Stark v. Brown

Upon the death of a mortgagor of real estate, the equity of redemption descends to his heirs, and is not barred by a sale of the land under a decree of foreclosure in a suit to which the administrator only of the mortgagor is made defendant. There was nothing in the statutes in force in the territory of Wisconsin, in 1842, to change this rule. A sale under such decree will, however, operate as au assignment to the purchaser, of the interest of the mortgagee in the mortgaged premises. The application of this principle is not affected by the fact, that the purchaser at such sale was one of the administrators of the holder of the mortgage, and, as such, one of the plaintiffs in the suit for its foreclosure. Where, after the sale to such administrator under such decree, A, in a suit for that purpose, against such administrator and the widow and heir of such holder, obtained a decree, adjudging that lie was, at the time of such foreclosure suit and sale, the equitable owner of said mortgage, and was entitled to a conveyance from them of the mortgaged premises, and of all their interest therein, and quit-claim deeds for said premised were accordingly executed by them to him, and he afterwards made a warranty deed for said premises to B, who made a like deed therefor to C: Held, in ejectment hy the heirs of the mortgagor against C, that the above mentioned decree and deeds, although the latter contained no reference to the mortgage or mortgage debt, operated as a trwmfer to C of the interest which the mortgagee had in said premises, so that, after entry, C stood in the position of a mortgagee in possession, after default in the payment of the mortgage debt, and oould not be evicted in such action.

APPEAL from tbe Circuit Court for Milwaukee County. Action by David Drake and J. L. Stark, for tbe recovery of an undivided fourth of certain land in'Milwaukee county. Tbe defendant admitted bis possession of tbe land, and claimed title thereto. On tbe trial, tbe plaintiff proved that one Pliny Drake died intestate at Milwaukee, in April, 1838, seized in fee of tbe land in controversy, leaving , surviving him bis mother and nine brothers and sisters, bis sole heirs at law. Of these heirs, David Drake was one, and bad received from bis mother and six of bis brothers and sisters a quit-claim deed -for their interest in said land, and bad after-wards quit-claimed one-half of Ms entire interest therein to bis co-plaintiff, Stark. The defendant proved that letters of administration of tbe estate of Pliny Drake were granted to one Aldrich, in. November, 1888; that tbe inventory of said estate, filed by tbe administrator, showed personal assets to tbe amount of $94 84; that tbe report of tbe commissioners appointed to bear and adjust claims against said estate showed debts amounting to $393 89, besides expenses of administration; that among tbe claims allowed by said commissioners was an account of one William N. Gardner, against tbe deceased, in which tbe aggregate amount of tbe items debited was $269 38, among which items was tbe following: “ Balance due on note for $200, dated Oct. 14th, 1836, secured by mortgage, $206 53and tbe amount of tbe credits was $159 21, leaving a balance due to said Gardner of $110 17. Tbe administrator testified that be bad never closed up tbe estate, because tbe land having been sold on foreclosure, there was nothing left for payment of tbe debts. Tbe defendant then read in evidence a mortgage, executed by Pliny Drake to one Isaac H. Alexander, upon an undivided fourth of the quarter-section in which the land in con .troversy is situate, dated October 14th, 1836, to secure the payment of $400, according to the tenor of two notes of that date, executed by him to the said Alexander; also an endorsement upon said mortgage, dated Oct. 81st, 1836, by which it was recited that said Alexander, for value received, did thereby transfer to said William N. Gardner all his interest in said mortgage, and the notes accompanying the same, and did guarantee the payment of the money