Majority
Headnote
It seems, that an appeal from a final decree brings up an interlocutory order suppressing certain depositions, which may bear upon the final decree.The amount of it is, then, that both decrees were made January 20th, but the order of suppression was, by mistake, not entered.
Van Burén, said the order of suppression was first made, but, by mistake, not entered. It was, after the final decree, entered as of the same date with the latter. But the two decrees are distinct. He read from the petition of appeal which was from the final decree only.
fronTfinaiPdeí cree brings up an interlocutory order suppressing depositions, which may bear upon the final decree"
Does not the appeal from the final decree involve every interlocutory decree bearing upon it ?
Bleecker. over again. It has been so decided by this Court over and
I think the question as .to Haight’s competency may be considered one on which the final decree turned. The order suppressing his evidence, is, in this point of view, brought up with the final decree.[54]
Bleecker. The parties have a right to the evidence of aSents) from the necessity of the case.[55] Peake, in his Treatise on Evidence, shows the extent of the privilege claimed by the respondents. He says,[56] that, “ In like manner as the law respects the peace of men, it considers the confidential communications made for the purpose of defence in-a court of justice. By permitting a man to entrust his cause in the hands of a third person* it establishes a confidence and trust between the client and the person so employed. A counsel, solicitor, or attorney cannot conduct the cause of his client, if he is not fully instructed in the circumstances attending it: but the client could not give the instructions with safety, if the facts confided to his advocate were to be disclosed. Barristers and attorneys, therefore,
If there was an abandonment, it was waived by the subsequent attempt to foreclose. But,
4. The foreclosure and sale was a mere formality, and utterly void, and without effect. Faulkner had no authority to insert the power of sale in the mortgage. A letter of attorney, to make a mortgage, does not imply an authority to insert a power of sale ; for a mortgage is complete without this. This power of sale and summary foreclosure was unknown to the common law, and is, to this day, without a precedent in England.[57] The Chancellor seems to rely on the practice at the Pultney land office,[58] but surely it requires no argument to show that this is not to form the law of the case. The question is the same as if it was the first mortgage ever taken in this form
The general principle is, that an authority should be strictly pursued. This rule is laid down and illustrated by the cases cited in Com. Digest.[59] The power of sale does not pertain to the nature of a mortgage, and when first introduced with us, this power was contained in a distinct instrument. Reliance is placed by the Chancellor on the
5. But if the power was operative, the validity of the sale depended upon this, as well as tire power under which the mortgage was made, being recorded before the conveyance was executed. The latter it expressly required by the statute.[44] The authority to foreclose is a special statute power, and must be strictly pursued.[45] The subsequent act of recording will not make the execution of the power good by relation.[46]
6. The nature of the mortgagee’s interest, as connected with the power, is well defined, and has been very fully considered by this Court. The power is not a mere naked one, but coupled with an interest ;[47] and when Troup conveyed, the power was extinguished. If a mortgagee could convey the land, and yet reserve the power, he might defeat his own grant. The nature of an authority to convey real estate, is considered at large in Hargr. & Butl. note 298 to Co. Litt. 342 b. It is there said, that “ those powers which are given to mere strangers, that is, to persons who were not owners of the land, at the execution of the instrument creating the power, and who do not take under it, either a present or future estate or interest in the land, are said to be collateral to the land:—Those which are reserved to the owner of the land, or to a person deriving under the instrument creating the power, either a present or future estate or interest in the land, are said to be relating to the land.” The power in question was derived under the same instrument, is annexed to the estate, and, therefore, comes within the latter division of a power Relating to the land. It is said in Powell on Powers, 26, that “ An assignment of totum statum suum, or a total alteration of the estate for life, to which a power is append-ant, destroys the power.[48] So the conveyance by Troup passed his whole estate, in those parts of the mortgaged premises conveyed.[49] There can be no doubt that Troup had the whole legal estate, which passed by his conveyance.[50]
Van Buren. We shall not dispute that the legal estate passed.
It may be said that the power passed to the grantees. If this be admitted, the condition of the respondents is not bettered by the concession. Their power has not been exerted. They have taken no part in the- sale, either directly dr indirectly.
7. The sale was not in good faith. It was not for the purpose of raising the money due upon the mortgage, but to protect the subsequent purchasers. Take the case mentioned by Kent, J.[55] of a devise of land to executors, to be sold for payment of debts. Suppose them to sell under a title entirely distinct from their power, would they be at liberty to sell again, merely in order to protect the title of the purchaser ? and not with intent to pay the debts, as required by their authority ? The two cases are analogous; and the distinction is fully supported by the statute[56] giving the mortgagee a right to purchase, which declares that such purchase, shall not be defeated for that "reason, “ provided that it was, in every other respect regular, fair, and with good faith.” Was this sale within that proviso? Was it for a purpose contemplated by the act ? Was it “ fair ?” The interest of the mortgagee was to sell at as small a price as possible; whereas the power was conferred for the reason that the mortgagee is interested to bid up to the full amount cf the mortgage. It is for this reason alone that his case is made an exception to that of ordinary trustees. It was said by the Chancellor, that we had not made the point relating to the fraud. We answer that this was not necessary. We
Again: the mortgage was extinguished by the sales. Troup should have given us credit for the sums which he had received of the purchasers. Yet he sells'for the whole sum secured.
It was said by the Chancellor, that our ground of objection is too broad—that it goes to deny the right of foreclosure even in equity. «True. In answer to a bill, we might have shown the departure of interest, and it would have been equally available both in equity and at law. The mortgagee could not have taken a decree of sale for the whole upon a true bill, even if it had been taken pro cor/fesso ; for you cannot take a decree differing from the statement in the bill. If there was a right of foreclosure in equity, it should have been pursued there; and should not weigh against our objection to the statute foreclosure, any more than if there had been no power of sale, or the mortgagor had been under 25 years of age. A Chancery foreclosure would have been much more advantageous to the mortgagor. It would have given him more time to answer and make his defence, and raise the money upon a decree against him. The precise land would have been sold which is properly the subject of the sale. The tenants would have been brought in, and there would have been a fair sale upon a safe title, at the full value. Here Troup still retains a very considerable balance on the bond, which he may enforce by an action.
