Trimm v. . MarshTrimm v. . Marsh
The legal title to mortgaged premises remains in the mortgagor, and his title is not affected by default in payment or by surrender of possession to, or the taking of possession by the mortgagee.
The interest, therefore, of a mortgagor out of possession may be sold on execution, and the owner of the mortgage in possession can procure such sale and become the purchaser, and, after obtaining the sheriff‘s deed, can set up the title thus acquired as a defence in an equitable action to redeem, brought by the mortgagor or his grantee. (GRAY, C., dissenting.)
It seems that payment or tender, by the owner of the equity of redemption to a mortgagee in possession, of the amount unpaid, extinguishes the lien of the mortgage, and the former may thereupon recover possession in an ordinary action of ejectment.
Hubbell v. Sibley (50 N. Y., 472) commented on and distinguished.
The authorities treating of the rights of mortgagor and mortgagee, collated and discussed in dissenting opinion of GRAY, C.
(Argued June 12, 1873; decided January term, 1874.)
APPEAL from order of the General Term of the Supreme Court in the first judicial department, reversing a judgment in favor of plaintiffs, entered upon the decision of the court at Special Term, and ordering a new trial. (Reported below, 3 Lans., 509.)
This was an action for an accounting as to the amount due upon a bond and mortgage, and for the recovery of the possession of the mortgaged premises, upon payment of the amount due.
In 1858 one Ridgway, being the owner of certain premises situate in the city of New York, mortgaged them to an insurance company to secure $2,000; the insurance company assigned the mortgage to the defendant Sarah A. Marsh. Ridgway afterward conveyed the premises to the plaintiff Brown, who subsequently, in October, 1865, entered into an agreement with plaintiff Trimm to convey the same to him. In 1861 the defendant Sarah commenced an action to foreclose this mortgage, making plaintiff Brown and others parties, and obtained judgment of foreclosure. The premises were sold under the judgment in 1862, and defendant Sarah
The plaintiffs commenced this action to redeem the said premises from the mortgage and judgment of foreclosure, and the principal defence relied on by the defendants was their title under the judgment and execution sale against plaintiff Brown. The referee decided the same in favor of рlaintiffs, holding that the execution sale, being made by the assignee of the mortgagee in possession, was null and void and conferred no title upon the purchaser.
Wheeler H. Peckham for the appellants. It was proper for the referee to try the main issue first; and on that being decided the court had power to refer the case back to him to take the account. (2 V. S. Eq. Pr., 194, 195; Palmer v. Palmer, 13 How., 363, 365; Pratt v. Stiles, 17 id., 211; Bantes v. Brady, 8 id., 216; Edwards on Referees, 650; Griffin v. Cranston, 5 Bosw., 662; Goodyear v. Rubber Co., 48 Barb., 523; McMahon v. Allen, 27 id., 336.) Defendant‘s motion to dismiss the complaint on the ground that there was a tender alleged in the complaint, and that no tender was actually made, was properly denied. (Phelps v. McDonald, 26 N. Y., 84; Grant v. Morse, 22 id., 323; Gates v. Andrews, 37 id., 659; Manley v. Ins. Co., 1 Lans., 25; 2 Crary, 270; 2 Van Sant., 113, 114; Beekman v. Goddard, 18 J. R., 544; Vroom v. Ditmas, 4 Paige, 526; 2 Barb. Ch. Pr., 199; Calkins v. Isbell, 20 N. Y., 152; Grugion v. Gerard, 4 Y. and C. Exch. Cas., 128; Kerr v. Purdy, 50 Barb., 24; Westlake v. Ins. Co., 14 Barb., 206.) The sale having been set aside, plaintiffs have a right to redeem. (2 Ldg. Cas. in Eq., 49; Hill v. Sands, 5 N. Y. Leg. Obs., 19; Nelson v. Cowing, 6 Hill, 336; Hollister v. Bender, 1 id., 150; McBride v. Farmers’ Bk., 26 N. Y., 450; Raynor v. Wilson, 6 Hill, 469.) The equity of redemption of a mortgagor, after default and after the mortgagee has taken possession, cannot be sold on execution. (Waters v. Stewart, 1 Cai. Cas., 47, 57; Francis v. Nash, Hard., 53; Impey on Sheriffs, 157; Denton v. Livingston, 9 J. R., 96; Baxter v. Gilbert, 12 Abb. Pr., 102; Mattison v. Baucus, 1 Coms., 295; Baltes v. Ripp, 3 Keyes, 210; Hitchcock v. Harrington, 6 J. R., 293; Collins v. Torry, 7 id., 282, 283; Van Duyne v. Thayre, 14 Wend., 234; 4 Kent‘s Com., 43-48 [marg.], 8th ed.;
Justus Palmer for the respondent. The whole case should have been sent back to the referee on the ground that there had been a mistrial. (Pratt v. Stiles, 17 How., 311.) A mortgagor of real estate is the legal owner of the land, and the mortgage is a mere security for the debt. (Packer v. Roch. and Syr. R. R. Co., 17 N. Y., 295; Power v. Lester, 23 id., 527; Runyan v. Mersereau, 11 J. R., 534; Kortright v. Cady, 21 N. Y., 343; Astor v. Hoyt, 5 Wend., 603.) A mortgagee cannot bring ejectment. (
