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agreement with the respondents Charles Storrs and Augustus
Storrs, of the city of New York, partners under the name of
Storrs Brothers, the material part of which is as follows :

" Tliat said Vail, in consideration of $15,000 to him paid
by said Storrs Brothers has sold, assigned and transferred,
and hereby does sell, assign and transfer unto said Storrs
Brothers, a certain contract bearing date August 16th, 1869,
made between the Noi*wich Savings Society and said Vail,
and all the rights and interest of said Vail in, to and under
said contract. And said Storrs Brothers in consideration of
the premises, do hereby covenant and agree to and with said
Vail that, upon being paid by him at his option, at any time
within the six months succeeding the 23d day of December)
1869, the sum of $15,000 with interest from the date hereof,
and whatever sum or sums of money shall have been paid to
the said Norwich Savings Society by said Storrs Brothers in
pursuance of said contract ; and also whatever sum or sums
of money they shall in the meantime advance for expenses,
and other charges relating to the protection and care of the
property and rights hereby conveyed to them, together with
interest thereon from the time of such payment or payments,
Bidd Storrs Brothers will duly convey and transfer to said
Vail all the rights, title and interest that may or shall then
be secured or acquired to or by them from the said Norwich
Savings Society under said contract, and all their right, title
and interest in said contract, and in the property therein
mentioned. And in the meantime, and until such payment
shall be made by said Vail, he shall have the possession and

Vol. xxxvn. — 57

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Bank of North America r. Norwich Sayings Society.

use of said premises and shall take care thereof, as required
by said contract with said Norwich Savings Society, at his
own sole expense, and he shall during the same time pay all
expenses and taxes which shall accrue upon or on account
of the property."

Storrs Brothers thei'eupon paid to Vail the sum of f 15,000
in cash. Some time in the mt>nth of October previous Vail
had applied to them for a loan upon the property, submitting
to them a correct abstract of his title to the same, certified
by the town clerk from the records of Glastonbury, and his
contract with the Norwich Savings Society, and they, upon
examining the same, agreed to loan him the sum of fifteen
thousand dollars upon the security of the property at any
time when he should call for it. Storrs Brothers wore, and
still are, commission merchants in the city of New York, and
have for many years sold goods for Vail and for the foi'mer
owners of the premises, and were willing to make the loan,
hoping thereby to enable Vail to get the works again in mo-
tion. On the 22d of December, 1869, Vail applied to them
for the money, and as the Norwich Savings Society had not
conveyed to Iiim the premises, proposed to make to Storrs
Brothers the transfer of the contract as stated in the agree-
ment. The immediate object of Vail at that time in obtain-
ing the money was to enable him to comply with his agreement
with the Norwich Savings Society, and make payment to it
on the following day of the amount called for by his contract
with it. At the time Vail originally applied to them for the
loan, and Storrs Brothers agreed to make it. Vail had no
knowledge that the Bank of North America had not received
a copy of tlie petition of the Norwich Savings Society or that
they claimed that they had not received any notice of the
petition or foreclosure, but, on the contrary, from his interviews
with the president of the bank, on the 81st of July, 1869, he
supposed and believed that the bank was fully aware of the
proceedings, and that the bank relied upon one Gteorge B.
Rogers, who had agreed to buy its interest, (but had since
failed to do so,) to protect and redeem the mortgage.

Storrs Brothers, on the 22d of December, 1869, when they

Digitized by


OCTOBER TERM, 1870. 461

Bank of Nortifa America v. Norwich Savings Society.

advanced the $15,000 to Vail, did not know of the pendency
of the present petition or that an injunction had been obtained
thereon, but supposed that the title of the Norwich Savings
Society and of Vail was perfect and free from incumbrance,
as appeared to be the fact by the record. Vail had knowledge
of the bringing of the petition, and of the fact that the in-
junction had been obtained, soon after the same were brought
and obtmned, but did not communicate his knowledge on die
subject to Storrs Brothers at the time, nor afterwai'ds when
he obtained the money of them upon the loan

On the 23d day of December, 1869, Vail tendered to the
Norwich Savings Society, at its banking house in Norwich,
the sum due under the terms of his agreement, with a written
request and order that the conveyance of the property be made
to Storrs Brothers ; but the society declined to make the con-
veyance, and gave as a reason therefor that they had beea
enjoined from making any conveyance of the premises.

