In this case I regard the following facts, amongst others, as satisfactorily established .by the' evidence, many of them without dispute:
On and prior to April 5, 1890, the defendant Craig was the owner of a house and lot subject to a life estate of plaintiff therein. Upon said date an agreement was made by said persons and defendant Howlett whereby, in substance, "it was agreed that said premises should be sold for the sum of $12,000 and the proceeds placed in the hands of the latter as trustee, he paying the income thereon and such portions of the principal as the defendant Craig should consent to, during life, to the plaintiff, and the balance upon the death of the latter to said Craig. Said funds were so placed and continued in the possession of said Howlett as such trustee until on or about July 7, 1896, he having in the meantime, in" accordance with the trust agreement,, paid to the plaintiff the income and $500 of the principal of said sum.
On or about the last-mentioned date an agreement was made between said three persons which, amongst other things, provided, in substance, that said trust fund should be distributed, $6,000 being paid in money to the defendant Craig as her share and the balance of $5,500 to plaintiff “ by the assignment to him of a certain bond and mortgage executed by Caroline L. Alvord and. James U. Alvord, her húsband, to Alfred A. Howlett, for the sum of seven thousand dollars,” and on which there was said to be then unpaid the sum of $5,500 and certain interest, and the trust terminated. This bond and mortgage is the subject of the present" controversy. In November, 1889, the defendant Howlett had sold a farm in Oswego county to the Alvords for the sum of $7,000 and taken
At the time of the transaction between plaintiff and defendant Howlett with reference to the transfer by the latter to the former of his bond and mortgage as in payment of $5,500, plaintiff was about eighty years old and, as he appeared upon the trial, somewhat rambling in his mental operations. He was a dentist by profession and of no general business experience and was not represented in the transaction by any attorney or other adviser than Mr. Howlett.
In addition to the foregoing facts it is claimed by plaintiff and denied by defendant that the latter before and at; the time of the transfer made affirmative representations as to the value of the land covered by the mortgage and as to the responsibility of the obligors in the bond, which have since been proved to be incorrect. Without going to the extent urged by 'plaintiff, I think that not only the evidence introduced in his behalf upon this point, -but also the testimony of "the'defendant himself in regard to the necessity for him" to cash the mortgage and in regard to what he'considered- it
Very soon after the return of the execution as above, plaintiff brought this action to have the transfer of the bond and mortgage to him, in satisfaction of the amount above stated rescinded, and several defenses are urged by the defendant Howlett, the defendant Oraig answering but not appearing upon the trial.
It is urged in the first place that the agreement to terminate the trust between plaintiff and defendant having been made and entered into July 7, 1896, and the bond and mortgage not having been assigned until several days later by defendant to plaintiff, the relation of trustee and cestui que trust had been terminated by the agreement and did not exist at the time of or enter into the transfer in question. I think this contention, however, calls for altogether too narrow a view of the transactions. The transfer of the bond and mortgage was part of the consideration which entered into the agreement terminating the trust, was expressly contemplated by and referred to in said agreement, and in the receipt which plaintiff gave to defendant for the bond and mortgage when assigned the defendant Howlett is expressly treated and named as trustee. I have no doubt, therefore, that the relation of trustee and cestui que trust did exist as claimed by plaintiff and that the case is to be decided between the parties upon that theory.
The sharpest dispute of fact between the parties as above stated is upon the question whether the defendant in whole or part induced plaintiff to take the bond and mortgage by affirmative false statements as to its value.. I have indicated my views upon this point. I do not, however, regard this action as necessarily involving the issue of actual fraud, or plaintiff’s cate as necessarily dependent upon his establishing the affirmative thereof against defendant. Even if I should disregard this feature of affirmative representations, the issue in my opinion is fairly presented upon the other evidence in the case, whether the transaction between plaintiff and defendant was such a one as a court of equity will sustain between a trustee and his cestui que trust, and upon .that issue my conclusions are in accordance with the contention of plaintiff, that it is not such a one.
Defendant was the trustee' of* a man whose situation and condition T have sufficiently described. As such he was under the undisputed obligation to pay over $5,500 of trust funds. He has
. I pass now to a .consideration of some of the more technical defenses urged by the defendant, talcing up first the one whereby it is .insisted that plaintiff has with knowledge so dealt with the property assigned to him as to have ratified that transaction whatever its original' character may have been and to have estopped himself from questioning it in this action.
