Fox v. Wharton

The first proposition — namely, that, the court of chancery in this State has no j urisdiction whatever of the subject of mortgages — may seem startling to-some of the older members of the profession, the generally received opinion being, as I had supposed, that such jurisdiction exists. It is not the dictate, however, of sound reasoning; to reject a proposition as untrue upon its first announcement,, and for the reason, solely, that it has never been heard of before. Such a determination would necessarily lead to the rejection of all propositions, however correct and demonstrable; for all propositions have had a 'first announcement. The position taken by the solicitors of the defendants was supported by an earnestness and ingenuity, and an extent of research into the constitutional and legislative history of the State, that are not only commendable, but which entitle their arguments to careful consideration and to a deliberate judgment by this tribunal.

From the time that Delaware became an English colony, its inhabitants became subject to law, and were entitled to the rights, benefits, and privileges of law. Even before statutory law was enacted, law ruled among them, determined their rights, their obligations, and secured to them the vindication of those rights and enforcement of those obligations, either presently or in the future. What was this law which,, in the absence of any legislation by themselves, was to them a protecting shield and an avenging sword ? What was this, that measured their rights, prescribed their duties, and which protected and enforced those rights and duties ? It was the common law of England, which belonged of common right to every subject of the English government. Chancellor Kent has well remarked that this common law has been assumed by the courts of justice, and declared by statutes, so far as is applicable to their situation and government, as the . law of the land in every State of the Union. It was imported

An examination of the legislation of this State confirms the views here presented. Our published laws date from the year 1700. They assume the existence of the common law as I have defined it, and provide for its enforcement with such additional legislation, supplementary thereto, as the supposed necessities of society required. It was held, however, at an early day, that English statutes in respect to crimes did not extend to these “ plantations,” except where they were particularly named in the body of such Acts; and therefore in 1719, “ An Act for the Advancement of Justice, and more Certain Administration thereof ” was passed, prescribing the punishment for certain crimes therein enumerated. This was the first general Act in relation to crimes, in the legislation of Delaware, of which I have any knowledge. It did not pretend to define the several crimes mentioned in it, but simply prescribed a punishment for their commission. These crimes were treated in the Act as common-law offenses. The preamble to the Act, however, as well as the omission to define the crimes mentioned in it, show that the legislators of that early day regarded the English common law as the law of the Colony. The beginning of that preamble, among other things, recites “ that, whereas the common law is justly esteemed to be the birthright of English subjects, and ought to be regarded in this government as the safest rule of our conduct,” etc.

It will be observed that there is no attempt in this Act to define what are “ causes of equity.” What those causes were, was to be determined by the justices holding the said court of equity. How were they to determine this matter ? Unquestionably by the principles, rules, and practice of the High Court of Chancery in Great Britain. They were not supposed to be familiar with the jurisdiction and practice of any other court of equity; but, being British subjects, they were supposed to be familiar with the jurisdiction and practice of the High Court of Chancery of the government under which they lived, and to which special reference was made in the Act. The powers of the court of equity thus created Were in no

The solicitors for the defendants seem to think that the powers of this court were greatly limited by § 25 of this Act. That section is as follows: “ Provided, also, that nothing herein contained shall give the said justices any power or authority to hear, decree, or determine in any matter, cause, or thing, wherein sufficient remedy may be had in any other court, or before any other magistrate or judicature in this government, either by the rules of the common law, or according to the tenor and directions of the.laws of this government; but thatwhen matters determinable at common law shall be brought before them in equity, they shall refer or remit the parties to the common law ; and when matters of fact shall happen to ai’ise upon their examination or hearing of the matters and causes to be heard and determined in the said court, then, and in every such cause, they shall order the matter of fact to issue and trial at the court of common jaleas for the proper county where the fact arisefch, before they jaroceed to sentence or decree in the said court of equity.” How this supposed limitation amounts substantially to no limitation at all, for the reason that, where there is a complete remedy at law, courts of equity do not assume to exercise jurisdiction. This is a fundamental princijfie of equity jurisjarudence, and it is this principle which is incorporated in § 25 of the Act for the Establishing Courts of Law and Equity within this Government. A cause in which there is a complete remedy at law is not a matter and cause of equity at all. The section cited, therefore, is nothing but a legislative declaration of what would have existed without it.

