executed by the mortgagee was held of no force, and the mortgagor's grantee was not permitted to show that such release was executed in pursuance of a parol agreement contem- poraneous with the mortgage.' The apparent owner of record of a mortgage may execute a certifi- cate competent to discharge it, notwithstanding the fact that he has executed and delivered an assignment which has not been recorded. If this is done, a new mortgage to a ionafide mortgagee duly record- ed, or a recorded assignment of a new mortgage to a bona fide pur- chaser, will have a preference." It is not necessary that an assignment of a mortgage should be re- corded in order to enable the assignee to maintain an action for fore- closure.' § 501. Production of bond on assignment, — While the record- ing of an assignment of a mortgage is notice to a subsequent pur- chaser of the bond and mortgage, it does not follow that it is the only notice of that fact. A bond and mortgage may be assigned by parol, accompanied by a delivery of the securities ; and possession of the evi- dences of debt, is a strong and common evidence of title. The pur- chaser of a bond and mortgage, therefore, who fails to require the production of the bond, is chargeable with notice of any defect in the assignor's title thereto.* This is not the rule, however, when payment is made.° "Where a mortgage was given to secure a note and the debtor gave a new note, thus securing possession of the original obligation, which he surrendered to a honafide purchaser of the property, it was held that the mortgage could still be enforced." § 502. Assignment of mortgage must be recorded among mortgages. — An assignment of a mortgage is not " duly recorded," if recorded among conveyances ; and it wiU not operate as ^constructive notice if so recorded.' ' Smyth V. Knickerbocker Life Ins. ' Pratt v. Bank of Bennington, lo Vt. Co., 84 N. Y. 58g, affi'g s. c. 21 Hun, 293. 240. * Kellogg V. Smith, 26 N. Y. 18. 2 Clark V. Mackin, 95 1)1. Y. 346, affi'g ' Van Keuren v. Corkins, 66 N. .Y. 77. 30 Hun, 411 ; Van Keuren v. Corkins, * Holies v. Chauncey, 8 Conn. 389. 66 N. Y. 77 ; Bacon v. Van Schoonho- ' Gillig v. Maass, 28 N. Y. 191 ; Purdy van, 87 N. Y. 446. v. Huntington, 42 N. Y. 334. 342 MOETGAGES OF EEAL PEOPEKTT. [§§ 603-505. § 503. Noting assignment on margin of record. — It is the prac- tice of the clerks to note the place of recording an assignment upon the margin of the record of the mortgage. This is a matter of con- venience merely and is not required by any statute. An assignment is sufficient if it describes the mortgage with definiteness, and no rule of law requires the place of record of the mortgage to be referred to in the assignment. Without such a reference the clerk cannot con- veniently make the customary marginal reference, but the rights of the assignee are not in any manner affected by such omission.' JUDGMENT UENS SUSPENDED UPON APPEAL. § 504. It is provided by Section 1256 of the Code of Civil Pro- cedure, that where an appeal from a judgment has been perfected, and an undertaking has been given sufficient to entitle the appellant to a stay of the execution of the judgment, without an order for that purpose, the court in which the judgment was recovered may in its discretion, and upon such terms as justice requires, make an order, upon notice to the attorney for the respondent, and to the sureties in the undertaking, exempting from the Ken of the judgment, as against judgment creditors, and purchasers and mortgagees in good faith, the real property or chattels real upon which the judgment is a lien or a portion thereof specifically described in the order. A similar provision was contained in section 282 of the former Code of Procedure. § 505. Purchasers and mortgagees " in good faith." — The question has been made as to who are purchasers and mortgagees " in good faith." It has been determined that it is not necessary that a mortgagee, in order to be within the protection of the statute, should show that he has parted with value on the faith of the mortgage.'' A purchaser or mortgagee " in good faith " is one who has taken his conveyance or mortgage without any design to defraud the plaintiffs in the judgment, or anybody else, and upon some honafide consid- eration either present or past. Such a person may avail himself of the protection of the statute, provided that a court having jurisdiction has made the necessary order.° ' Viele V. Judson, 82 N. Y. 32, rev'g ' Union Dime Savings Ins. v. Duryea, s. c. 15 Hun, 328, and overruling Moore 67 N. Y. 84. V. Sloan, 50 Barb. 442. ° Bronner v. Looniis, 17 Hun, 439. § 505.] THE eecoedhstg acts. 343 Where an order has regularly been made suspending a judgment lien upon appeal, it is not competent for the court, by vacating the order of suspension mmc ^o tvno, to restore the lien as against a person not a party to the action who has acquired rights upon the faith of it. And this is true, even if the rule is found to favor a per- son who has purchased a lien at a very low price.' ■ Harmon v. Price, 87 N. Y. 10. CHAPTER XIII. MOETGAGES TO THE COMMISSIONEES OF THE UNITED STATES DEPOSIT FUND. ORIGIN OF THE FDND. § 506. By act of Congress. 507. By Laws of 1837, chapter 150. 508. Loans were made by this State to its citizens. EFPF-CT OF THESE MORTGAGES AS RECORD NOTICE. 509.' The mortgages taken by the com- missioners. 510. Recording. 511. It is the duty of the commis- sioners. 512. Change in method of recording desirable. PROVISIONS OF LAW SPECIALLY APPLICA- BLE TO MORTGAGES TO THE LOAN COMMISSIONERS. 513. Enforcing payment. 514. Foreclosure. 515. Sale in foreclosure. 516. Second sale. § 517. Redemption. 518. The surplus proceeds of the property. RIGHTS OF MORTGAGORS UNDER MORT- GAGES TO THE LOAN COMMISSIONERS. 519. The statute makes substantial differences. 520. Right of redemption. 521. Setting aside sale. SALE OF THE MORTGAGED PREMISES UNDER THE STATUTE. 522. The authority of the commission- ers to make the sale. 523. The advertisement of the sale. 524. The advertisement of sale must also be served. 525. Sale. 526. The sale is made by the commis- sioners. 527. If no sale is made in February. 528. The deed of conveyance. OEIGDf OF THE FUND. § 506. By act of Congress entitled " An act to regulate the de- posits of the public money," passed June 23, 1836, the surplus money of the treasury of the United States was divided among the several States. By Laws of ISSY, chapter 2, this State agreed to receive in deposit for safe keeping its' share of such surplus money, upon the terms, conditions, and provisions in said act of Congress contained ; and the faith of the State was inviolably pledged for the safe keeping and repayment of all sums of money thus received, from time to time, whenever the same shall be required by the Secretary of the Treasury of the United States, under the provisions of said act. §§507-509.J MORTGAGES TO LOAIST OOMMISSIOlSrERS. 345 § 507. By Laws of 1837, chapter 150, it was enacted that tlie moneys wMcli had been or might thereafter be deposited with this State, under the act of Congress already mentioned, should be appor- tioned among the several counties of this State, according to the pop- ulation thereof, as ascertained by the last State census, for the purpose of being loaned therein in the manner directed by the act. Provision was made for the appointment of two reputable inhabitants, resident in each of the counties of this State, who should be commissioners for loaning such moneys, and who should be known and distinguished by the name and style of "the commissioners for loaning certain moneys of the United States of the county " of which they are re- spectively commissioners. The commissioners were to give bonds to the State, and then to loan such moneys on " improved lands in the same county," upon mortgages at seven per cent.' per annum ; the sufficiency of the securities and the validity of the titles to be de- termined by them. § 508. Loans were made by this State to its citizens under statutes passed in 1786, 1792, and 1808, and loan commissioners had been appointed in the various counties of the State to attend to the investments." By Laws of 1850, c. 337, these loans were con- solidated, and the loan commissioners in the several counties in this State were authorized to transfer and dehver to " the commis- sioners for loaning certain moneys of the United States " in the same county, all the mortgages remaining in their hands. All mortgages not so transferred, because of the failure of the mortgagor to con- sent thereto, were to be foreclosed, and the amounts seciu-ed by the mortgages which were so transferred were to be paid from the capital of the United States deposit fund to the common school fund. The mortgages which were transferred under this act are subject to the same rules as those which were originally made to the commis- sioners of the United States deposit fund. EFFECT OF THESE MORTGAGES AS EECOED NOTICE. § 509. The mortgages taken by the commissioners must be executed in the presence of two or more witnesses, who shall subscribe the same as such witnesses; and the substance thereof shall be minuted in a book by the said commissioners, to be by them kept for ' Interest after October i, 1879, reduced to six per cent. Chap. 517, Laws of 1880. ' See note to 3 Edm. Stat. p. 119. 346 MOETGAGES OI' EEAL PEOPEETY. [§§ 510-512. that purpose in tlieir respective counties, and whieli mortgages and minutes are declared to be matter of record ; and an attested copy of one of the said mortgages, if in being, or of the said minute in case the said mortgage is lost, under the hands and seals of the commis- sioners, is good evidence of the said mortgage in any court within this State.' § 510. Recording. — The execution of the respective mortgages and their entry or being placed in the books of mortgages of the said commissioners shall have the like lien, priority, operation, and effect as if such mortgages had been duly recorded in the book of mort- gages in the office of the clerk of the county in which the mortgaged premises are situated." § 511. It is the duty of the commissioners to deposit their books of mortgages in the clerks' offices of the respective counties for which they were appointed, there to remain at all times, except when the said commissioners shall be in actual session for the dispatch of their official duties.' In the city of New York, the mortgages and records of the commissioners must be kept in the office of the register of the city and county of New York.* The said commissioners are required to permit any person, at reasonable times, to search and ex- amine their book of mortgages, and any other book required by the act to be kept in their hands and custody, upon paying twelve and a half cents for the search." The mortgages to the commissioners should be recorded in the regular order of their receipt, and the entry of such a mortgage out of the order due to its date and upon a page which should have con- tained a mortgage several years antecedent in execution, has been held not to be notice to a subsequent mortgagee in good faith." § 512. Change in method of recording desirable. — The pro- vision which allows the commissioners to render the mortgages made to them matters of pubHc record by merely entering them in their own books and keeping them on file in their own offices, is the one which brings this class of incumbrances upon property most directly to the attention of dealers in real estate. It doubtless facilitates the ' Laws of 1837, c. 150, § 27. « New York Life Ins. Co. v. White, 17 Hd., §43. Hd., § 55. N. Y. 469, affi'g s. c. sub nom. New * Laws of 1851, c. 286. York Life Ins. & Trust Co. v. Staats, 21 ' Laws of 1837, c. 150, I 43. Barb. 570. §§ 513-514.J MOKTGAG-ES TO LOAN COMMISSIONEES. 347 commissioners in the performance of their duties, and the fees re- ceived for searching may furnish them a compensation which is not excessive when their responsibilities are considered, but it is never- theless true that the multiplying of offices in which searches should be made for possible Hens, tends to mislead and to entrap honest purchasers, and that the recording of all such mortgages in the re- spective clerks' offices and in the books in which other mortgages are recorded would be convenient. PEOVISIONS OF LAW SPECIALLY APPLICABLE TO MOETGAGES TO THE LOAN C0MMI8SI0NEES. § 513. Enforcing payment. — The commissioners are required respectively to attend their office every year, to receive moneys, upon the first Tuesday of October, and thereafter on the Tuesday and "Wednesday of each week for the space of three weeks,' and the in- terest on all mortgages must be made payable on the first Tuesday of October in each year.^ If any borrower shall neglect to pay yearly, and every year, on the first Tuesday of October, or within twenty-three days thereafter, on one of the days on which the commissioners are directed to attend their respective offices, the yearly interest due on his mortgage, and also the principal money loaned to him when due, then, and in either of these cases, it is enacted that the commissioners of the county where the lands mortgaged by the borrower are situated shall be seized of an absolute and indefeasible estate in fee in the said lands, to them, their successors and assigns, to the uses in the act mentioned, and the mortgagor, his or her heirs or assigns, shall be utterly fore- closed and barred of all equity of redemption of the mortgaged prem- ises, any law, usage, custom, or practice in courts of equity to the contrary notwithstanding. But the mortgagor, his or her heirs or assigns, shall be entitled to retain possession of the mortgaged prem- ises until the first Tuesday of February thereafter, and to redeem the same as provided in the statute.^ § 514. Foreclosure. — The statute provides that the said commis- sioners shall, within eight days after the last Wednesday of their attendance as aforesaid, yearly and every year, cause an advertisement to be fixed up at not less than three of the public places of the 1 Laws of 1837, c. 150, § 24. nd., §§ 12, 56. 3 Id., §30. 348 MORTGAaES OF EEAL PEOPERTY. [§ 514. county where the premises are situated, containing the description of the lands mentioned in the several mortgages foreclosed by the terms of the act, and giving notice in such advertisement that on the first Tuesday of February, then next, such lands will be sold at the court- house of the respective counties where the said lands are situated, at public vendue, to the highest bidder ; and the said commissioners shall also cause a copy of such advertisement to be published in at least one of the public newspapers printed in the county, if any such there be, and if there be no newspaper published in such county, then in the nearest paper to said county, successively once in each week, until the day of sale. They shall also serve such advertisement at least fourteen days prior to the time therein specified for the sale, upon the mortgagor, or his personal representatives, or upon his executors or administrators, if any shall have been, at the day of the date of such advertisement, duly appointed by the proceedings of any court, and upon such persons as shall by the records of the office of the county clerk of the county in which said premises, or any part thereof, are situated, appear to be grantees, lessees, or mortgagees of the said premises, or of any part thereof, and whose conveyance, mortgage, or other evidence of right or title, shall be upon said rec- ords at the date of the first publication of the said advertisement, and upon all persons having a lien or incumbrance upon the said prem- ises or upon any part thereof, by judgment or otherwise, subsequent to such mortgage, and which hen or incumbrance shall, on the day of the date of said advertisement, appear upon the records of the office of the county clerk of the county in which said premises, or any part thereof, are situated. Such service shall be made by delivering a copy of such advertisement personally to the person to be served, or by leaving a copy of such advertisement at the dwelling-house of the person to be served, in charge of some person then residing therein, who shall have attained the age of twenty-one years, or by inclosing and sealing the copy of such advertisement in an envelope and plainly addressing the said envelope, on the outside thereof, to the person to be served, by his name, as the same appears on said records, at the post-office nearest to his last known place of residence, and by depositing the same so inclosed and sealed in the said envelope, in the post-office nearest the residence of the commissioner or commis- sioners making such service, and by prepaying the postage thereon ; and when the service is made personally or by leaving at the dwell- §§ 515-516.J MORTGAGES TO LOAW COMMISBIONEES. 349 mg-honse as aforesaid, the same shall be made at least fourteen days before the day of sale in such advertisement mentioned ; and when the service is by depositing in the post-ofi3ce as aforesaid, the same shall be made at least twenty-eight days before the day of sale mentioned in the said advertisement.' § 515. Sale in foreclosure. — The said commissioners of the re- spective counties aforesaid shall, on the first Tuesday of February, yearly, expose the lands described in the mortgages foreclosed as aforesaid to sale at public vendue, and upon such sale they shall con- vey the said lands to the highest bidder or bidders ; and they shall also deliver to such bidder or bidders affidavits of the publication, fixing up, and service of the said advertisement ; and the purchaser or purchasers thereof shall, if the said advertisement shall have been published and fixed, and served as required by the act, hold and enjoy such estate in the said lands as was conveyed to the said commission- ers by the said mortgages, clearly and absolutely discharged of and from all benefit and equity of redemption, and all other liens or in- cumbrances made or suffered after the execution of such mortgage by the mortgagor, his heirs or assigns, and such purchaser or pur- chasers shall pay the commissioners for drawing and executing such conveyance the sum of one dollar, and said affidavit of the publica- tion of said advertisement shall be made by the publisher of the newspaper in which the same was inserted, or by his principal clerk, or by his foreman ; and said affidavit of such service of such adver- tisement, and of the fixing up of the same, shall be made by any per- son who made the service or who fixed up the said advertisement." § 516. Second sale. — When any lands mortgaged to the said com- missioners shall be exposed for sale as aforesaid, and no person shall bid a sum equal to the amount due on the mortgage, for principal and interest, and the expenses of the advertisements and the sale, or if any person to whom any such lands shall at any such sale be struck off, shall not pay for the same, then and in every such case the said commissioners shall enter into and take possession of the said lands and premises, and let the same upon the best terms they can obtain for the benefit of the State, until the third Tuesday in September, then next, and shall, on the same third Tuesday in September, sell ' Laws of 1837, c. 150, § 31, as am'd ^ Laws of 1837, c. 150, § 32, as am'd by Laws of 1863, c. 73. by Laws of 1863, c. 73. 350 MOETGAGES OP REAL PEOPEETY. [§§ 517-519. the said lands and premises at public vendue to the highest bidder, giving at least six weeks' previous notice of such sale in the manner directed by the act for the sale attempted to be made in February ; and if, upon such sale, no person shall bid a sum equal to the amount due on the mortgage for principal and interest, including all costs and expenses, or if any person to whom any such lands and premises shall at any such sale be struck off, shall not pay for the same, then, and in every such case, the said commissioners shall bid therefor, in behalf of the people of the State, a sum not exceeding the amount at which the said lands shall be appraised by appraisers appointed as in the act set forth, in case such bidding shall be necessary to prevent the sale of such premises for a less sum.' § 517. Redemption. — But if the mortgagor or his or her heirs or assigns shall, at or before the sale of the mortgaged premises, pay to the said commissioners all such sums of money as shall be due and payable on such mortgage on the first Tuesday of October, then next, for principal and interest, and costs and charges of foreclosure, as prescribed by the act, together with the charges of advertising the same, and the fees paid for searches and for taking affidavits, and the compensation of the said commissioners for serving such advertise- ments, then the title in fee to the said mortgaged premises shall revert to and reinvest in the said mortgagor, his or her heirs or assigns, and the said commissioners shall accept the said sums of money and the costs and charges aforesaid, and permit the said owner, or his or her heirs or assigns, to take possession of the said mortgaged premises, and to hold the same until default shall be made in payment of any further sum on the said mortgage." § 518. The surplus proceeds of the property must be paid to the mortgagor or his heirs or assigns,'' and if the sale shall fail to real- ize the amount due, with expenses, the commissioners are authorized and required to commence an action «r actions of debt or covenant so as to collect the deficiency.* EIGHTS OF HOETGAGOES TTITDEE MOETGAGES TO THE LOAN COMMISSIONBES. § 519. The statute makes substantial differences between this class of securities and mortgages generally. It declares in very ex- ' Laws of 1837, c. 150, § 33. 3 1 3g_ * Id., as am'd by Laws of 1863, c. 73. ■• § 40. § 519.] MORTGAGES TO LOAK COMMISSIONEES. 351 pHcit language, that a default in the payment of interest for twenty- three days after it falls due, shall be ij)so facto a foreclosure and ex- tinguishment of the equity of redemption, and that thereupon an unredeemable estate shall vest in the commissioners ; and then it pro- ceeds to give to the mortgagor a right to have his land upon making certain payments. This is not reinstating the equity of redemption in its original vigor and with its common-law incidents, but a special and limited privilege, which can only be availed of by a substantial compliance with the condition upon which it is given. The foreclos- ure which the statute pronounces is equivalent to the decree of a court to the same effect ;' and the right to redeem which is subse- quently mentioned, is in its nature like the relief which the courts would extend to a mortgagor upon a motion made after the decree and before the sale, upon the terms of paying the debt, interest and costs. If the mortgagor would have any advantage from such an order, he must comply with the terms ; and if he would take advan- tage of the provisions of the statute in his favor, he must perform the conditions upon which it depends. An equity of redemption is a well-defined interest in lands, having many of the attributes of gen- eral ownership. In ordinary mortgages, that interest is not extin- guished by a default in the payment of the mortgage debt. It can only be cut off by a foreclosure in a court of equity. But in mort- gages subject to the provisions of this statute, the equity of redemp- tion is, by an express provision, annihilated if the interest is not paid when due, or vnthin twenty-three days afterward. On the occurrence of such a default, all title and interest of the mortgagor in the land is gone. The whole title to it vests in the commissioners. But as the State wants no more than its debt and interest, the mortgagor is relieved from the forfeiture he has incurred, if he will, before the actual sale, come forward and pay it with the expenses ; and so, if the land sells for more than the debt and expenses, the commissioners are to pay the balance to the mortgagor. The interest of the mort- gagor after forfeiture is not an interest in the land, but a specific right to redeem, unaccompanied with the incidents of an equitable estate." ' Jackson v. Voorhis, 9 Johns. 129 ; " Denio, J., in Pell v. Ulmar, 18 N. Sherill v. Crosby, 14 Id. 358 ; Denning Y. (4 Smith) 139, 144 ; White v. Lester, V. Smith, 3 Johns. Ch. 332. i Keyes, 316 ; s. c. 34 How. 136 ; 4 Abb. App. Dec. 585. MORTGAGES OF REAL PROPERTY. [§§530-522. § 520. Right of redemption. — ^But the mortgagor has rights after the title is vested in the commissioiiers. He has a right to re- deem the land until the commissioners have, in strict conformity with the statute, made an actual sale,' and after a sale is made, he has a right to compel the commissioners to account for the surplus, for as to this they are trustees for him.^ These rights are assignable, and they may be sold upon execution against the mortgagor.' The remedy of the mortgagor as against an irregular sale, after he has been put out of possession, is to redeem ; he is not entitled to possession as against the commissioners or their grantees, except upon paying the amount due upon the mortgage. The failure of the com- missioners to make a legal sale of the premises leaves to the mortgagor the right to redeem, but not the right to have the premises without redemption.* . § 521. Setting aside sale. — If a sale, though regular upon its face, is fraudulently made, it is within the power of a court having equity jurisdiction to set it aside ;" but a sale made in strict conform- ity with the directions of the statute cannot be set aside merely because of inadequacy of price.° If a purchaser under a sale is obliged to seek aflSrmative rehef through the courts, founded upon rights acquired at such sale, he will be obliged to prove that the proceedings of the commissioners were regular ; but when he is a defendant, the onus of showing alleged defects will rest upon the party who asserts a right based on the irregularities, and the due performance of all of the official acts of the commissioners will then be presumed.' SALE OF THE MOETGAOED PEEMISES UNDEE THE STATUTE. § 522. The authority of the commissioners to make the sale is derived entirely from the statute, which must be closely foEowed, or the sale will be void. A special authority must be strictly- pur- sued, and a purchaser is presumed to know such authority when it is ' Sherwood v. Reade, 7 Hill, 431, N. Y. (i Seld.) 144, which reversed s. c. rev'g 8 Paige, 633 ; Sherman v. Dodge, 2 Sandf. 325 ; Brown v. Wilbur, 8 Wend. 6 Johns. Ch. 107. 657 ; White v. Lester, i Keyes, 316 ; s. ^ Denning v. Smith, 3 Johns. Ch. 332. c. 34 How. 136. ' Jackson v. Rhoades, 8 Cow. 47. ' Denning v. Smith, 3 Johns. Ch. 332. " Pell V, Ulmar, 18 N. Y. (4 Smith) « March v. Ludlum, 3 Sandf. Ch. 35. 139, overruling Olmstead v. Elder, 5 ' Wood v. Terry, 4 Lans. 80. §§ 523-525.] MORTGAGES TO LOAN COMMISSIONEES. 353 given by a public statute ; and if he purchases where the authority is not pursued, it is at his peril.' § 523. The advertisement of the sale must contain a correct de- scription of the lands," and must be fixed up at not less than three of the public places of the county where the premises are situated, in a way likely to attract notice ; and when so fixed, it must be allowed to remain until the day of sale.' The advertisement must also be pub- lished in a newspaper printed in the county. The notice should be fixed up, and publication should be commenced within eight days after the last Wednesday of the attendance of the commissioners at their office to collect interest, which will be three weeks and one day after the first Tuesday in October, and the publication should be con- tinued successively once a week until the day of sale. The day ap- pointed for the sale must be the first Tuesday of February, and it must take place in the court-house of the county where the lands are situated." The advertisement of the sale must necessarily contain sufficient to indicate who executed the mortgage and to whom it was given. And where the notice omitted the name of one of the mortgagors and stated that the mortgage was given to " the Commissioners of the United States Deposit Fund," instead of " the Commissioners for loan- ing certain moneys of the United States," as stated in the mortgage and as designated by the statute, it was held that the notice was de- fective and the sale illegal, and that the mortgagors were entitled to redeem." § 534. The advertisement of sale must also be served on the mortgagor or his personal representatives, and on all persons appear- ing by the public records to have any interest in or lien upon the mortgaged premises subsequent to the mortgage, either personally or by leaving it at the dwelling-house of the person to be served, in charge of some person then residing therein, who shall have attained the age of twenty-one years, or by depositing it in the post-office, properly directed and with the postage prepaid." § 525. Sale. — Oh the first Tuesday of February, the commissioners must offer the land for sale, and if a purchaser appears who bids more ' Denning v. Smith, 3 Johns. Ch. 332, * Laws of 1837, c. 150, § 31. 344. * Thompson v. The Commissioners, 79 'Sherman v. Dodge, 6 Johns. Ch. 107. N. Y. 54, rev'g s. c. 16 Hun, 86. * Denning v. Smith, 3 Johns. Ch. 332. ' Laws of 1837, c. 150, § 31. 23 354 MOETGAGES OF EEA.L PEOPERTY. [§§ 526-527. than the amount due on the mortgage, with interest and costs, the sale can then be consummated. But the commissioners may not sell for a less sum. If no bidder can be found, or if the property be once struck down to a purchaser who fails to pay the purchase money, it is not permissible to adjourn the sale or to offer the property for the second time. In either case, the sale cannot take place until the third Tuesday in September then next. So, a sale was held to be irregular where a person in the interest of the mortgagor had the property struck off to him and refused to pay the purchase money, and the commissioners, ia conformity with the terms of sale announced before the bidding commenced, again offered the property and sold it to a purchaser who paid the amount of his bid.' The sale must be for cash, the statute making no provision for a sale upon credit.'' § 526. The sale is made by the commissioners in their cor- porate capacity ; the statute provides for the appointment of two com- missioners in each county, and it has been held that a sale will be void unless both are actually present at the sale, even if the deed is after- ward executed by both, and even if, at the time when the sale is made, there is only one commissioner.' It was enacted, however, by Laws of 1867, c. 704, that ail sales of land theretofore or thereafter to be made, and which have been and shall be conducted in good faith by one of said commissioners, after notice of such sales had been given in all respects in conformity to the act of 1837, and the acts amending the same, shall be deemed and held to be of the same effect and validity as if both of such commissioners had been present and participated in such sale or sales ; provided, however, in all such eases, that the purchaser or purchasers shall have paid the purchase money of said premises, and a deed therefor, executed by both of said com- missioners, shall have been delivered to the purchaser or purchasers. § 527. If no sale is made in February, for the reasons mention- ed, it is the duty of the commissioners to enter into and take posses- sion of the premises, and let the same for the benefit of the State until the third Tuesday in September then next, when a sale may be made, but of which a six weeks' previous notice must have been given in the manner prescribed for the sale in February. If no bid is made 'Sherwood v. Reade, ^ Hil], 431, ^ poT^gU v. Tuttle, 3 N. Y. (3 Comst.) rev'g s. c. 8 Paige, 633. 396 ; Pell v. Ulmar, 18 N. Y. (4 Smith) ^ Ibid. See Wood v. Terry, 4 Lans. 139 ; s. c. 21 Barb. 500 ; Olmsted v. 80., Elder, 5 N. Y. (i Seld.) 144. § 528.] MORTGAGES TO LOAN OOMMISSIONEES, 355 which is equal to the amount due on the mortgage, the commissioners may purchase for the State at a price not exceeding the amount at which the land shall be appraised by appraisers, and power is given to adjourn the sale for the purpose of allowing such appraisal to be made.' Where the sale has to be made in September, it is held that it will not render the proceedings void that irregularities were committed previous to the attempt to sell in February." § 538. The deed of conveyance from the commissioners should be executed in the presence of two witnesses," but it seems that a deed executed with only one witness, but acknowledged, is well executed.* ' Laws of 1837, c. 150, §§ 33 to 37. * Commissioners of tiie United States "Wood V. Terry, 4 Lans. 80. Deposit Fund v. Chase, 6 Barb. 37. 2 Laws of 1837, c. 150, § 57. CHAPTEE XIV. IBTSUEANCE AGAINST MEE. INSURABLE INTERESTS OF PARTIES TO MORTGAGES. § 529. The mortgagor and the mort- gagee have each an insurable interest. 530. A mortgagee has an insurable in- terest. 531. When insurable interest of mort- gagor ceases. 532. Insurable interest of purchaser at foreclosure sale. FORM OF CONTRACT OF INSURANCE. 533. Contract in name of mortgagor. 534. Upon this principle. 535. Another result of the rule. 536. Over-insurance by mortgagor. 537. Insurance "as interest may ap- pear." Property unoccupied. Condition against use of property. Condition against alienation. Other insurance forbidden. Satisfaction of mortgage. Waiver of conditions. 538. 539- 540. 541- 542. 543- "MORTGAGEE CLAUSE" IN POLICY. 544. " Mortgagee clause. '' 545. Other insurance. AGREEMENT TO INSURE CONTAINED IN THE MORTGAGE. 546. Lien of mortgagee on mortgagor's insurance. 547. Recording of covenant to insure is not notice. 548. Parol contract to insure. § 549. Insurance by mortgagee without agreement virith mortgagor. ENFORCING PAYMENT BY INSURERS. 550. Proof of loss. 551. Action by mortgagor to recover insurance. 552. Action by mortgagee to recover insurance. 553. Action by both mortgagor and mortgagee to recover insurance. RIGHTS OF THE PARTIES WHERE THE PRE- MIUM IS PAID BY THE MORTGAGOR. 554. Agreement to insure. 555. Insurance procured by a mort- gagee. 556. Agreement with insurer for sub- rogation. 557. Application of insurance money. RIGHTS OF THE PARTIES WHERE THE PRE- MIUM IS PAID BY THE MORTGAGEE. 558. Mortgagor has no claim to insur- ance. 55g. If it is *he debt only which is in- sured. 560. Debt is not insured. 561. Damages repaired by mortgagor. WHEN THE INSURER IS ENTITLED TO BE SUBROGATED TO THE RIGHTS OF THE MORTGAGEE, 562. Insurer entitled to be subrogated to do equity. 563. The right of subrogation is, how- ever, an equitable one. 564. Agreement for subrogation. M INSXTEABLE INTERESTS OF PARTIES TO MORTGAGES. § 529. The mortgagor and the mortgagee have each an in- surable interest in the mortgaged premises. Even in the ease of a chattel mortgage, after default has occurred, the mortgagor has an interest in the property which may be insured, although this interest § 530. J INSTJEAJSrCE AGAINST FIRE. 357 is one which is not recognized in courts of law, and consists only of a right to redeem on application to a court of equity.' The insurable interest of the mortgagor continues after he has parted with his prop- erty, for he still retains an interest in its preservation, in order that his debt may be paid out of it, the land, as between him and the grantee, being primarily charged with its payment." On the same principle a guarantor of a mortgage debt, personally liable for its payment, has an insurable interest in the property, and where the only insurable interest arises from personal obligation to pay the debt, the interest ceases when the obligation is discharged." If the owner of a piece of property conveys it by a deed absolute upon its face, but intended as security, he is in reality a mortgagor, and retains an insurable interest. The fact that the deed was intend- ed as a mortgage may be shown by parol in an action against the in- surer upon the policy." On a like principle an insurance by the grantee under such a deed must be as mortgagee, or it may be void. § 530. A mortgagee has an insurable interest in the property to the extent of his lien,° as also has the assignee of a mortgage.' A person who has agreed to purchase a bond and mortgage, and who has covenanted to pay the purchase price, also has an insurable inter- est to the extent of the full amount secured by the mortgage. When such an agreement is made, the purchaser of the mortgage becomes the equitable owner of it, even though the legal title is retained by the mortgagee as security for the purchase money.' The extent of the insurable interest of the mortgagee is the amount of his lien not exceeding the value of the property insured." ' Allen V. Franklin Ins. Co., g How. ' Kernochan v. N. Y. Bowery Fire Ins-. 501. Co., 5 Duer, i ; s. c. 17 N. Y. (3 Smith) 'Waring v. Loder, 53 N. Y. 581; 428; Sussex Co. Mut. Ins. Co. v. Wood- Herkimer V. Rice, 27 Id. 163 ; Buck v. ruff, 26 N. J. Law. 541 ; Buck v. Pitoentx Ins. Co., 76 Me. 586'; Strong v. Ins. Ins. Co., 76 Me. 586. Co., 10 Pick. 44. 'Tillou V. Kingston Mutual Ins.. Cb.,^ ^ The Springfield F. & M. Ins. Co. v. 7 Barb. 570. The trustee in a. deed of Allen, 43 N. Y. 389 ; Gordon v. Massa- trust in the nature of a mortgage, has^an chusetts F. & M. Ins. Co., 2 Pick. 249. insurable interest in the mortgaged prop- * Hodges V. The Tennessee Marine & erty distinct from that of the mortgagor. Fire Ins. Co., 8 N. Y. (4 Seld.) 416. Dick v. Ins. Co., 81 Mo. 103, and cases "■ Jenkins v. Quincy Mutual Fire Ins. cited. Co., 73 Mass. (7 Gray) 370. But amort- "Excelsior F. Ins. Co.. v. Royal Ins. gagee may insure as general owner un- Co. of Liverpool, 7 Lans. 138 ; s.,c. aSSd less his interest is inquired about. Buck 55 N. Y. 343. V. Phoenix Ins. Co., 76 Me. 586. "Excelsior Fire Ins.. Co. v. Royal Ins. B58 MORTGAGES OF HEAL PEOPEETT. [§§ 531-533. A bond and mortgage executed by a husband to bis wife for a just and valuable consideration may be enforced in equity, and the wife acquires an equitable interest in the property covered thereby, which she may insure.' § 531. When insurable interest of mortgagor ceases. — It was held in McLaren v. The Ra/rtford Fire Ins. Co. (5 JST. T. [1 Seld.] 151), that a mortgagor had no insurable interest remaining in build- ings covered by the mortgage, after a sale of the mortgaged prem- ises under a decree of foreclosure, and payment of part of the pur- chase money ; although the decree may not have been enrolled, and no deed be executed at the time of sale. The theory of the court was that a deed subsequently executed by the master, operated by way of relation as a transfer of the property at the time of the sale. The sale took place in September, a loss occurred in October, and the master's deed was not delivered until November, and it was held that the mortgagor had no insurable interest at the time of the loss. In Cheney v. Woodruff (45 N. Y. 98), the principle of McLaren v. The Hartford Fire Ins. Co. {swprd) was doubted, though the decision was pronounced correct upon other grounds; and it was held that, at least to the extent of being entitled to collect rents, the mortgagor retains an interest in the property until the purchaser receives his deed, and acquires a right of possession.' A mortgagor whose right in the equity of redemption has been taken on execution, has an insurable interest, nor is it divested by the ;sale so long as the right to redeem remains." The value of the mort- gagor's redeemable interest in the property insured is not material. If he had an insurable interest at the time the policy was efEeeted, and also at the time of the loss, he can recover the whole damage, not exceeding the sum insured." § 632. Insurable interest of purchaser at foreclosure' sale. — Whatever doubt there may be as to the time when the insurable Co., 55 N. Y. 343 ; Tillou v. Kingston * Strong v. Manufacturers' Ins. Co., 27 Mutual Ins. Co., 7 Barb. 570 ; Kerno- Mass. (10 Pick.) 40. ■chan V. N. Y. Bowery Fire Ins. Co., 17 ■» Buclc v. Phoenix Ins. Co., 76 Me. N. Y. 428. 587 ; Strong v. Manufacturers' Ins. Co., ' Mix V. Andes Ins. Co., g Hun, 397. 27 Mass. (10 Pick.) 40 ; Stephens v. 111. ' Examine as to this, also, Aspinwall Mutual Fire Ins. Co., 43 111. 327 ; Car- -V. Balch, 4 Abb. N. C. 193 ; Mutual Life penter v. Providence Wash. Ins. Co., 16 Ins. Co. V. Balchj 4 Abb. N. C. 200. Peters (U. S.) 495 ; Insurance Co. v. Stinson, 103 (U. S.) 25. §533.] INSUKAlSrOE AGAINST FIEE. 359 interest of tte mortgagor ceases, there can be no doubt that the purchaser at a foreclosure sale acquires an insurable interest in the property at the time of signing the contract of purchase, and paying an instalment of the purchase price.' It is his right to insure this interest ; and it has been held that if he fails to do so, and the build- ings upon the property are injured or destroyed by fire, he will not on that account be entitled to be relieved from his purchase." The weight of authority is, however, to the effect that the premises are at the risk of the purchaser only when the contract is absolute and the vendee is authorized to take immediate possession of the land." The first rule upon judicial sales, is that which places the property at the risk of the purchaser only when the deed has been or should be delivered ; in other words, when by the terms of sale he became- entitled to possession, with the corresponding right to the rents and profits.* FORM OF CONTRACT OF INSURANCE. § 533. Contract in name of mortgagor. — Where a mortgagor procures insurance on the mortgaged premises in his own name, but causes it to be inserted in the policy as a part of the agreement, that the loss, if any, is payable to the mortgagee, the contract is none the less one made between the insurers and the mortgagor. It is a con- tract to indemnify the mortgagor against any loss or damage that may be received by him. The undertaking to pay the mortgagee is col- lateral to, and dependent upon, the principal undertaking to insure the mortgagor. The effect of it is, that the insurers agree that whenever any money shall become due to the mortgagor upon the contract of insurance, they will, instead of paying it to the mortgagor himself, pay it to the mortgagee. The mortgagor must sustain a loss for' which the insurers are liable before the party appointed to receive the loss will have a right to claim it. It is the damage sustained by the pai'ty insured, and not by the party appointed to receive payment, that is recoverable from the insurers.' ' McLiren v. The Hartford Fire Ins. ' McKechnie v. Sterling, 48 Barb. 330. Co., 5 N. Y. (i Seld.) 151. * Mutual Life Ins. Co. v. Balch,4Abb. 'Per Larremore, J., at Special T., N. C. 200; Aspinwall v. Balch, 4 Abb. N. Y. Common Pleas, May, 1876, in The N. C. 193. Mutual Life Ins. Co. v. Tallman ; Vance ° Grosvenor v. The Atlantic Fire Ins. V. Foster, g Bush (Ky.) 389. See, also, Co. of Brooklyn, 17 N. Y. (3 Smith) 391; Ryan v. Preston, 44 L. T. Rep. N. S. Merwin v. Star Fire Ins. Co., 7 Hun, 787 ; s. c. 24 Alb. L. J. 231. 659 ; Macomber v. The Cambridge Mut. 360 MORTGAGES OF REAL PEOPEETY. [§§ 534-536. § 534. Upon this principle it was held in Grosvenor v. The At- lantic Fire Ins. Co. of BrookVyn (IT N. Y. [3 Smith] 391), that if the mortgagor who procures such insurance to be made shall, prior to the fire, part with his interest, no loss will be sustained by him, and consequently the mortgagee will not be allowed to recover. This ease overruled several earlier ones,' and it seems to conflict with the doctrine advanced in later decisions to the effect that, so long as the mortgage debt continues, the insurable interest of the mortgagor also continues, even though he has parted with the title, for the property stands as the primary fund from which the debt should be paid." § 535. Another result of the rule that insurance procured by the mortgagor with the stipulation on the policy of " loss, if any, payable to the mortgagee," is a contract made with the mortgagor and not with the mortgagee, is found in the fact that any act or neglect of the mortgagor, either in procuring the policy or after the rights of the mortgagee have vested," will avoid the policy. Thus in BidweU V. Northwestern Ins. Co. (19 If. T. 1T9), a policy in this form ob- tained by the owner of a vessel, was held to be void because of a war- ranty contained in it to the effect that the property was free from all liens, when, as a matter of fact, the vessel was subject to two prior mortgages. If the insurance had been of the interest of the mort- gagee alone, this warranty would have been harmless. § 536. Over-insurance by mortgagor. — In The Buffalo Steam Engvne Worhs v. The Sun Mutual Ins. Co. (lY N. Y. [3 Smith] 401), the same principle was applied, and resulted in destroying the claims of a mortgagee to insurance because, after the assignment of the policy to him, the mortgagor had violated one of the conditions of the policy by procuring an over-insurance. This could not be, if the theory that the contract was with the nSortgagee should be recog- nized, since the act of a stranger to an agreement cannot invalidate it. But the contract is with the mortgagor, and the mortgagee re- ceives by the assignjnent of the policy a right merely to the fruits of the bargain. And when, by the terms of the contract, the liability Fire Ins. Co., 8 Cush. 133 ; Fitchburg ' Waring v. Loder, 53 N. Y. 581. Savings Bank v. Amazon Ins. Co., 125 ' The Buffalo Steam Engine Works v. Mass. 431. The Sun Mut. Ins. Co., 17 N. Y. (3 ' The Traders' Ins. Co. v. Robert, 9 Smith) 401 ; Loring v. Manufacturers' Wend. 474 ; Tillou v. The Kingston Ins. Co., 74 Mass. (8 Gray) 28. Mut. Ins. Co., 5 N. Y. (i Seld.) 405. §§ 537-540.] INSTJEANCE AGAINST TIRE. 361 of the insTirer is made to depend upon the performance of an act by the mortgagor, an assignment of the contract will not operate to dis- pense with the performance of the act as a condition of liabihty/ § 537. Insurance " as interest may appear." — An insurance effected of A. B., " as interest may appear," will sufficiently cover an interest as mortgagee, notwithstanding a condition in the policy re- quiring that when a person procures a policy otherwise than as sole owner, that fact should be expressed in the policy, and in case of failure the policy to be void. The effect of the words, " as interest may appear," is to waive the condition.'' In Rogers v. The Trader^ Ins. Co. (6 Paige, 583), the agents for the proprietors of a steamboat effected an insurance upon the boat for the benefit and on account of whomsoever it might concern at the time of the loss, if any should occur, and it was held that a mortgagee of the iuterest of one who was the owner at the time of the insurance, and for whose benefit the policy was underwritten, had a right to the mortgagor's portion of the purchase money, to the extent of the debt secured by the mortgage. § 538. Property unoccupied. — "Where a building was insured against fire by a policy which provided that " if the assured shall vacate the property in whole or in part, this policy shall be void," and an indorsement was made upon the policy by which it was made payable to the mortgagee, and the property was afterward destroyed when unoccupied, the policy was held to be void both as to the in- sured and to the mortgagee.'' § 539. Condition against use of property. — -A policy of insur- ance, effected by a mortgagor out of possession, which by its terms is to cease and be of no effect if the premises insured shall be used for certain specified purposes, was rendered void by the use of them for such purposes by the lessee of the mortgagee in possession." § 540. Condition against alienation. — The giving of a mortgage upon land creates a lien and does not transfer title. A mortgage does not, therefore, operate to annul a policy of insurance forbidding any alienation of the insured property,' and the same rule applies to ' See the cases on this subject exam- * Franklin Savings Ins. Co. v. Central ined and discussed by Hasris and Pratt, Ins. Co., iig Mass. 240. JJ., in 17 N. Y. pp. 391, 401. iWetherell v. City Fire Ins. Co., 82 '^ De Wolf V. Capital City Ins. Co., 16 Mass. (16 Gray) 276. Hun, 116. ' Conover v. Mutual Ins. Co., i N. Y. 362 MOETGAaES OF EEAL PEOPEETT. [§ 541. a conveyance, absolute in its terms, but intended as a mere security, there being a parol defeasance." So a mortgage is not a violation of a clause against the " sale, conveyance, alienation, transfer, or change of title of the property "; " or against a prohibition against " any change in the title or possession of the property, whether by sale, voluntary transfer, or conveyance." ° Where a by-law provided that the policy should be void if the premises were " alienated by sale, mortgage, or otherwise," it was held that the executing of a mortgage was not an alienation and did not affect the validity of the policy.* Where, however, a policy of insurance provides that no mortgage shall be imposed upon the insured property without the consent of the insurer, the condition will be enforced in accordance with its terms." An assignment under proceedings in insolvency by a debtor, is an " ahenation " of his property within the meaning of a stipulation in a mutual insurance policy, that " when any property insured shall be taken possession of by a mortgagee, or in any way alienated, the pol- icy shall be void," and defeats the right of a mortgagee to recover a portion stipulated by the policy to be paid to him in case of loss." The mere commencement of a proceeding to foreclose a mortgage without notice to the insurer, is not such a " change of ownership or increase of hazard " as will invalidate an insurance for the benefit of a mortgagee, under a clause forbidding such change of ownership.' A condition against alienation does not operate to render a policy void until the title has actually been transferred, and an executory contract for such transfer has no such effect.' § 641. Other insurance forbidden. — The inhibition against other 290; s. c. 3 Denio, 254; Woodward v. v. Howard Ins. Co., 52 N. Y. 502; 11 Republic Fire Ins. Co., 32 Hun, 365. Am. R. 74. The rule is different in the case of chat- * Shepherd v. Ins. Co., 38 N. H. 232. tel mortgages. Woodward v. Republic ^ Gould v. Holland Purchase Ins. Co., Fire Ins. Co., supra. 16 Hun, 538 ; McGowan v. People's Fire ' Hodges V. Tennessee Marine & Fire Ins. Co., 54 Vt. 211 ; 26 Alb. L. J. 253. Ins. Co., 8 N. Y. 416 ; contra, Barry v. * Young v. Eagle Fire Ins. Co., 80 Hamburg-Bremen Ins. Co. (N. Y. Supr. Mass. (14 Gray) 150. Ct.), 24 W. Dig. 325. ' Phoenix Ins. Co. v. Union Mut. Life ^ Commercial Ins. Co. v. Spankneble, Ins. Co., 101 Ind. 392 ; Michigan State 52 111. 53 ; 4 Am. R. 582. Ins. Co. v. Lewis, 30 Mich. 41. ' Hartford Fire Ins. Co. v. Walsh, 54 * Haight v. Continental Ins. Co., 92 111. 164 ; 5 Am. R. 115 ; see also Savage N. Y. 51. §§ 542-543.] nsrsuEANCE against fire. 363 insurance of the interest of the owner, does not operate to render the pohey void because of an insurance made by the mortgagee on his interest as such.' The principles which distinguish between the in- terests of the mortgagor and mortgagee as distinct subjects of insur- ance, are illustrated by a Ifew Hampshire case, where the question at issue was the apportionment of a loss among several insurers. The plaintiff's policy was on the interest of the mortgagor in the mort- gaged premises. There was another policy on the same interest in another company, and also an insurance on the interest of the mort- gagee in a third company. The plaintiff's policy contained a provis- ion that the assured should not be entitled to recover of the defend- ants any greater proportion of the loss than the amount insured by their policy bore to the whole sum insured on said property, without reference to the solvency or liability of other insurers. It was held that the jury was properly directed to apportion the loss between the defendants and the other company having insurance on the same in- terest, without taking into account the value of the interest of the mortgagee or the insurance on that interest.' § 542. Satisfaction of mortgage. — The assignment of a mortgage to the owner of the equity of redemption operates as a merger and satisfaction of it, and a policy of insurance which is invalid in the hands of the owner of the property as such, cannot be enforced by him because of his ownership of the mortgage.' Where a mortgage has been paid in full, the fact that it has not been discharged of record does not constitute a breach of warranty against incumbrances contained in a policy of insurance." § 543. Waiver of conditions. — "Where there has been a breach of a condition contained in an insurance policy, the insurance company may or may not take advantage of such br^ch and claim a forfeiture. It may, consulting its own interests, choose to waive the forfeiture, and this it may do by express language to that effect, or by acts from which an intention to waive may be inferred, or from which a waiver follows as a legal result. A waiver cannot be inferred from its mere ' Adams V. Greenwich Ins. Co., 9 Hun, 'Tuck v. Hartford Fire Ins. Co., 56 45 ; Tyler v. Etna Fire Ins. Co., 12 N. H. 326. Wend. 507 ; s. c. 16 Wend. 385 ; Mutual ' Macomber v. Cambridge Mut. Fire Safety Ins. Co. v. Hone, 2 N. Y. 235 ; Ins. Co., 62 Mass. (8 Cush.) 46. Acer V. March. Ins. Co., 57 Barb. 68. * Merrill v. Agricultural Ins. Co., 73 N. Y. 452. 364 MORT&AGES OF EEAL PEOPERTY. [§ .')44. silence. It is not obliged to do or say anything to make tlie forfeit- ure effectual. It may wait until claim is made under the policy, and then, in denial thereof, or in defense of a suit commenced therefor, allege the forfeiture. But it may be asserted broadly that if, in any negotiations or transactions with the insured, after knowledge of the forfeiture, it recognizes the continued validity of the poKcy, or does acts based thereon, or requires the insured by virtue thereof to do some act, or incur some trouble or expense, the forfeiture is as matter of law waived ; and it is now settled in our Court of Appeals, after some difference of opinion, that such waiver need not be based upon any new agreement or an estoppel.' So, where there was a condition in a policy that it should be void if foreclosure proceedings should be commenced against the insured property and this condition had been violated, it was held that the forfeiture thus caused was waived by requiring the insured, under another condition in the policy, to appear before a person appointed by the insurer, and there be subjected to an inquisitorial examination. Ey doing this the insurer affirmed the validity of the policy." " MOETGAGEE CLAUSE " IN POLICY. § 544. " Mortgagee clause." — If the insurance be procured by the mortgagor and the policy be assigned to the mortgagee for his protection, or if the insurance is made in the name of the mortgagor, the loss being payable to the mortgagee, the mortgagee will in either case take the policy subject to all of its conditions ; and if, by the act of the mortgagor, the policy by its terms thereafter becomes void, neither the mortgagor nor the mortgagee will be able to collect upon it. The consent of the insurers to the assignment will not operate as a waiver of the conditions of the policy,' and it has become usual, when insurance is made for the benefit of a mortgagee, to have a clause annexed to the policy, commonly known as the " mortgagee clause," to the effect that the policy is not to become void as to the > Per Earl, J. , in Titus v. Glens Falls 480, 493 ; Prentice v. Knickerbocker Life Insurance Company, 81 N. Y. 410, Ins. Co., 77 N. Y. 483 ; Brink v. Hano- 419 ; Allen v. Vermont Mut. Fire Ins. ver Fire Ins. Co., 80 N. Y. 108. Co , 12 Vt. 366; Webster v. Phoenix ' Titus v. Glens Falls Insurance Com- Ins. Co., 36 Wis. 67; Gans v. St. Paul pany, 81 N. Y. 410. Ins. Co., 43 Wis. 109 ; Insurance Co. v. 'Tiie Buffalo Steam Engine Works v. Norton, 96 U. S. Sup. Ct. 234 ; Goodwin The Sun Mutual Ins. Co., 17 N. Y. V. Mass. Mut. Life Ins. Co., 73 N. Y. 401. § 545.] INSTJRAIfCE AGAINST FIEE. 365 mortgagee by reason of any act or neglect of the mortgagor subse- quent to the assignment, and providing for an assignment of the mortgage securities in case the insurer desires to contest the claims of the mortgagor ; only requiring from the mortgagee that he shall notify the insurers of any change of ownership that may come to his knowl- edge. When this condition is made a part of the contract of in- surance, the mortgagee is protected by it, and, in case the mortgagor shall, by any act subsequent to the issuance of the policy, violate any of its conditions, as, for example, by parting with his prop- erty in the mortgaged premises without notice to the insurers, the insurers may, upon payment of the loss, enforce the mortgage for their indemnity.' The " mortgagee clause " is, indeed, agreed upon for this very pur- pose, and creates an independent and new contract which removes the mortgagee beyond the control or the effect of any act or neglect of the owner of the property, and renders such mortgagee a party who has a distinct interest separate from the owner, embraced in another and separate contract. The tendency of the recent cases is to recog- nize these distinctions, and thus protect the rights of the mortgagee when named in the policy, and the interest of the owner and the mort- gagee are regarded as distinct subjects of insurance.'' § 545. Other insurance. — Where the mortgagor after insurance effected in this way procures other insurance which entitles the first insurer to contribution, the mortgagee can nevertheless recover the full amount of insurance.' In such a case, however, the insurer may require an assignment of the mortgage and may enforce it, to the ex- tent of its claim for contribution." A mortgagee who procures insurance under such a stipulation is ' The Springfield F. & M. Ins. Co. v. randura on the policy and addition of Allen, 43 N. Y. 389. mortgagee clause is avoid act, and mort- ^ Per Miller, J., in Hastings v. West- gagee cannot recover unless new con- chester Fire Ins. Co., 73 N. Y. 141; Ex- sideration is paid. Davis v. Ins. Co., celsior Fire Ins. Co. v. Royal Ins. Co., 135 Mass. 251. 55 N. Y. 343; Springfield Ins. Co. v^. 'Hastings v. Westchester Fire Ins. Allen, 43 N. Y. 392; Phoenix Ins. Co. v. Co., 73 N. Y. 141, affi'g s. c. 12 Hun, Floyd, 19 Hun, 287; Foster v. Van Reed, 416. 70 N. Y. ig, rev'g s. c. 5 Hun, 321; *Phcenix Ins. Co. v. Floyd, 19 Hun, Ulster Co. Savings Institution v. Leake, 287 ; Ulster Co. Savings Institution v. 73 N. Y. 161, rev'g Ulster Co. Savings Leake, 73 N. Y. 161, rev'g Ulster Co. Institution v. Decker, n Hun, 515. In Savings Institution v. Decker, 11 Hun, Massachusetts the making of a memo- 515. 366 MORTGAGES OP EEAL PROPEBTY. [§ 546. bound to good faith toward the insurer, and a failure to disclose the condition of the property, known either to him or to his agent acting for him, will avoid the pohcy.' AGREEMENT TO INSTTEE CONTAINED IN THE MORTGAGE. § 546. Lien of mortgagee on mortgagor's insurance. — If the mortgagor procures insurance for his own benefit, without any agree- ment to insure for the benefit of the mortgagee, the latter cannot claim any benefit from the insurance." A contract of insurance against fire, as a general rule, is a mere personal contract between the assured and the underwriter to indemnify the former against the loss he may sustain ; and in case a mortgagor effects an insurance upon the mort- gaged premises, the mortgagee can claim no benefit from it, unless he can base his claim upon some agreement. But where the assured has agreed to insure for the protection and indemnity of another per- son having an interest in the subject of the insurance, then such third person has an equitable lien in case of loss upon the money due upon the poHcy to the extent of such interest.' Thus, in a case in the Court of Chancery in Maryland, where the mortgagor covenanted with the mortgagee that he would keep the premises insured during the continuance of the lien of the mortgage, and in case of loss, that the amount received upon the policy should be applied to the rebuilding of the property insured, it was decided that the mortgagee had an equitable lien upon the fund received by the mortgagor under the policy, to satisfy the balance due upon the mortgage which could not be collected upon a foreclosure and sale of the mortgaged premises.' A similar decision was also made by the 'Cole V. Germania Fire Ins. Co., gg Sands' Ale Brewing Co., 3 Biss. 175; N. Y. 36. Dunlop V. Avery, 23 Hun, 5og ; Ames '' De Forest v. Fulton Fire Ins. Co., i v. Richardson, 2g Minn. 330 ; Miller v. Hall, 84; Neale v. Reid, 3 Dowl. & Ryl. Aldrich, 31 Mich. 408. But the mort- 158; Columbia Ins. Co. v. Lawrence, 10 gagee has no claim against the insurer Pet. 507 ; Carter v. Rockett, 8 Paige, after the loss has been settled with the 437 ; Vandegraaf v. Medlock, 3 Porter, mortgagor without notice of his rights : 38g ; Plimpton v. Ins. Co., 43 Vt. Burns v. Collins, 64 Me. 215. And it 4g7. has been held that the mortgagee has no ' Per Earl, Com., in Cromwell v. The legal or equitable lien upon the policy : Brooklyn Fire Ins. Co., 44 N. Y. 42, 47; Stearns v. Quincy Mut. Life Ins. Co., Carter v. Rockett, 8 Paige, 437; Thomas' 124 Mass. 61 ; 26 Am. R. 647. Adm'rs v. Von Kapff's Ex'rs,,6 Gill. & J. ■• Thomas' Adm'rs v. Von Kapff's Ex'rs, 372 ; Providence Co. Bank v. Benson, 6 Gill. & J. 372 ; cited and approved by 24 Pick. 204 ; Nichols v. Baxter, 5 R. I. Walworth, C, in Carter v. Rockett, 8 491; Ellis V. Kreutsinger, 27 Mo. 311 ; Re Paige, 437. §§ 547-549.J INSURANCE AGAIlSrST FIRE. 367 Oourt of King's Bench, in England, in a case wliere a lessee of prem- ises covenanted with the lessor to keep the premises insured.' § 547. Recording of covenant to insure is not notice. — It was held In re Sands' Ale Brewing Co. (3 Bias. [Dist. Ct. U. S.] 175) that a covenant to insure contained in a mortgage acts upon the insurance as soon as it is effected, runs with the land, and, being re- corded, gives notice to all subsequent incumbrancers that the policy is treated as equitably assigned to the plaintiff. The direct effect of this ruling is to declare that equity makes an assignment to the mort- gagee of every policy obtained by the mortgagor the moment he procures it, and tlie record gives to subsequent incumbrancers notice of such equitable assignment." This rule does not obtain in this State. Our Court of Appeals, in Dunlop V. Avery (89 N. Y. 592), has held that while there is no doubt as to the correctness of the rule that, where the mortgagor is bound by the terms of the mortgage to keep the premises insured for the security of the mortgagee, as between him and the mortgagor an equitable lien arises in favor of the mortgagee for the money received upon the policy to the extent of the mortgage, this rule does not apply where the policy itself provides for the payment of the loss to another incumbrancer. The recording of a mortgage containing a covenant to keep the buildings on the mortgaged premises insured, does not charge a subsequent incumbrancer with constructive notice of the covenant, and the recording act has no application to it. Such a covenant is not a covenant running with the land, but is entirely personal in its character.' § 548. Parol contract to insure. — A contract to protect the mortgagee's interest by insurance may be made by parol outside of the mortgage, and where insurance premiums are paid by the mort- gagee by the request of the mortgagor, they become charges consti- tuting liens upon the land.' A stipulation to insure the amount " due " on a mortgage has been construed to mean the amount owing upon it.' § 549. Insurance by mortgagee without agreement with mortgagor. — It was said in Matter of Bogart (28 Hun, 466), that a ' Vernon v. Smith, 5 Barn. & Ad. i. * Faure v. Winans, Hopk. 283; Fowley '' See as to this case, Dunlop v. Avery, v. Palmer, 71 Mass. (5 Gray) 549. 23 Hun, 509, rev'd 89 N. Y. 592. * Fowler v. Hoffman, 31 Mich. 215. ^ Reid V. McCrum, 91 N. Y. 412. 368 MORTGAGES OF REAL PEOPEETY. [§§ 550-551. mortgagee has a riglit to make a payment on a policy of insurance against fire for the protection of the estate mortgaged, and to add the amount paid to the mortgage debt, independent of an express agreement authorizing such payment. ~So authority is cited to sus- tain this proposition, and it is of doubtful accuracy. ENFOECING PAYMENT BY INSUEBES. § 550. Proof of loss. — Where a policy is procured by the mort- gagee, insuring " A. B. as owner, and C. D. as mortgagee ; loss, if any, payable to C. D. as mortgagee," the proof of loss required by the condition usual in policies may be furnished by the mortgagee alone,' though the more prudent course is for both to unite in such proof. In such a case, where the mortgagor's interest was held, under a con- veyance from him, by an infant whose mother and general guardian refused to make or to join in the proofs of loss, an action was com- menced by the mortgagee against the insurer and the mortgagor's grantee to compel proofs of loss to be made and to enforce payment. This relief was denied on the ground that no obligation to furnish such proofs existed on the part of the mortgagor's grantee, who had made no covenant to insure, and who was not liable for the debt, and for the reason that the plaintiffs own theory of the case against the in- surer was based upon the assumption that the condition of serving proofs of loss had neither been complied with nor nullified." § 551. Action by mortgagor to recover insurance. — In Heil- man v. Westchester Fvre Ins. Go. (75 N. Y. 7), a policy of insurance had been issued to the plaintiff, who was mortgagor, " loss, if any, pay- able to B., mortgagee," which contained the following clause : " The amount of loss or damage to be estimated according to the actual cash value of the property at the time of the loss, and to be paid sixty days after due notice and proofs of the same made by the assured and received at this office in accordance with the provisions of this policy, unless the property ie replaced, or the oompcmy have given notice of their intention to rebuild or repair the damaged premisesP There was also a provision giving the company the option to repair or rebuild upon giving notice. Such notice was given to the plaintiff, but the defendant thereafter neglected and refused to rebuild, when the action was brought. The question presented was as to whether ' Graham V. Phoenix Ins. Co., 17 Hun, ' Id. 77 N. Y. 171, affi'g s. c. 12 Hun, 156. 446- § 552.] INSUEAWCB AGAIJSrST FIRE. 369 the mortgagee ought not to have been the plaintiff, and it was held that the agreement to pay was modified by the agreement to rebuild, and that the action was properly brought in the name of the mort- gagor, and that the defendant would not have been liable to an action by the mortgagee. It was remarked by the court that it may be that under some circumstances a mortgagee might intervene in equity in case of insufficient security to prevent the payment of the money to the mortgagor or its misappropriation, but no such question arose in the case.' It has been held that a mortgagor insured on a sealed policy of in- surance may sue in his own name, though the policy have written on it, " loss, if any, payable to A. B., mortgagee." It was said that the indorsement was not a transfer, and did not merge or extinguish the contract of the insurers, and that, if the insurers had paid to the mortgagee, this would have been a defense." § 552. Action by mortgagee to recover insurance. — Where a policy of insurance is taken in the name of the mortgagor, and con- tains a clause, " loss, if any, payable to the mortgagee," such words operate to give the mortgagee, for most purposes, the same rights and interests in the policy which he would have had if, without such words, the policy had been assigned to him with the consent of the insurers.^ The Code having provided that an action shall be brought in the name of the party in interest, it has accordingly been held that the person to whom the loss is payable, can sustain an action against the insurers.' Where the insurance is made of the interest of the mortgagor, " loss, if any, payable to the mortgagee," the mortgagee may recover the whole amount of loss though in excess of his lien, and, after pay- ' Patterson v. Triumph Ins. Co., 64 * Martin v. Franklin Fire Ins. Co., 38 Me. 500 ; Friemansdorf v. Watertown N. J. 140 ; zo Am. Rep. 372. Ins. Co., gBissell, 167 ; Illinois Fire Ins. ^Luckeyv. Gannon, 37 How. 134, 138; Co. V. Stanton, 57 III. 354 ; Turner v. Ennis v. Harmony Fire Ins. Co., 3 Quincy Ins. Co., 109 Mass. 568. But a, Bosw. 516 ; Grosvenor v. Atlantic Fire mortgagee to whom a policy of insur- Ins. Co. of Brooklyn, 5 Duer, 517 ; s. c. ance is made payable in case of loss, is 17 N. Y. 391, 395. not bound by an adjustment of such ^Frink v. Hampden Ins. Co., 45 Barb, loss, made without his knowledge and 384 ; s. c. 31 How. 30 ; Rous^l v. St. consent, by the assured mortgagor Nicholas Ins. Co., 52 How. 495 ; Ennis with the insurance company. Harring- v. Harmony Fire Ins. Co., 3 Bosw. 516; ton V. Fitchburgh Ins. Co., 124 Mass. Motley v. Manuf. Ins. Co., 29 Me. 337 ; 126. Hadley v. N. H. Ins. Co., 55 N. H. no. 24 370 MOETGAGES OF EEAL PEOPERTY. [§§ 553-555. ment of his demand, he will hold the balance as a trustee for the mortgagor.' § 553. Action by both mortgagor and mortgagee to recover insurance. — Where the owner of the property and the mortgagee have, both of them, interests under the policy, it is proper for them to join as plaintiffs in an action to enforce it." EIGHTS OF THE PARTIES WHEEE THE PEEMItJM IS PAID BT THE MOETGAGOE. § 554. Agreement to insure. — It is a common practice to insert a provision in mortgages obligating the mortgagor to prociire insurance on the mortgaged premises as a collateral security to the mortgage, and, in default of his so doing, giving to the mortgagee the right to procure such insurance at the mortgagor's expense. This is a per- fectly valid bargain, but in the absence of such an agreement, the mortgagee, if he insures at all, must do so at his own expense, and the premium paid for insurance cannot be tacked to the mortgage debt.' If the mortgagee receives the money necessary to pay the premium, and undertakes to procure insurance, it becomes his duty to do so ; if he omits to insure, he stands in the place of the insurance company, and, if a loss occurs, the amount of insurance which he undertook to obtain will be deducted from the debt* § 555. Insurance procured by a mortgagee upon the request or at the expense of the mortgagor is held by the mortgagee for the pro- tection of both interests. The import of the transaction is that the insurance is additional collateral security for the mortgage debt, fur- nished by the mortgagor at his expense, and procured by the mort- gagee, acting as his agent and by his authority. The general rule that the proceeds of collateral securities in the hands of the creditor are to be applied when received by him in the reduction of the debt, re- quires that the insurance money, when collected by the mortgagee, shall be applied upon the mortgage debt, and if sufficient to pay, it shall extinguish it. It is immaterial to the mortgagor whether the insurance be in his name or in the name of the mortgagee, if the avails ' Mix y. Hotchkiss, 12 Conn. 32 ; Fow- ' Faure v. Winans, Hopk. Ch. 283 ; leyv. Palmer, 5 Gray, 549; ConcordUnion Fisher on Morts., 493, 494. Mut. Ins. Co. V. Woodbury, 45 Me. 447. ■" Soule v. The Union Bank, 30 How. 'Winne v. Niagara Fire Ins. Co., gi 105 ; s. c. 45 Barb. iii. N. Y. 185. § 556.] rNSUBAJsrcE against fire, 371 of it in case of loss are to be applied in reduction of the debt, and the mortgagee has no interest to procure an insurance limited to his own protection merely, where the expense is to be paid by the other party and is secured on the land. In such cases the imphed obligation is, that the insurance money when paid to the former shall apply upon the mortgage debt.' § 556. Agreement with insurer for subrogation.— This rule has no application as against an insurer, however, when it is made a part of the contract, of insurance between him and the mortgagee, that he shall have an assignment of the mortgage when a loss equal to its amount has been paid. In such a case, though the premium has been paid by the mortgagee under a clause in the mortgage at the expense of the mortgagor, the insurer may demand an assignment stipulated for in the policy, and may enforce it against the mortgagee." In Hay v. Star Fire Ins. Co. (YY N. Y. 235, affi'g s. c. 13 Hun, 496), insurance was effected by the mortgagee at the expense of the mortgagor. The policy contained the following clause : " In all cases of loss the assured shall assign to this company all his right to receive satisfaction therefor, from any other person or persons, town or cor- poration, with a power of attorney to sue for and recover the same at the expense of this company. When insured as a mortgagee, the loss shall not be payable until payment of such portion of the debt shall have been enforced, as can be collected out of the original security, to which this policy shall be held as collateral, and this company shall then only be liable to pay such sum, not exceeding the amount in- sured, as cannot be collected out of such primary security." The action was brought to strike this clause out of the policy, on the ground of fraud in issuing it, and to recover upon the policy as reformed. In affirming the judgment granting this relief, the court remarked that the clause referred to made the defendant a mere guarantor of the collection of the mortgage and an insurer of the debt, a contract practically of no benefit either to the insured or to the mortgagors. It 'Waring V. Loder, 53 N. Y. 581; Hoi- Concord Union M. F. Ins. Co. v. Wood- brook V. American Ins. Co., i Curtis, bury, 45 Me. 447 ; Wilcox v. Allen, 36 193; Buffalo Steam Engine Works \. Mich. 160; Felton v. Brooks, 58 Mass. Sun Mutual Ins. Co., 17 N. Y. 406 ; Clin- (4 Cush.) 203. ton V. Hope Ins. Co., 45 N. Y. 467 ; ' Foster v. Van Reed, 70 N. Y. 19, Cromwell v. Brooklyn Fire Ins. Co., 44 rev'g s. c. 5 Hun, 321. But see Graves N. Y. 47; Hamilton v. Gunther, 32 Hun, v. Hampden Fire Ins. Co., 92 Mass. (10 22 ; Flanders on Ins., 1871, 347-361 ; Allen) 281. 372 MOETGAGES OP REAL PROPERTY. [§§ 557-559. was an insurance which the mortgagee under his contract with the mortgagor had no right to accept, and one which in Excelsior Ins. Go. V. Royal Ins. Go. (55 N. Y. 343), it is more than intimated that the defendant had no right to make. § 557. Application of insurance money. — The mortgagee cannot apply insurance moneys received by him or a policy on the mort- gaged property, paid for by the mortgagor, to other debts of the mortgagor." And if the mortgage debt be not due, the mortgagor cannot apply such insurance moneys at all otherwise than in repairing the loss to the property, without the consent of the mortgagor.^ The mortgagee has no authority to consent to the cancellation of the policy paid for by the mortgagor, for the protection of both interests.' Where a mortgagee had insurance on his interest and promised the mortgagor to give him credit for anything received on account of it, it was held that this promise could be enforced, and that the hability of the mortgagor was, in equity, a sufficient consideration.' EIGHTS OF THE PAETIES WHEEE THE PEEMIUM IS PAID BT THE MOETGAGEE. § 558. Mortgagor has no claim to insurance. — Where the in- surance i§ procured by the mortgagee at his own expense, upon his own motion, and for his sole benefit, it is obvious that the mortgagor cannot be entitled to claim the fruits of a contract to which he was a stranger, and toward the consideration of which he had contributed nothing, and various interesting questions have arisen as to the rights in such cases of the mortgagee and the insurer as between each other. Thus, it has been said that an insurance by a mortgagee is not an in- surance of the specific property, but of its capacity to pay the mort- gage debt,° and again that " it is but an insurance of his debt, and if his debt is afterward paid or extinguished, the policy from that time ceases to have any operation." ° § 559. If it is the debt only which is insured, it may be said 'Buckley v. Garrett, 6o Penna. St. surance Co., (Mass.) 7 Northeastern 333. Rep. 556. '' Gordon v. Ware Savings Bank, 115 * Matter of Moore, 6 Daly, 541. Mass. 588 ; Fergus v. Wilmarth, (III.) 7 ' CoUahan v. Linthicum, 43 Md. 97 ; Northeastern Rep. 508 ; Elliot Five-Cent 20 Am. Rep. 106. Savings Bank v. Commercial Union As- ^ Flanders on Ins. 360. ' Angell on Ins. § 59. § 560.] iisrsTJEAisrcE against fiee. 373 that until tlie debt or some part of it is lost, tliere is no loss upon the policy, and that neither the debt nor any part of it is lost until the mortgagee fails to obtain it from an enforcement of his mortgage. There are a number of dicta of judges and text-writers which would seem to favor this rule. In one case in Pennsylvania it was said by Gibson, J.,' that " a mortgagee insures not the ultimate safety of the whole property, but only so much of it as is sufficient to pay the mortgage debt, and in effect the security is insured." He also says, by way of illustrative enforcement of his argument, that a mortgagee insured, cannot recover of the insurer for the loss by iire of a few shingles when the premises are left amply sufficient to secure him his debt. So, Chancellor Walworth remarked ^ that a vendor who re- tained a lien for unpaid purchase money had an insurable interest only to the amount of his lien, " so far as the land upon which the house stood was insufficient to protect him from loss, provided the purchaser was unable to pay the same." ' § 560. Debt is not insured. — It cannot be said, however, that in any strict legal sense the insurers contract to indemnify the mortgagee for a loss of the mortgage debt. They have, indeed, no power to guarantee the payment or collection of a debt. Fire underwriters in these days in this State, as in all the States, are creatures of the statute, and have no rights save such as the State gives to them. They may agree that they will pay such loss or damage as happens by fire to property. They are limited to this." It was not readily that it was first held that they could agree with a mortgagee or lienor of prop- erty to reimburse to him the loss caused to him by fire. He is not the owner of it ; how then can he insure it ? was the query. And the effort was not to enlarge the power of the insurer so that it might insure a debt, but to bring the Honor within the scope of that power, so that the property might be insured for his benefit. And it was done by holding that, as his security did depend upon the safety of the property, he had an interest in its preservation, and so had such interest as that he might take out a policy upon it against loss by fire, without meeting the objection that it was a wagering policy. The policy did not therefore become one upon the debt, and ' Smith V. Col. Ins. Co., 17 Pa. St. 253. in Excelsior F. Ins. Co. v. Royal Ins. ^iEtna F. Ins. Co. v. Tyler, 16 Wend. Co. of Liverpool, 55 N. Y. 343. 397. ■'Hay V. Star Fire Ins. Co., 77 N. Y. ^See also cases cited by Folger, J., 236, affi'g s. c. 13 Hun, 496. 374 MOETGAGES OF EEAL PEOPERTT. [§§ 561-562. for indemnification against its loss, but still remained one upon the property, and against loss or damage to it. It is doubtless true, as was said by Gibson, J., tbat in effect it is the debt which is insured. It is only in efiect, however, an effect resulting from the primary act of insurance of the property which is the security for the debt. It is the interest in the property which gives the right to obtain insui*- ance, and the ownership of the debt, a lien upon the property, creates that interest. The agreement is usually for insuring the property from loss or damage by fire. The interest of the mortgagor is in the whole property, just as it exists, undamaged by fire at the date of the policy. If that property is consumed in part, though what there be left of it is equal in value to the amount of the mortgage debt, the mortgage interest is affected. It is not so great or so safe or so valuable as it was before. It was for indemnity against this very detriment, this very decrease in value, that the mortgagee sought in- surance and paid his premium. The undertaking is that the property shall not suffer loss by fire ; that is, in effect, 'that its capacity to pay the mortgage debt shall not be diminished. When an appreciable loss has occurred to the property from fire, its capacity to pay the mort- gage debt has been affected ; it is not so well able to pay the debt which is upon it. The mortgage interest, the insurable interest, is lessened in value, and the mortgagee, the insuree, is affected, and may call upon the insurer to make him as good as he was when he effected his insurance.' § 561. Damages repaired by mortgagor.^A mortgagee has been held not to be entitled to recover from the insurer if the injury to the property has been entirely repaired by the mortgagor.' WHEN THE INSUEEE IS ENTITLED TO BE SUBROGATED TO THE EIGHTS OF THE MOETGAGEE. § 563. Insurer entitled to be subrogated to do equity. — It being established that the liability of the insurer of a mortgagee's in- terest extends to the full amount of the damage to the property, within the limits of the policy and of the mortgage debt, it becomes an interesting question as to what rights remain after the payment of the loss as between the parties. The mortgagor can make no claim ' FoLGER, J., in Excelsior F. Ins. Co. ^ Matter of Moore, 6 Daly, 541 ; Mat- V. Royal Ins. Co. of Liverpool, 55 N. Y. thewson v. Western Assurance Co., 10 343 ; Foster v. Van Reed, 5 Hun, 321. Lower Canada, 18 ; G. C. Montreal, 8. § 563.] IKSTTEANCE AGAIKST FIRE. 375 to the insurance moneys if he has not paid the consideration for the poKcy. It has been said that, in such a case, the mortgagee is entitled both to the insurance money and to the mortgage debt, since neither the insurer by paying the loss, nor the mortgagor by paying the debt, does any more than each respectively contracted to do and was paid for doing.' This view, however, it will be seen, ignores the principle of public policy, that no man should be allowed to bargain for an advantage to arise from a destruction of life or property — in other words, to lay a wager that a particular person will die, or a particular property be burnt within a given period. A more equitable doctrine has prevailed, and it may now be regarded as set- tled that the insurer who pays the amount of the mortgage debt, or some part of it, is entitled to be subrogated to the rights of the mort- gagee for his indemnity, and that he is entitled to an assignment of the rights of the assured, upon paying the full amount of the mort- gage debt. This is put upon the analogy of the situation of the in- surer to that of a surety ;" and it might also safely rest upon the doe- trine that npon an abandonment and payment, or upon a recovery as for a total loss, the insurers are entitled to subrogation in equity to all the rights and remedies which the assured has to the property which is not actually destroyed.' § 563. The right of subrogation is, however, an equitable one, and is only allowed when equity demands its exercise. It is only al- lowed in cases where the sum received by the insured does not go in reduction of the debt, and the insured might otherwise, notwithstand- ing the payment of the loss, proceed to collect the whole debt of the mortgagor. The utmost the insurers can claim is to be subrogated as to the amount paid by them to the right of the insured to collect . the debt, irrespective of the sum received by hun on the policy. It ' Shaw, C. J., in King v. State Mutual rule is different in Massachusetts, where F. Ins. Co., 7 Cush. i. a mortgagee may collect both from the ' Excelsior F. Ins. Co. v. Royal Ins. mortgagor and the insurer. King v. Co. of Liverpool, 55 N. Y. 359. State M. F. Ins. Co., 6i Mass. (6 Cush.) ' Atlantic Ins. Co. V. Storrow, 5 Paige, 456; Suffolk Fire Ins. Co. v. Boyden, 285 ; Rogers v. Hosack's Ex'rs, 18 gi Mass. (9 Allen) 123. See also on this Wend. 319 ; JEtna. Fire Ins. Co. v. Ty- subject. White v. Brown, 56 Mass. (2 ler, 16 Wend. 385 ; Mercantile Mut. Ins. Cush.) 412 ; Ely v. Ely, 80 111. 532 ; Co. V. Calebs, 20 N. Y. 176 ; Dick v. Russell v. Southard, 12 How. (U. S.) Ins. Co., 8i Mo. 103 ; Honore v. Lamar 139 ; Mclntyre v. Plaisted, 68 Me. 363 ; Fire Ins. Co., 51 111. 409 ; Norwich Fire Loudon v. Waddle, 98 Pa. St. 242. Ins. Co. V. Boonier, 52 111. 442. The 376 MOETGAGBS OF REAL PROPEETr. [§ 564. is a mere equity to be put in the place of the insured as to that sum, in regard to the bond and mortgage, whatever his rights may be. This equity does not arise out of the contract of insurance, but from all the circumstances of the case.' So, where, although the contract as between the mortgagee and the insurers, may not provide for the insurance of any other than the interest of the mortgagee, still, if the premium be actually paid by the mortgagor, the insurers cannot de- mand an assignment of the mortgage, and the payment of loss wiU operate as a payment on account of the mortgage debt. The insurers cannot collect if the mortgagor could not do so, and the mortgagor would have an equitable claim upon the mortgagee for insurance pro- cured at his expense.' § 564. Agreement for subrogation. — The obligation of the in- surers is to be determined by the terms of the policy, and it is per- fectly competent for them to stipulate for subrogation. So, where insurance was made of a mortgagor's interest, " loss, if any, payable to the mortgagee," and a stipulation was annexed to the contract such as has already been spoken of as a " mortgagee clause," and the insur- ance as to the mortgagor was rendered inoperative by a violation of a condition forbidding other insurance, the insurer was held entitled to subrogation on paying the mortgagee's claims.' ' Kernochan v. The N. Y. Bowery Fire LeaWe, 73 N. Y. 161, rev'g Ulster Co. Ins. Co., 17 N. Y. 428. Savings Institution v. Decker, 11 Hun, ' Hay V. Star Fire Ins. Co., 77 N. Y. 515 ; Phcenix Ins. Co. v. Floyd, ig Hun, 235 ; Kernochan v. The N. Y. Bowery 287 ; Thornton v. ' Enterprise Ins. Co., Fire Ins. Co., 17 N. Y. 428. 71 Pa. St. 234. ' Ulster Co. Savings Institution v. CHAPTER XV. THE ASSUMING OP MORTGAGES. AGREEMENT TO ASSUME MORTGAGE. § 565. Parol agreement to assume. 566. Who bound by covenant. 567. Acceptance of conveyance con- taining covenant binds grantee. 568. Grantee not bound unless con- veyance was accepted by him. 569. Illustrations of the rule. 570. Holding stranger to the deed on covenant contained in it. 571. Conveyance subject to mortgage. 572. Language importing covenant to assume. 573. Language not importing covenant to assume. 574. Extent of liability. 575. Form of action on covenant to assume. 576. Action at law by mortgagee on covenant to assume. 577. Action by grantor against grantee on covenant to assume. 578. Other rights of action. GROUNDS UPON WHICH THE MORTGAGEE MAY ENFORCE THE AGREEMENT TO AS- SUME. 57g. The bargain to assume the pay- ment of the mortgage. 580. Doctrine of King v. Whitely. 581. The case of Russell v. Pistor. 582. Burr V. Beers. 583. Covenant to assume contained in mortgage. 584. In Ricard v. Sanderson. 585. In Pardee v. Treat. 586. In Root V. Wright. 587. The rule in Garnsey v. Rogers. EFFECT OF THE AGREEMENT WHERE THE GRANTOR IS NOT OBLIGATED TO PAY THE DEBT. § 588. When the courts abandoned the reasoning of the earlier cases. 589. In Thorp v. The Keokuk Coal Co. 590. Rule as settled. RELATIONS BETWEEN PARTIES AFTER AGREEMENT TO ASSUME. 591. Mortgagor becomes surety after his grantee assumes. 592. Results of mortgagor's rights as surety. 593. Mortgagor not relieved by cove- nant of his grantee. 594. The mortgagor may protect him- self from depreciation in value of the property. DEFENSES TO ACTIONS ON COVENANTS TO ASSUME MORTGAGES. 595. Mortgagee cannot enforce a void covenant. 596. In all cases it is quite material. 597. The same defenses also exist. 598. Covenant to assume inserted by fraud or mistake. 599. Failure of consideration for cov- enant. 600. Eviction by paramount title. 601. Grantor may release from cove- nant to assume. 602. Grantor may not release. 603. Either side of this discussion. 604. Rule in New Jersey as to release of covenant. AGREEMENT TO ASSUME MOETGAGE. § 565. Parol agreement to assume. — ^When a person obligated to pay a mortgage debt conveys the premises upon whicli the mort- gage is a lien, upon an agreement that the grantee shall, as part of 378 MORTGAGES OP EBAL PEOPEETY. [§ 566. the price, assume the payment of the mortgage debt, the contract of the grantee does not bind him as a guarantor for the payment of the debt of another person. The debt' is his own debt contracted by him with his grantor, and constitutes a portion of the consideration for the estate upon which the mortgage is a charge, and the character of the obligation as an original undertaking is not changed by the fact that the payment is to be ma3e"to the mortgagee instead of to the vendor of the property.' The promise of the grantee is, therefore, not within the statute of frauds, but it stands upon the footing of a promise to pay for lands sold and conveyed, which can be enforced though it be not in writing." Where real estate is conveyed subject to a mortgage, it is not com- petent for the mortgagee to show that a parol agreement was made by which the grantee made himself personally holden for its payment, in contradiction of a written contract of sale which stipulates merely for a sale of the equity of redemption. Proof of such a parol agree- ment would conflict with the terms of the written contract, and is therefore not admissible on behalf of a person claiming under it.' Where a grantee of two lots assumed payment of five mortgages upon them, there being actually five on each, it was held that parol evidence was admissible to dispel the ambiguity." § 566. Who bound by covenant. — Although the promise of a grantee to pay a mortgage is commonly expressed by a recital in the deed of conveyance, it may equally well be made in a written instru- ment between the grantor and grantee outside of the conveyance.' A married woman is bound by a covenant to assume a mortgage contained in a conveyance to her." ' Ely V. McNight, 30H0W. 97 ; Barker en v. Kurtz, 37 Iowa, 239; Merriman V. Bucklin, 2 Den. 45 ; Fish v. Dodge, v. Moore, 90 Pa. St. 78 ; Canfield v. 4 Id. 311 ; Murray v. Smith, i Duer, 412. Shear, 49 Mich. 313 ; Wright v. Briggs, ' Thomas v. Dickinson, 12 N. Y. (2 99 Ind. 563. — Under the Civil Code of Kern.) 364 ; Dorr v. Peters, 3 Edw. Ch. California, § 2922, an oral agreement 132 ; Smith v. Truslow, 84 N. Y. 660 ; between tenants in common of lands Tainter v. Hemmingway, 18 Hun, 458 ; subject to a mortgage, that the interest Murray v. Smith, i Duer, 412 ; Minor v. of one shall be charged with the whole Perry, 6 How. 208, 212 ; Sherman v. mortgage, and the interest of the other Willett, 42 N. Y. 146 ; Barker v. Brad- shall be charged with the whole debt, is of ley, 42 N. Y. 316 ; Remington v. Palmer, no effect. Porter v. Muller, 65 Cal. 512. 62 N.^Y. 31 ; Hebbard v. Haughian, 70 ^ Selchow v. Stymus, 26 Hun, 145. N. Y. 54 ; Arnot v. E. R.R. Co., 67 N. * Martindale v. Parsons, 98 Ind. 174. Y. 321 ; Wilson v. King. 23 N. J. Eq. * Schmucker v. Sibert, 18 Kans. 104 : 150 ; Holies v. Beach, 2 Zab. (N. J.) 680 ; 26 Am. R. 765. Wormouth v. Hatch, 33 Cal. 121 ; Bow- ' Cashman v. Henry, 75 N. Y. 103 ; §§ 567-568.] THE ASSUMING- or MOETaAGES. 379 Where a party purchases real estate and assumes to pay one-half of certain mortgages thereon, he is a proper party to a suit to foreclose, and liable to a personal judgment for one-half of the mortgage debt/ § 567. Acceptance of conveyance containing covenant binds grantee. — "While a parol promise by a grantee to assume and dis- charge a mortgage lien upon property conveyed to him would afford a perfect cause of action, the absence of any written evidence would be unusual, and the proof should be clear and convincing. The com- mon and usual way in which the contract is evidenced is by inserting a recital hi the deed of conveyance to the effect that the grantee as- sumes and agrees to pay the mortgage as part of the consideration therein expressed. This recital, coupled with the fact that the deed is accepted by the grantee, who takes and holds the estate which is granted by it, furnishes the most satisfactory evidence that he has adopted the seal of the grantor as his own, and he is estopped from denying that the recital is true.^ The acceptance of a deed by an agent of the grantee, duly author- ized to act for him, will be sufficient to bind him by its covenants.' § 568. Grantee not bound unless conveyance was accepted by him. — Covenants on the part of the grantee in a deed are treated as his covenants, only upon the ground that the deed is accepted by him. By accepting the instrument, and thus taking the advantages which accompany it, he is presumed to have assented to its terms. Acceptance operates as an execution of the deed by the grantee, but until he has accepted it he is not bound by any of the recitals which it contains.* If a conveyance of the mortgaged premises containing a covenant to assume the mortgage, is shown to have been executed and recorded, this is prima facie evidence of an acceptance by the 31 Am. R. 437 ; Ballin v. Dillajre, 37 N. Gove, (N. J.) 27 Alb. L. J. 33; Vreelandv. Y. 35 ; Vrooman v. Turner, 6g N. Y. Van Blarcom, 35 N. J. Eq. 530 ; Law- 280. rence v. Towle, 59 N. H. 28 ; Woodbury ' Logan V. Smith, 70 Ind. 597. v. Swan, 58 N. H. 280 ; Hancock v. ^ Bowen v. Beck, 94 N. Y. 86 ; Allan- Fleming, 103 Ind. 533 ; Ellis v; Johnson, tic Dock Co. V. Leavitt, 54 N. Y. 35 ; 13 Trustee, 96 Ind. 377 ; Lewis v. Mont- Am. R. 556, and cases cited ; Comstock gomery Mut. B. & L. Asso'n, 70 Ala. V. Drohan, 71 N. Y. 9, affi'g s. c. 8 Hun, 276 ; Davis v. Hulett, (Vt.) 33 Alb. L. J. 373 ; Wales v. Sherwood, 52 How. 413 ; 499. Crawford v. Edwards, 33 Mich. 354 ; ^ Fairchild v. Lynch, 42 N. Y. Super. Carley v. Fox, 38 Mich. 387 ; Hicks v. (10 J. & S.) 265. McGarry, 38 Mich. 667 ; Finley v. Simp- * Van Horn v. Powers, 26 N. J. Eq. son, 2 Zab. (N. J.) 311 ; Sparkman v. 257. 380 MOETGAGES OF REAL PEOPEETT. [§ 569. grantee," but it is always competent to show that the conveyance has not been accepted. Any instrument which upon its face is regular and purports to be a deed of conveyance may be recorded, and if it is not in truth what it purports to be, it will not be aided by being engrossed by a recording clerk and put upon the files of a pubhc office." A conveyance is usually beneficial to a grantee, and it is fair to presume, in the absence of evidence to the contrary, that it has been accepted by him, but it would be subversive of all principle to hold a nominal grantee concluded by acts which may be performed by the grantor without his knowledge, privity, or consent.' ^ § 569. Illustrations of the rule. — Thus, where a grantee paid nothing for a conveyance, but consented that a deed might be made to him to accommodate the grantor, the title to remain in his name until a reconveyance should be requested, a covenant to assume was inserted and the deed was recorded without having been shown to the grantee. Subsequently, in conformity with the arrangement between the parties, the grantee, without receiving any valuable consideration, reconveyed the title, and thereafter it was sought to hold him on the covenant to assume. It was held that he was not bound." So, where a deed was executed and recorded by the owner of land in which the grantee was recited to have assumed payment of a mort- gage thereon, and the grantee on being informed of what was done refused to accept the deed, but executed a retransfer of the title, it was held that by executing such reconveyance he did not recognize the validity of the deed to himself, and did not become obligated by the covenant to assume.' A married woman has also been held not to be liable on a covenant to assume mortgages in a deed accepted by her husband without her knowledge or authority." Where a deed was made to a priest, who thereafter, in conformity with the rules of his church, conveyed the property to his bishop, and ' Jackson v. Perkins, 2 Wend. 308 ; Day v. Mooney, 6 T. & C. 382 ; Keller Church V. Oilman, 15 Id. 656 ; Gilbert v. v. Ashfond, 3 Mackey (D. C.) 444. The North Am. Fire Ins. Co., 23 Id. 43 ; *Degermand v. Chamberlin, 22 Hun, Jackson v. Phipps, 12 Johns. 418 ; Van no. Valen v. Schermerhorn, 22 How. 416; * Best v. Brown, 25 Hun, 223 ; Cordis Wilsey v. Dennis, 44 Barb. 354 ; Law- v. Hargrave, 29 N. J. Eq. 446. rence v. Farley, 24 Hun, 293. * Munson v. Dyett, 56 How. 333; Kelly " Jackson v. Richards, 6 Cow. 616. v. Geer, 19 W. Dig. 279 ; Culver v. Bad- ° Jackson v. Perkins, 2 Wend. 308 ; ger, 29 N. J. Eq. 74. §§ 570-571.] THE A.SSTJMING- OF MOETG-AGES. 381 his deed, reciting that the grantee assumed payment of a mortgage, was recorded; and the bishop never saw the deed or took possession of the property, it was held that he was not liable upon the covenant to assume." The presumption that a recorded deed was delivered, is repelled where it appears that the grantee never was in possession and that no claim was ever made under the deed." Where a grantee has authorized another to deal in real estate in his name, he is liable on a covenant to assume contained in a deed ac- cepted by his agent.' § 570. Holding stranger to the deed on covenant contained in it. — Where the person purchasing real estate does so as the agent for another person, but takes the conveyance in his own name, an action on a covenant to assume a mortgage can be maintained against the actual covenantor only, and not against his principal.* And, in such a case, if the action is brought on a covenant made by the agent as such, an election to sue one will exonerate the other ; both cannot be held.' On a like principle, a mortgagee cannot obtain a judgment for de- ficiency against a person not a party to a conveyance of land, on the ground that the grantee, in taking title and assuming the mortgage, acted as a member of a firm for the joint benefit of himself and the defendant, on an agreement to divide profits," or on the ground that the defendant agreed with the grantee to pay a proportionate part of the mortgage.' Where a contract of purchase was made, one of the terms of which was that the purchaser was to assume the mortgage indebtedness, it was held that he was not released from this obligation by procuring the deed to be made to his wife instead of to himself.' § 571. Conveyance subject to mortgage. — There are many rea- sons why a clause may be inserted in a conveyance reciting mortgage ' Gifford V. McCloskey, 38 Hun, 350. ^ Tuthill v. Wilson, 90 N. Y. 423, 428; ' Knoles v. Barnhart, 71 N. Y. 474, Meeker v. Claghorn, 44 N. Y. 351 ; Ad- aifi'g g Hun, 443. dison v. Gaudassequi, 4 Taunt. 574 ; * Schley v. Fryer, 100 N. Y. 71. Curtis v. Williamson, L. R. lo, Q. B. 57. * Tuthill V. Wilson, go N. Y. 423, 426 ; * Williams v. Gillies, 75 N. Y. 197, Briggs V. Partridge, 64 N. Y 357 ; 21 rev'g 13 Hun, 422. Am. R. 617 ; Kiersted v. O. & A. R.R. ' Williams v. Gillies, 28 Hun, 175. Co., 6g N. Y. 345; 25 Am. R. igg; Beck- ' Pike v. Seiter, 15 Hun, 402. ham V. Drake, 9 M. & W. 95. 382 MOETGAGES OF BEAL PEOPEETT. [§ 573. incumbrances upon the property. It may be done for the purpose of quahfying the covenants for title ;' or to impose a primary obliga- tion upon a portion of the mortgaged premises for the payment of the whole or a specific portion of the debt;" or to preclude the grantee from defending against a mortgage on the ground of usury.' But if there is no express contract imposing upon the grantee a per- sonal duty to pay the mortgage debt, he acquires the equity of re- demption merely, and thereafter owes nothing either to his grantor or to the mortgagee, other than not to commit waste, and to sufEer the property to be sold when application is made for that purpose." In all of the cases in this State where a personal liability was im- posed upon the grantee, it was in pursuance of his written or oral contract and agreement.' A class of early cases in the Pennsylvania courts sustained the no- tion that, where a conveyance was made " under and subject " to a certain mortgage " which is part of the consideration," a covenant would be implied, if not to pay the debt to the grantee, at least to indemnify the grantor." But a statute passed in 1878 has provided that the grantee shall not be personally liable unless he shall expressly assume such liability by agreement in writing or condition in the conveyance.' In some States a clause in a Conveyance to the effect that the prem- ises are subject to a mortgage, the amount of which is deducted from or forms part of the purchase money, has been held to import an agreement on the part of the grantee to pay.° § 572. Language importing covenant to assume.— The follow- ing have been held to be expressions importing an agreement to as- sume and pay : " Subject, however, to the assumption as a part of the consideration " of the conveyance, of the mortgage." And again, ' Collins V. Rowe, I Abb. N. Cas. 97. Tolman, 124 Mass. 254; 26 Am. R. 2 Hart V. Wandle, 50 N. Y. 381 ; Cher- 659. ry V. Munro, 2 Barb. Ch. 618 ; Brewer v. ' Moore's Appeal, (Penn.) 19 Alb. L. Staples, 3 Sand. Ch. 579 ; Halsey v. J. 257, and cases cited. Reed, 9 Paige, 446. ' Pamph. L. 205 ; Act of Jan. 12, 1878 ; ' Hartley v. Harrison, 24 N. Y. 170 ; Purdon's Ann. Dig. 1878, p. 2160, Freeman v. Auld, 44 N. Y. 50. §§ 5, 6. * Smith V. Truslow, 84 N. Y. 660 ; ° Held v. Vreeland, 30 N. J. Eq. 591 ; Patton V. Adkins, 4 : Ark. 197. Stevenson v. Black, Saxt. 338 ; Thayer * Dorr V. Peters, 3 Edw. Ch. 132 ; v. Torrey, 37 N. J. L. (8 Vroom) 339 ; Smith V. Truslow, 84 N. Y. 660, 662 ; Tichenor v. Dodd, 3 Green. Ch. 454 ; Stebbins v. Hall, 29 Barb. 524 ; Collins Townsend v. Ward, 27 Conn. 610. V. Rowe, I Abb. N. Cas. 97 ; Fiske v. ' Douglass v. Cross, 56 How. 330. §§ 573-575.] THE ASSUMING OF MOETaAGES. 383 " whicli said mortgage is assumed by the party of the second part, and the amount thereof constitutes part of the consideration of this conveyance and is deducted therefrom." ' So of this, subject to a mortgage, etc., " which the said party of the second part hereby as- sumes and agrees to pay." '^ And where the language used was, " Sub- ject, nevertheless, to a certain mortgage which the party of the first part assumes and agrees to pay as part of the consideration hereinbe- fore expressed," the word first was construed to mean second, and the grantee was held to be bound by the covenant.' The use of the word " assume " imports an agreement to pay." § 573. Language not importing covenant to assume. — The fol- lowing phrases have been held not to place the grantee under an engagement to pay the mortgage : " Subject, nevertheless, to the pay- ment of one-eighth of a certain mortgage now on the premises." ' " Subject to the one-half part of the mortgage." ° " Subject to a specified mortgage, which is part of the above-named consideration." ' Where mortgages covered other land than that conveyed, the lan- guage was : " The above described property is alone to be holden for the payment of both the above debts," and " the above mortgages of $15,000 which are part consideration of this deed." This was held not to impose any personal liability upon the grantee.' The words " under and subject " to a certain mortgage create no personal liability." § 574. Extent of liability. — A covenant to pay a certain mortgage " with interest thereon," binds the grantee for back interest as well as for interest to accrue.'" § 575. Form of action on covenant to assume. — It needs no argument to show that a person claiming the benefits of a bargain ought equitably to bear the burdens which it imposes on him, or, as ' Halsey v. Reed, g Paige, 446. 100 N. Y. 628 ; Fiske v. Tolman, 124 ' Blyer v. MonhoUand, 2 Sand. Ch. Mass. 254 ; 26 Am. R. 659 ; Rapp v. 478. Stoner, 104, 111. 618 ; Walker v. Gold- ' Fairchild v. Lynch, 42 N. Y. Super, smith, 70 Reg. 161. Ct. (10 J. & S.) 265 ; 46 N. Y. Supr. (14 ' Hubbard v. Ensign, 46 Conn 476. J. & S.) I. ° Girard Trust Co. v. Stuart, 86 Penna. * Schley v. Fryer, 100 N. Y. 71. St. 89 ; Moore's Appeal, (Penn.) 19 Alb. * Collins V. Rowe, i Abb. N. Cas. 97 ; L. J. 257. Stebbins v. Hall, 29 Barb. 524. "Smith v. Read, 51 Conn. 10; Sawyer * Murray v. Smith, i Duer, 412. v. Weaver, 2 MacArthur (D. C.) i ; ' Equitable Life Ass. Sy. v. Bostwick, Shanahan v. Perry, 130 Mass. 460. 384 MOETGAGES OF EEAL PEOPEETT. [§§676-577. was said in Rogers v. Eagle Fire Ins. Co. (9 "Wend. 618), that " who- ever takes an estate under a deed ought, in reason and equity, to be obhged to take it under the terms expressed in the deed," but there has been much discussion as to the form of remedy where the evidence of an agreement to assume is contained in a conveyance which is not executed by the grantee. In Connecticut ' and Massachusetts ° as- sumpsit is held to be the proper remedy, while in I^ew Jersey " and in this State* the grantee is held liable as a covenantor. § 576. Action at law by mortgagee on covenant to assume. — The right of a mortgagee to enforce the covenant of a grantee of the mortgagor to assume the mortgage debt in an equitable action to foreclose, and to obtain a judgment for deficiency in such an action, is conceded in some States where the right to maintain an action at law upon such a covenant is denied.' In this State, and in most of the others, a mortgagee can maintain an action at law on such a covenant on the broad ground that it is a promise made to a third person for his benefit.' It is, however, necessary to sustain such an action even upon this theory that the promise was made to a person obhgated to pay the debt.' § 577. Action by grantor against grantee on covenant to as- sume. — As between the grantor and grantee a covenant to assume a mortgage upon property, contained in a conveyance of it, is a covenant of indemnity, and until it is determined that the property upon which the mortgage is a charge is not sufficient to pay the mortgage debt, an action by the grantor against the grantee is inequitable and cannot be 1 Hinsdale v. Humphrey, 15 Conn. 432. ing that assumpsit is the remedy — Raw- So in District of Col. : Willard v. Wood, son's Adm'x v. Copeland, 2 Sandf. Ch. 4 Mackey, 538. 251. " Newell V. Hill, 2 Mete. 180 ; Nugent ' Klapworth v. Dressier, 13 N. J. Eq. V. Riley, i Id. 117; Goodwin v. Gilbert, (2 Beas.) 62 ; Bissell v. Bugbee, 8 Cent, g Mass. 510 ; Locke v. Horner, 131 L. J. 272 ; Meech v. Ensign, 49 Conn. Mass. 93; but see Dorn v. Harrahan, 191 ; 44 Am. R. 225; Bassett v. Brady, loi Mass. 398. 48 Conn. 224. 8 Finlay v. Simpson, 2 N. J. 311. * Burr v. Beers, 24 N. Y. 178 ; Thorp "Atlantic Dock Co. v. Leavitt, 54 N. v. Keokuk Coal Co., 48 N. Y. 253, afiS'g Y. 35 ; Thorp v. The Keokuk Coal Co. , 47 Barb. 439 ; Campbell v. Smith, 71 48 Id. 253; Spaulding v. Hallenbeck, 35 N. Y. 26, affi'g 8 Hun, 6 ; Wormouth v. Id. 204 ; Belmont v. Coman, 22 Id. 438 ; Hatch, 33 Cal. 121 ; Urquhard v. Bray- Trotter V, Hughes, 12 Id. (2 Kern.) 74; ton, 12 R. I. 169 ; Bowen v. Kurtz, 37 Halsey v. Reed, 9 Paige, 446 ; Curtis v. Iowa, 239 ; Cooper v. Foss, 15 Neb. 515. Tyler, Id. 433; King v. Whitely, 10 Id. 'Vrooman v. Turner, 69 N. Y. 280, 465; Binsse v. Paige, i Keyes, 87. Hold- 285. § 578.] THE ASSUMING OF MORTGAGES. 385 maintained.' The liability of the grantee can only be enforced by the grantor after he has been compelled to pay some portion of the mort- gage debt," or after he has paid a judgment obtained against him for a deficiency,' or after he has become subrogated to the rights of the mortgagee by a voluntary payment.* It is not necessary that the grantee shall have been a party to the action to foreclose, if he has parted with his interest in the property so that a title may be made without him ; neither is it necessary for the grantor to give him notice of the proceedings in order to bind him by the deficiency as determined by the sale. The costs of the foreclosure and sale are a necessary expense incurred to apply the land in diminution of the obligation ; and while a grantee, not a party to the foreclosure, incurs no personal liability for them, he is only en- titled to be credited with such portion of the proceeds of the sale as remains after deducting them." Where a mortgage for $794 was made in consideration of $494 in cash, and an oral promise to discharge a previous mortgage for $300, it was held that a grantee of the mortgagor, with warranty as against the $300 mortgage, could not maintain an action to compel such payment.' § 578. Other rights of action. — A grantee under a conveyance purporting to be free of mortgage, may, after payment, maintain an action against his grantor who has assumed the mortgage debt, upon the ground that, as his grantor was personally liable to pay the mortgage debt by virtue of the covenants contained in his deed, he is entitled to be subrogated to the remedy possessed by the mortgagee to charge him or his estate with the payment thereof .J ' Slauson v. Watkins, 86 N. Y. 597 ; v. Folger, 34 Iowa, 71 ; Wilson v. Stil- Ayres v. Dixon, 78 N. Y. 318 ; Miller v. well, 9 Ohio, 467. Winchell, 70 N. Y. 437 ; Burbank v. ' Halsey v. Reed, 9 Paige, 446 ; Don- Gould, 15 Me. 118. In Massachusetts v. Peters, 3 Edw. Ch. 132. and some other States it is held that a ' Comstock v. Drohan, 71 N. Y. g, affi'g grantor has a cause of action against his 8 Hun, 373. grantee who has assumed a mortgage *Ayres v. Dixon, 78 N. Y. 318 ; Mills ' which may be enforced for its full amount v. Watson, i Sweeny, 374 ; Kinnear v. as soon as the mortgage is due, although Lowell, 34 Me. 299 ; Baker v. Terrell, 8 he has not been called upon to pay Minn. 195. any part of it. Furnas v. Durgin, 119 ' Comstock v. Drohan, 71 N. Y. 9, Mass. 500 ; 20 Am. R. 341 ; Locke v. afh'g 8 Hun, 373. Homer, 131 Mass. 93 ; 41 Am. R. 199 ; ° Miller v. Winchell, 70 N. Y. 437. Snyder v. Summers, i Lea (Tenn.) 534; ' Matter of Wilbur v. Warren, 40 Hun, Gregory v. Hartley, 6 Neb. 356 ; Stout 203. 25 386 MOBTGAGES OP EEAL PBOPERTT. [§§ 579-580. The owner of land sold to satisfy a mortgage, may maintain an action to recover damages from a person who had assumed the mort- gage, and whose default in payment has resulted in the loss of the property.' GEOUNDS UPON WHICH THE MORTGAGEE MAT ENFOECB THE AGEEE- MENT TO ASSUME. § 579. The bargain to assume the payment of the mortgage, being made between the mortgagor and his grantee, the mortgagee is a stranger both to it and to its consideration. He is, in respect to it, in privity with neither of the parties to the contract, and yet he was, at an early day, held to be entitled to seize upon its advantages, and to pursue the person assuming the mortgage, and enforce the per- formance of his covenant. The reasons given for granting this rehef have not always been uniform, and the following, which is taken from the examination of the authorities by Rapallo, J., in Garnsey V. Rogers (4T N. Y. 233), will be found to be instructive : "The liability of a grantee who accepts a conveyance, by the terms of which he assumes the payment of an existing mortgage upon the land, to respond directly to the mortgagee for a deficiency, in case of a foreclosure and sale, was first adjudged in this State in the case of Halsey v. Heed (9 Paige, 446). That adjudication was fol- lowed by others." In these eases, the sole ground upon which the liability of the grantee was placed, was that as between the grantor and the grantee, the grantee by such an agreement became the prin- cipal debtor of the mortgage debt, and the grantor stood in the situ- ation of surety for him. That the agreement of the purchaser was given for the indemnity of the vendor, who thus stood in the relation of surety for him, and that the mortgage creditor was entitled to the benefit of such indemnity, upon the principle that where a surety, or person standing in the situation of a surety, for the payment of the debt receives a security for his indemnity, and to discharge such in- debtedness, the principal creditor is in equity entitled to the full ben- efit of that security, though he did not even know of its existence.' § 580. Doctrine of King v. Whitely.— " In King v. Whitel/y (10 Paige, 465), this was declared to be the principle of all the cases in ' Wilcox V. Campbell, 35 Hun, 254. nell v. Prescott, 2 Barb. 16 ; Blyer v. ' Marsh v. Pike, 10 Paige, 597 ; Cor- Monholland, 2 Sandf. Ch. 478. * Curtis V. Tyler, 9 Paige, 432. §§ 581-582.] THE ASSUMING OF MOETGAGBS. 387 which it was held that such a stipulation inured to the benefit of the mortgagee, and consequently it was held in that case, that when the grantor, in whose conveyance such a stipulation was contained, was not himself personally liable for the mortgage debt, the holder of the mortgage acquired no right to resort to the grantee for payment. '' In the case last cited the chancellor distinctly repudiates the idea of any right being acquired by the holder of the mortgage, in case of such an agreement, on the ground that it was a contract made be- tween the grantor and the grantee for the benefit of the mortgagee. And he refers to the older English cases which were cited in support of the doctrine, that if one man makes a promise to another for the benefit of a third, that third person may maintain an action on the promise, and shows that that principle applies only to third persons for whose special benefit the promise was intended, and that they rest upon the ground that the person obtaining the promise, and from whom the consideration proceeded, intended it for the benefit of the third person. § 581. " The case of Russell v. Pistor (Y N. Y. [3 Seld.] 171) recognizes the ground of liability to be that stated by the chancellor, and in the case of Trotter v. Hughes (12 N. T. [2 Kern.J 74) the doctrine of Kmg v. Whitely was adopted, and it was accordingly held that although accepting a deed containing such a stipulation, from a party personally liable to pay the mortgage, rendered the grantee liable to the mortgagee, yet the assumption of the mortgage, in a deed from a party not liable to pay it, did not make the grantee lia- ble, inasmuch as the only ground of liability was that of equitable subrogation of the creditor to all securities held by the surety of the principal debtor, and the grantor, who was not personally hable for the mortgage debt, did not stand in the situation of surety. § 582. Burr v. Beers. — " Such was, in all the cases upon the sub- ject, recognized as the sole ground of liability until the case of JBurr v^ Beers (24 IST. Y. 178), which was an action at law, in which the mort- gagee had recovered a personal judgment for the mortgage debt against a grantee, who had accepted a deed containing the usual clause whereby he assumed the payment of a mortgage which was a lien upon the premises. Denio, J., in delivering the opinion of the court, after referring to the previous cases on the subject, agrees that they do not proceed upon the notion of a contract between the owner of the equity of redemption and holder of the mortgage, but upon the 388 MOKTGAGES OP EEAL PEOPERTT. [§ 583. principle that the undertaking of the grantee to pay ofE the incum- brance is a collateral security obtained by the mortgagor, which in- ures, by an equitable subrogation, to the benefit of the mortgagee, and that the judgment under review could not be sustained on the doctrine of those cases, the action not being for a foreclosure of the mortgage, and the mortgagor not being a party. But, upon the au- thority of Lawrence v. Fox (20 JST. T. 268}, the judgment was sus- tained on the broad principle that if one person makes a promise to another for the benefit of a third person, that third person may main- tain an action on the promise." § 583. Covenant to assume contained in mortgage. — In Oa/rnsey v. Rogers (4Y I^. Y. 233), from the opinion in which the foregoing examination of authorities is taken, a conveyance of the mortgaged property, absolute in its form, had been made by the mort- gagor, but it was accompanied by an agreement for redemption by which it was shown that the whole transaction was intended as a secu- rity, and was therefore a mortgage, and nothing more. The convey- ance contained a clause to the effect that the grantee thereby assumed payment of prior mortgages. Previous to the commencement of the foreclosure of the prior mortgages, the grantee reconveyed the prem- ises to the mortgagor by a deed in which the mortgagor covenanted to reassume and pay the mortgages. The question then arose, upon these facts, as to whether the person who had for a time held the land as security for a debt, under a conveyance which was really a mortgage, could be held personally upon a covenant to pay prior in- cumbrances after the force and validity of the mortgage containing the covenant to assume had been destroyed by redemption and pay- ment of the debt which it w^s given to secure. The grantee holding as security could not be held under the principle of the earlier cases, for if any relation of principal and surety existed, the mortgagor was the principal debtor, and was the person who would ultimately be obligated to pay the debts secured by the prior liens. Even if the agreement contained in the instrument were binding, it would only be so as a bargain by a junior mortgagee, to advance money to pay the debt of his grantor or mortgagor, which money, when advanced, he could collect under his mortgage.' It was also held that the grantee could not be held on the principle of Burr v. Beers (24 N. Y. ' Western Ins. Co. v. The Eagle Fire Ins. Co., i Paige, 284. §§584r-585.] THE ASSUMING OF MORTGAGES. 389 178), because the contract was not made far the henefit of the holders of the prior incumbrance. § 584. In Ricard v. Sanderson (41 N. Y. 179), the facts were not materially different from those in Ga/rnsey v. Rogers {swprd), ex- cept that the conveyance containing the agreement to assume had not been cancelled by payment of the debt which it was intended to secure ; and the grantee, though he held only the rights of a mort- gagee, was nominally the holder of the title at the time of the fore- closure of the prior incumbrance. In this case the court held the grantee liable for deficiency. There are other grounds of distinction suggested by Kapallo, J., which were based upon doubts as to the facts in Rica/rd v. Sa/iiderson, the report of which is rather meagre, but the main difference is the one already pointed out. The principle which controls the two decisions seems to be, that an agreement made by a mortgagee as part of the inducement upon which he obtains the security, to protect the estate from being sacrificed under previous hens, may be valid, but that such an agreement is, in its nature, a part of the security, and is destroyed by redemption. It was said by Eapallo, J. :' " A stipulation by a mortgagee in possession to keep down prior mortgages, taxes, etc., might perhaps be enforced by the mortgagor. But when the mortgage is cancelled, and the mort- gagor is restored to the enjoyment of the property, such stipulations are extinguished with the mortgage." It will be noticed that in the later cases this distinction does not appear to have been deemed con- trolling." § 585. In Pardee v. Treat (18 Hun, 298),= a debtor in faihng circumstances conveyed lands to certain creditors, the deed providing " that this conveyance is made subject to the mortgages, judgment and taxes, which are now a lien upon said premises, and which the said parties of the second part hereby assume and agree to pay as part of the consideration hereinbefore named." The expressed considera- tion was $54,689, which was supposed to be the exact amount of the incumbrances and the grantees' claim, and the grantees thereupon gave to the wife of the grantor a writing, by which they agreed to convey said property to her on her paying them the said sum of $54,689 by a day named, which she therein agreed to do, and by ' 47 N. Y. 243. ^ ■ Pardee v. Treat, 82 N. Y. 385 ; Root v. Wright, 84 N. Y. 72. 5 Reversed 82 N. Y. 385. 390 MOETGAGES OP REAL PROPEKTT. [§ 586. which, also, they agreed she should have immediate possession. The action was brought by a judgment creditor to compel payment of his judgment upon the covenant in the deed, and it was urged in defense that the whole transaction constituted a mortgage, and the defendants were not hable, under the doctrine of Gamsey v. Rogers. The de- fendants were held liable at the General Term, and the case was sought to be distinguished from Gamsey v. Sogers in the fact that in that case the grantor might have reacquired the title to his prop- erty by paying the debt which the deed was made to secure, while in Pardee v. Treat the agreement of defeasance required payment as well of all other incumbrances. Another point of difference was thought to exist in the fact that in Garnsey v. Sogers the grantor had redeemed in pursuance of the condition of the defeasance before the suit was commenced. The Court of Appeals, however, reversed this ruling and held that the grantee was not bound by the covenant.' Judge Andkews, in giving the opinion of the court, remarks : " We think the true result of the decisions upon the effect of an as- sumption clause in a deed is, that it can only be enforced by a lienor, where in equity the debt of the grantor, secured by the lien, becomes, by the agreement between him and his grantee, who assumes the payment, the debt of the latter. On the other hand, if the assump- tion is in aid of the grantor, upon the security of the land, and not as between them, a substitution of the liability of the grantee for that of the grantor, or in other words, if, in equity as in law, the grantor remains the principal debtor, then the assumption clause is a contract between the parties to the deed alone, and the liability of the grantee for any breach of the obligation is to the grantor only. Where the grantee is in equity bound to pay the debt as his own, Ihen the covenant, according to the case of Burr v. Beers (24 N. T. 1Y8), may be treated as a promise made for the benefit of the henor, and may be enforced in a legal action, although, even in that case, it would seem that the primary object of the covenant is to protect the grantor against his personal liability for the debt secured upon the land."^ § 586. In Root v. Wright (84 'E. Y. 72), an absolute conveyance was executed and dehvered containing a covenant to assume a mort- gage. It was in dispute as to whether the deed was given as security ' Pardee v. Treat, 82 N. Y. 385. « Id. 385, 389, reversing s. c. 18 Hun, 298. § 587.] THE ASSTJMINa OF MOETGAGES. 391 merely, or was an absolute conveyance, and no reconveyance or re- demption had been had before the commencement of the action, which was brought to foreclose the mortgage and enforce the liability of the grantee. It was held that the grantee would not be liable if the conveyance were intended simply as a mortgage. If it was in- tended as a security merely, the covenant to assume and pay the plaintiff's mortgage was in effect an agreement between the mort- gagor and the defendant that the latter should advance the amount of the prior lien upon the security of the land, and gave no right of action to the plaintiff, who was neither a party to the contract nor the person for whose benefit it was made.' § 587. The rule in Garnsey v. Rogers has no application where the relation of debtor and creditor does not exist between the grantor and grantee. In Camjpbell v. Smith (71 JST. T. 26, affi'g s. c. 8 Hun, 6), one Burtis had purchased mortgaged real estate, received a deed from his grantor, which recited that the amount of the mortgage was deducted from the purchase price and the conveyance was sub- ject thereto ; and contained a covenant on the part of the grantee to pay the same. The name of the grantee was left blank and Burtis was authorized to insert the name of any person as grantee. Burtis thereafter, being indebted to the firm of which defendant was a mem- ber, agreed with the latter that he would insert his name in the deed, and that any profits arising from a sale or o,ther disposition of the premises should be applied upon said indebtedness. Burtis thereupon inserted defendant's name as grantee in the deed, and had the same recorded with defendant's knowledge and consent. The mortgage was foreclosed without making defendant a party, and the action was afterward brought to recover the amount of the deficiency. It was held that, as between the grantor and the grantee in the deed, the conveyance was absolute and unconditional. The defend- ant thereby acquired all the rights of a purchaser, and a part of the consideration for obtaining such rights was his covenant to pay the mortgage. The transaction with Burtis was collateral to the deed and affected only the parties to it, and the defendant was adjudged liable to pay. Where a purchase-money mortgage contained a stipulation that it should be " null and void " unless a certain other mortgage already given by the vendor upon the same property should be discharged, it ' Root V. Wright, 84 N, Y. 78, reversing s, c, 31 Hun, 344, 392 MORTGAGES OP EEAL PEOPEKTY. [§§ 588-589. was held that the provision was for the benefit of the vendees who gave the purchase-money mortgage, and if they did not insist upon it, the mortgagee in the prior mortgage could not.' EFFECT OF THE AGEEEMENT WHERE THE GEANTOE IS NOT OBLIGATED TO PAY THE DEBT. § 588. When the courts abandoned the reasoning of the earlier cases, under which the right of a mortgagee to pursue a per- son who had assumed the payment of a mortgage was placed exclu- sively upon the equitable doctrine of the right of a creditor to seize hold of the securities obtained by a surety, and when they rested their decisions upon the broader ground of the legal obligation of a promise made by one person for the benefit of a third, party, it is not strange that the earlier decisions were doubted. § 589. In Thorp v. The Keokuk Coal Co. (48 JST. T. 253), it was specially agreed by the mortgagor in the bond secured by the mortgage, that recourse should first be had to the mortgaged prem- ises, and that he should be liable only for any deficiency that might remain after a foreclosure and sale. Subsequently to the execution of this bond and mortgage, the mortgagor sold and conveyed the mortgaged premises, and the purchaser, in and by the deed to him, assumed the payment of the mortgage. The mortgagee never re- sorted to his rights under the mortgage by foreclosure and .sale, for the reason probably that the title was defective, but he brought an action against the purchaser on his covenant. It had been held in King v. Whitely (10 Paige, 465), and in other cases which followed," that a purchaser from a person not bound for the payment of a mort- gage, could not be held on an agreement to assume, because the grantor was not, in such a case, a surety, and the mortgage creditor could not take advantage of the bargains made by him. It was rea- soned that since, if the grantee of a person not bound, would not be bound at all, therefore the grantee of a person bound conditionally would also be bound only conditionally. But the Commission of Appeals took a different view, and as it was said by Eael, C. :' " It matters not that the mortgagor was not liable to pay personally until after foreclosure, and that he was then liable only for deficiency. It ' Pool V. Horton, 45 Mich. 404. ' Thorp v. Keokuk Coal Co., 48 N. Y. " Trotter v. Hughes, 12 N. Y. (2 Kern,) 253, 257. 74 ; Ford v. David, 1 Bosw. 569. §§ 590-592. J THE ASSUMIira OF MOETGAGES. 393 would have made no difiference if he had not been liable at all, the defendant having promised upon a sufficient consideration to pay the debt." § 590. Rule as settled. — After some little confusion and contro- versy, it is now settled that a grantee is not bound upon a covenant to assume unless the grantor is bound, and that a promise to pay a mortgage debt cannot be enforced by a mortgagee unless made to a person who is obligated for its payment.' The same rule prevails in New Jersey.' (>) EELATIONS BETWEEN PARTIES AFTEE AGREEMENT TO ASSTJME. § 591. Mortgagor becomes surety after his grantee assumes. — As between the mortgagor and the person who has received the mortgaged estate from him under a promise to pay the mortgage debt, the purchaser is, upon the plainest principles of justice, the pri mary debtor. The land stands as the fund out of which the debt should, in the first instance, be satisfied ;" but if that be insufiicient, it will rest upon the purchaser of the land to redeem the promise made by him on acquiring the estate, and to save the mortgagor harmless as against the debt. The land is the security both of the mortgagor and of his grantee as against their respective covenants, but the debt is that of the grantee, and the mortgagor stands merely as his surety.* § 592. Results of mortgagor's rights as surety. — ^Under these circumstances the mortgagor may be released by the mortgagee with- out in any way impairing the mortgage security, or the mortgagor may acquire the mortgage debt by assignment, and may enforce it both as against the land and as against his grantee.' But, on the other hand, if the mortgage be assigned to the person who has as- ' Vrooman v. Turner, 69 N. Y. 280 ; ' Sinking Fund Com'rs v. Peters, 32 25 Am..R. 195, rev'g 8 Hun, 78 ; Thayer N. J. Eq. 113. V. Marsh, 75 N. Y. 340, rev'g 11 Hun, * Rubens v. Prindle, 44 Barb. 336; 501 ; Carter v. Holahan, 92 N. Y. 498 ; Tripp v. Vincent, 3 Barb. Ch. 613 ; Ju- Simson v. Brown, 68 N. Y. 355 ; Mun- mel v. Jumel, 7 Paige, 591 ; Halsey v. son V. Dyett, 56 How. 333 ; Cashman v. Reed, 9 Id. 446 ; Marsh v. Pike, 10 Id. Henry, 5 Abb. N. C. 230 ; Smith v. 595 ; Cornell v. Prescott, 2 Barb. 16 ; Cross, 16 Hun, 487 ; contra, Merriman Blyer v. Monholland, 2 Sandf. Ch 478 ; V. Moore, 90 Pa. St. 78 ; Dean v. Walker Ferris v. Crawford, 2 Den. 595 ; Wales (111.), 28 Alb. L. J. 302 ; Meech v. En- v. Sherwood, 52 How. 413 ; Comstock sign, 49 Conn. 191 ; 26 Am. Rep. 660, v. Drohan, 71 N. Y. 9, affi'g s. c. 8 Hun, note ; Birke v. Abbott, 103 Ind. i. 373 ; Bowne v. Lynde, 91 N. Y. 92 ; ' Wise V. Fuller, 29 N. J. Eq. 257 ; Smith v. Ostermeyer, 68 Ind. 432. Norwood V. De Hart, 30 Id. 412. ' Bentley v.Vanderheyden,35 N.Y. 677. 394 MOETaAGES OF REAL PEOPEETT. [§ 593. sumed it, he being the person equitably chargeable with its payment, it thereupon becomes satisfied, and cannot thereafter be enforced, even in the hands of a hona fide purchaser.* So, where the mortgagor conveys only a part of the mortgaged estate, and the purchaser retains • enough of the purchase money to satisfy the entire mortgage, and agrees to pay it, the same rule prevails, and an assignment of the mortgage to such purchaser will operate as a payment and discharge." A release of the purchaser who has assumed the mortgage debt will discharge the mortgagor.' The principle that the person purchasing the land and assuming the mortgage debt, becomes the primary debtor, and the mortgagor his surety, will operate to release the mortgagor if, without his con- sent, the owner of the land and the owner of the mortgage agree to vary the terms of the security by cancelling any right of the debtor which may be regarded as of any value to him, as by striking out a clause which permits the mortgagee to demand a release of part of the land on paying a proportionate amount of the debt.* The mortgagor whose grantee has covenanted to discharge the mortgage debt, may also seek the aid of a court of equity to compel a sale of the land in satisfaction of the demand, and to procure a per- sonal judgment on the covenant for any deficiency ;° but this can only be done after request made of the grantee that he pay the debt, and of the mortgagee to permit a foreclosure in his name.' The effect upon the personal liability of the mortgagor of an ex- tension of time to his grantee, is considered in a previous chapter of this work.' § 593. Mortgagor not relieved by covenant of his grantee. — The liability of the original mortgagor to the mortgagee is not, in the absence of a release by the mortgagee, or some inequitable act of the mortgagee which operates as a release, in any degree impaired by the fact that a grantee of the mortgagor has assumed the mortgage.' ' Kellogg V. Ames, 41 Barb. 218 ; Ely "Per Danforth, J., in Slauson v. V. McNight, 30 How. 97. Watkins, 86 N. Y. 597, 602. « Russell V. Pistor, 7 N.Y. (3 Seld.) 171. ' See ante, g 216. ' Knoblock v. Zochwetzke, i N. Y, St. ' Mechanics' Savings Bank v. Goff, 13 Reptr. 238. R. I. 516 ; Conn. Mut. L. Ins. Co. v. * Paine v. Jones, 14 Hun, 577. Tyler, 8 Bissell, (U. S. Circuit) 369 ; ' Marsh v. Pike, 10 Paige, 595 ; I Kelso v. Fleming, 104 Ind. 180 ; Davis Sand. Ch. 210 ; Cornell v. Prescott, 2 v. Hardy, 76 Ind. 272. Barb. 16 ; Abell v. Coons, 7 Cal. 105. § 594.J THE ASSUMING OP MOETGAGES. 395 Although the mortgagor may, by conveying to a third person and taking his covenant of indemnity, acquire some of the rights of a surety, the actual relation of debtor and creditor between the mort- gagor and mortgagee cannot be destroyed by any act of the mortgagor alone, where the mortgage is given to secure the bond of the mort- gagor. The courts have gone no further than to hold that, in such cases, the relation of creditor and of principal debtor is so far affected that the mortgagee is bound, after notice of the equitable rights of the mortgagor, as between himself and his vendee, to respect them, and do no act to their prejudice ; and when he forecloses, the equities of the mortgagee will be protected in the order of sale. But the mortgagee may sue upon the bond in the first instance, notwithstand- ing the transfer of the land. In Marsh v. Pike (10 Paige, 595), it was held that where a vendee of the mortgaged premises had assumed the payment of the mortgage, the mortgagor could not compel his creditor to foreclose, where there was no good reason why he did not pay his bond according to his agreement, and take an assignment of the bond and mortgage, and proceed against the land and the subse- quent grantees thereof, for his indemnity ; but that he could proceed in equity to compel such grantees, as to whom he stood in the situa- tion of a mere surety, to discharge the debt for his protection.' § 594. The mortgagor may protect himself from depreciation in value of the property arising from decay, the accumulation of taxes, or other causes, by requesting the mortgagee to enforce his security.'' But this request may be answered by bringing an action on the bond, and it is, to say the least, doubtful whether the mort- gagor thus situated has any remedy except to protect himself by watching the security ; and if he finds that it is becoming impaired by lapse of time and the accumulation of interest and taxes, to take the steps pointed out in Ma/rsh v. Pihe (supra). It is very clear, however, that, in the absence of notice of any change in the position of the mortgagor, and of any request to foreclose, a mortgagee out of possession may rely upon the personal liability of his debtor, and is not bound to look after or protect the mortgaged premises ; and that if he forecloses the mortgage, the debtor is entitled to credit only for ' See remarks of Rapallo, J., in Mar- 557 ; Russell v. Weinberg, 4 Abb. N. C. shall V. Davies,. 78 N. Y. 414 ; Young v. 139; s. c. 16 Alb. L. J. 164 ; Colgrove v. Hawkins, 74 Ala. 371. Tallman, 67 N. Y. 95 ; Clark v. Sickler, " Remsen v. Beekman, 25 N. Y. 552, 64 N. Y. 231. See ante, §§ 221 to 227. 396 MORTGAGES OP EEAL PEOPEETT. [§§ 595-596. the net proceeds of sale realized by Ms creditor, after the deduction of all liens for taxes, etc., and remains liable for the deficiency.' A mortgagee out of possession, in the absence of any notice of a change in the position of the mortgagor and of any request to fore- close, may rely upon the personal liability of his debtor, and is not bound to look after or protect the mortgaged premises. The debtor is entitled to credit only for the net proceeds of the mortgaged prem- ises after deducting all liens for taxes, etc., and is liable for any de- ficiency, notwithstanding the fact that his grantee had assumed the payment of the debt and the mortgagor had not been diligent in en- forcing his mortgage.^ DEFENSES TO ACTIONS ON COVENANTS TO ASSUME MOETGAGES. § 595. Mortgagee cannot enforce a void covenant. — There is no theory under which the holder of a mortgage can compel the purchaser of the mortgaged estate to respond personally for the pay- ment of the mortgage debt unless such purchaser has made a binding agreement to do so. When a covenant to assume is inserted in a conveyance from the mortgagor, the mortgagee cannot enforce it un-^ less the mortgagor could do so, since they must both claim under the same contract, and any defense which would be proper as between the parties to the deed, would also be proper in an action brought by the mortgagee." § 596, In all cases it is quite material to show that the grantee has really assumed the mortgage and promised to pay it. The mere fact that a conveyance of land is made subject to an outstanding mortgage, creates no personal Uability on the part of the purchaser to pay it,' and the reciting and describing of the mortgage in the con- veyance raises no presumption of a promise to pay, since a descrip- tion of the mortgage may very properly be inserted to qualify the covenants as to title.' The law does not raise such an obligation where none is in terms expressed, but, on the other hand, precise and ' Per Rapallo, J., in Marshall v. 559 ; Fairchild v. Lynch, 42 Super. Ct. Davies, 78 N. Y. 414, 422, rev'g 16 Hun, (10 J. & S.) 265. 606 ; Mutual Life v. Davis, 44 Super. Ct. * Minor v. Terry, 6 How. 208 ; s. c. i 173; Fleischauer v.Doellner,6o How. 438. Code R. N. S. 384 ; Murray v. Smith, i 2 Marshall v. Davies, 78 N. Y. 414, Duer, 412 ; Tillotson v. Boyd, 4 Sand, rev'g 16 Hun, 606. 516 ; Binsse v. Paige, i Keyes, 87 ; Bel- "Flagg v. Munger, 9 N. Y. (5 Seld.) mont v. Coman, 22 N. Y. 438 ; Collins 483 ; Judson v. Dada, 79 N. Y. 373. v. Rowe, i Abb. N. Cas. 97, and note at ■*Hamill v. Gillespie, 48 N. Y. 556, p. 98. §§ 597-598.] THE ASSUMING OF MOBTGAGES. 397 formal words are tmnecessary, and any language in tte deed which imports a promise on the part of the grantee to pay the debt, wiU be sufficient to hold him. " As in all other cases of contract, the inquiry ' is, "What was the intention of the parties ? " ' § 597. The same defenses also exist against such covenants as a,gainst other promises. Thus, where an administrator of an intestate who had assumed payment of a mortgage caused the usual publica- tion of notice for proof of debts to be made, and, on failure to receive any notice of claim for the mortgage debt, distributed the personal estate, it was held that this was proper and that the administrator was not liable to any decree for deficiency.* § 598. Covenant to assume inserted by fraud or mistake. — The assuming clause contained in a conveyance is evidence of an agreement, but it is no more conclusive than other contracts which are put into writing and executed by parties under their seals. It may therefore be set aside for fraud, or corrected because it was inserted by mistake and does not express the real agreement of the parties. When the agreement is sought to be enforced in an action to foreclose the mortgage, it is proper to raise the question of fraud or mistake in defense. It was alleged in Rica/rd v. Sanderson (41 IS". Y. 1T9), that the agreement on the part of the grantee was inserted in the deed by mistake, and although the plaintiff succeeded, there is no intimation that the defense was an improper one. In Kilmer v. Smith (TT N. Y. 226), a contract of purchase was executed which did not contemplate any stipulation to assume the mortgage liens. In the deed which was tendered by the grantor, and received and accepted by the grantee, without inspection, was a cov- enant on the part of the grantee to pay the mortgage debts. The action was brought to have this clause stricken from the deed, which relief was granted. In affirming the judgment the court placed its decision upon the ground that inserting the covenant constituted a fraud. Numerous other cases also sustain the rule that a mortgagee can have no advantage from a covenant which is invalid between the parties to the deed because inserted by fraud or mistake." ' Per COMSTOCK, Ch. J., in Belmont V. 'Albany City Savings Institution v. Coman, 22 N. Y. 438, 439; Rawson, Burdick, 87 N. Y. 40,, rev'g'26Hun, 104; Adm'x, V. Copland, 2 Sand. Ch. 251. Dey Ermand v. Chamberlain, 88 N. Y. « Mutual Benefit Life Ins. Co. v. 658 ; Smith v. Truslow, 84 N. Y. 660 ; Howell, 32 N. J. Eq. 146. Trustees of Northern Dispensatory of 398 MOETGAGES OF EEAL PBOPEBTT. [§§ 599-600. The fact that the covenant in the deed importing an agreement to assume is inserted in an unusual part of the instrument has been thought to be material to the question as to whether it was so inserted with the knowledge or approval of the grantee.' If the deed comes from the possession of the grantee, containing the agreement to assume the mortgage, this throws upon him the burden of proving that the clause was interpolated and that he did not, in fact, agree to pay the mortgage.' An innocent purchaser for value before maturity of the mortgage and the indebtedness secured by it, has a right to rely upon a recital in a deed from the mortgagor to his grantee by which the latter assumes and agrees to pay " the mortgage incumbrance, although such recital was in fact inserted by mistake and without the knowl- edge of the parties. ° § 599. Failure of consideration for covenant. — ^Where a deed containing a covenant to assume a mortgage was set aside for fraud, and it was contended on the part of the grantee that such a judgment would leave him liable to the mortgagee, it was stated by the court that no such result would follow. The judgment declaring that there was no effectual contract, and therefore no valid assumption of the mortgage, would bind both parties and privies ; and the mortgagee, who had no right except through the promise to the mortgagor and dependent wholly upon it, and could only claim through it, would be bound, if .not by the judgment, at least by the effect of the judgment in annulling the whole transaction.* Upon a like principle, where a purchaser who had assumed a mortgage was ejected by a title para- mount to that of his grantor, it was held that the judgment in eject- ment determined that no title passed by the deed, that the land was not transferred, and, as a consequence, that no consideration for his promise to the grantor remained, and so he never became liable.' § 600. Eviction by paramount title. — A failure of title in the grantor will not be sufficient to constitute a defense to the grantee N. Y. V. Merriam, 59 How. 226 ; Real ' Hayden v. Snow, 9 Biss. (U. S. Cir- Estate Trust Co. v. Balch, 45 Super. Ct. cuit) 511. (13 J. & S.) 528 ; Parker v. Jeaks, 36 N. •• Per Finch, J., in Crowe v. Lewin, J. Eq. 398 ; Randolph v. Wilson, 38 N. 95 N. Y. 423, 427. J. Eq. 28. ' Dunning v. Leavitt, 85 N. Y. 30 ; 39 ' Bull V. Titsworth, 29 N. J. Eq. 73 ; Am. R. 617, rev'g s. c. sub nam. Dun- Culver V. Badger, Id. 74. ning v. Fisher, 20 Hun, 178. 2 Blyer v . MonhoUand, 2 Sandf . Ch. 478. § 601. J THE ASSUMING OF M0ETGAGE8. 399 when sued by a mortgagee on a covenant to assume and pay a mortgage unless it can be shown that the grantee has been honestly and without collusion evicted from the land by a paramount title.' This principle is analogous to that which holds a purchaser of land for, the full purchase money, notwithstanding the title may be incum- bered, unless the purchaser has been evicted or has discharged the incumbrance.' Upon eviction under paramount title the consideration for a cov- enant to assume wholly fails, and covenants of title in the deed of the grantor cannot be regarded as a consideration for such a covenant." A decree of foreclosure and sale amounts to an eviction in equity ; and so, where a grantor conveyed with warranty and a covenant for quiet enjoyment, and there was a mortgage on the property which was afterward foreclosed, it was held that the grantee could recover in assumpsit the money paid in discharging the mortgage.' Where a conveyance recited an agreement to assume a mortgage, but omitted to describe the property intended to be conveyed, it was held that an action by the mortgagee to reform the conveyance could not be sustained, and no personal judgment could be obtained against the grantee on the covenant. ° § 601. Grantor may release from covenant to assume. — ^It has been questioned as to whether, after a conveyance has been exe- cuted and delivered, in which the grantee assumes payment of the mortgage debt, the grantor may release the grantee from the personal obligation which he thus takes upon himself. In Ha/rtley v. Har- rison (24 N. Y. lYO), land which was incumbered by three mort- gages, two of which had been executed upon a usurious consideration for a loan of money, was conveyed subject to said mortgages, and the grantee also assumed and agreed to pay them. An action was commenced to foreclose these mortgages, in which the defense of usury was interposed. After issue was joined in the cause, the ■ Dunning v. Fisher, 20 Hun, 178, rev'g 20 Hun, 178 ; Knapp v. Lee, 3 rev'd 85 N. Y. 30 on another point. Pick. 452 ; Rice v. Goddard, 14 Id. 293 ; ^ York V. Allen, 30 N. Y. 104 ; Curtis Trask v. Vinson, 20 Id. 105 ; Tallmadge V. Bush, 39 Barb. 661 ; Sandford v. v. Wallis, 25 Wend. 117. Travers, 7 Bosw. 498; Buinpus v. Plat- * Hunt v. Amidon, 4 Hill, 345; 40 ner, I Johns. Ch. 218 ; Abbott v. Allen, Am: Dec. 283 ; Cowdrey v. Coit, 44 N. 2 Id. 5tg; Gouverneur v. Elmendorf, 5 Y. 382. Id. 79 ; Grant v. Tallman, 20 N. Y. 191. ' Talbot v. Berkshire Co., 80 Ind. " Dunning v. Leavitt, 85 N. V. 30, 34, 434. 400 MOETGAGES OF EEAL PEOPEETY. [§ 602. grantor and grantee exchanged releases to each other of the cove- nants made by thena respectively, and also covenanted that the agree- ment contained in the deed in respect to the mortgages was annulled, and that such conveyance should have the same ejBEect as if such agree- ment was not contained therein. It was held both at the General Term and in the Court of Appeals that this release did not operate to allow the defendants to interpose the defense of usury and thereby relieve the land from the liens of the mortgages. The General Term also held that the release was effectual to discharge the defendant from his covenant to assume, but the Court of Appeals expressly dis- claimed any intention^ to pass upon this question. Mason, J., con- tended that the liability when once created could not be released by any one except the mortgagee, and Comstock, Ch. J., in a dissenting opinion took the opposite view. In Stephens v. CasbacTcer (8 Hun, 116), the same question was pre- sented, and the General Term of the Fourth Department affirmed the right of the grantor to release his grantee from his agreement so far as his personal liability was concerned.' In D&vUn V. Mv/rphy (56 How. 326 ; s. c. 5 Abb. N. Cas. 242), a release executed by the grantor in pursuance of an agreement con- temporaneous with the giving of the deed containing the covenant to assume, was held to be sufficient." § 602. Grantor may not release. — In Douglas v. WeUs (18 Hun, 88), it was held by a divided court in the Third Department, in the face of the above decisions, that where the grantee by an absolute conveyance of land assumes and agrees to pay a mortgage thereon given by his grantor, an absolute and irrevocable obligation is thereby created in favor of the mortgagee which cannot be affected by any act or agreement of the mortgagor and grantor to which the mort- gagee does not assent. A similar doctrine was also held in Whiting V. Oearty (14 Hun, 498), by a divided court in the First Depart- ment, and by the Superior Court at Special Term, in Bcmney v. McMuUen (5 Abb. K. Cas. 246).' ' Similar rule applied, O'Neil v. Clark, ' Same rule applied, Ellis v. Johnson, 33 N. J. Eq. 444 ; Laing's Ex'r v. Byrne, Trustee, 96 Ind. 377; Bassett v. Bradley, 34 N. J. Eq. 52 ; Carnahan v. Tousey, 48 Conn. 224 ; Bay v. Williams, 112 111. 93 Ind. 561 ; Berkshire Life Ins. Co. v. gi ; 54 Am. R. 209. See also as to this Hutchings, 160 Ind. 496. controversy, Simson v. Brown, 6 Hun, 5 See also Judson v. Dada, 79 N. Y. 251 ; Kelly v. Roberts, 40 N. Y. 432 ; 373 ; Flagg V. Hunger, g N. Y. 583 ; Durham v. Bischoff, 47 Ind. 211. Gaffney v. Hicks, 124 Mass. 301. §§ 603-604. J THE ASSUMING OF MORTGAGES, 401 § 603. Either side of this discussion may have plausible reasons urged in its support. On the one hand it is argued that it is difficult to see on what principle, if the grantor and the grantee were competent to make such a contract, they were not likewise competent to change or rescind the same, and in reply it may be said that it is a curious prop- osition that after a cause of action has once been created in favor of one person, it may be released and discharged by another. § 604. Rule in New Jersey as to release of covenant. — In New Jersey it is held that an agreement to assume and pay a mort- gage contained in a deed is cancelled by a reconveyance in which the original grantor again assumed the debt.* It is there determined that a stipulation in a deed of conveyance inter jpa/rtes that the grantee shall assume and pay a mortgage on the premises, is a contract with the grantor simply for his indemnity and not a contract with the mortgagee ; that the right of a mortgagee to a decree for the defi- ciency against a purchaser who has assumed the mortgage does not arise from any vested right in the mortgagee, by virtue of the stipu- lation of the grantee with the grantor, but that it rests merely on the doctrine of the courts of equity that a creditor is entitled to any secu- rity remaining in the hands of one who stands in the position of a surety for the debt, and that he may proceed directly against the person ultimately liable in order to avoid circuity of action ; and that the liabihty of the purchaser to the grantor having been extinguished by the reconveyance, the purchaser does not remain liable to the mort- gagee. The contract of indemnity having been extinguished without fraud by the parties to it, the mortgagee is adjudged not to be en- titled to a decree for deficiency founded upon it. So, in the same State, a hona fide release of an assumption of a mortgage verbally agreed upon between the mortgagor and his grantee, has been held to be sufficient to discharge the grantee from his per- sonal liability, even though this was done after the commencement of a suit to foreclose the mortgage, the parties to the release not having knowledge of the existence of such suit and the consideration for the release being paid.'' And where before the mortgage fell due the purchaser reconveyed to the mortgagor, who by his deed assumed the mortgage, the holder of the mortgage having become the owner of it 1 Laing v. Byrne, 34 N. J. Eq. 52 ; Young v. Trustees for the Support of Crowell V. Currier, 27 Id. 152 ; Crowell Public Schools, 31 Id. 290. V. Hospital of St. Barnabas, Id. 650 ; ^ O'Neil v. Clark, 33 N. J. Eq. 444. 