Hopkins v. Ensign

• Decision Date: 07 October 1890
• Citation: 25 N.E. 306,122 N.Y. 144
• Parties: HOPKINS, v. ENSIGN et al.
• Court: New York Court of Appeals Court of Appeals

122 N.Y. 144

25 N.E. 306

HOPKINS,

v.ENSIGN et al.

Court of Appeals of New York,

Second Division.

Oct. 7, 1890.

Appeal from a judgment of the general term of the fifth judicial department, affirming a judgment of foreclosure and sale entered upon the report of a referee. This action was to foreclose a mortgage upon real estate in the city of Buffalo, and made by the defendant Mary A. Ensign to Truman C. White to secure the payment of $2,500, and interest, and by said White assigned to the plaintiff. The material facts were as follows: Charles Ensign died insolvent, seised of the property in question, and by his will devised the same to his wife, the defendant Mary A. Ensign, for life. The premises were of the value of $35,000 and upwards, and at the death of Charles Ensign were incumbered by a mortgage held by one Potter, which was thereafter foreclosed, and the premises decreed to be sold. The amount due upon said mortgage at the date of the said decree was $16,225. George W. Holt was the sole executor of the will of said Charles Ensign, and the surviving partner of a firm composed of himself and said Ensign; and one Cornelia Hamilton, prior to the commencement of the foreclosure action, had obtained a judgment against said Holt, as surviving partner, for $600,000, and had commenced an action to subject said premises to the lien of said judgment. The plaintiff and Truman C. White were partners in business as attorneys at law, and as such were the attorneys for Potter in the foreclosure suit above mentioned. Mr. White had also been engaged on behalf of said Holt in numerous business and professional transactions growing out of the affairs of said firm of Holt & Ensign, in which he had rendered a large amount of professional services, and for which he had received no compensation, and for which compensation could not be compelled from said Holt on account of his insolvency. The parties interested in the premises at the time of the sale under the judgment in the Potter foreclosure action were Mr. Potter, the plaintiff in that action, Cornelia Hamilton, the holder of the judgment against Holt as surrviving partner, Mary A. Ensign, as the holder of a life-estate therein, and the defendant May Ensign, as heir at law of said Charles Ensign. Mary A. Ensign desired to become the purchaser of said property at the sale under the Potter foreclosure for an amount sufficient to satisfy that judgment, and Mrs. Hamilton had consented, so far as she was concerned, to permit her to buy the property at the sale for the amount aforesaid; and, to carry out that purpose, Mrs. Ensign had negotiated a loan of $18,000 from a savings bank, and Mr. C. A. Sweet, a friend, had agreed to advance the amount necessary to be paid on the day of sale and reimburse himself from said loan when made. Mr. White also intended to attend said sale, and bid, not merely on account of his client Mr. Potter, the amount necessary to satisfy his judgment, but also on behalf of another client, one Pratt, a much larger amount, if necessary, in order to obtain said property. This purpose coming to the knowledge of Mrs. Ensign, it was, after negotiations, agreed by her that if the said White and Pratt would abstain from bidding at such sale, and if thereby the premises should be obtained by Mrs. Ensign for the amount necessary to satisfy the Potter judgment, she would execute and deliver to said White in consideration thereof the bond and mortgage set forth in the complaint. Neither Pratt nor White bid at such sale, and Mrs. Ensign thereupon became the purchaser of the premises for the amount due in the foreclosure action, and thereafter executed and delivered to said White the bond and mortgage in question. The referee found as a fact that the same were executed by Mrs. Ensign intelligently, without duress, and with full knowledge of all her rights, and for a good and valuable consideration; and, as a conclusion of law, that the plaintiff, as assignee of said bond and mortgage, was entitled to the usual judgment of foreclosure and sale.

Adelbert Moot, for appellant.

Truman C. White, for respondent.

BROWN, J., ( after stating the facts as above.)

The defense to this action was placed upon two grounds: First, that the bond and mortgage in suit were obtained by duress; second, that they were not supported by a valid and legal consideration. The referee found that Mrs. Ensign executed the bond and mortgage ‘intelligently, and without duress, with full knowledge of all her rights,’ and as there was ample evidence to support that conclusion the exception to that finding need not be further referred to. The lack of a valid consideration to support the contract is said to result from the agreement on the part of the mortgagee not to bid at the foreclosure sale under the Potter mortgage, and it is contended that that agreement was one to prevent or suppress competition at a public sale, and was therefore void as against public policy. There is authority for this contention in many of the older cases. Jones v. Caswell, 3 Johns. Cas. 29;Doolin v. Ward, 6 Johns. 194;Wilbur v. How, 8 Johns. 444;Thompson v. Davies, 13 Johns. 112. See, also, 1 Story, Eq. Jur. § 293. But the rule applied in these cases has been very materially modified by the later decisions of the courts, and it is now settled that agreements between two or more persons, that all but one shall refrain from bidding and permitting that one to become the purchaser, are not necessarily, and under all circumstances, void. They may be entered into for a lawful purpose, and from honest motives, and in such cases will be upheld; and they will not vitiate the purchase, or necessarily destroy the completed contracts to which they refer, and in respect to which they are made. People v. Stephens, 71 N.Y. 527-546;Marsh v. Russell, 66 N. Y. 288;Marie v. Garrison, 83 N. Y. 14-28; Myers v. Dorman, 34 Hun, 115; Kearney v. Taylor, 15 How. 494;Wicker v. Hoppock, 6 Wall. 94; Phippen v. Stickney, 3 Metc. (Mass.) 384; Maffet v. Ijams, 103 Pa. St. 266; Garrett v. Moss, 20 Ill. 549;Bank...