Majority
p. 47Thomas Waters, Richard Thorne, and Sarah his Wife, Appellants, against John Stewart, Respondent.
Headnote
Under our act judgmentsSand executions, an demotion may by the an execution on a fi- fa-THIS was an appeal from a decree of his Honour'the chanccllor. The complainants filed their bill, as well in behalf °f themselves as others the heirs and devisees of Sarah Wisner, deceased, who might come in and contribute, &c. he. The bill set forth an indenture of three parts, dated the 8th 1769, between Henry Wisner, since deceased, of the one part, Sarah Waters, since deceased, of the second part, and the complainant, Richard Thome, of the third part; which indenture was admitted by the defendant; and among other things, as far as it is material, substantially contained as follows :—That in consideration of a marriage about to take place between the said Henry Wisner and Sarah Waters, she had conveyed to him all her estate, real and personal, authorizing him to sell and dispose of the same; the monies thence arising to be enjoyed by the said Henry Wisner, during the joint lives of him and the said Sarah, he maintaining and educating three children of her’s by a former husband, namely, Elizabeth, Hannah, and Thomas Waters, till they should come of age or marry, if the said Henry should so long live. But in case the said Sarah should survive the said Henry, the money arising from her estate as aforesaid, should be paid to her ; and in case he survived her, it was to be paid to her children before named ; and that in such case she should have and enjoy during her widowhood, a dwelling-house and
p. 48
*"arm situate in Goshen, containing about seventy acres, xvhich -were the premises in question. It was admittec* that the marriage between Henry Wisner and Sarah Waters took place ; that he took and disposed of the property sPé conveyed to him, to the amount of £425. That Henry Wisner died in the life time of Sarah, insolvent, but did not secure to her the money arising from her estate as he covenanted to do ; consequently, that a considerable sum was due to her after his death, and to her representatives after her death, from Wisner’s estate, which can never be obtained,' unless the premises in question are made liable. That Sarah, the widow of the said He-nry Wisner, enjoyed the said house and farm in Goshen, during her widowhood, under and by virtue of the said marriage contract, and until her death, which happened in or about the month of July, 1801. It" was also admitted, that Henry Wisner, deceased, in his life time, to wit, on the 14th day of February, 1786, mortgaged the said house and farm to William Beekman, to secure payment, on or before the 14th day of February, 1787, of £387. 13s. with lawful interest, bona fide due. That William Beekman on the 13th of October, 1792, for the consideration of £300, (200 whereof was then paid, and a bond given for the remaining £100, payable on the death of the said Sarah Wisner) sold and assigned the said mortgage and a bond which accompanied the same to the respondent, John Stew■art, with all the money due and to grow due thereon. That a judgment at law was obtained against the said Henry Wisner, deceased, and thereupon a fieri facias and venditioni ex-ponas were issued to the sheriff of the county of Orange, who by virtue thereof, in the life time of the said Sarah, the widow of the said Henry Wisner, among other things, sold the equity of redemption of the said mortgaged premises, subject to the said widow’s estate therein, to Henry Wisner, junior. That Henry Wisner, junior, on the 19th day of April, 1791,, conveyed among other things, the right and interest he had, -purchased in the said premises, to Polydore B. Wisner, as a trustee, to enable him to sell and convey the same ; and Po•lydore B. Wisner, on the 11th of January, 1793, conveyed the said equity of redemption in the said mortgaged premises to the defendant, John Stewart, in satisfaction of a book debt he had against Henry Wisner, the elder, then deceased.