Some time after receiving the bond and mortgage in question, ■ the interest thereon not having been paid, plaintiff placed the- same in the hands of his attorney' for collection, and on or about October 14th a decree, of foreclosure and sale thereupon was obtained. Under such judgment the premises covered by the mortgage were duly advertised for sale and upon December 7th sold and struck off to plaintiff, A judgment for deficiency against the obligors in the bond was entered December 12th upon which on December 15th an execution was issued which subsequently and on or about December 26th was returned wholly unsatisfied, and immediately thereafter, this action was commenced.
There-is no evidence to indicate that at the time he commenced his -foreclosure suit and procured his judgment of foreclosure and sale plaintiff had acquired any knowledge about the bond and mortgage other than that possessed by him when it, was transferred’. ¡November 27th, however, his attorney wrote a letter to the defendant, of the substantial part of which the following is'a copy: •
“As the time approaches for the sale of the Alvord property in Oswego county we have become more and more convinced that the property will not sell for nearly the amount of the mortgage. The ’«test statement that' we have had from there is that the property
Ho action being taken by defendant in response to this letter, plaintiff’s attorney upon the day of sale made a somewhat informal tender to him of the decree in foreclosure, bond and mortgage, etc., which defendant refused to accept.
Because after possession of the information indicated by the foregoing letter and acts plaintiff proceeded with his sale and judgment for deficiency, it is claimed that he has so brought himself within the .principles applicable to a voidable transaction as to have perfected it between himself and defendant. It is claimed that- plaintiff has confirmed the transaction between him and defendant, •although originally voidable and cannot now attack it.
The question of waiver is largely one of intent. The very basis of a ratification such as is claimed here is that the acts from which it is to be inferred are consistent only with the theory that the party performing them has voluntarily and intentionally elected to ratify and stand upon the transaction in question. If the acts performed are as consistent with some other theory then ratification is.not to be found, certainly as a conclusion of law. It seems to me that the acts pointed to in this action can be quite as well explained upon the theory urged by plaintiff’s attorney, namely, that plaintiff wished to determine in a-perfectly proper and legal way whether the' bond and mortgage were really worth the sum for which he had taken 'them and which could be determined in no other way as effectually and completely as by proceeding to a public sale and judgment for deficiency. Plaintiff certainly had the right to ascertain in any reasonable way whether the bond and mortgage were worth the amount at which they had been passed to him before questioning the transfer and defendant’s action therein. Because
' Again, prior to the date when he is to be charged with any information or knowledge acquired after the transfer, plaintiff had commenced a foreclosure of his mortgage, proceeded to judgment and caused the premises to be advertised for sale. To hold that because after receiving any information to be imputed under the letter of his attorney to defendant dated November 27th, instead of dropping his proceedings theretofore commenced in their very midst, he completed the act already commenced and Carried them to an orderly completion and to the ordinary stopping place of such proceedings,. he is to be charged with having ratified the transaction between him and defendant, would, I think, be applying the principles of a prompt rescission more rigidly than has been done in any authority called to my attention.
It is further, urged by defendant that no sufficient tender back to him of the property received under the transaction sought, to be set aside has been made by plaintiff, and especially that no tender back or offer to return has been made of $50 collected by plaintiff upon the bond and mortgage. It is true that the tenders made by plaintiff through his attorney have been somewhat informal and have not in any case covered the item of money in question. This,
The suggestion is made in defendant’s brief that there was no offer whatever made to restore to defendant the amount of money which he had paid over to his other cestui que trust, the defendant Craig. It does not seem to me, however, that this was or is necessary or that her rights in any way complicate .or interfere with plaintiff’s. The agreement of July 7, 1896, provided, in substance, for a division of the trust fund then in defendant’s hands into two entirely independent parts, one of which should be paid to the defendant Craig and the other to the plaintiff, upon which the defendant’s trust should be terminated and he released. He has performed his agreement with the defendant Craig and he is credited therefor. This action affects only so much of said agreement as relates to .the manner in which defendant should pay to plaintiff the amount provided in said agreement. There seems to be no difficulty in correcting that part of the contract between plaintiff and defendant which provided that the Alvord bond and mortgage should be a complete payment of the moneys to be paid without in any manner disturbing the transactions between Mr. Howlett and the defendant Craig.
In accordance with the foregoing views, judgment is ordered for the plaintiff.
Judgment for plaintiff.