55 N.J. Eq. 722 | New York Court of Chancery | 1897
The defendant Gottfried Krueger has filed a proof of claim against the estate of John Hartman, deceased. Hartman was •in his lifetime the owner of the mortgaged premises, which, on his death, passed'by his devise to his surviving wife, Helena Hartman, and, on her death, passed by her devise to the defendant, the German Hospital. Mr. Krueger had also recovered a judgment on this claim against Helena Hartman, as executrix of John Hartman’s will. It is this claim and this judgment which Mi’. Krueger claims are liens against the mortgaged premises precedent to the two mortgages made by Mrs. Helena .Hartman in her lifetime.
• The act of December 2d, 1743 (All. L. p. 129), was, during the time that it was operative, construed to make the lands of a decedent liable to be sold under a judgment recovered against an executor or administrator without making the heir a party to the suit. Den, ex dem. Ely, v. Jones, Coxe *131. This enabled the executor, who was the only defendant, to let a fraudulent judgment be recovered which the heir’s land might be taken to pay. But section 18 of the act of February 18th, 1799 (Pat. L. p. 373), relieved from this embarrassment, and in terms declared that no lands of the testator or intestate should be in anywise affected by a judgment against an executor or administrator. The same statute provided for the application of the lands of a decedent to the payment of his debts by making it the duty of the executor or administrator to exhibit to the orphans court the condition of the estate, and directing that court thereupon to make an order to show cause &c. why the land should not be sold to pay debts. This statute is the basis of our present act providing for the sale of decedent’s lands for the payment of debts. That it was effectual to hinder a judgment against an executor from becoming a lien on the lands of the testator, is plainly shown by the adverse criticism of this provision by Mr,
Is the judgment sued out against the executrix, who is also a devisee, a lien on her estate as devisee ?
The capacity in which the defendant party is sued fixes the estate which is bound by the judgment, and the coincidence that the defendant who is sued as executrix, also happens to be devisee, does not extend the lien to charge lands so received from the testator. The claimant against the testator had. two modes, by either of which he could compel the lands of the testator to be taken for the satisfaction of his debt — first, by an. order of the supreme court, obtained by the testatrix within one year from the death of the testator, under the statute {Gen. Stat. p. 8370 § 70 et seq.); or second, by an action brought against the heir or devisee as such, under the statute (Gen. Stat. p. 1679), to fix their liability regarding the lands which had descended or been devised to him. Stone v. Todd, 20 Vr. 276; Dodson v. Taylor, 24 Vr. 200. It is for the creditor to choose which of these remedies he will use. Stone v. Todd, 20 Vr. 278. If the suit is against the devisee, it must appear to have been begun, maintained, recovered and entered against the defendant in that capacity, in order to comply with the statutory requirements. The devisee may be compelled to pay in the first instance, though there may be personal estate, which, in due course of administration, should be primarily liable. In such ease his remedy would seem to be to stand in the place of the creditor who forces him to pay, and reimburse himself out of the personal estate. Dodson v. Taylor, supra. To enable him to do this, there must have been a recovery against him as devisee, by which he must have been compelled to pay as devisee, because of the devise to him and not as executor out of the whole estate. The defences which the defendant Mrs. Hartman would make in the capacity of a devisee receiving lands from a testator, are wholly variant from those which she would make when sued as executrix. As to these defences,
There is no ground to justify the argument that the judgment is a lien on the lands of the devisee.
