Evans v. Merriken

By the deed of mortgage, the legal estate becomes vested in the mortgagee, defeasible at law upon the performance of the condition and payment of tlie money at the time stipulated; but upon default of the mortgagor in the non-payment of the money at that time, it becomes indefeasible at law, and defeasible only in equity, where the mortgage is considered only as a security for the debt and the mortgagor notwithstanding his default will be permitted to redeem. The issue of a mortgaged slave, born after the title of the mortgagee has become absolute at law, and during the possession of the mortgagor, is liable for the payment of the mortgage debt; and such issue may be sold upon a bill filed to enforce payment, although no specific notice of the issue is taken in the bill. The assignee of the mortgagor of personal property, cannot plead limitations to the bill of the mortgagee claiming a sale of the mortgaged property for the payment of his debt, when the mortgagee had no knowledge of his adversary claim for a sufficient time to make the bar available.

Appeal from the court of Chancery. The appellants on the 15th of April, 1834, filed their bill in the court of Chancery, for the foreclosure and sale of certain personal property, which had been mortgaged to them by William D. Merriken, the father of the appellee and others, who were made defendants. In the mortgage (which bore date 18th April, 1823,) were mentioned several female negro slaves, who with other property, were conveyed to the appellants to secure the payment of $794, due from the mortgagor to them, and there was the usual clause of redemption, in case the mortgage debt with interest, should be paid on the 18th of April, 1824, Nothing was said in the instrument about the issue of the female slaves, nor was any reference made to such issue in the complainants’ bill. A decree passed for the sale of the property on the 4th of August, 1834, and in the trustee’s report it was stated, that in' addition to the original slaves, they had sold two negroes, the issue of the females, who were born after the ' forfeiture of the mortgage, but whilst the parents were in possession of the mortgagor. Objections were filed by the appellee and others, the representatives of the mortgagor, to the ratification of the sale, so far as related to the before mentioned issue, but the proceedings show, that the controversy was finally narrowed down to one of the issue, who was claimed by the appellee, upon the following grounds. 1. That the said negro was not included in the mortgage,, and was not legally transferred to the mortgagees by the terms thereof, there being no mention of the increase. 2. That the bill does not pray for a sale of the increase, and therefore, it could not be sold, though the legaljoperation of the mortgage should transfer such increase. 3. That the negro -so sold was not the property of the mortgagor, and liable to the claim of the complainants, he having been for a valuable consideration, sold and delivered by the mortgagor to the appellee, and having remained in his possession from the time of the sale and delivery, until sold by the trustees, with the knowledge of the complainants, and without any claim of the title to him, on their parts. 4. That, but for the negligence of the complainants, and the indulgence shown by them to the mortgagor, their debt might have been fully secured without having recourse to the property claimed by the appellee, and 5. Upon the ground of limitations. The appellee in support of his claim, to the negro in question, filed a bill of sale executed to him by the mortgagor on the 23d of January, 1826, by which for the consideration of $20, the title of the mortgagor to said'negro was conveyed to him. This bill of sale, was acknowledged before a justice of the peace on the day of its date, but did not appear to have been recorded. After proof had-been taken by the parties, under an order for that purpose, the Chancellor (Bland) on the 23d of March, 1835, referred the ease to the auditor, with directions to state an account, awarding the whole of the proceeds of the sale of the negro in controversy, to the appellee. The account in other respects to be stated according to the nature of the proof. The auditor having stated an account in conformity with this order, appropriating to the appellee, the proceeds of the sale of the said negro, and applying the proceeds of the other property to the complainants’ claim, leaving a considerable balance unpaid, the complainants excepted on that ground to the account. But the Chancellor, on the 4th of April, 1835, overruled their exception, and ratified and confirmed the account, and the complainants thereupon, brought the record by appeal before this court. The cause was argued before Buchanan, Ch. J. and StepheN, Dorsey, Chambers, and Spence, Judges 1. That the issue of a female negro slave, born after forfeiture, is liable to be sold to satisfy the mortgage debt, the title of the mortgagee in the mortgaged premises, in such circumstances, being complete. 1 Powel on Mortg. 172. Ib. 171, (1) Maston vs. Hobbs, 2 Mass. Rep. 435- Conard vs. Atlantic Ins. Co. 1 Peters’ Rep. 441. Jameson vs. Bruce, 6 Gill, and John. 72. Brown vs. Bement and Strong, 8 John. Rep. 9%^ Holmes et al, vs. Crane, 2 Pick. 610. Jones vs. Smith, 2 Ves. Jr. 378. His right to the possession and property being consummate, the rents, issues and profits, follow as a necessary incident, both at law and in equity. 1 Cov. Powel, 172, 175, 162, note (h.) 157, (A) 2 Jacob and Walk. 235. If the mortgagee had been in possession of the mortgaged property, at the time of the birth of the increase, there can be no more doubt, in relation to the mortgagor’s right to redeem it, than of his right to redeem the parent stock, which must proceed upon the ground, that such stock and the increase áre in the same situation; both alike, regarded in the light of a security for the debt. Field vs. Beeler, 3 Bibb. 18. Suppose, instead of personal chattels, the mortgage had been of land, and during the possession of the mortgagor, there had beén an augmentation by alluvion, ■would not the land so formed, have constituted, together with the original soil, a security to the mortgagee ? There can be no doubt of jit, and the reason in favour of such extension, of the security, applies with equal, if not greater force, in'the case of personal property, because the right to the latter, carries with it the possession. No principle is better established, than that the owner of the mother is entitled to the offspring. 