Bailey v. Gould; Gould r. Bailey.

right to collect the debt by a foreclosure of the mort[*482] gage, at law, or in equity, is in express *terms reserved. Nothing is more clear than the intention of the parties to the release, that Bailey should look to the mortgaged premises alone for payment. But it is said Gould, as subsequent mortgagee, (and as to the cross bill he must be considered in that light, or rather in the light of a purchaser under a foreclosure of a second mortgage with notice of the first,) should be regarded as standing in the place of a surety. That on redeeming the prior mortgage, he would by the rights of subrogation, be entitled to the note as well as the first mortgage; and that the release would cut off his personal remedy against the mortgagor on the note.

Any thing done by a first mortgagee to the prejudice of a second mortgagee, with a knowledge of the second mortgage, should, to the extent of such injury, postpone the first to the second mortgage.

If Gould were a surety so far as regarded his mortgage, in the strict sense of the word, he would not be discharged by the release; because the remedy against him, that is the land, is expressly reserved. It was decided, in Clagett v. Salmon, 5 Gill & John. R. 314, a creditor might extend the time for his debtor to pay in, without releasing the sureties, if he, by the same agreement, in express terms, reserves his remedy against them. The case was appealed, and the appellate Court, in affirming the decree of the Chancellor, say, "But if the creditor reserves his remedy against the sureties, in the contract he makes with the principal debtor, the debtor thereby tacitly consents to forego, or waive, the benefit of such contract, in case the creditor should afterwards find it necessary to resort to the sureties, for the full and complete extinguishment of his debt."

But there is another view of the case. Gould had foreclosed his mortgage at law, before the release was given. [*483] *He was not at that time a subsequent mortgagee. He had previously changed his character of mortgagee for that of purchaser at the mortgage sale. Now, if, when he took

Bailey v. Gould; Gould v. Bailey.

his mortgage, he had notice of the Whitney mortgage, although his mortgage was first recorded, that can avail him nothing, and he stands in the place of a purchaser of the equity of redemption under the second mortgage, subject to the first mortgage; and the premises in his hands, as such purchaser with notice, are the primary fund for the payment of the first mortgage. Coxe v. Wheeler, 7 Paige R. 248. The release, therefore, could work no injury to him. The cross bill must be dismissed with costs.

As to the original bill. It is insisted Miller is an interested witness, notwithstanding the release, as the mortgage to Mrs. Whitney contains a covenant of warranty, from which he is not released. The question is not one of title in the mortgagor, for both parties admit his title, and claim under him, but of priority under the registry laws, with which the covenant of warranty has nothing to do.

The bill was clearly demurrable, in not stating that anything was due on the note executed with the mortgage, or whether any proceedings had been had at law for the recovery of the debt, as required by the statute. Nor is this all. Aside from the question of notice or no notice, complainant has not made out such a case as to entitle him to a decree. The promissory note is not in evidence, and, for aught that appears from the testimony, it may have been paid. The law does not raise a presumption of non-payment, but of payment when due, unless the contrary is shown by the production of the note, or other evidence repelling the presumption of law, when the note itself cannot be produced. Nor is there any evidence of an assignment of the note or debt to complainant. The assignment is of "all my right, title, and interest, or claim, *to the [*484] within mortgage." No mention whatever is made of the debt or note. The assignment set forth in the bill is alto gether different from the one proved. The assignment of a mortgage, without the debt which it is given to secure, carries no beneficial interest in the mortgage to the assignee, who would hold it subject to the will and disposal of the creditor. 4 J. C. R. 43.

Peck r. Burgess.

As to the question of notice, the evidence is conflicting, so much so, that I have not been able to satisfy myself on which side the truth lies. If this were the only point in the case, I should be disposed to award an issue and have the witnesses orally examined in the presence of a jury, that more light might, if possible be elicited. As it is, the original bill, as well as the cross bill, must be dismissed with costs, but without prejudice.

1 w 485 60 479

[*485] *JOSEPH H. PECK v. AUSTIN BURGESS et al.

Where a plea had been filed to an original bill, and complainant amended his bill, and defendants answered the amendments, it was held, that the plea was superseded by the amended bill, and a motion to take it from the files for irregularity was denied, the proper motion being to take the answer to the amendments from the files.

MOTION to take a plea of the defendant, Burgess, from the files, because it was not sworn to.

C. W. Lane, in support of the motion.

Buckbee, contra.

THE CHANCELLOR. Defendant pleaded his discharge under the bankrupt law, in bar of complainant's bill. Thereupon complainant amended his bill, and served a copy of his amendments on defendants' solicitor, and defendant put in an answer to the amendments. Complainant now moves to have the plea taken from the files; and rests his motion on the fact the plea is not sworn to. By amending his bill, as he had a right to do, under the 32d rule, he admitted the validity of the plea; and the amended bill standing in the place of a new bill, the plea was no answer to it. The plea was superseded by the new or

Bronson v. Green.

amended bill, to which the defendant had the same time to plead, answer, or demur, that he had to the original bill. Instead of putting in an answer to the amendments only, which would have been the proper course if defendant had filed an answer to the first bill, he should have demurred, or put in a plea or answer to the amended bill, the same as if no plea had been filed by him. The motion should have been to take the answer to the amendments from the files, for irregularity, and not the plea.

Motion denied.

ARTHUR BRONSON v. COGSWELL K. GREEN. [*486]

Where no answer had been put in to an injunction bill, leave was granted to amend so as to waive an answer under oath, on payment of costs.1

MOTION to amend an injunction bill, so as to waive answer under oath, no answer having been filed.

J. F. Joy, in support of the motion.

S. Barstow, contra.

THE CHANCELLOR. When this motion was first made, it occurred to me complainant should have waived the answer under oath, when he filed his bill, and, not having done so, that he had made his election to proceed in the ordinary course, and could not afterwards avail himself of the right given by the statute. But this does not appear to be the construction given to the statute; for, after answer, complainant may dismiss his bill, and file a new bill, waiving defendant's oath. Burras v. Looker, 4 Paige R. 227. Such being the case, the only effect

1 See Bank of Michigan . Niles, ante, 398.

Payne v. Paddock.

of denying the motion would be to drive complainant to dismiss his bill and file another, at the expense of paying the costs of the present suit. Justice does not require the adoption of so rigid a rule, in the practice of the Court.

Motion granted, on paying $5 costs to defendant for opposing it.

[487] PAYNE AND PAYNE v. PADDOCK AND PADDOCK.

Where complainants had agreed to allow defendants to draw water for running a mill from a certain lake, the outlet of which flowed through complainants' lands, and had suffered them to go on and constract a mill and race at an expense of three thousand dollars, before inforining them they did not intend to abide by their promise, an injunction, which had been granted to restrain the taking of the water of the lake fo: the mill, was dissolved.

MOTION to dissolve injunction on bill and answer. The facts necessary to understand the case are set forth in the opinion of the Court.

M. L. Drake and O. D. Richardson, in support of the motion.

For all the purposes of this motion, the answer must be taken to be true. The complainants stood by, saw the defendants making their mill, race, &c., and encouraged them in so doing, by their promises to release the right to use the water. and to aid them by donations in making the improvements, and by actually helping to raise the mill; and never objected until about the time the works were completed. Then, after having led the defendants on to make these large outlays, and about the time the mill was put into operation, the complain

1 See Truesdail v. Ward, 24 Mich., 117; Meister v. Birney, id., 435.