House v. Lockwood

• Decision Date: 28 February 1893
• Citation: 33 N.E. 595,137 N.Y. 259
• Parties: HOUSE v. LOCKWOOD et al.
• Court: New York Court of Appeals Court of Appeals

137 N.Y. 259

33 N.E. 595

HOUSE

v.LOCKWOOD et al.

Court of Appeals of New York.

Feb. 28, 1893.

Appeal from supreme court, general term, first department.

Action by William M. House against John L. Lockwood and another to foreclose a deed executed by defendants to him, and alleged to have been intended as a mortgage. From a judgment of the general term (17 N. Y. Supp. 817) affirming a judgment dismissing the complaint on the merits, and granting affirmative relief to defendants, plaintiff appeals. Affirmed.

Edward C. James and N. Quackenbos, for appellant.

Theall & Beam, (Austen G. Fox, of counsel,) for respondents.

EARL, J.

On the 7th day of October, 1876, the defendant John L. Lockwood had the title to certain real estate situate in the state of Illinois, but his wife, the other defendant, was the real owner thereof. On that day he and his wife executed a deed of the property to the plaintiff, and he claims that the deed, although absolute in form, was intended as a mortgage to secure an indebtedness due from Lockwood. Subsequently, on the 7th day of December, the plaintiff and his wife executed a deed of the same real estate to Mrs. Lockwood, which he claims was never delivered. His claim is that the deed was executed at the request of Mr. Lockwood, and was not to be delivered until the indebtedness of Lockwood had been discharged. The defendants claim that both deeds were drawn at the same time under an arrangement by which the real estate was to be conveyed to the plaintiff, and by him to Mrs. Lockwood, for the purpose of vesting the legal title to it in her; that the deed to him was executed in pursuance of that arrangement, and not as a security for any indebtedness due from Mr. Lockwood; and that the deed from the plaintiff and his wife to Mrs. Lockwood was also executed in pursuance of that arrangement, and was actually delivered to her, and then by her placed in his possession as her bailee for safe-keeping, to be returned to her upon her subsequent demand. Thereafter, on the 29th day of December, 1876, the plaintiff presented a petition to the district court of the United States praying that Lockwood might be adjudged a bankrupt; and such proceedings were had upon that petition that subsequently, on the 10th day of January, 1877, Lockwood was adjudged a bankrupt, and on the 23d day of September, 1878, he received a discharge in bankruptcy from all his debts. Subsequently Mrs. Lockwood demanded from the plaintiff the deed left in his possession, and he refused to deliver it to her. Thereafter, in December, 1879, she commenced an action against him to recover the possession of that deed. She annexed a copy of it to her complaint, and alleged that she was the owner of the real estate therein described; that she left the deed with him for safe-keeping; that he promised to hold it for her, and return it to her when she requested him so to do; that she had demanded it of him, but he, without any cause or right, refused to deliver it to her; that the deed had never been recorded, and that the record title appeared to be in him; that there was danger that, unless he was restrained by an order of the court, he would not record the deed, but would sell or incumber the real estate or dispose of the deed; that she was entitled to the immediate possession of the deed; and that such possession was necessary to secure to her her right and interest in the property; and she prayed judgment for theimmediate recovery and possession of the deed, and for such damages as she had sustained by its wrongful detention, and for an injunction restraining the defendant from in any way disposing of the deed, or conveying or interfering with the real estate described therein. The defendant denied the allegations of the complaint, except that Mrs. Lockwood had demanded the deed from him, and alleged that the title to the real estate was in him, and that he was lawfully entitled to have and hold the same as security for the payment of upwards of $3,000; that the real estate had been conveyed to him by Mr. and Mrs. Lockwood by a deed which, although absolute in form, was intended and agreed to be given as security for the payment of the money, and he demanded judgment in his favor that Mrs. Lockwood, by a day to be fixed in the judgment, pay the amount due him for which the real estate was security, and, on default thereof, that she be debarred and foreclosed of any right, title, or interest in the real estate, and that the defendant have such other relief in the action as