Robertson v. Sayre — 6 N.Y.S. 649

Majority

p. 649

Robertson et al. v. Sayre.

(Supreme Court, General Term, First Department.

July 9, 1889.)

Headnote

1. Resulting Trusts—Refusal to Accept Conveyance.

A mortgagee purchased the land at the foreclosure sale, but gave the name of one M. as purchaser, and had the deed executed to M., and recorded, all of which was done without M.’s knowledge and consent; and when M. was informed of it he refused to have anything to do with the transaction. Held that, as the grantee refused to sanction the conveyance, 1 Rev. St. N. Y. p. 728, § 51, which declares that no trust shall result to the person paying the money on a purchase of real estate, but the title shall rest in the alienee named in the conveyance, had no application. Beady, J., dissenting.

A Same—Fraud—Right to Relief.

Many years after the sale defendant, by concealment or misrepresentation of facts, and without consideration, and with full knowledge of M.’s disclaimer, induced M. to give him a quitclaim deed to the property. Held-, that the heirs of the mortgagee could not maintain an action to charge defendant with the value of the land, less his legal and equitable liens thereon, on the theory that the quitclaim deed was procured by fraud, as the grantor in that deed was the proper person to redress that wrong, if any was perpetrated.

This is an appeal from a judgment entered upon the report of the Honorable Noah Davis, referee, appointed by the court at special term to hear and determine the issues. The action relates to two lots of land in the city of Hew York, for which the defendant obtained a quitclaim deed from one Messinger in 1881, and under which he claims title to the premises. The plaintiffs claim that, as heirs at law of one David H. Robertson, they are entitled to demand from the court that the value of the lots be fixed and declared, and that the defendant account for such value after .being allowed the amount of any legal or equitable liens or charges he may have against the same, and that the amount found to be due plaintiffs be declared'a lien upon said lots, and, in default of .payment of the amount found due, that the lots be sold to satisfy the same. The facts, as found by the referee, are substantially as follows: At a foreclosure sale made by William Mitchell, master in chancery, said David H. Robertson bought said two lots for $50, but gave the name of Thomas H. H. Messinger as the purchaser; and afterwards, on January 18, 1841, at Robertson’s request, said master in chancery made and executed his deed for said lots to said Messinger, and delivered the same to Robertson, who recorded it in the office of the register of the city and county of Hew York. All this having been done by Robertson without the knowledge, consent, or privity of Messinger, Robertson then first informed Messinger thereof. The latter, who had for many years previously been in very friendly social relations with Robertson and his family, when informed of Robertson’s action, became greatly offended, and refused to acquiesce in the transaction, and from the time of that interview until Robertson’s death they became and continued

p. 650

estranged. Bobertson died in May, 1851, intestate, and the plaintiffs are his heirs at law. Although the title to the property stood of record in Messinger’s name, he was not aware of it, nor did he ever exercise or claim any ownership of it. In 1858, Messinger retired from business, and removed from New York city, where he had lived for many years, to Stamford, Conn. In November, 1881, defendant’s attorney, Mr. Flanders, called upon him at Stamford in relation to the lots, and was surprised to discover at the interview that Messinger did not know that the title to the property stood in his name. He had in fact forgotten all about the matter that Bobertson had informed him of 40 years before, until the attorney for defendant had refreshed his memory by referring to the previous title, in which Bobertson’s name appears as assignee of the mortgage foreclosed as aforesaid. The attorney was also surprised to discover that Messinger had a wholly erroneous idea of the value of the property, and that he was well acquainted with defendant, who-had once been his family physician. Seeing the utility of these discoveries; that Messinger was ignorant of his record title; that he disclaimed any ownership to the lots by reason thereof; that he was wholly ignorant of their value; and that he was acquainted with defendant,—the attorney within a day or two returned to Messinger, bringing with him the defendant and a blank quitclaim. Messinger expressed his belief that the property must be eaten up by taxes and sales for taxes during the period of 40 years since the deed to him had been recorded, and that they could be worth nothing. He fully explained the transaction about the deed being made to him through Bobertson, and his rebuking Bobertson for thus using his name without authority; that he claimed no interest in the property; that it belonged to Bobertson’s heirs, some of whom he knew to be dead, and the others were scattered and unknown to him; and that if any of them had appeared, and requested a deed, he would have given it to them. Then, after some conversation concerning a supposed interest of the defendant in the lots, which interest was really nothing, although Messinger was led by defendant to believe that it was something, Messinger said: “I will tell you what I will-do. If any of Mr. Bobertson’s heirs should turn up in distress, I will transfer this property to you, providing you will help them;” to which defendant replied: “Agreed; I will do so;” and, when asked the amount of such help, Messinger named one or two hundred dollars,—that being, as he supposed, the value of the lots when the deed was made to him, and before they had been eaten up by taxes and assessments. A quitclaim deed was then made and executed by Messinger to the defendant for all his right, title, and interest in the lots, but no consideration whatever was paid by defendant therefor. The other facts appearing in the case are that, about or previous to the time Bobertson had the deed made in the name of Messinger, there were four judgments against Bobertson unsatisfied of record. Upon these facts the learned referee finds, substantially, not only that the title to the two lots vested in Messinger under the statute of uses and trusts, but that, even although Messinger never claimed any ownership to them, and conceded that the property belonged to Bobertson’s heirs, and was always ready and willing to convey the same to them, yet a third person who, by concealment or misrepresentation of facts, and without consideration, and with full knowledge of Messinger’s disclaimer of ownership, induced Messinger to give a quitclaim deed of the property to him, that deed would vest a good title in him as against the plaintiffs.

