Flagg v. Mann

Putnam J. delivered the opinion of the Court. The first inquiry to be made is, whether the complainant and respondents were tenants in common or joint tenants, within the meaning of the statute of 1823, c. 140, § 2, an act for giving further remedies in equity. It provides that this Court “ may hear and determine in equity all disputes between copartners, or joint tenants and tenants in common, and their legal representatives, in cases where there is no adequate remedy at law, and may thereupon compel such discoveries and disclosures, and make such orders, injunctions and decrees, as equity in such cases shall seem to require.” — 476 — The complainant contends that he and Mann became tenants in common in virtue of the deed of Luther Richardson, dated May 13, 1831, and of an assignment of the same date to them ; by the former of which Luther R. remised, released and for ever quitclaimed the estate in dispute to Flagg and Mann, and by the latter, (which was written on the back of the bond of Walker and Fisher to Luther R.) he “ granted, assigned, released and conveyed to them the premises within conveyed to him in mortgage and all his right, title, interest and estate in and to the same.” The respondents contend that the parties did not become tenants in common in virtue of those instruments. From the views we have taken of this cause, it will not be necessary for us to _determine whether the deed of quitclaim was delivered absolutely or not, or whether the negotiation was abandoned or not. Let it be supposed that the deed was delivered, and that the bond was delivered at the same time absolutely, and that the negotiation was not abandoned. We then proceed to inquire, whether Luther Richardson then (viz. on the 13th of May, 1831) had any right or interest in the real estate described in the bill, which could pass to the grantees, Flagg and Mann, whereof they could be joint tenants or tenants in common. It is certain that Luther Richardson had no right as the original mortgager, for that right vested in Prentiss Richardson by the deed of Luther on the 14th of May, 1825. That deed was-made after Luther’s right in equity had been attached, which right was taken and sold by the officer for the attaching creditor, and by assignment came regularly to Bennett. So Luther’s legal as well as equitable title was gone completely. The legal title was then in the mortgagees. Bennett, the assignee of .the right in equity, had the right to redeem the mortgages, and Prentiss Richardson had a right to redeem the right in equity that Bennett held. The lease for five years for a nominal rent, had then expired by its c.wn limitation, seven days before Luther made his deed to Flagg and Mann. All right and interest was gone from Luther completely, unless the verbal agreement set forth by the plaintiff, between Luther and Prentiss, preserved any right for Luther — 477 — But we think it perfectly clear, that such verbal agreement was within the statute of frauds. The deed to Prentiss was absolute in its terms. No parol evidence is admissible, to show that it was upon a mortgage or in trust for the grantor. If it were voidable by the creditors of Luther on the ground of fraud, they have not avoided it, and it was good betw the original parties. A short time before the expiration of tn~. ir within which there was a right to redeem the right in equity which Bennett held, Luther made application to Walker and Fisher for assistance. It appears that Prentiss Richardson was willing to make any conveyance which Luther should desire. The negotiation between Luther and Walker and Fisher, concerning the mortgage or sale (whichever it may be) then took place. There is no evidence that Walker and Fisher had any knowledge of any parol trust existing between Prentiss and Luther in regard to that deed, if any ever did exist. At that time, viz. May 13, 1831, Prentiss Richardson, and he only, had the right to extinguish the claim of Bennett; which would enable him to redeem the outstanding mortgages. When Luther Richardson and Walker and Fisher had agreed upon the sale or the mortgage, (which ever it may be,) Prentiss conveyed to Walker and Fisher all his right, and Luther and his wife joined in the deed. It appears from the testimony of Fisher, that the object which Walker and Fisher had in having Luther join in the deed, was, that the wife of Luther should release her right of dower in the estate. The deed of Prentiss and Luther to Walker and Fisher, dated May 6, 1826, gave to the latter a right to redeem the right in equity from Bennett, and the right to redeem against the mortgagees. And they gave the bond to Luther on the same day. So the question is narrowed to the consideration of the right which Luther acquired under and in virtue of the bond. The bond recites the deed, and provides for a reconveyance to Luther, his heirs and assigns, whenever at any time within five years he or they should pay Walker and Fisher such sums as Walker and Fisher should legally pay in discharge of the incumbrances, with such other sums as they should expend n improvements and betterments. If that transaction constituted a mortgage, then Luther, on — 478 — May 13, 1831, had a right in equity of which his grantee», Flagg and Mann, became tenants in common by his deed to them of that date. If it was not a mortgage, but a sale, with a contract on the part of the grantees for a conditional repurchase by Luther, then Luther, on May 13, 1831, when he conveyed to Flagg and Mann, had no right at all, as he did not within the term of five years pay the money to Walker and Fisher, which they had paid and laid out for the incumbrances and betterments. It is very well settled, that, if this is to be taken as a security for a loan, no agreement of the parties could impair