But it is argued that, inasmuch as one of the reasons assigned in the preamble to § 5 of the Act for giving the remedy by scwe facias to the mortgagee was “ the 'discouragement which the mortgagees met with, by reason of the equity of redemption remaining in the mortgagors,” therefore there is no power in the court of chancery in this State to foreclose the equity of redemption to which a mortgagor is. entitled. It appears by the section recited that conveyances-by mortgage, as a security for the payment of money, were recognized by the laws of the Colony. It also appears that, the existence of the right to the equity of redemption in the

It was said by the solicitors for the defendants, in their argument of this cause, that a statute providing for the sale •of mortgaged premises by execution on a judgment recovered in scire facias on a mortgage, very similar to our own, exists in the State of Pennsylvania, and that the only remedy or means to foreclose a mortgage in that State is by proceedings had under the statute; and that therefore, inasmuch as a remedy is given by the statute, no remedy exists by bill in equity ■or otherwise than under the statute for the foreclosure of a mortgage ; and they cite in support of their position the case •of West Branch Bank v. Chester, 11 Pa. 282 . This, no ■doubt, is very good law in the State of Pennsylvania, for it is the decision of the supreme court of that State. But it is .argued that such, being the law of Pennsylvania, must be the law of this State, because the statute of Pennsylvania and the statute of Delaware for the sale of mortgaged premises on execution upon a judgment in scire facias for the mortgaged •debt are substantially the same. The conclusion is not logical, because some of the conditions upon which the conclusion is founded in the one case do not exist in the other. Ho •court of general equity jurisdiction exists or ever has existed in the State of Pennsylvania. Such a court does exist and has existed from an early period in our history, even of our Colonial history, in the State of Delaware; and because there is no remedy by bill in equity for the foreclosure of a mortgage in Pennsylvania, and because the only remedy there for the collection of the mortgaged debt is by proceedings at law under their statute,—which in fact is no such proceeding for the foreclosure of a mortgage as is known to courts of equity,-— it does not follow that the remedy by bill for foreclosure in •equity does not exist in Delaware, and may not exist elsewhere. But the authority cited is important in respect to some of the issues raised or objections made in the cause

The powers of the court of equity, thus early in our history-established or conferred by statute, continued substantially the same throughout our Colonial history, and until after our separation from Great Britain by the common declaration of the Colonies of their independence, and existence as separate and-

Articles 24 and 25 of this Constitution are as follows:

“Art. 24. All Acts of Assembly in force in this State on the 15th day of Hay last (and not hereby altered, or contrary to the resolutions of Congress or of the late House of Assembly of this State) shall so continue until altered or repealed by the Legislature of this State, unless where they are temporary, in which case they shall expire at the times respectively limited for their duration.

“Art. 25. The common law of England, as well as so much of the statute law as has been heretofore adopted in practice in this State, shall remain in force unless they shall be altered by the future law of the Legislature; such parts only excepted as are repugnant to the rights and privileges contained in this Constitution and the Declaration of Rights, etc., agreed to by this convention.”

This Constitution did not in any respect, in my judgment, destroy or abridge the power and authority theretofore existing in the equitable tribunals of the State as conferred upon them by the Act for the Establishing Courts of Law and Equity within this Government, hereinbefore referred to, but affirmed and continued such power and authority in the inferior courts of chancery mentioned in article 13 aforesaid. The inferior courts of chancery mentioned in said article are the same courts of equity originally authorized to be held by the court of common pleas, etc., and hence the power to hold them, mentioned in said article, was the same in the justices of the courts of common pleas “ as heretofore,” unless the Legislature should otherwise direct. These inferior courts of chancery continued to be empowered and authorized' to hear and decree all such matters and causes of equity as should come before them as fully as they were so authorized to hear

Section 1, art. 6, of this second Constitution of this State, is as follows : “The judicial power of this State shall be vested in a court of chancery, a supreme court, and courts of oyer and terminer, and general jail delivery; in a court of common pleas, and in an orphans’ court, register’s court, and a quarter sessions of the peace for each county; in justices of the peace j and in such other courts as the Legislature—two thirds of all the members of each branch concurring^may from time to time establish.”

Section 14 of the same article is as follows : “ The equity jurisdiction heretofore exercised by the judges of the court of common pleas shall be separated from the common-law jurisdiction, and vested in a chancellor, who shall hold courts of chancery in the several counties of this State. In cases of equity jurisdiction where the chancellor is interested, the cognizance thereof shall belong to the court of common pleas, with an appeal to the high court of errors and appeals.”

