6 Paige Ch. 189 | New York Court of Chancery | 1836
The bill in the first cause is for a foreclosure and sale under a mortgage and for a decree over against Laytin the mortgagor, for any deficiency. The second suit is upon a cross bill by the mortgagor to have the mortgage delivered up and cancelled, and for a return of the money paid by him on account of the purchase of the mortgaged premises, at the time he gave the mortgage for the balance. To the cross bill the defendants therein interposed a plea in the first instance, which was overruled. They then answered, and both causes have been heard together upon pleadings and proofs.
The following facts present the questions to be considered. On the 24th of January, 1828, the complainants in the first suit and defendants in the second, as executors and trustees of the estate of Elizabeth De Peyster, deceased, offered for sale at auction under a power contained in her will, six lots of ground belonging to her estate, three of the lots represented on a map exhibited at the time of the sale as fronting to Broadway between Fourth and Sixth-streets, and the other three adjoining the rear and fronting to Mercer-street. William Laytin became the purchaser of two of the lots, one fronting to Broadway, at the price of $3000, and the other immediately in the rear for the sum of $1300, and paid one half of the purchase money down, and to secure the residue, gave his two bonds and the mortgages in question upon the two lots respectively.
The deeds executed by the executors to Laytin, the purchaser, for the respective lots, state, by way of recital, that Mrs. De Peyster, in her life time and at the time of her death, was seized in fee of the lots, and they purport to grant and convey the same in fee, and all the estate, right, title and interest, which Mrs. De Peyster had at the time of her death, and which the executors as grantors then had by virtue of the will or otherwise. Each deed- contains a covenant that they, the executors, “ had not done, committed, or suffered any act, matter or thing whatsoever, whereby to charge or incumber the premises thereby granted, or any part thereof, in title, estate or otherwise however.” The two lots thus sold and conveyed are situated within
The confirmation, as well as the report of the commissioners, proceeded upon the ground that the executors, by their previous sale and conveyance to Whittemore, had impliedly granted a right of way over the land within the bounds of .the contemplated street, previously to the sale to Laytin, and although the fee of that portion of the land was vested in him by his purchase, yet it was of nominal value only; and by that decision, which stands unrevoked, the whole title and ownership in Laytin, as grantee of the complainants in the first suit, and as their mortgagor for half of the purchase money, became extinguished. All this was known to them when they filed their bill, and the propriety of resorting to this court for a decree of foreclosure and sale under such circumstances may be questioned, since nothing remains to be sold towards satisfying the mortgage, and an action at law upon the bonds would have been attended by as beneficial a result in every respect as a decree over against the mortgagor. It is a matter, however, of equitable jurisdiction, and the court is bound to take cognizance of the case, and is authorized to malee a decree in personam, unless the defence set up, or the equities presented by the cross-bill, require me to form a different conclusion. The grounds of defence to the original bill and of relief upon the cross bill, are virtually the same, and depend Upon the consideration whether there is any thing amounting to fraud in the conduct of the executors in selling or conveying the lots in question, or whether there is such a mistake or surprize as entitle the purchaser to have the contract rescinded, or a breach of the covenant against the grantors’ own acts as contained in the deeds, which this court can lay hold of as a means of relief. On the former occasion, when considering the plea of an eviction, interposed to the cross-bill, I was led to remark that there appeared to be no sufficient reasons for imputing aptual or intentional fraud to the executors, and after examining the case more at large up
Representations were made and expectations held out to induce buyers to complete their purchases; which have proved delusive ; but I have no doubt they were made in good faith, and from what Mr. Herring, the acting executor making the sales, deemed at the time to be well founded. Nor does he appear to have wilfully suppressed or concealed any fact which was material to be known in relation to the condition or value of the property as the law, from the decision of the Mercer street case, 4 Cowen, 542, was then understood, which was at that time the only decision bearing upon the subject. The decisions which varied and at length overruled it, are all subsequent to January, 1828. Fraud is, therefore, in my opinion, entirely out of the question, as respects the manner of selling the property or the consummation of the sales by executing conveyances and taking the mortgages. The question of mistake, however; is one deserving of more consideration.
It is first necessary to ascertain how far a mistake has happened ; whether it is mutual, or confined to one party; and then to ascertain its character, whether it be" a mistake of fact or of law ; and its effect upon the contract.
