Hamilton v. Muncie

Putnam, J.: The facts found are fully established by the testimony. Mrs. Muncie admitted that to raise money to build their sanitarium, they borrowed on the security of mortgages on the property of Mr. and- Mrs. Phillips. The Muncies undertook to care for these loans, the proceeds of which they put “ into the business.” Among the loans so obtained, was this $3,000 raised upon the house 767 Marcy avenue. Appellants sought to testify that they were to repay this indebtedness by maintaining Mr. and Mrs. Phillips for their lives, but no such averment appeared in their answer. Clearly the will required that the property at 767 Marcy avenue be freed from this mortgage, and the repeated pay-" ments of interest after the testatrix’s death, as well as appellants’ letters in 1910, show a plain sense of this duty. As this trust was not being fulfilled, and had been distinctly repudiated by the sister’s letter of November 17, 1911, [633] plaintiff could come into equity for the construction of the will and for the enforcement of the trust obligation arising therefrom. The assistance that appellants obtained from the original mortgage proceeds is not the only ground for this equity. It is reinforced by the appellants’ acceptance of the will. Mrs. Muncie was not only an executrix, but was also a devisee thereunder. She has accepted the property so devised, which she has sold. She observed and carried out this trust for eight years after the will took effect. Upon her regrettable change of attitude in 1911, and the attempt then to ignore this trust, she should not go freed from the trust to repay the moneys, as the will required, in justice to the brother. We are, however, unable to find evidence of any hypothecation, charge or specific appropriation of this Macon street property (Pom. Eq. Juris. [3d ed.] §§ 1234, 1239), whereby to found' an equitable hen thereon, to be enforced as the decree below provides. The mother’s money that went into it was in the nature of a loan or accommodation, without any undertaking or promise to subject or incumber this sanitarium property. The conveyance of the premises entirely to the mother, and her subsequent holding title to that property for six years, also merged and extinguished any specific interest she might previously have claimed by- reason of her advances. Neither can we follow the moneys that went into this property. The Muncies had legal title to the borrowed funds so invested and applied, so that the moneys cannot now be treated as wrongly diverted, and thus capable of being traced. Such a right depends on a prior right of property in the money so employed. (Matter of Hicks, 170 N. Y. 195; Jaffe v. Weld, 155 App. Div. 110.) Therefore, from this judgment and from the third conclusion of law, must be struck out the provision declaring a specific lien, with directions for its enforcement. Instead of adjudging such hen, the decree now to be entered will direct that the appellants should discharge the mortgage on plaintiff’s property, in respect to which appellants are adjudged to be primarily hable, and, therefore, bound to exonerate the plaintiff, both as an executor and individually, from any liability thereon. [634] As thus modified, the judgment should be affirmed, without costs to either party upon this appeal. Jenks, P. J., Thomas, Blackmar and Kelly, JJ., concurred. 1 Judgment modified in accordance with opinion, and as so modified affirmed, without costs to either party upon this appeal. Order to be settled on notice.