Coutant v. Servoss

By the Court, Strong, P. J, There is nothing to show that the late John Pintard was a general trustee for his infant grandchildren, who are defendants in this cause. The presumption is that the trust was created by the deeds from Charles Smith and wife, which define its nature and extent. Those deeds purported to convey the lands in fee to Pintard, in trust for his different grandchildren, and to confer upon him full power and authority to grant, bargain, sell and convey the same, and to make and execute the necessary conveyances, for their benefit. The defendants’ counsel contend that these terms did not confer a power to execute a mortgage. That is true; and if the mortgage had been an insulated transaction, it would have been invalid. It has been held by some judges that a power to sell includes a power to mortgage. (3 P. Will. 9. 2 Wend. Rep. 492.) But that does not comport with the meaning of the terms; whether taken literally or according to their legal interpretation. It has been supposed that a power to sell confers a power to mortgage, on the ground that the greater includes the less. That must be taken with this qualification, however, that the less must be of the same character with the greater, and essential to its execution. Were it otherwise, the power to sell might authorize the donee to make any [141] less disposition of the land, such as granting leases, cutting down timber, or converting meadow into woodland. It has never, I believe, been contended that such dispositions would be authorized by the general power. A mortgage is now considered as a mere pledge or security for money. It is not a sale nor any part of it. It is not even a conditional sale; for that imports that the title would vest on the happening of the conditions. That is not so in the case of a mortgage; there no title vests until a subsequent sale is actually made. The distinction between the two runs through a large class of cases, and is well settled. They are cited in the very able opinions in manuscript, of Judges Betts and Emott, in the case of Land v. Wickham, and the elaborate argument of the counsel for the complainant in that cause. The case in 2 Wend, was overruled by the decision of the late supreme court in Bloomer v. Waldron, (3 Hill’s Rep. 361;) where the late Judge Cowen discusses the subject much at large, and with his usual ability. He cites 1 Sudg. on Powers, 538; 1 Pow. on Mort. 61, and 2 Chance on Powers, 388. These cases are explicit that the power to sell, when, as in this case, it is general and unqualified, does not include the right to mortgage, and this is in accordance with the well known rule that powers should be construed strictly. It. is not stated expressly in the bill, nor proved by the testimony, that the deed and mortgage were executed simultaneously, and were but one transaction. But as the mortgage was confessedly given for the unpaid part of the purchase money, and as it is usual in such cases that the execution of the security immediately follows that of the deed, it is fair to presume that all the papers were executed together. Indeed that fact is conceded by one of the counsel for the defendants, in his points submitted to the court. The rule in such cases is that the whole is considered as one transaction. (Stow v. Tifft, 15 John. Rep. 458. Jackson v. Austin, Id. 477. Van Horne v. Crain, 1 Paige, 455.) Taking the whole together, the vendee acquires only the equity of redemption. He must take that, if the transaction amounts to any thing. It was so decided by [142] Chancellor Walworth in Lynde v. Budd, (2 Paige, 191.) There the purchaser, who gave a mortgage for the purchase money when he took the deed, was an infant, and of course could not execute a valid mortgage per se. The chancellor decided that the infant could not avoid one part and affirm the other. If the same rule is applied to this case, and there is every reason why it should be, the vendees cannot, nor can any one for them, take the land and repudiate the mortgage. They either hold the land subject to the mortgage, or they dp not hold it at all. In neither case can they object to the sale for which the plaintiffs ask. The trustee has not, therefore, either sold or incumbered any estate which he acquired for the cestuis que trust. If a sale should be made under the mortgage, that will be in consequence of a defect inherent in the title which they acquired. As much so as if the land, when purchased, had been subject to a prior mortgage. There is nothing to show that the trustee had not the power to purchase an incumbered estate, or to qualify it in securing the purchase money. On the contrary, the presumption arising from the whole trans? action is that he had such power. It follows from the principles that I have laid down, that the mortgage acquires validity solely from the consideration that it was a part of the same transaction with the conveyances. It is a necessary consequence that although it is a joint instrument including the lands conveyed in two separate deeds tq the two grandsons and the two granddaughters respectively, yet it is effectual, and must operate against them separately, The lands purchased for the granddaughters are bound for the unpaid part of their purchase money only. The same is true in reference to the lands acquired for the use of the grandsons. There is nothing in the writings, or in the evidence, to show that it was agreed, as a part of the same transaction, that they were to be mutually security for each other. Nor is there any equitable consideration which should carry it thus far. The lands conveyed to "Pintard as trustee for his grandsons, which have not been released, are bound for that part of the purchase money for them which still remains unpaid, notwith [143] standing the deed for the residue in fee to Nathaniel Kimball. It is unnecessary, and would not be proper, to pass upon the question raised as to the validity of that deed, as Kimball is not a party, and the plaintiffs do not ask for a sale of the lots conveyed to him. A release of a part of the mortgaged premises does not in any manner affect the lien upon the residue, as between the original parties. So far as it relates to them, every part of the mortgaged premises is bound for the payment of the whole debt. There may be different equities between subsequent purchasers or incumbrancers, which may qualify the right of the mortgagee, or his assigns, to release a part of the premises, and retain the remainder as security for all the unpaid money, but it is sufficient to say that such equities cannot be claimed here. The engagement to pay an additional rate of interest was obligatory upon Pintard alone. He had no authority, from any thing appearing in this case, to bind the cestuis que trust to do that by any arrangement made subsequent to the purchase. Although the main position taken by the assistant vice chancellor, that the interest acquired in the lands by the purchasers vested in the infants, may have been correct, and we think it was, yet as that was only the equity of redemption, and the mortgage was therefore valid, we think he erred in dismissing the bill. A decree must be entered declaring that the lands conveyed by the deed to Pintard, as trustee for the granddaughters, are bound for that part of the purchase money for those lands which still remains unpaid, with interest at the rate of six per cent.; and that such of the lots conveyed in the deed to Pintard as trustee for his grandsons, as have not been released to Rogers, are bound for the unpaid part of the purchase money for all the lands thus conveyed for the use of the grandsons, with interest at the same rate, and directing that such lands be sold in satisfaction of the amounts secured upon them respectively, still remaining due, and the complainants’ costs in this suit to be borne by each purchaser equally. And it must be referred to some suitable person to ascertain and report the amounts due upon the respective purchases.