Arnold v. Green

• Decision Date: 26 November 1889
• Citation: 23 N.E. 1,116 N.Y. 566
• Parties: ARNOLD et al. v. GREEN.
• Court: New York Court of Appeals Court of Appeals

116 N.Y. 566

23 N.E. 1

ARNOLD et al.

v.GREEN.¹

Court of Appeals of New York, Second Division.

Nov. 26, 1889.

Appeal from a judgment of the general term of the supreme court in the fifth judicial department, modifying a judgment entered upon the decision of the special term, and affirming it as modified.

On the 11th of July, 1879, the defendant entered into an agreement with Isabelle K. Arnold, one of the plaintiffs, whereby he covenanted to convey to her 190 acres of land, known as the ‘Arnold Homestead,’ in the town of Mt. Morris, Livingston county, ‘subject to all existing liens now on said property,’ upon the payment by her of the sum of $1,400, with interest thereon, payable semi-annually, together with interest on the incumbrances then existing on said farm, and the taxes thereon; all of which she duly agreed to pay on her part. The liens existing on the premises at the date of said contract were (1) a mortgage dated April 17, 1877, given by Russell G. Arnold to William A. Wadsworth to secure the payment of $6,000 in three years, with semi-annual interest, no part of which had been paid when this action was commenced, except the interest up to April 2, 1883; and (2) a decree in the surrogate's court of said county for the payment of the debts of Ashbel Arnold, deceased, a former owner of said land, amounting to the sum of $527.47, with interest from February 21, 1881. This decree was a charge upon the land subsequent to the Wadsworth mortgage, but prior to the interest of the defendant, who at the date of said contract was the owner of the equity of redemption. An appeal had been taken from said decree, and was pending at the time of this trial. The plaintiff Susie K. Arnold subsequently, by assignment, acquired an interest in said land contract, upon which there is still unpaid the whole of the principal, besides interest from May 10, 1883. The plaintiffs have been in the possession of the premises since the date of the contract. On Saturday, December 8, 1883, the defendant demanded of the plaintiffs payment of the interest due on the contract, and was told that it would be paid by the middle of the following week. He gave them until the next Saturday. They also informed him that they should get the money and pay him, and that they should want a deed, to which he made no reply. On Monday, December 11th, they told him that they would be ready at 11 o'clock to pay him and take a deed, and he said that he would be at home at that hour; but, before it arrived, he left Mt. Morris, where he resided, and went to the residence of said Wadsworth, at Genesseo, and proposed to pay said mortgage, and take an assignment of it. Mr. Wadsworth refused to assign, whereupon the defendant paid him the amount of the mortgage, $6,231.50, and received a discharge of the same, which he placed upon record. In the afternoon of the same day the plaintiffs offered to pay defendant the sum unpaid on the contract, and requested him to give them a deed, but he refused. He, however, offered to sell the farm to the plaintiff Isabelle, for the amount of the incumbrances thereon, provided she would ‘pay up to six or seven thousand dollars,’ and to give a deed, and take a mortgage payable in six years. Said Wadsworth held the mortgage as an investment, and had not called for the principal, and did not wish that it should be paid; but he had stated to the defendant that unless payments were promptly made he should proceed to collection. On several occasions the defendant had spoken to the agent of Mr. Wadsworth about unpaid interest, and had informed him that he wanted it kept up because he had some interest in it. On December 29, 1883, the plaintiffs made a formal tender and demand, but the defendant again refused; and thereupon they brought this action to compel a specific performance. The defendant, by his answer, claimed that he was the equitable owner of the Wadsworth mortgage, and asked that it be adjudged a valid and subsisting lien upon the premises. The trial court, after finding the facts substantially as stated, found, as a conclusion of law, that said facts constituted no defense or counter-claim to the plaintiffs' cause of action, and ordered judgment for specific performance, and for a conveyance by the defendant, ‘subject to all liens existing upon said property on the 11th of July, 1879, upon being paid the sum of $1,400, and interest thereon from May 10, 1883.’ Judgment having been entered accordingly, the defendant appealed to the general term, which modified the decree by inserting therein, after ‘July, 1879,’ the following provision: ‘And particularly to the lien of the Wadsworth mortgage, so called, being a mortgage to secure the payment of the sum of $6,000, and interest thereon from April 21, 1883; that said George A. Green be declared subrogated to the rights of the mortgagee in said mortgage at the time of its payment and discharge, with the right to enforce the payment of the principal and interest due and unpaid thereon; and that the discharge of said mortgage made by Wadsworth, the mortgagee, and recorded in the office of the clerk of the county of Livingston, be by said clerk canceled of record; * * * that the defendant, * * * on the plaintiff's election, at any time within three months after entering this judgment, or the final determination of any appeal taken in this action, on payment to him of the amount secured to him by said bond and mortgage as reinstated, be required to assign to such person or persons as the plaintiffs may direct all rights and interests taken by him under said Wadsworth bond and mortgage as reinstated, and that the plaintiffs have the same time in which to pay and satisfy said mortgage, if they elect to pay the same.’

BROWN, J., dissenting.

Lucius N. Bangs, for appellants.

E. A. Nash, for respondent.

VANN, J., ( after stating the facts as above.)

This appeal presents the single question whether, under all the circumstances of the case, the defendant should have been substituted in the place of Mr. Wadsworth, as the owner of the mortgage in question. Did he, by the fact of payment, become the equitable assignee of the security, and entitled to enforce it for his own reimbursement, and the protection of his interest in the land? Under some circumstances, the payment of a mortgage does not satisfy it, or...