Giddings & Coleman v. Eastman

5 Paige Ch. 561 | New York Court of Chancery | 1836

The Chancellor.

The question does not properly arise, on this appeal, whether Blanchard took the conveyance from Hickcox as the attorney and agent of the complainants. It is very evident, however, that such was the legal result of the transaction proved in this case-. In reference to this question, it is perfectly immaterial whether there was legal proof of the actual execution of the mortgage, a copy of which was inserted in the book of deeds, or whether Blanchard had the original mortgage in his possession at the time he took the conveyance of the equity of redemption to himself It was sufficient that the complainants claimed to be the holders and owners of such a mortgage as was copied into the book of deeds, and that Blanchard, as their attorney, undertook to collect or foreclose It for them. It is doubtful, from the testimony, whether he ever had the original mortgage in his possession, as it was not found among his papers at the time of his death, andas the notes are proved to have been in the hands of the complainants, in Virginia, subsequent to that timé. The declarations of Blanchard, that he had got the mortgage to foreclose, may well bs satisfied by supposing that he had gotten directions to foreclose the mortgage, which they probably supposed, from the application which was made to them for authority to foreclose it, was properly acknowledged and recorded in the clerk’s office of the county. But whether he had possession of the original mortgage or not, the testimony is sufficient to shew that he professed to deal with Hickcox in the character of attorney for the complainants, and that except in that character he would not have been enabled to obtain the release of the equity of redemption, to prevent the costs and expense of a foreclosure'» it is not necessary to presume, in this case, that Blanchard had any intention of defrauding his clients. He had a lien, for the $>20 which he paid to obtain the release from Hickcox; and for his services in transacting the business; and he probably took the release in his own name to secure that lien until he could see his clients and settle with them, they at that time residing out of the state. And his death, a few months afterwards, prevented his clients from obtaining the necessary information as to what had been done; and left the legal title in the heirs at law, charged with the trust, although both they and the complainants were ignorant of the fact at that time.

I find nothing in the answer of Eastman, or in the evidence in this case, which can deprive him of the character of a bona fide purchaser of the rights of the four sisters of Bis wife, without notice, either actual or constructive, that Blanchard, at his death, held the premises in the character of trustee for the complainants. Eastman resided in a distant part of the country, at the death of his brother-in-law; and when he went to Batavia to inquire into the state of the property which was left,Be found an absolute conveyance from Hicbcox for this lot, which was pointed out to him as the property of Blanchard. And there was nothing upon the face of that conveyance which could have induced him to suspect that it was a conveyance in trust, for the complainants or any other person. The copy of the mortgage, irregularly recorded in the book of deeds, was pointed out to him a year or two afterwards, and was good constructive notice to him of the existence of such a mortgage, if it had actually been given; but it was not even a constructive notice to him that the deed from Hick-cox to Blanchard was taken by the latter as attorney and trustee for the mortgagees. If it was a valid and subsisting mortgage against the land, then Eastman purchased with notice of the complainants’ rights as mortgagees merely, but not of the right which they now claim by virtue of the trust upon which the conveyance to Blanchard was taken.

It is insisted, however, by the complainants’ counsel, that as Eastman and wife held an undivided share of the premises, in right of the wife, as one of the heirs at law of Blanchard, charged with the trust, although they were both ignorant of the fact that any such trust existed, it was impossible for Eastman to become a bona fide purchaser of the undivided shares of the other four heirs at law. This position cannot be sustained upon any principle of equity. The cases referred to by the complainants’ counsel, upon this point, are cases in which a trustee holding the estate for another has taken advantage of his situation to purchase in an outstanding title, or to secure some advantage which, in equity, it was his duty to purchase or secure for the benefit of his cestui que trust; or where, from the situation of the purchaser in reference to others, it might be presumed he intended to make the purchase for his and their joint benefit. But where one devisee or heir at law is by construction turned into a trustee, without any knowledge on his part that he is such trustee, or of the facts which make him a trustee constructively, it appears to be impossible to hold that he may not be a bona fide purchaser of the undivided share of another tenant in common in the same property, as to which he is equally ignorant that any trust exists. The conclusion of the vice chancellor was therefore right, that Eastman acquired a valid title to four fifths of the premises, by purchase from the heirs, and that he now holds that portion of the premises, discharged of the trust which attached to it in the hands of the heirs.

It is very doubtful whether the complainants can elect to consider the conveyance to Blanchard as a purchase of the equity of redemption, for their use and benefit, for one purpose, and at the same time to consider him or his heirs, or the purchaser under them, as the legal owner, subject to the mortgage, for another purpose. I am inclined to think that, if they consider and elect to treat it as an extinguishment of the equity of redemption, for their use and benefit, as to the fifth of the premises which has descended to Mrs. Eastman, for the purpose of obtaining from the defendants a conveyance of that share, they must elect to consider it so in ioto, and look to the heirs, who have conveyed to Eastman, for their shares of the purchase money received on their sales.

Even if a foreclosure of the mortgage had been sought by the bill, it could not have been had upon the proofs in this case, as there is no legal evidence of the existence of such a mortgage as is described in the complainants’ bill. If it was perfectly clear that the mortgage was actually in the possession of Blanchard at the time of his death, its loss might be presumed ; as it appears by the answer of Eastman that it was not found among his papers. And the copy of the mortgage entered upon the book of deeds, in connection with the testimony as to its execution, would, in that case, be good secondary evidence of its original existence and contents. The bill alleges that all the notes were payable on demand, with interest from their date, and that the mortgage was gnft en to secure the payment of such notes. The copy of the mortgage on record, however, does not show when the notes Were made payable, or whether they were upon interest or not. And as this was a material allegation in" the bill, and was put in issue by the answer, it was necessary that the complainants should sustain it by proof, before they could be entitled to a decree of foreclosure. Van Norman says he does not know whether his notes to Coleman and Giddings were due when he went to the south to reside, in 1809, but that some years afterwards, one of the complainants brought the notes to him, in the state of Virginia, when he made a payment thereon, and gave new notes for the balance. And from the whole of his testimony, I think it is fairly inferrible that the four notes were not all payable on demand, as stated in the bill, and that the mortgage was not given to secure such potes as are there described. The complainants should, at least, have given in evidence the new notes of Van Norman, to show whether they were payable at the time of filing their bill, and the amount that was still due upon the mortgage. The vice chancellor was. therefore right in not decreeing a, foreclosure.

The decree appealed from is affirmed, with costs; and th§ proceedings are to be remitted to the vice chancellor,