Court Opinion

ID: 6631473
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:37:43.624643+00
Date Added: 2024-06-11T15:58:57.337311
License: Public Domain

*585By the Court,
Pratt, J.
There is no legal ground upon which the nonsuit submitted to by the plaintiff in this cause can be set. aside, and a new trial granted.
The plaintiff is not entitled to the possession of the mortgaged premises which he seeks to recover; consequently, he has no cause of action. The assignment is valid. It is-full, absolute, and was executed by him for a sufficient, if not a full consideration., He has, therefore, divested himself of all interest which he theretofore had in the bond and mortgage, and consequently of all right which at common law, he otherwise might have had, as mortgagee, to the possession of the mortgaged premises.
The only ground assumed in support of the motion in this Court is, that “ the assignment has but one attesting witness-to it, and therefore void.” It was attempted in argument to-sustain this ground by treating the assignment as a deed of conveyance of real estate under the statute. If the instrument could be legally so considered, still the ground taken could not be maintained.
The statute under which the bond and mortgage in question were executed, although requiring two subscribing witnesses to a deed of conveyance of real estate for the purposes of registn/, contains no provision under which a deed with only one subscribing witness thereto can be for that reason legally adjudged void, either at law or in equity, as between the parties thereto, or when offered as evidence against the grantor, in a collateral suit or proceeding. At common law no such rule ever prevailed; nor can such-a rule, in justice or equity, ever be established.
But the assignment is not in fact, or in judgment of law, a conveyance of real estate, and should not be-so held. Courts and jurists of the highest character in England and this country, have held, and as we think, correctly, that not-. *586withstanding the execution and delivery of the mortgage, the mortgagor still continues to own, instead of having a mere right to the mortgaged premises; and that the interest of the mortgagee is distinct from that of an ordinary title’to-the land. On this subject, Lord Mansfield said that “ a mortgage is a charge upon the-land, and whatever would give the money will carry- the mortgage estate in the land along with it,' to every purpose. The estate in the land is the same thing as the money due upon it. It will be liable for debts; it will go to executors; it will pass by will not made and executed' with the solemnities required by the statute of frauds. The assignment of the debt will draw the land after it, as a com sequence — nay, it would though the debt were forgiven only by parol — for the right to the land follows, notwithstanding the statute of frauds.” (Martin vs. Mowlin, 2 Burr, 969.)
In this country, as well as in England, the question has often been decided. - Chancellor Rent lays down the broad doctrine that “ until foreclosure, or at leást until possession taken of the land, the mortgage must remain in the light of a chose in action. That it is but an incident attached to the debt, and in reason and propriety it,cannot and ought not to be detached from its principal. The mortgage interest, as distinct from the debt, is not a fit subject of assignment. ' It has no determinate value. If it should be assigned, the assignee must hold the interest at the will and disposal of the person who holds the bond.” (Jackson vs. Willard, 3 J. R. 43.) The doctrine is expressly re-affirmed in Wilson vs. Troup, (2 Cow. R. 195.) “ Both at law and in equity, the mortgagee has only a chattel interest in the mortgage.” (Johnson vs. Hart, 3 John. Cases, 229; Runyan vs. Mersereau, 11 J. R. 534.) “ In common sense, he has only a pledge.”' (Sylvester vs. Jarman, 10 Price R. 84.) “He is not the substantial owner of the premises.” (Dougherty vs. McColgan, 6 Gill. & J. 275.) “In natural justice and equity, the-principal-right of the mortgagee is to the money when due, *587and his right to the land is only as security for the payment of the money, the debt being merely collaterally secured by the mortgage on real estate.” (Matthews vs. Wallwyn, 4 Ves. 128; Dudley vs. Caldwell, 18 Conn. 218.) In New York, the Courts appear to have steadily held the mortgagee’s interest as personal estate, and until foreclosure to be legally considered in the light of a chose m action, as a mere incident attached to the debt. (5 J. Ch. R. 570; 19 J. R. 325.) In a still later case, it was expressly decided that the mortgagor held the legal title to mortgaged premises until foreclosure and sale. (14 Wend. 235.) In New Hampshire, also, it has been expressly decided that the mortgagee’s interest in a mortgage is not real estate, but a mere chattel interest, which can only be transferred with the debt itself. (11 N. H. 274.) And in Mississippi the question has also been fully settled by decision, and substantially in the same way. (9 Miss. R. 28.) These cases should be considered as conclusive. They show the current of authority in this country, and they establish the only doctrine that can in reason fie established on the subject.
