Court Opinion

ID: 3591060
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:39:41.088277+00
Date Added: 2024-06-11T13:42:51.442452
License: Public Domain

On March 5th, 1894, the plaintiff entered into an agreement with the defendants, who are his daughters, whereby he conveyed to them certain pieces of real estate in the county of Yates, and the defendants, in consideration thereof, agreed to apply all the rents and profits of every kind received from said real estate, after deducting therefrom interest on a mortgage of two thousand dollars on one of said parcels of land and all taxes and necessary expenses, to the plaintiff for his support and maintenance during his natural life. It contained a further provision that in case the defendants should sell the premises last described in said agreement the moneys arising therefrom should be applied to the payment of the said two thousand dollar mortgage or be invested on bond and mortgage, and the interest accruing therefrom used and expended for the maintenance and support of the plaintiff. In 1898, Lydia Havens, a judgment *Page 397 
creditor of the plaintiff, brought an action in the Supreme Court to set aside said conveyance as fraudulent and void against her judgment. In said action a judgment was rendered whereby the validity of the transfer from the plaintiff to the defendants was upheld, but it was decreed that William H. Ellis, the present plaintiff, was as to the plaintiff in that action the owner of a life estate in the premises first described in said deed "subject to the lien of two thousand dollars formerly represented by a mortgage upon said premises and heretofore paid and taken up by the defendants Ida Hutches and Polly Cole." The judgment appointed a receiver of said life estate, directed that he pay out of the net income to the defendants Hutches and Cole the interest on the two thousand dollar mortgage, and, after deducting such payment, apply the remainder of the income on the judgment recovered by the plaintiff in the action. Mrs. Hutches and Mrs. Cole had, previous to the recovery of this judgment, sold one of the pieces of land for the sum of nineteen hundred dollars, and applied that sum, together with one hundred dollars of their own moneys, to the discharge of the two thousand dollar mortgage. After the rendition of the decree in the judgment creditor's action they retained the whole interest paid to them by the receiver appointed by that decree and failed to pay it over to or apply it to the use of the plaintiff. Thereafter, in May, 1903, the plaintiff brought this action to recover of the defendants the interest on nineteen hundred dollars of said mortgage so retained by them. The Special Term awarded judgment in favor of the plaintiff. The Appellate Division, by a divided court, has reversed this judgment and ordered a new trial. From that order this appeal is taken.
The agreement between the parties was in effect that the money realized by a sale of one of the pieces should be applied to the satisfaction of the mortgage resting on the other, or should be invested and the interest thereon paid to the plaintiff, and that the plaintiff should in one way or the other, either by the payment of the whole rents and profits *Page 398 
to him or by the payment to him of the interest from the investment of the proceeds of sale, receive the annual rent of the property. This agreement the defendants were bound to carry out and cannot be relieved from their obligation to the plaintiff unless the plaintiff has been divested of his rights and claims against them by the decree in the suit brought by his judgment creditor. It is to be observed that, so far as appears by this record, no general receiver of all the plaintiff's property, assets and choses in action has been appointed, but merely a receiver of his interest in certain specified real estate, and the question, therefore, is, did the claim of the plaintiff to the interest of the sum realized from the real estate sold pass to this receiver. We think it did not. Had the proceeds of the sale been invested instead of applied to the satisfaction of the mortgage the proposition would be clear, but it was used to discharge the incumbrance on the property, the plaintiff's life estate in which was declared to be subject to the lien of his creditor's judgment. The mortgage was discharged before the rendition of the decree in the judgment creditor's action, as appears by the terms of that decree. This being the status of the property, we think it clear that the judgment creditor might have had appropriated the whole annual income of the property to the satisfaction of her judgment, but she either did not seek that result or did not succeed in obtaining it. She secured only the excess of the annual income above the interest on the amount of the mortgage formerly resting on the property. She seems to have been content with what she got, and we are at a loss to discover how the fact that the judgment creditor did not take from the plaintiff all that she might have taken can relieve the defendants from paying to the plaintiff that part of their obligation to him which his judgment creditor did not seize. The decree could not relieve the defendants from their obligation under the contract. True, both the present plaintiff and the defendants were defendants in that action. There was no issue raised between the defendants and no claim for relief made by either against the other, and, therefore, the decree *Page 399 
in the action could in no way adjudicate their respective rights. The result that would flow from the decision below is that the plaintiff would neither receive the annual sum the defendants agreed to pay to him nor would he have that sum applied to his debt, while the defendants would be enabled to retain moneys to which they are in no way entitled.
The order of the Appellate Division should be reversed and the judgment of the Special Term affirmed, with costs in both courts.
O'BRIEN, EDWARD T. BARTLETT, HAIGHT, VANN and CHASE, JJ., concur; HISCOCK, J., not sitting.
Order reversed, etc.