[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 515
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 516 The referee properly decided, in his fifth conclusion of law, that the law of merger did not apply to this case, on the ground that the plaintiff, holding no deed from the sheriff under the execution sale, had no title in fact in which a lesser title could merge; and that the evidence clearly showed that the plaintiff did not intend to have merger take place.
The fact that the plaintiff never acquired such title is equally conclusive against the other conclusions of law reached by him.
When the plaintiff, on the 29th day of January, 1864, purchased David Scofield's equity of redemption at the sheriff's sale under the execution issued upon the Lyon judgment, which was recovered subsequent to the mortgage given to secure the bond in question and the other mortgages referred to in the referee's findings of fact, he did not, by such purchase, become the owner thereof. It is expressly provided by 2 R.S., p. 373, § 61, that "the right and title of the person, against whom the execution was issued, to any real estate which shall be sold thereby, shall not be divested by such sale until the expiration of fifteen months from the time of such sale." He, consequently, only acquired the right to become such owner at the expiration of that time in any event; and that right was liable to be divested and utterly extinguished in case a redemption was in the mean time made by the judgment debtor, or those entitled by law to make it. He had at most an inchoate interest in the property, and he incurred no obligation whatever in relation to the mortgages thereon by his mere purchase; and he was at perfect liberty to treat with the holders of those mortgages, and to take assignments thereof, with power to collect the same, and without prejudice to the right he had acquired under and by *Page 518 virtue of the sheriff's sale. That sale undoubtedly was made subject to the mortgages; and the plaintiff, as the referee finds, must, with knowledge of their existence, have "intended to bid off the place subject thereto." But whether that was or not his intention, the legal effect of the purchase was to leave the mortgage liens unaffected and his rights subordinate thereto.
Having thus obtained the right of acquiring the title to the equity of redemption at a future period, if the premises were not previously redeemed, he, as he had an unquestionable right to do, within a month after his said purchase took an assignment of the Rosetta Miller mortgage and the bond accompanying it, and within two months thereafter of the other two mortgages. After he became the assignee of the Rosetta Miller mortgage he proceeded to foreclose it, and became the purchaser of the mortgaged premises under those proceedings. By that purchase, which took place on the sixth day of May, 1864, he became the owner of the property. Its effect was to entitle the obligor in the bond, secured by that mortgage, to a credit thereon to the amount of the excess of the proceeds of the sale over the costs of the proceedings, and to leave it still in force for the balance.
It does not appear by the referee's report for what the property sold; and it cannot be assumed that the amount realized was sufficient to discharge the whole amount payable by the bond, and I find, by reference to the evidence, that it was not; but, on the contrary, that there still remained a larger amount due than was claimed by the plaintiff in his complaint.
I may add that if the plaintiff had in fact become the owner of the equity of redemption, and had actually title thereto, subject to the said mortgages, that would, at most, have made the land the primary fund for the payment of the mortgage debt; and if that had been sold, and the proceeds arising therefrom were insufficient to discharge the debt, the obligors would still have been liable on the bond for the deficiency. *Page 519
There is, therefore, in any aspect of the case, no ground for the judgment ordered by the referee. Having reached this conclusion, it is unnecessary to consider the exceptions taken to the admission of evidence.
It may be proper to notice a point made by the appellants' counsel, that the foreclosure sale was a nullity, and it is sufficient to say that no such question is raised or decided by the referee; but, on the contrary, his report assumes, in his thirteenth finding of fact, that it was a valid sale.
It follows that the order of the General Term, reversing the judgment and granting a new trial, was right and must be affirmed, with costs, and that judgment absolute must, under the appellant's stipulation, be entered against him, with costs.
All concur.
Order affirmed and judgment accordingly.