
    COURT OF APPEALS.
    Stephen D. Marshall and George M. Miller, executors plaintiffs, appellants, agt. Thomas A. Davies and others, defendants, respondents.
    
      Mortgage foreclosure—Bights of mortgagor and mortgagee — when relation of principal and sun'ety anises—Brattice—Buies of evidence — Power of general term to order a new trial.
    
    Where the mortgagor conveys to a third party, who assumes the mortgage, the relation of principal and surety arises between the mortgagor and his vendee, and after notice of this relation the mortgagee is bound to observe it and abstain from doing any act to the prejudice of the mortgagor, or which would impair his recourse against the mortgaged premises in case he should be obliged to pay his bond and be subrogated to the mortgagee; the mortgagee in such a case, after notice, cannot, with impunity, release the land or extend the time of payment, or do any other act to the prejudice of the mortgagor, and the prohibited acts are determined by the law of principal and surety.
    But the actual relation of debtor and creditor between the mortgagor and mortgagee cannot be destroyed’ by any act of the mortgagor alone, where the mortgage is given to secure the bond of the mortgagor.
    In cases like the present the relation of creditor and-principal debtor is so affected that the mortgagee is bound, after notice of the equitable rights of the mortgagor, as between himself and vendee, to respect them and do no act to their prejudice, and when he forecloses the equities of the mortgagor will be protected in the order of sale. But the mortgagee may sue upon the bond in the first instance, notwithstanding the transfer of the land.
    Where a vendee of mortgaged premises has assumed the payment of the mortgage, the mortgagor cannot compel his creditor to foreclose when there is no good reason why he did not pay his bond according to his agreement and take an assignment of the bond and mortgage and proceed against the land and the subsequent grantees thereof for his indemnity. He can also proceed in equity to compel such grantees, as to whom he stood in the situation of a mere surety, to discharge the debt for his protection.
    In the absence of any notice of change in the position of the mortgagor, and of any request to foreclose, a mortgagee out of possession may rely upon the personal liability of his debtor, and is not bound to look after' or protect the mortgaged premises ; and if he foreclose the mortgage, the debtor is entitled to credit only for the net proceeds of sale realized by his creditor, after the deduction of all liens for taxes, &e., and remains liable for the deficiency.
    It is a familiar rule for the conduct of a trial, that a party holding the affirmative is bound to introduce all the evidence upon his side before he closes. He must exhaust all his testimony in support of the issue on his side before the testimony on the opposite side has been heard.
    He can afterwards introduce evidence in rebuttal only. Rebutting evidence, in such cases, means not merely evidence which contradicts the witnesses on the opposite side, and corroborates those of the party who began, but evidence in denial of some affirmative fact which the answering party has endeavored to prove.
    Where the defendant had been examined in support of his allegation of notice and request to foreclose a mortgage, and he had testified to a conversation with M., upon which he relied, and that he thought there was none subsequent:
    
      Held, that having rested his case, and the plaintiff having closed his testimony, the defendant had no legal right to reopen his own case and introduce evidence to sustain his defense, which he might have introduced when the case was with him.
    
      Held, further, that after having testified to one conversation which was denied on the other side, the defendant was not entitled, as a matter of right, to prove another as to which he had not previously testified, even though it tended to support his original statement.
    This was not evidence in rebuttal. The testimony on the part of the plaintiff was that other conversations might have been held, but that no conversation of the nature testified to by the defendant ever took place. This was a mere denial, and not proof of any affirmative fact which the defendant had the right to rebut.
    These rules may,in special cases,be departed from,in the discretion of the trial judge, butarefusalto depart from them is no ground of exception.
    Where an order of the general term does not state that the reversal was on any question of fact, it cannot be sustained unless it be made to appear that some error of law was committed by the trial judge.
    Where a case com'es before the general term, on appeal from the judgment and exceptions only, it has no discretionary power to order a new trial in the absence of legal error.
    
      November, 1879.
    
