Kellogg v. Wood

4 Paige Ch. 578 | New York Court of Chancery | 1834

The Chancellor.

To understand and properly dispose of the great variety of legal questions and tangled equities which are presented in this case, it will be necessary that I should examine the facts somewhat in detail. But before I proceed to that examination, it is proper that I should dispose of the question as to the admissibility of certain documentary evidence which was read upon the hearing. It is supposed by the appellant’s counsel that the 75th rule of this court makes it necessary that the notice of the intention to produce a document at the hearing, which by law is entitled to be read without proof, such as exemplifications and deeds which are proved or acknowledged under the statute, must be given at least ten days before the order to produce witnesses expires* and that it is not sufficient to give such notice more than ten days previous to the entry of the order to close the proofs. The language of the rule, “ ten days before the expiration of the time allowed to produce proofs,” is perhaps ambiguous. But it certainly will admit of the construction contended for by the counsel for the respondent; as the parties are allowed to produce and examine witnesses, after the expiration of the time limited in the order, at any time previous to the actual entry of an order to close the proofs. It frequently happens that the whole of the testimony in a cause is taken after the expiration of the time limited in the order to produce witnesses, without any "written stipulation between the parties or their solicitors or counsel. And a construction of this rule should not be given which would prevent a party from giving notice', of his intention to use documentary evidence on the hearing, in such a case, provided there were ten days between the giving of such notice and the closing of the proofs. No inconvenience whatever can arise from the construction I am disposed to put upon the rule; as the party who receives such notice, if he is not disposed to examine witnesses in relation to the documentary evidence, or is unwilling that such evidence should be used on the hearing, may himself enter the order to close the proofs, and thus prevent its being thus used. And the party giving the notice cannot prevent the examination of witnesses, or the production of countervailing proofs before the examiner," within the 10 days, without precluding himself from the benefit of the documentary evidence of which he has given notice. Another conclusive answer to this objection is, that the 75th rule does not apply to the present case. By a reference to dates, it will be found that the time limited by the order to produce witnesses, expired on the first of January, 1830, the very day on which that rule was adopted; so that a compliance with its provisions was impossible, if the construction contended for by the appellant’s counsel is correct. And as the former practice allowed documentary evidence to be used on the hearing without such previous notice, the 75th rule.could not be permitted to operate retrospectively, go as to deprive the complainant of his rights.

