Case ID: mass_3/html/0118-01.html
Source: Caselaw Access Project
Author: {"author": "Parsons, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Andrew Newall & Al., Admrs., versus Francis Wright.
    If money be secured by a mortgage to be paid in five years with interest to be paid annually; and at the same time a lease is made by the mortgagor to the mortgagee for the same term, reserving rent, the law will presume the mortgage to be first executed, and it will be no bar to a recovery of the rent due by the lease.
    If one demise an estate for a term of years, reserving rent, and afterwards mortgage the same estate to the lessee in fee, and the mortgagee refuses to pay the rent, the rent is suspended until the condition be performed, or the estate redeemed: during the suspension, the lessee will be accountable for the profits, as mortgagee, towards the discharge of the interest and principal of the debt: if he voluntarily pay the rent, he shall not afterwards be accountable as mortgagee for the profits for the same time.
    A mortgagee in fee may enter immediately after the execution of the mortgage, put out the mortgagor and receive the profits, if there be no agreement to the contrary; and if the mortgagor refuse to quit possession, the mortgagee may maintain trespass against him, or in a writ of entry recover against him as a disseisor.
    This was an action of debt for the rent of certain tenements demised by the plaintiffs’ intestate to the defendant by ease indented.
    [ * 139 ] * November term, 1806. The parties agreed to the following state of facts for the opinion of the Court
    
      
      “ Andrew Newall, deceased, the plaintiffs’ intestate, and FranHs Wright, the defendant, executed the deed declaied upon, March 29th, 1792, whereby the said Andrew, deceased, demised the premises described in the same deed, to the defendant for five years next ensuing the date thereof, for the yearly rent of £35, which the defendant in the same deed covenanted to pay. On the same day, at the same time, the said Andrew conveyed the same tenements to the defendant, in fee and in mortgage, to secure the payment of £300, then lent to the said Andrew, by the defendant, on or before the 29th day of March, 1797, and also to secure the payment of the interest of the same sum annually.
    And the said Andrew, by his other"deed, dated March 31, 1792, conveyed the same tenements to the defendant in fee, and in mortgage, to secure the payment of one other sum of £85 Is. 6d., lent as aforesaid, with interest, on or before the 31st day of March, 1793.
    And the said Andrew afterwards, on the 12th day of October, 1792, conveyed the same tenements to John Harris, in fee and in mortgage, to secure to him the payment of the sum of £150 with interest, on or before the 12th day of October, 1793.
    And the said Andrew afterwards, on the 24th day of August, 1793, conveyed the same tenements, in fee and in mortgage, to the same John Harris, to secure to him the payment of one other sum of £185 3s. with interest, on or before the 1st day of January, 1794; which said mortgages and the debts thereby secured, together with all his right and title in and to the mortgaged tenements, the said John Harris assigned to the defendant on the 2d day of March, 1795, for a valuable consideration.
    The said Andrew gave bonds for the payment of the several sums so as aforesaid secured by mortgages.
    The whole amount of rent, according to said indenture, which was reserved, and became due during the said term, if the same shall be adjudged to have accrued, was £175, which the said Andrew did not demand, nor receive, during said * term, nor after the expiration thereof, in his lifetime, [ * 110 ] and the whole amount of interest, which accrued, and became due on the several sums of money, so as aforesaid secured to the defendant and the said Harris, was £194 Ss., which the defendant never demanded nor received of said Andrew, and which has never been paid to the defendant.
    The defendant, on the 29th day of March, 1792, took possession of the said tenements, and held possession thereof until the 31st day of March, 1797, when under, and by virtue of the mortgages herein before described and referred to, he took peaceable and quiet possession of the said tenements, in the presence of three witnesses, after the breach of the conditions of the said several mortgages, claiming title under them, in the lifetime of the said Andrew, and held quiet and uninterrupted possession thereof, until this day; and neither principal nor interest of the mortgage money has been paid.
    The said Andreiv died in the month of July, 1798.
    If, on these facts, the Court are of opinion that the plaintiffs-can maintain their action against the defendant, judgment is to be rendered for the plaintiffs for the sum of-dollars, otherwise the plaintiffs are to become nonsuit.
    
      Warren Dutton, for the plaintiffs.
    
      F. D. Channing, for the defendant.
    The cause was argued at this term, by Jackson, for the plaintiffs, and Channing, for the defendant.
    
