Majority
p. 199AMY J. ANDERSON, Respondent, v. JACOB VAN BUREN and others, Appellants.
Headnote
Mortgage — given by indorsor of notes to secure the same — indorsee paying less than the face of the notes — may recover on the mortgage their full amount.Jacob Van Burén sold to Joseph Van Burén a canal boat for $4,000, and took from him for the price thereof, twenty-one promissory notes, secured by a chattel mortgage upon the boat. Subsequently he sold the notes and mortgage to Morgan Van Burén for $3,500, and gave to the latter a real estate mortgage for $4,000 to secure the payment of the notes. Meld, that Morgan was entitled to enforce the real estate mortgage for its full amount, $4,000, less the amounts received on the notes and realized from the sale of the boat under the chattel mortgage, and that his security thereunder was not limited to the price paid for the notes, $3,500.
Appeal from the order of the Comity Court of Oswego comity, confirming the report of a referee in proceedings to distribute surplus moneys, arising from a sale on a judgment in foreclosure.
There was a surplus arising from a sale on foreclosure of a mortgage, given by defendant to tbe plaintiff, of $1,946.69.
Claims to this surplus were made by Morgan Yan Burén, Harlow C. Le Roy, and by defendant Jacob Yan Burén. Morgan Yan Burén claimed to be entitled to tbe surplus as bolder and owner of a mort
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gage given to him by the defendant Jacob Yan Burén and wife for the sum of $4,000, dated the 20th April, 1874. The condition of said mortgage was in the words following, viz.: “ This grant is intended as a security for the payment of the sum of $4,000 and interest thereon from this date in manner following, viz.: In accordance with the terms of twenty-one promissory notes of even date herewith, made by Joseph Yan Burén and payable to the order of Jacob Yan Burén, and indorsed by him, to secure which said indorsement this mortgage is made and is collateral.”
On the day of the date of said mortgage Jacob Yan Burén, the mortgagor, was the owner of a chattel mortgage made by Joseph Yan Burén upon the canal boat John Hobbs, given to secure the payment of $4,000, which amount was also embraced in the twenty-one notes. The notes and mortgage were given to secure the price of the boat, which had been sold by Jacob to Joseph.
On the 20th April, 1874, Jacob Yan Burén sold and assigned to Morgan, for the sum of $3,500, said mortgage and notes, and on the same day Jacob and wife executed the mortgage under which Morgan claims to be entitled to the surplus, as collateral security to his indorsement on the notes above mentioned.
Prior to the 5th May, 1876, $1,089.70 had been paid on the notes, and on that day Morgan Yan Burén, to whom had been assigned the mortgage on the boat and the twenty-one notes, to,ok possession of said boat by virtue of the mortgage and sold her .for $1,270.
The claim of Le Boy was upon a judgment, junior to the above-mentioned mortgage, for $500 and interest from the 4th October, 1876. The counsel for the judgment creditor requested the referee to find and decide, that the mortgage under which Morgan Yan Burén claimed was given as collateral security for the payment of the chattel mortgage and promissory notes sold by Jacob to Morgan, and that it was at no time a lien upon the mortgaged premises for an amount greater than the sum which the mortgagee paid to the mortgagor, to wit, $3,500 and interest thereon.
The same judgment creditor and the mortgagor requested the referee to find and decide that all payments made to the holder and owner of the promissory notes,' chattel mortgage and real estate mortgage, and the moneys received from the sale of the canal boat
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inured to the benefit of tbe mortgagor in tbe real estate mortgage, and should be deducted from tbe $3,500, and that Morgan- was entitled to no greater sum than tbe balance shown, by computation made in tbe manner requested.
Tbe same claimants requested tbe referee to find and decide that there was unpaid on tbe mortgage under which Morgan claimed a price not exceeding $1,487.60.
Tbe referee refused to find as requested in each of said requests, and tbe claimants excepted.
Tbe referee found and decided that there was due on the notes transferred to Morgan Yan Burén -on tbe 5th May, 1876, $1,984.54, and that Morgan was entitled to tbe whole of tbe surplus money.
Tbe exceptions taken on tbe bearing before tbe referee were beard by tbe County Court, and tbe report confirmed.
Howe (& Pice, for tbe appellant.
Pa/rckis Piper, for tbe respondent.
Tbe twenty-one notes were given by Joseph Yan Burén to Jacob, together with tbe chattel mortgage, to secure tbe payment of $4,000, being tbe amount which Joseph was to pay Jacob for tbe boat.
Jacob sold tbe notes, with bis indorsement thereon, together with tbe chattel mortgage, to Morgan for tbe sum of $3,500, and be gave him tbe mortgage under which Morgan claims tbe surplus as collateral security to bis indorsement. In other words, Morgan stepped into Jacob’s shoes in tbe dealing between Joseph and Jacob. It follows that Jacob was entitled to have tbe avails of tbe boat applied in satisfaction of bis liability on tbe notes, and was liable to Morgan only for what should remain unpaid upon tbe notes, after applying tbe avails of tbe sale of tbe boat. That sum Morgan was entitled to recover upon tbe real estate mortgage, and bis ben was transferred from tbe land to tbe money. He was entitled to tbe amount out of tbe surplus money.
This amount tbe referee bolds Morgan entitled to receive out of tbe surplus moneys.
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The order must be affirmed, with ten dollars costs and disbursements.
Present — Mullin, P. J., Taloott and Smith, JJ.
Ordered accordingly.