2 Black Com. 404. And this, though such owner is merely the life tenant, because the offspring is regarded as a profit accruing during his title. 1 Hair, and Johns. 526. 7 lb. 257. That any increase to the subject mortgaged, is considered parcel of the security, is indisputably settled. Field vs. Beeler, 3 Bibb. 18. Hughes vs. Graves, 1 Lilt. Rep. 317. Crews vs. Pendleton, &c. 1 Leigh. Rep. 297. Moor’s Ex’r vs. Jljlete’s Ex’r, 1 Hen. and Munf. 29. The increase of a pledgé, is itself pledged. Story on Bait, 200. And the right óf the mortgagee, is superior to that of the pledge. Haven vs. Low, 2 JVew Harmp. 13. i 2. The defence resulting from limitations will not avail the appellee. In the first place, he has not presented it in such a form, as would entitle him to the benefit of the statute, even ■ if under the circumstances, it would constitute an effectual defence. Such however, is not the case. The possession of the mortgagor, and those deriving title from him, is the possession of the mortgagee. Angel- on Limitations, 105, 113. Higginson vs. Mein, 4 Cranch, 415. It is not regarded as adverse, having commenced originally with the permission of the mortgagee. Gwynn vs. Jones’ lessee, 2 Gill and John. 173. Parkins vs. Parker, 1 Mass. Rep. 125. Fishwick vs. Sewell, 4 Har. and John. 428. Angel on Lim. 297, 298. And though such possession may subsequently become adverse, that will not influence the rights of the parties, unless the fact of such adverse holding is known to the mortgagee sufficiently long to perfect the statutory bar before he institutes proceedings to vindicate his rights. A clandestine holding is of no avail. Angel, 72. Calles vs. Poison’s Ex’rs, 6 Gill and John. 80. It has been said however, that as the bill does not pray a sale of the increase, as well as the original stock of slaves, that therefore, on that account, the sale is erroneous. The answer to this is, that the increase is regarded as an improvement merely of the property, an incident to it; and as liable to be sold, without specific mention, as the interest of the debt is recoverable, without a specific prayer for that purpose. A decree for the sale of the increase, not being inconsistent with the specific prayer, is warranted by the general prayer. Wilkin, et al, vs. Wilkin, 1 John. Ch. R. 111. Field vs. Beeler, 3 Bibb. 18. Crews vs. Pendleton, fyc. 1 Leigh. 297. The defence founded upon the forbearance of the mortgagee is equally untenable; such forbearance, unless continued for twenty years, being applauded, rather than condemned, and censured by the courts. Hudson vs. Warner and Vance, 2 Har. and Gill, 415. Holmes, et al, vs. Crane, 2 Pick. Rep. 610. Haven vs. Low, 2 JYew Hamp. Rep. 13. It is shown by the evidence, that the boy which alone is the subject of the present controversy, was constantly in the possession and use of the appellee, and consequently, there was no necessity for recording the bill of sale. 1. In a court of equity, the mortgagor is esteemed the real owner, and the mortgagee merely an incumbrancer. 1 Cov. Powl. 159. 2 Doug. 630, and the former is entitled to the rents and profits. Cov. Powl. 155, 157. 4 Kent Com. 158, and with respect to slaves, their owners have an interest in the issue, distinct from the parents, as is evident from the power to manumit future increase by the owner of the mother. The property in such increase, is considered as wholly separate and independent of the parent. One may be entitled to the one, and another to the other, and consequently, although the mortgagee may be regarded as the owner of the mother, it by no means, follows that he is the proprietor of the issue. In the case before the court, sound policy clearly forbids a decision in favour of the appellants. The issue is not mentioned in the mortgage, and therefore, the public have no means of knowing where the title is, and they should be secured in dealing with the possessor, as the legal proprietor. If in so doing, the rights of the mortgagee are invaded, he has no one to blame but himself, for not introducing expressions into the instrument under which he claims, by which the public would be put upon their guard. Without such expressions, strangers would be exposed to imposition. Watkins vs. Harwood, 2 Gill and John. 310. When the boy in question was conveyed to the appellee, how could he know that he was touched by the mortgage ? He was not mentioned eo nomine, nor were words used, calculated to put him upon the inquiry. If then, an innocent party is to suffer, the blow should fall upon him, by whom the mischief has been inflicted. • - j But independently of this view, which so strongly recommends itself upon principles of public policy; and considering the issue of female slaves, in the light merely of rents and profits, the claim of the appellants to have them sold for the payment of their debt cannot be justified, because, though a mortgagee in possession, may be entitled to the rents and profits, it is only when he is in possession, that he is so entitled; and then he must account for them, as an offset to the interest on the mortgage debt. He does not take them as his own absolutely, and unaffected by the rights of the mortgagor. 2. There is evidence to show, that the appellants knew of the possession of the appellee, and knowing it, they were bound promptly to assert their rights if they had any, least by their laches, (as has actually resulted, the remedy of the appellee over against the mortgagor, for the purchase money should be lost. The appellants not only permitted the appellee to rely upon his title, as a good one, but to incur the expense of raising the boy. Although therefore, as a general rule it may be true, that the mortgagee injures himself by forbearing; he does not do so, when the subject of the mortgage is young negroes. In such a case, if - he can have them raised and rendered more valuable by third persons, he benefits himself at their expense, which in legal construction is a fraud. 3. Limitations are a bar, and the defence is well set up in equity, where it is seldom formally pleaded, it being always sufficient to rely upon it, no matter how informally, provided the party against whom it is to operate has notice. In controversies among creditors, the course of the court is to receive the objection at any time, regardless of the manner in which it may be interposed. Substance, and not form is aimed at, and when the former is accomplished, the court never listens to objections founded upon the latter.