      Channing.
    
    The decision of this cause requires a consideration of the several and successive conveyances, and the interest of the parties as it may be inferred from their acts.
    The lease and the first mortgage are stated to have been made at the same time. The law, however, to give validity to a conveyance, and to effectuate its intent, divides an instant. As where tenant for life makes a lease for years, and the lessee surrenders to the reversioner, though executed at the same instant, the law construes them as successive acts, viz., a surrender by the lessee for years to the lessee for life, and then a surrender by lessee for life to him in reversion . So where a man grants a reversion to A., and by the same deed grants a rent out of the land to B., and [ * 141 ] delivers * the deed to both at the same time, this shall enure as to the rent first . If, in the present case, we divide an instant, and suppose the lease prior in time to the first mortgage, the grants of the plaintiffs’ intestate correspond with his title and interest. The lease was then merged in the mortgage, as the mortgage of the lessor to the lessee was, by operation of law, a surrender of the lease, and became the only existing grant and estate .
    If we suppose the lease and first mortgage simultaneous, the right of the plaintiffs to recover is no better than on the other ground. The term must be considered as extinguished at the moment of its creation. The rent follows the reversion, as the union of the term and the reversion constitute the whole estate. “ Terminus ac fcedum non possint constare in una et eadem persona.” And whether the grant of the reversion was absolute or conditional, makes no difference as to its effect .
    If the mortgage is supposed to have been made prior to the lease, the plaintiffs might perhaps in this case have relied safely on the estopel. But on this supposition, the Court are perhaps as much bound to see the true titles and consequential rights of the parties, as if, on a plea of nil Jiabuit in tenementis, the plaintiffs had taken issue, and the jury had found the title, which the parties on such supposition have admitted . On this ground, therefore, it is conceived, the defence is perfect.
    If the preceding argument should be considered as founded on matters intended rather for curious speculation than serious application, the other facts in the case will lead to the same conclusion, without suggesting the same objection. The mortgages and assignments, subsequent to the lease, have, it is conceived, divested the plaintiffs, and their intestate, of all right of action, if any such right previously existed.
    That this is the effect of the later conveyances, never would have been questioned, but for the popular error that a fee conditional is not so large an estate as an absolute fee simple. This notion, however, is contrary to the language of * Colee [ * 142 ] and Mansfield, and to our own decisions. The mortgagee is, and ever has been, considered the legal owner of the land, and, as such, entitled to the possession, rents, and profits. The mortgagor, though in possession, has no legal estate, not even a tenancy at will . The performance of the condition or cancelling the deed, may give the mortgagor an equitable right to the land; but at common law nothing less than the deed of the mortgagee will revest the estate .
    On this ground it is contended that, the second mortgage gave the defendant an interest in, and right to, the rent reserved upon the lease. A grant of the principal is a grant of the incident.
    This will appear plainly, if we only suppose the second mortgage to have been made to a stranger, instead of the defendant; and this is one of the cases which calls for the application of the maxim, “ (finando duo jura in una persona concurrunt, cequum est ac si in diversis” 
      .
    The defendant being the first mortgagee as well as lessee, the second mortgagee might have required him to pay him the rent as the grantee of the mortgagor, or to retain the rent on his own bond and mortgage. If, on such notice and request, the defendant had paid the rent over to the mortgagor, it would have been a payment in his own wrong; and on a redemption by the second mortgagee, he would be compelled to account for and allow the amount . Shall then the second mortgage be more limited in its operation, because made to him, than if it had been made to a stranger?
    A consideration of the facts and parties, as they are, must lead to the same consequence. The acceptance of the second mortgage by the defendant, after the lease, operated as a surrender of the lease, and the purchase of a new estate. Hence the right of the plaintiffs’ intestate to rent was thereby completely extinguished .
    If it should be argued, in answer to this reasoning, that, from the transactions previous to the second mortgage, if it [ * 143 ] * might be inferred that the intent of the lease was to create a rent charge, the plaintiffs’ demand would derive no support from such a construction. For where there is a rent charge, and the grantee afterwards enfeoffs the grantor of the land charged with the rent, the rent charge is thereby released .
    Should the relation between the plaintiffs’ intestate and the defendant in any way affect the argument, between the intestate and Harris no such relations existed. When applied to his mortgages, in' which no notice is given of the lease, it is certainly conclusive. It cannot be denied that the right of the intestate to rent, if not divested, was hereby transferred, and, by the assignment of Harris to the defendant, was either vested in him or fextinguished.
    The defendant relies on these principles of law, as equally applicable to his case, and promotive of justice. They will, if enforced, carry into effect the intent of the parties, which, if not wholly repugnant to general rules, should Be the law of every case.
    
