Pace v. Chadderdon

Atwater, J. By the Court. This action was brought by Pace, the Plaintiff below, to recover possession of certain real estate, situate in Scott county, of which the Plaintiff claimed to be owner in fee, and alleged that the Defendant was wrongfully in possession of the same. The answer sets up a mortgage given by the Plaintiff, August 17th, 1857, to one King, the grantor of the Plaintiff, and by him duly assigned to the Defendant, that said mortgage had become due and had been [501] foreclosed, before tbe commencement of this action, and. that the Defendant had purchased the premises on the foreclosure sale, on March first, 1860. Tbe answer also sets np a lease from tbe Plaintiff to tbe Defendant, of tbe premises, dated May 2d, 1859, and expiring in tbe following January in part, and tbe balance in May, 1860, and alleged tbat tbe Defendant was in possession under tbe lease. Tbe allegations of tbe answer with reference to tbe lease were not denied by the reply, which, however, alleged various irregularities in tbe foreclosure proceedings, and claimed tbat by reason thereof, tbe sale thereunder was void. Tbis action was commenced in August, 1860. Tbe only question presented by tbis case is, whether tbe mortgagor, after forfeiture, can maintain an action against tbe mortgagee, lawfully in possession, for tbe recovery of the' premises. Eor if tbe foreclosure set up in the answer should be held void, tbe mortgagee, or his assignee, would of course have tbe right, immediately to foreclose bis mortgage, and if tbe proceedings already bad be held valid with respect to,tbe foreclosure, tbe sole ground on which tbe Plaintiff rests bis case, (so far as the record shows,) would be untenable. Tbis is tbe first time, so far as I am aware, tbat this question has been presented for adjudication in tbis court, and it is perhaps to be regretted, tbat counsel on neither side should not have discussed it, but have barely raised tbe point in tbe brief submitted to tbe court. Tbat the mortgagor could not maintain ejectment against bis mortgagee, lawfully in possession, after condition broken, seems to have been long since tbe settled doctrine in England. Steph. Nisi Prius 2, pp. 13, 75; Doe vs. Barton, 11 Ad & Ell. 315; 5 Bing. 427; 4 Dougl. 309; Marriot vs. Edwards, 25 Eng. Com. Law R. 397; 1 Chit. Pl. 189. Tbis doctrine has been adopted by tbe courts of many of tbe States. 6 John. 290; 7 John. 278, 376; 10 John. 381; 19 John. 325; 20 John. 50; 15 Wen. 248; 7 Cow. 13; 7 Mass. 138; 9 Mass. 101; 15 Pick. 147; 1 Met. 494; 1 Binny 177; 12 Serg. & Rawle, 243; 2 Watts, 282. In ejectment, it is well settled, tbat tbe Plaintiff can only recover on the strength of his own legal title. He must have tbe right of possession, [502] wbicb. must be of some duration, and exclusive. The only-inquiry, therefore, which seems pertinent in this case is, whether the legal title and right of possession of the mortgaged premises remains in the mortgagor, after forfeiture of the condition. For the reason of the rule above stated seems to be, that an action will not 'be sustained against the mortgagee to oust him of possession, when he might immediately turn round, and by an action to foreclose his mortgage regain possession. In an ordinary mortgage, the mortgagor conveys his legal interest in the premises, in the same manner as in a warranty deed, upon condition however, that the conveyance shall be void, if' the mortgagor pay the sum secured, at a day certain. At common law, upon default in this condition, the property vested absolutely in the mortgagee, and the grantor had no further rights, either legal or equitable in the premises. Put courts of equity early began to recognize a right in the mortgagor, called an equity of redemption, which has ever since been regarded with favor, and protected. Put this interest of the mortgagor was of a purely equitable nature, of which courts of law took no cognizance, and if in any State the mortgagor has any legal rights, after forfeiture, they must be solely by virtue of statutes creating them. The only provision of our statute, bearing upon the nature of the estate conveyed, is found in Sec. 11, Chap. 64, p. 696, Comp. Stat., which provides that “ a mortgage of real property is not to be deemed a conveyance, so as to enable the owner of the mortgage to recover possession of the real property without a foreclosure.” This provision does not limit the nature or extent of the interest conveyed by the mortgage. It simply provides that the mortgagee shall pursue a certain course to possess himself of the legal rights acquired under his mortgage. It recognizes a right of possession in the mortgagor after his legal title is extinguished, which is not inconsistent with the view that the mortgagor parts with his legal title, by suffering default in payment according to the terms of the mortgage. In Heyward vs. Judd, 4 Minnesota Reports, page 485, it was held, that when application is made to enforce the mortgage, the court in the exercise of its chancery powers, may order the mortgagor to pay the amount due by a certain day, or be forever [503] foreclosed of all right to redeem, thus carrying out the terms of the contract, etc. Again it is said, “ The power of our courts to decree a foreclosure absolute has never been interfered with by the legislature. The mortgagee may still ask to have this done, subject, however, to the power of the court to order a sale where equity requires it.” This view can scarcely be sustained except upon the ground that the mortgagor’s rights after forfeiture are only of an equitable nature, and such as a court of equity only can take cognizance of. Eor if the mortgagor after forfeiture, has still a legal title to the property, a court of equity could not destroy it, nor could a court rightfully decree, that' the mortgagor had,' when the action to foreclose was commenced, no interest in the property which the court was bound to protect. Nor can it make any difference in this view of the case, whether the mortgage had been actually foreclosed or not. Eor the whole case of the Plaintiff is based upon the assumption that he is the legal owner of the premises, and such is the allegation of the complaint. The Plaintiff does not seek the aid of a court of equity, but rests solely on his legal title, and the case must be governed by the same principles which applied to actions of ejectment under the former system. The principle is well settled that the tenant of the mortgagor, might defend in an action of ejectment by his lessor, by attorning to the mortgagee, after forfeiture of the mortgage, and this rests solely upon the principle, that after the condition was broken, the estate of the mortgagees was absolute at law, Jones vs. Clark, 20 John. 51, and cases above cited. And in Jackson vs. Minkler, 10 John. 480, it was held, that though no regular foreclosure of the mortgage was proved, yet the assignee of the mortgagee being in possession, may protect his possession by it. The same doctrine stated in Jones vs. Clark was re-affirmed in 7 Cow. 21, and 15 Wen. 248, which last case holds that a mortgagee in possession of the mortgaged premises, lawfully acquiredjafter condition broken, cannot be dispossessed by an action of ejectment against him. This is precisely the case at bar. And these decisions were made under a statute of New York, which is in effect the same as that in force in this State. 2 Rev. Stat. N. Y., p. 312, Sec. 57. As, there [504] fore, I do not understand that our statute contains any provision conflicting with the views expressed in the authorities cited, and that the same are founded in reason and good sense, I think the action cannot be sustained, and that the judgment below should be affirmed.