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Decisions of the Superior Courts of New South Wales, 1788-1899

Ellison v. Kirk [1834] NSWSupC 109

mortgage, foreclosure - equity of redemption, sale of - fieri facias, equity of redemption in land - fieri facias, land - Supreme Court, merger of equity and common law jurisdictions - reception of English law, land law

Supreme Court of New South Wales

Forbes C.J. and Dowling J., 5 July 1834

Source: Australian, 8 July 1834[ 1]

Ellison v. Kirk - Dr. Wardell appeared to shew cause against a rule obtained by the defendant to set aside the judgment and proceedings in this cause.  The learned gentleman put on affidavits denying in full the allegations of fraud contained in the defendants affidavit, and stated, that the only points now remaining for consideration, was, the power of the plaintiff to sell an equity of redemption, might be raised by the Learned Counsel on the other side.  He would briefly call their Honors attention to the Act of Parliament which placed lands in this Colony in the same situation as personal property, and that being the case, the practice had been ever since the foundation of the Colony, for a Warrant of Attorney to accompany a Mortgage Deed, if therefore that was the practice, with what view could the Warrant of Attorney be given, except to enable the mortgager to sell the lands, as empowered by the Act of Parliament.  Again, another object was to bind the land, so that the mortgager might have the power of selling in case of non-payment; but the sheriff had not sold an equity of redemption, he had only sold defendants interest in the lands - it might be something, it might be nothing.

Mr. Wentworth in supporting the rule, was under the necessity of admitting, that as to the facts, the defendant had been completely sworn out of Court, and the case must be consequently dealt with on the law.  It is quite clear, that the sheriff could not sell an equity of redemption, indeed if he could, that branch of the equity jurisdiction of the Court, would be totally annihilated - had the judgment been regularly obtained, the Court might have some doubt as to the sheriff's power to sell, but in this case it is obtained on a Warrant of Attorney accompanying a mortgage; under this, the sheriff has sold an equitable asset, and in support of his position, the Learned Counsel cited Coote, on mortgage p. 54.  Will a Court continue, and the Learned Gentleman allow one of the most settled principles of equity to be annihilated; once, a mortgage is always a mortgage, it can only be got over by a foreclosure.  Dr. Wardell had argued that the law here was different from that of England, the only difference was, that land in England was only extendable for one-third of the annual proceeds, and that here land was saleable altogether.[2 ]  This did not alter the land with respect to an equity of redemption.  Land mortgaged, had always its inseparable attendant; an equity of redemption.

The Chief Justice stated, that the Court would reserve the argument relative to an equity of redemption; the first part relative to the fraud had been abandoned.  An equity of redemption was a cicature [sic] of a Court of Equity, distinct from a Court of Common Law, it was peculiarly a creation of its own.  It had been stated from the bar, these Warrants of Attorney were of frequent occurence [sic], it became therefore the Court, to see that they were not turned to injustice.  On these grounds, the Court reserved the point for further consideration.

 

Forbes C.J. and Dowling J., 18 October 1834

Source: Australian, 24 October 1834[ 3]

 

IN BANCO.

Ellison v. Kirk - This was an application made to the Court last Term to set aside the judgment on a warrant of attorney, and execution issued thereon in this case, with costs, on various grounds, which went to the merits of the case, but which are not now necessary to be stated, as those grounds were completely negatived by the affidavits on shewing cause against the rule.  A point, however, of considerable importance to the interests of mortgagers and mortgagees in this Colony was raised and reserved for the consideration and decision of the Judges, namely, whether an equity of redemption may be taken n execution at law, under a writ of fieri facias, and sold to satisfy a judgment debt.  The facts disclosed upon the affidavits upon which the question arose were these: the defendant Kirk, being seized in fee of certain farms, borrowed of plaintiff the sum of £62 thereon by way of mortgage, redeemable at the expiration of 999 years, and gave the plaintiff his warrant of attorney as a collateral security for the amount.  Shortly afterwards, the plaintiff entered up judgment on the warrant of attorney, and took out execution thereon, and under the fieri facias sued out, the Sheriff sold the farms, together with some wheat, and other personal property on the premises.  The Judges took time to consider, whether under these circumstances, the Court could set aside the judgment on the warrant of attorney, and execution thereon.

