Gilbert v. Deshon — 12 N.Y. St. Rep. 492

Majority

p. 492

John W. Gilbert, Pl'ff, v. Henry S. Deshon, App’lt, and Margaret G. Westerfield, Resp’t.^[1]

(Court of Appeals,

Filed November 29, 1887.)

Headnote

Husband and wife—Special agency of husband—Notice of authority —Mortgage.

Where a husband and wife executed a deed, absolute in form, of real property owned by the wife, she delivering the deed to her husband to be by him delivered as an equitable mortgage to secure a certain amount; but contrary to the wife’s instructions the husband delivered the deed as a payment of a larger sum owing by him to the grantee, the grantor being aware that the deed was to be delivered as a security, and not as an absolute conveyance. Held, that the grantee was bound to correctly ascertain the conditions upon which the deed had been executed and entrusted to the husband, and could not substitute for them different conditions agreed upon by the husband alone.

Appeal from a judgment of the supreme court, general term, first department, affirming a judgment of the special term entered in favor of the defendant Westesfield.

This was an action for partition of real estate belonging to the estate of John Wilkin, deceased, and was brought by the plaintiff, one of the heirs. Mrs. Margaret G. Westerfield also one of the heirs, being entitled to one undivided third part of said land, together with her husband, executed a deed, absolute in form, conveying such part to Deshon, one of the defendants. The deed was delivered by Mrs. Westerfield to her husband to be given to Deshon as an equitable mortgage to secure the payment of $J00, but the husband delivered it to Deshon in payment of a much larger sum which he owed him. The other facts sufficiently appear in the opinion.

N. C. Moak, for app’lt; W. H. Secor, for resp’t.

We are unable to see that upon the tacts of this case as settled by the findings of the trial court there is any room for the application of the doctrine invoked in behalf of the appellant. That an agent dealing with innocent third persons having an apparent ownership or authority conferred by an act of the principal shall be deemed to be owner or possess the requisite authority as against the principal in behalf of such third persons, whatever, the truth may be is a settled and just rule, but does not apply to the case at bar. Mrs. Westerfield did not confer upon her husband the indicia of ownership. The title to her land never went to him or passed through him. On the contrary her deed in his possession showed that she was conveying to Deshon herself upon some contract between grantor and grantee. Her husband in possession of a deed running to Deshon stood both in appearance and in fact as her agent to deliver it upon her terms and in accordance with her directions, for he knew that some terms and conditions were imposed by the grantor to qualify the delivery. He knew that the deed was not to be delivered and that the agent was not authorized to deliver it as the absolute conveyance which it appeared tq be on its face, but only as collateral security for some liability of the husband winch the wife contracted to guarantee. What that liability was it was the duty of the grantee to ascertain. The grantor had given to the husband no authority to agree as to what it should be and by no act or representation had held him out as possessing any such authority. The husband was not her general agent and Deshon was dealing with a special agent whose authority he perfectly understood, was not measured by the terms of the deed, but by agreement of the grantor pursuant to which the delivery was to be made. He knew that the deed was not what it seemed, but was to be given and accepted as an equitable mortgage. The conditions of that mortgage, upon which it had been executed and entrusted to the husband for delivery, the grantee was bound to correctly ascertain and could not substitute for them different conditions agreed upon by the husband alone. The wife’s act did not import such an authority, and the grantee, accepting the deed from the husband, could not change the conditions upon which it was entrusted to him for delivery or safely assume that he was authorized to determine what they should be. The facts found show that the grantor executed and delivered the deed as an equitable mortgage to secure the payment of 8700 of taxes bn her husband’s lands. They further show that she fully reimbursed that sum to Deshon by a transfer of her rents which he collected to that amount and so the condition of the mortgage having been fulfilled Deshon

p. 494

had left neither title to nor lien upon the property the proceeds of which have been ordered to be paid over to Mrs. Westerfield.

The judgment should be affirmed, with costs.

All concur, except Raparlo, J., absent.