Charles W. Terrett, Respondent, v. James Crombie et al., Appellants

Charles W. Terrett, Respondent, v. James Crombie et al., Appellants. (Submitted September 30, 1873; decided February 10, 1874.) This action was brought to redeem certain premises conveyed by Eleanor Terrett, plaintiff’s assignor, to defendant, and for an accounting, plaintiff claiming that such deed was an equitable mortgage simply. In June, 1859, Mrs. Terrett was the owner of ten lots within the city of Brooklyn, upon a portion of which defendant Crombie had mortgages. She had contracted to sell the same to Jane Hudson and to make advances to aid the latter in erecting buildings thereon, which she agreed to do. Mrs. Terrett was also owing said defendant a small amount for services as attorney and counsel. She deeded the premises and assigned the contracts with Mrs. Hudson to him, he executing and delivering to her two agreements by which in substance he agreed, in consideration of such deed and assignment, to make the advances called for by the contracts with Mrs. Hudson, and to pay over to Mrs. Terrett, upon receiving from Mrs. Hudson the purchase-price and advances, the balance, after deducting therefrom the amount of his mortgages, advances, accounts and all subsequent claims against her. Mrs. Hudson failed to' perform her contract and abandoned all rights under it, and with the consent of Mrs. Terrett the same was rescinded and a new contract made with one Robbins, by which Crom.bie agreed to convey the lots to said Robbins and to make certain specified advances to complete the buildings. Upon receiving a deed Robbins was to execute and deliver to Crombie a first and second mortgage on each lot. . By an agreement thereafter made between Crombie and Mrs. Terrett, the former was to use the first mortgages in raising money to be applied toward the moneys due him as aforesaid, and to retain enough of the second mortgages, if necessary, to pay the residue, he agreeing to assign and transfer to Mrs. Terrett, after the houses were completed by Robbins, the balance of said mortgages and moneys. In case Robbins should fail to perform, then Crombie was to pay over the residue arising from, a sale of the property, after payment of all his claims, as aforesaid. Robbins assigned his contract to one Atkins. The lots were deeded to the latter in accordance with the contract. Crombie used nine of the first mortgages and one of the second mortgages. The other nine second mortgages not having been paid, he, before the completion of the houses, foreclosed the same and bid in the property upon foreclosure sale. Mrs. Terrett was not a party to the foreclosure. It was found by the referee that when the Robbins’ contract was abandoned the lots could not have sold for enough to satisfy defendants’ claims, and that he requested Mrs. Terrett to take the property and pay his claims upon it, which she declared herself unable to do. Held, that the deed to defendant Crombie was an equitable mortgage, and upon the failure of Mrs. Hudson to perform, he held the title still as security simply for his claims; that the mortgages received by him were held for the protection of the interests of Mrs. Terrett and himself; and upon his purchase at the foreclosure sale, as between them, he simply became reinstated in the same defeasible title he held before the conveyance to Atkins; that the benefit derived from the failure to perform the Robbins contract and from the rise of the lands, belonged to her as the real owner; that the legal rights of the parties were not changed by her refusal to redeem the mortgages, and that plaintiff was entitled to redeem the lots. James CromMe and Henry Woodruff for the appellants. Joshua M. Yam, Oott for the respondent. [MAJORITY — Andrews, J.,] Andrews, J., reads for modification by adding to the amount to be paid by plaintiff, upon redemption, the sum of $225.14, and for affirming as modified. All concur. Judgment accordingly.