Blake v. Williams

Eastman, J. .By the agreement between the parties, it becomes necessary to determine in the first place whether the defendants are in a position to show that the mortgage held by the complainants was without consideration, and made with a view of perpetrating some fraud. It is not contended that any fraud has been practised between any of the parties in this suit upon each other. It is admitted that the first mortgage is good, and that no one of the complainants or defendants has been defrauded by the making or transfer of the second. It is to he observed, also, that here is no complaint made by creditors or third persons. Silas Lunn, who took the quitclaim deed of Learney in 1853, is privy with Lear-ney, and bound by the covenants in the mortgages, which were both made and recorded in 1842. The position, then, is this, — that parties to a mortgage, made for the purpose of defrauding third persons, may, as between themselves, show the intended fraud, to make void the mortgage. It is manifest that such a position cannot be maintained. The parties should be left where they have left themselves, and the law will aid neither of them. When creditors or innocent persons shall complain, the consideration may then be inquired into. The transfer of the notes by Draper to Chubbuck was good. It is unnecessary to consider whether it was a donatio causa mortis, because there was a good consideration for the transfer— the money let and the service rendered. Mr. Williams, as administrator, therefore, has no legal claim upon the notes. The transfer, too, by Mrs. Chubbuck to Lunn and Cole was also good. Her deed was invalid, because she had no power to make it; but she had due authority to sell the notes, and the mortgage passed as incident to the notes. Southerin v. Mendum, 5 N. H. 420 ; Rigney v. Lovejoy, 13 N. H. 247; Wilson v. Kimball, 7 Foster 300. The defendants, Lunn and Cole, holding these notes and mortgage, should give an account of the amount due to the subsequent mortgagees, or their assigns, that the same may be paid. They are as much bound to give an account as the original mort [43] gagee. Rev. Stat., ch. 131, sec. 16. And Silas Lunn, who holds the right of Learney- to redeem, should pay the second mortgage, or the right to redeem should be foreclosed. This is the only way in which equity and right can be done between the parties. The quitclaim from Learney to Lunn, in 1853, could not cut off the second mortgage. It could not operate as a foreclosure of the first mortgage. Both mortgages were recorded in 1842, eleven years before the quitclaim to Lunn. The quitclaim simply placed Lunn in Learney’s position. We think that the prayer of the bill should be granted, and a decree may be drawn in accordance with these views.