Crane v. Deming

Williams, J. It was claimed, 1. That Joel Deming and wife ought not to have been made parties to the bill; they having sold and conveyed their interest in the mortgaged premises. When an exception of this kind is taken, the defendant, who has had an interest, ought to come in and disclaim, or it should clearly appear from the bill he has parted with that interest. Now, in this bill, it is not stated, that these defendants havé conveyed all their interest, or all their equity of redemption ; but merely, that they conveyed the premises, subject to the incumbrances. On a general demurrer, therefore, this exception by Joel Deming, cannot be sustained. As it respects Mrs. Deming, nothing appears in this bill to show that she ever had any interest in the mortgaged premises ; nothing even to make it probable, except the fact that she had joined with her husband in the deed, by which the property is conveyed. The inducement to this we do not know ; it may have been done, because it was supposed necessary to bar her of dower; or, it may have been believed she had an interest that did not exist; but there is no allegation of interest in her. No reason is, therefore, shewn, for making her a party ; and in Jerome v. Jerome, 5 Conn. Rep. 352. 356. it is said, that it is a general rule, that a bill must show some interest in the defendant ; for otherwise, the plaintiff can have no claim against him, and to make him a party is both nugatory and vexatious. It is said, this cannot be taken advantage of, under a general demurrer. It is admitted, that in England the rule of the court is, that every demurrer shall express the causes of demurrer. 1 Harr. Chan. Prac. 294. 3 P. Wms. 391. But other causes may be insisted upon in the argument ; and even after the demurrer is overruled, it is said to be according to the course of practice, that other causes may be assigned at the bar ore tenus. 6 Johns. Ch. Rep. 149. It seems, therefore, to be a rule of practice, adopted by the courts in England. It is, no doubt, a salutary rule ; but I am not prepared to apply it to a case where the bill lays no foundation for a decree against one of the parties to it. Again, it is said, as Mrs. Deming hasjoined in a demurrer with her husband, if it is not sustained as to him, it must also be overruled as to her. No authority is cited in support of the position, except 1 Harr. Chan. Prac. 294. There it is said, on a general demur — 394 — rer to the whole bill, if there is any part as to the relief or dis-covety (0 which the defendant ought to put in an answer, the demurrer being entire, ought to be overruled ; or, according *° Redesdale, “ it is generally considered” that being entire, it must be overruled. This is nothing more, then, that when a party has a good case — but in his bill has intermixed claims not defensible, — though a demurrer to those parts of the bill would be sustained, yet a demurrer to the whole bill would not be. Here Mrs. Deming is a married woman, and must answer with her husband, unless there is an application to the court to permit a separate answer. 2 Madd. 218. She is also supposed to be under the direction, if not under the coercion, of her husband. 1 Salk. 290. I should, therefore, require a strict rule to be shewn, before I should be willing she should be deprived of the benefit of her defence, because she had joined with her husband in the demurrer. But the rules of pleading in chancery, are not so precise and strict as at law; and are more flexible in their modification, and can be more readily made to suit the equity of the case and the policy of the court. Per Chancellor Kent. Brinckerhoff v. Brown, 6 Johns. Chan. Rep. 157. As it respects Mrs. Deming, therefore, the demurrer is sustained. An objection was raised, in the closing argument, that other persons should have been made plaintiffs in this bill; that the plaintiff contracted in behalf of a turnpike company. The deed upon which a foreclosure is sought, is made to the plaintiff only ; the legal title is in him ; and he asks the court to deprive the defendants of any equitable interest they may have, unless they pay the monies due upon the bond to the plaintiff. Who compose the company referred to in the bond, — whether it be a corporation with power to sue, or such as would be recognized by our laws, — we know not. But to support the objection, the bill must clearly show, that there are others who ought to be parties, or the defendant must aver it. To adopt the language of Chancellor Kent, in a demurrer for a like cause : “ The bill should have been positive on this point, and have left no doubts as to the fact, before the want of a necessary party was made the ground of a demurrer to the bill.” 6 Johns. Chan. Rep. 158, 9. 