
    Rose M. Leary, Respondent, v. Lizzie J. Corvin and The Church of St. Mary in the City of New York, Appellants.
    
      Jfi'audulent conveyance—real property purchased with money advanced by a daughter of the grantee—an oral understanding that the property should belong to ; the daughter — when conveyances of the property to a church corporation and by the church corporation to a third party will be set aside as fraudulent — mortgage eoieauted by the third party.
    
    Patrick J. Oorvin purchased certain real property with moneys, a portion of which had been contributed by his daughter, who was his only child. • The title was taken in Oorvin’s name, and it was understood that he and ■ his wife would use the premises as their home during their life-, and that, upon their "death, the property was to belong absolutely to the daughter whose contribution to the purchase price represented the full value of.her estate in remainder.
    Subsequently Oorvin and his wife executed to a church corporation an absolute conveyance of the premises for a nominal consideration. The church corporation executed a deed conveying to the grantors a life interest in the premises, but the latter conveyance was not recorded. Subsequent to Mrs. Oorvin’s death, the church corporation conveyed the premises to ¡Lizzie J. Hurley by a deed expressing a consideration of §14,500, none of which was paid.
    On the same day Oorvin executed to her a release of his life estate in the premises. Hurley then executed a §6,000 mortgage upon the property to secure a loan which she had procured and then reconveyed to Oorvin a life interest in the premises. Five, thousand dollars of the mortgage loan .was paid to the church corporation and the remainder was used for the payment of expenses. Oorvin married the said Lizzie J. Hurley three months later, and subsequently died.
    
      Held, that Oorvin’s daughter was entitled to a judgment declaring her to be the owner of the premises in fee - simple subject to the §6,000' mortgage, and to recover the §5,000 received by the church corporation;
    That Lizzie J. Hurley should be required to account for the rents of the premises, ■but that she should be protected, by bond or otherwise, against liability on the mortgage executed by her. -
    
      Appeal by the defendants, Lizzie J. Corvin and another, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 10th day of June, 1903, upon the decision of the court, rendered after a trial at the New York Special Term, adjudging the plaintiff to be the absolute owner of certain premises in the city of New York.
    
      David McClure, for the appellant Corvin.
    
      Michael J. Sccmlam, for the appellant church.
    
      J. Aspmwall Hodge, for the respondent.
   Judgment affirmed, with costs on the opinion of the court below (O’Brien, J., dissenting).

The following is the opinion of Greenbaum, J., delivered at Special Term :

Greenbaum, J.:

