7 Conn. 149 | Conn. | 1828
Lead Opinion
That the mortgage in question, on the facts offered to be proved, was utterly void in respect of creditors, has not been questioned, nor is it questionable. The precise enquiry is, whether these facts may be proved on a hill of foreclosure ; or whether the plaintiff will be left to pursue legal means in a court of law to establish his title. The defendants insist, that the defence is admissible against the bill of foreclosure; and the plaintiff, that it is no defence here, but that the point, by our jurisprudence, is confined to the law courts.
The argument of the defendants has principally been founded on the law as established in other countries and states, where the diversities on the subject of mortgages between them and us, in many particulars, are numerous and great; and where on foreclosure, the land mortgaged is not only decreed to be sold, a proceeding never admitted here, but the possession is enforced to the purchaser. There, the bill of foreclosure is
The ground on which this case has been decided by the court, renders it both unnecessary and improper to investigate the laws of other countries, or to pursue the train of the counsel for the defendants. The court consider the law of Connecticut, long and frequently established, and without any diversity of opinon, as having conclusively settled this point, that on a hill of foreclosure, the title of the mortgagee cannot-be investigated ; but that he will be left to pursue legal means to establish it. At the same time, I remark, that of all the cases cited by the defendants, there is hut one that appears to be in point; and that is De Butts v. Bacon & al. 6 Cranch 252. This case was brought before the supreme court of the United States, on error, from the circuit court of the district of Columbia. It was a bill of foreclosure ; and the defence was a plea of usury. The circuit court adjudged the contract to be usurious, and decreed it to be void. The case, most probably, was decided on the local law of the state in which the decision was made. In all events, the grounds of determination, and even the arguments of counsel, are all in the dark. The opinion and act of the court is expressed in these few words : “ Which decree, this court, after argument, by Swann for the appellant, and Youngs for the appellees, affirmed.” No person can more highly respect the decisions of this court, than I do. They are to be considered as precedents, in all those cases, where an ultimate jurisdiction is given them over the determinations of the state courts ; and in all their proceedings, both at law and in chancery, are justly entitled to high deference. But when their decisions are founded on the local law of another state, they can have no application here ; and when they are based on the principles of the common law or of equity, if without argument of counsel or the citation of a case,
In all the other cases cited for the defendants, an answer shewing their inapplicability, might easily be given ; but as the decision of the case before us, founded on our own law, puts them out of the question, I feel myself neither called on to discuss, nor justified in discussing, them.
The court have assumed two principles as the basis of their determination; that is, that the question between the parties relates to the legal title of the plaintiff; and that by our law, on a bill of foreclosure, it is not the subject of enquiry.
1. If the facts offered in evidence, by the defendants, are sustained, they show the mortgage deed, as against creditors, to be utterly void. This proposition has not been questioned ; nor is it questionable. On the contrary, it has been insisted on, in the argument, that a determination between the parties on the point of title, is a conclusive bar to any suit at law.
Had the defendants conceded, that the title at law is valid, but that in equity the plaintiff cannot prevail, for want ol equitable title, it would present a different question. Saunders v. Dehew, 2 Vern. 271. 2 Pow on Mart. 1646. The principle is familiar, and does not require a reference to cases. A court of chancery will leave a person to his remedy at law, if there is injustice or even hardship, in its interference. But the specific objection made in this case, is, that the plaintiff* has no legal title ; in other words, that his mortgage, in respect of creditors, is a nullity everywhere.
2 The question then arises, whether by the established law of Connecticut, the legal title, on a bill of foreclosure, is, or is not, a subject of enquiry. The object of investigation, it must be remembered, is not what ought to be the law of the state. This would lead to an examination and discussion of principles. But it is, whether on this subject, the law has, in fact, been settled ; and if so, what that fact is.
As far back as the year 1796, in the 2nd volume of his “ System of the Laws of Connecticut,” (p. 439.) it is said, by Judge Swift, “ That on a bill of foreclosure, the title of the mortgagee cannot be investigated ; but he will be left to pursue legal measures to establish it.” In 1803, the superior court.
