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Lessee of Fosdick v. Risk.
In Bank. In New York, the sale of the mortgage premises under a
m. judgment upon the accompanying note, if it produce a sum 1816.
equal to the mortgage debt, or if it do not produce that sum,
In these States, it will be perceived, nothing but the equity of redemption, or the estate in the mortgagor, subject to the mortgage, is taken in execution; and nothing but that interest is sold. Hence the mortgage is left as a security untouched, as to any portion of the debt not made certainly, and probably to the whole extent, so far as subrogatory rights are concerned. So far as the debt is extinguished by the sale, it is very clear the mortgagee himself has no claim upon the mortgage premises, under or by virtue of the mortgage. And it would seem to follow, if nothing be sold but the equity of redemption, the purchaser would take subject to the mortgage, and the mortgagor would be entitled to subrogation and a transfer of the
Lessee of Fosdick v. Risk.
mortgage, because another interest in the mortgage premises Is Bank, has been sold, and subjected to the payment of the debt other De
1816. than the mortgage interest, which still remains. But should the mortgagee assign the mortgage debt to the purchaser of the equity of redemption, it operates as an extinguisher, and he cannot pursue the mortgage ; 2 Johns. Chan. Rep. 125. Yet it does not follow the mortgagor has no remedy for his lost estate, if the debt were paid from the sale of the equity of redemption, in whole or in part.
Such, unquestionably, may be conceded to be the result from pursuing the note, and not the mortgage, and in subjecting, not the mortgage property, but the special interest of the mortgagor therein, under or beneath the mortgage. But would that be the case in Ohio now, or was it when this land was sold ? Our laws then did, and now do require the lands, and not the equity of redemption or estate of the judgment debtor, to be taken in execution, appraised and sold, for not less than two-thirds of the appraised value. The thing is appraised; the thing is sold - not the interest of the judgment debtor; 8 Ohio Rep. 24; 11 Ohio Rep. 342. It is true, the sale when carried into grant, gives nothing but the title of the debtor. It passes the lands under his legal title, whatever it may be. It is not the mere equity of redemption that is sold as a limited estate in the lands, but the land itself. The purchaser takes, under his deed, the entire land, and not the mere equity of redemption therein. All the interest of the judgment debtor in the land passes to him; and if the entire mortgage debt be extinguished by that operation, the purchaser takes the land, discharged of the mortgage, inasmuch as the sale is of the land, and not of the residuum.
There is an important distinction in the Ohio system from all others, and it must necessarily require a rule of property to correspond with the change, and be commensurate with the new state of case it presents. We sell, in Ohio, the land — the thing itself; and if the sale extinguish the mortgage debt, the purchaser takes the title, discharged of the mortgage. The
Lessee of Fosdick v. Risk.
In Bank. mortgagee cannot set it up, because he has no debt to sustain C. Term, it. The mortgagor cannot, because his entire title has passed - to the purchaser.
If, in the present case, the mortgage debt had been paid by the proceeds of the sale, the purchaser would have taken the title; in fact, he would have taken the land, discharged of the mortgage, not only as to the mortgagee, but also as to the mortgagor. And, if such would have been the case in that event, it would seem to follow as a necessary consequence at least, where the mortgage property should be sold under the judgment upon the accompanying note, the mortgage should be extinguished to the extent of the sale, or pro tanto. So far as the judgment debtor was concerned, the land was gone from him. So far as the judgment creditor was concerned, the liens he had upon the land under the note and judgment, were gone from him. The purchaser is subrogated to his position for his protection against puisne rights, even those of the creditor himself; 3 Ohio Rep..529. He holds, it is true, as purchaser, but it is with the benefit of the judgment lien. He takes the interest of the debtor in the land at the time the judgment lien attached, and is invested with the rights of the creditor at that time; 3 Ohio Rep. 530. To that extent, and (or these purposes, the purchaser takes title against both; 2 Ohio Rep. 224; 10 Ohio Rep. 436. The judgment, by law, binds the land so soon as it begins to operate; and when the land passes into grant under the judgment, for some purposes the title is thrown back to the time of the judgment, and for others to the time of sale. The note is credited with the proceeds of the sale, and to that extent, certainly, the mortgagee is precluded. So that, whatever may be the result as to the residue of the debt under the mortgage, to the extent of the credit under the judgment and sale at law, the mortgage is discharged. . We now come to consider whether the sale of the mortgage premises, under the proceeding upon the accompanying note, did not in fact extinguish the mortgage, even though the entire debt was not thereby satisfied and discharged. When these
Lessee of Fosdick o. Risk.
