Payne v. Hathaway

Hutchinson, Chancellor, pronounced the decree of the Court. —It appears in this case, that Messrs. Hitchcock and Allis had a large claim, of some sort, against Silas Hathaway, upon which they commenced their suit at law, and attached the lands of Silas Hathaway in Swanton, by virtue of their original writ; that these lands were encumbered by a mortgage from Silas Hathaway to one Simeon Hathaway, to secure him from his undertaking for said Silas to one Robinson for about the sum of two thousand dol227 %ars; that Hitchcock and Allis recovered a final judgement against Silas Hathaway in that suit, for a -sum exceeding thirty thousand dollars ; that they took out their execution, and levied it upon the lands thus attached, subject to this mortgage which yet remained unsatisfied 5 that Simeon Hathaway obtained a decree of foreclosure of the equity of redemption of his mortgage; that Silas Hathaway wholly neglected to pay the redemption money, and the same was paid by Hitchcock and Allis on the last day allowed by the decree for such payment; that Silas Hathaway also neglected to redeem these lands from the levy of said execution, which levy was to the amount, as appraised, of about twenty six thousand dollars. It further appears, that the present orator and sundry other persons, for whom he now claims, furnished to Hitchcock and Allis the money, with which they redeemed the lands in question from Simeon Hathaway’s mortgage; and, by the mutual understanding of those, who furnished this money, and said Hitchcock and Allis, the latter gave their note to the orator for the amount of the money, and also gave him a mortgage of the same lands to secure the payment oí this note. This made the orator trustee to his associates for their portions of the property. This presents to view whatever title the orator has to the lands in question, and all his equitable claim upon them, or any person holding them, for this money, and interest for the same. This would clearly be a good title as against Hitchcock and Allis. But neither they nor their representatives oppose any claim to the orator. The complaint in the bill is, that the present defendant has interfered, in an improper manner, to prejudice the orator 5 that he has obtained the title of said Silas Hathaway in these lands, ia the ways described in the bill, and has put tenants upon the same, and has defeated the orator in sundry actions of ejectment, brought by him for these lands. And there is no dispute, but that the title of the present defendant is good as against Silas Hathaway. But the orator complains that, as to him, and those in whose behalf he now contends, this title of the defendant is fraudulent and void. And the orator seeks relief as against this defendant, either by repayment of the money advanced to redeem the lands, or by a surrender of the lands themselveáí On a demurrer to this bill for want of equity, and for want of proper parties, several difficulties are urged in argument, that must be noticed with more or less ceremony. It is said if the orator has any claim, it is good at law. The bill answers this by anticipation, alleging that he has no remedy — 228 — at law; that he has brought his ejectments and failed to recover'* because the levy of the execution of Hitchcock and Allis was adjudged defective. There is no pretence of any privity of contract between these parties,by which the orator could recover the money thus paid in any action at law. The arguments of the defendant’s counsel are sufficiently conclusive, that the orator has no remedy at law* He has no title to the lands, but under the defective levy. He has no pretence of claim to the title of Simeon Hathaway^ That title was not assigned to any person ; but was rendered wholly void by the payment of the redemption money. The defendant’s counsel urge' that the orator had no such title, that a court of chancery would have let him in to redeem Sim-eon’s mortgage 5 hence also they infer that he has no equity of any sort which a court of chancery will notice. That a man, who has no title, cannot be let in to redeem, is a correct position. A mortgagee runs his chance, to get his money and interest, or, instead of it,the mortgaged premises. These may be worth much more than the money secured by the mortgage. No person has a right to deprive the mortgagee of his rights, and of his chance of getting the mortgaged premises in lieu of his debt, except the mortgagor, and such as have bis title, and claim under him. Yet the inference, drawn from this position, is not sure to follow. There might still be so strong an equity that some relief should be obtained from some quarter, even though there was no right to redeem against the will of the mortgagee. The great question in this case is, whether the orator has setup in his bill such grounds of equity, that the same ought to be enforced against the defendant. If Hitchcock and Allis would have had any equity, that is clearly transferred to the orator, so far as relates to the money raised to redeem Simeon Hathaway’s mortgage. The levy of Hitchcock and Allis being made subject to this mortgage, they could not hold the land without first paying off this mortgage; and, as they could not raise the money for this purpose, except by a loan, and the orator making that loan on a mortgage security of these