      Jackson, e contra.
    
    As to the first point made by the defendant, that the lease and the first mortgage being made at the same time, the lease was merged, and the right to the rent extinguished; this defence is equivalent to “ nil hahuit in tenementisand the lease being by indenture, the defendant is estopped to plead this, and of course cannot avail himself of it on this statement of facts. But without relying on the estopel, it is contended that there was no merger nor extinguishment. The two instruments being made at the same time, they must be considered together, to ascertain the real intention of the parties. It could not be their intention to destroy this lease at the moment when both parties were executing the indenture to create it . Both the instruments constitute but one contract, “ qua incontinenter Jiunt, inesse videntur.” That contract was, that, notwithstanding the mortgage, the mortgagor should continue in possession; that his lessee should still hold the premises, and pay the rent to the mortgagor. They have put it on trie same footing as if the lease had been made to a stranger, and the * mortgagee had agreed that the [ * 144 ] stranger should hold the premises during the term, and pay the rent to the mortgagor.
    Then, supposing the lease not to have merged in the first mortgage, did it merge in the second ? If it did, it must have been by operation of law merely, without the intent of the parties, and obviously contrary to their intention. The debt secured by that second mortgage was payable long before the expiration of the term; and the parties must have contemplated that the money would be paid when due, and that each party would thereupon be reinstated in all his former rights.
    No one will doubt, that the conveyance of an absolute fee simple to a lessee for years, or, in other words, an absolute assignment to him of the reversion, will merge his term, and extinguish the rent; and it may be admitted that a conditional fee is as large an estate as a fee simple without condition ; but it by no means follows that a common mortgage in fee simple will necessarily produce such a merger . It might have been so considered in ancient times ; but it is believed that no case to that effect can be produced latei than the time of Elizabeth. In modern times, courts of common law, as well as chancery, consider a mortgage according to the real intention of the parries, as a collateral pledge or security for the debt. The debt is the principal; the land pledged is the incident. When the debt is paid, the land is relieved from the encumbrance ; the lien upon it is discharged; and the estate of the mortgagor is revested, as if the land had never been pledged . Accordingly it is well settled in the modern books, that, even after the condition broken, if the land is redeemed, the widow of the mortgagee is not entitled to dower; though by the ancient common law she was entitled .
    The estate of the mortgagee is treated, in many cases, by our legislature, as a chattel interest. Thus, if the equity of redemption is not foreclosed in the lifetime of the mortgagee, it is distributable as personal estate, and does not descend to the heirs as real estate.
    
      [ * 145 ] * The consequences of the doctrine maintained by the defendant would be highly inconvenient and injurious. Suppose a lease for ten or twenty years, and a mortgage the next day by the lessor to the lessee, for a small sum payable in one year; the money is paid at the day; yet the term would be merged and extinguished, however beneficial to either party. It may be replied, that it is their folly to make such a mortgage; but it is obvious that the same effect may be produced, without any folly or negligence in the suffering party. The merger, in such a case, is effected, not by the intention or contract of the parties, but by the mere operation of law, from the single fact of the union of the two estates in the same person. Then suppose a long lease, and a subsequent mortgage by the lessor to a stranger; if the rent be high, or the lease become, from any cause, unfavorable to the lessee, he may purchase an assignment of the mortgage, and his rent will be forever extinguished.
    It is then-believed that the second mortgage to the defendant did not necessarily produce a merger and extinguishment of the term ; and the case will then rest on the same principles, as if the lease had been jnade to a stranger. Á mortgagee is not generally entitled to the rents and profits until an actual entry. He cannot, after entry, maintain trespass against the mortgagor for the mesne profits ; the mortgagor is not a trespasser. Neither is he a tenant to the mortgagee; he cannot, therefore, be sued for use and occupation . If there be a subsisting lease, made prior to the mortgage, the mortgagee cannot enter; but may give notice of his title to the tenant, and will be entitled to all the rents incurred since the execution of his mortgage, which remain unpaid. This is the rule in England, where the mortgagee, in such a case, may distrain for the rents; though it is not easy to see what would be his remedy here, when the rent is reserved by indenture. The lessee could not be affected by this transaction between third persons: he would still be liable only on his covenants; and how could the mortgagee make proferí of the indenture. Suppose the rent payable I * 146 ] * quarterly, and the mortgage made in the middle of a quarter; the rent could not be apportioned, as that would expose the lessee to two actions for a single debt; and neithei mortgagor nor mortgagee could sue for the whole.
    But if t'nis difficulty were obviated, and the English principle should be adopted here, it remains to be inquired whether the mortgagee in this case has given such notice; or, as he was himself the lessee, whether he has done any act equivalent to such notice; whether he has manifested an intention to retain those rents in virtue of the mortgage, and has apprized the mortgagor of that intention. It will be observed that, if the lessor had been a stranger, and the mortgagee had given him this notice, and claimed the rents, the mortgagor would be apprized of it; he would know that he was no longer receiving the rents, but that they were received by the mortgagee, and applied toward the payment of the debt; and when afterwards the entry was made for the condition broken, the mortgagor would decide, whether he would redeem the land by paying the residue of the debt, or suffer the redemption to be foreclosed, and the land to be held in payment of that residue.
    
