Loch v. Muetz
Loch v. Muetz
Opinion of the Court
The opinion of the court was delivered by
The bill in this ease was filed to establish a resulting trust in two separate parcels of land located in the town of Wee-ha wken. The hearing resulted in the establishment of the trust. The evidence justified the vice-chancellor in finding the following facts: That the complainants father, Charles L. Gerdts, on May 5th, 1898, purchased a tract of land known in the case as the Boulevard lots, from one Samuel E. Renner, and took title thereto in the name of one Herman Muetz, the purchase money having been paid by Gerdts; that this property was conveyed to Muetz subject to a mortgage of $5,500 thereon and held by one Charles F. Ebsen; that in March, 1902, Gerdts purchased another piece of property from Renner, known in the case as the Duer place tract, and paid the purchase money for it; that the deed for this second tract was also taken in the name of Muetz; that Muetz held these two tracts, charged with a resulting trust in favor of Gerdts, although no declaration of trust was ever executed.
Further material facts, which are undisputed, and which are necessary to be considered in the determination of this appeal, are as follows: In January, 1905, Muetz executed a mortgage on the Duer place tract to one Louisa M. Heinrich-sen for $1,000, and the complainant admits that this mortgage constitutes a valid lien upon this tract. In March. 1920, Gerdts died, after an illness of many years, leaving as his heirs-at-laws the present complainant and a son, Charles, who died in 1921, leaving an infant son. In July, 1920. Muetz absconded, being at that time heavily indebted, and
On the facts above recited the vice-chancellor concluded that neither the several mortgagees nor the two judgment creditors of Muetz were in a position to object to the enforcement of the resulting trust; that the holder of the Ebsen mortgage could not extinguish that trust, so far as it affected the Boulevard tract, by a foreclosure suit; that the judgment creditors, assuming that they had an apparent lien upon the property, could not enforce it against the paramount right of the complainant, and that, consequently, they held the Boulevard tract, which they had purchased at the sheriff’s
We concur in the view expressed by the vice-chancellor in relation to the rights of the parties so far as the Duer tract is concerned, and affirm the decree to that extent. We dissent, however, from the view expressed by him with relation to' the respective rights of the complainant, of the holder of the mortgage upon the Boulevard tract, and of the purchasers of that tract under the foreclosure sale thereof. The mortgage upon that tract was a lien thereon prior to the purchase thereof by Gerdts and the making of the deed to Muetz, and, consequently, neither the original holder of the mortgage, Ebsen,' nor his legal representatives (he having died prior to the institution of the present suit) were at all affected by the subsequently created resulting trust and their right to foreclosure of the mortgage upon default could not be prejudiced thereby. It is not claimed that Ebsen or his legal representatives had any knowledge of the existence of that trust prior to or at the time of the filing of the foreclosure bill or of the entry of the final decree, and, consequently, their right to a sale of the mortgaged premises could not have been affected by reason of their failure to make the complainant a party to the foreclosure proceedings. It may be conceded that the holder of this mortgage would have been compelled to cancel it or assign it to the complainant prior to the foreclosure sale upon being paid the principal and interest due thereon; but no such payment was offered to be made. In this situation the foreclosure sale was a perfectly valid one and the title to the mortgaged premises passed to the purchaser at that sale entirely unaffected by the trust. That this would have been the case if Mr. X or Mr. Y had been the purchaser cannot be doubted. The fact that the purchaser was a judgment
We conclude, therefore, that so much of the decree as impresses a trust upon the Boulevard tract in the hands of the purchaser at the foreclosure sale must be reversed, together with such other parts of the decree as are based upon that adjudication.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.