Lockhart v Hardy
| Jurisdiction | England & Wales |
| Judgment Date | 01 January 1846 |
| Date | 01 January 1846 |
| Court | High Court of Chancery |
English Reports Citation: 50 E.R. 378
ROLLS COURT
S. C. 10 Jur. 532. See In re Kelday, 1888, 36 W. R. 586; Kinnaird v. Trollope, 1888, 39 Ch. D. 642.
- [349] lockhabt v. hardy. March 1, April 18, 1846. 'W - - [S- C- 10 Jur. 532. See In re KeUay, 1888, 36 W. E. 586; Kinnaird v. Trollope, " , " 1888, 39 Ch. D. 642.] After foreclosure, the mortgagee fairly sold the estate for less than what was due to him. Held, that he could not afterwards recover from the mortgagor, upon his collateral personal securities, the amount still remaining unpaid. Where a debt is secured by mortgage, covenant, and bond, the mortgagee may pursue all his remedies at the same time. If he obtain full payment on the bond or covenant, the mortgagor becomes entitled to the estate, but if he obtain part payment only, he may go on with his foreclosure suit and foreclose for the remainder. On the other hand, if he forecloses first, and the value of the estate proves insufficient to satisfy the debt, he may, while the mortgaged estate remains in his power, sue on the bond or covenant, but he thereby opens the foreclosure, and the mortgagor may thereupon redeem. This case came before the Court, upon exceptions to the Master's report. The case, as appearing by the Master's report and the admissions of the parties, was, that in the year [350] 1828, a person of the name of Smith conveyed an estate to John Ingram Lockhart, by way of mortgage to secure the repayment of the sum of £2999 lent, and afterwards, on the 14th of December 1829, he executed a deed, whereby he created a further charge on the same estate, in favour of Lockhart, for the sum of £500, John Ingram Lockhart, being entitled to this mortgage, borrowed of or became indebted to William Browne, since deceased, in the sum of £1600, and by deed, dated the 17th of August 1831, made between Lockhart of the first part, Smith of the second part, and William Browne of the third part, in consideration of £1600 due from Lockhart to Browne, the mortgage debts of £2999 and £500 were assigned to Browne, on trust, amongst other things, to pay costs, to satisfy the £1600 and interest, and to pay the surplus to Lockhart; and the mortgaged estate was conveyed to Browne, subject to a proviso for redemption on the payment of £1600 and interest,, which were further secured by a covenant and bond. Browne died in December 1831, and William Browne and John Browne became his legal personal representatives. John Ingram Lockhart died in August 1835, and Alder was his legal personal representative. A bill was filed by the Brownes to foreclose the mortgage estate, and on the 20th of December 1841 a decree was made in the usual manner for accounts and foreclosure. On the 2d of May 1842 the Master reported, that on the mortgage to Lockhart there was due from Smith to Lockhart's estate £5436, Os. 3d., and that on the mortgage from Lockhart to Browne there was due from the [361] estate of Lockhart to-the estate of Browne the sum of £2136, 12s. 9d. A day was, in the usual manner,. 9BEAV.SM. LOCKHAET V. HARDY 379 appointed for payment, and default being made, the mortgaged estate was foreclosed, as againat Smith, on the 9th of December 1842. On the 2d of February 1843 it was reported, that £2401, 18s. 7d. was due to the estate of Browne from the estate of Lockhart; a day was appointed for payment, and default being made, the mortgage was ultimately foreclosed as against Alder and the Lockharts. After this, the Brownes, Being in possession of the mortgaged estate, sold it absolutely to Mr. Tomlinson for £1999, and the estate was conveyed to him, and was now entirely out of the power of the Brownes. It was admitted that the estate had been fairly sold. A decree was afterwards made for the administration of the estate of John Ingram Lockhart. The Brownes went in under the decree, and claimed to be allowed to prove, on the bond, for the residue of the mortgage debt after deducting the purehase-money, as a debt on the covenant or bond, against the estate of John Ingram Lockhart; and the Master having allowed their claim to the amount of £642, 8s. lid., Mr. Alder, the legal personal representative of John Ingram Lockhart, took exceptions to the report, and alleged that nothing ought to have been found due to the Brownes. Mr. Kindersley and Mr. Lloyd, in support of the exceptions. After foreclosure and subsequent sale, the mortgagee cannot proceed against the mortgagor on his other securities. The mortgagee having sold the estate at his own risk, and for his own benefit, cannot, in the case of its producing less than his debt, call on the mortgagor to make good the deficiency, any more than [352] the mortgagor, if the estate sold for double the amount of the debt, could insist on the return of the surplus. The original contract is a mere pledge of the estate, which the mortgagee undertakes to restore on full payment of the debt. By foreclosure, the mortgagee has elected to take the estate in satisfaction of the debt, which, in equity, has become extinguished, by the conversion of the holder of the pledge into an absolute owner of the mortgaged property. The mortgagee may still at law proceed on his other securities, but a...
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