Page:Federal Reporter, 1st Series, Volume 7.djvu/679

 IK BE WOODS. 667 �«orroborated by any otfaer circumstance, and the continiied possession of the notes by Lynch after the giving of the mortga^e is not explained. The possession of the notes is prima fade evidence of the debt, and it is not overcome by this conflicting testimony. Moreover, the memory of the bankrupt appears to conf used, and his testimony less credible than that of Lynch. �In respect to the point on which the register expungedi the proof of the debt secured by the chattel mortgages, I think the bankrupt is not entitled to credit on the debt for more than the value of the property, if that value was less than the amount of the mortgages, It seems to me unrea- Bonable to hold that because the mortgagee bas appropriated to his own use the property mortgaged, the equity in which he has purchased, he should be charged with any greater sum than its value. This is all he would be liable for in case of a tortious conversion. What he sold it for is indeed no test of value, and unless there was an agreement between the parties that he should sell it and apply the proceeds towards satisfaction of the debt, there is no propriety in stating the credit at $5,000, the amount of the proceeds. It does not appear that the property was worth $16,000, the amount of the two mortgages. If there were a merger of Lynch's inter- est as mortgagee in his title purchased under the sheriff's sale, as is argued by the assignee, I do not perceive that it would follow that the debt has been satisfied in whole or in part. It would seem that the merger, if absolute, would only extinguish the security, leaving the debt still wholly unpaid, and making Lynch the absolute owner of the property. But in such a case as this justice, perhaps, requires that there should be no absolute merger. What the mortgagee bought was the equity of redemption, or Wood's title, subject to the the mortgages ; at least, this is what anybody else would have bought, and it may be presumed that this is what was sold by the sherifif, and that the price given was based upon the property being sold subject to the mortgages. This being bo, itis equitable that Lynch should be held to haveobtained no greater interest by his purohase than any other purchaser ��� �