p. 49
Thus the defendant, as assignee of the mortgage and the purchaser of the equity of redemption, under a sale on an execution at law, claimed to be the legal - and absolute owner of the house and farm in question-. It was admitted that Henry Wisner, deceased, by will duly executed, devised the said house and farm to his two daughters Elizabeth and Sarah, in fee. That, since the death of the said Henry Wisner, and before the bill was filed, the said Elizabeth and Sarah, in due form of law, conveyed all their right and interest as such devisees in the said house and farm, to the complainant Thomas Waters, in fee. The bill was to redeem the house and farm, by paying to the respondent, Stewart, what he was entitled to receive as the assignee of the mortgage ; that is to say, the sum he paid with interest ; or, if he should be entitled to it, the whole amount of the mortgage-money and interest. This right of redemption was contended for before the Chancellor on two grounds ; First, That the complainant, Waters, and the other children and heirs of Sarah, the wife of Henry Wisner, were creditors under the marriage contract; and that, in equity, that contract bound the premises in question to pay those demands, after paying the mortgage given to Beckman. Secondly, That an equity of redemption could not be seized and sold by virtue of an execution at law, and that consequently, Thomas Waters, having purchased and taken a conveyance- from the devisees of the estate, had a right to redeem the mortgaged premises upon equitable principles, by paying the assignee of the mortgage what he was entitled to.
The Chancellor being of opinion against the complainants on both grounds, decreed thatthe bill shouldbe dismissed with costs, and thus assigned the reasons on which he had pronounced.
Mr. President—This cause came before-the court on a motion for the dissolution of an injunction, issued to restrain the defendant from obtaining possession at law of the premises in question. On that motion the whole ground of controversy was explored, and. the counsel for the parties, discovering that a determination on it would involve a decision on the merits generally, argued it a second time, as on a final hearing. In doing this, they united in presenting, as a determining point between the parties, simply, 'whether an equity of redemption in lands mortgaged in fee, is subject to a sale
p. 50
as a fieri facias ? To determine this question, the nature of the subject, and the course of the arguments of the counsel, lead me cursorily to trace the progress of the English jurisprudence (as far as it has any bearing on this point) from its departure from the common law, until the act of the 5th Geo. 2d, and the subsequent modifications it has received here. It is certainly a sound moral principle, that every description of property held by a debtor, should be subject to the payment of his debts'. The policy deduced from the feudal system, was, however, far from being in strict unison with this principle; and had so far blended itself with the English institutions, as generally to resist the infusion of those dictated by more just and liberal views. This detracted from the security and preservation of lands in the hands of those who held them, and their heirs ; for, at common law, only goods and chattels, and the growing profits of land were, on a levari facias, or a fieri facias, liable for the satisfaction of debts. This strictness was somewhat retained by the statutes of elegit; for it appears to have been a reluctant departure from the more ancient doctrine—certainly not reconcileable to its general scope and object, and equally remote from the principle the framers of the statute appear to have been disposed to approach : for, instead of carrying the remedy the length which complete and effectual justice required, it subjected only half of the debtor’s real estate to an extent, with a reversionary interest to him or his heirs, after the debt was satisfied from the profits of the lands. The inroad made on the common law principles, by giving the elegit, has, however, been protected by several successive statutes: thus Blackstone, in his Commentaries, enumerates, among the evils arising from the doctrines of uses, the defrauding the creditor of his extent for debts. He adds, to remedy these inconveniences, abundance of statutes were provided, which, among other things, made the land liable to be extended by the creditors of cestui que use. Among these, the statutes of uses, and of frauds and perjuries, were most effective ; and, after the passing of the latter statute, a trust estate, whether declared or resulting, was considered, in the language of Blackstone, “ as equivalent to the legal owner- “ ship, governed by the same rules of property, and liable to “ every charge in equity, which the other is subject to in law.” “ The trust may descend; be alienated; is liable to debts;
p. 51
