Pierce v. Faunce , 47 Me. 507 ( 1859 )

The opinion of the Court was drawn up by

Appleton, J.

The bill in this case alleges that one William Cousins, having recovered judgment • against William Prince and others, in the late District Court, held on the third Tuesday of June, 1842, in and for the county of Cum-berland, caused the execution, which issued on said judgment, to be extended upon the premises, which form the subject matter of the present litigation, as the property of said Prince; that said Cousins, the time for redeeming said levy having expired, conveyed the same on the 19 th of February, 1842, to this complainant; that said Prince, on the 26th of October, 1836, conveyed certain premises to Mary Chipman, which, according to the legal construction of the language of the deed, but contrary to the agreement and intention of the parties thereto, transferred the title of the land, upon which the execution in favor of Cousins against Prince and others was subsequently extended, to the grantee; that the legal title thus vested in Mary Chipman passed through various intermediate conveyances to the defendants; that the different parties to these several transfers, as well as these defendants, had actual knowledge of the mistake In the deed from Prince to Chipman, when they received their titles, and held the premises subject to the equitable rights of this complainant.

The prayer of the bill is, that the deed from Prince to Chipman may be so. reformed as to express and carry out the true intent and meaning of the parties thereto, and that the defendants be forever enjoined and prohibited from asserting any right, title and claim whatever, to the premises described in the levy, &c.

The defendants deny that they, or those through whom the title passed to them, had any knowledge, information or belief of any error or mistake in the description of the premises conveyed in and by the deed sought to be reformed.

According to the construction given by the majority of this Court, in Pierce v. Faunce, 37 Maine, 63, to the deed from Prince to Chipman of Oct. 26, 1836, in the opinion delivered by Mr. Justice Howard, the premises, upon which the execution of Cousins was afterwards extended, by that deed were transferred to the grantee therein. It follows, therefore, that when the levy, under which the complainant derives his title, was made in June, 1842, the judgment debtor, Prince, had no legal interest whatsoever in the land levied upon.

The power of this Court, as an incident to its chancery jurisdiction, upon full and satisfactory proof of a mistake in a deed, to compel its reformation, and to enjoin the party seeking to take advantage thereof from claiming any right under it, is too well settled to be even questioned.

Rut, assuming the mistake in the deed to be one which a court of equity would, as between the parties thereto, or those claiming under them, with notice, reform, and that its existence is clearly established, there are grounds taken in the defence, which must prevent the complainant’s recovery.

(1.) It appears that Mary Chipman, on April 14th, 1838, conveyed the premises in controversy to Orville Byram, who at the same time gave a mortgage back to secure the purchase money. This mortgage, after various mesne assignments, became ultimately vested in the defendant Paunce, and constitutes the only title he has to the land. When the bill was commenced, the equity of redemption was not barred by lapse of time. Nor is the mortgage shown to have become foreclosed in any mode. The interest of the mortgagee is only to the extent of his mortgage. No principle is better established than that all the parties in interest should be made parties to the bill. The holder of the outstanding equity of redemption is not made a party. If not a party, he would not be bound by any decree which might be made, nor would the rights of the parties be finally determined.

The deed to be reformed is one from Prince to Ghipman, yet none of the parties to that conveyance are before us. The bill seeks to reform a deed without notice to or summoning the grantee, whose rights may be materially affected by the proposed reformation of his title.

That the bill cannot be sustained, without the proper parties, and that the Court will take notice if they are not before it, was settled in Davis v. Rogers, 33 Maine, 222, in Bailey v. Myrick, 36 Maine, 50, and in Morse v. Machias Water Power, 42 Maine, 119.

(2.) It has been repeatedly determined that a purchaser, having notice of an equitable claim which would affect his conscience, may convey .a perfect title to a Iona fide purchaser without notice; and, the title thus becoming perfected in such purchaser without notice, he may transfer a perfect title to one having notice. The grantee takes the premises discharged of its latent equities. Mott v. Clark, 9 Barr., 399. So if a purchaser, with notice of a prior unregistered deed or other claim upon real estate, afterwards convey the same to a subsequent bona fide purchaser, who has no such notice, the latter is entitled to protection against the prior equitable claim to the property. A purchaser with notice, from a prior purchaser, who was entitled to protection as a bona fide purchaser without notice, is himself entitled to protection against the previous equitable claim which was invalid as against his grantor. Varick v. Briggs, 6 Paige, 323.

“We cannot see,” remarks Parker, C. J., in Trull v. Bigelow, 16 Mass., 406, “that the knowledge of an antecedent fact, which had lost its effect upon the title of the parties, can be material. He knows that the title was defective in one of the persons through whom he claims; and he also knows that the defect was cured, and the stain upon the title effaced. There seems no reason why, as he is a bona fide purchaser of him who had an unimpeachable title, he should not have the title unimpeached in his own hands.” These principles equally apply, whatever may be the defect in the title as between the parties to the conveyance.

The mortgage of April 14th, .1838, given by Byram to Chipman, was, on December 6th, 1843, assigned by Chipman to E. R. Holmes. It is alleged in the bill, and denied in the answer, that he had notice of the mistake now sought to be corrected. The burthen is on the plaintiff to show he had such notice. The deposition of Holmes is not taken. The deposition of Chipman, who assigned the mortgage to Holmes, neither indirectly intimates, nor directly asserts, that he had such notice. The proof is entirely silent on this point.

Holmes, then, may be regarded as a bona fide assignee without notice. If the fee had been conveyed to him under such circumstances, his title could not have been impeached. But a mortgage is pro tanto a purchase, and the bona fide mortgagee is equally entitled to protection as the bona fide grantee. So the assignee of a mortgage without notice is on the same footing with the bona fide mortgagee. In all cases, the reliance of the purchaser is upon the record, and when that discloses an unimpeachable title, he receives the protection of the law as against unknown and latent defects.

The mortgage being assigned to Holmes without notice, he could convey the interest thus acquired. His assignment would pass his interest, and it thenceforth became unimportant whether the subsequent assignees had or had not notice.

If the mortgage is not foreclosed, the proper parties are not before us. And if they were, the bill cannot be sustained against the defendant Eaunce, he having derived his title from a bona fide assignee.

If the mortgage be foreclosed, as the mortgage was held by Holmes discharged from all liability for the correction of any mistakes in antecedent conveyances, it is equally so held by his assignee, and the title would thus become indefeasibly vested in the defendant.

The result is, that the bill cannot be sustained.

Bill dismissed. — Costs for defendants.

Tenney, O. J., and Rice, Goodenow, Davis, and Kent, JJ., concurred.