Dudley v. Cadwell

CnuRCH, Ch. J. Cadwell, the defendant, was once the owner of the land now in dispute; and on the 18th day of December, 1829, he mortgaged it to Nathaniel Bacon, and on the 8th day of December 1841, he mortgaged the same land to Ralph B. Steele, the first mortgage remaining unpaid ; so that Steele came in as second mortgagee, and so remained, holding under a deed with covenants from the defendant, until the 10th day of February 1842, when he [225] bought in, from Bacon, the first mortgage, and received from him a quit-claim deed ; and thus, as the plaintiff-claimed, Steele then had the entire legal title. On the same day, Steele executed and delivered to the plaintiff' a mortgage deed, with full covenants, of the same land, to secure the payment of a note of one thousand dollars. Under this deed, the plaintiff now claims title. In this part of the case, on the trial, the defendant objected, that in as much as the deeds from Bacon to Steele and from Steele to the plaintiff', bore the same date, February 10th, 1842, it did not appear from them, nor from extraneous proof, that Bacon’s quit-claim deed to Steele was first delivered, and before the delivery of Steele’s deed to the plaintiff; and therefore, by virtue of this deed, the plaintiff showed no title ; but that the effect of Bacon’s deed was only to release his mortgage, and to extinguish it in favour of the defendant. And he claimed, that the jury should be so informed. We think this claim cannot be sustained. It was quite too much to ask the court to presume, as a fact, that Steele made his deed while Bacon’s mortgage was still outstanding, and before he had removed an incumbrance which he was covenanting did not exist. It was yielding enough to the defendant’s objection, to concede, that these deeds of the same date, might probably have been contemporaneous. They were executed when the parties to both of them were together, in the presence of the same subscribing witness and officiating magistrate. And yet we think it more reasonable to suppose, that Bacon’s deed was first . executed, thereby conferring upon Steele the title and interest, which Steele, at the same interview, though afterwards, transferred to the plaintiff. At any rate, such a construction should be given to this transaction and to the operation of these deeds, as legally to carry out that, which, as reasonable men, we cannot but know, was the purpose of the parties. It would be absurd to treat this as a void security, on the possibility that the mortgage to the plaintiff was perfected before Steele had acquired his full title to the land he conveyed. But the defendant, not satisfied with this view of the subject, urges his claim, to the extent, not only of presuming that Steele’s deed to the plaintiff’ was in truth first delivered, but also, that even the subsequent purchase of Bacon’s title [226] by Steele, would not so enure to the benefit of the plaintiff, as to enable him to sustain this action against the defendant; though Steele's deed to the plaintiff is with full covenants of warranty. Bacon's deed to Steele was made at some time or other — either before, or at the same time, or after, Steele's deed to the plaintiff. If it was executed afterwards, we have no doubt but it operated to perfect the plaintiff’s title. The defendant denies that it would affect him, because he is a stranger to it, not claiming under Steele, and not bound by any estoppel created by the covenants in his deed. It is true, that the defendant is a stranger; his original interest, as mortgagor of this land, was extinguished, by the proceedings in bankruptcy, (a) and he now comes here defending, as a naked intruder, without pretence of title in himself, and only looking out for flaws in the plaintiff’s title. ■Not a very favourable position surely, for that purpose ! Where a deed with covenants operates merely as an estop-pel, the general principle is, that no one is bound by it but such as would be bound by the covenants running with the land, as the grantor, his heirs or assigns, privies in estate. But here is more — the covenants in Steele’s deed alone operate as an estoppel; and then comes Bacon’s deed to Steele, as the defendant will have it, subsequently executed. This title, thus acquired by Steele, eo instanli, vested such an estate in the plaintiff as Steele had covenanted for, and to the same extent as if the plaintiff had acquired it originally by his deed. And such a title would have been good against all strangers and others who could not show an earlier or better one. As Bacon has relinquished to Steele all title to the premises, and Steele, by his covenants, has estopped himself, and all his privies in estate, from claiming title ⅛ where is it, unless it be in the plaintiff? It has never been conveyed to the defendant. By whatever mode of conveyance a good and [227] entire title is made in a purchaser, this must be available against every body. This doctrine was very fully and carefully considered, by the supreme court of Massachusetts, in the case of Somes v. Skinner, 3 Pick. 52., in which the principle which we now recognise, was applied. And in a later case in the court of King’s Bench, the subject was much discussed, and the same views confirmed. Doe d. Christmas & al. v. Oliver, 10 B. & Cress. 