Wright v. Douglass — 2 N.Y. 373

Majority

p. 373

Wright vs. Douglass.

Headnote

A sheriff’s deed of lands sold under judgment and execution, executed after the time to redeem expires, relates back to that period.

And where, before any deed is given in pursuance of the sale, another person acquires all the interest of the purchaser, and procures the sheriff to execute and deliver a deed, the title passes thereby, although the purchaser be the grantee in the deed and do not consent to the execution and delivery thereof;

A foreign corporation recovered judgment against its debtor, and purchased his real estate at the sale under the execution. About five years afterwards, no sheriff’s deed having been taken in pursuance of the sale, “ all the estate” of the corporation in the premises was attached at the suit of the plaintiff, in pursuance of the statute relating to suits against foreign corporations, and was s»ld under the judgment obtained in the attachment suit, the plaintiff becoming the purchaser, and subsequently procuring the sheriff’s deed in pursuance of that sale. Afterwards the plaintiff obtained the sheriff's deed under the sale to the corporation, the deed running to the corporation as grantee. Held, that the plaintiff had acquired title under the sale to the corporation, and was entitled to recover in ejectment against the defendant who held his title from a person to whom the debtor of the corporation had conveyed the premises after the time for him to redeem had expired, but before the commencement of the attachment suit; it not appearing that at the time of the conveyance last mentioned the corporation intended to relinquish any of its rights acquired by the sheriff's sale, or that such conveyance was made with the concurrence of, or for the benefit of, the corporation.

And, held farther, that after the interest of the corporation became bound by tho attachment of the plaintiff, the coiporation could not relinquish the rights it had acquired by the sheriff’s sale and certificate, so as to defeat the plaintiff’s title.

Wright v. Douglass, 3 Barb. 554 , reversed.

Ejectment for a lot of land in the town of Constantia, Oswego county, tried at the Oswego circuit, before Gridley, circuit judge, in December, 1846. To show title in himself, the plaintiff proved the T owanda Bank to have been a corporation duly created according to the laws of Pennsylvania, where its business was transacted. (2.) A judgment in favor of the bank against one Dennis, under whom both parties claimed title, docketed ir Oct. 1837, for $2098; execution and sale to the Towanda Bank on the 6th of June, 1838, of the premises in question ; a certificate of sale, &c. duly filed in the clerk’s office of said county on' the 22d of June, 1838. (3.) A deed from the sheriff to the bank.

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dated 16th of December, 1845, acknowledged and recorded (4.) An attachment in favor of the plaintiff against said bank duly issued under the statute in relation to suits against foreign corporations, tested 1st of May, 1843; returnable the first Monday of July following; with the sheriff’s return stating that he had attached the premises in question; filed in the supreme court clerk’s office, on the 15th of July, 1843. (5.) A judgment in the supreme court in the attachment suit in favor of the plaintiff against the bank, docketed 18th of November, 1843, for $1851,-69; execution on said judgment tested 26th of December, endorsed as received 30th of December, 1843; sale of the premises in question on' the 24th of February, 1844, to the plaintiff, for $1924; a certificate thereof; and a deed from the sheriff to the plaintiff of the premises on the 30th of August, 1845, recorded 29th of September, 1845. (6.) A deed tripartite between Amasa Dana of the first part and the Towanda Bank of the second part, by C. L. Wood, their president, to the defendant Douglass, cashier of the Bank of Ithaca, dated 11th of August, 1843, in which Dana was described as trustee for the Towanda Bank; which, after reciting that the premises had been conveyed to said Dana, as the trustee, and for the use of the party of the second part, and that a mortgage, executed by Dennis to one McVicltar for $2200, had been also assigned to Dana, and was held as security to protect the title, and the said bank directing the said bond and mortgage thereon to be conveyed, &c. to the grantee, proceeded to convey, in consideration of $2000 received by the bank, to said Douglass the premises in question, with covenant of warranty. It was admitted that the moneys paid for said mortgage were advanced by the bank. It also appeared that the deed last aforesaid was executed to secure $1700 of debt due from the Towanda Bank to the Ithaca Bank, and that the Ithaca Bank was to account for the proceeds of the property after paying that debt, interest and charges.

It was further proved that Dana was the attorney for the Towanda Bank, and procured the judgment above mentioned against Dennis, upon which the land in question had been sold; that on the 28th of June, 1843, said Dana, as attorney for the Ithaca Bank, presented a petition to a judge, &c. for an attach ■

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ment against the Towanda Bank, which attachment was served on these premises, and that Dana went with the sheriff for that purpose: that these proceedings were subsequently abandoned by the Ithaca Bank. The Towanda Bank stopped payment the first of January, 1842, having a large amount of notes in circulation.

