Case ID: mass_63/html/0095-01.html
Source: Caselaw Access Project
Author: {"author": "Dewey, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Daniel Stone vs. George Ellis & another, Executors.
    A deed, containing the following clause: “ The above premises are subject to a mortgage thereof, by me given to the Massachusetts Hospital Life Insurance Company, dated April II, 1840, recorded with Suffolk Deeds, Lib. 454, fo. 179, to secure the payment of six thousand dollars, with interest, and are conveyed upon the condition, that the said grantee, his heirs and assigns, do assume and pay the said mortgage debt, and all interest thereon, the same making part of the above consideration, and do indemnify and save harmless the said grantor, his executors and administrators, against the same forever,” conveys the estate to the grantee as an estate upon condition in him and his assigns; and, if the condition be not performed, the grantor may enter for forfeiture of the estate, and the estate of the grantee may, by such breach of condition and entry, be wholly lost.
    Whore A. conveys to B. by deed, an estate upon condition, and at the same time B. mortgages the premises to A., who, on the non-payment of the mortgage debt at maturity, enters for foreclosure, and while he is in possession under such entry, a breach of the condition in his deed to B. occurs, such entry and possession, without further notice or act on the part of A., will not be sufficient to divest absolutely the estate of B. for such breach of condition.
    The grantee of an estate upon condition, who mortgages to his grantor, and, after a foreclosure by the mortgagee, files his bill to redeem, a breach of the condition having occurred, will be allowed to redeem only upon removing all incum-brances specified in the mortgage, and performing the condition annexed to his deed.
    This was a bill in equity, brought to redeem a parcel oí real estate, situate on the northerly side of Franklin street, in Boston. It was filed on the twenty-first day of December, 1849.
    From the bill, answer, and replication, it appeared as follows : —
    That, on the eleventh day of April, 1840, Ephraim Marsh, the respondents’ testator, being seised in fee of the estate in question, mortgaged the same to the Massachusetts Hospital Life Insurance Company, to secure the sum of six thousand dollars, payable in three years from that date, with interest semi-annually; that Marsh continued in possession of the estate until the thirty-first day of December, 1844, when he conveyed the same to Asa B. Hogins, by deed containing the following clause: “ The above premises are subject to a mortgage thereof, by me given to the Massachusetts Hospital Life Insurance Company, dated April 11, 1840, recorded with Suffolk Deeds, Lib. 454, fo. 179, to secure the payment of six thousand dollars with interest, and are conveyed upon the condition, that the said grantee, his heirs and assigns, do assume and pay the said mortgage debt and all interest thereon, the same making part of the above consideration, and do indemnify and save harmless the said grantor, his executors and administrators, against the same forever; ” that Hogins, on the same thirty-first day of December, mortgaged the easterly half of the estate to Marsh, to secure the sum of three thousand dollars, payable in two years from date, with interest semi-annually; and on the same day, Hogins also mortgaged the westerly half to Marsh, to secure another sum of three thousand dollars, payable in two years from date, with interest semi-annually; that the mortgage debt to the Massachusetts Hospital Life Insurance Company became due on the eleventh day of April, 1843, and is still due at the present time, no part of the principal thereof ever having been paid by Hogins or his assigns ; that, on the eighth day of December, 1846, Hogins mortgaged the entire estate to George Miller, to secure the sum of thirty-five hundred dollars, payable in one year from date with interest; that, on the fourth day of January, 1847, Marsh entered and took open and peaceable possession of the entire estate, for breach of the conditions of his two mortgages from Hogins, and that Marsh and those claiming under him have continued in possession ever since, receiving the rents and profits ; that on the twelfth day of April, 1847, Marsh was obliged to pay to the Massachusetts Hospital Life Insurance Company the sum of $360, being one year’s interest then due on his mortgage ; that, on the eleventh day of June, 1847, Miller assigned his mortgage to the complainant; that Marsh, after his entry on the premises as above recited, died, and the respondents were duly appointed his executors, and all the interest and estate which Marsh in his lifetime had in the premises, by virtue of his two mortgages and entry, became vested in the respondents.
    The bill alleged that, by virtue of the mortgage from Ho-gins to Miller, and the assignment thereof to the complainant, the complainant became entitled to redeem the estate, on payment to the respondents of the amount due on the two mortgages from Hogins to Marsh, and the costs and damages for non-payment of the same, after deducting the rents and profits received by Marsh in his lifetime, or by the complainant since his decease; that the complainant has ever been ready and willing to redeem and pay the amount due to the respondents as aforesaid, and, on the 22d day of December, 1849, the complainant requested the respondents to render him an account of the mortgaged estate, that he might redeem, but that the respondents refused to render him any account, pretending he had no right to redeem.
    The prayer of the bill is, that an account may be taken, and the respondents ordered, on receiving from the complainant the amount due them thereon, to deliver up possession of the estate to the complainant, free of all incumbrances made by Marsh or the respondents, except the mortgage to the Massachusetts Hospital Life Insurance Company.
    The answer alleges that Hogins, by virtue of his deed from Marsh, was seised of the estate in question, subject to a condition, which having been afterwards broken, has defeated the title of the complainant to the estate. It denies that the title which Marsh had to the estate under the mortgages from Hogins, and Marsh’s entry, was all the title which Marsh had in his lifetime, or the respondents since, and now have in the estate. It alleges that Marsh in his lifetime, and the respondents since, have paid the interest due on the mortgage to the Massachusetts Hospital Life Insurance Company, to the amount of $1,101; and that there is now due to that company, for principal and interest on their mortgage, the sum of $6,324, for which the estate of Marsh is liable, and which the respondents, as executors, are bound to pay.
    The answer admits the request of the complainant for an account, but denies that the respondents refused to render such account, and alleges, that the respondents, on such request, made out a just and true account, and, on the twenty-fourth day of December, 1849, presented the same to Henry H. Fuller, the complainant’s attorney. It denies that the complainant ever offered to pay the balance due on such account, or that, if he had paid the same, he would thereby be entitled to redeem the estate; alleging that the complainant held the estate subject to the condition of the deed from Marsh to Hogins, and was bound to perform the same, but having neglected so to do, and Marsh having entered and taken possession of the estate and died seised thereof, and, the breach of condition having continued for a long space of time, the complainant had forfeited his title and had no right to redeem.
    The answer prays thát, if the complainant is allowed to redeem, he be decreed to pay, not only the amount due the respondents on the two mortgages from Hogins to Marsh, but also to pay off and discharge Marsh’s mortgage to the Massachusetts Hospital Life Insurance Company.
    
