Elfe v. Cole

Benning J.

dissenting.

Cole mortgaged the lot of land, to the loan association, to to secure a debt nearly of the value of the land, and, without having paid the mortgage, died, leaving his interest in the land, as about his whole property.

Were his widow and children entitled to a year’s support out of the land in preference to the rights of the mortgagee ? If they were not, it is manifest that the Court below erred in refusing a new trial. I think, that they were not; and why I think so, I will now proceed to state.

*211There are two statutes on the subject to which, the question refers, one passed in 1838, the other in 1850. The former declares; that when any person shall die, leaving a widow and children, or a widow, or child, it shall and may be lawful for the executor or administrator thereof, to allow out of the effects of such deceased person, a reasonable support and maintenance for the space of twelve months, next ensuing, immediately after the death of such testator, or intestate, notwithstanding any debts, dues, or obligations, of said testator or intestate.” Cobb 296.

The statute of 1S50, substitutes the word, “ estate,” for the word, effects •” in other respects,it is like the statute of 1838, except, that it provides for the case in which,'there is no “ administration.”. Id. 298.

I take the legislative intention to have been, that the two words were to have the same meaning, and, that, a meaning which the word, estate,” as being the larger one, better expresses. I shall, therefore, use that word, when I have occasion to use either.

The allowance, then, was to be out of the “estate” of Cole.

The question, therefore, is, what was his estate in this lot of land ?

His estate in the lot, was either the whole interest in it, or only the equity of redemption in it; the whole interest, if the mortgagedeed conveyed no interest out of him, into the mortgagee; only the equity of redemption, if the deed conveyed the legal title out of him, into the mortgagee.

Now, I say, that the deed conveyed the legal title out of-him, into the mortgagee.

That the deed should do so, was certainly the intention of the parties to it. The words they use, are the very words which the law itself has selected, as the best and aptest of any, for expressing such an intention; are, indeed, the very words which do express the intention to convey the legal title, *212when they are used in any other sort of a deed. The mortgagor "gives,” "grants,” "bargains,” “sells,” the land, to the mortgagee.

I say, then, that the intention of the parties was, that the deed should convey the legal title, into the mortgagee.

The intention of the parties to a contract, is to govern, if there is not something making the intention illegal

Is there anything making this intention of the parties illegal ? Nothing, certainly, in the common law. On the contrary, there is in the common law, a rule which specially adopts and enforces this very sort of intention; a rule which specially says, that the deed of mortgage conveys the legal title into the mortgagee.

Is there any statute making this intention, illegal, and so repealing this rule of the common law ?

That there is none doing it expressly, is certain; and that this fact is so, is of itself, almost, sufficient to require us to say, that there is none doing it impliedly; for it must be most improbable, that the Legislature, if intending to repeal so important a rule, would adopt the indirect mode of repeal by implication, in preference to the direct mode by expression.

Is there, then, any statute which, by implication, repeals this rule ? any statute repugnant to it ? any statute saying, that the deed of mortgage, shall not convey the legal title into the mortgagee ?

In Davis vs. Anderson, (1 Kelley 193,) it is said, that " A mortgage in this State, is nothing more than a security for the payment of the debt; and the title to the mortgaged property remains in the mortgagor, until foreclosure and sale in the manner pointed out by statute.” This would seem to say, that a mortgage being in this State, but a mere security for the debt, is owing to some law peculiar to this State; and, that any law making a mortgage but a mere security for the debt, makes it such a thing, that it cannot convey the legal title, into, the mortgagee.

If these two propositions are true, I admit, that there must *213be some law of Georgia, which, by implication, repeals the common law rule. Are they true, then ?

First as to the first: I say, that by the common law itself, (considering equity as a part of it,) a mortgage is nothing else than a security for a debt, and has been nothing else, for ages.

They” (courts of equity,) “soon arrived at the just conclusion, that mortgages ought to be treated, as the Roman law had treated them, as a mere security for the debts due to the mortgagee.” 2 Story Eq. Sec. 1013 ; see Section 1016.

