Case ID: johns-ch_7/html/0025-01.html
Source: Caselaw Access Project
Author: {"author": "The Chancellor.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Wilson and others against Troup and others.
    A power to mortgage, includes a power to execute a mortgage containing a power to the mortgagee to sell the premises, in default of payment; it being one of the usual and lawful remedies given to the mortgagee, known to the law, and regulated by statute.
    A sale or lease of part of the premises, by a mortgagee, before foreclosure, does not prejudice or affect the right of redemption of the mortgagor; nor does it deprive the mortgagee of the right of foreclosure.
    THE bill, which was filed by the children and heirs at law of William Wilson, deceased, stated, that W. Wilson, some time previous to the 6th of October, 1796, contracted with Charles Williamson for the purchase of 6000 acres of land ; that W. W., on the 6th of October, 1796, executed a power of attorney to Daniel Faulkner, for and in the name of W. W., to ask, demand and receive of C. W., deeds for the 6000 acres of land, (describing it,) and “ to sign, seal, deliver and acknowledge, a mortgage or mortgages of the before mentioned 6000 acres, to the said C. W,, and "bonds, to the amount of the consideration money remaining due, and payable by him, to the said C. W., according to an agreement between them,” Sic. He, thereby, giving and granting to his said attorney, his “ full power and authority to do and perform all things necessary and lawful, to the obtaining to him and to his use, the title to the said 6000 acres of land, and securing the consideration money therefor to the said C. W.,” Sic. That on the 21st of October, 1796, C. W., by indenture, for and in consi-1 deration of 795 pounds, granted and conveyed to W. W. and his heirs, the undivided fourth part of the north-west quarter of township No. 6, containing 6000 acres, Sic. excepting 700 acres before granted to other persons. On the same day, F., in the name of W. W., executed a bond and mortgage to C. TV., for the sum of 1115 pounds, payable on or before the 19th of June, 1800. The mortgage was in the usual form, with a power of sale, and was registered in the Clerk’s office of Steuben county, October 27th, 1796. The bill alleged, that F. exceeded his power, in giving the bond referred to in this mortgage, for a greater sum than the consideration money of the premises conveyed to W.; and in inserting in the mortgage a power of sale. The bill stated the assignment of the bond and mortgage by C. TV. to Sir William Pulteney, his death, the descent to Lady Bath, her death, and the descent to Sir John L. Johnstone; and that letters of administration on the estate of Sir W. P., in this state, were granted to Robert Troup. That Troup, by virtue of letters of attorney from Sir W. P., and from the heirs of Sir W. P., after his death, sold and conveyed parcels of the mortgaged premises, in fee. And, that John Fellows, who was afterwards appointed by Sir J. L. Johnstone and his wife, their attorney, in the place of T., sold and conveyed parcels of the mortgaged premises, in fee. That T., as the administrator of Sir W. P., advertised the mortgaged premises for sale at public auction, under the power of, sale inserted in the mortgage; and they were accordingly sold, in April, 1811, to Samuel Haight, the highest bidder, for 3§0 pounds. That Haight became the purchaser at the request of T., who, on the 1st of October, 1811, by J. F as his attorney, conveyed the premises, by deed in fee, to Haight, who, on the day following, for the consideration of one dollar, conveyed the same to Sir John L. John-stone. The bill charged, that the sale was unauthorized by law, as the power of sale was inserted in the mortgage without any authority from W., and without his knowledge. The bill alleged, that W. had no notice whatever of the sale. That in 1812, a short time before his death, W., having heard that the premises were intended to be sold, went to Bath, in Steuben county, for the purpose of preventing a sale, when he learned, for the first time, that the premises had been sold. That in 1812, or the beginning of 1813, S. Duncan, as agent of W., inquired of T. whether he would receive the money due on the mortgage; or, if he declined, whether he would be satisfied with a tender of the money in bank bills, to save the expense and trouble of procuring specie ; and that T. replied, in substance, that the claim of W. was unjust, and he would have nothing to do with it. The bill further alleged, that the proceedings for procuring the sale at auction, were irregular, and that no sufficient advertisement was published in Steuben, or any other county. That C. W., after the execution of the mortgage, and before the death of Sir W. P., conveyed three-fourths of the north-west township to him, and parcels were sold to settlers. That the rents and profits of the mortgaged premises received, are more than sufficient to satisfy the mortgage ; and that the securities taken for the parcels sold, exceed the amount of the mortgage debt; and the plaintiffs claimed an account of the moneys received, and of the rents and profits, &c., and of all contracts and ... sales of parts of the premises ; and they offered to pay the balance, if any remained due on the mortgage, and prayed to be let into possession of the premises; and that the defendants be required to assign to them the bonds and mortgages, &tc. taken on sales of parts of the premises, 8ic., and for general relief.
