Kullman v. Cox

O’BRIEN, J. (dissenting).

I cannot concur in the conclusion reached by the majority of the court. It is conceded that, in order for the plaintiff to succeed in this action, the title which he tendered must be marketable and free from reasonable doubt. It appears that the premises were part of a larger tract of which the plaintiff’s wife ■died seised in 1885, subject to the Hupfel mortgage of $3,600, upon which interest was payable at the rate of 6 per cent., and the principal of which was not payable until January, 1889. In June, 1885, six months’ interest, amounting to $108, became due; and, remaining unpaid for more than 30 days, the mortgagee declared the principal due because of such nonpayment, and brought an action to foreclose the mortgage, laying the venue in the county of Westchester. The property was subsequently sold under foreclosure, and bid in by the mortgagee for $4,000. The referee’s deed was recorded on February 23, 1886; and two minutes later a deed from Hupfel, the mortgagee, to Kullman, the plaintiff, expressing a consideration of $4,000, was recorded in the same office, together with a mortgage executed by the plaintiff back to Hupfel for $3,800, payable February 1, 1889, with interest at 6 per cent. The plaintiff, prior to the death of his wife, had resided with her and her four children, three of whom were minors, mpon the mortgaged premises, and maintained there a saloon, buying *911beer from the mortgagee, who was a brewer. The plaintiff, as tenant by. the curtesy and as guardian in socage of his minor children, while in the possession and enjoyment of the premises, had the duty cast upon him of paying the interest on the mortgage, and thus preventing a foreclosure. In addition, as guardian in socage, he occupied a fiduciary relation towards his minor children, which would prevent ium from obtaining at their expense any individual benefit. Having failed to discharge the obligation which rested upon him of paying the $108 interest, and having subsequently obtained the premises, of which the minor children were deprived by reason of Ms default, there would be a fair ground for contending that the title thus acquired inured to the benefit of such minors. Apart, however, from this, the facts appearing, of which a purchaser examining the record was chargeable with notice, would raise a fair inference that the forms of law, wMch were strictly observed in the foreclosure suit, and wMch. devested the minors of their title in and to the property, were resorted to for that specific purpose, because we find that the $108, wMch was a small amount due for interest, was allowed to remain unpaid, and the venue of the foreclosure suit was fixed in Westchester county, while the parties all resided in the city of New York; and, contrary to the rules of the court, a sale took place upon the premises, instead of at the Eeal-Estate Exchange, and the purchase was made by the mortgagee, who, prior and subsequent to the foreclosure, was engaged in selling beer to the plaintiff for Ms saloon; and thus the inference that the suit was a friendly, and not a contested, action arises.

Although the referee’s deed is dated in January, it appears that it was not recorded until just two minutes before Hupfel conveyed the property to the plaintiff. The consideration for that conveyance was $4,000, the plaintiff giving back a mortgage for $3,800, and paying in ■cash at that time more than would have been sufficient to pay the interest when it was due. The effect of the foreclosure, therefore, was not to put the mortgagee in any better position, or give him more ample security, it appearing that he increased the amount of the principal by $200; nor was it of any advantage to the plaintiff, because it did not assist him to pay the interest wMch was due, but compelled Mm, in addition,' to pay the costs and expenses of the foreclosure suit; but it cut off and devested the title of the minors. I tMnk there is force, therefore, in the argument of the respondent, that all the circumstances attending the transaction appearing on the record, raise the presumption that the plaintiff procured the foreclosure for the purpose of cutting off the remainders of Ms infant ■cMldren, and acquiring the whole title for himself.

It is claimed that the fact that the father held the title, and did not enter into this contract until after the youngest child had become of age, in some way strengthened Ms position. TMs contract was made in November, 1896; and it would appear that the youngest cMld became of age in the same year, and some months prior thereto. But there is no evidence that any of the minors ever had knowledge of the conduct of their father, or that notice was in any way ever brought Nome to them; it appearing that most of them left him about two *912years after the death of his wife. Their right, therefore, to repudiate his conduct, or to insist upon their rights in the property, was not terminated, nor would the statute of limitations be set running until after notice or knowledge had been brought home to such children.

It is further insisted that it was error not to permit oral evidence to be introduced to remove the doubt which was thus created as to the validity of the plaintiff’s title. In excluding such, I do not think that the court erred, because, as said in Fleming v. Burnham, 100 N. Y. 1, 2 N. E. 905:

“A title open to a reasonable doubt Is not a marketable one, and the court cannot make it one by passing upon an objection depending on a disputed question of fact or a doubtful question of law, in the absence of the party in whom the outstanding title is vested.”

And in Moore v. Williams, 115 N. Y. 592, 22 N. E. 234, it is said:

“A good title means, not merely a title valid in fact, but a marketable title, which can again be sold to a reasonable purchaser, or mortgaged to a person of reasonable prudence as a security for the loan of money. A purchaser will not generally be compelled to take a title when there is a defect in the record title which can be cured only by resort to parol evidence, or when there is an apparent incumbrance which can be removed or defeated only by such evidence; and, so far as there are any exceptions to this rule, they are extraordinary cases, in which it is very dear that the purchaser can suffer no harm from the defect or incumbrance. In Swayne v. Lyon, 67 Pa. St. 436, Sharswood, J., said: ‘It has been well and wisely settled that, under a contract for the sale of real estate, the vendee has the right, not merely to have conveyed to him a good title, but an indubitable one. Only such a title is deemed marketable; for, otherwise, the purchaser may be buying a lawsuit which will be a very severe loss to him. both of time and money, even if he ultimately succeeds. Hence it has been, often held that a title is not marketable when it exposes the party holding it to. a litigation.’ ”

See, also, Greenblatt v. Hermann, 144 N. Y. 13, 38 N. E. 966, Irving v. Campbell, 121 N. Y. 353, 24 N. E. 821: Kilpatrick v. Barron, 125 N. Y. 751, 26 N. E. 925.

The defendant was to pay $8,500 for this property; but the result of the foreclosure has been to place the plaintiff in undisturbed possession of the property, wherein he was enabled to carry on his business, not even being burdened, except for a short time, with the support of his children. Thus, by the default which he suffered in failing to pay $108, he has secured to himself, not only a long lease o£ the premises, but a substantial equity in money, all of which would have inured to the benefit of the minors, towards -whom the plaintiff held a fiduciary relation as guardian in socage, if, in the discharge of the obligations imposed upon him by such relationship, he had paid the amount of $108 interest, which was much less than the sum that he subsequently paid in order, for his individual benefit, to acquire the property, of which, as the result, apparently, of a friendly action between himself and the mortgagee, he succeeded in depriving Ms children.

I tMnk that the judgment below was right, and should be affirmed.