Case Name: Jackson, ex dem. Tousley, against Rhodes
Court: New York Court for the Correction of Errors
Jurisdiction: New York
Decision Date: 1827-10
Citations: 8 Cow. 47
Docket Number: 
Parties: * Jackson, ex dem. Tousley, against Rhodes.
Judges: 
Reporter: Cowen's Reports
Volume: 8
Pages: 46–55

Head Matter:
* Jackson, ex dem. Tousley, against Rhodes.
Ejectment to recover a part of lot Ho. 74, in Manlius, Onondaga county; tried at the circuit .-in that county Oc tober 10th, 1826, before Thro op, C. Judge, when a verdict taken for the plaintiff, subject to, the opinion.of this court on the following case:
Though there-payment'on'a mortgage to
.¡he loan officers, under the act of April 11,1808, (sess 41, oh. 216, 5, W. 392,) yet the mortgagor retains an equity of redemption, till sale, as in the case of an ordinary mortgage, apon which a judgment recovered against him will become a lien; and it may he sold in execution, though the mortgagor has assigned it to another, who is the person making default.
After a sale, the purchaser may give notice to the commissioners of loans that he is an assignee, and redeem and receive a release as assignee, pursuant to the act.
On the 4th of May, 1813, Walter Worden, being seised in fee of the premises in question, mortgaged them to the commissioners of loans of the county of Onondaga, under •the act of 1808, (sess. 31, chi 216,) to secure the payment of 100 dollars with interest. Worden afterwards conveyed the premises in question to James 0. Wattles, in fee; in 1818, Wattles conveyed in fee to Frederick Lasher; and he, on the 23d of February, 1820, to the defendant.’
On the 17th of April, 1816, the lessor recovered a judgment against Wattles in the O. P. of Onondaga county for 2000 dollars debt with costs. In February vacation, 1820, a fi. fa. was issued on this judgment, returnable at the •next May term; by virtue of which, the sheriff sold the premises, with other lands, on the 14th of August, 1824, .to the lessor of the plaintiff for 1113 dollars; and on the :12th of January, 1826, a deed was executed by the sheriff, the premises not having been redeemed.
In 1820 and 1821, default was made in the payment of interest on the mortgage; and the premises were advertised by the commissioners of loans for sale; but they were not sold, the interest having been paid before the day of sale. In May, 1824, default was again made: and the premises again advertised; but the interest was paid on the 21st of September of that year. The lessor of the plaintiff offered to pay it; but it was in fact paid by the defendant. On the 26th of June, 1824, the defendant gave notice in writing to the commissioners, that he was assignee of the premises; and on the 21st day of September, 1824, the lessor of the plaintiff gave a like notice. These notices were duly entered by the commissioners, when received. *On the 2d of May, 1826, the lessor of the plaintiff paid the principal and interest due on the mortgage to the commissioners,.who.,executed a discharge and ‘ release according to the statute; though the defendant objected to .this; and insisted that the premises should be sold, that he might realize the surplus, after paying the amount due on the mortgage.
K P. Randall, for the plaintiff.
