F.C. Whiting v. C.A. Adams
| Decision Date | 01 January 1894 |
| Citation | 30 A. 32,66 Vt. 679 |
| Parties | F.C. WHITING v. C.A. ADAMS |
| Court | Vermont Supreme Court |
JANUARY TERM, 1894
Bill of foreclosure. Heard upon the report of a master at the April term, 1893. ROWELL, chancellor, decreed that the master's report be accepted and confirmed; that the orator account to the defendant for the gross value of the timber, being eight hundred sixteen dollars and twenty cents for loss occasioned by cutting stumps too high, twelve dollars; for personal property sold at auction, one hundred sixty-two dollars and fifty cents, and for rent of premises to date, twenty-one dollars and thirty-three cents, making in all the sum of one thousand twelve dollars and three cents that there was due the orator on said mortgage the sum of six hundred ninety dollars and thirty cents, and that enough of said one thousand twelve dollars and three cents be applied thereon to pay and extinguish the same, leaving nothing due on the mortgage; that the defendant may have leave to file a cross-bill for the recovery of the surplus; that if no cross-bill is filed the original bill be dismissed, and that in any event "in view of the unnecessary and offensive conduct of the orator" the defendant recover his costs. The orator appeals.
Decree affirmed and cause remanded.
P.K. Gleed and B.A. Hunt for the orator.
OPINION
This is a petition to foreclose, in legal effect, a mortgage. The parties agree that they stand, in regard to the premises, in the relation of mortgagor and mortgagee. This admits that the defendant has an equity in all the property embraced in the contract sought to be foreclosed. The orator cannot rely upon any other rights than those of mortgagor, however absolute his paper title to the property. Davis v. Hemenway, 27 Vt. 589. The defendant had been in possession of the premises many years. He gave a mortgage on them which was foreclosed and became absolute April 30, 1889. H. A. Jackson bought out the orator in the foreclosure proceedings, and, on the same day, bargained them to the defendant, upon his agreeing to pay one thousand one hundred and eighty dollars therefor. This sum was to be paid on time, extending over several years. It is apparent that Jackson held the title to the premises as security for the payment of that sum. The defendant had remained in possession. By the contract he was still to remain in possession, carry on the premises without suffering or committing waste, and if he cut any lumber, pay Jackson an agreed stumpage. Jackson also thereby retained a lien on all crops grown each year, until the payment for that year was fully made.
The defendant paid to Jackson five hundred fifty dollars before November, 1892. He was then behind in the payment of that year one hundred fifty dollars and some interest. The orator purchased Jackson's interest in the premises, and took a deed thereof agreeing to carry out Jackson's contract with the defendant. This was August 18, 1892. November 1, 1892, he brought this petition, which was served on the defendant November 24, 1892. Soon after, the orator went to the premises, and found the house locked and the defendant temporarily absent. He effected an entrance, removed all of the defendant's things, including his live stock, put in a tenant, forbade the defendant to enter, and caused his arrest for entering. He took possession of the crops grown that year, which at a fair valuation were worth more than enough to pay all that was then due under the contract. The premises were ample security for all that was to become due under the contract. There was a timber lot on the premises. The orator soon entered upon that and stripped it of everything that was valuable. Waiting thirty days after taking possession, the orator placed the land contract in the hands of a deputy sheriff who proceeded to sell the crops grown on the premises under the provisions of the statute for the foreclosure of a chattel mortgage.
The first question arising is whether this sale was authorized by law. The land contract in which the lien was reserved was not a chattel mortgage. It was not executed as required for a valid chattel mortgage. R. L., 1966, 1967. If in other respects duly executed--which we do not consider, nor determine--it was not sworn to by the parties to it. The method of foreclosure pursued by the orator was a part of the act authorizing chattel mortgages and applicable only to such mortgages as are executed in accordance with its provisions. Longey v. Leach, 57 Vt. 377; Howard v. Witters, 60 Vt. 578; Stafford v. Adair,57 Vt. 63; Calkins v. Clement, 54 Vt. 635.
