(107 A.) for damages suffered by the defendant [ disposition of this case does not require through the negligence of the plaintiff, and such a decision. The opinion seems to adshould have been pleaded as such. The mit in substance that such is the rule in the plaintiff and defendant had made two con- case of a pledge, but that the present situatracts, one evidenced by the note and one by tion is not analogous to that of pledge, and the conveyance for security. The defendant that the rule does not apply in the case of a complained of a violation of an equitable real estate mortgage. I do not see any difduty under the second contract. One right ference so far as this distinction is urged. of action cannot be a bar to another right of In both cases the security in the hands of action. It may be used by way of counter- the creditor is held in trust for the payclaim and is available only in that way. ment of the debt. That there is no such Cooper v. Simpson, 41 Minn. 46, 42 N. W. 601, distinction seems to have been held in New 4 L. R. A. 194, 16 Am. St. Rep. 46; Tag- London Bank v. Lee, 11 Conn. 112, 27 Am. gard v. Curtenius, 15 Wend. (N. Y.) 155. Dec. 713. Hence the ruling of the trial court upon the pleadings was right. The majority opinion goes much further. It assumes that the statement of facts as a defense in bar is proper pleading, and, as is quite unnecessary for the determination of this case, takes the broad ground that under the circumstances stated the plaintiff owed no duty to give notice to the defendant of the pendency of the foreclosure and the danger of loss of the interest in the property mortgaged by him to her to secure the note sued upon while the plaintiff still continued to look to him for the payment of the note. No authorities are cited in support of this proposition. This is not conclusive; but, as I read the cases, they point the other way. The allegation is that the plaintiff willfully or negligently permitted the loss of the security without notifying the defendant so that the defendant, if he saw fit, could save all or a part of the value of the security furnished by him and standing in the plaintiff's name. The alleged loss to the defendant was $3,000. The plaintiff then held a mortgage title on this land of the value of $3,000. Equity will not permit her to willfully or negligently suffer this title, vested in her, which represents substantial value to the defendant, to be wiped out without notice to him, and then enforce payment on the note without allowance to the defendant by way of counterclaim for the damages the negligence has caused him. The defendant, having parted with his equity, became a stranger to the title, having first carved out an interest in the property to secure the plaintiff's note. Upon subsequent payment of the note, he was entitled to be subrogated to the rights of security which the plaintiff held. If these rights had disappeared through the negligence of the plaintiff, the result is that the security and the note have become dissociated; the security, without fault on the part of the second mortgagor, the present defendant, going to the benefit of the first mortgagee under his foreclosure, and the note remaining in the hands of the second mortgagee as a personal claim in full against the maker. I am unable to subscribe to a doctrine that involves such a result, and the correct I admit that it was not the duty of the plaintiff to protect the defendant against the extinguishment of the security of the second mortgage note. I do not admit that she could willfully or negligently permit this to be done without notice to her mortgagor who otherwise, to her knowledge, had no notice that such extinguishment would take place, so that he might protect himself if he saw fit. A mortgagor has a perfect right to convey his equity of redemption, and, having done so, has the right to have the mortgaged property applied to the payment of the mortgage debt so far as necessary for his protection against personal liability for the debt secured. Jones on Mortgages (7th Ed.) §§ 676, 678a. In Townsend Savings Bank v. Munson, 47 Conn. 399, Munson mortgaged sufficient land to a bank to secure payment of his note and afterward conveyed the equity to Wood; upon his assumption of the note the bank released its claim on part of the security. The court held that there remained in Munson the right to have both the note and Wood's agreement protected by that security, and said: "If the bank compels him to pay the note, it must restore the security to him; unless it is able to do this, it must content itself with the proceeds of the land retained." Mass. 459, our case of Townsend Savings In Worcester Savings Bank v. Thayer, 136 Bank v. Munson, supra, is cited with apand it is held that the assumption of the proval. The rule above stated is adopted, mortgage by the purchaser of the equity does not affect the mortgagor's rights, and that the fact that the mortgagee released