lands, and, undoubtedly, supposing the title by I@vy good, the orator has as strong an equity as they could have had, if they had advanced their own money, which they before possessed. We will first examine how this equity would stand, as against Silas Hathaway,if he had never conveyed his title to the defendant, and had succeeded in defeating the levy of Hitchcock and Allis — 229 — for the defects, that have availed the present defendant. The case would then stand thus. Silas Hathaway owed the money upon Simeon Hathaway’s mortgage; and he alone ought to have paid it. He also owed the large debt to Hitchcock and Allis; and that, having passed into a final judgement oí a court of competent jurisdiction, must now be treated asa fair debt, which Silas Hathaway, and he alone, ought to pay. While Silas Hathaway neglected to pay these debts, or either of them, Hitchcock and Allis could not satisfy their execution without levying upon these incumbered lands, the very levying upon which, was virtually assuming the payment of the debt to Simeon Hathaway. They levied their execution, and paid this debt accordingly. Now, if Silas Hathaway had submitted to the title of Hitchcock and Allis, and let them hold these lands, in part payment of their debt, all would have appeared correct; for the lands being apparised as subject to the mortgage of Simeon Hathaway, Hitchcock and Allis ought to pay this debt. They had received pay in land for so doing, and may well be considered as paying it for themselves, and not for Silas Hathaway. As soon, however, as Silas Hathaway wages war with the levy of this execution and defeats it, and holds the land levied upon, free from all incumbrance, the scene is changed : the debt of Hitchcock and Allis ceases to be paid by the levy, and may be revived by scire facias ; but the payment of Simeon Hathaway’s mortgage ceases to be for the benefit of Hitchcock and Allis as it stood before. It now becomes a payment for the benefit of Silas Hathaway. Now, if there is any reason or justice in the law, which authorizes the recovering back money, which is paid by mistake, or in chancery proceedings to remunerate for losses by mere mistake, the same reason and justice concur, in requiring Silas Hathaway to refund this money, thus paid for his benefit, with interest for the same. Two objections, however, are urged, to a remedy in this case, which must not be passed without notice : 1st. that this was a voluntary payment ; and 2d. that Hitchcock, and Allis should be joined as orators. With regard to the first,we discover,in this,nothing of the character of a voluntary payment, in the legal sense of that term. Hitchcock and Allis were endeavouring to secure and collect a large debt. They levied their execution upon the only property they could find, to the amount of about twenty six thousand dollars, which was considerably less than their whole debt; and of this they could derive no benefit, without first paying Silas Hathaway’s debt to Simeon Hathaway. This they paid. — 230 — They could hardly be said to have any choice about it. They must either pay it, or relinquish all hope of saving their large debt. With regard to the necessity of joining .Hitchcock and Allis with the orator, the complaint discloses no fact which shows such necessity. While the object of the complaint is, to obtain the money which the orator advanced for himself and others to Hitchcock and Allis, to be paid away for the debt of said Silas Hathaway, the decree, if any, should be in favor of the orator alone. We do not discover the propriety of any decree in favor of Hitchcock and Allis concerning this money, sought by the bill, when all equitable right to it is shown to be in the orator alone, for himself and others who advanced the,money, to the entire exclusion of Hitchcock and Allis. They have no right to receive this money, nor do any act to prevent its going to the present orator. It is for the benefit of Hitchcock and Allis, that the orator should succeed, and collect this money, because, when he collects it, that operates to discharge the note and mortgage they gave the orator. But this interest is indirect and one for which they cannot prosecute. All their title to these lands passed to the orator by their mortgage deed, except their right of redeeming. That right cannot be affected by any decree, that can be made in this suit. If there remains a possibility of some future litigation between the orator and Hitchcock and Allis, that can never affect the present defendant, nor Silas Hathaway. They would be perfectly safe in paying this money,or surrendering these lands, to the present orator. The allegations in the bill of complaint exhibit sufficient equity in favor of the orator, suing as he has done, and against Silas Hathaway. We will now proceed to examine the case as between the orator and Shadrach Hathaway, the present defendant. Here again, an objection is raised to the form of the proceedings, because Silas Hathaway is not made a party defendant. If the Court should ever make a decree to affect the title of the lands, Silas need not be joined on this account; for all his remaining title long since passed to the defendant, Shadrach Hathaway. Two deeds were given, -one on the 12th of September, 1805, and the other November 21st, 18 L 0. If the decree should be for the payment of the money, according to the