DixoN, C. J.
Tbe-statute authorizing tbe foreclosure of mortgages by advertisement includes by its very terms every mortgage of real estate containing a power of sale, and makes no exception in favor of insane persons, idiots, lunatics, infants or others under disability. Tbe language is: “ Every mortgage of real estate, containing a power of sale, upon default being made in any condition of such mortgage, may be foreclosed by advertisement, in tbe cases and in tbe manner hereinafter specified.” B. S.,’ch. 154, sec. 1. Tbe proposition, however it may once have been held or considered, tbat tbe courts, upon what is termed an equitable construction or otherwise, may, against tbe plain language of a statute and in opposition to tbe intent clearly expressed by tbe words, mitigate tbe “violence of tbe letter ” by introducing exceptions where tbe statute itself contains none, so as to relieve in cases of hardship or particular inconvenience, has been too long and too frequently rejected to be now tbe subject of serious argument or doubt. Such_doc-trine, if it ever existed, was long since exploded, and tbe rule now universally recognized and acted upon is, tbat whatever else may be done with tbe words of a statute, they may never, in tbe language of Lord BACON, “ be taken to a repugnant intent.” ' See tbe language of KeNT, Chancellor, in Demarest v. Wynkoop, 3 Johns. Ch. R., 142, and of Lord Tenterden, C. J., in Brandling v. Barrington, 6 Barn. & Cress., 475. When, therefore, tbe statute says tbat every mortgage containing a power of sale may be foreclosed by advertisement, and makes no exception of a mortgage upon lands belonging to an insane person, such mortgage cannot be excluded from tbe operation of [277]*277tbe statute, because tbat would be repugnant to tbe intent as clearly expressed by tbe words. Tbe words cannot be taken to a repugnant intent. In sucb case, tbe language of tbe statute being general, tbat every mortgage containing a power of sale may be thus foreclosed, and tbe particular mortgage not being excepted, tbe established rule of interpretation is, ■ tbat general words must receive a general construction. Tbis rule has been oftenest applied, and is most frequently exemplified, in cases arising under statutes of limitation; but it is equally applicable to any other statute. It was applied to tbe statute of limitations in tbe case of Woodbury v. Shackleford, 19 Wis., 55. But in tbe recent case of Harrington v. Smith, [ante, p. 43], tbis court bad occasion to apply it to a statute of a different kind, and to refer to and examine several leading authorities bearing upon and illustrating its application. In Collins v. Carman, 5 Md., 533, cited in Harrington v. Smith, tbe court, speaking of tbe rules tbat general words in a statute must receive a general construction, and if there be no express exception tbe court can create none, say: “If these are tbe rules which apply to tbe statute of limitations, it is difficult to perceive why they should not be equally applicable to other statutes.” And they were so applied in tbat case, and several authorities cited to sustain tbe application.
We are of opinion, therefore, tbat there can be no limitation or restraint put upon tbe statute by construction on tbe part of tbis court, so as to exclude from its operation tbe case of a mortgagor who is insane at tbe time of foreclosure. Tbe statute plainly authorizes sucb foreclosure; and so far as tbat authority goes, neither tbe proceedings of'tbe mortgagee nor tbe title of tbe purchaser can be lawfully disturbed.
But although sucb is tbe situation of tbe purchaser and tbe nature of tbe proceedings upon a proper construction of tbe statute, we are still of opinion tbat there exist other grounds upon which tbe sale must be set aside, and tbe title remitted to tbe mortgagor or bis legal representative as it stood before tbe [278]*278mortgage was foreclosed Those grounds we will now proceed to state.