When the executors proceeded to sell and convey the lots in question, there was no mistake on their part about the facts which were afterwards taken advantage of to diminish the value of the property, for they had made the map with reference to Fifth street, and sold lots'by such map in 1822, and the conveyance to Whittemore, describing the land extending from Broadwdy to Mercer street, as bounded on one side by Fifth street, Was their own act And with a knowledge of what they had thus done, they sold to Laytin, not the naked fee of the land subject to the use of Others, but the whole beneficial ownership, id as ample á manner as it was owned by Mrs; De Peyster at the time of her death, for all the purposes of occupancy and improvement as building lots; and for prices corresponding with that object. In these views of the sale, however, they
Now as to the purchaser. It appears from the testimony that, although at the time of the sale he may have been ignorant that any map had been made upon which Fifth street was delineated, or that a street over the land he was buying had ever been or then was contemplated, yet before the purchase was completed he was fully apprized of those facts. His solicitor, while examining the title and ascertaining the true position of the lots, was shewn the map on which Fifth street was laid down at the same time he was verbally assured by Mr. Herring that the street never would be opened,- or if opened, the owner would be paid the full value of the lots. Under these circumstances and with a knowledge that the lots were situated within the space designated for a street if ever the same should be required, he determined to complete the purchase. He also had notice of the Whittemore deed. In his searches it was found on record, and reference was had to it at least for the purpose of ascertaining that it did not include the lots proposed to be conveyed to Laytin. Whether the solicitor examined the record so far as to be actually informed of the fact that Whittemore’s lot was, in its description, bounded by Fifth street, does not distinctly appear; but I think enough is shewn to warrant that conclusion, and that he is fairly chargeable w.ith notice of the whole contents of that deed. He is, then, to be regarded as accepting a conveyance, paying a portion of the purchase money and giving his bonds ’ and mortgages for the balance, with as full knowledge of the facts as the executors possessed. The mistake on his part
As a general rule, this court does not relieve upon the ground of a mistake in matters of law, because every man is presumed to have a knowledge of the law, and the maxim that “ ignorantia juris non excusat” is observed in equity as well as in courts of law. Yet there are cases in which this court will interfere upon the ground of such mistake, to relieve a party from the effect of his contract; as for instance, if one is ignorant of a matter of law involved in the transaction, and the other, knowing him to be so, takes advantage of that circumstance to make the contract, there the court will relieve, though perhaps more properly on account of fraud in the one party than of ignorance of law in the other. So if both parties should be ignorant of a matter of law, and should enter into a contract for a particular object, and the result according to law should be different from what they mutually intended, there, on account of the surprise or immediate result of the mistake of both, there can be no good reason why the court should not interfere to prevent the enforcement of the contract and to relieve from the unexpected consequences of it. To refuse, would be to permit one party to take an unconscientious and inequitable advantage of the other, and to derive a benefit from a contract which neither of them ever intended it should produce.
In Hunt v. Rosemaniere, (1 Peters’U. S. Rep. 1,) the supreme court of the United States, in refusing to reform an instrument on the ground of mistake from ignorance of law? were particular to say that they did not mean to lay it down as a rule that in no case will a court of equity relieve against a plain mistake arising from ignorance of law. And
I think these cases are sufficient to establish the correctness of the position, that a contract entered into under a mutual misconception of legal rights, amounting to a mistake of law in both contracting parties by which the object and end of their contract according to its intent and meaning cannot be accomplished, is as liable .to be set aside or rescinded, as a contract founded in mistake of matters of fact; and that the court has the same power to grant relief in the first case as in the last. The case I am considering is clearly one of that description. The facts were understood, but the law was not; both parties were alike mistaken; the vendors supposed they could give a title, which would confer a beneficial ownership in the land ; this it was their object to do, and the purchaser calculated upon receiving a title which would vest him with an estate and interest for all useful purposes, commensurate with the prices which he agreed to pay. In this they were both disappointed, the law did not admit of it., The vendors had previously de
On the other ground I think the purchaser is abundantly entitled to the aid of this court. Lyon v. Richmond, (1 John. Ch. Rep. 51,) has been much relied upon to shew he is not entitled to relief even upon that ground. Without impugning the general doctrine as there stated, which is undoubtedly correct, it is sufficient to observe that the peculiar circumstances, as already shewn, distinguishes the present case and takes it out of the general rule. Several other facts might be here mentioned to strengthen the equity of this case on the part of Laytin, the purchaser, and to lessen that of the
Contracts are not to be rescinded but in the clearest cases and on the strongest evidence, especially when they have been executed. In regard to real estate particularly, purchasers must, in general, look to their covenants, and cannot be relieved on the ground of failure or defect of title. (Chesterman v. Gardner, 5 John. Ch. Rep. 29. Governeur v. Elmendorf, Id. 79.) Want of notice, though in proper cases a good defence, cannot be set up as a ground of relief, and the respondent’s bill should, therefore, have been dismissed. At all events the relief ought in no view to extend beyond the mortgages. (Frost v. Beekman, 18 John. Rep. 544.) The respondent
From this decision of the vice chancellor the complainants in the original suit who were the defendants in the cross suit appealed.
