Court Opinion

ID: 6139492
Source: CourtListenerOpinion
Date Created: 2022-02-05 14:32:21.56595+00
Date Added: 2024-06-11T08:54:34.362710
License: Public Domain

Spencer, J.
Two questions have been raised for the determination of the court: 1. Whether the appellants who are the heirs of Sarah, who xvas the xvife of Henry Wisner, xvere creditors under the marriage contract, so that, in equity, that contract bound the premises in question to pay those demands, after paying the mortgage given to Beckman ? 2. Whether an equity of redemption could be seized and sold by virtue of an execution at laxv ? It xvill not be expected, that any opinion will be pronounced on the first question. It appears not to have been insisted on in the court of chancery; and although the appellants’ counsel xvould have had a right to argue it in this court, still they have not attempted it. Of course it xvill, as respects myself, be laid out of the case. The decision of the second question, xvill require an attentive consideration of our oxvn municipal laws, with such aid in the construction of them, as we may draw by analogical reasoning from the British authorities: for I take it to be xvell settled, that in England there cannot be a sale of an equity of redemption upon a mortgage for a term of years. It perhaps may admit of doubt, whether an elegit or levari facias cannot there be served and executed upen land mortgaged in fee, xvhilst the mortgagor is in possession, and xvhen his right consists of an equity of redemption only. That it was the uniform practice, under the> colonial government, to sell under a fi. fa. all kinds of interests which the debtor had in lands, including equities of redemption, has been admitted. That this practice continued until the year If8/, has been also admitted. And though the practice cannot legalize a procedure unauthorized or forbidden by the laxv, yet, in cases admitting of doubt, it may, and ought to be regarded, in expounding statutory provisions, in relation to the same subject. By the statute of the 19th of March, If 8f, it is enacted, “ that all and singular the lands, tenements, and, “ real estate, of every debtor shall be, and hereby are, made “ liable to" be sold on execution,” &c. This statute was reenacted among the revised laxvs, in 1801. The extent and legal operation of the term real estate, will, in a great measure, decide the question. Courts of equity and courts of law undoubtedly regard the rights of a mortgagor and mortgagee, in a different manner. In the former, the land is considered as a pledge for the debt secured, and the mortgagor is considered the real owner 3 in the latter, the legal estate, to some *66purposes-, is considered to be in the mortgagee! from the mo ment of the execution of the mortgage, liable to be defeated-' by the performance of the condition, to wit, the payment of the money. In other respects, the courts- of law follow the no-tions of a court of equity, and consider the mortgagee as holding the mortgage, as a mere security for the money due. Thus it is, that at law, on the death of the mortgagee, the money due is considered as personal assets, in the hands of executors or administrators. So, too, om the- death of the mortgagor, his right to the mortgaged property, if he originally Had a fee,, and the mortgage was in fee, will descend to his heirs, and- not to his personal representatives. An equity of redemption may also be entailed -r whereas, if it was considered a chattel, it could not be—nor could it, if considered as a mere right. By a devise of all lands, tenements, and hereditaments-, a mortgage in fee-will not pass, unless the equity of redemption be foreclosed- Again—a husband may be tenant by the curtesy of an equity of redemption. To perfect this right, four things are necessary; marriage, issuey death of the wife, and seisin in fact« And, as to the latter requisite,- it is laid down, that an equity of redemption was not to be considered as a mere right only,, but must be taken to be such an estate whereof there might be a seisin. From all these considerations, it appears to me, that a mortgagor’s right in an equity of redemption, is- to be considered as comprehended within the broad expression of “• real estate.” I am the more confirmed in this opinion-, from the general and ai» most universal- idea and practice which has prevailed for a series of years, as well as "from, the legislative declaration, that a mortgagor in possession is a freeholder, within the meaning of the constitution, and as such entitled to vote. It has, however, been said by the appellants’ counsel, that the form of the execution requires a legal seisin, and that a mortgagor cannot be legally seised. This exception has already, in some measure, been considered. There are two answers to- it; First—the form of the execution bught not to control the declared- intent of the legislature, in rendering every species of real estate liable to sale; aná on no sound construction can this exposition be admitted. Second—when a statute speaks of a seisin, an equitable seisin may be as well intended as a legal onej and the term is applicable to both. 1 can, there» *67■fore, perceive no substantial objection to the sale of an equity ■of redemption, under an execution at law. Difficulties have been started, in relation to