Fairchild v. McMahon

• Decision Date: 03 October 1893
• Citation: 34 N.E. 779,139 N.Y. 290
• Parties: FAIRCHILD v. McMAHON.
• Court: New York Court of Appeals Court of Appeals

139 N.Y. 290

34 N.E. 779

FAIRCHILD

v.McMAHON.

Court of Appeals of New York.

Oct. 3, 1893.

Appeal from supreme court, general term, second department.

Action by Clara Fairchild against Lucy Ann McMahon to foreclose a mortgage. From a judgment of the general term (20 N. Y. Supp. 31) affirming a judgment of the special term for defendant, plaintiff appeals. Affirmed.

Merrill & Rogers, (Payson Merrill and Geo. Co. Colt, of counsel,) for appellant.

McMahon & Handley and Dennis McMahon, for respondent.

O'BRIEN, J.

The plaintiff sought to foreclose a mortgage assigned to her before the commencement of the action, executed and delivered by the defendant, upon certain real estate of which she was the owner, subject to other mortgage liens, and bearing date April 30, 1890, for $1,500, payable one year from date, with semiannual interest. The mortgage was given to one Joseph H. Cain, with whom the negotiations and transactions which resulted in its execution and delivery were had, or with agents acting for him or in his interest. The defense is fraud practiced upon the defendant, and by means of which she was induced to make and deliver the mortgage and the accompanying bond. The facts to sustain this defense are stated with considerable detail, the substance of which, in brief, is as follows: On the 9th of April, prior to the execution of the mortgage, the defendant, through her husband, acting for her, entered into an agreement with Cain to exchange real estate. Each owned a house and lot incumbered by mortgage, the equity of redemption in which was to be conveyed to the other, and the agreement was actually carried out by the execution and delivery of proper conveyances. The mortgage in question was executed and delivered in pursuance of this agreement. It is alleged, in substance, that one Yoran, the plaintiff's son, was the principal actor in the transaction, and the real party to be benefited; that, though the record title to the real estate to be conveyed to the defendant was and Cain, yet his title was nominal, as his name was simply used by Yoran in the purchase of the property, and in the negotiations for its sale to the defendant, and in the conveyance. It is then charged, in substance, that Yoran, Cain, and their broker, and another broker employed by and acting for the defendant's husband, her agent, conspired together to cheat and defraud the defendant by false and fraudulent representations concerning the value and condition of the house which the defendant by the agreement was to receive in exchange for her property, and which she subsequently conveyed, and that, in reliance upon the truth of the statements, she, through her husband, entered into and executed the agreement and made the exchange. It is further averred that upon discovery of the fraud the defendant offered to rescind the whole transaction. The courts below have sustained the defense, and the charges of fraud and other facts alleged by the defendant are found by the learned trial judge to be substantially true. The testimony upon the issues of fact was very conflicting, but, after considering it with all the circumstances, we are unable to say that any of the findings material to the defense, and challenged by exception, are without support, and therefore feel concluded by them as to the facts.

There are one or two questions of law, however, that should be noticed. One of the false representations made by Yoran and his broker to the defendant's husband, as appeared from the findings, which was relied upon, and which influenced her action in making the exchange, and giving the bond and mortgage in suit, and upon which the finding of fraud is based, was that the house and lot transferred to the defendant in the exchange was worth $15,000; that Cain had just purchased it at the price of $12,000 from the executors of the deceased owner, who were compelled to sell at a price below the real value; and that such was the consideration expressed in the deed to him from the executors, as would appear from the record in the...