Beddow v. Dewitt

The opinion of the court was delivered, by Strong, J. The argument of the plaintiff in error assumes that the plaintiff below is asking to be subrogated to the place of Samuel R. Wood as a mortgagee. This is a misapprehension of the case. The question is not whether Dewitt is entitled to a cession of Beddow’s mortgage to Wood, nor even whether he may claim to stand in the shoes of the Boudmans, the other mortgagees. The plaintiff demands contribution, not subrogation. The two Boudman mortgages were liens upon a tract of land of which the plaintiff owned a part, and the defendant the remainder. Primd facie, therefore, when they were paid out of that portion of the land which belonged to Dewitt, he became entitled to contribution from the owner of the unsold part. The fundamental question then is, whether there is anything in the case that destroys this apparent right ? Both Dewitt and Beddow are grantees of Samuel R. Wood, and before the conveyances to them the Boudman mortgages had been created, and were liens upon the property conveyed. The deed to Beddow was first made, though the case stated leaves us in doubt whether it was first delivered. Conceding, for the sake of the argument, that it was, what was the effect of the prior delivery ? Undoubtedly it is a principle of equity, where there have been successive conveyances of land encumbered by a common lien, that the lands are chargeable in the hands of the grantees in the inverse order of the conveyances. The right to enforce this order of payment is, however, an equity, belonging not to the grantor, but the earlier grantee exclusively, and he can use it only to protect himself, not to protect his grantor against either a creditor or a subsequent grantee. The equity grows out of the fact that he has paid the purchase-money, and [331] tlie consequent obligation of tbe grantor, or whomsoever may have assumed the place of the grantor to protect him in the enjoyment of the land for which he has paid. If the earlier grantee has not paid the purchase-money, he has acquired no such equity. To the extent to which that remains unpaid, he is liable to contribute to the discharge of the paramount lien, for the purchase-money which remains unpaid in his hands is not his, but the grantor’s. When he is called upon by one who has a legal right, for no more than the sum which is due from him, lie is not injured, and he has no ease for equitable interference in his behalf. A chancellor looks to the consideration of the purchase more than to the form of the title. In equity he is the owner who has paid the purchase-money. Had Beddow asked for an injunction against collecting the Boudman mortgages from the land which Wood conveyed to him, until that sold to D*ewitt should be exhausted, he would have been required to do equity by paying his unpaid purchase-money in discharge of the paramount mortgages. That would have been essential to perfect his equity. Were it not so, this equity, which exists only for the protection of the first grantee, would be a weapon of offence in the hands of the grantor. There is nothing in this which conflicts with the doctrine of Ebenhart’s Appeal, 8 W. & S. 328, or Lloyd v. Galbraith, 8 Casey 203. Those were cases of subrogation in which junior creditors attempted to use the securities of their debtor. This is a case of contribution, in which the plaintiff asserts no claim to the Wood mortgage. Thus far, then, nothing appears to relieve Beddow as owner of a part of the land bound by the Boudman mortgages, from contributing to the payment of them, so far as ho has unpaid purchase-money in his hands. And as Dewitt has been compelled to pay them in full, out of that part of the land which was conveyed to him, and has- thus relieved the lands of Beddow, he has a right of action for compensation. Failing to establish any equity in himself to resist the claim of the plaintiff, the defendant next interposes some supposed rights of Wood, the common grantor, and argues that Dewitt is precluded from demanding contribution by his bargain with Wood, and by his express contracts. The case stated finds that on the 10th of October 1857, Samuel R. Wood sold and conveyed to Dewitt and Samuel G. Wheeler (who subsequently transferred his interest to Dewitt), several tracts of land in Northumland and Montour counties, and among them a part of the tract which had previously been encumbered by the Boudman mortgages ; that the purchase-money was secured by three mortgages given by Dewitt and Wheeler, one for $50,000, protecting fifty promissory notes, each for $1000, payable in twelve, eighteen, and twenty-four months; a second for $20,000, payable on the [332] 10th of October 1862, with interest, payable yearly, and a third for $100,000, payable on the 10th of October 1867, with interest, payable yearly. At the time when this sale was made, and these mortgages were taken, there were other liens on the lands sold, to a very large amount, beside the two Boudman mortgages. These liens consisted of mortgages given by Wood the grantor, and of judgments obtained against him. Of the notes protected by the $50,000 mortgage, thirty-two were paid by Dewitt. In whose hands the remaining eighteen are, does not appear. On the 24th of March 1860, when the tract conveyed to Dewitt and bound by the Boudman mortgages, in common with that conveyed to Beddow, was sold to satisfy those