Nichols v. Reynolds , 1 R.I. 30 ( 1840 )

By the Court.

The indebtedness of A. B. Rathbun to Mrs. E. Peckham was a good consideration for the interest which his deed of the 16th of March, 1813, purports to Convey*

The lodging of the deed with the town clerk by Mrs. Peckham, and the subsequent admissions of the grantor, as testified by Hall, (if he be a competent witness) and others, are presumptive evidence of its delivery. It is at least enough to prove, prima facie, that the deed came to her possession with the assent of the grantor.

When a deed, which has never been recorded, is lodged with a town clerk, the act of lodging it, unaccompanied with any counter declarations, is itself an implied direction to record ; and, other things equal, the title is complete upon its being lodged with such implied directions; for, by the terms of our statute, the lodging of a deed to be recorded is equiv alent to an actual entry of it upon record, so far forth as is necessary to perfect the title.

The title being made complete by such lodgment, the subsequent neglect of the town clerk cannot affect the grantee’s rights under the deed.

The deed remaining on file in the clerk’s office, and open to inspection, is notice to all the world of a conveyance of the land, either absolute or conditional.

But there are circumstances attending this transaction well calculated to draw into question Elizabeth Peckham’s title to an unconditional estate in this land. The debt which formed the consideration of the deed appears to have remained in her hands undischarged. The possession of the property continued in the grantor to all appearance without change of use, except that he was at times called on to settle, and was once threatened with a demand, or with a suit for the possession of the land; and further, the deed was suffered to remain on file unrecorded, until shortly before the grantee’s death. The conduct of Elizabeth Peckham, then, was precisely such as if the deed had been a mortgage, or as if it had been delivered to her as collateral security for her demand ; and there is nothing in the conduct of A. B. Rathbun inconsistent with this purpose, except the single fact that the deed on the face of it is absolute. From all the circumstances the grantor appears to have had two objects in view. First, to secure the debt due to the grantee. This was a good object. Second, to cover his property from the suits of his other creditors. This was a fraudulent purpose. Elizabeth Peckham would not have done herself justice had she not concurred in the first object, and accepted the deed as collateral security for the debt then due her; and so far the transaction was perfectly honest between both parties. As to the second object, there is no proof at all that she concurred in it; there is none that she knew it; on the contrary, she treated the deed only as a mortgage ; she was not, therefore, in pari delicto, and the deed must at least be regarded, by a court of equity, as collateral security for the debt due her at the time it was given. If the evidence by which this view is taken be competent, it is plain that the deed under this bill must stand as good. The plaintiffs must be allowed to redeem, and if Joshua B. Rathbun take any estate, it is a mere equity of redemption, subject to the prior rights of the plaintiffs.

But is the evidence competent ? Mr. J. Hall is the only witness objected to as incompetent. He is the main witness in support of the bill. Without his testimony, it may be doubtful whether the bill can be sustained. Is he, then, a competent witness ? The objection is, that he has not parted with his interest in the estate.

Now, if the deed of Rathbun to Elizabeth Peckham is void, it is plain that Hall has no interest in this suit, for he does not appear as a party in any way, and he has merely released his interest without covenant or warranty. But if the deed be not void, he has an interest, unless he has divested himself of it by his quitclaim made to plaintiffs, before the commencement of this suit. Has he so divested himself?

If the deed of A. B. Rathbun to E. Peckham be regarded as a mortgage, then the release of Hall and wife to plaintiffs may consistently in equity be considered an assignment, and, surely, a mortgagee has a right to assign an equity of redemption, even though another mortgagee, claiming by the same title, be in the actual possession of the premises. But it may even stand good as a release. The defendants, as mortgagees, (and only as mortgagees does the bill regard them) were all privies in estate with the heirs of Mrs. E. Peckham, and the actual possession of one privy is construct ively the possession of each, according to his title ; and this, although the party in possession claim to be in by an adverse title. The following principle is laid down in 2 Starkie, 657, 5th edition: “ Where a party is in actual possession, and has a right to possession under a legal title which is not adverse, but claims the possession under another title which is adverse, the possession will not in law be deemed adverse. Hence, as the actual possession of the defendants, as mortgagees, enured to the benefit of all privies, it enured to the benefit of the heirs of E. Peckham, and those claiming under them. The plaintiffs, therefore, were in a condition to take, even by way of release, and Hall and wife’s quitclaim may then operate as a release, or at least as an extinguishment of their claims under E. Peckham’s deed, in favor of the plaintiffs.

Hall, then, is a competent witness, and ought not to have been named as one of the plaintiffs in the bill.

The defendants ought, therefore, to account with the plaintiffs, and the plaintiffs be allowed to redeem.