The controversy in this cause relates to certain portions of lot No, 104, in the Onondaga reservation. This lot is supposed to contain 250 acres of land; and was conveyed to A, Conyne in 1796, by the surveyor general, under the act of April, 1795, for the better support of .the Oneida, Onondaga and Cayuga Indians. (3 Laws of N. Y. by C. R. & G. Webster, 115.) Conyne gave back a mortgage to the state for the purchase money, $1535, as directed by the statute; which mortgage was duly registered. In 1797 Conyne conveyed the whole lot to W. Lard. In April, 1799, Lard conveyed 160 acres on the south side of the lot to the defendant T. M. Wood and to George Hall, with warranty. And in part payment of the purchase money, in September, 1799, Wood and Hall gave to Lard a bond, in the penal sum of $2000, conditioned to pay and discharge the state mortgage. A part of the 160 acres sold to Wood and Hall was then laid out by them into village lots, containing' six acres each. On the 13th of November, 1799, they conveyed lot No. 7, of the village lots, to John Ellis, without warranty ; and on the same day they conveyed lot No. 9 to E. Webster and lots No. 6 and S to E. Lewis, with warranty. Upon lot No. 6, Lewis- gave back a mortgage "of $95, for the purchase money, and a mortgage on lot No. 8 for $80. Previous to 1816, S. Thayer derived title to lots No. 6, 7 and 8, through divers mesne conveyances, from Ellis and Lewis; and he also obtained the title to lot No. 9 by the operation of a resulting trust. In May, 1806, J. Forman and W. H. Sabin, who had obtained the legal title to 38 TVo acres of the original lot No. 104, lying in the north-east corner thereof, and not included in the 160 acres conveyed to Wood and Hall, contracted to sell the same to S. Thayer for $400, payable one half in three and the residue in four years, with interest annually. It appears that the whole of the purchase money of this piece of land has been paid to Forman and Sabin ; but that no conveyance of the land was ever given by them to Thayer. Possession was taken by Thayer, under this contract to purchase, and he continued in possession until 1819. In January, 1811, Wood and Hall conveyed to Thayer 22 acres of their 160 acres, north of the village lots, and took back a bond and mortgage for $477,36 of the purchase money; and on the 29th of April, 1814, they also conveyed to him another small piece, containing 11 acres and 19 rods, lying west of the village lots, and took back a bond and mortgage for $500. On ihe same day they conveyed to J. Lard another piece of land in their 160 acres, containing 11 acres and 36 rods, and took back a bond and mortgage of $505 for the purchase money; of which Lard paid $200 in July, 1815, and January, 1816, and Thayer agreed to pay the residue. But the whole has subsequently been paid or secured to Wood or Hall by Lard himself. In 1816, Thayer, claiming to be the owner of the two pieces of land conveyed to him, by Wood and Hall, in 1811 and 1814, the piece he had contracted to purchase of Forman and Sabin, and the four village lots above mentioned, and of part of lot No. 10 of the village lots, and wishing to pay Wood and Hall the balance due on his two bonds and mortgages, and the balance of J. Lard’s mortgage, of which he had assumed the payment, agreed with Wood and Hall to apply to the comptroller, under the act of April, 1813, relative to the office and duties of the comptroller, (1 R. L. 476, § 4, 5,) to have a new account opened for these several lots and pieces of land, amounting to 99 s acres in the whole, and to have the same charged with a share of the whole principal and interest of the mortgage to the state, so as to relieve the rest of the lot for that amount; .and that the amount thus charged on the 99 £ acres should be alknved to him upon his two bonds and mortgages, and upon the J. Lard mortgage, which was to be assigned to him. An account was accordingly opened on the books of the comptroller, at the request of Thayer, by which $1282,13 of the principal and interest of the state’s mortgage was charged upon the 99 £ acres, and the residue of lot No. 104 was discharged therefrom. Thayer having neglected to pay the interest due on this portion of the mortgage to the state, the lands embraced in this new account were advertised for sale, in the fall of 1817, by the attorney general. An agreement was thereupon entered into between Wood and Thayer, -by which the former was to go to Albany and attend the sale and bid in the land, pay what was required to be paid down, including the costs, take a deed in his own name and give a mortgage back to the state for the surplus, and was to hold the same for the benefit of Thayer, or to convey the same to him subject to the payment of the mortgage to be given by Wood to the state. Under this agreement, the defendant purchased in the premises, on the 17th of November, 1817. He paid down for the costs and one eighth of the purchase money, $191,41, and gave a new bond and mortgage on the same 99 § acres, for the residue, $1148. At this time there was due to Thayer from Wood and Hall ■about $425, over and above the balance due to them upon the two mortgages given ’ by Thayer; allowing him for the $1282,13 assumed in the new account opened with the 99 f acres. Thayer, who was examined as a witness for the defendant, swears to this fact. And West, who was also examined as a witness for the defendant, was present when Thayer and Hall and Wood looked over their accounts, in 1819, swears it was found that Wood and Hall would owe Thayer about that sum, after allowing them the amount due on his bonds and mortgages, provided he paid the state the amount of the new account. This did not include the balance due on the J. Lard bond and mortgage, which had not been assigned to Thayer agreeably to the original understanding between the parties. But both these witnesses swear that the amount paid by Wood on the attorney general’s sale, and the amount which was to be allowed to him for his services were to be deducted from this balance of $425. This also corresponds with the statement made out by Hall, in 1818, and marked as defendant’s exhibit No. 2. It will be seen by that statement that the amount due on those two mortgages, including the costs of the judgment and compound interest up to the 3d of December, 1818, was $977,79. But if the compound interest on the two bonds and mortgages is only cast up to the 25th of January, 1817, when the new account was opened, and the costs of the judgment as stated in the answer of the defendant are added thereto, it will amount to a little short of $860; which sum, deducted from the amount assumed by Thayer in the new account, will leave about the sum of $425, as testified to by these witnesses; without making any allowance for the interest on this bal» anee from January, 1817, to the time of the attorney gene» ral’s sale.

