Case ID: ad_143/html/0673-01.html
Source: Caselaw Access Project
Author: {"author": "Spring, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

George M. Newton, as Administrator, etc., of Elizabeth Newton, Deceased, Appellant, v. Jesse Evers and Others, Respondents, Impleaded with Mary E. Hartman and Others, Defendants.
    Fourth Department,
    March 8, 1911.
    Mortgage — foreclosure — estoppel — attacking own title — presumption as to entry — invalidity of conveyance by committee of incompetent — subsequent mortgage — ratification of act of committee — rights of owner who is not an innocent purchaser.
    The owner of lands is estopped from attacking the validity of a conveyance on
    . which his own title depends for the purpose of defeating the foreclosure of a mortgage on the premises.
    Where there is no evidence as to the fact the court will assume that every grantee goes into possession of lands pursuant to his deed.
    The owner of lands conveyed them to B. for §500 and a purchase-money mortgage of §1,000. B. was later adjudged a lunatic and one V. was appointed committee of his estate. The jury found on an inquisition that B.’s lunacy commenced before the delivery of the deed. Prior to the adjudication of lunacy V. executed a deed, purporting to be made by him as committee, reconveying the property to the original owner for §500 and the cancellation of the §1,000 mortgage. After his appointment as committee V. reacknowledged the deed purporting to have been made by him in that capacity. The original owner later conveyed the premises to other parties who, in turn, conveyed and took back a purchase-money mortgage for $1,500. The land then passed to several grantees, each of whom in turn assumed the mortgage. The last owner conveyed by warranty deed without reference to the mortgage. His grantee D. conveyed by quitclaim deed with covenants against grantor to the defendant owner', who was the wife of an attorney familiar with the chain of title. The husband procured the deed to be made to his wife, but no consideration passed therefor. Later B. was declared sane and V. accounted to him for his property, paying over the §500 received from the original owner of the land for the reconveyance. Defendant’s husband obtained for B. a quitclaim deed of his interest in the property a week after he was declared sane. Ho consideration for this deed was shown.
    
      Held, in reversing a judgment in defendant’s favor in a suit to foreclose the §1,500 mortgage, that, although Y. exceeded his authority in executing the deed, his reconveyance of the property to the original owner should not be disregarded by a court of equity;
    That defendant, so far as she depends for her title on the conveyance from D., is estopped from repudiating the source of that chain of title and from attacking the right of the original owner to convey after the attempted reconveyance by Y.
    
      That B., by receiving-the §500 after he became sane, ratified the illegal act of Y. in reconveying the premises, and, therefore, defendant, so far as she claims title through him, cannot repudiate the reconveyance;
    That defendant was not an innocent purchaser, as she had knowledge of the plaintiffs mortgage when she acquired title and paid nothing for the property.
    McLennan, P. J., dissented.
    Appeal by the plaintiff, George M. Newton, as administrator, etc., from a judgment of the Supreme Court in favor of certain of the defendants, entered in the office of the clerk of the county of Erie on the 12tli day of August, 1910, upon the decision of.the court rendered after a trial at the Erie Special Term, dismissing the the complaint upon the merits as to said defendants.
    
      W. S. Thrasher and J. L. Hurlbert, for the appellant.
    
      Frank C. Fergusonj for the respondents Kruse and Ferguson.
    
      D. N. MeNaughton and Willard W. Saperston, for the respondent McKenzie.
   Spring, J.:

This action is to foreclose a mortgage.. On the'17th of September, 1884, one Woodward conveyed to William Blakely about twenty-seven acres of land in the town of Evans, in Erie county, for the consideration of $1,500. He took back a purchase-money mortgage for $1,000, and Blakely paid him $500 in cash. In the fall of 1885 lunacy proceedings were commenced, and Blakely was adjudged a lunatic September twenty-fourth of that year, and the jury by their inquisition found that the lunacy commenced prior to the delivery of the deed mentioned. John Vellum was appointed committee of the person and estate of the lunatic. On the 16tli day of September, 1885, and before the adjudication was determined, Vellum executed a deed purporting to be made by him as committee to Woodward of the premises mentioned. Woodward discharged the mortgage for $1,000 which had been given to him by Blakely and executed a mortgage to Vellum as committee for the sum of $500, which he .subsequently paid. This transaction, as the court has found, was with the evident purpose of undoing what had been done by the deed from Woodward to Blakely. The court further finds: “ That thereupon as a part of this attempt to undo what had been done, the said Woodward satisfied the mortgage of $1,000 which had been given to him by Blakely and to secure the payment of the $500 in purchase money which Blakely had paid him, executed and delivered to the committee a mortgage on the property for $500.”

