Kennard v. George , 44 N.H. 440 ( 1860 )

Sargent, J.

This controversy is in relation to the same subject matter, note, mortgage and land, mentioned in Eaton v. George, 40 N. H. 258, and S. C., 42 N. H. 375. The note and mortgage were originally given to Kennard, and by Mm transferred to Eaton, who attempted to collect the note, and to avail himself of the mortgage as security; but as no resulting trust had been transferred to him, and as he could not ask for the interference of this court on the ground of fraud or mistake, as neither existed so far as he was concerned, he was unsuccessful.

Kennard now seeks relief, and the first question is, whether he now owns the note and mortgage, and if so, whether he can stand in the same relation, and avail himself of the same rights, as though he had never transferred them. It appears from the testimony of both Kennard and Eaton in this case, that when Kennard transferred the note to Eaton he indorsed it, and guaranteed that it should be good to Eaton; and that as soon as the proceedings in the case Eaton v. George were terminated adversely to Eaton, he at once claimed the money of Kennard, and that he paid it, and took back the note and mortgage. Kennard was also inquired of, in a deposition which he gave, in the former suit, as to his liability over to Eaton, in case the latter failed to collect the note of George, and be then admitted that if Eaton failed to collect the note of the defendants he should be responsible to Eaton for the amount of the note.

Upon these facts we think that Kennard stands in court with the same rights that he had before he transferred the note and mortgage. His interest in the claim has never ceased. When not the absolute owner, he has been holden as indorser or guarantor, and has in fact been compelled to pay, and has paid back to Eaton the money he advanced npon the note. Had there been an absolute sale of the note and mortgage, without any liability over, the purchaser paying a stipulated sum for them, and running his own risk for his pay, and then Kennard had bought the claim again voluntarily, and on his own risk, the case would have stood differently. But that question does not here arise.

The next question is, what are the plaintiff’s rights in equity ? What would they have been had he never transferred the note and mortgage? We have no doubt, upon the evidence, that the plaintiff understood that he was to have a valid security upon the farm for his money. It does not appear that any particular form of security was stipulated when he agreed to loan the money. Mrs. George negotiated for the loan, and the plaintiff was to have security on the farm. But it appears that Mrs. George was in the habit of doing business for her husband as well as for herself. Mr. George says that he preferred that the deed of the farm should be given to his wife, because she was better qualified to keep property than he was; that she understood things better than he did in regard to property, and that he understood that the purchase of the farm was as much for his benefit as hers, and that he was to do all he could toward earning money to pay for it; that he was willing his wi|e should give the note and mortgage; that they expected to pay the note, and that he supposed, when the note and mortgage were given, that the mortgage was a good and valid security for the payment of the note; that he never knew or suspected any thing different from that until long after they were given. Mrs. George also states that she supposed the note she gave was good, and that the mortgage was a valid security upon the land at the time they were made, and long after, and that she made several attempts to raise the money to pay the plaintiff’s note, before the first suit was brought, and in this she is strongly corroborated by other testimony. And Mr. George says: “We employed Mr. Beck to go to Sunapee to raise the money to lift this mortgage.” They both say, substantially, that they supposed the business was properly done; that the plaintiff had security upon the farm for the payment of the note ; that they were honest in the matter, and that neither of them intended any fraud upon the plaintiff. Mr. George went after the plaintiff and carried him to the office of the magistrate to have the papers executed, and was present while the writings were made, and was desirous that the money should be obtained of the plaintiff toward paying for the farm, and expected he would have security upon the farm for its payment.

Hiram Mace says that the magistrate told him and Mr. and Mrs. George that the mortgage to the plaintiff was void at the time of its execution but for the reason that there was extra interest in the note, and that a note to Mace and mortgage to secure it, signed by Mrs. George only, was good, because there was no extra interest in it; and the plaintiff states that the magistrate, when inquired of by him if Mr. George ought not to sign the mortgage, said it would be good without his signature. The magistrate states that he has no recollection of making either of the statements as testified to by Mace, or the plaintiff', though he says that at the time of making the mortgage he supposed that it was good and valid without Mr. George’s signature.

Laying out of the case, then, the conflicting evidence in relation to an intended fraud practised upon the plaintiff by George and his wife at the time of the conveyance, and it seems to us that the case is plain; nor do we need to inquire in relation to a resulting trust, for it seems to us that aside from all these grounds there was a mutual mistake in regard to the security. Both the plaintiff and the defendants supposed beforehand that a valid mortgage of the premises was to be given, and intended it should be so. At the time of its execution they all supposed that it w’as valid, and the magistrate thought the same, and long afterward the parties had no suspicion that it was otherwise.

It seems to us to be a clear case of a mutual mistake, where the instrument given and received was not in fact what all the parties to it supposed it was and intended it should be ; and in such a case equity will interfere and reform the' deed, and make it what the parties, at the time of its execution, intended to make it; and in this respect it makes no difference whether the defect in the instrument be in a statutory or common law requisite, or whether the parties failed to make the instrument in the form they intended, or misapprehended its legal effect. Beardsley v. Knight, 10 Vt. 185; Canedy v. Marcy, 13 Gray 377; Webster v. Webster, 33 N. H. 18; Doe v. Doe, 37 N. H. 268; Browne v. Glines, 42 N. H. 160.

It is, therefore, decreecl that James George and Nancy George execute and deliver to the plaintiff' within twenty days a joint quitclaim mortgage deed of the premises described in the plaintiff’s bill, to secure the sum of nine hundred and ten dollars, as of May 6, 1856, upon the presentation to them of such a deed by the plaintiff’; and that unless said sum of $910, with legal interest thereon from said May 6, 1856, be paid to the plaintiff within sixty days, a writ of possession, in common form, as upon mortgage, shall issue in favor of the plaintiff.