Howard v. Handy

Where an entry is made by a mortgagee to foreclose his mortgage, under sec. 14, chap. 131, Rev. Stat., possession may be held by him, through the mortgager as his tenant; and such possession, being actual and peaceable, is as good as though held by the mortgager in person. Publication of notice of an entry to foreclose, in some newspaper printed in the county, according to the provisions of said fourteenth section, is a sufficient notice to all interested that the foreclosure has been commenced. The assignee of a mortgage takes, by the assignment, all benefits to be derived from any entry by the mortgagee to foreclose.

IN Equity. The bill charges that the defendant, Jeremiah. Johnson, being the owner of a certain lot of land, together with the rope-walk and machinery pertaining thereto, and other buildings thereon, situated in Portsmouth, on the first day of October, 1850, mortgaged the same to one William B. Yincent, with a condition to pay to Yincent, his heirs or assigns, the sum of $1,644.78, according to the tenor of Johnson’s note for that sum, dated the same day, and payable to Yincent or order, on demand, with interest: That afterwards, on the 14th day of January, 1852, in pursuance of a bargain made and completed long before that time, Yincent assigned and transferred the note and mortgage, and his interest in the estate, to the defendant, John N. Handy, and to one Jeremiah M. Mathes, and that Mathes has since transferred and assigned his interest in the premises to Handy: That on the 13th day of April, 1850, Johnson was indebted to the plaintiff in the sum of $280.51, upon a promissory note of that date, payable in six months: That on the 27th day of January, 1851, a suit was commenced by the complainant upon said note, and all the right, title and interest of Johnson in the premises mortgaged, were upon that day attached on the writ: That at the February term of the Common Pleas, 1851, judgment was recovered in the suit for $288.92 debt, and $16.28 costs: That execution was forthwith taken out upon the judgment, a levy seasonably commenced, and on the 7th day of June, 1851, tbe officer duly sold to the complainant, at public auction, for the sum of |>321, all the right in equity which Johnson had on the 27 th day of January, 1851, of redeeming the property; and on the same day the sheriff made and delivered to the complainant a deed of the premises, which was afterwards duly recorded, and the execution, with the officer’s doings thereon, was returned at the September term of the court, 1851: That more than one year has elapsed since the delivery and recording of the sheriff’s deed, but that the -property has never been redeemed by Johnson, or any other one, nor any part of the complainant’s debt been paid. The bill further charges, that on the 15th day of March, 1852, the complainant, by his attorney, called upon Johnson, and Handy and Mathes, and offered Handy and Mathes to redeem the property, by the payment of the amount due and all lawful expenses, but they refused to accept the same; that afterwards he repeatedly made the same offer and tender of payment, particularly to Handy, on the 14th of June, 1853 ; and that he has always been ready to pay the same, if he could ascertain the amount due; but that Handy and Mathes, and afterwards Handy, utterly refused to state what was due on the mortgage, or to receive any money in redemption: That the transfer and assignment of the mortgage from Vincent was taken at the request of Johnson, and for his benefit; that Handy and Mathes, and afterwards Handy, in receiving the assignment, and in holding the same, acted as agents for Johnson, and that the mortgage is still holden by Handy, either in whole or in part, for the benefit of Johnson: That it was agi’eed between Johnson and Handy that the mortgage should be foreclosed in the name of Vincent, for the purpose of cutting off the ■.creditors of Johnson, and that the same should be held by Mathes and Handy, or by Handy, for the use and benefit of Johnson; and the complainant has been informed that, in pursuance of the agreement, some attempt was made by Mathes and Handy, or by Handy, to foreclose the mortgage, but that the same was never lawfully foreclosed. That Johnson, ever since the year 1849, and long before, has been in the peaceable possession of the property. The bill then sets forth the pretences of the defendants; that the mortgage was purchased of Vincent, and the full amount of the note and interest paid for the same ; that this was done without any request from Johnson, and without any understanding or agreement with him, or promise to him whatever : That the mortgage has been legally foreclosed, and no part of it has ever been paid by Johnson. The bill then specifically interrogates the defendants, as to all the matters charged, in general terms. The bill prays that an account may be taken of what, if anything, is now due on the