the provision, giving remedy to purchasers evicted for want of title in the person against whom the execution issued; and it is said, that the purchaser can immediately have this remedy, where an equity of redemption only has been sold. If this position was well founded, it would only prove, that the legislature had not foreseen all the cases which might occur under that provision; but it certainly proves nothing as to the right to sell an equity of redemption. I do not, however, perceive the difficulties, which have been pointed out, in the same light the appellants’ counsel have. The authority given to the supreme court, after suing ■out the original and stating the grievance, is, to hear the complaint, and do justice to the parties. Surely it would be attended with no difficulty to decide, whether the equity of redemption sold, was incumbered beyond the amount stated, at the time of the sale; or, whether the purchaser was, in judgment of law, evicted of the equity of redemption he had purchased. Arguments ab mconvenienti have been suggested.; there can scarcely exist a case, however well settled, where such arguments cannot be urged; they prove nothing, and are to be listened to only in very doubtful cases. In the present case, there would be no more difficulty nor inconvenience than exists every day, where there are several judgments, and the senior judgment creditor is disinclined to a sale. On whole, I am for affirming the chancellor’s decree % tut ns present question has never before occurred in our courts, cept in one instance, where no decision was made, I do think that it would be discreet to impose a mulct. The spondent ought to have his costs only.
Kent, J. The right of redemption was contended for in • the court below, and again in this court, on two grounds: 1st. That the marriage contract bound in equity the premises in question, to pay the money that Henry Wisner had covenanted to pay; and that the same belonged to the appellant and the other children of Sarah Waters, who were creditors under that contract. 2dly. That an equity of redemption cannot be seized and sold by virtue of an execution at law; and consequently, that the same still exists in the appellant Waters, as a purchaser under the devisees of Wisner. I do not *68perceive that there is any basis for the first doctrine. Th'é land in question had no connexion whatever with the subject matter of the contract. There is no instance where an equitable lien has been carried to such an extent. The consideration of the contract did not arise from the land; and there is no equity that this particular land should stand charged with the fulfilment of the contract, when there was no agreement to that effect, and especially as against a creditor or a purchaser, without notice of the contract. "The only real question then in this case is, whether an equity of redemption can be sold under an execution at law ? This is a point of importance and difficulty; and although I cannot arrive at any conclusion altogether free from embarrassment, I am inclined to the opinion, that, under the act of our legislature, an equity of redemption can be sold at law; and consequently, that the de-, cree is correct, and ought to be affirmed. I admit, that under the English law, an equity of redemption cannot be sold by process at law; and yet their decisions have approached pretty nearly to the same thing. According to strict technical form-and-language, a mortgage -in fee is, at law, a conveyr anee of the estate, and differs from -an absolute sale only in respect to the equity of redemption, which is a mere equitable interest. As far as concerns the rights of the mortgagee, these strict formal ideas are fully enforced. Hence a mortgagor in possession is held to be like a tenant at will: he re- - . 1 . , ceives the rent by a tacit agreement; but the legal title toqhe rent is in the mortgagee, who may put himself in possession o' it, and turn outthe mortgagor whenever he pleases, The mortgagor, in such a case, would not be entitled even to a ■notice to quit, nor to -reap the emblements -as other tenants at will are, because all arc liable to the debt. But when the mortgagee’s rights are not in question, a mortgagor in possession, and before foreclosure, is a totally distinct character. •He is regarded as the owner of the land, and the mortgage is treated as a mere incumbrance. He may levy afine, .and -thereby bar all the world, except the mortgagee, who is exempted from its-operation by the nature of the contract. He may suffer a common recovery, or otherwise aliene the land. descends to his heirs as real estate. It is deviseable as such. These are all marks of ownership, and go to show, that “ a mortgage, until foreclosure., is now considered as a *69v personal engagement only, in which the land is merely a v' pledge for the money, and remains in the mortgagor to 61 every purpose, except that of securing the loan.” It has, accordingly, been frequently observed by the judges in the court of K. B. that a mortgagee, notwithstanding the form of the instrument, has hut a chattel interest, and the mortgage is only a security; that it was an affront to common sense, to say the mortgagor is not the real owner; that the' law recognizes his interest, and he has a right to the possession till the mortgagee brings