12 Wis. 413 | Wis. | 1860
By the Qourt,
If the school land certificates, and Wood’s interest under them, could be regarded as personal property, and the transaction as a pledge, still the judgment of the circuit court would have to be reversed. The judge left it to the jury to determine whether Wood had waived notice of the intended sale of the certificates. This was error. The agreement was in writing, signed by Wood, and its execution undisputed. There was no parol evidence on the subject, and whether there was a waiver depended upon the proper construction of the written agreement, which was a question of law for the court and not of fact for the jury. It is clearly competent for the pledgor of goods to waive the notice to which, by law, he is entitled. Wilson vs. Little, 2 Coms., 443; Allen vs. Dykers, 3 Hill, 593; Dykers vs. Allen, 7 id., 497. And if there be a special agreement regulating the mode of sale, it must be complied with. Edw. on Bailments, p. 260. The agreement in this case was clear and explicit. Notice was expressly waived. There was, therefore, upon that point, nothing to submit to the decision of the jury, and they should have been instructed, as matter of law, that no notice was required.
Yiewed in the same light, the instructions in regard to the necessity of a demand for payment before the certificates could be lawfully sold, Avere probably correct. Stearns vs. Marsh, 4 Denio, 227, and. cases there cited. A waiver of notice of sale is not a Avaiver of notice to redeem. Wilson vs. Little, supra.
In this case the controversy below was mainly as to the measure of damages. Eor the plaintiff it was insisted that it was the market value of the land represented by the certificates; for the defendant, that it was the market value of the certificates at Madison, the place where the agreement was entered into, and where the sale was made. The judge overruled the objections of the respective counsel, and admitted evidence as to both, and charged the jury that in determining the damage sustained by the plaintiff, they might take both into consideration. If the acts of Mowry amount'ed to a conversion or unlawful detention of the certificates, it seems to me that neither of these would be the true rule of damages. Both proceed upon the notion that a conversion of the certificates was a conversion of the land, or of the borrower’s interest in it, and are graduated by the value of that interest This, it appears to me, would be wrong,
Although it has long been settled that trover for title deeds may be maintained, yet upon looking into the books, it will be found that there is a most singular scarcity of au-
I have already said that the primary error was in regarding the transaction as a pledge, and in supposing that Wood’s interest in the land and certificates could be extinguished or converted by a sale, as in the case of goods. Although the certificates, as contracts in writing, may, for some purposes, be regarded as chattels or choses in action, yet it was evi
From this cursory view of the nature of Wood's interest in the land, it becomes apparent that it was incapable of conversion by a mere wrongful transfer of the certificates, and that the transaction, if it amounted to anything, was an equitable mortgage created by the deposit of the certificates, and hot a pledge. The object was to give a lien upon his estate to secure the payment of the debt. "Whether equitable mortgages may be created in this state by the deposit of title deeds, strictly so called, need not here be considered. In some of the states it has been held that they cannot — that they are forbidden by the statute of frauds and inconsistent with -the registry laws. Bowers vs. Oyster, 3 Penn. Rep., 239; Van Meter vs. McFaddin, 8 B. Monroe, 435. Whatever may be the merits, in opposition to the decisions of the English courts, of the objections founded upon the statute of frauds, those based on the registry laws seem to be supported by very strong reasons. Under their operation the possession of title deeds is no longer necessary to the assertion of rights to real estate. Office copies answer every purpose, and may be used on all occasions, with the same effect as the originals and without accounting for their absence. The possession
But in the case we are considering, these difficulties do not exist. By virtue of the statute under which they are issued, these certificates become real muniments of title, as ■ much and even more so than deeds were in former times. The mode of transfer prescribed by statute is an assignment in writing of the certificates, and not an independent conveyance of the holder’s interest in the land. E. S., chap. 28, § 53. This implies that, upon sale, the certificates are to be delivered over to the vendee, accompanied by a proper assignment ; and such, I believe, has been the common practice of the country. It is declared that the person to whom the same shall be legally assigned, shall have the same rights and remedies thereupon as the original purchaser would have had. It is this assignable quality of the certificates which, for the purposes of negotiation and sale, gives to them the character of a chose in action, as now defined by law; and although they may be acknowledged and recorded, yet no one would think of buying or selling them without delivery, any more readily than a note or bond for money, unless their absence were satisfactorily explained and accounted for. Possession of them is indispensable to a beneficial enjoyment of the estate, for without producing them a conveyance of the' fee cannot be obtained. E. S., chap. 28, § 55. Hence possession is some evidence of right of property in the person in whose hands they may be, and they are not within the objections urged against the creation of equitable liens by the deposit of mere title deeds. As to the statute of frauds, if that could be insisted upon in a case like this, the evidence that the certificates were deposited as security for the payment of the debt, is in writing and subscribed by Wood.