Argued before Van Brunt, P. J., and Brady and Daniels, JJ.

James A. Beering, for appellants. Amos K. Hadley, (A. B. Carrington, of counsel,) for respondent.

I do not think the statute avoiding a resulting trust when the consideration is paid by one person, and the title is taken in the name of

Dissent

p. 651

another, applies to this case; for the deed was not delivered to the grantee named in it, but he refused to accept it, or in any manner sanction the purchase or the conveyance to himself. The title, on this state of facts, did not vest in him. But that circumstance will not support the action which is in favor of the heirs of the former owner of the land, and whose interest was in form sold at the foreclosure sale. It proceeds upon the ground that the person named as the purchaser in the master’s deed was fraudulently induced by the defendant to quitclaim the land to him for a nominal consideration. But the grantor in this deed is the person to redress that wrong, if it has been perpetrated. The plaintiffs have no right to complain of the deception by which he was ipduced to give the deed. If they have any remedy, it will be to set aside the sale, for the reason that the nominal purchaser refused to accept or take the title. Whether even that is available to them is not a subject to be decided in this action, which is for an entirely different object. As the case is now before the court, there seems to be no other way open than to affirm the judgment.

Van Brunt, P. J., concurs.

(dissenting.) By the statutes of uses and trusts (1 Rev. St. p. 728, § 51) the rule of the common law was changed, and it was declared that no trust should result to the person paying the money on a purchase of real estate, but the title should rest in the alienee named in the conveyance. The fifty-third section excepted cases where the alienee should have taken an absolute conveyance to himself without the knowledge or consent of the person paying the money. Here, as we have seen from the facts, stating them as broadly as they can be given for the plaintiffs, it is not to be disputed that the money was paid by Robertson, and the conveyance for his benefit taken by him in the name of another, namely, Messinger. The fifty-third section has therefore no possible application. The transaction was within the terms and spirit of the statute, and was one inveighed against, inasmuch as Robertson was insolvent, and the design of it was clearly to evade the application of the purchase to the payment of his debts. The effect of section 51 on such an incident cannot be questioned. Garfield v. Hatmaker, 15 N. Y. 478 ; McCartney v. Bostwick, 32 N. Y. 59 ; Bank v. Olcott, 46 N. Y. 16 ; Everett v. Everett, 48 N. Y. 218 . Messinger, being invested with the title by operation of law, albeit he disclaimed the whole proceeding, had the absolute right to dispose of it as he pleased. The payer of the money forfeited all rights which he might have acquired by taking the conveyance to himself. He deliberately incurred the penalty, and sacrificed his money. Messinger, having this right, exercised it, and, as he committed no violation of law or rule of public policy, no court can undo the act, either for friend or relative of the purchaser in fact. Whether a court of equity would enforce the payment or performance of the peculiar consideration agreed upon for the transfer to the defendant is not now a subject for consideration. The learned counsel for the plaintiffs thinks that the case of Foote v. Bryant, 47 N. Y. 544 , sustains the right of his clients to indemnity from the defendant, but this thought is an erroneous one. In that case it was held that the alienee could, if he chose, regard the equitable rights of the person paying the money, and secure them by a lawful declaration of trust or conveyance, but if in doing so an absolute conveyance were executed to a third person, without the knowledge of the cestui que trust, it brought the transaction within the provisions of the fifty-third section, already mentioned. Here, as we have seen, there was a disclaimer by the alienee of the trust, and no attempt of his of any kind to secure the equitable rights of the payer of the money. The case is indeed bald of any preservative of them, and the judgment must be affirmed. The result seems to be harsh, but the statute is imperative. Ordered accordingly.

Cases cited

Everett v. Everett 48 N. Y. 218 N.Y. Comm'n App. p. 651
Foote v. Bryant 47 N. Y. 544 N.Y. 1872-02-27 p. 651