Watkins v. Reynolds — 33 N.Y. St. Rep. 173

Majority

p. 173

Abbie G. Watkins, Resp’t, v. Eben C. Reynolds et al., App’lts.^[1]

(Court of Appeals,

Filed October 7, 1890.)

Headnote

1. Trust—1 R. S„ 730, § 67.

When the purpose of an express trust has ceased, the statute conveys the title just as well as the trustee could do, and it is unnecessary for the trustee to make a formal conveyance.

3$. Record—Subsequent purchaser unaffected by unrecorded agreement.

Defendant Reynolds purchased the premises in question of Henry J. Vrooman, without any notice of an agreement which existed between Vrooman and plaintiff, by which the former had assumed the payment of a mortgage given by his mother, who only had a life estate in the premises, to plaintiff. Reynolds had not paid $860 of the purchase price when he received notice of this agreement, but had agreed with Vrooman to pay certain mortgages and other indebtedness of Vrooman's to a much larger amount. Held, that Reynolds was not charged with the payment of that sum to Vrooman, so as to give plaintiff a right to judgment against it on Vrooman’s agreement, but that the assumption of the payment of these debts of Vrooman’s was really a part of the consideration which Reynolds was bound to pay to other parties and which he no longer owed to Vrooman.

Appeal from a judgment of the supreme court, general term, fourth department, affirming judgment entered against defendants at special term upon trial before the court.

By his will testator left property in trust for his daughter Eliza Ann for life, and upon her death to her heirs then living. She left her surviving Henry J. Vrooman and Helen Reynolds, two of the defendants. Prior to her death, Vrooman applied to the plaintiff for a loan for said Eliza Ann, representing that she was the owner of the property. The loan was made and a mortgage given on the property to secure it. Subsequent to the death of the mortgagor the plaintiff learned that she had no title to the premises, but that the same was vested in Vrooman and Helen Reynolds. She thereupon applied to Henry J. Vrooman for further security, and he executed and delivered to her an agreement, assuming in terms the payment of the mortgage. An action was brought to foreclose the mortgage, and a few days after the commencement thereof Vrooman conveyed away all his interest in the said property to Eben G. Reynolds, one of the defendants herein. It was claimed on the trial that a money judgment could not be ordered because not claimed in the complaint, but judgment was given against defendants for foreclosure and deficiency. On appeal to the general term it affirmed the judgment against defendants.

E. D. Mathews, for app’lts; H. J. Oookingham, for resp’t.

We agree with the learned general term that upon the death of Eliza Ann Vrooman the trust created by the

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will of Miller terminated. It was wholly unnecessary for the trustee to thereafter make a formal conveyance of the land to Henry J. Vrooman and Mrs. Reynolds. The duties of the trustee really terminated upon the death of Mrs. Vrooman, and the provisions of the statute that “ when the purposes for which an express trust shall have been created shall have ceased, the estate of the trustee shall also cease, 1 R. S., 730, § 67, rendered it unnecessary to execute the deed, so far as the vesting of the title in the heirs of Mrs. Vrooman at her death was concerned. This seems to be so plain as not to require authority to sustain it. No-amount of reasoning would make it plainer than the fact itself. The purpose for which the trust was created had ceased upon the-death of Mrs. Vrooman. No further duties of an active trust nature were contemplated or required. The purpose having ceased the statute conveys the title just as well as the trustee could do. See also Matter of Petition of Livingston, 34 N. Y., 557 , 567.

We also,agree with that court thatEben G. Reynolds was a purchaser of the premises in good faith and without any notice (at the time of the purchase), of the agreement of Henry J. Vrooman with the plaintiff. We disagree, however, with the general term upon the effect of the finding of the trial court that a sum of $860 of the purchase price of the premises purchased by Reynolds from Vrooman was unpaid at the time he, Reynolds, received notice of such agreement. The general term has charged Reynolds with the payment of that sum to the plaintiff. If defendant Reynolds had been under no obligation to pay the amount to any one but Vrooman under his contract of purchase, this direction would be proper. But he had entered into a valid agreement with Vrooman at the time of the purchase, and in consideration of the-transfer to him of these premises, that he would pay certain mortgages and other indebtedness of Vrooman’s to a much larger amount than this sum in dispute, and hence it was a part of the-agreement for the purchase of the premises that he should assume and pay these debts of Vrooman’s.

It is true, as stated at the general term, that there is no finding in so many words that Reynolds promised Vrooman to pay these-certain debts out of the consideration for the conveyance. But the language of the finding cannot be construed in any other light, than as a finding that these debts of Vrooman’s were assumed by Reynolds and that he agreed to pay them as part of the consideration money for the purchase of the premises. The language of the finding, “ that the consideration of the transfer from said defendant Vrooman to Reynolds was made up as follows: ” (here-is added the various sums, cash, mortgages, notes and other indebtedness, making the total of the purchase-price), can only mean that the amounts represented by the mortgages and notes-were assumed by the defendant Reynolds as part of the consideration to be paid by him for the transfer of the property. It is not at all such language as would be used if the conveyance were taken simply subject to certain incumbrances, with no agreement, to assume or to pay them. If there be any possible ambiguity in

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the language of the finding, it is made plain by the proof, for in the testimony of Reynolds, which it would seem was uncontradicted upon this point, he swears that he assumed the payment of the mortgages mentioned in the finding, and also the note and other indebtedness therein spoken of.

A valid agreement was, therefore, made by Reynolds, by which he was bound to pay this very money to other parties, and he no longer owed it to vrooman. This obligation was entered into before, and remained in full force and effect after he had notice of the agreement of Vrooman with the plaintiff. Vrooman himself could not discharge or release Reynolds from the obligation of the agreement (had he chosen to make the attempt) after the fact of the making of such contract had come to the knowledge of the owner of the mortgage, or the note, or other indebtedness, and it had been assented to and adopted by him. Gifford v. Corrigan, 117 N. Y., 257 ; 27 N. Y. State Rep., 233. Certainly no release or discharge by Vrooman before any knowledge of the contract on the part of the owner of the mortgage or note will be presumed in the absence of any finding upon that subject, and in the .absence of any evidence upon which such a finding might be based.

To permit this judgment to stand would, therefore, subject the defendant Reynolds to the payment of the money involved therein twice over.

Prima facie the agreement in evidence was a valid and subsisting contract by which the defendant Reynolds was bound to pay the amount of these debts to the various owners of them, and a payment to the plaintiff of the sum directed by this judgment would constitute no defense to Mr. Reynolds against such obligation. If the agreement had been cancelled, and the defendant released or discharged from its obligations, so that he had again become liable to Vrooman for the payment to him of this money, such fact would have to be shown, and could not be assumed in favor of the plaintiff.

These views lead to a reversal of the judgment.

It should, therefore, be reversed, and a new trial granted, costs to abide the event.

All concur.