197 A.D. 484 | N.Y. App. Div. | 1921
The pleadings consist of the complaint and answer and a reply thereto. The complaint shows that in a foreclosure action brought by the defendant in the Supreme Court in which plaintiffs and their former -partner, to whose rights they have succeeded, were defendants, it was decided that the plaintiff therein and said defendants were jointly entitled to a judgment of foreclosure of the mortgage, to foreclose which the action was brought, and that the mortgaged premises, which were known as the Mt. Morris apartment house at Fifth avenue and One Hundred and Twenty-sixth street, be sold at public auction by a referee and that from the proceeds of the sale the defendant herein should be paid $193,499.77 and that plaintiffs and their former partner should be paid $39,019.59 for their interest in the bond and mortgage; that prior to the time set for the sale it was agreed between the plaintiffs and the defendant herein that defendant should bid in the property at a sum not in excess of the amount due, including all payments and disbursements required to be made, and that defendant should convey the premises to the plaintiffs or their nominee within thirty days for the amount paid by it and that title on such conveyance should be closed
The prayer for relief is that it be adjudged that defendant received the premises as trustee for plaintiffs, and that it account to them for the rents and other income and pay them the value of the premises in excess of the cost thereof to defendant. The answer puts in issue the making of the agreement on which plaintiffs rely and quotes it from plaintiff’s bill of particulars, setting it forth in writing as claimed to have been agreed upon but without any signature, and alleges that any trust for plaintiffs was not granted or
It is not alleged that the defendant fraudulently intended to mislead plaintiffs by making and then refraining from carrying out the agreement; but on the facts alleged if defendant should be permitted to interpose the invalidity of this agreement as a defense it would constitute a fraud on the plaintiffs and, therefore, equity should imply a trust and regard the defendant as trustee ex maleficio. It was so held on analogous facts in Ryan v. Dox (34 N. Y. 307) and in Congregation Kehal Adath v. Universal B. & C. Co. (134 App. Div. 368, 370). In the latter of those cases the express terms of the agreement extended to an agreement on the part of one party not to bid or to procure bidders on the sale. An agreement to that effect was, I think, here fairly implied (See Wood v. Duff-Gordon, 222 N. Y. 88), and, therefore, I see no distinction in principle between those cases and this. In Wheeler v. Reynolds (66 N. Y. 227) it seems to have been held that there must be an express agreement to refrain from bidding or the party must have done or omitted something in reliance upon the paroi agreement, such as failing to attend the sale or to obtain other bidders, and must allege it. Under the more liberal modern rule declared in Wood v. Duff-Gordon (supra) I think the facts alleged show that there plainly was an implied agreement to that effect, which is sufficient. In Woolley v. Stewart (222 N. Y. 347) the Court of Appeals has attempted to prescribe as a rule that evidence will not be received to show a paroi contract if the act admits of explanation without requiring paroi evidence, but that was
Clarke, P. J., Smith, Page and Merrell, JJ., concur.
Order affirmed, with ten dollars costs and disbursements.