Cottiero v. Ifkovic

Heiman, J. The defendant Chemical Bank appeals from the judgment of strict foreclosure rendered by the trial court.1 On appeal, the defendant claims that the trial court improperly determined that its mortgage was not entitled to priority over the plaintiffs’ mortgage because (1) the defendant is entitled to equitable subrogation, (2) the plaintiffs were unjustly enriched, (3) the plaintiffs’ mortgage secured an antecedent debt, and (4) the plaintiffs received their mortgage after the grantor had conveyed the deed to the land to the defendant Donald W. Ifkovic, Jr. We affirm the judgment of the trial court. The parties stipulated to the following facts. In 1986, Harry P. Sund, Leonard Cottiero and Jacqueline Cottiero formed a partnership named Sundcott for the purpose of purchasing property to start a restaurant in Branford to be called “Harlow’s.” The restaurant opened but went out of business in 1988, eighteen months after opening. Sund and the Cottieros accrued trade debts of approximately $190,000 by the time the restaurant closed. The two parties agreed to divide the indebtedness. The Cottieros paid their share of the debt. The Cottieros also agreed to lend Sund $95,000 to pay his half of the debt. On May 17, 1989, Sund delivered a note and two mortgages to the Cottieros that evidenced the $95,000 debt owed by Sund to the Cottieros and gave the Cottieros an interest in property owned by Sund at 34 Pawson Trail and 3 Waverly Road in — 684 — Branford. At the time of this transaction, Branford Savings Bank held a mortgage on the property located at Waverly Road. On May 24, 1989, Sund made an interest payment on the note to the Cottieros. On June 12, 1989, Sund sold the property located at 3 Waverly Road to Donald W. Ifkovic, Jr., conveying title by warranty deed. Ifkovic paid Sund $235,000 for the property, $152,282.15 to Branford Savings Bank in satisfaction of their mortgage and the balance to Sund. Ifkovic gave Chemical Bank a mortgage on the property for $184,000. On June 15, 1989, the Cottieros accepted the mortgages delivered by Sund and caused the mortgages to be recorded in the Branford land records. On June 20, 1989, eight days after delivery, Chemical Bank had its mortgage from Ifkovic recorded in the Branford land records. Sund paid the Cottieros until February, 1990, and filed bankruptcy on May 10, 1990. By complaint dated April 26, 1991, the plaintiffs sought to foreclose on the two properties. Ifkovic and Chemical Bank challenged the validity of the plaintiffs’ mortgage and the priority of the plaintiffs’ debt to their mortgage on the Waverly Road property. They claimed that the plaintiffs’ mortgage was not valid because the mortgage was given for an antecedent debt and not based on sufficient consideration. They also claimed that their warranty deed was filed in the land records within a reasonable time after its execution, even though it was filed after the Cottieros had filed their mortgage, and, thus, they claimed priority over the Cottieros’ mortgage. After a full evidentiary hearing, the trial court found Sund “to be astute yet not to be believed” and believed the Cottieros’ testimony that Sund never told them of his pending sale of the property to Ifkovic. Further, the trial court found that the Cottieros’ mortgage did not secure an antecedent debt because the mortgage “finalized the transaction — 685 — between the Cottieros and Sund. The security given was not for previous loans. It was one transaction that took two months to finalize that under the present circumstances of the facts in this case was not unreasonable.” The trial court also found that Chemical Bank did not file its mortgage within a reasonable time. Since the bank did not file the mortgage until June 20,1989, the trial court found that the mortgage was not filed within a reasonable time. On the basis of these findings, the trial court rendered a judgment of strict foreclosure of the property located on Waverly Road. Only the defendant bank appealed. I The defendant claims that the trial court improperly determined that its mortgage was not entitled to priority over the plaintiffs’ mortgage under the doctrine of equitable subrogation. We are unable to review this claim because it was not properly preserved in the trial court. Although the defendant pleaded equitable subrogation as a special defense, the trial court’s memorandum of decision makes no mention of this issue. “Our rules of practice require that the trial court state its decision on each issue in the case and its conclusion as to each issue in the case and its conclusions as to each claim of law raised by the parties. Practice Book § 4059. . . . Since this issue was presented to the trial court in the [defendant’s] pleadings ... we conclude that it was raised within the meaning of Practice Book § 4059. . . . The [defendant], however, did not assign as error the trial court’s failure to rule on this claim of law nor did [it] seek, by motion for articulation in the trial court . . . to have the trial court address this issue.” (Citations omitted.) McLaughlin v. Bronson, 206 Conn. 267, 277, 537 A.2d 1004 (1988). If the trial court had refused to articulate the ruling on the claim of law, — 686 — the defendant could have sought review by this court of the adequacy of the trial court’s memorandum of decision. Holmes v. Holmes, 32 Conn. App. 317, 321, 629 A.2d 1137, cert. denied, 228 Conn. 902, 634 A.2d 