Eisemann v. Lapp

This is an action in partition, tried before me without a jury. Catherine E. Victory, who died in 1877, devised the premises involved to her four children. One of these died in 1887, intestate, unmarried, and leaving, him surviving, as his heirs at law, a brother, two sisters, and his father. The father thus took a life interest in the deceased’s one-fourth of the premises. Thereafter the three surviving children executed four successive mortgages on the property, accompanied in each instance by an affidavit of title by one of them. The father was not a party to the mortgage, having left the jurisdiction; and his interest remained undisclosed, except in so far as it appeared from the records,—that is, from the mother’s will, devising her property to her four children, and the subsequent mortgages made by only three of them. The four mortgages were duly foreclosed; the father, however, not being made a party. Sale was had, at which the defendant Lapp became the purchaser at a figure which the evidence establishes to have been the full value of the property. The usual referee’s deed was given, and under this the defendant Lapp went into actual possession, tore down an old building on the premises, erected a new one, and made improvements at a total cost of many thousands of dollars. Thereafter the father conveyed to the plaintiff his one-fourth life interest in the premises, and any interest he might have in the rents due or to become due. Thereupon this action was begun, the plaintiff claiming to be a tenant in common with the defendant under and by virtue of the deed from the father.

The question is whether this latter deed was champertous. I an* of the opinion that it was. No question of adverse possession under the statute of limitations is involved, as the defendant Lapp’s possession under the referee’s deed is too recent to have ripened into' an indefeasible title on that ground. With the wisdom and policy of the champerty act I have nothing to do. It may well be, as was-pointed out long since, that “it is the relict of an ancient policy, which has been treated with but little favor by either courts or legislature in modem times” (Crary v. Goodman, 22 N. Y. 170 , 177), and that “it was passed originally to provide against a state of affairs which does not exist in these times” (Finn v. Lally, 1 App. Div. 415 , 37 N. Y. Supp. 437 ). Yet in the same year that the implied disapproval,

Section 225 of the real property law (Laws 1896, c. 547) provides, “A grant of real property is absolutely void, if at the time of the delivery thereof, such property is in the actual possession of a person claiming under a title adverse to that of the grantor.” The reason for the enactment of provisions of this nature is to be sought in public policy. The purpose was to prevent litigation, and the purchase and acquisition of disputed or doubtful claims. It did not seek to terminate disputes, “but only to compel their settlement between the original parties.” Crary v. Goodman, 22 N. Y. 175 .

The' question then reduces itself to one of the application of the statute, regardless of the question of the validity of the adverse title, or the right in the grantor of the champertous deed to establish for and in himself the property right which the policy of the law will not suffer him to convey. If at the time of the delivery of the deed the adverse holder is in actual possession by virtue of a claim of some title or interest under some written instrument purporting to convey the lands to the claimant, or under some judgment, decree, or executed process of some court, then the deed is void for champerty. Arents v. Railroad Co., 156 N. Y. 1 , 8, 50 N. E. 422 ; Crary v. Goodman, supra; Sands v. Hughes, 53 N. Y. 287 ; Dawley v. Brown, 79 N. Y. 390 ; Dever v. Hagerty, 169 N. Y. 481 , 62 N. E. 586 ; Pearce v. Moore, 114 N. Y. 256 , 21 N. E. 419 . Mere color or claim of title, as would suffice where adverse possession is set up under the statute of limitations, is insufficient; but the adverse possession under the champerty act must be under some specific title, which must be disclosed to the court before the grantor’s deed can be declared void. Finn v. Lally, supra. It is important to bear in mind, however, that in applying the statute it is immaterial whether the claimant’s title, as against that of the grantor, is valid or rightful. Some confusion which I find in the reported cases of the lower courts is, I believe, to be traced to an inadequate recognition of the principle that the title in the claimant may be absolutely groundless, and yet the grantor’s deed void for champerty. The decisions of the court of appeals, however, as, I read them, have laid down the law applicable in unmistakable terms. Thus, in Sands v. Hughes, where it was urged that the claimant held by mesne conveyances under a void tax lease, the court say:

“It has never been considered necessary, to constitute an adverse possession, that there should be a rightful title in the party setting up the defense [of champerty], or in his grantor. Whenever that defense is set up, the idea of right is excluded. * * * Under the statutes of this state there must be a claim or color of title, but if the entry is under color of title the possession will be adverse, however groundless the title.” Pages 295, 296.

In Dever v. Hagerty, supra, in which it was likewise urged that the defendant held under an invalid tax deed, the court held that the defendant was in adverse possession of the premises under a claim of specific title through the tax deed, and that, whether the proceedings

Reference might be made to the recent case of De Garmo v. Phelps, 64 App. Div. 590 , 72 N. Y. Supp. 773 , to show to what lengths the courts have recently gone in applying the statute. There a conveyance of mortgaged premises executed by a sheriff, pursuant to a judgment of foreclosure and sale, at a time when the premises were in the actual possession of a third party claiming title under a tax deed, was declared void, however defective the title based upon the tax deed might be. Although apparently much in point, I am not disposed to accept this case as authority, as it seems reasonable that sales made pursuant to judicial decrees are within neither the spirit nor intent of the champerty statute. Tobias v. Mayor, 17 Hun, 534 ; Knapp v. Burton, 7 Civ. Proc. R. 448; Stevens v. Hauser, 39 N. Y. 302 ; Tuttle v. Jackson, 6 Wend. 213 , 21 Am. Dec. 306 ; Truax v. Thorn, 2 Barb. 156 .

In the case at bar the defendant Lapp asserts his claim of title under a written instrument executed pursuant to a decree of this court. On its face it purports to convey to him the fee, free from all incumbrances. Full value was paid for it. Under it he has gone into actual possession, and has acted as sole and exclusive owner. There is no question here of a void foreclosure, as was the case in Finn v. Lally, supra. The interest of the mortgagors has been completely cut off. It may well be that the father still owns Iris one-fourth life interest. But that question is not involved here. He may personally dispute Lapp’s claim to the whole fee, but his grantee may not. -Lapp claims the fee under a referee’s deed purporting to convey it; he is in actual possession; he has a specific title; his claim is adverse to that of the father; and, even though the deed purported to give more to him than there was to give, the adverse character of the possession is not thereby altered. Jackson v. Smith, 13 Johns. 411 . There must be judgment for the defendants.

Judgment for defendants.