McKee v. Angelrodt

• Citation: 16 Mo. 283
• Parties: MCKEE, Respondent, v. ANGELRODT et al., Appellants.
• Decision Date: 31 March 1852
• Court: Missouri Supreme Court

16 Mo. 283

MCKEE, Respondent,

v.ANGELRODT et al., Appellants.

Supreme Court of Missouri.

March Term, 1852.

1. The assignee of a lease by way of mortgage is not liable to the lessor for rent, unless he enters into possession.

Appeal from St. Louis Circuit Court.

On the 19th day of April, 1849, McKee leased certain premises, situated in St. Louis, to one Frederick Angelbeck, for a term of years. On the 18th day of April, 1851, Angelbeck assigned the lease in question to appellants, by way of mortgage, to secure appellants for certain advances by them made, and thereafter to be made. McKee brought his suit to recover the rent due by the terms of said lease, which rent accrued after the date of the assignment by way of mortgage above mentioned. The suit was brought against Angelbeck, the lessee, and the appellants as assignees. Angelbeck, the lessee, filed his answer, which, upon motion, was stricken out, and judgment rendered against him for the amount claimed. Appellants filed a separate answer, setting up, amongst other things, “that the said lease was assigned to them only by way of mortgage, and that they have not now, and never at any time have had, any other assignment of the same, except as security by way of mortgage; and that the appellants had never at any time had possession of the leasehold premises.” McKee moved to strike out the answer of the appellants and for judgment. The court sustained the motion; whereupon the appellants asked and obtained leave from the court to file a further and amended answer, by which they set up, as a defense to the action, that the said leasehold premises were only assigned to them by way of mortgage, and that they had never had possession of the premises, and that before the attempted assignment to them by way of mortgage, and on the 7th day of January, 1850, the said Angelbeck had assigned and transferred the said lease to Switzer, Platt & Co., who thenceforth became the legal assignees of the same, and still continue the legal assignees of the same. McKee moved to strike out this answer and for judgment, for the following reasons:

1. That the appellants were estopped from denying that they are legal assignees of Angelbeck, having signed the agreement by which the assignment by way of mortgage was made.

2. That the appellants, having put upon record an answer under oath, stating that they are assignees, cannot now put upon record an answer stating that they are not assignees, without informing the court, under oath, that Switzer, Platt & Co. intentionally received, unknown to them, and now claim to hold, the residue of the term of years, created in said lease, by virtue of an assignment from Angelbeck to said Switzer, Platt & Co. previous to the assignment to appellants.

3. That the assignment from Angelbeck to Switzer, Platt & Co. does not purport to be a conveyance of the deed of lease and the term thereby created, but only of an uncertain and undetermined interest.

4. Because judgment was rendered in favor of the plaintiff on the first answer, and defendants ought not to be permitted to file another answer, until after motion granted for a new trial.

The court sustained the motion, and gave judgment for the plaintiff, and the case is brought here by appeal.

C. B. Lord, for appellants.

I. The assignee of a lease, who takes such an assignment only by way of mortgage, and who has not taken possession of the premises before the mortgage has become forfeited, is not liable to the performance of the lessee's covenants.

Assignments by way of mortgages, being merely conditional, are not considered as an actual transfer of the property, but as a security only for money. Eaton v. Jaques, Douglas, 460. (See note, Woodfall's Landlord and Tenant, 357.)

If a lessee for years, with covenants to repair, assigns to J. S., by way of mortgage, and J. S. never entered, he will not be compelled to repair, though he had the whole interest in him. Sparkes v. Smith, 2 Vernon, 275.

The assignee is only liable in respect to his possession; he bears the burden while he enjoys the benefit, and no longer. Douglas, 184, 460; Woodfall's Landlord and Tenant, 348.

In the case of Eaton v. Jaques, Douglas, 455, it was determined that a mortgagee, assignee of a term of years, should not be liable on the covenants in the lease, unless he had taken actual possession.

In Williams v. Bosanquet et al., 5 Com. Law Rep. 72, this doctrine was overruled, and it has since been held in England that the mortgagee is liable, although he never entered into possession, because he has the legal estate.

The decision in Eaton v. Jaques is quite as consonant to sound reason as the decision in Williams v. Bosanquet et al.; at all events the latter case can have no influence here; the liability of the mortgagee is put expressly on the ground of his having the legal estate. Whereas, here the legal estate is in the mortgagor, and the mortgagee has but a chattel interest. It is on the strength of this last case that Chancellor Kent lays down the rule that the mortgagee of the whole term is liable for payment of rent, whether he enter or not.

