29 Conn. 282 | Conn. | 1860
The facts in this case are exceedingly nu
In view of the character and pecuniary importance of the cause, we have kept it under consideration for several weeks, but we find, after a careful examination of it, and a full consultation, that our views are essentially, if not entirely harmonious. If they differ at all, the disagreement is not such as to affect the result, as we had severally arrived at the same conclusion.
The petitioner, Henry S. Rowan, who represents the British government, seeksffo redeem certain mortgaged premises described in his petition. His title is derived from a mortgage given by Robbins & Lawrence to the Robbins & Lawrence company, a Vermont corporation, dated December 9th, 1854. This mortgage was given to secure a note of $75,000, given by Robbins & Lawrence for an indebtedness to the corporation, which note, with the mortgage, has been assigned for value by the corporation to Fox, Henderson & Oo., and by them to the petitioner.
The premises are sought to be redeemed from the respondents as being mere prior mortgagees; and the questions made by the petitioner are, substantially, what is the property mortgaged, and what is the prior incumbrance of the respondents which must be paid off by the petitioner, if he redeems, or first satisfied from the mortgage fund.
The respondents make here a preliminary question, whether the petitioner has any right whatever to redeem. They deny that he has any right of redemption whatever. They say that they were the owners of the property in fee, by virtue of the contract of January 9th, 1852, and the deed of the real estate given them soon after, and that the petitioner can not redeem the property out of their hands. They say further, that if the respondents are indebted to Robbins & Lawrence in consequence of their purchase of the armory property under the contract, yet that the mortgage does not purport to assign to the mortgagees the debt due to Robbins & Lawrence, which
We have not thought it important to examine this question with particular care, because, even if the petitioner’s claim is correct, he has not shown that there is a balance due from the respondents, to be paid to any one.
In our view the petitioner is clothed only with the rights of an assignee of Robbins & Lawrence, and can stand only in their place as to the debt in controversy. The Robbins & Lawrence Company, by their mortgage of the 9th of December, 1854, obviously took only what Robbins & Lawrence could convey to them as their own. The public records showed that the title to the real estate had never been vested in them, nor does it appear that they had, at any time, even an equity in the real estate, except in an event which has never yet happened. The premises were fully vested in the respondents. They are found by the committee to have been owners in fee from the time of the original purchase, and to have taken the title directly from the persons of whom the land was purchased, and soon after the execution of the contract of January 9th, 1852, and it did not appear from the public records that there was any condition whatever attaching to their title, or any equity whatever in favor of Robbins & Lawrence. Nor was there, in fact, any equity in their favor, except what may be gathered from the contract of January 9,1852. We must therefore examine that contract, (and perhaps the later contracts of November 9th, and December 11th, 1855, in determining the final rights of the parties,) to see what was the
We would remark, however, that in considering the question with regard to the relative rights of the parties throughout the case, the personal property covered by the mortgage of Robbins & Lawrence to the respondents, and by the later mortgage to the Robbins & Lawrence Company, now held by the petitioner, may, with the exception of certain machinery and stock subsequently purchased and described in both mortgages as after acquired property, and of which we shall speak more particularly hereafter, be wholly laid out of the case. The whole of the personal property, not including the stock, is found to amount to only $59,174, while the mortgage debt of the respondents is much larger. It is obvious that they may equitably first apply the whole of this fund to their mortgage debt, leaving the real estate alone to be the subject of controversy. The petitioner can not complain that the property mortgaged to the respondents, and which was mortgaged to him expressly subject to that mortgage, should be applied to the payment of the respondents’ mortgage debt; while, as we shall endeavor to show, the respondents have a claim on the real estate, founded upon the contract of January 9,1852, and the legal title vested in them under the provisions of that contract, which is not only superior to the title of the petitioner, but is independent of, and superior to, the title conveyed by their own mortgage of September 1853. Considering then the real estate as really alone in controversy here, (except the
By the contract of the 9th of January, 1852, the respondents are not obliged to release the property of which they took the legal title until the contract was fully performed by Robbins & Lawrence. This event has never happened. Of the twenty thousand rifles which they were to manufacture and deliver under that contract, they are deficient in the number delivered to the extent of three thousand and eighty. They were also deficient, at the time of their failure, in the number of arms to be delivered under the contract of November 9, 1855, having delivered but two thousand nine hundred of the six thousand five hundred which they contracted to deliver. And by the contract of December 11, 1855, known as the extension contract, the respondents are not required to elect whether to take the property or to release it, not only until the contracts of January 9, 1852 and November 9,1855 are performed, but until “ all indebtedness ” of Robbins & Lawrence to them is paid; and this event has not taken place.
