Dodge v. Miller , 81 Hun 102 ( 1894 )

BRADLEY, J.

The only proposition urged in support of the defendant’s appeal is that the plaintiff could not, by the assignment to him, effectually take the relation and rights of vendee which ! Jones had to the parol contract with the defendant. It is not qnes- j tioned that there had been such part performance as to relieve it from the statute of frauds, for the purposes of equitable relief, but it is insisted that such relief is available to Jones only. Ho reason appears why the equitable right to specific performance perfected in him might not be transmitted by assignment -to the-plaintiff, and the execution of the contract in his behalf directed.. The subject of the controversy, mainly, is whether the defendant’s judgment for the money advanced by him to Jones is entitled to>- or should have priority to the claim of the plaintiff. When theparol agreement of sale to Jones was made, the defendant’s title was incomplete; but he contemplated perfecting it, and did so after the assignment to the plaintiff, and thereupon tendered a deed to Jones, and required him to pay the purchase money and the amount of money so loaned to' him, or secure the payment of it by mortgage on the premises. This Jones declined to do. It may reasonably be supposed that the defendant, having the1 legal title, advanced the money to Jones to aid him in the erection: of the house upon the land, as the value of it, thus enhanced,, would be adequate security for the loan, and with a view of having the benefit of it as such. He would not, however, have a vendor’s lien for the money so loaned, unless it could be treated as a part of the purchase money. If the legal title had been in Jones, the loan of money to him upon his parol promise to secure-it by mortgage at some future time upon the land would not have been effectual to create an equitable lien upon the premises. The promise, without something further, would be within the statute of frauds, and void. 2 Rev. St. p. 134, § 6. The English doctrine that the deposit of title deeds as security for money advanced constitutes an equitable mortgage has been recognized in this state. Rockwell v. Hobby, 2 Sandf. Ch. 9; Chase v. Peck, 21 N. Y. 581, 584.

In the present case, Jones had no muniment of title. The evidence does not permit the inference that the money loaned by the defendant to Jones became a part of the purchase money of the premises; and it is not seen that an equitable mortgage or lien is supported by the fact that the defendant, in his relation of vendor, held the title in trust for Jones. The difficulty with the defendant’s claim of lien is that his loan was made upon the mere oral promise of Jones to secure it when he obtained the title. In Smith v. Smith, 51 Hun, 164, 4 N. Y. Supp. 669, cited by the defendant’s counsel, money was expended by the plaintiff in the erection of a building upon premises pursuant to an arrangement with the owner that he should have a lien upon it for the amount so expended, with the right to sell, if necessary for Ms protection. It was there held that the lien was not dependent upon the agreement alone, but was also founded upon the fact that it would be repugnant to natural justice to permit the owner of the legal title to retain the building without compensating the plaintiff for the money so expended by him. This was affirmed. 125 N. Y. 224, 26 N. E. 259. While in the case at bar the facts do not establish an equitable lien in behalf of the defendant, enforceable by affirmative action on his part, there is, in view of the fact that the money was advanced to aid in the erection of the house on the premises, and on Jones’ promise to so secure -It, an equity which the court may recognize in an action for spe.ciffc performance of the parol contract. An action for such relief -is addressed to the sound discretion of the court, in such sense that the party in pursuit of it must come into court with clean hands, and, seeking equity, must do equity. Such discretion is not arbitrary or capricious, but its exercise is qualified by the application of recognized principles. Seymour v. De Lancey, 6 Johns. Ch. 222, 3 Cow. 445. The circumstances, as found, of the advance of the money to Jones, were such as to legitimately bring the subject within the consideration of the court. The purpose of it, in Its relation to the premises in question, and the promise and faith of the contemplated security upon which the loan was made, were such as to justify, as between the defendant and Jones, the direction of the court that the amount be paid or secured, pursuant to the understanding, as a condition of granting specific performance of the contract in behalf of the latter. Canajoharie Church v. Leiber, 2 Paige, 43; Sutphen v. Fowler, 9 Paige, 280. And, upon the facts found by the trial court, the plaintiff took the assignment from Jones subject to the equities between him and the defendant. Reeves v. Kimball, 40 N. Y. 299. The judgment, therefore, should be affirmed, without costs of this appeal to either party. All concur.