To the law as before recited Judge Swift subjoined this observation : “ Where the obligation secured by the mortgage is void, by the statute of usury, this will constitute a defence against a bill to foreclose ;” and for this law he cited 3 Atk 154. It is obvious to every person, who hears the successive passages recited, that the established law of Connecticut was declared, until the last sentence referring to Atkyns. This change of subject in the Digest, from the law of Connecticut to the chancery law and common law of England, is observable on many of his pages, and with no other notice than by a reference to some authority. There is recollected no determination in this state, that usury is a defence to a bill of foreclosure, by the invalidation of the mortgage ; nor has it been pretended. When
Although it is unnecessary, I will remark en passant, that the case referred to by judge Swift, in Atkyns, was neither a bill of foreclosure, nor bearing any relation, even in the remotest degree, to the question before the Court.
It is a provision of statute law, that all suits brought for the trial of the title of land, or wherein the title of land is concerned, shall be tried in the same county where the land lies, or facts are done concerning which the title of land may he in question. Such suits are local, and must be brought in the county where the land is situated. Thus, the action of trespass quare clausum fregit is as much local as an action of disseisin is, although in the former the title of land is never necessarily in controversy. 1 Swift’s Dig. 594. But as it may he controverted, this gives locality to the suit. Now, if on a bill of foreclosure, the title of the mortgagee may he brought into dispute, it clearly is as much a local action as is trespass quare clausum fregit or ejectment. The principle has always been admitted ; but on the ground that the title cannot be in question on a bill of foreclosure, it is established law, that it may be brought in one county when the land mortgaged lies in another. 2 Swift’s Dig. 197. In the case of Broome v. Beers, 6 Conn. Rep. 198., it was recently decided, by this Court, that the title of land was not in question on a bill of foreclosure, and that it need not be brought in the county in which the land lies. It was said, by one of the judges, there being perfect unanimity on this point, that “ the title of land is not in question ; and such suits have always been considered transitory.” 6 Conn. Rep. 215.
It was suggested in the argument of this case, that the statute giving locality to suits, which may involve the title to land, was alone applicable to actions at law. To this observation the answer is without difficulty. In the first place, our courts, without exception, have been of an opposite opinion. It has
It was argued at the bar, that after foreclosure, the title of the mortgagee would be strengthened ; and that for this reason, the point ought to be decided on the plaintiff’s bill. I reply to this remark, that no additional strength is, or can be, given to a title, by a decree, which takes away the equity of redemption only, and in a suit, where the title cannot be, and is not, investigated ; and when the enquiry concerning it is referred exclusively to a court of law.
It has likewise been insisted, that a bill of foreclosure must aver a title to the land mortgaged ; and hence, that it must be proved. To this I answer, that in bills of this description, the only necessary averment on this point, is, that the defendant executed a deed on condition. 2 Swift’s Dig. 656. Hence, as has justly been observed, by Judge Swift, “ all the question that can arise, is, whether the mortgage deed has been properly executed.” 2 Swift’s Dig. 197. Of consequence, if the execution of the deed is not proved by two witnesses : or if it was forged ; or if it was obtained by duress, or by fraud ; or if it was executed by a feme covert: in these and similar cases, it
From the particulars disclosed 1 consider the fact to be unquestionably proved, that by the law of this state, the legal title of the plaintiff, on a bill of foreclosure, is never the subject of enquiry, but that the point is within the exclusive jurisdiction of the courts of law. And as no decision in opposition to this principle has been referred to, it is a fair inference that none exists.
To authorize the adoption of a new rule in annihilation of the former, uniformly recognized and acted on, for more than thirty years, and probably beyon I the memory of any living practitioner at I he bar, some pointed injustice and overwhelming mischief should be made to appear. Rut what is the mischief ; what the injustice? The plaintiff must establish a title, and the defendant may question it, in every possible mode. This, however, must be done in a court of law; and is this an objection ? Is not a court of this description as competent to decide on a legal title as a court of chancery is ?
There is not in the common law a maxim more eminently just, and promotive of the public convenience, than that of stare decisis. It was once said, by Mr. Justice Potcell, emphatically, “ Nothing is law that is not reason —“ a maxim,” observed that eminent lawyer and scholar, Sir William Jones, “ in theory excellent, but in practice dangerous, as many rules, true in the abstract, are false in the concrete ; for since the reason of Titi .s may, and frequently does, differ from the reason of Septimius, no man, who is not a lawyer, would, in many instances, know what to advise, unless the courts were bound by authority, as pagan deities were supposed to be bound by the decrees of fate ” Jones on Bailment 84. Besides, if law well established may be annulled, by opinion, a foundation is laid for the most restless instability. The decisions of one court may be overruled by another court ; and those of the latter will only have a transient efficacy, until some future court, dissatisfied with them, shall substitute new principles in their place. No system of inflexible adherence to established law can be as pernicious as such ceaseless and interminable fluctuations.
