Gilbert v. Deshon

Headnote

Defendant M., a married woman, executed to defendant D. a deed of her interest in certain real estate, which deed she delivered to her husband to-be delivered to D. to enable him-to borrow money thereon to pay taxes, on certain real estate belonging to the husband, amounting to $700. The-, deed was in fact delivered to D. by the husband as security for the payment of other incumbrances upon the property of the latter as well as the taxes. The amount advanced by D. for the taxes was fully reimbursed to him. Held, that as D. knew when he accepted the deed that it was put into the hands of the husband to be delivered, not as an absolute conveyance, but as collateral security for some liability of the husband which the wife contracted to guarantee, it was his duty to-ascertain what that liability was, and he could not change the conditions, imposed by the grantor, or add to them others agreed upon between him. and the husband, as the latter had no apparent authority except that of special agent, and so his power was limited by the instructions of his. principal.

In such case the rule that an agent having apparent ownership or authority conferred by the act of his principal, and dealing with an innocent third person, shall be deemed, as against the principal, to be the owner or to-have the apparent authority, has no application.

Appeal by defendant Deshon from a judgment of the-'General Term of the Supreme Court in the first judicial department, entered upon an order made March 27, 1885,, which affirmed a judgment against said appeallant and in favor

of defendant, Margaret G. Westerfield,- entered upon a decision of the court on trial at Special Term.

This was an action for partition.

The property was sold, and one-third of the net proceeds, which was claimed by each of said defendants, was paid into court, subject to further order or judgment. It was found, in substance, that Margaret G. Westerfield formerly held the legal title to one-third of the premises. Deshon held a mortgage upon certain real estate owned by Mr. Westerfield, the husband of Margaret. There were unpaid taxes to the amount of $700 upon said real estate and Mrs. Westerfield executed to Deshon a deed of her interest which ■she delivered to her husband to be delivered to Deshon to be used as security to raise money to pay off said taxes. It was claimed by Deshon that the deed was, in fact, delivered to him not only to raise a sufficient sum by using it as collateral security to pay the taxes, but also to pay a mortgage upon the property of Mr. Westerfield prior to that held by Deshon; the latter paid the taxes and the prior mortgage. The court found that Mr. Westerfield had no general authority to act •as his wife’s agent, and no authority to use the deed for any other purpose than as security for the taxes, and that Mrs. Westerfield had no knowledge of the agreement so claimed to have been made by her husband until after the commencement of the action. It was also found that Deshon, by and with the consent of Mrs. Westerfield, received and collected from her share of the rents of said property a sum equal to or exceeding the amount to secure which the deed was executed and delivered by her, and thereupon the trial court found and adjudged that Mrs. Westerfield was entitled to the fund in ■question.

Whatever may be the actual intent of a party to a transaction, if he so acts as to lead a reasonable person to believe that he understands and .assents to its terms, and the other party so believing acts ¡accordingly, the former is estopped from asserting that he did

not so understand and assent; and he is bound by the action, taken. (Peake v. Thomas, 39 Mich. 584 .) An assignee from an agent of the owner takes, as against the owner, when the agent is vested with apparent control, and the assignee is a. bona fide purchaser for value without notice. (Hazewell v. Coursen, 45 N. Y. Super. Ct. 22 ; McNeil v. Tenth Nat. B’k, 46 N. Y. 325 ; Gilbert v. Groff, 28 Hun, 50 , 51; Bodine v. Killeen, 53 N. Y. 93 ; Lavassar v. Washburn, 50 Wis. 200 ; Frank v. Lillienfield, 33 Gratt. 377 ; Spaulding v. Drew, 55 Vt. 253 , 256, 258; 2 Herman on Estop. [ed. 1886) § 1110 Simpson v. B’k of Com., 26 N. Y. W. Dig. 9; Com. B’k v. Kortright, 22 Wend. 348 ; Moore v. Met. Nat. B’k, 55 N. Y. 41 ; Simpson v. Delhoyo, 94 id. 189 ; 44 id. 371; 4 Abb. App. Dec. 253; 9 Paige, 315, 318; 1 Johns. Ch., 212 ; 13 Mass. 105 ; Combes v. Chandler, 33 O. St. 178; Winter v. Belmont, 53 Cal. 428 ; Burton’s App. 93 Penn. St., 214 ; Walker v. Detroit, 47 Mich. 338 ; Clarke v. Roberts, 25 Hun, 86 .) As Deshon having taken the deed to secure the indebtedness to himself, and pursuant to the terms under which he took it, expended large sums of money it was valid. (McLaren v. Percival, 102 N. Y. 675 ; 5 East. R. 83; 19 N. Y. W. Dig. 171.) It is. no answer to the position that-Mrs. Westerfield did not intend her husband should make the ■arrangement he did, or even that he deceived her so long as. Deshon had no part in such deception. (Peake v. Thomas, 39 Mich. 584 ; Western, etc. v. Clinton, 66 N. Y. 326 ; Wheaton v. Fay, 62 id. 275; Howe M. Co. v. Farrington, 82 id. 121, 126, 128; 16 Hun, 591 ; Coleman v. Bean, 1 Abb. App. Dec. 394; Quinn v. Hard, 43 Vt. 375 ; Wendisch v. Klaus, 46 Conn. 433 ; Laidlaw v. Slayback, 23 N. Y. W. Dig. 259 ; 38 Hun, 644 .) The law casts no duty upon a purchaser to ascertain if the trusted executor of a decedent’swill is managing the estate in fraud of creditors or legatees. (Wood’s App. 92 Penn. St., 379 .) The alleged trust was-invalid and could not be proved by oral testimony. (2 R. S. 134 [Edm. ed.] 139, § 6; Sturtevant v. Sturtevant, 20 N. Y. 39 ; Cook v. Barr, 44 id. 156 ; Hurst v. Harper, 14 Hun,

280 ; 1 Greenl. on Ev., § 268; Leman v. Whitely, 4 Russ. 423.) To borrow moneys on credit of the lands conveyed to Deshon was clearly not one of the trusts authorized by law. (Dillaye v. Greenough, 45 N. Y. 444 ; Wheeler v. Reynolds, 66 id. 228, 234, 236; Cook v. Eaton, 16 Barb. 139 ; Taylor v. Baldwin, 10 id. 582.)

The deed in question having been furnished by respondent and received by appellant for a limited úse, and as a security only, will be held to be an equitable mortgage to that extent, and the statute abolishing resulting trusts does not apply. (Carr v. Carr, 52 N. Y. 251 .)