
    Joseph H. White, Appellant, v. Herman Fromme and James A. Douglas, Respondents.
    First Department,
    July 15, 1907.
    ■ Equity — suit to set aside conveyance — court should settle equities — amendment.
    In a suit to set aside a conveyance of lands the court after making a finding in the alternative that the deed was given “to pay or secure the payment” of services rendered, should not dismiss the complaint upon the merits, even though it was not alleged that th'e deed was given as security, and the amount due was not tendered by the plaintiff.
    In a suit in equity the court should adapt the remedy to the facts before it even if it be necessary to amend the pleading to conform to the proof.
    Appeal by the plaintiff, Joseph H. White, from a judgment of the Supreme Court in favor of the defendants, entered in the office of the clerk of the county of New York on the 26th day of December, 1906, upon the decision of the court, rendered after a trial at the New York Special Term, dismissing the complaint upon •the merits.
    
      Charles L. Hoffman [Henry A. Friedman with him on the brief], for the appellant.
    
      Jacob Fromme, for the respondents.
   Clarke, J.:

This was an action to set aside a deed to a piece of property situated on Staten Island, executed by the plaintiff to the defendant Douglas.

It appears that this piece' of property was owned-.in 1902 by one Mary E. Hardy, to whom Joseph H. White, the plaintiff, loaned about $400. Subsequent thereto Mrs. Hardy and her husband gave a deed of said property to White under an understanding that' it was a mortgage, and that upon the repayment of the money advanced White would retransfer the said property to Mrs. Hardy. Subsequent to that transfer, one James L. Goucher brought an action against Mrs. Hardy and White in the' Supreme Court of Richmond county, as assignee of a judgment obtained by one Tim against Mrs. Hardy for $249.67, upon which judgment an execution had been issued and returned unsatisfied, claiming that the deed delivered by said Mary E. Hardy to, said White be set aside and that the property be sold, and from the proceeds thereof the said judgment be satisfied. White, who had been for many years an occupant of Fromme’s office, of which.office Douglas was then managing clerk, put in an answer through Fromme as his attorney of record and- ■ defended the action, as did Mrs. Hardy through another attorney. • Said action was tried on the 19th day of May, 1904, in Richmond county. Both White! and • Mrs. Hardy testified to the bona fides bf the transaction. The court 'dismissed the complaint. The counsel for the plaintiff had notified Douglas that he intended to appeal,' and White claims that the day after the trial Fromme said to him: “You,had better transfer that property over to Douglas for your ■ protection. * * * After the thing is all right, "" * *' they may appeal the case and if they do appeal it, when everything is all right I will give you the property back.” The deed át bar was executed on Hay.20, 1904, and recorded, Henry Fromme, a brother of Herman’s, talcing the acknowledgment of Mrs. White, and was returned, to Fromme Brothers as recorded by them. -

An appeal from "the Richmond, county judgment was subsequently taken to the Appellate Division of the second department and the judgment affirmed. (Goucher v. Hardy, 104 App. Div. 617.) The" trial at Special Term took about thirty to fo.rty-five minutes, and the minutes of the testimony" covered thirteen pages, three witnesses being examined. Upon the appeal Douglas put in. no brief for the defendant: The complaint at bar alleged, and it is not denied in the answer, that the property is worth $750.

Douglas’ claim is that he alone appeared in the case and that the reason that Fromme Brothers formally appeared as attorneys of record is that it Was a rule in the office that if any clerk had any case it should be conducted in the name of the firm $ that the whole, matter was his and that White agreed to pay him for his services and the disbursements. ■ Douglas testified that after the-trial at Special Term, not having’received anything for lxis services, lie.spoke to White, who said that.he had no money ; that lie did not “ see any way to pay me except to give me some property; and I asked him what property and he .said, I will give you a deed of this Staten Island lot,’ ” and thereupon he drew the deed that afternoon, which was executed the next day. He testified, that subsequently after the appeal had been settléd White said, “How that title.is all clean and everything is disposed of, and I would like to get that property back. Well, I said 1 was willing to sell it. He asked me how "much I would sell it to him for and Itold him $500. * * * He said he would see if -he could raise that money; he would see some relati've, Mr. Aaron, or somebody else. * * ■ * And a day or two afterwards he spoke about it- again and lie- said I can’t get $500, all I can get is $250, which Mr. Aarori will loan to me.’ I said I cannot let you.have the property for $250.’”

• Douglas claimed upon the trial that his services were-worth $750"- and the evidence leaves it somewhat in doubt whether he claims the transfer to have been an absolute transfer for his fee or by way of security.

The court, in its decision, has made a finding in the alternative that White .conveyed the property to Douglas voluntarily and at hie own. suggestion to pay or secure the payment of said services and disbursements. If this conveyance was by way of security the court ought to have determined for what amount it was security, and have settled the equities between the parties. (Lazarus v. Rosenberg, 70 App. Div. 105.) The complaint haying been dismissed upon the merits, a serious embarrassment might arise in any other action if the defendant should raise the point of res adjudícala.

It is quite true that the complaint does not set up that the deed was given as security nor was there any tender or. offer to pay the amount due. It alleges that the deed was obtained from the plaintiff by the representations and advice of the attorney, upon which the client relied. The decision leaves the whole matter in doubt.

The amount involved in the suit to set aside the deed from Mrs. Hardy to White, as evidenced by the judgment upon which the suit, was brought, was $249.' For payment of services to one defendant who held title to property worth $750, which title appears to have been only that of a mortgagee in fact, the attorney now holds title to the whole property. The facts having been before the court, it should have adapted its remedy in this equitable action to those facts, even if an amendment to the pleadings to conform to the facts found had been necessary. As it is, the client goes out of court with a dismissal upon the merits, while the attorney keeps the real- estate, although the court finds the important fact in the alternative, which is no finding at all.

The judgment should be reversed and a new trial ordered, with costs to the appellant to abide the event.

Patterson, P. J., Ingraham, Houghton and Lambert, JJ., concurred.

Judgment reversed, new trial ordered, costs to appellant to abide event.  