Wendell V. New-Hampshire Bank

9 N.H. 404

• Court: Superior Court of New Hampshire
• Decided: December 15, 1838
• Status: Published

Opinion

Pabker, C. J.

The statute of July 3, 1829, prescribing the time and mode of redeeming real estate mortgaged, after enacting that lands, &c. conveyed in mortgage may be redeemed, after condition broken, by payment of the debt or damages, and the costs if any; provides, that if the mortga-' gee, or person having his estate, shall, after the condition is broken, enter peaceably, either under process of law or without such process ; or, being in possession at the time-the condition is broken, shall give notice, &e., and shall remain in the peaceable and continued actual possession for the space of one year after such entry or notice—then, unless payment or a legal tender thereof be made within the year, the mortgager, and all claiming under him, shall be forever barred and foreclosed of the right to redeem.—So far as the present case is concerned, this proviso is but the enactment of a preexisting rule. The plaintiff in this case, however, cannot defeat a foreclosure by reason of any tender alleged in his bill, because the bill itself admits, and the; proof shows, that the offers to pay. as set forth in the bill, were conditional, the plaintiff offering to pay if the defendants would reassign and transfer to him. Such conditional tender is not sufficient. 4 N. H.R. 40,Robinson vs. Batch-elder ; 3 Pick. R. 48, Loring vs. Cooke. The plaintiff, if he intended to rely upon a tender for the redemption of a mortgage after condition broken, should have made an unconditional offer of the money, instead of requiring an assignment. If he was alleging that the terms of the contract had been duly performed on the one side, and seeking a specific performance on the other part, that might have presented a different case. If the money had been tendered within the three years, the plaintiff might, perhaps, have required a reassignment without impairing his tender, the bank having contracted in such case to reassign. 1 Cranch 33.0, Hepburn vs. Auld.

If the provision of the statute before cited stood alone, it might be necessary for a mortgager, or person having his estate, to pay or tender at his peril the full amount of the debt or damages, &c. within the year. But the second section of the act, which enacts that after payment, or a legal tender of payment, the mortgage shall be void, and author-the mortgager in such case, if the mortgagee refuses to execute a release, to sustain a petition, also provides, that if the mortgagee, &c. shall refuse to make out and deliver to the mortgager, &c. a just and true account of all his debts secured by the mortgage, and all damages and costs sustained and incurred by reason of the non-performance of the condition of the same, and of all rents and profits by him -received, the mortgager, &c. may apply by petition to the justices of the superior court, &c. ; and if it shall be found that the mortgagee, or person having his estate, has unreasonably refused to make out or deliver an account, the court shall determine the amount justly due, after deducting the rents and profits received by the mortgagee, &c., and the amount being brought into court, &c., the court shall decree that the mortgage be discharged.

The plaintiff alleges such demand and refusal, and relies upon this latter provision of the statute. This provision was incorporated into the act, upon the revision of the statutes in 1829. There has been no suggestion of any objection, because this part of the statute is a new enactment, adopted since the mortgage of Abraham Wendell was made and transferred to the bank ; and we have considered the case the same as if such had been the rule prior to the execution of the mortgage. It is evident from this provision that there may be cases in which, although the mortgagee has had possession for the space of a year, and there has been no payment or tender of payment, yet the equity of redemption remains open. In order to pay, or tender, the party ought to know what is due ; but in many cases the mortgager himself may have but imperfect knowledge on this subject, and the mortgagee, by withholding the information, might, if there was no right to demand an account, secure a foreclosure, by a refusal to render one. For this reason the legislature saw fit to provide for a process by which the estate might be redeemed after a refusal to make out an account of the sums due, although no tender had been made. But in making this provision no time has been particularly specified in which this account may be requested, and we do not see any good ground on which we can construe the statute so as to limit it to any period within the year in which payment may be made. Should we say that it must be within a reasonable time, before the expiration of the year, it would furnish at best but an uncertain rule. The provision was intended to give mortgagers the full benefit of the right to redeem; and the fair inference seems to be that so long as payment may be made, so long the account of the sums to be paid may be demanded. There is nothing to require the mortgager to make the demand before he comes to pay. It may, then, be required at any time within the year.

