Blodgett v. Hobart

The opinion of the court was delivered by Bennett, J. The primary object of the original bill is to reform a mortgage deed, executed by Thomas S. Hobart and William Foster on the second day of April, 1836, to the orators, to indemnify them against signing a note to the Bank of Orange County, as sureties, for Hobart & Foster, who were at that time the owners of a woolen factory, which they were carrying on. It seems, that Hobart owned two thirds of the establishment and Foster-the remaining one third, and that the money raised from them was for their use in the same proportions, and that Hobart was to secure the orators for two thirds of the amount of the note, which they had signed to the bank, by a mortgage of his private real estate and of his interest in the factory establishment, and that Foster was to secure them for the other third by a mortgage of his own farm, and of his interest in the factory. Instead of separate mortgages, Hobart and Foster joined in making one mortgage to the orators. The orators now claim, that, by mistake, this mortgage does not embrace all the lands, which it was intended should have been pledged by Hobart, as a security for the two thirds of the note signed by them. The orators claim, that the mortgage should include what is called Hobart’s home farm containing about fifty acres, and also another certain piece of two and a half acres, described in the bill. — 420 — The first question for consideration is, have the orators succeeded in establishing the mistake! Foster, who is not a party to the bill, has been examined as one of the witnesses on this point, by the orators, and the defendants now move, in pursuance of their motion in the court below, to suppress his testimony on the ground of interest. We cannot see, that the defendants can object to the competency of Foster. If there be three obligors, and the action be brought against one, the others are witnesses on the part of the plaintiff to prove the execution of the bond. Lockart v. Graham, 1 Str. 35. See, also, York v. Blott, 5 M. & S. 71, and Hudson v. Robinson, 4 M. & S. 476. Though we should regard Hobart and Foster as co-principals for the entire sum of the bank note, and the orators as their co-sureties for the same, still, Foster would have no interest in the event of this suit, which could disqualify him. If the sureties have been damnified, and they take their indemnity against Hobart, or his property, Foster, if he has not already paid his proportion of the note, would be bound to Hobart for contribution. Whether it would have been proper to have made Foster a party to this bill, it is unnecessary to consider. This has not been insisted upon by way of demurrer to the bill, plea, or answer ; or even on the hearing. Certainly, in such case, this court would not reverse the decree of the chancellor, in a case in which a decree could be made, though all the proper persons were not before the court. See Cannon et al. v. Norton, 14 Vt. 178. We think it is fully established, that there was a mistake in drawing the mortgage deed, and that it was the intention of the parties to have included Hobart’s home farm, and also the two and a half acres, within the description. Foster testifies, that Hobart agreed with the orators to mortgage all of his real estate; and the subsequent conduct and repeated declarations of Hobart, as testified to by a great number of witnesses, go to establish the fact, that he supposed it was included in the deed. It is evident, that Hobart supposed, that his whole property was included in the decree of foreclosure, obtained in the action of ejectment, while that was running. There is a strong probability, that it would have been the intention of the parties to have included it. Hobart, in his answer, says he was ready to give as much security, as was wanted. The property actually mortgaged by Hobart was but a lean security for the two — 421 — thousand dollars, and the part omitted by far the most reliable part of it. Besides, the answer of Hobart,^upon this point, is evasive. We think, from the whole evidence in the case, that the mistake is established and the substance of the bill proved. It was a mistake in Mr. Nutting, in making the description in the deed so as not to include the home farm, and a mistake in Hobart, in supposing it so drawn, as to include it, when in point of fact it was not included. We think the mortgage deed must be so reformed and set up against these three defendants, as to include the lands of Thomas S. Hobart, which were omitted in the description. There is no pretence, that Caleb Hobart and John Hobart can be regarded as bona fide purchasers, without notice of the orators’ claim. The bill has been taken as confessed by John Hobart, and it is not proved that Caleb purchased for a valuable consideration, without notice. The result, then, is, that the mortgage is, by a decree of the court of chancery, to be so reformed as to include the home farm of Hobart, and the two and a half acres, and make it such an instrument, as the parties to it intended it should have been. The effect of this must be, to leave in the mortgagor an equity of redemption, at least, in the home farm, and the other piece, unless there is something in the case to show that he should be debarred from this right. It will not do to create a mortgage and foreclose the equity of redemption at one and the same breath. It is alleged in the bill, that the whole property was sold and conveyed by the orators to Ira Burrage, by and with the consent and advice of Hobart himself; but there is no evidence to prove those allegations, except what comes from Burrage himself; and he is not a competent witness. The cross bill is brought by the three Hobarts against the orators and Burrage, to whom the orators have conveyed the premises. The object of the cross bill is to obtain relief, against the orators in the original bill, from the effect of their release to Foster of his farm, which was included in the mortgage; and also to obtain a decree, that the orators in the cross bill may be let in to redeem the lands foreclosed in the action of ejectment. No claim is made out against the orators in the original bill, growing out of their release to Foster of his