Opinion
03-10-1896
SECURITY TRUST & SAFE-DEPOSIT CO. v. BURLEIGH et al.
M. P. Grey, for complainant. E. A. Armstrong, for defendants.
Bill by the Security Trust & Safe-Deposit Company against John J. Burleigh and wife, and others, to foreclose mortgages. Heardon bill, answer, and evidence. Decree for complainant.
M. P. Grey, for complainant.
E. A. Armstrong, for defendants.
REED, V. C. D. Leonard Moore was a builder, conducting his business in the city of Camden. He failed in business in March, 1894. In conducting his business, he seems to have had the habit of putting the title of property which he was improving in the name of a bookkeeper employed by him, whose name was Hinman. This bookkeeper would dispose of this property as Mr. Moore desired. In doing so, he was accustomed to make mortgages to Mr. Armstrong, the counsel for Mr. Moore, and these mortgages would be assigned by Mr. Armstrong, from time to time, to such persons as Mr. Moore would indicate. No money passed between Mr. Hinman and Mr. Armstrong, and the arrangement was simply one for the convenience of Mr. Moore. Three bonds, with their accompanying mortgages, for $1,000 each, were made by Mr. Hinman to Mr. Armstrong on March 7, 1894. On March 17, 1894, these three bonds and mortgages were, at the instance of Mr. Moore, assigned by Mr. Armstrong to the Security Trust & Safe-Deposit Company, the complainant. At that date the complainant held two notes made by D. Leonard Moore to it,—one dated March 19, 1894, for the payment of $1,800. It was to secure the payment of these notes that the three mortgages were assigned. After the assignment of these mortgages to the complainant, Mr. Hinman, as owner of the equity of redemption of the three lots mortgaged, conveyed them to John J. Burleigh, one of the defendants, on March 31, 1894. Afterwards these mortgages were sold by the Security Trust & Safe-Deposit Company, at public sale, at the sheriff's office in Camden, on February 23, 1895. At that sale they were purchased by the complainant, who is now, in this suit, foreclosing the equity of redemption in the property mortgaged. Mr. Burleigh has filed an answer to this suit. His answer is that the amount due upon the mortgages is not $3,000, but is a less sum, viz. $2,700. His testimony upon the stand does not support this defense. He does not attempt to show that the debt owed and still owing by Mr. Moore to the complainant, for the security of which these mortgages were assigned, is not $3,000. He relies, however, upon a conversation which he had with Mr. Longstreth, the treasurer of the Security Trust & Safe-Deposit Company. He says that, about the time when the deed of the mortgaged property was made to him by Mr. Hinman, he had a conversation with Mr. Longstreth, and that he mentioned in that conversation the amount due upon these mortgages, and that the figure named was $2,700, and that, at the time, Mr. Longstreth did not contradict his statement,—indeed, was silent. It is thus apparent that the ground of his defense is the existence of an estoppel. His insistence is that the company is precluded from asserting that more than $2,700 is due to it, because of the acquiesence of Mr. Longstreth in the mistake of Mr. Burleigh. It is, however, not essential to consider what force the silence of Mr. Longstreth would possess to bind the complainant, even if such admission had been made preceding and inducing the conveyance to Mr. Burleigh. It is not essential to consider this question, for it does not appear that Mr. Burleigh took his deed upon the strength of Mr. Longstreth's acquiescence in his statement. It does not appear whether the conversation detailed by Mr. Burleigh preceded, accompanied, or followed the execution of the deed to him.
What, then, are the amounts for which these mortgages stand as security? It is testified that two of these $1,000 mortgages were held specifically for the $1,800 note, and that one mortgage of $1,000 was held specifically to secure the $3,100 note. If this was all, then the amount due to the complainant would seem to be $2,800 and interest, for which these mortgages were security. But the pledge contained a clause providing that the security pledged "shall be applicable to secure the payment of all past or future obligations, and all of our securities in their hands shall stand as one general, continuing, collateral security for the whole of our obligations, so that the deficiency on any one shall be good for collaterals for the rest." Now, the evidence is that Mr. Moore, the pledgor, owed thousands of dollars in excess of the value of all the collaterals held; so, therefore, the complainant seems entitled to recover, in this foreclosure proceeding, the full face of the mortgages and interest. In this foreclosure proceeding, however, I think it must stand upon the assignment made to it by Mr. Armstrong, and not upon the sale made at the sheriff's office. In the first place, its right to purchase at its own sale, under the proviso contained in the pledge, depended upon the fact that it was a public sale. This sale, in my judgment, was not a public sale. As I gather from the testimony, but one notice was set up, and this was not reasonable notification to the public. But no one but the pledgor is concerned in the question whether the complainant is foreclosing as owner of the mortgages under the sale at the sheriff's office, or as pledgee under the assignment made by Judge Armstrong. The sale by foreclosure is an appropriate method of applying the value of a matured mortgage to the payment of a debt for the security of which it has been pledged. Regarding the suit as so brought, I will advise a decree for the complainant for the amount of the mortgages, with interest.