Court Opinion

ID: 8047511
Source: CourtListenerOpinion
Date Created: 2022-09-09 04:01:02.377588+00
Date Added: 2024-06-11T16:37:33.755086
License: Public Domain

Sargent, J.
In this case, the possession was taken under the mortgage, there was no attempt to make it a pledge, and neither of the parties intended it as a pledge. We do not need here to decide, that a party could not take possession of property, as pledgee, and then, lest his pledge might fail, he might take a mortgage, and hold under both, so that if one should fail, he might hold under the other, when both parties understood, and intended it to be so. Whether this would be so, or whether he would be compelled to elect which security he would rely upon, which remedy he would pursue, in fairness to other creditors, is not here material: See Haynes v. Sanborn, 45 N. H. 429.
But where the parties made a mortgage, and relied upon that alone, and the plaintiff claimed to hold under it, as a mortgage, and took possession as mortgagee, and held in that capacity alone, never claiming to hold as pledgee, and the matter of the pledge was never thought of by anybody until the trial; we do not understand how the whole character of the possession could then at once be changed, without some new contract, or how one contract can thus be changed for another, and an entirely different contract without at least the intention of the parties thus to change it.
The character of the possession is entirely different in the two cases. The pledgee holds property that still belongs to the pledgor, he holds possession of it under a special contract, which simply gives him the right thus to hold it, until his debt is paid. In case of a mortgage, the i'ight of property is conveyed to the mortgagee, by a perfect title, which title is liable to be defeated by the payment of the mortgage debt, and if the mortgagee takes possession of the property, he takes it as his own, and not as the mortgager’s. The titles to the property, are different in the two cases, and the possession is different, held under an entirely different contract; neither a mortgage nor a pledge can exist without a special contract, and these contracts being different in their terms, cannot be. substituted, the one for the other,unless the contracting parties, in some way, make that substitution, or agree to that change, which has not been done in this case.
Here, the parties have never made any contract but that of the mortgage. Now, if the mortgage proves to be void, and of no force or effect whatever, as between the parties, or anybody else; then the plaintiff’s title fails wholly, the deed being void, passes nothing, and it leaves the plaintiff with a bare and naked possession of the property without title and without any lien; the plaintiff’s title fails, and that leaves the property belonging to the mortgagor, who may at once claim it, and recover it of him; or his creditors may take it and hold it, as against the plaintiff, as there has never been any contract between him and the mortgagor, which authorizes plaintiff to *352hold it as a pledge or gives him any lien upon it. “Lien is the right of temporary possession against the person who has the right of property, until the claim of the holder respecting it, is satisfied by the owner.” iimith on Contracts, *336. A pledge can only be made by some contract, and the lien ot the pledgee, is created, and subsists by virtue of such contract. But in this case, no such contract has ever been made. The instructions, upon this point, were erroneous; or, if it be held that this mortgage may be good and valid, as between the parties, but Aoid as to creditors, on account of the fraudulent intentions of such parties toAvards such creditors, than to hold that as against such creditors, the possession of the property, taken by virtue of the mortgage, might be rightfully held as a pledge, Avould be giving effect to the fraud, and enabling this plaintiff to hold the property, under a contract, which he did not make, when he could not hold it under the contract which he did make. This substitution of one contract for another, would enable the plaintiff to take the full advantage of his fraudulent act.
We think, they were also erroneous, in regard to the validity of the mortgage. When the plaintiff’s counsel stated that the endorsements of these notes, was made for the purpose of being secured by the mortgage, it is perfectly apparent that he meant that this mode of doing the business Avas adopted rather than some other, for the purpose of convenience in giving the security proposed. Ho did not, evidently, intend to state, that this signing of the notes by plaintiff, as surety, was simply a sham, that it created no real liability on the part of the plaintiff, for which he could properly secure himself by mortgage. That it was all done for a cover, just to enable him to take the mortgage and thus keep the property of his son from his creditors, Avhen there Avas no bona fide liability incurred by such endorsement of said notes.
What Ave understand to be required by the oath to a personal mortgage, is that the debt was not incurred, or the liability assumed for the mere purpose of enabling the mortgagor to execute the mortgage, when no honest debt, or liability existed, when the Avhole transaction was not bona fide but mala fide, created or assumed for the mere purpose of enabling the mortgagor to thus cover up his property, and keep it from honest creditors.