ci to executions on judgments, statutes, and recognizances “ (by the express provision of the statute of frauds) to for- u feitures, to leases, and other incumbrances, nay, even to “ the curtesy of the husband, as if it was an estate at law’’ Thus, in the case of Casborne v. Scarfe and Inglis, lord Hardwicke lays it down, that an equity of redemption cannot be considered as a mere right: but such an estate whereof there may be a seisin, and that the person entitled to it is considered as the owner of the land;. that an actual possession, clothed with the receipt of rents and profits, is the highest instance of an equitable seisin ; and that the mortgagee, as to the legal estate and inheritance, is merely a trustee for the mortgagor, until the equity of redemption is released or foreclosed. In the case of Amhurst v. Dawling, an advowson, appendant to a mortgaged manor, had, before that, been held in the nature of a trust for the benefit of the mortgagor: so, in the case of the Attorney-General v. Hasketh et al’, in w'hich the same doctrine had before been laid down; and it is in that case expressly declared by the lord Keeper, that the court which supports trusts, will prevent trusts from doing mischief The spirit of these cases has been recognized and enforced in the British courts of common law. In the case of the King v. the Inhabitants of St. Michaels, decided after our revolution, lord Mansfield emphatically declares it to be “ an affront to “ common sense to say, that the mortgagor is not the real “ owner.” And whatever might have been the construction at an earlier day in those courts, in equity, the intent of the parties has been permitted to give a complexion to this kind of transaction, and to constitute it a naked security for the payment of money, without any of the substantial rights ownership. It is merely a lien until it is foreclosed, or the possession acquired by the mortgagee: thus the mortgagor, until either of these events occur, is the beneficial owner; he takes the rents and profits without any account; he is a freeholder, qualified to vote as such, and he is deemed the owner of a landed estate within the English settlement laws. The provision for admitting him to vote, is, indeed, by statute;
p. 52
but it appears to me merely a declaration of the law, previous to the passing of the act, and introduced for greater caution, "hhe case of Lyster v. Dolland, reported in 2d Brown’s Ch. Rep. 478, and 1 Vesey, J. 431, does not impugn the general doctrine; for in the report of that case in 1 Vesey, the lord chance^or admits, “ that an equity is extendable, and the mort- “ gagor is expressly let in to redeem, on the ground that the “ mortgagee had so mixed his own interest with that of the “ mortgagor, that they could not be distinguished.” I take it, then, that an equity of redemption in England is an extendable interest, and that so is the property of cestui que trust in the hands of trustees. Bunb. 346. The solicitude of the holders of landed estates, to perpetuate them within families, combined with the genius of the English government, contributed to maintain the distinction between real and personal property, which obtained after the passing of the statute of elegit: but the collision between the landed and commercial interest being merely local,, as confined to Great Britain, and not so extending to its colonies as to re-act by influencing its parliament, in which the landed interest of those colonies had neither a direct nor virtual representation, the same impediments did not present to the passing of the stat. of 5 Geo. 2 chap. 7, for the more easy recovery of debts in the colonies. This subjected real estate to a disposition, in like manner as personal, on execution, and a remedy was thereby given, co-extensive with the property of the debtor, regardless of the distinction which had been so sedulously preserved in Great-Britain. This statute so far extended in practice in this state, while a colony, as to affect lands by sales on executions, issued on judgments obtained against the executors of debtors, on the principle, that the statute of 5 Geo. 2, had, in its operation, so far as respected the interest of creditors, completely converted real into personal estate. It is certain, that sales of equities of redemption have been uninterruptedly made, from the time Pas«ng that statute, until the legislature passed the statute of 19 March, 1787; and the same practice, as to such sales,
p. 53
lias continued to prevail under the latter statute. This statute subjected every species of estate, comprehended in the very extensive description of “ lands, tenements, and real estatetb r' . . be sold on execution, and is strictly compatible, m its most comprehensive construction, with the general provision, that both real and personal estate, in the hands of the heir or executor, (and whether the debt was contracted by specialty in which the heir was named, or otherwise), shall be applied to the satisfaction of the debts of the ancestor, or testator. There is one objection which was strongly urged against giving effect to those sales here, and that is, that the purchaser could not take the effect of it at law. If this position was correct, I do not think it is so forcible as the counsel who urged it. A sale on execution is not enforced peculiarly by the court under whose process it is made ; the evidence of the sale is furnished by the sheriff, and the purchaser