Dorrow v. Kelly — 1 U.S. 142

Majority

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Dorrow, Assignee, v. Kelly.

Syllabus

Mortgage. — Taelcmg.

Ia Pennsylvania, a simple-contract debt cannot be tacked to a mortgage.

This came before the court on a case stated; in substance, as follows: On the 5th of March 1782, a mortgage was executed by Abel Kelly to Thomas Groome and his assigns, for securing the payment of 471. 4s. with interest, on the 5th of March 1788. On the 9th of August 1782, the mortgage was assigned, for a valuable consideration, to John Borrow; who sued out a scire facias to June term 1784, the day of payment being past. After' the assignment, and before the scire facias sued, Kelly became indebted to the said Borrow by notes and book-accounts, in divers sums, which still remain unpaid and payable.

Ingersoll, for the defendant,

had obtained a rule to show cause why the proceedings on the scire facias should not be stayed, upon payment of the principal mortgage-money, interests and costs only; without payment of the subsequent simple-contract debts.

Lewis, for the plaintiff,

showed cause, and stated from the books the law on the subject in England: — That it is presumed the subsequent simple-contract debts were contracted on the faith of the first security, though no special agreement for the purpose; that after the day of payment, the mortgaged premises are forfeited, in strict law; the privilege of redemption after-wards is a matter of equity, which shall be withheld, until the mortgagor does equity, by payment of all debts; that it prevents a multiplicity of suits, and effectuates substantial justice. And he contended, that in Pennsylvania, the chancery jurisdiction for redemption of mortgages, is transferred by the act of assembly to the common-law courts, which will also take care that he who claims equity shall do it. Tie cited a great number of cases, both as to the reasons and conclusions of the law. 3 P. Wms. 334; 3 Atk. 556, 630; 1 Chan. Cases, 97; 2 Vern. 286; 2 Chan. Cases, 98; 2 Vern. 177; Prec. Ch. 18; Gilb. Rep. in Eq. 104; Prec. Ch. 419; 16 Vin. 264-5; 1 P. Wms. 775-6; 1 Vern. 244; 1 Salk. 240; 1 Eq. Cas. Abr. 325; 2 Id. 594; Gilb. Rep. in Eq. 96; Max. of Eq. 1; Treatise of Eq. 89, 90.

Ingersoll read some authorities to show, that even in England, the law on the subject is not thoroughly settled. 2 Str. 1107; Eq. Cas. 359; 3 Bac. Abr. 651; Prec. Ch. 407, 419. But, conceding it to be *as stated by the opposite counsel, yet, he contended, that it is very different in Penn- [*143 sylvania. Our act of assembly (1 Sm. Laws 59) puts mortgages on quite another footing: — For, 1st, Mortgagee cannot proceed on the mortgage, until one year expires after day of payment elapsed. 2d. Even then, a process is directed by the act, altogether different from that which is practised in England, and which does not go to vest the legal estate in the mortgagee, 3d. In fact, the mortgagee cannot, by any default of the mortgagor, however long, or reiterated, acquire a right to more than principal, interest and costs, for the amount of which he has an absolute and special lien on the mortgaged land, and for the payment of which the said lands are to be sold on execution (after judgment on the scire facias) in the usual way. And the act for acknowledging and recording of deeds, § 9, 10 (1 Sm. Laws 95),

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directs, under a heavy penalty, that upon payment made as aforesaid, the mortgagee, at the request of the mortgagor, shall acknowledge satisfaction on the margin of the record of the mortgage, which acknowledgment shall be a bar to all actions brought or to be brought on the mortgage, and shall for ever discharge, defeat and release the same. He then read the law of mortgages in England, from 2 Bl. Com. 157, and contrasted it with our act of assembly. In England, after day of payment past and foreclosure, the land is absolutely in the mortgagee, without any possibility of recall; it ceases to be a pledge, and becomes, to all intents and purposes, the absolute property of the mortgagee. In Pennsylvania, there is no such thing as foreclosure,-the land mortgaged never ceases to be a pledge; a legal estate never vests in the mortgagee, nor can he, by any possibility, become owner of the land, unless he purchases under the execution. Hence, it must appear, that the reason of the English cases cannot apply in Pennsylvania. Relief is given to the mortgagor, in chancery, expressly because he is remediless at law; and therefore, they will grant the equity upon what terms they please. In Pennsylvania, the act of assembly precludes all necessity for such an interference. The privilege of redemption after the day of payment past is not properly speaking an equity, and therefore, the principle of the chancery cases cannot exist. Another reason why the English cases do not apply is, that, in England, real estate is not answerable for simple-contract debts; and therefore, chancery, in favor of such creditors, will cover them, where they have it in their power; but here, the simple-contract creditor can come on the land, even in the hands of the heir. If the rule should be extended to Pennsylvania, the most mischievous consequences would ensue to purchasers. It would be in vain for them to search the offices, to see to what amount a tract of land may be incumbered by mortgages; because, however accurate he may be in his calculation and comparison of the value of the land, with the amount of the mortgage-debts, an infinity of intermediate simple-contract debts may swallow up the whole difference.

