Doctor v. Hughes

Citation225 N.Y. 305,122 N.E. 221
PartiesDOCTOR et al. v. HUGHES et al.
Decision Date14 January 1919
CourtNew York Court of Appeals

OPINION TEXT STARTS HERE

Appeal from Supreme Court, Appellate Division, First Department.

Action by Augusta Doctor and others against Augustus S. Hughes and others. From a judgment of the Appellate Division (174 App. Div. 767,161 N. Y. Supp. 634), which reversed a judgment of the Special Term in favor of the plaintiffs, and dismissed the complaint upon the merits, plaintiffs appeal. Affirmed.

1. TRUSTS k140(3)-ESTATE OF CESTUI QUE TRUST-REMAINDER-REVERSION.

Where a trust deed provided for payment of a yearly sum to the grantor, gave the trustee power to sell or mortgage, and provided that upon death of grantor the trustee should ‘convey the said premises * * * to the heirs at law of the party of the first part,’ the heirs under Real Property Law, s 102, did not take by purchase, but simply by descent; anything left not being a vested remainder, but a reversion, and neither the rule in Shelley's Case nor the statute abrogating the rule (Real Rpoperty Law, s 54) applying.

2. TRUST k153-TITLE GRANTED-REVERSION.

Reservation of a reversion is not inconsistent with creation of trust to continue until death of reversioner.

Mark G. Holstein, of New York City, for appellants Doctor and others.

James Frank, of New York City, for appellant trustee in bankruptcy.

Joseph Day Lee, of New York City, for respondents.

CARDOZO, J.

The action is brought by judgment creditors to subject what is alleged to be an interest in real property to the lien of a judgment.

In January, 1899, James J. Hanigan conveyed to a trustee a house and lot in the city of New York. The conveyance was in trust to pay from the rents and profits to the use of the grantor the yearly sum of $1,500. The payments might, however, exceed that sum in the discretion of the trustee. Direction was also made for the payment of some debts, and for the payment of two mortgages, then liens upon the property. The trustee was empowered to mortgage, in order to pay existing liens, or to carry into effect the other provisions of the deed. He was also empowered to sell. Upon the death of the grantor, he was to ‘convey the said premises (if not sold) to the heirs at law of the party of the first part.’ In case of a sale, he was to pay to the heirs at law ‘the balance of the avails of sale remaining unexpended.’ He was authorized at any time, if he so desired, to reconvey the premises to the grantor, and thus terminate the trust.

[1] At the trial of this action, the grantor was still alive. His sole descendants were two daughters. By deed executed in June, 1902, one of the daughters, Mrs. Hughes, conveyed to her husband all her interest in this real estate. Judgment against Mr. and Mrs. Hughes for upwards of $4,000 was afterwards recovered by the plaintiffs. The question to be determined is whether either judgment debtor has any interest in the land. The Special Term held that there passed to Mr. Hughes under the conveyance from his wife an estate in remainder which was subject to the claims of creditors. The Appellate Division held that the creator of the trust did not intend to give a remainder to any one; that his heirs at law, if they receive anything on his death, will take by descent, and not by purchase; and hence that there is nothing that creditors can seize.

