McKenzie v. McKenzie , 52 Vt. 271 ( 1880 )

The opinion of the court was delivered by

Redfield, J.

The allegations in the bill are substantially admitted in the answer of Yan Sicklen, Walker & Co., and the bill is taken as confessed as to all the other defendants. It is conceded that on the 25th of March, 1869, Patrick McKenzie, Austin McKenzie, and Kate, his wife, executed a mortgage to John McKenzie of the premises in question, to secure the sum of $1900. Austin afterwards paid $800, and the residue of the notes were sold to James, the orator, amounting at their date to $1100. Afterwards on the 8th day of February, 1871, Austin McKenzie and Kate, his wife, executed another mortgage bn the same premises, and Van Sicklen, Walker & Co. are the owners of a portion of the notes secured by said mortgage. On the 14th of October, 1875, the orator took six new notes, signed by said Austin and his wife Kate, of the same date and tenor as the notes he had purchased from John, but made payable to the orator instead of the said John, and a mortgage on the same premises, signed by said Austin and wife, to secure said new notes ; and the old mortgage was discharged by said John on the margin of the town records. E. M. Weed, then town clerk of Shelburne, drew up the papers, and the whole business seems to have been transacted- under his supeiwision and advice. It seems the first notes were made payable to John McKenzie, or order, but were never indorsed by John, nor the mortgage assigned to the orator. Mr. Weed testifies that the orator and Austin McKenzie came to him, and requested that he draw some papers transferring the debt and mortgage to James ; that they requested him “ to make the papers so as to put James in John’s place as holder of the first mortgage on the property described in the mortgage ” to secure the f1100. We have no doubt, from the whole testimony, that the parties purposed and undei’took to put “James in John’s place”, and to fully invest James with the ownership of the mortgage, such as John had at the time it was given ; and employed Weed for that purpose, who, as the custodian of the town records, presumably had some knowledge of such business. But it seems he had not; and the parties were confessedly ignorant of the methods which regulate title to real estate; hence this botch of work and bundle of errors. The scrivener undertook to transfer the equitable estate of John (which was a mortgage security for a debt) to James. James was already the equitable owner of the debt and its security, hut James wanted the debt and security fully transferred to him. But instead of a transfer, the scrivener in form made him discharge it. If this was a proceeding against Austin and John to enforce this mortgage security, it being confessed that the debt was never paid nor its security intentionally impaired, to deny the power of a court of equity to dispense obvious equity to the parties, would seem to us to so shorten the arm of equity in its most appropriate jurisdiction — reaching the consciences of the sinister, and repairing the blunders of the ignorant — that instead of being a most wholesome remedial agent, it would become a most cumbersome nuisance. The defendants Yan Sicklen, Walker & Co., had a mortgage security upon Austin’s equity of redemption in these premises, and nothing, more; they had full knowledge of the orator’s prior equity, and their condition has in no respect changed. So if the orator’s security is to continue and subsist until his debt is paid, the subsequent incumbrancer suffers no wrong, but remains in the full enjoyment of all his rights. They ask merely that they may profit by the orator’s mistake. There is no reason why Yan Sicklen, Walker & Co. should be regarded in different light from that of Austin. He owned the equity of redemption, and they had a mortgage upon it. Both should have their rights preserved; but neither allowed, in this court, to speculate in another’s blunders. Courts of equity are often invoked to correct written contracts — to engraft upon them new stipulations, or restrain the operation of such as 'are inserted, so that they manifest and carry out the intention of the parties. And this is the special province and most useful jurisdiction of that court. In Proctor v. Thrall, 22 Vt. 267, the court, Poland, J., say : “ It is undoubtedly true that Courts of Chancery do often interfere for the purpose of correcting agreements and contracts of almost every description, where the legal effect of the contract is entirely different from what the parties intended at the time it was made ; and this, too, in cases where the mistake of the parties was relative to the effect merely; and so might be said to be rather a mistake as to the law than as to the fact.” In Mower v. Hutchinson, 9 Vt. 242, the parties, being joint owners, ’executed quit-claim deeds, to work, as they supposed, partition of the premises ; but Mower’s deed cut off his right to flow a portion of the premises, which was not intended. The court restrained the operation of the deed within the limits intended. The discharge by John, with the assent of James thereto, was under an entire misapprehension of fact as to the orator’s condition at the time. He was told by the scrivener that he had acquired by the new mortgage a first lien upon the premises, as security for his debt, which was not true; and under. that delusion the orator acquiesced in the release of the old security, which he supposed had been supplanted by the new. Both parties to that transaction were mistaken as to that fact. And we think it would be unconscionable for Austin or John or any one holding under Austin’s title, to set up that discharge on the record as an extinguishment of the orator’s equity. There are abundant authorities to warrant the relief in equity called for in this case. And we do not think it would be profitable to attempt to define the line dividing mistakes in matters of fact and pure matters of law, where a court of equity will not interfere to correct a mistake.

Decree affirmed, and cause remanded.