[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 155
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 156 This action has been twice tried. On the first trial the plaintiff recovered, on proving title in Sanborn; a mortgage from him to the Washington County Bank, July 7, 1856; its assignment to the Washington County National Bank; the affidavits in the foreclosure proceedings; a deed from the bank (the purchaser on the mortgage sale) to the plaintiff; and that the defendant was in possession of the premises. The plaintiff upon this proof, maintained his right of action, provided the affidavits showed a compliance with the statute relating to the foreclosure of mortgages by advertisement. The judgment on the first trial was reversed by the Commission of Appeals, on the ground that the affidavit of service of the notice of sale upon the mortgagor and others, did not show that service had been made as required by the statute. The affidavit was made by the attorney who conducted the foreclosure, and it alleged a service, by mail, upon the mortgagor, and other persons, of the notice of sale, by *Page 159 depositing notices in the post-office addressed to the persons named at the places mentioned, and that at the time "each of the said persons resided, as the deponent is informed and believes, at the respective places to which the said notices were so addressed."
The notice to the mortgagor was, as appears by the affidavit, mailed at Greenwich, directed to him at Sandy Hill, and the only evidence that he resided there, given on the former trial, was the statement in the affidavit made upon the information and belief of the affiant. The Commission of Appeals (EARL, C., dissenting) held, that this was not competent or legal evidence of the fact, and that the case stood without proof that notice of the sale had been served on the mortgagor, and consequently, that the plaintiff had failed to establish a valid foreclosure of the mortgage.
On the last trial the judge permitted oral evidence to be given, that the mortgagor resided at Sandy Hill, where the notice mentioned in the affidavit was mailed, and the judge found as a fact that he then resided at that place; but on the final decision of the case he disregarded this evidence and refused to consider it, on the gronnd that oral evidence of the residence of the mortgagor was not admissible to establish the regularity of the foreclosure or to supply the defect in the affidavit of service; and judgment was given for the defendant, which was affirmed by the General Term, and is now before us for review.
The principal question in the case is the one already suggested, viz., was evidence admissible to prove that the mortgagor resided at Sandy Hill when the notice was mailed? or, the question involved is still more comprehensive, viz., when title is claimed under the foreclosure of a mortgage, by advertisement, may the fact of the service of notice of sale, upon the mortgagor or other persons affected by the proceedings, be shown in support of the title, by any competent common-law evidence, in the absence of an affidavit showing such service? The right of a mortgagee to extinguish the equity of redemption by a sale of the land without judicial proceedings or the *Page 160 decree of the court, depends upon the existence of a power of sale in the mortgage or other instrument executed by the mortgagor. If a power of sale is not given, the mortgagee must resort to a court of equity to enforce the mortgage. This principle of the common law has been retained in the statute for the foreclosure of mortgages, by advertisement, which only authorizes this proceeding in cases where the mortgage contains a power of sale. (2 R.S., 545, § 1.)
In the absence of a statute regulating the mode of executing the power the mortgagee may sell the land at public or private sale, unless the particular manner of sale is prescribed by the instrument creating the power (Davey v. Durant, 1 De Gex and J., 535; 2 Wn. on Real Prop., 77), in which case the mortgagee must, in executing the power, conform to the conditions imposed. The mortgagee could not at common law become the purchaser on a sale made by himself under the power, or at least such a sale was voidable at the election of the mortgagor. He could not at the same time be a trustee of the power of sale, and a purchaser under it. (1 Sug. on Vend., 94; 3 id., 229; Wash. on Real Prop., 77.) And, where a sale was made under the power a deed from the mortgagee to the purchaser was necessary to pass the title. (Arnot v. McClure, 4. Den., 44.)
The mortgagee under the law of England has the legal title to the mortgaged premises, and under our law it remains in the mortgagor until foreclosure, but in either case a deed is necessary to satisfy the statute of frauds, and to vest the title in the purchaser, unless the legislature has interfered and created an exception, or has substituted some other evidence of title in place of a common-law conveyance.
When a power of sale is given to be executed under certain conditions, or its execution is made by the terms of the power to depend upon the performance of precedent acts, and the validity of a conveyance made in assumed execution of the power is in question, oral evidence of a compliance with the conditions, is admissible, unless such proof is excluded by the nature of the conditions imposed, or the terms of the power. *Page 161 In Hawley v. Bennett (5 Paige 104), entries in the register of an attorney, who conducted a foreclosure by advertisement, were admitted after his death in support of the title under a deed given on the foreclosure, to show a compliance with the statute, and the circumstances of the sale. The foreclosure was before the statute of 1808, which made affidavits of the parties, etc., prima facie evidence, and in Arnot v. McClure, BRONSON, Ch. J., says: "Before we had any such statute the regularity of the proceedings could only be established by common-law evidence; and any kind of common-law evidence was admissible." When title to real estate is claimed under a conveyance purporting to be made in execution of a power, which by its terms is to be exercised in a certain event or after notice to the grantor or third person, or the doing of any other act by the grantee of the power, oral evidence of the happening of the event or of the performance of the condition precedent, does not add to, vary, or contradict the deed, but is consistent with it, and is admissible to show that the grantee of the power acted within his authority.