secured to be paid by said mortgage and notes, and that not more than $61 had been paid by the mortgagor on account of the moneys secured thereby. The defendant then offered to read in evidence the record of a suit in equity in the district court for Milwaukee county, in which Lindsay "Ward, Maria Gardner, and William B. Sheldon, administrators of William N. Gardner, deceased, were complainants, and said Aldrich, administrator of Pliny Drake, deceased, was the sole defendant, and purporting to be a suit for the foreclosure of the said mortgage executed by Pliny Drake to said Alexander; and also a deed for said mortgaged premises, made by a master in chancery of said court, to Lindsay Ward, the purchaser at the sale under the decree in said suit; offering at the same time, to show the decease of said William N. Gardner and the appointment of said complainants as his administrators. To the reading of this record and deed in evidence the counsel for the plaintiff objected; the court sustained the objection, and the defendant excepted. The defendant again offered to read the record of said foreclosure for the purpose of showing that the title of the assignee of the mortgage vested in the purchaser under the foreclosure, and to connect himself with the title of such purchaser by various mesne conveyances, but the court ruled that the evidence was inadmissible for that purpose, and the defendant excepted. The record thus excluded sets forth the bill of foreclosure filed by the administrators of William N. Gardner, against said Aldrich, as the administrator of said Pliny Drake; the proof of service of process; a decree for the sale of said mortgaged premises, rendered in November, 1842 (without any direction that the complainants might purchase at. such sale); tbe report by tbe master of bis sale and conveyance of tbe mortgaged premises to Lindsay Ward for $100, and tbe confirmation of said sale by tbe court. Tbe defendants then offered proof that Lindsay Ward, Maria S. Gardner and William B. Sheldon were duly appointed administrators of William N. Gardner, deceased, before tbe commencement of said foreclosure suit, wbicb was admitted by tbe court, (tbe plaintiffs objecting to it as irrelevant), and also offered in evidence tbe record of a suit in chancery in tbe Hacine district court, in wbicb one Palmer Gardner was complainant, and Lindsay Ward, Thomas Wrigbt, Maria S. Wrigbt and William S. Gardner were defendants, to tbe admission of wbicb tbe plaintiffs objected, but tbe court overruled tbe objection, and tbe plaintiffs excepted. This record was in substance as follows: Tbe complainant, Palmer Gardner, alleged in bis bill, (wbicb was filed in 1846,) that about tbe 31st of October, 1836, bis brother, William N. Gardner, held as bis agent, an agreement between him and one Isaac H. Alexander, and on bis behalf and towards tbe payment of a balance due on said agreement, received, about that date, from said Alexander, tbe assignment of tbe mortgage hereinbefore mentioned as executed by said Pliny Drake to said Alexander, and of tbe debt secured thereby; that said William afterwards received from said Drake $178 on said debt, and accounted therefor to the complainant, but died soon afterwards, leaving said Maria S. bis widow, and William S. Gardner, an infant, bis only child; that bis administrators, finding said mortgage and notes among bis papers, supposed them to be a part of bis estate, and, in 1842, commenced a suit for tbe foreclosure of said mortgage in tbe district court for tbe county of Milwaukee, and upon a decree rendered in such suit, said mortgaged premises were sold to said Lindsay Ward, and the usual conveyance therefor made to him by tbe master; that said purchase was made by said Ward on behalf of tbe estate of said William N. Gardner; that in August, 1843, tbe said administrators made a settlement of said estate, with tbe probate court of Milwaukee county, and distribution of tbe personal estate was then made, and, among other things so distributed, was tbe land in controversy, one-third