On the 24th of October, 1869, one of the directors of the
Bank of North America heard that the mortgage of the
Norwich Savings Society had been foreclosed, and on the 27th
of October directions were given to the counsel of the bank
at Hartford to " endeavor to get a quit-claim deed if possible,
but if not to take the proper steps to get a new hearing ;"
and the present petition, dated the 27th day of October,
1869, was brought. When the petition was brought Vail
and Storrs Brothers were not made parties thereto, and at
the November term of the court, to which the petition was
returnable, the Norwich Savings Society filed a plea setting
up the facts with regard to them, and by order of the court
they were made parties respondent.

Vail has performed all things on his part to be performed
by his agreement to entitle him to a conveyance from the
Norwich Savings Society, and the latter would have conveyed,
and would now convey, their interest in the property to Storrs
Brothers, except as restrained by the injunction.

None of the oflScers of the Norwich Savings Society, nor
its attorney, had any knowledge or suspicion that the Bank
of North America had not received the notice of the pendency

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Bank of North America v. Norwich Saringt Society.

of the petition, at the time the agreement between the Soci-
ety and Yail was made, neither had Yail knowledge of the
same, but both parties acted upon the supposition that ftiU '
and legal notice had been received by the bank. The first
knowledge that either had of the clsam of the bank that it
had not received the notice was by the bringing of the present

The real estate in question is of greater value than the
amount of the two mortgage claims held by the Norwich
Savings Society and the petitioners, and the sum advanced
thereon by Storrs Brothers, to wit, of the value of $75,000
and upwards.

Vaa, on the 24th of August, 1869, employed a new man to
hold possession and take care of the property for him. He
also obtained further insurance on the buildings on the prem-
ises to the amount of $10,000 for the benefit of the Norwich
Savings Society, and as premiums for insurance, payment for
watchmen required by the insurers, repairs and other ex-
penses of a similar character, he has expended between $2,000
and $3,000. He has^ during the time since August 24th,
1869, occupied a portion of the premises as a place for stor-
age and for manufacturing purposes. A reasonable rent for
that portion occupied for manufacturing purposes would be
$100 per month. During a portion of the time the premises
were occupied by others, upon whom Vail has a claim for stor-
age to the amount of $1,200, for which he has commenced a
suit, and attached property to secure the same, and the suit is
now pending and being defended* The Norwich Savings Soci-
ety has paid taxes on the property since the 23d day of August,
1869, amounting to $710.89. Its claim, including the taxes,
with interest, amounted on the 1st day of August, 1870, to

The Connecticut Arms Sc ManufSaicturing Company is in-
solvent, and the petitioners have no means of obtuning pay-
ment of their clsdm except the mortgage.

Upon these facts the case was reserved by the Superior
Court for the advice of this court.

(7. J?. Perkins, for the petitioners.

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OCTOBER TERM, 1870. 453

Bank of North America v. Norwich Savings Society.

The petitioners arc entitled to a decree opening the fore-
closure suit and fixing a further time for redemption.

1. This right is very clear as against the Savings Bank.
Rev. Stat., tit. 1, sec. 200 ; id., tit. 18, sec. 9 ; CarringUm v. Hul-
abird^ 17 Conn., 530 ; Bridgeport Savings Bank v. Mdredge,
28 id., 556 ; Day v. Welles, 81 id., 344 ; Seymour v. Mller,
32 id., 402 ; Bostwick v. StileB, 36 id., 195 ; Seymour v. DaviSj
id., 264.

2. It is claimed however that the respondent Vail has
certain rights which make it unjust as against him that
the foreclosure should be opened. This claim is founded
upon the agreement made between Vail and the Savings Bank,
that if the present petitioners did not redeem the Savings
Bank would convey the property to him upon certain terms
agreed. But under this agreement Vail takes only the rights
of the Savings Bank whatever they might be, and if those
rights were subject to the equitable right of the petitioners
to have the foreclosure opened and to redeem, then Vail's
rights are subject to the same equity. Besides, the contract
is merely executory, and all that is needed is to prevent its
performance, which will do no wrong to Vail, for he can
clearly recover back the $500 paid by him to the Savings
Bank, it having been paid under a mistake of fact and upon
a consideration that has failed. Again, Vail was to have the
right to take the property only in case* the present petitioners
did not redeem. They are now seeking to redeem, and if
the court shall find that they have an equitable right to do so
then the contract would fail by its own terms. Again, Vail
is only an as8ignee\pencfen/e lite, and if an actual conveyance
had been made it would not have been good against the peti-
tioners. Norton v. Birge, 35 Conn., 250 ; Story Eq. PI.,
§156; 1 Story Eq. Jur., §406; 2 id., §908. Besides all
this Vail is clearly chargeable with knowledge of the facts
and with an intention and attempt to take a fraudulent ad-
vantage of the petitioners. Tliis consideration alone is
sufficient to destroy all equitable claim in his favor.

