Court Opinion

ID: 6584368
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:41:08.379116+00
Date Added: 2024-06-11T15:57:24.735234
License: Public Domain

ROSS, C. J.
This is a petition to foreclose, in legal effect, a mortgage. The parties agree that they stand, in regard to the premises, in the relation of mortgagor and mortgagee. This admits that the defendant has an equity in all the property embraced in the contract sought to be foreclosed. # The orator cannot rely upon any other rights than those of mortgagor, however absolute his paper title to the property. Davis v. Hemenway, 27 Vt. 589. The defendant had been in possession of the premises many yeai's. He gave a mortgage on them which was foreclosed and became absolute April 30, 1889. H. A. Jackson bought out the orator in the foreclosure proceedings, and, on the same day, bargained them to the defendant, upon his agreeing to pay one thousand one hundred and eighty dollars therefor. This sum was to be paid on time, extending over several years. It is apparent that Jackson held the title to the premises as security for the payment of that sum. The defendant had remained in possession. By the contract he was still to remain in possession, carry on the premises without suffering or committing waste, and if he cut any lumber, pay Jackson *685an agreed stumpage. Jackson also thereby retained a lien on all crops grown each year, until the payment for that year was fully made.
The defendant paid to Jackson five hundred fifty dollars before November, 1892. He was then behind in the payment of that year one hundred fifty dollars and some interest. The orator purchased Jackson’s interest in the premises, and took a deed thereof agreeing to carry out Jackson’s contract with the defendant. This was August 18, 1892. November 1, 1892, he brought this petition, which was served on the defendant November 24, 1892. Soon after, the orator went to the premises, and found the house locked and the defendant temporarily absent. He effected an entrance, removed all of the defendant’s things, including his live stock, put in a tenant, forbade the defendant to enter, and caused his arrest for entering. He took possession of the crops grown that year, which at a fair valuation were worth more than enough to pay all that was then due under the contract. The premises were ample security for all that was to become due under the contract. There was a timber lot on the premises. The orator soon entered upon that and stripped it of everything that was valuable. Waiting thirty days after taking possession, the orator placed the land contract in the hands of a deputy sheriff who proceeded to sell the crops grown on the premises under the provisions of the statute for the foreclosure of a chattel mortgage.
The first question arising is whether this sale was authorized by law. The land contract in which the lien was reserved was not a chattel mortgage. It was not executed as required for a valid chattel mortgage. R. L., 1966, 1967. If in other respects duly executed — which we do not consider, nor determine — it was not sworn to by the parties to it. The method of foreclosure pursued by the orator was a part of the act authorizing chattel mortgages and applicable only to such mortgages as are executed in accordance with *686its provisions. Longey v. Leach, 57 Vt. 377; Howard v. Witters, 60 Vt. 578; Stafford v. Adair, 57 Vt. 63; Calkins v. Clement, 54 Vt. 635.
Although the land contract does not run to Jackson and his assigns, yet the title to the premises was vested in him. Hence the title to the emblements, or annual crops grown thereon vested in him, except so far as they were released by the contract. By that, the title to the yearly grown crops between the parties to that contract was held by Jackson as security until the payment of that year was made. Paris v. Vail, 18 Vt. 277; Smith v. Atkins, Ib. 461; Briggs v. Oaks, 26 Vt. 138; Briggs v. Bennett, Ib. 146; Gray v. Stevens, 28 Vt. 1; Esdon v. Colburn, Ib. 631; Leland v. Sprague, Ib. 746; Baxter v. Bush, 29 Vt. 465; Bellows v. Wells, 36 Vt. 599; Cooper v. Cole, 38 Vt. 191.
But the defendant, in legal effect, being a mortgagor in possession, the crops grown by him might possibly have been held if attached by his creditors. Cooper v. Cole, 38 Vt. 185. The land contract between the parties was a common law mortgage of the yearly grown crops to secure the payment agreed to be made that year. Atwater v. Mower, 10 Vt. 75: Coty v. Barnes, 20 Vt. 78; Wood v. Dudley, 8 Vt. 430; Taggart v. Packard, 39 Vt. 628; Blodgett v. Blodgett, 48 Vt. 32.