EARL, C. The only legal proposition involved in this case, which we deem it important to consider, is whether a mortgagee of real estate in possession can cause the equity of redemption of the mortgagor to be sold on an execution and become the purchaser of the same, and, after obtaining the sheriff‘s deed, set up his title thus acquired against the claim of the mortgagee to redeem from the mortgage in an equitable action commenced by him for that purpose; or, to state
The respective rights of the mortgagor and mortgagee in the land mortgaged have been the subject of much discussion, and it is impossible to reconcile all that learned judges and writers have said upon the subject. By the common law of England the legal estate was vested in the mortgagee, to be defeated by the performance of a condition subsequent, to wit, payment at the law day. In default of such payment, the title became absolute and irredeemable in the mortgagee. But, two centuries ago, courts of equity assumed jurisdiction to relieve mortgagors against forfeitures, and, thenceforth, in equity a mortgage has been regarded as a mere security, as creating an interest in the mortgaged premises of a personal nature, like that which the mortgagee has in the debt itself.
These equitable principles have had an increasing influence upon courts of law, and Chancellor Kent says that “the case of mortgages is one of the most splendid instances in the history of our jurisprudence of the triumph of equitable principles over technical rules, and the homage which those principles have reсeived by their adoption in the courts of law.” (4 Kent‘s Com., 158.)
The common-law rule, as modified by the equitable principles above alluded to, still prevails in England. There the courts still hold that the legal title passes to the mortgagee, and becomes by default absolutely vested in him at law, and that the mortgagor has, after default, nothing but an equity of redemption to be enforced in a court of equity. After default the mortgagor can again become reinvested with the title to his land only by a reconveyance by the mortgagee. The same rule prevails in the New England States, and in many of the other States of the Union. But this common-
Prior to the Revised Statutes the mortgagee could maintain ejectment to recover the mortgaged premises. This right has been taken away (
At common law, payment or tender at the law day extinguished the lien of the mortgage and reinvested the mortgagor, without a reconveyance by the mortgagee, with his title. But tender or payment after the law day did not have this effect, and in such case a reconveyance was necessary; and such is still the rule in England and in many of the States of the Union. But it has always been the law of this State that payment or tender, at any time after the mortgage debt became due and before foreclosure, destroyed the lien of the mortgage and restored the mortgagor to his full title. As the mortgagee had no title, a reconveyance was not required by the law as expounded by our courts. So that here the term law day, which occupies such a prominent place in the early discussions as to mortgages, has no рarticular significance. The mortgagor has his “law day” until his title has been foreclosed by sale under the mortgage, and it is a misnomer in this State to call the mortgagor‘s right in the land, before or after default, an equity of redemption; a mere right to go into equity and redeem. This was a proper description of the mortgagor‘s right in the land according to the law as expounded in England. But in this State the interest of the mortgagor in the land is the same before and after default, and is a legal estate, with all the incidents and attributes of such an estate.
But it is claimed by the learned counsel for the appellants that the position of the mortgagee is materially changed when he gets possession. It is true, notwith-
The fact that, at the time of the execution sale, the defendants were in possession, claiming the absolute title, can make no difference, as land held adversely to the true owner can be sold upon execution against him. (Tuttle v. Jackson, 6 Wend., 213; Truax v. Thorn, 2 Barb., 156.)
I am, therefore, of the opinion that the title of the defendant under the execution sale was valid, and that the plaintiff had no right to redeem.
The order of the General Term must be affirmed, and judgment absolute rendered against the plaintiffs, with costs.
