Willis v. Fairchild

Headnote

Adjudication—effect on question of ownership of claim sued on — how avoided.—Foreclosure sale — setting aside of.—Demurrer — questions raised by.

A judgment in plaintiff’s favor is, as between the parties, conclusive as to the plaintiff’s ownership of the claim or instrument recovered on. Thus if one as executor, brings an action to foreclose a mortgage given to his testator, a judgment in his favor is conclusive between the parties, of his title to and ownership of the mortgage as such executor.

Such effect cannot be avoided, in an independent action on the bare ground that plaintiff did not hold as executor, but as trustee. Consequently an action in equity, founded on such ground, to have such judgment declared void, and in the mortgage case above put, for leave to redeem, cannot be sustained.

Allegations that although certain persons held and owned the mortgage as trustees under a will, yet they, as executors of that will were the plaintiffs in the foreclosure action ; that although the premises were struck off to the plaintiffs in the action, yet the deed without any transfer of the bid, was made to the individuals composing the plaintiffs as trustees; that the plaintiffs entered a judgment of deficiency which they still held; that the trustees claim to hold the property absolutely as owners ; that at the sale the premises were bid off for less than half their value; that there was no competition; and that the time for the sale was thoroughly inopportune—are insufficient to justify a court of equity in setting aside such foreclosure sale, although urged in behalf of the owner of the

equity who was also the mortgagor against whom the deficiency judgment was entered.

A demurrer to the complaint, on the ground that it does not state facts sufficient to constitute a cause of action, only raises the question whether or not plaintiff is, under the allegations of the complaint, entitled to the judgment demanded ; not whether those allegations entitle him to some other relief.

Appeal from judgment dismissing the complaint, entered on demurrer.

The complaint was as follows :

“I. That on the 26th day of September, 1876, said plaintiff, being the owner in fee of all that certain lot, etc.' . . . executed and delivered to the said Horace J. Fairchild and Alvah Miller, Junior, as executors of the last will and testament of Nathaniel F. Miller, deceased, a purchase money mortgage, to secure the payment of a part of the consideration expressed in a deed from them to this plaintiff ... of the premises hereinbefore described. H. That on or about the 2d day of July, A. D. 1877, the said Horace J. Fairchild and Alvah Miller, Junior, as executors of the last will and testament of Nathaniel F. Miller, deceased, assigned, transferred and set over said mortgage unto Alvah Miller, Junior, and Horace J. Fairchild, as trustees under the last will and testament of Nathaniel F. Miller, deceased, by an instrument under seal, and subscribed and acknowledged by them in due form of law. III. That subsequently, to wit, on the 19th day of March, 1878, the said Horace J. Fairchild and Alvah Miller, Junior, as executors of the last will and testament of Nathaniel F. Miller, deceased, commenced an action to foreclose said mortgage, and such proceedings were had, that in form a decree of f orclosure and sale was had, and the premises hereinbefore described struck off to the plaintiffs in said foreclosure action, although the deed, without any transfer of bid, was made out in the names of and delivered to Horace J. Fair-

child and Alvah Miller, Junior, as trustees, as aforesaid. IV. That subsequently, to wit, on or about the 10th day of October, 1878, the plaintiffs in said f oréelos are proceeding, although they had long before ceased to be the owners of said mortgage and the bond accompanying the same, and at the date of said sale, had no interest therein, procured to he entered against this plaintiff a judgment, for deficiency in the sum of eleven thousand six hundred and seventy-four dollars and forty-eight cents, which said judgment is a wrongful claim against this plaintiff, a lien upon his real estate, and the cause of annoyance and embarrassment to him. V. That at the pretended sale of the said premises, the same were bid off at a sum for less than one-half their value; that there was no competition, and that the time for a sale was thoroughly inopportune, so that even were the sale valid, it still would be grossly unfair. VI. That since the defendants received the deed of said property in manner and under the circumstances as aforesaid, they have insisted that the title thereto vested in them absolutely ; that all plaintiff’s rights are extinguished and that said deficiency judgment against him is in full force ; that said defendants have treated said property as their own, have paid taxes and assessments thereon, and have appeared in legal proceedings wherein the title to said property is involved, claiming the same as owners. VII. That this plaintiff is and has been ready and willing to pay the said mortgage, and the interest which has •lawfully accrued thereon, also to repay to the said defendants all moneys advanced by them for taxes and assessments upon said premises, upon receiving the cancellation and satisfaction of said mortgage, but that the said defendants refused to permit plaintiff so to do, although frequently requested so to do, and this plaintiff now hereby makes such tender to said defendants.

“Wherefore, this plaintiff demands judgment adjudging and decreeing the said forclosure proceedings void ; directing the defendants Horace J. Fairchild and Alvah Miller, Junior, as trustees, as aforesaid, to convey the said de

scribed property to this plaintiff by a sufficient deed thereof, containing a covenant against grantors ; that the clerk of the city and county of New York cancel said judgment for a deficiency against this plaintiff upon the record in his office, and that this plaintiff have leave to redeem the said mortgaged premises upon payment to the owner of said mortgage whatever gum may be found due thereon, and that this plaintiff have such other and further relief as by reason of the premises he may in equity and good conscience be entitled to.”

