[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 261 This action was brought for the foreclosure of a mortgage made by one William G. Ely, deceased, in 1825, to the Ætna Insurance Company, to secure the sum of $3,000. It contained no clause in reference to taxes and assessments. In 1872, the Ætna Insurance Company assigned the mortgage, together with the bond accompanying the same, to the Excelsior Life Insurance Company. This company paid, while it held the mortgage as assignee, certain taxes, assessments and water rates upon the mortgaged premises, and to redeem the same from tax sales, which together amounted to the sum of $1,640, or thereabouts. In the year 1875, the Excelsior Life *Page 262 Insurance Company assigned the bond and mortgage, with the whole amount due by reason of the payment for taxes, etc., to the plaintiff, who purchased at the request of the mortgagor, and under an agreement to extend the payment of the principal until September, 1878, previous to which time this action was commenced. Subsequent to his purchase, the plaintiff paid certain taxes and assessments, amounting to the sum of $925. At the time of the assignment to the plaintiff, the sum of $934.78 was due for interest. The defendant Catharine Ely is the widow and executrix of the mortgagor, who died leaving a will, by which he devised her the estate for life with remainder over in fee to the children of his brother James, who are defendants in this action. Upon the trial, the court allowed for the taxes, assessments and water rates paid by adding them to the mortgage, which, with the principal and interest found due to the plaintiff, amounted to the sum of $7,365.70.
The most material question upon this appeal arises in regard to the rights of the plaintiff to the amount of taxes and assessments paid by him and his assignor, and to collect the same out of the mortgaged property. The rule seems to be established by abundant authority that when the owner of mortgaged property refuses or neglects to pay taxes and assessments, or liens of a like nature, which are imposed upon the mortgaged premises, the mortgagee has the right to pay the same in order to protect his security, and the amount so paid may be added to and become a part of the mortgage debt, which may be enforced upon a foreclosure of the mortgage.
Willard in his work on Equity Jurisprudence, at page 446, lays down the rule that taxes paid may be added to the mortgage debt, and he adds, "so money paid by the mortgagee to redeem the premises from a tax sale becomes part of the mortgage debt in equity;" he further says at page 448, "with regard to the amount to be paid on redeeming, it may be said, that as taxes are a legal charge upon the estate, they may, if necessarily paid by the mortgagee, be added to the mortgage debt." The same rule is upheld in Thomas on Mortgages, at pages 86 and 276, and in Jones on Mortgages, at sections 77 *Page 263 and 1134. In the last authority it is laid down that this is so, although there be "no tax clause in the mortgage."
Numerous cases in the reports sustain this doctrine. (EagleFire Ins. Co. v. Pell, 2 Edw. Ch. 631; Burr v. Veeder, 3 Wend. 412; Brevoort v. Randolph, 7 How. Pr. 398; Faure v.Winans, Hopk. Ch. 283; Marshall v. Davies, 78 N.Y. 414;Robinson v. Ryan, 25 id. 320; Williams v. Townsend, 31 id. 414.) These cases are criticised by the counsel for the appellant, and it is claimed they do not sustain the doctrine contended for. While all of them do not entirely cover, yet they tend to the support of the principle, that a mortgagee, who to save his mortgage and protect his security is under the necessity of paying the taxes and assessments to prevent the property from being sold, should be allowed for the same as a part of his mortgage debt upon the foreclosure of his mortgage. Whether the doctrine of tacking, as claimed by the counsel for the appellants, has any application, is not important to consider, if the principle we have stated can be invoked to save the mortgagee from the sacrifice of the property by reason of unpaid taxes or assessments.
In accordance with the authorities already cited, it is not necessary that the premises should be sold prior to the payment of the taxes or assessments before the mortgagee is authorized to pay the same, and add the amount paid by him to his mortgage. (See Eagle Fire Ins. Co. v. Pell, and Williams v.Townsend, supra.)
The doctrine that neither the plaintiff nor his assignor could have any benefit from the doctrine of subrogation, because they voluntarily paid the taxes and were conspirators, cannot be upheld. There is no finding in the case that either of them purchased the mortgage with the intent of paying the taxes and assessments so as to relieve the life estate and cast the burden upon the remaindermen; they were paid evidently in self-defense, and for the purpose of saving their liens as mortgagees. It cannot, therefore, be said that they were volunteers, or that they acted in bad faith as to others, or to any one who was under a legal necessity to make the payment, *Page 264 even if it may be urged that if the taxes had remained a lien, the life-tenant would have been obliged to pay them to prevent a sale of the property by the State or a return thereof, as that furnishes no reason why the plaintiff had not a perfect and complete right to protect his security from sale for the taxes. There is no rule by which the holders of the mortgage were obliged to delay the payment so as to compel the remaindermen to take action in regard to the same and relieve the property. They should have been vigilant in looking after their rights, and if they had done their duty the taxes would not have accumulated. Having failed to perform a plain duty, if they desired to protect the property against the taxes, after they have permitted the mortgagee to pay the taxes, they are in no position to object that it operates as a hardship upon them. They would have had an undoubted right to make application for the appointment of a receiver to collect the rents and apply them to the payment of the taxes. (Cairns v. Chabert, 3 Edw. Ch. 313; 1 Washburn on Real Prop. 97.)
