Townshend v. Frommer

• Decision Date: 28 February 1891
• Citation: 26 N.E. 805,125 N.Y. 446
• Parties: TOWNSHEND v. FROMMER.
• Court: New York Supreme Court

125 N.Y. 446

26 N.E. 805

TOWNSHEND

v.FROMMER.

Supreme Court, New York County, New York.

February, 1891.

Appeal from a judgment.

This action was brought by John Townshend to recover four undivided tenth parts of land in the City of New York, conveyed to plaintiff by children and grandchildren of Mrs. Clarissa E. Curtis under the following circumstances. Mrs. Curtis owning the lands subject to a mortgage, created a trust by deed conveying them to one Eliza Racey, the party of the second part, her heirs and assigns, to her and their own proper use, benefit and behoof forever, but in trust, nevertheless, that the said party of the second part, and her heirs, shall receive the yearly income, rents, profits and produce of the said land and premises, and apply the same yearly, during the natural life of the said Clarissa, free and clear, etc., but to the sole and separate use of the said Clarissa.

“And, on the further trust, that the said party of the second part, and her heirs, shall, at the decease of the said Clarissa, convey the said lands, and every part of them in fee simple, to the children of the said Clarissa, living at her decease, and the surviving children of such of them as may then be dead, in equal portions per stirpes and not per capita, etc.

And in case of the death of the said Clarissa, leaving no child or grandchild her surviving, the said lands and premises shall belong to, and vest, at her decease, in fee simple to her right heirs, to whom the said party of the second part, and her heirs, shall convey the same accordingly.”

Subsequently the mortgage by which the lands were incumbered was foreclosed, Mrs. Curtis, the grantor, and her husband and the trustee being made parties; but the children of Mrs. Curtis then living were not joined as parties.

The defendants in this action derived title under the foreclosure. The plaintiff claimed as the purchaser of the interests of children not joined as parties in the foreclosure.

The trial court directed a verdict for defendants, and that the exceptions be heard at general term.

The superior court at general term, held that although the trust to convey was not valid as a trust, it was valid as a power in trust; and was kept alive by the statute as completely as if it were a valid express trust, and that therefore plaintiff had no legal interest such as was necessary to enable him to maintain ejectment. (Reported in 57 Super. Ct. [ J. & S.], 90).

Plaintiff appealed to this court.

George F. Danforth and John Townshend for appellant.

John F. Dillon and Harry Hubbard, John E. Parsons and John C. Shaw, for the respondents.

GRAY, J.

This is an action of ejectment, and through it the plaintiff seeks to establish his right to the possession of certain real estate in a block of land in New York City, which is bounded by the Fourth and Fifth avenues and Seventy-sixth and Seventy-seventh streets. The question of his right turns upon the sufficiency of certain proceedings for the foreclosure of a mortgage to bar his grantors of any right in the premises. The defendants claim title through conveyances upon a sale pursuant to the decree in said foreclosure proceedings; while the plaintiff claims that his grantors had a vested interest in the remises covered by the mortgage, which was never cut off by the mortgagee's proceedings, and remained theirs to dispose of. The material facts can be briefly stated: In 1835, William Wagstaff, being the owner of land of which that now in question formed a part, conveyed to Dimond, and received back a purchase money mortgage for $10,000. Dimond then conveyed to Curtis, and on September 28, 1835, Curtis conveyed the land to Stillwell, who on the same day reconveyed it to Clarissa E. Curtis, wife of his grantor. All these conveyances were made subject to the above mortgage, and its payment was assumed by the several grantees. May 1, 1837, Mrs. Curtis, her husband uniting with her, conveyed property, which included the premises, to Eliza Racey, upon certain trusts which I give from the record:

“But in trust, nevertheless, that the said party of the second part and her heirs, shall receive the yearly income, rents, profits and produce of the said lands and premises and apply the same yearly during the natural life of the said Clarissa to the use of the said Clarissa, free, clear, exempt and discharged from all claim, demand, right, control or influence of her husband, the said James L. Curtis, or any husband that she may at any time have, and not to be in any wise subject to his debts, or any lien or charge created by him or any one claiming by, from or under him, but to the sole and separate use of the said Clarissa.

