Newton v. Manwarring , 32 N.Y. St. Rep. 389 ( 1890 )

Hardin, P. J.

1. Plaintiff was not a creditor of Eliphalet Man warring. He can derive no aid from the doctrine laid down in Coleman v. Burr, 25 Hun, 240; affirmed, 93 N. Y. 17. It appears in the opinion delivered in that case when before this court that the plaintiff was a judgment creditor of Burr, and that his action was brought to set aside a conveyance made by Burr to his wife “on the ground that such conveyance was without consideration', and was executed with Intent to defraud Burr’s creditors.” Whatever may have been the intent on the part of Eliphalet Man warring in making the settlement with his wife for money and property theretofore received of her, and in acknowledging an indebtedness to her of a sum nearly equivalent to the amount due upon the Lewis mortgage, the plaintiff was not in a situation to allege that such settlement, and the transfer of the mortgage in the payment of the sum found due, was fraudulent and void because made to hinder and delay creditors of Eliphalet Man warring. Allyn v. Thurston, 53 N. Y. 622; Briggs v. Austin, 8 N. Y. Supp. 786. So far as the evidence is disclosed in the appeal book, it would have been competent for Eliphalet Man warring to have taken the money which he had in the Sherburne Bank, and paid off the indebtedness which he was under to his wife; and she with that money, either in her own personal hand, or in the hand of her husband as agent, might have procured an assignment of the Lewis mortgage, and, having done so, the mortgage in her hands would have been a valid security, prior in point of time, prior in point of record, and prior in point of equity to the lien of the plaintiff. It appears in the evidence that Gilbert Man warring and Eliphalet Man-warring, subsequent to the execution of the Lewis mortgage, conveyed the premises subject to the “Charles Lewis.mortgage of $1,000,” as well as the Pellett mortgage of $3,500 to M. Palmer Newton; and in the conveyance to him is a clause assuming the payment of such mortgages. As between Miles Palmer Newton and the Manwarrings, the land was chargeable with the payment of the Lewis mortgage, and they had the right to compel the payment thereof out of the land. Marsh v. Pike, 10 Paige, 595. The obligation of the grantee in the deed inuicd to the benefit of Lewis, and he was entitled to enforce it, not only against the lands, but against the party thus assuming the payment thereof. Blyer v. Monholland, 2 Sandf. Ch. 478. When the plaintiff took his mortgage from Miles Palmer Newton, he was informed by the record of the existence of the Lewis mortgage, and of the fact that the purchase by Miles Palmer Newton was subject to the mortgage given to Lewis, and that the payment thereof had been assumed by Miles Palmer Newton. Such was the force of the record.

2. Even if the appellant was only entitled to hold the mortgage as a security for loans and advances of money or property to her husband actually made, she was entitled, as he had voluntarily agreed to pay interest thereof, to hold the same for the amount of the principal, and the interest as well. If it were assumed' that the plaintiff was in the situation of a creditor challenging the settlement between the appellant and her husband as fraudulent, still, if the debts were valid and the claims honest against the husband, and he agreed to pay interest thereon, an allowance thereof in a settlement with her would be valid. Spencer v. Ayrault, 10 N. Y. 202. In delivering the opinion in that case, Edwards, J., said, viz.: “In my judgment it is not absolutely necessary to the lona ftdes of such an allowance that the charge should be of such a character that it might be recovered in a suit brought by a creditor against his debtor. Interest is always chargeable where there is either an express or implied agreement to pay it, (Meech v. Smith, 7 Wend. 315;) and there are many dealings amongst men in which interest is habitually charged and paid when it could not be claimed on the ground of strict legal right. These transactions are regarded as fair and just as between the parties, and they cannot be considered fraudulent as to others.” It appears quite clearly from the evidence, as well as the findings of fact made thereon, that the money and property which the husband received from the wife was upon an agreement that the husband should pay for the same to the wife; and according to Jaycox v. Caldwell, 51 N. Y. 395, “the agreement is for a good consideration, and imposes an equitable obligation upon the husband. ” It was in that case further held, where a preference was made in good faith, without an intent to defraud, in an assignment for the benefit of creditors, the preference is valid, and does not vitiate the'assignment. We have recently discussed a kindred question in Ellis v. Myers, 8 N. Y. Supp. 139, and we there cited the case of Jewett v. Noteware, 17 Wkly. Dig. 438, where an indebtedness that had existed 18 years was secured by a mortgage, together with interest on it; and the court held in that case that, “as the debt was 6 onajide, the judgment creditor could not attack the mortgage. ”

3. We think there is no force in the suggestion made by the respondent in respect to supposed waste committed by the husband of the appellant upon the premises in question. First, there was nothing in the pleadings which charges her with committing any waste; and, second, there is no finding that she has committed waste; and, third, there is nothing in the evidence which warrants the inference that she is chargeable with having caused any injury to the real estate covered by the Lewis mortgage after she became the owner thereof. .

4. The plaintiff had not acquired the legal title to the premises at the time the appellant became the owner of the Lewis mortgage, and he has not, either by his pleadings or by evidence furnished upon the hearing, established facts and circumstances which would charge her with" the intentional impairment of the value of the premises upon which the plaintiff’s security rests. Our attention is called to Yates v. Joyce, 11 Johns. 136. That was “an action on the case” for -fraudulently removing the property of a judgment debtor," and converting it “ with intent to defeat the judgment.” We find nothing in that case which aids the respondent."

5. The learned counsel for the respondent insists that the mortgagor “cannot pay the mortgage, and keep it alive, for the purpose of securing another debt in lieu of the extinguished liability. ” We see nothing in that position which aids the respondent, when applied to the facts before us. It is not found as a fact that Eliphalet Manwarring paid Lewis, the executor, the mortgage; indeed, such fact was not proven. And it. is found by the trial judge: “The said Charles Lewis assigned said bond and mortgage to Annie E. Man warring, the wife of Eliphalet F. Man warring, which assignment was duly recorded,” etc. Nor do we think there was any merger. The appellant did not have the legal title to the property covered by the mortgage. At most, she only had an inchoate right of dower therein; and there is no intention that there should be a merger. On the contrary, the intention was very clear that there should not be a merger, and that she might hold the mortgage as a lien upon the property. Such" is apparent from the transaction as disclosed by her upon the trial as a witness called at the instance of the plaintiff, and by the facts as they appear in the findings of the trial judge. In Spencer v. Ayrault, 10 N. Y 204, it was said: “It is a well-settled rule that, when a greater and a less estate meet in the same person, equity will preserve them distinct, provided there is an express or implied intent to do so.” Judgment reversed on the exceptions, and a new trial ordered, with costs to abide the event. All concur.