Freeman v. Auld

Rosekrans, J.

The mortgage sought to be foreclosed in this casé, and the bond accompanying the same, on their face purported to secure to the Home Insurance Company the payment of the sum of $4000 with interest. But by an instrument executed by the mortgagee to the mortgagors contemporaneously with the delivery of the bond and mortgage, it was recited that the mortgagors had agreed to accept from *591the mortgagee only the sum of $2000 at the time of the execution of the bond and mortgage, and the balance of said $4000 at the time of the completion of the house in course of erection on the mortgaged premises to the satisfaction of the mortgagee: It was also recited that the mortgagee advanced at that time the sum of $2000 to the mortgagor, upon the express understanding and agreement between the parties to the mortgage that the same should bear interest, to be computed and charged from the date of said loan. And it was agreed by the mortgagee that the remaining sum of $2000, secured to be paid by said bond and mortgage, should not bear interest until it should be advanced by the mortgagee, notwithstanding the provisions of the bond and mortgage. As between the parties to this bond and mortgage, it is clear that the mortgagee could not enforce the payment upon it of any greater sum than the $2000 loaned at the time of the delivery of the bond and mortgage, and the interest thereon, until it had advanced the remaining sum of $2000. It is also clear that every assignee of said bond and mortgage took them subject to the equities existing between the original parties. It was expressly stipulated in this action that the mortgagee never did advance upon the mortgage more than the sum of $2000. The plaintiff claims the right to foreclose this mortgage as assignee, and in addition to the rule of law adverted to—that he took the assignment subject to the equities existing between the original parties—it appears by the stipulation referred to that he took the assignment of the bond and mortgage with full knowledge that only $2000 had been loaned upon them; and that he only paid the mortgagee that sum, for the assignment. If this were the whole of the case, the plaintiff had no right to foreclose the mortgage for more than the $2000 advanced upon it.

But the judge by whom the cause was tried has found as a fact that at the date of the mortgage the mortgagors, in addition to receiving the sum of $2000 upon it, also received *592from the mortgagee its agreement to advance upon the hand and mortgage the further sum of $2000, when the house then in process of erection upon the mortgaged premises should he completed to the satisfaction of the mortgagee. Assuming this finding to be correct, it is difficult to "see that it can have any force, when it is conceded that even if the contingency had happened upon which the further advance was to he made, no such advance had in fact been made. The mortgagee could in no event recover more, or foreclose the mortgage for a greater sum, than was actually advanced upon it. But the defendant has excepted to the finding of fact; and a reference to the instrument signed hy the mortgagee, (which contains the whole of the evidence upon this subject,) shows that the exception is well taken. That instrument did not hind the mortgagee to advance a dollar beyond the sum of $2000 advanced at its date, It left it optional with the mortgagee to make further advances or not, as it .might choose, and merely provided that the remaining sum of $2000 should not hear interest until it should he advanced hy the mortgagee.

But the plaintiff insists that the mortgagors subsequently conveyed the mortgaged premises to Bulkley, subject to this mortgage of $4000, which Bulkley assumed to pay as a part of the consideration of purchase; and that as between the mortgagors and Bulkley $4000 was deducted from the purchase money, and Bulkley sold the premises to one Coyle under similar circumstances, and a similar agreement as between them; that Coyle sold the premises to the defendant Auld under similar circumstances, and a similar agreement as between them ; and that as the plaintiff had paid the mortgagee $2000 for the assignment of the hand and mortgage, and had made an agreement with the mortgagors to credit them the sum of $2000 in addition, upon their prior indebtedness to him, and had given such credit, these facts give him the right to collect the sum of $4000 upon the hand, or to foreclose the mortgage for that sum with interest from the *593date of the mortgage. This claim has no foundation in law, if the facts stated are conceded. The agreement of the plaintiff to credit the mortgagors $2000 upon their precedent indebtedness to him, and the giving of such credit, did not operate as an assignment of any cause of action the mortgagors may have had against any of the purchasers of the mortgaged premises upon their respective agreements to pay $4000 upon the bond and mortgage. The plaintiff still stood as the naked assignee of the bond and mortgage, and was only entitled as such to recover the actual sum due upon them. The mortgagors assigned nothing to the plaintiff, and the facts stated did not operate as an assignment of any thing to him.

But the defendant Auld has excepted to the finding of fact that the successive purchasers of the mortgaged premises made agreements with their immediate vendors, to pay the sum of $4000 upon the mortgage. The deeds to the several purchasers contain the only evidence of their agreements on this subject, and they show that the extent of their several agreements was to pay the amount actually due upon the mortgage. Bulkley assumed and covenanted to pay the mortgage, described as amounting to $4000, the sum due and to grow due thereon. The agreements of the other vendees were similar to Bulkley’s. This exception is well taken. The proof does not warrant the finding. The cause of action which the several vendors of the mortgaged premises may have against the vendees, upon their agreements to pay the consideration money agreed to be paid, can only be enforced by the several vendors or some assignee of the equitable lien or right of action of their vendors for the unpaid purchase money. It is questionable whether such assignee can enforce the lien. (1 Lead. Cas. in Eg. 367, 369.)

The plaintiff should have accepted the sum of $2000 and interest, tendered him by the defendant Auld. The judgment of the special term should be reversed, and a new trial ordered, unless the plaintiff shall elect to modify the judg*594ment so that it shall he for the recovery of the sum of $2000 and interest, and that the defendant Auld recover his costs of the action.

Ingraham, P. J. concurred.