Kraemer v. Adelsberger

• Decision Date: 02 December 1890
• Parties: KRAEMER v. ADELSBERGER et al.
• Court: New York Court of Appeals Court of Appeals

122 N.Y. 467

25 N.E. 859

KRAEMER

v.ADELSBERGER et al.

Court of Appeals of New York,

Second Division.

Dec. 2, 1890.

Appeal from an order of the general term of the superior court of the city of New York, reversing a judgment in favor of the defendants, and directing a new trial.

The action was brought to recover $500 paid by plaintiff to defendants upon a contract for the sale of the real estate known as ‘No. 316 East Fifty-Second Street,’ New York city, together with expenses for examining the title. Both parties professed to be ready to perform the contract, but the plaintiff made certain objections to the title, and thereupon refused to accept the deed which was tendered to her, or to pay the balance of the purchase price, and, relying upon her objections to the title, she brought this action to recover the deposit paid by her upon the contract. The title to the property in question was conveyed to William S. Carr in 1869, who was at that time a member of the firm of William S. Carr & Co., and he held it as partnership property for the benefit of himself and his partners. The firm was composed of William S. Carr and Theodore Susemihl, as general partners, and Andrew Henderson as special partner. This firm was dissolved about January 1, 1871, by the withdrawal of Mr. Henderson, the special partner, and at that time the general partners were indebted to him in the sum of $60,000. A deed of conveyance of said premises and of other property, dated March 21, 1871, from William S. Carr to Andrew Henderson, which was absolute upon its face, was recorded as a conveyance on March 22, 1871. The object intended to be accomplished by this conveyance appears to have been set forth in a paper executed by all of the members of the late firm as of the date of April 1, 1871. It is as follows: ‘Whereas, Andrew Henderson, formerly a special partner in our firm,-W. S. Carr & Co.,-is desirous of withdrawing the amount due him, we have mutually agreed and come to the following understanding: Andrew Henderson receives and takes from W. S. Carr, trustee for the firm, the deeds of the following property: House and lot in One Hundred and Thirty-Second street, between Fifth and Madison avenues, subject to a mortgage for six thousand dollars, valued at fifteen thousand dollars; house and lot in Forest avenue, Eltona, Westchester county, N. Y., subject to a mortgage of twenty-five hundred dollars, valued at twelve thousand dollars; house and lot No. 152 East One Hundred and Fifteenth street, subject to a mortgage of five thousand dollars, valued at ten thousand dollars; house and lot No. 316, East Fifty-Second street, subject to a mortgage of six thousand dollars, valued at fourteen thousand dollars, as security for the sum of thirty thousand dollars, with the understanding that whatever above that sum is realized by the sale belongs to Wm. S. Carr & Co. And Andrew Henderson agrees to pay the difference to them whenever received; and Wm. S. Carr and Th. Susemihl, comprising the firm of Wm. S. Carr & Co., agree to make good and pay over any difference to Andrew Henderson, if that amount should not be realized. The sale to be effected inside of two years. Andrew Henderson has appointed Mr. George P. Labutat as his representative to receive the money for this real estate when sold. Andrew Henderson gives to Wm. S. Carr & Co. the right to rent and collect the rent for these houses and lots the same as they have dome heretofore before the deeds were made over to him, and in return Wm. S. Carr & Co. agree to see that the taxes and assessments, as well as the interest on the first mortgages, are paid. It is further mutually understood that, this property being only held by Andrew Henderson as trustee for the sum of thirty thousand dollars, as before mentioned, Andrew Henderson agrees not to dispose of any of this property for less amount than the deeds made over to him call for, without getting the consent of Wm. S. Carr & Co., or else forfeit his claim on Wm. S. Carr & Co. in case he should not realize the amount of thirty thousand dollars, for which it is pledged. Wm. S. Carr & Co. give, and Andrew Henderson receives, their notes for thirty thousand dollars, payable twelve, eighteen, and twenty-four months from March 15th, 1871, this being the balance of his claim on the firm. Wm. S. Carr & Co. agree further to pay over quarterly-that is, June 15th Sept. 15th, Dec. 15th, and March 15th-to Mr. Aikin, as Andrew Henderson's banker, the interest, at the rate of seven per cent. per annum, due on above sixty thousand dollars, or after any of it has been paid, either by notes or by disposing some of the real estate, on the balance remaining. In witness whereof, we have put, this first day of April, 1871, our hands and seal.’ William S. Carr & Co. continued in possession of the real estate, and year after year collected the rent, and out of it paid the taxes and interest on the first mortgages, and paid over the balance during Henderson's lifetime to his agent, and afterwards to his executor. Henderson died in 1873, leaving a last will and testament by which his brother Matthew Henderson was appointed executor, and letters testamentary were issued to him. William S. Carr died in September, 1880, leaving a will, by which he devised and bequeathed his personal property to his wife and to his two children. In December, 1881, Matthew Henderson, as executor of Andrew Henderson, assigned and transferred to Edward C. Delavan the interests of said testator in said deed and defeasance, treating the same as a mortgage. Thereafter, in August, 1882, an action was commenced by Delavan to foreclose said instruments as a mortgage. The defendants named in that action were the widow and devisees of William S. Carr, deceased, and Theodore Susemihl, the surviving partner of Wm. S. Carr & Co., who had an interest in the equity of redemption as such surviving partner. This action went to judgment, the referee being appointed to make the sale. Such sale was had, and Edward C. Delavan became the purchaser, and received a deed from the referee. Pending that action the deed to Henderson and the defeasance were recorded among mortgages, and the defeasance was also recorded among the conveyances. The defendants in this action purchased from Edward C. Delavan, and received a deed from him.

Abner C. Thomas, for appellant.

E. J. Spink, for respondent.

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

The plaintiff contends that the title obtained by the purchaser at the foreclosure sale was defective because the heirs of Andrew Henderson were not made parties to the action. She insists that the deed from William S. Carr to Andrew Henderson was not a mortgage, but an absolute deed; that upon his death the title became vested in his heirs at law, and still remains in them, for, not having been made parties to the foreclosure, they are not affected by the judgment. The plaintiff's first proposition is that the deed, being absolute upon its face, imposed upon the defendant the burden of showing that...