EMERY, V. C.

Action by the Howards Savingn Institution against the Essex Building & Loan Association and others to foreclose a mortgage. On petition to deliver mortgage on redemption after decree. Granted.

Mr. Trimble, for the motion. Mr. MacDonald, opposed.

EMERY, V. C.By the final decree in a foreclosure suit the indebtedness on the bond is not merged. Deshler v. Holmes, 44 N. J. Eq. 585, 18 Atl. 75 (Stevens, Adv. M.), affirmed on appeal for reasons stated. While the amount of the indebtedness on the mortgage is ascertained by the decree, there is no decree for payment, otherwise than by sale of the mortgaged premises, and no action could be maintained on the decree to recover the amount due. In this respect the decree in a foreclosure suit differs in toto from an action on the bond at law, where the bond is merged in the judgment,—a higher security for the original debt, and itself the basis of an action. Nor is the estate itself of either mortgagor or mortgagee under the mortgage changed ipso facto by virtue of the final decree, which in its terms only affects this estate by directing a sale to pay the debt, and, be far as the estate in the landa is concerned, provides that the defendant's rights shall be foreclosed when sold under the decree. The dictum in Lewis v. Conover, 21 N. J. Eq. 230, that the mortgage is merged in the decree, is not sustained by any reasoning or authority cited, and, in view of the subsequent decision in Deshler v. Holmes, must be considered as not declaring the true rule. Up to the time of sale the parties to the suit, who are made such by reason of their right to redeem, are entitled to redeem, and this right has been conceded and acted on in this case. The intimation to that effect which I give in Wimpfheimer v. Insurance Co., 56 N. J. Eq. 585, 30 Atl. 916, seems to me, on further consideration, to be a correct statement of the law. If the obligor pays the bond and mortgage, he is entitled to the delivery up and cancellation of both bond and mortgage. This rule was laid down in cases where the question was as to the rights of the obligor after a sale under the decree. Deshler v. Holmes, 44 N. J. Eq. 585, 18 Atl. 75, and In re Coster, 2 Johns. Ch. 503. Upon the principle of these cases, it must he beld that where the owner of the mortgaged lands, not being the obligor, pays the mortgage after decree, he is entitled to a delivery of the mortgage canceled, or for the purpose of cancellation. Whether he has the right to a delivery of the mortgage uncanceled, or to a delivery of the bond, also, will depend upon his right to keep the mortgage alive for the purposes of subrogation, protection te title, or other equities. Where rights of subrogation exist on the redemption, the bond and mortgage must be delivered uncanceled to the person redeeming. Hamilton v. Dobbs, 19 N. J. Eq. 227.

The present application extends only to a delivery of the mortgage, and for the purpose of cancellation. Proceeding by petition in the foreclosure suit is a proper method for procuring the delivery (In re Coster, supra), and the petition is granted so far as relates to a delivery of the mortgage, which is the extent of the notice. And inasmuch as there is nc contradiction of the petitioner's affidavits that the payment to the sheriff was made at the request of complainant's solicitor, on the promise to execute the necessary papers, and that demand for delivery of the mortgage, as well as demand for a satisfaction piece, was made and refused, costs must be granted, under the rule laid down in Pearce v. Morris, L. R. 8 Eq. 217.