Still v. Buzzell

Deed absolute in form, when a Mortgage. Fraud. Pleading. Practice. Bill to Redeem. Oosts. Mortgagee in Possession. R. L. ss. 1955, 4155. 1. A deed absolute in form, but given to secure a debt and also to cover tbe grantor’s property for tbe purpose of preventing attachment, is a valid mortgage between tbe parties; and, on payment of tbe debt, tbe grantee will be ordered to reconvey, on tbe ground that be cannot take advantage of bis own fraud upon others to defraud tbe grantor. 2. Although a bill must be framed to tbe circumstances that exist when tbe action is brought, yet the decree will be affirmed when it is correct in form and amount, if tbe bill has been formally amended; thus, when tbe bill was brought to redeem, tbe debt bad not been paid; but it bad been, — and there was a balance due the orator, — prior to tbe bearing before tbe master, by applying on tbe debt the use of tbe premises occupied by tbe defendant in possession under bis mortgage; Held, (a) That tbe orator would have been entitled to a decree, if bis bill had been properly framed; (6) That tbe bill should have contained an offer to pay any balance found due tbe defendant on accounting; (c) That the cause should be remanded for amendment of the bill, and tbe decree ordering tbe defendant to redeed and pay tbe balance due tbe orator, should be affirmed. 3. Tbe orator-, after tbe condition of tbe mortgage bad been broken, rented tbe premises (a pasture), and tbe mortgagee notified tbe tenant that be must pay tbe rent to him; and tbe mortgagee also turned some of bis own stock in in that season, and afterwards used tbe pasture to some extent; Held, on a bill to redeem, that tbe defendant took possession, and was accountable for such rents and profits as be ought to have received. 4. When a debtor, owing both a secured and an unsecured debt, makes a general payment without any direction, and no application is made, it should be applied to tbe unsecured debt. 5. In a suit to redeem tbe defendant was not allowed costs on false issues raised by bis answer, and costs were allowed tbe orator.

Bill praying that the defendant be ordered to redeed certain lands. Heard on the pleadings, master’s report and exceptions thereto, December Term, 1886, Walkee, Chancellor. Decree for orators. Affirmed. The prayer of the bill was that defendant be decreed to convey the lands described in the bill to the oratrix and account for the rents. It was found by the master that the oratrix owned the premises in question, and on October 30, 1878, she and her husband, the orator, conveyed them to the defendant by warrantee deed. At this time an overdue mortgage was on the premises, 'amounting to. $250, due to one Miller, and the defendant agreed to and did take up this mortgage. The deed was not intended to be absolute, but was given and received to secure the Miller mortgage debt, and the defendant agreed to redeed to the oratrix when that debt was paid. The master also found that one object, in conveying the Miller lot, so-called, to the defendant, was “ to cover this property and prevent any other creditors troubling the orator and oratrix.” The orator owed the defendant a general account and also two sets of notes, called the Miller notes and the Frary notes; but it was found that the conveyance of the Miller lot .was to secure the defendant for taking up the mortgage on that lot and not the other debts. It was found, as to the $21 mentioned in the opinion, that it was paid by E. L. Still, the orator’s son, without any agreement as to where it should be applied, and that °no application had been made at the commencement of the suit. The bill alleged that the deed was given to defendant to secure him for taking up the Miller notes, and “ to prevent the creditors of your orator from interfering in the orator’s use of said landthat defendant agreed to redeed on payment of said Miller notes; and that they had been paid. The bill was served May 22, 1883. The decree provided that the defendant took possession of the Miller lot and should be treated as a mortgagee in possession, and should account to the orators for the reasonable rental value of said lot for four years, commencing from the spring of 1882, which is found at $25 per year by the master, leaving a balance due the orators of $24.06 ; that, if the defendant would excuse himself from accounting for such rents and profits, he must show that he used reasonable means to procure a tenant, or derive benefit from the premises ; that it does not appear that the defendant was in fault in not collecting the rent for the year 1881, and the value of the use by the tenant and defendant respectively is not found; that