Joseph v. Donovan

• Decision Date: 31 January 1933
• Citation: 116 Conn. 160,164 A. 498
• Court: Connecticut Supreme Court
• Parties: JOSEPH v. DONOVAN et al.

164 A. 498

116 Conn. 160

JOSEPH v. DONOVAN et al.

Supreme Court of Errors of Connecticut.

January 31, 1933

Appeal from Superior Court, New Haven County; John Rufus Booth Judge.

Action by Etta Joseph against Walter A. Donovan and others for foreclosure of a judgment lien. The case was tried to the court which rendered judgment for plaintiff against named defendant and certain other defendants and in favor of defendant Effie Z. Donovan and certain other defendants as to any interest they might have in the property by reason of a mortgage dated January 16, 1928, and the plaintiff and defendants Henrietta Woodruff and another, as executors of the estate of Watson S. Woodruff, deceased, and others appeal.

Error and cause remanded.

Plaintiff filed a plea in abatement to the appeal which was dismissed. ^[1]

Charles A. Harrison, of New Haven (Milton G. Harrison, of New Haven, on the brief for plaintiff.

Robert J. Woodruff and Daniel D. Morgan, both of New Haven, for defendants.

Argued before MALTBIE, C.J., and HAINES, HINMAN, BANKS, and AVERY JJ.

AVERY J.

This case was before this court in a previous term on appeal by the plaintiff from a judgment of nonsuit (Joseph v Donovan, 114 Conn. 79, 84, 157 A. 638); and it is not necessary to repeat in full the facts there stated. We allude only to such as are necessary for the purpose of the present discussion.

December 28, 1927, the defendant Walter A. Donovan and his wife Effie Z. Donovan, were in possession of certain premises in New Haven, owned by Abraham Lander, by virtue of a lease from him with certain privileges, the details of which it is unnecessary to set forth. On that date, they entered into an agreement with Lander for the purchase of his equity in the property, which was already encumbered by two prior mortgages. At that time, Donovan paid $500 as part of the purchase price, which sum was furnished him by Robert J. Woodruff, and subsequently paid back to the latter by the defendants Watson S. Woodruff, Peck, and Sanderson. Subsequently, on January 10, 1928, Abraham Gingold brought an action against the Donovans and attached their interest in the Lander property. This attachment was reduced to judgment on October 30, 1929, in the amount of $4,834.24; and, on November 12, 1929, a judgment lien for that amount was filed against the attached property. On the same day, Gingold assigned his interest in the judgment to the plaintiff, Etta Joseph. January 16, 1928, Mrs. Donovan relinquished her interest in the property to her husband; and on that day the property was conveyed by Lander to him. At that time, Donovan was indebted to the West Haven Bank & Trust Company in the amount of $3,831.36, and to Robert L. Woodruff, for legal services, $2,180. The balance of the purchase price due on the property was $12,247.50. The defendants Woodruff, Peck, and Sanderson, who were also officers of the West Haven Bank & Trust Company, with knowledge of Donovan's interest in the property and of the attachment by Gingold, the plaintiff's assignor, paid to Lander for Donovan the balance of the purchase price of the property, and also paid his indebtedness to the West Haven Bank & Trust Company and to Robert J. Woodruff. To secure Watson S. Woodruff, Peck, and Sanderson for the payments made for him, Donovan executed a note to them for $18,793.75, secured by a third mortgage on the property. The payments for Donovan, the delivery of the deed of purchase by Lander, and the delivery of the mortgage deed and note were all parts and parcels of one transaction, and were consummated at the same time. Donovan also executed a deed to a right of way over the premises to the West Haven Bank & Trust Company; the reason for this conveyance did not appear. He also conveyed the property to Woodruff, Peck, and Sanderson by warranty deed providing a merger of interest with their mortgage. In addition, an agreement was entered into by him with them which provided that they were to hold and manage the property in trust for him, and also provided for a lease of a theater on the premises to him, or to such person as he should designate. Subsequently Donovan occupied this theater as lessee of Woodruff, Peck, and Sanderson, trustees. The agreement between Donovan and Woodruff, Peck, and Sanderson further provided that the premises might be conveyed to the defendant Keller to be held by him under the same terms and conditions. On January 28, 1928, they executed a quitclaim deed of the premises, to Keller, reserving their rights under their third mortgage. On the same day, Keller executed a quitclaim deed of the premises back to them. On December 21, 1928, Woodruff, Peck, and Sanderson secured a judgment in an action brought by them to foreclose their mortgage; and on December 28, 1928, a certificate of foreclosure reciting that the title to the premises had become absolute in them was recorded in the land records. Neither the plaintiff nor her assignor, Gingold, were made parties in this foreclosure suit.

On the previous occasion when this case was before us, we held that the plaintiff had a valid judgment lien which attached to the interest of Donovan in the premises at the time the attachment was made, and which was enforceable to the extent of the interest he had after he had acquired title from Lander. Joseph v. Donovan, supra, 114 Conn. 84, 157 A. 638. The question involved in plaintiff's appeal is whether the trial court erred in giving priority to the third mortgage of Woodruff, Peck, and Sanderson made subsequent to the attachment of Donovan's interest in the property by the plaintiff's assignor; the moneys having been advanced and the mortgage taken with knowledge on their part of Donovan's interest and the existence of the attachment. The theory upon which the trial court acted in rendering judgment for these defendants was that the mortgage in question was a purchase-money mortgage, and entitled to priority over a previous attachment of Donovan's interest. " Where a purchaser receiving a deed to land simultaneously conveys it to another as security for a loan used in discharging the purchase-price, and the two conveyances are part of the same transaction, the title passes through the borrower unaffected by the lien of a judgment against the borrower, which would have attached had the title remained in him." 1 Jones, Mortgages (8th Ed.) § 584, p. 796; Wiser v. Clinton, 82 Conn. 148, 152, 72 A. 928, 135 Am.St.Rep. 264. " A purchase-money mortgage may be made to a third person who advances the purchase-money at the time the purchaser receives his conveyance, and such mortgage is entitled to the same preference over a prior judgment as it would have had if it had been executed to the vendor himself." 1 Jones, Mortgages, § 586; Middletown Savings Bank v. Fellowes, 42 Conn. 36, 49; Clark...