Case ID: ad_14/html/0120-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Barrett, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Harry K. Knapp, Individually, and as Executor, etc., of Gideon Lee Knapp, Deceased, and Shepherd Knapp, Respondents, v. Charlton W. Crane, Appellant.
    
      A judgment in favor of creditors declaring a deed fraudulent leaves it operative as between its parties—presumption that a mortgage is paid — a decision based on inconsistent reasons is not res adjudicata — a latent equity cannot affect a bona fide purchases' — an awa/rd by a city, when not a payment in recognition of a mortgage.'
    A judgment which decrees that a deed is fraudulent as to. the creditor who has brought an action to set it aside, and as to other creditors of the common debtor, leaves the deed operative as between the parties, to it; and where the rights and remedies of such creditors have been extinguished by lapse of time, the judgment does not constitute a defect in the title to the premises covered by the deed.
    Where there is no proof of payment of principal or interest upon a mortgage for a period of thirty-four years, which has elapsed since it became due, the mortgage does not constitute a valid objection to- the title to the property described in it.
    "Where inconsistent reasons are advanced for a decision, it is not s'es adjudicata as to the facts involved in support of either reason.
    A latent equity cannot prejudice a purchaser for value and without notice.
    In order that a payment may have the effect of extending the time within which suit may be brought upon a mortgage, the payment must be made by the party' liable or his authorized agent, and the payment by a city of an award in a street opening to one claiming it under certain mortgages, and also under a deed,, made without the privity of the person liable under the mortgage does not establish a payment by the latter in recognition of the mortgages as a valid •obligation.
    
      ' Appeal by the defendant, Charlton W. Crane, from a judgment •of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 24th day of October^ 1896, upon the report of a referee, decreeing the specific performance of a contract for the purchase of real property. ‘
    The contract was made February 7, 1895, by Shepherd Knapp as agent for Gideon Lee Knapp. The latter thereafter died; and the present plaintiffs, who succeeded to his title, were substituted as plaintiffs. The premises in question are situated on the northerly side of One Hundred and Sixtieth street, between Tenth and Eleventh avenues, in the city of New York. They are twenty-five feet in front and rear by ninety-nine feet eleven inches in depth. NTo question is raised as to the title of the plaintiffs to any portion of the premises except a strip eleven feet in width extending transversely across the rear of the property, constituting the southerly Iialf of what was formerly known as Knapp’s lane. This strip was ■originally owned by Dennis Harris, who, on December 1, 1855, conveyed it, together with other property, to John Dailey. Dailey conveyed it to Hollins in 1889, for a valuable consideration. It is not disputed that Hollins’ interest is vested in the plaintiffs; and the sole question is, whether he' acquired good title to this strip by Ms deed from Dailey.
    On October 21, 1856, Blanco, a judgment creditor of Harris, cbtained a judgment against Mm and Dailey decreeing these deeds to be void as against the plaintiff and the other creditors of Harris. In April, 1875, proceedings were taken to widen Eleventh avenue. Among other awards was one made to unknown owners for a strip included in the southerly half of Knapp’s lane, and lying about 250 feet west of the land now in question. One Buckley applied for this award as the assignee of Sarah Harris, wife of Dennis Harris. Dailey claimed in opposition. A referee was appointed to pass upon this and other claims. He decided in favor of Buckley ; his report was confirmed at Special Term; and the order entered "áhereon was affirmed at General Term and by the Court of Appeals.
    Further facts are stated in the opinion.
    
      8. Sidney Smith, for the appellant.
    
      Edward, W. Sheldon, for the respondents.
   Barrett, J.:

Three objections are made to the title to the eleven-foot strip, which will be considered in order.

First. It is said that the judgment recovered by Blanco divested Dailey’s title.' The judgment decreed that the deed of December 1, 1855, was made “ with intent to defraud, hinder and delay the plaintiff and other creditors,” and that- it was “ fraudulent and void as-against said plaintiff and said creditors.” It was also directed that-the register “ enter of record the judgment order in his register of' deeds, and note the same in the margin of the record of each of said-deeds so vacated and annulled, as aforesaid.”- The judgment is-quite explicit that the deed covering the strip in question is annulled only as to Blanco and other creditors, and the direction to the= register is merely to record such qualified annulment. The judgment is the ordinary judgment creditor’s decree. There can be no-doubt that it leaves the deed operative inter partes. (Rome Exchange Bank v. Eames, 4 Abb. Ct. App. Dec. 83; Waterbury v. Westervelt, 9 N. Y. 598.) After the recovery of this judgment. Blanco might have levied upon and sold this property. He did issue execution against and sell a great deal of other property conveyed by Harris, but not that in question here. Since- the remedies, of Blanco and all other creditors of Harris have long since ceased.. from lapse of time, the land is free from interference by them,, and Dailey’s title is sound.

