Stackpole v. Robbins

| N.Y. Sup. Ct. | May 7, 1866

Miller, J.

The facts presented upon the present appeal, do not appear to differ essentially from those which existed when this case was before the general term for review, on a former occasion, when the decision of the referee was reversed.

As no opinion was then written, showing the grounds of reversal, it may perhaps be well to examine the questions presented, the same as if the case was now for the first time before us,

The principal question which arises, I think, is that which relates to the effect of the judgment of this court which vacated and set aside the foreclosure and sale by the commissioners of loans, under the Millar mortgage, and all the subsequent proceedings of the commissioners which were based upon that sale and foreclosure.

I think the judgment and decree in favor of the plaintiff^ in the action against the commissioners of loans, did not destroy the lien of the Millar mortgage; and the sale by virtue of it having been vacated and set aside, and the proceedings canceled and discharged of record, it remained in force, the same as if no proceedings had been instituted to foreclose it.

The allegations in the complaint in that action, which are also incorporated, to a certain extent, in the final judgment and decree, show that the advertisement or notice of sale was illegal, and not published or fixed up within the time, and in the manner prescribed by law; that the conveyance of the premises and the mortgage taken back were illegally executed ; and that the proceedings were collusive and colorable, merely, and were made and done fraudulently, and with the intent and for the purpose of defeating and destroying the plaintiff’s debt and his title to the premises. The judgment and decree adjudges that those proceedings are illegal, inoperative and void, as against the plaintiff, and that they be discharged of record.

I think the legal effect of the judgment was to vacate and annul all the proceedings, and to restore the Millar mortgage to the same position which it had occupied, prior to their being commenced. If such was the case, then it remained as if it had never been foreclosed, in fact, prior to the advertisement and proceedings, to restrain which, this action was brought. If the judgment obtained by the plaintiff was valid and effectual, then there was no legal foreclosure or sale, and whatever had been done previously was null and void, and the same as if it never had been done. If I am correct in this view of the subject, then the mortgage stood as it was upon the record, a prior and an older claim and lien upon the property, which could only be avoided or canceled by some superior or stronger title.

It is insisted that the judgment setting aside the foreclosure by the commissioners of loans, of the Millar mortgage and the sale under it, operated only in favor of the plaintiff, and that the defendants can not avail themselves of it, for that reason. This, argument is based upon the ground that the action was founded upon the alleged fraud and collusion of the defendants therein, and as the parties and their privies could not relieve themselves from any of the consequences, so they can not avail themselves of the advantages of the decree. Whatever fraud there was in the case, so far as tbe evidence exhibits, it related to the manner in which the foreclosure and sale was conducted; and while it might vitiate that proceeding, it did not strike at, or in any way affect, the validity of the mortgage itself. That was not attacked, but only the means employed to enforce its collection. While the judgment vacated the proceedings which were illegal and tainted with fraud, it did not interfere with a legitimate effort to collect the mortgage. It is difficult to discover how the judgment could render the proceedings inoperative as to the defendants, and make them valid as to the plaintiff. If the sale was adjudged to be void as to the plaintiff, can the plaintiff in this action ask the court, now, to adjudge that they were valid as to him ? It appears to me that this would require an entire reversal of the former decision, and involve a degree of inconsistency which is entirely irreconcilable with any sound and well settled legal principle.

Nor do I think that it required the direct and affirmative judgment of the court to reinstate the Millar mortgage and to restore its lien upon the premises. The sale.being vacated and the proceedings set aside, the mortgage necessarily remained in full force and effect. Its lien upon the premises was not destroyed, and no special-relief was required in favor of the defendants. The court, by its judgment, simply canceled and discharged of record the proceedings already had under the mortgage, and that reinstated it in its former position as an incumbrance upon the premises. ■

I think the case under consideration varies essentially from one where the proceedings have been regular and legal, and the payment of the amount secured has been realized and the property mortgaged applied for that purpose. There the debt would have been paid, while here it remains due and uncanceled. A sale of real estate under a proceeding which is pronounced to be illegal and invalid, can not operate to extinguish a valid mortgage, to satisfy which the sale was made. The power of the mortgage is not exhausted by any such illegal sale ; and upon its being vacated, the mortgage becomes as effective as if no proceedings had heen had. As the proceeding has heen adjudged to be invalid, and has failed to accomplish the object intended, the mortgage remains in full force and effect. No rights are affected by it. The plaintiff has the same remedy which he had before, and has attained no advantage which justifies a claim on his part that the mortgage is invalid. The mortgagor is not injured, as he has not paid the debt; and the mortgagees are not affected by it, as they have never received the sum secured, or obtained any satisfaction.

