Case Name: Diefendorf against Spraker and Ehle, Executors, &c
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1851
Citations: 10 N.Y. 246
Docket Number: 
Parties: Diefendorf against Spraker and Ehle, Executors, &c.
Judges: 
Reporter: New York Reports
Volume: 10
Pages: 246–259

Head Matter:
Diefendorf against Spraker and Ehle, Executors, &c.
N owning real estate, heavily encumbered by mortgages and judgment, conveyed it to V, upon the latter assuming to pay $2500 of such encumbrances. At the same time L, being defendant with N as surety and endorser in certain of the judgments, confessed a judgment by bond and warrant of attorney to V for $3000, conditioned for $1500; the condition being that L would indemnify V against all judgments beyond the $2500 which he had assumed to pay, which should be valid liens upon the premises. V then executed hack to L an instrument which, after reciting the above, promised “ that if, and whenever, I dispose of said real estate, I shall realize from such sale more than $2500 and interest thereon to the day of sale, I will pay to him such overplus to the extent (.and no further) that he shall have paid on the judgments aforesaid, for the benefit of the said N, as aforesaid, and interest thereonHeld, that this transaction created a trust in V to sell the property and apply the proceeds, above the amount of the encumbrances paid by him according to agreement, to reimburse L for such payments as he should have made upon the judgments.
After holding the title for six weeks, V reconveyed to N, for a nominal consideration : Held, that he could not thus divest himself of his character as trustee, without the assent of L, the eestud que trust, although all parties were restored to the same condition as before the transaction.
Afterward N sold the premises. V, having paid and become the owner of certain of the judgments above mentioned, joined in the conveyance in order to discharge his lien; and received afterward from N $1500 of the purchase money: Held, that this money, after deducting the amount of the judgments paid by him with interest, must be applied by V to reimburse L for payments made by him upon the judgments.
Prior to the commencement of this suit one Lighthall had filed his bill in chancery against John Lintner, to obtain satisfaction of a judgment which he had recovered against him at law; and a receiver was appointed of the property and effects of Lintner. At the sale of the doubtful claims of Lintner, the complainant in this suit bought a claim against Robert Gf. Nellis, which he soon afterwards prosecuted and obtained judgment upon by default, to the amount of $1,668.12. He also purchased a claim of Lintner against the estate of R. R. Van Evera, deceased. These claims arose out of the transactions narrated below; and the plaintiff, on return of execution against Nellis unsatisfied, filed this bill, in 1845, against the defendants as executors of the will of Rynear R. Van Evera, father-in-law of Nellis, to enforce payment of the demand out of Van Evera’s estate. The facts relied upon by the complainant to charge the estate of Van Evera with the debt are, as stated by McComí, J., who dissented, as follows:
Nellis was the owner of village property at Fort Plain, encumbered by mortgages to the amount of $3700. He owed other debts, and both he and his endorsers, Abraham and John Lintner, had been sued, and a number of judgments were obtained at different times against him, some of which included the Lintners as his endorsers; and further judgments against them all were expected. Van Evera (father-in-law of Nellis), with a view to his temporary relief and the relief of his endorsers, agreed to advance $2500, $270 of which to be applied to the redemption or purchase of Nellis’ personal property which had been sold under execution, and the residue ($2230) to be applied to the judgments then liens on his real estate, according to their priorities, beginning with the oldest. As an inducement for making this advance, Nellis was to convey to Van Evera the village property (being all the real estate which it appears he owned) subject of course to the mortgages; and as it was supposed that the $2230 might not be sufficient to pay all the debts then in judgment, something more was required for Van Evera’s protection and indemnity than the mere conveyance of the property; and as the Lintners would be relieved to a considerable extent by the advance of this money, they agreed to confess a judgment to Van Evera, which should be a security to him to the extent of $1500 for his indemnity against liens by judgment on the property to be conveyed, exceeding the $2230. This arrangement was carried into effect. Nellis and his wife executed, a deed of the property to Van Evera. The Lintners confessed the judgment. Van Evera advanced a portion of the money. On the 8th February, 1836, a writing was drawn up and signed by Van Evera, in which, after reciting that he had taken from Nellis a title to his tavern stand, and had agreed to pay the incumbrances thereon by judgment, to the amount of $2230, and that the Lintners had confessed a judgment as security to him that he should be indemnified against damage by reason of other judgment liens beyond the $2230, he undertook as follows: “Now I promise them and each of them that if and whenever I dispose of said tavern stand and appurtenances, or any part thereof, I shall realize from such sale more than $2500 and interest thereon to the day of sale, that I will pay to them such overplus to the extent (and no further) that they or either of them shall have paid on the judgments aforesaid for the benefit of the said Robert G-. Nellis as aforesaid, and interest thereon.” John Lintner paid judgments to the amount of $1293.25, which is the fund claimed by the appellant, with interest. Van Evera held the title to the property for about six weeks, and then, without the knowledge or consent of John Lintner, reconveyed to Nellis for the consideration of $1. Nellis occupied the property after the reconveyance to him for four years. The rent was worth from $500 to $600 per year. He then sold it for $3000 in cash over and above the mortgage encumbrances; paid Van Evera $1500 of the money and kept an equal amount himself, and Van Evera executed a quit claim or release of the property to the purchaser. In the meantime all the judgments which were encumbrances upon the property had been paid.
