Woodward v. Cowdery

The opinion of the court was delivered by Wilson, J. The principal questions in this case, are, 1st, whether the alleged agreement between Carpenter and Lyman Benson was entered into by which Benson should have the right to redeem the property after the expiration of the time fixed by the decree. 2d, whether Hyde purchased said decree and property without notice of the alleged right of the estate of Benson to redeem the premises, or whether Hyde, as a subsequent mortgagee, merely paid the decree and thereby redeemed the property under it in order to protect and save his subsequent mortgage security. There are many circumstances disclosed by the testimony which have an important bearing upon the main questions in dispute. It appears that Carpenter was receiver of the bank and solicitor for the orator in the proceeding in the name of the state treasurer to enforce payment of the debt secured by the mortgage to the bank. Benson had a large claim against Cowdery secured by subsequent mortgage on the same property, and the property was ample security for both mortgages. Benson had no security except on the land covered by the decree on the bank mortgage ; Cowdery' and wife were insolvent before and at the time named in. the. decree for its expiration, and of all this Carpenter was cognizant. Carpenter, as receiver of the bank and solicitor for [501] tbe orator in these proceedings, and while having control of the decree in question, by consent of the parties interested in that decree, received of Hyde the amount of the decree, the same as he would have done if Hyde, or any other person interested in the redemption of the property, had made payment before the decree expired. The nature of that transaction and the declarations ol Carpenter to Woodward upon the occasion of receiving said payment from Hyde, afford considerable evidence tending to show that Carpenter made the alleged agreement with Lyman Benson. We think the evidence shows very clearly the agreement by Carpenter with Lyman Benson before the expiration of the time of redemption, to receive pay of him in satisfaction and discharge of said decree as against said Benson, after the expiration of said time of redemption; and that in consequence of said agreement, and relying thereon, said Benson did not redeem the property under said decree before its expiration. The evidence shows that the money was offered to Carpenter in behalf of Benson’s estate in April or May, 1860, that the offer was repeated, and the administrator has always been ready and willing to pay the sampj and is still so, in satisfaction of said decree in accordance with the agreement between Carpenter and Benson. Carpenter, as r.e,-ceiver of the bank and attorney for the parties interested in that mortgage and decree, had competent authority to make with Lyman Benson the alleged agreement, and its validity is not denied by the defendants. Carpenter would in equity be estopped, if he held said decree, from denying the right of Benson’s estate to redeem the property. It is claimed by the defendants’ counsel that said Hyde stands in the situation of a purchaser of the legal title for value and without notice of the prior equity of Benson’s estate. But the evidence we think does not sustain this position of the defendants. If the evidence would warrant us in finding that Hyde actually purchased the decree and obtained the legal title to the property, still the evidence is abundant to show that he was, before and at the time he took the assignment from Carpenter, cognizant of the claim in behalf of Benson’s estate, and of the right in that estate to redeem the property under that decree, after its expiration. In [502] this view of tlio case, Hyde would bo affected with all and the same rights that Benson and his estate liad against Carpenter himself at the timo of the assignment to Hyde, and Hyde would be estopped from denying the right of Benson’s estate to redeem the property in accordance with the alleged agreement between Benson and Carpenter. But upon the evidence, we think it is clear that Hyde, in virtue of the assignment to him by Carpenter, did not become the owner of the property. The deed from the defendant Cowdery to said Hyde, under date of May 18,1858, was in effect a mortgage to secure the indebtedness of Cowdery to Hyde, and that indebtedness existed at the time Hyde took the assignment from Carpenter.' Hyde’s mortgage was subsequent to that of Benson, and he was interested in the redemption of the •property, not only under the bank decree, but also under Benson’s mortgage. It seems to us that the transaction between Carpenter and Hyde was with reference to the redemption of the property under that decree ; it was the equity of redemption in, and not the legal title to, the premises that constituted the subject of the contract between them. This being so, it is not material under the circumstances whether Hyde was or was not cognizant of said agreement between. Carpenter and Benson, at the time he took said assignment. Hyde being interested as subsequent mortgagee, could, by consent of Carpenter, redeem the property by paying the decree. And by the consent of Carpenter, Hyde did pay the decree ; he redeemed the property under that decree; but the redemption opened the decree and gave to the mortgagees, to the assignee of the bank or treasurer’s decree, and to all persons interested in the property, their respective rights according-to the priority of their respective equities in the premises. Wo are of opinion that the orator is entitled to the relief prayed for in his said bill of complaint. The pro forma decree of the chancellor is reversed and the cause is remanded to the court of chancery with instructions that a decree be entered for the orator that, unless the said Cowdery and wife, or the said Hyde, shall elect to pay and do pay to the orator, for the benefit ■of the estate of said Benson, the amount due on the three promissory notes to said Benson, secured by said mortgage as set forth [503] in said bill, and tbe orator’s costs of this suit, within such time as the court of chancery shall order and direct, he the said orator be allowed to redeem the said property under said treasurer’s decree, so assigned to said Hyde, by paying the sum due in equity therein, with the interest thereon; the rents and profits of the premises since possession was taken under the decree so assigned to said Hyde, and the amount of insurance money paid for loss on buildings embraced in said mortgage, to be ascertained and deducted from said last mentioned decree, in determining the amount due said Hyde thereon.