A voluntary surrender of premises by the mortgagor, and all entry by the mortgagee, after a decree of foreclosure, is not an entry "under process of law."
Where two mortgages upon the same estate were executed and recorded simultaneously, each is a first and second mortgage of a moiety.
In case of two simultaneous mortgages, if, as between the mortgagees, an equitable priority exists in favor of one, and the other assign for value, and the assignee has no notice, actual or constructive, of such priority, he will take his mortgage, discharged of the equity.
BINGHAM, J.
I. It is quite plain that it was the purpose of Kennard to foreclose his mortgage under the first mode named in s. 1, c. 1530, of the Laws of 1854, which provides for an entry into the mortgaged premises "under process of law," and holding the continued actual possession thereof for one year. Kennard did not enter under "process of law," but upon the voluntary surrender of the mortgagee. His possession was by consent, without process. And to have made a valid foreclosure, he should have published notice, as is required by the second mode named in said section. Hall v. Hall, 46 N.H. 243; Bellows v. Stone, 14 N.H. 175.
II. The plaintiff was the actual owner of the Mace note and mortgage, uncancelled, and in every respect as legal and binding, as against James and Nancy George, as when they were first made. The objection, that James George did not join in the execution of either mortgage, affected quite as seriously the validity of the Kennard as the Mace mortgage. Eaton v. George, 40 N.H. 258; S.C., 42 N.H. 375. The mortgages were executed and recorded simultaneous. This gave them equal rights — Co. Lit. 21; 1 Hilliard on Mortgages 322 — rights not unlike those acquired by several creditors in the case of a simultaneous attachment of real estate. Sigourney v. Eaton, 14 Pick. 414; Shove v. Dow, 13 Mass. 528; Thurston v. Huntington, 17 N.H. 438.
Admitting that the verbal agreement gave a priority to the Kennard mortgage, as between the mortgagees, what is the condition of the title under the mortgages as held by these parties? The Kennard mortgage was not foreclosed, and the defendants may be considered as if they were its assignees for value, May 20, 1867, the day on which Kennard conveyed. We think that, upon the case, the plaintiff, February 16, 1861, became the assignee of the Mace note and mortgage for a valuable consideration, without notice of the existence of any equities between the original mortgagees. Thus, both mortgages are now held by the parties as assignees; but the Mace mortgage was assigned first, and while Kennard was the owner of the defendant's mortgage. The right of priority, as between the original mortgages, was an equitable, not a legal, right. A purchaser of property for a valuable consideration, without notice, actual or constructive, of an equitable right, will hold the property discharged of the right. Perry on Trusts, s. 218, and the authorities cited in the note; Conn. v. Bradish, 14 Mass. 296; Somes v. Brewer, 2 Pick. 184; Kingsbury v. Smith, 13 N.H. 118; Dana v. Newhall, 13 Mass. 498; Clark v. Hobbs, 11 N.H. 122; 4 Kent Com. 150, 154; Story Eq. Jur., s. 1020. As between these parties, the Kennard has legally no priority over the Mace mortgage, and, legally, each mortgage is a first and second mortgage of a moiety.
Case discharged. Decree to be entered upon the report at the trial term, in accordance with these views.
FOSTER and STANLEY, JJ., did not sit.