But when it had been arranged, that for the purpose of saving costs in numerous suits, the father should endorse the son’s notes to the son’s creditors, and should thereby render himself legally liable to pay those debts for his son, and should take security from his son for his own debt and also for the liabilities thus assumed, the only questions were, Avas his own debt an honest debt, which he, in good faith, wished to have secured? And were these liabilities by endorsement bonafidef Did he assume these liabilities, for the purpose of aiding his sonin this matter? And Avas the mortgage taken in good faith to secure the plaintiff for these liabilities thus incurred and for the debts which the son owed him ?
The fact that the business was done in one way, or another way, *353as matter of convenience; that this form of adjustment was adopted, to enable the parties the more readily to make the security by mortgage, could have no bearing upon the question, as to whether the liabilities were honestly assumed, and the mortgage honestly given, to secure them.
The endorsements of the notes, may have been made “for the purpose of being secured by the mortgage,” as stated by counsel without being fraudulently made, or made for the purpose of enabling the mortgager to execute such mortgage, but they may have been honestly assumed, in good faith.
The mortgage was not, therefore, void upon that ground, as matter of law. But the jury have found that the plaintiff had possession of the goods, without fraud, and held them without fraud, to secure his claims against Albert, which would negative any fraud in the affair. The mortgage is well enough in form. The oath verified the condition, according to the doctrine of Parker v. Morrison, 46 N. H. 280, as the statute required. Upon an examination of the several provisions of the statutes, we are satisfied that possession of the mortgaged property, will only supply the place of the record of the mortgage ; and, that the affidavit is required in the one case as vell as in the other. The affidavit is made an essential part of the mortgage itself, without which, the mortgage is void as to every person but the mortgager.
The exception to the plaintiff’s testimony, in regard to offering forty-five per cent, upon Albert’s debts, and the reasons why he did so, cannot be sustained. The defendant had, previously, introduced the letter of Batchelcler to Osgood, on the ground that Batchelder was the agent of the plaintiff, in which he had offered forty per cent, on these, if Osgood could buy them in for that price. This was offered by defendant as bearing upon the question of fraud in the transactions between plaintiff and his sou, said Albert. The claim must have been, that these transactions between the father and son, were fraudulent in this, that the father had more property of the son in his hands than was needed, to secure him for all his debts and liabilities, so that he could actually afford to pay this forty per cent, upon his son’s Boston debts, out of his son’s money or property, which was fraudulently concealed in his hands.
To meet this view of the case, it was competent for the father to state, that he had not only offered forty per cent, but forty-five, on these debts of his son, but that instead of his doing so because he held property of the son in his hands fraudulently, it was because he was willing to pay his own money to have his son liberated from this indebtedness, and made a free man; and that he did this the more readily, as this was his only son, &c. It was to show, that this offer was made, for reasons, that were sufficient and honest, and that no fraud could be inferred from this act, when the true reasons that prompted the act, were fully understood. This exception must be overruled. Hale v. Taylor, 45 N. H. 405.
Whether the mortgage was properly stamped or not, becomes im*354material here, since after the mortgage was ruled in, as competent, it was afterwards upon another point, ruled out again, so that when the case was finally submitted to the jury, the mortgage was out of the case, and did not go to the jury as evidence, when the case was finally submitted to them by the court. This might properly be done. Judge of Probate v. Stone, 44 N. H.593.
But we think, the mortgage was not sufficiently stamped, and before another trial, the plaintiff must take such measures as will ensure the admissibility of the mortgage, by getting the proper leave to stamp the mortgage as much as may be necessary to remove all doubts upon that question, and have the stamps properly cancelled.
Every law of Congress that has been made, so far as we recollect, has provided some way, in which any instrument may be properly stamped, after its execution. And counsel who consult the pockets of their clients, or the convenience of the court, will never suffer any question of that kind to arise, in their cases, but upon any suggestion, that an instrument is not properly stamped, which they desire to use as evidence, they will see that stamps enough are placed upon it to remove all question upon that point. If more stamps than are absolutely necessary, should be placed upon an instrument, it would do no harm.
When this mortgage is again offered in evidence, let it be stamped so that no claim can be made, that it was not sufficient, and the mortgage will then be well enough, so far as we can now see. To-bey v. Chapman, 13 Allen 123 ; Holyoke Company v. Franklin Company, 97 Mass. 150.
