Opinion
In the absence of fraud or bad faith on the part of the mortgagee in taking a mortgage for an amount in excess of that which actually entered into the purchase price of the property, the mortgage may be divided; so far as it is a purchase-money mortgage, it constitutes a lien on the property prior to that of an attaching creditor, while the part which does not represent purchase-money is not entitled to such priority. The plaintiff in the present case sought merely the foreclosure of her judgment lien, and cannot be compelled as a condition thereto, to redeem that part of the mortgage representing purchase-money which is prior to her judgment lien.
Argued December 5th, 1933
Decided February 6th, 1934.
ACTION to foreclose a judgment lien, brought to the Superior Court in New Haven County and tried to the court, McEvoy, J.; judgment determining the respective rights of the parties, from which the plaintiff appealed. Error, and cause remanded with directions.
The appellee filed a plea in abatement which was overruled.
PER CURIAM. Judgment in this action was rendered August 8th, 1933. No steps were taken to appeal until August 31st, 1933, when the plaintiff obtained an extension of time in which to appeal until September 20th, 1933. On September 7th, 1933, an appeal was filed. The defendant has pleaded in abatement because no notice of the intention to appeal was filed. Section 19C of the Rules for Appellate Procedure provides that limitations of time for filing appeals and all proceedings to make or complete the record shall be suspended during the months of July and August, provided any party desiring to appeal shall within two weeks after the rendition of judgment file with the clerk a written notice of intention to appeal. Section 19A provides that in all civil actions execution shall be stayed for two weeks after final judgment, and if an appeal shall be filed or during July and August a notice as provided in § 19C, then execution shall be stayed until final determination of the cause. The purpose of the filing of a notice of intention to appeal during July and August is merely to extend the time during which execution will be stayed where a party intends to perfect an appeal when the summer months are past. If no such notice is filed, the prevailing party may take out execution after the expiration of two weeks from the rendition of the judgment and the adverse party has thereafter no right of appeal. The rules do not, however, forbid a trial court in a proper case from granting an extension of time in which to appeal, despite the failure to file a notice as required by § 19C, with a consequent stay of execution. In this case an extension of time to appeal was secured and the appeal was taken within the time allowed. The plea must be overruled.
Charles A. Harrison, with whom, on the brief, was Milton G. Harrison, for the appellant (plaintiff) Daniel D. Morgan, with whom, on the brief, was Robert J. Woodruff, for the appellees (defendants Woodruff, Peck and Sanderson).
This case has been before us on two previous occasions. The first was an appeal taken by the plaintiffs from a judgment of nonsuit ( Joseph v. Donovan, 114 Conn. 79, 157 A. 638) and we there held that the plaintiff had a valid judgment lien which attached to the interest of Donovan in the premises at the time the attachment was made, and which was enforceable to the extent of the interest he had after he had acquired title; and, accordingly, we reversed the judgment and remanded the cause to be proceeded with according to law. The second appearance ( Joseph v. Donovan, 116 Conn. 160, 164 A. 498) was an appeal by the plaintiff and by certain defendants from a judgment of foreclosure, granting priority to the mortgage of Woodruff, Peck and Sanderson over the judgment lien of the plaintiff derived from the previous attachment of Donovan's interest. The plaintiff appealed and the question involved and decided in her appeal was whether the third mortgage to Woodruff, Peck and Sanderson, made subsequent to the attachment of Donovan's interest in the property by the plaintiff's assignor was entitled to priority over the plaintiff's judgment lien as a purchase-money mortgage, it having appeared in the finding that the mortgage was made by Donovan to secure his note to them in the amount of $18,793.75, that the balance of the purchase price due on the property was $12,247.50, and that included in the indebtedness of Donovan to Woodruff, Peck and Sanderson evidenced by the note was an indebtedness of Donovan to the West Haven Bank and Trust Company in the amount of $3831.36, and to Robert J. Woodruff, for legal services, $2180. We stated in that case (p. 165): "To give to their mortgage the priority of one for purchase-money, would effect a preference of Donovan's debts to the bank and to Robert J. Woodruff over the attachment, and amount to a fraud upon the plaintiff's rights." Accordingly, we remanded the case to the Superior Court for further proceedings according to law.
