Georges Creek Coal & Iron Company's Lessee v. Detmold , 1 Md. 225 ( 1851 )

Le Grand, C. J.,

pronounced the opinion of the court.

The first exception having been abandoned, the only question for this court to determine, is, — did the deed of the 13th day of December 1845, deprive the lessor of the plaintiff of the title necessary to sustain an action of ejectment?

It is conceded by the form of the prayer, that if this deed does not bar the right of recovery, that it still exists.

By the deed the locus in quo was conveyed to the grantees, subject however to a proviso, to use the language of the instrument: “provided, nevertheless, and it is declared to be the true intent and meaning of these presents, and of the parties hereunto, that if the said Georges Creek Coal and Iron Company, shall well and truly pay unto the said holder or holders of the aforesaid bonds, the principal sums of money secured to be paid thereby, with interest thereon, according to the tenor and effect thereof, without any deduction or abatement whatsoever, then and from thenceforth these presents, and every thing herein contained, shall cease and determine, and be utterly null and void, anything herein contained to the contrary hereof, in anywise, notwithstanding. And lastly, it is further understood and agreed upon, by and between the parties hereunto, that until default shall be made by the said company in payment of the sums of money hereby charged upon the aforesaid premises and interest, or of some part thereof, according to the time and times limited for payment thereof, it shall and may be lawful for the said company peaceably and quietly to have, hold, occupy, possess and enjoy, all and singular the premises hereby granted, with the appurtenances ; and the rents, issues and profits thereof, to have, receive and taire to its own particular use and benefit; and from time to time, with consent of the said trustees, and the survivors and survivor of them, and the heirs of the survivor, to make leases of said premises, or -any part or parts thereof, and to grant licenses and privileges for raising, working and carrying the coals, iron ores,” ¿rc.

The defendant rests entirely on possession, and insists, that the legal title is not in the plaintiff. It is undoubtedly true, that to enable the plaintiff to recover, it is incumbent to show the deed in question did not vest the legal title in some other person, so as to authorize such other person to maintain ejectment. Where a defendant relies upon an outstanding title in a third party, it must be such a title that such third person could recover against either party to the suit. Hall vs. Gittings, 2 Harr. & John., 125.

The instrument relied upon in this case was a mortgage, which, by its terms, authorized and guaranteed to the company the possession and enjoyment of the land until default was made, and the question is, did this instrument secure to the company such legal title and right of possession as are essential to the maintenance of this action ?

Neither the case of Jamison vs. Bruce, 6 Gill & Johnson, 72, nor the case of Hope vs. Hutchins, 9 Gill & Johnson, 77, settle the question involved in this. In the first of these cases, the court considered merely that class of mortgages, in which there were no covenants securing to the mortgagor the complete enjoyment of the property until a certain specified time, or until the happening of a specified contingency. In such cases they held the mortagee had the right, to enter at pleasure ; and that a mortgagor, in the case of a mortgage of personal property, could not maintain trespass against the mortgagee for the asportation of the property. But it is clearly inferrible from the whole character of the opinion of the court, that had there been a covenant in that case, securing to the mortgagor the enjoyment of the property, that he could ha.ve maintained trespass.

The case of Hope vs. Hutchings, does nothing but enunciate a very obvious principle. It, was a controversy between the donees and the administrators of the donor, and the only question was to whom belonged the issue of a negro woman, (the subject matter of the gift.,) born during the lifetime of the donor. The court held that the increase was a part of the profits, and followed the direction given to the mother by the gift. Adopting the intention of the parties as the governing rule of interpretation, the court held it to have been “manifest from the terms of the instrument, that she intended to appropriate and carve out for her own use, no greater interest in the profits than she had reserved in the principal from which the profits were to be derived ; and it is not to be understood to be denied, or questioned,” continues the court, “that upon her death, all her interest in the labor and services of the mother, immediaiely ceased and terminated.” The only question in the case, obviously was, what was the intention of the party making the gift? and this ascertained, the court, by its decision, gave it efficacy.

In the case now under consideration, there is no difficulty in ascertaining the intention of the parties. It was, manifestly, that the grantors should have the use and profits as absolutely as before the execution of the deed, until default, as specified in it.