elects the forum, to which he intends to resort, to give him the benefit of it. If any of the fora of the state are competent to give him the effect of his purchase, every intent of the sale is fully accomplished ; and I know no legal or equitable principle that can repel this result. But if the mortgagor ivas possessed, at the time of the sale, the controversy must strictly be between the mortgagor and purchaser: no inconvenience can arise from compelling the former to yield his possession to the latter. Thus, in a recent case, it has been held in the K. B. in the case of Bristow v. Pegg, 1 D. & E. 758, 25 Geo. 3[49] , if there is an existing title .paramount the person who holds, he fnay avail himself of it by showing it, and it does not lie in the mouth of the mortgagor to allege its existence; for, notwithstanding a title might exist, by virtue of which the person actually seized might be ousted, it would seem strange that his right of seisin should pass by the sale, and the latent equitable interest which he had in the lands, should be retained by him. From these considerations ; from the number of estates which depend on supporting sales of this nature ; from the long practice which has obtained respecting them; and from the great inconvenience which would result from the doctrine, that however great the disproportion between the sum secured, and the value of the estate charged with it, the latter might be protected from being; applied to the satisfaction of judgment creditors on executions, I think sales of this
p. 54We admit the moral justice and policy of making every man’s property liable to his debts, and we shall even concede that with us, these principles have been carried' further than in England; but notwithstanding this, the distinctions between legal and equitable estates, have in each been preserved, their boundaries equally marked out, and the fora by which they are to be approached kept invariably distinct. In equity, the mortgagor is considered as owner of the land ; at law, the estate, on executing the mortgage, is in the mortgagee, and he may, unless restrained by his covenant, enter immediately. 1 Pow. on Mort. 205. 226. And though a mortgagor, left in possession, pays no rent[49] , that arises merely from the contract, the interest of the money being an equivalent. He is a mere tenant at sufferance to the mortgagee; for - after forfeiture, so completely is the legal estate vested in the mortgagee, that the mortgagor is not entitled to the common notice to quit, which must be given to a tenant at will. The idea of a constant practice to sell, under a fieri facias, equities of redemption, is a mistake ; (I never heard of but two instances ; one was settled, the other is now in dispute. The maxim therefore of, communis error facit jus, cannot apply. But errors merely acquiesced in, and never disputed, do not constitute the law[46] . Actions by and against executors and administrators, had been from the date of our revolution entertained in justices’ courts ; yet the first time one was brought before the supreme court, they reversed the judgment below[47] . So under the act giving cognizance of plaints. Another instance is afforded by the corporation of New-York. They had for 40 years been in the habits of creating penalties, and giving half to the informer. Suit upon suit had been brought, and recoveries had, yet their right to do this was over-ruled the instant it was attacked in the supreme court. All power of selling under executions at law landed property, or any thing savouring of the realty, is by statute provision; and what the words of the statute do not cover, cannot be sold. Therefore equities of redemption,
kind ought to be sustained; and that, whether the mortgagor is considered as the real ozvner, or the mortgagee is considered as his trustee, an equity of redemption is within the purview of our statute, and subject to sales on execution. The complainants’ bill must, therefore, be dismissed with costs.
Riggs for the appellants.
p. 55even of chattel interests,, in terms of years, are not saleable under a levari facias, because the act has not the words “ equitable interests.” Burden v. Kennedy, 3 Atk. 738. Lyster v. Dolland, 3 Bro. C. Rep. 478. 1 Vez. J. 431. S. C. will be found to this point, notwithstanding the chancellor’s apprehension of its bearing the contrary way. An equity of redemption is not known at law; it is a mere creature of chancery, and cannot be contemplated, therefore, as an object of sale, by a court which does not acknowledge its existence. What is not, according to legal contemplation, in possession, but rests merely in right, cannot be taken in execution. Choses in action therefore cannot be seized on. Francis v. Nash, Ca. Temp. Hardwicke, 53. Impey’s sheriff, 157. On the same principle, goods pawned, demised, or letten for years, are not liable to a fi. fa. Impey’s sheriff, 158. Audley v. Halsey[49] , Cro. Car. 148. Kitchen, 226. To make an equity of redemption saleable at common law, will defeat the ends of distributive justice. A debt due on a book account, note, ... , . or on a bond, is as much a debt m conscience as one on judgment; but if the decision appealedfrom.be confirmed, one . . lr judgmcnt creditor may run away with even the equitable estate, and exclude all the other bona, fide, though simple contract creditors, from every farthing. It has been the policy of our courts to extend equitable assets, because they are appropriated in payment of debts pari passu. For this purpose an equity of redemption is considered as equitable assets, not for the purpose of rendering it inapplicable, but that it may be equally distributed. 