2. But it is further claimed, that the condition of the deed is such as to render it inoperative upon subsequent incumbrances, not setting forth with sufficient certainty what the lien created — 395 — by it is. This condition of the deed is : That if said Deming pay said Crane the money that may be hereafter advanced by. said Crane to said Deming, in pursuance of an agreement referred to in the condition of a certain bond or obligation given by said Deming to said Crane, bearing even date ‘with said deed, on demand, with interest; if said Deming shall perform every condition on his part to be kept and performed in the condition of said bond, and build the bridge therein, and do all other things therein contained, all according to the intent of said bond, then the deed shall be void. This gives notice, in terms, that the land is mortgaged to secure a bond of the same date, payable on demand and on interest; and that the bond has conditions, one of which is, to build a bridge therein named. In Brinckerhoff v. Lansing, 4 Johns. Chan. Rep. 75. Chancellor Kent says, that the mortgage itself disclosed the nature of the debt secured by the bond, when it stated, that the bond was taken as collateral security. This condition not only shows, that it was taken as collateral security, but that it was taken, specifically, to secure an agreement for the building of a bridge. The penal sum of the bond and the place of building the bridge, are notjndeed given. These omissions cannot, surely, nullify this condition ; — for if it was a mere agreement to build this bridge, the fact that the supposed expense did not appear, could have no effect upon the contract; and as giving the amount of the bond would not ascertain this, it cannot be void for want of it. As to the place where the bridge is to be built; that must be of still less importance, as the creditor must, in any event, resort to the mortgage to ascertain the amount due ; and he might as well object, if a note was payable at bank, that the bank was not specified in the mortgage. But neither the amount of a penal bond, nor the place of payment, can be necessary, except to identify the bond. But as that is otherwise sufficiently done, in the present case, this objection is not sustained ; and if any part of the condition is good against the subsequent incumbrances, the demurrer must be overruled. But as the case has been fully argued on other points, and as the Court have formed an opinion upon them, it may prevent further litigation to express that opinion at this time. It was objected, that other conditions of the bond were not sufficiently stated in the deed to entitle the mortgagee to a — 396 — decree in his favour upon them ; and that, that part of the condition of the bond itself, which provides for future advancements, is void, as to creditors. And it is claimed, that these objections are supported by the cases of Pettibone v. Griswold and Shepard v. Shepard. As to those decisions, it could never have been contended, that it was necessary to recite ⅛ the condition of the mortgage the contract on which it was founded, in the words of it. The Court say, creditors must have the power of learning from the record the subject matter oí the mortgage, that these investigations may be guided by something, which will terminate in a certain result, and must be so defined as to prevent the substitution of any thing, which a fraudulent grantee may devise to shield himself from the demands of his creditors. And further it is said, absolute certainty is not to be expected: but there always may and ought to be a certain object after which suitable enquiries may be made. 4 Conn. Rep. 162. Again, the Court say, a mortgage may be given to indemnify the surety of another in the office of sheriff or collector, or an administrator on an estate. “ In all these cases, on enquiry, a creditor cannot know from the record, the precise incumbrance ; but he has notice of certain definite fads, which point to and guide him in the necessary investigation on the subject.” A mortgage to secure an unliquidated book debt, or the fidelity of a factor or bailiff, would be good ; and yet there is nothing certain here, but the subject matter of the stipulation. Stoughton v. Pasco, 5 Conn. Rep. 449. In this case, not only the subject matter is given, but the date of the bond, and that it is payable on demand, with interest. A track is, therefore, pointed out, by which an enquirer can ascertain the facts. It is said, however, that the mortgagor lives in New-Jersey, at a great distance ; and it is not reasonable, that creditors shoulRbe sent that distance for information. But as the amount due on the mortgage can only be ascertained in that way, this does not seem to be. a solid objection. The result of tb/i cases in Connecticut, as given by an able commentator, is — “ That the deed must contain within itself reasonable notice of the incumbrances, to be ascertained, by the exercise of ordinary discretion and diligence.” 