Robertson v. Sayre — 45 N.Y. St. Rep. 588

Majority

p. 588

Edward A. Robertson et al., App’lts, v. Lewis S. Sayre, Resp’t.

(Court of Appeals, Second Division,

Filed May 31, 1892.)

Headnote

Trusts—Property taken in the name op another to defraud creditors. —Heirs op debtor hate no legal estate therein.

In 1841 R. purchased two lots at a foreclosure sale, paying fifty dollars, but being financially embarrassed he took the deed in the name of his-friend M. When É. told M. of the transaction the latter was offended and the estrangement continued until R.’s death in 1851. In 1881M. conveyed the lots to defendant by quit-claim deed recorded in 1883, the latter claiming to have an interest therein, and agreeing that if any of R.’s heirs should turn up he would help them to the extent of one or two hundred dollars. The lots were worth $10,000, but this M. did not know. Held, that as R. procured these lots to he conveyed to M. to defraud his creditors he had no legal estate in them which could he reached by execution or which on his death descended to his heirs.

Appeal from a j udgment of the general term of the supreme-court of the first department, which affirmed a judgment dismissing the complaint on the merits entered on the decision of a. referee.

In January, 1841, David H. Robertson purchased, in the name of Thomas H. H. Messenger, at a mortgage foreclosure sale, two-lots in Harlem for fifty dollars. January 18, 1841, the master in chancery conveyed the premises to Messenger by a deed which was recorded January 19, 1841. Robertson made the purchase, took the deed, procured it to be recorded, and paid the consideration, fifty dollars, without the knowledge or authority of the-grantee. Before the transaction Robertson and Messenger had been friends, but no business relations had existed between them. Shortly after the deed was recorded Robertson informed Messenger of the transaction, who was greatly offended, and their pre- -■ vious friendly relations were severed, and so continued until the death of Robertson, which occurred May 2, 1851. The referee found that at the time of the purchase Robertson was financially

p. 589

embarrassed, and that the purchase was made and the deed taken in the name of Messenger for the purpose of hindering and delaying the creditors of Eobertson. Neither Eobertson nor Messenger took possession of said lots, nor did either pay the taxes thereon or exercise any acts of ownership, and that the plaintiffs, who are the heirs-at-law of Eobertson, have never been in possession of the premises or exercised acts of ownership over them.

November 25, 1881, Messenger conveyed the two lots "to the defendant by a quit-claim deed which was duly recorded July 14, 1883. Messenger had forgotten the fact that these lots had been conveyed to him, but on being reminded of it said that he supposed he had no valuable interest in them because he supposed they had been eaten up by and sold for taxes during the period of forty years. The defendant represented to Messenger that he had some interest in the property, but what representation was made or whether it was true or false was not found by the referee and none of the evidence is contained in the record before the court.

The referee found that Messenger knew that David H. Eobertson was dead and that he left children who were living, but did not know where they resided, and that he conveyed the lots to the defendant upon his oral agreement that if any of the Eobertson heirs should turn up in distress that defendant should help them to the extent of one or two hundred dollars. It was further found that Messenger would have conveyed the premises to the heirs of Eobertson upon request, and that at the time they were conveyed to the defendant they were worth $10,000, but that their value was unknown to Messenger. Since the lots were conveyed to the defendant he has redeemed them from the tax sales and has paid considerable sums, the amount not appearing, in discharge of the taxes in arrear. The plaintiffs seek an accounting, and that the defendant be compelled to pay to the plaintiffs the value of the lots, less such sums as the defendant may have expended in the payment of taxes and improvements.

V. Van Dyche, for app’lts; B. D. Penfield, for resp’t.

The learned counsel for the plaintiffs insists

in his first point that title to the lots was never vested in Messenger, because he says a valid delivery of the deed and an acceptance of it by him were not proved. The plaintiffs are not in a position to raise this question, for they alleged in the fourth division of their complaint that the legal title to the lots in question was in Messenger until he conveyed them to the defendant. This allegation was not controverted by the answer. It was not found as a fact nor as a conclusion of law that there was not a valid delivery of the deed from the master in chancery to Messenger, nor was the referee requested by either party to so find or hold.

But if this position could be maintained it would not aid the plaintiffs, for the result would be that the title of the owner of the fee when the mortgage was foreclosed was not divested by the master’s deed, and both the plaintiffs and defendant would be without title to the lots.

p. 590

David H. Robertson having procured these lots to be conveyed to Messenger for the purpose of defrauding his creditors, had no legal estate in them which could be reached by execution, Garfield v. Hatmaker, 15 N. Y., 475 , or which on his death descended to his heirs. Moseley v. Moseley, 15 id., 334; Wait on Fraud. Convey., § 121. See, also, 1 R. S., 728, §§50, 51, 52; Underwood v. Sutcliffe, 77 N. Y., 58 ; Brewster v. Power, 10 Paige, 562 ; Bater v. Lidgerwood Manf. Co., 50 Hun, 420 ; 20 St. Rep., 778 ; Hamilton v. Cone, 99 Mass., 478 .

This rule is a penalty imposed by the law for the prevention of frauds and for the protection of subsequent purchasers (Rev. notes), and the reason for its application is not weakened in case the grantee, as in the case at bar, was not a participant in the fraud.

It is clear that neither Robertson in his lifetime, nor his heirs -since his death, could have recovered the land or its proceeds from Messenger, or from his grantee by any legal or equitable remedy. See the authorities above cited. It is alleged in the complaint •that David H. Robertson was the owner of the mortgage which was foreclosed, but no such fact was found. On the contrary, the facts found compel the inference that he . had no interest in the mortgage, nor in the land covered by it.

Proceeding on the assumption that the deed to Messenger vested the legal title in him, did the agreement which the learned referee found was made between the defendant and Messenger create a legal or equitable interest in the lots in favor of the plaintiffs, or -did it raise a liability on the part of the defendant in favor of the plaintiffs which can be enforced in this action ? The referee finds: •“He (Messenger) was told by defendant that they (the lots) had-been sold for taxes, but could be redeemed; he (Messenger) then knew that David H. Robertson and his oldest son and daughter were dead, and that the other children were scattered, but living at places unknown to him; and after some conversation touching ■a supposed interest of defendant in the lots (and which is referred to in the deed) he said to defendant, “ I will tell you what I will do; if any of Mr. Robertson’s heirs should turn up in distress, I will transfer this property to you, providing you will help them;” •to which defendant said, “Agreed; I will do so; ” and when asked the amount, said Messenger named one or two hundred dollars, that being about the value of the lots when they came to his hands.

On that occasion a quit-claim deed was made and executed by Messenger to the defendant granting all his right, title and interest in the lots, under which deed defendant holds the same, for which no actual consideration was paid, but the sole consideration was the promise herein above stated.

This action was not brought to enforce the agreement, nor do the findings show the existence of facts creating a liability under it. There is no finding, or request to find, that the defendant procured the conveyance to be made by the false representations •of himself or of his attorney. We think the facts found do not establish any liability on the part of the defendant to the plaintiffs

p. 591

•which, can be enforced in this action. As before remarked, the' evidence given on the trial is not contained in the record, and so this court has no means of ascertaining the merits of the controversy except as disclosed by the decision of the referee. For some reason, which we must assume was justified by the evidence, the learned referee refused to allow the defendant costs, and no costs were allowed him at general term. Following the views of the courts below upon the question of costs, the defendant will be denied them in this court.

Judgment affirmed, without costs.

All concur.

Footnotes

1 Affirming 25 St. Rep., 449 .