Summary
In Crouse v. Frothingham (97 N.Y. 105) the court held that if the declarations of a party can, under any circumstances, be received to raise a trust or create an interest in lands in another, they must be clear and explicit.
Summary of this case from Schmitz v. SchmitzOpinion
Argued October 6, 1884
Decided October 21, 1884
R.A. Stanton for appellants. A.M. Beardsley for respondents.
The plaintiffs, as judgment and execution creditors of one Randolph, sought by this action to have certain premises now owned by Laura Frothingham charged with the payment of their debt, upon the grounds, first, that they were conveyed to her by Randolph with intent to hinder and delay them in its collection; second, that notwithstanding the conveyance the debtor had still a valuable interest in the property. The first is not sustained either by the finding of the trial judge or the evidence, but judgment has been rendered in favor of the plaintiffs upon the other ground. We think it cannot stand against the defendants' exceptions.
The trial judge found, in substance, that on the 18th of February, 1879, and prior thereto, Randolph was the owner of the real estate in question, and between that day and August 2, 1879, on the procurement of the defendant, Arthur Frothingham conveyed the premises to Laura, his wife, by deed, reciting a consideration of $2,300, which was paid by Arthur. He also finds that at the time of the execution and delivery of the deed, and as further consideration therefor, it was agreed between Randolph and Arthur that Randolph should have the use and occupation of the cellar and first floor of the new building to be thereafter erected on the premises by Arthur, for the term of three years without the payment of rent; that the fair rental value of that portion of the premises was seven hundred and fifty dollars for the three years; that no part of this sum has been paid, and the learned judge declared that the plaintiffs were entitled to a lien therefor upon the premises described in the complaint, to be enforced through sale thereof by a receiver.
We are unable to find in the record any evidence to warrant the finding upon which this conclusion rests. The testimony given by the plaintiffs, with a single exception, consists of admissions said to have been made by Randolph after the execution and delivery of the deed and in the absence of Frothingham. The learned counsel for the respondents disclaims any advantage from that class of testimony, except as against Randolph, and insists that it was not in fact received by the trial judge as against the other defendants. The only testimony to which he calls our attention, or which an examination of the case discloses in any degree bearing upon the defendant Frothingham, is that of witness S., who speaks of a conversation in, he thinks, March or April, 1879, in regard to the sale of the property, when Frothingham "said he had bought it," and exhibited to witness "a map or picture of the building he was going to place on the premises" * * *. He adds: "I asked how much he had given for them, and my recollection is, although I may be very easily mistaken, that he said $2,000, but it might have been what the deed says, and I made the remark, I would have given more, and turned to Randolph and said, `I offered you more for the property once,' and Randolph replied, `I don't remember,' and Frothingham spoke and said Randolph is to have the use for `either' several years, or two or three years, and I can't say which as it is now out of my memory." Frothingham also stated that the building he should erect would cost $8,000 or $10,000, and the finding of the court is that it was, in fact, a three-story building, erected at an expense of upwards of $5,000 in the spring of 1879, and that no part of it came from Randolph directly or indirectly.
In weighing this evidence we are not permitted to consider its flat contradiction by Frothingham and Randolph, for that conflict only raised a question for the trial court; but the witness himself states his inability to give the exact language used, or even its substance. Thus, the evidence is not only vague and uncertain, but the witness concedes that he has not the ability to deliver the admissions which he heard. If the declarations of a party can, under any circumstances, be received to raise a trust or create an interest in lands in another, they must be clear and explicit, and point out with certainty the subject-matter and the extent of the beneficial interest. We have here only indefinite expressions of an intention not carried into effect, and no words indicating the premises to be enjoyed or the time of use. There is no agreement proven. But if, as the plaintiffs contend, Frothingham came under an obligation to give the use of any portion of the premises, it was by the same assumption to be for a period exceeding one year, and, as the trial court has found, for a period of three years. In other words, it was a lease for more than one year by parol. It is plain that this is void by the statute of frauds. (2 R.S. 135, § 6.) Nor does the evidence disclose either fraud which prevented its execution, or such a contract as equity would decree performance of, yet such relief, if any, upon the facts found by the court, is that to which the plaintiff would be entitled. Such is his claim. But equity cannot, under any circumstances, compel the performance of an agreement vague in its terms and standing upon testimony, of the accuracy of which the witness is himself uncertain.
There is another difficulty in the plaintiffs' way. After execution of the deed to Mrs. Frothingham, and before the recovery of the plaintiffs' judgments, Randolph made a general assignment of his property, real and personal, to one M. for the benefit of all his creditors. If he was then entitled to a lease of any portion of the premises, or to any benefit in them, the right necessarily passed to his assignee, to be disposed of for the benefit of all creditors interested in the assignment. ( Emigrant Industrial Savings Bank v. Roche, 93 N.Y. 374.) The fact of assignment is alleged in the pleadings of each party, and is found by the trial judge. He also finds in conformity with the plaintiffs' allegation that the assignee accepted the trust, duly qualified as assignee, and entered upon the performance of his duty as such, and is still assignee, and that the debts of the assignor greatly exceeded his assets. Upon these facts I am unable to see that any right or interest remained in the debtor, or that the judgment creditor had any claim which he could enforce against any interest which the debtor might have acquired from Frothingham. ( Spring v. Short, 90 N.Y. 538.) This difficulty seems to have occurred to the pleader, for the complaint alleges that before the commencement of the action, the assignee, although informed of the facts and circumstances above referred to, declined to take any proceedings in his own behalf, and disclaimed all right and interest in any money, property or rights which might be recovered or obtained by any action for that purpose.
The assignee was made a party defendant, but does not appear to have answered. These allegations were, however, put in issue by the answer of the other defendants, and in regard to them there is no finding or evidence; whatever might otherwise be their effect, they cannot, as the evidence and proceedings stand, avail the plaintiffs in any way. Upon another trial the case may be changed, but even then a judgment like that before us could not be rendered. If such an assignee refuses in a proper case to proceed and get in the assigned property, the creditors collectively, or one in behalf of all who may come in and join, may compel the execution of the trust in equity. So he could be removed and a more efficient trustee appointed, but in either case a decree for a single debt would be erroneous. Nor is it possible for an assignee by any word or act of disclaimer, to relieve himself from the obligation to collect the estate and distribute it according to the terms of the assignment. He is bound to all the creditors, and their rights cannot be varied at his option. If otherwise, a preference might be created when the assignment was silent, and by refusing to sue or enforce a right of property, as the respondents allege was done in the case before us, an assignee could permit a favored creditor to absorb the property of the estate and gain priority over others. No doubt the creditor might also sue if the assignee improperly refused to do so. But if successful, the decree must follow the assignment, and the fruits of the recovery be distributed according to its terms. ( Bate v. Graham, 11 N.Y. 237; Everingham v. Vanderbilt, 12 Hun, 75; Dewey v. Moyer, 72 N.Y. 70; Spring v. Short, supra.)
The case of Fort Stanwix Bank v. Leggett ( 51 N.Y. 554), cited by the respondents, does not aid the plaintiffs. In that case the assignee was not a party, and no objection was made by answer or on the trial, nor did it appear that there were other creditors having an interest in the fund. Here there is an existing assignment, an acting assignee and creditors other than the plaintiffs.
As the record now stands we find nothing in it which entitles the plaintiffs to be assisted in equity. It may, however, be different upon another trial, and that it may be had, the judgment appealed from should be reversed.
Judgment reversed and new trial ordered, costs to abide the event.
All concur.
Judgment reversed.