Rockwell v. Hobby

2 Sand. Ch. 9 | New York Court of Chancery | 1844

The Assistant Vice-Chancellor.

There is no question but that the testator paid all the money with which Mrs. Hobby’s bond and mortgage were satisfied to Barker or obtained from him. Mrs. H. alleges that they were paid with her own funds. Of this there is no proof, and the testimony corroborates the inference arising from its coming out of the testator’s hands, that it was his money. Barker says that before suing the bond he applied to her for payment, and she answered that she had not the money. He told her he wanted her to procure it of some neighbor, and she said she would look it up. This shows not only that she had not the money, but that she expected to borrow it. We next find her son, after she has been sued, coming forward and paying it, and taking receipts which express that he made the payments. I am satisfied from the evidence, that the money paid was his own.

The next question arises upon the possession of the bond and mortgage, and what became of them. That they are either lost or destroyed, we may assume from the statement in the answer. They doubtless passed from the possession of Barker’s attorney, to that of Mr. Mead the attorney who appeared for Mrs. H. in the suit on the bond, and who made the payments to the attorney of Barker. Mr. Mead was probably the attorney in some measure, of the testator as well as of Mrs. Hobby. It appears he sent to the testator’s counsel Mr. Grim, his bill of costs for the defence put in to the suit on the bond, to which is appended a charge for conveyancing done for the testator, and endorsed on the bill is a note to Mr. Grim, saying that he thinks the within bill should be paid before the assignment of the mortgage, &c., are given to Mrs. Hobby. This shows him acting for both.

At all events, we trace the possession of the bond and mortgage no further. Mr. Mead perhaps retained them for the payment of his bill, and the most probable conclusion as to their fate is, that they were burnt with his law papers many years ago.

The expression in his note in reference to the assignment of the mortgage, is a part of the res gesta, and doubtless related to this transaction. And had the name been Mr. instead of Mrs. Hobby, or if it were after the death of the testator, I should have felt no difficulty in holding that there was to have been a transfer of the mortgage to the testator. As it is, the matter is involved in much obscurity. This testator may, for his mother, have done what is not usual, viz. advanced his money to take up a mortgage, without intending to keep it on foot as a security. His retaining the receipts is consistent with either supposition. If the case rested here, it would preponderate strongly in favor of his having in view an assignment, or at least retaining the security.

There is another transaction which may aid in solving the difficulty. The bill claims that on her son’s making these advances, Mrs. H. deposited with him her deed of the mortgaged premises, then unrecorded, as security for such advances, and that it remained with him till his death, and the complainants have had it ever since. The answer denies the deposit, and says that Mrs. H. supposed that the deed was recorded, and that she had it in her own possession. The deed is produced by the complainants, and it has not been recorded. It does not appear when or how it came to the possession of the testator or of his representatives. Coming from the latter, we are to take it in the absence of explanation, that it was among the papers of the testator.

And in the absence of all other proof, the evidence of an advance of money and the finding of title deeds of the borrower in the possession of the lender, is held to establish an equitable mortgage. In Ex parte Corning, 9 Ves. 115, Lord Eldon says that the fact of the adverse possession of the deeds in the person claiming the lien and out of the other, was a fact, that entitled the court to give an interest.

In Ex parte Wetherell, 12 Ves. 401, the same Chancellor says, “it is very well settled, that if there has been a delivery of deeds, that, in this court, arnoünts to an equitable mortgage; and the possession of the deeds is, if no other purpose is shown, evidence of an agreement that the estate itself shall be a security.”

In Ex parte Haigh, 12 id. 403, the evidence was, an application by one very much embarrassed, for assistance by discounting ; after which application the lease was delivered. This was held sufficient to establish an equitable mortgage.

In Ex parte Langton, 17 Ves. 230, Lord Eldon said, “it has been long settled, that a mere deposit of title deeds upon an advance of money, without a word passing, gives an equitable lien.”

Long before this, Lord Thurlow held in Featherstone v. Fenwick, 1 Bro. C. C. 279 n., and in Harford v. Carpenter, 1 id. 370 n., (see them stated by Lord Eldon in 14 Yes. 606;) that if there were a deposit of a lease, and nothing more passed at the time, that should be intended as a deposit for the sum then due. And see 2 Hovenden’s Supplement to Yesey, Junior, 104, the note to Ex parte Corning, on the same subject.

Again, in Kensington, Ex parte, 2 V. & B. 79, 83, Lord Eldon says, “ it has been so long settled that a mere deposit of deeds, withot a single word passing, operates as an equitable mortgage, that whatever I might have thought originally, I must act upon that as settled law.”

In the case before me, the deed went into the possession of the testator for some purpose. None is specifically proved; but there is an advance of money proved, an advance which went to discharge a mortgage given in truth for a part of the purchase money of the land described in that deed. The only inference is, that the deed was deposited as security for the advance.

In connection with the expression before adverted to, in Mr. Mead’s note to Mr. Grim, it may be that the deed was left as security, while the advances were making from time to time, and with the expectation that when they were completed, and Barker paid off, the mortgage would be assigned. In this view the lien would be equally operative. The cases of Wright, Ex parte, 19 Ves. 258, per Lord Eldon, and Hockley v. Bantock, 1 Russell, 141, 145, show that an agreement to give a mortgage and delivery of the title deeds for the purpose of carrying it into effect, constitute a mortgage in equity, as against the person making the agreement.

The testimony of DuSenbury confirms the supposition that there was either an agreement that the mortgage should be assigned, which Mrs. Hobby supposed had been carried into effect, or an agreement that the deed should remain in the testator’s hands as security. He testifies that she said she was willing the executrix should have the land, but she would rather the sale of it would be postponed until her youngest child became of age, and then the whole property could be sold to better advantage by being sold together. The evidence is that the land in question was bought by her to add to land which she previously owned. The conversation could not have referred to the testator’s interest or that of his family, in the latter property, because it conceded the claim of the executrix to have the whole of the land spoken of. And as there is no other right, or claim discoverable from the evidence, except that arising from the testator’s advances to pay off the mortgage, the conversation must have • referred to that subject. Upon the whole, my conclusion is that the advances were made upon the security of the property, and that the testator had an equitable lien for the amount. If the deed were deposited as security the lien is direct; and if there were an agreement to have the mortgage assigned, equity will treat it as having been done, in order to give it effect.

In either view, the statute of limitations is not applicable, and I need not examine whether the Revised Statutes apply to equitable demands existing when they went into operation.

There must be a decree for a sale of the premises, for the payment of the testator’s advances with interest, and the complainants’ costs.