The appeal which the plaintiff took in that case was one which left no portion of the judgment unaffected and not subject to reversal by this court. Accordingly, when we held that the court was in error in giving priority over the plaintiff's lien to the entire indebtedness of Donovan to Woodruff, Peck and Sanderson, a reversal of the entire judgment was a necessary consequence, and the effect of our finding of error and remanding the cause to be proceeded with according to law was to destroy entirely the efficacy of the judgment appealed from and require a new trial of all the issues in the case. McIsaac v. Hale, 105 Conn. 249, 250, 135 A. 37; Lewis v. Yale, 78 Conn. 202, 207, 61 A. 364. Upon the new trial, the court entered judgment that Woodruff, Peck and Sanderson were the holders of a purchase-money mortgage in the sum of $12,247.50 with interest from January 16th, 1928, prior to the judgment lien of the plaintiff in the sum of $4834.24 with interest from October 30th, 1929; and that the defendants Woodruff, Peck and Sanderson were the owners of a part of a mortgage in the sum of $6546.25 with interest from January 16th, 1928, subsequent to the judgment lien of the plaintiff, the latter amount representing the difference between the face of their mortgage and the part of the sum advanced which entered into the purchase of the property; and fixing a law day to the plaintiff for the redemption of that part of the Woodruff, Peck and Sanderson mortgage which represented purchase-money, provided that upon payment of that sum by the plaintiff on or before the law day fixed, title to the property should vest in the plaintiff, subject to a right of redemption by the defendants Woodruff, Peck and Sanderson of the balance of their mortgage on or before a law day fixed for them.
On the present appeal, the plaintiff attacks the correctness of this judgment. No finding of facts was requested of or made by the trial court and the only claimed errors which we can consider are those appearing upon the face of the record. Rules for Appellate Procedure, § 3. We are confined, therefore, on this appeal to the consideration of the question whether the judgment entered by the trial court was permissible, in dividing the indebtedness and giving priority over the plaintiff's judgment lien to that part of the debt which was incurred in the advance of money actually used to purchase the property; and on the other hand, granting priority to the plaintiff's judgment lien over the balance of the indebtedness. There being no finding in the case, we cannot presume that there was any fraud or bad faith upon the part of Woodruff, Peck and Sanderson in taking the mortgage for an amount in excess of that which actually entered into the purchase price of the property. In the absence of such a finding, it has been held by the great weight of authority that a mortgage may be divided; that so far as it is a purchase-money mortgage, it constitutes a lien on the property prior to that of an attaching creditor, while the part which does not represent purchase-money is not entitled to such priority. New Jersey Building, Loan Investment Co. v. Bachelor, 54 N.J. Eq. 600, 35 A. 745, 747; Franklin Society for Home Building and Savings v. Thornton, 85 N.J. Eq. 525, 527, 96 A. 921, 922; Bond v. Westine, 128 Kan. 370, 278 P. 12, 13; Roby v. Bismarck National Bank, 4 N.D. 156, 162, 59 N.W. 719, 721; Campbell and Pharo's Appeal, 36 Pa. 247, 257; Dillon v. Burn, 5 Cal. 455, 457; Wilson v. Lubke, 176 Mo. 210, 75 S.W. 602, 603; 3 Tiffany, Real Property (2d Ed.) § 636. It follows that the mortgage of Woodruff, Peck and Sanderson has priority over the judgment lien of the plaintiff to the extent of $12,247.50 with interest from January 16th, 1928, and is subsequent to the plaintiff's judgment lien in the amount of $6546.25 with interest from January 16th, 1928.
The plaintiff has a right to foreclose the part of the mortgage which has not priority and the right to redeem the part which has priority. In her complaint, the plaintiff seeks merely a foreclosure of her judgment lien and cannot be compelled, as a condition thereto, to redeem that part of the mortgage representing purchase-money which is prior to her judgment lien. It follows that the judgment is erroneous in so far as it compels the plaintiff to redeem that part of the mortgage, $12,247.50 with interest from January 16th, 1928, which is prior to her judgment lien.