Rigney v. Lovejoy

Parker, C. J. The principles which must govern this case have been stated to a very considerable extent in Southerin vs. Mendum, 5 N. H. Rep. 420; Smith vs. Moore, (11 N. H. Rep. 55,) and several other cases decided in this court. Not a little of the difficulty which has existed in relation to conveyances and transfers by means of mortgages, has arisen from a supposition that the mortgagee must be considered as the owner of the legal estate from the time of the execution of the mortgage, and a belief that rules should be — 251 — applied to conveyances in mortgage, similar to those which govern other transfers of land by deed. JÍ3ut a careful consideration of the nature and qualities of a mortgage has shown, that, until enforced by the mortgagee, it does not possess some of the most prominent characteristics of a transfer of real estate, or is not attended with some of the usual results which ordinarily accompany a conveyance of land, and that it cannot therefore be subjected to all the rules which govern such conveyances^ Thus, before an entry under the mortgage title, or an assertion of it in some other mode, the mortgager is regarded as the owner of the land, notwithstanding the mortgage. 5 N. H. Rep. 420. ^The mortgagee until that time has no interest in the land which can be taken by his creditors. 5 N. H. Rep. 430; 6 N. H. Rep. 559, Sissons vs. Bicknell; 9 N. H. Rep. 20, Kelly vs. Burnham. (Even if he have obtained judgment on his mortgage. Ditto 69, Glass vs. Ellison. Nor any tille to the rents and profits, 5 N. H. R. 529, Cavis vs. McClary. Nor is he entitled to notice of the laying out of a highway over the land, or to have the damages assessed to him. 11 N. H. Rep. 298, Parish vs. Gilmanton. Nor has he any interest which he can convey separate from the debt. The assignment of the mortgage deed, without a transfer of the debt, conveys nothing. And so of an absolute conveyance of the land by a separate deed before entry. 5 N. H. Rep. 420; 6 N. H. Rep. 205, Bell vs. Morse; 11 N. H. Rep. 62, andauth. cited ; Ditto 274, Ellison vs. Daniels. (If necessary to the performance of the condition, or if such may be inferred as the intention of the parties, the mortgager may hold possession, and the mortgagee cannot enter until the condition is broken or waste done. 2 N. H. Rep. 453, Hartshorn vs. Hubbard; 9 N. H. Rep. 117, Dearborn vs. Dearborn ; Ditto 201, Flanders vs. Lamphear. 4f the mortgagee die, the mortgage goes to the administrator, as personal estate, and not to the heir, except after foreclosure. 2 N. H. R. 72, Bickford vs. Daniels. — 252 — It will not pass by the mortgagee’s will of real estate, and his widow will not be entitled to dower, if there be a redemption of the mortgage. ["Bat the widow of the mortgager, notwithstanding he may have had merely an instantaneous seizin, is entitled to dower against any one except him who holds under the mortgage itself. 6 N. H. Rep. 25, Cass vs. Martin; 10 N. H. Rep. 504, Bullard vs. Bowers. And not only will payment of the money before the day operate to defeat the conveyance, but, by our statute, payment, or tender of performance, with the damages and costs occasioned by the non-performance, after the day, but before foreclosure, will have the same operation. N. H. Laws (Ed. 1830) 486. Payment of the debt, by a third person having an interest to protect, may operate as an assignment, even if the mortgage be formally discharged. 7 N. H. Rep. 99, 101, Robinson vs. Leavitt, and auth. cited. And an assignment in form may operate to pass the legal estate, or as a discharge of the mortgage, according to the justice of the case and the just intent of the parties. 7 N. H. Rep. 100; 8 N. H. Rep. 429, Bailey vs. Willard; 5 N. 11. Rep. 252, Willard vs. Harvey; 3 N. H. Rep. 294, Taylor vs. Bassett. And a surety may be entitled, by way of subrogation, to the benefit of a mortgage, executed by his principal. ^The principles thus stated show, very conclusively, that before entry by the mortgagee, and until he elects to enforce the mortgage against the land, it is only a chattel interest; a security for the debt, or a eharge upon the land. 5 N. H. Rep. 420; 9 N. H. Rep. 55. ■\But it is necessary that the mortgage should be executed in the first instance with all the formalities essential to the conveyance of real estate, in order that it may so operate whenever the mortgagee, or the person holding his right, is desirous of enforcing his security. It is a potential conveyance of the legal estate; and whenever he sees fit to make that election, the mortgage becomes, in his hands, a convey — 253 — anee of the legal estate for all purposes necessary to the protection of his interest, and to enable him to avail himself of the security,, Thus, whenever he elects to proceed upon the mortgage, he is by it invested with the seizin of the estate ; 1 N. H. Rep. 169, Brown vs. Cram. And the whole legal estate of the mortgager. 