Court Opinion

ID: 6573504
Source: CourtListenerOpinion
Date Created: 2022-07-20 19:32:08.776164+00
Date Added: 2024-06-11T15:56:59.814264
License: Public Domain

The opinion of the court was delivered by
Redfield, J.
This is an appeal from a decree made by the chancellor of this circuit. When the case was heard in the court of chancery, it appeared to me to be one of so much doubt, that I did not feel justified in exposing the parties to the expense of taking an account of so long standing, until the necessity for such expense was fully established by the decision of this court. In that view I understand my brethren fully to concur. We by no means justify the practice, sometimes adopted in the court of chancery, of allowing appeals upon merely formal decrees, without hearing. Such a course is only calculated to increase the number of chancery appeals in this court and delay the final disposition of many of them, without any adequate saving. Every case should be fully heard in the court of chancery; and then, no doubt, the chancellor may, in his discretion, make a decree with a view of saving needless expense to the parties, in case the supreme court should be of opinion the orator cannot prevail.
But upon a full hearing of this case, upon very satisfactory arguments upon both sides, we incline to the opinion, that the orator ought to be permitted to redeem. Cases of this kind will always depend very much upon the determination of the facts. In that particular, one case is not a rule for the determination of any other case, (unless the two cases are alike in all particulars, — which never occurs,) and therefore need not be reported, so far as the facts are concerned.
The points of law here decided are, that when the orator contracted to sell out his equity of redemption to his mortgagee, he is, in this court, entitled to very favorable consideration, on account of the unequal relations in which the parties stood at the time. The one was the superior and the other the dependent. The one had power and resources; the other had neither, but was sore pressed by necessity. In addition to this, the defendant was clearly the mortgagee of the premises for such a sum, as it was not in the power of the orator readily to raise. The price was little more than two-*13thirds the value of the premises. It was agreed, that the defendant should sell the premises, and, if they brought more than the price paid by the defendant, the plaintiff should have the surplus. Under these circumstances we think the contract must, in equity, still be considered a mortgage, with a power of sale in the mortgagee. It is well settled, that, in all transactions between the mortgagor and mortgagee, the conduct of the mortgagee will be watched very narrowly ; 4 Kent 143, and note, and cases there cited. This is the language of all the cases, and of all the books, in regard to all purchases, made by trustees, of the interest of the cestui que trust. Such contracts are not positively disregarded in a court of equity; but they are viewed suspiciously and criticised with some degree of severity.
The only other ground, upon which the defendant claims to hold the estate free from the plaintiff’s equity of redemption, is, that, in pursuance of the power of sale, he caused the estate to be sold at auction and became himself the purchaser. Such sales have always, in the English chancery, and in this country, unless when the matter is controlled by statute, been held voidable, at the election of the mortgagor, or cestui que trust, unless he delay for an unreasonable time to make his election, — in which case he will be held to have confirmed the sale by his acquiescence. The cases are too numerous upon this point, and there is too little conflict in the decisions, to require an elaborate review of the subject.
The State of New York, bj statute, allows the mortgagee, in such cases, to become the purchaser, if he conduct the matter with perfect fairness. In that State, therefore, the decisions upon this subject rest upon a somewhat different basis from the English cases. In the former the sale is prima facie good, and it is therefore incumbent upon the cestui que trust to impeach its fairness; but in the latter the sale is, always, either good, or bad, at the election of the cestui que trust, — as in the case of a contract of sale between an infant and an adult. The authorities will be found sufficiently referred to and digested in Davoue v. Fanning, 2 Johns. Ch. R. 252, and in Mr. Sumner’s note to Whichcote v. Lawrence, 5 Ves. 740. Bergen v. Bennett, 1 Caine 1, is somewhat of an elaborate case upon this point.
The decree of the chancellor is therefore reversed and the cause remanded to the court of chancery to be there proceeded with.