The question is, whether the judgment of the lessor of the plaintiff, was a lien on the land in the hands of Wattles. This, we admit, must depend on the construction to be given to the statute of the 11th of April, 1808, (5 W. 392, s. 15, 19, 20.) We tontend that, by an acceptance on the part of the commissioners, of the money due on the mortgage, the mortgagor was remitted to his original estate; and all liens were preserved. The statute does not direct the commissioners to convey any title on the payment of the money; but only to release. On payment of the money, the rights of the mortgagor, or those claiming under him, are the same as if there had been no default. On paying the whole money, the original estate becomes revested. The declaration, in the statute, that the rights of the mortgagor shall be barred and foreclosed by the default, is much qualified; and there is still an interest left quite equal to the common equity of redemption. .Certainly some interest was left, which passed by the sheriff’s sale to the lessor of the plaintiff. He, having an interest in the premises, had a right to redeem. An equity of redemption is the subject of sale on execution, because the mortgagor is, in the eye of the law, the actual owner. The commissioners, we have seen, are to release. This presupposes an estate in the mortgagor or his assignee. Without an estate there cannot be a release. The commissioners are not absolute owners in any sense. They hold according to the uses of the statute; and these are various, as different rights arise. On redeeming, for instance, the owner is remitted; and these trustees are to release. At most, the rights of the mortgagor are merely *in abeyance, which is sufficient to support the lien of the judgment. It is like the case at common law, of accepting rent, by the lessor, or his doing any other act in affirmance of the estate, after condition broken by a lessee. The provision for a release rests on this principle. Any one claiming an interest in the estate, may edition; and so may a mere stranger, if no objeotion be made. (Noy’s Max. tit. Condition, p, 79; Com. Dig. Condition, (G. 1;) 2 Cruis. 142; Co. Lit. 207, a.) The defendant was in possession; and it was Ms duty to have made the payment. He cannot allege Ms own default for Ms benefit. Again; Wattles is estopped from denying that he had title; or that it continues while the defendant holds under Mm; and the defendant'is also es-topped. Com. Dig. Estoppel, (B;) Co. Lit. 852, b; 6 Coren, 178, 401; Cro. Eliz. 36; 3 T. R. 441; 2 Str. 818, 4th res.) The commissioners alone could enter for -the .forfeiture originally. They have released , their interest to the lessor of the plaintiff. Here was no want of notice to the defendant. The judgment itself, was notice to the world; and-actual notice was not necessary. The lessor had already purchased and received a certificate, when the defendant-made default. All Ms -estate was gone. He had no title or right of possession.1 The right of entry upon him was perfect in another. "The mortgagor is always considered' •the owner of the estate till entry or foreclosure; (6 John. 290 5) and the equity of redemption is saleable by -execution. (1 Cain. Cas. Err. 47.)
J. A. Spencer, contra.
The doctrine of estoppel has no application. Wattles’ interest -ceased by Ms conveyance. When'he conveyed,-no doubt the-judgment was -a lien; and we must look entirely to the rights,which accrued subsequently. The defendant did not hold under Wattles in respect to these acts, so as to -create a -privity, and .malee out-an estoppel. The estate of Wattles became divested •by subsequent circumstances,- and -the judgment ceased, therefore, to he a lien. - This was the direct consequence *of a default in payment. Wehad supposed this question settled. "The 15th section of the statute is -express, that upon a default for -22 days, after .the yearly interest .due, the commissioners shall be seised of -an .absolute and indefeasible estate. "The 28th .section gives the form of the mortgage; by which the'-default bars, per se, -all equity Of redemption. This default aloné; is equivalent ..to .a fore closure. And so it has been hoi den in various cases upon this very act. (Jackson v. Voorhis, 9 John. 129. Sherrill V. Crosby, 14 John. 360. Denning v. Smith, 3 John. Ch. Rep. 338.) Tousley, the lessor, of course could acquire no estate; for the judgment debtor had none, either equitable or legal. Both had passed to the commissioners, previous to the time of sale. To give effect to a sheriff’s sale of land, the debtor, or some one claiming under him, must have an equitable or legal seisin at the time. (3 Caines, 188; 4 Cowen, 599; 5 Cowen, 485.) If an equitable title had remained in Wattles, the sale by the sheriff would have been equally ineffectual; for Wattles was out of possession. (16 John. 197; 17 id. 351; 18 id. 94; 1 John. Ch. Rep. 52.) But the plaintiff cannot recover in this action on a mere equitable title, even conceding that he has one. (2 John. 221; 3 id. 422; 16 id. 199 ; 2 Cowen, 502.) There was no interest in Wattles as cestui gne use, which could be sold on execution. (1 John. Ch. Rep. 52, 56; 17 John. 351.) The release could not operate to vest any thing in Wattles or the lessor of the plaintiff; but only in the defendant, who succeeded to all the interest of Wattles. Tousley, the lessor, is not an assignee within the 20th section of the act; and had no right to give the notice required by that act. The mortgage was a prior lien; and by becoming absolute, subverted all subsequent ones. The defendant had a right within the 20th section, to have the land sold and receive the surplus. A purchaser at sheriff’s sale can acquire no greater rights, than the debtor had at the time of the sale.
*Bandall, in reply.