Second. The mortgages executed by Dailey to Harris are said to-be a valid ground of objection to the title.. But more than thirty-four years had elapsed at the time this action was begun since the mortgages fell due. They cannot, consequently, be enforced (Code-Civ. Proc. § 381) unless, within twenty years, there has been a payment of either principal or interest. The defendant has given no-proof of such payment; on the contrary, the plaintiffs gave evidence tending to show affirmatively that no such payment had been, made. Bnder' these circumstances the mortgages do not constitute-a valid objection to the title. (Belmont v. O'Brien, 12 N. Y. 394; Katz, v. Kaiser, 10 App. Div. 137.)

Third. It is said that the proceedings as to the. opening of" Eleventh avenue constitute an adjudication that the deed from Harris to Dailey is void. The following state of affairs existed at the-. time the question of the right to these awards was referred for decision: Harris died in 1868, leaving all of his property to his wife, Sarah Harris. On June 1, 1860, Harris assigned to Wilson ' the two mortgages given by Dailey. Wilson the next day assigned them to Mason. Mason, in 1876, assigned them to Sarah Harris. Sarah Harris assigned to Buckley all her interest in the awards made in these proceedings, including her right to the sum due for the strip in Knapp’s, lane west of the property in suit. The referee, in his report, awarded the latter sum to Buckley as such assignee, and his decision was affirmed by the courts. The ground of the decision is not stated in the referee’s report, but is given in his opinion. He first states that Mrs. Harris’ claim was based on her ownership of the mortgages, and that Dailey’s contention that those mortgages had been released by an instrument executed by Harris in May, 1857, was not well founded. He then states that: There is another view of Dailey’s claim.” In substance, it is that, in view of the particular circumstances showing a failure of title to most of the land conveyed by Harris, the mortgages given to him by Dailey failed for lack of consideration; that the deeds failed likewise, and the whole transaction was at an end, and that, consequently, in equity title to this strip revested in Harris, and, by his will, passed to Mrs. Harris. The referee states: “ Dailey must either abandon his claim under the deeds or hold the deeds subject to the mortgages. Either way he would not he entitled to these moneys and Mrs. Harris would he.” This is the gist of the decision. The two grounds thus given for assailing Dailey’s right to the award are clearly inconsistent. One is predicated upon the validity of both deed and mortgages; the other upon their invalidity. Where inconsistent reasons are advanced for a decision it is not res adjudieata as to the facts involved in support of either reason. (People ex rel. Bridgeman, v. Hall, 104 N. Y. 170.) Thus, there is no binding adjudication as to whether or not the deed from- Harris to Dailey was void in toto. The only question actually decided is, that Buckley^ as Mrs.- Harris’ assignee, was entitled to the award.

But, if it should be assumed that an adjudication on the point exists, it was in no way binding upon Hollins, when he purchased in 1889, and cannot affect the plaintiffs. Hollins had no notice of the Eleventh avenue proceedings, for they were not of record. Assuming that Harris might have brought an action in'equity to compel Halley to release to him the legal title upon tender of the bonds and mortgages (though it is difficult to see how such an action could .have been maintained in view of the fact that Harris had assigned the mortgages), this cannot affect the plaintiffs. Till such- an action was begun and the Us pendens filed' Hollins was in no way bound by this latent equity. Such a latent equity could not prejudice a bona fide„purchaser for value and without notice as Hollins was. Hollins took subject to -the rights of- Harris’ creditors, and to no ■other right whatever. The rights of these creditors having long since -passed away, he bought a good legal title to the property and ■the plaintiffs have succeeded to it.

It is contended that the payment of the award was a payment upon the mortgages, which were thus kept alive. There again it is impossible' to determine whether the money was awarded to Buckley in right of the mortgages Or of the deed. But, assuming the former, "this could not extend the time to bring suit upon 'the mortgages. To have this effect a payment must be made by the party liable of hy his authorized agent. (Murdock v. Waterman, 145 N. Y. 55.) In this case the city of New York made .the payment. Dailey did not make it, nor was the city his agent. If he had consciously assented to the payment to Buckley, as a payment, upon the mortgages, it might successfully be contended that this made the city his agent within the meaning of the rale. But he did nothing" of the sort. On the contrary, he claimed that the money should be paid to himself and that the mortgages wore not in existence.

In every aspect of. the case we think that the title tendered was good beyond dispute and should have been accepted.

The judgment should be affirmed, with costs.

Van Brunt, P. J., Rumsey, O’Brien and Ingraham, JJ., concurred.

Judgment affirmed, with costs.-