Brooks & Berry v. Hubbard

The claimant took a mortgage from the defendant, an owner of land condemned for highway purposes, under proceedings begun by the City of Montpelier. It furnished the money to pay a prior mortgage to the Montpelier Savings Bank & Trust Company and took the mortgage under which it now claims for a greater sum than that paid the Trust Company. Subsequently this suit was brought and the question presented is whether a mortgagee of land condemned for highway purposes by proceedings begun anterior to the mortgage, and not made a party to the condemnation proceedings, *123can hold the damages awarded, against a creditor of the landowner who attaches the fund by the trustee process. We do not put the right of the claimant upon the ground of subrogation and it is true it took its conveyance Us pendens. Taking lis pendens, only affected the condemnation proceedings. The claimant took an interest in the land subject to them, but it could not be deprived of the interest which it acquired by virtue of its deeds, by an act of the mortgagor, nor of any of his creditors. The effect of the mortgage deed was to convey to the claimant the defendant’s interest in the land, and the right to any damages thereafter awarded, passed with the land as an incident thereto; the mortgagee would hold the damages as security for the mortgage debt in the same manner'that it held the land. Payment by the City of Montpelier to the mortgagor would not affect the right of the mortgagee to receive the land damages — certainly not after notice of the mortgage. Wade v. Hennessy, 55 Vt. 207. The claimant having the right in equity and at law to hold the fund as against the mortgagor, and against the City of Montpelier which took the land for highway purposes, can- hold it as against a creditor of the mortgagor attaching the fund by trustee process, subsequent to the mortgage of the claimant.

The pro forma judgment of the City Court is* reversed and judgment that the claimant is entitled to the funds in the hands of the trustee and that the trustee is discharged... The claimant to recover costs in this court from the plaintiffs.