2 Atk. 290[46] . 1 Vern. 410, 1-2[47] . Vern. 61[48] . 3 P. W. 341. Sir Charles Coxe’s case. 3 Keb. 307. Amb. 308[39] . 2 Freeman, 115. 3 Woodeson, 487. It so perfectly an equitable interest, that in an action against the heir of a mortgagor, he can plead rien par descent, though entitled to an equity of redemption. 1 Pow. on Mort. 369. ^ J * In all cases where land can be taken for debts, the- debt must be a lien on the land, and in case of the death of the judginent debtor, after an intermediate alienation, a scire facias
p. 56goes against the tertenant. But in the case of a mortgage, then a judgment, then the death of the mortgagor, to a scire facias against the tertenant, he may show tide in the mortgagee ; which demonstrates the legal estate to be out of the heirs of the mortgagor. The saleability of an equity of redemption is not denied, but convenience demands it should be in chancery. A mortgage máy have been for $10,000, and only one thousand due; the registry may show the full amount of the original sum lent to be still owing, and the equity be purchased, under that presumption, for a trifle. The reverse may be the case; double the sum apparent may, from accruing interest, be due, and the equity bought for a large sum, when in fact not worth a cent. Each of these cases may produce a bill in chancery. The mode of coming at equities of redemption is easy, without any violation of principles, preserving at the same time, the true distinction between equitable and legal estates,' and the jurisdictions by which they are cognizable. Let the creditor sue to judgment, then, by the analogy adopted in chancery, as the judgment would at law attach on the legal estate, its operation in equity will affect the equitable interest, and an incumbrance be created, which on execution sued out[49] , will entitle the judgment creditor to his bill against the niortgagee to redeem. 3 Atk. 200[46] . 1 Pow. on Mort. 349. 359. 360. 2 Ch. Ca. 170[47] . This brings the whole matter before the court, which alone can give full relief; the account on the mortgage is entered into ; the sum due upon it discharged, and the balance paid over. The Statute[48] by which trust estates are made liable to debts, will not warrant the decree complained of. That act relates only to fraudulent and covenous trusts, in which the cestui que use has the sole beneficial interest; it is a part of the statute of frauds, and therefore our act declares that[49] the land shall, under the sale, be held discharged of all such incumbrances. This would defeat the mortgage. The English authorities confine their law of frauds and peijuries, of which ours is a copy, to these trusts, and do not extend them to equities of redemption. 2 Saund. 203. Hard. 467[46] . 1 Black. Rep. 145 [47] . Our act, subjecting lands to debts, makes a provision in case the purchaser should be evicted: now, it is impossible for a man to.be evicted from an equity of redemption ; and if he was by the mortgagee, he would be entitled t»
p. 57recompense from the judgment creditor himself. This would make the remedy recur to the same point from whence it set out. In the case mentioned, there could be no legal seisin of the interest to be sold, and the form of the execution is of lands “ whereof seized[49] .” All that can be obtained against a mortgaged estate by a judgment at law, is an equitable lien ; for a judgment creditor cannot tack. 1 Pow. on Mort. 526 to 529. After sale of an equity of redemption by the sheriff, he could not give possession; ejectment would not lie upon his deed, and chancery must be at last resorted to, to give effect to the sale. As the lands and real estate of a debtor may be taken in execution, under our statute[46] , the words being “ all and singular the lands, tenements, “ and real estate,” the only question is, who is the owner of lands or real estate mortgaged? If the mortgagor was out of possession, we concede the sale would not be valid ; and that was the circumstance of the case from Atkyns[47] ; the termor had parted with the possession. Till the decision in Brown and Vesey, J. the saleability of an equity of redemption on an execution was never doubted; and, in favour of its being vendible under a fi. fa. the opinion of Mr. Powell[48] is a very strong authority. There can be no reason for excluding it from this incident annexed at law to real estates, when it partakes of every other quality which characterizes land. The mortgagee is proprietor of the mortgaged premises only so as to protect his security; against all the world but him, the mortgagor is the real owner. He may when in possession levy a fine[39] , or suffer a common recovery[40] , and must
Hoffman and Hamilton contra.
