Cohn v. Plass

The opinion of the court was delivered by Swayze, J. The important question in the case is whether the conveyance by VanBuskirk to the complainant conveyed a good title to the whole tract, including the seventeen undivided one-hundredths (17/100) conveyed by various grantors to Plass in 1891, and by Plass to Packard in 1913. The complainant at different stages in the case has relied on three inconsistent theories to sustain VanBuskirk’s title—(1) that the title acquired from his ancestor never passed out of him; (2) that he acquired title after 1881 by adverse possession; (3) that he had a perfect title as mortgagee in possession by lapse of time. 1. The replication sets up that the deed from Edward VanBuskirk to his numerous grantees, who may be called the liquor dealers, was fictitious, and that John VanBuskirk continued in possession as owner and mortgagee. If, in fact, the deed from Edward to the liquor dealers was fictitious, that could not affect the validity of the deed from' John to Edward, and as Edward never reconveyed to John, the advisory master could not be jus — 156 — tified in sustaining the title conveyed by John to the complainant in 1912, on the theory that he was conveying the title acquired from his ancestors. The paper title, if the deed to the liquor dealers was fictitious, would be in Edward still. To decide the case on this ground would be to take too narrow a view and would not settle the rights of the parties. It is, indeed, vital to the defendant Packard’s claim to sustain the deed from Edward to the liquor dealers. We think the evidence malees it entirely clear that the deed was valid and effectual to convey the title. John VanBuskirk was at the time, as Judge Hudspeth testified, in politics, wanted to make political capital, and was only too ready to offer the property in order to qualify men as freeholders to sign recommendations for liquor licenses. As he received no consideration for the conveyance, the scheme was to protect him by a mortgage on the property. To accomplish that, he conveyed to his son, Edward, and took a mortgage back, and then Edward conveyed to the liquor dealers subject to the mortgage. The deed to the liquor dealers was delivered to Judge Hudspeth, who had it recorded. The scheme to qualify men as freeholders in this wholesale way fell through. The land was salt meadow and seems to have been of little value. No attention was paid to it for years. Under these facts, we think that Packard had paper title to the undivided seventeen-hundredths of the tract, and that John VanBuskirk had no paper title except as mortgagee unless we go further back and hold his deed to Edward to be fictitious and a mere nullity. This cannot be done. The reasons that are applicable to the deed from Edward to the liquor dealers are equally applicable to the deed from John to Edward. In addition, there are repeated acts of recognition by John of the validity of both deeds. The very fact that he took back a mortgage as security was itself a recognition, since Edward’s conveyance by way of mortgage to John was naught unless Edward had acquired the land by deed from John. John recognized this mortgage as a subsisting lien years afterwards. He not only conveyed to Cohn in 1912 subject to the mortgage, but he assigned the mortgage itself to Cohn and made it an express condition that Cohn’s title, by virtue of the assignment, should not merge into any other title which he might have in the mortgaged — 157 — premises. John not only recognized the validity of his deed to Edward, bnt he also recognized the validity of the deed from Edward to the liquor dealers. In a deed made to Wenner, in 1894, he bounds the land thereby conveyed by “lands now or formerly of the Liquor Dealers Association,” and five years later, in another deed to Wenner, he bounds the land thereby conveyed by “lands known as the liquor dealers’ plot, formerly land of John VanBuskirk.” The use of the word “formerly” is convincing that John, in 1899, recognized by his deed and under his seal that the liquor dealers’ plot did not then belong to him. If John had title to the liquor dealers’ plot in 1912 when he conveyed to Cohn, it was derived either from adverse possession or from possession as mortgagee. 2. He fails to establish either that he had possession or that it was adverse. Ordinarily, the legal title draws to it the possession, and the burden is upon him who asserts an actual possession against the legal title to prove it. The tract in question was two acres of salt meadow. ' The possession relied on was the occasional cutting of salt hay. John himself testified and reiterated that the cutting was between Avenue H and Avenue I, in Bayonne. The tract in question lies between Avenue G and Avenue H. His counsel, after the testimony above mentioned, put this question: “Is it not a fact that it was between G and H, as those avenues are laid down on the map,” and he answered, “I think you are right about that. I have not looked at the map for a good while.” Aside from the impropriety of so leading a question upon a vital point, the answer is of no value; looking at the map could not help him in recollecting where the actual cutting was. The witness Levine did not help. He said he had been cutting some “until the time the Standard took it” (evidently meaning the Standard Oil Company); what the Standard Oil Company took was not the liquor dealers’ lot, but VanBuskirk’s homestead. He also said that the liquor dealers’ plot was far away from Packard’s Digging, while, in fact, Packard’s Digging was in part on the tract. Banbury did testify to some cutting of grass, but he was very indefinite both as to the place and the time. He seems to have thought that he cut all over VanBuskirk’s land — 158 — (which, perhaps, he did). Watson YanBuskirk testified that he wouldn’t say that he went right on the liquor dealers’ plot. The fact is that the land was not marked out so that the witnesses could tell whether they were cutting on the liquor dealers’ plot or not. If, however, possession, in fact, bj John YanBuskirk, had been proved, the complainant would be met by a legal difficulty. The contention throughout was, as the master found the fact to he, that John continued to retain the possession and to occupy the land as he had always occupied it. He was, then, after the deed to Edward and before default in the mortgage, a grantor in possession. Under our law, the mortgage was a mere security until default. Sanderson v. Price, 21 N. J. Law 646, note. This has long been regarded as settled law. Shields v. Lozear, 34 N. J. Law 496, 501; Woodside v. Adams, 40 N. J. Law 417, 