In 1811 Forman and Sabin recovered a judgment against Thayer, in the Onondaga common pleas, for a debt of about $200, which was subsequently assigned to S. West. Under an execution issued on this judgment, all the right and title of Thayer to the original lot No. 104, which includes the 99®-acres, was sold by the sheriff in March, 1819, and the same was bid in by West for the sum of $20. Under the conveyance from the sheriff West went into possession of the 99£ acres, and continued in possession until 1825, when the same were conveyed by the sheriff to the complainant, upon a sale under two judgments and executions against West. On the 7th of June, 1824, after the sale by the sheriff to the complainant but within the time allowed for redemption, the attorney general again sold the premises under the state.mortgage, and Wood again bid them in, for $1608,85, of which sum he paid down $231,11, and gave back a new mortgage to the state for the residue, which mortgage is still due. The defendant having brought an action of ejectment against a tenant of the complainant, this bill was filed to restrain him from proceeding in that suit, and to compel him to convey the premises to the complainant, and to pay off or indemnify him against the mortgage given by the defendant to the state. The vice chancellori'decided that the complainant was entitled to the four village lots, and to the 38 -/tro acres contracted to be sold by Forman and Sabin to Thayer, discharged of the mortgage to the state and of the mortgages given by Elihu Lewis for the purchase money of lots No. 6 and 8 of the village lots; and he decreed accordingly. The appellant has furnished me no copy of his appeal, but, from the arguments of the counsel on both sides, I presume he has appealed from the whole decree. I shall therefore proceed to examine and decide the case upon that supposition.

There can be no doubt of the correctness of the conclusion at which the vice chancellor arrived, as to the payment of the two mortgages given by Elihu Lewis to secure the payment of the purchase money on lots No. 6 and 8 of the village lots. These two mortgages, amounting to $175, were given in 1799, and were payable on or before the first of July, 1805, with interest, at the rate of six per cent., payable annually. • And in July, 1802, Lewis, the mortgagor, conveyed No. 6 and one half of No. 8 to Smith and Norton, together with several large lots, mills, &c. and died soon after. In November, 1803, Medad Curtis, professing to act as the agent of Smith and Norton, contracted in their names to sell to N. Earll lands in the Onondaga reservation, valued in the contract at $2000 ; and as a part of the consideration of the purchase, Earll was to pay the amount due on these two bonds and mortgages to Wood and Hall, so as to save the estate of Lewis harmless ; Smith and. Curtis being two of the executors of the estate. In the spring of 1894, by agreement between Wood and Earll, the former agreed to take this contract, and Curtis was requested to have the deed made to him, which was made accordingly by Smith and Norton, in January, 1806, and the same was offered to Wood, who was then in possession under the contract. And he was requested to cancel the mortgages, which he neglected to do, although he has continued ever since in the possession of the lauds mentioned in the contract and deed. Nothing appears to have been paid, either for principal or interest, and no person having an interest in the land has ever recognized them as subsisting liens thereon, since Wood took this contract from Earll and agreed to perform the same. And the last payment on each mortgage became due more than twenty-three years before the filing of this hi 11. As the defendant still insists upon these mortgages as subsisting liens upon the mortgaged premises, notwithstanding they were paid, in equity, and the legal presumption, after such a lapse of time, being that they are in fact paid, they ought not to be permitted longer to remain as a cloud upon the title. The vice chancellor has therefore very properly directed that the defendant should acknowledge satisfaction, that (hey may be cancelled on the record.