The mortgage was foreclosed and the premises sold on tbe 15th. of August, 1867. The advertisement was dated, and publication commenced, the 22nd of June previous. G-retman, the mortgagor, was then insane, and had been continuously so for nearly three years. He was taken insane, according to the witness Treleven, in October, 1864 He had been an inmate, confined as an insane person, in the poorhouse of Fond du Lac county from the 11th of November, 1865. The mortgaged premises were situate in Fond du Lac county, where Gretman resided and had continued to reside from about the year 1860, part of the time perhaps upon, and always, until he was taken insane, in the vicinity of, the mortgaged premises. His ownership of the land and the fact of his insanity appear to have been well known in the neighborhood. The plaintiff in this case, who claims title by virtue of the sale, lived in the same county, and was apprised of Gretman’s insanity a considerable time before he purchased. He was informed of it by the witness Sheridan, in the month of March or April, 1867, when Sheridan employed him to find out the mortgagee and set in motion the proceedings by which the mortgage was foreclosed. The premises were bid off by the mortgagee at the sale, and on the same day transferred to the plaintiff, who took an assignment of the certificate of sale from the mortgagee and also an agreement from him to refund the purchase money, or so much of it as should not be realized from the redemption, in case the land should be at any time redeemed within the time provided by la.w. The mortgagee did not reside in the county of Fond du Lac, but in the adjoining county of Sheboygan, and claims to have been ignorant of the mortgagor’s insanity. The circumstances of the case are such as to create great doubt of the truth of this statement, although the mortgagee so testifies. He had been well acquainted with Gretman for years. Gretman had lived with him, and worked upon his farm, for three years [279]*279prior to 1860; and between tbat time and 1863, when tbe mortgage was executed, it seems tbat be saw bim several times. He testifies tbat be visited tbe mortgaged premises more tban once; tbat no pari of tbe principal or interest was ever paid upon tbe note and mortgage; and tbat upon ascertaining tbat three years’ taxes were unpaid on tbe land, be went to Eond du Lac to see about it, and paid tbe taxes. As to no part of tbe principal or interest having been paid, there is some testimony tending strongly te show tbat this was not so; but whether it was or was not, it is certainly most extraordinary tbat tbe mortgagee, familiarly acquainted with Gretman, bolding tbe mortgage against bim for more tban four years without payment of principal or interest, visiting tbe mortgaged premises, and paying tbe taxes which Gretman bad neglected to pay, should not have ascertained Gretman’s condition and tbe fact tbat be was insane and confined in tbe county poor bouse. We say this is most extraordinary; and if tbe relief demanded by tbe administrator depended upon such knowledge on tbe part of tbe mortgagee, we should not hesitate to find tbe fact. Added to tbe foregoing facts and circumstances under which tbe mortgage was foreclosed, tbe premises sold and title acquired by tbe plaintiff, is tbe further and most important fact tbat tbe premises were bid off by tbe mortgagee at a price considerably less tban one-balf their actual cash value at tbe time, and were by bim immediately transferred to tbe plaintiff at an advance, though not for a sum exceeding one-balf their value according to tbe lowest estimate given by tbe witnesses.
Free access — add to your briefcase to read the full text and ask questions with AI
DixoN, C. J.
Tbe-statute authorizing tbe foreclosure of mortgages by advertisement includes by its very terms every mortgage of real estate containing a power of sale, and makes no exception in favor of insane persons, idiots, lunatics, infants or others under disability. Tbe language is: “ Every mortgage of real estate, containing a power of sale, upon default being made in any condition of such mortgage, may be foreclosed by advertisement, in tbe cases and in tbe manner hereinafter specified.” B. S.,’ch. 154, sec. 1. Tbe proposition, however it may once have been held or considered, tbat tbe courts, upon what is termed an equitable construction or otherwise, may, against tbe plain language of a statute and in opposition to tbe intent clearly expressed by tbe words, mitigate tbe “violence of tbe letter ” by introducing exceptions where tbe statute itself contains none, so as to relieve in cases of hardship or particular inconvenience, has been too long and too frequently rejected to be now tbe subject of serious argument or doubt. Such_doc-trine, if it ever existed, was long since exploded, and tbe rule now universally recognized and acted upon is, tbat whatever else may be done with tbe words of a statute, they may never, in tbe language of Lord BACON, “ be taken to a repugnant intent.” ' See tbe language of KeNT, Chancellor, in Demarest v. Wynkoop, 3 Johns. Ch. R., 142, and of Lord Tenterden, C. J., in Brandling v. Barrington, 6 Barn. & Cress., 475. When, therefore, tbe statute says tbat every mortgage containing a power of sale may be foreclosed by advertisement, and makes no exception of a mortgage upon lands belonging to an insane person, such mortgage cannot be excluded from tbe operation of [277]*277tbe statute, because tbat would be repugnant to tbe intent as clearly expressed by tbe words. Tbe words cannot be taken to a repugnant intent. In sucb case, tbe language of tbe statute being general, tbat every mortgage containing a power of sale may be thus foreclosed, and tbe particular mortgage not being excepted, tbe established rule of interpretation is, ■ tbat general words must receive a general construction. Tbis rule has been oftenest applied, and is most frequently exemplified, in cases arising under statutes of limitation; but it is equally applicable to any other statute. It was applied to tbe statute of limitations in tbe case of Woodbury v. Shackleford, 19 Wis., 55. But in tbe recent case of Harrington v. Smith, [ante, p. 43], tbis court bad occasion to apply it to a statute of a different kind, and to refer to and examine several leading authorities bearing upon and illustrating its application. In Collins v. Carman, 5 Md., 533, cited in Harrington v. Smith, tbe court, speaking of tbe rules tbat general words in a statute must receive a general construction, and if there be no express exception tbe court can create none, say: “If these are tbe rules which apply to tbe statute of limitations, it is difficult to perceive why they should not be equally applicable to other statutes.” And they were so applied in tbat case, and several authorities cited to sustain tbe application.