It is settled, that if there be any unfair conduct in the mortgagee, the Court will open the foreclosure.[57] This will be favored. Powell after stating a variety of cases, in which foreclosures have been opened, says,[58] “Except in the instance already mentioned, I do not find that any rules have been, nor do I apprehend that any can be laid down by the Courts of Equity, as to the exercise of their jurisdic
M. Van Buren, for the respondents.
This suit is a serious attack on the interests of a great number of men, upon merely technical grounds. They have purchased in perfect good faith, and the claim of the appellants is not entitled to the favor of any Court, especially a Court of Equity. Before the possessors are disturbed, the legal right should be most clear against them. I did not suppose it in the wit of man, to cast a shade of doubt upon their title.
How were the mortgagor’s rights affected 1. He might have tendered the mortgage money to Col. Troup, notwithstanding the sales.
Bleecker. True. But he might also have refused to receive it, and put the mortgagor to his hill to redeem against this multitude of purchasers, or any greater number. The mortgagor ought not thus to be embarrassed and delayed in his remedy.
The appellants are first met by the statute foreclosure. This they assailed before the Chancellor, upon the ground that it wanted form and regularity. These being amply proved, and that the mortgage was for no more than the fair consideration money, they now attack us, first, because
There is no doubt that a power must be construed according to the intent of the party, to be deduced from the subject matter, which was a mortgage. What did the parties mean when they used the term ? As early as 1788, these powers of sale had multiplied to a great extent, and many titles depended upon sales made under them. An act[33] was accordingly passed in that year, giving effect to those sales, which has been in force ever since. The act had existed for 12 years, and the practice of inserting the power of sale in use for a much longer time, when this authority was given to Faulkner, who was to do the buisness with a land
(1) (1) Act of Feb. 26, 1788, s. 7. 2 Jones & Varick, 268. This section is as follows: “ And whereas many real estates are held under sales made by mortgagees, who were authorized by the mortgagor or mortgagors to make conveyance of the same in fee, for the payment of the debt or demand secured by such mortgage, and to return the surplus of the purchase moneyto the mortgagor or mortgagors ; and as many inconveniences may arise, vexatious •suits be promoted, and bona fide purchasers ruined, if such estates should be redeemable in equity; therefore, be it further enacted by the authority aforesaid, that no good and bona fide sale of messuages, lands, tenements, or hereditaments, made or to be made by mortgagees or others authorized thereunto, by special power for that purpose, in due form of law, from him or them, who had the equity of redemption, shall be defeated to the prejudice of the bona fide purchasers thereof, in favor, or for the advantage of any person or persons claiming a right of redemption in equity; provided always, that nothing in this act contained, shall be construed to prejudice any other mortgagee .of the same messuages, lands, tenements, hereditaments, or any part thereof, whose title accrued prior to such bona fide sale, or any creditor to whom the mortgaged premises, or any part thereof, was before bound by any judgment at law or decree in equity.”
Again; he was todo “all things necessary and lawful to secure the consideration money.” It was necessary to give the power of sale, and Williamson had a right to require it. This was according to the custom of the office.
But is Wilson to be tolerated in saying that the power of sale is void, after having, by his attorney, received a deed as a consideration for that very mortgage which contains the power, and now; in the same breath, claiming to enforce it ? He was certainly bound to give back the deed, before he corrld be heard to object against this power. By receiving the deed, he ratifies the power. He claims under a transaction, which he wishes to be holden void, for his purpose, on one
Being then a valid power of sale, it is objected, that the foreclosure was not regular ; but every objection is abandoned, except that which relates to the non-registry of the original power and the power of sale. It was not necessary that the former should be recorded. No statute or principle of policy requires it, as to the mortgagor. As to the latter, the recording was necessary only for the protection of the purchaser. Kent, J. says, in Bergen v. Bennet,[41] (and this Court concurred with him,) that “ the only use in recording the power of sale, is for the benefit of the pur chaser ; and it does not lie with the mortgagor to object to the validity of the sale by reason of that omission. He can have no concern or interest to be affected whether it be recorded or not.”
(p) (p) Holbrook v. Finney, 4 Mass. Rep. 596 . Stow v. Tifft, 15 John. Rep. 463 , and vid, 13 Mass. Rep. 55 .
(q) (q) Adams’ Rep. 75.
(r) (r) 2 Sch. & Lef. 267. Ld. Redesdale, citing Ld. Roslyn, M. S.
(s) (s) Bac Ab. Leases, &c. (B)
(t) (t) Whistler v. Webster, 2 Ves. Jun. 367.
(u) (u) 1 Caines’ Cas. Err. 17, 18.
(v) (v) 1 John. Cas. 81.
(w) (w) Dougl. 292.
This is not a case in which the sale of the estate destroys the power. Though in legal privity with the estate, it is not so appendant as to be destroyed. It is a power in gross.[44] The English cases do not exactly govern, because this power is not known there. Here are two distinct interests. The mortgagee is the owner, as against the mortgagor. He may bring ejectment, recover possession, or sue for the rents. So may his heir. Another interest is in the power of sale, as a security for the debt, which he may or may not exercise at his election. This is a personal chattel, which goes to the executor.- To either right he may resort. They are distinct and separate, and the transfer of one does not affect the other. It does not follow, because they are in privity, that the power is appendant and destroyed by a transfer of the legal estate. If so, a mere entry would destroy it, which cannot, I think, be pretended. But, at any rate, no case has been or can be shown, in which the transfer of a portion of the estate only, destroys the power. The language of the books and the cases cited, is totum statum suum. All the cases are of total alienations. A forfeiture, is insisted upon—a thing odious in the eye of a Court of Equity—and the appellants must bring themselves strictly within the rule under which they claim.
(x) (x) Vid. Sug. on Powers, 1 Am. from 3d Lond. ed. 46.
