Crawford v. Dox

(dissenting):

I dissent from so much of the conclusions of my brethren, as affirms the judgment as to defendant Folger. He bought for $2,000 what was in fact worth $3,000. This is such an inadequacy of consideration, as will permit the plaintiff, one of the cestui que trust, to come in and redeem, on payment of what was paid or advanced thereon. In no other way can he be protected against the negligence of the trustee in not finding out what the stock was worth. The defendant should not, certainly, without consideration, receive the fruits of such negligence. If he is made whole, that is all equity will give him. He has paid only part of the value, and is entitled to protection only so far. (Peabody v. Fenton, 3 Barb. Ch., 462; Stalker v. McDonald, 6 Hill, 96; Pickett v. Barron, 29 Barb., 508.)

Ordered in accordance with opinion of Smith, P. J.

The two bills of sale executed by Mrs. Crawford to the plaintiff and his brother, on the 27th of September, 1847, should be construed together. They were executed at the same time for the same general object, to give to her sons her personal property, to take effect in possession at her decease. They are deeds of gift, and I think clearly valid, as such, to vest in the plaintiff and his brother an equitable interest in, or title to the personal property of Mrs. Crawford, whatever it might be, which remained to her at the time of her death, subject to the reservation to her of the use of the same during her life. (Harris v. Clark, 3 N. Y., 111; Fulton v. Fulton, 48 Barb., 582.)

At the time of the execution of said papers, she had nothing more than an equitable interest in such personal property. The title to it was in her brother, as administrator of her father’s estate, and it so remained until the decease of her mother; she then took and became possessed of the legal title to -172 shares of the stock of the Commercial Bank of Albany, by the proper transfer of the same to her upon the books of the bank; and she then received the usual certificate of stock issued by the bank, as evidence of her title to such stock. When she, through her agent, proposed to sell said stock to Mr. Folger, it appeared that the same was standing in her name upon the transfer books of the bank, and that she had also the usual and every proper indicia of title to said stock, and was entitled to receive, and had received, the dividends thereon, from the time of its transfer to her, on the 1st day of December, 1857, the date of said certificate, till the transfer to Folger, of 100 shares, on the 4th of September, 1863, and of twenty-two shares, on the twenty-ninth of the same month; and was thus invested in her own name and apparent right with the absolute legal title to said stock.

*511The purchase of said stock of her by Folger, at the time aforesaid, at par, upon and with the payment therefor, was a purchase in good faith, and gave him the absolute legal title thereto. If it were not so, there could be no safety in the purchase of bank stock. If the purchase from the apparent owner, having all the indicia of title thereto, and in receipt of the dividends thereon, could be affected by any latent or dormant equity between the vendor and any other third party, it would be difficult for a man to purchase such property and be sure that he was getting to it a valid title. Folger has, certainly, an equity equal .to that of the plaintiff, and he has a valid, legal title. This in equity gives him the superior right, and he cannot be divested of such title. (1 Story’s Jurisprudence, § 64, c.; Moore v. The Metropolitan National Bank, 55 N. Y., 41; McNeil v. The Tenth National Bank, 46 id., 325; Calais Steamboat Co. v. Fan Felt, 2 Black., 374; Grimstone v. Carter, 3 Paige, 437.)

But this principle, that a party with an equal equity, who has clothed himself with the legal title, has the superior right, does not apply to the defendant Lillie Gr. Dox; she is not a bona fide purchaser ; she is a mere grantee of the real estate, conveyed to her by the direction and request of Mrs. Ward, without consideration. The $1,800 paid for such real estate, was a mere gift to said Lillie Gr. Dox, by Mrs. Ward. Between persons having equal equities, the prior equity must prevail. Mrs. Crawford had made a valid deed of gift to the plaintiff and his brother in 1847; she retained possession for them, or in subordination to their rights, during her life, in the character of a trustee of the title, taking herself the income of the property. She could not convey the property to another who had notice of the plaintiff’s rights, so as to pass a valid title.

So far as relates to the defendants, Lillie G-. Dox and her husband, I think they are liable to account for the proceeds of the sale of the stock to Folger, so far as the same were invested in specific property, remaining in their possession at the time of the commencement of this suit, or at the time of any earlier demand therefor, or to a conveyance of such property. The house and lot conveyed to Lillie Gr. Dox stands in the place of the stock sold to Folger. This property she is bound to relinquish to the plaintiff *512and bis brother, or to pay the amount of money invested therein. This conclusion follows inevitably when we regard the' two bills of sale as deeds of gift. In such cases the title passes immediately upon the delivery of the deed to the grantee. It could not be an escrow in his hands. No delivery of the property was contemplated till the death of Mrs. Crawford. The deed gave the right to the grantees to claim and enforce the immediate possession of the property, in fact, upon the death of Mrs. Crawford. The possession was in the mean time retained by Mrs. Crawford, in accordance with the terms of the deed, as she reserved the use and income of the property during her life. Upon the delivery of the deeds, she became a trustee of the title for the donee (Parish v. Stone, 14 Pickering, 205), and could do nothing to defeat such title, except to sell the property, for a valuable consideration, to a Toonafide purchaser, without notice of the trust.

It follows from these views, that the judgment should be affirmed as against the defendant Folger, with costs, and that it should be reversed as against the other defendants, Lillie G. Dox, William H. Dox and William H. Dox, Jr.; and that a new trial be granted as against these defendants, with costs to abide the event.