Case ID: dc_16/html/0262-01.html
Source: Caselaw Access Project
Author: {"author": "Mr. Justice Merrick", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Christian Ruppert vs. George A. Haske et al.
    
    Equity.
    No. 9,375.
    Decided November 1, 1886.
    The Chief Justice and Justices Cox and Merklcx sitting.
    
      A mistake in the description of a recorded deed will not be' corrected by a> court of equity, to- the prejudice of the rights of bona fide judgment-creditors of the grantee having a lien upon the property.
    Case certified from, the Court of Equity to be beard at General Term in the first instance.
    This was a proceeding upon a bill by the assignee of certain notes secured by deed of trust, to reform and correct a-deed of trust for error alleged to have been made therein through the mutual mistake of the grantor and grantee.
    The hill was filed January 6, 1885, a-nd after setting out-the several judgments obtained by several of the co-defendants against the defendant, George A. Haske, it alleged) that on September 6, 1811, one Nancy Kilafoyle was seized of the west thirty feet front by the depth thereof of lot 4 in. square 844, and, being so seized, contracted to sell and did sell to one Bedelia Haske, now deceased-, the east fourteen feet eight and one-hal-f inches front of the said thirty feet front of said lot; hut that by deed dated on said) day and- duly recorded January 30, 1812,, she conveyed to-said Bedelia Haske the west fourteen feet eight and one-halff inches- front of said thirty feet, and that at the same time" she delivered to the said Bedelia Haske, and the said Bedelia Haske accepted possession of the said east fourteen feet eight and on-e-half inches of said thirty feet, and the house- and improvements thereon.
    It also alleges that prior to-the first of May, 1813, the said, Bedelia Haske applied to the Germa-n- American Savings-Bank for a loan- upon said eastern portion- of said thirty feet,, and an examination of the title then made revealed, the fact that the conveyance to Mrs. Haske embraced the-western instead of the eastern portion thereof; that for the-purpose of correcting this mistake,, the said Kilafoyle arndl Haske, on or about tbe 17th of May, 1872, exchanged deeds of conveyance with each other, whereby the said Kilafoyle conveyed to said Haske the said eastern portion of said land, and the said Haske reconveyed to the said Kilafoyle the said western portion thereof, and the said deeds were duly recorded; that having corrected said error, the said Bedelia Haske and her husband, the judgment defendant, George A. Haske, obtained from said bank the sum of $1,500 upon a note dated May 5,1873, and executed a deed of trust to secure the said note; that it was agreed between all the parties to said transaction that the said eastern portion of said thirty feet of said lot should .be included in said deed, but that by error of the scrivener the said western portion was described in said deed of trust - the said trust being recorded in liber, etc.
    The bill further alleged that at that time the said Kilafoyle owned and had possession of, and claimed as sole owner, the said western portion of said land, and the said Haske the said eastern portion; that the error was due to the commencement at the wrong point of beginning, the rest of the description being correct; that the said eastern portion was then in the possession of said Haske and claimed solely by her, and that the said money was actually advanced upon the faith that said eastern portion was embraced in the deed of trust.
    It also alleges that subsequently the complainant, at the request of Bedelia Haske and George A. Haske, purchased 'the said note from the receiver of said bank, the then owner thereof, for its full face value and interest to date, without any knowledge or notice of any misdescription in the deed of trust, and after the said eastern portion of said property had been pointed out to him by said Haske as the property actually embraced in said deed of trust; and that ■at the same time complainant entered into an agreement with the said Bedelia and George A. Haske, extending the time of payment of said note for two years, with the privilege of a further extension for an additional two years and a reduction of interest from 10 to 8 per cent.
    