His Honor the Chief Justice now delivered the judgment of the Court.  It having been admitted by the defendant's counsel, that his client was ``sworn out of Court," by the affidavits filed on the part of the plaintiff, on shewing cause against the rule, as to those parts of the case which alleged fraud, usury, and abuse of the process of the Court in their transaction.  The question reserved for our decision is reduced to the narrow one, whether an equity of redemption could be seized and sold under the warrant of attorney given as a collateral security to the mortgage.  Two points were made, in argument, first, whether an equity of redemption in a term of years could be taken in execution under a writ of fieri facius, or any other process at law; and secondly, (assuming it could not) whether this Court is now in a situation to afford the defendant redress under the particular circumstances of this case.  This case was argued last Term before Mr. Justice Dowling and myself, in the absence of Mr. Justice Burton, at Norfolk Island.  We have given the case the fullest consideration, and it appears to us, that the decisions both of Courts of Law and of Equity, are too clear that an equity of redemption, or power of redeeming a mortgaged estate, cannot be taken in execution at law.  In this case the estate was freehold, and the defendent [sic] had mortgaged it for a term of 999 years.  He there had still the residuary fee, and a right to redeem the term if he had the means at any time of doing so, by coming into a Court of Equity, and tendering the principal and interest due upon the mortgage.  It is too clear now to be doubted, that an equity of redemption is not capable of being taken in execution either under a fieri facias, or any other legal process.  Before the Statute of Frauds, trust estates could not be taken in execution by any legal process.  That statute was introduced to allow trust estates to be taken, but it is limited, in terms, to trust estates of inheritance; and it has been expressly holden, that the trusts of a term of years are not within the operation of that statute.  The case of Scott v. Scholey, 8 East 467, is conclusive upon this point.  That was an action against the Sheriff for a false return of nulla bona, and the question was, whether an equitable interest in a term of years could be sold under a fieri facias, and after great debate, the Court was of opinion, that the Sheriff's return of nulla bona, the defendant in the execution having no other property besides the trust property in question, was not a false return.  In the case of Lyster v. Dolland, 3 Brown, ch, ca. 480, and 1 Vez. Jun. 431. Lord Thurlow was, after much consideration, also of opinion, that an equity of redemption of a term could not be taken in execution.  It appears to us, therefore, on these authorities, that the beneficial interest which remained in the defendant Kirk, after carving out the term of years mortgaged, was incapable of being taken in execution.  The statute 54 Geo. 111. C. 15 (peculiarly applicable to this Colony) which subjects real estates to be taken in execution for the satisfaction of debts in like manner with personal property, does not touch this case, and it must therefore be laid out of consideration.  That statute has two objects; first, to make real estates in this Colony assetts [sic] in like manner as chattels; and, secondly to render them liable to execution under a fieri facias, in the same manner as personal estates are seized, extended, sold or disposed of for the satisfaction of debts.  That statute, therefore, has no further bearing on the present case.  Having now disposed of the preliminary point, that the equitable interest of Kirk could not be touched by the mere legal process of the Court, and that the remedy of the parties must be through the instrumentality of a Court of Equity, we now proceed, to consider secondly, how far this Court has any jurisdiction to administer relief, under the peculiar circumstances of this case.  There is no evidence of any assent on the part of Kirk to the sale of the property, and, therefore, it is probable he would be relieved in a Court of Equity; but assuming (as we are bound to do) that his equity of redemption was not liable to be sold under the fieri facias, can this Court grant relief?  The application to this Court, goes to the extent of setting aside the judgment altogether, which has been entered upon the warrant of attorney, and the execution issued thereon, together with costs.  Now as to setting aside the judgment, that is entirely out of the question.  We cannot touch the judgment.  It has been ruled, that, where a party has several remedies for the same debt, he may pursue all at the same time.  In Burnett v. Martin, Doug., 417, the party had a mortgage, and also a bond as a security for the debt, and it was held that he might bring an action on the bond, and arrest the defendant, pending a suit in equity for a foreclosure, and on motion to discharge the defendant out of custody on filing common bail, on the ground that the mortgaged premises were an ample security for the debt; Lord Mansfield said the motion could not be complied with, for  that it had been settled over and over again, that a person in such a case, is at liberty to pursue all his remedies at once, and the rule was refused.  If it were not so, why was the warrant of attorney given in the present case?  The case of Schole v. Salt, 1 Sch. and Lef. 176, is to the same effect, where it was held that the oblige of a bond might proceed on the bond notwithstanding the mortgage, but the obliger was not bound to pay the debt, until he was secured by having his title deeds delivered up; and for that purpose, the Court would restrain the mortgagee from proceeding on the bond, until the obliger was secure of his title deeds.  As, therefore, the party might proceed on a bond for the same debt, so may he proceed on a warrant of attorney for the same debt.  There may be cases in which relief would be afforded in a Court of Equity, and assuming this to be one, then comes the question, whether from the state in which this case is now presented to the Court, we can interpose to afford an appropriate remedy.  It appears to us, that the application is too late.  If there had been an application before the sale of the property took place, and before other interests had been involved, the Court might have interposed to protect the mortgager, if there were an intention manifested by the creditor to proceed both on his warrant of attorney and mortgage.  But after the actual sale of this property, and the rights of other parties not here before the Court, have become involved, and especially as in this case, the estate was sold subject to a prior mortgage - We think we cannot interpose without doing more mischief than can be remedied in this Court, notwithstanding its extensive power over warrants of attorney.  This case, resting as it does, upon a mere question of equitable interest, which cannot be disposed of by execution under common law process, and having so determined, still, however extensive our jurisdiction may be over warrants of attorney, we are bound to hold that, as the case is at present situated, we cannot interpose without blending the jurisdiction of a Court of Equity with that of a Court of Law, which we ought not to do, and must, therefore, discharge the rule. - Rule discharged.