The statute for the foreclosure of mortgages by advertisement was passed to regulate the mode of executing the power of sale, when given in the mortgage. The statute as originally enacted, provided for notice of the sale to be given by publication and posting (1 R.L., 376), and in 1844, the statute was amended by requiring in addition, that the notice should be served personally or by mail on the mortgagor (chap. 346, Laws of 1844, § 5), and in 1857 the statute was further amended providing that a copy of the notice should be delivered to the county clerk, to be affixed in a book in his office, and that an entry of the time of receiving and affixing it should be made. (Chap. 308, Laws of 1857.) All these several acts required to be done, were parts of the notice to be given, and were to be performed prior to the sale, at the times specified in the statute. These statute requirements were conditions precedent to a valid sale under the power and have the same effect as if they were inserted in the mortgage, and a person claiming title under a statute *Page 162 foreclosure, assumes the burden of showing that they were performed. But unless the statute has otherwise provided, it seems not to admit of doubt that the publication, posting and service of notice on the mortgagor and other persons can be proved by oral testimony, in fact this would usually be the only available proof. The legislature, by an act passed in April, 1808, first made the affidavits of the printer, etc., when recorded, prima facie evidence of the publication and posting of the notice of sale, and of the circumstances of the sale. This was an innovation upon the common-law rules of evidence, and the object of the statute was to enable the purchaser to perpetuate the evidence of the facts upon which the validity of the sale depended. The same statute authorized the mortgagee to purchase, and both of the provisions referred to were embodied in the act concerning mortgages. (Chapter 22 of the Laws of 1813; 1 R.S., 374, §§ 7-10.) The sixth section of that act contemplates that a deed should be given to the purchaser on the sale, and until the act of 1838, which will be hereafter referred to, this was necessary to pass the title, except where the mortgagee was the purchaser. In that case no deed could be given, as the mortgagee could not convey to himself, but as the statute expressly recognized his right to purchase, and made no provision for a conveyance, the court held in Jackson v. Colden (4 Cow., 266), that on a purchase by the mortgagee, the title passed by force of the statute, without a deed. Some effect appears to have been given to the fact that affidavits had been made and recorded, showing a sale to the mortgagee.
In the revision of 1830, an entirely new provision was inserted in the statute, being section 12, now section 14, for the purpose, as the revisers say, of removing doubts which had been excited respecting the evidence of title acquired on a purchase by a mortgagee, and to "declare the law as now understood." (5th Ed. St., 764.) That section as originally passed provided that when the mortgaged premises were purchased on the sale by the mortgagee, his legal representatives or assigns, the "affidavits of the publication and affixing notice *Page 163 of sale, and of the circumstances of the sale, shall be evidence of the sale and of the foreclosure of the equity of redemption as herein specified, without any conveyance being executed, in the same manner, and with the like effect as a conveyance executed by a mortgagee upon such sale to a third person." This section came under the consideration of the court in Arnot v. McClure. In that case the assignee of a mortgage, foreclosed it under the statute and became the purchaser, and affidavits of publication and posting of the notice, and of the circumstances of the sale were made and recorded. In the affidavit of the circumstances of the sale, the boundaries of the property sold as therein given, did not embrace a portion of the mortgaged premises, and oral proof was offered to show, that in fact, the whole premises were sold, and that the portion not embraced in the description in the affidavit was by mistake omitted. The proof was rejected on the trial, and on appeal the ruling was affirmed. The court held, in an opinion by BRONSON, Ch. J., that affidavits were necessary to complete the title when the mortgagee or his assignee was the purchaser on the foreclosure; that in that case, as no deed could be given, the affidavits were, by the true construction of section 14, to have the force and effect of a conveyance by the mortgagee to a third person, "and to perform the double office of proving the regularity of the proceedings to foreclose, and standing as a conveyance to the purchaser;" and from these provisions the conclusion was reached that the mortgagee, or his assignee, could not be permitted, by oral proof, to contradict, impeach, or supply an omission or defect in the affidavits "any more than he could a conveyance by deed." Section 14 was an important addition to the previous law. As construed in Arnot v. McClure it resolved the doubt which existed under the statute as it previously stood, and affirmed the general policy of the law which does not permit a title to real estate to pass without a conveyance in writing, by declaring that the affidavits mentioned should, when the mortgagee became the purchaser, stand for a conveyance of the land. This section was *Page 164 amended, in 1838, by allowing a substitution of the affidavits, specified therein, in all cases, in place of a deed; but when the purchaser was a third person a deed might still be given and the title supported by oral proof of a compliance with the provisions of the statute. (Arnot v. McClure.)
