Stewart v. Hutchinson , 29 How. Pr. 181 ( 1864 )

Morgan, J.

I understand from the complaint that the defendants are in possession, claiming title under the state ■patent, and I think it may be assumed that Mrs. Hutchinson occupies the same position as that of Robert Perry before his assignment of the surveyor general’s certificate, and that having taken the legal title she must be decreed to hold it in trust, or subject to the equitable rights of the plaintiff. The complaint avers that the plaintiff took his mortgage supposing that Robert Perry had the legal title, and that he foreclosed it upon that supposition. But clearly the decree of foreclosure could not invest the plaintiff with the title. The title was in the state, and remained there until it was conveyed to Mrs. Hutchinson. Robert Perry not having the title could not convey it through his mortgage to the plaintiff, but I think a court of equity could adjudge it to be a lien upon his interest in the premises, and upon the surveyor general’s certificate, equivalent to a chattel mortgage or assignment of the same, for the security of the plaintiff’s debt. The plaintiff was, therefore, entitled to an assignment of the surveyor general’s certificate by way of security, having by mistake taken a defective instrument for that purpose, which could not be enforced at law. In other words, the plaintiff became the equitable assignee of the surveyor general's certificate to secure the payment of the debt which was included in the mortgage. When he paid up the contract to the state, and took out a patent for the premises, he would be decreed to hold the title, subject to the equitable rights of the plaintiff to have that land sold for the payment of the plaintiff's debt. There is enough stated in the complaint to show that Mrs. Hutchinson took the title with notice of the plaintiff’s equity, and, indeed, with the fraudulent design of overreaching it. Her position, therefore, is no better than would be that of Robert Perry, if he had taken out a patent in his own name. The plaintiff’s demand should, therefore, be declared a lien upon thé premises, and on default of payment, the premises may be sold to satisfy it.

The complaint is framed upon the theory that the plaintiff by virtue of his foreclosure of the mortgage obtained all of Robert Perry’s title to the premises, and that what was at first only a lien, became an absolute title by means of that foreclosure. But this theory cannot be supported, for the reason that at law the plaintiff’s mortgage was inoperative to accomplish such an object. It did not purport to transfer Robert Perry’s interest in the surveyor general’s certificate, but his legal title.to the premises when he had none to transfer. A quit-claim deed from Robert Perry to the plaintiff at that time, would not operate to transfer the legal title, although one was afterwards acquired by the grantor. The mortgage, at law, could not have any greater effect. The plaintiff, therefore, failed to acquire any legal title to the premises, or to the surveyor general’s certificate by foreclosing such a mortgage. The mortgage being wholly inoperative as a legal security, could only be enforced as an equitable lien. It is still necessary for the plaintiff to invoke the assistance of a court of equity to enforce it, by making it a charge upon the legal title. The sale under the decree of foreclosure failed to accomplish any such object, although I think the plaintiff took thereby the interest of James Stewart, the other mortgagee, and is now to be regarded as the sole owner of the mortgage debt.

The defendants’ demurrer raises the question as to parties. It is very evident, I think, that the state has no longer any interest to be affected by a decree, as between the claimants to the premises. But it is not so clear as to Robert Perry, who is the debtor and mortgagor. He has a right to contest the amount of the demands, as well as their validity. But the defendants may do the same thing, and may use Robert Perry as a witness for that purpose. If it is assumed, as I think it must be, upon the facts stated in the complaint, that Robert Perry has parted with all his right, title and interest in the premises to Mrs. Hutchinson,. and that she occupies his position in respect to the rights of this plaintiff, it would seem to be unnecessary to make him a party, as he cannot be affected by a decree which shall declare the plaintiff’s debt a lien upon the legal title. If, therefore, I am right in my conclusions that the plaintiff’s remedy is to obtain the judgment of the court declaring his debt an equitable lien upon the premises, and directing a sale to satisfy it, then I think the necessary parties are before the court, and the complaint is not defective for want of other parties.

This being an equitable action, it is unnecessary to look into the prayer for judgment to determine whether the complaint states facts enough to authorize the particular relief prayed for. The facts entitle the plaintiff to a decree making his debt a lien upon the premises, which may be sold to satisfy it. In my opinion a reference would be proper to ascertain the amount of the plaintiff’s debt, but I think it would not be proper to include the costs of prosecuting the foreclosure suit. The prayer for general relief, is however, sufficient to authorize this court to grant the relief above indicated, although not particularly specified in the complaint. Judgment must therefore be given for the plaintiff, with leave to defendants to answer in twenty days, upon the usual terms.

Judgment accordingly.