New-York Life Insurance & Trust Co. v. Milnor

1 Barb. Ch. 353

Opinion

The Chancellor.

In the absence of any proof of the existence of the mortgage upon the eighty-two and a half apres, tp, secure a part of the purchase money of that portion of the prem ises covered by the mortgage of the complainants, the master did not err in deciding that the eighty-two and a half acres should be sold first, to satisfy the amount reported due to the complainants, and the interest and costs. And under the special directions contained in this decree, as to the mode of selling, it is somewhat doubtful whether the master would have been authorized to decide differently, even if the defendant Grant hid appeared before him and proved the giving of that mortgage to Ranney, and the assignment thereof to himself. Upon the facts now disclosed, however, the petitioner is entitled to relief, upon payment of the costs to which the defendants Sprague and Crnger have been subjected in opposing this application. And if the particular directions contained in this decree prevent the proper adjustment of the rights of the parties, in settling the order of sale, the decree itself must be amended by striking out the particular directions, and inserting the directions usually contained in decrees in such cases.

Under the act of 1840, to reduce the expenses of foreclosing mortgages, and the rules of this court regulating the proceedings in foreclosure suits, defendants who have distinct,interests in different portions of the mortgaged premises, but who have no defence to the complainant’s claim as set forth in his bill, have no opportunity, previous to the decree, to litigate the question, between themselves, as to the order in which the several parcels of the mortgaged premises should be sold ; so as to protect the equitable rights or interests of such defendants in their respective portions of the premises. It is, therefore, a matter of course, at the time of making a decree of foreclosure and sale, to satisfy the complainant’s debt and costs, upon a mere suggestion that separate portions of the mortgaged premises are held by different persons, under conveyances or mortgages subsequent to the mortgage of the complainant, to insert a provision in the decree which will enable the master to sell in such a manner as to protect the equitable rights of the defendants respectively. The provision usually inserted in the decree in such cases is, that if it shall appear to the master, who is to make the sale, that separate parcels of the mortgaged premises have been conveyed, or incum bered, by the mortgagor, or by those claiming under him subse quent to the lien of the complainant’s mortgage, such master shall sell the mortgaged premises in parcels, in the inverse order of alienation, according to the equitable rights of the parties who are subsequent grantees or incumbrancers, as such rights shall be made to appear to the master. This qualification of the direction to sell in the inverse order of alienation, that it shall be according to the equitable rights of the subsequent grantees or incumbrancers, is necessary to meet a case like the present. And it should always be inserted in the decree when such decree directs the sale of the premises in parcels, in the inverse order of alienation. Under a decree thus drawn, if the grantee of a portion of the premises was, by virtue of his conveyánce, entitled to a right of way, or other easement, in the residue of the premises which belonged to the grantor subsequent to such conveyance, it would be a matter of course for the master to sell such residue subject to such right of way, or other easement, in favor of the owner or purchaser of the dominant tenement, and his heirs and assigns.

It was settled in the case of Clark v. Rugge, (2 Roll. Abr. 60,) which appears to be the same case reported by Oroke under a somewhat different title, that if a man, having a close surrounded by his own land, grants such close to another, the grantee and those claiming under him have a right of way of necessity, through the lands of the grantor, as incident to the grant; which way of necessity the grantor may assign to the grantee through such part of his-la'nd as he shall think proper. The same principle also appears to apply to the case where the close granted is partly surrounded by lands of a third person. At least, such appears to have been the opinion of Mr. Justice Popham in Jordan v. Atwood, (Owen's Rep. 122.) The implied grant oí a way of necessity over the lands of the grantor, appears to be as strong in the one case as in the other; for the grantee cannot claim a right of way over the adjoining lands of such third person. The case of How ‘on v. Fr ear son, (8 Term Rep. 50,) also appears to be a decision ’n favor of the principle that there is an implied right of way over the adjoining lands of the grantor, where the grantee has no other means of obtaining access to the lands granted, without trespassing upon the property of a stranger. For, as I understand that case, the land conveyed by the plaintiff and others, to the defendant, was bounded on three sides by the land of persons other than the grantors. But as the grantee could not have access to his land, called the upper meadow, on the north, south or west sides thereof, without trespassing upon the property of strangers, he' was entitled to a way of necessity, by virtue of his grant, over the adjacent laud of the plaintiff, as one of the grantors; which land bounded the upper meadow on the east. That, too, was a very peculiar case, inasmuch as the grantors conveyed the close called the upper meadow, to the defendant, in their characters of trustees for the sale thereof, and the lands of the plaintiff which bounded it on the east, were held by him in his own right. And yet the court held that the defendant was entitled to a passage over those lands as a way of necessity; as he could not enjoy the lands granted to him unless he could have a right of way to it. The grantee of the ten acres now owned by Martindale was therefore, at the time of his grant, entitled to a way of necessity over the eighty-two arid a half acres which still remained the property of the grantor after such grant, if the lands adjoining the ten acres on the east then belonged to a stranger, so that the grantee could not have obtained access to the lauds thus granted, either from the south or east, without trespassing upon the property of others. And in selling the lands in parcels, in the inverse order of alienation, and according to the equitable rights of the parties interested, they should be sold in such a manner as to preserve that right of way, if it still exists, for the benefit of the present owner of the ten acres; or for the benefit of the purchaser of that part of the mortgaged premises, if it shall be necessary to sell these ten acres under the decree.

