Burdick v. Jackson

Gilbert, J.: "We concur fully with the referee in his conclusions of fact and of law. One of the first principles of equity is that it looks upon things agreed to be done, as actually performed. Acting upon this principle, courts of equity in England and in this country have held, that an agreement based upon a valuable consideration to give a mortgage, will be treated in equity as a mortgage. That doctrine has been acted upon so frequently and for so long a period of time that it may justly be regarded as forming a part of the law of the land. (Story Eq. Jur., § 553; Russell v. Russell, 1 Bro. C. C., 269, and notes to that case in 1 Lead. Cases Eq., 541; Read v. Simons, 2 Desauss., 552; Welsh v. Usher, 2 Hill Eq., 167; Dow v. Ker, 1 Spen. Esq., 414; Bank v. Carpenter, 7 Ohio, 21; In re Howe, 1 Paige, 125; Chase v. Peck, 21 N. Y., 581; Willard Eq. [Potter’s ed.], 441, et seq.) If therefore, the agreement of December, 1871, had been made directly with the defendants Ida and Carrie, there can be no question that it would have given them a specific, equitable lien upon the land in controversy, which would have been prior and paramount to the title of the plaintiff, and to the general liens of the judgment creditors whom he represents. Having been made with their guardian while they were infants, it inured to their benefit and was well executed by the mortgage to them. Conceding that while the agreement remained executory it was within the statute- of frauds, and so not enforceable, for the reason that it was not in writing, yet, when the promissor actually executed the agreement, by a delivery of a formal mortgage, all objection to its validity, on that ground, was removed, and the agreement became as effectual for all purposes, as if it had been reduced to writing originally. (Siemon v. Schurck, 29 N. Y., 598; Dodge v. Wellman, 1 Abb. Ct. App. Dec., 512; In re Howe, supra; White v. Carpenter, 2 Paige, 217; Arnold v. Patrick, 6 id., 310.) Under our statute a parol agreement, in respect to lands, cannot be avoided in equity, because it is not in writing, where there has been a part performance of it. (Freeman v. Freeman 43 N. Y., 34.) A fortiori, it cannot where it has been fully executed. The plaintiff is not a tona fide purchaser, but stands in the shoes of the bankrupt. He cannot, therefore, assert any better right than the bankrupt himself. The execution of the mortgage gave [491] tlie defendants a lien, which took effect, by relation, as against the' bankrupt and purchasers from him with notice, at the time the agreement to give it was made. (Auth. Sup.) The plaintiff, not being a bona fide purchaser, took the transfer to him subject to that lien. That being so, no question of fraud or of a preference in violation of the provisions of the bankrupt act has arisen, and-the evidence precludes any inference of other kinds of fraud. It is unnecessary to review the cases cited on behalf of the appellants, for none of them seem to us to conflict with the foregoing views. The plaintiff is not in a position to raise the objection that the agreement to discharge the old mortgage, and to receive the new one in lieu of it, was invalid because the guardian violated his duty and transcended his power in making such an agreement. Such a transaction is not absolutely void, but is voidable only, at the election of the infants on coming of age. It being obviously for the benefit of the infants that the lien shall be established and upheld, we will give effect to the intendment, that their ratification will be forthcoming at the proper time, and to the rule that no one but themselves can disavow the authority of their guardian to make the agreement. (Co. Lit., 2 b; 2 Kent Com., 236; Keane v. Boycott, 2 H. Bl., 511; U. S. v. Bainbridge, 1 Mason, 82.) The plaintiff has no claim to be the champion or protector of the infants, and can acquire no rights b} assuming that character. Some objections to the admission of evidence were taken by the plaintiff. ¥e think they were properly overruled. The judgment should be affirmed, with costs, to be paid out of the estate of the bankrupt, if that is sufficient; otherwise by the plaintiff personally. Smith, J., concurred.