      G. H. Preston, for the complainant.
    1. The words “ upon the condition,” &c., contained in the deed of Marsh to Hogins, dated December 31,1844, are to be qualified by the circumstances of the case, and do not constitute such a condition as rendered payment of the mortgage to the Massachusetts Hospital Life Insurance Company by Hogins, necessary to give him an absolute title to the estate, so that a failure to make such payment would work a forfeit ure thereof; but is of like meaning and effect with the clause usually inserted in deeds of real estate incumbered by mortgage, by which it is understood and agreed, that the grantee shall assume and pay the incumbrance, the amount thereof forming a part of the consideration for the- conveyance. And this was manifestly the intention of the parties to that deed, taking the whole transaction together.
    2. The entry of Marsh on the 4th of January, 1847, was for breach of the conditions of his two mortgages from Ho-gins, and for the purpose of foreclosure, and not because of forfeiture of the estate by reason of the breach of any condition contained in his deed to Hogins; and such entry is a waiver of any claim for forfeiture.
    3. In any event, Hogins and those claiming under him, were entitled to a reasonable time to pay off the mortgage to the Massachusetts Hospital Life Insurance Company, which, under the circumstances, they have not had. And the court will consider all the circumstances of the case, in deciding what is a reasonable time. Ca/rter v. Carter, 14 Pick. 424; Austin v. Cambridgeport Parish, 21 Pick. 215; Hayden v. Stoughton, 5 Pick. 528 ; Ross v. Tremain, 2 Met. 495.
    4. Grants are to be construed beneficially for the grantee, and forfeitures are not favored in law or in equity. 4 Kent’s Com. 129, 130; 2 Story’s Eq. Ju. § 1319.
    5. Courts of equity will relieve and prevent a forfeiture for breach of a condition to pay money, where compensation can be made, and the amount of damages is certain and fixed, as in the present case. Com. Dig. Chancery, 2 Q. 3, 4, 5, 8, 9 ; 2 Story’s Eq. Ju. § 1315 and note, 1316 and note, 1320, 1324; Skinner v. Dayton, 2 Johns. Ch. R. 526, 535; Livingston v. Tompkins, 4 lb. 415, 431; Harris v. Troup, 8 Paige, 423 ; Gray v. Blanchard, 8 Pick. 284.
    