If the circumstances of the case are such that he can do so, the mortgagee may stand ready to deliver the account when demanded ; and if he does, and renders a true account, there seems to be nothing in the statute, or in the nature of the case, which will extend the right of redemption beyond the year. In many cases, however, it would be difficult, and in some it would be impracticable, for the mortgagee to stand ready to render an account, such as is required by the statute, whenever it should be demanded, and he must therefore have time to prepare it. 2 Pick. 546, Fay vs. Valentine; ditto 540, Willard vs. Fiske; 13 Pick. 130, Putnam vs. Putnam. The refusal must be an unreasonable refusal. And in the mean time, the account having been regularly demanded, until it is prepared the equity of redemption continues open. This is plain from the provision of the statute that a petition may be presented to this court for a redemption, when the mortgagee, &e., has unreasonably refused to make out and deliver an account.

Of course no petition should be presented until a reasonable time has been allowed for the mortgagee, &c. to deliver an account; and if one is delivered in a reasonable time, it ⅛ the duty of the mortgager to pay within the year, if the case wjn admit of it; or if that time has expired before the account is rendered, then upon the rendition of the account, or within a reasonable time afterwards. Perhaps there may be cases in which the mortgager must have time given him in which to make the payment after the account is rendered, as for instance where it is furnished to him when he is absent from home, &c.

It has been argued in this case that the plaintiff is foreclosed, because an account has been rendered since the filing of the bill, and the money has not been paid. This might depend upon the question whether the bill was rightfully filed. In order to justify the filing of a petition there must be an unreasonable refusal to make out the account, or the account rendered must be erroneous. 4 Pick. 6, Battle vs. Griffin. Long neglect may perhaps be conclusive evidence of such refusal. If there has been no such refusal, the filing of a petition will not relieve the mortgager from the duty of paying whenever the account is duly rendered; but if the account is not rendered in a reasonable time, or if it is not just and true, so that it is proper for the mortgager to proceed by petition to redeem, and he has proceeded under the statute, the suit being well instituted the party has the right to his day in court, and the foreclosure is kept open until the decree, or termination of the process. He is not in such case bound to stop his process by reason of an account rendered after the proceedings are instituted; although if the mortgagee should, after process instituted, furnish a true ac~ cout, and the mortgager refuse to pay, that might, under some circumstances, furnish a reason, perhaps, for a limitation of the costs.

Such seems to us to be the true construction of the statute of 1829, and the only one which can carry all its provisions properly into effect. And we think this statute, so far as it extends, is to be applied in cases under the general chancery jurisdiction in relation to the foreclosure and redemption of mortgages, conferred by the statute of July 4, 1834. That statute enacts that this court shall have chancery and jurisdiction in all cases respecting the redemption and foreclosure of mortgages, and that the power and jurisdiction thus vested shall be exercised according to the established principles of chancery, as far as shall be consistent with the laws and constitution of this state. Such general words could hardly be construed as a repeal of the law of 1829, by implication, even if the last clause of the sentence had not been added. That, however, puts it beyond all controversy, and the jurisdiction thus given must be adapted to the statute of 1829, and governed by that statute in its substance, so far as it makes provision.

Where the mortgagee or his assignee has been in possession one year, according to the terms of that act, without tender of payment or demand of an account, the mortgage must be held to be foreclosed, notwithstanding the chancery powers granted by the act of 1834. And where an account has been demanded, and the mortgagee was not ready at the moment to comply, this demand cannot be construed as keeping the foreclosure open longer, under the statute of 1834, than the right to redeem was extended by the provisions of the former statute.

A bill in chancery may be substituted for a petition, by the mortgager, and one may be brought by the mortgagee, to foreclose, without an entry, and may embrace all parties interested, as subsequent incumbrancers, <fcc., a time may be set for the redemption, and the usual course in courts of chancery may be pursued, so far as the statutes have not provided ; but whenever the act of 1829 is applicable, it must govern the substance, although it may not the form, of the proceedings.

Chancery sometimes considers a conveyance a mortgage, when at law it could not be so considered. 2 Cowen 327, 332, Clark vs. Henry; 2 Story’s Eq. 287; 9 Wendell 227, Roach vs. Cosine. But the policy of the legislature here has been otherwise. The statute of July 3, 1829, instead of ad0pting the chancery principle, provides that no estate in fee simple, &c., “ shall be defeated or incumbered by any agreement whatever, unless such agreement or writing of defeasance shall be inserted in the condition of said conveyance, and become part thereof, stating the sum or sums of money to be secured,” &c. And the act of 1834, giving chancery powers in relation to the redemption and foreclos-sure of mortgages, provides for no new mortgage, or any new construction.

We come next to an examination of the titles set up by the parties.

