Ferry v. Dunham

Cochrane, J.: The question we are. asked to determine is whether an undivided one-half of the. property in question was devised to Gertrude M. Dyer by her mother as claimed by the appellants or descended to her from her father as claimed by the respondents. . On the determination of this question depends the various rights of the parties hereto under section 288 of the Real Property Law (Laws of 1896, chap. 547, as amd. by Laws of 1904, chap. 106). Benjamin W. Dyer died intestate in 1877, owning the entire property and leaving him surviving a widow, Clarissa M. Dyer, and two children, Jerome W. Dyer and said Gertrude M. Dyer, his only heirs." Both these children were mentally incompetent from their birth to manage themselves or their property. In 1882 they were judicially declared incompetent and a committee of their property was appointed. This committee in proceedings duly taken for that purpose pursuant to statute and an order of the court conveyed the real estate to their mother Clarissa for the sum of $16,000, and she executed to the committee a mortgage on the property conveyed for the-full amount.of the purchase price. Shortly thereafter the committee resigned and the mother of the incompetents became their committee and the mortgage which she had executed was assigned to her as such committee. She died in 1899 devising the real estate to her two children. Jerome' W. Dyer died in 1901 intestate and without issue, leaving his sister- Gertrude JVI. Dyer his [63] only heir, and she died in 1906 intestate and without issue. bTo part of the principal of the mortgage has been paid. On the foregoing facts the trial justice has held that the deed from the committee to Clarissa M. Dyer failed to effect a change in the title of the property, and that the undivided one-half of the property which was devised to Gertrude M. Dyer by her mother must, because of the invalidity of that deed, be deemed to have descended to her from her father as if such deed had not been executed. As to the other undivided one-half it of course descended to her from her brother Jerome, irrespective of the question as to whether or not the deed of the committee was effectual, and no question in respect thereto arises in this action. The proceeding to convey the real estate of the incompetent persons which resulted in the deed from their committee to Clarissa M. Dyer was regular and in conformity with the statutory provisions under which the proceeding was had. The consideration of the conveyance represented the full value of the property, bio fraud was practiced on the incompetent persons and as between them and the purchaser a valid title was transferred. Section 2358 of the.Code of Civil Procedure declares that such a deed has the same validity and effect as if executed by the person in whose behalf it was executed and as if the incompetent person was of sound mind and competent to manage his affairs. There is no evidence that the purpose of that transfer was collusive or that the same was intended to effect a change in the course of the inheritance of the property from the heirs of the father of the incompetent persons to' the heirs of their mother, and if such was in fact the effect it was but the natural and necessary incident of the sale which being valid and effectual as to the incompetent persons was necessarily valid and effectual as to their heirs, and those claiming to be their heirs. The title to the property, therefore, vested in Clarissa M. Dyer, and under her will an undivided one-half thereof was devised to her daughter Gertrude as claimed by the appellants, subject, however, to the said mortgage. - But that mortgage is to be deemed real estate the same as if the property had not been sold by the committee. (Code Civ. Proc. § 2359.) That section further provides that the sale did not give to the incompetent persons “ any other or greater interest in the [64] proceeds of the sale” than they liad in the property sold. The mortgage retained the character of real- estate during the life of the .incompetent persons, and is to be deemed real estate for the purposes of distribution the same as if it had not been sold. That statutory provision was enacted for the benefit of the representatives of infants and incompetent persons and to prevent a change in the course of succession. (Foreman v. Foreman, 7 Barb. 215; Forman v. Marsh, 11 N. Y. 544; Matter of McComb, 117 id. 378, 383.) Those authorities may -not be precisely in point as to the question here existing, but by analogy they bear quite pointedly on the principle involved. The deed and the mortgage constituted a single transaction. They were simultaneous in point of time. The mother of the incompetents never in-fact had any greater interest in the property than the equity of redemption. So much of the property as is represented by the mortgage she never paid for, and it would be manifestly unjust and inequitable to hold that it became her-property in the sense that the-right of succession'thereof was changed to her heirs from the heirs of her husband. To the extent of this mortgage^ therefore, the proceeds of the real' estate which will arise from the sale thereof under 'the Interlocutory judgment herein-are to be treated as never having belonged to the mother of the incompetents, and to that extent' the appellants are not prejudiced by such judgment. , It is doubtful whether therelwill be any surplus for-distribution above the amount of this mortgage. The trial justice found as a . fact that the present value of the property does not exceed the sum of $10,000. This finding is.challenged and I find no evidence in its support. But- the mortgage when executed represented the full value of the property and there is no evidence that it is how worth either moré or less, than the amount of the mortgage, except that the dower interest of the widow has by her death been extinguished. Evidence of value would .perhaps not be satisfactory and must be more or less problematical. The accurate test of the value will be the sale of the property which must necessarily be had, and which it is in part the object of the action to accomplish. The proper parties are all before the court and I think that ah equitable result will be accomplished by a modification of the interlocutory judgment so as to provide that if-there shall be-a surplus on the [65] sale for distribution over and above the amount of the mortgage one-half of such surplus shall be distributed as having been devised to Gertrude M. Dyer by her mother. The interlocutory judgment should be modified so as to providé that one-lialf of the surplus on the sale of the property for distribution over and above the amount of the mortgage thereon be distribnted as having been devised to Gertrude M. Dyer by her mother, and as"so modified affirmed, with one bill of costs to the appellants and one bill of costs to the respondents payable out of the property. All concurred. . Interlocutory judgment modified so as to provide that one-half of the surplus on a sale of' the property for distribution over and above the amount of the mortgage thereon be distributed as having been devised to Gertrude M. Dyer by her mother, and as so modified affirmed, with one bill of costs to appellants and one bill of costs to respondents payable out of the property.