In the case we are considering, the taxes remained unpaid from the year 1865, to the year 1872, and then again from 1872 to 1874, all inclusive. For eight years they were allowed to accumulate in the first instance, and afterward for three years, and during that period no effort was made to pay them, nor any attempt to compel the owner of the life estate to pay them, or the appropriation of the rents for that purpose. Here was a gross neglect which would have resulted in the sale of the property, and perhaps the destruction of the estate, but for the intervention of the owner of the mortgage.
Again, if the mortgagee or his assignee had the right to pay within the authorities to which we have referred, to protect his mortgage lien, any equity which might have existed between the life-tenant and the remaindermen cannot destroy or take away that right. The remainderman's rights and his interests are subject to the right of the mortgagee, which was a prior and superior right given by the mortgagor. If the mortgagor had survived, and the mortgagee had paid the taxes, the amount paid would clearly have been a claim against the *Page 265 mortgagor and the mortgaged premises. The devisees of the mortgagor cannot have any greater or better right than the mortgagor, and they stand in his place. There was no evidence of any fraud or any conspiracy, to impose upon the remaindermen an obligation which belonged to the life-tenant to perform. The mortgage was purchased by the plaintiff in good faith, as found by the trial court, which also refused to find to the contrary. The effect of the payment was, although it increased the amount of the mortgage, to cancel and discharge the lien of the taxes for the same amount. The estate of the appellants was bound to pay the taxes, and the payment by the mortgagee, or his assignee, did not add or increase the burden imposed thereby, but in fact it operated to reduce the rate of interest on the amount of such taxes. Equity could not grant relief to the remaindermen, for the reason alone that the lien had been changed from a tax lien to that of a mortgage lien, and we are unable to see why the life-tenant could not as well have been charged with the burden of the taxes after payment by the mortgagee, as he could before such payment, and in this case no reason existed why the interest of the life-tenant in the fund after payment of the mortgage by a sale should not have been burdened with this charge.
The defendants claim they are entitled to pay up the mortgage and to be subrogated as mortgagees, leaving the plaintiff to his remedy, or if the property be ordered to be sold, that the value be computed, and only that value, less the present value of taxes and interest during the life in expectancy, be applied to the accretions, and that after applying the present value of such taxes and interest only, the remainder of the principal sum be paid out of the sale of the inheritance.
It does not appear that the defendants have applied to be subrogated as mortgagees, or placed themselves in a position which entitled them to an assignment of the mortgage; nor was the question raised upon the trial as to the application of the interest and taxes. The plaintiff is entitled to the payment of the mortgage out of the real estate upon a sale thereof, and *Page 266 the question as to the disposition of the surplus, if any there be, does not arise upon this appeal.
It is also insisted that there was error in the refusal of the court to find that the plaintiff notified one of the defendants that he would not receive the last installment of interest due upon the mortgage, unless the arrears of taxes were paid. This refusal, we think, was not error, even if the effect of such notification might be to waive a tender of the money due upon the mortgage. No tender had been pleaded, and therefore it was not available as a defense. There is no force in the position of the counsel for the appellants, that they were entitled to the benefit of the alleged tender, although not pleaded, for the reason that non-payment of interest was not alleged in the complaint or reply. The defendants had a perfect right to set up in their answer the actual state of the case, even if it was not correctly set forth in the complaint, and to allege that a tender had been made. Having failed to do this, they were not in a position to urge their right to the benefit of a tender, upon the trial. Nor do we think that the statement, in the reply to the defendants' answer, as to the amount due, was of a character which entitled the defendants to the benefit of a tender, without having set up the same in their answer.
We also think that after a trial had been had, the findings prepared, and ready to be signed by the judge, the defendants were not entitled to have the answer amended to conform to the proof, and no error was committed by the judge in refusing the application for that purpose.
There was no such evidence as to the waiver of interest upon the trial, as entitled the defendants to the benefit of a tender, whether pleaded or not. There is no merit in the position that the court had no jurisdiction of the new defendants, because there was no order of publication as to them, and the point urged is sufficiently answered in the opinion of the General Term.
The refusal to find the several sums which constituted the gross sum specified in the findings was not error. These items are covered by the general finding, and it was not necessary to *Page 267 state them specifically. Nor does the request made embrace facts material to the issue and the proper disposition of the case.
The other points urged by the appellants' counsel have been carefully examined and considered, but none of them present any sufficient ground for a reversal of the judgment.
There being no error, it should be affirmed.
All concur, except RAPALLO and TRACY, JJ., absent.
Judgment affirmed.