Hoyt agt. Martense, 8 How. Pr. 196

Barculo, Justice. The plaintiff’s counsel are entirely correct in assuming that the transfer of the mortgage to the defendant, by Charles Hoyt, was in the nature of a. mortgage; and that the defendant had no right to use it for any other purpose than the satisfaction of the debt due to him. He was bound, therefore, to account for the proceeds, and pay over any surplus that might have arisen on a foreclosure of the mortgage. And if Charles Hoyt, before foreclosure, had paid him the amount of his debt, the mortgage would have reverted to Charles again.

It was a mortgage of a mortgage, in which Charles retained an equity of redemption, not in the land, but in the moneys secured upon it. I do not, however, agree with the learned counsel who argued the cause with so much ability on the part of the plaintiff, in his estimate of the rights of the parties after the foreclosure. On the contrary, I see no reason why the rights of Charles Hoyt should not, as to the land, be deemed forever extinguished. * Certainly, upon principle, the foreclosure and sale being expressly authorized by the assignment, terminated his rights in the land.

Nor would these rights be saved, by the fact that the defendant became the purchaser. For it is settled that the mortgagee may become a purchaser, and take a valid, absolute title. It is conceded even by the authorities relied on by the plaintiff, that if the sale had been made to a stranger, the title would have been perfect in him. It is also admitted by the same authority that a mortgagee may purchase; and yet the inconsistent proposition is maintained, that the latter takes as trustee for his mortgagor. The case relied on for this doctrine (Slee vs.

Manhattan Co., 1 Paige, 48) may have been correctly decided, upon the ground that Slee was thrown off his guard by the representations of the agent of the company, and thus was induced to suffer the property to be sold for less than one-fourth its value; but the reasons given by the chancellor for the decision are not entirely satisfactory to my mind. At all events that is a case not to be extended, or applied to dissimilar circumstances. In the present case there is an essential difference from that of Slee vs. Manhattan Co. Slee was not a party to the foreclosure, it being by statute.

In this case the mortgagor was a party to the suit, and although he was a coplaintiff the decree is not the less binding than if he had been a defendant. And no one will doubt that his rights could have been extinguished by making him a party defendant. Judgment must, therefore, be entered for the defendant with costs.