Opinion
July Term, 1851
W. Rutherford, for appellant.
H.F. Clark, for respondent.
The 30th section of the act authorizing the loan of certain moneys, c., passed April 4, 1837, provides, "that if the "borrower shall neglect to pay the yearly interest and the "principal of the loan when due, on one of the days on which "the loan commissioners are directed to attend at their office "for the purpose of receiving it, then, and in either case, the "commissioners shall be seized of an absolute and indefeasible "estate in fee in the mortgaged premises, to the uses in the act "mentioned, and the mortgagor shall be utterly foreclosed and "barred of all equity of redemption, any law, usage, custom "or practice in courts of equity, to the contrary notwithstanding. "But the mortgagor, his heirs or assigns, shall be "entitled to retain possession of the mortgaged premises until "the first Tuesday of February thereafter, and to redeem "the same as hereinafter provided."
By the 31st section, the commissioners are directed to advertise and sell at public vendue, on the first Tuesday of February, after the default, and convey the lands to the highest bidder; and the purchaser shall hold and enjoy such estate in said lands as was conveyed by the mortgage to the commissioners, discharged of the equity of redemption, and all other incumbrances subsequent to the mortgage. The 33d section provides, that if on the sale aforesaid, no person shall bid the amount due, together with the expenses of the sale; or if the purchaser shall not pay for the same, in every such case, the commissioners shall enter and take possession of said lands, and let the same for the benefit of the state, until the third Tuesday of September, when they shall again, after six weeks notice, offer the lands for sale, as before mentioned. They may in their discretion, before the premises are struck off, postpone the sale and have the lands appraised according to the 34th and 35th sections, and if on the sale, the amount due, c., is not bid, or the purchaser fail to pay, they are directed to bid the amount appraised not exceeding the amount due, with costs, in behalf of the people. But if the mortgagor, or his assigns, shall, at or before the sale, pay to the commissioners the amount due on the first Tuesday of October then next, with costs and charges of foreclosure prescribed by the act, c., then the title in fee to the premises shall revert to and reinvest in the mortgagor or his assigns, and the commissioners shall accept the money, and permit the mortgagor, c., to take possession and to hold until a subsequent default. All purchases contrary to this section to be void.
The sale of the mortgaged premises by one loan commissioner, in the absence of his associate, was irregular, and no title passed to the defendant as purchaser. This was so decided in Powell v. Tuttle, (3 Comst. 396,) and the question must be considered at rest in this court.
The defendant, notwithstanding, insists that by the default of the mortgagor in paying interest, the loan commissioners became seized in fee of the mortgaged premises, and that consequently the plaintiff, who must recover on the strength of his own title, cannot maintain this action.
It is apparent from the provisions of the statute, to which reference is made above, that the mortgagor and his assigns can be deprived of the possession of the mortgaged premises only by sale, on the first Tuesday in February after the default, or if that is impracticable, then by the entry and devise of the lands by the commissioners, as provided in the thirty-third section.
The commissioners in this case have neither sold, entered upon, or leased the lands in question.
They became seized in fee on the default of the mortgagor, "to the uses in the act mentioned," that is, for the purposes there specified, and to enable them to distribute the proceeds arising from the sale of the premises, according to the 39th section of the act.
The reservation of the possession as well as the right of redemption after default, were both legal rights secured to the mortgagor and his assigns, by the express provisions of the statute. The sale attempted by a single commissioner was void. The premises have never been offered for sale at "public vendue," as directed by the thirty-first section, nor have they failed to bring "the amount due, together with the "expenses of the sale," as provided by the thirty-second. These are both conditions precedent to a right of entry by the commissioners.
They could not divest the mortgagor of his possession upon a mere default without being trespassers, and a void sale would confer no greater right upon the purchaser. The fee of the lands being vested in commissioners by the 30th section, was therefore consistent with the existence and continuance of a right to the possession in the mortgagor. The provision of the 30th section, by which the mortgagor is " entitled" to possession, is, I believe, peculiar to the act of 1837. The 18th section of the act of 1786, the 13th section of the act of 1792, and the 15th section of the act of 1808 are nearly in the same words.
The 30th section of the law of 1837 contains all that is common to the sections above enumerated, with the additional clause securing the possession to the mortgagor.
Under the former statutes, and in cases arising before the revision of 1830, and the modification of the law in relation to express trusts, it was held that the default of the mortgagor, ipso facto, vested an indefeasible estate in the loan officers; and that they were competent to convey without regard to the power given them by the statute. ( Jackson v. Voorhees, 9 J.R. 129; Sherill v. Crosby, 14 J.R. 360; Denning v. Smith, 3 J. Ch. R. 338; 8 Cowen, 51; 8 Wend. 659.) The mortgagor from the time of his default, was but a tenant at sufferance, without any legal right to the land or the possession. Of course an outstanding title of this sort, in the trustees, would be a perfect bar to a suit for the possession brought by him or those claiming under him, subsequent to the execution of the mortgage. But the statute in question, declares that he shall be "entitled to retain possession until," c. The cases above cited have therefore no application to the one before us.
The effect of the statute is, upon the default of the mortgagor, to invest the trustees with a fee for a special purpose, subject to a right of redemption and to the possession of the mortgaged premises by the mortgagor or his assigns, until the lands have been legally sold by the commissioners, or it has been ascertained by actual experiment in the manner prescribed, that no sale can be effected for a sum equivalent to the mortgage debt, interest, and costs. ( Coms. c. v. Chase, 6 Barb. S.C.R. 40.) Against all the world in the mean time, but the commissioners, the mortgagor is the owner. He is entitled to the rents and profits, and to redeem without invoking the aid of a court of equity, until an actual conveyance or entry, made in pursuance of the statute, by the commissioners. He has at least a possessory title, which will authorize him to maintain this action against a mere intruder.
But it is said that the attempted sale, although inoperative as a sale of land, was equivalent to an assignment of the mortgage.
The commissioners however act under a special authority, which must be strictly pursued. ( Sherwood v. Reade, in Error, 7 Hill, 433.) No express power is given to them to assign the mortgage, nor is it an incident to the authority granted. The exercise of such a power would require the concurrence of both the commissioners, and but one acted in this case. Again the intention of the acting commissioner was to sell, and of the vendee to purchase, the mortgaged premises.
The debt was to be satisfied, not assigned or kept on foot for any purpose. If the object in view of both parties has failed from a neglect to pursue the directions of the statute, the remedy, if any exists, is in equity; and a mere equity, if it could be invoked against the plaintiff, is no bar in ejectment.
Without, therefore, entering upon the questions as to the power of the commissioners to sell on credit, or whether, since the revision of the statute, they take the fee in the mortgaged premises as trustees for the state and the mortgagor, or a power in trust, as supposed in Brown v. Wilbur, (8 Wend. 661,) the judgment must be reversed for the reasons above suggested.
Judgment reversed.