Equitable mortgages, created by the deposit of title papers resembling these certificates, have been sustained in this country (Williams vs. Stratton, 10 Smedes & Marsh., 418; Welsh vs. Usher, 2 Hill’s Ch’y Rep., 167); and even by the deposit of title deeds. Rockwell vs. Hobby, 2 Sandf. Ch’y Rep., 9.
It being determined that the transaction was an equitable mortgage, it follows that Mowry’s proceedings to cut off Wood’s equity of redemption by a sale of the certificates were utterly nugatory, and that after default his only remedy upon the securities was by a suit in equity for the establishment of his lien, and for a sale, in case Wood neglected to pay
The right to redeem remaining untouched, we are next to inquire how the conduct of Mowry in attempting to sell, and in delivering the certificates to a stranger, affected Wood's rights in other respects! Was it a wrong with respect to the certificates, as paper evidences of title, to the return of which he was entitled on payment of the debt, for which he can maintain an action at law ? Did the sale and delivery operate as a release or extinguishment of Hulee Mowry's equitable lien? And what interest, if any, did Jason Mowry acquire ? Has he a lien for the twenty dollars which he paid upon the purchase? Had the same things happened in the case of a legal mortgage, I should have found little difficulty in answering these questions, and as the case is, I am inclined to think that it is to be governed by the same principles.
With regard to legal mortgages, it is an elementary principle that the mortgage is but an incident to the debt; that the transfer of the debt carries with it the mortgagee’s interest in the security, 'and that a sale of the mortgage separate from the debt is a legal impossibility. In Martin vs. Mowlin, 2 Burr., 978, Lord Mansfield says-: “A mortgage is a charge upon the land, and whatever would give the money will carry the estate in the land abng with it, to every purpose. The estate in the land is the same thing as the money due upon it. It will be liable to debts; it will go to executors; it will pass by a will not made and executed with the solemnities required by the statute of frauds. The assignment of the debt, or forgiving it, will draw the land after it as a consequence ; nay, it would do it though the debt were forgiven only by parol; for the right to the land would follow, notwithstanding the statute of frauds.” The same learned judge, in the case of The King vs. St. Michaels, Doug., 630, says: “The mortgagee, notwithstanding the form, has but a chattel, and the mortgage is only a security. It is an affront to common sense to say the mortgagor is not the real owner.”
In Johnson vs. Hart, 3 Johns. Cases, 322, and same case in I Johns. Rep., 580, where a debtor, as collateral security for
Before foreclosure or possession taken, lands mortgaged cannot be sold on execution against the mortgagee. Glass vs. Ellison, 9 N. H., 69; Jackson vs. Willard, 4 Johns. Rep., 41. In the last named case, Kent, C. J., says: Until foreclosure, or at least until possession taken, the mortgage remains in the light of a chose in action. It.is but an incident attached to the debt, and, in reason and propriety, it cannot and ought not to be detached from its principal. The mortgage interest, as distinct from the debt, is not a fit subject of assignment. It has no determinate value. If it should be assigned, the assignee must hold the interest at the will and disposal of the creditor who holds the bond. Accessorium non ducit sed seguiiur principóle. It is difficult to conceive what right can be sold which does not convey the debt with it. The control over the mortgaged premises must essentially reside in him who holds the debt. It would be absurd in principle and oppressive in practice, for the debt and mortgage to be separated and placed in different and independent hands. There is no way to render a mortgage vendible but. by allowing the debt to go with it: and this would be repugnant to all rule, for it is well understood that a chose in action is not the subject of sale on execution. When the mortgagee has taken possession of the land, the rents and profits may,
A mortgagee, though ho have conveyed the whole mortgaged premises, with warranty in fee, can yet foreclose, for this conveyance of the land will not pass his interest in the mortgage. So if he have thus conveyed only a part of the mortgaged premises, he may yet foreclose for the whole, un
The assignment of the interest of the mortgagee in the land, without an assignment of the debt, is considered to be without meaning or use. 4 Kent’s Comm., 194. An assignment of the mortgage, without an assignment of the debt, is treated, at most, as a transfer of a naked trust. 2 Story’s Eq. Jut., § 1023, note 2.
