McKinstry v. Curtis

Decided January 2, 1844

New York Court of Chancery · decided 1844-01-02

This was an application to dissolve an injunction restraining the defendant from proceeding to foreclose a mortgage under the statute. The intestate of the complainants took a second mortgage upon the premises, for a debt due from the mortgagor, but without personal liability on the part of the mortgagor for the debt. The complainants foreclosed that mortgage without making the holder of the prior mortgage a party, and bid in the property.

Decided 1844-01-02

The Chancellor

¶1decided, that where the equity of redemption in mortgaged premises is sold under a judgment, or under a junior mortgage, which judgment or mortgage is a lien upon the equity of redemption merely, the legal presumption is that the purchaser only bids to the value of such equity of redemption; and that the land thus purchased is in equity the primary fund to pay the amount due upon the *504prior bond and mortgage. He said it would therefore be inequitable for the holder of the prior bond and mortgage, in this case, to assign the same to the complainants, to enable them to collect the amount thereof out of the property of the mortgagor, by a suit upon the bond, under the circumstances stated in their bill.

¶2Injunction dissolved.(a)

¶3 See Tice v. Annin, (2 John. Ch. Rep. 125;) and Heyer v. Pruyn, (7 Paige's Rep. 465.)