Jackson v. Voorhis was on the statute of the 14th of March, 1792; and was an ejectment by the mortgagor, or those claiming under him, during the pendency of his default. In Sherrill v. Crosby, the land had been sold by the commissioners. ^Neither of these cases-apply; and as to Denning v. Smith, there was a bill filed to avoid an irregular sale by the commissioners, and the sale was set aside in favor of the mortgagor. Clearly -this recognizes in him a complete equity of redemption; and shows, after all, that the mortgage is but a lien; which, as in ordinary cases, the mortgagor may file his bill to get rid of.

Opinion:
Curia, per SAVAGE, Ch. J.
Were this the case of an or dinary mortgage, it would be perfectly plain in favor of the plaintiff. Wattles was the owner of the equity of redemption, when the lessor's judgment was recovered against him. That judgment became a lien upon Wattles' interest in the premises. The defendant holds under Wattles ; and can have no other or greater estate than Wattles, whose interest was liable to be sold under execution, and was in fact so sold; and the lessor became the purchaser. If the plaintiff would have been entitled to recover against Wattles, he is entitled to recover against the defendant.
It is important, then, to inquire how the mortgage to the loan officers, and the proceedings under it, have affected the rights of the parties. By the 11th section of the act, the interest of the money loaned on mortgage; was to become due on the 1st Tuesday of May yearly. On that day, and the three successive Tuesdays, the commissioners were, by the 16th section, to attend for the purpose of receiving interest. By the 15th section, if the borrower neglect to pay the interest on the first Tuesday of May, or within 22 days thereafter, then the commissioners, their successors and assigns shall be seised of an absolute indefeasible estate in the lands, tenements and hereditaments thereby mortgaged, to the uses in the act mentioned; and the mortgagor, his heirs or assigns, shall be utterly1 foreclosed *and barred of all equity of redemption of the mortgaged premises, any law, usage or custom, or practice in courts of equity to the contrary notwithstanding. The commissioners are further directed, within eight days after default, to advertise the lands to be sold on the third Tuesday of September, at the court-house in the county; at which time and place they are to sell to the highest bidder, who is to hold, discharged of all equity of redemption, and all subsequent incumbrances. But if the mortgagor, his heirs or assigns, shall, at or before the sale, pay the in tetesfc and costs, the commissioners' shall accept the same; and permit the owner, his heirs or assigns, to take possession of the mortgaged premises, and to hold the same until default shall be made in payment of any further sum on the mortgage. In case of a sale, the act directs how much shall be retained by the commissioners; and that the remainder, if any there be, they shall pay the mortgagor, his heirs or assigns. The commissioners are not obliged to take notice of any assignee without actual notice being given, and then the assignees are to be preferred according to the priority of the commissioners, entry of the notice.
Under this act and the act of 1792, there have been some adjudications which it is proper to notice.
In Jackson v. Voorhis, (9 John. 129,) the lessors of the plaintiff were the widow and heir of one Isaac Limerick. The defendant showed that the premises had been mortgaged to the loan officers under- the act of 1792 ; and that the interest being due and unpaid in 1810, the premises were advertised and sold. The court said, that at the commencement of the suit, there was a perfect title in the loan officers; that the 13th section of that act is precisely like the 15th section of the act of 1808 ; that the default amounted, ipso facto, to an absolute foreclosure; and consequently a complete title existed out of the lessors at the commencement of the suit.
In the case of Sherill v. Crosby, (14 John. 360,) the court again say, the sale by the loan officers was absolute and unconditional; and by the default in paying the interest *for 22 days from the first Tuesday in May preceding the sale, the estate of the mortgagor was gone; and the statute vested an absolute indefeasible estate in the loan officers. In Denning v. Smith, (3 John. Ch. Rep. 338,) the chancellor concurs in the correctness of the decisions mentioned ; but holds the commissioners to be trustees for the state as to the amount due the state; and trustees for the mortgagor for the residue.
In these cases, sales were made on the third Tuesday of September ; and the title, therefore, continued, after default, out of the mortgagor, But there are other cases pro v^ec^ for by the statute, which it will be proper to. eon , — '
The 19th section provides, that if the lands are not sola jn September, or are sold and not paid for, then the commissioners shall take possession for the benefit of the state, till the third Tuesday of April, when the lands are to be again offered for sale; and if not sold, then the commissioners shall purchase and hold the same for the people of the state: and if, before such sale, the owner shall pay what is due for interest and costs, the commissioners shall permit him to take possession till another default.
It is evident that the legislature intended to give time of redemption till after the title is completely transferred to the state.