The cause was heard on pleadings and proofs by Willard, vice-chancellor of the fourth circuit, who dismissed the bill with costs. This decree was affirmed by the supreme court; Mr. Justice Paige, however, dissenting from Willard and Hand in that judgment. The cause was argued here by
H. P. Allen for the appellant, and M. T. Reynolds for the respondents.

Opinion:
Jewett, J.
The evidence establishes the fact that all of the judgments mentioned, or so much as remained at that time unpaid upon them, have been fully paid, and the greater part thereof in the winter and spring of 1S36, of which the testator paid, on three of the judgments, in the aggregate, the sum of $503.26, and took an assignment of them to himself, to wit, on the 4th of April, 1S36, he paid $198.13, and on the fourteenth of April in the same year $305.13; that Abraham Lintner paid on said judgments $568.44, and John Liutner paid $1293.25; that the several defendants in said judgments, who were the real debtors, paid of the whole amount of said judgments, $1876.57, and as to the balance of the whole sum due and paid, being $741, the evidence does not show who paid it. But there is no presumption that the testator paid it.
By the agreement made between the testator, Nellis, and the two Lintners, and the conveyance by Nellis and wife to the testator of the real estate which he owned situate at Fort Plain, the relation of trustee and cestuis que trust was created between the testator and the Lintners. The premises were conveyed to the testator by Nellis and wife, for the express purpose of being converted into money by sale subject to said mortgages by the former; and so much of the proceeds thereof as should remain after applying such sum as the testator should have advanced of the $2500 with interest, the judgments being paid, to reimburse the two Lintners such sums as they should have jointly or severally paid of said judgments, with interest. The testator accepted the trust by accepting the conveyance, and taking the confession of the judgment, and entering into the agreement. He was therefore bound to execute it with fidelity and reasonable diligence, and he could only be discharged by administering the trust himself or putting the administration in the hands of the court of chancery. (2 Spence's Eq. Jur., 918, 920.) The reconveyance of the premises to Nellis by the testator in March, 1836, without any effort on his part to execute the trust, for the consideration of one dollar, was a palpable violation of his duty as such trustee. He could not divest himself of the character of trustee, till he had performed the trust, without communication to his cestuis que trust, not being authorized so to do by his appointment, although he may have been thus advised by his counsel.
It is said, however, that the reconveyance was made with the knowledge and assent of the Lintners, but of that there is no evidence. The witness, Wagner, does not prove it. He testified expressly, that he did not know that they knew it, and his testifying that he had no doubt but that they knew it, although objected to by thé complainant, is no evidence of the fact. It appears that Nellis continued in the possession of the premises, or in the receipt of the rents and profits thereof, until March, 1840, when Robert Crouse, in consideration of the release by Nellis and the testator, of their right, title and interest in said premises to him, executed to one or both of them his promissory notes for the payment of $3000, one-half of which Nellis took, and the other half the testator received to his own use. Crouse was abundantly responsible, and the notes have since been paid or might have been collected.
The case shows that Abraham Lintner, on the 30th of March, 1840, came to a settlement with Nellis in respect to the $568.44, which he had paid pursuant to the arrangement of the eighth of February, and released to him all his claims in consequence thereof. John Lintner having performed the agreement on his part, and having paid upon the judgments mentioned $1293.25, and the testator having received $1500 of the proceeds of the sale of the premises, and not having paid out beyond the sum of $503.26, was in justice and equity liable to pay over to John Lintner at least the surplus remaining in his hands, with interest. This claim of John Lintner against the testator belongs to the complainant. He became the purchaser of it at a sale made by the receiver in the suit in chancery brought by Lighthall against him.
I do not think that Nellis was a necessary party to this suit, and if he was that objection is not taken by the answer. Whether he was a competent witness or not it is not necessary to decide, for the complainant's claim is well sustained, laying his evidence entirely out of the case. I therefore think that the decrees of the courts below were erroneous, and should be reversed, and a decree made in favor of the complainant that he recover against the defendants, as executors of the testator, the sum of $1500 with interest from the 30th of March, 1840, deducting therefrom the sums of $198.13 with interest from the 4th of April, 1836, and $305.13 with interest from the 14th of April, 1846, with costs in the court below.
A majority of the judges concurred in the above opinion.