The direction contained in the decree upon that subject, however, is erroneous, even if it does not, in fact, reserve the right of way in favor of the wrong party. For it prejudges the question of the original existence of the right of way claimed, without anything to show whether Pearce was or was not the owner of the lands adjoining the ten acre lot on the east, at the time of the con veyance of that lot to him. It also provides that each parcel sold shall be sold subject to the legal and equitable right of passage oyer the same; without limiting the right to the owner of the dominant tenement, as such right existed between him and the owners of the servient tenement previous to the foreclosure and sale under the decree. In other words, a sale in conformity to the directions of the decree, if this direction in such decree is not so carelessly drawn as to mean nothing, would create new rights of way, as between the purchasers of the different parcels of the mortgaged premises, which did not exist between the owners of such parcels previous to the sale. Again; the right of way of necessity over the lands of the grantor, in a conveyance, in favor of the grantee, and those subseqently claiming the dominant tenement under him, is not a perpetual right of way ; but it continues only so long as the necessity exists. And if the grantee of the dominant tenement, or those claiming the,same under him, should afterwards, by purchase or otherwise, acquire a convenient way over his own lands to the tenement in favor of Which the. way of necessity previously existed, the way of necessity over the. lands of the original grantor of such tenement will cease. So, if a convenient way to such tenement is subsequently obtained by the owner thereof by the opening of a public highway to, or through such tenement. ' The case is otherwise where the owner of land has a right of way to the same, over the premises óf another, by prescription or by express grant. A way of necessity only arises upon the implication of a grant, and cannot be extended beyond what the existing necessity of the case requires. Such a right of way is only commensurate with the existence of the necessity upon which the implied grant is founded, and when such necessity ceases the right of way also is terminated. (See Holmes v. Goring, 2 Bing. Rep. 76.) The special direction inserted in the decree in this case, in relation to the sale of the several parcels of the mortgaged premises, subject to a right of passage over the same, must therefore be expunged, as having been inserted in such decree by inadvertence. The direction inserted in the decree, in relation to the ord,er, of selling the premises, must also be stricken out; except that part thereof which directed the master to appoint a day for the parties, who had appeared, in the cause, to appear before him, and that he should receive proofs of the order and manner of alienation of the premises. And in lieu of the special directions thus expunged, or stricken out of the decree, the usual directions in such cases must be inserted in the decree; to wit: “.that if it shall appear to the master who is to make such sale, that sepa-, rate parcels of the mortgaged premises have been conveyed, or encumbered, by the mortgagor, or those claiming, under him subsequent to the lien of the complainants’ mortgage, such master shall sell the premises in parcels in the inverse ord'er of alienation, according to the equitable rights of the parties, as such subsequent grantors or incumbrancers, as such rights shall be made to appear to the said- master.”

