Case ID: blackf_1/html/0150-01.html
Source: Caselaw Access Project
Author: {"author": "Holman, J.\n     \n      Per Curiam.\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Lasselle v. Barnett and Another.
    A mortgagee, by his statement to a third person that his mortgage was discharged, having induced him to take a mortgage on the premises, cannot afs .terwards set up a claim to the mortgaged property, nor can his assignee, with notice, to the prejudice of the second mortgagee.
    If land be conveyed in satisfaction of a mortgage, and the title afterwards prove defective, the defect may be the subject of a new demand, but cannot operate to revive the original contract, without the mortgagor’s consent ; nor can it with his consent, to the' prejudice of a mortgage taken by-another in the intermediate time.
    
      Quosre} whether an equity of redemption is subject to sale on. execution.
    
      The registry of a mortgage is, in judgment oflaw; notice of such mortgage to subsequent purchasers and mortgagees.
    THIS was a suit in equity, transferred from the Knox Circuit Court previously to a decree, on account of the interest of the circuit judge .
    
      
       In England, an equity of redemption cannot be affected by an execution ; but a judgment creditor may file a bill to redeem an incumbrance, pro. Vided he has taken out execution. 1 Mad. Ch. 418. In New-York, however, under the act concerning judgments and executions, an equity of redemption may be sold by the sheriff on an execution, Waters v. Stewart, 1 Caines’ Cas. 47; but the interest of the mortgagee before foreclosure cannot. Jackson v. Willard, 4 Johns. R. 41.
    
   Holman, J.

Dubois held a mortgage on a house and lot in Vincennes, described as facing three streets and the Wabash river, and between Fort Knox and Chappards, the property of Bazayon. Bazayon was indebted to J. and F. Lasselle in the sum of 730 dollars and 75 cents, and proposed giving them a mortgage on the same premises; informing F. Lasselle, (who was transacting the business,) of the mortgage of Dubois, but said it was discharged. Lasselle applied to Dubois to learn the nature and extent of his claim, informing him at the same time that he was about to take a mortgage on the same premises. Dubois informed him that his mortgage was settled, and that Lasselle might take his mortgage with safety. Lasselle resided at Detroit, and was urgent with Dubois to deliver up his mortgage or enter satisfaction on it, as he (Lasselle) wished his business done that he might return home. Dubois replied that he could not do it for a few 'days, he having first to make an arrangement or settlement with :Bazayon, but that Lasselle might rest assured it should be done. Lasselle took his mortgage, had it recorded at Vincennes, and returned to Detroit. This was transacted in 1809. About this time Dubois frequently spoke of his mortgage as being discharged. He afterwards set up a claim to about 400 dollars on the mortgage. This sum he claimed in consequence of his failing to obtain what he considered a legal title for a tract of land which he had purchased of Bazayon, called the Bourdeleau tract. But whether this tract of land was sold by Bazayon, in part discharge of the mortgage debt, or to pay a debt subsequently contracted, is left by the testimony somewhat doubtful. Some doubt may also be considered as resting on the title that Dubois received for the Bourdeleau tract of land. • Bazayon had purchased of P. Bourdeleau, the executor and one of the heirs of A. Bourdeleau,who died seized of the said tract of land. Bazayon died; and Dubois was not satisfied with the title he thus derived through this purchase of Bazayon, inasmuch as there were one or two heirs of A. Bourdeleau whose claims had not been purchased by P. Bourdeleau. To quiet all dispute, a judgment was obtained against the estate of A• Bourdeleau, and this tract taken and sold under execution, and Dubois became the purchaser and receive(j ¿jje sheriff’s deed. The consideration that passed from Bazayon to P. Bourdeleau for this tract of land has also been the subject of much' altercation, and remains clothed in some uncertainty; but it does not appear that P. Bourdeleau was dissatisfied on that subject, or had any desire to defeat the title of Bazayon or Dubois to the Bourdeleau tract. Dubois took possession of the land, exercised ownership over it for some time, and sold a cabin that stood upon it; and, when the deed was supposed to have been destroyed in the recorder’s office in Vincennes, which was burnt in lc>14, he advised with counsel about perpetuating his title. But afterwards, without the consent of the representatives of Bazayon, he abandoned the said tract of land, gave up to P. Bourdeleau such of the title papers as were in his possession, and set up a claim under the mortgage. In 1813, the said house and lot were taken in execution as the property of Bazayon, and sold, and Barnett became the purchaser for a small sum of money, and received a deed of conveyance from the sheriff; and afterwards, as he states in his answer, he heard of the existence of the aforesaid mortgages, and made inquiry respecting them in order to purchase one or the other for the purpose of securing his own title. He discovered the mortgage of Dubois to be the oldest, and, after learning from him all the transactions relative to the Bourdeleau tract of land, and receiving an assurance that upwards of 400 dollars were due on his mortgage, he purchased it in the year 1815; and, by agreement with Dubois, afterwards had the mortgage foreclosed in the name of Dubois, and the house and lot sold to satisfy the balance said to be due; and became the purchaser for the sum of 230 dollars, and received the sheriff’s deed' under the sale. In 1816 F. Lasselle, surviving partner of J. and F. Lasselle, had his mortgage foreclosed, and the same premises ordered to be sold. Barnett opposed the sale, and a jury was called by the sheriff to determine on their liability to be sold. The verdict was in favour of the claim of Barnett; and the sale was thereby prevented. Lasselle then filed his bill to set aside the. mortgage bf Dubois, the judgment of foreclosure, sale, and deed executed to Barnett; or to have the foreclosure opened, and his mortgage preferred, &c.; with a prayer for general relief.

