Collins v. Collins — 36 N.Y. St. Rep. 591

Majority

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John A. Collins, Resp’t, v. George K. Collins et al., App’lts.

(Supreme Court, General Term, Fourth Department,

Filed February 20, 1891.)

Headnote

1. Tenants in common—Fraud — Determination of claims to real PROPERTY.

The father of the parties hereto died possessed of certain real estate subject to mortgage, all the children then being minors. Thereafter' the defendant George purchased adjoining premises which he caused to be conveyed to himself and his brothers. All the parties, with their mother, occupied the premises until George was married, when he removed therefrom. The mortgage was foreclosed in 1862 by its holder, in whose office George was a student, and notice of sale was served on his mother by George, and no notice was served on any other person. George purchased the premises on the sale for the amount of the mortgage and interest and gave back a mortgage for the amount of the original one. Plaintiff was ignorant of these facts until a few months before he commenced this action to determine the ownership and for a partition and sale, when George, having purchased the other brother’s share, claimed to own the whole to the exclusion of plaintiff. Plaintiff: was a minor at the time of said foreclosure. Held, that George should be deemed to have purchased for the benefit of his co-heirs as well as himself, and that he only nominally held the title to plaintiff’s one-third.

2. Same—Limitation.

The statute of limitations did not run against plaintiff’s right to have the cloud on the title removed until the time when claim of absolute title was made in 1887.

Appeal from an interlocutory judgment entered in Onondaga county on June 14, 1890, upon the decision of the Onondaga special term, May, 1889; also, motion for a new trial under § 1001 of the Code Civil Procedure.

W. 0. Tracy, for app’lts; T E. Hancock and M. M. Waters, for resp’t.

The subject of this' action is a piece or lot of on street, Syracuse, being fifty feet upon the street, and running back 102 feet, and upon which there is now a brick block called Collins block, the lower part of which is used for business purposes, and all above for offices and living rooms, and is so circumstanced that a partition thereof cannot be made without great prejudice to the respective owners. The object of the action is to determine the ownership of the property and obtain partition or sale. The judgment appealed from adjudges that the plaintiff is the owner of one undivided third, and the defendant George K. of two undivided thirds, subject to certain dower rights. A sale is ordered, and an accounting by the defendant George K. of the rents and profits as between tenants in common.

It appears that on the 15th August, 1853, John Collins died intestate, leaving a widow, the defendant Mary A. Collins, and as his only heirs at law three children, the plaintiff, the defendant George K. and Frank Collins. At that time the plaintiff was

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about eight years old, George K. about sixteen, and Frank about three. On or about September 1, 1853, Mary A. Collins was duly appointed administratrix of the estate of John Collins, but no general guardian was ever appointed for either of the children. John Collins was at his death the owner of the front portion of the premises above referred to, such portion being fifty feet on the street, and running back eighty-eight feet, upon which had been erected a brick block known as the Collins block. The property was incumbered by a mortgage of $2,400. Upon this mortgage there was due and unpaid on the 27th February, 1862, the sum of $2,400, with interest from May 1, 1861. Immediately after the death of John Collins, his widow with the children moved into the block, and she with the assistance of her children managed the same until 1862.

In 1861 and 1862 the rents were about a thousand dollars a year. The plaintiff occupied rooms in the block down to February, 1862, when he was married and left the same and went to live with his wife’s family, where he continued to reside for about a year, and he then returned to the block with his wife and has since resided there with his family, occupying five or six rooms. The defendant George K. lived with his mother until 1858, when .he was married, and then he occupied rooms in the block until September, 1862. The widow has continued to live in the block to the present time.

On the 4th June, 1860, the defendant George K. purchased of Abner Bates a strip of land of the same width as said block and fourteen feet deep, directly adjoining it in rear, for the sum of $100, and caused the same to be conveyed to himself and his two brothers Frank and John A. This constitutes the balance of the lands in question.