We are of opinion, therefore, tbat there can be no limitation or restraint put upon tbe statute by construction on tbe part of tbis court, so as to exclude from its operation tbe case of a mortgagor who is insane at tbe time of foreclosure. Tbe statute plainly authorizes sucb foreclosure; and so far as tbat authority goes, neither tbe proceedings of'tbe mortgagee nor tbe title of tbe purchaser can be lawfully disturbed.
But although sucb is tbe situation of tbe purchaser and tbe nature of tbe proceedings upon a proper construction of tbe statute, we are still of opinion tbat there exist other grounds upon which tbe sale must be set aside, and tbe title remitted to tbe mortgagor or bis legal representative as it stood before tbe [278]*278mortgage was foreclosed Those grounds we will now proceed to state.
The mortgage was foreclosed and the premises sold on tbe 15th. of August, 1867. The advertisement was dated, and publication commenced, the 22nd of June previous. G-retman, the mortgagor, was then insane, and had been continuously so for nearly three years. He was taken insane, according to the witness Treleven, in October, 1864 He had been an inmate, confined as an insane person, in the poorhouse of Fond du Lac county from the 11th of November, 1865. The mortgaged premises were situate in Fond du Lac county, where Gretman resided and had continued to reside from about the year 1860, part of the time perhaps upon, and always, until he was taken insane, in the vicinity of, the mortgaged premises. His ownership of the land and the fact of his insanity appear to have been well known in the neighborhood. The plaintiff in this case, who claims title by virtue of the sale, lived in the same county, and was apprised of Gretman’s insanity a considerable time before he purchased. He was informed of it by the witness Sheridan, in the month of March or April, 1867, when Sheridan employed him to find out the mortgagee and set in motion the proceedings by which the mortgage was foreclosed. The premises were bid off by the mortgagee at the sale, and on the same day transferred to the plaintiff, who took an assignment of the certificate of sale from the mortgagee and also an agreement from him to refund the purchase money, or so much of it as should not be realized from the redemption, in case the land should be at any time redeemed within the time provided by la.w. The mortgagee did not reside in the county of Fond du Lac, but in the adjoining county of Sheboygan, and claims to have been ignorant of the mortgagor’s insanity. The circumstances of the case are such as to create great doubt of the truth of this statement, although the mortgagee so testifies. He had been well acquainted with Gretman for years. Gretman had lived with him, and worked upon his farm, for three years [279]*279prior to 1860; and between tbat time and 1863, when tbe mortgage was executed, it seems tbat be saw bim several times. He testifies tbat be visited tbe mortgaged premises more tban once; tbat no pari of tbe principal or interest was ever paid upon tbe note and mortgage; and tbat upon ascertaining tbat three years’ taxes were unpaid on tbe land, be went to Eond du Lac to see about it, and paid tbe taxes. As to no part of tbe principal or interest having been paid, there is some testimony tending strongly te show tbat this was not so; but whether it was or was not, it is certainly most extraordinary tbat tbe mortgagee, familiarly acquainted with Gretman, bolding tbe mortgage against bim for more tban four years without payment of principal or interest, visiting tbe mortgaged premises, and paying tbe taxes which Gretman bad neglected to pay, should not have ascertained Gretman’s condition and tbe fact tbat be was insane and confined in tbe county poor bouse. We say this is most extraordinary; and if tbe relief demanded by tbe administrator depended upon such knowledge on tbe part of tbe mortgagee, we should not hesitate to find tbe fact. Added to tbe foregoing facts and circumstances under which tbe mortgage was foreclosed, tbe premises sold and title acquired by tbe plaintiff, is tbe further and most important fact tbat tbe premises were bid off by tbe mortgagee at a price considerably less tban one-balf their actual cash value at tbe time, and were by bim immediately transferred to tbe plaintiff at an advance, though not for a sum exceeding one-balf their value according to tbe lowest estimate given by tbe witnesses. Tbe mortgagee, Meggers, purchased for $451.57, tbe amount claimed to be due for principal and interest on tbe mortgage and tbe costs of foreclosure, and sold to tbe plaintiff for $500. Tbe lowest cash value put by tbe witnesses is $1,000, and from tbat to $1,200.
