Saunders v. Frost

22 Mass. 259
Massachusetts Supreme Judicial Court·Decided September 15, 1827·Published

Opinion

Parker C. J.

delivered the opinion of the Court. The rights of the parties to this process require an analysis of the complicated transactions under which they severally claim a decree in their favor.

The first mortgage' to Frost was intended to secure fwo notes of 300 dollars each, one payable in three afid the other in six years from the date, with interest annually. There remained in Joseph Winship the mortgager only a right of redeeming the estate by paying the interest annually and the principal debts as they became due. No subsequent conveyance by Winship could impair Frost’s right to hold the land to secure those objects. But still Winship had an interest, which was a legal subject of contract and transfer. On the 11th of February, 1822, having this right, he conveyed the same in mortgage to Carew, to indemnify him against a note, on which he was surety, to Edward Pynchon. Carew’s right then was to redeem the former mortgage, which he could do only by performing the condition of that deed, viz. paying the interest of 600 dollars annually, and the instalments of the principal, according to the condition. Still an interest was left in Winship, which was also a legal subject of contract and transfer. And this interest was on the 16th of June, 1823, legally assigned by another mortgage to the same Carew and the two plaintiffs, to secure them on several liabilities, or debts due to them. The right acquired under this mortgage was to redeem the second mortgage by performing the condition thereof to [266] Carew, whereby, as legal assignees of that mortgage, they would have a right to redeem the first mortgage by paying the debt due to Frost.

In this state of things, omitting for the present any consideration of Carew’s assignment to Frost, it will be well to consider what remedy the two plaintiffs wrould have, in order to avail themselves of the interest which they had acquired under this third mortgage. And wre think they must have severed from Carew in their bill, for his interest as mortgagee of the second mortgage was adverse to theirs, and the process against him must have been compulsory to oblige him to cancel, release, or discharge his mortgage ; and he would have been obliged to contribute to the redemption of the mortgage to Frost, if he would avail himself of his third mortgage; otherwise he would have the benefit of the security as if he was first mortgagee. And if the two plaintiffs had paid the whole debt to Frost and discharged the second mortgage, they would hold the same as assignees of that mortgage until Carew should have paid his just proportion, deducting however the amount he was entitled to receive under his second mortgage, which must be satisfied in that way, or by payment to him by the plaintiffs, before they could have any benefit from the third mortgage, in which alone they were interested. If he chose not to redeem, as he might from an opinion that the estate was not of sufficient value to pay the amount secured in Frost’s mortgage and his own second mortgage, he could not be compelled, but in that case he could not claim any interest in the estate under the joint mortgage to himself and the plaintiffs ; oi if it should be considered that he held the legal estate as tenant in common, by bill in equity he might be compelled either to convey to his co-tenants, or to pay his proportion of the sums paid to redeem.

The two present plaintiffs then, by tendering the sum due to Carew on his second mortgage, would be entitled to redeem against Frost, and by paying his debt would have a right to possession of the estate.

It "s to be seen then whether the defendant Frost, by virtue oí his assignments from Carew of the two mortgages in which he was a party, stands in a better position against the claims [267] of the plaintiffs than Carew would if he had not assigned. I is an invariable principle, that an assignee with notice must be subject to all the disadvantages and liabilities of the assignor. The assignment to Frost of Carew’s first mortgage was more than a year after the mortgage to the plaintiffs and Carew, and the assignment of Carew’s interest in the third mortgage was nearly two years after that mortgage was made ; so tint full notice of the rights of the plaintiffs must be presumed. Frost then is to be dealt with as Carew would be ; and he cannot, in virtue of his first mortgage, gain any advantage over the plaintiffs in relation to the third. He took a common interest with them in what remained after satisfaction of the two first mortgages, and was equally bound with them to clear off those incumbrances, provided he would enjoy any interest under the third mortgage. The two plaintiffs then have a right to treat him as mortgagee of the first mortgage, and assignee of the second, and by tendering what is due, to have possession of the estate without regard to his interest in the third mort gage, which interest may be settled in a future process. If he is content with those two debts, he may receive and hold the whole ; but if he claims indemnity under the third mortgage, he must pay his proportion of the sum necessarily paid to make it valid. Nor can he apply the rents and profits of the estate to the reduction of the debt secured by the third mort gage, for he entered only under the first, and his possession and receipt of rents was in virtue of that only.1 Carew could not by this process have gained an advantage over his co-tenants, and there is no reason why Frost should have a greater privilege.

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Saunders v. Frost, 22 Mass. 259 (Mass. 1827).

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