mortgages, there was nothing in the hands of Dewitt with which to pay them, that he was bound thus to apply. Neither the $20,000 mortgage nor that for $100,000 was then due, and, what is more, nearly the whole of the property which Wood had conveyed to Dewitt and Wheeler, and which was the consideration of the mortgages, had been sold away from them under judgments obtained against Wood, and mortgages given by Wood to' Stephen Caldwell, in the years 1845, 1846, and 1847. These paramount judgments and mortgages amounted to more than $120,000 on the 24th of March 1860, the time when payment of the Boudman mortgages was enforced. Plow, then, could Wood the grantor insist that Dewitt alone should pay those mortgages ? And even if Beddow could appropriate Wood’s rights to himself, where are there any such rights as will exempt the land sold to him from liability to contribution? We are not shown, and unless they spring out of an agreement to which we shall presently refer, we are unable to discover any. The debts due to the Boudmans were not Dewitt’s debts, and he w7as, at the time when payment was demanded, under no exclusive obligation to pay them. . It is insisted, however, that he had expressly contracted with Wood to pay those debts, and had thus made them his own. Hence, it is inferred that there was no right to call upon, Beddow for contribution toward their payment. On the 10th of October 1857, the day when Wood made his deeds to Dewitt and Wheeler, and when the mortgages for $20,000 and $100,000 were taken, payable in 1862 and 1867, an agreement was made between the parties that Dewitt and Wheeler should pay the Greorge Boudman mortgage, a dower to the widow of Isaac Boudman, and whatever might be recovered upon a mortgage said to have been given to Caldwell for $50,000, but which Wood alleged to have been fully paid and satisfied, and that he should defalk his payment from his $100,000 mortgage, and from no other. This was in effect an agreement to anticipate partially the time stipulated for the payment of the large mortgage. Without pausing to inquire whether this was an engagement to pay more than one [333] of the Boudman mortgages, it is too plain to be denied that Dewitt was not bound to comply with its terms. The consideration for his promise failed. That was, that he should hold the lands conveyed, encumbered only by the George Boudman mortgage, the dower, and a sum not exceeding $50,000, secured by the mortgage to Caldwell, which his grantor at the time declared had been fully paid and satisfied. But there were judgments against Wood not mentioned in the agreement, and which Dewitt did not agree to pay. They amounted to much more than both the Boudman mortgages, and they were presently payable. The. existence of these was a sufficient defence against his assumption to pay the mortgages. Instead also of one Caldwell mortgage for $50,000, as the grantor represented, and which he asserted to have been paid, there were in fact three, amounting, with interest, to nearly $100,000, the whole of which was demanded by the mortgagee, before the Boudmans insisted on payment. In the face of such a state of facts it is vain to contend that Wood could have enforced the payment of the Boudman claims (if at any time) before the 10th of October 1867, when the large mortgage will become payable. There is, therefore, nothing in the relation which Dewitt sustained to Wood, or in their written contract, which stands in the way of holding Beddow’s land liable to contribution. And Moore, to whom Samuel R. Wood assigned the mortgage given to him by Beddow, can have no greater rights against Dewitt than his assignor had. He took the mortgage, with all its imperfections on its head, among which was the right of Beddow to defend against it until the Boiidman claims were satisfied. He took it subordinate to those claims, as his assignor had held it. Certainly he cannot enforce its payment if Wood could not. It may be doubted whether the assignment was not void as against Dewitt. In a most legitimate sense Dewitt was a creditor of Wood, and not the less because he had undertaken to p'ay money at a future day. He had a right to insist that Wood should protect the lands purchased from all liens superior to the conveyance, and especially from all mortgages and judgments created or suffered by Wood before the title was made. Against a creditor an assignment in trust for the benefit of creditors, and unrecorded, as this was, is void. This was an assignment expressly in trust. The trust was to pay debts of the assignor, which, as described in the instrument, were not due to the assignee, and it was stipulated that the surplus should be returned to the assignor. Even if the assignment was not void, in default of having been recorded, it was a transfer only as a collateral security. The accompanying receipt of the assignee proves this, and shows that, notwithstanding the presumption which without it would arise from the use of a seal, he is not a holder for a valuable consideration. This, however, is of little [334] importance. The plaintiff, in this case, is not contesting the ownership of the Beddow mortgage. He is claiming contribution towards the payment of claims which were liens paramount to that mortgage. To that claim Beddow, as we have seen, has no defence, and neither Wood nor Wood’s assignee is in a situation to interfere. The judgment is affirmed.