Caufman v. Sayre

• Decision Date: 25 December 1841
• Parties: Caufman v. Sayre et al.
• Court: Kentucky Court of Appeals

41 Ky. 202

Caufman v. Sayre et al.

Court of Appeals of Kentucky.

December 25, 1841

Jurisdiction.

ERROR TO THE FAYETTE CIRCUIT.

Owsley and Pirtle for plaintiff:

Robinson and Johnson for defendants.

OPINION

ROBERTSON CHIEF JUSTICE:

The facts of the case.

CATHARINE M. CAUFMAN having mortgaged a tract of land in Jefferson county, to David A. Sayre, of Fayette, for securing the payment of two notes for $1,250 each, one payable October 8 1840, and the other payable October 8, 1841, Emelius K. Sayre, claiming to be the assignee of the said notes, and collateral security, filed a bill in Chancery in the Fayette Circuit Court, on the 17th of October, 1840, against the mortgagor and mortgagee, alleging the non-payment of the first note, which was then due, and praying for a foreclosure and sale for the amount of both notes. A subpœ na having been served on D. A. Sayre, in Fayette, and on C. M. Caufman, in Jefferson, and neither of them either answering or appearing, the Court, at the December term, 1840, succeeding the appearance term, rendered a nisi decree for the payment of the first installment on or before the 1st day of the February term, 1841, and at the last term, the required payment not having been made, a decree was rendered directing the sale of the mortgaged land for the amount of both notes, on a credit of three months for the amount of the first, and on a credit until the 8th of October, 1841, for the amount of the last, which was payable on that day.

The mortgagor seeks the reversal of that decree on two grounds: 1st. An alleged want of jurisdiction in the Fayette Circuit Court; and, 2ndly. Error in so much of the decree as foreclosed the equity of redemption and directed a sale as to the sum which was not due when the decree was rendered.

Questions stated.

1. A bill for foreclosure only, is altogether in personam, and, therefore, jurisdiction over such a bill belongs to the Court of Equity of any county in which the defendant or any one necessary defendant, shall be served with proper notice. But, as a sale of mortgaged land operates in rem, cognizance over a bill for a sale may be exercised by the Court of Equity of the county in which the land lies, and would, upon common law principles, be restricted to that local court, if the prayer for a sale were the only grounds of jurisdiction.

Bill in equity for a foreclosure of equity of redemption alone in land is transitory, and any Court where a necessary defendant is served with process, has jurisdiction; but if a decree for sale only is asked, the Court of the county where it lies has the jurisdiction.

But a bill for ascertaining and settling the amount due and for both foreclosure and sale, is personal as well as local; and, therefore, in our opinion, either the person of a necessary defendant or the locality of the mortgaged premises may give jurisdiction in such a suit. It cannot be known until the final decree, whether the suit may not produce the debt without a sale of the mortgaged estate.

But a bill for ascertaining the amount due on a mortgage, and for foreclosure and sale, is personal as well as local, and the service of process on any necessary defendant, gives to the Court of the county where the defendant may be found, jurisdiction, or the locality of the mortgaged premises will give jurisdiction.

D. A. Sayre seems to have been an indispensable party, because the assignment of the mortgage, as described in the bill, cannot be understood as passing to his assignee the legal title of the mortgagee.

Consequently, as we cannot presume that the assignment was merely nominal, for the purpose of giving jurisdiction to the Fayette Circuit Court, the judicial deduction from the record is, that the decree is neither void nor erroneous for want of jurisdiction to render it.

2. The decree, as rendered, is certainly anomalous in character and questionable in principle. The chief argument in support of it is the assumption that the default in the first installment entitled the mortgagee to a final and conclusive foreclosure of the mortgagor's equity of redemption, as to any and every portion of the land mortgaged; and that, therefore, as the mortgagee might thus have obtained an irredeemable title to the entire tract, the mortgagor cannot complain that he has elected to have it sold for paying the whole debt, according to the prescribed installments.

But can this assumption be maintained by either authority or principle?

In England it is the established practice under the common law, to decree a foreclosure without sale unless--1st, the mortgagor consent to a sale; 2nd, the interest mortgaged be a dry reversion or an advowson; 3rd, the estate be insufficient to pay the debt; 4th, the equity of redemption descends to an infant; 5th, the mortgagor becomes bankrupt; 6th, the estate lies in Ireland, where, as here, the more eligible practice prevails, of decreeing sales unless both parties prefer a simple foreclosure, whereby the mortgaged estate is vested irrevocably in the mortgagee, in satisfaction of his entire debt.

English practice in decreeing on bills on mortgages--a bar foreclosure without sale.

Ireland, to decree a sale in all cases without consent.

And there can be no doubt that, under an ordinary mortgage of land for an aggregate debt, payable in installments, the mortgagee may, after default in the first or any other payment, enter or maintain ejectment and retain possession of the entire tract, subject to an account for the profits; because the condition of defeasance being indivisible, a failure to pay, as stipulated, the entire debt or any portion thereof amounts, in technical law, to a forfeiture.

An entire debt payable in installments, on failure to pay first installment, mortgage forfeited and mortgagee may enter.

But has it ever been adjudged in England or elsewhere, that, for a failure to pay one of several installments a Court of Equity should decree a conclusive foreclosure of the equity of redemption as to the whole of the mortgaged property? We have not been able to find any such judicial decision. The cases of Stanhope vs Manners, (2 Eden. 197; ) Gladwin vs Hitchman, (2 Vernon, 135,) and Leveridge vs Forty, (1 Maule & Selwyn, 706,) have been inadvertently referred to by Mr. Coventry, as looking that way: Coventry's Powell, 3 vol., 903-965. But no one of these cases, when examined, will be found to contain any thing which could authorize such a reference. In Stanhope vs Manners, interest was payable periodically, on each of several installments of principal, and the mortgagee had, by an express stipulation in the mortgage, the election to call in all his money on a default in the payment of any one installment of interest. And, on a failure by the mortgagor to pay interest, the mortgagee having elected to call in his entire debt, the Court decided that he had a right to do so, and, therefore, to foreclose the equity of redemption as to all the installments and the whole mortgaged estate.

But in such case a Court of Equity will not decree a conclusive foreclosure of the equity of redemption as to the whole.

The only...