Court Opinion

ID: 6121414
Source: CourtListenerOpinion
Date Created: 2022-02-04 18:48:37.864148+00
Date Added: 2024-06-11T08:23:28.069684
License: Public Domain

Learned, P. J.:
The agreement Avas for the sale of one farm, as a whole, although the description Avas to be taken from several deeds of distinct parcels. The omission of one of these parcels from the deed and from the mortgage aauis a mere mistake of the scrivener, and not noticed by the parties at the time. The case is one of error in the description, and is within the principles of equitable relief, as administered in this State. As between Reed and Prone, the deed and the mortgage should be reformed, according to the real agreement. The defendant suggests that the intent of the parties is in fact carried out in the mortgage, because it does truly convoy the premises deeded that same day by Reed to Frone. But this fact only shows that the same error was common to both instruments. Neither expressed the real agreement. Both should be reformed. (Johnson v. Taber, 10 N. Y., 319.)
The defendant urges that the original agreement was by parol; that, therefore, to re-form the instruments is to enforce a contract void by the statute of frauds. It is not necessary to inquire hoAV much force this position Avould have, if there were a parol contract to sell Iavo independent and distinct parcels of land, and if the deed should, by mistake, convey but one of them. (See Smith v. Underdunck, 1 Sand. Ch., 579.) It is enough that, in the present case, the agreement Avas for the sale of one farm, and the mistake was the omission of a part of the description; and the purchaser has gone into possession. Equity will l’elieve, although the original contract was by parol. (De Peyster v. Hasbrouck, 11 N. Y., 582; Rider v. Powell, 28 id., 310; Wiswall v. Hall, 3 Paige, 313.)
The case of Glass v. Halbert (102 Mass., 24), is cited by the ' defendant as in conflict with these views. But it Avill be seen by reference to that case, that the equity power of the Massachusetts *142courtis somewhat limited by statute, and that the views there held, are shown not to be in harmony with the decisions of this State. The statute of frauds in this State expressly declares that it is not to abridge the powers of courts of equity to enforce'specific performance. (2 R. S., m. p., 135, § 10.)
This relief of the reformation of instruments is granted in favor of privies, as well as parties. When Reed assigned the mortgage to the plaintiff, he stated that it covered the whole farm. The plaintiff went to the farm and saw Frone in possession and working it. Frone himself pointed out the boundaries to the plaintiff, and represented to him that the mortgage covered the whole of the farm. The plaintiff, believing these representations, purchased the mortgage, under the supposition that it covered the whole farm. ' Every reason therefor of equity and justice gives to the plaintiff the same rights against Frone which Reed had for the reformation of the mortgage. The question then remains, whether Baumes is such a bona-fide purchaser that he can defeat the plaintiff’s equity.
The court finds that Baumes knew, when he purchased, that the plaintiff claimed that his mortgage covered the whole farm, including the part purchased by Baumes. This knowledge prevents him from being a purchaser in good faith. He urges, however, that the information which he had on the subject was not such;as to charge him with knowledge. But the circumstances surrounding his purchase are, of themselves, suspicious. The price which he paid was less than the value of the land. He did not pay in cash, but in securities- — -one of them a second mortgage. He know that the piece of land which he purchased was part of the whole farm. Furthermore, ho knew, before he purchased, that Frone had no legal title to that part of the farm; and he knew, therefore, that he was buying only an equitable right. For this reason, he was not a bona fide purchaser; for, knowing that he was buying only an equitable right, he was chargeable with knowledge that there might be other equities superior to his. Frone, it is true, had said that he had bought this lot of Reed, and that Reed would convey it; and Reed, on Baumes’ application before his purchase, had promised to do so.
But even these facts might have excited his suspicion. He knew *143that Frone was in possession of the whole farm, by purchase from Reed. He was informed by Frone that the parcel in question was not covered by the deed from Reed, but that Reed would convey, and that Frone had bought the parcel. He knew that Frone had given back a mortgage to Reed, which Reed had assigned to the plaintiff; and, at one time, he drew an assignment of the crops, to be executed by Frone to the plaintiff, as further security.
We are satisfied with the correctness of the finding that the plaintiff had been informed that the mortgage covered the whole farm And it seems to us probable that the defendant knew, or had reason to believe, when he made his purchase from Frone, that the omission of this parcel of land from the deed, and from the mortgage, was an accident, which Reed ivas ready to correct. But, at. any rate, he knew that Frone had no legal title, and that all which he was obtaining by the purchase was Frono’s equitable rights. A bona fide purchaser is one who takes a legal title, without notice of conflicting equities, and for a valuable consideration. Whatever the defendant paid, he paid only for such equity as Frone might have against Reed; aud that equity was subject to the counter equity in favor of Reed, and of Reed’s assignee, the plaintiff. Whenever Frone should demand a deed from Reed of the omitted land, Reed might demand in return from Frone an extension of the original mortgage over the omitted parcel. If Frone, or if his assignee, asked equity, he was bound to do equity.
The defendant never obtained the legal title until after this action was commenced, and after he had both constructive and actual knowledge of its commencement; and the deed which Reed then executed to him was without any valuable consideration. Therefore, he gained nothing thereby.
It may be said that the defendant, before purchasing from Frone, obtained Reed’s promise to convey to.him; that Reed had but the naked title as quasi trustee for Frone; and hence, that the defendant is entitled to the benefit of his purchase from Frone. However true this might be as against Reed (if the defendant had had.no notice of the mortgage claim), it cannot avail against the plaintiff Reed’s promise to convey, based on no consideration, could not deprive the plaintiff of his then existing equity.
The defendant asks that he shall be protected to the extent of *144payments made by him before notice. But he had notice before he made any payments, as is found by the court, and, as we think, is sustained by the case.
The judgment should be affirmed, with costs.
Present — Learned, P. J., Boardman and Tappan, JJ.
Judgment affirmed, with costs.