Barson v. Mulligan

• Decision Date: 03 March 1908
• Citation: 84 N.E. 75,191 N.Y. 306
• Parties: BARSON et al. v. MULLIGAN et al.
• Court: New York Court of Appeals Court of Appeals

191 N.Y. 306

84 N.E. 75

BARSON et al.

v.MULLIGAN et al.

Court of Appeals of New York.

March 3, 1908.

Appeal from Supreme Court, Appellate Division, First Department.

Ejectment by Charles H. Barson and another against Agnes K. Murphy Mulligan and others. From a judgment of the Appellate Division (120 App. Div. 879,105 N. Y. Supp. 1106), affirming a judgment for plaintiffs, defendants appeal. Reversed, and new trial granted.Alton B. Parker and Wm. G. Mulligan, for appellants.

Henry A. Foster and Frederick P. Foster, for respondents.

WERNER, J.

This is an action in ejectment. It has had a long and varied history, in the course of which many questions have arisen, some of which are not germane to the present appeal. The principal question now before us is whether the defendant Agnes Mulligan, whom we shall call the appellant, was a mortgagee in possession when this action was instituted. The material facts which bear upon this question are briefly as follows: In 1853 Selena Barson purchased a plot of land, which embraces the premises in dispute, situate in the county of Westchester, now within the limits of the borough of the Bronx, in the city of New York. A purchase-money mortgage for $1,000 was then given to the grantor, payable in one year from date. The grantee went into possession, which she retained until her death in November, 1862. She left her surviving a husband and several children. As she died intestate, the fee passed to her children, subject to the husband's tenancy by the curtesy. The husband went into possession, and at a time not specifically pointed out in the record executed to the appellant a lease of the premises, which seems to have expired on or about January 1, 1895. On the 26th day of March, 1894, a new lease was entered into between the tenant by the curtesy and the appellant, which was to run for five years and four months from January 1, 1895. This lease was cut short by the death of the lessor on the 2d of October, 1897. If these were all the facts which comprise the history of the case preceding the death of the tenant by the curtesy, there could, of course, be no question as to the rights of the respective parties to this action. In that event the possessory right of the appellant as the lessee of the tenant by the curtesy would have been so clearly extinguished by the death of the latter as to leave no question open for discussion. There are other facts, however, upon which the appellant now contends that at the death of the tenant by the curtesy, or at least when this action was commenced, she was a mortgagee in possession, and entitled to remain upon the premises until her mortgage is paid. It appears that the purchase-money mortgage made by Selena Barson in 1853 passed through various hands until in June, 1888, the appellant acquired title thereto by assignment. She held it for eight days, and then, on July 6, 1888, assigned it to one Steers, who was the holder thereof in October, 1894, when the appellant took from the tenant by the curtesy the second lease above referred to. Steers continued to hold the mortgage until October 6, 1897, when it was reassigned to the appellant. On October 2, 1897, or four days before this reassignment, the tenant by the curtesy died, and thus, by that event, the lease from him to the appellant was terminated, as above stated. Since the appellant concededly entered into the occupation of the disputed premises under a lease which expired with the life of the tenant by the curtesy, it becomes pertinent to inquire by what means and at what time the appellant claims to have become a mortgagee in possession. Her answer to the complaint and her testimony clearly show that she entered into possession of the premises under the lease, and that there never was any change in the character of her possession unless Steers' reassignment to her of the mortgage after the death of the tenant by the curtesy metamorphosed her tenancy under the lease into a possession under the mortgage. The answer of the defendants does set forth the appellant's ownership of the mortgage, but it asserts no right of possession of the premises covered by it, except ‘as mortgagee under and by virtue of the instruments aforesaid,’ and one of the instruments thus referred to in the plural is the lease set forth in the complaint and admitted in the answer. The appellant's testimony is no more explicit. It discloses no assertion of a right to possession as mortgagee, unless that is to be inferred from the admitted fact that the mortgage was reassigned to her four days after her tenancy expired. It is true that the appellant sought to prove that the assignment to Steers of the mortgage was not absolute, as upon its face it purported to be, but was intended as collateral security for a loan, and that the evidence was excluded because that question was thought not to be within the issues raised by the pleadings. The exceptions to the rulings of the trial court in this behalf are urged upon this appeal as one of the grounds for reversing the judgment; but, in our view of the case, that proof in and of itself was not relevant to the question whether, upon the foregoing facts, the appellant was a mortgagee in possession. Even if it be conceded for the purposes of the argument that the appellant merely assigned the mortgage to Steers as collateral security for a debt, the issue is still squarely presented whether a mortgagee who takes possession of the mortgaged premises as tenant under a lease from a life tenant can become a mortgagee in possession without the consent of the mortgagor. It cannot be denied that there is some confusion in the earlier reported cases in this state relating to the general subject of mortgagees in possession. This confusion has arisen in part from obiter dicta in cases where the question was not involved, and in part from broad judicial statements and still broader reporters' headnotes in cases where it was either assumed or proved that the mortgagee was rightfully in possession under his mortgage, but principally from the fact that for some time after the common law was changed by the revised statutes the old rule continued to find inadvertent expression in some judicial opinions.

