5 Fla. 99 | Fla. | 1853
The true point upon which the merits-of this case rests, is as to the effect of the rescisión of the contract of purchase, and the subsequent payments or advances made by Holbrook to Lloyd, in consequence of that rescisión.
The complainants rest their case upon the following state
Whatever may have been the character or extent of Lloyd’s equity, previous to the assignment of Call and Walker’s-mortgage to Holbrook, it is unnecessary to consider. It is, however, clear that after the assignment, and when Holbrook had united in himself the legal and equitable title, and assumed the execution of the contract of purchase, he became, for all legal purposes, the vendor of Lloyd.
At the time Lloyd executed his mortgage, he was not only in possession of the premises, free of rent, but, under the contract of purchase, had an interest in the land, the subject of mortgage or sale; an interest which was devisable and descendible as his real estate. Craig vs. Leslie, 3 Wheat., 577.
It is insisted that the contract of purchase is to be considered as a simple executory agreement, creating no charge on the land, or attaching to it in any manner as an incident. This is undoubtedly true at law, but equity considers the contract in a different and more favorable light, and, for many purposes, treats it as specifically executed. The vendee is regarded as the equitable owner of the prop
Undue importance, we think, has been given by counsel to the decree of strict foreclosure rendered by the Circuit Court, in 1847, against Call and Walker. The relative position of Lloyd and Holbrook, as to their respective rights and liabilities, was not affected by this decree. Lloyd was no party to this proceeding, though the party in interest. In possession, and asserting his claim to the property by virtue of his contract with Holbrook, his equity was paramount to any rights growing out of the mortgage debt, for-bad Holbrook obtained a decree for the sale of this property, in satisfaction - of the debt, a Court of Equity would not have hesitated to enjoin the sale, upon the application of Lloyd. The bill for foreclosure was against Call and Walker alone, and the decree could only vest the title as against the party to the suit; but they had previously conveyed their equity of redemption, and had no longer any interest in. the property ; and their consent, entered of record, surrendering the property in satisfaction of the mortgage debt, impaired no one’s interest, and vested Holbrook
As a general rule, it is undoubtedly true that a prior incumbrancer, or person bolding the legal title, is not bound to act in reference to tbe rights or equities which may exist in favor of a subsequent incumbrancer; and if tbe defendant, Holbrook, stood in reference to this case in the light of a prior incumbrancer, with a mortgage to cover fu. ture advances, actual notice of the outstanding equityjwould berequisite. Shirras vs. Craig, 7 Cranch, 34; 2 Barb. C. R., 297, 303. We do not question the doctrine that a mortgage given to secure future advances, is a protection to the bolder, for all advances made prior to the receipt of actual notice of the intervening title; for otherwise the mortgage, to tbe extent of its provisions, would be a fruitless security, and it would be impossible for a prior creditor to protect himself against loss. But the reason of the doctrine shows its want of application to the case before us.
Tbe subsequent advances are commensurate with the terms of tbe deed — they are based upon tbe faith of the deed, and are a part of the original transaction. But where these advances are not provided for in the security, they must of necessity rest upon a new agreement between tbe parties not growing out of the original contract, but inde
Ve do not question the right or capacity of the parties to rescind the contract of purchase by a surrender and acceptance of the title papers, so far as their interest are involved. Between them the surrender would be good for all purposes. But where tbe rights of third persons founded on the contract, as in this case, are affected, the surrender whether by delivering up of tbe contract or a conveyance, would be a fruitless effort to defeat an outstanding equity, tbe evidence of wbicb bad been duly recorded. Otherwise it would be in the ¡sower of Lloyd to defeat the lien of his own mortgage by a parol agreement with his vendor. The effect of the surrender was to vest in Holbrook, tbe equity of Lloyd as effectually as could have been done by a deed of conveyance. It was so designed, for the agreement to pay and the actual payment of the value of the lot and improvements, by Holbrook, so far from being made in relation to any mortgage or title he held, was the consideration of the surrender by which Lloyd’s remaining equity passed to Holbrook. It is true, that technically, Holbrook was not a purchaser, for there was no deed of conveyance to him. But none was necessary, for he held the legal estate and the only incumbrance upon it, in Lloyd’s hands, was Holbrook’s agreement to make titles on tbe payment of tbe remaining instalment of $1150.
Under1, this state of facts, we feel bound to consider the defendant, Holbrook, in the light of a subsequent purchaser, and as a consequence, the record of Lloyd’s mortgage sufficient notice to him of that incumbrance.
Tim only remaining question to be disposed of is, in re»
Holbrook, it appears, in 184T, paid this note and took an assignment of it. And he now claims the benefit of the mortgage security, and insists that the property should first be applied to the satisfaction of this note'.
That it has a priority over the mortgage note, in the hands-of the complainants, is true. But why apply the proceeds of property of which he is the owner, to the payment of an incumbrance from which he has relieved it ? líe has all the benefit of the payment by having discharged the mortgagé lien to the extent of the note. If the property was inadequate to pay more than this note, and the sum of $1150, originally due from said Lloyd, under the contract of purchase, the question would present a different aspect. As it is, the only incumbrance for which the property should be chargeable, is the remaining note due the complainants.
It is therefore ordered and adjudged, that the decree of the Court below be affirmed, except in such particulars as conflict with the opinion of this Court. It is further ordered, that this cause be remanded to the Court below, with instructions to modify its decree in conformity with this opinion.