Opinion
April Term, 1852
Chauncey Tucker, for appellant.
M.T. Reynolds, for respondent.
This is an appeal by the complainant from a decree of the chancellor, made in the late court of chancery, in favor of the defendant Bradford R. Wood, reversing a decree of the vice chancellor of the eighth circuit, in favor of the complainant, against the said defendant and others. The single question in the cause is, whether the mortgage of Nathaniel Crosby and wife to the complainant, bearing date August 1st, 1837, is equitably entitled to priority over a judgment in favor of the defendant Bradford R. Wood against the said Nathaniel Crosby and others, rendered in the supreme court, and docketed December 11th, 1835. There is no ground upon the evidence to contend that the complainant's loan to N. Crosby was made upon the faith of the written memorandum given by Wood to N. Crosby, dated May 11th, 1837, nor with a knowledge on the part of the complainant, or Charles Crosby, of its existence; nor can it be claimed that the mortgage to the complainant came within the meaning of the memorandum, either standing alone, or modified by the counter memorandum signed by him at the same time and left with Wood. Not only is this so, but the subsequent acts of N. Crosby show, that he considered that proposed arrangement at an end. N. Crosby's letter to Wood, of July 1st, 1837, is conclusive evidence of this proposition.
On the 1st and 3d of July, 1837, N. Crosby wrote to Wood, asking him to send a discharge of the judgment, and suggesting that it might be sent to James Mullett, or Judge Walworth, to be used at the same time that a new judgment should be executed. The purpose for which this discharge was asked is specified: it was to enable him to borrow about $600 on mortgage to the loan commissioners. The reason is also given; that without it he could not take the oath prescribed by the law. It is therefore entirely clear that the discharge of the judgment was applied for solely to give priority to the mortgage for about $600 to the loan commissioners. On the 8th day of July, 1837, the defendant Wood executed and acknowledged a satisfaction piece for the judgment, and the same afterwards came into the hands of Nathaniel Crosby, but at what particular time does not appear. No actual satisfaction of the judgment was ever received by Wood, nor was satisfaction ever entered of record, nor is there any evidence that the complainants, at the time when the mortgage to them was executed, supposed, or were informed, that the judgment in question was satisfied, or that the premises were free from incumbrances; nor is it proved that at the time when the mortgage to the complainants was executed, the satisfaction piece was in the hands of N. Crosby. The most which I think we can infer from the testimony is, that N. Crosby had possession of it at the time when the mortgage to the loan commissioners was executed. The date of that mortgage does not appear; but from Mullett's letter of August 15th, 1837, (if that letter is to be deemed evidence against the complainants,) it is to be inferred that it was not executed earlier than August 7th, as it was during the week commencing on that day, that the loan commissioners distributed the loans in Fredonia. Moreover, N. Crosby, in his letter of March 23d 1839, does not pretend to affirm that he had in his possession the satisfaction piece at the time of the execution of the mortgage in suit. He only says, "after the discharge was sent to Fredonia by Mr. Wood I received" "the offer of a loan from the complainants. Taking this statement in connection with the applications to Wood for the discharge, it may, in the absence of other evidence, be fairly inferred, that the discharge was sent in the manner in which it was requested that it should be sent. That with the other papers it was sent in a letter to Mullett, enclosed in one to Crosby, advising him of the contents of the letter to Mullett, and that upon this he felt authorized to take the oath prescribed by § 25, ch. 150, Session Laws of 1837, that the premises proposed to be mortgaged were free from judgments; or else that the oath was not required of him by the loan commissioners; and that the satisfaction piece did not come into his possession until after August 15th, when he delivered to Mullett the letter from Wood to Mullett, of July 7th, which enclosed the papers.
The judgment was at the time of the execution of the mortgage unsatisfied in fact of record, and a legal lien on the land, and no circumstances then existed entitling the mortgagees to a priority in equity over this legal lien.
The only remaining question is, whether the mortgagees have, by matters subsequently arising, acquired any right which entitles them to be preferred in equity, over the judgment creditor. To determine this question satisfactorily, it is to be borne in mind that the conditions on which Wood had consented that the mortgage to the loan commissioners should take priority to his judgment, had not been performed by Crosby. From the testimony of Southwick, taken in connection with Crosby's letter to Wood, of July 1st, 1837, it appears that in lieu of the old judgment, a bond and warrant of attorney to confess judgment to Wood, was to be executed by N. Crosby and Pearson Crosby, at the time when the discharge of the old judgment was to be put in N. Crosby's possession. Pearson Crosby never executed the new bond and warrant of attorney. The use of the discharge of the old judgment was therefore a fraud on the part of N. Crosby, even in respect to the mortgage to the loan commissioners, and the retention of the discharge by N. Crosby was one continuing wrong. A court of equity would, as against N. Crosby, at any time have ordered it to be delivered up to Wood, or the supreme court would on motion have ordered the clerk not to enter the satisfaction on record.
Under these circumstances, if Wood, upon the full consideration of the surrender to him by N. Crosby of the satisfaction piece, had undertaken with him that the mortgage to the Crosbys should be preferred to his judgment, a court of equity would not have enforced that executory agreement in favor of the holders of the mortgage. The surrender of a paper, the retaining of which was unlawful, which a court of equity would have ordered to be delivered up, is not such a consideration as will support an executory contract. The complainants in this suit, who are not parties to this agreement, and whose rights could in no degree be altered by the preservation or surrender of the satisfaction piece, are not, in respect to rights to be derived under this contract, in any better position than N. Crosby, and have not thereby acquired any equitable right which entitles them to have their mortgage preferred over Wood's judgment. The decree of the chancellor should be affirmed with costs.
Judgment affirmed.