Slocum v. Catlin

The opinion of the court was delivered by Kellogg, J. That the deed from Alexander Catlin to Stephen Haight is to be treated as a mortgage, we entertain no doubt. After the execution of the deed Alexander Catlin continued to oc [139] cupy and control the premises, which were of much greater value than the amount of the liabilities assumed by Haight. Both Haight and Alexander Catlin treated it as a mortgage, and Guy Catlin, in his answer, admits, that the deed was made as an indemnity for the liabilities assumed for Alexander Catlin at Washington. Such being the fact, Alexander Catlin had an equitable interest in the premises, which was subject to attachment by his creditors, until he was legally divested of that interest. To make the deed from Alexander Catlin to Guy Catlin available, as against the creditors of Alexander Catlin, proof of a registry of it in the proper office, or notice to the attaching creditor, before his attachment, of the existence of the deed, must appear. But neither appears in the present case. It was urged at the argument, upon the authority of Pratt v. Panic of Pennington, 10 Vt. 293, that a registry of the deed was unnecessary. That case, however, is not analogous to this. There the court held, that for the purpose of a foreclosure by the assignee of a mortgage, it was not necessary to record the assignment; and this upon the well settled principle in chancery, that the mortgage is regarded as a mere incident of the debt, and as accompanying it, wherever that may be assigned; and as the debt may be assigned by parol, the mortgage security may be transferred in the same way. This has no application to the transfer of the equity of redemption. We think, therefore, that the orator acquired a lien by his attachment. It is not necessary, in disposing of the questions raised in this case, to inquire what would have been the effect upon the rights of creditors, had the deed from Alexander Catlin to Guy Catlin been recorded before the attachment. No pecuniary consideration passed upon the execution of the deed, and there was a great disparity between the value of the premises and the amount of Mr. Haight’s incumbrance. The conveyance by the administrator of Haight to Guy Catlin was a transfer of Haight’s interest under the mortgage, or in effect an assignment of the mortgage. Guy Catlin having procured an assignment of the mortgage and a release from Alexander Catlin of the equity of redemption, the legal consequence was, that the mortgage interest became merged in the fee. It is, however, doubtless competent for a court of equity to relieve from the legal consequences of the [140] merger, by setting up the mortgage, where equity requires it should be done. Guy Catlin having paid off the incumbrance, he has an equitable lien upon the premises for the reimbursement of the same. And the case appears to have been so considered by the chancellor. But it has been urged, that the defendant Guy Catlin should have been allowed a lien upon the estate, by virtue of the mortgage, for the sum of $233,10, being the amount of the note by him executed to Haight on the seventh of November, 1840, in addition to the $150 by him paid on the twentieth of July, 1839. It appears, that the usual course was pursued, of referring it to a master to ascertain and report the sum due upon the mortgage, and also the rents and profits of the premises after the orator’s levy. The master reported the sum due upon the mortgage to be $150 on the twentieth of July, 1839, and that there was no evidence, that the note to Strong & Co., the note to Philo Dolittle and the demand to Taft were included in the mortgage of Alexander Catlin to Stephen Plaight, by virtue of an agreement between them, and that there was no evidence, that Plaight ever paid, on the score of his original liability for the said Alexander, any more than the sum of one hundred and fifty dollars. This report was confirmed by the chancellor and formed the basis of his decree. On examining the proofs we are unable to find any satisfactory evidence, to justify a different result than the one reported by the master. It is indeed true, that Guy Catlin, in his answer, alleges, that the execution and payment of the note to Haight of $233,10 was with the assent and at the request of Alexander Catlin, as was also the arrangement with Haight for the assignment of the mortgage ; but this, not being responsive to the bill, is not evidence for the defendant. Nor is the paper detailing these demands of Strong & Co., Doolittle, and Taft, and containing the declaration and signature of Mr. Haight, that he had paid those demands for Alexander Catlin, satisfactory evidence of the fact. But suppose this difficulty removed, and we were to regard the fact of the payment of these demands by Haight established by the proofs, there is still another objection to the allowance of this claim. There is no evidence of any agreement between Alexander Catlin and Haight, by [141] which Haight was to hold the mortgage as security for such payment. We think, therefore, that this claim was properly disallowed. It is farther objected, that the orator’s levy of his execution is irregular and void, inasmuch as it appears, that the mortgage to Haight is not stated at the true amount, but at less than the amount. And the case of Paine v. Webster, 1 Vt. 101, is cited to sustain this objection. So far from its being an authority in support of the objection, it is a direct authority in support of the levy. That the incumbrance is estimated at too small a sum does not operate an injury to the debtor, but to the creditor, and of this the debtor cannot complain. The result is, that the decree of the court of chancery is affirmed, with costs to the orator, and the case remanded to the court of chancery.