Grattan v. Wiggins. force and reason by the defendants than the plaintiffs. We have carefully examined the points made by the plaintiffs in their appeal from the judgment, and have come to the conclusion that the Court below did not err in holding the statute, as plead by the defendants Laurencel and Eldridge, a bar to all the notes falling due prior to the two last so far as relates to the mortgage. II. The next questions to examine are those raised by the defendants Laurencel and Eldredge by their appeal. The first point is, that the Court below erred in overruling the demurrer to the complaint filed by those defendants. One of the grounds of the demurrer was, that there was a misjoinder of parties plaintiff, in this, that Rebecca Grattan should not have been joined with the administrators in the suit. She is the heir at law of her deceased husband and child. This ground of demurrer was well taken, and the Court erred in not sustaining it. The action is to recover a debt alleged to be due to the estate, and relates entirely to the personalty, which does not descend to the heir like realty, but vests in the administrator, who has the sole right to maintain actions, to collect debts due the deceased. (Wood's Dig. 400, 411.) And until the estate is finally settled he has the right to maintain all suits for the possession of the real property of the estate. (Meeks v. Hahn, 20 Cal. 620.) The appellants also insist that under the pleadings and the findings of the Court the plaintiffs were not entitled to any judgment whatever against Laurencel and Eldredge; and this necessarily requires an investigation of the merits of the whole case. The first question we propose to examine is the effect of the foreclosure of the mortgage by Foster upon the rights of the parties. The plaintiffs insist that those proceedings were utterly null and void, and did not affect the rights of the parties in any way (except, perhaps, to operate as a satisfaction of the second note), because Smith, the holder of the fourth note, and Cook, the mortgagee and the holder of all the other notes, and Berrian, the grantee of the mortgagor, were not made parties to the action. On the contrary, the defendants claim that the three hundred and ninth section of the Practice Act of 1850, which provided that "in proceedings to enforce a mortgage it shall not be necessary to make other incum Grattan v. Wiggins. brancers parties, but the creditor may maintain his action against the mortgagor alone," etc., governed the action, and therefore it was not necessary to make them parties. In this the defendants are mistaken. The action was commenced December 1st, 1851, after the Practice Act of 1851, which repealed the Act of 1850, had taken effect; and the proceedings were, therefore, governed by the Act of 1851, which contained no provision of a like character. The action to foreclose the mortgage was brought by Foster upon the second note, the first having been paid; and it is an important question what his rights were relative to the holders of the other notes. Where several notes have been given which are secured by one mortgage, and they are assigned to different persons, it has been a question whether each holder of a note is entitled to a pro rata interest in the mortgage, or whether the holder of the note first falling due, or of the note first assigned, has priority over the others and can apply the proceeds of the mortgaged property to the full payment of his note, to the exclusion of the others when the same is insufficient to pay all. In the absence of any special agreement with the mortgagee, it would seem to be but just and equitable that each should be entitled to a pro rata share, upon the principle that equity delights in equality. (Phelans v. Olncy, 6 Cal. 480; Donly v. Hays, 17 S. & R. 400; Henderson v. Herrod, 10 S. & M. 631; McVay v. Bloodgood, 9 Porter, 547.) Yet there are several authorities which hold that the rule of priority prevails. (State Bank v. Towdy, 8 Blackford, 447; Collum v. Irwin, 4 Ala. 452; Bank of U. 8. v. Covert, 13 Ohio, 240; Hunt v. Stiles, 10 N. H. 466.) But it is clear that the mortgagee has the right by agreement to fix the rights of the holders of the several notes to the mortgage security, and such an agreement may be implied from the circumstances of the transfer. (Sherwood v. Dunbar, 6 Cal. 53; Keyes v. Wood, 21 Vermont, 339; Langdon v. Keith, 9 Id. 299; Wright v. Parker, 2 Aikins, 212; Pattison v. Hull, 9 Cowen, 752; McVay v. Bloodgood, 9 Porter, 547; Banks v. Tarleton, 23 Miss. 173.) Sec. 248 of the Practice Act provides that a mortgage given to secure installments due at different times may be foreclosed Grattan v. Wiggins. when any one or more installments are due, and if the property cannot be sold in portions without injury to the parties, the whole may be sold. A foreclosure and sale in such case would clearly operate as an extinguishment of the mortgage, whether the proceeds were sufficient to pay the whole debt or not. (Kimmel v. Willard, 1 Doug. Mich. 217; McGrew v. Lanahan, 1 Penn. 44; Salmon v. Clagett, 3 Bland. Ch. 180; Brinkerhoff v. Thallheiner, 2 J. C. 485; Campbell v. Macomb, 4 Id. 534; Banks v. Chester, 1 Jones, 290.) In this case, the Court found "that at the time of the transfer and delivery of the note to Foster, Cook also assigned and delivered the mortgage to Foster to secure him in the payment of the $5,000 called for by the note." This shows a special agreement between Cook, who then held all the notes, and Foster, by which the latter was to hold the mortgage as security for the payment of the note then assigned to him, thereby giving him a right to full payment from the proceeds of the mortgage. This agreement, as we have shown, the parties had a right to make, and the Courts will enforce it. It follows, therefore, that Foster had the right