      This was an action to foreclose a mortgage. February 1, 1871, the defendant Davies, executed to plaintiff a bond and mortgage for $16,000, payable February 1, 1874. October 3, 1871, defendant Davies conveyed the mortgaged premises to the defendant Leslie, and Leslie thereby assumed the payment of the bond and mortgage. October 30, 1872, defendant Leslie conveyed the mortgaged premises to defendant Oornen, who also assumed the payment of the mortgage. The principal was not paid at maturity, but interest was paid up to June, 1876, and none thereafter.
    The defendant Davies answered:
    1. That after the sale to Leslie, he (Davies) had requested plaintiffs to foreclose and collect from Leslie, and that after due date plaintiffs neglected so to do and that premises became of less value, and Leslie became insolvent, and since the maturity of the mortgage, taxes and assessments have accumulated on the property.
    2. That plaintiffs had extended the- time of payment of the bond and mortgage after the sale by Davies to Leslie.
    The case was tried before Hi-, justice Barrett. On the trial no evidence was given of any extension of time. Evidence of a notice to foreclose, etc., was given by defendant Davies, and contradicted by plaintiffs, and the court found no such notice was given. It was found that since the maturity of the mortgage, the taxes for 1875, 1876 and 1877, amounting to $803.60, had been levied on the property, and were unpaid, and that assessments confirmed in 1874 and 1876, amounting to $1,273.52, were also unpaid, and the judgment of foreclosure and sale directed these taxes and assessments to be paid out of the proceeds of sale. Defendant Davies afterwards moved to strike out of the judgment the words directing the referee to pay such taxes, etc., out of the proceeds of sale, and the motion was denied, and judgment for deficiency for $5,795.75, including such taxes and assessments, was entered against defendant Davies, who appealed to the general term from the judgment of deficiency and the order denying such motion.
    The general term reversed the judgment for deficiency, and granted a new trial, holding that the taxes and assessments should not have been deducted from the proceeds of sale, and that the deficiency judgment against defendant Davies, was too large by the amount of such taxes and assessments. The plaintiffs appealed from the order of the general term to the court of appeals, with stipulation, and the court of appeals have reversed the order of the general term and affirmed the judgment rendered at special term, with costs, giving the following opinion :
    
      Wheeler H. Peekham, for appellant.
    
      Sa/muel Hand and Edm'imd Coffin, Jr., for respondents.
   Rapallo, J.

As the order of the general term does not state that the reversal was on any question of fact, it cannot he sustained unless it be made to appear that some error of law was committed by the trial judge. The case came before the general term on appeal from the judgment and exceptions only, and it had no discretionary power to order a new trial in the absence of legal error. The only exception to rulings at the trial which has been argued is that taken by the defendant to the exclusion of the question to him on his being recalled, after the plaintiff had rested, whether he had had conversations with Mr. Miller in 1870 or 1871 at his office.

The question of fact at issue was whether the defendant had notified Mr. Miller of the sale of the mortgaged premises to Leslie, and had requested Miller to proceed to collect the amount which might become due upon the mortgage at maturity. The defendant Davies, who had the affirmative of the issue, testified in his own behalf that he sold the property to Leslie in October, 1871; that about the time the first or second installment of interest on the mortgage became due after the sale he went to Miller’s office and there told him that he had sold the property to Leslie, who had assumed the payment of the mortgage, and asked to collect the interest of Leslie, and, also, the principal when it became due, and if he did not pay it to foreclose the mortgage at once, and that Miller assented to that proposition, and that from the time of that interview until the 6th of January, 1877, he thought he had no further interview with Miller or the plaintiffs.

Miller being called on the part of the plaintiff testified positively that no conversation of that kind ever took place. On cross-examination he was asked whether he had any conversation at all with the defendant Davies in 1870 or 1871, and he answered, none that he remembered; that he might have had conversations that he did not remember, but none of the nature testified to by the defendant.

After the plaintiff had rested, the defendant Davies was recalled and asked whether he had any conversation with Mr. Miller during the years 1870 or 1871 at his office. This question being objected to on the ground that the witness had already given his testimony was excluded, and exception taken.

The witness was then permitted to assert the positiveness of his recollection of the conversation to which he had already testified, and to state the circumstances which enabled him to be positive.

We cannot discover any legal error in the ruling excepted to. The court went further than strict rules required it to go in permitting the defendant to be re-examined as to his original statement. This, however, was purely discretionary. If the question which was excluded was intended to refer to this conversation the exception is groundless.