Having thus examined the several questions raised upon the case, and stated the conclusions, to which we have arrived in each. The question arises, what shall be the final order in the case? We have adopted in Lisbon v. Lyman, * Grafton county, on the present circuit, a rule somewhat new in this state, though long since established in some other jurisdictions, that where a general verdict depends upon the finding of several disputed facts or questions, some of which were not and could not have been affected by any error in the ruling of the court, and others of which were or may have been thus injuriously affected, the verdict will not be wholly set aside, and the case thrown open again to a new trial on all points, as the practice has heretofore been; but that such parts of the verdict, such findings of fact, as have been had upon the merits and to which no valid objection can be made, shall remain undisturbed, and that the verdict shall be set aside and a new trial granted only on those points necessary to correct some error or mistake; and that verdicts are to be treated like judgments, awards and other legal, proceedings, which may be good in part, and bad in part, in which case the court will, if the position of the case admit of it, preserve that which is good and correct that only which is erroneous. Winn v. Insurance Co., 12 Pick. 279.
*355In this case, the court committed two errors in their rulings on points of law: 1st, The mortgage was held to be void, which was an error against the plaintiff; 2d, That plaintiff might hold the property as a pledge in case the mortgage was void, which was an error in favor of the plaintiff.
But the only question of fact submitted to the jury, was the question of fraud, and that question would be the same, whether the goods were held under the mortgage, or as a pledge. Where the result is right, though the rulings of the court were erroneous, the verdict will not be set aside. Stevens v. Lyford, 7 N. H. 364.
If the first part of the instructions, stood alone “that if the jury found that plaintiff had possession of the goods in pledge, without fraud, he was entitled to a verdict,” it might be doubtful whether the fact of the existence of the pledge was not submitted to the jury, and if that were so, and there had been any competent evidence, upon which the .jury could have found that fact, then their finding settles the whole case, both, that theie was a pledge of the property, and that the possession of the property thus held in pledge was without fraud.
But the next sentence in the instructions puts that matter right, which is, “that if plaintiff took and held possession of the goods with Albert’s consent, without fraud, for the purpose of securing plaintiff’s claim against Albert: the plaintiff' cordd recover as pledgee, although he and Albert understood that he took and held possession as mortgagee only ; and although he had not before the trial claimed the goods as pledgee.” This shows that the whole question of pledge was one of law, depending upon these instructions of the court, which instructions we hold to be erroneous. Taking these instructions as the law, as the jury were bound to do ; and they have not passed upon anything but the question of fraud, precisely the same question and depending upon the same evidence, which must have been settled, in determining the validity of the mortgage.
Suppose that the court, instead of making two mistakes, had made none, but had ruled, as we hold the law to be, that the mortgage, aside from the question of stamps, was valid, legal in form, and not void on account of the fact stated by counsel. Then the question of a pledge would not have arisen, and the question would have been, whether the plaintiff held possession without fraud under his mortgage ; and, if so, then he would have been entitled to a verdict. The instructions then would have been, “ that if plaintiff took and held possession of the goods with Albert’s consent without fraud, for the purpose of securing plaintiff’s claims against Albert, plaintiff' could recover as mortgagee.” The only question to be passed upon by the jury would be as to the existence of any fraud between the plaintiff and his son, and that question the jury, as we have seen, have already settled by their verdict.
They have in fact found that “ plaintiff took and held possession of the goods with Albert’s consent without fraud, for the purpose of securing plaintiff’s claim against said Albert.” And that fact, thus *356found, would make the mortgage good and binding, if legal and sufficient in form, as we hold it was.
The only element in the instructions given which could be omitted in case of the mortgage, would be “ the consent of Albert.” In case of a valid mortgage, the plaintiff might take and hold possession of the property, as well without Albert’s consent as with it, but in case of a pledge, it would be otherwise. He must have consented to the plaintiff’s taking possession as pledgee, and under such a contract as that he would be authorized to hold such possession even as against the pledger, till the debt was paid. But the fact that Albert consented that his father should take and hold possession of all these goods, under a mortgage, could not affect the case in anyway, unless it might, under some circumstances, be an indication of fraud or collusion between them.
