7 Mich. 36 | Mich. | 1859
The first question presented in this case is the right of complainant to sue in this state. It is contended by the counsel for defendants that complainant, being a receiver appointed by the Court of Chancery of the state of New York, can not be recognized as such, nor be allowed to sue in his official capacity, beyond the limits of the state of New York, by whose court he was appointed.
Where the rights of a receiver, appointed in another state, depend wholly upon the effect to be given to the judgments or decrees of the court making the appointment, the Aveight of American authority is, doubtless, opposed to his right to sue in another state; and this is certainly so, both on principle and authority, in reference to real property; and equally so as to personal property and rights in action, where the rights of creditors in the latter state
Because the comity of states has not, in such cases, been carried so far as to admit the jurisdiction of the courts of one state to operate directly, by their decrees or judgments, upon real property situated in another, nor to affect personal property or rights in action to the prejudice of creditors in the latter state.
In the case before us there are no conflicting claims of creditors of different states; no domestic creditors whose rights are to be prejudiced.
But, as the question is one affecting real estate situated here, so far as the rights of the complainant, touching this property, depend upon the power of the courts of New York to operate directly upon the property, his rights could not be recognized in this state; and such must have been the result in this case, if the receiver’s rights had been left to depend upon the decree or order of the Court of Chancery of New York, and no assignment had been made by Fetterman to complainant. But here is an assignment in due form, from Fetterman, the mortgagee, to the complainant, duly executed and recorded in the proper register’s ' office, and in all respects in full compliance with our laws, and sufficient to pass real estate here. And should w.e even reject entirely all that appears on the face of the assignment, touching the proceedings in the New York court, and the appointment of a receiver, still the assignment is sufficiently full and complete to transfer the property in the mortgage to the complainant: and such must .be its effect, unless it can be held void for the single reason that, from the recitals and other parts of the instrument, it appears to have been made for the purpose of carrying into effect an order of the Court of Chancery of New York appointing a receiver of the property and effects of the assignor. If it is to be treated as void for this reason, it must be on the ground that it was procured by wrong
Now, I am not prepared to go this length; and it is to be hoped the time may never come, when the courts of one of the states of the Union shall so far forget the comity due to a sister state, as to treat the acts of parties, done under the orders of its courts, as void on any such grounds; especially when the order is made to operate upon a citizen or resident of the state, and clearly within the jurisdiction of the court making the order. If the act be such as in equity and good conscience the party ought to have performed, certainly no wrong has been done; if it were not, it is but fair to presume the court would not have ordered it. The courts of a sister state, in a cause and between parties within their jurisdiction, are entitled to so much respect, at least, that we should not, without proof, presume them guilty of wrong and oppression.
It is true, the courts of one state have no power to make their judgments and decrees operate directly upon property in another; but the primary operation of chancery jurisdiction is in personam; it acts upon the conscience of the party, and, by its coercive power over the person of a defendant, will, in many cases, compel him to perform such acts, and to execute such instruments, as may be necessary to do justice to the opposite party; and this though such acts and instruments are to operate upon property beyond the jurisdiction of the court. In fact, it is mainly when the property is beyond the jurisdiction that an order for a conveyance by a defendant becomes really necessary; as the court may, by the direct effect of the decree, or by its process, transfer property within its jurisdiction. And if the acts and conveyances performed or executed by the party, under the order or decree of the court, were not to operate, ex proprio vigore, to the same extent as if done without the coercive action of the court, such acts and conveyances
The same principle, I think, is very clearly admitted in Clark v. Clark, 17 How. 315; the case principally relied upon by defendants counsel as shoydng that the receiver can not sue out of the jurisdiction. The court very clearly admit, I think, that, if the receiver in that case had ob-. tained an assignment from the debtor, by means of the coercive power of the New York Court of Chancery, he might have maintained a suit under the assignment in another jurisdiction; though, in such case, it seems to be implied, he would not strictly be suing officially. — See especially pp. 332 and 339.
