there cannot be set off in equity in an action to foreclose a mortgage, a claim of unliquidated damages arising out of a tort such as damages for the conversion of corporate stock by the mortgagee to his own use, such stock having been delivered to him for a specific purpose.

§ 1899. Breach of agreement to sell enough of mortgaged property to pay debt and return balance.-Where a mortgagee agrees to take possession of the mortgaged property and to sell enough of the same at retail, at not less than its cost price, to pay the debt and costs of sale and to return the balance to the mortgagor, he will be liable for a breach of his agreement, where he sells the balance at auction, for the difference between what he received for the property at such sale and the market value of the property, which would have been received by the mortgagor had the mortgagee complied with his contract.26

§ 1900. Agreement by mortgagee to secure patronage, etc. In a case in Georgia it has been decided that where parties, who have given a mortgage to secure the price of a livery stable, claim that the mortgagee has agreed to use his influence to secure them patronage, it is proper to charge the jury that if plaintiff did not comply with the contract, but on the contrary withdrew his own patronage from defendants and used his influence to dissuade others from extending their patronage and injury came to them, it should allow them such damage as they show by evidence that they have sustained."

§ 1901. Nominal damages-Agreement to procure insurance. When a mortgagee is under an agreement to keep the mortgaged property insured in such sums as he shall "deem proper," it is decided that for failure to insure one of several houses covered by the mortgage and which was destroyed by fire there can only be a recovery at most of nominal damages by the mortgagor. "If under the contract it was the duty of

25 Cotton v. Scott, 97 Ala. 447; 12 So. 65.

26 Kohn v. Dravis, 94 Fed. 288; 36 C. C. A. 253.

27 Chambers v. Walker, 80 Ga. 641;

6 S. E. 165.

28 Keith v. Crump, 22 Ind. App. 364; 53 N. E. 839. See sec. 1473 herein.

appellee to insure the destroyed property it was wholly within his discretion as to what the amount should be. It was also discretionary with appellee as to how the insurance should be distributed. In the case at bar the contract is not aided by the allegations of the complaint. Taking the facts as stated and giving to them their full legal effect, they present no basis upon which a court or jury could assess damages in any certain amount."

29

§ 1902. Deterioration of property in mortgagee's hands. -Where a vessel is taken possession of by a mortgagee under a power to sell and without making any effort to sell the same he permits it to deteriorate and to be lost, it has been decided that he will be liable in damages to the value of the vessel at the time he took possession. 30

31

32

§ 1903. In actions between mortgagees.-In an action against the first mortgagee by the second mortgagee for the conversion of the mortgaged property the measure of damages is the value of the property converted up to the amount of the debt due, less such amount as may be due on the first mortgage. And it has been decided that, though the mortgaged property may not be of sufficient value to satisfy prior mortgages, yet an action may be maintained by the holder of a third mortgage for the conversion of the mortgaged property. But where personal property in the possession of a second mortgagee or his grantee is replevied by the holder of the first mortgage damages for its detention are not recoverable, such possession being rightful. Again, in an action by a second mortgagee, against a first mortgagee, claiming an account of all moneys recovered by the latter on account of a sale by the auctioneer of the first mortgagee, by whom there was a mistake made in the description of the property, it has been decided that there may be a recovery of the difference between the price which was

33

29 Per Henley, J.

956. Examine Citizens Coal Co. v.

30 Kennedy v. Nealis, 1 N. B. Eq. Stanley, 6 Colo. App. 181. 455.

31 Clendening v. Hawk, 8 N. D. 419; 79 N. W. 878; Lovejoy v. Merchants State Bank, 5 N. D. 623; 67 N. W.

32 Stimmel v. Swan, 17 Misc. R. (N. Y.) 354; 39 N. Y. Supp. 1074. 33 Nichols v. Sheldon Bank, 98 Iowa, 603; 67 N. W. 582.

realized on such sale and what would have been realized if the property had been properly described and not the sum allowed by the first mortgagee to the purchaser as compensation."

35

§ 1904. Breach of agreement to assign a mortgage.-For the breach of an absolute agreement on the part of a mortgagee to assign a mortgage, there may be a recovery of the amount of money which has been paid to the mortgagee as a consideration for such assignment. And where a vendor of land agreed to assign the bond and mortgage securing the remainder of the purchase price, after a certain amount had been paid, to one who had rendered services on the sale, the measure of damages for a breach of such agreement was declared to be the value of the same after the vendor had received the amount of money he was entitled to retain under the contract.

