Sahler v. Signer

By the Court, Hogeboom, J. In a case between the same parties reported in 37 Barb. 329, the legal effect of the paper dated 12th December, 1848, was considered and determined. That decision, adopted after, mature deliberation, we do not propose to re-examine, if we are at liberty to do so. The paper must be held to be a mortgage, so far as the premises purchased are concerned, and the legal relation between Isaac L. Hasbrouck and J ames C. Forsyth to be that of mortgagor and mortgagee. When, therefore, in August, 1852, after the death of Isaac L. Hasbrouck, Signer purchased of Forsyth his interest in the premises, he acquired only the same interest which Forsyth had, to wit, a redeemable' and not an absolute estate—the title of a mortgagee. And having gone into possession, then or previously, under or with the consent of Forsyth, he was a mortgagee in possession. He was also, at the same time, together with the plaintiff, a co-devisee of the premises under the will of Isaac L. Hasbrouck. But as he was a mortgagee of the entire premises and a devisee of only an undivided half, the mortgage would not in equity be merged, but upheld for his protection. There is nothing absolutely incompatible in the two relations. Forsyth, it is true, did not execute to Signer a deed or other written instrument conveying his title to the premises. But an actual parol agreement for the sale, accompanied with the payment of a portion of the purchase money, and a transfer of possession, constituted an equitable title—particularly if that title was a mortgage—which the law would recognize. In August, 1853, Forsyth conveyed all his property to his brother, Robert A. Forsyth, in trust for his creditors; but if his equitable interest in this property had been already effectually transferred to the defendant Signer, the assignment could not pass this property, for there was nothing to convey; at all events it would- be subject to the title of Signer. And when, in 1860, Robert A. Forsyth conveyed to the plaintiff, that conveyance was equally powerless as against the title of Signer. [614] So far therefore as the plaintiff’s title is derived through Forsyth, it was either wholly inoperative or subordinate "and subject to the previous title which Signer had obtained from the same source. The plaintiff also makes title under the surrogate’s proceedings for the sale of the real estate of Isaac L. Hasbrouck. And notwithstanding the argument of the defendant’s counsel, I see no objection to a title thus derived. When Forsyth purchased under the Jonathan Hasbrouck mortgage, he purchased in effect for and as the agent of Isaac L. Hasbrouck. The latter was the real purchaser, and the title vested in and belonged to him. Forsyth had an equitable mortgage upon the premises, but not the legal title or beneficial -ownership. For aught, therefore, that 1 can discover, Isaac L. Hasbrouck’s estate in the premises was subject to sale under a surrogate’s order, and the purchase -in' 1859 by the" plaintiff vested in him such title as Isaac L. Hasbrouck had in the premises. But aside from the question of estoppel, which will be presently considered, this does not entitle the plaintiff to recover. Signer is at this day a mortgagee in possession; and a mortgagee in possession can never be dispossessed in an action of ejectment by the holder of the legal title. Being in possession he is entitled to retain it, until his mortgage is satisfied out of the rents and profits or otherwise. The plaintiff and defendant, so far as I can see, stand in the same relation to each other as did Isaac L. Hasbrouck, and James 0. Forsyth. And as Hasbrouck could not have ejected Forsyth until his advances were reimbursed, so also Sahler, who has purchased Hasbrouck’s title, can not dispossess Signer, who stands in the shoes of Forsyth, until his mortgage is satisfied. That this mortgage is paid, there is no pretense, in the evidence in this case. Such being the case, Signer has on the merits a valid defense to the action, unless he is deprived of it by the doctrine of estoppel. This estoppel is claimed to operate against [615] him, because though present at the surrogate’s sale and a party to the proceedings under which the sale was had, he did not then disclose the existence of his mortgage; because he did not surrender thé possession acquired under the will of Isaac L. Hasbrouck; because he succeeded in a former suit on the strength of the surrogate title; because he could not purchase Forsyth’s interest for his individual benefit; and because, being administrator with the will annexed of Isaac ' L. Hasbrouck, he could not purchase otherwise than for the benefit of that estate. The main ground of estoppel relied on, and that upon which the judge at the circuit appears to have placed his decision is the first—the non-disclosure of his mortgage at the surrogate’s sale. If his mortgage was recorded as such (and there appears to be no evidence in this case whether it was or was not,) it would be notice to the world of its existence; and