The provision in relation to the notice to the parties, who have appeared in the cause, to attend the master and exhibit their proofs as to the order, of alienation, I have left in this decree, because that part of the decree has already been executed by the master; and a part of this application is to reverse his decision upon the evidence adduced. And for the same reason the decree must be amended mine pro tunc, as of the time when it was originally entered hand if the decree has been enrolled the enrolment must be discharged, and the decree enrolled anew as amended. A more proper provision, however, to be inserted in a decree of this kind, as to the hearing of the parties in relation to the order of sell ip g the different parcels, would be to direct the master, in his notice of sale, to specify the time and place when the several parties interested in different portions of the mortgaged premises, as subsequent purchasers or incumbrancers, should attend before him and be heard as to the order in which the several parcels should be sold. This would give all parties interested an opportunity to be heard upon that question; without the unnecessary expense of employing a solicitor to,enter an appearance for them previous to the decree, to entitle them to notice of the time and place when and where the order of selling is to be settled, by the master.

It remains to be seen what special directions are necessary to be given to the master in this' case, by a separate order to be now entered, as to the manner of selling the premises, so as to protect the rights of the parties as they now appear. Although it does not certainly, appear that Pearce, the original grantee of the ten. acre lot, ever was entitled to a right of way of necessity over the eighty-two and a half acres, or, if the right once existed, that it still continues in favor of the present owner of the ten acre lot, still it does not seem to be necessary to go before the master, to take any proof on the subject, before the sale. For the owners of these two parcels of the mortgaged premises will now be able to understand their respective rights so as to explain them to the bidders at the sale. It will therefore be sufficient to direct the master to put up and sell the eighty-two and a half acres, subject to such a way of necessity over the same, if any, as shall, immediately previous to such sale, exist in favor of the then owner or owners of the ten acre lot; under th'e original conveyance thereof to Pearce, and the subsequent grants of the same. And if it shall be necessary to sell the ten acre lot, under the decree, there must be reserved to the purchaser of that lot at the master’sisale, the same right of way, if any, which shall have existed at the time of the sale of the eighty-two and a half acres, in favor of the then owner of the ten acre lot. These special directions are necessary, and they must be inserted in the master’s deed, in order to preserve the supposed right of way, if it in fact exists. For as the owner of the ten acre lot is a party to the decree, an absolute sale of the eighty-two and a half acres, without reserving the right of way as it existed previous to such sale, would give the purchaser a perfect title to the premises, purchased by him, discharged of any such right.

As the twenty acres conveyed to Conger, in 1838, was conveyed subject to the payment of $400, of the complainant’s mortgage, and the interest on that amount, the owner of the ten acres has the right to insist that the proceeds of the twenty acres, to the extent of the $400 and interest, or so much of such interest, as has not already been paid by Conger upon the mortgage to the complainants, as well as the whole proceeds of the eighty-two and a half acres, shall be applied in payment of the decree in this cause, before resort shall be had to the ten acre lot. And as Ranney, at the time of the conveyance of the eighty-two and a half acre lot to Conger and Tuller, was, as the owner of that lot, entitled to have the $400 and interest charged upon the twenty acres, in part payment of the mortgage to the complainants, and in discharge of so much of the lien upon his remaining interest in the premises, he did not lose that right by the conveyance to Conger and Tuller. For the taking back of the mortgage from them at the same time, for a portion of the unpaid purchase money, preserved the right, to the extent of the moneys secured by and still due upon that mortgage. And the defendant Grant, as the assignee'of the mortgage, is entitled to the same rights as between him and the present owners of both moieties of the twenty acres.

The master must therefore inquire and ascertain how much of the $400 and interest which was charged upon the twenty acres by the deed of November, 1838, has been paid by the owners of the twenty acres, towards that $400 and interest; and how much thereof still remains unpaid. And if any thing was paid upon the mortgage to the complainants, either for principal or interest, by Conger and Tuller, or by Conger alone, after they became the purchasers of the eighty-two and a half acres, without specifying whether it was paid upon account of the $400 chargeable on the twenty acres, or on account of the $600 chargeable on the eighty-two and a half acres, the master must allow four tenths of it as a payment on account of the $400 and interest charged on the twenty acres. After the master has thus ascertained how much there is still chargeable primarily upon the twenty acres, he must add thereto four tenths of the costs decreed to be paid. If that amount, with interest thereon to the time appointed for the sale, is paid to him previous to the sale, he must apply it in part payment of the debt and co’sts due to the complainants. And in that case he is not to sell any part of the twenty acres, unless the proceeds of the other two parcels of the mortgage shall be insufficient to pay the residue of the amount due upon the decree, and the small balance still due upon the mortgage to the defendant McComber. This last mentioned mortgage is a lien upon the whole of the mortgaged premises. But as all the conveyances from Biriney contained covenants of warranty against it, the balance still due thereon is primarily chargeable upon the procéeds of the eighty-two and' a half acres, after paying the amount due upon the decree with interest and costs; and should be deducted from the amount due upon the mortgage of Conger and Tuller to Ranney.