to foreclose the mortgage and sell the whole of the mortgaged property, or so much thereof as might be necessary for the payment of that part of the mortgage debt held by him; that the holders of the other notes had no right to require him to pay them a pro rata portion of the proceeds of the sale, and if it required a sale of the whole of the mortgaged property to pay his debt, it would leave nothing upon which they could claim any lien or incumbrance. The interest of the holders of the other notes was not that of subsequent incumbrancers to Foster, but simply as parties having an interest in the same incumbrance upon such portion of the mortgaged premises as might remain after the satisfaction of that portion of the debt held by Foster. They could not properly be designated as the holders of a junior incumbrance, because they claim under the same mortgage, and not by a junior one. They had an interest in a portion of the mortgaged debt; that is, that portion of it held by them, but not in that portion held by Foster. They would have been proper parties as co-plaintiffs with Foster, in the suit to fore Grattan v. Wiggins. close, so that they could receive any overplus of the proceeds of the sale of the mortgaged property which might remain after the payment of Foster's debt, but they were not necessary parties in the sense that no decree of foreclosure could be made without bringing them in. They could not insist upon having their claim to this surplus litigated until it was ascertained that there would be a surplus. (Union Ins. Co. v. Van Rensselaer, 4 Paige, 83.) It is true that their interest in the mortgaged debt and lien could not be affected by a decree rendered in a suit to which they were not made parties; still, if, as we have shown, that interest only extended to a right to have the surplus proceeds of the sale applied to their debt, it would have made very little difference in this case whether they were made parties or not, for the surplus remaining amounted to only about five hundred dollars. That surplus Smith, as the assignee of the fourth note and of the mortgage, had a right to have applied on his note, and upon a proper application to the Court would have ordered that surplus to be paid to him. But neither Cook nor the present plaintiffs have any claim upon this surplus, and have no just right to complain that they were not made parties to the foreclosure suit, for the result has shown that they would have received no benefit from it, as the proceeds of the sale were entirely insufficient to reach the notes held by Cook. Whatever claim or interest Smith may have had in the mortgage or the mortgage debt he transferred to the defendants Laurencel and Eldredge, which would at least transfer the right to this surplus. But even if they ought properly to have been treated as the holders of incumbrances subsequent to that of Foster, we do not see that the plaintiffs would be in any better position. The law seems to be pretty well settled, that junior incumbrancers are not necessary, though proper parties to an action to foreclose a mortgage. (Kirkham v. Dupont, 14 Cal. 559; Story's Eq. Pl. Sec. 193, note; Calvert Parties in Equity, 132-137.) They have a right to redeem the prior mortgage, and if they are not made parties to the action to foreclose the mortgage, that right of redemption still remains unaffected by the decree and sale under it. By the transfer of the fourth note and the mortgage to Smith, he stood Grattan v. Wiggins. next to Foster, as the holder of that part of the incumbrance to be first paid after Foster, and his rights, whatever they were, were afterwards transferred to Laurencel and Eldredge. The present plaintiffs have no right to object to the proceedings in the foreclosure suit, that Smith was not made a party, for they are not in any way injured by it. (Whiting v. Bank of the United States, 13 Peters, 14.) Then as to Cook and his legal representatives, he had a right, as such subsequent incumbrancer, to commence his action to redeem the prior mortgage of Foster, and this right of action accrued at the date of the assignment of the note and mortgage by him to Foster, May 15th, 1851. This right of redemption accrued at that date, and as he was not made a party to the foreclosure suit it continued unaffected by those proceedings. But this right of action was liable to be barred by the lapse of time, if not prosecuted within the time fixed by the Statute of Limitations. This action was not commenced until the twenty-second day of January, 1859, nearly seven years after the date of the deed to Fossatt, and the possession of the mortgaged premises by him under it. Fossatt and those holding under him had thus held the undisturbed and undisputed possession of the premises, claiming title thereto exclusive of all others, founded upon a written instrument purporting to be a conveyance of the premises in question, from the twenty-sixth day of January, 1852, to the commencement of this action. Treating this right of redemption, asserted by the plaintiffs in their complaint, as founded upon an instrument of writing, or as included among actions for relief not specially provided for, and therefore as included under Secs. 17-19 of the statute, in either case the action, so far as it is founded upon this right of redemption, is barred, not having been commenced within four years. In England it was held that Courts of Equity were not within the statute, because its words applied only to particular legal forms of action; but they still applied the statute to suits in equity, in obedience to the law. Thus, as an action for the recovery of real estate was barred by twenty years' adverse possession, it was held that where the mortgagee had for twenty years held possession of The mortgaged premises, without acknowledging the existence of VOL. XXIII.-3 |