Swedesboro Loan & Bldg. Ass'n v. Gans

• Decision Date: 05 June 1903
• Citation: 55 A. 82,65 N.J.E. 132
• Parties: SWEDESBORO LOAN & BUILDING ASS'N v. GANS et al.
• Court: New Jersey Court of Chancery

55 A. 82

65 N.J.E. 132

SWEDESBORO LOAN & BUILDING ASS'N

v. GANS et al.

Court of Chancery of New Jersey.

June 5, 1903.

Suit by the Swedesboro Loan & Building Association against James Gans and others. Decree for complainant.

Norman Grey and W. B. Wolcott, for complainant.

Thomas E. French and Samuel Richards, for defendants.

REED, V. C. This suit is brought to have a mortgage, which has been canceled upon the record, re-established and foreclosed. The facts, as I gather them from the pleadings, from the meager testimony, and from the position taken by counsel, are as follows: One Charles Gans, of Gloucester county, made a mortgage dated March 11, 1892, to the Swedesboro Loan & Building Association, to secure the sum of $1,100, payable in one year. Charles Gans, the mortgagor, died June 9, 1894, intestate, leaving, him surviving, his widow, Kate P. Gans, and as his heirs two brothers, James and John, and three sisters, Jennie, Phebe, and Mary. On April 1, 1895, the widow released to the complainant her right of dower in the mortgaged premises. The complainant accepted, a deed from one Sebastian Gans, the father of Charles, the deceased mortgagor, under the belief that on the death of Charles the property descended to his father. After the execution of this deed the loan and building association, believing that it held the legal title to the premises, on August 5, 1895, canceled its mortgage. The procuration of the deed from Sebastian Gans seems to have been accomplished by one Benjamin McAllister, who was a scrivener, and was at one time a director of the building association and did writing for them, and who seems also to have been mixed up in the settlement of the estate of Charles Gans. He apparently acted as intermediary between the building association and the Ganses, and got the deed, which the complainant accepted, upon his word, as a conveyance of the equity of redemption in the mortgaged premises. Upon the execution of this deed the complainant went into possession, and has since received the rents and profits therefrom. There can be no doubt that the cancellation of the mortgage was induced by the belief that by force of the deed of Sebastian Gans the loan association owned a complete title to the property.

It is thus manifest that the equity of the situation is entirely with the complainant. The defendants, as heirs of Charles Gans, received the property subject to the lien of this mortgage. The cancellation of the mortgage was a pure gift to the defendants of the mortgagee's interest in the property. The heirs had not paid one cent to bring about this change in the respective position of mortgagee and heirs. Neither has any purchaser, bona fide or otherwise, come into existence upon the faith of the cancellation of the mortgage. It is clear, therefore, that, unless some inexorable rule compels otherwise, the complainant should be relieved from the predicament into which it was misled by its belief in its ownership of a complete title to the mortgaged property.

The substantial ground upon which the heirs resist the granting of this relief is that, while the cancellation was caused by a mistake of the complainant, it was a mistake of law, and not of fact. The maxim, "Ignorantia juris excusat non," is invoked by the defendants. This maxim is subject to so many exceptions that it is quite as often Inapplicable as applicable to suppose mistakes of law.

That the present case, involving the release of private rights under a mistaken notion as to private ownership of property, is one in which the English courts of chancery would afford prompt relief, cannot be doubted. The line of cases granting relief where a man purchased his own property through mistake (Bingham v. Bingham, 1 Vesey, 127), or where a release was made so broad in its terms as to release rights of property of which the party was ignorant (Chalmondley v. Clinton, 2 Mer. 171), or where a party, under the misapprehension that he had no title, surrendered to the supposed owner (Pusey v. Desbouvie, 3 P. Wm. 315), exhibit the degree in which courts of equity granted relief from such mistakes. In Livesey v. Livesey, 3 Rus. 287, an executrix who, under a mistaken construction of a will, had overpaid an annuity* was permitted to deduct, the amount overpaid from subsequent payments. In McCarthy v. Decaix, 2 Rus. & My. 614, a person was relieved where he had renounced a claim of property made under a mistake respecting the validity of a marriage; the Lord Chancellor saying, "What he has done was in ignorance of the law, possibly of fact; but in a case of this kind this would be one and the same thing." In Cooper v. Phibbs Lr., 2 H. L. 142-172, s. c. Eng. Rul. Cas. 870, an agreement was canceled because it had been entered into through a mistake as to the ownership of a fishery. In this case Lord Westbury expressed the much-discussed sentiment that the word "jus" in the maxim is used to denote a general law, and has no application to private rights. The result of this decision of the House of Lords was that an act caused through a mistake as to ownership of property would be remedied in equity. In Beauchamp v. Winn, 6 H. L 223-264, s. c. 22 Eng. Rul. Cas. 889, a mutual mistake in an agreement as to the rights of the parties resulted in a correction of the agreement.

The result of the English cases is summed up by Mr. Kerr in the remark "that if a man, through misapprehension or mistake of the law, parts with or gives up private rights to property, or assumes obligations, upon grounds upon which he would not have acted but for such misapprehension, a court of equity may grant relief, if, under the general consideration of the case, it is satisfied that the party benefited by the mistake cannot in conscience retain the benefit or advantage so acquired." Kerr on F. & M. p. — This statement of the equitable rule was cited with apparent approval by Chancellor Runyon in Macknet v. Macknet, 29 N. J. Eq. 54-59, and in Martin v. N. Y. S. & W. R. R., 36 N. J. Eq. 109-112.

The equity cases in this country, more particularly the earlier cases, exhibit a less liberal spirit in granting relief for mistakes in law. This resulted mainly, I think, from the great influence which the early reported cases decided by Chancellor Kent had in shaping the early equity jurisprudence of this country. The case of Lyon v. Richmond, 2 Johns. Ch. 60, was an application to set aside an agreement because it was entered into under...