26 402 MORTGAGES OF REAL PEOPEKTT. [§ 604. before the covenant of assumption, without reliance upon it as part of his security, and his conduct not ' appearing to have been in the shghtest degree influenced by it, this was held to operate as a release of the purchaser's liability under his covenant of assumption.' But a release of a grantee's assumption of a mortgage debt given by an insolvent grantor after notice of foreclosure without considera- tion, and for the sole and admitted purpose of defeating the mort- gagee's claim for deficiency, is void in equity." 'Crowill V. Currier, 27 N. J. Eq. '^ Trustees, etc., v. Anderson, 30 N. J. 98. Eq. 366. CHAPTER XVI. MAEEIED WOMEN. POWER OF MARRIED WOMEN TO MORT- GAGE THEIR LANDS. §605. At common law. 606. The usages and laws of the colony. 607. By Laws of 1849, c. 375. 608. Mortgages by married women. 609. Mortgages from husband to wife. 610. Rights as surety. LIABILITY OF MARRIED WOMEN FOR DE- FICIENCY UPON FORECLOSURE. 611. Various interesting questions. 612. Where services are rendered. 613. Before act of i860. 614. Carrying on trade or business. 615. Statute of i860. § 616. Benefit of separate estate. 617. Burden of proof. 618. Statute of 1862. 619. Statute of 1884. RIGHT OF DOWER IN THE EQUITY OF REDEMPTION. 620. Dower allowed. 621. No dower as against purchase- money mortgage. 622. Dower in surplus after foreclosure. 623. The value of a widow's dower. 624. Right of dowress to redeem. 625. As against all persons except the mortgagee. 626. Barring right of dower. 627. Costs. POWEE OF MAEEIED WOMEN TO MOETGAGE THEIE LANDS. § 605. At common law. — A married woman had, at common law, no capacity to make contracts. She could, indeed, possess no per- sonal property with which to satisfy debts when created by her, and her rights in her real estate were exceedingly limited ; the rents be- longed to her husband during her life, and she had no power to con- vey by deed without his consent.' The rule in the courts of equity was different, and, in them, the right of a married woman to dispose of her own property was, through the medium of trusts, recognized and enforced. Trusts for the separate use of married women were a marked, although a beneficent, innovation upon the rules of the com- mon law ; but when courts of equity sustained their validity and recog- nized the wife's estate under them, it seemed to be a necessary result that she should have the power of disposition ; and accordingly the power was conceded. The doctrine was, therefore, established that a married woman might dispose of or charge her estate in any manner ' Mcllvaine v. Kadel, 30 How. 193. 404 mOETGAGES OF REAL PEOPEKTT. [§§606-607. not conflicting with the instrument under which she acquired it. She might be restrained by the provisions of the trust deed or instrument ; but if not so restrained she acted as a, feme sole in the disposition of her separate estate.' § 606. The usages and laws of the colony of the State of I^ew York relaxed the harshness of the rules of the common law in its treatment of married women, and the tendency has been to enlarge their powers of disposition over their property.'' The statutes passed in this State " for the more effectual protection of the rights of mar- ried women," ' do not remove their legal disability to contract, wMch remains as at common law ; but a married woman may, as incidental to the perfect right of property and power of disposition which she takes under the statutes, charge her estate for the purposes and to the extent which the rule of equity, before their passage, sanctioned in reference to separate estates." The primary purpose of those acts was to enable every married woman to hold property in her own right without the intervention of trusts or marriage settlements.' To the extent which it is necessary for her to hold and enjoy her separate property, her acts, in relation to it, are binding upon her and upon it, but where a contract is made by a married woman which does not con- cern her separate estate, and is not upon its credit, it is void, just as it was at common law, except for the law of 1884.° § 607. By Laws of 1849, c. 375, it is declared that any married woman may convey and devise real estate and personal property and any interest and estate therein, and the rents, issues, and profits there- of, in the same manner and with like effect as if she were unmarried. Under this provision it is held that, not only may a married woman convey her property without her husband's consent, but also that her conveyance is valid without any private examination by the officer taking the acknowledgment,' and that the same rule applies both to mortgages and to absolute conveyances.' ' Yale V. Dederer, 18 N. Y. 265, 269. s. c. 22 N. Y. 451 ; Buckley v. Wells, 33 ' The Albany Fire Ins. Co. v. Bay, 4 N. Y. 522. N. Y. (4 Comst.) 9. ° See § 615. ■ ' Laws of 1848, c. 200 ; Laws of 1849, ' Yale v. Dederer, tS N. Y. 271 ; Blood c. 375 ; Laws of i860, c. 90 ; Laws of v. Humphrey, 17 Barb. 660 ; Mcllvaine 1862, c. 172. V. Kadel, 30 How. 193 ; Wiles v. Peck, * Yale V. Dederer, 18 N. Y. 265, 26 N. Y. 42. 271. 'Andrews v. Shaffer, 12 How. 441 ; 5 Yale V. Dederer, 18 N. Y. 272, 278 ; Albany Fire Ins. Co. v. Bay, 4 N. Y. (4 Comst.) 9. §§ 608-610.] MAREIED WOMEN". 405 § 608. Mortgages by married women. — ;Where a charge is ex- pressly created and imposed by a married woman upon her separate estate, though for a purpose not beneficial to her separate estate, or even for the sole benefit of her husband, she is bound in equity by the obligation which she thus deliberately chooses to assume.^ A mortgage executed by a wife on her separate estate to secure a debt of her husband for money embezzled by him is not void for duress, though executed to prevent his conviction and imprison- ment.^ An indorsement of a promissory note by a married woman by its terms charging her separate estate with its payment, is not a mortgage in any sense, and does not create a specific lien.' § 609. Mortgages from husband to wife.— While some dealings between a husband and wife are still controlled by rules which do not obtain as to transactions between strangers, a valid mortgage may be made by a husband to his wife.* And a honafide mortgage executed from a husband to his wife takes precedence of subsequently acquired Hens of other creditors, though the husband was in failing circum- stances and the purpose was to give the wife a preference." § 610. Rights as surety. — So far as the property mortgaged is concerned, the liability of a married woman is measured by the same rules as would control if she were single ; and her rights as a surety, if she pledges her own property as security for the debt of her hus- band or any other person, will be the same as if the marriage relation did not exist." So, where a married woman charges her lands to secure a debt of 'Yale V. Dederer, i8 N. Y. 276, 283 ; * Mix v. Andes Ins. Co., 9 Hun, 397 ; s. c. 22 N. Y. 451 ; Owen v. Cawley, 36 Meeker v. Wright, 76 N. Y. 262 ; s. c. N. Y. 600 ; Merchant v. Thompson, 34 7 Abb. N. Cas. 299 ; Van Amburgh v. N. J. Eq. 73 ; Ferdon v. Miller, 34 N. J. Kramer, 16 Hun, 205. Eq. 10 ; Carstan v. David, 18 Nev. 310 ; * Comer v. Allen, 72 Ga. i. HeA-on V. Herron, 91 Ind. 278; Mattair ' The Bank of Albion v. Burns, 46 N. V. Card, 18 Fla. 761 ; Moore v. Fuller, 6 Y. 170 ; Smith v. Townsend, 25 N. Y. Oreg. 272 ; 25 Amer. Rep. 524 ; contra, 479 ; Hawley v. Bradford, 9 Paige, 200 ; in Alabama, Simms v. Kelly, 70 Ala. Darby v. Freedman's Savings, etc., Co., 429; Ashford v. Watkins, 70 Ala. 156; 3 MacArthur (D. C.) 349 ; Huntingdon, Hagenbuch v. Phillips, 112 Pa. St. 284. 2 Brown's P. C. i ; s. c. White & Tu- ' Mundy v. Whittemore, 15 Neb. dor Lead Cas. in Eq. Am. Notes, p. 1938 ; 647. Burtis, Adm'r, v. Wait, 33 Kans. 478 ; ' Third National Bank v. Blake, 73 N. Jenness v. Cutler, 12 Kans. 500 ; Op- Y. 260. penheimer v. Wright, lo6 Pa. St. 569. 406 MOETGAGES OF BEAL PROrEETr. [§§ 611-613. hex husband, who also mortgages his own property for the same debt, his property should, in the first instance, be applied to satisfy the obligation." And, in such a case, if the husband acquires the mort- gage the hen will be discharged." The mortgagee who releases the husband's land with notice that the wife's land is pledged as security for his debt, will release hers as well, though this effect will not result from knowledge merely of the marital relation.' Where a husband and wife gave a mortgage on lands of both, the wife, however, as a surety only, and the husband used the money in putting buildings on the lands of both, it was held that, as against an execution creditor of the husband, the wife was a principal to the extent that the money was used in improving her property.* LIABILITY OF MAEEIED WOMEN FOE DEFICIENCT UPON FOEEOLOSUEE. § 611. Various interesting questions will arise where it is sought to charge a married woman for a deficiency on the foreclosure of a mortgage executed before the act of 1884. The specific lien created by her act charging the mortgaged premises being exhausted, the question in each case must be as to whether the consideration for the debt and the nature or form of the obligation is such as to obligate her to apply her other separate estate to its payment. The lien of the mortgage may be perfectly valid to the extent of the value of the property mortgaged, while the debt, so far as the remaining property of the obligor is concerned, may be entirely void.' § 612. Where services are rendered or value of any kind is given for or to a married woman, by her procurement on the credit and for the benefit of her separate estate, there is an implied agree- ment or obligation springing from the nature of the consideration, which the courts will enforce by charging the amount on her prop- erty as an equitable lien.' Under this rule it was held at Special Term in Brown v. Sermcmn (14 Abb. 394), that a married woman could not be held for deficiency arising on the foreclosure of a mort- ' Loomer v. Wheelwright, 3 Sandf. Ch. 135 ; s. c. 11 Wend. 312 ; Keller v. Orr, 135 ; Wright V. Austin, 56 Barb. 13 ; 106 Ind. 406. Gahn v. Niemcewicz, 3 Paige, 614; s. c. * McFillenv. Hoffman, 35 N.J. Eq.364; II Wend. 312. Dickinson v. Codwise, i Sand. Ch. 214. « Fitch V. Cotheal, 2 Sand. Ch. 29. ' Kidd v. Conway, 65 Barb. 158. ' Gahn v. Niemcewicz, 3 Paige, 614 ; « Yale v. Dederer, 18 N. Y. 282, 284 ; Loomer v. Wheelwright, 3 Sandf. Ch. s. ^c. 22 N. Y. 460 ; Owen v. Cawley, 36 N. Y. 600. § 612.] MAERIED WOMEN. 407 gage whicli was upon property when she purchased it, and which she assumed as part of the purchase price. The ground of decision was, substantially, that the acquisition of property mortgaged for more than it was worth could not be for the leviefit of her separate estate ; or, in other terms, a married woman is held to bargains which turn out to be profitable, but is released from those which involve any loss. This principle has been repudiated by the courts, and in Owen v. Cawley (42 Barb. 105, affi'd 36 'E. Y. 600), a married woman was compelled to pay for the services of an attorney in an action in which she was defeated, with costs. It was remarked by Poetee, J., in giving the opinion of the Court of Appeals in this case>, that " the rule of equity under which the estate of a married woman is subject to a charge in respect of services rendered for its benefit, has refer- ence to the subject-matter and nature of such services, and not to the contingent and ultimate gain or loss of the parties procuring them. A builder who, at the request of a feme covert, erects a dwelling on her land, performs a service for the benefit of the estate within the meaning of the rule, and its nature would not be changed though the edifice should afterward be destroyed by fire. An employe who tills her land for hire has an equitable claim to compensation ; and, if he discharges his duty faithfully, he has a remedy for his wages, though her fields should prove unproductive." In Ballvn v. Dillaye (35 How. 216 ; s. c. 37 N. Y. 35), the principle was applied to a bond and mortgage executed by a married woman as part of the pur- chase money of real estate ; she was held for deficiency, and it was said by Paekee, J., that he did not understand how it could be said that a debt, contracted upon the purchase of property which the pur- chaser takes into possession and enjoys, and disposes of, is not a debt contracted for the benefit of the purchaser's estate. This decision was followed by Flynn v. Powers (35 How. 279 ; s. c. affi'd 36 How. 289) ' and by Vroomwn v. Tv/rner (8 Hun, 78)," and by Cash- mcm V. Henry (75 N. Y. 103), and in all of these cases it was held that the separate estate of a married woman is bound by a covenant to assume and pay a mortgage on property conveyed to her where such covenant constitutes a portion of the consideration for the con- veyance. ' Reversed by Court of Appeals on an- ^ Reversed by Court of Appeals on an- other point sub nom. Walsh v. Powers, other point, 69 N. Y. 280 ; 15 Alb. L. J. 43 N. Y. 23. 454. 408 MORTGAGES OF REAL PEOPEETT. [§§ 613-614. § 613. Before act of i860.— It was said in Knapjp v. Smith (2Y K T. 279), that a sale of real estate to a married woman would be valid if the vendor would take the risk of collecting the price, but that she could not bind herself generally for its payment. The proposition was sustained in Draper v. Stov/venel (35 N. Y. SOY), where it was said that a, feme covert could not bind herself personally upon a contract for payment of rent reserved upon a lease made to her, though the lease would be valid and the landlord might avail himself of the right of re-entry, reserved in case of a breach of the conditions. Both of these cases arose before the passage of the act of 1860 (c. 90), and in Drwper v. Stouvenel {swpra), the court was careful to indicate that fact. By section 7 of that act, it was provided that "Any mar- ried woman may, while married, sue and be sued in all matters hav- ing relation to her sole and separate property, or which may hereafter come to her by descent, devise, bequest, purchase, or the gift or grant of any person, in the same manner as if she were sole." This changed the law as it previously existed, and rendered married women liable for the price of property purchased by them. The acquisition of a leasehold estate is. substantially a purchase of the term for which the estate is created, and the rent reserved is its purchase price. Under the changes made by that act, a married woman may be sued, the same as an unmarried woman could be for any matter relating to her sole and separate property, or to property which she has acquired by grant or purchase.' § 614. Carrying on trade or business. — The statute of 1860 also provides that a married woman may carry on any trade or business, and perform any labor or services on her sole and separate account, and that the earnings therefrom shall be her sole and separate prop- erty. The power of a married woman to make contracts relating to her separate business, is incident to her power to conduct it. It can- not be supposed that the legislature, while conferring the power upon a married woman to enter into trade or business on her own account, intended that her common-law disability should continue as to con- tracts made in carrying on the business in which she was permitted ±0 engage. The power to engage in business would be a barren and useless one disconnected from the right to conduct it in the way and by the means usually employed. By the eighth section of the act of 1860, as amended in 1862 (Laws of 1862, c. 172), the authority of a ' Westervelt v. Ackley, 2 Hun, 258. §§ 615-616.] MAEEIED WOMEN. 409 married woman to bind herself by executory contracts in relation to her separate business, is recognized in the provision which exempts the husband from liability thereon. The power to carry on a separate trade or business includes the power to borrow money and to pur- chase upon credit implements, fixtures, and real and personal estate necessary or convenient for the purpose of commencing it, as well as the power to contract debts in its prosecution after it has been estab- Hshed." § 615. Statute of i860.— By section 3 of the act of 1860 ' it is pro- vided that " any married woman possessed of real estate as her sepa- rate property, may bargain, sell, and convey such property and enter into any contract with reference to the same, with the like effect in all respects as if she were unmarried, and she may in like manner enter into any such covenant or covenants for title as are usual in conveyances of real estate, which covenants shall be obligatory to bind her separate property, in case the same or any of them are broken." ' § 616. Benefit of separate estate. — Where money is loaned to a married woman and received by her, this is for the benefit of her separate estate, and it is proper that a judgment should be rendered against her if upon a foreclosure of the mortgage given by her on procuring the loan there should be a deficiency ;* but if money be ob- tained by and paid to her husband for his use, her separate estate will not be bound any further than she shall expressly charge the debt upon it, and a judgment against her upon her bond, for a deficiency, will not be proper.' Where a lot belonging to a husband was mortgaged for $1,500, and a lot belonging to his vrife was mortgaged for $2,200, and money was procured on their joint bond, secured by a mortgage on both lots to pay off both prior mortgages, and an action was brought to foreclose the new security, it was held that, as part of the money went for the benefit of her separate estate, a personal judgment for deficiency against the wife was proper." A married woman is not liable on a covenant of guaranty given by ' Per Andrews, J., in Frecking v. ' Payne v. Burnham, 62 N. Y. 69, Rolland, 53 N. Y. 422, citing Chapman rev'g s. c. 2 Hun, 143, and 4 N. Y. Sup. V. Foster, 6 Allen, 136. (T. & C.) 678 ; Manhattan Brass & Mfg. ^ Laws of i860, c. go. Co. v. Thompson, 58 N. Y. 80. ' Sigel V. Johns, 58 Barb. 620. * Jones v. Merritt, 23 Hun, 184I ■• Williamson v. Duffy, ig Hun, 312. 410 MORTGAGES OP REAL PROPERTY. [§§617-618. her on the sale of a mortgage belonging to her, unless it be shovm that the intention to charge her estate was contained in the contract of sale and guaranty, or that the consideration obtained upon the sale was for the direct benefit of her estate. In White v. MoNett (33 N. Y. 371), where it was found as a fact that the entire consideration for the assignment and guaranty was received by the husband of the mortgagor and wholly appropriated to his own use, it was held that the mortgagor was not bound by the covenant of guaranty. The law gives a married woman the practical ownership of prop- erty. She has the power of dealing with it at pleasure, whether to pay her own debts or the debts of others. If the consideration of the debt goes to the benefit of her separate estate, the presumption is that it was her intention to charge it," and if that intent appears in any way in the instrument which is the evidence of the debt, even though she be an entire stranger to the benefits of the consideration, and without the designation of any specific property, the courts will hold this to be sufiicient, and will enforce the claim against her prop- erty.' § 617. Burden of proof. — A personal obligation cannot be en- forced against a married woman imless it is made affirmatively to ap- pear that there are reasons for holding her such as have already been mentioned.'' Not only must the special facts be proved, but they must also be alleged, and a judgment for deficiency cannot be ren- dered against a married woman upon a complaint that alleges merely that she and her husband executed a bond." A statement in a mortgage of a married woman, that she charges her separate estate with the amount, does not constitute a covenant to pay, and no such covenant can be implied from it.* § 618. Statute of 1862.— By section Y of chapter 172 of the Laws of 1862 it is provided that " a married woman may be sued in any of the courts of this State, and whenever a judgment shall be recorded against a married woman, the same may be enforced against her sole and separate estate in the same manner as if she were sole." It is also enacted in section 1206 of the Code of Civil Procedure that "judgment for or against a married woman may be rendered and enforced, in a court of record, or not of record, as if she was single." 1 The Corn Exchange Ins. Co. v. Bab- = Manhattan Life Ins. Co. v. Glover, cock, 42 N. Y. 613. V 14 Hun, 153. But see § 619. » Nash V. Mitchell, ^i N. Y. 199. ■* Mack v. Austin, 29 Hun, 534. §§ 619-620.] MAEEIED WOMEN. 411 This, in effect, changes the remedy against the estate of a married woman from an equitable charge upon her estate specifically to a legal claim against her property generally. Instead of a claim m rem, as it always was when the only remedy was in equity, it is now a claim in personam,} A married woman may be estopped by a certificate as to the valid- ity of a mortgage on the faith of which a purchaser of the mortgage has acted." § 619. Statute of 1884.— By Laws of 1884, ch. 381, the powers of a married woman to contract are made the same as if she were unmarried, and most, if not all, of the distinctions made in decisions under the previous acts are now inapplicable to contracts of married women since made. This statute is as follows : "A married woman may contract to the same extent, with like effect, and in the same form, as if unmarried, and she and her separate estate shall be liable thereon, whether such contract relates to her separate business or es- tate, or otherwise, and in no case shall a charge upon her separate estate be necessary. This act shall not apply to any contract that shaU be made between husband and wife. This act shall take effect im- mediately." EIGHT OF DOWEE Hf THE EQaiTT OF EEDEMPTION. § 620. Dower allowed.— In England, an equity of redemption is subject to curtesy if the wife is in possession of the land during cov- erture. A different rule, however, has prevailed in relation to dower. In general, dower is more favored in law than any other estate. A dowress is said to be in the care of the law and a favorite of the law,' and yet, in England, the mere circumstance of an estate being incum- bered by a mortgage, has been held to preclude a widow from taking any share in it. Dower being there considered as a mere legal estate, equity follows the law and will not create an estate where it does not subsist at law.' In this State, however, from an early day, our courts, both of law and of equity, have allowed both curtesy and ' First Nat'l Bank of Canandaigua v. "Smyth v. Munroe, 19 Hun, 550; Garlinghouse, 36 How. 369 ; s. c. 53 Payne v. Burnham, 62 N. Y. 6g. Barb. 615 ; Ainsley v. Mead, 3 Lans. ' Story's Eq. Jur. § 629. 116; Corn Exchange Bank v. Babcock, * Chancellor Kent, in Titus v. Neil 42 N. Y. 613 ; Andrews v. Monilaws, 8 son, 5 Johns. Ch. 452. Hun, 55. 412 MORTGAGES OV BEAL PEOPEKTY. [§§ 621-622. dower out of the equity of redemption of mortgaged estates.' The same rule also prevails in other States." § 621. No dower as against purchase-money mortgage. — "When the husband takes a conveyance in fee, and at the same time mortgages the land back to the grantor or a third person, to secure the purchase money in whole or in part, the wife cannot claim dower as against the mortgagee.* The ground upon which the decisions upon this point have been placed is that, to the extent of the mort- gage, the seizin of the husband is an instantaneous seizdn only ; that the estate passes into him and is drawn out of him by one and the same act. Or, as it has been said, " the seizin of the husband is for a transitory instant ; that is to say, the same act which gives him the estate conveys it out of him again." ' The reason given for this rule has been regarded as rather fanciful,' but the rule itself is well estab- h'shed, and it extends as well to cases where the purchase-money mortgage is made to a third person as to where it is made to the grantor." It also extends to the case of the equitable lien of a vendor where no mortgage has been executed.' The provision in the statute' that the wife can make no claim for dower as against the mortgagee or those claiming under him, is not intended to limit her claims on the equity of redemption, and it does not render her an unnecessary party in an action to foreclose a pur- chase-money mortgage. Her rights are the same as they would be if the mortgage were not for the purchase money and she had joined in it.' § 622. Dower in surplus after foreclosure. — If a mortgage be foreclosed, the right of dower which attached to the equity of re- ' I R. S. 740, §§4, 5 ; Hitchcock v. " 4 Kent's Com. 38 ; Welch v. Buck- Harrington, 6 Johns. 2go ; Collins v. ins, 9 Ohio St. 331 ; Culver v. Harper, Torry, 7 Johns. 278 ; Tabele v. Tabele, 27 Ohio, 464. I Johns. Ch. 45 ; Titus v. Neilson, 5 ■■ Park on Dower, 43 ; Stow v. Tifft, 15 Johns. Ch. 452 ; Coles v. Coles, 15 Johns. 458 ; Jackson v. DeWitt, 6 Cow. Johns. 319 (next page) ; Hawleyv. Brad- 316. ford, 9 Paige, 200 ; Van Duyne v. ' Mills v. Van Voorhies, 20 N. Y. 412. Thayre, 14 Wend. 235. . « Kittle v. Van Dyck, i Sandf. Ch. 76 ; ^ Carter v. Goodin, 3 Ohio St. 75 ; Un- Card v. Bird, 10 Paige, 426 ; McGowan ger V. Leiter, 32 Ohio St. 210 ; McMahon v. Smith, 44 Barb. 232 ; Clark v. Mon- V. Russell, 17 Fla. 698 ; Thomas v. Han- roe, 14 Mass. 351. son, 44 Iowa, 651; Young v-. Tarbell, ' Warner v. Van Alstyne, 3 Paige, 513 ; 37 Me. 509 ; McCabe v. Bellows, 7 Gray, Unger v. Leiter, 32 Ohio, 210. 148 ; Cornog v. Comog, 3 Del. Ch. ° i R. S. 740, § 5. 407. ' Mills V. Van Voorhies, 20 N. Y. 412. § 623.] MAREIED WOMEl^. 413 demption will be transferred to the surplus money, and the widow of the mortgagor will be entitled to the income or interest of one-third of the surplus as her dower.' Where the sale and distribution take place before the death of the husband, it is customary to pay over to him all of the surplus after satisfying the mortgage foreclosed, and there is authority for holding that the wife has no claim upon it while her husband is hving." The inchoate right of dower is, however, as much entitled to protection as the perfected or vested rights of the widow, and it has been held, it is believed with better reason, that a widow is entitled to her right of dower in surplus, though the fore- closure took place in the lifetime of her husband,' and that if the dis- tribution takes place in his lifetime, one-third of the surplus should be invested and the interest only paid to her husband or his judgment creditors during the joint lives of her and her husband, and to her if she survives him.* If a wife joins with her husband in a mortgage on his property to secure his debt, she is, in a sense, his surety, for her inchoate right of dower is pledged to pay his debt. She is not, however, on this ground exempted from bearing her full share of the mortgage, and she cannot claim her full dower even though the mortgage should only consume an amount equal to her husband's interest. She can only claim dower, as against the heir or her husband's creditors, in the equity of redemption which is represented by the surplus." § 623. The value of a widow's dower, where the property was alienated by the husband in his lifetime, is to be estimated upon the value of land at the time of the alienation." The rule for computing the present value of a wife's inchoate right of dower during the life of her husband, in case she elects to accept a gross sum, is to ascertain the present value of an annuity for her life equal to the interest in the third of the proceeds of the estate to which her contingent right of dower attaches, and then to deduct from the present value for her life, the value of a similar annuity de- ■ Tabele v. Tabele, i Johns. Ch. 45 ; * Vartie v. Underwood, 18 Barb. 561 ; Titus V. Neilson, 5 Johns. Ch. 452. see also Jackson v. Edwards, 7 Paige, ' Titus V. Neilson, 5 Johns. Ch. 452 ; 386, 408 ; Denton v. Nanny, 8 Barb. Hawley v. Bradford, 9 Paige, 200 ; Frost 618 ; Blydenburgh v. Northrop, 13 How. V. Peacock, 4 Edw. 678. 289. 2 Mathews v. Duryea, 4 Keyes, 525, * Hawley v. Bradford, 9 Paige, 200. affi'g s. c. 45 Barb. 69 ; s. c. 17 Abb. ° Raynor v. Raynor, 21 Hun, 36. 256 ; s. c. 3 Abb. Ct. of App. Dec. 220. 414 MOETGAGES OP EEAL PKOPEETY. [§§ 624-625. pending upon the joint lives of herself and her husband, and the dif- ference between those two sums will be the value of her contingent right of dower. The annuity tables furnish the means of making the computation.' § 624. Right of dowress to redeem. — If the widow's dower be merely in the equity of redemption, she is bound to contribute her fair proportion to the payment of the mortgage by paying one-third of the interest during her life,'' unless it can be shown that some other person or fund is primarily chargeable with the payment of the whole mortgage debt.' If the mortgagee insists upon the payment of the principal, the widow may redeem .from the mortgage and obtain an assignment of it, and the security will be good in her hands to all except her pro- portion of the debt — ^that is, to all except the interest on one-third during her life.* On the same principle, if a grantee of the husband alone, purchases an outstanding mortgage executed by husband and wife, he will be pro twnto protected, and the wife must, on redeem- ing, contribute her part of the mortgage.' The share of the principal sum with which the widow is chargeable when the mortgage is re- quired to be paid off, is such a sum as will be equal at the time of payment to the then value of an annuity of the amount of one-third of the interest upon the sum unpaid at her husband's death for the residue of her life.' A widow may redeem from a mortgage in which she joined, and thus acquire rights paramount to a purchaser under the foreclosure of a second mortgage in which she did not join.' j. § 625. As against all persons except the mortgagee the widow ' Jackson v. Edwards, ^ Paige, 408 ; Noyes, 60 N. H. 184 ; Woods v. Wal- Doty V. Baker, 11 Hun, 222 ; Smart y. lace, 30 N. H. 384 ; Norris v. Morrison, Haring, 14 Hun, 276. 45 N. H. 490. ' Lambert on Dower, 45 ; Graham v. ' Pollard v. Noyes, 60 N. H. 184 ; Linden, 50 N. Y. 547 ; Leavenworth v. Hitchcock v. Harrington, 6 Johns. Cooney, 48 Barb. 570 ; Coates v. Chee- 290. ver, .1 Cow. 461 ; Titus v. Neilson, 5 ■* Swaine v. Perine, 5 Johns. Ch. 491. Johns. Ch. 452 ; Swaine v. Perine, 5 ' Russell v. Austin, i Paige, 192 ; see Johns. Ch. 482 ; 9 Am. Dec. 318 ; Evert- contra, Coates v. Cheever, i Cow. 460. son V. Tappen, 5 Johns. Ch. 497 ; Col- " Bell v. The Mayor of New York, 10 lins V. Torry, 7 Johns. 278 ; Russell v. Paige, 49 ; House v. House, 10 Paige, Austin, I Paige, 195 ; Bell v. Mayor of 158 ; Raynor v. Raynor, 21 Hun, 36. New York, 10 Paige, 49 ; Pollard v. ' McMahon v. Russell, 17 Fla. 698. § 626. J MAEEIED WOMEK. 415 is entitled to dower in the entire mortgaged estate." Thus when the mortgagor, or the owner of mortgaged premises, pays the mortgage debt, or appropriates property for its payment,'' the mortgage cannot afterward be set up as against the claim of the wife for dower. So, where a purchaser from the mortgagor purchases the mortgage, this operates as an extinguishment of the mortgage and lets the widow in to dower." But where the owner of the equity of redemption of mortgaged property released to the mortgagee, his wife who did not join in the deed of release was held to be entitled to dower only in the equity.* A widow of the owner of the equity of redemption cannot be re- quired to contribute toward any part of the mortgage debt which was paid by her husband during his lifetime.' If the mortgagee elects to waive the enforcement of his lien as against the inchoate dower of the wife by omitting her as a party from his suit to foreclose, it is said that a judgment creditor of the husband can- not have any redress either against the mortgagee or the wife of the mortgagor.' § 626. Barring right of dower. — ^By joining with her husband in a mortgage a wife wiU bar her right of dower, and a foreclosure of such mortgage will extinguish her claims.' But the joining in one mortgage will not preclude her from claiming dower as against other mortgagees in whose mortgages she has not joined." Joining in an absolute conveyance will, however, preclude the wife from thereafter gaining any advantage from the fact that she did not join in prior mortgages, even as against a purchaser under one of such mortgages." The joining of a married woman with her husband in a deed or mortgage of his lands does not operate as to her by way of passing an estate, but inures simply as a release to the grantee of the husband of her future contingent right of dower in the granted or mortgaged premises in aid of the title or interest conveyed by his deed or mort- gage. Her release attends the title derived from the husband, and concludes her from afterward claiming dower in the premises from ' King V. Ballantine, 40 Ohio St. 391 ; 94 Ind. 59 ; Leary v. Schaffer, 79 Ind. Ketchum v. Shaw, 28 Ohio St. 503. 567 ; Medsker v. Parker, 70 Ind. 509. ' Holmes v. Holmes, 3 Paige, 363. ' Hinchliife v. Shea, 34 Hun, 365 ; 2 Coates V. Cheever, i Coyr. 460. Payne v. Becker, 87 N. Y. 153. * Jackson V. De Witt, 6 Cow. 316. 'Sheldon v. Patterson, 55 111. 507; ' Newton v. Sly, 15 Mich. 391. Niles v. Nye, 54 Mass. (13 Mete.) 135. * De Armond v. Preachers' Aid Soc, " Carter v. Walker, 3 Ohio St. 339. 416 MORTGAGES OF REAL PROPERTY. [§ 626. the grantee or mortgagee so long as there remains a subsisting title or interest created by his conveyance. Bat it is the generally rec- ognized doctrine that when the husband's deed is avoided or ceases to operate, as when it is set aside at the instance of creditors, or is defeated by a sale on execution under a prior judgment, the wife is restored to her original situation, and may, after the death of her husband, recover dower as though she had never joined in the con- veyance.' In short, the law regards the act of the wife in joining in the deed or mortgage not as an alienation of an estate, but as a renun- ciation of her inchoate right of dower in favor of the grantee or mortgagee of her husband in and of the title or interest created by his conveyance. It follows, therefore, that her act in joining in the conveyance becomes a nullity whenever the title or interest to which the renunciation is incident is itself defeated. The wife's deed or mortgage of her husband's lands cannot stand independently of the deed of her husband when not executed in aid thereof, nor can she, by joining with her husband in a deed of lands to a stranger in which she has a contingent right of dower, but in which the husband has no present interest, bar her contingent right." These principles were applied in favor of a wife who had joined with her husband in a mortgage so as to give her dower against a purchaser under a judg- ment against her husband which was prior to the mortgage.' In a proceeding at the suit of sundry mortgagees to foreclose their respective mortgages, it appeared that the wife of the mortgagor had united with her husband in the execution of only one of the mort- gages, in which she had released her contingent right of dower. At the instance of the mortgagee holding such release the wife was made a party, and the premises were sold pursuant to an order, free of her contingent claim of dower. It was held that the mortgagee holding such release was entitled to receive the proportionate value of such inchoate right of dower, though the net proceeds of the sale were in- sufficient to satisfy the prior mortgages.* A married woman holding a mortgage on the land of her husband does not discharge such mortgage or transfer it by joining in a con- ' Hinchliffe v. Shea, (Ct. of App.) 2 ^ pg^ Andrews, J., in Hinchliffe v. N. Y. S. Reptr. 728, rev'g 34 Hun, 365 ; Shea, 2 N. Y. S. Reptr. 728 ; Marvin v. Malloney v. Horan, 49 N. Y. in ; Rob- Smith, 46 N. Y. 571. inson v. Bates, 3 Mete. 40 ; Ketzmiller ' Hinchlifife v. Shea, supra. V. Van Rensselaer, 10 Ohio St. 63 ; Lit- ■• Black v. Kulhman, 30 Ohio St. tlefield V. Crocker, 30 Me. 192. 196. § 627.] MAERIED WOMEN. 417 veyance or junior mortgage to bar her dower, notwithstanding sucli conveyance or mortgage purports to convey all of the rights, titles, and interests of both the grantors.' An inchoate right of dower will not be lost by merger in a title which is adjudged fraudulent or void," or which is cut off by fore- closure of a mortgage to which the wife was not a party.' § 627. Costs. — A dowress is a favorite with a court of equity, and probably for this reason she is exempted from paying costs in pro- ceedings to distribute surplus, and is entitled to her costs out of the other two-thirds.' Where money is in the hands of the court representing land in which a widow has a dower right, she may insist that one-third of it be invested for her benefit during her life. If she does this she will be charged with the expenses of making the investment and of re- ceiving and paying over the income ; but if she is willing and con- sents to accept a gross sum in lieu of such income for her life, the same must be estimated according to the then value of an annuity of five per cent, on the principal sum during her probable life, accord- ing to the Portsmouth or Northampton tables." ' Van Amburgh v. Kramer, i6 Hun, ' People v. Knickerbocker Life Ins. 205 ! Power v. Lester, 23 N. Y. 527 ; Co., 66 How. 115. Gillig V. Maas, 28 N. Y. 191; Kitchell v. ■'Tabele v. Tabele, i Johns. Ch. 45 ; Mndgett, 37 Mich. 8i. Hawley v. Bradford, 9 Paige, 200. ^Lowry v. Smith, 9 Hun, 514; Mai- ' Rule 71 of 1880. loney v. Horan, 49 N. Y. iii. 27 CHAPTER XVII. INTEREST AND TJSITBT. INTEREST. § 628. Rate of interest. 629. Interest since the act of 1879. 630. Interest when partial payments have been made. 631. Compound interest. USURY. 632. What contracts are usurious. 633. Mistake does not constitute usury. 634. Optional payment not usury. 635. Compensation for services. 636. Extortion is not usury. 637. The agreement to pay excessive interest must be made by the borrower. 638. Sales of mortgages at a discount. 639. Sale of mortgage as a cover for usury. 640. Payment of discount by mort- gagor. 641. Bonus exacted by agent on his own behalf. 642. Bonus exacted by agent on behalf of principal. 643. Purging a contract of usury. 644. Usury as controlled by place of contract. 645. Substituted securities. 646. New security for usurious debt. 647. Who may avail themselves of the defense of usury. 648. Right to allege usury cannot be transferred. 649. When mortgagor is estopped from setting up usury against as- signee of mortgage. 650. Strangers to usurious contract. 651. Previous adjudication. § 652. Conveyances expressly subject to mortgages. 653. Reason of the rule. 654. Pleading by plaintiff to exclude defense of usury. 655. Permitting defense after grant subject to mortgage. 656. Mortgagor's defense after convey- ance. 657. Judgment where only a lienor de- fends. 658. Right of defense to mortgage re- served in deed. 659. Usurious debt in assignment for creditors. 660. Usury as a defense for the guaran- tor of the mortgage debt. 661. Guaranty of a mortgage sold at a discount. 662. The usurer cannot avail himself of the statute. 663. Defense of usury by corpora- tions. 664. Pleading usury as a defense. 665. Affirmative relief in equity against usurious mortgages. 666. Who must repay money borrow- ed as a condition for relief. 667. Who is a " borrower " within the meaning of the statute. 668. Validity of an extension for a usurious consideration. 669. Sales under powers contained in usurious mortgages. 670. Effect of usurious contracts upon prior valid obligations. 671. Usurious bonus paid for extension of time. 672. Usury in one contract not applied upon a different contract. INTEREST. § 628. Rate of interest.— Where a bond or note secured by mort- gage calls for interest without naming the rate, the rate fixed by law at the date of the instrument will be chargeable.' ' Ackene v. Winston, 22 N. J. Eq. 444. § 629. J INTEREST. 419 By the decided weight of authority in this State, where one con- tracts to pay a principal sum at a certain future time with interest, the interest prior to the maturity of the contract is payable by virtue of the contract and thereafter as damages for the breach of the con- tract.' And such is the rule as laid down by the Federal Supreme Court." The same authorities show that after the maturity of such a contract, the interest is to be computed as damages according to the rate prescribed by law, and not according to the rate prescribed by the contract, if that be more or less.' After judgment, interest will run according to the legal rate, and not according to the rate specified in the contract, if that be different." A parol agreement made after maturity to pay a reduced rate of interest or an increased rate, up to the legal limit, or to pay semi-an- nually instead of annually, will bind the parties. ° § 639. Interest since the act of 1879.— By Ch. 538 of the Laws of 18Y9 it was enacted that the rate of interest upon a loan or for- bearance of money, notes or things in action, shall be six dollars upon $100 for one year, and after that rate for a greater or less sum or for a longer or shorter time ; but' nothing in the act contained is to be con- strued so as to in any way affect any contract or obligation made be- fore the passage of the act. This act took effect on January 1, 1880, and there has been much discussion as to its effect. It has finally been determined that on a mortgage executed before January 1, 1880, stipulating that the principal sum shall bear interest at seven per cent. " until paid," seven per cent, may be charged until the time of the entry of a judgment of foreclosure ; but if that hap- pened after January 1, 1880, six per cent, only can be collected thereafter." If no special covenant is to be found in the contract as ' Macomber v. Dunham, 8 Wend. 550; for Savings v. City of Boston, 23 Alb. L. United States Bank v. Chapin, 9 Id. J. 130. 471 ; Hamilton v. Van Rensselear, 43 * Wernwag v. Brown, 3 Blackf. (Ind.) N. Y. 244 ; Ritter v. Phillips, 53 N. Y. 457 ; 26 Am. Dec. 433; Taylor v. Wing, 586; Southern Central R.R. Co. v. Town 84 N. Y. 471, rev'g 23 Hun, 233 ; Wat- of Moravia, 61 Barb. 180. son v. Fuller, 6 Johns. 284 ; Sayre v. ^ Brewster v. Wakefield, 22 How. (U. Austin, 3 Wend. 496. S.) 118 ; Burnhisel v. Firman, 22 Wall. * Sharp v. Wyckoff, 39 N. J. Eq. 376 ; 170; H olden v. Trust Co., 100 U. S. 72. Hill v. Howell, 36 N. J. Eq. 25, and * Per Earl, J., in O'Brien v. Young, note ; Momo v. Perkins, 9 Pick. 298. 95 N. Y. 428. Contra, Miller v. Bur- " Taylor v. Wing, 84 N. Y. 471, rev'g roughs, 4 Johns. Ch. 436 ; Van Beuren v. 23 Hun, 233 ; Siewart v. Hamel, 3i Hun, Van Gaasbeck, 4 Cow. 496; Union Inst'n 44. 420 MORTGAGES OE EEAL PEOPEETY. [§§ 630-631. to payment of interest after maturity, interest at seven per cent, is to be computed up to January 1, 1880, and at six per cent, after that time.' Upon a judgment recorded prior to January 1, 1880, the plaintiff is entitled to collect seven per cent, interest up to that date, and six per cent, thereafter.'' § 630. Interest when partial payments have been made. — In mating up the account of a mortgagee, compound interest will not be allowed unless where there is the settlement of an account between the parties after the interest has become due, or there has been an agreement for that purpose subsequent to the original contract, or where the master's report computing the sum due for principal and interest is coniirmed, for it is then in the nature of a judgment.' The rule for casting interest, when partial payments have been made, is to apply the payment, in the first place, to the discharge of the in- terest then due. If the payment exceeds the interest, the surplus goes toward discharging the principal, and the subsequent interest is to be computed on the balance of the principal remaining due. If the payment be less than the interest, the surplus of interest must not be taken to augment the principal, but interest continues on the for- mer principal until the period when the payments, taken together, exceed the interest due, and then the surplus is to be applied toward discharging the principal, and interest is to be computed on the bal- ance, as aforesaid." But where neither principal nor interest has be- come due at the time of the payment, such payment, in the absence of any agreement as to the application, it is to be applied to the extin- guishment of principal and interest, ratably.^ § 631. Compound interest. — An agreement made when the mort- gage becomes due, to forbear ia consideration of the payment of legal interest, if executed, will not be disturbed, nor will tie excess of in- terest paid be appHed as payment of the principal. It is like an exe- cuted agreement to pay interest on interest accrued, which is com- • Sanders v. The Lake Shore & Mich- 13^ 17 ; Jencks v. Alexander, 11 Paige, igan Southern Railway Co., 94 N.Y. 641. 619, 625 ; French v. Kennedy, 7 Barb. 2 O'Brien v. Young, 95 N. Y. 428; 452; Stone v. Seymour, 15 Wend. 19, Reese v. Rutherfurd, 90 N. Y. 644. 24 ; Bennett v. Cook, 2 Hun, 526 ; s. c. ' Connecticut v. Jackson, i Johns. Ch. 5 N. Y. Sup. (T. & C.) 134. 13. 16. 'Jencks v. Alexander, 11 Paige, 6lg, * Connecticut v. Jackson, I Johns. Ch. 625 ; Williams v. Houghtaling, 3 Cow. 86, § 632. J USUKY. 421 pound interest. An agreement to pay interest on interest thereafter, will not be enforced, but after it has been paid it cannot be recovered back,' and by a parity of reason it will not be applied as a payment upon principal." There are many dealings among men in which in- terest is habitually charged and paid, when it could not be claimed on the ground of strict legal right. These transactions are regarded as fair and just between the parties, and they cannot be considered fraudulent as to others, and a mortgage given for a just debt is not rendered fraudulent as against creditors by including in it interest on the debt not collectible at law, where the allowance of interest is just and equitable.' U80BT. § 632. What contracts are usurious. — The usury laws of this State prohibit the taking of more than six per cent., directly or indi- rectly, for the loan or forbearance of money, and declare to be void all contracts or securities whereupon or whereby a greater sum is taken, secured, or agreed to be paid.' These laws reach indirect as well as direct agreements to obtain more than six per cent, for the ■ loan or forbearance of money, and, in the administration of them, courts look not so much to the forms which usurious agreements may take, as to their substance and effect, and the intention of the parties to them. No covering which may be put upon them will be allowed to conceal their real features from the searching eye of a court of justice.' It has even been held that a tenant may in summary proceedings by his landlord to recover possession of the property, show that the lease is in fact a mortgage to secure the repayment of a usurious loan and is void." A contract may be just and honest on its face and call only for lawful interest on the amount actually loaned and still be void if there is a parol agreement for usury not included in the writing, but ' Mowry v. Bishop, 5 Paige, 98. ' Birdsall v. Patterson, 51 N. Y. 43 ; '' N. Y. Life Ins. & Trust Co. v. Man- Crippen v. Heermance, 9 Paige, 211 ; ning, 3 Sandf. Ch. 58. Fitzsimmons v. Beam, 44 Penn. St. 32 ; » Spencer v. Ayrault, 10 N. Y. (6 Seld.) De Wolf v. Johnson, 10 Wheat. 385 ; 202. See also as to compouild interest, Fiedler v. JDarrin, 50 N. Y. 437 ; Knick- Young V. Hill, 67 N. Y. 162, and article erbocker Life Ins. Co. v. Nelson 78 N.Y. in 16 Alb. L. J. 252. 137; 7 Abb. N. C. 170, aflS'g 13 Hun, 321. ■* I R. S. 772 ; Laws of 1837, c. 430 ; ' People ex rel. Ainslie, 76 N. Y. 574, Laws of 1879, c. 53S. affi'g 13 Hun, 138. 423 MORTGAGES OF EEAL PEOPEETT. [§§ 633-634. constituting a part of the real contract of loan ; and a demand for excessive interest made by the lender as being " due " upon the con- tract, acquiesced in by the borrower, will be sufficient evidence upon which to adjudge such invalidity.' § 633. Mistake does not constitute usury. — To constitute usury there must be a contract for the loan or forbearance of money ; the borrower must, as a part of such contract of loan, agree to pay to the lender, as a compensation for such loan, interest at a rate ex- ceeding that allowed by law, and the lender must, as a part of such contract, agree to receive such excessive interest. A mere error vsdll not render a transaction usurious," and the fact that a mortgage bearing interest from date was given, a part of the consideration being notes at thirty days without interest, has been held not affected otherwise than to entitle the mortgagor to a rebate of interest.' So, where by mistake excessive interest for twenty days was computed, this was held not to be usurious, and the burden of proving that it was intended to be so was held to rest upon the de- fendant alleging the usury.* A mortgage drawn so as to call upon its face for usury may be corrected if it can be shown that it was so drawn by mistake. ° The fact that a mortgage is executed for a larger sum than was actually advanced, is not thereby rendered usurious in the absence of proof that the difference represented a usurious bonus.' An agreement to pay interest " semi-annually in advance " entered into in good faith without intent to evade the statute, is not usuri- ous.' The common practice of banks in discounting commercial paper is to deduct interest in advance, and this is not usurious.' And it is not usurious to agree to pay interest at more frequent times than annually." § 634. Optional payment not usury. — To make a loan of money usurious there must be, within the very, language of the statute, an agreement, either expressed or implied, to pay more than the legal 'Smith V. Hathorn, 88 N. Y. 2ii, "Adm'rof Auble v. Trimmer, 17 N. rev'g 25 Hun, 159. J. Eq. 242 ; Brown v. Champlin, 66 N. ' Marvine v. Hymers, 12 N. Y. 223 ; Y. 214. Fiedler v. Darrin, 50 N. Y. 443 ; Gibson ■ Bloomer v. Mclnerney, 30 Hun, 201. V. Stearns, 3 N. H. 185. » Bank of Utica v. Wager, 2 Cow. » Brown V. Champlin, 66 N. Y. 214. 712 ; Marvine v. Hymers, 12 N. Y. 227. * Bevier v. Covell, 87 N. Y. 50. ' Mowry v. Bishop, 5 Paige, 98 ; ' GriflSn V. N. J. Oil Co.,n N. J. Eq. 49. Meyer v. Muscatine, i Wall. 384. §§ 635-637.] USURY. 423 rate of interest, such an agreement as might be enforced by the creditor if it were not unlawful under the prohibition of the statute. For this reason a payment of a sum of money as a mere gratuity, in the absence of any agreement or understanding by which there was any duty to make such payment on the part of the borrower, the payment being entirely optional, will not constitute usury.' § 635. Compensation for services. — The fact that a sum is in- cluded in a mortgage for services rendered by the mortgagee does not render the instrument usurious, even if these services are ren- dered in procuring the money to be loaned ;' but if an agreement to pay for trouble or services is made as a mere device to evade the usury law, the mortgage will be void.' The borrower may lawfully be required to pay the attorney of the mortgagor for examining his title and preparing the necessary papers.* § 636. Extortion is not usury. — There is no usury in the absence of an agreement made by the borrower to pay excessive interest. If extortion is practiced under a false pretense of right which is sub- mitted to by the borrower, this is not necessarily usury.' § 63'?'. The agreement to pay excessive interest must be made by the borrower. — The payment of usury, if it be properly so called, not by the borrower, but by a stranger to the contract, one not connected with the loan or liable on it, who voluntarily or from any motive advances the sum exacted or sustains the loss which the borrower is unwilling or declines to do, is not a circumstance of which the borrower can be permitted to take advantage for the pur- pose of having the contract declared inoperative and void for usury.. So, where a person desiring to purchase a farm, for which the price was $2,500 cash, applied for a loan for that amount on his note se- cured by a mortgage on the farm ; and the plaintiff agreed to make the loan, but demanded $30 bonus, which was paid by the person offering the farm for sale, the plaintiff thereupon receiving a note and mortgage for $2,500 for an actual outlay of only $2,4Y0, the transaction was held not to be usurious." 1 Bill V. Fish, I N. Y. St. Reptr. 473 ; = Guggenheimer v. Geiszler, 81 N. Y. Home Ins. Co. v. Dunham, 33 Hun, 293 ; Morton v. Thurber, 85 N. Y. 550. 415 ; Clarke v. Sheehan, 47 N. Y. 188. ' McArthur v. Schenck, 31 Wis. 673 ; « Thurston v. Cornell, 38 N. Y. 281. 11 Am. R. 643 ; Philips v. Mackellar, 3 Van Tassell v. Wood, 12 Hun, 388. 92 N. Y. 34 ; Little v. White, 8 N. H. ■* Chesebro v. Tilden, 21 W. Dig. 276 ; Bearce v. Barston, 9 Mass. 45 467. Lesley v. Johnson, 41 Baib. 359. 424 MORTGAGES OF REAL PROPERTY. [§ 638. Where the owner of an undivided half of certain premises con- veyed his interest for the agreed price of $350, for which the pur- chaser was to give his note secured by a mortgage on the land ; and, in anticipation of this trade, the vendor arranged with the plaintiff to sell him the note and mortgage for $275 cash ; and, to save the trouble of transferring the note and security, the vendor requested the purchaser to make them directly to the plaintiff, which was done, it was held in an action to foreclose the mortgage that the transaction was not usurious, the evidence shovring that it was not a contrivance to evade the usury law.' § 638. Sales of mortgages at a discount. — A valid mortgage may lawfully be sold at a discount, and the purchaser will hold it as security for its full amount ;' but if the mortgage be made without consideration and sold at a discount, the transaction will be usurious and void, though the contract be in form such a one as the law does not condemn.^ As soon as a mortgage has been delivered for a valuable and lawful consideration, it becomes a piece of property which its owner may sell for any price he sees fit, without any restraint from laws against usury. The vice, if it exists at all, is to be found in the contract which the lien is given to secure. Even if the mortgage was made in order that it should be sold at a discount, and if the intending pur- chaser advises with regard to the transaction, still he will not commit usury if the mortgage, as made, is a valid security between the parties to it. Thus, where on an application for a loan the intending borrower truthfully stated that he owed money to certain persons and pro- posed to make a mortgage to his creditors which they would sell at a discount, and this plan was adopted in order that the person making the investment might obtain a greater return from the use of his money than the rate allowed by statute for a loan, still the transaction was adjudged to be lawful and not within the condemnation of the law against usury.* The material point in this case was, that the mort- gage secured an honest debt owing between the original parties to it, and was valid in the hands of the mortgagee. That it was executed ' Armstrong v. Freeman, g Nebraska, 669 ; Cameron v. Chappell, 24 Wend. -II. 94 ; Culver v. Bigelow, 43 Vt. 249 ; Sam- ' White V. Turner, 4 N. Y. Sup. (T. & mis v. Matthews, 19 Fla. 811. C.) 693 ; s. c. I Hun, 623 ; Rice v. Ma- ' Vickery v. Dickson, 62 Barb. 272. ther, 3 Wend. 62 ; Dowe v. Schutt, 2 ■• Dunham v. Cudlipp, 94 N. Y. 129 ; Den. 621 ; Powell v. Waters, 8 Cow. Sickles v. Flanagan, 79 N. Y. 224. § 639. J TJSUET. 425 after a previous understanding that it should be purchased at a sum less than its face, could not make' the purchase usurious or convert the contract into a loan of money.' It would have been different if the mortgage had been executed without consideration, for then it would have had no vitality until a sale,'' and the mortgage could only be en- forced to the extent that it was valid in the hands of the mortgagee/ 1 639. Sale of mortgage as a cover for usury. — The question of the validity of a mortgage in the hands of the assignee depends frequently upon the point whether it had any " inception " before it was transferred. This depends upon the question as to whether an action could have been brought upon it before the transfer.* It must be noticed that in the cases where the purchase of a mort- gage security at a discount has been held to be valid, the contract was one of purchase, and was made with the person owning the mortgage. A contract with a mortgagor to loan him a sum of money wherewith to pay the amount due on a mortgage, upon the security of an assignment of the mortgage, is a very different matter, and if made on usurious terras, the assignment wiU be void." It is not competent for a purchaser of a mortgage at a discount to shut his eyes to facts which ought to satisfy him that in dealing with the mortgagee he is really contracting with the mortgagor for a loan of money ; and in a case where there was deducted from the price of the mortgage, a large prior mortgage on the property, this fact was held notice to the purchaser of the real nature of the transaction.' So, the fact that the mortgagor negotiates the sale of the mortgage should put the purchaser upon inquiry.'' So, if A applies to B for the loan of money, B may refuse to loan, and say to A that he must procure a valid mortgage which he can buy at a discount, and he may suggest to A that he might sell his real estate to C, and get a mortgage from C, and that he would then buy the mortgage at a discount. If A, in pursuance of the suggestion and ' Smith V. Cross, qo N. Y. 549 ; Union Munn v. Commission Co., 15 Johns. 44 ; Dime Savings Institution v. Wilmot, 94 Powell v. Waters, 8 Cow. 669 ; Kent v. N. Y. 221 ; Dunham v. Cudlipp, 94 N. Walton, 7 Wend. 256. Y. 129 ; Brooks v. Avery, 4 N. Y. (4 ' Wyeth v. Braniff, 84 N. Y. 628, rev'g Comst.) 225 ; Sickles v. Flanagan, 79 N. 14 Hun, 537 ; Kellogg v. Adams, 39 N. Y. 224. Y. 28 ; Schroeppel v. Corning, 5 Den. ' Dunham v. Cudlipp, 94 N. Y. 129, 236 ; Johnson v. Bush, 3 Barb. Ch. 207 ; 136. Donnington v. Meeker, ri N. J. Eq. 362. 2 Sickles V. Flanagan, 79 N. Y. 224. * Smithers v.. Heather, 25 Mich. 447. * Eastman v. Shaw, 65 N. Y. 522, 527 ; ' Mullison's Appeal, 68 Pa. St. 212. 426 MOETGAGES OF EEAL PEOPERTY, [§§ 640-641. scheme, actually sells his real estate to C, and takes a valid mortgage from C, that mortgage has a valid inception and is subject to sale and traffic like any other chose in action. Its purchase is not, in any sense, a loan of money, and the fact that the purchaser acquires a profit in excess of the rate established by law for interest on loans does not render the transaction usurious.'. But if the conveyance thus made is a mere form, and the grantee after the conveyance held the title for the grantor, and if .the mortgage is executed simply for the purpose of raising money, and all this is done at the instigation of the person afterward purchasing the security at a discount, or if it is all known by him to be the actual state of facts, then it would be in effect a loan to the mortgagee under the pretense of a sale, the mortgage having no inception until it is assigned, and the mortgage, notwith- standing the form of its execution as a purchase-money mortgage, would be subject to the defense of usury.'' § 640. Payment of discount by mortgagor. — There can be no usury unconnected with the loan or forbearance of money, and a purchase of a debt by another at the instance of the debtor for less than its face, the debtor himself paying the creditors the discount, is not jper se usury." It may be very cogent evidence of usury, and under some circumstances, as, for example, where the transaction originated in an agreement for a loan by the alleged purchaser to the debtor, the conclusion that the form the transaction took was a mere device and cover for usury might be well-nigh irresistible." And it has been held that a mortgage free from usury in the hands of the mortgagee is not rendered usurious by the payment of a pre- mium to his assignee to induce him to purchase it.' § 641. Bonus exacted by agent on his own behalf. — If the agent of the lender exacts from the borrower a sum of money for his own benefit, and which is understood by the borrower to be paid to and appropriated by the agent as an inducement on his part to make the loan, this does not necessarily make the contract usurious ; the con- tract for excessive compensation being in form and in fact made with the agent individually for his benefit, and the contract for the loan being quite independent." ' Per Earl, J., in Smith v. Cross, go 'Conover v. Hobart, 24 N. J. Eq. 120; N. Y. 549, 553. Kellogg v. Adams, 39 N. Y. 28. * Smith V. Cross, 90 N. Y. 549, 553. *Condit v. Baldwin, 21 N. Y. 219; ' Siewart v. Hamel, 91 N. Y. 199. Bell v. Day, 32 Id. 165; Fellows v. Com- *Per Andrews, Ch. J., in Siewart v. missioners of Loans of Oneida Co., 36 Hamel, 91 N. Y. 199. Barb. 655 ;' Mutual Life Ins. Co. v. Ka- § 642.] USTJEY. 427 § 642. Bonus exacted by agent on behalf of principal. — The decisions last cited are based upon the principle that the lender did not either expressly, impliedly, or apparently authorize the agent to do an illegal act or to violate the law ; and hence, that he was not affected by the wrongful act of the agent in extorting from the bor- rower a bonus for himself, so long as the lender did not authorize, consent to, or participate in the extortion, and was seeking to enforce a security for the precise amount loaned with lawful interest. And it makes no difference in principle if the agent professed to take the bonus for the lenders, so long as he had no express, impHed, or ap- parent authority to do so, if the lenders have neither taken, assented to, nor participated in the usury.' So, where one of several trustees received a usurious bonus on a mortgage given on a loan by the estate which he represented, it was held that the mortgage was not invalidated thereby unless it be shown that the same was received by the authority or with the knowledge of the other trustees.'' And where the guardian of an infant loaned money belonging to his ward, receiving securities for the amount loaned with lawful interest ; but as an inducement to make the loan received a bonus for his own benefit from the borrower, who paid the same with knowledge as to the title of the moneys loaned, this did not make the transaction usurious. The guardian is not a lender of the trust fund within the meaning attached to that term by our statutes re- lating to usury.' In Algv/r v. Oa/rdner (64 N. T. 360) the court below had charged the jury that if the usurious premium had been paid to the agent, on a contract between the borrower and the agent, the plaintiff might still recover. The Commission of Appeals decided that such a charge was improper, because there was no evidence of any such separate agreement. They also thought that there was strong evidence in favor of the theory that the plaintiff had authorized the exacting of the usury, and they held that it was error not to have submitted that question to the jury.' shaw, 66 N. Y. 544 ; Philips v. Mackel- Van Blarcom, 29 N. J. Eq. 454 ; Spring lar, 92 N. Y. 34 ; Manning v. Young, 28 v. Reed, 28 N. J. Eq. 345 ; Manning v. N. J. Eq. 568. Young, 28 N. J. Eq. 568. 'Estevez v. Purdy, 66 N. Y. 446, 449, ^Van Wyck v. Walters, 16 Hun, 209, rev'g6 Hun, 46; Lee v. Chadsey, 3 Abb. affi'd 81 N. Y. 352. Ct. of App. Dec. 43 ; 2 Keyes, 543 ; ' Fellows v. Longyor, 91 N. Y. 324. Stout V. Rider, 12 Hun, 574; Gray v. * See Estevezv.Purdy,66N.Y.446,45i. 428 MORTGAGES OP REAL PEOPEKTT. [§§ 643-644. If the usurious bonus is received and retained by tbe principal with knowledge of the facts, this wiU constitute a ratification of the usury ; but to have this effect he must know that it was received on the very transaction ; and where a lender received a sum of money from his attorney with the understanding that it was paid to him on another contract, this will not constitute such ratification, notwithstanding "a finding by the court that it had been paid for usury ; but in such a case he will be required to credit the amount upon the loan." § 643. Purging a contract of usury. — If the usurious premium be returned before the delivery of the mortgage, the usury will be purged and the mortgage will be valid." So, where a usurious con- tract is mutually abandoned by the parties, and the securities given therefor cancelled and destroyed, a subsequent promise by the bor- rower to pay the money actually loaned is not tainted by the original usury and can be enforced.' Such purgation of usury between the parties to the contract will not affect the right of an existing junior lienor, although it wUl bind all parties claiming subsequent to the forgiveness of the usury." And the holder of a usurious mortgage cannot, even with the assent of the mortgagor, apply partial payments to the unsound parts of his mort- gage for the purpose of keeping alive that part which is valid, to the prejudice of a subsequent mortgagee.' § 644. Usury as controlled by place of contract. — The question as to whether a contract is usurious or not is quite independent of where the land which is pledged to secure the debt is located. It is possible for parties in this State to make a contract of loan with such reference to a foreign law, that the latter will govern its construction and legal effect ; but this rule does not mean that parties by a mere mental operation can import the law of another State into this, for the purpose of altering the character of a loan made here, and to be returned, without any undertakiag or duty to use the money anywhere else, or any undertaking that in respect to the use or repayment of the money the loan shall differ from any other. Although the debt be secured by a mortgage on land in a State where the contract is valid, still, if neithbr the bond nor mortgage name any place of pay- ' Philips V. Mackellar, 92 N. Y. 34. Warwick v. Dawes, 26 N. J. Eq. 548 ; ' Brackett v. Barney, 28 N. Y. 333. Miller v. Hull, 4 Den. 104 ; Bracket! v. ' Sheldon v. Haxtun, 91 N. Y. 124. Barney, 28 N. Y. 333. * Van Tassell v. Wood, 12 Huh, 388 ; ' Greene v. Tyler, 39 Pa. St. 361. § 645.] USFKY. 429 ment, and the parties reside here, it is payable here, and the Talidity of the debt must be judged by the laws of this State.' So, in a proper case, the Supreme Court of this State has power to decree a mortgage upon real estate void for usury, and to compel the party holding it to surrender it up to be cancelled, though the lands mort- gaged lie in another State." The same principle will control if the land mortgaged is in this State and the parties reside and contracted in another State. The law of the place where the contract is made will determine its vsr lidity.' A note drawn, dated, signed, dehvered, made payable, and first used in the 'State of New York, but given for a precedent debt arising in and owing to a resident of Dakota, is to be governed by the usury laws of New York and not those of Dakota." § 645. Substituted securities. — If a security is tainted with usury in its creation, it will be void even in the hands of a bona fide holder.'- Any new security given to the lender in exchange for such usurious security, or into which the latter enters as a considera- tion, is also infected with the usury and is void,° even though the new security is given by a third person, a stranger, if it is without any new consideration ;' and the original taint attaches to every such suc- cessive security however remote.^ But if the usurious obligation be transferred to an innocent holder and he receives directly from the debtor a new one in its stead, such new obligation cannot be impeached for usury in the original." Where part of the money included in a usurious mortgage is used ' Cope V. Wheeler, 53 Barb. 350 ; s. s. c. sub nam. Cope v. Wheeler, 41 N. c. affi'd 41 N. Y. 303. Y. 303. ' Williams v. Ayrault, 31 Barb. 364. ' Tuthill v. Davis, 20 Johns. 285 ; 2 Dolman v. Cook, 14 N. J. Eq. 56. Vickery v. Dickson, 35 Barb. 96; Bell A mortgage on real estate in Michigan v. Lent, 24 Wend. 230. executed to secure a note payable in New ° Dunning v. Merrill, Clarke Ch. 252. York, with ten per cent, interest, is valid "Kilner v. O'Brien, 14 Hun, 414; under the laws of Michigan. Fitch v. Cuthbert v. Haley, 8 J. R. 390 ; Jackson Remer, i Bissell, 337. v. Henry, 10 Johns. 185 ; Powell v. * Mechanics' Nat. Bk. of St. Paul v. Waters, 8 Cow. 669, 691, 696 ; Kent v. Southwick, 67 How. 324. Walton, 7 Wend. 256 ; Holmes v. Will- ' Thompson v. Berry, 3 Johns. Ch. iams, 10 Paige, 326 ; Aldrich v. Rey- 395 ; s. c. affi'd 17 Johns. 436. nolds, i Barb. Ch. 43 ; Smedberg v. «Jack y. Nichols, 5 N. Y. (i Seld.) Simpson, 2 Sandf. Sup. Ct. 85 ; Sher- 178 ; McCraney v. Alden, 46 Barb. 272 ; wood v. Archer, 10 Hun, 73. 430 MOETGAaES 01' EEAL PEOPEETT. [§§ 646-647. in taking an assignment of a prior valid security, the purchaser may recover on such assigned security.' A mortgage made to secure two independent obligations, one of which is valid and the other of which is void for usury, may be en- forced to the extent of the valid one." § 616. New security for usurious debt. — When a new security is given to the same lender, to secure a usurious debt previously con- tracted, it will partake of the taint of the original debt, even though given by a third person, if there is no other consideration than the original usurious indebtedness.' But there is no rule of law which prohibits the loaning of money to a person intending to use it to pay a usurious debt, and the fact that the money was so used would not taint the contract with the person who made the new and valid loan.* § 647. Who may avail themselves of the defense of usury. — The defense of usury is said to be a personal defense, and it is avail- able only to the borrower or his privies in blood, representation, or estate. It cannot be set up by a stranger to the original transaction," and it is available only to those persons who are bound by the orig- inal contract to pay the sum borrowed, or who have received the estate upon which the debt is charged as a lien. The statute having declared the usurious security void, the owner of the premises has the right to sell his property or to mortgage it, as though such void mortgage had never existed ; and the purchaser in such case neces- sarily acquires all the rights of his vendor to question the validity of the original security, for if the original mortgagor had not that right, the premises would, to a certain extent, be rendered inalienable in his hands, notwithstanding the security was absolutely void as to him." The right to insist upon the usurious character of the security passes to the heir or devisee of the mortgagor, and, to the extent of his claims upon the land, it also belongs to. the subsequent judgment creditor of the mortgagor, or to a purchaser under such judgment,' ' Allison V. Schmetz, 31 Hun, 106. v. The American Life Ins. Co., 11 Paige, ' Carradine v; Wilson, 61 Miss. 573. 635, rev'g 4 Edw. Ch. 332. 'Vickery v. Dickson, 35 Barb. 96; "Shufelt v. Shufelt, gPaige, 137 ; Post Bell V. Lent, 24 Wend. 230. v. Dart, 8 Paige, 639 ; Brooks v. Avery, * Wilson V. Harvey, 4 Lans. 507. 4 N. Y. (4 Comst.) 225 ; BuUard v. Ray- 'Ohio & Mississippi R.R. Co. v. nor, 30 N. Y. 197 ; Matthews v. Coe, 56 Kasson, 37 N. Y. 218 ; Williams v. Buck, Barb. 430. 2 Transcript App. 133 ; s. c srtb nom. ' Dix v. Van Wyck, 2 Hill, 522 ; Williams v. Tilt, 36 N. Y. 319 ; Stoney Schroeppel v. Corning, 5. Den. 236 ; §§ 648-649.] TJ8TJET. 431 or to a subsequent mortgagee of the mortgaged premises,' or to a person holding a subsequent mechanic's lien upon the same prem- ises," or to a person who is assignee of the mortgagor's property for the benefit of his creditors," provided the assignment be not by its terms made for the purpose of paying, among other debts, the one infected with usury^ in which case, neither the assignee nor any other creditor claiming under the assignment, can set up the usury.* § 648. Right to allege usury cannot be transferred. — The borrower cannot transfer to another the right he has to allege and prove a demand to be usurious. The only way a third person can avail himself of usury, is by purchasing property charged with a lien or incumbrance which is usurious, and then only in protection of his title.' § 649. When mortgagor is estopped from setting up usury against assignee of mortgage. — As between the parties to a usu- rious contract the defense given by the statute is always available and no subtlety of language or apparent honesty in the form in which the transaction is veiled will serve to shield the usurer." The same prin- ciple will apply after the transfer of the rights of the lender to a person who accepts an assignment upon the faith of the appearance of the transaction or the statements of the assignor, since the assignee of a non-negotiable right of action takes it subject to all defenses between the original parties to it.' But where a mortgagor, by his acts or statements, leads an intending purchaser to believe that the mortgage was given to secure an honest debt and is free from usury, and such purchaser, relying on the mortgagor's acts and statements, Thompson v. Van Vechten, 27 N. Y. ' Pearsall v. Kingsland, 3 Edw. 195. 568, 585 ; Mason v. Lord, 40 N, Y. 476 ; * Murray v. Judson, 9 N. Y. (5 Seld.) Merchants' Ex. Bank v. Commission 73 ; Pratt v. Adams, 7 Paige, 615, 639. Warehouse Co., 49 N. Y. 636 ; Carow ^ Bullard v. Raynor, 30 N. Y. 197 ; V. Kelly, 59 Barb. 239 ; Jackson v. Tut- Boughton v. Smith, 26 Barb. 635 ; Post tie, 9 Cow. 233 ; Knickerbocker Life v. The Bank of Utica, 7 Hill, 391 ; Rex- Ins. Co. V. Hill, 6 N. Y. Sup. Ct. (T. & ford v. Widger, 2 N. Y. (2 Comst.) 131. C.) 285 ; s. c. 3 Hun, 577. * Birdsall v. Patterson, 51 N. Y. 43 ; ' Mutual Life Ins. Co. v. Bowen, 47 Fiedler v. Darrin, 50 N. Y. 437 ; Crip- Barb. 618 ; Union Dime Savings Insti- pen v. Heermance, 9 Paige, 211. tution V. Wilmot, 94 N. Y. 221, 228; ' Davies v. Austin, i Ves. 247; Mur- Hutchison v. Abbott, 33 N. J. Eq. 379 ; ray v. Lylburn, 2 Johns. Ch. 441 ; Liv- Cole V. Bausemer, 26 Ind. 94. ingston v. Dean, 2 Johns. Ch. 479 ; ' The Knickerbocker Life Ins. Co. v. James v. Morey, 2 Cow. 246 ; Mason v. Hill, 6 Sup. Ct. (T. & C.) 285. Lord, 40 N. Y. 476. 432 MOKTGAQ-ES OP EEAL PEOPEETT. [§§ 650-651. pays a valuable consideration and receires an assignment, neither the, mortgagor nor any other person thereafter claiming under him can impugn the validity of the security, even though it was specially con- trived to be sold as a means for borrowing money at a greater rate than that allowed by law.' No mere form will work an estoppel, and if the person relying upon an estoppel of the mortgagor by reason of a statement by him," or his agent in the special transaction ' have knowledge of the facts, such statement, though made for the purpose of afEording him legal protection, will be valueless for that purpose. An estoppel wiU not operate to enable a purchaser of a mortgage to make a speculation out of the falsehood of the mortgagor, and it wiU only protect him to the extent of the amount actually advanced by him upon the faith of the mortgagor's statement as to the validity of the security with legal interest.* This subject is more fully discussed in another part of this work under the head " Assignment of Mortgages." ° § 650. Strangers to usurious contract. — A surety cannot avail himself of usury paid by his principal to which he was not a party." And where a mortgagee assigned the mortgage as collateral for a debt of his own, and the assignee took usurious interest from the as- signor, the mortgagor cannot set up this usury against the assignee.' On a like principle, in a suit by a surety to enforce a mortgage given to him for his indemnity as indorser of a note, the maker of the note a.nd mortgagor cannot allege usury in the note as a defense, when the surety was not a party to_ the usurious agreement." § 651. Previous adjudication. — If a person has the right to inter- ' Weyh V. Boylan, 85 N. Y. 394 ; Ma- ' Shapley v. Abbott, 42 N. Y. 443 ; son V. Anthony, 3 Keyes, 609 ; Real Es- Kneettle v. Newcomb, 31 Barb. i6g. tate Trust Co. v. Seagreave, 49 How. ^ Hutchins v. Hebbard, 34 N. Y. 24 ; 4,89 ; L'Amoreaux v. Vischer, 2 N. Y. Plumb v. Cattaraugus Ins. Co., i8 N. (2 Comst.) 278 ; Nichols v. Nussbauni, Y. 394 ; Lawrence v. Brown, 5 N. Y. (I lo Hun, 214 ; Smyth v. Lombardo, 15 Seld.) 401. Hun, 415 ; Smyth v. Knickerbocker Life ' Payne v. Bumhaip, 62 N. Y. 69, rev'g Ins. Co., 21 Hun, 241 ; Smyth v. Mon- 2 Hun, 143 ; 4 N. Y. Sup. (T. & C.)678. roe, 19 Hun, 550 ; Barnett v. Zacharias, 'See ante, §§324 to 332. 24 Hun, 304 ; Fleischnian v. Stern, 24 ' Lamoille Co. Nat. Bk. v. Bingham, Hun, 265 ; Weyh v. Boylan, 85 N. Y. 50 Vt. 105. 394; Piatt V. Newcomb, 27 Hun, 186 ; 'Stevens, v. Reeves, 33 N. J, Eq. Weil V. Fisher, 42 N. Y. Super. (10 J. & 427, S.) 32. ' Turman v. Looper, 42 Ala. 500, §§ 652-653.] USTJEY. 433 pose the defense of usury against a mortgage as an incident to Lis estate, and for its protection, it can make no difference as to him, that in an action at law upon the bond, subsequent to the vesting of his rights in the property, the mortgagor had set up the defense of usury and had been defeated.' But a judgment entered either upon con- sent or otherwise between the mortgagor and mortgagee prior to the Testing of the rights of the third person, will biad him." § 652. Conveyances expressly subject to mortgages. — The purchaser of a mere equity of redemption in mortgaged premises in- cumbered by a usurious mortgage, who, by the terms of his convey- ance, takes the premises subject to the lien and payment of such mortgage, cannot set up the defense of usury, and thus obtain an in- terest in the land which the mortgagor never agreed or intended' to transfer to him.' Even if by the conveyance from the mortgagor the premises are declared to be " subject to any indebtedness from the mortgagor to the mortgagee," the grantee will not be allowed to show that the mortgage was void because of usury.* So, too, a pur- chaser at a master's sale of property for a certain price " over and above all incumbrances and liens thereon " cannot defend against a prior incumbrance on the ground of usury.' § 653. Reason of the rule. — The rule under which the defense of usury is denied to one who has purchased the mortgaged premises from the mortgagor, subject to the mortgage, is founded upon the supposition that on the purchase an allowance was made out of the purchase money with which to redeem the property purchased from the incumbrance ; and that the purchaser ought not, under such cir- cumstances, to avail himself of a statute not intended for his benefit." ' Berdan v. Sedgwick, 40 Barb. 359 ; erman, i Abb. N. S. 141 ; s. c. i Rob. s. c. afia'd 44 N. Y. 626. 30 ; Hardin v. Hyde, 40 Barb. 435 ; ^ French v. Shotwell, 5 Johns. Ch. 555. Freeman v. Auld, 44 N. Y. 50 ; BuIIard * Post V. Dart, 8 Paige, 639 ; Post v. v. Raynor, 30 N. Y. 206 ; Hartley v. Bank of Utica, 7 Hill, 391 ; Mechanics' Harrison, 24 N. Y. 172; Pinnell v. Bank v. Edwards, i Barb. 278 ; Green Boyd, 33 N. J. Eq. 190 ; Cramer v. Lep- V. Morse, 4 Barb. 332 ; Morris v. Floyd, pen, 26 Ohio St. 59 ; Green v. Kemp, 13 5 Barb. 137 ; Rexford v. Widger, 2 N. Y. Mass. 515 ; 7 Am. Dec. 169 ; Barthet v. (2 Comst.) 131 ; Given V. Kemp, 13 Mass. Elias, 2 Abb. N. C. 364 ; Smith v. Cross, 51s; Bridge v. Hubbard, 15 Mass. 103 ; x6 Hun, 487; Reed v. Eastman, 50 Vt.67. Reading v. Weston, 7 Conn. 413 ; De * Murray v. Barney, 34 Barb. 336. Wolf V. Johnson, 10 Wheat. 367 ; James ' Wells v. Chapman, 4 Sandf. Ch. 312 ; V. Oakley, i Abb. 324 ; Chamberlain v. s. c. affi'd 13 Barb. 561. Dempsey, 13 Abb. 6i ; s. c. 14 Abb. 241 ; « Morris v. Floyd, 5 Barb. 130 ; Cole s. c. 9 Bosw. 212, 540 ; Beecher v. Ack- v. Savage, 10 Paige, 583. 28 434 MOETaAGES OP EEAL PEOPEETY. [§§654-656. If the subsequent purchaser of the equity of redemption were al- lowed to set up usury as against the mortgage, it would hold out no relief to the borrower, but would only be transferring his money from the pocket of the lender to the pocket of the holder of the equity of redemption, and that too in open violation of his own valid contract.' Having taken his assignment or grant from the borrower, subject to a lien on the property tainted with usury, then, as to so much of the property as is necessary to satisfy such lien, he is not in privity with the borrower, for so much of the property is not assigned or'^ranted to him." §654. Pleading by plaintiff to exclude defense of usury. — When the defense of usury is interposed' to the foreclosure of a mortgage by the purchaser of the equity of redemption, the com- plainant cannot overcome it by proof that the lands were conveyed subject to the mortgage, unless his bill of complaint sets forth the execution and terms of such conveyance.^ § 655. Permitting defense after grant subject to mortgage. — Where the property has been transferred subject to a usurious mort- gage, it operates as an appropriation of the land in payment of the debt, which the borrower is unable afterward to retract, and the mort- gagee acquires a vested interest in the land to the extent of his lien, which it is not in the power of the mortgagor to release or discharge.* If the grantee has also assumed payment of the debt, it has been held that he may be relieved by his grantor from his personal liability,' though as to this there may still be some question." § 656. Mortgagor's defense after conveyance. — Although the mortgagor may have conveyed the equity of redemption, and his grantees,' while the title remained in them, were precluded from avail- iog themselves of the usury, still, on a reconveyance of the property beimg made to the mortgagor, he would not be restrained by any rule- from making a full defense.' ' De Wolf V. Johnson, lo Wheat. 392 ; ■* Hartley v. Harrison, 24 N. Y. 170. Sands v. Church, 6 N. Y. (2 Seld.) 347. 'Stephens v. Casbacker, 8 Hun, ^ See the valuable note of Judge Jones, 116. to Merchants' Ex. Nat. Bank v. Gom- ^ See ante, |§ 601 to 604. mercial Warehouse Co., 49 N. Y. 643. ' Knickerbocker Life Ins. Co. v. Nel- * Knickerbocker Life Ins. Co. v. Nel- son, 78 N. Y. 137 ; 7 Abb. N. C. 170, son, 78 N. Y. 137; 7 Abb. N. C. 170; affi'g 13 Hun, 321. Hetfield v. Newton, 3 Sand. Ch. 615. §§ 657-659.] usuEY. 435 It is competent for the mortgagor, to insist upon his defense of usury, even though, after the joining of issue, he has conveyed the estate and has been adjudged a bankrupt, and the plaintiff waives any personal claim against him.' §657. Judgment where only a lienor defends. — When the holder of a usurious bond and mortgage commences an action to en- force the same against the land, and makes a subsequent judgment creditor or mortgagee a party for the purpose of depriving him of his legal hen upon the premises, such judgment- creditor or mortgagee may avail himself of the defense of usury to the full extent of his legal lien. This, however, will not prevent the usual decree of fore- closure of the mortgagor himself, and a decree over against him for the deficiency, if he does not think proper to contest the plaintiff-'s right. And the only effect of the defense in such a case, will be to have the complaint dismissed as to the person defending; and the purchaser under the decree wiU take the title subject to the lien of the judgment or mortgage, if it should not be collected out of other property of the judgment creditor or mortgagor." § 658. Right of defense to mortgage reserved in deed. — A mortgagor has the. right to satisfy or to provide for the satisfaction of a usurious mortgage, and where he merely sells the equity of re- demption he is presumed to have made an application of the balance of the property for the purpose of satisfying the lien, which he is not afterward allowed to retract. But it is competent for the mortgagor to indicate in the conveyance, or by his agreement, that he desires • the purchaser to defeat the mortgage, and thus to rebut the pre- sumption of his contrary intention. Where, as part of his contract with the purchaser, he undertakes to indemnify the purchaser as against the mortgage, if the defense of usury fail, this furnishes no . cause for restricting the right of defense of the purchaser, and.cannot operate in any way for the benefit of the moi'tgagee.^ § 659. Usurious debt in assignment for creditors. — ^A bor- rower may himself pay a usurious debt or transfer property for the purpose of providing for its payment, and an assignee of property, in ■ Devlin v. Shannon, 65 How. 148. ^, f Vechten, 27 N. Y. 568 ; Mason v. Lord, 40 * Post V. Dart, 8 Paige, 639 ; Van Tas- N. Y. 476, 486. sell V. Wood, 12 Hun, 388 ; Dix v. Van ^ Berdan v. Sedgwick^ 40 Barb. 359 ; Wyck, 2 Hill, 522 ; Thompson v. Van s. c. affi'd 44 N. Y. 626. , -^^ 436 MORTGAGES OP EEAL PEOPEETT. [§§ 660-661. trust to pay certain specified debts cannot resist their payment on the ground of usury, and the bare fact that such an assignment pro- vides for the payment of a usurious debt will not of itself alone render the assignment usurious and void, and neither the trustee nor those who come as cestuis que trust can object to the legality of the assignment and the validity of the trusts therein contained.' So, where a mortgagor in an assignment for the benefit of his cred- itors made specific provision for the payment of a bond secured by mortgage, it was held that he could not thereafter defeat the mort- gage debt because of usury, and that the mortgagee to the extent of the money actually loaned, with legal interest thereon, was entitled to the benefit of the assignment, and that the fact that the mortgagee was also assignee was immaterial." § 660. Usury as a defense for the guarantor of the mortgage debt. — A person who assigns a mortgage impliedly warrants its legal soundness and vahdity, and if there are any exceptions to this rule they do not arise out of the vendor's own dealing with or in relation to the security. If, therefore, the mortgage be in its inception usu- rious, whether the assignor shall have guaranteed its payment or not, he will not be suffered to defend on the ground pf usiu-y in the mort- gage.' The exception to this rule would be where the assignment was colorable merely, as part of a contrivance to cover a usurious loan, the purchaser of the mortgage having knowledge of the true nature of the transaction and being a party to it. It may be, too, that an accommodation guarantor could defend on the ground of usury.* § 661. Guaranty of a mortgage sold at a discount. — If a valid mortgage be sold at a discount, an absolute guaranty of payment would not convert the sale of the mortgage into a loan of money upon the security and render the transaction usurious, but in such a case the guarantor woujd only be liable for the actual amount paid for the assignment, with interest thereon. In such cases the courts have ■gone behind the contracts of the parties, and have received evidence ■of the consideration of the agreements in order to limit the liability ■of the contracting parties and uphold the transactions. The contract ' Green v. Morse, 4 Barb. 332 ; Mur- ' Morford v. Davis, 28 N. Y. 481 ; Tay V. Judson, 9 N. Y. (5 Seld.) 73; Pratt Hoeffler v. Westcott, 15 Hun, 243. V. Adams, 7 Paige, 615, 639. * Parshall v. Lamoreaux, 37 Barb. ' Chapin v. Thompson, 8g N. Y. 270 ; 189. .Matter of Thompson, 30 Hun, 197. §§ 662-663.] USUBY. 437 in such a case is upon its face for the payment by the guarantor of the whole amount secured to be paid by the instrument negotiated, but the courts hold that the recovery should nevertheless be limited to the amount actually paid as a consideration for the undertaking, thus to some extent varying the terms of the contract.^ § 663. The usurer cannot avail himself of the statute. — It does not he in the mouth of the usurer himself to set up his own illegal conduct, and allege that a bargain which he has made is void on that ground. It is the victim of the usury, and not the usurer him- self, that can set up against a contract that it is usurious and void. He will not be permitted to show that a bond and mortgage are usurious and void so as to revive a judgment in payment for which they were given -^ nor that a conveyance made in payment of a valid mortgage was by way of usurious security, and therefore void ;" nor that an agreement to extend the time of payment of the mortgage debt by which the surety would be discharged is usurious and void ;* nor that the mortgage assigned by him with guaranty of payment was usu- rious, in order to escape from his liability as guarantor.^ § 663. Defense of usury by corporations. — A corporation is not allowed to interpose the defense of usury, and the prohibition ex- tends to associations and joint stock companies having any corporate powers or privileges not possessed by individuals or partnerships.' The courts have interpreted the word defense, as used in this statute, to mean more than the resistance of an action by a rehance on the usury laws, and to mean any position or attitude in which a corpo- ration seeks to avoid its own contract by showing that it is usurious. This interpretation was adopted because the contrary would defeat, it was said, all of the beneficial aims of the act, and because the courts were constrained to do so to save the purpose of it.' But there ' Goldsmith v. Brown, 35 Barb. 484 ; ^ Miller v. Kerr, Bayley's South Caro- Cobb V. Titus, 10 N. Y. (6 Seld.) 198 ; Una R. 4. Jones V. Stienbergh, i Barb. Ch. 250 ; ■* Draper v. Trescott, 29 Barb. 401 ; Munn V. Th? Commission Company, 15 Billington v. Wagoner, 33 N. Y. 31. Johns. 44 ; Braman v. Hess, 13 Id. 52 ; ^ Morford v. Davis, 28 N. Y. 481 ; El- Brown V. Mott, 7 Id. 361 ; Rapelye v. well v. Chamberlin, 4 Bosw. 320 ; s. c. Anderson, 4 Hill, 472 ; Cram v. Hen- affi'd 31 N. Y. 611. dricks, 7 Wend. 569 ; Mazuzan v. Mead, ^ Laws of 1850, c. 172, p. 334. 21 Id. 285 ; Sutherland v. Woodruff, 26 'Curtis v. Leavitt, 15 N. Y. 9 ; South- Hun, 411. ernL. I. & T. Co. v. Packer, 17N.Y. 51 ; ' La Farge v. Herter, 4 Barb. 346 ; Rosa v. Butterfield, 33 N. Y. 665 ; But- s, c. affi'd 9 N. Y. \5 Seld.) 241. terworth v. O'Brien, 23 N. Y. 275 ; Mer- 438 MOKTaAGES OF EEAL PEOPEETT. [§ 664. is nothing in the statute wHch forbids the assertion by a corporation of a right of action to which it has rightfully succeeded, and which is dependent upon the provisions of the usury law, and a corpo- ration which succeeds to the legal rights of a party who might avail himself of usury, is not precluded by this statute from setting up that right.' An accommodation indorser for a corporation cannot defend on the ground of usury." § 664. Pleading usury as a defense. — The defense of usury must, in order to be available, be properly pleaded, and this is es- pecially the case where a contract or other cause of action, valid on its face, has been assigned, since the defendant should not be permit- ted to defeat the plaintifE's claim on the ground that the contract was void in its inception by reason of fraud, illegality, or the Kke, without apprising him specificallyof thefacts relied on to establish such defense.' An answer setting up the defense of usury must set forth the usurious agreement, the names of the parties between whom it was made, the amount loaned, the amount of usury agreed to be paid, the length of time for which the loan was agreed to be made, and that the agreement was corrupt." Such an answer is sufficient if it alleges the facts with such pre-^ cision and certainty as to make out on the face of the pleading that a usurious contract has been entered into/ Usury must be strictly proved as alleged, and any variance is fatal.' Thus, where the answer charged that the plaintiff took $2,900 in ex- cess of legal interest for the loan or forbearance of the mortgage debt of $50,000, and the proof showed that the total amount received by the plaintiff was $2,125, this was held fatal to the defense.' chants' Ex. Nat. Bank v. Commercial v. Homer, I2 Id. 6or ; Banks v. Van W. Co., 49 N. Y. 635, 641. Antwerp, 5 Abb. 41L ; Smalley v. ' Merchants' Ex. Nat. Bank v. Com- Doughtey, 6 Bosw. 66 ; Nat'l Bk. of mercial W. Co., 49 N. Y. 635. Metropolis v. Orcutt, 48 Barb. 256. ' Stewart V. Bramhall, 11 Hun, 139. 'National Bank v. Lewis, 75 N. Y. 'Fay V. Grimsteed, 10 Barb. 321; 516, rev'g 10 Hun, 468 ; Fiedler v. Dar- Gould V. Horner, 12 Id. 601; Watson v. rin, 50 N. Y. 437 ; Merchants' Ex. Nat. Bailey, 2 Duer, 509 ; Scott v. Johnson, Bk. v. Commercial Warehouse Co., 49 5 Bosw. 213, 224 ; Mechanics' Bank of N. Y. 635 ; Reinback v. Crabtree, 77 111. Williamsburgh v. Foster, 44 Barb. 87 ; 182, 188. Haywood V. Jones, 10 Hun, 500. «Hetfield v. Newton, 3 Sand. Ch. * Manning v. Tyler, 21 N. Y. 567 ; 564. fay V. Grimsteed, lo Barb. 321 ; Gould __' Wheatbn v. Voorhis, 53 How. 319. §§665-666.] TJSUKY. 439 The onus of proving usury rests upon the defendant alleging it, and the appellate court will not in a doubtful case reverse the finding of the trial court holding the transaction to be valid.' § 665. Affirmative relief in equity against usurious mort- gages. — Independent of our statute, if a borrower comes into a court of equity seeking relief against a usurious contract, the only terms upon which the court will interfere are, that the plaintiff will pay the defendant what is really and hona fide due to him, deducting the usurious interest, and if the plaintiff do not make such offer in his bill, the defendant may demur to it, and the bill will be dismissed." The plaintiff asking equity wiU be compelled to do equity. But a statute of this State provides that whenever any "bor- rower " shall apply for relief in chancery against a usurious loan, it shaU not be necessary for him to pay or offer to pay any interest or principal on the sum or thing loaned ; nor shall any court of chancery require or compel the payment or deposit of the principal sum or in- terest, or any portion thereof, as a condition of granting relief.^ The statute does not authorize the institution of an action in equity to annul a contract or instrument for usury, in any case in which such an action could not have been maintained before the passage of that act. It merely changes the terms upon which the " borrower " may obtain relief in a proper case.* As to the " borrower," he may obtain relief without paying or offering to pay any part of the money loaned ; but as to all other persons, the rule since the statute is the same as it was before its passage. In order to obtain equitable relief, all persons except the " borrower " must still do equity ; but at law, any person who is in privity with the borrower, either in blood or estate, may set up the usury as an absolute bar and defense." § 666. Who must repay money borrowed as a condition for relief. — The court still retains power to compel all persons, the bor- rower included, to do equity as to everything except the repayment of money borrowed. When, therefore, the plaintiff asks that a mort- gage be cancelled as a cloud upon the title to his lands, and that a court of equity shall so direct, in virtue of its power and its disposi- ' Haughwoutv. Garrison, 69 N.Y. 339. Y. (3 Comst.) 498; AUerton v. Belden, ' Fanning v. Dunham, 5 Johns. Ch. 49 N. Y. 378. 142 ; Story's Eq. Jur.. § 301. * Bissell v. Kellogg, 60 Barb. 617, 'i R. S. 772, § 8 ; Laws of 1837, c. affi'd 65 N. Y. 432 ; note of Jones, J., to 430. § 4- Merchants' Ex. Nat. Banli v. Commer- *Minturn v. Farmers' Trust Co., 3 N. cial W. Co., 49 N. Y. 642. 440 MOETGAGES OF EEAL PEOPEBTT. [§ 667. tion to enforce his equitable rights, the court may not require that he pay a usurious debt, or any part thereof, or any interest thereon, but it may require the performance of any other duty which is just to the adverse party, unembarrassed by the statutes in question.' If any one but the borrower apply to a court of equity for relief as against a usurious security, he must in his complaint offer to repay the money actually loaned. If he fails to do this, his complaint will be fatally defective, and a demurrer will be sustained on that ground." But if the defendant omits to demur, the relief will be granted and the payment of the money justly due wiU be imposed as a condition for such relief in the decree.' § 667, Who is a " borrower " within the meaning of the stat- ute. — The term "borrower" used in this statute has been construed to mean any person who was bound by the original contract to pay the original sum borrowed.* This would include the heir, devisee, and personal representative of the borrower, for though not imme- diate direct parties to the original contract, they are bound by it when they succeed to the estate of the testator or intestate.' It has been said that a surety, being a party upon the original con- tract, and liable upon it equally with the principal who borrows the money, is a " borrower " within the meaning of the act,' but the more recent cases hold that he is not a " borrower," and that he does not come within the exemption created by the statute.' The pur- chaser at a sheriff's sale of premises covered by a usurious mortgage is not a " borrower " of the money loaned to the mortgagor, and can- not maintain an action to cancel the mortgage without paying the money loaned and interest ;' nor is the person who purchases prop- erty pledged for the payment of a usurious loan ;° nor a person who ' Williams V. Fitzhugh, 37 N. Y. 444. " Post v. The Bank of Utica, 7 Hill, ' Post V. The Bank of Utica, 7 Hill, 391 ; Livingston v. Harris, 11 Wend. 391 ; Allerton v. Belden, 49 N. Y. 373. 329, 336. ' Allerton v. Belden, 49 N. Y. 373 ; « Post v. The Bank of Utica, 7 Hill, Schermerhorn v. Talman, 14 N. Y. (4 391 ; Perrine v. Striker, 7 Paige, 602 ; Kern.) 93, 129 ; Livingston v. Harris, 3 Livingston v. Harris, 11 Wend. 336. Paige, 528; Fanning V. Dunham, 5 Johns. 'Vilas v. Jones, i N. Y. (i Comst.) Ch. 122 ; Beecher v. Ackerman, i Robt. 274. 30 ; s. c. I Abb. N. S. 141 ; Bissell v. " Post v. The Bank of Utica, 7 Hill, Kellogg, 65 N. Y. 432, affi'g 60 Barb. 391. 617. ° Beecher v. Ackerman, i Robt. 30 ; * Livingston v. Harris, 11 Wend. s. c. i Abb. N. S. 141 ; O'Brien v. Fer- 329. guson, 37 Hun, 368. § 668.] USURY. 441 purchases the property mortgaged from the mortgagor ;' and this was held to apply to the mortgagor himself in a case where, having been adjudicated a bankrupt and having received a discharge from his debts, he purchased the property from his assignee in bankruptcy." An assignee in bankruptcy of the mortgagor is not a " borrower," ' neither is an assignee for the benefit of creditors,^ nor a devisee or executor of the mortgagor.' It has been said that the mortgagor ceases to be a " borrower " after a conveyance by him of the mort- gaged property.' The equitable owner of land, for whose benefit and at whose re- quest the person holding the legal title executes a bond and mortgage, is a " borrower " within the meaning of the statute, and may maintain an action to set aside a mortgage without repaying the money loaned, or he may set up such a right of action as a counter-claim in an action brought by the mortgagee to foreclose.' But if he desires to avail himself of such a counter-claim, he must call it a counter-claim in his answer and demand affirmative relief.* § 668. Validity of an extension for a usurious consideration. — Since an agreement to extend payment of a mortgage for a usurious consideration is void, the mortgagee may, notwithstanding such ex- tension, forthwith commence an action to foreclose." And assuming that the agreement is binding at the election of the person paying the usury, he disaffirms it by insisting that the consideration paid should be credited on the mortgage, and having received the credit he is not entitled to the benefit of the extension." Where the consideration for the extension is a mere promise to pay usury in the future, the extension is more clearly void than it is where ' Allerton v. Belden, 49 N. Y. 373 ; ' Marsh v. House, 13 Hun, 126 ; Buck- Chamberlain V. Dempsey, 36 N. Y. 144, ingham v. Corning, 91 N. Y. 525, affi'g 149 ; Schermerhorn v. Talman, 14 N. Y. 64 How. 503. 93 ; Rexford v. Widger, 3 Barb. Ch. * Smith v. Cross, i6 Hun, 487. 640 ; s. c. 2 N. Y. (2 Comst.) 131 ; Post ' Equitable Life Ass. Soc. v. Cuyler, V. The Bank of Utica, 7 Hill, 391 ; Cole 12 Hun, 247. V. Savage, Clarke, 482, rev'd 10 Paige, ° Equitable Life Ass. Soc. v. Cuyler, 583, but approved in 7 Hill, 391, and the 12 Hun, 247 ; Burrall v. De Groot, 5 decision reversing it pronounced the bet- Duer, 379 ; Bates v. Rosekrans, 23 How. ter doctrine. 98. ^ Schermerhorn v. Talman, 14 N. Y. ° Jones v. Trusdell, 23 N. J. Eq. 555 ; 93. Id. 121; Vilas V.Jones, i N. Y. (i Comst.) 3 Wheelock v. Lee, 64 N. Y. 242. 274 ; Church v. Maloy, 70 N. Y. 63. * Wright V. Clapp, 28 Hun, 7. '» Church v. Maloy, 70 N. Y. 63. 442 MOETGAGES OE REAL PKOPERTT. [§§ 669-671. the money is paid and the borrower desires to abide by the con- tract.' If the extension be made upofi a usuriotis consideration, it will, nevertheless, operate to extinguish claims against a surety. It is not competent for the usurer to claim an advantage from the illegal character of his contract." § 669. Sales under powers contained in usurious mortgages. — A purchaser at a sale of mortgaged premises under a power of sale contained in a usurious mortgage, with notice of the usury, ac- quires no title/ but a iona fide purchaser is protected.' § 670. Effect of usurious contracts upon prior valid obliga- tions. — It is well settled that when a valid debt exists and a usurious security is taken for it, the avoidance of the usurious security revives the debt," and the transfer of the usurious security, though in form limited to that, must be deemed to carry with it all the rights of thd party in respeci3|to the debt which was its basis, including the right to enforce the old security in case the new one is avoided." So, where a valid contract is made for the sale of lands, but the bond and mortgage given for the unpaid purchase money is void for usury, the vendor will still retain his equitable lien.' § 671. Usurious bonus paid for extension of time. — On a similar principle, a usurious agreement made to extend the time for the payment of a valid mortgage does not operate to extinguish the original obligation. The usury simply avoids the agreement for further forbearance. It renders that invalid, without annulling the original debt or the securities given for its payment.* Where a payment is made by the borrower as a consideration for such exten- sion, over and above the legal interest, this will be treated as a pay- ' Jones V. Trusdell, 23 N. J. Eq. 554 ; sted Bank v. Wetb, 39 N. Y. 325, Id. 121. 330. ^ Billington v. Wiagoner, 33 N. Y. 31 ; * Gerwig v. Shetterly, 64 Barb. 620, Draper v. Trescott, 29 Barb. 401 ; Miller affi'd 56 N. Y. 214. V. McCan, 7 Paige, 451 ; Vilas v. Jones, ' Crippen v. Heermance, 9 Pa:ige, 211. 10 Paige, 76. ' Real Estate Trust Co. v. Keech, 7 'Jackson v. Dominick, 14 Johns. 435; Hun, 253, afE'd 69 N. Y. 250 ; The Win- Bissell V. Kellogg, 65 N. Y. 432, affi'g 60 sted Bank v. Webb, 39 N. Y. 325 ; Crip- Barb. 617 ; McLoughlin v. Cosgrove, 99 pen v. Heermance, 9 Paige, 21 1 ; Bush Mass. 4. V. Livingston, 2 Cai. Cas. 66 ; Williams * Jackson v. Henry, 10 Johns. 185; v. Allen, 7 Cow. 316; Carson v. Ingalls, Elliott V. Wood, 53 Barb. 285. 33 Barb. 657 ; Lesley v. Johnson, 41 Id. ' Cook V. Barnes, 36 N. Y. 520 ; Win- 359 ; Williams v. Fitzhugh, 44 Id. 322. § 672.] ITSUET. 443 ment on account of the original obligation.' The right of the debtor to have the usurious bonus applied to reduce his indebtedness, is not dependent upon the statutory provision which allows the re- covery by the debtor of usurious premiums paid by him, provided they be sued for within one year. It arises out of the equities of the transaction, which justly apply the money received by the creditor, as the consideration of a usurious agreement for the extension of the credit, in part payment of the debt. The agreement being void, no other disposition can equitably be made of the money paid by the debtor under it." § 672. Usury in one contract not applied upon a different contract. — In order to require an application of a usurious bonus upon a mortgage debt, it must appear that the excessive payment was made upon that debt and upon no other. Thus, where a mort- gagor of three mortgages to the same mortgagee, had paid the first two with usurious interest, it was held that he was not entitled to have the usury applied upon the third mortgage.^ ' Real Estate Trust Co. v. Keech, 7 mond, 2 Abb. N. C. 368 ; Langdon v-. Hun. 253, affi'd 69 N. Y. 250 ; Crane v. Gray, 52 How. 387 ; Nightingale v. Me-- Hubbel, 7 Paige, 413, 417 ; Judd v. Sea- ginnis, 34 N. J. L. 461 ; Patterson v. ver, 8 Id. 548 ; Abrahams V. Claussen,. 52 Clark, 28 Ga. 526; Real Estate Trust How. 241 ; Langdon v. Gray, 52 How. Co. v. Rader, 53 How. 231. 387 ; Terhune v. Taylor, 27 N. J. Eq. ' Real Estate Trust Co. v. Keech, 7 80 ; Laing v. Martin, 26 N. J. Eq. 93 ; Hun, 253, affi'd 69 N. Y. 250. Smith V. Myers, 41 Md. 425 ; Maryland ' Dickey v. Land Co., 63 Md. 170; Car- Perm. L. and B. Soc. of Bait. v. Smith, riage Co. v. Kinsella, 31 Conn. 272 ; 41 Md. 516 ; Church v. Maloy, 70 N. Y. Freedman v. Gamble, 26 N. J. Eq. 63, afE'g 9 Hun. 148 ; Earle v. Ham- 494. CHAPTEE XVIII. EEDEMPTION. 1 673. Nature of the right to redeem. 674. The right of redemption is a legal incident to every mortgage. 675. Who is entitled to redeem. 676. Analogous right of surety. 677. Methods of extinguishing the right to redeem. 678. Sale of equity of redemption to mortgagee. 679. If the original mortgage is in form an absolute deed. 680. The mortgagee is entitled to hold the entire pledge. 681. Mortgagee protected against re- demption of entire estate. 682. Other claims of mortgagee. 683. Remedy of a part owner. 684. Contribution among parties en- titled to redeem. 685. Who is entitled to an assignment. 686. Examples. §687. Distinction between redemption and subrogation. 688. When assignment may be re- quired. 689. The owner of a junior mortgage not yet due. 6go. How the mortgagee may be com- pelled to execute an assignment. 6gi. Taxes paid by mortgagee. 6g2. Redemption after a defective fore- closure. 693. When an action to redeem is barred by the statute of limita- tions. 694. The right of action accrues. 695. Where several persons are entitled to redeem. 696. Admissions by mortgagee. 697. Action to remove mortgage as a cloud. 698. Right to redeem lost by laches. § 673, Nature of the right to redeem. — The estate of the mort- gagor is commonly spoken of as an equity of redemption. This is not strictly correct until the estate has become forfeited at law by the non-payment at the time appointed, of the money secured by the mortgage, since, prior to a breach of the condition, th*e right to re- deem is a legal right ; it is only after the remedy of the mortgagor is gone at law, that he may properly be said to have only an equity of redemption in the land.^ There is but little if any difference in this State, between the rights of the mortgagor before and after the time when the covenant secured by the mortgage ought to be performed, and, while his estate might, perhaps, be better termed a right of redemption, the phrase equity of redemption need not be misunder- stood. ' Bouvier's Law Die, tit. Equity of Redemption. § 674. J EEDEMPTION. 445 The right to redeem is the right to pay the debt and to have the lien discharged, and it therefore follows that, until the debt is due and payable, no redemption can be had.' But it may not be left to the mortgagee to elect that the debt is either due or not, as he prefers, and a mortgage payable on or before a specified date may be re- deemed at any time.^ Eedemption can only be effected by a satisfaction of the debt secured.' In a case where a mortgagee has been in possession of the property, complicated questions of account may arise, which are con- sidered in another part of this work.* § 674. The right of redemption is a legal incident to every mortgage, and is guarded most jealously to prevent fraud or oppres- sion. If the contract or transaction is in reality a mortgage, or secu- rity for a debt, whatever may be the form in which it is expressed, the legal incidents of the right of redemption are thereby attached to it and cannot be controlled by agreements.' The rule " once a mort. gage, always a mortgage " is inflexible,' and every agreement intended to destroy the right to redeem will be disregarded and treated as null. As Lord Eldon observed : " Tou shall not, by special terms, alter what this court says are the special terms of that contract." ' So, a provision in a defeasance intended to limit the right of redemption to the mortgagor personally, has been held to be void.' And a pro- vision that the conveyance be absolute if redemption be not made within a specified time, would also be void.° The same rule would govern a contract on the part of the mortgagor contemporaneous with the mortgage, that he would, upon default, forthwith release his equity of redemption.'" Ev-en if the mortgage is in the form of an absolute conveyance, with a parol defeasance, the terms of the understanding entered into at the time of the execution of the deed, will not be merged in any ' Abbe V. Goodwin, 7 Conn. 377. Simon v. Schmidt, 2 N. Y. S. Reptr. ' ' In re John and Cherry Sts., 19 Wend. 388. 659. ' Seton V. Slade, 7 Ves. Jun. 273 ; "Fogal V. Pirro, 17 Abb. Pr. 113. Toomes v. Conset, 3 Atk. 261 ; Floyer * Chapter VIII., ante, p. 160, et seq. v. Livingston, i P. Wms. 268. ' Henry v. Clark, 7 Johns. Ch. 40 ; s. ' Johnston v. Gray, 16 S. & R. 361 : c. affi'd Clark v. Henry, 2 Cow. 324 ; Howard v. Harris, i Vern. 33 ; Spurgeon Holridge v. Gillespie, 2 Johns. Ch. 30 ; v. Collier, i Eden, 55. Bailey v. Bailey, 5 Gray, 510 ; Peughv. "Stove v. Bounds, i Ohio St. 107. Davis, 96 U. S. 332. '° Clark v. Henry, 2 Cow. 324, affi'g 7 ' Newcomb v. Bonham, I Vern. 8 ; Johns. Ch. 40. 446 MORTGAGES OF EEAL PEOPEETT. [§§ 675-676. subsequent written agreement, and 110 subsequent agreement can con- vert it into a mortgage, unless on a sufficient consideration, and fairly done.' § 675. Who is entitled to redeem. — Tbe right to redeem belongs to the mortgagor and to all persons entitled to any interest 'in any part ' of the mortgaged estate under him. On the other hand, it may also be said that, in general, no person can come into a court of equity for a redemption of a mortgage, biit he who is entitled to the legal estate of the mortgagor, or who claims a subsisting interest under him.' The owner of a leasehold interest in a part of the mortgaged premises may redeem,' as also may a person in possession of the land, or any part of it, under a parol contract for the pm-chase of it." Sp, too, a second mortgagee, or a judgment creditor, or a person holding a lien or charge upon the mortgaged premises, which he would lose by a foreclosure of the mortgage, may redeem for the protection of his interest.' A judgment creditor whose judgment is a lien upon the equity of redemption, may redeem without first issuing an execution.' A person having an interest in or lien upon the estate, has a clear right to disengage the property from all incumbrances in order to make his own claim beneficial or available.' But a mere creditor of the mortgagor, who has no interest in or lien upon the mortgaged estate, apart from his general claim as against aU of the assets of the mortgagor, cannot, on his own behalf, redeem from the mortgage.' § 676. Analogous right of surety. — ^If the right to redeem from the mortgage, and by such redemption to stand in the place of the mortgagee, and hold his interest in the land, is treated as identical with the right to make payment, then this right may be said to be- long to every surety for the mortgage debt, even if he has no interest ' Brownlee v. Martin, 21 S. C. 392; .582;- King v. McVickar, 3 Sandf. Ch. Brick V. Brick, 98 U. S. 514 ; Peugh v. 199; Brainard v. Cooper, 10 N. Y, (6 Davis, 96 U. S. 332 ; Morgan v. Shinn, Seld.) 356 ; Averil v. Taylor, 8 N. Y. (4 15 Wall. 105. Seld.) 44 ; Quin v. Brittain, Hoff, 353 ; ' Boqut V. Coburn, 27 Barb. 230. Dings v. Parshall, 7 Hun, 522 ; May v. ' Grant v. Duane, 9 Johns. 611 ; Hoi- Gates, 137 Mass. 3S9 ; Chandler v. Pyer, den V. Risan & Co., 77 Ala. 515. 37 Vt. 345. ♦ Averil v. Taylor, 8 N. Y. (4 Seld.) 44. ' Brainard v. Cooper, 10 N. Y. 356 ; ' Lowry v. Tew, 3 Barb. Ch. 407. Van Buren v. Olmstead, 5 Paige, 9. ' Haines v. Beach, 3 Johns. Ch. 460 ; ° Story's Eq. Jur. § 1023. Norton V. Warner, 3 Edw. 106; Rose- 'Grant v. Duane, 9 Johns. 611 ; Story's velt V. The Bank of Niagara, i Hopk. Eq. Jur. § 1023 ; Coote on Morts. 538. . §§ 677-678.] EEDEMPTION. 447 in or lien upon the mortgaged estate ; for, upon the equitable princi- ple of subrogation, a surety who has satisfied a demand is entitled to hold the securities of the creditor and to enforce them as against the person and the fund primarily liable.' § 677. Methods of extinguishing the right to redeem. — It is the right of the mortgagee to have the land appropriated for the pay- ment of his debt, and this right may be enforced by foreclosure or by a sale ; it is the right of the mortgagor to retain the land upon satis- fying the claims which the mortgage is intended to secure, and the process of cancelling the rights of the mortgagor by payment is termed redemption. The right to redeem accompanies every mortgage -^ it is guarded most jealously by the courts in order to prevent injustice and oppression," and it can only be extinguished by the free act of the mortgagor for a valuable consideration,' evidenced by a grant un- der seal, by the judgment of a court or proceedings out of court, which are the statutory equivalent of such a judgment, or by the neglect of the mortgagor to assert it for such a length of time that he is presumed by law to have relinquished it. § 678. Sale of equity of redemption to mortgagee. — The most common way to dissolve the relation of mortgagor and mortgagee, is to call upon the mortgagor to redeem or be foreclosed, and to compel such redemption or foreclosure by some legal means." But it is quite competent for either party to assign and transfer his rights to the other ; and while the courts will not. permit a mortgagee to take any undue advantage of the mortgagor, there is nothing to prevent the former, by a new and subsequent agreement, from acquiring the equity of redemption in good faith and upon a good considera- tion." A transaction of that kind is, however, regarded with jealousy by courts of equity, and will be avoided for fraud, actual or constructive, or for any unconscionable advantage taken by the mortgagee in ob- ' Averil v. Taylor, 8 N. Y. (4 Seld.) ' Odell v. Montross, 68 N. Y. 499, rev'g 44,- 51. 6 Hun, 155; Remsen v. Hay, 2 Edw. ° Henry v. Davis, 7 Johns. Ch. 40, 535 ; Trull v. Skinner, 17 Pick. 213 ; affi'd 2 Cow. 324. Harrison v. Trustees, etc., 12 Mass. 456; 2 Holridge v. Gillespie, 2 Johns. Ch. 30. Vernum v. Babcock, 3 Iowa, 194; Green ■• Odell V. Montross, 68 N. Y. 499, v. Butler, 26 Cal. 595 ; Wynkoop v. Cow- rev'g 6 Hun, 155. ing, 21 111. 570 ; Falis v. Conway Ins. s Case V. Carroll, 35 N. Y. 385 ; Stod- Co., 7 Allen, 46. dard v. Whiting, 46 Id. 627. 448 MOETGAOES OP EEAL PEOPEETT. [§ 679. taining it. It will be sustained only when iona fids — that is, when in all respects fair and for an adequate consideration.' § 679. If the original mortgage is in form an absolute deed, and the eyidenee of the right to redeem is contained in a separate instrument, or is by parol preserved only in the recollection of the parties, this circumstance does not vary the rights of. the parties, or create any new rule by which their positions with reference to each other and to the property can be changed. The grantor is still only a mortgagor, and has an estate in the land subject only to the lien thereon held by the grantee. In such a case the grantor having, not- withstanding his conveyance, a legal estate in fee, he can only be divested of it, except by way of estoppel, by some instrument which wiU be valid under the statute of frauds, and in compliance with the statute prescribing the mode and manner of conveying lands. These two statutes together require that the evidence of such a transfer must be in writing, and shall be subscribed and sealed by the person making the grant, or his lawful agent." In Oddl V. Montross (68 IST. T. 499, rev'g 6 Hun, 155) the de- feasance was by parol, and the grantor acknowledged in writing the receipt of $50 " in full satisfaction for all claims and demands what- soever as to the conveyance of property or otherwise "; it was found as a fact that the purpose of the transaction was to constitute a full settlement of all claims of plaintiff to the lands, and of all claims to any reconveyance thereof, but it was nevertheless determined that the equity of redemption of the grantor was not thereby released or affected. It was, however, remarked by the court that if the grantee had, acting upon the faith of the transaction, entered into possession of the premises and incurred expenses, and substantially changed his situation so that he could not be placed in the same position in which he was before, it might have estopped the plaintiff from taking shelter under the statute of frauds, or alleging the insufficiency of the written instrument to carry out the agreement and intent of the par- ' Villa V. Rodriguez, I2 Wall. 323 ; chap. 16, § i ; Odell v. Montross, 68 N. Barnes v. Brown, 71 N. C. 507 ; Trull Y. 499. V. Skinner, 17 Pick. 213; Patterson v. ' Odell v. Montross, 68 N.Y. 499, rev'g Yeaton, 47 Maine, 306 ; Ford v. Olden, 6 Hun, 155 ; 2 R. S. 135, § 8 ; i R. S. L. R. 3 Eq. Cases, 461; Remsen v. Hay, 738, § 137 ; contra. West v. Reed, 55 111. 2 Edw. Ch. 535 ; Holridge v. Gillespie, 242 ; Harrison v. Trustees, 12 Mass. 2 Johns. Ch. 30 ; Wash, on Real Prop., 456 ; Green v. Butler, 26 Cal. 595. § 680.J REDEMPTION. 449 ties.' It was also said that if the paper had, in itself, evidenced an intent to grant the estate of the giantor, and a seal only had been wanting to make the instrument valid for the purpose intended, the court might have compelled the sealing.' - • If the mortgage be, upon its face, an absolute deed, and the mort- gagee be in possession, a iona Jide purchaser from the mortgagee will take the estate discharged from the right of redemption, and the mortgagee's remedy will be against the mortgagor.' § 680. The mortgagee is entitled to hold the entire pledge until he receives payment of the entire debt which it was created to secure." The court cannot require the surrender of a part of the lien on payment of a part of the debt, even for the purpose of doing manifest equity to persons holding divided interests in the estate sub- ject to the mortgage.' So, where tenants in common united in a joint mortgage for a joint and several debt, one of them has no equity to compel the mort- gagee to receive half the debt, and to proceed against his co-tenant's moiety for the collection of. the other half, although he tenders a sufficient bond of indemnity against eventual loss." It has even been held that a tenant in common with the mortgagee of mortgaged premises, cannot redeem from his co-tenant without paying the whole amount due upon the mortgage.' A grantee of a portion of the mortgaged property,' or a judgment creditor of the owner of a portion of it," or a junior lienor by mort- gage of a portion of it," must pay the entire debt in order to redeem if the mortgagee requires such payment. Where one purchases land incumbered by two mortgages, each on an undivided half, and assumes both as part of the purchase money, he cannot redeem one without redeeming the other, because such an agreement consolidates the mortgages." ' 68 N. Y. 505. ' Merritt v. Hosmer, 77 Mass. (11 « 68 N. Y. S06. Gray) 276. ' Whittick V. Kane, i Paige, 202. " Smith v. Kelly, 27 Me. 237 ; 46 Am. *Lamb v. Montague, 112 Mass. 352 ; Dec. 595; Andrews v. Hubbard, 50 Conn. Merritt v. Hosmer, 11 Gray, 276. 351 ; Boqutt v. Coburn, 27 Barb. 230. 'Johnson v. Candage, 31 Me. 28; "Franklin v. Gorham, 2 Day (Conn.) Smith V. Kelley, 27 Me. 237; MuUanphy 142 ; 2 Am. Dec. 86. V. Simpson, 4 Mo. 319. '" Dick v. Livingston, 2 How. N. S. 10; ' Frost V. Bevins, 3 Sand. Ch. 188 ; Spurgin v. Adamson, 62 Iowa, 661 ; Crofts V. Crofts, 79 Mass. (13 Gray) 360; Street v. Beal, 16 Iowa, 68. Lyon V. Robbins, 45 Conn. 513. " Wells v. Tucker, 57 Vt. 223. 29 450 MOETaAGES OF HEAL PROPEBTT. [§§ 681-682. § 681. Mortgagee protected against redemption of entire estate. — ^The rule which requires the entire debt to be paid as a con- dition for the release of any part of the mortgaged premises from the lien of the mortgage is for the protection of the mortgagee. It may be waived by him, and by his voluntary release he may discharge his lien from any part of the property if he will, as against the other parties in interest, deduct from his claims an amount which, tinder the special facts of the case, is adjudged to be equitable.' And if the mortgagee has any equities which require for their protection that he shall resist redemption as to any part of the mortgaged estate, he may enforce the mortgage as against the balance for its equitable share, or he can defeat an attempt on the part of the owner or subsequent lienor on a part of the property to redeem from the whole lien. Thus, where the mortgagee also holds by grant or estoppel any in- terest in the equity of redemption, he may require that only the specific portion of the estate owned by the person seeking redemp- tion shall be discharged of the lien on payment of an equitable por- tion of the debt. Where several persons were entitled to redeem, but the rights of some of them were barred by the statute of limita^ tions, those whose rights were not barred were permitted to redeem their shares by paying their proportion of the debt secured by the mortgage." So, the owner of a portion of the mortgaged property, not made a party to a foreclosure under which the mortgagee pur- ■chg,sed the balance, was held entitled to redeem his land by paying a fair share of the debt.' And the same principle has been applied where a junior mortgagee of a part of the estate has sought to redeem from the previous mortgage, and the mortgagee elected to require that only that part be redeemed.* And where the mort- gagee has foreclosed a portion of the premises and acquired title to it, he can insist that the owner of the remainder shall redeem his land only, by paying the amount of the debt with which he is equitably chargeable." § 683. Other claims of mortgagee.— "Where the mortgagee has expended moneys in protecting the property against prior incum- > See ante, §§ 381 to 388. Murphy, 21 Cal. 108 ; Martin v. Kelley, ' Fogal V, Pirro, 17 Abb. 113 ; s. c. 10 59 Miss. 652. Bosw. loo. ' Dukes v. Turner, 44 Iowa, 575 ; 2 Green v. Dixon, 9 Wis. 532. Dooley v. Potter, 140 Mass. 49 ; Fogal ■•Kirkham v. Dupont, 14 Cal. 559; v. Pirro, 10 Bosw. 100; George v. Wood, Grattan v. Wiggins, 23 Cal. 16 ; Funk v. 11 Allen, 41. §§ 683-684.] EEDEMPTION. 451 brances, redemption can only be made by paying these disbursements in addition to the original debt.' But where the mortgagee holds another debt of the mortgagor, not secured by lien upon the property, he cannot require payment of this as a condition for permitting redemption from' the mortgage.' And a mortgage lien may be discharged without paying junior liens on the same premises also held by the mortgagee.' We have already seen that the English doctrine of " tacking " has never been approved in this State, and that it has been held to be inconsistent with our recording acts." § 683. Remedy of a part owner. — A person who has redeemed an entire estate to protect an interest in only a part of it, will be sub- rogated to the rights of the mortgagee for his indemnity, and may en- force the lien as against the persons and property who ought equitably to contribute. The mortgage debt will then be apportioned as justice may require." This may be done without any formal assignment, but an assignment will sometimes be required from the mortgagee." § 684. Contribution among parties entitled to redeem. — "Where two persons purchase separate parcels of a lot of land previ- ously mortgaged, and one of them afterward pays more than his share of the mortgage money, he may call on the other for contribu- tion for his share.' In computing the amount that each share should bear of the common burden, the value of each part as of the date of the mortgage, exclusive of improvements since added by either party, is the controlling test.' The numerous cases where the holders of portions of the equity of redemption are not equitably bound in equal degrees to discharge the lien, have been considered in another chapter of this work." 'Madison Av. Bap. Ch. v. Oliver St. ' Haines v. Beach,3 Johns. CIi..45g,466. ■ Bap. Ch., 73 N. Y. 82, 95 ; Benedict v. * Ante, § 292. Oilman, 4 Paige, 58; Bell v. The Mayor, ' Andrews v. Hubbard, 50 Conn., 351 ; etc., 10 Paige, 49 ; Morrison v. Robin- Gibson v. Crahore, 5 Pick. 152 ; Allen son, 31 Penn. St. 459 ; Harper's Appeal, v. Clark, 17 Pick. 47 ; Smith v.. Kelley, 64 Id. 315 ; McSorley v. Larissa, 100 27 Me. 237 ; Tillinghast v. Frye, i R. I. Mass. 270 ; Sanders v. Hooper, 6 Beav. 53 ; Lyons v. Robbins, 45 Conn. 513. 246; Rose V. Watson, 10 H. L. Cas. See " Subrogation," a«?^, §§ 444 to 456. 672 ; I White & Tud. Lead. Cas. (5th * See sufra, §§ 685 to 690. ed.) 362, 366 ; Davis v. Winn, 2 Allen, ' Sawyer v. Lyon, 10 Johns. 32 ;: Ste- in, vens v. Cooper, i Johns. Ch. 425. ^ Burnett v. Denniston, 5 Johns. Ch. ' Stevens v. Cooper, i Johns. Ch. 425. 35 ; Bacon v. Cottrell, 13 Minn. 194. * Ante, Chap„ IX.,, §§ 265 iq, 280.. 452 MORTGAGES OF EEAL PEOPEETT. [§§ 685-686. § 685. Who is entitled to an assignment. — Where the person, redeeming from the mortgage is not primarily liable for the payment of the mortgage debt, and where he redeems either because of his liability as surety, or because he holds an interest in the mortgaged premises which the foreclosure of the mortgage would destroy, he is entitled to be subrogated to the rights and to occupy the position of the creditor from whom he redeems.' A person so redeeming may enforce the security against the person and the fund primarily liable without any assignment," but there are eases where an assignment is necessary in order to furnish complete protection to the person who advances the money due upon the mortgage. Such a case would arise where payment of a mortgage is made by the holder of a junior incumbrance,' for the rights of the person redeeming would be likely. to be divested by the sale of the property to a ionafide purchaser if the mortgage were cancelled upon the record. In such cases, that is to say, where a party in a position or with an interest which gives him a right to redeem a mortgage, is also in effect surety, or can be regarded as surety for the mortgage debt, then, on paying the mort- gage debt, he is entitled to an assignment, not only of the mortgage, J)ut also of any bond or other instrument evidencing the debt, pro- vided that the person redeeming has some right or equity which will not be entirely protected without such assignment.* § 686. Examples. — A purchaser of the equity of redemption from a husband by a conveyance in which the wife did not join is enti- tled upon paying the mortgage to an assignment to protect himfromthe inchoate right of dower of the wife ;° and a dowress in the equity of redemption is also entitled to an assignment which will protect her from the inequitable demands of the heir." ' Averill v. Taylor, 8 N. Y. (4 Seld.) Burnet v. Denniston, 5 Johns. Ch. 35 ; 44. Tompkins v. Seely, 29 Barb. 212 ; ^ Brainard v. Cooper, 10 N. Y. (6 Seld.) Brainard v. Cooper, 10 N. Y. (6 Seld.) 356 ; Silver Lake Bank v. North, 4 Johns. 356 ; McLean v. Tompkins, 18 Abb. 24 ; •Ch. 370 ; Dale v. McEvers, 2 Cow. 118 ; Dauchy v. Bennett, 7 How. 375 ; Jen- McLean V. Towle, 3 Sandf. Ch. 119; kins v. The Continental Ins. Co., 12 Id. Burnet v. Denniston, 5 Johns. Ch. 35. 66 ; Averill v. Taylor, 8 N. Y. (4 Seld.) ' Lamb v. Jeff'sy, 41 Mich. 719. 44 ; Cole v. Malcolm, 66 N. Y. 363 ; * Pardee v. Van Anken, 3 Barb. 534 ; Twombley v. Cassidy, 82 N. Y. 155 ; Johnson v. Zink, 51 N. Y. 333, affi'g 52 Frost v. Yonkers Savings Bank, 70 N. Barb. 396 ; Cherry v. Monro, 2 Barb. Y. 553 ; Welling v. Ryerson, 94 N. Y. Ch. 618 ; Speiglemeyer v. Crawford, 6 98. Paige, 257 ; Rosevelt v. Bank of Niag- ' Piatt v. Brick, 35 Hun, 121. jira, Hopk. 579 ; s. c. affi'd 9 Cow. 409 ; « Bayles v. Husted, 40 Hun, 376. § 687.] EEDEMPTIOK. 453 Where it was made to appear that the equity of redemption be- longed to a wife who had tendered the debt and costs with a demand for an assignment, and that the mortgage was being foreclosed in the interest of her husband, between whom and her various suits were pending in relation to the property, the action to foreclose was stayed upon a motion.' A junior lienor has a right to an assignment of a prior mortgage which is being enforced to his prejudice, on paying the amount due upon it, and the mortgagor cannot tack still later liens." The offer of a junior lienor to pay, coupled with a demand for an assignment, does not discharge the lien of the mortgage. Such a tender must be absolute and unconditional, and cannot be made by any one other than the owner of the equity of redemption." If the person desiring the assignment wishes to escape payment of interest, he must bring the money tendered into court.* The assignment may properly be ordered to be made not directly to the person whose rights are to be protected by it, but to a person nominated by him." § 687. Distinction between redemption and subrogation. — It was said by Gteidlet, J., in Pardee v. Ycm Anken (3 Barb. 534), that the right to an assignment springs directly from the right of re- demption, but this statement has been sharply criticised.' Indeed, in strictness, the right of redemption and of subrogation by law is inconsistent with the right to an assignment of the debt, and of the evidence of the debt, so far or inasmuch as the assignment assumes the continued existence of the debt, and the subrogation by law as- sumes its payment.' The right to an assignment springs rather from the necessity of the assignment to the protection of some right of the person redeeming, and it does not necessarily follow that a person has the right to an assignment because he has the right to redeem.* ' Foster v. Hughes, 51 How. 20 ; ^ Dauchy v. Bennett, 7 How. 375 ; Bayles v. Husted, 40 Hun, 376. Ellsworth v. Lockwood, 42 N. Y. 89. 'Frost V. Yonkers Savings Bank, 70 ' Per Sutherland, J., in Ellsworth v. N. Y. 553. Lockwood, 42 N. Y. 89, 97. ' Frost V. Yonkers Savings Bank, 70 " Dauchy v. Bennett, 7 How. 375 ; N. Y. 553 ; Day v. Strong, 29 Hun, 505. Jenkins v. The Continental Ins. Co., 12 * Day V. Strong, 29 Hun, 505 ; Tuthill How. 66 ; Vandercook v. The Cohoes V. Morris, 81 N. Y. 94. Sayings Institution, 5 Hun, 641 ; EUs- ' Twombley v. Cassidy, 82 N. Y. 155 ; worth v. Lockwood, 42 N. Y.^89 ; Frost Johnson v. Zink, 51 N. Y. 333, affi'g 52 v. Yonkers Savings Bank, 70 Jf. Y. 553, Barb. 396. rev'g 8 Hun, 26. 454 MORTGAGES OF REAL PKOPEETY. [§§ 688-689. § 688. When assignment may be refused. — The right to com- pel the holder of a mortgage to accept or receive payment of it after it is due and payable, does not carry with it the right, upon such re- demption, to an assignment of the mortgage and of the bond or other instrument evidencing the mortgage debt, or of either, unless the re- deeming party has the position of surety, or can be regarded as surety for the mortgage debt.' A mortgagor who still owns the mortgaged premises, could not demand an assignment of the mortgage to aid him in defeating the claims of a junior incumbrancer. So, too, where the land is the primary fund for the payment of the mortgage debt, a person who has acquired the equity of redemption may re- deem, but he has no right to demand an assignment." But a mort- gagor who has conveyed the mortgaged premises subject to the mort- gage, and who is afterward compelled to pay the debt, is entitled to be subrogated to the rights of the mortgagee, so that he may resort to a sale of the land for Lis own indemnity, and he may compel an assignment to himself or even to a third person, who would then be- come a trustee for him.' § 689. The owner of a junior mortgage not yet dae, who alleges nothing in his bill showing that it is in any manner necessary^ for his protection, or for the preservation of the security he holds,' cannot compel an assignment of a prior mortgage. If the first mort^, gagee was requiring that his debt should be paid, or was proceeding' to foreclose ; or if he or the mortgagor, or both, were doing any- thing whatever, or were about to do anything, which could operate to make the second mortgage any less secure or available than it was^ at the moment the holder of the latter received it as security, he; might with propriety and equity call upon the court not only to] suffer him to redeem, but to compel an assignment of such first mort^ gage to him for his protection. Slight grounds to apprehend los^' would be suflBcient to warrant a prayer for an assignment ; and if it! appeared that the property was depreciating in value, or that it was' not kept in repair, or that the junior mortgagee had received his mortgage without actual knowledge of the existence of the first mort- gage, or upon an express agreement, or even a plain duty on the part' ' Ellsworth v.Lockwood,42N.Y. 89,99. ^Johnson v. Zink, 52 Barb. 396, affi'd « Dauchy v. Bennett, 7 How. 375; Mc- 51 Sf. Y. 333 ; Twombley v. Cassidy, 82 Kinstry v. Curtis, 10 Paige, 503; Hand- N. Y. 155. ley V. Munsell, 109 III. 362. §§ 690-691.J EEDEMPTION. 455 of the mortgagor to pay off the first incumbrance when it became due, so as to render the second mortgage available for any ulterior purposes had in view at the time of its delivery, the court should, in any of these cases, as well as in others where it is necessary for the protection of the junior incumbrancer, grant him such relief. But, upon the merely naked statement that he holds a mortgage on the equity of redemption, conditioned for a future payment not yet due, he makes no case calling for the interference of a court of equity.' The subrogation and assignment are ordered to protect the junior in- cumbrancer, and not to enable him to persecute the mortgagor. § 690. How the mortgagee may be compelled to execute an assignment. — If an assignment be desired *on the payment of a mortgage, the party desiring such assignment should, in order to save costs, couple the demand for an assignment with a formal tender of the amount due, and merely sajdng that he will make the payment, and thereupon paying the money into court, will not stay the pro- ceedings of the mortgagee or impair his claim for interest and costs." "Where the mortgage is being foreclosed, the application for an as- signment may be made in the foreclosure proceedings without bring- ing a new action for that purpose.' In such a case the proper prac- tice would be for the defendant to offer to pay the amount due upon the mortgage and such costs as he may think proper, and ask for an assignment. Upon refusal by the mortgagee to accept the amount, he may apply to the court upon motion, when the amount of costs will be fixed and determined. The right to costs in an equity suit is not absolute, and a formal tender cannot therefore be made after the commencement of an action, until the court has determined what they shall be.* § 691. Taxes paid by mortgagee. — The same general principle which protects a subsequent incumbrancer in paying a prior mort- gage will also protect a mortgagee in paying taxes on the mortgaged premises, if such payment is necessary to preserve his security ;^ or ' Per Woodruff, J., in Jenkins v. The Pratt v. Ramsdell, i6 Id. 59 ; Thurston Continental Ins. Co., 12 How. 66, 71 ; v. Marsh, 14 Id. 572. Bigelow V. Cassedy, 26 N. J. Eq. 557; ^Faure v. Winans, Hopk. 283 ; Burr Frostv.YonkersSavingsBank,7oN'.Y.553. v. Veeder, 3 Wend. 412 ; Eagle F. Ins. ^ Hornby v. Cramer, 12 How. 490. Co. v. Pell, 2 Edw. 631 ; Kortright v. ' Twombley v. Cassidy, 82 N. Y. 155 ; Cady, 23 Barb. 490 ; Robinson v. Ryan, Bayles v. Husted, 40 Hun, 376. 25 N. Y. 320 ; Plumb v. Robinson, 13 ■* Bartow v. Cleveland, 16 How. 364 ; Ohio St. 304. 456 MORTGAGES OF EEAL PEOPEETT. [§ 693.. in paying a valid assessment for a public improvement ;' or in paying rent on a perpetual lease in fee and to preserve his security ;" or in satisfying an execution upon a prior judgment.' An assignment of either the tax, assessment, rent, or judgment is not necessary to enable the mortgagee to recover ; in fact, if he should take an assignment, he could not recover for the amount paid, under the mortgage. If he should purchase at a tax sale, this would not be a payment of the tax so as to enable him to recover under a stipulation on the part of the mortgagor or on his general legal obligation, to repay any money paid for taxes. The mortgagee by such purchase would acquire a new lien upon the premises which he might enforce, but he would do so independent of his mortgage security." § 692. Redemption after a defective foreclosure. — The object of foreclosure is to extinguish the right of redemption, and if a per- son holding any interest in or lien upon the mortgagor's title has not been made a party to the foreclosure proceedings his right to redeem will remain,' and the purchaser, in such a case, wiU stand as to such person as the assignee of the mortgage, even though the purchase was made for a smaller sum." ' Rapelye v. Prince, 4 Hill, 119 ; Dale V. McEvers, 2 Cow. 118 ; Brevoort v. Randolph, 7 How. 398. " Robinson v. Ryan, 25 N. Y. 320. ' Silver Lake Bank v. North, 4 Johns. Ch. 370. * Williams v. Townsend, 31 N. Y. 411. By Laws of 1826, c. 524, a mortgagee is authorized to redeem from a sale under an execution. Upon such re- demption he acquires the right of the original purchaser, or is substituted as a purchaser from any other creditor who liad previously redeemed. By Laws of 1855, c. 427, § 76, as amended by Laws of 1870, c. 280, pro- vision is made by which a mortgagee may, by filing with the comptroller a. notice and description of his mortgage, secure to himself notice of sales for taxes. He may also redeem after the sale, and collect the amount paid by him under his mortgage. See Becker v. Howard, 66 N. Y. 5, affi'g 4 Hun, 359. It is provided in i R. S. 186, §§ 7, 8, as follows : § 7. Where the attorney-general shall ascertain that lands mortgaged to the people of this State, are incumbered by prior judgments or mortgages, he may, with the advice and consent of the comp- troller, discharge such prior incum- brances, and take an assignment there- of to the people of this State, and all sums of money required for such pur- pose, shall be paid to him out of the treasury. § 8. Whenever any lands which have been mortgaged to the people of this State, or purchased for the people on the foreclosure of a mortgage, shall be sold on execution, by virtue of a judgment recovered prior to such mortgage, the attorney-general, with the advice and consent of the comptroller, may redeem such lands, in the same manner as judg- ment creditors are authorized by law to redeem. ' Grandin v. Hernandez, 29 Hun, 399; Hunt V. Makemson, 56 Tex. g ; Newell V. Pennick, 62 Iowa, 123. « Haines v. Beach, 3 Johns. Ch. 459 ; §§ 693-694.J EEDEMPTION. 457 If a junior mortgagee be not made a party to the foreclosure, he may either redeem or foreclose. If he elects to foreclose he must make the purchaser under the prior mortgage a party to his proceed- ings, and he may then have the property sold ; the amount due on the prior mortgage would be paid to the purchaser, the junior mort- gage would next be satisfied, and any surplus would be paid to the purchaser under the first foreclosure.' The junior mortgagee would not be obliged to pay the costs of the previous foreclosure if he should redeem, nor if he forecloses can those costs, as against him, be treated as a charge upon the land." But he must pay costs of the action to redeem unless the defendant improperly resists." § 693. When an action to redeem is barred by the statute of limitations. — The Code of Civil Procedure provides that an action to redeem real property from a mortgage with or without an account of rents and profits, may be maintained by the mortgagor or those claiming under him, unless he or they have continuously main- tained an adverse possession of the mortgaged premises for twenty years after the breach of a condition of the mortgage or the non-ful- filment of a covenant therein contained.* This is a change from the rule under the previous Code of Pro- cedure, under which it was held that an action to redeem from a mortgage was a purely equitable remedy, and that such an action must be commenced within ten years after the cause of action shall have accrued.' The new rule does not apply to a case where the time to commence an action had expired when the new Code took effect.' § 694. The right of action accrues, and the statute of limitations begins to run, not when the money secured by the mortgage becomes due, but when the defendants or their grantors entered into possession claiming title.' Jackson v. Bowen, 7 Cow. 13 ; Vroom v. Gilman, 4 Paige, 58 ; Vroom v. Ditmas, Ditmas, 4 Paige, 526 ; Benedict v. Gil- 4 Id. 526; Belden v. Slade, 26 Hun, 635. man, 4 Id. 58 ; Vanderkemp v. Shelton, "Belden v. Slade, 26 Hun, 635 ; Day II Id. 28 ; Robinson v. Ryan, 25 N. Y. v. Strong, 29 Hun, 505. 320 ; Gage v. Brewster, 31 N. Y. 218 ; ^ Code of Civil Procedure, § 379. Winslow V. Clark, 47 N. Y. 261 ; Wine- * Code of Procedure, § 97 ; Miner v. brener v. Johnson, 7 Abb. N. S. 202 ; Beekman, 50 N. Y. 337 ; Hubbell v. Collins V. Riggs, 14 Wall. 491. Sibley, 50 Id. 468 ; Peabody v. Roberts, ' Vanderkemp v. Shelton, 11 Paige, 28. 47 Barb. 91. '^Gage V. Brewster, 31 N. Y. 218, * Code of Civil Procedure, § 414, sub. 4. rev'g s. c. 30 Barb. 387; Benedict v. 'Miner v. Beekman, 50 N. Y. 337; 468 MOETGAG-ES OF BEAL PEOPEETT. [§§ 695-696. It has been said that as against the right of a remainderman to re- deem from a mortgagee who is in possession of the land under the owner of a precedent estate, the statute will not begin to run until the precedent estate is determined.' Until that happens, the possession of the mortgagee is lawful independent of the mortgage. § 695. Where several persons are entitled to redeem, but the rights of some of them are barred by the statute of limitations, those whose rights are not barred may redeem their share by paying their proportion of the debt secured by the mortgage." Length of time is no bar to a fraud, or to redemption of a mort- gage where the mortgagee has treated it all the time as a mortgage, or where it was originally agreed that he was to enter and keep pos- session until he was paid out of the profits.' Nor will a mere con- structive possession be suflScient. It is necessary that there shall be an actual and continued possession for the period named in the stat- ute,' and that, too, under a claim of absolute ownership." § 696. Admissions by mortgagee. — If, during the time of his possession, the mortgagee has assigned his interest in the land, and has described it as a mortgage, this is evidence that the mortgage is redeemable: and, although the mortgagor was not a party to the transaction, he may avail himself of the evidence which it affords of the nature and extent of the mortgagee's interest and claim." The commencement of a proceeding to foreclose, whether by action or by a sale under a power, is an admission of the existence of a right of redemption, since it would be a contradiction in terms to undertake to bar or foreclose a right which has no existence. If a mortgagee, who, having held the possession of the mortgaged estate for so long that his possession has ripened into a title, gives notice of a sale under the statute regulating foreclosures by advertisement, this amounts to an admission that he holds the land as mortgagee only, and as an invitation to the mortgagor and all other parties concerned to redeem. The object may be to perfect a title, but the thing actu- ally done is a very direct invitation to the mortgagor to come forward Hubbell V. Sibley, 50 Id. 468 ; see Pea- * Moore v. Cable, i Johns. Ch. 385 ; body V. Roberts, 47 Barb. 91. Slee v. Manhattan Co., I Paige, 48. • Fogal V. Pirro, 17 Abb. 113; s. c. 10 'Miner v. Beekman, 50 N. Y. 337; Bosw. 100. Demarest v. Wynkoop, 3 Johns. Gh. 2 Id. 129. ' Marks v. Pell, i Johns. Ch. 594. " Borst v. Boyd, 3 Sandf. Ch. 501, 507. §§ 697-698.] EEDEMPTION-. 459 and pay the debt, the amount of which must be stated in the notice. The mortgagor may accept the invitation, and if he tenders the money, the proceeding is at an end.' § 697. Action to remove mortgage as a cloud. — While a right in a mortgagor to redeem is barred after the mortgagee has been in possession twenty years claiming title, this rule does not apply where the mortgagor is in possession and the mortgage remains a cloud upon his title. It is an acknowledged branch of equity jurisprudence to remove clouds from titles at the suit of the owner of the fee ; and while the owner of the fee continues liable to an action for the fore- closure of a mortgage, or for the payment of any incumbrance upon his land which is past due, he has a continuing right to the aid of equity to determine the amount, if uncertain, and to compel its dis- charge upon payment, and an action to enforce this continuing right cannot be barred by the statute of limitations." § 698. Right to redeem lost by laches. — Ordinarily the right to redeem will not be impaired or affected by any lapse of time short of the period fixed by the statute of limitations. Even where there has been a defective foreclosure and the purchaser has entered into pos- session, and has made expensive improvements, the person holding an interest, not cut off, which entitles him to redeem, may thereafter do so, though only on payment of an equivalent for the betterments put upon the estate.' But in cases where the regularity of the action or special proceeding under which the foreclosure is claimed is in dispute, the right to redeem may be seriously impaired by a lack of diligence in asserting it. Where the foreclosure is by action, and the court has acquired jurisdiction of the parties, the right to redeem will not survive the sale because of any mere irregularity, however gross, and the remedy must be sought with reasonable promptness by an application to the court in the suit.' And where the foreclosure is by a sale under a power contained in the mortgage, the mort- gagor, or those claiming under him, must assert their rights with dil- igence or they will lose them. In such a case the mortgagor has ' Calkins v. Isbell, 20 N. Y. 147, affi'g Fogal v. Pirro, 17 Abb. 113 ; s. c. 10 s. c. 3 Barb. 305 ; Jackson v. Slater, 5 Bosw. 100 ; Chalmers v. Wright, 5 Robt. Wend. 295. 713 ; Benedict v. Gilman, 4 Paige, 58 ; ^ Miner v. Beekman, 50 N. Y. 337, Putnam v. Ritchie, 6 Paige, 390 ; Miner 343. V. Beekman, 50 N. Y. 337. ' Mickles v. Dillaye, 17 N. Y. (3 Smith) * Brown v. Frost, 10 Paige, 243, rev'g 80 ; Wetmore v. Roberts, 10 How. 51 ; s. c. Hoff. Ch. 41. 460 MORTGAGES OF BEAL PEOPEETT. [§ 698. been said to stand in the position of a cestnii que trust, who is not al- lowed to wait to see whether the sale is or is not an advantageous one before electing whether to set it aside ;' and as short a period of neg- lect as six years has been said to be sufficient to justify refusing the relief where the foreclosure was made with the knowledge and con- sent of the mortgagor." Sixteen years of neglect have been held to operate as a bar.' ' Bergen v.Bennett.iCaine'sCas.i, 20. ' Bergen v. Bennett, i Caine's Cas. i; ' Lants V. Crispe, cited in Bergen -i. Mulvey v. Gibbons, 87 111. 367. Bennett, i Caine's Cas. 21. CHAPTER XIX. ACTI0N8 TO EEDEEM. § 6gg. The proper remedy of the mort- gagor. 700. Action to redeem purely equita- ble. 701. But if the mortgage be paid and discharged. 702. Parties plaintiff in actions to re- deem. 703. Parties defendant in actions to redeem. 704. If an action be brought by a sec- ond or other subsequent mort- gagee. 705. If the mortgagee, being in pos- session, has made a transfer. 706. Where the mortgagor has con- veyed only the equity of re- demption. § 707. Where the mortgage has been assigned. 708. Complaint in action to redeem. 709. Offer to pay, material to question of costs. 710. Demand for alternative relief. 711. Redemption after defective fore- closure. 712. Defenses to redemption. 713. Judgment in action to redeem. 714. Fixing time for redemption. 715. The time allowed to redeem. 716. Effect of failure to redeem within the time limited. 717. Costs. § 699. The proper remedy of the mortgagor as against the mortgagee is by action in the nature of a suit in equity to redeem. If anything is due upon the mortgage, this is tlie only remedy of the mortgagor, for he has no rights as against the mortgages, except the right to have his estate disincumbered from the lien on payment of the mortgage debt. If the mortgagee is in possession, he has a right to retain possession until his claims are entirely satisfied, either from the rents and profits or otherwise ; and it is always proper for the mortgagor to call the mortgagee into court, so that an account may be taken and a redemption had. If there is a dispute between the parties as to whether any sum remains owing upon the mortgage, the mortgagor may allege it to be entirely paid, and may demand judg- ment that it be cancelled and discharged on that acconnt, and also that he be allowed to redeem, if anything is found to be due upon it.' ' Beach v. Cooke, 28 N. Y. 508. 463 MORTGAGES OF EEAL PEOPEETT. [§ 700. The authorities are decisive that ejectment will not lie by a mort- gagor against a mortgagee in possession if the mortgage be, at law, subsisting and unsatisfied.' A mortgagor has no right to commence an action for the purpose of having his property sold. He can sell his equity of redemption without the interference of any court. If he comes into a court of equity with a complaint against the mortgagee, even when the latter is in possession, he must offer to redeem. He cannot ask to have the mortgagee turned out of possession and the property sold to pay the mortgage debt." § 700. Action to redeem purely equitable.— It is easy to see that where the English doctrine prevails, that the mortgage conveys a legal title to the mortgaged premises, the right of the mortgagor to an account of the rents and profits of the land received by the mort- gagee, is purely and exclusively of equitable cognizance. At law, the mortgagee is the owner of the estate, and takes the rents and profits in that character. In equity, the mortgagor is regarded as the owner until foreclosure, and his right to an account is incident to his right of redemption.' But the necessity to resort to an accounting in equity, in order to have the rents and profits applied to the satisfac- tion of the mortgage, is not obviated by the fact that here the mort- gagor retains the legal title. The mortgagee in possession takes the rents and profits in the quasi character of trustee or bailiff of the mortgagor." They are applied in equity as an equitable set-off to the amount due on the mortgage debt." The law does not apply them as received to the payment of the mortgage. It depends upon the result of an accounting upon equitable principles, whether any part of the rents and profits received shall be so applied. The mortgagee is en- titled to have them applied, in the first instance, to reimburse him for taxes and necessary repairs made upon the premises ; for sums paid by him upon prior incumbrances upon the estate, in order to protect the title, and for costs in defending it ; and if he has made permanent improvements upon the land, in the belief that he was the absolute owner, the increased value by reason thereof may be allowed ' Van Duyne v. Thayre, 14 Wend. " 2 Wash, on Real Prop., 161, 205 ; 233 ; Phyfe v. Riley, 15 Id. 248 ; Pell v. Seaver v. Durant, 39 Vt. 103 ; Parson v. Ulmar, 18 N. Y. {4 Smith) 139 ; Chase Welles, 17 Mass. 419. V. Pfeck, 21 N. Y. 581. *2 Powell on Mortgs., g46a; 2 Wash. * Goldsmith v. Osborne, i Edw. Ch. on Real Prop., 205. 