Prior to 27th February, 1862, the mortgage above referred to had been assigned to Mr. Gott, and he at that date commenced a foreclosure by advertisement. It does not appear that there was any immediate or pressing necessity to pay the mortgage or take care of it or any threats of foreclosure. The defendant George K. was at that time and had been since 1856 a student in Mr. Gott’s law office. The notice of sale was published in a country newspaper that had little or no circulation in Syracuse. The notice of sale was served on the widow and administratrix by George 3L, but she apparently paid no attention to it, but left the matter entirely with George K. Uo other person was served. Upon the sale, on 31st May, 1862, George K. bid in the property at $2,610, , that being the amount unpaid and costs, and took title in his own name. Upon this bid he paid $210, and for the balance gave a mortgage back to Mr. Gott upon the same premises. At this time, as the court finds, the property was of the value of at least $18,-000, and the yearly rental value at least $1,300. After the sale the rents of such portions as were leased were collected by George K. or by his mother for him.

On the 26th day of September, 1873, George K. obtained from his brother Frank a quit claim deed of the entire premises, and the rents, issues and profits accrued or to accrue from the same,

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paying therefor the sum of $8,000, and in 1876 he extended the block so that it covered the greater part of the Bates purchase.

The court found, as it was authorized by the evidence to do, that George K. omitted to disclose to his co-tenants the fact that the premises had been sold and bid in by him, and concealed from them that fact until within a few months of the commencement of this action in December, 1887, and that up to that time the plaintiff did not know of the foreclosure sale, but supposed and believed that his title as tenant in common existed and remained, according to his right by descent from his father; that from time to time George K. negotiated with the plaintiff for the purchase of his interest in the property at the time of the deed from Frank Collins and afterwards, until a short time before this suit was commenced, when George K. for the first time claimed the whole to the exclusion of any right or interest in the plaintiff. As matter of law the court held, among other things, that the defendant George KL purchased at the foreclosure sale and took title in his own name in fraud of the rights of the plaintiff as owner of an undivided third, and that he holds the title of such one-third impressed with a trust in favor of, and as trustee for, plaintiff, who is the equitable owner, chargeable, however, with one-third of the mortgage.

In Knolls v. Barnhart, 71 N. Y., 480 , it is said to be the general rule that one tenant in common cannot purchase in an outstanding claim or title to the exclusion of his co-tenant. This principle is recognized in many cases. Van Horne v. Fonda, 5 Johns. Ch., 388 ; Peck v. Peck, 110 N. Y., 73 ; 16 N. Y. State Rep., 638; Rothwell v. Dewees, 2 Black, U. S., 613; Lloyd v. Lynch, 28 Penn. St., 419 . In the Lloyd case it is said that the deed so obtained by a co-tenant can only be used as a security to enforce contribution for the money paid for it. If the tenants in common come into joint possession as co-heirs or co-devisees, special obligations are said to exist forbidding either to do any act which would be unlawful or improper if done by a trustee charged with the care and preservation of a trust estate. Freeman on ■Co-Tenancy, § 151.

In the present case the plaintiff was a minor at the time of the foreclosure, and his mother, being his guardian in socage, paid no attention to it. She left the matter entirely to George EL, assuming very likely that he would see that the rights of his brothers would be preserved. There seems to have been no real occasion for any foreclosure. Less than a year's interest was unpaid. The interest had been kept up previously, as it may be inferred, from the rents, and these were improving. The holder of the mortgage did not desire the principal, for he took back a new mortgage for that. The property that was bid in for $2,610 was worth $18,000.

We think the court below did not err in holding that the purchaser on foreclosure should be deemed to have purchased for the benefit of his co-heirs as well as himself and that he only nominally held the title of plaintiff’s third.

