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and if that corporation was to-day seeking to redeem that part of the property which was of greater value than the mortgage debts specifically secured thereon, without also redeeming the Indiana mortgage debts which were inadequately secured, its objection in a court of equity would be potential, and the Toledo, Wabash & Western Railway Company would be required to redeem all, or none, on the principle that it must do equity, as a condition of equitable redemption. It may be urged that this right of the Toledo & Wabash Railway Company to object to separate redemption upon the ground of its surety relation to the Toledo, Wabash & Western Railway Company is one which can only be made by it, and that it has never been a party to any of these foreclosure suits. Compton did not bring that corporation before the court in his Ohio suit, and he has not chosen to make it defendant to his present effort to obtain separate redemption. It was not a necessary party to either suit, in so far as the establishing of his debt and lien were concerned. He might bring his suit against the corporation which had succeeded to the title and ownership of the property, and which had assumed a primary obligation for his debt. But he cannot escape the effect of any defense to a separate redemption which any of the predecessors in the title might make, by omitting to bring such predecessors before the court. When he asks for partial redemption, and the court can see that that relief would be inequitable and unjust to one of the obligors of his debt, in its relation as surety to other parties jointly liable as to him, it will either refuse to proceed with the suit until he brings the absent corporation before the court, or grant him only such relief as is consistent with the equities and rights of all affected by the remedy he asks. But it seems to me, on careful consideration, that the purchaser at foreclosure sale unites in itself the legal title and the equities, rights, and defenses which pertained to each of its predecessors in title, and may interpose any defense to the demand for separate redemption which any one of its predecessors could make if they were called upon to submit to such redemption. If this is not so, then the absent predecessor corporations to be affected by the special relief sought are necessary parties to any proceeding which seeks such relief. If I am right in the proposition that the Toledo, Wabash & Western Railway Company could not redeem the Ohio Division separately, by reason of the surety relation of which I have spoken, then, for the same reason, Compton cannot. His lien arose as the result of the consolidation of 1865. The lien did not attach as a lien on property of the Toledo & Wabash Railway Company, but as a lien on so much of the property of the Toledo, Wabash & Western Railway Company as had been acquired from the Toledo & Wabash Railway Company. The language of the consolidation statute, which imposed a liability on the consolidated company for the debts of the constituent companies, was that: “All debts, liabilities and duties of said companies shall henceforth attach to said new corporation and be enforced against it to the same extent as if
said debts, liabilities and duties had been contracted by it.” Act April 10, 1856, § 5.
This was the language which the supreme court of Ohio, in Compton's Case, construed as attaching an equitable lien upon the property of the Toledo, Wabash & Western Railway Company which it had received from the Toledo & Wabash Railway Company. The decree upon which Compton predicates his suit recites: “That, upon the consummation of such consolidation, said bonds issued as aforesaid by the Toledo & Wabash Railway Company * * * became an equitable lien upon all of the said railroad and real property * * * which were owned by said Toledo & Wabash Railway Company, at the time of said consolidation passed to and vested in the said Toledo, Wabash & Western
Railway Company, and which afterwards passed to and Vested in the defendant the Wabash, St. Louis & Pacific Railway Company.”
The lien did not exist before the consolidation, but arose as a result of the act transferring the property. To say that a lien which originated only as a result of the passage of the title is a lien against the company whose act transferred it to another, would be as inexact as to say that a vendor's lien rests upon the property of the vendor, when in fact it originates as a result of the passage of the title, and must be a lien on the estate of the vendee in the property. The distinction is a nice one, but it is an obvious one, when we look closely into it. It is also an important fact, in its consequences, for if a lien imposed on the property of the Toledo & Wabash Railway Company, while owned by that company, would, as urged by Judge TAFT, be a lien upon the separable equities of redemption owned by that company, a lien imposed after the transfer of the title of the Toledo & Wabash Railway Company to the Toledo, Wabash & Western Railway Company, which took under a single engagement or promise to pay off the debts of the Toledo & Wabash Railway Company, would bring into operation the principle that such single promise required a single redemption. Compton's right of redemption cannot be other or different than that of the corporation upon whose property the lien rested, whether imposed by law, or arising out of contract. It must therefore follow that, if the Toledo, Wabash & Western Railway Company could not redeem part without redeeming all, Compton, with a lien which rests on its estate, can exercise no higher right of redemption. There seems to me to be still another principle applicable, where equitable redemption is sought, which reinforces what has already been said. That principle is that where several mortgage debts have become consolidated, so that the obligor in each is the same, and the mortgagee the same, though secured on distinct estates, there can be no separate redemption, against the will of the mortgagee. The principle that a creditor will not be deprived of a legal advantage by a court of equity, except upon equitable conditions, is of wide application. It was imbedded in the civil law; and a mortgagor was not permitted to redeem or buy back the legal title to realty, or the possession of a pledge, until he did equity, by paying, not only the debt secured by the mortgage or pledge, but any other debt subsequently created. Story, Eq. Jur. §§ 415, 1010, and note; Jarvis v. Rogers, 15 Mass. 389. There is some doubt as to whether a purchaser of the mortgaged land, or a subsequent incumbrancer, was affected by this equity between mortgagor and mortgagee. Judge