It is very true, that if a. defendant In such a case, in spite of the coercive measures of the court, should wholly refuse to make the conveyance, the court would be powerless as to property out of the jurisdiction; but this does not alter the effect of the conveyance when the defendant submits, and makes it.
The result of these principles, in the present case, is, that the complainant may sue in this state, as he has done, not strictly in his official character as receiver, by virtue of his appointment by the court of New York, but as assignee, holding the legal interest in the property assigned, by virtue of the assignment of Fetterman; that his designation as receiver may be treated as clescriptio personae-, that his rights depend upon the assignment, and not upon the decree or order of the court; that it was not necea-*
The next and most important question in the case is, what rights did Graydon acquire, and what does he now hold, under the assignment?
To determine this, it becomes necessary to consider the original bond and mortgage, and the various assignments of the same, and the nature of the transactions connected with them, both before and after the assignment to Graydon. The original mortgage from Ketcham to Fetterman Avas executed May 3d, 1836, on lands in this state, conditioned for the payment of §8000, in eight equal annual instalments, according to the condition of the bond referred to, by Avhich interest Avas also payable on the instalments as they became due. The mortgage contained the usual full power of sale. On the 15th July, 1836, §3500 had been paid upon the bond, long prior to the assignment, and before any
On the first day of March, 1838, Fetterman, the mortgagee, makes the assignment to Robert- G. Cruttenden, as a security for §1200, therein mentioned, with costs and charges of collection.
Of this assignment, it is proper to say here, that it speaks of future advances; yet Cruttenden, who has allowed the bill to be taken pro oonfesso against him, and who was released by, and sworn on the part of, defendants, says, positively, that no further advances were made; though he states, from recollection after a lapse of some seventeen years, that the sum was something over §2000; saying he does not recollect the precise amount. We must, therefore, hold that no further advances were made, and that it was, in fact, a security for only the §1200 and interest, with costs and charges of collection; and there being no proof of any such costs or expenses, it must be considered a security for §1200 only. It is further to be noticed, that, though the debt of Fetterman, secured by this assignment, became due May 1st, 1838, nothing could become due on the mortgage till May 3d, 1840.
There is, therefore, no ground for contending that any forfeiture of Fetterman’s rights in the balance of the mortgage was intended, if Fetterman should fail to pay his debt to Cruttenden when due, May 1st, 1838 ; since the assignment expressly declares, in case- said Cruttenden shall collect and receive the monies due (none were yet due), or to become due, on said mortgage, he shall, after retaining the sum which shall be due to him from Fetter-man, with interest, and his reasonable costs and charges, /.pay the surplus to Fetterman. This is a plain and explicit provision that such surplus should belong to Fetterman,
This assignment was annexed to the bond and mortgage, and passed with them into the hands of Bishop, Jones, and Bolles, the successive assignees. It is the only written instrument executed by Fetterman, under which any claim to the mortgage is set up by any of the defendants; though it is claimed that the subsequent conduct and declarations of Fetterman, or of couqfiainant, or both, had the effect to convey to the defendants, or some of them, the remaining interest of Fetterman; a question which will be considered in its proper place.
It is claimed, and admitted on both sides, that this assignment by Fetterman to Cruttenden, constituted a mortgage of the Ketcham bond and mortgage, making Fetter-man mortgagor and Cruttenden mortgagee of Fetterman’s
It is true, it was in the nature of a mortgage; and, as to any amount beyond Fetterman’s debt, it was also a direct trust. But here the question is made, what was the interest of Fetterman, as mortgagee, before and at the time of the assignment?
It is claimed by complainant, that Fetterman’s intqrcst, as mortgagee, was an estate or interest in the lands, or at least, that it so far savored of the realty, that, for all . purposes of redemption, it must be treated as real estate; and that Fetterman’s right of redemption is to be governed by substantially the same rules as would apply to the redemption of the land by the original mortgagor.