The complaint ivas demurred to on the ground that it did not state facts sufficient to constitute a cause of action. The demurrer was sustained, the judge at special term holding “The complaint fails to set forth a sufficient equity.”

argued :—I. Even if a former recovery appears, it would not defeat the cause of action, because a proferí only of the record, would show what had been or might have been adjudicated. The complaint alleges the parties are different. The defendant, to avail himself of the plea, should set it up in an answer, and then the plaintiff could, if in his power, put in evidence to rebut the plea. It is essential, in order to present the question of res adjudícala, that the identity of the causes of action in the different suits should, in some form, be averred in the answer (3 Chitty Pl. 928-9; Phillips v. Benck, 16 Johns. 137 ; Secor v. Sturges, 16 N. Y. 548 ). Questions respecting the character and effect of a judgment can be determined only by reference to its contents ; had it been offered at a trial it might be explained or modified, or its character made plain by parol testimony. In Phillips v. Benck (supra), it was held that a record is prima facie evidence only, and the plaintiff may repel it (Snyder v. Croy, 2 Johns. 229 ; Sedden v. Tutop, 6 Term R. 607). Evidence that establishes a fact, prima facie, may be overthrown by proof that the pre

sumption which the law raises is not consistent with the truth.

II. An executor and trustee have duties that are essentially distinctive and are subject to liabilities wholly different. This difference exists between executors and trustees, although they are the same persons, vested, it may be, with both functions, in regard to the same estate, and even at the same time (Redfield Surrogates, 220, 424, and cases there cited ; Craig v. Craig, 3 Barb. Ch. 76 ; Matter Wordsworth, 2 Ib. 381; Quackenbush v. Southwick, 41 N. Y. 117 ; Wood v. Brown, 34 Ib. 337 ; Ridgly v. Johnson, 527; Layton v. Davidson, 95 Ib. 263).

III. It follows from the foregoing authorities that the trustees above named had power to foreclose ; that the duties of the executors, by direction or provision of the will, were extinguished, and therefore the judgment of foreclosure and all proceedings thereunder, are void ; that the plaintiff’s relation to the mortgage is just the same, and his right to redeem just as absolute as though no foreclosure had ever been attempted, a. A judgment to be valid ought to be given between persons capable of being parties in a judicial proceeding, otherwise judgments founded thereon are void (Pothier on Obligations, vol. 1, 579). b. A judgment is null, obtained by a party who has sued on behalf of another, without being entitled so to do (Pothier, vol. 1, 580, 581). Certainly, in the case at bar, the persons holding the mortgage as trustees, after their powers as executors had ceased, and their office as such had been extinguished, had no power to bring an action as executors to foreclose it. It is a rule of both the civil and the common law, that a party acting in a certain right can be neither benefited nor injured by a judgment for or against him, when acting in some other right (Freeman Judgm. § 156, and cases there cited, also notes). Again, a verdict against a person suing in one capacity will not estop him when he sues in another distinct capacity, and in fact is a different person in law (Robinson’s Case, 5 Rep. 32; Dutchess of Kingston, 2 Smith’s L. C. 589 ;

Comyn’s Dig. Estoppel C. ; Rathbone v. Homey, 58 N. Y. 463 ; Jackson v. Mills, 13 John. 463 ; Sinclair v. Jackson, 8 Cow. 565 ). Again, no one can take any benefit under a verdict who would not have been prejudiced by it, had it gone the other way. Parties must be mutually bound (Freeman Judgm. § 159). The following cases illustrate the view just taken : Eshelman v. Sherman, 13 Pa. St. 561 ; 1 Pothier, 581. It should be observed by the court, that the complaint alleges directly the executors, plaintiffs in foreclosure, were not owners of the mortgage at the time they brought the foreclosure suit. Nothing in the complaint indicates what the terms of the will are, what its conditions are, who the cestui qui trusts of the executors are, or who the cestui qui trusts of the trustees are. As executors they might act for the benefit of one party ; as trustees for the benefit of other parties. So, even supposing defendant’s points might prove well taken on trial after plaintiff’s case was all in, they certainly cannot be held good on demurrer upon bare inspection of complaint.

IV. The defendant's proposition is predicated wholly upon the class of cases of which Ducker v. Rapp ( 67 N. Y. 464 ), is a type. That case is wholly unlike the one at bar, and in no wise helps the defendant’s demurrer. It simply holds that a stipulation made in certain other cases, brought by the plaintiffs as executors instead of trustees, which resulted to the advantage of the rightful cestui qui trusts, could be enforced despite the plea of the trustees, that they brought such action in a mistaken capacity. To decide otherwise would have been to encourage turpitude •—to repudiate the maxim “that no one can take advantage of his own wrong.”

I. A judgment duly rendered is conclusive upon the parties, not only as to the matters act-. ually adjudicated, but as to all matters wdiich might have been adjudicated therein, or which it was necessary to decide, and of every fact essential to the adjudication.

(Le Guen v. Gouverneur, and cases cited in note [a] 1 Johns. Cas. 492 ; Hayes v. Reese, 34 Barb. 156 ; Embury v. Connor, 3 N. Y. 522 ; Tuska v. O’Brien, 68 Ib. 448, 449, and cases cited; Glacius v. Fogel, 88 Ib. 441, and cases cited). If the plaintiff herein did not set up the alleged defect of parties in the foreclosure suit, he had an opportunity to do so ; and must now be held to the legal effect of the judgment therein rendered (Code, § 488-498, 499, 522).

II. It sufficiently appears upon the face of the complaint herein, that these defendants were both executors of, and trustees under, Miller’s will. Under the alleged assignment of the mortgage there was, and could have been, no actual change of possession. The same individuals were invested with different official functions ; but whether they named themselves executors or trustees, the object to be attained was the same, and the result of their action was the same. All the parties interested in the subject matter were before the court in the foreclosure suit; the court had jurisdiction ; its judgment directing the sale of the mortgaged property and payment of the mortgage debt by the person who justly owed it cannot now be impeached or called in question (Gerwig v. Sitterly, 56 N. Y. 217 ; Ducker v. Rapp, 67 N. Y. 470 ).

III. The allegations of fifth and seventh paragraphs of the complaint do not constitute or tend to constitute a cause of action (Tuthill v. Morris, 81 N. Y. 100 , Code, § 732).