560. ' Ruckman v. Astor, 9 Paige, 517. §§ 701-702.] ACTIONS TO REDEEM. 463 him. So he may be charged with rents and profits he might have received, if his failure to recover them is attributable to his fraud or wilful default.' In many cases complicated equities must be deter- mined and adjusted before it can be ascertained what part, if any, of the rents and profits received is to be applied upon the mortgage debt. In the absence of an agreement between the parties, there is no legal satisfaction of the mortgage by the receipt of rents aud prof- its by a mortgagee in possession to an amount sufficient to satisfy it, and his character as mortgagee in possession is not divested until they are applied by the judgment of the court in satisfaction of the mortgage.' )> § 701. But if the mortgage be paid and discharged, so that it constitutes no lien at law, ejectment would doubtless be a proper remedy ; and upon the ground that the mortgagee is only entitled to hold possession by virtue of his lien, and that the lien is destroyed by tender, it has been held that upon a tender, after default by a mort- gagor, of the mortgage debt, ejectment would lie in his favor upon the refusal of the mortgagee to surrender possession.' § 702. Parties plaintiff in actions to redeem. — As in other equity actions, all parties interested in the controversy, aud whose rights are sought to be afiected by the judgment, must be brought before the court in an action to redeem from a mortgage. The plaintiff must have some interest in, or lien upon, the equity of re- demption, or he must be surety for the mortgage debt." A general creditor of the mortgagor cannot redeem until his claims have ripened into a judgment, and have thus become a specific lien upon the property. ° If the mortgagor be dead, his heir or his devisee, if the estate has been devised, is the proper party to redeem, if it be a mortgage of real estate ;° and if it be a mortgage of a leasehold estate, then the personal representatives of the deceased are the proper parties.' A special guardian, who, under an order of the Court of Chancery, became a mortgagee for the benefit of an infant, subject to a prior ■ 2 Powellon Mortgs.,957, n. ; 4 Kent, and Loan Co., 21 Wend. 467 ; s. c. 26 185 ; 2 Wash on Real Prop., 218 ; Cam- Wend. 541. eron v. Irwin, 5 Hill, 272 ; Mickles v. ' Grant v. Duane, 9 Johns. 6ii ; Suth- Dillaye, 17 N. Y. 80. erland v. Rose, 47 Barb. 144. 'Per Andrews, J., in Hubbell v. ' Brinkerhoff v.Brown,4johns.Ch.67i. Moulson, 53 N. Y. 225. ' Sutherland v. Rose, 47 Barb. 144. ^Edwards v. The Farmers' Fire Ins. ' 2 Barb. Ch. Pr. 195; Story's Eq. PI. 170. 464 MOETGAGES OF EEAL PEOPEETT. [§§ 703-705. mortgage, was held to be a proper person to file a bill to redeem such prior mortgage, and to compel an assignment of it." § 703. Parties defendant in actions to redeem. — If the action to redeem be brought by the mortgagor, and if there be no other out- standing interest under the mortgagee, the mortgagee is the only necessary or proper party defendant. So, also, if the action is brought by a person who owns only a part of the mortgaged premises, or who, for any other reason, is only a surety for the mortgage debt, or is himself equitably bound to pay only a portion of it, and the only re- lief sought is to compel an assignment of the mortgage, the mort- gagee is the only person who need be made a defendant, for the rights of no one else will be impaired or affected by the judgment." § 704. If an action be brought by a second or other subse- quent mortgagee, or by any other person holding an interest in the estate, which gives him a right to redeem, but who is not the per- son who ought equitably to discharge the incumbrance, and if it be the object of such action to make a final determination of all contro- versies between the parties, all persons interested in the estate should be made parties. In such a case the court will, by a single judgment, dispose of the rights of all concerned ; a redemption will be adjudged in favor of the person asking for it, and those who ought to redeem from him will be compelled to do so or to stand foreclosed." Or if the interests of the parties require a sale of the property and a division of the proceeds, that will be proper, and the action will then partake of the double nature of a redemption by the plaintiff from one of the defendants, and an assignment of the mortgage to him, followed by a foreclosure against the other defendants.* § 705. If the mortgagee, being in possession, has made a transfer of some interest in the mortgage, or in his rights, to some other person, that person must be joined vrith him as a defendant.' "Where a purchaser, imder a defective foreclosure, enters into posses- sion, his rights are those of an assignee of the mortgage. His grantees are to be treated in proportion to their interests in the land as the assignees of the mortgage, and the redemption money is to be ' Pardee v. Van Anken, 3 Barb. 534. v. DuiBe, 8 Bosw. 617 ; s. c. 3 Keyes, 'Averillv. Taylor, 8N. Y. (4Seld.)44- 606; 3 Trans. App. 54; 4 Abb. N. S. " 2 Barb. Ch. Pr. 196. 478 ; Winslow v. Clark, 47 N. Y. 261 ; *See Marsh v. Pike, 10 Paige, 595. Hickock v. Scribner, 3 Johns. Cas. 311 ; ' Dias V. Merle, 4 Paige, 259 ; Davis Brown v. Johnson, 53 Me. 246. §§ 706-707.] ACTIONS TO EEDEEM. 465 divided in proportion to the purchase money paid by each, and in the order that the purchases were made.' § 706. Where the mortgagor has conveyed only the equity of redemption, the grantee may bring an action to redeem, without making the mortgagor a party. But if the mortgagor has conveyed the entire estate free from the mortgage, and has obligated himself to pay the mortgage debt, then the mortgagor should, or at least may, be made a party, in order to be bound by the decree, and to assist in taking the account." So a grantee with warranty, on discovering a prior mortgage, which his grantor claims is paid, while the holder of it claims otherwise, may sue them both, to put an end to the controversy, and for a cancella- tion and discharge of the mortgage, upon payment by him of what- ever may be found due upon it, and for judgment over against his grantor.' § 707. Where the mortgage has been assigned absolutely, the original mortgagee and his mesne assignees are not necessary, though they may be proper parties to the action.' But the assignee holding the title' of the mortgage at the time of the commencement of the actidn is a necessary party,' as also is an assignor of the mortgage, who has assigned it merely by way of security, and still retains an in- terest in it. If the mortgagee and the successive assignees of the mortgage have been in possession, and an account of the rents is to be taken, all should be made parties." If the mortgagee has assigned his interest upon certain trusts, as, for example, if the purchaser, under a defective foreclosure, and be- Heviug himself to be the owner, should convey or devise the estate in trust, all of the cestuis que trust should be made parties to an ac- tion to redeem.' If all necessary parties are not brought before the court in an action to redeem, this is an objection which may be taken by answer, and it will constitute a defense.' ' Davis V. Duffie, 8 Bosw. 617 ; s. c. ' Yelverton v. Shelden, 2 Sandf. Ch. affi'd 3 Keyes, 606 ; 3 Trans. App. 54 ; 481 ; Hudson v. Kelly, 70 Ala. 393. 4 Abb. N. S. 478. « 2 Barb. Ch. Pr. 198. 2 2 Barb. Ch. Pr. 196. ' Id. ^ ' Wandle v. Turney, 5 Duer, 661. ' Winslow v. Clark, 47 N. Y. 261, 263 ; * Whitney v. McKinney, 7 Johns. Ch. Dias v. Merle, 4 Paige, 259. 144. 30 466 MOBTGAGES OF EEAL PEOPEKTT. [§§ 708-709. Where there are conflicting claims to the mortgage, the mortgagor may join all claimants and compel interpleader.' § 708. Complaint in action to redeem. — The complaint in an ac- tion to redeem from a mortgage, should either allege a tender an J re- fusal of the amount due,'' or it should contain an offer to pay what may be found due on an account to be taken, or the prayer for relief should be that upon payment of what, if anything, is found to be due, in re- spect to principal and interest, the mortgagee may be decreed to de- liver possession.^ It has even been said that these allegations, or one of them, are necessary, and that, if they be omitted, the defendant may demur,* though if the objection be not taken by demurrer, the relief will be granted and the payment of the money justly due will be imposed as a condition for such relief in the decree.' If the bill alleges a tender before suit brought, and prays for a con- veyance and for general relief, and if the whole account is a mere matter of computation of interest, it will not be defective for want of an offer to pay what may be found to be due on an recount to be taken." § 709. Offer to pay, material to question of costs. — The better opinion seems to be that a tender of payment is only important as it affects the question of costs, and that ordinarily it is not nscessaryfor a plaintiff to aver willingness to pay in order to susuain his action.' The confusion in the authorities upon this point seems to have ai-isen from the fact that, under the former practice, when bills were filed to ob- tain discovery as well as relief, n, bill to cancel a mortgage as usurious would not be entertained, unless the complainant, asking equity, of- fered to do equity. In such cases, unless the bill contained an offer to pay what was justly due, the defendant might demur ; not because the court could not, if the facts were established, grant the relief to which the complainant was equitably entitled, but because a discovery would not be compelled without such offer.' .' Crane v. McDonald, 2 N. Y. State Kern.) 93, 129 ; Beecher v. Ackerman, Reptr. 150. I Robt. 30 ; s. c. i Abb. 141. ' Barton v. May, 3 Sandf. Ch. 450. " Barton v. May, 3 Sandf. Ch. 450. 8 Quin V. Brittain, Hoff. 353 ; Adams ' Quin v. Brittain, Hoff. 353 ; Beach V. Sayre, 70 Ala. 318. v. Cooke, 28 N. Y. 535 ; Miner v. Beek- * Post V. Bank of Utica, 7 Hill, 391 ; man, 42 How. 33. AUerton V. Belden, 49 N. Y. 373; Sils- "Schermerhorn v. Talman, 14 N. Y. bee V. Smith, 60 Barb. 372 ; s. c. 41 (4 Kern.) 93, 129 ; Livingston v. Harris, How. 418. 3 Paige, 528 ; Fanning v. Dunham, 5 ' AUerton v. Belden, 49 N. Y. 373 ; Johns. Ch. 122. Schermerhorn v. Talman, 14 N. Y. (4 §§710-711. J ACTIONS TO REDEEM. 467 § 710. Demand for alternative relief. — "Where a mortgagee has been in possession of the mortgaged premises, and in receipt of the rents and profits, the complaint may contain an allegation that the. mortgage has been entirely paid and satisfied, and after an accounting is had, the judgment will settle the amount properly remaining due.' The questions which arise on such an accounting between the mort- gagee in possession and the mortgagor are treated of in another' part of this work.' Where an action was brought to have a certain deed executed by the plaintiff declared to be a mortgage for the security of a usurious loan of money, the plaintiff was permitted to redeem on paying the amount adjudged to be due, although no offer to pay was contained in the complaint. The omission in that respect was not allowed to defeat the plaintiff's rights, though it had the effect of subjecting him to the payment of the costs of the action, for, under our Oode, where an issue of fact has been tried in an action, the plaintiff is to *be adjudged such relief as may be consistent with the facts proved and embraced within the issue.' § 711, Redemption after defective foreclosure. — Questions as to the rights of mortgagees in possession commonly arise where a mortgage has been defectively foreclosed and the purcharer enters into possession. Such purchaser stands as the assignee of the mort- gage, and, upon redemption, is entitled to receive the full amount due upon the mortgage, irrespective of the price bid at the sale." But a person whose rights are not affected by the defective foreclos- ure cannot be compelled to pay any of the costs which are incurred in it.' A purchaser under a defective foreclosure stands as the owner of all rights in the property of all of the parties bound by the judg- ment. He is not only the assignee of the mortgage foreclosed," but he is also the grantee of the owner of the equity of redemption as ' Brainard V. Cooper, 10 N. Y. (6 Seld.) ''Benedict v. Gilraan, 4 Paige, 58; 356 ; Calkins v. Isbell, 20 N. V. (6 Smith) Robinson v. Ryan, 25 N. Y. 320; Gage 147 ; Beach v. Cooke, 28 N. Y. 508 ; v. Brewster, 31 N. Y. 218 ; Raynor v. Fields V. Helms, 70 Ala. 460. But it is Selmes, 52 N. Y. 579. said that a bill cannot be filed to set 'Gage v. Brewster, 31 N. Y. 218. aside mortgage as void, or in the alter- ^ Hart v. Wandle, 50 N. Y. 381 ; Rob- native for an accounting and redemption, inson v. Ryan, 25 N. Y. 320; Walsh v. Tatum Bros. v. Walker, 77 Ala. 563. Rutgers Fire Ins. Co., 13 Abb. 33 ; Bene- ^ See ante, %% 245 to 264. diet v. Gilman, 4 Paige, 59 ; Smith v. ' Marvin v. Prentice, 49 How. 385. Gardner, 42 Barb. 356. 468 MOETGAGES OP REAL PEOPEETY. [§§ 712-713. against a lienor not made a party.' So, where a second mortgage was assigned as security for a smaller amount and the assignee was omitted from the foreclosure of the first mortgage, it was held in an action to redeem brought by such assignee that the plaintiffs entire claim was the amount due to him under the agreement pursuant to which the mortgage was assigned to him; that a sale of the premises subject to the prior mortgage was improper, the prior mortgage being merged in the title under the sale, and that the proper judgment was to give the plaintiff a right to redeem by pay- ing all liens prior to his unless the purchaser elected to pay the amount due to him." On redeeming from a purchaser under a defective foreclosure, who has made substantial improvements, believing himself to be the owner, such improvements must be paid for.' § 712. Defenses to redemption. — Where there has been no refusal to account by the mortgagee and there is no controversy as to the amount due on the mortgage, a bill in equity should not be maintained.' An incumbrancer with a right to redeem was held to be estopped from redeeming by having persuaded a person to purchase the estate and make valuable improvements by representing that the land was not worth more than the mortgage, and that lie would not redeem.' The right of a junior incumbrancer to redeem a prior incumbrance, cannot be resisted on the ground that he has other suflSeient securities for the debt," or that the second mortgage is fraudulent as to the creditors of the mortgagor.' § 713. Judgment in action to redeem. — If the mortgagor is permitted to redeem, the judgment directs a reference to ascertain and report the amount due for principal and interest, and orders the plaintiff to pay that amount within a specified time, together with costs ; and that, upon his doing so, the mortgagee shall convey to him the mortgaged premises. And it directs that, upon the plain- ' Vanderkempv. Shelton, II Paige, 28. Paige, 390; Miner v. Beekman, 50 N. 'Salmon v. Allen, 11 Hun, 29. Y. 337. ' Mickles v. Dillaye, 17 N. Y. (3 Smith) " Eastman v. Thayer, 60 N. H. 408 ; 80; Wetmore V. Roberts, 10 How. 51, Brown v. Snell, 46 Me. 490 ; Hall v. and cases dted ; Fogal v. Pirro, 17 Abb. Hall, 46 N. H. 240. 113; s. c. 10 Bosw. 100; Chalmers V. ° Fay v.Valentine,29Mass.(i2 Pick.)4o. Wright, 5 Robt. 713 ; Benedict v. Gil- « Fletcher v. Holmes, 25 Ind. 458. man, 4 Paige, 58 ; Putnam v. Ritchie, 6 ' Crooker v. Holmes, 65 Me. 195. §§ 714-716.] ACTIONS TO REDEEM. 469 tiffs default, the complaint be dismissed with costs,' and that the plaintiff be foreclosed.* In general, the redemption must be of the entire mortgage, and the owner of a portion of the mortgaged premises cannot compel the mortgagee to accept a portion of the debt and release a portion of the security.' But in a case where a railroad company acquired a portion of the mortgaged premises for the purposes of its right of way, it was held to be entitled to redeem that portion, by paying its full value to the mortgagee as of the date when they first entered upon it, and without satisfying the entire debt ; the decision being placed upon the ground that the railroad company had the right to take the land upon paying the full value of it, as against both the mortgagor and the mortgagee, under the general railroad act.'' § 714. Fixing time for redemption. — The judgment of the conrt having determined the amount due upon the mortgage,- also fixes upon a time within which redemption may be made, and this time will not ordinarily be enlarged. By the bringing of the action, the mortgagor professes to be ready to redeem, and, in this respect, his position is different from what it would be if he were defend- ant in an action for strict foreclosure, for then he would redeem by compulsion. In an action for strict foreclosure, the time may be enlarged from time to time, upon terms and for good cause shown ; but this will not ordinarily be done in an action brought by the mortgagor to redeem.' § 715. The time allowed to redeem varies ordinarily from three to six months, but rests in the discretion of the court, and depends upon the special circumstances of each case ; ' and though it will not commonly be extended, the court has power to extend it in cases where such action seems equitable.' § 716. Effect of failure to redeem within the time limited. — If the plaintiff neglects to avail himself of his right to redeem within the time granted by the judgment, the dismissal of his complaint as ' 2 Barb. Ch. Pr. igg. * Dows v. Congdon, i6 How. 571. ^ Odell V. Montross, 68 N. Y. 499, ' Brinkerhoff v. Lansing, 4 Johns. Ch. 507. 65 ; Ferine v. Dunn, 4 Id. 140 ; Fisher ' 2 Barb. Ch. Pr. 194 ; Palk v. Clinton, on Morts. 606. 12 Ves. 59 ; Calkins v. Munsell, 2 Root's * Perine v. Dunn, 4 Johns. Ch. 140 ; Rep. 333 ; Cholmondeley v. Clinton, 2 Brinkerhoff v. Lansing, 4 Id. 65. Jac. & W. 189. ' Sherwood v. Hooker, i Barb. Ch. 650. 470 MOliTGAGES OF EEAL PEOPEETT. [§ 717. a consequence of suc^^ neglect will operate as a strict foreclosure of his rights, even though the judgment be not framed so as to declare this to be the consequence of a failure to redeem.^ But the rights of the plaintiff will not be extinguished until a final order is obtained after the expiration of the time allowed to redeem. Until that order is obtained, the records of the court do not show which party has finally prevailed, and until then the plaintiff may apply to have the time to redeem extended." In an action brought to redeem from a mortgage, or to cancel it, the defendant may in his answer ask for a foreclosure." § 717. Costs. — The general rule is, that a party who is allowed to redeem must also pay costs, even though he be successful." There are, however, exceptions to this rule ; and where the mortgagee has set up an unconscientious defense, he has not only been refused his costs, but has been compelled to pay costs to the other party.' When both parties are at fault, costs should be equally divided." Where, before bringing an action to redeem, a plaintiff tendered the amount due r on the mortgage and any costs which had been incurred, costs were refused to both parties.' And a mortgagee who refused such a tender has been charged with costs.' ' Ferine v. Dunn, 4 Johns. Ch. 140 ; mas, 4 Id. 526; Belden v. Slade, 26 Hun, Sherwood v. Hooker, i Barb. Ch. 650 ; 635. Beach v. Cooke, 28 N. Y. 535 ; Bolles « Henry v. Davis, 7 Johns. Ch. 40 ; V. Duff, 43 N. Y. 474 ; Coote on Morts. Slee v. Manhattan Co., i Paige, 48, 81 ; 570 ; Stevens v. Miner, no Mass. 57. Van Buren v. Olmstead, 5 Id. g ; Davis ' Bolles V. Dufif, 43 N. Y. 469 ; Sher- v. Duffie, 18 Abb. 360 ; Barton v. May, wood V. Hooker, i Eurb. Ch. 650. 3 Sandf. Ch. 450. * Darvin v. Hatfield, 5 Sand. 469 ; « Hudson v. Kelly, 70 Ala. 393. Sutherland v. Rose, 47 Barb. 144. ' King v. Duntz, 11 Barb, igi ; Van *Slee v. Manhattan Co., i Paige, 48, Buren v. Olmstead, 5 Paige, 9. 81 ; Brockway v. Wells, i Id. 617 ; Ben- " Grugeon v. Gerrard, 4 Y. & C. Exch. edict V. Gilman, 4 Id. 58 ; Vroom v. Dit- Ca. 128; Harmerv. Priestly, 16 Beav.569. CHAPTEE XX. PAKTIES TO ACTIONS FOR THE FOEECLOSUEE OF MOETGAGES. WHO ARE PROPER PLAINTIFFS IN FORE- CLOSURE CASES. § 718. If a mortgage be assigned as se- curity for a debt. Foreclosure by party in interest. If tlie mortgage belongs to two or more persons. If a mortgage is made to secure different debts. ' Surety subrogated to rights of mortgagee. Other remedies of surety. 724. Mortgage to executors and trus- tees. Foreclosure by one execuior against another. Where a specific legacy is made of a mortgage. Foreign executor or adminis- trator. 728. The foreclosure of a mortgage by advertisement. 719. 720. 721. 722. 723. 725. 726. 727. WHO ARE NECESSARY DEFENDANTS IN FORECLOSURE CASES. 729. The Code of Civil Procedure pro- vides. 730. All persons who have or claim an interest. 731. Examples. 732. Assignee in bankruptcy. 733. Unrecorded incumbrance. 734. Future and contingent interests. 735. Trustees. 736. Cestuis que trust. § 737. Limitations of the rule requiring cestuis que trustent to be made parties. 738. Rule when cestuis que trust are exceedingly numerous. 739. Unknown owners. 740. When a defendant may require new parties to be joined. WHO ARE PROPER DEFENDANTS IN FORE- CLOSURE CASES. 741. Prior incumbrancer. 742. Other proper defendants. WHEN THE ASSIGNOR OF THE MORTGAGE IS A NECESSARY OR PROPER PARTY TO AN ACTION TO FORECLOSE IT. 743. Assignment as security. 744. Assignment by parol. 745. Purchase by assignee. 746. Implied covenants of assignor. ENFORCING PERSONAL OBLIGATION FOR DEBT IN FORECLOSURE SUIT. - 747. It is provided by statute. 748. Assuming mortgage. 749. Guarantor. 750. Personal representatives of mort- gagor. UNNECESSARY PARTIES. 751. Adverse interests. 752. Contest as to priority. 753. The owner of another parcel of land. 754. Persons having no interest or lien. WHO AEE PEOPBB PLAINTIFFS IN FOEECLOSITEE OASES. § 718. If a mortgage be assigned as security for a debt of less amount, it would be proper -for both the assignor and assignee to join as plaintiffs in foreclosing it ;' it would also be regular that the ' Hoyt V. Martense, 16 N.Y. 231; Cerf v. Ashley, 9 Pacif. Rep. (Cal.) 658. 473 MORTGAGES OF REAL PROPERTY. [§§ 719-720. assignee should proceed by himself ; or, especially if the assignee de- clines to move, the assignor could proceed in his own name, since, in equity, he is still the owner of the security.' If the mortgagee, who has assigned the mortgage as security, commence a foreclosure, mak- ing his assignee a party defendant, the assignee is the only person who can object ; the mortgagor will not be allowed to raise the question, since it is of no importance to the mortgagor whether the assignee is^a plaintiff or a defendant." If the assignee of the mortgage, hold- ing the same as a mere security, becomes the owner of the equity of redemption, the mortgage does not merge and the assignor may foreclose.^ Where the assignee holding the mortgage as a mere security, ob- tains a judgment for the satisfaction of his own demand, and this amount is paid to him by his assignor, this revests the title in such assignor, who may afterward bring an action in his own name. The previous judgment will not be a bar to the new action." § 719. Foreclosure by party in interest.— An action to foreclose may be maintained by any person who has an interest in the mort- gage, though it cannot always be maintained by the person who has an interest in the proceeds of the mortgage. The test is as to whether the plaintiff has the right to give a valid acquittance to the mortgagor for the mortgage debt, or any part of it ; or as to whether his ac- quittance would be necessary to perfect the discharge ; and, in either case, he may institute the foreclosure. If the person foreclosing has only a part interest in the mortgage, those who are interested with him should first be invited to become plaintiffs, and on refusal, they should be joined as defendants." "Where a mortgage is executed to one to secure money to be paid to another, the latter, if alive, can maintain a suit to foreclose it,' and if he be dead the action is properly brought by his administrator.' § 720. If the mortgage belongs to two or more persons, it is best that they should all join as plaintiffs in the action to foreclose." ' Norton v. Warner, 3 Edw. 106; Sim- ' Hancock v. Hancock, 22 N. Y. 568 ; son V. Satterlee, 6 Hun, 305; s. c. affi'd Lawrence v. Lawrence, 3 Barb. Ch. 64 N. Y. 657 ; Hopson v. jEtna Axle & 71. Spring Co., 50 Conn. 597. « Lady Superior v. McNamara, 3 Barb. ' Simson v. Satterlee, 6 Hun, 305; s c. Ch. 375 ; 49 Am. Dec. 184. affi'd 64 N. Y. 657. ' Nolle v. Libbert, Adm'r, 34 Ind. 163. ' Graydon v. Church, 7 Mich. 36. ° Shirkey v. Hanna, 3 Blackf. (Ind.) * O'Dougherty v. Remington Paper 403 ; 26 Am. Dec. 426. Co., 81 N. Y. 496. §§ 721-722.] PARTIES TO rOEECLOSUJR-E. 473 If the action is brought by one of them, and the others are joined as defendants, the complaint should show that those not joining as co- plaintiffs had been requested so to join, and had refused ; but if the complaint does not show these facts, and the defect is not objected to by the interposition of a demurrer, it will be waived.' Where there are two co-mortgagees, and one has become the owner of the equity of redemption, the other can sustain a bill for fore- closure against him to the extent of his proportionate interest." Partners need not be joined as plaintiffs in the foreclosure of a mortgage given to only one of the firm as trustee for the partner ship.' On a bill filed by partners to foreclose a partnership debt, on the death of one of them the suit can be prosecuted by the survivors.* § 721. If a mortgage is made to secure different debts of two or more persons, all of the parties in interest should unite as plaintiffs in an action to foreclose it ;" but any one of them may bring the action if the others refuse, and those refusing may be joined as defendants.' Such a mortgage is several and not joint, and if one dies, the survivor cannot enforce it for both debts.' Where a number of mortgages have equal liens upon the same property, all mortgagees should be asked to join as plaintiffs, and such as refuse should be made defendants." § 722. Surety subrogated to rights of mortgagee, — ^If a per- son who stands in the relation of surety to the mortgage debt is com- pelled to pay it, he is entitled to be subrogated to the rights of the mortgagee, and without any formal assignment, either in writing or by parol, he may foreclose the mortgage in his own name." This is the position of a person who has guaranteed the payment of the mort- gage, or who, being obligated to pay the debt, has sold the land, either subject to the mortgage debt,'" or to some person who assumed the obligation." The same right extends to a person who, though not 'Carpenter v. O'Dougherty, 2 N. Y. Halsey v. Reed, g Paige, 446; Ellsworth Sup. (T. & C.) 427, affi'd 58 N. Y. 681. v. Lockwood, 42 N. Y. 89. ^ Sandford v. Bulkley, 30 Conn. 344. '° Cox v. Wheeler, 7 Paige, 248 ; Tice ^Shelden V. Bennett, 44 Mich. 634. v. Annin, 2 Johns. Ch. 125; Cherry v. * Roberts v. Stigleman, 78 III. 120. Monro, 2 Barb. Ch. 618; Ferris v. Craw- ' Etna Ins. Co. v. Finch, 84 Ind. 301. ford, 2 Den. 595. « Goodall V. Mopley, 45 Ind. 355. " Johnson v.Zink, 52 Barb. 396; Brew- ' Burnett v.Pratt,39Mass.(22 Pick.)556. er v. Staples, 3 Sandf. Ch. 579; Halsey 'Pottery. Crandell, Clark, 119. v. Reed, 9 Paige, 446; Marsh v. Pike, 'McLean v. Towle, 3 Sandf. Ch. 117 ; 10 Paige, 595. 474 MOETGA&ES 01' EEAL PEOPESTT. [§§ 723-724. holding the actual relation of surety for the mortgage debt, still t ilds an interest in the land subsequent to the mortgage, since to the extent of his interest in the land he is a surety for the mortgage.' § 723. Other remedies of surety. — It is not necessary for the surety to pay the mortgage debt before being entitled to some relief. The principle is settled in this State that if a surety requests the creditor to collect the debt from the principal, and the creditor refuse or neglect to do so at a time when it is collectible, and from a subse- quent change of circumstances it becomes uncollectible, the surety is by such conduct of his creditor exonerated from his liability.^ It will be noticed that mere delay in foreclosing or neglect on the part of the mortgagee, no request being shown, will not release the surety or charge the mortgagee with the loss ; the surety must request the mort- gagee to proceed.' Nor is this his only remedy ; a surety is entitled to be exonerated by coercing the creditor into a proceeding against the principal debtor or against property which he may hold in pledge." This cannot be done by compelling the mortgagee to file a bill to foreclose ; bnt the surety may himself file a bill, the mortgage debt being due, and making the mortgagee and all parties interested in the equity of redemption parties to the suit, he may call for a sale of the property pledged for the payment of the debt, and for a judg- ment that those parties who are primarily liable discharge the ob- ligation.' § 734, Mortgagp to executors and trustees. — ^A mortgage which names the mortgagee as " A. B., acting executor of the last will of C. D.," \a prima facie the private property of A. B.° On the death of A. B., the secnntj prima facie vests in his personal repre- sentatives, and not in his successors in the trust ;' and if the adminis- trator with the will annexed of C. D. commence an action to foreclose such mortgage, the personal representatives of A. B. are necessary ' Averill v. Taylor, 8 N. Y. (4 Seld.) c. affi'd 10 Paige, 595 ; Cornell v. Pres- 44; Ellsworth V. Lockwood, 42 N. Y. 89. cott, 2 Barb. 16 ; McLean v. Lafayette, ''Remsen v. Beekman, 25 N. Y. 552 ; 3 McLean, 587; Hayes v. Ward, 4 Johns. King V. Baldwin, 17 Johns. 384 ; Paine Ch. 123, 132. But see Slauson v. Wat- V. Packard, 13 Johns. 174 ; Colgrove v. kins, 86 N. Y. 597, 602, where the doc- Tallman, 67 N. Y. 95. trine of Marsh v. Pike is litnited. ' Merchants' Ins. Co. v. Hinman, 34 " People v. Keyser, 28 N, Y. 226 ; Barb. 410. Peck v. Mallams, 10 N. Y. 509 ; Renaud * Norton v. Warner, 3 Edw. 108, n. ; v.Conselyea, 4 Abb. 28o,afB'd 5 Abb.346. King V. Baldwin, 17 Johns. 384. ' Renaud v. Conselyea, 4 Abb. 280 ; ' Marsh v. Pike, i Sandf. Ch. 210 ; s. s. c. affi'd 5 Abb. 346. §§ 725-727.] PAETIES TO FOEEOLOSURE. 475 parties, and the complaint must show and the plaintiff must prove, aside from the language of the mortgage, that it is a part of the assets of C. D.' If the mortgage be intended to secure a debt to the estate, it should be to A. B., as executor, etc. Where an executor loans money belonging to the estate, not in his representative, but in his individual capacity, and takes a bond and mortgage to secure the loan, payable to him individually, in case of default the cause of action accrues to him personally, and upon his death his personal representatives only can enforce the securities.'' A mortgage executed to a trustee may be foreclosed by his executor or administrator.' § 725. Foreclosure by one executor against another. — Courts of equity will entertain an action by one executor against another who is indebted to the estate, for such equitable relief as may be proper, and as the interests of the estate or of creditors or legatees may re- quire. On this principle, one executor may maintain an action to foreclose a mortgage as against his co-executor.* So, also, the fact that the mortffngee holds an interest as trustee in the equity of re- demption will not prevent him from foreclosing against his co-trustee and others.' § 726. Where a specific legacy is made of a mortgage, it should be foreclosed by the legatee ; but if the legacy be general, to be paid out of the mortgage, the action is properly brought by the executor." If a mortgage be bequeathed to a person who is also one of two or more executors, he may foreclose as legatee, being liable to account as legatee for the mortgage if necessary to satisfy debts.' § 737. Foreign executor or administrator. — ^Where a voluntary payment of the mortgage debt is made by the mortgagor to the for- eign executor or administrator of the mortgagee, such payment wiU discharge the debt and cancel the hen ;' but such foreign executor or administrator will not be allowed to use the machinery of our courts to enforce such payment without first proving the wiU, or taking out ■ Peck V. Mallams, lo N. Y. (6 Seld.) 2i8 ; Lawrence v. Lawrence, 3 Barb. 509. Ch. 71. ' Caulkins v. Bolton, 98 N. Y. * Paton v. Murray, 6 Paige, 474. 511. ^ Newton v. Stanley, 28 N. Y. 61. ' Bunn V. Vaughan, i Abb. App. Dec. ' Proctor v. Robinson, 35 Mich. 284. 253. ' Parsons v. Lyman, 20 N. Y. 103 ; ■* McGregor v. McGregor, 35 N. Y. see Stone v. Scripture, 4 Lans. 186. 476 MOETGAGES OF EEAL PBOPEETT. [§ 728. letters of administration in tins State.' It is not because the foreign executor or administrator has no right to the assets of the deceased, existing in this State, that he is refused a standing in our courts, for his title to such assets, though conferred by the law of the domicile of the deceased, is recognized everywhere. Reasons of form, and a solicitude to protect the rights of creditors and others resident in the jurisdiction in which the assets are found, have led to the disability of foreign executors and administrators, which disabihty, however incon- sistent with principle, is very firmly established.'' The disability of the foreign executor or administrator to sue in our courts does not attach to the subject of the action, but to the person of the plaintiff, and the assignee of such foreign executor or administrator may main- tain an action in this State, to foreclose a mortgage transferred to him by such foreign executor or administrator.' tTpon a similar principle, the legatee of a bond and mortgage under a will executed in another State, the land being in this State, may foreclose without causing the will to be proved here.* The objection that the plaintiff is a foreign executor or adminis- trator, and therefore has " no legal capacity to sue," must be taken either by demurrer or answer, or it win be waived.' § 728. The foreclosure of a mortgage by advertisement, under a power of sale and pursuant to the statute, is a matter of contract and not of jurisdiction, and the foreign executor or administrator may therefore adopt that method of foreclosure without seeking the author- ity of our courts of probate." In an action to foreclose a mortgage brought by the administrator of the mortgagee, the regularity of his appointment as such adminis- trator cannot be attacked ; his letters are conclusive.^ ' Vermilya v. Beatty, 6 Barb. 429 ; * Smith v. Webb, i Barb. 230. Parsons v. Lyman, 20 N. Y. 103 ; Will- >■ McBride v. The Farmers' Bank of iams V. Storrs, 6 Johns. Ch. 3S3 ; Doo- Salem, 26 N. Y. 457, 459 ; Robbins v. little V. Lewis, 7 Id. 45 ; Vroom v. Van Wells, 26 How. 15 ; Doolittle v. Lewis, Home, 10 Paige, 549 ; Morrell v. Dickey, 7 Johns. Ch. 51 ; Zabriskie v. Smith, 13 I Johns. Ch. 153 ; Brown v. Brown, i N. Y. (3 Kern.) 322. Barb. Ch. 189. « Doolittle v. Lewis, 7 Johns. Ch. 45 ; ' Per Denio, Ch. J., in Petersen v. Averill v. Taylor, 5 How. 476 ; s. c. i The Chemical Bank, 32 N. Y. 21, 43 ; Code R. N. S. 213 ; Hayes v. Fray, s^ s. c. 29 How. 240. Wis. 503, 518. ' Petersen v. The Chemical Bank, 32 ' Abbott v. Curran, 98 N. Y. 665 ; N. Y. 21. Code of Civ. Pro., § 2591. §§ 729-731.] PARTIES TO FORECLOSUEE. 477 WHO ABB NECESSAET DEFENDANTS IN FOEEOLOS0EE CASES. § 729. The Code of Civil Pocedure provides ' that any person may be made a defendant in an action who has or claims any interest in the controversy adverse to the plaintiff, or who is a necessary party defendant, for the complete determination or settlement of a ques- tion involved therein, except as otherwise expressly prescribed. § 730. All persons who have or claim an interest in or lien upon the mortgaged premises, subsequent and inferior to the lien of the mortgage, are necessary parties to the action to foreclose. That is to say, it is necessary that all persons having any claim to, or lien upon, any part of the equity of redemption, shall be brought into court, in order that the judgment of the court ordering a sale shall bind the entire equity of redemption. ° The judgment will be en- tirely without force as to all persons not made parties ; their interests will remain undisturbed, and they will retain the right to redeem from the holder of the mortgage before the sale, and from the pur- chaser after the sale.' § 731. Examples. — The owner of the equity of redemption is, of course, a necessary party,* as also is his wife, she having a dower right, even though the mortgage be for purchase money." If the mortgagor shall have conveyed the property subsequent to the mort- gage, his grantees will stand in his place, and must be made parties ; so the assignee in bankruptcy of the mortgagor is a necessary party.' If the mortgagor is dead, his heirs represent him, and must be made parties,' even though the mortgage be in the form of an absolute conveyance with a parol defeasance.' The holders of all liens or in- '§447- V. Nelson, 14 How. 32; s. c. 23 Barb. ^ Eagle Fire Ins. Co. v. Lent, 6 Paige, 88 ; Griswold v. Fowler, 6 Abb. 113 ; 635 ; s. c. I Edw. Ch. 301 ; Denton v. Traveller's Ins. Co. v. Patten, 98 Ind. Nanny, 8 Barb. 618 ; Peabody v. Rob- 209 ; Porter v. Muller, 65 Cal. 512. erts, 47 Barb, gl ; Brainard v. Cooper, ' Denton v. Nanny, 8 Barb. 618 ; Var- 10 N. Y. (6 Seld.-) 356 ; Gage v. Brews- tie v. Underwood, 18 Barb. 561 ; Mills ter, 31 N. Y. 218 ; Stockwell v. State, v. Van Voorhies, 20 N. Y. 412 ; Wheeler loi Ind. I. V. Morris, 2 Bosw. 524 ; Watt v. Alvord, ^ Bloomer v. Sturges, 58 N. Y. 168 ; 25 Ind. 533. Rathbonev. Hooney, 58 N, Y. 463 ; Kay 'Winslow v. Clark, 47 N. Y. 261; V. Whittaker, 44 N. Y. 565 ; Peabody v. Burnham v. De Bevorse, 8 How. 159. Roberts, 47 Barb. 91 ; Haines v. Beach, ' Wood v. Moorhouse, i Lans. 405 ; 3 Johns. C h. 459 ; Ensworth v. Lambert, Bill v. Hall, 76 Ala. 546. 4 Johns. Ch. 605. " Dodd v. Neilson, go N. Y. 243. ' Reed v. Marble, 10 Paige, 409 ; Hall 478 MORTGAGES OF EEAL PEOPEETY. [§ 732. cumbranees upon the equity of redemption, must be joined, or their right to redeem from the mortgage will not be affected ;" so a judg- ment creditor of the mortgagor must be made a party, though the mortgage be for purchase money and the judgment be docketed prior to the conveyance to the mortgagor;'' so, too, must the holder of a sheriff's certificate of sale against the mortgagor.' The mort- gagor is a necessary party, so long as any interest in the equity of redemption remains in him, as if the equity has been sold under a judgment against him, and the right to redeem. under such sale has not yet expired.* Tenants in possession under lettings subsequent to the mortgage are also necessary parties." The assignee of the mortgagor in insolvency is a necessary party as being the owner of the equity of redemption." If the mortgage be made to secure several notes or obligations, the holders of all of them must be parties to the action to foreclose, either as plaintiffs or defendants.' A mortgagee is entitled to letters of administration on the estate of a deceased subsequent mortgagee, who is a non-resident with no administratr-r bore, but such letters must be limited to proceedings in foreclosure and other relief upon the mortgage." § 733. Assignee in bankruptcy. — If a petition in bankruptcy be filed against the mortgagor prior to the commencement of the action to foreclose, it will be necessary to join the assignee when he is ap- pointed, since his rights date back to the filing of the petition.' But proceedings in bankruptcy against the mortgagor, or owner of the equity of redemption, do not suspend action in a State court already commenced for the foreclosure of a mortgage, and unless restrained by the bankruptcy court, the plaintiff may proceed to judgment and sale in ^lie action.'" If the State court acquires jurisdiction of the parties and of the subject-matter of the suit, it is competent to ad- ' Peabody v. Roberts, 47 Barb. 91 ; ■• Hallock v. Smith, 4 Johns. Ch. 649. Hallinger v. Bates, 43 Ohio St. 437 ; ' Hirsch v. Livingston, 3 Hun, g. Pauley v. Canthorn, loi Ind. 91 ; Ward « Stafford v. Adair, 57 Vt. 63. V. McNaughton, 43 Cal. 161 ; Davenport ' Delespine v. Campbell, 52 Tex. 4. V. Turpin, 41 Cal. 100. » Lothrop's Case, 33 N. J. Eq. 246, and 2 V^'inebrener v. Johnson, 7 Abb. N. note ; Courser's Will, 3 Green Ch. (N. S. 202. J.) 408. ' N. Y. Life Ins. & Trust Co. v. Bailey, " Barron v. Newberry, i Biss. (U. S. 3 Edw. Ch. 416 ; Kepley v. Jansen, 107 Circ.) 149. 111. 79 ; Britton v. Hunt, g Kans. 228 ; " Lenihan v. Hamann, 55 N. Y, 652 ; Bollinger v. Chouteau, 20 Mo. 89. Cleveland v. Boerum, 23 Barb. 201. §§ 7B3-734.] PARTIES TO rOREOLOSUEE. 479 minister full justice ; it cannot take judicial notice of the proceed- ings in bankruptcy in another court, however seriously they may afEect the rights of parties to the suit already pending. The bankrupt act expressly provides that the r:8ignee may prosecute or defend all suits in which the bankrupt was a party at the time he was adjudi- cated a bankrupt. If there is any reason for interposing, the assignee can have himself substituted for the bankrupt or made a defendant on petition. If he chooses to let the suit proceed without such de- fense, he stands as any other person would on whom the title had fallen since the suit commenced.' § 733. Unrecorded incumbrance. — The plaintiff is not bound, in his foreclosure, to take notice of any incumbrance against the mortgaged premises which does not appear in the public records, and of which he does not have actual notice. Persons claiming under an unrecorded mortgage need not be made parties, though their assignment was recorded.'' § 734. Future and contingent interests. — When there is a con- test in relation to real estate, or where a mortgagee wishes to fore- close a mortgage, in a case where there are several future and con- tingent interests in the equity of redemption, it is not necessary to make every person having or claiming a future and contingent inter- est in the premises a party to the action in order to bar his right or claim by a judgment in the cause ; but it is sufficient if the person who has the first vested estate of inheritance, and all other persons having or claiming prior rights or interests in the premises, are brought before the court. The person having the first estate of inheritance and who is in esse, appears to be a necessary party 'to an action of foreclosure, to make the judgment a bar either to his right or to the right of any contingent remainderman who is not made a party.' "Where legacies are charged upon the land the legatees are neces- sary parties to an action to foreclose a prior mortgage.^ The heirs of the mortgagor," or of the owner of the equity, and the personal ' Eyster v. Gaff, gi U. S. (i Otto) 521; The Eagle Fire Ins. Co. v. Cammet, 2 13 Alb. L. J. 272. Edw. 127 ; Brevoort v. Brevoort, 70 N. ''Kipp V. Brandt, 49 How. 358 ; Code, Y. 136 § 1671. See Notice of Pendency of *McGown v. Yerks, 6 Johns. Ch. Action, g§ 764 to 767. 450. » Nodine v. Greenfield, 7 Paige, 544 ; = Wood v. Moorhouse, i Lans. 405. 480 MORTGAGES OP REAL PROPERTY. [§§735-736. representatives of a deceased subsequent mortgagee, are also necessary parties.' § 735. Trustees. — "Where the equity of redemption has been transferred to trustees, all of the trustees must be made parties to the action." The omission of a trustee to comply with a statute providing that any person to whom property is assigned in trust shall, before enter- ing upon the discharge of his duties, give a bond, does not render it unnecessary to make him a party to an action to foreclose a prior mortgage. " An assignee for the benefit of creditors who, as such, is a proper party to the foreclosure, and who has no interest individually, and who is named a defendant individually, is bound as assignee.* § 736. Cestuis que trust. — If the equity of redemption be vested in a trustee in trust, both the trustee and the cesfuis que trust should be made parties to the foreclosure." The only established exception to the general rule is in cases of remote limitation of the equity of redemption ; in which, on account of the impossibility of bringing in parties not hi esse or not ascertained, but who may subsequently be- come entitled, it is held sufficient to bring before the court the per- sons in esse who have the first estate of inheritance, together with the persons having all the precedent estates and prior interests." The fact that the mortgage was executed by the trustee, pursuant to the direction of the court, will not obviate the necessity for making the cestuis que trust parties to the action to foreclose it.' It has been said that where a devise is made to an executor in trust to sell, the cestuis que trust are not necessary parties, and that " the trustee may execute the power of sale by adopting the sale made in the action." ' This is very doubtful. ' Shaw V. McNish, i Barb. Ch. 326. Coles v. Forrest, 10 Beav. 552, 557 ; ' Paton V. Murray, 6 Paige, 474. Story's Eq. PI. § 193, and cases cited, 2 Gardner V. Brown, 21 Wall. 36. § 197; Oliver \/. Piatt, 3 How. (U. S.) ^Wagner V. Hodge, 34 Hun, 524. 333; Clark v. Reyburn, 8 Wall. 318; * Leggett V. The Mutual Life Ins. Co., contra. Case v. Price, 9 Abb. in; s. c. 17 64 Barb. 23 ; Williamson v. Field, 2 How. 348. Sandf. Ch. 533, 562 ; The Eagle Fire « Williamson v. Field, 2 Sandf. Ch. Ins. Co. V. Cammet, 2 Edw. Ch. 127 ; 533 ; Brevoort v. Brevoort, 70 N. Y. Nodine V. Greenfield, 7 Paige, 544; Raw- 136 ; Mitchell v. Mitchell, 17 N. Y. 2io; son V. Lampman, 5 N. Y. (i Seld.) 456 ; Clemens v. Clemens, 37 N. Y. 59. Union Bank v. Bell, 14 Ohio St. 200; ■Williamson v. Field, 2 Sand. Ch. 533. Claverly v. Phelp, 6 Mad. 231 ; Thomas 'Verdin v. Slocum, 9 Hun, 150, re- V. Dunning, 5 De Gex & Smale, 6i8 ; versed 71 N. Y. 345. §§ 737-738.] PARTIES TO FOKECLOSUKE. 481 If the mortgagee holds the mortgage upon a secret trust for the benefit of cestuis que trust not named in it, they are not necessary parties to the foreclosure.' In a litigation concerning the title to a bond and mortgage, where the complainant had been appointed receiver to collect the money due thereon and distribute it to four beneficiaries, it was held that all of such beneficiaries were necessary parties." § 737. Limitations of the rule requiring cestuis que trustent to be made parties. — " There is no question about the general rule that where the equity of redemption has been sold or devised, and be- come divided into particular estates and remainders, the owners of these estates should be made parties to an action to foreclose the mort- gage, and that when the equity of redemption has been vested in trustees for the benefit of others, the cestuis que trustent, as well as the trustees, should be parties. But the trusts here referred to are ex- press trusts under which the cestuis que trustent acquire equitable estates or interests directly in the land as land, and not trusts implied by law where the whole legal title is in one person, subject only to a liability to account to others for the value of the property." In all the cases where cestuis que trustent have been held to be necessary parties, they have been entitled to some direct estate or interest in the land as land. The rule does not apply where the equity of redemp- tion has been bought in by an executor on a foreclosure of a junior mortgage for the purpose of protecting the estate from loss of the- mortgage debt or some part thereof. In such a case the land is the- property of the executor, as such, and is treated as personalty be- tween him and the persons to whom it is his duty to account.' A guardian holding, as such, a judgment junior in hen on tlie mortgaged property is the only person necessary to be joined as de- fendant in order to bar claimants under the judgment ; the ward is not a necessary party.' § 738. Rule when cestuis que trust are exceedingly numerous. — The rule requiring cestuis que trust to be joined as defendants has sometimes been departed from where the beneficiaries were very nu- merous.^ In a case where real estate had been purchased by a joint 'Young V. Whitney, i8 Fla. 54. * Loehr, Guardian, v. Cblborn, 92 Ind. ' Tyson v. Applegate, 40 N. J. Eq. 305. 24. 'Per Rapallo, J., in Lockman v. ' Land Co. v. Peck, iia. IlL4o8i. Reilly, 95 N. Y. 64. 31 482 MOBTGAOES OF REAL PROPERTY. [§ 738. fund, raised by subscription of above 250 shares. or subscribers, and the property was conveyed to three trustees, and an action to fore- close was brought, making only the trustees parties, Chancellor Kent remarked : " The trustees were selected in this case to hold and rep- resent the property for the sake of convenience and because the sub- ecriberswere too numerous to hold and manage the property as a copartnership. The trustees are sufBcient for the purpose of this bill, which is for a sale of the pledge ; it would be intolerably op- pressive and burdensome to compel the plaintiffs to bring in all the cestuis que trust. The delay and expense incident to such a proceed- ing would be a reflection upon the justice of the court. This is one of the eases in which the general rule cannot and need not be en- forced ; for the trustees sufficiently represent all the interests con- cerned ; they were selected by the association for that purpose, and we need not look beyond them." ' A similar doctrine was lield by Wigeam, V. C., in IloUcmd v. Baker (3 Hare, 68), who said : " I do not doubt that the court does allow a selected number to represent a numerous body of defendants, whose interests are sought to be adversely affected in a suit. Lord Eldon repeatedly said it might be done, if the purposes of justice re- quired it, and Lord Cottenham, in Atwood v. Small^ after saying that the right course was to bring aU parties before the court, ob- served, that courts of justice are bound to have regard to the mode in which the affairs of mankind are conducted ; and when, in conse- quence of the mode of dealing, it would be impossible to work out justice if the rule requiring all persons to be present were not de- parted from, it must be relaxed rather than be allowed to stand as an obstruction to justice." The exception to the general rule requiring cestuis que trust to be made parties, which allows a foreclosure to proceed without their presence if they are exceedingly numerous, has special application in the ease of assignments for the benefit of creditors.' If cestuis que trust are omitted because of their great number, the plaintiff should allege in his complaint the facts which justify their omission.* ' Van Vechten v. Terry, 2 Johns. Ch. « Not reported, but see 4 Myl. & C. 197. See also N. J. Franklinite Co. 635. V. Ames, 1 Beas. (N. J.) 507 ; Willis v. » wilHs v. Henderson, 5 111. (4 Scam.) Henderson, 5 111. (4 Scam.) 13 ; Swift v. 13 ; Grant v. Duane, 9 Johns. 591. iStebbins, 4 Stew. & Port. (Ala.) 447. ■« Holland v. Baker, 3 Hare, 68. §§ 739-741.J PARTIES XO JFOEECLOSUEE. 483 § 739. Unknown owners. — When, in an aption to foreclose, un- known owners are made defendants as authorized by the Code of Civil Procedure," and are described in the summons, the addition of the words, " if any," does not invalidate the process." § 740. When a defendant may require new parties to be joined. — The want of a necessary party to the suit may be objected to by the mortgagor, because his ultimate liability for the debt makes it of the highest importance to him that the title made by the sale shall be perfect against all equities." If the defect of parties ap- pear upon the face of the complaint, the objection may be made by demurrer, but if not, it should be taken by answer.* It has been said that the v/ant of an indispensable party can be taken advantage of at any stage of the litigation when the fact is made to appear." If the ownership of the mortgage is doubtful, it is proper for a defendant to demand that all persons interested in the security be brought in as parties." It is also said that a surety for the mortgage debt, who is made a party for the purpose of obtaining a judgment against him, is en- titled to require that the principal debtor be made a party, if he is within the jurisdiction of the court.' WHO AEE PEOPEE DEFENDANTS IN FOEECLOSUEB CASES. § 741. Prior incumbrancer. — There are those who are said to be proper but not necessary parties to the action. That is to say, the court may, without their being made parties, proceed and render a judgment which will be effectual to transfer the entire equity of re- demption, in addition to the interest of the mortgagee in the land, to the purchaser at the sale ; but if they are brought in, the court may proceed to grant some further relief or quiet some controversy which eould not otherwise be done. For example, the plaintiff may make a prior incumbrancer a party to the action for the purpose of having the amount of such incumbrance determined and liquidated, and either paid out of the proceeds of the property, or allowed to re- main as a lien on the property in the hands of the purchaser, the ' §§ 438, 451. ^ Morris v. Wheeler, 45 N. Y. 708 ; ' Abbott V. Curran, 98 N. Y. 665. Code, § 498. ' Hall V. Nelson, 14 How. 32 ; s. c. 23 ^ Boyle v. Williams, 72 Ala. 351. Barb. 88 ; Morris v. Wheeler, 45 N. Y. ° Konright v. Smith, 3 Edw. 402. 708 ; contra, Kay v. Whittaker, 44 N. Y. ' Bigelow v. Bush, 6 Paige, 343 565. 573- 484 MOETaAGES OP BEAL PROPEKTr. [§ 742. object being to dispose of the estate by one decree, and tbus prevent needless litigation.' But an admitted prior mortgagee is never a necessary party to a foreclosure suit," and consequently, if he dies, or his interest devolves on another pending the action, the proceedings may go on without reviving or continuing them against his successor. The decree in such a ease, cannot affect the prior lien, because there is no party before the court who represents it.' A prior mortgagee is only a proper party when his claim is to be paid ; he cannot be made a party for the purpose of defeating his Hen.* The purpose of joining the prior mortgagee must clearly appear on the face of the complaint or his prior lien will not be affected.' Where there was an unrecorded prior mortgage, and it was a mat- ter of dispute as to what the rights of the alleged prior mortgagee were, an application made by the junior mortgagee, after a judgment and a sale, had to amend the proceedings by making the prior mort- gagee a party, was denied, and a resale was ordered, subject to the alleged claim of priority, so as to give bidders notice of it.° It is only where the junior mortgagee endeavors to sell the entire property, or where there is a substantial doubt as to the amount due to the prior lien creditors, that they should be made parties.' A purchaser at a tax sale is a proper party to a foreclosure, and a provision may be made in the judgment for the payment of his prior lien.' § 742. Other proper defendants. — A mortgagor who makes an absolute conveyance of his interest in the property is a proper but not a necessary party to the foreclosure." If such conveyance be ab- ' Holcomb V. Holcomb, 2 Barb. 20 ; * MoUer v. MuUer, 12 Hun, 674. Chamberlain v. Lyell, 3 Mich. 448 ; The ' Hagan v. Wallcer, 14 How. (U. S.) Western Ins. Co. v. The Eagle Fire Ins. 37; Payne v. Hook, 7 Wall. 432; French Co., I Paige, 284; Vanderkemp v. Shel- v. Shoemaker, 14 Wall. 315 ; Jerome v. ton, II Id. 28; Hancock V. Hancock, 22 McCarten, in U. S. Dist. Ct., 4 N. Y. N. Y. 568 ; Moller v. MuUer, 12 Hun, Weekly Dig, 439. 674; Masters V. Templeton, 92 Ind. 447; "Roosevelt Hospital v. Dowley, 57 Jerome v. McCarter, 94 U. S. 734; Por- How. 489. ter V. Barclay, 18 Ohio St. 546. ' Daly v. Burchell, 13 Abb. N. S. 264 ; ^ Western Reserve Bank v. Potter, Bigelow v. Bush, 6 Paige, 343 ; Van Clarke,432; Whitev. Bartlett,i4Neb.320. Nest v. Latson, 19 Barb. 604; Drury v. ' Hancock v. Hancock, 22 N. Y. 568. Clark, 16 How. 424 ; Shaw v. Hoadley, ■* Smith V. Roberts, 62 How. ig6. 8 Black. 165 ; Cord v. Hirsh, 17 Wise. ' Emigrant Industrial Savings Bank v. 532; Delaplaine v. Lewis, 19 Wise. 476 ; Goldman, 75 N. Y. 127. Root v. Wright, 21 Hun, 344 ; Andrews § 743.] PARTIES TO FORECLOSXJRE. 485 solute upon its face it will not aJBEect the rights of the plaintiff, if he does not acquire notice of the fact before judgment that it was really intended as security." So, too, if the wife unites with her husband in conveying an estate in which she is entitled to dower, the convey- ance operates as an extinguishment of her right, not only with respect to the grantee and his successors in interest, but also as to third par- ties, and she need not thereafter be made a party to a foreclosure of a prior mortgage." A person to whom the mortgagor has contracted to convey the mortgaged premises is a proper, though not a necessary party to the action.' WHEN THE ASSIGNOR OF THE MORTGAGE IS A NECESSAET OE PEOPEK PAETT TO AN ACTION TO FOEECLOSE IT. § 743. Assignment as security.— Where a mortgagee parts with all his interest in the mortgage by assignment, and has no connection afterward with the mortgaged premises, it cannot, in general, be nec- essary for the assignee to make him a party to the action to foreclose ;' but it is always proper to make such assignor a party." In cases where the assignment is by way of security, although it be absolute in terms and express the payment of a full consideration, the assignor is not only a proper but a necessary party to the action ;" the reason given for the rule being that the assignor of the mortgage having a right to redeem it, also has the right to show that the debt which the assignment was given to secure has been paid, and he is entitled to be brought before the court to enable him to do so.' It has also been determined that, where the ownership of the mortgage being foreclosed is doubtful or in dispute, the court will, at the in- V. Stelle, 22 N. J. Eq. 478 ; Chester v. 289 ; Andrews v. Gillespie, 47 N. Y. King:, I Green. Ch. (N. J.) 405 : Vreeland 487 ; Chew v. Brumagen, 13 Wall. 497 ; V. Loubat, Id. 104 ; Mescall v. Tully, Gower v. Howes, 20 Ind. ig6. 91 Ind. 96 ; Petry v. Ambrosher, 100 * Weed v. Stevenson, Clarke, 166; Hoyt Ind. 510. V. Martense, 16 N. Y. 231 ; Stevens v. ' Griswold V. Fowler, 6 Abb. 113. Reeves, 33 N. J. Eq. 427 ; Harwell v. ' Elmendorf V. Lockwood, 4 Lans. 393; • Lehman, 72 Ala. 344. Stiger V. Bent, iii 111. 328. * Kittle v. Van Dyck, i Sandf. Ch. 76 ; * Crooke v. O'Higgins, 14 How. 154. Johnson v. Hart, 3 Johns. Cas. 322 ; * Johnson v. Hart, 3 Johns.^Cas. 322 ; Whitney v. McKinney, 7 Johns. Ch. Whitney v. McKinney, 7 Johns. Ch. 144 ; 144 ; Bard v. Poole, 12 N. Y, (2 Kern.) Christie v. Herrick, i Barb. Ch. 254 ; 495. Western Reserve Bank v. Potter, Clarke, 'Bard v. Poole, 12 N. Y. (2 Kern.) 432; Ward V. Van Bokkelen, 2 Paige, 495. 486 MORTGAGES OF EEAL PEOPEKTT. [§§ 744r-746. stance of any of the parties to the action, order the varidns claimants to be made parties.' § I4:i. Assignment by parol.— These decisions would seem to indicate that it is proper in a foreclosure suit to determine, not only the rights of claimants in the equity of redemption as against the mortgagee, but also the rights of different claimants to the mortgage. If the assignment of the mortgage be by parol, it would appear to be necessary for the protection of a purchaser under the judgment to give the assignor a day in court, to answer the allegation that the assignment had been made by him ; and where it is in writing, but is not so executed as to be capable of being recorded, the same rule would apply. A similar course of reasoning would show the assignor to be a proper party where the assignment was in writing and re- corded, so as to bind him by the allegation that the assignment was absolute and without condition. It was said by the court in Bloomer v. Stv/rges (58 ]S". T. 168, 1T5), that the interest of an assignor of a mortgage assigned by way of security, that it should bring more than the amount as security for which it has been assigned, is the only ground on which he needs to be a party, but the statement was not necessary to the determination of the case, the decision being to the effect that where an assignor is made a party defendant, he is bound by the judgment in the action, and when the property is sold under the judgment for less than the debt which the assignment is given to secure, no right of redemption remains in the assignor. § 745. Purchase by assignee. — It has been adjudged that if the assignee^ as security, forecloses the mortgage by advertisement " or b^^ action, the assignor being a co-plaintiff,' and afterward purchases under the foreclosure, he will hold the land or the proceeds thereof subject to the equitable right of the assignor of the mortgage to redeem, but it wiU be remarked that iii neither of these cases was the assignor a de- fendant in an action to foreclose, and in neither case did the judgment of foreclosure assume to adjudicate upon his rights.* § 746. Implied covenants of assignor. — By the sale and assign- ment of the mortgage the assignor impliedly warrants that there is no ' Kortright V. Smith, 3 Edw. 402. * See these cases distinguished and " Slee V. Manhattan Co., I Paige, 48. limited in Bloomer v. Sturges, 58 N. Y. ' Hoyt V. Martense, 16 N. Y. 231. ,^ i68. §§ 747-749.] PARTIES TO FOEECLOSURE. 487 legal defense to its collection arising out of its origin,' and it would be convenient to have the assignor in court if any defense should be interposed the success of which would make him liable upon his im- plied covenant. But it is not necessary to make him a party to accom- plish this object. Upon the coming in of an answer, the plaintiS may give notice to the assignor, and offer him the conduct of the action, and upon his so doing, the assignor will be bound by the result of the litigation, whether he takes any part in it or not." ENFORCING PEESONAL OBLIGATION FOE DEBT IN FOEEOLOStTRE SUIT. § 747. It is provided by statute that any person who is liable to the plaintiff for the payment of the debt secured by the mortgage may be made a defendant in the action ; and if he has appeared, or has been personally served with the summons, the final judgment may award payment by him of the residue of the debt remaining un- satisfied, after a sale of the mortgaged property and the application of the proceeds, pursuant to the directions contained therein.' § 748. Assuming mortgage. — If the mortgagor shall have con- veyed the mortgaged premises to a person who is one of the defend- ants, and who has assumed the payment of the mortgage debt, he would be a proper party to the action if the plaintiff desired to obtain a, judgment against him, but he would not be a necessary party, and the person who had assumed the debt having become the primary debtor, would have no just cause of complaint if he were not a pai'ty.* But where the plaintiff makes a mere surety of the mortgagor for the payment of the debt, a party for the purpose of obtaining a judg- ment against such surety for any deficiency, if the mortgaged prem- ises are found to be insufficient to satisfy the debt and costs, such surety has a right to insist that the principal debtor shall be made 3 party to the action if he is within the jurisdiction of the court.' § 749. Guarantor. — A person who guarantees the payment of the mortgage debt, either in his assignment of the mortgage to the plain- tiff or otherwise, is a proper party to the action, and judgment can be rendered against him in it for deficiency.' So, too, a person who ' Delaware Bank v. Jarvis,20 N.Y. 226. ^ Drury v. Clark, 16 How. 424. ' Andrews v. Gillespie, 47 N. Y. 487. ' Bigelow v. Bush, 6 Paige, 343. ' Code of Civ. Pro., § 1627, supersed- * Bristol v. Morgan, 3 Edw. Ch. 142 ; ing 2 R. S. igi, §§152, 154; Thorne v. Rushmore v. Grade, 4 Edw. Ch. 84; Newby, 59 How. 120. Jarman v. Wiswall, 24 N. J. Eq. 267. 488 M0ETGAGE8 OF EEAL PEOPEETT. [§ 750. tas guaranteed the collection of the mortgage debt is a proper party, but in such a case the judgment should provide that no execution should issue as against him until an execution against the parties primarily liable had been returned unsatisfied.' It has also been held that a defendant who covenanted that a mortgage was due and col- lectible is a proper party.'' Where the owner of a mortgage assigned the same with a covenant that the amount of the mortgage was due and collectible, and subse- quently took the bond of a third person as his indemnity, it was held that the assignee of the mortgage was, in equity, entitled to the ben- efit of this collateral bond as security for the mortgage debt ; and also that in a suit for the foreclosure of the mortgage, the obligor in such bond was properly made a defendant to enable the complainants to obtain a decree over against him for the deficiency.' § 750. Personal representatives of mortgagor. — There is no legal objection to making the personal representatives of a person liable for the payment of the mortgage debt, parties to the action, for the purpose of obtaining a judgment against them for the payment of any deficiency out of the estate of the decedent in their hands ; to be paid in a due course of administration, and this is expressly author- ized by statute.* In most cases, however, it is a useless expense to make the personal representatives, even of the mortgagor, parties to the action to foreclose the mortgage, for no judgment can be made for the payment of the deficiency out of the estate of the decedent, so as to entitle the plaintiff to an execution, until a full account of the administration of the estate has been taken ; except in those cases where the executors and administrators admit assets sufficient to pay the plaintifi's debt, and all other debts of an equal and of a higher class which were due by the decedent.' The plaintifE cannot make the heirs or devisees of a deceased mort- gagor or guarantor, who have no interest in the mortgaged premises, parties to the action, for the purpose of obtaining a judgment for deficiency which shall bind the real estate of the decedent which has come to them by descent or devise." ' Leonard v. Morris, g Paige, go. Belloe v. Rogers, g Cal. 104 ; Boyle v. " Curtis V. Tyler, g Paige, 432. Williams, 72 Ala, 351 ; contra, Rhodes ' Id. V. Evans, Clarke, 168. *Glacius V. Fogal, 88 N. Y. 434; Col- ' Per Walworth, Ch. in Leonard v. lihs' Petition, 6 Abb. N. Cas. 227 ; Morris, g Paige, go. Hodgson V. Heidman, 66 Iowa, 645 ; « Leonard v. Morris, g Paige, go. §§ 751-753. J PARTIES TO PORECLOS0EE. 489 TJNNECESSAJJT PAETIES. § 751. Adverse interests. — So far as mere legal rights are con- cerned, upon a bill of foreclosure, the only proper parties to the suit are the mortgagor and mortgagee, and those who have acquired rights or interests under them subsequent to the liiortgage. And the mort- gagee has no right to make one who claims adversely to the title of the mortgagor, and prior to the mortgage, a party defendant for the purpose of trying his adverse claim of title in a court of equity.' The statute makes the title acquired by the purchaser under the judgment the same as if it were a foreclosure of the equity of redemption,'' and it is manifestly not the purpose of an action of foreclosure to try con- flicting claims of title. Where a party setting up a claim of title in hostility to the mortgagor is made a defendant, the judgment will be held erroneous and will be reversed, though made after a hearing upon pleadings and proofs." Where one of four tenants in common made a mortgage purport- ing to convey the whole estate, it was held that the three who did not join in the mortgage were not proper parties to the foreclosure.'' This rule applies to a wife or widow whose dower right is not bound by the mortgage," and to a mechanic's lien filed before the re- cording of the mortgage." § 752. Contest as to priority. — The case of one claiming in hos- tility to the mortgagor's title must be distinguished from a contest as to priority between two lienors, both claiming under the mortgagor. In such a case the claim of priority between the two is necessarily involved in an action to foreclose one of the Hens and proper to be determined in it.' § 753. The owner of another parcel of land bound by a junior ' Merchants' Bank v. Thomson, 55 N. ' Corning v. Smith, 6 N. Y. (2 Seld.) Y. 7 ; Brundage v. Domestic & For. 82 ; Lewis v. Smith, 9 N. Y. (5 Seld.) Miss. See. 60 Barb. 204 ; Eagle Fire Ins. 502; Lee v. Parker, 43 Barb. 611; Co. V. Lent, 6 Paige, 637 ; Frelinghuysen Rathbone v. Hooney, 58 N. Y. 463 ; V. Colden, 4 Paige, 206; Jones v. St. Merchants' Bank v. Thomson, 55 N. Y. Johns, 4 Sandf. Ch. 208 ; Holcomb v. 7 ; Emigrant Industrial Savings Bank v. Holcomb, 2 Barb. 22 ; Banks v. Walker, Goldman, 75 N. Y. 127. 3 Barb. Ch. 438 ; Meigs v. Willis, 66 * Stephen v. Beale, 22 Wall. 329. How. 466 ; Bram v. Bram, 34 Hun, 487; ' Lewis v. Smith, g N. Y. (5 Seld.) Chamberlin v. Lyell, 3 Mich. 448 ; Cro- 502 ; Barker v. Burton, 67 Barb. 458. gan V. Spence, 53 Cal. 15; Marlow v. " Emigrant Industrial Savings Bank v. Barlew, 53 Cal. 456. Goldman, 75 N. Y. 127. » 2 R. S., p. 192, § 158. ' Brown v. Volkening, 64 N. Y. 76. 490 MOETGAGES OF REAL PEOPEETY. [§ 754. mortgage which is also a lien on the equity of redemption of the property, against which a prior lien is sought to be foreclosed, is not a necessary party to the action. He has an interest in making the property bring a high price in order that the lien upon his own land may thereby be reduced, but he has no title in the equity of re- demption of the property against which the foreclosure is being had.' Where a part of the mortgaged premises have been conveyed sub- sequently to the mortgage, the grantees need not be made parties to a bill by the mortgagee to enforce his mortgage against the portion not conveyed.'' § 754. Persons having no interest or lien. — Since a married woman may, under our statutes, convey her real estate without the signature or consent of her husband, and thereby bar his inchoate right of curtesy, the husband of the owner of the equity of redemp- tion is not a necessary party to an action to foreclose.' A judgment against executors is not a lien upon the land of a deceased person,* and the holder of such a judgment is, therefore, not a proper party to a foreclosure. A creditor-at-large of the mortgagee who has no judgment is not entitled to be made a party to the action, even upon his own appli- cation." ' Barnes v. Decker, 49 N. Y. Supr. (17 ' Trustees of Jones v. Roth, 18 W. Dig. J. & S.) 221. 459 ; Mapes v. Brown, 14 Abb. N. C. 94. * Hosford V. Nichols, i Paige, 220; * Code of Civil Procedure, § 1823. Kirkham v. Dupont, 14 Cal. 559; Green /The People v. Erie Railway Co., 56 V. Dixon, 9 Wis. 532. How. 122. CHAPTER XXI. NOTICE OF THE PENDENCY OF THE ACTION TO FORECLOSE. j 755. Independent of statute provisions. 756. Act of 1823. 757. Statutory provisions now in force. 758. Changes in statutes. 759. Rule requiring proof of filing notice before judgment. 760. When the notice must be filed. 761. Complaint must be filed at or be- fore filing of notice. 762. Form and contents of the notice. 763. Errors in notice. 764. Who are bound by the notice. 765. Incumbrancer pendente lite. § 766. Limitations of notice. 767. Junior titles and liens under un- recorded instruments. 768. Indexing the notice. 769. Amendments. 770. If the complaint be amended by making new parties. 771. Cancelling the notice. 772. Delay of plaintiff. 773. Consequences of omission to file the notice. 774. Action for malicious filing of no- tice of lis pendens. % 755. Independent of statute provisions, it is a well-established rale that he who purchases during the pendency of a suit, is held bound by the decree that may be made against the person from whom he derives title. The litigating parties are exempted from taking any notice of the title so acquired ; and such purchaser need not be made a party to the suit. And hence arises the maxim pendente lite, nihil innovetv/f y the effect of which is not to annul the conveyance, but only to render it subservient to the rights of the parties in the litigation.' § 756. Act of 1823. — 'Eo notice other than that which is implied by the general rule of law, was required for the purpose of binding purchasers pendente lite, until the year 1823, when it was provided, in the act vesting equity powers in circuit judges,' that when any bill was filed before them or iii the Court of Chancery, which would ' Story's Eq. jur., § 406 ; Murray v. Ballou, I Johns. Ch. 566 ; Murray v. Lylburn, 2 Id. 441 ; Hayden v. Bucklin, 9 Paige, 512 ; Jackson v. Losee, 4 Sandf. Ch. 381 ; Zeiterv. Bowman, 6 Barb. 133; Griswold v. Miller, 15 Id. 520 ; Cleve- land V. Boerum, 23 Id. 201 ; 27 Id. 252 ; 3 Abb. 294. ' Laws of 1823, p. 213, § II. 492 MORTGAGES OF HEAL PROPERTY. [§ 757. according to law amount to constructive notice to purchasers of real estate, it should not be so deemed unless a notice should be filed in the office of the clerk of the county where the land was situated. The substance of this provision was re-enacted in the Revised Stat- utes," and in sections 1631 and 16Y0 of the Code of Civil Procedure it is applied to actions to foreclose mortgages. § 757. Statutory provisions now in force. — The following is section 1631 : " The plaintiff must, at least twenty days before a final judgment directing a sale is rendered, file in the clerk's office of each county where the mortgaged property is situated, a notice of the pendency of the action, as prescribed in section 1670 of this act ; which must specify, in addition to the particulars required by that section, the date of the mortgage, the parties thereto, and the time and place of recording it." The following are the sections of general application to actions respecting real property : § 1670. " In an action brought to recover a judgment affecting the title to, or the possession, use, or enjoyment of real property, the plaintiff may, when he files his complaint, or at any time afterward before final judgment, file in the clerk's office of each county where the property is situated, a notice of the pendency of the action, stating the names of the parties, and the object of the action, and containing a brief description of the property in that county affected thereby. Such a notice may be filed with the complaint, before the service of the summons; but in that case, personal service of the summons piust be made upon a defendant, within sixty days after the filing, or else, before the expiration of the same time, publication of the summons must be commenced, or service thereof must be made without the State, pursuant to an order obtained therefor, as pre- scribed in chapter fifth of this act." § 1671. "Where a notice of the pendency of an action may be filed, as prescribed in the last section, the pendency of the action is constructive notice, from the time of so filing the notice only, to a purchaser or incumbrancer of the property affected thereby, from or against a defendant with respect to whom the notice is directed to be indexed, as prescribed in the next section. A person whose convey- ance or incumbrance is subsequently executed, or subsequently re- corded, is bound by all proceedings taken in the action, after the ■ 2 R. S. 174, § 43. § 758.] KOTICE OF PENDEWCT OF ACTION. 493 filing of the notice, to tlie same extent as if he was a party to the action." § 16Y2. " Each county clerk, with whom such a notice is filed, must immediately record it, in a book kept in his oflSce for that pur- pose, and index it to the name of each defendant, specified in a direction appended at the foot of the notice and subscribed by the attorney for the plaintiff. The expense of procuring a new book, when necessary, must be paid out of the county treasury, as other county charges." § 1673. " Where a defendant sets up in his answer a counter- claim upon which he demands an afiirmative judgment affecting the title to, or the possession, use, or enjoyment of real property, he may, at the time of filing his answer, or at any time afterward before final judgment, file a like notice. The last three sections apply to such a notice. For the purpose of such an application, the defendant filing such a notice is regarded as a plaintiff, and the plaintiff is regarded as a defendant." § 1674. " After the action is settled, discontinued, or abated, or final judgment is rendered therein against the party filing the notice, and the time to appeal therefrom has expired, or if a plaintiff filing the notice unreasonably neglects to proceed in the action, the court may, in its discretion, upon the application of any person aggrieved, and upon such notice as inay be directed or approved by it, direct that a notice of the pendency of an action, filed as prescribed in the last four sections, be cancelled of record by a particular clerk, or by all the clerks with whom it is filed and recorded. The cancellation must be made by a note to that effect, on the margin of the record, referring to the order. Unless the order is entered in the same clerk's ofiice, a certified copy thereof must be filed therein, before the notice is cancelled." § 758. Changes in statutes. — These sections of the Code of Civil Procedure, as they now stand, are the result of numerous amendments. Prior to 1851, the notice could be filed only at the time of commenc- ing the action. Prior to 1857, the rule did not apply to attachment proceedings. Prior to 1858, a grantee whose deed was not recorded, had to be discovered by the plaintiff, and made a party to the action ;' but subsequent to that time, and now, every person receiving or re- cording his conveyance after the fifing of such notice, even though it ' Hall V. Nelson, 23 Barb. 88 ; s. c. 14 How. 32. 494 MOKTGAGES OF EEAL PKOPEBTT. [§§759-760. be a few Lours only, is deemed a subsequent purchaser and incum- brancer ; he stands in the same position as if he had actually pur- chased the land, or actually received his incumbrance after the filing of such notice, whatever the fact may be, and he is bound by such proceedings to the same extent as if he were a party to the action ; that is, he is foreclosed and barred of all rights in the subject-matter of the controversy.' Prior to 1862, if the notice were in proper form and had been filed in an action in conformity with the pro- visions of the statute, the court had no power to order it to be taken from the files.'' Prior to 1862, there had been doubt as to whether the action could be said to be pending until after a summons had been -served,^ and the amendment of that year not only settled that doubt, but also fixed a limit beyond which the notice would not operate without the action being prosecuted. The new Code of CivU Pro.- cedure makes a few changes mainly of detail only. § 759. Rule requiring proof of filing notice, before judgment. — Pule 60 requires that " in all foreclosure cases the plaintiff, when he moves for judgment, must show by afBdavit or by the certificate of the clerk of the county in which the mortgaged premises are situated, that a notice of the pendency of the action, containing the names of the parties thereto, the object of the action, and a description of the property in that county affected thereby, the date of the mortgage and the parties thereto, and the time and place of recording the same, ha^ been filed at least twenty days before such application for judgment, and at or after the time of filing the complaint as required by law." This is a mere rule of practice, and does not affect the validity of the judgment. If no proof of the filing of the notice is furnished, the judgment is irregular, but not void.* Where a proper notice of Us pendens is in fact filed, a defect in the affidavit of filing may be disregarded or amended.' § 760. When the notice must be filed. — By the express provis- ion of the statute, the notice of lis pend,ens is requiresd to be filed 'Stern v. O'Connell, 35 N. Y. 104. Donald, 63 Md. 503 ; but see Stern v. 'Pratt V. Hoag, 12 Hpw. 215 ; s. c. 5 O'Connell, 35 N. Y. 104. Duer, 631. * Potter v. Rowland, 8 N. Y. (4 Seld.) ^ Burroughs v. Reiger, 12 How. 171 ; 448 ; Curtis v. Hitchcock, 10 Paige, 399. The Farmers' Loan & Trust Co. v. ' White v. Coulter, 1 Hun, 357 ; s. c. Dickson, 17 How. 477 ; Butler v. Tom- 3 N. Y. Sup. (T. & C.) 608. linson, 38 Barb. 64.1 ; Sanders v. Mc- § 761.] NOTICE OF PENDENCY OF ACTION. 495 " at the time of filing the complaint, or at any time afterward." Be- fore the passage of the statute of 1823, the filing of the bill was nec- essary to constitute a notice to a subsequent purchaser, the principle being that the record should contain everything necessary for his in- formation ; the rule is still the same, and the decisions are uniform ihat the notice has no force or effect until the filing of the complaint.' It has been said that if the notice be filed before the filing of the complaint, it will commence to operate when the complaint shall be filed. This may be a fair rule, but it is not perceived how it can be deduced from the statute. Unless the fact that the notice remains in the hands of the clerk constitutes a new filing, it seems quite plain that a notice filed at a time when there was no warrant for filing it, could not become operative because an event subsequently hap- pened which would have rendered a filing of it proper." § 761. Complaint must be filed at or before filing of notice. — In Weeks v. Tomes (16 Hun, 349, affi'd 16 N. T. 601) the objection that the complaint had not been filed until after the filing of the no- tice of Us pendens, was attempted to be corrected by an order made at special term directing that the complaint be filed nunc pro tunc as of the date of filing the notice. It was held, however, that this order did not operate to bind a person not a party to the action who acquired a lien upon the property after the filing of the notice of Us pendens, and before the actual filing of the complaint. The power of the court to amend by fifing papers nunc pro twnc was fully conceded, and the operation of such an order upon all persons who are parties to the action in which it was made, was not controverted. But such an order is not operative as against persons who are not parties to the action and have no opportunity to be heard upon the question whether or not it should be granted. The proper practice would have been to bring in the new lienor by amendment. If a notice of Us pendens is filed before the complaint, an amended notice may be filed at the time of filing the complaint, or at any time afterward, and vdll from that date operate as notice. ° ' Leitch V. Wells, 48 N. Y. 58; ; Stern Benson v. Sayre, 7 Abb. 472 n. ; Farm- V. O'Connell, 35 N. Y. 104 ; Weeks v. ers' Loan & Trust Co. v. Dickson, 9 Tomes, 16 Hun, 349 ; s. c. affi'd 76 N. Abb. 61 ; s. c. 17 How. 477 ; Butler v. Y. 601. Tomlinson, 38 Barb. 641. ^Examine Burroughs v. Reiger, 12 'Daly v. Burchell, 13 Abb. N. S. How 171 ; Tate v. Jordan, 3 Abb. 392 ; 264. 496 MORTGAGES OF EEAL PROPERTY. [§§ 763-764. § 762. Form and contents of the notice.— In an action for the foreclosure of a mortgage, the notice of the pendency of the action must contain the following particulars : 1. The names of the parties to the action ; 2. The object of the action ; 3. The description of the property in that county affected by the action ; 4. The date of the mortgage ; 5. The parties thereto ; and 6. The time and place of re- cording the same.^ § 763. Errors in notice. — It is not necessary that all of these par- ticulars be described with minuteness or entire accuracy. Thus, when a notice of the pendency of an action against John F. Fowler was filed, this was held sufficient to put a purchaser from John Fowler upon inquiry and charge him with notice ;" so, where the notice stated that the mortgaged premises were situate in the county of Erie, and also stated that the mortgage was recorded on a certain day, but did not state the office or county in which the mortgage was recorded, this was held to be a substantial compliance with the statute, since the mortgage was presumably recorded in the office of the clerk of the county in which the mortgaged premises were.' § 764. Who are bound by the notice.— The filing of a notice of Us j)endens is constructive notice of the action to subsequent pur chasers and incumbrancers of the property, and as to them, it is a substitute for actual notice.* Constructive notice is, in its nature, no more than evidence of notice, the presumption of which is so violent that the court will not even allow of its being controverted. ° A per- son having actual notice of the pendency of the action is bound by the judgment rendered in it ; but what is sufficient notice is a point of some nicety. It has been said that the notice must be so clearly proved or necessarily inferred, as to make it fraudulent for the pur- chaser to take a conveyance in prejudice to the known title of an- other ;° and, on the other hand, whatever is sufficient to put a party on inquiry is considered in equity as conveying notice.' When act- ual notice is alleged, the question of notice is, in general, a mixed question of law and fact. ' Code, §§ 1631, 1670. 'Story's Eq. Jur. § 399. 'Weber V. Fowler, II How. 459. « Wiswall v. McGowan, Hoff. Ch. • Potter V. Rowland, 8 N. Y. (4 Seld.) 125. 448- ' Pitney v. Leonard, i Paige, 461 ; * Hall V. Nelson, 14 How. 32 ; s. c. 23 Hawley v. Cramer, 4 Cow. 717. Barb. 88. § 765.] NOTICE OF PENDENCY OF ACTION. 497 A person who parts with nothing upon receiving a conveyance of property, concerning which an action is pending, cannot be injured by not receiving notice of it; and such a one is bound by the result of the action, without notice either actual or constructive.' § 765. Incumbrancer pendente lite. — The notice of Us pendens is notice to a purchaser, pendente lite, of any portion of the premises affected by the action, precisely as the record of a conveyance made by the defendant would be. It is not notice to prior incumbrancers, and as to prior mortgagees, even though made parties, and all other persons whose rights are superior to the claims of the plaintiff, the notice is of no effect." So, a purchaser by contract in possession is not chargeable with notice of Us pendens, so as to render payments by him to the vendor invalid.' And upon a like principle, a person who claims title under a sale for taxes is not bound by the notice.* A judgment creditor of the mortgagor whose judgment is recov- ered after the due filing of a notice of Us pendens in the action to foreclose, is cut off by the decree of foreclosure.' It needs no argu- ment or citation of authorities to show that a judgment which is a lien upon lands and might be enforced to the taking of the title to them from the judgment debtor, or any subsequent purchaser from him, is a charge and burden upon those lands and hence an incum- brance upon them. Every right to or interest in land, to the dimi- nution of its value, but consistent with the passing of the fee by a conveyance, is an incumbrance upon it.' A judgment becomes an incumbrance as of the date of its docketing, and if this is subsequent to the regular filing of a Us pendens under the statute, it is subject to the proceedings in the action.' The notice being proper in form and properly filed is constructive notice to purchasers of the property from the defendant, who, pur- ' Leavitt v. Tylee, i Sandf. Ch. 207. v. Gage, 41 Barb. 60 ; Dwight v. Phil- ^Stuyvesant v. Hone, I Sandf. Ch. lips, 48 Barb. 116. 419 ; s. c. affi'd su6 nam. Stuyvesant v. ^ Becker v. Howard, 4 Hun, 359, affi'd Hall, 2 Barb. Ch. 151 ; The People ex 66 N. Y. 5. rel. Tremont Bank v. Connolly, 8 Abb. ' Fuller v. Scribner, 16 Hun, 130 ; s. 128 ; Chapman v. West, 17 N. Y. 125, c. affi'd 76 N. Y. 190. afiS'g s. c. 10 How. 367, sub nom. Chap- * Prescott v. Trueman, 4 Mass. 627, man v. Draper ; Lament v. Cheshire, 65 630. N. Y. 30. ' Per Folger, J., in Fuller v. Scribner, 2 Parks V. Jackson, 11 Wend. 442; 76 N. Y. igo, 192, distinguishing Rod- Mayer V. Hinman, 13 N. Y. 180 ; Smith gers v. Bonner, 45 N. Y. 379, 387. 32 498 MORTGAGES OF REAL PROPERTY. [§§ 766-767. chasing pendente lite, are bound by the judgment." An assignee in bankruptcy, appointed in proceedings commenced subsequent to the filing of the notice, is bound by it,' and the notice is practically as effectual in preventing a transfer of the property by the defendant as an injunction could be.'' § 766. Limitations of notice. — The notice arising from a notice of lis pendens, and a complaint filed in an action, is notice of "what those papers contain, and of nothing more. It cannot be extended beyond the property which is the subject of the suit, and the specific property which is sought to be reached must in some way be desig- nated.' If the court has no jurisdiction, the notice cannot operate, since the only information which could be derived from the papers would be, that a suit had been commenced which could not terminate in any valid judgment." Only persons who are not parties to the action, and who claim under parties, are affected by the notice of lis pendens, and they only can take advantage of an omission to file it.' § 767. Junior titles and liens under unrecorded instruments. — Good faith will require that the mortgagee shall make every person holding interests in or liens upon the equity of redemption, so far as they are known to him, parties to the foreclosure, even though they claim under unrecorded instruments, but it is not entirely clear that he is under a legal obhgation to do so. Actual possession will operate as equivalent to recording, and a vendee in possession under a contract of purchase must be made a party in order to bar his right and eject him under process issued in the action, after the sale in foreclosure.' This rule will apply to tenants of the mortgagor in possession at the time of the commencement of the foreclosure." If the mortgagee has no actual notice of any unrecorded title or Hen, and if his notice of pendency of action is properly filed, it is clear that he could not be ' Zeiter v. Bowman, 6 Barb. 133 ; ' Carrington v. Brentz, i McLean, 167. Griswold v. Miller, 15 Barb. 520; Har- "White v. Coulter, i Hun, 357; s. c. rington v. Slade, 22 Barb. 161; Aldrich 3 N. Y. Sup. (T. & C.) 608. V. Stephens, 49 Cal. 676. ' Martin v. Morris, 62 Wis. 418 ; Hod- ' Cleveland v. Boerum, 23 Barb. 201, son v. Treat, 7 Wis. 263, and cases cited ; afB'd24 N. Y. 613; Griswold v. Fowler, 6 Green v. Dixon, 9 Wis. 552. Abb. 113; Hayes V.Dickinson, 9 Hun, 277. ' Hirsch v. Livingston, 3 Hun, 9; ^ Stevenson V. Fayerweather, 21 How. Morris iv. Movvatt, 2 Paige, 586, 590; 449. Veeder v. Fonda, 3 Paige, 94 ; Seaman * GriiEth v. Griffith, Hoff. Ch. 153 ; s. v. Hicks, 8 Paige, 655. C. affi'd 9 Paige, 3I5- \ §768.] NOTICE OF PENDENCY OF ACTION. 499 prejudiced by an omission to name the holder of it as a defendant ;' but in some States it is held that in case of actual notice the mort- gagee must make such a person a party under penalty of invalidating his decree." Some equity might be noticed in such a rule if it were confined to cases where the mortgagee also becomes the purchaser at the sale, but it could not be applied without doing injustice if the purchaser could not also be charged with similar notice. It is be- lieved that under our statute as to filing notice of pendency of action the final test in every case must be found in the record. Section 1671 of the Code of Civil Procedure declares the effect of a notice of pend- ency of action in the following language : " A person whose convey- ance or incumbrance is subsequently executed or subsequently recorded is bound by all proceedings taken in the action after the filing of the notice to the same extent as if he was a party to the action." The rule, in other words, requires the plaintiff to name as defendants all persons whose titles or liens appear of record. If other claimants are known to him they may be named, but if omitted they are never- theless, bound in all respects as if they were parties.'' §768. Indexing the notice. — "Each county clerk, with whom such a notice is filed, must immediately record it in a book kept in his ofiice for that purpose, and index it to the name of each' defend- ant specified in a direction, appended at the foot of the notice, and subscribed by the attorney for the plaintiff." ' In the absence of express adjudication it is believed that " the names of such of the defendants as it shall be necessary to insert in said index," are the names of such of the defendants as could give a title to a purchaser or incumbrancer of the property affected thereby, which would include only the names of those persons who had a transferable interest in the equity of redemption. This would in- clude the names of subsequent mortgagees, whose assignees are bound by the lis pendens,'' and the names probably of judgment creditors, and until it is adjudicated that a subsequent assignee of a junior mortgagee or judgment creditor is concluded by such a notice,,when, by the act of the plaintiff, the indexing is so done that the name of ' White V. Bartktt, 14 Neb. 320 ; Jones Lament v. Cheshire, 65 N. Y. 30, 38 ; V. Witter, 13 Mass. 304 ; Reel V. Wilson, Kindberg v. Freeman, 39,, Hun, 466; 64 Iowa, 13. Kipp V. Brandt. 49 How. 358.. ' Dickerman v. Lust, 66 Iowa, 444; * Code of Civ. Pro. § 1672. Woods V. Love, 27 Mich. 308. " Hovey v. Hill, 3 Lans. 167. " Stern v. O'Connell, 35 N. Y. 104 ; 500 MORTGAGES OF REAL PEOPEETT. [§§ 769-771. Buch person does not appear, it would be tlie safer practice to index against the names of all of the defendants holding any interest in or lien upon the property affected by the action. § 769. Amendments. — The safer course, where the plaintiff dis- misses his complaint in a foreclosure suit, as against a judgment cred- itor wbo has a subsisting lien, or leaves his name out of the complaint by amendment, is to file a new notice of the pendency of the suit against the remaining parties ; so as to render it perfectly certain that the judgment creditor, whose name is left out after the filing of the first notice, will be barred by the foreclosure and sale. And when the complaint is amended by adding new parties, after the fifing of the notice of Us pendens, a new notice is absolutely necessary to bar the rights of the judgment creditors of such new parties, as well as to mate the amended bill constructive notice to subsequent pur- chasers from such new parties.' § 770. If the complaint be amended by making new parties, the plaintiff's attorney will be unable to make ithe affidavit or furnish the proof required by Kule 60, unless he file an amended notice, for he is required to show that a notice of the pendency of the action, " containing the names of the parties thereto," had been filed twenty days before the application for judgment. But it seems that this is only necessary as to the added parties, and that grantees from the original parties to the action would be bound by the original notice." It has been said that it is within the power of the court to amend the notice ;' but this may be doubted, except in so far as to make for- mal corrections.* A new notice may be filed at any time, but an amendment could not be ordered wliich would disturb the vested rigjits of third persons. § 771. Cancelling the notice. — Apart from the terms of the stat- ute, the court has no power to remove the notice of the pendency of the action from the public records, and this can only be done when the action is either settled, discontinued, or abated,' or final judgment is rendered therein against the party filing the notice, and the time ' Per Ch. Walworth, in Curtis v. * See Weeks v. Tomes, i6 Hun, 349, Hitchcock, ID Paige, 399 ; Clark v. Ha- affi'd 76 N. Y. 601. vens, Clarke, 560. ' Pratt v. Hoag, 12 How. 215 ; s. c. 5 » Waring v. Waring, 7 Abb. 472. Duer, 631 ; Mills v. Bliss, 55 N. Y. * Vanderheyden v. Gary, 38 How. 367. 139. §§ 772-773.] NOTICE OF pendency of action. 501 to appeal therefrom lias expired, or if a plaintiff filing the notice un- reasonably neglects to proceed in the action.' Tlie notice which is filed is a snhstitute for actual notice, and it takes the place of the presumption of notice, which the statute de- stroys ; and the impropriety of depriving a litigant of an opportunity to notify the world that he makes certain claims, and that he has sought the aid of a court of justice in order to enforce therti, is quite apparent. The notice once filed in a proper action takes the place of actual notice ; it does not depend for its efficacy upon the discretion of the court, and it cannot be removed or cancelled on any other grounds than those which the statute provides.'' § 772. Delay of plaintiff. — It has been held that a notice of lis pendens becomes void if the action be not diligently proceeded with, and a delay of eight years was adjudged to have this effect. Like an execution which has been long disregarded, it is said to become dor- mant.' This rule is, however, open to grave objections, and may be doubted. An order should be applied for on the ground that " the plaintiff filing the notice unreasonably neglects to proceed in the action." * § 773. Consequences of omission to file the notice. — If no notice of lis pendens be filed in the action, the judgment cannot be deprived of its effect as against persons claiining from or through the defendants after judgment. The only office of a notice of Us pendens is to give notice of the pendency of the action so as to affect persons who may deal vrith the defendants in respect to the property in- volved, before final judgment, and thus bind them by the judgment in the same manner as if they had been made parties to the action. JS"either the Revised Statutes nor the Code relate to the effect of a judgment, or to the rights of parties claiming under a title acquired after judgment, but only to those who take during the pendency of the action. Section 1671 of the Code of Civil Procedure provides that tlie pendency of the action shall be constructive notice to pur- chasers, from the time of the filing of the notice only, and that pur- chasers shall be bound by all proceedings taken after the filing of such notice, to the same extent as if they were made parties to the action. This is the whole scope and object of the notice. It has no 1 Code of Civ. Pro. § 1674. * Myrick v. Selden, 36 Barb. 15. » Mills V. Bliss, 55 N. Y. 139. * Code of Civ. Pro. § 1674. 502 MOETGAGES OF EEAL PROPERTY. [§774. relation 'to titles acquired after judgment. It never was pretended that any notice was necessary to render the judgment effectual as against parties claiming under the defendant, by transfer subsequent to the judgment. The judgment disposes of the rights of the parties, and is a^ matter of public record. Its eilect cannot be impaired by any subsequent transfer by the defendant. He is concluded by it, and his grantee cannot be in any better situation than the party from whom he' obtained his right.' § 774. Action for malicious filing of notice of lis pendens.— The filing of a notice of Us pendens in an action intended to affect the title to real estate is authorized by law as an ordinary means for securing the plaintiff in case a judgment is eventually rendered in his favor. Such a filing does not interrupt the enjoyment by the defendant of the property or its rents, although it may practically occasion great inconvenience to him by hampering him in procuring a purchatser or in borrowing money. In Smith v. Smith (20 Hun, 555) a demurrer to a complaint in an action for damages for fihng a notice of lis pendens, maliciously and without probable cause, was overruled, and the doctrine was sustained that such an action could be maintained on its being shown that the notice had been cancelled by the court by an interlocutory order. But, a reargument having been ordered, it was afterward held in the same case (26 Hun, 673) that such actions are governed by the rule applicable to other actions for malicious prosecution, and that it must be shown not only that the prosecution was mahcious and without probable cauee, but also that it had reached a termination in favor of the person bringing the action to recover dtoages for the injury thereby occasioned." ' Per Rapallo, J., in Sheridan v. An- ° Clark v. Cleveland, 6 Hill, 344 ; Fay drews, 49 N. Y. 478 ; Campbell v. Hall, v. O'Neill, 36 N. Y. 10; Thomason v. De 16 N. Y. 579 ; Totten v. Stuyvesant, 3 Mott, 18 How. 529. Edw. 500. CHAPTER XXII. PRACTICE IN ACTIONS TO FORECLOSE MORTGAGES. §775. 776. 777- 778. 779- 780. 781. 782. 783. 784- 785. 786. 787. 788. 789. 790. 791. 792. 793- 794- 795- 796. 797. 798. 799- 800. 801. 802. 803. S04. Nature of the action. Trial by the court without a jury. What courts have jurisdiction. Venue. Service of summons. Unknown defendants. Service of summons on married women. Service of summons on infants. Appearance of defendants. Appearance by attorney without authority. A party to the action. Joinder of actions to foreclose two or more mortgages. Where there are two mortgages upon the same premises. Consolidation of actions to fore- close. Foreclosure by prior mortgagee no bar to foreclosure by junior mortgagee. Complaint. Allegation as to proceedings at law. Allegation as to defendants. The prayer for judgment. Supplemental complaint. Verification of complaint. Notice of no personal claim. Death of parties pending action to foreclose. Change of parties pending action. Survey of the property. Practice on failure to answer. Affidavit on applying for judg- ment. Notice of application for judg- ment. Order of reference to compute. Report on order of sale. § 805. When one defendant appears and makes default, and another de- fendant answers. 806. When reference to compute is improper. 807. Notice to attend preliminary ref- erence. 808. Application for judgment. 809. What may be included in amount due on mortgage. 810. Oath of referee. 811. Duties of referee on reference, under the rule. 812. The referee must swear and ex- amine the witnesses himself. 813. Production of bond on trial. 814. Mortgage debt payable in instal- ments. 815. If the whole amount secured by the mortgage has not become due. 816. New application to enforce pay- ment of second instalment. 817. Covenants other than for pay- ment of money. 818. A mortgage may be foreclosed for default in payment of in- terest. 819. Opening default. 820. Form and contents of the judg- ment of foreclosure and sale. 821. Who may be appointed referee. 822. Provision in judgment as to or- der of sale. 823. Prior incumbrancers. 824. If, in an action to foreclose a deed, absolute upon its face, as a mortgage. 825. Property situated in different counties. 826. Amending judgment. 604 MORTGAGES OF REAL PEOPEETT. [§§ 775-776. JUDGMENT FOR DEFICIENCY. § 827. The judgment should provide. 828. Judgment for deficiency not al- lowed. 829. Adjusting liabilities for deficiency between defendants. 830. Personal judgment without fore- closure. 831. Personal representatives of de- ceased obligor. 832. Docketing judgment for defi- ciency and execution thereon. 833. Varying judgment by subsequent contract. FORCE AND EFFECT OF JUDGMENT. 3 834. The parties to an action are con- cluded by the judgment. 835. Remedy is by appeal. 836. Merger of mortgage in judgment. 837. Presumption of redemption after twenty years. STAY OF PROCEEDINGS ON APPEAL. 838. The provisions of law. 839. The appellant may elect between undertakings. 840. Substituting receiver for under- taking. § 775. Nature of the action. — The Kevised Statutes pro\-ided that whenever a bill shall be filed for the foreclosure and enforce- ment of a mortgage, the court shall have power to decree a sale of the mortgaged premises, or such part thereof as maj be sufficient, to discharge the amount due on the mortgage, and the costs of suit.' The Code of Civil Procedure substitute for this provision is in section 1626, and is as follows : " In an action to foreclose a mort- gage upon real property, if the plaintiff becomes entitled to final judgment it must direct the sale of the property mortgaged, or of such part thereof as is sufficient to discharge the mortgage debt, the expenses of the sale, and the costs of the action." The enactment was, however, declaratory of the law," and the prac- tice in this State has always been to sell the property in the enforce- ment of the lien, and not to foreclose the equity of redemption.' The action therefore is not, properly speaking, an action to foreclose, but rather, as the statute expresses it, to enforce the mortgage. It is governed by the general rules of practice under the Code, the consideration of the most of which does not properly fall within the scope of this work, it being intended to discuss only those rules which especially concern the rights and remedies of parties to mort- § 776. Trial by the court without a jury.^As one result of the proposition that an action to foreclose partakes of the nature of a suit in equity, the parties have no legal right to have the issues which may be raised by the pleadings tried by a jury. In equitable actions it has always rested in the discretion of the court either to ask the aid of a • 2 R. S. 191, § 151; Code of Civ. Pro. § 1626. « Holies V. Duff, 43 N. Y. 469. " Mills V. Dennis, 3 Johns. Ch. 367. §§ 777-778,] PRACTICE IN ACTIONS TO FOKECLOSE. 505 jury to inform the conscience of the court, or to decide the case with- out such aid.' § 777. What courts have jurisdiction. — An action to foreclose a mortgage may be brought in the Supreme Court, which succeeds to the powers of the old Court of Chancery, and has a general juris- diction both at law and in equity.' Such an action is a local action, and the venue must be laid and the trial must be had in the county in which the mortgaged premises, or some part thereof, are situated.' It cannot be tried, either in whole or in part, in any other county.' Jurisdiction to foreclose a mortgage on real property situated with- in their respective local limits is also vested in the Court of Common Pleas for the city and county of New York,' the Superior Court of the city of New York,' the Superior Court of Buffalo,' the City Court of Brooklyn," the county courts,' and the City Court of Yonkers." The Mayor's Court of the City of Hudson and the Eeeorder's Courts of the cities of Utica and Oswego had also such jurisdiction under the Code of Procedure," and it is not disturbed by the present Code of Civil Procedure." § 778. Venue. — The "proper county" for the place of trial is where the mortgaged premises are situated, although the money may be loaned and the mortgage executed and delivered in another county." If the mortgaged premises are situated in two or more counties, the action to foreclose may be brought in either of them.'* It is, however, no objection to the regularity of the proceedings that the trial was in a county other than that in which the mortgaged premises may be situated, where there has been no motion or demand to change the place of trial first selected." ' Knickerbocker Life Ins. Co. v. Nel- Rees, i8 N. Y. 57 ; s. c. 17 How. 35 ; son, 8 Hun, 21 ; Barker v. Burton, 67 overruling Hall v. Nelson, 23 Barb. 88. Barb. 458 ; Lossee v. Ellis, 13 Hun, 655 ; " Code of Civ. Pro. § 3203. Carroll v. Deimel, 95 N. Y. 252. " § 33. 2 Const, of 1869, art. 6, § .6 ; Code of '^gg 2, 4. Civ. Pro. §217. ,_,'. ''Miller v. Hull, 3 How. 325 ; s. c. i 3 Code of Civ. Pro. "§"982. Code R. 113 ; Vallejo v. Randall, 5 Cal. ' Gould V. Bennett, 59 N. Y. 124. Rep. 461 ; HackenhuU v. Westbrook, 53 ^ Code of Civ. Pro. §§ 263, 3343. Ga. 285. • Id. '* Code of Civ. Pro. § 982 ; Boiling v. ' Laws of 1873, c. 239 ; Code of Civ. Munchen, 65 Ala. 558 ; Holme v. Tay- Pro. §§ 263, 3343. lor, 48 Ind. 169. ' Id. ' " Marsh v. Lowry, 26 Barb. 197 ; s. c. ' Code of Civ. Pro. § 340 ; Arnold v. su6 nom. March v. Lowry, 16 How. 41. 506 MOETGAGES OF BEAL PEOPEBTY. [§§ 779-780. In a case where the venue was laid in the proper county, but the judge for his own convenience and under objection adjourned the trial to another county, this was held to be error, and that the objec- tion was not waived by appearing on the trial.' Where the mortgaged property is situated partly in one State and partly in another, it is said that the court of either of them exercising the powers of the court of chancery can foreclose as to the whole." The better practice is to institute an independent action in each State." § 779. Service of summons. — The jurisdiction of the respective local courts does not depend upon the place where the process is served, but upon the place where the real estate affected by the fore- closure is situated ; and when a court acquires jurisdiction in this way the action may be commenced by service of the summons in any of the counties of this State, or by publication against non-resident ■defendants.' Where one or more of the defendants cannot be found within this State, the summons may be served upon such defendants by publica- tion in two newspapers, and if their places of residence are known, by depositing a copy of the summons and complaint in the post-office, directed to them.' § 780. Unknown defendants. — If any party or parties having any interest in or lien upon the mortgaged premises are unlcnown to the plaintiff, and the residence of such party or parties cannot, with reasonable diligence, be ascertained by him, service of the summons upon such parties may be made by publication in the State papdr and a newspaper published in the county where the premises are situated." Such a case would arise if the owner of the equity of redemption should die, and it should remain an uncertain or a disputed question as to who were his heirs at law. If service of the summons, in such a case, should be made under the terms of the statute, it would bar all parties in interest, even though they might have been infants.' ' Birmingham Iron Foundry v. Hat- Stevens, 2 Duer, 635 ; Spyer v. Fisher, field, 43 N. Y. 224. 5 J. & S. 93, loi ; see Code of Civ. Pro. 'Mead v. Hous. & N. R.R. Co., 45 §278. Conn. igg. ° Code of Civ. Pro. § 438. s Matter of U. S. Rolling Stock Co., 55 s j^ How. 286. 'Wheeler v. Scully, 50 N. Y. 667. See * Porter v. Lord, 4 Duer, 682 ; s. c, as to affidavit to authorize publication 4 Abb. Pr. 43 ; s. c. 13 How. 254 ; Bates of summons against unknown owners, f. Reynolds, 7 Bosw. 685 ; Varian v. Piser v. Lockwood, 30 Hun, 5. § 781. J PEAOTICE IN ACTIOKS TO FOEECLOSE. 507 It has sometimes been tlie practice to foreclose by advertisement in order to cut off unknown heirs, since the statute directs the notice of sale to be served on the personal representatives of the deceased mort- gagor, and does not require it to be served upon the heirs at law ; but a more satisfactory title may be made by foreclosing by action and serving the summons in the way indicated. § 781. Service of summons on married women. — Prior to the Code, service of a subpoena upon a married woman in a chancery suit was only necessary when the proceeding was against her in respect to her separate estate, in which her husband was only a nominal par- ty ; and not where the estate was in the husband, the wife having merely an inchoate right of dower. In the latter case it was the duty of the husband to put in a joint answer for himself and wife. If the wife refused to answer, the bill would be taken as confessed against her unless she applied and obtained an order to answer separately.' This rule was not changed by the Code of Procedure, and it was not necessary to serve the wife of the owner of the equity of redemption with the summons in an action to foreclose a mortgage jn order to cut off her inchoate right of dower ; service upon the husband being suf- ficient.' It will be observed that this rule only affected the service of the summons ; if the wife was not a party to the action her in- choate right of dower was not barred.' But this rule seems to have been changed by section 450 of the Code of Civil Procedure. " That section," says Mr. Theoop, in his notes, " was intended to sweep away all distinctions between a feime sole and &feme covert in respect to suing and being sued." Certainly, the language of the section could not very well have been broader. " In an action or special proceeding, a married woman appears, prosecutes, or defends alone or joined with other parties, as if she were singled Under this comprehensive provision it has been held that a married woman having an inchoate dower right in an equity of redemption, has a right to appear and defend a foreclosure by her own attorney in form as if she were single.* ' Ferguson v. Smith, 2 Johns. Ch. 139 ; Watson v. Church, 3 Hun, 80 ; s. c. 5 Leavitt v. Cruger, i Paige, 421. N. Y. Sup. (T. & C.) 243; Nagle v. Tag- '' Foote V. Lathrop, 53 Barb. 183 ; s. c. gart, 4 Abb. N. C. 144. affi'd 41 N. Y. 358 ; Eckerson v. Voll- ^ Mills v. Van Voorhies, 10 Abb. Pr. mer, 11 How. 42 ; Lathrop v. Heacock, 152, affi'd 20 N. Y. 412. 4 Lans. I ; White v. Coulter, i Hun, * Per Barren, J., in Janinski v. Hei- 357 ; s. c. 3 N. Y. Sup. (T. <& C.) 608 ; delberg, 21 Hun, 439. 508 MOETaAGES OF EEAL PROPERTY. [§§782-784. § 782. Service of summons on infants. — Where the defendant is an infant under fourteen years of age, the Code requires that per- sonal service must be made by delivering a copy of the summons within this State to the infant, and also to his father, mother, or guardian, or, if there is none within the State, to a person having the care or control of him, or with whom he resides, or ia whose service he is employed.' Service on the infant alone, or on the father, mother, guardian, or other person mentioned alone, does not consti- tute a personal service within the statute. Service upon both must concur to answer this requirement. The infant must appear by guardian,'' but a guardian can only be regularly appointed for an infant defendant after service of the sum- mons personally or by the substituted mode (in certain specified cases) as prescribed. So, where the mother of an infant defendant under fourteen years of age, made application to be appointed his guardian ad litem, and after said order had been granted, appeared for him, it was held that, there having been no personal service of the summons upon him, he was not bound by the judgment." The recitals of a judgment as to service of process and appearance are, however, ^rima facie evidence of jurisdiction even against infants.* Where an infant defendant is served with process, but no guardian ad litem, is appointed, the judgment, though voidable, is not abso- lutely void.' In such a case, where judgment is obtained by fraud and collusion, an action may be maintained by the infant to set it aside as to him." § 783. Appearance of defendants. — A voluntary appearance by the defendant is equivalent to personal service of the summons upon him.' The appearance is commonly by attorney, though an appear- ance in person is always proper. § 784. Appearance by attorney without authority. — ^Where a ' Code of Civ. Pro. § 426. Albertson, 3 Dev. (N. C.) 241 ; Croghan '^ Id. § 471. V. Livingston, 17 N. Y. 218. ' IngersoU v. Mangam, 84 N. Y. 622, ' McMurray v. McMurray, 66 N. Y. affi'g s. c. 24 Hun, 202. 175 ; Wright v. Miller, 8 N. Y. 9. *Bosworthv.Vandewalker,53N.Y.597. 'Code of Civ. Pro. § 424. See U. S. 'Bloom V. Burdick, i Hill, 130, 143 ; statute passed in Feb., 1878, authorizing Barber v. Graves, 18 Vl. 290 ; Austin jr. appearance for the United States in fore- Trustees, etc., 8 Met. ig6 ; White v. closure suits. §§ 785-786.] PRACTICE IK ACTIONS TO TOKECLOSE. 509 solvent attorney appears for a defendant, thougli without authority, the defendant will be bound after judgment.' There are dicta to the effect that such an appearance will become binding as soon as the opposite party has acted upon it," but it cannot be regarded as settled by authority that any appearance before judgment, or by an attorney who is not of sufiScient pecuniary ability to answer for his acts, will be conclusive upon the party. It has even been held that a ■forged notice of appearance, executed without authority from the client or from the attorney whose name is used, is sufficiently valid to give force to the judgment, and that such a judgment cannot be attacked collaterally,' but this decision has been reversed. No man is bound by a forgery.* § 785. A party to the action may serve a notice of appearance at any stage of the action, either before or after judgment, and he will then be entitled to notice of all subsequent proceedings.' The fact that the plaintiff or any other party to the action died subsequent to the entry of the judgment, will not make it necessary to revive the action as against the legal representatives of such de- ceased party ;° but if the plaintiff or any one of the defendants dies before judgment is entered, the action must be revived as against them or the judgment will be void.' The consent of an attorney for a judgment creditor of the mort- gagor given after the entry of judgment, to be bound by the proceed- ings in the action, is not valid in the absence of proof of express authority." § 786. Joinder of actions to foreclose two or more mortgages. — The Code of Civil Procedure permits the plaintiff to unite in the same complaint several causes of action, whether they be such as have heretofore been denominated legal or equitable, or both, where they all arise out of the same transaction, or transactions connected with the same subjects of action ; or contract, express or implied, or where they fall within the other provisions of the statute. Actions of fore- closure are specially excepted from the rule which requires that the ' Denton v. Noyes, 6 Johns. 2g6 ; s. c. 51 How. 353 ; s. c. afE'd 68 N. Y. Brown v. Nichols, 42 N. Y. 26. 656 ; Knapp v. Burnham, 11 Paige, 330. ' American Ins. Co. v. Oakley, g Paige, * Hays v. Thomae, 56 N. V. 521 ; Har- 496. rison v. Simons, 3 Edw. Ch. 394 ; Lynde 'Ferguson v. Crawford, 7 Hun, 25. v. O'Donnell, 21 How. 34. * Id, 70 N. Y. 253. ' Gerry v. Post, 13 How. 118. ' Martine v. Lowenstein, 6 Hun, 225 ; 'Lyon v. Lyon, 67 N. Y. 250. 610 MORTGAGES OF REAL PBOPEETT. [§§ 787-^788. causes of action must affect all the parties to the action, and not re- quire different places of trial' It would seem to be clear that two or more mortgages given at the same time as parts of the same agreement, though upon different par- cels of land would "arise out of the same transaction "; it would also seem that two or more mortgages upon the same parcel of land, though giveu at different times and upon different contracts, would " arise out of transactions connected with the same subject of action," and that in either case the foreclosure of all of the mortgages might properly be accomplished in one action. A bond and mortgage also arises " out of contract," and on this ground it would follow that a plaintiff might include an indefinite number o^mortgages in one ac- tion. The language of the statute is broad*nough to cover the joinder of an action of foreclosure, against A. and his property with a like action against B; and his property, ^ince it is not necessary, that all the causes of action shall affect all of the parties to the action ; but such a proceeding would be quite unusual, and would not meet with approval from the courts. § 787. Where there are two mortgages upon the same prem- ises, given by the same mortgagor to 'the same mortgagee, only one action to foreclose both is proper. In such a case, before the Code, the court exercised its discretion with regard to costs, against a com- plainant who brought two suits.'' The assignee of two mortgages of the same land, made by the same mortgagor to different mortgagees, may unite them in an action of foreclosure.'' Two mortgages given by different persons to secure the same debt may be foreclosed in the same action.' Only one foreclosure is permissible of a single mortgage to secure different debts due to two or more creditors.^ And if more than one action is commenced they will be consolidated.' § 788. Consolidation of actions to foreclose. — The provisions of the Revised Statutes respecting the consolidation of actions remain unaffected by any of the provisions of the Code of Civil Procedure.' ' Code of Civ. Pro. § 758. ' Chamberlain v. Beet, 68 Ga. 346. ' Roosevelt v. EUithorp, 10 Paige, 415. « Benton v. Barnet, 5g N. H. 249. »Piercev.Balkani,56Mass.(2Cush.)374. ' 2 R. S. 383, §§36,37,38; Code of ■•McGowan v. Branch Bank at Mobile, Civ. Pro. § 817. 7 Ala. 823. § 789.] PEACTICE IN ACTIONS TO FOEECLOSE. 511 Those provisions apply exclusively to the consolidation of actions at, law, and have never been construed as applicable to cases in equity.' In Grcmt v. Spencer (not reported except by memorandum in Voorhies' Code, p. 336, § e), it was said that actions of foreclosure will not be consohdated under any circumstances, and a motion to consolidate two foreclosure suits was denied by Daties, J., with costs in both suits. This rule has also been declared in Beach v. Buggies (6 Abb. ]Sr. C. 69), and in Kvpp v. Delamater (58 How. 183). In two actions brought to foreclose two mortgages on separate ad- joining parcels of land, both of which were executed on the same day by the defendants to the plaintiff, and the parties were the same, and the defenses identical, it was held that the actions could not be con- solidated.' § 789. Foreclosure by prior mortgagee no bar to foreclosure by junior mortgagee. — Where premises are incumbered with two mortgages, and a foreclosure is brought upon the first to which the holder of the junior incumbrance is a party, it will ordinarily be un- necessary for him to do more than to appear and wait until a surplus is created by the sale of the property in the action already pending. But in some cases this will not be sufficient. In Rankin v. Re- formed Protestant Dutch Church (1 Edw. Ch. 20), a first mortgage was foreclosed for default in payment of interest. The mortgagor paid the arrears of interest and costs, and a sale was stayed under 2 K. S. 192, 193. A defendant who was the OAvner of a second mor^ gage, petitioned for a sale, showing that his mortgage was due, and asking for a reference to take an account of the moneys due him. It was held by McCotjn, Y. C, that it was not safe to proceed on said petition ; that the defendant might file a supplemental bill setting forth the original bill and decree, and praying for permission to move the latter and be paid, after the first mortgage is satisfied, his amount and costs, and that he might thus connect his proceedings with the original bill without danger from an objection that another suit was ■nending in relation to the same matter. In Bache v. Purcell (51 How. 270, affi'd 6 Hun, 518), a judgment of foreclosure' and sale was entered in an action upon a first mortgage, and the mortgagor stayed proceedings by taking an appeal and giving security. The owner of the second mortgage then commenced an action to foreclose, and was ' See 2 Wait's Pr. 555. « Selkirk v. Wood, 9 N. Y. Civ. Pro. Rep. 141. 512 MOETGAGES OF REAL PEOPEETT. [§ 790. met by an answer setting up the previous judgment as a bar, he hav- ing been a party to that action. It was held that while the equity of redemption remained in the mortgagor or the owner of the fee, there was no reason for holding that a decree upon a first mortgage ipso facto operated as a bar to present proceedings to enforce junior mort- gages or judgments.' A junior mortgagee may commence an action to foreclose his lien notwithstanding the pendency of an action to foreclose a prior mort- gage upon the same property." § 790. Complaint. — The complaint in an action to foreclose a mortgage is governed by the general rules applicable to actions under the Code. It should contain a plain and concise statement of the facts constituting the cause of action, without unnecessary repe- tition." -> It is not necessary to allege in the complaint, the indebtedness for which the bond and mortgage were given, and, if alleged, it will not have to be proved. It is only necessary to show the execution of the bond and mortgage.* _ The bond and mortgage should be correctly described, though a mere technical variance wiU be disregarded.' If a mortgage be payable on demand, it is due at once, and no de- mand need be made or alleged." When no time of payment is specified the mortgage may be fore- closed at any time.' It is not necessary to allege title in the mortgagor, for he is estopped as to title, and the only purpose of the action is foreclosure.' In foreclosing a mortgage executed by an executor, as such, the defendants being the executor and his grantees, there is no necessity for alleging that he had authority to make the mortgage." The complaint should set out all assignments. A mere allegation that " the plaintiff, by several mesne assignments, is the owner and holder of the bond and mortgage," is an averment of a conclusion of law and is not sufficient." ' See Wendell v. Wendell, 3 Paige, 509, ' Wright v. Shumway, i Biss. 23. where only one action was held proper. ' Shed v. Garfield, 5 Vt, 39. '' Daily v. Kingon, 41 How. 22. " Skelton v. Scott, 18 Hun, 375. » Code of Civ. Pro. §§ 481, 817. '» Rose v. Meyer, i How. N. S. 274 ; 7 ' Day V. Perkins, 2 Sandf. Ch. 359. N. Y. Civ. Pro. Rep. 219 ; Thomas v. ' Hadley v. Chapin, 11 Paige, 245. Desmond, 12 How. 321. ' Gillett V. Balcom, 6 Barb. 370. §§ 791-792.] PEACTIOE IN ACTIONS TO FORECLOSE. 513 It is proper to allege that the mortgage was recorded and to specify the time and place of record, though this is not absolutely necessary.' It is not necessary against the mortgagor, for he is concluded without the record -^ nor against a purchaser from the mortgagor, for if he purchased without notice, that is a matter of defense.' It is not nec- essary to allege that an assignment was recorded, for recording is not essential to its validity.' The foreclosure of a mortgage is a single cause of action, however many notes or instalments it secures.' § 791. Allegation as to proceedings at law.— The Code requires that " the complaint in an action to foreclose a mortgage upon real property, must state whether any other action has been brought to recover any part of the mortgage debt, and, if so, whether any part thereof has been collected." ° " Where a final judgment for the plaintiff has been rendered in an action to recover any part of the mortgage debt, an action shall not be commenced or maintained to foreclose the mortgage, unless an ex- ecution against the property of the defendant has been issued upon the judgment to the sheriff of the county where he resides, if he re- sides within the State, or, if he resides without the State, to the sheriff of the county where the judgment roll is filed ; and has been returned wholly or partly unsatisfied." ' § 792. Allegations as to defendants. — It is necessary that the plaintiff should show that all of the defendants have some interest in the equity of redemption which makes them proper parties to the action, but this may be sufficiently done by a general allegation that the defendants who may be designated have, or claim to have, some interest in or lien upon the mortgaged premises, which, if any, is subsequent to the plaintiff's mortgage." It will not be material that the interests of the defendants are in separate portions of the prop- erty or that some relief is asked for, that does not affect them all." ' Scarry v. Eldridge, 63 Ind. 44. ° Drury v. Clark, 16 How. 424 ; Frost ' Faulkner v. Overturf, 49 Ind. 265 ; v. Koon, 30 N. Y. 428, 448 ; Aldrich v. Perdue v. Aldridge, ig Ind. 290. Lapham, 6 How. 129 ; s. c. i Code R. ^ Gallatian v. Cunningham, 8 Cow. 361, N. S. 408 ; Clay v. Hildebrand, 34 Kans. 374 ; contra, Hiatt v. Renk, 64 Ind. 590. 694. ; Woodworth v. Zimmernian, 92 Ala. * Fryer v. Rockefeller, 63 N. Y. 268. 349 ; Ulrich v. Drischell, 88 Ind. 354. ' Harmon v. Hilliard, loi Ind. 310. ° Bank v. Bacharach, 46 Conn. 513 ; « Code of Civ. Pro. § 1628 ; Lovett v. Mix v. Hotchkiss, 14 Conn. 32 ; Wells German Reformed Church, 12 Barb. 67. v. Hydraulic Co., 30 Conn. 316 ; Waters ' Code of Civ. Pro. § 1630. v. Hubbard, 44 Conn. 340. 33 514 MOETGAGES OF EEAL PEOPEKTY. [§§ 793-796. § 793. The prayer for judgment should be for all the relief the plaintiff considers himself entitled to, and a personal judgment can- not be granted against a defendant who does not appear, unless it be asked for in the complaint.' § 794. Supplemental complaint. — If an action be commenced for the foreclosure of a mortgage, on the ground of non-payment of an instalment of principal or interest, and subsequent to the com- mencement of the action, the whole amount becomes due, the plaintiff may, by supplemental complaint, proceed in the action for the full sum.'' This will not be the case if nothing was due at the time of the commencement of the action, since a cause of action cannot be created by a supplemental complaint.' But if the original complaint shows facts entitling the plaintiff to some relief, he may show, by supplemental complaint, that facts have since transpired which entitle him to further relief." § 795. Verification of complaint. — An action to enforce a bond and mortgage by foreclosure and sale under the statute, is not an action upon a written instrument for the payment of money only, but upon an instrument for the payment of money and providing for a sale of the defendant's property in case of default. For this reason, a complaint in such an action cannot properly be verified by the attorney, simply because the bond is in his possession.' In a case where a verification was thus made, an unverified answer was held to be proper.' § 796. Notice of no personal claim. — " Wliere a personal claim is not made against a -defendant, a notice subscribed by the plaintiff's attorney, setting forth the general object of the action, a brief descrip- tion of the property affected by it, if it affects specific real or personal property, and that a personal claim is not made against him, may be iBerved with the summons. If the defendant so served unreasonably -defends the action, costs may be awarded against him." ' It is not necessary to serve this notice, even if the complaint be not rserved, except for the purpose of saving costs." ' Simonson v. Blake, 20 How. 484; s. ^Candler v. Peitit, x Paige, 168; Has- «a 12 Abb. 331 ; BuUwinker v. Ryker, brouck v. Shuster, 4 Barb. 285 ; Bost- 12 Abb.311; French V. New, 20 Barb.484. wick v. Menck, 8 Abb. N. S. 169. 2 Malcolm v. Allen, 49 N. Y. 448. ° Code of Civ. Pro. § 525. ^ McCollough V. Colby, 4 Bosw. 603 ; « Peyser v. McCormack, 7 Hun, 300. dandier v. Pettit, i Paige, 16B ; Stil- ' Code of Civ. Pro. § 423. ^ell V. Van Epps, i Paige, 615. ' Gallagher v. Egan, 2 Sandf. 742. § 797.] PRACTICE IN ACTION'S TO FORECLOSE. 515 This provision of the Code does not deprive the court of the power in equity cases to award costs for unreasonably defending, against de- fendants upon whom a copy of the complaint, but no such notice, has been served, and, since the complaint furnishes the necessary informa- tion to the defendant more fully than the notice, which is nothing more than an abstract of it, it is not necessary to serve the notice in case a copy of the complaint is served with the summons.' § 797. Death of parties pending action to foreclose.— Where the plaintiff, or any of the defendants in the action, die before the rendition of judgment, it should be revived and continued in the name of their representatives ;" but if any of the parties die after judgment, no revivor is necessary in order that a sale may be made.' It has been held that where a non-resident mortgagor has been duly served by publication-, his death before decree will not prevent a purchaser from acquiring a valid title.* In an action to foreclose a mortgage, a notice of Us jiendens was filed ; the mortgagee conveyed the mortgaged premises and died ; the action was then revived by making the mortgagor's administrator, who was also his grantee, a party. It was held that the grantee was bound, under .section 1671 of the Code, by all of the proceedings after the filing of the Us pendens and a purchaser was compelled to take title." Section 763 of the Code of Civil Procedure provides -that " if either party to an action dies after an accepted offer to allow judg- ment to be taken, or after a verdict, report, or decision, or an inter- locutory judgment, but before final judgment is entered, the court must enter final judgment in the names of the original parties, unless the offer, verdict, report, or decision, or the interlocutory judgment is set aside." The report of a referee appointed to compute, to take proof, etc., is not the report meant by this section, but that provision of the statute contemplates a decision by a referee which determines the rights of the parties to a controversy as they would be deter- mined by a verdict, decision of a judge, or interlocutory judgment." So, where the plaintiff died after the report of a referee appointed ' O'Hara V. Bi-ophy, 24 How. 379. C.) 206; Voorhees v. Bank, etc., 10 " Gerry v. Post, 13 How. 118 ; Code Peters (U. S.) 449. of Civ. Pro. § 758. s Weyh v. Boylan, 62 How. 397 ; s. c. * Lynde v. O'Donnell, 21 How. 34 ; s. afiB'd 63 How. 72. C. 12 Abb. 2S6. 6 Grant v. Griswold, 21 Hun, 509. * Fraser v. Prather, i MacArthur (D. 516 MOETGAGES OF EEAL PEOPEitTY. [§§ 798-799. " to compute the amount due to the plaintiff for principal and in- terest upon the bond and mortgage set forth in plaintiff's complaint, and also to take proof of the facts and circumstance stated in the complaint, and to examine plaintiff or his agent on oath as to any payments which have been made," and thereafter final judgment was entered upon the motion of plaintiff's attorney of record, it was held that the practice was irregular, and that the action should have been revived before entering the judgment.' There is no power in the court to amend a judgment of foreclosure nuTio pro tunc as of a date prior to the death of a defendant guaran- tor of the mortgage debt so as to charge that defendant with defi- ciency, even though he was in default for failure to answer." The liberal provisions of our Code relating to amendments permit almost any amendment in furtherance of justice, but they do not permit new judgments against the dead except in the cases where the merits of the controversy have been substantially determined during the lifetime of the parties affected. ^ And such relief, if desired, is subject to the discretion of the court, and must be promptly asked for." § 798. Change of parties pending action. — Where a reference is ordered to ascertain the amount due on a judgment of foreclosure, there is no necessity for a change of parties in consequence of an as- signment of the decree, whether made before or after the order of reference, as this is a collateral inquiry and not a trial of an issue formed by the pleadings.* Where one plaintiff is substituted for another, particularly where the person who is thus substituted was originally a defendant, and had no identity with the action as it was instituted, the order for such substitution should not be made except upon notice to all of the de- fendants, including those who did not appear." § 799. Survey of the property. — " If the court in which an ac- tion relating to real property is pending is satisfied that a survey of any of the property, in the possession of either party, or of a bound- ary line between the parties, or between the property of either of them and of another person, is necessary or expedient to enable either ' Smith V. Joyce, 25 W. Dig. 106; Grant c. 82 N. Y. 569 ; Code of Civ. Pro. § 765; V. Griswold, 21 Hun, 509 ; Harrison v. Livingston v. Rendell, 59 Barb. 493. Simons, 3 Edw. CIi. 394 ; Hays v. * GranJ v. Griswold, 82 N. Y. 569. Thomae, 56 N. Y. 521. * Laing v. Titus, 18 Abb. 388. " Grant v. Griswold, 21 Hun, 509 ; s. ' McLean v. Tompkins, 18 Abb. 24. § 800.] PEA.CTICE IN ACTIONS TO FORECLOSE. 517 party to prepare a pleading, or prepare for trial, or for any other proceeding in the action, it may, upon the application of either party, upon notice to the party in possession, make an order granting to the applicant leave to enter upon that party's property to make such a survey." ' " An order made as prescribed in the last section must specify, by a description as definite as may be, the property or boundary line to be surveyed, and the real property of the adverse party upon which it is necessary to enter for that purpose. A copy thereof must be served on the owner or occupant of that property before entry thereon." ^ " After serving a copy of the order as prescribed in the last section, the party obtaining it, his necessary surveyors, servants, and agents, may enter, for the purpose of making the survey, upon the real prop- erty described in the order, and may there make the survey ; but each person so entering is responsible for any unnecessary injury done by him ; and the party procuring the order is responsible for such an in- jury done by any person so entering." ° § 800. Practice on failure to answer. — Rule 60 provides that if, in an action to foreclose a mortgage, the defendant fails to answer within the time allowed for that purpose, or the right of the plaintiff as stated in the complaint is admitted by the answer, the plaintiff may have an order referring it to some suitable person as referee, to compute the amount due to the plaintiff, and to such of the de- fendants as are prior incumbrancers of the mortgaged premises, and to examine and report whether the mortgaged premises can be sold in parcels, if the whole amount secured by the mortgage has not be- come due. If the defendant is an infant, and has put in a general answer by his guardian, or if any of the defendants are absentees, the order of reference shall also direct the person to whom it is referred to take proof of the facts and circumstances stated in the complaint, and to examine the plaintiff or his agent on oath, as to any payments which have been made, and to compute the amount due on the mort- gage preparatory to the application for judgment of foreclosure and sale." When no answer is put in by the defendant, within the time allowed for that purpose, or any answer denying any material facts of the complaint, the plaintiff, after the cause is in readiness for trial ' Code of Civ. Pro. § 1682. ' Code of Civ. Pro. § 1684. « Id. § 1683. ■» Boyle v. Williams, 72 Ala. 351. 518 MOETGAaES OP EEAL PROPEETT. [§§ 801-803. as to all tte defendants, may apply for judgment at any special term, upon due notice to such of the defendants as have appeared in the action, and without putting the cause on the calendar. The plaintiff, in such ease, when he moves for judgment, must show, by affidavit or otherwise, whether any of the defendants who have not appeared are absentees ; and, if so, he must produce the report as to the proof of the facts and circumstances stated in the complaint, and of the examination of the plaintiff or his agent on oath, as to any payments which have been made. And in all foreclosure cases, the plaintiff, when he moves for judgment, must show by affidavit or by the certificate of the clerk of the county in which the mortgaged prem- ises are situated, that a notice of the pendency of the action, contain- ing the names of the parties thereto, the object of the action, and a description of the property in that county affected thereby, the date of the mortgage, and the parties thereto, and the time and place of recording the same, has been filed at least twenty days before such application for judgment, and at or after the time of fiHng the com- plaint, as required by law.' § 801. Affidavit on applying for judgment. — On applying for judgment of foreclosure and sale in case of a default, the following facts should appear on the papers presented to the court : 1. That the defendants have properly been served with the sum- mons, or that they have appeared ; that the time to answer has ex- pired, and that no answer or demurrer has been received. 2. Whether the whole amount of the mortgage is or is not due.' 3. Whether any of the defendants are infants or absentees.' 4. That a proper notice of lis pendens had been filed at least twenty days before the application. ^ The " affidavit of regularity " which was required to be made by the solicitor for the complainant, under the practice in chancery be- fore the Code, is no longer necessary.' § 803. Notice of application for judgment.— If a defendant gives notice of appearance in the action before the expiration of the time for answering, he is entitled to eight days' notice of the time and place of the application to the court for the relief demanded in ' Rule 6o. c. 342, as am'd by Laws of 1844, c. 400. "Anonymous, 3 How. 158. For the requisites of the "affidavit of ' Id. regularity," see Nott v. Hill, 6 Paige, q. * 4 Edm. St. 667, § II ; Laws of 1840, §§ 803-806.] PKACTICE IN ACTIONS TO FORECLOSE. 519 the complaint.' Upon the hearing of this application, the court may either compute the amount due, or refer the computation to the clerk or some other suitable person." Five days' notice of the time and place of making the computation should be given.' § 803. Order of reference to compute. — If the whole amount of the mortgage has not become due, the order of reference must direct the referee '' to examine and report whether the mortgaged premises can be sold in parcels." If the defendant is an infant, and has put in a general answer by his guardian, or if any of the defendants are absentees, the order of reference must also direct the person to whom it is referred to take proof of the facts and circumstances stated in the complaint, and to examine" the plaintiff or his agent on oath as to any payments which have been made, and to compute the amount due on the mortgage preparatory to the application for judgment of foreclosure and sale." Where an answer interposed by an infant alleges payment of part of the amount due, the issue thus formed should be tried by the court or by a referee appointed for that purpose, and cannot be summai'ily disposed of under the ordinary reference under the rule." § 804. Report on order of sale. — When the mortgage covers several lots, owned severally by different defendants, the referee may be required to ascertain and report the order in which the sale should be made." § 805. When one defendant appears and makes default and another defendant answers, it is not proper to make any order of reference as against the defaulting defendant, except for the purpose of computing the amount due, and a judgment cannot be rendered against him except upon application to the court. In such a case, if the issues raised are referred, application must be made to the court for judgment ; after the decision by the referee, a judgment cannot be entered merely upon his report.' § 806. When reference to compute is improper. — If the de- fendant answers and makes default at the trial, the court must take ' Code of Civ. Pro. § 1219. » Jackson v. Reon, 60 How. 103. '^ Kelly V. Searing, 4 Abb. 354. ' Bard v. Steele, 3 How. iio. 3 Code of Civ. Pro. § 1219. ' Cram v. Bradford, 4 Abb. 193 ; Hill * Rule 60 ; ante, § 800. v. McReynolds, 30 Barb. 488. 530 MOKTGAGES OF EEAL PEOPEETT. [§ 807. an inquest, or the whole issue must be referred and a reference to compute is not proper.' The reference previous to the hearing to compute the amount due to the mortgagee^ and to prior incumbrancers, is only authorized to be made where the rights of the plaintiff, as stated in the complaint, are admitted by the answer. Where the defendants, therefore, by their answer, set up a claim of priority which is adverse to the claim of the plaintiff as made by his complaint, the referee is not authorized to settle the question of priority. If he makes any report whatever on the subject of such claim, therefore, he should merely ascertain the amount due, upon the supposition that the claim of priority as made by the answer is well founded, leaving it for the court, upon the hearing, to decide the question upon the legal or equitable rights of the defendants, upon the facts stated in their answers." § 807. Notice to attend preliminary reference. — A defendant who has appeared in the cause is entitled to notice of every proceed- ing therein which may affect his rights injuriously, except in those cases where, by the rules and practice of the court, he is bound to watch the proceedings, so as to protect his rights without such notice. The defendants are entitled to a summons to attend a reference pre- liminary to a judgment of foreclosure, so that they may see that the interest is correctly computed. If they attend upon the reference and make objections to the draft of the referee's report, so as to au- thorize them to except to the same, it would be necessary for the plaintiff to file the report, and have it duly confirmed, before he could apply to the court for an order of sale founded upon such report. If the defendants have no opportunity to be present at the reference, they can urge this irregularity in opposition to the plaintiff's applica- tion for an order of sale.' The notice of application for the relief demanded in the complaint is suflScient notice to apprise an adult defendant, who has not denied any of the allegations in the plaintiff's complaint, that the computa- tion will be made on the hearing of the motion, and the court may proceed at once to compute the amount, or may refer the computation to any suitable person." In such a case, no new notice or summons need be given to the defendant to enable him ' Exchange Fire Ins. Co. v. Early, 4 Abb. N. C. 78. ^ Per Chancellor Walworth, in Harris v. Fly, 7 Paige, 421. Knapp V. Burnham, ii Paige, 330. * Rule 60. §§ 808-809. J PEACTICE IN ACTIONS TO FORECLOSE. 521 to attend such reference, though it is the common practice to give such a notice, and it is not improper to do so.' But where the refer- ence is to do something more than merely to compute the amount due, or where an application is made to sell for payment of a second instalment coming due after the entry of the judgment, a summons should always be served upon all defendants who have appeared to attend at the reference, since a defendant must always be able to attend at every stage of the cause, if he should see fit to do so, in order to declare and protect his rights." By section 1219 of the Code of Civil Procedure, a defendant against whom judgment of foreclosure is taken, is entitled to at least five days' notice of the time and place of the assessment by the clerk, and to at least eight days' notice of the time and place of an applica- tion to the court for judgment. If a defendant shall, pursuant to the same section, serve before the application for judgment a written de- mand of notice of execution of any reference or writ of inquiry which may be granted upon the application, he will be entitled to at least five days' notice of the time and place of the execution of the refer- ence. This provision is new and has not yet received judicial con- struction. It is believed that the notice of application for judgment may properly contain a notice that the reference will forthwith be executed upon the granting of the order ; but, when this cannot con- veniently be done, a new five days' notice of the time and place of the executing of the reference should be given. § 808. Application for judgment. — If no objection be made to the proceedings before the referee, or to his report, upon the coming in of his report, and without further notice, the plaintiff may have judgment. The reference is not a proceeding which renders a new notice to the defendants necessary, nor need such reference be exe- cuted in the county in which the action is triable.' § 809. What may be included in amount due on mortgage. — The amount due on the bond and mortgage for principal and in- terest may be collected, though it exceed the penalty of the bond.* If taxes shall have been paid by the mortgagee to protect his lien, the amount of them may be added to the amount due on the bond ;' so ' Kelly V. Searing, 4 Abb. 354. * Mower v. Kip, 6 Paige, 88 ; Long v. ' Knapp V. Burnham, 11 Paige, Long, 16 N. J. Eq. 59. 330. ' Silver Lake Bank v. North, 4 Johns. ' Kelly V. Searing, 4 Abb. 354. Ch. 370 ; Burr v. Veeder, 3 Wend. 412 ; Rapelye v. Prince, 4 Hill, iig. 522 MOETGAGES OF EEAL PEOPEETY. [§§ 810-811. also if rent be paid by the mortgagee, the mortgage being upon a leasehold, the rent may be added,' but insurance premiums cannot be collected unless by express agreement of the mortgagor or owner of the estate.' It might admit of a doubt as to whether either taxes or insurance premiums could be included in the amount due, if there were no proper allegations in the complaint to show that the plaintiff was entitled to include them." § 810. Oath of referee.— Section 1016 of the Code of Civil Pro- cedure requires that a referee appointed as prescribed in either of the foregoing sections of the title must, before proceeding to hear the testimony, be sworn faithfully and fairly to try the issues, or to determine the questions referred to him as the case requires, and to make a just and true report according to the best of his understand- ing. This oath may be waived. It is an open question as to whether a reference to compute the amount due is within this provision. It has been adjudged to be an irregularity to omit the oath, which would be a sufficient excuse to a purchaser desiring to be relieved;" and, on the other hand, the taking of the oath has been held to be unneces- sary.'' It is the better practice for the referee to be sworn. § 811. Duties of referee on reference under the rule. — If the reference be merely to compute the amount due, the testimony of the witnesses need not be signed by them or filed with the report ;° but in such cases, it is proper that the referee should annex to his report an abstract of the documentary evidence produced before him.' If, some of the defendants being infants or absentees, the order of reference requires the referee, in addition to computing the amount due, to take proof of the facts and circumstances stated in the com- plaint, and to examine the plaintiff or his agent on oath as to any payments which have been made,' the testimony of the witnesses must be signed by them, and the report of the referee must be filed with the testimony." If the plaintiff is a corporation, it is proper to ' Robinson v. Ryan, 25 N. Y. 320. ^ McGowan v. Newman, 4 Abb. N. C. ' Faure v. Winans, i Hopk. 283. 80. ' Holding that they cannot be recover- * Rule 30. ed without allegations in the complaint, ' Security Fire Ins. Co. v. Martin, 15 Hibernia Sav. & L. Soc. v. Conlin, 7 Abb. 479. Pacific R. (Cal.) 477. Contra, De Leuw "Rule 60. V. N«ely, 71 111. 473. ° Rule 30 ; Wolcott v. Weaver, 3 How. * Exchange Fire Ins. Co. t. Early, 4 isg ; Anonymous, Clarke, 423 ; 2 R. S. Abb. N. C. 78. 