nothing less than actual fraud or artifice in denying or concealing its existence when inquired about or sought after, would estop the holder from setting it up afterwards. There was no moral or legal obligation requiring its production at the sale, although I admit any positive artifice actually misleading a bona fide purchaser to his prejudice would always furnish grounds for relief. But there is very little ground in this case to suppose that the plaintiff was in any wise misled, or indeed ignorant of the Forsyth claim. The statute (2 R. S. 105, § 32) provides that the surrogate’s sale shall be subject to all charges by judgment or mortgage against the deceased. The deed which the plaintiff received on such sale contains a clause that the conveyance was made subject to charges of that description. There is nothing to show that the plaintiff made any inquiries of the defendant as to the character of his title or possession; or that the defendant did or said any thing actually tending to mislead the plaintiff in that respect. The defendant was in open and notorious possession of the premises, and this should have induced caution and inquiry on the part of the plaintiff to ascertain [616] its character and foundation. It is true Signer had, prior to the surrogate’s sale, made various claims to this property, some of which may have come to the knowledge of the plaintiff. He claimed it as devisee of Isaac L. Hasbrouck — as having come into possession by arrangement with Forsyth ; and also as having purchased the title and interest of the latter. This latter claim the plaintiff testifies he never heard of until after his purchase at the surrogate’s sale. But I think the circumstances necessitated active and particular inquiries on his part, if he desired to be protected against the title of a party in actual and open possession. And there is much reason to suppose he must have known of Forsyth’s equitable mortgage, as the very fact of a sale by the surrogate of Isaac L. Hasbrouck’s interest in the premises is founded upon the idea that Forsyth’s purchase under the Jonathan Hasbrouck mortgage was for Isaac L. Hasbrouck’s benefit, and subject to redemption by him; otherwise Forsyth’s title would have been absolute, and left no interest in Isaac L. Hasbrouck which would be the subject of sale. I therefore think that upon the facts presented there was no estoppel on this ground. Nor was there an estoppel which should preclude this defense by the fact that Signer was the devisee of Isaac L„ Hasbrouck. It is not clear that he assumed possession in that character, and if he did, I perceive nothing in that fact incompatible with his purchase of Forsyth’s interest, to strengthen his title or possession. Nor is he estopped by the effect of the former suit between the same parties. That had reference to different premises, and in that case it distinctly appears that he relied as well on the Forsyth title as that derived under the surrogate’s sale. Nor is he estopped from setting up his present defense, even if his purchase of the Forsyth claim enured in part to [617] the benefit of the plaintiff. That would not entitle the plaintiff to oust him by an action of ejectment. [Albany General Term, December 4, 1865. If or does the doctrine apply in this case that a trustee can not purchase for his individual benefit. When Signer purchased from Forsyth he had not become administrator of Hasbrouck’s estate. In the finding of facts appended to the case the date of his appoinment as administrator is left blank, and I do not discover it in the evidence in the case. In the finding appended to thé judgment record it is stated as being on the 28th of March, 1853, whereas the purchase from Forsyth was in August or October, 1852; it being stated as August in one finding and as October in the other. There was nothing, therefore, in Signer’s position or relation to the Hasbrouck estate which forbade this purchase from Forsyth, and it is unaffected by his subsequent appointment as administrator with the will annexed. It is suggested on the part of the plaintiff that inasmuch as by the stipulation of the parties the plaintiff is at liberty to present any reason for the affirmance of this judgment arising from undisputed evidence, the judge erred in his finding of fact that Signer made the parol purchase of the premises from Forsyth before referred to. But aside from the objection that this is a question not arising upon undisputed evidence, which is a conclusive reason why it should not be considered, I think there was sufficient evidence to uphold the judge’s finding in tiffs particular. My conclusions therefore are, that independent of the question of estoppel, the defendant established a good defense to "the plaintiff’s action; and that there is nothing in the question of estoppel which precludes such defense. This renders it unnecessary to consider the other questions in the case. The judgment must be reversed, and a new trial granted, with costs to abide the event. 1Togeboom, Miller and Ingalls, Justices.]