
    John H. Manahan, Plaintiff, v. John M. Holmes, Defendant.
    (Supreme Court, Saratoga Trial Term,
    February, 1908.)
    Trusts — Resulting trusts — Consideration paid by another; Property purchased with trust funds.
    Limitation of actions —Accrual of cause of action — Constructive trust;
    Where the guardian of a minor uses the funds of her ward to purchase real estate and takes the title in the name of. her mother with the latter’s knowledge, and with her consent that the deed should he executed to her as grantee, for the infant; and where, about eight months thereafter, the grandmother died without having conveyed the premises; and, six years later, the infant became of age and thereafter occupied the premises and kept them in repair and rented them, paid the taxes and insurance and, three years after he became of age, contracted to sell them, and then for the first time discovered the situation of the title, in an action by the infant to establish a trust in his favor, held, the plaintiff not having consented to nor having had knowledge of the transaction, a trust in his favor resulted; and the provisions of section 74, subdivision 1, of the Real Property Law (L. 1896, eh. 547) are not applicable.
    The ten years’ Statute of Limitations applies, but the Statute did not begin to run until the plaintiff knew that the deed had been taken in the name of another.
    Action to compel the determination of a claim to real property.
    
      Fitzpatrick, Witbeck & Haner, for plaintiff.
    James A. Leary, for defendant.
   Van Kirk, J.

In 18-88 the plaintiff was a minor nine years of age. At that time Frances A. Holmes, a sister of his deceased mother, was his guardian, and had as such guardian $1,750, which belonged to the infant. On March 17, 1888, without the knowledge or consent of the infant, Frances A. Holmes, as guardian, purchased, with the ward’s money, the premises in question for the sum of $1,800, the $50 above the $1,750, being given by the guardian to the ward at that time. Because the guardian was informed by her attorney that she could not purchase the real estate in the name of the infant, the deed was taken in the name of Margaret M. Holmes, the mother of the guardian and the grandmother of the ward. The deed, absolute on" its face, was taken in the name of Margaret M. Holmes with her knowledge and consent that it should be executed in her name as grantee, but that the conveyance was for this plaintiff.

About eight months -after the execution of the deed, Margaret M. Holmes died without having conveyed these premises. In 1904, the plaintiff had secured employment in the Hew York State Library. Since that time he has occupied these premises, paid the taxes and insurance, kept them in repair and rented them. In 1907, he contracted to sell the premises, and then, upon examination of the title, for the first time discovered that the premises did not stand in his náme and for the first time discovered the circumstances under which the deed was given. There never has been any claim of title to the premises adverse to the plaintiff until in or about 1907. Then the plaintiff attempted to secure quitclaim deeds from the heirs at law of Margaret M. Holmes, which deeds have been executed and delivered to the plaintiff by the heirs at law of Margaret M. Holmes (including the guardian), except this defendant, who as her heir at law would take a one-fifth interest in the premises, if she were the owner of the property at the time of her death. •

Shortly after the execution of the deed and under the advice of counsel that she should have some means of accounting for the property of the infant, the guardian took a mortgage upon the premises in question from Margaret M. Holmes for $1,750. This mortgage having been taken without the knowledge of the infant and no claim ever having been made thereunder, and the purpose of the mortgage being simply to allow her to keep her accounts in form, I do not consider it of any importance in the case.

This defendant claims a one-fifth interest in the premises, but he has never invested a penny in, nor been in possession of, the premises directly or indirectly. Margaret M. Holmes, his mother, never invested a penny in, or was in possession of, the premises directly or indirectly; although for a considerable time the grandmother and members of her family enjoyed the use of the plaintiff’s premises without expense to them.

There is no single element "in the case appealing to the court to protect any interest in this defendant in the premises, for he has none and never had any. But he claims that, when the premises were deeded to his mother, no trust resulted in favor of the plaintiff; that the premises became the property of Margaret M. Holmes, defendant’s mother, under section 74, subdivision 1, of the Beal Property Law, which reads as follows: “A grant of real property for a valuable consideration to one person, the consideration being paid by another * * * vests the title in the grantee, and no use or trust results from the payment to the person paying the consideration or in his favor, unless the grantee either,

“ 1. Takes the same as an absolute conveyance in his own name without the consent or knowledge of the person paying the consideration; or

“ 2. In violation of some trust, purchases the property so conveyed with money or property belonging to another.”

This provision of the statute does not defeat the plaintiff’s title. The conveyance to Margaret M. Holmes was absolute on its face; but it was without the knowledge or consent of the plaintiff, who in fact paid the consideration, although the manual delivery of the money was by hand of his guardian. At common law a trust would have resulted in favor of the plaintiff, and he would have become the absolute owner in fee of the premises. Foote v. Bryant, 47 N. Y. 547; Siemon v. Schurck, 29 id. 598; Reitz v. Reitz, 80 id. 538-42, Western Union Telegraph Co. v. Shepherd, 169 id. 170, 181.

The guardian of the plaintiff had no authority to invest the personal property of the infant in real estate without an order of the Supreme Court. Matter of Bolton, 159 N. Y. 129. On account of the needs of the family, however, the guardian of this plaintiff desired to purchase the premises in question and intended, without question, in good faith to protect the interests of the ward. The premises in question were paid for entirely by the money belonging to the minor, and the court should protect the interests of its ward.

The statute was intended to prevent fraud by means of a secret trust sought to be made for the benefit of the one paying the money. It was not intended to be the instrument for defrauding an innocent ward of his property. To establish the resulting trust, it was only necessary to show that the money of the ward of nine years paid for the property, but the deed, absolute on its face, was taken in the name of another. That this ward did not give consent to or have knowledge of the transaction is presumed. The necessary proof was made and the premises in question belong to the plaintiff.

The defendant urges that the claim of this plaintiff cannot he enforced against the defendant because of the Statute of Limitations; and he cites particularly paragraph 410 of the. Code of Civil Procedure to the effect that, where a right exists, but a demand is necessary to entitle a person to maintain an action, the time within which the action must be commenced must be computed from the time when the right to make the demand is complete.

In 1888, when the deed to Margaret M. Holmes was executed, the plaintiff was nine years of age, but he had no knowledge then that the title of these premises was not in himself. The plaintiff had no means of knowing that the title of the premises was not in his own name until after 1901, when he became of age and began to manage the property.

Ho cause of action accrued to the plaintiff until he knew that the deed had been taken in the name of another. He had occupied the premises, rented them, paid the insurance and taxes, from the time he came of age or soon thereafter. During all this time no one disputed his title and right, and he believed the title stood in his name. Hot until he had contracted to sell the premises did he discover the contrary. The ten years’ Statute of Limitations would apply in this case and it had not run after the cause of action in favor of the plaintiff accrued. Reitz v. Reitz, 80 N. Y. 538, 544.

The plaintiff is entitled to the relief demanded in the complaint, and findings and decision in accordance therewith may be presented.

Judgment accordingly.  