In this case, the money was paid after default, and before the commissioners were authorized to take possession. The defendant, then, was permitted to retain possession. What were his rights ? Was he not remitted to his former estate ? The act does not say so; but, after another default, it would probably be necessary to advertise the lands again, before a salé would be regular; but if so, it may be said, that does not determine that any title had re-vested in him. It must be admitted, however, that upon a release being executed, the title, which had vested in the commissioners by reason of the default, is divested, and they, have no longer any estate in the premises. I ask, where has it gone ? Is it to the present occupant, and does he thereby take the land discharged of all Encumbrances subsequent to the mortgage, as the commissioners did ? That would be unjust. When the commissioners sell, they give a deed, the form of which is prescribed by the act; but when the money is paid by the mortgagor, or by any one for him, then they merely release the premises from the lien of the mortgage. And it seems to me the legislature never contemplated a conveyance in form, upon payment being made; but only a discharge of the incumbrance. Upon a contrary supposition, the commissioners may discharge the land from the incumbrance; and yet retain the fee in themselves as trustees for the state when the object of the trust is accomplished, and when the cestuis que 'trust have received their money in full satisfaction and discharge ® the premises which they still held vested in their trustees.
The important question is, whether the lessor of the plaintiff acquired any right by the sale of the equity of redemption.
That an equity of redemption is, for most purposes, considered the legal estate, and may be sold, either by deed or by judicial sale, which is an assignment in law, there is no doubt. But, as on the 14th of August, 1824, when the right of Wattles was sold, the fee was by operation of the mortgage, and the provisions of the statute, actually vested in the loan officers, what did the purchaser take under that sale ? The estate was, for the time at least, discharged of all liens subsequent to the mortgage; and had the commissioners proceeded to make sale under the statute, the purchaser would have held the land discharged of the lessor's judgment; for the commissioner held by a title older than the judgment. Strictly speaking, therefore, the judgment was not a lien upon the property sold, at the time of the sale. But when the commissioners released the premises from the operation of their mortgage, is not every thing put back in statu quo ? Does it not take effect by relation to the time when the default happened ? Must not all the rights of the parties be considered as if no default had happened, and the fee had never been vested in the commissioners ? This doctrine reinstates all parties interested *in the relation they held before the default; and produces equity in its results; but a contrary doctrine puts it in the power of the assignee of the mortgagor, by his own default, to defeat the operations of all liens subsequent to the mortgage; which very liens may have been part of the consideration of his purchase from the mortgagor. It cannot be doubted, that had the defendant or the lessor paid up the interest and costs before the sale, the estate which bad been divested by the non-payment, would have re-vested by the payment. Even had a stranger paid the money, and it had been accepted, the effect would have been the same. (Com. Dig. Condition, (Gr. 1).
• Suppose in the ordinary case of a mortgage the money is not paid, and a forfeiture is the consequence. The title, that is, the legal estate, is then in the mortgagee, and on ejectment, he may recover the possession. Suppose, after forfeiture, another creditor obtains judgment. If the mortgagee proceeds, the judgment is unavailable; but it attaches and becomes a hen upon the equity of redemption, and if payment of the mortgage money is made, the judgment creditor can. then enforce his judgment. Suppose a sale, even after forfeiture upon a judgment which had previously become a lien. I apprehend, that though such sale is of no avail if the mortgage is foreclosed, yet if the money is paid and the legal estate re-vested, it is so re-vested by relation, as of the time' of forfeiture; and all intermediate liens retain their priority.
It seems to me not correct, in this case, to say that there is no equity of redemption ; because, wherever the estate may be during the default in paying the interest, the property remains with the debtor, until after a sale; and on his performing certain acts the property is to return to him. What I contend for, is, that when the property does return, it takes effect by relation to the time when it was divested ; and all intermediate acts of others,' done on the presumption that the debtor was the owner, are confirmed. By the release and discharge, the party is remitted to his former estate; and all the acts done by him and others affecting *the estate, are rendered effectual. 3 Cow-en, 80, and the cases there cited.
From these positions it follows, -that, the lessor of the plaintiff and the defendant both claiming under Wattles, the mortgage to the loan officers and proceedings under it, not affecting the question between these parties, and the lessor having the oldest title, the plaintiff must have judgment.
. Judgment for the plaintiff.