Clute v. Robinson

bounty lands to the persons serving in a military capacity during the revolutionary war. The parties, both by their professions and acts, showed, that it was their intention to have their doults respecting the title settled, before it was devolved on Raivlins. If those doubts remained unsettled, the sole object of the delay was defeated, and, within the intent of the contract, the defendant could not, by his conveyance, vest a good and sufficient title.

The money secured by the mortgage was not payable until 1807; but the interest was to bo paid annually.

I was, therefore, of opinion, that the appellant must perform the alternative, by paying the amount of the interest due on the mortgage, and that, to ascertain it, a yefpveqcg to a master was proper.' All further directions Were reserved, till the coming in of the master’s report.

When this cause was first commenced, it involved a question of great and general importance; and though the act of the legislature of the 5th April, 1803, by removing the doubts which existed, Relative to the titles, under patents issued in the names of deceased soldiers, has diminished that importance, yet the decision of the cause deeply concerns the particular interest of the appellant.

It yvill be contended, on the part of the respondent, that having taken the assignment of the bond and mortgage, without notice of the defeasance, he is not to be affected by that instrument. But it is ,a general principle, to which there is no exception, but in cases governed by the law merchant, that an assignee of a chose in action, takes it subject to all the equity which could exist, had it remained in the hands of the assignor.^[27] A party who creates an estate, may annex what condition to it he pleases. In the present case, the defeasance was a condition created at the time of the bond and mortgage. The respondent, therefore, when he took the bond and mortgage, received it, subject to the condition expressed in the

defeasance, and to all the equity existing, while in the hands of Rawlins. The condition of the bond of defea-sanee was, that if the appellant should execute a good and ¡sufficient deed or conveyance, for 300 acres of land, in lot No. 56, in Galen, on or before the 1st day oí May then next, the bond and mortgage was'to be given up to the appellant. When the appellant, therefore, on the 30th day of April, tendered the conveyance to the respondent, he saved the forfeiture, or, in other words, performed the condition of the bond of defeasance, and became entitled to have the bond and mortgage given up to him. It is said, however, that the appellant was to give a perfect title to the land, and not merely a good deed. JBut the condition speaks only of a good and sufficient conveyance; and there may be a good and sufficient deed to convey an estate, though by some possible doubts, or defects, the title may not be absolutely perfect. To show that the appellant undertook to convey a perfect title, the respondent has resorted to parol evidence, to explain or vary the terms of the written contract as expressed in the bond of defeasance,^[22] Parol evidence is never admissible', unless to explain a latent ambiguity, to repel fraud, to coiv rect an accidental mistake, or to rebut an equity or pre* ■ sumption. Here is no latent ambiguity, no.doubt arising from facts extrinsic to the instrument. There is no fraud or mistake alleged in the respondent’s bill,^[27] nor is any pretended. The general rule will be found laid down and recognised in the following authorities: 2 Vernon, 34. JBunhury, .65. 2 Atkyns, 683.' 1 Brown. C.' C. 93. 388. 4 Brown. C. C, 414. 477. 1 Vesey, jun. 241. 326, 402. 3 Vesey, jun, 34. 5 Vesey, jun. 688, The exceptions or qualifications of the general rule, may

