9 Iowa 114 | Iowa | 1859
Lead Opinion
The mortgage in this case was dated August 10, 1857, and was made to secure the sum of fourteen thousand dollars, with interest and exchange on the city of Pittsburgh, Pennsylvania, payable five years after said date. The note and mortgage provided that the interest was to be paid semi-annually, and if the said mortgagor failed “ to pay said sum of money or any part thereof, or shall fail to pay any of said semi-annual installments of interest during thirty days after the said times of payment of said interest, then the whole of said indebtedness shall be considered due, and the said Jones, (the mortgagee) or his endorsers or assignees, or the holders’ of said note, shall, after having given ten days notice by publication in any newspaper published in Dubuque County, proceed to sell at public sale at the front door of the Court House iAsaid Dubuque County, the above described real estate, and shall make good and sufficient con
This action was commenced in October, 1858, and it is averred in the petition, that the mortgagor has not fulfilled the condition of said mortgage, “but on the contrary has failed to do so, and has not paid the semi-annual installment of interest on said sum during thirty days after the time of payment of said interest, according to the tenor of said note and mortgage, wherefore said mortgage is in full force and effect, and the whole amount of said note and the interest, exchange and cost of protest as aforesaid, is still due thereon.”
One ground of the demurrer was, that plaintiff asks a judgment on a note not yet due by its terms. If there was a failure to pay the interest according to the stipulations of the mortgage, the mortgagee had the right to elect to call in the whole debt. Having elected to do so, by the bringing of this action and praying judgment for the whole amount, it follows that he is entitled to a foreclosure as to the entire indebtedness. The consequences to follow the non-payment of interest were expressly stipulated for, and by his contract in this respect the mortgagor is bound. 2 Hilliard on Mortgages, 106-8; Ottawa Pl'k Road Co. v. Murray, 15 Ill. 336; West Branch B’k v. Chester, 11 Penn. State R. 288 Story Eq. Jur. sec’s 1322-23.
A second ground of demurrer was, that petitioner’s remedy was at law and not in equity.
The law has provided two general modes of barring or foreclosing an equity of redemption, after a breach of condition. The one is a strict foreclosure, and the other a sale of the property under the direction of an officer of the court. In the first mode, after certain proceedings, the mortgagee is adjudged the absolute owner of the property to which before
It is conceded, however, that, independent of the Code, such proceedings are peculiarly cognizable in a court of equity. To this view of the subject, therefore, we come at once. The argument that the remedy of the mortgagee is at law, and not in equity, assumes substantially the position
And these remarks apply to the argument drawn by appel-lee from the use of the word “judgment,” as found in sec. 2084. There is no controversy but that sec. 1833, refers to proceedings in equity, and yet it provides that the court, upon reading the pleadings and proofs and hearing the testimony offered in such cases, shall render such judgment as is consistent with the rules heretofore observed in chancery cases. So again, who would contend that the 5th clause of sec. 1659, upon the subject of limitation of actions, did not apply to a final adjudication in an equity proceeding as well as to a judgment at law ? Indeed the argument proves too much, for if the word “judgment,” as used in this section, refers 4o a law proceeding, so it does wherever used in the Code. And thus it would follow that as all final adjudica
Rut it is said that the legal title under our law, is in the mortgagor; that under all other statutes, and independent of statutes, it was in the mortgagee; and that by the Code the legal title being in the mortgagor, it is a contradiction of terms to talk about foreclosing the equity of redemption; that it is the legal title, and not the equity, which is to be foreclosed and sold. Grant the premises, and the conclusion again proves too much. We ask, is not a court of chancery as competent to direct this foreclosure and sale as a court of law ? The statute uses the word “ foreclose: ” Thus it is said “any mortgage to secure the payment of money may be foreclosed,” sec. 2071; “ the right of the mortgagee to foreclose,” &c., sec. 2082; “ the holder of any mortgage may in all cases proceed by civil action in the District Court where he wishes to foreclose the same,” sec. 2083; “ at any time prior to the sale made in accordance with either of the above modes of foreclosure,” sec. 2088. There is to be a foreclosure then, and what is the nature of it? Is it a new species of foreclosure that only a court of law can direct or order ? Or is it any different, except as to the nature of the estate remaining in the mortgagor, from what it was under the law of 1843, or the law of any other State. It will be remembered that we have before said, that in this State, the method is to foreclose by ordering a sale of the property, instead of by what is termed a strict foreclosure. Foreclosure by sale, is selling the property under the direction and in pursuance of an order of the court, by an officer thereof, or a person appointed for that purpose; and applying the proceeds of the mortgaged premises 'to the discharge of incumbrances according to priority, and paying the balance, if any, to the mortgagor. Now it can make no difference, certainly, whether the sale is of the legal or equitable title, in determining whether the order shall be obtained from the chancellor, or the judge. The object is to have recognized, by an order of the court, the lien of the mortgagee, and to obtain an order foreclos
