Klock v. Cronkhite — 1 Hill & Den. 107

Majority

p. 107

Klock vs. Cronkhite.

Headnote

Where the assignee of a mortgage takes a quit claim deed of one half of the mort. gaged premises, this docs not extinguish the mortgage. At most, it can only operate an extinguishment of a part of the mortgage debt, leaving the assignee at liberty to foreclose for the residue.

It will make no difference in such case, that the assignee’s title to such half is derived from one who had purchased it of the mortgagor, and gave back an agreement to pay off the mortgage; especially if the assignee had no

p. 108

notice of the agreement. And, sémblé, even were he notified, the result would be the same.

Quere, whether if thd assignee’s deed, instead of being for half, had covered the whole premises, it could have operated an extinguishment of the mortgage.

Where one, in a mortgage foreclosure under the statute, through an honest mistake of his legal rights, "claims in his notice more than is due him, this will not affect the validity of the sale. And quere, whether such erroneous claim could, under any circumstances, prevent the purchaser from acquiring a good title.

E. having a judgment, obtained inl832, which was a lien on premises covered by a prior mortgage dated in 1829, caused the same to be levied on and sold, and bid them in himself. After the sale became absolute, he obtained the sheriff’s deed, mid the mortgage was foreclosed under the statute. Held, that E. acquired no title under the judgment, and of course could convey none to the defendant, his grantee.

A sheriff’s deed, given after the sale becomes absolute, takes effect by relation from the timé when it might have been demanded. Semble.

Ejectment, for nitre acres of land, in Minden, Montgomery county, tried at the Montgomery circuit, before Willard, C. Judge, in November, 1839.

John Baum and Abram Baum, being seized of the premises in question, on the first day of May, 1839, mortgaged the same to Peter Davis, to secure the payment of $600, with interest. On the 18th January, 1834, J. and A. Baum, the mortgagors, conveyed the south half of the premises to Sanford W. Lee and Simeon Klock, who thereupon gave the Baums a written undertaking “ to have the north part of the lot cleared from the mortgage, and pay the mortgage and interest from the first day of May next.” On the 7th April, 1834, Davis assigned his mortgage to the plaintiff. On the 7th November, 1834, Lee and Klock conveyed the south half of the premises to the plaintiff, by quit claim deed. But it did not. appear, that the plaintiff had notice of ’the agreemeht of his grantors to pay off the mortgage. The plaintiff foreclosed the mortgage, by notice pursuant to the statute, and became the purchaser of the whole of the mortgaged premises, at the sale, on the second Monday of May, 1836,

On the 15th October, 1832, Isaac Elwood recovered a judgment for $2000 of debt, and $10 costs, against J, & A.

p. 109

Baum, the mortgagors, under which the premises were sold to Elwood on the 8th November, 1834, and a deed was executed to him by the sheriff, on the 23d Hay, 1836. Elwood had previously, on the 20th February, 1836, conveyed the premises to the defendant, by warranty deed. When the plaintiff commenced advertising to foreclose the mortgage, the amount then unpaid of the mortgage money was $237,70, and the plaintiff in the notice claimed that sum as being due on the mortgage.

The defendant insisted, 1st. That as .the plaintiff had purchased the south half of the mortgaged premises in fee, the mortgage was merged and the power of sale at an end, and that the foreclosure was, therefore irregular and void ; 2d. That if the power of sale was not wholly gone, it was irregular for the plaintiff to claim the whole sum due oh the mortgage; and 3d. That the foreclosure was irregular and void as against Elwood, a judgment creditor, and as against any person holding under that judgment. The judge decided that the plaintiff was entitled to recover, and the defendant excepted. Verdict for the plaintiff. The defendant now moves for a new trial on a bill of exceptions.

D. Cady, for defendant.

M. T. Reynolds, for plaintiff.

If there had been notice to the plaintiff of the agreement of Lee and Klock to pay off the mortgage, I do not see how that could prejudice the plaintiff’s title in a court of law. But as he had no notice of the a°Tee-O ment, it is quite clear that he Cannot be affected by it.

After taking an assignment of the mortgage, the plaintiff acquired the equity of redemption, as to the south half of the premises, by the deed from Lee and Klock. If that had been a Conteyance of the whole of the property, I should not be prepared to say that the mortgage was extinguished. But however that may be, talcing a conveyance of the equity of redemption as to only one half of

p. 110

the property, could, at the most, only operate to extinguish one half, or some other portion, of the mortgage debt; * and the plaintiff might well foreclose and sell for the residue.

When there is a foreclosure under the statute, the notice must specify, among other things, the amount claimed to be due on the mortgage at the time of the first publication. (2 R. S. 546, § 4.) But the statute imposes no penalty for claiming more than is really due; and if such a claim could, under any circumstances, affect the validity of the sale, it certainly could not in a case like this, where, if the plaintiff has in fact demanded too much, it has not resulted from a fraudulent purpose, but from a mistake concerning his legal rights.

Under the act of 1813, a foreclosure by auvertisement ana sale does not prejudice any creditor, to whom the mortgaged premises are bound by a judgment at law, or a decree in equity. (1 R. L. 373, 374, § 5, first proviso.) But Elwood did not stand in the character of a judgment creditor, having a lien at the time of the mortgage sale. He had previously sold under his judgment, and his right to a deed from the sheriff had become perfect on the 8th of February, 1836, when the time allowed for redeeming expired; although the conveyance was not made until the 23d of May, 1836, which was after the mortgage sale, the deed undoubtedly took effect, by relation, from the time when it might have been demanded, which was prior to the sale on the mortgage. At the time of that sale, Elwood stood in the character of grantee or assignee of the mortgagors, and as such he was foreclosed of all equity of redemption. The statute has no saving clause in favor of those who have acquired the title or equity of redemption of the mortgagor; it only saves other mortgagees, and creditors having a lien by judgment or decree.

Elwood must claim in one of two ways, and not in both. He must say, either that he was the owner of the equity of redemption at the time of the mortgage sale; or that he was a judgment creditor having a lien. If he claims the

p. 111

equity of redemption, the answer" is, that that interest has been foreclosed; if he claims merely as a judgment creditor having a lien, he must then go into equity and redeem. He clearly has no title at law.

The defendant has of course acquired only such rights as belonged to Elwood, his grantor. The cause was properly disposed of at the circuit.

New trial denied.