Werner v. Tuch

The mortgage in question, dated April 9, 1881, was given to the plaintiff's by the defendants Tuch, to secure the payment of the sum of $5,260, being part of the purchase-price of the premises therein described. The principal ■was payable May 1, 1891, and the interest semi-annually at the rate of five per cent, per annum. There was an interest ■clause in the usual form, the period of grace being sixty days. The premises embraced three adjoining parcels of land in the ■city of Elmira, known as the eastern, the central and the western, and also a house and lot in the village of Blossburg, Pennsylvania. The mortgage provided that if the mortgagors ■should sell either of the parcels, the mortgagees would release to the purchaser the portion so sold free and discharged from the lien of the mortgage, upon receipt of the sum of $2,500 for the release of the Blossburg parcel; $1,750 for the eastern, and $850 each for the central and western parcels. ■ It was further provided as follows : “ The said sums when paid shall be credited on the gross amount due hereunder and shall be in partial liquidation and exoneration .hereof, but in no event .shall the said mortgagees receive a greater sum than the said principal sum of five thousand two hundred and sixty dollars., with the interest and accretions hereunder. In case the mortgagors shall exercise their privilege, as next hereinafter granted, ■of paying off any part of the principal at any time other than upon a sale of the premises herein described, then the amount to be paid to secure the release of any of the parcels upon a sale shall abate proportionately. And it is hereby further understood and agreed that the mortgagors have the privilege of paying off any part of the principal sum during the term liereof (provided they shall not be otherwise in default), all payments of principal and interest to be evidenced by indorsements on the bond and not otherwise.” The mortgage was

June 11, 1883, the defendants Tuch paid to the plaintiffs the sum of $850, and thereupon the westerly parcel was duly released from the lien of the mortgage. dSTo other part of the principal has been paid and the interest due May 1, 1887, is still unpaid. July 11, 1887, or more than sixty days after’ said default, this action was commenced to foreclose said mortgage, and a lis pendens in the usual form was filed, the plaintiffs having elected to call the whole amount due. The defendants Tuch served an answer, and in ¡November, 1887, an. amended answer, and in December following, Theresa L. Hoppe, their daughter, purchased the central and easterly parcels and received separate conveyances of the same, recorded respectively December 3, 1887, and February 18, 1888.

January 3,1888, Mrs. Hoppe and the defendants Tuch tendered the plaintiffs the sum of $2,600 of principal and $185 for interest and costs and demanded the release of the central and easterly lots. ¡Releases, proper in form, were at the same time presented and a demand made that the plaintiffs execute the same as a condition of receiving the money. ¡Notice was also given of the conveyances to Mrs. Hoppe. The plaintiffs refused to execute the releases, or to receive the money, upon the ground that they were entitled to the whole amount unpaid upon the mortgage. The money tendered was not subsequently kept good, nor paid into court, but the same was used, wholly, or in part, by the person to whom it belonged and by whom the tender was made in behalf of the defendants Tuch and Hoppe.

The cause was tried in February, 1888, and shortly before, a supplemental answer was served in behalf of Mr. and Mrs.

The trial court held the tender insufficient and rendered judgment for the plaintiffs. The General Term affirmed upon the grounds that, as the mortgagors were in default, they were not in a situation to enforce a release; that the tender, being conditional, was insufficient, and being made the basis of an affirmative claim, should have been kept good.

Without here considering the other grounds, we base our affirmance of the judgment upon the one last named.

Assuming that the conditional tender, although not sufficient to discharge the mortgage debt, was sufficient to call into action the covenant to release, still we are of the opinion that, under the circumstances, the sum tendered should have been kept good, and brought or paid into court.

The general rule is, as laid down in the noted case of Kortright v. Cady ( 21 N. Y. 343 ), that when the entire sum secured by a mortgage is due, a tender of the amount unpaid, at any time before a sale in foreclosure, extinguishes the lien, and that, as it leaves the debt unaffected, it is not necessary to keep the tender good, or pay the money into court. We do not think, however, that the facts of this case bring it within the general rule. The tender in question was not made under the covenant of the mortgagors to pay the debt, but under the covenant of the mortgagees to release the land, because only the sum required to procure a release of part of the lands was tendered, not the amount required to pay the mortgage. The object was not to discharge an obligation of the defend

Where the mortgagors, although defendants, assume the position of plaintiffs and demand in their answer that part of the mortgaged premises be released pursuant to an agreement ■of the mortgagees contained in the mortgage, no effect will be given to the tender unless the money is brought into court. It would be inequitable to extinguish the security in part, without giving to the holders of the mortgage the benefit of the proportionate payment for which they had contracted. A tender, in order to become the foundation of an action in ■equity, must be kept good or it will be wholly ineffectual. (Breunich v. Weselman, 100 N. Y. 609 , 610; Halpin v. Phenix Ins. Co., 118 id. 165, 178; Day v. Strong, 29 Hun, 505 .)

The judgment should be affirmed, with costs.

All concur.

Judgment affirmed.