Murray v. . Walker

Since an equitable defense may now be interposed to an action of ejectment, as well as to any other action at law, it would seem, from the conceded facts in this case, that there could hardly be room for doubt as to the correctness of the decision of the Supreme Court. What is a mortgage, in its comprehensive sense? Kent says (vol. 4, p. 151, of his Commentaries), "A mortgage is the conveyance of an estate by way of pledge for the security of debt, and to become void on payment of it. The legal ownership is 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." In this case, the plaintiff, by the assignment of the certificate and the patent, became the legal owner. But, in equity, Stanford remained the actual owner. As such, he made the improvements and mortgaged the premises to Corning, and the latter, by foreclosure of his mortgage *Page 401 and purchase, became the actual owner. He foreclosed and cut off the equity of redemption, as between him and Stanford, and by his purchase became the owner of such equity, and then interposes it as a defense to the plaintiff's claim, which is that of legal owner. These are simple and elementary principles, and are controlling. The plaintiff never foreclosed the equity of redemption of Stanford — never took any steps, except to perfect the title by the patent. As holder of the certificate, the plaintiff, with the consent of the commissioners of the land office, could have brought an action for injuries done to the land, the same as if a patent had been granted. (1 R.S., 5th ed., p. 541, § 30.) By the express terms of the statute he was entitled to the patent, on payment of the balance due on the certificate. Plaintiff has, at all times since the transfer of the certificate to him, been virtually the legal owner; while Stanford was, at all times, down to the foreclosure sale, the actual owner. This is simply, therefore, an action of ejectment by the mortgagee against the owner of the equity of redemption; in other words, the actual owner in possession. The fact that the conveyance under which the plaintiff claims, namely, the patent, is absolute on its face, makes no difference. The certificate which was the foundation of the patent, and as holder of which the plaintiff procured the patent, recited that it was assigned merely as security. As was said by the chancellor, in Clark v.Henry (2 Cow., 327), "though the conveyance be absolute in terms, yet if the intention appear to make the estate redeemable, it will continue so until foreclosure; for the maxim of equity is, that the estate cannot be a mortgage at one time and an absolute purchase at another." The obtaining the patent was in no sense a foreclosure, neither in fact nor technically. There was no advertisement and sale constituting a statute foreclosure. There was no action commenced and prosecuted, making the owner of the equity of redemption a party. The plaintiff was clearly not entitled to the possession of the premises, and his complaint was properly dismissed. The judgment should be affirmed. *Page 402