Gleason v. Owen

Poland, Ch. J. The county court held that if all the facts were found which the plaintiff’s evidence tended to prove, they did not entitle him to sustain his ’action of trover for the mortgage deed. It was conceded that the defendant had become the owner of the two notes given by Michael Gleason to Edson & Hannum, and the mortgage deed executed as a seem ity for their payment, that the notes had been delivered to him, and the mortgage deed had been handed over to Brown to write an assignment upon it, and then delivered to the defendant. The testimony of the plaintiff tended to prove that he contracted with the defendant for the purchase of said two notes and mortgage, that he paid over the amount of the notes in money to the defendant, that the defendant delivered him the two notes, and agreed to deliver the mortgage deed, and that [595] afterwards he refused to deliver the deed upon the plaintiff’s demand. The testimony on the part of the defendant is not detailed, but it is apparent that he claimed that the transaction between him and the plaintiff was not a purchase and transfer of the notes, but a payment and surrender of them, and that he became under no obligation to deliver the deed to the plaintiff. It is first insisted by the defendant that this very dispute, and disagreement of the parties, as to the character of the transaction, and whether it was a payment or^ purchase of the notes and mortgage, precludes the party from maintaining this action, by showing that his is the true version of it; that such a question can not be litigated in this form of action. In support of this objection the defendant relies on some observations made by the late Oh. J. Williams in Pierce v. Gilson, 9 Vt. 216. By-reference to that case, it will be seen that it was an action of trover brought by the maker of a note agaiust the payee, for refusing to surrender the note, which the maker claimed he had paid, and was entitled to have surrendered up to him. The court fully recognized the propriety of the action of trover in such a case, as being fully settled by authority, but Judge Williams, who delivered the opinion, advances the idea that the plaintiff, in such an action must not only show that the note is paid, but also that it was so understood by the payee, when payment is made ; that if he then claims that it is not fully paid, he has the right to retain the note in his own hands as evidence of his debt when he attempts to enforce payment of it by an action. It seems to us that there must be very great practical difficulty in carrying out this suggestion, and holding that trover will lie to recover damages for refusing to deliver up a paid note in some cases, and not in others ; depending upon the particular circumstances of how the dispute arose between the parties in relation to the fact of payment. It is hardly conceivable that such an action could ever be brought, except where the payee denied the fact of payment, and if the action would only lie where payment was conceded by the payee, there would be no occasion for bringing the action at ,all. [596] Bat however it may be in such a case, directly between the parties to the instrument sued for, we think that what is said in-that case has no influence upon this. Neither of the parties to this action were parties to this mortgage deed, and it was not the evidence of any debt or obligation from one to the other. It was a mere security, or the evidence of a security, for the payment of the notes, which^ the plaintiff claimed he had become the owner of by a purchase from the defendant. As between these, parties it was merely a piece of property, which might belong to the one or the other, and whether the title and ownership of it was in the plaintiff or not, depended upon the fact whether he had purchased it from the defendant; and it seems to us there is no reason why that question may not as well be tried in this action of trover, as if it had been any other piece of personal property, a horse or a cow. The defendant also insists that if the plaintiff had purchased and paid for this mortgage deed, and then the defendant refused to deliver-it to him, the plaintiff can not maintain trover for it, because the defendant, at the time of the sale to the plaintiff, had po legal interest in it, and that by a mere parol sale to the plaintiff none was conveyed to him. It is a familiar doctrine that a mortgage is regarded merely as an incident to the mortgage debt, and a security for its payment, and that a transfer of the mortgage debt carries with it the mortgage security, without any assignment of the mortgage in writing, or even any parol agreement to assign, or any delivery. And in such case the purchaser, and real owner of the mortgage debt, may maintain a suit in chancery in his own name to foreclose the mortgage. Still, without a formal assignment of the mortgage the legal estate is still regarded as in the original mortgagee, after the breach of condition, and such equitable assignee can not maintain an action of ejectment in his own name to recover the mortgaged premises. In this sense it is true, the legal. interest in this mortgage deed was not in the defendant when he sold it to the plaintiff, nor did the plaintiff acquire it by his purchase of it by parol. It is precisely the same as the sale of a note, or other chose in action, which is not negotiable, or if it is, is not transferred [597] an the maimer required to transfer the legal interest; the holder is the real owner of it, as property, and has the sole right to collect and dispose of it, but still the legal interest is in another, so that if it becomes necessary to enforce it by an action, it ■must be brought in the name of the party to whom it was ■originally executed. Still in such action the right of the real owner will be protected, and the party in whose name the suit is brought will not be allowed to interfere, or do any act to prejudice the real owner. In such ease the real owner of the debt is regarded as having the legal interest in it, in all respects and for all purposes, except as to the mere form of prosecuting his legal remedy by action, and when he does that in the name of another, he has the same right to control and manage the suit as if in his own name. In an indictment for stealing such an instrument, we apprehend it would be necessary to allege the property to be in the true owner, and not in the party in whom the technical right of action existed. And so in an action of trover, when the suit is brought not to ■enforce the instrument itself, but for an unlawful conversion of it, as property, we think the real owner has such a title as to •enable him to sue in his own name, and that a suit brought in the name of the party in whom was the technical right of action ■could not be sustained; indeed the unlawful conversion might be •by him, and the suit be against him. The same views here •expressed will be found expressed in the case of Fisk et al. v. Brackett, 33 Vt. 798, and though not the precise point of decision there, were sanctioned by the Court in the decision of the case. The defendant also claims that there was no sufficient evidence of a conversion by him to enable the plaintiff to sustain this suit. The plaintiff’s evidence tended to-prove that he purchased ■the notes and mortgage, and that the defendant agreed to get the deed and deliver it to him, but that afterwards he absolutely ■refused to deliver it, and said he should cancel it. As not! ting more remained to be done between the parties to [598] make the sale complete and perfect, except the delivery of the mortgage, the property passed without delivery, and the defen* dant’s refusal to deliver was a conversion, if such refusal was wrongful at the time. The cases read by the defendant’s counsel, that a demand and refusal are only evidence of a conversion, and that a refusal to deliver is a conversion, only when it is in the power of a party to deliver, or he has wrongfully put it out of his power to do soy are unquestionable. The evidence here- showed that the deed was placed in Brown’s hands for the defendant, and he was entitled to the possession of it at any moment he chose to take it, so that it must be regarded as virtually in the defendant’s possession, and when he refused absolutely to deliver it, not upon the ground that it was not in his power to do so then, or that he wanted time to get it from Brown, but upon a denial of any right to it in the plaintiff we think it was sufficient evidence of a conversion to sustain the action. In our view the court below erred in deciding that the plain* tiff’s evidence did not tend to show enough to sustain the action, and the judgment must be reversed, but as the court did not attempt to find the whole facts shown by the evidence on both sides, the case must be remanded for a new trial.