Rawson et al. v. Lampman

Rawson et al. v. Lampman. Statute of Uses. Where land is conveyed to one, in trust for the use of another, Ms heirs and assigns, without limitation, and the grantee to use, at the same time, executes a mortgage for part of the purchase-money, the legal estate vests in the cestui que use, subject to the mortgage ; the deed and mortgage are to be construed as one instrument. Appeal from tbe general term of tbe Supreme Court, in tbe third district, where a judgment in favor of the plaintiff, in a foreclosure suit, bad been affirmed. This was a suit brought by A. M. and E. Gr. Rawson against Sidney S. Lampman, to foreclose a purchase-money mortgage, given by Benjamin Cooper to David Spaulding, on the 1st December 1838, upon a piece of land in Johnstown, Fulton county, to secure the payment of the sum of $450, in instalments, with interest. On the 1st December 1838, David Spaulding conveyed the premises in question to Benjamin Cooper, “to kave an<^ *the same, in trust for, and for the use, benefit and behoof of, Mary Cooper, the wife of La Fayette Cooper, her heirs and assigns.” At the same time, in pursuance of an agreement between the parties, Cooper executed to Spaulding, a mortgage upon the premises conveyed, to secure the sum of $450, part of the purchase-money, payable in instalments, the last of which became due on the 1st December 1839. Part of the debt was paid by Cooper and wife, but the sum of $181 still remained due, and the interest of Spaulding in the same, and the mortgage to secure it, had been assigned to the plaintiffs. On the 17th January 1842, Benjamin Cooper, La Fayette Cooper and Mary, his wife, executed a mortgage upon the same premises, with a power of sale, to Mary Lawson, to secure the sum of $395; this mortgage was assigned to the plaintiffs, and after a default, was foreclosed, by advertisement, and at the sale, on the 11th July 1848, Sidney S. Lampman, the defendant, became the purchaser, for the sum of $815. At the sale, notice was given to Lampman, and others in attendance, before the property was bid off, that a part of the original purchase-money .remained unpaid; that the plaintiffs held a lien and mortgage for the same; and that the premises were to be sold subject to such lien and mortgage. *The defendant, by his answer, insisted, that by the conveyance from Spaulding to Benjamin Cooper, in trust for Mary Cooper, the latter took the whole legal and equitable estate in the premises, subject only to the life-estate of her husband; that Benjamin Cooper took no estate whatever; and that by taking the bond of Benjamin Cooper, for a part of the purchase-money, Spaulding waived his lien upon the premises therefor. The case was tried before Harris, J., without a jury, who found the facts substantially as set forth in the complaint; *and that there was due to the plaintiffs the sum of $186.66, for the recovery of which they were entitled to the relief prayed. Upon his report, the usual judgment of foreclosure was entered, directing a sale of the mortgaged-premises, and payment out of the proceeds, of the plaintiffs’ claim, with costs. This judgment was affirmed at general term, whereupon, the defendant took this appeal. Outwater, for the appellant. Wells, for the respondents. [MAJORITY — *Ruggles, C. J. McCoun, J.] *Ruggles, C. J. By the 49th section of the revised statutes, “of uses and trusts” (1 R. S. 728), it is enacted, that “every disposition of lands, whether by deed or devise, hereafter made, shall be directly to the person in whom the right to the possession and profits shall be intended to be invested, and not to any other, to the use of, or in trust for such person; and if made to one or more persons, to the use of, or in trust for another, no estate or interest, legal or equitable, shall vest in the trustee.” And by the 47th section, “every person who, by virtue of any grant, assignment or devise, now is, or hereafter shall be entitled to the actual possession of lands, and the receipt of the rents and profits thereof, in law or in equity, shall be deeméd to have a legal estate therein, of the same quality and duration, and subject to the same conditions as his beneficial interest.” It was strenuously contended, that under these statutory provisions, Benjamin Cooper took no legal or equitable estate, by Spaulding’s deed to him, and, therefore, could give no mortgage. In other words, that the whole title passed by him, without passing through him, to the wife of La Fayette *Cooper, and, therefore, his mortgage was a nullity, because he had nothing to mortgage; this is specious, but, we think, not sound. The parties to the deed and mortgage intended to create a trust-estate in favor