In the case of Wilkinson vs. Hall, 3 Bingham, 508, a case similar to the one now before the court, it was expressly held, that a covenant that a mortgagor should hold the premises and take the rents, issues and profits for his own use, till default should be made in the payment of principal and. interest, operated as a redemise to the mortgagor until default. And this decision is declared to be in conformity with the doctrine laid down in Bacon's Abridgment, tit. Leases, K, “That whatever words are sufficient to explain the intent of the parties, that the one shall divest himself of the possession, and the other come into it for sugh a determinate time, such words, whether they run in the form of a license, covenant, or agreement, are of themselves sufficient, and will, in construction of law, amount to a lease for years, as effectually as if the most proper and pertinent words had been made use of for that purpose.”

If the case of Wilkinson vs. Hall be law, then it is perfectly conclusive of the case before us, for the prayer concedes there has been no default on the part of the lessors of the plaintiff, and that there has been on the part of the defendant. But it is contended, that it has been overruled by the case of Doe on the demise of Parsley et al., vs. Day, 42 Eng. C. L. 612. We do not so understand that case; it was wholly different, in its facts, from the case of Wilkinson vs. Hall; for, unlike that case, there was no covenant that the mortgagor should possess and enjoy the premises until the default; the stipulation being, that if the mortgagor did not pay by a certain day, the mortgagee, on giving one month’s notice, might enter. The court expressly say, there was not “any affirmative covenant whatever, that he should hold at all.” In the case of Lyster and others vs. Goldwin, 42 Eng. C. L. R., 610, decided by the same judge who decided the case of Parsley vs. Day, it was held, that where a mortgage deed for securing payment of an annuity, conveyed the land in trust, among other things, to permit the mortgagor to receive the rents and profits, until default, for sixty days, in payment of the annuity, that the conveyance operated as a redemise to the mortgagor until default; and that a notice to quit given by him in his own name to a tenant, let into possession by him before the mortgage, enabled him to recover in ejectment on his own demise. The case is clearly an affirmance of the principle recognized in Wilkinson vs. Hall. The case of Roylance vs. Lightfoot, 8 Meeson and Welsby 552, in no way affects it, for in that case as in the case of Parsley vs. Day, there was no affirmative covenant, that the mortgagor should have, and hold and enjoy the property until default. See also Wilkinson vs. Goodier, 59 Eng. C. L. R., 957.

The principle which we gather from these cases, if they are at all to be respected, is this, that where a party mortgages land, and there is an affirmative covenant that he shall continue possessed of the land, with full power to take the profits and issues until default, and a certain determinate time is fixed beyond which his right of possession shall not go, that such affirmative covenant amounts to a redemise; but that no such redemise will be inferred, or implied from a covenant, that the mortgagee should not sell or lease, (even if construed a covenant not to enter,) until after notice; since both the certainty as to the time, and the affirmative words of the right of enjoyment, are wanting, which are essential to create a term for years.

In Newell and Others, vs. Wright, 3 Mass., 138, a case most ably and elaborately argued, Judge Parsons held, that there may be an agreement that the mortgagor shall retain possession until condition broken, which shall bind the mortgagee: in which case the mortgagor may demise the estate to a stranger, and receive the rents to his own use.

In many of the States of the union, courts of law have held mortgages in the light in which they are undoubtedly intended by the parties, as mere security for the payment of money: this is now the aspect in which they are universally viewed in courts of equity.

Without meaning to be understood as endorsing them to the full extent to which some of them go, but adverting to them merely as an indication of the spirit which seems to guide the courts of the present day, we refer to 9th Alabama, 637. 6 Hill, 473. 20 Maine, 111. 15 Connecticut, 556. 5 Halstead, 156.

There is no decision in this State which, in any just sense, can be construed as denying the right of the mortgagor to maintain ejectment against a third party, where the mortgage contains an affirmative covenant, that the mortgagor shall possess and enjoy until default; and finding decisions both in England and in this country which sustain the right, and recognizing the equity of it, we feel disposed to adopt it, because it subserves the purposes of justice, to promote which, courts are established.

But it has been urged with great earnestness, and marked ability, that there can be no recovery in this case; because, as it is alleged by the terms of the deed of the 13th day of December 1845, the lessor of the plaintiff was precluded from making the lease mentioned in the declaration. Although the lease declared on is in point of fact a mere fiction, yet it is essential to the plaintiff’s right of recovery, that his lessor should have been possessed of a title enabling him to make such a lease. Wood vs. Grundy, 3 Harr. and John., 13.

