Franklin Building Ass'n v. Mather

Birdseye, J.

—This action is brought for the purpose of foreclosing two mortgages given by defendant Mather and wife; the one to John Doherty, for $600, which has been assigned to, and is now held and owned by the plaintiffs. To the granting of the usual judgment of foreclosure and sale on this mortgage, no objection is made; the condition of it being the ordinary one for the payment of the debt and interest.

The other mortgage was given directly to the association; which was one formed under the act of April' 10, 1851, for the incorporation of Building, Mutual Loan, and Accumulating Eund Associations.

I cannot agree with the counsel for the defendant, that the power of sale given in the mortgage, upon the non-payment of dues to a fixed amount, and the provision that the surplus may be invested, in order to form a fund for the payment of subsequently accruing dues, do not warrant a decree for such a disposition of the surplus moneys. In my opinion, the entry of a judgment for such a sale, and the proper investment of the proceeds for the purpose of paying future dues, is not giving to the plaintiffs any larger or different right than that secured to them by the contract made between the parties. The jurisdiction of this court to decree the foreclosure of mortgages does not arise out of the power of sale usually contained in them; but from the very nature of the conditional transfer of the estate as the security for the payment of the debt; so that either of the parties has the right to apply to a court of equity to fix the amount actually due on the security, with a view, on the one hand, to the enforcement of it in case of failure to pay according to condition; or, on the other, to a redemption by the payment of the true amount found due.

The case of Holden v. Gilbert (7 Paige, 208) does not warrant the' position to which it is cited. The Court of Chancery in that case, on a power of sale for only one of four instalments, did make a decree of sale of the whole mortgaged premises; *279but it held that such a power of sale did not make all the instalments due and payable, by a mere neglect to pay one instalment within the time prescribed. It was properly said in that case, that there could be no sale, if the amount which had then accrued due, with the costs of suit, were paid. The same is true in this case. A payment of the amount reported due on such a mortgage, with interest and the costs of suit, at any time before judgment, would entitle the defendants to a dismissal of the complaint. If the moneys were paid after the sale, all further proceedings would be staid till a subsequent default, when the court might order the decree to be enforced. (2 Rev. Stats., 192, §§ 161,162.)

Nor can I assent to the proposition that this mortgage is not conditioned for the payment of money; or that the provisions of the Revised Statutes relating to foreclosure and sale for instalments not due at the commencement of the suit (2 Rev. Stats., 192-3) do not apply to it. The mortgage in the case of Ferguson v. Ferguson (2 Comst., 360) was conditioned for the support and maintenance of the mortgagees during their lives, and not for the payment of any money.

The main and primary, if not the only intent of the mortgage on which this action is brought, is to secure the payment of money. The sums which are to be paid are not, as is commonly done, inserted in the mortgage ; but for their amount reference is made to the articles of association and the books and charges of the association. This reference will make the amount to be paid sufficiently certain. That part of the condition of the mortgage, that it is to secure the performance of all other covenants, promises, and agreements entered into “ by Mather with the association, does not change the general nature of the security. That clause is merely subsidiary to the principal condition, which is for the payment of the dues to the association. And upon an examination of the articles of association, I do not see any covenant, promise, or agreement on the part of Mather, the breach of which is not to be compensated, if at all, by the payment of a specific sum of money.

There must, therefore, be a judgment of foreclosure and sale; and it will provide for the payment to the plaintiffs, out of the proceeds of the sale, of the amounts which the referee has reported to be due to the.plaintiffs upon the two mortgages, with *280interest thereon and costs. The surplus to he brought into court, by paying the same to the treasurer of Kings county, who must invest the same on bond and mortgage, to be held subject to the claims of the plaintiffs for subsequently accruing dues from Mather, and with the right to the plaintiffs to apply, from time to time, for the payment thereof. As this case is peculiar, the sale may be made by a referee; and Henry W. Johnson is appointed such referee. The plaintiff to have an allowance of sixty dollars.