Mead v. Chesbrough Bldg. Co.

• Decision Date: 31 January 1907
• Docket Number: 130.
• Citation: Mead v. Chesbrough Bldg. Co., 151 F. 998 (2nd Cir. 1907)
• Parties: MEAD v. CHESBROUGH BLDG. CO.
• Court: U.S. Court of Appeals — Second Circuit

151 F. 998

MEAD v. CHESBROUGH BLDG. CO.

No. 130.

United States Court of Appeals, Second Circuit.

January 31, 1907

[Copyrighted Material Omitted]

Jas. J Allen and Charles A. Decker, for plaintiff in error.

David B. Ogden, Philip S. Dean, and Walter F. Peacock, for defendant in error.

Argued before WALLACE, LACOMBE, and TOWNSEND, Circuit Judges.

WALLACE Circuit Judge.

This is an action of ejectment to recover possession of certain real estate situate in the city and county of New York, and known as Nos. 30 and 32 Moore street.Both parties claim title under States M. Mead, who died January 19, 1863; the plaintiff as devisee in remainder under his will of an undivided one-eighth part, and the defendant through mesne conveyances originating in the foreclosure of mortgages executed by States M. Mead.

The primary question in the case is whether the titles acquired under the foreclosures were void for fraud; and it is conceded by the plaintiff in error that, unless they were, he is not entitled to recover.

While the validity of the titles to the two lots depends upon a different state of facts with regard to each, certain facts are applicable to both, and are these: States M. Mead by his will devised one undivided moiety of all his real estate to his son-in-law, Amos M. Sackett, in trust for the benefit and during the life of his son, Alexander H. Mead, with remainder to such persons as should be his heirs at law at the termination of the trust.The other undivided moiety of all his real estate he devised to his son, Alexander H. Mead, in trust for the benefit and during the life of his daughter Mrs. Sackett, wife of said Amos M. Sackett, with remainder to such persons as should be her heirs at law at the termination of the trust.With respect to each of these trusts, the will conferred upon the trustee power to mortgage any part of the property 'so far as might be necessary to do so in order to provide the means of paying off any incumbrance existing thereon.'

At the date of the death of the testator, the premises in controversy were incumbered by mortgages which had been executed by him, one on No. 30, one on part of No. 32, and two on premises No. 4andNo. 5 South street, the rear part of which comprised the remaining part of No. 32.Shortly after his death all of these mortgages were foreclosed in actions brought by their respective owners.Through the sales and conveyances made pursuant to the decrees in these actions, the title to No. 30 was acquired by Alexander H. Mead, one of the trustees, the title to No. 32, by his wife, and the titles to Nos. 4 and 5 South street were acquired by Mrs. Sackett, the wife of the other trustee.At the time of these foreclosures, five of the children of Mr. Mead were infants under the age of 14 years, and four of the children of Mrs. Sackett were also infants under the age of 14 years.These infants, as well as the other remaindermen, and all other persons having any right or interest in the mortgaged premises, were parties to the foreclosure suits, and the infants appeared by guardians ad litem and submitted their rights to the protection of the court.One of these remaindermen was the present plaintiff; he being then about eight years of age.

The plaintiff became of age about 1876.The life estate of Sackett as trustee for the plaintiff's father terminated by the death of the latter in 1902.The present action was commenced in August, 1903.Before the commencement of the action, his mother had also died, and so had Sackett.About 40 years had elapsed since his father and mother had entered into possession of the premises in controversy under the titles acquired at the foreclosures.

The defendant was a purchaser from its immediate vendor for full value, and without any notice of facts affecting the validity of its title, other than those which would have been disclosed by an examination of the title in the offices of the register of deeds and of the clerk of the county of New York.

The facts particularly relating to the title of No. 30 Moore street are these: At the death of States M. Mead, there existed upon the premises a mortgage for $10,000, executed by him in 1853, and which was wholly unpaid.In June, 1863, the owner of that mortgage brought an action of foreclosure, which regularly proceeded to a decree and a sale of the mortgaged premises at public auction by a referee appointed by the decree, and at the sale the premises were struck off to Alexander H. Mead for the sum of $12,000; that being the highest sum bidden for the sale.Thereupon, and on August 18, 1863, the referee appointed by the decree to conduct the sale conveyed the premises by deed to the purchaser at the sale.Upon the same day Alexander H. Mead and his wife executed a bond secured by a mortgage on the premises to one Schermerhorn, conditioned for the payment of $10,000.In June, 1866, these premises were conveyed by Alexander H. Mead and his wife to States M. Mead by deed reciting $20,000 as the consideration thereof.Subsequently the premises were conveyed by States M. Mead and his wife to the wife of Alexander H. Mead.