186, §§ T26, 127, 129. §§ 812-813.] PRACTICE IN ACTIONS TO FOEECLOSE. 523 examine the officers of the corporation as to the payments which ought to be credited on the mortgage.' § 812. The referee must swear and examine the witnesses himself, and the evidence offered before him must be legal evidence of the matters referred to him ; he cannot take the testimony of witnesses by their affidavits taken before some other officer qualified merely to administer oaths." The referee has no discretion given to him, and is limited to the matters referred to him ; if he is author- ized to examine the plaintiff as to payments on the mortgage, he is limited to that, and, under an order of reference against an absent defendant, the absent defendant cannot be examined in behalf of his co-defendants as to a defense of fraud set up in their answer.' This would certainly be so, as against a defendant who had once been heard upon the merits, but it is believed that as against absent or in- fant defendants the rule might be different where the reference was to take proof of the facts and circumstances stated in the complaint." In the case of infants or absentees, the plaintiff must prove his debt before the referee in the same manner as if nothing had been admitted by the answer.' § 813. Production of bond on trial. — The want of possession of the bond by the mortgagee will, if unexplained, operate as evi- dence of payment, and, if payment be alleged as a defense, the mort- gagee must be defeated if he fails either to produce the bond on the trial, or account for its absence." But the presumption of payment may be rebutted, and the mortgagee may have judgment of fore- closure on a lost bond and mortgage, and cannot be compelled to fur- nish indemnity to the mortgagor in a case where there is strong ground for believing that the loss is genuine, and that there was no assignment.' A bond of indemnity is not required in an action on a lost instrument which is not negotiable.' But indemnity will be re- quired if the mortgage secures a negotiable note which has been lost." ' Ontario Bank V. Strong, 2 Paige, 301. 'Stoddard v. Gailor, 90 N. Y. 575; ^Security Fire Ins. Co. v. Martin, 15 Sharp v. Cutler, 25 N. J. Eq. 425. Abb. 479. » Moor v. Fall, 42 Me. 450 ; Torrey v. * McCrackan v. Valentine's Executors, Foss, 40 Id. 74 ; Hough v. Barton, 20 9 N. Y. (5 Seld.) 42. Vt. 455 ; Hopkins v. Adams, Id. 407 ; * 2 R. S. 186, § 127. Wright v. Wright, 54 N. Y. 437 ; Blade ' Mills V. Dennis, 3 Johns. Ch. 367. v. Noland, 12 Wend. 173; Frank v. Wes- ' Bergen v. Urbahn, 83 N. Y. 49 ; sels, 64 N. Y. 155, 159. Weems v. Coker, 70 Ga. 746. ' Yerks v. Blodgett, 48 Mich. 211. 524 MORTGAGES OP EEAL PEOPEETY. [§ 814. An action to foreclose a' mortgage which has not been dischargedj but which has been delivered to the mortgagor, together with the note which it was given to secure, may be maintained by proving that the note was never paid, and that the delivery was procured by the fraud of the mortgagor.' A mortgage may be valid though there be no bond, and in such a case the statute confines the remedy of the mortgagee to the lands men- tioned in the mortgage, unless there is an express covenant contained in the mortgage, or in some other instrument The failure to pro- duce a bond can be accounted for by proof that no bond was, in point of fact, ever executed, even though a bond is recited in the mortgage.' § 814. Mortgage debt payable in instalments.^ — "Where the mortgage debt is payable in instalments the practice is controlled by sections 1634 to 1637 of the Code of Civil Procedure, which are a substantial re-enactment of the provisions of the Revised Statutes." These sections are as follows : " Where an action is brought to foreclose a mortgage upon real property, upon which a portion of the principal or interest is due, and another portion of either is to become due, the complaint must be dismissed without costs against the plaintiff, upon the defendant paying into court, at any time before a final judgment directing a sale is rendered, the sum due and the plaintifi's costs." ' " In a case specified in the last section, if, after a final judgment di- recting a sale is rendered, but before the sale is made the defendant pays into court the amount due for principal and interest, and the costs of the action, together with the expenses of the proceedings to sell, if any, all proceedings upon the judgment must be stayed ; but upon a subsequent default in the payment of principal or interest the court may make an order directing the enforcement of the judg- ment for the purpose of collecting the sum then due." ' " Where the mortgage debt is not all due, and the mortgaged prop- erty is so circumstanced that it can be sold in parcels without injury to the interests of the parties, the final judgment must direct that no more of the property be sold, in the fitrst place, than is suflBcient to ^ Grimes v. Kimball, 85 Mass. (3 Al- ' Goodhue v. Berrien, 2 Sand. Ch. 630; len) 518. Bergen v. Urbahn, 83 N. Y. 49. " I R. S. 738, § 139; Gaylord v. Knapp, * 2 R. S. 191, §§ 162 to 166. 15 Hun, 87. ' Code of Civ. Pro. § 1634. « Id. §1635. § 815.] PRACTICE IN ACTIONS TO rOEECLOSE. 525 satisfy the sum tten due, with the costs of the action and expenses of the sale ; and that, upon a subsequent default in the payment of principal or interest, the plaintiff may apply for an order, directing the sale of the residue, or of so much thereof as is necessary to satisfy the amount then due, with the costs of the application and the ex- penses of the sale. The plaintiff may apply for and obtain such an order as often as a default happens." ' " If, in a case specified in the last three sections, it appears that the mortgaged property is so circumstanced that a sale of the whole will be most beneficial to the parties, the final judgment must direct that the whole property be sold ; that the proceeds of the sale, after deducting the costs of the action and the expenses of the sale, be either applied to the satisfaction of the whole sum secured by the mortgage, with such a rebate of interest as justice requires ; or be first applied to the payment of the sum due, and the balance, or so much thereof as is necessary, be invested at interest for the benefit of the plaintiff, to be paid to him from time to time as any part of the principal or interest becomes due." ' § 815. If the whole amount secured by the mortgage has not become due, the referee will be directed to examine and report whether the mortgaged premises can be sold in parcels." In such case the referee will annex to his report all of the testimony taken before him, and the testimony of the witnesses must be signed by them.* If the referee decides that a sale of the whole premises is necessary, he should state the reasons why that will be the most ben- eficial to the parties. And if he decides that the property may be sold in parcels, he should state the relative situation and value of the several parcels, and which should be first sold, or such other facts in relation to the property as will enable the court to act understandingly in making such an order of sale as will be most beneficial to the par- ties.' A sale of the whole premises can only be most beneficial to the parties, when the largest amount of money is realized from the sale, so as to leave the largest surplus after paying the mortgage debt. The benefit intended by the statute is common to both parties.' ' Code of Civ. Pro. § 1636. * Rule 30. ' Id. § 1637. ' Ontario Bank v. Strong, 2 Paige, ' Rule 60 ; ante, § 800 ; Everitt v. Huff- 301. man, i Paige, 648. * Gregory v. Campbell, 16 How. 417. 526 MOETGAGES OF REAL PKOPEETT. [§§ 816-818. § 816. New application to enforce payment of second instal- ment. — If the mortgage be payable in instalments, and if, upon a reference had for that purpose, the referee reports that the premises should not be sold in parcels, it is not necessary to obtain another re- port upon that subject previous to the obtaining of another order of sale to pay. instalments which have become due subsequent to the judgment ; but, in such a case^ it is necessary to have another refer- ence to report the amount which had become due on the second in- stalment of the bond and miortgage ; for, upon such reference, the defendant would have the right to show that the instalment had been paid either wholly or in part." Upon any further instalment of principal or interest becoming pay- able, it will be necessary to have a new reference as to the amount due, but the question as to whether the mortgaged premises can or cannot be sold in parcels, will not again be inquired into." § 817. Covenants other than for payment of money. — The pro- visions of the statute by which future instalments not yet due can be adjiidieated upon, and the rights of the parties to the action in rela- tion to them determined by the judgment, only apply to the fore- closure of mortgages executed to secure the payment of money by instalments, and cannot be applied to mortgages conditioned for the perforra9,nce of covenants other than for the payment of money ; as, for example, to support the mortgagee. In such cases, breaches must be alleged, and if denied, established by evidence extrinsic to the bond and mortgage and lapse of time ; for, while in the one case a debt is acknowledged to exist by the execution'of the bond and mort- gage, .to be paid absolutely at a future day, in the other there is no present debt, and will not be at any future day if the obligor per- forms his^ovenant or the condition of his bond, and the presumption is that he will not suffer any breach of it." § 818. A mortgage may be foreclosed for default in payment of interest, or for an instalment of principal, although no such pro- vision is contained in if ' Knapp V. Burnham, ii Paige, 330; Ch. 616 ; Morrison v. Morrison, 4 Hun, Long V. Lyons, 54 How. 129. 410. ''Knapp V. Burnham, 11 Paige, *Scheibe v. Kennedy, 64 Wis. 564; 330. Butler V. Blackman, 45 Conn. 159; * Ferguson v. Fergusno, 2 N. Y. (2 Hatcher v. Chancey, 71 Ga. 689 ; Adams Comst.) 360, 364, modifying s. c. 3 Barb. v. Essex, i Bibb (Ky.) 149 ; 4 Am. Dec. § 819.] PEACTICE IN ACTIONS TO FOEECLOSK 527 "When a mortgage is given to secure money to fall due in several instalments, a judgment enforcing the lien of the mortgage for one instalment is not a bar to another action to enforce it for another, in- stalment subsequently falling due.' Judgment should be rendered for all instalments of the mortgage debt that may then be due, though they may have come due subse- quent to the commencement of the action.'' And where a foreclosure was commenced for non-payment of interest, the plaintiff was held entitled to elect the whole to be due under a default clause for non- payment of interest within thirty days after it became due, although the thirty days did not expire until after the service of summons.' On foreclosure for unpaid interest, the decree may include taxes paid by the mortgagee to preserve his security, and he need not wait until the principal debt is due.* But the mortgagee cannot collect such taxes until some default is made in the payment of principal or interest.' Where the complainant was the owner of two mortgages upon the same premises, and the whole of the second mortgage had become due, and the first mortgage was payable in instalments and had not all become due, it was held that the complainant was entitled to a decree to sell sufficient of the mortgaged premises to pay the whole of both mortgages, unless the defendant, previous to the sale, should pay the junior mortgage and the costs of foreclosure, together with the instalments which had become due on the senior mortgage." § 819. Opening default. — In actions to foreclose mortgages, the settled practice has been against setting aside a regular default, simply upon affidavits excusing it, accompanied with an affidavit of merits, although in ordinary cases at law the rule is different. The advan- tages of delay have been deemed sufficient to justify the adoption of more stringent practice than that in this class of cases. In Hunt V. WalUs (6 Paige, 371), it was held to be the settled practice of the 623 ; Giles v. Lewis, 4 Del. Ch. 51 ; dorf v. Meyer, 8 Daly, 278 ; Adams v. Hunt V. Harding, 11 Ind. 245; Smart v. Essex, i Bibb (Ky.) 149; 4 Am. Dec. McKay, 16 Ind. 45 ; Miller v. Remley, 623. 36 Ind. 539 ; Reddick v. Gressman, 49 '^ Malcolm v. Allen, 53 N. Y. 448. Mo. 389 ; Johnson v. Buckhaults, 77 Ala. * Kepley v. Jansen, 107 111. 79 ; Brick- 276 ; contra, Brodribb v. Tibbetts, 58 ell v. Batchelder, 02 Cal. 623. "Cal. 6. 'Williams v. Townsend, 31 N. Y. ' McDougal V. Downey, 45 Cal. 165. 411. s Smalley v. Martin, Clark, 293 ; Asen- * Hall v. Bamber, 10 Paige, 296. 528 MOETaAGES OF REAL PEOPEETY. [§ 820. Court of OhaBcery not to set aside a regular order to take a bill as confessed in a foreclosure suit or in any other case where the defend- ant has any interest or inducement to delay the proceedings upon a simple affidavit of merits, although an excuse is given for such de- fault. But in such cases the defendant must either produce the sworn answer which he proposes to put in, so that the court may see that he has merits, or must, in his petition or affidavit, state the na- ture of his defense, and his belief in the truth of the matters consti- tuting such defense, so far at least as to enable the court to see that injustice will probably be done, if the order to take the bill as con- fessed is permitted to stand.' And as this rule is not inconsistent with any provision made by the Code of Procedure, it is still contin- ued in force.'' § 820. Form and contents of the judgment of foreclosure and sale. — Kule 61 provides that, in every judgment for the sale of mortgaged premises, the description and particular boundaries of the property to be sold, so far at least as the same can be ascertained from the mortgage, shall be inserted. And, unless otherwise specially ordered by the court, the judgment shall direct that the mortgaged premises, or so much thereof as may be sufficient to discharge the mortgage debt, the expenses of the sale, and the costs of the action, as provided by sections 1626 and 1676 of the Code, and which may be sold separately without material injury to the parties interested, be sold by or under the direction of the sheriff of the county, or a referee, and that the plaintiff or any other party may become a pur- chaser on such sale ; that the sheriff or referee execute a deed to the purchaser ; that out of the proceeds of the sale, unless otherwise di- rected, he pay the expenses of the sale, as provided in section 16T6 aforesaid, and that he pay to the plaintiff or his attorney the amount of his debt, interest and costs, or 'so much as the purchase money will pay of the same, and that he take the receipt of the plaintiff or his attorney for the amount so paid, and file the same with his report of sale ; and that the purchaser at such sale be let into possession of the premises on production of the deed.' All sur- plus moneys arising from the sale of mortgaged premises under any ' Hunt V. Wallis, 6 Paige, 371 ; Win- nor, 3 Hun, 3 ; s. c. 5 N. Y. Sup. (T. & ship V. Jewett, i Barb. Ch. 173 ; Good- C.) 231 ; Rule 85. hue V. Churchman, Id. 596. ' Bird v. Belz, 33 Kans. 391. ' Per Daniels, J., in Powers v. Tre- §§ 821-822.] PRACTICE IN ACTION'S TO FORECLOSE, 529 judgment, shall be paid by the sheriff or referee making the sales, within five days after the same shall be received and be ascertainable, in the city of New York to the chamberlain of the said city, and in other counties to the treasurer thereof, unless otherwise specially directed, subject to the further order of the court ; and every judg- ment in foreclosure shall contain such directions, except where other provisions are specially made by the court, lio report of sale shall be filed or coniimied, xmless accompanied with a proper voucher for the surplus moneys, and showii)g that they have been paid over, deposited, or disposed of in pursuance of the' judgment. The referee to be appointed in foreclosure cases, to compute the amount due, or to sell mortgaged premises, shall be selected by the court, and the court shall not appoint as such referee a person nominated by a party to the action, or his counsel.' § 821. Who may be appointed referee.— No person holding the office of clerk, deputy clerk, special deputy clerk, or assistant in the clerk's office of a court of record or of the surrogate's court, within either of the counties of New York or Kings, can be appointed ref- eree except by the v.'ritten consent of all the parties to the action, other than parties in default for failure to appear or to plead." Except in eases where the parties consent, as provided in- section 1011 of the Code of Civil Procedure, no person, unless he is an attor- ney of the court in good standing, can be appointed sole referee in any pending action or proceeding. Nor can any person be appointed a referee who is the partner or clerk of the attorney or counsel of the party in whose behalf such application for such appointment is made, or who is in any way connected in business with such attorney or counsel, or who occupies the same office with such attorney or counsel.' § 822. Provision in judgment as to order of sale. — "Where a controversy exists between different defendants in relation to the order in which the several portions of the premises should be sold, instead of directing a reference preliminary to the judgment to settle the order in which the premises should be sold, a provision may be inserted in the judgment directing that, if it shall appear to the ref- eree that separate parcels of the mortgaged premises have been con ' Rule 6i. « Code of Civ. Pro. § go. « Rule 8o. 34 530 MOETGAGES OF EEAL PEOPEETY. [§§ 823-825. veyed or incumbered by the mortgagor, or by those claiming under him subsequent to the lien of the plaintiff's mortgage, the referee shall sell the mortgaged premises in parcels, in the inverse order of alienation, according to the equitable rights of the parties who are subsequent grantees or incumbrancers, as such rights shall be made to appear to the referee.' This quaMcation of discretion is necessary to meet special cases. It should always be inserted in the decree when such decree directs the sale of the premises in parcels in the inverse order of alienation." § 823. Prior incumbrancers. — Although a prior incumbrancer may be made a party to an action of foreclosure for the purpose of having the amount of such incumbrance determined and liquidated, and the amount paid out of the fund produced by a sale,' a prior mortgage cannot be foreclosed, without provision being made for its payment, upon an action by a junior incumbrancer ; and a Judgment which provides for such foreclosure will be opened upon motion.* Eut where the prior mortgagee has been negligent in asserting' his rights,, he will not be allowed to disturb the rights of a ionajide pur- chaser of the property, and will be compelled to resort to the fund produced by the sale, in whose hands soever the same may be." The judgment in an action to foreclose a junior mortgage may direct a sale subject to the prior incumbrance." § 824. If in an action to foreclose a deed, absolute upon its face, as a mortgage, the defendant denies that it was a mortgage, and' alleges it to be an absolute grant, the judgment should be either that 'the defendant be foreclosed by strict foreclosure, or that the answer of the defendant is true, according as the plaintiff may desire, without prejudice to the right of the plaintiff to proceed at law for the collection of back rents.' § 825. Property situated in different counties. — Where real property sold by virtue of a judgment in an action to foreclose a ' Knickerbacker v. Eggleston, 3 How. ton, 11 Id. 28 ; Hancock v. Hancock, 22 130. N. Y. 568. " N. Y. Life Ins. & Trust Co. v. Mil- ■* McReynolds v. Munns, 2 Keyes, 214. nor, I Barb. Ch. 353 ; Rathbone v. ' Hamlin v. McCahill, Clarke, 249, Clark, 9 Paige, 648. * Daily v. Kingon, 41 How. 22 ; West- ° Holcomb V. Holcomb, 2 Barb. 20; ern Ins. Co. v. Eagle Fire Ins. Co., i Chamberlain v. Lyell, 3 Mich. 448 ; The Paige, 284. Western Ins. Co. v. The Eagle Fire Ins. ' Hone v. Fisher, 2 Barb. Ch. 559. Co., I Paige, 284 ; Vanderkemp v. Shel- But see supra, § 1078. §§ 826-827.] PKACTiCE in actions to foreclose. 531 mortgage is situated in a county other than that in which the judg- ment is entered, the judgment must also be entered in the office of the clerk of the county wherein the property is situated, before the purchaser can be required to pay the purchase money or accept a deed. The clerk of the latter county must enter it in the judgment book kept by him, upon filing with him a copy thereof, certified by the clerk with whom it is entered.' § 826. Amending judgment. — The court has ample power to cor- rect the judgment by amendment whenever that may be necessary to promote the ends of justice. Thus, where a sale had been made by a correct description of the property, and an application was made to compel a purchaser to take title, and it was shown that there was a material clerical error in the description contained in the judgment, the court ordered a correction nunc jpro ttmc, and compelled the purchaser to perform.'' JUDGMENT FOE DEFICIENCY. § 827. The judgment should provide that if the proceeds of the sale be insufficient to pay the amount reported due to the plaintiff, with interest and costs, the referee specify the amount of such de- ficiency in his report of sale, and that the defendants personally liable- for the mortgage debt pay the same to the plaintiff.' The statute under which this relief can be obtained was enacted to give the- court in which the foreclosure was had, full jurisdiction over the whole subject, and to save the necessity of actions at law and to allow one court to dispose of the whole subject, instead of compelling the; parties to resort to different tribunals.* 1 Code of Civ. Pro. § 1677. Johns. Ch. 77. In New Jersey (Laws ^ Wood V. Martin, 66 Barb. 241 ; Ho- 1880, p. 255, cli. 170) no execution can gan V. Hoyt, 37 N. Y. 300 ; Bogert v. issue on judgment for deficiency, but an Bogert, 45 Barb. 121. action at law can be commenced thereon '2 R. S. 191, § 152 ; Code, § 1627 ; in six months. If such an action is McCarthy v. Graham, 8 Paige 480. Be- brought, the person against whom judg- fore the statute a personal judgment ment is sought may redeem within six could not be rendered against the mort- months after judgment is rendered gagor. The remedy was by action upon against him in it. Naar v. Union, etc., the bond. Dunkley v. Van Buren, 3 Land Co., 34 N. J. Eq. iii. Johns. Ch. 330; Globe Ins. Co. v. Lan- * Per Folger, J., in Scofield v. Dos- sing, 5 Cow. 380. And the creditor had cher, 72 N. Y. 4gi ; Equitable Life Ins. the right to institute proceedings upon Co. v. Stevens, 63 N. Y. 341 ; In re Col- the bond even during the pendency of lins, 17 Hun, 289 ; Thorne v. Newby, 59 the foreclosure suit. Jones v. Conde, 6 How. 120. 532 MOKTGAGES OF REAL PROPEKTZ. [§§ 828-829. § 828. Judgment for deficiency not allowed. — This relief can, however, only be granted where the defendant personally liable has been personally served with summons, or has appeared in the action. A personal judgment cannot be rendered against a non-resident who is not served and does not appear, and in such case the judgment is valid as a judgment in rem as against the specific property de- scribed in the complaint, but it is void as a judgment m personam,, as against the defendant who was not served.' If the complaint does not ask for a judgment for deficiency, it cannot be rendered as against a defendant who does not defend, but snffers judgment to be taken against him by default." In an action to foreclose, two joint guarantors were made parties, one defended and the other made default, and the plaintifE settled with the one who resisted, and gave him a release under the act of 1838. A judgment for deficiency was refused against the other, and the plaintiff was left to his remedy at law upon the bond." § 829. Adjusting liabilities for deficiency between defendants. — Where more than one person is liable personally for the payment of the mortgage debt, some being primarily and the others second- arily liable, the judgment should provide for a sale of the mortgaged premises, and for a personal judgment against the principal debtor ; and that in case an execution against him does not realize the money, an execution afterward go against the sureties in the order of their liability, for any balance due after sale of the premises, and execution unsatisfied against those severally liable aliead of them.'' Where the mortgagee has assigned the mortgage with guaranty of payment, but has received less than its face, he is only liable as surety, and that only to the amount of the consideration of the transfer, with interest." In such a case, after the usual judgment for the foreclosure and sale of the mortgaged premises, and the payment of the debt ' Schwinger v. Hickok, 53 N. Y. 280 ; lection of the debt. Leonard v. Morris, Code of Civ. Pro. § 1627. g Paige, go ; Harlem Savings Bank v. ■^ Simonson V. Blake, 12 Abb. 331; s. c. Mickelsburgh, 57 How. 106. In Mich- 20 How. 484 ; BuUwinker v. Ryker, I2 igan it has been held that a guarantor of Abb. 311 ; French v. New, 20 Barb. 484. collection is not a proper party to the « North American Fire Ins. Co. v. action to foreclose, and that no personal Handy, 2 Sandf. Ch. 4g2. judgment should be given against him. *Luce V. Hinds, Clarke, 453 ; Curtis Johnson v. Shepard, 35 Mich. 115. V. Tyler, g Paige, 432; Weed v. Calkins, ' Rapelye v. Anderson, 4 Hill, 472 ; .24 Hun, 582. This is clearly the rule Jones v. Stienbergh, i Barb. Ch. 250 ; when the surety has guaranteed the col- Goldsmith v. Brown, 35 Barb. 484. § 830. J PEACTICE IN ACTIONS TO FORECLOSE. 533 and costs out of the proceeds of such sale, and a judgment over against the mortgagor personally for a deficiency, if any, the judgment must further direct, that if the plaintiff is not able to collect the amount of such deficiency out of the estate of the mortgagor, upon the issuing of an execution against his property, to the sheriff of the county in which he resides, or of the county where he last resided in this State, the defendant who guaranteed the mortgage pay so much of such de- ficiency as the proceeds of the sale, and the amount, if any, which shall have been collected of the mortgagor personally, subsequent to the assignment of the plaintiff, exclusive of the costs and expenses of the foreclosure and sale, shall be less than the amount received by him for the assignment, with interest. The judgment should further direct that if the guarantor pays the amount thus adjudged against him personally, or if the same is 'collected out of his property, he shall have the benefit of the judgment against the mortgagor for the purpose of. enabling him to obtain remuneration to the same extent with interest, either by a new execution against the property of the mortgagor, or by filing a creditor's bill, as he may think proper.' § 830. Personal judgment without foreclosure. — If the debt be tendered before the action to foreclose is brought, this will destroy the lien of the mortgage, and will prevent a judgment for the sale of the property ; but the plaintiff will be entitled to a money judgment, for the tender does not satisfy or destroy the debt.' This was not so before the Code, for the Court of Chancery could not entertain juris- diction where the complainant had no right to come into that court to foreclose the mortgage as against some interest in the mortgaged premises, or in some part thereof." The judgment which the court is authorized to render, is a judg- ment for the balance of the debt remaining unsatisfied after a sale of the mortgaged premises.' The plaintiff in a foreclosure suit cannot, ' Jones V. Stienbergh, i Barb. Ch. 250. record, the said mortgage within thirty In Farnham v. Mallory (5 Abb. N. S. days from the date of said judgment, or, 380), which was an action upon a guar- in the event of his not doing so, then anty that a mortgage on the property of ftiat he pay to the plaintiffs the amount the plaintiff would be paid, the Court of of said judgment. Appeals held that the judgment should ^ McCoy v. O'Donnell, 2 N. Y. Sup. be, not that the defendant should pay (T. & C.) 671. absolutely to the plaintiffs, but that he ^ Mann v. Cooper, i Barb. Ch. 185. should cause to be paid, or satisfied of ■• Code of Civ. Pro. § 1627. 534 MOETGAGES OF REAL PEOPERTY. [§ 831. therefore, have a contingent personal judgment against some of the defendants before final judgment of foreclosure and sale.' ' Whatever may be the form of the debt, an absolute personal judg- ment cannot be rendered in a judgment of foreclosure. A personal judgment can only be directed to the extent of the deficiency remain- ing after a sale." Where the owner of a junior mortgage procured a judgment of foreclosure, and afterward failed to procure a sale for the reason that the holder of the prior mortgage took proceedings to foreclose, and a sale was had under the judgment on the prior mortgage for an £»mount not more than sufficient to pay such mortgage and the costs of foreclosing it, a motion for a judgment for deficiency for the amount of the junior lien with costs was denied, and such denial was afiirmed at General Term. It was held that the plaintiff should have ascer- tained the amount of the deficiency by a sale in his own action, and that, failing in that, his only remedy was at law upon the bond.' But where during the pendency of an action to foreclose, the mort- gaged premises were sold under the foreclosure of a prior mortgage, and a surplus remained, and the plaintiff in the junior foreclosure proceeded with his action and entered judgment providing for a sale and a personal judgment for deficiency, under which the surplus in the prior foreclosure was paid to him, he was permitted to have a personal judgment ascertained and docketed upon application to the court for that purpose." § 831. Personal representatives of deceased obligor. — No personal judgment can ba rendered against the personal representa- tives of a deceased perton liable for the mortgage debt unless assets are admitted ;" but the judgment may properly establish the debt pay- able out of the assets of the deceased," and application to the proper surrogate may be made to have a suflicient portion of the estate of the decedent reserved to meet an anticipated deficiency.' No decree can be had against an administrator if the proper notice to present claims has been published and no claim has been made ' Cobb V. Thornton, 8 How. 66. ' Rhodes v. Evans, Clarke, i6S; Leon- ^ Brown v. Willis, 7 Pacif. Rep. (Cal.) ard v. Morris, g Paige, qo. 682 ; Biddel v. Brizzolara, 64 Cal. 362 ; "Lockwood v. Fawcett, 17 Hun, 146 ; Loeb V. Willis, 22 Hun, 508. Glacius v. Fogel, 88 N. Y. 434. «Loeb V. Willis, 22 Hun, 508. 'Williams v. Eaton, 3 Redf. Surr. * Siewart v. Hamel, 33 Hun, 44. 503. § 832.] PRACTICE IN ACTIONS TO FOEECLOSE. 535 within the time prescribed by law, and the accounts of the adminis- trator have been settled and the estate has been distributed.' After the death of the mortgagor the deficiency must be paid by the personal estate, and so much of it as was caused by neglect to pay taxes is a preferred debt.^ § 832. Docketing judgment for deficiency and execution thereon. — It was held by Chancellor Walwoeth, in Bank of Rochester v. Emerson (10 Paige, pp. 115, 359), that an execution cannot issue upon a judgment for deficiency until the confirmation of the report of sale,' and that if it issues before, it is irregular, and the court will not allow it to be confirmed mono pro twno to the prej- udice of other creditors. In this case, however, by the terms of the judgment, an execution could not properly issue until the report of sale was filed and confirmed. In Hanover Fire Ins. Co. v. Tomlm,- son (3 Hun, 630), it was also said that the confirmation by the court of the report of the referee showing a deficiency was necessary before any execution could be issued thereon. It has been held, however, that the form of judgment under our present statutes does not con- template any intervention of the court after the rendition of the judg- ment, and that a judgment for deficiency may properly be docketed upon the report of the referee showing the amount of such deficiency and without confirmation of such report, even by notice under rule 30.' The object of docketing the deficiency is to give the plaintiff a lien upon any other property. If it can be said that it is regular to enter an order confirming the report of sale of the referee and de- claring the deficiency in accordance therewith, before entry of the facts as to the extent of the deficiency upon the docket, its omission would be but an irregularity. To avail of that the defendant would be requited, as in other cases of irregularity, to move with promptitude.' It is not necessary to apply to the court after the report of sale is made, for judgment against the mortgagor for deficiency. The exe- cution issues on the judgment of foreclosure." ' Life Ins. Co. v. Howell, 32 N. J. istrator. Reinig v. Hecht, 58 Wis. Eq. 146. 212. ''Mitchell V. Bovvne, 63 How. I. No ^ See also Cobb v. Thornton, 8 How. 66. personal judgment can be given against * Moore v. Shaw, 15 Hun, 428 ; s. c. the heir of the mortgagor. Harbison v. appeal dismissed, 77 N. Y. 512. Vaughan, 42 Ark. 539. Even to the ex- ' Springsteene v. Gillett, 30 Hun, 260, tent of property received by him, the 264. remedy must be first against the admin- * Bicknell v. Byrnes, 23 How. 486, 490. 636 MOETaAGES OF EEAL PEOPEETY. [§§ 833-834. The docketing of a judgment for deficiency is the entry of the judgment within the meaning of the Code in the provision that exe- cutions may issue, of course, at any time within five years after the entry of the judgment.' Until the filing of the referee's report of deficiency, the judgment declaring the liability of the defendants for deficiency is not brought to a condition in which execution could is- sue, and the provision of the Code referred to is intended to limit the time within which executions may issue, of course, upon any judg- ment to the period of five years after the right to issue the same has fully accrued." § 833. Varying judgment by subsequent contract. — If, subse- quent to the entry of the judgment, the parties to the action enter into a new contract upon sufficient consideration, which varies their rights under the judgment, the new contract takes the place of and controls the judgment. In such a case, if the judgment is sought to be enforced, it will be proper to commence a new action and to stay the proceedings by injunction.' Even if a sale has been had under the judgment, if the purchaser allows the defendant to remain in possession under an agreement to reconvey on terms, he cannot after- ward obtain a writ of assistance to enable him to obtain possession.* FORCE AND EFFECT OF THE JDDGMENT. § 834. The parties to the action are concluded by the judg- ment, although the nature of their liens was incorrectly stated in the complaint. The law supposes that whatever claims they have were litigated by them, and if their rights were not asserted, they are for- ever barred from asserting them.' This principle must be qualified to the extent of limiting the effect of the judgment to being a final determination of all of the questions which might properly have been litigated in it ; a claim of title in hostihty to the mortgage could not be set up or litigated in a foreclosure suit, and if such a claim be ad- vanced and a judgment is rendered thereon after a hearing upon the merits, it will nevertheless be set aside upon appeal as exceeding the jurisdiction of a court of equity." ' Code of Civ. Pro. § 1375. 'Benjamin v. Elmira, Jefferson & ' Cijpfer V. Frank, 65 How. 396. Canandaigua R.R. Co., 49 Barb. 441. " Van Wagenen v. La Farge, 13 How. ^ Corning v. Smith, 6 N. Y. (2 Seld) 16. 82 ; Lewis v. Smith, 9 N. Y. (5 Seld.) * Toll V. Hiller, 11 Paige, 228. 502 ; Lee v. Parker, 43 Barb. 611 ; Bar- ker V. Burton, 67 Barb. 458. §§ 835-836.] PRACTICE in actions to foreclose. 537 Althongli the recital in a judgment in an , action of foreclosure of service of process upon, and of appearance by, a defendant, is not conclusive, and evidence is admissible on the part of such defendant to show that the court never acquired jurisdiction of his person, every intendment is in favor of the validity of the judgment, if regular upon its face ; the burden of establishing want of jurisdiction is upon the party so questioning it, and it should be established in the most satisfactory manner to deprive the judgment of its effect.^ A judgment of foreclosure is admissible, even against strangers to the record, to show transfer of title, just as a deed of conveyance from the mortgagor would be.'' § 835. Remedy is by appeal.- — If the judgment is erroneous as to the directions contained therein, as to costs or the distribution of proceeds, the remedy is by appeal." Although the judgment directs the sale of the premises for the satisfaction of the debt, and that the defendant pay any deficiency appearing after such sale, it is final and not interlocutory merely. Nothing remains for the court judicially to determine, and an appeal may be taken from it at once." The fact that the judgment is final, however, wiU not prevent the court from inserting other provisions in it on proper application being made, and that, too, for the benefit of any of the parties to the action." § 836. Merger of mortgage in judgment. — The judgment being entered, the mortgage is said to be merged in it, and after a satisfac- tion of the amount due, by a sale of the land, or of a portion of it, both the mortgage and the judgment cease to be a lien thereon." But a valid mortgage can only be merged in a valid judgment, and a judgment setting aside a foreclosure and sale of mortgaged premises as illegal and fraudulent, is no bar to a subsequent foreclosure of the same mortgage, the mortgage itself, or its lien, being unaffected by said judgment.' So, also, a mortgage is not deemed merged in a judgment of foreclosure so as to give an inequitable advantage to a person having a lien, who was, by mistake, not made a party to the action.' A judgment of foreclosure does not so far merge the mortgage as ■ Ferguson v. Crawford, 86 N. Y. 609. ' Livingston v. Mildrura, 19 N. Y. 440. ^ Murray v. Deyo, 10 Hun, 3. « People v. Beebe, i Barb. 379. "Barnard v. Bruce, 21 How. 360. ' Stackpole v. Robbins, 47 Barb. 212. * Morris v. Morange, 38 N. Y. 172 ; " Franklyn v. Hayward, 61 How. 43 ; Bolles V. Duff, 43 N. Y. 469. Lapping v. Duffy, 47 Ind, 51. 538 MORTGAGES OF REAL PEOPEETT. [§ 837. to preclude the mortgagee from recovering from the mortgagor on covenants of warranty contained in it.' And by a judgment of fore- closure a mortgage is not so merged that the holder of a junior in- cumbrance can obtain any priority." If either will such a merger pre- vent the bond and mortgage from being admissible in another action against pal-ties who were not joined in the foreclosure to reform the mortgage and enforce it against other property.' The mortgage will be so far merged in the decree that a purchaser cannot be regarded as a mortgagee in possession as against any party to the action who is bound by the decree.* § 837. Presumption of redemption after twenty years. — The object of an action which we term an action to foreclose a mortgage, is to enforce the mortgage lien. The efEect of the judgment is to fix conclusively the amount due upon the debt," which is its sole foundar tion. The mortgage is not extinguished, and notwithstanding the decree the rights and liabilities of the mortgagor continue under the statute," to be measured by the obligations stated in the mortgage until final payment. Until the bond or debt to secure which the mortgage is given is fully paid by the execution of the decree, or otherwise, the mortgagor cannot require the bond and mortgage to be returned to him or cancelled.' The debt upon the bond then is secured by the mortgage and also by the decree. Yet by this double security it is not placed on any different footing from a debt due upon bond and mortgage. The entering of a decree of foreclosure is not necessary to give security to the debt, for the lien subsists.' The decree is a means only of enforcing the lien of the mortgage, and so rendering it available." The lien remains until tlie debt is paid or discharged. Neither the foreclosure suit nor the decree affects that, nor does either impair the mortgagor's right to redeem. That right remains the same after decree and until an actual sale of the mort- gaged premises under it." So, notwithstanding the decree the lien is liable to be defeated by the same presumption fomided upon lap^e of time. If the mortgage stands alone without payment or proceedings to enforce it for twenty years, the presumption of payment accrues. ' Lloyd V. Quimby, 5 Ohio St. 262. "2 R. S. igi, § 151. ^ Lapping' v. Duffy, 47 Ind. 51. 'In re Costar, 2 Johns. Ch. 502. ' Sanders v. Farrell, 83 Ind. 28. ' Lansing v. Capron, I Johns. Ch. 617. * Davenport v. Turpin, 43 Cal. 597. " Bueklin v. Bueklin, i Abb. Ch. App. ' Wallace v. Field, 56 Mich. 3 ; Hal- Dec. 242. dade v. Sweet, 58 Mich. 429. '° Brown v. Frost, 10 Paige, 243. § 838.] PKACTICE IN ACTIONS TO FORECLOSE. 539 If by virtue of foreclosure a new " security " has been taken, the same policy will, under the same circumstances, raise, the same pre- sumption. Upon this principle it has been held that where there had been a f oreclosuire sale not followed by a conveyance to the purchaser or any recognition of the mortgage by the judgment debtor, it wiU be presumed after the lapse of twenty years that the land had been redeemed from such sale.' STAT OF PEOCEEDINGS ON APPEAL. § 838. The provisions of law controlling the right of a de- fendant to a stay of proceedings on an appeal from a judgment of foreclosure and sale are as follows : " If the appeal is taken from a judgment which entitles the respond- ent to the immediate possession of real property, or from a judgment or order directing the sale or the delivery of possession of real prop- erty, it does not stay the execution of the judgment or order, until the appellant gives a written understanding, to the effect that he will not, while in possession of the property, conlmit, or suffer to be com- mitted, any waste thereon ; and that, if the judgment or order is af- firmed, or the appeal is dismissed, he will pay the value of the use and occupation of the property, or the part thereof, as to which the judg- ement or order is affirmed from the time of taking the appeal until the delivery of the possession thereof, pursuant to the judgment or order, not exceeding a specified sum, fixed by a judge of the court below. But if the judgment directs a foreclosure and sale of real property mortgaged, an imdertaking is sufficient to stay the execution of the judgment, which is to the effect that if the judgment is affirmed, or the appeal is dismissed, the appellant will pay any deficiency which may occur upon the sale, in discharging the sum to pay which the sale is directed, with interest, and the costs, and all expenses charge- able against the proceeds of the sale, not exceeding a specified sum, fixed by a judge of the court below." " Kule 6Y also provides that " no order to stay a sale under a judg- ment in partition, or for the foreclosure of a mortgage, shall be granted or made by a judge out of court, except upon a notice of at least two days to the plaintiffs attorney." ' Per Danforth, J., in Barnard v. Onderdonk, 98 N. Y. 158, 165 ; Reynolds V. Dishon, 3 Bradw. (111.) 173. ^ Code of Civ. Pro. § 1331. 540 MORTGAGES OF REAL PEOPEKTY. [§§ 839-840. § 839. The appellant may elect between undertakings. — See- tiou 1331 of the Code of Civil Procedure offers to the appellant his election between two different kinds of undertakings, and he is not obliged to give both. The second sentence was adopted as an amend- ment in 18T9, and prior to that date an appellant was required to give both, and from that burden he is now relieved. The amendment evidently was adopted upon the idea that if the plaintiff is secured against any deficiency, there is no occasion for indemnifying him against waste or loss of the value of the use ; and, on the other hand, if the consequences of waste and the value of the use ai'e made up to the plaintiff, the appellant shall not be required to make good any further deficiency.' An undertaking framed under section 1327 of the Code of Civil Procedure, for staying proceedings on an ordinary judgment for tbe payment of money, would not be appropriate to stay proceedings on a judgment directing the sale of property and the payment of defi- ciency. ° -§ 840. Substituting receiver for undertaking. — On an appeal to the Court of Appeals, the plaintiff is entitled, as a matter of right, to an undertaking for costs under section 1351 of the Code of Civil Procedure ; but on an appeal to the General Term, the court may stay proceedings without any undertaking, or may substitute a re- ceiver in lieu of requiring an undertaking. If any undertaking is required, the section cited controls as to its form.' ' Grow V. Garlock, 29 Hun, 598. ' Id., 598, 601, and cases cited. ' Wilson V. Grant, 59 How. 350. CHAPTER XXIII. DEFENSES AND COUNTEB-CLAIMS IF ACTIONS TO FORECLOSE. WHAT MAY BE LITIGATED IN ACTIONS TO FORECLOSE. § 841. Nature of action to foreclose. 842. Title of mortgagor cannot be tried. 843. Title adverse to the title of mort- gagor cannot be tried. 844. Where a person claiming a lien or title prior to the mortgage is made a party. 845. Conflicting claims to priority may be determined. 846. Pleading to rajse question of pri- ority. 847. A defendant may properly pre- sent any defense which consists in showing that the mortgage ought not to be foreclosed. 848. Mortgage procured by fraud. 849. A mortgage executed upon an il- legal consideration. 850. Correcting mortgage because of fraud or mutual mistake. 851. Making description definite. HOW A DEFECT OF PARTIES MAY BE OB- JECTED TO. 852. Persons having liens should be made parties. 853. Persons liable for debt. PROCEEDINGS AT LAW FOR THE SAME DEBT. 854. The pendency of proceedings at law for the recovery of the same debt. 855. Where the complaint shows that a judgment has been obtained for the mortgage debt. INFANCY AS A DEFENSE. 856. Purchase-money mortgage of in- fant. 857. A mortgage of an infant is void- able only. FAILURE OF. CONSIDERATION FOR A PUR- CHASE-MONEY MORTGAGE. 858. Prior incumbrances on the prop- erty. §859. Defect of title in the conveyance to mortgagor. 860. Mortgage on one parcel of land as consideration for another, the title of which fails. 861. Consideration of purchase-money mortgage fails upon eviction. 862. What constitutes an eviction. 863. Where mortgagor is unable to obtain possession. 864. Foreclosure ordered without judg- ment for deficiency. 865. Fraud practiced on mortgagor. 865. Mutual mistake as to title of grantor. 867. Mistake as to quantity of land conveyed. 868. Agreement to protect mortgagor against prior claims. 869. Remedies of mortgagor, COUNTER-CLAIMS IN FORECLOSURE CASES. 870. Counter-claim on contract. 871. Who may set up counter-claim. 872. Requisites of counter-claim. 873. Counter-claims for damages. 874. What are proper counter-claims. 875. Litigation between defendants. 876. Substitute for cross-bill. 877. What may be litigated between defendants. - , WHEN A GRANTEE MAY DEFEND WHO HAS TAKEN SUBJECT TO THE MORTGAGE. 878. Conveyance subject to mortgage void for usury. 879. General rule where conveyance is subject to mortgage. 880. Distinctions to be observed. 881. Conveyances which permit de- fense by grantee. 882. Propositions reconciling the cases. DEFENSE OF DEFECT OF TITLE TO THE MORTGAGE. 883. Invalid assignment. 884. Consideration for assignment is immaterial. 542 MORTGAGES OF REAL PROrERTT. [§ 841. WHAT MAT BE LITIGATED IN ACTIONS TO FOEECLOSE. § 841. Nature of action to foreclose. — An action to foreclose a mortgage is in the nature of a suit in equity. It differs from some other actions which are also equitable, in the special statutory provis- ions which have been made concerning it ; but except as the statute controls, the same rules govern in actions to foreclose, as apply in all actions which, prior to the Code, were litigated in the Court of Chancery. The statute declares that whenever a bill shall be filed for the fore- closure or satisfaction of a mortgage, the court shall have power to decree a sale of the mortgaged premises, or such part thereof as may be sufficient to discharge the mortgage and the costs of suit.' This provision did not change the existing law, and the practice in this State, both before and since the statute, has been to sell, and not to adjudge a strict foreclosure.' The sale has the same effect as the foreclosure Would have had,' and so far as the question of what may be litigated is concerned, the same rules would apply in an action to foreclose by a sale, as in an action to foreclose by fixing a time be- yond which the right of redemption could not exist. The statute also makes provision for the collection of the mortgage debt in the action to foreclose,* and in this respect it changes the pre- vious law, for the Court of Chancery could not, prior- to that time, entertain actions on a bond or on agreements collateral to a bond and mortgage in suit, given to secure payment of the mortgage debt. For this reason it was held that the provisions of the statute did not ex- tend to a case where the complainant had no right to come into chan- cery to foreclose the mortgage as against the interest of any one in the mortgaged premises, or any part thereof. ° The nature of the jurisdiction in which the action to foreclose is entertained, and the nature of the judgment which is sought, will de- termine the questions which may properly be litigated. The object of the action is twofold : to extinguish the equity of redemption, and to compel the performance of a contract to pay money. The court in which the questions are passed upon is guided by the rules which prevail in courts of equity. '2 R. S. 191, § 151. *2 R. s. igi, § 152. '' Mills V. Dennis, 3 Johns. Ch. 367. ' Mann v. Cooper, i Barb. Ch. » 2 R. S. 192, § 158. 185. §§ 842-843.] DEFENSES iisr actions to foreclose. 543 § 842. Title of mortgagor cannot be tried. — The mor,tgagor may not, in an action to foreclose, and in the absence of fraud, deny his title at the time of the execution of the mortgage. The action is inappropriate to the settlement of a disputed title, and there is no reason why the court should entertain a question concerning the legal right to the mortgaged premises. The purchaser under the judgment will acquire what interest the mortgagor had in the premises, whatever that was. Such title, which was before defeasi- ble, will then become absolute ; if there be dispute concerning its nature and extent, that must be adjudicated in some proceeding in which the pleadings and proceedings are adapted to that purpose." § 843. Title adverse to the title of mortgagor cannot be tried. — It is not every conflicting title to the property which can be litigated, but only those which concern the equity of redemption. A mortgagee has no right to make one who claims adversely to the title of the mortgagor, and prior to the mortgage, a party defendant for the purpose of trying his adverse claim in a court of equity.'' And where a party making a claim of title anterior to the mortgage is made a defendant, the judgment will not bind his prior interest, and it will be reversed, though made after a hearing on pleadings and proofs.' In a case where a woman claiming a paramount right of dower was made a defendant and answered insisting upon such para- mount right, and a trial was had on the issue thus presented, and the court directed a judgment in the usual form, barring and foreclosing the defendant of all right, claim, interest, and equity of redemption in the mortgaged premises and every part thereof, it was held on appeal that the judgment should either dismiss so much of the action as to said defendant as related to the interest claimed by her to be ' Per Dykman, J., in Dime Savings dustrial Savings Bank v. Clute, 33 Hun, Bank of Brooklyn v. Crook, 29 Hun, 671. 82 ; Hekla Fire Ins. Co. v. Morrison, 56 ' Rathbone v. Hooney, 58 N. Y. 463 ; Wis. 133 ; ^Roberts v. Wood, 38 Wis. 60 ; Merchants' Bank v. Thomson, 55 N. Y. Macloon v. Smith, 49 Wis. 200 ; Bozarth 7 ; Brundage v. Domestic & For. Miss. v. Landers, 113 111. 181 ; Dorr v. Leach, Soc, 60 Barb. 204 ; Eagle Fire Ins. Co. 58 N. H. 18 ; Wolfinger's Adm'r v. Betz, V. Lent, 6 Paige, 637 ; Frelinghuysen v. 66 Iowa, 594 ; Kinsley v. Scott, 58 Vt. Colden, 4 Paige, 206 ; Jones v. St. John, 470. 4 Sandf. Ch. 208 ; Holcomb v. Holcomb, * Corning v. Smith, 6 N. Y. (2 Seld.) 2 Barb. 22 ; Banks v. Walker, 3 Barb. 82 ; Lewis v. Smith, 9 N. Y. (5 Seld.) Ch. 438 ; Meigs v. Willis, 66 How. 466 ; 502 ; Lee v. Parker, 43 Barb. 611 ; Mer- Eniigrant Industrial Savings Bank v. chants' Bank v. Thomson, 55 N. Y. 7 ; Goldman, 75 N. Y. 127 ; Emigrant In- Barker v. Burton, 67 Barb. 458. 544 MOETaAGES OF REAL PKOPEETY. [§ 844. paramount to the mortgage, or else that interest should be excepted from the operation of the judgment by a proper statement expressive of that qualification.' The validity of a trust deed executed prior to the mortgage cannot be tried in an action to foreclose." An action to foreclose is not a proper proceeding in which to liti- gate the adverse and paramount title of a defendant who claims under the foreclosure of a previous mortgage from which the defendant does not seek to redeem.' § 844. Where a person claiming a lien or title prior to the mortgage is made a party, it is not necessary for him to set up his rights by answer, since the entire force of the decree will be to ex- clude him from any interest in the equity of redemption. This ap- plies to the wife of the mortgagor who did not join in the mortgage,' and to a life estate not bound by the mortgage," and to the holder of a prior judgment," and to the holder of a prior mechanic's lien.' If the mortgagor since the execution of the mortgage has acquired an outstanding or further title, this will not constitute a defense to the mortgage, and the validity of such title cannot be tried in the foreclosure suit. The judgment vdll operate to foreclose the mort- gagor as to the title owned by him at the time when the mortgage was executed, and the judgment will not prevent him from setting up his after-acquired title against the purchaser at the mortgage sale.' This principle will apply where the owner of the equity of redemption or a person holding a lien upon it has purchased the property at a sale for taxes. The validity of the tax sale cannot be set up in defense against the mortgage ;' and the judgment of fore- closure and the sale made in pursuance of it will i^ot affect the tax title." This rule was applied in a case where the wife of the mort- gagor who had joined in the mortgage, subsequently obtained a tax title." A prior mortgagee who is made a defendant as also holding a ' Lanier v. Smith, 37 Hun, 529. ' Emigrant Industrial Savings Bank v. '^ Hclck V. Reinheimer, 23 W. Dig. Goldman, 75 N. Y. 127. 473. ' ' Weil & Bro. v. Uzzell, 92 N. C. 515. 3 Bell V. Tate, 47 Mich. 468. " Odell v. Wilson, 63 Cal. 159 ; Elias * Lewis V. Smith, 9 N. Y. 502 ; Mer- v. Verdugo, 27 Cal. 4^8 ; Bozarth v. chants' Bank v. Thomson, 55 N. Y. 7. Landers, 113 111. 181 ; contra, Lyon v. ' Rathbone v. Ho'oney, 58 N. Y. 463. Powell, 78 Ala. 351 ; Randle v. Boyd, 73 « Frost V. Koon, 30 N. Y. 428 ; Payn Ala. 282. V. Grant, 23 Hun, 134. '" Bozarth v. Landers, 113 111. i8i. §§ 845-846.] DEFENSES m ACTIONS TO FORECLOSE. 545- junior lien may answer in the action and ask to have Lis prior mort- gage paid out of the proceeds of the sale before applying any por- tion of such proceeds to the satisfaction of the plaintiff's mortgage.' § 845. Conflicting claims to priority may be determined. But, on the other hand, the court will entertain every question which must be determined in order to do complete justice between all parties whose rights in the equity of redemption are destroyed by the foreclosure and sale. As an example of this, it may be stated that it is a matter of common practice to determine, as between holders of several parcels of land mortgaged together, the order in which they should be sold to pay the mortgage debt." And, in Brown V. Keeney Settlement Cheese Association (59 N. Y. 242), the Courj; of Appeals held that it was permissible for the owner of a structure on the mortgaged premises to set up and litigate in the foreclosure suit an alleged right to remove such structure because of an agree- ment between him and the mortgagor or mortgagee, or of the circum- • stances under which the annexation was made ; and that the courj; might, by the judgment in the action, in case the right is established, protect it by authorizing the removal before the sale, or providing that the sale should be subject to such right. In an action to foreclose a mortgage a subsequent attaching creditor may prove the existence of his attachment, and show that, in conse-. quence of the plaintiff's acts, his lien is superior to the mortgage.' One asserting a right under the mortgagor prior to the mortgage is a proper party to an action for the foreclosure of the mortgage, and the question of priority may be determined in that action." § 846. Pleading to raise question of priority, — In a case where the plaintiff desires to contest the priority of a lien held by a de- fendant, of earlier date or record than his mortgage, it will not be- sufficient to adopt the allegation under the rule to the effect that the' defendant has or claims to have some interest or lien which is subse* quent to the mortgage. The complaint should contain a description of the lien sought to be attacked, and a statement of the grounds upon which relief is asked." I Doctor V. Smith, i6 Hun, 245. 84; Bank of Orleans v. Flagg, 3 Barb.- 'The New York Life Ins. & Trust Co. Ch. 316 ; Board of Supervisors of Iowa V. Milner, i Barb. Cii. 353. Co. v. Mineral Point R.R. Co., 24 Wis. ^ Scrivner v. Dietz, 8 Pacif. Rep. (Cal.) 93. 609. 'Bank of Orleans v. Flagg, 3 Barb. * Brown v. Volkenning, 64 N. Y. 76, Ch. 318. 35 646 MOETGAGES OF REAL PEOPERTY. [§ 847. § 847. A defendant may properly present any defense which consists in showing that the mortgage ought not to be fore- closed. Thus, he may insist that the obligation which the mort- gage was made to secure is void as being without consideration, or usurious, or that it has been paid. The fact that the mortgage has been paid in whole or in part is a valid defense, not only to the mort- gagor, but to junior incumbrancers.' So, the payment and discharge of a mortgage given as collateral security to a prior mortgage, is a payment upon such prior mortgage, and is available as a defense to a subsequent incumbrancer in an action to foreclose the same." If the mortgage is perfectly valid and unpaid, the defendant may still insist that it is not due, or that the time for paying it has been extended. ° Or the defendant may allege any fact tending either to defeat the obligation or to reduce its amount, and the issue thus raised can be tried in the action to foreclose and without a jury.* And the mortgagor is not estopped by the execution of the mortgage from showing an entire or partial failure of consideration.' Since any facts which would justify or require a court of equity to grant affirmative relief against the enforcement of a mortgage, can properly be set up as a defense to the foreclosure, an injunction against the foreclosure of a mortgage can never become necessary ex- cept where such foreclosure is attempted by advertisement, without suit." Any defense which can be urged by the mortgagor may also be made by those claiming liens junior to the mortgage under him, un- less restrained by special circumstances. Thus, a junior mortgagee' or judgnient creditor ° may contest the validity of the mortgage on the ground of usury. And the right of a junior lienor to defend is not affected by the circumstance that his claim is not yet due." A second mortgagee, who has foreclosed and bid in the property, can make any defense against the prior mortgage that the mortgagor could have made. As that the first mortgagee had violated an agree- ' Prouty V. Price, 50 Barb. 344. ley v. Kelley, 60 Wis. 315 ; Davis v. ^ Prouty V. Eaton, 41 Barb. 409. Bechstein, 69 N. Y. 440 ; 25 Am. R. 218. " Dodge V. Crandall, 30 N. Y. 294 ; * Foster v. Townshend, 2 Abb. N. Cas. Hall V. Davis, 73 Ga. loi ; Lucas v. 29, 46. Hendrlx, 92 Ind. 54. ' Mutual Life Ins. Co. v. Bowen, 47 * Carmichael v. Adams, gi Ind. 526 ; Barb. 618. Armstrong v. Gilchrist, 2 Johns. Cas. ' Thompson v. Van Vechten, 27 N. Y. 424 ; Grimball v. Mastin, 77 Ala. 553. 568, 585. 'Jonas V. Jonas, 20 Iowa, 388 ; Caw- ° Hart v. Haydon, 79 Ky. 346. §§ 848-849.J DEFENSES IN ACTIONS TO FORECLOSE. 547 ment with the mortgagor, by which he was obligated first to pro- ceed against collateral security, and had by his negligence lost such security." § 848. Mortgage procured by fraud. — ^Where one who is illit- erate executes a mortgage without knowledge of its contents, no fraud being shown, neither he nor his grantee who purchases with knowl- edge of the mortgage can contest its validity, as against a iona fide holder for value, on that ground alone.' _ It must also be shown that the mortgagor executed the paper without negligence on his part, * and this although he was old, infirm, and illiterate.' But while one who can read and who executes a mortgage without reading it is guilty of negligence that will prevent him from obtaining relief from the mortgage, because its contents were different from what they were represented to him ; yet if a trusted friend and agent of the mortgagor was employed to represent the contents of the mortgage, 60 that its execution was obtained without the mortgagor's reading it, this is a fraud against which relief will be granted.* Where a daughter, through undue influence and without adequate consideration, procured from her aged and infirm mother the execu- tion of a note and mortgage, it was held that they should be cancelled on petition of the mother's heirs." A mortgage made with intent to defraud the creditors of the mort- gagor is good between the parties, and if the mortgagee can show a right to recover without developing the fraud, the mortgagor cannot set up his own fraud in defense.' § 849. A mortgage executed upon an illegal consideration is void, and the real facts may be set up in defense, though they con- tradict the terms of the instrument.' A mortgage executed upon the consideration that the son of the grantor, who was then under arrest for embezzlement, should not be prosecuted, was held void.' And a mortgage the consideration for which, in whole or in part, is the stifling of a prosecution for a con- spiracy to defraud, and for embezzlement as a bank officer, is void;* ' Thompson v. Jarvis, 39 Mich. 689. Leighton v. Orr, 44 Iowa, 679; TucTce t. ' Leslie v. Merrick, 99 Ind. 180. Buckholz, 43 Iowa, 415. ' Montgomery v. Scott, 9 S. C. 20 ; 30 • Bonesteelv. SuUivan,i04Penna.St.9. Am. R. I. ' Morris v. Morris, Adm'r, g Dana * Robinson v. Glass, 94 Ind. 211; Mat- (Ky.) 317 ; 35 Am. Dec. 138. lock V. Todd, rg Ind. 130. " Reed v. McKee, 42 Iowa, 689^ ' Spargner v. Hall, 62 Iowa, 498 ; * Pearce v. Wilson, in Penna. St. 14. 548 MORTGAGES OF REAL PEOPEETT. [§ 850. But yrliere a husband, who was a defaulter, urged his wife to ex- ecute SL mortgage to secure his sureties, telling her that rather than go to jail he would kill himself, and she executed the mortgage after much importunity on his part and hesitancy on hers, and the mort- gagees had no knowledge of her reluctance, and no propecution had either been commenced or threatened, the mortgage was held to be valid.' § 850. Correcting mortgage because of fraud or mutual mis- take.— -The fact that the enforcement of the obligations for the pay- ment of the debt collateral to the mortgage, is intrusted to a court of equity does not create any new rules with regard to the substantial rights of the parties, and all legal and proper defenses to such obliga- tions may be interposed and litigated. In addition to these defenses the defendant may seek the affirmative aid of the court as a court of equity to cancel the instrument sued upon as fraudulent, or to correct it because, by reason of accident or mistake, it does not fairly express the agreement of the parties. The correction of mistakes in written instruments, occurring by accident, fraud, or otherwise, has been one of the acknowledged branches of equity jurisdiction from the earliest history of the Court of Chancery, and a party to a foreclosure suit, injured by a mistake, has a right to demand its correction on furnish- ing satisfactory proof that it has been made." The plaintiff may obtain a correction of the description contained in the mortgage, and a judgment for the sale of the property by the corrected description.' And a defendant may have a covenant struck out of a deed purporting to bind him personally for the payment of the mortgage debt,' or he may have a judgment altering the terms of payment of the mortgage debt." Such a mutual mistake may be corrected not only as against the' mortgagee and his heirs," but also as against attaching creditors,' and 1 Lefebere v. Detroit, 51 Wis. 326 ; 37 (Cal.) 624 ; Carey v. Reeves, 5 Pacif. Am. Dec. 833. Rep. (Kans.) 22. " Andrews v. Gillespie, 47 N. Y. 487 ; * Albany City Savings Institution v. Gillespie v. Moon, 2 Johns. Ch. 585. Burdick, 87 N. Y. 48, rev'g s. c. 20 Hun, ' Halstead v. Board of Com'rs of Lake 104. Co., 56 Ind. 363 ; Barnaby v. Parker, 53 ' Andrews v. Gillespie, 47 N. Y. Ind. 271 ; Alexander v. Rea, 50 Ala. 487. 450 ; Doe V. Vallejo, 29 Cal. 385 ; Palm- " McKay v. Wakefield, 63 Ind. 27. er V. Windrom, 12 Neb. 494 ; Savings ' Bush v. Bush," 6 Pacif. Rep. 794 ; & Loan Spc. v. Meeks, 5 Pacif. Rep. 33 Kans. 556. I 851. J DEFENSES IN ACTIONS TO FORECLOSE. 549 judgment creditors/ and purchasers under them, with notice of the mistake," or as against a junior mortgagee whose lien was given as se- curity for an antecedent debt,' or as against any person except an in- nocent purchaser for a valuable consideration.' Where an error in the description of the property is not discovered until after the sale, the judgment and sale may be set aside and an amended complaint filed so as to obtain a new judgment correcting the description and directing a new sale ;' or a new action can be maintained to correct the misdescription." But where the property is purchased by some person other than the mortgagee, he cannot come into court asking that other property than that sold to and pur- chased by him be subjected to his purchase on the ground that, by mis- take, the mortgage covered different property from that intended.' § 851. Making description definite. — A mortgage describing the lands as " all the lands owned by the mortgagor," can be made certaiin by evidence aliunde, and a complaint in foreclosure may describe the lands specifically, averring that they were all the lands of the mort- gagor, and the judgment may direct the sale by the specific descrip- tions.' So, other additions to the description of the property which merely tend to definiteness and do not change the property intended by the mortgage, may be made." Evidence to justify any such change in the description must not contradict the mortgage, but must merely explain the description in the mortgage, and adopt the means of identification contained in it.'° If the plaintiff elects to proceed under an indefinite description^ the mortgagor cannot be heard to complain, whatever might be the effect of a sale under the description." The judgment or sale will not be affected by errors in the descrip- tion contained in any of the proceedings, and no relief will be granted ' Duncan v. Miller, 64 Iowa, 223 ; 183 ; Burkham v. Burk, 96 Ind: 270 ; Boyd V. Anderson, 102 Ind. 217. Armstrong v. Short, 95 Ind. 326. ^ Strang v. Beach, 11 Ohio St. 283. ' Schwickerath v. Cooksey, 53 Mo. 75. ' Busenbarker v. Rainey, 53 Ind. 499 ; ' Leslie v. Merrick, 99 Ind. 180 ; Wil- Bank, etc., v. Wentworth, 28 Kans. 183. son v. Boyce, gg U. S. 320. * Dozier v. Mitchell, 65 Ala. 511 ; Clay " Traveller's Ins. Co. v. Yount, 98 Ind. v; Hildebrand, 34 Kans. 694 ; Cox v. 454. Esteb, 81 Mo. 393. " Hannon v. Hilliard, loi Ind. 310. 'Thompson V. Maxwell, 16 Fla. 773; "Graham v. Stewart, 9 Pacif. Rep. Davenport v. Widowell, 6 Ohio St. 459. (Cal.) 555 ; Whitney v. Buckmah; 13 Cal. ' Bank, etc., v. Wentworth, 28 Kans. 536 ; Tryon v. Sutton, 13 Cal. 4^. 550 MORTGAGES OF REAL PEOPEETY. [<}§ 852-854. as against such errors unless it can be shown that the objecting party will be injured thereby.' HOW A DEFECT OE PAETIES MAT BE OBJECTED TO. § 852. Persons having liens should be made parties. — It is a right of the person obligated to pay the deficiency after the sale of the mortgaged premises, to require that the whole equity of redemp- tion be sold, and to demand that every party necessary to accomplish that be joined, and be made a party to the action, because his ultimate liabiHty for the debt makes it of the highest importance to him that the title which will be made by the sale shall be perfect against all equities." All persons having liens upon the equity of redemption are necessary parties ;' if any of these are omitted, and that fact ap- pears upon the face of the complaint, the objection may be taken by demurrer ; but if it does not so appear, the objection should be taken by answer.' § 853. Persons liable for debt. — It is also a right of the defend- ant personally liable to pay the debt, to have all persons who have or daim to have an interest in the mortgage, made parties to the action, and, if the ownership appears doubtful, the court will order all per- sons appearing to be interested to be brought in." So, too, it has been thought to be the right of each defendant to have complete justice done with regard to the subject-matter of the controversy, so far as the power of the court may extend ; and, upon this principle, a surety for the mortgage debt who is made a party for the purpose of obtain- ing a judgment for deficiency against him, is said to have the right to insist that the principal debtor shall be made a party to the suit if he is within the jurisdiction of the court." PEOCEEDINGS AT LAW FOE THE SAME DEBT. § 854. The pendency of proceedings at law for the recovery of the same debt is no objection to the prosecution of a foreclosure, providing that no judgment has been obtained ; the only effect of the foreclosure being that the action at law cannot be further pro- ceeded with but by leave of the court in which the foreclosure is ' Cooper V. Foss, 15 Neb. 515. * Morris v. Wheeler, 45 N. Y. 708 ; » Hall V. Nelson, 14 How. 32 ; s. c. 23 Kittle v. Van Dyck, i Sand. Ch. 76. Barb. 88; Morris v. Wheeler, 45 N.Y. 708. ' Kortright v. Smith, 3 Edw. 402. ' Ensworth v. Lambert, 4 Johns. Ch. " Bigelow v. Bush, 6 Paige, 343. 605 ; McGown v. Yerks, 6 Johns. Ch. 450. §§ 855-856.] DEFENSES IN ACTIONS TO FORECLOSE. 551 pending.' But if the action at law, whether it be against a party to the action to foreclose or a third person, providing only it be for the collection of the debt secured by the mortgage," has proceeded to judgment, all proceedings in the foreclosure suit must be stayed until the remedy upon that judgment is exhausted." § 855. Where the complaint shows that a judgment has been obtained for the mortgage debt, and it does not show that the remedy thereon has beeu exhausted, it is defective, and the objection can be taken by demurrer or answer, or by opposing the application for judgment without answering.* If the fact does not appear upon the face of the complaint it should be set up by way of answer." INFANCY AS A DEFENSE. § 856. Purchase-money mortgage of infant. — Where upon the sale and purchase of land a deed is executed therefor, and the pur- chaser gives back a mortgage for the purchase money or for a part thereof, the presumption is that the deed and mortgage were exe- cuted at the same time, and the whole is considered one transaction. Taking the whole together, the purchaser acquires only the equity of redemption." If such a contract be made by an infant it is voidable by him when he becomes of age. He may then relinquish the prop- erty to the grantor, and claim the money which was paid at the time of the purchase.' , But the infant cannot avoid one part of the contract and aflSrtn the other. If, when he comes of age, he elects to avoid the bond ,and mortgage, the deed also will be avoided. Bj continuing in possession aiid conveying the land he makes him- self legally liable for the payment of the residue of the purchase money.' ' Williamson v. Champlin, Clarke, g, v. The North Western Ins. Co., 26 N. Y. affi'd 8 Paige, 70 ; Suydam v. Bartle, 9 68 ; Dusenbury v. Hulbert, 59 N. Y. Paige, 294. ^541 ; Savage v. The Long Island Ins. ^Pattison v. Powers, 4 Paige, 549. Co., 43 How. 462. " 2 R. S. 192, § 156. ' Willis V. Twambly,- 13 Mass. 204. *Shufelt V. Shufelt, 9 Paige, 137; "Lynda v. Budd, 2 Paige, igi; Kit- Grosvenorv. Day, Clarke, 109. cben v. Lee, 11 Paige, 107 ; Coutantv. "The North River Bank v. Rogers, 8 Servoss, 3 Barb 128 ; Hubbard v. Cum- Paige, 648. mings, i Greenl. 11 ; Roberts v. Wig- "Stow V. Tifft, 15 Johns. 458; Jackson gin, i N. H. 73 ; Badger v. Phinney, 15 v. Austin, 15 Id. 477; Van Home v. Mass. 359; Henry v. Root, 33 N. Y. 526, Crain, i Paige, 455 ; Rawson v. Lamp- 553. man, 5 N. Y. (i Seld.) 456 ; Hitchcock S52 MOETGAGES OF EEAL PEOPEETT. [§§ 857-858. § 857, A mortgage of an infant is voidable only, and if lie elects to disaffirm it he should do so promptly upon coming of age." The burden of proof that the infant has by his conduct since reach- ing full age ratified his contract made before, rests upon the person seeking to enforce such contract. The mere appearance by attorney in a foreclosure suit will not, however, ratify a contract no part of which can properly be litigated in that action." "Where a minor son conveys to his father in possession and the father executes a mortgage and dies, the son being an heir, the exe- cuting of a mortgage by the son after attaining his majority will not, alone, disaffirm the deed to the father, since the mortgage is not in- consistent with the deed, for the reason that the son has a mortgagable title as heir.^ It will not operate to disaffirm the deed for the further reason that the mortgage is not of as high a character as the convey- ance.* But a foreclosure of the father's mortgage after the son's majority, he being a party and making no defense, will bar the son and all claiming under him." FAILUBB OF CONSIDEEATION FOE A PUECHASB-MONET MOETGAGB. I 858. Prior incumbrances on the property. — In the absence of fraud, a party who has purchased real estate, tod received a deed for it containing a covenant that it is free from any incumbrance, and has subsequently paid off and discharged an incumbrance, may set off what has been paid by him against the amount due on any mortgage for the purchase money.' In order to avail himself of such defense, however, he would be bound to prove either that what had been paid by him was actually due, or that he had given notice to his vendor requiring that such vendor should pay off such incumbrance within a limited time, or that otherwise the purchaser would pay a specified amount. Soriie of the authorities lay down the rule that the pur- ' Loomer v. Wheelright, 3 Sandf. Ch." Bool v. Mix, 17 Wend. 132 ; Eagle Ins. 135 ; Flynn v. Powers, 35 How. 279 ; s. Co. v. Lent, i Edw. 301 ; Tucker v. c. afB'd 36 How. 289. Moreland, 10 Peters, 58 ; Buchanan v. 'Walsh V. Powers, 43 N. Y. 23, re- Griggs, 18 Neb. 121. versing Flynn v. Powers, 35 How. 279 ; ^Jackson v. Losee, 4 Sand. Ch. 407 ; 36 How. 289. Zeiter v. Bowman, 6 Barb. 133 ; Cleve- ' Buchanan v. Griggs, 18 Neb. 121 ; land v. Boerum, 3 Abb. Pr. 294; Ostrom llicGan V. Marshall, 7 Humph. 121 ; v. McCann, 21 How. 431 ; McPherson E^le Ins. Co. v. Lent, 5 Paige, 635. v. Housel, 13 N. J. Eq. 301 ; Buchanan ■•Jackson v. Burchin, 14 Johns. 124; v. Griggs, 18 Neb. 121. Jackson v. Carpenter, 11 Johns. 539; " Coy v. Downie, 14 Fla. 544. § 859. J DEFEKSES IN ACTIONS TO FORECLOSE. 553 chaser may set off or recover the amount paid without any qualifica- tion ; but it seems to be reasonable that a vendor who has been innocent of any fraud sliould have an opportunity to set himself right before he is obliged to pay or allow more than the amount actually due.' Where in an action to foreclose a purchase-money mortgage it was made to appear that the land was incumbered with prior judgment liens to an amount exceeding the balance due on the mortgage, there being covenants against such judgments in the conveyance to the mortgagor, the mortgagor was held entitled to an injunction against the collection of the mortgage debt until the mortgagee should reduce the incumbrance to a sum not exceeding the unpaid purchase money.' So, in a suit to foreclose a mortgage for purchase money, the mort- gagor and grantee in the conveyance is entitled, by virtue of the covenants against incumbrances therein, to have the amount of tax hens outstanding on the mortgaged property deducted from the amount due on the mortgage and a decree taken only for the bal- ance.' And the assignee of such mortgage holds it subject to the same equity.' § 859. Defect of title in the conveyance to mortgagor. — It is well settled that where the incumbrance has not been paid off by the purchaser of the land, and he has remained in quiet and peaceable possession of the premises, he cannot, in the absence of fraud, have relief against the contract to pay the purchase money or any part of it, on the ground of defect of title." The reason is that the incum- brance may not, if let alone, ever be asserted against the purchaser^ as it may be paid off or satisfied in some other way ; and then it would be inequitable that any part of the purchase money should be retained." ' Lee V. Porter, 5 Johns. Ch. 268. 5 Id. 29 ; Denston v. Morris, 2 Edw. 37 ; "Arnold v. Curl, 18 Ind. 339. Leggett v. McCarty, 3 Id. 124; Eagle ' National Bank v. Pinner, 25 N. J. Fire Ins. Co. v. Lent, i Id. 301, affi'd 6 Eq. 495; White V. Stretch, 22 N. J. Eq.76. Paige, 635 ; Bales v. Delavan, 5 Paige, * National Bank v. Pinner, supra. 300 ; Banks v. Walker, 2 Sandf. Ch. 344 ; ^ Ferrer v. Pyne, 81 N. Y. 281 ; Park- Talmadge v. Wallis, 25 Wend. 107 ; inson v. Jacobson, 13 Hun, 317 ; s. c. 74 Edwards v. Bodine, 26 Id. 109 ; Burke N. Y. 88 ; York v. Allen, 30 N. Y. 104 ; v. Nichols, 21 How. 459 ; s. c. 34 Barb. Curtis V. Bush, 39 Barb. 661 ; Sandford 430 ; s. c. afii'd 2 Keyes, 670 ; Hill v. V. Travers, 7 Bosw. 498 ; Bumpus v. Butler, 6 Ohio St. 207 ; Stahl v. Ham- Platner, i Johns. Ch. 218 ; Abbott v. montree, 72 Ind. 103. Allen, 2 Id. 519 ; Gotiverneur v. Elmen- * Strong, J., in Grant v. Tallman, 20 dorf, 5 Id. 79 ; Chesterman v. Gardner, N. Y. 191. 654 MOKTGAGES OF EEAL PEOPERTY. [§§ 860-862. An adverse tax title cannot be pleaded as a defense to a purchase- money mortgage where no claim under it has been made against the mortgagor.' A grantee of land under a warranty deed purporting to convey in fee simple, whose possession has not been disturbed, cannot resist foreclosure of purchase-money mortgage given by him on the ground that the grantor had, in fact, but a life estate, no fraud being shown." § 860. Mortgage on one parcel of land as consideration for another, the title of which fails. — ^Where a mortgage is given upon one parcel of land as security for the purchase price of another con- veyed with warranty and the grantor had no title to the latter parcel, the consideration for the mortgage fails, .and the same rules will apply as in other cases of failure of consideration, and the mortgagor may be accorded a deduction, or may be entirely relieved, as justice re- quires.' But where a purchase of three tracts of land was made for a round sum and the purchase price was secured by mortgage on only one of them conveyed by a separate deed, it was held that the pur- chaser could not set up as a defense that the title to the lots not in- cluded in the mortgage had failed.* § 861. Consideration of purchase-money mortgage fails upon eviction. — Upon an eviction under paramount title the consideration for a note or bond given by a purchaser for the purchase money, the title to the land, wholly fails, and covenants of title in the deed cannot be regarded as a consideration which will support a promise to pay. This doctrine is in accordance with the general current of authority.* In Rice v. Oodda/rd (14 Pick. 293), the court say : " The promise is not made for a promise, but for the land ; the moving cause is the land ; and, if that fails to pass, the promise is a mere nudum pactum "y and this statement has been approved by our Court of Appeals.' § 863. What constitutes an eviction. — It was at one time held that, to constitute ah eviction which would give a defense upon the ■ Smith V. Kiting, 37 Mich. 148. ' Knapp v. Lee, 3 Pick. 452 ; Rice v. ' Clementson, Ex'r, v. Streeter, 59 Goddard, 14 Id. 293 ; Trask v. Vincon, Wis. 429 ; Oakes v. Estate of Buckley, 20 Id. 105 ; Rawle on Covenants for 49 Wis. 592 ; Noonan v. Ilsey, 22 Wis. Title, 607. 27 ; Randlet v. Herren, 20 N. H. 102 ; ° Per Andrews, J., in Dunning v. Moyer v. Shoemaker, 5 Barb. 322. Leavitt, 85 N. Y. 30, rev'g s. c. sub nam. * Smith V. Newton, 38 111. 230. Dunning v. Fisher, 20 Hun, 178. • Fisk V. Duncan, 83 Pa. St. 196. § 863.] DEr^ENSES IN ACTIONS TO FOEECLOSE. 555 covenants contained in the conveyance which constituted the consid- eration for the mortgage, there must be a disturbance of the posses- sion by legal process. Such is not now the rule ; possession without a struggle to maintain it may be surrendered to one having a para- mount title, with the same right to resort to the grantor's covenants of warranty that would have been brought about by an eviction under process of law,' though in such case the person evicted must stand ready to show that the title to which he surrendered was a good one.' The surrender of property under and in pursuance of a judgment directing the delivery of possession is an eviction. A forcible dispos- session or an actual physical expulsion is not necessary to constitute it," and the peaceable yielding of possession in obedience to a judg- ment which the mortgagor is unable to resist shows a failure of the consideration for which the bond was given. He may, indeed, be evicted without suffering any actual change of possession, as by a purchase of the property under the foreclosure of a mortgage which was a prior lien, or by acquiring a paramount title.' A constructive eviction exists where the covenantee has compul- sorily purchased or taken a lien under the paramount title without any actual change of possession.' § 863. Where mortgagor is unable to obtain possession. — The fact that there was an adverse claim being pressed at law would afford no defense where there had been no absolute disturbance of possession;" but if the niortgagor was prevented by the adverse claimants from getting possession, there being a failure of title, this would constitute a defense so far as the action sought to charge the mortgagor personally with the debt.' And in the absence both of fraud and of covenants for title, if the mortgagor derives no ben- efit from the purchase, equity would require that he should be charged with no deficiency.' If there be an entire failure of title in the conveyance to the mort- ' Per Gray, Com., in Cowdrey V. Coit, Whitney v. Dinsmore, 6 Cush. 124; 44 N. Y. 382, 392 ; Greenvault v. Davis, Loomis v. Bedell, 11 N. H. 74. 4 Hill, 643; Simers v. Saltus, 3 Den. « Piatt v. Gilchrist, 3 Sandf. 118; Banks 214 ; Curtis v. Bush, 39 Barb. 661. v. Walker, 2 Sandf. Ch. 344 ; s. c. affi'd ' York V. Allen, 30 N. Y. 104. 3 Barb. Ch. 438 ; Miller v. Avery, 2 ' Dyett v. Pendleton, 8 Cow. 727. Barb. Ch. 582. Contra, Johnson v. Gere, * Cowdrey v. Coit, 44 N. Y. 382. 2 Johns. Ch. 546. » Tucker v. Cooney, 34 Hun, 227, 231; ' Withers v. Powers, 2 Sandf. Ch. 350, Brown v. Dickerson, 12 Penna. St. 372 ; n. ; Shattuck v. Lamb, 65 N. Y. 500. ° Sandford v. Travers, 40 N. Y. 140. 556 MOETGAGES OF REAL PEOPEETr. [§§ 864-865. gagor, and if he is unable to obtain possession under it, be will be relieved from the payment of the consideration, even in the absence of covenants of title, on the ground of the failure of consideration ;' but if there be no fraud, the purchaser cannot have any relief if he acquires even so much as possession under the purchase." § 864. Foreclosure ordered without judgment for deficiency. — The fact that there may be a judgment against the mortgagor for a deficiency does not enable him to defend against the foreclosure because of a failure of title in a purchase-money mortgage, he being in undisturbed possession ;' but it does not follow that the mortgagor should be held for deficiency, and the court has in such a case ordered a foreclosure and sale, without any judgment for deficiency, and with leave to the complainant to sue on the bond.' § 865. Fraud practiced on mortgagor. — The case of fraud is an exception, and if the purchaser was imposed upon by any in- tentional misrepresentation or concealment, he may have redress in equity, in addition to and beyond his covenants.' A mortgagor is entitled, in a suit by the mortgagee on a purchase- money mortgage, to set up a counter-claim for damages by reason of the fraud of the mortgagee in concealing from him material facts as to the situation ^nd extent of the premises.' But a fraudulent mis- representation does not invalidate tlie mortgage for its whole amount if there is any value at all in the property, and the property must first be restored, or a reconveyance tendered, before the mortgage can be rescinded.' The representations must be as to facts, and a misrepresentation merely as to the value of the property will not be sufficient.' Where a purchaser was induced by false representations to accept a deed of property to which his grantor had no title, and to assume ' Banks v. Walker, 2 Sandf. Ch. 344 ; v. Corbin, 64 Cal. 197 ; Shorb v. Beau- s. c. affi'd 3 Barb. Ch. 438 ; Shattuck v. dry, 56 Cal. 446. Lamb, 65 N. Y. 500. ' Pierce v. Tiersch, 40 Ohio St. 168 ; 'Abbott V. Allen, 2 Johns. Ch. 519. Allen v. Shackelton, 15 Ohio St. 145; ^ Edwards v. Bodine, 26 Wend. log ; Baughman v. Gould, 45 Mich. 481; Bur- Davison v. De Freest, 3 Sandf. Ch. chard v. Fraser, 23 Mich. 224; Dayton 456. V. Melick, 32 N. J. Eq. 570. * Withers v. Morrell, 3 Edw. 560. ' Mattair v. Card, 18 Fla. 761 ; San- " Abbott V. Allen, 2 Johns. Ch. 519 ; born v. Osgood, 16 N. H. 112. Belknap v. Sealey, 2 Duer, 570 ; Cornell ' Sanborn v. Osgood, supra. §§ 866-867.] DEFEKSES IN ACTIONS TO EOEECLOSE. 557 a mortgage thereon, this fact was held to constitute a defense against the mortgagee to the covenant to assume.' It has been held that a deduction from a purchase-money mortgage on foreclosure, in favor of the vendee of the land, on the ground of a misstatement of the number of acres, can only be made where the mortgagee and such vendee are privies in contract, and that such de- duction will not be made in favor of on foreclosure by A, where A sold to B, misstating the number of acres, taking the mortgage for part of the consideration, and B sold with similar misstatements to C, who assumed payment of the mortgage." §866. Mutual mistake as to title of grantor. — In a case in which the vendors, under a misapprehension of their legal rights, sold and received part payment for a lot which was already dedicated to the public, and which, for that reason, was worth nothing to the own- ers, or those whose interests they represented in the transaction ; and where the purchaser, relying upon the information of the adverse party, purchased and in part paid for a lot which was, in fact, of no value either to him or to the vendors, it was held to be just and equit- able, after the purchaser had been evicted by the opening of a street across the lot, to decree a discharge of the bond and mortgage, and a return of the purchase money which had been paid toward the lot under such a misapprehension of the facts.' § 867. Mistake as to quantity of land conveyed. — But where lands are sold, and both grantor and grantee are mistaken as to the number of acres conveyed, and the grantee executes a mortgage on such lands for the purchase money, it will not be any defense to an action to foreclose the mortgage to show that there was considerably less land than was supposed, if there was no fraud or misrepresentation by the grantor.* An abatement from the purchase-money mortgage will be allowed if, by mutual mistake, less land was conveyed than was intended, there being an error in the boundary line as described in the deed.° 5ut in the absence of fraud or of gross mistake in the quantity, no allowance will be made merely because, at the end of a particular de- scription, the quantity of land conveyed is overstated.' ' Benedict v. Hunt, 33 Iowa, 27. Clark v. Davis, 32 N. J. Eq. 530 ; Cour- ' Davis V. Clark, 33 N. J. Eq. 579. sen v. Canfield, 6 C. E. Green (N. J.) 'Ciiamplinv. Laytin, 6 Paige, 189 ; s. 92; Tichenor v.Dodd,3 Gr. Ch.{N.J.)454. C. affi'd 18 Wend. 407. " Nelson v. Hall, 60 N. H. 274. * Northrop v. Sumney, 27 Barb. 196; 'Melick v. Dayton, 34 N. J. Eq. 245. 558 MOETaAGES OF REAL PEOPESTY. [§§ 868-869. § 868. Agreement to protect mortgagor against prior claims. — Where a mortgage for purchase money contained a clause to the effect that no part of the mortgage debt was to be payable until all incumbrances had been removed from the mortgaged premises, and it appeared that certain taxes assessed against the land before the exe- cution of the mortgage remained unpaid, it was held that no action for the foreclosure of the mortgage would lie until such taxes were fully discharged.' The same rule has been declared where a stipulation executed with the mortgage required that it should not be enforced until a quitclaim of an outstanding title had been obtained." § 869. Remedies of mortgagor. — It is manifestly just not to per- mit the maker of a purchase-money mortgage to resist the enforce- ment of the lien. He should either pay as he has agreed or permit the sale of the security in order that payment may be made out of its proceeds. And if he continues in the possession and enjoyment of the property he should not be allowed to refuse payment of the stipulated price for the land merely because of adverse claims which may never be enforced.' In cases of fraud, one remedy of the mortgagor is to allege dam- ages for such fraud, and to recoup them by way of counter-claim.' Another remedy is to ask to have the whole transaction set aside, and this would of necessity involve a surrender of all claim to the land.' Where there is no fraud, but there are covenants as to title, the remedy of the mortgagor is to be found in reliance upon those cove- nants. If the defect in the title is because of liens, the grantor should be asked to discharge them, and if he fails to do so, the mort- gagor may pay them, and, after such payment, he may assert it as a counter-claim on the bond and as a proper reduction of the amount which he ought to pay for the land." If the defect is one of title, and extends only to a portion of the land, this constitutes a breach of the covenants of seizin, if not also of the covenant of warranty,' and a counter-claim for damages for such breach would, under our system of practice, be proper in the action to foreclose. ' Stewart v. Clark, 8 Kans. 2io. 2 Johns. Ch. 519 ; Ludington v. Slauson, ' Ryerson v. Willis, 81 N. Y. 277. 6 J. & S. 81. ' Grant v. Tallman, 20 N. Y. 191. ' Ferrer v. Pyne, 81 N. Y. 281. * Aiken v. Morris, 2 Barb. Ch. 140 ; • Lee v. Porter, 5 Johns. Ch. 268. Grant v. Tallman, 20 N. Y. igi ; La- ' Talmadge v. Wallis, 25 Wend. 107 ; throp V. Godfrey, 6 N. Y. Sup. (T. & C.) Rice v. Goddard, 14 Pick. 293 ; Latham 96 ; s. c. 3 Hun, 739 ; Abbott v. Allen, v. McCann, 2 Neb. 276. §§ 870-872. J COUNTER-CLAIMS IN FORECLOSURE CASES. 559 COTJNTEE-CIxAIMS IN FOEECLOSUEE OASES. § 870. Counter-claim on contract. — An action to enforce a mort- gage, although denominated an action for the foreclosure of a mort> gage, is in law and in fact an action for the recovery of the amount owing on the obligation of the mortgagor, or other person liable for the debt ; first, by an order for the sale of the premises mortgaged for that purpose, and the application of the avails of the sale to that purpose, and then for a judgment against him for the deficiency. It is not only an action against the mortgagor upon his contract to pay the amount specified in his bond, to which an ofliset might have been pleaded before the Code," but one in which under the Code a several judgment may be had as between the plaintiff and the person liable for the debt, and hence is subject to a counter-claim of any other cause of action arising also on contract which the person so liable has against the plaintifE at the time of the commencement of the action.'' § 871. Who may set up counter-claim. — A counter-claim when established must, in some way, qualify or defeat the judgment to which a plaintifiE is otherwise entitled. In a foreclosure suit a de- fendant who is personally liable for the debt, or whose land is bound for the lien, may properly introduce an offset to reduce or extinguish the claim ;' but where his personal liability is not in question, and where he disclaims all interest in the mortgaged premises, he cannot demand a judgment against the plaintiff on a note, a bond, or a cov- enant.* It has also been said that, where the defendant is not liable for the debt, his right to a counter-claim is limited to matters arising out of the subject of the action ;" but this would not apply where the defendant owning the equity desired to set up a claim which he had against the plaintiff, in order that his demand might offset a portion of the debt charged upon his estate." § 872. Requisites of counter-claim. — In order to be permissible under the Code, a counter-claim must be one existing in favor of a ' 2 R. S., § I, sub. I. 92 N. C. 488 ; Goodman v. Keney, 49 ' Code, §§ 501, 502 ; National Fire Conn. 563. Ins. Co. V. McKay, 21 N. Y. 191, ig6 ; ^ Lathrop v. Godfrey, 3 Hun, 739: s. c. Hunt V. Chapman, 51 N. Y. 555 ; Bath- 6 N. Y. Sup. (T. & C.) 96. gate V. Haskin, 59 N. Y. 533 ; Chapman * National Fire Ins. Co. v. McKay, 21 V. Robertson, 6 Paige, 627 ; Holden v. N. Y. 191. Gilbert, 7 Paige, 208 ; Harrison v. Bray, ' Agate v. King, ]7 Abb. 159. ' Bathgate v. Haskin, 59 N. Y. 533. 560 MORTGAGES OP REAL PEOPEETY. [§ 873.. defendant and against a plaintiff, between whom a several judgment might be had in the action." Where the debt is evidenced by the joint bond of two of the defendants, one of whom is as between themselves a surety for the debt, and the mortgaged premises being the property of the principal debtor, a claim due from the plaintifi to the principal debtor may be used to offset the amount due upon the mortgage." In such a case the fact that one of the obligors was surety for the other may be shown by. extrinsic evidence, and in equity this can always be done to let in a defense or to establish a right founded upon that relation.' The several judgment which the statute requires may be had, may be a judgment for a part of the re- lief asked for, as to extinguish the right of one of the defendants in the land ; that a joint personal judgment may also be given does not exclude the allowance of the counter-claim." § 873. Counter-claims for damages. — There can be no doubt that, if the mortgagee be guilty of a fraud whereby the mortgagor is induced to purchase a defective title and to pay for it" with a mort- gage, the mortgagor may recoup in the foreclosure suit to the extent, of his actual damage, and if that shall equal or exceed the amount of - the mortgage, it will constitute an entire defense." If the mortgage be given for a portion of the purchase money, the grantee who has assumed the payment of it, may interpose a cause of action for damages for false representations as to the character and- convenience of the property made to the mortgagor to induce him to . make the purchase, as a counter-claim; and he may also be allowed, to show that an assignment of the bond and mortgage from the mort- gagee was only colorable, and that the mortgagee was still the equit- able owner." If a mortgage be made to secure future advances under an agree- ment by the mortgagee to make the advances, and only a portion of the money is advanced, the mortgage is a lien only to the extent of ' Code of Civ. Pro., § 501. ' Grant v. Tallman, 20 N. Y. 191; La- « Bathgate v. Haskin, 59 N. Y. 533 ; throp v. Godfrey, 6 N. Y. Sup. (T. & C.) Holbrook V. The Receivers of the Amer- 96; s. c. 3 Hun, 739; Abbott v. Allen, lean Fire Ins. Co., 6 Paige, 220; Ex 2 Johns. Ch. 519 ; Ludington v. Slauson, parte Hanson, 12 Ves. 346. 6 J. & S. (38 N. Y. Super.) 8i ; Parker » Bathgate v. Haskin, 59 N. Y. 533 ; ^v. Hartt, 32 N. J. Eq. 225. Artcher v. Douglass, 5 Den. 509 ; Barry « Lathrop v. Godfrey, 3 Hun, 739; s. c. V. Ransom, 12 N. Y. 466. 6 N. Y. Sup. (T. & C.) 96 ; contra. Reed * Bathgate v. Haskin, 59 N. Y. 533. v. Latson, 15 Barb. 9. §§ 874r-875.] COFNTEK-CLAIMS IN FOEBCLOSTJRE CASES. 561 the amount actually advanced, and, thougli the mortgagor be injured seriously by failing to receive the balance of the money, he can re- cover only nominal damages by way of counter-claim.' But it is said that damages sustained by the mortgagee's refusal to release portions of the premises on sales by the mortgagor, may be matter of equit- able set-off." § 874. What are proper counter-claims. — The counter-claim must be due when the foreclosure is commenced, or when a subse- quent instalment grows due, and is attempted to be enforced in the action.' "Where there are several suits to foreclose different mortgages, the defendant cannot be compelled to elect in which he will set up his counter-claim.' An answer which alleged, in substance, that the mortgage sought to be foreclosed was executed as part of a transaction by which $38,000 was to be loaned, and that the mortgage and a conveyance of another parcel of land had been given as security therefor, and, asking for a reconveyance upon payment of the whole sum, has been held a proper counter-claim." "Where an answer sets up facts tending to show that the bond and mortgage are void for usury, and demands judgment that they be de- livered up and cancelled without explicitly stating that such facts are alleged as a counter-claim, this does not constitute a counter-claim, but merely a defense to the action, and no reply thereto is necessary.' So, when facts are alleged in an answer tending to show that a mortgage sought to be foreclosed has no validity for any reason, such facts do not constitute a counter-claim which call for a reply.' § 875. Litigation between defendants. — By section 521 of the Code of Civil Procedure, it is provided as follows : " "Where the judg- ment may determine the ultimate rights of two or more defendants, as between themselves, a defendant who requires such a determina- tion must demand it in his answer, and must, at least twenty days be- fore the trial, serve a copy of his answer upon the attorney for each • Dart V. McAdam, 27 Barb. 187. ler, 12 Hun, 247, affi'd 75 N. Y. 511 ; ' Warner v. Gouverneur, i Barb. 36. JBarthet v. Elias, 2 Abb. N. C. 364. ' Holden v. Gilbert, 7 Paige, 208. ' Caryl v. Williams, 7 Lans. 416 ; * McLane v. Geer, 3 Edw. Ch. 245. Bates v. Rosekrans, 37 N. Y. 409; Agate ' Bernheimer v. Willis, 11 Hun, i6. v. King, 17 Abb. 159; Vassearv. Living. ' Equitable Life Assurance Qo. v. Cuy- ston, 13 N. Y. 249. 36 562 MOBTGAGES OF KEAL PEOPEETr. [§§ 876-877. of the defendants to be affected by the determination, and personally, or as the court or judge may direct, upon defendants so to be affected who have not duly appeared therein by attorney. The controversy between the defendants shall not delay a judgment to which the plaintiff is entitled unless the court otherwise directs." ' § 876. Substitute for cross-bill. — This provision is a substitute for a cross-bill under the practice in equity, which prevailed before the Code, when rights were required to be adjusted between the de- fendants. As an example of the use of a cross-bill, it was held before the Code to be proper for a defendant to set up and maintain by a cross-bill, an equitable right to have another security in the hands of the plaintiff first enforced, before resorting to a sale of the mortgaged premises.'' If the necessary parties were before the court the judg- ment might do equity in the premises, as for example by directing the order in which different parcels of land may be sold ; but, if other parties were necessary, the cross-bill could not be used to convert the original action into a distinct suit relative to other lands, or become the foundation of a decree concerning matters not embraced in the original suit.' But there might be a decree in such a case that, after satisfying the complainant's claims out of the mortgaged premises, the defendant should be subrogated to the rights of the complainant under the collateral security.* It is believed that under the Code the same relief could be obtained in proper cases by means of the pro- vision now being considered.' § 877. What may be litigated between defendants. — It is not every matter of difference between the defendants in an action to foreclose a mortgage that can be litigated in the way indicated by section 521 of the Code, and it is doubtful whether it was intended to go further than the former practice in chancery, where it was re- quired that the cross-bill should be within the proper scope and object of the action as exhibited in the complaint. The relief sought by the cross-bill could not be obtained unless it raised questions the deter- mination of which was essential to the accomplishment of the very object sought by the bill itself.' • Code of Civ. Pro. g 521, as am'd by ' Currie v. Cowles, 6 Bosw. 453 ; Laws of 1884, ch. 400. * Cramer v. Benton, 4 Lans. 2gi; Gleason ' King V. McVicker, 3 Sandf. Ch. ig2. v. Moen, 2 Duer, 639 ; Leavenworth v. ' Galatian v. Erwin, Hopk. 48, affi'd 8 Packer, 52 Barb. 132. Cow. 361. « Tracy v. N. Y. Steam Faucet Co., i * King V. McVicker, 3 Sandf. Ch. 192. E. D. Smith, 355 ; Smart v. Bement, 4 § 877.] COTJNTEK-CLAIMS IN FOEECLOSUKE CASES. 663 A defendant in an action to foreclose cannot call upon the court to determine between him and another defendant jointly liable with him as to which is the principal and which is the surety." And one de- fendant owning an undivided interest in the equity of redemption cannot by means of a cross-bill, or of an answer praying for afBrma- tive relief against his co-defendants, procure a judgment for the par- tition of the property in an action to foreclose." On a like principle a mortgagee cannot be delayed in his foreclosure to permit two defend- ants to litigate between each other as to whether the specific per- formance of an alleged contract of sale of the equity of redemption ought to be enforced.' So a mortgagor, joined as a defendant in an action to foreclose with another defendant claiming title to the equity of redemption under a sheriff's deed after a sale upon execution, can- not litigate in that action as to the validity of such sheriff's deed.* The same principle will prevent the owner of a second mortgage, who is a defendant in an action to foreclose a first mortgage, from obtaining in that action a judgment for the satisfaction of his lien out of the proceeds of the property and a judgment for deficiency against the mortgagor." And in general, defendants cannot settle their rights as between themselves until after the entry of judgment, unless those rights grow directly out of the claim made by the plaintiff and consist in qualify- ing the rights of the plaintiff, so as to make the remedies of the plaintiff apply with more or less rigor against the defendants respect- ively." However proper the answer interposed by way of cross-bill may be, it will not aid the defendant interposing it, unless it has been duly served upon his co-defendants.^ Abb. Ct. App. Dec. 253, 257 ; Kay v. ' Handly v. Munsell, 109 111. 362. Whittaker, 44 N. Y. 565, 576 ; Norbury * Tutwiler v. Dunlap, 71 Ala. 126. V. Seeley, 4 How. 73 ; Woodworth v. ' Sebring v. Conkling, 32 N. J. Eq. 24 ; Bellows, 4 How. 24 ; Mechanics' and Galatin v. Erwin, Hopk. 48 ; Griffith v. Traders' Bank v. Roberts, i Abb. Pr. Merritt, 19 N. Y. 529. 381 ; Stephens v. Hall, 2 Robt. 674. * Newman v. Dickson, i Abb. N. C. ' Hovenden v. Knott, 12 Or. 267. 307 ; Miller v. Case, Clark. Ch. 395 ; ' Mathews v. Lindsay, 20 Fla. 962 ; Hovenden v. Knott, 7 Pacif. Rep. (Oreg.) Buckmaster v. KeJIy, 15 Fla. 199 ; Mat- 30. tair V. Payne, 15 Fla. 685. ' Meigs v. Willis, 66 How. 466. 664 MORTGAGES OP EEAL PEOPEETY. [§§ 878-879, WHEN A GEANTEE MAT DEFEND WHO HAS TAKEN SITBJEOT TO THE MOETGAGE. §878. Conveyance subject to mortgage void for usury. — When, in a conveyance of land, it is described as being subject to a mortgage, the question may be raised as to whether, and to what ex- tent, this will limit the grantee in questioning the validity or the amount due on said mortgage. It is settled that such a clause in' the deed operates as a waiver of the defense of usury, and as a provision made by the mortgagor for the payment of the usurious debt, which Ke is not suffered at any time afterward to question,' such grantee cannot compel the apphcation of a usurious bonus paid by his grantor, so as thereby to procure a reduction of the mortgage." But where the mortgagor and second mortgagee have a right to the defense of usury, against a first mortgage, a purchaser under the foreclosure of the second mortgage is not precluded from making such defense by a clause in the deed of the sheriff, reciting that the property is subject to the prior lien.' §879. General rule where conveyance is subject to mort- gage. — If the equity of redemption of mortgaged premises is con- veyed by a deed in which the mortgage is recognized and the title is declared to be subject to it, the general rule is that the purchaser is thereby precluded from urging any defense against the mortgage,'' even though made without consideration,' or defectively executed." And this rule also applies as against a second mortgagee, if the prior mortgagee is protected by such a clause in his mortgage.'' ' Hartley v. Harrison, 24 N. Y. 170 ; ' Root v. Wright, 21 Hun, 344. Smith V. Cross, 16 Hun, 487 ; Pinnell ' Pinneli v. Boyd, 33 N. J. Eq. V. Boyd, 33 N. J. Eq. igo ; Jones v. In- 600. surance Co., 40 Ohio St. 583 ; Cramer * Smith v. Graham, 34 Mich. 302 ; Lo- V. Lepper, 26 Ohio St. 59 ; Loomis v. sey v. Bond, 94 Ind. 67 ; Hill v. Minor, Eaton, 32 Conn. 550 ; Austin v. Chitten- 79 Ind. 48 ; Freeman v. Auld, 44 N. Y. den, 33 Vt. 553; Studabacker v. Mar- 50; Holden v. Rison &Co., 77Ala. 515 ; quardt, 55 Ind. 341 ; Basluns v. Calhoun, McDonald v. Mobile Life Ins. Co., 65 45 Ala. 382. If the mortgagor afterward Ala. 358; D. & H. Canal Co. v. Bon- repurchases the property, he can set up nell, 46 Conn. 9. usury. Knickerbocker Life Ins. Co. v. ' Barker v. International Bank of Ghi- Nelson, 78 N. Y. 153 ; 7 Abb. N. C. 170 ; cago, 80 111. 96. s. C. 13 Hun, 321 ; Bennett v. Bates, 94 'Grerther v. Alexander, 15 Iowa, 470; N. Y. 354, 37 r. See as to force and ef- Riley v. Rice, 40 Ohio St. 441. feet of a "subject clause" in a deed, 'Bronson v. La Crosse & Milwaukee Collins V. Rowe, i Abb. N. C. 97 n. R.R. Co., 2 Wall. 283. See also ante, %% 652 to 656. § 880. J COUNTER-CLAIMS IN FORECLOSURE CASES. 565 This principle has been applied to a case where the recital was er- roneous in fact, the prior mortgage being on an entirely different parcel of real estate, and the grantee's property was held bound by it.' And where a mortgagor died, and the purchaser at the administrator's sale for the payment of debts, took the property " subject to mort- gage and widow's dower," it was held that the widow might have dower assigned on making ^t-o tcmio redemption of the mortgage, al- though she had released her dower in the mortgage.' Where a conveyance of mortgaged, premises purports to convey the whole estate, and is not, by its terms, subject to the mortgage, and no deduction from the price is made because of the mortgage, the grantee may have all defenses against the mortgage which were available to the mortgagor.' But not if the fuU amount of the mort- gage was credited to him by the mortgagor.* § 880. Distinctions to be observed. — In Russell v. Kirmey (1 Sandf . Ch. 34), it was held that such a clause in a deed operates as an admission of the existence of the mortgage, and as subjecting the grantee to its force exactly as it is in truth. If it is a mortgage with a condition or defeasance contained in another writing, or if it is partly paid, the grantee is entitled to the benefit of the defeasance or the payment, and his admission by accepting the deed is not incon- sistent with his availing himself of such defense. In other words, the clause merely operates to qualify the covenants of the grantor as to the title. In Jewell v. Ha/rrmgton (19 Wend. 471), the deed conveyed the premises " subject, nevertheless, to the right of dower of Chloe Jew- ell, who was the widow of Samuel Nash, deceased, who was the for- mer proprietor of the above described premises," and the court held that the grantee was not estopped from contesting the plaintiff's claim for dower. In Ha/rUey v. Tatham (26 How. 158 ; s. c. 1 Kobt. 246),' Jewell v. Hwrrington {supra) was cited and approved, and the principle of the case was applied to the defense of part pay- ment as against a mortgage recited in a deed under which the defend- ant claimed. It was not necessary to the decision, however, for in Ha/rtley v. Tatham the part payment had been made subsequent to ' Sweetzer v. Jones, 35 Vt. 317. * Fuller v. Hunt, 48 Iowa, 163. ' Kenyon v. Segar, 14 R. I. 490. ' Hartley v. Tatham, affi'd i Keyes, ' Bennett v. Keehn, 57 Wis. 582. 222 ; s. c. 2 Abb. App. Dec. 333. 666 MOETGAGES OF EEAL PEOPEBTT. [§ 881. the acceptance of the conveyance in which the lien of the mortgage was recognized. In Lester v. Barron (40 Barb. 297), a deed contained, a clause to the effect that the grantee assumed all liability in relation to a party wall, and it was held that the grantee merely assumed such legal lia- bility as existed against his grantor in respect to such wall. In Reed v. Zaison (15 Barb. 9), it was held, upon the other hand, tiiat one who purchases land expressly subject to a mortgage, cannot set up against the mortgage that, prior to the sale, it had been extin- guished by a merger. In Freeman v. Auld (44 N. Y. 50, reversing 8. c. 25 How. 327 ; 43 Barb. 14 ; 37 Barb. 587), the defendants had had the full amount of the mortgage deducted from their purchase money, and they took expressly subject to it. The court said that the grantors had the right, which no purchaser from them could lawfully gainsay, to pay or provide for the payment of the full amount speci- fied in the mortgage, and that the grantee taking subject to the mort- gage must pay it if he has agreed to do so, and if not, he must allow the lands conveyed subject to it to be applied to its payment. The same rule is affirmed in Ritter v. PhiUvps (53 N. Y. 586).' In Johnson v. Parmely (14 Hun, 398), the money due on a mort- gage was paid by a person not liable thereon at the request of the mortgagor, and a receipt taken for its full payment. Thereafter the mortgagor conveyed the property subject to the mortgage, and it was held that this operated to recognize the mortgage as a subsisting lien, and that the grantee could not contend that it was paid. §881. Conveyances which permit defense by grantee. — If mortgaged land be conveyed by an instrument which transfers all of the interest of the mortgagor without specially designating the mort- gage security or affirming its validity, as by sale under an execution or upon the foreclosure of a junior incumbrance, the purchaser may . set up any defense to the mortgage which would have been available to the mortgagor.' Where a conveyance was made which contained the following clause : " Subject to a certain mortgage executed by the party of the first part to Thomas E. Allen for the sum of $15,000, bearing date May 10, 1876, if there shall be found anything owing or unpaid on ' See also Haile v. Nichols, i6 Hun, ' Nichols v. Hill, 6 N. Sup. (T. & C.) 37 ; Parkinson v. Sherman, 74 N. Y. 88 ; 335 ; s. c. less fully, sub nom. Nichols v. 30 Am. R. 268. Iremonger, 3 Hun, 609. § 882.] COUNTEE-OLAIMS IK FOEECLOSUEE OASES. 567 the same," it was held that the purchaser stood in the same condition as if he had purchased the premises subject to the mortgage as it was in truth, without regard to the amount of the purchase price, and a defense was sustained which largely diminished the amount claimed.' It was said that where a grantor conveys a limited right in his prop- erty while possessing the power of conveying a greater interest, it follows that such interest as is not thereby conveyed still remains in the grantor, and is capable of being subsequently transferred by him through a conveyance vesting his grantee with the title discharged of the obligation to pay invalid incumbrances." The cases which hold that a grantee of premises who obtains title thereto under a convey- ance making them subject to a mortgage cannot contest the validity of such mortgage, do so upon the theory that he labors under a disa- bility imposed upon him by his grantor, who has intentionally re- tained to himself the privity which enables a party to dispute the validity of an apparent lien upon the premises granted. There is no reason why the grantor does not possess the power to remove this disability by afterward conferring the right which by his prior con- veyance he simply withheld from his grantee.' A purchaser at an execution sale, " subject to whatever may be due upon the property by virtue of a certain mortgage," cannot allege that the mortgage is utterly void, though he is not precluded from inquiring as to what amount is due upon it.* § 882. Propositions reconciling the cases. — The following prop- ositions appear to reconcile the cases and to be sustained by reason and by authority : i 1. If the mortgage be without consideration, in whole or in part, as between the mortgagee and the mortgagor, the grantee of the mortgagor will not be precluded from defending against the mort- gage on the mere grovmd of an estoppel created by the subject clause in the deed. The reason of this is, that an estoppel is unavailing ex- cept as between the parties to the deed and their privies in blood or estate. To a stranger it is wholly unavailable.' 2. If the grantor is indebted on the mortgage in such a way that if ' Bennett v. Bates, 26 Hun, 364, affi'd ^ Per RuGER,Ch. J., in Bennett v.Bates, 94 N. Y. 354. 94 N. Y. 354, 371, affi'g 26 Hun, 364. •' Cope V. Wheeler, 41 N. Y. 311 ; * Conkling v. Secor Sewing Macliine Berdan v. Sedgwick, 44 N. Y. 626 ; Co., 55 How. 269. Knickerbocker Life Ins. Co. v. Nelson, ' Jackson v. Bradford, 4 Wend. 6ig ; 78 N. Y. 153, affi'g 13 Hun, 521. Jewell v. Harrington, 19 Wend. 471. 568 MORTGAGES OF REAL PBOPEETY. [§ 883. he paid it he could not afterward recover the money, as, for instance, if the debt he usurious or if it be barred by the statute of hmitations, the conveyance of the land subject to the lien shuts off any defense as effectually as payment would, and operates as an appropriation of the land to pay the debt. 3. It is competent for the grantor to create a lien upon the land in favor of any person, either with consideration as between him and Buch person or without any consideration whatever, and if it is part of his agreement with the grantee that this lien shall be paid, it is not competent for the grantee to question claims by the recognition of which, and in express subordination to which, he acquired his title. This is a question of agreement between the grantor and grantee, and is to be determined by the language of the conveyance, which is pre- sumed to show the agrieement between the parties, but which is sub- ject to correction by parol evidence of the real intention and bargain, in cases of fraud or mistake. DEFENSE OF DEFECT OF TITLE TO THE MORTGAGE. § 883. Invalid assignment. — If the nominal holder and owner of the mortgage has obtained title to it by practicing a fraud on the real owner, a defendant who has paid the real owner and received an acquittance from him may allege this fact as a complete defense.' So, also, a defendant may insist that an assignment of the mortgage security upon which the plaintiff bases his claim of title to it is abso- lutely void for want of power in the assignor to execute it ; as, for instance, in the cas^ of a corporation." And a defendant may show that the mortgage was made by him for a particular purpose, and that the assignment was a diversion from that purpose and unauthorized and fraudulent as against him.' A defendant who has some interest in the mortgage itseK may also allege facts concerning the assignment to entitle himself to a por- tion of the moneys to be collected on it, as that the assignment was by way of pledge or the like.* So, also, a defendant may attack an assignment as having been made for the purpose of shutting him out from a defense or to pre- vent him from asserting a proper counter-claim.' ' Hall V. Erwin, 6o Barb. 349 ; s. c. » Craver v. Wilson, 14 Abb. N. S. 57 N. Y. 643 ; 66 N. Y. 649. 374. » Johnson v. Bush, 3 Barb. Ch. 207 ; * De Witt v. Brisbane, 16 N. Y. 508. Talmage v. Pell, 7 N. Y. 328. ' Lathrop v. Godfrey, 3 Hun, 739 ; s. § 884.J COUNTEK-CLAIMS IN FORECLOSURE CASES. 569 It is permissible for a defendant to allege title to the bond and mortgage in a person other than the plaintiff. If that fact is estab- lished it will of necessity prevent a judgment in the plaintiff's favor.' § 884. Consideration for assignment is immaterial. But it does not lie in the mouth of a person, joined as a defendant to an ac- tion to foi-eclose a mortgage admitted to be vahd, to assail the consid- eration of a transfer of the security from the mortgagee to the plaintiff. If that transfer was voluntarily made by the mortgagor, it does not concern the defendant that its purpose was to defraud the creditors of the mortgagee or to evade the payment of taxes." The motives of a former owner of the mortgage in selling, or of the plaintiff in buying it, are not material, and the mortgagor has no concern with the consideration of the assignment. It is sufficient if the mortgage debt is due and has been transferred to and is owned by the plaintiff. He may have bought it from motives of malice toward the mortgagor, and solely with a view to sue upon it, and the former owner, from a like motive, may have transferred it without con- sideration, but this would not constitute a defense to the action. The mortgagor can only arrest the action by paying the amount due or tendering the same and bringing it into court.' c. 6 N. Y. Sup. (T. & C.) g6 ; contra, Co., 27 Hun, 200, overruling Drexell v. Reed v. Latson, 15 Barb. 9. Tyrrell, 15 Nev. 114. ' Fougera v. Meissen, 16 Hun, 237. ' Per curiam in Morris v. Tuthill, 72 ' Nichols V. Weed Sewing Machine N. Y, 575, CHAPTEE XXIV. BECEIVEES OF BENTS. WHEN §885. 886. 887. 8go. 891. 892. 893. 894. 895. A RECEIVER WILL BE APPOINTED. General principles. Statute provisions. Right to receiver depends upon equitable considerations. Solvency of mortgagor. Rule where mortgagee is in pos- session. The mortgage debt must be due in whole or in part. Inadequacy of security. Defense to application for re- ceiver. Where a corporation owns the equity of redemption. Who may be appointed receiver. When application for a receiver may be made. § S96. What rents may be reached by receiver. 897. Grantee of mortgagor delaying litigation. 898. Who entitled to rents collected by receiver. 899. Payment of taxes by receiver. 900. Disposition of the fund collected. 901. Stipulation pending motion for receiver. POWERS AND DDTIES OF THE RECEIVER. 902. Party to action appointed re- ceiver. 903. General duties of receiver. 904. Enforcing payment of rent to re- ceiver. 905. Actions by receiver. 906. Liability of receiver. 907. Compensation of receiver. WHEN A EECEIVEE WILL BE APPOINTED. § 885. General principles.— The right of entry by the mortgagee having been abolished, the mortgagor is, both at law and in equity, entitled to the complete enjoyment of the mortgaged premises and of their rents and profits until the debt is due, unless such rents are by a stipulation contained in the mortgage expressly pledged for the payment of the debt.' If no proceedings are taken for the appoint- ment of a receiver, his right to the rents continues until it has been divested by a foreclosure sale, and until the purchaser has become entitled to possession under the sherifi's deed.' ' Bank of Ogdensburgh v. Arnold, 5 Bartlett, 51 N. Y. 447 ; Argall v. Pitts, Paige, 38. 78 N. Y. 239; Lofsky v. Maujer, 3 Sandf. ''Astor V. Turner, II Paige, 436 ; Cla- Ch. 69; Howell v. Ripley, 10 Paige, son V. Corley, 5 Sandf. 447 ; Mitchell v. 43. § 886.] EECEIVEES OF RENTS. ■ 571 Where the security is insufficient, and the mortgagor or other per- son who is personally liable for the payment of the debt is insolvent, the mortgagee may apply for a receiver of the rents and profits of the mortgaged premises which have not yet been collected, and this relief will be granted unless the person in possession shall give secu- rity to account for such rents in case there shall be a deficiency.' § 886. Statute provisions. — The Court of Chancery exercised the power of appointing a receiver when there was an insufficient secu- rity, and there was no adequate remedy upon the bond, long after the act of 1828, which provided that no action of ejectment should thereafter be maintained by a mortgagee for the possession of the mortgaged premises." The Code of 1848 expressly authorized re- ceiverships, in certain specified cases, by section 244 ; and to these, subdivision 5 of that section added : " In such other cases as are now provided by law, or may be in accordance with the existing practice, except as otherwise provided in this act." Under this general pro- vision the power of appointing receivers in mortgage cases continued to be exercised. Section 713 of the Code of Civil Procedure takes the place of section 244 of the Code of 1848. The language of sec- tion 713 is not prohibitory nor exclusive, but permissive and declar- atory, and although it does not in terms re-enact subdivision 5 of section 244, an analogous provision is substantially included in the general terms of section 4 of the Code of Civil Procedure, which provides that each of the courts therein mentioned, including the Supreme Court, " shall continue to exercise the jurisdiction and pow- ers now vested in it by law according to the course and practice of the court, except as otherwise prescribed in tliis act." The power to appoint receivers in mortgage cases was inherent in the Court of Chancery before the Code of 1848.. 'It was continued. by that Code under subdivision 5 of section 244, and it is again reaffirmed by the general provision of section 4 of the Code of Civil Procedure, there being nothing to the contrary in that Code.' ' Sea Ins. Co. v. Stebbins, 8 Paige, Clark v. Binninger, 39 How. 363 ; Mil- 565 ; Howell v. Ripley, 10 Id. 43; Astor ler v. Bowles, 2 T. & C. 568 ; Main v. V. Turner, 11 Id. 436 ; Frelinghuysen v. Ginthert, 92 Ind. 180 ; Connelly v. Dick- Colden, 4 Id. 204 ; Shotwell v. Smith, 3 son, 76 Ind. 440. Edw. 588 ; Warner v. Gouverneur, i ' Post v. Dorr, 4 Edw. Ch. 412. Barb. 36; Syracuse Bank v. Tallman, ' HoUenbeck v. Donell, 94 N. Y. 343; 31 Jd. 201 ; Myers v. Estell, 48 Miss. 29 Hun, 94. 373 ; Smith v. Tiffany, 13 Hun, 671 ; 573 MOETGAGES OF REAL PEOPEETT. [§§ 887-888. § 887. Right to receiver depends upon equitable consider- ations. — The right to this relief does not result from the relations of the parties, but from equitable considerations alone. It is not a mat- ter of strict right, and each application is addressed to the sound discretion of the court.' A receiver will not be appointed where the property is of sufficient value to pay the debt,' nor, in general, if the mortgagor is solvent." In estimating the price which the property is hkely to produce on a sale, the amount of rents, fixing as they do its value as an investment, is, in populous cities especially, a fair test,* though much may depend upon other circumstances. The burden of proving inadequacy of security, and insolvency of the mortgagor, is on the applicant for the receiver.' A receiver may be appointed in an action brought by a vendor against his vendees to foreclose a contract for the sale of land upon the failure of the vendees to pay a balance due of the purchase money." § 888. Solvency of mortgagor. — The appointment of a receiver is made in order that the rents of the property which is pledged for the payment of the debt may not be received by an insolvent mort- gagor, leaving the mortgagee to suffer a loss from the delay in the proceedings necessary to determine the rights of the parties. Special cases might arise where the appointment of a receiver ought to be made, even though the mortgagor were solvent, as, for instance, if the rents were being collected by an insolvent grantee who had as- sumed the payment of the debt, or by a solvent person who had assumed no such personal liability, for the rights of all the parties are before the court, and the mortgagor is as much entitled to protection as the mortgagee.' A receiver may even be appointed on the appli- cation of the mortgagor, whether he be a defendant in an action to foreclose, or a plaintiff in an action for an accounting, a mortgagee or a grantee being in possession and insolvent or committing waste, and it appearing probable that the rents and profits will be lost." ' Syracuse Bank V. Tallman, 31 Barb. Syracuse Bank v. Tallman, 31 Barb. 201 ; Rider v. Bagley, 84 N. Y. 461 ; 201. Sales V. Lusk, 60 Wis. 490 ; Cone v. * Shotwell v. Smith, 3 Edw. 588. Combs, 5 McCrary (Ark.) 651. Proof ' Burlingame v. Parce, 12 Hun, 144. of insolvency is not always required. ' Smith v. Kelley, 31 Hun, 387. Pouder v. Tate, 96 Ind. 330. ' Frelinghuysen v. Colden, 4 Paige, ^ Shotwell V. Smith, 3 Edw. 588 ; Bur- 204. lingame v. Parce, I2 Hun, 144. ' Bolles v. Duff, 35 How. 481 ; Will- * Jenkins v. Hinman, 5 Paige, 309; iams v. Robinson, 16 Conn. 517, 524. §§ 889-890.] EECEIVEES OF RENTS. 573 § 889. Rule where mortgagee is in possession. — Ordinarily where a mortgagee is in possession, and anything remains due to him, he will not be disturbed in his possession by the appointment of a receiver ; and particularly is this so when the mortgagor is respon- sible, and is able to account for and pay any excess of rents and profits after payment of his debt, or will give security to do so. If he will swear that anything remains due, the court will not try the question of indebtedness upon affidavits, and a receiver will not be appointed.' The rule that a receiver will not be appointed as against a mort- gagee in possession is applied where the mortgagee in possession is the first mortgagee whose claim is unsatisfied, and the parties apply- ing for the receiver hold liens subsequent to his mortgage. The rule has not been applied against the holder of a prior mortgage, and in favor of a subsequent mortgagee, if there be any doubt as to the mortgaged premises being adequate security for the first mortgage, interest on it and taxes. The subsequent mortgagee is entitled to a receiver if the first mortgagee be not in possession, but without prejudice to the latter taking possession ; but if the first mortgagee be in possession, he must redeem." Where possession of mortgaged premises was taken by the first mortgagee without objection on the part of the mortgagor, and the first mortgage was afterward declared void at the instance of the second mortgagee in a suit seeking an account and foreclosure, it was held that the rents accruing during the possession of the mortgagee from the date of the filing of the bill might be claimed and inter- cepted by the second mortgagee at any time before they had been paid over to the mortgagor.' § 890. The mortgage debt must be due in whole or in part, — A receiver should not be appointed until some default has been made by the mortgagor, so that, as to a part of the debt, or interest at least, the mortgagee has a right to foreclose.* Upon this principle. ' BoUes V. Duff, 35 How. 481 ; Quinn Co. v. Woodruff, 3 N. J. Eq. (2 Green) V. Brittain, 3 Edw. 314 ; Patten v. The 210. Accessory Transit Co., 4 Abb. 237 ; Sea ' Falkner v. Printing Co., 74 Ala. Ins. Co. V. Stebbins, 8 Paige, 565. 359. 'PerJoSEPHF. DALY,J.,in NewYork * Bank of Ogdensburgh v. Arnold, 5 Life Ins. Co. v. Glass, 50 How. 88 ; Paige, 38 ; Lofsky v. Maujer, 3 Sand. Quinn v. Brittain, 3 Edw. Ch. 314 ; Ch. 69 ; Quincy v. Cheeseman, 4 Sand. Fisher on Morts. 407 ; Trenton Baking Ch. 405. 574 MORTGAGES OP EEAL PEOPEETY. [§§ 891-893. where a mortgage was payable in instalments, and only a portion of the mortgage debt was due, and it appeared that the mortgaged prem- ises consisted of a farm which was divided by a road into two parcels which were not far from equal, either one of which being of suificient value to pay the portion of the debt which was due, and the papers showed that these parcels could be sold separately without injury to the parties interested, it was held that the plaintiff was not entitled to a receivership for the protection of that portion of the mortgage debt which was not yet due, or of that portion of the premises as to which his right to sell had not yet accrued.' If a part only of the mortgage debt is due, and the mortgaged premises are so situated that they may be sold in parcels, a receiver will not be appointed if a sale of part of the land will produce enough to satisfy the portion of the debt then due;'' but if the premises are so situated that they must be sold entire, and they are an in- adequate security for the mortgage debt, and the personal security is worthless, a receiver may be appointed of the rents of the entire property." § 891. Inadequacy of security. — The fact that the property is not sufficient in value to satisfy all claims upon it, will not be suffi- cient. It must be made to appear that it is insufficient to discharge the claim of the person making the application and all prior liens.* The application may be made by a junior incumbrancer even though he is a defendant, if his claim is due.' § 892. Defense to application for receiver. — It has been said that a receiver will not be appointed if the validity of the mortgage is im- peached on probable grounds ;° but in order to defeat an application for a receiver, the nature of the defense must be disclosed.' An application for a receiver will not be denied on the mere ground that the mortgagor asserts facts claimed to constitute a de- fense, unless it appears to the court from the facts presented that such defense is likely to prevail.' ' HoUenbeck v. Donell, 94 N. Y. 342, « Bolles v. Duff, 35 How. 481. rev'g 29 Hun, 94, "Leahy v. Arthur, i Hogan, 92; Darcy ' Bank of Ogdensburgh v. Arnold, 5 v. Blake, i MoUoy, 247 ; Shepherd v. Paige, 38. Murdock, 2 MoUoy, 231, 531. ' Quincy v. Cheeseman, 4 Sandf. Ch. ' Sea Ins. Co. v. Stebbins, 8 Paige,565. 405. ' Mackellar v. Rogers, 52 N. Y. Super. * Warner v. Gouverneur, : Barb. 36. (20 J. & S.) 360. §§ 893-895.] KECEIVERS OF KEKTS. 575 A receiver will not be appointed in an action to prevent waste vrhere no sale is asked for. ' After a mortgagor has parted with the mortgaged premises, and no longer receives the rents, he is not in a position to oppose an ap- plication for a receiver. Opposition to such an application should be offered, if at all, by the persons whose rights would be affected by it.' § 893. Where a corporation owns the equity of redemption. — It is provided by statute that a receiver of the property of a cor- poration can be appointed only by the court, in an action brought for the foreclosure of a mortgage upon the property of which the receiver is appointed, where the mortgage debt, or the interest thereupon, has remained unpaid at least thirty days after it was payable, and after payment thereof was duly demanded from the proper officers of the corporation, and where either the income of such property is specifi- cally mortgaged, or the property itself is probably insufBeient to pay the mortgage debt.' It is not necessary to give notice to the attorney-general of a mo- tion made in an action to foreclose a mortgage for the appointment of a receiver pending the action, even though the equity of redemp- tion is owned by a corporation. The statute requiring such notice concerns only an action or proceeding for the dissolution of a corpo- ration or the distribution of its assets.* A receiver appointed under a foreclosure of a mortgage executed by a corporation, has paramount rights to rents to a receiver appointed in an action to sequestrate the property of the corporation.* § 894. Who may be appointed receiver. — JSTo clerk, deputy clerk, or assistant clerk of any court of record of the counties of I^Tew Tork and Kings, or of the surrogate's court in said counties, can be appointed a receiver, unless the parties to the action who are not in default for failure to appear or to plead agree to such appointmenL' § 895. When application for receiver may be made.; — ^A re- ceiver may be appointed at any time after the commencement of the action and before a title has been conveyed to the purchaser.' Ordi- ' Robinson v. Preswick, 3 Edw. Ch. Co., 32 Hun, 164, 174 ; Laws of 1883, 246. ch. 378, § 8. 2 Wall St. Fire Ins. Co. v. Loud, 20 » Whitney v. N. Y. & Atlantic R.R. How. g5. Co., 32 Hun, 164. » Code' of Civ. Pro. § 1810. « Code of Civ. Pro. § go. * Whitney v. N. Y. & Atlantic R.R. ' Id., §713. 576 MORTGAGES OF REAL PROPERTY. [§ 896. narily no such appointment should be made until after service of the summons upon the mortgagor or other person in possession, of the property ; but, in special cases, as, for instance, if the residence of such person cannot be ascertained or he keeps himself concealed, a re^ ceiver may be appointed before service of summons upon him and without notice.' In such a case notice of the application may be given to the person in actual possession of the property, though not claiming title otherwise than as a tenant or agent of the mortgagor. Where inadequacy of security is shown, the appointment of a re- ceiver after judgment is almost a matter of course." The power of a receiver continues after the sale of the property and until the dehvery of the deed.' § 896. What rents may be reached by receiver. — The plaintiff cannot call upon the owner of the equity of redemption to refund rents which the latter or his legal representatives has collected and received before the appointment of a receiver,* neither can he obtain rents which a junior mortgagee has collected by superior dihgence in procuring the appointment of a receiver of the same rents in a suit to which he was not a party.' A mortgagee has no claim as such to the receipts of the rents and profits of the mortgaged property. In a proper case upon foreclosure he may have a receiver of such rents, etc., appointed, who will then be entitled to collect and apply them in reduction of the mortgage debt ; and in such a case the receiver may be authorized to collect such rents as have theretofore accrued, but have not yet come to the hands of the owner of the equity of redemption. It is not, however, within the power of the court to order rents already collected and in the possession of the owner to be paid over and applied upon the • McCarthy v. Peake, g Abb. 164. In ' Buchanan v. Ins. Co., 96 Ind. 510. the absence of strong reasons a receiver * Rider v. Bagley, 84 N. Y. 461, affi'g will not be appointed before answer or s. c. sui nam. Rider v. Vrooman, 12 default. Oliver V. Decatur, 4 Cranch,458. Hun, 299; Astor v. Turner, 11 Paige, ^ Astor V. Turner, 11 Paige, 436. 436 ; Johnston v. Riddle, 70 Ala. 219 ; Where, after order of sale on foreclos- Falkner v. Printing Co., 74 Ala. 359 ; ure, a stay was procured by a third per- Corner v. Sheehan, 74 Ala. 453 ; Oilman son attacking the mortgagee's title to the v. Telegraph Co., 91 U. S. 603 ; Kountze mortgage, a receiver was granted on ap- v. Hotel Co., 107 U. S. 378. plication of subsequent mortgagees, the ' Howell v. Ripley, 10 Paige, 43 ; mortgagor being in possession and in- Post v. Dorr, 4 Edw. 412 ; Washington solvent and there being insufficient se- Life Ins. Co. v. Fleischauer, 10 Hun, curity. Warwick v. Hammell, 32 N. J. 117 ; Hayes v. Dickinson, 9 Hun, 277 ; Eq. 427. Rider v. Vrooman, 12 Hun, 299. § 897.] EEOEIVEES OF EEKTS. 577 mortgage debt. The lien of the mortgagee thereon dates only from the appointment of the receiver, and his right to collect rents extends only to such as are unpaid at the time of his appointment.' At the time of filing his complaint for foreclosure in a proper case, the mort- gagee may obtain an order restraining the owner from the further collection of rents, and in such case he may be authorized to col- lect such as then remain unpaid. It was held in a case where the owner bad taken security from a tenant for the payment of rent, that the receiver could enforce such security and collect the rent remain- ing unpaid at the time of his appointment ;^ but the principles of that case do not authorize the collection of rents by a receiver which have already been paid and come to the possession of the owner of the equity of redemption.' A mortgagee has no right as such to rents of the mortgaged prem- ises paid into court by a receiver appointed in a suit by legatees for administration of the estate of the mortgagor, even though the mort- gagee has obtained a decree for foreclosure, and has sold the prem- ises, and part of the debt is unsatisfied. He should have applied to have a receiver appointed in his own suit, and failing to do this, his rights are the same as those of any other creditor.' A mortgagee who has not procured the appointment of a receiver has no lien upon rents collected by an assignee of the mortgagor for the benefit of creditors." § 897. Grantee of mortgagor delaying litigation. — Where the equity of redemption is owned by a grantee of the mortgagor, not personally liable for the payment of the mortgage debt, he cannot,, by delaying the litigation by vexatious appeals and the like, take the rents and profits to the injury of the mortgagee, even though no re- ceiver be appointed. If he attempts to do so and is finally defeated". ' Per RuGER, Ch. J., in WyckofiE v. to the rents and profits accruing during Scoiield, 98 N. Y. 475, 477; Argall v. the pendency of the suit. Argall v. Pitts, Pitts, 78 N. Y. 239, 242 ; HoUenbeck v. 78 N. Y. 239, 243 ; per Patterson, J., Donell, 94 N. Y. 342 ; Rider v. Bagley, in Mutual Life Ins. Co." v. Belknap, N. 84 N. Y. 461 ; Howell v. Ripley, 10 Y. Daily Register, February g, 1887. Paige, 43 ; Stillman v. Van Buren, 100 This is doubted and is contrary to the N. Y. 439. current of authority. See- text and cases ' Lofsky V. Maujer, 3 Sandf. Ch. 71. cited. * Per RuGER, Ch. J., in Wyckoff v. * Coddington v. Bisphaih, 36 N.J. Eq. Scofield, 98 N. Y. 475, 478, rev'g 49 N. 574. Y. Super. (17 J. & S.) 221. It has been ° Upson v. The Mflwaukee Nat. Bank said that the mortgagee will be confined of Wisconsin, 57 Wis.. 526.. 37 578 MOETGAGES OF REAL PEOPEKTY. [§ 898. and there is a deficiency, he may be directed to pay to the plaintiff the amount of rents received by him, or so much thereof as will be sufficient to satisfy the plaintiff's claims for principal, interest, and costs.' § 898. Who entitled to rents collected by receiver.— Ey the appointment of a receiver the mortgagee obtains an equitable specific lien upon the rents unpaid by the tenant, as well those which are ac- crued at the time of the appointment as those which become due subsequently, to pay any anticipated deficiency." So, where an action to foreclose a mortgage was commenced, and a receiver was appointed, the plaintiff was held to be entitled to the rents collected by such receiver, although the defendant was adjudged a bankrupt on a petition filed after the commencement of the action, and before the receiver's appointment, and the assignee in bankruptcy also claimed the fund.' It has also been held that, where a junior incumbrancer procures the appointment of a receiver, by an order which recites that such iippointment is for his benefit, the prior lienors, though parties to the same suit, cannot claim any part of the rents collected by such re- ceiver. Ordinarily, it is true that a receiver is appointed for the benefit of all parties in the action ; but that is only so where all are interested and have the probable right to participate in the subject of litigation. That, in a foreclosuxe suit, does not directly include the rents and profits while the suit is pending. They can be impounded only because the property itself is an inadequate security for the debt, and then only by means of a special application to the court for that purpose. The parties each have their election whether that should be made or not. Those who see fit not to make or join in such an application cannot share in its fruits.* Where the order appointing the receiver is not made by its terms for the benefit of a particular party to the action, but is in general language, the rents collected are to be applied for the benefit of all the parties to the action in the order of their seniority." ' Bank of Plattsburgh v. Piatt, i Paige, ley, ro Paige, 43 ; Ranney v. Peyser, 83 464 ; Bank of Utica v. Finch, 3 Barb. N. Y. i. Ch. 293 ; Ferguson v. Kimball, 3 Barb. ' Hayes v. Dickinson, 9 Hun, 277. 'Ch. 616. * Washington Life Ins. Co. v. Fleisch- ' Lofsky V. Maujer, 3 Sand Ch. 6g ; auer, 10 Hun, 117. Post V. Dorr, 4 Edw. Ch. 412 ; Rider v. ' Keogh v. McManus, 34 Hun, 521 ; "Vrooman, 12 Hun, 299 ; Howell v. Rip- Ranney v. Peyser, 20 Hun, 11, 13 ; Wil- liamson V. Gerlach, 41 Ohio St. 682. §§ 899-901. J RECEIVERS OF RENTS. 579 §899. Payment of taxes by receiver. — In an action to foreclose a second mortgage upon a leasehold estate, an order was entered, upon the consent of the owner of the equity of redemption, appointing the plaintiff receiver, which order contained the following provision : " That as such receiver he (plaintiff) have power, which is hereby given to him, to rent and manage said buildings and premises, and to rent the same or any part thereof from time to time for terms not exceeding one year, to collect and receive the rents thereof, and out of the same to keep said buildings insured against loss or damage by fire, and in repair, a/nd to j>ay the ground rent and taxes." It was held at General Term that this order not only empowered but re- quired the receiver to pay ground rent and taxes, and that he might be compelled to do so after the holder of the first mortgage had ac- quired title by a sale under a judgment of foreclosure, for a price which was insufficient to satisfy the prior lien.' The Court of Ap- peals took a different view, however, and held that the language of the order was permissive merely, and not mandatory ; that the first mortgagee was not a party to the proceeding, and was not entitled to its benefits ; that the plaintiff, by his superior diligence, acquired a specific lien upon the rents in question, superior to any equities of the first mortgagee, and that he was entitled to retain them to apply upon his mortgage." § 900. Disposition of the fund collected. — No disposition of the fund collected by the receiver can, ordinarily, be made, otherwise than by an application in the suit in which the receiver was ap- pointed. If the rents are claimed by a stranger to the action, by title paramount to all of the parties, an adjudication in respect to his rights should be claimed in an action to which all parties are joined, and affirmative relief excluding all of them from participation in the fund should be demanded. In such an action it will be necessary for the plaintiff to allege the facts upon which his superior title de- pends, and to establish them by proof.' § 901. Stipulation pending motion for receiver. — A stipulation between the parties pending an. application for the appointment of a receiver, that the rents then due and those that shall become due prior to the decision of the motion, shaU be collected by the attorneys ' Ranney v. Peyser, 20 Hun, ii. ' Ranney v. Peyser, 83 N. Y. i, rev'g s. c. 20 Hun, 11. ^ Sheridan v. Jackson, 10 Hun, 89. 580 MOETGAGES OF REAL PEOPEETY. [§§ 902-903. for the mortgagor, if appointed, but otherwise to be held by them, has aB the effect, so far as the rights of the receiver are concerned, of an injunction pending the motion, and such a stipulation does not create a preference such as is prohibited by the Bankrupt Act.' If such a stipulation be made, and the motion is thereafter denied, the possession of the rents by the attorney for the mortgagor is his pos- session, and they cannot be obtained by a receiver appointed on a subsequent motion. ° POWERS AND DUTIES OF THE EECEIVEE. § 902. Party to action appointed receiver. — The fact that a person is a party to the suit, or that he is in possession of the prem- ises, does not disqualify him from acting as receiver ; and in many cases the appointment of such a person is the best thing that can be done for aU concerned. If, however, a party to the action is ap- pointed, and if he accepts the trust, his duties will be the same as though he were a stranger to the property, and he will not be suffered to manage the estate for his own benefit merely. It is his duty to make the fund of which he has charge produce the largest possible revenue, and he will be held to the strictest good faith.° § 903. General duties of receiver. — As an oflicer of the court, the receiver represents the interests in the property of all of the parties to the suit, which interests are often various and conflicting, and sometimes involved in doubt. It is his duty to protect the property intrusted to him to the best of his ability for all those interests, with- out being controlled by the representations or directions of any one of them ; though where the plaintiff is a principal party interested, his views and advice are entitled to corresponding weight.* A re- ceiver in possession has very little discretion allowed him, and he must apply to the court, from time to time, for authority to do such acts as may be beneficial to the estate.' A receiver is under no obligation to take forcible or violent means for the assertion of his rights as receiver, without an express order of the court to do so ; and the court will not protect him in any attempt to obtain possession by violence further than the law will ' Meigs V. Rinaldo, 8 Daly, 295; Hayes ' Bolles v. Duff, 37 How. 162. V. Dickinson, 9 Hun, 277. ■• Iddings v. Bruen, 4 Sandf Ch » Wyckoff V. Scofield, 98 N. Y. 475, 417. rev'g 49 N. Y. Super. (17 J. & S.) 221. » Parker v. Browning, 8 Paige, 388. § 904. J RECEIVERS OF BENTS. 581 protect him.' As was said by Chancellor Walwoeth : " If the prop- erty is in the possession of a third person who claims the right to re- tain it, the receiver must proceed by suit in the ordinary way, to try his right to it, or the complainant should make such third party a party to the suit, and apply to have the receivership extended to the property in his hands ; so that an order for the delivery of the prop- erty may be made which will be binding upon him, and which may be enforced by process' of contempt if it is not obeyed." " A receiver may rent the mortgaged premises for such term as is usual, and the lease made by him will not be limited or terminated by the duration of the suit.' After the appointment of a receiver in an action for the foreclosure of a mortgage, and after the lessee has paid rent to the receiver, the mortgagor has no authority to accept a surrender from the lessee, or to execute a new lease, during the continuance of the receivership.* § 904. Enforcing payment of rent to receiver. — The court will not undertake, by its officers, to collect the rent of the mortgaged property, if the person in possession or entitled to the rent is not either a party to the suit or the tenant of a party ;' and even if a re- ceiver is appointed, such appointment will not afEect the rights of persons who are not parties. In Zeiter v. Bowmcm, (6 Barb. 133), the owner of the equity of redemption took a chattel mortgage from the tenant in possession as security for rent not yet due, and then assigned such chattel mortgage, and the rents which it was intended to secure. An action was commenced to foreclose the prior mort- gage, to which the assignee of the chattel mortgage was not made a party. A receiver of the rents was appointed in that action, to whom the tenant attorned. It was held that the assignee of the chattel mort- gage was not affected by these proceedings. If the owner of the equity of redemption is in possession, he may be compelled either to attorn to the receiver, and pay a rental to be fixed by the court, or to surrender the premises.' ' Parker v. Browning, 8 Paige, 388. * Nealis v. Bussing, 9 Daly, 305. * Id. 3S8, 390. ' Sea Ins. Co. v. Stebbins, 8 Paige,, 565. ' A lease for one year was sustained, ' Astor v. Turner, 3 How. 225 ; s. c. 2 Shrieve V. Hankinson, 34 N. J. Eq. 413, Barb. 444; Frelinghuysen v. Colden, 4 and note by the reporter See Code of Paige, 204; Reid v. Middleton, I Turner Civ. Pro., § 716, as to power of receiver. & Russ, 455 ; Randfield v. Randfield, 7 A receiver of a debtor in supplementary Weekly Rep. 651 ; Lloyd v. Mason, 2 proceedings may not make a lease for a Milne & Craig, 487 ; Mutual Life Ins. term exceeding one year. Rule 78. . Co. v. Spicer, 12 Hun, 117. 582 MOETGAaES OF EEAL PEOPEETT. [§905. Thfe proper practice in foreclosure cases, where a receiver has been appointed, and where the tenant is not a party, is either to secure the attornment of the tenant, or to extend the action by amendment so as to make the tenant a party. If any person not a party claims the rent by an assignment from the owner, or otherwise, he also should be made a party to the action. The court can then protect the person paying, as well as the officer claiming the rent, from the improper influences of other persons. But where the tenant and per- son claiming the rent are not parties to the action, and no attornment to the receiver has taken place, the jurisdiction over the subject by way of process for contempt cannot be maintained.' By making the appointment of a receiver of the rents, the court becomes virtually the landlord of the property, collecting the rents by its officer ;" and the court will not let the possession of the re- ceiver, which is its own possession, be disturbed by any one without its permission.' l^or will the court, where it has made an order for the appointment of a receiver of real estate, and the tenants have attorned to such receiver under an order of the court, permit the tenants or any other persons to question the right of the court to grant such receivership by disturbing the possession of its officer." § 905. Actions by receiver. — The receiver cannot proceed in ejectment against the tenants vdthout the authority of the court, and the possession of the tenants will not ordinarily be disturbed where a receiver is appointed. But although not themselves parties to the suit, the tenants of a party who have attorned to the receiver, may be compelled to pay rent to him." In an action brought by or against a trustee of an express trust, or the assignee of a receiver, the court may in its discretion require the plaintiff to give security for costs.' By rule Y9 of the courts, it is provided that in all cases where a receiver other than a receiver ap- pointed under proceedings supplementary to execution, applies to the court for leave to bring an action, he shall show in such application that he has sufficient property in his actual possession to secure the ' Bowery Savings Bank v. Richards, 3 City Bank v. Schermerhorn, 9 Paige, Hun, 366 ; Sea Ins. Co. v. Stebbins, 8 372 ; Foster v. Townshend, 2 Abb. N. Paige, 565. Cas. 29, 36. '' Steele v. Sturges, 5 Abb. Pr. 442 ; ^Albany City Bank v. Scliermerhorn, Foster v. Townsheild, 2 Abb. N. Cas. 9 Paige, 372. 