Buchanan v. Monroe

Wheeler, Ch. J. The decisions of this court have recognized, in its full extent, the doctrine of courts of equity, that a mortgage is but a security for the debt, and only a chattel interest; and that, until a decree of foreclosure, the mortgagor continues the real owner of the fee. The doctrine of equity is, that the equity of redemption is the real and beneficial estate, tantamount to the fee at law; and it is accordingly held to be descendible by inheritance, devisable by will, and alienable by deed, precisely as if it were an absolute estate of inheritance at law. (4 Kent’s Com. 159, 160; 2 Story’s Bq. Jur. §§ 1015, 1016, 1017, 1028.) “ The mortgagor has a right .to lease, sell, “and in every respect, to deal with the mortgaged premises as “owner, so long as he is permitted to remain in possession, and “ so long as it is understood and held, that every person taking “under him, takes subject to all the rights of the mortgagee, “unimpaired and unaffected.” (4 Kent’s Com. 157.) The equity of redemption, is a subsisting estate and interest in the land, in the hands of the heirs, devisees, assignees, and representatives (strictly so called) of the mortgagor. (2 Story’s Eq. Jur. § 1023.) It is liable to sale on execution, in this country, as the real estate of the mortgagor, or his alienee, in his lifetime; and upon his death, descends to- his heirs, charged, in the administration.of his estate, with subsisting liens, and his debts, in the same manner as his other real estate: whereas, the estate of the mortgagee is but a chattel interest, is not liable [542] to execution, and upon his death, the mortgage debt is part of the personal estate of the mortgagee. The conveyance by .the mortgagors, Phillips and wife, transferred the equity of redemption to Wyatt and wife. It passed the entire estate and interest in the property, subject to the lien of the mortgage. The whole estate was conveyed subject to the lien, and became the estate of Wyatt and wife; and so remained at the death of Wyatt, if that was before the sale under the power in the mortgage. In a suit to foreclose the mortgage, they would have been necessary parties, in order to bar their equity of redemption. (4 Kent’s Com. 185; Story’s Eq. Pl. §§ 193, 195, 197; Hall v. Hall, 11 Tex. Rep. 526.) Rut Phillips and wife would not have been necessary parties, because they had parted with their entire estate, and had no interest to be affected by the decree. Their equity of redemption was transferred, and passed by the conveyance, to Wyatt and wife; who were thereby subrogated to their estate, and all their rights in relation thereto. Their estate and rights, after the conveyance, were in all respects the same as those of Phillips and wife before. Hence, according to the doctrine in Robertson v. Paul, 16 Tex. Rep. 472, and numerous cases since decided, the death of Wyatt operated a virtual revocation of the power to sell, contained in the mortgage, and imposed on the mortgagee the necessity of having recourse to the Probate Court, for the enforcement of his lien upon the property; upon the principle, that the statute relating to the estates of deceased persons, requires all liens upon property of their estates, to be enforced in the Probate Court. (17 Id. 627; 18 Id. 200; Chandler v. Burdett, 20 Id. 42; Cunningham v. Taylor, Id. 126; McMiller v. Butler, Id. 402.) Upon the death of Wyatt, before the execution of the power to sell, the equity of redemption was in his legal representatives; the property, with the mortgage incumbrance, was a part pf his estate; the mortgage was a lien upon property of his estate; and according to these decisions, could not be enforced otherwise than by proceeding in the Probate Court. In the lifetime of Wyatt, a decree of [543] foreclosure, to which he was not a party, would not have barred his equity of redemption; he would not have been bound by the decree; and the title of the purchaser, at a sale under it, would have been inoperative to divest his right, and ineffectual in an action to recover of him the possession; although a sale, in pursuance of the power in the mortgage, might have had the effect of a decree to which he was a party, to foreclose and bar his equity of redemption, and vest the paramount title in the purchaser at the sale. But after his death, the power being thereby revoked, the sale by the trustee was unauthorized, and consequently inoperative to foreclose the equity of redemption remaining in his legal representatives; was not binding upon his estate, or effectual to give title to the purchaser at the sale. The court, therefore, erred in excluding evidence offered by the defendants to prove the fact of the decease of Wyatt, prior to the sale by the trustee; for which .the judgment must be reversed, and the cause rémanded. Reversed and remanded.