Case ID: ad_128/html/0091-01.html
Source: Caselaw Access Project
Author: {"author": "Woodward, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Bond Realty Company, Respondent, v. Lewis H. Pounds, Appellant, Impleaded with George W. Egbert and Virginia L. Egbert, Respondents.
    Second Department,
    October 9, 1908.
    Real property — contract to sell by trustee of partnership holding legal title — specific performance — rights of partnership.
    A person holding the sole recorded legal title to lands, but who in fact holds as trustee for a partnership, may authorize a member of the firm to enter into a contract of sale as her attorney in fact.
    The partnership has a right to an accounting by the trustee of the proceeds of the contract; but having placed it within the power of the trustee to deal with the property as owner, the partners are not in a position to complain of a decree requiring specific performance of the contract of sale and foreclosing their interest in the lands as against the vendee.
    
      Appeal, by the defendant, Lewis H. Pounds, from an interlocutory judgment of the Supreme -Court in favor of the plaintiff, entered in the office of the clerk of the-county of Kings on the '23d day of December, 1907, upon the decision of the court, rendered after a trial at the Kings County Special Term, in an action to compel the specific performance of a contract to sell certain real estate.
    
      Wilson W. Thompson, for the appellant.
    
      Henry M. Man [Charles O. Protheroe with him on the brief], for the plaintiff, respondent..
   Woodward, J.:

The facts in this case are stipulated. The plaintiff is a domestic .corporation, and on the 6th day of October, 1905, the defendant Virginia L. Egbert was the sole owner -of record and holder ;of .the legal title to the real estate described in the -complaint. On that day the defendant George W. Egbert, acting as the attorney in fact for the defendant Virginia L. Egbert, his wife, made, executed and delivered a written contract for the sale of the said premises to the plaintiff upon the terms and conditions set forth in such contract. At the time of the delivery of such contract the plaintiff paid $1,500 on account of the purchase price^ Which Was received by the defendant Geoige W. Egbert for the use and benefit of the defendant Virginia L. Egbert. It was agreed that title should pass on the 6th day of November, 1905. Before the time fixed for the passing of title, and on the 28th day of October, 1905, the defendant Lewis H. Pounds commenced an action in the Supreme Court against the defendants Virginia ,L. Egbert and George W. Egbert, and filed a notice of the pendency of the action and a copy of the complaint in said action in the manner provided in the statute, claiming an interest in the property in question as set forth in said complaint, which was to the effect that the -plaintiff -in that action had, with another, purchased certain real estate, including the premises involved in this action, and that he had entered into a joint venture dr partnership with-the defendant George W. Egbert for the purpose of improving and dealing in this real estate ; that it had been agreed between .the plaintiff and the said George W. Egbert that the title should be taken in his name, or in that of the defendant Virginia L. Egbert, ¡ pending certain arrangements between themselves, and upon the performance of the conditions the plaintiff was to have the deed to a one-half interest in the premises. This action was still pending and undetermined at the time of the trial in the case at bar, and the judgment in the latter case decrees specific performance on the part the defendants Egbert, and forecloses the interest of the defendant Pounds, in so far as the plaintiff is concerned, upon the theory that if Pounds and Egbert were partners under the allegations of of the complaint in the action of Pounds against the Egberts, the defendant, as trustee of the partnership property, acting through one of the partners as her attorney in fact, was in a position to bind the partnership by the contract. If there was a partnership and Mrs. Egbert was holding the title for such partnership as a trustee, we see no good reason why she could not authorize one member of such partnership to convey the formal title, the partnership having a right to demand an accounting for the proceeds of such contract, and the defendant Pounds having placed it in the power of the defendant Virginia L. Egbert to deal with the property as the owner and holder of the legal title, is hardly in a position to complain where the court has decreed that the contract thus made shall be carried out.

It is undoubtedly true that the purpose of a notice of pendency of an action affecting the title to real property is to preserve the status of the property and of the parties, but in this case there is no change of relations. "While it is true that there are some things in the agreed state of facts which suggest that Virginia L. Egbert was . dealing with the property as principal, when all of the facts are taken into consideration, it must be apparent that she was merely dealing with the property in harmony with the partnership alleged in the complaint of Pounds, if such partnership actually existed, for it cannot be that, in the absence of any allegations of fraud, the defendant Virginia L. Egbert was making use of Mr. Pound’s partner to violate her duty as trustee of the partnership property. As the holder of the legal title she could authorize her husband to act as her agent or attorney in fact to enter into the contract for the sale of the partnership property, and it is .evident that this was the sole purpose of the transaction, Mrs. Egbert becoming liable to account for whatever came into her possession under such contract, and the decree of the court simply compels the partners to accept the contract made for them iii the name of their trustees. It is true that in Mr. Pound’s complaint he alleges' a joint venture or partnership,”- but the further allegations of his complaint are those which are consistent with a partnership only, and if there was a partnership, then the decree of the court foreclosing the partners and leaving them to their remedy against their trustee is the proper thing to do under the circumstances here presented. If there was no partnership, and Mr. Pounds was not entitled to any interest in the property, the legal title of which was concededly in the defendant, Mrs. Egbert, then the decree is harmless as against the other defendants and affords no ground for complaint.

We are clearly of the opinion that no rights of the appellant have been violated ; that he has had all of the protection under his lis pendens that the law contemplated, and that the decree of the court at Special Term was right.

The judgment appealed from should be affirmed, with costs.

Jenks, Hooker, Gaynor and Miller, JJ., concurred.

Judgment affirmed, with costs. 
      
       See Code Civ. Proc. § 1670 et seq.—[Rep..