Nugent v. Riley

Shaw, C. J. The first and principal question in this case is, whether the construction of the lease in question was correct. The judge instructed the jury, that the lease described in the case constituted an interest of term defeasible on a condition, and therefore had the character of a mortgage. The instrument purports to be an indenture, but was executed by the lessor only. It is a common lease of tenements for seven and a half years, acknowledged and recorded. It recites that the lessee has paid $ 78-64 in full for the rent for the whole term. Then comes this clause. “ And the lessee covenants, promises, and agrees to reconvey said premises to the lessor,- upon the payment of the aforesaid sum and interest thereon.” It has often been held, that where,- upon a conveyance of an estate or interest ‘n land, there is a stipulation in the deed itself or in any separate deed executed at the same time, and constituting with . the conveyance one transaction, that the estate shall be reconveyed, upon the payment of money, such stipulation constitutes a defeasance, as much as if the words were “on condition,” or “ provided however,” &c. Taylor v. Weld, 5 Mass. 109. Carey v. Rawson, 8 Mass. 159. Scott v. McFarland, 13 Mass. 310. This rule is most frequently applied to the case of con [120] reyances in fee, but .a conveyance for life or years falls within the same principle. Being then a conveyance for a term of years, defeasible upon a condition, the relation of the parties is that of mortgagor and mortgagee. In túe present case there is no covenant, technically, on the part of the lessee, to reconvey upon condition, because he has not executed the instrument; but being inserted in the same conveyance which raises the term and leases the estate, it enures by way of condition ; and the lessee, by accepting the deed, in the form of an indenture, but in effect a deed poll, becomes bound by the condition. The parties then standing in the relation of mortgagor and mortgagee, all the rights and duties incident to that relation attach to them. The mortgagee, being in possession and taking the rents and profits, must upon redemption account for them, as payment, first to keep down the interest, and the surplus, if any, towards the principal. Newall v. Wright, 3 Mass. 138. Another important consequence is, that in this case, if the $78-64 is paid at any time during the term, the condition is saved at law, the estate for years created by the lease is defeated, and the lessor is in of his old estate ; whereas, in the common case, if the money is not paid within the time, the condition is broken at law, the estate of the mortgagor is reduced to an equity of redemption, and he must have a bill to redeem, in order to restore him to his estate. The rents and profits, received by a mortgagee in possession, either before or after condition broken, are so exclusively appropriated by law, without any act of the parties, to the payment of the interest and principal of the debt, or sum to be paid, in order to defeat the estate, that when they amount to a sufficient sum to extinguish the debt, including such principal and interest, the debt is de facto paid. If this occurs before condition broken, the estate is defeated, and the mortgagor may enter. In the present case, it is found that the defendant had received, of the rents and profits of this estate, a sum much more than sufficient to pay the $78-64, and interest, together with repairs [121] and all costs, charges, and expenses of every kind;and this being before breach of condition,the lease was determined. Then comes the question, whether the plaintiff can recover the surplus, over and above the payment of his debt, in an action for money had and received. Had the defendant occupied the estate himself, it would have presented a question of more difficulty. But the case finds that he let out the estate to others, and received the rents. All that he received after his debt was paid, he could not receive as mortgagee, because his term then expired. He received it as money, to which the plaintiff, in good conscience, was entitled. He then received it to his use, and this action will lie for it. It was said that the remedy of the plaintiff should be sought for on the covenant of the lessee. Probably the counsel for the defendant did not advert to the fact, that the deed is not executed by the defendant, so that there is no covenant, technically, on his part. Perhaps the acceptance of a deed poll would create an express promise on the part of the grantee, to perform acts on his part stipulated in the deed to be performed. Goodwin v. Gilbert, 9 Mass. 510. When such promise results in nothing more than a duty to pay money, general indebitatus as sumpsit will lie. But there is another consideration applicable to this objection. There is no stipulation, on the part of the lessee, to account for the surplus rents, after the debt is paid, but only to reconvey the estate, when it is paid. If he received rents after his debt was paid, he received money which equitably belonged to the plaintiff, and the duty of paying it results and raises a promise impl'ed by law, to enforce which this is- the proper form of action. Judgment on the verdict.