    The defendant, Troup, in his answer, denied any knowledge of any agreement between W. W. and C. W., but set forth an agreement made the 4th of August, 1795. C. W. entered into a covenant with Charles Hall, Daniel P. Faulkner, Michael Freeland, and William Dunn, to convey to them, on or before the year 1798, in fee, as tenants in common, the north-west quarter of township No. 6, in the sixth range, in Ontario county; on condition, that they should give C. W. one dollar and fifty cents an acre; and, to secure the payment, execute a bond and mortgage of the land, payable June 19th, 1800, with interest, and give a bond to place twenty-four settlers on the land in two years. By an indorsement on the agreement, it was made a further condition, that no deed should be demanded, until full compensation was made for the mills built on the land, and security, by bond and mortgage, given for the payment, with interest, in four years; and C. W. engaged to give them a warrantee deed for the mills. That Charles Hall, on the 13th of October, 1795, assigned to William Wilson all his right in the contract. This defendant admitted the power of attorney given by W. W. to Daniel Faulkner, who was averred to be the same person named in the agreement, as Daniel P. Faulkner. This defendant averred, that Wilson had no right to more than about 1325 acres, or to demand a deed for a greater quantity. That on the 21st of October, 1796, F. and C. W. accounted together, with respect to the purchase money, for the said quarter township, and in respect to Wilson’s rateable share of the cost of the mills, and of the interest, &c.; and there was then found due to C.W. 1115 pounds; and, thereupon, C. W. executed a deed to Wilson, for the one-fourth of the quarter township, excepting the said 700 acres, for the consideration of 798 pounds, as stated in the bill, which deed included the mill lots ; and that, on the same day, Faulkner, as attorney of W., in his name, executed a mortgage of the same premises to C. W., for securing the payment of 1115 pounds, and which mortgage contained a power of salé, in the usual form. That the 1115 pounds' was the true consideration, and ought to have been so expressed in the deed, as well as in the mortgage, but was omitted through carelessness or ignorance. The defendant denied that F., in executing the mortgage, had exceeded his power ; and that the power of sale contained in it, was according to law, and the common usage and practice in such cases j and had been the uniform practice of the land offices established by the agents to the Pulteney estate, on taking mortgages, to secure the purchase moneys for lands sold. That no objection to the form of the mortgage, was ever made by Wilson. That C. W. assigned the bond and mortgage to Sir W. P., as stated in the bill. The defendant admitted that he took out administration on the estate of Sir W. P., and that his daughter, who was his heiress at law, died intestate, by which the real estate descended to Sir John L. Johnstone, as stated in the bill. That C. W. ceased to be the agent of the estate in 1801; and at that time, and long before, was in the quiet possession of the premises ; and this defendant, on being appointed agent, came into the possession of the premises, and has since remained in the quiet possession of them, until the filing of the bill by the plaintiffs. That Wilson, having met with misfortunes, it was agreed, or was understood, as the defendant believed, that C. W. should not demand the payment of the money due on the bond and mortgage, and Wilson should not claim the mortgaged premises; and that this belief was confirmed by the fact, that this defendant, on succeeding to the agency of the Pulteneye state, received, among the papers, the very deed, stated to have been executed by C. W. to Wilson, for the premises mortgaged, and which deed the defendant offered to produce. Thatthese circumstances induced the defendant to believe, that the mortgaged premises had been abandoned by Wilson; and this defendant, therefore, considered the premises as the absolute property of th ePulteney estate, and did not, therefore, scruple to sell various parcels of the land, before any foreclosure of the mortgage ; and that C. W. had before caused the premises to be surveyed into lots, and had sold several lots. That the defendant, notwithstanding the circumstances above stated, deeming it more legal and fit, that the equity of redemption should be legally extinguished, caused a letter to be written to Wilson, on the 22d of June, 1807, by Samuel S. Haight, his assistant, requesting Wilson to release the equity of redemption ; and he denied that the letter contained any request to Wilson td pay the moneys. That Wilson declined executing the release, unless he received a compensation ; but did not offer to pay the mortgage money, or pretend that he had a right to redeem. That the mortgaged premises comprise part of Dansville, which has become-a thickly settled and flourishing village. That to protect the settlers, and prevent prosecution of the equity of redemption to their injury, the defendant, as administrator of Sir W. P., by virtue of the power contained in the mortgage, and pursuant to the statute, on the 16th of October, 1810, caused the premises to be advertised for sale, and published once a week, for six successive months, in a newspaper printed at Canandaigua, in Ontario county, which was nearest to the premises, there being no newspaper published in Steuben county. That on the 18th of October, 1810, a copy of the advertisement was affixed on the outward door of the court-house of Steuben county, where the mortgaged premises were situated, and which was continued for six successive months. That at the expiration of that period, on the 22d of April, 1811, the premises were sold, pursuant to the advertisement, and purchased by Samuel S. Haight, at the request of the defendant, for 350 pounds, H. being the highest bidder. That a deed was, in due form, executed by John Fellows, as substitute for the defendant, to Haight, who, afterwards, for the nominal consideration of one dollar, executed a release of all his right to the premises, to Sir John L. Johnstone, as stated in the bill; and he alleged, that the sale was, in all respects, regular and fair, and made with good faith, pursuant to the statute ; and he insisted, that it was a bar to the relief sought by the plaintiffs, &c. &cc.
    