in good faith will not protect him. In other words, the mortgagor is under no obligation to make any indemnity contract with his vendee, as is suggested in the opinion. This does not affect his rights against his mortgagee. The court in that case said: "While there is a difference between a contract that the assignee of the equity shall actually pay the mortgage debt, and a contract that the estate shall remain charged with the debt, so that the assignee must necessarily pay it if he would protect his property, in either case the mortgagor is entitled to the benefit of this security." See, also, North Ave. Savings Bank v. 1 2. DEEDS 97-HABENDUM REPUGNANT TO Hayes, 188 Mass. 137, 74 N. E. 311. GRANT. In Of course, a mere transfer of the equity leaves the land charged with the debt. Jones on Mortgages, § 879, it is said: "After a mortgagor has sold his equity of redemption, he has the same right as any third person to purchase and take an assignment of the mortgage, and upon payment of a prior incumbrance he is entitled to be subrogated to the rights of the holder of such incumbrance; and this right of subrogation is not defeated by his having taken a second mortgage as security for the payment of the original mortgage debt. "If the mortgagee, with knowledge of the mortgagor's right to have the property applied to the payment of the mortgage debt, does anything to impair this right, as, for instance, if he releases a portion of the mortgaged premises, he must suffer the loss himself, by being deprived to that extent of his right of recourse to the mortgagor, who, in such case, stands in the position of a surety." See Hart v. Chase, 46 Conn. 207. tee EVIDENCE. 211(3)—CANCELLATION-FRAUD Findings of master held to show that granson fraudulently represented to grantor mother that support of grantor's granddaughter was provided for in mortgage back conditioned for support, and that plaintiff relied upon the representation as part consideration for the deed. 6. DEEDS 70(8)-CANCELLATION-Grounds -FRAUD. Where son fraudulently represented to his mother, grantor, that mortgage back provided for support of her granddaughter as well as of grantor, and mother relied upon representation as part consideration for deed, the mother is entitled to have the deed canceled. Appeal in Chancery, Caledonia County; Leighton P. Slack, Chancellor. The mortgagor in such case, having ceased to be interested as owner, in the land he mortgaged, is entitled, upon payment of his note, to have returned to him the security he placed in plaintiff's hands; that the security was created by deed rather than delivery of physical possession can make no difference. If the plaintiff by her act, whether in good faith or not, if without the consent of the defendant, has become unable to turn back the security received, the plaintiff must, by way of counterclaim or set-off, allow as against the amount due on the note the damage caused the defendant by her inability to turn back the security. If Bill by Ada M. Bennett and others against the plaintiff would have been liable in the George K. Bennett and others. Bill dismissway stated upon a voluntary release with-ed, and plaintiffs appeal. Reversed and reout defendant's consent, she cannot be per-manded, with mandate. mitted to work the same result by willfulness or negligence. She is equally liable when, having notice herself that the security is in danger from foreclosure of a prior mortgage, and being chargeable with notice that the defendant is not a party to the foreclosure suit, she willfully or negligently fails to give the defendant notice of the pending foreclosure. (93 Vt. 316) BENNETT et al. v. BENNETT et al. (No. 146.) (Supreme Court of Vermont. Caledonia. May 15, 1919.) 1. DEEDS 124(3)-REPUGNANT CONDITION. Closing clause in condition of deed providing for support of grantor and his wife, to the effect that on the decease of both title should vest in grantee, held wholly repugnant to premises of deed, and not to defeat grant. Argued before WATSON, C. J., and POWERS, TAYLOR, and MILES, JJ. Searles & Graves, of St. Johnsbury, for appellants. Dunnett, Shields & Conant, of St. Johnsbury, for appellees. MILES, J. The bill in this case was originally brought by the plaintiff Ada M. against the defendants George K. and Annie M. Bennett, and after the same was entered in court the other plaintiffs and defendants were made parties. The parties who have taken an active part in the trial are Ada M. and the defendants George K. and Annie M. Bennett. The additional parties were made such because of a question having been raised concerning the title to the premises in question, and we think it is as well to treat that subject here as in any part of our opinion. For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes (107 A.) William H. Bennett, husband of Ada M., on habendum cannot enlarge the grant, yet it August 26, 1905, conveyed the premises in may be considered in aid of its