Glotzer v. Keyes

• Decision Date: 08 March 1939
• Citation: 5 A.2d 1,125 Conn. 227
• Court: Connecticut Supreme Court
• Parties: GLOTZER et al. v. KEYES et al.

5 A.2d 1

125 Conn. 227

GLOTZER et al. v. KEYES et al.

Supreme Court of Errors of Connecticut.

March 8, 1939

Appeal from Superior Court, Hartford County; Edwin C. Dickenson Judge.

Action by Isidor Glotzer and another against Joseph C. Keyes and the Hartford-Connecticut Trust Company to foreclose a second mortgage, in which defendants filed cross-complaints. From a judgment after trial to the court that such mortgage and a first mortgage owned by defendant trust company be discharged as invalid incunbrances, plaintiffs and defendant trust company appeal.

No error.

JENNINGS, J., dissenting.

Josiah H. Peck, of Hartford, and Irving I. Rachlin of New Britain, for appellants Glotzer et al.

Louis M. Schatz and Nathan Schatz, both of Hartford, for appellant Hartford-Connecticut Trust Co.

I. E. Finkelstein, of Hartford, for appellee Keyes.

Argued before MALTBIE, C.J., and HINMAN, AVERY, BROWN, and JENNINGS, JJ.

HINMAN Judge.

This action was brought to foreclose a mortgage given March 31, 1927, by Albert Wax of Hartford to secure two notes of $3,584.26 each, one payable to Isidor Glotzer, described in the mortgage as of the city of New York, and the other to Isadore Glotzer of Hartford. Each note was payable $125 every six months for three and one-half years with specified increased semiannual payments thereafter, and with provision for acceleration upon default. The mortgage stated that the premises were subject to a prior mortgage for $14,500 to The Hartford-Connecticut Trust Company. The complaint alleged that the Trust Company now has two mortgages for $6,000 and $4,000 respectively, both subsequent to the plaintiffs' mortgage, and made it a party defendant. The named defendant is the present owner of the premises. Both defendants filed answers and cross-complaints alleging facts which, so far as are now material, are included in the finding, and making claims for relief which include that accorded by the judgment rendered. The finding, with minor corrections within the assignments of error, includes the following facts:

In September, 1925, the property described in the complaint was owned by The Hartford Construction Corporation which gave The Hartford-Connecticut Trust Company a mortgage thereon for $14,500, which was duly recorded and still remains unreleased of record. In March, 1927, title to the property was transferred to Wax, who on March 31, 1927, executed a second mortgage which is the one now sought to be foreclosed. No Isidor Glotzer was present at the time of execution of this mortgage or at any subsequent transactions connected with the property or at the trial. Wax paid three semi-annual instalments of principal and interest to Isadore Glotzer, who signed receipts for the full amounts in his own name. In December, 1928, the plaintiffs started foreclosure proceedings against Wax but the action was not pursued. On September 18, 1929, Helene Schumann brought suit against Wax and attached the property. On October 29, 1929, the plaintiffs withdrew their first foreclosure action and on October 30th started another foreclosure suit, naming Wax and Helene Schumann defendants. On January 17, 1930, Helene Schumann obtained a judgment against Wax and on January 31st filed a judgment lien in the Hartford land records. On October 14, 1930, Isadore Glotzer called on Wax and negotiated for a transfer of the property. He brought with him a quitclaim deed in which he was named as grantee with Wax as grantor, and paid Wax $50 to execute it. Wax did so with the understanding that he was conveying all his interest in the property to the holder of the second mortgage and that the mortgage was thereby discharged. Wax had never met or seen Isidor Glotzer, did not know that he had or claimed to have an interest in the second mortgage and Isadore neither said nor did anything to so indicate. In taking title Isadore intended and did act in behalf and for the benefit of both plaintiffs. No demand for payment has been made on Wax since the conveyance from him, and Isadore has since done nothing about learning the identity of the owner of the property, the amount of the incumbrances or any other fact important to a mortgage.