    We contend, therefore, that, if the defendant had claimed to retain the rents in virtue of the second, or any of the subsequent mortgages, he ought to have manifested that intention by some clear and unequivocal act; some act which would have been equivalent to an actual receipt of the rents, if the lessee had been a stranger, and which would operate as equally direct notice to the mortgagor. The latter ought not to be left in ignorance or doubt, for what sum his estate is taken, or at what price he must redeem it. The defendant, instead of manifesting such an inten tian, has unequivocally shown the contrary. He was in possession under the lease, which remained valid and effectual at the time the second mortgage was made; yet even after the conditions of this, and of the subsequent mortgages were broken, he still abstained from entering, or claiming any thing under those mortgages, until the day when the term expired; showing clearly that he was hold ing all that time under the lease only.
    The principle, on which we rely for the support of this part of the argument, is, that when a mortgagee enters for * the condition broken, he elects to take the land in full [ * 147 J discharge of all the money then due, and if the mortgagor suffers the redemption to be foreclosed, that shows his election also ; and the debt is forever discharged. The mortgagee cannot, therefore, afterwards claim to retain a further sum on account of that debt, the whole of which is paid by the land. Suppose, instead of entering in March, 1797, he had sued Newall, on the bonds, and had recovered judgment and satisfaction for the whole amount; he could not afterwards withhold the rent. We contend that his entry was equivalent to such a suit, and the subsequent foreclosure is equivalent to such a judgment and satisfaction in the suit. If these rents had been previously retained, and applied by the defendant towards the discharge of the debt, Newall might have pleaded or shown the amount as a payment in such a suit on the bonds. The rights are mutual. If one could retain it as a payment, the other might plead it as a payment: yet it seems very clear that Newall could not have supported such a plea; the mortgagee would have proved, from the circumstances before alluded to, that he had never taken, nor claimed the land in virtue of the mortgages, and that he had held under the lease only. Then the rents had not been previously appropriated by either party towards the payment of the debt; of course the whole debt remained due in March, 1797; and the whole was discharged by the entry and subsequent foreclosure.
    It is admitted, that in England an entry for the condition broken, does not, in all events, operate to discharge the debt; the mortgagee, even after a foreclosure, may sue on the bond. But the chancery will consider that as opening the foreclosure; and the right of redemption is restored to the mortgagor, as it was at the time of the first entry . This is undoubtedly founded on principles of equity and justice; but it is apprehended that our courts have not power to apply and enforce it. The foreclosure here is not decreed by a court of chancery, but is effected by the mere lapse of time, after entry for .the condition [*148] broken . And when *the right of redemption is once lost, we have no court that has power to restore it on any terms. If, therefore, we adopt the chancery principle, we can enforce it only in part; we can apply only that part of it which operates against the mortgagor, and cannot afford him the equivalent, without which the principle is no longer equitable nor just.
    It is said, however, that our courts have, in some instances, permitted a mortgagee to recover his debt, or part of it, after a foreclosure ; and one such case is suggested to have been adjudged in this country. But a few cases, which pass without objection, and perhaps without observation, cannot settle the law. If the principle should be adopted here, with the restriction before mentioned, it would be the only instance, in which a man is made to part with his inheritance, without an equivalent agreed upon (either expressly or tacitly) by himself. If his land is taken on execution, he knows the price affixed to it, and is allowed one year to decide whether he will part with it at that price: if he chooses not to redeem, the land pays so much of his debt. So, if the mortgagee enters for the condition broken, the mortgagor has three years to decide whether he will redeem: if he does not, he considers that the land has paid the debt, and he is willing to part with it at that price. But :f the mortgagee can afterwards recover any part of that same debt, the mortgagor will lose his land, when, perhaps, he would rather have redeemed. The courts of chancery were aware of the injustice of this consequence, and, therefore, restored the right of redemp tian : if our courts had power to do the same, there would be no objection to adopting the rule here.
    If the foregoing reasoning is correct, the mortgage to Harris cannot affect the result. If the defendant is to be considered as the holder in virtue of the assignment to him, it will be governed by the same principles as the second mortgage, which has been already considered. If Harris is considered as the holder, a further answer may be given.
    We have no court of chancery to compel the prior mortgagee to receive the rents, or account for them, towards his debt. Of course, the only mode, by which Harris could avail himself of the right alluded to, would be to make an * actual [ * 149 ] entry, or to do what is equivalent, by giving notice to the tenant, and claiming the rents; after which, he would actually receive the rents and profits, either by his own occupation, or from the tenant in possession, until the prior mortgagee should choose to enter under his mortgage. If the prior mortgagee should enter, he would actually receive the rents in the same manner; in which case there would be no need of a court of chancery to make him account for them towards his debt. The facts before mentioned, in relation to the second mortgage, prove that neither Harris, nor the defendant, as his assignee, ever did enter, or do any equivalent act. It follows, then, that the mortgage to Harris cannot defeat the present action.
    