Dissenting Opinion
It is understood, that the judge rejected the testimony offered by the defendants, on the authority of several decisions made at the circuit within the last thirty years. It is not pretended, that the question has ever been decided in this court. It is, therefore, open for examination.
Those decisions are founded entirely on the doctrine laid down in 2 Swift’s Dig. 197. 2 Chan Cas. 244. Row. on Mart. 1043 Judge Swift says: “ On a bill to foreclose, the title of the mortgrgee cannot be investigated, but he will be left to pursue the legal measures to establish it. Of course, it is not
Judge Swift also supposes, that the title is not drawn in question, because a bill to foreclose is not necessarily brought in the county where the land lies. It is admitted, that the bill may be brought in the county where the mortgagor or mortgagee dwells ; but it is believed, that this practice is perfectly consistent with the construction of the statute, which directs “ that all suits wherein the title to fend is to be tried and determined, and all actions of trespass quare clausum fre git, shall be tried in the county where the land lies.” This statute regards actions at law, and has never been deemed to apply to bills in equity, wherein the title to fend may be decided. A bill to redeem, when the mortgagor proceeds on the ground that the mortgage has been satisfied, and therefore prays for a restoration of his legal title, and a bill for the specific execution of a contract to convey fend, both involve the question of title ; and yet it is not necessary, in either case, to bring the bill in the county where the fend lies ; nor is such the practice. The statute of our state, like the English few, provides for the trial of titles to fend, in the vicinity, because the jury who are to settle titles come from the vicinage ; but surely such a provision is useless, where the questions are all to be settled by the judges. Hence, our superior court held jurisdiction of bills in equity, wherein the title to fend is concerned, lying in our neighbouring states; and the notable case of Penn v. Lord Baltimore, 1 Vesey 444. respecting fends in this country, in the English courts of chancery, is of the same character.
But the fetter position of the commentator, viz. that usury is a good defence to a bill of foreclosure, proves that the title in such bill may be investigated and defeated. If usury be a good defence, for the reason assigned by the commentator, viz. that the statute declares the contract void, it is difficult to see, why fraud may not be. In both cases, the deed is, by statute, declared utterly void. The authority, however, cited by the
Let us now examine the question on principle. It is very clear, that by a decree of foreclosure, the rights of the mortgagee become materially varied and strengthened, and of course, those of the mortgagor and those claiming under him, in an equal degree, diminished. The object of the bill is to appropriate the pledge, and to cut off all right to redeem, and give a perfect title to the mortgagee. The decree effects this object. The mortgagor can never redeem, except by paying the in-cumbrance. When the time limited for the payment of the mortgage money has expired, the debt is extinguished, and the estate becomes absolute, according to the decision of our court. Derby Bank v. London, 3 Conn. Rep. 62.
The bill proceeds on the ground of a debt due, and a valid collateral security, by a mortgage deed. That the deed was forged ; — that it was fraudulently substituted for another;— that it was obtained by duress; or that the grantor was a feme covert, when the deed was signed, may unquestionally be proved. In the case of Smith v. Chapman, 4 Conn. Rep. 344. this court sustained a bill in equity to validate a mortgage deed, where the wife of the mortgagor was one of the subscribing witnesses, and therefore the deed not duly attested within the requirements of our statute.
If in these cases, the court would permit a defence, and deny to the plaintiff any relief, because he had no valid title, why should not the court uphold a defence, when the deed is declared utterly void by positive law ? — A court of equity will no more enforce a usurious, a fraudulent or a corrupt contract, than a court of law. Such contracts will receive no countenance or support, either at law or in equity. They are, in the words of the law, utterly void every where.
Again, it is admitted in this case, that the mortgagor, or his assigns, might show that the debt had been paid, in part or in full. It will also, it is presumed, be acknowledged, that the defendants might show,’ that the debt, being negotiable, had been assigned, and the interest in the land released to a third person. If then, it may be shewn, that the plaintiff’s title was gone, why not show, that he never had one ?