the $21. paid by E. L. Still on account of the orator, without any agreement or direction, be applied, upon the general account between the parties, and not upon the Miller debt; that the defendant reconvey to the oratrix the premises described in the bill, — which were conveyed to him by deed, October 30, 1878, as security for the payment of the Miller debt, — free and clear of all incumbrance ; that the right of the orators to relief is not defeated by the fact that the deed was executed in part to cover the property from attachment; and that defendant be denied his cost, and the orators recover their cost subsequent to the filing of the answer. The other facts are sufficiently stated in the opinion of the court. The $21 paid by E. L. Still, should be applied on the general accouut, as the rule is thatthe most precarious security should be 'extinguished first. Briggs v. Williams, 2 Yt. 283 ; Pierce v. Knight, 31 Yt. 701; Allen v. Lyman, 27 Yt. 20. Full payment is a condition precedent to redemption (2 Jones, Mort. s. 1070), and the burden is on the mortgagor to show it. In the absence of an agreement, there is no legal satisfaction of the mortgage by receipt of the rents. They must be first applied by the judgment of the court. 2 Jones, Mort. s. 1115. The mortgagee is not chargeable so long as the premises are not redeemed. 2 Jones, Mort. s. 1116 ; Beaver v. Durant, 26 Yt. 103. When a tenant is in possession under the mortgagor, the mortgagee must either cause an actual eviction of the tenant or become his landlord by a new contract, in order to extin-guisli the liabilities of the mortgagor. Stedman v. Gassett, 18 Yt. 346; Partington v. Woodcock, 5 Nev. & Man. 672 ; s. c. 6 Ad. & El. 690; Fvans v.Elliot. 9 Ad. &E1. 343. The relation of landlord and tenant cannot be created without the consent of both parties. And when the tenant quits and refuses to pay, there is no express or implied contract, and nothing short of an actual eviction will constitute possession in the mortgagee. Stedman v. Gassett, supra-, Babcock v. Kennedy, 1 Yt. 462; Brown v. Storey, 1 Man. & Gr. 117. After the premises were vacated by the tenant, the possession was in the mortgagor. 1 Waslib. Eeal Prop. 533. So long as the mortgagor is in possession, he is entitled to the rents and profits. Walker v. King, 44 Yt. 601; 'Mayo v. Fletcher, 14 Pick. 525 ; Hooper v. Wilson, 12 Yt. 695. A mortgagee will not be held for anything more than the actual rent and profits received. 2 Jones, Mort. 1123. The taking possession must be distinct and unequivocal. Collameb, J., in Hooper v. Wilson, supra-, White v. Maynard, 54 Yt. 575. The defendant is not liable for interest on. the rents. Breckenridge v. Brooks, 2 A. K. Marsh, 341; 1 Washb. Real Prop. 588. " The right of action must exist when the suit is brought. A decree must be based upon the case as then made. Barrett v. Sargeant, 18 Yt. 365; Blairdell v. Stevens, 16 Yt. 179; Qoioner Wilson, 33 Yt. 1. See 1 Pom. Eq. Jurisp. ss. 388, 1219. The bill should have contained an offer to pay any balance due. 2 Jones, Mort. 1093. It was a fraudulent conveyance, participated in by both parties, and was void as to cx-editors : R. L. ss. 1955, 4155 ; Prout v. Vaughn, .52 Yt. 451; McLane v. Johnson, 43 Yt. 48; Bump. Fraud. Conv. 195, 204; but it must stand as between the parties. A right of action cannot arise out of fraud. Holman v. Johnson, Cowp. 343. If a party conveys away his property with intent to defraud bis creditors tbe law will not aid him to recover it back. Savage, Ch. J., in Roberts v. Jackson, 1 Wend. 478. See Harvey v. Varney, 98 Mass. 118; 1 Pom. Eq. Jurisp. 397, 916, 940; 1 Jones, Mort. s. 627 ; Schmidt v. Ojjie, 33 N. J. Eq. 138; 7 Met. 520; Bump. Fr. Conv. 486; Rowland v. Martin, 4 Cent. Rep. 760. . Tk.e defendant should be allowed bis costs, according to tbe general rule in a suit to redeem. 2 Jones, Mort. s. 1111. The defendant was in possession and should account for the reasonable rents and profits. He was bound to use reasonable-diligence, either in procuring tenants, or in other ways realizing from the premises. White v. Maynard, 54 Yt. 575 ; Shaeffer v. Chambers, 6 N. J. Eq. 548 ; Sanders v. Wilson, 34 Yt. 318'. The defendant is not entitled to costs. He set up false claims and failed. Waterman v. Cochran, 12 Yt. 699 ; Stearns v. Wrisley, 30 Yt. 661. The orators prevailed in the sole issue, and should be allowed costs. Day v. Cummings, 19 Yt. 496 ; Weston v. Cushing, 45 Yt. 531. The court will not reverse a decree solely on a question of costs. Mott v. Harrington, 15 Yt. 185 ; Ricker v. Clark, 54 Yt. 289 ; Joslyn v'. Parlin, 54 Yt. 670 ; Hastings v. Perry, 20 Yt.272 ; Sanborn v. Kittredge, 20 Yt. 633.