“ So in mortgages. being only a lender, as the other,” (a bond,) is a personal security for the money lent,” &c. 3 Black 433.

Equity having determined that the mortgaged debt shall be considered the principal, and the land a pledge,” &c. Coote on Mortgages 492

On this principal rests the doctrine of foreclosure, which we are about to consider, and in the application of which, the forbearance of equity on behalf of the mortgagor, seems to be carried to its utmost limits, even so far as, in some instances, to work a serious detriment to the mortgagee; for equity is ready to receive the excuses of the mortgagor not only for the purpose of giving him time to procure the money previously to the foreclosure, but also for the purpose of opening the foreclosure, even after many years quiet possession by the mortgagee, under an absolute decree of foreclosure, confirmed, signed, and enrolled.” Ibid.

In one case, the foreclosure was opened after sixteen years.” Id. 496. See, Burgh vs. Langdon, 15; Viner, 476; 2 Eq. Ca. Ab. 609; do. 605; Cocker vs. Bevis, 1 Ch. Ca. 61.; Ismood vs. Claypool, 1 Ch. Rep. 139; Ford vs. Wastell, 6 Hare, 229; 2 Phul. 591; Edwards vs. Cunliffe, 1 Madd. 287; (“ in which the period for payment was enlarged the fourth time.”) Eyre vs. Hanson 2 Beav. 478 ; Geldard vs. Hornby, 1 Hare, 251; Jones vs. Creswick, 9 Sem. 304; Ellis vs. Grif*214fith, 7 Beav. 83 ; Alden vs. Foster, 5 Beav. 592 ; Garlick vs. Jackson, 4 Beav. 154; all cited in the same work.

It is true then, that by the common law itself, a mortgage is nothing but a security for the debt. It, therefore, did not require any law peculiar to this State, to make a mortgage, but a security for the debt. The common law, which this State shared with England, and its sister States, was quite sufficient to do that.

The first of the two propositions, then, is not true. I pass to the second.

Is it true, that any law which makes a mortgage to be, but a security for the debt, makes the mortgage such a thing, that it cannot, convey the legal title of the mortgaged property, into the mortgagee ? In other words, can it not be, that a mortgage may be only a security for the debt, and yet, convey the legal title into the mortgagee ?

By the common law, as we have seen, a mortgage is but a security for the debt, and yet by that law the mortgage conveys the legal title into the mortgagee. This all admit; and this, of itself, is conclusive. But I go on.

Whatever gives the creditor, the legal title to his debtor’s property, gives him the very best means of applying that property, to the payment of his debt. To say, therefore, that the mortgage gives the mortgagee, the legal title to the mortgaged property, is, to say, not, what will prevent the mortgage from being a security for the debt, but, what will render it a better security for the debt.

The pawnee has the legal title to the pawn; the vendor of land who gives only his bond for titles, has the legal title to the land; the trustee in a deed of trust, with a power to sell, and pay himself his debt, has the legal title to the trust property; the assignee in a deed of assignment to secure creditors, has the legal title to the assigned property 5 yet, in all of these cases, there is nothing but a security for the debt.

Or, is it to bo said, that in these cases, also, the legal title *215is not in tbe pawnee, and the other creditors, respectively ? There is the same reason that this should be said in these bases. But nobody has as yet gone that length.

It may well be, then, that a mortgage may be only a security for the debt, and yet, may convey the legal title into the mortgagee. It, follows, that the second of the two propositions, cannot be true.

The two propositions seem to be the foundation on which Davis vs. Anderson, (l Kelley) rests.

Thus far, then, we find nothing to repeal the common law rule, that the mortgage conveys the legal title into the mortgagee.