Such mortgage can be foreclosed, or a bill brought to redeem the property, in the ordinary method of foreclosing mortgages. Blodgett v. Blodgett, supra. The orator, not at law, but in equity, succeeded to the rights of Jackson under the contract. He can maintain the bill, as originally brought, to foreclose the defendant’s rights not only in the land named in the contract, but also in the crops grown in the year 1892. The crops are the growth of the land, and held by the contract lor payment of a part of the same debt for which the land is held. They are both held for the payment of the same claim. He cannot, in equity, be allowed *687to separate their foreclosure, thereby increasing the cost, and proceed against the land for the payment of the debt by this bill, and at the same time take an independent proceeding, under the chattel mortgage law, to obtain payment also from the crops. Proceedings prescribed by the chattel mortgage law are adapted and intended for mortgages executed under the provisions of that law. Calkins v. Clement, 54 Vt. 635.
He did not attempt to sell the crops under a common law mortgage. Taggart v. Packard, 39 Vt. 628. By attempting to sell the crops in a method rxnauthorized he converted them to his own use, and must account for them at their fair market value. The defendant’s right to redeem equitably vested in the land and crops, taken as one security for the payment of that portion of the debt which was then over due. He was under a duty to exercise this right with reference to both, and not with reference to the crops, separate from the land. Soon after bringing his bill, and therein acknowledging the equitable right of the defendant to redeem both the land and crops, the orator took possession, for condition broken, in a manner calculated, if not intended, to deprive the defendant of his right of redemption. He not only removed the defendant’s household goods, but turned out his live stock, sold the hay in a manner unauthorized, and began at once to cut and remove all the timber suitable to be manufactured into lumber. A mortgagee, in possession, is under a duty to use the premises and property like an ordinary prudent owner. He is bound to make necessary repairs. He cannot improve the owner out of his. equity, nor can he unnecessarily, when the security is ample, encroach upon the body of the property pledged.
He is bound to derive a reasonable income from the use of the property and apply it, first, to keeping the interest extinguished, and the surplus to the extinguishment of the principal. He can legally no more commit waste than can *688the mortgagor. He is chargeable for loss, incurred by his wilful default. He is not entitled to receive anything for his own personal services. Pom. Eq. Jur., ss. 1215, 1216, 1217 and notes; Barrett v. Nelson, 54 Iowa 41, 37 Am. R. 183; Sanders v. Wilson, 34 Vt. 318; French v. Bowen, 2 Aik. 120; Moore v. Cable, 1 Johns. Ch. 385, 1 N. Y. Ch. (L. Ed.) 381 and note; Benedict v. Gilman, 4 Paige 58, 3 N. Y. Ch. 55 and note; Currier v. Webster, 45 N. H. 226; 2 Jones, Mortg., ss. 1123, 1125. S. 1123 says he must account for waste committed by him while in possession. In s. 1125 it is said,
“ If the property is otherwise sufficient, the mortgagee has no right to open and work mines ; and, if he does so, will be charged with the gross receipts without any allowance for the expense of working.”
Under the principle, that he who seeks equity must do equity, every case is largely controlled by its own facts. From the facts reported, from the manner in which the orator took possession, in which he sold the personal property, and in- which he stripped the premises of all the valuable lumber, when his security was ample, it is apparent that he purposely and intentionally disregarded the rights of the defendant, and intended to place him and the property in such condition that he could not raise, on the property, the money required to redeem it. He thereby placed himself in the. light of a wilful trespasser. In such cases at law the jury may award exemplary or punitive damages. To allow him to take the property in such cases at its market value would allow him to compel its sale at that value, however much to the inconvenience and against the will of the owner. The decisions on the subject of the rule of damages in such cases have not been in full accord, and it would be difficult to reconcile them. . Many times, evidently, the decision has been controlled by the form of action. Foote v. Merrill, 54 N. H. 490. For a full discussion of the question and re*689view of the authorities, see Barker v. Wheeler, 24 Am. Dec. 66 (8 Wen. 505). and note; Batchelder v. Kelley, 34 Am. Dec. 174 (10 N. H. 436) and note; Curtis v. Groat, 5 Am. Dec. 204 (6 John. 168) and note; Coal Creek M. & M. Co. v. Moses, 54 Am. Rep. 415 (15 Lea. 500) and note; Blain Avon Coal Co. v. Mr.Culloh, 43 Am. Rep. 560 (59 Md. 403) and note.
