Braman v. Bingham

Braman v. Bingham. The discharge of a mortgage of record, and the possession of the instrument, with the accompanying bond, canceled, by one not the mortgagor but the owner of land charged with its payment, is jprima facie evidence of the payment by such holder. A deed delivered to the grantee is not held as an escrow; such delivery either takes effect as absolute, or it is void and works nothing. Whether it makes any difference that the deed is handed to the grantee for the purpose of transmitting to a third person, to be held by him as ' an escrow, quaere, per Selden, J., questioning as to this the case of Gilbert v. The North American Fire Insurance Company (23 Wend., 43). A deed delivered to the grantee to be deposited by him with a third person until the return of the grantor from a journey, and on that event to be redelivered to the grantor, is not an escrow because in no event to be delivered to the grantee. Where such a transaction was had, in pursuance of an arrangement by which the original grantor, upon a contract for the exchange of lands, made a conveyance that his grantee might raise money by mortgage, and desired a reconveyance until he should be ready to accept the lands to be deeded to him in exchange, held, that the delivery took effect as absolute. The grantor covenanted that the land was subject to no incumbrance except mortgages to the amount of $12,400. In fact, there were mortgages to the amount of $12,800. The grantee, having paid one of them, exceeding $á00j is entitled to recover that sum, with interest, without paying off the remaining incumbrances, and is not confined to nominal damages. The complaint in this action stated the substance of a deed executed by the defendant to the plaintiff, bearing date July 25th, 1857, by which the defendant conveyed to the plaintiff eighteen lots in the city of Brooklyn, with a covenant on the part of the defendant, that the lots were free from any incumbrance, except three mortgages therein mentioned, amounting in the aggregate to $12,400; and it is alleged that at the time of the making and delivery of the deed the lots were incumbered by mortgages, amounting in the aggregate to $12,800, which remained unpaid; and that by reason thereof the plaintiff was obliged to pay and has paid the excess of $400, and judgment is demanded for that sum, with costs. The defendant in his answer denied that he conveyed the property in the complaint described, as therein alleged. Secondly. He denied that the plaintiff was obliged to pay and had paid the excess of $400, mentioned in the complaint, for the cause therein alleged. Thirdly. He denied that any deed of the property described in the complaint, was ever delivered by him to, or accepted by, the plaintiff, with the view or intent on the part of either to convey the said property from the defendant to the plaintiff ; and he set out an agreement between him and the plaintiff, dated May 27, 1857, by which he promised to convey to the plaintiff, forty-three building lots in Brooklyn, subject only to mortgages in the aggregate to the amount of $8,000; also to convey to the plaintiff two other lots. The plaintiff promised to convey to the defendant eighteen lots, subject to a mortgage held by the Hew York Life and Trust Company, for $8,000; and two other lots subject to two mortgages, amounting to $4,400; but the plaintiff was not to convey any of the lots on his part, until it should be ascertained that the title to the lots to be conveyed by the defendant was valid. [The agreement contained other provisions, but they have no bearing upon the present case.] The defendant then stated that one E. H. Nichols, desired that the $8,000 mortgage held by the Trust Company should be canceled, as it covered lots belonging to him which were not included in the contract; and for that purpose the plaintiff, at his own suggestion, conveyed to the defendant by deed dated July 9,1857, delivered to the defendant on or about the 25th of that month, the property which by said contract he had agreed to convey, and the defendant mortgaged the same to another party with the consent of the plaintiff for the sum of $8,400 (the sum of $400 being the premium which the defendant agreed to pay to the mortgagee for his aid and services in raising the money and for searches), and with the proceeds of that mortgage the Trust Company mortgage was paid. The defendant further alleged that when the deed of 9th July to him was made, he desired the plaintiff to accept the deed from him of the lands which by the contract he was to convey, but the plaintiff declined on the ground that he wished to complete some arrangements with another person before he took the title, and promised that he would himself obtain the making of the deed and present it to the defendant for execution, when he desired the title; to which the defendant assented. The defendant further alleged that when the deed of 9th July was delivered to him, the plaintiff stated that he was about making a journey and might be exposed to death from accident or otherwise, and as he had no deed of the lots which the defendant was by the contract to convey to him, and nothing to show for the lots conveyed by him to the defendant, he desired that the defendant should reconvey to him the last mentioned lots