The jurisdiction vested in the court of chancery by this

Section 1, art. 6, of the present Constitution of the State, is as follows : “ The judicial power of this State shall be vested in a court of errors and appeals, a superior court, a court of chancery, an orphans’ court, a court of oyer and terminer, a court of general sessions of the peace and jail delivery, a register’s court, justices of the peace, and such other courts as the General Assembly, with the concurrence of two thirds of all the members of both Houses, shall from time to time establish.”

Section 5 of said article declares: “ The chancellor shall hold the court of chancery. This court shall have all the jurisdiction and powers vested by the laws of this State in the court of chancery.”

We have already seen what powers were vested by the laws of this State in the court of chancery at the time of the adoption of the present Constitution. These powers the court of chancery now possesses. By Bev. Code of this State, chap. 95, § 1, it is declared, in words almost a literal transcript from the Act establishing courts of law and equity during the period of our Colonial history hereinbefore so often referred to, that “ the court of chancery shall have full power to hear

Having thus traced the history of the origin and extent of equity jurisprudence in this State, and of the tribunals by which it has béen administered from the time of their creation until the present; and having shown that throughout their whole existence they have been authorized and empowered toi hear and decree all “matters and causes of equity,” it remains to consider whether a foreclosure of a mortgage by judicial decree is a matter or cause of equity. What is a mortgaged It is the conveyance of an estate by way of pledge for the security of a debt, and to become void on payment of it. At law the legal ownership was considered vested in the creditor, but in equity the mortgagor remains the actual owner until he is debarred by his own default or by judicial decree. “ There is no branch of the law of real property,” remarks Gha/noeUor Kent, “ which embraces a greater variety of important interests, or which is of more practical application. The different, and even conflicting, views which were taken of the subject by the courts of law and equity have given an abstruse and shifting character to the doctrine of mortgages. But the liberal minds and enlarged policy of such judges as Hardwicke and Mansfield gave expansion to principles, tested their soundness, dispersed anomalies, and assimilated the law of the different tribunals on this as well as on the other heads of jurisprudence. The law of mortgage, under the process of forensic reasoning, has now become firmly established on the most rational foundations.”

Originally the mortgagee was entitled to the delivery of the possession of the mortgaged premises, the legal estate being vested in him subject to be defeated upon performance of the condition. He might at any time when he pleased,

These remarks are peculiarly applicable to the doctrine of' mortgages as held both by the courts of law and equity in this State. The late High Court of Errors and Appeals, at. the June Term, 1818, in the case of Robinson v. Harriss, cited in 3 Harrington, 283 , said: “ Mortgages are, more especially in this State, to be considered merely in the light of securities for the payment of money; the mortgagee is rarely, if' ever, put in possession of the land ;” and the superior court' of this State, in the case of Cooch v. Gerry, 3 Harrington,. 280 , remarked that the mortgage is regarded, both at law and in equity, as a mere security for the debt. In the case of' Hall v. Twnnell, 1 Houston, 326 , it was decided that “ a mortgage, as between the mortgagor and. the mortgagee, so long-

Although it was usual in England for the mortgagee to enter into possession upon the delivery of the mortgage, and although he might recover possession, even as against the mortgagor, as well before as after condition broken, he might pursue all his remedies at one and the same time. He might bring an action on the covenant to repay the money, serve an ejectment on the tenant in possession, and file a bill to foreclose the equity of redemption; but he could not have his money and the estate too. In England “ a mortgagee may "bring an ejectment at law at the same time that he hath a bill of foreclosure depending; for he will not be prevented from pursuing all his remedies for the recovery of his debts.” 3 Powell, Mort. 966; Coote, Mort. 518; Booth v. Booth, 2 Atk. 343. In the latter case Lord Chancellor Hardwicke said: “ Though the defendant is foreclosing the equity of redenyption here, yet he is not precluded from bringing an ejectment at law at the same time, unless there is something-very particular to take it out of the common ease.” Many cases might be cited to the same effect, but it is unnecessary to do so. How the office of an action of ejectment is to recover the possession of lands. The plaintiff in ejectment brings the action, when out of possession, to recover possession when wrongfully withheld. The position, therefore, taken by the solicitors for the defendants,-—that the Court of Chancery in England had not the power to foreclose a mortgage when the mortgagee was out of possession; and that the mortgagee', if out of possession, could not file his bill to foreclose the equity of redemption until he had obtained possession of the lands by an action of ejectment,—is manifestly erroneous.

