Treadwell v. Brooks ( 1882 )

Loomis, J.

This is a petition to remove a cloud upon the title of certain land, occasioned by a caveat signed by the defendant and recorded in the land records of the town, in ■which the defendant claimed to be the equitable owner, by reason of an agreement for the sale of the land to him by one Isaac W. Ives, owner of the equity of redemption. The land was subject to three mortgages—one to Joseph M. Ives, guardian, for nine hundred and thirty-five dollars, one to him individually for eight hundred and sixty-five dollars, and one to the plaintiff as administrator of Lyman Keeler for three thousand and five hundred dollars. The equity of redemption had no value, and the owner, Isaac W. Ives, was a bankrupt; but he obtained from the mortgagees a quitclaim releasing a part of the land from the mortgage so that he might sell it and pay over the proceeds to them. Ives, with this quitclaim deed, met the defendant on the 14th of March, 1878, and made the agreement for the sale of the land in his own name to the defendant. To enable the latter to raise the purchase money, it was understood that he was to obtain a loan from the Waterbury Savings Bank and secure it by a mortgage of the land. Subsequently, on the 4th of April, 1878, Ives and Brooks met at the savings bank to consummate the bargain. The treasurer of the bank drew a warranty deed from Ives to Brooks and a mortgage from the latter to the bank, which were duly executed and acknowledged. But the bank officers would not make the loan to Brooks without first seeing the quitclaim deed, which had been left with Mr. Terry, attorney for the defendant, and could not then be produced. So that the parties separated, leaving all the deeds in the hands of the treasurer of the bank until he could examine the quitclaim deed. If that should be satisfactory he was to furnish the money immediately and have all the deeds recorded. Afterwards during the same day the treasurer obtained the quitclaim, but objected to it on the ground that an administrator and guardian had no power to release any portion of the land mortgaged unless the entire debt secured by the mortgage was paid, and the next day he wrote Ives to that effect, recommending him to obtain another quitclaim of the entire mortgage. After receiving this letter Ives communicated its contents to the defendant, and informed him that the mortgagees had refused to release their entire security for the proceeds of the sale of a single lot, and therefore it would be impossible for him to comply with this new requirement. The defendant replied by letter of April 9th, in which, among other things, he said:—“ I understand Mr, Kingsbury has sent you a good and lawful paper since you was here, and the best thing you can do will be to get it signed and return it wdthout delay.” This referred to the new quitclaim deed required by Mr. Kingsbury. And on the 16th of April, the attorney of the defendant, at his request, wrote that the defendant had raised the money and it was on deposit with Mr. Kingsbury, to be paid to Ives when he should furnish a perfect title, obviously meaning such a title as the treasurer of the bank required. The plaintiff in bringing the present suit, stands not on his title as a mortgagee, which he held as administrator, but upon a title acquired by him individually by purchase of the equity of redemption from the assignee in bankruptcy of Ives.

From this condensed statement of the facts it seems clear that the defendant has no equitable title as against the plaintiff. Had he accepted the title offered he could have successfully resisted all the plaintiff’s claims and enforced his own, but as the caveat states and the finding otherwise shows, he refused the offer and demanded just, what the treasurer of the savings bank required, namely, a release from the plaintiff and the other mortgagees of their entire mortgage, covering other land than that which he purchased. So far as the plaintiff was concerned he had no right to insist on such a release.

It would have been most unreasonable and unjust to the mortgagees to require them to part with the entire security which' they held for the avails of a part, amounting only to a part of the mortgage debt; and neither they nor the plaintiff ever made or authorized Isaac W. Ives to make any agreement of sale involving such consequences.

The quitclaim which the plaintiff and the other mortgagee consented to give had been executed and was exhibited to the defendant when the agreement for the purchase and sale was made, and this was the only basis of Ives’s authority and fixed its utmost limits. The unfortunate feature of the contract was not owing to the desire or fault of either party, but wholly to a new and insurmountable obstacle unexpectedly thrust between them by the requirement of the bank treasurer. Brooks could not raise the money without meeting this requirement, and Ives could not procure the release of the entire mortgage with the avails of that part of the mortgage property sold.

It may be suggested that as the plaintiff and the. other mortgagees authorized Ives to sell the land in question and quitclaimed the mortgage as to the portion to be sold, they should be held as authorizing the giving of a good title, or •in other words, must be held as promising a valid quitclaim, and if they were mistaken as to their power to release, a. part of the land upon part payment only of the mortgage debt, they ought to suffer the consequences of their mistake, rather than the defendant, who made the contract for the. purchase of the land relying upon a perfect title. This brings us directly to the question whether the quitclaim deed, which the savings, bank rejected, would have been effectual to release the incumbrance of the mortgages on the land bargained to be sold to the defendant. The answer depends upon the construction of sec. 22, p. 355, of the General Statutes, Revision of 1875, which is as follows:— “ The executor or administrator of any deceased mortgagee, or any guardian or conservator whose ward is a mortgagee, may, on the payment, satisfaction, or sale of the mortgage debt, release the legal title to the mortgagor or party entitled thereto.”

We. are not aware that this statute has ever been before any of our courts for construction,, and it is. to be regretted that, the counsel on both sides avoided all discussion of this question.

- The conclusion of the bank treasurer was occasioned by a strict construction of the language; this was the more prudent course for a bank officer in case of doubt. At first blush it seems plausible to hold that payment of a debt means full, payment, and release of the legal title, means a full, rather than a partial, release, yet we are inclined to favo.r. a. more liberal construction. It may be regarded as. payment of the debt so- far as it equitably rests on the parcel sold, and as. to that it is a full release of the legal title. It will, often happen that more money can be obtained to apply on the mortgage by selling and releasing the land in parcels to> different persons than could result from a sale of the entire tract, and. the best interests of the wards will often. require such a course. We think the statute gives an administrator or guardian all the power necessary for making such a partial release.

Our conclusion therefore is, that the caveat recorded by the defendant is such a cloud on the plaintiff’s title as equity will remove. It is found to work a present injury to the plaintiff by preventing the sale of the property, and on the other hand it is of no possible benefit to the defendant, for as we have seen he has no title legal or equitable which he can now enforce. It is against conscience for him to retain his caveat, for it can serve no possible purpose other than a sinister one. 1 Story Eq. Jur., (12th ed.,) sec. 700; Holland v. Mayor, 11 Md., 186; Chipman v. City of Hartford, 21 Conn., 488.

We advise the Superior Court to render judgment for the plaintiff and to deny the prayer of the cross-bill.

In this opinion the other judges concurred.