subject to said mortgage of $8,400, to be held as an escrow until he should return and it should be his pleasure to accept from the defendant the deed of the lots which by the written contract were to be conveyed to him; and to induce the defendant to execute it, the plaintiff, himself, drew the deed .and presented it to the defendant for signature, being the deed dated 25th July, on which the action is founded; that the deed of 9th July, and that of 25th July, were both written by the plaintiff, and both exchanged by delivery at the same time: that the mortgage to raise money to pay the Trust Company mortgage, was also executed at the same time, before the delivery of the deed to the plaintiff, which was subject thereto, the whole being one transaction for the pur& pose aforesaid; that the deed in the complaint mentioned was ¡delivered to the plaintiff only as an escrow, and was not delivered absolutely, or intended by either party so to be, for the purpose of passing the title to the lands therein described, or otherwise giving any effect thereto, and the plaintiff accepted said deed as such and for no other purpose. The defendant further alleged that since the return of the plaintiff from his journey, he had tendered to him a full covenant warranty deed of the lands described in the contract, which the plaintiff refused to accept, and the defendant then requested him to fulfill the terms of his contract (offering to fulfill the provisions thereof on his part), .which the plaintiff refused to do, and also refused to surrender the deed delivered as an escrow, but fraudulently caused the same to be recorded as a conveyance of réal estate, and commenced this. action on the covenants therein; wherefore the defendant insists that said deed is not his deed; that it has never been delivered as a conveyance, and that the plaintiff holds the same in fraud of the defendant’s rights. * Fourthly. For a further defence the defendant alleged, in addition to the facts stated in the third defence, which are referred to as making part of the fourth, that by the agreement respecting the object and purpose of the deed mentioned in the complaint, it was intended to be and should have been drawn subject to the mortgage of $8,400, and other liens amounting to $4,400; "but the plaintiff in drawing the deed, copied the amount of incumbrances from the deed of July 9th, and “ by such error, carelessness or wrongful intent of the plaintiff, the incumbrances in the deed were stated at $400 less than both the plaintiff .and defendant well knew at the time of drawing the deed, would in fact exist on said lots after the Trust Company’s mortgage should be paid; that defendant had no knowledge of such error, or of the fact that the total amount of incumbrances were stated in said deed at $12,-400, but believed the same was stated at $12,800, but charges that the plaintiff well knew of the error, and that the defendant was ignorant of it at the time of. the delivery of the deed, to the plaintiff as aforesaid; and he prays to have the deed reformed and the error corrected.” The cause was tried at the Kings' County Circuit in April, 1860, before Mr.. Justice Lott and a jury. The plaintiff introduced and read in evidence, the deed described in the complaint, and two mortgages for $2,200 each dated April 25, 1854, and four other mortgages executed by the defendant, one dated July 12th and the others July 25th, 1857, amounting in the aggregate to $8,400, each of which embraced some-portion of the premises described in the deed. The mortgage dated July 12th, 1857, was to Abijah Oakley for $3,000, and appeared to have been satisfied and discharged January 12th, 1859. It was produced by the plaintiff with the accompanying bond canceled. The plaintiff also gave in evidence the deed from himself to the defendant, dated July 9th, mentioned in the defendant’s answer. The defendant’s counsel objected to the introduction of the • mortgages, making in the aggregate $12,800, on the ground that they were not the Ijens covenanted against by the defendant in his deed. The'objection-was overruled and the defendant’s counsel excepted. . It was also objected that it was not proved that the plaintiff had paid the $3,000 mortgage. The court decided that there was prima facie proof that he paid it, to which decision there was an exception. The plaintiff having rested, the defendant proved the execution of the agreement of 27th of May set out in his answer, and offered it in evidence, which was objected to by the plaintiff’s counsel, and the objection was sustained. The defendant testified that the deeds of July 9th and 25th, were both in the plaintiff’s handwriting. That the deed of 9th July was delivered on the 25th. The question addressed to the defendant, “ Was the deed from Bingham to Braman, delivered to take effect ?” was objected to by the plaintiff’s counsel; the objection was sustained and the defendant’s counsel excepted. The question “ was the deed ever delivered,” was also objected to and the objection sustained by the court with the statement that evidence of facts showing what was done at the time the deed was taken by the plaintiff, would be admitted. The defendant’s counsel then offered to prove by the defendant that on or about the 25th of July, 1857, the plaintiff came to