Court Opinion

ID: 9339709
Source: CourtListenerOpinion
Date Created: 2022-12-16 19:24:14.639903+00
Date Added: 2024-06-11T17:15:20.757301
License: Public Domain

The Chancellor.
This is a bill for the technical foreclosure of a mortgage upon real estate, against the defendants as the heirs at law of the deceased mortgagors. The defence set up is, that there was no presentation of the notes which the mortgage was made to secure,-to *482the personal representatives of the mortgagors, within the time prescribed by the statute upon that subject; and it is insisted that this omission not only bars any remedy upon the notes, but discharges the debt itself, and works an extinguishment of the mortgage. The statute requires that “All claims against the estates of deceased persons shall be presented to the executor, administrator or collector within eighteen months after publication of notice for that purpose by such executor, &c., and not after; and all claims not presented within the time aforesaid shall be forever barred, and the estate of the testator or intestate shall be thereafter discharged from such claim or claims, and the executor, &c. may give this act in evidence without pleading the same specially in bar of any suit or action either in law or equity brought to recover the amount of any claim or claims of which notice had not been given by the creditor or creditors, &c.”
It is perfectly clear, both upon principle and authority, that if the statute were one of mere limitation or negative prescription, affecting the remedy only, then although the remedy at law for recovering the debt secured by the mortgage may be barred, this could not affect the right of the complainants to a foreclosure of their mortgage in this court; because such a proceeding involves the title to the land itself, which by analogy can only be barred by the limitation of twenty years. In many cases a party may have one remedy, although he may have lost another in respect to the same claim. Such is the case of a creditor holding a mortgage for the security of his debt; he may file his bill in chancery to foreclose, bring his suit at law for his debt, or his action of ejectment for the possession of the mortgage premises, and his right to recover in either form of action could not be affected by showing that he was barred as to one of them, because such a statute affects the remedy only, and leaves the debt or claim still subsisting. Belknap v. Gleason, 6 Conn. Rep. 160; Hughes v. Edwards, 9 Wheaton Rep. 489; Lingan v. Henderson, 1 Bland’s Ch. Rep. 282; Duval’s heirs v. McLoskey, 1 Ala. Rep. N. S. 745.
But it is insisted that the statute referred to not only limits the remedy but discharges the debt, where the holder is under obligation to present it within the prescribed time and fails to do so; and this I think is its plain and obvious construction. If, therefore, the *483complainants were bound to present their claim, their omission to do so not only discharged the debt, but extinguished the mortgage, for whatever releases or extinguishes the first, equally extinguishes the latter. Gookin v. Sanborn et al. 3 New Hampshire R. 191.
The principal question then to be examined is, does this statute apply to claims, the payment of which is secured by mortgage on real estate. I think not. In such case the title to the land stands pledged by solemn contract for the payment of the debt, and the mortgagee may at his election repose upon that pledge alone, without looking to the personal assets of the mortgagor. The language of the statute is, that “the estate of the intestate shall be thereafter discharged,” &c. The word estate has a technical, legal sense, and denotes the quantity, of interest a person has in the thing to which it is applied. The interest which a mortgagor has in the thing mortgaged, is that portion of it which may remain after satisfying the debt. What estate, then, is'discharged? In such case it is clear that the statute can only apply, if it applies at all, to the equity of redemption which remained with the intestate at the time of his decease. It does not profess to affect or discharge any estate which he had previously granted out of the same thing.
A mortgage is something more than a mere lien or security for a debt. It carries with it a qualified title to the mortgage premises, which can only be divested by a payment of the mortgage debt. As between the mortgagor and mortgagee the fee of the estate passes to the mortgagee, and he may, unless he has stipulated to the contrary, at once enter or bring an action of ejectment to recover possession. Blaney v. Bearce, 2 [Greenleaf Rep. 132; Conrad v. Atlantic Insurance Company, 1 Peters Rep. 386; 16 Mass. Rep. 345.
If the complainants’ claim is discharged, it must be because the law imposed upon them the unconditional necessity of presenting it to the personal representatives of the mortgagors, and of receiving payment at their hands out of the personal assets. How stands the law upon' this subject? It is a well settled rule of pleading, that in a bill for foreclosure it is not necessary to bring the personal representatives of the mortgagor before the court. *484Calvert on Parties, p. 167, 168; Duncombe v. Hanstey, 3 P. Wms. 533, note A; Story’s Eq. Pl. 181. This could not be the rule if themortgagee were bound to seek the personal estate, or to look to the personal representatives. Indeed the very reason of the rule is stated to be, that the mortgagee is under no obligation to intermeddle with the personal assets or to seek an account thereof.
If then the creditor in such case is not bound to seek the personal assets for the satisfaction of his debt, there can be no reason for requiring him to present the claim to the personal representative, who has nothing to do with the real estate of the deceased, upon which the payment of the debt stands charged, by virtue of the mortgage. It is true that at common law, the personal property of a deceased person is the primary fund for the payment of his debts; but this is a question exclusively between the heir and the personal representative; in such a controversy the latter may be compelled to apply the personalty in exoneration of the realty. Parsons v. Freeman, Amb. Rep. 115. This doctrine does not, however, affect the right of a creditor who holds an incumbrance upon the realty as a specific pledge for the payment of his debt, to pursue that fund alone, if he shall so elect. I hence conclude, that it was only intended by the statute to “discharge” such estate as properly comes to the hands of the personal representative, to" be administered, and that it is only upon that class of creditors whose proper resort is to the personalty that the duty of presenting their claims is devolved.
Whence the necessity or propriety of presenting a claim to an administrator when the fund specifically charged with its payment is not in his hands. Under such circumstances, there might be strong moral reasons why the administrator might refuse payment, notwithstanding the solvency of the estate. Suppose the personalty to be barely sufficient to pay the general or simple contract creditors; they would, in equity, have a clear right to compel the mortgagee to resort to his mortgage fund, if that was sufficient; and if the mortgage creditors was allowed to exhaust the personal assets, they would be substituted to his rights under the mortgage. It is true, perhaps, that this equity would only be administered as between the creditors themselves; but the principle goes far to sustain the views which I have laid down. Although a mortgagee *485may, doubtless, seek the personal assets in the hands of the administrator for the satisfaction of his debt, yet the ground which I take is, that he is under no obligation to do so; he may, if he chooses, rely exclusively upon his mortgage; and the only effect of the non-presentation of his claim would be to deprive him of any participation in the personal property of the estate. Duval’s heirs v. McLoskey, 1 Ala. Rep. N. S. 745, 746.
But even if the complainants were bound to present their claim, still I incline to the opinion that enough has been done, in that way, to satisfy the law. The statute is one of mere policy, involving nothing of fixed principles; and the court will not seek, by construction, to place cases within its pale, where that policy would be contravened.
The inclination of courts has been rather to relieve than to force cases within the operation of such statutes. The obvious intention of the law is to give notice to the personal representative of the amount and the extent of the claims upon the estate, that they may be promptly arranged and the estate settled; and to advise legatees, creditors or distributees of the true condition of the estate. If this notice is fully and distinctly commúnicated, through any legal channel, the policy and purposes of the statute are as fully subserved as if that notice was derived through a personal presentation of the claim. Here the mortgage had been duly recorded, in the life time of the mortgagor, thus giving constructive notice to all who might thereafter become interested in the land mortgaged; and the administrator was as much bound to take notice of the claim which it recites as if it had been formally presented to him in person.
From this view of the case, I think the defence set up cannot be sustained, and that the complainants are entitled to a decree.
Let the case be referred to the clerk to compute the amount of principal and interest due on the mortgage.