Moreover, it has been decided repeatedly, by the Chief Justice, and by other Judges in conformity thereto, that a
Surely, there can be nothing in the nature of this defence, which should incur the censure of a court of equity ; nor can a fraudulent conveyance ever deserve peculiar favour or protection. Nay, it is a rule in a court of equity, not to interpose and decree a foreclosure, when there is injustice in the case. The court will refuse such a decree. Powell on Mort. 1045, 6. 2 Term Rep. 271.
But there are not wanting authorities of great weight, bearing directly on this point. In the circuit court of the United States, for this district, the late Judge Livingston, in the case of Austin v. Lyman, after a discussion of this question, in which the doctrine of Swift and Powell was examined, decided in favour of the defence of usury to a bill of foreclosure. H is extensive practice at the bar, and great experience on the bench of the supreme court of New-York and of the United States, entitle his decision to much respect. In Fanning v. Dunham, 5 Johns. Chan. Rep. 42., Chancellor Kent thus observes : “ With respect to the relief that can be afforded here, I take the rule to be, that a plaintiff who comes to a court of equity for relief against a judgment at law, or other legal security, on the ground of usury, cannot be relieved, except upon the reasonable terms of paying to the defendant what is really and bona fide due to him. On the other hand, if the party claiming under such usurious agreement or other security, resorts to this court to render his claim available, and the defendant sets up and establishes the charge of usury, the court will decide according to the letter of the statute, and, deny all assistance, and set aside every security and instrument whatsoever infected with usury.” In the present case, the plaintiff resorts to the superior court “ to render his claim available,” by ap. propriating the pledge and cutting off the equity of redemption, as was before remarked. Is not, then, the position of this learned Chancellor directly in point ? I am aware, that the case before the Chancellor was a bill to set aside a judgment,
In the case of De Butts v. Bacon & al. 6 Cranch 252. the supreme court of the United States, held the defence of usury good on a bill to foreclose, and affirmed the judgment of the circuit court of the United States for the district of Columbia, which decreed the mortgage void on that ground. The question now made, to be sure, was not raised in that case ; but is not the silence of the learned court and bar on the point, full evidence that it could not be raised with any prospect of success? In Baldwin v. Norton & al., 2 Conn. Rep. 161. on a bill of foreclosure, brought by a second mortgagee against the mortgagor and the first mortgagee, one question was, whether the plaintiff could introduce proof of usury in the first mortgage. The court decided, that he could not, because usury was not alleged in the bill. The nine judges gave their opinions seriatim; and in every instance, the question of usury was resorted to, discussed and answered. No judge suggested any difficulty in this proof to destroy the title of the mortgagee. Judge Swift, from whose Digest I have quoted above, did not suggest the contrary idea. Judge Edmond expressly recognized the doctrine, that usury would defeat the title. Is it not incredible, that neither of the judges should have resorted to an objection, which, it is now alleged, is the familiar practice of our courts ?
It is urged, however, that our courts have constantly sanctioned the ground now taken, by a majority of the court. I am not aware, nor do I believe, that there has ever been a decision on the point now raised — viz.—-whether fraud may be given in evidence, by a second mortgagee, or an attaching creditor, to defeat the first mortgage. The first time I ever heard a suggestion of the kind, was in Owen v. Granger, at Hartford, in 1802, when the Court, Judge Swift presiding.
The case of Broome v. Beers, 6 Conn. Rep. 198. is also cited as an authority bearing on this case. The first point decided, as appears by the condensed view of it, by the reporter, is: “A bill of foreclosure need not be brought in the county in which the land lies, as the title of the mortgagee cannot, under such a bill, be investigated.” The land lay in Litchfield county ;— the cause was tried in Fairfield county. This was a writ of error from a decree of Judge Brainard. On the trial of the writ of error, only three judges sat, the judge who tried it being absent. The Chief Justice and Judge Lanman reversed the judgment, against the opinion of Judge Peters and the Judge who tried it at the circuit. The view of the first point, as stated by the reporter, is faithfully taken from the opinion of the Court. That question, however, was not agitated at the bar, nor even mentioned by counsel. It probably appeared on their briefs. But I would ask, what point was investigated and decided ? The only point on the merits was, whether the title of Beers, the plaintiff, was prior to that of Broome, or whether it was contemporaneous with it. The Court held, that by the representation, which Beers made to Broome, prior to his taking the deed, that the deed to Minor, under whom Beers claimed, and the deed to Wright, under whom Broome claimed, were contemporaneous, the plaintiff, Beers, had no priority against Broome, but that they were tenants in common. The title to land thus lying in Litchfield county, was decided, by the superior court, sitting in Fairfield county, or else nothing was decided.
