Hetzel v. Easterly

96 A.D. 517, 89 N.Y.S. 154
Appellate Division of the Supreme Court of the State of New York·Decided July 15, 1904·Published·Cited by 3 cases

Opinion

Hiscock, J.:

The controversies presented to us upon these appeals arise in a general way out of and in connection with the settlement and disposition of the estate of one John M. Easterly, deceased.

This action was brought to foreclose a mortgage given by said Easterly and* his wife, the defendant Eliza H. Easterly,- upon, real estate situate in the city of Auburn, to one Joseph Hadden, to secure a bond conditioned for the payment of $2,500, and which bond and mortgage are claimed by the plaintiff to have been assigned to him. The same parties executed another mortgage upon the same or neighboring lands to the same mortgagee to secure a bond conditioned for the payment of the sum of $2,000, and which instruments plaintiff also claims were assigned to him, and for the foreclosure of which mortgage a second action was brought. The issues involved in this action in their general nature included and covered those involved in the second action, and the two were tried and upon this appeal have been argued together.

In stating the reasons which lead us to the conclusion that the judgment herein appealed from should be affirmed, our discussion will naturally and most conveniently treat together the facts and issues of both actions.

The mortgage for $2,500 was executed August 8, 1881, and the one for $2,000 April 13, 1882. The mortgagor, John M. Easterly, who owned the real estate and who was the obligor upon the bonds, died in 1895. He left a last will and testament, which was promptly thereafter admitted to probate, and by which he provided, amongst other things, that his widow, Eliza H. Easterly, should have the benefit during life of certain property, including the real éstate in question, and that upon her death the same should pass in remainder to, amongst others, certain nephews and nieces who are defendants and respondents here. Said will also expressly and specifically gave to his executors the proceeds of a certain policy of insurance for $5,000, and the proceeds of two distinct pieces of land to be sold, in trust and as a fund to be used in paying off and relieving his real estate from certain liens, which concededly included the mortgages of which foreclosure- is now being sought. He appointed as executors his wife, the defendant Lamoree, who is her brother-in law, and one Reed, who thereafter accounted and was discharged. '

[521]*521Not long after testator’s death, for some reason which is not at all clear, the mortgagee Hadden is said to have insisted upon payment of his mortgages, and to have threatened foreclosure in case the same was not made. Thereupon the executors, out of the funds in their hands expressly dedicated to that purpose, paid to Hadden the amount due upon his two mortgages, but instead of treating such transaction as a payment and satisfaction of them, they went through the form of taking an assignment thereof to themselves, and now swear to their mental operations, which intended a preservation of said mortgages and liens. Thereafter said executors, as a second transaction, went through the foira of assigning said bonds and mortgages to the plaintiff, who was a brother of the defendant widow. The $2,500 bond and mortgage were concededly transferred in part payment of a note for $3,000, alleged to have been given by the testator some time before his death to his wife, and by her to have been transferred to plaintiff. The $2,000 bond and mortgage were in form sold and assigned to plaintiff as a means of raising money to enable the executors to pay to Mrs. Easterly a note amounting to upwards of $800 held against her husband’s estate, and also to pay off a certain bond and mortgage for $1,500 upon land of which her husband had made to her a gift during his life.

Various defenses are urged to the enforcement of these mortgages. It is claimed that by the transaction between the executors and the original mortgagee, Hadden, the same were absolutely paid and discharged, and could not thereafter be enforced or assigned by the executors. In the case of the $2,500 mortgage it is further insisted that the $3,000 note, in alleged payment of which it was transferred to plaintiff, was not a valid obligation in the hands of the widow against her husband’s estate, and that no valuable consideration was received by her upon its transfer to plaintiff. In the case of the $2,000 mortgage it is claimed by defendants that the executors received no valuable consideration upon the transfer thereof to plaintiff; also that the $1,500 mortgage, which they desired to pay with' proceeds derived from its sale, is primarily payable out of the land upon which it is a lien, and should not be paid by the executors out of the other estate of the testator. And, finally and generally, it is urged that the widow, her coexecutor and brother-in-law, Lamoree, and her brother, the plaintiff, entered into a general con[522]*522spiracy to procure a transfer of the mortgages in suit to the last person who should utilize them for the two-fold purpose of procuring payment for the benefit of. the widow of the $3,000 note and the $1,500 mortgage referred to, and which were not valid claims, and also of procuring the absorption by or for the benefit of said widow as against the remaindermen of the land covered by said two mortgages, which was worth much more than the amount thereof.

We shall. diScuss the defenses thus urged and upon which the learned trial justice, after the manifest application of very careful consideration, has found in favor of the defendants urging them.

We feel clear that the transaction between the executors ánd Hadden resulted in such a payment, satisfaction and discharge of the mortgages that the same were not. thereafter valid liens enforcible either by the executors or by their assignee, the plaintiff. No doubt is anywhere raised that the mortgages in Hadden’s hands were valid and enforcible liens or that the real estate covered thereby was worth much more than the amount due thereon. Under such circumstances upon general principles it became the duty of the executors when foreclosure was threatened to preserve the estate from waste and destruction by paying off and discharging such liens. In addition to the duty thus generally imposed upon them, the will of their testator had' expressly and specifically placed this obligation upon them and had put in their hands a fund more than sufficient to discharge said and any other liens upon his real estate. Nobody disputes that it was their duty to take the money in their hands and pay to the mortgagee the amount due upon his mortgages. The only question arises over the attempt of the executors upon so doing to take an assignment of and preserve the liens of said mortgages.

In discussing the question thus presented, it is' to be borne in ■ mind that the bonds were the direct personal obligations of their testator and the mortgages were liens, upon his real estate. His estate was directly and primarily liable for their payment. There was no element, in favor of his estate or the executors representing it, of a suretyship or secondary liability for some third party who was primarily liable. The executors were required by the authority which created them to pay this indebtedness and were provided out of the estate with funds with which to pay and discharge it. Under [523]*523such circtimstances, it seems to us to be plain and elementary that those who paid the mortgages were the ones bound so to do, and that their act could not operate otherwise than as a payment and discharge of the liens no matter how much, with mental intentions and formal instruments of assignment, they labored to make it otherwise.

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Hetzel v. Easterly, 96 A.D. 517, 89 N.Y.S. 154 (N.Y. Ct. App. 1904).

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