Freelove v. Cole, 41 Barb. 318

Freelove v. Cole

41 Barb. 318 | N.Y. Sup. Ct. | 1863

By the Court, E. Darwin Smith, J.

The defendant, upon the evidence and facts found in the case, has obtained from the plaintiffs, without consideration, a conveyance of the plaintiffs’ farm, containing about 115 acres, upon a parol promise or agreement to reconvey the same to the plaintiff, Hannah J. Freelove. The defendant having acquired such title, refuses to perform the parol agreement, and resists the claim of the plaintiffs that it be specifically executed, on the ground that such conveyance was made by Freelove to hinder, delay and defraud his creditors, resting his defense upon the maxim “inter partes in pari delicto,, potior est conditio defendentis and also upon the statute declaring all parol trusts relating to land void. It appears that the defendant is a son in law of the plaintiffs j that he was a justice court lawyer; that he was applied to by the plaintiffs for advice, to aid them in the disposition or conveyance of the property, and that, the same was conveyed to him, at his instance and upon his advice. The learned judge who tried the cause finds, also, as matter of fact, that the. plaintiff, Henry Free-love, at the time of such conveyance, had from some cause become incompetent to manage and conduct his business with ordinary prudence and discretion. The question presented to us is whether a farm, the title to which was-acquired under such circumstances, can be retained by the defendant, and *326the plaintiffs he perfectly remediless. I should regret exceedingly to find that the courts were incapable of giving redress in such a case. It would be, in my opinion, quite a reproach upon the administration of'justice if such should be the case. The learned judge who tried the cause found that the object and intention of the plaintiff, Henry Freelove, in making the conveyance to the defendant, was to place the premises, for the time being, beyond the reach of his creditors until his debts could be paid by other means and without a sacrifice of said premises, and thereby to hinder and delay his creditors, and then to have the premises conveyed to the said Hannah, to be held by her for the support of the said Henry and the family, and thus protect them not only from the claims of creditors but from the improvident acts of the said Henry; and that the said conveyance was in no other respect fraudulent on the part.of the plaintiff. Upon this finding the conveyance was undoubtedly fraudulent as against the creditors of Henry, but as no creditors have sought to impeach it that question is of no importance except as it is presented as a reason why the plaintiffs should have no relief, inasmuch as both they and the defendant wereparticeps criminis in the perpetration of a fraud, or concurred in the fraudulent purpose, If parties in such cases are in pari delicto the rule is well settled that neither can have relief, as against the other, at law or in equity. But as there are degrees of crime and of wrong, the courts can and do give relief, in many cases, as against the more guilty party, To exclude relief in such cases, the parties must not only be in delicto, but in pari delicto. The plaintiffs and defendant did not stand upon an equal footing. The plaintiff Henry .was infirm of mind, and the judge finds he was incompetent to manage and conduct his business affairs with ordinary prudence and discretion. The defendant was his son-in-law, a confidential friend and his legal adviser. The plaintiff, Henry Freelove, swears that the defendant was a lawyer, or pretended to be, and tried lawsuits. He was applied to by the plaintiffs to *327befriend and advise them in their trouble, and they acted upon his advice. The judge so finds, as matter of fact. The case, is clearly brought within the principle of the exception to the rule that parties shall not have relief as against each other when both are guilty of fraud or crime. They are not in pari delicto. I think the case is clearly within the principle of the case of Ford v. Harrington, (16 N. Y. Rep. 285.) In that case the plaintiff's father, one Conway, ivas indebted to one Allen in the sum of $60, which was due. Conway was in possession of 50 acres of land, under a contract, and was entitled to a conveyance on the payment of $36, the land being worth about $400. The defendant was an attorney at law, and was applied to by Conway to know if his creditor could reach this land. The defendant advised him that he could, and that he had better assign to him the contract, to prevent its being subjected to the claim of Allen, and that when he should have settled the debt with Allen he would let Conway have it back again. Conway took his advice and assigned the contract, and the defendant took the title and refused to convey it, as the defendant in this action does, and upon the same ground. The referee found that the contract was assigned for the purpose of defrauding Conway’s creditor, Allen, but as the defendant was an attorney and counsellor the law would set aside the agreement made with his client by which the property was put into his hands to keep it out of the reach of his client’s creditor, and the defendant should convey the land to the plaintiff. This judgment was affirmed at a general term of the 8th district and in the court of appeals. The case was put upon the ground that the defendant took advantage of the trust and confidence reposed in him to procure the assignment, and that the parties were not in pari delicto, and it was incompatible with the rules of equity to allow a man to retain an advantage thus unfairly and unconscientiously obtained. The defendant, it is true, in that case was an attorney and counsellor at law, but the case does not depend upon that fact, except as *328it placed the defendant in the relation of trust and confidence to the plaintiff. It was because the defendant occupied such a position and relation to the plaintiff that he was enabled to induce him to convey to him- the property, It was by reason of the imposition and wrong doing in consequence of the relation of trust and confidence, that the court gave relief and redress. The same principle was applied in the case of Osborne v. Williams, (18 Ves. 379,) where the relation was that of father and son. The same principle applies to all cases where trust and confidence is reposed; to transactions between trustees and eestuis que trust, between guardian and ward, and to other persons in fiduciary relations. In this class of cases if there be any intermixture of deceit, imposition, overreaching or unconscionable advantage or other mark of deceit or positive fraud, courts of equity will give relief to the weaker party. (Story’s Eq. §§ 307, 308, 309.) “The general principle,” says Story, § 308, “which governs in all cases of this sort, is that if a confidence is reposed and that confidence is abused, courts of equity will grant relief.” The defendant, I think, in 'principle, is clearly within the rule applicable to attorneys. If he was not in fact a licensed attorney, he acted in that capacity to the plaintiffs; he was their legal and confidential adviser, and it would be most unjust to let him, retain the fruits of his fraud upon the ground that they were likewise guilty. They were by no means equally guilty, Upon this ground I think the judgment below can be sustained, and I think it should therefore be affirmed, with costs.

[Monroe General Term, December 7, 1863.

E. Darwin Smith, Johnson and Welles, Justices.]