This action is brought to establish the title in fee absolute in the plaintiff to certain real property situate in the city of New York, subject only to an existing mortgage of $6,000, to compel defendant Corvin to render an account of rents collected, and to recover a judgment against the defendant the Church of St. Mary for the sum of $5,000 and interest. The facts out of which this controversy arises are set forth in detail in the opinion of Mr. Justice Werner, before whom the case was originally tried and who dismissed the complaint upon the merits (29 Misc. Rep. 68), and in the opinions of the Appellate Division, which reversed the judgment of the Special Term (63 App. Div. 151). Upon the present trial substantially the same testimony was presented as upon the former trial, supplemented, however, by the testimony of one Martin Cody, whom the plaintiff produced as a newly-discovered witness. It would seem to be sufficient here to state that the plaintiff was the daughter of one Patrick J. Corvin and Mary Corvin; that in 1875, plaintiff, who then married a Mr. Leary, gave to her father the sum of $1,385, which she had drawn from two savings banks in this city, where the money had been deposited in her name for upwards of one year; that the father, with the money thus given, him ¡by his daughter .and certain other moneys given to him by his wife, Mary, purchased the premises involved in this suit known as ¡No. 279 East Broadway, with the understanding that the parents would use it as their home as long as they lived, .and that upon their death the property would belong absolutely to the plaintiff, who was an only child. It appears that the plaintiff, some time after her marriage, unfortunately became addicted to the liquor habit to such a degree that it became necessary for her welfare on a number of occasions to place her in a sani- ■ tarium, although it is proper to state fhat it is now asserted that for a number of years past she has overcome .the desire for drink. The title to the property was taken in the father’s' name, a fact of which the plaintiff claims that she had no knowledge at that time. In December, 1890, the father and mother conveyed the property in question to thé defendant the Church of St. Mary for a nominal consideration by deed absolute, which was duly recorded. On tlie same day the church executed a conveyance back to the parents, giving them a life estate in the property, but which was not recorded. In February, 1892, the mother, Mary Corvin, died. On December 21, 1892, pursuant to an order of this court upon an 'application for leave to sell, the church conveyed the premises to one Lizzie -J. Hurley (now known as Lizzie J. Corvin), one of the defendants herein, for the expressed consideration of $14,500. On the same day the father, Patrick -J. Corvin, released his life estate to said Lizzie J. Hurley, who at the same time executed a mortgage for .$'6,000 upon the premises in consideration of a loan for said-sum which she had procured, and reconveyed a life estate to Patrick J. Corvin."' From the proceeds of the mortgage loan the sum of $5,000 was paid to the defendant, the church, and the balance of $1,000 was used for the expenses involved in the various transfers and transactions just detailed. On February 9, 1893, Patrick J. Corvin married said Lizzie J. Hurley. On Mareh 31, 189-8, lie died, and on August 26, 1898, this action was commenced. The complaint is predicated upon the theory that not only was the property impressed with a trust of an estate in remainder at the time of its purchase in favor of the plaintiff, blit that the conveyance to the church was made upon the same trust. The plaintiff has submitted the testimony of various witnesses in support of her claim that the property was originally: purchased partly with her money,, upon the understanding that she was to own the remainder after- the termination of the life estates of her parents, and no- proof in cimtradietion of such testimony has been presented,, and this- testimony is- entitled to credit,, unless- the. cross-examination of the witnesses,, their relation to the parties, the circumstances and probabilities of the-case tend, to impair its probative force.. The defendants have submitted testimony of living witnesses, as: to the circumstances attending: the: conveyance to the church, showing that it was not'made upon any trust, and this testimony,, being uncontradicted by any direct proof, should only be discredited for reasons similar to those indicated with respect to- plaintiff’s proof. Under the: view. that. I take of the case:, I have concluded to, assume that- the testimony given by the. defendants’ witnesses, so- far as it affects the issue relating to the trust character of the conveyance to the. church,, is truthful and 1 shall consider the case solely with reference to plaintiff’s claim that the property was impressed with a trust at the time of its purchase by plaintiff’s father. It is- undisputed that the plaintiff had the legal title to-the- moneys on deposit in the savings banks, and it: would be mere speculation to. indulge the. thought that. this, money belonged to, the father, or if it had originally belonged to him, that she held the money in trust for-him. On the eonrtary, the circumstances favor the finding of an absolute ownership, of this money in the plaintiff, who had lived with her parents until her twenty-fourth, year, rendered services in the household and assisted in serving and waiting upon boarders and lodgers, kept by her mother. But even. if. tha money was a gift from her parents, plaintiff’s title thereto, so. far as; the proofs show, cannot well be questioned., Added to- the testimony produced upon the previous trial is: that of the: witness Cody„ who confirms that of the other witnesses- as to the.: purchase, of the real estate in question, in part, with plaintiff’s money, and upon the understanding that the. title thereto- was to vest in plaintiff upon her parents’ death. I do not think: that plaintiffs* witnesses have been discredited.. The- circumstances attending the purchase, the