Opinion
02-01-1886
JOHNSON'S EX'RS v. DUBEL and others.
F. Woolman, for complainants. A. Flanders, for defendants.
F. Woolman, for complainants.
A. Flanders, for defendants.
BIRD, V. C. S. mortgaged his lands to J., first to secure a bond of $1,000, and afterwards to secure a bond of $600. Afterwards, in 1871, H. recovered a judgment against S. in the justice's court, and had it docketed in the common pleas. Still later V. obtained a judgment in the circuit court. After all these, J. died, leaving a will, of which F. W., one of the complainants, was executor. As such executor he assigned the said bonds and mortgages to K. M. J., the widow of J. In November, 1879, large arrears of interest having accrued, in all over $900, she threatened to foreclose the mortgages, when an arrangement was made between her and S. by which S. conveyed the title to one D., the brother of K. M. J. In July, 1883, K. M. J. died, leaving a will, naming therein, as executors, the said F. W. and the said F. D., who are the complainants in this suit. They filed this bill to foreclose the said mortgages, and thereby to cut off the said judgments, unless the judgment creditors come in and redeein, which they have a right to do. But the judgment creditors, said H. and V., by their answer, insist that the said mortgages were and are both usurious, and also insist that, by virtue of the transaction in which the title was conveyed from S. to D., the said mortgages were merged in the fee. The claim is that S. agreed with K. M. J. to convey to her the equity of redemption in case she would cancel the mortgages, pay and satisfy the said judgments, and pay to S. $15 in cash.
The defense fails on both points. The burden of proof is upon H. and V.; but they by no means make it clear that J. received one farthing for his loan, or that K. M. J. ever agreed to cancel said mortgages, or to satisfy said judgments. After very carefully reading all the pleadings and the proofs, it seems to me that the weight of testimony is against the allegations of the cross-bill on both points.
Besides the positive assertion of witnesses, circumstances would seem to strengthen this conclusion. K. M. J. was wealthy. F. W. was her business agent. The judgments were of long standing; and if she hadagreed to satisfy them, the reasonable presumption is that she would have done so; if not at her own instance, or that of her agent, certainly at the instance of S. himself, or his judgment creditors. It is not at all likely that either the one or the other would have allowed the period to pass from November, 1879, the time of the conveyance to D., and the filing of this bill, in 1885, without insisting upon or demanding payment, if there had been any such agreement or assumption of payment. I cannot discover a single circumstance which to my mind looks as though the parties intended that the conveyance of the fee should swallow up the mortgages. Certainly the transaction upon its face shows that no merger was intended. It is also very certain that it was to the interest of K. M. J. that there should be no merger. There being no merger in fact, since the title was taken in the name of a third person, and it being to the interest of the mortgagee that there should be no merger, the rule in equity is that merger does not take place. In no text-book or case can I find any authority in conflict with this view. The baud v. Hollister, 37 N. J. Eq. 402, and cases in note; Denzler v. O'Keefe, 34 N. J. Eq. 361; Andrus v. Vreeland, 29 N. J. Eq. 394; Happock's Ex'rs v. Ramsey, 28 N. J. Eq. 413; Parker v. Child, 25 N. J. Eq. 41. The general doctrine thus established in these cases prevail in every state in the Union. It is doubtful if any general principle of law is more universally sanctioned by the courts, or has fewer exceptions or qualifications, than this one.
It will be perceived that one of the complainants, F. D., is also one of the defendants,—complainant in the capacity of one of the executors, and defendant as the holder of the legal title to the premises covered by the mortgages named in the bill. This is an inconsistent attitude. But the bill need not be dismissed on account thereof. J. D. need not be a complainant; but it is essential, holding the legal title as he does, that he should be a party defendant. The bill can be amended by striking his name therefrom, and by inserting proper and apt words to make it conform in other respects to the case as made, to conform to which all other pleadings may also be amended.
The complainant will then be entitled to the amount due upon his two mortgages, including all interest in arrear and costs. But since the title was taken in the name of J. D., but really for the benefit of K. M. J., the complainant will be required to account for the rents and profits from the twenty-sixth day of December, 1879, the date of the conveyance to J. D., upon the principles upon which mortgagees in possession account. The balance thus ascertained, with costs, may be paid by the judgment creditors, if they desire to redeem; but if such amount be not paid, a sale will be ordered.