Lewis v. Hinman

• Decision Date: 03 March 1888
• Citation: 13 A. 143,56 Conn. 55
• Court: Connecticut Supreme Court
• Parties: LEWIS v. HINMAN et al.

13 A. 143

56 Conn. 55

LEWIS

v. HINMAN et al.

Supreme Court of Errors of Connecticut.

March 3, 1888.

Appeal from superior court, New Haven county.

Action by George B. Lewis against Marcia H. Hinman and others, to foreclose a mortgage. There was a judgment for plaintiff, and defendants Mrs. Hinman and Wheeler appealed.

Bennett & Wheeler, for appellants. Clarke, Swan & Rogers, for appellee.

CARPENTER, J. On the 1st day of September, 1882, the defendant Mrs. Hinman was the owner of four adjoining lots of land, which are designated in the finding as lots "B," "C," "D," and "E." Said lots were subject to mortgages as follows: Lots B and E were mortgaged to the Naugatuck Savings Bank, and lot D to the Middletown Savings Bank, each being a first in-cumbrance. Lot B was subject to a second mortgage to one Bull, which mortgage is now owned by the plaintiff, and to foreclose which this suit is brought. All said lots were mortgaged to the defendant Wheeler, which mortgage is a third mortgage on lot B, a first mortgage on C, and a second mortgage on lots D and E. On the 29th day of March, 1883, Mrs. Hinman sold and conveyed the equity of redemption in all said lots, and also in several other lots mortgaged to said Bull, to Harriet L. Benham. June 19, 1883, said Benham sold lots D and E to one Rausch, the consideration of which was used to pay the mortgages to the two savings banks, and to pay Wheeler $900 on his mortgage. Wheeler thereupon released his mortgage on lots D and E, the Middletown Savings Bank released its mortgage on lot D, and the Naugatuck Savings Bank released its mortgage on lots B and E, and the several release deeds were put on record. The Bull mortgage also covered lot A, which was also subject to the Naugatuck Savings Bank mortgage, and also to a prior mortgage to one Bishop, which mortgage was foreclosed; neither the savings bank nor Bull redeeming, the title becoming absolute March 6, 1883. Lots A and B were described in the Bull mortgage as one lot, and is the second piece therein described. That mortgage also embraces several other pieces of land in other parts of New Haven. The first piece is called the Elm-Street property, and was subject to a prior mortgage to the Union Savings Bank of Danbury. That mortgage was foreclosed at the October term of the superior court, 1885; and it is found that the value of the property foreclosed exceeded the amount of the debt and charges by some $1,800. The fourth and fifth lots mortgaged to Bull were released by Bull in his life-time, and the eighth was released by his administrators after his decease. It is found that the total value of the equities of redemption in the lots so released was $1,000 over and above the prior mortgages. February 4, 1886, the plaintiff became the owner of the Bull mortgage and the debt thereby secured. On the trial in the court below, the defendant Wheeler claimed (1) that he was the owner of the Naugatuck Savings Bank mortgage, and that it is still outstanding in his hands upon lot B; (2) that it did not merge in the hands of Harriett L. Benham, so far as it covers lot B; (3) that it was still a lien on lot B, as against the plaintiff, to an amount proportionate to the whole amount of the mortgage debt, as the value of lot B is to the value of the whole security originally included in said mortgage; (4) that the plaintiff's mortgage debt should be reduced by the amount of the value of the equities of which he had been foreclosed, and which had been released; (5) that it should be so reduced, especially by the amount of the value of the equity in the Elm-Street property. The court overruled these several claims, and rendered judgment for the plaintiff.

The defendants Wheeler and Hinman appealed. The reasons of appeal are as follows: (1) The court erred in holding that said Wheeler was not the owner of the Naugatuck Savings Bank mortgage, and also in that it was not still outstanding in his hands upon lot B. (2) The court erred in holding that said Naugatuck Savings Bank mortgage merged in the hands of said Harriet L. Benham, so far as it covered lot B. (3) The court erred in holding that said Naugatuck Savings Bank mortgage was not still a lien on lot B in the hands of the defendant Wheeler, as against the plaintiff, to an amount proportionate to the whole amount of the mortgage debt, as the value of lot B is to the value of the whole security originally included in said mortgage. (4) The court erred in holding that the plaintiff's mortgage debt should not be reduced by the amount of the value of the equities in the lots which had been foreclosed, and which had been released. (5) The court erred in holding that the plaintiff's said mortgage debt should not be so reduced by the amount of the value of the equity in the Elm-Street property.

The first three reasons of appeal may be considered together. They are in effect but one, and that is that the Naugatuck Savings Bank mortgage is a subsisting incumbrance on lot B in favor of the defendant Wheeler. This claim assumes that the mortgage was not paid, but purchased, by Benham; and that she, by her quitclaim deed of lots B and C, or her conveyance of January 11, 1887, transferred said mortgage to Wheeler. Suppose that he is right in this claim, how does it benefit him? His interest in the premises is subject to that of the plaintiff. As between them, Wheeler is primarily liable to pay the first mortgage. In a suit to foreclose that, his right to redeem would be first extinguished. Should he redeem, as between himself and the plaintiff, it will be deemed a payment; although, as to subsequent incumbrancers and the owner of the equity of redemption, it will be regarded as a purchase. A second mortgagee may redeem the first mortgage, and hold it against parties subsequent in interest; but subsequent parties cannot, except under peculiar or unusual circumstances, (which circumstances do not exist in this case,) redeem a first mortgage, and hold it against a second mortgagee; equity will regard it as a payment. It follows that Lewis might redeem the first mortgage, and hold it against Wheeler; but Wheeler, so long as he sustains the relation of a subsequent incumbrancer, cannot purchase it and hold it against Lewis. If, then, Wheeler is now the owner of that mortgage by purchase, by gift, or otherwise, the result is the same; it is a payment so far as Lewis is concerned. The existence of the first mortgage, in whosesoever hands it may be, can be no defense to this suit. The savings bank, or any stranger who may have purchased the mortgage, may compel Lewis to redeem; but neither the owner of the equity of redemption nor any subsequent mortgagee can do so. Again, if Lewis had paid the first mortgage, either voluntarily or by compulsion, the amount so paid would be added to his demand, and Wheeler would be compelled to reimburse him before he could avail himself of his security. And that would be so if by any possibility he should be compelled to pay the first mortgage to Wheeler. If the defendants' claim is allowed, therefore, the practical result is this: In the same suit the plaintiff is required to redeem the first mortgage by paying the amount thereof to the defendant, and the defendant in turn is required to pay the same amount to the plaintiff. The law tolerates, much less requires, no such absurdity. But the defendant is not right in his assumption. The mortgage to the savings bank cannot be regarded as subsisting to any extent, or for any purpose, as against this plaintiff. When Harriet L. Benham caused the debt to be paid to the bank, she received from that institution, and put on record, a quitclaim deed containing this clause: "Being...