Upon these facts tbe question arising is, whether tbe effect of tbe statute authorizing tbe foreclosure by advertisement can be avoided, and tbe sale set aside and title restored on tbe ground of fraud. We are of opinion tbat the effect of tbe statute can be [280]*280so avoided and tbe title restored as if no sale bad taken place. We tbink tbe sale was, under tbe circumstances, fraudulent at law as well as in equity; but if not tbe former, then certainly tbe latter.
We need not advert to tbe general principle tbat fraud vitiates all contracts and proceedings, even records and judgments of tbe most solemn character. Nor need we enter into any argument to show tbat proceedings, however sufficient and correct in form, which are taken for tbe clearly ascertained purpose of despoiling an insane person or lunatic of bis property and estate, are fraudulent. No one will deny tbat such proceedings are against conscience, and wrong. “ Such persons,” says Judge Stoéy, “ being incapable in point of capacity to enter into any contract, or to do any valid act, every person dealing with them, knowing their incapacity, is deemed to perpetrate a meditated fraud upon them and their rights. And, surely, if there be a single case in which all tbe ingredients proper to constitute a genuine fraud are to be found, it must be a case where such unfortunate persons are tbe victims of tbe cunning, the avarice, and corrupt influence of those who would make an inhuman profit of their calamities. Even courts of law now lend an indulgent ear to cases of defense against contracts of this nature, and, if fraud is made out, will declare them invalid.” 1 Story’s Eq. Jur., § 227. It is true, tbe learned author was speaking more especially of contracts, but what be says is also to tbe purpose here. It shows that tbe true and only ground upon which courts of law as well as equity interfere to protect and'restore tbe property of insane persons, and such as are otherwise non compotes mentis, is fraud. And it shows furthermore, tbat any person, who, knowing tbe incapacity of parties so situated, takes unjust or improper advantage of it, is deemed in tbe law to perpetrate a meditated fraud. If, therefore, tbe mortgagee in this case knew Gretman’s insanity, as we are compelled to believe, and, instead of foreclosing by suit in equity, where a guardian would be appointed and tbe mort[281]*281gagor’s rights and interests protected, resorted to the foreclosure by advertisement in order to obtain title to the land in that way for half its value, either for his own benefit or for the benefit of the plaintiff in this action, who knew all the facts, it was an active, genuine fraud on the part of both. It was no less and no better than any other cunning or contrivance devised and executed malo animo to deprive an insane man of his property. It was the making an inhuman profit from his calamites, from corrupt and avaricious motives, spoken of by Judge Stoby with so much and such just abhorrence. It was a fraud on the law itself or statute authorizing such foreclosure, if a fraud of that kind ever existed. And such fraud, in our judgment, avoids the effect of the statute in favor of the parties who have committed it.
There is, for example, very much and very high authority for saying that the bar of the statute of limitations may be avoided at law for fraud in the party seeking to take advantage of it. Sherwood v. Sutton, 5 Mason, 143; Bree v. Holbeck, Doug. R. 655; Jones v. Carroway, 4 Yeates, 109; Persons v. Jones, 12 Ga., 371; First Massachussetts Turnpike Co. v. Field, 3 Mass., 201; Homer v. Fish, 1 Pick., 435; Welles v. Fish, 3 Pick, 73; Farnam v. Brooks, 9 Pick., 212, 246; Bishop v. Little, 3 Greenl., 405; Cole v. McGlathry, 9 Greenl., 131; Brickner v. Lightner’s Ex'r, 40 Pa. St., 199; Bicknell v. Gough, 3 Atkyns, 557; Carlisle v. Foster, 10 Ohio St., 198, Conyers v. Kenans and Hand, 4 Ga., 308. How does the question of avoiding the effect of the statute under consideration for actual fraud, differ from that of avoiding the effect of the statute of limitations for the same cause ? It seems to us there can be no difference.
