Hanscom v. Bourne

• Decision Date: 13 February 1935
• Parties: HANSCOM v. BOURNE et al.
• Court: Maine Supreme Court

177 A. 187

HANSCOM

v. BOURNE et al.

Supreme Judicial Court of Maine.

Feb. 13, 1935.

Appeal from Superior Court, York County, in Equity.

Bill in equity by Cora M. Hanscom against Harold H. Bourne and others. From the decree, some of defendants appeal.

Appeal sustained, decree reversed, and case remanded, with directions.

Argued before PATTANGALL, C. J., and DUNN, STURGIS, BARNES, THAXTER, and HUDSON, JJ.

John P. Deering, of Saco, for appellants. Willard & Willard, of Sanford, for appellee.

BARNES, Justice.

On appeal from decree of justice below. This action, brought by bill in equity, was tried and argued before this court as an action to remove a cloud upon title to a village lot.

It is claimed and conceded that on September 27, 1924, plaintiff was the owner of the lot in fee simple.

She was then, and is, the wife of defendant Hanscom, and, in order to aid her husband and defendant Williams in business ventures, on that date gave a mortgage, with power of sale to defendant Bourne, in trust, to guarantee payment to the Ocean National Bank, defendant, in language as follows: "Whereas one Lucius R. Williams and Ray P. Hanscom, my husband, have engaged in the operation and management of a summer hotel known as the Passaconaway Inn, at York Cliffs, Maine, in the Town of York, and to finance the said corporation of said hotel, will borrow from the Ocean National Bank of Kennebunk, Maine, the sum of Six Thousand Dollars, between the date of this instrument and the fifteenth day of October, nineteen hundred and twenty-five, now then this conveyance is made in trust to said Bourne to hold for the benefit of said Ocean National Bank to secure the payment of all the various notes given by said Ray P. Hanscom and Lucius R. Williams, or the Ogunquit Hotel Company, Incorporated, for said purpose, between now and the fifteenth day of October, 1925. If said notes are all fully paid with interest due thereon by the 15th day of October, 1925, then this deed shall be utterly void and of no force and effect whatever; but if said notes with interest, or any of them or a part of any of them, remain due on the 15th day of October, 1925, then, in that event only, said Bourne is hereby empowered to sell said land herein conveyed in public or private sale, and to devote the proceeds thereof, first to discharge said indebtedness remaining unpaid and incurred by said Ray P. Hanscom and Lucius R. Williams, or said Ogunquit Hotel Company, for the aforesaid purpose of said bank * * *."

Notes of Hanscom and Williams, to face total of $5,099, were given for loans to that amount, made between April 30 and July 2 of 1924, and were overdue and unpaid on October 15, 1925, and some time after the last date, the plaintiff fixes it as in the fall of 1925, "around October," Hanscom and Williams gave the Ocean National Bank a note for the amount of the indebtedness due and unpaid, on October 15, 1925, and the overdue notes were returned to Mrs. Hanscom, stamped, "Canceled."

At times, attempts were made to sell the property, and on April 1, 1932, it was sold by Bourne, trustee, to Florence B. Winn, one of the defendants, for $1,500.

In October, 1932, this bill was brought, to gain title to and possession of the property.

In due course the bill was taken, pro con-fesso against Hanscom, the husband, and Williams, and after hearing decree was filed, sustaining the bill.

Defendants Bourne and Ocean National Bank appealed. Defense appears to be on three issues: That one out of possession of land must proceed at law and not in equity; that substitution of a new note for notes secured by a mortgage is not, in this case, payment of the indebtedness the notes of prior date express; and that a bona fide purchaser at a sale under power of sale, without notice of any irregularity in the proceedings, obtains good title to the property sold.

The property conveyed, Bourne to Winn, was a vacant lot, as Mrs. Hanscom located it, directly across the street from her house.

It is claimed by her that Bourne, the trustee, never took, and hence did not retain, possession of the lot, but that she retained possession. Her testimony on acts which she interpreted as proving possession was that the ashes from her residence were piled on the lot as they accumulated each winter, hauled away in the spring; that she always had some one cut the grass on the lot; and that at one time, after she had deeded the property in trust, she had three or four loads of sand removed from the vacant lot to that of her residence.