mortgage, and also for an account of the rents and profits that have been, or might have been received by Mathes and Handy, or Handy; that any pretended foreclosure may be set aside as illegal, fraudulent, and void; that the complainant may be permitted to redeem the premises, on payment of any thing that may be due on the mortgage, and the defendants, be decreed to deliver possession to the complainant, upon such payment being made. The bill also contains a prayer for general relief. Johnson, in his answer, admits that he was indebted to the complainant, as set forth in the bill, and that owing to his inability the debt had never been paid. He admits the execution of the mortgage to Vincent, and the assignment by Vincent to Mathes and Handy on the 14th day of January, 1852, and the subsequent transfer by Mathes of his interest to Handy. He states that he has no knowledge and can not answer whether the complainant ever made any tender to Mathes and Handy, or to Handy alone, of the amount due upon the mortgage, or whether Handy refused to make known the amount due, or to receive the money. He denies that Mathes and Handy, or either of them, took the assignment of the mortgage for him, or for his benefit, or at his request; or that there was ever any understanding or agreement that he was to have the benefit of the assignment or of the property; or that there was ever any agreement that the mortgage should be foreclosed for the purpose of cutting off his creditors, or for him to have the property; that he had been informed, and believes it to be true, that the mortgage was lawfully foreclosed by Vincent, and that Mathes and Handy paid Vincent $1,752.47 for the mortgage. He. denies that there was ever any understanding or agreement between him and any of the parties, that the mortgage should be foreclosed in any way for his benefit, or that he has any interest in the property. He admits that he was in possession of the premises in 1849, and for many years before, and up to the time that Vincent entered to foreclose, on the 14th day of January, 1851; but that he has never been in possession of the premises since that day, or had any interest in them except as tenant: That he, occupied them as tenant of Vincent under a lease for one year, from January 14,1851, to January 14, 1852 : That since that time he and Handy have occupied them as co-partners, under a lease from Handy. That nothing has ever been paid on the mortgage, or towards redeeming the property. Handy, in his answer, admits the execution of the mortgage from Johnson to Vincent, and alleges that Vincent, on the 14th day of January, 1851, took peaceable possession of the premises, publicly, in the presence of witnesses, for the purpose of foreclosing the mortgage for condition broken, and continued in the actual, peaceable possession thereof for one year, then next ensuing, and gave notice of the same in the Portsmouth Journal, as required by statute: That Johnson, during that year, held the premises under Vincent, as his tenant, by lease from him. He admits that he and Mathes took an assignment of the mortgage from Vincent, on the 14th day of January, 1852, but avers that it was for a good and valuable consideration, and that they then entered and took actual and peaceable possession of the premises, for the purpose of perfecting the foreclosure commenced by Yineent, and that they held actual, peaceable possession thereof, claiming title thereto, until the 14th day of January, 1853, when Mathes released all his title to Handy; and that Handy has held actual, peaceable possession from that time until the filing of this answer, January 30, 1857. That the amount paid to Yineent for the mortgage was $>1,752.47, and that it was paid in cash on the day of the assignment. He admits that Johnson was indebted to the complainant, as stated in the bill, and that the equity of redemption was sold, as therein stated, and a deed given to the complainant; and that the debt has never been paid. He denies that the complainant at any time, till the 14th of June, 1853, offered to redeem the property by paying the amount of the mortgage; but he admits that on that day such an offer was made, and that he refused to give any account of what was due on the mortgage, or to recognize the right of the complainant to redeem the premises : That he then claimed and now claims to hold the premises as his absolute property. He denies, specifically, that there was ever any understanding or agreement that Johnson should have any interest in the property, or that the mortgage was purchased of Yineent in any way for the benefit of Johnson, or at his request; or that the forclos-ure was made to cut off the creditors of Johnson; or that Johnson was to have any privilege of redeeming the property, or any share in the income or profits thereof. He admits that Johnson was .in possession of the property in 1849, and up to January 14, 1851, but he denies that he