construction, question to John W. Bennett by warranty and the same may be said of the covenants deed, conditioned for the support of William following the habendum. H. and Ada M. Only the name of William H. appeared in the body of the deed, but the same was duly signed and acknowledged by William H. and Ada M. The condition of the deed was as follows: "This deed is conditioned that the said John W. Bennett shall provide a good home for the said William H. Bennett and his wife, Ada M. Bennett, at the home place situated on the property above described, and shall also furnish them with proper food, clothing and medical attendance as long as either of them shall live, and upon the decease of both, the said William H. and Ada M. Bennett, the title is to vest in the said John W. Bennett, his heirs and assigns, but not before." On the 31st day of December, 1913, John W. conveyed the same premises, with the approval of William H., to Ada M., and on the following day, William H. and Ada M., by a sealed instrument, released John W. from all liability under and by virtue of said condition. The title to the premises remained in this condition until the death of William H., June 13, 1914. Subsequent to the death of William H., the mother of Ada M. gave her a mortgage which rested upon the premises in question, outside of the homestead, amounting from $500 to $1,000. It is said in Chapman v. Longworth: "A grantor cannot destroy his own grant, however much he may modify it or load it with conditions. Having once granted an estate in his deed, no subsequent clause, even in the same deed, can operate to nullify it." [4] The plaintiff further claimed that, Ada M. not being named in the deed from William H. to John W., no title or interest in the granted premises passed to John W., and therefore his deed to Ada M. passed no title to her, and the title in the premises remained in William H. to the time of his death, and is now a part of his estate. But this contention cannot be sustained. The sole deed of William H. was sufficient to convey whatever interest he had outside of the homestead, and if the premises described in the deed consisted in part of real estate, outside of the homestead, such real estate passed to John W. by that deed. Hunt v Davis, 90 Vt. 153, 96 Atl. 814. [5] Under the foregoing authorities the deed from William H. to John W., having conveyed to the latter the entire interest which William H. had in the premises, outside of the homestead, subject to the condition in the deed, the conveyance from John W. to Ada M. vested her with all the title [1-3] The plaintiff contends that because which John W. received from William H.; of the closing clause in the condition, viz., and, though the deed from William H. to "and upon the decease of both the said Wil- John W. contained a condition for the supliam H. and Ada M., the title is to vest in port of William H. and Ada M., its release the said John W. Bennett, his heirs and as- left the title resting upon the warranty deed signs, but not before," no title ever vested as perfect as if the deed had never contained in John W. because Ada M. is still alive. a condition, and Ada M., under the deed from But this is not so. The clause in the condi- | John W., became vested with all the title to tion of the deed is wholly repugnant to its the premises outside the homestead. Upon premises. The habendum in the deed, when the death of William H., Ada M. became repugnant to the grant, yields to the manifest intent and terms of the grant. If clearly repugnant to the grant, it is treated as of no validity or effect. Adams v. Dunklee, 19 Vt. 382; Flagg, Adm'r, v. Eames et al., 40 Vt. 16, 23, 94 Am. Dec. 363; Congregational Society of Halifax v. Stark, 34 Vt. 243; Thompson v. Carl et al., 51 Vt. 408; Cummings v. Dearborn, 56 Vt. 441; Deavitt v. Washington County, 75 Vt. 156, 161, 53 Atl. 563; Chapman v. Longworth, 71 Vt. 228, 44 Atl. 352; De Goosh v. Baldwin et al., 85 Vt. 312, 317, 82 Atl. 182; Mills v. Catlin, 22 Vt. 98. Such was the common law, and such is the well-settled law of this state. The covenants subsequent to the habendum are subject to the same rule. The habendum and subsequent covenants may modify, limit, and explain the grant, but they cannot defeat it when expressed in clear and unambiguous language. See cases above cited. also vested with title to the homestead (G. L. 2710), and this completed her title to the entire premises in question, leaving none of it in William H. at the time of his death. In this view it is unnecessary to consider what effect, if any, the gift of the mortgage to Ada M. had upon her title. This holding renders it unnecessary to further consider the equitable rights of the added parties, who were made such under the claim that William H. died seized of the real estate in question, and the further consideration of the case rests upon the rights existing between the original parties, hereafter referred to as plaintiff and defendants. The case was referred to and tried by a special master, who reported to the court, and on that report the chancellor dismissed the bill, and the case comes here on appeal from that act of the chancellor. The controversy grows out of a conveyance of these premises from Ada M. to George K. It is said in De Goosh v. Baldwin, that the and a mortgage back from George K. and 107 A.