Crafts vs. Aspinwall

Crafts vs. Aspinwall. Where lands are mortgaged and a part thereof subsequently sold by the mortgagor, it seems that the part remaining unsold is the primary fund for the payment of the mortgage debt, and if different parcels are sold they should be charged with the debt in the inverse order of alienation. So where lands are contracted to be sold, and the purchaser contracts to sell a part of such lands, the part remaining is the primary fund for the payment of the original purchase money; and if the original purchaser transfers different interests, they are chargeable in the inverse order of alienation. A., contracted to purchase lands of B. and then contracted to sell a part of the same lands to C. Afterwards A. assigned his original contract to D., by way of mortgage to secure a debt, D. having notice of the contract between A. and C. For the purpose of extinguishing the interest of A., B. exacted a forfeiture of the original contract on account of the non-payment of the purchase money, subject, however, to the rights of C. and D , and D. subsequently took a conveyance from B. of the whole of the land. Held, that the portion of the land not contracted by A. to C. was the primary fund for the payment of the original purchase money, and such portion being of sufficient value for that purpose, further held, that D. was bound to convey to C. his portion of the land, on being paid by C. such a sum only as remained unpaid on the contract between A. and C. Philip T. Roe contracted with Isaac Roe to purchase from him a vacant lot of land in the village of Elmira, known as “block 66,” by written agreement, dated April 17, 1841, for $800, payable, liálf on or before June 1st, 1844, and the other half on or before June 1st, 1845, with annual interest. On the 25th of January, 1843, Philip T. Roe agreed in writing with Crafts, the complainant, to sell him a part of the “ block ” for $160, payable $80 in carpenter and joiner’s work when called for; $40 with interest on the whole, May 1st, 1844, and the other $40, with interest, May 1st, 1845. November 23, 1844, Philip T. Roe assigned, among other things, his contract with Isaac Roe to the defendant Aspinwall, to secure a debt he owed him, with full notice to and recognition by the defendant, of said contract with the complainant. On the 1st of August, 1845, Philip T. Roe assigned his remaining interest in the contract to Sylvester M. Roe; and on the 1st of June, 1846, Isaac Roe forfeited said contract for non-payment of the purchase money, according to a previous understanding with the complainant and defendant, that their right to the property shoulo. be respected. The object of the forfeiture being to extinguish the equity of redemption of Sylvester M. Roe, the assignee of Philip; the complainant, prior to the assignment to the defendant, went into possession of that part of the lot purchased by him, and had paid to Philip T. Roe all the purchase money in cash and labor, except about thirty-five dollars. He had also erected a dwelling house and continued his improvements subsequent to the assignment to the defendant, tvith his knowledge and acquiescence. Philip T. Roe also had made valuable improvements upon that part of lot 66 retained by him after the sale to the complainant. The defendant, at the time of the assignment to him, was informed that the balance due from Crafts -to Philip T. Roe, upon the contract, was small, and that the contract must be complied with. Subsequent to the forfeiture above mentioned, Isaac Roe offered to convey the lot sold by Philip T. Roe to the complainant, to the latter, upon receiving payment or security for such proportion of the purchase money as said lot bore to the whole quantity of land agreed to be conveyed to Philip T. Roe, exclusive of the improvements made thereon, which proportion amounted to $409,84. This was rejected by the complainant, and also repudiated by Isaac Roe, subsequently under advice of his counsel. Isaac Roe then, on the 4th of June, 1846, conveyed the whole of block 66 to the defendant, and received his note, with security, for $1066,39, being something more than the amount due on the original contract from Philip T. Roe to him for said block. It further appeared that the part of block 66, retained by Philip after the sale to the complainant, with the improvements, was worth all that was due from Philip T. Roe to Isaac upen the original contract at the time of forfeiture. The defendant, about a month after receiving the deed above mentioned from Isaac Roe, offered to convey to the complainant the part of block 66 purchased by him, for $419,84, payable $100 in hand, and half the balance in twelve, the other half in eighteen months ; which offer was declined by the complainánt. The complainant subsequently tendered the defendant $100, and demanded a conveyance of his part of the lot, which was refused, and the defendant then brought ejectment to recover possession of that part of lot 66 in the complainant’s occupancy, and the complainant filed his bill to stay the suit at law and for general relief. The cause was heard on pleadings and proofs, by the supreme court in the sixth district, who decreed that the defendant be