Defendants’ counsel insist that Fetterman’s interest or estate in the mortgage was but a chose in action — a chattel interest — in short, personal property ; and that his mortgage of that interest to Cruttenden is to be treated as a mortgage of personal property — substantially as a chattel mortgage; that, therefore, the-rights of Fetterman in this bond and mortgage became forfeited by the non-payment of the debt to Cruttenden,. May 1st, 1838, and thereupon vested absolutely in Cruttenden; and that he might sell and dispose of the whole mortgage at his pleasure. But if we admit the interest here mortgaged to be personal property, the consequence here deduced by defendants’ counsel could not follow, in this case, for two reasons: First, If non-
payment of Cruttenden’s claim at the day might be treated as a forfeiture, had-no provision been inserted against it, there can be no such forfeiture where the parties have expressly provided against it; and here is an express provision what shall be the rights of -the parties after the day of payment. Nothing was due upon the original mortgage till long after the day; and it is expressly stipulated in this assignment that any surplus of the mortgage monies, which Cruttenden may collect beyond' his own debt,. shall be paid
The law of mortgages has, for many years, been undergoing a transition, effected partly by the decisions of the courts, and partly by legislation; the interest of the mortgagee being recognized as real estate for some purposes, and as personal for others; losing more and more the incidents of the former, and gaining more and more those of
But, though the courts of some of the states have gone so far as to declare the interest of the mortgagee of land to be a mere chattel interest, a chose in action, mere personalty for most, and some of them, perhaps, for all purposes except that of redemption, yet the same courts, in every instance, so far as I can discover, where the real estate mortgage has itself been mortgaged as security for a debt, and the question has arisen upon the rights of the mortgagee of the original mortgage to redeem, have recognized his right to redeem the mortgage to the same extent, and as resting substantially upon the same principle, as the right of the original mortgagor to redeem the land. In other words, they have treated the mortgage as the land., for the purposes of redemption. Chancellor Kent so treated it in the case of Henry v. Davis, 7 Johns. Ch. 40. "This was in 1823; and yet the Supreme Court of that state had held, in 1814, in the case of Runyan v. Mersereau, 11 Johns. 534, that a mortgage of real estate was but a security for a debt, and that the mortgagee had but a chattel interest; and this in an action of trespass by the plaintiff, who was a purchaser from the mortgagor, and against a defendant, who pleaded a license to enter given by the mortgagee.
This case of Henry v. Davis was tmaniinously affirmed by the Court of Errors (Clark v. Henry), 2 Cow. 324. Neither the Chancellor nor the Court of Errors discuss the question, whether the interest of the mortgagee is real or perspnal estate; but the question of redemption is treated as standing xxpon the same ground as if it were the real estate. In that case, as in this, the bond and mortgage had been cancelled by the assignee, and the bill was brought to redeem the mortgage itself, and to foreclose it, as in this case.
It is true, the Chancellor seems to base his decision on the ground that the legal estate was vested in the mortgagee; while, for most purposes, it had already been decided to be but a chattel interest. But he is speaking of the effect of a foreclosure, and the rights of the mortgagor and mortgagee, as connected with the foreclosure. And he was. certainly within the uniform current of decisions in.holding that, as between the mortgagor and mortgagee, in a direct-proceeding to foreclose the mortgage, or to obtain possession of the land, by the mortgagee, the latter is considered as the real owner of the fee, subject only to the equity of redemption in the mortgagor.
Indeed the whole theory of a bill for foreclosure or redemption — for they are correlative and dependant- — -was based ixpon a clear admission of the legal estate in the mortgagee; and it is difficult to perceive any other, ground or theory upon which a bill for a sto'iet foreclosure could be sustained.
