7 Johns. Ch. 25 | New York Court of Chancery | 1823
The great and leading point in the case, is, whether the sale of the mortgaged premises, under the power contained in the mortgage, was duly made under a competent power.
If this point be determined in favour of the sale, it will be unnecessary to examine, whether there was any sufficient ground to consider Wilson as having abandoned or waived, by his acts and acquiescence, prior to the sale, his equity of redemption in the mortgaged premises, so as to have excluded himself and his representatives from a right to redeem.
The letter of attorney authorized Faulkner, for Wilson, and in his name, to ask, demand and receive of Williamson, deeds for the premises, and to sign, seal, deliver and acknowledge a mortgage, or mortgages, fyc. and bonds to the amount of the consideration money remaining due, for the better securing the same, according to an agreement thereof, between them made; and granting to his said attorney full power and authority to do and perform all things necessary and lawful, to the obtaining to him, and for his use, a title, &c., and securing the consideration money therefor to the aforesaid Charles Williamson.
Under this power, a deed was received by Faulkner from Williamson to Wilson, and a mortgage, simultaneously, and of the same date, (being the 21st of October, 1796,) executed by Faulkner, for and in the name of Wilson, to secure the amount of the consideration, including a reasonable compensation for the mills built upon the premises. This allowance for the mills, which increased the amount of the mortgage beyond the actual consideration in the deed, was in pursuance of an agreement between Williamson and Faulkner, who acted on behalf of all the partners in interest in the premises, and which agreement was alluded to in the letter of attorney. The mortgage was in the printed form, used in the offices of the agency of the Pulteney estate, and it contained the usual power to sell on default of payment, and which power had been invariably inserted in all the mortgages taken by the Pulteney agent.
A power to mortgage, would seem to include in it a power to authorize the mortgagee to sell, on default of' payment; the 5 because the power to sell, is one of the customary and lawful remedies given to the mortgagee. It is a , . , „ , . . . power which has been repeatedly regulated by statute, and is, therefore, known to the law, and is in universál use. It has, consequently, become an incident to the power to mortgage, and will, of course, be included in such power, if there be nothing in the ihstrument conveying
Courts of equity look to the end and design of the parties, in considering the extent of powers, and to a substantial, rather than to a literal execution of the power. On this principle, a power limited in terms, has, in favour the intention, been deemed a general power; and a general power in terms, has been cut down to a particular purttti ,11 i,,, . pose. Why should we not conclude, that the parties, in this case, had in contemplation a mortgage in the usual sense of that security, with all the remedies then in use and v recognised by law ? It is very certain, that the mortgagee meant a mortgage with a power to sell, because it was his invariable practice to take mortgages with such a power; and when he entered into a covenant with Faulkner and others, in 1795, to sell the land, and take a good and sufficient bond and mortgage, it is to be presumed that the same kind of mortgage was understood between the parties, which was afterwards executed by jF.,and accepted by W., under the power. It is equally reasonable to presume, that Wilson, who created the power, from the proximity of his residence to the Pulteney offices, his intimacy with Faulkner, his attorney, and the general notoriety of the transactions of the agency of the Pulteney lands, must have been acquainted with the practice of the Pulteney in taking mortgages; and that he also meant a mortgage full and effectual, according to that practice, with all the ...... . customary remedies to enforce it. A power to mortgage, is a power to give the same security, under that name, in full and effectual a manner, as the party himself who 1 v ated the power could give. The letter of attorney was general in its terms. It was to give “ a mortgage,” and “to do and perform all things necessary and lawful for the consideration money.” If the power to sell was usually = , . t ' , inserted m a mortgage, as an ordinary and lawful part of it, the attorney, in this case, had authority to insert it un
Powers are construed with this liberality, and to this extent.
In Liefe v. Saltingstone, (1 Mod. 189. 1 Freem. 149. 163. 176. S. C.) the testator devised his farm to his wife for her natural life, and by her to be disposed of, to such of his children as she should think fit. She conveyed the estate to her son, in fee, and the power was held well executed, even at law. The principle of the case was, that, where the devisor gives to another a power to dispose, he gives to that person the same power that he himself had to dispose. If the devise be, that J. S. may sell my land, be may sell the inheritance.
