Yerkes v. Hadley

5 Dakota 324 | Supreme Court Of The Territory Of Dakota | 1888

Carl and, J.

The record in this action discloses that on and prior to December 8, 1881, Lafayette Hadley and Kate Irene Hadley, his wife, were, in possession of and lived upon lot 17, *329in block 4, in the city of Fargo, in this territory; that on said •date they executed to Harman Yerkes their joint and several •promissory note for $500, with interest at 10 per cent, per an-num, payable annually, which note was to be payable in 5 years from the date thereof. The interest to become due was evidenced by joint and several interest coupon notes, attached to said original note, and signed by the makers thereof. To secure the payment of this note, and the interest to become due thereon, said Lafayette Hadley and Kate Irene Hadley made •and executed to said Harman Yerkes their mortgage on the premises hereinbefore mentioned, which mortgage was duly re•corded on the said 8th day of December, 1881, as provided by law. The mortgage in form was what is termed a mortgage deed, being an absolute deed of bargain and sale, with joint •covenants of seizin, quiet possession, and warranty. It also •contained the usual defeasance common to such instruments. Default having been made in the conditions of said mortgage, it was duly and legally foreclosed, and the land in dispute was .purchased by Harman Yerkes on the 11th day of March, 1884. No question was raised as to the regularity of the foreclosure .proceedings. A sheriff’s deed was duly issued to the purchaser •on March 20, 1885. Claiming title through said foreclosure, Harman Yerkes commenced this action to obtain possession of .-said lot 17. The defendants, by their answer, averred, and •such was the proof on the trial, that on the 10th day of June, •1878, the Northern Pacific Railroad conveyed said lot 17 to one ,A. H. Moore, which conveyance was duly recorded May 31, 1880; that said A. H. Moore conveyed said lot by quitclaim •deed to Robert Hadwin, on March 11, 1879, which quitclaim deed was duly recorded August 17, 1883; that on the 12th day •of June, 1885, said Robert Hadwin granted and conveyed said lot to said Kate Irene Hadley, which conveyance was duly recorded on August 15, 1885. At the trial the court found for •the said defendant Kate Irene Hadley, and adjudged that she *was the owner of said lot. From this judgment appellant appealed to this court.

*330It will be seen that the facts thus stated raise the single question as to whether the title acquired by Kate Irene Hadley subsequent to the execution and foreclosure of the mortgage given by her on the 8th day of December, 1881, inured to the benefit, of the appellant, Harman Yerkes. In considering this question, we must bear in mind that Kate Irene Hadley was a joint debtor with her husband, so far as the record discloses. She signed the note, and the mortgage contained the following condition : “ Provided, nevertheless, that if the parties of the first part, their heirs, executors, or administrators, shall pay or cause to be paid to the said party of the second part, his heirs,, executors, administrators, or assigns, the sum of seven hundred and forty-six dollars, according to the conditions of six promissory notes of even date herewith.” From all that appears from the record, Kate Irene Hadley may have received all of the consideration for the mortgage. This being so, she had the authority, under the laws of this territory, to execute a mortgage to secure said indebtedness, in the same manner as if she were unmarried. Section GG1, Civil Code, as amended by section 2, c. 2, Laws 1881; section 79, Civil Code. We cannot presume-that she was executing a mortgage on her husband’s property, for the reason that it appears that her husband never had any ownership in the property mortgaged. Having the same rights as an unmarried woman in regard to the granting or incumbering of her property, Kate Irene Hadley could make the mortgage to Harman Yerkes, and could bind herself by any lawful covenant inserted therein, the same as any other person. The-authorities which hold that a married woman may set up an after-acquired title as against her deed and mortgage, and which also hold that she is not estopped by the covenants of warranty in a deed of her husband’s lands to set up an after-acquired title as against the deed which she has signed, place the rule upon the ground that she is not sui juris, and hence-cannot be considered as authority in jurisdictions where married women may “ make any engagement or transaction with any other person respecting property, which she might if un~ *331married.” Civil Code, § 79. It must be conceded, therefore, that Kate Irene Hadley had the power to bind herself by the covenants contained in the mortgage to Yerkes. This being so, what effect would the covenants have upon title to said lot, acquired by her at any time subsequent to the execution of the mortgage? There can be no doubt but that the covenants of warranty would forever estop Kate Irene Hadley from asserting an after-acquired title to the premises in question. It would estop any other person; why not her? But it is claimed that, she having acquired the title that she sets up subsequent to the foreclosure of the mortgage, the estoppel does not apply; that, in order to have the after-acquired title inure to the benefit of the purchaser at foreclosure sale, it must have been acquired while the relation of mortgagor and mortgagee existed; and our attention is called to the case of Jackson v. Littell, 56 N. Y. 108. In that case the mortgage did not contain covenants of warranty, and it was decided that title acquired by the mortgagor subsequent to the foreclosure of the mortgage did not inure to the purchaser at the foreclosure sale; but the court further says: “ Different considerations would apply when the mortgage contained covenants of warranty. In that case the consideration paid would represent the value of the land as warranted, and the mortgagor would be estopped from setting up an after-acquired title against which he covenanted in the mortgage.” If we once admit that Kate Irene Hadley had the power to bind herself by the covenant of warranty in the mortgage, then the result naturally and necessarily follows that she never afterwards could say that she did not create a lien on the premises mentioned.