Although the land contract does not run to Jackson and his assigns, yet the title to the premises was vested in him. Hence the title to the emblements, or annual crops grown thereon vested in him, except so far as they were released by the contract. By that, the title to the yearly grown crops between the parties to that contract was held by Jackson as security until the payment of that year was made. Paris v. Vail, 18 Vt. 277; Smith v. Atkins, 18 Vt. 461; Briggs v. Oaks, 26 Vt. 138; Briggs v. Bennett, 26 Vt. 146; Gray v. Stevens, 28 Vt. 1; Esdon v. Colburn, 28 Vt. 631; Leland v. Sprague, 28 Vt. 746; Baxter v. Bush, 29 Vt. 465; Bellows v. Wells, 36 Vt. 599; Cooper v. Cole, 38 Vt. 185.
But the defendant, in legal effect, being a mortgagor in possession, the crops grown by him might possibly have been held if attached by his creditors. Cooper v. Cole, 38 Vt. 185. The land contract between the parties was a common law mortgage of the yearly grown crops to secure the payment agreed to be made that year. Atwater v. Mower, 10 Vt. 75: Coty v. Barnes, 20 Vt. 78; Wood v. Dudley, 8 Vt. 430; Taggart v. Packard, 39 Vt. 628; Blodgett v. Blodgett, 48 Vt. 32.
Such mortgage can be foreclosed, or a bill brought to redeem the property, in the ordinary method of foreclosing mortgages. Blodgett v. Blodgett, supra. The orator, not at law, but in equity, succeeded to the rights of Jackson under the contract. He can maintain the bill, as originally brought, to foreclose the defendant's rights not only in the land named in the contract, but also in the crops grown in the year 1892. The crops are the growth of the land, and held by the contract for payment of a part of the same debt for which the land is held. They are both held for the payment of the same claim. He cannot, in equity, be allowed to separate their foreclosure, thereby increasing the cost, and proceed against the land for the payment of the debt by this bill, and at the same time take an independent proceeding, under the chattel mortgage law, to obtain payment also from the crops. Proceedings prescribed by the chattel mortgage law are adapted and intended for mortgages executed under the provisions of that law. Calkins v. Clement, 54 Vt. 635.
He did not attempt to sell the crops under a common law mortgage. Taggart v. Packard, 39 Vt. 628. By attempting to sell the crops in a method unauthorized he converted them to his own use, and must account for them at their fair market value. The defendant's right to redeem equitably vested in the land and crops, taken as one security for the payment of that portion of the debt which was then over due. He was under a duty to exercise this right with reference to both, and not with reference to the crops, separate from the land. Soon after bringing his bill, and therein acknowledging the equitable right of the defendant to redeem both the land and crops, the orator took possession, for condition broken, in a manner calculated, if not intended, to deprive the defendant of his right of redemption. He not only removed the defendant's household goods, but turned out his live stock, sold the hay in a manner unauthorized, and began at once to cut and remove all the timber suitable to be manufactured into lumber. A mortgagee, in possession, is under a duty to use the premises and property like an ordinary prudent owner. He is bound to make necessary repairs. He cannot improve the owner out of his equity, nor can he unnecessarily, when the security is ample, encroach upon the body of the property pledged.
He is bound to derive a reasonable income from the use of the property and apply it, first, to keeping the interest extinguished, and the surplus to the extinguishment of the principal. He can legally no more commit waste than can the mortgagor. He is chargeable for loss, incurred by his wilful default. He is not entitled to receive anything for his own personal services. Pom. Eq. Jur., ss. 1215, 1216, 1217 and notes; Barnett v. Nelson, 54 Iowa 41, 37 Am. R. 183; Sanders v. Wilson, 34 Vt. 318; French v. Bowen, 2 Aik. 120; Moore v. Cable, 1 Johns. Ch. 385, 1 N.Y. Ch. (L. Ed.) 381 and note; Benedict v. Gilman, 4 Paige Ch. 58, 3 N.Y. Ch. 55 and note; Currier v. Webster, 45 N.H. 226; 2 Jones, Mortg., ss. 1123, 1125. S. 1123 says he must account for waste committed by him while in possession. In s. 1125 it is said.
"If the property is otherwise sufficient, the mortgagee has no right to open and work mines; and, if he does so, will be charged with the gross receipts without any allowance for the expense of working."
Under the principle, that he who seeks equity must do equity, every case is largely controlled by its own facts. From the facts reported, from the manner in which the orator took possession, in which he sold the personal property, and in which he stripped the premises of all the valuable lumber when his security was ample, it is apparent that he purposely and intentionally disregarded the rights of the defendant, and intended to place him and the property in such condition that he could not raise, on the property, the money required to redeem it. He thereby placed himself in the light of a wilful...
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