French v. Burns

Hinman, C. J. We have no doubt that the deed of the 20th of January 1860, from the petitioner to the respondent, Burns, though absolute on the face of it, yet, taken in connection with the parol agreement under which it was executed, and the bond subsequently executed by Burns to French pursuant to that agreement, constituted a mortgage for the security of the advancements both in money and material then and subsequently made by Burns to French. Cases of this sort are very numerous in our own reports and elsewhere, and the rules applicable to them are so well settled as to require but little to be said in respect to them. The rule that an absolute deed, if intended as a security for a debt, is to be regarded as a mortgage, is too well known to require the citation of authorities in support of it. It is sufficient to say that this court has acted upon it in the recent cases of Brainerd v. Brainerd, 15 Conn., 575, Jarvis v. Woodruff, 22 Conn., 548, and Mills v. Mills, 26 Conn., 213, and the principle was fully discussed and applied by the Supreme Court of the United States in Russell v. Southard, 12 How., 139. This deed, then, having been originally given as security for a debt, was at the time a mortgage; and nothing has occurred between the parties to it to change its character. It therefore still retains its original character; and the maxim, “ once a mortgage always a mortgage, ” applies to it. And in this case there is no necessity for resorting to parol evidence to show its character, since the parol agreement made at the execution of the deed was subsequently carried into [364] effect by the execution of the bond by Bums in pursuance of that agreement. Nor have we any doubt that Mrs. Fisher, who took her deed after she had notice that the petitioner claimed an interest in the property and a right to redeem the same, and that the interest which her grantor took by his deed was intended only as security for advancements made by him, must be held to have taken her deed of the property charged with the same equities in favor of the petitioner tli'at it was charged with in the hands of her grantor. Upon this view of the case, it would seem that the proper decree would be £uch as the petitioner requests — merely to, authorize him to redeem upon his paying up the incumbrances upon the property. But under the circumstances of the case this would be a hardship to Mrs. Fisher, in depriving her of all benefit arising from the valuable improvements she has made upon the property; and would also enable the petitioner to obtain the benefit’ of those improvements without paying any thing for them. We have therefore examined the case with care, in order to come to a result that will, we think, do more exact justice to the parties. It was correctly said in argument that a mortgagee in possession has no right without consent of the mortgagor to further charge the property with unnecessary improvements, thus making it more onerous for him to redeem. And it was claimed that the notice to Mrs. Fisher before her purchase subjected her to the charge of acting in fraud of the petitioner’s rights. In a certain legal sense this may be so, since she undoubtedly had such notice as to put her -upon enquiry, and therefore subjected her to such notice as by the proper enquiry she might have acquired. Still there is nothing in the finding to show that she did make enquiry, or that she or her husband as her agent were guilty' of any moral fraud. They undoubtedly trusted too confidingly to the assurances of title made by their grantor, Burns, and relied too much upon the security arising from his deed of warranty; but as there was no moral obliquity either in her or her agent, and as they undoubtedly thought they had a perfect title, we do not think they ought [365] to be subjected to the loss of the improvements made by them, if they can be protected in them without doing injustice to the petitioner. And in this case we think this can be done. It was said, indeed, by the petitioner’s counsel that the property in dispute was the petitioner’s homestead and mansion house, and that he desired to retain it as such. But the finding shows that at the time Eisher took possession he was endeavoring to sell it; and at the time he demanded the title of Burns, and offered to pay up the incumbrances in order to obtain it, he only wanted it for the purpose, as we understand, of immediately passing over the title to another party to whom he had bargained to sell it, for a price larger than Fisher had agreed to give for it. If then he is paid all that the property would have brought him at the time he demanded the title, he will be placed in the same condition that he would have been had Burns then transferred the title to him, and this, while it will do exact justice to him, will work no unnecessary hardship to Mrs. Fisher by depriving her of the benefit arising from her improvements upon the property. And under the circumstances of.the case, exact justice to all parties can be done in no other mode. We have therefore come to the conclusion to advise the Superior Court that the original deed to Burns conveyed only a mortgage interest in the property; and that that is the interest now held by Mrs. Fisher; and that the petitioner be permitted to redeem the premises by paying up the incumbrances, unless the respondents, or some of them, within such time as the court shall limit for that purpose, pay to the petitioner the difference between the sum of thirty-seven hundred dollars, the value of the property at the time a reconveyance of it was demanded, and the amount of the incumbrances then upon the property, with the interest on such balance ; and that the respondents also pay the petitioner his costs. In this opinion the other judges concurred.