3. But it is insisted tliat if Vail has no equitable right
against the relief sought by the petitioners, yet Storrs Broth-
ers, the other respondents, have such an equitable right. But

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Bank of North America v, Norwich Savings Society.

Storrs Brothers are only assignees of the contract of the
Savings Bank with Vail and have therefore no better rights
than Vail. No matter how many times the contract is as-
signed, no one interested can get any other right than the
Savings Bank had or acquire any new equity against ns.
The $15,000 paid by Storrs Brothers to Vail upon the assign-
ment of tlie contract c^mnot affect as. It" can make no diffec.
ence to us whether it was $1,000 or $50,000. But the $16,000
was in fact the money which Vail was to pay to the Savings
Bank upon redemption, and it was paid by Storrs Brothers to
Vail as their agent for that purpose. Being now in Vail's
hands it is in law in their own hands, and is to be regarded
as if it had never been advanced at all. It is not alleged in
their answer, nor found as a fact by the court, that Vail is
insolvent. They ai-e therefore not only entitled to a repay-
ment of the money by him, but can in fact recover it, so that
their payment of the $15,000 is to be laid out of tlie case.
Thus they would be subjected to no injury, even if they stood
upon independent ground and had an independent equity to
be considered. But they in fact stand only in the shoes of
Vail, and every consideration that is applicable to him is ap-
plicable to them. The fact of Vail's concealment of facts
from them can not affect us. Whatever may have been his
fraud toward them, their equity against our right to redeem
is not made any stronger by it.

Hovey and Haheyj for the respondents.
First. Upon the facts found the prayer of the petition
ought not to be granted.

1. The Norwich Savings Society has obtained a decree of
foreclosure before a coui't of competent jurisdiction, upon reg-
ular and legal process, in conformity to the laws of this state,
where the mortgaged premises are situated. Notice of the
pendency of the suit was given to the Bank of North America,
in pursuance of the provisions of the statute which provides
for the service of petitions in equity upon non-residents.
Gen. Statutes, tit. 11, sec. 127.

2. By the decree the title of the Norwich Savings Society


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OCTOBER TERM, 1870. 456

Bank of North America v, Norwich Savings Society.

to the mortgaged premises became absolute. The title to
immovable property is governed by the lex rei sitce. Story
Confl. of Laws, (6th ed.,) §§ 535, 592, 592a, 698, and cases

8. The Norwich Savings Society having obtained an ab-
solute title by virtue of tlie decree and failure of all parties
to redeem, could sell and convey the property, and a bond fide
purchaser from it without notice of any equity in any of the
parties to have the decree opened, could not be disturbed in
his title. 2 White & Tud. Lead. Cas. in Eq., 49, 52, 61, 69,
82, 85 ; Weiss v. Ailing^ 34 Conn., 64 ; Youst v. Martin^ 8
Serg. & R., 423 ; Bellas v. M'CaHy, 10 Watts, 13 ; 1 Story
Eq. Jur., §§ 64<j, 108, 409, 434. It is found that both the
Society and Vail supposed that the Bank of North America
had received the notice which was ordered, and that it would
redeem if it desired to ; and that Vail from his interview
with the president of the bank on the 31st of July, 1869, be-
lieved that the bank was fully aware of tlie foreclosure pro-
ceedings, and relied upon one Rogers, with whom it had made
a contract to sell its interest in the property, to protect and
redeem the mortgage. The agi'eement of August 16th, 1869,
between the Society and Vail, was therefore entered into in
entire good faith. Storrs Brothers have acquired an interest
in the property, in good faith, for a valuable consideration
paid, without notice of any equity outstanding in the peti-
tioners, and relying upon the record title. Tliey could have
no liigher equity if the Society had made them a mortgage
to secure a loan^of $15,000 on the property, and it is well
settled that a mortgagee is a purchaser. 2 White & Tud.
Lead. Cas. in Eq., 82, 85. And they are not affected by the
notice which Vail possessed at the time they actually advanced
the money. Ncitlier is their title affected by the pendency
of this suit at the time against the Norwich Savings Society,
The person from whom they derive their interest was not
then a party to it. Norton v. Birge^ 35 Conn., 250. A lis
pendens cannot operate as notice to parties who reside beyond
the jurisdiction of the court in which the suit is brought, even
vhen the property in question lies within the jurisdiction.