him, and stated that he had nothing to show for the land conveyed to the defendant, and as he was about to take a journey to Ohio, and might be killed on the cars and not return, he wanted a deed made back to him of the lots conveyed on the 9th July, to operate as an escrow until his return, and then to be given up to the defendant; that he promised to leave it with one of the clerks at the city hall; and that the defendant executed the deed on that express condition and no other; that it was handed to the plaintiff to be delivered and safely kept by one of the clerks of the register’s office, naming him; that he subsequently informed the defendant that he had done so; that the defendant never assented to the absolute delivery of the deed, but the same was put on record by the plaintiff, without the defendant’s knowledge or consent. The testimony was rejected, and the defendant’s counsel excepted. ■ The defendant’s counsel then offered to show what occurred and was said by the parties at the time when the deed was drawn by the plaintiff, for the purpose of showing that the deed was delivered as an escrow. The court refused to receive the evidence, and the defendant’s counsel excepted. The defendant’s counsel also offered to prove that the excess of $400, for which this action was brought, occurred as follows : A deed was made from the plaintiff to the defendant of these lands, dated July 9, 1859, and a deed back- from the defendant to the plaintiff of the same lands, dated July 25, 1857; that the several mortgages that had been proved making up the $12,800, were made and delivered between the dates of these transfers, to raise the money to pay off the $8,000 mortgage; that both deeds were delivered at the same time, although bearing different dates, and that this was done for the purpose that whoever should ultimately own the lots,should pay the mortgages; and that the contract between the plaintiff “ and the defendant in reference to the exchange of lands, had never been carried into effect.” The evidence was excluded, and the defendant’s counsel excepted. The defendant’s counsel asked the court to charge the jury that there was no evidence that the plaintiff had paid anything; and that he was only entitled to recover nominal damages, because it also appeared by the complaint that the plaintiff had not paid the incumbrances alleged in the complaint to be subsisting on the property. The court declined so to charge, but did charge that the possession by the plain tiff of the bond and mortgage, with satisfaction indorsed, was evidence that he had paid them. To which refusal and charge the defendant’s counsel excepted. The jury, under the direction of the court, found a verdict for the plaintiff for $476.80. Judgment was entered in accordance with the verdict, which was affirmed at the general term of the Supreme Court, and the defendant brought this appeal. The cause was submitted on printed briefs, by Capron & Lake, for the appellant. G. T. Jenks, for the respondent. [MAJORITY — Selden, J.] Selden, J. The mortgages which were given in evidence by the plaintiff were admitted to embrace, each, some portion of the premises conveyed by the deed from the defendant to the plaintiff, the covenants of which, if valid, bound the defendant to remove all incumbrances upon those premises, beyond $12,400. Any" mortgages, therefore, which were liens upon the premises, were within the terms of the defendant’s cove nant, and properly admissible in evidence against him. The possession of the $3,000 mortgage, by the plaintiff, with its accompanying bond, canceled, together with the discharge of the mortgage upon the records, some months after the land covered by it was conveyed to the plaintiff certainly amounted to prima facie evidence that the plaintiff had paid the mortgage. ■He was not the mortgagor, but the terms of the deed to him charged all the incumbrances which appear in the case, with the exception of $400 in amount, primarily upon his lands. " The discharge of record is evidence that the bond and mortgage were paid; and their possession by him, canceled, together with the interest which he had in their payment, are circumstances quite sufficient to raise a presumption that he was the person- who made the payment. (Hilliard on Mortg., ch. 16, § 46; 1 Greenl. Ev., § 38; Garlock v. Goertner, 7 Wend., 198.) The questions in regard to the delivery of the deed were properly overruled. The question, “ was the deed delivered to take effect ?” addressed to the party who signed the deed, I am inclined to think was objectionable, without reference to the circumstances under which the inquiry was made, as calling for a legal conclusion, or for the intention of the party, aside from what was said and done. The other question, “ Was the deed ever delivered ? ” would undoubtedly be proper where a delivery, in fact, was the matter in dispute. But here the defendant’s answer admitted the delivery in fact, and the question in controversy was as to the intention of the parties, or the legal effect of such delivery. The only competent evidence bearing upon that question was what was said and done at the time. This the court decided to admit. The questions addressed to the witness, under the circumstances, called for his opinion as to the legal effect of the conceded