It is said that the foreclosure was not with a view to collect the money. Is the objection on this ground serious ? Are all the purchases which have been made, to confirm titles, thus to he overturned ? A purchase may be made for any legal object.
R. Sedgwick, in reply. Some positions advanced on the other side, require, on the part of the appellants, a brief recurrence to first principles. Our ancestors have sought to strengthen, in every possible way, their right to the soil, and the rules relative to real property, growing out of this propensity, have descended upon us. A man has the fee: how is he to be divested of it ? Certainly in no other way than by a conveyance or adverse possession; for, in this country there is no corruption of blood by attainder. The estate of a mortgagor is not an exception. How, then, is our land to be taken away ? It is said, on two grounds. 1. Abandonment. 2. A statutory foreclosure. If we sweep away these, there is an end of all declamation about the rights of these purchasers. Hard cases make most injurious precedents. The respondents, who purchased of the Pultney estate, acted with open eyes. Our title was upon record. If they chose to act upon fancy or idle humor, that
I am sure the ground of abandonment cannot be seriously contended by the respondents.
Sedgwick. Perhaps not. But it has been sought to give it some importance, when taken m connection with the sales which it is said the foreclosure was designed to protect. Hence we thought it our duty to reply.
I am convinced there is nothing in this ground of abandonment.
It appears to me the great question is, whether the equity of redemption has been regularly and legally foreclosed.
Sedgioick. In reference to the question of Haight’s competency, I shall barely refer to two cases, to show that he was not acting professionally, within the rule relied on to exc^u<^e him. One is that of Wilson v. Rastall,[45] where Buller, J. says, “ though it was said the defendant consulted him, (the attorney,) in his profession, as a confidential person, the meaning of that was, that as he was more conversant with business of this kind, than those who were not of his profession,, the-defendant consulted him but did not employ him as an- attorney.” Jackson v. Dominick,[46] shows that a statutory sale or foreclosure is not a judical, or any thing of the nature of a judical proceeding.
Faulkner had no authority to insert the power of sale, unless this was essential to the nature of a mortgage. It was clearly not so at common law, nor is it considered so by the statute. The late revisáis do not contain the recital of the act giving effect to a sale under a power. This may, however be found in 2 Greenleaf's ed. of the laws, 101, s. vii.[47] This does not contemplate the power as a part of the mort§a§e’ ** maY he separate. It is called there a “ special power,” As to the general clause in Faulkner’s power,
(y) (y) 4 T. Rep. 753.
(z) (z) 14 John. 443 .
(a) (a) It is there as in Jones & Varick cited ante, 216, (z).
The covenant there created a liability beyond the ordinary effect of a conveyance.
Sedgwick. This power of sale is equivalent to an additional liability. When one buys land, he certainly means to get a title. If he gets none, the purchase money should be paid back. This case is much stronger than the one cited. A summary power of foreclosure is given. Faulkner might as well have inserted a covenant not to redeem at all. The custom of the Pultney land office is nothing. The law of the state is not to be manufactured there. Nor does the statute sanction such a power as seems to have been supposed by the Chancellor. It merely regulates, and declares the effect of a sale under it, when the party thinks proper to give it. I will only say, as to the cases cited by the Chan•ccllor to this point, that the acts performed were within the terms of the power, and his reasoning is precisely the contrary of what it should be from his premises. The case cited by him from 6 Vesey,[49] gives the true result of the cases, : , . 1 which go upon the maxim, omne majus in se continet minus. A power to convey a fee gives power to convey a less estate. The Chancellor supposes that, because there is nothing in Faulkner’s authority expressly excluding the power of sale, it is therefore included: The reverse is correct. The authorities[50] all show the rule, that a special authority should be construed strictly, to be one of the greatest rigor. In Doe v. Peach, the appointment was required to be signed and sealed, <fcc., and because the signing was omitted, it was holden void. The attorney cannot transgress his power one hair’s breadth, and will not be allowed to do so even by ' v a Court of Equity. The case cited[51] of a power construed by custom, was where the words received their meaning
(b) (b) 5 John 58
(c) (c) Ante 201
(d) (d) Co. Litt. 113 a. Fenn v. Harrison, 3 T. R. 757. Gibson v. Colt, 7 John. 390 . Hawkins et al. v. Kemp, 3 East, 410. Wright v. Wakeford, 4 Taunt. 213. Doe v. Peach, 2 M. & S. 576.
(e) (e) From Sugden on Powers, l Am. from 3d Lond. ed 526, 7.
The execution of a power may be good in part and void in part. “ Where there is a complete execution and something ex abundanti added, which is improper, there the execution shall be good, and only the excess void.”[52]
The acknowledgment of the power of sale in Pennsylvania was void.[53] This is not denied, but the authority of Bergen v. Bennet,[54] is relied upon, where Kent J. thought n0 recor(l necessary as to the mortgagor. This was not the question in that case: It was, whether the place of recording was proper, and held that it was. All that Kent, J. says as to the necessity of recording the power at all, was, therefore, obiter. The party purchases at his peril, and n™st look to the regularity of the proceedings.[55]
The power was gone by the conveyances from Troup to the other respondents.
Do you mean that the power itself was gone, so that no sale could be made under it by any one.]
Sedgwick. This is what we contend.
What sort of estate passed by the conveyances from Troup ?]
Sedgwick. That I am going to consider. It is said, that this is a power in gross. It is not very material, whether it be so or not. It is enough that it is a power coupled with an interest, an done relating to the land within the note 298 to Co. Litt. 342 b. If the donee convey totum, statum suum, as he has done in this case, the power is gone ; and Troup had no power to sell a second time. In Ren v. Bulkeley,[56] cited against us, Lord Mansfield says, “It is contended that, by granting away his life estate, he extinguished the power. Certainly where the whole life éstate is conveyed away by the intention of the parties, the power must be at an end; and cannot be afterwards exercised to the prejudice of the grantee.” Grant me that Troup could not sell as against the grantees, and it overturns the whole doctrine of the oth
(f) (f) Id. 549.