the right of redeeming, which is incidental to, mortgages. The authorities are too clear to that point, to require particular citation. The plaintiff sets it forth as a mortgage ; the defendants deny it; and we must go to the evidence to ascertain the truth. According to the testimony of Luther Richardson, he proposed that Walker and Fisher should lend the money, and take the estate as security, but they declined. According to Fisher’s deposition, they refused to lend the money, but proposed to Luther to purchase his estate outright, and to give a bond to reconvey upon terms ; and it was expressly agreed, that it should not be or operate as a mortgage. Walker swears that he and Fisher refused to let Luther have the money at any rate upon a mortgage, and unless they could buy the estate of him outright. It was then incumbered to nearly or quite the full value, and the only consideration which Luther received for the conveyance to Walker and Fisher, was the right of redeeming or repurchasing the estate within five years. There was no collateral undertaking on the part of Luther to pay the money which Walker and Fisher should advance, in the five years ; so there was no mutuality. And this fact, though not conclusive, is to be taken into consideration in ascertaining whether the transaction was a mortgage, or a sale with a contract for a repurchase upon strict terms. Goodman v. Grierson, 2 Ball & Beat. 279; Conway's Executors v. Alexander, 7 Cranch, 237. It is a fact deserving of much alten tion. and affects the equitable rights and claims. For if, on — 479 — the one hand, in case the estate should depreciate in value, Walker and Fisher must have borne the loss, they having no contract from Luther for the repayment of the money ; it would seem equitable and just on the other, = that they should have the benefit of any subsequent advance of the estate in value, if the money were not paid within the stipulated period. It was a contract very favorable to Luther. If within the five years he could obtain a dollar more than the money advanced in discharge of the incumbrances and expended in the improvements, by Walker and Fisher, with lawful interest, he might secure it for his own benefit; if the estate should fall in value, they had no remedy. And there is no room from the evidence, to impute any oppression or undue advantage on the part of Walker and Fisher. On the contrary, the parties to the bond, as it appears to us, treated with each other fairly and with a full understanding of their rights. ° It was contended however, that assumpsit might be main tained by Fisher and Walker for the money advanced. But that right would depe'nd upon the question, whether there was a loan. If there were a loan and a mortgage, the debt would be implied ; but there would be no such implication, if there were no loan and no mortgage. To return to the question, was this transaction a conveyance with a defeasance constituting a mortgage. Lord Coke (Co. Lit. 236) says, that defeasance comes from “ defaire, i. e. to defeat or undo, infectum reddere quod factum esi.” Where it relates to lands, it must be executed at the same time with the conveyance ; because the conveyance is an executed, not an executory contract. It is to be considered as if it were annexed to or inserted in the same deed, and contains the condition upon the performance of which the estate then created may be defeated. So it must be between the same parties. 2 Bl. Com. 327; Shep Touch. 397; Fowell v. Forrest, 2 Saund. 48; Com. Dig. Defeasance, B 2, C. It is to be ascertained by the principles of the common law. Kelleran v. Brown, 4 Mass. R. 445. It must be of as high a nature as the thing o be defeated. If this bond to Luther is tested by these rules, it will he — 480 — difficult to maintain that it can be considered as a defeasance to the deed of Luther and Prentiss. Assuming that it was sealed and delivered at the same time, it is not between the same parties. And we have not found any case where the bond to one should be construed as defeating the deed made by two. If it operated as a defeasance, it would have revested the estate in both the grantors ; which would be directly contrary to the intent declared in the bond. There is no difference in regard to the effect, where the defeasance provides that upon the payment of money or the performing of the condition therein set forth the deed shall be void, or that the estate shall be conveyed to the grantors. The form of conveyancing is in both ways, but the uniform effect in each would be to revest the estate in the grantors. But upon the whole evidence we are clearly of opinion that this was a sale with a right to repurchase upon condition, and not a mortgage to secure a loan. There was no loan. As has been said, Walker and Fisher refused to lend. If this re fusal were colorable and a mere contrivance to defeat the redeemable qualities of a mortgage, it should be disregarded, as a fraud upon the law. But the facts proved in the case leave no doubt in the mind of the Court, that these parties concluded their bargain upon an outright sale, and not upon a mortgage. The pecuniary circumstances of Luther Richardson were bad. Walker and Fisher had no regard to his personal responsibility. They regarded the value of the estate merely, and took it subjected to the right granted to Luther to regain it upon strict terms. And such a contract is known and regarded in law, and is as much to be enforced by legal process, as is a mortgage, or any other contract or agreement. A decision to the contrary, would essentially, unnecessarily and unjustly fetter and impair the right to manage and dispose of property, according to the wants and interests of the owners. “ To deny (says Chief Justice Marshall for the whole court, Conway's Executors