perpetually enjoined from prosecuting the ejectment, that he convey the lot sold by Philip T. Roe to the complainant-, to the latter, on receiving the balance due on. the contract executed by Philip T. Roe to the defendant, being with interest, $43,23, and that he pay the costs of the suit of law and of this suit. From this decree the defendant appealed to this court. B. D. Noxon, for appellant. S. G. Hathaway, for respondent. [MAJORITY — Gardiner, J.] Gardiner, J. delivered the opinion of the court. It is obvious from the proof in the case, that the forfeiture above mentioned was resorted to as a mode of extinguishing the interest of Philip T. Roe, and his assignee, Sylvester M. Roe, in the premises contracted to be sold by Isaac Roe to the former. It did not, nor was it intended to impair or affect the rights of the complainant or defendant to the lot in question, whatever they might be. The utmost that the defendant can claim therefore, is that by the conveyance of Isaac Roe, on the 4th of June, 1846, he acquired all the title of his vendor, subject to the equitable rights of the defendant to that portion oí lot 66, which he occupied under his contract with Philip T. Roe, executed the 25th oí January, 1843. As between the complainant and Isaac Roe, the clear equity of the former was, that the latter should enforce collection of the amount due him from Philip T. Roe, by the original contract, out of his equitable interest in the lot, before resorting to the part sold' to the complainant. There is no difference in principle between- the lien of a -vendor, under an agreement for the sale of land, part of which is subsequently sold by the vendee, and that of a mortgage, to secure the purchase money after a conveyance- by the mortgagor under similar circumstances. In either case, equity would require that the lien should he satisfied by sale of the different parcels in the inverse order of their alienation. On a bill filed by Isaac Roe, to obtain satisfaction of the money due upon the original contract with Philip T. Roe, making the complainant and defendant parties, the one as vendee and the other as mortgagee of Philip, according to their respective interests in different parcels of the entire lot 66, a court of equity would direct the complainant to pay the balance due from him to Philip T. Roe, upon tire contract between them, amounting- to some thirty or forty dollars. 2d. That the part of the lot retained by Philip, and subsequently mortgaged by him to the defendant be sold, and if the sums thus realized were insufficient to discharge the demand, that then the equitable interest of the complainant in the parcel in his possession, should be sold for the deficiency. Row the forfeiture upon the 1st of June, 1846, was a mere substitute for a strict foreclosure of the equity of redemption, of Philip T. Roe, and his assignee, and intended to vest the whole title of lot 66, in Isaac Roe, subject to the equitable rights of the parties to this suit, as between themselves, and each of them and Isaac Roe. It is then established by the evidence, that the value of that part of the lot retained by Philip, mortgaged to the defendant, was at least equal to the sum due upon the original contract to Isaac Roe. This was the. primary fund for the payment of that demand, after deducting the amount due from the complainant to P. Roe as we have seen. It follows, that if the title had been retained by Isaac Roe, after the forfeiture, he would have been compelled, upon payment of this sum, to have conveyed the title to the complainant of the premises occupied by him, or to have exhausted his remedy against the part of the lot mortgaged to the defendant, in the first instance, before he could resort to the land of the complainant. The defendant, therefore, by accepting a conveyance from Isaac Roe, after being a party to the arrangement above mentioned, if he claims now to have succeeded to his rights, is bound by the equitable obligations of his vendor, and must convey to the complainant on receiving the balance due from the latte] to Philip T. Roe. In the second place, the equitable interest of Philip T. Roe in the lot sold by him to the complainant, was a lien for the unpaid purchase money due from the latter; a lien which he could only enforce by procuring a conveyance to Crafts of the parcel of lot 66 embraced in their contract. Upon this interest the mortgage executed by P. T. Roe to the defendant attached, after notice actual and constructive of the rights of the complainant. If the defendant claims as the mortgagee of Philip T. Roe, and in that character has procured the legal title from Isaac Roe, he holds it as his mortgagor would have held it, in trust for the complainant, to be conveyed upon payment of the amount due upon the contract of P. T. Roe to the former. .More than that sum has been tendered by the complainant, and refused by the defendant. Instead of the thirty or forty dollars to which he was entitled, he demanded four or five hundred as a condition of a conveyance. This he had no right to exact. The decree of the supreme court is right, and must be affirmed. Decree affirmed. See the cases on this subject collected in Bright. Dig. 1250, 4747.