At common law the mortgagee was at first treated as being the legal owner. His estate was devisable and descended to his heirs. After breach of the condition he could oust the mortgagor by an action in ejectment, or by any other means that did not involve a breach of the peace. In equity, however, the rights of the mortgagee passed to his personal representatives, and the mortgagor was regarded as the real owner of the land. These conflicting views were carried so far that even after the courts of law had recognized the title of the mortgagee as absolute, and had put him in possession, the courts of equity enforced what they called ‘the mortgagor's equitable right of redemption.’ These contradictory decisions gave rise to much confusion. The judges who had been trained in the rigorous school of the common law regarded the equitable rule as an offensive innovation. But the common-law rule was so harsh, and, in many cases, so extremely unjust, that the equitable rule grew in favor, and was vigorously invoked. In course of time even the courts of law came to recognize the right of the mortgagor to redeem after forfeiture. Despite this gradual and partial evolution, the mortgagee was still regarded as in some respects the legal owner of the mortgaged premises. He could maintain ejectment, and assert other legal remedies, subject only to the mortgagor's right of redemption. It was finally appreciated, however, that the so-called ownership of the mortgagee was the merest fiction, because the only strict legal right he had left was to collect the debt secured by the mortgage. The mortgagee's estate had been whittled down until it disappeared altogether, and there was left him nothing more than a lien under his mortgage. Under these circumstances it was, of course, absurd and unjust to permit such a creditor, for that is all that the mortgagee was, to take possession of his debtor's property without the latter's consent, or without first enforcing his rights under his lien. When the estate in fee was regarded as belonging to the mortgagee, the right of possession naturally followed ownership; but, when title was held to remain in the mortgagor until divested by sale under foreclosure, the possessory right of the mortgagee became a legal anomaly that could not survive.

This was the situation when the Legislature in 1830 enacted that ‘no action of ejectment shall hereafter be maintained by a mortgagee, or his assigns or representatives, for the recovery of the possession of the mortgaged premises.’ 2 Rev. St. (1st Ed.) pt. 3, c. 5, tit. 1, § 57. Since that time this has been the law of this state, the identical language of the statute having been adopted into our Code of Civil Procedure. Section 1498. The only logical theory upon which this change in the law can be justified is that the mortgagee, having come to be regarded as a mere lienor, had no legal estate in the land covered by his mortgage, and that is the view which has been accepted by our courts. Runyan v. Mersereau, 11 Johns. 537, 6 Am. Dec. 393;Jackson v. Crafts, 18 Johns. 110;Jackson v. Bronson, 19 Johns. 325;Kortright v. Cady, 21 N. Y. 343, 73 Am. Dec. 145;Stoddard v. Hart, 23 N. Y. 560. If we carry the logic of the argument a step further it would seem to follow that, when the Legislature deprived the mortgagee of the only legal method by which he could get possession of the mortgaged premises without the mortgagor's consent prior to foreclosure, there was no way left by which the mortgagee could acquire such possession except by the mortgagor's consent. Unless this is so, we must impute to the Legislature the vain formality of enacting a statute which can be rendered nugatory by the voluntary act of the very...