 

Notes

[1 ] See also Sydney Gazette, 8 July 1834; Dowling, Proceedings of the Supreme Court, State Records of New South Wales, 2/3283, vol. 100, p. 10.

[2 ] The reference appears to be to the liability of land to be seized and sold for the benefit of judgment creditors.  In New South Wales there was a special procedure in (1813) 54 Geo. III c. 15, s. 4 under which land was effectively subject to fieri facias as if it were goods.  In England, where aristocratic land had profound social and political implications, land was subject to only limited remedies (including elegit) until 1838 when freehold became available for execution.  This debate in Ellison v. Kirk, then, is about the implications of this distinction.  See B Kercher, ``An Indigenous Jurisprudence? Debt Recovery and Insolvency Law in the New South Wales Court of Civil Jurisdiction" (1990) 6 Australian Journal of Law and Society 15 at 33.

[3 ] The judge's notes are in Dowling, Proceedings of the Supreme Court, State Records of New South Wales, 2/3287, vol. 104, p. 33 (much of them in shorthand) and see Forbes' notes pasted into the back of the volume. 

See also Sydney Gazette, 21 October 1834, and Australian, 21 October 1834.  The Sydney Gazette concluded its report as follows: ``There was no assent of the defendant Kirk to the sale, it was therefore not going too far to say, that he would have relief in a Court of Equity, but there were not sufficient grounds shewn for the Court interfering in its summary jurisdiction, and they must therefore discharge the rule."

The editorial of the Australian, 24 October 1834, supported this decision, though it recognised the possibility of interference with supposedly settled titles.  The benefit of the decision was that it protected mortgagors against sheriff's sales at undervalue.

Published by the Division of Law, Macquarie University