The rights of the parties as to the lands in controversy in this cause depend upon different principles as regards the different parcels. There can be no possible doubt that the legal title to lots No. 6 and 8 of the village lots is now in the complainant; and that he is entitled to be protected against the encumbrance of the present mortgage to the state, executed by the defendant. The covenants of warranty contained in the two deeds to Lewis were covenants running with the land; and when Thayer afterwards became the owner of the legal estate, by a title derived under and through those deeds, he became entitled to the benefit of those covenants, which were not then broken, as a part of his title to the lands. The lien of the Forman and Sabin judgment, therefore, attached upon his interest in the covenants of warranty as well as in the land itself; and those covenants passed with the land to the purchaser, under the judgment, as his title relates back to the time when the lien commenced. And Kellogg, under his subsequent purchase, is now entitled to the benefit of Wood and Hall’s covenants of warranty as to these two lots. The legal effect of those covenants is, that the title subsequently acquired by Wood, under the attorney general’s deeds, enures to the benefit of the complainant; as the defendant is estopped by his covenant from alleging that the whole title was not in himself and Hall at the time they conveyed to Lewis. And, under these covenants of warranty, the defendant is also bound to defend the complainant’s title against any title or encumbrance which existed at the time the conveyances to Lewis were executed. The present encumbrance to the state is but a continuation of the mortgage lien which before existed; and the defendant, therefore, must relieve the complainant from the lien thereof.

The same principles would be applicable to lot No. 9, which was also conveyed with warranty, had not the covenants of Wood and Hall, contained in their deed to Webster, become merged, at law, by the conveyance from Webster to W. Lard in 1800. By referring to the deed from Lard to Wood and Hall, it will be seen that he covenanted to warrant and defend the title to them. When, therefore, the title revested in him, he could not claim that they should defend him against a claim or lien of the state, which by his own covenants he was bound to defend them against. In other words, if A. conveys to B. with warranty, and B. then reconveys to A. with warranty, the last covenant can only protect A. against a title or encumbrance, from or under B. subsequent to the original conveyance to him. And if A. is evicted in consequence of an encumbrance or defect in the title prior to that time, he cannot recover against B. on the covenant contained in the last conveyance ; as the covenant in the first would be a complete bar to the suit. But although, at law, the covenant of Wood and Hall was merged, yet in equity it was not, in the present case, in consequence of their bond, by which they had agreed to pay off this mortgage themselves. If Wood and Hall had not conveyed this lot No. 9, but had suffered the land to be sold under the state mortgage, and had then been evicted by the purchaser, a court of equity would not permit them to recover upon their covenants of warranty in the face of their agreement to pay off this bond and mortgage themselves. And it is probable that the agreement would be a valid defence even in a court of law. When the title to lot No. 9 became revested in Lard, he was in equity entitled to the full benefit of Wood and Hall’s covenants of warranty, in the same manner as if he had conveyed to them subject to the payment of the state mortgage, and without any warranty whatever. This equity attached itself to the land, and passed to Thayer, by the conveyance of Lard’s title, under the surrogate’s order, to Forman and Sabin, and which title was conveyed by them to Thayer by the operation of a resulting trust. And the complainant who has acquired Thayer’s title, under the judgment against him, has an equal right to protection against the lien of the state mortgage. The covenant of warranty being merged, however, the title subsequently acquired under the attorney general’s sale would not probably, at law, enure to the benefit of the complainant, by way of estoppel, so as to enable him to defend himself in the ejectment suit. But this court will afford him the necessary protection by enjoining the proceedings at law; and by compelling the defendant to convey the legal title, which he has acquired, with covenants of warranty against the mortgage to the state.

The complainant has a similar claim to be protected in his title to lot No. 7 of the village lots, though that was conveyed by Wood and Hall without warranty. The covenants of warranty contained in W. Lard’s deed passed by the conveyanee of this lot to Ellis, and through him to the complainant, who now holds the title which Ellis had under the deed of Wood and Hall. He may, therefore, if he is evicted by Wood, or by a title derived under the original mortgage to the state, recover against the representatives of Lard under that covenant of warranty; and they would then have the right to turn about and recover the damages recovered against them, in a suit upon the bond. And the bond being joint and several, the suit might be brought against Wood alone. This useless circuity of action a court of equity never resorts to, when the same thing can be effected in another and a more direct proceeding. Besides, the representatives of W. Lard stand merely in the situation of sureties that Wood and Hall will pay off the mortgage, and thus relieve them from the claims of the complainant under W. Lard’s covenant. Lard was not personally holden for the payment of the original mortgage to the state. He therefore was not interested in the payment thereof, any farther than was necessary to protect his title to the residue of the land, and to indemnify him against any liability for a breach of his covenants of warranty as to the 160 acres conveyed. And upon the principle of the cases of The Bank of Auburn v. Throop, (18 John. R. 505,) and Maure v. Harrison, (1 Eq. Cas. Abr. 93,) the complainant is entitled to the full benefit of the security thus held for his indemnity; and which in a court of law could only be sued by the personal representatives of Lard.. Wood therefore cannot, in equity, be permitted to proceed in his ejectment suit, to recover possession of the land under the title he has acquired from the state, by the attorney general’s sale, and which at law overreaches the complainant’s title. It appears, from the dates of the bond and of the conveyance to Ellis, that the bond was given while the title to lot No. 7 was still in Wood and Hall. The bond was therefore, in equity, a release of Lard’s covenant of warranty, so far as concerned the mortgage to the state. But as there is nothing in the case to show that Ellis was apprised of that equitable release of the covenants of warranty, he and those claimining under him cannot be deprived of the benefit of those covenants. And the complainant as to this lot is also entitled to a conveyance of the legal estate vested in Wood, under the deed from the attorney general, and to an indemnity against the encumbrance of the last mortgage.

