89 N.Y. 251 | NY | 1882
The plaintiff's application is to the equitable jurisdiction of the court; but a case suggesting fewer considerations likely to influence a court of equity in its favor, or more opposed to the rules and maxims by which such a tribunal must be guided than the one on which he relies, has not been brought to our attention. In the diversity of causes of action it seldom happens that one is found which has no other support than an admitted breach of confidence, and violation of trust reposed by a father in his son. Such is this case.
In September, 1869, the defendant, for $100,000, purchased lands in Rye, Westchester county, and satisfied the price thereof. He, for reasons which do not appear, directed the deed therefor to be made out to one Fay, who was then in his employment, and who accepted the conveyance at his request, upon an oral understanding that he would hold the premises subject to the order, and for the convenience of the defendant. On the 9th of December, 1871, at the request of the defendant, and in execution of the trust and confidence so reposed in him, and upon no other consideration Fay conveyed the premises to the plaintiff, who is the son of the defendant. The plaintiff gave no consideration whatever either to Fay or the defendant for such conveyance, or the premises described therein. At this time the defendant was in the habit of reposing great confidence in the plaintiff, and making or procuring to be made to him conveyances of land belonging to or purchased by the defendant, in the trust and confidence that the plaintiff would dispose of such land and premises for the use and benefit of defendant, and as he might direct and request, and at the time of the conveyance from Fay, the plaintiff expressly agreed with *254 the defendant, although not in writing, to hold the title to the premises described therein for his use, benefit and convenience, and subject to his order. The defendant, at the time of his purchase went into the actual possession of the premises, and notwithstanding the conveyance to Fay, and that from Fay to the plaintiff, continued in the possession thereof by himself or his tenants, and received at all times the proceeds and rent of the land, and solely and without direction from the plaintiff managed the property. In October, 1872, at the request and for the benefit and convenience of defendant, the plaintiff conveyed the premises to Frederick J. Ferris and John Shillito, Jr., for the consideration expressed in the conveyance of $100,000. To secure payment of part of this purchase-money, they executed to the plaintiff two bonds and mortgages upon the premises, one for $45,000, the other for $15,000. The $15,000 bond and mortgage was subsequently in July, 1873, sold by the defendant for his own benefit, and by his direction the plaintiff executed to the purchaser an assignment thereof. The defendant then claimed to be the owner of the property, and giving a reason (which involved no immoral or illegal purpose) why he had the title in his son's name, and the latter, although present, neither "contradicted, denied, or questioned it." The other bond and mortgage, which is the one now in question, were a few days after execution, with the knowledge and consent of the plaintiff, delivered to the defendant, and have since remained in his custody. These facts are found by the trial court. In November, 1879, the plaintiff demanded of his father the bond, and being denied, commenced this action in February, 1880, for the purpose of having it adjudged "that he is the sole owner and holder of the bond and mortgage," and entitled to the immediate possession thereof from the defendant. Thus the facts, which were not in writing, have in a litigation moved by the plaintiff been found to exist, and upon them the court is to say "whether the plaintiff hath title in conscience to recover or not."
In the first place it is obvious that a clear and absolute trust in the plaintiff, in favor of the defendant, was established in *255
regard to the premises conveyed to the former by Fay, which a court of equity would recognize and enforce (McCartney v.Bostwick,
It may, however, be observed at the outset that it is also provided by the same statute (§ 10), that the provisions of that title "shall not be construed to abridge the powers of courts of equity to compel the specific performance of agreements, in cases of part performance of such agreements," and that it is a well settled doctrine, that in cases of fraud equity will relieve, even against the words of a statute. The question then is, whether the plaintiff has such a right to the bond and mortgage in controversy as a court of equity will enforce; or to bring the question into a narrower compass, whether provisions of law, intended to prevent fraud, can be successfully invoked to secure to a wrong-doer the fruits of his iniquity.
The answer is easy. In Reech v. Kennegal (1 Ves. Sr. 123), *256
the lord chancellor says: "The court has always adhered to this principle, that the statute should never be understood to protect fraud, and therefore, whenever a case is infected with fraud, the court will not suffer the statute to protect it so that any one should run away with a benefit not intended." A few instances of the application of this doctrine will make much discussion quite unnecessary. Nelson v. Worrall (
In Haigh v. Kaye (L.R., 7 Ch. App. Cas. 469), a very recent case, it appeared that the plaintiff had conveyed to the defendant, by absolute deed expressing a consideration, certain premises, but in fact, as he alleged, "in trust for him," and to be reconveyed upon demand. The defendant reposed upon the letter of the deed, and refused to convey. Being sued, he relied upon the statute of frauds and claimed the estate as his own, discharged from any trust. The master of the rolls directed a reconveyance, and upon appeal the same statute was set up and the allegation made that the conveyance was in view of an adverse decision in a case pending between the plaintiff and some other party. The court in strong language expresses its opinion of the defense, saying: "If a defendant means to say that he claims to hold property given to him for an immoral purpose, in violation of all honor and honesty, he must say so in plain terms and must clearly put forward his own scoundrelism, *257 if he means to reap the benefit of it;" and referring to the claim that under the statute any declaration of trust or confidence must be shown in writing, says: "The statute of frauds was never intended to prevent a court of equity from giving relief in a case of plain, clear and deliberate fraud."
The same principle has been frequently acted upon by this court (Ryan v. Dox,
But another and conclusive answer to the plaintiff's case is, that as by his express agreement he was to hold the title to the land conveyed "for the use, benefit and convenience, and subject *258 to the order of the defendant," he did in consummation of the sale to Ferris and Shillito, by direction of the defendant, and for his benefit and convenience, execute a deed to them. At the same time possession went to them from the defendant. The trust was executed, and whether the defendant could have compelled it or not is immaterial. The plaintiff responded to the call of hiscestui que trust, and from that moment had no further concern, or interest, real or apparent, in the property. His whole duty as trustee was discharged. Nothing then remained but a right to the purchase-money, and this vested at once in the defendant. Although the bond and mortgage, in form, ran to the plaintiff, he took as trustee for the defendant, by implication of law, if not by agreement. Those securities were personal property only and had no relation to the statute.
It is not necessary to inquire whether the defendant could, by any legal proceeding, have compelled the plaintiff to convey the lands; he has done so in performance of his undertaking, and without compulsion. Nor is it necessary to inquire whether if he had received the consideration of the deed in money it could have been taken from him. He did not receive it, and is now in a court of equity seeking to obtain it. Notwithstanding the ingenious and persuasive argument of the learned counsel for the respondent, we have found no ground upon which the claim can stand.
The judgment of the General and Special Terms should be reversed, and the defendant have judgment dismissing the complaint, and adjudging that the bond and mortgage described therein are the property of the defendant, and that the plaintiff pay to him his costs of this action.
All concur.
Judgment accordingly. *259