Supposing every fact-relating to the property had been as fully known to the respondent as to the appellants, the respondent is entitled to the relief decreed below, tin the ground-of a mutual mistake of the law. (Hitchcock v. Giddings, 4 Price, 135, Willan v. Willan, 16 Vesey, 73. Bingham v. Bingham, 1 Vesey, sen. 126. Belt’s Supp. 79. Lansdown v. Landsdown, Mosely, 364. Purey v. Desbourne, 3 P. Wms. 320. Evans v. Llewelyn, 2 Br. C. R. 150. Edwards v. McLeary, Cooper, 307. Leonard v. Leonard, 2 Ball & Beatty, 184, n. (a.) 2 Evans’ Pothier, 369, ed. 1806. Hunt v. Rousmanier, 8 Wheaton, 205, S. C. 1 Peters’ U. S. Rep. 13. Mead v. Johnson, 3 Cow. Rep. 592. Lowndes v. Chisolm, 2 McCord’s Ch. Rep. 455. Lawrence v. Beaubien, 2 Bailey’s S. C. Rep. 623. Hopkins’ Exec. v. Mazyck, 1 Hill. Ch. Cas. 250. Fitzgerald v. Peek, 4 Little’s Rep. 127; Glassell v. Thomas, 3 Leigh’s Rep. 113. Rowlin v. Pollock, 7 Monroe’s Rep. 33. Drew v. Clark, Cooke’s Rep. 374.) The respondent was actually ignorant of those facts, viz, the afets of the executors, by which they had rendered them
The respondent is entitled to the relief given below, in any aspect of the case; whether it is concluded that he was merely ignorant of the facts which had occurred and mistook his contract ; that such facts had been wilfully, or through error, concealed by the executors ; or, that there had been a misrepresentation in point of fact on the part of the executors, either fraudulent or otherwise. (Robinson v. Dickenson, 3 Russell, 399. Story on Equity, 155, 156 et seq. Gillespie v. Moon, 2 John, Ch. Rep. 585. Wilkins v. Woodfin, 5 Munf. 183. Armstrong v. Hickman, 6 Munf. 287. Chamberlain v. Marsh, id. 283, Burrall v. Jewett, 2 Paige, 146. Woods v. Hall, Dev. Eq. Rep. 411. Waters v. Mattingley, 1 Bibb, 244. Robinson v. Gilbeth, 4 id. 183. Thomas v. Todd, 3 Litt. Rep. 337. Carr v. Callaghan, id. 366.) Laytin has no remedy at law, or, at all events, the remedy is doubtful and inadequate. The incumbrance and'the amount thereof having been judicially ascertained, this court can grant relief for the breach of the covenants in the deed. This court has jurisdiction, and the appellants have submitted to it. (Jones v. Gardner, 10 John. Rep. 269. Kellogg v. Ingersoll, 2 Mass. Rep. 97. Prescott v. Trueman, 4 Mass. Rep. 627. Kane v. Sanger, 14 John. Rep. 89. Hitchcock v. Harrington, 6 John. Rep. 290.) The appellant is too late in objecting to the jurisdiction of the court. (Grandin v. Le Roy, 2 Paige, 509. Hawley v. Cramer, 4 Cowen, 727. Abbot v. Allen, 2 John. Ch. Rep. 521. Johnson v. Gere, 2 John. Ch. Rep. 547. Edioards v. McLeary, Cooper, 307. Mead v. Johnson, 3 Conn. Rep. 592. Prescott v. Trueman, 4 Mass. Rep. 630. Kelloggs v. Ingersoll, 2 Mass. Rep. 97. Frisbee v. Hoffnagle, 11 John. Rep. 50.)
I concur with the vice chancellor iii the result at which he has arrived in this case; but I cannot agree with him in the conclusion that the correctness of incorrectness off he decision turns upon the question whether this court can relieve parties against a mistake in law merely, where both acted with a full knowledge of all the facts upon which the question of law arises. Neither do I wish to be considered as expressing any opinion one way or the other upon that point, which will be found to present great difficulties on both sides. If any relief can be had in such a case, it must be upon the ground of a distinction between an actual mistake, proved to have occurred, as in the case of Lawrence v. Beauhien (2 Bailey’s S. C. Rep. 623,) and a mere ignorance of the law which was applicable to the facts of the case, .as known to? both parties. And it must also be where, as in that case,, the party seeking such relief acquired no beneficial interest-by the contract, and where the adverse party has parted-with nothing which was of any real value ; or where the latter has intentionally deceived the other as to the opinion of counsel or the decision of a judicial tribunal upon the question of law.
The vice chancellor supposes the purchaser and his counsel were chargeable with constructive notice of all the facts out of which the question of law arose ; and that the declaration of Herring that the street would never be opened,- and that the lot could not be taken for a street without paying the full value of the land, was a mere mistake in point of law which the purchaser was presumed to know was otherwise:- But if Lay tin was not acquainted with all the facts in the case, that representation was calculated to mislead him in point of fact, even if he had known what the law was in reference to the state of facts as they now appear. In other words, it was tantamount to a declaration on the part of the vendor that neither they nor those under whonrthey claimed the lot- in question had dedicated the lot to the public, or done any other act by which the corporation, or" the owners- of the adjacent land, would have the right to open a street over the lot without paying the owner the full
The facts, therefore, present a case in which the vendors, under a misapprehension of their legal rights, have sold and received part payment for a lot which was already dedicated to the public, and which for that reason was worth nothing to the owners, or those whose interest they represented in this transaction; and where the purchaser, relying upon the information of the adverse party, has purchased and in part paid for a lot which was in fact of no value either to him or to the vendors. It was therefore just and equitable, after the purchaser had been evicted by the opening of the street across the lot, to decree a discharge of the bond and mortgage and a return of the purchase money which had been paid towards the lot under such a misapprehension of the facts.
The decree in these causes was affirmed, upon appeal to the court for the correction of errors, in December, 1837.