Court Opinion

ID: 3628022
Source: CourtListenerOpinion
Date Created: 2016-07-06 00:08:10.814082+00
Date Added: 2024-06-11T14:07:39.252075
License: Public Domain

Upon the facts found by the referee in this case, I think the judgment of the Supreme Court should be affirmed.
On the 2d of March, 1857, the defendant gave to Chester Folsom an agreement in writing, by which he bound himself to convey to Folsom, the premises described in the plaintiff's complaint, provided Folsom should pay to him $600 three years from that date, and should also semi-annually pay the interest thereon; which sum the defendant had advanced for Folsom in purchase of the premises, taking the deed as security. On the 12th of March, Folsom and the defendant further agreed in writing, that the defendant should hold the land, not only as security for the $600 and interest, but for such other sums as the defendant might subsequently "let him have for his note, or become holden for by indorsement, or otherwise, for him;" and Folsom bound himself to pay the same before the delivery of a deed, as if those additional sums had been originally incorporated in the first named agreement. Folsom was put by the defendant in possession of the land.
On the 1st of March, 1859, the interest on the $600 being *Page 309 
wholly unpaid, Folsom applied to the defendant to extend the time for the performance of the conditions of the contract, and for a further advance, and the defendant thereupon advanced him fifty dollars in money, wrote upon the original contract a receipt acknowledging the payment of the interest to that date, and agreed to extend the contract another year, beyond March, 1859; and thereupon took Folsom's notes for the fifty dollars, the eighty-four dollars interest, and for amounts due on other transactions between them.
At that time, and as a reason for asking an extension of the time for performance of the conditions, Folsom told the defendant, that the present plaintiff was to assist him pecuniarily, but did not inform him of any purpose to assign his contract.
The defendant had, therefore, at that time, no reason to suppose that the plaintiff was about to acquire any interest in the premises, or that the pecuniary assistance which Folsom expected from the plaintiff, was not intended to enable Folsom himself to perform the conditions of these agreements, and so acquire the title to the lands.
But thereafter, Folsom assigned the contract of the 2d of March to the present plaintiff, and the referee finds that at the time of that assignment, the plaintiff knew of the additional debt of Folsom to the defendant, but that he received the assignment, and went into possession of the land, on the supposition that he would be entitled to a conveyance upon the payment of the amount due upon the agreement of March 2d 1857, and without any knowledge or information of the agreement of March 12th, 1857, above stated.
In May and June, 1860, plaintiff conversed with the defendant about the assignment, and in September paid to him six months interest, and on neither occasion was any thing said by the defendant "about the agreement of March 12th, 1857, or claim against the land under it."
In the findings of the referee, forming a part of the case, he does not state what constituted the consideration for the assignment by Folsom to the plaintiff, but he does profess to *Page 310 
find, as a "matter of law," that "the plaintiff is not a bonafide purchaser of said contract, on the ground that he parted with no value for the transfer; that it was taken in payment of a precedent debt." In his report, which is contained in the judgment roll, he finds that "the sale was an absolute one, and the purchase price was agreed to be paid by said Reeves, by applying the same towards the payment of certain notes of said Folsom, which had been indorsed by said Reeves." But even here, there is no finding that the plaintiff in fact, paid any thing towards that purchase price. If it would affect the result, it might be regretted, that the referee, when he found by his report that the assignment was taken in payment of a precedent debt, should have left it doubtful whether the purchase price was to be applied as payment to the plaintiff of notes of Folsom, which had been indorsed, and already taken up by the plaintiff, which is most consistent with his report, or notes which had been indorsed, and were agreed to be thereafter taken up by him, which latter would seem to be the construction given to the finding in the opinion of the Supreme Court.
In my opinion, however, this obscurity in the meaning of the finding cannot affect the decision which it is our duty to make.
The defendant holds the title to the lands; and whether that title be regarded as an ownership of the lands, or an interest as mortgagee, as between him and Folsom, with whom he entered into the contracts, he cannot upon any grounds, legal or equitable, be compelled to give up that title until he is paid all that was secured to him by the two agreements made with Folsom about two years before the plaintiff had any concern in the matter.
Folsom held an agreement from the defendant, according to the tenor of which, he was entitled to a deed upon the payment of $600 and interest; but that agreement had been modified so as to require the payment of other sums mentioned in the later agreement.
There is, of course, no pretence that agreements for the conveyance of lands have the character of negotiability. *Page 311 
On what ground, then, can any claim be made that Folsom could assign to the plaintiff a better right than he had himself, or, in another form, a right to have from the defendant a conveyance on terms more favorable than Folsom could himself demand it?
No legal ground is alleged or claimed to exist. If there be any ground, it must be some equity in favor of the plaintiff higher than the legal and equitable rights of the defendant, and sufficient to override them. For if the equity of plaintiff and defendant are equal, the defendant may repose in his actual position. Where equity is equal, the law must prevail; and if time be regarded, then the maxim "qui prior est in tempore,potior est in jure," affirms the right of the defendant; for this is as truly a maxim of equity as of law.
