Carpenter v. Carpenter — 35 N.Y. St. Rep. 512

Majority

p. 512

Lewis H Carpenter et al., Resp’ts and App’lts, v. Coles A. Carpenter et al., App’lts and Resp’ts.

(Supreme Court, General Term, Second Department,

Filed December 8, 1890.)

Headnote

Fraud—Wrongs committed by persons sustaining trust relations.

The ancestor of the parties hereto died, leaving real estate which he devised, after a life estate, to them. Some of the property was mortgaged, and one of the executors, who was an uncle of the plaintiffs, procured the mortgages to he foreclosed although there was sufficient money of the estate to pay them, and on the sale they were bought in hy one of the defendants, who conveyed undivided interests therein to the other defendants. The executor also brought an action to partition the remaining real estate, purchased it on the sale at an inadequate price and conveyed undivided inter,-sts to the other defendants. The plaintiffs, who were infant children of deceased brothers of the defendants, were thus deprived of their shares in such estate. Held, that the facts showed that a great fraud and wrong was perpetrated on plaintiffs by defendants, who sust- ined a trust relation towards them, and that defendants were liable as trustees to plaintiffs for their shares in said property.

Cross appeals from judgment of special term.

One James S. Carpenter died seized of three pieces of real estate, two of which were encumbered by mortgage, which he devised to his wife for life, and at her death to the parties hereto. The plaintiffs, are the children of a deceased son of said James S. Carpenter, and the widow and children of a son who died a short time after his death. The defendants are the remaining children of said James S. Carpenter, two of whom are the executors of his will.

About four months after the death of James S. Carpenter, one of the eiecutors, Coles A. Carpenter, induced the mortgagee to foreclose his mortgage on the “ Homestead Farm” and the same was purchased on the sale by the defendant Sarah Jane Osborn .for $5,100, and she thereupon executed deeds giving a life estate to her mother and five-sixths of the property to her brothers and sisters, the defendants, in equal, undivided parts.

The executor also induced the other mortgagee to foreclose her mortgage on the “ Downing Farm,” and the same was bought in by Mrs. Osborn for the amount of the mortgage, for which she gave a new mortgage to the mortgagee, and immediately executed a deed similar to that previously executed in relation to the other farm. The defendants who were executors then commenced an action to partition the remaining property, known as the “ Dock Property,” and on the sale the same was purchased by Coles A Carpenter for $800, and he immediately executed a deed to his brothers and sisters of an equal, undivided five-sixths thereof.

p. 513

The real property of testator was worth, at his death about $80,000,and was only encumbered by the two mortgages, amounting to $9,000, and his personal estate was $78,000. At the time of the sales the Homestead farm was worth from $25,000 to $30,000; the Downing farm about $48,000, and the Dock property about $5,000.

The court below found that defendants conspired together to deprive plaintiffs of their interests or shares in all the real estate, except the Dock property, and that they held one-fourth of said property as trustees for plaintiffs, and should, when requested, transfer and convey the same to plaintiffs on payment of their share of the amount due on the mortgages, with interest, and that defendants are trustees of plaintiffs as to one-fourth of all the net rents, profits and income derived from all said real property sold under foreclosure, and should account for and pay over the sama

Plaintiffs appeal from so much Of the judgment as dismisses their complaint as to the dock property, and the defendants from the balance of the judgment.

Oscar Frisbie, for pl’ffs; Benjamin W. Downing (Josiah T. Marean, of counsel), for def’ts.

The record. placed before us on this appeal discloses the perpetration of a great fraud and wrong upon the plaintiffs by the defendants, who sustained towards them a trust relation and who were under legal obligations to protect their interests and preserve their property.

Instead of performing the duty thus resting upon them, the evidence discloses a course of conduct which could have been dictated by no proper motives, and which resulted in the complete exclusion of these plaintiffs from all interest in their father’s large estate.

Instead of paying off the mortgages upon the Downing farm and the homestead, they procured their foreclosure and controlled the sales under them and the subsequent" disposition of the title by the nominal 'purchaser at such sales. The evidence before us leads inevitably to that conclusion and the findings of the trial judge upon those questions are all amply sustained by the evidence.

We concur with the trial judge fully in his conclusion respecting the foreclosure of the mortgages and the sales under the judgments, but we think the proceedings in relation to the partition and sale of the dock property fall under the same condemnation.

The same fraudulent design is visible and runs through the ‘whole transaction.

The defendants entered into a fraudulent conspiracy against these plaintiffs to deprive them of their interest in their father’s estate, and to benefit themselves by the scheme.

The judgment in favor of the plaintiffs should be affirmed, with costs, and the judgment dismissing the plaintiffs’ complaint in relation to the dock property should be reversed and a new trial granted, with costs to abide the event.

p. 514

Pratt, J., concurs; Barnard, P. J., for affirmance as to both parcels.