422. There was no default in the mortgage for at least six months; the complainant himself avers in his replication that the interest payment became due six months after the date of the mortgage and was paid by Edward, the mortgagor; that no interest has been paid since and that the mortgage is due. Until default whatever possession John held could not have been in his own right. If lie held at all he held in trust for his grantee, Edward, or for Edward’s grantees. He was estopped to deny his own deed, and his possession was the grantee’s possession. Van Keuren v. Central Railroad Co., 38 N. J. Law 165; Bingham v. Kirkland, 34 N. J. Eq. 229 (at p. 236); Rankin v. Coar, 46 N. J. Eq. 566 (at p. 571). Since such possession as he held was in trust for his grantee, and he was estopped by his deed, his possession could not become adverse to the grantee’s cestids que trust, unless John repudiated the trust and assumed an adverse position with notice to the grantees. Such is the well-settled rule as between parties and cestui que trust. Perry Trusts § 863; 1 Lew. Trusts 285. The rule has been applied to cases where the grantor remains in possession of land. Buckholder v. Sigler, 7 Watts & S. 154; Olwine v. Holman, 23 Pa. St. 279; Ingles v. Ingles, 24 Atl. Rep. 677; Schwalbach v. Chicago, M. & St. P. Ry. Co., 40 N. W. Rep. 579; Riha v. Pelnar, 57 N. W. Rep. 51. — 159 — There is no evidence that John VanBuskirk ever gave notice to the liquor dealers that he was claiming adversely to his own grant. His case was rested on an entirely different theory— that the liquor dealers never got any title, since the deed to them was bogus. If that were so, there could be no possession adverse to them, since they would be mere strangers to the title who never had even possession. John VanBuskirk failed to prove title by adverse possession, and in that respect the complainant’s case failed. 3. The third tlieoiy of the complainant’s case is that John VanBuskirk was a mortgagee in possession for so long a time that the equity of redemption is barred by the statute of limitations. Section 18 (Comp. Stat. p. 3170) enacts that if a mortgagee and those under him be in possession of the lands, tenements and hereditaments contained in the mortgage, or any part thereof, for twenty years after default in pajcment by the mortgagor, then the right of equity of redemption therein shall be forever barred. We see no reason to doubt the construction heretofore put upon, this section in the court of chancery. Chapin v. Wright, 41 N. J. Eq. 438. Under that construction, if the mortgagee has possession for twenty years, his title becomes absolute. The question for us is whether the case shows such possession. If we look at it purely as a question of qvidence, it is clear that John VanBuskirk himself never treated his claim under the mortgage as a title that had become absolute by the barring of the mortgagor’s equity of redemption. A mortgage is a deed with a defeasance clause, and unless the terms of the defeasance were strictly performed, the estate of the mortgagee would be-' come absolute upon default but for the relief afforded by equity under the name of “equity of redemption.” When the equity of redemption is once barred, the title under the mortgage deed becomes absolute, and like the title under any other deed. That title is inconsistent with the continued existence of the mortgage as a mere security. John VanBuskirk, however, was so far from treating his title under the mortgage as absolute that he was studious, almost meticulous, to keep the mortgage alive as a subsisting lien. He conveyed to the complainant subject to the mortgage; he assigned the mortgage as a subsisting security, — 160 — and, to make the matter sure, took care to provide that the estate under the mortgage should not merge in the estate under the deed. He could not do otherwise under the theory on which the complainant’s case was based, that he was never out of possession; for if he was never out of possession, his possession must have begun under his ancient title by inheritance, and so continued except as modified by his legal obligations as grantor to hold in trust for his grantee. Such possession was inconsistent with a taking of possession later, after default in the mortgage. There is, moreover, the further difficulty that he would be entering as mortgagee upon his possession as grantor-trustee, and such an entry could not be justified as against his grantee'—cestui que trust—without advising the grantee of the adverse position then assumed. There is a further legal difficulty. Since the right of a mortgagee before default is only that of the holder of a security, he has no right to enter or bring ejectment before the default. The necessary logical result is that his right to possession is not, a-s at common law, tire right of an owner subject only to be defeated by the performance of the condition by the mortgagor, but is only a right of re-entry upon failure of the mortgagor to perform the condition. Before that time, the mortgagor is entitled to the rents, issues and profits, and ,the mortgagee cannot bring ejectment and is not under the obligation to account as a mortgagee in possession. Sanderson v. Price, 21 N. J. Law 646, note; Shields v. Lozear, 34 N. J. Law 496, 501. Before the mortgagee can obtain possession he must enter upon the land. It is elementary that an entry requires publicity. 2 Bl. Com. 311, 312; 3 Bl. Com. 174. No such entry is even attempted to be shown in this case. It is impossible to see how upon the complainant’s theory that John VanBuskirk never went out of the actual possession, there could ever have been an entry by him as mortgagee, much less an entry with the publicity required by the law. We' think, therefore, that the claim of title by twenty years’ possession as mortgagee also fails the complainant. The necessary result is that the decree adjudging the title to the whole of the land to be in the complainant must be reversed. It does not follow that the title to the undivided seven — 161 — teen-hundredths should be decreed to be in the defendant. No issue was made of the complainant’s right as mortgagee to foreclose his mortgage. It may be that his right of entry has not been barred. Colton v. Depew, 60 N. J. Eq. 454. The result is that as the complainant has established no title, and the title of the defendants may possibly still be subject to the mortgage, the present bill should be dismissed, with costs. For affirmance—None. For reversal—The Chief- Justice, Garrison, Swayze, Trenciíard, Parker, Bergen, Minturn, Ivalisci-i, Black, Yredenburgil, White, Terhune, Heppeni-ieimer, Williams —14.