be seen in 2 P. Wms. 202. I Brown. C, C. 75. 1 Vesey, jun. 565. 2 Vesey, jun. 100. 5 Vesey, jun. 647. ' 7 Vesey, jun. 575. 8 Vesey, jun. 22.^[27] Rut the principal ground on which the cause of the appellant rests, is his capacity to make a good and sufficient deed or title to Rawlins, pursuant to his agreement. By a resolution of Congress, of the 16th September, 1776,^[27] for the encouragement of soldiers, as should engage in the service and continue therein, until the close of the war, or until discharged by Congress, and to the representatives, of such officers and soldiers as should be slain by the enemy.” By the act of the'legislature of this state, passed the 20th July, 1782,^[26] and by the concurrent resolutions of both houses, on the 27th March, 1783, and the act of the 11th May, 1784,^[21] the resolution of Congress is recognised, and the legislature declare their intention to carry it into effect; so far as it respected this state, and set apart certain tracts of land for that purpose; a return is directed to be made of all persons, or their legal representatives, who are entitled to lands, by virtue of the resolutions and acts of ¡he legislature, and the surveyor general is directed to lay out the tract of country assigned into townships, and those townships into lots, and to determine, by ballot, to whom such lots were to belong; and the governor is.directcd to issue patents for the lots, to the persons to whom the lots shall respectively fall, on such .ballotting. The act of the 28th February, 1789,^[9] . refers to the previous acts and resolutions, and directs the surveyor general, to lay out the lands ; and patents are directed to be issued for the lots drawn by ballot, in the names of the officers and soldiers entitled to lands, or their legal representatives. On the 6th April, 1790,^[14] another act was passed, “ to carry into effect the concurrent resolutions and acts of the legislature, for granting certain lands, as bounty lands,” &c. And it is expressly directed, that the letters patent, to be issued pursuant to the concurrent resolutions and previous acts of the legislature, shall be issued in the ñames of the persons who have actual-3y served in the line of the army of the United States, and to their heirs and assigns for-ever; and it is declared, that the lands so to be patented shall be deemed, considered, and adjudged, to have vested in the respective grantees, and their heirs and assigns, respectively, on the 27th March, 1783. Until the report of the Onondaga commissioners, inserted in the journals of the assembly, the 1.7th February, 1800, no doubt existed of the validity of the patents, in the names of deceased soldiers, issued by the commissioners of the land office. The opinion contained in that report is dictated by a narrow and technical spirit; and if the resolutions • and various acts on the subject are attentively examined, it will be found inconsistent with the liberal intentions of the legislature. The Onondaga commissioners admit, that it was the intention of the legislature to make their bounty coextensive with the resolution of congress. Present service, or existence, was not the basis of the grant. The act of the 11th May, 1784, declares all the officers and soldiers belonging to Lamb’s regiment of artillery, in the year 1781, entitled to bounty lands. The war ended in 1782, and many must have died, or been killed, before the 27th March, 1783. All these classes of soldiers were comprehended in the legislative body, and it is clear, that by the words heirs and assigns, it was intended to designate the persons to be benefited by the grants; that is, the representatives of deceased soldiers, and not merely to express the quantity of interest granted, as contended by the Onondaga commissioners. The commissioners of the l&.vi5. office were invested with very extensive and discretionary cowers, in deciding on the persons entitled to the legifi’.a'.'i~e bounty. There are no restrictions or limita.-. tk^srífiL-i.-'wT in the commission. The grants were .in tended b.us. i :w'.;tmerationfor services in therevolutionary-'

war, and were to be construed liberally, and not by frigid and artificial rules. But even if the commissioners of the land office had extended these grants beyond the strict letter, yet • having acted by colour of authority at least, their acts ought to be supported. If this view of the subject be correct, then the patent to Heysham was operative and valid, and under it the appellant derived a good title, which enabled him to execute a good and sufficient conveyance for the 300 acres, pursuant to the bond of defeasance. But by the act of the legislature, passed the 27th March, 1803,^[27] “the title to all lands before granted by letters patent to officers and'soldiers serving in the line of this state, in the army of the United States, in the late war with Great Britain, and who died previous to the 27th oí March, 1783, are declared to have been Vested in the said persons at the time of their deaths respectively.” This may be considered as a declaratory law. When the appellant, therefore, filed his answer to the supplemental bill of the respondent, he had a perfect, and undoubted title to the land. If a party has a title at the time of the decree, or, at least, at the time of filing the bill, it is sufficient.^[26]

1. The mortgage m this case has been recorded, pursuant to the directions of the act; but there is no record of the defeasance. It is not incumbent on a person taking a mortgage by assignment, to inquire beyond the face of the deed assigned to him.‡ If there be any secret trust or condition between the original parties, the assignee is not bound by it without notice. This principle t is within the reason and equity of the act requiring mortgages to be registered. The registering is intended as a notice; and a subsequent bona fide purchaser, without notice of any other instrument, ought to be protected against its secret conditions. If it were otherwise, it would be in the power of the parties to defeat a mortgage, though recorded, by a separate'