The same principles would also apply to the %% and 11 acre pieces, stated in the answer to have been conveyed by Wood and Hall directly to Thayer, if there was any legal evidence of such conveyances; subject, however, to the payment of whatever was equitably due on the mortgage given by Thayer to Wood and Hall upon those two pieces of land. Although there can be very little doubt that such conveyances as are stated in the answer were in fact given, that part of the answer was not responsive to the bill, and was put in issue by the replication. And upon the taking of the testimony, the complainant objected, as he had a right to do, to the introduction of any parol proof that such conveyances had been made. I do not know, therefore, that it would be right or proper for me to give to him the benefit of the illegal testimony, which the defendant actually gave, in favor of the complainant, notwithstanding a valid objection was interposed. I do not see any benefit which the defendant could derive from the proof of such conveyances, as he did not claim title through them. It was only necessary for him to show that he had the bonds and mortgages, as subsisting debts against Thayer at the time of the agreement to open the new account, and that Thayer claimed to be the owner of the land. I must, therefore, for the purposes of this suit, reject the parol evidence which has been given of those conveyances, and act upon the supposition that there was only a parol understanding that the lots were to be conveyed; and that the mortgages were given to Wood and Hall while the legal title still remained in them. The question will then arise, whether the legal lien of a judgment attaches, from the time of the docketing thereof, upon a mere equitable interest, in land, under an agreement to convey. And, in this respect, these two lots will stand upon the same footing with the 38yñV acres, held by Thayer under Forman and Sabin’s agreement. That question I will now proceed to consider.

I have before said, in reference to lot No. 9, that the equitable fight of Lard to protection against the state mortgage, in consequence of the giving of the bond by Wood and Hall, although not a covenant running with the land, at law, was an equity connected with the land, so that it passed to Forman and Sabin under the sale, by virtue of the surrogate’s order. The same principle applies with equal if not greater force, to the acre lot, a part of the land not included in the original conveyance of the 160 acres to Wood and Hall. And if the judgment of Forman and Sabin was a lien upon this land, so as to connect itself with this equitable right previous to the agreement of 1816, by which agreement the equities as between Thayer and Wood and Hall were changed, and so as to overreach that agreement as it would have done if the legal estate had been vested in Thayer before that time, the complainant is entitled to the same relief in relation to this lot as he is entitled to in respect to village lot No. 9.

The decree of the vice chancellor pronounces the agreement of 1816 to be fraudulent and void as against the judgment creditors of Thayer. I presume, however, by this, that the vice chancellor only meant that it was equitably void and inoperative as against the purchaser on the execution ; it being overreached by the lien of the judgment. For there is nothing in the evidence in this case even to justify a suspicion that either of the parties to that agreement supposed that any one could be injured or defrauded .by the arrangernentjthen made. Although the docketing of a judgment is, by law, a constructive notice to those who afterwards deal with a debtor in reference to-lands upon which it is a lien, yet, in point of fact, it is well known to professional men that not one in five, of those who thus deal with judgment debtors, are actually aware of the existence of judgments affecting their interests in the property, or ever think of searching the records of the courts to ascertain whether such a judgment exists. And in this case there was nothing to excite suspicion, or to induce Wood and Hall'1 to suppose Forman and Sabin would be defrauded or injured by the arrangement then made, even if there had been actual notice of this small judgment and that-it remained unpaid ; as it is evident, from the testimony, that the real estate of Thayer, on which this judgment was a lien, was of sufficient value to pay several judgments of that amount, over and above what was charged as a prior lien upon the 99§ acres by the opening of the new account in the comptroller's office. And, at that time, Thayer was not supposed to be insolvent.

