Page:North Dakota Reports (vol. 48).pdf/302

 payable clause and by the plaintiff turned over to the defendants Schultz and Toppins, should be allowed as a credit on plaintiff’s demand in this action, and that judgment should be rendered in his favor only for the balance due upon said $1,500 mortgage, after the allowance of such credit. The trial court overruled the contention of the defendant bank, and made findings and ordered judgment in favor of the plaintiff for the full amount demanded. The bank has appealed from the judgment so entered, and the sole question presented on this appeal is whether, under the facts here involved, the contention of the defendant bank relating to the moneys paid to the plaintiff under the insurance company is correct or incorrect.

After a careful consideration of the question we are of the opinion that the contention of the defendant bank cannot be sustained. We are not dealing here with a case where the holder of the second mortgage has demanded of the holder of the first mortgage that he apply certain payments on such first mortgage or enforce the same against certain other property than that covered by the second mortgagé so as to leave the holder of the second mortgage in a better position to enforce his claim. In this case, the appellant has no claim to enforce. Its claim has been extinguished, and it has succeeded to the interest of the mortgagors in the property on which plaintiff holds a mortgage. According to the undisputed testimony, the defendant bank knew that the plaintiff did not in fact received and apply the moneys paid by the insurance company. Having such knowledge, it did in January, 1918, pay to the plaintiff the full amount of interest due upon the mortgage according to its original tenor and effect. In other words, the bank paid interest upon the theory, and in effect recognized that there was due to the plaintiff the full principal sum named in the mortgage, namely, $1,500. Shortly thereafter, namely in April, 1918, the defendant bank: purchased the premises at the foreclosure sale, and bid therefor the full amount then due on its mortgage, with interest and costs of sale. As a result, the mortgage of the defendant bank was wholly extinguished (§ 6721, C. L. 1913; Harvison v. Griffin, 32 N. D. 188, 155 N. W. 655), and when the sheriff’s deed was issued to the defendant it became the owner of the premises, and as such it stands precisely in the same position as any other person who might have purchased at the foreclosure sale. As was said by this court in Harvison v. Griffin, 32 N. D. 188, 196-198, 155 N. W. 655, 657:

“The fact that the statute gives them (the mortgagees) the right to