Haying collected these facts and allegations from the intricate and voluminous.bills, answers, and exhibits, we are of opinion that the declarations of Dubois to Lasselle — that his mortgage was satisfied, and that Lasselle might safely take a mortgage on the house and lot — are obligatory on him; and, whether he had received satisfaction or not, ttvat he could not afterwards set up a claim under the mortgage to defeat the claim of the Lasselles. This position is supported, in principle, by a long list of cases, both at common law and in chancery. Pow. on Mort. 466, 472. — 1 Fonb. 163, 164,165, and the authorities there cited. — 8 T. R. 50. — 2 Yern. 370. — 2 Atk. 49. It is e■qually dear, that if the sale from Bazayon to Dubois, of the Bourdeleau tract of land, was in part discharge of the mortgage, that contract appears to have been executed both by title and possession. And if that title was defective, the defect might be the subject of a new demand, but could not operate in reviving the original contract. Consequently, it was not with Dubois, without the consent of Bazayon or his representatives, so to abandOn the title and possession of the Bourdeleau tract of land as to authorize a claim against the estate of Bazayon. Nor could such an act of abandonment, even with the consent of Bazayon or his representatives, by any means affect the claim of the Lasselles. If Dubois had a precedent claim under his mortgage, and agreed to receive a legal title to the Bourdeleau tract in extinguishment of his claim; and, in pursuance of said agreement, did receive a title which he considered to be legal, hié claim under his mortgage was at an énd: and the mortgage of the Lasselles, which had been suspended by the operation of his, immediately acquired a vested right to precedency; which right could not afterwards be divested by any act or agreement to which the Lasselles were not a party. Consequently, in either of these views, the right of Dubois under his mortgage was clearly suspended by the mortgage of the Lasselles.