By the deposition of Mr. Ward it appeared that he was elected president of the Towanda Bank in May, 1841; that Dana informed him that the bank had an interest in the property upon which Dennis then resided. He did not say in what form the interest existed ; that his partner, Gosman, afterwards sent him a sheriff’s certificate of the sale of the property; that he understood from Gosman or Dana that the property embraced in the certificate was the interest of the Towanda Bank. Gos-man, in June 1841, wrote for money to make a payment on the McVickar mortgage—various sums were remitted to Gosman to apply on the mortgage down to the 5th of November, 1841; after those payments not much, if anything, was due.

The defendant introduced a deed from Dennis to Amasa Dana, in consideration of $1, dated 4th of December, 1839, proved 2d of August, 1842, and recorded 30th of October, 1845; a mortgage from said Dennis to McVickar for $2285, and interest, recorded 28th of December, 1834; and an assignment of said mortgage from McVickar to Dana, dated 11th of December, 1841.

The judge charged the jury that, upon the evidence in the cáse upon both sides, the plaintiff was not entitled to recover; to which the plaintiff excepted. The supreme court affirmed the decision, and gave judgment for the defendant. (See Barb, Sup. C. Rep. 554.) The plaintiff appealed to this court.

J. A. Collier, for appellant.

B. D. Noxon, for respondent.

In this suit the rights of the parties are to be determined by the condition of the title of the Towanda Bank to the premises in question, at the time when the attach

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ment was served, upon which the judgment in favor of the plaintiff was recovered.

The land had been sold under a judgment of the bank, upon the 6th of June, 1838, and bid in for the corporation. The time for redemption expired on the 6th of September, 1839. By the sale, and lapse of time, the judgment debtor was divested of all his interest in the premises—I say all his interest, because the legal title, which nominally remained with him, was subject to be withdrawn at any moment, with or without his assent, at the instance of the vendee. The debtor had nothing to part with, and could convey nothing, which the deed of the sheriff, to which the bank was absolutely entitled, would not overreach and annul. It was this interest of the Towanda Bank which was seized upon the plaintiff’s attachment, sold upon his judgment against the former, and conveyed by the sheriff to the plaintiff, m February, 1844.

The attachment authorized by the 16th section of the statute, directs the sheriff to attach “ all the estate, real and personal, of such corporationand by the second subdivision of the 27 th section, he is directed to “sell so much of the attachea property, real a.nd personal, as may be necessary,” &c. (2 R. S. 553, § 16, 3d ed.; 555, § 27, 2d sub.; 1 id. 750, § 10.) The statute, in terms, applies to an equitable, as well as a legal, interest in lands; to any es:ate, in a word, which may be denominated property.

If nothing further had been proved, there can be no doubt that the plaintiff could have claimed the execution of a deed by the sheriff, as evidence of the previous sale to the Towanda Bank. The right of the latter to demand a deed of the officer, was incident to their interest in the land. The sale and purchase of that interest by the plaintiff under his judgment, was at least equivalent to an assignment of the sheriff’s certificate, for a valuable consideration. Equity would compel the execution of a deed under such circumstances, and if given voluntarily by the sheriff it is equally effectual as though its execution had been compelled by a court of chancery. It is immaterial whether it was delivered to the Towanda Bank or not. It is sufficient if it was delivered to, or for the benefi: of the party, who had le

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gaily acquired their whole title to the premises embraced in the certificate. As the bank could not rightfully prevent such delivery, their assent was not necessary to its validity.

If this view is correct, the plaintiff, by the proceeding upon the attachment together with the deed from the sheriff, was invested with a legal title to the premises which by relation took effect from the time of the sale upon the judgment of the bank, as against Dennis, and against his subsequent grantees. (3 Cowen’s R. 75; 15 John. 309 .) If this had been all the evidence, the plaintiff would have been entitled to a verdict. The defendant, however, introduced a deed dated the 4th of December, 1839, from Dennis, the original judgment debtor, and owner of the premises, to Dana. There is no evidence when this deed was delivered. If executed at its date, it must have been given after the right of redemption expired, and before the attachment of the plaintiff was levied upon the land in question. Its effect upon the rights of the parties presents the main question in the cause. It was produced by the defendant; its contents are not before us, and as the party making it evidence has not deemed it important to incorporate it in the bill of exceptions, no presumptions in his favor are to be indulged. , I assume that it was a quit-claim, of all the right and title of the grantor to the grantee, for the nominal consideration of one dollar. If this was the character of the conveyance, Dana succeeded to the rights of Dennis, and nothing more. He was the attorney of the bank, in obtaining the judgment against his vendor and purchased not only with constructive, but actual notice of the rights of his clients. (2 R. S. 370, § 42.) He stood in the place of Dennis, and his rights were overreached and avoided by the title acquired by the plaintiff under the bank judgment. The plaintiff is, therefore, not under the necessity of insisting that Dana received this conveyance as the trustee of the Tovvanda Bank. He stands upon a paramount legal title.