9 N. H. Rep. 69 ; 11 N. H. Rep. 55. And so for the prevention of waste and the diminution of the security, and to enable the mortgagee to take the rents and profits towards the satisfaction of his debt. 5 N. H. Rep. 420; 11 N. H. Rep. 274. /It is but a consequence of these views in relation to the nature of mortgages, to hold, that until the assertion of a right against the land under the mortgage, the chattel interest, or security which the mortgagee holds, may be assigned without deed, — that the security for the debt (which is but an incident to the debt, and ceases upon the extinguishment of the debt,) will pass by a parol transfer of the debt, (5 N. H. Rep. 420,) — and that an assignee of the debt may therefore be assignee of the mortgage without auy conveyance by deed or writing, and may then enforce the security in his own name, in the same manner that the mortgagee himself might have done, and with the same effect.) /'A deed is not required to transfer a security, which constitutes no interest in the land which can be taken by creditors ; which does not entitle the holder to the rents and profits, or to damages, if a portion of the land be taken for a highway ; and which, in fine, until the assertion of it against the land, under the deed, confers upon the grantee none of the rights of an owner. Until such time as it is to be regarded and treated as a conveyance of the legal estate, the requisites for the conveyance and transfer of real property do not attach to it; and it is for this reason that it may be assigned without them/ |When it is transferred by operation of law, as in the case of payment of the mortgage money by a third party having an interest to protect, there is of course no deed. — 254 — ^Nor is there any necessity that a deed should be required for the transfer of this interest., in order to protect the rights of the mortgager, or of third persons, any more than it is necessary that there should be a deed in order to a valid conveyance of the debt upon which it is dependent. The mortgager cannot lose his estate, or his rights, without notice who holds the title. And creditors of the mortgagee, or his assignee, cannot seize it, and have therefore no occasion for notice who holds it^i jT’he mortgage having been duly executed and recorded, and the charge having been thus fixed upon the land, and notice of it having been given by the record, all persons who may deal with the mortgager are put upon enquiry whether it still exists or has been satisfied. And in pursuing this enquiry there can be,but little difficulty in ascertaining who holds it, if it exist: — no greater than ordinarily arises in an enquiry who holds the debt, for the purpose of ascertaining to whom payment is to be madey If it has not been recorded, and there is no notice, third persons cannot be affected by it. In the present, case there was an assignment of the debt, by a transfer sufficient to authorize the assignee to recover it to his own use; and there was also an assignment of the mortgage, in writing. This latter fact, however, may be regarded as unimportant. If the debt were not transferred in such a manner that the assignee could, under the rules of law, maintain a personal action, in his own name, upon the note, no such difficulty existed in relation to the assignment of the mortgage by means of the transfer of the debt. An assignee of a mortgage may maintain an action in his own name upon it. And we are not aware of any distinction in this respect, by reason of the particular mode of the assignment, whether it be by deed, or by parol. ^Nor does any good reason occur to us why we should make a distinction, in this respect, and hold that an assignment by deed would authorize the assignee to maintain an action in his own name, — 255 — while one who became assignee of the mortgage, as an incident, by reason of a transfer of the debt, must bring his action in the name of the mortgagee, or some prior assignee. It is sufficient that the mortgage is assigned, so that the assignee is entitled to the benefit of it.] When that is done, he may assert his right in his own name, in a real action upon it. itAnd this notwithstanding the debt is not negotiable, or is not assigned in such manner that he can maintain a personal action, in his own name, upon that. It has been settled, in Massachusetts, that an assignee of a mortgage may maintain an action in his own name upon it, notwithstanding judgment has been recovered upon the note in favor of the mortgagee. And the case shows that it is not necessary that there should be a right to maintain an action upon the debt, and another upon the mortgage, in the name of the same person. It is enough that he has the right to both, to give him a right to enforce the title to the land in his own name. 6 Mass. R. 239, Gould vs. Newman, When Willson, the assignee in this case, saw fit to assert a title to the land, for the purpose of availing himself of the security, he should have done it in his own name. The security had been transferred from Lovejoy, the mortgagee, to him, and no title could afterwards be set up in Lovejoy, for he had no interest to protect, nor was he a trustee, holding the land, or the mortgage, for the benefit of his assignee. The ruling of the court was therefore erroneous, and the Judgment must be reversed.