
    Joseph Levy, plaintiff, vs. The Mayor, Alderman and Commonalty of the City of New York, defendants.
    A mortgagee of land, not in possession, who does not establish any ultimate injury to the security of his debt, by the destruction of a building on the mortgaged premises by rioters, is not entitled to recover the value thereof, in an action against the city in which the premises are situated, under a statute making it liable for injury done by rioters.
    (Before Robertson, Ch. J. and Moncrief and Monell, JJ.)
    Heard January 10, 1865; ;
    decided March 4, 1865.
    On the 15th day of July, 1855, Eobert Sturgeon, and Anna his wife, executed and delivered to the plaintiff a mortgage upon a certain lot of land, situated in West Thirty-second street, in the city of New York ; which mortgage was given as security for the payment of a certain bond for five hundred dollars. On or about the 9th day of December, 1862, the plaintiff commenced an action in the Supreme Court to foreclose this mortgage. On the 22d day of August, 1863, judgment for foreclosure was filed, by which judgment James J. Colwell was appointed referee to sell .the mortgaged premises. The amount due upon the mortgage was $748.42. The mortgaged premises were sold by the referee on the 17th day of September, 1863, and were struck off to the plaintiff for the sum of $1000, subject to a prior mortgage for $1400, with interest from December 1, 1861. On the 7th day of October, 1863, the referee executed and delivered to the plaintiff a deed of the mortgaged premises. Upon this state of facts the plaintiff brings this action, under the act of the legislature of 1855, “ to provide for compensating parties whose property may be destroyed in consequence of mobs or riots,” to recover the value of a building which was standing upon the land covered by the mortgage, and which was burned by the rioters on the 15th day of July, 1863, nearly three months prior to the conveyance to him by the referee.- At the close of the plaintiff’s case, a motion was made to dismiss his complaint, upon the ground “ that the plaintiff, not being the owner of the building at the time of its destruction by the mob, on the 15th day of July, 1863, could not recover in this action. Also that the act of the legislature under which the action was brought, was unconstitutional.”
    The court denied the motion, and the plaintiff had judgment for $3000, that being the value of the building, as assessed by the jury. The court ordered that all proceedings on the part of the plaintiff upon the verdict be stayed, until the • exceptions taken on the trial should be heard and determined, in the first instance, at the' general term of this court.
    
      A. R. Dyett, for the plaintiff.
    I. At common law a mortgage (mortuum vadium) passed the entire title and possession to the mortgagee, who was not accountable for the rents and profits, the estate being £< dead” to the mortgagor. The mortgage was an invention to secure interest or “use” for the money loaned, when it was unlawful to take it directly. If the money were not paid at the day, the estate became absolute.' The enlightened jurisprudence of a-subsequent period permitted interest for money loaned, .and courts of equity modified the harshness of the common law so far as to permit the mortgagor to receive the rents and profits, and enjoy the possession, and made the mortgagee accountable for the rents if he received them. But this rule prevailed in courts of equity alone, which refused this indulgence to the mortgagor when the premises were an inadequate security, and hence receivers are frequently appointed, of the rents and profits, in foreclosure cases, and they are paid over to the mortagee whenever necessary to satisfy his demand. They belong to him and are - mortgaged to him in terms. By the Revised Statutes, (2 R. S. 312, § 57,) a mortgagee is for-' hidden to bring ejectment, and has no remedy therefore but in equity. With this single exception, at law the rule of the common law still governs the mortgage. ' It is frequently stated that the - mortgagee has but a chattel interest, under the Revised Statutes. By that is meant that that is the effect of the statute. Although the equity of redemption is regarded as the legal estate, for many purposes, it is not the legal estate, after all. The legal estate is in the mortgagee. (4 Kent’s Com. 137, 140, 155 to 162.)
    II. By the judgment of foreclosure the equity of redemption was cut off, and the mortgagor was entitled only to the possession and the rents and profits until the sale. He could redeem only as a matter of favor, upon application, to the court. The plaintiff might have had a judgment of strict foreclosure, instead of a sale, which was merely for the purpose of collecting any deficiency of the mortagaged premises, insufficient to pay his debt. By the sale and purchase by the mortgagee, the title became absolute from the date of the mortgage.
    