(g) (g) Jackson v. Wickoff, 1 John. Rep. 498 .
(h) (h) 1 Caines’ Cas. in Err. 17
(i) (i) Jackson v. Clark, 7 John. 217
(j) (j) Dougl. 292
Might they not have joined him in the sale ?]
Sedgwick. It is enough that they have not done so. Granting that they might have joined in a sale for their benefit afid that if he sold at all, it must have been for their benefit, they have never authorized him to do this. They entered, relying upon the good faith and resources of the Pultney estate.
But suppose the grantees had given authority: what kind of sale is to divest our estate 1 The statute contemplates a fair sale on six month’s notice,[57] at which all the world may bid. What kind of sale is that at which the mortgagee, or these individuals alone, are to bid for the private purposes of the latter ? They never would authorize him to sell their rights to a stranger. The authority must have been for their benefit, not to sanction a sale in fair market. This is said to be for a very equitable purpose; and it is conceded that, in ordinary cases, one cannot sell after he has departed with his power, but an exception is alleged in favor of a sale to protect grantees. Are there no other rights in this case ?• Has the mortgagor none ? May he not contend for a strict statute sale ?
The proceeding to foreclose, by a general advertisement, conceded that the previous conveyances were nothing. The argument for the respondent concedes the same, and that the bidding was open to all the world.]
Sedgwick. We do not join in that concession. If the jale may be made in protection of the grantees, it is step- . ' ping beyond the statute. Troup having extinguished the power to sell in payment of the debt, he cm no longer execute the statute.
Were not the purchasers from Troup assignees 0f the mortgage pro tanto ?]
Sedgwick. If so, they are assignees still; for they have never joined in the foreclosure. They are strangers to the proceeding. But if they had joine'd, it should have been in a general sale, for the purpose of discharging the mortgage ; not merely to benefit themselves.
What right have you to ask for whose benefit, the sale was made ? You had a right to redeem be fore the sale. The biddings were open upon á general ad vertisement. If the conveyances by Troup operated as a technical extinguishment, that is one thing; but if other wise, I do not see the force of the inquiry, for whose benefit the sale may have been made, or to whose use it,may en- ' ure 1]
Sedgvnck. If the sale was not with intent to pay the bond, it was fraudulent and void. The statute contemplates a sale for no other purpose. The covenant is to pay the money, or that the mortgagee may sell according to law, rendering an account of the overplus moneys. The whole covenant and power is violated, if the sale be for any other purpose.
Again: Under a purpose of this kind, clogged and embarrassed as the right was by the previous partial transfers, there was no fair chance. The trust was to sell, giving every fair opportunity to purchasers, in order that the estate might fetch its full value.[58] Every thing calculated to prevent competition renders the sale void.[59] Suppose Troup r .... , had published his purpose in the advertisement. This fiuesti°n brings it to the test. Appearances and formality are vain, unless the purchase be bona fide.[60]
It is said that the objection grounded on the destruction of the power can, at most, reach only a part of the premises, because it cannot be affirmed of Troup, that he has sold tótum statum s mm. But this, phrase, as used in the cases, applies to the interest, not the land. The whole of his estate is, in this case, gone in part of the land.
The appellants filed their bill in the Court of Chancery, to redeem certain lands which William Wilson, by his attorney, Daniel Faulkner, mortgaged to Charles Williamson, on the 21st October, 1798. Several questions are raised as to the right to redeem. It is insisted by the respondents, that there was an abandonment by Wilson. In looking into the case I have not discovered any facts that warrant this conclusion. Dugald Cameron testifies. that the lands having been abandoned, Williamson took possession in 1800, treated the property as his own, caused a re-survey to be made, and sold parts to various persons. Wilson informed him he was very much embarrassed in his circumstances. It was the understanding at the land offices, that the mortgage was not to be collected, but the estate was to take back the land—that it had been so considered after Troup, succeeded to the agency. This proof is altogether equivocal and unsatisfactory. The subsequent transactions clearly evince, that Wilson did not consider his right abandoned, nor did the respondents deem it safe to rest on that ground. The letter of James Reese, dated August 10th, 1802, called on Wilson to make payment of the land ; or that decisive measures would be taken. The respondent, Troup admits, that in 1807 he applied to him for a release of the equity of redemption, which he declined unless he received compensation. In 1812, a tender of the money due was made and refused. I lay no stress on the circumstance that the original deed was found in the office of the respondents. I presume it had lain there from the time it was executed. There is no proof that it was ever actually received by Wilson. It is not necessary to dwell on this part of the case. There is no foundation for insisting on the ex-tinguishment of the right to redeem.
It is contended by the appellants, that Faulkner, who executed the mortgage, as Wilson’s attorney, had no authori- ’ , , ty to insert a power of sale. The power was general, to seal, deliver and acknowledge a mortgage to Williamson, thereby ratifying all that his attorney should lawfully do in the premises. Wilson resided in the state of Pennsylvania, and probably may not have been acquainted with the sta
(k) (k) 1 K. & R. 482. s. 6.
(l) (l) Denning v. Smith, 3 John. Ch. Rep. 344.
(m) (m) Jackson v. Crafts, 18 John. 110 .
(n) (n) 14 John. 443 .
cute'mortgage will not authorize execution of instrument fect^616111 ef"
Clause of sale.
bífom'drcumstances.
It will be remembered, that by the covenant of Williamson. in 1795, a good and sufficient bond and mortgage were to be given on receiving a conveyance. Cameron says, that two land offices were established: one at Bath—another at Geneva: That the existence of the offices was well known in Pennsylvania, from rvhence the first settlers came : That it was the invariable practice to take mortgages with the clause authorizing a sale pursuant to the statute. When Williamson speaks of a mortgage, it must be intended he meant a mortgage in the form used at his offices. This cannot be doubted.