p. 58therefore have the legal freehold in him. His line bars all rights-but that of the mortgagee, who is not affected[49] by five years non-claim ; and need not make an entry. 1 Pow. on Mort. 220. In consequence of-this ownership of the mortgagor, his interest in the equity of redemption has all the properties of a legal estate. It passes by a general devise of “ all” my real and personal estate. 1 Pow. on Mort. 353. It descends ; the personal estate is first liable for debts; it may be .entailed ; it follows the custom in borough English. 1 Pow. 346. Nay, a mortgagor gains at law a parish settlement in consequence of his legal ownership[46] . Doug. 632[47] . Lord Mansfield in that case says, “ It would be an affront to com- “ mon sense to say the mortgagor is not the real owner.” But further a mortgagor is not accountable to a mortgagee for profits, even after the mortgage is forfeited. A mortgage in fee revokes a devise only pro[48] tanto. The right of presenting belongs to the mortgagor of lands to which an advowson is appendant[39] . Our statute book recognizes the.mortgagor as the freeholder : he is declared to be qualified to vote at elections in virtue of the freehold[40] m him. The estate of the mortgagee[30] has none of these qualities. He has only a qualified right sufficient to protect his debt. To make his title efficient, he must foreclose; but though he do this, and enter, he is considered but as bailiff to the mortgagor, and liable to account[31] . If he even assigns his interest, he still continues liable for the waste and depredation of his assignee. A general devise by him of all his estate, will not, even after fore
p. 59closure and possession, pass the lands mortgaged[49] . It goes to his executors as personalty, and not to his heirs, as the realty would. 1 Pow. on Mort. 438 et seq. He has but a chattel interest. Where then can the fee be, if not in the mortgagor ? This is further established, because a mortgage will pass' by a will, not attested according to the statute. 1 Pow. 455. The interest of the mortgagee is intrinsically nothing more than what arises from the contract of borrowing, and therefore, when the debt is paid, there needs no re-conveyance of the estate to the mortgagor[46] . This shows the legal estate remains in him, by virtue of the equity of redemption, and is necessarily liable for his debts by sale at common law under an execution. If this would destroy the mortgagee’s security, then it could not be valid ; but it is not so, the land remains subject to the mortgage. It is not an answer to this reasoning, to say, that our positions rest on chancery decisions. In equity, and at law, the rules relating to landed property are the same. 1 D. & E. 762, per Buller, J[47] . Courts of law have latterly been disposed to acknowledge equitable principles, to avoid sending creditors there. On this account the assignor of a bond, though it be a chose in action, cannot, after assignment, release the obligation; nor can even the obligor, after notice, discharge it. The inconveniences of selling an equity of redemption on account of an existing mortgage, are imaginary. They are no greater than in a sale on a third judgment, where there have been two previous ones for the penalties of bonds. The purchaser takes subject to the incumbrance. An equity of redemption is equitable assets[48] only in a certain sense: Among those who have no lien on the land; such as on a bill to redeem
p. 60general creditors, or in a trust for payment of debts; but not against a judgment creditor who by his very judgment °t,tains a lien which will entitle him to redeem. 1 Pow. on Mort. 348. To force him to this alone, is a grievance for which our statute meant to afford redress, by permitting him to sell to a person who may be able to redeem. A mortgage contract may be for 10 years, with a covenant that the mortgagee shall not be compellable to receive .it before; must a creditor, or a judgment recovered immediately after execution of the deeds, wait ten years ? The simple mode is to sell at once under a fi. fa. for chancery cannot order a redemption. The argument against selling an equity of redemption because it is equitable assets, is equally forcible against selling trusts ; for by the statute of uses they are made liable to be sold by the sheriff. So before the passing that act an heir might have pleaded riens per descent, though a covenous trust was existing; yet, since that law has been enacted, such a trust is saleable under execution. Though ejectment on a sheriff’s deed for an equity of redemption could not lie against the mortgagee, yet a mortgagor would never, in a court of law, be allowed to set up the title of his mortgagee against the purchaser; and against the mortgagee there would be no claim, because the purchase would be subject to his demand. If a mortgagor may sell, why may not a sheriff ? Whatever the debtor can dispose of, his creditor can sell. The remedy given in case of eviction, is where the debt-