Is there any thing else, as to which, it might be argued, that it repeals this rule ? One ihing else, I have heard mentioned, is, the foreclosure law contained in the Judiciary Act of 1799. That law, in defining “the method of foreclosing mortgages on real estate,” says after providing for a rule nisi, that “ unless the principal, interest and costs be so paid, the Court shall give judgment for the amount which may be due on such mortgage, and order the property mortgaged to be sold in such manner as is prescribed in cases of execution, and the money shall be paid to the mortgagee or his attorney; but where there shall be any-surplus, the same shall be paid over to the mortgagor or his agent.” Cobb 1137. This is saying, that on foreclosure, the property, instead of becoming absolutely the mortgagee’s is to be sold by the Sheriff, and the money arising from the sale of it, or so much as may be needed, is to be applied to the payment of the debt. But is that saying what repeals the common law rule which puts the legal title, into the mortgagee ? Is that saying what is repugnant to the common law rule? May it not be, that this sale by the Sheriff, &c., may take place, and yet the legal title be in the mortgagee ? Most, assuredly. The vendor of land who merely gives his bond for titles, retains the legal title in himself, and, to secure the purchase money. Yet lie may have a decree in equity, for the sale of the land *216and the application of the money arising from the sale, to the payment of the purchase money; and this decree is a thing that has to be executed by the Sheriff, The same is true of the pawn-broker and his pawn. The same is true, in many of the cases of assignments, to secure creditors, and, in many of the cases of other deeds of trust, to secure the payment of money.

Nay, in many cases of mortgages themselves; those mortgages which, beyond question, put the legal title into the mortgagee, this same thing has always been true, by the common law. A rule that the mortgaged property shall be sold under judicial process, and the proceeds of the sale be applied to the payment of the mortgage debt, is no new rule.

In all cases in Ireland and in many cases in England, this has always been the rule.

In Ireland, it is the practice, instead of a foreclosure, to pray that the estate may be sold, and the moneys applied in satisfaction of the encumbrances, ’and the surplus paid to the mortgagor.” Coole Mort. 493.

Yet did ever any body hear the idea advanced, that in Ireland, the mortgagee does not have the legal title.

“ In certain instances, also in England, a decree for a sale instead of foreclosure, may be obtained; as, if the mortgage be of a dry reversion, or if the heir of the mortgagor be an infant.” “ It also seems, that if the bill for foreclosure be taken juro confesso, the Court will order a sale; and if one of the executors of the mortgagee be himself the mortgagor^ the bill by the executors, shall be for a sale. If the mortgagor die, and the heir and executor be the same person^ who by his answer admits the personal estate deficient for payment of debts, a sale may be obtained in the first instance without a reference for an account of the personal estate. Lord Hardwick seems to have thought, if the security was scanty, a sale might be decreed.” Id. 493, 494.

Mr. Fanblanque” observes, the safer course is, for the *217mortgagee to pray a sale; but note, he cannot pray a sale, without previously praying a foreclosure.” Id. 495.

Many cases are cited for these positions; 13 Ves. 205; How vs. Vigures, 1 Ch. Rep. 18, ; 16 Viner, 476 ; Booth vs. Rich, 1 Vern., 295; Scholfield vs. Heafield, 7 Sim., 669; Mondey vs. Mondey, 1 V. and B. 293; Davies vs. Dounding, 2 Keen., 245; Foster vs. Eddy, 18 L. J., Ch. 151 N. S.; Dashmoode vs. Bithazey, Moseley, 196 ; Lucas vs. Seale’ 2 Atk. 56; Daniel vs. Skipwith, 2 B. C. C. 158; Earl of Kennoul vs. Money, 3 Swans, 208, n. ; Powell on Mortgage, 1015.

Now, would it not astonish an English lawyer to be told, that the legal title, in all of these cases, was not in the mortgagee.

But, if, in these cases, various and numerous as they are, there is no repugnancy between the law which provides for a sale of the mortgaged property, and the law which causes the legal title to pass into the mortgagee, it cannot be, that there will be any repugnancy between the two laws, in any case.