Lewis observed, in reply, that the mischief suggested by his opponent *1441 nee<^ not be apprehended, because all the cases agree, that *the alienee J of the mortgaged premises shall not be liable for more than the mortgage-debt, though it is otherwise with the mortgagor himself. As to the idea, that, in Pennsylvania, a mortgage is in nature of a common pledge, we find that the authorities extend even so far; Demanbry v. Metcalf, Glib. Rep. in Eq. 104; s. c. Prec. in Ch. 419; it is the case of jewels pawned, which were not permitted to be redeemed, without payment of the pawnor’s subsequent note of hand. And, with respect to the present point, the act of assembly has no other effect, than to extend to our law-courts the power of redemption which chancery has in England ; for, if there was no such power, upon default on the day of payment, the mortgagor would be without remedy.

After consideration, the President delivered the opinion of the court as follows:

The case comes before us on a rule to show cause why the proceedings on a scire facias on an assigned mortgage, should not be stayed, on payment of the principal and interest due on the mortgage ? It is contended, on the part of the plaintiff, that a subsequent debt having been

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contracted with the assignee of the mortgage, the rule should not be granted, until such subsequent debt be first paid.

Being a court of law, we cannot take upon ourselves to act as a court of chancery. We have no power to foreclose the equity of redemption, or to. impose terms upon a mortgagor applying to redeem. The courts of law in England have never done it, but under the act of parliament of 7 Geo. II., c. 20, made for the more easy redemption and foreclosure of mortgages. Under this act, when an ejectment is brought for the recovery of lands mortgaged, if the mortgagor shall become defendant in the ejectment, and shall, at any time pending the action, pay the principal and interest money due on the mortgage, or bring it into court, such money shall be taken in full discharge and satisfaction of the mortgage, and the court shall discharge the mortgagor, and compel the mortgagee to surrender and re-convey the mortgaged premises. There is a case under this act which has not been cited at the bar, and which is rather fuller to the point, than any that have been cited. It is in 2 Barn. Not. 147, where “ a rule, on the statute of 7 Geo. II, to show cause why proceedings should not be stayed, on jjayment of the mortgage-money and costs, was made absolute ; the lessors of the plaintiff, assignees of the mortgagee, insisted to be paid a bond and simple-contract debt due to themselves in their own right: — Per Curiam: a bond is no lien in equity, unless when the heir comes to redeem.”

The courts of law, in this state, have, in some instances, adopted the chancery rules, to prevent the absolute failure of justice. But in this case, there is no necessity to usurp the powers of a court of chancery. We have a positive act of assembly, directing the mode of proceeding upon mortgages, entirely different from the *modes prescribed in England. This act r¡¡. expressly confines the remedy of the mortgagee to the recovery of *- the principal and interest due on the mortgage ; and the proceedings under the law show the uniform construction of it. The scire facias is to show cause why the land should not be sold for payment of the principal and interest due on the mortgage : when judgment is obtained, the levari facias is to levy the principal and interest money only. There is no penalty, no judgment for a penalty, and we might as well refuse to stay proceedings in a suit on a single bill, until a subsequent debt was discharged, as in this case of a mortgage. Upon the execution in both cases, no more can he levied than the principal and interest,^[1]

Rule made absolute.

(a) (a) s) In Anderson v. Neff, 11 S. & R. 222, Judge Duncan said, “ The law of England with respect to using satisfied incumbrances to protect purchasers, has no relation to mortgages in Pennsylvania. Redemption here is not a principle of equity, but a legal right On the execution, no more can be levied than the principal and interest. These principles were settled in in Dorrow v. Kelly, 1 Dall. 144 , and have prevailed invariably. There is no natural equity in tacking debts, and, where it interferes with the rights of others, it is most unjust”