Story thinks that under the civil law the doctrine was limited to cases where no subsequent incumbrance was involved, while Chancellor Kent takes the contrary view. Story, Eq. Jur. § 1010, note; 4 Kent, Comm. Lect. 58, p. 136. Almost contemporaneously with the earliest announcement of the doctrine that equity would relieve against the forfeiture of the legal estate, and permit redemption after default, there was announced a condition upon which such equitable redemption would be accorded. That condition was that when there were two distinct mortgages upon distinct parts of the same mortgagor's estate, to secure distinct debts due to same mortgagee, the mortgagor would not be permitted to redeem one of his estates without at the same time redeeming the other, where it appeared that one of the debts was insufficiently secured. This was the simple rule as announced and applied in the early cases. Purefoy v. Purefoy, 1 Vern. 29; Shuttleworth v. Laycock, Id. 245; Margrave v. Le Hooke, 2 Vern. 207; Pope v. Onslow, Id. 286; Willie v. Lugg, 2 Eden, 78; Jones v. Smith, 2 Ves. Jr. 376. In Willie v. Lugg, cited above, the lord chancellor stated the rule, and the reason on which it stands, as follows:
"This bill is brought to redeem the East Dales, and to leave Dixon's farm, now reduced, in point of value, by the mortgagees selling a part for the benefit of the plaintiff, who had the inheritance. The question is whether she can come into this court for such an equity. Every mortgagee, when the mortgage is forfeited, has acquired an absolute legal estate. Upon what terms can this court proceed to a redemption? By giving the mortgagee the value of his money, its fruits, and his costs, and upon those terms only, for it is obvious injustice to help to the restitution of the pledge without a full restitution of what it is first pledged for. If a person makes two different mortgages of two different estates, the equity reserved is distinct in each, and the contracts are separate; yet, if the mortgagor would redeem one, he cannot, because, if you come for equity, you must do equity; and, the general estate being liable to both mortgagees, this court will not be an instrument to take illegally from a mortgagee that by which he will be defrauded of a part of his debt."
The editor of the second edition of Eden's Reports, in a note concerning the modern extension of the rule as stated in Willie v. Lugg, says:
"That a mortgagor of two distinct estates, upon distinct transactions, to the same mortgagee, cannot redeem one without redeeming the other, seems, by modern decisions, to have been extended to a purchaser of the equity of redemption of one of the mortgaged estates without notice of the other mortgage.”
The cases of Watts v. Symes, 1 De Gex, M. & G. 240; Selby v. Pomfret, 1 Johns. & H. 336; Neve v. Pennell, 2 Hem. & M. 170, are applications of the rule of the old cases in suits for foreclosure, as well as redemption. Beevor v. Luck, L. R. 4 Eq. 537; Tassell v. Smith, 2 De Gex & J. 713; Vipt v. Padget, Id. 611; Mills v. Jennings, 13 Ch. Div. 639; Cummins v. Fletcher, 14 Ch. Div. 699,-are all cases involving extensions of the old rule to subsequent purchasers or mortgagees, many of them involving the technical doctrine of tacking, as developed from the early cases of Brace v. Duchess of Marlborough, 2 P. Wms. 491, and Marsh v. Lee, 2 Vent. 337. That doctrine, in brief terms, was bottomed on the maxim of
noninterference between equal equities. Adams, Eq. 162. Through that maxim, if a third mortgagee advanced his money without notice of a second mortgage, he was permitted to buy in the first mortgage, thereby obtaining the legal estate, and then tack the third mortgage to the first, and require the second mortgagee to redeem both. This enabled the third mortgagee to squeeze out the intermediate incumbrancer by buying up a first mortgage, even when the second mortgagee's bill for foreclosure was pending. And this rule Lord Chief Justice Hale, with whom the rule, in a large measure, originated, called a "plank” gained by the third mortgagee, or tabula in naufragio. In Jones v. Smith, 2 Ves. Jr. 376, and Mills v. Jennings, cited above, the old rule, in its simple form, is stated, as well as the ground on which it stood. In Mills v. Jennings, Cotton, L. J. so well states the original doctrine, and the grounds upon which it has been extended, that I deem it best to make a liberal quotation:
