Myers v. Grey

CRANE, J. It is conceded that Philip V. Myers bought this property at foreclosure sale for the benefit of the mortgagor, Sallie Malone Grey. The property was being sold under a foreclosure of the first mortgage, and the owner, Mrs. Grey, being unable to buy it in, her husband, James A. Grey, Sr., applied to his long-time friend and business associate, Philip V. Myers, deceased, to bid at the sale, advance the purchase price, take title in his own name, and hold the property until the money could be repaid to him. Mr. Myers did as requested, bidding more than sufficient to cover the mortgage and expenses so that there was a balance of $597 coming to Mrs. Grey, which she, pursuant to the agreement with Myers, immediately assigned to him. The deed to Myers was dated December 22, 1903, but there was no change in the possession of the property, which the Greys continued to occupy. On June 28, 1905, Myers, at the request of Mrs. Grey and upon payment of the $3,000 advanced by him in this transaction, reconveyed the property to her sons, James A. Grey, Jr., and Joseph M. Grey, receiving also at this time from these grantees a bond and second mortgage on the same premises for the sum of $3,500. Philip V. Myers is dead, and this action is brought to foreclose this second mortgage. The defense interposed is want of consideration and duress. It is the claim of the defendants that, when demand was made of Mr. Myers to redeed the property, he refused to do so until he was paid not only the $3,000 advanced, but also a debt due to him from James A. Grey, Sr., amounting to $4,500, and that this second mortgage was given under the force and stress of these circumstances and for no other consideration. If Myers could not have been forced to- execute his oral agreement, there was neither duress nor lack of consideration in the giving of the mortgage to procure a reconveyance of the property. Mapes v. Snyder, 59 N. Y. 450; Norton v. Pattee, 68 N. Y. 144. But Mrs. Grey had an interest in the property under foreclosure to protect, and an agreement to purchase at the sale and hold the property for her benefit until the advances could be repaid would be enforceable in equity, even though the agreement did not comply with the statute of frauds. Ryan v. Dox, 34 N. Y. 307, 90 Am. Dec. 696; Wood v. Rabe, 96 N. Y. 414, 48 Am. Rep. 640; Lathrop v. Hoyt, 7 Barb. 59; Bauman v. Holzhausen, 26 Hun, 505; Canda v. Totten, 87 Hun, 72, 33 N. Y. Supp. 962, J. Cullen’s opinion at page 78 of 87 Hun (33 N. Y. Supp. 962). If, therefore, there was no other consideration for this mortgage than a reconveyance of the property, or if the defendants were compelled against their will to execute the mortgage before Myers would give a deed, then this plaintiff cannot have judgment. [1082] The plaintiff’s intestate and Janies A. Grey, Sr., had previously transacted business together, and it is not .disputed that at the time of the execution of the deed and mortgage Grey owed Myers, as a result of these transactions,, about $4,500, exclusive of the $3,000 advanced on this property. The counsel for the defendants says that if this debt had been canceled, or time for payment extended, then there would have been a sufficient consideration for the mortgage; this is exactly what was done. All through the testimony the giving of this bond and mortgage by the sons of James A. Grey, Sr., is spoken of as a “payment” of the debt. The books of Myers were examined by Grey, and showed an indebtedness of $4,500; but after some talk and discussion it was agreed that if this mortgage was to be given the amount would be reduced to $3,500. In no part of the testimony do I find it referred to as security for the debt; it is always referred to as a payment of the debt, and such it was, and such it was considered by Grey, Sr., for when, after Myers’ death, Grey was asked how much he owed the estate, he said $600 or $700. How could he have gotten rid of his $4,500 obligation but by the payment and cancellation through the giving of this mortgage. The testimony is otherwise silent. As he and Myers continued to do business after June 29, 1905, this $600 or $700 debt must have been incurred subsequent to that date, and Grey so explains his testimony. The bond and mortgage ran for three years, thus extending the time of payment which before was on demand. A bond and mortgage, like stocks, railroad bonds, and other securities and property, may be given in liquidation of a debt. Now as to the duress: Was the payment voluntary or involuntary? The only witness to duress is James A. Grey, Sr., whom.it must be admitted is a decidedly interested witness. Myers, he says, absolutely refused to redeed the property unless this mortgage was given in payment of his (Grey’s) indebtedness to him, and that the Grey boys gave the required mortgage under protest and in order to obtain the deed of the property to which they were entitled. It may be said that even the testimony of Mr. Grey is very meager indeed as to anything said or done by his boys or his wife; he appears to have been the real person in interest and authority. This outrageous treatment of Myers seems to have made no difference in their relationships, for Mr. Grey testifies that he and Myers kept on doing business together thereafter just the same as before. On the eventful day when the debts were discussed and the mortgage executed, all the parties appeared' to be very pleasant and friendly toward each other. McNiece, the lawyer who prepared the papers and was present during much of the discussion, did not hear any refusal on Myers’ part to reconvey the property. Even if Myers did want all his claim against the Grey family settled at once, this would not. constitute duress, if they, Grey, Sr., and his sons voluntarily agreed to pay. I must and do find that settlement was voluntarily made. Is Mr. Grey’s present statement to be relied on, or the one he made before suit was brought? He virtually is the sole witness for the defendants, is interested, has made contradictory statements, and upon testifying [1083] against living witnesses is flatly contradicted. Although this mortgage was executed in June of 1905, no steps were ever taken to cancel it because of duress or any other imperfection, and the first claim of any such defense is made four years after execution and after the mortgagee’s death. One entitled to repudiate a contract on the ground of duress should, like one who attempts to repudiate a contract on the ground of fraud, act promptly. O. P. R. R. Co. v. Forrest, 128 N. Y. 83, 93, 28 N. E. 137. A deed given under duress may be ratified by acquiescence for an unreasonable time. Page on Contracts, § 269. When the attorney for the administratrix of the estate of Philip Myers, deceased, Walter M. Chandler, sent for James A. Grey, Sr., in March of 1909, to inquire about this mortgage, Mr. Grey said (I quote Mr. Chandler’s testimony): “They had gotten the full consideration, that it was a good mortgage, and that if I would wait until the 1st of September that he would pay the mortgage.” The attorney waited, and in September, at Mr. Grey’s request, he gave a further extension of two or three weeks. Mr. Grey admits that he told Mr. Chandler that the mortgage was a good mortgage, but-he says that he meant that the value was in the property; he also admits that he got the extensions and never made claim of any' defects in the instrument until four months after his first interview with the estate’s attorney. On quite important and distinct matters Mr. Grey is squarely contradicted both by Mr. Chandler and by Mr. McNiece. I therefore refuse to find that this mortgage was procured by duress or lacked consideration, but shall adopt the statement of Mr. Grey to Mr. Chandler: “It is a good mortgage for full consideration.” Judgment for plaintiff, with costs.