Olmsted v. Elder — 4 N.Y. Super. Ct. 325

Majority

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Olmsted v. Elder.^[1]

Headnote

Under the act for loaning the United States deposit fund, (Laws of 1837, eh. 150,) on the failure of the borrower to pay the annual interest at the time prescribed, the loan commissioners become seised of the lands mortgaged, so that the mortgagor (not having paid the debt and costs after the default and before the sale,) cannot maintain ejectment to obtain possession.

The production Of the mortgage having no entry upon it of the payment of interest, and the efflux of time, are sufficient to establish presumptively the default in the payment of the annual interest.

The loan commissioners having assumed to sell on such a default, and conveyed, to a purchaser who entered into possession, it was held, that if the sale were irregular, the deed transferred the mortgage to the purchaser, who thus being a mortgagee in possession, could retain the possession until redemption.

January 22, 24;

Feb. 17, 1849.

Ejectment for a lot in Ninth-street, in the city of New York. The declaration claimed the premises in fee, and alleged a seisin of the plaintiff, on”the 5th January, 1841. At the trial before Oaklet, Ch. J„, in February, 1848, it was admitted that on the 20th of April, 1838, S. A. Bostwick owned the premises in fee, and that the defendant was in possession at the commencement of the suit. The plaintiff then showed title in herself deduced from Bostwick.

The defendant then read in evidence a mortgage executed by Bostwick to the loan commissioners of the city and county of New York, appointed under the act of 1837, to loan the United States deposit fund, dated April 18th, 1838, for $3000, with interest, payable on the first Tuesday of October, annually. There was no indorsement or proof of payment of the interest, which fell due in October, 1841. ■ It was admitted that the premises were duly advertised by the United States Loan Commissioners, to be sold on the first Tuesday of February, 1842, pursuant to the act of 1837. The defendant next read in evi

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dence, a deed dated April 1, 1842, executed by the Loan Commissioners, conveying the lot in question to the defendant, stating the same to have been on a sale made at the time advertised. This deed was objected to on several grounds, not necessary to be enumerated, because there was no proof of the non-payment of the interest. The defendant then rested.

The plaintiff then proved that only one of the Loan Commissioners was present at the sale; that the lot was struck off to R. Van Rensselaer, as the highest bidder, who signed his name to the prescribed terms of sale- in the commissioner’s minute book, which were fifteen per cent, at the sale, and the balance on the 1st of April, 1842. That afterwards Van Rensselaer struck out his name in the minute book, and inserted the name of the defendant, who was not present at the sale. There was some other testimony given, which does not bear upon the case as reported. The plaintiff requested the judge to chargé the jury, that the sale made on the first Tuesday of February, 1842, by the Loan Commissioners to Robert Elder was void, because: ' ■

1st. Only one of the commissioners was present at the Sale.

2d. Because the premises were struck off to Van Rensselaer, who signed the agreement at the sale, but no agreement at the time was made with the defendant, or signed by him, and after-wards the premises were conveyed to him.

3rd. Because the terms of sale were fifteen per cent, cash, and the balance- on the first day of April. The act of 1837 only authorizes the commissioners to sell for cash.

The judge refused so to charge, and directed the jury to find a verdict for defendant, to which the1 counsel for the plaintiff then and there excepted.

The plaintiff moved for a new trial on a bill of exceptions.

W. Rutherford, for the plaintiff.

H. F. Clark, for the defendant.

Several questions were

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argued, which it is unnecessary for us to decide in disposing ot the motion for a new trial.

There are two grounds upon which we think the defendant is entitled to recover:

1. By the thirtieth section of the act for loaning the United States deposit fund, (Laws of 1837, c. 150,) on the failure of the borrower to pay the annual interest at the time prescribed, the Loan Commissioners become “ seised of an absolute and indefeasible estate in fee” in the lands mortgaged, and the mortgagor is thereupon barred and foreclosed of all equity of redemption. He is permitted to retain the possession until the day of the commissioners’ sale, prescribed by the act; and on paying the mortgage and costs before the time of sale, the title in fee to the premises will revert to, and re-in vest in the mortgagor. (§ 30,33.)

The mortgage was produced on the trial, and the time for the payment of the interest due in October, 1841, had elapsed. There was no proof of the payment of the interest. Moreover, there was competent evidence to show affirmatively that it was not paid, if any such proof were necessary, beyond the efflux of time. It is the duty of the commissioners to enter on the back of the mortgage a minute of every sum paid to them on such security. (§ 28.) The mortgage exhibited no minute of the payment of the interest in question; and this established presumptively the fact of its non-payment.

The direct and necessary consequence is, that at the end of twenty-three days from the first Tuesday of October, 1841, the title in fee to these premises vested in the loan commissioners. The act is so rigorous, that it leaves not a vestige of title or estate in the mortgagor or his assigns. The evidence thus proved title out of the plaintiff, and she made no attempt to show that it ever reverted to, or re-vested in her, by redemption or otherwise. This was sufficient to entitle the defendant to a verdict, without in any manner connecting himself with the outstanding title.

2. The second ground of defence rests upon the same evidence, with the addition of the deed from the loan commissioners. The deed was sufficient, at least, to transfer to the defend

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ant the money due upon the mortgage. The interest - on the mortgage was in arrear, and the mortgagees were entitled to foreclose, or to sell under the statute. The defendant, therefore, occupies the position of a mortgagee in possession of the premises mortgaged; the money secured being due and unpaid. Although since the revised statutes, a mortgagee cannot obtain possession at law, on default of payment, there is no doubt that he may retain the possession until redemption, if he succeed in procuring it by the mortgagor’s consent, or in any lawful mode.

In placing our decision upon these grounds, we do not intend to intimate any doubt as to the sufficiency of the defendant’s title under the sale and deed of the loan commissioners. We leave that subject untouched.

Motion for a new trial denied.