Vellum, after his appointment as committee, reacknowledged tfre deed purporting to be made in that capacity. Of course Vellum exceeded his authority in executing this deed and in carrying out this transaction, but it will not be disregarded by a court of equity when called upon to adjust the rights of the parties. Woodward supposed he was revested with the title, and he so acted. On September 16,1886, he conveyed to Louisa J. Banner these premises, which deed was recorded in October. August 5,1887, Mrs. Banner and her husband conveyed to Jesse Evers, who gave back a purchase-money mortgage for $1,500, and that is the mortgage which the plaintiff as owner by assignment has attempted to foreclose; and a bond accompanied this mortgage.

Conveyances were made in the line from Banner until the title became vested July 21, 1888, in John Henry and Helena Kruse, each grantee assuming and agreeing to pay the bond and mortgage as part of the purchase price. The Kruses conveyed to Drefs and Cook by warranty deed without reference to the mortgage in suit, and Drefs and Cook in August, 1889, conveyed by quitclaim deed, with covenants against grantor, to Julia E. Ferguson, the present respondent, and there was no consideration for this deed, which was recorded.

This business was transacted for Mrs. Ferguson by her husband as her attorney, and he stipulated on the trial that he acted for her in all these transactions. Mr. Ferguson was familiar with the history of the line of conveyances and the mortgages above described.

Drefs, in narrating the transaction with Ferguson, and his evidence is undisputed, testified: “ Ferguson said, ‘ Although you have a warranty deed to the property, you have not title, because there is a crazy man in that.’ He says that he could not give title to that property, said there is also a mortgage of $1,500 against it, and says you cannot sell it or do anything with it. Well, says I, Mr. Ferguson, what would you suggest? He said: ‘I do not know, I will look into it.’ I says, take your own time, here are the papers, look into it and see what you will do with it. Ferguson sent word, and says, ‘We have got that deed ready of the property, if you want to give it.’ I said we will sign it; we went down and signed the deed. He did not tell us who the crazy man was, he did tell us about the mortgage. Ferguson said there was a mortgage of $1,500, he said the man who loaned the money should have known, that we ought not to have loaned the money, said something about title not right, as we did not care to hold the property we made him a present of it. Ferguson did not tell us who we were dealing with; we understood it was Ferguson himself. We thought so because of the remarks made that day when we went to Hubbell’s office to take the acknowledgment. Ferguson said: ‘ My clients are going to make me a present of this piece of property.’ I did not understand that the conveyance was to Ferguson’s wife until after this lawsuit was started. I did not know that before to-day.”

Blakely on April 28, 1891, was adjudged to be sane and Vellum discharged as committee. Mr. Ferguson was attorney in the proceeding in procuring the order adjudging Blakely to be restored to sanity. Vellum was required to account as committee of Blakely. Mr. Ferguson represented the latter, and the balance in the hands of the committee was the sum of $537.51, which included the $500 he received from Woodward, and the money was paid to Blakely or his attorney as the order, dated June 3, 1891, directed.

By quitclaim deed, dated May 4, 1891, a week after he was declared to he sane, Blakely conveyed to Mrs. Ferguson. There was no consideration for the deed from Drefs and Cook to Mrs. Ferguson, and the evidence does not disclose any in that given by Blakely to her, and apparently none is recited in the conveyance. The evidence does not show directly that all the parties to these deeds went into possession of the property, but it does not show to the contrary; and we, therefore, have the right to assume each grantee went into possession in pursuance of his deed. (Parkinson v. Sherman, 74 N. Y. 88.)

The interest was paid on the mortgage until 1889, but none has been paid since Mrs. Ferguson obtained title to the property.