The doctrine of the common law in regard to the rights of a legal mortgagee, is well summed up by the supreme court of -Hew Hampshire in Ellison vs. Daniels, supra, where they observe that “ so far as it may be necessary to enable the mortgagee to prevent waste, and to keep the land from being in any way diminished in value, or to receive the rents and profits, and, in short, to give him the full benefit of the security, and appropriate remedies for any violation of his rights, he is undoubtedly to be treated as the owner of the land. In all other respects, and for all other purposes, the interest of the mortgagee is treated as a mere personal chattel.” The sale of the land mortgaged is not one of the purposes for which his interest may be regarded as real estate.
These principles, so familiar and well established as to legal mortgages, are, for the most part, equally applicable to equitable mortgages created by the deposit of title papers as security, the most material point of difference being that in mortgages of the latter description created by the mere act of deposit, the assignment of the debt does not draw after it the mortgage security. Such mortgages may be transferred, but it can only be done in the same way they are at first created, by a deposit of the title papers with the assignee of the debt. 3 Powell on Mort., 1059; 10 Smedes and Marsh., 426. This distinction is founded on the fact’that in such cases there is no written contract defining the rights of the parties. The lien is implied from the mortgagee’s possession of the title papers; and hence possession of them becomes an indispensable element in the proof of any one who would take the benefit of the lien as his assignee. In this case, however, the agreement was in writing, and upon it Mowry might have compelled a delivery as against Wpod, or any person but a
Now if a legal mortgagee, who, for some purposes, is treated as having a legal estate in the land, cannot, by deed or assignment, transfer an interest therein independently of the debt, still less can it be done by an equitable mortgagee, who at law is regarded as having no right. If such a transfer by the former be considered without meaning or use, or a nullity ; or if the transferee must hold the interest at the will and disposal of the creditor who holds the debt, or as the trustee of a naked trust having no beneficial interest, then the same must be equally true of a transfer by the latter in a case like the present. There is no room for distinction between the two cases, and hence I think that Jason Mowry took nothing by his purchase — not even a lien, as against Wood, for the twenty dollars that he paid, which Luke Mowry became liable instantly to refund.
It follows from the same premises that Lalce Mowry did did not lose his lien upon the certificates for the security of his debt, and that it passed, upon his subsequent transfer of the note, to Wakeley & Tenney, unless the circumstances attending that transfer show that such was not the intention of the parties. It is true that it is competent for a mortgagee, if he desires, to separate the debt from the mortgage, in which case the mortgage is extinguished. 1 Johns. Rep., 591; 5 Cow., 206; 9 id., 753 ; 9 Wend., 84. It is also true that it was the intention of Mowry, at the time of the sale, to part with the certificates; but it was upon the supposition that he was availing himself of them as securities, in which he was entirely frustrated. lie had no intention of parting with them upon any other terms, and as his action for that purpose was nugatory and void, it necessarily left him in the same condition as before. He was liable to refund the price, and for that reason, and because his lien still subsisted, he was entitled to the benefit of it.
Nor do I think that the sale was a wrong of which Wood can complain. As a depositary of the certificates, Mowry was responsible for. ordinary neglect only, or for a violation
Ordered accordingly.