Lane v. Shears , 1 Wend. 433 ( 1828 )

By the Court,

Sutherland, J.

The plaintiff was non-suited at the trial, on the ground that the evidence did not shew that the premises covered by the conveyance to Shelden were held adversely at the time of giving the deed. In this direction I think the learned judge erred.

The defendant, Shears, never had any other interest than that of a mortgagee in the premises in question, and that interest was terminated or extinguished on the 20th of October, 1823, by the repayment of the principal and interest of the money loaned by him to Lane. (5 Cowen, 671. 18 Johns. R. 7. 1 Cowen, 126.) The authorities upon this point are clear and explicit. Á conveyance of property absolute in terms, if intended by the parties to be a security for debt, is a mortgage; and such intentions may be manifested, either by a written defeasance, executed simultaneously with the deed, or by the acts or parol declarations of the parties. (Clark v. Henry, 2 Cowen, 324. Dunham v. Dey, 2 Johns. Ch. R. 189, 15 Johns. R. 555. Peterson v. Clark, 15 Johns. R. 205. 4 Johns. Ch. 167. 6 Johns. Ch. 417. 1 Johns. Ch. 594. 7 Johns. Ch. 40.)

If Shears had only the interest of a mortgagee in these premises, then no conveyance from him to Lane was necessary to restore to Lane the entire title. A mortgagee has but a chattel interest, the freehold remains in the mortgagor. (Wilson v. Troup, 2 Cowen, 195. 6 Johns. R, 290. 11 Johns. R. 534. 15 Johns. R. 319.) Payment of the debt is an extinguishment of the mortgage. (4 Johns. R. 41.) It is not pretended that Shears ever had the actual possession of the premises. The tenant in possession entered and held under contract with Lane, and the defendant’s interest being only that of a mortgagee out of possession, the possession of the tenant was not, in judgment of law, his possession, but the possession of the mortgagor. After the payment of the debt and the consequent extinguishment of the mortgage, at all events, if not before, the possession was adverse as against Shears. He had no legal or equitable interest in the premises, and this was more than a year previous to the conveyance to Shelden. But even if the naked legal title remained in him after the payment of the debt, the conveyance to Lane of the 29th March, certainly terminated it; and any conveyance subsequent to that, must be within the spirit and policy of the act.

The defendant is to be presumed to have known the situation of the premises, and that they were occupied by the tenant of Lane. A person who sells and conveys land without the knowledge that there is a subsisting adverse possession, is not liable to the penalty given by the 8th section of the act for selling a pretended title; but the seller of land is, in the first instance, to be presumed conusant of the sit-nation of it. (Teel v. Fonda, 7 Johns. R. 251. Hassenfrats v. Kelly, 13 Johns. R. 466. 8 Johns. R. 227. 2 Caines, 183. 2 Johns. C. 59.) If there had been any doubt as to the knowledge of the defendant of the adverse possession, it should have been left to the jury.

Nonsuit set aside and new trial granted.