Purdy v. Coar — 16 N.Y. St. Rep. 409

Majority

p. 409

Elijah F. Purdy, Resp’t, v. Mary Jane Coar, App’lt.

(Court of Appeals,

Filed June 5, 1888.)

Headnote

1. Mortgage—Grantor op property after conveyance cannot certify THAT A MORTGAGE THEREON IS A VALID INCUMBRANCE.

A grantor who has conveyed cannot thereafter estop the grantee by a certificate declaring a previously executed mortgage to be a valid incumbrance upon the grantee’s property. He may estop himself, hut has lost the power to affect, by his declarations, the title of his grantee.

3. Same—When grantee is not estopped from denying validity of MORTGAGE EXISTING ON PROPERTY.

The acceptance by the grantee of a deed containing this language, “subject, nevertheless, to all liens of mortgages and taxes thereon,” did not admit that there were any such liens. If they existed, the title was subject to them, but their existence and validity was not conceded. The grantee has the right to contest any mortgage then existing on the property and to show that it was not a valid lien against the property.

3. Same—Certificate given after mortgage—Effect of.

A certificate that a mortgage is a good and valid security and that there is no defense to it made and delivered to the mortgagee after the mort

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gage and while the mortgagor is owner of the mortgaged property, is not binding on the mortgagor, unless it could he used for the purpose of some time contradicting the writer if he should swear to a different state of fact.

Appeal from a judgment of the general term of the court of common pleas of the city of New York affirming a judgment in favor of plaintiff entered upon the decision of the court at a trial without a jury.

Jno. H. Corwin, for appl’t; S. W. Rosendale, for resp’t.

This is a casein which dates are of importance. On September 8, 1884, one John Coar was the owner of the premises now in controversy. On that day he made and executed to one Frederick C. Walker, a bond and mortgage, to secure seven thousand dollars and interest. Two days later, and on September tenth, Coar conveyed the property to Marshall, and the latter to Mrs. Coar, the present defendant. In the absence of any proof to the contrary, it must be presumed that these deeds were delivered at their date. 2 Gr. Ev. § 297; Van Rensselaer v. Vickery, 3 Lansing, 59; Elsey v. Metcalf, 1 Den. 323 ; Harris v. Norton, 16 Bar., 264. On September twelfth, the mortgage to Walker was recorded. On September fourteenth, as appears by its date, Coar signed a certificate that the Walker mortgage was a good and valid security, and that there was no defense to it. He had then ceased to be the owner of the property, and had no authority from his wife, who was owner, to make such representation. On September twenty-third, the deed to Mrs. Coar was put on record, and thereafter, and while the record title was in her, and on the fourteenth of October, the Walker mortgage was assigned to the present plaintiffs who bought it in reliance upon Goar’s certificate. That assignment was recorded October fifteenth. For default of payment, this action was commenced to foreclose the mortgage. Mrs. Coar defended, alleging that no consideration passed from Walker; that she signed the mortgage supposing that the consideration named had been paid; that the plaintiffs gave no consideration for the assignment; and that the mortgage was void for want of consideration. Upon the trial she sought to prove this defense in various ways, but all her efforts were baffled by the ruling of the court, that she was estopped by her husband’s certificate made when he had ceased to have any interest in the land, and when she alone had become the owner, She called her husband as a witness, and asked him to state “all the facts concerning the inception and continuance of the mortgage.” The question was objected to as incompetent and immaterial, and because the witness was estopped by his certificate from attacking the mortgage. But he made no such attack. He put in no answer, and was not defending the action.

Granting that he was estopped as a party, his evidence was admissible in behalf of his wife, unless she also was

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estopped by the certificate. She asked what consideration he received from Walker; and whether his wife knew of the sale of the mortgage to plaintiffs. All these inquiries were excluded. She attempted also to assail the consideration sworn to by plaintiffs as the basis of their purchase. She asked how the cabinet work of which he spoke was paid for; and whether Goar’s notes, which the plaintiffs surrendered, were at that time due. These questions were not allowed to be answered. By these rulings the whole defense pleaded was made unavailable, judgment went for the plaintiffs, which was affirmed by the general term upon the ground that the certificate of the husband estopped the wife. That learned court seemed guided by a conviction that the certificate was made before the conveyance to Mrs. Goar, and the result is arrived at by presuming that the certificate was delivered at its date, although all the facts rebut that presumption, but that the deed to Mrs. Goar was not delivered at its date, although all the facts favor that presumption. And this error is intensified by the suggestion that there is no proof when that deed was delivered. The defendant offered to show that, when her husband made the arrangement with plaintiffs for a sale of the mortgage, it was after the deed had been delivered to her by Marshall. This was excluded. Now the certificate had no force or validity until it operated as an estoppel, and that could not occur to Walker, for he took the mortgage two days before the certificate was made, and it could not occur as to plaintiffs until they purchased on the faith of it, and so the defendant did not prove that she got her deed before the certificate became operative simply because she was not allowed to; and, besides, if we depend on the record for the date of the delivery of her deed, that still ante-dates the certificate as an operative instrument, for the assignment to plaintiffs was some time after, and, until they bought, .the certificate was no better than blank paper, unless for the possible purpose of at some time contradicting the writer. So that the question returns, whether a grantor who has conveyed can thereafter estop the grantee by a certificate declaring a previously executed mortgage to be a valid incumbrance upon the grantee’s property. We think not. He may estop himself, but has lost the power to affect by his declarations the title of his grantee.

But beyond the argument of the general term we are met by suggestions of the learned counsel for the plaintiffs which do not depend upon the effect of the certificate, and which demand serious consideration. He contends that Mrs. Coar, the plaintiff, was merely the purchaser of an equity of redemption and took subject to the mortgage, and so cannot contest it. Bennett v, Bates, 94 N. Y., 354 . The pith of the doctrine is that the circumstances of the purchase amount to an admission of the validity and lien of the

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outstanding incumbrance. But there was no such admission by Mrs. Goar. She did not take subject to the Walker mortgage describing or identifying it as such, nor did Marshall as grantee of Goar. The latter’s deed contains this language, “subject, nevertheless, to all liens of mortgages and taxes thereon.” Acceptance of this deed did not admit that there were any such liens. If they existed the title was subject to them, but their existence and validity was not conceded. The defendant seeks to show that what is now claimed to have been a mortgage was not such and was not a lien on the land, and so was not one of the incumbrances subject to which she purchased. She did not buy subject to all apparent and pretended and invalid mortgages that could be set up, but subject to mortgages that were a lien, and so actual and real and valid.

It is said she knew all about this mortgage because she signed it. I think that is true, but what she knew about it she was not permitted to tell. She may have known that it was not a valid mortgage as against her when she took her deed, and declined to buy subject to it while quite willing to take title subject to mortgages that were in truth a lien on the property. That would account for the peculiar phraseology of the deed, and the careful omission to recognize or identify this particular instrument as a mortgage at all.

It may very well be that upon the undisclosed facts in this case the land in Mrs. Goar’s hands is equitably bound by the plaintiff’s mortgage, but we cannot prejudge the case or assume that the facts will be proved precisely as we suspect they existed. The defendant has a right to make her defense if she can, but so far has been denied a hearing.

The judgment should be reversed and a new trial granted, costs to abide the event.

All concur. _