This decision supports, if it needed support, the position which I took before, that bills in equity relating to the title of land, need not be brought in the county w'here the land lies. But with all deference, I repeat the question, what was decided between these parties ? The bill was brought by Beers, a mortgagee, against Broome, to fore dose. What was investigated, and what decided ? Obviously, that Beers had no priority of title over Broome. To decide that’one man has not
I know not how to escape from this result, unless it be said, that this defect in Beers’ title could not be investigated in a court of law; and even then, the title is investigated in a county where the land did not lie. I ask, why not ? Suppose Beers to be in possession, and Broome to bring ejectment for an undivided part of the land ; could not Broome defeat Beers’ priority, by the same testimony, which would defeat it in a court of chancery ?- 1 can see no difference. I trust, then, that the case of Beers v. Broome will not add to the weight of authority, which before that was to be found in 2 Chan. Cas. 244. which Chancellor Kent said was deserving of no consideration. I must be pardoned for saying, that instead of being an authority for any point, it is felo de se.
The absurdity of this doctrine may be further illustrated thus. Suppose that A. mortgages to B. land worth 1000 dollars, to secure a debt of 300. A. afterwards mortgages the same land to B., for the security of a debt of 500 dollars, the consideration of which is usurious, and, of course, the security void. B. brings his bill to foreclose both mortgages. The title
This case has been under the consideration of the court two terms, having been continued for advisement As the judgment appears to me unfounded in principle, and destitute of all support from authority, I have taken the liberty of examining it with freedom.
This decision embraces the following positions.
1. That a bill in equity to establish or defeat a title to land, must be brought in the county where the land lies.
2. That the title of the mortgagee may not be investigated on a bill of foreclosure ; and therefore,
3. That an allegation of title in the plaintiff in such bill is unnecessary ; or, if necessary,
4. That it need not be proved by the plaintiff, and cannot be disproved by the defendant.
5. That a pledge may be appropriated by a bill and decree of foreclosure, when the mortgage deed was usurious or fraudulent, in direct opposition to the statute declaring them utterly void.
6. That usury and fraud are thus made the basis of a decree in a court ®f chancery.
As I cannot admit either of these positions, I feel constrained to dissent from a decision, which, in my judgment, involves them all.
New trial not to be granted.
Dissenting Opinion
I cannot concur with the Chief Justice, though he relies on my opinion in Broome v. Beers, 6 Conn. ep 198., wnieh is as conclusive as any other argumentum ad hominem. In forming that opinion upon the question of jurisdiction, 1 followed implicitly the decisions of my predecessors, who were probably misled bv Powell’s abridgment of an anonymous case in 2 Chan. Ca. 244., which, according to Chancellor Kent, is “ so briefly and so loosely reported, as to be scarcely deserving of any consideration.” Kershaw v Thompson, 4 Johns. ( han. Rep. 616. This point was of minor consideration in Broome v. Beers ; and, of course, received less attention than the principal point in the case. I have since examined the subject. The consequence is a change of opinion. “ V1 ith respect to the relief that can he afforded here,” says Chancellor Kent, “ I take the rule to be, that a plaintiff who comes to a court of equity for relief against a judgment at law, or other legal security, on the gro md of usury, cannot be relieved, except upon the reasonable terms of paying to the defendant what is really and bona fule due to him On the other hand, if the party claiming under a ch usurious judgment, or other security, resorts to this court to rend.. r his claim available, and the defendant sets up and establishes the charge of usury, the court will decide according to the letter of the statute, and deny all assistance, and set aside every security and instrument whatsoever, infected with usury.” Fanning v. Dunham, 5 Johns. Chan Rep. 142. The same point was decided, by the supreme court of the United States, in De Butts v. Bacon & al. 6 Cranch 252., upon a bill to foreclose a mortgage, to which usury was pleaded. The court below decided the contract to be usurious, and decreed the mortgage to be void ; which was affirmed by the supreme court. 1 would, therefore, advise a new trial.