29, 36. ' Sea Ins. Co. v. Stebbins, 8 Paige, 565. * Noe V. Gibson, 7 Paige, 513; Albany ' Code of Civ. Pro. § 3271. §§ 906-907.] EECEIVERS OF BENTS. 583 person against whom the action is to be brought for any costs which he may recover against such receiver ; otherwise the court may re- quire the receiver to give a bond with sufficient security and properly acknowledged and approved by the court, to the person against whom the action is to be brought, conditioned for the payment of any costs which may be recovered against such receiver. A receiver has no absolute right to defend an action as such re- ceiver, and the granting permission to make defense is in the discre- tion of the court.' § 906. Liability of receiver. — The receiver appointed in an action to foreclose a mortgage is not the owner of the property ; he is simply an officer of the court to collect the rents and profits of the mort- gaged premises for the benefit of the mortgagee. For this reason he is not subject to a liability imposed by statute on the owner of a building, to preserve or protect its walls, and to keep the same secure and safe." § 907. Compensation of receiver. — The Code of Civil Pro- cedure provides that " a receiver, except as otherwise specially pre- scribed by statute, is entitled, in addition to his lawful expenses, to such a commission, not exceeding five per centum, upon the sums re- ceived and disbursed by him, as the court by which, or the judge by whom, he is appointed allows." ' The compensation of a receiver in a foreclosure case is regulated by this provision, even though the de- fendant be a corporation." > Patrick V. Eels, 30 Kans. 680. ■> U. S. Trust Co. v. N. Y., W. S. & B. « Wyckoff V. Scofield, 24 Weekly Dig. R.R. Co., loi N. Y. 478 ; 9 N. Y. Civ. 339- Pro- Rep. 113 ; 33 Alb. L. J. 297. ' Code of Civ. Pro. § 3320. CHAPTER XXV. COSTS. COSTS IN ACTIONS TO FORECLOSE. g 908. Costs are in the discretion of the court. 909. Appeal from discretion of trial court as to costs, gio. Rules controlling the granting of costs. 911. Two foreclosures against the same property. 912. Notice of no personal claim as affecting right to costs. 913. When costs are payable out of the fund. 914. Tender after action brought and before judgment. 5 915. Offer of judgment in foreclosure cases. 916. Additional allowance awarded as part of the costs under the Code. 9x7. Discretionary addition allowance. 918. Amount of costs in judgment by default. COSTS IN SURPLUS PROCEEDINGS. 919. The only costs allowable in these proceedings, COSTS IN ACTIONS TO REDEEM. 920. Principles controlling. COSTS IN ACTIONS TO FOEECLOSE. § 908. Costs are in the discretion of the court. — Ab action for the foreclosure of a mortgage, in common with all other actions for equitable relief, falls within the provision of section 3230 of the Code of Civil Procedure, under which in all actions other than those mentioned in sections 3228 and 3229, costs may be allowed or not, in the discretion of the court." And this rule applies to actions for strict foreclosure as well as to actions for foreclosure by a sale of the property.' Costs in suits and proceedings in equity have always been held to be discretionary," and the awarding of costs in equity cases stands on the same footing now as before the Code.' If the action is tried before a referee, the referee stands in the ' Gallagher v. Egan, 2 Sandf. 742 ; Losee v. Ellis, 13 Hun, 655. ''O'Hara v. Brophy, 24 How. 379-; Bartow v. Cleveland, 16 Id. 364 ; s. c. 7 Abb. Pr. 339. ' Methodist Episcopal Church v. Jaques, I Johns. Ch. 65 ; Garr v. Bright, i Barb. Ch. 157. * Law V. McDonald, g Hun, 23 ; Pratt V. Stiles, 17 How. 211; Phelps v. Wood, 46 How. I ; Church v. Kidd, 3 Hun, 254. § 909. J COSTS. 585 place of the court, and the question of costs is in his discretion.' The only way to review his decision as to costs is by an appeal from the judgment." When it is said that the giving of costs in equitable actions is en- tirely discretionary, it must not be supposed that a court of equity is not governed by definite principles in its decisions respecting costs. All that is meant by the dictum is, that courts of equity are not, like courts of law, held inflexibly to the rule of giving the costs of the suit to the successful party, but that they will, in awarding costs, take into consideration the circumstances of a particular case, and the situation and conduct of the parties, and exercise their discretion in reference to those points. In exercising this discretion, however,' courts of equity are governed by certain fixed principles which they have adopted on the subject of costs ; and do not, as is fre- quently supposed, act upon the mere caprice of the judge before whom the cause is heard. The discretion to be exercised is a sound discretion.' § 909. Appeal from discretion of trial court as to costs. — The discretion exercised in an equity action as to costs cannot be reviewed upon a motion, and must be challenged by an exception to the find- ings, and an appeal from the judgment.* The discretion of the judge at special term with regard to costs may properly be reviewed by the General Term, since the litigants are entitled to the discretion of both branches of the court upon matters which concern substantial rights, but the Court of Appeals will not interfere with the exercise of this discretion unless it appears that it was exercised under erroneous views of the law affecting the rights of the parties.' Where, however, the court below has allowed costs under a mistaken idea of the law, it is the duty of the Court of Ap- peals to correct the error." The discretion of the trial court in an equity action wiU not be in- terfered with by the General Term on appeal, except in cases of abuse or of palpable error, in disregard of recognized equities and rights.' ' Pratt V. Stiles, 17 How. 2rr ; s. c. 9 '2 Barb. Ch. Pr. 322; Eastburn v. Abb. Pr. 150 ; Graves v. Blanchard, 4 Kirk, 2 Johns. Ch. 317 ; Law v. Mc- How. 300 ; s. c. 3 Code R. 25 ; Luding- Donald, 9 Hun, 23. ton V. Taft, 10 Barb. 447 ; Taylor v. * Woodford v. Bucklin, 14 Hun, 444 ; Root, 48 N. Y. 687 ; Losee v. Ellis, 13 Rosa v. Jenkins, 31 Hun, 384. Hun, 655 ; Law v. McDonald, g Hun, ' Taylor v. Root, 48 N. Y. 687. 23 ; Couch V. Millard, 3 How. N. S. 22. * Morris v. Wheeler, 45 N. Y. 708. 2 Losee v. Ellis, 13 Hun, 655. ' House v. Eisenlord, 30 Hun, 90. 586 MORTGAGES OF EEAL PEOPEETY. [§§ 910-912. §910. Rules controlling the granting of costs.— Ordinarily, costs will be granted to a successful litigant, and the cases in which costs are refused to him, or are granted to an unsuccessful party to the action, are exceptional." ■ A mortgagee is ordinarily allowed costs, whether plaintiff or de- fendant." "Where plaintiff succeeds in part and defendant succeeds in part, no costs should be allowed to either party as against the other.' Where a mortgagor or any other party to the action unreasonably defends, he may be charged personally with the costs for the benefit of those entitled to the surplus.* § 911. Two foreclosures against the same property. — Where there are two separate mortgages on the same property, and an action to foreclose is commenced by the holder of the first mortgage against the holder of the second mortgage and all junior incumbrancers, an action subsequently commenced to foreclose the second mortgage, would, in general, be both unnecessary and improper, and in a case where both of such actions were commenced by the same solicitor, he was compelled to elect in which action he would take his decree, in order that the owners of the equity of redemption should be charged with only one bill of costs." The principle of the decision is, that where an action is unnecessarily commenced, and where the relief prayed for might be obtained on motion in an action already pending, the plaintiff will not be entitled to costs.' In a case where the second mortgagee could not procure the satisfaction of his mort- gage under the action already pending, as where a judgment of fore- closure upon the first mortgage had been stayed by appeal, the prin- ciple would not apply.' § 912. Notice of no personal claim as affecting right to costs. — A person unnecessarily or improperly joined as a defendant, who is served with a notice of no personal claim, and who unreasonably defends, will not be awarded costs.' ' Garr v. Bright, i Barb. Ch. 157. ^ Wendell v. Wendell, 3 Paige, 509 ; ' Benedict v. Oilman, 4 Paige, 58 ; Roosevelt v. EUithorp, 10 Paige, 415. Slee V. Manhattan Co., i Paige, 48; 'DeLaVergne v. Evertson, i Paige, Vroom V. Ditmas, 4 Paige, 526 ; Lit- 181. thauer v. Royle, 17 N. J. Eq. 40. ' See Bache v. Purcell, 6 Hun, 518, ' Law V. McDonald, 9 Hun, 23. afE'd s. c. 51 How. 270. * Jones V. Phelps, 2 Barb. Ch. 440 ; " Barker v. Burton, 67 Barb. 458 ; An- Barnard v. Bruce, 21 How. 360. drews v. Myers, 6i Wis. 385. § 913.] COSTS. 587 The failure to serve a notice of no personal claim under section 423 of the Code of Civil Procedure, does not deprive the court in equity cases of the power to award costs against a defendant who unreasona- bly defends. It is not necessary to serve such a notice,' and the de- fendant who receives a copy of the complaint is more fully informed of the nature and object of the action than he would be from a mere abstract such as the notice under the statute is.° Prior to the framing of the 133d rule of the Court of Chancery, a subsequent mortgagee or judgment creditor who, being made a party defendant, answered and disclaimed any interest, was entitled to costs, to be paid out of the fund if that were sufficient, but by the plaintiff if it were insufficient, on the ground that such defendant should be called upon before suit brought, and requested to release, or otherwise disclaim." But this was changed by the 133d rule, which was known as Chancellor Sandfoed's rule. Under this rule a complainant was allowed to serve with the subpoena a notice of the object of the action and of no personal claim. If the defendant on whom such notice had been served appeared and disclaimed, he could not recover costs, but was required to pay costs to the complainant ; and if the com- plainant neglected to serve such notice, by reason whereof a defend- ant was put to unnecessary costs in employing a solicitor to defend the suit, such costs might be charged personally on the complainant in the discretion of the court.* The object of this rule was to relieve the complainants, in mortgage cases, from the expense of unnecessary disclaimers, put in by defendants who were merely formal parties to the suit, and against whom no personal decree was sought. To entitle a defendant to costs under the rule, where he appeared by a solicitor but did not disclaim, he was required to satisfy the court that he had been misled as to the object of the suit and the relief sought against him, in consequence of the neglect of the complainant to give the usual notice ; and that his sole object in employing a solicitor was to protect himself or his property from an unjust claim which he sup- posed that the complainant might have made against him in the bill.' § 913. When costs are payable out of the fund. — If the cir- cumstances of the case require it, the court may direct that the costs ' Gallagher v. Egan, 2 Sandf. 742. ■• Rules of N. Y. Court of Chancery, ^ O'Hara v. Brophy, 24 How. 379. pp. 102, 103 ; note to Jay v. Ensign, 9 ' Catlin V. Harned, 3 Johns. Ch. 61 ; Paige, 231. Titus V. Velie, 6 Id. 435. 'Jay v. Ensign, 9 Paige, 230. MOETG-AGES OJF REAL PROPEKTr. [§ 914. be paid out of any moneys in the custody of the court belonging to any of the parties litigant and subject to the lien of the mortgage.' A prior mortgagee, if made a party for the purpose of having the amount of his claim ascertained, is entitled to his costs, to be paid out of the fund, or by the plaintifE personally if the answer was un- reasonably called for by him." A party who is improperly joined as a defendant may have costs adjudged in his favor against the plaintiff personally,' but such costs should not be paid out of the fund." Where, upon the trial by the court of an action to foreclose a mort- gage, the complaint is directed to be dismissed, as to some of the de- fendants, " with twenty-five dollars costs," this means that these costs are to be paid by the plaintiff, and the clerk has no authority to enter a judgment directing them to be paid out of the proceeds of the sale.' § 914. Tender after action brought and before judgment. — If the defendant wishes to pay the mortgage debt after the commence- ment of the action to foreclose, he cannot then either make or plead a tender, for a tender is incomplete without including in it all the costs, and the right to costs is not absolute, but depends upon the dis- cretion of the court." The statute allowing a defendant to tender to the plaintiff or his attorney an amount sufficient to satisfy the de- mand with costs to the time of tender, and providing that if it shall appear on the trial that the amount so tendered was sufficient to pay the demand and costs, the plaintiff should not be entitled to costs sub- sequent to the tender, is confined to actions at law, and does not affect actions for the foreclosure of mortgages.' In an action of foreclosure, where tender is made before judgment, if the parties do not voluntarily adjust the costs, either party may apply to the court for that purpose." But before doing this it would be prudent for the defendant to offer to pay the amount due upon ' Falkner v. Printing Co., 74 Ala. 359. s. c. 7 Abb. 339 ; Pratt v. Ramsdell, 16 * Boyd V. Dodge, 10 Paige, 42 ; Mayer How. 59 ; Thurston v. Marsh, 14 Id. V. Salisbury, i Barb. Ch. 546 ; Jones v. 572 ; s. c 5 Abb. 389. Phelps, 2 Id. 440 ; Chamberlain v. Demp- ' 2 R. S. 553, § 20 ; Code of Civ. Pro., sey, 36 N. Y. 144, 147. § 731 ; N. Y. Fire & Marine Ins. Co. v. ' Millandon v. Brugiere, 11 Paige, Burrell, 9 How. 398. 163. " Pratt V. Ramsdell, 16 How. 59 ; Bar- * Nelson v. Montgomery, i Edw. 657. tow v. Cleveland, 16 How. 364 ; s. c. 7 '^ Rosa V. Jenkins, 31 Hun, 384. Abb. 339 ; Morris v. Wheeler, 45 N. Y. ' Bartow v. Cleveland, 16 How. 364 ; 708 ; Stevens v. Veriane, 2 Lans. 90. §§ 915-916.] COSTS. 589 the mortgage, and sueli costs as lie may think proper, and upon re- fusal to accept the amount, he may apply to the court for leave to pay the amount due, and such costs as the court may in its discretion allow. The court will entertain the application and permit the pay- ment, fixing the costs, and upon the payment being made will order a discontinuance or stay of the action as may be just.' When costs are allowed, the items are those which are specified by the statute," and, in general, those items are the only ones which will be imposed. But if the court shall be of opinion that the circum- stances of the case demand it, the plaintiff may be permitted to take judgment, notwithstanding the tender, and thus become entitled to the additional allowance under section 3252 of the Code of Civil Pro- cedure ; or if the equities of the case require it, the court may refuse costs to the plaintiff, or even award them to the defendant.' § 916. Offer of judgment in foreclosure cases. — It was held in Stevens v. Vericme (2 Lans. 90), that the same reasons which prevent a valid tender from being made after the commencement of a fore- closure suit, will also prevent an offer of judgment under section T38 of the Code, from limiting the amount of costs which the plaintiff may recover. But the Court of Appeals took a different view in Bathgate v. Ilashm (63 IST. Y. 261, rev'g s. c. 5 Daly, 361), and held that such an offer would have the same effect in an action to foreclose a mortgage as in any other action.'' § 916. Additional allowance awarded as part of the costs under the Code. — Where an action is brought to foreclose a mort- gage upon real property, the plaintiff, if a final judgment is rendered in his favor and he recovers costs, is entitled to recover, in addition to the costs prescribed for actions in general, the following percent- ages, to be estimated upon the amount found to be due upon the mortgage : Upon a sum not exceeding $200, ten per centum ; upon an additional sum not exceeding $400, five per centum ; and upon an additional sum not exceeding $1,000, two per centum. Where such an action is settled before judgment the plaintiff is entitled to a • Bartow V. Cleveland, i6 How. 364 ; * An offer of judgment in a foreclos- s. c. 7 Abb. 339. ure suit held not sufficient. Penfield v. ' Code of Civ. Pre, §3251. James, 56 N. Y. 659. See as to effect ' Pratt V. Ramsdell, 16 How, 59, 61 ; of offer of judgment in foreclosure case Bartow v. Cleveland, 16 Id. 364 ; s. C. 7 on right to extra allowance under former Abb. 339. Code, Astor v. Palache, 49 How. 231. 590 MOETaAGES OF BEAL PROPERTY. [§ 917. percentage upon tlie amount paid or secured upon the settlement at one-half of those rates. In an action to foreclose a mortgage upon real property where a part of the mortgage debt is not due, if the final judgment directs the sale of the whole property, as prescribed in section 1637 of the Code of Civil Procedure, on the ground that it appears that the mortgaged property is so circumstanced that a sale of the whole will be most beneficial to the parties, the percentages above specified must be computed upon the whole sum unpaid upon the mortgage. But if it directs the sale of a part only, as prescribed in section 1636 of the Code of Civil Procedure, on the ground that the mortgage debt is not all due, and the mortgaged property is so circumstanced that it can be sold in parcels without injury to the in- terests of the parties, the said percentages must be computed upon the sum actually due ; and if the court thereafter grants an order directing the sale of the remainder, or a part thereof, the percentages must be computed upon the amount then due ; but the aggregate of the percentages shaU not exceed the sum which would have been allowed if the entire sum secured by the mortgage had been due when final judgment was rendered.' Under this provision the plaintiff, who is awarded costs, may tax percentages up to $60, if the mortgage debt amounts to $1,600 or more, and his right to such percentages does not depend upon any discretion of the court other than the discretion which might grant or refuse him costs in the action. The percentages are taxable just as any other item of costs is taxable." These percentages can be given only to the plaintiff, and a defendant cannot be awarded them under any circumstances.' § 917. Discretionary additional allowance. — It is also provided by section 3253 of the Code of Civil Procedure as follows : " In an action brought to foreclose a mortgage upon real property ; or for the partition of real property; or in a dilfieult and extraordinary case, where a defense has been interposed in any action, the court may also in its discretion award to any party a further sum, as fol- lows: " 1. In an action to foreclose a mortgage, a sum not exceeding two and one-half per centum upon the sum due or claimed to be due upon the mortgage, nor the aggregate sum of two hundred dollars. ' Code of Civ. Pro. § 3252. » Williams v. Hernon, 13 Abb. 297 ; ' Hunt V. Middlebrook, 14 How. 300. Downing v. Marshall, 37 N. Y. 380, 385. § 917.] COSTS. 591 " 2. In any other case, specified in this section, a sum not exceeding five per centum upon the sum recovered, or claimed, or the value of the subject matter involved." ' It is quite plain that, under this provision of the Code, the court may grant an additional allowance in an action to foreclose a mort- gage up to two and one-half per cent, upon the amount due, not ex- ceeding $200 in all, and this power is exercised even in cases where no defense is made, and nothing difllcult or extraordinary exists. But there has been some controversy as to the power of the court to grant allowances exceeding two and one-half per cent, in cases which have been litigated, and which are really difficult and extraordinary. The Court of Appeals in Hunt v. Ohapmcm (62 IS. Y. 333), reversed an allowance of five per cent., and. declared that, notwithstanding the case was both difficult and extraordinary, and a defense had been in- terposed, and a trial had been had, the court could not make an al- lowance exceeding two and one-half per cent. This ruling was made in 1875, under section 309 of the former Code, which was amended in 1876, and thereafter the general term of the Third Department decided that because of such amendment the court was not restricted in foreclosure cases to two and one-half per cent., but might make an allowance of five per cent, not exceeding $2,000." The Code of Civil Procedure was then enacted in its present form, and the general term of the Fourth Department determined that section 3253 of the Code of Civil Procedure restricts the allowance in mortgage foreclosure cases to two and one-half per cent., and that the eiiect of the lan- guage of section 3253 is to lay down substantially the rule adopted by the Court of Appeals in Hunt v. Ohapman (supra).^ The gen- eral term of the First Department has followed and approved of this decision.'' Where the defendants are in default for failure to answer, a motion properly noticed for final judgment, brings up all questions as to every matter proper to be inserted in the judgment, and the court may thereupon, without the service of a special notice of motion therefor, grant the extra allowance up to two and one-half per cent., and not exceeding $200, provided for in section 3253 of the Code." The Code contemplates but one allowance, and that only upon ' Code of Civ. Pro, § 3253. * O'Neill v. Gray, 39 Hun, 566, Brady, ' Bockes V. Hathorn, 17 Hun, 87. J., dissenting. ^ Ro.sa V. Jenkins, 31 Hun, 384. 'Walsh v. Weidenfeld, 3 Daly, 334. 592 MOETaAGES OF REAL PEOPEETT. [§ 918. final judgmQ,iit. An additional allowance after it is properly granted becomes a part of the costs of the action which the successful party is entitled to recover. The test must be that the action has termi- nated in such form that the successful party can lawfully claim the payment of the costs on such termination, and enforce their payment. An additional allowance cannot therefore be granted upon sustaining or overruling a demurrer with leave to answer over on payment of costs, but only, if at all, when the final judgment is pronounced that unconditionally terminates the action and fixes the right of the suc- cessful party to tax his costs absolutely under the Code.' By rule 44, it is required that applications for an additional allow- ance can only be made to the court before which the trial is had, or the judgment rendered, and shall in all cases be made before final costs are adjusted. A taxation of costs inadvertently procured by a party, may be set aside to enable him to apply for an additional allowance.' No additional allowance can be granted after the amount due on the mortgage, and a sum adjusted for costs, have been paid.' An additional allowance may be given in a foreclosure suit, where a tender has been made before judgment, of the amount due, with in- terest and costs to the time of making the tender, since the additional allowance is not in the nature of costs incurred subsequent to the tender.' A voluntary payment on a settlement of a mortgage foreclosure of a sum not exceeding two and one-half per cent, of the amount due, by way of additional allowance, although such allowance has never been made by the court, and the payment is made under protest, cannot be recovered back." § 918. Amount of costs in judgment by default. — In a foreclos- ure case, where judgment is taken by default, the plaintiff is entitled, on application for judgment, to $25 ; for each defendant served with process, not exceeding ten defendants, $2 ; for each defendant ex- ceeding ten defendants, $1 ; for attending and taking deposition of a witness, conditionally, or to perpetuate his testimony, $10 ; for draw- ' De Stuckle V. Tehuantepec R.R. Co., ' Lockman v. Ellis, 58 How. 100. 30 Hun, 34 ; McDonald v. Mallory, 46 * N. Y. Fire & Marine Insurance Co. N. Y. Super. Ct. (14 J. & S.) 58. v. Burrell, 9 How. 398. ' Dietz V. Farish, 43 N. Y. Super. (9 ' Bliss v. Wallis, 3 How. N. S. 325. J. & S.) 87. § 919.] COSTS. 593 ing interrogatories to annex to a commission for taking testimony, $10 ; for attending examination of a party before trial, $10 ; for ap- pointment of a guardian for an infant defendant (but only one in any one action), $10 ; for procuring an injunction order, $10. The plaintiff is also entitled to ten per cent, on the recovery for any amount not exceeding $200, $20 ; for any additional amount not exceeding $400, five per cent., $20 ; for any additional amount, not exceeding $1,000, two per cent., $20. If the action is settled before judgment, the same allowance upon the amount paid or secured is to be allowed at one-half of the above rates. The clerk is not authorized to tax any other items to be included in a bill of costs for the foreclosure of a mortgage (exclusive of dis- bursements) in case of default. No trial fee is allowed, and no costs of motion are allowed, from the commencement of the proceedings in the action to the entry of the decree or judgment. The services performed are all ex parte, and the costs and allowances above pro- vided are such costs and allowances as the statute has provided to cover the plaintiff's expenses for the services performed. If the ser- vices in any case are worth more to the attorney who performs them, he must look to the party who employs him. The necessary disbursements must be adjusted by the clerk, and must be stated in detail, and verified by affidavit. This includes fees allowed by law to sheriffs, clerks, and other officers, witnesses' fees, referee's fees, expenses of publication of summons and notice, com- pensation of commissioners in taking depositions, expenses paid for affidavits and postage.' COSTS IN SUEPLTJS PEOCEEDINGS. § 919. The only costs allowable in these proceedings are the costs of the motion for the reference ($10), the costs of the motion to confirm the report ($10), and disbursements, inchiding the fees of the referee. The court has no power to grant an extra allowance.^ If a creditor makes claim to a larger amount than, upon trial, is found to be owing to him, or if he adopts an unusual and expensive mode of procedure, costs may be refused to him.° ' Per NoxoN, J., in Armstrong v. selaer & Saratoga R.R. v. Davis, 55 N. Murdock, 17 Alb. L. J. 429. Y. 145; German Savings Bank v. Sharer, ^ McDermott v. Hennessy, 9 Hun, 59; 25 Hun, 409. Elwell V. Robbins, 43 How. 108; Rens- ^ De LaVergne v.Evertson,iPaige,i8i. 38 594 MORTGAGES OF REAL PEOPEETT. [§ 920. Persons faiKng to establish their claims may be charged with the tmnecessarj costs which have been incurred by their litigating.' A claimant who litigates a prior lien unsuccessfully, but in good faith, is not chargeable with costs ; but if he files exceptions, and they are overruled, he must pay the costs produced by the exceptions.' If a junior incumbrancer knowing, or having reason to believe, that the previous liens will exhaust the whole surplus, makes a claim, and subjects the prior incumbrancers to unnecessary costs, he may be charged with them ; but if the claim is made in good faith, upon grounds from which he had reason to believe that the prior claims could not be sustained, he may be excused.' The widow of the mortgagor cannot be charged with costs, but she is entitled to have the costs of the proceedings, and her own costs, paid out of the balance of the surplus moneys then in court, after her share thereof shall be set apart.* COSTS IK ACTIONS TO EEDEEM. § 920. Principles controlling. — As a general rule, the party claim- ing the right to redeem premises from a mortgage, whether he is a plaintiff or defendant, must pay the costs of the proceedings, as well as the amount due on the mortgage, before he can be permitted to redeem.' The plaintiff, therefore, in an action to redeem, will, as a general rule, be compelled to pay costs to the defendant, although he ultimately succeeds in obtaining the relief prayed for. But if the defendant has behaved inequitably or improperly, he may be de- prived of or even compelled to pay costs." In a case where a party entitled to redeem under a statute fore- closure, had tendered the amount due with costs, he was not charged with costs on his subsequent bill to redeem,' and it has also been held that a party entitled to redeem, who tenders the whole amount due before filing his bill, will be excused from paying the costs of his adversary though an administrator.' ' Lawton v. Sager, ii Barb. 349 ; Be- Co., i Id. 48; Saunders v. Frost, 5 Pick, vier V. Schoonmaker, 29 How. 422. 259 ; 16 Am. Dec. 394. ' Norton v. Whiting, i Paige, 578. * Slee v. Manhattan Co., 1 Paige, 48 ; ' Farmers' Loan & Trust Co. v. Mil- Brockway v. Wells, i Id. 617; Vroom v. lard, 9 Paige, 620. Ditmas, 4 Id. 526, 535 ; Saunders v. *Tabele v. Tabele, i Johns. Ch. 45. Frost, 5 Pick. 259 ; 16 Am. Dec. 394. * Benedict v. Oilman, 4 Paige, 58; ' King v. Duntz, 11 Barb. 191. Brockway v. Wells, i Id. 617 ; Vroora v. " Van Buren v. Olmstead, 5 Paige, 9. Ditmas, 4 Id. 526 ; Slee v. Manhattan § 920.] COSTS. 595 "Where the defendant interposes an unconscientious defense,' or is the cause of the litigation by unreasonable or oppressive conduct, he may be charged with costs.'' So, also, if the mortgage has actually been satisfied before the action to redeem is commenced.' ' Slee V. Manhattan Co., i Paige, 48. ' Barton v. May, 3 Sandf. Ch. 450. ^ Calkins v. Isbell, 30 N. Y. 147. CHAPTER XXVI. HOW THE SALE TINDEE THE JUDGMENT OJF EOEECLOSUEE SHOULD BE MADE. 5 921. Prior to the judiciary act of 1847. 922. Under the Code. 923. Who may be appointed referee. 924. The sale must be made by the oiEcer designated. 925. In New York county. 926. In Kings county. 927. Publication and posting of the notice of sale. 928. What is a sufficient publication. 929. Form and contents of the notice of sale. 930. Presumption as to regularity. 931. The officer appointed to sell must proceed. 932. Order of sales in parcels. 933. Duties of officer at the sale. §934 Payment of taxes and assess- ments out of proceeds of sale. Terms of sale cannot qualify judgment as to payment of taxes. 936. Proper provision in terms of sale as to payment of taxes. Terms of sale where title is in- cumbered by prior rights or liens. Adjourning the sale. Restraining sale by order of court. Special clause in deed as to in- terest sold. 941. Fees of the officer making the sale. 942. Fees of the auctioneer. 935- 937- 938. 939- 940. § 931 . Prior to the judiciary act of 1847, sales under the decrees of the Court of Chancery were made by masters in chancery, but the office of master in chancery was abolished by that act, and, under its provisions, the sheriff of the county in which the land was to be sold was the proper officer to sell under a decree of foreclosure, the court having power, under the T7th section, whenever it was deemed proper, to appoint a suitable person to make the sale instead of the sherifE. Where any controversy had arisen, or was likely to arise, between the parties as to the order in which difEerent portions of the premises should be sold, a referee was commonly appointed to make the sale instead of the sheriff.' § 922. Under the Code.— By section 1242 of the Code of Civil Procedure it is enacted that, except where special provision is other- wise made by law, real property adjudged to be sold must be sold in ' Knickerbacker v. Eggleston, 3 How. 130. §§ 923-924.J SALE UNDER JUDGMENT OF EOEECLOSUEE. 597 the county where it is situated by the sheriff of the county, or by a referee appointed by the court for that purpose, who must execute a conveyance to the purchaser. Where a referee is appointed by the court to sell real property, the court may provide for his giving such security as the court deems just for the proper application of the money received upon the sale ; or for the payment thereof by the purchaser, directly to the person or persons entitled thereto, or their attorneys.' § 923. Who may be appointed referee. — Except when the referee is agreed upon by a written stipulation, as provided for by section 1011 of the Code of Civil Procedure, no person, unless he is an attorney of the court in good standing, can be appointed sole referee for any purpose in any action or proceeding. Nor can any person be appointed a referee who is the partner or clerk of the attorney or counsel of the party in whose behalf such appHcation is made, or who is in any way connected in business with such attorney or counsel, or who occupies the same office with such attorney or counsel." I No person holding the officie of clerk, deputy clerk, special deputy clerk, or assistant in the clerk's office of a court of record, or of the surrogate's court, within either of the counties of New York or Kings, can be appointed a referee except by the written consent of all the parties to the action other than parties in default for failure to appear or plead.^ By the 61st General Court Kule the sale is also required to be made by the sheriff of the county or a referee, and it is also provided that the referee to be appointed in foreclosure cases, to compute the amount due or to seU mortgaged premises, shall be selected by the court, and the court shall not appoint as such referee a person nominated by the party to the action or his counsel. § 924. The sale must be made by the officer designated, or it will be void. A sale which was directed to be made by a master in chancery residing in New York, having been made by a master re- siding in Brooklyn, was set aside, though the purchaser had taken his deed.* A sale by a person deputed by the officer authorized to make the sale, in his absence, would be irregular," though this would not ' Code of Civ. Pro. § 1243. * Yates v. Woodruff, 4 Edw. 700. " Rule 80. ^ Heyer v. Deaves, 2 Johns. Ch.. ' Code of Civ. Pro. § go. 154. 598 MOETaAGES OF REAL PKOPERTT. [§§ 925-926. apply to the sheriff, who may lawfully act by his under-sheriff and deputies. An auctioneer may act for the officer in his presence," and if the sale is made in his absence a deed executed by him to the purchaser is voidable only and not void.' Where a decree of foreclosure provides for a sale by the sheriff, it should be made by the sheriff in office when the publication of the notice of sale is commenced, though he goes out of office before the sale takes place.' § 926. In New York county.— By Laws of 1869, c. 569, entitled " An act in relation to the fees of the sheriff of the city and county of New York, and to the fees of referees in sales in partition cases," it was provided that, " All sales of real estate hereafter made in the city and county of New York, under the decree or judgment of any court of record (except sales in cases of partition, and where the sheriff of said city and county is a party) shall be made by the sheriff of said city and county." On the ground that this was a local act, that it embraced more than one subject, and that the exclusive power of the sheriff to make sales under the judgments of courts of record, is not expressed in its title, the act was pronounced to be unconsti- tutional and void, and sales made by referees were adjudged to be valid.* § 926. In Kings county.— By Laws of 1876, c. '439, entitled " An act relating to the expenses of judicial sales in the county of Kings," it is enacted that all sales of real estate made in the county of Kings under judgment or decree of any court, except sales in partition and where the sheriff of said county is a party, except where both parties to the suit agree upon a referee to be appointed by the court, shall be made by the sheriff of the county of Kings. This statute has been held to be constitutional.' It has, however, been determined that where a judgment of fore- closure directs lands situated in the county of Kings to be sold by a referee, instead of by the sheriff, as required by the statute, such direction is a mere irregularity, and a sale by the referee is valid and passes a good title to the purchaser.' A consent signed by all of the ' Blossom V. R.R. Co., 3 Wall. 205. ■'Gaskin v. Meek, 42 N. Y. 186, affi'g * Meyer v. Bishop, 27 N. J. Eq. 141 ; s. c. 55 Barb. 259. Meyer v. Patterson, 28 N. J. Eq. 249. ' Kerrigan v. Force, 9 Hun, 185, affi'd 'Union Dime Savings Inst'n v. An- 68 N. Y. 381. dariese, ig Hun, 310, affi'd 83 N. Y. 174 ; ' Dickinson v. Dickey, 14 Hun, 617. 33 Alb. L. J. 115. § 927.] SALE UNDER JUDaMENT OF FORECLOSTIEE. 599 parties appearing in the action, has been held by the general term of the Second Department to be a compliance with the statute, and while this construction of the law has not in terms been sanctioned by the Court of Appeals, that court has decided that if the court at Special Term can be said to err in appointing a referee upon such consent, the error does not render the appointment of the referee illegal, or the sale by him void. It is, at most, an error which can be corrected by any party to the record by application to the court or by appeal from the judgment ; but a sale made under such circumstances is not invalid because made by a referee instead of the sherifE.' § 927. Publication and posting of the notice of sale. — By sec- tion 1678 of the Code of Civil Procedure it is provided that notice of a sale in an action relating to real property must be given by the officer making it, as prescribed by section 1434 of the Code, for the sale by a sheriff of real property by virtue of an execution, unless the property is situated wholly or partly in a city in which a daily newspaper is published, and in that case by publishing notice of the sale, at least twice in each week for three successive weeks imme- diately preceding the sale, in one, or in the city of New York or the city of Brooklyn, in two such papers. Notice of the postponement of the sale must be published in the paper or papers wherein the no- tice of sale was published." Section 1434, above referred to, requires the sheriff who sells prop- erty by virtue of an execution, to previously give public notice of the time and place of sale as follows : 1. A written or printed notice thereof must be conspicuously fast- ened up, at least forty-two days before the sale, in three public places, in the town or city where the sale is to take place, -and also in three public places in the town or city where the property is situated, if the sale is to take place in another town or city. 2. A copy of the notice must be published, at least once in each of the six weeks immediately preceding the sale, in a newspaper pub- lished in the county, if there is one ; or if there is none, in the news- paper printed at Albany in which legal notices are required to be published. Kule 62 of the courts provides that, where lands in the city of New ' Abbott V. Curran, g8 N. Y. 665. 297 ; Laws of 1866, c. 690 ; Laws of ' As to notices of sale of lands in 1867, c. 162 ; Laws of 1870, c. 662. Hamilton county, see Laws of i860, c. 600 MORTGAGES OF REAL PEOPEETT. [§ 928. York or Brooklyn are sold under a decree, order, or judgment of any court, they shall be sold at public auction, between 12 o'clock at noon and three in the afternoon, unless otherwise specially directed. Such sales in the city of New York, unless otherwise specially directed, must take place at the Real Estate Exchange and Auction Koom (limited), Nos. 59 to 65 Liberty Street, in said city, but such sales are subject to such regulations as the Supreme Court, Superior Court, and Court of Common Pleas, in said city, may establish. Sales in other parts of the State than in said cities must be made at public auction between the hour of nine o'clock in the morning and sunset.' § 928. What is a sufficient publication. — Where a notice of sale of real property in the city of New York, under a decree of foreclos- ure to take place on the twentieth day of May, 1881, was published in two newspapers on April twenty -seventh (Wednesday) and thir- tieth (Saturday), May fourth (Wednesday), seventh (Saturday), eleventh (Wednesday), and fourteenth (Saturday), and in one of them on May twentieth, it was objected that during the week " immediately pre- ceding the sale," there was but one publication. It was held that the notice was sufficient. A week is a period of seven days, commencing at twelve o'clock on Saturday night and ending at the same hour on the following Saturday night. The first day is called Sunday and the seventh Saturday. The period of a week, therefore, is seven full days, and when a publication is directed to be made twice a week for three weeks, it means that there shall be a period of twenty-one days before the sale, calculated by weeks, during each of which two pub- lications shall be made, and this shall occur without regard to the day of the week when the publication was commenced. The publication having been made twice within the period of seven days and extend- ing over a period of twenty-one days, if was held that the statute had been complied with." Where the publication of notice is to be made for three weeks, twice in each week, it is not necessary that twenty-one days shall elapse between the time of the first publication and the sale, and where it is to be made once in each week for six weeks, the f uU space of six weeks need not elapse from the first publication before a sale can be made. If in the one case a notice is inserted twice in each week for three weeks, and in the other case once in each week for six ' Code of Civ. Pro. § 1384. ' Valentine v. MdCue, 26 Hun, 456. §§ 929-930.] SALE TJNDBE JUDGMENT OF EOEECLOSURE. 601 weeks, the statute is complied with.^ For example, a sale in fore- closure in the city of New York was advertised for December 28th, and a publication in a daily paper on the 9th, 12th, 16th, 19th, 23d, and 26th of that month was held to be sufficient." Publication of the notice in only one of several editions of a paper issued on the same day has been held to be sufficient." In the city of JS'ew York the Daily Register has been designated by the judges of the various courts as the official paper in which all legal notices should be pubhshed, under a statute allowing such a des- ignation to be made.* § 929. Form and contents of the notice of sale. — There is no law and no rule of the court rendering it absolutely necessary that the title of the cause should be inserted in the notice of sale ; but it is proper that the title should be briefly stated in the notice for the purpose of attracting the attention of parties who may be interested in the premises.^ The notice should contain nothing which might unduly enhance the value of the property or mislead the purchaser ;° neither should it contain a statement calculated to impair the price which would be ofEered.' When a piece of land composed of several lots is described to- gether in the decree, the notice of sale may properly follow the same description, though the sale may be intended to be made in separate parcels. The notice is simply such as is required by law that the premises described in the judgment will be sold. Eut how, whether in block or in parcels, is left for further inquiry.' Trifling inaccuracies in the notice of sale, not tending to mislead, are not fatal ; as, for instance, where the year when the property was to be sold, was stated to be " 1Y61 " instead of 1861." Slight discrep- ancies in the description of the property in the notice of sale, if not rendering the description uncertain, wiU not invalidate the sale.'" § 930. Presumption as to regularity. — In the absence of proof ' Olcott V. Robinson, 2i N. Y. 150, ' Ray v. Oliver, 6 Paige, 489. rev'g s. c. 20 Barb. 148 ; Wood v. More- ' Veeder v. Fonda, 3 Paige, 94. house, 45 N. Y. 368, aflS'g s. c. i Lans. ' Marsh v. Ridgway, 18 Abb. 262. 405 ; Sheldon v. Wright, 5 N. Y. 497. ° Hoffman v. Burke, 21 Hun, 580. ' Chamberlain v. Dempsey, 22 How. ° Jensen v. Weinlander, 25 Wis. 477. 356 ; s. c. 13 Abb. 421. '° Dickerson v. Small, 64 Md. 395 ; ^Guestv.TheCityof Brooklyn, 9 Hun, Reeside v. Peter, 30 Md. 120; Kaufman 198; Everson V. Johnson, 22 Hun, 115. v. Walker, 9 Md. 229; Alexander v. ■* Laws of 1874, c. 656. Walter, 8 Gill, 239. 602 MORTGAGES OF REAL PROPERTY. [§§ 931-933. to the contrary, tlie proper posting and publishing of the notices of sale will be presumed. Neglect of duty on the part of the officer in- trusted with making the sale must be proved, if at all, by affirmative evidence.' If the purchaser has no knowledge of irregularity in posting or publishing the notices, and pays the purchase money in good faith, his title will not be affected thereby." § 931. The officer appointed to sell must proceed. — It is the duty of the officer in whose hands the judgment or decree is placed, to proceed and execute it without delay, notwithstanding any direc- tions he may receive from the plaintiff or his attorney, if he is re- quested to do so by any of the parties to the suit who will be injured by a delay. The court will interfere upon motion of any party in interest, and will either commit the execution of the judgment to a junior incumbrancer, or if it is already in the hands of the officer, will direct a sale without delay. Where a sale is discontinued by the plaintiff without sufficient cause, and without the consent of the de- fendants, he will be charged personally for the expense incurred.' § 932. Order of sales in parcels. — The plaintiff has no right to control the officer in relation to the order of sales in parcels, more es- pecially if the judgment contains a direction that he shall ascertain in what order the different parcels should be sold, in order to protect the equitable rights of the several persons claiming to have interests therein, or liens upon the respective parcels, for in this respect he would act judicially. In an ordinary case, where the judgment con- tains no such provision, the officer performs a ministerial act, in the same manner as a sheriff who has an execution against two lots of land would act ministerially in determining which lot he would seU first. Where special judicial powers and duties are conferred upon the officer, it is possible that he would come within the equity of the provision of the Revised Statutes, which declares that no judge of any eourt^ can sit in any cause in which he would be excluded from being a juror by reason of consanguinity or affinity to either of the parties.* § 933. Duties of officer at the sale. — It is the duty of the sheriff ' Wood V. Morehouse, 45 N. Y. 368, ' Wood v. Morehouse, 45 N. Y. 368, 375 ; Clute V. Emmerich, 21 Hun, 375 ; Code of Civ. Pro. § 1386. 128. " Kelly V. Israel, 11 Paige, 147. ^ Snyder v. Stafford, 11 Paige, 71. § 934.] SALE TJNBEE JUDGMENT OF EOEECLOSUEE. 603 or referee making the sale to attend at the time aud place of sale, and : 1. To announce the terms of sale, if they are not contained in the notice of sale. 2. To ofEer the premises to the highest bidder, and receive bids so long as they are offered, waiting a reasonable time after a bid is made for another, and if no other is made, to strike o£E the premises to the highest bidder. 3. After marking down the premises to the highest bidder, to require him to sign a memorandum of the sale, and agreeing to complete the same. 4. If at the time appointed for the sale there are no bidders, or if from the numbers in attendance, or other sufficient cause, the officer is satisfied that a fair price cannot be obtained, it is his duty to postpone the sale, and not sacrifice unnecessarily the property.' If the highest bid is withdrawn, it is the duty of the officer making the sale to put up the premises at the next lowest bid, and if the per- son who made that bid has left, and no one present will give so much, the sale should be suspended until that bidder is notified.'' If the sale be made to a bidder who ofEers to pay in current funds or in a draft, and legal tenders or specie is demanded from him, it is the duty of the officer to suspend the sale for a reasonable time in order to allow the bidder to comply.' If the purchaser does not comply with the terms of sale, the referee may put the property up for sale again, but this must be done on such notice that no one will be misled by it.* If the officer making the sale assumes to take the check of the pur- chaser for the instalment of the bid in lieu of cash, he will make himself responsible for the amount, and the check will be treated as money in his hands." Where lands of an intestate, subject to a mortgage, were sold by a sheriff under an order of a court, which directed that the proceeds be paid into the court subject to its order, and the sheriff embezzled a portion of the proceeds, it was held that the amount embezzled could not be credited upon the mortgage, as the sheriff was not in any sense the agent of the mortgagee." § 934. Payment of taxes and assessments out of proceeds of sale. — It is provided by section 1676 of the Code of Civil Procedure ' Per MuixiN, J., in Bicknell v. * Lents v. Craig, 13 How. 72 ; s. c. 2 Byrnes, 23 How. 486. Abb. 294. ^ May V. May, ir Paige, 201. ' Robinson v. Brennan, go N. Y. 208. ' Baring v. Moore, 5 Paige, 48. ' Chalmers v. Turnipseed, 21 S. C. 126. 604 MORTGAGES OF EEAL PROPEETT. [§ 935. that where a judgment, rendered in an action for partition, for dower, or to foreclose a mortgage upon real property, directs a sale of the real property, the officer making the sale must, out of the proceeds, unless the judgment otherwise directs, pay all taxes, assessments, and water rates which are liens upon the property sold, and redeem the property sold from any sales for unpaid taxes, assessments, or water rates which have not apparently become absolute. The sums neces- sary to make these payments and redemptions are deemed expenses of the sale. This was, practically, the rule before the statute.' Where the premises have been sold for taxes, and the time for re- demption has not expired, it is proper for the referee to pay the sum which may lawfully be demanded to effect such redemption out of the purchase money; and this, although the plaintiff in the fore- closure is also the holder of the certificate of tax sale. There is noth- ing in the relation of the mortgagee toward the ownefthat prevents him from holding and enjoying the rights of a purchaser at a sale for taxes." § 935. Terms of sale cannot qualify judgment as to payment of taxes. — The duties of a referee upon a sale of mortgaged prem- ises are ministerial in their character. He is required, in the ordi- nary form in which judgments of foreclosure are made, to sell the premises to the highest bidder, and after receiving the purchase money, to pay therefrom his own fees and expenses on such sale, and then all liens upon said premises existing at the time of the sale for taxes, assessments, or prior mortgages, and from the residue to pay the costs awarded to the several parties, and the amount reported due to the plaintiff, with the interest thereon, or so much thereof as the purchase money will pay of the same. If such are the directions of the judgment, and if, without or before paying the prior liens, he pays the plaintiff and other parties the amounts awarded to them, he does so at his peril and in his own wrong. The terms of sale cannot vary the judgment, or relieve the referee from the performance of his duties. The appropriate remedy of the purchaser is by a motion in the action.' ' Lawrence v. Cornell, 4 Johns. Ch. ' Cornell v. Woodruff, 77 N. Y. 203. 542. Taxes unpaid on leasehold estate ' People ex rel. Day v. Bergen, 53 N. allowed to purchaser. MoUer v. Duryee, Y. 404; Easton v. Pickersgill, 75 N. Y. 21 W. Dig. 459. 5991 Weseman V. Wingrove, 85 N.Y. 353. § 936.] SALE TJIirDER JUDGMENT OE FORECLOSUEE. 605 If, however, the referee pays money to the plaintiff before paying the taxes, at the request of the purchaser, such purchaser cannot thereafter require the referee to pay out a greater amount than he has received. If the referee has varied the order of payments at the request of the purchaser, he cannot be punished therefor on the pur- chaser's motion.' If the referee in such a case, in ignorance of the existence of taxes, pays the whole amount of the purchase price to the plaintiff, without deduction, the court will, on motion of the purchaser, compel the plaintiff to pay the taxes." "Where the attorney for the holder of a second mortgage released the purchaser from immediate payment to the extent of his lien, this was held to discharge the sheriff from further liability. ° The payment of the taxes directed to be made by the referee is for the protection of the purchaser, and not to indemnify the owner of a prior hen not a party to the action ; and where the owner of a second mortgage foreclosed and purchased at the sale, and expressly waived the payment of taxes, the owner of the first mortgage, who thereafter foreclosed, was held not to be entitled to any relief.* § 936. Proper provision in terms of sale as to payment of taxes. — It is to be observed that the direction in the judgment does not indicate how the referee shall ascertain and satisfy himself as to the existence, number, ownership, and amount of the taxes and prior liens. It is at once apparent that the person most interested in ascer- taining those facts correctly is the purchaser, who ordinarily will take his title subject to any lien which has not been discovered and satis- fied. It is therefore, with proper limitation, a reasonable article to be inserted in the terms of sale that " all taxes, assessments, and other incumbrances which at the time of sale are liens or incumbrances upon said premises, will be allowed by the referee out of the pur- chase money, provided the purchaser shall, previously to the delivery of the deed, produce to the referee proof of such liens, and duplicate receipts for the payment thereof." It is reasonable, for by a compli- ance with it the referee may safely discharge his duty, and the pur- chaser has his best reliance, himself and his counsel, that his title shall not be incumbered. Moreover, it is believed that this article. ^ Easton v. Pickersgill, 75 N. Y. 599. ' Dickson v. Frazer, 9 Hun, 191. ' Poughkeepsie Savings Bank v. Winn, * Mutual Life Ins. Co. v. Sage, 28 56 How. 368. Hun, 595. 606 MORTGAGES OP EEAL PEOPEETY. [§ 937. or one like it, has for many years been inserted in terms of sale where express terms have been used, and has been made the mode agreed upon in which the referee should discharge his duty." General usage has great force, and the practical construction of the law by so many public officers has much of the weight of judicial decision.'' There is, however, this qualification to be made : this article in the terms of sale may not be held to override or limit the direction of the order of sale, which is mandatory. The referee is excused from the duty of making examination for the existence and amount of the liens, and for responsibility for accuracy therein. But if there are to his knowl- edge such liens in existence, it would be absurd to say that he may disregard the order under which he acts, and pay over the money as if there were not. And the remedy, in case of inaction by the pur- chaser, is by application to the court for its direction.' It is in conformity with the settled practice of the court to have taxes and assessments which are liens on the premises sold, deducted and paid out of the purchase money." This is sometimes done under special directions given in the judgment, but it is more frequently provided for by the terms of sale. If the mortgaged premises are leasehold, it is necessary to secure the full value of the property, that the purchaser should acquire title free and discharged from all arrears of rent. These arrears should be paid from the purchase money, and if this is not provided for by the judgment, it should be by the terms of sale, so that the amount of the purchaser's bid should represent the value of the premises with arrears of rent paid.' § 937. Terms of sale where title is incumbered by prior rights or liens. — " The terms of the sale must be made known at the time of the sale, and if the property, or any part thereof, is to be sold subject to the right of dower, charge, or lien, that fact must be declared at the time of the sale. If the property consists of two or more distinct buildings, farms, or lots, they shall be sold separately, unless other- wise ordered by the court ; and provided f urthel", that where two or more buildings are situated on the same city lot, they may be sold together." ° The suggestion that a sale upon credit may produce a higher price ' Post V. Leet, 8 Paige, 337. * Code of Civ. Pro. § 1676. ' Troup V. Haight, Hopk. 239. ' Catlin v. Grissler, 57 N. Y. 363 » Per FoLGER, J., in Easton v. Pick- « Code of Civ. Pro. § 1678. ersgill, 55 N. Y. 310. § 937.] SALE UNDER JUDGMENT OF EOEECLOSUEE. 607 is equally applicable to all sales, but judicial sales are not in general made upon credit without the consent of parties. On the motion of the plaintiff, however, an order may be made that the sale be upon credit to the extent of the sum due to him." The terms of sale may properly require an immediate payment of cash to an amount suffi- cient to guarantee the good faith of the purchaser and to indemnify the mortgagee for the expenses of a resale if the purchaser fails to complete. Ten per cent, of the amount of the bid is usually required, and an interval of twenty or thirty days is commonly permitted to allow the purchaser to investigate the title. INo reported case in this State fixes any arbitrary rule, but in Maryland a deposit of $300, re- quired on a sale for $5,600, was held to be reasonable." Where there are interests in the property paramount to the mort- gage, the terms of sale may properly be drawn so as to sell subject to these interests, and this without any authority contained in the decree.' Where persons holding prior mortgages are not made parties, and no provision as to them is made in the judgment, the sale must be made subject to such prior mortgages, and no portion of the proceeds of the sale can be applied to their payment.* If the priority or validity of an incumbrance is disputed, the sale should be subject to the alleged claim, in such form that the pur- chaser may contest it.° Where a junior mortgage to the one foreclosed is owned by the plaintiff, it is cut off by the sale, and it is irregular to insert a clause in the terms of sale requiring a purchaser to take subject to it." The terms of sale should not contain a clause requiring the pur- chaser to take the title " subject to all legal and prior incumbrances," and particularly is this the case where, by the terms of the decree, such incumbrances are payable out of the fund.' ' Where the mortgage is prior to an easement upon the property for light and air, the sale must be made free from the easement if its owner is made a party to the action, and such owner of the easement when brought into court as a defendant, and certain to be bound by ' Sedgwick v. Fish, Hopk. 594. Trayser v. Trustees of Ind. Asbury Uni- ' Maryland Perm. Land & Build. Soc. versity, 39 Ind. 556. V. Smith, 41 Md. 516. , ^ MoUer v. Muller, 12 Hun, 674. * Cromwell v. Hull, 97 N. Y. 209. ^ Homeopathic Mutual Life Ins. Co. * Bache v. Doscher, 67 N. Y. 429 ; v. Sixbury, 17 Hun, 424. ' Steen v. Clayton, 32 N. J. Eq. 121. 608 MORTGAGES OF EEAL PEOPEETT. [§ 938. the decree, should seek to modify the decree, and if he offers to bid tlie full amount of the mortgage debt and costs upon a sale subject to the servitude, the sale may be so made. The mortgagee cannot object, since his debt will be paid in full, and he has no greater right, and the mortgagor cannot assert an equity to have the sale so made as to free him from the easement. But when no limitation or con- dition is imposed by the decree, the statute determines the estate which passes by the foreclosure deed.' § 938. Adjourning the sale. — If the sale be adjourned by the officer, notice should be given to those who attend at the time and place of sale, and notice should also be published. The proper method of adjourning the sale includes the naming of the adjourned day ; but if this be prevented by the unwarranted act of the defendant in procuring a stay of proceedings, the sale will not be set aside as irreg- ular if no adjourned day be mentioned, a day being inserted in the* advertisement of the adjournment on which adjourned day the sale takes place.'' If a fixed day is named, the sale must be had on that day, and if there be a variance between- the notice announced on the adjournment and that published in the newspaper, the sale will be irregular.' A verbal promise of a third person to pay a sum of money, in con- sideration of an adjournment of a sale in foreclosure, is void under the statute of frauds.* Section 1678 of the Code requires that notice of the postponement of the sale must be published in the paper or papers wherein the notice of sale was published. But the adjournment may be for a time so short as not to allow any publication to be made, in which case it is clear that none could be made. Prior to the Code of Civil Procedure there was no positive rule requiring the publication of adjournments, and the omission of publication did not entitle any person, as matter of strict right, to avoid the sale. An application for that purpose had to be addressed to the discretion of the court, to be exercised in furtherance of justice.' If, after a notice of sale has been duly published, the defendant serves an undertaking to stay proceedings on appeal, the plaintifE is ' Rector, etc., Christ P. E. Church v. ' Miller v. Hull, 4 Den. 104. Mack, 93 N. Y. 488, rev'g 25 Hun, 418. *AckIey v. Parmenter, g8 N. Y. 425. ' La Farge v. Van Wagenen, 14 How. ' Per curiam in Stearns v. Welsh, 7 54. Hun, 676, affi'g s. c. 50 How. 186 § 939. J SALE trNDEE JUDGMENT OF FOEECLOSURE. 609 not required to abandon the proceeding, but the sale may be ad- journed until it can be determined whether or not the sureties will justify.' When the time for selling pursuant to notice has passed, and no valid sale has been made, or if valid the party elects to disregard it, he cannot again sell without the authority of the court unless he again advertises the sale.' § 939. Restraining sale by order of court. — It is the duty of the officer intrusted with the sale of the property to put it up for sale at such a time and under such circumstances as to make it bring the best price, without injuring the party entitled to the proceeds of the sale by delaying the payment of his debt. And where the officer, in violation of his duty, is proceeding to sell property under a judgment or decree at an improper time, when such sale must necessarily sacrifice the property, as during the raging of a pestilence, or while there is a threatened invasion, which will destroy all chance of fair competition by deterring bidders from attending the sale, it will un- questionably be the duty as well as the right of the court to interfere. But a court of equity has no legal right to interfere for the relief of an individual by arbitrarily suspending the ordinary operation of the laws for the collection of debts to meet his particular case, and the vain expectation that an extra session of Congress about to be held will settle the politics and finances of the country so effectually as to greatly increase the value of the property of the mortgagor, will not justify an adjournment of the sale.' Even the existence of a war, when there is no immediate danger of an invasion of the place where property is advertised to be sold, forms no sufficient ground for sus- pending the sale of mortgaged premises under a decree.* A sale made on an election day is not for that reason void, but if made on that day in defiance of the protest of the defendant, it be- comes at least very questionable, and although not of itself, perhaps, sufficient to warrant the court in setting aside the sale, yet, in con- nection with other facts, it cannot fail to produce an influence upon the court. Occupying the position of advantage, it behooves the plain- tiff to pursue his remedy with scrupulous care, lest he should inflict an injilry upon one who is comparatively powerless.' ' Ward V. James, 8 Hun, 526. * Astor v. Romayne, i Johns. Ch. ' Bicknell v. Byrnes, 23 How. 486. 310. 'McGown V. Sandford, g Paige, 290. ' King v. Piatt, 37 N. Y. 155. 39 610 MOKTGAGES OF EEAL PEOPEETY. [§§ 940-941. It is provided by Eule 67 that no order to stay a sale under a judg- ment in partition or for the foreclosure of a mortgage shall be granted or made by a judge out of court, except upon a notice of at least two days to the plaintifi's attorney. § 940. Special clause in deed as to interest sold. — Section 1244 of the Code of Civil Procedure, as originally enacted, required that the granting clause in a deed of conveyance of property sold pursuant.to a judgment, should contain a statement as to whose right, title, or interest was sold and is conveyed. The application of this rule to foreclosure cases proved so incon- venient that in 1879 the section of the Code was so amended as to apply only where property is sold pursuant to a judgment, " which specifies the particular party or parties, whose right, title, or interest is directed to be sold." ' § 941. Fees of the officer making the sale." — By the judiciary act of 1847 it was enacted that sales of lands which had previously been made by masters in chancery might be made by the sheriffs of the respective counties. The sheriff was to receive his disbursements for printer's fees, and was also to be entitled to receive the same fees as upon sales by virtue of an execution, but such fees should in no case exceed the sum of ten dollars. If the property was purchased by a person entitled to the proceeds of the sale, the sheriff's fees were not to exceed five dollars.' By Laws of 1869, c. 569, it was attempted to give to the sheriff of the city and county of New York exclusive power to make sales in foreclosure, and he was declared to be entitled in cases of sales in foreclosure to receive the following fees and no more: for receiving order of sale and posting notices of sale, ten dollars ; for drawing each deed of premises sold, five dollars ; for attending and adjourn- ing a sale at the request of the plaintiff in the action or by order of the court, three dollars, but no more than three such adjournments in one action shall be charged for ; for making report of sale, five dol- lars; for paying over surplus moneys, three dollars. And all dis- ' See as to forms for clause under sec- 2g8; i N. Y. S. Reptr. 66i, rev'g 32 Hun, tion before amendment, Randell v. Von 360; Keppler v. Merkle, 23 W. Dig. 380; EUert, 54 How. 363 ; 4 Abb. N. C. Richards v. Richards, 14 Hun, 25 ; 2 88. Abb. N. C. 93 ; Daly v. Jacott, 2 Abb. ' See as to fees of referee for sale in N. C. 97. partition. Race v. Gilbert, 102 N. Y. 'Laws of 1847, c. 280, § 77. § 941. j SALE TJlirDER JUDGMENT OF FOEECLOSUEE. 611 bursements made by him for printer's fees at the rate allowed by law therefor, fees of officers taking acknowledgments and administering oaths, and for internal revenue stamps affixed to conveyances exe- cuted anTi delivered by him, and all auctioneer's fees actually paid by him, but not to exceed for such auctioneer's fees twelve dollars for each parcel separately sold, which auctioneer's fees shall be paid by the purchaser of the parcel in addition to the amount bid by him therefor. This statute was pronounced unconstitutional in Oashin v. Meek (42 N. Y. 186) on the ground that it was a local act, embracing more than one subject, and that its title was bad ; and sales in foreclosure afterward, as before, were made by referees. By Laws of 18Y4, c. 192, amending the statute of 1869, it was enacted that when any sale is made by any officer other than the sheriff, no greater sum shall be charged or allowed than as prescribed in said act of 1869. This has been held to be constitutional.' Prior to the statute of 18'r4, and subsequent to that of 1869, the General Term of the First Department held, in Innes v. PurceU (2 N. Y. Sup. [T. & C] 538), that a referee who sold property under a judgment of foreclosure could charge no more than the sheriff could for the same service, and that there was no law authorizing him to exact more than ten dollars.'' Subsequently to this decision the same court held, in Philips v. Walker (4 Hun, 645), that the fees fixed by the statute of 1869 were the highest permissible, and that those might be allowed if no objection were made by the party who was affected by the payment. By Laws of 1876, c. 439, it is enacted that all sales of real estate made in the county of Kings under judgment or decree of any court, except sales made in actions of partition, except when both parties to the suit agree upon a referee to be appointed by the court, shall be made by the sheriff of the county of Kings. The fees allowed to the sheriff under this act in cases of sales on foreclosure are the same as those fixed by the act of 1869 above referred to, for the sheriff of the city and county of ISTew York, except that the auctioneer's fee is $10 instead of $12, as in the New York statute. By an amendment of section 309 of the Code, made in 1876, and ' Schermerhorn v. Prouty, 8o N. Y. ' Followed in Ward v. James, 8 Himv, 318 ; Richards v. Richards, 2 Abb. N. 526. Cas. 93. 612 MORTGAGES OF BEAL PKOPEETY. [§ 942. re-enacted in section 3307 of the Code of Civil Procedure, it is pro- vided that no greater sum than fifty dollars shall be charged by or allowed to any sheriff, referee, or other officer for his fees, percent- age, or services for any sale under a decree or judgment ■ of fore- closure. The effect of this provision has been determined to be to limit the fees chargeable and not to vest in the court a discretion to allow any sum to the sheriff or referee making the sale not exceeding the sum of fifty dollars.' By section 3307 of the Code of Civil Procedure, subdivision 11, it is provided that the sheriff shall receive for posting and publishing the notice of sale, selling, and conveying real property, in pursuance of a direction contained in a judgment, the like fees as for the same services upon the sale of real property by virtue of an execution ; but where real property is sold under a judgment in an action to fore- close a mortgage, the sheriff's entire compensation cannot exceed fifty dollars. The same section fixes these fees in detail. Section 3297 of the Code enacts that the fees of a referee appointed to sell real property pursuant to a judgment in an action, are the same as those allowed to the sheriff ; and he is also allowed the same disbursements as the sheriff.' It wiU be noted, however, that by section 3308 of the Code, the special statutory provisions, remaining unrepealed, relating to the fees and expenses of the sheriff of the city and county of New York, or the sheriff of the county of Kings, are not affected by the fee bill of section 3307, except that the sheriff's entire compensation for selling and conveying real property cannot exceed fifty dollars. In Walbridge v. James (56 How. 185 ; s. c. 16 Hun, 8), a referee, who had sold the property three separate times, was allowed $55 by the General Term of the Third Department, Boaedman, J., dissent- ing as to the extra $5. The fees of a referee on a sale are properly taxable, in the first in- stance, before the court at Special Term.' The referee may appeal from the order on such taxation to the General Term.* § 942. Fees of the auctioneer. — The only way in which auction- ' Schermerhorn v. Prouty, 8o N. Y. ' Lynch v. Meyers, 3 Daly, 261. 317. * Code of Civ. Pro. § 1294 ; Hobart v. » Lockwood V. Fox, (N. Y. C. P.) 3 W. Hobart, 23 Hun, 484. Law Bulletin, 37. § 942.] SALE UNDER JUDGMENT OF POKECLOSUBE. 613 eers can be compensated upon foreclosure sales is by making their fees as a part of the terms of sale, to be paid by the purchasers ; and if that course is not abused to the prejudice of defendants, there will be no reason for the court to interfere. No fee can be charged by an auctioneer upon an adjournment.' "Where the terms of sale provided that the purchaser was to pay the auctioneer's fees, " $25 for each parcel sold," it was held that the word " parcel " meant the piece or quantity of land put up and sold in a body, one piece and at one time, and pretended usage among auctioneers to construe the word " parcel " in such a case, so as to mean each of the lots into which the tract so sold had been divided, was declared not to control." By Laws of 1879, chap. 519, it is enacted that " No auctioneer shall hereafter demand or receive for his services in selling at public auction, in the counties of New York or Kings, any real estate di- rected to be sold by any judgment or decree of any court of this State, a greater compensation or fee than fifteen dollars for each par- cel separately sold ; but where such sale is made at any public sales- room, said auctioneer may demand and receive such further amount not exceeding two dollars for each parcel separately sold, as he may have actually paid for the privilege or right of making said sale in such salesroom as aforesaid ; but where one or more lots are so sold at public auction with the privilege to the purchaser of takiag one or more additional lots at the same rate or price, nothing herein con- tained shall be construed to prevent the auctioneer, making such sale, from demanding and receiving for his services the compensation or fee above allowed, for each additional lot taken by said purchaser under such option or privilege." The auctioneer is forbidden to divide his fee with the officer making the sale, or with any attorney in the action, and a violation of any of the provisions of the act is declared to be a misdemeanor. ' Ward V. James, 8 Hun, 526. ' Miller v. Burke, 68 N. Y. 615. CHAPTER XXVII. WHEK THE SALE SHOULD BE MADE IN SEP ABATE PAEOELS, AND OEDEE OP THE SALE OP SUCH PAECELS. SALE IN SEPARATE PARCELS. 3 943. Only part of debt due. 944. Sale of entire property. 945. Provisions of Code, only a por- tion of debt being due. 946. Stay on paying amount due. 947. How much of premises should be sold. 948. Selling for benefit of junior liens. 949. Supplemental order. 950. When the sale should be made in separate parcels. 951. Parcels described together. 952. Best results must be sought. 953. Sale in one parcel. 954. Protecting rights of plaintiff. 5 955. Examples of sales in one parcel. 956. Discretion of referee. ORDER OF SALE. 957. In what order separate parcels should be sold. 958. Inverse order of alienation. 959. In measuring equities. 960. Controlling principle. 961. Equities between mortgages and conveyances. 962. Undivided interests. 963. Direction in judgment as to order of sale. 964. Adjusting equities after sale. 965. Method of sale cannot control equities. SALE IN SEPARATE PAKCELS. § 943. Only part of debt due. — In cases where onlj a portion of the mortgage debt was due, it was the practice, prior to the Revised Statutes, to stay the sale when the mortgagor would come in before the sale and pay the amount due with costs, and to let the decree of foreclosure remain good to enforce payment of the future interest and instalments as they might respectively become due.' Where such an application was made before answer, it was sometimes re- quired that a decree of foreclosure should be entered by way of secu- rity and to save the trouble and expense of a new suit." Where the mortgaged premises were so situated that they could be sold in parcels to advantage, the decree directed that sufficient be sold to satisfy the part then due with the costs, and a provision was in- serted that an order might be obtained from time to time, as the ' Campbell v. Macomb, 4 Johns. Ch. 534. ' Lansing v. Capron, i Johns. Ch. 617. § 944.J SALE IN SEPARATE PABCELS. 615 interest or principal became due, for a future sale on the foot of the decree.' § 944. Sale of entire property. — If a part only of the mortgage debt were due, still the entire premises might be sold if they could not be divided without injury, and the proceeds might be applied, first in payment of that part of the debt already due, and next on that which had not yet matured. The object of the decree might not be to raise any part of the debt not due, yet the raising of the entire debt might be an unavoidable consequence of the sale, because the court, in order to raise what was due, might be obliged to sell the whole of the mortgaged premises if they consisted of one entire sub- ject incapable of being conveniently or safely divided." So, too, payment of an instalment which was not due at the time of the entry of decree, but which would become due before a sale could be made, might be provided for in the order of sale.' It was said by Chancellor Walworth that, in special cases, where the person in possession is not responsible for the debt, and the prem- ises are not a sufl&cient security, the whole of . the premises, or so much as is necessary to pay the whole debt and costs, should be sold, unless the defendant choose to pay the amount of the instalment which is due, before the sale, or will give security that the rest of the mortgage money will be paid when it is due.* In this respect he differed somewhat from Chancellor Kent, who could not perceive that the circumstance that the premises were in a state of injury and decay from the action of storms, and had thereby become a precarious security, gave the complainant any right or title in equity to have the premises sold for a debt not due. " The security was taken with knowledge of the situation and character of the property and of the risks to which it was exposed. It does not belong to the court to give a party a better security than he elected to take, where there has been no fraud or mistake, nor any abuse or waste of the subject." ' In Cox V. Wheeler (7 Paige, 248), the complainant had held a mortgage upon real estate, only a portion of the money secured by which was due, and he advertised a sale of the property thereunder ' Brinckerhoff v. Thallhimer, 2 Johns. ' Lyman v. Sale, 2 Johns. Ch. 488. Ch. 486 ; Lyman v. Sale, 2 Johns. Ch. ^ Suffern v. Johnson, i Paige, 450 ; 487 ; Campbell v. Macomb, 4 Johns. Ch. Hall v. Bamber, 10 Paige, 296. 534. ' Campbell v. Macomb, 4 Johns. Ch. ' Campbell v.Macomb,4 Johns. Ch. 534. 534; Blazey v. Delius, 74 111. 299. 616 MOETGAGES OF REAL PEOPEfiTY. [§ 945. on a statute foreclosure. The premises were sold subject to the fu- ture instalment, and were bid in by the complainant. There was a surplus which the complainant sought to have applied on the last in- stalment. It was held that the mortgaged premises became the pri- mary fund for the payment of the amount of the incumbrance ; that the mortgagee, having become the purchaser, the incumbrance be- came merged in the legal estate in the equity of redemption, and the debt was, in equity, extinguished. The mortgagor was determined to be entitled to the surplus. § 945. Provisions of Code, only a portion of debt being due. — The Revised Statutes were mainly declaratory of the law as it existed before their passage, except that they favor the construction of Chan- cellor Kent, in eases where the only reason for selling the entire premises is found in the fact that the security is inadequate. It is, perhaps, for this reason that Chancellor "Walworth thought that the power of the court in this respect had been somewhat restricted by the Revised Statutes.' The provisions of the Revised Statutes on this subject ' have been repealed, and the substance of them have been re-enacted in the Code of Civil Procedure, as follows : " § 1634. Where an action is brought to foreclose a mortgage upon real property, upon which a portion of the principal or interest is due, and another portion of either is to become due, the complaint must be dismissed, without costs against the plaintiff, upon the de- fendant paying into court at any time before a final judgment direct- ing a sale is rendered, the sum due and the plaintiff's costs. " § 1635. In a case specified in the last section, if, after a final judg- ment directing a sale is rendered, but before the sale is made, the defendant pays into court the amount due for principal and interest, and the costs of the action, together with the expenses of the pro- ceedings to sell, if any, aU proceedings upon the judgment must be stayed ; but upon a subsequent default in the payment of principal or interest, the court may make an order directing the enforcement of the judgment, for the purpose of collecting the sum then due. " § 1636. "Where the mortgage debt is not all due, and the mort- gaged property is so circumstanced that it can be sold in parcels with- out injury to the interests of the parties, the final judgment must ' Bank of Ogdensburgh v. Arnold, 5 Paige, 38. " 2 R. S. 192, §§ 161 to i66 inclusive. §§ 946-947.] SALE IN SEPARATE PAECELS. 617 direct, that no more of the property be sold, in the iirst place, than is sufficient to satisfy the sum then due, with the costs of the action and expenses of the sale ; and that, upon a subsequent default in the payment of principal or interest, the plaintiff may apply for an order, directing the sale of the residue, or of so much thereof as is necessary to satisfy the amount then due, with the costs of the appli- cation and the expenses of the sale. The plaintiff may apply for and obtain such an order as often as a default happens. " § 1637. If, in a case specified in the last three sections, it appears that the mortgaged property is so circumstanced, that a sale of the whole will be most beneficial to the parties, the final judgment must direct that the whole property be sold ; that the proceeds of the sale, after deducting the costs of the action, and the expenses of the sale, be either applied to the satisfaction of the whole sum secured by the mortgage, with such a rebate of interest, as justice requires ; or be first applied to the payment of the sum due, and the balance, or so much thereof as is necessary, be invested at interest for the benefit of the plaintiff, to be paid to him from time to time, as any part of the principal or interest becomes due." § 946. Stay on paying amount due. — After the judgment is en- tered, the plaintiff is not required to accept payment of the amount due from the hands of the defendant, but if the latter wishes a stay in the execution of the judgment, it is incumbent on him to move the court for leave to make the payment into court, and procure an order for a stay. The plaintiff will then be entitled to have a pro- vision inserted in the judgment for its enforcement on future de- faults. An observance of the statutes in these respects is highly important, for both parties are then made acquainted with the terms of the decree, and have an opportunity to know and to protect their rights. Payment made by the mortgagor to the mortgagee without an order of the court making provision for future instalments, is likely to lead to confusion and trouble.' § 947. How much of premises should be sold, — Under orders of reference in cases arising under this statute, the first duty of the referee is to ascertain whether the mortgaged premises are so situated that they can be sold in parcels, without injury to the interests of the parties. This provision of the statute relates entirely to the material ' Long V. Lyons, 54 How. 129. 618 MORTGAGES OP REAL PEOPEETZ. [§ 948. condition of the mortgaged property. If the referee finds that the property cannot be sold in parcels, as he would be bound to do, in eases where it is indivisible for use or enjoyment, as in the case of a mill, a store, a dwelling-house, or a farm, or single piece of property whose value consisted in keeping it together in its unity or entirety, such finding will practically end his duties under the order. And so it will if he finds that the mortgaged premises consist of distinct parcels of land, whose relative value is entirely independent of each other. In such cases he will so report, and the land must be sold accordingly. The report of the referee is but part of the evidence before the court, and upon which it is called upon to decide whether it will or will not be most beneficial to the parties to decree a sale of the whole premises in one parcel in the first instance. The court will look to the pleadings, and will receive other evidence in its dis- cretion, and wiU consider any stipulations offered, and admissions of the parties or of other persons presented to it on the hearing. All the plaintiff is entitled to is to receive his pay upon the mortgage, in cash, as the payments fall due. If parcels of the land can be sold for cash sufficient to pay the amount due to the plaintiff, without im- pairing his security for the balance of his debt, or the relative value of the residue of the land, it ought to be so sold, and the court cannot hold that it will be most beneficial to the parties to sell the whole land in one parcel. * The court may direct a sale of the whole mortgaged premises if such a sale is found to be most conducive to the ends of justice in reference to the equitable rights of all the parties, although a part only of the mortgage debt has become due ; but the fact that the premises are a meagre and scant security, and are going to ruin and decay, does not of itself justify a sale to satisfy a debt not yet due." § 948. Selling for benefit of junior liens. — A foreclosure suit is not entertained for the benefit of the plaintiff alone. The rights of all of the parties are before the court, and where a junior mort- gagee is made a party the court may make a decree directing a sale of so much of the mortgaged premises as will be sufiBeient to satisfy the amount due on such junior mortgage, and all intermediate liens and incumbrances, in addition to the amount of the plaintiff's mortgage and costs." But before such junior mortgage can be 'Per E. D. Smith, J., in Gregory v. ' Blazey v. Delius, 74 111. 299. Campbell, 16 How. 417. ' Pancoast v. Duval, 26 N. J. Eq. 445. § 949.] SALE IN SEP ABATE PAECELS. 619 paid, the report of sale must be filed, and the surplus moneys brought into court, so that other persons, who have not been made parties to the suit, may have an opportunity to file claims to such surplus moneys.' The same rule will prevail in favor of any other junior incum- brancer, as, for instance, a judgment creditor or the holder of a mechanic's lien. As these liens are cut off by the sale, they must be protected by the court which orders the sale, or they are lost. Hence arises the necessity of making all the holders of liens of a date later than that of the mortgage, parties to a foreclosure suit. The equities of all such parties are as much before the court, and as much the ob- jects of its care, as those of the owner of the mortgage primarily to be foreclosed. The court cannot, of course, content itself with giving such directions as will certainly produce satisfaction of the plaintiff's lien, without regard to their effect upon those which are subsequent ; but should make such order as, while it fully maintains the priority of the plaintiff, wUl best protect the rights and preserve the equities of all.^ § 949. Supplemental order. — If the judgment fails to protect the equitable rights of the parties before the court, the court has power to supply the defect by a supplemental order,' and such order may be made after enough of the property has been sold to satisfy the plain- tiff's claims." While it is in the power of the court to order a sale of more of the mortgaged property than is required to satisfy the demand of the plaintiff, the ordinary form of judgments in foreclosure does not justify the referee to make any sale further than is required to pay the amount decreed to be due to the plaintiff, with costs and ex- penses. In McBride v. Lewisohn (17 Hun, 524), an excessive amount of property was sold and the surplus was paid into court. The purchaser of the parcel last sold objected that the decree fur- nished no authority for selling such parcel. In this point the court agreed with him, but, it further appearing that proceedings had been taken to distribute the surplus on notice to all parties, and that the owner of the equity of redemption had made no objection, this was ' Beekman v. Gibbs, 8 Paige, 511. Farley, 62 Id. 628 ; Barnes v. Stoughton, ''Per Selden, J., in Livingston v. 10 Hun, 14. Mildrum, ig N. Y. 440 ; De Forest v. ' Malcolm v. Allen, 49 N. Y. 448. * Livingston v. Mildrum, 19 N. Y. 440. 620 MOETaAGES OF REAL PEOPEETT. [§§ 950-951. held to estabKsh the validity of the sale. The owner of the equity of redemption was said to be the only person having any right what- ever to question it, and by omitting to take any action with regard to the alleged improper sale, and by permitting the proceedings to go on in reference to the surplus occasioned by the sale, he was held to have waived all right to any consideration on that subject and to be estopped. § 950. When the sale should be made in separate parcels. — Section 1678 of the Code of Civil Procedure' provides that " if the property consists of two or more distinct buildings, farms, or lots, they shall be sold separately, unless otherwise ordered by the court ; and provided further, that where two or more buildings are situated on the same city lot they may be sold together." The word " shall " in this section is directory merely,'' and if a sale is, without direction of the court, made in one parcel, it would con- stitute an irregularity merely that the court might disregard if such a method of sale was determined to have been proper. The provision of the statute directing a sale in separate parcels, except in unusual cases, is simply ^ declaration of the law as admin- istered before the passage of any positive enactment. The object of the sale is to make the property produce the largest sum, and a sale in parcels is generally best for the interests of all concerned. Such a sale will produce the most, because it will accommodate the greatest number of bidders, and it tends to prevent odious speculations upon the distresses of the debtor.' § 951. Parcels described together. — The rule holds good whether the parcels be described together or separately in the mortgage. The mortgagor may by his mortgage subject the whole property to the lien of the mortgage, leaving in himself only an equity or right to redeem, but neither the sale nor the manner of conducting it is regu- lated by the contract. The mortgagee has a right to nothing more than the application of so much of the property as may be necessary to the satisfaction of his debt and costs,* and the sale will be made in 'Substitute for 3 R. S., 5th ed. i860, * Ellsworth v. Lockwood, 42 N. Y. 89; § 6. Jencks v. Alexander, 11 Paige, 619 ; 2 Wallace v. Feely, 61 How. 225 ; Tiernan v. Wilson, 6 Johns. Ch. 411 ; Cunningham v. Cassidy, 17 N. Y. 276. Hewson v. Deygert, 8 Johns. 333 ; Mo- ' Woods V. Morrell, i Johns. Ch. 502 ; hawk Bank v. Atwater, 2 Paige, 61, Corley v. Lashley, 15 N. J. Eq. 116. 62. §§ 952-954.J SALE IN" SEPAEATE PAECELS. 621 such a way as to pay Ms just demands withoat inflicting unnecessary loss upon his debtor.' § 952. Best results must be sought. — The question must, there- fore, always be as to what method of sale will produce the best results, and while the presumption is, in cases where the parcels are capable of distinct and separate enjoyment, that they will bring a larger sum if sold separately than if sold together, the court may direct the officer making the sale to sell the entire mortgaged property together, if in the special case it is thought wise so to do. This provision was intended to apply to cases where from the peculiar situation of the parcels with respect to each other, it is evident that, if owned by one person and kept together, they wiU be more valuable than the aggregate values of the several parcels could be to several individuals if owned by them in severalty ; or where, in consequence of some prior incumbrance upon the whole of the premises, purchas- ers would be unwilling to purchase only a portion of the property, subject to such incumbrance." § 953. Sale in one parcel. — If the mortgaged premises consist of separate parcels whose relative values are entirely independent of each other and which may be sold separately, the sale should be so made ; but if, for any reason, the values of the parcels depend upon each other, and upon being held and enjoyed by the same owner, they should be sold together." The fact that the defendants, or some of them, are infants can make no difference in the rule." § 954. Protecting rights of plaintiff. — Much depends upon the circumstances of each individual case. The plaintiff has a right to be protected to the extent of his lien, and if he acts in good faith, and no other party in interest will furnish him security, he will in doubt- ful cases be allowed to designate the manner of sale.^ Oriswold v. Fowler (24 Barb. 135) was a case of this kind. The property was situated on Staten Island and was originally mortgaged in one parcel, but it was afterward laid out into city lots facing on streets. The plaintiff showed his willingness to accept any method of sale which would be suggested, provided security were furnished him, but in the ' Wolcott V. Schenck, 23 How. 385. ^ Gregory v. Campbell, 16 How. 417 ; ' American Ins. Co. v. Oakley, 9 Suffern v. Johnson, i Paige, 450. Paige, 259 ; Cunningham v. Cassidy, 17 * Mills v. Dennis, 3 Johns. Ch. 367 ; N. Y. 276. Brevoort v. Jackson, i Edw. Ch. 447. ' Brown v. Frost, Ho£f. 41. 622 MORTGAGES OF REAL PEOPEKTT. [§ 955. absence of security he objected to a sale in parcels, because tlie spaces marked out for streets could not thus be sold. A sale made in one parcel was therefore held to be proper. If, on the other hand, the security is ample, the judgment or pref- erence of the mortgagee is not entitled to consideration by the ref- eree.' In Ellsworth v. Lockwood (42 IST. T. 89), the plaintiff re- fused a proposition made by a junior incumbrancer to bid the entire amount due for a single parcel of the mortgaged premises and sold the whole together, and, in setting aside the sale as irregular, much stress was laid upon this fact. § 955. Examples of sales in one parcel. — In Lane v. Conger (10 Hun, 1), the mortgagor, subsequent to the execution of the mort- gage, laid the land out in lots fronting on certain streets and lanes which were shown on a map, but which were not dedicated to the public. A sale of the whole mortgaged premises in one parcel was sustained. No dedication of streets to public use after the giving of a mort- gage can divest the lien of the mortgagor, and he is entitled to a method of sale that will dispose of the entire security if required to pay his debt." Where property is mortgaged in one parcel and is by the same description decreed to be sold, the officer making the sale is under no obligation to divide it into lots. If such a division is thought desir- able, the persons wishing for it should, before the sale, ask the direc- tion of the court, and a survey and division may, if deemed expe- dient, then be ordered at the expense of the fund.' If the premises, though consisting of several lots, are so built upon as really to constitute one establishment, they may properly be sold in one parcel.* Where, subsequent to the execution of a deed of trust, another deed of trust was made by the same grantor to another grantee on adjoining lands, and buildings extended over the line and stood upon both parcels, it was held that the facts that the same grantor had owned both parcels, and that to sever the lots would be destructive of the value of both, would justify the court in directing that both ' Walworth v Farmers' Loan & Trust ler, 24 Barb. 135 ; People ex rel. Weber Co., 4 Sandf. Ch. 51. v. Herbal, 96 111. 384. ' Hague V. Inhabitants of West Hobo- " WoodhuU v.Osborne, 2 Edw.Ch. 615. ken, 23 N. J. Eq. 354 ; Griswold v. Fow- * McLaughlin v. Teasdale, 9 Daly, 23. §§ 956-957.] SALE IN SEPARATE PARCELS. 623 lots should be sold together, reserving to the second grantee his pro- portional part of the proceeds." The sale need not be made in separate parcels where the parcel which the defendant desires to be sold first or separately has no fixed, known or definite boundaries. It must be a distinct tract or parcel which can be conveniently sold, described, and conveyed.' If property is put up for sale in separate parcels and no bidders can be found willing to purchase in that way, the officer conducting the sale may properly offer it en masse.' § 956. Discretion of referee. — The discretion of the referee, if honestly and fairly exercised, in the absence of any special circum- stances tending to show a clear mistake of judgment or of a desire to do injustice, will in most cases control, and after the sale has been made, it will not on slight grounds be set aside.* The presumption is that where the separate parcels are distinctly marked for separate use and enjoyment, they should be sold separately ;° but where they adjoin each other, and have previously been used, enjoyed, and con- veyed together," the manner in which the sale should be made rested, prior to the present Code, in the sound discretion of the referee. The fact that the sale is intended to be made in separate parcels need not be specified in the notice of sale.' OEDEE OF SALE. § 957. In what order separate parcels should be sold. — If the mortgaged premises are to be sold in parcels to different per- sons, the several parcels should be sold in the order of their equit- able liability to pay the mortgage debt. This, in the absence of special circumstances, is in the inverse order of their alienation by the debtor. "When one parcel is aliened by the debtor, the parcels remaining in his hands are the primary fund for the payment of the debt, and so on as each is sold. If anything remains in his hands when the lien comes to be enforced, that is to be first subjected to it, and his most recent grantees or mortgagees must contribute toward the payment of the debt in the first instance before those whose rights vested earher. This rule has its foundation in the equit- able principle, that where a creditor has two funds for the security ' Pepper v. Shepherd, 4 Mackey (D. * Whitbeck v. Rowe, 25 How. 403. C.) 26g. ' Wolcott V. Schenck, 23 How. 385. ' Ellsworth V. Lockwood, 9 Hun, 548. * Anderson v. Austin, 34 Barb. ' Van Valkenburgh v. Trustees of 319. Schools, 66 111. 103. ' Hoffman v. Burke, 21 Hun, 580. 624 MORTGAGES OF REAL PROPERTY. [§§ 958-959. of his debt, and another party has an interest in one only of said funds, without any right to resort to the other, equity will compel the creditor to take his satisfaction out of the fund in which he alone has an interest, so that both parties may, if possible, escape without injury.' § 958. Inverse order of alienation. — "When, therefore, the debtor has conveyed or mortgaged one parcel of the mortgaged premises, retaining the rest, it is the right of his grantee or mortgagee to de- mand that the land still remaining in the hands of his grantor or mortgagor shall be first sold. The mortgage creditor may sell all the parcels if their sale is necessary to satisfy his lien, but he must first take the property in which the junior grantee or mortgagee of one parcel has no interest. The right of the junior grantee to insist upon this order of sale becomes vested when his title is perfected, and his equitable claim against the parcels which remained in the hands of his grantor at the time of the grant to him, follow those parcels into the hands of subsequent grantees. The right, of each purchaser or incumbrancer to have the parcels remaiqing in the hands of the debtor at the time he makes his purchase or acquires his lien applied to the payment of the debt, cannot be disturbed by anything which takes place after his title or lien is perfected, and each new claimant must take subject to prior equities." § 959. In measuring equities between difi^erent junior grantees or mortgagees, the dates of the vesting of their rights become im- portant. When parcels are sold under various judgments, the por- tions should stand as of the dates when the respective judgments became hens, and not as of the dates of actual sales, for the sales, ' Ingalls V. Morgan, lo N. Y. (6 Seld.) 22 Barb. 54 ; Barnes v. Mott, 64 N. Y. 178, and cases cited. 397. 402 I Coles v. Appleby, 87 N. Y. 'Gill V. Lyon, I Johns. Ch. 447; 114; Mahagan v. Mead, 63N.H. 570; Clowes V. Dickenson, 5 Id. 235 ; James Brown v. Simons, 44 N. H. 475 ; Mor- V. Hubbard, i Paige, 228 ; Gouverneur rison v. Beckwith, 47 B. Mon. (Ky.) 73 ; V. Lynch, 2 Id. 300 ; Jenkins v. Freyer, 16 Am. Dec. 138 ; McCullom v. Turpie, 4 Id. 47 ; Guion v. Knapp, 6 Id. 35 ; Adm'r, 32 Ind. 146 ; Williams v. Perry, Skeel V. Spraker, 8 Id. 182 ; Patty v. 20 Ind. 437 ; Niles v. Harmon, 80 111. Pease, 8 Id. 277 ; Schryver v. Teller, 9 396 ; Hosmer v. Campbell, 98 111. 572 ; Id. 173 ; Kellogg v. Rand, 11 Id. 59 ; Orvis v. Powell, 98 U. S. 176. By Laws The New York Life Ins. & Trust Co. v. of 1839, c. 381, provision is made for the Cutler, 3 Sandf. Ch. 176 ; Stuyvesant v. sale of premises mortgaged to the State, Hall, 2 Barb. Ch. 151 ; Ferguson v. on the foreclosure of such mortgages, in Kimball, 3 Id. 616 ; Lafarge Co. v. Bell, parcels in the inverse order of alienation. §§ 960-961.] SALE IN" SEPARATE PARCELS. 625 whenever they take place, are of the respective interests upon which the several judgments were liens.' Where a mortgagor sells parcels of the mortgaged property to dif- ferent purchasers without knowledge of the mortgage, he who first receives his deed, and not he whose deed was first recorded, is pro- tected, and the land of the latter must first be sold." § 960. Controlling principle. — The great principle underlying all the cases is that each owner shall pay his own debts. If the mort- gagor should convey one parcel and receive the full price for it, or if he should mortgage it and receive the consideration for the mortgage, it would be plainly unjust for him to cast upon his grantee or upon his mortgagee the necessity of either paying twice for the land or of having it sold to discharge the mortgage debt. His own land should go to pay his own debts, and there would be no equity in compelling his subsequent grantee or mortgagee to discharge an obligation, the consideration for which was never received by him. Oases may arise, however, where the payment of the mortgage debt or a part of it is assumed by the junior grantee,' or where other circumstances inter- vene which will render a different rule proper. So, too, there may be cases where equity requires that each portion of the mortgaged premises shall bear its proportion of the mortgage debt, as where tenants in common mortgage lands for a joint debt, and afterward make partition.* An agreement may be made between parties fixing the order of priority of sale of the different parcels of the mortgaged premises owned by them respectively, and will be enforced if found not to be inequitable." § 961. Equities between mortgages and conveyances. — As between mortgages of different dates, the rule of selling inversely in the order of their priority in point of time prevails, but as between a mortgage of an earlier date and a conveyance of a later, the mort- gaged parcel must be sold first. A subsequent mortgage upon a part of the equity of redemption by the owner of the whole of the mort- gaged premises is only an alienation of that part to the extent of the ' Woods V. Spaulding, 45 Barb. Bank of Orleans, 9 Paige, 649 ; Warren 602. V. Boynton, 2 Barb. 13. ' Ellison V. Pecare, 29 Barb. 333. * Rathbone v. Claii, 9 Paige, 648. ' Bowne v. Lynde, 91 N. Y. 92 ; Hal- ' Cowdrey v. Carpenter, i Abb. Ct. of sey V. Reed, 9 Paige, 446 ; Torrey v. App. Dec. 445. 40 626 MORTGAGES OF EEAL PROPEETT. [§ 963. money due on such junior mortgage, and for whicli the owner of such junior mortgage has no other security which should in equity be first resorted to. If a part of the mortgaged premises has been mortgaged a second time and the residue thereof has been sold abso- lutely subsequent to the second mortgage, the part mortgaged shoidd be sold first and the surplus proceeds of that sale beyond the amount of principal and interest due on the second mortgage should be ap- plied in payment of the first mortgage, before resorting to a residue of the premises for that purpose which was conveyed absolutely.' In a case where successive conveyances are to the same person, all subject to the original mortgage, the title to all remaining in the grantee at the time of the foreclosure, who is also personally liable for any deficiency arising after the sale of the whole, such grantee can haye no equity to have the property sold in parcels in the inverse order of the conveyances to him.'' § 962. Undivided interests. — There is no principle upon which an undivided interest in property can be sold, if the whole is jointly pledged for the mortgage debt, and the legal presumption is, that a piece of property will not sell as well in individual moieties as the whole will together. If two tenants in common join in mortgaging their property for their joint debt, the court will not compel the mortgagee to adopt a disadvantageous method of sale in order to ena- ble them the more easily to adjust their equities as between them- selves.' The rule as to making the sale in parcels in the inverse order of alienation will not be applied where the court .can see that its enforce- ment may prejudice the mortgagee in the collection of the debt due him,' and it has no application to mere undivided interests in the property." If an undivided interest in a piece of real estate is prima- rily chargeable with the mortgage debt, the whole parcel must, be sold, and the equities between the respective owners must be worked out in the application of the proceeds of the sale.' There may be cases where only an undivided interest should be ' Kellogg V. Rand, it Paige, 59. Dec. 253 ; s. c. 4 Keyes, 241 ; Cashman •» Steere v. Childs, 15 Hun, 511. v. Martin, 50 How. 337. 3 Frost V. Bevins, 3 Sandf. Ch. 188 ; ' Van Slyke v. Van Loan, 26 Hun, Van Slyke v. Van Loan, 26 Hun, 344 ; 344, 347 ; Cashman v. Martin, 50 How. Cashman v. Martin, 50 How. 337. 337. * Smart v. Bement, 4 Abb. Ct. of App. ' Van Slyke v. Van Loan, 26 Hun,. 344. §§ 963-964. J SALE IN SEPARATE PARCELS. 627 sold, — as, if a bid is offered to an amount exceeding the claims of the plaintiff, for such undivided interest.' § 963. Direction in judgment as to order of sale. — It is a mat- ter of course at the time of making a decree of foreclosure and sale, upon a mere suggestion that separate portions of the mortgaged premises are held by different persons under conveyances or mort- gages subsequent to the mortgage of the plaintiff, to insert a provision in the judgment vrhich wUl enable the referee or sheriff to sell in such a manner as to protect the rights of the defendants respectively. The provision usually inserted in the decree in such cases is, that if it shall appear to the officer who is to make the sale that separate parcels of the mortgaged premises have been conveyed or in'cumbered by the mortgagor, or by those claiming under him subsequent to the plain- tiff's mortgage, such officer shall sell the same in the inverse order of alienation, according to the equitable rights of the parties who are subsequent grantees or incumbrancers, as such rights shall be made to appear to him." This qualification of the discretion to sell in the inverse order of alienation, that it shall be according to the equitable rights of the subsequent grantees or incumbrancers is necessary to meet special cases. It should always be inserted in the judgment when such judgment directs the sale of the premises in parcels in the inverse order of alienation.' Under a decree thus drawn, if the grantee of a portion of the premises was, by virtue of his convey- ance, entitled to a right of way or other easement, in the residue of the premises which belonged to the grantor subsequent to such con- veyaoce, it would be a matter of course for the officer to sell such residue subject to such right of way, or other easement, in favor of the owner or purchaser and his heirs and assigns." Where a difference of opinion exists as to the proper order of sale, this should be submitted to the court upon a proper application before the sale is had.' § 964. Adjusting equities after sale.^When the entire mort- gaged premises are to be sold it can make but little difference as to which parcel is sold first. The proceeds of the sale will go into court ' Quaw V. Lameraux, 36 Wis. 626. * N. Y. Life Ins. & Trust Co. v. Mil- ''Knickerbackerv.Eggleston,3How.i30. nor, i Barb. Ch. 353. ' N. Y. Life Ins. & Trust Co. v. Mil- ' St. Joseph Manuf'g Co. v. Daggett, nor, I Barb. Ch. 353 ; Rathbone v. Clark, 84 111. 556. 9 Paige, 648. 628 MOETGAGES OV EEAL PEOPERTT. [§ 965. together as a common fund, and the conrt will see that equity is done as between the owners of the various parcels. If the officer making the sale pays more than a proper proportion of the proceeds of any parcel toward the satisfaction of the plaintiffs debt and costs, the court would of course direct it to be refunded out of the proceeds of the other parcels in settling the rights of the junior claimants and incumbrancers as between themselves." The order of the sale of separate parcels is mainly of interest to owners of such parcels, who desire that their possession shall not be disturbed, but the manner of sale, as to whetlier it should be in par- cels or not, and if in parcels, in what parcels, is frequently of much greater importance to junior incumbrancers and claimants than the mere order of sale would be. This should be in such a way that the equities of the various parties can be easily adjusted by the court npoTi the reference as to the surplus proceeds of the premises. , If there are conflicting claims to the surplus which require any special form of sale, application should be made to the court before the sale, so that the manner of sale may be fixed and determined." It has been said that one defendant in a foreclosure suit may set up an equity by answer so as to have the order of sale determined before judgment," but this may admit of doubt,' and the better way is to raise the question by mere motion. § 965. Method of sale cannot control equities. — The rules which regulate both the manner of sale, whether in parcels or other- wise, and the order of sale when in parcels, are mere rules of practice and of convenience, and, while the observance of them frequently preserves substantial rights, the neglect of them does not work the forfeiture of equities which the court finds itself able to recognize and enforce.' If land, not equitably bound as between it and other property for the payment of a mortgage, \be sold, the owner of the property relieved from its burden may be compelled to make good the loss," even when the person injured has been negligent in assert- * Snyder v. Stafford, ii Paige, 71; ' N. Y.' Life Ins. & Trust Co. v. Cut- Van Slyke V. Van Loan, 26 Hun, 344, ler, 3 Sandf. Ch. 176. 347. * Smart v. Bement, 3 Keyes, 241 ; s. ^ Vandercook v. The Cohoes Savings c. 4 Abb. Ct. of App. Dec. 253 ; Farmers' Institution, 5 Hun, 641 ; Snyder v. Staf- Loan & Trust Co. v. Seymour, 9 Paige, ford, II Paige, 71; Bard v. Steele, 3 539; Miller v. Case, Clarke, 395. How. no ; Collier v. Whipple, 13 Wend. ' Snyder v. Stafford, 11 Paige, 71. 229 ; King v. Piatt, 37 N. Y. t6i. « James v. Hubbard, i Paige, 228. § 965.J SALE IN SEPAKATE PABCELS. 629 ing his rights ;' and where several parcels are sold together under a prior mortgage, the court wiU inquire into the proportion of the pur- chase price which each parcel contributed toward the entire price, in order to determine the equities as between the claimants to the surplus.'' There may be cases where a sale in parcels upon any plan that may be suggested would operate inequitably, while complete justice can be done if the sale is made in a single parcel, and in such cases the court is not embarrassed by any technical rule. Thus, where there was a first mortgage upon a parcel of land in a city, one hundred feet in width, and there were also two junior mortgages, one being upon sixty feet in width and the other upon forty feet in width ; and the entire property was insufficient for the payment of all of the mort- gages, and a sale in parcels would have resulted in leaving a surplus for the devisee of the mortgagor, it was held that all of the land should be sold in one parcel. ° ' Clowes V. Dickenson, 5 Johns. Ch. 235 ; s. c. affi'd g Cow. 405. " Oppenheimer v. Walker, 3 Hun, 30 ; s. c. 5 N. Y. Sup. (T. & C.) 325 ; Sav- ings Bank of Utica v. Wood, 17 Hun, 133. ' Bernhardt v. Lymburner, 85 N. Y. 172. CHAPTEE XXVin. SETTING ASIDE THE SALE EST FOEECLOSUKE, AND OEDEEING A EESALB. ^ 966. Proper remedy is by motion. 967. Effect of setting aside sale. 968. Effect of order denying a resale. 969. Who may apply for a resale. 970. Notice of application. 971. Application should be made promptly. 972. Rule where plaintiff becomes the purchaser. 973. Inadequacy of price as a ground for granting a resale. 974. Inadequacy of price may be evi- dence of irregularity. 975. Irregularity in conducting the sale. 976; Sale in parcels. 1 977. Adjournments. 978. Fraud as a ground for resale. 97g. Oppressive and fraudulent con- duct. 980. Discretionary power. 981. Excusable mistake as a ground for resale. 982. Mistakes held suiEciently ex- cused. 983. Diligence required of defendant. 984. Order of resale for benefit of in- fants. 985. When a resale will be denied. 986. Terms imposed in ordering a re- sale. 987. Appeal. § 966. Proper remedy is by motion. — An original action cannot be sustained by a party in a foreclosure suit to impeach or set aside the proceedings upon the sale under the judgment, where there was nothing which could have prevented an application to the court in that suit, for a resale, by those who were interested in the premises, and where the title was not acquired by the purchaser by means of a fraud. If the sale is made at an improper time, or in such a manner as to prevent a fair competition, or if for any other cause it would be inequitable to permit the sale to stand, the proper remedy is by a summary application to the court in the suit in which the judgment was made, for a resale upon such terms and conditions as may be just ; so as to protect the rights of the purchaser as well as the rights of the parties interested in the sale/ It would seriously affect the ' Requa v. Rea, 2 Paige, 339 ; Nicholl V. Nicholl, 8 Paige, 349 ; American Ins. Co. V. Oakley, 9 Paige, 259 ; Brown v. Frost, 10 Paige, 243 ; Collier v. Whipple, 13 Wend. 224 ; McCotter v. Jay, 30 N. Y. 80 ; Gould V. Mortimer, 26 How. 167 ; 16 Abb. 448. §§ 967-968.] SETTING ASIDE SALE IN FORECLOSURE. 631 interests of those whose property is sold under the judgments and orders of the court, if it was understood that questions of this kind were to be litigated and determined ia a collateral suit ; for no man of ordinary prudence would bid what he belieyed to be the fair cash value of property at a judicial sale, if he might be subjected to the expense and delay of a protracted equity suit to determine whether the proceedings on the sale had been strictly regular.^ The only case where a new action to set aside a sale would be per- missible would be where a sale had been fraudulently conducted to the prejudice of a party interested in the property, and a person who had been a party to such a fraud had acquired the title under it. In such a case an action would lie, although there might also he a con- current remedy by motion.'' § 967. Effect of setting aside sale. — Where a person becomes a purchaser under a decree of the court, he submits himself to the jurisdiction of the court in that suit as to all matters connected with the sale, or relating to him in the character of purchaser." All ac- quiring title from and under him take subject to the same jurisdic- tion. A conveyance to a ionajtde purchaser may be a circumstance which will influence the court in the exercise of its discretion, when a motion is made for a resale, but it does not take away jurisdiction. A grantee takes the place of his grantor, and consents to the same jurisdiction, under and subject to which the title is held. He has notice of the source of his grantor's title, and knowledge of the power of the courts over titles thus acquired, and takes no better or more perfect title, as against the interference of the court, than his grantor had.' Where a judgment of foreclosure is opened, and the sale is vacated, this destroys the title of the purchaser acquired at the sale and that of his grantees.' §968. Effect of order denying a resale. — A refusal to grant relief upon a summary application is not, except under very special circumstances, a final determination of the merits of the controversy ' Brown v. Frost, lo Paige, 243. Life Insurance Co., Clarke, 307 ; Mc- ' Piatt V. Piatt, 2 N. Y. Sup. (T. & C.) Murray v. McMurray, 66 N. Y. 175. 23 ; Vandercook v. The Cohoes Savings ' Cazet v. Hubbell, 36 N. Y. 680 ; May Institution, 5 Hun, 641 ^^^cCotter v. v. May, 11 Paige, 201 ; Requa v. Rea, 2 Jay, 30 N. Y. 80 ; Gould v. Mortimer, Paige, 339. 26 How. 167 ; Smith v. The American * Hale v. Clausen, 60 N. Y. 339. ' Freeman v. Munns, 15 Abb. 468. 632 MORTGAGES OF REAL PROPERTY. [§§ 969-970. and a bar to an action for relief. It will bar another summary appli- cation unless leave is given to renew. The court may properly, in a doubtful case, remit the moving party to his action, but it cannot assume to limit his right to bring such action, either by prescribing terms or by limiting the time within which the action may be brought.' § 969. Who may apply for a resale. — The motion to set aside the sale may be made by any person whose rights are injuriously affected by it, though he is not a party to the suit.^ A judgment creditor whose lien is destroyed,' or a junior incumbrancer whose rights accrued subsequent to the commencement of the action, and who was therefore not made a party, can make such a motion ;* as also can a person who is not a party, but is personally liable for the payment of the mortgage debt. But a guarantor who has no interest in the mortgaged premises has no right to ask for a resale, if he is discharged from liability to an amount equal to the full value of the property,' or if the sale produces enough to relieve him from personal liability." It is not necessary that the person moving to set aside a sale and for a resale shall have a lien upon the property sold. The owner of a judgment against the executrix of the will of the mortgagor, such executrix having purchased the property, can make such a motion.' An oviTier of the equity of redemption retains an interest, in the property after a general assignment by him for the benefit of credit- ors, which would make him a proper person to apply for a resale.' § 970. Notice of application. — Every defendant who has appeared in the suit, and who has any interest in the property sold, or in the proceeds of the sale, is entitled to notice of an application to discharge the purchaser or for a resale ;° and where the application for a resale is made by a party interested in the fund, the purchaser should have an opportunity to attend the hearing and to be heard in opposition. ' Howell V. Mills, 53 N. Y. 322, 334. ' Chancery, 1843, Bodine v. Edwards, ' Gould V. Mortimer, 26 How. 167 ; s. 2 N. Y. Leg. Obs. 231 ; s. c. 3 Ch. Sent, c. 16 Abb. 448 ; Kellogg v. Howell, 62 46. Barb. 280 ; Goodell v. Harrington, 76 ' Shuler v. Maxwell, 38 Hun, 240. N. Y. 547. ' Goodell v. Harrington, 76 N. Y. 547, ' May V. May, 11 Paige, 201 ; Matter 549. of Fuller v. Brown, 35 Hun, 165. » D. L. & W. R.R. Co. v. Scranton, 34 * American Ins. Co. v. Oakley, g Paige, N. J. Eq. 429. 259 ; Brown v. Frost, 10 Paige, 243. ' Robinson v. Meigs, 10 Paige, 41. §§ 971-972.] SETTING ASIDE SALE IK FORECLOSURE. 633 § 971. Application should be made promptly. — An objection to the sale should be made promptly, and will not be listened to after a great lapse of time, unless a sufficient excuse is given for the delay.' The mover will not obtain any relief if he has been guilty of laches, and if the period prescribed by statute within which an action in equity to redeem a mortgage might have been, brought has expired, the court has no power to set the sale aside." On the same principle, the court will not give the purchaser the benefit of his purchase where he has neglected to comply with the terms of sale within a reasonable time, if a resale of the property is deemed more beneficial to the parties interested in the proceeds of the sale.' The statute limitation of one year has no application to a motion to set aside a sale and for a resale. The question of laches and its effect are dependent upon the circumstances of each particular case involv- ing the consideration of them. It would be more strictly applied as against a purchase in good faith by a stranger to the proceedings than to a party privy to it and not a lona fide purchaser. Also, when rights of third parties had intervened which would be affected by giving the relief. In cases where there has been no substantial change in situation which will make the relief result to the prejudice of the purchasers, the question of laches has less importance.' The owner of an equity of redemption who applied to set aside a foreclosure sale of land for mere irregularities four years after the sale, who knew of the sale shortly after it was made, was held to have been guilty of such gross laches as not to be entitled to relief.' § 973. Rule where plaintiff becomes the purchaser. — Where everything is fair and every bidder unshackled, there is nothing in the circumstance of the mortgagee becoming the buyer, even though the purchase is made at a low price. He has equal rights in this respect with any third person ; but circumstances may occur which would authorize a motion to reopen such a sale, where it would not be Reopened if a stranger had become the purchaser. Where the ' NichoU V. Nicholl, 8 Paige, 349 ; v. McMurray, 66 N. Y. 176, 181 ; Lock- Lockwood V. McGuire, 57 How. 266; wood i. McGuire, 57 How. 266; Viele Francis v. Church, Clark, 475. v. Judson, 15 Hun, 328 ; In re Woolsey, " Depew V. Dewey, 46 How. 441 ; s. 95 N. Y. 135, 144. c. 2 N. Y. Sup. (T. & C.) 515. ' Hoyt v. Savings Institution, no 111. ' Jackson v. Edwards, 7 Paige, 386. 390 ; Hamilton v. Lubukee, 51 111. 415 ; * Per Bradley, J., in Matter of Fuller Bush v. Sherman, 80 111. 160 ; McHany V. Brown, 35 Hun, 162, 166 ; McMurray v. Schenk, 88 111. 357. 634 MORTGAGES OF REAL PROPERTY. [§§ 973-974. mortgagee or plaintiff himself becomes the purchaser, the court has not always held the sale so conclusive as where the property has "been purchased by one who was an entire stranger to the suit, and who has bid for the purpose of investment merely.' In a case where a sale was made of lands under a power of sale contained in a mortgage, the attorney for the mortgagee was the only person present and bid off the property to his client. It was held that this was not a sale of the premises at public auction, and that there can be no legal auction if no one is present but the auctioneer." § 973. Inadequacy of price as a ground for granting a resale. — By the practice of the English Court of Chancery, it is almost a mat- ter of course to open the biddings on a master's sale, before the con- firmation of his report, upon the offer of a reasonable advance on the amoimt bid and the payment of the costs and expenses of the pur- chaser. As a general rule an advance of ten per cent, is sufficient to authorize a resale, but the biddings will not be opened where the amount of the advance is less than £40. The English practice has not been adopted in this State, and mere inadequacy of price is not a sufficient ground for setting aside a sale. It is thought to be essential to the interests of those whose property is thus sold, that purchasers should continue to retain full confidence in the safety of such pur- chases, and that they will not, as a matter of course, be disturbed merely because a good bargain has been obtained.' The rule which declares mere inadequacy of price to be an insufficient ground for setting aside a sale, has peculiar force in cases where the purchase has been made by a stranger to the litigation for the mere purpose of in- vestment.' Where the plaintiff in the action has become the pur- chaser at the sale, the court has not always enforced the rule in its strictness. ° § 974. Inadequacy of price may be evidence of irregularity. — While inadequacy of consideration standing alone affords no conelu- ' Mott V. Walkley, 3 Edw. 590 ; Tripp 53 N. Y. 322 ; WoodhuU v. Osborne, 2 V. Cook, 26 Wend. 146, 158; see also Edw. 614; Mott v. Walkley, 3 Id. 590; Brown v. Frost, Hoff. 41 ; WoodhuU v. March v. Ludlum, 3 Sandf. Ch. 35 ; Le- Osborne, 2 Edw. 614 ; Kellogg v. How- fevre v. Laraway, 22 Barb. 167 ; Kellogg ell, 62 Barb. 280 ; Gould v. Libby, 24 v. Howell, 62 Id. 280 I'Story's Eq. Jur. How. 440 ; Littell v. Zoutz, 2 Ala. 256 ; § 245 ; Matter of Rider, 23 Hun, gi. 36 Am. Dec. 415. ■» Littell v. Zoutz, 2 Ala. 256 ; 36 Am. ' Campbell v. Swan, 48 Barb. log. Dee. 415. ' Duncan v. Dodd, 2 Paige, 99 ; Brown ' Mott v. Walkley, 3 Edw. 590 ; Tripp V. Frost, 10 Id. 243 ; Howell v. Mills, v. Cook, 26 Wend. 146, 158. §§ 975-976.] SETTING ASIDE SALE IN FOEEOLOSITEE. 635 sive reason for setting aside a sale, it is always a material element when joined with other circumstances. The object of the sale is to create a fund, and if as large a price is obtained as can be expected upon a resale, no advantage can be gained by releasing one purchaser in order to seek for another, even though the proceedings on the first sale are shown not to have been altogether regular. On the other hand, a striking difEerence between the real value of the property and the amount for which it is sold, may furnish evidence of irregularity and may emphasize the importance of circumstances by which the inadequacy of price was produced. Where inadequacy of price is considered, the true market value of the property, and hot a speculative value, should be taken as a guide.' § 975. Irregularity in conducting the sale. — When the plaintiff or the officer making the sale, frames terms and conditions of sale which are harsh and imreasonable and out of the usual course of such sales, as where he demands the payment in specie of the whole amount of the purchase money within an hour of the sale, the court will not countenance such proceedings, but will set the sale aside." Where the referee sells the premises upon terms other than those upon which the judgment directs him to sell them, the sale will be set aside on motion of any person who is aggrieved thereby.^ § 976. Sale in parcels. — If the mortgaged premises consist of sev- eral parcels, which under the rule ought to be sold separately, and they are sold together, the sale may be set aside." The sale is, in such a case, said to be irregular and voidable at the instance of the party aggrieved, but it is not void.'' In a case where eleven dwelling- houses worth $24,000 were sold in one parcel for $10,000, the sale was set aside.' Where the officer sold a lot not equitably liable to pay the debt, in defiance of the protest of the owner of that lot, and with notice of the equities which were not denied, the sale was set aside.' Where a mortgage had been given of the undivided half of a tract ' Barnes v. Stoughton, 2 N. Y. Sup. Griffith v. Hadley, lo Bosw. 587 ; The (T. & C.) 675 ; White v. Coulter, 3 Id. American Ins. Co. v. Oakley, 9 Paige, 608 ; s. c. I Hun, 357. 259. ^ Goldsmith v. Osborne, i Edw. 560. ^ Cunningham v. Cassidy, 17 N. Y. 276. ^ Hotchkiss V. The Clifton Air Cure, 4 * The Merchants' Ins. Co. of New Keyes, 170. York v. Hinman, 3 Abb. 455. * Wolcott V. Schenck, 23 How. 385 ; ' Breese v. Busby, 13 How. 485. 636 MORTGAGES OF REAL PfiOPEETT. [§§ 977-978. of land, and the mortgagor and his co-tenants made partition, he tak- ing the south half of the tract, the sheriff, at the foreclosure sale, re- fused a bid of the whole amount due for the undivided half of the south half, and sold the whole. The sale was afterward set aside.' § 977. Adjournments. — ^If there be a variance between the notice announced upon the adjournment and that published in the newspa- per, the sale is irregular." If, however, by the act of the defendant in procuring a stay of proceedings, a sale is adjourned generally, without specifying any day, and a notice is afterward published stating such adjourned day, the defendant cannot set aside the sale on that ground. It would be taking advantage of his own wrong." So, where a stay was procured, and was vacated on the day of sale as having been improperly granted, it was held that the fact that the party procuring the stay made no preparation to attend the sale, was no ground for setting the sale aside.* § 978. Fraud as ground for resale. — ^A sale will be set aside where there is any fraud or misconduct in the purchaser or other per- son connected with and directing the sale, or where there has been a surprise upon any party in interest, created by the purchaser or other person directing the sale, so that the party in interest has been misled." While the law secures to the creditor his just demand and seques- trates the property of the debtor to satisfy it, it still sedulously guards his interests in all the various steps taken leading to a sale of the property. It will not tolerate the slightest undue advantage over him, even by pursuing the strict forms of law or positive rules." Oc- cupying the position of advantage, it behooves the plaintiff to pursue his remedy with scrupulous care, lest he should inflict an injury on one who is comparatively powerless. A court of equity closely scru- tinizes the conduct of a party placed by the law in a position where he possesses the power to sacrifice the interests of another in a man- ner which may defy detection, and stands ready to afford relief on , very slight evidences of unfair dealing, whether it is made necessary by moral turpitude, or only by a mistaken estimate of another's rights.' ' Quaw V. Lameraux, 36 Wis. 626. " * Peck v. New Jersey & N. Y. R. Co., " Miller v. Hull, 4 Den. 104. 22 Hun, 129. 'LaFarge V. Van Wagenen, 14 How. 'Gardinerv.Schermerhorn,Clarke,io2. 54. ' Story's Eq. Jur. § 239. ' King V. Piatt, 37 N. Y. 155. § 979.J SETTING ASIDE SALE IN FOKECLOSUEE. 637 A sale conducted according to the literal provisions of law may nevertheless be set aside if the proceedings on the part of the plaintiff show an effort to injure the mortgagor ; as where the notice was pub- lished in a newspaper which had no circulation in the town where the land was situated, and the sale was had at the shortest legal limit as to time, and the result was a sale for a grossly inadequate price.' § 979. Oppressive and fraudulent conduct.^The appointing of a sale on an election day, in defiance of the protest of the owner of the equity ; the discouragement of the bidders at the sale by the agent of the plaintiff ; the adoption of an order of sale contrary to the wishes of the defendant and in spite of his reasonable request, ending by a purchase of the entire property by the plaintiff for an inadequate price, presents a proper case for the interposition of the court and for the setting aside of the sale.^ "Wliere the plaintiff or his agent, by verbal promises which he af- terward refuses to keep, induces the defendant not to bid, and thereby becomes the purchaser for a price less than the value of the propertv, the sale will be set aside.' So, too, where the purchaser misled the owner by assuming to act for him and to obtain an adjournment of the sale, so that all parties remained away, and he became the pur- chaser for a nominal price, the sale was set aside and a new sale was ordered at the expense of the purchaser.* Where a person who had been the agent of the owner, acting in the interest of a person who afterward became the purchaser, made state- ments to the junior mortgagees which induced them to remain away from the sale, by means of which the property was sold for a less sum than its value, the sale was set aside on terms.' Where the complainant misled the defendants by false statements and by promising to adjourn the sale, and afterward purchased the property at a small price, the sale was set aside and the costs of the sale were refused to him." Where a co-defendant of the mortgagor took an unconscientious advantage of the illness of the latter, which prevented him from at- tending the sale under the decree, in interfering to prevent a post- ponement of the sale, and himself became a purchaser of the mort- ' Briggs V. Briggs, 135 Mass. 306. ^ Murdock v. Empie, ig How. 79 ; s. ' King V. Piatt, 37 N. Y. 155. c. 9 Abb. 283. ' Banta v. Maxwell, 12 How. 479. ^Francis v. Church, Clarke, 475 ; Dem- * Slocum V. Glass, 3 How. 178. aray v. Little, 19 Mich. 244. 638 MOETaAGES OF REAL PROrEKTS". [§ 980. gaged premises at less than one-third of their real value, the court ordered a resale. The purchaser was said to have taken an unconsci- entious advantage of the situation in which the mortgagor was placed by a dispensation of Providence." Where a parcel of land was bid off by the plaintiff, who afterward refused to abide by his bid, and the same parcel was again put up by the sheriff with other lands, and again bid off by the plaintiff, the sale was set aside." Where an agreement is made to purchase for the benefit of the mortgagor, and the purchaser claims for himself, the sale should be set aside;' and if the mortgagor be guilty of laches, this only affects the terms on which he should be relieved.* In a ease where premises were sold for one-tenth of their value, bidders having been discouraged by some one, though there was no proof that the purchaser had been privy to the fraud, the sale was, nevertheless, set aside at the instance of a judgment creditor whose lien was destroyed, and the purchaser was refused costs of opposing the apphcation, his opposition being inequitable.' § 980. Discretionary power. — Courts of equity exercise a super- vision of sales made under their decrees, which is not in all cases con- trolled by legal rules, but may be guided by considerations resting in discretion. They may set aside their own judicial sales, upon grounds insufficient to confer upon the objecting party an absolute legal right to a resale. They may relieve against real mistakes, accidents, or hardships, or oppressive or unfair conduct of others, though such conduct may not amount to a violation of law ; and where a fraud is alleged they may order a resale upon facts casting such a degree of suspicion upon the fairness of the sale as to render it, in their judg- ment, expedient, under all the circumstances, to vacate it, though the alleged fraud may not be clearly established." Where the officer making the sale becomes the real purchaser, though in the name of another, the sale will be set aside as of course, without proof of actual fraud.' Where a second mortgagee agreed with the first mortgagee that if ' Billington v. Forbes, lo Paige, 487. ' May v. May, 11 Paige, 201. 'Woodruff V. Bush, 8 How. 117. « Per Rapallo, J., in Fisher rvr. Her- ' Frost V. Myrick, i Barb. 370. sey, 78 N. Y. 387. * Crane v. Stiger, 2 N. Y. Sup. (T. & ' Howery v. Helms, 20 Gratt. (Va.) I. c.) 577. §§ 981-982.] SETTIITG ASIDE SALE IN EOEECLOSURE. 639 he was allowed to buy without competition, he Would pay the first mortgage, and, pursuant to this arrangement, bought a mill worth $10,000 for $5,000, thereby throwing upon the mortgagor a liability for a deficiency, it was held that the sale should be set aside.' § 981. Excusable mistake as ground for resale. — The excus- able mistake of a party in interest is a ground for a resale. As, where the property was knocked down to a purchaser, whereupon the bid- ders went away, believing the sale to be over ; the purchaser failed to pay the deposit of ten per cent, required by the terms of sale, and the property was sold for a small price.^ So, where the owner of the equity of redemption had appealed in good faith from the judgment of foreclosure, but, owing to imperfect justification of the sureties the sale was not stayed, and the plaintiff, without notice to the owner and without returning the undertaking, proceeded and sold the premises, bidding off the same by himself, or his agents, for much less than their real value, and taking judgment for the defi- ciency, the sale was set aside." § 983. Mistakes held sufficiently excused. — Where the execu- tors of a mortgagor were innocently misled by the statements of their agent, of conversations had with the complainant and his solicitor as to the time of sale, and were induced thereby to stay away, by means of which the property was sold for much less than its value, the sale was set aside on the ground of surprise. Chancellor Kent, in decid- ing the case, said : '' I may add further, that the surprise is not of the most striking kind, and the case for relief on that ground is pushed to the utmost verge of an admissible interference." * A public sale was set aside where — owing to a misunderstanding between the counsel of the mortgagor and the counsel of a person who would have been a bidder at the sale, and who would have bid $1,800— lands worth $2,500 were sold for $1,400.' In a case where the owner was wholly ignorant of the institution of the foreclosure suit until after the sale, and the agent to whom he had confided the care of the property, had, by the visitation of God, been so far deprived of his reason as to be rendered incapable of attending to the busiaess of his principal, or even of communicating with him, 'Morris v. Woodward, 25 N. J. Eq. 32. Parfitt v. Warner, 13 Abb. 471; Smith v. ' King y. Morris, 2 Abb. 296. Heermance, 18 How. 261. » Gould V. Libby, 24 How. 440 ; s. c. ^ Williamson v. Dale, 3 Johns. Ch. 290. sub nom. Gould v. Gager, 18 Abb. 32 ; ' Banta v. Brown, 32 N. J. Eq. 41. 640 MORTGAGES OF EEAL PROPERTY. [§ 983. the sale was set aside on the ground of mistake.' So, too, in a case not reported, the court set aside a sale where the property had been struck off at a price much below its value, owing to the misfortune of the defendant in having his horse drop down dead while he was on his way to attend the sale ; in consequence of which he did not arrive until a short time after the premises had been put up and sold by the master. ' § 983. Diligence required of defendant. — The defendant can- not be held to exercise more than ordinary prudence and diligence in providing for his interests at the sale. If he uses as much diligence as is reasonably practicable in the condition in which he is placed, and is prevented by accidental causes from being represented at the sale, by means of which the property is sold for much below its value, the sale will be set aside. When the defendant is led to beheve, by the statements of the complainant or his solicitor, that the prop- erty will not be sold for less than the debt and costs, he is sufficiently diligent if he writes by mail to an agent of sufficient ability, request- ing him to attend to the matter ; and in case the letter miscarries, and for that reason neither the agent nor his principal is present at the sale, the sale will be set aside upon the motion of the defendant.' Where the mistake of the defendant is caused in whole or iu part by misinformation, received from the mortgagee or his represent- atives, or from the officer making the sale, or from a co-defendant, or from the person who afterward becomes the purchaser, and the sale is greatly below value, the sale will be set aside." So, if the notice of sale be too indefinite, as when a sale was advertised to take place at a certain hotel without mentioning the room, by means of which parties wishing to bid were misled.' Where surprise or misapprehension is created among the bidders at the sale, by the acts of the officer whose duty it is to conduct the sale," or by the acts of the person who afterward becomes the pur- chaser,' or where the officer makes an announcement which was calcu- lated to impair the price which would be offered, and where a less price is obtained than the value of the land, a resale will be ordered.' ' Thompson v. Mount, i Barb. Ch. 607. Tripp v. Cook, 26 Wend. ii\i ; Hoppock '' Cited in Thompson v. Mount, i Barb. v. Conklin, 4 Sandf. Ch. 582. Ch. 609. * Kellogg V. Howell, 62 Barb. 280. 8 Hoppock V. Conklin, 4 Sandf. Ch. « Stahl v. Charles, 5 Abb. 348. 582. ' Mott V. Walkley, 3 Edw. 590. * Collier v. Whipple, 13 Wend. 226 ; * Marsh v. Ridgway, 18 Abb. 262. §§ 984-985.] SETTING ASIDE SALE IN FORECLOStTEE. 641 Id Requa v. Rea (2 Paige, 339) the master was instructed by the complainant's solicitor not to sell for less than $2,600 ; through igno- rance of his duty he sold the property for $1,000 less, to a per- son having knowledge of the facts, and the sale was set aside upon motion. It has also been said that a sale will be set aside where a guarantor has misunderstood his liability.' § 984. Ordering resale for benefit of infants. — A sale will com- monly be set aside on slight grounds where the interests of infants are concerned. Where it is apparent that a resale will benefit infant owners, it has even been said that the court will order it of its own motion." Where the only estate belonging to two infant children was sold for half its value, to pay a debt a little less than the amount of the purchase money, the sale was set aside. The property was sacrificed either through the misapprehension or negligence of their mother and stepfather. Immediately after they heard of the sale, they made appli- cation to the purchaser to let them redeem the property for the ben- efit of the infants, and they offered to bid a considerable advance.' Where a judicial sale was purposely arranged to prevent compe- tition, in order to cut off the title of infants for the purpose of mort- gaging the property, it was held that the infants were entitled as a matter of right to an order setting aside the sale. A mortgagee who had notice of the contrivance, and who loaned money on the title, was not protected.* A sale will not be set aside because a guardian of infant defendants interested in such sale refused to attend, unless it appears that such non-attendance was the cause of the property being sold at a less price than it would otherwise have been sold for.' § 985. When a resale will be denied. — When a purchase is fair, and free from fraud, suspicion, or surprise, a resale will not be or- dered where the equities of the whole case preponderate in favor of the purchaser." It has been said in this connection, that upon an ap- plication for a resale, the whole equities between the parties will be taken into consideration, and the court in its final order will be gov- ' Gardiner v. Schermerhorn, Clarke, ' Duncan v. Dodd, 2 Paige, gg. I02;. Lansing v. McPherson, 3 Johns. * Howell v. Mills, 53 N. Y. 322. Ch. 424. ' Stryker v. Storm, i Abb. (N. S.)424. '^ Lefevre V. Laraway, 22 Barb. 167. ' * Gardiner v.Schermerhorn, Clarke, 102. 41 642 MOBTGAGES OP REAL PEOPEETY. [§§ 986-987. erned by such equities.' This proposition has been controverted," and it may perhaps be stated more correctly in a different form. Where there is no reason given for setting aside the sale which gives to the applicant a legal right to such relief, and where the mere discretion of the court is invoked, the court will exercise that discration or not according as substantial justice will be served upon all the facts in the case. A court of equity will not willingly allow itself to be used to promote injustice, and, on this principle, in a case where the de- fendant, instead of moving for a resale, made an equitable agreement with the purchaser for a reconveyance, and then violated his part of the agreement, his subsequent application for a resale was denied.^ The rule is distinctly and clearly laid down in numerous cases, that the court will not inter:^ere except in very special cases, and never where the mortgagor is an adult, and has an opportunity of attending the sale and taking care of his interests, and the sale was fairly conducted.' Want of knowledge of the time of sale, where the party is an adult and a party to the suit, is no ground for relief.' § 986. Terms imposed in ordering a resale. — The proper terms to be imposed in ordering a resale depend upon the circum- stances of each case.' Where the court is obliged to order a resale of property purchased in good f aitli, the former purchaser must be fully and liberally indemnified for all damages, costs, and expenses to which he has been subjected.' These include the deposit or percent- age paid by him on the sale, the expenses of investigating the title, and the costs of a motion, if he is put to a motion.' If the defect or irregularity is caused by the plaintiff or his attorney, he and not the owner of the equity must bear the expenses of the resale, and the damages of the purchaser at the first sale." § 987. Appeal. — An order granting or denying a motion for a re- sale, though it may rest entirely in the discretion of the judge who heard the motion, is still appealable to the general term. It is an order made upon a summary application after judgment, and affects a substantial right.'" The Code makes the granting or refusal of cer- ' Wiley V. Angel, Clarke, 222. ' McCotter v. Jay, 30 N. Y. 80. " Tripp V. Cook, 26 Wend. 143. * Francis v. Church, Clarke, 475. 'Toll V. Hiller, 11 Paige, 228. ' Duncan v. Dodd, 2 Paige, 99. ' Haines v. Taylor, 3 How. 206 ; Liv- " Raynor v. Selmes, 52 N. Y. 579. ingston v. Byrne, n Johns. 555 ; The ° Id. American Ins. Co. v. Oakley, 9 Paige, '° Code of Civ. Pro. § 349. 259 ; White v. Coulter, i Hun, 357. § 987.] SETTINa ASIDE SALE IN FOEECLOSUBE. 643 tain orders discretionary ; but it is not to be implied from this that it is the discretion alone of a single judge who makes the order, nor that it affects the jurisdiction of the several branches of the Supreme Court. A party dissatisfied with the exercise of the discretion of a judge at special term, has a rigbt also to the exercise of the discretion of the general term. Where an order relates to a mere matter of form, it may be that the general term has no authority to review the discretion of the special term in granting or denying the order. But in other cases the general term has the right to review a discretionary order.' The decisions establish that orders for a resale, made upon grounds that are discretionary, that is, where there is no irregularity, will not be reviewed by the Court of Appeals ;' but that orders where they refuse resales and involve matters of legal right based upon fixed legal principles, are appealable to that court.' ' People V. New York Central Rail- Wakeman v. Price, 3 N. Y. (3 Comst.) road Co., 29 N. Y. 418 ; Matter of Duff, 334 ; The Buffalo Savings Bank v. New- 41 How. 350 ; s. c. 10 Abb. (N. S.) 416 ; ton, 23 N. Y. 160; Hale v. Clauson, 60 DoUard v. Taylor, i J. & S. 496 ; Cen- N. Y. 339 ; Goodell v. Harrington, 76 tral National Bank of N. Y. v. Clark, 2 N. Y. 547 ; Fisher v. Hersey, 78 N. Y. Id- 487. 387 ; Peck V. N. Y. & N. J. R.R. Co., ^ Young V. Bloomer, 22 How. 383 ; 85 N. J. 246. Hazleton v. Wakeman, 3 How. 357 ; ' Howell v. Mills, 53 N. Y. 322 ; King Dows V. Congdon, 28 N. Y. 122 ; Mc- v. Piatt, 2 Abb. Ct. App. Dec. 527 ; Reynolds v. Munns, 2 Keyes, 214 ; Fisher v. Hersey, 78 N. Y. 387. CHAPTER XXIX. EIGHTS AND OBLIGATIONS OF THE PTTECHASER AT THE SALE UNDER THE JUDGMENT OF EOEECLOSUEE. WHO MAY PURCHASE. ■§ g88. Parties to the action. gSg. Officer making the sale. ggo. Purchases by trustees, ggi. Purchases by foreign corpora- tions. gg2. Employment of puffers. gg3. Agreements not to bid. CONTRACT OF THE PURCHASER AND EN- FORCING ITS PERFORMANCE. gg4. The memorandum. gg5. Remedy against purchaser. gg6. Rights of purchaser. WHAT KIND OF A TITLE THE PUR- CHASER MUST TAKE. gg7. Right to possession. ggS. Interests not bound by judg- ment. § ggg. Failure of title to part of property, looo. Record title, looi. What is a marketable title. 1002. Illustrations. 1003. Title by adverse possession. 1004. Defects which do not excuse purchaser. 1005. Irregularities prior to judgment. 1006. Defects mentioned at time of sale. 1007. No allowance can be made for defects. WHEN A PURCHASER WILL BE EXCUSED. 1008. Misled by terms of sale, loog. Description. loio. Delay in completing title. loii. Allowance of costs to the pur- chaser. 1012. Who chargeable with costs of re- sale. WHO MAT PUECHASE. § 988. Parties to the action. — By the 61st Court Eule it is pro- vided that, unless otherwise specially ordered by the court, every judgment for the sale of mortgaged premises shall direct that the plaintiff or any other party may become a purchaser on such sale. This has always been the practice in this State, and where everything is fair and every bidder unshackled, the mortgagee may purchase and is entitled to protection the same as third persons.' § 989. Officer making the sale.— It is also enacted in section 1679 of the Code that a referee or other officer making a sale under ' Brown v. Frost, 10 Paige, 243 ; Mott v. Walkley, 3 Edw. 5go. § 990.] EIGHTS AND OBLIGATIONS OF PUECHASEE. 645 a judgment or a guardian of an infant party to the action, shall not, nor shall any person for his benefit, directly or indirectly, purchase or be interested in the purchase of any of the property sold ; except that a guardian may, where he is lawfully authorized so to do, purchase for the benefit of his ward. The violation of this section is a mis- demeanor, and a purchase made contrary to this section is void. The principle that will prevent an agent to sell from becoming himself a purchaser, would render a purchase by the officer making the sale, void, even though made in the name of a third person,^ and a sale to a guardian ad litem, though he bought for a third person, would also be void." § 990. Purchases by trustees. — A general guardian of a minor heir to mortgaged premises will acquire no title by purchasing them at a foreclosure sale, except such as would be necessary to protect him' for his advances ;° and a cashier of a bank, bound to pay off a mort- gage, cannot purchase for himself, and thus render the bank liable to indemnify such person for the loss of his property.' In Fulton v. Whitney (66 N. Y. 548, affi'g s. c. 5 Hun, 16), a mortgage was bequeathed to two persons in trust to pay the testator's debts, and to apply the surplus to the payment of certain legacies. Included in the debts was a liability for deficiency upon another mortgage, the security for which ought to have been nearly sufficient, if the property had been sold at a fair price. The trustees and their partner purchased at the foreclosure sale for so low a price that the whole of the mortgage in their hands was consumed in paying the judgment for deficiency, and one of the legatees, who was an infant, thereupon brought an action against them to open the sale. It was held by the Court of Appeals, that neither the trustees nor their partner were entitled to purchase at the sale, and that the trustees were not protected by a provision in the judgment allowing any of the parties to the action to become purchasers, nor by an order of the court confirming the sale, nor by a decree of the surrogate settling their accounts as executors.' A similar question arose in Yam, Epjps V. Yan Ejyps (9 Paige, 23Y), where a person who held a junior mort- gage as a trustee for others, was held to be incapacitated from pur- chasing the mortgaged premises under a foreclosure of the prior in- ' Howery V. Helms, 20 Gratt. (Va.) i. *Torreyv.Bankof Orleans,9Paige,65o. ' Lefevre v. Laraway, 22 Barb. 167. ' See also note on this case in Albanjf ' Low V. Purdy, 2 Lans. 422. Law Journal, vol. 14, p. 271. 