2 Kent’s Comm. 454. This deed is of that character: it refers the enquirer to a — 397 — certain object — the bond, in the hands of the mortgagee — which, by ordinary diligence, he can examine ; and which is identified in such a manner as to prevent the substitution of a fictitious security, by a fraudulent debtor. But it is also objected, that the bond is to secure future advancements ; and that advancements were made after subsequent mortgages. Such contracts, in the absence of fraud, have' certainly beeri supported. In The United States v. Hooe, 3 Cranch 74. a irdsi deed to secure his surety against his bond, and also for existing and future endorsements at bank, was holden good. It seems also recognized in Shirras & al. v. Daig & al. 7 Cranch 35. So, where a penal bond was given to secure notes drawn, and about to he drawn, and secured by mortgage,- — it was hold-en good against subsequent incumbrances. Lyle v. Ducomb, 5 Binn. 585. 588. Brinckerhoff v. Lansing, 4 Johns. Chan. Rep. 65. 74. Chancellor Kent speaks of it as no new doctrine, and says, that it is a frequent practice to mortgage property to a creditor as security for a debt to he contracted, as well as for one already due. Hendricks v. Robinson, 2 Johns. Chan. Rep. 283. 308, 9. In Atkinson v. Maling & al. 2 Term Rep. 462. this point was pressed in the argument; but the assignment was held good by the court, without hesitation : indeed, this question does not seem to have been of sufficient importance to engage the attention of the court at all. And in Badlam v. Tucker & al. 1 Pick. 389. 398. the court in Massachusetts, speaking of a security for future advances and responsibilities, says : “ Such a stipulation may have a fraudulent aspect, or may be satisfactorily explained, according to the attending circumstances. Where a mortgage is made merely to secure future advances, without any other consideration at the time, it might be void against creditors, as tending to facilitate collusion, and enabling the mortgagor to get credit on his property, without notice that it was encumbered. But if the object of the mortgage be, to secure an existing demand, the addition of a claim protecting future advances, would not necessarily avoid the mortgage.” But it is supposed, that the cases in our own court vary the doctrine. It is not believed, that such was the intention of the court; so far from it, that the Chief Justice says : “ I shall not express a definite opinion, as the exigencies of the case do not require it: it may be for existing debts, existing liabilities, and — 398 — perhaps for debts to be contracted in future. But the manner in wj1jcj1 ¡t may done> forms an important consideration.” Pettibone v. Griswold, 4 Conn. Rep. 161. It was indeed hold-en> a deed to secure any notes the grantee might endorse in future, and any receipts he might hold, was too indefinite. And in Shepard v. Shepard & al. 6 Conn. Rep. 37. it was held, that a similar condition was not good, though the amount was limited. In neither of these cases, was there any obligation upon the part of the grantee to indorse. But by the bond in question, it appears, that for the purpose of enabling the grantor to carry into effect a contract which he had previously made with the grantee, the latter had bound himself to make the necessary advancements ; and this bond and mortgage are given to enable him to do it with safety. It differs entirely, therefore, from those cases. Here the obligation is as fixed as that of a-surety ; and is limited by the necessities of Deming in repairing the bridge. These circumstances, therefore, entirely repel any fraudulent aspect attending a general stipulation for future advances, and shew that unless there is some inherent vice in every such agreement, this is one which ought to be supported. And although contracts of this kind should be closely watched, that they may not be made a cover to defraud creditors ; yet when every suspicion of this sort is removed, no principle of law or justice requires that they should be declared void. To adopt such a principle would be to interpose unnecessary embarrassments in the ordinary transactions of business, and to encumber the disposition of property by refinements hitherto unknown. As to the advancements made after the subsequent incumbrances, surely if the contract was a fair one, it was the duty of Crane to make these advancements, and he could have been compelled to make them ; indeed, in no other way could he get the advantages, which it was the whole object of the contract to secure. And it is widely different from the cases cited, where a prior mortgage has, under the doctrine of tacking, been postponed as to debts created after the knowledge of a subsequent incumbrance. I am therefore of opinion, that the plaintiff’s bill is sufficient, as against all the parties, except against Sally Deming ; and that he is entitled to a decree for all the sums which may be found due on the several breaches of said bond ; and that the superior court be so advised. — 399 — The other Judges were of the same opinion. Demurrer sustained as to Mrs. Leming, and overruled as to the merits of the bill.