We have spoken of a court of law acting purely as such, and for the purpose of presenting another view of this statute. Is it not true that under our statute all this controver-versy is, as in too many other instances, about names, rather than principles? Why call this a proceeding either at law or equity? Why not call it, what the Code does, an action for the “ foreclosure of a mortgage ? ” Why is it not true that it was the intention of the legislature to make it, in the language of the court, in Wright v. Marsh, Lee & Delevan, 2 G. Greene 106, neither an action at law, nor a proceeding in chancery, but to unite and apply the principles of both to a statutory regulation. In relation to cases in partition, in the case referred to, there was no diffiulty in concluding that the jurisdiction of the court was threefold: 1st, It was invested with all the cumulative and special powers created by the statute. 2d, It retained all chancery attributes except as otherwise provided by the act. 3d, It retained all its inherent common law authority so far as it could be exercised with the two preceding powers. And, continues the opinion, “the three jurisdictions are comprised in, and are more or less exercised in all partition suits under the act. Rev. Stat. 1843, p. 458. The requirements of the statute, so far as they are especially substituted for equity and common law proceedings, are paramount; but beyond such special substitution, law and chancery interpose,
The only remaining question made by the demurrer is that the petition prays for a foreclosure of the defendant’s equity of redemption; that he has at least the right to redeem given him by sec. 1926 of the Code, and that it therefore cannot be cut off until one year from the time of the sale. A question very similar to this arose in the case of Cooley v. Hobert, et al, 8 Iowa 358, but its determination was not regarded necessary to the disposition of the case. It is again presented, is one of very considerable importance, one that it is important to have disposed of at an early day, in view of the doubt and uncertainty existing in the public and professional mind as to the true meaning of the Code upon this subject. The question is, whether after a sale under a proceeding to foreclose a mortgage (whether by the sheriff, pri- or to “ an act concerning the foreclosure of mortgages and amendatory of chapter 118 of the Code,” approved Eebrua-ary 25th, 1858, or in pursuance of the. judgment of a court,) there exists a right to redeem, either in the defendant or his creditor. Our opinion is that the right does not exist, but that the sale is absolute. The grounds for these conclusions are briefly these:
Our Code contains provisions general and special in their nature and substance. It gives us a general system of pleadings and practice, for instance, for the trial and disposition
But in the next place, the provisions of chapter 118 are inconsistent with the assumption that a redemption was intended. Some of them may be mentioned. In the first place, when a sheriff sells under an ordinary execution, he gives to the purchaser a certificate of sale, which, among other things, relates that the holder will be entitled to a deed unless redemption is made in one year thereafter according to law. When the sheriff sells under a mortgage, however, he is to execute to the purchaser a deed of the real estate “ which shall be effectual to carry the whole title and interest purchased.” In view of these provisions several considerations may be presented. First, Why make a deed in one case and a certificate in the other, if redemption could be made in both? Second, In the case of an ordinary redemption, the clerk, to whom the money is paid gives to the re-demptioner a receipt showing that fact; or if a creditor redeems he is entitled to an assignment of the certificate issued by the sheriff to the original purchaser, and this is all the evidence provided for showing that the inchoate title, so to speak, of the purchaser, has been diverted or changed hands. Now, how could this be done, after the purchaser took the deed to which he is entitled, when he purchases at a mortgage sale ? It is utterly inconsistent with, and contrary to the well known and established rules regulating the conveyance of real property, to thus summarily and informally divest a title which has once vested by a deed duly acknowledged and recorded. Third, Chapter 110 gives to the creditor of the defendant, whose claims become liens prior to a time fixed, the right to redeem after the sale. Section 2088 of chapter 118 gives to any person having a junior lien the right prior to the sale, to obtain an assignment of all the interest of the holder of the mortgage, upon paying the amount secured, with interest and costs, together with any other paramount liens of the same holder. Now, is it either reasonable or consist
It was not improper, therefore, to so frame the decree as to cut off the right to reedem. Of course it could not have the effect of precluding until after the sale, for until that time the right continues. Until judgment and sale the legal title remains in the mortgagor, under our law. After judgment it may be said that the mortgagee has instituted his process and obtained an order to extinguish this title. After sale it is extinguished as fully and completely, as after the. expiration of the time to redeem in case of a sale under an ordinary execution.
Judgment reversed.
Dissenting Opinion
dissenting. — I am unable to concur in the foregoing opinion upon the point relating to redemption. The opinion adopts with sufficient correctness, the thought that the Code consists of general and special provisions. It then classes the chapter relating to mortgages, with the special provisions, and those relating to actions and executions with the general ones. Whichever course the mortgagee pursues to foreclose upon his mortgage, whether a suit or bill in equity, or the sheriff’s summary proceeding, (now repealed,) it regards him as operating within the special provisions. This is the point at which I begin to differ from the opinion. "When the mortgagee brings suit, goes into court, he comes
In the case of Carroll v. Reddington, 7 Iowa 386, the District Court, by its decree, allowed the'defendant a given time to pay or redeem, and in case of failure, execution was to issue. It was held by this court that it was not within the authority of the District Court to render such a decree, allowing time for redemption before the execution should issue. My assent was given to that opinion upon the ground that there was a year for redemption, given by law, and that this took away the power of the court to render such a decree in equity. Taking the opinion of the majority in this case to be law, I should not probably be able to concur in that decision.
Eor the reason above briefly intimated I am obliged to dissent from the decision in the case at bar.