Of late unconventional and "creative" financing have given rise to litigation involving claims that one would not expect to encounter in a sophisticated economic environment and that require revisiting fundamental legal principles. This case is one example.

A non-jury trial of this matter was held on Nov. 1, 2006. When the submission of evidence was complete, the trial was adjourned to permit the parties to submit written summations. In lieu of a written summation, Defendant submitted a motion in which she seeks leave to amend her answer to include a request for equitable relief. Plaintiff opposes the application and submits a proposed calculation of damages based upon his complaint.

The Parties have stipulated that Defendant Erica John Wellington and her husband Mervyn Wellington held title to a private home located at 174 Hendrickson Ave., Elmont, New York. The deed dated Oct. 10, 1995, admitted into evidence as Defendant's A, reflects that title to the property was transferred to Erica John only. Nevertheless, the deed dated Jan. 15, 2004, admitted into evidence as Plaintiff's 1, identifies as the grantors both Defendant Erica John Wellington and Mervyn Wellington[*2] although it describes Mervyn Wellington's interest as "1%." The grantee is Plaintiff Ivan DeRoche. The parties further stipulated that the net proceeds after expenses of the mortgage Plaintiff DeRoche had obtained to finance the purchase were used to satisfy Plaintiff's mortgage.

Neither Plaintiff nor Defendant in their testimony made reference to the "Settlement Statement" from the closing of title that was admitted into evidence as Plaintiff's 2. It recites that Plaintiff paid $18,162.36 over and above the proceeds of the mortgage he obtained toward the purchase of the premises. Nevertheless Plaintiff testified that all closing costs were paid out of the mortgage. In any event, Plaintiff obligated himself to repay a mortgage of $325,000.00 on which Emigrant Mortgage Company was the lender and of which $298,112.00 is still outstanding.

Plaintiff Ivan DeRoche had been living at the premises prior to January of 2000, but not paying rent. Plaintiff had provided certain services including digging out a cellar and had received some compensation from Mr. Wellington in return. Plaintiff testified that he made a few mortgage payments when asked and also supplied Defendant Erica John Wellington with some funds. Mr. DeRoche claims that he had a relation with the Wellingtons which he asserts was that of a friend while Defendant argues that there was some familial bond. Sometime prior to Jan. 15, 2004 Mervyn Wellington suffered a stroke that disabled him from working. Due to the economic constraints traceable to Mr. Wellington's condition, the house went into foreclosure. Defendant Erica John then proposed that Plaintiff purchase the house financing the purchase with a mortgage.

Defendant Erica John acknowledges that she began to fall behind in the mortgage payments after her husband suffered a stroke. According to Defendant, at this point she approached Plaintiff with a plan pursuant to which title would be transferred to him for one year and then transferred back. Defendant was to pay $1,800.00 a month plus utilities. After a few months she was no longer financially able to make her payments

and stopped making them. Plaintiff has continued to pay the mortgage. Presumably Defendant used the proceeds received at the title closing to satisfy her mortgage.

Plaintiff commenced a summary proceeding in District Court seeking to evict Defendant and brought this action in ejectment. Defendant now claims that it would be unconscionable and inequitable for Defendant to be ousted from the premises and receive no compensation.

An estoppel prevents a person from; "saying anything, even the truth against his own act or admission." (The Welland Canal Co. v Hathaway, 8 Wend. 480 [1832]). "Estoppels are generally divided into the following three categories: estoppel by deed, bond or formal writing; estoppel by record; and equitable estoppel or estoppel in pais.' (5 Warren's Weed New York Real Property [5th ed.] § 48.04).

Estoppel by deed precludes a party to a deed and his or her privies from denying as against another party the force and effect of the deed "by any evidence of inferior solemnity." (Pedro v Pedro, 71 Misc 296 [Sup.Ct., N.Y.Co., 1911; 5 Warren's Weed New York Real [*3]Property [5th ed.] § 48.08). "Ordinarily [a grantor]; cannot be heard to assert a right in disparagement of his own deed, a principle deeply imbedded in the common law . . . ." (Tubb v Rolling Ridge, 28 Misc 2d 532, 535 [Sup. Ct., Suf. Co., 1961]). A seller who, "assumed to convey a title, good as against subsequent purchasers and incumbrances, . . . [cannot] cut down the estate, so apparently conveyed, to a partial or modified grant . . . ." (The Mutual Life Ins.; Co. v Corey, 135 NY 326, 332 (1892).

The deed of Jan. 15, 2004 recites that Defendant conveys the property to Plaintiff "with all right, title and interest." It was granted with the intent to induce Emigrant Mortgage Company to provide the funds which, once conveyed by Plaintiff, would enable Defendant to pay off her own mortgage. Certainly, in any foreclosure action against Plaintiff principles of estoppel in pais would preclude Defendant from claiming, as she does here, that she did not convey "all right, title and interest," but rather retained some sort of reversionary right that matured after the passage of twelve months. (Winchester-Simmons Co. v Simmons, 222 A.D. 639 [1st Dept, 1928]; Weiss v Schildkraut, 116 Misc. 285 [Sup.Ct. Qns. Co., 1921]). Based on similar principles estoppel by deed precludes Defendant from asserting such a claim against Plaintiff.

As to Defendant's motion, it is essentially one to conform the pleadings to the proof (CPLR 3025(c)) and to permit her to interpose an equitable claim. Although it might be presumed that the mortgage loan was for something less than the full value of the house and Defendant had some equity, no evidence was presented to support any such claim. Defendant's inability to pay her mortgage was the very reason for the transfer of title to Plaintiff. Further, Defendant admitted that she defaulted on her promise to pay Plaintiff $1,800.00 a month. Accordingly, the motion to amend the Answer is denied.

The Court determines that Plaintiff is the fee owner of the premises and entitled to possession. Defendant committed herself to pay what was essentially rent of $1,800.00 per month. She is credited with monthly payments of $1,800.00 through November of 2004. She is further credited with payments of $1,400.00 per month for December of 2004 and January, February and March of 2005. Plaintiff is awarded judgment against Defendant Erica John Wellington at the rate of $400 per month for each of these months with interest calculated from the last day of each month. Plaintiff is further awarded judgment against Erica John Wellington for $1,800.00 per month from April 1, 2005 through December 2006 with interest calculated from the last day of each month.

This constitutes the order and judgment of the Court.

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HON. GEOFFREY J. O'CONNELL, J.S.C.