13 N.Y.2d 1007 | NY | 1963
Dissenting Opinion
(dissenting). I vote to reverse. Defendants’ motion for summary judgment dismissing the complaint was granted by the Appellate Division reversing Special Term. The Appellate Division held that, even if the facts alleged by plaintiff were assumed to be substantially true, her complaint and affidavits did not make a sufficient showing for the declaration of the constructive trust she demanded. Our task is to
Plaintiff’s version of the transactions is about like this: on June 29, 1959 she made a written agreement with the Republic of Haiti on which she made a $10,000 down payment and in which she agreed to take, title to the premises on September 9, 1959 (date afterward extended to October 7, 1959) for $240,000 (reduced by contract from $250,000); that after she executed the contract she offered the property for sale and after negotiations with defendant Eli L. Sandler the latter promised her that he (Sandler) would furnish her the money for the closing of the title and would immediately thereafter buy the property from her for $278,000. It was a term of her agreement with the Republic of Haiti that if for any reason she did not close title on October 7,1959 she would be entitled to return of her $10,000 deposit and the cost of title examination. She alleges that at the time defendant Eli L. Sandler made his promises he knew that she had offers from others at prices lower than Sandler’s price of $278,000 but higher than the price she had agreed to pay. He admits that he knew that the closing date of October 7 was final and would not be extended. Her further allegations are that Eli L. Sandler never intended to carry out his promise and never intended to buy the property from her or advance her the necessary money but made his promissory statements so that plaintiff would neither close with other available purchasers nor have the necessary funds on the closing date, and that on the closing date he refused to furnish the balance she needed to close her purchase so that she had to abandon the purchase. A few days later, according to her, Eli L. Sandler and the other defendants contracted with the Republic of Haiti to purchase the property for themselves and on November 3, 1959 made, through a dummy corporation, a contract to buy it for $243,000 and thereafter closed the purchase and took title. Through this fraud, asserts plaintiff, defendants unjustly enriched themselves
Defendants argue that an oral agreement cannot be the basis of a constructive trust “ unless a confidential or trust relationship is shown ”. Such is not the law. For instance, in Latham v. Father Divine (299 N. Y. 22) the basis was not confidential relationship but undue influence, force, etc. If there be an abuse of a confidential relationship the law labels the breach a “ constructive fraud ’ ’ hut if there be actual fraud there need not be a confidential relationship (some random citations: Bogert, Trusts, §§ 472, 473, 496; Scott, Trusts [2d ed.], Vol. I, § 44.1, p. 315 et 'seq.; § 44.2, pp. 320-322; Vol. IV, § 465, p. 3118; Faraño v. 'jStephanelli, 7 A D 2d 420, 424; see text and citations, 89 C. J. S., Trusts, pp. 1018, 1019, 1020, 1043, 1044, 1048, and many cases cited on those pages). The real wrong is the abuse of a confidence reposed, whether or not there was a pre-existing special relationship.
The principal flaw which the Appellate Division found in the complaint was that, even on plaintiff’s own version of the facts, she was not to get or retain title hut that defendant Eli L. Sandler was and so she has no right to a conveyance from him or to a judgment that he holds title in trust for her. But the only way this fraud, if it was committed, can now be redressed is by turning- the property back to plaintiff so that she may be in a position to get the profit she would have realized had Eli Sandler carried out his agreement. The Appellate Division held in effect-that since no writing was exchanged between plaintiff and any of the defendants, nhe can have no relief since there was no confidential relationship between the parties or other special factors making the Statute of Frauds inapplicable, citing Sinclair v. Purdy (235 N. Y. 245) and Wood v. Rabe (96 N. Y. 414). Those cases authorize the declaration of a constructive trust -when the absence of a formal writing grew out of the existence of a confidential relationship between the parties. However; the decisions do not mean that a constructive trust of land will be-decreed to carry out an oral agreement in those instances only where there is a confidential relationship. The Appellate Division itself pointed out, citing section 160 of the Restatement of the Law of Restitution, there is no such limitation. The true rule is as expressed in the Restatement: “ where
That plaintiff may have some sort of remedy at law does not deprive equity of jurisdiction to declare the wrongdoers to be trustees (Falk v. Hoffman, 233 N. Y. 199).
The decision below in its strict limitations on the concept of constructive trusts seems to us to be in conflict with cases like Latham v. Father Divine (299 N. Y. 22, supra). In the Latham opinion we noted (p. 27) that there was no New York case declaring a constructive trust on the exact facts there alleged. We said, however, that: “ A constructive trust will be erected whenever necessary to satisfy the demands of justice ” and that “ constructive trust ’ ’ is merely the formula through which the conscience of equity finds expression, citing Beatty v. Guggenheim Exploration Co. (225 N. Y. 380) -and, other authorities. We wrote in Latham that the application of the concept of constructive trust ‘1 is limited only by the inventiveness of men who find new ways to enrich themselves unjustly by grasping what should not belong to them”. Similar statements had been made by this court in 1916 in Miller v. Schloss (218 N. Y. 400, 407, 408). Quite applicable, too, is another statement in the Latham opinion: “ Nothing short of true and complete justice satisfies equity, and, always assuming these allegations to be true, there seems no way of achieving total justice except by the procedure used here.”
Some confusion seems to have arisen as to the necessity of a confidential relationship between the parties. When there is a confidential relationship and reliance upon it as between husband and wife or other close relatives there is ordinarily no necessity
The judgment should be reversed and the motion for summary judgment denied, with costs in this court and in the Appellate Division.
Judgment affirmed.
Lead Opinion
Judgment affirmed, with costs.
Concur: Judges Fuld, Van Voorhis, Burke and Scileppi. Chief Judge Desmond dissents in an opinion in which Judges Dye and Foster concur.