
    George Bork, Resp’t, v. Alexander Martin, App’lt.
    
    
      (Court of Appeals, Second Division,
    
    
      Filed March 25, 1892.)
    
    Deed—Statute oe uses and trusts— Conversion.
    Prior to a sale on foreclosure, B., who was a tenant In common of the . property, made an agreement with one Box to buy in his interest, and hold it as security for a debt, and in accordance therewith Box and the other owner D. purchased at the sale. Subsequently D. commenced a partition suit when it was agreed that Box and D. should convey to defendant, who should hold the land in trust and convey the same to such persons as the owners should designate. Such conveyances were executed but defendant paid nothing therefor. Under a further agreement plaintiff.paid the debt to Box and became the owner of B.’s interest, and from time to time plaintiff negotiated the sale of lots and defendant executed deeds to the purchasers, but the last five parcels of the land defendant refused to convey unless he received the purchase price, and subsequently refused to pay the same to plaintiff. Held, that defendant could not with the avails of his agency in his pocket dispute his agency or his principal’s power to appoint him, and his refusal to pay over the money constituted a conversion thereof.
    2. Same.
    Though the statutes of frauds and of uses and trusts might have justified defendant’s refusal to dispose of the land as he orally agreed, yet having disposed of it, he becomes a trustee of plaintiff’s personal property, and the court will not allow the statute of frauds to be used as an instrument of fraud.
    Appeal from a judgment of the general term of the superior court of Buffalo for plaintiff upon a verdict for plaintiff for $980, directed by the trial court, which ordered the exceptions to be heard in the first instance at general term.
    September 7, 1883, Henry Box held the legal title to certain lots of land in Buffalo, but in fact and 'as conceded by him, as security for the indebtedness of Jos. Bork to him in the sum of $4,000! Jos. Bork was about to leave Buffalo for a long absence, and he desired to transfer his equity to the plaintiff, and have the plaintiff assume the payment to Box ; he requested Box to convey the lands to the defendant upon the plaintiff’s agreement to pay Box $4,000. This plaintiff agreed to do. Box then conveyed the lands to the defendant and plaintiff subsequently paid Box the $4,000. As part of the transaction, the plaintiff and Jos. Bork orally agreed with the defendant that the latter should hold the lands for the sole use and benefit of the plaintiff and subject to his direction respecting the sale of it, or any part of it, and pay him the proceeds of such sales, and the defendant received the deed from Box in pursuance of the oral agreement.
    The defendant neither paid nor agreed to pay any consideration for the deed or lands. From time to time the plaintiff negotiated sales of lots, parcels of the entire premises, and upon his request defendant executed and delivered deeds thereof to the respective purchasers and paid plaintiff the proceeds. But about May 1,, 1888, plaintiff having negotiated the sales of five lots more, the defendant refused to execute the deeds to the purchasers unless the consideration should be paid to him.
    Plaintiff in order to obtain the deeds for the purchasers advanced the consideration and upon defendant’s direction delivered it to the defendant’s wife. Whereupon defendant delivered the deeds for the purchasers. Plaintiff afterwards demanded of the defendant payment of the $1,980, which being refused, this action was brought. The complaint alleged plaintiff’s equitable ownership of the premises, that they were conveyed by Box, to defendant, upon a trust substantially as above set forth, the sale of the premises, the receipt by defendant of the purchase money and his refusal to pay the same to plaintiff.
    The complaint further alleged that the defendant “ has fraudulently and dishonestly appropriated the said moneys and converted them to his own use.”
    The answer was a general denial.
    
      Adelbert Moot, for app’lt; David, F. Day, for resp’t.
    
      
       Affirming 33 St. Rep., 659. ■
    
   Landon, J.

Joseph Bork, originally having an equity in the premises, and being indebted to Box for about $4,000, requested Box to take the legal title as security for the debt, and also to protect Joseph’s equity. Box consented, and although the deed to himself was absolute he treated it as a mortgage from Joseph, and in equity it was a mortgage. Carr v. Carr, 52 N. Y., 251. Afterwards Joseph and his brother, the plaintiff, agreed that the plaintiff should pay Box the mortgage debt, and for that and other considerations plaintiff should have Joseph’s equity in the land. Box consented. To accomplish this Box conveyed the land upon Joseph’s and the plaintiff’s request to the defendant, who, paying no consideration, orally agreed to hold the title for plaintiff’s convenience and benefit. The plaintiff paid Box the mortgage debt. The premises consisted of twenty-five building lots. Defendant agreed to convey the same upon plaintiff’s request to such purchasers as the plaintiff should procure and to pay the purchase money as received to the plaintiff.

The agreement was fully performed by the defendant except that after conveying pursuant to plaintiff’s request twenty of the lots and paying him the purchase money received, or allowing him to receive it himself, and finally conveying the last five lots pursuant to the like request and receiving the purchase money, the defendant then refused to pay it to plaintiff.

Thus the present controversy is not in respect of the land, for that has been properly disposed of, but in respect of the purchase money received by the defendant for the last five lots sold.

Assuming that the land was conveyed to the defendant upon an oral trust invalid under the Statutes of Frauds and of Uses and Trusts, 2 R. S., 134, § 6; 1 R. S., 728, § 51, yet it was lawful for him to perform it, and he has fully performed it so far as it required hjm to dispose of the land. The land is all sold, and he has the price of the last five lots in his pocket. The language of the cases is to the effect that he cannot in good conscience retain it, and that it belongs to the plaintiff. Robbins v. Robbins, 89 N. Y., 258; Dunn v. Hornbeck, 72 id., 80 ; Foote v. Bryant, 47 id., 544.