There is much force to be given to the validity of the power to sell, from a view of the doctrine touching leasing powers. If a tenant for life has power to grant leases “ requiring the best improved rent,” he may cause tó be inserted in the leases the usual covenants as to non-payment of the rent, and a clause of re-entry upon non-payment, though the power be silent as to any covenants of that kind. These incidental provisions are considered as implied in the power of leasing. Such provisions were deemed valid, though the lease was, on other accounts, much criticised, in Jones v. Verney, (Willes Rep. 169.) and the omission of them would be fatal under such a power, according to the opinion of Lord Mansfield, in Taylor v. Horde. (1 Burr. 125.) To show the liberal construction of powers in. equity, in furtherance of the end for which they were created, we may refer to the case of Roberts v. Dixwell, (2 Eq. Cas. Abr. 768. pl. 19.) in which a power to appoint and divide an estate, was held well executed by a charge of a sum of money upon it; for though that was not within the direct terms of the power, yet Lord Hardwicke held it to be
A different construction would make the mortgage operate most injuriously upon the mortgagee; and in the present instance, by unsettling titles, it would work immense mischief. It may be observed, in aid of the construction I have adopted, that Wilson acquiesced during his life time in the execution of the power. He is presumed to have had early notice of the bond and mortgage, and of the terms of them; and not one word of objection to the power was made by him, from October, 1796, to his death, in 1814. It is with the appearance of great injustice, that his representatives should, at this day, attempt to set aside the sale upon such a pretext.
If the power be admitted to have been inserted in the mortgage by proper authority, it puts an end to the present claim. The sale was fairly made, upon the due public notice required by law. This is very satisfactorily proved, and there is no ground for the charge of irregularity, touching any part of the proceedings. Something was said upon the argument, about fraud in the sale; but there is no such allegation in the bill, nor is it made a point in the case by the plaintiff’s counsel. The charge is irregularity and want of authority; and there is nothing in the proofs to give countenance to the suggestion of fraud, had it even been made a substantive averment in the bill. The power to Faulkner to execute the mortgage, is fully proved. It was recorded in 1809, and again in 1812[;
There is not, then, any ground to impeach the title held under the sale. The mortgaged premises were purchased _ by iSamuel S. Haight, on behalf of the proprietors of the Pulteney estate; and the statute authorized the mortgagee, or any person on his behalf, to purchase. The title thus acquired, cannot, to use the words of the statute, “ be defeated in favour of, or for the benefit of, any person claiming the equity of redemption.” The only remaining pretence, upon which the sale is to be defeated, is, that the •defendants had previously conveyed a part of the premises in fee. These conveyances were made under the assumption that Wilson had abandoned all claim to the equity of redemption, and the deed from Williamson to him was in possession of the Pulteney agent. If that deed had been surrendered by Wilson, (and we cannot otherwise account for its being in possession of the mortgagee,) it affords very strong colour for the inference, that the right of redemption had been truly abandoned; and that inference is much strengthened, by his long acquiescence in the possession taken and acts exercised by the mortgagee, as owner, and by the non-payment of any part of the principal and interest of the consideration, according to contract. But I do not lay much stress on this assumed fact, of the abandonment of the equity of redemption; and I refer to it only as evidence of the good faith and sincerity with which acts of ownership over the property were exercised. On this point, however, we need not dwell; for the mortgagee, afterwards, treated the property as covered by a subsisting mortgage, and the equity of redemption was regularly foreclosed. mi ° v 1 he sales by the mortgagee could not, upon any reasonable principle, deprive him of the right of foreclosing the mortgage; nor could they prejudice the right of the mortgagor to redeem. If the mortgage was still subsisting, the purchasers under the mortgagee took subject to
A good deal was said upon the argument, touching the disclosure by Mr. Haight, of the confidential correspondence between him and Mr. Troup, during the time that he was employed to conduct the foreclosure. As I see nothing in that correspondence that applies to any part of the case, except the point of abandonment by Wilson of the right to redeem, (and on which I have not thought it necessary to dwell,) the competency of that testimony becomes immaterial. But I ought not, perhaps, to let that question pass, since it has been discussed before me, and will, probably, be discussed again, if the cause should be carried to the Court of Appeals •, and a motion was made, during the ar
Mr. Haight was employed by Mr. Troup to foreclose the mortgage, and he says, he believes that the business of conducting the foreclosure would not have been confided to himself, if he had not been a lawyer. It was professional business; and in respect to that particular transaction, the parties appear to me to have stood in the relation of attorney and client; and the communications in the letters of Mr. Troup, prior to the sale, were, upon every reasonable ground, entitled to the protection of that relation, as confidential communications. The voluntary disclosure of those letters relating to that subject, to the adverse party, I consider as a reprehensible breach of trust, and which the right and privilege of the client require should not be permitted in a Court of justice. The letters related, also, to other business, respecting the general agency of the Pulteney estate; but that circumstance does not affect the confidential communications relative to the particular business confided to him as attorney, nor destroy the confidence under which the law considers them as received. I should deem it a dangerous precedent, and one that would impair the good faith that ought to be observed, and which the public good, and those valuable interests which clients must confide to their counsel, require to be observed, to lend the sanction of this Court to the disclosures in question. Those letters are, therefore, inadmissible as evidence in the cause.
My conclusion upon the case is, that the plaintiffs are not entitled to redeem, and that the bill ought to be dismissed.
Bill dismissed, without costs.