Court Opinion

ID: 5183756
Source: CourtListenerOpinion
Date Created: 2022-01-06 04:45:37.236141+00
Date Added: 2024-06-11T08:26:40.080825
License: Public Domain

O’Brien, J. (dissenting):
. I cannot concur in the conclusion reached by the majority of the court. It is conceded that, in order that the plaintiff may succeed in this action, the title which he tendered must be marketable and free from reasonable doubt. It appears that the premises were part of a larger tract of which the plaintiff’s wife died seized in 1885, sub*161ject to the Hupfel mortgage of $3,000, upon which interest was payable at the rate of six per cent, and the principal of which was not payable until January, 1889. In June, 1885, six months’ interest, amounting to $108, became due, and, remaining unpaid for more than thirty days, the mortgagee declared the principal due because of such non-payment, and brought an action to foreclose the mortgage, laying the venue in the county of Westchester. The property was subsequently sold under foreclosure, and bid in by the mortgagee for $4,000. The referee’s deed was recorded on February 23,1886, and two minutes later a deed from Hupfel, the mortgagee, to Kullman, the plaintiff, expressing a consideration of $4,000, was recorded in the same office, together with a mortgage executed by the plaintiff back to Hupfel for $3,800, payable February 1,1889, with interest at six per cent. The plaintiff, prior to the death of his wife, had resided with her and her four children, three of whom were minors, upon the mortgaged premises, and maintained there a saloon, buying beer from the mortgagee, who was a brewer.
The plaintiff, as tenant by the-curtesy and as guardian in socage of his minor children, while in the possession and enjoyment of the premises, had the duty cast upon him of paying the interest on the mortgage, and thus preventing a foreclosure. In addition, as guardian in socage, he occupied a fiduciary relation towards his minor children,'which would prevent him from obtaining, at their expense, any individual benefit. Having failed to discharge the obligation which rested upon him of paying the $108 interest, and having suV sequently obtained the premises, of which the minor children were deprived by reason of his default, there would be a fair ground for contending that the title thus acquired inured to the benefit of such minors. Apart, however, from this, the facts appearing, of which a purchaser examining the record was chargeable with notice, would raise a fair inference that the forms of. law which were strictly observed in the foreclosure suit, and which divested the minors of their title in and to the property, were resorted to for that specific purpose-; because we find that the $108, which.was a small amount due for interest, was allowed to remain unpaid, and the venue of the foreclosure suit was fixed in Westchester county, while the parties all resided in the city of Hew York; and that, contrary to the *162rules of the court, a sale took place upon the premises,, instead of at the Beal Estate Exchange, and the purchase was made by the mortgagee, who, prior, and subsequent to the foreclosure, was engaged in selling beer to the plaintiff for his saloon ; and thus the inference that the suit was a" friendly and not a contested action arises.
Although the referee’s deed is dated in January, it appears that ■it was not recorded until just two minutes before Hupfel conveyed the property to the- plaintiff. ' The consideration for that conveyance was $4,000, the plaintiff giving back a mortgage for $3,S00, and paying' in cash at- that timé more than would have been sufficient to pay the interest when it was due. The effect of the foreclosure, therefore, was not -to put the mortgagee in any better position or give him more ample security-—it appearing that he increased the amount of the principal by $200 ; nor was it of any advantage to the plaintiff, because it did not assist him' to pay the interest which was due, but compelled him, in addition, to pay the costs and • expenses of the foreclosure suit; but it cut off and divested the title of. the minors. I think there is force, therefore, in the argument of the respondent, that all the circumstances attending the transaction appearing on the record raise the presumption' that thé plaintiff procured the foreclosure for the. purpose of cutting off the remainders of his infant children and acquiring the whole title for himself.
. It is claimed that the fact that the father held the title, and did not enter into this contract until after'the youngest child had become of age, in some way strengthened his position. This contract was made in November, 1896; and it would appear that the youngest child became of age in the same year, and some months prior thereto. But there is no evidence that any of the minors ever had knowledge of the conduct of their father, or that notice was in any w/vy ever hrought home to them, it appearing. that' most of them left him .about two years after the death of his wife. Their right, therefore, to repudiate his conduct, or to insist upon their rights in the property, was not terminated, nor would the Statute of Limitations be set running until after notice or knowledge had been brought home to such children.
It is further insisted that it was error not to permit orai evidence to be introduced to remove the doubt which was thus' created as to *163the validity of the plaintiff’s' title.' In excluding such, I do not think that the court erred; because, as said in Fleming v. Burnham (100 N. Y. 1): “A title open to a reasonable doubt is not a marketable one, and the court cannot make it one by passing upon an objection depending on a disputed question of fact or a doubtful question of law, in the absence of the party in whom the outstanding right is vested.” And in Moore v. Williams (115 N. Y. 592) it is said : “ A good title means, not merely a title valid in fact, but a marketable title which can again be sold to a reasonable purchaser, or mortgaged to a person of reasonable prudence as a security for the loan of money. A purchaser will not generally be compelled to take a title when there is a defect in the record title which can be cured only by a resort to parol evidence, or when there is an apparent incumbrance which-can be removed or defeated only by such evidence, and so far as there are any exceptions to this rule, they are extraordinary cases in which it is very clear that the purchaser can suffer no harm from the defect or incumbrance. In Swayne v. Lyon (67 Penn. St. 436), Sharswood, J., said: ' It has been well and wisely settled that under a contract for the sale of real estate the vendee has the right, not merely to have conveyed to him a good title but an indubitable one. Only such a title is deemed marketable, for, otherwise, the purchaser may be buying a lawsuit which will be a very severe loss to him both of time and money, ■even if. he ultimately succeeds. Hence it has been often held that a title is not marketable when it exposes the party holding it to litigation.’ ” (See, also, Greenblatt v. Hermann, 144 N. Y. 13; Irving v. Campbell, 121 id. 353; Kilpatrick v. Barron, 125 id. 751.)
The defendant was to pay $8,500 for this property. But the result of the foreclosure has been to place the plaintiff in undisturbed possession of the property, wherein he was enabled to carry ■on his business, not even being burdened, except for a short time, with the support of his children. Thus, by the default which he suffered in failing to pay $108, he has secured to himself, not only ■a long lease of the premises, but a substantial equity in money, all of which would have inured to the benefit of the minors, towards whom the plaintiff held a fiduciary relation as guardian in socage, if, in the discharge of the obligations imposed upon him by such relationship, he' had paid, the amount of $108 interest, which was *164much less than the sum that he subsequently paid in order, -for his individual benefit, to acquire, the property, of which, as .the result j apparently, of a friendly action- between himself and the-' mortgagee, he succeeded in depriving his children.
I think that the judgment below was right and should be affirmed.
Judgment reversed, new trial ordered, with costs to the appellant to abide the. event.