295 (1993). “It remains the appellant’s responsibility to furnish an adequate appellate record. Practice Book § 4061. Because the deficiency of the record regarding this claim should have been remedied by the [defendant], we will not remand the case to the trial court for rectification.” Southington v. State Board of Labor Relations, 210 Conn. 549, 564, 556 A.2d 166 (1989); McLaughlin v. Bronson, supra, 278. The trial court decided only that the Cottieros’ mortgage did not secure an antecedent debt and that they were not unjustly enriched by the foreclosure. The trial court’s memorandum of decision on the issue of unjust enrichment does not cure the lack of discussion on equitable subrogation. “Subrogation is . . . a remedy which equity gives to aid in the enforcement of a right either legal or equitable and if there is a right the application of the remedy does not require the existence of any other ground of equitable relief.” Home Owners’ Loan Corp. v. Sears, Roebuck & Co., 123 Conn. 232, 241, 193 A. 769 (1937). “The object of subrogation is the prevention of injustice. It is designed to promote and to accomplish justice, and is the mode which equity adopts to compel the ultimate payment of a debt by one who, in justice, equity, and good conscience, should pay it.” 10 S. Williston, Contracts (3d Ed. Jaeger 1970) § 1265. On the other hand, “[u]njust enrichment applies ‘wherever justice requires compensation to be given for property or services rendered under a contract, and no remedy is available by an action on the contract.’ 5 Williston, Contracts (Rev. Ed.) § 1479. ‘A right of recovery under the doctrine of unjust enrichment is essentially equitable, its basis being that in a given situation it is contrary to equity — 687 — and good conscience for one to retain a benefit which has come to him at the expense of another. Franks v. Lockwood, 146 Conn. 273, 278, 150 A.2d 215 [1959]; Schleicher v. Schleicher, 120 Conn. 528, 534, 182 A. 162 [1935].’ Connecticut National Bank v. Chapman, 153 Conn. 393, 399, 216 A.2d 814 [1965].” Providence Electric Co. v. Sutton Place, Inc., 161 Conn. 242, 246, 287 A.2d 379 (1971); Burns v. Koellmer, 11 Conn. App. 375, 383, 527 A.2d 1210 (1987). Thus, an analysis of the defendant’s claim under the doctrine of unjust enrichment cannot be interpreted to include equitable subrogation. Therefore, there is no adequate record on which to afford review of this claim.2 II The defendant also claims that the trial court improperly determined that its mortgage was not entitled to priority over the plaintiffs’ mortgage under the doctrine of unjust enrichment. Since the defendant failed to preserve this claim properly in the trial court, we are unable to review it. — 688 — Chemical Bank did not raise this issue in the trial court. The defendant Ifkovic did argue an unjust enrichment claim. The claim by Ifkovic, however, does not preserve the claim for Chemical Bank. Practice Book § 285A provides in relevant part: “If a party intends to raise any claim of law which may be the subject of an appeal, he must either state the same distinctly to the court before his argument is closed or state it in a written trial brief. If this is not done, it will not be the duty of either the trial court or the appellate court to decide the claim.” (Emphasis added.) Similar language contained in Practice Book § 315 has been interpreted not to allow a defendant to rely on the claim of another defendant to preserve a claim of law. Howe v. Neal, 145 Conn. 187, 190, 140 A.2d 318 (1958).3 Thus, Chemical Bank did not properly preserve this claim in the trial court and we are unable to review it. Ill The defendant next claims that the trial court improperly determined that its mortgage was not entitled to priority over the plaintiffs’ mortgage because the plaintiffs’ mortgage secured an antecedent debt and Sund executed and delivered a mortgage to the plaintiffs without possessing an interest in the land. It has long been the law in Connecticut that the validity of a mortgage does not depend on the moment that the underlying debt was created. “It is immaterial whether the indebtedness was created at the very instant the mortgage was executed or had been in existence for some time before that time. In either event the indebtedness was then in existence.” Thomaston — 689 — Savings Bank v. Warner, 144 Conn. 97, 100, 127 A.2d 495 (1956); see also Sadd v. Heim, 143 Conn. 582, 586, 124 A.2d 522 (1956); Hart v. Chalker, 14 Conn. 77, 79 (1840). Thus, whether the mortgage secured an antecedent debt is immaterial to the determination of the subordination of the plaintiffs’ mortgage. The defendant also claims that the plaintiffs’ mortgage is not entitled to priority because Sund had transferred his interest in the land to Ifkovic prior to his delivery of the mortgage to the plaintiffs. “Our recordation statute, now [General Statutes] § 47-10, has consistently been interpreted as providing for a reasonable period within which to record a deed of conveyance. That construction finds support in its provision that no conveyance can be effective against subsequent innocent parties ‘unless recorded on the records of the town in which the land lies.’ (Emphasis added.) [General Statutes § 47-10]. The use of the word ‘unless’ as opposed to ‘until’ connotes legislative recognition of the proposition that rights conveyed by a deed may effectively accrue a reasonable time prior to its actual recordation. Since Beers v. Hawley, 2 Conn. 467, 469 (1818), construing predecessor statutes with similar texts, this court has permitted a mortgage deed, if recorded within a reasonable time of its execution, to take priority from the date of its delivery, even as to liens recorded prior to the recording of the deed but subsequent to its execution. Apstein v. Sprow, 91 Conn. 421, 99 A. 1045 (1917); Hartford Building & Loan Assn. v. Goldreyer, 71 Conn. 95, 99-100, 41 A. 659 (1898); Goodsell v. Sullivan, 40 Conn. 83, 85 (1873); see 1 Z. Swift, A System of the Laws of the State of Connecticut (1795) p. 308 (‘every purchaser of land shall have a reasonable time to procure his deed to be recorded’). “Because the wording of § 47-10 has remained in essentially the same form since the 1800s, we may presume legislative acquiescence in our interpretation of — 690 — the mortgage lien statute. ‘[I]ts subsequent nonaction may be understood as a validation of that interpretation.’ Phelps Dodge Copper Products Co. v. Groppo, 204 Conn. 122, 134, 527 A.2d 672 (1987), quoting Ralston Purina Co. v. Board of Tax Review, 203 Conn. 425, 439, 525 A.2d 91 (1987).” Farmers & Mechanics Savings Bank v. Garofalo, 219 Conn. 810, 816-17, 595 A.2d 341 (1991). Further, a mortgage is considered a conveyance of land. Second National Bank v. Dyer, 121 Conn. 263, 267, 184 A. 386 (1936). Thus, the critical factor is whether eight days is a reasonable time for Chemical Bank to file their mortgage in determining the effect of the delivery of title from Sund to Ifkovic and the subsequent delivery of the mortgage to Chemical Bank on the priority of the plaintiffs mortgage. “ ‘[W]hat is a reasonable time is a question of fact for the trial court, and its finding is conclusive.’ . . . Numerous cases have addressed the issue of what constitutes a reasonable time period for recordation of a real property deed so as to give a mortgagee or purchaser priority over intervening lienholders. Short delays ranging from thirty-one hours; Goodsell v. Sullivan, supra, [40 Conn. 85]; to one day; Hartford Building & Loan Assn. v. Goldreyer, supra, [71 Conn. 99-100]; or to two days; Apstein v. Sprow, supra, [91 Conn. 424]; have been held to be reasonable. By contrast, delays measured in months and years have been held to be unreasonable. Pond v. Skidmore, [40 Conn. 213, 222 (1873)] (eight months); Rees v. Hemisphere Publishing Corporation, 11 Conn. Sup. 403, 407 (1943) (four and one-half months); Burgey v. Bochinski, 16 Conn. Sup. 427, 428 (1950) (twelve years). These cases do not provide guidance, as a matter of law, about the reasonableness of a[n eight] day delay in recordation. ‘ “[T]he length of time that is to be considered reasonable, has never been ascertained, and perhaps cannot be, and must be left according to the special circum — 691 — stances of each case.” ’ Beers v. Hawley, supra, [2 Conn. 471] quoting 1 Z. Swift, supra, p. 308.” Farmers & Mechanics Savings Bank v. Garofalo, supra, 219 Conn. 820-21. The trial court found that the eight day delay by Chemical Bank was not reasonable. The trial court based its decision on the testimony of an expert in the field of real estate law. We will not disturb this finding. Thus, the conveyance from Sund to Ifkovic and the subsequent mortgage to Chemical Bank is not effective against the plaintiffs and the plaintiffs’ interest is entitled to priority over the defendant Chemical Bank’s interest. The judgment is affirmed. In this opinion Foti, J., concurred. Footnotes [1] The plaintiffs are Leonard Cottiero and Jacqueline Cottiero. The defendants in the foreclosure action are Donald W. Ifkovic, Jr., Teddy VanDerHorst, Johannes VanDerHorst and Chemical Bank. Only Chemical Bank appealed. We refer in this opinion to Chemical Bank as the defendant. [2] The dissent asserts that the trial court did address a claim of equitable subrogation, thereby providing an adequate record, by including in its memorandum of decision the statement that “it would be unfair and unjust to rearrange the priorities in this case to give the bank, a later recorded mortgage, a superior right of enforcement because of the unexplained and unreasonable recording of its mortgage.” Starting with the assertion that this sufficiently provides an adequate record, the dissent then asserts that we refuse to review the claim because the trial court failed to use, in “talismanic fashion,” the phrase “equitable subrogation.” This distorts the meaning of the court’s opinion. What we do require, unlike the dissent, is a collection of meaningful words in the trial court’s memorandum of decision that we can properly interpret as a legal discussion of the claim, rather than to grasp at legal straws in an attempt to reach, perhaps, a more satisfying result. The paragraph in the trial court’s opinion that the dissent points to as evidence of the resolution of the equitable subrogation issue, we conclude, is nothing more than the trial court’s discussion as to whether the bank recorded its mortgage within a reasonable time. We decline to extend that statement beyond its logical significance. [3] Practice Book § 315 provides in pertinent part: “The supreme court shall not be bound to consider as error as to the giving of, or the failure to give, an instruction unless the matter is covered by a written request to charge or exception has been taken by the party appealing immediately after the charge is delivered. . . .” (Emphasis added.)