Shreve v. Shreve

• Decision Date: 01 July 1910
• Docket Number: 154
• Citation: 229 Pa. 200,78 A. 79
• Parties: Newman v. Shreve, Appellant
• Court: Pennsylvania Supreme Court

78 A. 79

229 Pa. 200

Newman v. Shreve, Appellant

No. 154

Supreme Court of Pennsylvania

July 1, 1910

Argued May 18, 1910

Appeal, No. 154, Jan. T., 1910, by Benjamin D. Shreve, from decree of C.P. Chester Co., in Equity, No. 513, sustaining bill against Benjamin D. Shreve in case of John S. Newman Executor and Trustee of William Keinath, deceased, v Benjamin D. Shreve, Isaac A. Braddock, Joseph Taylor, St Albans Realty Company, and the Sea Haven Company. Reversed.

Bill for an accounting, etc. Before BUTLER, J.

The findings of fact of the lower court were as follows:

On August 2, 1881, Edward P. Carpenter executed and delivered to Henry W. Town a bond and mortgage to secure the payment of $3,000 with interest, within two years, which mortgage covered a tract of land on the ocean, situate in Little Egg Harbor township, Burlington county (now the township of Long Beach, county of Ocean), in the state of New Jersey. This mortgage was duly recorded. Default having been made in payment, foreclosure proceedings were instituted, a decree was made and an execution was directed to issue, when on June 17, 1889, the bond, mortgage, decree and execution process were assigned to Wm. Keinath, the plaintiff decedent. This mortgage was a first lien on the premises it described, and in a subsequent foreclosure proceeding on a second mortgage covering the same, and additional premises, it was duly determined that $5,188.58, with interest from September 12, 1894, were owing on this first mortgage.

Subsequent to the execution of the first mortgage, before recited, title to the land bound by it, and other contiguous territory, became vested in the Sea Haven Improvement Company, a New Jersey corporation, and this company executed to Benj. D. Shreve, one of the defendants, and Cyrus Borgner, as trustee, a mortgage upon said lands to secure an issue of bonds of $100 each, aggregating $20,000. Of these bonds Wm. Keinath was the owner and holder of fourteen, and Isaac A. Braddock, another defendant, was the owner and holder of twenty-six which on January 3, 1891, he assigned and delivered to J.E. Roberts as collateral security for money loaned. We find that the legal title to those bonds has remained in Braddock, that he owns them subject only to their pledge to Roberts as collateral for his claim against Braddock. Braddock intimates that on a settlement it might be found that he is no longer indebted to Roberts, and might by suit obtain the bonds.

In so far as we can discover from the evidence, the second mortgage covered the southern portion of Long Beach, a tract about four miles in length, containing, roughly speaking, from 800 to 900 acres, and the first mortgage was confined to about one-half of this tract.

Default having been made in payments due on bonds secured by the second mortgage, foreclosure proceedings were instituted on behalf of bondholders, a decree of sale was entered and David J. Pancoast, special master in chancery, was authorized to make sale of the mortgaged premises.

Subsequent to the execution of the mortgage referred to, the second mortgage, two judgments aggregating about $3,700, were recovered against the Sea Haven Improvement Company and by their owner, Levis, were later on assigned to Isaac A. Braddock.

On May 16, 1895, Wm. Keinath, the holder and owner of the first mortgage lien, together with holders of eighty-five bonds secured by the second mortgage lien, entered into an agreement with Benj. D. Shreve, authorizing him to purchase the lands at the foreclosure sale.

This agreement was executed by Keinath as the owner of the first mortgage lien and of fourteen bonds secured by the second mortgage, and was executed by Isaac A. Braddock as the owner of twenty-six bonds.

The agreement provided that in the event of Shreve acquiring title as contemplated, he should sell the same for such sum as he might deem it for the best interest of the parties, deduct from the purchase money the costs and expenses of the trust, including commissions, the costs and expenses of the foreclosure, pay the Wm. Keinath first mortgage, with interest to date of settlement, and the balance, if any, to the holders of the bonds, pro rata.