The proposition that recoveries or proceedings of any kind, even upon just title or lawful claim or demand, may be falsified and set aside for fraud, or as it is termed in the old books, for covin, is by no means a new or strange one. “ In civil suits,” says Sir ¥i. De Ghey, Chief Justice of the Common Pleas, delivering the unanimous opinion of all the judges in the [282]*282Duchess of Kingston's Case (decided in 1776), 2 Smith’s Lead; Cas., [*578], “ all strangers may falsify, for covin, either fines, or real or feigned recoveries; and even recovery by a just title, if collusion was practiced to prevent a fair defense; and this, whether the covin is apparent upon the record, as not essoigning or demanding the view, or by suffering judgment by confession or default; or extrinsic, as not pleading a release, collateral warranty, or other advantageous pleas.” And that the covin, or secret agreement or purpose carried out to the prejudice of anbther, may be such as is or is not apparent upon the record, Sbe likewise opinion of Molyneux, J., in Wimbish v. Talbois (4th Ed. VI., 155), Plowden, 49, “ And these two cases ” says MONTAGU, C. J., in the same case, 54, “ are so adjudged in our books, which prove that covin may be where the title is good, and the title shall not give benefit to him that has it, by reason of the covin, for the mixture of the good and ill together makes the whole bad, and the truth is obscured by the falsehood, and the virtue drowned in the vice.” And again, 55, he says : “ For as the King’s subjects are born to inherit land and other things, so are they born to inherit and enjoy the laws of this realm, and every man alike may have the benefit of the law, and the common presumption is that every man chooses to accept it. But the contrary appears in the woman defendant, for when she was impleaded in the formedon, she had not view nor was essoigned; and it is to be presumed that she had cause of voucher, inasmuch as the tail is so old, and she did not vouch, but lost the advantages given her by the law; and also she came the first day (and therefore was not amerced) and said that she could not deny the action; all which things prove openly a covin, and as the common saying is, it hath meat in its mouth.” And in Jacobs’ Law Dictionary, (ed. 1756), title “ Covin," the author, citing Bro. Covin, 47, Co. Litt. 357, and other authorities, says : “ On recovery by a good title, there may be covin: as where the tenant for life, by assent, &c-, suffers a recovery by nil Aral without making any de[283]*283fense. And if a man hath a rightful and just cause of action, and of covin and consent shall raise up a tenant by wrong against whom he may recover, the covin doth so suffocate the' right, that the recovery, although upon good title, shall not bind.” And see Sevier v. The Justices of Washington County, Peck’s R., 353, 355. “ The powers and processes of the law are given for the purposes of justice. * * * To prevent the authority with which the law clothes its officers from being abused, per? verted or exceeded, the law sternly proclaims, in the language of Lord Holt, ‘ that no lawful thing can be founded on a wrongful act ’; that no valid rights shall be builded on a foundation of fraud, official .oppression, or abuse of official power, or perversion by individuals of the law's machinery or authority. There is too much temptation to do this, but ‘ the wise policy of the law has put the sting of disability into the temptation,’ by declaring that those who abuse it shall reap no advantage therefrom.” Patterson v. Pratt, 19 Iowa, 361, 362. See also Philipson v. Earl of Egremont, 6 Ad. & Ellis (N. S.) 587, (51 E. C. L. 587, 605.]
It clearly appears to us, that (if a case can be presented where covin in law or fraud upon legal process should suffocate the right or nullify a recovery or title obtained, or where, as expressed by Lord Coee (Thomas’ Coke, 591) “ the wrongful manner shall avoid the matter that is lawful,” this is such an one. It seems to us that it should be so at law as well as in equity; but, as we have already observed, whether it is so at law or not, it clearly is in equity.
