Manning v. Moscow Presbyterian Society , 1858 N.Y. App. Div. LEXIS 81 ( 1858 )

By the Court, Welles, J.

Prima facie evidence was given

of the execution of the mortgage, to foreclose which the action was brought. The evidence of Mr. Tracy shows that the defendants were in his debt to the amount for which the mortgage was given, for advances made by him for the benefit of their church property. That the mortgage was given to secure that indebtedness, in pursuance of a vote of the trustees, and was executed by a majority of them, and by their clerk, with their corporate seal affixed, and that the mortgage has been duly assigned by the mortgagee to the plaintiff. The evidence given by the defendant does not disprove these facts so clearly as to justify the court in disturbing the finding of the referee upon any of the facts found by him.

The only question which remains to be considered is, whether the defendants had power to give the mortgage without an order of the chancellor or of the court of chancery, according to the.provisions of the 11th section of the act entitled “An act to provide for the incorporation of religious societies,” passed April 5, 1813. (1 R. S. 4th ed. 1179.)

Section 3 of the act, after providing how religious societies,other than those provided for in previous sections, shall be incorporated, provides as follows: “ And such trustees and their successors shall also thereupon, by virtue of this act, be a body corporate, by the name or title expressed in such certificate.” Section 11 provides that it shall be lawful for the chancellor, upon the application of any religious corporation, in case he shall deem it proper, to make an order for the sale of any real estate belonging to such corporation, and to direct the application of the moneys arising therefrom by said corporation to such uses as the same corporation, with the consent and approbation of the chancellor, shall conceive to be most for the interest of the society to which the real estate so sold did belong. It has been repeatedly held that a religious corporation organized under this act, is prohibited from selling its real estate in any other way than the statute provides. (Willard’s Eq. Jur. 735, and authorities there cited. 2 Kent's Com. 281. Montgomery v. Johnson, 9 How. Pr. Rep. 232, and authorities there cited.)

[Monroe General Term, March 1, 1858.

Welles, Smith and Johnson, Justices.]

But the question still remains, was the giving of this mortgage a sale of the real estate of the defendant ? We are of the opinion that it was not. It was not a sale in the ordinary and popular, acceptation of the term; nor, indeed, in the strict legal sense. In either sense, a sale embraces the idea of a transfer of the legal title of the property sold, from the vendor to the vendee, for a consideration passing from the latter to the former. A sale, to be complete, in general, requires the delivery of the possession of the thing sold. It was sales in this sense by trustees of religious societies, that the statute was designed to restrain and regulate. Since the revised statutes took effect a mortgage has been held to be merely the creation of a specific lien, as security for the performance óf the conditions expressed, which are either the payment of money or the performance of covenants or contracts, and does not pass the title, which "continues in the mortgagor until foreclosure and sale. It is on this ground, and for this reason, doubtless, that the statute prohibits the maintaining an action of ejectment upon a mortgage. (2 R. S. 312, § 57. Jackson v. Myers, 11 Wend. 533, 538. Astor v. Hoyt, 5 id. 603 to 615, 617.) A mortgagee may assign the mortgage debt by parol, which draws after and with it the mortgage; and if the title is in the mortgagee, then the title to real estate may be transferred by parol, which cannot be done.

There is nothing in the spirit or policy of the statute, nor any principle of public policy, which forbids a "religious corporation giving a mortgage upon its real estate, to secure a debt legally contracted, any more than in creating a lien by the voluntary confession of a judgment, which, it is decided, may be done. (12 Barb. 67, 410.) For the foregoing reasons the judgment should be affirmed, with costs.

Ordered accordingly.