As to the manner of transferring a mortgagee’s interest in a mortgage, very little need be said. It is now generally held that an assignment of the debt carries with it, in equity,, the interest in the mortgage. In New York, this has always been the established doctrine. In New Hampshire, the mere delivery - of a note payable to bearer, secured by mortgage,, passes the mortgage also, both in law and equity, and a mere farol transfer of the debt and mortgage is valid. (5 N. H., 420; 13 Ib. 247.) In Yermont, a parol assignment of the debt carries with it the mortgagee’s interest in the mortgage. (10 Verm. 294; 21 Ib. 331.) In Kentucky and Mississippi, the same principle is fully recognized. (8 B. Mun. 287; 9 Sm. & M. 448; 10 Ib. 120, 631.) And in Massachusetts and Izidiana, where by express statute a mortgage cannot be legally transferz’ed in any other way than by *588deed, it has been held by decision that a parol assignment of the debt passes .the mortgagee’s interest in equity. (8 Pick. 49; 7 Blackf. 297.)
Other decisions might be referred to, showing a recognition of this same principle in other States, but it must be unnecessary.
The true and only rational doctrine that can be established, is that a mortgagee has not, in virtue of his mortgage, an absolute fee in the land, but merely a lien upon it as collateral security for the payment of his debt; that his mortgage interest is but an incident of the debt, and consequently must follow, the debt, and when the debt is paid his lien upon the land is discharged, and that therefore the mortgage is nothing more than a chose m action, and the mortgagee’s interest therein, before foreclosure and sale, a mere chattel interest, which may be transferred without the execution of a deed or other instrument in writing, where the statute does not require the transfer to be made by deed. In this State, the statute contains no such provision. If Rogers, the assignee of the .plaintiff, should file a bill in equity to-foreclose the mortgage, no doubt could exist as to the competency of the assignment, as proof to show that the entire interest of the mortgagee, in the debt and security, had been transferred ■to himself.
If it would be competent for that purpose in a court of equity, it should, upon principle, be competent for the same purpose in a court of-law. No. sound reason has ever been assigned, either in the books or at the bar, why the same evidence received in a court of equity should not be received rin a court of law, when, offered to. prove the same fact. It is true that courts of law and courts of equity are differently constituted, and. that their jurisdiction and powers are different, in respect to" facts and circumstances when proved; 'but.in general, the rules of evidence are the same at law as equity, and the principles which govern the means of ob*589taining proof are substantially the same in the one court as in the other, and the rules of property, and the rules of interpretation, are, or should be, the same in both.
The defendant, on the trial, after proving the execution.of the assignment, offered to read it Jn evidence, not as a deed of conveyance of real estate, but as evidence to show that the plaintiff had, before the commencement of the suit, sold and transferred to. another his entire interest in the bond and mortgage, and that, therefore, he had no right, as mortgagee, to the possession of the mortgaged premises, and consequently no cause of action. For this purpose, the assignment should- be, and in the opinion of -this Court is, equally as competent in that court, as it would have been in a court of equity, Courts of law are as much bound to protect the assignee of a mortgage, in his equitable rights, as courts of equity.
It is time that mortgages and mortgage controversies were stripped of legal fiction — of all unnecessary legal technicality— and, that courts of law, as well as courts of equity, in settling the rights of parties in this class of cases, should more particularly regard and carry out the real contract of the parties, in its substance and intent.
The doctrine of a mortgage being a mere incident of the debt, is founded in a true view of the mortgage contract, and, as in fact intended by the parties, and not of its forms. The mortgage is only in fact intended by the mortgagor, and so understood by the mortgagee, as' a collateral security for the ultimate payment of the debt, and not as a sale of the premises. And, as we think, that principle of common law which authorized a mortgagee to recover by action of, ejectment the possession of the mortgaged premises before title thereto should become absolute, upon a foreclosure and sale, has been wisely abrogated by the Legislature' of this State; although that can have no bearing upon the case at bar, as the bond and mortgage in question were executed several years prior *590to the adoption of the Revised Statutes of 1846, which contains the provision alluded to.
Let it be certified to the Circuit Court for the County of "Wayne, as the opinion of this Court, that the assignment was properly admitted in evidence, and that the plaintiff is. not entitled to a new trial.