Lounsbury v. Norton. intention of any one of the parties that he should acquire the absolute title for this insignificant sum. Russell v. Southard, 12 How., 139; Campbell v. Dearborn, 109 Mass., 130.-(2.) The continual possession of Charles also shows that no absolute sale was intended.-(3.) The fact that by the terms of the bond Charles is entitled to a re-conveyance upon re-payment of the money advanced by Frank, with interest upon such advances, is also of weight as showing that the land was held as security for advances. Murphy v. Calley, 1 Allen, 107.-(4.) The stipulation in the bond that Charles should be permitted to occupy the premises "at a rental of the amount of the interest upon said sum of $8,000, the same to be paid semi-annually in advance," shows that payments of interest on the mortgage by Frank were considered as advances to Charles to be repaid. This cover to hide the true nature of the transaction has been often before the courts. Wright v. Bates, 13 Verm., 341; Woodward v. Pickett, 8 Gray, 617; Sears v. Dixon, 33 Cal., 326; Preschbaker v. Feaman, 32 Ill., 475; Boatright v. Peck, 33 Tex., 68. If the transaction between Frank and Charles created the relation of mortgagee and mortgagor, Charles had a right to redeem the property, which he never lost. The maxim, “Once a mortgage, always a mortgage," is applicable. French v. Burns, 35 Conn., 363. 2. The land is equally redeemable from Norton unless he is a bona fide purchaser from Frank. The finding of the court cuts off all argument on this point: "Before the purchase of the property by Norton he was fully informed of the circumstances under which, and the purpose for which, Frank had received the title from the bank." Having taken his deed with knowledge, Norton was not a bona fide purchaser. The property is therefore in his hands charged with the same equities in favor of Charles that it was charged with in the hands of Frank. French v. Burns, 35 Conn., 364. The court has found that he did not, in fact, know of the intention of Frank to defraud his brother, but believed that he had the right in law to sell the property. But his ignorance on this point cannot affect the case unless by the bond Frank Lounsbury v. Norton. had a full power of sale. The bond does not confer upon him in express terms any power of sale. It does refer to a possible sale of the land, and without doubt both contemplated a sale of it in the near future. But the circumstances forbid the supposition that either intended that such sale should be made without the consent of Charles. The only sales spoken of are such as are to be made within the three years, within the period when Charles's interest in the land is recognized in the instrument itself. Does it follow because provision is made for the payment of a mortgage debt out of the proceeds of the premises, if sold before default on the part of the mortgagor, that the mortgagee has power to give absolute title by his deed alone? A sale with the concurrence of the mortgagor was of course intended. Wing v. Cooper, 37 Verm., 69. But assuming that the bond conferred a power of sale, we claim that there has been no proper execution of that power. The execution of it is, in terms, limited to the three years. The deed to Norton was given long after their expiration. The deed too is a simple warranty, without reference to the power. Perry on Trusts, § 511; Lockwood v. Sturdevant, 6 Conn., 373. was a power granted it was a power to sell for cash, and this does not authorize an exchange. This bond cannot be so construed as to empower Frank to trade the land for horses and a building lot. Ringgold v. Ringgold, 1 Har. & Gill, 11; Cleveland v. State Bank, 16 Ohio St., 236; King v. Whiton, 15 Wis., 684. A purchaser must look carefully to the intention and purpose of the power, as well as to its extent, for if it is executed contrary to its intent and purpose, or outside of its true scope, or not in the manner in which it is provided that it shall be executed, the purchaser takes no title. Perry on Trusts, § 602 g. In the present case there is not only actual fraud proved on the part of Frank, but circumstances show fraud on the part of Norton. The court indeed finds that he had not actual knowledge of Frank's fraud, but it is nowhere found that he himself acted in good faith, and when the circumstances of the sale are considered we believe the court will not acquit him of fraud. And if there Lounsbury v. Norton. He bought the land at much less than its value. He knew it to be worth not less than $20,000. The court finds it to be worth from $22,000 to $25,000. He examined into all the facts of Frank's title, and learned all the circumstances; but he avoided asking Charles or making any inquiry of him, although he was living on the farm. He knew that the sale was a secret one, without the knowledge or consent of Charles. And he obtained the land in exchange for property which he knew Charles had had no chance to accept. J. W. Webster and G. E. Terry, for the defendants. 1. The savings bank held the legal title to the premises under its decree of foreclosure; and while perhaps the acceptance of money after the law-day would so far open the decree as to entitle the plaintiff in equity to redeem, it would not divest the bank of its legal title. Phelps v. Sage, 2 Day, 151; Roath v. Smith, 5 Conn., 133; Porter v. Seeley, 13 id., 564; Smith v. Vincent, 15 id., 1; Doton v. Russell, 17 id., 146; Cross v. Robinson, 21 id., 379. The plaintiff moreover is estopped from denying the title thus derived from the bank. The court finds that it was "made with the consent, at the request, and in the presence of the plaintiff, and for his benefit." Bigelow on Estoppel, 2d ed., 431. 