If the amount chargeable primarily upon the twenty acres is not paid before the sale, the master must sell that twenty acres first, and apply the proceeds, or so much thereof as may be nécessary, to the payment of the amount' primarily chargeable upon the twenty acres, and the four tenths of the costs. He must also Sell the eighty-two and a half acres, subject to the supposed right of way as above directed, and apply the proceeds thereof" or so touch as may be nécessary, to pay the remainder of the debt and ' costs decreed to be paid. And the residue of such proceeds, or so much as may be necessary, will then be applicable to the payment of what shall hereafter be ascertained to be due upon the mortgage to McComber. If the proceeds of the eighty-two and a half acres" are not sufficient to pay the balance due upon the decree, the master must then sell the ten acre lot and apply the proceeds thereof or so much as may be necessary to satisfy the deficiency. And if that is not sufficient, he must then sell the twenty acre lot, if it has not already been sold.

In relation to the inode of selling the twenty'acres, it is "not necessary that the two undivided moieties thereof, which belong to Conger and to the heirs of Tuller, should be sold separately, in order to protect the rights of the several parties having interests theréin. A sale of the whole together will save the expense of a subsequent partition; and the proceeds of the sale of the whole together can be subsequently apportioned and applied according to the equitable rights of the parties now interested in that portion of the mortgaged premises. Conger conveyed the undivided half of the twenty acres to Tuller with warranty. It Tuller therefore had paid, for that half, his heirs would have a right to claim that the whole of the ,$400 and interest, which was a charge" upon that twenty acres, should be paid out of the "proceeds of the undivided half thereof which remained the prop erty of Conger. And their half of the twenty acres should not be sold unless the proceeds of Conger’s half are insufficient tó pay off’ and discharge so much of the complainants’ debt and costs, and of the balance due on the mortgage to McComber, az is properly chargeable upon the twenty acres. It appears, however, that Tuller gave back a mortgage upon the half of the twenty acres conveyed to him, to secure the purchase money; and that this half of the twenty acres is now the only security for the payment of the amount remaining due upon that mortgage. If Conger had not assigned the mortgage, he would therefore be entitled to have an amount, of the proceeds of Toiler’s half of the twenty acres, equal to what is still due upon his mortgage, applied to satisfy the proportion of the decree in this cause which is equitably chargeable upon the twenty acres. But as Conger has assigned his mortgage to Martindale. as between Conger and the assignee of that mortgage, equity requires that the whole amount justly chargeable upon the twenty acres should be paid out of the proceeds of Conger’s half of the twenty acres, if such proceeds are sufficient for that purpose; so as to enable the assignee of the mortgage to obtain satisfaction thereof, if possible, out of the proceeds of the other half of the twenty acres.

There are many other parties to this suit who are not before the court on this application, and who may have equitable claims upon the surplus moneys, which may arise upon the sale of different portions of the mortgaged premises, after satisfying the amount which is payable under the decree. All that can be done now, therefore, is to direct the order of sale of the different parcels which it may be necessary to sell to pay the amount which is due upon the decree, with interest and costs. The residue of the proceeds of the several parcels sold, must be brought into court; so that the rights of the several persons interested therein may be settled, upon a reference to a master, under the provisions of the 136th rule. And the master who riiakes the sale must be directed to state, in his report of the sale, the amount which each separate parcel of the mortgaged premises sold by him under the decree brought at such. sale.

An order must be entered directing the decree to be amended nunc pro tunc, as above directed, and containing the necessary instructions to the master to make the sale conformably to the principles herein stated, and to make his report accordingly. The master must assign a time and place for the parties to attend be- ■ fore him, for the ascertainment of the amount which is primarily chargeable upon the twenty acres belonging to Conger and the heirs of Tuller, on account of the $400 and interest specified in the deed of November, 1838; and he must direct notice to be given to the solicitor of Grant, as well as to the solicitor of Conger and Sprague. Grant must also pay to the solicitor of. the two last named defendants their costs upon this application, as fixed by the rule of this court.