allegations of the bill, Shadrach Hathaway, and not, Silas, ought, as between them, to pay this money; because, it is charged in the bill, that the defendant fraudulently took said deeds from said Silas, and has always since had the benefit of the possession and rents and — 231 — profits of said lands: so that from that time, the defendant has stood in the place of Silas ; and the paying off the mortgage to Simeon Hathaway has, since the defendant obtained the title and possession of the lands, operated for the benefit of the defendant solely. - He, then has no claim that Silas be made a party; and the orator asks for no decree against him. This objection is overruled. The defendant’s counsel, in arguing this demurrer, have urged a presumptive bar from lapse of time &c. apparent upon the bill. This is not the usual mode of presenting such a defence. The case cited, by defendant’s counsel, from Brown's Chancery Reports, page 639, fails to show this admissible, in this way. It does not there appear, from the note of the case of Smith vs. Clay, how the question was raised. But, in the principal case of Doleraine vs. Brown, it is expressly decided, that such a question does not arise upon a demurrer to a bill. Where the defendant pleads a presumptive bar, it may be met with counter presumptions, or with rebutting testimony; and it would be too inconvenient to require the Orator, not only to set forth his own grounds of complaint, but also to insert such precautionary facts as he might, or might not, find necessary to avoid the defence, should such a defence be made. This objection cannot prevail. Nor could it prevail, upon the facts that appear, were it urged in a proper way. The orator has not slept upon his claim, as is urged; for he had no claim in this Court, while his remedy at law had not been decided against him ; at least, had he applied .to this Court in the first instance, he must have alleged his want of remedy at law, which would have been a warfare upon the legality of his title under the levy. He had a right to hope, that his title would be considered valid, and, while the statute had not ran upon that, no presumptive bar arises against a claim, which virtually derives its original from a decision against that title. The Court overrule the demurrer; and proceed to consider the plea of the statute of limitations, interposed by the defendant. This plea stands alone, unaccompanied with any answer. Now it is charged in the bill, that the defendant when he took his deeds from Silas Hathaway, took them in fraud of the creditors of Silas, and gave back a writing to said Silas, showing the title under the first deed to be in the defendant in trust for Silas; and that this was kept a secret between them nearly five years, when this writing was recorded, and the second deed giveivto the defendant. It is also alleged in the bill, that, while one John Curtis — 232 — held the orator’s title in these lands in trust to sell and take security on the lands for the consideration money, for the benefit of orator, and those for whom he acted, the defendant, knowing of this trust, obtained the title of Curtis and still holds the same, and used it in his defence in the ejectment suits. The defendant should have answered these allegations, either denying them wholly, or explaining them to be of some different character from that charged in the bill. Without such answer the plea does not bar the equity set up by the orator; for the statute does not run against an equity, when the grounds of that equity have been kept out of sight by the fraud of the defendant, who pleads the statute ; nor does it run against a subsisting trust. If the deed from the orator to Curtis was a trust deed, and the defendant took his deed from Curtis in 1815, knowing this trust, and knowing the orator’s continued claim, and still holds that title, he holds in trust for the orator, as fully as Curtis did before he conveyed to the defendant. This is .a subsisting trust, against which the statute does not run. C. Marsh & B. F. Bailey, for orator. C. Adams, S. S. Brown & Aldis, for respondent. I have omitted to notice, in its proper place, the suggestion of defendant’s counsel, that the defendant cannot be compelled to answer the interrogatories in reference to his deeds being fraudulent. This is not embraced in the demmurrer. That only reaches the supposed want of equity and want of necessary parties. There is no demurrer to the part of the bill, which claims a discovery. This point, therefore, is not regularly raised. If the defendant omits to answer this part of the bill, exceptions to his answer for this defect will raise the question ; and it must then be decided accordingly as his answer might, or might not subject him to statute penalties. The plea in bar is also overruled $ and the defendant must answer to the bill of complaint. The orator then moved to amend his bill, which was granted on terms, and defendant had leave to plead or demur to the amended bill by March 1st, or answer by April 1st. The orator’s counsel also suggested to the Court, that the person heretofore appointed receiver of the rents of these lands, to act during the pendency of this suit, refused to act in that capacity, and, without praying for process of contempt against him, asked, that another receiver might be appointed j which was done accordingly.