actual delivery. That was a question to be decided by 'the court, after all the facts attending the delivery should be proved. The disposition of the exceptions taken to the rejection of the written agreement, and of the oral testimony offered to sustain the third and fourth divisions of the answer, depends upon the single question whether either of those divisions presents any material issue. The evidence offered would go far to sustain them, and if the issues were material, the evidence should have been received. The court, however, is not required to hear evidence to support immaterial issues. (Corning v. Corning, 2 Seld., 97.) A fatal objection to the third division- of the answer, as a defence, is, that it shows that the deed was delivered to the grantee, to be held by him in escrow. It is well settled that such a delivery vests the title in the grantee, although it may be contrary to the intention of the parties. (Lawton v. Sager, 11 Barb., 349; Worrall v. Munn, 1 Seld., 229; Gilbert v. N. A. Fire Ins. Co., 23 Wend., 45.) The offer of evidence in support of this division of the answer embraced the additional fact, not alluded to in the answer, that the deed was handed to the plaintiff to be delivered to and safely kept by one of the clerks iñ the register’s office. Whether these facts, not pleaded, if material, were admissible in evidence may admit of some doubt, but I do not deem it necessary to decide that question. If the' answer, in addition to what it contains, had embraced those facts, it would not, in my opinion, have presented a defence. It has been held in one case, that a deed may be delivered to the grantee for the purpose of transmission to a third person, to be held by him in escrow until the happening of some event • when it should take effect as a conveyance, and that such delivery would not be absolute. (Gilbert v. N. A. Fire Ins. Co., 23 Wend., 43.) In that case, the grantee had deposited the deed with the third person in pursuance of the arrangement, the condition had not been performed, and the grantee made no claim under the deed. The case presented merely the ' question, whether the grantor still retained an insurable interest in the premises described in the deed, the nominal grantee tes- • tifying to the terms in which the deed was delivered to him. Limited to its peculiar circumstances, no fault can be found with the decision; but if the grantee had retained the deed, claiming that its delivery to him was- absolute, and in a contest between him and the grantor, parol proof of a conditional - delivery had been offered, I think the result would have been different. If I am wrong in this conclusion, the case discloses an avenue for the overthrow of titles, by parol proof, which • was supposed to be closed by the rule to which it would seem to form an exception. The reason given for the rule excluding parol evidence of a conditional delivery to the grantee applies to all cases where the delivery is designed to give effect to the deed, in any event, without the further act of the grantor. “ When the words are contrary to the act, which is the delivery, the words are of none effect.” (Co. Litt, 36 a.) “ Because then a bare averment, without any writing, would make void every deed.” (Cro. Eliz., 884.) “ If I seal my deed and deliver it to the party himself, to whom it is made, as an escrow upon certain conditions, &c., in this case let the form of the words be what it will, the delivery is absolute, and the deed shall take effect as his deed presently.” (Shep. Touch., 59; Whyddon's case, Cro. Eliz., 520; Cruise’s Dig. Title, 33, Deeds, ch. 2, § 80.) If a delivery to the grantee can be made subject to one parol condition, I see no ground of principle which can exclude any parol condition. The deed having been delivered to the grantee, I think the parol evidence that the delivery was conditional was properly excluded. But there is also another ground on which the evidence was properly excluded. “ It is essential to an escrow that it be delivered to a third person, to be by him delivered to the obligee or grantee, upon the happening of some event, or the performance of some condition, from which time it becomes absolute.” (James v. Vanderheyden, 1 Paige, 238.) By the agreement, as offered to be proved, the deed of Bingham to Braman was to be held as an escrow until Braman’s return, “ and then to be given up to Bingham.” A deed thus delivered is not an escrow, although the parties may call it such, because there is no event in which it is to be delivered to the grantee. A deed so delivered, if not so intended, when deposited, to operate as a deed in presentí, could never have any validity, without a new agreement of the parties. (James v. Vanderheyden, supra) If' there were nothing in the case to aid in ascertaining the intention of the parties in making the delivery, beyond the parol proof which was offered, the deed would be held absolute on account of its delivery to the grantee, or it would be held void for want of any delivery: it could not be treated as an escrow. The effect to be given to the delivery, however, is not to be determined by the proof offered alone, but by that, together with the facts appearing in the answer, and the proof already given. From these, the conclusion is irresistible that the deed was intended