Opinion
January, 1904.
Jared T. Newman and S. Edwin Banks, for the appellant.
Richard H. Thurston and Roswell R. Moss, for the respondent.
Two grounds of error are urged by the appellant on this appeal, which in my opinion require a reversal of this judgment.
The first is that the evidence does not satisfactorily show that the defendant Williams had notice that the mortgage which he purchased from Van Dusen was not the first lien upon the fifty acres therein described.
Of course it is conceded on the part of the respondent that, if Williams had the right to rely upon the record and to assume that the facts were such as appeared therefrom, he would acquire the mortgage which he purchased as a lien prior to the mortgage of the plaintiff. Her mortgage appeared upon the record as having been fully paid and discharged as against all the lands described therein. And as a matter of fact it was so discharged. The discharge which was found there was in fact executed by her, and was a contract with all parties interested in the lands therein described that her mortgage had ceased to be a lien upon such premises.
She claims, however, that, although she did so discharge such fifty acres from the lien of her mortgage, she did not intend to discharge any more than the twenty-seven acres therein described, and that her discharge, as to the fifty acres, was executed through a mistake of the scrivener. And while she does not claim that Williams was ever informed before he purchased the Van Dusen mortgage that there was any mistake in the execution of such discharge, yet she claims that he had notice of a fact which was sufficient to put him upon inquiry and that if he, in good faith, had made such inquiry, he would have ascertained the error through which a discharge was put on record. Such notice was to the following effect: When the discharge was recorded, Caroline Rowe had title to the fifty acres, subject to the two mortgages, and continued to hold such title down to her death, which occurred sometime in 1902. In October, 1893, she applied to Williams to purchase this mortgage from Van Dusen, and at that time plaintiff claims that Fanny Rowe — her sister who was the widow of Jerome Rowe and the person who had purchased the twenty-seven acres in 1887 (when the discharge was executed and recorded) — stated to Williams that "my sister holds the first mortgage upon her property, and it has never yet been paid." This statement is claimed to have been made in contradiction to a statement just made by Caroline that the Van Dusen mortgage, which she was asking Williams to purchase and carry for her, was a first lien on the fifty acres. The claim rests entirely upon the testimony of Fanny Rowe, who clearly is not a disinterested witness, since she now claims to own more than a half interest in the plaintiff's mortgage. Williams squarely denies that any such statement was ever made to him. In the following June, after having caused a search to be made of the records in the clerk's office of Tompkins county, and discovering that the plaintiff's mortgage had been discharged, and that there was no lien on the fifty acres prior to the Van Dusen mortgage, and believing, as he testified, that such was the fact, he took an assignment thereof from Van Dusen and paid the full amount due and unpaid thereon. Williams concedes that Caroline was introduced to him by Fanny Rowe, and has evidently forgotten when that occurred. It must be conceded that it was sometime prior to October 19, 1893, and in this respect his letter to Van Dusen of that date corroborates Fanny Rowe. But it does not corroborate her statement that on October fourth she told him that her sister held the first mortgage on the fifty acres. As to that claim she is not corroborated by any evidence in the case. Williams admits that at sometime Caroline and Fanny came to his office and stated to him that a mistake had been made in discharging the mortgage which he had purchased. He claims that they differed among themselves as to the right of the transaction, but is positive that it was sometime after he had purchased the mortgage, and that neither of them claimed that the mistake could affect his ownership. Although Williams seems to be uncertain as to when the conversation he alludes to was had, he is not at all uncertain as to the conversation itself. It was a conversation about the discharge, and a concession that as to him it was a valid one. Fanny Rowe does not pretend that when she introduced Caroline Rowe in October before the purchase, she had any conversation whatever about the discharge. Evidently the conversation which Williams admits having in his mind is not the one to which Fanny testifies, nor does it in any sense corroborate her concerning the notice which she claims to have then given. It is correct, therefore, to say that the notice upon which the plaintiff relies rests entirely upon the uncorroborated evidence of Fanny Rowe.
On the other hand, in the letter of October 19, 1903, which Williams wrote to Van Dusen concerning the request of Caroline Rowe that he purchase the mortgage, he says that he understands that it is a first claim on the place, which is difficult to understand if he had recently been notified that Fanny Rowe's sister held a mortgage ahead of it. Fanny Rowe's testimony as to this notice is not altogether convincing. If she so flatly contradicted Caroline Rowe in her statement that it was a first mortgage it is hardly credible that both Caroline and Williams would have paid no attention to her statement and allowed her to go away without an explanation. If she was correct, Caroline was making a false statement either dishonestly or ignorantly, and it is unlikely that Caroline would have allowed such a contradiction to stand without examination. Such a notice if given under such circumstances would have caused an immediate inquiry on Caroline's part, and it is incredible that Williams would have complied with her request to carry the mortgage for her until she should have ascertained and explained to him what this claim on Fanny Rowe's part amounted to. In short, all parties acted exceedingly unnaturally if the notice to which Fanny Rowe testified was then given. On the other hand, Van Dusen testified that in the following June, when the mortgage was transferred and the money paid therefor, it was done in Williams office in Ithaca and that both Caroline and Fanny Rowe were present, and that they then both stated to Williams in his presence that the mortgage being transferred was a first claim on the land. Williams does not remember this, but Van Dusen is positive regarding it. He seems to be an entirely disinterested witness, and his evidence is entitled to great weight in the solution of this question. If his statement in this respect is true, it cannot be believed that Fanny Rowe had previously made the claim regarding her sister's mortgage which she testified to. And there does not seem to be any chance for mistake on Van Dusen's part. He either testified to a deliberate and, so far as he was concerned, unnecessary falsehood, or else he was telling the truth.