Hence, I say, that the foreclosure law, aforesaid, in the Act of 1799, is not repugnant to the common law rule, which clothes the mortgagee with the legal title. Indeed, this very provision itself, speaks of “foreclosing,” “ foreclosure,” — words implying the existence of the legal title in the mortgagee.

But at least, I may say, that there is no necessary repugnancy, between this foreclosure rule in the Act of 1799, and the common law rule which puts the legal title into the mortgagee ; and if I may, that is enough; for the repeal by implication never takes place, except in the case in which the repugnancy between the two laws is necessary. Especially is this true, if a repeal would be followed by important changes. And a repeal if it took place here, would be followed by very important changes; changes greatly to the disadvantage of the mortgagee, as a security. Let us see.

*218The mortgagee with the legal title in him, is the owner of the property. Therefore he can defy liens and claims that are merely against the mortgagor or his property, if they are of younger date than the mortgage. And what a number and variety of these liens or claims there may be. The mortgagor’s widow’s right of dower, is a claim against his estate; the right to a year’s provision, which the mortgagor’s widow and children are entitled to, in preference to any other lien, &c., (the right in question in the present case,) is a right against his “ estatethe lien of carpenters, masons, &c., for work which they have done for the mortgagor, is a lien against his property; the claims of orphans against a mortgagor, as guardian, or as executor, or as administrator, which claims he leaves unpaid, at his death, are claims against his estate-Here are some of these liens and claims. These being all against the property of the mortgagor, the mortgagee, with the legal title in him, may safely defy them, if they are younger than his mortgage. Because, in that case, they are not even against the interest which he has, in the property, but only against whatever may remain of the property after his interest has been taken out of it; in a word, they are only against whatever is the mortgagor’s interest in the property. Whereas, the mortgagee, with the legal title not in him, but in the mortgagor, has to succumb at once, to any of these liens and claims, no odds how young they may be, for the law gives them all a preference over his mortgage, if it is but a mere lien on the mortgagor’s property.

Again; the rents go with the legal title. Therefore, if the legal title does not go into the mortgagee, he loses the security of the rents.

So, the covenants of warranty, and other covenants real, contained in the mortgage, become worthless, absurd.

Again, the terms, alienation, conveyance, title, and similar ones, are of constant recurrence in contracts, in statutes, and in other writings. With the legal title in the mortgagee, they *219include mortgages; not, with it not in him. What changes are shadowed forth here.

Finally, if we say, that a mortgage’s being but a mere security for money, is reason enough to prevent the mortgage from taking the legal title out of the mortgagor, and putting it into the mortgagee. Then, we must say the like thing, in like cases.

A pawn is but a mere security for money; when a man sells land, giving a bond, for titles to be made on payment of the purchase-money, the bond is a security, for the money; the deed of trust, made by the borrower to the lender, with a power of sale to pay the lent money, is a mere security for money; the assignment to trustees for the benefit of creditors, is a mere security for money. These, then, are all like cases.

Therefore we ought to apply the principle to them, and say, that the legal title is not in the pawnbroker; not in the vendor; not in the lender; notin the assignee; but, in, the pawnor; the vendee; the borrower; the insolvent assignor. Consistency requires us to go this length.

These then, are the changes,' or some of them, to be wrought, by holding that the part of the Judiciary Act of 1799, relating to the foreclosure of mortgages, repeals the common law rule which puts the legal title into the mortgagee. Being so many, and so great as they are, I am sure I may say, that we ought not so to hold, unless obliged to do it; unless there is a necessary repugnancy between the rule and the Act.

Now, there is, between the two, no approach to repugnancy, I think; I feel sure, no necessary repugnancy.

It is not pretended, I believe, that there is any other Act that repeals the common law rule.

I come, then,- to the conclusion, that the deed of mortgage, in this State, still conveys the legal title, into the mortgagee. This is a conclusion which I have been struggling against, *220for some time. I can straggle against it no longer. The question it concerns is no light one.

I dissent from the judgment of the Court.