fact that plaintiff was. the; sole child and that, complete confidence- seems to have prevailed between parents: and daughter, all these considerations, tend to strengthen the, belief that it was probable: and natural for the parents, at the age: at which, the plaintiff had then attained, to have had the understanding with their daughter, to which these witnesses testify. ' It also appears, upon an application of the Northampton tables, that the sum contributed by the plaintiff was about equal to the value of the estate in remainder, subject to the life estates of the parents: Although this fact is doubtless a pure coincidence, it is nevertheless evidence that the plaintiff' gave' a valuable consideration for her prospective remainder interest. The ordinary method of conveying to the church a fee in remainder would have been by deed conveying the title subject to the enjoyment in possession on the part of the grantors during their lives, or by a conveyance of an absolute deed and a simultaneous reconveyance of a life estate to the grantors, as here done, coupled, however, with a simultaneous record of both instruments, which was not done in this case. A departure from the ordinary procedure casts suspicion upon the transaction, because of the secrecy implied with reference to the understanding as to the reservations intended. Such a secret arrangement is consistent with the idea that the parents, knowing the daughter was entitled .to the property after their death, deliberately entered into a plan which should keep from her, in her lifetime, knowledge of the real disposition they had made of the property, and, for aught one knows, after having given her to understand that the church was; holding the property in trust for all of them, for some such reason as the proofs indícatelas that the father might remarry after his wife’s death. ■ That the defendant Lizzie J. Corvin is not an innocent purchaser for value is evident from the facts attending her acquisition of the title. The petition made to this court for leave to sell these premises, and in-which plaintiff’s father united, contained the false allegation'that “it .is proposed to sell the said property to Lizzie J. Hurley for fourteen thousand five hundred dollars, which is the best price that can be obtained for the same, and to apply the proceeds of such sale in payment, so far as may be necessary, of the indebtedness of the corporation and the cash value of the life tenant’s estate.” As matter of fact the “ cash value of the life tenant’s estate,” as calculated by the N orthampton tables, was less than $5,000, leaving the amount to which the church was entitled as upwards of $9,000, and yet the: amount actually paid to the church was but $5,000. The defendant Lizzie J. Corvin paid no money of her own for the conveyance, but, from the mortgage loan of §6,000 obtained when title was taken, the sum of $5,000 was paid to the church and the remaining $1,000 went to pay all the expenses incurred in the proceedings for leave to sell and in procuring the loan. The unusual circumstance of the payment of $1,000 for all the expenses by a purchaser, taken in connection with the marriage of the defendant Lizzie J. Corvin, the purchaser, to Patrick J. Corvin, plaintiff’s father, within a few months after the conveyance, clearly shows that she was used merely as a dummy1; that she was not a bona fide purchaser and that she was not a purchaser “ for value.” Having found the facts it is in order to determine the law applicable to them. The expressions of the Appellate Division on the' appeal heretofore taken in this case, and the principles announced in Goldsmith v. Goldsmith (145 N. Y. 313, 318) seem to be controlling here. The general rule stated 'in the latter case, following that declared in Wood v. Rabe (96 N. Y. 425, 426), was “ that when a person, through the influence of a confidential relation, acquires title to property or obtains an advantage which he cannot conscientiously retain, the court, to prevent the abuse of confidence, will grant relief. It was added that, while the fraud must be something more than the mere breach of a verbal agreement, yet where the transaction is one between parent and child, and involves the greatest confidence on one side and the greatest influence on the other, the case is one in which equity may properly intervene.” The facts here presented seem peculiarly to require the intervention of a court of equity to enforce the understanding or agreement between the plaintiff and her parents when the property was purchased. Ho rights of innocent third parties are affected by decreeing that the fee of the property involved be declared to vest in the plaintiff. The defendant church concededly paid no consideration for the conveyance' to it while the defendant Lizzie J. Corvin is not a bona fide purchaser, in view of the circumstances attending her acquisition of the title to the premises, nor a purchaser for value, and if suitable provision be made to relieve her from any possible liability under the bond which she gave upon the execution of the existing mortgage, no injury can come to her by setting aside the conveyance to her. I, therefore, decide that the plaintiff be decreed to be the absolute owner of the property described in the complaint, subject to the mortgage of $'6,000; that in view of the admission upon record .as to the net rental for "the year ending March 29, 1899, being $70.0, and of the waiver .of plaintiff to -any further account made upon the ■argument, the defendant Lizzie J-. 'Corán pay ..over- to the plaintiff $700, with interest from April 1,1899, in lieu of an aceematóng for rents collected.; that the defendant Lizzie L ¡Corán be relieved from the obligations of her bond secured by • the $6,000 mortgage by sufficient indemnity or otherwise; that the plaintiff .have /judgment against the defendant the Church of St. Mary for the sum of, $5,000, 'with interest from .August 20, 1898, 'and that the plaintiff is entitled to the net proceeds -of the rents collected by the .receiver heretofore appointed herein. Ho costs.  