In the case of Bogert v. Perry, (1 John. Ch. Cas. 52,) this court decided that the equitable right of a vendee, undere a contract to purchase land, and before the purchase money was fully paid, was not subject to the lien of a judgment against the vendee; and that such interest could not be sold upon an execution on such judgment, under the provisions of the fourth section of the statute of uses. (1 R. L. of 1813, p. 74.) And the decree of Chancellor Kent was unanimously affirmed by the court for the correction of errors. The construction which lias been given to the provisions of this statute, both here and in England, is, that to authorize a sale of the equitable interest of a judgment debtor on an execution at law, it must be a -clear and simple trust for the benefit of the debtor only. The object of the statute, in the language of the late chief justice of England, was merely to remove the technical objection arising from the interest in land being legally vested in another person, where it is so vested for the sole benefit of the debt- or. Although the question as to the construction of the statute is thus settled, another question has frequently arisen, whether, in the case of an equitable interest, in land, which Is liable to be sold on execution by virtue of this statutory provision, the lien of the judgment attaches upon such equity from the time of docketing of the judgment, or only from the time of the issuing of the execution. In the case of Hunt v. Coles, (Comyn's R. 226,) it was held that the judgment was mot a lien upon the legal estate in the hands of the trustee, before execution issued, so as to reach the lands in the hands of a purchaser from the trustee intermediate the judgment and execution. And in the recent case of Harris v. Pugh, (12 J. B. Moore's Rep. 577,) the court of common pleas in England recognized and followed that decision in a, case where the judgment debtor had parted with all his equitable interest in the land after the docketing of the judgment, but before the issuing of the execution. These decisions are founded upon the words of the English statute, the same as ours on this subject, which only authorized the sheriff to take such lands as the .trustees were seised of, to the use of the judgment debtor, at the time the execution was sued out; and not at the time of the docketing of the judgment, as in the case of lands of which the debtor was seised as of a legal estate. In the case now under consideration, the defendant in the judgment never had the legal title to the 38foV acres; and at the time the execution issued, the legal title to the land was no longer held by Forman and Sabin, in trust for him, under their agreement for sale. But their legal title, and his equity, had both been displaced, with the concurrence of the judgment debtor, by the attorney general’s sale and conveyance, in November, 1817. A new equity, however, had been created and was then existing in favor of the judgment debtor, under the agreement of November, 1817, which could be reached by the execution, on the Forman and Sabin judgment, which was issued in May, 1818. That agreement, as testified to by Thayer, the witness of the defendant, was, that the defendant should go to Albany and buy in the 99f acres for him at the attorney general’s sale, and that the amount required to be paid down on the-sale, and the $100, which the defendant was to receive for his services, was to be deducted from the $425 which had been overpaid to Wood and Hall in the amount he had assumed and paid for them by the opening of the new account at the comptroller’s office. The understanding between the defendant and Thayer at that time, therefore, must have been, that the balance of the $1282,13, xvbich remained after paying Thayer’s two bonds and mortgages, should not be applied by him towards the J. Lard mortgage, as was contemplated at the time the new account was opened; but that Wood and Hall should keep that mortgage, and that the defendant should account with Thayer for the balance. This it was perfectly competent for them to do, as no person’s rights were affected by it. Thayer was not to pay Lard’s mortgage for the benefit of Lard; but Thayer was to have an assignment of it, if it was paid by him to Wood and Hall. And as I have before said, Wood and Hall subsequently treated that mortgage as their oxvn, and collected the same. It is manifest, therefore, that after the attorney general’s sale, in 1817, Wood held the legal title to the whole 99f acres, as a mere naked trustee for Thayer. And that he owed him, in addition, the difference between $425, the amount overpaid by the opening of the new account, and $291,41, the amount paid at Albany, including the $100 for his services. This equitable interest of Thayer was therefore subject to sale on the execution issued in May, 1818; Wood being at that time seised of the land to the use of the judgdment debtor, except as to such parts of it as was previously vested in Thayer under the conveyances with warranty, by which the legal title enured to his benefit notwithstanding the purchase by Wood under the older encumbrance. The right which West, therefore, acquired under the sheriff’s deed, which covered the whole 99f acres, was the legal title to lots No. 6 & 8 of the village lots, with a legal right to insist that Wood & Hall, who had warranted the title originally, should indemnify him against the lien of the state mortgage, so far as those lots were concerned ; and an equitable title to lots No. 7 & 9, with the equitable right to indemnity against the lien of the mortgage as to those lots. And he also acquired the equitable right to a conveyance from Wood of the legal title to all the residue of the 99f acres, subject to the payment of the whole amount then due upon Wood’s mortgage to the state. The legal and equitable interest thus vested in West continued in him until the issuing of Kellogg’s executions, in the fall of 1823, and was subject to be sold thereon. It therefore passed to the complainant, under the sale and conveyance upon those executions, in the same state; except so far as the rights of the parties were altered by the second purchase by the defendant, under the state mortgage, between the time of the sale by the sheriff and the expiration of the fifteen months allowed to redeem.

