Erwin v. Ferguson

GOLDTHWAITE, J. The questions which have been raised with respect to the parties to this bill, the manner in which the service has been perfected on the defendants, and the decree as against those who are absent, have a preference of examination, because, if decided adversely to the complainants, the investigation of the other points will be rendered unnecessary. 1. We propose then, first, to consider who are the necessary parties, as complainants, to this bill; and if others are joined, whether this can so affect the decree as to cause its reversal. There is much apparent conflict of decision upon the subject of parties, and it seems to have arisen from the very cautious manner — 162 — in which the courts of equity have felt their way to their present extensive and salutary jurisdiction over all classes of mortgages. The estate created by a mortgage, was at first considered by courts of equity, as well as by those of law, as absolutely vested in the mortgagee by a forfeiture of the condition; and when the former, by virtue of their extraordinary powers, first opened the condition, and compelled the mortgagee to take his money and re-convey, they sought out the parties on whom the legal estate was cast. When, subsequently the same courts began to compel the mortgagor to render justice to the mortgagee, it was ascertained that cases existed, in which the latter had no interest, in consequence of the assignment of the debt voluntarily, or by operation of law. In other words, the legal estate under the mortgage and the equitable interest in it, in consequence of the assignment of the debt, became vested in different individuals. Even under such circumstances, the courts endeavored to adhere to rules which had governed the first class of cases, and the original mortgagee, or his heirs, wore continued as parties, although it was entirely evident that they had no interest in the litigation, and would not even be permitted to re-convey the equity of redemption,to the prejudice of the right of him who was entitled to the debt. It is somewhat doubtful, whether the English courts of chancery, do not adhere to these rules at the present day, as some recent cases hold, that the person having the apparent legal interest under the mortgage, is an indispensable party, either as complainant or defendant. [Scott v. Nichol, 3 Russ. 476; Ward v. Williams, 4 Madd. 186. See also Mitford, 179; Cathcart v. Lewis, 3 Bro. C. R. 516; S. C. 1 Vesey, jr. 463; Ray v. Fenwick, 3 Brow. R. 25.] We say it is doubtful, because in analogous cases, and when the same rule, if it is the correct one, ought to govern, the same courts, have held, that the assignor of a mortgage security is not an indispensable party when a bill to foreclose is brought by his assignee. [Bruce v. Harrington, 2 Atk. 235; Blake v. Jones, 3 Anst. 651. See also Miller v. Bear, 3 Paige 467; Whitney v. McKinney, 7 Johns. Ch. 144; Trecothic v. Mason, 4 Mason 41.] In the American courts, from the earliest period, courts of law, as well as courts of equity, have considered mortgages hr a more practical point of view, and the legal estate is considered as remaining in the mortgagor, for all purposes, even after a forfeit — 163 — ure of the condition until an actual entry is made by the mortgagee. [4 Kent’s Com. 160; Clark v. Beach, 6 Conn. 142.] And it is doubtless with reference to these American decisions, as well as with regard to the apparent conflict of the English cases, that Judge Story doubts the correctness of the rule laid down in Mitford, and says, “when the assignment is absolute, and unconditional, leaving no equitable interest whatever in the assignor, and the extent or validity of the assignment is not doubted or denied, and there is no remaining liability in the assignor to be affected by the decree, it is not necessary to make him a party. At most, he is merely a nominal or formal party in such a case. It is a very different question, whether he may not properly be made a party, as the legal owner, although no decree is sought against him, for in many cases, a person may be made a party, although he is not indispensable. [Story’s Eq. Plead. 147, § 153.] If we were called on to consider the estate conveyed by flu's mortgage in a mere legal aspect, it may be conceded to be a joint tenancy in both the mortgagees; and, as the right of survivorship in such estates is here destroyed by statute, on the death of Ogden, his heirs inherited his legal estate; but under no circumstances, can his executors, unless they are devisees of his real estate, claim any legal right under the mortgage, or equitable interest in the land secured by it. The legal estate, such as it is, must descend to his heirs; the legal as well as the equitable interest in the bond, remains with the survivor, who alone is competent to receive satisfaction for, or give a discharge of the debt; and consequently he is the only indispensable party complainant to tills bill. It also follows that the executors of the deceased partner were improperly joined to this suit. 2. But although they are thus improperly joined as complainants, it is very clear that the defendants cannot in this place, for the past time, claiin any advantage of this error. The objection could have been made by any one of the defendants on demurrer, but not otherwise. [Story’s Eq. Plead. 