Struve v. Childs

MANNING, J. [After stating the facts as above.] Courts of equity will sometimes interpose, to prevent an abuse of the process of a court upon a lawful judgment, or to restrain the execution of a lawful power of sale, when thereby an oppressive wrong, or fraud, is attempted to be accomplished. In respect to mortgages with power of sale, this jurisdiction is exercised with great circumspection. In Kerr on Injunctions (pp. 192-3), the doctrine in England is stated thus : “ The court has no jurisdiction to restrain a mortgagee from selling under a power of sale, provided he keep within the terms of the power, and no case of fraud be made out. * * Unless there be fraud, or special contract, a mortgagee will not be restrained from selling under a power of sale.” But, if “ it is attempted to pervert the power from its legitimate [476] purpose, and to use it for the purpose of oppressing the debtor, or of enabling the creditor to acquire the property himself, a court of equity will enjoin the sale, or will set it aside after it is made.” Though “ a stronger case ■ must be made to call for such interference than to set aside the sale afterwards.” — 2 Jones on Mori § 1801. In Robertson v. Norris, 4 Jurist, N. S. 155, Sir J. Stuart, Yice-Chancellor, said: “ The legitimate purpose, for which the power to sell in this defendant's mortgage deed was given, was to secure him repayment of his mortgage money. If he uses the power to sell, which he gets for that purpose, for another purpose, from any ill motive, to effect means and purposes of his own, or to serve the purposes of other individuals, the court considers that to be what it calls a fraud in the exercise of the power, because it is using the power for a purpose foreign to the legitimate purposes for which it was intended.” This ruling was affirmed on appeal. — See note 2, to § 1801, supra, and section 1447. In Jones on Mortgages (§1447), a case is referred to (Foster v. Hughes, 51 How. Pr. N. Y. 20), very similar to the present; “where a wife, who owned the fee, tendered the mortgagee the amount of his debt, and asked for an assignment of the mortgage, which he refused to make; and the evidence showed that the mortgage was being foreclosed in the interest of the husband, in order to force her to settle a suit by her to annul the marriage, and litigations then pending about other property; as a new mortgage could not then be obtained, on account of the litigation," the court ordered that, if the mortgagee refused to assign, the proceedings should be stayed.” Neither this case, nor that of Robertson v. Norris, is at present within our reach, fully reported. But they seem to justify the claim made by plaintiff to' relief. The facts relied on, as evidence of the purpose of defendant to aid, by a sale under her mortgage, those concerned against complainant in the suit of Walker, as executor, against her and others, to establish unjustly (as she avers) a lien on the property, are set out with particularity. So are those which show how, being embarrassed by that suit, and hindered from raising money by a second mortgage, complainant procured a friend to assist her, between whom and defendant it was agreed, that he would pay the amount of the mortgage debt to defendant, and she, defendant, should transfer the mortgage and debt to him; which agreement (it is alleged) defendant afterward refused to perform. What should be the effect of other facts in the case, will depend upon disclosures to be made in the further progress of the cause. Upon the bill as [477] it stands, we are all of tbe opinion, that the injunction should have been continued. Let the decree of the chancellor be reversed, and an order entered that the injunction be reinstated, and continued until the further order of the chancellor, after answer filed. The cause must be remanded.