There is indeed not a shadow of evidence, tending to prove that the bank relinquished any right acquired under the sale upon their judgment, as a consideration of the conveyance to Dana; or that they authorized such conveyance or had any

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knowledge of it, until about the 15th of August, 1843, long after the corporation became insolvent, and when the arrangement for securing the Ithaca Bank was completed, and the tripartite deed was executed. On the contrary, it appears by the deposition of Ward, the treasurer of the corporation, that in 18-11, eighteen months after the date of the deed from Dennis, Dana, the grantee, informed him that the Towanda Bank had an interest in the property ; and that his law partner subsequently sent him the certificate, which it is now insisted was annulled by that conveyance, as the evidence of that interest. It appears also that moneys were sent from time to time by the bank to the partner of Dana, to apply upon the McVic-kar mortgage, which was a lien upon the premises. The presiden) says, that as “bethought, after these payments not much if any thing was due.” This money was sent to discharge the mortgage, and yet we find Dana, on the 11th December, 1841, procuring an absolute assignment to himself without naming the bank, and without any knowledge by its officers of the transaction. No reason can be assigned why the bank should resort to the circuitous mode of obtaining the formal title, through a trustee, by a conveyance from the debtor, when a better, at all events an earlier title, could have been acquired by merely demanding of the sheriff the deed to which they were entitled. Again, if the deed to Dana was obtained by the procurement of the Towanda Bank, upon a consideration furnished by them,, the act was a fraud upon its stockholders, and subsequent creditors. No trust would result in favor of the corporation, nor in favor of creditors, except those who were such at the time of the conveyance. (I R. S. 728, §§ 51, 52; 4 Denio, 442 .) A fraud of this kind is not to be presumed. It is far more probable that Dana purchased the nominal interest of Dennis on his own account, or for the benefit of the Ithaca Bank, for which he was attorney, with the design of subsequently negotiating with the Towanda Bank for its interest in the premises. When the deed was delivered to Dana, as we have said, does not appear affirmatively ; it was not proved until August, 1842 six months after the Towanda Bank had stopped payment. In July, 1843, the Ithaca Bank attached the premises as the prop

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erty of the foreign corporation, the process being served under the supervision of Dana, who went with the sheriff to the premises. No information of this proceeding was given to the corporation, for whom it is supposed he was trustee, nor of the suit instituted by the plaintiff. Indeed the whole conduct of Mr. Dana is inconsistent with the idea that he supposed himself to sustain a fiduciary relation to this corporation. The case is destitute of all evidence to sustain a resulting trust in favor of creditors. And the defendant, who claims under the bank, as purchaser, is not at liberty to establish his own title by insisting upon a trust in favour of his grantor, void by statute and presumptively fraudulent as against creditors. The defendant makes no such claim; and as I think, it is not necessary to be established by the plaintiff.

An express trust, the defendants insist, has not been proved: and under the evidence it only remains to consider the effect of the conveyance from Dennis to Dana, upon the assumption that it was taken without the assent or knowledge of the Towanda Bank. The latter under such circumstances were at liberty to perfect their title by obtaining a deed of the sheriff, or they might turn Dana into a trustee for their benefit, and compel a conveyance from him in equity. In other words, a trust would result in their favor at their election, and not otherwise. If the tripartite deed is deemed evidence of such an election, the answer is, that the whole interest, legal and equitable, of the bank were bound by the attachment of the plaintiff which was levied long before its execution. Subsequent to which, the bank could not by then determining their election, give to a creditor at large an interest in this property, in derogation of the right, of their attaching creditors.

The judgment must be reversed and a new trial granted.

Judgment reversed

Cases cited

Wright v. Douglass 3 Barb. 554 N.Y. Gen. Term 1848-07-04 p. 373