292, § 509; 417, § 544.] The reason why the defendant is not permitted to avail himself of such a defect at the hearing, or on error is, that the plaintiff could have amended his bill if the error had been pointed out, and the defendant ought not to be allowed to start such an objection when the plaintiff is not a condition to amend. — 164 — It is thus shewn that the misjoinder of complainants cannot affect the cause at this stage of the proceedings. 3. As to parties defendant to a bill to foreclose, the rule seems to be that the heir or devisee of a mortgagor, who dies the owner of the fee, is an indispensable party. [Story Eq. Plea. 181, § 196; Duvall’s heirs v. McLoskey, 1 Ala. Rep. N. S. 708.] If, however, the estate has been conveyed by him, or assigned by operation of law, then only the assignee need be made a party; [ib. 182, § 197; Wilkins and Hall v. Wilkins, 4 Porter 245.] In this case it is not material to inquire whether the personal representative of the deceased mortgagor is an indispensable party to a bill seeking a sale, because it is conceded by all the cases that such personal representative may be made a party, if the complainant chooses to proceed for an account. [Story’s Eq. Pl. 182, § 197. See also Wilkins v. Wilkins, 4 Porter 245; Inge’s heirs v. Boardman, 2 Ala. Rep. N. S. 331.] The bill docs not allege that any absolute assignment was made by the mortgagor of the estate during his life time, and therefore we conclude that his heirs at law are indispensable parties; and as such, the complainant insists they are made. 4. It is true, the bill docs not technically allege that the children of the deceased mortgagor are also his heirs at law, but we think it would be a most strained conclusion that they were not. We may imagine cases in which children arc not necessarily heirs, but they are where there can be no heirs, as hi the case of an alien, or where an alien is naturalized having adult alien children. We will assume that the legal presumption is that every owner of land, is a citizen, and we think it equally just to conclude, in the absence of any shewing to the contrary, that the children of a citizen ar oprima facie his heirs. If the fact is contrary to this legal presumption, the case would then be a proper one to disclose the fact by plea and answer, but upon the face of the bill, we cannot discover that any one who should bo a party defendant is not so. 5. If it be true, as supposed by counsel, that the executrix of the mortgagor, who refused to act, is improperly made a party, this is an objection personal to herself, and can only be raised on demurrer. [Story’s Eq. Pl. 417, § 544.] 6. The next and only other matter intended to be examined, is that which relates to the maimer in which the infant defendants — 165 — are brought before the court; and this will also extend to such of the other absent defendants as have not submitted to the jurisdiction, either by appearance or answer. It has not been contended that courts of equity, as such, have any inherent jurisdiction over absent defendants, even if connected with property within the jurisdiction. Our statute seems to deny any such jurisdiction, unless the ground of action, or the transaction on which the bill is brought takes place within the State. [Digest 290, § 27.] In such cases the statute provides “ that any defendant against whom subpoena or other process may issue, who shall not cause an appearance to be entered within such time and in such manner as by the rules of the court, the same ought to have been entered, in case such subpoena or other process had been duly served; then, if affidavit is made that such defendant resides beyond the limits of the State, the court may make an order, directing such defendant to appear at a certain time therein named.” A copy of this order is required to be published within forty days thereafter, in some gazette, regularly published within the State, for such space of time as the court shall direct. This order is also within the same time to be posted up at the door of the court house, where made. In addition to this, the court at its discretion may direct the order to be published in any gazette of the United States, for such space of time as it may deem reasonable. If after this, the defendant does not appear within the time limited by the order, or within such further time as the court shall appoint, then, on due proof of publication as aforesaid, the court may order the plaintiff’s bill to be taken pro confesso. The statute subsequently declares that the proceedings against absent defendants shall, notwithstanding be subject to certain restrictions and limitations. These are, 1st. That before obtaining any decree the complainant shall give bond to abide such order touching the restitution of the estate, or effects to be affected by such decree as the court may make concerning the same, on the appearance and petition of the defendant, to have the cause reheard. 