Fogarty v. Sawyer
Before: Field
Synopsis
A clause in a mortgage authorizing the mortgagee to sell the premises on default of payment, and out of the proceeds to satisfy the mortgage, and render the surplus to the mortgagor, his heirs or assigns, includes the power to execute a conveyance to the purchaser.
At common law, a mortgage was regarded as a conveyance of a conditional estate, which became absolute upon breach of its conditions. It gave to the mortgagee—except as otherwise provided by stipulations inserted in the instrument— a right to immediate possession. Upon it he could enter peaceably or support ejectment.
The two hundred and sixtieth section of our Practice Act changes this character of the instrument, and takes from the mortgagee all right to the possession, either before or after condition broken, and makes the mortgage a mere lien; but this section does not prevent the owner from making an independent contract for the possession, or from authorizing a sale of the premises, the mortgagee consenting thereto, to pay the debt.
The words “ whatever its terms ” in this section were intended to control the terms of grant, bargain and sale, generally employed in mortgages, and do not relate to stipulations for possession or sale.
A mortgagor in this State may invest the mortgagee with a power to sell the premises upon default in the payment of the debt secured; and when the sale is conducted in accordance with the conditions of the power, and is fairly made, a good title will pass to the purchaser upon its consummation by a conveyance.
Field, C. J. delivered the opinion of the Court Baldwin, J. concurring.
This is an action of ejectment to recover certain premises situated in the city of San Francisco. Of the several defendants Saw'yer alone appeals, and the questions presented arise in the controversy between him and the plaintiff. Both of these parties deraign title from one Daniel Markwert, to whom an alcalde grant was issued in December, 1849. It is unnecessary to pass upon the validiity of the grant; it must be considered as valid, so far as the present controversy is concerned, as it is the common source of title. (2 Green. Ev. sec. 307.)
The plaintiff relies upon a deed from Markwert to one Sanders, bearing date in June, 1854, and a deed to himself from the Sheriff of the county of San Francisco, made in November 1856, upon a sale under execution, issued upon a judgment recovered against Sanders. The deed from Markwert recites a nominal consideration of $4,000, but was in fact executed to Sanders upon an agreement between the parties that the latter would institute legal proceedings and recover the premises from the occupant. No proceedings -were, however, taken by him in the matter. At the Sheriff’s sale the interest of Sanders was struck off to the plaintiff for the sum of twenty dollars.
The defendant relies upon a sale of the premises under a power contained in a mortgage executed to one Zimmerman by Markwert, in August, 1851, to secure the latter’s promissory note for seven hundred and twenty-four dollars,bearing even date with the mortgage, and payable in six months. The mortgage is in the usual form, with a clause [591]authorizing the mortgagee and. his assigns, in case of default in the payment of the note and interest,” to sell the premises above granted at public outcry, or so much thereof as will be necessary to satisfy said note, and all the interest due thereon, with all proper costs and expenses attending such sale,” the surplus, if any, to be rendered to the mortgagor, his heirs or assigns. In October, 1852, the note and interest not being paid, the premises were sold at public auction after due advertisement. The sale was for cash, and the property was struck off to one Hewlett, who was the highest bidder, and to him a deed was executed by Zimmerman, in the name, and as the attorney in fact of Markwert. Two hundred and seventy-five dollars were received from the sale, and that amount was applied on the note ; the balance has never been paid. With the delivery of the deed the mortgagee passed over to the purchaser the note and mortgage, and also put him in possession of the premises, and he or those claiming under him have been in possession ever since. The defendant traces his title by sundry mesne conveyances from Hewlett, and rests the defense principally upon the validity of the sale and deed to him. The Court excluded the deed, under the objection that Zimmerman had no authority to convey the property, and the plaintiff recovered. This ruling the respondent endeavors to sustain from the language of the instrument and the provisions of section two hundred and sixty of the Practice Act. Neither of the positions taken can be maintained.
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