Equity Pleading and Practice, Parties, Appeal, Decree. Subrogation. Husband and Wife. Dower. Mortgage, Of real estate.
Upon a report by a single justice of the Supreme Judicial Court to the full court of a suit in equity by a woman against a bank and an individual, it appeared that the plaintiff's husband had given to the bank real estate mortgages in which she had joined for release of dower, homestead and rights given her by statute and which were security for the payment of notes signed by both the plaintiff and her husband, and that he also had given to the individual defendant a junior mortgage of the same real estate, in which she had not joined and which the mortgagee had foreclosed by sale under its terms, outbidding the plaintiff and buying at the sale, all the transactions of the individual defendant being actuated by a desire to get the property for himself. A rescript was issued directing that a decree for redemption was "to be entered as to the mortgages held by the bank, the terms and conditions of which are to be settled by a single justice but as to the . . . [individual defendant] the bill is to be dismissed without costs." Thereafter, the bank refusing to assign its mortgages to the plaintiff upon payment of the amounts due thereon or to consent to a decree to that effect, the plaintiff was permitted to amend her bill by setting out that fact and also that she had signed the notes given to the bank by her husband without consideration and in no other capacity than that of surety and that she would be unable to redeem the bank's mortgages unless she could have an assignment of the mortgages to use as security. The individual defendant demurred and answered and, after a hearing, a final decree was entered, without a report of findings or evidence, directing redemption from the bank's notes and mortgages and ordering that thereafter the plaintiff should hold title to them "as if she were an assignee in due course with all the rights of enforcement and transfer and all other rights that the original holder, the defendant bank, has." The individual defendant alone appealed. Held, that
(1) It seems that, if the bank had appealed, it would have been necessary to consider the plaintiff's right to subrogation, and this court would have assumed that the single justice had found as a basis for the final decree that the plaintiff had signed the notes for the accommodation of and as surety for the principal debtor, her husband;
(2) The individual defendant was not entitled to speak for the bank or to interpose objections which only the bank could raise;
(3) The decree created no new incumbrances and worked no injustice to the legal or equitable rights of the individual defendant;
(4) The decree should be affirmed.
De COURCY, J.
This case has been before the court, and the facts set forth in 235 Mass. 476, need not be repeated at length. The plaintiff's husband executed three mortgages of his real estate in Brockton to the defendant bank, the plaintiff joining therein in release of dower. Subsequently the plaintiff and her husband became estranged, and on July 11, 1917, he gave a mortgage of the same premises to the defendant Ellis, in which she did not join. Ellis entered and took possession on December 22, 1917. His purpose, as found by the master, "was not to obtain the amount due him under his mortgage but to gain possession of the property as a step toward ultimately becoming its absolute owner." In January, 1918, he foreclosed his mortgage and bought in the property, subject to the bank mortgages. Later he urged the bank to foreclose its mortgages, and foreclosure proceedings had been begun, when this bill in equity was filed. By the rescript a decree for redemption was ordered as to the mortgages held by the bank, and a dismissal of the bill as to the defendant Ellis. Later an amendment to the bill was allowed, alleging that the bank refused to assign the mortgages, and asking that Mrs. Ryder be subrogated to the rights of the bank in the mortgage securities on payment of the amount due thereon. The single justice who heard the case on the amended pleadings entered a final decree, dismissing the bill as to the defendant Ellis, and ordering the defendant bank, on tender of the amount of its debt and expenses "to deliver to said plaintiff the said mortgages and the notes thereby secured." It was further decreed "that thereafter the said plaintiff shall hold title to said mortgages and said notes as if she were an assignee in due course with all the rights of enforcement and transfer and all other rights that the original holder, the defendant bank, has."
The defendant bank apparently has no objection to this decree, and did not appeal from it. The defendant Ellis has appealed notwithstanding the fact that the bill was dismissed as to him. He has argued before us that Mrs. Ryder cannot be subrogated to the rights of the bank because her name appears on some of the notes as joint maker. If the bank had appealed from the decree, it would be necessary to consider the plaintiff's right to subrogation; in which event we should assume that the single justice found she signed the notes for the accommodation of, and as surety for, the principal debtor. See New Bedford Institution for Savings v. Hathaway, 134 Mass. 69; Fitcher v. Griffiths, 216 Mass. 174; Jennings v. Wall, 217 Mass. 278; Hamilton v. Dobbs, 19 C.E. Green, 227; Arnold v. Green, 116 N.Y. 566; Bayles v. Husted, 40 Hun, 376. But the defendant Ellis is not entitled to speak for the bank, or to interpose objections which only the bank could raise. He took his mortgage, and later his foreclosure deed, subject to the bank mortgages. He could have redeemed the property from those incumbrances by paying the debt secured thereby; but he could not prevent the bank from assigning the mortgages to Mrs. Ryder, if it was willing to do so. As the bank in fact refused to do this on tender of payment by the plaintiff, the only way in which such payment can be secured and her dower rights be protected is by subrogation of the mortgage securities. The decree which was entered does not injure any rights of Ellis. The mortgages are the same ones subject to which he acquired and holds his title. His right to pay them off is unimpaired. The decree does not create any new incumbrances or work any injustice to his legal or equitable rights. Everett v. Gately, 183 Mass. 503. Cases like Rand v. Cutler, 155 Mass. 451, where the effect of subrogation would be to impair the intervening rights of a party, are not in point.
Decree affirmed with costs.