Fanning v. Kerr

Woodward, J.

The complainant takes the position,' that the instrument is not a deed of trust, but a mortgage ;' that a mortgage can be foreclosed only by action ; and that the mortgagee cannot sell by virtue of a power, such as- is* contained in the above instrument.

As one ground for the defendant’s inability to sell under1 this instrument, assuming it to be a' mortgage, the complainant refers to section 1210 of the Code, which provides' that £i in the absence of stipulations to the contrary, the *460mortgagor of real estate retains the legal title, and right of possession thereof.” From this, he argues that Kerr has not the title in himself, and therefore cannot convey it.

As another ground, he cites the act of February 25th, 1858, (acts 1858, 29), which enacts, “ that hereafter no mortgage of real estate shall be foreclosed in any other manner than by action in the proper court; provided, that nothing herein contained shall be construed to apply to deeds of trust. This he urges as a direct prohibition of such sale.

We are unable to concur with the petitioner, in giving this section so extended an application. It was not intended to interfere with the contracts of parties, nor to prohibit them, nor to take away the force of sec. 2097 of the Code. This section is contained in the chapter relating to the foreclosure of mortgages, and enacts that nothing in that chapter, is intended to prevent parties from fixing their own terms to any contract, and prescribing the manner in which those contracts should be enforced. It would be a very strong step for the legislature, to forbid parties making their own contracts, in such respects, and to compel them to go into the courts, even when they might make stipulations entirely satisfactory to both sides. Such a construction is to be adopted only, when there is no. just way of avoiding it. In the present case, there is a very clear application to be made of the general expression used in the above act. We all know the evil complained óf, which led to the above enactment, and that it was the summary foreclosure of mortgages by the sheriff, upon advertisement only. That this was the object of the act, is further manifest from its title, which is, “ an act concerning the foreclosure of mortgages, and amendatory of chapter 118 of the Code.” This chapter of the Code authorized the foreclosure by the sheriff, and without action, and also provided for foreclosure by action ; and it is in reference to this alone, that the act of February, 1858, enacts that no mortgage shall hereafter be foreclosed in any other manner than by action. It appears to us quite manifest, that this act *461intended only to take away that summary mode of proceeding by the sheriff. That was a provision of the law, and might well be repealed in a few words; whilst, if the intent had been to take away a power of contracting from parties, the title, the terms, and the manner of the act, would have been essentially different, and section 2097 would have been expressly repealed.

But further, the proviso in the section itself, enacts that it shall. not apply to deeds of trust. This makes the exception, which we have in view, substantially, if not entirely. The proviso needs not to be restricted to that which may be strictly and technically a trust deed. An instrument is equally a deed of trust, or one containing, or conferring a trust, whether it be for the grantee’s own benefit, or for that of another.

The petitioner contends that Kerr is not a trustee,' and quotes from Story and Parsons on Contracts, to show that a trustee is one who holds for the benefit of another. The writers thus cited, are speaking of trusts in their strict and technical sense. But every one knows that there is a broader sense to the term, in even more common use than this, the strict one. If this instrument fails, on this account, to be a trust, there must go with it a large class, which have hitherto been regarded’as such; and even assignments to a, creditor for his own benefit, or for that of himself with others, would not fall under that head. The definitions by other writers quoted by the plaintiff, would include this defendant as a trustee. But this species of authority is of but little force, since the definition depends upon the more or less comprehensive view which the writer takes of the subject.

' Still insisting that this is a mortgage, the plaintiff says, the authorities hold that the mortgagee cannot be a trustee for the mortgagor, and as his authority, quotes some remarks found in 1 Hilliard on Mort., 120-1, from the work of Coventry, but which were only his speculative doubts; for, although he said, as quoted by this plaintiff, “ that the' *462form referred to, appeared to have received the censure of the Lord Chancellor, he added, ‘yet it is the editor’s favorite form, as he had occasion to feel the inconvenience of the mode recommended by his lordship.’ ” And, in reference to some doubts of Lord Elden, he says: “ The above observations of his lordship, were thrown out in the exuberance of his dubitations, and were perfectly gratuitous, and obviously of the first impression.” The passage quoted is, therefore, no authority for the doctrine stated.

Mortgages, with a power of sale, have long been a recognized and settled mode of conveyances, although at first some doubt was entertained in regard to them. And, if the above act should be considered as embracing these, the line of distinction between those and deeds of trust, in the more general sense, is not very clearly discerned. 1 Hill, on Mort, chap. 7, secs. 4, 5, 8, 15; Adams on Eq., 121, 126. They have-been called trust deeds, in the nature of a mortgage. Adams Eq., 122. At common law, equity had no power to sell, and this could not be done, unless there was a power in the deed. Adams Eq., 120. But in all the books, the power given to sell, is recognized as valid, and the form of the instrument is of little weight. It is impossible, therefore, to regard the statute as including this class of contracts, or else to avoid the conclusion that the proviso intended to except them all.

The respondent urges that, if the act of 1858 should be construed to apply to such a case, then, as the parties had a right to make the contract at the time it was entered into, it was not in the power of the legislature to nullify it afterward ; and also, that it is taking away a substantial remedy, and so changing the remedy he had, that the case falls within the principle of Bronson v. Kinzie, 1 How., 311; McCracken v. Hayward, 2 How., 608; and Grantly's Lessee v. Ewing, 3 How., 707. He argues, that this gives a speedy means of producing the lender’s money, whilst an action, in its ordinary course, followed by the right of redemption, consumes the space of nineteen months.' Although both of these grounds would present serious *463doubts, in the way of applying the foregoing act to this particular case, we prefer to place it upon grounds which relate to similar contracts, made after, as well as those made before, the act; and these are, that the act of 1858 did not intend to restrict the power of parties in making their contracts; Or else that the proviso intended to save from its operation, those instruments which contain a trust, or power to be executed by a party.

No point is made by the parties concerning the interest, and the canse, or matter, is not in such a position as to call for any disposition of that subject. The bill was brought to restrain the sale, and upon this, the decree of the district court is reversed, and the injunction is dissolved.