      That on May 22, 1880, Bedelía Haske, by deed duly re-» corded, conveyed all her estate to Bernard A. Haske, in trust for the defendant George A. Haske, without any valuable consideration. Shortly thereafter Bedelía Haske died intestate.
    That on April 3, 1879, the defendants Selzer and Miller secured a judgment against the defendant George A, Haske, and on February 23, 1884, they filed a bill against said George and others, to subject the said western portion of said lot to sale to satisfy their judgment, and obtained a decree for the sale of the same; that on December 2, 1884, the trustee under the decree in said cause undertook to sell said western portion of said lot, and only discovered, at the sale, the error in the deed of trust; that neither the complainant nor any of the other parties in interest had, until that time, any knowledge of the error; that thereupon, on December 12, 1884, the said defendants Selzer and Miller filed another bill against said George A. Haske, alleging that be was the equitable owner of the said eastern part of said lot, and praying for a sale of the same to satisfy their judgment.
    That said judgment creditors had, prior to the institution1 of said suit, full notice of the errors' thereinbefore referred to, and that complainant had an equitable mortgage on the said eastern portion of said lot, and a paramount right to1 the same over those of said judgment creditors and all other persons. The bill then prayed that the deed of trust he reformed so as to include the east fourteen feet eight and one-half inches of said west thirty feet of said lot, instead! of said, west fourteen feet eight and one-half inches thereof,, or that complainant be decreed to have an equitable mortgage on the same; that a trustee might he appointed to sell the same in satisfaction of complainant's- debt; that the defendants he enjoined from proceeding against the same, and that the defendants Selzer and Miller might be enjoined from prosecuting their suit in equity, ©r in any way endeavoring to assert a lien, by reason of their judgment,, upon said land prior to the equitable claim- and equitable mortg,age of tbe- complainant.
    
      Decrees pro confesso were taken against all the defendants except Selzer and Miller, who filed their joint answer, in which they substantially denied all the material averments of the bill, and claimed the right, as judgment creditors, to subject the said lot to the satisfaction of their judgment.
    Testimony being taken, the cause was calendared for hearing, and was then, by the justice holding the Special Term, certified to the General Term, to be there heard in the first instance. '
    James M. Johnston for complainant:
    It is submitted that the evidence shows distinctly and indisputably that the intention of the contracting parties was to convey the eastern portion of lot 4, instead of the western portion. The evidence clearly establishes a mistake of fact which is one to be relieved in equity. Snell vs. Ins. Co., 98 U. S., 88, 89; Elliott vs. Sackett, 108 U. S., 142.
    The only opposition to the reformation of the deed comes from judgment creditors. The claims of a judgment creditor do not rise as high as those of a purchaser. The lien of the judgment creditor is subject to every lien that could have been maintained against the judgment defendant. 2 White & T. L. Cas., pp. 44, 89-92, and cases cited; Brown vs. Pierce, 7 Wall., 217, 218; Skidmore vs. Pittsburg, etc., R. R. Co., 112 U. S., 33, 36; Baker vs. Morton, 12 Wall., 150, 158.
    The only remaining question is, whether the complainant’s right to reform his deed is affected by the Act of April 29, 1878, which provides that deeds of trust, etc., shall take effect and be valid as to creditors, from the date of' record only.
    Whatever effect may be given to that act, in a proper case, it is submitted that the “ creditors ” protected by the act are the creditors of a grantor and not those of a grantee. Such was the construction given the Kentucky statute, which uses the broad term, “any creditors,” by the Supreme Court. Sicard’s Lessee vs, Davis, 6 Pet,, 139.
    
      Charles A. Walter and W. K. Du Hamel for defendants:
    The plaintiff must show a superior equity. Brashear vs. West, 7 Pet., 616; Roundtree vs. McLain, Hempst. C. C., 248; 1 Story Eq., sec. 64, c.
    Here we have obtained a lien. Morsell vs. Bank, 91 U. S.. 361; Boone vs. Chiles, 10 Pet., 210.
    Would the court reverse all its rules and give plaintiff priority over our lien ? ' He is but a creditor. Courts will not reform as for accident among creditors. Kurtz vs. Hollingshead, 3 Cranch- C. C., 69; 4 Cranch C. C., 183.
    Not for mistake. Smith vs. Turrentine, 2 Jones, Eq., 255 ; Knight vs. Bunn, 7 Ired. Eq., 79; Hunt vs. Rousmaniere, 1 Pet., 17} Anderson vs. Tydings, 8 Md., 440-443.
   Mr. Justice Merrick

delivered the opinion of the court.

