Summary
In White, an uncle conveyed property to his nephew by quitclaim deed while the property was held by the town under a tax collector's deed.
Summary of this case from Fadili v. Deutsche Bank Nat'l Trust Co.Opinion
No. 82-490
Decided February 3, 1984
1. Statutes — Construction and Application — Effective Date Where the effective date of the statute setting forth the requirements for a quitclaim deed and prescribing its effect predated the execution and delivery of a deed, the statute governed its provisions. RSA 477:28.
2. Deeds and Conveyances — Construction — Subsequent Circumstances In an action to quiet title, where deceased grantor had purported to convey to grantee by a deed dated March 30, 1962, with quitclaim covenants, approximately ten acres of land, the title to which at that time was held by the town under a tax collector's deed, and where the deceased purchased the property from the town on May 3, 1963, the supreme court agreed with the master's ruling that the decedent's after-acquired title passed to the grantee pursuant to the doctrine of estoppel by deed, given the presence of the covenants enumerated in the statute setting forth the requirements for a quitclaim deed and prescribing its effect. RSA 477:28.
3. Deeds and Conveyances — Construction — Parol Evidence A deed absolute on its face may be proven by parol evidence to have been intended by the parties to operate as security for a debt.
4. Deeds and Conveyances — Construction — Subsequent Circumstances The intentions of the parties at the time of the conveyance are determinative, but those intentions may be inferred from the situation of the parties and their actions after the contract was executed.
5. Contracts — Construction — Extrinsic Evidence Where the trial court must look to extrinsic evidence to deduce the intentions of the parties, the supreme court will adopt the trial court's interpretation of the contract if supported by sufficient evidence.
6. Deeds and Conveyances — Construction — Surrounding Circumstances In an action to quiet title, where deceased grantor had purported to convey to grantee, his nephew, by a deed dated March 30, 1962, approximately ten acres of land, the title to which at that time was held by the town under a tax collector's deed, and where at the time of the quitclaim conveyance to the grantee, there was an outstanding mortgage on the property running to a third party, which was assigned to the grantee as part of the transaction, and where there was evidence that shortly before the deed was executed, the grantee had lent the deceased $1,000 to pay back taxes, and further evidence indicating that the grantee had lent the decedent money over a period of years, and where the deceased purchased the property from the town on May 3, 1963 and lived there until his death and personally paid whatever taxes were paid on the property, with an undetermined amount of the money being furnished by the grantee, the supreme court concluded that the evidence supported the master's finding that the deed was given to the grantee as security for a debt; the factors pointing to this conclusion being the impecunious state of the decedent at the time of the transfer, his close relationship to the grantee and the inadequacy of the consideration, as well as the fact that the decedent was permitted to remain in possession of the real estate without accounting for rent.
7. Deeds and Conveyances — Construction — Surrounding Circumstances In an action to quiet title, where the master had found that deceased grantor had made a quitclaim conveyance to grantee, his nephew, as security for a debt, the supreme court held that the quitclaim deed should be deemed a mortgage, ab initio, running from the decedent to the grantee, with the decedent having an equitable right of redemption.
8. Quieting Title — Evidence — Particular Cases In an action to quiet title, where the master had found that deceased grantor had made a quitclaim conveyance of land to grantee, his nephew, as security for a debt, and where the supreme court found that evidence supported the master's finding that the debt for which the deed originally acted as security was extinguished when the mortgage assigned to the grantee as part of the original transaction was paid and discharged as noted on the mortgage by a notation, the supreme court affirmed the granting of the petition to quiet title in the executor of decedent grantor's estate.
9. Equity — Relief Available — Conveyance of Land In an action to quiet title, since the plaintiff invoked the superior court's equitable power to quiet title, he must also act equitably.
10. Quieting Title — Evidence — Particular Cases In an action to quiet title, where the master had properly found that deceased grantor had made a quitclaim conveyance of land to grantee, his nephew, as security for a debt, and where the evidence supported the master's finding that the debt for which the deed originally acted as security was extinguished when the mortgage assigned to the grantee as part of the original transaction was paid and discharged as noted on the mortgage by a notation, the supreme court affirmed the granting of the petition to quiet title in the executor of decedent grantor's estate; but where the master indicated that the grantee viewed the deed as being security for money lent to the decedent grantor over the course of several years, and further stated that no ruling was made or intended on the grantee's rights to enforce a claim for any amount owed to him by the decedent's estate, the trial court could require, as a condition precedent to its granting the petition to quiet title, that the decedent's estate satisfy any claims made by the grantee against the estate that were properly proven by him to the satisfaction of the court.
Edward W. Richards, of Nashua, by brief for the plaintiffs.
Arthur O. Gormley, Jr., of Nashua, by brief for the defendant.
This action to quiet title presents two questions: first, whether a quitclaim deed of specifically described property is effective, by virtue of the doctrine of estoppel by deed, to convey after-acquired title; and second, whether the quitclaim deed was security for a debt. The Master (James D. O'Neill, Esq.) answered both questions in the affirmative, and the Superior Court (Flynn, J.) approved his report. We affirm and remand for further findings consistent with this opinion.