v. Alexander, 7 Cranch, 236) the power of two individuals, capable of acting for themselves, to make a contract, for the purchase and sale of lands defeasible by payment of money at a future day, or in other words, to make a sale with — 481 — a reservation to the vendor of a right to repurchase-the same lana at a fixed price at a specified time, would be to transfer to the court of chancery, in a considerable degree, the guardianship of adults as well as of infants.” “ A conditional sale, if really intended, is valid. The inquiry in every case must be, whether the contract in the specified case is a security for the re-payment of money, or oan actual sale.” 1. Powell on Mortg. (Rand’s ed.) 137 a, .and note 1. The bond contains no acknowledgment of any preexisting debt. It was not between the same persons who were parties to the deed. There was no remedy against the person for the money that should be advanced. On the contrary, the refusal to lend on a mortgage, and the agreement to make a purchase from Luther and Prentiss, with a right in Luther to repurchase upon specified terms, within a fixed time, are, we think, clearly proved. Those terms were not fulfilled within the time, and thenceforth Luther ceased to have any estate, legal or equitab'e. 2 Hovend. on Frauds, 181, 182. It is contended, however, that Flagg and Mann, by accepting the deed of Luther Richardson, admitted that they became tenants in common, and that this estoppel is binding upon Mann and the other defendants who claim under him. The reason which governs estoppels- is, that after a man has, by his own deed or act in pais, admitted a fact to be true, he shall not be permitted to contradict it. This is a necessary rule, which is constantly enforced in the cours.e of judicial inquiries. It applies as well to the law, as to the facts which are to be ascertained. Matters which have been alleged or admitted by a party to be true, shall not be by him disproved. The material inquiry now is, whether Flagg and Mann were joint tenants or tenants in common in this real estate. Has the defendant, Mann, admitted the fact, by accepting the deed from Luther Richardson ? The deed is a release and quitclaim, in common form, of all the right, title and interest of the grantor. It does not affirm that he had any. How then can the grantees be supposed conclusively to admit that he had ? The estoppel ought to be certain to every intent, and it should not be alleged by way of inference or argument. If the admission should be coextensive with the grant, it — 482 — would be"but conditional, viz. that if the grantor had any right or interest, which passed by his deed, it vested in the grantors as tenants in common. In other words, they would be bound by the legal effect and operation of the deed. To carry the doctrine of estoppel farther, would be to assume, without evidence, that the party has admitted the controverted facts. Shep. Touch. 53 ; Co. .Lit. 363 6, § 693. Thus if a man be disseised, and having a. right of entry, takes back an estate from the disseisor, by deed poll, it is a remitter to the disseisee. He shall be m under his elder and better title,, He shall not be estopped from showing and maintaining his elder title, by reason of his having accepted an estate by deed poll from the disseisor. Again, it is consistent with the deed, to plead and prove that nothing passed by it, or that the grantor was not seised at the time. Com. Dig. Estoppel, E 3, citing 1 Roll. Abr. ■862, l 35. If a deed of feoffment be enrolled in a court of .record, the party may say that nothing passed by the deed. It is a very common thing for one, in order to avoid litigation, to purchase or extinguish claims to land which the grantee might not think to be valid, and which the grantors would not warrant; and deeds of release and quitclaim of all the right &c. are used by the parties. It would seem to be unjust and contrary to the intent of the grantees, to affect their rights, by their acceptance of such deeds, beyond the rights and interests which should actually pass by the same. We are therefore of opinion, that the defendant Mann, and the other defendants (who all claim under him), are not es-topped by the acceptance of the deed from Luther, to show that he had no interest in the estate at the time when the release and quitclaim was made. And it appears too, clearly, that he had not any right or in terest in or to the estate, for the reasons before stated. Our jurisdiction in relation to this suit is to be regulated by the statute of 1824 before cited. The disputes must be be tween copartners, joint tenants or tenants in common. It is not sufficient that the parties intended to become so. They must be so in fact. We think it very clear that Flagg and Mann intended to.become tenants in common of the land, and — 483 — f we were at liberty to proceed according to the intention, and were not limited by the fact, we should go on and decide the case according to such equitable rules as govern courts having general equity jurisdiction. But we know with what caution the legislature have granted the equity jurisdiction, and have repeatedly said that we shall not assume by construction, any power which does not necessarily arise from the grant. It is not necessary for us to consider what a court having a general jurisdiction in equity would do in the premises. Wherefore, as the plaintiff has failed to prove that he and Mann were interested as tenants in common or as joint tenants in the land, or in any right or title or interest in the same, our opinion is that we have no jurisdiction of the matters of complaint set forth in the bill. ,The Court therefore order and decree that it shall be dismissed ; but under the circumstances we are of opinion that no costs shall be taxed for either party.