Though the statutes might have justified the defendant’s refusal to dispose of the land as he had orally agreed, yet, having disposed of it, he has voluntarily emerged from the field of their protection and exposed himself to the law which deals with him as a trustee of personal property realized for plaintiff’s benefit, by virtue of an agency for the plaintiff which he has so far performed pursuant to the plaintiff’s instructions and his own agreement as to obtain the moneys his agency was constituted to produce. Equity approves his performance so far as he has performed, and as the statutes referred to no longer apply, there is no law which he can invoke to shield him from the full performance of his duty.

The court will not allow the Statute of Frauds to be used as an instrument of fraud if it .can prevent it. Cases supra; Ryan v. Dox, 34 N.Y., 307; Levy v. Brush, 45 id., 596; Siemon v. Schurck, 29 id., 598.

8Here the defendant co-operated with the plaintiff for years in the execution of the agreement entered into for plaintiff’s benefit, plaintiff the while performing the active labor of negotiating the sale of the lots in full reliance upon defendant’s fidelity. In the end, when the fruits of the enterprise have come to defendant’s hands ready for delivery to the plaintiff, the defendant halts in his fidelity and seeks to appropriate to himself what he agreed to deliver to the plaintiff. He thus seeks to perpetrate a fraud. It is the duty of the court to prevent it.

When the defendant says that it is not fraudulent to refuse to perform a contract which the statute declares to be void, the answer is that he is not charged .with a refusal to perform that part of the contract; he has voluntarily performed it. A trust in the money may be established by paroi. Day v. Roth, 18 N. Y., 448; Robbins v. Robbins, supra. So, too, when the defendant says this money is the proceeds of the sale of his own land, the reply is, that the money is the proceeds of the land which plaintiff entrusted to the defendant to sell for his benefit; that the defendant cannot, with the avails of his agency in his pocket, dispute his agency or his principal's power to appoint him, Supervisors of Rensselaer Co. v. Bales, 17 N. Y., 242; that the statutes relate to land, not to money; that since the defendant has waived his ■.statutory protection and converted the. land into money, the court will accept both his waiver and performance so far as he has accomplished them, and take up his agency at the point where he has repudiated it; and since it would be unjust to treat the money as land and thus allow the defendant to recede from his honest performance, the court will not permit it.

The same equitable considerations defeat the application of the statute which declares that where the grant is to one person and the consideration paid by another no trust results in favor of the latter. The plaintiff seeks to establish no resulting trust in the land. The voluntary performance of the defendant has carried the case beyond that stage, and the trust is in the money which the facts show the defendant received for plaintiff’s benefit. It is -simply a question whether the defendant can ex cequo et bona refuse to pay it to plaintiff. The defendant’s argument is that if the plaintiff had no equity or estate in the land, he can have none in its proceeds. The common law gave a resulting trust in the .land which but for the statute would have vested in the plaintiff. Upon grounds of public policy, none of which is violated by this • case, the statute forbade such a concealment of title. The plaintiff, let us assume, paid the consideration for this grant, which vested in the defendant both the interest of Box, as mortgagee, and the equity of Jos. Bork, as mortgagor. Under the circumstances it was inequitable for the defendant ta refuse to recognize the oral trust which he assumed. So long as he held the title to the land he might have invoked the protection of the statute. But pursuant to his oral trust he converted the land into money. The law, perceiving that to hold otherwise would promote injustice, says to the defendant, you had the statutory protection so long as you kept the property entrusted to you within its terms, but you have voluntarily and justly converted it into money and thus with•drawn it from the shield of the statute. The plaintiff converted his money into land and allowed you to hold the land exempt .from the legal trust and bound only by the moral one. He thus voluntarily placed his property beyond his legal reach. You have now voluntarily re-converted it into money and thus replaced it within his legal reach. It was his originally, in good ■conscience it was his when the statute enabled you to deny his right; it is now in good conscience his with the statutory bar to his taking it voluntarily removed by you. Justice desires to .award it to him and thus finds its way to do it.

If the defendant should say that he now can keep the money because he might once have kept the land, still the plaintiff can •say with better justice that he is now entitled to the money, because it was originally his, and though he voluntarily suspended his right to it for a season, he did so without lawful consideration .and in confidence that when it could be restored to him it would be. That time has come and there is no obstacle to its restoration.

The allegation in the complaint that the defendant “has fraudulently and dishonestly appropriated the said moneys and converted them to his own use,” is an unnecessarily strong characterization of defendant’s refusal to pay them over to the plaintiff, We do not think the pleader intended to frame his complaint as for trover and this characterization may be rejected and still leave: stated the cause of action upon which the recovery was had.

The objection 'that the plaintiff voluntarily paid the purchase-money to defendant’s wife upon defendant’s request, is not supported by the facts. The defendant had the right to receive the purchase money in the first instance, and therefore the right to refuse to let the deeds go out of his hands until it was paid to him. The plaintiff had the right, if he chose to do so, to advance-it for the purchasers. The defendant simply received what he had the right to ask in his capacity as agent, namely, payment of the purchase price upon delivery of the deeds.

By adding to that right an unfounded claim did not convert? the satisfaction of the claim properly made into a concession o£ the improper one.

The judgment should be affirmed.

Judgment affirmed, with costs.

All concur.  