p. 61or had no title, and the party purchasing is evicted by a pri- or incumbrance. But' it is under that we contend the purchase is made. The words of our act are, all lands and “ real “ estate.” 1 Vol. Rev. Laws, 388. The form of the execution given is against real estate whereof “ seised.” There is nothing to restrain the word to legal seisins. The word seisin has an equitable interpretation. 2 Bro. C. Rep. 268. 272. There may be an equitable seisin of an equity of redemption, for it admits of a tenancy by the curtesy, and to create such a tenancy there must be a seisin of the wife. The case cited from Atkyns, and 1 Pow. on Mort. 352-3, show this. We have a complete unían of legal and equitable interests ; we had the first, and we bought the latter. But whatever may be the reasonings from the common law and English authorities, we rest on the words of our statute, which subjects to sale under a fi. fa. “ all real estates,” without confining the operation of the words to such as are legal only. The English act of parliament furnishes no kind of reasoning against this, it makes land only extendible, and not saleable, Yet under that very law, lands on which there has been an ex- J 1 tent upon a statute merchant, may be extended upon an elegit[46] . Vin. Abr. Tit. Execution, M. 1. and the notes. So if a reversioner upon a lease for years acknowledge a statute &c. the rent and reversion will both be extendible[47] . Bac. Abr. tit. Execution, B. page 339. 2 Rol. Abr. 472. Co. Litt. 135. A rent charge[48] is also extendible. 2 Show. 85. Comb. 391. Our policy makes land moré liable than the English code. On a deficiency of personal assets, the court of probates can order a sale of the real[39] . In the very case of goods pawned, the judgment creditor obtains an interest, 3 Bulst. 17[40] ; and though these cannot be taken in execution, that arises only because possession is proof of property, which is not the case with land. It is said we cannot have the benefit of our execution, because in the case put, a sci. fa. would not lie against the tertenant. This reasoning would equally prevent selling where the legal estate is in the trustee; yet it was never known to prevail against an execution concerning
p. 62uses[49] . A vendee of partnership stock taken in execution for _ a debt of one of the firm, must, before he can have complete enjoyment of his purchase, discharge the lien of the partner ; yet this has never been urged- as a reason against such a sale. The same principle applies to equities of redemption. Our lands do not produce rents, and therefore convenience dictated our .law to sell the soil, because possession under an elegit would never pay the debt. The act of the legislature directs the realty to be sold in the same 'manner as personal estate. The arguments opposed to us are grounded on an application of equitable rights to legal estates. They tend to confound all distinctions between equitable and legal jurisdictions. They subvert established forms which have ever been held the land marks of property. The tenancy by the curtesy spoken of in the case from Atkyns[46] , cited in 1 Pow. on Mort. 353, was an equitable tenancy, founded on an equitable seisin, and therefore no authority to prove a legal right on an equitable estate. Only legal interests are liable to execution, because the law gives recourse against that only, to which the officer selling can give a legal title. Of lands articled, a man may be tenant by the curtesy, 2 Vern. 536[47] . But can his interest in such be taken on an execution ? Ejectment will not lie for an equity of redemption ; chancery must give effect to the purchase; therefore on a fi. fa. it cannot be taken, legal rights being always accompanied by legal remedies. The properties of an equity of redemption which it has analogous to an estate at law, such as being descendible, deviseable, &c. can be availed of only before the chancellor; therefore, the same analogy would say an equity of redemption can be sold only by application to him. But though the equitable qualifications of property may be similar to those of correspondent interests at law, that is only the result of the principle of equitas sequitur legem. Not that they are objects of legal cognizance. Lands articled descend ; a contract partly executed, may be availed of in chancery, but not at law, and the interests acquired under neither can be liable to a sale by the sheriff. In the cases of trust made sale-able by the statute, no beneficial interest of a third person intervenes, such as the mortgagee has at law. The necessity of a statute[48] provision to make such estates liable to execution, shows that the words -of the law subjecting • real estates
Van Vecten and Benson in reply.
