GILBERT R. WATERBURY and Others, Respondents,
FREDERICK T. BARRY and Others, Appellants, Impleaded with ROBERT W. TAILER and Others, Respondents.
APPEAL by the defendants, Frederick T. Barry and others, from a judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of New York on the 9th day of January, 1911, upon the decision of the court rendered after a trial at the New York Special Term, and also (as stated in the notice of appeal) from such judgment as resettled by an order entered on the 26th day of January, 1911.
Morgan J. O'Brien of counsel [George L. Shearer with him on the brief],Stewart & Shearer, attorneys, for the appellant Barry.
Philip W. Carney of counsel [Herrick, Breckinridge & Carney, attorneys], for the appellants Martin.
Alfred B. Cruikshank of counsel [Atwater & Cruikshank, attorneys], for the respondents.
This action was brought June 7, 1909, to remedy certain fraud and deceit practiced upon the plaintiffs in the sale of certain premises known as No. 115 East Seventy-first street, belonging to them, which they contracted to sell to one John L. Martin, since deceased, in April, 1906, through the agency of the defendant Barry, and to recover back the premises upon the repayment of the purchase price received by plaintiffs therefor. In case the premises could not be recovered, then plaintiffs sought to obtain an accounting from the defendant Barry and the defendant Julia D. Martin, the executrix of John L. Martin, and Varick D. Martin, her assignee, and to recover appropriate damages and to establish a lien upon the half interest which said Barry now has on said premises in order to secure the amount of said judgment, and for other and proper relief.
Defendant Tailer is a bona fide purchaser from Martin of
his half interest in the Martin contract of purchase. Defendant the Lawyers' Mortgage Company is a bona fide mortgagee of Tailer of $33,500. Both of these are protected by the judgment and do not appeal.
The trial court held that Barry and Martin were trustees of the property for the plaintiffs, and awarded $18,000 as representing the difference between $42,000, which plaintiffs received for the property, and $60,000, the value thereof at the time of the trial.
Franklin Waterbury, now deceased, formerly owned the premises. He died October 22, 1875, leaving a last will and testament in which, after providing for certain legacies, he devised and bequeathed all his real and personal property, including the said premises, to his wife, Elizabeth Waterbury, to be held, used and enjoyed by her during her natural life or so long as she should remain his widow, and directed after her death that all his real and personal property as aforesaid should be distributed among his children or such of them as should survive his wife, and their heirs, share and share alike, and the heirs of such of his children as should die before his wife to take share and share alike the share which their father or mother would have taken.
On or about the 21st of March, 1906, the widow was still living, although of a very advanced age. No sale of the property had been contemplated. The defendant Barry, who was a real estate broker, had an office at 641 Madison avenue, near Sixtieth street, and had for eight years made a specialty of buying and selling private houses in the neighborhood of the premises in suit. Barry had a friend, John L. Martin, with whom, he testified, he had had other transactions, had gone into deals with him before; they had been joint purchasers of property, and in the other transactions Martin had taken all the contracts; that Martin had called him up on the telephone and asked whether he had the premises 115 East Seventy-first street for sale. Martin wanted to buy the house. Barry says he did not have the house for sale on his books, but that he proceeded immediately to locate the owners. Thereafter he saw Mr. Frederick L. Waterbury and subsequently the other heirs. None of them had ever seen or heard of Barry prior to
his getting into communication with them. Barry said that he was a real estate broker and had a purchaser for this property. He did not at the first interview disclose the purchaser's name. He was told that the heirs did not think that the property could be sold because there was an existing life estate. He said that he thought that could be easily arranged. He mentioned the price of $42,000 and assured them that that was a good price and all that could be procured; that he would take half of his commissions at that time and wait for the remaining half until the life estate fell in and the deed was actually passed. He introduced Martin as the purchaser, and the price proposed by him was agreed upon. The plaintiffs testified that they relied upon the representations of Barry that that amount was all that could be obtained for the property.
An agreement was entered into under which $350 was to be paid down, $1,650 to be deposited with a title company to be held by it until the deed should pass, when the remaining $40,000 should also be paid. A lease was given to Martin at the annual rental of $1,600 for the period of the life estate of the widow, and the date was fixed for the transfer of the deeds and the final payment due under the agreement after the expiration of the life estate. All these matters were concluded, and Barry gave the following receipt:
'Whereas, I, Frederick T. Barry, am the broker who negotiated the sale of house and lot No. 115 East 71st Street, New York City, and Whereas, the title to said house and lot will not be passed until the termination of a life estate therein; Now this Agreement Witnesseth: That in consideration of the above and for the further sum of one dollar to me in hand paid, I, said Frederick T. Barry, agree to accept payment of my commission of Four hundred and twenty dollars as follows: Two hundred and ten dollars upon the signing of the contract of sale of said house and lot and the remaining Two hundred and ten dollars when the deed to said house and lot is passed. This agreement is made by said Frederick T. Barry with Elizabeth Ida Waterhouse as agent for and representing all persons having any interest whatsoever in said premises.
'In witness whereof I have hereunto set my hand and seal this 4th ...