In the case, too, of Williams v. Bosanquet et al., the mortgage money was due and the mortgage had become absolute. (See 5 Com. L. R., opinion of Dallas, C. J., pp. 77-8.)

Again, what privity of estate is there between lessor and assignee by way of mortgage, when the mortgage has not become absolute, and when the mortgagee has not taken possession, and is not even entitled to the possession? In the case at bar, the assignee could not take possession until condition broken. There must be privity of contract or privity of estate; there was neither here.

The assignee must take the place of the assignor in law and in fact; in law, by taking the legal estate; in fact, by taking possession and receiving the rents and profits.

If the assignee assign over his term, he is not liable for the breach of any covenant after such assignment. The privity of estate is gone. Douglas, 452; 2 Atkyns, 546; 4 T. R. 99; 8 id. 61; 1 Bosanquet & Puller, 23. And the assignment will be good, though made to a beggar or to a person leaving the kingdom. Douglas, 764; 1 Bosanquet & Puller, 23; Woodfall's Landlord and Tenant, 350.

It is now, I believe, universally held, in law and equity, that the mortgage is a mere security for the debt, and only a chattel interest. The mortgagor continues the real owner of the fee. 4 Kent, 161. He has not the legal estate. Laws 1845, sections one and three, and following. In Crinion v. Nelson, 7 Mo. Rep. 466, it was decided that a mortgage deed, under our statute, was no more than a bond to pay money, and might be assigned by parol, and that a mortgage did not carry the legal estate as in England. See, also, Robertson v. Campbell, 8 Mo. Rep. 616.

In Walcop & Griswold v. McKinney's Heirs, 10 Mo. Rep. 230, the court seem to have adopted the doctrine laid down in 1 J. J. Marshall, 257, but seem to hold that after the mortgage has become absolute, the mortgagee may maintain ejectment, but not till after forfeiture.

In New York it is held that the assignee, by way of mortgage, is not liable upon the covenants. Astor v. Hoyt, 5 Wendell, 603. All the right, title and interest must pass out of the lessee to the assignee. Now, when the mortgagor is the real owner, can all right, title and interest be out of him? Walton v. Cronly's Administrator, 14 Wendell, 63, opinion of Sutherland, Justice. We think, therefore, that the court below erred in striking out the first answer.

II. By the amended and further answer, filed by leave of court, we show that we could not take the estate, though we had a nominal assignment of the lease, because there was a prior assignment, absolute upon its face, to Switzer, Platt & Co., yet the court below decided that we were estopped from showing that fact as a defense, and that is error.

1. It is contended that we are estopped by the recitals in the deed of assignment. We think not. When a recital in a deed is intended to be the statement of one party only, the estoppel is confined to that party, and the intention is to be gathered from construing the instrument. Dart's Vendors and Purchasers of Real Estate, 254.

A general recital in a deed does not conclude a party. 5 Johns. Ch. Rep. 23, 26.

A recital in a deed founded in mistake, and untrue in fact, will not be allowed to operate by way of estoppel to exclude the truth satisfactorily shown to the court. Stoughton v. Lynch, 2 Johns. Ch. Rep. 209. In most of the cases where recitals are held to estop, it will be found that what is said to be recital is so mixed up with the operative parts of the deed, that the estoppel will generally be found to refer to those parts rather than to matter of recital.

2. We surely are not precluded from showing the real nature of the estate, or whether there was any estate. Gaunt v. Wainman, 32 E. C. L. R. 42.

The signing of the deeds admits its execution, but it is consistent with the deed to show that nothing passed by it, or that the grantor was not seized at the time. Comyn's Dig. tit. Estoppel (E. 3), page 205, vol. 4, of 1st Am. edition, from 5th Eng. edition. We are estopped from denying the deed, but not from denying its operation. Hayne v. Maltby, 3 Term Reports, 439.

A recital, to amount to an estoppel, must come from the party to be estopped. Miller v. Bagwell, 3 McCord, 429. Grantee is not estopped from denying that grantor had no title. Averill v. Wilson, 4 Barb. Sup. Ct. Reports, 180. As to the supposed estoppel by the first answer, an estoppel must be certain to every intent. Co. Litt. 353 b,i 303 ia; Com. Dig. (E. 4) 205.

If, therefore, a thing be not directly and precisely alleged, it shall not be an estoppel, or if it be alleged by way of inference, a recital. Com. Dig. (E. 4) p. 205; 18 Johns. Rep. 490; Averill v. Wilson (see opinion at page 188), 4 Barb. Sup. Ct. Reports, N. Y.

Now, what does the answer say? “That the assignment to them was only by way of...