Grant v. Keator — 27 N.Y. St. Rep. 693

Majority

p. 693

Mary L. Grant et al., Resp’ts. v. Jane S. Keator et al., App’lts.

(Court of Appeals,

Filed November 26, 1889.)

Headnote

Bes ad.judicata—Effect of surrogate's decree as to application of INDEBTEDNESS.

In an action for partition the defendants claimed title under a sale on foreclosure of a mortgage made by one W. W. G-., and the right to pay any balance found due on an alleged sale by one J. G. to said W. W. G. It appeared that there were mutual accounts between W. W. G. and J. G., and that on a final accounting of J. G’s. estate the surrogate decreed that the whole balance of W. W.G.'s claim against the estate should be applied in payment of a deficiency in his account as administrator. The court in this action found that a certain amount had been paid on the alleged sale and gave defendants thirty days to pay the balance and in default thereof decreed partition. They failed to pay. Held, that defendants could not complain of this disposition of the action ; that they took only the rights of the mortgagors; that the parties to the accounting had the right to apply the indebtedness upon the unsecured indebtedness of W. W. G., and such disposition was conclusive upon defendants.

Appeal from judgment of general term, supreme court, fourth department, affirming judgment in favor of plaintiffs.

M. M. Waters, for app’lts; Edwin D. Wagner, for resp’ts.

The plaintiffs brought this action to obtain partition of the lands described in the complaint. They alleged title to such lands as heirs at law of John Grant, deceased, who, with William Ward Grant, inherited them from Avery Grant, their father, and were tenants in common thereof at the death of John Grant in 1869.

The appellants claimed title to the lands under a foreclosure sale and purchase by them upon a mortgage given thereon by William Ward Grant, April 20. 1875, to secure a prior indebtedness from him to Chauncey and Jane S. Keator, and an alleged paroi sale of said lands, made in 1855, by John Grant to William Ward Grant, and payment by him of such purchase price to John Grant. The answer also asked, in case it should be found that such purchase price had not been paid in full, that the said appellants should be afforded leave to pay such amount as remained unpaid thereon, and be decreed, in case such payment was made, a conveyance of the lands by the heirs at law of said John Grant.

The principal controversy on the trial was whether such purchase price had been paid to John Grant during his life-time, or to his personal representatives thereafter. No question is made in the case but that John Grant, after succeeding to the title of the lands with his brother, William Ward Grant, contracted by parol, in 1855, to convey his interest therein to his brother on payment of the sum of $8,300, and certain other considerations, and the question litigated was whether this sum had been paid during John Grant’s life-time, and, if not, whether the defendants should have leave to pay the sum remaining unpaid and be decreed a conveyance of the premises.

The evidence failed to show that the purchase price of said land

p. 694

had been paid. The appellants attempted to prove this fact by-showing that, between the date of said paroi contract of sale and the death of John Grant in 1869, a mutual account existed between the' brothers, upon which, at the time of the death of John Grant, there was an apparent balance in favor of William Ward Grant of $3,152.34, exclusive of the amount of the purchase price of said land. Upon the death of John Grant, Fanny Grant, his widow, and William Ward Grant, his brother, were appointed administratrix and administrator of his estate and qualified as such. In 1876 an accounting on the part of the administrators of John Grant’s estate was had before the surrogate of Delaware county, to which all of his heirs and next of kin of John Grant were parties, and such proceedings were had therein that said surrogate decreed that the whole balance of the account of William Ward Grant against the estate of John Grant, excluding the amount due for such real estate as exhibited, amounting to the sum of $3,152.34, should be applied in payment of a deficiency of assets in such estate caused by the appropriation, by William Ward Grant, as administrator, of the funds of said estate. The record of this accounting was introduced in evidence by the defendants and they are not in position to dispute its force as proof, or its efficacy as an adjudication between the parties thereto.

It was found by the court below, on the trial under review, that it was never agreed or understood between John Grant and William Ward Grant that any of the items of account between them were received, or should be applied in payment of the balance due upon the purchase price of said lands. But it was also found that William Ward Grant had paid to John Grant the interest on said sum of $3,300, up to November 1, 1869, and $1,616.86 upon the principal, leaving unpaid thereon the sum of $1,683.14, of principal and $1,800.81, of interest, amounting at the time of the trial to $3,283.95.

This finding was apparently based upon an inference that there had been an application, by the parties, of the annual balances of the account, previous to the year 1869, in favor of William Ward Grant, to the purchase price of said land, which had reduced the amount thereof to $1,683.14.

We think there was evidence from which such an inference might properly be drawn. The account, which was • proved only by the records of the surrogate’s court, was shown to have been kept by William Ward Grant upon an account book formerly belonging to his father. Until 1866 William Ward Grant and his brother, John Grant, lived together in the same house, and John had an opportunity to examine this book and inspect the account, and had been seen sometimes looking over it. That account showed, inferentially, that the amount of the purchase price had been reduced each year by the application thereon of the annual balances until in 1869, when the balance in favor of John, including the amount of the purchase price, was $1,683.14. Certain items were added after that time, and it cannot be inferred as to such items that John ever saw them, and they bear inher

p. 695

ent evidence of being reviewed and entered in the book after John’s death, and consist of items inadequately proved. With reference to those items there can be no presumption that they were intended to operate as payments upon the purchase price of said land.