Mr. Hanscom, who had maintained a large sign on the lot advertising his hotel venture, repainted the sign to the effect that the lot was for sale.

Mr. Bourne testified that he had the deed recorded and delivered to the defendant bank, and that the lot was taxed to him, annually, from date of the trust deed until sale to Mrs. Winn, and the latter that it was taxed to her in 1932, and that she paid that tax.

In the summer of that year Mrs. Winn, through the agency of her husband, performed acts that evidence possession, in that he and employees under his supervision improved the lot, and excavated for the cellar of a house she or they propose to build thereon.

It is not necessary to determine whether or not the plaintiff was out of possession in this action in equity.

She does not claim by legal title; it is her contention that she has an equitable title only.

It is established as law in many jurisdictions that possession is not a prerequisite to maintaining a bill in equity to remove cloud on title.

Granted that when the estate or interest to be protected is legal in its nature, and full and complete justice can be done by recourse to legal remedies, a party is left to them; yet when the estate or interest is equitable only, jurisdiction in equity should be exercised whether the plaintiff is in or out of possession, for, the estate or interest being equitable only, legal remedies are not applicable, adequate, or sufficient. Kennedy v. Northup, 15 Ill. 148; Redmond v. Packenham, 66 Ill. 434; Booth v. Wiley, 102 Ill. 84-113; Ormsby v. Barr, 22 Mich. 80; King V. Carpenter, 37 Mich. 363; Pier v. Fond du Lac, 38 Wis. 470. So where remedy of complainant out of possession was not considered as adequate and perfect at law, when the court "perceives, that the party complaining has equitable rights, and that the remedy at law might have proved to be insufficient." Chapman v. Butler, 22 Me. 191-197.

In such a case, "The remedy at law does not exist, and no recovery can there be had, however meritorious the complainants' title may be in contemplation of a court of equity. Upon this consideration the principle has become well established, that chancery may be resorted to for relief by the holder of the equitable title, though out of possession, as against the legal title and possession in the defendant; even where possession in the complainant is a requisite to the maintenance of the action, it is said that the rule applies to quiet title or to remove a cloud only when the object of the bill is purely for that purpose, and not when the primary relief sought is upon other and well established grounds of equitable relief, such as fraud, and where the removal of the cloud is only an incident of that relief." 5 R. C. L. p. 647, § 16. See, also, 51 C. J. p. 185, § 102; Pomeroy's Equity Jurisprudence, (4th Ed.) vol. 4, §§ 1398, 1399; Id., vol. 5, § 731, and cases cited.

In many states, Maine not included, statutes have been enacted giving the right to proceed in equity in cases like the present in such, and in states where legislation has not been invoked to express what was inher-ently a power in equity, the authorities seem to agree on a majority rule that: "Where the removal of a cloud from title is not the sole ground for equitable jurisdiction, but, in addition thereto, the relief asked for is based on fraud as creating the cloud, * * * a plaintiff, though not in possession, is nevertheless entitled to pursue his remedy in a court of equity for the removal of the cloud so created, such relief being afforded on the theory that fraud is a distinct ground of equitable jurisdiction, and that the remedy at law is inadequate." Robinson v. Marino, 145 Md. 301, 125 A. 701, 36 A. L. R. 692, and note, page 698.

Maine is classed with Alabama, Connecticut, and Massachusetts as maintaining the minority rule.

It is agreed among annotators that the decisions in Alabama are inextricably mixed.

In the leading ease in Connecticut, Munson v. Munson, 28 Conn. 582, 73 Am. Dec. 693, appears this significant paragraph: "That there is such a branch of equity jurisdiction, which may afford a preventive remedy in certain cases, will not be denied; but the power is not exercised as a matter of course, nor under any universal rule or principle of law requiring its exercise. It is preventive, as we have said, and very much must depend upon the extent and imminence of the danger threatened, and the view which will be taken of the case by a discreet judge."

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