thereof to said Maria, and two-_ thirds to said William S., the same being represented by said administrators to be the proceeds of personal estate held by said Ward in trust for said heirs, to be distributed as such; that no conveyance had been made by said Ward of said land, and that said Maria and William S. had never taken possession thereof; that the complainant was entitled to the benefit of said foreclosure and sale, and to a conveyance of said land, upon payment of the amount due by him to the said estate for the services, disbursements, &c., of said decedent, which were admitted to amount to $150 (which he averred his readiness to pay), and that said Maria was at that time the wife of one Thomas Wright; Prayer, that an order be made directing that said Lindsay Ward, Thomas and Maria S. Wright, and said infant, William S., by his guardian, should convey said land to the complainant, on the payment of said sum of $150. The defendants were served with process, a guardian ad litem appointed for the infant, and such proceedings were thereupon had, that on the 20th of April, 1846, said court decreed that Lindsay Ward and his wife, the said Thomas and Maria S. Wright, and the said William S. Gardner, by his guardian ad litem, should execute quit-claim deeds of said land to said Palmer Gardner, upon his payment of said sum of $150 to said Thomas Wright, on behalf of said Maria S. Wright, and to said infant ; that said complainant was entitled to all the rights and interest of the defendants in said lands; and that the deed executed by the guardian of said infant, should be of full force when ajoproved by said court, or a master thereof. The defendants also read in evidence a quit-claim deed from Lindsay Ward and wife to Palmer Gardner, for the undivided fourth of the quarter section embracing the land in controversy, dated Jan. 22,1846, and alike deed to Palmer Gardner, for the same land, from Tiros. S. Wright and Maria his wife, dated April 20, 1846, and a like deed to Palmer Gardner, for the same land, from William S. Gardner, by Iris guardian appointed for that spurpose, dated April 20, 1846, and indorsed “approved” by a master in chancery of said Racine district court, and a warranty deed for the same land, executed by Palmer Gardner to J. E. Gruenbagen, dated December 19th, 1846, and a like deed for tbe same land from said Gruenbagen and wife to tbe defendant, dated December 7th, 1852; to tbe admission of each of wbicb deeds tbe plaintiffs excepted. Tbe circuit court instructed tbe jury, that “under tbe decree in said equity suit in Racine county, and tbe deeds executed by Lindsay Ward and wife, Thomas Wright and wife, and William S. Gardner, by bis guardian,’ respectively, to Palmer Gardner, and tbe deeds from Palmer Gardner to Gruenbagen, and from Gruenbagen to Brown, tbe defendant Brown acquired all the rights of mortgagee under said mortgage from Pliny Drake to Alexander, and being in possession in tbe right of mortgagee, could not be ousted by an action at law in tbe form attempted in tbis case to wbicb instruction tbe plaintiffs excepted. 1. Tbe foreclosure proceedings against tbe administrator of Pliny Drake, and tbe master’s deed to Ward, were a nullity. Tbe heirs of tbe mortgagor were necessary parties to sucb a suit. Story’s Eq. PI, § 196, and cases there cited; 2 Barb. Cb. Pr., 176. By tbe statutes then in force in -tin's territory real estate descended to them, and therefore it vested in them immediately upon tbe death of their ancestor. Greenl. Cruise, _ title 29, chap. 2, § 1. Tbe administrator is not a proper ‘party to sucb suits, except (in some states) to enable tbe complainant to obtain a judgment for payment of a deficiency out of tbe estate in bis bands, (2 Barb. Cb. Pr., ubi supra; Story’s Eq. PL, 182-196; Leonard vs. Morris, 9 Paige, 90), and in tbis state no sucb judgment could be rendered, tbe statute having provided a different method for adjusting sucb claims. Tbe administrator could not redeem (1 Hill, on Mort., 864; Story’s.Eq. PL, 182; 2 Story’s Eq, Jur., 291; 4 Kent’s Comm., 162; 2 Barb. CL Pr., 193-4; 9 Johns., 611); nor was be, under our statutes prior to 1850, entitled to tbe possession, or tbe rents of tbe real estate. Judgment against him could not bind sucb real estate. Tbe court therefore bad no jurisdiction in these foreclosure proceedings; tbe beirs were not barred of their equity of redemption •, nor could the judgment operate to assign the mortgage toWard, or have any other effect 2. The quit-claim deed executed by Ward and wife to Palmer Gardner, could not convey his interest, as administrator, in the debt secured by the mortgage. 