In due course, in the manner contemplated, and subject to the agreement just recited, Shreve on August 1, 1895, was invested with title to all the lands in which Keinath was interested as holder of the first mortgage, and in which Shreve and Borgner, as trustees, were interested under the second mortgage. Whether the Levis judgments covered some accretions at the southern end of Long Branch, not included in the land described in the second mortgage as is claimed by the defendants to be a fact, and denied by the plaintiff, we cannot with certainty decide.

The description in the second mortgage is by courses and distances, and no call for the water appears. If, however, the property as described, in fact reached the water, left no intervening land, the accretions belonged to the title covered by the mortgage, though there is no express call for the water. Whether where the accretions in question are located, the mortgage title as a fact reached the water, was not shown.

However this may be, we have no hesitation in stating that to us the evidence is very convincing that no one had a thought that these judgments were a lien on anything outside of the mortgaged property, had any substantial value. Apparently Levis owned them when the agreement was made under which Shreve was to take title and protect all interests. No claim for consideration on account of these judgments was then made. Whether Braddock gave anything substantial for them does not appear, but certain it is, in so far as the evidence discloses, he never made any claim to anyone that the judgments were substantially valuable, that they covered land outside of the mortgage, and were desirable as a means of securing title thereto, until at the hearing of this case he ascribed such virtue to these judgments as a justification for having diverted to himself more than half of the consideration named in a contract of sale of the title held by Shreve. Shreve certainly never understood that there was any pretense on Braddock's part that through his judgments he controlled valuable, independent territory, shutting Shreve's title off from the water. Shreve was constantly in communication with Braddock relative to the seashore property, had full opportunity to know what his interests were there, and according to his testimony, the only property or interests that Braddock had, or spoke of having, were so-called hotel property and lots, wholly apart of any of the real estate here involved. After Shreve acquired title pursuant to the agreement referred to, he made earnest and continuous efforts to sell the property, urging Braddock and others to assist him. He incurred expenses in endeavoring to make sale, paid taxes, etc., and no revenues arose from the property. Braddock viewed himself as an agent of Shreve to make sale of the property, he so testified: "I considered myself his agent to sell his interests in the property. I have a number of letters to that effect."

"Q. Had Mr. Shreve authorized you at any time to sell his property as his agent? A. Oh, a number of times, yes; over ten years he had authorized me to sell it. Q. Did you tell him you sold it as his agent? A. No, I think not. Q. And for $33,000? A. I was buying the property then, the moment he signed that agreement he sold it to me, I was no longer his agent. I was acting for myself." Having recently received a letter from Shreve, under date April 24, 1906 authorizing him to make a sale upon specified terms, and to secure the execution of an agreement, late in April of 1906, Braddock came in contact with Joseph Taylor, one of the defendants, and representing himself as Shreve's agent sought to have him purchase. Braddock, Taylor, and his counsel, Darnell, visited the property, looked it over, and on April 30, 1906, met at Darnell's office, the contract of sale was written, was executed by Braddock as agent from Shreve, by Taylor as purchaser and was also signed by Braddock individually, he having stipulated in the contract, that he would remove or assign any judgment or incumbrance he might have against the property. As already stated, we are unable to determine positively whether Braddock's judgments had any value, but we are clear that his conduct was wholly inconsistent with their possessing substantial value, with their being liens on property outside of that held by Shreve; and we are satisfied that there was no thought on anyone's part that through these judgments Taylor was to acquire any land. Braddock does not claim that either when viewing the property or later when the agreement was made, he suggested anything of this kind; he, as agent for Shreve, is the only party vendor named, Shreve's title as derived from the special master in chancery, is the only thing sold, and the $33,000 purchase money is an entire, indivisible consideration for that title. Even if the judgments had value, they figured in the agreement simply because Darnell viewed them as a cloud on the property Shreve was selling, and Braddock was willing to give them up in order to effectuate the sale of the Shreve title. Braddock was vitally interested in the sale being consummated, not only on account of commissions which he could well have demanded, but also as the owner of bonds secured by the second mortgage, and of certain lots, etc., that might become marketable through the sale of the Shreve land. In no aspect of the case could Braddock be viewed as entitled to any part of the $33,000 consideration on account of his judgments; if possible, his claim to part of the $33,000 is made more preposterous by...