Gouverneur v. Titus

| New York Court of Chancery | Jan 28, 1833

The Vice-Chancellor.

The proofs in this cause establish the fact, beyond- all doubt, that the three thousand one hundred and nine acres intended to be conveyed were lands situated in the north-easi corner of the township mentioned in the pleadings ; and that north-wsi was written in the deeds instead of north-east, through mere inadvertence or mistake— neither of the parties to either of the deeds intending to° convey lands in the north-west corner, as they were already covered for more than their value by the compikinants mortgage.

• It is a case in which this court would interfere as-between the immediate parties to correct the mistake.

But, it is said, that where the rights of a creditor intervene, as in this instance, and under circumstances like the present’, the court will not interfere to disturb them by correcting or reforming the deed:.

The first circumstance which has been urged- against any equitable interference is this : that the complainants haVe not proved a valuable consideration was given for the deed in which the mistake arises; and, being a Conveyance made by a party who was largely indebted at the time and against whorfi a judgment was about to be recovered, therefore it was necessary fo show the consideration to have been such as would uphold the deed against the judgment creditor. This idea proceeds upon the notion of fraud in the transaction and if it were allowed and could’ be' made out; it would not only prevent this court from interfering to correct the deed, but warrant the setting of it aside. But the defendant'is not at liberty to raise the objection. She has accepted, from Charles H. Hammond, a deed of some of the lands included in'the conveyance from his father, in satisfaction of her debt and judgment, without prejudice, however, to her claim upon the three thousand one hundred and nine acres, which is reserved to her, and she has stipulated that, in any suit involving the title thereto, the deed of the eighth of August one thousand eight hundred and twenty seven, in regard to the consideration, shall not be impeached or called in question.

The consideration expressed in the deed is two thousand dollars; and after the above stipulation, this amount is to be taken 9.3 the true consideration and the grantee, Charles II, Hammond, must be considered a Iona fide purchaser.

The next objection is, that the deed from Charles H. Hammond to the complainants does not place them upon the footing of absolute purchasers for a consideration paid for the purchase—the deed being taken to secure a pre-existing debt— that, although they may have agreed to accept the lands in payment and satisfaction of the balance of their debt, they have not actually- released the debtor; and are, consequently, creditors still. And one creditor, it is contended, cannot correct a mistake- against another creditor so as ‘to take from the latter any legal advantage, in a struggle to obtain or secure the payment of their respective debts. In relation- to the first part of this objection, I am satisfied, upon looking at all the facts and circumstances of the transaction, that the complainants are to be regarded as purchasers of the three thousand one hundred and nine acres, and with their debt extinguished. It was not a conveyance by the debtor as a security for the debt: but it was-one made by a third person in whom the legal title to the lands was vested,-and made for the purpose of effecting a discharge of that debt. The complainants received it in payment and satisfaction; and the acceptance of the deed operated to extinguish the debt, at the same time that the relinquishment by the creditor served as a valuable considerar tian for the deed. A technical release of the debt was, therefore, not necessary.

Besides, the recitals in the deed of confirmation show, that the previous conveyance was given in satisfaction, so that the debt no longer existed. After this, the complainants could assert no remedy for payment against the debtor. They stand, consequently, as purchasers for a valuable considera- . tian, although the consideration consisted in’ cancelling a precedent debt. They agreed, -in good faith, to cancel it; and they did so upon the strength of a conveyance of the lands and founded,-as the parties to the agreement supposed, upon a perfect and unincumbered title. It is true, they may be chargeable- with notice of the defendant’s judgment against the first grantor, but, knowing- the deed was anterior to the judgment and that it was intended to convey lands not comprised in the mortgage, and-not-being aware of the mistake in-'the dcscrip'tion or location as given in the deed, the complainants cannot , , , . ... - . be chargeable with notice of the apparent hen, at the time they entered into the arrangement and accepted the conveyance from Charles H. Hammond. They acted with him as if there was no such lien, in ignorance of it, yet with perfect good faith. If Charles H. Hammond acquired a title to the lands as a bona fide purchaser which could not be impaired by the subsequently acquired judgment—and of this I think there can be no doubt, as can be gathered from Burgh v. Francis, Finch’s R. 28, and Finch v. Earl of Winchelsea, 1, P. Wms. 271,—then, the complainants, as purchasers under him* are entitled to the same protection: De Remer v. Be Cantillon, 4, J. C. R. 85.

All the interest of Abijah Hammond passed by the deed to his son, notwithstanding the misdescription of-the lands conveyed :. for the deed is to have effect according to its intent. There was nothing remaining in him when the judgment was obtained upon which it could operate or become a charge. Ells v. Tousley, 1, Paige’s C. R. 280 ; and to correct the deed in favor of the purchaser and hold.it effectual as a conveyance of the lands actually intended to be conveyed, will not take any thing from the judgment creditor.

In this view of the case, it appears perfectly plain, that the. complainants are entitled to protection against the consequences of the.mistake and misdescription in the deeds. This, I am satisfied, is the correct view to be taken of the subject.

It becomes unnecessary to consider what would be the rights of the parties, if the other view of the case, contended for by the counsel for the defendants, were adopted, namely, that the complainants accepted the deed from,Charles H. Hammond as security for "-their debt,. that it still subsists, and that, like the defendant; they are only creditors seeking to obtain a partial payment- or satisfaction of their debt. Until an answer to such a point'is required, I’shall forbear to express any opinion upon it.

P am. satisfied thé complainants are entitled to a decree exonerating the three thousand one hundred and nine acres from any supposed lien or incumbrance.'of the judgment and perpetoally enjoining the defendant from taking any measures to disturb the title by virtue of her purchase at the Sheriff’s sale or otherwise.

Under the circumstances of the case and as costs are asked for against the defendant, I shall allow them to the complainants. They made known their rights to her and requested her, before they filed the bill, to release the lands from the judgment. The defendant refused to do this and preferred to litigate the matter. She must pay the costs of the suit to be taxed: Ells v. Tousley, ante. Nevertheless, she stands in a representative capacity, and perhaps could not safely execute a release, and inasmuch as it appears she has not acted otherwise than with a view to benefit the estate she represents, the costs must be charged upon that estate and not against her personally. This was done in Moses v. Murgatroyd, 1, J. C R. 473.