Howard v. Handy , 35 N.H. 315 ( 1857 )

EastmáN, J.

The facts in this case, as gathered from the bill, and from the answers, so far as they are responsive to the bill, and from the evidence, may be condensed into the following statement:

The defendant, Johnson, being the owner of a lot of land in Portsmouth, together with the rope-walk and machinery connected therewith, on the first day of October, 1850, mortgaged the same to one Vincent, to secure a note of that date for the sum of $1,644.78, payable to Vincent, or order, on demand, with interest.

On the 14th day of January, 1851, Johnson being then in possession of the premises, and the condition of the mortgage being broken, Vincent made a public, peaceable entry into the same, in the presence of Johnson and two or more witnesses, for the purpose of foreclosing his mortgage, and on that day leased the premises to Johnson for one year. Johnson acknowledged himself as tenant to Vincent, and occupied the premises as such tenant for the year, and paid the taxes. And on the 17th, 24th and 31st days of May, 1851, Vincent caused to be pub-fished in the Portsmouth Journal a notice of his entry, and the purposes of the same, according to the provisions of the statute.

On the 14th day of January, 1852, Vincent, for the consideration of $1,752.47, sold and assigned to one Mathes, and the defendant Handy, the mortgage and note, together with all his title and interest in the estate, with all the benefit to be derived from the entry and possession, to foreclose the mortgage ; and Handy afterwards purchased the interest of Mathes and became sole owner.

Johnson and Handy formed a co-partnership in the rope making business, and from the 14th day of January, 1852, to the filing of their answers, occupied the premises as tenants of Mathes and Handy, and then of Handy.

For years previous to 1849, and up to January 14, 1851, Johnson was in possession of the premises as owner, so that from 1849 to the filing of the answers he was in possession either as owner or tenant.

On the 27th day of January, 1851, Johnson being indebted to the complainant upon a note of hand, a suit was commenced against him by the complainant, and all his interest in the premises attached. Judgment was subsequently obtained, and execution issued for the sum of $288.92 debt, and $16.28 costs. A levy was commenced upon the property within thirty days after the rendition of judgment, and on the 7th day of June, 1851, all the right in equity which Johnson had of redeeming the premises on the day of the attachment, was sold to the complainant and a deed given him by the officer, which was duly recorded and the execution returned September 15,1851.

Neither the complainant nor his attorney knew that any steps had been taken to foreclose the mortgage, either by Vincent or Handy, till a short time before June 14, 1853. On that day he demanded of Handy an account of the amount due upon the mortgage, and offered to pay the same, with all legal costs and charges. Handy declined to give the account, and denied the right of the complainant to redeem the premises.

From this statement, which, it is believed, embraces substantially all the important facts, it is apparent that the decision of the case must depend upon the validity of the foreclosure of the mortgage.

Prior to the passage of the act of July 4, 1834, no notice by publication in a newspaper was necessary to be given in any case of entry to foreclose. N. H. Laws, 486, Ed. 1830. And where possession followed the entry, it was not necessary to give notice of any kind. Kittredge v. Bellows, 4 N. H. 433; Gilman v. Hidden, 5 N. H. 30; Downer v. Clement, 11 N. H. 40.

The act of 1834 requires notice by publication, and the Revised Statutes in like manner provide, that, where possession is taken without process of law, notice of the entry and its purposes shall be given in the same way ; and that a similar notice shall be given where the mortgagee, being in possession, is holding it for the purpose of foreclosing the right to redeem.

The act of 1854 has changed the law in regard to notice, where the mortgagee is in possession. But that act has no bearing upon this case, both because it was passed subsequent to the institution of these proceedings, and because the foreclosure was not made by a mortgagee in possession, but by an entry and possession.

The second mode of foreclosing is as follows: “ By peaceable entry into the mortgaged premises, and continued, actual, peaceable possession thereof for the space of one year, and by publishing in some newspaper, printed in the same county, if any there be, otherwise in some newspaper printed in some adjoining county, three weeks successively, a notice, stating the time at which such possession taken for condition broken commenced, the object of such possession, the name of the mortgager and mortgagee, the date of the mortgage, and a description of the premises, the first publication to be six months at least before such right to redeem would be foreclosed.” Rev. Stat., chap. 131, sec. 14.

And by the 16th section of the same chapter it is provided that the affidavit of the party making any entry into real estate, and tbe witnesses thereto, as to the time, manner and purposes of such entry, and a copy of the published notice, verified by affidavit as to the time, place, and mode of publication, recorded in the registry of deeds for the county in which the lands lie, shall be evidence of such entry and publication.

After an entry is made by the mortgagee, possession may be held by him through a tenant, and such possession, being actual and peaceable for a year, is as good as though held by the mortgagee in person. Kittredge v. Bellows, 4 N. H. 424; Batchelder v. Robinson, 6 N. H. 13.

