Swift v. Edson

Hosmer, Ch. J.

I will, in the first place, remove from consideration certain controverted points, that the merits of the case may appear more perspicuously.

That the tract of land mortgaged to Hoyt, of which mortgage Sarah Hubbell is the assignee, has not been foreclosed, is unquestionable. Mrs. Hubbell, was no party to the bill for foreclosure; and, of consequence, her equity of redemption was not affected by the decree passed upon it. 2 Pow. Mort. 1055. Smith v. Chapman & al. 4 Conn. Rep. 344 . 346. To the foreclosure of Mrs. Hubbell, unless she pay the incumbrance, there is no objection.

The omission to make David B. Godfrey a party to the bill *535 brought by Mrs, Kent, can have no effect on the foreclosure. He had no interest in the subject, and ought not to have been made a party,

As little effect is attributable to the omission to take possession of the lands foreclosed, either by Mrs. Kent or her executor. In the System of Judge Swift, (vol. 2. p. 440.) the foreclosure alone is considered (and such probably was the law at the time of publishing this work) as taking the estate mortgaged out of the nature of a pledge, and appropriating it in payment of the debt. It is true, that in The Derby Bank v. London, 3 Conn. Rep. 62 . this Court adjudged, that the taking possession of mortgaged premises, by the mortgagee, under a decree of foreclosure, is, by operation of law, an extinguishment of the mortgage debt. The case, as the plaintiff had taken possession, demanded no further extension of the principle; but no doubt existed in my mind, nor, as 1 presume, in the minds of any of the Court, that the appropriation resulted from the decree, and not from any act in pais. In Awdley v. Awdley 2 Vern. 193. it is said, that if the mortgagor be foreclosed, “yet in case the mortgagee be not actually in possession, it (i. e. the mortgaged premises) shall be looked upon as personal estate.” This is one of those subjects, in which, by the well known practice in this State, and universally received opinions, there is little harmony with the determinations in Westminster-Hall. To a foreclosure we attribute a stable and conclusive effect, very different from the doctrine on this subject in the English court of chancery. Foreclosures, for example, will be opened for cause; but not for the reasons which are held sufficient, by the court last alluded to. If there are subsequent incumbrancers, not parties, the decree is opened in the English chancery; but here, it is conclusive. Smith v. Chapman , 4 Conn. Rep, 344. So, in England, a mortgagee, after a foreclosure, may proceed on his bond or other collateral security; (2 Pow. Mart. 1075.) but I presume no such doctrine would be sanctioned by this Court. In short, the decree of foreclosure, obtained deliberately and voluntarily, by the mortgagee, is, from its nature, the highest evidence of an appropriation of the pledge; and to its force nothing is added, by the comparatively feeble act of taking possession. This principle is just, convenient and in prevention of future litigation.

Notice to Mrs. Kent, by Mrs. Hubbell, of the assignment to her, by Hoyt, of his mortgage, the latter was under no legal ob *536 ligation to give. It was at her peril that she made the proper parties to her bill of foreclosure.

The pecuniary legacies bequeathed by Mrs. Kent, were not chanced on her real estate. There always has existed a great distinction between a charge on the realty, whether it is for the payment of debts or of legacies. As to the former, the courts hare gone on a slight implication and moral principle but as to legacies, there must be a clear manifest intention that the devisee or heir shall take subject to the legacies. Knightly v. Knightly, 2 Ves. jun. 328. In this case, it was determined, that a last will, in which the testator directed “all his legal debts, legacies and funeral expenses to be fully paid and discharged,” was no charge on the real estate devised; and yet the personal property was insufficient for this purpose. Charges on land in favour of a legacy are usually made by the expression “to be paid out of my lands” or in other form of phraseology manifesting a dear intention; but the expression in a last will, made by a testatrix, who had sufficient personalty to pay all her pecuniary legacies, that they should be paid by her executor, out of her estate, is nothing more than what the law implies. The legacies were payable out of Mrs. Kent’s personal estate, which, at the execution of her will, was an abundant fund for this purpose; and hence she had no motive to subiect her lands to an incumbrance. It is too obvious to be disputed, that the present insufficiency of the personalty has arisen from a conversion of personal into real property, in a manner not anticipated by the testatrix. She expected, that debts secured by mortgage would be paid; in which event, the legacies would rest on a sufficient fund; and if she believed that the appropriation of the mortgages, and rendering the estate real, would make no difference, she misconceived the law. But this misconception the court cannot relieve against, unless her last will had given authority, which clearly it has not. It is likewise peculiarly observable, that the legacies are made payable, by Mrs. Kent's executor, out other estate. Now, although the word estate is very comprehensive, where the subject matter demands it, and includes real as well as personal property; yet where the executor is directed to make payment out of a fund, it must be intended out of that fund, over which he has controul. If it be said, that the executor, by order of sale obtained from probate, may dispose of real estate to satisfy a legacy ;—a remark, which, from the peculiarity of our system on this subject, I should not be disposed to deny; and that *537 the direction to the executor to make payment deriving his fund from the real estate, is, therefore, supposeable; the result would be conclusive against the plaintiff. The competency of the probate jurisdiction would shew, that he has adequate remedy at law. I conclude, then, that the pecuniary legacies are payable out of the personal estate of Mrs. Kent only; and that if more than this was intended, by the testatrix, the exercise of the jurisdiction of a court of chancery is unnecessary.

What, then, is the nature of the estate mortgaged to Mrs, Kent ?

In respect to all the tracts of land, except the piece of 75 acres, in which there is a right of redemption in Mrs. Hubbell, they were foreclosed by her, in her life-time, after the publication of her last will, and converted from personal into real estate. So far as relates to these, they are not a fund within the power of the executor, (the plaintiff) nor applicable to the discharge of pecuniary legacies. They have descended to the heirs of Mrs. Kent, unincumbered by any bequest in her will.

As to the tract of 75 acres, it has never been foreclosed; hut in relation to one of the mortgages, there still is existing a right of redemption in Mrs. Hubbell. Until complete foreclosure there is no appropriation of the pledge, or extinguishment of the debt. This is personal property still ; the debt is due to the executor ; and he alone can foreclose the pledge. Roath v. Smith, 5 Conn. Rep. 133 . In this precise condition, a transfer of the title to the plaintiff as trustee, unless Mrs. Hubbell should redeem, to dispose of the property, and apply the avails, first in payment of the debt, and then in satisfaction of the pecuniary legacies. is within the competency of this Court. It is the appropriation of personal property to a legal purpose.

I would grant, a foreclosure, and the prayer of the bill, as to the 75 acres : and would dismiss the bill as to the residue.

Peters and Bristol, Js. were of the same opinion ; Brainard, J. being absent.

Bill granted in part, and dismissed as to the residue.