1 U.S. 142 (1785)

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DORROW v. KELLY, 1 U.S. 142 (1785)

1 U.S. 142 (Dall.)

Dorrow Assignee v. Kelly

Court of Common Pleas, Philadelphia County September Term, 1785

This came before the Courts on a case stated; in substance as follows:

On the 5th of March 1782, a mortgage was executed by Abel Kelly to Thomas Groome and his assigns, for securing the payment of L47.4.0 with interest on the 5th of March 1783. On the 9th of August 1782, the mortgage was assigned for a valuable consideration to John Dorrow; who sued out a Scire Facias to June Term 1784, the day of payment being past. After the Assignment, and before the Scire Facias sued, Kelly became indebted to the said Dorrow by notes and book accounts in divers sums, which still remain unpaid and payable.

Ingersoll, for the defendant, had obtained a rule to show cause why the proceedings on the Scire Facias should not be stayed, upon payment of the principal mortgage money, interests and costs only; without payment of the subsequent simple contract debts.

Lewis, for the Plaintiff, showed cause, and stated from the books the law on the subject in England: That is is presumed the subsequent simple contract debts, were contracted on the faith of the first security, though no special agreement for the purpose; that after the day of payment, the mortgaged premises are forfeited in strict law; the privilege of redemption afterwards is a matter of equity, which shall be withheld until the mortgagor does equity by payment of all debts; that it prevents a multiplicity of suits, and effectuates substantial justice. And he contended that in Pennsylvania, the chancery jurisdiction for redemption of mortgages, is transferred by the act of Assembly to the common law Courts, which will also take care that he who claims equity shall do it. He cited a great number of cases, both as to the reasons and conclusions of the law. 3 Peer Wms. 334. 3 Atk. 556 630. 1 Chan. Cases. 97.2. Vern. 286. 2 Chan. Cases 98. 2 Vern. 177. Prec. Chanc. 18. Gilb. Rep. in Eq. 104. Prec. Chanc. 419. 16 Vin. 264. 5. 1 Peer Wms. 775. 6. 1 Vern. 244. 4 Salk. 240. 1 Eq. Cas. Abr. 325. 2 Ibid. 594. Gilb. Rep. in Ep. 96. Max. of Eq. 1 Treatise of Eq. 89.90.

Ingersoll read some authorities to show, that even in England, the law on the subject is not thoroughly settled. 2 Stra. 1107. Eq. Cas. 359. 3 Bac. Abr. 651. Prec. Chanc. 407.419. But, conceding it

Page 1 U.S. 142, 143

to be as stated by the opposite counsel, yet, he contended, that it is very different in Pennsylvania. Our act of Assembly (Prov. Laws 51.) puts mortgages on quite another footing: For, rst. Mortgagee cannot proceed on the mortgage until one year expires after day of payment elapsed. 2d. Even then a process is directed by the act, altogether different from that which is practiced in England, and which does not go to vest the legal estate in the mortgagee. 3d. In fact, the mortgagee cannot by any default of the mortgagor, however long, or reiterated, acquire a right to more than principal, interest and costs, for the amount of which he has an absolute and specific lein on the mortgaged land, and for the payment of which, the said lands are to be sold on execution (after judgment on the Scire Facias) in the usual way. And the act for acknowledging and recording of deeds S. 9, 10, (Prov. Laws. 79) directs under a heavy penalty, that upon payment made as aforesaid, the mortgagee at the request of the mortgagor, shall acknowledge satisfaction on the margin of the record of the mortgage,which acknowledgment shall be a bar to all actions brought or to be brought on the mortgage, and shall forever discharge, defeat, and release the same. He then read the law of mortgages in England from 2 Black Comm. 157. and contrasted it with our act of Assembly. In England, after day of payment past and foreclosure, the land is absolutely in mortgagee without any possibility of recall; it ceases to be a pledge, and becomes to all intents and purposes the absolute property of the mortgagee. In Pennsylvania, there is no such thing as foreclosure, the land mortgaged never ceases to be a pledge; a legal estate never vests in the mortgagee, nor can he by any possibility become owner of the land, unless he purchases under the execution. Hence, it must appear, that the reason of the English cases cannot apply in Pennsylvania. Relief is given to the mortgagor in Chancery, expressly because he is remediless at law; and, therefore, they will grant the equity upon what terms they please. In Pennsylvania, the act of Assembly precludes all necessity for such an interference. The privilege of redemption after the day of payment past is not properly speaking an equity, and therefore the principle of the chancery cases cannot exist. Another reason why the English cases do not apply is, that, in England, real estate is not answerable for simple contract debts; and, therefore, Chancery, in favour of such creditors, will cover them where they have it in their power; but here the simple contract creditor can come on the land even in the hands of the heir. If the rule should be extended to Pennsylvania, the most mischievous consequences would ensue to purchasers. It would be in vain for them to search the offices to see to what amount a tract of land may be incumbered by mortgages; because, however accurate he may be in his calculation and comparison of the value of the land with the amount of the mortgage debts, an infinity of intermediate simple contract debts may swallow up the whole difference.

Lewis observed, in reply, that the mischief suggested by his opponent need not be apprehended, because all the cases agree, that [1 U.S. 142, 144]

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