646 MORTaAGES OF REAL PEOPEETT. [§ 990. CTimbrance for hie own benefit, to the prejudice of the cestuis que trust. The same principle was also asserted in Bennett v. Austin (81 N. Y. 308). When an agent having control of the property of his principal, with power to rent and sell, becomes the purchaser at a sale under a mortgage, his pnrchase is not void, but voidable merely at the option of his principal seasonably expressed ; and when the principal seeks to set aside the sale, he will be required to do equity.' A person purchasing jointly with a trustee stands in the same posi- tion as the trustee." A purchaser who becomes such under an agreement with the mort- gagor, and who derives any advantage under such an agreement, either by restraining the mortgagor or his friends from bidding or in any other way, becomes a trustee for the mortgagor.' A person named as trustee in a mortgage or deed of tnist for the persons whose claims are intended to be secured, cannot purchase the property for his own benefit for less than the amount due to his cestuis que trust and thereby cast the loss upon them. If he does so purchase, he holds the title as he held the mortgage, for the benefit of his cestuis que trust* He is not protected by the provision in the decree of foreclosure that any party to the action may become a pur- chaser at the sale ;' nor will an order of confirmation entered in the foreclosure suit bar the rights of the cestuis que trust." A person acting for such trustee at the sale, or procuring the position of pur- chaser through him, will be chargeable with notice of his trust duties, and will acquire no higher rights than he would.' Such trustee may convey the land to a hona fide purchaser, holding himself liable for the proceeds ; but he cannot retain the land for his own use and remit the beneficiaries to the proceeds of the sale in foreclosure. It is both the right and the duty of an administrator who fore- (eloses a bond and mortgage belonging to the estate to bid in the premises on the sale in order to save the estate from loss. "Whether ' Adams V. Sayre, 76 Ala. 509 ; Dozier * People v. Merchants' Bank, 35 Hun, V. Mitchell, 65 Ala. 511 ; Downs v. Hop- 97 ; Van Epps v. Van Epps, 9 Paige, Jrins, 65 Ala. 508 ; Corner v. Sheehan, 241. ^4 Ala, 452. ' Fulton v. Whitney, 66 N. Y. 556. ' Cumberland Coal Co. v. Hoffman, ' Terwilliger v. Brown, 44 N. Y. 237 ; 16 Md. 456 ; Cumberland Co. v. Sher- Colburn v. Morton, 3 Keyes, 305 ; Con- man, 30 Barb. 553 ; Fulton v. Whitney, ger v. Ring, 11 Barb. 356. 66 N. Y. 548. ' People v. Merchants' Bank, 35 Hun, ' Ryan v. Dox, 34 N. Y. 307. 97. §§ 991-992.] KIGHTS AND OBLIGATIONS OF PURCHASEE. 647 he takes the title in his own name or in his representative capacity, he holds it for the benefit of the fund, and deeds executed by him in both capacities are sufficient to vest the title in a purchaser from him.' § 991. Purchases by foreign corporations.— By Laws of 1877, ch. 158, it is enacted as follows : " It shall be lawful for any corpora- tion, duly organized under the laws of any State in which such cor- poration shall be located, to purchase under any foreclosure sale based upon any mortgage or mortgages owned by such corporation, or upon judgments or decrees obtained or rendered for debts due to it, or in any settlement effected to secure such debts, any of the lands lying within this State that may be covered by or subject to such mort- gages, judgments, decrees, or settlements, and also to hold for a term not exceeding five years from the date of such purchase, and to con- vey such lands by deed or otherwise, in the same manner as though such corporation had been organized under the laws of and located within this State." ' Chapter 466 of the Laws of 1853 made it lawful for insurance companies to hold such real estate as should be purchased at sales upon judgments obtained on mortgages for security for loans. But the same law also provided that all real estate so acquired, which should not be necessary for the company in the transaction of its business, should be sold and disposed of within five years after the acquisition of the title thereto, unless the certificate of the comp- troller, for whom the superintendent of the insurance department is now substituted,' shall be procured to the effect that the interest of the company would suffer materially by a forced sale thereof. It has been held that on a purchase by an insurance company under this statute the title vests absolutely in the company, and that its power of alienation is withsut limit, and that the failure to obtain the cer- tificate does not invalidate or afiect the title in any way.* § 993. Employment of puffers. — The principle upon which the employment of puffers by the person for whom a sale at auction is made, is disallowed, as a fraud upon fair purchasers, is that the per- sons who thus bid are not in fact real bidders, but are the mere in- ' Valentine v. Belden, 20 Hun, 537. ' Laws of 1859, ch. 366. ' Same rule declared in Indiana inde- * Home Insurance Co. v. Head, 30 pendent of any statute. Elston v. Pig- Hun, 405. gott, 94 Ind. 14. 648 MORTGAGES OF REAL PROPERTY. [§ 993. struments of the vendor to deceive the other bidders. But this prin- ciple does not apply to a master's sale under a decree, where the persons bidding, either for themselves, or as the agents of another, are bound to take the property either for themselves or their princi- pal. Any person who is a real bidder at a judicial sale has a right to bid in person or by his agent duly authorized. And there is no principle which renders it necessary that a person bidding at an auc- tion as the agent of another should disclose to other bidders the name of the person for whom he is bidding, unless the person for whom he acts is the vendor who is professedly selling the property instead of buying it.' § 993. Agreements not to bid. — The general rule is that agree- ments which, in their necessary operation upon the parties to them, tend to restrain their natural rivalry and competition, and thus to re- sult in the disadvantage of the public, or of third parties, are against the principles of sound public policy, and are void." Eut there are cases holding that the fact that an agreement has the effect to prevent competition at a public sale, does not necessarily render the agreement void ; it depends on the intent. Thus in Phvpjpm, v. SticJcney (3 Mete. 384) it was held that an agreement by two or more persons that one of them only will bid at an auction of property and will be- come the purchaser for the benefit of them all, is illegal if it be made for the purpose of preventing competition at the bidding, and depre- ciating the price of the property below the fair market value, but that it is valid if the purpose of the agreement be to enable each of the parties to become a purchaser, when he desires a part of the property offered for sale, or if the agreement be for any other honest and rea- sonable purpose. That case has been approved and followed in this State ;' and it has been held that the rule forbidding a combination between persons having no prior interest in the property to suppress bidding at a judicial sale for speculative purposes will not apply to an arrangement between the parties interested in the property by which one is to bid in the interest of all. The mere fact that an ar- rangement fairly entered into, with honest motives, for the preserva- ' Per Chancellor Walworth, in The v. How, 8 Johns. 444 ; Thompson v. National Fire Ins. Co. v. Loomis, 11 Davies, 13 Johns. 112 ; Meech v. Ben- Paige, 431. nett, Hill and Denio, igi ; Brackett v. " Atcheson v. Mallon, 43 N. Y. 147 ; Wyman, 48 N. Y. 667. Jones V. Caswell, 3 Johns. Cas. 29; "Marsh v. Russell, 66 N. Y. 288; Doolin V. Ward, 6 Johns. 194 ; Wilbur Marie v. Garrison, 83 N. Y. 14. §§ 994-995.] EIGHTS AND OBLIGATION'S OF PURCHASER. 649 tion of existing rights and property, may incidentally restrict compe- tition at a public or judicial sale, does not render the arrangement illegal. The question of intent, at all events, is one for the Jury, upon the whole facts as they shall appear on the trial.' CONTRACT OF THE PUECHASEE AND ENFOECING ITS PEEFOEMANCE. § 994. The memorandum signed by the purchaser is only a quasi contract ; it is in-reality a submission to the jurisdiction of the court in a foreclosure suit as a purchaser under the judgment. It is easy to see that it lacks the most essential elements of a contract, not only parties, but mutuality and consideration. It contains, or is intended to contain, an express consent to the exercise of the powers which courts of equity assert over purchasers, and it is doubtful if it adds anything to the jurisdiction or authority of the court in this particular. There can certainly be no suit maintained upon it as an express stipulation with any person whatever. The rights aad liabilities of the purchaser do not grow out of a contract, but arise from the proceeding and sub- mission ; and as the referee makes no contract, the provisions of the statute of frauds, requiring contracts for the sale of lands to be in writing and subscribed by the party by whom the sale is to be made, is not applicable." It certainly is sufficient for the referee to sign the memorandum of the sale, and it is not necessary that the purchaser should sign it.' § 995. Remedy against purchaser. — It is a famihar principle that any one who interferes pendente lite with the subject matter of a suit in equity, submits himself to the jurisdiction of the court, to be exercised by petition or motion in the original suit, and that he acquires no right in that manner which may not be modified, con- trolled, or directed, without any new proceeding directly against him ; and this doctrine applies with full force to the case of a purchasei' under a decree, and to all who claim interests under him.* If the purchaser is responsible and able to complete his purchase, he may be compelled to do so by attachment, on motion in the action in which the sale was made ; and this is the proper course where he is shown to be in collusion with the mortgagor for the purpose of frustrating ' Marie v. Garrison, 84 N. Y. 14, 28 ; ' Bicknell v. Byrnes, 23 How. 486. Myers v. Dorman, 34 Hun, 115. * Proctor v. Farnham, 5 Paige, 614; ' Willets V. Van Alst, 26 How. 325. Requa v. Rea, 2 Paige, 341. 650 MORTGAGES OF EEAL PEOPEETT. [§ 996. the sale, for, as it lias been said, he will not be permitted to baffle the court, and sport with its decrees.' Where a purchaser improperly fails to take title and complete his purchase, and taxes are imposed subsequent to the first sale, and be- fore the second sale, he will be liable for the amount of such taxes, under the clause in the terms of sale to the effect that the purchaser will be " liable for any deficiency there may be between the sum for which said premises may be struck down upon the sale, and that for which they may be purchased on the resale, and also any costs or ex- penses occurring on such resale." ^ An announcement by the referee, after the property has been struck off, that if the purchaser does not comply with the terms of the sale, the property will be resold at his expense, does not discharge the purchaser from his bid ;' and he may either be compelled to com- plete by an attachment, or a resale may be ordered, in which case he will be liable for the deficiency.' § 996. Rights of purchaser. — If the sale be made by the referee in a manner not authorized by the judgment, the purchaser will not on that account be compelled to pay any greater sum than the amount of his bid.' So, too, if the purchaser contracted for a sale on time, he will not be compelled to pay cash." In such a case the proper remedy for the party who is aggrieved by the conduct of the referee in making the sale, is to move for an order vacating the sale and ordering a resale.' The purchaser may assign his bid, and the court, upon the applica- tion of the assignee, will direct the execution of a conveyance imme- diately to him. If there are more than one assignee, the court will, upon motion in the action in which the sale is made, decide between ' Brasher v. Cortlandt, 2 Johns. Ch. 2 McCord (S. C.) Ch. 151 ; Wood v. 505 ; Requa v. Rea, 2 Paige, 339 ; Gra- Mann, 3 Sumner, 318-326 ; Lansdown ham V. Bleakie, 2 Daly, 55 ; Cazet v. v. Ederton, 14 Vesey, 512 ; Saville v. Hubbell, 36 N. Y. 677 ; Goodwin v. Si- Saville, i Peere, Wm., 745. monson, 74 N. Y. 133-136 ; Merchants' ' Ruhe v. Law, 8 Hun, 251. Bank v. Thomson, 55 N. Y. 7 ; Paine v. ■ The National Fire Ins. Co. v. Loomis, Smith, 2 Duer, 293 ; Miller v. Collyer, ii Paige, 431. 36 Barb. 250 ; Proctor v. Farnham. 5 " Graham v. Bleakie, 2 Daly, 55. Paige, 614 ; Knight v. Moloney, 4 Hun, ' Hotchkiss v. Clifton Air Cure, 4 33, modified 2 N. Y. W. Dig. 40 ; Clark- Keyes, 170. son V. Read, 15 Gratt. (Va.) 288 ; Ander- » Rhodes v. Dutcher, 6 Hun, 453. son V. Foulke, 2 Har. and Gill ^Md.) ^Hotchkiss v. Clifton Air Cure, 4 346 ; Richardson v. Jones, 3 Gill and Keyes, 170. Johns. (Md.) 163 ; Gordon v, Saunders, §§ 997-998.] EIGHTS AND OBLIGATIOKS OF PUECHASEK. 651 them.' In one case, in which it is said " there were peculiar circnm- Btances," the court refused to sanction a conveyance to the complain- ant as assignee of a purchaser who failed to complete." An appeal from an order refusing a resale will not of itself prevent the purchaser from completing his purchase, and the appellant is not entitled to an order staying the purchaser from completing his pur- chase and taking possession of the property, without giving security for the payment of the rents and profits of the premises in the mean- time, and that no waste shall be committed.' WHAT KIND OF A TITLE THE PUECHASEK MUST TAKE. § 997. Right to possession. — ^For the purpose of obtaining a fair price for the premises on judicial sales, it is important that purchasers should know that if they pay a fair price for the property, and it is sold without reserve, they will be protected by the court, and will not be required to take an incumbered or worthless title. If there is any cloud upon the title, or incumbrance upon the land, or difficulty in obtaining possession, the property should be sold at the risk of the purchaser in that respect ; and in the amount bid there would then be a reasonable ^allowance for such risk. Even though a valid legal title should pass by the sale, the court will not compel the purchaser to take if the person in possession is not a party, and claims adversely to the parties to the suit ;* or if he is a tenant of a party to the suit and is not willing to surrender possession. ° The tenants in such a case, could not be forcibly dispossessed by any process which could be issued to enforce the judgment.' What the purchaser has a right to suppose he is to receive by means of the purchase, is not merely a title to the premises sold, but beyond that, the power of securing im- mediate possession. If the latter does not exist, even though he could obtain the former, he will be justified in refusing to complete the purchase.' § 998. Interests not bound by judgment. — ^Where a sale is made under a decree or order of the court, and the purchaser is not in- ' Proctor V. Farnham, 5 Paige, 614. * Hirsch v. Livingston, 3 Hun, 9 ; s. ^ Thompson v. Dimond, 3 Edw. c. 5 N. Y. Sup. (T. & C.) 263. 298. 5 Fuller V. Van Geesen, 4 Hill, 171. ' American Ins. Co. v. Oakley, g ' Hirscli v. Livingston, 3 Hun, 9 ; Paige, 496. Morris v. Mowatt, 2 Paige, 5£6, 590 ; * McGown V. Wilkins, i Paige, 120 ; Veeder v. Fonda, 3 Paige, 94 ; Seaman Rogers v. McLean, 31 Barb. 304. v. Hicks, 8 Paige, 655. ' 6.'52 MORTGAGES OIT REAL PROPERTY. [§§ 999-1000. formed at the time of sale that lie is to take the risk of any defect in the title, the court will not compel him to complete his purchase, unless it can assure him that he will have not only a legal title, such as will avail him in a court of law to defend the possession if neces- sary, but also a title that will not be liable to be set aside, or even seriously litigated in a court of equity. The rule appears to be not to compel the acceptance of a title against which doubts or suspicions exist of such a character as that the court cannot conscientiously war^ rant the estate to him. It cannot do this where there is a lien upon the premises held by a person not a party to the action,' or where a publication against an absent defendant is defective,' even where the interest not bound by the judgment is of small value." A purchaser was relieved in a case where an infant defendant was not personally served vnth process, though a guardian ad litem had been appointed for him.* § 999. Failure of title to part of property. — A purchaser cannot be obliged to accept property to an important part of which he can obtain no title whatsoever. A purchaser was relieved from his bid in a case where the terms of sale stated that it would be made " subject to a lease of the present upland of said property to expire May 1, 1884." At the time of the sale a brick building, worth about $5,000, was standing upon the upland, which, by the terms of his lease, the tenant was entitled to remove, and no notice of this right was given at the time of sale.' § 1000. Record title. — A defect in the record title may, under cer- tain circumstances, furnish a defense to the purchaser. But there is no inflexible rule that the purchaser must be furnished with a perfect record or paper title." Before he can successfully resist performance of his contract on the ground of defective title, there must be at least a reasonable doubt as to the title, such as afEects its value and would ' Per McCouN, V.C, in Coster v. » Weeks v. Tomes, i6 Hun, 349, affi'd Clarke, 3 Edw. 428 ; Dodd v. Neilson, 76 N. Y. 601 ; Smith v. Wells, 69 N. Y. 90 N. Y. 243 ; I Sugd. Vend. 339 ; Mor- 600 ; Verdin v. Slocum, 71 N. Y. 345. ris V. Mowatt, 2 Paige, 590 ; Jackson v. * IngersoU v. Mangam, 24 Hun, 202. Edwards, 22 Wend. 509, 510 ; Blakely v. ' Beckenbaugh v. Nally, 32 Hun, Calder, 13 How. 476 ; Althause v. Radde, 160. 3 Bosw. 410. ' Fleming v. Burnham, 100 N. Y. i, 8 Bixby V. Smith, 5 N. Y. Sup. (T. & rev'g 36 Hun, 456 ; Hellreigel v. Man- C.) 279 ; s. c. 3 Hun, 60 ; Piser v. Lock- ning, 97 N. Y. 56. wood, 30 Hun, 6. § 1001. J EIGHTS AND OBLIGATIONS OF PXTECHASER. 653 interfere with its sale to a reasonable purchaser, and thus render the land unmarketable. It has frequently been held that defects in the record or paper title may be cured or removed by parol evidence.' § 1001. What is a marketable title. — The purchaser is entitled to a marketable title. A title open to a reasonable doubt is not a marketable title.^ The court cannot make it such by passing upon an objection depending upon a disputed question of fact or a doubtful question of law, in the absence of the party in whom the outstanding right was vested. He would not be bound by the adjudication and could raise the same question in a new proceeding. The cloud upon the purchaser's title would remain, although the court undertook to decide the fact or the law, whatever moral weight the decision might have. It would especially be unjust to compel a purchaser to take a title the validity of which depended upon a question of fact, where the facts presented upon the application might be changed on a new inquiry or are open to opposing inferences. There must, doubtless, be a real question and a real doubt ; but this situation existing, the purchaser should be discharged.' A court of equity will not compel a purchaser to accept a title . which is so doubtful that it may expose him to litigation, though the court may believe it to be good. If, therefore, there be a reasonable chance that some third person may raise a question against the owner of the estate after the completion of the contract, the court will not compel him to accept it.'' To subject the case to the operation of this principle, there must be some rational doubt concerning the validity of the title ; and where a court of justice upon the evidence would be warranted in directing a verdict in favor of the title, then no such doubt can be entertained.' A mere possibility that the purchaser may be dis- turbed on account of some alleged defect of title, is not sufBcient to justify him in refusing to accept and receive the title.' ' Hellreigel v. Manning, 97 N. Y. 56, ' Per Andrews, J., in Fleming v. 60 ; Seymour v. De Lancey, Hopk. 436 ; Burnham, 100 N. Y. i, lo. Miller v. Macomb, 26 Wend. 229 ; Fagen * Post v. Bernheimer, 31 Hun, 247 ; V. Davison, 2 Duer, 153 ; Brooklyn Park Shriver v. Shriver, 86 N. Y. 575 ; Scheu Com. V. Armstrong, 45 N. Y. 234 ; Mur- v. Lehning, 31 Hun, 183 ; ' Lockman v. ray v. Harvvay, 56 N. Y. 337 ; Shriver Reilley, 29 Hun, 434; Richmond v. Gray, V. Shriver, 86 N. Y. 575. 3 Allen, 25-27 ; Christian v. Cabelt, 22 ^ Rice V. Barrett, 102 N. Y. i6i ; Peo- Grat. 82, 103. pie V. Board of Stock Brokers, 92 N. Y. * Shriver v. Shriver, 86 N. Y. 575, 584. 98 ; Jordan v. Poillon, 77 N. Y. 518. « Post v. Bernheimer, 31 Hun, 247, 654 MORTGAGES OF KEAL PEOPEETY. [§§1002-1003. § 1002. Illustrations.— In Jordcm v. Poillon (7Y K T. 518), land had been sold under a judgment in partition aud the purchaser objected to taking title, alleging that the land was subject to the lien of certain legacies, and the legatees were not parties to the action. The court declined to express an opinion in regard to the vahdity of these legacies, and sustained the purchaser in his refusal. Judge Miller remarked as follows : " A purchaser on a partition or a fore- closure sale has a right to expect that he will receive a good title, and the law presumes that he bids with that object in view. He should not be left, upon receiving a deed, to the uncertainty of a doubtful title, or the hazard of a contest with other parties, which may seri- ously affect the value of the property if he desires to sell the same. It is easy to see how a claim of this kind might impair the value of the real estate sold, by casting a cloud over the title, or by subjecting the purchaser to the risks of a contest at law. From such a result he is entitled to protection, and the case should be very plain which would authorize a court to decide a question arising on a motion to compel a party to take a conveyance ; and then it should be deter- mined only with the consent of such purchaser." Where, in the chain of title to real estate sold upon the foreclosure of a mortgage, there was a conveyance by one Martin as special guard- ian for certain infants to one Mather for $8,000, and a simultaneous reconveyance from the latter to the former for $100, and the infants were not parties to the foreclosure suit, it was held that the record of title showed upon its face that it was a doubtful one and open to litigation, and that the transaction between Martin and Mather, as shown by the conveyances, was presumptively fraudulent, and that the purchaser was entitled to be relieved from his bid. The court refused to compel the purchaser to assume the responsibility of be- ing able himseK to show in a possible action by the infants that, notwithstanding appearances, the special guardian acted in good faith, and paid an actual consideration for the land.' § 1003. Title by adverse possession. — A clear adverse posses- sion for more than twenty years makes a title which a purchaser at a judicial sale may not refuse." But when there are circumstances 253 ; Hayes v. Harmony Grove Ceme- ' Seymour v. De Lancey, Hopk. Ch. tery, 108 Mass. 400. 436 ; Grady v. Ward, 20 Barb. 543 ; ' The People V. Globe Mutual Ins. Co., Folger, Ch. J., in Shriver v. Shriver, 20 W. Dig. 14. 86 N. Y. 575, 581. § 1004.] EIGHTS AND OBLIGATIONS OF PtTRCHASEE. 655 in the case which may prevent the possession from becoming adverse, as if there is a possibility of the title having escheated to the State, or having vested in infants, by reason of which the full period neces- sary to perfect the title in the persons claiming possession has not expired, or if any other facts exist which may involve the pur- chaser in litigation with third persons as to questions of fact open to diverse conclusions, the court will not compel him to accept and pay for the title.' If it appears that any person is making an adverse claim, or that there is any reason to suppose that such a claim may thereafter be made, the court may direct the testimony of the witnesses to be per- petuated." § 1004. Defects which do not excuse purchaser. — The court does not guarantee that none but good titles shall be sold under its decrees. At most, it excuses a purchaser from taking a title when he points out a defect.' A purchaser is bound to complete the pur- chase when the vendor shows a prima facie title, against which there are no reasonable grounds of suspicion ;* but the court will not compel him to complete when there is a defect in the title which can- not be remedied, or there is a well-founded doubt as to its validity.' The court, in giving a title to a purchaser, does not undertake to give a title which can, by no possibility, be defeated. It only assumes to give such a title as a purchaser at a private sale could not legally object to receive." The court neither gives nor requires a vendor to give to a purchaser a title against which there can be no possibility of a valid claim. The purchaser is only permitted to object to the title when there is some probability that some other person has a valid claim or subsisting lien upon the premises ; and a mortgage which has not been recognized by the mortgagor, and upon which no claim has been made by the mortgagee for more than twenty years, is not a valid objection to a title.' If the defect pointed out by the purchaser is one which may equit- ably be cured by a discharge of a lien out of the purchase money, as ' Shriver v. Shriver, 86 N. Y. 575 ; ' Graham v. Bleakie, 2 Daly, 55. Mott V. Mott, 68 N. Y. 246. "Spring v. Sandford, 7 Paige, 550; ' In re Browning, 2 Paige, 64. Fryer v. Rockefeller, 63 N. Y. 268. ' Williamson v. Field, 2 Sandf. Ch. ' Dunham v. Minard, 4 Paige, 441 ; 533- Belmont v. O'Brien, 12 N. Y. (2 Kern.) * In re Browning, 2 Paige, 64. 394. 656 MORTGAGES OF EEAL PROPEETT. [§§1005-1006. ia the case of taxes or assessments, this will be done,' and if the title can be made good by the execution of conveyances or releases, by parties who are willing to execute them, the purchaser cannot refuse to accept the title after the objections to it have been removed.' IN'either can he be excused from taking title where the defect is not injurious to him, as where his own wife was not properly made a party to the action, he having been owner of the equity of redemp- tion." § 1005. Irregularities prior to judgment. — If all persons having any claim upon the property are made parties to the action, and if the court has jurisdiction, the purchaser will have to tate the title, even though the court decided wrongly upon the merits. As no one but the parties to the action can, in such a case, caU the purchaser's title in question, and as they are bound by the judgment, there can be no reason why he should not complete his bargain.* If the purchaser was himself a party to the suit, he cannot raise a question as to the regularity of the decree on a proceeding to compel him to take title. If tbe decree be irregular, he should apply to the court to have it set aside on that ground.' Mental incapacity or incompetency of parties presents no interfer- ence with the enforcement of legal liabilities. Actions may be main- tained against lunatics, and whether their insanity will constitute a defense depends on the circumstances of the case." A judgment of foreclosure rendered upon the personal service of the summons and complaint on persons alleged to be insane, but against whom no pro- ceedings have been instituted to inquire into their mental condition, is not erroneous or irregular,' and a purchaser wiU not be excused from taking title under such a judgment.' § 1006. Defects mentioned at time of sale. — A purchaser can- not be relieved because of defects of which he had full notice at the time he made his bid. The ground of the decisions is that it is for ' Lawrence V. Cornell, 4 Johns. Ch. 542. ^ Concklin v. Hall, 2 Barb. Ch. 136. ' Grady v. Ward, 20 Barb. 543 ; Gra- * Sanford v. Sanford, 62 N. Y. 553 ; ham V. Bleakie, 2 Daly, 55. Mutual Life Ins Co. v. Hunt, 14 Hun, ' Knight V. Moloney, 4 Hun, 33. 169 ; 79 N. Y. 541. * Graham v. Bleakie, 2 Daly, 55 ; ' Crippen v. Culver, 13 Barb. 428 ; Blakeley v. Calder, 15 N. Y. (i Smith) Sternberghv. Schoolcraft, 2 Barb. 153. 617 ; Gaskin v. Anderson, 7 Abb. N. S. ' Prentiss v. Cornell, 31 Hun, 167, I ; s. c. 55 Barb. 259 ; De Forest v. Far- affi'd 96 N. Y. 665. ley. 62 N. Y. 628. § 1007.] EIGHTS AND OBLIGATIONS OF PURCHASER. 657 the interest of all concerned, that bidders may bid freely and to the full value of the premises, and that to do this they must feel assured that they may exact a good title. But if notice of defects is given at or before the sale, this reason does not operate, and those at the sale bid in fact, and in legal contemplation, for the lands with such title as can be given for them ; and the successful bidder must then pay for just the title he had in his mind when he bought.' Where the terms of sale provide that all iocumbrances will be allowed to the purchaser out of the purchase money on his producing vouchers therefor, the existence of incumbrances which he might thus pay off, is no reason for refusing to complete his purchase.^ Where leasehold property is sold and the lease is referred to in the notice of sale, the purchaser is chargeable with knowledge of the con- tents thereof. He is supposed to have examined the lease and made his bid in view of its provisions ; and he is also chargeable with knowl- edge of what was apparent and obvious upon the premises.' § 1007. No allowance can be made for defects. — Under con- tracts between parties for the sale and purchase of land where mate- rial deficiencies are discovered to exist, the purchaser may have, at his election, specific performance as to so much as there may be of the land with compensation by way of damages for the deficiency ; and in some cases he may be compelled to take the title with such compensation.* But these cases rest altogether upon the rights and obligations of contract between vendor and vendee of the lands and the liability that grows out of the breach of contract on the part of the seller to make the purchaser good in damages for any injury sus- tained by reason of such deficiencies. In judicial sales upon the fore- closure of mortgages, there is no such contract between vendor and purchaser to which the court may apply or enforce the equitable principles growing out of the breach of contract, and the consequent claims for damages to be adjusted between the parties. The court that has rendered the judgment and directed the sale of the mort- gaged lands, enters into no contract with the purchaser at the sale for ' Fryer v. Rockefeller, 63 N. Y. 268, Reynolds, 6 Paige, 407 ; White v. Sea- affi'g 4 Hun, 800, but not sustaining the ver, 25 Barb. 235 ; Tompkins v. Hyatt, opinion of the court below ; Riggs v. 28 N. Y. 347 ; Craddock v. Thurley, 3 Pursell, 66 N. V. 193. A. K. Marsh, 288 ; Taylor v. Stibbert, 2 '' Lenihan v. Hamann,r4 Abb.N.S.274. Ves. 437 ; Hall v. Smith, 14 Ves. 426. •'' Riggs V. Pursell, 66 N. Y. 193 ; King * King v. Knapp, 59 N. Y. 466 ; Paine V. Bardeau, 6 Johns. Ch. 38 ; Winne v. v. Upton, 87 N. Y. 327. 42 658 MOBTGAGES OF BEAL PEOPEETY. [§§1008-1009. the breach of which damages may be enforced against the court. And the court will not compel the purchaser to take anything less than what was conteinplated by his bid, and it will not speculate as to what deduction,^ if any, should be made in the price because of a de- fect in the title or of a deficiency in the amount of the property which the purchaser believed that he would obtain.' f WHEN A PUECHASEE WILL BE EXCUSED. § 1008. Misled by terms of sale. — As property to a vast extent is sold under the decrees and orders of the courts of equity, much of which property belongs to infants and others who are unable to pro- tect their own rights, it has always been an object with those courts to encourage a' fair competition at such sales. For this purpose it is necessary that purchasers should understand that no deception what- ever will be permitted to be practiced upon them ; that in a contract between them and the court, they will not be compelled to carry that contract into effect under circumstances where it would not be per- fectly just and conscientious in an individual to insist upon the per- formance of a contract against the purchaser, if the sale had been made by such individual orhis agent. It is therefore a principle that the officer who sells the property shall not, in the description of the same, add any particular which may enhance the value of the prop- erty, or mislead the purchaser. If the statement of the supposed quantity of land is incorrect, and the land falls short of the quantity, the purchaser, having been actually deceived, wiU not be compelled to complete the purchase, especially if the person interested in the fund to be raised by the sale have knowledge of the mistake and fails to correct it." So, where purchasers were misled by a statement in the terms of sale, that all assessments which were liens would be paid out of the purchase money, and by the fact that a certain public improvement had been finished for three years, into the be- lief that such improvement would be paid for out of the purchase money, they were excused and released from their bids.' § 1009. Description.— The court will not compel the purchaser to complete his purchase unless he can obtain, under the deed of the ' Thompson v. Schmieder, 38 Hun, and purchaser was required to com- 504. But see King v. Bardeau, 6 Johns, plete. Ch. 38, where an allowance was made '' Veeder v. Fonda, 3 Paige, 94. ' Post V. Leet, 8 Paige, 337. § 1010. J EIGHTS AND OBLiaATIOJTS OF PUBCHASER. 659 referee, such an interest, both in the land and in the buildings there- on, as he was authorized to suppose he was buying when the prop- erty was struck down to him on his bid. If the municipal corpora- tion of tlie city in which the mortgaged premises are situated has a legal right to take any part of the property without compensating the owner for the buildings, this would be a defect which would ex- cuse the purchaser." If the sale be fair and the title good, and the quantity of land exist, and the substance of the description be true, it is as much as ought to be exacted or required. Where two lots were sold together as one parcel, the master announced that there was a house upon one of the lots. The fact was that the house projected somewhat on to the other lot, tEus making it inconvenient for the purchaser to make use of the vacant lot, but the court ordered him to complete his purchase, and directed that any diminution from the value caused by the projection, should be deducted from the price.'' In 8myth v. McCool (22 Hun, 595), a house, JSTo. 679 Madison Avenue, New York City, was sold by a description by metes and bounds ; the initial point was five inches wrong, and this was held sufficient to excuse the purchaser, although the northern and south- ern lines were through the centre of party walls.' § 1010. Delay in completing title. — As the court will not give a piirchaser at a judicial sale the benefit of his purchase, where he has neglected to comply with the terms of sale within a reasonable time, if a resale of the property is deemed more beneficial to the parties in- terested in the proceeds of sale ; so neither will it compel him to take the title, where, by the fault of the parties thus interested, and with- out any captious objections to the title on his part, the completion of the sale has been delayed so long that he cannot have the benefit of his purchase, substantially, as if the sale had been completed and the title given at the time contemplated by the terms of sale.* A delay of three months in perfecting a title has been held to be a sufficient excuse to the purchaser for refusing to comply with the terms of the sale after the expiration of that time. The delay was said to be foi 1 Seaman V. Hicks, 8 Paige, 655. = Citing Higinbotham v. Stoddard, 72 ^ King V. Bardeau, 6 Johns. Ch. 38. N. Y. 94. BvtseeThompsonv. Schmieder, 38Hun, * Jackson v. Edwards, 7 Paige, 386, 504, where it was held that no allowance affi'd 22 Wend. 498. could be made. 660 MORTGAGES OF BEAL PEOPERTT. [§ 1011. too great a period to authorize the application of the principle that time is not always of the essence of a contract for the sale of lands.' If any fraudulent practice has been used to deceive an intending purchaser and thereby induce him to bid more for the property than it is fairly worth, this will require a setting aside of the sale on the application of such piirchaser. In Fisher v. Hersey (17 Hun, 370), a person employed by one of the parties interested in the result of a piece of property about to be sold under a judgment in partition, visited the plaintiffs and falsely represented that he desired to pur- chase the property for $35,000, which was $5,000 in excess of its real value. He afterward attended the sale with his employer, and by bidding, though without intending to purchase, induced the plaintiffs to bid $32,500, at which sum it was knocked down to them. It was held that this was a fraud upon the plaintiffs, and that they were en- titled to be released from their purchase and to have the property resold, and it was remarked by the court that the employment of a puffer for the purpose of taking advantage of the eagerness of an in- tending purchaser, and not merely as a defensive precaution against an undue sacrifice of the property, is a transaction that cannot be jus- tified by a court of equity.'' § 1011. Allowance of costs to the purchaser .-^If the purchaser itakes possession with notice of the facts for which a resale is ordered, and of a proposed application for a resale, he will not be allowed for improytements,' and if he opposes an application to set aside an in- equitable sale, no costs will be allowed him.* If he is discharged from his purchase for a reason beyond his con- trol, and if he has acted fairly and innocently, he is entitled to have his deposit returned to him with interest," and to the costs to which he has been subjected, to be charged on the plaintifE personally, even if he has acted in good faith, unless there be a fund in court, or one in prospect." The proper expenses of the purchaser, which must be repaid to him, include the expenses of investigating the title, and the costs of the motion for repayment, if he is put to a motion.' ' Rioe V. Barrett, gg N. Y. 403, rev'g " American Ins. Co. v. Oakley, g Paige, 35 Hun, 366. 4g6. ' Smith V. Clarke, 12 Ves. 477 ; Veazie * Morris v. Mowatt, 2 Paige, 586 ; V. Williams, 8 How. (U. S.) 148 ; 2 Douglass v. Woodworth, 51 Barb. 79 ; Kent's Com. 537. Kohler v. Kohler, 2 Edw. 6g ; Veeder ' Requa v. Rea, 2 Paige, 339. v. Fonda, 3 Paige, 94. * May V. May, 11 Paige, 201. ' Raynor v. Selmes, 52 N. Y. 579 ; s. C, 7 Lans. 440. § 1012.] BIGHTS AWD OBLIGATIONS OF PUKCHASEE. 661 § 1012. Who chargeable with costs of resale. — The practice of the court is to charge the expenses of opening the sale upon those parties whose conduct or negligence makes such action necessary. If the plaintiff is without fault, although he may be compelled to pay the expenses in the first instance, he will ordinarily be indemnified out of the proceeds of the property, since, as a general rule, an error in the proceedings in the cause, or other error or defect rendering necessary or proper a reopening of the sale, may perhaps, as a general proposition, be laid to the charge of one party to the suit as much as to another. But the owner of the equity of redemption, when not made a party to the suit, and in nowise having notice of its pendency or of the proceedings in it, cannot be made to bear the loss arising from a resale, made necessary by negligence in the conduct of the action, more especially when the vitiating defect is the omission to bring him in as a party, and thus subject him to the jurisdiction of the court in the action, and hold him bound by its decree.' ' Raynor v. Selmes, 52 N. Y. 579 ; s. c. 7 Lans. 440. CHAPTER XXX. ESTATE OF THE PTTECHASEE AT THE SALE TINDER THE JUDG- MENT, AND HOW POSSESSION MAT BE OBTAINED. TITLE OF PURCHASER. § 1013. Nature of the title acquired by the purchaser. 1014. Purchaser takes title of mort- gagor. 1015. The master cannot exceed the authority granted to him. 1016. Mistake in description. 1017. Title not affected by error in judgment. 1018. Defendants claiming adversely to the mortgage. 1019. Waiver of rights by prior lienor. 1020. When the rights of the purchaser vest. 1021. Confirmation of report of sale. 1022. Questions not disposed of by judgment and sale. 1023. Act of 1837, allowing redemp- tion after sale. CONTRACTS MADE BY MORTGAGOR BEFORE FORECLOSURE. 1024. Discussion. § 1025. Rule as settled. .1026. A tenant in possession. purchaser's title AFTER DEFECTIVE FORECLOSURE. 1027. If the proceedings are irregular. 1028. Rights of persons not bound by judgment. I02g. Costs of defective foreclosure. 1030. Remedies of purchaser under de- fective foreclosure. OBTAINING POSSESSION. 1031. Jurisdiction of the court. 1032. Provision of the Code. 1033. Writ of assistance. 1034. Order for possession. 1035. Having put the purchaser into possession. 1036. Where tenants in possession are not made parties. 1037. When an order for possession has been improperly granted. 1038. Summary proceedings to obtain possession. TITLE OF PmSCHASEE. § 1013. Nature of the title acquired by the purchaser. — A purchaser of mortgaged lands under a foreclosure sale acquires, if the proceeding be regular, the same estate and no other or greater than would have vested in the mortgagee if the equity of redemption had heen foreclosed.' Where legal title is concerned, a mortgage, which for many other purposes is a mere chose in action, is a conveyance of the land. The interest remaining in the mortgagor is an equity which is cut off by the foreclosure, leaving the title conveyed by the ' 2 R. S. 192, § 158 ; Lawrence v. Delano, 3 Sandf. 333- § 1014.] ESTATE OF THE PURCHASES AT THE SALE. 663 mortgage absolute. Such is precisely tlie effect of a strict foreclosure of the equity of redemption, and the consequences of a strict fore- closure, and no other or greater, are by statute made to follow a sale under a judgment in a suit in equity to satisfy or foreclose a mort- gage.' The statute further proceeds to say that the deed of the master making the sale shall be as valid as if the same were executed by the mortgagor and mortgagee, and shall be an entire bar against them and each of them, and against all parties to the suit in which the decree of sale was made, and against their heirs respectively and all claiming under such heirs. These two provisions of the statute must be read together, and it is not to be taken that the purchaser is to be considered as holding under the mortgagor by title subsequent to the mortgage in a sense which would subject him to the mort- gagor's acts intermediate the mortgage and -the foreclosure. The master's deed may probably be considered, as against the mortgagor as a release of the equity of redemption," as of the date of the mort- gage.' § 1014. Purchaser takes title of mortgagor. — The purchaser may take the mortgagor's position as to a vendee in possession under an executory contract for the purchase of the premises, and, upon de- fault of payment of the moneys due upon the contract, may turn him out of possession.* A purchaser at a sale under the foreclosure of a mortgage which was made by a party in possession of the lands, but who was after- ward disseized, can assert the same rights as the disseizee, and recover upon his possession without proving that he himself had ever been in possession.' Where the mortgage is upon a lease and the mortgagee is a party defendant, the purchaser becomes the assignee of the lease." The purchaser takes the title of the mortgagor at the date of the mortgage, subject to all of its qualifications, and if his title is a mere equity or right to own the property upon payment of the purchase price, that is all that is transferred by the master's deed.' ' 2 R. S. 192, § 153. * Dwight V. Phillips, 48 Barb. 116. The ' Per Denio, J., in Packer v. The foreclosure was by advertisement. Roehester and Syracuse R.R. Co., 17 N. ' Clute v. Voris, 31 Barb. 511. Y. 283 ; Taylor v. Kearn, 68 111. 339. * Kearney v. Post, i Sandf. 105. ^Rector, etc., Christ P. E. Church v. 'Stewart v. Hutchinson, 29 How. Mack, 93 N. Y. 488, 492. 181. 664 MOETOAaES OF EEAL PKOPEBTY. [§§1015-1017. § 1015. The master cannot exceed the authority granted to him by the judgment, and the purchaser can only claim what the master lias actually sold to him. A master's deed will not convey laud which has been released, and is included in the decree by a mere clerical error, neither will it convey property included in the decree but not embraced in the sale.' § 1016. Mistake in description. — If there be a mistake in the description of the property as contained in the mortgage, that mis- take must be corrected before judgment. The authority of the sheriff or other officer making the sale is hmited by the judgment, and he can only sell the property described in the decree. A purchaser can- not sustain an action to reform, even though the sheriff pointed out the property to him before the sale." In Wood V. Martin (66 Barb. 241), a clerical error in the descrip- tion was made in the judgment, by which error the initial point was alleged to be 193 feet from a certain street, instead of 123 feet. Fol- lowing the words of description was a reference to a deed in which the correct description was given. The mortgage, notice of lis pen- dens^ notice of sale, and all other papers in the suit contained the correct description. An order was made, upon consent of all the parties who had appeared in the action, amending the judgment nwac pro tunc in tlie respect alluded to. On a motion to compel the pur- chaser to complete his purchase and take the title, it was held that the court had ample power to allow such an amendment. The right of the purchaser cannot be enlarged to cover lands not described in the mortgage, and not owned by any defendant in the action to foreclose, by including those lands in the description con- tained in the complaint and judgment.' § 1017. Title not affected by error in judgment. — If the court had jurisdiction of the parties and of the subject matter, the title of the purchaser will not be affected by error in the judgment, or by its subsequent reversal,* even though such purchaser was a party to 1 Layerty v. Moore, 33 N. Y. 658. Storm v. Smith, 43 Miss. 497 ; Garrett ' Miller v. Kolb, 47 Ind. 220. v. Lynch, 45 Ala. 204 ; Sinnett v. Cralle, ' Hoopes V. Auburn Waterworks Co., 4 W. Va. 600 ; Gray v. Brignardello, i 37 Hun, 568, 574. Wall. 627 ; Holden v. Sackett, 12 Abb. •* De Forest v. Farley, 62 N. Y. 628 ; Pr. 475 ; Breese v. Bange, 2 E. D. Smith, South Fork Canal Co. v. Gordon, 2 Abb. 474 ; Wood v. Jackson, 8 Wend. 9 ; Gal- (N. S.) 479 ; Smith v. Joyce, 25 W. Dig. pin v. Page, i Sandf. 309. 106; McAusland v. Pundt, i Neb. 211 ; §§1018-1019.] ESTATE OJT THE PURCHASEE AT THE SALE. GQ5 the action.^ Neither will the rights of the purchaser be affected by a payment after judgment of which he had no notice.'' " The right of the purchasers to fixtures' and to emblements* have been treated in former parts of this work. § 1018. Defendants claiming adversely to the mortgage. — A mortgagee cannot make one claiming title adversely to that of the mortgagor, and prior to the mortgage, a defendant to the action for the purpose of contesting such adverse claim of title ;' and even if he does so, the statute which declares the master's deed to vest no other or greater title in the purchaser than would have vested if the equity of redemption had been foreclosed, would prevent him from gaining any advantage from such a course." A wife has a claim prior to a mortgage made by her husband alone for a debt other than for purchase money during her coverture, and her claim cannot be divested by making her a party defendant to a foreclosure. Her rights will be the same whether she has or has not been made a party, and even if she has interposed this defense, and has suffered judgment to be taken against her.' It is not within the province of a court of equity to try a mere question of legal title which is not coupled vnth some equity against the party claiming the title, and, for this reason, an adverse claim of this kind cannot be tried in an equity suit." § 1019. Waiver of rights by prior lienor. — Where a person owning a mechanic's lien prior to the mortgage foreclosed, was made a party to the foreclosure, and appeared in the action and served a waiver of "service of a copy of all papers except notice of sale and application for surplus funds," it was urged that this amounted to a consent to come in subsequently to plaintiff's mortgage, and operated as an estoppel against any lien upon the premises by virtue of the lien. The court was disposed to take this view, but in the absence ' Hening v. Punnett, 4 Daly, 543. ^ Frost v. Koon, 30 N. Y. 428 ; Emi- ' Splahn V. Gillespie, 48 Ind. 397. grant Industrial Savings Bank v. Gold- ' Ante, § 166 e( seq. man, 75 N. Y. 127. '^ Ante, § ido et seq. 'Lewis v. Smith, 11 Barb. 152; s. c. ' Eagle Fire Ins. Co. v. Lent, 6 Paige, affi'd 9 N. Y. 502 ; Merchants' Bank v. 637 ; Banks v. Walker, 3 Barb. Ch. 438 ; Thomson, 55 N. Y. 7. Frelinghuysen v. Golden, 4 Paige, 204; 'Jones v. St. John, 4 Sandf. Ch. Holcomb V. Holcomb, 2 Barb. 22; Corn- 208 ; Frelinghuysen v. Colden, 4 Paige, ing V. Smith, 6 N. Y. (2 Seld.) 82 ; Lee 204. V. Parker, 43 Barb. 611. 666 MOETGAGES OF EEAL PROPEETT. [§§1020-1021. of any allegation or proof that the property was sold clear of the lien with the knowledge and acquiescence of the lienor, and it ap- pearing that the lienor had done acts inconsistent with such an un- derstanding on his part, it was held that the judgment and sale did not cut him off.' § 1020. When the rights of the purchaser vest. — Intermediate the time of the sale and the delivery of the deed, the mortgagor re- tains the right of possession, and the consequent right to collect and receive the rents of the mortgaged premises,^ and until the deed is delivered, the rights between the mortgagor and those claiming under him as tenants are not changed.' But the sale terminates the right of the owner of the equity of re- demption to pay the debt and retain the estate. The time allowed by the terms of sale is for the convenience of the purchaser, and to enable the officer who makes the sale to get the best price for the property, and not for the purpose of giving the mortgagor the right of redemption in the meantime.' § 1021. Confirmation of report of sale.— If the proceedings in the action have been regular, the title of the property passes to the purchaser upon the delivery of the deed of the master or of the other officer making the sale, the confirmation of the sale by the court re- lating back to that time.' By the early practice in this State, the decree provided that the purchaser should have possession on produc- tion of the master's deed and a certified copy of the order to confirm the sale. Under such a decree the deed alone was sufficient to main- tain ejectment against a wrong-doer, the confirmation relating back as against him, but as against a person lavsrf ully in possession an order of confirmation was necessary.' The present practice is to provide in ' Emigrant Industrial Savings Bank tenant of the mortgagor is not evicted v. Goldman, 75 N. Y. 127. until the referee's deed is produced. Peck ' Strong V. DoUner, 2 Sandf. 444 ; Cla- v. Knickerbocker Ice Co., 18 Hun, 183. son V. Corley, 5 Sandf. 447 ; Mitchell v. * Brown v. Frost, 10 Paige, 243, 247, Bartlett, 51 N. Y. 447 ; Astor v. Turner, rev'g s. c. Hoff. 41 ; Tenbrook v. Lan- II Paige, 436 ; Cheney v. Woodruff, 45 sing, 4 Johns. Ch. 601. N. Y. 98 ; Whitney v. Allen, 21 Cal. ' Fuller v. Van Geesen, 4 Hill, 171 ; 233. But a tenant of the mortgagor who s. c. afB'd i How. App. Cas. 240 ; Fort is a party may be turned out of posses- v. Burch, 6 Barb. 60 ; Stimson v. Arnold, sion even if he had paid rent in advance 5 Abb. N. C. 377 ; Mitchell v. Bartlett, to the mortgagor. Devitt v. Sullivan, 51 N. Y. 447. 8 Cal. 592. ' Giles v. Comstock, 4 N. Y. (4 Comst.) ' Whalin v. White, 25 N. Y. 462. A 270. §§ 1022-1023.] ESTATE OF THE PUBCHASEE AT THE SALE. 667 the judgment, that the purchaser be let into possession on production of the referee's deed.' No formal confirmation of the report of sale is necessary, the rule of court providing that the report be absolute, and stand in all things confirmed, unless exceptions be filed and served within eight days after the service of notice of filing the same.' § 1022. Questions not disposed of by judgment and sale. — The sale of the mortgaged premises, forecloses the rights of the defend- ants in the equity of redemption, but it does not determine the right to the moneys which are realized by the sale. In 8lee v. ManJiattam Co. (1 Paige, 48), the plaintiff being the holder of a bond and mort- gage, assigned them to the defendant as security for a debt owing by the former to the latter, which mortgage was foreclosed by the as- signee, by advertisement, and the mortgaged premises were bid in by him for a sum less than the amount secured by the mortgage, and less than the debt which the assignment was meant to secure ; and the assignee was required, on receiving the amount of his debt and interest, to convey the mortgaged premises to the assignor. In Hoyt V. Martense (16 IST. Y. [2 Smith] 231), the assignor and assignee both joined as plaintiffs in an action to foreclose the mortgage, and it was held that the foreclosure and sale settled no questions as between the plaintiffs, and that on the assignee of the mortgage purchasing the mortgaged premises at the sale, he held them as he had held the mortgage, as security only and subject to the right of the assignor to redeem." § 1023. Act of 1837, allowing redemption after sale. — By Laws of 1837, c. 410, it was enacted, that within one year from the time when any sale of real or leasehold estate, under any mortgage there- tofore executed, or any decree thereon, should thereafter be made, the real or leasehold estate so sold, or any distinct lot, tract, or por- tion that may have been separately sold, might be redeemed by the mortgagor, his personal representatives or assigns, on paying to the purchaser, his personal representatives or assigns, or to the officer who made such sale for the use of such purchaser, the sum of money which was bid on the sale of such lot or tract, together with the in- 1 Rule 61. = See Bloomer v. Sturges, 58 N. Y. " Rule 30. Mitchell v. Bartlett, 51 N. 168, in which Slee v. The Manhattan Y. 447 ; Brown v. Marzyck, 19 Fla. 840 ; Co., i Paige, 48, and Hoyt v. Martense, Petty V. Mays, 19 Fla. 652. Contra, in 16 N. Y. 231, are distinguished and lim- Wisconsin — Allen v. Elderkin,62Wis.627. ited. 668 MOETGAGES OF EEAL PKOPEKTT. [§ 1024. terest on that sum from the time of sale, at the rate of ten per cent, a year ; and on making such payment a certificate was required to be signed by him to whom the payment was made, stating the same to be in full redemption of the said mortgaged premises and of the sale thereupon made. This statute was enacted at a time of great business depression, and was intended to prevent the forfeiture of valuable estates by fore- closure of the mortgages upon them. It was repealed by Laws of 1838, c. 266. CONTEACTS MADE BY MOETGAGOE BEFOEE FOEECLOSDEE. § 1024. Discussion. — It is obvious that the purchaser cannot gain any advantage from contracts made by the mortgagor subsequent to the mortgage with any of the defendants in the action to foreclose, for such contracts were made with relation to an equity which the sale has destroyed, but it has been questioned as to whether he may claim tJie benefits of bargains made with persons who, by not having been made parties to the suit, are allowed to retain any advantage which they acquired under such bargains. In Packer v. The Roch- ester and Syracuse B.E. Co. (IT !N". Y. [3 Smith] 283), an easement to construct a mill-race across the mortgaged land had been granted by the owners of the equity of redemption to certain mill owners for which they undertook to construct the walls of said race in a specified manner. The mortgage was afterward foreclosed without making the mill owners parties, and the question arose in an action for dam- ages for obstructing the race, brought by the mill owners against the purchasers at the foreclosure, as to the admissibility of the original contract under which the race had been built, and of a decree in chan- cery between the parties to such contract decreeing its specific per- formance. The opinions of Denio and Peatt, JJ., are interesting as showing the diverse views held by those learned judges with regard to the rights of the purchaser under the foreclosure sale, though they arrived at the same conclusion with regard to the case then under consideration. Denio, J., held that by the foreclosure the equity of redemption was extinguished ; that the purchaser did not claim under the mortgagors by title subsequent to the contract offered in evidence, but by paramount title, and that he could, therefore, neither be bound by it nor could he avail himself of its advantages. Peatt, J., on the other hand, maintained with great force the proposition that the pur- chaser's title, so far as an incumbrancer who was not made a party to § 1025.] ESTATE OF THE PTJECHASEE AT THE SALE. 669 the action was concerned, was tliat of a grantee from the mortgagor as of the date of the foreclosure,' and that not only could such incum- brancer insist upon the benefits which contracts subsequent to the mortgage had assured to him, but also that the purchaser could en- force the reciprocal obligations which Kad induced the mortgagor to grant such benefits. The statute says that deeds executed by the master " shall be as valid as if the same were executed by the mortgagor and mortgagee, and shall be an entire bar against either of them, and against all par- ties to the suit in which the decree for such sale was made, and against their heirs respectively, and all claiming under such heirs." ^ If all persons having interests in or liens upon the equity of redemp- tion are made parties to the suit, the purchaser will take the same title as if the original mortgage had been an absolute conveyance to him, and, in all cases, his title will be the same as if all of the parties to the action had conveyed their rights in the land to him. The judgment will " bar " them from denying that to the extent of their interests the purchaser has acquired a perfect title, and those interests may be enforced by the purchaser against strangers to the action. So, as we have already seen, the purchaser acquires the interests of the plaintiff with respect to the land,' and he also acquires a right to redeem from lienors not made parties, if such right had been pos- sessed by any of the parties to the action." It would also seem to follow that he acquires the right of any party to the action to enforce the performance of a covenant, upon consideration for which a stranger to the action held an interest in the property." § 1025. Rule as settled.— In Eedor, etc., of Christ P. E. Church V. MaoTc (93 JST. T. 488, rev'g 25 Hun, 418), the defendant's husband had purchased the property from the mortgagor subject to the mortgage and to a servitude subsequently created restricting the use of the property so as to allow the adjoining property to have the use of windows opening upon it. The title was thereafter granted to the defendant. The mortgage was subsequently foreclosed, and the defendant having become the owner thereunder, she commenced the erection of buildings which would have closed the windows of the 'Approved in Rector, etc., Christ P. 'Hart v. Wandle, 50 N. Y. 381 ; ante, E. Church V. Mack, 93 N. Y. 488, 492. § 1014. '2 R. S. 192, §158; Code of Civ. *Vanderkemp v. Shelton, 11 Paige, 28. Pro. § 1632, ^ Pardee v. Steward, 37 Hun, 259, 264. 670 MORTGAGES OF REAL PEOPEETY. [§§1026-1027. adjacent property. The action was brought to restrain the continu- ance of such erection, and an injunction was granted and sustained by the General Term. It was conceded that a purchase under the fore- closure would have given a stranger to the title an ownership dis- charged 'of plaintiff's easement, and the Court of Appeals decided that the same result attended the purchase by the defendant, notwith- standing her relation to the property. The rule was declared to be that " the effect of the foreclosure deed, as determined by the statute, is to vest in the purchaser the entire interest and estate of mortgagor and mortgagee as it existed at the date of the mortgage, and unaf- fected by the subsequent incumbrances and conveyances of the mort- gagor." § 1026. A tenant in possession of mortgaged lands is by statute authorized to attorn to the mortgagee after the mortgage has become forfeited ;' and a payment of rent by a tenant to a purchaser at fore- closui-e would constitute a perfect defense to an action brought by the mortgagor upon the covenant.^ If the tenant were made a party to the action, it would doubtless rest witli him either to remain under a new contract with the purchaser, or to quit the premises and refuse to pay rent either to his lessor or to the purchaser." But it is hard to perceive how, upon any just principle, a tenant not made a party to the action, and whose rights were therefore unaffected by the judgment, could either evade the payment of rent, while he contin- ued to occupy the premises, or repudiate his contract of letting, or justify a payment to his lessor after the rights of such lessor had been acquired by the purchaser.* pijeghasee's title after defective foeeolostjee. § 1027. If the proceedings are irregular, the purchaser acquires, so far as junior incumbrancers not made parties to the action are con- cerned, a prior lien upon the premises to the extent of the money due and unpaid upon the older mortgage, in the same manner as if the plaintiff had assigned that mortgage to him without foreclosure irrespective of the amount bid at the sale.' As against the owners of ' I R. S. 744, § 3. Church, g How. 220; Pardee v. Steward, 2 Jones V. Clark, 20 Johns. 51. 37 Hun, 259, 264. ' Simers v. Saltus, 3 Den. 214. « Hart v. Wandle, 50 N. Y. 381 ; Rob- ■• Packer v. The Rochester and Syra- inson v. Ryan, 25 Id. 320 ; Walsh v. cuse R.R. Co., 17 N. Y. (3 Smith) 283, Rutgers Fire Ins. Co., 13 Abb. 33 ; Ben- 298 ; Lovett v. The German Reformed edict v. Oilman, 4 Paige, 59 ; Smith v. § 1028.] ESTATE OF THE P0ECHASEE AT THE SALE. 671 the equity of redemption and persons having Hens thereon who were made parties to the suit, he acquires their interests.' The effect of the foreclosure and sale is to transfer to the purchaser the rights of the mortgagee in the land, and so much of the equity of redemption as is owned by parties to the action.'' It has therefore been said that a judgment creditor, in order to redeem, must pay the amount of all incumbrances prior to his, to pay which the property was sold.' The purchaser, as against a junior lienor not made a party to the foreclosure, is the transferee of the mortgage foreclosed and of the equity of redemption and of all liens upon the property held by de- fendants who were duly served.* As against such junior incum- brancer he may either foreclose the prior lien under which he pur- chased or he may redeem by virtue of the title of the owner of the equity of redemption who was a party to the action.' § 1028. Rights of persons not bound by judgment. — As against all of the parties to the suit, the effect of the master's deed is to bar their right to redeem from the mortgage, and to extinguish Gardner, 42 Barb. 356 ; Carpenter v. Brenham, 40 Cal. 221 ; Dunning v. Fisher, 20 Hun, 178 ; Winslow v. Clark, 47 N. Y. 261 ; Gage v. Brewster, 31 N. Y. 218 ; Raynor v. Selmes, 52 N. Y. 579 ; Raymond v. Holborn, 25 Wis. 57 ; Martin v. Fridley, 23 Minn. 13 ; "White- head V. Fisher, 64 Tex. 638 ; Baker v. Pierson, 6 Mich. 522 ; Bradley v. Snyder, 14 111. 267 ; Johnson v. Harmon, ig Iowa, 56 ; Bodkin v. Merrit, 102 Ind. 293 ; Curtis v. Gooding, 99 Ind. 45 ; United St. v. Powell, 14 Wall, 493 ; Probst V. Brock, 10 Wall. 519 ; Foster V. Union Bank, 34 N. J. Eq. 48 ; Childs V. Childs, lo Ohio St. 339. The interests acquired are interests in the land and the purchaser cannot retain the land and en- force a claim against the mortgagor for a portion of the debt not cancelled by the sale. Wells v. Lincoln Co., 80 Mo. 424. ' Vanderkemp v. Shelton, 11 Paige, 28; Seward v. Huntington, 94 N. Y. 104, 114 ; Vroom v. Ditmas, 4 Paige, 531 ; Youngv. Brand, 15 Neb. 601. The pur- chaser may be substituted as plaintiff in an ejectment suit brought by one of the defendants and pending at the time of the sale. Conger v. Duryee, 23 W. Dig. 193. But his possessory right does not accrue until the delivery of the referee's deed, and before that time though after the sale, he cannot defend an ejectment suit brought by a stranger to the action. Sanders v. McDonald, 63 Md. 503. ^ Watson V. Dundee M. & Tr. Invest. Co., 12 Oreg. 474; 8 Pacif. Rep. 548; Sellwood V. Gray, 11 Oreg. 535 ; 5 Pacif. Rep. ig6. ' Van Dayne v.' Shann, 39 N. J. Eq. 6 ; McCormick v. Knef, 105 U. S. 122 ; Parker v. Child, 10 C. E. Green, 41. ^Vanderkemp v. Shelton, 11 Paige, 28; Parker v. Child, 25 N. J. Eq. 41 ; Sew- ard v. Huntington, 94 N. Y. 104, 114, rev'g 26 Hun, 217 ; Holden v. Sackett, 12 Abb. 474. ' Renard v. Brown, 7 Neb. 449 ; Kraft V. James, 64 Iowa, 159 ; Smith v. Shay, 62 Iowa, 119. If the purchaser goes into possession under his deed his rights are those of a mortgagee in possession, and he cannot be removed by an action of ejectment. Russell v. Whitely, 59 Mo. 196 ; Jones v. Mack, 53 Mo. 147. 672 MORTGAGES OF EEAL PROPEETr. [§ 1028. their liens upon or their rights in the premises, and it binds no one not a party.' The difference, therefore, between those made parties to the suit and those who are not, is, that the former lose their right of redemption, which remains in the latter.' The rights and interests of all of the parties defendant in the equity of redemption are barred and destroyed, and the purchaser takes the same title he would have had if the mortgage foreclosed had been an absolute conveyance to him — that is, he takes the title of the mortgagor as of the date of the mortgage," subject to the. claims of those persons who, not having been made parties, are not bound by the judgment ; and these claims hold the same relation to the title after the sale as they did before. A person not made a party to the foreclosure is not affected by the judgment or sale, either favorably or unfavorably. If he was the owner of the equity of redemption before the sale, he remains such afterwards ; and if he held a lien, that lien is preserved to him in all its force and with all of its just claims to priority over other liens." But he cannot ask that liens or titles bound by the sale for the bene- fit of the purchaser be held bound for him on any ground of the amount of price bid at a sale which he repudiates and treats as a null- ity. Plis rights are the same after the sale as they were before, but the rights which were superior to his and which, before the sale, be- longed to parties to the action, are, by force of the sale, vested in the purchaser. In Salmon v. Allen (11 Hun, 29), a second mortgage was assigned as security for a smaller sum than was due upon it, and the assignee was omitted from the foreclosure of the first mortgage. An action to redeem was brought by such assignee, and it was held that the plaintiff could claim only the amount due to him under the agree- ment upon which the mortgage was assigned to him ; that a sale of the premises subject to the prior mortgage was improper, the prior mortgage being merged in the title under the sale, and that the proper judgment was to give the junior mortgagee a right to re- deem from the prior claim unless the prior claimant redeemed from him. ' Brainard v. Cooper, lo N. Y. 356 ; De Lashmitt v. Sellwood, 10 Oreg. Peabody v. Roberts, 47 Barb. 91 ; Ward 319. V. Dewey, 7 How. 17. ' White v. Evans, 47 Barb. 186 ; But- '^ Watson V. Spence, 20 Wend. 262 ; ler v. Viele, 44 Id. 166. Hasselman v. McKernan, 50 Ind. 441 ; ^Catterlinv. Armstrong, loi Ind. 258; Taylor v. Adams, 115 111. 570. §§1029-1031. J ESTATE OF THE PURCHASER AT THE SALE. 673 § 1029. Costs of defective foreclosure. — ^While the prior mort- gage is deemed to be assigned to the purchaser, and the debt and lien are kept alive for his benefit as against the junior incumbrancer who is not foreclosed, he has no right to collect as against such junior in- cumbrancer the costs of the defective foreclosure.' § 1030. Remedies of purchaser under defective foreclosure. — The proper remedies of a purchaser under a defective foreclosure are as follows : 1. He may foreclose the mortgage under which the sale was made as the assignee thereof in the usual method." If he does this, and a sale is had, he will be entitled to any surplus that may remain after satisfying the junior lien, because he stands as the assignee of the owner of the equity of redemption who was bound by the first fore- closure; or 2. He may redeem from the junior incumbrancer who was omitted from the first foreclosure ; or 3. He may bring an action for a strict foreclosure " in which the junior incumbrancer will be called upon to redeem the first mortgage and all liens prior to his own, to the whole of which the purchaser is subrogated." OBTAINING POSSESSION. § 1031. Jurisdiction of the court. — A judgment of foreclosure and sale commonly provides that the purchaser be let into possession on production of the sheriff's or of the referee's deed ; but whether this provision is inserted in the judgment or not, the purchaser is entitled to be put into possession upon complying with the terms of the sale. The sale would be useless and without meaning to the pur- chaser if it v/ere not to be accompanied with actual possession ; posses- sion is part of the title, and is equally within the meaning of the suit and the spirit of the decree.' Independent of the statute, the court has jurisdiction to enforce its decree of sale against the parties to the suit, and persons coming into possession under them since the commencement of the litigation and ' Gage V. Brewster, 31 N. Y. 2i8; Mu- ' See "Strict Foreclosure,'' Chap, tual Liie Insurance Co. v. Dake, i Abb. XXXII.; Benedict v. Gilman, 4 Paige, N. C. 381. 58 ; Ross V. Boardman, 22 Hun, 527 ; ^ Franklyn v. Hayward, 61 How. 43 ; Bolles v. Duff, 43 N. Y. 469. Shirk V. Andrews, 92 Ind. 509 ; Georgia ^ Parker v. Child, 25 N. J. Eq. 41. R.R. Co. V. Walker, 6i Miss. 481. 'Kershawv.Thompson,4johns.Ch.eo9 43 674 MORTGAGES 0"P EEAL PEOPEETT. [§§1032-1033. filing of tlie notice of Us pendens, since it is a principle of a court of equity to do complete justice where that is practicable, not merely by declaring the right, but also by affording a remedy for its enjoy- ment. The power is also explicitly declared by statute.' The court has no power, either under the statute or independent of it, to deprive any person of possession who is not a party to the suit and who has not acquired such possession from a person who was bound by the decree.'' A person who obtains possession by legal and adverse proceedings against a party to the suit, under a claim of right, the litigation upon which was commenced previous to the filing of a bill in foreclosure, cannot be summarily dispossessed by proceedings in the suit, he not being party to it.' Neither can a person claiming and holding possession, by a tenant, in hostility to the mortgage, have his possession taken away from him by a decree and sale in fore- closure to which he was not a party, even though his tenant had been joined. In such a case the tenant may lawfully and properly surrender possession to his landlord, after the decree, and take a new lease from him which will be protected by the landlord's right of possession." § 1032. Provision of the Code. — By section 1675 of the Code of Civil Procedure it is enacted as follows : " Where a judgment in an action specified in this title (actions relating to real property) allots to any person a distinct parcel of real property, or contains a direction for the sale of real property, or confirms such an allotment or sale, it may also, except in a case where- it is expressly prescribed in this act that the judgment may be enforced by execution, direct the delivery of the possession of the property to the person entitled thereto. If a party, or his representative or successor, who is bound by the judgment, with- holds possession from the person thus declared to be entitled thereto, the court, besides punishing the disobedience as a contempt, may, in its discretion, by order, require the sheriff to put that person into pos- session. Such an order must be executed as if it was an execution for the delivery of the possession of the property." § 1033. Writ of assistance. — The process by which a purchaser was let into possession, in case resistance is made, was, prior to the 1 Code of Civ. Pro. § 1675. Meiggs v. Willis, 8 N. Y. Civ. Pro. Rep. ' Frelinghuysen v. Colden, 4 Paige, 125. 204; Van Hook v. Throckmorton, 8 ' Frelinghuysen v. Colden, 4 Paige,204. Paige, 33; Boynton V. Jackway, 10 Paige, ■* N. Y. Life Ins. & Trust Co. v. Cut- 307 ; Reed v. Marble, 10 Paige, 409 ; ler, 9 How. 407. § 1033. J ESTATE OF THE PURCHASER AT THE SALE. 675 Code of Civil Procedure, a writ of assistance. It was directed to the sheriff of the county ; and after reciting the facts entitling the pur- chaser to possession, it commanded him to remove from the premises any of the parties defendant in the action who may be in possession, and any person who, since the commencement of the action, had come into possession under them or either of them. An order for a writ could be granted ex jpa/rte^ and on a proper case being shown was a matter of right.^ It has even been intimated that it is in the nature of an execution upon the judgment, and under the Code might issue without an order.^ It was said by the Court of Appeals, in WiTbor v. Danolds (59 IST. Y. 65T), that, while the purchaser, upon the production of the referee's deed, was presumptively entitled to possession, and although, upon demand therefor and refusal, the writ of assistance was the ordinary and usual process of the court, still the granting or withholding of the writ was in the discretion of the court below. The following is the language of Allen, J., in the ease cited : " Neither the applica- tion for and the granting of the writ of assistance, or the application to set aside a vrrit, necessarily involved a substantial right. Whether in a particular case, as between a purchaser and a party to the action and bound by the judgment, the former shall have the aid of the court in obtaining the possession of the purchased premises, rests very much in the discretion of the court of original jurisdiction." It will be noted, however, that in Wilbor v. Danolds {sv^rci), the writ of assistance had been granted ex parte, and the order appealed from, denied an application to vacate it on the alleged ground that the purchaser had bought under an agreement to hold the title for the benefit of the mortgagor. It cannot be said that the case decides that it is not a substantial right of a purchaser for value under a judg- ment of foreclosure, to have the judgment executed in his favor, • and the possession of the property delivered to him. In Wilbor v. Danolds (supra), possession was given to the purchaser, thus execut- ing and satisfying the judgment of the court, and the question was as to whether a defendant, bound by the judgment, had a substantial right to retain possession of the property because of an alleged equity which arose subsequent to the judgment and independent of it, and ' N. Y. Life Ins. & Trust Co. v. Rand, " Lynde v. O'Donnell, 2i How. 34. 8 How. 35; s. c. affi'd 8 How. 352; N. Y. a N. Y. Life Ins. & Trust Co. v. Rand, Life Ins. & Trust Co. v.Cutler, 9 How.407. 8 How. 352. 676 MOETGAGES OF EEAL PEOPEETT. [§§1034-1036. while the existence of that equity was in litigation. As was said by the court in the case last mentioned : " The possession of property pending a litigation, and the settlement of a controversy as to the title, is not the legal right of either of the contestants." § 1034. Order for possession. — In Peck v. The Knickerhocher Ice Co. (18 Hun, 183), the judgment provided " that the purchaser at such sale be let into possession on production of the referee's deed and a certified copy of the order confirming the report of sale." It was held that the purchaser had not the right to possession until the performance of such prerequisites as the judgment required. Possession may be given to a purchaser as against a person, not a party to the suit, who took possession after the beginnitig of the suit in collusion with the mortgagor, though under a claim of tax title ;' but not against a person who entered pending the suit, without such collusion, under an adverse claim of title." A defendant who has been removed by the order of the court, or by a writ of assistance, cannot afterward htigate the right of posses- sion in another action.' The order for possession is not executed until the purchaser is put into actual and visible possession.* § 1035. Having put the purchaser into possession, the court does not undertake to guard his possession for him and for his grant- ees forever. If new claimants enter into possession afterward, he must deal with them according to the forms of law, and neither a writ of assistance nor an order for possession is a proper remedy.' The court will, however, put either the purchaser or his grantee into possession, and the defendants can no more object to the transfer of the right of possession, than a defendant in an action at law can ob- ject to an assignment of the claim against him.° § 1036. Where tenants in possession are not made parties, the purchaser is not entitled to possession as against them, but, even if their leases were executed before the execution of the mortgage which was foreclosed, they must still attorii to the purchaser, he hav- ' Brown v. Marzyck, 19 Fla. 840. N. Y. S. Reptr. 666, rev'g 29 Hun, 204 ' Van Hook v. Throckmorton, 8 Paige, mem. ; Keeler v. Keeler, 102 N. Y. 30. 33. ' Bell V. Birdsall, 19 How. 491 ; s. c. ' Rawiszer v. Hamilton, 51 How. 297. sub nam. Betts v. Birdsall, ii Abb. 222. « Newell V. Whigham, 102 N. Y. 20 ; i » N. Y. Life Ins. & Trust Co. v. Rand, 8 How. 35. §§1037-1038.] ESTATE OF THE PTTECHASER AT THE SALE. 677 ing by the foreclosure proceedings acquired the title of their landlord. In one case, one of the defendants in the action acquired, subse- quently to the decree, a lease of prior date to the mortgage, and the court held that, although he was entitled to retain possession, he must do so as tenant, that being the extent of his rights, and the choice was given him either to attorn to the purchaser, or to be turned out of possession by a writ of assistance.' This remedy could not have been enforced if the obstinate tenant had not been a party to the ac- tion, and although justice was done, it is perhaps open to argument as to whether the decision was technicallv correct. § 1037. When an order for possession has been improperly granted, or when, being properly granted, persons not properly within the meaning of its terms, are aggrieved by having it executed against them, the court, upon motion, is bound to correct the wrong and to restore possession. The court will not in such a case, stop to inquire into the validity of the respective titles. It is enough for it to know that its process has been abused. If the purchaser has, under cover of a writ against the defendants, ejected another person, he is a trespasser, and the court will not pause to examine into the title of the person dispossessed, before restoring him to his possession ; al- though he may have no legal title, yet the court will protect his pos- session until he is removed by due process of law." § 1038. Summary proceedings to obtain possession. — By Laws of 1874, c. 208, the portion of the Revised Statutes which gave to landlords a summary remedy to . obtain possession of demised prem- ises, was amended so as to bring within its scope aU persons " who shall hold over and continue in possession of any real estate which shall have been sold pursuant to the foreclosure of a mortgage, after a title under such sale shall have been perfected." This statute was repealed by Laws of 1880, ch. 245, and the provision as re-enacted in section 2232 of the Code of Civil Procedure restricts the remedy by summary proceedings to cases of foreclosure by ad- vertisement vsdthout action. ' Lovett V. The German Reformed ' Chamberlain v. Choles, 35 N. Y. 477 ; Church, 9 How. 220. Meiggs v. Willis, 8 N. Y. Civ. Pro. Rep. 125. CHAPTEE XXXI. STJEPLUS PROOEEDINGa, PROVISIONS OF LAW RELATING TO DIS- TRIBUTION- OF SURPLUS. § 1039. Prior to the passage of the Re- vised Statutes. 1040. Present statute. 1041. Rules of court. 1042. The object of these rules. 1043. Distribution of surplus by the surrogate. WHAT MAY BE LITIGATED. 1044. Nature of the proceeding. 1045-1049. Controversy as to jurisdic- tion of referee. 1050-1051. Jurisdiction of referee as 1052. now settled. Questions passed upon. WHO IS ENTITLED TO SURPLUS. 1053. Only persons owning rights in equity of redemption. 1054. Prior liens barred by judgment. 1055. Questions of priority. 1056. Adjusting equities. 1057. A lessee whose lease is de- stroyed. § 1058. Dower in surplus. 1059. Judgments. 1060. Deceased mortgagor. 1061. Reclaiming money erroneously paid. ARE SURPLUS MONEYS REAL OR PERSONAL PROPERTY.' 1062. It depends upon circumstances. 1063. Estate of deceased owner. 1064. The real estate of an infant. PRACTICE IN PROCEEDING TO DISTRIBUTE SURPLUS. 1065. Who may apply for surplus. I065. Notice of application for the or- der of reference. 1067. Referee should be sworil. 1068. Certificates and proofs to be produced. 1069. Testimony must be signed and filed. 1070. Duty of referee. 1071. Rights of claimant. 1072. The report of the referee. 1073. Confirming report. 1074. Costs. PEOVISIONS OF LAW EELATING TO DISTEIBUTION OF STJEPLTTS. § 1039. Prior to the passage of the Revised Statutes in 1830, it was the practice to ascertain the amount of all incumbrances, and to adjudge the rights of all of the defendants before making a decree for the sale of the mortgaged premises.' It was therefore necessary that all of the parties to the suit should be served with copies of the bill, and that they should all answer, setting up their rights, if they did not wish to lose their liens upon the fund which the sale of the mort- ' Renwick v. Macomb, Hopk. 277 ; Wheeler v. Van Kuren, i Barb. Ch. 490. §§ 1040-1041.J SIJKPLUS PKOCEEDINGS. 679 gaged property would create. It sometimes happened tliat the com- plainant was delayed in the enforcement of his claims, though his mortgage was admitted to be valid, in order that subsequent incum- brancers might litigate, as between themselves, their rights to surplus. Costs were allowed to all who appeared and answered, and the fund was consumed or in a great degree diminished by the expenses of a litigation which, in the event of the inadequacy of the security to pay any more than the prior lien, was entirely useless.' § 1040. Present statute. — To obviate this trouble, the Revised Statutes contained a provision," which is re-enacted in the Code of Civil Procedure, as follows :■ " If there is any surplus of the proceeds of the sale, after paying the expenses of the sale and satisfying the mortgage debt and the costs of the action, it must be paid into court for the use of the person or persons entitled thereto. If any part of the surplus remains in court for the period of three months, the court must, if no application has been made therefor, and may, if an application therefor is pending, direct it to be invested at interest, for the benefit of the person or persons entitled thereto, to be paid upon the direction of the court." ' § 1041. Rules of court. — Under this provision of the statute, the 132d and 136th Kules of the Court of Chancery were framed, which still exist with some modifications, as the 61st and 64th Rules of the Supreme Court. The 61st Rule provides that " all surplus moneys arising from the sale of mortgaged premises under any judgment, shall be paid by the sherifE or referee making the sale within five days after the same shall be received and be ascertainable ; in the city of New York, to the chamberlain of the said city, and in other counties to the treasurer thereof, unless otherwise specially directed, subject to the further order of the court ; and every judgment in foreclosure shall contain such directions, except where other provisions are spe- cially made by the court." Rule 64 provides that, " on filing the report of the sale, any party to the suit, or any person who had a lien on the mortgaged premises at the time of the sale, upon filing with the clerk where the report of sale is filed a notice stating that he is entitled to such surplus ' Eagle Ins. Qo. v. Flanagan, i How. Trust Company v. Seymour, g Paige, Ct. of Appeals Cases, 3JI ; Miller v. 538. Case, Clarke, 395 ; Farmers' Loan & ^ 2 R. S. 192, §§ 159, 162. ' Code of Civ. Pro. § 1633. 680 MOETGAGES OF EEAL PEOPEETT. [§ 1042. moneys, or some part thereof, and the nature and extent of his claim, may have an order of reference to ascertain and report the amount due to him or to any other person, which is a lien upon such surplus moneys, and to ascertain the priorities of the several liens thereon ; to the end that, on the coming in and confirmation of the report on such reference, such further order may be made for the distribution of such surplus moneys as may be just. The referee shall in all cases be selected by the court. The owner of the equity of redemption and every party who appeared in the cause, or who shall have filed such notice with the clerk, previous to the entry of the order of ref- erence, shall be entitled to service of a notice of the application for the reference, and to attend on such reference, and to the usual no- tices of subsequent proceedings relative to such surplus. But if such claimant or such owner has not appeared or made his claim by an at- torney of this court, the notice may be served by putting the same into the post-office directed to the claimant at his place of residence, as stated in the notice of his claim, and upon the owner in such man- ner as the court may direct. All official searches for conveyances or incumbrances, made in the progress of the cause, shall be filed with the judgment roll, and notice of the hearing shall be given to any person having or appearing to have an unsatisfied lien on the moneys in such manner as the court shall direct ; and the party moving for the reference shall sh'ow by affidavit what unsatisfied liens appear by such official searches, and whether any, and what, other unsatisfied liens are known to him to exist." § 1042. The object of these rules was to lighten the expense of foreclosure cases, without impairing in any way the rights of others against the mortgagor, or rather in the equity of redemption. They only alter the old practice of the court, and direct the mode by which the owners of liens inferior to the mortgage foreclosed may ascertain their rights in any surplus, and since the passage of the 136th Eule of the Court of Chancery, in which the substance of these rules was contained, it is no longer proper in mortgage cases for defendants whose claims are upon the equity of redemption merely, and who have no interest in the mortgaged premises in opposition to the plaintiff's claims, to litigate their claims to surplus as between them- selves, until it is ascertained that there will be a surplus.' 1 The Union Ins. Co. v. Van Rensse- Flanagan, i How. Ct. of Appeals Cases, laer, 4 Paige, 85 ; Eagle Iijs. Co. v. 311 ; Miller v. Case, Clarke, 395 ; Farm- §§1043-1044.] STTKPLirs peoceedings. 681 § 1043. Distribution of surplus by the surrogate. — By cliapter 658 of the Laws of 1867, entitled " An Act to extend the jurisdiction of surrogates' courts," amended by chapter lYO of the Laws of 1870, provision was made for the distribution by the surrogate of the county of surplus arising from sales of land by virtue of any mort- gage or other lien thereon. This statute was held to apply only to cases of foreclosure by advertisement,' and it has since been re- pealed.'' In re-enacting a similar provision in the Code of Civil Procedure, the language of the former statute is closely followed,' and it is believed that the surrogate has no jurisdiction to distribute surplus arising from a sale under a judgment rendered by a court of general equitable jurisdiction. The language of the Code is as fol- lows : " Where real property or an interest in real property liable to be disposed of as prescribed in this title (distribution of real prop- erty for the payment of debts and funeral expenses), is sold in an ac- tion or a special proceeding, specified in the last section, to satisfy a mortgage or other lien thereupon, which accrued during the dece- dent's lifetime ; and letters testamentary or letters of administration, upon the decedent's estate, were, within four years before the sale, issued from a surrogate's court of the State, having jurisdiction to grant them ; the surplus money must be paid into the surrogate's court from which the letters issued." * Whether this apphes to surplus created in an action to foreclose may be questioned, but it is settled that the surplus proceeds of a sale made under a judgment more than four years after letters testamen- tary were issued, must be distributed in the action, though the judg- ment directing the sale was entered within the four years.' WHAT MAT BE LITIGATED. § 1044. Nature of the proceeding. — The reference as to liens - upon the surplus money in a foreclosure suit is not a collateral refer- ence. A foreclosure suit cannot be said to have terminated until the surplus moneys have been disposed of in that suit. The court has ers' Loan & Trust Co. v. Seymour, 9 ^ Laws of 18S0, ch. 245. Paige, 538 ; Smart v. Bement, 4 Abb. ' Code of Civ. Pro. § 2798. App. Dec. 253 ; 3 Keyes, 241. ^Code, § 2798. See further as to pro- ' Louc]£s V. Van Allen, 11 Abb. Pr. N. ceedings in surrogate's court to distribute S. 427 ; Fleiss V. Buckley, 24 Hun, 514 ; surplus. Chap. XXXIIL, Foreclosure German Savings Bank v. Sharer, 25 Hun, by Advertisement. 409. ' White V. Poillon, 25 Hun, 69. 682 MORTGAGES OF REAL PKOPERTT. [§ 1045. not only tlie power, hut it is its duty in that action to provide for the equitable disposition of the surplus money.' The judgment of fore- closure and sale does not terminate the suit or deprive the court of the power to make other orders in it. The equities of lienors subsequent to the mortgage foreclosed are just as much before the court, and as much the objects of its care as those of the mortgage primarily foreclosed, and it will even order a sale of more of the mortgaged premises than is necessary to pay the , mortgage, for the purpose of creating a surplus for the benefit of a junior incum- brancer.' It will be observed that the statutory provision is that the surplus is to be " brought into court for the use of the defendant, or of the person who may ie entitled thereto, subject to the order of the court." ' The rule directs that the referee shall ascertain the amount due to any person " which is a Ken upon such surplus moneys, and to ascer- tain the priorities of the several -liens thereon ; to the end that, on the coming in and confirmation of the said report on such reference, such further order may be made for the distribution of such surplus moneys as may be just." * There may be cases where a person has an eqtiitable claim on the surplus, although he has not what may be termed, in strictness, a Hen, and it has been a matter of curious in- quiry as to what claims can be litigated in these proceedings. § 1045. Controversy as to jurisdiction of referee. — In one case where a judgment creditor of the husband of the owner of the equity of redemption strove, in the proceedings before the referee, to estab- lish by proof that the property was purchased with funds furnished by the husband, and that it should, therefore, be holden for his debt, the relief was denied. Judge Oleeke, in giving the opinion of the court, said that, " the liens referred to in the rule are those which subject the estate to be sold under execution without any further intervention of the court ; claims, however equitable, which have not matured into liens under which the property can be charged in exe- cution and sold without farther adjudication, cannot be taken into consideration by the referee under an order of this nature." " The ' The Mutual Life Ins. Co. v. Bowen, ' Code of Civ. Pro. § 1633. 47 Barb. 618. " Rule 64. ^ De Forest v. Farley, 62 N. Y. 628 ; ^ King v. West, 10 How. 333. Livingston v. Mildrum, ig Id. 440; Beekman v. Gibbs, 8 Paige, 511. §§1046-1048. J SURPLUS pkoceedistgs. 683 same doctrine was affirmed in Husted v. Dakwi (lY Abb. 13Y), the court holding that the referee can only take into consideration abso- lute liens on the estate, those which subject it to be sold as distin- guished from any equitable claims not matured into liens. The court in the last-mentioned case went even further, for it laid it down as the law that the referee, when he finds a lien regular and valid on the record, has no right to go behind it and inquire whether it is irreg- ular or fraudulent or inequitable. He is to inquire simply whether a lien exists, not whether it ought to exist. §1046. {Contmued.) — In The Mutual Life Ins. Co.^.Bowen{Atl Barb. 618), a different view was taken, and it was claimed that the two cases of King v. West [supra), and Husted v. Daltin {supra), were both decided prior to 1858, while the rule only allowed claims for liens hy judgment or decree. It was held that the proceedings on the reference are proceedings in the original action ; that it is not a collateral reference, and that any issue may be tried in it when such issue must be determined by the court before the whole of the fund can be finally and completely administered. § 1047. {Continued) — In the still later case of The Union Dime Savings Institution v. Osley (4 Hun, 657), the doctrine of King y. West and Husted v. Dakin was approved, and the court said that the order of reference under the rule is not granted for the investigation and determination of contested claims, but for the purpose of ascer- taining liens and claims about which there is no dispute, and to settle the priorities of the liens, that each may be adjusted according to its legal status. The court said that in the matter under consideration, " which was a summary proceeding and not an action, and under the circumstances which marked its progress, and the doubt which existed in relation to the counter-claim urged, the court thought it better to compel the parties claimants to proceed by action in the regular way." It will be noticed that in this case the court was influenced by " the circumstances which marked the progress" of the proceeding, and that the order that was made referred the claims to a referee to hear and determine, thus holding the proceedings in court, and only mak- ing a change in the wording of the order of reference. §•1048. {Continued.) — In Atkmtic Savings Bank v. Hetterioh (5 JS". Y. Sup. [T. & C] 239 ; s, c. less fully sub nom. Atlantic Savings Bank v. Hiler, 3 Hun, 209), the lien of an attorney upon a judg- 684 MOETGAGES OP EEAL PEOPERTY. [§ 1049. ment, which was a lien upon the surplus, was enforced. The case is not authority for holding such to be a regular practice, since it rested largely upon its own special circumstances. In The Mutual Life Ins. Co. v. Salem (5 IST. Y. Sup. [T. & C] 246 ; s. 0. 3 Hun, IIT), Datis, P. J., makes the following remarks : " The object of the reference is to inform the court of the legal and equitable titles to the money ; and on the coming in of the report and the testimony, the court, sitting in equity, has the most ample power to confirm, set aside, or refer back the same for further proofs, as to its conscience shall seem just and equitable. The object of making the reference is, as is well recited in the 64th rule of the court, ' to the end that on the coming in and confirmation of the report, such order may be made for the distribution of such surplus money as may be just.' While the moneys remain in court undistributed, the equit- able powers of the court over the proceedings must be complete ; and on opening the confirmation and referring the matter to the referee for further proofs, the court acts in the exercise of such powers." In Sleight v. Eeed (9 How. 278 ; s. c. affi'd 18 Barb. 169), it was declared that the surplus moneys brought into court are subject to its jurisdiction as a court of equity, which, in cases where the wife's property (prior to the act of 1848) was taken for the husband's debt, never allowed the fund to be taken out without a suitable provision for the wife and her children. § 1049. {Continued) — The case of Buchan v. Sumner (2 Barb. Ch. 165) was very fully discussed by eminent counsel. The ques- tions decided arose upon a claim for surplus moneys in proceedings under the rule, arid it was held by Chancellor Walwoeth, that the equitable claim of a partnership creditor, as against partnership prop- erty, must take precedence of a judgment which bound the legal title of one of the copartners. It seems to have been conceded by the chancellor and by the counsel for both sides, that the questions were to be disposed of upon equitable principles, and that the form of the remedy presented no obstacle to the exercise of the equitable jurisdiction of the court. So, too, in Smith v. Jackson (2 Edw. 28), the equitable claim of a partner in real estate purchased for partner- ship purposes, was considered in surplus proceedings, and it was Jield that the surplus was personal property, and went to a surviving partner for the use of the copartnership, after the widow of the de- §§ 1050-1051..J STJEPLUS PROCEEDINGS. 685 ceased partner had received her dower. But in Stevens v. Ba/ak of Central New Yorh (31 Barb. 290) a judgment against two of three copartners was held entitled to priority of payment, as against a sub- sequent judgment against all the partners, out of a surplus created by the sale of partnership property, on the ground that the priorities should be determined according to the priorities of the legal liens. § 1050. Jurisdiction of referee as now settled. — The decision of the Court of Appeals in Bergen v. Garmcm {19 'N. Y. 146, reversing s. c. sui nom. Snedeher v. Snedeher, 18 Hun, 355) should finally settle this controversy. The action was one to foreclose a mortgage, and the questions in dispute all arose on appeal from an order con- firming the report of the referee appointed in proceedings under the rule to distribute the surplus. The contest was relative to a convey- ance to the wife of the mortgagor through a third person, and to a mortgage, which conveyance and mortgage were held to be void as against creditors. Judge Milleb remarked : " We think that the referee, by virtue of the order to ascertain and report the liens and their priorities in reference to the surplus moneys, had authority to inquire as to the validity of the conveyances under which Mrs. Snedeker claimed, and of the mortgage of herself and husband to Clayton. The object of the reference was" to ascertain to whom the surplus moneys belonged ; and this opens a door to an inquiry as to the character of aU hens which may be presented. No reason exists why the fraudulent character of conveyances cannot be tested in these proceedings, as well as that of all other liens. One of the objects and purposes of a foreclosure suit is the distribution of the fund arising upon a sale. In Li/oingston v. MUdrv/m (19 JS^. Y. 441, 442), it was held that the rights and equities of the defendants, who were lienors or claimants of the equity of redemption, are as much before the court and as much the objects of its care, as those of the owner of the mortgage primarily to be foreclosed. Why then should not the court have power to ascertain what liens are fraudulent ? Where jurisdiction of a court of equity is once acquired, such court, as a general rule, has the right to proceed and do justice between aU the parties." ' § 1051. {Continued.) — The reference provided for in cases to dis- tribute surplus is intended to afford an opportunity to the parties to ' See also to sapie effect, Fliess v. Buckley, go N. Y. 286 ; Rogers v. Ivers, 23 Hun, 424. 686 MORTGAGES OF EEA.L PEOPEETT. [§§1052-1053. litigate and dispose of their contesting claims asserted by way of liens upon the fund. And the referee has full power and authority to hear all the evidence which may be offered affecting the adjustment of their controversy. He may receive proof that an asserted lien for any cause is without foundation ; or that it has been overstated in amount, or otherwise satisfied and discharged, either by payment or the dealings of the parties, or that the claimant has placed himself in a position where the law will not permit him to participate in the surplus. In fact, the authority the referee is entitled to exercise for the hearing and disposition of the claims is as extensive as the claims themselves, and the legal and equitable objections that can be made to their allowance.' § 1053. Questions passed upon. — The same rules control where it is sought to set aside a deed as fraudulent, as would apply in an action brought for that purpose ; and if the return of an execution unsatisfied would be necessary to sustain an action, it would also be necessary to establish a right to similar relief in surplus proceedings." A judgment creditor may, in these proceedings,' set up usury in a prior mortgage f but he cannot set up this defense against a prior judgment.* An attorney for a judgment creditor claiming a lien upon a judg- ment for his fees, in procuring it may have his rights protected by a direction that a portion of the amount due on the judgment be paid to him." On a reference in surplus proceedings a clause in a mortgage may be shown to have been inserted by mistake and may be disregarded." A judgment lien upon surplus moneys cannot be attached collater- ally by a junior claimant for mere irregularity not affecting the juris- diction of the court to render if WHO IS ENTITLED TO SmRPlUS. § 1053. Only persons owning rights in equity of redemption. — The liens upon, or the rights in, the land which the defendants had before the sale, and which the sale destroys, are, after the sale, trans- ' Per Daniels, J., in Kingsland v. ■• Slosson v. Duff, i Barb. 432. Chetwood, 39 Hun, 602, 607 ; see also ^ Atlantic Savings Bank v. Hilar, 3 Bowenv.Kaughran,iN.Y. St.Reptr.121. Hun, 209. ^ Snedeker v. Snedeker, 18 Hun, 355. » Tator v. Adams, 20 Hun, 131. ' Mutual Life Ins. Co. v. Bowen, 47 ' White v. Bogart, 73 N. Y. 256. Barb. 618. § 1054. J . STJEPLTJS PROCEEDINGS. 687 f erred to the surplus.' A person whose claim upon the property is superior to the mortgage foreclosed, has no claim upon the surplus/ and the same principle excludes a lienor who was not made a party to the suit, and whose lien still remains, from sharing in a fund which the sacrifice of his property did not help to create.' A senior mortgagee, or one who claims the rights of a senior mort- gagee, by subrogation or otherwise, can claim no right to surplus money realized by the foreclosure of a junior mortgage, and his rem- edy is to foreclose his own lien." § 1054. Prior Hens bound by judgment. — In The Emigrant Industrial Savings Bank v. Goldman (T5 IST. Y. 127), a defendant who claimed under a mechanic's lien, filed before the recording of the mortgage foreclosed, was made a party, and he was included in the number of defendants alleged to have or claim to haye some interest or lien which accmed subsequent to the plaintiff's mortgage. He appeared in the action, and the notice of appearance contained a waiver of " service of a copy of all papers, except notice of sale and appli- cation for surplus funds." The usual judgment was taken against him, and a sale was had which yielded a surplus. An application was made on his behalf for payment out of the fund so created, which was denied. It was held that the rights of the defendant, being par- amount to the mortgage, were not affected by the foreclosure, which only operated to bar interests in the equity of redemption,' and that therefore no claim could be sustained to the proceeds of the sale. It was urged that the waiver of notices operated as a consent to come in subsequently to the plaintiff's mortgage, and that a different rule should.prevail. Church, 0. J., in giving the opinion of the court, remarked that he should be disposed to adopt this view if it appeared that in fact the premises were sold clear of the lien, and especially with the defendant's knowledge and acquiescence. The notice of waiver did not, however, contain a stipulation waiving any right of priority ; and the lienor had, after the commencement of the fore- ' Averill v. Loucks, 6 Barb. 470 ; Bly- Industrial Savings Bank v. Goldman, 75 denburgh v. Northrop, 13 How. 289; N.Y. 127 ; Bache v. Doscher,67N.Y. 429. Matthews v. Duryee, 45 Barb. 6g ; s. c. * Firestone v. The State, 100 Ind. 226. 17 Abb. 256; s. c. 3 Abb. App. Dec. 220. ^ Eagle Fire Ins. Co. v. Lent, 6 Paige, ^ De Ruyter v. St. Peter's Church, 2 635; Frost v. Koon, 30N. Y. 428; Lewis Barb. Ch. 555. v. Smith, 9 N. Y. 502; Corning v. Smith, i* Winsloiv V. McCall, 32 Barb. 241 ; 6 N. Y. 82 ; Bank of Orleans v. Flagg, Root V. Wheeler, 12 Abb. 294; Emigrant 3 Barb, Ch. 318. 688 MOKTGAGES OF REAL PEOPEETT. [§§1055-1057. closure, proceeded upon his Hen in a way that was deemed to be inconsistent with an understanding on his part that he had consented to be satisfied with a claim upon the surplus. § 1055. Questions of priority. — Prima facie the mortgagor or his grantees are entitled to the surplus,' and presumptively the mort- gage first recorded is the prior lien." If, however, the mortgage first recorded is shown not to have been a valid lien for its full amount at the time the subsequent mortgage was given, by reason of the consid- eration not having then been advanced or otherwise, the presump- tion of priority will be destroyed." So, too, if the mortgagee in the mortgage first recorded had notice, prior to taking his security, of an unrecorded mortgage, his priority will be gone." So, also, an un- registered mortgage is entitled to priority over a subsequently dock- eted judgment.' § 1056. Adjusting equities. — The equitable rules regulating the marshalling of assets control in these proceedings, where different parcels of the mortgaged premises are incumbered with separate judgments or mortgages." The manner the surplus came into court, or the order in which the parcels were sold, will have but little to do with the decision if the amount each parcel produced is known, for the court will adjust the equities as between the parties, whenever they can be made to appear.' So, a defendant who has paid more than his proportion of a prior lien, will be deemed subrogated to the rights of the plaintiff and awarded satisfaction out of the sur- plus.' § 1057. A lessee whose lease is destroyed by the foreclosure is entitled to damages out of the surplus equal to the value of the term over and above the rent reserved. The value of the term must de- pend upon the circumstances of every individual case, the length of the term and conditions of the lease, the character of the property, its location, the readiness with which it may be let, the condition of the ' Franklin v. Van Cott, ii Paige, 129. ker, 3 Hun, 30 ; s. c. 5 N. Y. Sup. (T. & ' Freeman v. Schroeder, 29 How. 263 ; C.) 325; Savings Bank of Utica v. Wood, s. c. 43 Barb. 618. 17 Hun, 133. ' Id. ' Snyder v. Staflford, ir Paige, 78 ; * Haywood v. Shaw, 16 How. 119. James v. Hubbard, i Paige, 234 ; Op- ' Thomas v. Kelsey, 30 Barb. 268. penheimer v. Walker, 3 Hun, 30 ; s. c. " N. Y. Life Ins. & Trust Co. v. Vander- 5 N. Y. Sup. (T. & C.) 325. bilt, 12 Abb. 458 ; Oppenheimer v. Wal- 'Lawrence v. Cornell, 4 Johns. Ch. 545. §§ 1058-1059.] SUEPLUS proceedings. 689 buildings, whether substantial and durable or requiring frequent repairs, the uniformity of rents in the neighborhood, or their fluctuat- ing character ; in short, every material consideration which would enter into the mind of a purchaser of the term in judging what would be a fair price for it, and, like other ordinary questions of value, should be determined as a matter of fact upon the testimony of wit- nesses competent to speak upon the subject.' In the absence of proof the presumption is that the rents reserved are the fair value of the use and that no damage is sustained by the lessee. The annual value of the leasehold estate and the amount of rent reserved must both be shown." § 1058. Dower in surplus. — The rights of the wife of the mort- gagor in the surplus are the same as they were in the land before the sale. This was once doubted, and it was said that if the husband lived until after the sale, the wife could not claim dower.' It is, however, now the settled doctrine in this State that a widow is en- titled to dower in the surplus proceeds of her husband's lands, after satisfying all incumbrances to which she is bound to contribute. It is equally well settled that a wife is entitled to have her inchoate right of dower in the surplus protected. If the husband be dead at the time of the distribution of the surplus, the widow is entitled to have one-third of the surplus, over and above claims to which she is bound to contribute, invested for her beneiit during her life. If the husband be living at that time, the same amount is to be invested for the joint lives of the husband and wife, the income during the life of the husband to be subject to the order of the court ; if the wife sur- vive her husband, the income to be paid to her for her dower.* § 1059, Judgments — "Where judgments have been obtained which were specific liens upon the equity of redemption before the sale, they will be entitled to priority of payment out of the surplus according to their respective dates. But'if the person against whom the judgments were obtained had only an equitable interest in the property, which could not be bound by the lien : as, for example, if " Clarkson v. Skidmore, 46 N. Y. 297, 289 ; Matthews v. Duryee, 4 Keyes, 525, overruling s. c. 2 Lans. 238; Douglass v. affi'g s. c. 45 Barb. 69 ; 17 Abb. 256 : 3 Woodworth, 51 Barb. 79. Abb. App. Dec. 220 ; Denton v. Nanny, ' Larkin v. Misland, 100 N. Y. 212. 8 Barb. 618 ; Vartie v. Underwood, 18 3 Frost V. Peacock, 4 Edw. 678. Barb. 561. *Blydenburgh v. Northrop, 13 How, 44 690 MOETQAQ-ES OP REAL PEOPERTT. [§§ 1060-1062. he was merely in possession under a contract to purchase, the judg- ments will be paid on the basis of equality only.' § 1060. Deceased mortgagor. — It is said that where there is no other creditor entitled to priority, the court will order the claim of a creditor who has obtained a decree of the surrogate to be paid, and will not appropriate the surplus to a legatee of the deceased mort- gagor.^ So, too, in the absence of any other creditor, it has been said that the surplus can be applied to the payment of a claim of the mortgagee against the mortgagor, which is not a lien upon the fund.' But this proposition should be received with caution. § 1061. Reclaiming money erroneously paid. — It has been held that surplus moneys paid on an order regularly obtained, cannot be reclaimed ; but this proposition may perhaps be qualiiied with the proviso that the person receiving the money had some equitable claim to it.' ABE SUEPLTTS MONEYS EEAL OE PEESONAL PEOPBETT. § 1062. It depends upon circumstances as to whether surplus moneys shall be treated as real or as personal estate. When they are to be divided among persons who had liens upon the land, they are subject for this purpose to the same rules which govern real estate ;° but when the rights of the claimants in and to the fund are fixed and determined, the money in their hands is personal property.' When the owner of the equity of redemption dies subsequent to the sale, his interest in the surplus is treated as personal estate, and goes to the executor or administrator ;' but when the sale takes place subsequent to* the death of the mortgagor, the surplus is regarded as real estate, and goes to the heir.^ If a judgment is recovered against the owner of an equity of re- demption, before a sale on foreclosure of the mortgage, the judgment ' Purdy V. Doyle, i Paige, 558. Swezey v. Willis, i Bradf. 495 ; Cox v. « Clark's Case, 15 Abb. 227. McBurney, 2 Sandf. 561 ; Horton v. Mc- ' Beekman Fire Ins. Co. v. First Coy, 47 N. Y. 21 ; Sweezey v. Thayer, i Methodist Episcopal Church, 29 Barb. Duer, 286 ; Foreman v. Foreman, 7 Barb. 658 ; s. c. 18 How. 431. 215 ; Davison v. De Freest, 3 Sandf. Ch. *Burchard V. Phillips, II Paige, 66. 456; Hoey v. Kinney, 10 Abb. 400; ' Moses V. Murgatroyd, i Johns. Ch. Denham v. Cornell, 67 N. Y. 556. . 119. ° Dunning v. Ocean National Bank, 61 « Cope V. Wheeler, 41 N. Y. 303. N. Y. 497 ; Fliess v. Buckley, 22 Hun, ' Bogert V. Furman, 10 Paige, 496 ; 551 ; Beard v. Smith, 71 Ala. 568. §§ 1063-1064.] SUEPLTJS PEOCEEDINGS. 691 is a lien upon surplus moneys arising upon the sale. If the judgment be got after the sale, though before distribution of the surplus, there is no lien upon them.' The proceeds of land is, like any other money, personal prop- erty ; but it is, under the doctrine of equitable conversion, in some cases treated as real estate. The rule which controls the cases seems to be, that when the rights of the claimants are founded upon inter- ests which they once held in the land itself before any sale had been made, then their rights in the proceeds are measured by the same rules which controlled their rights in the land, and as to them the money is treated as real estate ; but if the rights of -the claimants did not attach to the land itself, and only came into existence after the money had taken the place of the land, then they must hold, if at all, under the rules which govern personal property. § 1063. Estate of deceased owner.^ — The question as to whether property is real or personal, when it arises in determining the rights of conflicting claimants to the estate of a deceased owner, is a question of law, and it is not aided by any declaration made by such owner during his lifetime, which is not executed in such form as to be valid as a will. Neither can it be aided by the terms of an agreement made by such owner, of such a nature that the provision declaring the property to be personal could be cancelled by him without disturbing any vested right. So, if a mortgage shall contain an authority to the mortgagee to sell, with a direction that the surplus, after the satisfaction of the mortgage debt, shall be paid to the mortgagor, " or his executors or administrators," this language will nob render the surplus personal property if the sale shall be made after the death of the mortgagor. It is to be construed to mean that the surplus is to be paid to the personal representatives of the mort- gagor, provided the sale takes place while the mortgagor is alive.'' The fact that the distribution of the surplus is intrusted to the sur- rogate does not render it personal property.^ § 1064. The real estate of an infant and its proceeds, if sold during his minority, continues to be real estate until he reaches full age, for the purposes of descent, notwithstanding the fact that it may, ■ Per FoLGER, J., in Denham v. Cor- ' Dunning v. Ocean National Bank, nell, 67 N. Y. 556, 562 ; Sweet v. Jacocks, 61 N. Y. 497. 6 Paige, 355 ; Douglass v. Houston, 6 ^ Ibid. Ohio (Hammond), 182. 692 MOETGAGES OF REAL PEOPEETT. [§ 1065. at the time of the death of the infant, be represented by cash in bank or other strictly personal assets. It is provided by statute that a sale of real property, or of an interest in real property, of an infant or incompetent person, made under special proceedings for that purpose, pursuant to an order of the court, does not give to that infant or in- competent person any other or greater interest in the proceeds of the sale than he had in the property or interest sold. Those proceeds are deemed property of the same nature or estate as the interest sold until the infant arrives at full age or the incompetency is removed.' This principle has been appUed to the proceeds of the real estate of an infant sold under a judgment in partition," and also where the sale was under a judgment of foreclosure.' PEAOTICE IN PEOCEEDING TO DISTEIBUTE SUEPLUS. § 1065. Who may apply for surplus. — As the rule was originally framed it was provided that " any defendant " might have an order of • reference, etc. Under this provision it was held that the com- plainant must set up all of his claims in his bill, and could not apply for any part of the surplus in any other right than as holder of the mortgage foreclosed." The next year after this decision was made, and in order to obviate inconveniences that might arise, the rule was amended so as to allow " any party to the suit," or any person not a party, who had a lien on the mortgaged premises at the time of the sale, to have an order of reference, to ascertain the priorities of liens." The plaintiff now has the same right that any one else has to pro- cure the order of reference and to assert and prove a lien junior to the mortgage foreclosed." It is unnecessary, and in most cases it is improper, for him to allege all of his demands in his complaint. If such demands are junior to the mortgage foreclosed and not alleged in the complaint, they will be cut off by the sale.' The sale cannot, therefore, be made subject to them." ' Code of Civil Pro. § 2359 ; 2 R. S. * Tower v. White, 10 Paige, 395. 195, § 180. ^ Field V. Hawxhurst, 9 How. 75. » Horton v. McCoy, 47 N. Y. 21. * Mutual Ins. Co. v. Transchnicht, 3 2 Sweezy v. Thayer, i Duer, 286 ; Abb. N. C. 135. Forman v. Marsh, 11 N. Y. 544, over- ' Tower v. White, lo Paige, 395 ; ruling Robinson v. McGregor, 16 Barb. Roosevelt v. EUithorp, 10 Paige, 415 ; 534, which extends the rule after major- Wheeler v. Van Keuren, i Barb. Ch. ity until election by the infant ; Petition 490 ; Homeopathic Mutual Life Ins. Co. of Thomas, 4 T. & C. 413 ; s. c. i Hun, v. Sixbury, 17 Hun, 424. 475; Denham V.Cornell, 7 Hun, 664; Cut- ^Homeopathic Mutual Life Ins. Co. ting v. Lincoln, 9 Abb. N. S, 436, applies v. Sixbury, 17 Hun, 424. the same rule to a lunatic's property. §§1066-1068.] SURPLUS PEOOEEDiwas. 693 § 1066. Notice of application for the order of reference should be given to the owner of the equity of redemption, to every party who appeared in the cause, or who shall have filed a notice of claim with the clerk previous to the entry of the order of reference, and also to any person having, or appearing to have, an unsatisfied lien shown by the official searches for conveyances or incumbrances filed with the judgment-roll. This notice should be served upon the attor- neys for those who appeared in the action, and also upon the attorneys for those claimants who have filed notices of claim through attorneys. If notices of claim have been filed by claimants personally, no name of an attorney appearing, the notice of application for the order may be served by putting the same into the post-office, directed to the claimant at his place of residence, as stated in the notice of his claim. If the ovruer of the equity of redemption has not appeared by attor- ney in the action, or if any apparent claim of a person who has not appeared by attorney in the action appears from the official searches, an order of the court must be procured, directing the manner in which service shall be made.^ An mcumhiancer pendente life need not be made a party to the foreclosure, and if his lien is not known to exist, it is possible that the surplus may be distributed without notice to him. But if his lien is " known to exist," he is entitled to notice of the surplus proceed- ings,'' and he will be protected by the court.' § 1067. Referee should be sworn. — The referee, before proceed- ing to hear the testimony, should be sworn faithfully and fairly to try the issues, and to determine the questions referred to him, as the case requires, and to make a just and true report according to the best of his imderstanding.* But an omission of the oath of the referee is not fatal, and may be supphed." § 1068. Certificates and proofs to be produced. — The moving party should present to the referee a certificate of the county treas- urer or (in the city of New York) of the chamberlain of that city, showing the amount to the credit of the action as surplus ; also, the certificate of the clerk showing what notices of claim have been filed up to the granting of the order of reference, and what parties have appeared in the action, and what unsatisfied liens appear upon the Rule 64. = Id. ■> Code of Civ. Pro. § 1016. ' Cook V. Mancius, 5 Johns. Ch. 89. ^ Id. § 721. MOETGAGES OP REAL PEOPEETT. [§§1069-1070. searches on file. And before the referee proceeds to make his report, he should ascertain by the proper certificates and other evidences, that the owner of the equity of redemption and all claimants and other proper parties have been notified to attend before him on the reference.* § 1069, Testimony must be signed and filed. — A reference to ascertain and report the amount due to any party vrhieh is a lien upon surplus moneys, is within Eule 30, which provides that " in refer- ences other than for the trial of the issues in an action, or for com- puting the amount due in foreclosure cases, the testimony of the wit- nesses shall be signed by them, and the report of the referee shall be filed with the testimony, and a note of the day of the filing shall be entered by the clerk in the proper book, under the title of the cause or proceeding, and the said report shall become absolute, and stand as in all things confirmed, unless exceptions thereto are filed and served vnthin eight days after service of notice of the filing of the same. If exceptions are filed and served vdthin such time, the same may be brought to a hearing at any special term thereafter on the notice of any party interested therein." When the witnesses fail to sign the testimony, the proper remedy is by a motion, and no exception to the report on that ground will be available." § 1070. Duty of referee. — The order of reference directs the ref- eree not only to inquire and report as to the amount due to the par- ties obtaining the reference, but also as to the lien of any other person on the surplus moneys. The referee, therefore, should ascertain the whole amount of such surplus moneys by the certificate of the county treasurer or city chamberlain, as the case may be ; and if the incum- brance of the party obtaining the reference and entitled to priority is not large enough to exhaust the whole surplus moneys, the referee must go further and ascertain who is entitled to the residue of such surplus, so that upon the coming in of the report an order may be made to dispose of the whole surplus fund. Prima facie the mort- gagor, or those who are stated in the complaint to be his heirs or devisees or grantees, if he is dead, or has sold the propei-ty, are enti- tled to the surplus. And if no one attends before the referee and produces evidence of a better right, and there is no evidence before him that the person ^>Wma facie entitled has parted with his interest, ' Rule 64 ; Hulbert v. McKay, 8 Paige, ^ Nat. State Bank v. Hibbard, 45 How. 651 ; Franklin v. Van Cott, 11 Paige, 129. 281. §§1071-1074.] STJEPLTJS PBOCEEDINGS. 695 the referee should report that the residue of such surplus belongs to the mortgagor or to the Tperson ^rima facie entitled to it." § 1071. Rights of claimant. — An incumbrancer who has neg- lected to file a notice of his claim may go before the referee, pending the reference, and file his claim with him, and he will then be enti- tled to be heard upon the reference xipon such equitable terms as to costs as the referee shall direct.' A claimant may not, pending a reference to ascertain the rights of all persons to the surplus fund, maintain an independent proceeding by a new petition.' § 1072. The report of the referee should show upon its face that the persons entitled to be summoned to attend the reference, either attended or had due notice to attend, and also who is entitled to the residue of the surplus beyond the amount due to the appli- cants upon the order of reference." If any persons have appeared upon the reference, so as to entitle them to file exceptions to the re- port, a notice of the filing of such report must be served upon them, and their exceptions must be filed within eight days thereafter, or the report will stand confirmed.* ISTo order of distribution should be made until the time for filing exceptions has expired." § 1073. Confirming report. — The court at special term has ample power to confirm, set aside, or refer back the report ; but it is not authorized to make new findings, or to modify those made by the referee. It is the right of each party to have all of the facts found by the referee who saw the witnesses and heard their testimony.' § 1074. Costs. — Motion costs are all that can properly be awarded to the successful party in proceedings to obtain surplus after a sale under a' judgment of foreclosure ;' no trial fee can be granted,' nor can any extra allowance be made.'" Ordinarily the costs of the proceeding are chargeable on the fund ; but where the facts are such as to make another rule more equitable, they may be charged upon a party individually." ' Per Walworth, Ch., in Franklin v. ° McDermott v. Hennesy, 9 Hun, 59 ; Van Cott, 11 Paige, 129. Elwell v. Robbins, 43 How. 108 ; N. Y. "Hulbert v. McKay, 8 Paige, 651. Life Ins. Co. v. Vanderbilt, 12 Abb. 458. 2 De Ruyter v. The Trustees of St. Pe- ' Dudgeon v. Smith, 23 W. Dig. 400 ; ter's Church, 2 Barb. Ch. 555. Matter of Gibbs, 58 How. 502 ; German * Franklin v. Van Cott, 11 Paige, 129. Savings Bank v. Sharer, 25 Hun, 409. ' Rule 30. " German Savings Bank v. Sharer, 25 ' Franklin v. Van Cott, 11 Paige, 129. Hun, 409. " Mutual Xife Ins. Co. v. Anthony, 23 " Lawton v. Sager, 11 Barb. 349 ; Be- W. Dig. 427. vier v. Schoonmaker, 29 How. 411, 422. CHAPTEE XXXII. EEMEDIES or THE MORTGAGEE, OTHER THAN BY PEOCFEINa A SALE OP THE MORTGAGED ESTATE. STRICT FORECLOSURE. j 1075. Comraon remedy in England. 1076. Regarded as a severe remedy. 1077. Rarely allowed in this State. 1078. Is strict foreclosure abolished by the Code ? 1079. Lands outside the State. 1080. Infants. loBi. Strict foreclosure to remedy de- fective foreclosure. 1082. Parties to action. 1083. Judgment. ACTION AT LAW ON DEBT. 1084. May be maintained. 1085. After conveyance with covenant against mortgage. 1086. Mortgaged property cannot be sold under execution for the mortgage debt. 1087. Effect of judgment at law on right to foreclose. § 1088. Effect of judgment as an estop- pel. 1089. Action on guaranty. LEAVE OF COURT TO SUE AFTER FORE- CLOSURE. 1090. Statute. 1091. Principles on which right to sue is restrained. 1092. In what cases permission to sue is necessary. 1093. Independent collateral obliga- tion. 1094. Granting permission to sue nunc pro tunc. 1095. When permission to sue at law will be denied. 1096. When foreclosure and action on debt may both be permitted. EJECTMENT. 1097. Prior to the Revised Statutes. 1098. Effect of statute. STRICT FOEEOLOSTJEB. § 1075. Common remedy in England. — The doctrine of the equity of redemption, a^ established in England, amounted to but little more than that it was not competent for parties by their con- tracts, to fix a time when an estate would be forfeited for non-pay- ment of a debt, and that the Court of Chancery would always enlarge the time for performance of the condition, so that the debtor might not be taken by surprise, or be without opportunity to protect him- self. The mortgagee was allowed the possession of the premises, being accountable for the rents, but it was not thought to be just that he should be subject to a, perpetual account, or be converted into a perpetual bailiff, but that, after a fair and reasonable time given to §§1076-1077.] REMEDIES OF THE MOETftAGEE. 697 the mortgagor to discharge the debt, he should lose his equity, or in other words, be foreclosed of his right of redemption.^ This is what is known as strict foreclosure ; it is the common remedy of a mortgagee in England,^ though a sale will be ordered there in some special cases ;' and it is believed still to be the approved method of fore- closure in some of our States.* § 1076. Regarded as a severe remedy.— A strict foreclosure has been regarded as a severe remedy, since it transfers the absolute title without any sale, no matter what the value of the premises.^ This may be a question of opinion fairly open to discussion. In populous cities, where property can generally be sold at public auction for nearly its value, the sale of a debtor's property is a simple way of determining the rights of the parties ; but in country districts, where a sale at public auction almost necessarily involves a sacrifice, there are humane considerations in favor of a remedy which leaves it to the debtor to sell his property as he thinks best, and gives him an oppor- tunity to find a customer for his equity, who will be able to discharge the incumbrance. § 1077. Rarely allowed in this State. — The practice in this State has been to sell and not to foreclose," and the provision of the Kevised Statutes, which enacted that the court shall have power to decree a sale of the mortgaged premises, was merely declaratory of the law as it stood prior to their enactment.' Strict foreclosures have rarely been pursued or allowed in this State, except in cases where a foreclosure in the common form has once been had and the premises sold, but some judgment creditor or person similarly situated, not having been made a party, has a right to redeem. As to him, a strict foreclosure has been held to be proper.' So, too, where property has been sold under a judgment of foreclosure, a strict foreclosure has been determined to be proper if there is any doubt as to the jurisdic- ' Coote on Morts. 510. * Mills v. Dennis, 3 Johns. Ch. 367. ^ Fisher on Morts. pp. i, 2. '2 R. S. 191, § 151 ; Bolles v. Duff, 43 « 15 & 16 Vict., c. 86, § 48. N. Y. 469. * Palmer v. Mead, 7 Conn. 149 ; Paris ' Bolles v. Duff, 43 N. Y. 469 ; s.c. 10 V. Hulett, 26 Vt. 308 ; Sage v. Mc- Abb. N. S. 399 ; 41 How. 355 ; Benedict Laughlin, 34 Wis. 550 ; Hitchcock v. U. v. Gilman, 4 Paige, 58; Kendall v. Tread- S. Bank of Penn., 7 Ala. 386. well, 14 How. 165 ; Blanco v. Foote, 32 ' Per Peckham, J., in Bolles v. Duff, Barb. 535 ; Ross v. Boardman, 22 Hun, 43 N. Y. 469 ; see also, opinion of Jones, 527 ; Franklyn v. Hayward, 61 How. 43; Ch., in Lansing v. Goelet, g fow. 352. Shaw v. Heisey, 48 Iowa, 468. 698 .MORTGAGES OF REAL PROPERTY. [§§1078-1081. tion of the court which ordered the sale, or as to the regularity of the proceedings.^ The preference of our courts for a sale rather than a foreclosure is illustrated by the fact that, even where the action was brought to have a deed declared to be a mortgage, the court held that a sale should be directed rather than a redemption in a limited time.° § 1078. Is strict foreclosure abolished by the Code ? — Our new Code of Civil Procedure suggests a doubt as to whether strict foreclosures are not entirely abolished in this State. By section 1626 of that statute it is enacted that " in an action to foreclose a mortgage upon real property, if the plaintiff becomes entitled to final judgment it must direct the sale of the property mortgaged, or of such part thereof as is sufficient to discharge the mortgage debt, the expenses of the sale, and the costs of the action." § 1079. Lands outside the State. — "When the parties are within the jurisdiction of the courts of this State, and process is personally served upon them here, an action may be maintained for the strict foreclosure of land situated in another State. The court cannot act upon the land directly, but acts upon the conscience of the persons here. This reUef was granted in a case where the mortgage was in form an absolute deed, and the property was situated in Illinois.' §1080. Infants. — It was the ancient and settled practice of the Court of Chancery, that no decree should be made against an infant without giving him a day in court after he came of age. In the case of a strict foreclosure of a mortgage, it was usual to allow him to show cause why the decree should not bind him, but this did not permit him to unravel the accounts or to redeem the mortgage, and he was only entitled to show error in the decree. Since there can be no question as to the power of the court to order a sale, such a proceed- ing is ordinarily preferable when an infant is concerned.' § 1081. Strict foreclosure to remedy defective foreclosure. — "Where a mortgage has been foreclosed, and the property has been sold thereunder, the purchaser stands as the assignee of the mortgage, and he also holds the rights of the owner of the equity of redemption, ' Kendall v. Treadwell, 14 How. 165. i N. Y. S. Reptr. 196 ; 2 Story Eq. Jur. ^ Smidt V. Jackson, 11 Hun, 361. §§ 1291, 1292. ^ House V. Lockwood, 40 Hun, 532 ; * Mills v. Dennis, 3 Johns. Ch. 367. §1082.] KEMEDIES OP THE MOBTGAGEE. 699 and of all other persons who have been made parties to the action.' If the holder of a subsequent incumbrance is not made a party, he will still retain the right to redeem from the mortgage, but the pur- chaser will also, as the assignee of the owner of the equity of re- demption, have the right to redeem f rora him. In such a case it will be the right of the purchaser either to redeem from the subsequent incumbrancer, or to compel the subsequent incumbrancer to redeem from him.' If the amount of the subsequent lien is ascertained and admitted, it will not, ia general, be difficult for the purchaser to determine what is his proper course ; but if its amount is unliquidated, or if it is claimed to be paid, the course of procedure wiU be more complex. It is believed that, in such a contingency, it would be proper to com- mence an action in the nature of a suit in equity for the purpose of removing such lien as a cloud upon the plaintiff's title ; or, if the lien is adjudged to be valid for any amount, to have an account taken and the amount ascertained. A sale of the premises to adjust the equities of the parties would, in all cases, be permissible,' or, if it was thought more convenient, the junior lienor might be compelled either to redeem by paying the amount due upon the original prior mortgage, exclusive of the costs of the defective foreclosure, but with the costs of the action, within a certain time, or in default thereof to stand foreclosed. The judg- ment would also provide that the plaintiff might redeem from the defendant, in respect both to the moneys paid by him and also to his own Ken, or in default thereof that the purchaser be foreclosed. This was the practice in chancery, where a first mortgagee filed a bill against the second mortgagee and the mortgagor.* § 1082. Parties to action. — An action for a strict foreclosure is in the nature of a suit in equity, and the parties are the same as would be necessary in an action for an enforcement of the mortgage by a sale, with the exception that it will not be necessary to join the mort- gagor or any other parties whose rights, by previous proceedings, had become vested in the plaintiff. ° ' Robinson v. Ryan, 25 N. Y. 320 ; ' Franklyn v. Hayward, 6i How. 43. Jackson v. Bowen, 7 Cow. 13 ; Winslow ^2 Barb. Ch. Pr. 189 ; Salmon v. Al- V. Clark, 47 N. Y. 261. len, 11 Hun, 29 ; Parker v. Child, 25 N. 'Salmon v. Allen, 11 Hun, 29; Par- J. Eq. 41. ker V. Child, 25 N. J. Eq. 41. ' Benedict v. Oilman, 4 Paige, 58. 700 MORTGAGES OF BBAL PEOPEETT. [§§ 1083-1084. § 1083. Judgment.— The judgment recovered, is that the person entitled to redeem do so within a certain specified time, or in default of such redemption, that the title vest absolutely in the plaintiix.' The time usuaUj specified iu decrees of foreclosure in chancery was six months, though the time was entirely within the discretion of the court, and in proper cases it was usual to enlarge the time, upon mo- tion and upon terms." The title does not pass to the plaintiff on a strict foreclosure, until a final order is obtained after the expiration of the time allowed to redeem. Until that order is obtained, the records of the court do not show which party has finally obtained the judgment or who is the owner of the land, and the person desiring to redeem may apply to have the time to pay the amount decreed to be due, extended.^ An action of strict foreclosure is the direct converse of an action to redeem. In the one the judgment requires that the defendant re- deem within a certain time or lose his rights, and in the other it di- rects that the plaintiff may redeem within a certain time, and that if he fails to do so he loses his rights. If the plaintiff in an action for redemption fails to redeem within the time appointed, the dismissal of his complaint as the consequence of such failure, operates as a strict foreclosure." In the case of an action for a strict foreclosure, it was a common thing to extend the time for redemption, but in actions to redeem the rule was more strict in requiring the person seeking re- demption to do so within the time appointed.' If the va,lue of the land be equal to the debt, the debt will be ex- tinguished by a strict foreclosure,' but otherwise it will be reduced to the extent of the value of the land, to be ascertained in an action at law upon the obligation of the debtor.' ACTION AT LAW ON DEBT. § 1081. May be maintained. — A mortgage is a mere security for a debt, and an action for the debt may be maintained in all respects ' See the form of complaint and judg- v. Hardy, i8 Ves. 460 ; Wood v. Surr, mentin a case in which there were many 19 Beav. 551 ; BoUes v. Duff, 43 N. Y. conflicting equities : Kendall v. Tread- 474. well, 14 How. 165 ; s. c. 5 Abb. 16. ^ Brinckerhoff v. Lansing, 4 Johns. * Ferine v. Dunn, 4 Johns. Ch. 140 ; Ch. 65 ; Ferine v. Dunn, 4 Id. 140 ; McKinstry v. Merwin, 3 Johns. Ch. 466 ; Fisher on Morts. 606. Bolles V. DuflF, 43 N. Y. 469. « Morgan v. Plumb, 9 Wend. 287. ' Bolles V. Duff, 43 N. Y. 469. ' Spencer v. Harford, 4 Wend. 381 ; * Ferine v. Dunn, 4 Johns. Ch. 140 ; De Grant v. Graham, i N. Y. Leg. Obs. Beach v. Cooke, 28 N. Y. 53s ; Hansard 75 ; Marston v. Marston, 45 Me. 412. §§1085-1086.] KBMEDIES OF THE MOETG-AGEE. 701 as if no mortgage accompanied it.' A judgment at law upon the debt without satisfaction, will not be a bar to a subsequent foreclosure of the mortgage, and it will not affect the validity of the mortgage in any way.'' A judgment on a bond secured by mortgage, upon which an exe- cution has been returned unsatisfied, will serve as a foundation for a creditor's bill against a judgment debtor to reach any property, other than that covered by the mortgage, which has been fraudulently transferred by the judgment debtor.^ § 1085. After conveyance with covenant against mortgagee. — Where a mortgagor conveyed the mortgaged estate to a third person for a full consideration and without naming the mortgage, and the owner of the mortgage purchased and took a conveyance of the land, and brought an action on the bond, it was held that he could recover without setting up the special equities. If the mortgagor urged that the mortgagee owned the estate charged with the debt, the facts could then be shown from which it would appear that the conduct of the mortgagor made it equitable that he should pay the debt personally.* § 1086. Mortgaged property cannot be sold under execution for mortgage debt. — The fact that a debt is secured by a specific lien upon a portion of the property of the debtor, can furnish no reason why a judgment upon it should not be enforceable against the remainder of his estate.' It is provided by statute, however, that the judgment debtor's equity of redemption in real estate mortgaged shall not be sold by virtue of an execution issued upon a judgment recov- ered for the mortgage debt or any part thereof," and prior to the passage of this statute it was said by Chancellor Kent, that the mort- gagor ought to proceed directly on the mortgage, or else seek other property to obtain satisfaction for his debt.' Where an execution against property is issued upon a judgment recovered for the whole or any part of the mortgage debt to the ' Allen V. Dermott, 8o Mo. 56. * Wadsworth v. Lyon, 93 N. Y. 201 ; '' Gillette v. Smith, 18 Hun, 10 ; Jen- 45 Am. R. 190. kinson v. Ewing, 17 Ind. 505 ; Jewitt v. ' Roosevelt v. Carpenter, 28 Barb. Hamlin, 68 Me. 172; Jordan v. Smith, 426; Simpson v. Simpson, 93 N. C. 30 Iowa, 499 ; Allen v. Dermott, 80 Mo. 373 ; Camp v. Coxe, i Dev. & Bat. 52. 56 ; Thornton v. Pigg, 24 Mo. 249 ; « Code of Civil Pro. § 1432 ; 2 R. S. Hale V. Rider, 59 Mass. (5 Cush.) 231. 368, § 31. ^ Palmer v. Foote, 7 Paige, 437. ' Tice v. Annin, 2 Johns. Ch. 130. 702 MOETGAGES OF EEAL PEOPEETT. [§§1087-1088. county where the mortgaged property is situated, the attorney or other person who subscribes it must indorse thereupon a direction to the sheriff not to levy it upon the mortgaged property or any part thereof. The direction must briefly describe the mortgaged prop- erty and refer to the book and page where the mortgage is recorded. If the execution is not collected out of the other property of the judgment debtor, the sheriff must return it wholly or partly unsatis- fied, as the case requires.' § 1087. Effect of judgment at law on right to foreclose. — The complaint in' an action to foreclose a mortgage upon real property must state whether any other action has been brought to recover any part of the mortgage debt, and, if so, whether any part thereof has been collected." If a judgment has been obtained in an action at law, no proceedings can be taken upon the mortgage until the remedy of the plaintiff upon the judgment is exhausted. ° If the fact of the recovery of such judgment appears upon the face of the complaint, the court cannot make a decree of foreclosure until the execution has been returned unsatisfied, even if the defendant has made default.' If the objection does not appear upon the face of the complaint and the plaintiff has falsely alleged that no proceedings at law have been had, the defendant may plead the recovery of such judgment in bar of the foreclosure suit.' An answer alleging the judgment need not allege a failure to collect upon execution, since the plaintiff cannot, by a false averment in his complaint that no judgment has been recovered for the mortgage debt, cast the burden upon the defendant of alleging and proving that the remedy at law has not been exhausted by the return of an execution unsatisfied." § 1088. Effect of judgment as an estopjpel. — ^After a judgment at law upon the bond establishing its validity, the defendant cannot in an action to foreclose the mortgage contest his liability.' The same principle would preclude a defendant in an action to foreclose, in which final judgment was rendered against him, from litigating the same questions in an action upon the debt ; but to have this effect the judgment of foreclosure must be both final and operative, and the ' Code of Civil Pro. § 1433. ' Shufelt v. Shufelt, 9 Paige, 137 ; ' Id. § 1629. Grosvenor v. Day, Clarke, 109. ' Id. § 1630. * North River Bank v. Rogers, 8 * The North River Bank v. Rogers, 8 Paige, 648; Shufelt v. Shufelt,9Paige,i37. Paige, 648, ' Hosford v. Nichols, i Paige, 220. § 1089.] EEMEDIES OF THE MORTGAGEE. 703 rule was held not to apply where the action to foreclose was discon- tinued after judgment, but before sale.' Where, in an action to foreclose, a personal judgment was de- manded, but the judgment did not contain any provision as to per- sonal liability, this was held to be an adjudication against the plain- tiff which would defeat a subsequent action for the deficiency.'' § 1089. Action on guaranty. — A guaranty of " collection " of a bond and mortgage can only be enforced after an honest effort to collect has been made and all legal remedies have been exhausted. This applies, however, only to the remedies existing at the time of the guaranty, and of which the parties to the guaranty then had notice. The creditor cannot be required to exhaust his remedy against a person who subsequently assumed the debt on a purchase of the mortgaged property ; or even against a grantee whose deed was recorded at the time of the contract of guaranty containing an agreement to assume, this fact being unlaiown to the parties to such contract.' A guaranty " from loss " to a purchaser of a bond and mortgage is limited to the amount paid by him.* A guaranty of the " payment and collection " is an undertaking to pay a deficiency after the remedy on the bond and mortgage is ex- hausted." A provision in an assignment of a bond and mortgage guaranteeing the payment " by due foreclosure and sale," is not an absolute guar- anty of payment, but is a covenant to pay any deficiency existing after foreclosure and sale. An independent action cannot be sus- tained upon it until after the sale, but a personal judgment may be obtaiiaed against the guarantor in the action to foreclose.' A guarantor of " collection " may be discharged by the laches of the creditor.' A guaranty of payment of a mortgage implies a guaranty of pay- mentof the debt which the mortgage was made to secure.' ■ An action to enforce a guaranty of payment contained in an assign- ment of a mortgage, though prosecuted to judgment, does not ' Lobe V. Willis, loo N. Y. 231. * Vanderbilt v. Schreyer, gi N. Y. 392; ^ Lockwood V. Fawcett, 17 Hun, 146. The Mahaiwe Bank v. Culver, 30 N. Y. ' Mead v. Parker, 29 Hun, 62. 313. * Griffith V. Robertson, 13 Hun, 344. 'Tiffany v. Willis, 30 Hun, 266. 'Baxter v. Smack, 17 How. 183. = Ross v. Terry, 63 N. Y. 613. 704 MOETGAGES OF EEAL PEOPERTY. [§§1090-1091. prevent a subsequent action for damages because of the fraud of the guarantor in the sale of the securities. The actions do not bar each other, because one being founded on contract, and the other in tort, they are not identical ; and each being in affirmance of the contract they are not inconsistent.' LEAVE OF COTTET TO SUB, AFTER FOBECLOSTJEE. § 1090. Statute. ^ — It is provided by the Code of Civil Procedure that " while an action to foreclose a mortgage upon real property is pending, or after final judgment for the plaintiff therein, no other action shall be commenced or maintained, to recover any part of the mortgage debt, without leave of the court in which the former action was brought.'' After the mortgagee has obtained judgment of foreclosure, he will not be allowed to sue on the debt at law until the remedy on the judgment is exhausted, and the fact that he has elected to proceed in rem against the property will be a defense to the action at law.' The lack of authority from the court to sue is not a defense which must be pleaded and proved affirmatively by the defendant. The authority to sue is at the very basis of the right to sue. There is no right of action until the court has given one ; so the permission to sue must be alleged, or at least proved, by the plaintiff before he can make out his action." § 1091. Principles on which right to sue is restrained. — As soon as the action to foreclose the mortgage is commenced, and at all times thereafter, the court in which that action is pending is vested with complete control over aU remedies for the collection of the mortgage debt. The statute gives to the mortgagee the right to join as defendants in the action to foreclose, all persons by whose several obb'gations or evidences of debt the payment of the mortgage debt is secured, and the court is empowered to adjudge as against such per- sons that they shall pay the balance of the debt remaining unsatisfied after a sale of the mortgaged premises, and to enforce such judgment as in other cases.' Having offered this complete remedy to the cred- ' Bowen v. Mandeville, 29 Hun, 42, ^ Nichols v. Smith, 42 Barb. 381. affi'd 95 N. Y. 237. * Scofield v. Doscher, 72 N. Y. 491, ' Code Civ. Pro. § 1627 ; 2 R. S. p. 191, affi'g 10 Hun, 582. § 153 ; Williamson v. Champlin, 8 Paige, ' Code of Civ. Pro. § 1627 ; 2 R. S. 70, afia'g Clarke, 9. 191, § 153. §§1092-1093.] REMEDIES OF THE MORTGAGEE. 705 itor, the legislature has taken away from him the right which he might otherwise possess, to appropriate the land by a suit in equity, while, at the same time, he pursued the several persons by whose ob- ligations the debt was secured, in actions at law. The statute does not take away entirely from the courts of law the right to entertain actions for the collection of debts secured by mortgage, but it de- prives a mortgagee of the right, either to commence or to proceed with, any such action after he has invoked the jurisdiction of a court of equity in an action to foreclose, without first obtaining special permission of the court of equity in which such foreclosure was commenced. The fact that the mortgagee has proceeded with the foreclosure, and that, having obtained all the relief he asked for in that action, and the land having all been sold, the mortgage debt still remains un- satisfied, does not authorize the mortgagee to proceed at law without the authority of the court of equity. The statute is explicit, and, at no time after the commencement of the action to foreclose, can a remedy be had in a court of law without the consent of the tribunal in which the foreclosure was instituted.' § 1092. In what cases permission to sue is necessary. — The provision of the statute is not limited to an action at law against the mortgagor only, or upon the securities originally given as collateral to the mortgage, but extends to proceedings at law to enforce the lia- bility of a purchaser of the mortgaged premises, who has assumed the mortgage debt.' A covenant of guaranty made by the mortgagee on a sale of the mortgage, that the mortgage debt will be paid when due, is within the provision of the statute, and after a judgment of foreclosure and sale has been rendered in an action to foreclose the mortgage, no ac- tion upon the guaranty can be sustained without first procuring the permission of the court to sue.' • § 1093. Independent collateral obligation. — The statute, in making it unlawful for a creditor to seek to collect his debt by an ac- tion at law after he has instituted a proceeding in equity for the same purpose, does not in any manner affect the right of a party ' Equitable Life Ins. Co. v. Stevens, 'McKernan v. Robinson, 84 N. Y. 105; 63 N. Y. 341 ; Scofield v. Doscher, 72 N. In re Collins, 17 Hun, 289 ; s. c. 6 Abb. Y. 491. N. Cas. 227 ; contra, Schaff v. O'Brien, ^ Pattison v. Powers, 4 Paige, 549. 