      W. Minot, Jr., for the respondents.
    1. The deed of Marsh to Hogins created a conditional estate in Hogins and his assigns. Coke on Littleton, §§ 328 and 331; Sheppard’s Touchstone, 121; Gray v. Blanchard, 8 Pick. 284.
    2. Marsh being in possession, and the breach of the condition known to Hogins, no entry, claim or demand was necessary to re-vest the estate in Marsh. Co. Lit. 218, a; Sheppard’s Touchstone, 154; Viner’s Abridgment, tit. Condition, R. d; Lincoln and Kennebeck Bank v. Drummond, 5 Mass. 321; Hamilton v. Elliott, 5 Serg. & Rawle, 375; Bear v. Whisler, 7 Watts, 144; 1 Smith’s Leading Cases, (Hare and Wallace’s notes to Dumpor’s case, Phil. ed. of 1847, 87.)
    3. The condition is of such a nature that, the breach having also been wilfully made and long continued, relief will not be granted in equity. 2 Story’s Eq. Ju. § 1323; Hill v. Barclay, 16 Vesey, 402; Reynolds v. Pitt, 19 lb. 134; Descarlett v. Dennett, 9 Mod. 22; Sparks v. Liverpool Water Works Co. 13 Vesey, 428; White v. Warner, 2 Merivale, 459; Bracebridge v. Buckley, 2 Price Rep. 200, and Rolfe v. Harris, cited in the note; Northcote v. Duke, 2 Eden, 322, note; Baxter v. Lansing, 7 Paige, 350; Ross v. Tremain, 2 Met. 495.
    4. If the complainant is allowed to redeem, it should be only on prompt payment of Marsh’s debt to the Massachusetts Hospital Life Insurance Company, and of Hogins’s mortgage, and of all costs and damages.
   Dewey, J.

The respondents deny that Asa B. Hogins, under whom the complainant derives the title by virtue of which he seeks to obtain a decree authorizing him to redeem the real estate described in his bill, was ever seised in fee simple of the premises, but, on the contrary, affirm that the deed from Ephraim Marsh to him was a conveyance of an estate upon condition, which condition the grantee, Hogins, failed to perform, and, by reason of the breach of the condition, the estate was defeated, and the same wholly remains in Marsh, the grantor.

We have no doubt that the deed of Marsh to Hogins con veyed the estate to Hogins as an estate upon condition in Hogins and his assigns. It falls clearly within that class of cases.

To hold the condition in this deed a mere agreement of Hogins to pay the mortgage, would leave Marsh with nothing but the personal liability of Hogins for the payment of the amount due on the mortgage to the Massachusetts Hospita. Life Insurance Company.

On the other hand, that this stipulation was not understood by the parties as embraced within the mortgage, is quite clear, as the condition of the mortgage is. distinctly recited to be the payment of certain promissory notes therein described, and not the payment of this money due the Massachusetts Hospital Life Insurance Company. The security for the fulfilment of the promise of Hogins to pay that debt is found wholly in the condition attached to the deed of Marsh to Hogins. That deed was a deed upon condition to be performed by the grantee, and, if not performed, the grantor may enter for forfeiture of the estate, and, if such entry is properly made, the estate in Hogins may, by such breach of condition, be wholly lost.

The only question of any difficulty in the present case is that which arises upon the question of the sufficiency of the entry of Marsh to divest absolutely the estate of Hogins for such breach of condition. It is not enough to show a mere breach of a condition subsequent. That alone does not defeat the estate. It is entirely optional with the grantor of an estate upon condition, in case a breach of the condition occurs, whether he will avail himself of the same as a forfeiture of the estate thus granted. To do this, requires action on his part, and the usual form is by an actual entry upon the party in possession, assigning, for the cause of such entry, the breach of the condition of the deed. Until this is done, the grantee holds his estate, liable only to be defeated, but not actually determined by a forfeiture.

The defendants admit the correctness of these general positions, but insist that Marsh made all the entry necessary to effect that object, and various cases are cited to sustain the doctrine, that Marsh, being in possession at the time, and the breach one that must have been known to Hogins, no further entry, claim, or demand was necessary to defeat the estate of Hogins, and give full effect to the forfeiture.