home farm. It was the understanding between Hobart and Foster, when they obtained — 422 — their security to the bank, that Foster was to have one third and Hobart two thirds of the money obtained, and that they were to give security to their sureties in that proportion. No evidence establishes the fact, that Foster had more than one third of the money; and if so, there is no evidence, that the orators in the original bill had any knowledge of it. Besides, they allege in their own bill, that Foster had paid them what was supposed to be his part to pay, before the release of his farm was given to him, and that they retained the mortgage upon his part of the factory, to secure the balance due from him, if there should prove to be any. We do not think, that the equity of redemption in the premises foreclosed in the action of ejectment is necessarily opened. This depends mainly upon the answer of Mr. Nutting to the cross bill and the testimony of Mr. Boardman. Suppose from this answer and testimony we should find, that an agreement was made, before the time of redemption had run, 'that the money might be paid afterwards; yet the testimony shows, that there was no offer to pay it, after the decree had expired. In Pierson v. Clayes et al., 15 Vt. 104, the court held, that, if the mortgagor failed to perform on his part some act, which was to be done after the time of redemption had run, he would not be entitled to any relief against the decree; though, if he had tendered a performance, the equity of redemption might have been opened. It is urged in argument, that the orators in the cross bill should be allowed no equity of redemption in the home farm of Thomas S. Hobart, or the other piece of land. It is said, both parties supposed that these pieces were included in the mortgage, and that they were also included in the decree in the action of ejectment, and that consequently the effect should be the same, as if such had been the case. Though both parties were doubtless at that time under a mistake in relation to this point, yet we think this cannot debar Hobart of his equity of redemption. Neither of these tracts were embraced within the declaration in the action of ejectment, and the decree, in its terms, in no way related to them. The title to real estate cannot be transferred from one t o the other by such means. The mistake was mutual, and there is no pretence of fraud on either side. — 423 — If it had been proved, that the mortgagees had executed an absolute deed to Burrage by the consent and approbation of Hobart, it might with some propriety be argued, that Hobart should thereby be concluded from all equity of redemption. There is no proof of such fact, except what comes from Burrage himself; and a motion has been made to suppress his testimony. We think it is quite clear, that he is not a competent witness. The deed to this witness has the same description of the lands conveyed, as was contained in the original mortgage'to his grantors. It is admitted, that there was a mistake in the description in this deed. Burrage has an equitable title, as against his grantors, in the home farm of Thomas S. Hobart, and also in the two and a half acres; and chancery would, upon the facts proved in this case, reform his deed. Whether his equitable title would ripen into a legal title, by a reform of his deed, must depend upon the title of his grantors. Consequently, he is interested in establishing their title, and his testimony must be suppressed. It is said, we should act upon the answer of Burrage to the cross bill, and that this shows the privity of Hobart to the sale to Bur-rage. His answer is not evidence in favor of his co-defendants in the cross bill, to debar Hobart from his equity of redemption. The general rule is, that the answer of one defendant is not evidence for, or against, his co-defendants. There may be exceptions,' as in cases where the matter of controversy arises from a joint contract. But here Hobart’s right to redeem is a matter solely between him and his mortgagees, though Burrage has become interested, as to the existence of such right. The orators in the original bill must rely upon the case which is there made, to debar Hobart from his equity of redemption. The answer of Burrage to the cross bill cannot, in any point of view, be used as evidence to support the original bill. There is, then, no evidence, to show that Hobart was privy to the sale by his mortgagees to Burrage. It would be going too far, to create a mortgage and cut off the equity of redemption at a single stroke. To warrant it, the mortgagors, must have done some act to conclude himself from the right. As Hobart must be allowed to redeem the home farm and the two and a half acres, we think the equity of redemption should also be opened as to his other property, foreclosed in the action of ejectment. — 424 — The result, then, is, that the decree of the chancellor upon the original bill is reversed, and a decree entered up, that the mortgage deed be reformed, and that it be set up against Thomas S. Hobart and his grantees, Caleb Hobart and John Hobart, as a mortgage including the home farm of Thomas S. Hobart and the two and a half acres, as well as the premises therein described. The decree of the chancellor, also, upon the cross bill must be reversed, and the orators be let in to redeem the whole premises mortgaged by Thomas S. Hobart, by paying such sum, as shall be found due from him, by such time as the chancellor shall direct, and, in default thereof, be foreclosed. We think the orators in the cross bill should not have the premises, foreclosed in the action of ejectment, applied at their value upon the debt, and have a right to redeem the other pieces upon paying the balance; but they must pay the whole debt. The costs of the appellants in the supreme court should be deducted from the sum found due, and no costs be decreed to either party in the court of chancery. The orators in the original bill should not have costs, inasmuch as they insisted, that Hobart was bound to correct the mistake, without reserving to himself an equity of redemption; and upon common principles, the orators in the cross bill should not have costs, upon being let in to redeem upon paying what shall be found due.