“The rule as to consolidation of mortgages, in its simplest form, is this: That where one person has vested in himself, by way of mortgage, two estates, the property of the same mortgagor, one of these cannot be redeemed without the other; and this is so whether the two mortgages were originally granted to the same mortgagee, or, having been originally vested in different persons, have, by assignment, become vested in the same person. This was on the equitable principle that a court of equity would not assist a mortgagor in getting back one of his estates, unless he paid all that was due, though secured on a different estate. The mortgagor was coming into a court of equity to obtain its assistance in getting back an estate which at law belonged to the mortgagee, and it was held to be inequitable to allow him to get back an estate of more value than the debt charged on it, and to leave the mortgagee with an estate charged with a debt due by the mortgagor which might be of a larger amount than the value of the estate. But even the rule in this its simplest form was doubted by Lord Hardwicke in the year 1750, as appears by the report of Ex parte King (1), though he afterwards recognized and adopted it. Moreover, as a mortgagor cannot be allowed to prejudice the rights of his mortgagee by any dealings with the equity of redemption of the estate in mortgage, it has been held that a purchaser or mortgagee of one of two estates already in mortgage is, as regards the consolidation of the mortgages, in the same position as the original mortgagor; that is to say, the purchaser of an equity takes subject to all the equities affecting the person through whom he claims. * * * It is the circumstance of the mortgagor having created two mortgages on two different estates which gives the mortgagee of either estate, as soon as the second mortgage is created, a right to get both the mortgages into his hands; and to hold both until the debt due on each is paid. The principle which allows, ás against a subse. quent purchaser or mortgagee, the right of consolidation, is that the mort gagor cannot, by any dealing with the equity of redemption, prejudice the rights of his mortgagee. This can only apply to rights already given, or arising from acts already done, by the mortgagor. The same principle will prevent the mortgagor from throwing a greater burden on the purchaser of his equity of redemption by any act done subsequent to the sale or mortgage of this estate. It is true that a mortgagee of one estate may get in and consolidate the mortgages on another estate against a purchaser of the equity of redemption of one of the estates, even though at the time of the purchase the two mortgages were vested in different persons, provided both the mort gages existed previously to the sale of the equity of redemption of one of the estates. But this equity arises out of acts done by the vendor of the equity of redemption previously to the sale; and the act after sale necessary to give effect to the right of consolidation-namely, the union of the mortgages on both estates in one person-is an act of persons who are no parties to the sale of the equity of redemption, and not bound to the purchaser by any contract
inconsistent with the claim to consolidate. In our opinion, the purchaser of an equity of redemption takes subject to such equities as arise from acts previously done by his vendor. He is subject to these equities, though acts of persons other than the vendor may be necessary to give rise to the equity.” Mills V. Jennings, 13 Ch. DiV. 639.
The doctrine established by the tacking cases proper—that a third mortgagee, without notice, may buy in a first mortgage, and thereby exclude a second mortgage—is not enforced in the courts of this country, in consequence of the effect of our registration system, which gives effect to conveyances in the order of registration. The policy underlying registration is that a mortgage shall not be a security for more than is expressed therein, as against subsequent purchasers or mortgagees. I quite agree with what was said by the Virginia supreme court, through Baldwin, J., in Siter V. McClanachan, 2 Grat. 304, that:
“The elements of the doctrine, it will be seen, are the possession by the preferred mortgagee of the legal title, and the pre-existence or accession of a distinct equity, Without notice of mesne incumbrance. Hence it is obvious that it could never have been introduced into a country enjoying the benefits of a general registry, intended to give notice to the whole world of all conveyances and incumbrances, and to supply the place of actual notice. * * * In nearly all the States of this Union, the registry is held to be notice to SubSequent purchasers and mortgagees, provided the deed has been duly proved or acknowledged. * * * It is easy to perceive that the operation of the registry laws of Virginia, and of other states of the Union, is to cut up by the roots the English doctrine of tacking, so far as it affects intermediate purchasers and incumbrancers.”
It is equally clear that our registration system renders inoperative many of the principles upon which the rule now involved was extended so as to affect subsequent purchasers and incumbrancers. But registration laws manifestly have no effect upon the rule, as between mortgagor and mortgagee, or the application of the maxim upon which the doctrine rests, whenever a plaintiff resorts to equity to redeem or to recover the legal title to lands, or the possession of a pledge. If he seeks equity, he must do equity; and equity will not assist a debtor to deprive a creditor of a security which at law he may hold, until he has done equity, by discharging any just liability which exists between them. Great care must be observed in examining American cases touching this species of tacking, to see that they do not turn on the rule which makes the registration of a deed notice. Whenever they do so turn, they are not in point. Where the question arises between unregistered equities, or when the registry acts are, from any cause, inapplicable, there “seems to be nothing to prevent the holder of a third mortgage from obtaining priority over a second, of which he was ignorant at the time of taking his own, and which has not been placed on record, by buying in the first, or obtaining a conveyance of the legal title in any other way, although the question is of little practical importance, because it cannot arise unless both mortgages are unrecorded, when it will be easier to record the third than to resort to the expedient of purchasing the first.” 1 White & T. Lead. Cas. Eq. 856. There are many American cases illustrative of the application of this equitable maxim to bills seeking to recover a legal title, or to re