Parkhurst v. Higgins

Headnote

Evidence — declarations of a mortgagee as to the consideration of the mortgage — admissibility of such declarations as against his assignee.

Appeal from a judgment in favor of the defendants, entered on the report of a referee.

This action was brought to foreclose a mortgage upon about twenty acres of land in the town of Elma, Erie county, executed by the above named defendants, to Caleb D. Higgins, dated the 2d day of April, 1870, conditioned for the payment of the sum of $2,500, in one year from' date, which sum was stated in the mortgage to be for the purchase-money of the premises therein described. The mortgagee died on the 28th of February, 1878, leaving a will by which the said mortgage was bequeathed to his wid ow, Mary Higgins, and she died on the 16th of February, 1882, leaving a last will and certain codicils containing certain directions and bequests relating to said mortgage, by virtue of which the said plaintiff, Mary L. Parkhurst, as residuary legatee, became entitled to the same, and in pursuance thereof the executor named in said will subsequently assigned the said mort

gage to the plaintiff as such residuary legatee, no money consideration moving from the plaintiff to the executor for such assignment. The defendant Margaret Higgins, is the wife of the defendant Edward, and the said mortgagee Caleb D. Higgins, was his elder brother. The referee found that there was no consideration for the execution or delivery of said mortgage, and that the same was not executed or delivered for the purpose of securing any sum whatever to the said Caleb; that at the time of the execution and delivery thereof, it was agreed by Caleb and Edward that as between them said mortgage should have no validity or effect, and that Caleb should never collect the same or any part thereof, and that it was never his intention to do so; that the amount stated in said mortgage as the sum secured thereby was fixed at $2,500, for the purpose of having it appear that said premises were incumbered for their full value, in case Edward should attempt to sell, dispose of or incumber the same, and for no other purpose, and the same was so understood by Edward and Caleb at the time of the execution and delivery of said mortgage. The referee further found that nothing whatever was due to the plaintiff upon the mortgage.

The court, at General Term, after considering other questions, said: “ Testimony was given on the part of the defendants, of declarations made by Caleb Higgins at the time of the execution of the mortgage, and also prior and subsequent thereto, with reference to the object, purpose or consideration of the mortgage. The plaintiff’s counsel objected to proof of any declaration not amounting to an agreement between the parties, as immaterial; also to any parol proof on the part of the defendants to contradict the mortgage, and also to any declarations of the mortgagee against the plaintiff. These objections were overruled and the plaintiff’s counsel excepted. We think there was no error in the rulings. It was competent to show by parol the actual purpose and consideration of the mortgage and the fact that it was without consideration. (Anthony v. Harrison, 14 Hun, 217 ; S. 0., affirmed, 74 N. Y., 613 ; Cady v. Jennings, 17 Hun, 214 ; Produce Bcrnh v. Bache, 30 id., 351 .) The declarations of the mortgagee on that subject were properly received as against the plaintiff, the latter not being a purchaser for value, but her claim being merely as a privy by representation through

the mortgagee. (Ivat y. Finch, 1 Taunt., 141; Smith y. Smith, 3 Bing. [N. 0.], 29 ; 1 Gr. Ev., § 189; Ton Sachs x. Kretz cmd ors., 112 N. Y., 548 .) The plaintiff not being a purchaser for value, the declarations of the mortgagee were admissible the same as if the mortgagee were living and prosecuting the present action, in which case his declarations tending to show that the mortgage was without consideration would be admissible if made at the time of the execution of the mortgage, or while the parties to it were negotiating in respect to it, or at any time subsequent thereto, the mortgagee continuing to hold the mortgage till the time of his death.

“In Paige v. Gagwin ( 1 Hill, 361 ), and other like cases, the party against whom the declarations of the prior holder were offered was a purchaser for value.

“ The case of Hutchins v. Hutehvns ( 98 N. Y., 56 ), cited by the appellant’s counsel, seems to be an authorirty for the position that the declarations of a former owner of property made by him to a stranger, before or after the time when he held title, do not bind his successor in interest, even where such successor is not a pur chaser for value. In that case, the declarations of a grantee in a deed in fee were offered to show that it was the intention of the parties that such grantee should acquire no rights under the deed, or that he should reconvey on request of the grantor without consideration. It was held that parol evidence was inadmissible for that purpose, and particularly evidence of declarations made by the grantor, to a stranger, before he acquired title to the property, as to his intention and motive in acquiring it. In the present case, however, as we have seen, it was competent to show by parol that the mortgage was without consideration. The only declarations made by Caleb, prior to his purchase of the farm, proved in the case, so far as we have discovered, were declarations made by him to Edward and his wife, or to Edward alone, when they were negotiating as to the terms of the arrangement by which the property should be secured to Edward as a home for himself and his wife. The case of Hutchins is not an authority against the admission of those declarations, and we think they were properly received.

“ Certain declarations made by the wife of Caleb, before she became the owner of the mortgage, were objected to. They, how

ever, were parts of a conversation, between her and her husband while he owned the mortgage, and were necessary to show the meaning of what was said by him in the conversation.”