to operate at once as a reconveyance of the lots to the plaintiff, the title to remain thus until his return, and the conveyance of the other lots' to him, when the deed was to be returned to the defendant. The parties appear to have supposed that the title could be vested1, by the deed, in the grantee, temporarily, to remain there as long as the deed was in the hands of the third person, and could then be re-vested in the grantor, by the return of the deed to him. As' this could not, in accordance with the rules of law, be done, the deed was either void or it took effect as an absolute deed, and vested the title in the grantee. The answer shows that the deed was intended to operate as a conveyance. It was executed in pursuance of the plaintiffs’ request “ that the defendant should reconvéy to the plaintiff the lots described in said-deed, subject to said mortgage of $8,400, to be held as an escrow, until he should return,” &c. The deed from the plaintiff to the defendant, and that from the defendant' to the plaintiff, though bearing different dates, were delivered at the same time, and were obviously both designed to take immediate effect,.the first to vest the title in the defendant, to make his mortgages good, which were also delivered at the same time and the other to revest the title in the plaintiff, subject to the mortgages. Nothing short of a reconveyance would be of any service to the plaintiff, and if the deed did not take effect as a reconveyance, the execution of it by the defendant was an idle ceremony. I am satisfied that the deed must be ■ held to have taken effect as a conveyance, at the time of its delivery, and that the defendant was bound by its covenants. The facts pleaded in the third division of the answer, and offered in evidence under it, therefore, constituted no defence, and the proof of them was properly excluded. The fourth division of the answer sets up, as an equitable defence, that there was a mistake of $400, in the covenants as to the amount of incumbrances charged upon the property, and asks to have the deed reformed in that respect. The present practice authorizes the defendant to make such a case, and demand affirmative relief in his answer, and also to avail himself of the equitable circumstances as a defence. But neither the answer nor the facts offered to be proved to sustain it, nor both united, make such a case as would justify the Court in decreeing an alteration of the terms of the covenant. The answer shows that th'e $400 in controversy was the sum paid as a premium for obtaining the loan of $8,000, and the expenses attending it. In the third division of the answer, ■which is referred to. in and made part of the fourth, the defendant says that he “ agreed to pay to the mortgagor ” that sum; and that statement accords with the covenant as it is in the deed. He nowhere alleges that the plaintiff assumed or pro-, mised to pay it, nor does that fact appear in the offer of testimony which was rejected. It is stated that both parties knew that the incumbrances charged - on the lands were $400 more than the sum mentioned in the covenant, but that fact is not at all inconsistent with the position that the defendant was expected to pay the excess. The most that can be claimed on the part of the defendant, in this respect, as the result of what is stated in the answer, and what was offered to be proved, is, that some doubt is thereby created .whether the $400 should not have been included in the exception to the defendant’s covenant. In such a case it is entirely clear that the defendant shows no equitable defence. Courts of equity will decree the reformation of “ a deed or tiontract, only, where there is a plain mistake, clearly made out by satisfactory proofs ” (1 Story’s Eq., § 157), and not then where, as in this case, the mistake, if one was made, resulted from the negligence of the party asking the relief. (Id., § 146, and note 3.) This was not a question for the jury, but for the court, and neither the evidence offered, nor the answer to sustain which it was offered, constituting a defence, the evidence was properly rejected. The exception to the charge presents the question, whether the plaintiff was entitled to recover anything beyond nominal damages. The terms of the covenant were that the premises were free from incumbrances, except three mortgages, amounting in the aggregate to $12,400. The plaintiff proved that the incumbrances amounted to $12,800, and that he had paid-$3,000. The existence of $400 of incumbrances, in excess of the amount named in the covenant, constituted a breach of the covenant, and entitled the plaintiff to nominal damages, without having made any payment. Such covenant is broken as soon as made, if ever. When the plaintiff paid the excess of $400, he became entitled to recover that amount as damages for the breach. By the terms of the covenant it appears to have been contemplated that the lands were to remain, for a time at least, subject to the lien of $12,400, and it would' not be reasonable to require the grantee to pay that sum, as well as the excess, to entitle him to a substantial indemnity for the conceded breach of the defendant’s covenant. The judgment should be affirmed. Denio, Ch. J., expressed no opinion; all the other judges concurring, Judgment affirmed.