This was all consistent enough while the law recognised the mortgagee as the owner, and gave the right to possession, as based upon the legal estate; and, in form, the proceeding still remains the same in this state, and most others, where the mortgagee has been stripped of the last substantial incident of the legal estate. But the question may here
This Avas a case similar to the former in all its features, ■except that, in the latter case, the mortgage had been foreclosed in equity, and the mortgagee of the original mortgage (avIio had mortgaged it as security) had been made a party complainant; and the assignee (mortgagee of the mortgage) AATho had purchased in the property, had sold part of it, for Avhich he had received the money. The court held that this foreclosure did not affect the original mortgagee’s right of redemption; that "this right attached both to the land remaining unsold in the hands of the purchaser, and to the money he had realized on that sold, after deducting the debt Avhich the mortgage was assigned to secure. — And see Sweet v. Van Wyckc, 3 Barb. Ch. 647; and Norton v. Warner, 3 Edw. Ch. 106, Avhere the same right of redemption is recognised. In Cutts v. York Manufacturing Company, 18 Me. R. 201, a similar vieAV Avas taken of a mortgage of a mortgage, and the right of redemption placed upon the same ground as the redemption of real estate. — See also Soloman v. Wilson, 1 Wharf. 241.
But the correctness of the principles laid down in the case of Slee v. Manhattan Co. has been fully recognized by the Supreme Court of this state in the case of Weed v. Snow,
It is, perhaps, true that this was not actually necessary to the decision, in the ease before the court, as the case was decided upon a special agreement which was'held to take it out of the rules thus laid down. But the case shows the view entertained by our courts, as to the interest of the mortgagee, and the right of redemption, in such, a- case, as governed by the laws of this state prior to the statute of 1843. See also as to such interest jn'ior to the statute,— Stevens v. Brown, Wal. Ch. 41.
Whatever, therefore, might be our views, of the interest of a mortgagee, or his right to redeem, in a case like this, under the present laws, we do not - feel at liberty to disregard these, decisions in the case of a mortgage executed pri.or to, the. act of 1843. We must, therefore, place Fetter’ man’s right to redeem the mortgage created by his assignment, upon, the same footing- as that of a mortgagor of real estate.
We are next to enquire whether this right of redemption has been- cut off by any subsequent acts or declarations of Fetterman, or of the complainant, to Avhom his rights have been transferred. And here it may be.proper to remark, gen,-.
First, then, as to the declarations of Fetterman at the time of the assignment from Cruttenden to Bishop, which, though after that to Graydon, was before the latter was recorded; and no notice to Bishop is shown. Both these gentlemen state that Fetterman was present at the time. Bishop says it was made at Fetterman’s request; Cruttenden says he (Fetterman) assented to it.
Both Bishop and Cruttenden would seem to carry the idea that something was due from Fetterman to Bishop, and that Fetterman said, in substance, that if Bishop could realize enough from it to satisfy what he was owing to Cruttenden and Bishop, he would be satisfied. But neither of them state how or when he became so indebted, nor what was the amount; and the testimony of Bishop upon this subject is certainly very loose and unsatisfactory, and has the appearance of being made so by design. If Fetterman was in fact indebted to him, and the mortgage was to be held ' by him for that, as well as Cruttenden’s debt, is it likely
We now come to the declarations and conduct of Gray-don, when Bishop was negotiating with Jones for the transfer to the latter. Bishop says that, some months after the assignment to him, he heard, incidentally, that complainant had been appointed receiver of Fetterman ; that Jones called on him (Bishop) afterwards, and proposed to buy the bond and mortgage; that hb (Bishop) told Jones what he had heard; they then proposed to go, and did go to New York to see Graydon. Jones says lie saw the paper Bishop had before he Avent to NeAV York; ho knew, therefore the nature of the assignment of Fetterman to Cruttenden, Avhich Avas annexed.
The interview with Graydon is thus stated by Jones: “ Mr.' Bishop said to Mr. Graydon, I want my money in this matter — meaning the bond and mortgage AAdiich he then held in his hand. Mr. Graydon replied, that he Avould not advance any' money on it; so far as his interest was concerned— Ms personal interest — it was nominal; those Michigan secu
Bishop’s account of the interview is, in, substance, the same as stated by Jones, except that Bishop says he (Gray-don) “declined to have anything to do with it; said he toas merely nominal receiver, and would take no responsibility on the subject. This, as relates to being “a mere nominal receiver,” is entirely different from the statement of Jones, whose interest, if either, would be more affected by the statement, and who says Graydon said “his personal interest was merely nominal,” which is much more likely to be true, as more consistent with the circumstances.
This shows the danger of relying on such testimony of conversations after so many years.
I think it quite evident, from the whole tenor of the conversation, with all the circumstances, that when Graydon assented to Bishop’s selling his mortgage, he, and Bishop, and Jones must all have understood that he assented only to the sale of Bishop’s interest in it, which Bishop had a right to sell. Graydon Avas a receiver — a mere trustee: both parties kneAV the fact, and they must, therefore, have known that he could not thus, without consideration, abandon the interest of those he represented, without committing a gross fraud, to which they, under such circumstances,
It only remains to inquire whether the equities of Bolles are superior to those of Cruttenden, Bishop, or Jones; for it is conceded that the case must stand upon the equities of Bolles — the defendants Church showing no rights in themselves, both being mere tenants at sufferance, or, at niost, tenants at will of Bolles.
There is much in the testimony of Bolles (taken in connection with the fact that, by the assignment and the deed of Ketcham, he appears to be the only person really interested as defendant, and yet makes no defence) to induce a suspicion that his purchase of the bond and mortgage, and the conveyance to him by Ketcham afterwards, were intended for Ketcliam’s benefit, and as a means of getting rid of the mortgage at less than the amount due upon it.
The paper title of Jones was all the title which he could rely upon in taking the assignment from Jones, and the whole of that paper title was before him, all the assignments being annexed to the mortgage. From these he must have seen that all the title he could obtain from Jones was, at most, that originally conveyed by Fetterman to Cruttenden; that either Fetterman, or some one holding Ms rights, was entitled to the balance, and that the assignment of Fetterman to Cruttenden was but a mortgage : and this is, in effect, what Bolles swears he did understand, when he says, “The reason why I retained the bond and mortgage in my possession, after Ketcham gave me the deed of the property, was, that the first assignment from Fetterman to Cruttenden was a conditional assignment, and I was advised, in order to perfect title in me, that it would be necessary to foreclose that assignment.”
He also testifies that he had cancelled the bond and mortgage, when he received the deed from Ketcham, and that after he had got the assignment from Jones, Ketch-am at first declined to convey, and told him that he had been notified of some proceedings in chancery, in the state of New York, by which he was directed not to pay the sum due on said bond and mortgage, but that subsequently he made the conveyance.
.This conveyance, therefore, must have the effect to foreclose the mortgage as to Ketcham and wife, who executed the deed, and to place Bolles in the same position as if he had foreclosed the mortgage as against Ketcham and wife. The land now represents the mortgage. The decree must therefore be reversed, and the complainant must be allowed
But, as complainant has been remiss in the assertion of his rights, and may thereby have induced the defendants, or some of them, to treat the property as their own, discharged of the lien of the mortgage, we clo not think him equitably entitled to any account of, or allowance for, rents or profits. And, for the same reason, and under the peculiar circumstances of this case, we think he is only entitled to the sum still clue and unpaid on the original bond and mortgage, after deducting therefrom the sum that shall be found due from Fetterman on the mortgage created by the assignment, and that the defendants should be allowed the option of paying the sum thus due to complainant, and retaining the land.
There should, therefore, be a reference in the court below, to ascertain and compute the amount still due and unpaid on the mortgage created by the assignment to Cruttenden, after deducting any sum or sums paid by or on account of Ketcham, the original mortgagor, to Cruttenden, Bishop, Jones, and Bolles, or any of them; and also to compute the amount due on the original bond and mortgage, upon the same basis as if Ketchum had never conveyed to Bolles.
And, on the coining in of the report, a decree should be entered allowing Bolles, his heirs and assigns, or any of the defendants holding the rights of Bolles under the deed from Ketcham, three months to pay to said complainant the amount found due to him on the original bond and mortgage, on the principles above expressed, with the costs ■of this suit; and, in default of such payment, that the j>remises be sold, as in thé case of any ordinary foreclosure sale, and if the complainant shall not previously have paid the amount so due on the mortgage created by the assignment, that then the proceeds of the sale be first ap
A decree must be entered in accordance with these principles, and the record must be remitted to the court below for the further proceedings above indicated.