Atwood v. Vincent

Church, J. The committee, upon whose report this case comes before us, among other facts, say, that it was agreed between Atwood, the plaintiff, and Cunningham, by an instrument in writing, separate from the deed by which the property in question was conveyed to Cunningham, not only that the latter should pay two thousand dollars of the mortgage debt to the state of Connecticut, and indemnify and save harmless the said Atwood therefrom, but also, that it was then agreed between them, that the state mortgage, to the amount of two thousand dollars, should be chargeable upon the lands thus conveyed; and that the land conveyed by Atwood to Tyler — 581 — and BecJiwith, parcel of the mortgaged premises, should he discharged from the incumbrance to the extent of that sum, and - the interest upon it from April 1,1840, but should only remain charged with the excess of the mortgage debt above the sum of two thousand dollars, and no more. And we are referred to but one written instrument containing any contract between those parties. This contract contains no such stipulations as those last stated ; and if the committee intend to refer to this only, and have inferred the foregoing facts from it, as resulting from a fair construction of the contract, they are mistaken. There is no such inference of fact to be drawn from it, whatever may be the presumption of law. If the facts are such as the committee have either presumed from this paper, or found from some other, and they were known to Vincent, when he levied upon the land, there could hardly remain a specious question now to be settled in regard to the operation of that mortgage, as between these parties. What was agreed to be done, the court would either consider as done, or enforce as a matter which ought to be done, and carry it out by a decree, as the plaintiff claims. But if, as we suspect the truth is, there was no other written contract than the one to which the committee had reference, then we are to determine the respective equities of the parties from this and the other facts reported. Let these facts be viewed in different aspects, and from different positions, and yet we think they will result in the conviction that the plaintiff is entitled to relief. Cunningham paid no part of the state mortgage, although, by his agreement with Atwood, he was bound to pay two thousand dollars of it. And Vincent, who comes in under Cunningham, has paid only one thousand and eighty dollars on this debt; the balance having been paid by Beckwith, to relieve that part of the land purchased by him, from the same incumbrance. The result is, that Atwood has received for the land by him sold to Cunningham, eleven hundred dollars and interest less than its estimated value, andiess than the amount which Cunningham agreed to pay; and Vincent, who now holds the land, has obtained it for the same amount less than he knew Cunningham had agreed to pay. This balance is clearly due from Vincent, either to Atwood or Cunningham. We think it equitably due to the former. — 582 — The foreclosure of the mortgage by the state, did not, in any -respect, affect the rights of Atwood-, he was no party to it, having received no legal or actual notice of the pendency of the bill to foreclose. He is liable on the covenants in his deeds to Tyler and others, by reason of incumbrances, which Cunningham, by the payment of the aforesaid sum of two thousand dollars, agreed to extinguish. Beckwith had previously agreed with Atwood, to pay eleven hundred dollars to the state, on the aforesaid mortgage, as the entire consideration of the land he had purchased ; and in no other way had he paid any thing for it. But Cunningham’s contract was intended to supersede this agreement with Beckwith; and by reason of it, Beckwith was in equity bound to pay the amount of his purchase to Aticood; and the committee find, that Cunningham thus understood and recognized the effect of his contract to be. It is entirely obvious, unless Vincent shall pay to Atwood the sum really due from him, that, by reason of the default of Cunningham, of which Vincent was privy, Atwood will lose the entire consideration of his sale to Beckwith. The clear principles of equity require, that these parties should be placed in the situation where they agreed to be placed ; and this can be effectually done, by compelling Vincent to pay the sum due from him, to Atwood, and not to Cunningham. Again ; Vincent, when he levied his attachment and execution upon the equity of redemption of Cunningham in this land, knew of his unfulfilled contract with Atwood; and the equity was appraised and set off to f incent, under the incum-brance of the state mortgage. But Beckwith has paid eleven hundred dollars of this incumbrance, and so far relieved Vincent from his obligation of paying it to the state. To whom then shall he pay it ? Vincent, the defendant, says, if he has received Cunningham’s equity of redemption at an under-value, by reason of the payment made by Beckwith, he ought to pay Cunningham, who was the owner of this equity. We say no. The money paid by Beckidth, was paid for the benefit of Atwood— it was the