      Charming, in reply.
    
    The answer of the plaintiffs to the principles and arguments urged by the defendant, is limited to three points.
    1st. That great inconvenience would result from determining that the second mortgage should merge the lease. But the law has provided against this inconvenience. A lease for years may be suspended, and cease for a time, and then revive . Hence, though it is admitted that the lease and rent might have revived, yet it must also be admitted that they were actually suspended; and on the state of facts, whatever right of action the plaintiffs’ intestate might have had, was completely extinguished by the second mortgage.
    2d. The plaintiffs contend, that, although the defendant might have entered and held under his mortgages, or the assignments to him, yet the presumption, resulting from the facts agreed on, is, that he did-not, but that he held only under his lease, &c. As to this position, it is sufficient to say, that where the grantee of an estate has different titles, he may elect to enter under which he will, and if his election do not appear, the law presumes him to be in of his best title. In this case, however, if, as it is contended, the second mortgage, or the subsequent conveyances, suspended, ot extinguished the lease, then the defendant had but one title under which he could hold. But should it be decided that [ * 150 ] * there was an election left to him, notwithstanding the ■■ several conveyances, the non-payment of the rent is conclusive evidence of his election. His only legal right to it was as mortgagee. But as he could not sue himself for the rent as lessee, his only remedy was by retainer, which is tantamount to a judgment and execution levied for the rent against a stranger, who might have been tenant of the land . The consent of the lessor to this application of the rent must be inferred from his having made no demand of it. From all which the intent of both parties is plainly proved, and that it was the same. The formal entry by the defendant, under the mortgages for the condition broken, does not raise the slightest presumption to the contrary. To foreclose the equity of redemption, by possession for three years after condition broken, and entry on the mortgaged tenements, must be made in the presence of two or three witnesses, and this form must be observed, notwithstanding a prior possession; at least it is so usually practised. This fact, therefore, at most, proves the defendant’s construction of the law, but it is no evidence of his intent in any previous act.
    3d. The third point relied upon, by the counsel for the plaintiffs, is, that the defendant, having elected to take the estate mortgaged in payment of his debt, has thereby received full satisfaction, and, therefore, has no right to retain the rents which accrued during the term. It is denied that the entry of the defendant on the mortgaged tenements, and the foreclosure which has succeeded, afford any thing more than presumptive evidence of the land being of sufficient value to satisfy the debt. So far is it from being conclusive, that actions have been maintained on bonds secured by mortgages, wherein it was shown that the land taken under, and by the mortgages, was not of sufficient value to discharge the debt, and the balance due, after deducting the value of the land, has been recovered . And in this case it is to be presumed, that the defendant’s estate in the mortgaged tenements, from the commencement of his title, is only adequate to the discharge of the debt, as the plaintiffs’ intestate neither redeemed the estate, nor sold the equity of redemption.
    
