Case Name: William H. Ellis, Respondent, v. Polly Ellis Cole and Ida Ellis Hutches, Appellants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1905
Citations: 105 A.D. 48
Docket Number: 
Parties: William H. Ellis, Respondent, v. Polly Ellis Cole and Ida Ellis Hutches, Appellants.
Judges: 
Reporter: Appellate Division Reports
Volume: 105
Pages: 48–56

Head Matter:
William H. Ellis, Respondent, v. Polly Ellis Cole and Ida Ellis Hutches, Appellants.
Decree in a creditor’s suit—how far its provisions, directing that payments he made from certain rents and profits of land to certain of the defendants, a,re conclusive as between them and their codefendant, the judgment debtor.
On March 4, 1894, William H. Ellis, being then the owner of a farm incumbered by a §2,000 mortgage and also the owner of a life estate in a house and lot, the fee of which was in his two children, entered into a contract with his children, whereby he conveyed the farm and the house and lot to such children, the latter agreeing to pay him the rents and profits of the premises conveyed after deducting certain taxes and expenses of care and maintenance, including the interest on the §2,000 mortgage. It was further agreed that in case the premises should be sold, the money should be applied in payment of the §2,000 mortgage or be invested in bond and mortgage and that the interest should bo paid for Ellis’ support and maintenance.
The children sold the house and lot for §1,900 and satisfied the mortgage on the farm with such $1,900 together with §100 advanced by them. Thereafter one Havens, a creditor of Ellis, brought an action to set aside the conveyance from. Ellis to his children, as made in fraud of his creditors. The creditor’s action, to which Ellis and his children were parties, resulted in a decree appointing a receiver of the rents and profits of the premises in question, who was directed to receive the income to which Ellis was entitled.
The decree further directed such receiver to pay to Ellis’ children the interest upon the §2,000 paid for the discharge of the mortgage. Pursuant to such decree, the receiver, for several years, paid to Ellis’ children the interest upon such §2,000.
In an action brought by Ellis against his children to recover the payments of the interest upon the §2,000 mortgage, so made to the latter by the receiver, it was
Held, that the complaint should be dismissed upon the merits;
That the action was barred by the decree in the judgment creditor’s action, as the necessary eifect of such decree was to adjudicate that Ellis’ children and not Ellis were entitled to the interest on the §2,000 represented by the bond and mortgage;
. (Per Hrscocx and Spring, JJ.) That Ellis could not maintain the action for the further reason that, if the moneys sought to be recovered were part of the rents and profits of the farm, the receiver appointed in the judgment creditor’s action was entitled thereto, rather than Ellis.
McLennan, P. J., and Williams, J., dissented.
Appeal by the defendants, Polly Ellis Cole and another, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Tates on the 1st day of August, 1904, upon the decision of the court rendered after a trial before the court without a jury at the Tates Trial Term.
M. A. Leary, for the appellants.
H. C. Harpending and H. B. Harpending, for the respondent.

Opinion:
Stover, J.:
The plaintiff is the father of the defendants. Plaintiff was the owner of a farm and, at the time of the making of the contract under which the cause of action arises, had a life estate in a house and lot, the estate in remainder being in the defendants. At the time of making the contract there was a mortgage of $2,000 upon the farm.
On the 5th of March, 1894, the contract in question was entered into between the plaintiff and the defendants, by which the plaintiff conveyed the farm and the house and lot to the defendants, the defendants agreeing to pay from time to time, as collected or received by them, the rents and profits of the premises conveyed, after deducting therefrom the interest on the $2,000 mortgage,-and taxes and expenses of all kinds incurred in the care, preservation and management of the premises. It was further agreed that in case the premises should be sold the moneys should be applied in payment of the $2,000 mortgage, or be invested in bond and mortgage,, and the interest paid for the maintenance and support of the-plaintiff.
The defendants sold the house and lot for $1,900, and on March 28, 1896, took up the mortgage on the farm with the purchase-money of the house and lot, and by the additional 'payment of $100 by the defendants the mortgage was satisfied and discharged of record.
After the conveyance of the farm and the house and lot by the-plaintiff to the defendants, an action was commenced in the Supreme Court by a creditor of the plaintiff to set aside the conveyance from, the plaintiff to the defendants as in fraud of creditors. A decree was entered in that action in February, 1899, in and by which a receiver of the rents and profits of the premises was appointed, with direction to receive the income to which the plaintiff in this-action was entitled, and further directions as to the disposal of funds which might come into his hands as the proceeds of the life-estate of the plaintiff herein. The decree further directed that said receiver should pay to Ida Hutches and Polly Cole, the defendants, in this action, the interest upon the $2,000 invested by them in the bond and mortgage, or the legal rate of interest; the adjudication thereby being, necessarily, that these defendants, and not the plaintiff here, were entitled to the interest upon the $2,000 represented by the bond and mortgage.
This action is brought to recover the interest upon the $2,000-mortgage for six years from April 1, 1898, being the sums paid to defendants by the receiver under the decree in the creditor's action.
A summary of the situation at that time was this : The property having been disposed of under the contract, the question then arising between the plaintiff here and his creditor, it was adjudicated that the plaintiff here or his judgment creditor were not entitled to the interest upon the bond and mortgage, but that these defendants, had become the owners, and entitled to the interest or income arising from the bond and mortgage. The court in that action must have necessarily found that the plaintiff here was not the owner of the proceeds of the mortgage, and that his daughters, the defendants here, were such owners, in order to have decreed in the creditor's action that the defendants were entitled to the interest on the bond and mortgage.
This decree, we think, was binding upon all of the parties, and was a final and complete adjudication of their rights in the property in question. They were all parties to the record, and a complete adjudication was had as to the ownership of the fund now brought in question in -this action. This plaintiff may perhaps have been willing that in that action the title should have been adjudged to be in his daughters and thus prevent the payment of the claim of his creditor; but whether willing or otherwise the adjudication was definite and binding upon all of the parties to the action.
The decree was properly pleaded and proven and, we think, it was a complete bar to the maintenance of this action, and the complaint should have been dismissed upon the merits.
Spring, J., concurred ; McLennan, P. J., and Williams, J., dissented.