The facts particularly relating to the title of No. 32 Moore street are these: At the time of the death of the testator, there was an existing mortgage on the front portion of No. 32 on which $3,000 was due and unpaid, another of $12,000 on No. 4 South street, and another of $15,000 on No. 5 South street.One Borland, the owner of the $15,000 mortgage on No. 5, commenced an action in July, 1863, to foreclose, which proceeded to a decree and to a sale thereunder by the sheriff at public auction.The sale took place September 15, 1863, and the property was bid in by Borland for $12,000; he being the highest bidder.Borland on that day assigned his purchase to Mrs. Sackett, and on that day she received the sheriff's deed for the premises.On the same day she and her husband executed to Borland a bond secured by mortgage on the front 80 feet of No. 5, conditioned for the payment of $16,000.In April, 1864, one Schermerhorn, who was then the owner of the mortgages for $3,000 on the front portion of No. 32, and for $12,000 on No. 4, commenced actions to foreclose the same, respectively.The actions proceeded to a decree in each, and to a sale thereunder, made by a referee appointed by the decree.The sale took place September 3, 1864.No. 32 was bid in by Mrs. Mead, wife of Alexander H. Mead, for $3,000, that being the highest bid upon the sale, and November 3, 1864, she received the referee's deed for the premises.No. 4 was bid in by Mrs. Sackett, wife of Amos M. Sackett, for the sum of $12,000, that being the highest bid upon the sale, and November 3, 1864, she received a deed of the premises from the referee.On the same date Mrs. Sackett and her husband executed their bond, conditioned for the payment of $15,000, secured by a mortgage to Schermerhorn on the front 80 feet of No. 4.After Mrs. Sackett had thus become the owner of Nos. 4 and 5, the front 80 feet being subject to the mortgages to Schermerhorn and Borland, and on March 14, 1865, she and her husband conveyed by a quitclaim deed for a nominal consideration the rear 20 feet of both lots to Mrs. Mead.This conveyance operated to extend the original depth of No. 32 about 40 feet.The premises thus comprised were conveyed by quitclaim deed by Mrs. Mead to her husband in 1894.

No evidence was introduced upon the trial by either party concerning the value of the mortgaged premises at the time of the foreclosure sales, or showing whether or not there was any fund or property belonging to the trust estate other than the aforementioned real estate; but each party relied upon the documentary evidence, consisting of the mortgages, the will, the foreclosure records, and the deeds, to establish the facts which have been stated.All of these documents were matters of record in the office of the clerk or of the register of deeds of the county of New York at the time when the several mesne conveyances were executed under which the title of the defendant is derived.Upon these facts, and none other which is of any importance, each party requested the trial judge to direct a verdict in its favor.This was necessarily a request that the court find the facts, and the parties are therefore concluded by the finding made by the court in favor of the defendant, unless there was no evidence whatever to support the finding.Runkle v. Burnham,153 U.S. 216, 14 Sup.Ct. 837, 38 L.Ed. 694;Beuttell v. Magone,157 U.S. 154, 15 Sup.Ct. 566, 39 L.Ed. 654.

In actions of ejectment, as the controversy concerns merely the legal title of the parties, the rules of courts of equity do not obtain, and it matters not whether the one or the other has the best equitable title.This is the law of the federal courts, even when they are sitting in states in which equitable titles are triable in ejectment.Fenn v Holme,21 How. 481, 16 L.Ed. 198;Johnson v. Christian,128 U.S. 374, 9 Sup.Ct. 87, 32 L.Ed. 412;Miller v. Courtnay,152 U.S. 172, 14 Sup.Ct. 517, 38 L.Ed. 401;Carter v. Ruddy,166 U.S. 493, 17 Sup.Ct. 640, 41 L.Ed. 1090.Consequently the plaintiff was not entitled to recover upon any theory that the conveyances pursuant to the foreclosures were invalid, merely because they were obtained through a breach of the fiduciary duties of the trustees, or merely because they may have been fraudulent in the view of a court of equity.If the conveyances were actually fraudulent-- that is, if they were procured or suffered by the trustees with the purpose of enabling themselves to profit at the expense of those, or some of those, towards whom they occupied a fiduciary relation-- they were void ab initio, and the validity of such conveyances may be determined in...