proceedings were had, the mortgagee had four distinct' reme- in Bank. dies — three concurrent and one alternative, but all subordinate
subordinate 1846. to, and available only for the collection of his debt. He had – an action upon his note, an action of ejectment, the scire facias remedy, and a bill of foreclosure. The first two, with the last, might be used concurrently and at the same time, or the third pursued alone; 1. Ohio Rep. 158. The scire facias and bill could not be used at the same time, because they both operated to cut off the equity of redemption, and were in effect one and the same: The one, summary and direct, but confined in its action; the other, more expansive, and of greater remedial power, but equally as certain in its ultimate aim. The action of ejectment operated upon the possession, rents and profits, but left the right of redemption and title at large. The action upon the note operated upon other property, as well as that incumbered with the mortgage. If, under the proceedings upon the note, it was discharged or satisfied, the mortgage expired and ceased to operate. If the mortgage property be pursued, the mortgagee thus makes his election to subject it that way to the satisfaction of his debt, and, upon all just principles, should be estopped from asserting a claim against this his election. It virtually annihilates the relation of mortgagor and mortgagee, by tearing away, from both, the subject matter upon which the relation subsisted. 9 Conn. Rep. 152..
It will be recollected that the mortgagee, in pursuing the mortgage premises under bis action upon the note, does not merely subject the equity of redemption of the mortgagor to the satisfaction of his debt, but the lands and entire right of the mortgagor therein. The land is taken in execution, appraised, advertised, sold and conveyed, at his instance and by his order. It was the very thing upon which his mortgage had been fastened, and that he has taken, sold and conveyed, and not the interest of the judgment debtor subject to the mortgage. This, then, (to reverse the language of the Court in 10 Johns. Rep. 493, or *482,) is a case in which the creditor's pursuit of his remedy on the mortgage, would work an injury to the purcha- .
Lessee of Fosdick v. Risk.
IN Bank. sers under the previous execution. It is not a case in which Dec. Term, - 1846.
the creditor would lose his security, inasmuch as, under the sale upon his execution on the note, he sells the very interest he would have sold under the mortgage, either by scire facias or by bill, so far as the judgment debtor or mortgagor may be concerned. If he be permitted to assert his mortgage, he defeats the sale made under his directions. Far otherwise would be the rule, had he sold the residuum remaining in the mortgagor after the execution of the mortgage. In that event the mortgage interest would have been untouched, except the debt would have been diminished pro tanto, and, against the purchaser, the mortgagor would have had a subrogatory right. To this the mortgagee should not be permitted to except, inasmuch as he had selected his remedy, and accomplished by it the very result he would have accomplished, had he operated directly upon his mortgage. Upon the scire facias remedy, the Court thus reasoned, in 1 Ohio Rep. 158, and I am unable, if applicable, to see how its force can be broken.
If the judgment creditor's rights cannot be disturbed by the voluntary act of the judgment debtor, can they be disturbed by his voluntary act in surrendering the mortgage land to the mortgagee, after judgment against him and covenant broken? We say not; because he has no power over the subject matter, so far as the rights of the judgment creditor are concerned ; nor has the mortgagee, except by foreclosure in chancery. If he take possession by ejectment, it is not absolute, but qualified; it is to apply the profits to extinguish the debt. Severally nor jointly can they, without the aid of the Courts, defeat the judgment creditor's lien and right to pursue the judgment debtor's property, held by legal title at the time the judgment lien begins. When the property is pursued and sold on execution, the purchaser holds the title against the judgment debtor from the day of sale; and it is subject to execution and levy as his, after the day of sale, if carried into grant; 10 Ohio Rep. 235; 14 Ohio Rep. 294. He holds as the judgment debtor held, at the time the judgment lien attached, or with the benefit of that