Faulkner must have understood the contract, as requiring a mortgage in the usual form. It would be a violation of the presumed intent of the parties, to construe it otherwise. When Wilson executed the power to Faulkner, the year after, to carry this covenant into effect, what was intended ? A security corresponding with the forms then used and approved. Williamson, under the covenant, had a right to say, the mortgage shall contain this clause. Such was the understanding between him, Faulkner, Hall and Freeland.
In construetion of contracts, eituation. of parties and subject considered. be
It is well settled, that m the construction oí all contracts, the situation‘of the parties, and the subject matter of their trans. r 7 J actions may be taken into consideration, in determining the meaning of any particular sentence or provision. Extrañe
It is further objected, that the power of attorney was not legally recorded, before the conveyance for the sale was executed. The power was first proved before Waterhouse, a Master in Chancery, in 1809. He was employed to go to Pennsylvania to take the acknowledgment. This is, I think, prima facie, evidence that it was taken without this state. But it was afterwards proved and recorded, in 1812, subsequent to the deed of conveyance given on the sale, and the question is, whether it lies with the mortgagor to raise the objection. The sale is not affected, although the power has not been recorded. This provision is manifestly for the protection of the purchaser. It must be indifferent to the mortgagor. He has no interest to be affected by it, and cannot object. In the case of Bergen and others v. Bennet, (1 Caines’ Cas. in Err. 17,) Kent, Justice, in delivering the opinion of the Court, says, “ the omission to record the power will not affect the sale—that it does not lie with the mortgagor to object to the validity of the sale, by reason of that omission.” This, however, was not the point then before the Court. The question was, in that case, whether recording the power in the book of mortgages, would satisfy the words of the act, which requires it to be recorded as deeds and conveyances usually are. Although the authority cited may be regarded as an obiter dictum, I am inclined to think it a correct exposition of the statute.
^he*roperiy recorded,
powef’not^e. cordedi
Whether foreclose in Ws name only.
Statute fore-lent6 to** one in equity.
All parties mterested,
Mortgagee convevs; grantee is not needn<not ^e party.
Mortgagee purchases upon foreclosure, protectec¡an*by estoppel. ..
Mortgagor deemcd seis-
The next objection against the validity of sale is, that the mortgagee having conveyed parts of the mortgaged premises in fee simple with warranty, cannot proceed to sell under the power. If I rightly understand the force of this objection, it is, that the mortgagee, having released and convey6(j a part of the land, cannot solely, without noticim. 3 1 7 37 3 the rights of the persons to whom he has conveyed a part, foreclose the mortgage. To say that a mortgage could not be foreclosed, by making all parties in interest parties to the foreclosure, would be a proposition altogether untenable. I will therefore inquire whether it was not competent f°r Troup, as administrator, in his own name solely, to advertise and sell. The power authorizes the mortgagee, his heirs, executors, administrators and assignees, to sell the premises at public auction. A statute foreclosure is equiva^ent to a foreclosure and sale under a decree of a Court of Equity, and cannot be defeated to the prejudice of a bona fide purchaser, in favor of a person claiming redemption in equity. ( 10 John. 185 , Jackson v. Henry.) It is undoubtedly necessary that all parties in interest unite. (1 Brown’s Ch. 368. 2 Pow. on Mort. 285.) But it is an interest in the mortgage that is intended. If the mortgagee, under a . ° ° ' mistaken notion, that he is absolute owner, grants and eonve7s t^e lands mortgaged, in fee with warranty, the purchaser does not come in as assignee of the mortgage ; his purchase has no reference to it, and consequently he is not entitled to be made a party in a bill to foreclose. His title is taken subject to the mortgage, and liable to be.defeated, jf qie premises are redeemed. If the mortgagee is the pur 1 a a r chaser at the sale, then his previous grantee would be protecte(l on the ground of estoppel, as the mortgagee could not claim in opposition to his deed. ( 12 John. 201 . 13 John. 316 . 14 John. 193 . 1 John. Cas. 81.) In point of fact it never was intended that the grantees of Troup should take as assignees. The mortgage was entirely out of the question, in the view of the parties.. The mortgagor, notwithstanding the mortgage, is deemed seised, and is the legal owner of the land, as to all persons except the mortga.
In, Runyan v. Mersereau, ( 11 John. 534 ,) it was held, that at law and in equity, a mortgage is a mere security for money. The mortgagee has but a chattel interest, which will pass by delivery without writing. In Jackson v. Curtis, ( 19 John. 325 .) it was. held, that the mortgage is a mere incident to the bond, as personal security for the debt,'and that an assignment of the interest of the mortgagee in the ° , ° ° land, without an assignment of the debt, is considered in law as a nullity. This case fully proves, that conveying parts of the mortgaged premises can have no effect upon the mortgage, because had it been an assignment in form, nothing would pass ; for the debt due on the bond, to which the mortgage is incident, was left untouched.
m^e°rtgecurit ty; interest,0 ^nd ™,n Pass by delivery,
Is incident t0 ^¡¿nment of interest in ¿^t, aTullity!
From this examination, I am satisfied it is not' competent for the appellants to object, that a part of the land had been conveyed previous to the sale. If the grantees from Troup had acquired an interest in the mortgage, then, indeed, I apprehend the ohiection would have been well taken. It , , , , „ , . , . then would appear, that all the persons interested m the mortgage, had not joined in the notice of sale. The act contemplates, that the notice be given and the sale made by the mortgagee or others thereunto authorized. If the mortgagee has assigned all his interest, notice must be givi. • ° o,, i , n . en by the assignee. It a part ol the bond and mortgage is assigned, the mortgagee and such assignees are the proper parties. I think it follows, that if a mortgagee, solely, undertakes to give notice and sell, when other persons are interested as assignees, the regularity of such proceedings cannot be supported. The objection here falls to the ground; for Troup, as administrator, was exclusively the representative of the mortgagees, who alone held the interest in the security. I concur in the opinion of the Chan-cell or in saying, that the sales by the mortgagee could not, upon any reasonable principle, deprive him of the right of foreclosing the mortgage, nor could they prejudice the right ■ of the mortgagor to redeem. They created, of themselves, no obstacle to the right of redemption. If the
. A11 persons interested in mortgage of‘sa™
Assignee of ^uid mt give notice. Assignee of part should mort£a*
Partial sala dice^right^of mortgagor,
In the view I have taken, it becomes unnecessary to discuss the question, whether the disclosure by Haight ought to be considered confidential as between attorney and client.