But the instructions were based upon the fact that both the plaintiff and Albert understood at the time, and all the time up to the trial, that the taking and holding of possession of the goods was under the mortgage only. The consent of Albert must then have been fully considered, so far as it could bear upon the question of fraud, under those instructions, just the same as though the possession were in fact under the mortgage, as it could make no difference, upon the question of fraud, whether the possession was in fact legal or not under the mortgage, so long as both parties understood that it was so. And if the question were again submitted to the jury, under instructions that the mortgage was a valid and legal instrument, and good to convey the property if there was no fraud between the parties to it, as against Albert’s creditors; every circumstance must be weighed in settling the question of fraud, just as it was weighed by the jury in settling the same question under the instructions given in this case.
The mortgage being legal in form, and the possession of all the property under it being untainted by fraud, another question would arise which, under the rulings in this case, became immaterial, and that is the question of stamps. We think there are not stamps enough upon the mortgage, that are cancelled, to answer the requirements of the law'. We have not been disposed in this state to hold that the law of Congress requiring stamps on legal instruments, &c., in state, courts is unconstitutional, * and as this mortgage has not been *357properly stamped hitherto, the plaintiff is in fault, and must put himself right in that regard, before the mortgage can be received in evidence; but the stamping of the mortgage will raise no new question of fact, nor will it call for any rehearing or refiuding of any fact already settled by the jury. Whether the paper is properly stamped or not, is evidence for the court, and not for the jury. In case of amendments which are to be passed upon by the court, they may be allowed after verdict, and judgment may then be rendered upon the verdict. Howard v. Turner, 6 Greenl. 106 ; Buck v. Hardy, 6 Greenl. 162 ; Whittier v. Varney, 10 N. H. 291.
If the matter of the amendment might have altered the decision of the jury, or the course of the trial, then the verdict should be set aside. The return of an officer upon an extent, which was introduced in evidence, may be amended after verdict, without setting aside the verdict as the sufficiency of the return was for the coui’t, and not for the jury. Whittier v. Varney, 10 N. H. 304, because as there stated, if amendments may be made in the cause itself, after verdict, they may be made in matters used as evidence in the cause, where they are not of a nature to affect the finding of the jury.
And in Stevenson v. Mudgett, 10 N. H. 338, 342, 343, it is held that where a witness, whose competency depended upon the execution and delivery of a release to the plaintiff, was admitted to testify subject to exception, and after verdict it was held that the release was not shown to have been properly delivered, and that, therefore, the witness was inproperly admitted, it was held that as this was evidence for the court, and not. for the jury, the feet of delivery might be supplied after verdict, and that when that fact was established to the satisfaction of the court, judgment might be rendered on the verdict.
These authorities go fully to the extent that we need to go in this case. The mortgage was ruled in and allowed to go to the jury, so far as the question of stamps was concerned, subject to exception. The competency of this evidence was a question for the court, and could have no bearing Avhatever upon the finding of the jury. We think this evidence of competency may now be supplied by the addition of stamps, without setting aside the verdict.
The case then stands thus : the mortgage was ruled to be competent evidence to go to the jury so far as the stamps were concerned, we hold that ruling to be wrong, but as the question of competency is one solelv for the court, that deficiency may now be supplied, as it can easily be, Avithout setting aside the verdict. The other ruling of the court by which the mortgage was afterwards excluded, we hold to be wrong; but that under the instructions given to the jury, we have seen that they have passed upon the question of fraud, in precisely the same way and upon the same evidence that they would have done and must have done, had the mortgage been held valid, and the case been submitted to the jury, to pass upon the question of fraud, in the plaintiff’s taking and holding possession of the goods under the mortgage. The only question submitted to the jury,was the question of fraud between plaintiff and his son Albert, and the decision of *358that question must have been the same, and found upon the same evidence, if the case had been properly submitted to the jury, that It was under the instructions that were given, so that we see no ■■ occasion to set aside this verdict.
It is therefore ordered, that if the plaintiff produces' in court at the next trial term thereof, said mortgage stamped with $5.00 worth of stamps all properly cancelled, and shows that all penalties and forfeitures to the United States Government, incurred by its not having been stamped earlier, have been fully paid or remitted, he shall be entitled to judgment on the verdict in this case, otherwise the verdict will be set aside, and a new trial granted.
In any event, the court will make such order in relation to the costs, as may be just and equitable.