The respondent, however, insists that as a mortgage in this territory does not convey any estate in the premises mortgaged, but creates only a lien, the covenants of warranty in the mortgage in question are mere surplusage. We think that the words in the mortgage purporting to grant an estate in the premises are unnecessary, under the laws of this territory, but we cannot see why, if a mortgagor desires merely to create a lien on his *332estate, he may not warrant the title to the estate upon which he proposes to create the lien. It certainly would oftentimes be an inducement to a person to loan him money. When these covenants are inserted in a mortgage it must be presumed that they form part of the consideration for which the loan was made, and for that reason the mortgagor may never say that he did not create a lien upon the premises mortgaged. Why may not the mortgagor in a mortgage which merely creates a lien covenant that he is seized in fee, and that he will forever warrant a,nd defend the title to the premises mortgaged against the lawful claims of all persons whomsoever? Are they not covenants for the breach of which a personal liability is incurred ? and, if so, has not Kate Irene Hadley broken her covenant ? and, if she has broken the covenant, has not the very circumstance arisen upon which the doctrine of estoppel in these cases rests? In Van Rensselaer v. Kearney, 11 How. 297, the court, after reviewing all authorities, English and American, as to what words in a grant of real property would operate as an estoppel so as to prevent the grantors from setting up after-acquired title, said: “The principle deducible from these authorities seems to be that, whatever may be the form or nature of the conveyance used to pass real property, if the grantor sets forth on the face'of the instrument, by way of recital or averment, that he is seized or possessed of a particular estate in the premises, and which estate the deed purports to convey; or, what is the same thing, if the seizin or possession of a particular estate is affirmed in the deed, either in express terms or by necessary implication,— the grantor and all persons in privity with him shall be estopped from ever afterwards denying that he was so seized and possessed at the time he made the conveyance. The estoppel works upon the estate, and binds an after-acquired title as between parties and privies. The reason is that the estate thus affirmed to be in the party at the time of the conveyance must necessarily have influenced the grantee in making the purchase, and hence the grantor and those in privity with him in good faith and fair dealing should be forever thereafter precluded from *333gainsaying it. The doctrine is founded, when properly applied, upon the highest principles of morality, and recommends itself to the common sense and justice of every one. And, although it debars the truth in the particular case, and therefore is not infrequently characterized as odious, and not to be favored, still it should be remembered that it debars it only in the case where its utterance would convict the party of a previous falsehood; would be the denial of a previous affirmation upon the faith of which persons had dealt and pledged their credit, or expended their money. It is a doctrine, therefore, when properly understood and applied, that concludes the truth in order to prevent fraud and falsehood, and imposes silence on a party only when in conscience and honesty he should not be allowed to speak.” Adopting the reasoning of the learned court, let us look at the facts in the case at bar. Kate Irene Hadley covenanted with Harman Yerkes that she and her husband were seized in fee of the premises, and that she would warrant and defend that title against all lawful claims of any person whomsoever. She said to Harman Yerkes, and to whoever should become the purchaser at the foreclosure sale: “We are seized in fee of the land mortgaged. I will warrant and defend any title you may obtain through this mortgage.” Harman Yerkes parted with his money on the strength of such representation. To now say that she could set up a title hostile to Yerkes would be to convict her of a previous falsehood, and deny an affirmation upon the faith of which Yerkes had dealt and expended his money. It is the fact that the covenant or affirmation was made, not that an estate in the premises was conveyed, that creates the estoppel. By what sort of reasoning can it be argued that the covenant is destroyed by foreclosure and sale ? What destroys it ? The covenant says she will forever warrant and defend; and when Kate Irene Hadley made the covenant in the mortgage in question, she forever put herself in a position in which every principle of law, reason, and morality will compel her to stand. We do not think the fact that mortgages in this territory are mere liens, and do not convey an estate in the land, makes any difference *334with the operation of the covenant of warranty, when inserted in the mortgage. The mortgage operates on the estate concerning which the representations are made for the purpose of security, and. the mortgage which only creates a lien may result in an absolute conveyance of the property, just as much as if the mortgage had conveyed a conditional estate in the first instance. Clark v. Baker, 14 Cal. 633; Clark v. Boyreau, Id. 636. In the case last cited the court said, referring to the case of Clark v. Baker, supra: “We there held that it was immaterial whether the'mortgage was regarded as a conditional estate, as at common law, or as containing a mere lien or incumbrance, as by the law of this state; that though by our law the title does not pass, yet the lien created operates upon the property in a way precisely equivalent to that which would follow if the instrument transferred the legal title; that whatever in the instrument treating it as a conveyance would operate to transfer a subsequently acquired title to the grantee, must equally operate, treating the instrument as a lien or incumbrance, to subject such acquired interest to the purposes of the original security.” The view we have taken as to the effect of the covenants contained in the mortgage in question render it unnecessary to determine ~ the force and effect of section 1727, subd. 2, of our Civil Code, upon property acquired by the mortgagor subsequently to the execution of the mortgage. We are clearly of the opinion that —certainly as against Harman Yerkes — Kate Irene Hadley is estopped from setting up an after-acquired title to the premises in controversy, irrespective of the time when said title was acquired by her, and that judgment ought to have gone for the plaintiff at the trial.

All concur.