In the E. E. Bolles Wooden Ware Co. v. United States, 106 U. S. 432, this question was considered. Judge Miller, who delivered the opinion of the court, commends the research of the plaintiff’s counsel in placing before the court all the authorities, English and American. The English cases relate largely to mining coal. He quotes from the opinion of Lord Hartley, in the House of Lords, in Livingston v. Rawyards Coal Co., L. R. 5 App. Cas. 33, as a statement of the English doctrine, as follows:
“ There is no doubt that if a man furtively and in bad faith robs his neighbor of his property, and because it is under ground is probably for some little time not detected, the court of equity in this country will struggle, or, I would rather say, will assert its authority to punish fraud by fixing the person with the value of the whole of the property he has so furtively taken, and making him no allowance in respect of what he has so done as would have been justly made to him if the parties had been working by agreement.”
But,
“When once we arrive at the fact that an inadvertence has been the cause of the misfortune, then the simple course is to make every just allowance for outlay on the part of the person who has so acquired the property, and to give back to the owner, so far as is possible imder the circumstances of the case, the full value of that which cannot be restored to him in specie.”
Judge Miller then says :
“ There seems to us no doubt that in the case of a wilful trespass the rule as stated above is the law of damages, both in England and in this country, though in some of the state courts the milder rule has been applied even to this class of *690cases. * * * On the other hand the weight of authority in this country as well as in England, favors the doctrine that, where the trespass is the result of inadvertence or mistake, and the wrong was not intentional, the value of the property when first taken must govern, or if the conversion sued for was after value had been added to it by the work of the defendant, he should be credited with this addition. Winchester v. Craig, 33 Mich. 205, contains a full examination of the authorities on the point.”
In that case, which was trover, for timber worth when felled, sixty dollars and seventy-one cents, but when sold by the wrong doer, worth eight hundred and fifty dollars, the court applied the harsher rule to a bona Jide purchaser from the tort feasor, holding that such purchaser took only the rights of his vendor. We think this case states the result of the authorities here and/in England on this point. In the case at bar, this court is not trammeled by the form of the action. The only question is, in what sum shall the orator account for the lumber which he wrongfully stripped from the premises, when there was, if the personal property should be applied, nothing due on his equitable mortgage? When he took possession the condition of the mortgage was broken. This gave the orator the right to take peaceable possession of the premises and the crops grown that year.- His entry was not wrongful. But when he converted the personal property, on which he had a lien, he was in equity paid in full for all there was due him on the equitable mortgage. The orator’s counsel contends that the balance of the value of the personal property, above the amount due on the payment for the year 1892, was not sufficient to pay the costs of bringing the bill of foreclosure. But this is not certified to be the truth. There i§ no statement of the costs of bringing the bill. The court of chancery denied the orator any costs on account of his “unnecessary and offensive conduct.” Hence, while the orator’s entry may have been lawful, so that he would not be guilty *691of a forcible entry, he was on the facts found, guilty of wrongfully wasting the premises, after he had, by conversion of the personal property, received enough to pay in full what was then due on his mortgage. It is true that equity never enforces forfeitures, nor inflicts penalties nor punitive damages. But the question is not one of enforcing penalties nor of inflicting forfeitures, dr punitive damages. The defendant’s rights in the lumber continued while the orator was cutting and removing it to the place where he disposed of it.
The question is whether the orator, under the circumstances, shall be allowed to deduct from what the value of the lumber was at the place of disposal, what he had expended in cutting and removing it there? It is contended that the orator supposed he had the right to cut and remove the lumber. He was under no mistake as to the facts, and is presumed to know the law applicable thereto. He must, therefore, be held to have wilfully as well as wrongfully, cut and removed the timber. All his acts in so doing were done against the known will and protest of the defendant. As we have heretofore found, in equity the orator could charge nothing for his services in properly caring for the property while he was in possession. Much more, he should not be allowed for them in wrongfully stripping the premises of what would be most valuable and useful in aiding the defendant to raise on them the money required to redeem them.
On the facts found, we do not think that the orator is entitled to an allowance for his expenditure in wrongfully cutting and removing all the standing lumber from the premises ; thus leaving the sugar orchard unprotected from violent winds, which may greatly damage it, although at the time of the hearing, no special damage had arisen from this cause. If the orator’s acts could be fairly and reasonably justified, because consented to by the defendant, or be*692cause the security was insufficient and must be immediately utilized to save the orator from loss, he should account for the lumber cut at its stumpage value. Sanders v. Wilson el al., 34 Vt. 318.
But neither the court of chancery nor this court can justify his acts. These views affirm the decree of the court of chancery. If the defendant should desire to move for leave to file a cross-bill, he can do so in the court of chancery.

Decree affirmed and cause remanded.

Start, J., dissents.