§ 1905. Injury to mortgaged property.-Damages to the extent of the diminution of the security may be recovered by the mortgagee in an action against one who has wrongfully impaired the same. And where the mortgagee of an animal has become the legal owner of the same by default in the payment of the mortgage debt he may, in an action against one for negligently causing the animal's death after such time, recover its full value. So again for the removal of buildings from the mortgaged premises the mortgagee may recover as damages the difference between the value of the lands with and without such buildings, provided such difference does not exceed the balance due on the mortgage debt after the remainder of the mortgaged property has been applied.*

§ 1906. Value of use for detention.-The value of the use of property may be recovered by the owner thereof, where he is entitled to its use, as special damages for its detention,

34 Tomlinson v. Luce (C. A.), L. R. 43 Ch. D. 191.

35 Stiles v. Benjamin, 92 Hun (N. Y.), 102; 72 N. Y. St. R. 336; 36 N. Y. Supp. 910.

36 Hoffeld v. Zenzins, 68 Hun (N. Y.), 313; 52 N. Y. St. R. 105; 22 N. Y. Supp. 1102.

37 Benton v. McCord, 96 Ga. 393; 23 S. E. 392. See Cory v. Silcox, 6 Ind. 39; Jackson v. Turrell, 39 N. J. L. 339; Van Pelt v. McGraw, 4 N. Y. 110.

38

Wylie v. Ohio River &c. R. Co., 48 S. C. 405; 26 S. E. 676.

39 Heath v. Haile, 45 S. C. 642; 24 S. E. 300,

but such a recovery cannot be had by a mortgagee, after default in the mortgage, he having a right to possession only for the purpose of foreclosure or sale under the mortgage to satisfy the debt.40

§ 1907. Breach of agreement inducing surrender of mortgage. Where a chattel mortgage on corporation property is surrendered on agreement of the bank to renew the corporation paper and there is a breach of such agreement, as a result of which the insolvency of the company is precipitated so that but a small sum is saved for creditors, the damages will not be limited to those which are merely nominal, but there may be a recovery of the actual damages sustained."

42

§ 1908. Breach of covenant to assume and pay mortgage. -If the grantee of premises covenants to assume a mortgage thereon and to pay the same he will be liable for a breach of his agreement for the amount of the debt secured by the mortgage. And the grantee of premises may recover from a third party, who has assumed the mortgage on the premises, the consideration paid, together with interest and costs, where he has been evicted by the holder of the mortgage. Again, where a chattel mortgage, given to secure the payment of firm debts by one of the partners, is released by the person liable for such debts on the agreement by a third person to pay the same, the measure of damages for a breach of such agreement by failure to pay one of the debts is the amount of the debt remaining unpaid."

43

§ 1909. Foreclosure of void mortgage-Injury to business-Evidence.-Where damages for the breaking up of plaintiff's business are claimed in an action of trespass for the foreclosure of a void chattel mortgage, evidence has been de

40 Thompson v. Scheid, 39 Minn. | Sanders, 152 Mass. 108; 24 N. E. 102; 38 N. W. 801. 1079; 8 L. R. A. 315; 23 Am. St. Rep. 804.

41 Bank of Commerce v. Bright, 77 Fed. 949; 23 C. C. A. 586; 39 U. S. App. 483; 14 B'nk'g L. J. 143.

42 Locke v. Homer, 131 Mass. 93; 41 Am. Rep. 199. See also Rice v.

43 Pearson v. Ford, 1 Kan. App. 580; 42 Pac. 257.

clared admissible as to the receipts and disbursements for each day during the two weeks previous to the wrong complained of, it being necessary in determining the amount of damages to understand the nature and amount of business carried on at the time the property was taken.

45

§ 1910. Damages against purchaser of mortgaged chattels. -In an action, by the mortgagee against a purchaser of mortgaged chattels from the mortgagor, for conversion, the measure of damages has been held to be the amount of the debt and interest not in excess of the value of the chattels.46 But in a case in New York it has been decided that, in an action by the mortgagee to recover the value of the chattels from a purchaser at a sale under execution against a third person, the full value of such property may be recovered, though it is in excess of such sum as may be due on the mortgage."

§ 1911. Placing satisfaction on record without authority. -For the placing on record of the satisfaction of a mortgage without any authority, the recovery against the person who has so acted will be limited to nominal damages only, where such act does not preclude the mortgagee from foreclosing and has caused him no injury.

48

§ 1912. Granting by mortgagor of right of way for railroad-Recovery by purchaser at foreclosure.—Where a right of way is granted to a railroad company by the mortgagor without the consent of the mortgagee, and without any condemnation proceedings, the interest of the latter is not affected and it is decided that there may be a recovery by either the purchaser at the foreclosure sale under the mortgage or his grantee of a compensation therefor, but not of damages incident to the entry before title was acquired.

45 Hangen v. Hachemeister, 114 N. Y. 566, aff'g 21 J. & S. 532.

46 Seibold v. Rogers, 110 Ala. 438; 18 So. 312. Examine West v. White, 165 Mass. 258; 43 N. E. 103.

47 Bigelow v. Goble, 9 App. Div. (N. Y.) 391; 41 N. Y. Supp. 299.

48 Wylly v. Quigsby, 11 S. D. 491; 78 N. W. 957, aff'g on reh'g 10 S. D. 13; 70 N. W. 1049.

49 Fernie v. Chic. R. I. & P. Ry. Co. (Kan. App. 1899) 58 Pac. 492.