The plaintiff commenced this action to foreclose the mortgage and the respondent, Mrs. Ferguson, defended on the ground that the mortgage was invalid because Woodward obtained no title by the deed from Vellum. It is true that Vellum could not vest Woodward with the legal title by the unauthorized conveyance which he made. W oodward, however, did obtain what purported to be a conveyance and went into possession of the property. He and Vellum supposed that by accepting the deed, discharging the mortgage, etc., the rights of the parties were exactly the same as if no conveyance had been made by Woodward to Blakely. No matter as to the validity of this conveyance to Woodward. Each of the grantees after the mortgage was given, down to and including the Kruses, assumed and agreed to pay this mortgage, and they are estopped from attacking the validity upon which their own title depended. (Parkinson v. Sherman, 74 N. Y. 88, supra ; Cottle v. County of Erie, 57 App. Div. 443, 448 et seq.; Hartley v. Harrison, 24 N. Y. 170 ; Remington & Son Pulp & Paper Co. v. Caswell, 126 App. Div. 142, 150.)

The title which Mrs. Ferguson obtained from Drefs and Cook was in this same line of conveyances, and she is estopped, so far as she depends upon that conveyance, from repudiating the source of title in Woodward.

Blakely ratified the transaction between Vellum and Woodward. The only money which Blakely parted with when he purchased the property of Woodward was the sum of $500. He gave back a mortgage, which was discharged. Vellum retained in his custody, as committee, the $500, which were paid to him by Woodward for the purpose of squaring matters with Blakely or his committee. The payment of the $500 put Blakely in precisely the same situation as if he had never-obtained the deed from Woodward. The committee accounted for this money and paid it over to Blakely after he was restored to sanity. Blakely could not receive this money and then disclaim the validity of the title which Woodward held. If he sought to repudiate the unauthorized conveyance of Vellum, who assumed to act for him, to Woodward, he must restore the $500 which he had received. He could not at the same time successfully assail the title and still keep the fruits of it.

If the title was in Blakely when he conveyed to Mrs. Ferguson* he must have held it subject to the lien of the consideration which he agreed to pay for it, and that is now represented by the mortgage in suit. With his mortgage of $1,000 canceled without payment, and the $500 returned to him, he held the title without having paid anything for the land or without performing his agreement with Woodward. He chose instead of retaining the premises subject to this lien to ratify the transaction between Vellum and Woodward by accepting back the money which he had paid.

I think from the evidence in this case that Mrs. Ferguson is in no better situation to repudiate the deed to Woodward than is Blakely. In all these proceedings Mr. Ferguson participated. He knew of the line of conveyances, of the giving of the mortgage actually, as well as the presumptive knowledge which came from the recording of the conveyances containing the assumption clause. He knew that the $500 was paid to Blakely and knew that it included the money from Woodward to the committee.

The court, at the request of the plaintiff’s counsel, found as follows : “ Twenty-fourth,: That in all the transactions in connection with said lunacy proceeding, or the proceedings to declare said Blakely again sane and restore him to his property, said Frank C. Ferguson conducted said proceeding and took said deed from Blakely to his wife with the full and complete knowledge on his part of the facts concerning this mortgage, its existence, that it was unpaid, and with full and complete knowledge on his part of the defect of the deed from Vellum, as committee, etc., to said Woodward, and with full knowledge and understanding on his part of all the facts before found relating thereto. That in all such proceedings and in all he did he was the agent of the defendant, Julia E. Ferguson, and stipulates on this trial that she should be charged with notice of every fact within his knowledge; therefore, the defendant, Julia E. Ferguson, had full knowledge of all the facts at the time when she received from Blakely the deed and conveyance before described.”

Mrs. Ferguson, therefore, is not an innocent purchaser. In the first place, she acquired her title with full knowledge of the plaintiff’s mortgage. In the second place, there is no evidence in the case to show that she ever paid anything for this property. Fer-prison did not testify, and there is no proof whatever that indicates she parted with anything when she obtained this title.

The judgment should be reversed.

All concurred except McLennan, P. J., who dissented, upon the opinion of Pound, J., delivered at Special Term (68 Misc. Rep. 354).

Judgment reversed and new trial ordered, with costs to the appellant to abide event, upon questions of law and fact.