Summary
finding that " deed and purchase money mortgage, given at the same time, are to be construed together as forming one instrument or contract"
Summary of this case from New Century Mtge. Corp. v. McDonaldOpinion
December Term, 1851
P. Outwater, for appellant. John Wells, for respondent.
By the 49th section of the revised statutes, "of uses and trusts," (1 R.S. 728,) it is enacted, that "every disposition of lands, whether by deed or devise, "hereafter made, shall be directly to the person in whom the "right to the possession and profits shall be intended to be "invested, and not to any other, to the use of, or in trust for "such person; and if made to one or more persons, to the "use of, or in trust for another, no estate or interest, legal or "equitable, shall vest in the trustee." And by the 47th section, "every person who by virtue of any grant, assignment "or devise, now is, or hereafter shall be entitled to the "actual possession of lands and the receipt of the rents and "profits thereof, in law or in equity, shall be deemed to have "a legal estate therein of the same quality and duration, and "subject to the same conditions as his beneficial interest."
It was strenuously contended, that under these statutory provisions, Benjamin Cooper took no legal or equitable estate by Spaulding's deed to him, and therefore could give no mortgage. In other words, that the whole title passed by him without passing through him, to the wife of Fayette Cooper, and therefore his mortgage was a nullity, because he had nothing to mortgage. This is specious, but, we think, not sound.
The parties to the deed and mortgage intended to create a trust estate in favor of Mrs. Fayette Cooper, that is to say, to give her a beneficial interest in fee, but on condition that the money mentioned in the mortgage should be paid. The deed, bond and mortgage prove this incontrovertibly, without reference to parol evidence. A deed and purchase money mortgage, given at the same time, are to be construed together as forming one instrument or contract. (1 Paige, 192, Lynde v. Budd.) The deed and mortgage were a single and indivisible bargain or contract of sale; and for the purpose of ascertaining the nature and extent of the beneficial interest intended to be granted to Mrs. Fayette Cooper, they are to be considered as if they were written in one instrument, executed at the same instant by both parties. For this purpose the defendant is not permitted to lay the mortgage out of view, and to look at the deed alone. They explain each other. (1 Sandf. Ch. Rep. 141, Farmer's Loan and Trust Company v. The People.) By the mortgage, a condition was annexed to the grant, and whatever passed by the grant, passed subject to the condition. She took by virtue of the deed with the condition annexed; and took the same estate which Benjamin Cooper would have taken, if no trust had been expressed in the deed; that is to say, an estate in fee, subject to the payment of the mortgage money. Without the aid of the statute, Mrs. Cooper's interest would have been a right to the actual possession of the lands, and to the rents and profits thereof, subject, however, to the condition of paying the mortgage money; and the 47th section of the statute turned that right into a legal estate, " subject to the " same condition." These are the words of the statute.
The defendant's argument is founded entirely on the language of the 49th section, which is, that if a deed be "made "to one or more persons, to the use of, or in trust for "another, no estate or interest legal or equitable shall vest in "the trustee." But this section must be read in connexion with the 47th. Both together shew that the legislature intended to turn what would otherwise have been a passive trust, into a legal estate in the cestui que trust; and to make that legal estate commensurate in quality and duration, and subject to the same conditions, as the beneficial interest which the grantor intended the cestui que trust should have. The deed and mortgage together shew, that the grantor intended that Mrs. Cooper's beneficial interest should be subject to the mortgage. So therefore must her legal estate be. To give Mrs. Cooper the whole legal estate discharged of the condition annexed to the grant, would be a perversion of the manifest intention of the 47th section. It is not necessary to give it to her for the purpose of complying with the substantial meaning of the 49th section, which is, that the grantee in such a deed shall derive no advantage from the conveyance, and have no dominion over the property. Considering the deed and mortgage as parts of one and the same transaction, and executed at the same time, Benjamin Cooper, the trustee, may truly be said to have taken no interest, legal or equitable, under the conveyance in question.
The judgment of the supreme court should be affirmed.
Judges JEWETT, GARDINER, FOOT, GRAY, and PAIGE concurred.
Assuming that the mortgage given by Benjamin Cooper to Spaulding for purchase money, was of no force or validity, because the legal title did not vest in him as was supposed at the time, but vested in Mary Cooper, yet under the circumstances, a lien in equity attached to the land in her hands in favor of Spaulding the grantor, for such unpaid purchase money. This lien remained unimpaired to the amount of $181, when the Coopers afterwards executed a second mortgage on the same premises, to Mary Rawson; and when the present plaintiffs became possessed of both the Spaulding lien, and the second mortgage by assignments, it was certainly competent for them to treat and regard both as subsisting incumbrances against the Coopers, and against all others who might claim under them. They did so treat them, for when they sold the property under the statutory foreclosure, by virtue of the power of sale contained in the second mortgage, they sold it, subject to the prior lien of $181, balance remaining of the original purchase money, and the appellant Lampman became the purchaser, with express notice at the time of sale, of such lien and of the amount, and regulated his bid so as to keep the amount in his own hands out of what was then deemed the fair value of the property. There can be no doubt about his having acquired the title in that way, with the $181 remaining charged upon the property as an equitable lien at least. The judgment below is therefore correct.
Judgment affirmed.