Burnet v. Denniston

| New York Court of Chancery | Jan 1, 1821

The Chancellor.

The three first plaintiffs and the heirs of John M‘Cloughry, who was one of the plaintiffs in the original bill, seek to redeem the premises, being about 70 acres of land purchased and possessed by the defendant W. G. Denniston. Those three plaintiffs claim to be judgment creditors of John M'-Cloughry, the mortgagor, by virtue of an assignment of a judgment of J. Goldsmith, against John M‘C., and they claim to be subsequent mortgagees, by virtue of a deed to them from John M‘C., of the 70 acres, and a certificate from them that the land was to be released on the payment of 111 dollars, with interest. Under this title they attempted to redeem those premises by a tender to George Denniston, the mortgagee, of the amount due on the two mortgages to him from John MlC., and of the costs and expenses of advertising the land for sale under a power contained in the mortgages. There is no dispute as to the fact of the tender, and of the requisite amount, prior to the sale, and of the refusal by G. D. to accept the money and suffer the redemption, except upon the condition of paying another mortgage of John M‘C., to him upon other land, and a book debt against a grandmother of the said John M‘C. The condition was not acceded to, and G. D., the mortgagee, sold the land to his son the defendant W. G. D. for 10 dollars, who took possession, and has held the land to this time.

There can be no doubt that the plaintiffs who made the tender were entitled to redeem, and that the condition imposed by G. D., was unlawful and unjust. The further claims set up by G. D. if well founded against John M‘C., were not a charge upon the mortgaged premises, or such, of which these plaintiffs, as subsequent incumbrancers, had notice, or were bound to regard. The mortgage had no right to tack another debt secured by a mortgage upon other lands, to the two mortgages sought to be redeemed by a subsequent judgment and mortgage creditor. And there is good reason to conclude that the claim under the mortgage on other lands had been already extinguished, for G. D. had purchased, in 1796, and about three years and a half after the date of the mortgage so interposed, the equity of redemption from the mortgagor himself to the lands so covered by the third mortgage. The deed under which he took the equity of redemption was with full covenants, and contained a consideration expressed of £73 4s. when the original mortgage debt thereon was only £25. Without very precise proof to the contrary, (and we have none,) the presumption is, that the parties intended that the charge should merge in the estate, and was settled when the purchase was made. The presumption is stregthened by the fact, that from 1796, when the equity was purchased, down to March, 1803, when the claim was set up against the plaintiffs, the case is silent as to any demand or notice of that debt. There is equal reason to conclude that the book debt claimed, was not a subsisting debt even against the estate of Mary M‘Cloughry. It was a debt of the date of the year 1779, when Mary M‘C. died, and twenty-five years before the tender; and G. D. was her executor and son-in-law, and as we have no account of his administration, the presumption is, that the book debt, if true originally, was satisfied by him out of her personal estate, for it is in proof that she possessed personal estate.

The obstacles to a redemption set up by the mortgagee, G. D. at the time of the tender, were accordingly unlawful and groundless, and rendered the subsequent sale irregular and void.

Nor can the defendant, W. G. D.} be entitled to protection as a bona fide purchaser, without notice. It is in proof by two witnesses, that the plaintiffs, or one of them, was present at the sale, and in the presence of the defendant, W, G. D., forbade the sale, and stated publicly the right of tfi© plaintiffs, and the fact of the tender. The defendant, W. G* D., was a son of G. D. the mortgagee, and bid only the sum of 10 dollars, and the mortgagee insisted as a condition of the sale, that the money on any bid should instantly be paid down. There is very good ground, from these circumstances, to conclude that the sale was colourable merely, and collusive between the father and the son ; and the latter is not entitled to the character of a bona fide purchaser for a valuable consideration, without notice.

The sale was irregular and void in other respects. The advertisement of sale contained false assertions, and was an imposition upon the public, and a fraud upon the rights of all concerned. It stated, that the 70 acres were to be sold for default of payment of three several mortgages given upon that land, to secure those payments. One of these mortgages was the third one, already mentioned, upon other lands, being 11 acres and a garden spot, and confessedly not the 70 acres in question. There were, therefore, but two mortgages upon the land to bé sold. Such a false allegation tended to deceive the public as to the extent of the incumbrances, and to deter purchasers from bidding. Another defect in the advertisement was, that no place of sale was designated, and the public had no certain and authentic evidence, as the statute intended, of the place of sale. It is, likewise, worthy of notice, that the power inserted in the third mortgage thus intruded upon the public, was void, for the mortgagor was not of twenty-five years of age when the mortgage was executed. This is clearly proved. From all these circumstances, the conclusion is clear and irresistible, that the sale creates no bar to the right of the plaintiffs to redeem.

The objection to the title of the plaintiffs as creditors of John M‘C., and as legal representatives of John M‘C., is without any foundation. He was seized in fee, at the time of Ms death, subject to the incumbrances which are stated In the case. The devise of the land was to him in fee, but If he should die without an heir, then the land was to go to James MiChughry, the defendant. These words most clearly created an estate tail, which was turned by our statute into a fee simple absolute. The devise over could not take effect as an executory devise, for John M‘C. could not die without an heir, living James M‘C. The limitation over was impracticable and absurd as an executory devise; and besides, it was too remote, and necessarily meant an indefinite failure of issue. The only reasonable construction, and one conformable to settled rules, is to hold it to have been an estate tail, turned by statute into an estate in fee.

I shall, accordingly, declare, that the plaintiffs, who are judgment and mortgage creditors, are entitled to redeem the 70 acres covered by the two mortgages, upon paying the amount due thereon; and that the claim of G. D. to set up a mortgage debt upon other lands, and a book debt against Mary M'Chughry, as a condition of such redemption, was unwarranted and unlawful, inasmuch as the case warrants the presumption and conclusion of law, that these debts were paid ; and if not paid, the plaintiffs, who were such creditors, and who had no previous notice of them, were not bound to pay them. And I shall further declare, that the sale by G. D. was unlawful and fraudulent, because the notice of sale contained a false assertion, that these 70 acres were covered by a third mortgage, which was upon other lands only, and because no place of sale was specified in the notice, and because the power to sell under the third mortgage upon other lands, was, in itself, null and void, and because the sale was made, after a tender of the sum due upon the two mortgages on the 70 acres, with the costs. And I shall further declare, that W. G. D., the defendant, was a purchaser chargeable with notice of the right of the plaintiffs, and of the tender ; and even without notice, he would have been a purchaser, under the circumstances of the sale, subject to the right of redemption of the plaintiffs; and that John M(Cloughry, the original plaintiff, died seized in fee of the said mortgaged premises, subject to the incumbrances chargeable thereanc] t¡lat t¡le other plaintiffs are his lawful heirs, entitled to the same rights. And I shall direct a reference to a master, to state and report the amount due oh the two mortgages, and the rents and profits which have, or might have been received by the defendant, W. G. D., and the value of the beneficial and permanent improvements now existing, and made by him thereon, and the injury, waste, and deterioration, which he may have committed, or suffered to be done, &c.

Decree accordingly.