Chamberlain v. Martin

By the Court,

Marvin, J.

The legal point made by the plaintiff’s counsel is that the private sale of the property by Martin to Penfield, did not have the effect to foreclose the plaintiff’s right to redeem the property. He claims that a private sale was unauthorized by the mortgage, and that in such a case the equity of redemption can only be foreclosed upon a reasonable notice to him. That the same principle should be applied as in the case of a pledge.

The mortgagee was authorized to sell in case of default in making payment. The mode of sale is not specified. There is no limitation upon the power. The mortgagee may sell and apply the avails, after deducting expenses of sale, &c. If he should take possession because he deemed himself insecure, then the power to sell at public or private sale previous to the time for payment, is expressly given. Was it intended to make a distinction, as to the mode of sale, in the two cases? I think not. But the argument goes further. It is that a reasonable notice of sale must always be given to the mortgagor, or the equitable right to .redeem is not lost or barred. In short, that the sale is the same as in the case of a pledge. There is a very marked difference between a pledge and a mortgage, as to the rights of the. parties after default in payment.

*610A pledge is a deposit of personal effects to be retained until redeemed. And although the time for redemption is specified by the agreement of the parties, and the pledgor suffers it to pass and is thus in default, still the property remains in pledge only, and the right to redeem continues until it is foreclosed by acts sanctioned by the law.

“A mortgage is a pledge and more; for it is an absolute pledge to become an absolute interest if not redeemed at a certain time.” (Jones v. Smith, 2 Ves. Jun. 378.) Perhaps the definition is not, at this day, precisely accurate. A pledge is the bailment of property. In the case of a mortgage, the property may remain in the possession of. the mortgagor. A mortgage of chattels is a sale of them, upon condition, and it the condition is not performed the title becomes absolute at law. The mortgagee becomes, by a failure to perform the condition, a vendee, and he has in law an absolute power over the property. But as cases of great hardship may arise from a failure to perform the condition on the day, which was to render the sale void, courts of equity will grant relief if the mortgagor brings his bill within a reasonable time. As the title is absolute at law, in the mortgagee, immediately after default in performing the condition, I do not see why he may not sell the property, and give to his vendee a perfect title, assuming such sale to be fair and bona fide. He is under no obligation to anticipate that the mortgagor may desire to redeSm, and so wait for him to do so. If he and his vendee act in fraud of the equitable right of the mortgagor to redeem, a court of equity may undoubtedly give relief in an action against the mortgagee and his vendee to redeem.

In the present case it is found as a fact that the sale made by Martin, the mortgagee, to Penfield “was a fair sale in the then condition of the market.” It seems to me that this disposes of the question of the right of redemption. If it was intended to question the fairness of the sale to Penfield, he should have been made a party, as the remedy by redemption *611is to obtain the specific property mortgaged. The question touching the rights of the parties to the sum obtained from Penfield is not involved in this action. The sum was not sufficient to pay the debt owing by the plaintiff (the mortgagor) to the defendant (the mortgagee.)

[Erie General Term, May 2, 1865.

The judgment can not be reversed upon the ground that material facts found are unsupported by evidence, or were found against the weight of evidence.

I have consulted the following authorities, most of them cited by counsel: Story on Bailm. § 287 ; 3 Denio, 33 ; 12 Wend. 61; Hart v. Ten Eyck, 2 John. Ch. 62; Wheeler v. Newbould, 16 N. Y. Rep. 392; Champlin v. Johnson, 39 Barb. 606; Dane v. Mallory, 16 id. 46; Burdick v. McVanner, 2 Denio, 170; Case v. Boughton, 11 Wend. 106; 40 Barb. 179 ; Story’s Eg. §§ 1030, 1031; 4 Kent’s Com. 138; 1 Pars. on Cont. 452, 591.

Judgment affirmed, with costs of the appeal..

Grover, Daniels and Marvin, Justices.]