Lane v. Erskine

Treat, C. J. Hunt, Ridgely, and Lane were partners in business, under the name of Hunt, Ridgely & Co. The firm became indebted to Erskine & Eichelberger. It was afterwards dissolved, and Hunt and Lane formed a partnership, under the style of John F. Hunt & Co. The new firm assumed the liabilities, and succeeded to the effects, of Hunt, Ridgely & Co. Hunt and Lane subsequently dissolved their partnership, and its effects were transferred to Lane, who agreed to discharge the liabilities of both firms. At the same time, Lane and his wife conveyed certain real estate to Hunt, by way of mortgage, to secure and indemnify him against the payment of the partnership debts. Erskine & Eichelberger afterwards recovered a judgment against Hunt, Ridgely, and Lane, and sued out an execution thereon, which was returned nulla bona. They then accepted the promissory note of Hunt in satisfaction of the judgment, and received from him an assignment of the mortgage. They subsequently filed a bill against Hunt, and Lane and his wife, to foreclose the mortgage. Lane filed a demurrer, which was overruled. Hunt was defaulted. Mrs. Lane filed an answer, in which, among other things, she alleged that the mortgaged premises belonged to her in her own right, at the time of the execution of the mortgage. The complainants filed a replication, but no proof was taken as to the ownership of the property. At a subsequent term, the death of Lane was suggested, and a decree of foreclosure entered. A writ of error is now prosecuted in the names of the heirs of Lane.

On a bill to foreclose a mortgage, the mortgagor, unless he has assigned the equity of redemption, is an indispensable party. He has a direct interest in the account to be taken of what is due on the mortgage, for it fixes the amount of his indebtedness. And he is entitled to redeem the mortgaged premises, on payment of the amount thus ascertained to be due. If he dies intestate, the estate descends to his heir, burdened with the incumbrance. The heir has the same interest in stating the account, and the same right of redemption. It follows that he is a necessary party. It is accordingly well settled by the authorities, that, on a bill for the foreclosure of a mortgage, where the mortgagor has died without transferring or devising the equity of redemption, the heir is a necessary party, and no decree can be entered until he is before the court. Story, Eq. Pl. sect. 196; Coote on Mortgages, 503; 4 Kent’s Com. 185; Fell v. Brown, 2 Brown’s C. R. 276; Palk v. Clinton, 12 Vesey, 48; Farmer v. Curtis, 2 Simons, 466; Worthington v. Lee, 2 Bland. 678; Williamson v. Field, 2 Sandf. C. R. 533.

This rule presents an insuperable objection to this decree. The presumption from the record is, that Lane was the owner of the equity of redemption, and that it descended to his heirs. The statement in the answer of Mrs. Lane, that, the premises belonged to her in her own right, was not responsive to the allegations of the bill, and cannot be considered as rebutting the presumption. On the death of Lane, the complainants, instead of proceeding to a hearing of the case, should have amended their bill by alleging that the mortgaged premises belonged to Mrs. Lane, and that the estate of her husband therein terminated on his decease, or have'filed a supplemental bill malting his heirs parties to the suit.

Several interesting questions were made on the argument; but as the case is not in a condition to be decided on the merits, we refrain altogether from discussing them.

The decree will be reversed, and the cause remanded, with leave to the complainants to amend their bill, or file a supplemental bill, as they may deem most advisable.

Decree reversed.