Townsend Savings Bank v. Munson

Pardee, J. The two suits before us are an action at law by the Townsend Savings Bank against L. E. Munson upon the promissory note of the latter, and a petition for an injunction against the prosecution of the suit by Munson against the savings bank. Upon the facts found by the court below Munson claims that the savings bank accepted one Wood as its debtor in his place, and thereby released him from his liability on the note, and that if this be not so, he is released from his obligation by the act of the savings bank in quit-claiming to Wood a large part of the real estate security [398] which he had given it in the first instance and which he had conveyed to Wood subject to the mortgage to the savings bank. But, as to the first point, it is found that the bank did not in terms agree to release Munson. His arrangement with Wood did not of its own force substitute the latter for himself as the debtor to the bank contrary to its will; nor are the reception of interest from and the quit-claim to Wood in legal effect equivalent to a contract by it to make a substitution; therefore we cannot impute such contract to it. These acts are.quite consistent with the retention of its hold upon himself both in deed and in intent; they import no more than its willingness to receive interest from Wood if he tendered it. The value of the land mortgaged by Munson to the savings bank is found to have been, at the time of the hearing, from three to four dollars per front foot. Assuming three and one-half dollars to be a fair valuation, the bank holding eighteen hundred and forty-three feet had full security for Munson’s note, amounting at this present to about $3,500. It released fifteen hundred and thirteen feet to Wood, retain, ing three hundred and thirty feet, worth at the price affixed to it in the finding $1,155; and has brought an action against Munson for the unsecured balance of his note; urging as grounds for recovery, first, that by joining Mrs. Munson in the execution of a quit-claim to Wood of a certain portion of the land previously quit-claimed to him by the bank there resulted the payment by Wood of $4,250 upon his note to Mrs. Munson; second, that as a consequence of the quit-claim by the bank Mrs. Munson’s mortgage advanced from the second to the first rank upon the portion of land thus released. But, first, these reasons proceed upon an assumption which has no fact underlying it. There is no finding that Munson is the owner of the sum represented by Wood’s note to Mrs. Munson; second, conceding that he is, the claimed conclusion does not follow. If the bank had retained under mortgage the entire piece of land it would have paid Munson’s note in full, together [399] with about $3,000 upon Wood’s note to Mrs. Munson. Thus Munson would have had the benefit of the entire piece of land. If Mr. and Mrs. Munson had not supplemented the quitclaim from the bank by one from themselves the land would have paid $1,155 upon his note to it, and about $5,300 upon Wood’s note to Mrs. Munson; and he would, as upon the former supposition, have had the benefit of the entire piece, and no more. That which would have been added to the security for Mrs. Munson’s note would have been taken from that for his own. Therefore the quit-claim by the bank, of itself, without reference to the subsequent transactions between Mr. and Mrs. Munson and Wood, gave no additional strength to Munson’s position. Again, Munson having mortgaged land to the bank of sufficient value to pay his note, and having conveyed the equity to Wood upon the assumption by him of payment of that note, there remained to Munson the right to have both the note and Wood’s agreement to pay it protected by that security. If the bank compels him to pay the note, it must restore the security to him; unless it is able to do this it must content itself with the proceeds of the land retained. This rule of law is not suspended in favor of the bank by reason of the payment of $4,250 by Wood upon his note to Mrs. Munson in consideration of the quit-claim from Mr. and Mrs. Munson to him. Eor, the bank assumed the entire responsibility for the quit-claim by itself to Wood of a part of the land mortgaged to it by Munson; the act was without his consent or knowledge even; upon' knowledge, he wa? under no obligation to protest; being a fact accomplished, presumably protest would have been unavailing. Finding Wood in possession of the quit-claim from the bank it was Munson’s privilege to sell to him a supplemental quit-claim for the best price to be obtained for it, without accountability to the bank. The savings bank was not affected by the release. It was not a release from their mortgage; that was already released. It was a release only from the mortgage to Mrs. Munson. The two releases are independent transactions; they have no legal connection. The gain or loss from Munson’s act results [400] wholly to himself; the hank can neither claim a share in the one nor be made to bear any part of the other. We leave out of consideration the fact that the bank through mistake included in the release to Wood the two lots previously sold by Munson to Lynch and Ellis respectively, for Wood released them from the incumbrance; and, if the bank had not quit-claimed to Wood the land would have paid Munson’s note and that would have released them. The quitclaim by the bank of these two lots formed no part of the consideration for which Wood made the payment of $4,250 upon his note to Mrs. Munson, for he did not know until after he had made the payment that these lots were included. It is not therefore made certain by the finding that either party can claim anything as against the other upon this part of the transaction. The Superior Court is advised to render judgment for the defendant in the action at law, and to make permanent the temporary injunction granted upon the bill in equity. In this opinion the other judges concurred.