2. If the decree is against a person residing beyond the limits of the State, at the time of pronouncing the same, and such person shall, within two years afterwards, reside within the State, or become publicly visible therein, then such defendant shall be served with a copy of the decree within a reasonable time after — 166 — such residence or appearance shall be known to the complainant. 3d. In case the defendant die within the two years, and before the service of the copy of the decree, and his heir have any real estate, of which possession shall have been given to the complainant, notice shall be given to him ; or, hi certain cases of disability, to his guardian; and in case of personal estate the notice is to be given to the personal representative. 4th. That the decree shall stand absolutely confirmed against such person as shall have notice, if he shall not appear within twelve months after service and petition to have the cause reheard. 5th. If the person served with such copy of the decree within twelve months thereafter, or if any person not so served within three years after such decree, shall appear and petition to be heard touching the matter of the decree, and shall pay all costs-, such person or his representatives, or any one claiming under him by virtue of any act done before the commencement of the suit, may bo admitted to answer the bill; and such proceedings shall be had as if no decree had pass-' ed. 6th. After three years from the decree, if there is no appearance, the same shall stand absolutely confirmed. [Digest, 289, § 23 to 27.] The 13th section of the act of 1841, authorises the several registers to grant orders of publication, and the 14th section, when regulating the mode by which guardians, ad litem, for infants, shall be appointed, expressly directs that when minors of any age reside out of the State, publication shall be made as in other cases. The order for publication in this case, was made by the register at the rules in April, 1841, and consequently is to be governed by the acts recited, and not by the rules of chancery practice adopted at the January tenn of the same year, because these last were not to take effect until the first of May thereafter. After what this court declared to be the proper course with respect to infant defendants, in the case of Walker v. Hallet, [1 Ala. Rep. N. S. 379,] it was to be expected that then rights would be scrutinized, and if necessary, protected; but that has not been done in this case. The record does not disclose that there was any proof of the actual minority of these parties, and for that reason if for no other, the judgment, upon the authority of that case, must be reversed. We may remark that the present rules afford ample protection — 167 — to this class of suiters, when considered in connection with the statute. 7. It is urged also, that these proceedings arc not warranted, inasmuch as the statute requires a subpoena or other process to issue. It is true the statute might bear such a construction, but avo do not think it Avas intended to make a useless act'important to the sendee of process. The fact of absence or non-residence can be better and more safely ascertained by affidavit, than by a mere office return; and there is no reason for supposing that mere delay was intended by the statute. Our conclusion is, that the order was properly made by the register upon the affidavit, so far as the mere non-residence is concerned. Undor the amended rules, it is perhaps requisite, in the case of infant defendants, who are non-resident, that their ages and places of abode should also appear. 8. It is veiy evident from the statute we have in part recited, that the legislature has guarded the rights of absent defendants with the utmost solicitude ; and it is impossible to sustain this decree against those who have not voluntarily submitted to the jurisdiction, without declaringthe statute inoperative, because the bond required to be given in all cases where there are such defendants decreed against, does not appear to have been executed. 9. If the adult defendants who have not answered are neces.sary parties to the bill, their rights are prejudiced by the decree, and therefore they have the right to insist on the bond. But it is indispensable with respect to those of the infants who are non residents, for the reason that they are indispensable parties. The authority to appoint a guardian ad litem, is vested with the chancellor, in order that the interests of the infant may be protected; but if the protection thus thrown around them in one aspect of the case, is to be construed as a voluntary appearance and submission to the decree of the court, then they are deprived of the bond, which adult non-residents cannot be deprived of, except by a voluntary appearance. Consequently, they are in a worse condition than if they were adults. To give such a construction to the appointment of a guardian, or to his answer for his wards, would be at variance with the well recognized rule that every thing will be intended in favor of infants, and nothing against them, and it ought not to prevail unless the legislature has clearly directed it. This in our opinion is not the case, and, for the errors we have — 168 — considered, the decree of the chancellor is reversed, and the cause remanded for further proceedings.