Stantons v. Thompson

Jun 15, 1870

Versions:

Bellows, C. J.

The instructions to the jury were apparently based upon the opinion of the whole court, in a case made upon the trial of this cause in 1854, and it becomes important to ascertain what that opinion was, and whether it must furnish the rule for this case; for, according to the decision in Bell v. Woodward, 47 N. H. 542, the opinion formerly given may be the law for this case, so far as it applies, in all its stages.

This decision in Bell v. Woodward, is sustained by many decided cases, some of which put it upon the ground that a decision of the highest court in the same cause must be regarded as res adjudicóla. Whether all the circumstances that made the 'former decision obligatory in Bell v. Woodward, it is not necessary at present to inquire.

What, then, was the opinion given in the former case. It was decided that by the taking of the quitclaim, and nothing appearing to show a contrary intention, it must be understood that defendant received the premises conveyed as part or entire payment of the mortgage debt, and the mortgage must be regarded as merged or discharged, and that the defendant’s only title to the land and consequently his only title to the machines, at this time, is under this deed.

The question then is, what was settled in the former case. The substance of that decision was that prima facie a mortgage must be regarded as extinguished and merged in a quitclaim deed from the-mortgager, unless a different intention appears, and there are many authorities that maintain this position, and among them is Greenough v. Roles, 4 N. H. 363, and cases cited.

This decision in the former case, does not attempt to discuss or consider whether a state of facts, such as are now disclosed, would *276bo evidence of an intention that the mortgage should not be merged in the later title, nor is any opinion given as to the bearing of the facts then before the court on the point of intention, but the effect of the decision was simply this; that when nothing appeared but the mortgage and quitclaim, the mortgage title would be regarded prima facie as merged in the quitclaim, and the verdict seems to have been set aside to give an opportunity to try the question in connection with the question of notice to defendant, of the situation of the machine. Nor does it appear from the case, as then reported, that there was any evidence of an intention to keep on foot the mortgage. It is true that the ease provides, that the parties may refer to an agreement between defendant and Hutchinson, but it would seem that this was the agreement of April 1, 1861, under which Hutchinson had possession of the mill; nor does it appear distinctly from the case as reported, that there was any intervening title to the sewing machine ; it not being stated that defendant had any notice, before the quitclaim died; whereas the case now before us, goes upon the ground that there was such intervening title, which must prevail against the defendant, unless he can set up his mortgage as a subsisting title, the instructions of the court show this ; and besides, by the agreement of May 9, 1861, the inference is strong that, although defendant was no longer to have claim on Hutchinson personally, for the payment of the mortgage debt, he was to retain the notes, to enable him to enforce his security upon the land. From this, and the fact that the notes were not given up, the argument is well nigh irresistible, that neither party intended nor understood that the mortgage title was extinguished. The decision in the former case, therefore, cannot be understood as controlling the case in its present aspects.

In the one now before us, the instructions to the jury were in accordance with the former decision, but it was also left to the jury to determine whether the parties did, or did not intend that the mortgage was extinguished and merged in the subsequent title, and the court declined to instruct the jury as requested by the defendant that the mortgage was not merged in the quitclaim deed, and to these instructions defendant excepted.

The question is, whether the instructions asked for, ought to have been given, instead of leaving it as matter of fact to the jury. As the case now stands, if defendant holds under the quitclaim and alone, then, as he had previous notice that the plaintiffs held title to the sawing machine, and that it was not to become the mortgager’s property until paid for; the plaintiffs would hold it; but if defendant can be permitted to set up his mortgage as a source of title, it must cover this machine, and the defendant must prevail.

On this point, I am of the opinion, that upon such a state of facts showing a title intervening between the mortgage and quitclaim deed, it is tó be presumed as matter of law, that the parties did not intend to extinguish the mortgage and that the instructions asked for, ought to have been given.

This doctrine is well established in New Hampshire, and is applied *277even to cases when in point of fact, as the case then appeared to the parties, they intended to discharge the mortgage, and the notes were accordingly given up; and even when the mortgage was formally discharged. These cases are very numerous and, we think, decisive.