The counsel for the defendant Gottfried Krueger also insisted that, by reason of the proof of his debt against the testator to his executrix, Helena Hartman, the lands of the decedent became subjected to the lien of his claim, and that the same Helena Hartman, who took the testator’s lands as devisee, received her title with notice of this lien &c. If the claimant against a testator desires to make his money out of the real estate of the decedent, he must follow one of the modes prescribed by the statutes provided for that purpose. By the common law, the land of a deceased debtor was not liable for his debts. New Jersey Insurance Co. v. Meeker, 8 Vr. 295. The act of 1799, above referred to, charged the lands of the decedent with this liability, to be enforced in the mode indicated, through the action of the orphans court; but as it gave no protection to the creditor in case the heir or devisee had aliened the land before the executor took the action needed, the supplement of December 12th, 1825 (Harr. Com. p. 130), was passed, which declared that the lands of anyone dying seized should remain liable for his debts for one year after his decease, and might be sold &c. by order of the orphans court &c., any alienation or encumbrance made by the heir or devisee notwithstanding. See Gen. Stat. p. 3370 § 70. The testator, John Hartman, died July 22d, 1888. The defendant Krueger entered his judgment on March 4th, 1890. The mortgages made by the devisee, the priority of which is challenged by the judgment defendant, were both made within one year after the death of the- testator, and had- the judgment defendant been diligent in enforcing his remedies within the year, neither of these mortgages would have been deemed to be precedent liens to the title of a purchaser under an order for sale made by the orphans court. But the defendant Krueger suffered the year of limitation to expire without doing anything to compel the application of the lands to pay the testator’s debts,
Neither the judgment of the defendant Krueger nor his proven ■debt against the estate of the testator, John Hartman, is any lien on the mortgaged premises.
The main contention in the case is between the complainant, Mott, and the defendant Somerville, as to the ownership of the mortgage sought to be foreclosed.
That the previous holder, Isaac W. King, was the owner of the bond and mortgage in question, is admitted by all parties; that he assigned it to the complainant on the 29th of April, 1890, as collateral security for the payment of King’s note then discounted by Mott, who, in accordance with the contract of the loan, then actually paid to King $980, is either admitted or conclusively proved. It is also shown that King did not then deliver the bond and mortgage to Mott who asked for them, and that King evaded compliance, and to many repeated demands for actual delivery of the bond and mortgage made by Mott and his agent, Sayre, King replied that his wife objected, and a trustee who had charge of them refused to give them up &c.
In February, 1892, Mott recorded his assignment and about this time notified Mrs. Hartman, one of the mortgagors and the owner of the mortgaged premises, and álso her business man, Mr. Mill, of his assignment, and forbade the payment of either interest or principal to. anyone else.
It is the efficiency of this transfer of the mortgage from King to Mott, when asserted against the subsequent assignment of the same security by King, to Somerville, which is in question in this branch of this case.
Somerville attacks Mott’s title to the bond and mortgage upon several different grounds. He denies that Mott’s title'was per
There are in the discussion of that case dicta touching the general requirements of assignments of choses in action which seem to support the defendant’s contention. In that case a debtor, whose life was insured, marked on the policy an assignment and request to the insurers to pay part of the policy to the plaintiff to whom he was indebted, but he did not deliver either the assignment or the policy to the plaintiff. Shortly after the insured died. The administrator of the insured collected .the policy, and the plaintiff sued him for the portion claimed to be assigned. There was no delivery by the insured debtor to his. creditor, the plaintiff, of any evidence whatever of the transfer. Neither the assignment nor the policy ever left the possession of the insured. Chief-Justice Shaw held that the plaintiff acquired! no such interest in the policy as would support an action, declaring it to be impracticable to make a charge on a chose in action by an assignment which the assignor retained in his own possession. In the present case there was an actual delivery of a perfected assignment, and a payment therefor then made, of a full and valuable consideration, and with an undisputed intention at that time by that act to pledge the bond and mortgage, assigned.
The rule has long been established and is now of universal acceptance, that the possession of the thing pledged may be according to the nature of the subject. Wilson v. Little, 2 N. Y. 443. If the subject of the pledge be of an incorporeal character, as a debt secured by a mortgage, possession may be given either by actual delivery of the indicia, of the debt &c., or by written transfer to the hands or power of the pledgee so as to be made available to him for the satisfaction of the debt. Goods at sea may be pledged by an assignment of the bill of lading, and debts and choses in action may be pledged by a written assignment. Wilson v. Little, 2 N. Y. 447; Story Bailm. §§ 290, 297; Pars. Cont. 595.
In the case in hand, the thing intended to be pledged was the debt which Hartman, the mortgagor, owed. The mortgage itself was not the pledge, but only accompanying security of the bond which was the evidence of the debt. The making and
The defendant Somerville also claims that the complainant is estopped to deny his title to the mortgage, under the operation of the rule that if one of two innocent parties must suffer by a fraud, that one must bear the loss who enabled the fraud doer to consummate the fraud. There is no pretence that Mott either colluded with King in aid of his subsequent fraudulent assignment to Somerville or knew of such purpose, or had any information which might have warned him of such design. He had been persistent in his efforts to get possession of the mortgage from King for a long while before Somerville took his assignment. The only basis for criticism of Mott’s position is that he did not succeed in these efforts to obtain from King the actual possession of the mortgage, and Somerville insists that this fact alone enabled King to defraud him.
