Claflin v. Godfrey

38 Mass. 1
CourtMassachusetts Supreme Judicial Court
DecidedOctober 8, 1838
StatusPublished
Cited by3 cases

This text of 38 Mass. 1 (Claflin v. Godfrey) is published on Counsel Stack Legal Research, covering Massachusetts Supreme Judicial Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Claflin v. Godfrey, 38 Mass. 1 (Mass. 1838).

Opinions

The opinion of the Court (Shaw C. J. and Dewey J. dissenting) , was delivered by

Morton J.

We have bestowed unusual labor and care upon this case, and with our best efforts have found some difficulty in understanding the very complicated state of the facts, and stif more, in applying to them the principles of law by which the rights of the parties should be determined. We have the more carefully investigated the subject, because there has been from the beginning a difference of opinion among the members of the Court. And I regret to add, that with our most earnest endeavours we have not been able to unite in the result which I am now about to announce.

The action is assumpsit for money had and received by the defendant to the plaintiff’s use, and for money paid by the plaintiff for the defendant’s benefit. This is often called an equitable action and is less restricted and fettered by technica. rules and formalities than any other form of action. It aims at the abstract justice of the case, and looks solely to the inquiry, whether the defendant holds money, which ex cequo et bono belongs to the plaintiff. It was encouraged and, to a great extent, brought into use by that great and just judge, Lord Mansfield, and from his day to the present, has been constantly resorted to in all cases coming within its broad principles. It approaches hearer to a bill in equity than any other common law action ; and indeed has many of the advantages, without the artificial formalities and dilatory proceedings, of a chancery suit. Moses v. Macferlan, 2 Burr. 1012 ; Straton v. Rastall, 2 T. R. 370 ; Roland v. Hall, 1 Hodges, 111 ; S. C. 1 Scott, 539 ; Parry v. Roberts, 3 Adolph. & Ellis, 118 ; S. C. 5 Nev. & Manning, 663 ; 1 Leigh’s N. P. 44.

The plaintiff’s claim grows out of a transaction in which all the parties concerned were involved in a series of gross mistakes and errors, which brought upon them great pecuniary suffering. The object of the present suit is to determine, as far as practicable, upon whom the losses shall fall, and how .'hey shall be apportioned. The mistakes were accidental, and [7]*7tilt re is no reason to suppose that any misrepresentation or deception was attempted or practised by either party.

We have therefore to determine who of the innocent sufferers shall sustain a particular loss growing out of the misfortunes of a joint speculation.

It will be impossible to discuss this question without adverting to and examining the claims of a person who is not a party to the suit, who has not been heard and who therefore cannot be bound by our judgment. Lee Claflin has upon the docket an action founded upon the same transaction, and which probably will depend upon the same facts and principles as the case at bar. We cannot therefore proceed in the investigation without canvassing the claims, liabilities and rights of all the persons engaged in the disastrous speculation.

Early in the year 1833, the right in equity of redeeming certain real estate in Milford was advertised for sale on execution. John Claflin, the plaintiff, Lee Claflin, and William Godfrey, the defendant, agreed to become the joint purchasers, provided they could obtain it for a price which they had agreed upon. Accordingly, on February 25, 1833, they bid off the equity for the sum of two thousand dollars, which was paid equally by the three, and took a joint deed of the whole. At the auction the officer represented, that the incumbrances to which the estate was subject, consisted of two mortgages to D. and R. Waldo, one originally given to John Farnum, and one to W. Whitney, upon which less than two thousand dollars were due. But it was afterwards discovered that, instead of two thousand, over ten thousand dollars were due upon the Whitney mortgage. This amount, with the Waldo mortgages, greatly exceeded the value of the estate, so that it became inexpedient to redeem it, and the purchasers lost the whole consideration paid for the equity of redemption. There can be no doubt that, by the principles of law and equity, this loss must fall equally upon the parties. But this was only the beginning of the errors and losses, into which this unfortunate transaction led them.

In 1828, Stephen R. Parkhurst & Co., who were the owners of the real estate aforesaid, mortgaged it to John Farnum to secure the payment of $4500. Farnum assigned [8]*8the mortgage to John Claflin the plaintiff, to secure him lor his liability to Farnum as the surety of Parkhurst & Co. Afterwards John Claflin, having been relieved from his surety-ship, at the joint request of Godfrey and Parkhurst & Co., and without receiving any consideration from either, assigned the mortgage to Godfrey. This assignment was procured by Parkhurst & Co. to secure Godfrey for his liability for them tc the Hendon bank, on a note of $4000. Godfrey agiin assigned the mortgage to the bank as collateral security for the above note, which he had signed as surety.

In this state was this mortgage, when the Claflins and God frey agreed to purchase the equity of redemption. It was a part of their agreement, that this mortgage should be relieved from the claim of the Hendon bank by the payment of the note for which it was holden as collateral security ; and that the assignment to the bank, which never had been recorded, should be cancelled, and that Godfrey, who would thus be restored to his rights as holder of the mortgage, should convey to each of the Claflins one third of it, so that the three should become equally interested in it.

In pursuance of this agreement, “on the 17th of June, 1833, the Claflins each paid to Godfrey one third of the amount due ” to the bank, and the whole being paid the note was taken up and delivered to Godfrey, and the assignment to the bank cancelled. The mortgage having, as the parties supposed, revested in Godfrey, he made an assignment of two thirds of it to the Claflins, thereby vesting in each of the three an equal interest in the mortgage.

The payment to the bank was made, in the first instance, by three equal notes, for the amount, given jointly and severally by the three parties. When these notes became due, each party paid one of them. So that the payment is not to be deemed a joint act of the three, but a several payment by each, of one third of the amount. And the three notes should be considered as the several notes of the parties, two, in each case, being sureties for the other.

Soon after this transaction, it was ascertained, and decided by this Court, in a bill in equity between Whitney and their assignees, that the payment to Farnum of the debt which the [9]*9mortgage was originally made to secure, operated in law as a discharge of the mortgage, which thereby became functus officio. So that all the subsequent formal transfers were inoperative, and passed nothing.

The conveyance by Godfrey to the Claflins having entirely failed, it would seem that they ought to recover back the consideration which they paid. They parted with their money, fc r what all parties, at the time, supposed to exist and have value. But it proved to be valueless ; to be, in fact, a nonentity. Godfrey parted with nothing of any value. He re ceived the money of the Claflins, and the plainest principles of justice require that he should restore that which he received without having given any thing in return. Fowler v. Sheaver, 7 Mass. R. 31 ; Bond v. Hays,

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Bluebook (online)
38 Mass. 1, Counsel Stack Legal Research, https://law.counselstack.com/opinion/claflin-v-godfrey-mass-1838.