11 A.D. 177 | N.Y. App. Div. | 1896
In December, 1891, the plaintiff was the owner of a farm of some thirty-two acres, which she had purchased in the year previous for the sum of $6,500. The plaintiff paid for the farm by the execution of a mortgage for the whole amount of the purchase money secured by a collateral mortgage on other property owned by her. The defendant Iselin was the principal stockholder of the defendant, the New Rochelle Water Company. That defendant desired to obtain from the plaintiff part of the farm for its water works. 'The complaint charges that Iselin negotiated with the plaintiff for such purchase and that plaintiff refused to accede to the terms -offered; that thereupon Iselin purchased the $6,500 mortgage and ■then renewed negotiations with the plaintiff, and threatened a fore
The deed to the water company cannot be adjudged void, as secured by duress in the ordinary sense of that term, because the defendant Iselin threatened nothing more than the enforcement of his legal rights. (Knapp v. Hyde, 60 Barb. 80.) The fact that a plaintiff purchased a mortgage from malice toward the defendant and solely with the view to sue upon it constitutes no defense to an action for its foreclosure. (Morris v. Tuthill, 72 N. Y. 575.)
If the deed can be avoided it can only be upon the ground of the relation between the parties, and on the theory that the conveyance was substantially made to the mortgagee. Undoubtedly the rule has been often stated that a purchase by the mortgagee of the mortgagor’s equity of redemption will be closely scrutinized and sustained only when fair and for an adequate consideration. (Jones on Mort. § 711; Peugh v. Davis, 96 U. S. 332 ; Russell v. Southard, 12 How. [U. S.] 139.)
But this rule has generally been declared in jurisdictions where the rights of the mortgagor and mortgagee are different from those which, since the Revised Statutes, obtained in this State, and I doubt whether the rule is applicable here, at least in its full force. At common law the legal estate vested in the mortgagee by virtue of the mortgage. He was entitled to possession of the mortgaged premises. On default, no title remained in the mortgagor cognizable in a court of law. The latter’s interests were recognized in courts of equity alone. The mortgagor was largely in the power of
I am aware that in Odell v. Montross (68 N. Y. 499) Judge Allen speaks of the rule as still prevailing in this State, but the decision did not proceed on any such ground. In De Martin v. Phelan (47 Fed. Rep. 761) is to be found an instructive discussion of the application of the rule where the law has changed the rights and estates of mortgagees and mortgagors. It was there said of a purchase by the mortgagee from the mortgagor : “ When the parties are dealing at arms-length in the open market, and no unfair or improper measures are used, or misrepresentations made, it would be absurd to say that a court of equity, years afterwards, when the party selling had met with financial success, and acquired sufficient means to repay the purchase money, could be called upon to annul the sale. It is only in cases where the T)ona fides of the transaction is called in question, and when fraud.or other like causes above enumerated is alleged, that courts of equity are authorized to interfere. In such cases the relation of mortgagor
But apart from the question whether the conveyance to the water company was justly subject to avoidance, we think the plaintiff, by her laches, has lost any right to avoid it. When she made the sale she was in default for nearly two years’ interest on the mortgage and in the payment of two years’ taxes on the property. These arrears were cleared up by the proceeds of the sale, and the mortgage stood as reduced until the payment of the remainder due upon it. For four years the plaintiff took advantage of the sale, and made no complaint of it. As already said, there is no finding of how great the true value of the property was. The evidence presents the usual diversity of opinion experienced when the value of country real estate is sought to be ascertained. There is much evidence tending to show that the plaintiff obtained the value of the property. If the plaintiff wished to disaffirm this sale she should have proceeded, after a reasonable time, to take action, and not wait for years to speculate upon a possible enhancement in value. The case differs entirely from that where a party has been forced or tricked to give up his equity of redemption for a nominal consideration. By the failure of the plaintiff to disaffirm her deed for this period of years we think she has ratified it.
The judgment appealed from should be reversed and a new trial granted, costs to abide the event.
All concurred.
Judgment reversed and new trial granted, costs to abide the event.