Mansfield v. Dyer

W. Allen, J. The levy upon the first parcel of land demanded in the writ was by a sale of the equity of redemption. If the land was not subject to the mortgage, the sale was void. The only authority for levying by a sale, if there was no — 377 — mortgage upon the estate, was by the St. of 1874, c. 188, and that does not authorize an estate free from mortgage to be levied upon and sold as an equity of redemption. Haekett v. Buck, 128 Mass. 369. The validity of the levy upon that parcel depends then, in the first place, upon whether there was a mortgage upon it at the time of the levy. That parcel was conveyed by Mansfield, the judgment debtor, to Potter, and by Potter to the tenant; the demandant offered to prove that both conveyances were in fraud of Mansfield’s creditors. At the time of the conveyance to Potter, there was a mortgage upon the land, but it does not appear that it was put upon it by Mansfield, or that he was under any personal obligation to pay the debt, and it does not appear that Potter assumed the debt. The mortgage was paid by Potter, and was discharged on the record before his conveyance to the tenant. The attachment and the levy of the execution by a creditor of Mansfield were both after the conveyance to the tenant, who took the same right that Potter had, and no greater. Before the payment and discharge of the mortgage, the interest in Potter’s hands, liable to attachment by creditors of Mansfield, was an equity of redemption; and the demandant contends that, as the payment was not made by Mansfield, or by any person under obligation to him to make it, it cannot enure to his benefit or that of his creditors, and that, to prevent that consequence, the transaction will be treated as an assignment, and not as a discharge, of the mortgage. It may be that, if there had been an assignment of the mortgage in form, or if the parties had intended that it should have been assigned and kept alive, these considerations would have prevented a merger of the two estates in Potter, and the mortgage would have been kept alive. Tucker v. Crowley, 127 Mass. 400, and cases cited. But there was no assignment in form, and the parties did not intend that the mortgage should be kept alive, but intended that it should be discharged. In Crosby v. Taylor, 15 Gray, 64, the fraudulent grantee of a mortgagor put in evidence a quitclaim deed to him from the mortgagee of all his right, title and interest in the premises, which contained also these words after the descriptive part: “ which said mortgage is hereby cancelled and discharged, the — 378 — said Adams [the mortgagor] having recently conveyed his interest in said premises to said Taylor.” It was held that this was an assignment of the mortgage, and that there was no merger. Chief Justice Shaw said: “We are of opinion that this instrument was, under the circumstances, a good assignment. The words ‘ cancelled and discharged ’ are controlled by the statement that the grantee had recently acquired the equity of redemption. If the conveyance of the equity had been good, the mortgage assigned and the equity of redemption would have merged; but if the creditors interfere and take the equity, then there is no merger, and the equity and the mortgage are still distinct.” It will be observed that no evidence was offered as to when or by whom the debt was paid. In Eaton v. Simonds, 14 Pick. 98, it was agreed, between the purchaser of an equity of redemption sold on execution and the mortgagee, that the latter should assign the mortgage to the former. The purchaser paid the amount of the debt and asked for an assignment. The mortgagee said an assignment would be unnecessary, and discharged the mortgage upon the record. Afterwards the mortgagor died, and it was held that his widow, who had released her dower in the mortgage deed, was entitled to dower in the land. Mr. Justice Wilde said, “ The general principle is, that when the purchaser of a right to redeem takes an assignment, this shall or shall not operate as an extinguishment of the mortgage, according as the interest of the party taking the assignment may be, and according to the real intent of the parties.” “ In the present case, however, the doctrine of merger is not applicable, for the estate in the mortgage of William Eaton was never assigned to the defendant, and never vested in him; so that it could not unite with the equitable title in him, so as to operate as a merger. But this mortgage has been legally discharged, the debt has been paid, and can no longer be set up as a subsisting title, either at law or in equity.” In Wadsworth v. Williams, 100 Mass. 126, a mortgagor conveyed to the judgment debtor by a quitclaim deed with covenants against all persons claiming under her. The grantee mortgaged the land and afterwards reconveyed to the mortgagor by a warranty deed, excepting from the warranty the two mortgages. — 379 — Afterwards the assignee of the mortgages, having received payment of the mortgage debts, gave to the mortgagor a quitclaim deed of the land, with a special covenant of warranty against all persons claiming under him, and against the