Savings Bank v. Wood

Headnote

Surplus moneys — priority of liens as to.

Appeal from an order made on an application for the distribu, tion of the surplus moneys in this action. February 14, 1876, Nelson O. Wood and his two sisters joined in a mortgage to the

plaintiff conveying 177 acres of land which they owned as tenants in common, and a tract of fifty acres, which Nelson O. Wood owned individually and solely.

Nelson O. Wood received all the money raised by the loan, the sisters signing for his benefit and receiving nothing. September 1, 1876, the bank of Chenango recovered a judgment against Nelson O. Wood, individually, for $6,215.61. On December 12, 1876, the two sisters mortgaged their interests in the 177 acres to John Mitchell. Upon the foreclosure of the plaintiff’s mortgage, the question was whether the judgment or the mortgage to Mitchell were entitled to priority.

The court at Special Term awarded the priority to the mortgage.

The court at General Term said : “As between Wood and his two sisters it is plain that, if the land had been sold in parcels, it would have been equitable to sell; first, his fifty acres ; next, his one undivided third of the 177 acres ; and lastly, their two-thirds of the 177 acres. As the land was not sold in parcels, but as a whole, it is equitable to treat the avails in the same manner — that is, the proportionate avails (agreed upon) of the fifty acres should be first applied to the mortgage; then Wood’s one-third of the proportionate avails of the 177 acres; and then so much as is necessary of the remaining two-thirds of the avails of the 177 acres. Whatever surplus of the proportionate avails of these two-thirds should remain, would therefore be the property of the sisters of Wood. As such, it would be subject to the mortgage executed by them, and would not be affected by the lien of the judgment against Wood.”

We think the order should be affirmed, with ten dollars costs and printing disbursements.