In Hunt v. Hunt, 14 Pick. 384, Shaw, C. J., lays down the rule thus : That to effect a merger at law, the right previously acquired, and the right subsequently acquired, in order to coalesce and merge, must be precisely co-extensive, — must be acquired and held in the same right, and’ there must be no right outstanding in a third person to intervene between the right held, and the right acquired. If any of these requisites are wanting, the two rights do not merge, but both may well stand together. In Lockwood v. Sturtevant, 6 Conn. 387, Hosmer, C. J., lays it down as a general rule, that when a greater and lesser estate coincide, and meet in one and the same person, without any intervening estate, the lesser estate is merged or drowned in the greater. Chan. Kent in 4th Com. *103-4, lays it clown, that whether there is a merger or not, depends on the intention of the person in wliom the estates are united, if it be a just and fair intention ; and if he be not competent as by reason of infancy or lunacy to make an election, or if it be for his interest to keep the equitable estate on foot, the law will not imply an intention to merge. In 1 Wash, on Real Prop. 564, a similar doctrine -is laid down, that if it be for the interest of the holder of one of these titles that on acquiring the other, they shall be kept distinct that both may be protected, they will not merge, unless the contrary intent appears from the language of the deed, and that there will be no merger unless the law finds such to be the intention of the person in whom the titles meet, expressly declared or clearly to be inferred from such merger being to his advantage. So it is substantially laid dowm in 2 Story’s Eq. § 1035 b. See notes and cases. In James v. Johnson, 6 Johns. Ch. Rep. 423-4, it is held that generally when a legal and equitable estate are united in the same person, the equitable will merge in the other, except in special cases. Generally there is no use, in keeping them distinct, and to keep a charge on one’s own estate ; but when an intention to keep it up is shown, or something beneficial or useful requires it to be presumed, it may be. In Thompson v. Chandler, 7 Green. 381, it is held that if the purchaser of an equity of redemption take an assignment of the mortgage, it shall not operate to extinguish it, if it be the interest of the assignee to uphold it. So in Holden v. Pike, 24 Me. 437, and Hatch v. Kimball, 14 Me. 9, Simonton v. Gray, 34 Me. 50. In Freeman v. Paul, 3 Green. 260, where both estates were united in the same person, it was held that whether they merged, would depend on the intention, and if none was expressed, it would turn upon the point whether it was for the advantage of the mortgagee to uphold it, and thus stress was put upon the fact that there was no intervening incumbrance. In Gibson v. Crehore, 3 Pick. 475, it is held that when a purchaser of a right to redeem takes an assignment, this shall *278or shall not operate as an extinguishment of the mortgage, according as the interest of the party taking the assignment may be, and according to the real interest of the parties, and it is said that this doctrine is decisively settled in the English court of chancery and in England, and the same doctrine is affirmed in Gibson v. Crehore, 5 Pick. 146. So it is in Lord v. Lane & al., 8 Met. 517 ; and Savage v. Hall, 363. The New York doctrine is the same. James v. Morey, 2 Cow. 285, and cases, Gardiner v. Astor, 3 Johns. Ch. 53. Also in Connecticut, Baldwin v. Norton, 2 Conn. 161; and Lockwood v. Sturtevant, 6 Conn. 387, before cited; where there was a mortgage of land and a release of the equity and a giving up of the mortgage notes, it was held that it could not be presumed that the parties intended to extinguish the mortgage title, as this is usually with covenants of warranty, while the release is without such covenants, and that was held to be a good reason for holding the mortgage title not extinguished; otherwise in case of a failure of title, the party might be without remedy, and, therefore, the mortgagee was allowed to recover on the covenants in the mortgage deed. In Vermont, the release by mortgager to mortgagee in satisfaction of the debt, does not extinguish the mortgage, when it would operate to the injury of the mortgager. Marshall v. Ward & al., 5 Vt. 254; and Walker & al. v. Barker & al., 28 Vt. 710, where the doctrine is very fully recognized and considered. In Forbes v. Moffatt, 18 Ves. 391, the question is said to be, whether the party in whom there is a union of the equitable and legal estates, intends to keep up the charge. Generally it is of no use to him to do so ; but he may elect to keep it up. If he do nothing showing such election, the question will be upon the presumption of law under the circumstances, and if it be found that if it is for his interest to keep up the charge, it will be presumed he intended to keep it up. The master of the rolls, Sir William Grant said, that in looking into .all the cases where the charge was held to merge, he finds no case where it was not perfectly indifferent whether it did or did not. The doctrine of this case is lully recognized in Gardiner v. Astor, 3 Johns. Ch. 53. The same doctrine is laid down in 1 Mad. Ch. 540.

There are cases which hold, that when a mortgagor releases to a mortgagee, it shall be deemed to be merely an extinguishment of the right of redemption. Dexter v. Harris, 2 Mason, C. C. Rep. 531. In delivering this opinion, Judge Story holds that at law, by the mortgage, a conditional estate, in fee simple, passed to the mortgagee, and the only operation of the conveyance by one having the equity of redemption, would be to extinguish that interest, and thus to remove the condition.

It was not the drowning of a lesser estate, for the estate was already a fee simple. This is certainly more in accordance with the ordinary understanding upon the subject, which looks upon such a release in general as merely a foreclosure of the mortgage, and not an extinguishment of it, and that is shown by the fact that these releases are usually without warranty of title. If we look then to *279the intention of the parties, in determining whether there is a merger of the mortgage title or, not, we should ordinarily find, that there was no intention to extinguish the mortgage title, but to make it absolute, as by any other mode of foreclosure, and thus to apply the property pledged to the satisfaction of the debt.