has ever been in possession since, except as tenant; that Johnson has not, redeemed the premises, because he has not had the means to do it, and that he, Handy, is sole owner of the same, in his own right, with no trust or understanding that it is held for any one but himself. Both of the defendants deny all unlawful combination or confederacy. To tbe answers there was a general replication, and testimony has been taken by both parties, which will be stated, so far as necessary, in the opinion of the court. I. Vincent’s mortgage was not foreclosed. No evidence of compliance with the statute as to entry. Answers are contradicted as to possession; and no allegation in answers, oí notice. No proof that Johnson held possession for Vincent. Clarice v. White, 12 Peters 178 ; 2 Story’s Eq. 745, sec. 1529; Hart v. Ten Hyde, 2 Johns. Ch. 87. If Johnson did hold under Vincent, the possession was fraudulent, and insufficient to foreclose the mortgage. Comp. Stat., ch. 137, sec. 14, p. 292; Laws of N. H. 196, Ed. of 1815; Kittredge v. Bellows, 4 N. H. 433; Thayer v. Smith, 17 Mass. 431; Haines v. Beach, 3 Johns. Ch. 459 ; 5 Conn. 531; Downer v. Clement, 11 N. H. 40; Gilman v. Hidden, 5 N. H. 30; Coburn v. Pickering, 3 N. H. 415; 1 Greenleaf’s Cruise, book 2, p. 218, n.; Botham, v. Mclntire, 19 Pick. 346, 7. II. There is evidence of collusion between Handy and Johnson to foreclose the mortgage and shut out creditors, and that Handy holds the property under some secret trust for Johnson. III. The equities are in the plaintiff’s favor. I. The first position of the plaintiff is that the mortgage is not foreclosed, because there is no evidence of a compliance with the statute. The answers of both defendants allege a foreclosure, setting forth the time when the entry was made, and the possession, &c.; and the answer of Handy, who claims to own the property, sets forth the facts which, under the statute, constitute a foreclosure. These facts are in no wise contradicted or controlled by evidence, and must be held to be evidence of the facts they assert. Besides, the defendants have proved all the facts necessary to constitute a foreclosure, and fully sustained the facts alleged in their answers. II. But it is said that the answers are contradicted as to possession. I do not so understand the matter. There is no dispute about the fact that Johnson was in the occupation of the premises after the 14th of January, 1851, as the tenant of Vincent; and if there be any where in the proof any verbal disagreement between the .answers and the proof, it must be in the inadvertant use of the word “ possession” for “ occupation,” or some such verbal inaccuracy. As to the notice, it is both alleged and proved. III. But it is said that there is no proof that Johnson held possession for Vincent. The plaintiff refers to 2 Story Eq. 745, p. 1529, sec. 12; Peters 178; 2 Johns. Ch. 87, to show the rule in chancery “ that if the answer of the defendant admits a fact, but insists upon matter by way of avoidance, the plaintiff need not prove the fact, admitted, but the defendant must prove the matter in avoidance.” In the first place, I claim that the answer of both the defendants, that Johnson held the possession from January 14, 1851, to January, 14, 1852, as the tenant of Vincent, is responsive to the bill. The answer is responsive to the charge in the bill and gives to the defendants the rights incident to an answer of that character. But the defendants have proved by two witnesses the character of Johnson’s occupation after January 14, 1851, and that he held it for Vincent, and as his tenant. IV. But the plaintiff says that if Johnson did hold under Vincent, the possession was fraudulent and insufficient to foreclose the mortgage. But I find nothing in the numerous authorities cited under this head tending to support this proposition. Our statute makes no distinction between the “ possession” acquired under process of law, and “ possession” acquired by peaceable entry ; nor have I been able to find that this court have, in any case, intimated that there was any distinction. But they have held that tenantry under a process of law against the tenant in possession, and a lease to the tenant for a year, and his occupation as such, perfected the foreclosure. Kittredge v. Bellows, 4 N. H. 424; 11 N. H. 474. Besides, Handy, on the 14th of January, 1852, having Vincent’s rights, (Smith v. Smith, 9 N. H. 55,) entered into possession of the premises, and has held the same from that day to this, claiming title, and had so held said premises more than a year before the plaintiff offered to redeem. V. If there be, as the plaintiff says, any evidence of collusion between Johnson and Handy, I do not know where he finds it. VI. But the plaintiff says that the equities are in his favor; hut we contend that the whole case shows that the “ equities” are with Handy, who holds the legal title, and we think the court must so find.