    The other defendants having answered, proofs were taken in the cause, which was brought to a hearing on the 23d of JVovember last.
    
      R. SedgwicTc, for the plaintiffs.
    He cited 1 Ves. 251.
    1 Powell on Mort. 13, 14. 60. 247, 248. 2 Vernon, 84, 1 Johns. Rep. 498. 18 Johns. Rep. 301.
    
      Wells and W. Slosson, for the defendants.
    They cited
    3 Johns. Rep. 145. 4 Dallas, 419. Burr. Rep. 1077. 15 Johns. Rep. 458. Doug. 265. 574. Salk. 96. 1 Com. Dig. 644. tit. Attorney, C. 8.
   The Chancellor.

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.

A power SudeYYí thorizet0 mortgagee sell, in default of payment,

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 the power specially excluding it; and the party creating the power be competent in age to grant it.

The Court, of^^ten”of "he end°and design of the parties, and to the substantial ¡^evai Recútj0” ,of them-Ann in support of such intene^limttecMn nerai power; general P°"ín reduced^to °a particuiarpur-

A j tt f attorney, to all things necessary and lawful, for obasíoíanlgandsesideration mo-, ney therefor, ti^todo^vegage,which the party creating the power ¿°“Id bimse-!f

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 under his general authority to mortgage, and to do what was necessary and lawful. Every thing incident to a mortgage which Wilson himself could do, in and by the act of giving a mortgage, F. could do under the power.

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 within the intent, and to bean execution of the power in substance. Again, in Long v. Long, (5 Ves. 445.) it was held, that a power to charge an estate with the payment of moneys for the benefit of the children, as he should think fit, would authorize a disposition of the estate itself. A power to charge, included a power to sell; and Sir William Grant afterwards (6 Ves. 797.) cited the case as establishing that point; and he seems to have sanctioned, in Bullock v. Flagate, (1 Ves. and Bea. 471.) such deviations from the letter of the power. And though it is considered as a questionable point, whether a power to sell or exchange will authorize a partition of land, (Abell v. Heathcote, 2 Ves. jun. 98. 4 Bro. 278. S. C. questioned in M‘Queen v. Farquhar, 11 Ves. 467. and Attorney General v. Hamilton, 1 Madd. Rep. 214.) yetMr. Sugden, (Treat. on Powers, 2d edit. 446. 449.) gives it as the result of the cases, that, where a freehold interest is authorized to be appointed under a power, a different species of estate, less valuable, will be supported in equity. We surely cannot be departing from the spirit of all these cases, when we construe a power to mortgage, as involving in it a power to add the ordinary and lawful remedies prescribed by law, upon breach of the condition of the mortgage. The remedies are the means for rendering the mortgage an effective security for the debt. The statute foreclosure is cheaper and more simple, and generally more expeditious, than a foreclosure by bill in Chancery; and it is always deemed a matter of some consequence by the mortgagee, that he should have such a remedy within his discretion. At so early a period as the date of the mortgage, when the practice of this Court was quite limited, and in very few hands, the authority to sell by act of the party, must have been deemed of almost incalculable value. That power is still necessary to the completion and perfection of the security, because it affords the alternative remedy authorized by law. A power to mortgage does, therefore, very clearly, in my view of the case, carry with it' the power to authorize the mortgagee to foreclose, by selling under the statute. The power in= tended a mortgage in the best manner that it could be made, consistently with law; and as between the mortgagee and mortgagor, the equity of the case is, that the former should be deemed clothed with all the customary rights and privileges of a mortgagee; and more especially, when it appears that this same mortgagee was in the invariable habit of taking mortgages in the form adopted in this case.

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[; •.¡id the power contained in the mortgage was duly recorded as early as June, 1808.

mortgagee? does not def,“ve right of right of the t0 A sale by

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 mortgage and the right of redemption. A mortgagee, before foreclosure, cannot even make a lease, so as to bind the mortgagor when he comes to redeem. (Hungerford v. Clay, 9 Mod. 1.) The suggestion that the mortgagee could not foreclose, because he had previously sold parce^s °f the land, is entirely without any foundation in precedent or justice. The sales created, of themselves, no obstacle to the right of redemption. If the mortgagor was entitled to redeem, he could recover the possession as against those purchasers, equally as well as he could recover it against the mortgagee himself, or his heirs after his death. A mortgagee cannot, by fine and non-claim, bar the equity of redemption. The fine displaces nothing; it is still the same estate. (Lord Redesdale, in 1 Sch. and Lef. 380.) The same power that awarded the redemption, could award a restitution of possession. The argument on the part of the plaintiffs, would go to prove that a foreclosure by bill, was equally barred, as a foreclosure by advertising under the statute. In both modes, the mortgagor should come in before the sale, and make his defence. He is presumed, in law, to have equal notice of the proceeding in each case; and a foreclosure and sale, is as much a bar in the one case as in the other.

A mortgagee, sure) can do no act to bmd the when he offers tore eem.

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 argument, to suppress those letters, and the question on their competency was reserved.

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.