Abraham Wendell mortgaged the premises to Dorothy Wendell. She assigned this mortgage to the N. H. Bank. The defendant Haven levied upon the land as the property of Abraham, and it was set off to him, subject to the mortgage, and he took an assignment from the bank. The plaintiff holds conveyances from Abraham and Dorothy Wendell, and he denies the validity of the levy of Haven ; and contends that the assignment of Dorothy to the bank was in mortgage, and that he has the right to redeem on the payment of the balance of her note to the bank. The defendants, on the other hand, allege that the levy was valid; that the assignment of Dorothy was not a mortgage but a conveyance upon condition, and that all right of redemption has been barred and foreclosed.

The extent by Haven upon the equity of redemption was invalid, having been made subject to the incumbrance. The mortgage of Abraham Wendell was made April 25, 1828, and the equity of redemption should have been sold under the provisions of the statute of July 3,1822. 2 N. H. Rep. 149, Coos Bank vs. Brooks; 4 N. H. Rep. 402, Pritchard vs. Brown ; ante 20, Kelly vs. Burnham; 11 Mass. R. 226, Warren vs. Childs; 16 Mass. 400, White vs. Bond; 7 Pick. R. 49, Carpenter vs. Sutton.

But the plaintiff is not entitled to redeem by the payment of the amount of the note of Dorothy Wendell to the bank, and the bill cannot be maintained to enforce such a tion, for several reasons.

If the assignment of Abraham Wendell’s mortgage, by Dorothy, to the bank, was to be regarded as a transfer of an interest in real estate, the authorities show very clearly that it cannot be regarded as a mortgage. The instrument by which the assignment was made is under seal, and purports to be an absolute transfer of the mortgaged premises, the deed of mortgage, and the debt. The instrument executed by the cashier, reciting that the transfer was received as collateral security for her note, and stipulating that the bank would reassign, if she paid her note according to its tenor, although in writing is not under seal,and as a transfer of an interest in real estate the writing could not, for that reason, operate as a defeasance. 2 N. H. Rep. 167, Runlet vs. Otis; ditto 71, Bickford vs. Daniels; 1 N. LI. Rep. 41, Lund vs. Lund; 8 Green. 246, French vs. Sturdivant.

If the assignment to the bank be regarded as a transfer of a chattel interest, the result seems to be the same. It was transferred by an instrument under seal; and if this was not necessary, still the instrument taken back, not being of as high a nature, is not to be regarded as part of the other, and cannot at law operate as a defeasance ; and it is by the principles which govern courts of law that we must determine whether this is a mortgage. 4 Mass. Rep. 443, Kelleran vs. Brown; 13 Mass. R. 447, Flint vs. Sheldon; 14 Pick. 479, Flagg vs. Mann ; 1 Pick. 399, Badlam vs. Tucker; 1 Powell on Mortgages, (Rand’s ed.) 151, a. n. 1; 1 Co. Rep. 113, Albany’s Case; 2 Black. Com. 342.

In Broten vs. Bement, 8 Johns. Rep. 75, (2d ed.) it does not appear whether the writing taken back was under seal, nor was that matter adverted to in the opinion.

The instrument gave Dorothy Wendell the right to reclaim the mortgage and note, on the payment of her debt, according to its terms ; and perhaps a right to redeem after the three years, as in case of a pledge, if no farther proceedings had been had; but this is not clear because the legal property was conveyed by the transfer, and the transaction was not therefore technically a pledge. 2 Caines' Cas. in Error 202, 210, Cortelyou vs. Lansing. This case it seems was not determined by the court, (5 Johns. Rep. 260) but the opinion has been fully recognized as authority. 10 Johns. 474, McLean vs. Walker ; 12 Johns. 149, Gar lick vs. James.

/ If, however, this assignment might be considered as a mortgage of a chattel—and but for the want of a seal to the instrument taken back it might well be so regarded—other difficulties would arise. Prior to the statute of July 4, 1834, before referred to, giving this court general chancery powers in relation to the redemption and foreclosure of mortgages, there was no statute provision here for a redemption of personal property mortgaged, after a forfeiture ; and the authorities show that upon the non-performance of the condition the property at law became absolute in the mortgagee. 2 Caines' Cas. in Error 202; 2 Vesey, Jr. 378, Jones vs. Smith; 8 Johns. 75, Brown vs. Bement; 7 Cowen 292, Ackley vs. Finch; 9 Wendell 80, Langdon vs. Bnel; ditto 258, Ferguson vs. Lee; 12 Wendell 61, Patchin vs. Pierce ; 1 Pick. 399 ; Story on Bailment 234, ch. 6, sect. 345, It was held, in Ferguson vs. Lee, that after such non-performance, the property mortgaged might be levied on as the property of the mortgagee.