his ejectment; that neither courts of law nor equity lose sight of what the parlies intended, and will not look to the mere form of the conveyance, but will consider what the parties really meant by it; that the mortgagor in possession is owner to all the world, and the estate of the mortgagee a mere chattel interest, the same as the money due by the mortgage; that it accordingly goes to his executors, and is deviseable in the same loose manner as other chattels; that the assignment of the debt, or even forgiving it, and that too by parol, draws the land after it, as a consequence. These different and apparently contradictory lights in which the subject is viewed, arise from this circumstance— that, in the one case, the courts speak of the mortgage in reference to the rights of the mortgagee ; and, in the other case, as it respects all the world, except the mortgagee. In equity, the mortgagor has been uniformly regarded as the legal owner; and the courts of law have latterly, in many re= spects, adopted the more rational ideas of chancery on thir subject. If the mortgagor is to be deemed the owner of the land, as respects his own acts, and as respects the word, subject only to the lien of the mortgagee, it is neither unreasonable nor improper, that courts of law, at the instance of other creditors, should treat the land as his, under the same limitation. There is no more inconvenience in subjecting the land to execution, because there is a mortgage upon it, than there is where a prior judgment has bound it. The vendee, in both cases, will purchase subject to the lien; and he cancalcúlate the value, deducting the incumbrance, as correctly in the one case as in the other. The difficulties suggested on the subject, are not found to exist in practice. The English courts have gone so far, as to consider the equity of re-tdemption of a mortgage of a term, as bound by an execution *70at law in the like manner as if it was the term itself. A judgment creditor is required to take out execution at law, in order to create a lien upon an equity of redemption of a term, before he is entitled to go into chancery to redeem. The statute of frauds also'makes lands, in the hand of a trustee, liable to sale on an execution against the cestui que trust; but this is considered as applicable only to a strict technical trust, and no case has gone so far as to allow an equity of redemption to be sold at law. This seems, however, to be implied in the remark, that a tenant, by the elegit, can redeem an equity of redemption; for, to be a tenant by the elegit, he must have been put into possession by the sheriff. But the question was finally settled in 1781- An equity of redemption was sold on execution; and on a bill to redeem, it. was ■ contended on behalf of the purchaser, that an equitable interest might be taken in execution; and that the sheriff’s sale was the same as the conveyance of it. The lord chancellor, however, after some hesitation, set aside the sale, on the ground, that an equity of redemption was not liable to be taken in execution under the statute of frauds ; although he admitted, that under that statute- the sheriff might extend an equitable interest, or in other words, a chose in action. Choses in action are, in other instances, liable to execution at law. Long before the statute of frauds, it was held, that the sheriff, on an elegit, might extend a rent charge, although he could not a rent seek; which, being wholly detached from any right in, or power over, the land, could not be delivered as liberum tenementu.tv The sale of an equity, with us, must then depend upon the construction of our statute. I have taken this slight view of the English law to show, that if our act be an innovation in this instance on the previous law, there is nothing in it that ought to alarm us, as incongruous or unreasonable; for it is certainly agreeable to the general bent and spirit of the more modem decisions; If I am rightly informed, we have in this state a long and established practice in favour of such sales. This usage is of itself deserving of considerable weight. The practice of selling equities of redemption, with us, is supposed to be at least as ancient' as the statute of 5 G. 2 c. 7, in the year 1732. That statute made lands, hereditaments, and real estate, within the English colonies, chargeable with debts, and subject to like .remedy and process in *71any court of law or equity, by seizing and selling as personal estates. The statute uses the broad expressions of lands, hereditaments, and real estates. They were to be treated exactly as personal propertyj and it became usual to regard lands and real estates as assets in the hands of executors, and to cause them to be sold on execution against executors. This practice continued down to the year 1786, when it was abolished. Equities of redemption continued to be sold to the time of the first revision of our statute law, when the sale of lands on execution was particularly regulated; and if it had been intended to have abolished that practice, it is probable the act would have contained some explicit declaration on the subject, or at least that it would have uied precise and definite terms, that could not mislead, or be misunderstood. But the act of 1787, adopted the same loose latitudinary terms as those