Merchants Bank & Trust Co. v. Pettison

• Decision Date: 03 March 1931
• Citation: 153 A. 789,112 Conn. 652
• Parties: MERCHANTS' BANK & TRUST CO. v. PETTISON.
• Court: Connecticut Supreme Court

153 A. 789

112 Conn. 652

MERCHANTS' BANK & TRUST CO. v. PETTISON.

Supreme Court of Errors of Connecticut.

March 3, 1931

Appeal from Superior Court, Hartford County; Carl Foster, Judge.

Action by the Merchants' Bank & Trust Company against Emma D Pettison for foreclosure of a judgment lien, brought to the superior court, and tried to the court. Judgment for plaintiff, and defendant appeals.

Error and cause remanded.

Ufa E Guthrie, of Hartford, for appellant.

Louis H. Katz, of Hartford, for appellee.

Argued before MALTBIE, C.J., and HAINES, HINMAN, BANKS, and AVERY JJ.

HAINES, J.

The plaintiff is the owner of a note for $5,000 made by one Bradley, dated April 19, 1927, and secured by first mortgage upon certain real estate on Martin street in the city of Hartford. On September 22, 1928, Bradley conveyed the premises to the defendant who assumed and agreed to pay this mortgage obligation and also a second mortgage for $1,400 and the taxes due and payable in July, 1929. On May 23, 1929, the defendant conveyed the premises to one Clinton who in turn assumed and agreed to pay these mortgages.

In October, 1929, the plaintiff sued this defendant and others upon the note, attached property of the defendant on Capitol avenue in Hartford, and, after securing judgment for $5,713, filed a judgment lien against the latter property. The present action was brought to foreclose that judgment lien. Before the case came to trial the defendant filed a motion under section 5238 of the General Statutes, Rev. 1918, now section 5124, Rev. 1930, asking that the court ascertain the value of the premises which were subject to the mortgage, and apply the same upon the plaintiff's judgment and render judgment in the present action for only such balance if any as remained unpaid.

Plaintiff's counsel insists that this motion was not acted upon by the trial court, " and there would therefore appear to be nothing to appeal from." While the file does not show a formal denial of the motion, it does appear that judgment was rendered in evident denial of it and it further appears from the record before us that the court did expressly overrule the claim of law presented by the motion. Finding, part 3, Rec., pp. 12. 13. The questions thus raised are included in the reasons of appeal and are therefore before us for consideration.

The text of the statute in question appears in the footnote.^[1] The essential dispute between the parties is involved in the interpretation of that portion of the statute which requires that the mortgage shall be " a first charge" upon the property. The plaintiff's claim was and is that certain taxes which were assessed in July, 1928, and became due in July, 1929, and were unpaid at the time this action was brought, were a " first charge" upon the Martin street property within the terms of section 5238, which took precedence of the plaintiff's first mortgage under the provisions of Public Acts of 1927, ch. 300, and was such a lien at the time this action was pending, although no certificate of lien had been filed by the collector at the time the motion was made. The plaintiff therefore contends that section 5238 did not require or permit the trial court to grant this motion.

At common law the mortgagee's remedy by the foreclosure and appropriation of the mortgaged property was a bar to further action, but his rights in this state have been greatly enlarged by legislation. In 1887 the original of the statute now in question was enacted whereby the mortgaged property could be valued, and, if worth less than the amount of the debt, judgment for the deficiency only, rendered against the debtor.

In a case which arose in 1886, property had been mortgaged by its owner A, who then sold the property to B, who assumed and agreed to pay the mortgage, and B in turn sold the property to C, who also assumed the mortgage. The holder of the mortgage note then brought suit against B, the second owner, obtained a judgment and filed a judgment lien against other property of B, and then brought suit to foreclose both the mortgage and the judgment lien. B requested of the court that an appraisal of the mortgaged property be made, and that his personal obligation be limited to any insufficiency in value which might thus be shown to exist in the mortgaged property. The additional costs, annoyance, and expense thus imposed upon B are obvious. The court in denying the motion pointed out that in the then existing state of our statute law " the question here is wholly one of marshaling securities. The judgment lien stands on as legal ground as that of the mortgage and there is no equitable rule by which we can give one an advantage over the other. If there is reason for limiting the rights of the creditor under the judgment lien, it should be done by legislation." Gushee v. Union Knife Co., 54 Conn. 101, 107, 6 A. 192, 193.

With the obvious purpose of adopting this suggestion of relief to a debtor so situated, the Legislature in the following year enacted the original of the statute now in question, which, so far as we are aware, has never been the subject of interpretation by this court. Public Acts of 1887, c. 25: General Statutes, Rev. 1918, § 5238, now § 5124, Rev. 1930.

This is a remedial statute and requires a liberal rather than a strict construction in aid of...