It is said that the mortgage was paid and canceled by the judgment, and that it is no longer a lien. This would no doubt have been so if the proceedings had been regular, but as they have been declared to be null and void, and have been canceled, the mortgage remains the same as if they never had been instituted. The judgment did not affect the validity of the mortgage, and there >s no adjudication to that effect. While the taking of a new mortgage from a purchaser, for the purchase money, is equivalent to a payment, yet where the sale is set aside and the conveyances and mortgage given are canceled, it becomes ineffective as a payment, and the mortgage still remains unliquidated and in force. The security thus given, having failed, it must be considered as if no payment whatever had been made.

The recital in the conveyance, by the commissioners to the purchaser, that the money had been paid, is explained by the evidence, and rendered of no avail by the judgment setting aside the conveyance. The deed being annulled, it is not a valid conveyance in law.

The release of the purchase money by the commissioners, in the deed to Streeter, and the taking by them of a mortgage upon the premises from Streeter’s grantee, Van Alstyne, I think, also stands upon the same footing. It is sufficient that they have been set aside, and that the commissioners have not received the amount secured by the mortgage.

An argument is also pressed upon us, that the defendants are estopped by the acknowledgment in the deed from the loan commissioners to Streeter, and the deed from Streeter to Van Alstyne, and the mortgage from Van Alstyne to the loan commissioners, and hy the payment of a portion of the principal and some of the interest upon the mortgage. I think there was no estoppel. There was clearly no estoppel in pais, within the principle laid down in several leading cases. (Welland Canal Co. v. Hathaway, 8 Wend. 483. Dezell v. Odell, 3 Hill, 219. Hawley v. Griswold, 42 Barb. 18.) It is not pretended that the plaintiff acted upon the admission in the deed, that the money was paid, or upon any of the facts referred to. He acquired his title long before a conveyance to Streeter, and his action afterwards was in disaffirmance of the sale, by the commencement, carrying on, and consummating proceedings, to vacate and set aside the sale, and hence he is not in a position to avail himself of any such rule. It is urged, however, that it was an estoppel by deed, or matter of record, which concludes the party without regard to the moral qualities of his conduct.

. There are several difficulties in the way of applying this principle to the plaintiff in this action.

1. The plaintiff was not a party to the deeds, and as a stranger, it is exceedingly questionable whether he is in a position to take advantage of it. (4 Com. Big. 76, title Estoppel, C.)

2. The judgment setting aside the sale, conveyances and mortgage, and all the proceedings, were had at the instigation and procurement of the plaintiff, and I think he is precluded from insisting that they remain in force after having been thus vacated.

3. The deeds and mortgage having been canceled and annulled by a competent tribunal, they can not be reinstated for the purpose of enforcing a technical rule in favor of a party who had no connection with them originally.

It may also be observed, that the evidence introduced by "the defendants, in reference to this branch of tire case, was not solely for the pin-pose of defeating the conveyance, for that had already been done by the judgment of the court; but to explain that the consideration money therein mentioned, although admitted to have been paid, in fact had not been paid.

In general, the consideration clause in a deed is not within the rule excluding parol evidence in contradiction of a writing. (Adams v. Hull, 2 Denio, 306. Jackson v. Schoonmaker, 2 John. 230. Whitbeck v. Whitbeck, 9 Cowen, 266.)

Its effect is to estop the grantor from alleging that the deed was executed without consideration, and for every other purpose it is open to explanation, and may be varied by parol proof. (McCrea v. Purmort, 16 Wend. 460.)

I think the object of,the testimony, and its effect, brought it within the rule laid down, and therefore it was properly admitted. And where it is thus admissible, the fact that the conveyance contains a release, does not interfere with the general rule. Such was the fact in the case last cited, and yet the party was permitted to show that iron of a specified quality, and at a stipulated price, was delivered instead of money being paid,-as was expressed in the deed. The learned judge who wrote the opinion in that case, expressly states, that the acknowledgment in the deed, that the consideration money had been received, is not conclusive evidence of the fact, and that even as between the immediate parties, it comes down to the rank of prima facie evidence, for the purpose of giving effect to the operative words of the conveyance. In speaking of a written release as an extinguisher, of itself, I do not understand him to mean the releasing clause in a conveyance which usually accompanies an acknowledgment of the receipt of the money, but an absolute, separate and distinct release. Nor do any of the authorities to which we have been referred in the elaborate and learned brief of the plaintiff’s counsel, in my judgment, sustain any such doctrine.

Some other views are urged, which I have examined, but which I do not deem it essential to discuss at length, as the remarks already made cover the questions involved in the case.

[Albany General Term, May 7, 1866.

It follows from the considerations presented, that there was no error on the trial before the referee, and that the judgment must be affirmed, with costs.

Hogeboom, J. concurred.

lit galls, J. expressed no opinion.

Judgment affirmed.

Miller, Hogeboom and Ingalls, Justices.]