consideration of the sale of Atwood’s land to Beckwith, and in equity must be considered as the money of Atwood. The committee do not find, that Cunningham is insolvent, to be sure; and we know nothing more of him, than that by his utter disregard of obligations, he has brought Atwood, and — 583 — those to whom he has, in faith of these obligations, sold parcels of this land with warranty, into this unfortunate condition. We know of no principle, which, without adequate security or indemnity to Atwood, should induce us to permit the money thus equitably due from this defendant, to be paid over to Cunningham. Further; Cunningham, by his agreement with Atwood, assumed the payment of two thousand dollars of the state mortgage, as part of the consideration of his purchase. As between himself and Atwood, therefore, his was the primary duty of paying that sum, and he stood as principal debtor; and Atwood, whose bond was still outstanding at the treasury, stood as his surety to the state. The principle applicable to this position of the parties, is well settled. The surety is entitled to the benefit of all the securities, which are available for his advantage. Vincent has acquired his interest in this mortgage both from Cunningham and the state, with full knowledge of, and acquiescence in, all the responsibilities of Cunningham, and is, therefore, bound in equity still to hold it as a subsisting mortgage for the indemnity of Atwood, the surety of Cunningham ; and is subject to all such equities as this surety may enforce under the mortgage. The plaintiff has referred us to another principle of equity, elsewhere recognized, as one which will entitle him to the relief he asks. It is that of a vendor’s lien. That a vendor has a lien for the amount of the purchase money of land conveyed, not only against the vendee, but against others claiming under him, with full knowledge that such money remains unpaid, is a principle, which from the Roman law has been engrafted into the systems of equity jurisprudence of England, and some of the states of this union. There have been complaints of the practical operation of this principle, and wishes expressed, from high sources, that essential modifications in its application should be adopted. In this state, we have not yet had occasion to resort to it; and whether it will be recog-nised as operative here, is a question which we shall leave to be determined in a case calling for a decision of it. Still another question is presented, by the facts reported. It appears by the contract between Atwood and Cunningham, that the former agreed to sell to the latter, five farms in — 584 — New-Hartford, in this county, containing about one thousand acres, at an average price of twenty dollars per acre; the precise quantity to be ascertained by survey; making the whole price twenty thousand dollars, unless the result of the survey to be made, should reduce this amount. This sum Cunningham agreed to pay, by conveying to Atwood certain lands in the state of New-York; by paying, or assuming to pay, to the state of Connecticut, the aforesaid sum of two thousand dollars; by the payment of five hundred dollars in cash ; and in some other specified modes of payment. Vincent became the assignee of Cunningham under this contract, and was, of course, entitled to all the equities growing out of it, favourable to Cunningham. On the hearing of this cause, by the committee, Vincent offered to prove, that the warranty deed of Atwood to Cunningham of the New-Hartford lands, included other and more lands than Atwood had title to ; and also, that the lands which he did in fact own, and which were conveyed by his deed, fell short of the quantity estimated in the contract. This evidence, upon objection, the committee rejected. This proof was not offered by Vincent, for the purpose of establishing a claim of set-off, of which the plaintiff, in analogy to the rule applicable to actions at law, might have been entitled to notice ; nor was it offered to show an equity on the part of f incent, as assignee of Cunningham, of which he could only avail himself, by answer or cross-bill; but it was offered to measure the extent of the plaintiff’s equity. So far as the title of Atwood was defective, or the estimated quantity of land fell short, so far the consideration of the conveyance had failed ; and to that extent, neither Cunningham, nor his assignee, was under either legal or equitable obligation to pay. Suppose the whole title had failed ; could Atwood sustain his bill for any relief? This cannot be claimed. It is equally evident, that his relief could only be commensurate with the extent of his equities. We think, in this particular, the committee erred, and that the evidence thus offered should have been received. We advise the superior court, that upon the facts already found and reported, the plaintiff is entitled to the relief he asks; but we also advise, that the cause be sent back to the — 585 — committee, to hear the aforesaid evidence by them rejected, and amend their report accordingly. In this opinion the other Judges concurred. Decree for plaintiff in part; and Report of committee recommitted.