Courts of chancery having general chancery powers appear to have decreed a redemption. 2 Story's Equity 297; 2 Johns. Ch. Rep. 62, 100, Hart vs. TenEyck, and cases cited; 12 Wendell 62. But no such chancery powers existed in this state.

There was here, then, when this transfer was made to the bank, and at the expiration of three years afterwards, when the condition, if it might be regarded as one, was broken by the failure of Dorothy Wendell to pay the money, no statute provision authorizing a redemption after forfeiture, nor any court having power to decree one. By the terms of the contract, and by the principles of law, if the assignment Abraham Wendell’s debt and mortgage was a mortgage of a chattel, it became the absolute property of the bank in October, 1831, long before her conveyance to the plaintiff, there being no right of redemption which could have been enforced after that time, 8 N. H. R. 361, Leighton vs. Shajpley.

If there had been no subsequent payment by Dorothy, upon her note to the bank, it would be very clear that the chancery powers conferred by the legislature in 1834 could not authorize us to decree a redemption in such case, although we may, by virtue of that statute, decree a redemption of chattels mortgaged after its passage, if there has been no foreclosure by sale, and the application is made iu season. Auth. ante.

Whether we can decree such redemption where the mortgage was made before the passage of the law, but the condition was not broken at the time, or whether such a construction of it would not make it a retrospective law, impairing a vested right, we need not now determine. 3 N. H. R. 473, Woari vs. Winnick; 2 Gallison’s R. 105, Society, &. vs. Wheeler.

Had the money been tendered within the time stipulated, we might perhaps have entertained a bill to enforce a specific performance of the contract to re-convey, notwithstanding the power to make such a decree has been conferred since the contract was entered into ; because that would be merely enforcing a right and duty which existed originally by virtue of the contract itself, although there was no process to enforce a specific performance of the duty.

Nor can the payments by Dorothy Wendell after October, 1831,affect the case. In Patchings. Pierce, 12 Wendell61, it is held that aceptance of part of the money is not a waiver of the forfeiture. If it were otherwise, no payment was received in this case after the passage of the act of 1834, and there has been, therefore, no admission, since that act, that the bank held the assignment subject to a redemption; and, moreover, the bank instituted a suit against Dorothy Wendell, who it seems was then tenant in possession, and recovered judgment against her at January term, 1835, as upon a mortgage, the conditional judgment being entered for the amount due on Abraham Wendell’s mortgage.

If the assignment might be regarded as a pledge for the payment of Dorothy’s debt—which, as before observed, may be questioned, because the instrument by which it was assigned conveyed the general and legal property, and purported to convey it absolutely—the bank, by these proceedings, must be held to have made it their own. They were equivalent to a bill for foreclosure, or notice to redeem and a sale of the pledge. 2 Johns. Ch. Rep. 62, 100; Story on Bailment 236 ; 2 Kent's Com. 453. They gave the premises to the bank by a judgment at law, unless the bank was paid the amount of Abraham Wendell’s mortgage.

If she had a right to redeem, as in case of a pledge, she should have brought the amount of her debt into court, with the costs, and prayed a stay of the further proceedings, or have had the conditional judgment entered for the amount due on her note. The judgment must be regarded as conclusive of the terms on which she had a right to redeem the land from the bank, and of consequence to redeem the transfer of the mortgage.

Under all these circumstances, this bill cannot now be sustained to redeem Abraham Wendell’s mortgage from the defendants by the payment of what might be found due on Dorothy Wendell’s note, and that puts an end to the plaintiffs case.

Whether the amount paid on Dorothy Wendell’s note might be considered a payment of so much of Abraham Wendell’s debt, having been paid by him, but, as he says, for her, it is of no consequence to enquire, because this bill is not brought to redeem from the mortgage of Abraham. There is, to be sure, an allegation that the sum due on his mortgage was tendered, if the defendants would reassign; and there is an allegation that an account of the amount due on it was demanded: but there is no offer to redeem that mortgage, and no relief prayed for upon the ground that the plaintiff is desirous so to do. 18 Johns. R. 544, 560, 5T0, Beekman vs. Frost, in Error.

Bill dismissed.