As it seems to us, such effect cannot attach to the mere possession of Marsh as to divest the estate, without any further notice or act on his part. Our familiar law, as to one class of forfeitures, is certainly quite to the contrary. I allude to the case of an ordinary mortgage to secure the payment of money at a stipulated time, but where, before the maturity of the note secured, or the time has arrived to perform the condition, the mortgagee has entered into possession, and, while thus in possession, the breach occurs, and the mortgagee continues in possession the period of three years thereafter, yet this will not be held to be that entry for foreclosure and three years’ possession, that will bar the redemption of the estate. The mortgagee having entered for another purpose, and in the exercise of other rights, it shall not be allowed to operate as an entry to foreclose, until notice is given to the other party of such purpose, and that the possession is retained for that cause. Erskine v. Townsend, 2 Mass. 493; Willard v. Henry, 2 N. H. R. 120.

In the present ease, the entry was for a clearly defined and distinct purpose, namely, to foreclose the two mortgages made by Hogins to Marsh, and all the necessary steps were carefully taken to bar the right of redemption, after three years from the time of making such entry, and, among these necessary steps, one was that of maintaining three years’ continued possession by Marsh. Before the making of this entry, which was January 4, 1847, no intimation had been given, that Marsh claimed an unconditional forfeiture of the estate, nor had any complaint been made, so far as appears, for any default of Hogins in not paying off the mortgage to the Life Insurance Company, although two years had elapsed since the making of the deed having the condition of paying that debt, which was then overdue, Hogins having paid only the accruing interest thereon. In this state of' things, Marsh being in possession for another purpose, upon failure, by Hogins to pay the interest on the debt to the Life Insurance Company, Marsh paid the same. Being thus required to pay the interest that had accrued for the preceding year, this was quite sufficient cause for entering upon the premises, to perfect a forfeiture for breach of the condition annexed to the deed. But we think that, to effect that object, something was necessarily required more than the actual possession of the grantor, holding directly and avowedly as a mortgagee under the same grantee.

Nothing having been done by Marsh beyond this, in the opinion of the court, the estate of Hogins was not lost at the time of filing this bill, by breach of the condition subsequent attached to his deed from Marsh.

Without expressing any opinion as to the effect resulting from wilful breaches of condition, or those of such a character as would require a denial of relief in a court of equity possessing full equity powers, we are of opinion, that, if the grantor in a deed upon condition, like this, being a mere stipulation to remove an existing liability to the Life Insurance Company, an arrangement really a mortgage, excepting in its forms, which are those of a deed upon a condition subsequent, the fact of possession in the grantor is not in all cases to operate as an absolute perfection of the estate. The possession of the grantor may be, as it in fact was here, wholly alio intuitu. The entry of the grantor, by which he had the possession, was an entry, both in form and substance; an entry to foreclose the mortgages of Hogins, which mortgages were entirely dependent upon Hogins’s having an estate to mortgage to Marsh. It is to be remarked, that the condition here was one not to be performed in any stated time. It was to pay a note of the grantor’s, then over due. It was a condition for the payment of money, and presents a case where, if an action at law had been instituted by Marsh to recover the land, this court would have interposed by an injunction to stay proceedings, upon subsequent payment, as in Atkins v. Chilson, 11 Met. 112.

Whether the complainant under this bill, in the manner it is drawn, could have put in issue this question of title of the respondents by forfeiture, because Hogins did not perform the condition of his deed from Marsh, might be questionable, but it was open to the respondents to interpose that title, and if found to be an absolute forfeiture, and the estate of Hogins thereby divested, it would have been a good bar, and thus it becomes necessary to decide upon that title.

But the court are of opinion that, although the respondents cannot set up this breach of condition in the deed of Marsh, to defeat the complainant’s bill, on the ground of title absolutely forfeited, yet it is competent for the respondents to set up this as a prior lien, attaching to the premises in controversy, and to insist that they ought not to be disturbed in their possession, until the debt due to the Massachusetts Hospital Life Insurance Company is paid. This condition of paying that debt is one that may be enforced against the land. As the respondents assert that lien, and now ask the court that, before they are compelled to surrender the possession to the com plainant of the mortgaged premises, that lien should be removed, we think the respondents are entitled to retain the possession until that lien is discharged.

The complainant’s bill to redeem will be sustained, upon his removing all incumbrances specified in the mortgages to Marsh, and also discharging Marsh’s estate from all further liability to the Massachusetts Hospital Life Insurance Com* pany, by paying the same, as stipulated in the deed from Marsh. Decree accordingly.