Wall v. Kellogg's Executors

Wall v. Kellogg’s Executors. Executors who, under a power of sale, convey land of which their testatoi was in equity a mere trustee, are liable, as executors, to the person having the equitable title to such land, for the damages sustained by him to the extent of the purchase money received by them. Appeal from the Supreme Court. The referee to whom the action was referred found the following facts, viz.: The plaintiff, on the 24th day of December, 1828, purchased a parcel of land in Lysander, Onondaga county, from H. & S. W. Baldwin, and gave them a bond and mortgage for the purchase money. On the 30th of December, 1828, the Bank of Auburn recovered a judgment against the plaintiff for $1653.22. On the 5th of August, 1830, the premises were sold upon an execution issued upon a judgment of Hall A Bassett, recovered on the 26th of June, 1830, and wore bid in by them, and Hall went into possession. On the 9th of September, 1830, the premises were .sold upon an execution issued upon the judgment of the Bank of Auburn, and bid in by Daniel Kellogg, for $200, in hie own name, but for the benefit'of the b'ank; and a sheriff’s deed was afterwards executed to him, founded on such sale. In February, 1831, Hall •& Bassett entered into an arrangement with Kellogg, on behalf of the bank, by which the bank advanced money to purchase the bond and mortgage of the Baldwins; and Hall & Bassett gave their note to the bank, signed also by the plaintiff, for the amount so advanced by the bank, and also for the indebtedness of the plaintiff to the bank, including the judgment of the bank against him. The bond and mortgage were held as collateral security for the note. Kellogg, on behalf of the bank, executed to Hall & Bassett an agreement, in writing, to release to them the premises on their paying to the bank all their notes and responsibilities due to the bank from them. In 1832, Hall & Bassett delivered up possession of the premises to Kellogg, under a parol arrangement between them and the plaintiff, by which the latter was to assume the indebtedness to the bank, or the position of Hall & Bassett in regard to the property in all respects. Hall & Bassett surrendered and canceled their agreement with Kellogg, and the plaintiff went into possession, and has remained in possession of the premises ever since, except of one hundred acres, which was sold to one Morehouse. The plaintiff made payments from time to time on the note of Hall & Bassett, and finally paid it up some time in the year 1838. Kellogg died in 1836, having made a will, and given therein to his executors power to sell his real estate. The defendants, as such execu tors, on the 30th of June, 1838, sold the premises in ques tion to John C. Beach for $10,000, and conveyed the same to him by warranty deed, acknowledging therein the receipt of the purchase money. Beach, on the 1st of January, 1839, gave a mortgage on the premises for $3000; and afterwards, in 1850, the premises were sold under such mortgage for $3546, the amount due on the same, including costs, and were purchased on behalf of the plaintiff, who paid the.bid for the same. The referee reported in favor of the plaintiff, $4150.96, being the sum of $3546 paid by the plaintiff on the mortgage sale, with interest. The judgment entered upon his report was, on appeal, affirmed by the Supreme Court, at general term in the fifth district, and the defendants appealed to this court. C. B. Sedgwick, for the appellants. Leroy Morgan, for the respondent. [MAJORITY — Paige, J.] Paige, J. The referee found, as conclusions of law, that the interest of the Bank of Auburn in the premises was in the nature of a mortgage interest; and that the plaintiff, upon his payment of the amount due upon the-Hall & Bassett note, was entitled to a conveyance of the premises; and that Kellogg had no equitable interest therein, but held the same as "a naked trustee for the plaintiff and the Bank of Auburn; and that the executors wrongfully conveyed the premises to Beach; and that the estate of Kellogg having had the benefit of the consideration money received on the sale, it was equitably chargeable with the amount which the plaintiff paid on his purchase under the Beach mortgage, with interest. I think that these conclusions of law were correctly deduced by the referee from the facts found by him. The referee found as a fact a parol agreement between the plaintiff and Kellogg, as trustee for the Bank of Auburn, and Hall & Bassett, to the effect that Hall & Bassett should surrender to Kellogg the premises and their contract for their purchase, and that the plaintiff should assume the indebtedness of Hall & Bassett to the bank, and occupy in all respects the position of Hall & Bassett in regard to the property; by which I understand the referee to find that the parties agreed that the plaintiff should be substituted in the place of Hall & Bassett, as purchasers from Kellogg of the premises, upon precisely the same terms as had been agreed upon between Hall & Bassett and Kellogg; and that therefore the referee must be deemed to have found that the plaintiff agreed with Kellogg to pay to the bank the note which Hall & Bassett had given to it for the consideration of the premises, and that Kellogg agreed, on the plaintiff’s payment of such indebtedness, to convey the premises to him. Under and in pursuance of this agreement, the plaintiff entered into possession of the premises, and has continued in possession of the same, under the agreement, ever since, except of one hundred acres thereof, which was sold to Morehouse in March, 1840. The plaintiff also, under and in pursuance of this agreement, made, from time to time, payments upon the note of Hall & Bassett, and in 1838 paid up the same in full to the Bank of Auburn. Here, then, is a case of a parol contract for the purchase of land, and a possession of the plaintiff under the contract, and a full performance thereof on his part to take it out of the statute of frauds, and to entitle him in equity to a conveyance from the executors or heirs-at-law of Daniel Kellogg. (3 Barb. Ch. R., 413.) But as the executors, prior to the filing of the complaint, sold and conveyed the premises to Beach, without notice on the part of the latter of the rights of the plaintiff, and thus deprived themselves of the power of performing the contract specifically on their part, they are, in equity, liable to pay to the plaintiff the damages he has sustained by means of their breach of the contract in conveying the premises to Beach. The amount of the damages thus sustained by the plaintiff is the sum paid by him on ‘his purchase at the sale under the mortgage of the Bank of Syracuse, to protect his interest in the premises. The executors of Kellogg sold to Beach under the power of sale given in the will of Kellogg. In the conveyance they acknowledge the receipt of the purchase money, which is prima facie evidence of its receipt by them as such executors. The estate having received the benefit of the purchase money paid by Beach, it is equitably chargeable with tho sum paid by the plaintiff to protect his interest in the premises. ( Story's Eq.Jur., § 796; 1 Cow., 711.) Kellogg had no beneficial interest in the premises; he was a naked trustee for the plaintiff and the Bank of Auburn. By virtue of the parol agreement for the purchase of the premises, and its performance on the part of the plaintiff, and his continued possession under the agreement, he became the equitable owner of the land; and Kellogg and his heirs became trustees for his benefit. (Story’s Eq. Jur., §790.) I place no reliance, in arriving at this conclusion, upon the written agreement between Kellogg and Wall, found among the papers of the former, as the referee does not find that this agreement was ever delivered to the plaintiff. In my opinion, the judgment of the Supreme Court should be affirmed. Bbown, J., delivered an opinion to the same effect. Comstock and Shankland, Js., were absent; all the other judges concurring, Judgment affirmed.