8 Daly, 181. 45 706 MOETGAGES OP EEAL PEOPEETT. [§§1094-1095. who has been compelled to pay the mortgage debt, wholly or partially, from maintainiiig an action for his reimbursement against another who had become liable upon an independent agreement to indemnify him. So, where a person obligated to pay a mortgage, conveyed the mortgaged premises to another, who assumed the obligation and cov- enanted to pay it, and the mortgagee did not make such grantee a party to the foreclosure, but compelled the grantor to pay the defi- ciency, it was held that it was not necessary for the grantor to obtain the consent of the court in which the mortgage had been fore- closed before commencing an action against the grantee upon his covenant.' And where one of the makers of a joint and several bond died,, and two of the other makers became insolvent, and the remaining obligors were compelled to pay a deficiency in an action to foreclose to which the personal representatives of the deceased obligor were not made parties, contribution was enforced as against such personal representatives, and permission to bring the action was held not to be necessary.' § 1094. Granting permission to sue nunc pro tunc. — The per- mission of the court to sue, simply removes an obstruction against the enforcement of the obligation of the party by suit. If the action has been commenced without previous authority, the fact may be pleaded, and the plea would be in the nature of a plea in abatement of the action. If the plaintifE is defeated upon this ground, he may afterward apply to the court for leave to sue, and if granted, he may commence a new action for the same cause. If the plaintifE has com- menced his action without leave, the court may in a proper case manifest its consent to the prosecution of the action by a retroactive order, to take effect as of a time anterior to its commencement.' I 1095. When permission to sue at law will be denied. — The statute confers in general terms upon the court of equity the power to authorize proceedings at law, but it does not specially define the manner in which that power shall be exercised. Proceedings at law are forbidden unless authorized, and the presumption is that the granting or refusing of such authorization is a matter of judicial dis- ' Comstock V. Drohan, 71 N. Y. 9, 'Per Andrews, J., in McKernan v. affi'g 8 Hun, 373 ; Campbell v. Smith, Robinson, 84 N. Y. 105 ; Earle v. David, 71 N. Y. 26. 86 N. Y. 634, affi'g 20 Hun, 527. '' Weed V. Calkins, 24 Hun, 582. § 1096. J EEMEDIES OF THE MORTGAGEE. 707 cretion, based upon and controlled by the rules and principles of enlightened justice which prevail in all courts of equity. There is, therefore, no case in which, as a matter of legal right, a mortgagee can insist upon the granting of the authority necessary to enforce his legal remedy after he has commenced an action to foreclose. In each ease the court has the right, and it is its duty, to take into consider- ation the equities and circumstances of the case, and to exercise a sound discretion in granting or refusing the application." "Where the mortgage debt is secured by the personal obligation of a person who was a non-resident at the time the action to foreclose was commenced, and against whom, therefore, at that time, no valid judgment for deficiency could have been rendered," authority to sue such person for a deficiency remaining after the sale of the mort- gaged premises could not properly be refused ; but where it is evi- dent that the plaintiff could have had a perfect remedy against all persons who are liable for the payment of the debt, by a decree over against them for the deficiency, if he had chosen to make them parties to his foreclosure suit, it might not be a proper exercise of discretion for the court to permit any proceedings in an action at law.' And where the mortgagee has voluntarily refrained from asking for a judgment for the deficiency in the foreclosure suit, some satisfactory reason should be assigned for permitting him to institute a separate action for its recovery." § 1096. When foreclosure and action on debt may both be permitted. — Where the defendant in an action at law which was pending when the foreclosure was commenced, sets up a defense which cannot be tried in the action to foreclose, he not being a party to that action, because of a doubt as to whether a decree could be rendered against him in the action to foreclose, the court may allow the parties to proceed so far, at least, as shall be necessary to test the validity of the defense.^ So, too, if an action at law be begun in good faith before the commencement of the foreclosure, the court will permit the plaintiff to proceed to judgment in that action rather than allow the defendants to obtain an inequitable advantage.' But ' Equitable Life Ins. Co. v. Stevens, * Suydam v. Bartle, g Paige, 294; Will- 63 N. Y. 341. iamson v. Champlin, Clarke, 9, affi'd 8 2 Bartlett v. McNeil, 60 N. Y. 53. Paige, 70. ' Suydam v. Bartle, g Paige, 294. ' Thomas v. Brown, 9 Paige, 370. * Equitable Life Ins. Co. v. Stevens, 63 N. Y. 341- 708 MORTGAGES OF HEAL PKOPEKTT. [§§1097-1098. the fact of a deterioration in the value of the mortgaged premises by fire, against which the plaintiff might have guarded himself by insur- ance, is not a sufficient ground to allow him to work two remedies at the same time.' EJECTMENT. § 1097. Prior to the Revised Statutes, the mortgagee might, after default, obtain possession of the mortgaged premises by an ac- tion of ejectment, and hold them until his debt had been satisfied by the rents and profits, or otherwise.' The Revised Statutes provided, however, that no action of ejectment should thereafter be maintained by a mortgagee, or his assigns or representatives, for the recovery of the possession of the mortgaged premises.' This provision applies to all mortgages, whether executed before or after its passage,* and it also applies to all contracts in the nature of mortgages, or which the law declares to be such.' § 1098. Effect of statute. — The statute only takes away from the mortgagee the right to obtain possession of the mortgaged premises after default. It has not changed the rule that he may protect his possession when he has obtained it without force, by some legal mode other than by action, and the authorities are decisive that ejectment will not he against a mortgagee in possession." The mortgagor cannot try the question as to whether the mortgage has been satisfied from the rents and profits received by the mort- gagee while in possession, in an action of ejectment ; the only way to determine the comphcated equities which arise in such a case, is by an action in the nature of a suit in equity.' But if the mortgage has been paid in full by the mortgagor, and no account is required to be taken, ejectment would be a proper remedy, as it would, also, if the Hen of the mortgage had been destroyed by a tender." * Engle V. Underhill, 3 Edw. Ch. 249. Phyfe v. Riley, 15 Wend. 248 ; Watson ' Jackson v. Stafford, 2 Cow. 547 ; v. Spence, 20 Wend. 260 ; Fox v. Lipe, Jackson v. Dubois, 4 Johns. 216. 24 Wend. 164 ; Pell v. Ulmar, 18 N. Y. ' 2 R, S. 312, § 57 ; Code of Civ. Pro. 139 ; Hubbell v. Moulson, 53 N. Y. 225. § 1498. See further, and as to rights of mortgagee * Stewart •!. Hutchins, 6 Hill, 143, in possession, ante, §§ 235 to 244. affi'g 13 Wend. 485. ' Beach v. Cooke, 28 N. Y. 508. " Murray v. Walker, 31 N. Y. 399 ; Mc- » Edwards v. The Farmers' Fire Ins. & Burney v. Wellman, 42 Barb. 390. Loan Co., 21 Wend. 467 ; 26 Wend. * Van Duyne v. Thayre, 14 Wend. 233; 541. CHAPTEE XXXIII. FORECLOSXJEE BY ADVERTISEMENT. GENERAL POLICY OF THE STATUTES. § 1099. Early statutes. 1 100. Powers to sell are customary, noi. Remedy must be strictly pur- sued. 1102. The statute regulates the rem- edy. PRACTICE BEFORE SALE. 1103. When mortgage may be fore- closed by advertisement. 1 104. What mortgages may be fore- closed. 1105. Who may foreclose. iio6. Notice of sale ; how given. 1107. Notice of sale ; how served. 1 108. Duty of county clerk, nog. Publishing notice. mo. Service of notice by mail, iiii. Notice to be served only on those mentioned in statute. 1112. Personal representatives of mort- gagor. 1113. Wife of mortgagor. 1114. Junior lienors. NOTICE OF SALE. IH5. Contents of notice of sale. 1116. Purpose of sale to be set forth. 1117. Executors or administrators. 1118. Description of mortgage in no- tice. 1119. Amount claimed. 1120. The description of the mort- gaged premises. 1121. Incumbrances. 1122. Time and place of sale. SALE. 1123. Postponing the sale. 1124. Manner of conducting the sale. 1125. Rules as to sale. 11 26. Mortgagee may purchase. 1127. Sale in parcels. 1128. Terms of the sale. 1129. Sales under invalid mortgages. RESTRAINING THE SALE BY INJUNCTION. §1130. When injunction is proper. 1131. When injunction will be refused. 1132. Damages from injunction. 11 33. Lands without the State. 1 134. Appointing referee to make sale. SETTING ASIDE SALE. H35. When the sale will be set aside. 1136. Sffna Jide purchaser. 1137. An action to set aside a sale. 1 138. Receipt of surplus moneys. TITLE OF THE PURCHASER. 1139. Statute. 1 140. Who are bound. 1141. Questions of priority. 1142. Defective foreclosure. 1143. Curing defective foreclosure. EVIDENCE OF THE FORECLOSURE. 1 144. AfiBdavits. 1145. Aifidavits may be filed and re- corded. 1 146. Deed not necessary. 1147. Certifying affidavits. 1148. Effect of affidavits. 1149. Conveyance. 1150. Sufficiency of affidavits. 1151. Contradicting affidavits. COSTS. 1152. Costs allowed. 1153. Taxation. DISTRIBUTION OF SURPLUS. 1154. Prior to 1867. 1155. Distribution of surplus by Su- preme Court. 1156. Distribution of surplus by sur- rogate. 1157. Object of statutes. OBTAINING POSSESSION. 1158. By summary proceeding. 1 1 59. What may be litigated. 710 MOETGAGES OF REAL PEOPEETT. [§§1099-1100. GENERAL POLICY OF THE STATUTES. § 1099. Early statutes. — With us, in the first stages of our colo- nial government, lands were easily procured, and were not -valued more than personal property. The party holding a mortgage on real estate was accordingly permitted, under a power for such purpose, to sell without a bill of foreclosure, as he might on a mortgage of per- sonal property. The state of the courts, too, made this necessary, as the Court of Chancery, as held by the governor, was deemed a usurpa- tion, and was so managed that the extraordinary delays, and fruitless expense attending it, rendered it not only useless, but a grievance to the inhabitants, especially those who were so unfortunate as to be concerned in it. These powers accordingly took deep root, and to prevent any question as to sales under them, the act of the 19th of March, 1774, was passed ; the second section whereof recited that many real estates were held under sales made by the mortgagees, who were authorized by the mortgagor to make a conveyance of the same for the payment of the debt, and to return the overplus, and thus many inconveniences might arise if such estates should be redeemable in equity, vexatious suits promoted, and honafide purchasers ruined. And it was enacted that no good and honafide sale of lands made, or to be made, by mortgagees or others authorized by a special power, shall be defeated to the prejudice of the honafide purchaser, in favor or for the advantage of any person claiming a right of redemption in equity, with a saving to other mortgagees and to judgment creditors.' § 1100. Powers to sell are customary. — ^Yarious changes have been made in the statutory regulations concerning the execution of powers to sell, but the foreclosure of mortgages by public sales, under powers without judicial decree, has always been recognized in this State. Such a foreclosure is simple, cheap, and apparently as little liable to abuse as a judicial foreclosure, and the proceedings have, ac- cordingly, been regafded favorably by our courts." The power of sale has been deemed to affect merely the remedy of the mortgagee, and not to divest the mortgagor of any of his rights, and so customary has it become to insert a power to sell in mortgages, that it has been ' Per Chancellor Walworth, in Slee 48, 70 ; Jackson v. Henry, 10 Johns. V. Manhattan Company, i Paige, 48, 69 ; 193 ; Doolittle v. Lewis, 7 Johns. Ch. , Doolittle V. Lewis, 7 Johns. Ch. 45, 50. 45 ; Wilson v. Troup, 2 Cow. 195, ^ Slee V. Manhattan Company, i Paige, 202. §§1101-1103.] FOEECLOSUEE BY ADVEETISEMENT. 711 determined that a general power to execute a mortgage carries with it an authority to insert a power to sell upon default.' §1101. Remedy must be strictly pursued. — In the absence of fraud or some statutory regulation upon the subject, parties may con- tract for a private sale, and without notice.' The provisions of our statutes and their whole policy are, however, incompatible with the right of the parties to regulate the mode of sale under powers of this description, by their own contract. The statute adopts the power and assumes to regulate its exercise in a manner which the legislators supposed would give effect to the mortgage security, while it guards the mortgagor against oppression, and protects the rights of other in- cumbrancers. The statute was designed to include, and in terms does extend to, all sales made in virtue of powers made for that purpose, contained in mortgages, except those directed by order of some judi- cial tribunal ; and the party availing himself of the power must con- sequently conform to the requirements of the statute in order to bar the equity of redemption.' The remedy laid down by the statute must be strictly pursued, or the proceeding wiU be void.* § 1102. The statute regulates the remedy merely, and not the rights of the parties, and the statutory provision which controls, is, therefore, the one which is in force at the time when the power of sale comes to be executed.' PEACTICE BEFORE SALE. § 1103. When mortgage may be foreclosed by advertisement. — A mortgage upon real property situated within the State, contain- ing therein a power to the mortgagee, or any other person, to sell the mortgaged property, upon default being made in a condition of the mortgage, may be foreclosed in the manner prescribed in title 9, of chapter 17, of the Code of Civil Procedure, where the following req- uisites occur : 'Wilson V. Troup, 2 Cow. igj, affi'g * Cole v. Moffitt, 20 Barb. i8 ; Cohoes s. c. 7 Johns. Ch. 25. Co. v. Goss, 13 Id. 137 ; King v. Duntz, ' Elliott V. Wood, 45 N. Y. 71, 78, affi'g 11 Id. 191 ; Stanton v. Kline, 16 Id. 9 ; s. c. 53 Barb. 285 ; Montague v. Dawes, St. John v. Bumpstead, 17 Id. 100 ; Van 12 Allen, 397 ; Lawrence v. The Farmers' Slyke v. Sheldon, 9 Id. 278 ; Bloom v. Loan&Trust Co., 13 N.Y. (3 Kern.) 200. Burdick, i Hill, 130; Low v. Purdy, 2 ' Lawrence v. The Farmers' Loan & Lans. 422. Trust Co., 13 N.Y. (3 Kern.) 200,211,213. * James v. StuU, 9 Barb. 482. 712 MOKTaAGES OF EEAL PBOPBRTT. [§§ 1104r-1105. 1. Default has been made in a condition of the mortgage, whereby the power to sell has become operative. 2. An action has not been brought to recover the debt secured by the mortgage, or any part thereof ; or, if such an action has been brought, it has been discontinued, or final judgment has been ren- dered therein against the plaintiff, or an execution iseaed upon a judgment rendered therein in favor of the plaintiff, has been returned wholly or partly unsatisfied. 3. The mortgage has been recorded in the proper book for record- ing mortgages, in the county wherein the property is situated.' § 1104. What mortgages may be foreclosed. — The mortgage containing the power should be recorded in the offices of the clerks of each county where the land upon which it is a lien is situated ;" but t has been said that this provision is wholly for the benefit of the purchaser, and that the omission does not affect the validity of the sale.' The notice of foreclosure must contain a statement of the amount due thereon at the time of the first publication, and for this reason, a mortgage given as secujity for unliquidated damages cannot be fore- closed under the statute,* unless it contains, within itself, a measure by which the amount of damages may be definitely liquidated and ascertained." When the mortgage contains a covenant to insure in a specific sum, failure to insure constitutes such a default as will justify a sale under a power contained in the mortgage, even if the covenant is im- possible of execution.' Our statute has reference only to real estate, and to mortgages re- corded in this State. It does not apply to real estate situated in other States.' § 1105. Who may foreclose. — The personal representatives of the mortgagee may institute proceedings to foreclose ; a mortgage interest in this State being regarded as a mere chattel." This would ' Code of Civ. Pro. § 2387 ; 2 R. S. ' Jackson v. Turner, 7 Wend. 458 ; 54:;, §§ I, 2. Mowry v. Sanborn, 68 N. Y. 153. 'Wells V. Wells, 47 Barb. 416. « Walker v. Cockey, 38 Md. 75. 'Wilson V. Troup, 2 Cow. 195, aflS'g 'Carpenter v. Black Hawk Gold 7 Johns. Ch. 25. Mining Co., 65 N. Y. 43. * Ferguson v. Kimball, 3 Barb. Ch. ' Demarest v. Wynkoop, 3 Johns. Ch. 616, 6ig. 129, 145. § 1106.] FOEECLOSUEE BY ADVERTISEMENT. 713 include his assignee,' and his executors and administrators. If the mortgage has been assigned as security for a debt owing from the mortgagee to a third person, the assignee holds as assignee of the power of sale, and may foreclose under the statute -^ but such fore- closure will not divest the interest of the mortgagee in the debt, and if the assignee purchases the land at the sale, he will hold it subject to the right of the mortgagee to redeem, on payment of the debt to secure which the assignment was made." If two or more persons are jointly interested in a mortgage, it is the better practice for all to join in foreclosing it." Where one mortgage secures several notes held by different parties, only the holder of the mortgage can foreclose by advertisement under the power, and he will hold the proceeds as trustee for the parties in interest." A surviving executor of the mortgagee may foreclose, and since the exercise of the power is a matter of contract and not of jurisdic- tion, the power of sale contained in a mortgage of land in this State, when the mortgagee resides and dies in another State, may be exe- cuted by his executors or administrators appointed in the State of his domicile." § 1106. Notice of sale ; how given. — Section 2388 of the Code of Civil Procedure provides that the person entitled to execute the power of sale must give notice in the following manner, that the mortgage will be foreclosed by a sale of the mortgaged property, or a part thereof, at a time and place specified in the notice : 1. A copy of the notice must be pubhshed, at least once in each of the twelve weeks, immediately preceding the day of sale, in a news- paper published in the county wherein the property to be sold, or a part thereof, is situated. 2. A copy of the notice must be fastened up, at least eighty-four days before the day of sale, in a conspicuous place, at or near the entrance of the building, where the county court of each county, wherein the property to be sold is situated, is directed to be held ; or ' Cohoes Co. V. Goss, 13 Barb. 137 ; v. The Manhattan Co., i Paige, 48 ; Wilson V. Troup, 2 Cow. 195, 231 ; i E. Solberg v. Wright, 33 Minn. 224 ; Bot- S. 737. tineauv. Ins. Co., 31 Minn.- 125 ; Brown * Strother v. Law, 54 III. 413. v. Delaney, 22 Minn. 349. 'Slee v.The Manhattan Co., I Paige,48. ^Doolittle v. Lewis, 7 Johns. Ch. 45; * Wilson V. Troup, 2 Cow. 195, 231. Averill v. Taylor, 5 How. 476 ; s. c. i ^ Wilson V. Troup, 2 Cow. 195 ; Slee Code R. N. S. 213. 714 MORT&AGES OF BEAL PEOrRRTr. [§ 1107. if there are two or more such buildings in the same county, then in a like place, at or near the entrance of the building nearest to the prop- erty, or, in the city and county of New York, in a like place, at or near the entrance of the building, where the court of common pleas for the city and county is directed by law to be held/ 3. A copy of the notice must be delivered, at least eighty-four days before the day of sale, to the clerk of each county wherein the mort- gaged property, or any part thereof, is situated. 4. A copy of the notice must be served, as prescribed in the next section, upon the mortgagor, or, if he is dead, upon his executor or adniinistrator. A copy of the notice may also be served, in like man- ner, upon a subsequent grantee or mortgagee of the property, whose conveyance was recorded in the proper ofEce for recording it in the county, at the time of the first publication of the notice of sale ; upon the wife or widow of the mortgagor, and the wife or widow of each subsequent grantee, whose conveyance was so recorded, then having an inchoate or vested right of dower, or an estate in dower, subor- dinate to the lien of the mortgage, or upon any person then having a lien upon the property, subsequent to the mortgage, by virtue of a judgment or decree, duly docketed in the county clerk's office, and constituting a specific or general lien upon the property. The notice, specified in this section, must be subscribed by the per- son entitled to execute the power of sale, unless his name distinctly appears in the body of the notice, in which case it may be subscribed by his attorney or agent. § 1107. Notice of sale ; how served. — Service of notice of the sale, as prescribed in subdivision fourth of section 2388, must be made as follows -.^ 1. Upon the mortgagor, his wife, widow, executor, or adminis- trator, or a subsequent grantee of the property, whose conveyance is upon record, or his wife or widow, by delivering a copy of the notice, as prescribed in article first, of title first, of chapter fifth of this act, for delivery of a copy of a summons, in order to make personal service thereof upon the person to be served : or by leaving such a copy ad- dressed to the person to be served, at his dwelling-house, with a per- ' In the county of Erie the notice may and county hall in the city of Buffalo, be posted on the bulletin boards to be Laws of 1876, ch. 11. placed in the vestibule of the new city ^Code of Civ. Pro. § 2389. §§1108-1109. J FORECLOSTJEE BT ADVERTISEMENT. 715 son of suitable age and discretion, at least fourteen days before the day of sale. 2. Upon any other person, either in the same method, or by de- positing a copy of the notice in the post-office, properly inclosed in a post-paid wrapper, directed to the person to be served, at his place of residence, at least twenty-eight days before the day of sale. § 1108. Duty of county clerk. — A county clerk to whom a copy of a notice of sale is delivered, as prescribed in section 2388 of the Code, must forthwith affix it in a book, kept in his office for that purpose ; must make and subscribe a minute, at the bottom of the copy, of the time when he received and affixed it ; and must index the notice to the name of the mortgagor.' § 1109. Publishing notice. — The mortgagee may select the paper in which the publication is to be made, and in the absence of actual fraud resulting in damage to the mortgagor, a sale will not be set aside because the paper in which the notice was published was not well calculated to give that general information which, in such cases, should be afforded." The newspaper should be one published ' in the county where the mortgaged premises are situated ; and in the county of New York, the Daily Register has been designated by the judges of the courts of record, under an act passed for that purpose by the legislature, as the paper in which to publish all legal notices." The foreclosure will not be invalidated by a change in the name of the newspaper in which the foreclosure advertisement is published, and by the removal of the publication office to another place in the same county, if the paper otherwise retains its identity." Publication in a weekly newspaper, dated Saturday, five-sixths of the edition of which are actually published on Friday, is not a suffi- cient first publication of notice of foreclosure of a mortgage falling due on such Friday." If the land is situated in more than one county, the publication may be made in a newspaper printed in either.' ' Code of Civ. Pro. § 2390. requirement under the Revised Statutes, ^ Wake V. Hart, 12 How. 444. and prior to the Code of Civil Procedure. * Under a statute requiring publication 2 R. S. 545, § 3. in a newspaper "printed " in the county, * Laws of 1874, c. 656. it is not sufficient to show that the news- ' Perkins v. Keller, 43 Mich. 53. paper was "published" in the county. ' Pratt v. Tinkcom, 21 Minn. 142. Bragdon v. Hatch, 77 Me. 433 ; Blake ' Wells v. Wells, 47 Barb. 416. v. Dennett, 49 Me. 102. This was the 716 MOBTGAGES OJF EEAL PEOPEETY. [§§1110-1111. Publication in one of several editions of the same paper issued on the same day is sufficient.' The first publication of the notice must be eighty-four days prior to the day of sale specified in the notice ; but the twelve publications may be made in less than eighty-four days, provided the publication be made once in each week for twelve weeks." The pubhcation must be according to the law in force at the time when it is made, notwithstanding the mortgage was executed prior to the passage of such law.' § 1110. Service of notice by mail. — If the service of the notice is made by mail, the statute requires that it should be addressed to the residence of the party intended to be served. No provision is made for defective information, and if the notice be wrongly ad- dressed, the mistake will be fatal.* If the person served is notified as being an executor or adminis- trator, it is sufficient if the notice be sent by mail addressed to the proper person, though the word executor or administrator be not added.^ The method of service by mail may be adopted, even though the persons to whom the notices are sent reside in the same place with the party foreclosing and his attorney ;° and, on the other hand, the notice to the mortgagor may be mailed anywhere within the State.' § 1111. Notice to be served only on those mentioned in stat- ute. — A suit in equity is a proceeding of different character from a sale under a power. It is a judicial proceeding, directly against the parties, to obtain a decree against them, barring their respective rights and equities in the premises ; and, of course, no one but par- ties, or those claiming under them, can be affected by the decree. But so long as the law permits equities of redemption to be barred under powers, the sale under a power which conforms to the statute should be deemed to cut off all rights and interests which are subject to the power, except so far as the effect of the sale is restricted by the statute." The persons who are to be served with notice of sale are, ' Guest V. City of Brooklyn, g Hun, Mo wry v. Sanborn, 7 Hun, 380, rev'd 58 198. N. Y. 153. ^ Howard v. Hatch, 29 Barb. 297 ; ' George v. Arthur, 2 Hun, 406. George v. Arthur, 2 Hun, 406 ; Gantz v. * Stafiton v. Kline, 11 N. Y. (i Kern.) Toles, 40 Mich. 725. ig6. ' Atkinson v. Duffey, 16 Minn. 45. ' Bunce v. Reed, 16 Barb. 347. * Robinson v. Ryan, 25 N. Y. 320 ; » Per Rapallo, J., in Brackett v. §§ 1112-1114.J FOEECLOSURE BY ADTERTISEMENT . 717 therefore, those whom the statute directs to be served, and none other. I § 1112. Personal representatives of mortgagor. — E^otice must be served upon "the mortgagor or his personal representatives"; that is to say, upon the mortgagor or his executors or administrators, and not upon his heirs or devisees. Neither the heir nor those who represent him are proper parties to the proceeding, as no provision is made for service upon them, or for any notice to them. "Where the mortgagor is dead, and there are no personal represent- atives, it has been held that the foreclosure may be good without the service of notice upon any one.' But this has been disputed and denied, and the better opinion seems to be that until an administrator has been appointed no valid foreclosure by advertisement can be made.^ § 1113. Wife of mortgagor. — If the wife of the owner of the equity joins in the mortgage she would be a mortgagor, and as such entitled to notice." If the mortgage be given for purchase money, or if it be made by the husband before marriage, notice is still re- quired to be served upon the wife.* Though the wife does not derive title from her husbaud, yet she claims under him within the intent of the statute, and a sale under a power regularly conducted will be a bar to her claim to dower. ° The wife of a grantee of the mortgaged premises is a " subsequent grantee " within the statute claiming under the mortgagor by virtue of a title subject to the mortgage," and if not served with notice of the sale, her right of dower will not be foreclosed.' § 1114. Junior lienors. — The assignee of a junior mortgage, whose assignment is recorded, is entitled to notice.' And if the mortgagee who is making the sale has knowledge of an unrecorded assignment of a junior mortgage, he is bound, as a matter of honesty Baum, 50 N. Y 8. See contra, Hornby ' King v. Duntz, 11 Barb. 191. V. Cramer, 12 How. 490. The question ^Code of Civ. Pro. § 2388. wh'icii is raised in this case upon the ' Brackett v. Baum, 50 N- Y. 8. wording of the statute is interesting. ' Raynor v. Raynor, 21 Hun, 36 ; ' Anderson v. Austin, 34 Barb. 319 ; Northrup v. Wheeler, 43 How. 122. Low V. Purdy, 2 Lans. 422. ' Winslow v. McCall, 32 Barb. 241 ; "^ Mackenzie v. Alster, 64 H.ow. 388 ; Wetmorev. Roberts, 10 How. 51 ; Deck- 12 Abb. N. C. no ; Van Schaack v. er v. Boice, 19 Hun, 152. Saunders, 32 Hun, 515. 718 MOETGAGES OF REAL PBOPEETT. [§§1115-1116. and fair dealing, to give notice to such assignee, and if lie fails to do so, his sale may be set aside as fraudulent.' The statute makes a curious distinction between persons who hold under conveyances or mortgages from the mortgagor and the judg- ment creditors of the mortgagor. Those grantees and mortgagees whose conveyances and mortgages shall be on record at the time of the first publication of the notice, and those only, are entitled to ■ service of the notice upon them, either personally or at their dwell- ings, or by mail.'' But all judgment creditors whose liens were ac- quired subsequent to the mortgage, are entitled to such notice. The lien of a judgment, therefore, perfected after the first publication of notice and before sale, is not cut off, nor is the right of redemption of the judgment creditor barred unless notice is served upon him as prescribed by the statute.' The lien of a person entitled to notice and not receiving it, is not destroyed, and this seems to be so even though he knew of the sale." NOTICE OF SALE. § 1115. Contents of notice of sale.— Section 2391 of the Code of Civil Procedure provides that " the notice of sale must specify : " 1. The names of the mortgagor, of the mortgagee, and of each assignee of the mortgage. "" 2. The date of the mortgage, and the time when, and the place where, it is recorded. " 3. The sum claimed to be due upon the mortgage, at the time of the first publication of the notice ; and, if any sum secured by the mortgage is not then due, the amount to become due thereupon. " 4. A description of the mortgaged property, conforming substan- tially to that contained in the mortgage." ' § 1116. Purpose of sale to be set forth. — The statute says that " notice that such mortgage will be foreclosed by a sale of the mortgaged premises, or some part thereof, shall be given," etc." The notice should therefore show, upon its face that the sale which is ' Soule V. Ludlow, 3 Hun, 503 ; s. c. < Root v. Wheeler, 12 Abb. 294 ; Wet- 6 T. & C. 24. more v. Roberts, 10 How. 51. ^ Code of Civ. Pro. § 2388. ^j r. 3. 546, § 4 ; 3 R. S. (6th ed.) ' Groff V. Morehouse, 51 N. Y. 847, § 4. 503. « 2 R. S. 546, § 3 ; Code of Civ. Pro. § 2388. §§1117-1118.] FOEECLOSTJEE BT ADVERTISEMEKT. 719 spoken of is for tlie purpose of foreclosure, or, what would be equiv- alent, that the sale is to be by virtue of a power of sale contained in the mortgage. Most persons would readily enough conjecture the purpose of the notice, though not distinctly stated ; but titles to land should not be left to depend upon vague inferences.' § 1117. Executors or administrators are not assignees within the meaning of the statute, and it is not necessary that the derivation of the executors' power to foreclose should appear in the notice. It is eilough that they should subscribe the, notice as "executors of the last will and testament of the mortgagee, deceased." The addi- tion of these words is not only descriptio personm, but is descriptive o;f the character in which they act." § 1118. Description of mortgage in notice. — The statement of the date of the mortgage and where it was recorded must be suffi- ciently accurate to accomplish the purpose of the statute, and if there be a positive error, the question will be whether it is one calculated to mislead. If the date of the mortgage, the date of record, and the clerk's office be all correctly given, an error in the volume or page will not necessarily be fatal. The act does not require the volume and page to be stated.' The notice must specify the names of the mortgagor and mortgagee, " and of each assignee of the mortgage." ' Under a similar statute, where a mortgage had been assigned as collateral security for a debt, and such debt had been paid before notice of sale, it was held that such assignee, having no longer any interest, it was not necessary to specify him.' Omitting to state the name of the mortgagee in the notice has been held not to constitute a fatal defect, where there is an accurate reference to the record of the mortgage in the clerk's office.' But a mistake in substituting the word mortgagee instead of mortgagor is material, because liable to mislead.' A single notice cannot be made to cover two mortgages, especially if the descriptions of property are not identical." ' Judd V. O'Brien, 2i N. Y. i86, 190; » -vphite v. McClellan, 62 Md. 347. Leet V. McMaster, 5 1 Barb. 236. * Candee v. Burke, 4 T. & C. 143 ; ^ The People v. Prescott, 3 Hun, 419. c. i Hun, 546. 8 Judd V. O'Brien, 21 N. Y. 186, 188. 'Abbott v. Banfield, 43 N. H. 152. * Code of Civ. Pro. § 2391. ' Morse v. Byam, 55 Mich. 594. 720 MORTGAGES OF EEAL PKOPEETT. [§§1119-1121. § 1119. Amount claimed. — The statute does not require that the amount claimed to be due at the time of the first publication of the notice should be set down in dollars and cents, though that is doubt- less the readiest manner of complying with its direction ; and a state- ment that a particular amount was claimed to be due at a certain prior day, and that the mortgagee claimed that sum with interest from that time, would probably be sufficient.' Indeed, if more be claimed by the mortgagee than is really due, under an honest mistake, the sale will still be valid." If only a part of the debt secured by the mortgage is due at the time of the first publication of the notice, the notice of sale should state the sum claimed to be due and also the amount to become due.' The sale, though for an instalment only, will pass the entire title of the mortgaged property,* and will exhaust the lien of the mortgage," and the mortgagee may retain out of the proceeds of the sale the amount due and to become due.' § 1120. The description of the mortgaged premises contained in the notice of sale, must conform substantially to that contained in the mortgage, or the sale will be void.' § 1121. Incumbrances. — The statute does not require any refer- ence in the notice of sale to incumbrances. The insertion, therefore, in the notice of matters not required, does not render the notice de- fective, as to the matters stated in it that the statute requires to be stated. If matters, not called for by the statute, are stated, which are calculated to mislead the public, and thereby prevent persons from bidding, the sale would be void ; but if the statement inserted in the notice, although calculated to mislead, is inserted by mistake merely, and is corrected before it could be presumed to influence persons desiring to bid, the mistake wiU not vitiate the proceedings." ' Judd V. O'Brien, 21 N. Y. 186, i8g. ^ Fowler v. Johnson, 26 Minn. 338 ; ^ Klockv. Cronkhite,! Hill, 108; Jencks Minor v. Hill, Adm'r, 58 Ind. 176; 26 V. Alexander, 11 Paige, 619; Mowry v. Am. R. 71. But see Hill v. Minor, 79 Sanborn, 62 Barb. 223 ; White v. Mc- Ind. 48. Clellan, 62 Md. 347. « Code of Civ. Pro. § 2404. ' Code of Civ. Pro. § 2391. See rule ' Rathbone v. Clark, 9 Abb. 68, n. under earlier statute. Jencks v. Alexan- ' Per Mullin, J., in Hubbell v. Sibley, der, II Paige, 6ig, 626. 5 Lans. 51 ; Klock v. Cronkhite, i Hill, * Poweshiek Co. v. Dennison, 36 Iowa, 107 ; Jencks v. Alexander, 11 Paige, 619; 244 ; 14 Am. R. 524. Burnet v. Denniston, 5 Johns. Ch. 35, 42. §§ 1122-1124. j rOEECLOSUEE BY ADVEETISEMENT. 721 § 1132. Time and place of sale. — The notice should specify a definite time and place when and where the sale wiU be made, in such a way that purchasers would not be likely to be deceived ;' but if there be by common usage, an established place for such sales, as in the rotunda of the city hall, a notice that the sale would be made in the city haU would be sufficient." SALE. § 1123. Postponing the sale.— Section 2392 of the Code of Civil Procedure provides that the sale may be postponed from time to time. In that case a notice of the postponement must be published, as soon as practicable thereafter, in the newspaper in which the original notice was published ; and the pubhcation of the original notice, and of each notice of postponement, must be continued at least once in each Week until the time to which the sale is finally postponed. There is no direction providing for personal notice to any person ; the ordinary practice is to attend at the time and place appointed for the sale, and to give public notice to such persons as may be in at- tendance, and this should be done when practicable, since a departure from the custom might be treated as evidence of bad faith. If it be announced, it should be announced correctly, as a variance between the adjournment as announced and the adjoumnient as published, will be fatal to the validity of the sale.' "Where the sale was .originally noticed for Sunday, an adjournment to a later day, with personal notice to parties interested, was held to be sufficient.* § 1124. Manner of conducting the sale. — The sale must be at public auction, in the daytime, on a day other than Sunday or a public holiday, in the county in which the mortgaged property, or a part thereof, is situated; except that, where the mortgage is to the people of the State, the sale may be made at the capitol, and if the property consists of two or more distinct farms, tracts^ or lots, they must be sold separately, and as many only of the distinct farms, tracts, or lots shall be sold as it is necessary to sell in order to satisfy the amount due at the time of the sale, and the costs and expenses allowed by law. But where two or more buildings are situated upon the ' Burnet V. Denniston, 5 Johns. Ch. 35, ' Miller v. Hull, 4 Den. 104. 42. * Westgate v. Handlin, 7 How. 372 ; ^ Hornby v. Cramer, 12 How. 490. Sayles v. Smith, 12 Wend. 57. 46 722 MORTGAGES OF EEAL PEOPEETT. [§§1125-1127. same city lot, and access to one is obtained through the other, they must be sold together.^ § 1125. Rules as to sale. — The sale must be made by the mort- gagee, in a fair and just manner and in good faith, the mortgagee being regarded and treated as a trustee executing a power in trust." Substantially the same rules prevail as control a sale under the direc- tion of a referee in a foreclosure by action.' The sale must be by auction, and it must be public. It has been said, that where only the mortgagee and his attorney are present, the one bidding off the property to the other, this cannot be said to be a " public sale ";* but when it is shown that all the world was invited to be present, and there is no deceit used or mistake occasioned, the absence of competition would not, of itself, be fatal.* '*' A sale advertised for eleven o'clock is duly made at any time be- tween eleven and twelve." The fact that the person selling the property as auctioneer was not licensed as such, will not affect the title of the purchaser.' § 1126. Mortgagee may purchase. — The mortgagee or his as- signee, or the legal representative of either, may, fairly and in good faith, purchase the mortgaged property, or any part thereof, at the sale.' The mortgagee does not stand in a confidential relation to the mortgagor, which renders him incompetent to purchase. The rela- tion between mortgagor and mortgagee in sUteh case, is not strictly that of trustee and cestui que trust, but is, at most, only that of principal and agent ; and although the purchase by an agent, of the property of his principal, must be scrutinized closely, yet it is not void, but is only voidable where there has been undue influence, and advantage or imposition upon the principal. The statute allows the mortgagee to purchase, but he would have the right to do so, inde- pendent of the statute.' § 1127. Sale in parcels. — The direction of the statute is per- emptory that, if the property consists of two or more distinct farms. ' Code of Civ. Pro. § 2393. •* Campbell v. Swan, 48 Barb. 109. "Jencks v. Alexander, 11 Paige, 624 ; 'Learned v. Geer, 139 Mass. 31. Ellsworth V. Lockwpod, 42 N. Y. 89; * McGovem v. Life Ins. Co. ,109111.151. Soule V. Ludlow, 3 Hun, 503 ; s. c. 6 N. ' Learned v. Geer, 139 Mass. 31. Y. Sup. (T. & C.) 24. » Code of Civ. Pro. § 2394. ' Soule V. Ludlow, 3 Hun, 503 ; s. c. 6 ' Elliott v. Wood, 53 Barb. 285 ; s. c. N. Y. Sup. (T. & C.) 24. affi'd 45 N. Y. 71. § 1127.] POEEOLOSTTEE BY ADVEETISEMENT. 723 tracts, or lots, they must be sold separately ; and the only exception to this rule is where two or more buildings are situated upon the same city lot, and access to one is obtained through the other.' This is a general rule for judicial sales : if the land be in separate parcels, marked for distinct and separate use, they should be sold separately." But this rule is founded on the presumption that such a mode of sale will produce the largest amount of money, and it will not apply where the whole together will produce more than the aggregate of the respective parcels. Except for the present statute, if two or more parcels of land, which have previously been held and used together, be included in one mortgage, they may be sold to- gether, unless some good reason is shown for adopting a different method of sale." In making the sale in cases where the security is suflBcient, it is the duty of the mortgagee to consult the wishes of those interested in the surplus ; and he has no right to sell the whole of the mort- gaged premises together, when a person claiming an interest in the property subsequent to the mortgage, offers to bid enough to satisfy the mortgage and costs, for a portion of it, and requests that portion to be first sold.* A mortgagee is not obliged to sell in parcels without request, where the division into parcels was made after the execution of the mort- gage.' In selling under a power, the rules which govern in equitable actions should be followed. These are f ul^y set forth in another part of this work." The mortgagee may not only sell in separate parcels, but he may also reserve certain rights for the benefit of the owner of the equity of redemption — as, for instance, he may sell the land and reserve a growing crop, the land being suflBcient to pay his debt.' If the mortgage be payable in instalments, and it is proper to sell the whole of the mortgaged premises together, the mortgagee is en- titled to retain the whole amount of his debt, whether due or not, out of the proceeds. The statute does not contemplate a sale subject to future instalments." > Code of Civ. Pro. § 2393. ' Sherman v. Willett, 42 N. Y. 146. = Wells V. Wells, 47 Barb. 416. ' Code of Civ. Pro. § 2404 ; Cox v. ' Anderson v. Austin, 34 Barb. 319. Wheeler, 7 Paige, 248 ; Grosvenor v. * Ellsworth V. Lockwood, 42 N. Y. 89. Day, Clarke, 109 ; Jencks v.- Alexander, " Id., 9 Hun, 548. n Paige, 619 ; Bunce v. Reed, 16 Barb. « See ante, § 943 et seq. 347 ; Barber v. Cary, 11 Id. 549. 724 MOETGAGES OF EEAL PROPEETT. [§§1138-1129. § 1128. Terms of the sale. — The statute does not require that the terms upon which the sale is to be made should be contained in the pubhshed notice. The practice is to conform the terms of sale to those used in sales in equitable actions by framing written condi- tions upon which the purchaser is to pay for and receive his title, thus fixing the rights of the parties and avoiding any question as to the statute of frauds. Tliis practice has been conimended by the Court of Appeals.' Where there is a prior lien on the property, it is competeut for the mortgagee to make the sale subject to such prior lien, or, if it is due, to require the purchaser to pay and discharge it out of his purchase money.' The fact that a usual and reasonable deposit is required on the day of sale will not render the sale void, notwithstanding the advertise- ment did not state the terms of sale, or that they would be stated at the sale.' A sale for cash is satisfied by the giving of a check which would be paid if presented ;' and if the mortgagee consents that the purchaser shall pay by discharging a debt due from him to such purchaser, this is a matter in which the mortgagor is in no way concerned.' It is in the power of the mortgagee to allow to the purchaser a credit or postponed period of payment, as to the whole of the money which he is entitled to receive, or any portion of it ; and where he chooses to do so, he may determine for himself what security he will exact for the eventual payment of the money. The rights of the mortgagor would not be impaired, but would generally be promoted by such a concession on the part of the mortgagee.' § 1129. Sales under invalid mortgages. — The power of sale is extinguished by payment, and the lien of the mortgage is discharged by a tender of the amount due upon it, and therefore a mortgage which has been paid,' or the amount of the debt secured by which has been tendered," cannot be foreclosed by sale under the power, and no title wiU pass to the purchaser. On the same principle, when 1 < 'Story V. Hamilton, 86 N. Y. 428, '^ Cooper v. Hornsby, 71 Ala. 62; Tartt 432. V. Clayton, 109 111. 579. « Story V. Hamilton, 86 N. Y. 428, " Cox v. Wheeler, 7 Paige, 248, 251; affi'g 20 Hun, 133. Whitfield v. Riddle, 78 Ala. 99. ' Pope V. Burrage, 115 Mass. 282. ' Cameron v. Irwin, 5 Hill, 272, 276 ; * McConneaughey v. Bogardus, 106 Jackson v. Crafts, 18 Johns, no. III. 321. ' Burnet V. Denniston, 5 Johns. Ch. 35. § 1130.J FORECLOSURE BY ADVERTISEMENT. 725 enough lias been sold to pay the debt, the power is exhausted and the remainder cannot be sold.' It has even been said that the foreclosure by sale under a power in a mortgage which has been satisfied, con- Teys no title, even to a hona fide purchaser ;' biit the better opinion seems to be that, if the mortgage be undischarged upon the record, and if the proceedings be regular, a hona fide purchaser, having no notice of any fraud or defense, will be protected.' Even if part of the property sold has been released by an instru- ment not recorded, a hona fide purchaser will take title to the whole, notwithstanding the release." So far as a purchaser in good faith is concerned, the title is equiv- alent to that acquired under a sale pursuant to a judgment in an ac- tion to foreclose the mortgage," and all questions determinable by the court in such an action are settled by the sale on the one condition that all of the formalities prescribed by the statute are observed." A power of sale contained in a usurious mortgage is void, and a purchaser under it having actual notice of the usury acquires no title ;' but the sale could not be defeated to the prejudice of a hona fide purchaser.' If there is any defense to the mortgage, or if there is any reason why the sale should not take place under it, the mortgagor may al- ways protect himself, either by commencing an action to restrain the sale, or by attending the sale and there giving notice of the facts.' EESTEAmiNG THE SALE BY mjUNCTION. § 1130. When injunction is proper. — ^If there is any reason why it is inequitable that the mortgagee should proceed to a sale under the power, the mortgagor or other person interested in stopping the sale may do so by commencing an action and procuring an injunction. If the mortgagee claims a larger amount in his notice than is actually ' Charter v. Stevens, 3 Den. 33. * Palmer v. Bates, 22 Minn. 532. ' Cameron v. Irwin, 5 Hill, 272 ; Wood ' Code of Civ. Pro. § 2395 ; Slee v. V. Colvin, 2 Hill, 566 ; Jackson v. Morse, Manhattan Co., i Paige, 48, 6g ; Doo- 18 Johns. 441 ; Redmond V. Packenham, little v. Lewis, 7 Johns. Ch. 45, 50; 66 111. 434 ; Lycoming Ins. Co. v. Jack- Decker v. Boice, 19 Hun, 152, affi'd 83 son, 83 111. 307 ; Temple v. Whittier, N. Y. 215. (111.) 34 Alb. L. J. 156. « Warner v. Blakeman, supra. ' Warner v. Blakeman, 36 Barb. 501 ; ' Hyland v. Stafford, 10 Barb. 558 ; s. c. affi'd 4 Keyes, 487 ; s. c. 4 Abb. Jackson v. Dominick, 14 Johns. 435. Ct. of App. Dec. 530 ; Elliott v. Wood, 53 ° Jackson v. Henry, 10 Johns. 185. Barb. 28J ; Brown v. Cherry, 38 How. ' Hyland v. Stafford, 10 Barb. 558 ; 352 ; s. c. 56 Barb. 635. Burnet v. Denniston, 5 Johns. Ch. 35, 41. 726 MOETGAGES OP EEAL PROPERTY. [§ 1131. due, it has been said that this is a ground for enjoining the sale ;' but the sale ■will not be enjoined unless the mortgagor or person bringing the action offers to pay the amount really due, since he would have a perfect remedy at law to compel the mortgagee to ac- count for the proceeds of the sale, if it is necessary to have one.' "When the mortgage is attempted to be foreclosed after the owner of a junior hen has offered to pay the amount due, the mortgagee may be restrained by injunction from assigning his mortgage, or from selling under it until the hearing of the case on a complaint to redeem.' Injunctions have in some cases been granted to delay sales under powers until the amount due under the mortgage has been judicially determined;' but the differences between the parties must relate to the transaction out of which the mortgage debt arose, and the mort- gagee will not be delayed in his sale until alleged offsets arising ©ut of other transactions are adjusted." The mortgagor may bring an action to restrain the sale and to set aside the mortgage as usurious and void." So, also, in an action to set aside as void a mortgage made in the name of a corporation, to the directors, an injunction restraining a sale under it may be granted.' § 1131. When injunction will be refused. — The right of the* mortgagee to his summary remedy by a sale under the power of sale contained in the mortgage is secured to him by his contract, and will not be lightly disturbed by the courts. If the mortgage is vahd and is due, and the mortgagee is proceeding to a sale according to the forms prescribed by law and without fraud, the motives which impel him to the enforcement of his security will not be inquired into.' The holder of a mortgage has a right to make his own election as to the mode in which he will enforce it, and he cannot be restrained from proceeding in his own way merely because a subsequent incum- ' Cole V. Savage, Clarke, 361. ' Frieze v. Chapin, 2 R. I. 429 ; ' Vechte v. Brownell, 8 Paige, 212. Knight v. Drane, 77 Ala. 371. ' Rhodes v. Buckland, 16 Beav. " Cole v. Savage, Clarke, 482 ; Hyland 212. V. Stafford, 10 Barb. 558 ; Burnet v. * Gooch V. Vaughan, 92 N. C. 610 ; Denniston, 5 Johns. Ch. 35, 41. Purnell v. Vaughan, 77 N. C. 268 ; Cape- ' Southampton Boat Co. v. Muntz, 12 hart V. Biggs, 77 N. C. 261 ; Kornegay W. R. 330. V. Spicer, 76 N. C. 95. "Jones v. Matthie, 11 Jur. 504; White- worth V. Rhodes 20 L. R. N. S. 105. §§1132-1133.] FOKECLOSUEE BY ADVERTISEMENT. 727 brancer prefers a different remedy, or even offers to collect his mort- gage for him. He cannot be restrained by injunction unless there is some good legal reason for interference. It is not a reason for inter- fering that the time advertised for the sale is at a season of the year when the property may not sell to the best advantage, or that the sale take place at a time inconvenient to junior incumbrancers. The mortgagee has a right to fix his own time, and to have as early a da}' as the statute allows.' When the amount due on the mortgage has been once judicially determined, further delay in the sale will not be granted to enable an appeal to be had, if the rights of the parties can be otherwise f uUy protected, as, for instance, if the money received from the sale is to be in the hands of an officer of the court.'' The proceedings of a mortgagee under a power to sell, will not be suspended or delayed while the several owners of the equity of re- demption shall settle among themselves the proportion which each is to contribute toward the payment of the mortgage debt ; but if a sufficient sum is paid into court to secure the mortgagee against loss, a reasonable time may be allowed to them.° § 1132. Damages from injunction. — If the mortgagee be wrong- fully enjoined, he is entitled as a part of his damages sustained by the ' injunction, where the sale does not yield payment of his debt, to the value of the emblements removed by the mortgagor while the sale was suspended, and also to necessary counsel fees and taxable costs incurred in consequence of the injunction, and interest on the whole sum the collection of which was suspended.* § 1133. Lands without the State. — The summary mode of fore- closing mortgages of property within this State, and selling the same, as regulated by our statute, has no extraterritorial application or ref- erence to lands without the State, and a court of equity of this State has no authority to enjoin a mortgagee of lands situate without the State, from selling the mortgaged lands at public sale within this State, according to the terms of the mortgage security, upon the mere allegation that such power is void, when no statute of the State or territory where the lands are situated, nor any other invalidity in the ' Bedell v. McClellan, ii How. 163. ' Brinckerhoff v. Lansing, 4 Johns. Ch. 'Outtrin v. Graves, i Barb. Ch. 49. 65. * Aldrich v. Reynolds, i Barb. Ch. 613. 728 MORTGAGES 0¥ REAL PROPERTY. [§§1134-1137. power IB stated or made apparent.' A sale in this State of property in Colorado will not be restrained if authorized by a power contained in the mortgage, such sale not being in violation of any law of Colorado.' § 1134. Appointing referee to make sale. — If it appears Kkely ..Jo the coTirt that the mortgagee will exercise his power to sell in a harsh, oppressive, or improper manner, a referee may be associated with him, to the end that the sale shall be fairly conducted, and that no more of the premises shall be sold than shall be sufficient to satisfy the debt,' or the court may restrain a sale for a limited time, so as to give the mortgagor an opportunity to pay." SETTING ASIDE SALE. § 1135. When the sale will be set aside. — ^Belief will be given by action, to set aside foreclosure proceedings by advertisement, when- ever, by any fraud, mistake, deceit, or unfair contrivance, or practice, or bad faith, in conducting the proceedings of foreclosure or sale, the rights of the mortgagor or of subsequent incumbrancers have been injuriously affected, upon pretty much the same grounds which the court would recognize as sufficient for opening the sale if the fore- closure had been by action." § 1136. Bona fide purchasers. — Any person whose rights are affected by the foreclosure may commence an action to set it aside, but subsequent lona fide purchasers wDl be protected by the court." In order to be entitled to claim such protection, the purchaser must show that he made his purchase in good faith, and paid the con- sideration before notice of defects in the title or irregularities in the § 1137. An action to set aside a sale under a power as irregular or fraudulent can be maintained without redeeming, or offering to " Per Robinson, J,, in The Central C.) 24 ; s. c. 3 Hun, 503 ; Leet v. Mc- Gold Mining Co. v. Piatt, 3 Daly, 263 ; Master, 51 Barb. 236 ; Hubbell v. Sib- Elliott V. Wood, 45 N. Y. 71. ley, 5 Lans. 51 ; Clevinger v. Ross, 109 ^ Carpenter v. Black Hawk Gold 111. 349. See antt, §§ 966 to 987. Mining Co., 65 N. Y. 43. 'Warner v. Blakeman, 36 Barb. 501 ; ' Van Bergen v. IDemarest, 4 Johns, s.. c. afE'd 4 Keyes, 487. Ch. 37. ' Grover v. Hall, 107 111. 638 ; Brown * Manning v. Elliott, 92 N. C. 48. v. Welsh, 18 111. 343 ; Redden v. Miller, »Soule V. Ludlow, 6N. Y. Sup. (T. & 95 111. 345. §1138.] FOEECLOSURB BY ADVERTISEMENT. 729 redeem, from the mortgage lien, since even an insolvent debtor has at least a right to have his property sold away from him according to law and with common honesty.' Inadequacy of price is not, of itself, sufficient to invalidate a sale pursuant to a power,' unless it is so gross as to amount to evidence of fraud upon the debtor's rights.' A junior lienor having other and primary security for his debt will be required to proceed against such other security before attacking a sale which conforms to the statute, on the ground of special deception practiced against him.* Application to set aside the sale upon grounds of discretion should be made promptly, and laches will be a reason for denying relief. ° The purchaser at the foreclosure sale is a necessary party to an ac- tion to have the sale declared void, as also are all persons claiming rights under him.° If a sale be set aside as illegal and fraudulent, the lien of the mort- gage will remain unimpaired .by the foreclosure proceedings,' and the purchaser at the sale will then hold the rights of the mortgagee, and will stand as assignee of the mortgage.' § 1138. Receipt of surplus money. — In analogy to the rule that the receipt of the surplus moneys, arising from a sale of land on exe- cution, does not preclude the owners from questioning the validity of the sale, as they have done nothing to encourage the purchasers to bid,' the receipt of surplus money by the mortgagor may not estop him ;'° but it would seem to be evidence to be considered on passing on the question of the regularity of the proceedings. If the owner retains the surplus money, no court would set aside the foreclosure without requiring him to refund what he had received." ' Clevinger v. Ross, log 111. 349. , ' Stackpole v. Robbins, 47 Barb. 212 ; ^ Laclede Bank v. Keeler, 109 111. 385 ; Lash v. McCormick, 17 Minn. 403. Cleaver v. Green, 107 111. 67 ; Weld v. ^ Robinson v. Ryan, 25 N. Y. 320 ; Rees, 48 111. 434. See ante, §§ 973, 974. Jackson v. Bowen, 7 Cow. 13 ; Vroom * Magnusson v. Williams, iii 111. 450. v.' Ditmas, 4 Paige, 526. * Soule V. Ludlow, 3 Hun, 563 ; s. c. ° Wood v. Jackson, 8 Wend. 10, 31. 6 T. & C. 24. '° But see contra, Sloan v. Frothing- * Depew V. Dewey, 46 How. 441. ham, 72 Ala. 589 ; Merritt v. Home, 5 6 Candee v. Burkq, 4 N. Y. Sup. (T. & Ohio St. 307. C.) 143 ; s. p. I Hun, 546. " Candee v. Burke, i Hun, 546 ; s. c. 4 N. Y. Sup. (T. & C.) 143. 730 MORTGAGES OF REAL PBOPBETY. [§§1139-1141. TITLE OF THE PTJECHASEE. § 1139. Statute.— Section 2395 of the Code of Civil Procedure provides that a sale, made and cjonducted as prescribed in the title relating to foreclosures by advertisement, to a purchaser in good faith, is equivalent to a sale, pursuant to judgment in an action to foreclose the mortgage, so far only as to be an entire bar of all claim or equity of redemption, upon, or with respect to, the property sold, of each of the following persons : 1. The niortgagor, his heir, devisee, executor, or administrator. 2. Each person, claiming under any of them, by virtue of a title, or of a lien by judgment or decree, subsequent to the mortgage, upon whom the notice of sale was served, as prescribed in this title. 3. Each person so claiming, whose assignment, mortgage, or other conveyance was not duly recorded in the proper book for recording the same in the county, or whose judgment and decree was not duly docketed in the coimty clerk's office, at the time of the first pubHcar tion of the notice of sale ; and the executor, administrator, or assignee of such a person. 4. Every other person, claiming under a statutory lien or iacum- brance, created subsequent to the mortgage, attaching to the title or interest of any person, designated in either of the foregoing subdivi- sions of this section. ■ 5. The wife or widow of the mortgagor, or of a subsequent grantee, upon whom notice of the sale was served as prescribed in this title, where the lien of the mortgage was superior to her contingent or vested right of dower, or her estate in dower. § 1140. Who are bound. — The title acquired by the purchaser is, if the proceedings be regular, the same as under a strict foreclos- ure or under a judgment of foreclosure and sale.' The statute has no saving clause for persons laboring under disability, but it is per- emptory that " every sale pursuant to a power," and conducted as is therein prescribed, shall have a certain effect. Where the statute makes no exception, the court can make none on the ground of any inherent equity applicable to infants." § 1141. Questions of priority. — "Where several mortgages were executed at the same time and a parol agreement was made between 'Jackson v. Henry, lo Johns. 185; "^ Demarest v. Wynkoop, 3 Johns. Ch. Otis V. McMillan, 70 Ala. 46. 129, 147. §1142.] FOKECLOSUEE BY ADVEETI8EMENT. 731 the mortgagor and all of the mortgagees that aU should be of equal Hen, and the mortgage first recorded was foreclosed by the assignee thereof by advertisement, proper notices being served on the other mortgagees, it was held that a purchaser in good faith and for value acquired a title free from the liens of all of the mortgages.' This case was affirmed in the Court of Appeals, but the decision was put upon the ground that the assignee of the mortgage foreclosed ac- quired a preference over the unrecorded mortgages, which thereupon became junior liens subject to be foreclosed and cut ofE by the sale." The question as to whether the purchaser by force of the sale could acquire a title greater than the extent of the lien of the mortgage foreclosed, was not passed upon, and might admit of serious discus- sion. Controversies as to priority can be determined in actions to foreclose mortgages, but it is a grave question as to whether a failure to take active steps to prevent or restrain a sale will operate to estop a person holding a lien from contesting the alleged priority of a mortgage attempted to be foreclosed by sale under a power contained in a junior mortgage. § 1142. Defective foreclosure. — If the foreclosure be regularly conducted so far as the advertising and posting of the notice, and the only irregularity be an omission to serve some one person with the notice, who was entitled to receive it, the foreclosure will be valid as against. all of the persons who were served, and the purchaser will bear the same relation to the person who was not served, as a pur- chaser at a sale under a judgment would bear toward a party inter- ested in the equity of redemption, who had not been joined as a defendant. He would become the assignee of the rights of the mortgagee in the premises, as security for the debt, and the proceed- ings to foreclose would be sufficient evidence of his right to occupy the position and claim the remedies of the mortgagee.' As to all persons who were properly served, their right of redemption would be gone, and their interests in the land would be owned by the pur- chaser ; but the right of redemption would still remain in all persons who, being entitled to notice, did not receive it.' ' Decker v. Boice, ig Hun, 152, afS'd Jackson v. Bowen, 7 Cow. 13 ; Vroom v. 83 N. Y. 215. Ditmas, 4 Paige, 526. "Decker V. Boice, 83 N. Y. 215. * Groff v. Morehouse, 51 N. Y. 503 ; 'Robinson v. Ryan, 25 N, Y. 320; Vanderkemp v. Shelton, 11 Paige, 28; Wetmore v. Roberts, 10 How. 732 MOETGAGES OP EEAL PEOPEETT. [§§1143-1144. If the purchaser under the defective foreclosure obtains posses- sion he may retain such possession until the amount due on the mort- gage is paid to him." If there are judgments subsequent to the mortgage, which remain a lien upon the property at the time of the sale under the statute, the purchaser takes the whole legal and equitable interest in the property as against the mortgagor and all persons claiming under him ; sub- ject, however, to the equitable right of the judgment creditors to re- deem, in the same manner as if such foreclosure had not taken place. The amount which such judgment creditors are to pay upon the re- demption of the premises, does not depend upon the sum bid at the sale, but is regulated by the amount actually due at the time of such sale, unless it has been subsequently paid by the person who was equitably bound to pay the same." It has been said that, where the value of the mortgaged premises is less than the mortgage foreclosed, the purchaser in good faith may, by injunction, restrain a subsequent judgment creditor who is not barred from enforcing his rights,' but it may be questioned as to whether the right of a creditor to redeem can be cut ofE in any other way than by one of the methods of foreclosure. § 1143. Curing defective foreclosure. — A strict foreclosure has been held to be the proper remedy to extinguish the rights of holders of subsequent incumbrances who have not been properly cut off by the proceedings under the statute,* but strict foreclosure is now be- lieved to be abolished by ojir Code of Civil Procedure." EVIDENCE OF THE FOEECLOSUEE. § 1144. Affidavits.— Section 2396 of the Code of Civil Proced- ure provides that an affidavit of the sale, stating the time when, and the place where, the sale was made ; the sum bid for each distinct parcel separately sold ; and the name of the pm'chaser of each dis- tinct parcel, may be made by the person who officiated as auctioneer upon the sale. An affidavit of the publication of the notice of sale, and of the notice or notices of postponement, if any, may be made by the pubKsher or printer of the newspaper in which they were pub- ' Brown v. Smith, ii6 Mass. io8. ' Root v. Wheeler, I2 Abb. 294. ' Per Chancellor Walworth, in Bene- * Benedict v. Oilman, 4 Paige, 58, diet V. Oilman, 4 Paige, 58, 5i ; Robin- 63. son V. Ryan, 25 N. Y. 320. ' Code of Civ. Pro. § 1626. § 1145.] POEECLOSUEE BY ADVEETISEMEETT. 733 lished, or by his foreman or principal clerk. An affidavit of the affixing of a copy of the notice at or neasr the entrance of the proper coTxrt house, may be made by the person who so affixed it, or by any person who saw it so affixed, at least eighty-four days before the day of sale. An affidavit of the affixing of a copy of the notice in the book, kept by the county clerk, may be made by the county clerk, or by any person who saw it so affixed, at least eighty-four days before the day of sale. An affidavit of the service of a copy of the notice upon the mortgagor, or upon any other person, upon whom the notice must or may be served, may be made by the person who made the service. Where two or more distinct parcels are sold to different purchasers, separate affidavits may be made with respect to each par- cel, or one set of affidavits may be made for all the parcels. The matters required to be contained in any or all of the affidavits specified in the above section, may be contained in one affidavit where the same person deposes vsdth respect to them. A printed copy of the notice of sale must be annexed to each affidavit, and a printed copy of each notice of postponement must be annexed to the affidavit of publication and to the affidavit of sale. But one copy of the notice suffices for two or more affidavits,' where they all refer to it, and are annexed to each other and filed and recorded together." § 1145. Affidavits may be filed and recorded. — The affidavits specified in sections 2396 and 239Y of the Code of Civil Procedure, may be filed in the office for recording deeds and mortgages in the county where the sale took place. They must be recorded at length by the officer with whom they are filed, in the proper book for re- cording mortgages. The original affidavits, so filed, the record thereof, and a certified copy of the record, are presumptive evidence of the matters of fact therein stated, with respect to any property sold which is situated in that county. "Where the property sold is situated in two or more counties, a copy of thg affidavits, certified by the officer with whoip the originals are filed, may be filed and re- corded in each other county wherein any of the property is situated. Thereupon the copy and the record thereof have the like effect with respect to the property in that county, as if the originals were duly filed and recorded therein.' A clerk or a register who records any affidavits, or a certified copy \Mowry v; Sanborn, 72 N. Y. 534. ' Code of Civ. Pro. § 2397. ' Id. § 2398. V34 MORTGAGES OF REAL PROPEETT. [§§1146-1148. thereof, filed with him, must make a note upon the margin of the record of the mortgage, in his office, referring to the book and page, or the copy thereof, where the affidavits are recorded.' § 1146. Deed not necessary. — The purchaser of the mortgaged premises, upon a sale conducted as prescribed in this title, obtains title thereto, against all persons bound by the sale, without the execu- tion of a conveyance. Except where he is the person authorized to execute the power of sale, such a purchaser also obtains title, in like manner, upon payment of the purchase money, and compHance with the other terms of sale, if any, without the filing and recording of the affidavits, as prescribed in section 2398 of the Code of Civil Pro- cedure. But he is not bound to pay the purchase money, until the affidavits, specified in that section, with respect to the property pur- chased by him, are filed, or dehvered, or tendered to him for filing." § 1147. Certifying affidavits. — The affidavits above specified may be taken and certified by any judge of a court of record, any supreme court commissioner, or any commissioner of deeds [justice of the peace or notary pubhc],' and may be filed in the office of the clerk of the county where such sale took place. § 1148. Effect of affidavits. — It will be observed that the affida.. ' Code of Civ. Pro. § 2399. then be taken by commissioners of deeds. ° Id. § 2400. It will be noticed that the office of com- ' Mowry v. Sanborn, 72 N. Y. 534. missioner of deeds did not then exist in By Laws of 1840, t. 238, the office of the towns of this State, their powers commissioner of deeds was abolished in being exercised by justices of the peace ; the several towns of this State ; and all and in order that there might be no pojirers and duties of such commission- question as to the powers of notaries ers, from the time of the passage of the public, it was declared by Laws of 1863, act, were to be executed by the justices c. 508, that notaries public should have of the peace in said towns respectively ; all the powers then conferred upon them but the several commissioners then in by law, and should also have power to office were to continue to execute the take affidavits and certify to the same, duties of said office till the expiration of and to take and certify the acknowledg- the term for which they were respect- ment or proof of deeds or other instru- ively appointed, and no longer. ments in writing, in all cases where _;«j- By Laws of 1859, c. 360, in addition to tices of the peace or commissioners of deeds their powers then possessed by them, might then take the same ; and all acts notaries public of this State were author- of notaries public in making or taking ized to administer oaths and affirmations, such certificates of the acknowledgment and to take the proof and acknowledg- or proof of deeds or other instruments ments of deeds, mortgages, and any in writing, since the passage of the act, other papers, for use or record in this chapter 360 of the Laws of 1859, were State, in all cases where the same might confirmed and declared valid. § 1149.] FOEECLOSTJEE BY ADVEETISEMENT. 735 vits are evidence of the foreclosure.' The foreclosure is complete as soon as the sale is made, so far as to extinguish the equity of redemp- tion of the mortgagor ; the time given to the purchaser to complete his purchase is for his benefit, and not for the benefit of any person concerned in the equity of redemption, and the affidavits can be made and filed at any time after the sale has been made." But, while the mortgagor has no right after the sale to redeem from the mortgage, his right to retain possession of the property continues ulitil the affi- davits have been made,' and in this respect his rights are similar to those of a mortgagor after a sale under a judgment of foreclosure, and before the delivery of the deed from the referee or sheriff.* The statute, when it provides that the affidavits " shall be evidence of the sale, and of the foreclosure of the equity of redemption, as therein specified, without any conveyance being executed, in the same manner and with the like effect as a conveyance executed by a mortgagee upon such sale to a third person had theretofore been," makes the affidavits instruments of conveyance as well as evidence authorizing a conveyance,' and the title cannot pass until they are completed. The recording of the affidavits has been said to be nec- essary in order to vest the title in the purchaser ; but this proposition has never been adjudicated upon, and in the cases where such an opinion has been expressed, it was not necessary in order to maintain the ruling of the court.' On the other hand, it has been determined that it is not necessary to record the affidavits in order to pass the title, and this appears to be the better doctrine,' since the statute does not make recording essential, and the affidavits themselves are, by the statute, as good evidence of the facts as the record. § 1149. Conveyance. — Prior to 1838, when the property had been purchased by any person other than the mortgagee, or his legal representatives, or his or their assigns, it was necessary that the owner of the mortgage should, as attorney for the mortgagor, and by virtue ' Mowry v. Sanborn, 72 N. Y. 534 ; s. 566 ; Bryan v. Butts, 27 Id. 503 ; Amot c. 68 N. Y. 153 ; 62 Barb. 223. v. McClure, 4 Den. 41. ° Tuthill V. Tracy, 31 N.. Y. 157. * Cohoes Company v. Goss, 13 Barb. = Amot V. McClure, 4 Den. 41 ; Lay- 137 ; Layman v. Whiting, 20 Id. 559 ; man v. Whiting, zo.Barb. 559 ; Bryan v. Bryan v. Butts, 27 Id. 503 ; Tuthill v. Butts, 27 Id. 503 ; Howard v. Hatch, 29 Tracy, 31 N. Y. 157. Id. 297 ; Tuthill v. Tracy, 31 N. Y. 157. ' Howard v. Hatch, 29 Barb. 298 ; ^ Mitchell V. Bartlett, 51 N. Y. 447. Frink v. Thompson, 4 Lans. 489. ' Layman v. Whiting, 20 Barb. 559, 736 MORTGAGES OF REAL PEOPEETY. [§ 1150. of the power of sale under which the foreclosure had been made, ex- ecute a conveyance to the purchaser ; but if the owner of the mort- gage were himself the purchaser, it was held that no deed was neces- sary to make his title to the premises perfect." As the statute now stands, no deed is necessary in any case to perfect the title in the purchaser. § 1150. Sufficiency of affidavits. — The foreclosure of a mortgage by advertisement is not a proceeding in court, so as to authorize courts to remedy a defect," and the aflSdavits must contain enough to show that the statute was complied with. It is not enough to state that the notice was posted " in a proper manner," or that it was served on " certain persons named therein," or that it was " properly folded and directed," and that a " proper postage stamp was placed on each of said letters," without stating the places of residence of the persons served, and the mode of folding and directing.' So, also, it will not be sufficient to state in the affidavit that the notices were sent to or left at places which the person sending or serving them is informed and believes to be the places where the parties to be served reside. The fact of residence is important, and should be stated positively and with accuracy.* An affidavit of the publishing of the notice of sale was as follows : "A. B., being sworn, says that he is foreman of the printer of the newspaper called the Peoples Journal, a public newspaper printed and published in the county of "Washington, where the premises de- scribed in the annexed notice of sale, or a part thereof, are situated, and that the notice of the mortgage sale, of which a printed copy is annexed, was published for twelve weeks successively, at least once in each week prior to the time specified in said notice for the sale of the said premises, said publication having been commenced on the 23d day of April, 1868, and continued for twelve weeks at least, succes- sively, at least once in each week." This was held sufficient, though it was not specifically stated that such publication was in said news- paper. The court stated that the presumption is in f a,vor of the hona fides of the affidavit and the regularity of the proceedings, and that ' Arnot V. McClure, 4 Den. 41 ; Dema- ' Dwight v. Phillips, 48 Barb. 116. jrest V. Wynkoop, 3 Johns. Ch. 129, 146 ; ' Chalmers v. Wright, 5 Robt. 713. Jackson v. Colden, 4 Cow. 266 ; Slee v. * Mowry v. Sanborn, 7 Hun, 380 ; see Manhattan Co., i Paige, 48, 79. s. c. 62 Barb. 223. §§1151-1152.] rOBECLOSUEE BY ADVEETISEMBNT. 737 the affidavit was presumptive evidence of the due publication of the notice and conclusive evidence until controverted and disproved.' § 1151. Contradicting affidavits. — As the affidavits are an ex parte proceeding, and are only made presumptive evidence of the facts therein contained, there can be no doubt that they may be controverted by the mortgagor and those claiming under him. All or any of the facts stated in the affidavits may be disproved by any person, unless it be the mortgagee and those claiming under him,'' and a purchaser may show facts necessary to correct errors.^ It has been said that the mortgagee and those claiming under him must, in an action ■ to recover possession of the premises, stand on the affidavits as they existed at the time, of the commencement of the action, and cannot supply defects, for that would be to create a cause of action during the pendency of the suit ;' but since the affidavits may be made at any time after the sale, there would seem to be no reason why they should not be corrected, if such correction were made prior to the commencement of an action, to the maintenance of which it is material," if not even after the commencement of the action." COSTS. § 1153. Costs allowed. — The foUovnng costs, in addition to the expenses specified in section 2402 of the Code of Civil Procedure, are allowed in proceedings taken as prescribed in the title of the Code of Civil Procedure regulating foreclosure by advertisements : 1. For drawing a notice of sale, a notice of the postponement of a sale, or an affidavit, made as prescribed in this title, for each folio, twenty-five cents ; i&c making each necessary copy thereof, for each folio, thirteen cents. 2. For serving each copy of the notice of sale, required or expressly permitted to be served by this title, and for affixing each copy thereof ' Mowry v. Sanborn, 72 N. Y. 534, ■* Dwight v. Phillips, 48 Barb. n6 ; rev'g s. c. II Hun, 545; Gunnell v. Mowry v. Sanborn, 7 Hun, 380; sees. c. Cockerill, 79 111. 79 ; Burke v. Adair, 23 62 Barb. 223, where a contrary doctrine W. Va. 139 ; Demarest v. Wynkoop, 3 was maintained ; Bryan v. Butts, 27 Johns. Ch. 129 ; 8 Am. Dec. 467. Barb. 503. ^ PerBRONSoN,J., in Arnotv. McClure, * Bunce v. Reed, 16 Barb. 347. 4 Den. 41 ; Sherman v. Willett, 42 N. Y. « Story v. Hamilton, 86 N. Y. 428 ; 146 ; Mowry v. Sanborn, 62 Barb. 223 ; Mowry v. Sanborn, 68 N. Y. 153 ; s. c. see s. c. 7 Hun, 380. 72 N. Y. 534. ' Story V. Hamilton, 86 N. Y. 428. 47 738 MOETGAGBS OF EEAL PEOPEETY. [§1153, required to be affixed upon the court house, as prescribed in this title, one dollar. 3. For superintending the sale, and attending to the execution of the necessary papers, ten dollars.' The suins actually paid for the following services, not exceeding the fees allowed by law for those services, are allowed in proceedings taken as prescribed in this title : 1. For publishing the notice of sale, and the notice or notices of postponement, if any, for a period not exceeding twenty-four weeks. 2. For the services of the clerk, specified in section 2390 of the Code, as to recording and indexing the notice of sale. 3. For recording the affidavits, and also where the property sold is situated in two or more counties, for making and recording the neces- sary certified copies thereof. 4. For necessary postage and searches." § 1153. Taxation. — The costs and expenses must be taxed, upon notice, by the clerk of the county where the sale took place,' upon the request and at the expense of any person interested in the pay- ment thereof. Each provision of the Code of Civil Procedure relat- ing to the taxation of costs in the Supreme Court, and the review thereof, applies to such a taxation.* The statute contemplates a taxation where the party can be heard, and not an expa/rte taxation. The person who is authorized to require such taxation to be made is any party liable to pay the costs ; this will include the person entitled to the surplus as well as one who is bound for a deficiency, and such person may not only insist that the costs be taxed, but he is also entitled to notice of the taxation, so that he may have an opportunity of contesting it.' A bill of costs which were properly allowable before the enactment of our present Code of Civil Procedure, may be found in the opinion of Haeeis, J., in Collins v. Stcmdish (6 How. 493). Costs cannot be taxed for matter contained in the notice of sale, but not legally required to be inserted ; nor for serving persons not required by the statute to be served, although it may be prudent to serve them.' ' Code of Civ. Pro. §.2401. ' Matter of Moss, 6 How. 263. " Id. § 2403. « Ferguson v. Wooley, g Civ. Pro. ' People V. Golborne, 20 How. 378. Rep. 236. * Code of Civ. Pro. § 2403 ; People v. Golborne, 20 How. 378. §§1154-1155.] FOEECLOSUEE BY ADVERTISEMENT. 739 DISTEIBUTieN OF SUEPLFS. § 1154. Prior to 1867. — Prior to the passage of the acts of 1867, 1868, and 1870, the mortgagee who had received more than enough to satisfy his claims, from a sale of the mortgaged property, was liable to account for the surplus to the mortgagor, as for money had and received.' The mortgagee was, however, not hable until he received the money.^ The mortgagee was, as to the surplus moneys in his hands, a trustee or quasi trustee for the benefit of those interested therein. If there were rival claimants, he was not obhged to pay either ; but it was his duty to retain the fund until an action could be brought by himself or by one or more of the claimants, in which the rights of the parties could be determined." Where two or more persons claimed the fund, it was not safe for the mortgagee to pay it over to either, and, at the same time, he was hable to be punished with costs for refusing.* An action might be brought against the mortgagee by any person having a claim to the surplus." In JBevier v. Sohoonmaker (29 How. 411), such an action was brought by the owner of the equity of re- demption under a sheriff's sale, who was also the owner of the lien on the mortgaged premises next in order to the mortgagee. In Mat- thews V. Duryee (45 Barb. 69), the action was held to lie in favor of the widow of the mortgagor.' In Kirby v. Fitzgerald (31 N. Y. 417), two actions were com- menced against the mortgagee, who deposited the money in court, under an agreement between the parties, and the court held that the peculiar form of the litigation enabled it to apply the rules applicable to surplus proceedings in an action to foreclose a mortgage. § 1155. Distribution of surplus by Supreme Court. — Provisions were made for the distribution of surplus moneys arising from the sale of lands in proceedings to foreclose mortgages by advertisement by chapter 668 of the Laws of 1867, as amended by chapter 170 of the Laws of 1870, and by chapter 804 of the Laws of 1868 as amended by chapter 706 of the Laws of 1870. Both of these enactments were ' Cope V. Wheeler, 41 N. Y. 303. * Bevier v. Schoonmaker, 29 How. "^ Russell V. Duflon, 4 Lans. 399. 411. ^ The People V. Ulster Common Pleas, 'See Costigan v. Newland, 12 Barb. 18 Wend. 628 ; Bleecker v. Graham, 2 456. Edw. 647; Fielder v. Varnei', 45 Ala. ° s. c. affi'd 4Keyes, 525 ; 3Abb. App. 429. Dec. 220 ; 17 Abb. 256. 740 MORTGAGES OF REAL PEOPEETT. [§ 1155- repealed in 1880," and the following sections were inserted in the Code of Civil Procedure in lieu thereof : § 2404. An attorney or other person who receives any money, arising upon a sale, made as prescribed in this title (foreclosure by advertisement) must, within ten days after he receives it, pay into the Supreme Court the surplus exceeding the sum due and to become due upon the mortgage, and the costs and expenses of the foreclosure, in like manner and with like effect, as if the proceedings to foreclose the mortgage were taken in an action, brought in the Supreme Court, and triable in the county where the sale took place. § 2405. A person who had, at the time of the sale, an interest in or lien upon the property sold, or a part thereof, may, at any time before an order is made, as prescribed in th6 next section but one, file in the office of the clerk of the county where the sale took place, a petition, stating the nature and extent of his claim, and praying for an order, directing the payment to him of the surplus money, or a part thereof. § 2406. A person filing a petition as prescribed in the last section, may, after the expiration of twenty days from the day of sale, apply to the Supreme Court, at a term held within the judicial district, em- bracing the county where his petition is filed, for an order, pursuant to the prayer of his petition. Notice of the application must be served, in the manner prescribed in this act, for the service of a paper upon an attorney in an action, upon each person who has filed a hke petition, at least eight days before the application ; and also upon each person, upon whom a notice of sale was served, as shown in the affi- davit of sale, or upon his executor or administrator. But, if it is shown to the court, by affidavit, that service upon any person required to be served, cannot be so made with due diligence, notice may be given to him in any manner which the court directs. § 2407. Upon the presentation of the petition with due proof of notice of application, the court must make an order, referring it to a suitable person, to ascertain and report the amount due to the peti- tioner, and to each other person, which is a lien upon the surplus money, and the priorities of the several liens thereupon. Upon the coming in and confirmation of the referee's report, the court must make such an order, for the distribution of the surplus money, as jus- tice requires. ' Laws of i88o, ch. '245. § 1156.] FOEECLOSUEE BY ADVERTISEMENT. 741 § 1156. Distribution of surplus by surrogate. — Sections 2404, 2405, 2406, and 2407 of the Code of Civil Procedure do not apply to surplus money, arising upon the sale of real property, of which a decedent died seized, where letters testamentary or letters of adminis- tration upon the decedent's estate were, within four years before the sale, issued from a surrogate's court within the State, having jurisdic- tion to issue them. § 2797. The commencement or pendency of an action or special proceeding, having for its object the sale, either absolutely or con- tingently, of property liable to be disposed of as prescribed in the title relating to surrogates' courts, or the foreclosure by advertise- ment, of a mortgage thereupon ; or any proceeding to sell such prop- erty, taken pursuant to a judgment, or by virtue of an execution, does not affect any of the proceedings taken as prescribed by this title, unless the surrogate so directs. After making a decree direct- ing a mortgage, lease, or sale, the surrogate may, and, in a proper case, he must, stay the order to execute the decree, with respect to the property affected by the action or special proceeding, or by the proceedings then pending, until the determination thereof, or the further order of the surrogate with respect thereto. If, in the course thereof, a sale of any of the property has been made, before making the decree in the surrogate's court, the decree must provide for the application of the surplus proceeds belonging to the decedent's estate. If such a sale is made afterward, the directions contained in the de- cree, relating to the property sold, are deemed to relate to those pro- ceeds. § 2798. Where real property, or an interest in real property, hable to be disposed of as prescribed in this title (surrogates' courts), is sold, in an action or a special proceeding, specified in the last section, to satisfy a mortgage or other hen thereupon, which accrued during the decedent's lifetime ; and letters testamentary or letters of adminis- tration upon the decedent's estate were, within four years before the sale, issued from a surrogate's court of the State, having jurisdiction to grant them ; the surplus money must be paid into the surrogate's court from which the letters issued. If the sale was made pursuant to the directions contained in a judgment or order, the surplus re- maining after payment of all the liens upon the property, chargeable upon the proceeds, which existed at the time of the decedent's death, must be so paid. If the sale was made in any other manner, the sur- plus, exceeding the lien to satisfy which the property was sold, and 742 MORTGAGES OF REAL PKOPEETY. [§§1157-1158. the costs and expenses, must, within thirty days after the receipt of the money from which it accrues, be so paid over by the person re- ceiving that money. The receipt of the surrogate, or the clerk of the surrogate's court, or the county treasurer, as the case may be, is a suflBcient discharge to the person paying the money. § 1157. Object of statutes. — The statute which grants to the surrogates, and that which vests in the Supreme Court, jurisdiction to distribute the surplus which remains after the sale of real estate under a power contained in a mortgage, regulate the remedies of the parties merely, and do not affect their substantial rights. The object of both enactments was to afford a means by which those rights might be determined, to the end that the persons entitled to the sur- plus might get it. If a mortgage be foreclosed after the death of the mortgagor, the surplus stands in the place of the land, and belongs to the heir, and the fact that a surrogate is called upon to adjudge upon the claims of the parties will not make it belong to the administrator. Neither will a clause in the mortgage which provides that the surplus shall be paid to the mortgagor, his " executors or administrators " convert that which the law declares to be real estate into personal property, and thus change the rules of law which control the rights of the claimants to an estate of a deceased person. The true con- struction of those words is, that the promise is to pay the executors or administrators whenever the surplus might have been collected by the mortgagor, as, for example, when the land was sold in his life- time.' OBTAINING POSSESSION. § 1158. By summary proceeding, — ^Prior to the enactment of Laws of 1874, c. 208, the purchaser was compelled to sue in eject- ment, in order to acquire possession of the mortgaged premises. By that statute, however, the summary remedy of landlords to recover possession of land is made to apply when any person shall hold over and continue in possession of any real estate, which shall have been sold pursuant to the foreclosure of a mortgage thereon, or by virtue of an execution against such person, after a title under such sale shall have been perfected. This statute was repealed in 1880, but, so far as it applied to the remedies of persons holding title under the fore- closure of a mortgage by advertisement, it was re-enacted in section 2232 of the Code of Civil Procedure. ' Dunning v. Ocean National Bank, 6i N. Y. 497. § 1159.] rOEECLOSUEE BY ADVEETISEMENT. 743 § 1159. What may be litigated. — In People ex rel. Briden- lecher v. Prescott (3 Hun, 419, 424), it was questioned as to how far the proceedings in the foreclosure of mortgages by advertisement are open to review before officers authorized to entertain these summary proceedings. It was said that " if they can be reviewed, it follows that they may be annulled, and thus the action of the highest court in the State pronounced illegal and void by a justice of the peace. This cannot be so. It must be enough to produce before the officer the record of the proceedings on foreclosure. Whether they are in strict accordance with the statute is not a subject with which the offi- cer has anything to do." These remarks were not necessary to the decision, which may safely rest upon the fact that the proceedings at- tacked were regular, neither are they fully sustained by the authority cited in their support.' That case was a summary proceeding to ob- tain possession of land sold under execution, and the court held that it was not competent to attack the regularity or validity of the judg- ment, nor to inquire as to whether the purchase was honorfide. If the judgment and execution are regular upon the face of them, and the applicant shows a title under them, that is sufficient. So, if the proceeding upon which an applicant for possession of land bases his claim is the foreclosure of a mortgage by advertisement, the validity • of the mortgage or the honesty of his motives cannot be litigated in the summary proceeding, but it is the duty of the magistrate, how- ever inferior his jurisdiction, to examine the evidences of the fore- closure and to ascertain whether, upon their face, they confer a right to the possession which his mandate vpill enforce.' • Brown v. Belts, 13 Wend. 33. " See Getting v. Mohr, 34 Hun, 340. APPEI^DIX OF FORMS, APPENDIX OF FORMS. No. -Jr. COMPLAINT IN ACTION TO FORECLOSE. [Title of the aetion, giving the names \ of all of the parties thereto.~\ \ The complaint of the above named pi The complaint of the above named plaintiff respectfully shows to this court : I. That the defendant, C. D., for the purpose of securing the pay- ment to the defendant, E. F., of the sum of dollars, with inter- est thereon, on or about the day of j 18 5 executed and delivered to said E. F. a bond bearing date on that day, sealed with his seal, whereby he bound himself in the penalty of dollars, upon condition that the same should be void if the said defendant should pay to the said E. F. the sum of dollars, on the day of* , 18 , and the interest thereon, at and after the rate of six per cent, per annum, and to be paid semi-annually. II. That it was therein expressly agreed that should any default be made in the payment of the said interest, or of any part thereof, on any day whereon the same is made payable, as above expressed, and should the same remain unpaid and in arrear for the space of thirty days, then and from thenceforth, that is to say, after the lapse of the said thirty days, the aforesaid principal sum of dollars, with all arrearage of interest thereon, should, at the option of the said E. F., or his legal representatives become and be due and payable immedi- ately thereafter, although the period above limited for the payment thereof may not then have expired, anything therein before contained to the contrary notwithstanding. III. That, as collateral security for the payment of the said indebt- edness, the said defendant C. D., and M., his wife, on the same day, executed, duly acknowledged and dehvered to the said E. F., a mort- gage, which mortgage was duly recorded in the oflSee of the clerk of the county of , in Liber of Mortgages, page , on the day of 5 18 , whereby they granted, bargained, and sold, to the said E. F., the following described premises, that is to say : \_Insert description of property as contained in the mortgage.'] 748 APPENDIX OF FOEMS. ly. That said mortgage contained the same condition as the said bond, and that, in case of default in the payment of me said money, the interest that may grow due thereon or of any part thereof, the said mortgagee was therein also empowered to sell thri said mortgaged premises in due form of law, and out of the moneys (arising from the sale, to pay the said sum of money and interest, with the costs and expenses of the proceedings thereupon, the surplus to be returned to the mortgagor. y. That thereafter the said defendant, E. F., by an instrument in writing under his hand and seal, dated the day of j 18 , and recorded in the office of the clerk of the county of , on the day of ) 18 , and for a valuable consideration therein expressed, duly assigned said bond and mortgage to the plaintiff, and also therein guaranteed to the plaintiff that the same would be paid when due, with interest ; [or] which said assignment also contained a covenant in the following words to wit : [setting it forth.] yi. That thereafter the said 0. D., and M., his wife, by their deed of conveyance under their hands and seals, dated the day of , 18 , and recorded in the office of the clerk of the county of , on the day of , 18 , duly conveyed the said mortgaged premises to the defendant, L. K., subject to the said mort- gage, and the said defendant L. K., in and by said deed of convey- ance, and by accepting the same, assumed said mortgage, and cove- nanted and agreed to pay off and discharge the same, as part of the consideration in said deed of conveyance expressed : [using IcmgvMge of the recital in the conveycmGe.] yil. The plaintiff further shows that in and-Jby the terms .of said mortgage, it was also expressly agreed that the said mortgagors would keep the building erected or to be erected upon the mortgaged prem- ises insured against loss or damage by fire, in at least the sum, of dollars, and by insurers approved by the said' mortgagee, and assign the policy and certificates thereof to the said mortgagee as a collateral and further security for the payment thereof. And in default of so doing it was thereby made lawful for the said mortgagee to make such insurance and pay the premium and premi,ums therefor, which pre- miums thus paid and interest thereon the inortgagors agreed to pay, and the same was declared to be deemed to be secured by said mort- gage, and collectible thereby. VlII. That the said mortgagors failed to keep the buildings erected upon the said premises insured as aforesaid, and made default therein, and that on or about the day of , 18 , the plaintiff paid the sum of dollars to the Fire Insurance company in pro- curing such insurance in the sum of dollars, for the term of one year from and after said date ; no part of which has been repaid to him. TX. The plaintiff further shows that the said defendants have failed to comply with the condition of the said bond and mortgage APPENDIX OF FOEMS. 749 by omitting to pay the sum of dollars, being six months' inter- est thereon, which became due and payable on the day of , 18 ; that more than thirty days have since elapsed ; that the plain- tifE elects that the whole principal sum be now due and payable, and that there is now justly due to the plaintiff on the said bond and mortgage the sum of dollars, and interest thereon from the day of ) 18 , together with the further sum of dollars, paid by the plaintiff in procuring insurance as aforesaid, with interest thereon from the day of ? 18 , the date of such payment. ^ The plaintiff further shows that no proceedings have been had at law or otherwise, to his knowledge or belief, for the recovery of the said sum secured by the said bond and mortgage, or any part thereof : {_!/ this is not true, state what proceedings have heen taken.'] XI. The plaintiff further shows that he is informed and believes that the defendants, G. H. and I. K., and L., his wife, have or claim to have some interest in or lien upon the said mortgaged premises, which interest or hen, if any, has accrued subsequently to the lien of the said mortgage. Wherefore the plaintiff demands judgment : 1. That the defendants and all persons claiming under them or either of them subsequent to the commencement of this action, may be barred and foreclosed of all right, claim, lien, and equity of re- demption in the said mortgaged premises. 2. That the said premises may be decreed to be sold according to law; that the moneys arising from the sale may be brought into court ; that the plaintiff may be paid the amount due on the said bond and mortgage, with interest to the time of such payment, and the costs and expenses of this action, so far as the amount of such moneys properly applicable thereto will pay the same. 3. That the defendants, C. D., E. F., and I. K., may be adjudged to pay any deficiency which may remain after applying all of said moneys so applicable thereto, and 4. That the plaintiff may have such other or further rehef, or both, in the premises, as may be just and equitable. X.T., PlavntAff''s Attorney. [Add verification in the ordinary form.] No. 2. NOTICE OF THE PENDENCY OF THE ACTION TO FORECLOSE. {^Title of the action, giving the ) names of all of the parties > thereto.] ) Ijfotice is hereby given that an action has been commenced and is pending in this court, upon a complaint of the above named plaintiff, 750 APPENDIX OF FORMS. against the above named defendants, for the foreclosure of a mort- gage executed by the defendants C. D. and M., his wife, to the de- fendant E. F., dated the day of j 18 , and recorded in the office of the clerk of the county of , on the day of , 18 , in Liber of Mortgages, page , at o'clock in the noon (and which said mortgage has been duly assigned by said defendant E. F. to the above named A. B., the plaintiff herein). That the mortgaged premises affected by the said foreclosure, were, at the time of the commencement of this action, and at the time of filing this notice are, situated in the town of , and county of , and that they are described in the said mortgage as follows, to wit : [Insert description of the mortgaged property as contained in the mortgage.'] Dated the day of , 18 . X.Y., Plamiiff^s Attorney. The clerk of the county of • will please index against the defendants C. D., M. D. and E. F.' X.T., PlainUff's Attorney. No. 3. NOTICE OF NO PERSONAL CLAIM. [Title of the action.] To all of the defendants except the defendants C. D., E. F. and I. K.: The object of this action, a copy of the summons in which is here- with served upon you, is to foreclose a mortgage executed by C. D. and wife to K F., dated , 18 , and recorded in the office of the clerk of the county of , on the 'day of > 18 , in Liber of Mortgages, page , and which mortgage has been duly assigned to the plaintiff. The amount due and owing on said mortgage, is the sum of dollars, and interest from , 18 . The following is a description of the mortgaged premises : [Insert a irief description.] And no personal claim is made againstyou. Plamtiff^s Attorney. ' See ante, § 768. APPENDIX OP POEMS. 751 No. 4. NOTICE OF APPLICATION FOR JUDGMENT. [^Title of the action.] Sir : Take notice that on all of the papers and proceedings in this action, the plaintiff will apply to this court at a special term thereof, to be held at chambers, at the court house, in the city of , on the day of > 18 , at o'clock in the noon of that day, or as soon thereafter as counsel can be heard, for the re- lief demanded in the complaint, and for an order referring it to some suitable person to ascertain and compute the amount due to the plaintiff for principal and interest on the bond and mortgage set forth in the complaint (and also to ascertain and compute the amount due to puch of the defendants as are prior incumbrancers of the mortgaged premises),' and also for a provision to be contained in such order of reference directing that the hearing before the referee therein named proceed forthwith, and that, immediately upon the incoming of the report of said referee, and without further notice, the plaintiff have judgment of foreclosure and sale, and for the relief demanded in the complaint, besides costs and an extra allowance of two and one-half per cent, on the amount due to him {not exceeding two liwad/red dolla/rs), and for such/)ther or further relief as may be just. Dated, etc. X. T., PlavnMffs Attorney. To M. K, Attorney for Defendant, C. D. No.-5r AFFIDAVIT ON APPLICATION FOK JUDGMENT. \Title of the action^ COUNTT OF , ss. : X. Y., being duly sworn, says that he is the attorney for the plaintiff. That this action was brought to foreclose a mortgage on certain real estate situate in the county of , the whole amount of which said mortgage is due and payable [or. That an instalment of dollars of the principal of said mortgage, and interest there- on from the day of j 18 , is now due and payable, ' If the whole amount secured by the more than to compute. See Form No. 6 mortgage has not become due, or if any for provisions in the order of reference, of the defendants are infants or absentees, These provisions should be anticipated the order of reference will be something in the notice of application for judgment. T'SS APPENDIX OF FOEMS. and that the residue thereof, being the sum of dollars, and interest thereon from the day of ,18 ,wiU become due and payable on the day of , 18 ]. That all of the defendants have been duly served with the sum- mons, or have duly appeared herein by their respective attorneys, as will more fully appear by the affidavits of service and notices of ap- pearance which are hereunto annexed. That none of the defendants are infants or absentees [or, That none of the defendants are infants except the defendant , who has appeared by his guardian ad litem, and that none of the defend- ants are absentees, except tlie defendant , who has duly been served with the summons by publication thereof, under an order of this court, proof of which is hereunto annexed]. That the time to answer has expired as to all of the defendants, and that no answer or demurrer has been received [except the usual general answer of the said infant defendant , who answers by his guardian, and who does not controvert any of the allegations of the complaint, and except also the answer of the defendant , the issues raised by which have been duly tried and disposed of by Hon. , a justice of this court, whose findings are here- imto annexed]. That on the day of , 18 , a notice of the pendency of this action, containing the names of the parties thereto, the object of the action, and a description of the property affected thereby, the date of the mortgage and the parties thereto, and the time and place of recording the same, was duly filed in the office of the clerk of the said county of , that being the county where the mort- gaged premises are situated, at or immediately after the time of the filing of the complaint therein as required by law ; and that, since the filing of said notice, the complaint in this action has not been amended by making new parties to the action, or so as to affect other property not described in the original complaint, or so as to extend the claims of the plaintiff as against the mortgaged premises. Sworn, etc. \8igned,~\ X. Y. No. 6. ORBEK OF REFERENCE, PRELIMINAET TO JUDGMENT. At a special term, etc. [Title of the action.] On reading and filing affidavits of service and notices of appear- ance, proving the due service of the summons on all of the defendants herein, and the affidavit of X. Y., attorney for the plaintiff, by which it appears that the whole amount secured by the mortgage described in the complaint has become due, that none of the defendants are in- APPENDIX OF FOEMS. 753 fants or absentees, that the time to answer has expired as to all of the defendants, and that no answer or demurrer has been received, and that a due notice of the pendency of this action was filed more than twenty days since, and on due notice of tliis motion, with due proof of the service thereof, after heai'ing X. Y., attorney for the plaintiff, and on his motion, and M. JST., counsel for the defendant C. D., in opposition thereto : It is ordered, that it be referred to Esq., of the city of , counselor at law, to ascertain and compute the amount due to the plaintiff for principal and interest on the bond and mortgage set forth in the complaint (and also to ascertain and compute the amount due to such of the defendants as are prior incumbrancers of the mortgaged premises). [ Where tiie whole arrumnt secured hy the mortgage has not ieGorne due, the reference should ie .•] To ascertain and compute the amount due and yet to become due to the plaintiff on the bond and mort- gage set forth in the complaint, including interest thereon to the date of liis report, and also to ascertain the situation of the mortgaged premises, and whether the same can be sold in parcels without preju- dice to the interests of the parties ; and if he shall be of opinion that a sale of the said premises in one parcel will be most beneficial to the parties, then that he report his reasons for such opinion. \^Jf one of the defendants is an infant, and has put in a general amswer iy his gua/rdiam, or if any of the defendants are absentees, the reference should he ;] To take proof of the facts and circumstances stated in the complaint, and to examine the plaintiff or his agent on oath, as to any payments which have been made, and to ascertain and compute the amount due to the plaintiff for principal and inter- est on the bond and mortgage set forth in the complaint. It is further ordered, that the hearing before said referee proceed- forthwith, and that, immediately upon the incoming of the report of said referee, and withoiit further notice, the plaintiff have judgment of foreclosure and sale and for the relief demanded in the complaint, besides costs and an extra allowance of dollars. No. 7. SUMMONS TO ATTEND BEFORE REFEREE.^ [Title of the action.] By virtue of an order made and entered in the above entitled ac- tion, on the day , 18 , I, , the referee ap- pointed herein, do hereby summon you to appear at my office, number street, in the city of / , on the day of , 18 , at o'clock in the noon, to attend a ' This is the form used in Chancery, mere notice, it is commonly used. See and, though the Code provides for a anie, § 807. 48 754 APPEKDIX OF POEMS. hearing of tlie matters in the said action, in reference before me, as such referee, pursuant to said order. And hereof fail not at your peril. Dated the day of , 18 . [Signatm/re of Beferee.'] TINDEEWEITnsrG. {^Insert substance of the order of reference following its language, thus .'] To ascertain and compute the amount due to the plaintiff for principal and interest on the bond and mortgage set forth in the complaint. [SignalMre of Heferee.l No. 8. OATH OF REFEKEE. \_Title of the action.] County of , ss. : I, K. Gr., the referee named in the order of this court, made in this action at special term, and dated on the day of , 18 , wherein and whereby it was referred to me to ascertain and compute the amount due to the plaintiff for principal and interest on the bond and mortgage set forth in the complaint [reciting purpose of reference], being duly sworn, do depose and say : That I will faithfully and fairly determine the questions referred to me, as the case requires, and that I will make a just and true re- port, according to the best of my understanding. Sworn, etc. [Signed,] K. G. No. 9. REPORT OF REFEREE, PRELIMINiRY TO JUDGMENT. Whole amount due. No imfa/nts or absentees. Title of the action.] To the Supreme Court of the State of New York : In pursuance of an order of this court, made in the above entitled action on the day of , 18 , by which it was referred to the undersigned referee, to ascertain and compute the amount due to the plaintiff for principal and interest on the bond and mortgage set forth in the complaint [using the language of the order], I, , tibe referee in the said order named, do report;, that I have ascertained and computed the amount due to the plaintiff upon and by virtue of the said bond and mortgage, and that I find and accordingly report, that there is due to the plaintiff for principal and interest on the said bond and mortgage, at the date of this my report, the sum of dollars. APPENDIX OF FORMS. 755 Schedule A, hereunto annexed, shows a statement of the amounts due for principal and interest respectively, the period of the compu- tation of the interest, and its rate. Dated the day of , 18 . [Signatv/re of Referee.} Schedule " A." Exhibit No. 1. Bond executed by to , dated the day of ,1% , to secure the sum of dollars and interest. Exhibit No. 2. Mortgage executed by and his wife, to , to secure the payment of said bond ; same date ; record- ed the day of , 18 , in the ofiBce of the clerk of the county of , in Liber of Mortgages, page Exhibit No. 4. Assignment of said bond and mortgage from to ; dated the day of ? 18 , and recorded in the office of the said clerk of the county of , in Liber of Mortgages, page , on the day of , 18 . Exhibit No. 5. Policy of insurance in the Fire Insur- ance Company. Principal sum $ Interest thereon from to , being years, months and days, at six per cent, per annum Amount paid by plaintiff for insurance .... Interest thereon from to this date, at six per cent Amount due f Dated the day of , 18 . , [iSignaUire of Beferee.] No. 10. THE SAME. Whole a/movmt not dvs. Wo infants or absentees. {Title of the action.] To the Supreme Co,urt of the Statfe of New York : In pursuance of an order of this court, made in the above entitled action on the day of , 18 , by which it was referred to the undersigned referee, to ascertain and compute the amount due, and yet to become due, to the plaintiff on the bond and mortgage set forth in the complaint, including interest thereon to the date of this report, and also to ascertain the situation of the mort- gaged premises, and whether the same can be sold in parcels without prejudice to the interests of the parties, I, , the referee in the said order named, do report. 756 APPENDIX OF FOKMS. that I have ascertained and computed the amount due to the plaintiff upon and by virtue of the said bond and mortgage, and that the amount so due, with interest to the date of this report, is the sum of dollars. That I have also ascertained and computed the amount yet to be- come due to the plaintiff upon the said bond and mortgage, and that the amount which is not yet due, but which will hereafter become due thereon, including interest to the date of this report, is the sum of dollars. That the whole amount secured by the said bond and mortgage and still remaining unpaid, including interest thereon to the date of this report, is the sum of dollars. Schedule A, hereunto annexed, shows a statement of the amounts of principal due and to become due respectively, the amounts of in- terest thereon, the periods of computation of interest, and its rate. I do further report that I have ascertained the situation of the said - mortgaged premises, and am of opinion that the same cannot be sold in parcels without injury to the interests of the parties. My reasons for such opinion are as follows : \_Here state the reasons of the referee ; or, if the opinion of the referee is that a sale im parcels is desi/rahle, the reasons for such opinion should he given.'] The testimony upon which I have formed said opinion is hereunto annexed.' Dated the day of , 18 . [Signature of Referee.] Schedule " A." [Set out the hand and mortgage and other papers used as exhibits on the reference, as in the preceding form, and continue as fol- lows ;] Principal sum now due $ Interest thereon from to , being years, months and days, at six per cent, per annum Amount due $ Principal sum secured by said bond and mortgage, but not yet due $ Interest thereon from to , being years, months and days, at six per cent, per annum $ Amount to become due $ 1 The testimony of witnesses should be lutely essential if the reference is merely reduced to writing, and should be signed to compute amount due. Rule 30. ■ by them, though the signing is not abso- APPENDIX or FORMS. 757 Amount due, as above . . . Amount to become due, as above Wbole amount of the plaintiffs lien at this date . . $ Dated the day of , 18 . [Signaimre of Referee.] No. 11. THE SAME. Whole a/mownt due. Infants or absentees. \_Tith of the action.] In pursuance of an order of this court, made in the above entitled action on the day of , 18 , by which it was referred to the undersigned referee, to take proof of the facts and circum- stances stated in the complaint, and to examine the plaintiff or his agent on oath as to any payments which have been made, and to ascertain and compute the amount due to the plaintiff for principal and interest on the bond and mortgage set forth in the complaint, I, , the referee in said order named, do report that I have taken proof of the facts and circumstances stated in the complaint, and have examined the plaintiff [or, and have examined , the agent of the plaintiff] on oath as to any payments which have been made, and that I am of opinion and accordingly report, that the facts and circumstances stated in said complaint are true, and that no pay- ments have been made, except such as are duly credited in the said complaint. The said examination of the plaintiff [or, of , the said agent of the plaintiff], and the proofs taken by me of the facts and circum- stances stated in the complaint, except such of said proofs as were documentary, are annexed to this report. And I do further report, that I have ascertained and computed the amount due to the plaintiff for principal and interest on the bond and mortgage set forth in the complaint, and that I find and accordingly report, that there is due to the plaintiff for principal and interest on the said bond and mortgage, at the date of this my report, the sum of dollars. Schedule A, hereunto annexed, shows a statement of the amounts due for principal and interest respectively, the period of the compu- tation of the interest, and its rate. Dated the day of , 18 . [Signature of Referee.] Schedule " A." [Insert Schedule "A " as vn the precedimg form.] 758 APPENDIX OF FORMS. No. 12. JUDGMENT OP FORECLOSURE AND SALE. 'Whole awMV/nt heing due. At a special term, efc. \_Title of the action, qvoing the \ ncmies of all of the paHies > thereto.'] ) On reading and filing affidavits of service and notices of appear- ance, proving the due service of the summons on all of the de- fendants in this action ; and the affidavit of X. T., attorney for the plaintifE, showing that none of the defendants are infants or absen- tees [or, that none of the defendants are infants except the defendant , and that none of the defendants are absentees except the defendant , who has duly been served with the summons by publication thereof] ; that the time to answer has expired as to aU of the defendants, and that no answer or demurrer has been put in to the complaint in this action [except the answer of the defendant , who is an infant, and whose answer by his guardian does not deny any of the allegations of the complaint, and except also the answer of the defendant , the issues raised by which have been duly tried at a special term of this court, before Hon. , one of the justices thereof, and a decision therein having been rendered for the plaintiff and duly filed], and that due notice of the pendency of this action was duly filed in the office of the clerk of the county of , on the day of 18 , \if computation is hy the court on the trial of am, issue, and the court on such trial having ascertained and computed the amount due to the plaintiff, for principal and interest, on the bond and mortgage set forth in the complaint, to be the sum of dollars, and interest thereon from the day of , 18 , the date when said computation was made], and on reading and filing the report of , Esq., the referee to whom it was referred by an order of this court, (*) to ascertain and compute the amount due to the plaintiff, for principal and interest on the bond and mort- gage set forth in the complaint \if any of the defendants a/re infants or absentees, contimue in the language of the order of reference : and to take proof of the facts and circumstances stated in the complaint, and to examine the plaintiff or his agent on oath, as to any payments ■which have been made], by which report, bearing date the day of , 18 , it appears [m the case ofimfa/nts or absentees: that the facts and circumstances stated in said complaint are true, and that no payments have been made except such as are duly credited in the said complaint and] that the sum of dollars was due thereon at the date of said report ; and on motion of X. Y., attorney for the plaintiff. It is ordered, that the said report be, and the same hereby is, in all APPENDIX OF FORMS. 759 things confirmed; and on like motion as aforesaid, it is adjudged that the mortgaged premises described in the complaint in this action as hereinafter set forth, or so much thereof as may be sufficient to raise the amount due to the plaintiff for principal, interest, and costs, and which may be sold separately without material injury to the par- ties interested, be sold at public auction in the county of , by or under the direction of , Esq., of the city of , counselor at law, who is hereby appointed a referee for that purpose [or, by or under the direction of the sheriff of said county] ; that the said referee [or sheriff] give public notice of the time and place of such sale, according to law and the practice of this court ; that either or any of the parties to this action may purchase at such sale ; that the said' referee [or sheriff] execute to the purchaser or purchasers, a deed or deeds of the premises sold ; that out of the moneys arising from such sale, after deducting the amount of his fees and expenses on such sale, and any lien or liens upon said premises so sold, at the time of such sale, for taxes or assessments, the said referee [or sheriff] pay to the plaintiff or to his attorney, the sum of dollars and cents, adjudged to the plaintiff for costs and charges in this action, with interest from the date hereof, including an extra allow- ance of per cent, on the amount reported due as aforesaid, which is hereby granted and allowed to the plaintiff, and that he also pay to the plaintiff or to his attorney, the amount so reported due as aforesaid, together with the legal interest thereon from the date of said report, or so much thereof as the purchase money of the mort- gaged premises will pay of the same, take a receipt therefor and file it with his report of sale ; that he deposit the surplus money, if any, with the treasurer of the said county of , [or, if the property is situated in the city of New TorTc, with the chamberlain of the city of New York] to the credit of this action, to be drawn only on the order of the court signed by the clerk and a judge thereof, within five days after he receives the same ; that he make a report of such sale and file it with the clerk of this court with all convenient speed ; that if the proceeds of such sale be insufficient to pay the amount so reported due to the plaintiff, with the interest and costs as aforesaid, the said referee [or sheriff] specify the amount of such deficiency in his report of sale, and that the defendant pay the same to the plaintiff, and that the purchaser or purchasers at such sale be let into possession on production of the referee's [or sheriff's] deed. And it is further adjudged, that the defendants, and all persons claiming under them or any or either of them, after the filing of the aforesaid notice of pendency of this action, be forever barred and foreclosed of all right, title, interest, and equity of redemption in the said mortgaged premises so sold, or any part thereof. The following is a description of the mortgaged premises herein- before mentioned : [Insert description of the property as contained in the moi'tgage and im the complaint.] 760 APPENDIX OF FOKMS. No. 13. THE SAME. Pa/rt only heing due. Premises to he sold in one pared. [As in precedimg form. No. 12, to (*).] To ascertain and compute the amount due and yet to become due to the plaintiff on the bond and mortgage set forth in the complaint, including interest thereon to the date of his report, and also to ascer- tain the situation of the mortgaged premises, and whether the same can be sold without prejudice to the interests of the parties ; bj which report, bearing date the day of , 18 . it appears that the amount due to the plaintiff, with interest to the date of said report, is the sum of dollars, and that the amount which is not yet due to the plaintiff, but which will hereafter become due to him, including interest to the date of said report, is the sum of dollars, and that the whole amount secured by the said bond and mortgage, and still remaining unpaid, including interest thereon to the date of said re- port, is the sum of dollars, and that the said mortgaged prem- ises cannot be sold in parcels without injury to the interests of the parties, for the reason that \insert reason as contained in the referee's report]. ISTow, on motion of X. T., attorney for the plaintiff, It is ordered [Oontinvs as in preceding form. No. 12, except that the direction to pay tlie " amount due " should he changed to a sim- ilar direction to~\ pay to the plaintiff or his attorney the whole amount so reported to be secured by the said bond and mortgage, and still remaining unpaid, together with legal interest, etc. [Follow form No. 12, hut hefore add/mg the description of the property, insert the following ;] And it is further adjudged that, in case the amount reported as actually due to the plaintiff, with interest, and the costs of this action, shall be paid before such sale, the plaintiff shall be at liberty, at any time hereafter when any principal sum or interest secured by said bond and mortgage shall become due, to apply to the aforesaid ref- eree, who is hereby continued referee for that purpose, under and in pursuance of this judgment, and obtain a report of the amouiit which shall then be due ; to the end that, upon the coming in and confirm- ation of such report, a judgment may be made for a sale of the said premises to satisfy the amount which shall then be due, with interest, and the costs of such report and sale. And it is further adjudged that, in case the said premises shall be sold under this judgment, and shall not produce sufficient to satisfy the amount so reported as being secured by the said bond and mort- gage and still remaining unpaid, with interest and the costs of this action and of such sale, the plaintiff may, at any time thereafter, when any future instalment of principal or interest on said bond and mort- gage shall become due, apply to this court for an execution against APPENDIX^ or FOEMS. 761 the said defendant , who is personally liable for the pay- ment of the deht secured by the said mortgage, for the amount which shall then be due, with interest and the costs of such application. The following is a description of the mortgaged premises herein- before mentioned : [Insert description.'] No. 14. THK SAME. ] Part only heing due. Premises to he sold in separate parcels. [As in preceding Form No. 13, except that the opinion of the referee to the effect that the said premises can be sold in parcels with- out injury to the interests of the parties, should ie stated according to the fact. The addition to Form No. 12 im^mediately before the description should he as follows .•] And it is further adjudged, that the plaintiffs be at liberty at any time hereafter, as any instalment of principal or interest secured by said bond and mortgage shall become due, to apply to the aforesaid referee, who is hereby continued referee for that purpose, under and in pursuance of this judgment, and obtain a report as to the amount which shall then be due, to the end that, upon the coming in and confirmation of such report, a judgment may be made for a sale of the residue of said premises not sold under this judgment, to satisfy the amount which shall then be due, with interest, and the costs of such report and sale. And it is further adjudged, that in case the said premises shall all be sold under this judgment, and shall not produce sufficient to satisfy the amount so reported as being secured by the said bond and mort- gage and still remaining unpaid, with interest and the costs of this action and of such sale, the plaintiff may, at any time thereafter, when any future instalment of principal or interest on said bond and mortgage shall become due, apply to this court for an execution sgiinst the said defendant , who is personally liable for tne payment of the debt secured by the said mortgage, for the amount which shall then be due, with interest and the costs of such application. The following is a description of the mortgaged premises herein- before mentioned, and specifies the order in which the said several parcels are to be separately sold, to wit : ■I. The lot or parcel to be sold first is the lot or parcel bounded as follows : [Insert description.'] II. The lot or parcel to be sold next or second is the lot or parcel bounded as follows : [Insert description.] 763 APPENDIX OF FORMS. No. 15. Provision to be inserted in Judgment for a Sale in Separate Parcels in the Inyerse order of Alienation.' _ \_Insert at the end of the judgment immediatel/y 'before the descrip- tion of the jpropert/y ;] And it is further adjudged, that the said referee summon before him all of the parties who have appeared in this action, and that he then take proof of the order and manner of alienation of the mort- gaged premises, and that if it shall appear to the said referee that separate parcels of the said mortgaged premises have been conveyed or incumbered by the mortgagor or by those claiming under nim subsequent to the hen of the plaintiff's mortgage, the said referee shall sell the said mortgaged premises in parcels in the inverse order of alienation according to the equitable rights of the parties, who are subsequent grantees or incumbrancers, as such rights shall be made to appear to such referee. No. 16. Judgment for Deflciency, wliere one of tlie Defendants liolds the position of a Snrety. And it is further adjudged, that if after applving all moneys prop- erly applicable thereto, there shall remain a deficiency of the amount due to the plaintiff for principal, interest, and costs, tor which under the foregoing provisions the defendant [the primoipal debtor] shall be personally liable, and if upon the issuing of an execution against the property of the said defendant to the sheriff of the county in which he resides, or of the county where he last resided in this State, said execution be returned unsatisfied in whole or in part, the defendant {the sv/rety], upon the return of such execution, pay so much of said deficiency and of the interest thereon, as shall not have been collected from the said {jtrinoipal debtor], and that the plaintiff have execu- tion therefor. And it is further adjudged, that if the said [surety] shall pay the amount thus adjudged against him personally, or if the same is col- lected out of his property, he shall have the benefit of this judgment against the said [principal debtor], for the purpose of enabling him to obtain remuneration to the same extent, with interest, but no fur- ther ; either by a new' execution against the property of the said [principal debtor], or by bringing an action thereon as he may think proper. " Ante, § 963. APPENDIX OF FOEMS. 763 No. 17. TTiideitakiiig on Appeal from Judgment of Foreclosure to stay Proceedings.' SCPEEME COTJET. A. B., Mespondent, against C. D., impleaded with others, Appella/iit. "Whereas, on the day of , 18 , in the Supreme Court, county of , A. B., the above named respondent, re- covered a judgment against C. D., the above named appellant, and others, for the foreclosure of a mortgage and the sale of certain real estate in the county of , to satisfy the sum of $ , adjudged to be due thereon, together with the further sum of $ for costs of this action, as by the said judgment, dated at Special Term, on the day of J 18 J and entered in the office of the clerk of the county of on the day of j 18 , will more fully and at large appear ; And the appellant, feeling aggrieved thereby, intends to appeal therefrom to the General Term of this Court ; Now, therefore, we, J. K., residing at , and L. M., re- siding at , do jointly and severally, pursuant to the statute in such case made and provided, undertake that the appellant will pay all costs and damages which may be awarded against the appellant on said appeal, not exceeding five hundred dollars, and do also under- take (*) that the appellant will not, while in possession of the said property, commit, or sufEer to be committed, any waste thereon ; and that, if the said judgment so appealed from is affirmed, or the appeal is dismissed, he will pay the value of the use or occupation of the property, or the part thereof as to which the said judgment is affirmed, from the time of taking the appeal until the delivery of the possession thereof, pursuant to the judgment, not exceeding the sum of dollars.^ [Signed] J. K. L. M. [Add affida/oits hy sureties as to tJieir sufficiency, and certificate as to their achnowledgment of execution, in the usual formJ] ' See ante, §§ 838, 839. which should be obtained on a notice of ' This amount must be fixed by an not less than two days to the plaintiff's order of a judge of the court below, attorney. Ante, § 838. 764 APPENDIX OF FOEMS. No. 18. THE SAME. ANOTHER EOKM OF UNDERTAKING.' [J.S m Wo. IT to the (*) cmd continue ,•] That if the said judgment so appealed from is alBfirmed, or the appeal is dismissed, the appellant will pay any deficiency which may occur upon the sale, in discharg- ing the sum to pay which the sale is directed, with interest and the costs, and all expenses chargeable against the proceeds of the sale, not exceeding the sum of dollars.'' No. 19. NOTICE OF SALE UNDER THE JUDGMENT. [Title of the aotion.] In pursuance of a judgment of foreclosure and sale, made and en- tered in the above entitled action, bearing date the day of , 18 ,1, the undersigned, the referee in said judgment named [or, the sheriff of the county of ], will sell at public auction, at , in the city of , on the day of , 18 , at o'clock in the noon, by , auctioneer, the following de- scribed premises : [Insert description.~\ Dated, etc. [Signature of Referee or Sheriff.'] X. Y., PlaintifiE's Attorney. No. 20. TERMS OF SALE. [Title of the action.] The premises described in the annexed advertisement of sale will be sold under the direction of , referee [or the sheriff of county], upon the following terms : Dated , the day of , 18 . 1st. Ten per cent, of the purchase money of said premises will be re- quired to be paid to the said referee [m' sheriff] at the time and place of sale, and for which the referee's [or sheriff's] receipt will be given. 2d. The residue of said purchase money will be required to be paid to the said referee [or sheriff] at his office, No. street, in the city of , on the day of ? 18 , when the said referee's [or sheriff's] deed will be ready for delivery. 3d. The referee [or sheriff] is not required' to send any notice to the purchaser ; and if he neglects to call at the time and place above ' See. ante, §§ 838, 839. ' This amount must be fixed by a judge of the court below, as in preceding form. APPENDIX OF FORMS. 765 specified, to receive his deed, he will be charged with interest thereafter on the whole amount of liis purchase, unless the ref- eree [or sheriff] shall deem it proper to extend the time for the completion of said purchase. 4th. All taxes, assessments, and other incumbrances, which at the time of sale are liens or incumbrances upon said premises, will be allowed by the referee [or sheriff] out of the mirehase money ; provided the purchaser shall, previously to the^e^livery of the deed, produce to the referee [or sheriff] proof of such liens and duplicate receipts for the payment thereof. 5th. The purchaser of said premises, or any portion thereof, will at the time and place of sale, sign a memorandum of his purchase, and pay, in addition to the purchase money, the auctioneer's fee of ten dollars, for each parcel separately sold. 6th. The biddings will be kept open after the property is struck down, and in case any purchaser shall fail to comply with any of the above conditions of sale, the premises so struck down to him vrill be again put up for sale under the direction of said referee [or sheriff] under these same terms of sale, without application to the court, unless the plaintiff's attorney shall elect to make such application ; and such purchaser will be held liable for any deficiency there may be between the sum for which said prem- ises shall be struck down upon the sale, and that for which they may be purchased on the resale, and also any costs or expenses occurring on such resale. 1th. [Where there -is a prior inciwibrcmce.] The said premises will be sold subject, however, to a mortgage for dollars, and interest thereon from [Signature of Referee or Sheriff. 1 Memoeaitoum of Sale. I have this day of , 18 > purchased the premises de- scribed in the above annexed printed advertisement of sale, for the sum of dollars, and hereby promise and agree to comply with the terms and conditions of sale of said premises, as above mentioned and set forth. Dated the day of , 18 . M. N. [purchaser.] Received from M. N., the sum of dollars, being ten per cent, on the amount bid by him for property sold by me under the judg- ment in the above entitled action. $ Dated the day of , 18 . [Signature of Bef&ree or Sheriff.] 766 APPENDIX OF FOEMS. No. 21. RBFEKEE'S REPORT OF SALE. \^Title of the action.] To the court of : I , the referee named in the judgment in this action, dated the day of 5 18 , do respectfully report, that the mort- gaged lands and premises mentioned in the said judgment were sold at public auction under my direction and Superintendence on the day of , 1 8 , at , in the city of , and county of ; that on such sale M. N. became the purchaser of said premises for the sum- of dollars, that being the highest sum bid- den for the same. And I further report, that due notice of the time and place of such sale had previously been given and published according to law and the rules and practice of this court, as appears by the affidavits and papers hereunto annexed. [^ the premises were sold m sepa/rate parcels, set out the mamner of the sale, the order im, which thepa/rcels were sold amd the amwwnt prod/aced ly each.] And I further report, that I have received from the said M. N. the sum of dollars, being the said purchase money, of dollars less the sum of dollars, which had been paid by the said M. N. for taxes and assessments which were liens upon said premises so sold at the time of such sale, and which moneys so paid by him for taxes and assessments, were allowed by me out of said purchase money, and that I have executed and delivered to him a deed of conveyance of the said lands and premises. Duplicate receipts, showing the payment of said taxes and assessments, are hereunto annexed. And I further report, that I have paid out and disposed of said moneys as follows, to wit : I have retained the sum of dollars for my charges and ex- penses of said sale. I have paid to X. T., the attorney for the plaintifiE, the sum of dollars, which was adjudged to the plaintiflE for costs, and charges, and allowances in this action, for which he has given his re- ceipt, which is hereunto annexed. I have paid to X. Y., the attorney for the plaintiff, the sum of dollars, being the amount \pr, on account of the amount] due to the plaintiff for principal and interest, for which he has given his receipt, which is hereunto annexed. I nave deposited the surplus of said money remaining after the foregoing deductions and payments, being the sum of dollars, with the treasurer of the county of [or, im, the city of New YorTc, with the chamberlain of the city of New York], to the credit of this action, for which he has given his receipt, wMch is hereunto annexed. APPENDIX OF FORMS. 767 [And I further report, that the proceeds of said sale were insuffi- cient to pay the amount due to the plaintiff, and that the amount of the deficiency is the sum of dollars, with interest thereon from the date of this report.] Dated the day of , 18 . [Signature of Referee.'l No. 22. OKBER CONTIRMING REPORT OF SiXE. At a special term, etc. [Title of the action.] The report of , Esq., the referee appointed by the judgment in this action to sell the mortgaged premises, having been duly filed in the office of the clerk of the county of , on the day ,18 , on reading and filing due notice of the filing of said report, with due proof of the service thereof on all of the parties who have appeared in this action, and eight days having elapsed since said notice of filing said report was served, and no exceptions having been filed thereto, on motion of X. Y., attorney for the plaintiff, It is ordered, that said report be absolute, and that it stand as in aU things confirmed. No. 23. REQUEST TO DOCKET JUDGMENT FOR DEFICIENCY. [Title of the action.} SiE : Please docket a judgment in your office in favor of A. B., the above named plaintiff, and against the defendants C. D., E. F., and I. K., for th6 sum of dollars and cents, and inter- est thereon from the day of > 18 , for deficiency. Judgment of foreclosure and sale filed in your office on the day of , 18 . Keport of sale of , Esq., the referee named in said judg- ment filed in your office on the day of , 18 . Dated, etc. X.T., Plaintiff'' s Attorney. To E. S., Esq., Clerk of County. No. 24. EXECUTION FOR DEFICIENCY. The People of the State of New York to the Sheriff of the County of , Greeting : Whereas, by a certain judgment made in the court, and en- 768 APPENDIX OF FORMS. tered in the office of the clerk of the county of , dated on the day of , 18 , in a certain action wherein A. B. is plaintiff, and C. D., E. F., I. K. and others are defendants, it was among other things ordered and adjudged that the mortgaged prem- ises described in said judgment should be sold by and under the direction of , Esq., as referee \or, the sheriff of the county of J, that said referee \ot sheriff] should, out of the proceeds of said sale, retain the costs and expenses of said sale, and pay tlie costs and allowances of the plaintiff and the amount reported due to the plaintiff for principal and interest, or so much thereof as the purchase money of the mortgaged premises would pay of the same ; and that if the moneys arising from said sale should be insufficient to pay the amount so reported due to the plaintiff, with the interest and costs as aforesaid, the said referee \or sheriff] should specify the amount of such deficiency in his report of sale, and that the defend- ants C. D., E. F., and I. K. should pay the same to the plaintiff. And whereas, the said referee has duly filed his report of sale in the office of the clerk of county, from which it appears that the money arising from said sale was insufficient to pay the amount so reported due to the plaintiff, with interest and costs as aforesaid, and that the amount of such deficiency is the sum of dollars, and interest thereon from the day of j 18 j a-iid the report of said referee having been duly confirmed. And whereas, a judgment for said deficiency in favor of A. B., the said plaintiff, and against the said defendants C. D., E. F., and I. K., for the sum of dollars and cents, and interest thereon from the day of ) 18 , was on the day of , 18 , duly docketed in the office of the clerk of the county of , and the said sum of dollars and cents, and interest there- on from the day of , 18 , is now actually due thereon. Therefore we command you, that you satisfy Che said judgment out of the personal property of the said judgment debtors within ypur county ; or, if sufficient personal property cannot be found, then out of the real property in your county belonging to such judg- ment debtors on the day when the said judgment was so docketed in your county, or at any time thereafter, in whose hands soever the same may be, and return this execution within sixty days after its re- ceipt by you, to the clerk of the county of Witness, the Hon. , a justice of said court, at the court house in the city of , the day of , 18 . X.T., Plmntiff^s Attorney. APPENDIX OF FORMS. 769 No. 25. AFFIDAVIT ON APPLICATION FOR ORDER FOR POSSESSION.' \_Title of the action.^ State of New Yoek, ) cohntt of • ) ' ' M. N., being duly sworn, says that this action was brought for the foreclosure of a mortgage on certain real estate in the county of ; that judgment of foreclosure and sale was entered herein on the day of j 18 , , Esq., of the city of , counselor at law, being therein appointed the referee to sell, and said judgment containing the usual provision that the pur- chaser be let into possession on the production of the referee's deed ; that due notice of said sale was given by said referee, and that, on the day of 5 18 5 the mortgaged premises were duly sold at public auction by said referee to this deponent for the sum of dollars, that being the highest sum bidden for the same ; that this de- ponent has duly paid the said purchase money, and that the said ref- eree has also executed, acknowledged, and delivered to deponent a deed of conveyance of said mortgaged premises ; [that the report of sale of said referee was duly filed in the office of the clerk of this court on the day of > 18 , and that said report has been duly confirmed] ;" that on the day of » 18 , deponent went to the said mortgaged premises and found C. D., who is one of the defendants in this action, in possession thereof ; that he then pro- duced and showed to said C. D. the said deed of said referee, and de- manded to be let into possession by virtue thereof, but the said C. D. then refused and still refuses to surrender the said premises, or any part thereof, and stiU withholds possession thereof from deponent. Sworn, etc. [Signature.^ ORDER FOR POSSESSION. At a special term, etc. [Title of the action.] On reading and filing the affidavit of M. N., the purchaser at the sale of the mortgaged premises in this action, and on aU of the papers and proceedings herein, including the judgment of foreclosure and ' An order requiring the sheriff to put it is not believed to be indispensable, the purchaser into possession is a substi- Rule 6i provides that the judgment shall tute for the writ of assistance previously be "that the purchaser at such sale be used. Ante, § 1032 et seq. Code of Civ. let into possession of the premises on Pro. § 1675. production of the deed." '^ The clause in brackets is proper, but 49 770 APPENDIX OF FOEMS. sale entered herein in the office of the clerk of the county of , on the day of j 18 , and the report of sale of , Esq., the referee to sell, filed in said office on the day of , 18 , [and the order confirming said report entered herein on the day of ,18], and on the deed from said referee to said M. N., which said deed bears date on the day of , 18 , and on the notice of this motion, with due proof of the service thereof on C. D., who is now in possession of the said premises ; after hearing , Esq., attorney for the said M. N., the purchaser aforesaid, and , Esq., attorney for said C. D., in opposition [The appUcation may also le made ex jpa/rte. See ante, § 1033.] It is ordered that the sheriff of the county of be and he hereby is required forthwith to put the said M. JST. into possession of the said premises, and that this order be executed as if it was an exe- cution for the delivery of the possession thereof. The said premises are described as follows : [TaJee in descripHon.] No. 27. APFIDAVIT ON WHICH TO APPLY FOR A RECEITER OF RENTS. [Title of the action.] County of , ss. : A. B., being duly sworn, says that be is the plaintiff in this action. That this action is brought to foreclose a mortgage for dollars, and interest thereon from , on a plot of land with a dwelling-house thereon, situate and known as number street, in the city of That the said mortgage is a second mortgage, and is inferior as a lien to a mortgage for dollars upon the same premises, held by , upon which there is now unpaid and owing, interest from That there are unpaid taxes and assessments on said premises, amounting at this date to the sum of about dollars, as nearly as can be ascertained by deponent, being as follows : tax for the year 18 , dollars, and interest thereon, and an assessment for paving street, dollars, and interest thereon. That the whole amount of the incumbrances on said property, in- cluding the plaintifi's claims and the said prior mortgage and the costs and expenses of this action and of a sale, wiU amount to the sum of about dollars. That the said mortgaged premises are an inadequate and insufficient security for the plaintiff's demand, and that they are not worth more than the sum of dollars, as deponent believes. That the grounds of deponent's belief are [set out fully the reasons for fixing the value of the property at the sum namec[\. That the defendant is the only person who is personally APPENDIX OF FOEMS. 771 obligated for the payment to the plaiiiti£E of the said mortgage debt, and that the said defendant is entirely irresponsible and insolvent. {_State reason for believing this to he so, thus .