first mortgage. It was held that this deed took effect as a discharge, and not as an assignment, of the mortgages, for the reason that the mortgagor, by force of her covenant in her deed to the judgment debtor, was bound to extinguish the mortgages, and was under the same obligation to his judgment creditors. The reconveyance from him to the mortgagor was said to be a nullity as to the judgment creditor, and he was entitled to the benefit of the covenants contained in the deed to the debtor. In Perry v. Hayward, 12 Cush. 344, a mortgagor, by a deed fraudulent as to creditors, quitclaimed the mortgaged premises to the plaintiff, covenanting against all persons claiming under himself. The mortgagee subsequently, on payment of the mortgage debt by the plaintiff, released to him by deed of quitclaim all interest in the premises. Afterwards the premises were seized and sold, as an equity of redemption, on an execution against the mortgagor. It was held that the levy was-void, because the estate was not mortgaged, and the land should, have been set off; that, by the payment and release, the estate of the mortgagor was made absolute either in the mortgagor or the plaintiff. Chief Justice Shaw (apparently assuming that the attachment was prior to the discharge of the mortgage, which is immaterial) said, “ It appears that whatever interest Nathan Perry [the mortgagor] had in the estate, or whatever his creditors had at the time of the attachment, in consequence of any conveyance of his, fraudulent as against them, the mortgage had been paid and discharged, and the estate had become absolute either in Nathan or William Perry [the plaintiff] before the execution was levied, so that whatever right the execution creditor had, to make that estate available to the payment of Nathan Perry’s debt to him, was a right to levy on it specifically, not to sell the supposed equity of redemption.” It will be observed that this case differs from Wadsworth v. Williams, last cited, and resembles the case at bar in that the fraudulent grantee was under no covenant or obligation to pay the debt. — 380 — • In the ease at bar, the mortgage was paid by a person having an interest to pay it, and the mortgage was discharged. This was all that was intended by the parties. The mortgagee did not intend to assign the mortgage. The instrument which he executed was not an instrument of assignment; it was not a deed. It was an acknowledgment of satisfaction of the mortgage, which, by the provision of the statute, had the same effect as a deed of release. Gen. Sts. c. 89, § 30. A release of the mortgage must operate to enlarge the estate of the mortgagor by adding the legal estate to the equitable interest. As the conveyance from Mansfield to Potter was void as to the demandant in this action, as to him the estate of the mortgagor remained in Mansfield, and he was the owner of the equity of redemption when, by the effect of the satisfaction of the mortgage and the' acknowledgment of it upon the record, the mortgage deed became void, and the equitable changed into a legal estate. This is not a proceeding in equity to reform the instrument or to compel a new one. There was no mortgage upon the land at the time of the levy of the demandant’s execution, and the levy, being by a sale of an equity of redemption, was void. As to the second parcel of land demanded, the Pond lot, we think that the objections to the levy cannot be sustained. We construe the officer’s return to mean, though the meaning is not clear, that it was sold as an equity of redemption, and that the notices required by law were given. The principal objection to the levy is, that the mortgage covered other land than that levied on and sold. Mansfield mortgaged a parcel of land. He conveyed part of it, subject to the mortgage, to Safford, and the remaining part, also subject to the mortgage, to Potter, who conveyed to the tenant. The levy was upon the part sold to Potter. The purchaser takes whatever right Mansfield had to redeem it. The demandant and Mansfield, whom he represents, cannot complain, if the right to redeem a part of the mortgaged premises, by paying the whole mortgage, was sold, because Mansfield’s act in dividing the property rendered it necessary. To hold otherwise would enable a mortgagor, by selling to a bona fide purchaser a portion of mortgaged premises, to put the rest beyond the reach of his creditors. Mansfield, by his own act, held the right - to redeem the — 381 — land levied upon, by paying the whole debt, and that was the only right which could be sold on the execution. Webster v. Foster, 15 Gray, 31. Whether Mansfield or the purchaser at the execution sale could have any right of contribution, upon paying the debt, against the owner of the equity in the other parcel of the Pond lot, it is not necessary to consider. It is immaterial whether the attachment was void or not. The condition of the property was not changed between the time of the attachment and levy. The result is, that the verdict for the tenant upon the first count is to stand, and the verdict upon the second count is to be set aside, and A new trial had.