We reach the same conclusion. The direction to the trustee is the superfluous expression of a duty imposed by law. ‘Where an express trust is created, every legal estate and interest not embraced in the trust, and not otherwise disposed of, shall remain in or revert to, the person creating the trust or his heirs.’ Real Property Law, § 102. (Consol. Laws, c. 50). What is left is not a remainder (Real Property Law, § 38), but a reversion (Real Property Law, § 39). To such a situation neither the rule in Shelley's Case (1 Coke Rep. 104), nor the statute abrogating the rule (Real Property Law, § 54), applies. The heirs mentioned in this deed are not ‘the heirs * * * of a person to whom a life estate in the same premises is given.’ Real Property Law, § 54. The life estate belongs to the trustee. The heirs are the heirs of the grantor. There is no doubt that a gift to A. for life, with remainder to A.'s heirs, gives to such heirs a vested, though defeasible, estate. Moore v. Littel, 41 N. Y. 66;Clowe v. Seavey, 208 N. Y. 496, 502,102 N. E. 521,47 L. R. A. (N. S.) 284. But here the question is not whether a remainder is contingent or vested. The question is whether there is any remainder at all. In the solution of that problem, the distinction is vital between gifts to the heirs of the holder of a particular estate, and gifts or attempted gifts to the heirs of the grantor. ‘A man cannot, either by conveyance at the common law, by limitation of uses, or devise, make his right heir a purchaser.’ Pilus v. Milford, 1674, 1 Vent. 372; Read v. Erington, 1594, Cro. Eliz. 322; Bingham's Case, 2 Co. Rep. 91a. 91b; Cholmondaley v. Maxey, 12 East, 589, 603, 604. ‘It is a positive rule of our law.’ Hargrave's Law Tracts (1787) p. 571. ‘If a man make a gift in taile, or a lease for life, the remainder to his own right heirs, this remainder is void, and he hath the reversion in him; for the ancestor during his life beareth in his body (in judgment of law) all his heires, and therefore, it is truly said that haeres est pars antecessoris.’ Co. Litt. 22b. To the same effect are all the commentators. 1 Fearne, Contingent Rem. 21; 2 Fearne, 205 (section 389); 2 Washburn on Real Prop. (6th Ed.) § 1525; Vin. Abr. Rem. A, p. 11; Bacon, Abr. Uses, B2; Gilbert, Uses, 20; Preston on Estates, 291; 24 Halsbury's Laws of England, pp. 213, 214. The heirs have a mere expectancy, spes successionis (Matter of Parsons Stockley Parsons, L. R. 45 Ch. D. 51, 55), which may be barred by deed or will. This rule, that a reservation to the heirs of the grantor is equivalent to the reservation of a reversion to the grantor himself, is not to be confused with the rule in Shelley's Case. The two are quite distinct. Alexander v. De Kermel, 81 Ky. 345, 351, 352. The one ‘applies only to the acts of an ancestor as between him and his own heirs.’ Hargrave, supra. The other is confined to the limitation of estate of inheritance to the heirs of a person who has taken under the same instrument a prior estate of freehold (Campbell v. Rawdon, 18 N. Y. 412, 420; 29 L. R. A. (N. S.) 1016.

[2] At common law, therefore, and under common-law conveyances, this direction to transfer the estate to the heirs of the grantor would indubitably have been equivalent to the reservation of a reversion. In England, the rule has been changed by statute. The Inheritance Act of 1833 provides (3 & 4 Wm. IV, c. 106, § 3) that--

‘When any land shall have been limited by any assurance * * * to the person or to the heirs of the person who shall thereby have conveyed the same land, such person shall be considered to have acquired the same as a purchaser by virtue of such assurance, and shall not be considered to be entitled thereto as his former estate or part thereof.’

But in the absence of modifying statute, the rule persists to-day, at least as a rule of construction, if not as one of property. There are modern instances of its application to facts hardly to be distinguished from those of the case at bar. Alexander v. De Kermel, 81 Ky. 345;Akers v. Clark, 184 Ill. 136, 56 N. E. 296,75 Am. St. Rep. 152;Hobbie v. Ogden, 178 Ill. 357, 53 N. E. 104;Robinson v. Blankenship, 116 Tenn. 394, 92 S. W. 854. The reservation of a reversion is not inconsistent with the creation of a trust to continue until the death of the reversioner. Doane v. Mercantile Trust Co., 160 N. Y. 494, 55 N. E. 296;Matter of Asch, 75 App. Div. 486, 495,78 N. Y. Supp. 561. We do not say that the ancient rule survives as an absolute prohibition limiting the power of a grantor. At the outset, probably, like the rule in Shelley's Case (Webb v. Sweet, 187 N. Y. 172, 176,79 N. E. 1024), it was a rule, not of construction, but of property. But it was never applied in all its rigor to executory trusts (Sackville-West v. Holmesdale, L. R. 4 H. L. 543; Cushing v. Blake, 30 N. J. Eq. 689; Locke v. Southwood, [225 N.Y. 312]1 My. & Cr. 411; Trevor v. Trevor, 1 P. Wms. 622, 631, s. c., 1 Eq. Cas. Abr. 387, 391, affirmed 5 Bro. P. C. 122; 29 L. R. A. [N. S.] 1136; Watkins on Descents, p. 145; Fearne, Cont. Rem. p. 145; Halsbury, supra, p. 214), which were ‘molded by the court as best to answer the intent of the person creating them’ (Watkins, supra).

We may assume that this is the principle that would control the courts to-day. Executory...

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