In Deming v. Comings, 11 N. H. 474, Cook, owning the premises, mortgaged them to Spaulding, and then sold and conveyed the same to Comings, the defendant. Spaulding assigned the mortgage, and Comings, upon a suit of possession being issued, became tenant of the assignee, and agreed to pay him rent; and it was decided that possession, thus held by the tenant for the term of one year, would foreclose the mortgage. Parker, C. J., says: “This was a good possession for the purpose of foreclosure. Peaceable possession, by the defendant, as tenant, under the agreement, for the term of one year, without any attempt to redeem, would operate as a foreclosure of the mortgage.”

In the present case, all the requisitions of the statute were complied with in the foreclosure. On the 14th of January, 1851, before the complainant had commenced his suit against Johnson and made his attachment, Vincent, the mortgagee, entered upon and took peaceable possession of the premises in the presence of Johnson, the mortgager, and two or three others, and at the same time publicly declared that he took possession for the purpose of foreclosing his mortgage. Johnson, on the same day, agreed to attorn to Vincent, and took a lease for one year, and held during that time as tenant of Vincent. In May, following the entry, more than six months before the right to redeem would be foreclosed, Vincent published in the Portsmouth Journal a notice of his entry, containing all the formalities prescribed by the 14th section of the statute cited, and subsequently caused to be recorded, in the registry of deeds for tbe county, the evidence of the entry and notice, according to the provisions of the 16th section.

At the time Yincent entered upon the premises no one had any rights therein except Johnson and himself. The complainant’s attachment had not then been made; and, independent of statute provisions, and under the authorities in other jurisdictions requiring notice to those interested, sufficient notice would seem to have been given; for Johnson was present when possession was taken, knew its object, and acknowledged his tenancy. Thayer v. Smith, 17 Mass. 429; Newhall v. Wright, 3 Mass. 153; 13 Mass. 314.

There is no provision of law that required Yincent or his assignees to ascertain who were the creditors of Johnson, or who might subsequently become interested in the premises; none that required him to give a new or different notice of the proceedings to foreclose to any such parties. Even subsequent mortgagees are entitled to no notice, other than such as they may gain from the publication required by the statute. Downer v. Clement, 11 N. H. 40.

The general publication of notice of an entry to foreclose in some newspaper printed in the county, must, under the statute, be held to be a sufficient notice to all persons interested, that the foreclosure has been commenced. If this notice is not actually brought home to a party interested to know of the entry, as was the fact with the complainant, it must be treated as a misfortune for which there is no remedy.

There was no attempt to redeem the premises until June, 1853, nearly.two years and a half after Yincent entered to foreclose, and nearly a year and a half after the assignment to Mathes and Handy. The rights acquired by Yincent, by his entry, possession and notice, and all benefits of the foreclosure, passed to Handy and Mathes by the assignment; and the tender made by the complainant was ineffectual for any purpose, unless fraud could be shown in the foreclosure. Hills v. Elliott, 12 Mass. 26; Deming v. Comings, 11 N. H. 474. In Hills v. Elliott ifc was held that where a mortgage is assigned, the assignee is put in the place of the mortgagee, to all intents and purposes.

We arrive then at the conclusion that this foreclosure was good, unless it can be impeached for fraud. And after a careful examination of the evidence, and also the answers, and applying to the latter the acknowledged rule that they are not evidence for the defendants, except so far as they are responsive to the bill, we think that we cannot pronounce the foreclosure to have been fraudulent.

There is some evidence which would be competent to be submitted to a jury, as tending to show collusion. The taxation of the property, in 1851, for double the amount of the mortgage, and the unvaried possession of the premises by Johnson, as well as some other facts, would be competent. But there is nothing showing that Johnson had any ability to pay the mortgage, or that he has now any interest in the premises. As suggested by counsel, also, property of this description must vary in its value from time to time, as business of the kind changes. The complainant knew of the mortgage, and was himself the purchaser and owner of the equity, before the foreclosure was completed. He could have ascertained, by inquiry, that the foreclosure was proceeding, and could have redeemed or taken the premises, had he seen fit.

The possession by Johnson was open to explanation. The stringent rule requiring a change of possession upon the sale of personal property, as shown by the authorities cited, does not apply to a case of this kind. Johnson could well enough be the tenant of the mortgagee, or his assignee, as we have already shown. In Gilman v. Hidden, 5 N. H. 30, the mortgager and mortgagee both resided upon the premises, and made one family; and yet it was held that the mortgage was foreclosed. The court say: The circumstance that the mortgager also lived upon the land, does not seem to be material, because he was apprised that the tenant was holding the land after condition broken, with a view to foreclose the right to redeem.

We think we cannot infer fraud from the facts in this case; and the^ foreclosure being valid, the title to the property became perfect in Handy, and the complainant had no right to require of him an account, or to redeem the premises. The bill must, therefore, be dismissed.

As to costs, the amended answers were material, as also the evidence taken to support them. Terms must, therefore, be imposed for the amended answers and the delay occasioned thereby, and the amount be deducted from the defendants’ bill of costs.

Bill dismissed, with costs.