The next question to be considered is, When does the right of foreclosure of a mortgage occur, and for what may it be enforced in equity % It occurs upon breach of condition, whether such breach be the nonpayment of money or the nonperformance of any other act, the payment of which or the

We have already seen what the Supreme Court of Pennsylvania said on this subject in the case of West Branch Bank v. Chester. It says: “ In England a default in payment of half a year’s interest on the appointed day is sufficient breach of condition to enable the mortgagee to foreclose.” In the case of Morgenstern v. Klees, 30 Ill. 422 , it was decided that the interest falling due yearly on a note secured by a mortgage is an installment of th debt, and the mortgage may be foreclosed to enforce its payment. It is not necessary to wait until the maturity of the note. In the case of Brinckerhoff v. Thallhimer, 2 Johns. Ch. 486 , a bill was filed to foreclose a mortgage executed by the defendant on the 24th of March, 1813, on a lot or parcel of land to secure the payment of $3,000 in seven years from the 1st of April, 1813, with interest annually. The master reported $752.16 due for interest. The bill was taken pro confessa. A decree was made for the sale of the mortgaged premises, or so much thereof as should be necessary to raise the interest due and cost, and which could be sold separately without material in jury to the parties or either of them. A default in payment of half a year’s interest on the appointed day will be a sufficient breach of condition to enable the mortgagee to foreclose. Coote, Mort. 518.

The power to foreclose a mortgage by bill in equity in England cannot be questioned, and is only questioned in this cause so far as the right to foreclose there is claimed before

The case of Adams v. Essex, 1 Bibb, 149 , decided, not under any statute, but upon consideration of the general principles applicable to the subject, places the right of a court of ■equity to foreclose a mortgage for the nonpayment of one installment, upon grounds, in my judgment, perfectly satisfactory. The court says: “ In the former decree pronounced in this cause, we went upon the principle that when a contract is made for the payment of a sum of money by installments, no action is maintainable at law for the recovery thereof, until the last installment becomes due. Upon more mature reflection and a further examination of the authorities we are now convinced that this principle is not correct as a general rule; •and that in the books it is confined to the action of debt. It seems to have grown out of the rigid principles governing that particular form of action. But in assumpsit, in covenant, and special agreements, although the plaintiff must set out in his declaration the contract as made, he may assign breaches according to the truth of the case, and shall recover damages for so much of the contract as, at the commencement of the action, was broken, without depriving him of his remedy for other breaches of the contract when they happen; or, in other words, he can from time to time recover so much as is due. The case before the court, being a suit in equity for the foreclosure of a mortgage, ought rather to be assimilated to and governed by the liberal principles which govern in covenant, assumpsit, and special agreements, than those technical and rigid rules which are applicable to the action of ■debt only. We are therefore of opinion that the suit was properly commenced, although but one of the installments was due at the filing of the bill. And we are the more ■strongly confirmed in this opinion because the chancellor, from the liberality of those principles and rules which govern ■courts of equity, has it in his power so to mould and fashion his decree, either as to a part or the whole of the demands,

The ancient practice in proceedings for foreclosure, says-Chancellor Kent (Lect. 58), was by bill in chancery to procure-a decree for a strict foreclosure of the right to redeem, by which means the lands became the absolute property of the mortgagee. This is the English practice to this day, though sometimes the mortgagee will pray for and obtain a decree for a sale of the mortgaged premises, under the direction of an officer of the court; and the proceeds of the sale will in that case be applied towards the discharge of incumbrances, according to priority. The latter practice is evidently the most beneficial to the mortgagor, as well as the most reasonable and accurate disposition of the pledge. The practice in proceedings of foreclosure is not uniform in this country. We have

I think it safe and proper to recognize the decree so made,

If I have extended this opinion beyond what may seem a reasonable limit, I have been induced to do so by a desire fully to consider the questions raised by counsel in the argument. It is not my desire to assume for this court any jurisdiction which, in my judgment, does not properly and constitutionally belong to it. That jurisdiction has for the first time in the history of this State been called in question, and with a degree of zeal, earnestness, ability, and, I doubt not, sincerity, by counsel, which do them credit and entitle their arguments to full and mature consideration. I may be indulged, however, in the remark that it was here, in the State ■of Delaware, that the Genius of Equity at a very early day, if not for the first time, erected on this continent that magnificent temple of Equity Jurisprudence so eloquently described by Story in the conclusion of his learned Commentaries. That Genius bids her ministerial servants to guard well the approaches to her temple, and to ward off all those who would seek to despoil her of her trophies or to bear away her treasures. To all such she commands her servants to say: Procul, procul este, profani!

Demurrer overruled.