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Bank of North America v. Norwich Sayings Societj.

2 Wliite & Tud. Lead. Cas. in Eq., 175 ; Shdton v. JoAiwcm,
4 Sneed, 672 ; 1 Story Eq. Jur., § 405 ; Adams' Eq., 157.

4. The Savings Society ought to be permitted to execute
a conveyance of its interest in the property according to its
agreement. It is found that Vail has fully performed the
agreement on his part, and that, as against the Savings So-
ciety, Storrs Brothers are entitled to a conveyance, and that
the Society would have conveyed and would now convey to
them, except as restrained by injunction. Vail had made a
payment on the purchase, and had made other expenditures
in pursuance of the agreement, prior to any notice of tlie
claim of the petitioners. The Society is not in fault, and
ought not to be subjected to the chances of litigation with
Vail or Storrs Brothers in regard to the agreement.

5. If the prayer of the petitioners is granted, and the
decree in favor of the Savings Society is opened, and the case
brought forward on the docket for a new trial, the rights of
Vail and Storrs Brothers cannot be protected. They are not
parties to that suit. The petitioners must bring a petition
making proper parties, where the rights of all can be pro-
tected. The present petition contains no admission of tiie
rights or incumbrances of Vail or Storrs Brothers, and makes
no offer to redeem them. It is insisted, therefore, that tiie
petition should be dismissed.

Second. If the court should be of opinion that the peti-
tioners are entitled to redeem, and that it can and will upon
this petition, and upon the answers and the facts found, settle
the terms upon which such redemption shall be made, it is
insisted that such redemption should only be allowed upon
the condition of re-payment to Vail and Storrs Brothers of
all siuns which they have respectively advanced or expended
upon the property in consequence of the agreement before
notice of the claim of the petitioners.

1. As before shown, the contract between the Savings
Society and Vail was entered into in entire good faith, and
without knowledge or suspicion that the Bank of North Amer-
ica had not received its notice. The first knowledge they had
of the claim was by this petition. Neither of the parties

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OCTOBER TERM, 1870. 457

Bank of North America v. Norwich Sayings Society.

were in fault in respect to the notice. Both were equally
innocent. The Savings Society had done all that the law
required of it. The laches and neglect of the bank to redeem
the mortgage or pay up the interest, so long in arrears, has
led to its misfortune. It can only have equity by doing equity.
Innocent third persons must not suffer by its neglect.

2. Storrs Brothers have invested $15,000 in this property.
It is found that the entire transaction was in good faith. They
relied upon the record evidence of the title, which was cor-
rectly submitted to them. The agreement originally was for
a loan on the property, which they consented to make as an
accommodation to Mr. Vail, hoping that he would thereby be
enabled to get the works again in motion. When they so
agreed Vail had no suspicion that his title to the property
was not perfect. Finally, when they paid the $15,000 they
took a transfer of VaiFs contract.with the Society, and became
entitled to a conveyance in fee, subject to his right to a re-
conveyance upon the payment of that sum and interest within
six months. They thus became purchasers for value. It is
distinctly found that they had no knowledge of the claim of
the bank or of the pendency of this petition at that time,
" but supposed that the title of the Savings Society and Vail
was perfect and free from incumbrance, as appeared of record.''
Their equity is strong, and superior to that of the petitioners.
The knowledge which Vail possessed at the time he conveyed
to them cannot affect their equity. 2 White & Tud. Lead.
Cas. in Eq., 83, 84, 85 ; McSorley v. Larissa, 100 Mass., 270.