To disturb this position of the defendant, it must be shown that he has done or omitted something which it was inequitable for him to do, or omit to do, and which has invested the plaintiff with a superior equity, entitling him in priority to the clear right of the defendant, as between him and Folsom; for, looking at the contract in question as a mere chose in action, it is not questioned that, according to the decision in Bush v.Lathrop, in this court, (22 N.Y., 535), the assignor could not by assigning it confer any greater rights than at the time of such assignment he had himself.
The defendant has done nothing which can operate as an equitable estoppel of his claim, to be paid all that was secured to him by Folsom's second agreement. He neither said anything to the plaintiff which could mislead him, nor kept silence with knowledge that the plaintiff was about to take an assignment from Folsom. He was not present at any negotiation on that subject, and, in fact, he did not know or have any reason to suppose that the plaintiff contemplated the taking of such assignment until after it was done. I do not mean by saying this, that it would have been his duty to seek the plaintiff and give him warning, if he had heard of such a purpose. I think, on the contrary, that if the plaintiff desired to be safe in his dealing with such a contract, he *Page 312 
should have sought the defendant and learned from him whether there were or were not a defence to a claim for the performance of that contract, without other conditions than those expressed in it. This, I apprehend, is the general rule where a party intends to deal with instruments which by law are not assignable. But I state the facts as broadly as they are found by the referee, to show that no equitable estoppel can arise by reason of any failure of the defendant to give notice of his claims to the plaintiff; he neither knew nor had reason to believe that the plaintiff had or expected to have any interest or concern in that matter.
But he did not disclose his claim when he did hear of the assignment. Very true, but the assignment had then been made. His then volunteering the information was not called for by any principle out of which the doctrine of equitable estoppel arises. Besides, knowing nothing of the negotiation between Folsom and the plaintiff, except that the plaintiff "was to assist Folsom pecuniarily," and nothing of the actual terms of the assignment, he had no reason to suppose that Folsom had not acted with entire candor and honesty, or that the plaintiff was ignorant of the precise relation of Folsom to him and to the premises. And when to this is added that, in fact, as the referee finds, the plaintiff did know that Folsom owed the additional or further debt to the defendant, there can be no pretence that the defendant is estopped by failure to give notice to the plaintiff. If either, under the circumstances, should have sought the other, the plaintiff should have sought the defendant.
What further facts are there in the case? Simply and only this: Folsom was in the possession of the land, and he had in his possession the agreement.
But the moment the plaintiff saw the agreement he was apprised that Folsom's possession was under the defendant, and that such possession was not per se evidence of the nature or conditions on which he held.
The fact of possession, therefore, becomes wholly immaterial, and the question is reduced to this: Does a contract for *Page 313 
the sale or conveyance of land carry with it such assurance that the holder of the title will convey according to its terms, that third persons may act in faith thereof without inquiry, and compel such holder to convey, notwithstanding he has a defence good against him with whom the contract was made? It seems to me enough to state the question. Contracts for the conveyance of land have no such force, and no such character of negotiability. If they had, then an actual release by the party with whom the contract was made would avail nothing.
Such a contract does not carry to third persons so strong a guaranty of future performance as a bond for the payment of money; and yet the assignment of such a bond is confessedly subject to set-off, to proof of payment, release or other legal or equitable grounds upon which the obligor might resist payment, if pursued by the obligee.
On any principle of balancing of equities, I am not able to discriminate between the two cases.
The only room, I think, for doubting the correctness of the judgment arises from the suggestion that the defendant had indorsed upon the contract of March 2d a receipt for the interest to March 1st, 1859, and taken Folsom's note therefor; while, on the other hand, the agreement of March 12th is claimed to include only actual and fresh advances.
The terms of the latter agreement declare that the premises are held for the $600 and interest, and "such other sums as I may subsequently let him have for his note, or become holden for by indorsement or otherwise for him." I do not think that, as between the defendant and this plaintiff, the defendant, after having acknowledged on the contract of March 2d that he had received the interest, could be permitted to contradict his receipt, and claim the eighty-four dollars as interest on that $600, unless the general and vague finding of the referee that the plaintiff, when he took the assignment of that contract, "knew of the additional debt of Folsom to the defendant," can be construed as importing that the plaintiff knew that that interest had not in fact been *Page 314 
paid. But the reasoning which leads to this, makes this acceptance of Folsom's note and giving time for that payment in substance and, I think in a just sense, a letting of Folsom have that sum for his note, within the meaning of the agreement of the 12th of March, and made that agreement operate as a security therefor.
The judgment should be affirmed; but the plaintiff should be permitted to pay the amount due to the defendant, with interest and costs, and receive a deed within a reasonable time, to be limited in the order.
All concurred for affirmance except JAMES, J., who thought there should be a modification, by deducting the eighty-four dollars and interest from the sum of advances allowed by the referee.
Judgment affirmed, with leave to the plaintiff to pay the amount found due by the referee, and interest and costs, and receive a conveyance.