Decree should be affirmed
My opinion is, that the decree of the Chancellor be affirmed.
The question.
The question presented by this case is, whether the equity of redemption of the mortgagor has been legally foreclosed. It is contended, on the part of the appellants, that the foreclosure is illegal, on the following grounds:
1. That Faulkner, who executed the mortgage as Wilson’s attorney, had no authority to insert a power of sale under the statute.
2. That Faulkner’s power of attorney was not legally recorded before the sale under the mortgage.
3. That the mortgagee, or his assignees, having sold and conveyed parts of the mortgaged premises, in fee simple with warranty, before the foreclosure, could not subsequently foreclose and sell under the power.
4. That the sale was not made for the purpose of collecting the money due on the bond, and was, therefore, void; and that the purchase was made by Troup as trustee, and not mortgagee. • I shall very briefly consider each of these objections in its order.
Whether power to ffiorizecT’ him to give a mortpower o7 sale! foreclosure1317
The power of attorney from Wilson to Faulkner, empowered him to receive a deed from Williamson, for the land purchased, and to sign, seal, deliver and acknowledge to the sa{¿ Williamson, a mortgage or mortgages of said land, together with a bond or bonds, for the consideration money; an^io ar>^ Perform things necessary and lawful to the obtaining a title to the said land, and securing the consideration money therefor, to the said Williamson.
Mortgage good without power of sale,
That a mortgage may be made, without containing a pow- ° ° . , , , . , . er to the mortgagee to sell in default of payment, there is .
But I apprehend such is not the rule of construction by which powers are tested. Sugden on Powers, 459, lays down the rule thus : “ In considering the extent of a power, ' A u / the intention of the parties must be the guide. Thus, on the one hand, a power limited in terms, has, in favor of the intention, beén deemed a general power, whilst on the other hand, a general power, in terms, has been cut down to a particular purpose.” And this position is fully supported by the authorities.
construction° as t0 powers in CTPT16PQÍ.
Thus, in Hinchinbroke v. Seymour, (1 Br. Ch. C. 395,) there was a power in a settlement to raise a portion for a younger child, at such time as the father should direct. He directed it to be raised when she was 14 years of age; and she dying, he files the bill for it as her administrator. The Lord Chancellor says, “ the meaning of a charge for children is, that it shall take place when it shall be wanted. It is contrary to the nature of such a charge, to have it raised before that time; and although the power is, in this case, to raise it when the parent shall think proper, yet that is only to enable him to raise it in his own life, if it should be necessary. It would have been very proper so to do, upon the daughter’s marriage, or for several other purposes ; but this is against the nature of the power.” In Tankerville v. Coke, (Mose. 146,) it was held that a power should be so construed as to effectuate the intention of the parties. There an act had been done which the terms of the power authorized; but which was evidently against the intention of the donor. In Morris v. Preston, (7 Ves. Jun. 547,) a provision, in case of the death of a trustee, for the substitution ef another, and a conveyance by the survivor, so that he
Cases,
(o) (o) Pow. on Mort. 13, 14 Croft v. Powell et al., Com. Rep. 603. 10 John. 196 , per Kent, Ch. J.
rio^merely™4’ letter, is to be regarded.
construing a power of attorney, therefore, in order to ascertain whether it has been well executed, the letter of the instrument is not to be exclusively regarded ; but the important inquiry is, have the intentions of the parties been carried into effect.
Now I cannot entertain a doubt from the circumstances of this case, that Wilson used the term “ mortgage,” in the power of attorney, in its popular and customary sense in this country; that is, as descriptive of an instrument containing not only a conditional conveyance of the land but also a power to sell in default of payment. There is nothing on the face of the instrument, evincing a contrary intention. There is no peculiar caution manifested on the part of Wilson, in the delegation of power to his attorney, from which it can be inferred that he intended the terms employed by him should receive the most rigid construction of which they were susceptible. On the contrary, the language used is general and comprehensive. He empowers him to give one or more mortgages, to do all things necessary and lawful to obtain a title to the land, and to secure the consideration money to Williamson.
I am, therefore, of opinion, upon the first point, that the attorney, Faulkner, had authority to insert m the mortgage a power of sale under the statute, and that the foreclosure is not to be impeached on that ground.
Faulkner had ^¿”nt p0W*° of sale,
2. I know of no necessity for recording the power of attorney at all, unless it be true, as a general proposition, that whenever the law requires an instrument to be registered or recorded, if that instrument is executed by attorney, the power of attorney must be recorded also, which was not contended for upon the argument, and I apprehend cannot be maintained.
jfot necessary to reeo^dpow- “ ° attorney‘
The power to the mortgagee to sell, contained in the mortgage, must be recorded, before the deed to the purcha- ° t i . . • n , /•. ser under the power be executed: but that is tor . the benent of the purchaser only, to perpetuate the evidence of the authority by which the sale was made; and the mortgagor can not impeach the sale, if the power is not recorded. (1 Caines’ Cas. in Err. 17, per Kent, J.)
Mortgagor cannot object that power of saIe is nof re. corded.