of Mrs. La Fayette Cooper, that is to say, to give her a beneficial interest in fee, but on condition that the money mentioned in the mortgage should be paid; the deed, bond and mortgage prove this incontrovertibly, without reference to parol evidence. A deed and purchase-money mortgage, given at the same time, are to be construed together as forming one instrument or contract. (Lynds v. Budd, 1 Paige 192.) The deed and mortgage were a single and indivisible bargain or contract of sale; and for the purpose of ascertaining the nature and extent of the beneficial interest intended to be granted to Mrs. La Fayette Cooper, they are to be considered as if they were written in one instrument, executed at the same instant, by both parties. For this purpose, the defendant is not permitted to lay the mortgage out of view, and to look at the deed alone; they explain each other. (Farmers’ Loan and Trust Company v. People, 1 Sandf. Ch. 141.) By the mortgage, a condition was annexed to the grant, and whatever passed by the grant, passed subject to the condition. She took .by virtue of the deed, with the condition annexed; and took the same estate which Benjamin Cooper would have taken, if no trust had been expressed in the deed; that is to say, an estate in fee, subject to the payment of the mortgage-money. Without the aid of the statute, Mrs. Cooper’s interest would have been a right to the actual possession of the lands, and to the rents and profits thereof, subject, however, to the condition of paying the mortgage-money; and the 47th section of the statute turned that right into a legal estate, “ subject to the same conditionthese are the words of the statute. The defendant’s argument is founded entirely on the language of the 49th section, which is, that if a deed be “ made to one or more persons, to the use of, or in trust for ^another, no estate or interest legal or equitable shall vest in the trusteebut this section must be read in connection with the 47th. Both together show that the legislature intended to turn what would otherwise have been a passive trust, into a legal estate in the cestui que trust; and to make that legal estate commensurate in quality and duration, and subject to the same conditions, as the beneficial interest which the grantor intended the cestui que trust should have. The deed and mortgage together show, that the grantor intended that Mrs. Cooper’s beneficial interest should be subject to the mortgage; so, therefore, must her legal estate be. To give Mrs. Cooper the whole legal estate, discharged of the condition annexed to the grant, would be a perversion of the manifest intention of the 47th section. It is not necessary to give it to her, for the purpose of complying with the substantial meaning of the 49th section, which is, that the grantee in such a deed shall derive no advantage from the conveyance, and have no dominion over the property; considering the deed and mortgage as parts of one and the same transaction, and executed at the same time, Benjamin Cooper, the trustee, may truly be said to have taken no interest, legal or equitable, under the conveyance in question. The judgment of the supreme court should be affirmed. McCoun, J. Assuming, that the mortgage given by Benjamin Cooper to Spaulding for purchase-money, was of no force or validity, because the legal title did not vest in him, as was supposed at the time, but vested in Mary Cooper, yet, under the circumstances, a lien, in equity, attached to the land in her hands, in favor of Spaulding, the grantor, for such unpaid purchase-money. This lien remained unimpaired, to the amount of $181, when the Coopers afterwards executed a second mortgage on the same premises, to Mary Rawson; and when the present plaintiffs became possessed of both the Spaulding lien, and the second mortgage, by assignments, it was certainly competent for them to treat and regard both as subsisting incumbrances against the Coopers, and against all others who might claim under them. They did so treat them, for when they sold the property under the statutory foreclosure, by virtue of the power of sale contained in the second mortgage, they sold it, subject to the prior lien of $181, balance remaining of the original purchase-money, and the appellant, Lamp-man, became the purchaser, with express notice, at the time of sale, of such lien and of the amount, and regulated his bid so as to keep the amount in his own hands out of what was then deemed the fair value of the property. There can be no doubt about his having acquired the title in that way, with the $181 remaining charged upon the property as an equitable lien, at least. The judgment below is therefore, correct. Judgment affirmed.