The plaintiff Robert R. White is executor under the will of John E. Ford, who died February 6, 1978. Fred H. Ford, Jr., the defendant, is a nephew of the deceased. By deed dated March 30, 1962, the deceased purported to convey to the defendant by specific description, with quitclaim covenants, approximately ten acres of land in the town of Hudson. At that time, title to the land was held by the town under a tax collector's deed.
At the time of the quitclaim conveyance to the defendant, there was an outstanding mortgage on the property running to a third party, which was assigned to the defendant as part of the same transaction. There is evidence which indicates that, shortly before the deed was executed, the defendant had lent the deceased $1,000 to pay back taxes. There is further evidence indicating that the defendant had lent the decedent money over a period of years. There is a notation on the mortgage instrument that the mortgage note was paid in full by the deceased on January 9, 1963.
On May 3, 1963, the deceased purchased the property from the town. Until his death, the deceased lived there and personally paid whatever taxes were paid on the property, with an undetermined amount of the money being furnished by the defendant.
The deed complies in its form with the statutory requirements for a quitclaim deed, RSA 477:28, and accordingly has the "force and effect of a deed in fee simple" containing covenants:
"that at the time of the delivery of such deed the premises were free from all incumbrances made by the grantor, except as stated, and that he [the grantor] will, and his heirs, executors and administrators shall, warrant and defend the same to the grantee and his heirs, successors and assigns forever against the lawful claims and demands of all persons claiming by, through or under the grantor, but against none other."
Id. The statute's effective date (July 31, 1951) predates the execution and delivery of this deed, and, therefore, governs its provisions.
In the presence of such covenants, the court agrees that the decedent's after-acquired title passed to the defendant pursuant to the doctrine of estoppel by deed. Fletcher v. Chamberlin, 61 N.H. 438, 446 (1881); Kimball v. Blaisdell, 5 N.H. 533 (1837).
[3-5] Having ruled that title passed to the defendant, the master ruled further that the decedent's quitclaim deed was given to the defendant as security for a debt. A deed absolute on its face may be proven by parol evidence to have been intended by the parties to operate as security for a debt. Page v. Foster, 7 N.H. 392, 394 (1835); see generally 9 THOMPSON ON REAL PROPERTY 4733. The intentions of the parties at the time of the conveyance are determinative, see Commercial Union Assurance Co. v. Brown Co., 120 N.H. 620, 623, 419 A.2d 1111, 1113 (1980), but those intentions may be inferred from the situation of the parties and their actions after the contract was executed. Auclair v. Bancroft, 121 N.H. 393, 395, 430 A.2d 169, 171 (1981); Summit Elec., Inc. v. Pepin Bros. Const. Inc., 121 N.H. 203, 206, 427 A.2d 505, 507 (1981). Where, as here, the trial court must look to extrinsic evidence to deduce the intentions of the parties, we will adopt the trial court's interpretation of the contract if supported by sufficient evidence. See Baker v. McCarthy, 122 N.H. 171, 175, 443 A.2d 138, 140 (1982); Austin v. Ellis, 119 N.H. 741, 742, 408 A.2d 784, 784 (1979).
Our review of the record compels us to conclude that the evidence does support the finding that the deed was given to the defendant as security for a debt. Factors pointing to this conclusion include the impecunious state of the decedent at the time of the transfer, his close relationship to the defendant and the inadequacy of the consideration, as well as the fact that the decedent was permitted to remain in possession of the real estate without accounting for rent. See Matter of Hemphil, 18 B.R. 38 (Bnkr. Iowa 1982).
[7, 8] The true intention of the parties to the transfer having been found by the master, the quitclaim deed should be deemed a mortgage, ab initio, running from the decedent to the defendant, with the decedent having an equitable right of redemption. The master also found that the debt for which the deed originally acted as security was extinguished when the mortgage assigned to the defendant was paid and discharged as noted on the mortgage by notation dated January 9, 1963. Again, the evidence supports this finding, and therefore, the granting of the petition to quiet title is affirmed.
The master, however, indicated that the defendant viewed the deed as being security for money lent to the decedent over the course of several years. The master went on to state: "No ruling is made nor intended on the defendant's rights to enforce a claim for any amount owed to him by the estate on the security interest established."
[9, 10] It was by virtue of the superior court's equitable powers that the petition to quiet title was granted. Dowd v. Gagnon, 104 N.H. 360, 362, 187 A.2d 63, 65 (1962); RSA 498:5-a. For the plaintiff to invoke the court's equitable power to quiet title, he must also act equitably. Langevin v. Hillsborough County, 114 N.H. 317, 320 A.2d 635 (1974); Fowler v. Taylor, 97 N.H. 294, 297, 86 A.2d 325, 326 (1952); see also, Gosselin v. Archibald, 121 N.H. 1016, 1020, 437 A.2d 302, 306 (1981) ("An equitable remedy should be imposed in situations involving real estate, absent evidence that the remedy is impossible or inequitable"). Consequently, as a condition precedent to the superior court's granting the petition to quiet title, the court may require the plaintiff to satisfy any claims made by the defendant against the estate that are properly proven by him to the satisfaction of the court.
Affirmed and remanded.
SOUTER, J., did not sit.