Mor should the delay of plaintiff to assert his right be deemed

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prejudicial to him. He was ignorant of the foreclosure sale. He continued to occupy a portion of the property, paid no rent and. none was asked of him. His brother made no claim of exclusive ownership till just before the suit was commenced. On the contrary he recognized plaintiff’s rights in his repeated negotiations, and his purchase from Frank Collins was inconsistent with any claim of title in himself. True, George K. in association with his mother managed the renting and collected the rents, but the business of George K. as an attorney was such that he would naturally look after that and the business of plaintiff took him away from home most of the time. George K. claims to have had adverse possession but that the court declined to find. Such possession as George K. did have was not exclusive. The conveyance to him was not necessarily hostile. Culver v. Rhodes, 87 N. Y., 348 .

It is claimed by th,e appellants that the cause of action of the plaintiff with reference to the foreclosure is barred by the statute of limitations, more than twenty years having elapsed after plaintiff became of age before the commencement of this action. The view of the court below was that the case was within sub. 5 of § 382 of the Code of Civil Procedure, which provides that in an action to procure a judgment other than for a sum of money, on the ground of fraud, in a case which, on the 31st day of December, 1846, was cognizable by the court of chancery, the cause of action is not deemed to have accrued until the discovery by the plaintiff, or the person under whom he claims, of the facts constituting the fraud. The claim of the appellants is that this does not apply to a case of constructive fraud and that fraud in fact is not alleged in the complaint or found by the court. Facts, however, were found, within the scope of the complaint, which in effect, as it may be argued with considerable force, amounted to more than constructive fraud. Be this as it may, another view may, I think, be taken of the case which will reach the same result. The purchase by George K. was subservient to the title of the co-tenants. He took the nominal title and could hold it only as security for what he paid. In substance he had a mortgage and received rents more than sufficient to pay it. The plaintiff remained in possession and his rights there were recognized. The right of plaintiff to have this mortgage cancelled and the cloud on the title removed would not be affected by the statute of limitations until a hostile claim was made by the holder. Such claim was made only a short time before the suit was commenced. Treating it as a cloud, the statute would not apply. Schoener v. Lissauer, 107 N. Y., 111 ; 11 N. Y. State Rep., 368. If as against the plaintiff there was no entry under claim of absolute title until 1887, the statute should not be deemed to commence to run until that time. Reitz v. Reitz, 80 N. Y., 538 ; Miner v. Beekman, 50 id.. 337.

The defendants claim that their right of trial by jury has been infringed upon. The complaint contained two counts. In the first one the facts with regard to that part of the premises that descended from John Collins and in regard to the mortgage thereon

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were stated, and it among other things contained an allegation of the present ownership by plaintiff' of an undivided third. In the second count the facts as to the Bates piece were stated. Upon the opening of the trial the right of trial by jury as to the second count was expressly waived, and it seems to have been conceded that the first count presented equitable features that were properly triable without a jury. It appears that both sides noticed the case for the special term. Ho issues had been stated. I don’t think the appellants have any good ground for complaint as to the form of the trial.

A point is made as to misjoinder of causes of actions. That matter however was disposed of on a former appeal from an interlocutory judgment overruling a demurrer, and is not now here. It may however be suggested that both causes of action relate to the same subject, namely, the Collins block as now situated, and the rights of the parties require the entire matter to' be disposed of in one action. Any title subservient to the rights of the real owners must necessarily be determined, and if a cloud it must be dispelled, in order to a complete determination of the matter. Under § 1543 of the Code “the title or interest,” of the plaintiff as well as that of the defendants .can be controverted and determined in an action of partition. The design of that section was to allow the whole controversy to be settled in one action. See Throop’s notes to that section and to article second- of chap. 14 of the Code. Shannon v. Pickell, 2 N. Y. State Rep., 160; 3 Rumsey’s Pr., 31. The plaintiff had a right to bring an equitable action. Story Eq., § 658; Haywood v. Judson, 4 Barb., 228 ; Freeman on Co-Tenancy and Par., § 425.

. Several points are presented as to refusals to find requests made by the appellants. They need not be specially considered. Ho error prejudicial to the appellants is disclosed.

It follows that the judgment should be affirmed.

Motion for a new trial denied and judgment affirmed, with costs.

Hardin, P. J., and Martin, J., concur.