8. Though payment in full is necessary to constitute a
good bar by plea, yet it is generally held that payment of part
of the purchase money before notice, although not sufficient
to invest the vendee with the character of a bond fide pur-
chaser as it regards the estate purchased, gives him a right
to invoke the aid of the equitable principle that he who would
claim equity must do it, and require reimbursement from the
rightful owner as the condition of giving way to his title. 2
White & Tud. licad. Oas. in Eq., 102, 116, 117, 119. In
this case the title of the petitioners in the premises has be-
come barred both at law and in equity. They come into a

Vol. XXXVII. — 58

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Bank of North America v. Norwich Saviiigs Society.

<50urt of equity asking relief. It is at least optional with the
court to grant or withhold it, even if the rights of third par-
ties had not intervened. Where they have intervened, as in
this case, those rights must be protected. Those who would
have equity must do equity.

4. The petitioners allege that the Value of the property
is greater than, the whole sum due the Savings Society, and
the amount of their own incumbrimce, and it is found that its
value is greater than these amounts and the amount advanced
by Storrs Brothers. If the prayer of the petition is granted
the petitioners will take the whole for their incumbrance and
that of the Savings Society, to the prejudice of Vail and
Storrs Brothers, who will lose all, while the petitioners will
get more than their debt.

Seymour, J. This is a bill in equity to open the foreclosure
of a mortgage. The Norwich Savings Society held the first
mortgage upon a manufacturing establishment in Glastonbury.
The Bank of North America, the present petitioner, held a
second mortgage and had foreclosed the mortgagors and all
subsequent parties. Then the Savings Society obtained the
decree of foreclosure against the Bank of North America,
which decree is now sought to be opened. In the petition on
which thil3 last mentioned foreclosure was obtained an order
of notice was duly made and duly complied with, ordering
notice to the respondents in that case (the petitioners in this)
by letter through the post office. Tlie letter was not received,
and the Bank of North America had no knowledge of the
proceedings against them or of the decree until a few days
after the time limited for them to redeem had expired. They
thereupon immediately filed the present petition to open the

Upon these facts the case is a clear one. Tlie £Eiiliu*e of the
notice to reach the Bank of North America is an accident
which is to be relieved against upon the familiar principlea
of a Qoxxrt of equity, unless there are special reasons against
such relief being granted. The respondents claim that such
special reasons exist in this case. Shortly before the time

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OCTOBER TEEM, 1870. 469

Bank of North America r. Norwich Sayings Sodaty.

limited in the decree for redemption one Tliomas J. Vail en-
tered into a contract with the Savings Society to purchase
from it its right, title and interest in the mortgaged premises,
provided the redemption should not take place. No redemp-
tion being made Mr. Vail paid $500 on the contract. No
further execution of the contract occurred before the bringing
of the present petition and the granting of a temporary in-
junction against completing the agreement. The pending
petition was brought October 17th, 1869. On the 22d of
December, 1869, Mr. Vail entered into an agreement with
Storrs Brothers of New York, transferring to tliem all his
rights under the contract between himself and the Savings
Society as security for $15,000 lent to him by Storrs Brotheis
on the faith of the transfer as security, Storrs Brothers were
ignorant of the pendency of the petition and injunction, and
supposed that the title of Vail and the Savings Society was
perfect. Mr. Vail knew of the petition and injunction soon
after they were brought, but did not communicate his knowl-
edge to Storrs Brothers, and he had procured of the town
clerk of Glastonbury an abstract of the title which showed
the property to be freed by the foreclosure from its incum-
brances ; which abstract was examined by Storrs Brothers
before they made their advance of money to Mr. Vail. The
debt of the Savings Society is about $15,000 ; the value of
the premises about $75,000. Mr. Vail had been connected
with the property for many years and was. acquainted with
the claim of the present petitioners upon it, and he knew
that the value of the property exceeded the amount of both
mortgages. As late as July 31st, 1869, he had a conversation
with the president of the Bank of North America, in which
the president remarked that he supposed the money due the
savings bank would have to be paid soon ; to which Mr. Vail
assented. Upon these &LctB we think it clear that Mr. VaQ
is in no better condition to resist the opening of the foreclos-
ure than the savings bank is. He had reason to know that

Online LibraryConnecticut. Supreme Court of ErrorsConnecticut reports: containing cases argued and determined in ..., Volume 37 → online text (page 41 of 61)