As Wood stood in the situation of a trustee, and having refused to convey the legal title to the original cestui que trust, he could not, while standing in that situation, be permitted to make a speculation at the expense of those for whom he held the title. He acquired no new rights, therefore, under the second sale, except the right to be reimbursed the $231,11, which he paid for the interest and costs. It was no part of the original trust that he should pay the interest or principal on his mortgage to the state. He therefore is not liable for the costs which were made by the neglect of the cestui que trust to pay it up. And the balance of the $425 which remained due to Thayer after the first sale, was a mere personal claim in favor of Thayer, against the defendant, or against Wood and Hall, which did not pass to West by the sheriff’s sale. The complainant, therefore, is not entitled to have it offset against the amount paid by Wood on his second purchase. To redeem and obtain a conveyance from Wood, of that part of the 99f acres not included in lots No. 6, 7, 8 and 9 of the village lots, the complainant therefore must refund him the amount thus paid, with interest, and must assume the payment of the whole of the mortgage to the state.

The decree of the vice chancellor must be reversed or modified in such a manner as to declare the rights of the parties as thus established. And the complainant is, by the decree, to have sixty days after the same is settled and entered to make his election whether he will redeem, and have a conveyance of the premises not comprised within the four village lots, upon these terms. If he elects to redeem, the defendant is to convey to him the whole 99f- acres, as described in the attorney general’s deed, upon the payment of the sum of $231,11, the amount paid by Wood on the last sale, with interest thereon from the 7th of June, 1824, subject to the payment of the whole of the last mortgage to the state; with covenants against his own acts, or any encumbrances created or suffered by himself, since the purchase under the attorney general’s sale, except that mortgage. But if the complainant does not elect to redeem that part of the premises, then the defendant is to be permitted to retain the same free from any claims of the complainant under the sheriff’s deed to him. And in that case the defendant is to give a conveyance of the four village lots only, with similar covenants of warranty against his own acts and encumbrances; and he must either clear these lots entirely from the lien of the state mortgage, or give satisfactory security, to be approved by a master, to pay it off within a limited period, and to indemnify the complainant and Ms heirs and assigns against it. He must also be enjoined from proceeding farther in the ejectment suit as to the four village lots; and also as to the residue of the premises, if the complainant elects to redeem.

The whole difficulty in this case has probably arisen from the neglect of the defendant to give a conveyance to Thayer, as he should have done, under the agreement made immediately previous to the first sale under the state mortgage, and from the unfounded claims he has subsequently set up, as to the Lewis mortgages, and otherwise. I think the vice chancellor was therefore right in charging him with the costs. But as he has succeeded upon this appeal in obtaining a material modification of the decree, I shall not give to either party costs, as against the other, upon the appeal.

Case Details

Case Name: Kellogg v. Wood

Court Name: New York Court of Chancery

Date Published: Oct 21, 1834

Citation: 4 Paige Ch. 578