If the question related to any other conversation the exception is equally without foundation. Unless the Conversation sought to be proved was material and tended to maintain the issue on the part of the defendant, it was irrelevant. If it was material, then it was entirely within the discretion of the court whether or not to permit the inquiry. The defendant had been examined in support of his allegation of notice and request to foreclose.' He had testified to a conversation with Mr. Miller upon which he relied, and that he thought there was none subsequent. Having rested his case, and the plaintiff having closed his testimony, the defendant had no legal right to reopen his own case and introduce evidence to sustain his defense, which he might have introduced when the case was with him. Ho rule for the conduct of a trial is more familiar than that the party holding the affirmative is bound to introduce all the evidence on his side before he closes (Hastings agt. Palmer, 20 Wend., 225). He must exhaust all his testimony in support of the issue on his side before the testimony on the opposite side has been heard (Ford agt. Niles, 1 Hill, 301; Rex agt. Stimson, 2 Carr. & P., 415). He can afterward introduce evidence in rebuttal only. Eebut■ting evidence in such cases means not merely evidence which contradicts the witnesses on the opposite side and corroborates those of the party who began, but evidence in denial of some affirmative fact which the answering party has endeavored to prove (Silverman agt. Foreman, 2 E. D. Smith, 322; 2 Carr. & P., 416). In the present case, after having testified to one conversation which was denied on the other side, the defendant was not entitled, as matter of right, to prove another as to which he had not previously testified, even though it tended to support his original statement. This was not evidence in rebuttal. The testimony on the part qf the plaintiff was that other conversations might have been held, but that no conversation of the nature testified to by the defendant ever took place. This was a mere denial and not proof of any affirmative fact which the defendant had the right to rebut. These rules may, in special cases, he departed from in the discretion of the trial judge, but a refusal to depart from them is no ground of exception.

The findings of fact of the trial judge disclose no error in his conclusions of law. He finds no notice to the mortgagees of the conveyance from Davies to Leslie, and no request to the plaintiffs to foreclose, and there is no uncontroverted evidence in the case which required him to find those facts. Whether, if they had been found, the defendant would have been entitled to judgment, we do not now decide. But clearly in the absence of those facts the defense cannot be sustained. As between the plaintiffs and the defendant Davies, he was the principal debtor, and the plaintiffs were not bound to look after the taxes on the mortgaged premises. We have held, that where the mortgagor conveys to a third party, who assumes the mortgage, the relation of principal and surety arises between the mortgagee and his vendee, and that after notice of this relation the mortgagee is bound to observe it, and abstain from doing any act to the prejudice of the mortgagor, or which would impair his recourse against the mortgaged premises in case he should be obliged to pay his bond and be subrogated to the mortgagee. The mortgagee in such a case, after notice, cannot, with impunity, release the land, or extend the time of payment, or do any other act to the prejudice of the mortgagor, and the prohibited acts are determined by the law of principal and surety. (Calvo agt. Davies, 73 N. Y., 211.) But the actual relation of debtor and creditor, between the mortgagor and mortgagee, cannot be destroyed by any act of the mortgagor alone, where the mortgage is given to secure the bond of the mortgagor. The courts have gone no further than to hold that in cases like the present, the relation of creditor and principal debtor is so far affected that the mortgagee is bound, after notice of the equitable rights of the mortgagor as between himself and vendee, to respect them, and do no act to their prejudice; and, when he forecloses, the equities of the mortgagor will be protected in the order of sale. But the mortgagee may sue upon the bond in the first instance, notwithstanding the transfer of the land. This has often been decided. In Marsh agt. Pike (10 Paige, 595) it was held that where a vendee of the mortgaged premises had assumed the payment of the mortgage, the mortgagor could not compel his creditor to foreclose, when there was no good reason why he did not pay his bond according to his agreement, and take an assignment of the bond and mortgage, and proceed against the land and the subsequent grantees thereof for his indemnity, and that he could also proceed in equity to compel such grantees, as to whom he stood in the situation of a mere surety, to discharge the debt for his protection. The defendant Davies, having no' right to compel the plaintiffs to foreclose the mortgage, it is questionable whether a request to do so could have been of any avail. His request to collect the debt might have been answered by bringing an action against him on his bond, and the necessity of this he could have obviated by voluntarily paying it, and being subrogated to the rights of the mortgagee. It is, to say the least, doubtful whether a mortgagor thus situated has any remedy, except to protect himself by watching the security, and if he finds that it is becoming impaired by lapse of time and the accumulation of interest and taxes, to take the steps pointed out in Marsh agt. Pike (supra).

It is very clear, however, that in the absence of any notice of change in the position of the mortgagor, and of any request to foreclose, a mortgagee out of possession may rely upon the personal liability of his debtor, and is not bound to look after or protect the mortgaged premises; and that if he forecloses the mortgage, the debtor is entitled to credit only for the net proceeds of sale realized by his creditor, after the deduction of all liens for taxes, &c., and remains liable for the deficiency. In the numerous foreclosures which have taken place in the state since the organization of the court of chancery, no claim to the contrary appears to have been made, and we can perceive no foundation upon which such a claim can rest.

The order of the general term should be reversed, and the judgment at special term affirmed, with costs.  