This section is from the book "The Law Of Real Property and Other Interests In Land", by Herbert Thorn Dike Tiffany. Also available from Amazon: A Treatise on the Modern Law of Real Property and Other Interests in Land .
24. Pimm v. Greville, 6 Espin. 95; Hunter v. Le Conte, 6 Cow. (.N. Y.) 729. See forms of pleading to an avowry in 3 Chitty. Pleading (5th Ed) 1192, 1229; Archbold, Landlord & Ten. 297.
Trover or detinue,25 a doctrine which, in conjunction with the asserted rule in regard to mortgages which we are now considering, has been made the basis in this country of several decisions that after a tender the pledgor is entitled to the return of the property without paying the debt.26
It is sometimes suggested that if a tender does not effect a discharge of the lien, the mortgage creditor may, by refusing a tender, and so keeping the land subject to the incumbrance, seriously hamper the owner of the land, the mortgagor or his transferee, in subsequently dealing with the land. But it is conceded, even by courts which regard the refusal of a tender as sufficient to extinguish the mortgage for purposes of a foreclosure, that the refusal has no such effect for the purpose of a suit by the mortgagor or his transferee to have the mortgage cancelled or discharged, it being necessary, it is said, for one coming into equity to be relieved from the mortgage, to do equity by paying the debt secured.27 And this being so, it appears that the mortgage creditor can, by merely refraining from seeking foreclosure, and thus avoiding an the fundamental principles involved, than the use of the expressions "merge" and merger, is the statement usually found, that the mortgage is merged, vel non. As we have before seen, the debt is the principal thing, and the mortgage is merely an incident, and the question is, not whether the mortgage is merged, but whether the acquisition by one person of both the mortgaged land and the debt secured by the mortgage has the effect of extinguishing or merging the debt. If the debt is extinguished under such circumstances, the mortgage lien is necessarily also extinguished, while if the debt remains the mortgage lien also remains. Even in states which adhere to the title theory of a mortgage, the mere acquisition, by the owner of the land, of the legal title of the mortgagee, without the debt, could not extinguish the debt, nor affect the creditor's right to proceed against the land in equity, while, on the other hand, if the owner of the land acquires the debt, with its incidental lien, the fact that he does not acquire the legal title, this being still outstanding in the mortgagee, could not, it is conceived, prevent the debt and the lien being extinguished, if the owner of the debt and of the land so intended and desired. And so, when the legal title is vested in one person as security for a debt due another person, as in the case of a deed of trust to secure, a convevance of the land by the debtor to the creditor, while it cannot of itself affect the legal title of the trustee,34 will, it seems, operate to merge the debt, if such result appears to accord with the interest or intention of the creditor.35 The mere fact that the legal title to the land is outstanding can not exclude the right of the creditor to regard the debt as discharged.
25. Ratcliff v. Davies, Cro. Jac. 244, Yelv. 179; Coggs v. Bernard, 2 Ld. Raym. 909; Ryall v. Rowles. 1 Atk. 165. See editorial note in 10 Columbia Law Rev. at p. 252.
26. Loughborough v. McNevin, 74 Cal. 250, 5 Am. St. Rep. 435, 14 Pac. 369, 15 Pac. 773; Latta v. Tutton, 122 Cal. 279, 68 Am. St. Rep. 30, 54 Pac. 844; Norton v. Baxter, 41 Minn. .146. 4 L. R. A. 305, 16 Am. St. Rep. 679, 42 N. W. 865; Ball v. Stanley, 5 Yerg. (Tenn.) 199, 26 Am. Dec. 263; Hyams v. Bamberger, 10 Utah, 3, 2C Pac. 202; Mitchell v. Roberts, 6 McCrary (U. S.) 425. But that in an action for damages by the pledgor in such case the amount of recovery must be reduced by the amount of the debt, see Hancock v. Franklin Insurance Co., 114 Mass. 155; Cass v. Higenbot-am, 100 N. Y. 248, 252, 3 N. E. 189 (dictum); De Clark v. Bell, 10 Wyo. 1, 65 Pac. 852 (dictum). 27. Larsen v. Breene, 12 Colo. 480, 21 Pac. 498; Cowles v. Marble, 37 Mich. 158; Tuthill v. Morris, 81 N. Y. 94; Werner v. Tuch, 127 N. Y. 217, 24 Am. St. Rep. 443, 27 N. E. 845; Nelson v. Loder, 132 N. Y. 288, 30 N. E. 369; Murray v O'Brien, 56 Wash. 361, 105 Pac. 480. A similar view has been taken as regards a writ of entry by the mortgagor, Bailey v. Met-calf, 6 N. H. 156.
In one or two of the states in which it has been decided that a tender after maturity extinguishes the mortgage lien for the purpose of foreclosure, the possible hardship resulting to a creditor who refuses the tender has been relieved by decisions that to have this effect the refusal of the tender must have been in bad faith or at least without adequate excuse.28 This affords relief against possible hardship upon a creditor who refuses the tender in good faith, but introduces a consideration, that of the creditor's intention, which has no place in the law of tender generally. Without such qualification of the rule, there is an obvious possibility of hardship upon a mortgage creditor who in good faith refuses the tender, or perhaps thoughtlessly seeks, by reason of a pressure of business or otherwise, to postpone until the next day a calculation and adjustment of the amount due. We find no English decision or judicial assertion, since the time of Coke, to the effect that the tender of the debt extinguishes the mortgage, and the existing decisions that it operates to deprive the creditor of subsequently accruing interest and costs, without any suggestion that it may have
28. Waldron v. Murphy, 40 Mich. 668; Renard v. Clark, 91 Mich. 1, 30 Am. St. Rep. 458; Union Mut. Life Ins. Co. v. Union Mills Plaster Co., 37 Fed. 286 (Michigan); Reynolds v. Price, 88 S. C. 525, 71 S. E. 51; Easton v. Littooy, 91 Wash. 648, 158 Pac. 531; Weigell v. Gregg, 161 Wis. 413, L. R. A. 1916B, 856, 54 N. W. 645. Contra, Campbell v. Society, 43 Mo. App. 23. In Harris v. Jex, 55 N. Y. 421, the refusal of a tender was held not to extinguish the mortgage, when based upon the decision in Hepburn v. Griswold. 8 Wall. (U. S.) 603, 19 L. Ed. 513, that the statutes making United States notes legal tender in payment of pre-existing debts were unconstitutional, the tender having been made before the latter decision was overruled by Knox v. Lee, 12 Wall. (U. S.) 457, 20 L. Ed. 287. And in Tuthill v. Morris, 81 N. Y. 94, there is a dictum that the tender, to extinguish the mortgage, must have been "deliba further operation,29 would seem to indicate that it has in that country no such effect.