      *But this position admits of a reply, which strips [*151 it completely of its specious appearance; a reply not founded in the calculation of probabilities, but on the maxims o« law. The defendant, in this case, has an absolute estate in the tenements, which, it is contended, he held under the lease of the plaintiffs’ intestate. If the lease and mortgages existed together, and the rent has not been paid, then, as the grantee of the reversion, he has a right to the rent that has accrued since the commencement of his estate. Whether this was conditional, or absolute from its origin, is of no importance. Since the doctrine of attornment has been abolished, notice from the grantee of the reversion to the tenant before payment, gives him a perfect right to the rent, &c. . A retainer in this case isa legal substitute for notice, demand and action in the former, and is the legal exercise of the right the defendant claims.
    The language of the plaintiffs is incorrect, admitting the position, which they wish to establish, to be true. It is the mortgagee’s estate in the land mortgaged, as well as possession, which must discharge the debt secured by the mortgage. The answer to the inquiry, “ When did the estate commence ? ” shows that the plaintiffs’ position supports the defence, instead of invalidating it. The execution of the mortgage deeds was the commencement of the defendant’s estate ; and consequently the satisfaction of the deb secured by them is the rents and profits of the estate from that time If the mortgagor had received them, it must have been in the character of trustee of the mortgagee ; if a tenant owes them, the mortgagee, after notice and claim, is the legal creditor; if the mortgagee has received them, they are deposited in the right hands, to be accounted for on a redemption of the estate.
    
      
       3 Leo. 247.
    
    
      
      
        Finch, 18, a.
      
    
    
      
       2 Rep. 61.—Com. Dig. Tit. Surrender, I
    
    
      
      
        Term R. 378.—Birch vs. Wright.
      
    
    
      
      
        Cro. Car. 110.—Com. Dig. Tide Pleader, S. 5.—1 Salk. 276.
    
    
      
      
        Keech vs. Hall, Doug. 21.—Moss vs. Gallimore, ibid. 266.—1 Term R. 378,
    
    
      
      
        Harrison vs. Owen, 1 Atk. 520.
    
    
      
      
        Plow. 368.
    
    
      
      
        Powell on Mortgages, 453, Dub. Edit.
      
    
    
      
      
        Shep. Touch. 300.
    
    
      
      
        Godbolt, 137.—Winch. 109,121.—Hilliad vs. Saunders.
      
    
    
      
      
        Taylor vs. Horde & Al., 1 Bur. 60 106.
    
    
      
      ]3) 2 Vern. 90. Powell vs. Morgan.
      
    
    
      
      
        Powell on Mortgages, 11.
    
    
      
      
        Powell on Mortgages, 9.
    
    
      
      
        Birch vs. Wright, 1 Term 12. 378.
    
    
      
      
        Dashwood vs. Blythway, 1 Eq. Ca. Abr. 317.—Towke vs Hartley, 2 Bro. C C 125.
    
    
      
      
        Stat. 1785, c. 22
    
    
      
      
        Shep. Touchstone, 300.
    
    
      
      
        Toller, 186.
    
    
      
       See the case of Amory vs. Fairbanks & Al., in Suffolk, 1793.
    
    
      
       1 Term R. 378, by Buller, J.
    
    
      
      
        Doug. 21.
    
   The opinion of the Court was afterwards delivered by

Parsons, C. J.

This cause has been very well argued by the counsel on each side. The execution of the lease declared on being admitted, and it being agreed that no rent has been paid, the plaintiffs must recover, unless they are barred in consequence of some of the facts disclosed by the case.

The defendant insists that the plaintiffs are barred, because * on the same day, and at the same time, the [ * 152 ] lease was executed, the intestate conveyed to him, in fee simple, the premises demised, on condition that the conveyance should be void on payment of 1000 dollars, in five years, with interest, to be paid annually, which condition has never been per formed; which mortgage, he says, is in law an extinguishment, or at least a suspension of the term created by the lease.