deed of defeasance. But by the act concerning mortgages,^[14] (§ 3.) every deed conveying real estate, whichby any other instrument, or-writing, shall appear to have been intended as a security, though it be absolute in terms, shall be considered as a mortgage, and liable to be registered ;^[22] and the person for whose benefit such deeds are made shall not have the benefit of the act, unless the instrument operating as a defeasance be also recorded. The act intended that the concealment of such an instrument should avoid it, as against a bona fide purchaser, without notice. It is a fraud, and if any person is to suffer, it ought to be he who made the secret agreement. There is no reason why this rule, relative to absolute deeds with defeasances, should not be applied to a mortgage with a defeasance. Again ; this mortgage contains a power to sell, on the non-payment of the money. Suppose the mortgagee; or his assignee, had proceeded to sell the mortgaged premises, under this power, pursuant to the directions of the act, would not the purchaser have acquired a complete title, discharged from the defeasance ? Then, by analogy, a bona fide purchaser, or assignee of the mortgage, without notice of the defeasance, ought not to be bound by it. Why was not this condition inserted in the mortgage itself? By not doing so, the purchaser of the mortgage has been led into a mistake. In Goodtitle v. Morgan,^[27] it is said, by justice Bailer, to be an established rule in a court of equity, that a second mortgagee, who .has the title deeds, without notice of any prior encumbrance, shall be preferred ; because, if a mortgagee lend money upon mortgage, without taking the title deeds, he enables the mortgagor to commit a fraud. Whether this rule has been adopted by our own courts, or not, is of no consequence; it is the very principle on which our registering act is founded.^[26] Here

is a mortgage in the usual form, duly recorded ; and an instrument of defeasance, containing terms and conditions totally different. If such a secret agreement is to prevail against a bona fide ¡purchaser, the registering act may be completely evaded.

It is said, that the assignee must take the mortgage, subject to all the equity existing between the original parties. This, no doubt, is the general rule. But the equity intended by that rule is an equity, clearly arising on the face of the security, and growing out of it, and not an equity arising out of a separate and secret agreement. If an equity did exist, it may be rebutted. Why did not the party holding the defeasance put it on record at the time the tender was made? The keeping the defeasance in his pocket was a circumstance indicative offraud. Rawlins could not have the defeasance recorded, as it was not in his possession ; it was the duty of the appellant to put it on record, and he has, by his own fault and neglect, forfeited all claim to the protection of the court. There is a superior equity existing in the case of the respondent. Any equity existing in favour of the appellant grows out of the bond of defeasance, and on this he may have his remedy against the obligor.

It has been said, that a grantor may annex what condition he pleases to the estate granted; but there is a distinction between a condition and defeasance. A condition is contained in the same deed; a defeasance is created by a separate deed.^[27] In the first, the deed itself contains notice of the condition. The latter being dehors the grant, no notice exists.

2. But has the appellant performed the condition of the bond of defeasance? He tendered what he called a good and sufficient deed ; but he admitted, at the same time, that his title was no better than it was at the time the bond was executed, when' he acknowledged that he had not a complete title. In his answer to the supplemental

bill, the appellant states the reasons why the deed was not given, immediately on the conclusion of the bargain for the purchase of the farm at Johnstown, and admits the necessity of a legislative provision, to remove doubts concerning his title. He claimed, then, to be discharged from the condition of the bond of defeasance, on tendering a deed, when he admitted, at the same time, that his title was no better than at first. If it was a good and perfect title at first, there was no necessity for postpo* ning the conveyance. But what is meant by a good and sufficient conveyance? A conveyance, ex vi termini, means a title to be conveyed. A condition to make an assurance, means an effectual and operative assurance.^[26] A deed good in form only, is not a performance of such a condition. If the appellant means to claim the benefit of the defeasance, he must show a strict performance.^[27] The intention of the parties is manifest, that an estate to Raw-lins, his heirs and assigns, was to be conveyed. If a man covenant to convey a title, and that title be in another, the covenant is broken as soon as it is made.f The law requires a faithful and substantial performance of conditions, not one merely colourable.^[21] But it is contended, that the appellant had a good title. By common law, a grant to a man deceased; is void,^[22] If these patents, issued in the names ofdeceased soldiers, are valid, it must be by the provisions of some statute. The act of the 35th July, 1782, sets apart a certain tract of land for the troops of this state, serving in the army of the United States, that is, who were then living. The subsequent resolutions and acts of the legislature, designate the persons entitled to the legislative bounty, to be the officers and soldiers serving in the army of the United■ States to the end of the war, or who were discharged from service,