But not to dwell on these partial failures, there are yet other and more important defaults and omissions on the part of Robbins & Lawrence, which stand in the way of their right to a release of the property, or to the payment of any part of the fund in the hands of the respondents. In no just sense have Robbins & Lawrence bought land for an armory, as stipulated, for the respondents; or erected buildings and supplied them with machinery and tools adequate to the manufacture of ten thousand rifles annually; or purchased stock and manufactured twenty thousand rifles, which they were to do by the first day of January, 1855; but, on the contrary, they became embarrassed at an early period of the business, and at last failed and abandoned both their contracts. Under their embarrassments, being unable to go on, they had called upon the respondents, “ urgently’'’ as is found, to render them assistance, to enable them to perform their first contract, and afterwards that of November 9, 1855. And the respondents did assist them, by advancing money towards the purchase of
This view would seem to be correct on the further ground, which was urged by the respondents’ counsel, and in support of which numerous authorities were read, that whatever the respondents were compelled by their position to do, or in fairness might do, to assist Robbins & Lawrence in the performance of their contracts, by advancing money to prevent the damages which would result from the non-performance, may be an equitable charge upon the property or the fund, especially if the advancements were made at the request of Robbins & Lawrence. A case so circumstanced belongs to the class of cases in which a trustee or mortgagee who has advanced money to protect the property from injury or loss, is held to have a good charge upon the property for the money so advanced. The authorities say that such payments are expenses incurred in faith of the security, with a view to make the interest of the other party more beneficial to him; and it is even said that the necessity for these expenditures may be so palpable, that an omission to make them may subject the trustee or mortgagee for neglect of duty. It appears to us to be equitable, as a general rule, that where the expenses have been incurred in good faith, and were designed and have a tendency to diminish the incumbrance, or otherwise to benefit the security, they should be held to be a good charge upon the
It is a general doctrine of equity, familiar to us all, that a petitioner asking for equity must first do equity; and so far has this doctrine been carried, that, in England certainly, it is well established that a mortgagor who seeks to redeem the property from the mortgagee, may be required to pay, not only the mortgage debt, but debts secured by other mortgages, if they have become due. In the case of Phelps v. Ellsworth, 3 Day, 397, the old Court of Errors applied the rule to the case of a mortgagee seeking a foreclosure, and obliged the mortgagor to pay a debt secured on other lands, as a condition of redemption. The general doctrine is sustained by all the authorities. 1 Story Eq. Jur., § 64. Walling v. Aiken, 1 McMullen Eq., 2, 14. 1 Mad. Cha., 424. 2 Cruise Dig., tit. 15, Cha. 3, § 35. 1 Lead. Cases in Eq., 429, et seq. Mergrave v. LeHooke, 2 Vern. 207. Pope v. Onslow, id., 286. Reason v. Sacheverell, 1 Vern., 41. Jones v. Smith, 2 Ves. Jr., 372. American decisions, both of our own and our sister states, sustain the general principle laid down in the case of Phelps v. Ellsworth. Scripture v. Johnson, 3 Conn., 211. Chamberlin v. Thompson, 10 id., 251. Lampson v. Sutherland, 13 Verm., 309. Budgden v. Carhartt, 1 Hopk. Cha., 234. Townsend v. Empire Stone Dressing Co., 6 Duer, 208.
If this equitable doctrine is to be applied to this case, as we think it must, at least in its spirit, it puts an end to all claim of Robbins & Lawrence and their assignees to the property in question, or the pecuniary fund which represents it, until they pay to the respondents, or allow them out of the fund, in addition to their mortgage debt, this sum of $75,772.40.
But it is said that these moneys were not advanced, certainly not all of them, before the mortgage under which the petitioner claims was executed. That mortgage was executed on the 9th day of December, 1854, and was immediately after
But if some of the advancements were made after the 11th day of December, 1855, when the respondents received actual notice of the mortgage under which the petitioner claims, we do not see that it would make any difference, nor that it would alter the case if all the advancements were made after that date. We regard all these advances as authorized by the contract of January 9, 1852, or by that of December 11, 1855, extending the lien upon the property to the contract of November 9, 1855, and to all the indebtedness of Robbins & Lawrence. So far as the first of these contracts is concerned, the respondents might continue to make all necessary advances to prevent the failure of Robbins & Lawrence to perform the contract and the damage to the whole property from such failure, even after actual notice of the petitioner’s mortgage. This necessarily results from the principles which we have already discussed. We are much inclined to think this con
It is very manifest that the respondents had already become deeply committed in behalf of Robbins & Lawrence, and were obliged to go forward or take the ruinous consequences. Further advancements were necessary to enable them to complete their contracts and to prevent a failure that would be
Applying then these principles, and stating the account between the respondents and Robbins & Lawrence or the property, at what result do we arrive ? Allowing the respondents to be properly charged with the value of the whole armory property, including the stock, of which we will speak presently, they are accountable for a fund, amounting as found by the committee to ... $147,241.32
Erom this it is agreed that the mortgage debt of the respondents is to be taken, amounting to, . $71,610.30
Add to this the advancements in question, - . . 75,772.40 $147,382.70
And first, as to the personal property brought into the armory after the execution of the mortgages, and taken by the respondents in their final purchase of the entire property. This property consists mainly of the stock, valued at ¡$41,-478.21. If covered at all by the mortgages, it is by force of the following clause, which is substantially the same in both:— “ And all the machinery, tools, stock manufactured and in process of manufacture, fuel and personal estate, in said factory buildings, or which may be therein during the continuance of this mortgage.” We have, in stating the account, made the respondents chargeable with the value of the whole property taken by them, including the property now in question. It was taken by them and used for their own benefit with the rest of the property, and they are clearly liable to account for it. But we all think that the petitioner is entitled to have this sum applied to enlarge the general fund in his favor. There is, in any view, a debt for that amount, for so much property delivered to and received by the respondents, with the other property specifically described in the mortgage; and whether the respondents did or did not acquire a title thereto by their mortgage, we need not decide. We all agree that the stock did not pass in presentí, as it was not then in esse, but we think it was sufficiently described in the mortgage, so that when afterwards purchased and placed in the building,
The respondents claimed upon the argument, that, if there was any balance in their hands to which the petitioner was entitled, they had a right to set-off against the claim, a large claim which they had against the British government, for whose benefit confessedly the petitioner was suing, consisting in part of the sum of if25,950, besides some interest upon it,
And we think that this may be done, although the British government, as a foreign sovereignty, may not be liable to be sued in our courts, as we are inclined to think that it is not, since it is here asking for the interposition of the court, and has voluntarily come under our jurisdiction.
For these reasons we advise the dismissal of the bill.
In this opinion the other judges concurred.
Advice that bill be dismissed.