-20 his wife, Annie M. Bennett, conditioned for the support of the plaintiff. The plaintiff claims that she was induced to convey the premises to the defendant George K. through his fraudulent representations that the condition of the mortgage contained a provision, not only for her support, but also for the support of the granddaughter, when in fact it contained a provision for only her own support; and she also claims that the condition contained a provision that her support was to be furnished "upon the aforesaid premises, but not elsewhere," contrary to the agreement of the parties and without her knowledge, and that she relied upon those representations and without which she would not have conveyed the premises to George K. She seeks to have her deed to George K. canceled because of the fraud contained in the condition, or to have a decree of foreclosure, if the court is of the opinion that the fraud is not sufficiently made out to justify cancellation. She claims that the deed from her to George K. should be canceled for two reasons: First, because the condition in the mortgage contains a clause that her support shall be upon the premises covered by the mortgage, "and not elsewhere," contrary to the understanding of the parties. It is enough to say of this claim that the master has found that it was not in the contemplation of either party that the support should be furnished other than on the premises conveyed. [6] The second reason claimed by the plaintiff why the deed should be canceled was that George K. misrepresented and led her to believe that the condition of the mortgage contained a clause for the support of her granddaughter, Marion, a motherless girl for whom the plaintiff had great affection, when, in fact, no such clause was contained in the condition. Upon this claim the master found as follows: "At the time the writings were made, the plaintiff inquired of the defendant George K. if provision was made for Marion, and he replied in the affirmative." provision had been made for Marion could have reference to only a provision in the mortgage then made; for it does not appear in the case anywhere that other writings were made between the parties on that occasion; and it would be beyond a reasonable inference to infer, when the parties were making a contract for the joint support of the plaintiff and Marion, as the master had found it was to be, that the contract for such joint support would be expressed in separate agreements. We think the findings of the master clearly show that George K. fraudulently represented to the plaintiff that the support of Marion was provided for in the condition of the mortgage; that the plaintiff relied upon it as a part consideration of the deed to George K. The defendant contends that the contract was read to the plaintiff just as it was written and in a deliberate manner by the party who wrote it, and that the plaintiff had the same opportunity to understand it as the defendant had, and was mentally capable of understanding it, and did understand it. But the master has found, as already stated, that the plaintiff did not understand it, but understood that Marion was to be supported. He also finds that at the time the papers were executed, the plaintiff was not as well and strong as claimed by the defendant. Experience in human affairs teaches us that in transactions of this kind the aged parents rely very little, if at all, upon their own judgment as to the legal effect of such contracts, and depend exclusively upon the judgment of the child to whom they are yielding the fruits of a life's endeavor and labors and the care of the remnant of their life, to see that such a contract shall be made as shall fully protect their interest. In such contracts an element of confidence is reposed by the aged people in their grantee to an extent not found in other contracts. Bruer v. Bruer, 109 Minn. 260, 123 N. W. 813, 28 L. R. A. (N. S.) 608. We think the fraud in this case was of such a character as to give the plaintiff the equitable right to have her deed to George The defendant argues that this finding is K. canceled as prayed for in her bill. Chapnot equivalent to a finding that the plain- man v. Long, 66 Vt. 656, 30 Atl. 3; Johntiff asked George K. if provision had been son v. Chamblee (Ala.) 81 South. 27. For made in the mortgage for Marion's support. | fraud the party injured may resort to equity While the finding is not in that exact lan- for relief by way of cancellation. 