3. The deeds from Wright and wife, and William S. Gardner, to Palmer Gardner, conveyed no interest. Their deeds purporting to convey the fee of the mortgaged land, without reference to the note or to their interest as mortgagees, did not transfer that interest. Such an interest, before foreclosure, or possession taken, is not realty. 1 Hill, on Mort., chap. SI. It does not descend to the heirs, but goes to the personal representatives. 1 id., p. 249. It cannot be seized on attachment or execution. 4 Conn., 235. It is a mere lien on the land, a mere incident of the debt. 4 Conn., 235; 6 id., 159; 2 Burr., 978; 1 Branch, 110; 11 John., 534; 1 Pow., 252, n; 5 N. EL, 432. An assignment of the mortgage need not be in writing, (5 Rawle, 242 ; 3 Johns. Cases, 329; 1 John., 580; 4 id., 43; 11 id., 534); but the transfer of the debt carries with it, as an incident, all interest in the mortgage (1 Hill, on Mort., chap. 11; 4 B. Monroe, 532; 8 id., 287; 5 Cow., 202; 1 Penn., 280; 13 N. H., 249; 5 id., 420; 9 S. & M., 448; 10 id., 631, 120; 1 John., 580; 2 Burr., 978; 1 Blackf, 137; 10 Vt, 294); payment or tender of the debt, even after due, before foreclosure or entry by the mortgagee, extinguishes the lien, (26 Wend., 541; 18 John., 7; 5 Cow., 202 ; 2 Harris & McH, 17; 3 id., 399 ; 10 Ohio, 433 ; 6 Hill, 65; 2 Greenl. Cruise, p. 121, note); and after srrch payment, an assignee of the mortgage acquires no title by foreclosure and purchase at the sale. 5 Hill, 272. These doctrines are sustained by the decisions of this court. Fisher vs. Otis, 3 Okand., 83-95; Martinmu vs. McCollum, 4 id., 153; Croft vs. Bunster, 9 Wis., 503; Cornell vs. FRchens, 11 Wis., 353. “ A mortgage does not carry with it the debt, but the debt carries with it the mortgage.” 4 Chand., supra. Hence an assignment of the mortgage, or a conveyance of the land, by the mortgagee, without any transfer of the debt, is a mere nullity. 1 Kent’s Comm., 194, and note; 1 Hill, on Mort.; Jaclcsonvs. Willard, 4 John., 41; Jackson vs. Bronson, 19 id., 325; Huntington vs. Smith, 4 Conn., 235; Wilson vs. Troup, 2 Oow., 195; Bell vs. Morse, 6 N. H., 205 ; 11 274; id., 298; 15 id., 145; 4 Foster, 484 ; 5 id., 425; 32 Me., 175; 4 Florida, 283; 9 Mis., 280; 2 Halsted’s Cb. B., 219; 4 Iowa, 434 ; 5 Cal., 334. Some cases in Mass, bold that where a second grantee of an equity of redemption bas procured a quit-claim from tbe mortgagee to himself, it will operate as an assignment and not as a discharge of the mortgage; but these cases depend on the principle in equity that upholds the security in such case for the protection of the releasee against the intervening title of the first grantee. Hunt vs. Hunt, 14 Piet., 374; 1 Hill, on Mort., 496 et seg.; Garll vs. Butman, 7 G-reenl., 102. Counsel also cited and distinguished Oroolcer vs. Jewell, 31 Me., 306; Givan vs. Doe, 7 Black., 210 ; and Phillips vs. Bqnh of Lewistown, 18 Penn., St., 394. 4. The intention .of all parties in the suit brought by Palmer Gardner, was to perfect the absolute legal title to the land in Palmer Gardner, and not to assign the note and mortgage to him. Notwithstanding the decree in that suit, the note, if not paid, remained unsatisfied among the assets of ¥m. N. Gardner’s estate, and the mortgage, as a security therefor, remained undisturbed. Except as the decree authorized a conveyance for the infant, the deeds executed in pursuance of it, stand on the same footing as similar deeds from the same parties, without such decree, and are therefore of no effect. 5. Even if Palmer Gardner had become assignee of the note and mortgage, still his conveyance of the land, by warranty deed, to Gruenhagen, and that of the latter to Brown, neither of which referred to the note or the mortgage, could not have operated as an assignment of them. See authorities supra. 6. Not only were the notes not produced, but there was no evidence that either of them remained-unpaid, and no trace of them since 1842. More than twenty years had elapsed from the time they fell due, before the commencement of this action. Was not the presumption conclusive from the lapse of time, that they were paid ? 1. The foreclosure is not void, and cannot be impeached collaterally. The heirs had no more interest in the real than in tbe personal estate, until tbe final order of tbe court for distribution. E. S., 1839, pp. 301, 302, 304, 307, 316. That tbe administrator represented tbe real estate was settled in Grignon vs. Astor, 2 How. (S. C.), 319, 338. Since tbe late law in England, subjecting real estate to tbe payment of debts, it bas been beld that tbe beirs are not necessary parties for that purpose. Story vs. Fry, 1Y. & C. New E, 603; Bridges vs. Hinxman, 16 Simons, 71/ Telfair vs. Boe's Ex’rs, 2 Branch, 407; Collins vs. Griffith, 2 Pr.- "Williams, 313; Madox vs. Jaclcson, 3 Atkyns, 405; Story’s Eq. PL, §§ 163 and 176. 2. But if tbe foreclosure failed to bar tbe beirs of their equity of redemption, still tbe defendant, as assignee of tbe mortgage in possession after default, cannot be disturbed by ejectment. (1.) That such assignee cannot be thus disturbed is beld in Post vs. Arnott, 2 Denio, 344; Merritt vs. Lambert, 7 Paige, 346; Parsons vs, Welles, 17 Mass., 419; 5 Pick., 233; 16 How., 580; Van Ness vs. Hyatt, 13 Peters, 298; Jaclcson vs. Hull, 10 John., 480; Astor vs. Hoyt, 5 "Wend., 617; Phyfe vs. Riley, 15 id., 248; and in this state, Gillet vs. Eaton, 6 Wis., 30; Tallman vs. Ely, id., 244. (2.) Tbe purchaser, under tbe foreclosure sale, acquired tbe rights of such an assignee. Frische vs. Kramer's lessee, 16 Ohio, 125. Tbe mortgagee, being a party to tbe record, is, as between himself and tbe purchaser, estopped from denying tbe effect of tbe decree and sale, and tbe purchaser obtains all the rights of tbe mortgagee by estoppel. Tbe case of Watson vs. Spence is overruled in this state by Ely vs. Tallman, supra. (3.) Palmer Gardner, having been tbe real equitable owner of tbe notes and mortgage of Pliny Brake, tbe district court by its decree established bis title to “ all tbe rights and interest beld by tbe defendants ” in that suit. (4.) Tbe subsequent warranty deeds from Palmer Gardner to Gruenhagen, and from tbe latter to Brown, must be beld effectual to convey to tbe defendant tbe mortgage interest.- Tbe grantors having attempted to convey tbe absolute fee which they supposed themselves to possess, are estopped from denying that they conveyed tbe less interest which they really bad. A deed by tbe person owning tbe mortgage, of the whole mortgaged premises, conveys tbe mortgage interest. Wilson vs. Troup, 2 Cow., 195; Gillet vs. Eaton, and Tollman vs. Ely, supra. A mortgagee, after default, Has a legal estate in the land, which may be conveyed by deed, subject to the debt- or’s right of redemption. See cases cited above, under (1.) See also Philips vs. Banlc of Lewistown, 18 Penn. St, 394; Givan vs. Doe, 7 Blackf., 210; Gould vs. Newman, 6 Mass., 239; Eunt vs. Hunt, 14 Pick., 374; 21 Ala., 497; Oroolcer vs. Jewell, 31 Me., 306; 32 Me., 197; 24 Miss., 368. (5.) The assignment of a mortgage for a valuable consideration, carries with it the debt, as necessary to make such assignment effectual and valuable. In this case the deeds of the land, being virtual assignments of the mortgage, had the same effect. 3. Even if the defendant does not own the mortgage, he is in possession under the mortgagee and with his assent, and can no more be ousted by the mortgagor, by means of an action of ejectment, than could the mortgagee himself