Gavin v. Johnson

• Decision Date: 05 January 1945
• Citation: 41 A.2d 113,131 Conn. 489
• Court: Connecticut Supreme Court
• Parties: GAVIN et al. v. JOHNSON et al.

131 Conn. 489

41 A.2d 113

GAVIN et al.

v.JOHNSON et al.

Supreme Court of Errors of Connecticut.

Jan. 5, 1945.

COPYRIGHT MATERIAL OMITTED.

Appeal from Superior Court, New Haven County; McEvoy, Judge.

Action by Clarence F. Gavin and others against Minnie V. Johnson and others, claiming a decree adjudging that the plaintiffs are subrogated to the rights of the vendees under a written contract for the purchase of land from the named defendant, and other relief, brought to the Superior Court in New Haven County at Meriden, where a demurrer to the complaint by the named defendant was overruled. The named defendant filed a cross-complaint, the other defendants also filed a cross-complaint and the issues were tried to the court. Judgment for the plaintiff on the complaint and the named defendant's cross-complaint, and for the other defendants on their cross-complaint, and appeal by the named defendant. Error in part and case remanded with direction.

Jeremiah D. Shea, of New Haven (Ellsworth B. Foote, of New Haven, on the brief), for appellant (named defendant).

Harry R. Cooper, of Meriden, for appellees (plaintiffs).

Before MALTBIE, C. J., and BROWN, JENNINGS, ELLS, and DICKENSON, JJ.

MALTBIE, Chief Justice.

The defendant Minnie V. Johnson owned two adjoining lots of land on Lupine Street in Wallingford, numbered respectively 31 and 32 on a map on file in the town clerk's office. She sold and conveyed lot 31 to the defendants Mr. and Mrs. Gifford by warranty deed, and at the same time she entered into a written contract to convey to them lot 32, in consideration of a payment on the purchase price then made and other payments to be made in the future. The Giffords went into possession of both lots. They erected a house on lot 32, and, it order to finance it, borrowed substantial amounts on mortgages, which, instead of describing lot 32, on which the house was being erected, described lot 31. The mortgages were later refinanced into a single one, held by a building and loan association. This mortgage was foreclosed by a similar association into which the mortgagee had been converted. After that foreclosure, the plaintiffs bought from the association, as they supposed, the lot with the house upon it, but their deed, following the provisions of the mortgage, described lot 31. In fact, title to the lot with the house on it had never vested in the Giffords, because of their failure to pay the sums due under the contract of purchase. The plaintiffs brought this action for equitable relief primarily on the ground of mistake, in order to secure title to the lot upon which the house stood. The trial court rendered judgment in their favor, and Mrs. Johnson, to whom we shall refer as the defendant, has appealed.

The defendant begins her attack upon the trial court's conclusions with the contention that, as the bond for a deed gave the Giffords no express or implied authority to encumber lot 32 with a lien before title passed, they could not have given a valid mortgage upon it, citing Bridgeport People's Savings Bank v. Palaia, 115 Conn. 357, 361, 161 A. 526. There is, in that case, language which gives a semblance of support to this claim; but it is to be read in relation to the issues we were then considering, the question whether claimed mechanics' liens arising out of a contract by one in possession of land under an agreement to purchase it had priority over a purchase money mortgage; and we applied the rule that, to give rise to a lien which would affect the vendor's title or have priority over such an incumbrance, there must be specific or implied authority from the vendor to the vendee to encumber the land with the lien. See Hillhouse v. Pratt, 74 Conn. 113, 117, 49 A. 905; Seipold v. Gibbud, 110 Conn. 392, 395, 148 A. 328. But without such authority one in possession of land under an agreement to purchase it may subject his interest in it to a lien which will attach to it when the purchaser takes title, and which may be enforced subject to the prior rights of the vendor. Hooker v. McGlone, 42 Conn. 95, 102; Seipold v. Gibbud, 110 Conn. 392, 396; Sheppard v. Messenger, 107 Iowa 717, 720, 77 N.W. 515; Wagar v. Briscoe, 38 Mich. 587, 596. We have held that the vendee under a contract of sale has an estate which may be attached, although the interest acquired by the attaching creditor is limited to that of the vendee. Miller Co. v. Grussi, 90 Conn. 555, 557, 98 A. 90. We have recognized that a mortgage may itself be mortgaged. Saposnick v. Kenig, 121 Conn. 253, 256, 184 A. 584. There is nothing in our law which makes inapplicable in this state the general rule that one in possession of real estate under an agreement for its purchase may mortgage the interest he has in it, with the result that upon foreclosure the mortgagee becomes vested with all the rights the vendee had under the agreement. Hagar v. Brainerd, 44 Vt. 294, 299; Stoddard v. Whiting, 46 N.Y. 627, 632; Sinclair v. Armitage, 12 N.J.Eq. 174; 41 C.J. 374, § 163.

The trial court has found that the Giffords believed that they were erecting the house on the lot to which they had full title, and that the description of the other lot in the mortgages was the result of mutual mistake. The defendant maintains that the court could only have found upon the evidence that the Giffords intentionally built the house on the lot on which it stood. If, as the court found, the description in the mortgages of the other lot was the result of a mutual mistake, the mortgagees would have had a right to have the mortgages reformed to carry out the real intent of the parties. Cherkoss v. Gasser, 123 Conn. 368, 370, 195 A. 737. If, however, the Giffords knew the true situation, but nevertheless gave the mortgages on the lot of land other than that on which the house stood, they would not be permitted to defeat the mortgagees' rights to reformation on the ground that the mistake was not mutual. Home Owners' Loan Corporation v. Stevens, 120 Conn. 6, 10, 179 A. 330. At the time the mortgages were given the deed to lot 31 had been recorded, but the contract to sell lot 32 was not recorded until some years later. Even if a close examination of the map and other documents, such as tax lists, in the town clerk's office and a study of their relationship to the actual situation on the land would have disclosed the error in the mortgages, a failure to discover it certainly would not justify us in holding that the mortgagees had been guilty of negligence which would debar them from relief, in the absence of any finding to that effect. Home Owners' Loan Corporation v. Sears, Roebuck & Co., 123 Conn. 232, 242, 193 A. 769.

Both the association which, after foreclosure, deeded lot 31 to the plaintiffs and they were mistaken in the assumption that the former was conveying to the latter the lot with the house upon it; and under these circumstances, the plaintiffs succeeded to the equitable right to a reformation which their grantor had as against the Giffords. Andrews v. Charon, 289 Mass. 1, 7, 193 N.E. 737; note, 89 A.L.R. 1444; and see Chamberlain v. Thompson, 10 Conn. 243, 253, 26 Am.Dec. 390; Stedwell v. Anderson, 21 Conn. 139. That when they took their deed the agreement for the sale of lot 32 had been recorded would not so change the situation as to debar them from relief, for that in no way referred to the house and, obviously, as the trial court states in the finding, it would not be notice to them that the house stood on the lot in which the Giffords had only the interests of a vendee under an agreement of purchase. No doubt the plaintiffs might have secured a return of...