Admitting, therefore, that there was the same necessity
So of the power from Wileon-
The sale, therefore, is not to be impeached on this ground. But,
Whether, if conTCystSpSart of the mortgaged premises, it dipower1'™ foreclose for the W
3. It is contended that by the sales of portions of the mortgaged premises by Troup, before the foreclosure, the power to sell contained in the mortgage, was either extin- * 0 ° 1 guished, or passed to his grantees ; that the sale, therefore, un^er the mortgage, was without authority,
Nature of power of sale. It is coupled with interest; NoUngmss. Distinction,
The power of the mortgagee to sell the mortgaged premises> is undoubtedly a power coupled with an interest, (Bergen v. Bennett, 1 Caines’ Cas. in Err. 15, per Kent, J.) and 7 ’ r ' it may perhaps be conceded, that it is a power appendant or annexed to the estate, and not a power in gross. These powers are thus distinguished by Hargrave and Butler, in their notes to Coke upon Littleton, (note 298 to Co. Litt. 342 b.) The former, that is a power appendant, “ is where a person has an estate in the land, and the estate to be created by the power, is to (or may) take effect in possession, during the continuance of the estate to which the power is annexed, as a power to tenant for life in possession, to make leases. A power in gross is, where the person to whom it is given has an estate in the land, but the estate to be created under or by virtue of the power, is not to take effect till after the determination of the estate to which it relates.”
Now, the power of the mortgagee to sell, is a power to create or acquire to himself the equitable estate in the land, during the continuance of the legal estate conveyed to him by the mortgage. It seems, then, more properly to fall within the description of powers annexed to the estate, than any other, and the question is, as to the effect of a conveyance of a part of the estate to which the power is annexed, (before the power is executed,) upon the power itself,
whole y would pass, not ex-tingmsh power.
A conveyance by the mortgagee of his whole estate, would undoubtedly pass, and not extinguish the power. This is J r 7 ° r the common case of an assignment. The assignee takes not
The effect then of a conveyance of a part of the mortgaged premises by the mortgagee, I apprehend to be this : It produces a suspension of the exercise of the power as to the part conveyed, in hostility to the rights of the grantee; that is, the grantee shall not defeat his own grant. But the operation of a suspension of the power, whether it applies to the whole or a portion of the estate, is merely to postpone the vesting of the estate, or interest created by, or acquired under the power, in possession. It does not suspend or affect the right to execute the power, and perfect the title to the estate. But the possession of the estate, the right to which has been acquired by the execution of the power, shall be suspended or kept from the donee of this power, so far as his previous acts render it just and equitable that it should.
Grant of part cST“fdSpower «pon this porityWthe right conveyed,
Effect of sus_ pension,
This principle is clearly recognized by Sugden in his Treatise on Powers, 52, and supported by several cases, (Snape v. Turton, Cro. Car. 472. Goodright v. Cator, Doug. 447.)
The principle is familiarly this: A mortgagee in possession leases a portion of the mortgaged premises for a year. At the end of six months, he sells the whole of the premises under his power, and becomes himself the purchaser. The power is well executed, and vests the equity of redemption in 'the whole of the premises in the mortgagee, subject, however, to all the rights of his lessee. So far as the possession of the estate, or interest acquired unde.r the power, is inconsistent with his lease, it shall be suspended, but shall take effect as to the 'residue.
illustration.
The sale by Col. Troup, therefore, of portions of the mortgaged premises, neither extinguished nor suspended his right to foreclose the equity of redemption. Having become the purchaser under the power, his possession shall be suspended so far as it is inconsistent with his previous grant;
Troup’s ■ right extinguished partial sale,
His purchase, therefore, shall enure to the benefit of his grantees—“ For, if a man sell land which is not his, and afterwards purchase it, he shall be bound by his deed, and not be permitted to aver he had nothing.” (Per Kent, J. in Jackson v. Bull, 1 John. Cas. 90. Iseham v. Morrice, Cro. Car. 110. Ren v. Bulkeley, Doug. 291.)
_ , ured to benefit Of grantees.
Partial sales did not effect right of mortgagor.
The sales by the mortgagee, did not in the least affect the . , „ , , , rights ot the mortgagor. The mortgage was, at that time, valid and subsisting; the sales were subject to it, and the mortgagor, upon redeeming, could have turned the purchasers out of possession, as well as the mortgagee himself.
Foreclosure valid.
I am, therefore, of opinion on this point also, that the foreclosure is not to.be impeached.
Mortgagee unJe/'powcr0 though he has conveyed a
His grantees pll llanto, Trustee may purchase for benefit of his Trust No one but him can chase.00 ^
Nor is there any force in the objection, that the Pultney estate had no right to purchase at the mortgage sale, after having sold portions of the mortgaged premises. That they g(;-^ confinued to be mortgagees, necessarily results from what has already been said; but whether they were so or not, is perfectly immaterial. The 10th section of the act concerning mortgages (1 R. L. 375) provides, “ that no title to mortgaged premises, derived from any sale made in virtue of a special power, shall be questioned, impeached or defeated, either at law or in equity, by reason that the mortgaged premises were purchased in by the mortgagee, or his or her assignee (or assignees) or for his,her or their benefit or account.” I have already shown that the purchase by Co]. Troup, enured to the benefit of the grantees of the mortgagee, so far as it was hostile to those grants. So far as they had any interest in the mortgaged premises, they may be congjdered as assignees of the mortgagee, and the purchase by , , ... . him wasfor their benefit and account; and admitting he was trustee f°r them, a trustee has undoubtedly a right to purchase, (not for his own benefit,) but as the agent and for the benefit of the cestuy que trust. No one but the cestuy que trust has a right to call in question, or set aside a purchase made by the trustee, (Davoue v. Fanning, 2 John. Ch. Rep. 252.) The mortgagor cannot say that the mortgagee was
But the truth is, Troup was mortgagee, and the proceed"ings were properly conducted in his name, and could have been in the name of no other person. The mortgage never was assigned. If it had been, it might have been necessary for the assignees to have united in the proceeding under the statute. Though if this should be omitted, it might well be questioned, whether the mortgagor could be received to object. The power (in default of paying the money) authorizes the mortgagee, or his assignees, to sell or convey the premises : and it would seem in point of form, to be well executed by the mortgagee, whether he retained the interest of the mortgage or not. The right of the mortgagor could, in no manner, be varied or affected by it. The proceeding under the statute is not a suit to which a de- ,, , . . fence can be made. However, it is unnecessary to express any opinion upon this point, because there never was an assignment of the mortgage; and admitting that the assignee of a mortgage ought to be a party to the foreclosure, it can hardly be contended, that any person who may have an equitable interest under the mortgagee, must be made a party.
