3 Vt. 581 | Vt. | 1831
After argument,
delivered the opinion of the Court. — The questions which are embraced in the consideration of this case are of very great importance in this state. They have been fully investigated and very ably argued. We have endeavoured to bestow upon them ail the consideration which their importance merits, sensible that a decision either way will conflict with opinions which have at different times been entertained in this state, and with decisions which have been made in different states.
It is contended by the plaintiff that, from the facts which were proved in this case, he ought not to be precluded from pursuing at law for the debt mentioned in the condition of the mortgage deed ; that the decree of foreclosure obtained by Onion, his as-signee, cannot operate as a satisfaction, either in whole, or in part, of the debt due to him from the defendant.; that he maytsue for,
In Connecticut it has always been considered that a decree of foreclosure, and a possession taken in consequence thereof,was by operation of law, an extinguishment of the mortgage debt. In the case of Derby Bank vs. Landon, (3 Conn. 62,) this was recognized as the established law in that state,confirmed by repeated decisions. In this state it was once so considered ; and when Chief Justice Tyler presided in this Court, 1 remember his directing, when a decree of foreclosure was made, that the notes should be left with the clerk, observing that the debt was satisfied by the decree. Afterwards the opinion of the profession changed, and was conformable to the views taken in this case by the plaintiffs counsel, though 1 do not know that the question was ever presented to the consideration of the Court, except in the case of Strong vs. Strong, (2 Aiken, 373.) Indeed, so general was this opinion, that when the question was first raised in this case in the county court, I thought it did not admit of a doubt that the plaintiff was entitled to a judgement for the amount of his note. I became convinced, however, on examination, that my previous opinion was not well founded, and the county court were well agreed in making the decision in this case which we are now reviewing. On an examination of the authorities we have all come to the conclusion that there was no foundation for the opinion which
Powell in his treatise on mortgages, (page 1077,) says, that if a mortgagee, after having got a decree to foreclose, which is signed and enrolled, bring an action of debt on the bond given at the same time for the payment of the money and performance of the covenants of the mortgage deed, such, action will open the foreclosure, and let in the equity of redemption of the mortgagor ; and he refers to the case of Dashwood vs. Blythway, (1 Eq. ca. abr. 371.) From this case it has been inferred that a mortgagee might in every case bring an action at law for the debt mentioned in the condition of the mortgage deed, and recover the whole amount without regard to the decree of foreclosure, and without being in any way affected by it.
There was nothing in the decision of that case, if I am correct in supposing it to be the same which is reported in Mosely, as I shall shortly notice, which would warrant the doctrine laid down by Powell, or in Eq. ca. abr.; and it must have been an inference of the reporter from the argument of counsel. The case of Dashwood vs. Blythway, in Equity cases abridged, is marked with an asterisk,as not to be found in the Reports before published. It appears to have been decided at the Rolls, Trin. term, 1729. At the same term,and upon the same subject, a case was decided at the Rolls, reported in Mosely’s Chancery Reports, 196, by the name of Dashwood vs. Bithazy,which is unquestionably the same case that is found in Eq. ca. abr. From the report in Mosely it appears that the bill was for a foreclosure, and the solicitor general for the plaintiff prayed for a sale of the mortgaged premises instead of a foreclosure, because the security was defective; and urged as a reason for such a decree, that if they should afterwards sue the defendant on his'bond, that would open the foreclosure; and he insisted that such decrees were usual. The master of the Rolls, however, did not recognize this as a common practice, but said it was usual, when the security was defective, to refer to a
/The case of Tooke vs. Hartley, however, appears to- have determined that the mortgagee might proceed at law upon his bond,, notwithstanding his having obtained a decree of foreclosure ; but it will be observed, that in that .case, the suit, which it was the object of. the bill to enj<gjj), was to recover tire sum 'only for which Mie mortgaged premises otu sale had ‘ proved deficient. Mr. Maddock, who was of counsel for the defendant in the bill, contended only that he was'entitled to- proceed on the bond for what the pledge proved deficientto pay ; and-relied on the authority of Dashwood vs. Blithway, in Eq. ca. ab. as an authority to that effect. There is evidently a difference in the report of the case-of Tooke vs. Hartley, in Brown and in Dickens, but notwithstanding the opinion which was attributed to the chancellor by the latter reporter, yet we learn from Lord Eldon and Sir Samuel Romilly, (8 Ves. jun. 531, and 13 Ves. jun. 203,) the opinion of Lord Thurlow was, that whether the estate was sold to a stranger, or remained in the possession of the mortgagee, there-was no distinction ; but an action might be brought for the difference.
The case of Perry vs. Barker, which is reported in 8 Ves. jun. 527, and 13 Ves. jun. 198, was a bill to restrain a mortgagee from proceeding at law upon his bond, after a decree of foreclosure and sale, for the balance of the debt which was not raised from the sale. In these cases the principle doubts were as to the effect of the suit upon the decree, and whether in consequence thereof,-the mortgagor was at liberty to- redeem. Lord Chancellor Erskine, while he admitted as a general rule, that if the security was scanty, the mortgagee might proceed at law to recover the difference, and that- in such case he should give the mortgagor an opportunity to redeem, yet, under the circumstances-of that case, he continued" the injunction which had been granted by Lord Eldon. On this case it may be remarked, that granting the injunction shows most conclusively that the mortgagee may not in all cases proceed at law for the difference ; much less can he proceed for the whole-debt as has been here contended..