• This question has been considered in the courts of England, where there was no registry, when there was a first mortgage but no delivery of the title deeds, and the mortgagor having possession of the title deeds again mortgaged the estate and delivered the title -deeds to the second- mortgagee. In Tourle v. Rand, 2 Bro. C. C. *650, Lord Thurlow held that mere non-holding of the title deeds by the first mortgagee was not enough,
In New Jersey, the latest deliverance on the subject is that of the court of errors and appeals in Lawson v. Nicholson, 7 Dick. Ch. Rep. 823 (reversing Lawson v. Carson, 5 Dick. Ch. Rep. 370), where the holder of a mortgage had deposited a bundle of papers, among which was a bond and mortgage, for safekeeping, with a scrivener who had not only negotiated the loan and drawn the bond and mortgage, but who had been authorized to collect, and had collected, the interest from the owners of the mortgaged premises. The scrivener took the bond and mortgage out of the bundle, accepted payment of the principal from a subsequent owner of the land, and absconded. It is to be observed that the scrivener had, by the act of the owner of the mortgage
The court of chancery considered that the placing of the bond and mortgage by the owner of them with the scrivener, with authority to collect the interest, rendered the fraud' of the scrivener possible, and for this reason decided that the loss must fall on the holder of the mortgage. But the court of errors and appeals held that the facts did not justify the decision, and it declared, in substance, that the rule of estoppel in such cases is, Did the party sought to be estopped act in such a way as to lead the other party reasonably to the conclusion of fact upon which he acted to his damage? The fault of the party against whom an estoppel is sought to be worked must not only have existed, but it must have been the occasion of the injury to the party who sets it up.
In the case in hand, the fault of Mott, which is alleged to have caused the injury to Somerville, was his omission to secure possession of the mortgage from King, and it is claimed that Somerville was by reason of his reliance upon the possession of the mortgage by King led to advance his money. But by his own testimony and the admissions of his counsel on the taking of the evidence, it appears that Somerville did not act upon the ■possession of the mortgage by King as evidence of his ownership. On the contrary, Somerville himself testified that on March 25th, 1893, before he first took the mortgage as collateral security for a loan, he caused a search to be made to- ascertain whether King had assigned the mortgage to some one else, and afterwards caused another search to be made before he absolutely purchased it. The representative of Somerville, in making these searches, made a mistake and overlooked the assignment to Mott, though it was then properly recorded, and when he had reported the record “ all right,” Somerville) relying on this statement and not on King’s possession of the mortgage (which he
The cause of Somerville’s loss was therefore not Mott’s, omission but the blunder of Somerville’s own lawyer, who failed to discover and report the record of the previous assignment when he made his search. The mere coincidence that Mott had not obtained possession of the mortgage from King and that King succeeded in cheating Somerville into accepting a second assignment, will not sustain an estoppel. The act or omission of Mott must have created an apparent condition of facts which Somerville accepted as true and relied upon, and because of this acceptance and reliance he must have parted with his money. From the circumstances shown, Somerville was not relying on the condition created by Mott’s omission (if the latter was indeed responsibly at fault at all), but upon his own lawyer’s mistaken search of the records. An estoppel is worked not because the loss to the party injured was a succeeding event to the act or omission of the party to be estopped, in dealing with the subject-matter of the transaction, but because the act or omission of the party to be estopped was the moving cause which led the party injured to do the act resulting in the loss. There must have been a relation of cause and effect, by which the injury and consequent loss.to the injured party were the result of the previous misconduct of the party to be estopped. The party setting up an estoppel must show that he relied on, and was misled by, the conduct imputed to the party to be estopped. Magie v. Reynolds, 6 Dick. Ch. Rep. 118.