And, moreover, I cannot understand what influence would have induced Fanny to so antagonize Caroline Rowe in her effort to bring about the purchase of such mortgage by Williams. When Fanny Rowe purchased the first mortgage for the plaintiff both she and the plaintiff knew that Caroline owned the fifty acres described in the Van Dusen mortgage, and, therefore, the discharge of the twenty-seven acres in that first mortgage as to her undoubtedly operated to discharge it as a lien on the fifty acres. It is conceded that the twenty-seven acres were ample to pay it. That they both understood it to be so I have no doubt, and, therefore, I think it very unlikely that Fanny Rowe ever attempted to interfere with Caroline's plan, or that Caroline would have permitted her to do so had she attempted it. It is a significant fact that no interest was ever demanded from Caroline Rowe, or from any one else, upon the plaintiff's mortgage after it was discharged of record. The conduct of all parties indicates that the plaintiff had no intent to in any way enforce her mortgage as against Caroline's interest in the fifty acres.
The burden was upon the plaintiff to establish that Williams had the notice upon which she relies, and she should meet that burden by clear and convincing evidence. And particularly should plaintiff have tendered such proof in this case, after waiting so many years before notifying Williams of her mistake and asking the aid of equity to rectify it. She concedes that she discovered the mistake the year after Williams took the assignment from Van Dusen, and yet she made no effort to rectify it until May, 1900. Caroline Rowe, who would have been a controlling witness on this question, was then dead, and Williams had recovered a judgment of foreclosure and sale upon his mortgage against Caroline Rowe and all parties of record who had any interest in the fifty acres. After such laches on her part, during which the evidence of the most important witness to the transaction had become unavailable and lands had been depreciated in value and new interests therein acquired, it is especially necessary upon plaintiff's part to establish the notice upon which she relies by much more satisfactory and convincing proof than that which she has produced. The clear weight of evidence is against her claim, and hence her equities do not prevail over those of the defendant Williams.
The further claim is made by the appellant that the plaintiff's right to this relief is barred by the Statute of Limitations.
The plaintiff's cause of action being based entirely upon her own mistake, and there being no charge of fraud, section 388 of the Code, fixing the period of ten years as the limitation, controls ( Sprague v. Cochran, 70 Hun, 512; Exkorn v. Exkorn, 1 App. Div. 124.) The action was brought some fourteen years after the mistake was made, and hence under such section was clearly outlawed. But the plaintiff replies that such a defense is a " personal defense," and that, therefore, Williams may not plead it.
When the plaintiff executed the discharge and put it upon the record, she in effect contracted with all parties who had an interest in the premises described in her mortgage that it was paid and that such premises were discharged from its lien. The instrument which, as she claims, she intended to execute was a contract with Fanny Rowe merely; but the one which she did execute and deliver was with Caroline Rowe and Van Dusen, as well as with Fanny Rowe, and they were in effect parties to that instrument. It affected their rights in the fifty acres, and they, or those succeeding to their rights therein, were, therefore, necessary parties defendant to any action she might bring to reform such discharge and deprive them of its benefits. Surely either one of them, or Williams, as the subsequent assignee of Van Dusen, might defend against such an action to reform, by showing that Fanny Rowe had in fact paid up the plaintiff's mortgage. Such a payment would inure to their benefit and relieve their interests in the fifty acres from its lien. Being necessary parties, therefore, to such an action, and their claim that it had been paid being a good defense thereto, I see no reason why they might not plead the statute in opposition to her claim, that it was discharged through mistake instead of through payment. Plaintiff bases her cause of action upon that claim and defendant disputes it. He claims that he could prove actual payment, but that he is not obliged to do so in this action, for the reason that he may rely on her contract of discharge, and that under the provisions of section 388 of the Code she is barred from any equitable right to have that reformed. As to such defendants the statute is a personal defense. They do not plead it for the purpose of establishing payment of her mortgage by lapse of time. They do not claim that her debt is outlawed, but they do claim that her right to repudiate her contract, that it has been paid and discharged, is outlawed, and, as regards that question, I am of the opinion that they are personally interested in it and have the right to plead it.
Moreover, Williams has the further defense against the plaintiff's right to modify this discharge that, having relied upon it, she is estopped as against him from changing it. She replies that he had notice of the mistake. This he denies, and so an issue arises directly between them as to the very fact upon which she bases her right of action. It seems to me clear that the statute which bars her right to prove such fact and maintain this action after ten years is a statute in which he is directly interested and personal to him.
For these reasons I am of the opinion that whether or not Williams had the notice upon which the plaintiff's right to reform this discharge is based, he may claim that the statute bars her right to compel him to litigate that question at this late day.
I do not examine the several other questions, both of law and of fact, which the appellant raises on this appeal. It becomes unnecessary to do so, inasmuch as, for the reasons above stated, this judgment cannot be sustained.
The judgment must be reversed and a new trial granted, with costs to the appellant to abide the event.
All concurred.
Judgment reversed on law and facts and new trial granted, with costs to appellant to abide event.