or were slain in battle. This latter description shows, that no lands were intended to be given to the representatives of soldiers deceased, who were not slain in battle. Though the various objects pf legislative bounty are particularized, there are no provisions for soldiers already deceased. A benefactor may limit the extent of his bounty in any manner he pleases. No persons can claim it who are not clearly designated in the grant. The commissioners of the land office may have been deceived by the returns made to them ; but if they did grant lands to persons really not entitled under the acts of the legislature, those grants were void. The act of the 6th April,, 1790, fixes the time when the estates granted were to vest, and designates those in whose names patents were to be issued. These were persons.then in existence, and who. were entitled to lands pursuant to the act of the 25th July, 1782, and the concurrent resolutions of the senate and assembly. A soldier who died of intemperance, or who had been killed in a duel, previous to that period, could not be entitled to land. It is clear, that the persons intended by the legislature, were persons living on the 27th March, 1783, and such as had died in battle. But it is said, that the act of 1803, is a declaratory act, and has confirmed all the grants in question. If the act was declaratory, it could not give effect to a conveyance made in 1800, which was then inoperative. But it contains provisions in derogation of vested rights ; and requires a. compensation to be made to persons who had settled on the lands under colour of title. It cannot, therefore, be considered as a declaratory act. ' But the appellant, in his answer, to the supplemental bill, admits that his title was incomplete. The Onondaga commissioners were of opinion, that the patents issued in the names of deceased soldiers, were not valid ; and the supreme court in the case of Jaclcson ex dem. Sherwood, v. Phelps,^[27] were of the same opinion. It appears, then, that there were serious

doubts entertained by lawyers, as to the validity of the appellant’s title. The tender of a conveyance of a title so doubtful can never be considered as a performance of a condition to convey a good title. A court of equity will not compel a party to accept a bad or doubtful title.!' That the title was made valid before the decree of the chancellor was pronounced, cannot vary the case. There was an alternative on the part of the appellant, either to pay the money, or convey a perfect title, and the respondent is entitled to the benefit of it. The appellant having failed to perform the condition he is bound to pay the money. The respondent does not come to ask aspeare pei/cu-mance, but merely money, which the appellant promised to pay, in case he did riot convey to Rawlins a good title, on the 1st May, 1800. There is no penalty or forfeiture claimed by the respondent; he demands only the payment of a sum of money justly due, and which the appellant stipulated to pay. There is no pretence, then, of a relief against a forfeiture ; but the appellant seeks relief against an obligation for the payment of money. Again ; as to the act of 1783, the respondent is an assignee, and since that act, no tender of any conveyance has been madeto him by the appellant. As to the admissibility of the parol evidence, it may be observed that it was competent to the respondent to repel the facts stated in the appellant’s answer by such evidence. If those facts were true, there was a mistake which may be shown by parol evidence. Again; the concealment of the defeasance was fraudulent, and in case of fraud, such evidence is admissible. This species of evidence may be received to explain what is doubtful or equivocal, though it cannot be allowed to contradict a written instrument.^[27]

The statute relative to- mortgages was intended to protect mortgagees as to their priority, and not titles derived under mortgagees. The section of

the act in regard to defeasance, relates solely to purchasers under a mortgagor, where there is a mortgage or defeasance not recorded. It does not apply to a case like the present. Cujus est dare ejus est disponen. He who has the power to grant, may annex what condition he pleases, and such condition always remains attached to the grant. It is the business of the purchaser of such estates to protect himself by covenants against the conditions. The maxims of caveat emptor may be applied to the respondent. A covenant to execute a good and sufficient deed does not mean that a perfect title is to be conveyed, but that the deed is to contain good and sufficient covenants. It has been held, that a condition to malee an assurance did not require that the deed should contain a warranty or covenant, but the rule now seems to be, that it should contain reasonable covenants.^[26] The parol evidence was clearly inadmissible, as there was no latent ambiguity. There is no ground for the suggestion of fraud. No fraud or mistake is charged in the bill; and that would be a sufficient reason for rejecting the parol evidence. It is evident that Rawlins "And the appellant mutually relied on each other, and made no examination into their respective titles. This shows that they meant to depend on the covenants to be contained in the deeds. Again; the words in the acts of the legislature, “serving in the army ofthe United States,” were merely descriptive of the corps, or line, in which the soldiers to be rewarded, were. They are not used to describe them as still living. The tacit acquiescence of the legislature as to these patents, and the sales under them, for so many years, until the Onondaga commissioners suggested their doubts, was alone sufficient to render them binding on the state. In the case of Jackson ex dem. Sherwood, v. Phelps, it is true, Mr. Justice Livingston intimates some doubts on the validity of these patents;

but the supreme court have cautiously avoided giving any opinion on the question.^[27]