p. 63to execution could not have been intended to extend to equitable seisins, for then the other statute would have been unnecessary. The right to vote and the right of settlement, which may be exercised and gained by a mortgagor, depend not on his freehold, but on his possession, and when he loses that, he loses his right[49] . Did they rest on his freehold interest, they would be the same, whether in or out of possession; and the act bestowing the right of suffrage, was passed only because without it, even by his possession, as he had no freehold, it would not be conferred. Upon the same principle rests his power of levying a fine; when out of possession, he cannot[46] , 1 Pow. on Mort. 220; but after a mortgage in fee, can he make a tenant to the prtecipe, for the purpose of suffering a common recovery ? All his rights depend on his possession ; therefore he, like a disseisor, may bring trespass. The reason why partnership stock may be sold under an execution against one of the firm, is, that the vendee may enter into possession with his co-tenant. This cannot be done on an equity of redemption. That a reconveyance of the mortgaged premises is unnecessary, is true' only in certain cases. If the mortgagor remain in possession and satisfy the debt when due, in any action, by the mortgagee, he would be allowed to show performance of the condition; and if the mortgage had been given up or cancelled, a jury would, in all such cases, be directed to presume a reconveyance. But if the mortgage is forfeited, and the estate become absolute in the mortgagee, then we say a reconveyance in strictness is necessary[47] . In case of an assignment of mortgaged premises, the mortgagee is liable only when, after a forfeiture, and before foreclosure, he assigns absolutely. Not because the freehold is not in him, but because he has exceeded his- equitable authority, equity xvill make him responsible; his right being there subject to redemption. That specialty creditors have in equity any preference is a mistake, for unless the judgment creditor first removes the mortgage, he comes in pari passu[48] . When he gains a preference, it is not on the foot of his equitable lien, but because having discharged the legal incumbrance, he stands on his legal rights, and is in some degree a purchaser. 3 Atk. 293. 1 Pow. on Mort. 369 to 374. The argument, therefore, that the present decree tends to defeat equitable distribution, and take away equitable assets, remains
p. 64totally unanswered. Chancery requires a judgment creditor to sue out execution, before it will allow him to redeem a mortgaged term, only from the analogy which it constantly preserves to legal principles. Because at law, a chattel interest, like a term, is bound only from delivery of the writ. Shirley v. Watts, 2 Atk. 200. 1 Pow. on Mort. 349. But at law even this does not affect it. Burden v. Kennedy, 3 Atk. 739. In Plunket v. Pierson, 2 Atk. 292, the lord chancellor asked the bar whether an equity of redemption had ever been held liable to an execution by a bond creditor, and the unanimous answer was in the negative. In case of a mortgage in fee, the judgment creditors must give notice to the mortgagee, and request him to receive his money. If he receive it, the mortgage being removed, execution may issue ; if he refuse, the creditors acquire a lien on the premises, not by virtue of their judgment, but of the notice. 1 Pow. on Mort. 359, 360. Greswold v. Marsham, 2 Ch. Ca. 170. The words of the statute do not say equitable interests; and this is the express ground of the decision in Lyster v. Dolland, because acts of parliament, and acts of our legislature, apply only to matters of law, unless their extent be declared. Even the statutes of Bankrupts do not affect an equity of redemption[49] ; for, after the conveyance of the bankrupt’s estate by the commissioners to his assignees, he still may redeem. If an execution will attach on it, whether the mortgagor be in possession or out of possession, is immaterial; and yet it is conceded if the latter be the case, it cannot be touched. But allowing him in possession, a sale by the sheriff could convey no title to be enforced at law ; for in an ejectment against the mortgagor, as he would be no party to the deed under which the plaintiff would claim, he could not be estopped from showing a paramount title in the mortgagee ; and in ejectment you must recover by the strength of your own, not the weakness of your adversary’s title. A sale by the mortgagor of his interest in the redemption, for it is not an estate, is merely in the nature of a contract to be perfected in equity. We therefore contend the sale was void in itself, for so completely is the legal estate in the mortgagee, that he has a right to dis-train for rent arrear, Moss v. Gallimore, Doug. 279, and this even if due on a lease made prior to the mortgage. In this very case too the interest of the mortgagor is in a legal sense, reduced even below that of a tenant at will.
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
p. 66
purposes-, 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»
p. 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
p. 68
perceive 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
p. 69
v 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
p. 70
at 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
p. 71
any 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
p. 72
discern, 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
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equitable 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.