In the case now before us the assignee of the Sanborn mortgage became the purchaser on the foreclosure; affidavits of the publication and posting of the notice of sale and of the circumstances of the sale were made and recorded and were produced on the trial, together with the affidavit of notice of service on the mortgagor, which the Commission of Appeals decided to be defective in the respect before mentioned. It is very clear, I think, that oral proof was admissible to establish the omitted fact, viz., that the mortgagor, when the notice was served, resided at Sandy Hill, unless the affidavit of service was a part of the statute conveyance provided for in section 14. It cannot be so held unless we can incorporate into that section, with the other affidavits mentioned, the affidavit of service which was first provided for in 1844; and if this can be done, the affidavit of affixing the notice in the books of the county clerk, provided for by the act of 1857, must also be deemed included. Neither of these affidavits are specified in the section. If, when section 14 was passed, notice had been required to be served on the mortgagor and to be put in the books of the clerk, it is very probable that the affidavits of these facts would have been made a part of the statute conveyance. It would certainly contribute to the symmetry and completeness of the system, and to the security of foreclosure titles, that all the prerequisites to a valid foreclosure should be shown by affidavits, and made a part of the statutory title. But we can see no justification for construing section 14 as it stands, as if the affidavits of service and of affixing notice in the books of the clerk, were mentioned in it. The argument that such a construction would be a protection against frauds and prejudices, will not justify it. In Tuthill v. Tracy (31 N.Y., 157), it was held that a sale made pursuant to the statute *Page 165 bars the equity of redemption, without affidavits being made, and if now a deed is given on the sale, without affidavits, the facts (according to the opinion in Arnot v. McClure) of publication, posting, etc., may be established by oral evidence. In each of these cases the danger of fraud and perjury, is the same as is suggested here.
The production of the affidavits mentioned in section 14, without proof of service on the mortgagor, or of affixing notice in the clerk's office, are not, since the amendments of 1844 and 1857, evidence of a complete foreclosure. By the eighth section, it is a sale conducted as "herein prescribed," which bars the equity of redemption, and the party claiming title under the foreclosure would be bound to show all the facts necessary to a valid sale before he could recover under it, and we think the true construction of the fourteenth section in this respect is, that the affidavits therein mentioned, when no deed has been executed, are evidence in the same manner, and to the same extent of a foreclosure as they would be if a deed had been executed.
We are of opinion, for the reasons stated, that the oral evidence of the residence of the mortgagor at the time the notice was served was competent and should have been considered by the learned judge on the trial.
There are several other objections to the foreclosure which will be briefly considered:
First. The amount claimed in the notice of sale, to be due on the mortgage at the time of the first publication, was $4,845.35. It is insisted that only $3,000 was secured by, or could be collected on, the mortgage, and that the sale was void by reason of the excessive claim made in the notice. Without considering whether the claim of a much larger amount to be due than was due, would, in the absence of fraud, invalidate the proceedings, we are of opinion that it does not appear that the amount claimed was more than was secured by the mortgage. The mortgage was given to secure the commercial paper of the mortgagor, or paper on which his name appeared as maker, drawer or indorser, then held by *Page 166 the bank, or which should thereafter be discounted, or held by the bank, and the condition contains this clause; "but this mortgage is not to be security for over $3,000, at any one time, and is not to extend to any paper received or discounted after three years from the date of this mortgage." The mortgage was collateral to a bond in the penalty of $6,000. The mortgagor covenants in the mortgage to pay the paper held by the bank when it becomes due and the interest thereon, and in case of non-payment at the times limited, etc., the mortgage authorizes the bank to sell the mortgaged premises, and out of the moneys arising on the sale "to retain all the principal money and interest remaining unpaid on said notes."
The mortgage was dated in July, 1856, and the notice of foreclosure was first published in April, 1868. We think the clear meaning and intention was, that the mortgage should be security for $3,000 of the principal due on the paper held by the bank and the accrued interest thereon, and upon this construction it does not appear that the amount claimed in the notice exceeded the amount secured and unpaid on the mortgage. (See Brainard v.Jones, 18 N.Y., 35.)
Second. The mortgage was not given to secure unliquidated demands. (Butts v. Collins, 13 Wend., 156.) The liability of the mortgagor secured by the mortgage, was a liability then existing, or which should be incurred upon commercial paper. The extent of the liability could be ascertained by inspection of the paper, and a computation after crediting payments made. As the claim was not unliquidated, it is unnecessary to determine whether the statute authorizes a foreclosure by advertisement of a mortgage given to secure an unliquidated demand.
Third. The mistake in the date of the notice filed in the clerk's office, and as first published, were obvious on inspection of the notice, and could not have misled and did not invalidate the proceedings.
Fourth. It did not appear affirmatively that the affidavit of publication was untrue, or that due publication had not been made. *Page 167 We think the judgment should be reversed on the point first considered, and a new trial granted.
All concur.
CHURCH, Ch. J., ALLEN and RAPALLO, JJ., were also of opinion that the affidavit of service was sufficient.
Judgment reversed.