The object of this proceeding is to rectify a mistake in a certain deed of trust made by George A. Haske and wife, to secure a certain debt, which by assignment came after-wards into the ownership of Christian Ruppert, the complainant.

After the deed of trust had been made and had thus rested for several years, it appeared that there had been a mistake made in the description of the property. By an error in the recitals of the scrivener, he had conveyed the west half of a certain lot instead of the east half of it. Subsequently the deed of conveyance of the property was corrected as between the original parties, but the deed of trust was not corrected; and afterwards (after the correction) the grantee in it, Bedelía Haske, conveyed the property in trust for the benefit of her husband, George A. Haske.

While the property was thus in the possession of George A. Haske as cestui que trust under a complete and vested title, certain judgments were obtained against George A. Haske, and afterwards, the judgment creditors, for the purpose of perfecting the lien upon the equitable estate, filed their bill in equity to subject that real estate to the payment of tbe judgments; and in that state of the case the beneficiaries under the deed of trust filed their bill to correct the description in the deed, so as to override the perfected, equitable lien which had been obtained in the manner I have indicated by the judgment creditors of the cestui que trust and the grantee in the corrected deed.

The question now before the court, therefore, is whether, under these circumstances, a correction can be made in the deed, as between grantor and grantee, so as to oust the perfected equitable lien obtained by the judgment creditors of the cestui que trust, the grantee or beneficiary under the deed of trust.

Notwithstanding the provisions of the Recording Acts of the States, it at one time had come to be a pervading idea that an equitable title in a party who had had a mistake made in his legal rights would override the lien of a judgment creditor. But of recent years a more correct view has been taken of the obligation resting upon all parties to take notice of and be bound by the record titles of the country. And courts the most eminent have regretted that there has ever been a departure from the requirements of the record law so as to let in an equity of an unwritten kind to oust the title and deprive parties who have given credit to others upon the faith of the record titles.

But however that may be, we have recently had legislation which explicitly declares that the record title as it stands shall be binding in favor of the creditors and subsequent purchasers of notes so as to exclude these latent equities in behalf of the party, which, of course, would be perfect as between the original parties. And such has been the special provision of the Act of 1878 in this District, and upon that act this court has explicitly decided, in the case of Bank vs. Hitz, reported in 1 Mackey, 125, that the rights of creditors are saved and they cannot be invaded by virtue of the provision of that law which says that an unrecorded title shall not prevail against the creditors or bona fide purchasers.

To the same effect have been the statutory provisions in several of the States, and the judgments of the highest courts of the land in conformity with those statutes, upholding the policy and maintaining the integrity of the terms of the statute. Amongst others may be mentioned the case in 11 How., 140, of McCoy vs. Rhodes, and the other case of Taylor vs. Doe, in 18 How., 293.

These decisions render it, in our judgment, no longer an open question in this court, and make it imperative upon us to say that the equity to reform a deed under these circumstances cannot prevail against a bona fide judgment creditor who has a legal lien, or in case of an equitable estate has taken the necessary steps to perfect his equitable lien on such estate.

“Against any creditor,” is the language of the statute of 1878; and being bound by that decision and that recognized policy, we are constrained to say that the application to reform the deed as against the present judgment creditors cannot prevail in this court. So far as the rights, if there be any, the legitimate rights, of the grantee are concerned, after the satisfaction of the judgment creditors, of course the reformation will be granted to that extent.

The decree will be made in conformity with this opinion.