    III. The building was a part of the realty, and as much land as the soil itself. The mortgagor had no right to dispose of it except subject to the mortgage. He could only use and enjoy it. This is an action at law to recover, not for an injury to the possession, nor for mere waste, though such actions have been allowed, even against a mortgagor in possession, (4 Kent’s Com. 162,) but against a third person for . the willful destruction of the building itself, id ést, a permanent injury to the land, committed after forfeiture and a judgment of foreclosure.
    IY. The action was brought after the sale and the referee’s deed to the plaintiff, and if the mortgagor, in such a case, were allowed to bring the action and recover for the loss of the land mortgaged, not only would the mortgagee be deprived of his security,"but the damages in such a case, representing the land itself, would be given to him who has no sort of right to, or interest in, it after the mortgage is executed, and especially after a judgment of' foreclosure, except the sole right to the possession and enjoyment of it. As well might the mortgagor be allowed after the sale to maintain ejectment against a third party, wrongfully in possession, to recover the land itself. Can any one doubt that if the mortgagor had carried off or wilfully destroyed the building, he would have been liable to the plaintiff in an action for its value ? How, then, can he be permitted to recover its value if a third person carry it off or destroy it ? Yet there is no difference in principle in the two cases. If the mortgagee, therefore, cannot recover, nobody can. (4 Kent’s Com. 156, 157. 1 R. S. 750, § 8.)
    Y. The referee’s deed was equivalent to a conveyance by the mortgagor, of the title, and related back to the date of the mortgage which expressly covered the building. . Such a conveyance carried with it the right to the cause of action, and the damages for the destruction of the building. (6 How. Pr. 161. 22 Barb. 110. 17 N. Y. Rep. 466.) It would be a perfect answer to an action to recover' damages for property destroyed, even if brought by a then owner, that before the action was commenced, or even before the trial, he had sold the property or assigned his interest in it to another. The vendee or assignee alone could recover, or nobody could.
    YI. The term “ property,” in the act of 1855, is nomen generalissimum, and is not confined to a title in fee. (Bouvier’s Laio Dic. h. v.) Ho matter what, therefore, the nature of the plaintiff’s estate or interest, if it be such as entitles him to recover, it satisfies the language of the statute.
    YII. If we be right in the foregoing views, all the exceptions taken on the trial by the defendants, except that noticed in the next point, are untenable, for they are- all based on the idea that the plaintiff’s estate or interest in the premises was not of a character to entitle him to recover.
    YIII. The only remaining exception is based upon the ohjection to the constitutionality of the act in question. As that question has been already decided in this court in favor of the plaintiff, it is unnecessary to argue it.
    
      J. K. Haclcett, for the defendants.
    I. The court erred in refusing to dismiss the complaint upon the ground that the plaintiff was not the owner of the building at the time of its destruction.
    
      (a.) The plaintiff, as mortgagee, had no property in the mortgaged premises. His interest under the mortgage was a mere chattel interest. (Jackson v. Willard, 4 John. 40, and cases cited in note (a.) Jackson v. Bronson, 19 id. 325. Wilson v. Troup, 2 Cowen, 195.) The plaintiff, as mortgagee, could not convey or transfer his rights and interests Under the mortgage to a third person, distinct from the debt which it was intended to secure. (Aymar v. Bill, 5 John. Ch. 570. Waring v. Smyth, 2 Barb. Ch. 128.) The interest of the plaintiff under the mortgage was not liable to sale upon execution. (Jackson v. Willard, supra. Eaton v. Whiting, 3 Pick. 484. Blanchard v. Colburn, 16 Mass. Rep. 345.) The legal estate in the mortgaged premises was in the mortgagor. (Hitchcock v. Harrington, 6 John. 290. Runryan v. Mersereau, 11 id. 534. Astor v. Miller, 2 Paige, 68. Roosevelt v. Heirs of Fulton, 7 Cowen, 79. Bryan v. Butts, 27 Barb. 503. Willington v. Gale, 7 Mass. R. 138.) The legal estate being in the mortgagor, he could maintain an action to recover the damages occasioned by the rioters in the destruction of the building, and the judgment delivered in favor of the mortgagee would not constitute any defense to the action.
    
      (jb.) The plaintiff’s* mortgage would indeed be a profitable one if this action could be sustained. He is now owner of the lot upon which the building stood, at a cost to him of $1000, subject, it is true, to a mortgage of $1400. The judgment reimburses the plaintiff the $1000 paid for the lot, and leaves the owner of the lot with $2000 as the net proceeds of his $500 mortgage, upon which there was only adjudged to be due the sum of $748.42.
    
      II, The court erred in refusing to dismiss the complaint upon the objections taken to the constitutionality of the act of 1855.
   By the Court, Robertson, Ch. J.

There can be no question as to the right of the plaintiff to recover whatever damages he sustained by injury to the buildings or the premises mortgaged to him, so far as he lost or was likely to lose thereby, any part of the debt secured by such mortgage, which he could otherwise recover. But if the evidence in the case can be appealed to, it would show that in the action for the sale of such mortgaged premises, the amount due the plaintiff was about seven hundred and fifty dollars, and he bought them with the buildings destroyed, subject to a prior mortgage, for the sum of one thousand dollars, which exceeded the amount due. That tended to show, and without further explanation would have shown, that as mortgagee he suffered no injury by the destruction of such buildings.