And on the further trust that the said party of the second part and her heirs shall, at the decease of the said Clarissa, convey the said lands and every part of them in fee simple to the children of the said Clarissa, living at her decease, and the surviving children of such of them as may then be dead, in equal portions, per stirpes, and not per capita, that is to say, etc.” …

Meanwhile the mortgage affecting the premises had become the property of George Lovett, who, in September, 1837, commenced foreclosure proceedings. He joined Mr. and Mrs. Curtis, the grantors, and Eliza Racey, the trustee named in the trust conveyance, as parties defendant; but he did not join, as such, certain children of Mrs. Curtis then iving. In 1840 a decree of foreclosure and sale was had. The plaintiff in foreclosure purchased a part of the premises at the sale, and, subsequently, acquired the remainder from another purchaser. By mesne conveyances the interest of Lovett in the land in question became vested in a Mrs. St. John in 1858, and she, and those claiming through her, have had an uninterrupted use and an actual possession since that year.

In November, 1885, the plaintiff purchased and took bargain and sale deeds, without covenants, from children and grandchildren of Mrs. Curtis, of four undivided tenth parts of the land. In the subsequent year Mrs. Curtis died, and then the plaintiff commenced his action.

It is quite evident that whether the proceedings leading to foreclosure and to a sale of the mortgaged property were efficacious to confer a clear title upon the purchaser, as against plaintiff's grantors, is a question to be determined by the legal construction and effect which should be given to Mrs. Curtis' trust deed to Mrs. Racey. If the effect of that deed was to vest a legal estate in remainder, from the time of its delivery, in the children of Mrs. Curtis, then they were necessary parties to the foreclosure proceedings, in order to cut off their rights and the equity of redemption. And this is what the appellant claims to have been the legal effect of that instrument. But if the effect of the trust deed was to vest the whole of the legal and equitable estate in the trustee, subject to the execution of the trust in favor of the grantor, and the reversion remained in the grantor and her heirs until after the termination of the trust estate, and subject only to the execution of the power in trust, then all other interests were suspended meanwhile, and were, of necessity, contingent; and Mrs. Curtis' children, living at the time, acquired no estate in the lands requiring them to be joined as defendants, in order to bar their rights and the rights of others in the class. And this is, substantially, the main position taken by the defendants.

When the property was conveyed to Mrs. Curtis through Stillwell, she became its absolute owner in fee, but subject to the lien of the mortgage referred to. Her power of disposition over it was absolute, and in its conveyance, by the deed to Mrs. Racey, she exercised that power of disposition in the creation of two trusts. The first trust was to receive the rents and profits of the lands and to apply the same to her (the grantor's) use during her life, and it was valid as an express trust, under the revised statutes (1 R. S., 728, § 55, sub. 3). Under that conveyance the grantee, as trustee, was vested with the whole legal and equitable estate, subject only to the execution of the trust imposed, and every estate and interest not embraced in the trust and not otherwise disposed of, by force of the statute, remained in and reverted to the grantor, or creator of the trust and her heirs, as a legal estate (1 R. S., 729, §§ 60, 62).^a1 By the sixty-first section of the statute it is declared that the effect of the sixtieth section, which vests the whole legal and equitable estate in the trustee, shall not be to prevent the creator of a trust from declaring to whom the lands, to which the trust relates, shall belong upon the termination of the trust. This provision, so obviously negative in its character, was undoubtedly intended to prevent a construction of the previous, or sixtieth, section, by which the grantor might be deemed incapacitated from making a disposition of the lands affected by the trust, upon its termination. The section created no new power of disposition, but recognized the existence of a right, which had not been affected by the declaration of the quality of the estate which the trustee of a valid express trust would take. Therefore, Mrs. Curtis, after creating a valid express trust for her life, in proceeding, in the deed, to direct a further disposition of her lands upon the termination of the trust by her own decease, was exercising the legal right which inhered and remained in her, to dispose in a certain way of the legal estate then remaining (§ 62). Had she gone no further than to create the trust for her life, then unquestionably, the reversion as a legal estate would have remained in her and her heirs. That is clear from the statute. But where the difficulty of this case is deemed to arise is in what the creator of the trust directed to be done as to this legal estate, which was hers to dispose of after the termination of the trust. Did she invest...