Without, however, relying upon this position, we think it may be deduced from the authorities quoted, that when the estates of the mortgagee and mortgager are united in the former, he has in equity an election to keep the mortgage title on foot, and that wherever it is for his interest by reason of some intervening title or other cause, that the mortgage should be upheld as a source of title, it will not at law be regarded as merged.

This is based upon the presumption as matter of law, that the party must have intended to keep on foot his mortgage title, when it was essential to his security against an intervening title, or for other purposes of security; and it is no matter whether the parties throngh ignorance of such intervening title, or through inadvertence, actually discharged the mortgage, and canceled the notes, and really intended to extinguish them; still on its being made to appear that such intervening title existed, the law would presume conclusively that the mortgagee could not have intended to postpone his mortgage to the subsequent title. Such cases are very numerous in our own state, and need not be cited. Indeed it may properly be said that when there is an intervening estate, there can be no merger from the mere union of the equitable and legal estates, as was held in Hunt v. Hunt, 14 Pick. 384, and Lockwood v. Sturtevant, 6 Conn. 387, before cited. In fact, the doctrine of merger, springs from the fact that when the entire equitable and legal estates are united in the same person, there can be no occasion to keep them distinct, for ordinarily it could be of no use to the owner to keep up a charge upon an estate of which he was seized in fee simple, but if thei’e is an outstanding, intervening title, the foundation for the merger does not exist, and as matter of law, it is so declared.

Of course cases might be conceived, when the purpose to extinguish the mortgage, notwithstanding an intervening title was clearly manifested, as when the very object was to postpone the first to a second mortgage the mortgager was willing to surrender his interest to effect that object. In such a case it would be unjust to the mortgager to uphold the first mortgage, and it would not be done, but in ordinary cases it would be just to allow the person in whom the two estates were united, to keep on foot his mortgage as security against an intervening title, in respect to which, he had come under no obligations either to the holder or the mortgager.

In our own state, the decisions are in accordance with the doctrines of the cases cited, and show that the rules of courts of equity on this subject have been adopted here at law. Robinson v. Leavitt, 7 N. H. 73, where the subject is much discussed, and Richardson, C. J., in a dissenting opinion says, that it is now the settled rule of law as well as of equity, that a mortgage is never to be considered as *280discharged, so long as, it is necessary to consider it otherwise, in order to give those who have the estate of the mortgagee, the full enjoyment of that estate. Hutchins v. Carleton, 19 N. H. 489; Johnson v. Elliott, 26 N. H. 69 ; Heath v. West, 26 N. H. 191. In Bell v. Woodward, 34 N. H. 90, which was a writ of entry, Perley, C. J., says that the rule deducible from these authorities would seem to be this : When the whole title which one acquires in land consists of an equity of redemption and of a mortgage, the mortgage will be kept on foot and held as security, over the land, or will be regarded as extinguished, as may be required by the justice of the case and the intention of the parties, the intention of the parties being the governing principle, when that intention is consistent with the justice of the case, und he says the equitable rules are applied in writs of entry, when it is used to enforce a mortgage.

In applying this rule, he says if the defendant is not allowed to set up this prior mortgage against the subsequent mortgage of the plaintiffs’, he and Mary Hale (the party from which he derived the mortgage), contrary to their interest, contrary to what must be presumed to have been their intention, will have paid the amount of the mortgage, not for their own benefit, but for the benefit of the subsequent mortgagee. In Hinds v. Ballou, 44 N. H. 620 ; it was held by Bartlett, J. that the payment of money to redeem, will operate as a discharge, or as an assignment substituting him in the place of the mortgagee, as may best serve the purposes of justice and as it would have been manifestedly for ^Lewis’ interest to treat the transactions as an assignment, such an intention is to be presumed, as it would not be inconsistent with the justice of the case, and as no contrary intent is expressed or necessarily implied. Similar remarks are made by Nesmith, J. in Moore v. Bascom, 44 N. H. 215; and see Wilson v. Kimball, 27 N. H. 300.

Upon these views, we think the instructions asked for ought to have been given. It is not distinctly stated in the case that there was an intervening title to the machine, but it is apparent from the ■whole case, and especially from the instructions of the court, that as in the former cases, by reason of a notice to defendant before the quitclaim deed, his title under that, to the machine was not good, when under the mortgage, if still subsisting it would be good.

The case then, is one where a title to the machinery intervened between the mortgage and quitclaim deed, and upon the authorities, the jury should have been told, that the mortgage was not merged in the quitclaim deed.

It is not a question of fact for the jury as to the intention, but a conclusive presumption of law, arising from the uncontroverted fact of an intervening title.

The verdict must be set aside.