Hilton v. Bissell , 1 Sand. Ch. 407 ( 1844 )

The Assistant Vice-Chancellor.

I do not consider the objections well founded which are made to the form of the defence.

The provision of the former decree, expressly foreclosing the complainant, is not stated in the bill, and is not a necessary inference from any thing which is stated.

And the part of the plea which is supposed to constitute a separate bar for the husband, is merely an application of the defence previously stated, to the personal claim made against him by the bill. It sets up no new fact. It is, at the most, surplusage.

The question on the merits of the plea, is not difficult.

When the defendant purchased the equity of redemption from Dougherty, he expressly assumed the payment of the complainant’s mortgage, and also the prior mortgage to Griffin; and by the deed which he received, agreed to pay the amount secured by those mortgages which then remained unpaid. Instead of fulfilling this agreement, by his device and contrivance, the mortgage to Griffin was foreclosed, the premises sold under it, and the defendant became the purchaser for the amount payable to the first mortgagee under the decree of foreclosure.

The object of this contrivance was to enable the defendant to obtain the mortgaged premises free and discharged from the complainant’s mortgage.

In effect, the defendant used the money which he was bound to apply to the payment and extinguishment of Griffin’s mortgage, for the purpose of buying the land under that mortgage. And instead of leaving the premises subject to the complainant’s mortgage as the first lien, which would have been the effect of an honest application of his money; the defendant claims that he has so applied it as to cut off entirely the lien of that mortgage. He has satisfied Griffin, but in such a mode that he thereby annihilates the second mortgage. This is substantially the ground assumed by the plea.

Looking beyond the forms through which the defendant has effected this arrangement, it is a payment of Griffin’s mortgage. He was bound by his covenant to make such payment. It was his duty to discharge that mortgage. This court cannot permit him so to perform that duty, as to defeat the whole benefit secured by the covenant to the parties for whose protection it was made. No one can take advantage of his own wrong. And equity, disregarding the forms of title which the defendant has managed to acquire, will consider him as the owner of the land subject to the complainant’s mortgage, and discharged from the mortgage to Griffin.

The decree of foreclosure on the latter, would doubtless have been conclusive against the complainant in favor of a bona fide purchaser of the premises under it. But the defendant does not occupy that position, and the court cannot permit him to set up as a bar to the complainant’s right, a foreclosure obtained by his own contrivance and breach of covenant.

If he did not intend to do injustice, he should have bid enough to have paid both mortgages, or acknowledged his continuing liability on the mortgage in question.

The case is analogous to a redemption on payment by the debtor, of a bid on a sheriff’s sale on a prior judgment. (See Wood v. Colvin, 5 Hill’s R. 228, per Bronson, J.)

It comes directly within the principle of Torrey v. Bank of Orleans, (9 Paige’s R. 649,) affirmed on appeal, in the Court for the Correction of Errors, December, 1843.

The plea must be disallowed, and the defendants must answer the bill and pay the costs in twenty days after service of the order.