It was also found by the trial court that on the 20th of April, 1875, at the time the appellants acquired, by mortgage, the interest of William Ward Grant in such lands, said William Ward Grant was indebted to the estate of John Grant, aside from the balance due on said purchase, in a sum greater than the balance ■of his account against such estate, and that said mortgagees acquired by such mortgage no equitable right to have such balance applied upon the said William Ward Grant’s indebtedness for the purchase price of such lands.

The trial court sustained the defense set up to the extent of holding that $1,616.86 and interest to November, 1869, had been paid on the purchase price of said lands, and that said appellants were entitled to pay the balance remaining unpaid thereon, and in that event have a conveyance from the heirs-at-law. The decree gave them thirty days in which to make such payment, and in default thereof decreed partition of the lands as prayed in the complaint

The appellants raised a number of questions upon the authority of the court to grant the relief which it awarded to them; which seem to us to be unworthy of serious consideration. Such relief was based altogether upon the allegations of the answer and the claim for relief contained in it, and whatever may have been its force or effect, the defendants are not injured by a privilege awarded to them, at their request, and intended for their benefit The court gave the defendants an opportunity to defeat the plaintiff’s action altogether if they chose; but if they did not elect to avail themselves of this privilege they were at liberty to refuse, and in that event nothing was left to stand in the way of the enforcement of the plaintiff’s legal rights. They could in no sense be aggreved by the extension of a privilege which they did not elect to avail themselves of. The defendants had no legal right to an extention of time within which to satisfy the vendor’s lien, .and the act of the court in giving them thirty days to do so was an act of pure grace enabling them to avoid the effect of a long continued default in the performance of their obligations to pay the purchase price. They chose not to pay and take a conveyance, and the necessary effect of this determination was to leave the title of the land in the vendor’s heirs, with all the rights and privileges pertaining to such title, among which was the right of partition. Wainman v. Hampton, 110 N. Y., 429 ; 18 N. Y. State Rep., 320.

The defendants, by their mortgage, acquired such right in the lands as William Ward Grant possessed at the time it was given, and that was the right to pay the unpaid purchase price and entitle himself to a conveyance thereof. William Ward Grant was then indebted to John Grant’s estate, not only in the amount of $1,683.14, for the unpaid balance on the purchase price of this

p. 696

laud ; but also in other amounts sufficiently large to extinguish any account which he had against such estate. The balance of such account was then an open, unliquidated account, no part of which had been applied as payment upon any particular demand of the estate, and, in the settlement of its accounts, the surrogate, upon the request of William Ward Grant, applied it to the extinction of the unsecured demands of the estate against William Ward Grant to the exclusion of the sum due upon the purchase price of said lands, and this, we think, the representatives and heirs of John Grant had a right to insist upon and the surrogate lawful authority to make. No application having been made of this account by the parties at the date of the mortgage in question, except, perhaps, the sum of $1,616.86, William Ward Grant did not, by giving it, bar the right of the parties to make such disposition of the balance of the account as they might deem proper to do.

The appellants took their mortgage with notice of their mortgagor’s want of title and without knowledge of the state of the accounts between their mortgagor and his vendor, and they cannot object to any application made of this indebtedness which the parties interested should agree to make. Harding v. Tifft, 75 N. Y., 461 .

The trial court have given to the appellants, as a payment upon the purchase price of said land, the benefit of the balance of account, viz., $1,616.86, appearing to be due to William Ward Grant at the death of John Grant, although William Ward Grant seems also to have received credit for the same amount on his accounting before the surrogate. Certainly the appellants have no right to complain of this disposition of the account.

They have secured a credit amounting’to one-half of the balance appearing upon the account, as a payment upon the land, and they now claim that the other half shall also be so applied, although it has been otherwise applied by the parties and the surrogate.

As against the representatives of John Grant, the appellants have shown no right, either by proof of the items of the account or of any agreement of the parties, to have this amount applied as a payment upon a demand for which they held security, to the exclusion of unsecured debts. There was nothing to prevent the parties to this indebtedness, at the date of the surrogate’s decree, from making such application thereof as they might agree upon, and having, under the sanction of the surrogate’s court, applied it upon the unsecured indebtedness of the debtor, strangers to the transaction have no right to complain. The appellants were not parties to that accounting, and had no legal right to appear therein or litigate the question of the application of such account, and the disposition then made of it is conclusive upon them. O’Blenis v. Karing, 47 N. Y., 649 .

The questions presented by the appellants, as to the respective rights of the heirs at law and the representatives of John Grant in the unpaid balance of the purchase price of the land in question, do not concern them and need not be determined in this litigation.

We have examined other questions raised by the appellants’

p. 697

counsel upon the argument, but are of the opinion that none of them require serious notice.

The judgment of the court below is, therefore, affirmed.

All concur.