On October 28, 1930, Helene Schumann started an action for foreclosure of her judgment lien, naming Isadore Glotzer defendant as owner of the property, and obtained judgment and recorded a certificate of foreclosure on December 20, 1930. On January 7, 1931, she quitclaimed the property to the defendant Trust Company and the deed was duly recorded. The Trust Company was represented by a competent lawyer who apparently was misled by the similarity of names of the Glotzers and advised that the title was free and clear of incumbrances; it would not have accepted the conveyance if it had known that the plaintiffs claimed an interest under their mortgage. Isadore Glotzer, who had borrowed money from the defendant Trust Company, gave it a financial statement on March 4, 1930, in which he listed as an asset his interest in the mortgage he now seeks to foreclose, but on May 20, 1931, he gave that bank another financial statement in which he did not so list it as an asset. The bank owned the property between January 7, 1931, and June 20, 1931, but neither plaintiff made any demand on it for payment. On June 20, 1931, the Trust Company sold the premises, free of all incumbrances, to the defendant Keyes for $12,000, $2,000 of which was paid in cash and the balance was evidenced by two purchase money mortgages, one for $6,000 and the other for $4,000, the latter being reduced to $1,500 at the time of the trial. At the time of his purchase of the premises, Keyes was represented by a competent lawyer who searched the title and Keyes was advised, and believed, that the premises were free and clear of all incumbrances. He would not have purchased or made any of the payments had he known that the plaintiffs claimed an interest under their original second mortgage or the bank a $14,500 first mortgage. Neither of the plaintiffs has ever made demand on him for payment. On September 20, 1937, Keyes entered into an agreement for the sale of the premises. Thereafter the fact that the plaintiffs' mortgage was unreleased of record was discovered and called to the attention of Isadore Glotzer, and this action was brought October 21, 1937. The trial court concluded that the mortgage from The Hartford Construction Corporation to the Trust Company was merged in the title by the conveyance to the latter from Helene Schumann, that the plaintiffs' mortgage was merged by the conveyance from Wax to Isadore Glotzer, that they have abandoned their security and that they are estopped from now asserting any rights under their mortgage, and rendered judgment that both mortgages be discharged of record as invalid liens and incumbrances. The assignments of error pertaining to the conclusion that the plaintiffs abandoned their security and the supporting facts found are decisive of the issues on this appeal.

An action of foreclosure is peculiarly equitable and the court may entertain all questions which are necessary to be determined in order that complete justice may be done between the parties. Beach v. Isacs, 105 Conn. 169, 176, 134 A. 787. Equity will not afford its aid to one who by his conduct or neglect has put the other party in a situation in which it would be inequitable to place him. Bassett v. City Bank & Trust Co., 116 Conn. 617, 630, 165 A. 557. Abandonment in its general sense is the intentional relinquishment of a known right. 1 Am.Jur. p. 2. The doctrine has its most common application in the case of easements and other incorporeal hereditaments. Thus the owner of an easement may lose his right, especially if a third party has become interested in the servient estate after such abandonment and it would operate unjustly upon him if the exercise of the easement were resumed in favor of the dominant estate. Idem, page 6, citing New York, N.H. & H. R. Co. v. Cella, 88 Conn. 515, 91 A. 972, Ann.Cas.1917D, 590. In this state a mortgagee may likewise abandon his right of security under the mortgage. In Peck v. Lee, 110 Conn. 374, at page 377, 148 A. 133, at page 135, we say: ‘ While eminent authority lays it down that a legal title to land perfected into a grant or vested by a deed may not be lost by abandonment, we have never recognized that doctrine as including incidental rights in land though resting in grant, as witness the cases involving easements already cited. In Miller Co. v. Grussi, 90 Conn. 555, 559, 98 A. 90, 91, we point out that ‘ inchoate or equitable rights in land may be surrendered or lost by abandonment,’ and there refer to cases in which it was held that leasehold interests might be abandoned. While in our law a mortgage in form and legal theory is a conveyance of a fee and the mortgagee acquires a right of possession under it, yet his estate is, except for a limited purpose, regarded as personal property and the mortgage as merely security for the debt; McKelvey v. Creevey, 72 Conn. 464, 45 A. 4,77 Am.St.Rep. 321; and it is as true here as elsewhere that whatever extinguishes the debt discharges the mortgage. Androscoggin Savings Bank v. McKenney, 78 Mo. 442, 444,6 A. 877; Atwater v. Underhill, 22 N.J.Eq. 599, 602; 41 Corpus Juris, 785. When the debt is gone a reconveyance is not necessary to put an end to the rights of the mortgagee. Munson v. Munson, 30 Conn. 425, 437. A debt may certainly be abandoned, and we see no valid reason why a mortgagee may not also abandon his right of security under the mortgage.'

To constitute an abandonment there must be an intention to abandon or relinquish accompanied by some act or omission to act by which such intention is manifested. Stevens v Norfolk, 42 Conn. 377, 384...