*] That there are judg- ments against said defendant which are unsatisfied of record, and that the defendants and are holders and owners of such judgments, and were made parties to this action for that reason. That said mortgaged premises are rented to the defendant [or to one ] at the price, as deponent is informed and be- lieves, of dollars per month, and that the said defendant [mortgagor] is collecting and receiving such rents. Sworn, etc. [Signatmfe.] No. 28. ORDER APPOINTING A EECEITER OF RENTS. At a special term, etc. [Title of the action.] On reading and filing the afiidavit of A. B. and notice of this mo- tion, with due proof of the service thereof, and on the complaint which is filed herein, after hearing X. T., attorney for the plaintiff, in support of the motion, and , attorney for the defendant , in opposition thereto. It is OEDEEED that M. IS., Esq., of the city of , coun- selor at law, be and he hereby is appointed receiver 'of the rents and profits of the mortgaged premises described in the complaint ; that, before entering upon the duties of his trust the said receiver execute, to the people of this State, and file with the clerk of this court, his bond, with two sufficient sureties, to be approved by a justice of this court, in the penal sum of dollars, conditioned for the faithful performance of his duties as such receiver, and that the plaintiff have $10, costs of this motion. No. 29. BOND OF RECEIVER. [Title of the action.] Know all men by these presents, that we, M. N., of the city of , and O. P. and E. S., of the same place, are held and firmly bound unto the people of the State of New York, in the sum of dollars to be paid to the said people of the State of New York ; for which payment well and truly to be made, we bind our- selves, our heirs, executors, and administrators, jointly and severally, firmly by these presents. Sealed with our seals ; dated the day of ,18 . Whereas, by an order of the court, entered in the. above entitled 772 APPENDIX OP FOEMS. action, on the day of > 1-8 , the above bonnden M. N. was appointed receiver of the rents and profits of the mortgaged premises described in the complaint. Now the condition of this obligation is such, that if the above bonnden M. N. shall, according to the rules and practice of the court, duly file his inventory, and annually, or oftener if thereunto re- quired, duly account for what he shall receive or be in charge as receiver in the said action, and apply what lie shall receive or have in charge, as he may from time to time be directed by the court ; and if he shall faithfully perform his duties as such receiver, in all things according to the true intent and meaning of the aforesaid order, then this obligation to be void, otherwise to remain in full force. Sealed and delivered ) [Signatures and seals^X in the presence of j County of , ss. : 0. P. and E. S. being severally and duly sworn, each for himself says, that he is a householder \or freeholder] in this State, and is worth dollars \dovhle the amount of the penalty of the bond] over and above his debts and liabilities, and property exempt by law from execution. Sworn, etc. [Signatures.] County of , ss. : On the day of 5 18 , be- fore me personally came M. N., O. P., and E . S., to me known to be the individuals described in, and who executed the foregoing instru- ment and severally acknowledged to me that they executed the same. Indorsed. Approved. [Signature of Justice.] [Signature of officer.] No. 30. NOTICE, OF ClAIM TO SURPLUS. [Title of the action.] Sir : Take notice that P. S., who resides at , in the city of , is entitled to the surplus moneys, or some part thereof, arising from the sale of the mortgaged premises under the judgment of foreclosure and sale entered in this action. The nature and extent of the claim of the said R. S. is as follows : [state briefly, for ex- ample,] that the said R. S. is the owner of a judgment for dollars, and interest from , obtained by him in the county court of county, against the defendant C. D., on the day of ) 18 ) while said defendant was the owner of the ■equity of redemption of s^d mortgaged premises, no part of which APPENDIX OP POEMS. 773 has been paid ; and the said K. S. claims that the said judgment is a first lien upon said surplus moneys. Dated the day of , 18 . To J. G., derh. E. S., claimcmt, (By M. N., his attorney.) No. 31. Affidavit on Applying for Beference as to Claims for Surplus. \_Title of the action.'] County of , ss. : M. N. being duly sworn says, that he is the attorney for E. S., who is a party to this action [or who had a lien on the mortgaged premises at the time of the sale in this action] ; that the report of sale of , Esq., who was appointed a referee to sell in and by the judgment in this action, has been filed in the office of the clerk of this court ; that by such report it appears that, after satisfying the claims of the plaintiff there remains a surplus of dollars, which has been deposited with the treasurer of county [or m the city of New York, with the chamberlain of the city of New York], to the credit of this action, and that the said E. S. has filed with the clerk of this court a notice, stating that he is entitled to such surplus moneys or some part thereof, and the nature and extent of his claim. That deponent has examined all of the official searches made in the process of this cause and filed with the judgment roll, and that the following are all of the unsatisfied liens which appear by such official searches, to wit : [sfpecify liens.] Deponent further says, that no other unsatisfied Kens axe known to him to exist. Sworn, etc. M. N. No. 32. Notice of Motion for Keference as to Claim for Surplus. [Title of the action.] Take notice, that on the annexed affidavit of M. N., and on all of the papers and proceedings in this action, the claimant, E. S., wiU apply to this court, at a special term thereof, to be held at , on the day of 18 , at o'clock in the noon of that day, or as soon thereafter as counsel can be heard, for an order of reference, to ascertain and report the amount due to said E. S., or to any other person, which is a lien upon the surplus moneys in this action, and to ascertain the priorities of the several liens thereon, and for such other or further relief as may be just. Dated, etc. M. K, Attorney for Clamnamt H. S. [Address to the owner of the equity of redem/ption and to every party who appeared m the coMse, or who shall have filed a notice of 774 APPENDIX OF FORMS. claim with the clerh "previous to the entry of the order of reference^'' If suoh a notice is filed after the service of notice of application for the reference on the othsr pa/rties, an adjournment of the motion may he necessary. 'Y No. 33. ORDER OF REFERENCE AS TO CLAIMS FOR SURPLUS. At a special term, etc. [Title of the action.] On reading and fiKng the aiBdavit of M. N., and notice of this motion, with due proof of the service thereof, after hearing M. N., attorney for the claimant E.. S., and on his motion, and , counsel for , in opposition thereto \or no one appearing in opposition thereto]. It is ordered, that it be referred to W. S., Esq., of , to ascertain and report the amount due to E. S., or to any other person, which is a lien upon the surplus moneys in this action ; to the end that on the coming in and confirmation of the report on such refer- ence, such further order may be made for the distribution of such surplus moneys, and as may be just. \_If unsatisfied liens appear from tJie searches on file, or are hwwn to exist, the court alwuld designate the manner of service of notice upon the Jiolders of such liens ; for example:] And it is further ordered, that in addition to the other notices re- quired by the rules of this court, notice of the proceedings on such reference be given to and either by service on them personally, or by leaving the same at their respective places of residence, not less than days prior to the hearing. No. 34. SUMMONS TO ATTEND REFERENCE AS TO SURPLUS. \_As in No. Y, with the following .•] Undeeweiting. To ascertain and report the amount due to R. S., or to any other person, which is a lien upon the surplus moneys in this action, and to ascertain the priorities of the several liens thereon. [Signature of Beferee.'] [Address to every party who appeared m the cause, or wlw shall ha/oe filed a notice qf claim with the clerh previous to the enl/ry of the order of reference, amd also to the owner of the equity of redemp- tion am,d to aU persons who are known to ha/oe unsatisfied liens. Y ' See Rule 64. Ante, § 1066. * See ante, § 1066. APPENDIX OF FORMS. 775 No. 35. Certificate of Clerk a.s to who have Appeared and Tiled Claims. [Title of the action.] I certify that the following persons have appeared in the above entitled action by their respective attorneys : A. B. by X. T., his attorney ; 0. D. by J. F., his attorney ; and E. S. by M. N., his attorney. I fui'ther certify that there are no notices of claim to surplus money on file in the above entitled action, except the claim of K. S., by M. N., his attorney. Dated at , this day of , 18 . W. W., Clerk No. 36. KEFEKEE'S KEPORT. \_Title of the aotion.] To the court of I, , the referee appointed by an order of this court, entered in the above entitled action, on the day of , 18 , to ascertain and report the amount due to R. S., or to any other person, which is a lien upon the surplus moneys in this action, and to ascertain the priorities of the several liens thereon, do respectfully report : That T caused all parties who have appeared in this action, and all persons who have filed notices of claim upon said surplus moneys, and all persons who were known to have liens thereon, to be sum- moned to appear before me; as appears by the certificate of the clerk, which is hereunto annexed, showing who have appeared in the action and filed notices of claim, and the affidavit of M. N., attorney for the claimant E. S., showing what liens appear by the searches on file, and the summons and proof of service thereof, which is also hereunto annexed, and that on the hearing I was attended by M. N., attorney for the claimant E. S., and by , attorney for the claimant . The testimony of the witnesses upon such hear- ing was reduced to writing, and was signed by them ;' and such testi- mony and all evidence, excepting such of it as was documentary, is annexed to this report. From such testimony and evidence I make the following Findings of Fact. I. That the amount of the surplus moneys in this action is dollars, as appears by the certificate of the treasurer of county ' Rule 30. 776 APPENDIX OW POEMS. [or the chamberlain of the city of New York], which is hereunto annexed. II.. [Set forth the further findings of fact of the referee as in the trial of issues in an action^ And from the foregoing findings of fact, I further find the fol- lowing Conclusions op Law. I. That there is due and owing to the said claimant R. S., the sum of dollars, and interest thereon from , amounts ing at the date of this report to the sum of dollars, upon and by virtue of the said judgment recovered by him against the said 0. D., as aforesaid, and that the said amount is the first Hen on the said surplus moneys in this action. II. [Continue in the order in which the liens are fovm,d until the wliolefwad is disposed of.] Dated, etc. W. S., Referee. Fees, $ No. 37. Notice of motion to confirm Report and distribnte the Sarpla.«. [Title of the action.] \ Sirs : Take notice that the report of , Esq., the referee ap- pointed herein to ascertain and report the amount due to E. S., or to any other person, which amount is a lien on the surplus moneys in this action, and to ascertain the priorities of the several liens thereon, was this day duly filed in the oflBce of the clerk of the county of Take notice also that upon said referee's report, and upon all of the testimony and papers annexed thereto, the claimant K. S. will apply to this court at a special term thereof, to be held at , on the day of ? 18 > at o'clock in the noon, or as soon thereafter as counsel can be heard, [more thorn eight days' notice should he given, so as to allow full eight days for the filing of excep- tions, under Rule 30,] for an order confirming said report and di- recting the treasurer of county [or the chamberlain of the city of New Tork] to pay to the claimant K. S., or his attorney, the sum of dollars, and interest thereon from the day of , 18 , the date of said report, out of said surplus moneys, together with an allowance by way of costs in these proceedings, and for such other or further relief as may be just. Dated, etc. [Signature of Attorney.] APPENDIX OP FOEMS. 777 No. 38. Order conllrming Report of Referee and directing distribntion of Surplus Moneys. \_l'itle of the action.'] At a special term, etc. On the report of , Esq., the referee appointed herein to as- certain and report the amount due to E. S., or to any other person, which amount is a hen on the surplus moneys in this action, and to ascertain the priorities of the several liens thereon, which report was filed in the office of the clerk of this court, on the day of , 18 , and on all of the testimony and papers annexed to said report and filed therewith ; and on reading and filing the notice of filing said report and of this motion, with due proof of the service thereof, on aU parties entitled to such notice, and on the exceptions of the claimants and , which have been filed herein ; after hearing M. N., attorney for the claimant E. S., in support of the motion, and , attorney for the claimant , and , attorney for the claimant , in opposition thereto. It is ordered, that the said exceptions be overruled, and that the said report of the said referee be and the same hereby is in all things confirmed. It is further ordered, that the treasurer of county \or the chamberlain of the city of New York] pay out and distribute the moneys in his hands to the credit of this action, after deducting therefrom the fees and commissions allowed to him by law, as fol- lows and in the following order of priority : Feest, That he pay to , Esq., referee in these proceedings, the sum of dollars, for his fees as such referee. Second, and next. That he pay to X. Y., the attorney for the claim- ant K. S., the sum of dollars, as an allowance by way of costs in these proceedings. Third, and next, That he pay to the claimant R. S., or to his attor- ney, X. Y., the sum of dollars, and interest thereon from the day of 5 18 , the date of said referee's report. FonETH, and next, That he pay to , the attorney for the claimant , the sum of dollars, as an allowance by way of costs in these proceedings. Fifth, and next. That he pay to the claimant , or to his at- torney , the balance of said moneys. No. 39. COMPLAINT IN ACTION FOR STRICT FORECLOSURE.' {Commence as in action to foreclose iy a sale, following Form No. 1 to and including paragraph V., so far as that form may apT^y-^ , ' This form is prepared with special a de'fect in a previous foreclosure, a lien reference to a case where, by reason of upon the property has not been extin- 778 APPENDIX OF I'OEMS. VI. Tliat thereafter the said \the person who owned the mortgage which has been defectively Jhreclosed] commenced an action in the court, county of , against C. D., E. F., G. H., and I. K. and L. his wife, for the foreclosure of the said mortgage, and for the sale of the said mortgaged premises to satisfy and discharge said indebted- ness, and such proceedings were had in said action, that on the day of , 18 , it was duly ordered and adjudged by the said court, that the said mortgaged premises, or so much thereof as might be necessary to raise the amount then due to the said , for principal, interest, and costs, and which might be sold separately with- out material injury to the parties interested, be sold at public auction, in the county of , by or under the direction of , Esq., of , counselor at law, who was duly appointed referee. That subsequently to the entry of said judgment, and in pursuance thereof, the said referee duly sold said mortgaged premises at public auction to this plaintiff, and this plaintiff duly paid to him the purchase money therefor, and received from him a deed of conveyance thereof, all of which will more fully appear by said deed of conveyance, which was, on the day of j 18 , duly recorded in the office of the clerk of the county of , in Liber of Conveyances, page ; by the report of sale of said referee, which was duly filed in the office of said clerk, on the day of ? 18 , and by the order of said court confirming said report of sale, which was duly entered in said action on the day of , 18 .' YII. That under said foreclosure and sale, and the said deed of conveyance of said referee, executed in pursuance of said judgment, the plaintiff entered into possession of said mortgaged premises, and the receipt of the rents and profits thereof, and that he has since con- tinued and still is, in possession. That he then believed that he had acquired, under said foreclosure proceedings, a perfect title to the said mortgaged premises, free from all liens and incumbrances, but that he has since been informed, and he believes, that the defendant has, or claims to have, an interest in or lien upon the said premises by virtue of a certain mortgage executed [describe it], the Hen of which mortgage was and is inferior, and subsequent to the lien of the mortgage under which said foreclosure and sale was had. guished, and the strict foreclosure is sible on the trial as evidence of the as- made for the purpose of cutting it oil. signment. Robinson v. Ryan, 25 N. Y. The general principles which control the 320. It would doubtless also be permis- rights of the parties, and the relief to sible to omit to set out the proceedings which they are entitled, are discussed when the defective foreclosure has been ante, at §§ 1075 to 1083. by action, but in all cases a fuller form ' If the defective foreclosure has been of statement is preferable. If the title by advertisement and sale under the of the plaintiff to the mortgage is shown statute, a simple allegation may be made by alleging an assignment to him, a por- that the mortgage was assigned to the tion of paragraph VII. would be inap- plaintiff by the mortgagee, and it will plicable, and it should be averred simply not be necessary to set out the whole that the plaintiff, on a certain day, en- proceeding. The affidavits showing the tered into the possession of said prem- def ective foreclosure will then be admis- ises, etc. APPENDIX OP rOEMS. 779 YIII. That this plaintiff is advised that he has acquired by said foreclosure proceecMugs, the title to the said mortgage under which said sale was had [and also the right which I. K., and L., his wife, who were defendants in said action, had to redeem from the mortgage held or claimed by the defendant, the said I. K. being, at the time of the commencement of sard foreclosure, the owner in fee of the title and equity of redemption of said premises]." That the amount which was due and owing to the plaintiff in said action on the said mort- gage, at the time of the entry of said judgment of foreclosure and sale, exclusive of the costs or expenses of said action or of said sale, was the sum of dollars, and interest thereon from the day of 5 18 , no part of which has been paid, except as it was paid by the proceeds of said sale, under which this plaintiff claims. IX. That the plaintiff has laid out and expended large sums for permanent improvements and repairs upon said premises, to wit : [state tJie nature of the improvements, their cost and tlieir value]. And that the defendant has also paid large sums for taxes and assess- ments on said premises, to wit : [state the amounts paid, the date of payment, and the nature of the tax or assessment.] X. That the rents and profits received by this plaintiff from said premises, have not been so great in amount as the annual interest on said mortgage, under which said foreclosure was had, and have not amounted to more than the sum of about dollars. That the plaintiff claims that the amounts paid by him for taxes and assess- ments, and repairs, and the value of the permanent improvements made by him as aforesaid, should be allowed to him and added to the amount of said mortgage and interest thereon, and that there is now due and owing to him thereon, about the sum of dollars. XI. That the plaintiff has applied to the said defendant , and requested him to pay the plaintiff the said sum so due on the said mortgage held by the plaintiff, or come to an accounting with^him thereon, and after the proper charges and credits, pay to the said plaintiff what should appear to be due him on the said mortgage ; or, in default thereof, to release his right and equity of redemption in the said mortgaged premises. But the said defendant has hitherto refused, and still refuses so to do, or to comply with any part of said plaintiff's request. ' The purchaser at a foreclosure sale der the defective foreclosure, to insist acquires the rights of the plaintiff in the upon all of his rights. The action may land, and also the rights of all of the de- then be to cancel the junior lien if it be fendants. As against a stranger to the void, or to have the amount due upon it action holding a junior lien, he may ascertained if it be valid, and to foreclose either enforce the lien of the mortgage it either by a sale or by a strict foreclos- foreclosed, or he may redeem. See ante, ure. If a strict foreclosure is desired, §§io27toi030. It will not often be difBcult seea«fe, §§ 1075 to 1083. The clause in to determine what to do, biit where the brackets would be proper if the plaintiff value of the property or the amount or desired to ask for any relief other than validity of the junior lien is doubtful, it for foreclosure, will be permissible for the purchaser un- '^80 APPENDIX OF FORMS. "Wherefore the plaintiff demands judgment : 1. That an account may be taken of what is due and owing to the plaintifE for principal and interest on said mortgage ; and that an ac- count may also be taken of the rents and profits of the said mortgaged premises which have been received by the plaintiff, and also of the expenditures of the plaintiff for permanent improvements and repairs, and for taxes and assessments. 2. That said defendant pay to the plaintiff what may be due him on taking the said account, together with the costs of this action, by a short day to be appointed by the court for that purpose ; or, in de- fault thereof, that the said defendant and all persons claiming under him, be debarred and foreclosed of and from all right, title, and equity of redemption in and to the said mortgaged premises, and every part thereof. 3. That the plaintiff have such other or further relief, or both, in the premises, as may be just and equitable. X. T., Plaintiff^s Attorney. \_Add verification in the usual form.'] No. 40. JUDGMENT FOR STRICT FOKECLOSUEE. \_Commence lyy recitvng the proceedings in the action, which will ie similar to Form No. 11. In all cases a/n affidwvit under Rule 60, of the filing of a notice of the pendency of the action, must ie furnished upon applying for Judgment, and should ie recited. The following will ie the essential parts of the judgment ;] Therefore it is adjudged, that upon the defendant's paying unto the said plaintiff the amount which is so found and reported due to him .as aforesaid, with interest from the date of said report,' together with the further sum of dollars, and interest from this date, which is hereby adjudged to the plaintiff for costs and charges of this action, within [six] months after the entry of this judgment, and service of notice thereof upon the attorney for the defendant, said payment to be made at [the office of , Esq., attorney for the plaintiff. No. street, in the city of , between the hours of 10 a.m. and 3 p.m., of any business day, on or before the expiration of said six months, and which said day shall have been named by the said defendant in a notice in writing to be served by him on said attorney for the plaintiff, not less than ten days prior to such day], the said plaintiff do then convey the said mortgaged prem- ises to the said defendant , by a suitable and proper instru- ment of conveyance, to be approved by the court in case the parties ' This will be the amount due to the been made to him, and he has accounted plaintiff after all proper allowances have for rents and profits. APPENDIX OF FOEMS. 781 cannot agree upon the form thereof, free and clear of all incum- brances, done or suffered by him, or by any person claiming by, from, or under hira [and with the usual covenants against his and their acts] ; and that he deliver up all deeds and writings in his custody or power relating thereto, upon oath, to the said , or to whomsoever he may appoint to receive the same ; and further, that the said plaintiff execute and acknowledge a certificate to cancel and discharge said mortgage of record. But in default of the said defend- ant's paying unto the plaintiff such principal, interest, and costs as aforesaid, by the time limited for that purpose, then it is adjudged that the said defendant , and all persons claiming under him, after the filing of the aforesaid notice of the pendency of this action, do stand and be forever barred and foreclosed of and from all right, title, interest, and equity of redemption in the said mortgaged premises, and every part thereof. The following is a description of the said mortgaged premises here- inbefore mentioned : No. 41. OEBER EXTENDING TIME FOR REDEMPTION. At a special term, etc. \_Title of the action.] On reading and filing the affidavit of the defendant , and notice of this motion, and on all of the papers and proceedings herein, after hearing M. N., attorney for said defendant, and on his motion, and X. Y., attorney for the plaintiff, in opposition thereto, It is ordered, that the time granted to the said defendant , in and by the judgment which was entered in this action on the day of ) 18 , and within which time he was required to redeem the mortgaged premises by paying the amount due to the plaintiff for principal, interest, and costs, or stand foreclosed, be and the same hereby is extended and enlarged for [one] month upon con- dition that the said defendant shall, wimin ten days after the entry of this order, pay to the plaintiff ten dollars, costs of this motion. No. 42. FINAL ORDER IN ACTION FOR STRICT FORECLOSURE. At a special term, etc. [Title of the action.] Upon the judgment entered in this action on the day of , 18 , and on reading and fihng notice of the entry of said judgment, with due proof of the service thereof on the defend- ant, and the affidavit of the plaintiff showing that the defendant has not paid the amount due to the plaintiff for principal, interest, and 782 APPENDIX OF FORMS. costs, or any part thereof, though more than six months have expired since the said service of notice of the entry of said judgment as afore- said, and on due notice of this motion, with due proof of the service thereof ; after hearing X. T., attorney for the plaintiff, in support of the motion, and M. IST., counsel for the defendant, in opposition thereto, It is ordered, that the said defendant , and all persons claiming under him, after the filing of the notice of the pendency of this action, do stand and be forever barred and foreclosed of and from all right, title, interest, and equity of redemption in the mortgaged premises described in the said judgment, and every part thereof. No. 43. Complaint in Action to Redeem. Gtrjintee of Mortgagor against Mortgagee in Possession. {Title of the action.] The plaintiff, complaining against the defendant, alleges : That heretofore E. F., bemg then the owner in fee of the premises hereinafter described, and M., his wife, executed to the above named defendant, C. T>., a mortgage bearing date on the day of ,18 , to secure the payment of the bond of said E. F., therein set forth and described, conditioned for the payment of the sum of [set out condition]. That said mortgage was, on the day of 5 18 , recorded in the office of the clerk of the county of , in Liber of Mortgages, page , and that the mortgaged premises are therein described as follows : [Insert description^]* That thereafter, and on or about the day of , 18 , the said defendant entered into the possession of the said mort- gaged premises, and into the receipt of the rents and profits thereof, and has ever since continued in such possession and receipt. That heretofore the said E. F., and M., his wife, by their deed of conveyance, executed under their hands and seals, bearing date on the day of , 18 , and recorded in said clerk's office, on the day of ; 18 , in Liber of Conveyances, page , and for a valuable consideration, therein expressed, duly con- veyed the said mortgaged premises to the plaintiff, subject to the said mortgage. The plaintiff further alleges upon information and belief, that the said mortgage has been, either wholly or in great part satisfied and paid by the rents and profits of said mortgaged premises received by said defendant, and otherwise. That the plaintiff has desired and requested the defendant to come to an accounting with him as to the amount unpaid and owing upon said mortgage, but the said defend- ant refused, and still refuses so to do. Wherefore the plaintiff demands that an account may be taken of APPENDIX OF POEMS. 783 the amount due to the defendant for principal and interest on said mortgage, and that the plaintiff may be at liberty to redeem the said mortgaged premises upon payment of what, ijf anything, shall be found to be due ; that the defendant upon payment thereof acknowl- edge satisfaction of said mortgage and discharge the same of record, and that the plaintiff may have such other and further relief, or both, in the premises, as may be just. X. Y., Plaintiff'' s Attorney. [ Yerifioation in the usual form.] No. 44. Complaint in Action to Redeem and to Compel an Assignment. Junior Incnmbrancer againt^t Mortgagee. [As in Form Wo. 43 to the *.] That heretofore, on the day of , 18 , the plaintiff duly recovered a judgment against the said E. F., in an action in the Supreme Court, in and for the county of , for the sum of dollars damages and costs ; that said judgment was on the day of ) 18 , duly docketed in the office of the clerk of the said county of , and then became and was a lien on the said mort- gaged premises subject to said mortgage, and that no part of said judgment has been paid. That the said mortgage held by the said defendant, C. D., became due and payable on the day of , 18 ; that thereafter this plaintiff offered and tendered to the said defendant the full amount due thereon for principal and interest, and requested an as- signment thereof, but the said defendant refused to execute such assignment to the plaintiff. That the said E. F., who is now the owner of the said mortgaged premises, has neglected and refused to pay the principal or interest secured by said mortgage, and that he remains in possession of the said mortgaged premises and of the rents and profits thereof ; that the taxes on said mortgaged premises for the year 18 are unpaid, amounting to the sum of dollars ; that the said E. F. is insol- vent ; that the accumulation of interest on said mortgage and on said taxes seriously impairs the security and value of the plaintiff's afore- said lien ; and that the defendant and the said E. F. have combined and confederated together to allow the amount of said mortgage to reach the entire value of the property, and then to foreclose the same, with intent to deprive the plaintiff of any advantage of his said judg- ment lien.' Wherefore the plaintiff demands that an account may be taken of ' It is necessary that it should be made of the equitable rights of the plaintiff, to appear that an assignment is for some See ante, §§ 685 to 690. special reason essential to the protection 784 APPENDIX OF FOEMS. the amount due to the defendant for principal and interest on said mortgage, and that the plaintiff may be at liberty to redeem from the said mortgage upon payment of what shall be found to be due ; that the defendant upon payment thereof, execute, acknowledge, and de- liver to the plaintiff an assignment of the said bond and mortgage, and that he also deliver to the plaintiif all instruments in writing and papers in relation thereto, and that the plaintiff have such other and further rehef, or both, in the premises as may be just. X. Y., Plaintiff^s Attorney. [ Yerificaiion m the usual form.] No. 45. Order of Reference to take Account of Amoniit due to Mortgagee in Possession. [^Recite proceedings, cmd then add:] It is ordered, that it be referred to M. N., Esq., of the city of , counselor at law, to take an account of what is due to the defendant for principal and interest on the bond and mortgage set forth in the complaint. And the said referee is also to take an ac- count of the rents and profits of the said mortgaged premises which have come to the hands of the said defendant, or of any other person or persons by his order or for his use, or which he, without his wilful deftiult, might have received. And what shall be coming on the said account of rents and profits, is to be deducted out of what shall be found due to the said defendant for principal, interest, and costs. And the said referee is also to allow the said defendant all sums paid out by him for taxes, or for permanent improvements, or for repairs, or for other purposes whenever, upon principles of equity, such pay- ments ought to be allowed. And for the better taking of the said account, the said parties are to produce before and leave with the said referee, all deeds, books, papers, and writings in their custody or power relating thereto, and are to be examined on oath as the said referee may direct. No. 46. JUDGMENT FOR REDEMPTION. ORDEVART FORM. \_EeGite the prooeedmgs m the act/ion, amd then add:] Therefore it is adjudged that the plaintiS may redeem the said mortgaged premises from the mortgage held by the defendant, and which is mentioned and described m the complaint in this action, upon paying to the said defendant the said sum of dollars so found and reported due to the defendant, with interest thereon from the date of said report, and the further sum of dollars adjudged APPENDIX OF FOEMS. 785 to the defendant for his costs and charges in this action, mth interest from the date hereof, within [six] months after the date of the entry of this judgment and service of notice thereof ; and that, upon snch payment being made, the said defendant do surrender the said mort- faged premises unto the said plaintiff, or unto such person or persons as e shall direct, free and clear of all incumbrances done by him, or any person claiming by, from, or under him, and deliver unto the said plaintiff, on oath, all deeds and writings in his custody or power, relating to the said mortgaged premises. And further, that the said defendant execute and acknowledge a certiiicate to cancel and dis- charge said mortgage of record. But in default of the said plaintiff maliingthe said payment of principal, interest, and costs as aforesaid, it is ordered that the complaint of the said plaintiflE do, from thence- forth, stand dismissed out of this court, with costs to be taxed. No. 47. AFFIDATIT OF MORTGAGEE, OF NON-PAYMENT OF MONEY. [Title of the action.] County of , ss. : C. D., the above named defendant, being duly sworn, says, that he has not, nor has any person or persons in his behalf, at any time heretofore, received or been paid the amount of dollars and interest thereon from the day of , 18 , or any part thereof, which by the judgment made and entered in this action, on the day of , 18 , was ordered and ap- pointed to be paid to him, this deponent ; but that the full amount which was found and adjudged by said judgment to be due and owing to this deponent on the bond and mortgage mentioned and de- scribed in the complaint, is still owing and unpaid thereon. No. 48. FINAL ORDEK DISMISSING COMPLAINT. At a special term, etc. \_Title of the action.] Upon the judgment entered in this action on the day of ,18 , and on reading and filing notice of the entry of said judgment, with due proof of the service thereof on the plaintiff, and the affidavit of the defendant showing that the plaintiff has not paid the amount due to the defendant for principal, interest, and costs, or any part thereof, though more than six months have expired since the said service of notice of the entry of said judgment as aforesaid, and on due notice of this motion, with due proof of the service there- of, after hearing X. Y., attorney for the defendant, \p. support of the motion, and J. K., counsel for the plaintiff, in opposition thereto, ^0 786 APPENDIX or POEMS. It is ordered, that the complaint of the said plaintiff do, from henceforth, stand dismissed out of this court, with dollars costs to be taxed by the clerk of this court, including $10 costs of this motion. No. 49. NOTICE OF SALE ON FORECLOSURE BY ADVERTISEMENT.' Whereas, default has been made in the payment of the money secured by a mortgage dated the day of , 18 , executed by A. B. and M., his wife, of , to C. J)., of the same place, which mortgage was recorded in the office of the clerk of the county of , in Liber of Mortgages, page , on the day of ,18 , at o'clock in the noon of that day ; and which said mortgage was by the said 0. D. assigned to E. F., who is now the owner and holder thereof ; And whereas the amount claimed to be due upon said mortgage at the time of the first publication of this notice is the sum of dollars and cents, to wit : the sum of dollars principal, and the sum of dollars and cents the interest thereon from the day of > 18 , which said sum of dollars and cents is the whole amount claimed to be unpaid on said mortgage : Now, therefore, notice is hereby given that, by virtue of the power of sale contained in said mortgage and duly recorded, as aforesaid, and in pursuance of the statute in such case made and provided, the said mortgage will be foreclosed by a sale of the premises therein described at public auction, at , in the city of , on the day of , 18 , at o'clock in the noon on that The said premises are described in said mortgage as follows : {^Insert description.] Dated, etc. E. F., Assignee of Mortgage. X. Y., Attorney for Assignee. No. 60. THE SAME. A SHORT FORM. MoETGAGE Sale. — Mortgagors A. B. and M., his wife; mort- fagee C. D. ; assignee E. F. ; second assignee and present owner and older G-. H. Mortgage dated , 18 , and recorded in the office of the clerk of county, ,18 , in Book No. of ' Code of Civ. Pro. § 2391 ; ante, §§ 1115 to 1122. APPENDIX OP FORMS. 787 Mortgages, page . The amount claimed to be due upon said mort- gage, at the date of the first publication of this notice is the sum of Default having been made in the payment of the moneys secured by said mortgage, and no suit or proceeding at law or otherwise having been instituted to recover said mortgage debt or any part thereof : now, therefore, notice is hereby given, according to the statute in such case made and provided, that by virtue of the power of sale contained in said mortgage, and duly recorded therewith, as aforesaid, the said mortgage will be foreclosed by a sale of the prem- ises therein described, by the subscriber, the assignee aforesaid, at public auction, on the day of , 18 , at in the noon of that day, at , in the village of , in said county of Said premises are described in said mortgage as follows : {^Insert descrvption.'] Dated, etc. G. H., Assignee. X. Y., Attorney. No. 51. Affldayit of Affixing Copy of Notice in Book kept by the County Clerk.' State of New York, CoiINTY OF '' , being duly sworn, says, that he is the clerk of the said county of ; that more than twelve weeks prior to the time therein specified for the sale, to wit, on the day of , 18 , he received a printed copy of the annexed notice of sale, and that immediately, to wit, on said day, he affixed the same in a book prepared and kept by him for that purpose, and also entered a minute in said book at the bottom of such notice of the time of receiving and afiixing the same, duly subscribed by him, the said clerk, and also indexed such notice to the name of the mortgagor. Sworn, etc. No. 52. The same. Made by any other person than theConnty Clerk. State of New Yoek, ) , cottntt of ) " , being duly sworn, says, that he resides at [and is one of the clerks employed by the clerk of the county of in the office of said clerk] ; that more than twelve weeks prior to the time therein specified for the sale, to vnt, on the day of , 18 , he saw a printed copy of the annexed notice of sale affixed in a ' Code of Civ. Pro. §§ 2390, 2396 ; ante, §§ 1108, 1144. 788 APPENDIX OV FOEMS. book prepared and kept by the clerk of said county of for that purpose ; that there was then also entered in said book, at the bot- tom of such notice, the time of receiving and affixing the same, which was therein stated to be the day of , 18 , duly sub- scribed by said clerk, and that said notice was also indexed to the name of the mortgagor. Sworn, etc. No. 53. Affidavit of Affixing the Notice of Sale on the outer door of the Court House.' State of New Tobk, County of , being duly sworn, says, that he resides at , and that, more than eighty-four days prior to the time therein specified for the sale, to wit, on the day of , 18 , he fastened up a printed copy of the annexed printed notice of sale, on the outward door of the court house in the city [or village] of , that being the building which is nearest to the said mortgaged premises, and in which the county courts are directed to be held in the county of , where the said premised are situated. He further says, that said notice was affixed and posted on the said outer door of said court house, in a conspicuous place and in a substantial manner. Sworn, [etc.] No. 54. Affidavit of the Publication of the Notice of Sale.^ State of New Yoek, , cotintt of , being duly sworn, says, that he resides at , and that he is, and at the several times hereinafter mentioned he was, the printer [or the foreman of the printer, or the principal clerk of the printer] of the [Weekly Gazette], a newspaper printed and published at , in the county of ; that the annexed notice of sale was published in the said newspaper for twelve weeks successively, once in each week, prior to the time therein specified for the sale, commencing on the day of , 18 , and ending on the day of , 18 , both days inclusive. [And, if there have teen adjov/rnments, add .•] And he further says, that the notice of post- ponement annexed to and underneath said notice of sale, was also published in said newspaper on the day of , 18 , and on the day of ; 18 , in the form shown in said annexed printed copy thereof. Sworn, etc. I Code of Civ. Pro. §§ 2388, 2396; ante, §§ 1109, 1144. 2 Id. APPENDIX OF FOEMS. 789 No. 55. AFFIDAYIT OF SEEYING NOTICE OF SALE.' State of New York, ) CotTNTT OF f " , being duly sworn, says, that he resides at , and that he is of the age of years ; That on the day of , 18 , at , in the city of , he served a copy of the annexed notice of sale on , by delivering the same to and leaving it with him personally ; that on the same day [or, on the day of , 18 ,] at , he made a like service upon That on the day of , 18 , he served a copy of said annexed notice of sale on , by leaving the same, which was legibly addressed to him, at his dwelling house at , in the city of , in charge of a person of full age, who received the same for him ; that on the same, day [or on the day of , 18 ,] he made a like service upon , by leaving a copy of the said notice addressed to him, at his dwelling house at , in the city of , in charge of a person of full age, who received the same for him. That on the day of , 18 , he served a copy of the said annexed notice upon each of the following named persons, by depositing the same in the post-office at the city of , folded, inclosed in sealed post-paid envelopes, and directed to each of the said persons at their several respective places of residence as follows : to , at ; to , at ; and to , at That the postage on each of said notices was prepaid, and that the said persons were known to deponent to reside at the several places to which the notices to them were respectively directed. Sworn, etc. No. 56. AFFIDATIT OF THE FACT OF THE SALE.'' State of New Toek, ) CooNTT of i " , being duly sworn, says, that he resides at , and that at , in the city of , on the day of j 18 , at o'clock in the noon of that day, he officiated as auctioneer at the sale of the mortgaged premises described in the notice of sale, a printed copy of which is hereunto annexed, pursuant to such notice and by virtue of the power of sale contained in the mortgage which is therein mentioned ; that said sale took place at said time and place, and that the whole of said premises were then and there sold in one ' Code of Civ. Pro. §§ 2389, 2396. '' Id. § 2396. 790 APPENDIX OF rOKMS. parcel to , of , for the sum of dollars, he being the highest bidder therefor, and that being the highest sum bidden for the same. Deponent further says, that said sale was made at public auction and in the daytime, and was, as deponent believes, honestly and fairly conducted. Sworn, etc. No. 57. Petition in Summary Proceeding by Purchaser under Foreclosure by Ad- vertisement to obtain Possession.' To the county judge of the county of The petition of X. T., of , in the county of , respectfully shows : That heretofore A. B., being the owner of the premises hereinafter described, and being indebted to 0. D. in the sum of dollars, upon his bond for that sum dated on the day of , 18 , and payable in one year after that date, with interest thereon payable semi-annually, the said A. B. and M. his wife executed, acknowledged, and delivered to said 0. D., a mortgage to secure the payment of said bond bearing even date therewith, and recorded in the office of the clerk of the county of , in Liber of Mortgages, page , on the day of > 18 » whereby they granted and conveyed unto the said 0. D. the following de- scribed premises, to wit : \Insert description.'\ That said mortgage contained a like condition as the said bond, and that it also contained a power of sale, whereby in ease of default in the payment of the said sum of money, the interest that might grow due thereon, or any part thereof, the said C. D., or his assigns, were duly empowered to sell the said mortgaged premises in due form of law, and out of the moneys arising from the sale, to pay the said sum of money and in- terest, with the costs and expenses of the proceedings thereupon, the surplus to be returned to the mortgagor ; that thereafter the said C. D. duly assigned said bond and mortgage to E. F. ; that thereafter default was made in the payment of the money secured by the said mortgage, whereupon the said E. F. commenced proceedings by vir- tue of the said power of sale contained in said mortgage, and in pur- suance of the statute in such case made and provided, to foreclose the said mortgage by a sale of the premises therein described at public auction ; that due notice was given of the time and place of such sale, in the manner requii'ed by law ; and that thereafter, to wit, on the day of > 18 , the said premises were under the said power of sale duly sold to and purchased by your petitioner for ' See Code of Civil Pro. § 2232 et seq. ; landlords to obtain possession of de- ante, §§ 1158, 1159. The method of mised premises for non-payment of rent, procedure is not pointed out at length, or for holding over after the expiration but is the same as in proceedings by of a term. APPENDIX OF FOEMS. 791 the price of dollars, that being the highest sum bidden for the same ; that the affidavits of publication and affixing the notice of sale, and of service of such notice, and of the circumstances of the sale, shovring such foreclosure and the proceedings thereupon, and which affidavits are required by law to be made, were duly made, and that they were on the day of j 18 , duly filed in the office of the clerk of the county of , that being the county where the said mortgaged premises were and are situated, and where said sale took place ; and that they were also on that day duly re- corded at length by such clerk in a book kept by him in his said office for the record of mortgages, to wit, in Book of Mortgages commencing at page , that after the title to the said mort- faged premises had been fully perfected in this petitioner, by the ling and recording of the said affidavits as aforesaid, this petitioner demanded possession of the said premises from said A. B., who was then and is now in possession thereof [or from M. N., who was then and who is now in possession thereof, claiming to hold the same by some right or title derived from the said A. B., the said mortgagor, subsequent to the execution and delivery of said mortgage], by virtue of said title under said foreclosure, and that the said A. B. [or M. N.] refused to surrender said possession, and that he holds over and con- tinues in possession of the said premises after the perfection of said title under said foreclosure proceedings, and after such demand afore- said, without permission of this petitioner, who is entitled to the pos- session thereof. Your petitioner therefore prays for a final order to remove the said A. B. [or M. N.], and all persons holding under him, from the possession of said premises, and for such other or further rehef as maj be just, together with costs. Dated, etc. J. L., Attorney for Petitioner. [Add verijiGation hy pet/itioneT in same form as verification to a complaint.'] No. 58. PRECEPT TO BE ISSUED ON FOREGOING PETITION. Before the county judge of county. X. T., Petitioner, agoAMst A. B. and M. D., Respondents. The People of the State of New York to A. B. and M. D. above named, and each and every person in possession of the premises here- inafter described : 793 APPENDIX OF FORMS. Tou are hereby required forthwith to remove from the premises designated and described as follows : {Take in description.] Or to show cause before me, the county judge of the county of , at the county court house, in the village of , on the day of ) 18 , at o'clock in the noon of that day, why the possession of said premises should not be delivered to the said petitioner. Dated, etc. [Signat/u/re of Cownty Judge.] No. 59. Indorsement on foregoing Precept if Service is made otherwise tlian Per- sonally^. Section 2241 of the Code of Ci/vil Procedv/re. Section 2241. "A person to whom a copy of a precept directed to another is delivered, as prescribed in this title, must, without any avoidable delay, deliver it to the person to whom it is directed, if he can be found within the same town or city, or, if he cannot be so found, to his agent therein : and if neither can be so found after the exercise of reasonable diligence, before the time when the precept is returnable to the judge or justice who issued the same, at the time of the return thereof, with a written statement indorsed thereupon, that he has been unable after the exercise of reasonable diligence, to find the person to whom the precept is directed, or his agent within the town or city. A person who wilfully violates any provision of this section is guilty of a misdemeanor : and if he is a tenant upon the property, forfeits to his landlord the value of three years' rent of the premises occupied by him. A copy of this section must be indorsed upon each copy of a precept served otherwise than person- ally upon the person to whom it is directed." No. 60. FINAL ORDER IIV SUMMARY PROCEEDING. {Title as im, precept.] The petitioner, X. Y., appeared on the day of , 18 , and the precept was then returned, with due proof of service thereof, and the petitioner then demanded possession of the premises described in his petition, dated and verified on the day of ,18 . The respondent, A. B., then also appeared by his attorney and filed his verified answer to the said petition, and the issue thus made having been duly tried before said county judge without a jury, who heard the allegations and proofs of the parties, the said county judge rendered his decision in favor of the petitioner. APPENDIX OF FOEMS. 793 On motion of T. L., attorney for the petitioner, final order is there- fore hereby made in favor of said petitioner, awarding to' the said petitioner the delivery of the premises described in said petition by reason of the facts therein alleged and set forth, together with dollars costs. Dated, etc. [SignaUi/re of Ooimty Judge.} No. 61. WAKRANT TO OBTAIN POSSESSION IN SUMMARY PROCEEDINGS. To the sheriff of the county of , or to any constable of said coimty. Whereas, X. Y. has heretofore presented to me his verified peti- tion, alleging that heretofore A. B., being the owner of the premises hereinafter described, and being indebted to C. D. in the sum of dollars, upon his bond for that sum, dated on the day of , 18 , and payable in one year after said date, with interest thereon payable semi-annually, the said A. B. and M. his wife executed, acknowledged, and delivered to said 0. D. a mortgage to secure the payment of said bond [Follow m the language substan- tially of the petition, Form No. 57.] "Whereupon I issued a precept, requiring the said A. B. and M. N., and each and every person in possession thereof, forthwith to remove from the said premises, or show cause before me, at a certain time now past, why the possession of the said premises should not be de- livered to the said [If am, amswer has been interposed am,d a trial had, here recite the proceedings^ and no good cause having been shown, or in any way appearing to the contrary, and due proof of the service of such precept having been made to me, and I having made a final order awarding the delivery of the possession of said premises to said petitioner with dollars costs ; Therefore, in the name of the People of the State of New York, you are commanded to remove all persons from said premises, and put the said X. Y. into the full possession thereof. In witness whereof I have subscribed to these presents this day of , in the year one thousand eight hundred and [8ignatv/re of County Judge.] No. 62. SHERIFF'S OR CONSTABLE'S RETURN UPON WARRANT. Pursuant to the command of the within warrant, I have this day put the said into the full possession of the premises therein mentioned. Dated this day of , 18 . [Signatwre of Sheriff or Constable.] 794 APPENDIX OF FORMS. No. 63. Petition in Special Proceeding to Discliarge Mortgage of Record.' SuPEEME CoTJET, CoUNTY. In the Matter of the Petition of A. B. to have a Mortgage discharged of record. To the Supreme Court of the State of New York, in the county of : [or to the Superior Court of the city of New York, or to the Superior Court of the city of BuflEalo]. The petition of A. B. respectfully shows, That heretofore C. D., and M., his wife, executed a mortgage to E. F., to secure the payment of the sum of dollars, which said mortgage bears date on the day of > 18 , and was on the day of ) 18 , recorded in the office of the clerk of the county of , in Liber of Mortgages, page , and that the following is a description of the mortgaged premises: [Insert de- scription.] That more than twenty years have elapsed since the said mortgage was due and payable ; that the same is now from lapse of time pre- sumed to be paid, and that it has in fact been paid, but that the same still remains undischarged upon the record. That your petitioner has an interest in the said mortgaged prem- ises, and that he is the owner thereof in fee simple, by virtue of a grant or conveyance from A. B., the said mortgagor. That E. F., the said mortgagee, has been dead for more than five years ; that he died at the city of , on or about the day of ) 18 , being at the time of his death a resident of the said city, and that letters of administration upon his personal estate were thereafter duly issued by the surrogate of the _ county of , to M. N., of the said city, who now resides at said city. That the names and places of residence, as far forth as the same can be ascertained, of the heirs of E. F., the said mortgagee, are as follows : J. F., the only son and heir of said E. F., resides at , in the State of That said mortgage was never assigned by the said E. F., so far as your petitioner is informed, and that no assignment thereof appears of record in the office of the said clerk of county, [or, That said mortgage was duly assigned by said E. F. to G. H., by assign- ment in writing, but not acknowledged, so as to entitle the same to ' See ante §§ 428 to 430. APPENDIX OF FORMS. 795 be recorded, and that the said G. li. has been paid the amount due thereon.] Tour petitioner therefore prays that the said mortgage may be discharged of record. X. T., Attorney for Petitioner A. B. County of , ss. : A. B., the petitioner above named, being duly sworn, says, that the foregoing petition is true of his own knowledge, except as to the matters therein stated to be alleged on information and belief, and as to those matters he believes it to be true. Sworn, etc. A. B. No. 64. ORDER TO SHOW CAUSE. At a special term, etc. {Title as in preceding form.] On reading and filing the petition of A. B., praying that a mort- gage executed by C. D., and M., his wife, to E. F., dated the day of ) 18 5 and recorded in the ofBce of the clerk of the county of , on the day of , 18 , in Liber of Mortgages, page , [and which mortgage was assigned by E. F. to G. H.], upon premises situate in the said county of , may be discharged of record, on motion of X. Y., attorney for the said peti- tioner. It is ordered, that all persons interested show cause at a special term of this court, to be held at chambers at the court house, in the city of , on the day of , 18 , at o'clock in the forenoon of that day, why the said mortgage should not be discharged of record. / It is further ordered, that this order be published in the , a newspaper published in the county of , once in each week for weeks successively, and that a copy of this order be served personally on M. IST., administrator, etc., of E. F., deceased, on J. F. and on G. H., at least days before the day hereinbefore ap- pointed for showing cause. No. 65. ORDER OF REFERENCE. At a special term, etc. [Title as in JSfo. 63.] It appearing to the court that the order made in this matter on the , day of 5 18 , was duly pubhshed and served as was therein 796 APPENDIX OF FORMS. directed, on motion of X. T., attorney for the petitioner, no one ap- pearing in opposition thereto, It is ordered, that it be referred to E. S., Esq., of the city of , counselor at law, to take and report proofs of the facts stated in the said petition. No. 66. EEFEREE'S REPORT. {TiUe as in No. 63.] To the Supreme Court of the State of New York : I, the undersigned, appointed a referee in and by an order of this court made on the day of , 18 , to take and report proofs of the facts stated in the petition in this matter, do hereby respect- fully report : That I caused a notice in writing of the hearing on said reference to be served upon M. JS"., administrator, etc., of E. F., deceased, on J. F. and on G. H. [fourteen] days before the said hearing, which more fully appears by the notice of hearing which is hereunto annexed. That on the day appointed in said notice, to wit, on the day of , 18 , having been first duly sworn, I proceeded to execute said order in the presence of X. Y., attorney for the petitioner, no one appearing to represent any adverse interest, and' that I have taken proofs of the facts stated in said petition, which said proofs were all reduced to writing and signed by the several witnesses, and which are annexed to this report. Dated, etc. E. S., Referee. No. 67. ORDER DISCHARGING MORTGAGE OF RECORD. At a special term, etc. {Title as in Wo. 63.] On reading and filing the report of R. S., Esq., referee in this mat- ter, to whom it was referred to take and report proofs of the facts stated in the petition herein, and it appearing to the satisfaction of the court by the proofs taken by the said referee and annexed to his said report, that the matters alleged in the said petition are true, on motion of X. Y., attorney for the said petitioner, no one appearing in opposition thereto. It is ordered, that the mortgage executed by C. D., and M., his wife, to E. F., dated the day of ; 18 , and recorded in the office of the clerk of the county of , on the day of , 18 , in Liber of Mortgages, page , upon premises situate in the said county, be discharged of record ; and that the clerk of the county of , upon being furnished with a certified copy of this order, and paid the fees allowed by law for discharging mortgages, shall record this order and make the proper entries in his books show- ing such discharge. INDEX TO FORMS. References are to Form. Numbers. ACTION TO FOBECLOSE, complaint in, 1. notice of pendency of action, 2. of no personal claim, 3. of application for judgment, 4. affidavit on application for judgment, 5. order of reference preliminary to judgment, 6. summons to attend before referee, 7. oath of referee, 8. report of referee, whole amount due, no infants or absentees, 9. whole amount due, no infants or absentees, 10. whole amount due, infants or absentees, 11. judgment of foreclosure and sale, 12. part only being due, premises to be sold in one parcel, 13. premises to be sold in separate parcels, 14. provision for sale in inverse order of alienation, 15. judgment for deficiency, one defendant being surety, 16. undertaking an appeal from judgment, 17. another form of undertaking, 18. notice of sale under judgment, 19. terms of sale, 20. referee's report of sale, 21. order confirming report of sale, 22. request to docket judgment for deficiency, 23. execution for deficiency, 24. affidavit on appUcation for order for possession, 25. order for possession, 26. affidavit on which to apply for receiver of rents, 27. order appointing receiver of rents, 28. bond of receiver, 29. proceeding to distribute surplus, 30 to 38. 798 INDEX TO rOEMS. ^^ZrfSmZT. ACTION TO EEDEEM, complaint in, 43. * and to compel assignment, junior incumbrancer against mortgagee, 44 order of reference to take account, mortgagee in possession, 45. judgment in, 46. affidavit of mortgagee as to non-payment, 47. final order dismissing complaint, 48. AFFIDAVIT, on application for judgment of foreclosure, 5. on application for order for possession, 25. to apply for receiver of rents, 27. on applying for reference as to claim for surplus, 31. of mortgagee as to failure to redeem, 47. of affixing notice of sale on foreclosure by advertisement in book pf clerk, 51. made by another person than clerk, 52. of affixing notice of sale on outer door of court house, 53. of pubUeation of sale, 54. of serving notice of sale, 55. of sale, in foreclosure by advertisement, 56. BOND of receiver of rents, 29. CERTIFICATE of clerk in surplus proceeding, 35. COMPLAINT in action to foreclose, 1. in action for strict foreclosure, 39. in action to redeem, 43. and to compel assignment, junior incumbrancer against mortgagee, 44. DISCHAEGE, special proceeding to compel, 63-67. DEFICIENCY, judgment for, one defendant a surety, 16. request to docket judgment for, 23. execution for, 24. EXECUTION, for deficiency after sale in foreclosure, 24. FORECLOSURE. See Action to Foreclose, Fobeclosuee by Adveb- TIStiMENT, AND StKIOT FoKECLOSUEE. FORECLOSURE BY ADVERTISEMENT, notice of sale, 49. a shorter form, 50. affidavit of affixing notice in book of county clerk, 51. made by another person than the clerk, 52. of affixing notice on outer door of court house, 53. of publication of notice of sale, 54. of serving notice of sale, 55. of the fact of the sale, 56. f^i;X1Sr n^DEX TO FORMS. 799 JUDGMENT, of foreclosure and sale, 12. part only being due, premises to be sold in one parcel, 13. premises to be sold in separate parcels, 14. provision to be inserted in, for sale in parcels in inverse or- der of alienation, 15. for deficiency, one of defendants being a surety, 16. request to docket, for deficiency, 23, for strict foreclosure, 40. in action to redeem, 46. NOTICE of pendency of action to foreclose, 2. of no personal claim, 3. of application for judgment of foreclosure, 4. of sale, under judgment of foreclosure, 19. of claim to surplus, 30. of motion for reference as to claim for surplus, 32. to confirm report as to surplus, 37. of sale, on foreclosure by advertisement, 49. a shorter form, 50. OATH of referee, 8. OEDER of reference preliminary to judgment of foreclosure, 5. confirming report of sale, 22. for possession after sale in foreclosure, 26. appointing receiver of rents, 28. of reference as to claim for surplus, 33. confirming report of referee as to surplus, 38. extending time for redemption in strict foreclosure, 41. final, in action for strict foreclosure, 42. of reference in action to redeem, 45. final, in action to redeem, 48. in siunmary proceeding to obtain possession, 60. to show cause in proceeding to discharge mortgage of record, 64. of reference in said proceeding, 65. discharging mortgage of record, 67. PETITION, in summary proceeding after foreclosure by advertise- ment, 57. on proceeding to discharge mortgage of record, 63. POSSESSION, application for order for, 25. order for, after sale in foreclosure, 26. summary proceeding, after foreclosure by advertisement, 57. EECEIVEE, affidavit on which to apply for, 27. order appointing, 28. bond of, 29. 800 INDEX TO FORMS. ^mXm""l° EEDEIIPTION. See Action to Eedeem. EEFEREE'S REPOET, preliminary to judgment of foreclosure, 9. whole amount not due, no iofants or absentees, 10. whole amount due, infants or absentees, 11. of sale, 21. as to claims to surplus, 36. notice of motion to confirm, 37. order confirming, 38. SALE, notice of, 19. terms of, 20. referee's report of, 21. order confirming report of, 22. STEICT FORECLOSTJEE, complaint in action for, 39. judgment in action for, 40. order extending time for redemption, 41. final order in action for, 42. SUMMAET PEOCEEDING, to obtain possession after foreclosm-e by advertisement, 57. petition, 57. precept, 58. indorsement on precept, 59. final order in, 60. warrant for possession, 61. sheriff's or constable's return on, 62. SUMMONS, to attend reference preHminary to judgment of fore- closure, 7. to attend reference as to surplus, 34. SUEPLUS PEOCEEDING, in action to foreclosure, 30-38. notice of claim to surplus, 30. affidavit on applying for reference as to claims for surplus, 31. notice of motion for reference as to claim for surplus, 32. order of reference as to claims for surplus, 33. summons to attend reference as to surplus, 34. certificate of clerk as to who have appeared and filed claims, 35. referee's report on claims to surplus, 36. notice of motion to confirm report and distribute surplus, 37. order confirming report and directing distribution of sur- plus, 38. TEEMS OP SALE, under judgment of foreclosure, 20. UNDEETAKING an appeal from judgment of foreclosure, 17. another form, 18. WAEEANT, in summary proceeding, 61. sheriff's or constable's return on, 62. GE:N^EIIAL IlS^DEX References are to Sections. ACTION to foreclose equitable lien, 71-75. for damages caused by waste, 188-191. for damages for unlawfully cancelling lien, 358. to cancel mortgage, tender must be kept good, 399. to discharge mortgage of record, 424. who may bring, 425. for damages for refusal to execute discharge, 426. to cancel discharge and reinstate mortgage, 431. for damages for unauthorized discharge, 438. by mortgagor on poUcy of insurance, 551. by mortgagee, 552. by both mortgagor and mortgagee, 553. See Insckance. on covenant to assume, 575. See Assuming Moktgage. to remove mortgage as a cloud, 697. for maliciously filing notice of lis pendens, 774. by receiver of rents, 905. ACTION AT LAW, allegations as to, ia complaint, 791. effect of, on action to foreclose, 854. when complaint shows judgment at law, 855. may be maintaiaed, 1084. effect of judgment on right to foreclose, 1084, 1087. after conveyance with covenant against mortgage, 1085. mortgaged property cannot be sold under execution, 1086. effect of judgment as an estoppel, 1088. action on guaranty, 1089. leave of court to sue after foreclosure, 1090. principles of restraining right to sue, 1091. when leave to sue is necessary, 1092. independent collateral obligation, 1093. 51 802 GENERAL INDEX. TSfSST' ACTION AT 'Lky^— continued. granting leave to sue nunc pro time, 1094 when leave to sue will be denied, 1095. when foreclosure and action both permitted, 1096. ACTION TO FOEECLOSE, proper plaintiffs in, 718. necessary defendants in, 729. proper defendants in, 741. whether assignor of mortgage is proper defendant, 743. defendants obligated for debt, 747. unnecessary parties, 751. See Pabtibs. nature of the action, 775. practice governed by general rules, 775. See Peactice in Actions to Foreclose. nature of, 841. what may be litigated in, 841. title of mortgagor cannot be tried, 842. or title adverse to that of mortgagor, 843. when a defendant's right is prior to the mortgage, 844. conflicting claims to priority, 845. See Defense. counter-claims in, 870. See Countee-Claims. when a receiver will be appointed, 885. See Eeceivee or Eents. costs in, 908. See Costs. by whom sale to be made, 921. See Sale in Fokeclosure. ACTION TO EEDEEM baixed after twenty years, 693. when right of action accrues, 694. where several persons are entitled to redeem, 695. admissions of mortgagee, 696. proper remedy of mortgagor, 699. purely equitable, 700. principles of accounting, 700. where mortgage is paid and discharged, 701. parties plaintiff, 702. must have interest in or lien upon the land, 702. parties defendant, 703. where action is by junior lienor, 704. where mortgagee in possession has made transfer, 705. after defective foreclosure, 705. '1^'^Sr.'"' GENERAL INDEX. 803 ACTION TO BED'EEM.— continued. when mortgagor has conveyed with warranty against mort- gage, 706. when mortgage has been assigned, 707. complaint in, 708. offer to pay material to question of costs, 709. demand for alternative relief, 710. rights of parties after defective foreclosure, 711. defenses to redemption, 712. judgment in, 713. fixing time for redemption, 714. extending time for redemption, 715. effect of failure to redeem within time Hmited, 716. costs in, 717, 920. ACCEPTANCE of mortgage, 90. of conveyance containing covenant to assume, 567 et seq. See Assuming Mortgage. ACCOUNTS when mortgagee thinks he has title, 248. liability to account begins, 249. between mortgagee and junior Hens, 251. See MoBTGAGEE IN POSSESSION. between mortgagor and mortgagee, 245-264. rents received by mortgagee, 245, 246. duty of mortgagee in possession, 246-250. ACKNOWLEDGMENT of mortgage, 86. to entitle paper to record, 461. See Eecobding Acts. ADDITIONAL ALLOWANCE of costs in foreclosure cases, 916. discretionary percentage, 917. ADMINISTRATOE OF MORTGAGOR, not primarily' Hable for debt, 265. binding force of letters of administration, 359. ADJOURNMENT of sale under judgment of foreclosure, 938, 977. restraining sale by order of court, 939. two days' notice required, 939. ADYBRSE POSSESSION of mortgaged lands, 80. ADVERSE TITLE may be acquired by mortgagee, 243. cannot be tried in action to foreclose, 751, 842, 843. AFFIDAYITS on applying for judgment of foreclosure, 801. AFTER ACQUIRED TITLE of mortgagor, 27. of railroad, 158, 159. when covered by mortgage, 159. AGENT, authority to collect interest, 231. 804 GENERAL INDEX. •^tJ'SS'™" AG-'ENT— continued. of mortgagee, authority to receive payment, 354. notice to, 493. bonus exacted by, is not usury, 641. unless for benefit of principal, 642. fcaowledge of principal, 642. See UsuEY. AGREEMENT for lien, enforced as such, 46. for priority, 281-283. where Jhere are intermediate liens, 296. See Priority. ALTERATION .of mortgage after execution, 87, 88. AMENDMENT of notice of lis pendens, 769. of complaint after filing notice of lis pendens, 770. See Notice or Pendency of Action. ANSWER aUeging usury, 664. See Defense. APPEAL from judgment of foreclosure, 835. stay of proceedings on, 838. appellant may elect between undertakings, 839. substituting receiver for undertaking, 840. from discretion of trial court as to costs, 909. order granting or denying resale, 987. ASSIGNMENT, of vendor's hen, 58. of collateral mortgage, 198. of parts of mortgage debt to several persons, 294. priorities between assignees, 294. assignees bound by equities controlling priorities, 296. of mortgage may be by parol, 298. presumption against parol assignment, 306. -■ is sufficient if debt is transferred, 298, 300. though assignee did not know of security, 300, 301. no seal required, 298. in blank, with authority to agent to fill name, 298. of mortgage given for indemnity, 298. does not pass by assignment of debt, 300. by foreign executor or administrator, 298. by one of several mortgagees, 299. of several executors, 299. but not by one of several trustees, 299. of one of several notes secured by mortgage, 301. priorities between assignees, 301. of lien apart from debt not valid, 302. ''fSSrr' GENERAL INDEX. 805 ASSIGNMENT— eonfewMed when there is no debt, 303. mortgage lien does not pass by conveyance of land, 302. but assignment of mortgage construed to pass bond, 304. and conveyance by mortgagee sometimes transfers lien, 304. when the defeasance is secret, 304. or after defective foreclosure, 307. bonds should be delivered to assignee, 305. noting on margin, of record, 307. of negotiable note secured by mortgage, 308. cuts off defenses, 308. Uen controlled by recording acts, 309. is subject to equities of debtor, 310. where question is as to validity of debt, 311. latent equities, doctrine of, 312. is subject to equities of persons claiming rights in the proper- ty, 313, 314. as to equities of third persons claiming rights in the mortgage, 316-322. rules for determiaing what equities destroyed by, 323. when mortgagor is estopped, 324. See Estoppel. what covenants are impHed in notice of, to mortgagor, 334. record of, to whom notice, 334. compelled to prevent merger, 363. is within recording acts, 458, 496. record of, is notice to whom, 498. must be recorded among mortgages, 502. noting on margin of record of mortgage, 503. of mortgage at discount, not usury, 638. unless it is a cover for usury, 639. payment of discount by mortgagor, 640. mortgagor estopped from alleging usury, 649. as security assignee may foreclose, 718. assignor proper defendant, 743. purchase by assignee at foreclosure sale, 745. by parol, assignor proper defendant, 744. enforcing implied covenants of assignor, 746. mortgagor's defense because of iuvalidity of, 883. consideration of, immaterial, 884. right to, on redeeming, 685, 686. refused if equity requires, 688. 806 GENERAL INDEX. T^ffrS"' ASSIGNMENT— con^mwed as to junior lienor whose claim is not due, 689. how mortgagee compelled to execute, 690. rights of assignor and assignee not settled by judgment and sale, 1022. ASSIGNMENT FOR CEEDITOES, assignee cannot allege usury, 659. unless debt not specifically mentioned, 647., See UsuET. ASSIGNEE IN BANKRUPTCY, necessary party to action to fore- close, 732. ASSIGNEE OP MORTGAGE entitled to possession of bond, 805. rights as against equities of third persons, 308 et seq. See Assignment. as security may acknowledge satisfaction, 353. may foreclose, 718. ASSUMING MORTGAGE, grantee assuming is principal debtor, 216. covenant to assume not within recording acts, 459. by parol, 565. who bound by covenant, 566. acceptance of conveyance containing covenant, 567. grantee not bound without acceptance, 568, 569. stranger to deed not held on covenant, 570. contract outside of deed, 570. conveyance merely subject to mortgage, 571. purposes of, 571. does not import covenant, 571. language importing covenant, 572. language not importing covenant, 573. extent of liability, 574. form of action on covenant to assume, 575. action at law by mortgagee on covenant, 576. action by grantor against grantee on covenant, 577. when enforceable, 577. action by grantee of mortgagor, 577, 578. by owner of land not primarily chargeable, 578. grounds upon which mortgagee may enforce action on cov- enant, 579. action at law by mortgagee, 582. covenant contained in deed which is really a mortgage, 583 et seq. effect of agreement when grantor is not obligated, 588. chain of successive liabilities must be unbroken, 590. mortgagor becomes surety after grantee assumes, 591. ^%%^S£:' GENERAL INDEX. 807 ASSUMING MOETGAGE— conimwec?. results of mortgagor's rights as surety, 592. mortgagor still liable to mortgagee, 593. requesting mortgagee to foreclose, 594. defenses to covenants, 595. covenant must be valid between parties to it, 595. language not importing covenant, 596. failure to make claim against estate of deceased, 597. relief against fraud or mistake, 598. failure of consideration for covenant, 599. eviction by paramount title, 600. release by grantor, 601, 602, 603. rule in New Jersey, 604. grantee assuming, proper defendant in foreclosure, 748. ATTOENEY, authority to coUect interest, 231. authority to receive payments on mortgage debt, 354. possession of bond evidence of authority, 354. notice to bind client, 384, 493. appearance by, in action to foreclose, 783. without authority, 784. BONA FIDE MOETGAGEB, when indorsement is made on faith of mortgage, 100. BONA FIDE PUKCHASEE, rights against secret defeasance, 21. protected by certificate of satisfaction, 418, 420, 421. protected by recording acts, 482. purchase from one having notice, 483. after acquired title, 480. mortgage containing covenants for title, 480. BOND, recital of in mortgage, 95-99. mortgage is valid without covenant, 102. should be delivered to assignee, 305. possession of, evidence of authority to collect, 354. should be surrendered on payment in fuU, 355. possession by mortgagor evidence of payment, 416. effect of usury, 632. See UsuBT. production of, on trial, 813. BTJEIAL LOTS, mortgages of, 146-148. BOEEOWEE, agreement for usury must be made by, 637. CEMETEEY LOTS, mortgages of, 146-148. CEETIFICATE OF SATISFACTION to discharge mortgage of record, 417. See DiscHAKGE. 808 GENEEAL INDEX. Befere,>^_are to Sections- CERTIPICATE OP SATISFACTION— coniSmMec?. action to set aside and cancel, 431, 433-438. procured by felony, 431. inoperative if not delivered, 432. though recorded, 432. is withia recording acts, 458. CESTTJIS QUE TEUST, when necessary defendants in foreclosure, 736. Hmitations of rule, 737. vp^hen they are exceedingly numerous, 738. CHAEITABLE SOCIETIES, mortgages by, 130. CIVIL LAW, mortgages under, 2. CLUBS AND SOCIETIES, mortgages by, 125. COMMISSIONERS of U. S. deposit fund, 506. See Loan Commissionebs. COMPLAINT, to assert right of subrogation, 456. to exclude defense of usury, 654. to set aside mortgage as usurious, 665. vrho must offer to pay, 665, 666, 667. See Usury. in action to redeem, 708. offer to pay material to question of costs, 709. demand for alternative relief, 710. in action to foreclose mortgage, 790. allegation as to proceeding at law, 791. as to claims of defendants, 792. demand for judgment, 793. verification, 795. supplemental, ia action to foreclose, 794. allegation on which to raise question of priority, 846. COMPOUND INTEREST, when allowed, 631. CONDITIONAL SALES, nature and vaUdity of, 31. in some respects similar to mortgages, 32 et seq. absence of debt as a test, 33. not conclusive, 34. remedies reserved, a test, 35. inadequacy of price, 36. subsequent dealings of parties, 37. special circumstances control, 38. recording of paper as a mortgage, 39. examples of, 40. CONSIDERATION for extension of time of payment, 204. CONSOLIDATION of actions to foreclose, 788. CONSTRUCTION of mortgage, 101. ""^'ffirr' GENERAL INDEX. 809 COT^STEUCTION— continued. of mortgages for future advances, 196. of default clause, 230. C0NVEYA2^CE, clause in, to prevent merger, 371. what is, within recording acta, 457, 458. must be recorded in different book from mortgages, 471, 472. intended as security, record of, 472. subject to mortgage, 652, grantee cannot allege usury, 652. reason of the rule, 653. plaiatiff must allege conveyance, 654. mortgagor cannot permit defense after conveyance, 655. except as to grantee's personal covenant, 656. mortgagor's defense after, 656. right of defense reserved in deed, 658. See UsuBY. intended as mortgage, release by mortgagor, 679. subject to mortgage, right of grantee to defend, 878. permitting defense against mortgage, 881. COEPOEATION, vendor's Hen against, 56. power to mortgage, 114. executing mortgage by, 115. under manufacturing act, mortgages by, 116-123. iSfee MANTjPAOTUEiNa CoEPOEiTioN, Eeligious Coepobation, Clubs, and Societies. purchase-money mortgage by, 121. gasUght companies, 124. clubs and societies, 125. religious, 126-130. charitable societies, mortgages by, 131. national banks, mortgages to, 132. See National Banks. cannot defend on ground of usury, 663. appointing receiver of rents against, 893. COSTS in proceeding to mortgage lands of infants, 140. or insane persons, 140. as against dowress, 627, 920. in surplus proceedings, 627, 919, 1074. of defective foreclosure, not collectible, 692. on redemption to be paid by plaintiff, 692. in action to redeem, 717. in actions to foreclose, 908. are in discretion of court, 908. 810 OENEEAL IWDEX. TSSifJ" COSTS— continued. appeal from discretion of trial court as to, 909. rules controlling granting of, 910. two foreclosures against the same property, 911. notice of no personal claim as affecting right to, 912. when payable out of the fund, 913. tender after action brought and before judgment, 914. offer of judgment in foreclosure cases, 915. additional allowance in foreclosure cases, 916. discretionary additional allowance, 917. amount of, in judgment by default, 918. in surplus proceedings, 919, 1074. who charged with, 919. widow not chargeable with, 920. in action to redeem, 920. principles controlling, 920. allowed to purchaser on resale in foreclosure, 1011. who chargeable with, 1012. of foreclosure by advertisement, 1152. taxation of, 1153. COUNSEL fees allowed to mortgagee in possession, 257. COUNTEE-CLAIM in action to foreclose, 870. on contract, 870. who may set up, 870. requisites of, 872. for damages, 873. what are proper, 874. ' litigation between defendants, 875. code substitute for cross-bill, 876. what may be litigated, 877. COUNTY TREASUEEE, power to acknowledge satisfaction, 350. COVENANT for title contained in mortgage, 27. to pay not imphed, 102. must be specific and distinct, 103. to assume payment of mortgage, 565 et seq. See Assuming Moetgage. CKEDITOE AT LAEGE, right of subrogation to securities of surety, 455. no right to redeem, 675. not proper defendant in foreclosure, 754. CEOSS-BILL, code substitute for, 875. DAMAGES, counter-claim for, in action to foreclose, 873. See Counter- Claim. tSSrS'' GENEEAL INDEX. 811 DEBT, not essential to constitute mortgage, 14, 102, 103. absence of, a test of conditional sale, 33. absence of covenant to pay, not conclusive, 34. must be valid, 92. overstating a badge of fraud, 96. inaccuracies ia description ofi 97. parol evidence to aid description, 99. of manufacturing corporation secured by mortgage, 123. of deceased ovmer of land a Uen, 145. extension of time of payment, 204. See Time. extension does not impair lien, 212. several secured by same mortgage, priority of, 293. assignment of parts of, to different persons, 294. transfer of, carries mortgage, 298, 300. See Assignment. discharge of cancels lien, 340. ■See DiscHAEGE, Payment. changes in form of, 389-393. merger of, in judgment, 389-393. effect of discharging lien upon, 427. not insured under policy of insurance, 559, 560. liability of married woman for, 611. See Mabeied Women. usury in, 632. See UsTiET. DECEASED PERSONS, mortgage of lands of, to pay debts, 144,* 145. DEDICATION TO PUBLIC USE, when mortgagee bound, 151. DEED OF CONVEYANCE, lien reserved in, 49, 58. shown to be mortgage for future advances, 194. DEFAULT, practice on opening, in action to foreclose, 879. DEFENDANTS, litigation between, 875-877. See Pabty. DEFENSE, of defect of parties in action to redeem, 707. to redemption, 712. foreclosure by prior mortgagee no bar to foreclosure by junior mortgagee, 789. what can be litigated in action to foreclose, 841. title of mortgagor cannot, 842. nor title adverse to mortgagor's, 843. where defendant claims Hen or title prior to mortgage, 844. conflictiag claims to priority, 845. pleading as to priority, 846. 812 GENEEAL INDEX. Vs^ZS" DEFENSE— conimwed what constitutes, to foreclosure, 847. legal defenses, 847. equitable, 847. mortgage procured by fraud, 848. illegal consideration for mortgage, 849. correcting mortgage for fraud or mistake, 850. making description definite, 851. defect of parties, how objected to, 852. persons having Uens or interests, 853. persons liable for debt, 854. proceedings at law for same debt, 854. where complaint shows judgment at law, 855. infancy, 856. purchase-money mortgage of infant, 857. disaffirmance of mortgage by infant, 857. mortgage for purchase money, failure of consideration, 858. prior incumbrance on the property, 858. defect of title in conveyance to mortgagor, 859. mortgage on one parcel as consideration for conveyance of another, 860. consideration fails upon eviction, 861. what constitutes eviction, 862. where mortgagor is unable to obtain possession, 863. foreclosure ordered without judgment for deficiency, 864. fraud practiced on mortgagor, 865. mutual mistake as to title, 866. mistake as to quantity of land, 867. agreement to protect mortgagor against prior claims, 868. remedies of mortgagor, 869. what counter-claims are peTmissible, 870. See Counter-Claims. litigation between defendants, 875-877. of grantee who has taken subject to mortgage, 878. mortgage void for usury, 878. general rule, 879. ; distinctions to be observed, 880. conveyance which permits defense, 881. propositions reconciling cases, 882. of defect of title to the mortgage, 883. invalid assignment, 883. consideration of assignment immaterial, 884. to application for receiver of rents, 892. Vi^SSnT GENEEAL INDEX. 813 DEFAULT CLAUSE, inserted by agent or trustee, 82. properly inserted and is enforceable, 228. is for benefit of mortgagee only, 229. conbtruction of, 230. place where interest is payable, 231. excusing default, 232. practice on excusable default, 283. when default is waived, 234. DEFEASANCE, form of, not material, 15. must enter into original contract, 16. parol, 18. burden of proof, 19. pleading to establish, 20. destroyed by sale to bona fide purchaser, 21. agreement at inception of mortgage, 93. cannot be subsequently enlarged, 94. DEFECTIVE FORECLOSURE, purchaser may be mortgagee in pos- session, 238, 239. right of redemption after, 692. purchaser stands as assignee of mortgage, 692. junior mortgagee not a party, may redeem or foreclose, 692. not obliged to pay costs of defective foreclosure, 692. action to redeem after, 705. rights of parties as to redemption, 707. rights of purchaser under, 1027. rights of persons not bound by judgment, 1028. costs of, 1029. remedies of purchaser under, 1030. strict foreclosure to remedy, 1081. parties to action, 1082. judgment, 1083. foreclosure by advertisement, 1142. cured by strict foreclosure, 1143. DEFENSES to foreclosure of equitable hen, 73. of infancy, must be interposed, 135. of extension of time of payment, 205. to covenant to assume mortgage, 595. See Assuming Mobtgagb. who may defend on ground of usury, 647. rights to allege usury not transferable, 648. See UsuKY. pleading usury, 664. non- joinder of necessary defendants, 740. S14 GENERAL IlfDEX. "t^tSS" DEFENSES— con^mwed adverse interests cannot be litigated, 751. contest as to priority, 752. DEEICIENCT, liability of married woman for, 611. See Mareied Womau. defendants for action to foreclose chargeable witli, 747. person assuming mortgage, 748. guarantor of payment, 749. or of collection, 749. personal representatives of mortgagor, 750. provision in judgment of foreclosure as to, 827. when not allowed, 828. adjusting liabilities between defendants, 829. personal judgment for, without foreclosure, 830. judgment for, against personal representatives of obligor, 831. docketing judgment for, £32. execution for, 882. DESCEIPTION of debt, 95-99. of mortgaged real estate, 79. reforming, in action to foreclose, 79. correcting mistake, 850. making definite, 851. DEVISEE must satisfy mortgage, 265. limitations of rule, 268. DISCHAEGE of surety by extension of time, 218-220. by refusal of creditor to coUect debt, 221-225. by collusion between debtor and creditor, 226. of guarantor of collection by neglect, 227. by release of parcel primarily liable, 277. what payment will discharge, 835. keeping mortgage alive by agreement, 836. mortgage kept alive to do equity, 337. adjudged, though assignment be taken, 388. of debt cancels lien, 340. lien remains though remedy for debt be lost, 341. who may receive payment, 342. of record, 342. upon whose certificate, 342. mortgage to secure several debts, 843. unrecorded assignment, 844. forged certificate of satisfaction, 845. certificate by agent, 846. one of several mortgagees, 347. ^^%SS:' GENEEAL INDEX. 815 DISCHAEGE— coniOTwed one of two or more executors, 348. by receiver, 349. county treasurer, 350. foreign executor or administrator, 351, 352. assignee holding as security, 353. possession of bond evidence of authority, 354. bond to be produced on payment, 355. where payment should be made, 356. inquiry as to authority of agent, 357. remedy for unlawful cancelling lien, 358. payment to administrator duly appointed, 359. by merger, 363. See Meegee. by new obligation or security, 376, 389-393. by release of part of security, 381. reason for the rule, 382. mortgagee must have notice of facts, 383. what notice is sufficient, 384. effect of release, 385. two parcels of land equitably bound pro rata, 386. only when release is in violation of equitable rights, 387. only to extent of value of property released, 388. by extending time for payment, 394. by estoppel, 395. by tender ^f payment, 396. See Tendee. by Umitation, 410. See Peesumption. of mortgage upon the record, 417. certificate of satisfaction within recording acts, 418. various methods of evidencing discharge, 419. effect of record of discharge, 420. who may execute certificate of satisfaction, 421. officers of limited powers, 422. right to demand certificate of satisfaction, 423. actions to discharge mortgages, 424. who may briag action, 425. action for damages for refusal to discharge, 426. effect of discharging lien upon debt, 427. special proceeding to discharge of record, 428-430. setting aside and reinstating mortgage, 431. who may resist reinstatement, 436. 816 GENEEAL INDEX. Vs'^ZS" DISCHARGE— corifeited right lost by neglect, 437. action for damages for unauthorized discharge, 438. reissue of paid mortgage, 439. mortgagor estopped, 442. junior titles and liens protected, 443. by failure to foreclose on request, 594. DOWEE in equity of redemption, 25, 620. in partnership real estate, 108. inequitable claim for, defeated by subrogation, 453. as against purchase-money mortgage, 621. in surplus after foreclosure, 622, 1058. value of, how estimated, 623. duxing life of husband, 623. right of dowress to redeem, 624. as against all persons but mortgagee, 625. barring right of, 626. DRUNKARDS, proceedings to mortgage lands of, 142, 143. costs in, 140. EASEMENT, effect of foreclosure sale upon, 1024, 1025. EJECTMENT, mortgagee cannot maintain, 24. right of mortgagee to bring, abolished, 235, 1098. present right of mortgagee to possession, 236. See MOETGAGEB IN POSSESSION. by mortgagee prior to revised statutes, 1097. effect of statute, 1098. EMBLEMENTS, lien of mortgage on, 160-165. EQUITABLE MORTGAGES, definition, 41. by deposit of title deeds, 42. rule in this State, 43-45. agreement for Hen enforced, 46, 47. mortgage defectively executed, 46. examples of, 48. reserved in deed of conveyance, 49. agreement for may be recorded, 50. created by parol, 51. priority as against subsequent claims, 65-70. remedies of lienor, 71-75. EQUITABLE LIENS, nature of, 41 et seq. See Equitable Mobtgages. defective mortgage enforced as, 86. EQUITIES as affected by assignment, 308 et seq. See Assignment. "^tSrS:' GEKEBAL INDEX. 817 EQUITY or KBBBMPTION, origin of, 8. destroyed by sale to bona fide purchaser, 21. purchase of, by mortgagee, 30, 678. regarded with suspicion, 30, 678. must be by grant under seal, 30. nature of,, 673. See Eedemption. ESTOPPEL of mortgagor as against assignee, 324. only to extent of consideration, 325. form of statement to create, 326. statement must be acted on, 327. must be believed, 327. must be fairly obtained, 328. created by conduct without words, 380. by statements of agent, 331. who bound by, 332. authority of agent established by, 346. merger controlled by, 366. discharge of mortgage by, 395. of mortgagor to allege usury, 649. See UsuB¥. EVICTION, a defense to covenant to assume, 600. See AsstnaiNG Moktgagb. EXECUTION AGAINST PEOPEETT for deficiency, after sale in fore- closure, 827. on judgment at law for debt, 1086. EXECUTIOSf OP MOETOAGE defective, when enforced, 46. must be under seal, 86. must be aeknowledged, 86. name of mortgagee must be inserted, 86, 87. authority to fill in, 87. alteration after, 87, 88. condition should give notice of amount, 95. by corporation, 116. by manufacturing corporation, 116-122. EXECUTOE, power to mortgage, 83-85. of mortgagor not primarily Hable for mortgage, 265. one of several, may assign mortgage, 299. one or more may acknowledge satisfaction, 348. how to be described ia mortgage, 724. may foreclose against co-executor, 725. ySeeFoEEIGN ExECUTOE OK Admihisteatob. 52 818 GENERAL INDEX. W^.^.--^ to Sections. EXECUTOR— cojiiSmMed of mortgagor may be defendant in action to foreclose, 750. EXTENSION OF TIME for payment, 204^220. may be by parol agreement, 204. effect of, on rights of surety, 205, 213-220. consideration for, 206. must bind both debtor and creditor, 207. by renewal of notes, 208-212. what are renewals, 209, 211. change of obligation, 210. does not impair hen, 212. for usurious consideration, 668, 671. EXTENT OP LIEN on after-acquired title, 27. EBBS of receiver of rents, 907. of officer making sale in foreclosure, 941. of auctioneer, 942. FIXTURES, general rule as to, 166. time of annexation, 167. tests as to what passes under mortgage, 168. permanent character of annexation, 169, 179. intention in annexation, 170, 178. examples, 171, 172, 180. rule between lessor and lessee, 173. where tenant of mortgagor adds fixtures, 174. conflicting claims to, 175-180. restraining removal of, by injunction, 177. FORECLOSURE of equitable Hen, 71-75. may be brought by mortgagee in possession, 244. of mortgages to loan commissioners, 514. See Loan Commissioneks. method of extinguishing right to redeem, 677. defective, redemption after, 692. See Action to Pobbolose ; Defective Pobeclosube ; Foeeclosure by Advbbtisembnt ; Sale in Fokeclosuee ; Strict Fokeclosdee. FORECLOSURE. BY ADVERTISESIENT, sale under usurious mort- gage, 669. general policy of the statutes, 1099. early statutes, 1099. powers to sell are customary, 1100, remedy must be strictly pursued, 1101. statute regulates the remedy merely, 1102. practice before the sale, 1103. ^*S^' GENERAL INDEX. 619 FORECLOSURE BY ADVERTISEMENT— conimwed requisites to justify foreclosure, 1104. what mortgages may be foreclosed, 1104. who may foreclose, 1105. notice of sale, how given, 1106. how served, 1107. filing with clerk, 1108. pubUshing, 1109. service by mail, 1110. who to be served, 1111. personai representatives of mortgagor, 1112. wife of mortgagor, 1113. junior lienors, 1114. contents of notice of sale, 1115. purpose of sale to l?e set forth, 1116. executors or administrators, 1117. description of mortgage, 1118. amount claimed, 1119. description of mortgaged premises, 1120. incumbrances, 1121. time and place of sale, 1122 , sale, 1123. postponing sale, 1123. manner of conducting, 1124. rules as to sale, 1125. mortgagee may purchase, 1126. in parcels, 1127. terms of, 1128. under invalid mortgage, 1129. restraining sale by injunction, 1130. when injunction refused, 1131. damages from injunction, 1132. lands without the State, 1133. appointing referee to make sale, 1184. setting aside sale, 1135. bona fide purchasers protected, 1136. rules as to action to set aside sale, 1137. effect of receiving surplus money, 1138. title of the purchaser, 1139. statute, 1139. who are bound, 1140. questions of priority, 1141. 820 GENERAL INDEX. ^^^iSL"" FOEECLOSUEE BY ADVERTISEMENT— coniinMed defective foreclosure, 1142. cured by strict foreclosure, 1143. evidence of the foreclosure, 1144. contents of affidavits, 1144. affidavits may be filed and recorded, 1145. deed not necessary, 1146, 1149. certifying affidavits, 1147. effect of affidavits, 1148. sufficiency of affidavits, 1150. contradicting affidavits, 1151. costs aUovred, 1152. taxation of, 1153. distribution of surplus, 1154. prior to act of 1867, 1154. by the Supreme Court, 1155. by the surrogate, 1156. object of statutes, 1157. obtaining possession by summary proceeding, 1158. what may be litigated, 1159. FOEEIGN EXECUTOR OE ADMINISTRATOR may assign mort- gage, 298. may acknov^ledge satisfaction of mortgage, 351. may foreclose by advertisement, 352, 728. cannot foreclose by action, 727. objection must be taten by answer or demurrer, 727. FOREIGN CORPORATION, purchase by, at foreclosure sale, 991. FORGERY of certificate of discharge, 345, 420. FORMS, appendix of, page 747. index to, page 797. FRAUD, overstating debt a badge of, 96. in mortgages for future advances, 192. covenant to assume inserted by, 598. See Assuming Mortgage. defense to mortgage, 848, 850. as ground for setting aside foreclosure sale, 977. FUTURE ADVANCES, mortgages for, 100, 192-20a purpose of, shown by parol, 193, 194. when no sum is mentioned, 194, 195. construction of mortgages for, 196. agreement for, made subsequent to mortgage, 197. priority of mortgages for, 199. '^^'sSrS" GENEEAL IKDEX. 821 FUTURE ADYA'NGES— continued. where the advances are obUgatory, 199. not obligatory, 200. notice to charge mortgagee, 201. as against grantee of mortgagor, 202. recording of mortgages for, 203, 466. stipulated for in mortgage for purchase money, 286. agreement for advances made after mortgage, 440. GEANTBE OF MOETGAGOE is principal debtor, 216. of part of estate, cannot redeem his portion only, 680. subrogation on redeeming entire estate, 683, 684. GUAHANTOE, insurable interest of, 529. See Insubance. of payment not discharged by neglect of creditor, 227. of collection discharged by neglect of creditor, 227. proper defendant in action to foreclose, 749. action agaiast guaranty of collection, 1089. of payment, 1089. GUAEDIAN, mortgage of, to himself as guardian, 137. certificate of satisfaction by, 421. power to release mortgage hen, 357. HEIE must pay mortgage debt, 265. HOMESTEADS, mortgages of, 146. HUSBAND AJSfD "WUPE, mortgages between, 113, 609. marriage of mortgagor and mortgagee does not discharge, 863, 372. HTPOTHECA, m Eoman law, 2. ILLEGAIj CONSIDEEATION for mortgage, 849. IMPEOVEMENTS, covered by vendor's lien, 55. made by mortgagee in possession, 253-256. INADEQUACY OF PEICE, to distinguish mortgage from conditional sale, 36. as ground for granting resale in foreclosure, 973. is evidence of irregularity, 974. INDEMNITY, assignment of mortgage given for, 298. does not pass by assignment of debt, 300. INDEXING notice of lis pendens, 768. See Notice of Pendency of Action. INFANT, mortgages by, 134. ratification after coming of age, 134. what constitutes ratification, 134. disaffirmance after coming of age, 135. 833 GEKEEAL INDEX. ''T/SS" INFANT— oowfanwed what constitutes disaffirmance, 135. defense of infancy must be interposed, 135. subrogation of mortgagee paying valid liens, 136. mortgage executed by guardian to himself, 137. proceeding to mortgage lands of, 138-140. must conform to statute, 139. costs, 140. defense to mortgage by, 856. purchase-money mortgage of, 856. ratification by, 857. sale in foreclosure set aside for benefit of, 984. surplus derived from sale of lands of, 1064. INJUNCTION to restrain waste, 177, 181-187. provision of code, 182. who may apply for, 183. inadequacy of security, 184. insolvency of mortgagor, 185. limitations of, 186. not proper against foreclosure by action, 546. to restrain foreclosure by advertisement, 1130. when refused, 1131. damages from, 1132. lands without the State, 1133. INSTAIMENTS, practice on foreclosure, debt payable in, 814r-818. See Peactice in Actions to Pobbclosb. INSURANCE, clause providing for, 82. premiums not commonly allowed mortgagee, 264. against fire, 529. insurable interests of parties to mortgages, 529. of mortgagor who has conveyed, 529. of guarantor of mortgage debt, 529. where mortgage is by deed absolute, 529. of mortgagee, 530. when iQsurable interest of mortgagor ceases, 531. iQsurable interest of purchaser at foreclosure, 532. form of contract of insurance, 533. contract in name of mortgagor, 538. loss if any payable to mortgagee, 533. transfer by mortgagor before loss, 534. effect of act or default of mortgagor, 534, 535. over-insurance by mortgagor, 536. ■^to&SK.*"' GENERAL INDEX. 833 INSURANCE— coniintiec/, policy insuring " as interest may appear," 537." property unoccupied, 538. condition against use of property, 539. against alienation, 540. mortgage not a violation of, 540. nor assignment in insolvency, 540. nor foreclosure, 540. nor executory contract of sale, 540. other insurance forbidden, 541. satisfaction of mortgage, 542. waiver of conditions, 543. " mortgagee clause " in policy, 544. rigli^ of insurer under, 545. mortgagee bound to good faith, 545. agreement to insure contained in mortgage, 546. lien of mortgagee on mortgagor's insurance, 546. recording of covenant, not notice, 547. parol contract to insure, 548. insurance by mortgagee without agreement with mortga- gor, 549. enforcing payment by insurers, 550. proof of loss, 550. action by mortgagor for insurance, 551. actipn by mortgagee, 552. measure of damages, 552. joint action by mortgagor and mortgagee, 553. rights of parties, premium paid by mortgagor, 554. where mortgagor has agreed to insure, 554. insijrance by mortgagee at expense of mortgagor, 555. agreement with insurer for subrogation, 556. appHcation of insurance money, 557. rights of parties, premium paid by mortgagee, 558. mortgagor has no claim to insurance, 558. nature of contract, 559. debt is not insured, 560. measure of damages of mortgagee, 560. damages repaired by mortgagor, 561. right of insurer to be subrogated to mortgage, 562. nature of right of subrogation, 562. subrogation only allowed to do equity, 563. agreement for subrogation, 564. 824 GENERAL INDEX. ^S'iS^" INTEEEST, when payable, and to whom, 231. rate of, 628. after maturity of contract, 628. since act of 1879, 629. computing, on partial payments, 630. compound, 631. INTEREST CLAUSE,, force and effect of, 224-228. See Default Clause. INVEESE OEDER OF ALIENATION, rule charging parcels in, 271, 272. sale of parcels in, 958. measuring equities, 959. JOIKDEE OF ACTIONS, to foreclose two or more mortgages, 786. when only one action is proper, 787. JOINT MORTGAGEES, one of two or more, may acknowledge satis- faction, 347. JUDGMENT, priority, as against purchase-money mortgage, 284, 288. as against unrecorded mortgage, 290. docket marked " lien suspended on appeal," 290, 540. agreement controlling priority, 297. controls docket, 297. merger of mortgage in, 379. merger of judgment in, 380. where lienor establishes usury, 657. ' in action to redeem, 713^ fixing time for redemption, 714. enlarging time, 715. effect of failure to redeem ia time limited, 716. when no notice of lis pendens was filed before, 773. of foreclosure and sale, form and contents o4 820. provision in, as to order of sale, 822. as to prior incumbrancers, 823. action to foreclose absolute deed as mortgage, 824. amending, 826. who may be appointed referee, 821. for deficiency after sale in foreclosure, 827. See Deficiency. of foreclosure, varied by subsequent contract, 833. force and effect of, 834. in action for strict foreclosure, 1083. at law for debt, effect of on right to foreclose, 1087. effect as estoppel, 1088. V^^,^:' GENERAL INDEX. 825 JDNIOE LIENOE, rigHts acquired by paying taxes, 29. may not discharge by tender, 409. right of subrogation of, 448. may redeem, 675. sale for benefit of, 948. supplemental order for sale, 949. KINGS COUNTY, statute as to sales in foreclosure, 926. LACHES, right to redeem lost by, 698. LANDS HELD ADVEESELY, mortgage of, 80. LAPSE OP TIME. See Limitation. LEASE, adjudged a usurious mortgage, 632. efEect of foreclosure sale upon rights under, 1026. destroyed by foreclosure, rights of tenant, 1057. LEASEHOLD ESTATES, mortgages of, 154-157. Uen of mortgagee on renewals, 154. UabUity of mortgagee for rent, 155. redemption by mortgagee from defaults, 156. mortgages of, not -violation of coTenants, 157. payable primarily out of personal assets of deceased mortga- gor, 270. chattel mortgage within recording acts if less than three years, 458. lease over three years treated as real estate, 458. LEAVE TO SUE, after foreclosure, 1090. principles on which right to sue is restrained, 1091. when necessary, 1092. independent collateral obligation, 1093. granting, nunc pro tunc, 1094. when denied, 1095. foreclosure and action on debt both permitted, 1096. LEX LOCI, usury controlled by law of place of contract, 644. LIEN, destroyed by sale to bona fide purchaser, 22. remedy of lienor, 23. equitable liens, 41 et seq. See Equitable Mobtgages. of vendor for purchase money, 52 et seq. See Vendors' Liens. of vendee for money paid, 64. of creditor of deceased owner of land, 145. of mortgage on award for improvement, 149. on right of action for damages to estate, 149. remedy of mortgagee, 150. 826 GENERAL INDEX. VsSS" LIEN — continued. on undivided interest after partition, 153. on emblements, 160-165. growing crops, 160, 163. timber, 163. nursery trees, 164. not impaired by extension of time, 212. junior, protected against inequity of prior lienor, 278. priority of, controlled by agreement, 281, 282. See Peioeity. cannot be assigned apart from debt, 302. of mortgage does not pass by conveyance, 302. unless tlie defeasance is secret, 304. or after defective foreclosure, 304. remains, though remedy for debt be gone, 341. when affected by change in form of debt, 389. subsists though debt be barred, 414. though debtor be discharged under insolvent law, 414. effect of discharging, upon debt, 427. of judgment suspended upon appeal, 504. of mortgagee on mortgagor's insurance, 546. See Insurance. LIMITATION, effect on vendor's lien, 53. presumption of payment from, 410. See Presumption. action to redeem barred after twenty years, 693. when right of action accrues, 694. where several persons are entitled to redeem, 695. admissions of mortgagee, 696. action to remove mortgage as a cloud, 697. right to redeem lost by laches, 698. LIMITED PAETNEESHIPS, mortgages by, 112. LIS PENDENS, notice of, 755. See Notice op Pendency of Action. LOAN COMMISSIONERS, origin of fund, 606. appointment of, 507. previous loans consolidated, 508. effect of record of mortgages to, 509. recording mortgages to, 510, 511. order of record, 511. change in. recording desirable, 512. enforcing payment of mortgages to, 513. "tSar^ GENERAL INDEX. 827 LOAN COMMISSIONBES— con^itmerf. foreclosure of mortgages to, 514. sale in foreclosure, 615, 522, 525. second sale, 516. right of redemption, 517, 520. surplus, 518. rights of mortgagors after default, 519. right of redemption, 520. settiQg aside sale, 521. sale in foreclosure, 515, 522. advertisement of sale, 523. service of, 524. manner of sale, 525. all commissioners should join, 526. purchase for state, 527. deed from commissioners, 528. LUNATICS, proceedings to mortgage lands of, 142, 143. costs in, 140. MAEEIED WOMAN, alteration of her mortgage by husband, 88. mortgage to, direct from husband, 113, 609. action for intentional waste, 190. bound by covenant to assume, 566. before act of 1860, 613. carrying on trade or business, 614. act of 1860, 615. burden of proof, 617. act of 1862, 618. act of 1884, 619. right of dower, 620. not as against purchase-money mortgage, 621. in surplus after foreclosure, 622. in husband's lifetime, 622. computing value of widow's dower, 623. right of dowress to redeem, 623. assignment on redeeming, 624. contribution toward redemption, 624. where mortgagor pays mortgage debt, 625. as against all persons except mortgagee, 625. wife omitted from foreclosure, 625. dower, how barred, 626. joining ia mortgage, 626. joining in deed, 626. 828 GEWEEAL INDEX.. Vs^ifnT MAEEIED WOmm—continued. husband's deed set aside, 626. costs against dowress, 627. not chargeable with' costs in surplus proceedings, 627. power to mortgage at common law, 605. under earlier statutes, 606. act of 1849, 607. to secure debt of husband, 608. charging separate estate is not mortgaging, 608. rights as surety, 610. liabUity for deficiency upon foreclosure, 611. benefit of separate estate, 612, 616. MANUFACTURING COEPOEATION, mortgage by, 116. mortgaging franchises of, 116. assent of stockholders, 116-122. form of assent, 117. who must sign, 118. when assent must be made and filed, 119. who can take advantage of lack of, 122. mortgages prior to 1875, 119. what debts of, may be secured by mortgage, 123. MEEGER, discharge of mortgage by, 363. controlled by equitable principles, 364. intervening incumbrance not protected by, 365. controlled by estoppel, 866. requisites of, 367, 368. inoperative when conveyance is set aside, 369. records showing, cannot be relied on, 370. clause in conveyance to prevent, 371. marriage of mortgagor and mortgagee, 372. taking a higher security, 373^376. no merger in void security, 377. payment of collateral cancels debt, 378. of mortgage in judgment of foreclosure, 379, 836. of cause of action in judgment, 380. of debt in securities of a higher nature, 393. MISTAKE, remedied by subrogation, 452. of recording officer, 467. omitting middle name or initial, 467. omitting seal, 468. cannot enlarge conveyance, 469. covenant to assume inserted by, 598. See AsSUMINGt MOETGAaE. "^«S«f' GBJiTEBAL INDEX. 829 M.miA.'KE— continued. does not constitute usury, 633. correcting mortgage because of, 850. error in description, 850. as ground for setting aside foreclosure sale, 981. MOETGAGE, antiquity of, 1. among the Jews, 1. under the civil law, 2. among Anglo-Saxons and Normans, 3. at common law, 4. Welsh, 5. described by Littleton, 7. right of redemption, 8, 9, 10. definition of, 12. where grant is not executed by mortgagor, 13. trust deeds treated as, 17. is a lien, 26. is a " deed " for purposes of acknowledgment, 26. after acquired title of mortgagor, 27. conditional sale distinguished from, 31-40. 8e^ GoNDmoNAi, Samjb. equitable,- 41 et seq. See Equitable Mortgages. defectively executed enforced as lien, 46. rules controlling conveyances applicable, 76. law of place where land is located, 76. and where debt was contracted, 76. what may be mortgaged, 76. of equitable interest, 77. of undivided interests, 78. description of mortgaged real estate^ 79. of lands held adversely, 80. executed under powers, 81. may contain customary clauses, 82. devise of lands to be mortgaged, 83. conveyance in trust to mortgage, 84. purchaser has notice of extent of power, 85. for purchase money, 85. execution and acknowledgment, 86, name of mortgagee must be inserted, 86, 87. alterations after execution, 87, 88. delivery, 89, 90. 8S0 GENERAL INDEX. ^tsS^" MOKTGAGE— conimweA acceptance, 90. delivery in escrow, 91. lien must be complete at inception, 93. cannot be subsequently enlarged, 94. condition should give notice of amount, 95. for future or contingent obligations, 100. See PuTUKE Advances. to one person in trust for others, 100. construction of, 101. personal covenant not implied, 102, 103. of partnership real estate, 104-112. See Partneeship. by corporation, 114-131. See COEPOEATION, MAfTHPACTDKING CoRPOEATION, EeLIGIOUS CoEPOEATION. by infants, 184^137. proceedings under statute, 138-140. by insane persons or drunkards, 141. proceedings under statute, 142, 143. of deceased persons to pay debts, 144, 145. of burial and cemetery lots, 146-148. lien of, on award for public improvement, 149-152. on right of action for damages, 149. of leasehold estates, 154-157. See Leasehold Estates. by raUroad company, 158, 159. lien on emblements, 160-165. on fixtures, 166-180. See PixTUEES. for future advances or obUgations, 192-203. See Pdtuee Advances. enforceable only for amount advanced, 198. extending time of payment, 204. See Time. effect of extension on rights of sureties, 213. See Surety. of leaseholds, personal estate of mortgagor primarily charge- able with, 270. for purchase money, priority of, 284. See PuECHASE-MoNEY Moetqage. reforming, in action to foreclose, 291. assignment, how made, 298. See Assignment. "fSCr GENEEAL INDEX. 831, M.OB.TGAQ-E— continued. cannot be reissued after payment, 439. must be recorded in separate book from conTeyances, 471. absolute deed intended as, 472. to commissioners of U. S. deposit fund, 506. See Loan Commissionees. insurable interests of parties to, 529. agreement to insure contained in, 546. See Insukance. conveyance subject to, reasons for, 571. by married woman, 605. from husband to wife, 113, 609. See Maeeibd Woman. once a mortgage, always a mortgage, 674. agreement of defeasance must enter into original con- tract, 674. MOETGAGEE, rights at common law, 10, 11. remedy against mortgagor for seUing property, 22. cannot maintain ejectment, 24. but can retain possession lawfully acquired, 24. See MoETGAQEB IN POSSESSION. ■ is deemed purchaser for some purposes, 25. purchase of tax title by, 28. or other hostile title, 28. may purchase equity of redemption, 30. name must be inserted in mortgage, 86, 87. inserted after execution, 87. remedy against award for public improvement, 149, 150. when bound by dedication to pubHc use, 151. of leasehold, not liable for rent, 155. right to crops, emblements, and minerals, 161. right to damages if restrained from foreclosure, 162. may restrain waste by injunction, 181-187. action for damage caused by waste, 188-191. extending time releases surety, 2 i 3-220. should sue on request of surety, 221. right of possession, 235. See MOETGAGEB IN POSSESSION. insurable interest of, 529. extent of, 530, clause to protect in insurance policy, 544. See Insurance. 832 GENERAL lOTJEX. TsS^' MORTGAGEE— conimweA purchase of eqtdty of redemption by, 678. protected against partial redemption, 681. and against inequitable redemption, 681. rule requiring entire redemption is for his benefit, 681. cannot require payment of other debts, 682. MORTGAGEE IN POSSESSION, can retain possession, 24. purchases by, at tax sale, 28. right to retain possession until paid, 235, 236. nature of right of possession, 236. appointment of receiver against, 237. how mortgagee may obtain possession, 238-242. examples of lawful possession, 240-242. right to acquire adverse title, 243. right to foreclose, 244. accounting with mortgagee, 245-264. liability for rents and profits, 245-252. is presumed to hold as mortgagee, 252. right to maike repairs, 253. to make improvements, '253-256. counsel fees, 257. compensation for taking charge of estate, 258, 259. who may require accounting, 260. money paid for taxes and other charges, 261. purchase at tax sale, 262, 263. insurance premiums, 264. appointment of receiver against, 889. MORTGAGOR, rights at common law, 10, 11. may not appear as such on mortgage, 13. not necessarily obligated for debt, 14. nature of estate of, 23. purchase at tax sale by, 29. when estopped as against assignee, 324. See Estoppel. right of redemption after forfeiture at law, 673. carefully guarded by courts of equity, 674. may releaae to mortgagee, 677, 678, 679. remedy is by action to redeem, 699. unless mortgage is fully paid, 701. MORTUUM VADIUM, at common law, 6. MOTION to set aside sale in foreclosure, 966. should be made promptly, 971. "^^"S^^" GENERAL INDEX. 833 NATIONAL BANKS, mortgages to, 132, 133. proTision of statute, 132. later decisions, 133. NEGOTIABLE NOTE, description of, in mortgage, 97-99. mortgage securing renewals, 208-212, 389. transfer of, rights of transferee, 308, 309. of one of several secixred by same mortgage, 301. priorities between holders of, 301. NEW YORK CITY, award for opening streets, 152. statute as to sales in foreclosure, 925. NOTICE that real estate is partnership assets, 106. of incumbrance to charge mortgagee, 201. to creditor mating extension improper, 220. to creditor of rights of surety, 275. of assignment to mortgagor, 334. of equitable rights from public records, 384. to attorney, 384. possession is, 384. given by recording acts, 474. what the record is notice of, 475. contents of instrument and no more, 476. See Recoeding Acts. purchase from one haviag, 483. what actual notice is equivalent to record, 487. constructive, 488. to put upon inquiry, 489. degree of inquiry required, 490. actual notice, 491. from possession, 492. to an agent, 493. recitals in conveyance, 494. of record of assignment of mortgage, 498. of no personal claim in action to foreclose, 796, 912. of application for judgment of foreclosure, 802. to attend preliminary reference in action to foreclose, 807. NOTICE OF PENDENCY OF ACTION to foreclose mortgage, 755. independent of statute provisions, 755. act of 1823, 756. statutory provisions now in force, 757. notice must be filed in action to foreclose, 757. provisions of general application, 757. contents of notice, 757, 762. 53 834 aENERAL INDEX. T'sSrS" NOTICE OP PENDENCY OF ACTION— continued. effect as constructive notice, 757. ^ indexing notice, 757, 768. filing notice by defendant, 757. cancelling notice, 757. changes in statutes, 758. rule requiring proof of filing notice, 759. when notice must be filed, 760. complaint must be filed at or before filing of, 761. form and contents of, 762. errors in, 763. who are bound by, 764 incumbrancer pendente lite, 765. limitations of notice, 766. junior titles and liens under unrecorded instruments, 767. amendments of, 769. amending complaint after filing of, 770. cancelling, 771. effect of delay of plaintiff upon, 772. consequences of omission to file, 773. action for malicious filing of, 774. NOTICE OF SALE, under judgment of foreclosure, 927. publication and posting of, 927. what is sufficient publication, 928. form and contents of, 929. presumption of regularity, 930. in foreclosure by advertisement, 1106. See FOBECLOSDEE BY AnVEETISEMENT. OATH of referee, 810. OFFER OF JUDGMENT in foreclosure cases, 915. "" OEDER of reference to compute, 803. ORDER FOR POSSESSION, jurisdiction of the court, 1031. provisions of the Cod,e, 1032. writ of assistance, when granted, 1083. ex parte application for, 1033. where purchaser is entitled to, 1084. against whom, 1034. when deemed executed, 1034. rights after execution of, 1034. where tenants in possession are not made parties, 1036. setting aside order, 1087. ^{"sS^' GENERAL INDEX. 835 OEDEE FOE POSSESSION— confewec?. summary proceeding, 1038. See StiMMABT Prooeeding. OEDEE OF SALE, reference to report as to, 804. under judgment of foreclosure, 932. PAECELS, when to be sold separately, 943. See Saib in Fokbclosube. PAEOL DEFEASANCE, valid, 18. burden of proof, 19. pleading to establish, 20. extending hen after inception of mortgage, 94. absolute deed to secure future advances, 194. mortgagor on payment entitled to reconveyance, 423. deed containing covenant to assume, 583. See Assuming Mortgage. extinguishing right to redeem, 679. PAEOL EVIDENCE, to aid description of debt, 99. to show that mortgage secures future advances, 193. when no sum is mentioned, 194. of assignment of mortgage, 298, 306. PAETIES to foreclosure of equitable Hen, 71. plaintiffs, in action to redeem, 702. must have interest or lien, 702. creditor at large not proper plaintiff, 702. if mortgagor be dead, 702. special guardian, 702. defendants, in action to redeem, 703. action brought, by junior mortgagee, 704. if mortgagee in possession has made transfers, 705. when mortgagor has conveyed with warranty against mortgage, 706. when mortgage has been assigned, 707. defect. of necessary parties, a defense, 707. plaintiffs in action to foreclose, 718. if mortgage be assigned as security, 718. test as to right of plaintiff to sue, 719. if mortgage belongs to two or more persons, 720. if mortgage secures different debts, 721. surety subrogated to rights of mortgagee, 722. action by surety, 723. mortgage to executors and trustees, 724. foreclosure by one executor against another, 725. ^36 GENERAL INDEX. ""^Stoi?" PABTmS—coniinued. where a specific legacy is made of a mortgage, 726. foreign executor or administrator, 727. necessary defendants, in action to foreclose, 729. all persons who have or claim an interest or lien, 730, 731. assignee in bankruptcy, 732. unrecorded incumbrance, 738. future and contingent interests, 734. ; trustees, 735. cestuis que trvM, 736. limitations as to, 737. when cestuis que trust are numerous, 738. unknown owners, 739. when defendant may require new parties to be joined, 740. proper defendants in action to foreclose, 741. prior incumbrancer, 741. other proper defendants, 742. when assignor of mortgage is necessary defendant, 743. when assignment is as security, 743. when assignment is questioned, 743. when assignment is by parol, 744. purchase by assignee, 745. enforcing implied covenants of assignor, 746. defendant in foreclosure charged for deficiency, 747. grantee assuming mortgage, 748. guarantor of mortgage debt, 749. personal representatives of mortgagor, 750. unnecessary defendants in action to foreclose, 751. adverse interests, 751. contest as to priority, 752. owner of another parcel bound by junior lien, 753. persons having no interest or Ken, 754. death of parties pending action to foreclose, 797. change of parties pending action, 798. how defect of, may be objected to, 852. persons having Hens, 852. persons liable for debt, 853. to action for strict foreclosure, 1082. PAKTITION, after deed in nature of mortgage, 23. Ken of mortgage on undivided interest after, 153. PARTNEESHIP, mortgages by, 104-112. real estate charged with partnership debts, 104. ^J^S^r GENEEAL INDEX. 837 FABTEERSmP— continued. mortgage by one partner of his interest, 105. notice that real estate is partnership assets, 106. equities between partners, 107, 109. , and their several creditors, 109. dower in partnership real estate, 108. what real estate is partnership assets, 110. power of one partner to mortgage firm property. 111. mortgages by limited partnerships, 112. PAYMENT, what is, to cancel vendor's hen, 54. of mortgage, where it should be made, 231. ' whether a discharge or transfer, 335. by third person afterward ratified, 335. See DiscHAEGE. who may receive, 342. application of payments, 860. by the parties, 360. as between secured and unsecured claims, 361. where no application is made by the parties, 362. of collateral security discharges debt, 362, 378. when tender can be made, 398. See Tendee. presumption of, from lapse of time, 410. See Presumption. discharge upon the record, 417. See Discharge. reissuing mortgage after, 439. computing interest on instalments, 630. optional, is not usury, 634. POSSESSION, by person holding equitable Uen, 74. right of mortgagee to obtain and retain, 235. how lawfully acquired by mortgagee, 238. See Mortgagee in Possession. when notice, 384. order for, after foreclosure sale, 1031. POSTING of notice of sale under judgment of foreclosure, 927. POWER OF SALE may be inserted by trustee, 82. foreclosure by sale under, 1099. See FoRECLOsoEE by Advertisement. POWER to mortgage, 81-85. PRACTICE, on excusing default in payment of interest, 233. 838 GElfEEAL INDEX. X^'S^" PEAOTICE— conimued. filing notice of li& pendens, 755. See Notice of Pendency or Action. nature of action to foreclose, 775. governed by general rules of practice, 775. is equitable, 776. trial by court without a jury, 776. what courts have jurisdiction, 777. venue, 778. service of summons, 779. on unknown defendants, 780. on married women, 781. on infants, 782. appearance of defendants, 783. by attorney without authority, 784. when appearance may be served, 785. revival of action, 785. joinder of actions to foreclose two or more mortgages, 786. when only one action is proper, 787. consolidation of actions, 788. foreclosure by prior mortgagee no bar to foreclosure by junior mortgagee, 789. complaint, 790. allegation as to proceedings at law, 791. as to defendants, 792. prayer for judgment, 793. supplemental complaint, 794. verification of complaint, 795. notice of no personal claim, 796. death of parties pending action, 797. after report of referee to compute, 797. amending judgment nunc pro tunc, 797. change of parties pending action, 798. survey of the property, 799. practice on failure to answer, 800. affidavit oh applying for judgment, 801. notice of appUcation for judgment, 802. order of reference to compute, 803. infants or absentees, 803. report on order of sale, 804. where one defendant answers and others make default, 805. ^11^1^' GEM-EBAL INDEX. 839 PEACTICE— conteme(f. when reference to compute is improper, 806. notice to attend preliminary reference, 807. application for judgment, 808. what may be included in amount due on mortgage, 809. oath of referee, 810. duties of referee on reference under the rule, 811. referee must swear and examine witnesses, 812. production of bond on trial, 813. mortgage debt payable in instalments, 814 provisions of statute, 814. as to sale of premises in parcels, 815. new application to enforce payment of second instalment, 816. covenants other than for payment of money, 817. foreclosure for default in interest, 818. effect of judgment for one instalment, 818. taxes paid by mortgagee, 818. instalment on first mortgage and whole of junior mort- gage due, 818. opening default, 819. form and contents of judgment, 820. who may be appointed referee, 821. provision in judgment as to order of sale, 822. as to prior incumbrance, 823, when the foreclosure is of deed absolute on its face, 824. entering judgment, property situated in different counties, 825. amending judgment, 826. judgment for deficiency, 827. before the statute, 827 n. in New Jersey, 827 n. not allowed against non-resident not served or appearing, 828. or unless demanded in complaint, 828. release of one joint obligor, 828. adjusting liabilities between defendants, 829. guaranty of collection, 829 n. personal judgment without sale in foreclosure, 830. personal representatives of deceased obligor, 831. docketing judgment for deficiency, 832. execution for deficiency, 832. varying judgment by subsequent contract, 833. 840 GENERAL INDEX. *!{7^",af ' TBAGTIGE— continued. force and effect of judgment, 834. remedy is by appeal, 835. merger of mortgage in judgment, 836. presumption of payment of judgment after twenty years, 837. stay of proceedings on appeal from judgment, 838. no stay except on two days' notice, 838. appellant may elect between undertaldngs, 839. substituting receiver for undertaking, 840. in proceeding to distribute surplus, 1065. iu foreclosure by advertisement, 1103. See FoEECLosuEB bi Advektisement. PRESUMPTION against parol assignment, 306. of payment from lapse of time, 410. statute controls, 411. delay for less than statutory period, 412. payments on account, 413. mortgage under seal to secure parol debt, 414. of a grant to the mortgagee, 415. of payment from possession of bond, 416. of redemption from judgment of foreclosure after twenty years, 837. of regularity of sale by referee, 930. PRIMAET FUND, for payment of vendor's lien, 57. between mortgagor and his grantee, 216. for payment of mortgage, 265-280. as between heir or devisee and administrator, 265-269. as between parcels, in inverse order of alienation, 271. land expressly charged with debt, 273, 274. land of one person mortgaged for debt of another, 275. release of primary HabiUty, 276. subrogation of owner of fund secondarily liable, 277, 451. jimior hens protected, 278. controlling remedy of mortgagee, 279. order of sale of parcels, 957. rule for measuring equities, 959. controUing principle, 960. equities between mortgages and conveyances, 961. undivided interests, 962. direction in judgment as to order of sale, 963. adjusting equities after sale, 964. method of sale cannot control, 965. tSZS:' GENEEAL IKDEX. 841 PEIOB INCUMBEANCEE, proper defendant in action to foreclose, 741. remedy when improperly made party to foreclosure, 844. PEIOEITY of equitable Uens, 65 et seq. of vendors' Uens, 65 et seq. of mortgages of lands held adversely, 80. of mortgage for future advances, 199-202. advances obligatory, 199. not obHgatory, 200. as against grantee of mortgagor, 202. of lien controlled by agreement, 281-283. notwithstanding recording acts, 281. of purchase-money mortgages, 284^-286. as between several of equal date, 287. mortgage for purchase money given after deed, 288. for money paid for improvements, 289. of mortgages over judgments, 290. doctrine of tacking, 292. of several debts secured by same mortgage, 293. as between several assignees, 294. awarded to defeat fraud, 295. , agreement for, where there are intermediate liens, 296. assignees bound by controlling equities, 297. cases where recording acts have no application, 460. claims to, may be determined in action to foreclose, 845. questions of, in surplus proceedings, 1055. PEOCEBDING to mortgage land of infant, 138-140. must conform to statute, 139. costs in, 140. to mortgage land of insane persons, 142, 143. costs in, 140. to reach surplus after foreclosure, 1039. See SoEPLus Proceedings. PUBLICATION of notice of sale under judgment of foreclosure, 927, 928. of notice of sale in foreclosure by advertisement, 1106. PUFFEES, employment of, at foreclosure sale, 992. PUECHASE-MONEY MOETGAGE, covenants for title contained in, 97. of corporation, 121. of infant, 134. priority of, 284, 285. 842 GENEEAL INDEX. ^iTSZ' PURCHASE-MOKEY MORTGAGE— cow^wMeA over judgment against mortgagor, 284. over dower of mortgagor's v?if e, 284. what is, 286. given for future advances, 286. presumption where deed bears same date, 286. conflicts between, 287. given after delivery of deed, 288. of iafant, 856. failure of consideration for, as a defense, 858. prior incumbrance on property, 858. defect of title, 859. mortgage on one parcel as consideration for another, 860. consideration fails on eviction, 861. what constitutes an eviction, 862. mortgagor unable to obtain possession, 863. foreclosure ordered vdthout judgment for deficiency, 864. fraud practised on mortgagor, 865. mutual mistake as to title, 866. mistake as to quantity of land, 867. agreement to protect mortgagor against prior claims, 868. remedies of mortgagor, 869. PURCHASER AT FORECLOSURE, right to crops, 165. right to fixtures, 166-180. See PixTDEES. with rights of mortgagee in possession, 238, 239. insurable interest of, 532. jurisdiction of court over, 967. who may purchase, 988. party to action, 988. the officer making sale may not, 989. purchases by trustees, 990. purchases by foreign corporations, 991. employment of pufEers, 992. agreements between, not to bid, 993. contract of, and enforcing performance, 994. does not make a contract with the court, 994. . nature of memorandum of purchase, 994. remedy against, 995. rights of, 996. what kind of a title he must take, 997. right to possession, 997. TS^m!' GENERA!} INDEX. 8jt3 PURCHASER AT FORECLOSURE— conifrnwed interests not bound, j098. failure of title to part, 999. record title, 1000. what is a marketable title, 1001, 1002. title by adverse possession, 1003. defects of title -which do not excuse, 1004. irregularities prior to judgment, 1005. defects mentioned at sale, 1006. no allowance made for defects, 1007. when excused from purchase, 1008. misled by terms of sale, 1008. defects in description, 1009. delay in completing title, 1010. allowance of costs to, 1011. who chargeable with costs, 1011. title acquired by, 1013. takes title of mortgagor, 1014. only gets what is offered for sale, 1015. mistake ia description, 1016. title not affected by error in judgment, 1017. defendants claiming adversely to mortgage, 1018. waiver of rights by prior lienor, 1019. when rights of purchaser vest, 1020. confirmation of report of sale, 1021. questions not disposed of by judgment, 1022. act of 1837, allowing redemption, 1023. contracts by mortgagor before foreclosure, 1024, 1025. rights of tenants in possession, 1026. after defective foreclosure, 1027. rights of persons not bound by judgment, 1028. costs of defective foreclosure, 1029. remedies of purchaser, 1030. obtaining possession, 1031. jurisdiction of court, 1031. provisions of Code, 1032. writ of assistance, 1033. order for possession, 1034. tenants not made parties, 1036. setting aside order for possession, 1037. summary proceedings, 1038. RAILROAD COMPAJSriES, mortgages by, 158, 159. 844' GENERAL INDEX. TsSS^' EAILEOAD COMPANIES— conimwed after acquired rolUng stock, 158. after acquired real estate, 159. EATIFICATION of infant's mortgage, 134. EEAL ESTATE, of partnersHp, 104-112. of limited partnership, 112. when surplus moneys are treated as, 1062. EECEIVEE, not appelated against mortgagee in possession, 237. unless lie is irresponsible, 237. or committing waste, 237. may acknowledge satisfaction of mortgage, 349. substituted for undertaking on appeal from judgment of fore- closure, 840. when appointed, 885. statute proTisions, 886. right to appointment of, depends on equitable considera- tions, 887. solvency of mortgagor, 888. when mortgagee is in possession, 889. some part of mortgage debt must be due, 890. inadequacy of security, 891. defense to application for, 892. when corporation owns equity of redemption, 898. who may be appointed, 894. when application for, may be made, 895. what rents may be reached by, 896. grantee of mortgagor delaying litigation, 897. who entitled to rents coUeoted by, 898. payment of taxes by, 899. disposition of fund collected by, 900. stipulation pending motion for, 901. powers and duties of, 902. party to action appointed, 902. general duties of, 903. enforcing payment of rent to, 904. actions by, 905. liabUity of, 906. compensation of, 907. EECOEDING- of paper as a mortgage does not make it such, 39. is evidence of delivery, 90. of mortgage for future advances, 201-203. agreement for priority controls, 281, 282. '^o'SSSm" GENERAL INDEX. -845 EECOEDING— con^mwed noting assignment on margin of record, 307. merger shown by records not to be relied on, 370. of assignment, to whom notice, 334. certificate of discharge, 344. discharge of mortgages upon the record, 417. See DiscHAEQE. mortgages to loan commissioners, 509. effect of record of, 510. searches for liens, 511. record of covenant to insure, not notice, 547. recorded assignment of unrecorded mortgage, 733. EECOEDING ACTS, doctrine of tacking inconsistent with, 292. meaning of terms used in statute, 457. instruments within the statute, 458. instruments which gain nothing from record, 459. two mortgages delivered simultaneously, 460. acknowledgment or proof, 461. impeaching certificate of acknowledgment, 462. who may certify as to acknowledgment, 463. sufficiency of certificate, 464. mistake in copying upon the record, 465. mortgage for future advances, 466. defective record, 467. liability of recording officer, 467. omission of seal, 468. mistake in record cannot enlarge conveyance, 469. indexing record, 470. conveyances and mortgages recorded in different books, 471. where defeasance is by parol, 472. order of record, 473. effect of record is limited to giving notice, 474. what the record of a deed is notice of, 475. purchaser may rely on record, 476. priority of unrecorded mortgages over judgments, 476. record not notice when grantor's deed is unrecorded, 478. notice of grantee's title, 479. covenants for title, 480. extent of search to insure safety, 481. bona fide purchasers only protected, 482. purchase from one having notice, 483. burden of proof, 484. Ssferejuies are 848 geneeIl index. ^£' EECORDING ACTS— continued. subsequent purchasers alone protected, 485. those only protected who record their deeds, 486. actual notice equivalent to record, 487. constructive notice, 488. notice to put upon inquiry, 489, 491. degree of inquiry required, 490. possession as notice, 492. notice to an agent, 493. recitals in conveyance, 494. fraudulent silence, 495. recording assignments t)f mortgage, 496, 497. record of assignment is notice to whom, 498. to what extent assignment protects, 499. assignment is a " conveyance " within statute, 500. production of bond on assignment, 501. assignment must be recorded among mortgages, 502. noting assignment on margin of record, 503. judgment liens suspended on appeal, 504. EEDEMPTION, equity of, origin, 8. inseparable incident of mortgage, 9. form of agreement for, not material, 15. must enter into original contract, 16. See Defeasance. right of, destroyed by sale to bona fide purchaser, 21. remedies of mortgagor after such sale, 22. persons holding liens have same remedy, 22. right of, barred by limitation, 415. right of, differs from right of subrogation, 444, 676, 687. ■from mortgage to loan commissioners, 517. after default, 519. See LoAU Commissioners. by dowress, 624. nature of right to redeem, 673. little difference before and after law day, 673. debt must be due, 673. effected by satisfaction of debt, 673. right of, a legal incident to every mortgage, 674. once a mortgage, always a mortgage, 674. where defeasance is by parol, 674. who entitled to redeem, 675. mortgagor and those claiming under him, 675. %S?«?r GENEEAtf INDEX. J47 REDEMPTION— conimwec?. mere creditor without a lien not entitled, 675. analogous to right of surety to subrogation, 444, 676, 687. method of extinguishing right of, 677. sale of equity of redemption to mortgagee, 678. regarded with jealousy by courts, 678. extinguishing right of, defeasance being in parol, 679. must be by grant under seal, 679. sale to bona fide purchaser, 679. must be by payment of entire debt, 680. one tenant ia common cannot redeem his part only, 680. rule for benefit of mortgagee who may waive it, 681. and mortgagee may be protected against inequitable re- demption, 681. doctrine of tacking, 682. part owner redeeming whole estate protected by subrogation, 683. contribution among parties entitled to redeem, 684. who entitled to assignment on, 685. a person having an equity to protect, 685, 686. distinguished from subrogation, 6,76, 687. when assignment may be refused, 688. demand for assignment must be based on proof of its necessity, 689. how assignment compelled, 690. by motion in action to foreclose, 690. taxes paid by mortgagee added to his lien, 691. from sale under execution, 691 n. from sales for taxes, 691 n. by State fipom prior liensj 691 n. after defective foreclosure, 692. costs of defective foreclosure, 692. right of, barred after twenty years, 693. when statute begins to run, 694. where only one part owner is barred, 695. cases where statute does not apply, 695. facts taking case out of statute, 696. removing outlawed mortgage as a cloud, 697. right of, lost by laches, 698. act of 1837, allowing redemption after sale, 1023. REFEEEE, to be sworn, 810. duties of, on reference to compute, 811. 848 GEl^EKAL INDEX. X'iSZ' EEFEEEE— conimwed must swear and examine witnesses, 812. who may be appointed by judgment of foreclosure, 923. must proceed to sell on request of any party, 931. duties of, at sale, 933. payment of taxes and assessments, 934, 935. fees of, on sale in foreclosure, 941. discretion of, as to sale in parcels, 956. may not purchase, 989. in surplus proceeding, jurisdiction of, 1044-1052. in surplus proceeding, to be sworn, 1067. duty of, 1070. report of, 1072. confirming report, 1073. appointed to make sale in foreclosure by advertisement, 1134. RBFEEENCE TO COMPUTE, order for, 803. when improper, 806. EEFOEMING mortgage in action to foreclose, 291. but not against bona fide purchaser, 291. EELEASE of surety, by extension of time, 213-220. by refusal of creditor to collect debt, 221-225. by collusion between debtor and creditor, 226. of guarantor of collection by neglect, 227. of parcel of land from primary habUity, 276. may discharge Hen, 277. who may execute, 342 et seq. See DiscHAKGE. of portion of security may cancel mortgage pro tanto, 381. reason for rule, 382. mortgagee must have notice of facts, 383. what notice is sufficient, 384. effect of, controlled by circumstances, 385. where two parcels of land are equitably bound pro rata, 386. only a discharge when violating equitable rights, 387. mortgage only afEected to value of property released, 388. inoperative if not delivered, 432. by grantor from covenant to assume, 601 el seq. See Assuming Mortgage. of equity of redemption, 677-679. when defeasance is by parol, 679. RELIGIOUS COEPOEATIONS, mortgages by, 126-130. supervisory power of court, 127. ^ir^ZS" GENERAL INDEX. 049 EELIGIOUS COKPOBATIONS— con^OTMed when order of court is necessary, 128. when debt was legally contracted, 129. by whom application to sell or mortgage to be made, 130. mortgaging of burial-grounds of, 148. BENTS, liability of mortgagee va. possession for, 245, 266. See MoBTGAGEE IN Possession. REPAIRS made by mortgagee in possession, 253. RESALE after sale ia foreclosure, 966. See Sale in Fobbclostjee. REVIVER of action to foreclose, 797. SAIjE under loan commissioners' mortgages, 515. setting aside, 521. See Loan Commissionebs. in foreclosure by advertisement, 1123. See FoEECLOSUEE bt Advebtisement. SALE IN FORECLOSURE, by whom made prior to 1847, 921. under the Code, 922. who may be appointed referee, 923. must be by officer designated, 924 in New Yort county, 925. in Kings county, 926. publishing and posting notice of sale, 927. what is sufficient publication, 928. form and contents of notice of sale, 929. presumption as t6 regularity, 980. officer appointed to sell must proceed, 931. order of sale in parcels, 932. duties of officer at the sale, 933. payment of taxes and assessments out of proceeds, 934. terms of sale cannot qualify judgment, 935. proper provision in terms of sale as to taxes, 936. terms of sale where there are prior rights or hens, 937. adjournments, 938. restraining, by order of court, 939. at least two days' notice required, 939. special clause in deed as to interest sold, 940. fees of officer making, 941. of auctioneer, 942. when sale should be in separate parcels, 943. only part of debt due, 943. entire property when sold, 944. 54 850 GEKEEAL INDEX. SALE IN FORECLOSURE— con^mweci. provisions of Code as to, 945. stay on paying amount due, 946. how much should be sold, 947. selling for benefit of junior liens, 948. supplemental order, 949. when to be made ia separate parcels, 950. provision in Code as to, 950. parcels described together in mortgage, 951. best results must be sought, 952. sale in one parcel, 953. protecting rights of plaintiff, 954. examples of sale ia one parcel, 955. discretion of referee, 956. order of sale in parcels, 957. inverse order of alienation, 958; measuring equities, 959. controlling principle, 960. equities betvyeen mortgages and conveyances, 961. undivided interests, 962. direction in judgment as to order of sale, 963. adjusting equities after sale, 964. method of sale cannot control equities, 280, 965. setting aside sale, 966. proper remedy, is by motion, 966. when action is permissible,* 966. effect of setting aside sale, 967. of order denying a resale, 968. who may apply for a resale, 969. notice of application, 970. should be made promptly, 971. rule where plaintiff is purchaser, 972. inadequacy of a price as ground for, 973. as evidence of irregularity, 974. irregularity of conducting sale, 975. improper sale in one parcel, 976. irregular adjournment, 977. fraud as ground for, 978. oppressive and fraudulent conduct, 979. discretionary power of court, 980. excusable mistake as ground for, 981, 982. diligence required of defendant, 983. T^&r GBWEEAL INDEX. 851 SALE IN YO'KEGLOSU'R'E— continued. for benefit of infants, 984. where resale will be denied, 985. terms imposed, 986. appeal from" order, 987. who may purchase, 988. contract of purchaser and enforcing performance, 994. what kind of title purchaser must take, 997. when purchaser will be excused, 1008. title of purchaser at sale, 1013. contracts of mortgagor before foreclosure, 1024. title after defective foreclosure, 1027. obtaining possession by purchaser, 1031. See PUECHASBB IN PORECLOSUEB. SEAL on mortgage pf real property, 86. not required ia assignment of mortgage, 298. SPECIAL PEOCEEDING, to discharge mortgage of record, 428-430. STATUTE OP LIMITATIONS. See Limitation. STRICT POEECLOSUilE, common remedy in England, 1075. regarded as a sevei'e remedy, 1076. rarely allowed ui this State, 1077. is it abolished by the Code, 1078. lands outside the State, 1079. against infants, 1080. to remedy defective foreclosure, 1081. parties to action, 1082. judgment of, 1083. SUBROGrATION to lien of vendor for purchase money, 59. of mortgagee from infant paying valid Uens, 136. from insane persons, 136. of owner of fund secondarily liable, 277. right of surety barred by limitation, 410. general principles on which allowed, 444. volunteer not protected by, 445. who a surety for purposes of, 446, 447. jimior incumbrancer protected by, 448. lender of money used, in paying prior lien, 449. usurer not protected by, 450. awarded to compel contribution, 451. to remedy a mistake, 452. to prevent inequitable claim for dower, 453. of surety to security of co-surety, 454. of creditor to securities held by surety, 455. 852 GENERAL INDEX. VsS^'' ^JJEROGKiyM—cmdinued. pleadings to assert right of, 456. of insurer to rights of mortgagee, 556, 562 et seq. See Insurance. of grantee under conveyance free of mortgage, 578. person entitled to, may foreclose without assignment, 722. analogous to right of redemption, 676. of part owner redeeming entire estate, 683. contribution among part owners, 684 assignment compelled to aid right of, 685, 686. distingaished from redemption, 687. SUBJECT CLAUSE, land conveyed expressly subject to mortgage, 273. • one parcel expressly charged, 274. release by agreement with grantor, 276. in conveyance, efEect on grantee's right to defend, 878. SUMMAEY PKOCEEDINa to obtain possession after foreclosure by advertisement, 1158. what may be htigated,1159. SUMMONS, service of, in action to foreclose, 779. on unknown defendants, 780. on married women, 781. on infants, 782. SURETY, effect of extension on rights of, 213, 214, 394. land of one person mortgaged for deist of another, 215. extension to grantee of mortgagor, 216. extension reserving rights of surety, 217. consideration for extension, 218. usurious consideration, 219. notice to creditor of rights of surety, 220. refusal of creditor to collect debt discharges, 221. request by surety, 223. dischaj-ge to extent of injury, 224. no one not a surety relieved, 225. discharged by collusion between debtor and creditor, 226. guarantor of collection released by neglect, 227. rights of owner of estate secondarily liable, 271. See Primaev Fund. land of one person mortgaged for debt of another, 275. right of subrogation of, 444. See Subrogation. who is, for purposes of subrogation, 446. t'^^SnT GENEEAL IKDEX. 853 SUEETY— con^mwed qualified rights of mortgagor as, after conveyance, 591. See AssDMiNQ Moktga&e. rights of married woman as, 610, 622. cannot defend because of usury in original contract, 650, 660, 668. may pay mortgage and be subrogated, 676. this right analogous to right to redeem, 676. paying debt, may foreclose in his own name, 722. other remedies of, 723. SURPLUS PEOCEEDESTGS, costs in, 919. who chargeable with costs, 919. widow not charged with, 627, 919, to distribute surplus after foreclosure by action, 1039. prior to Revised Statutes, 1039. under Code of CivU Procedure, 1040. rules of court, 1041. object of the rules, 1042. distribution of surplus by surrogate, 1043. nature of proceeding after foreclosure by action, 1044. controversy as to jurisdiction of referee, 1045-1049. jurisdiction of referee as settled, 1050, 1051. what may be litigated, 1052. who are entitled to surplus, 1053. persons having rights in equity of redemption, 1053. prior liens bound by judgment, 1054. questions of priority, 1055. adjusting equities, 1056. a lessee whose lease is destroyed, 1057. dower in surplus, 1058. judgment liens, 1059. claims against deceased mortgagor, 1060. reclaiming money erroneously paid, 1061. are surplus moneys real or personal, 1062. circumstances which control, 1062. estate of deceased owner, 1063. real estate of infant, 1064. of incompetent person, 1064. practice in, 1065. who may apply for surplus, 1065. notice of application for reference, 1066. referee should be sworn, 1067. 856 aEIfEBAL INDEX. TsSi'rS" TYIIjE,— continued. when title vests, 1020. confirmation of report of sale, 1021. TETJST DEEDS, treated as mortgages, 17. TRUSTEES, power to mortgage, 83-85. aU must join in assignment of mortgage, 299. how to be described in mortgage, 724. when necessary defendants in foreclosure, 735. purchases by, at foreclosure sale, 990. UNDIVIDED INTEREST, mortgage on, after partition, 153. UNKNOWN OWNERS, made defendants in action to foreclose, 739. USURY, usurer not protected by subrogation, 450. no cover permitted, 632. parol contract for, may vitiate writing, 632. mistake does not constitute, 633. optional payment not, 634. compensation for services not, 635. extortion not, 636. agreement must be made by borrower, 637. and not by a stranger to loan, 637. sale of mortgage at a discount, 638. • as cover for usury, 639. payment of discount by mortgagor, 640. bonus exacted by agent for himself, 641. for his principal, 642. knowledge of principal, 642. purgiag contract of, 648. controlled by place of contract, 644. substituted securities, 645. new security for usurious debt, 646. who may assert, as defense, 64^. grantee of borrower, 647. or his heir, 647. or subsequent lienor, 647, 847. assignee for benefit of creditors, 647. right to defense cannot be transferred, 648. estoppel of assignee to allege, 649. surety cannot allege, 650, 660, 663. previous adjudication as to, 651. conveyance expressly subject to mortgage, 653, 878. reason of the rule, 653. plaintiff must plead conveyance, 654. '%%IS'r' GENEEAL INDEX. 857 USURY — continued. mortgagor may not permit defense after conveyance, 655. except to extent of personal liability, 655. mortgagor may defend after conveyance, 656. judgment vsrhere only lienor defends, 657. mortgagor may convey and permit defense, 658. assignment to creditors, 647, 659. •where assignee is directed to pay debt, 649. as defense to guarantor of usurious debt, 650, 660. where lie sold mortgage at discount, 661. usurer not protected by the statute, 662. to permit him to escape from contract, 662. defense of, by corporations, 663. pleading, 664. affirmative relief against usurious mortgage, 665. " borrower '' need not repay money loaned, 665. any other equitable duty may be j-equired, 666. no one but " borrower " protected by rule, 667. who is a "borrower," 667. extension for usurious consideration, 668. bonus paid may be credited, 668. surety reheved by such extension, 668. effect upon original obligation, 671. sale under power in usurious mortgage, 669. effect of, upon prior valid obligations, 670. ia one contract, not applied on another, 672. VENDEE, lien of, for money paid, 64. VENDOR'S LIEN, nature of, 52. when it exists, 52. debt barred by limitation, 53. lasts until debt is paid, 54. improvements made by purchaser are subject to, 55. not affected by disability of vendee, 56. should be paid out of vendee's personalty, 57. and not by heir or devisee, 57. assignment of, 58. where lien is expressly reserved, 58. when may be enforced by third person, 59. who are deemed subrogated, 59. what amounts to waiver of, 60. renewal notes or obligations, 60. effect on, of taking bond or note, 61. 858 GmEEAL INDEX. ^{^'S^' VENDOE'S Tuim—conHnued. or obtaining judgment, 61. waived by taking other security, 61, 62. or accepting a substitute, 62. unless intent is to preserve it, 63. priority as against subsequent claims, 65, 66, 288. conveyance to bona fide purchaser, 67. what is notice of, 68. vendor in possession, -69. priority of judgment, 70. remedies of vendor, 71. parties to action, 72. defenses, 73. retaining possession, 74. tender of deed before action, 75. WMVEE, of vendor's lien, 60-63. of defa\ilt in payment of interest, 234. of condition in policy of insurance, 543. WAERAJSfTY of title contained in mortgage, 27. WASTE, restrained by injunction, 181-187. actio|2 for damages caused by, 188-191. intent to injure security, 189. measure of damages, 190. WELSH mortgage, 5. WEIT OF ASSISTANCE, when granted, 1031. See Oedee fgk Possession. =^r-^' .' "i^- i i ■; h