might be just. The action, being at issue, was referred to a referee, and he found that the deed of December 7, 1876, had never been delivered to Mrs. Lockwood, as alleged in the complaint; that it was not left by her with House for safe-keeping, or for any purpose; that he did not agree to receive the same for and return it to her; and that he did not receive the deed from her at all; that the deed was executed by Mr. and Mrs. House at the time mentioned in the complaint, and was retained by him in his possession, and was never delivered to Mrs. Lockwood, or to any one else on her behalf; that the property mentioned in the deed had previously to December, 1876, been conveyed by Mr. and Mrs. Lockwood to House to be held by him as security for certain moneys then owing him or the firm of which he was a member; and that the deed mentioned in the complaint was executed by House and wife for the purpose of delivery to Mrs. Lockwood when the money for which the prior deed was given to secure was paid; and that it was retained by House for such purpose, and was never delivered to her and that the money for which the real estate was security had never been paid. He found as conclusion of law that she was not entitled to recover against him judgment as demanded in the complaint, but that he was entitled to judgment dismissing her complaint. Subsequently, upon the report of the referee, judgment was entered against her in that action dismissing her complaint. Thereafter, in June, 1883, this action was commenced, and the plaintiff in his complaint alleges the execution and delivery to him of the deed of October 7, 1876, and that the deed, although absolute in form, was intended as a mortgage. He also alleges that it was adjudged in the prior action above referred to, by Mrs. Lockwood against him, that that deed was executed and delivered to him as security. The defendants deny the material allegations of the complaint, and allege that the deed was executed simply for the purpose of transferring the title from Mr. Lockwood to his wife. They also allege as a defense to the action the discharge in bankruptcy of Mr. Lockwood from his debts. The action was brought to trial at a special term and there the plaintiff gave evidence tending to show that he held the deed as security, and, among other evidence, he introduced the judgment record in the prior action of Mrs. Lockwood against him. The defendants proved the discharge in bankruptcy, and gave evidence tending to show that the deed was executed by them to the plaintiff in pursuance of the arrangement alleged by them. After hearing the evidence the following questions were framed, under the direction of the court, for submission to a jury: (1) ‘Was the deed conveying certain premises in the state of Illinois, dated October 7, 1876, and executed by the defendants, John L. Lockwood and Juliet R. Lockwood, his wife, to the plaintiff, William M. House, (being the deed described in the complaint,) delivered to said House by said Lockwoods, or either of them, as security for the indebtedness, past, present, or thereafter to arise, of said John L. Lockwood to said House, or to the firm of S. A. House & Sons?’ (2) ‘Was said deed delivered to said Willaim M. House by the said Lockwoods, or either of them, in order that said House might and should reconvey the premises therein described to said defendant Juliet R. Lockwood?’ The parties subsequently submitted their evidence to the jury, and they answered the first question, ‘No,’ and the second question, ‘Yes.’ Thereafter the action was again brought to a hearing at a special term, and the trial judge found, in accordance with the findings of the jury, that the deed of October 7, 1876, was not a mortgage; that the real estate was not conveyed to the plaintiff as security for money due from Mr. Lockwood, and that the deed was executed and delivered to the plaintiff for the purpose of transferring the legal title to the real estate through him from Mr. Lockwood to his wife; and he found, as conclusions of law, that the complaint should be dismissed on the merits, and that the defendants were entitled to a decree adjudging that the plaintiff reconvey the real estate to Mrs. Lockwood, and judgment was entered in pursuance of the findings. That judgment having been affirmed at the general term, the plaintiff has appealed to this court.

The findings of fact are against the plaintiff, and, unless they can be successfully assailed, his complaint was properly dismissed upon the merits. He contends that the prior adjudication in the action of Mrs. Lockwood against him is conclusive upon the defendants in this action, and conclusively establishes that he took the deed...