It is generally true that the conveyance of a greater estate, inconsistent with a less estate before granted, shall merge the less estate. But in this case we do not think the rule will apply. It is very clear that when a man, seised of lands in fee, shall mortgage them in fee, if there be no agreement that the mortgagor shall retain the possession, the mortgagee may enter immediately, put the mortgagor out of possession, and receive the profits ; and if the mortgagor refuses to quit the possession, the mortgagee may consider him as a trespasser, and may maintain an action of trespass against him, or he may, in a writ of entry, recover against him as a disseisor . But there may be an agreement that.the mortgagor shall retain the possession until the condition be broken, which shall bind the mortgagee ; in which case the mortgagor may demise the estate to a stranger, and receive the rents to his own use. And upon the same principle, we are satisfied that the mortgagee, if he consent to take a lease from the mortgagor, and covenant to pay him rent until the condition be broken, shall be bound by his covenant, and shall not be admitted to set up his mortgage against the lease. The demise is in law an agreement that the mortgagor shall retain the possession, and receive the profits to his own use.

To avoid this conclusion, the defendant’s counsel would induce the Court to suppose that the lease was first executed, and after-wards the mortgage. When different instruments are executed at the same time, but are all parts of one transaction, it is the duty of the Court to suppose such a priority in the execution of them, as shall best effect the intention of the parties. As the lease is for five years, and as the money secured by the mortgage was to be paid in the same time, it is apparent that the lease and the mortgage were intended to execute one contract; and to give complete operation to both these deeds, it is reasonable to suppose [* 153] *the mortgage first executed. For if the lease had been first executed, and the mortgage intended to control the lease, no reason can be given why the lease was not in fact surrendered, as of no effect between the parties. It is therefore our opinion that the execution of the first mortgage is no bar to the recovery of the rent due on the lease.

The defendant further objects that if the first mortgage is not a bar, yet the second mortgage, made two days after, on his advancing the mortgagor a further sum of money, is in law a bar to the plaintiffs’ recovery

This objection appears to deserve consideration. In considering it, we may lay the first mortgage out of the case, and suppose the question to arise on a lease made by a man seised in fee, who after-wards conveys the premises to the lessee in fee, on condition that the conveyance be void upon his paying a sum of money to the lessee at a future day. If the lessor, having the reversion in fee, make an absolute conveyance of the estate in fee to the lessee, with out doubt the term is extinguished. If he convey the estate in fee to a third person, the rent shall pass as incident to the reversion. But if he mortgage in fee the estate to a third person, the mortgagee may receive the rent as incident to the reversion, or permit the mortgagor to receive it, at his election . If he do not act to show his election to receive the rent, the mortgagor shall recover it of the lessee, who cannot plead the mortgage in bar. But as the mortgagee cannot put the tenant out of possession, if he demand the rent of him, the tenant must pay it to him; and if, after demand, the tenant shall pay it to the mortgagor, he' will pay it in his own wrong.

In the case at bar, the mortgagee is the tenant, and he cannot demand the rent of himself. If he refuse to pay it to the mortgagor, he must be considered as claiming the rent, if by law he may be entitled to it; and this refusal is sufficient notice to the mortgagor

The legal effect of this reasoning is, that when the mortgagee shall refuse to pay the rent, the rent is suspended until the condition of the mortgage be performed, or the estate be redeemed ; and upon either event the rent will again become payable, if the term has not in the mean time expired. And * during [ * 154 J the suspension the lessee will, as mortgagee, be accountable for the profits to the mortgagor towards the payment of the debt, first keeping down the interest; and of the value of the profits the reserved rent will prima facie be evidence. If, however, the lessee shall voluntarily pay the rent to the mortgagor, he shall not afterwards be accountable, as mortgagee, for the profits received for the same time.

To confirm this reasoning, let us consider the right of Harris, a subsequent mortgagee, which cannot be better than the right of the mortgagor, which is conveyed to him. As Harris could not put Wright out of possession, he might demand of him the rent. If Wright voluntarily paid it, Harris must account for it with Neioall towards the payment of his debt. But Wright might refuse to pay it, claiming the possession- under his prior mortgage; and then he must account for the profits to the mortgagor towards the debt Otherwise the mortgagor, after a second mortgage, might, by collu sion with the first mortgagee, receive the rent, and, by not applying it to the discharge of the first mortgage, injure the subsequent mortgagee. For he, by his subsequent mortgage, is, from the time it was made, entitled, not only to the possession, but to the profits, against the mortgagor, and subject only to the rights of the prior mortgagee. Therefore, if the mortgagor should refuse to redeem, Harris may redeem Wright’s prior mortgage; and if Wright had refused to pay Harris the rent when demanded, and had not paid it to the mortgagor, Harris, when he redeems, may compel Wright to account for the profits, as received towards the payment of .his prior mortgage .

