Roediger v. Gleason , 96 N.Y. Sup. Ct. 254 ( 1895 )

Dykman, J.:

This is an appeal from a judgment and order entered upon a decision of a justice of this court after a trial at the Special Term.

The judgment and order should be affirmed, with costs, upon the opinion of the trial judge.

Brown, P. J., and Pratt, J., concurred.

Judgment affirmed, with costs.

The opinion of the trial judge will be found at page 257.

George W. Stephens, for the appellants. H. Rcmdoljph Anderson, for the respondent.

Dykman, J.:

This is an appeal from a judgment and an order entered upon a decision of a justice of this court after a tidal at the Special Term.

The action is brought to set aside a deed of conveyance of real property.

The action received the proper disposition at the Special Term, and the judgment should be affirmed, with costs, upon the opinion of the trial judge.

Brown, P. J., and Pratt, J., concurred.

Judgment affirmed, with costs.

The opinion of the trial judge was as follows:

Babtlett, J.:

The formal decision filed herewith, under section 1022 of the Code, as amended last year, contains a sufficient statement of the facts.

The evidence leaves no doubt whatever in my mind of the correctness of the conclusion that the defendant Gleason was really the purchaser of the city hall property in Long Island .City, which he held at the time as receiver in the partition suit. The proof seems to me equally plain that the considerations paid to each of these plaintiffs was utterly inadequate. If there were no other evidence as to the value of the property, the fact that $1,000 was paid to the widow for lier right of dowor, is enough to indicate that the purchaser was obtaining the fee at far less than it was really worth, when he paid the heirs at the rate of less than $100 for their combined interest.

It is manifest that the receiver occupied a position which prohibited him from buying the property for himself from those who did not know he was the purchaser.

The rule which he violated is clearly stated by Chancellor Walworth, in the case of Van Epps v. Van Epps (9 Paige, 237), where he says: “.The rule of equity which prohibits purchases by parties placed in a situation of trust or confidence with reference to the subject of purchase, is not * * * confined to trustees or others who hold the legal title to the property to be sold, nor is it confined to a particular class of persons, such as guardians, trustees or solicitors. But it is a rule which applies universally to all who come within its principle, which principle is that no party can be permitted to purchase an interest in property and hold it for his own benefit where he has a duty to perform in relation to such .property which is inconsistent with the character of a purchaser on his own account and for his individual use.”

Now, there was a plain conflict here between the interest of Mr. Gleason as an intending purchaser of this property from the heirs and his duties as a receiver of the property in the partition suit. As receiver he was bound to get as much rent as possible. As an intending purchaser it was to his interest to have the receipts for rent fall off so that the apparent value of the property might decrease and the owners be induced to sell for a loAver price. As receiver he was bound to manage the property as a whole in such a way as to maintain and, if possible, to increase its value, real and apparent. As an intending purchaser it was to his interest to manage it in such a way as to decrease its apparent value until it joassed into his own hands. The equitable principle to which I have referred clearly applies to a person situated as he was, and under such circumstances, the vendors who have sold their interests for far less than the property was actually worth, are at liberty to avoid the sale upon repaying to the purchaser the amounts which they have received from him. In the brief for the defendants it is argued that the form of the complaint is such that no relief can be granted in the absence of a finding of actual fraud on the ground that Mr. Gleason was disqualified to purchase by reason of his position as receiver. I think, however, that the allegations of the complaint in each case are quite sufficient to sustain the judgment in favor of the plaintiff upon the grounds stated in the formal decision. Each complaint expressly alleges the appointment of Mr. Gleason as receiver.

There should be judgment for the plaintiffs setting aside the deeds conveying the respective interests to the defendant Bi'assel upon the payment by them to the defendant Gleason of the amounts which they respectively received. Plaintiffs must also have costs.