REYNOLDS, C. The precise question to be determined in this case is whether a mortgagor, after having surrendered possession to his mortgagee, has such an interest in the mortgaged premises as may be sold on execution. The circumstance that Mrs. Marsh took possession as purchaser under a decree of foreclosure, the sale having been subsequently vacated, does not, perhaps, place her in any better
Ordinarily, the mere change of the actual possession of real estate would not divest the legal title of the owner, and I can see nothing in the fact of actual possession by a mortgagee that should work such a result. Legal estates in land cannot be transferred by the mere act of taking possession, whether with or without the consent of the owner, unless the possession be held adversely for a sufficient time to ripen into a legal title. The possession of a mortgagee is, apparently, attended with more incidents of legal ownership than any other, mere possession. It is sanctioned by a right which
We are referred by counsel for the appellant to the case of Hubbell v. Sibley (50 N. Y. R., 468, 472) in support of his position. That case involved simply a question as to the operation of the statute of limitations, and although the question as to the rights of a mortgagee in possession was incidentally alluded to in the opinion of Judge GROVER, nothing was decided by the court other than that the action was barred by the statute. The action was for an accounting to ascertain the amount due upon certain mortgages upon lands in which the plaintiff claimed to have a title to one undivided half, and for leave to redeem on paying the amount due. The defendant had foreclosed the mortgages by advertisement, had purchased at the sale and was in possession. The plaintiff claimed that the foreclosure was void, and hence his demand for an accounting and for leave to redeem. The only defence сonsidered was the statute of limitations, and it was held to be a purely equitable action and barred by the ten years’ statute. The defendant was, in
It may be added thаt if the mortgagor tenders the mortgagee in possession the amount of money due on the mortgage, there appears to be no reason why he may not recover the possession of the premises in an ordinary action of ejectment. A tender of the amount due upon a mortgage extinguishes the lien, whether accepted or not. (Farmers’ Fire Ins. Co. v. Edwards, 26 Wend., 541.)
I therefore, with considerable hesitation, incline to the opinion that the possession of a mortgagee does not divest the technical legal fee of the mortgagor.
Actual possession, while good enough as against a stranger or a trespasser, does not in very many (and in most) cases prove title. It was held in Huntington v. Smith (4 Conn. R., 235) that the interest of a mortgagee before foreclosure could not be taken in execution. The legal estate must vest somewhere, and if not in the mortgagee it must remain in the mortgagor. Regarding, therefore, as we must, the inte-
The order should be affirmed and judgment absolute given against the plaintiff, with costs.
GRAY, C. (dissenting). The question presented is, what was “the right, title and interest” of which Elizabeth C. Brown was seized in the mortgaged premises after condition broken, and the mortgagee, or rather the assignee of the mortgagee, had, by adverse proceedings, legally obtained and continued in possession thereof? The execution under which the sheriff sold the premises (if it conformed to the statute, as we must presume it did) authorized the sale of “the real estate” of Brown (
A judgment at law is not a lien upon a mere equitable interest in land, and the execution under it will not pass an interest which a court of law cannot protect. (Bogart v. Perry, 1 John. Ch., 52, 57.) This case was carried to the Court for the Correction of Errors, and the principle here enunciated, with the judgment rendered, was affirmed. (17 John., 351, 354.) In Watson v. Polhemus & Spencer (20 Wend., 260, 263) Justice COWEN asked, “what is an equity of redemption?” and answered, “at law, as between mortgagor and mortgagee, it is not known.” In White v. Cole (24 Wend., 116, 142), referring to the equity of redemption, he said it “had never, that he was aware of, been holden tangible by legal execution,” and in Mattison v. Baucus (1 N. Y., 295) it was held that the interest of a mortgagor of chattels, unless united with a right to the possession, was not the subject of levy and sale. The respective rights of mortgagor and mortgagee became, at an early period in the history of this State, a question of great importance to the whole public. The Constitution of 1777 rendered a freehold qualification indispensable to the right of an inhabitant to vote for certain officers. Prior to its adoption the ancient common-
We now come to cases decided since the Revised Statutes took effect, the first of which is Astor v. Hoyt (5 Wend., 605, 617), decided in December, 1830, within a few months after the revision, in which SAVAGE, Ch. J., in an elaborate opinion, after a full and careful review of all the cases bearing upon the relative rights of mortgagor and mortgagee, held precisely what the act of 1787 had, in substance, declared the law to be; which, in the language of the very able chief justice, was, “when the mortgagee takes possession he then has all the right, title and interest of the mortgagor; then he acquires and the mortgagor loses an estate liable to be sold on exeсution.” The next, Van Duyne v. Thayre (14 Wend., 233, 235), was an action of ejectment for dower by the widow of a mortgagor. The mortgagee being in possession, and NELSON delivering the opinion of the court, held that, although a widow was entitled to dower in what is sometimes called the equity of redemption, upon the ground that until foreclosure or entry the mortgagor holds the legal title; but that he is not so regarded as to a mortgagee in possession or those claiming under him