2. Frank Lounsbury had full right to convey under the terms of the bond. As it was accepted by the plaintiff, it was as binding upon him as though signed by him. It was contemplated by its terms that Frank, during the term of three years, might sell a part or the whole of the property, first applying the proceeds to the extinguishment of his claim and accounting to the plaintiff for the balance, if any. During the term of the contract it created a trust in Frank for the purpose, among others, of selling a part or the whole of the property, and enabling Frank to pay his claims. The plaintiff thereby acknowledged the possession of Frank for the purpose of such sales. Frank was not ousted of possession when he conveyed to Norton. He sold no pretended title, he had the legal title, had good right to convey a part or the whole during the three years, and after Lounsbury v. Norton. the expiration of the term the plaintiff forfeited his right to a conveyance. Frank could legally convey to a bona fide purchaser, and such conveyance would not be subject to any equitable claim the plaintiff might previously have had as against Frank. The court, it is true, has found fraud on the part of Frank Lounsbury in conveying the property to Norton. If this is a fact material to the case it ought not to be considered, as there is no allegation upon which to base It was found by the court outside the record and pleadings. If immaterial, it certainly is entitled to no consideration. Douglas v. Town of Chatham, 41 Conn., 211. it. 3. Norton acted in good faith, believing that Frank had good right to sell, founding his belief upon the acts of the plaintiff in consenting to the conveyance by the bank to him, and the agreement of the plaintiff contained in the bond allowing Frank to sell at any time during the term of the agreement, and forfeiting all his rights after the time. limited. The court has found all the allegations of fraud charged against Norton untrue. The plaintiff is estopped by his own acts from claiming any rights in the property in the hands of Norton. He must look to Frank for his remedy for any violation of the trust conferred upon him. Bigelow on Estoppel, 434; Winton v. Hart, 39 Conn., 16; McNeil v. Tenth Nat. Bank., 46 N. York, 325. ANDREWS, C. J. Charles Lounsbury, the plaintiff, was on the 29th day of June, 1875, owner in fee of the farm of land described in the complaint. On that day he mortgaged it to the Dime Savings Bank of Waterbury to secure his note of three thousand dollars of the same date and payable on demand with interest. In September, 1887, the bank obtained a decree of foreclosure of the premises, and on the 22d day of March, 1878, filed its certificate of title by such foreclosure. After the latter date, notwithstanding the decree of foreclosure and the recording of the certificate, the plaintiff continued to make payments on the note and mortgage and the bank continued to receive them; and at all times subsequent to the decree of foreclosure until Lounsbury v. Norton. the deed of the farm by the bank to Frank Lounsbury, as hereinafter mentioned, both the plaintiff and the bank considered and treated the mortgage as still outstanding and the decree of foreclosure as opened, so that the plaintiff might redeem his farm from the mortgage at any time by paying the amount due on the note and the costs of the foreclosure proceedings. Upon such understanding the plaintiff during said time made payments at sundry dates down to the 10th day of May, 1883, which the bank received and indorsed on the note. It is substantially conceded at any rate it is not denied—and the law is clearly so, that this taking of payments by the bank under the circumstances operated to open the decree of foreclosure and to re-habilitate the plaintiff with the right to redeem as fully as if the decree of foreclosure had never been had. In this condition of things an agreement was made by the plaintiff, Frank Lounsbury, who was his brother, and the bank, pursuant to which the bank, on the 26th day of September, 1883, conveyed by a quit-claim deed all the right, title, interest, claim or demand which it had in the farm to Frank Lounsbury, he paying to the bank the sum of $122.11, in money, and giving his note for $8,000 to the bank, secured by a mortgage on the same land,-the sum of $8,122.11 being the amount then due from the plaintiff to the bank, and on the same day, and as a part of the same agreement, Frank Lounsbury executed and delivered to the plaintiff the bond which is set out in full in the finding. Frank Lounsbury took the conveyance from the bank with full knowledge of all the rights and obligations both of the bank and of the plaintiff. He knew that the bank held the title to the land as security for the debt owed to it by the plaintiff, and that the plaintiff had the right to redeem by paying the debt. He knew that the bank could lawfully convey to him such title in the land as a mortgagee has, and no more. "There is no principle in equity better settled than that every contract for the security of a debt by the conveyance of real estate is a mortgage; and all agreements of the parties tending to alter, in any subseVOL. LIX.-12 |