Court Opinion

ID: 6598859
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:05:55.939123+00
Date Added: 2024-06-11T15:57:56.810823
License: Public Domain

By the Court,

Dixon, C. J.
This case is not distinguishable from Dodge vs. Silverthorn, 12 Wis., 644. The only difference in point of fact, and that not material, is, that there the action was against the patentee and others, to foreclose the equitable mortgage, after the emanation of the patent. Here the mortgage was foreclosed before bite patent was issued, and the plaintiff, the purchaser at the forelosure sale, seeks to subject the legal estate conveyed by the patent to the equitable, acquired by .virtue of the mortgage. It is obvious that the substantial rights of the parties are the same in both-cases.
School land certificates and assignments thereof may be acknowledged and recorded in the same manner that deeds of conveyance are authorized to be recorded. R. S., ch. 28, sec. 53; R. S., 1849, ch. 24, sec. 52. The object of this provision is very apparent. It was to enable the purchaser and his assignees to spread the evidence of their equitable rights upon the public records of the county, and make it notice to all the world, to authorize them, in short, subject to the conditions *313contained in the certificate and imposed by law, to deal with the estate as if they were seized of the fee. No other motive can be assigned for the provision, and unless we can conclude with the counsel, that it was a mere mistake on the part of the legislature, enacted without any motives, or the very frivolous one to enhance the fees of the commissioners, which we cannot ; we must adhere to Dodge vs. Silverthorn, and hold the certificate, deed, mortgage, and subsequent deed by the sheriff, to constitute a perfect claim of title of record to the plaintiff, of the entire equitable estate conveyed to the first purchaser, and that Keyes, the patentee and the claimants under him, were bound to take notice of it.
But it is furthermore insisted, that the recording of an equitable mortgage is unauthorized, and hence no notice. The statute in force at the time of these transactions and now found as chap. 87, of the Revised Statutes, settles the question. “ All bonds, contracts or agreements concerning any interest in lands in this state, made in writing, under seal, attested by one or more witnesses, and acknowledged before some person authorized by law to take acknowlegments of deeds, may be recorded in the office of the register deeds of the county where the lands lie.” “ It shall be the duty of the register of deeds in each county within this state, to receive and record at length all such bonds, contracts or agreements as shall be left with him for that purpose. Each and every bond, contract or agreement, made and recorded according to the provisions of the first section of this chapter, shall be notice to, and take precedence of any subsequent purchasers, and shall operate as a lien upon the lands therein described according to its import and meaning.”
It cannot be maintained that a mortgage of an equitable estate, executed in the manner prescribed, is not an agreement concerning an interest in lands. The nature or extent of the interest is immaterial; the language of the statute is any interest. Parkist vs. Alexander, 1 Johns. Ch., 394, presented an an*314alogous question, and the opinion of Chancellor Kent is of great weight. The statute spoke of any “ writing in the nature of a mortgage,” and he considered that a mortgage of a mere equitable estate was within its operation, and the record notice to all persons. It appears that there was no such statute in New Fork or Michigan at the time of Farmer’s Loan & Trust Co. vs. Maltby, 8 Paige, 361, and Wing vs. McDonald, Walker’s Ch., 175. Those cases are therefore quite foreign to the question under ours.
These observations sufficiently answer the further position, that after the patent or conveyance by the commissioners, the purchaser need only look to that, and to subsequent alienations and incumbrances. He is bound to take notice of the source of his title, and of the regulations of law respecting it, and if it proceeds from a certificate, he must see to it that no transfer or incumbrance of the previous equitable estate has been made and recorded.
So too, of the certificate before patent. If it has been recorded, the purchaser must see that the estate in equity created by it, has not been conveyed or incumbered by deed or mortgage of record. If it has, if the equitable estate is gone, then, though he may obtain the legal title to the certificate, he acquires no valuable interest in the land. ' And if he afterwards procures a patent, his condition is no better. In either case he is a trustee of a mere naked trust, holding for the use of the equitable owner, in whom is the entire beneficial interest, subject to the payment of such sum as may have been advanced, to the state of the purchase money. Such were the relations of Keyes at the time he took the assignment of the certificate, and when the patent was issued ; and the same is true of his grantees.
The use which counsel seek to make of the decision of this court, in Mowry vs. Wood, 12 Wis., 413, is quite unwarranted. Its effect is wholly misapprehended. Counsel seem to lose sight entirely of the distinction between the estate conveyed by the *315certificate, and the certificate itself as written evidence of title, forgetting that the beneficial interest in the former, may be wholly or in part in one person, and the legal title of the latter in another. They confound the two, and seem to suppose them, incapable of separation. If we were so unfortunate as not to speak intelligibly on that occasion, we hope to be more successful on this. We still think, however, that an attentive examination will show that the fault is with counsel, and not with us; that our views are expressed with moderate clearness and perspicuity, and that the case will appear quite consistent with Dodge vs. Silverthorn.
Recognizing the distinction between the estate conveyed, which is equitable, and the certificate itself, as an instrument of evidence, to which the owner may have a legal title; we endeavored to show that the latter, that is, the legal title to the certificate, could not be passed without an assignment in writing, as prescribed by the statute. With our conclusions in that respect, we are still well satisfied. But we no where said, nor is it to be implied, that the estate could not be transferred without such formula. On .the other hand, we endeavored to show, both by reason and by authority, (but with what success it is not for us to say, further than that we still adhere to the opinion,) that the deposit of the certificates in that case, without assignment, was an equitable transfer of the estate, to secure the payment of a debt contracted by the owner; that it constituted an equitable mortgage, for two reasons: first, because the estate given in security was equitable; and secondly, because the certificates were not so assigned as to transfer them at law. It seems that there are two modes of creating an equitable mortgage ; the one depending on the form of the security, the other on the nature of the estate. At common law, an equitable mortgage of a legal estate, might be created by depositing the title deeds in pledge for the payment of a sum of money ; a legal mortgage, by a conveyance of the lands with a promise that such conveyance should be void on the payment of the *316money and interest on a certain day. An equitable mortgage is also created when the estate granted is equitable, though by a conveyance in form legal.. Such was the mortgage to Gardner and Lyon, under which the plaintiff claims. The only material difference between them pertains to the form of foreclosure. The latter is foreclosed in the ordinary method ; but that by deposit of title deeds, must be by suit in equity to establish the lien, and for a sale in case are not paid on a given day. the principal, interest and costs If both causes occur, namely, the form of the security and ;the, quality of the estate, as in Mowry vs. Wood, the mortgage is still equitable. The two decisions are not, therefore, at variance, since it does not follow because an equitable mortgage may be created by deposite of the certificate, that it cannot be by an independent conveyance.
As the estate may be mortgaged, so it may be conveyed absolutely by deed, the legal title to the certificate remaining in the grantor. The result would be, that the grantee would be without the remedies given by the statute to the purchaser and his assignees of the certificate. He could not maintain ejectment nor trespass, except perhaps for injuries committed while he was in actual possession. He could not obtain a patent ; but must first resort to a court of equity to compel a transfer of the certificate. His condition, therefore, would be quite different, than if the certificate had been assigned in the manner provided by statute. At law he would have no rights, but must proceed in equity, in which alone such estates are recognized and protected.
Order affirmed.