181. (21 E. C. L. 50.) We refer also to the following authorities for confirmation. Trevivan v. Lawrence & al. 1 Salk. 276. Weale, v. Lower, Pollexfen, 54. Rawlyn’s case, 4 Co. 53. Mason v. Muncaster & al. 9 Wheat. 445. Terrett v. Taylor, 9 Cranch, 43. Jackson d. Thurman v. Bradford, 4 Wend. 619. This objection to the plaintiff’s right of recovery, cannot be sustained. But the defendant objects again, that Steele himself, being only a mortgagee, could not convey to the plaintiff the land mortgaged, only as accompanied by the assignment of the debt secured by the mortgage. And he claims, that no such assignment was ever made, or intended. The title of a mortgagee is peculiar. It is a legal title, but can hardly be said, now, to be classed with any description of title known to the common law. Originally, it was a conditional estate before forfeiture, and an absolute one afterwards. But courts of equity have so modified its character, and courts of law have so far recognised these modifications, that at this time, the title can be no better distinguished than by calling it a mortgage title, and nothing more. This gives to the mortgagee a right of proceeding against the land, for the purpose of enforcing payment of the debt, which is the principal thing; while the right to the land is given and exists, only as a means to this end Therefore, it has been holden, that the land cannot be separated from the debt; and if it can be transferred in any way, that the assignee or grantee must hold it at the disposal of the creditor. Jackson d. Norton v. Willard, 4 Johns. R. 41. Huntington v. Smith, 4 Conn. R. 235. In this state, we may consider it to be the settled law, ever j since the case of Phelps v. Sage, 2 Day, 151., was decided, | that payment of the mortgage money after forfeiture, does l not divest the mortgagee of his legal estate, but gives only [228] a right to compel a reconveyance in chancery. Smith v. Vincent, 15 Conn, R. 1. Doton v. Russell, 17 Conn. R. 166. But this does not conflict with the principle of the case of Smith v. Huntington, nor recognise a separation of the land from the debt. Payment of the mortgage money constitutes the mortgagee a trustee for the mortgagor, who can compel the execution of the trust, by a reconveyance. Gunn v. Scovill, 4 Day, 234. And if a transfer of the land alone can be made with any effect, to a stranger, we think it can be, only to place in him the legal title, as trustee, for the owner of the debt, while it remains unpaid, and as trustee for the mortgagor afterwards, and without conferring upon him any independent right. But however this may be, the facts in the present case do not call for any application of the principle suggested. Here, the land mortgaged was conveyed, by way of mortgage, by Steele, the mortgagee, to the plaintiff; and although the debt was not, at that time, in form assigned, to accompany the land, it became a question what was the intention of the parties, in this unusual proceeding? And this was submitted to the jury. It might well enough be inferred, that they supposed a conveyance or mortgage of the land alone would operate as an assignment or pledge of the debt, and at least, that a deed of the land was necessary to transfer a right to the land ; and, added to this, the jury has found, that the subsequent delivery of the debts to the plaintiff, was made, to complete the entire assignment of the mortgage. Indeed, it is difficult to assign any other reason. This being so, these two transactions constituted an effective assignment, and placed the legal title in the plaintiff, so as to give him a right to sustain this action of ejectment. Some other questions are suggested, by the motion ; but as those already determined seem to us to dispose of the entire case, we pass them by. We are very clear, that no new trial should be granted. In this opinion the other Judges concurred, except Ells-worth, J., who was absent. New trial not to be granted. Footnotes [(a)] Allusion is here made to certain proceedings in bankruptcy, in the course of which Cadweli, the present defendant, was deciar-d a bankrupt, and Norris Wilcox was appointed his assignee, who, in that capacity, conveyed the interest of the defendant in the land now in controversy to Steele. These proceedings appear upon the motion for a new trial, bulare omitted in the preceding statement of facts, because they were not taken into consideration,by the court, informing their decision — except perhaps the unconiroveried fact that Cadweli had no longer any equity of redemption.