Whether fosforecióse under statute namefof mort sasee or his assigllees’ &Cl
S'6'"6- astatby the mortafter6’ eVhe had assigned, would be well in point of form-
I am of opinion, therefore, that the sale of the mortgaged premises is not to be impeached on any of the grounds tar L ■* ken by the appellant's counsel, and that the equity of redemption has been legally foreclosed.
Foreclosure not impeached on any ground,
The conclusion to which I have come upon this view of the case, renders it unnecessary for me to consider the question of abandonment.
Abandonment,
Upon the question of fraud, I shall content myself with saying, that the case affords no color for the imputation.
No ground u aUese fraud-
Decree should be affirmed.
I am accordingly of opinion, that the decree of his Honor, the Chancellor, should be affirmed.
Whether Faulkner was execute power of sale.
(After stating the facts.) The question first in order is, whether Faulkner was authorized to execute the mortgage? If not, there is an end of the controversy,
By the power of attorney, he was expressly “ to sign, seal, deliver and acknowledge a mortgage, &c., to the amount of the consideration money remaining due.” Now, the consideration money remaining due, was the whole sum
Mortgage as used in powturnen "S “hi use as a monpower -JLTtG be executed,
practice in this state was power°tf “sTle!
Faulkner, thcrefore> did power.
2. Although the presumption is strong, that the purchase was abandoned, before the year 1800, and the agents of the estate proceeded upon that ground in selling parcels of the premises, yet there is no evidence of such abandonment, but what is deducible from the acts of the agents, and the acquiescence of Wilson; but as notice of those acts is not brought home to him, he ought not to be prejudiced by them. Besides, if there was an abandonment, it appears to have been waived by the subsequent application made by Troup to Wilson, for a release of the equity of redemption.
3. In my judgment, therefore, the rights of the parties must rest on the regularity of the foreclosure. To this it is objected, that the power of attorney from Wilson to Faulkner was not recorded according to the provisions of the act concerning mortgages. (1 R. L. 372.) The answer given to this objection is, that the power was actually recorded, before the sale—that this being considered irregular, as the
Rights of par-regularity1 * ol foreclosure,
_ , Recordmg powers after noughts a" gainst mortgagor’
Who has no tbough noirecorded.
I concur in the result of the opinions delivered, that the circumstance of Troup’s having conveyed a portion of the mortgaged premises did not divest him of the power to foreclose, as the administrator of Sir William Pultney.
Testimony of rightly sup! pressed by
In the view which I have taken of this controversy, it does not become important to express an opinion as to the competency of S. S. Haight’s testimony. I have, however, no doubt that the communications made to him by Troup, in relation to the foreclosure, are to be regarded as confidential communications between attorney and client; and that the Chancellor was correct in suppressing them.
On the whole case, therefore, I am of opinion that the decree of his honor the Chancellor be affirmed.
Decree manímously affirm-
The Court being unanimously of this opinion, it was, thereupon, ordered, adjudged and decreed, that the decree of the Court of Chancery be affirmed, with costs to be . taxed; and that the record, &c.
Footnotes
- (h) (h) Vid. Atkinson v. Manks, 1 Cowen's Rep 702, and the cases there cited. S. P.
- (i) (i) Peak. Ev.117, n. (B.) ed. 1804
- (j) (j) 1 id. 129.
- (k) (k) 2 Pow. on Mort. 1093. 1 id. 14 to 20. Croft v. Pow ell et al., Com. Rep. 603. 10 John. 196 , per Kent, Ch. J. But see the late case of Clay et al. v. Willis, 1 Barn. & Cress. 364.
- (l) (l) Ante, 200.
- (m) (m) Attorney, (C.) 10, 11.
- (n) (n) Ante, 199.
- (o) (o) Martini v. Coles et al., 1 M. & S. 140.
- (p) (p) Nixon v. Hyserott, 5 John. Rep. 58 . Gibson v. Colt et al., 7 id. 390.
- (q) (q) 5 John. 59
- (r) (r) Ante, 201.
- (s) (s) Ante, id.
- (t) (t) Ante, id.
- (u) (u) Ante, id. from 6 Ves. 797.
- (v) (v) Ante, 201, 2.
- (w) (w) Sug. on Pow. 2 ed. 446, 449.
- (x) (x) 1 R. L. 374.
- (y) (y) Denning v. Smith, 3 John. Ch. Cas 344, 5.
- (z) (z) Hawkins et al. v. Kemp, 3 East, 410. Wright et al. v. Wakeford, 4 Taunt. 213. Doe v. Peach, 2 M. & S. 576. Doe v. Pierce, 6 Taunt. 402.
- (a) (a) Bergen v. Bennet, 1 Caines’ Cas. Err. 15.
- (b) (b) Hard. 416. 1 Ventr. 226. Sand. on Uses, 226.
- (c) (c) Harg. & Butl. note 298 to Co. Litt. 342 b.
- (d) (d) Jackson v. Chase, 2 John. Rep. 84 . Sanders’ note, (1) to 1 Atk. 605. Jackson v. Delancy, 13 John. 539 . Butler’s note 96 to Co. Litt. 205 a. Sir Thomas Littleton’s case, 2 Ventr. 351.
- (e) (e) Vid. 2 Bl. Com. 274.
- (f) (f) 2 John. Ch. Rep. 252.
- (g) (g) Vid. 1 Caines’ Cas. Err. 13.
- (h) (h) 1 Caines Cas. Err.18, per Kent, J.
- (i) (i) 1 Caines Cas. in Err 16
- (j) (j) 1 R. L. 375, s. 10.
- (k) (k) 2 Pow. on Mort. 1066, 7, 8.
- (l) (l) Id. 1079.
- (m) (m) Id. 1080, and the case there cited.
- (n) (n) Sugden on Powers, 459, 1 Am. from 3d Lond. ed.
- (o) (o) id. 310, 311, 321, and the authorities there cited.