In the case of Hatch vs. White, 2 Gallison, 152, the whole of this subject was much considered by Judge Story. It was
I have been thus particular in examining the cases on this subject which have been reported, because the general impression has been that the law was different. We are all fully convinced there are no authorities which support the position-contended for, that a mortgagee may tit a-ny time after foreclosure commence an action at law and recover the whole amount secured by the mortgage, and that the only effect is to let the debtor in to redeem ; but we think that.the.,practice, form)er]y»vv.as*_.when.the. security ..was defective, to decree a sale ol the mortgaged premises, and apply the avails in discharge of the debtLor to refer it.to a master to asceiv tain the value of the estate; and. if less than the .debt, for.the mortgagee to take it pro tanto, leaving the mortgagee, in, either case, at liberty to proceed at law for the balance,; that if the foreclosure was taken for the whole sum, it was.considered for_sora.e. time as^ a ..satisfaction of-the debt._ Afterwards it was considered that after a foreclosure and sale by the mortgagee, he might, agreeably to the authority of Tooke vs. Hartley, proceed at law for the .amount due on the mortgage not satisfied by the sale ; or, if the premises remained with the mortgagee, he might, according to the authority of the same case, as understood by Lord Eldon and Sir Samvel Romilly, still proceed for the difference between the value of the estate at the time of the extinction of the equity of redemption, and the sum due on the mortgage; and that this difference might be-ascertained by an estimate of the value, to be made as in’all other cases, where property passes from one to another, without any-agreement as to the value. And as thejesyjt' of this examination, we decide, that'a mortgagee having obtained a decree of foreclosure, and appropriated, the.mprtgaged estate to himself, divested' of any equity,of redemption, must Jae considered asa purchaser of the estate, in satisfaction of his debt, if the value exceeds the amount ascertained to be due by the decree; or, if the value does not amount to that sum, in satisfaction of so
The'question, whether an action at law for.t'he difference shall be considered as opening the foreclosure, has been brought to our notice in the course of the argument of this case, and although it is not directly involved in the decision, yet it was necessarily con-considered in investigating the question whether a decree of foreclosure was, or was not, a bar to any further proceedings, at law. The cases of Dashwood vs. Blythway and Perry vs. Barker, expressly recognize, that if such action is brought the foreclosure will be opened, and in the latter ease it was intimated that lime might be given'to the mortgagee to get the estate back if he had sold it. It is certainly highly reasonable that if the mortgagee-, after having foreclosed the mortgage, is not content with the satisfaction obtained, and seeks to recover a further sum, that the mortgagor should have the privilege, by paying the full amount of the debt, to receive back the mortgaged estate, if he places a higher estimate, upon its value. And when such action is brought,the mortgagee should have it in his power to reconvey on receiving the whole amount of his debt. I should think, however, that commencing an action does not,- of itself, destroy the effect of the decree of foreclosure. On the commencement of the action, the mortgagor maybe entitled to bring his bill for a redemption, and, by paying the whole amount due, have his land reconveyed : but if he does not so elect, and a judgement is rendered for the dif-ferencej only, between the estimated value of the estate and the debt, there would be no equity in allowing him to redeem thereafter. But inasmuch as the decision oftl is question is not necessary to the decision of the case, it must be left for future adjudication.
We are not unaware that the decision in this case may be considered as overruling the decision made in the case of Strong vs. Strong, before mentioned ; and this has been pressed in the argument. On examining that case, it will be found, that although the effect of a foreclosure was a point made,and, of course,decided, yet it was not the principal point, nor one on which much stress was laid.' The only authority relied on was the one Irom Con
But it may well be questioned whether the authority of that case may not stand good as not conflicting with this case. The foreclosure which was relied on in Strong vs. Strong, as a satisfaction, was obtained under our statute on the application of the defendant after judgement against him in an action of ejectment. A mortgagee institutes his action of ejectment to be let into possession, and, in this way, to receive the benefit of his security. In no other way can he receive the rents and profits ; and this he may desire to do when he does not intend to foreclose his mortgage. By the 76ib section of the judiciary act, a privilege is given to the defendant in an action instituted against him by the mortgagee, after a judgement is rendered against him for the possession, to have execution of this judgement stayed on his application : and_after ascertaining the sum which is due on the mortgage, together with the cost, if he pays that sum by a time limited by the court, the judgement is vacated ; and if he does not pay that sum by the time, it is declared by the statute that the plaintiff mortgagee shall hold the land freed and discharged of all right and equity of redemption. As this action of ejectment is not instituted by the mortgagee for the purpose of foreclosing the equity of redemption, but only for the purpose of availing himself of the benefit of his pledge by being let into possession, and as the application, and decree, and order thereon, are made at the instance, and for the benefit of the mortgagor, and the mortgagee is thereby prevented from going into possession, possibly no other effect can, or ought to be given to this proceeding, as it respects the mortgagee, than is given by the statute, viz. to foreclose the right of the mortgagor, leaving the mortgagee to pursue his remedies in the same manner as he would have been entitled to, if no such .application had been made by the defendant. As the cred-
The judgement of the county court is affirmed.