The conduct of Dubois in disposing of the benefit of his mortgage to Barnett, and through the agency of Barnett procuring a judgment of foreclosure and sale of the mortgaged premises, was calculated to defeat the claim of the L¡asselles; and is therefore strongly marked with fraud. The claim of Barnett rests on principles somewhat different. He purchased the house and lot at sheriff’s sale, when sold under execution as the property of Bazayon in 1813. It is unnecessary to inquire whether the equity of redemption, which was all the interest remaining in Bazayon$ was a legal subject of execution , inasmuch as the mortgage of the Lasselles,'being’of record, must be presumed to have been ]£nown to Barnett at the time he made this purchase. He is therefore to be considered as á purchaser with notiee of their mortgage, and can have no pretence in equity to be preferred before it . In this view'of the case, we Have not considered the effect of the loss of this record by the destruction of the recorder’s office at Vincennes; because the'record was in existence at the time the purchase was made, and its subsequent loss could have no possible bearing on this part of the case. The right that Barnett acquired under the mortgage, would also be dependent on the notice he had of the nature and extent of the right of Dubois, if he had taken a regular assignment of the mortgage. But, instead of taking an assignment, he contracts with Dubois for the benefit of the mortgage, and proceeds in the name of Dubois to obtain that benefit: and cannot therefore, as ' a purchasér without notice, claim the advantage arising from the legal operation of the mortgage; but must take it subject to every equitable consideration to which it would have been subject-, if it had remained for the benefit of Dubois. But if Barnett had ' taken an assignment of the mortgage of Dubois, his situation "would not have been materially altered; for he must have been considered as a purchaser with notice of the supérior claim and prior equity of the Lasselles. Although it is not manifest that he was informed of the first declarations of Dubois to Lasselle, or knew any thing of the repeated statements he had made to others, that his mortgage was discharged; yet he was well acquainted with the existence of the mortgage of the Lasselles, and understood the nature and particulars of the contract between Bazayon and Dubois respecting the Bourdeleau tract of land, which afforded him sufficient information to put him on his guard. And having purchased under these circumstances, the interest he acquired, if any, should be suspended until the mortgage of the Lasselles is satisfied. His agency in the foreclosure of the mortgage of Dubois, and in the subsequent proceedings, was also a fraud upon the Lasselles. The price of»230 dollars for which the mortgaged premises Were sold, when alleged in the bill to be worth 2,000 or 2,500 dollars, although not of itself conclusive evidence of fraud, yet serves to heighten the fraudulent aspect of the whole case. And whatever might be the condition of an innocent purchaser under tho sale, the condition of Barnett, by ’whose agency and- for whose -benefit it was effected, is by no sneaus altered thereby. The deed he procured from the sheriff under that sale, is consequently fraudulent and void.

Hurst, for the complainant.

Dewey, for the defendant.

Per Curiam.

It is decreed that the sale, under the judgment of foreclosure and order of sale obtained by Barnett in the name of Dubois, be set aside at Barnett’s costs; that Barnett, within 30 days after service of a copy of this decree, relinquish the premises so bought under the order of sale, with special warranty, to the legal representatives of Bazayon, the conveyance to take effect from the date of the sheriff’s deed executed under the order of sale; that Barnett and the legal representatives of Dubois, deceased, be enjoined from proceeding on the judgment of foreclosure and order of sale, until Lasselle’s mortgage with the costs be paid, provided Lasselle proceed within 12 months to obtain the amount of his demand; and that Barnett, and the executrix of Dubois, deceased, pay costs, &c. . 
      
       Acc. Johnson v. Stagg, 2 Johns. R. 510, 524, 525. A purchaser at sheriff’s sale under a judgment rendered after the execution of a mortgage, but before its registry, is a purchaser with notice of the mortgage, if the sale be subsequent to the registry. Jackson v. Dubois, 4 Johns. R. 216.
     
      
       This cause was submitted at the preceding term, and continued by a Cur. adv. vult. During the vacation one of the defendants died. The practice in such case is, that the decree be ordered to have relation back, and be entered as of the day when the cause was finally heard. Campbell v. Mesier, 4 Johns. Ch. R. 342, note. If there be no defendant except him that dies, the practice is the same. Dartmouth College v. Woodward, 4 Wheat. 714.