Upon these principles no injustice is done to the parties, but every equitable allowance is made. If neither the mortgagor nor any subsequent mortgagee will redeem, the presumption is violent, that the land, together with the profits received, is not worth more than the debt and interest due. If it should be worth less, and the first mortgagee should sue the mortgagor to recover the deficiency, in that suit the mortgagor will be allowed, not only for the value of the lands, when the mortgagee took possession, but also for all the profits he received after possession .

[ * 155 ] *The right of the mortgagee, who had entered under a lease prior to the mortgage, to hold the possession as mortgagee, is admitted by the plaintiffs’ counsel, if the mortgagee had made his election so to hold ; and he insists that the evidence of this election ought to be notice to the mortgagor that he shall no longer hold under the lease, and, further, that no such notice appears in the case; but that it "is expressly stated that he did not enter under the mortgages, until a time after the term was expired.

The objection that it appears from the case that the mortgagee did not enter until after the expiration of the term, deserves further consideration.

Our statute, granting equitable relief to a mortgagor, provides that he may redeem at any time within three years after the entry of the mortgagee, for the condition broken, in the presence of two witnesses, or by judgment at law. Generally, a mortgagee, when the mortgaged lands, without the profits, is a sufficient pledge for the debt and interest, does not choose to enter and take the profits for which he must account, until after condition broken. His entry then is to compel payment, by threatening to foreclose the mortgage

But at the common law, if there be no agreement that the mortgagar retain the possession, the mortgagee has a legal right immediately to enter, and to put the mortgagor out of possession. And this right, the statute, fixing the time when the three years shall commence, has never been construed to control. When the mortgagee enters after condition broken, the three years commence on that entry. If he enter before, the three years do not commence until notice by the mortgagee to the mortgagor, after the condition broken, that he shall hold the possession for the breach of the condition .

In the present case, the entry after the condition broken could give Wright no new possession, it being also agreed that he took possession when the lease was executed, and has ever since held the possession. The fair construction of the agreement stated in the case is, in our opinion, that Wright, from the time agreed, held the possession of the mortgaged premises for condition broken, and that he is not * concluded, by that agree- [ * 156 ] ment, from claiming the possession before that time under his second mortgage.

The counsel for the plaintiffs correctly contends, that the mortgagee shall be considered as holding under the lease, until he has made his election, and given notice of it to the lessor, to hold under his subsequent mortgage, or done some act equivalent. It is not necessary for us to determine whether the non-payment of the rent, when due, is alone evidence of this election and notice. The argument for it is, that non-payment of money, when due, is, in law. a refusal. If the mortgagee held under the lease, this non-payment is an unlawful act; but if he held under his mortgage, it is justifiable ; and the Court ought to presume every act lawful, until its illegality is proved.

The argument on the other side is, that, as he once held under the lease, no mere nonfeasance shall be sufficient to transfer his right of possession to another subsequent title. But we are all of the opinion that Height’s never paying his rent, nor demanding his annual interest, during the term, connected with the lessor’s never demanding the rent, nor paying any interest, and suffering Wright to enter for the purpose of foreclosing the mortgage, and not redeeming the same, is sufficient evidence of the lessee’s election to hold under the mortgage, and of the lessor’s assent that he should so hold.

According to the agreement of the parties in the case, the plain tiff must be called.

Plaintiff nonsuit. 
      
      
        [Goodwin vs Richardson, 11 Mass. 469.—Erskine vs. Townsend, 2 Mass 493.— Taylor vs. Weld, 5 Mass. 120.—Colman vs. Packard, 16 Mass. 39.— Ed.]
     
      
      
        [Montagu vs. Gay, 17 Mass. 439.—Keay vs. Goodwin, 16 Mass. 1.—Ed.]
     
      
      
        [Bigelow vs. Wilson, 1 Pick. 485.—Ed.]
     
      
      
        Amory vs. Fairbanks & Al., post, 562.—Ed ]
     
      
      
        [Erskine vs. Townsend, 2 Mass. 493 Pomeroy vs. Winship, 12 Mass 514.-Scott vs. McFarland, 13 Mass. 309.—Ed.]