6 N.Y. 178 | NY | 1854
delivered the opinion of the court.
I concur in that part of the opinion delivered in the supreme court, which declares that the defendant had no right, as against the complainants, to relinquish her title to the two notes of Ingalls and Beardsley for $500 each, and that the amount of those notes ought to be considered as applied towards the satisfaction of the judgment against Cross. But if these notes were credited, in addition to all the other payments, there would still be a balance due upon the judgment, upon which the complainants’ lots might be sold if there were nothing else in the case. I am not aware of any principle which will compel a judgment creditor to relinquish his lien upon an item of real estate of the debtor, because he has sold it and paid the creditor the purchase money on account of- the judgment debt, even with knowledge, on his part, of the source from which the money was obtained. In the absence of an agreement to discharge the land conveyed in consideration of the payment, I suppose the lien would remain both in equity and at law. The transfer of the notes can scarcely be more effectual than the payment of the whole purchase price in money would have been. The defendant was bound to receive them under her agreement, as she or any other judgment creditor would have been obliged to receive the money if offered; but such
It is therefore necessary to consider whether any of the other facts alleged and proved entitle the complainants to the decree which has been rendered. I am of opinion that after the defendant was aware that Cross had sold and conveyed the lots for a valuable consideration, and that the purchase money had been paid, she could not, without violating the equitable rights of the purchasers, return to Cross any security which he had furnished to her for the payment of her debt. The giving of negotiable notes, and the transfer of them to the defendant, was, as between the parties to this suit, equivalent to actual payment for the land; and the notes having been in fact paid before the present controversy arose, the case is precisely the same as though the purchasers had paid cash for the lots at the- time of the purchase.
It is a material inquiry whether the defendant had actual or constructive notice of the sale of the lots before the securities were given up to Cross. There is no evidence that she had personally any knowledge on the subject;' but her agent was perfectly aware of the whole transaction, and he acquired that knowledge in the course of his employment for her. When he received the notes for $1800, made by Ingalls and Beardsley, which were delivered to him as her agent, he knew that they were given for the purchase price of the two lots of land which they had bought of Cross; and he knew, moreover, that these lots were subject to the- lien of the defendant’s judgment, and that the purchase was made and the notes were given in the confidence on the part of the purchasers that Cross had an unincumbered title. This notice -is legally imputable to the defendant. Where an agent comes to the knowledge of a fact while he is concerned for the principal, this operates as constructive notice to the principal himself; for, upon general principles of policy, it must be taken for granted that the principal knows whatever
The defendant therefore must be considered to have known of the circumstances attending the conveyance to Ingalls and Beardsley about the time it took place. She then had in her hands a considerable amount of collateral securities, which had been transferred to her by Cross, and she continued to receive other similar securities in that and the two following years. A part of the first parcel of notes and bonds had been given up to Cross before he had conveyed the lots. As to these the complainants have no right to complain, for, as between the parties to the judgment, the lien would not be affected by the transfer and giving back of securities. They would not operate as payment until money was actually received upon them. But she continued, after the conveyance by Cross, and with legal notice of that conveyance and of the rights of the purchasers under it, to retransfer to him the securities which he had turned out to her to secure the payment of the judgment. I collect from the schedules annexed to the answer, that notes, and bonds and mortgages were thus given up to Cross, after his conveyance and after notice thereof to the defendant, to the amount of $5486.67, without reckoning interest which had accrued on the demands. If these had been collected by the defendant, instead of being returned to Cross, they would, with the admitted payments, have largely overpaid the judgment, and nothing would have been due when the defendant attempted to sell the complainants’ lots on execution. The question therefore arises, whether this could be done and the lien still retained upon those lots, without a violation of the complainants’ equitable rights. We are of
The doctrine is founded on the most obvious principles of equity, and the present case is a suitable one for its application. As soon as the defendant’s agent became aware that the complainants had advanced their money, or given their negotiable paper, for a portion of the land bound by the judgment, it was his duty and the duty of his principal so to manage the securities in his hands, and those which the debtor afterwards furnished, as to save the complainants from loss if it could be done without hazarding his collection of the judgment. Instead of doing so, she suffered the debtor to take and convert these securities, which were amply sufficient to have paid the judgment, to his own use. After this it would be eminently inequitable and unjust to allow her to sell the complainants’ land. I think, also, that the proper disposition was made of the costs.
The decree of the supreme court should be affirmed, but without costs in this court.
All the judges concurred.
Judgment accordingly.