(No. 58.)

By a plaintiff who had taken, on the sale of real estate, a note of an insolvent third person (believing it good), instead of a bond and mortgage, to which he was entitled, which bond and mortgage were executed to the maker of the note, by the fraudulent or collusive acts of such maker and mortgagor; praying the assignment to plaintiff of the bond and mortgage for foreclosure; or to be canceled, and mortgagor adjudged to pay the amount due the plaintiff.

SUPREME COURT - DUTCHESS COUNTY.1

Platt Vail and Hiram Vail

agt.

Abraham Flagler, Tilley Morgan and Benjamin S. Thorn.

The plaintiffs complain of the defendants, and allege the following facts constituting their cause of action :

That on or about the 22d day of February, 1840, the plaintiffs, as executors of the last will and testament of Samuel Van Cott, deceased, under and by virtue of said will, sold certain lands and premises, part and parcel of

1 This complaint is altered and adapted from a bill filed in the late Court of Chancery. The Vice-Chancellor having dismissed the bill, the complainants appealed, and the General Term of the second judicial district reversed the decision, and decreed that the bond and mortgage should be assigned to the plaintiffs, and mortgage foreclosed to pay their demand. The decree was affirmed by the Court of Appeals. (Vail v. Foster et al., 4 Comst., 312.)

2 In the original bill there were several other parties defendants; but the statement of the facts, as I have set them forth, does not render these parties necessary, and they are accordingly omitted.

said estate, lying in the town of Stanford, in said county of Dutchess, which land and premises so sold are bounded and described as follows, viz: [Describing premises.]

That the said premises were purchased at said sale, by or for the defendant, Tilley Morgan, of the said town of Stanford, for the sum of $525.50, for which, by the terms of sale and agreement between the plaintiffs and the said Tilley Morgan, the plaintiffs were to execute a deed for the premises so sold, and the said Tilley Morgan was to give back to them a bond and mortgage upon the said premises, for the purpose of securing the payment of such purchase moneys.

That the said deed bears date on the said 22d day of February, 1840, and the bond and mortgage hereafter described as executed by the said Tilley Morgan for the said purchase money bear equal date therewith; but, in point of fact, the said deed and bond and mortgage were not executed and delivered until the 1st day of April next thereafter, being the 1st day of April, 1840, which said deed and mortgage are duly recorded in the clerk's office, in said county of Dutchess.

That after the said sale, and before the said deed and bond and mortgage, or either of them, were executed and delivered, and before the note, hereinafter referred to and described as drawn by the defendant, Abraham Flagler, and the plaintiffs, was executed, the said Abraham Flagler or the said Tilley Morgan, or both of them, proposed to the plaintiffs to take his, the said Abraham Flagler's, promissory note for the amount of the said consideration moneys, instead of the mortgage of the said Tilley Morgan, aforesaid; and to permit the said mortgage, instead of being executed to the plaintiffs, as agreed on between them and the said Tilley Morgan, to be executed and delivered to the said Abraham Flagler, which arrangement

was so proposed by the said Abraham Flagler and Tilley Morgan for their own exclusive accommodation, on account of some agreement or understanding between them, the said Tilley Morgan and Abraham Flagler, and not for any consideration received or agreed to be received, at that time or thereafter, by the plaintiffs or either of them, from the said Abraham Flagler, Tilley Morgan or either of them, or any other person on their or either of their behalf.

That the said Abraham Flagler was then the owner of the said property, and was reputed, and believed by the plaintiffs to be a man of great pecuniary responsibility, and also very punctual and honest in all his dealings; and the plaintiffs knowing the said Abraham Flagler and Tilley Morgan as acquaintances, and being of friendly disposition towards and desirous of accommodating the said Tilley Morgan, and supposing the promissory note of the said Abraham Flagler to be perfectly good and collectible, and that it would be certainly and positively paid when the same became due and payable, on that account, and on no other account, assented to the arrangement proposed by them, as abovementioned, and accordingly took the promissory note of the said Abraham Flagler, instead of the said mortgage, and permitted the said bond and mortgage to be executed to the said Abraham Flagler, instead of to the plaintiffs, which bond and mortgage are for the same amount and payable at the same time as the said note, to wit, on or before the 1st day of April, 1841.

That the said note was drawn for the said sum of $525.50, because that amount was the amount of the consideration expressed in the deed; but in point of fact, the said Tilley Morgan, previous to the execution and delivery of the said deed and bond and mortgage, had paid to the plaintiffs $200, part and parcel of the said consideration,

and the said amount of $200 was, at the time of the execution and delivery of the said bond and mortgage to the said Abraham Flagler, or shortly afterwards, endorsed or receipted upon the said note and bond, respectively, leaving the amount actually due upon the same, respectively, upon the 1st day of April, 1840, $325.50, with the legal interest from that date, and no more.

That the said note, bond and mortgage were executed, delivered and received by the respective parties on and for no other consideration than as above set forth, and that the said Abraham Flagler had no title or interest or claim in and to the premises contained in said mortgage, legal or equitable.

That the said Abraham Flagler has, since the execution of the said promissory note, and before the same fell due by the terms thereof, become and still is insolvent, and the said promissory note, and every part thereof, is altogether unpaid and uncollectible. And the plaintiffs are informed and believe that the said Abraham Flagler was, at the time of the execution and delivery of the said promissory note, and the delivery of the said bond and mortgage, as aforesaid, insolvent, and knew that he was insolvent, or, if not then actually insolvent, that he then shortly expected so to be, or intended to become so, fraudulently or otherwise; and that he, the said Abraham Flagler, fraudulently effected the arrangement above set forth, and procured the execution and delivery of the said bond and mortgage to him, the said Abraham Flagler, instead of to the plaintiffs, for the express purpose of defrauding them and cheating them out of the amount secured to be paid by the said mortgage. And that the said balance of $325.50, so as aforesaid due, on and by said bond and mortgage, on the 1st day of April, 1840, and the interest thereon, still remains due and payable, and wholly unsatisfied, and that

the said Tilley Morgan has had notice of all the abovementioned facts and circumstances.

That since the receipt, by the plaintiffs, of the said promissory note of the said Abraham Flagler, and before the commencement of this action, the plaintiffs, as executors of the said Samuel Van Cott, deceased, have had a final accounting before the surrogate of Dutchess county, and the said surrogate, in making his decree on said accounting, has adjudged and decreed that the plaintiffs were personally responsible for the said purchase moneys so as aforesaid due on the sale of said real estate, and for which said promissory note of said Abraham Flagler was received and accepted as aforesaid; and the plaintiffs, in pursuance of such decree, have paid to the creditors and legatees, and others entitled to the moneys of said estate, the whole amount of the said decree, including the amount of the said balance of said promissory note and said bond and mortgage, and have thereby become the equitable owners in their own right of the said bond and mortgage, or of the said moneys so as aforesaid still due on the said sale and purchase, and invested, in their own right, with all the equitable remedies they would or could have had as such executors.1

That the said Tilley Morgan, since the giving of the said bond and mortgage, always has been, and still is, the owner of the premises contained in the said mortgage.

That the rights of no bona fide purchasers have attached to the said bond and mortgage, or the money intended to be secured thereby, neither have any legal or equitable interests of any kind, as against the plaintiffs.

1 This allegation is merely the statement of a conclusion of law, and is consequently unnecessary and improper. I have allowed it to remain, however, as more clearly explaining the nature of the relief to which the plaintiff was entitled.