Baird v. Baird

• Decision Date: 16 April 1895
• Citation: 145 N.Y. 659,40 N.E. 222
• Parties: BAIRD v. BAIRD et al. (two cases).
• Court: New York Court of Appeals Court of Appeals

145 N.Y. 659

40 N.E. 222

BAIRD

v.BAIRD et al. (two cases).

Court of Appeals of New York.

April 16, 1895.

Appeals from supreme court, general term, Fifth department.

Actions by Isabella M. Baird, as executrix, against William Baird, impleaded, etc., and against James C. Baird, impleaded, etc., to foreclose mortgages. From the judgments of the special term (30 N. Y. Supp. 785) affirming judgments for defendants, plaintiff appeals in each case. Affirmed.

Andrews, C. J., dissenting.

W. A. Sutherland, for appellant.

George A. Benton, for respondents.

O'BRIEN, J.

Prior to the year 1873, John Baird, the plaintiff's husband and testator, was the owner of the farm which is covered by the two mortgages sought to be foreclosed in these actions. In that year his two sons, William and James, defendants, went into possession of it, and the father directed the assessors to transfer the assessment on the farm to his sons. They have remained in possession ever since. In October, 1874, the father deeded the farm to the sons, who took title under these deeds as tenants in common. It appeared that the father had two other farms, all of which had been paid for and improved with the aid of the lobor and services of his sons, who had worked for him after their majority. On a settlement between the father and the two sons, it was agreed that he was indebted to them in the sum of $5,000, and that was the consideration for the conveyance. A deed was given to each son conveying an undivided half of the farm in consideration of $2,500. The evidence tended to show, and the trial court has found, that the intention was to vest the title in the sons in fee; but it appears that the father had some fears that his sons would not be able to take care of the property thus conveyed, and that it might be lost in speculation or otherwise. In order to prevent such a result, as he said, he required the sons to give back to him mortgages for $1,555 each on the farm. No bond was given, and no actual debt was intended to be secured, and they were not recorded by the father in his lifetime. With respect to the purpose and consideration of these mortgages, the testimony tended to show, and the trial court found, that they were not intended to secure any debt or to be or become a valid subsisting security, or to be recorded or enforced, and were, in fact, without any consideration whatever. In the year 1875 the wife of John Baird, and mother of the defendants, died, and the year following he married the plaintiff. He died in 1883, leaving a will, in which the plaintiff was named as executrix. In that capacity she brought actions against each of the sons to foreclose the mortgages given by them respectively. The complaint was dismissed in each case, and the judgments were affirmed at general term. There are two appeals and two records, but both judgments rest on precisely the same facts, and the questions involved in both appeals are identical. Both cases may, therefore, be conveniently considered and disposed of as one.

The plaintiff's right to enforce the mortgage is the same and no other than the mortgagee, her husband and testator, had in his lifetime. She stands in the place of her husband, and cannot enforce the instrument unless he could, and every defense that the defendants could urge against the mortgage during the life of the father they may interpose now against his personal representative. The instruments purport to have been given to secure the payment of money, but it was shown at the trial affirmatively, and found by the trial court, that no debt in fact existed in favor of the father against either of the sons; that there was no intention to give the mortgage on the one hand, or to hold it on the other, as security for any debt; that in fact there was no legal or equitable consideration moving between the parties, and no intention on either side to treat the instruments as binding obligations or as valid or subsisting securities. The evidence upon which these findings were made, if competent, was sufficient, and the fact is not open to question or review here.

The findings are based upon the business relations which the parties occupied to each other before the father gave up the possession of the farm to the sons, and then conveyed it to them, taking back the mortgages in question, and upon his subsequent conduct and declarations as to the character of the instruments and the purpose of their execution and delivery. The general principle that an instrument under seal, in the form of a mortgage upon real estate, which upon its face expresses a consideration and purports to have been given as security for a debt, may, nevertheless, as between the parties, be shown to have been purely voluntary or without any consideration, and so invalid, is not denied. Davis v. Beckstein, 69 N. Y. 440;Hill v. Hoole, 116 N. Y. 299, 22 N. E. 547;Briggs v. Langford, 107 N. Y. 680, 14 N. E. 502; Thomas, Mortg. § 847; Jones, Mortg. § 1297.

The point upon which the learned counsel for the plaintiff relies is that evidence was not admissible at the trial to wholly contradict and defeat the instruments by showing, contrary to what appeared on their face, that they were intended to have no operation whatever. It is sought to distinguish this case from that of a deed, absolute upon its face, which may be shown to be in fact a mortgage, and from the numerous other cases in which equity permits a party to show that an instrument, appearing upon its face to be of one character, is or ought to be in truth of quite another character. It is said that the principle upon which these cases rest gives no sanction to what was held by the court below in this case, that a party may impeach his deed by showing, not only that it was without consideration, but that it was intended to have no validity or become of any binding force whatever. The desire on the part of the father to retain some sort of guardianship over the title to the farm which he had conveyed to the defendants was, perhaps, natural enough under the circumstances, and it is frequently shown in such transactions. That the mortgages were not intended to be held by him for any other purpose is supported by the circumstances that no bond was given; that they were not recorded; and no claim was made by the mortgagee during his life, a period of about nine years, that they were in his hands for any other purpose, or for the payment of either principal or interest, though past due. All the circumstances, when considered with the proof of the statements and declarations of the father, were sufficient to warrant the findings of the trial court with respect to the real purpose with which the instruments were made and their true consideration. Holmes v. Roper, 141 N. Y. 67, 36 N. E. 180;Lyon v. Riker, 141 N. Y. 225, 36 N. E. 189. The presumption of some consideration that arose from the presence of a seal was overthrown, and we must assume that the instruments were without consideration of any kind. Gray v. Barton, 55 N. Y. 68;Best v. Shiel, 79 N. Y. 15;Torry v. Black, 58 N. Y. 185;Home Ins. Co. v. Watson, 59 N. Y. 395;Dubois v. Hermance, 56 N. Y. 673.

There is no reason that we can perceive for giving to these instruments any greater force or effect than was contemplated by the parties when they were executed and delivered. There is no estoppel or any right which attached in favor of third parties, and we are not aware of any principle which would now require a court of equity to treat these instruments as valid subsisting obligation, unless they were intended as such when made, and this is negatived by the findings. Nor do we perceive any good reason why the real purpose and true consideration and object of the mortgages should not be made to appear when the aid of a court of equity is invoked for their enforcement. The authority relied upon by the learned counsel for the plaintiff in support of his contention is a remark of Judge Rapallo in the case of Hutchins v. Hutchins, 98 N. Y. 56, in which it is said: ‘It has never been held that a deed can be so far contradicted by parol as to show that it was not intended to operate at all, or that it was the intention or agreement of the parties that the grantee should acquire no right whatever under it, or that he should reconvey to the grantor on his request without any consideration.’ That remark must be understood with reference to the facts of the case then under consideration, which was the case of a deed absolute in form, but intended as a mortgage. The defendant's answer was, however, so drawn as to leave room for the construction that he intended to urge that the conveyance was intended to be wholly inoperative, or in trust, or to secure a debt which the parties had agreed should never be paid, and it was with reference to this feature of the case that the...