Angermiller v. Ewald

The findings of the court' with respect to the material facts are sustained by the evidence, but I am of opinion that the conclusions of law are not warranted thereby. It appears that on the 5th day of December, 1902, the testator negotiated the purchase of the premises described in the complaint which are situate in the borough of Manhattan, N. Y. The purchase price was $14,500, of which he paid with his own check the sum of $8,500. The title to the premises was by his direction taken in the name of the defendant, who was an intimate friend of his, and who gave a bond and mortgage on the premises to secure the payment of the balance of the purchase price. At this time the plaintiff’s testator was living separate and apart from his wife, but without a divorce or legal separation. The defendant paid no part of the purchase price. The deed was taken in the name of the defendant individually, and not as trustee, and it contained nothing to indicate that it was intended as' other than a conveyance of the premises to the defendant in fee simple absolute, nor was any declaration of trust or other instrument in writing, relating to the question, executed. There is no other evidence tending to show that the defendant took title to the premises in trust or bearing upon the question as to the purpose for which title was vested in him. The case is therefore not only lacking in proof of fraud on the part of the defendant in inducing the conveyance to him, but there is no evidence that even a parol agreement was made between the defendant and the plaintiff’s testator by which this property was to be held in trust for the latter. The case falls directly within the provisions of section 74 of the real property law (Consol. Laws, p. 3589, c. 50, § 94), and not within either of the two exceptions therein made. That section provides as follows :

“A grant of real property for a valuable consideration to one person, the consideration being paid by another, is presumed fraudulent as against the creditors, at the time, of the person paying the consideration, and, unless a fraudulent intent is disproved, a trust results in favor of such creditors, to an extent necessary to satisfy their just demands; but the title vests in the grantee, and no use or trust results from the payment to the person paying the consideration or in his favor, unless the grantee either,

“(1) Takes the same as an absolute conveyance, in his own name, without the consent or knowledge of the person paying the consideration, or,

“(2) In violation of some trust, purchases the property so conveyed with money or property belonging to another.”

The provisions of the statute herein quoted have always been given full force and effect by the courts, except in cases of fraud or mistake, where to do so would be to permit a fraud either actual or constructive to be perpetrated on an innocent party. See Robbins v. Robbins, 89 N. Y. 251 . In Gerard on Titles to Real Estate (4th Ed.) p. 261, the learned author in discussing the provisions of the Revised Statutes from which this section of the real property -law was taken says:

‘‘Where there has been mistake or fraud, parol evidence may be given to establish a trust, although a conveyance may be absolute; but the evidence must

be clear and positive and define the trusts; and except in case of mistake or fraud, no trust in land can be established in this way.”

I am of opinion that this case falls within the doctrine of Fagan v. McDonnell, 115 App. Div. 89 , 100 N. Y. Supp. 641 , affirmed 191 N. Y. 515 , 84 N. E. 1113 , in that there is no evidence of any agreement between the defendant and the plaintiff’s testator showing that the conveyance was made to the defendant for plaintiff’s testator. If it appeared that there was an agreement between them by which the title was to be taken in the name of the defendant, who was to hold it for a particular purpose and for a given time for the plaintiff’s testator, then it may well be that further proof that the latter performed the agreement by paying the purchase price in part and allowing the title to be taken in the name of the defendant, without defendant being given possession or exercising acts of ownership, would be sufficient to warrant a court of equity in impressing a trust upon the fund which is the proceeds of the sale of the land. See Jeremiah v. Pitcher, 26 App. Div. 403 , 49 N. Y. Supp. 788 , affirmed 163 N. Y. 574 , 57 N. E. 1113 ; Ryan v. Dox, 34 N. Y. 307 , 90 Am. Dec. 696 ; Church of St. Stanislaus v. Algemeine Verein, 31 App. Div. 133 , 52 N. Y. Supp. 933 , affirmed 164 N. Y. 606 , 58 N. E. 1086 . In the case at bar, however, there is nothing to show that the plaintiff’s testator entered into possession of the premises in question, which consisted of vacant lots, which distinguishes this case from Jeremiah v. Pitcher and Church of St. Stanislaus v. Algemeine Verein, supra.

The principal difficulty with the plaintiff’s case is that there is not a scintilla of competent evidence tending to show any agreement between the plaintiff’s testator and the defendant with respect to the property. It does appear that the plaintiff’s testator negotiated the purchase of the property, but the inference would be, since title was taken in the name of the defendant, if the facts give rise to any inference that he was acting for the defendant. This is riot overcome by the fact that he paid the cash part of the consideration. He may have owed the defendant the amount, or he may have loaned the money to the defendant. It is doubtful in these circumstances whether his declarations made to the agent of the vendor prior to the execution of the conveyance, in the presence or brought to the attention of the defendant were competent; and it is perfectly clear that like declarations made by him subsequent to the conveyance, which were admitted over the objection and exception duly taken by counsel for the appellant, were incompetent.

It follows, therefore, that the judgment should be reversed and a new trial granted, with costs to the appellant to abide the event.

INGRAHAM, McEAUGHEIN, and CEARKE, JJ., concur.

(dissenting). I think the plaintiff proved facts from which the fair inference arises that tjie defendant agreed tO' take title to the real property in question, and hold it for the benefit of the decedent Halk. If there was in fact such an agreement, the law will not permit the defendant to shield his fraud in refusing to convey or to account for the proceeds under the plea of the statute of frauds.

In Church of St. Stanislaus v. Algemeine Verein, supra, Van Brunt, P. J., says:

“It seems to be a well-settled rule of law In this state that, unless it appears that the person paying the consideration has consented to an unconditional and absolute conveyance of the property to another without any recognition or intimation in respect to his rights, the statute in question will not protect the attempted fraud; and it is further held that no presumption can be indulged in to support such a defense. Sehultze v. Mayor, 103 N. Y. 311 , 8 N. E. 528 .”

- The plaintiff by her proof certainly made it appear that something further transpired between the defendant and the deceased than the mere paying of the consideration by him and his consenting to an unconditional and absolute conveyance of the property to the defendant without any recognition or intimation in respect to his own rights.. On the contrary, the proof shows that he at least attempted to retain some rights in the property and supposed that he had. Except for the fact that the proof was explicit, whereas in the case at bar it only raises a presumption which is just as good in law, the case of Jeremiah v. Pitcher, supra, is on all fours with the present one. In that case, because of the insanity of his wife, who therefore could not sign a deed, a man paid the consideration and took title in his daughter so that he might convey the property if he saw fit without being embara'assed by the absence of his wife’s signature. The court held that the

It was certainly competent to prove what the deceased said to the, ■person from whom and through whom he bought the property with respect to how the deed should be made, and it was also competent to prove that the reason why the deceased did not himself take title was .his unfriendly relations with his wife. Very much could be said with respect to the competency of the other declarations of the deceased .and his acts toward the property after title had been placed in defendant's name, as casting light upon his exercise or attempted exercise of ownership. The property was vacant, and he could not occupy it, and it is not at all clear to my mind that what he said and did while ■viewing the property or passing by it was not competent evidence. Assuming, however, that it was incompetent and that the learned trial •court improperly permitted such declarations in evidence, such error, if error there was, is not sufficient to reverse the judgment. The action is in equity, and the defendant proved no defense at all, and, if any •error was committed in this respect, it could have done no harm.

I think the judgment was right, and that it should be affirmed.