In equity the proceeding was fraudulent, and the sale will be set aside, whether the mortgagee knew of the morgagor’s insanity or not. This will always be done where it is for the benefit of the person non compos mentis, and where injustice will not thereby be done to the other parties to the transaction, or they can be placed in statu quo. No injustice will be done here. The plaintiff will be entitled to the redemption money so far as that goes, and for the rest he has the bond or covenant of the mort[284]*284gagee for repayment. Tbe mortgagee will bave tbe full amount of bis debt and interest, wbicb is all be can require. Tbe parties may be placed in statu quo.
In equity tbe case seems to fall witbin tbe third kind of fraud enumerated by Lord Hardwioke in Chesterfield v. Janssen, 1 Leading Cases in Equity, [*472], namely, fraud wbicb may be presumed from tbe circumstances and condition of tbe parties, and wbicb goes farther than tbe rule of law, wbicb is, that it must be proved, not presumed. But it is wisely established in tbe court of chancery to prevent taking surreptitious advantage of tbe weakness or necessity of another; wbicb knowingly to do, is equally against conscience as to take advantage of bis ignorance. But see Smith’s Manual of Equity, Title “ Actual Eraud,” pp. 67-70.
Judge Story, in tbe work above referred to, and in tbe sections immediately following that quoted 'from, covers tbe whole ground of equity upon this subject. 1 Eq. Jur., §§ 228, 229. He says: “ But courts of equity deal with tbe subject upon tbe most enlightened principles, and watch with tbe most jealous care every attempt to deal with persons non compotes mentis. Whenever, from tbe nature of tbe transaction, there is not evidence of entire good faith (itberrimce ficlei), or tbe contract or other act is not seen to be just in itself, or for tbe benefit of these persons, courts of equity will set it aside, or make it subservient to their just rights and interests. Where, indeed, a contract is entered into with good faith, and is for the benefit of such persons, such as for necessaries, there courts of equity will uphold it, as well as courts of law. And so, if a purchase is made in good faith, without any knowledge of the incapacity, and no advantage has hem taken of the party, courts of equity will not interfere to set aside the contract, if injustice will thereby be done to the other side, and the parties cannot he placed in statu quo, or in tbe state in which they were before the purchase.”
“ And not only may contracts and deeds of a person non [285]*285compos be thus set aside for fraud, but other instruments and acts of tbe most solemn nature, even of record, such as fines levied and recoveries suffered by such a person, may in effect be overthrown in equity, although held binding at law. For, although courts of equity will not venture to declare such fines and recoveries utterly void, and vacate them, yet they will decree a re-conveyance of the estate to the party prejudiced, and hold the conuzee of the fine, and the demandant in the recovery, to be a trustee for the same party.” And if the mortgage had been foreclosed by suit in equity without the appointment of a guardian ad litem, or without answer from, such guardian, it would have been error for which the decree would have been reviewed and reversed upon bill or action for that purpose. Sturges v. Longworth, 1 Ohio State, 544, and authorities cited.
It follows from these views that the court below should have granted the relief asked by the defendant in Ms answer. The foreclosure proceedings and the sale should have been set aside, and the deed thereupon executed canceled, or the title adjudged to be in the defendant as administrator of the estate of Gretman, subject to the lien or incumbrance for the amount found due upon the mortgage. It appears that the defendant was proceeding to sell the premises under the license and order of the probate court, when the plaintiff commenced this action to restrain Mm. It also appears that the land in question was all the estate or property of wMch Gretman, the mortgagor, died seized or possessed, and, consequently, that the defendant has no funds jn his hands belonging to the estate with wMch to redeem from the mortgage. Under these circumstances, the proper course would probably be for the circuit court to direct a sale of the mortgaged premises in this action, and that the administrator pay over to the plaintiff, out of the proceeds, the sum due upon the mortgage when the same shall be ascertained. And to this end it may become necessary that investigation be had as to the amount due upon the mortgage, and the fact determined whether any payment or payments have been made. And an account [286]*286of tbe rents and profits of tbe estate in tbe bands of tbe plaintiff may also be required; and for bis protection it may likewise be necessary to make tbe mortgagee a party. We give no positive directions upon these points, as we are not fully enough possessed of tbe facts to justify it, but make these suggestions for what they are worth to tbe court below and to tbe counsel and parties, supposing tbe nature of tbe case to be such as to render them applicable and proper.
By the Court. — Judgment reversed, and cause remanded for further proceedings according to law.