after forfeiture. They might, he said, have maintained ejectment before the Revised Statutes, and may now defend themselves if in possession under the mortgage, and hence that the action could not be maintained. In Phyfe v. Riley (15 Wend., 248, 253, 254, 256), ejectment was brought by Phyfe, whose title was derived from one Burke, a mortgagor of the premises sought to be recovered, against Riley, the assignee of the mortgagee in possession, and a recovery was insisted upon on the ground that, the Revised Statutes having abolished the right of a mortgagee to bring ejectment for the recovery of the mortgaged premises until after foreclosure, a mortgagee or his assignee could not avail himself of the mortgage, as a title, to bar a recovery. The opinion of the court was delivered by SAVAGE, Ch. J., who, in answer to the ground taken, said: “The cases deciding thаt a mortgagee might protect his
peculiar in its facts was brought before the Supreme Court, Edwards v. The Farmers’ Fire Insurance and Loan Co. (21 Wend., 466), and importing more than ordinary interest from the fact that the chancellor had, in a similar case, assailed the decision of that court in Jackson v. Craft, and said it had been doubted ever since it was reported, and refused to follow it, as appeared from his opinion, then in manuscript, but since reported (7 Paige, 344, 347). The facts in the case to which I allude are these: The business of the Farmers’ Fire Insurance and Loan Company was carried on under a statute which provided that when they should become the purchasers of any real estate on which they had made loans, the mortgagors should have the right of redemрtion of any such property on the payment of principal, interest and cost, so long as the property remained in the hands of the company unsold. The company loaned to the plaintiff a sum of money, to secure the payment of which he executed to them a mortgage, which, after condition broken, they foreclosed, and on the foreclosure sale purchased in the mortgaged premises, and then entered into a contract for the sale of the premises to a third party, who entered thereon, the same being uninclosed and unoccupied, and directed a sewer or ditch to be constructed for the purpose of draining the same. The plaintiff, claiming that the property, notwithstanding the executory contract for its sale, remained in the hands of the defendant unsold, tendered to the company the principal and interest due on the mortgage, together with the costs of foreclosure, with a conveyance to be executed by the company releasing to the plaintiff the mortgaged premises. The company declined to accept the tender or execute the deed upon the single ground, that the company had made a contract for the sale of thе land. The plaintiff then brought ejectment; and, on the trial at circuit, the judge charged the jury “that the provisions in the charter of the defendants rendered the sale and foreclosure of the mortgaged property a continuation of the mortgage; and, consequently, that the plaintiff had the right to redeem; that the tender was sufficient; and
The rule that, after forfeiture and condition broken, the mortgagee, if he be in possession, is considered as having the legal title, was reasserted and again decided in the Supreme Court as late as 1860. (Bolton v. Brewster, 32 Barb., 389, 395.)
We now come to the case which furnished the Supreme Court with the authority for the decision now under consideration (Kortright v. Cady, 21 N.Y., 347, 365), which was an action of foreclosure brought by Cortright, a mortgagee, against Cady, in possession of the mortgaged premises as assignee of the mortgagor, and Cady not only answered but proved on the trial that, after the day stipulated for payment and before action brought, he tendered to Cortright the principal sum secured by the mortgage, with the interest thereon, and yet Cortright had judgment of foreclosure and for the sale of the mortgaged premises, which was affirmed by the Supreme Court and reversed by the Court of Appeals. The point in that case was simply whether a mortgagor, while in possession representing the title, could, after the day stipulated for payment, make a tender of the amount secured by the mortgage,
If the learned judge intended to be understood that a mortgagee‘s possession, obtained after and by reason of a condition broken, does not enlarge his estate in the mortgaged premises, and that the notion that it does rests upon no foundation, he was clearly in error. It rests, so far as the law of this State is concerned, upon the foundation of an unbroken current of authorities, commencing with
This judgment should be reversed and a new trial ordered. All concur for affirmance, except GRAY, C., dissenting.
Order affirmed, and judgment absolute against plaintiffs.
OF CAUSES DECIDED DURING THE PERIOD EMBRACED IN THIS VOLUME, AND NOT REPORTED IN FULL.
ISAAC B. MILLER, Respondent, v. NATHANIEL DOWNING, Appellant.
(Argued January 26, 1873; decided March term, 1873.)
THIS was an action of ejectment to recover possession of a piece of land in East Hampton, Suffolk county. Defendant had been in possession several years; prior to that it had been a common. Defendant claimed under a deed from John Merry to defendant‘s ancestor, given in 1737. Plaintiff claimed under a deed from Gardiner Miller, given 1833. There was no evidence that said grantor ever had possession. Plaintiff‘s claim of possession rested upon the fact that he was accustomed to have a wood pile on the vacant lot for some thirty years, and had buried potatoes upon it for six years. No evidence was given of a claim of title by him until this suit was brought. Held, that plaintiff failed to make out a title, and had acquired none by adverse possession, and was not entitled to recover.
George Miller for the appellant.
J. Lawrence Smith for the respondent.
REYNOLDS, C., reads for reversal. All concur; LOTT, Ch. C., not sitting.
Judgment reversed.