in the statute of G. 2. It declares, that all and singular the lands, tenements, and real estate, of every debtor, shall be liable to be sold upon execution, to be issued by virtue of a judgment in any court of record. This whole provision is, therefore, made by the very terms of it, exclusively applicable to a court of law; and whatever interests are included within the description of real estate, they are equally included within an execution at law. And there can be no doubt, I think, but that an equity of redemption will be comprehended in the expression. The form of the execution pre* scribed by the act, ought not to be construed to control thin, substantive part of the statute; and, if they cannot be reconciled, the general direction, from the nature o£ the ty.TvpVeta visions, ought to prevail. We have seen, from a case I haw already mentioned, that a liberum tenementum, or freehold, will include a rent charge, although the fee of the land res ide:» elsewhere; and the word Land, in the body of the execution will apply to the mortgagor’s estate, especially as the word Seisin, in a statute, is frequently construed to apply to an equitable, as well as to a strict legal seisin. The application is always according to the subject matter, and to give the statute complete effect. There were several objections strongly urged to this construction of the act. It was said, that the remedial provision in the other parts of the act, in case eviction of the purchaser, will not apply to the case of a purchaser of an equity of redemption» I have not been able to *72discern, why the purchaser "of an'equity of redemption cannot?,. in the first place, obtain possession of the land, as against the mortgagor or his assigns; and why he may not afterwards be ev-ctecj_ The .judgment is undoubtedly a lien on. the land,. notwithstanding the mortgage. We have seen, that where a term for years is mortgaged, the equity of "redemption is bound by execution in like manner, as if the term had not been mortgaged; and, except where the mortgagee himself is a party, I should doubt whether the mortgagor would be. permitted to set up the mortgage in opposition to the purchaser. Where the mortgagee’s rights are not in question, the mortgagor is regarded as the owner. A court surely would not permit a juryman to excuse himself, by denying he was a-freeholder, because there was a mortgage on his land. A mortgagor in possession, and before foreclosure, is competent to be a tenant to the praecipe ; for he can levy a fine, or suffer a recovery. He is therefore a tertenant; and, in the case stated at the bar, I should incline to think the judgment ere-, ditor might have a scire facias against the heir or assignee of the mortgagor. But it is not essential to give any definitive, "opinion on these points; nor do I wish to be understood to, do so—for, admitting that the remedies to the purchaser of an equity of redemption are not as complete as they are in other cases, this will not limit the operation of the positive directions and powers in the act to which I have alluded. It would only be to be regretted, that the remedial part of the act was not extensive enough; and it might lead to legisla"five1 annendment. The creditor in England was allowed his extent a long time before the statute provided a remedy for him: on eviction. And perhaps- similar difficulties might be started, as to the powei; of a court of law, to give full effect to the purchase of a trust estate, under the statute of frauds; byt still the sale thereof, on execution, is not to be disputed. The selling of real estates, and equities of redemption on execution, is peculiar to us; "and it would not be surprising, if some of the technical rules of the common lav/ might meet with difficulty in their application to 'the case. If the purchaser can take possession as against the mortgagor, when in possession, he may defend himself against an ejectment by the mortgagee, by bringing the debt into court. In this way he may protect himself completely at law. The doctrine of *73equitable assets (and which was much pressed upon us in the argument) is not, however, affected by allowing the sale of an equity of redemption. It is settled, that an equity of redemption is not equitable assets, as against judgment creditors. Arguments drawn from inconvenience, are entitled to much consideration, in cases of doubtful construction; but, in the present case, I am of opinion they operate in favour of the decree. A very considerable part of the lands in this state, are under mortgage to the loan-ofílces, and to individuals: it is likely they will continue so ; and if judgment creditors are under a necessity in every case of resorting to chancery, for leave to sell the land of the debtor, it would create double suits and double expense, and would lead to much inconvenience and delay. After, therefore, the best attention I have been able to bestow upon this nice and important legal question, and which was argued by counsel in a manner that did much credit te their researches and abilities, I am of opinion the decree below ought to be affirmed. The mortgagor was in possession when the equity was sold, and that formed a material ingredient in the '-ase. This opinion, therefore, is not intended to apply to the case of a mortgagee in possession.