It was claimed that at the time he approached Somerville, King was the apparent owner of the bond and mortgage, but I have been unable to discover in the testimony taken that this fact came to Somerville’s notice, or that he acted on any such apparent ownership in King. King was not one of the mortgagees. No assignment to him was proven to have been exhibited to Somerville. The latter testifies that King came to him with “ two bonds and mortgages,” but he nowhere states •that he ever saw any assignment of them to King whereby he-appeared to be the owner. No such assignment to King appears
Whatever of fault was imputable to the complainant because of his omission to secure possession of the mortgage, was, however, certainly cured by his recording of his assignment. The estoppel is claimed because it is alleged Mott permitted King to appear to be the owner of the mortgage, whereby Somerville was misled. The recording by Mott of his assignment, long before Somerville acted, is hereinafter shown to have been full notice -to Somerville that Mott was the holder of the mortgage.
The defendant Somerville also insists that he took the mortgage from King for value paid ; that he had no notice of Mott’s assignment, which he claims is a mere latent equity in no way binding upon him. There is no dispute that Somerville did act in good faith in the purchase of this mortgage from King; that he had no actual notice of Mott’s previous assignment, and that he paid value for the mortgage when he took it. To maintain his claim that he had no notice of the assignment to Mott, he declares that the statute (Rev. p. 708 § 88; Gen. Stat. p. 8108 § 88), which provides for the recording of assignments of mortgages, prescribes only that the record “ shall be notice to all persons concerned,” and he insists that “ persons concerned ” means only those concerned at the time of the placing of an assignment on record, and, applying this construction to this case, he concludes that as Somerville had no interest in the mortgage at the-time Mott recorded his assignment, the record of it was no notice to Somerville when he accepted his assignment a year afterwards.
That bonds and mortgages and their transfers are not governed by the same rules as commercial paper has been, declared
The recording of assignments of mortgages was provided for in this state by the act of 1853. P. L. of 1853 p. 241. This •act authorized the recording of assignments of mortgages, and declared that “ such recording shall be notice from the time such ■assignment is left for that purpose to all persons concerned that said mortgage is so assigned.” In 1863 (P. L. of 1863p. 867), an additional act was passed, declaring that mortgages and all, writings containing any agreement for the payment of money should be assignable; that the assignee might sue thereon in his own name; that set-offs against the assignee should be allowed, ■and that “leaving the assignment in proper office to be recorded shall be notice of the assignment of the mortgage.” These statutes were consolidated in the Revision of 1877 p. 708 §§ 38, S3,34- In the Revision, the provision as to notice by the record •of the assignment is that
.“such recording shall he notice from the time such assignment is left for that purpose to all persons concerned, that the said mortgage is so assigned; and the assignment of any mortgage by an assignment or assignments not recorded shall be bound by the proceedings and sale in any foreclosure suit against any previous holder.”
The language of this- act expressly provides that the record .of the assignment shall be notice “ to all persons concerned.” -The statute prescribes the effect which the record shall have in the future; it is thereafter a warning without limit of time. The warning is to all persons concerned, and the words of the act do not limit the class to persons concerned at the time of the recording, else the act would have been expressed as notice to all persons then concerned. Under the law existing when these statutes were passed, providing for the recording of assignments of mortgages, there was no method whereby the assignee could give notice of his newly-acquired rights to those who were or might be interested in the property, save by successive actual notices to each person who had or might receive an interest. On
The construction of the statute, by the weight of the cases which discuss the question, is in accordance with the popular acceptance of the meaning of the act. I am referred to Kamena v. Huelbig, 8 C. E. Gr. 80, as sustaining the defendants’ view that the notice by the statutory record, all persons concerned, of the assignment of a mortgage did not include a second assignee •of a mortgage. That case held that no notice was required to the second assignee, and that he took the bond and mortgage subject to all equities. The learned chancellor, in his opinion, did say that assignments of mortgages “ are not required to be recorded except as to the mortgagor, to protect him in pay
It must be held that the defendant Somerville was notified of the previous assignment to the complainant, Mott, on the 5th day of February, 1892, when the latter’s assignment was recorded.
The mortgagor and Mrs. Hartman, the devisee of the mortgagor, and the German Hospital, the devisee of Mrs. Hartman, likewise had constructive-notice from the date of that record as
I will advise a decree in accordance with the views above expressed.