4 R. C. guage, when considered in connection with other findings, it becomes clear that that was the meaning intended to be given to it by the master. He finds that it was the understanding of all the parties that Marion should have a home and be supported on the home place, and that the plaintiff believed and understood, and had a right to believe and understand by what was said upon the occasion of the execution of the papers, that Marion was to have a home with her and be L. 494, par. 8; Johnson v. Chamblee, supra. Nothing further need be said upon the right of cancellation for fraud, for the defendants find no fault with the claim made by the plaintiff upon the effect of the mistake of one party induced by the fraud of the other party; but they stand upon the claim that fraud has not been established by the plaintiff. It was error for the chancellor to dismiss the bill, and the decree is reversed and cause (107 A.) -- the plaintiff to George K. Bennett, and the | 6. EVIDENCE 143 IMMATERIALITY mortgage from the defendants to the plain- WEIGHT FOR DETERMINATION OF JURY. tiff, be canceled and declared void and of no effect, and that the parties execute and deliver to each other such releases as shall discharge them from all liability, the one to the other, under and by virtue of said deed and mortgage, at such time and in such manner as the chancellor may decree; that an equitable accounting between the parties be ordered, and, when made, a final decree to be entered in accordance with the views above expressed. To sustain an objection to the admission of evidence on the ground of immateriality alone, it ought to so appear beyond a reasonable doubt; for, where evidence is not clearly irrelevant, it should be allowed to go to the jury, leaving them to determine its weight. 7. APPEAL AND ERROR 1050(2)-HARMLESS ERROR ADMISSION OF IMMATERIAL EVIDENCE. (93 Vt. 290) SLAYTON v. DROWN. (No. 144.) (Supreme Court of Vermont. May 8, 1919.) Washington. In an action to recover a preference paid by a bankrupt, the trustee's testimony that he paid out the proceeds of the sale of the bankrupt property, objected to as immaterial, if erroneously admitted, was harmless. 8. BANKRUPTCY 303(2)-ACTION TO RE- In a trustee's action to recover a preference, bankrupt's testimony that he had paid 1. BANKRUPTCY 303(2)-PREFERENCE-EV- certain notes to defendant, but that there was IDENCE OF VALUE OF PROPERTY-ADMISSI BILITY. Testimony objected to as having no tendency to show that defendant had reasonable cause to believe that the payment by the creditor would effect a preference held admissible as bearing upon the value of the bankrupt's stock of goods at the date of the alleged preference, where so limited by instructions and where there was testimony making such value a link in the chain of evidence to establish a preference. one that was not paid, and that he told defendant at one time why he could not then pay the note, was a link in the evidence tending to show defendant's knowledge of the bankrupt's insolvency at the time of the alleged prefer ence. 9. EVIDENCE 474(19)-OPINION OF BANKBUPT-VALUE OF BANKRUPT STOCK-GUESS. In a trustee's action to recover a preference, where the bankrupt testified that he could tell the value of his stock of goods at date of 2. BANKRUPTCY 303(2)-IDENTITY OF AP- the alleged preference only by "guess," the obPRAISERS TESTIMONY OF TRUSTEE-ADMIS-jection to his testimony as guesswork must be 3. BANKRUPTCY 303(2)-ACTION TO RECOVER PREFERENCE LAWFUL POSSESSION OF TRUSTEE-EVIDENCE-ADMISSIBILITY. In a trustee's action to recover a preference, plaintiff's testimony that he took lawful possession of a bankrupt stock of goods, and that his first possession was by virtue of two writs of attachment, was not prejudicial to the defendant. 4. BANKRUPTCY 303(2)-TRUSTEE'S TESTIMONY AS TO POSSESSION AND SALE OF STOCK IN BULK-ADMISSIBILITY. In an action to recover a preference, testimony of the trustee in bankruptcy that he took possession of the bankrupt stock and held it until its sale, and that it was sold at private sale and in bulk, was admissible. 5. EVIDENCE MISSIBILITY. 113(16)-VALUE-PRICE-AD The price at which property is sold is ordinarily admissible as evidence of value, though not conclusive; its weight being dependent upon the circumstances surrounding the sale. Where the only exception taken to a ruling was, "We save the question, if the court please," no question is raised for the appellate court. 12. BANKRUPTCY 303(2)-ACTION TO RECOVER PREFERENCE-DEFENDANT'S KNOWLEDGE OF BANKRUPT'S CONDITION-EVIDENCE of CONVERSATIONS CALLING HIS ATTENTION THERETO. Evidence of a conversation between the defendant in bankruptcy trustee's action to recover a preference and another acting for him, who in such conversation indicated that the bankrupt did not have the amount of money in goods defendant supposed and was then insolvent, was admissible as tending to show that defendant had his attention called to bankrupt's financial condition. For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes |