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: 1903
Citations: 86 A.D. 233
Docket Number: 
Parties: William H. Ellis, Respondent, v. Polly Ellis Cole and Ida Ellis Hutches, Appellants.
Judges: 
Reporter: Appellate Division Reports
Volume: 86
Pages: 233–235

Head Matter:
William H. Ellis, Respondent, v. Polly Ellis Cole and Ida Ellis Hutches, Appellants.
Contract by which a father conveyed, land (subject to a moi'tgage) and a house and lot in which he had a life estate to his children who agreed to pay him the rents and profits thereof during his life—construed as to the father’s right to interest on the proceeds of the house and lot which were used to pay the mortgage.
A man who was the owner of a farm incumbered by a $2,000 mortgage held by third parties and Who also had a life interest in a house and lot, of which his two children owned the fee, entered into a contract with such children which provided that the father should deed the farm and his interest in the house and ■ lot to the children, and that the children should pay over to: the father all the rents and profits from the property so conveyed during his life, after deducting therefrom the interest on the $2,000 mortgage; that, in case the children should sell the house and lot, the moneys arising from the sale should be applied'in payment of the $2,000 mortgage or be invested-in a bond and mort-' gage, the interest accruing, therefrom to be paid to the father. - - '
Pursuant to such contract the father - deeded the property to the children. Thereafter the children sold the house and lot for $1,900, and after adding, thereto $100 of their own money, paid the $2,000 mortgage and procured it to be discharged of record.
Held, that the father was not entitled to the interest or income of the $1,900 for which the house and lot were sold.
Appeal by the defendants, Polly Ellis Oole 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 Yates on the 18th day of June, Í902, upon the decision of the court rendered after a trial at the Yates Trial Term, a jury having been waived.
C. H. Everts, for the appellants.
H. C. Harpending, for the respondent.

Opinion:
Williams, J. :
The judgment should be reversed and a new trial granted, with costs to the appellants to abide event.
The action is to recover a sum of money alleged to be owing for-interest or income from a fund in defendants' hands. The defendants deny that the plaintiff is entitled to such interest or income. The facts, briefly stated, are as follows :
The plaintiff is the father of the defendants. The plaintiff prior to the execution of the. contract hereinafter referred to, was the owner of the farm therein mentioned. His wife was the owner of the house and lot mentioned in the contract when she died, and at the time the contract was executed the plaintiff had a life estate therein, and the defendants held the fee thereof. There was a $2,000 mortgage upon the farm when the contract was executed held by other persons. March 5,1894, a contract was made between these parties wherein it was among other things provided, in brief, that the plaintiff should deed the farm and his interest in the house and lot to defendants, and defendants should pay over to the plaintiff all the rent and profits from the property so conveyed, during his life, after deducting therefrom the interest on the $2,000 mortgage, and, in case the defendants should sell the house and lot, the moneys arising from such sale should be applied in payment of the $2,000 mortgage, or be invested in a bond and mortgage, and the interest accruing therefrom should go to the plaintiff. Pursuant to this agreement the property was deeded to the defendants at the time of making the contract.
April 12, 1895, the defendants sold the house and lot for $1,900, and March 28, 1896, applied this $1,900 upon the $2,000 mortgage, and, adding .$100 of their own money, fully satisfied such mortgage ánd procured it to be discharged of record.
, The plaintiff, under this condition of things, claims he is entitled to interest or income from this $1,900 for which the place was sold, from April 1, 1898, to April 1, 1902, $114 per year, in all $456, with interest on each payment from the time it became due. And the trial court awarded judgment for this amount and costs.
The theory upon which the decision is based is that under the contract the plaintiff, upon the sale of the house and lot and the receipt by defendants of the $1,900 therefor, was entitled to the interest or income therefrom, although the defendants applied the same in payment and satisfaction of the $2,000 mortgage.
We do not so construe the contract. So long as the defendants retained all the property the plaintiff was entitled to the whole income therefrom, after deducting the interest on the $2,000 morh gage, that is, the interest on the mortgage was to come out of the plaintiff's income from all the property. When the house and lot were sold, and the mortgage paid from the proceeds of such sale, then the plaintiff was deprived of the income from the house and lot, but the interest on the mortgage did not have to be paid, so that plaintiff's income was the same as before.
The loss of income from the house and lot was offset by not having any interest to pay on the mortgage. This is the fair and reasonable construction of the contract, and we do not see how any other intention can be drawn from it.
These views lead us to reverse the judgment and direct a new trial, with costs to appellants to abide event.. .
All concurred.
Judgment reversed and new trial granted, with costs to the appellants to abide event.