This being so, the question is, does the deed inhibit the lessors of the plaintiff from making leases without the consent of the trustees, until default be made? It is a sound rule of construction, that if possible, unless it contravene some rule of law, every part of a deed and the intention of the parties shall prevail. It is, also, a well established principle, that the title to reality cannot be held in abeyance; it must, at all times, reside somewhere, and in such force, that an injury to the possession can be redressed by an action at law. Now if the construction contended for by counsel for the appellee be correct, then the title to the locus in quo, resides nowhere; and although it be confessed the defendant has no right to the possession; that whatever rights he had, have been forfeited, yet there is no one authorized to sustain ejectment, and dispossess him. This view would, indeed, present an anomolous state of things.

We have already shown that where a defendant relies exclusively upon an outstanding title in a third party, which is the case here, it must be such a title that such third person could recover against either party to the suit. 2 Harr, and John., 125. And in the case of Wilson vs. Inloes, 11 Gill and John., 359, this court held, that to enable the plaintiff to recover, it is necessary lie should have both the legal title and the right of possession. Now it is clear from those decisions, that the trustees could not maintain ejectment, because until default of lessors of the plaintiff, they have no right to the possession; and this being so, it equally follows, that the outsi anding title set up to defeat the recovery in this action, is not such an one as can be successfully availed of by the defendant, because it would not enable the trustees to recover against the lessor of the plaintiff.

The construction which we place on the deed of the 13th day of December 1845, is this : — that the grantors have the right to make leases, provided they do not extend beyond 1861, without the consent of the trustee, and with their consent, leases for any length of time. The manifest intention of the instrument was to create a security for the payment of the sum of money to be borrowed, with interest thereon; and until default by the grantor, it was “peaceably and quietly to have, hold, occupy, possess and enjoy, all and singular the premises granted, with the appurtenances; and the rents and profits thereof, to have, receive and take to its particular use and benefit.^ It was undoubtedly the intention of the parties, that the grantor was to have the privilege to work the mines, &e., until default, and from this source, if possible, to draw the means to meet the liability created by the mortgage. Whether the company by its own employees, or by its lessees, worked the mines, could make no difference to the parties for whose security the mortgage was given. The maxim, ex-pressum facit cessare taciturn, has no application to the case. It never could have been designed to make the right of the grantor depend on the consent of the trustees, and the clause which follows the one quoted, and which authorises the company to make leases with the consent of the trustees, must be considered in connection with the right reserved and guaranteed to the company, to use and occupy until default; and when so viewed, it must be taken as having reference to leases to be made for a period extending beyond the year 1861; or to be of force notwithstanding any default of the company before the year 1861. Such a construction effectuates, what to the court appears to have been clearly the intention of the parties. Any other would be productive of injustice, and would be to place the right of enjoyment and use, guaranteed to the grantor until default, at the mercy of the trustee, without subserving in any manner the interests of the parties for whose security the instrument was executed.

The objection, that this is a deed poll and not an indenture, is not available for the purpose for which it was invoked. See the clear and explicit opinion in Flagg vs. Flaggy 11 Pick., 477.

Nor is there force in the argument, that the construction which we place on the deed, renders it, so far as the plaintiff is concerned, useless within the purview of our registration acts of 1715 and 1766. All that is required by those acts is, that the instrument creating an estate for more than seven years in lands, shall be acknowledged and recorded. This has been done in the case before us. Where the same deed creates an estate in the grantee with a reservation in favor of the grantor, acknowledgment by the grantor is all that is required; there is no necessity for the execution of another deed to secure and give efficiency to the reservation. Principally, among other things, the registration acts were intended to guard against fraud, and to make of record the titles of persons, instead of allowing them to rest in the uncertain recollection of witnesses, who from forgetfulness or fraudulent motives, would frequently represent things differently from what they really were. Our interpretation of the deed in nowise conflicts with the letter or policy of these statutes.

Upon the whole, we are of opinion, under such a mortgage as that in this case, that the mortgagor can maintain ejectment against a stranger who rests his defence entirely on possession and an outstanding title in the mortgagee. The time is sufficiently determinate and fixed to make the duration of the demise certain, and the covenant to hold and enjoy, is sufficiently affirmative to bring it within the principle of the cases both in England and this country.

Judgment reversed and procedendo awarded.