The claim made on behalf of the plaintiff is, that he became owner in fee of the land mortgaged and the buildings upon it, either by the judgment of sale thereof in the action to enforce his mortgage, or by his subsequent purchase, or by one or both, assignee of any claim of the owner for damages. It will not be contended that he derived, or could derive, any more benefit, from his purchase at the sale, than any other purchaser, at the same sale would have done. On the contrary, it was not uncommon, formerly, to insert in a decree of sale an express provision permitting-a mortgagee to become a purchaser, as a.favor.

The judgment of sale of the premises, obtained by the plaintiff, was not a foreclosure of the equity of redemption of the owner by its terms, until a sale of the premises took place under it, when, like all judicial sales, the title of all the parties in the action to the premises passed to the purchaser.

The city of New York becomes by law simply the insurer against the destruction by a riot of property brought within its limits ; for damages arising; from which, it is bound to indemnify parties interested, to the extent of their interest only ; although the injury may be done to realty, the cause of action which arises is simply personal, and does not attend upon or pass with the title to the realty. Any sale of the latter will therefore not necessarily pass the right to the former. It is not impossible that as such insurers, that city may be responsible both to an absolute owner and a mortgagee; to the former for injury to his property, and to the latter for injury to his- security. It is possible that in such case, on paying the mortgagee for his damages, which would pro tanto diminish the owner’s debt on the mortgage, the city may be entitled tq be subrogated to his rights, as regards the security for such debt) and to offset the sum so paid against a claim by the owner. But the only question in such action, brought against the city for injury- by a riot, must be the extent of damages to the plaintiff, without regard to the right of any one else.

The doctrine'of the English courts, that a mortgagee isa conditional grantee of the land, who becomes absolute owner at law on the taking effect of the condition by a failure to pay the mortgage at the time fixed, subject only to a right in a court of equity to redeem, never prevailed-in this state. - The case of Kortright v. Cady, (21 N. Y. Rep. 343,) would seem to establish the doctrine that forfeiture by failure to comply with the terms of a mortgage, gives no new right, notwithstanding statements to the contrary in earlier cases. (Peterson v. Clark, 15 John. 205. Aymar v. Bill, 5 John. Ch. 570. Cooler v. Whitney, 3 Hill, 95. Southworth v. Van Pelt, 3 Barb. 347.) It has been always held that the mortgagor was seized and owner as to all but the mortgagee, (Hitchcock v. Harrington, 6 John. 290,) and that the latter had only a chattel interest by way of security. (Jackson v. Willard, 4 John. 41. Clute v. Robison, 2 id. 595.). He is even liable in trespass to the owner, (Runryan v. Mersereau, 11 John. 534;) cannot convey or mortgage his interest in the' land, separately from the debt, (Aymar v. Bell, ubi sup;) and cannot, before forfeiture, maintain an action of trover for trées cut down by the mortgagor, although they were his property as part of the freehold. (Peterson v. Clark, ubi sup.) If the mortgage he forfeited, a stranger cannot avail himself of it as an outstanding title, for a defense. (Jackson v. Myers, 11 Wend. 535. Raynor v. Wilson, 6 Hill, 469.) If legally in possession, the mortgagee or his assignee may, it is true, maintain himself there under his mortgage in order to collect the rents and profits until it is paid, (Munroe v. Merchant, 26 Barb. 383;) and a purchaser on an execution upon a judgment obtained for. the debt, becomes an assignee of the mortgagee for the same purpose. (Jackson v. DeLancy, 13 John. 537.) And, finally, the case of Stoddard v. Hart, (23 N. Y. Rep. 556,) settled that a mortgage is only a lien on, not a title to, lands. A mortgagee, after forfeiture, has been held to be entitled to bring an action of waste against the mortgagor or any one claiming under him, where it impairs his security, and perhaps even before forfeiture, (Southworth v. Van Pelt, 3 Barb. 347; Van Pelt v. McGraw, 4 N. Y. Rep. 110;) but he must show in such action that by reason of the mortgagor’s insolvency, and the inadequate value of the premises, he has been actually damnified. (Lane v. Hitchcock, 14 John. 213. Gardner v. Heartt, 3 Denio, 232. Yates v. Joyce, 11 John. 136.) In Laflin v. Griffiths, (35 Barb. 58,) the plaintiff was mortgagee in possession, and such possession, and the right to the rents and profits of the land, was prejudiced by taking away the fixtures ; his subsequent purchase of the land and merger of the mortgage were held merely not to waive or take away his right of action.

In the present case, the plaintiff was not in possession, and did not establish any ultimate injury to the security for his debt, by the acts of the rioters in question ; he therefore was not entitled to recover.

The exceptions being well taken, the verdict must therefore be set aside, and the case go back for a new trial, with costs to abide the event.  