Lahey v. Kortright

• Decision Date: 26 April 1892
• Parties: LAHEY v. KORTRIGHT et al. MARSHALL v. KORTRIGHT.
• Court: New York Court of Appeals Court of Appeals

132 N.Y. 450

30 N.E. 989

LAHEY

v.KORTRIGHT et al.

MARSHALL

v.KORTRIGHT.

Court of Appeals of New York, Second Division.

April 26, 1892.

Appeal from superior court of New York city, general term.

Two actions, one by Francis Lahey and the other by James Marshall, against Gouverneur Kortright and others, brought to relieve plaintiffs from the obligation of contracts to purchase land from defendants. From a judgment of the general term affirming a judgment in favor of defendants, plaintiff in each case appeals. Affirmed.

POWERS IN TRUST-SUBSTITUTION OF TRUSTEES.

1. Testator directed his executors, after payment of debts, to divide his estate into shares, and to convey one share to each legatee, and to hold another share in trust for each legatee. The will further provided as follows: ‘I give my executors full power and authority in regard to the investment of my said estate, and for this purpose they are authorized to sell and convey any or all of my real and personal estate, and, after payment of my debts as hereinbefore provided, to invest the proceeds as they might think best.’ Held, that the executors took, as trustees, a power of sale attached to the trust, which could be exercised by trustees appointed in place of the executors.

POWERS IN TRUST-SUBSTITUTION OF TRUSTEES.

2. Trustees appointed by a will refused to accept, whereupon the supreme court appointed one C. to execute the trust. Afterwards C. was discharged on his own petition, and the court appointed defendants to hold the estate in trust for the beneficiaries, but without limiting their powers as such trustees, or defining the manner in which they should execute the trust. Held, that the appointment of defendants was not an exercise of the general equity powers of the court, but was pursuant to 1 Rev. St. p. 730, s 71, authorizing the court ‘to appoint a new trustee in place of a trustee resigned or removed,’ and defendants took all the powers conferred by the will on the original trustees. 11 N. Y. Supp. 47, affirmed.

Esek Cowen and S. Jones, for appellant.

John M. Bowers, for respondents.

The other facts fully appear in the following statement by BRADLEY, J.:

The purpose of the action was to relieve the plaintiff from a contract for the purchase of certain premises in the city of New York designated as ‘Lots Nos. 430, 432, 434,’ on West Thirty-Fourth street, and to recover 10 per cent. of the purchase money paid, also certain charges for auctioneer's and salesroom fees and expenses of examining the title, upon the alleged ground that the defendants were unable to give a good title. The trial resulted in a judgment for the defendants, and for specific performance by the plaintiff.

BRADLEY, J., ( after stating the facts.)

The subject of controversy has relation to the power of the defendants Kortright, as trustees, to sell and convey the premises in question. If they possessed adequate power in that respect, the plaintiff was properly required by the judgment to complete the purchase; otherwise he was entitled to the relief sought by the action. The disposition of the question is dependent somewhat, and mainly, upon the provisions of the will of Nicholas G. Kortright, which was admitted to probate in April, 1874. By it, after directing payment of his debts and funeral expenses, and satisfaction of his bequest of household furniture, books, and plate to his wife, the testator provided that the residue of his property, real and personal, should be equally divided between his wife and children; and directed his executors to divide such residue into as many equal shares as should be necessary to give to each two shares, to convey one of such equal shares to each of them, and to retain the residue of such equal shares in trust for the benefit of his wife and children, and pay to each of them during their natural lives, respectively, the interest or income of one of such shares. He further directed that, upon the death of any of those persons, the portion of his or her share remaining in the hands of the executors should be divided equally among his surviving children, and the lawful issue of such of his children as then may have died. And following these provisions were those of the eleventh clause, as follows: ‘I give my executors full power and authority in regard to the investments of my said estate, and for this purpose they are authorized to sell and convey any or all of my real and personal estate, and, after the payment of my debts as hereinbefore provided, to invest the proceeds in other real estate or in personal securities as they, in their discretion, may deem most for the interest of the parties interested in my estate;’ and he nominated and appointed two persons, Minturn and Blunt, executors and trustees. They renounced, and letters of administration with will annexed were issued to Sarah J. Kortright, the widow, and Benjamin Collins. Gouverneur and Lawrence M. Kortright were the only children of the testator, and, with the widow, constituted the beneficiaries of the residue, as mentioned in the will. By judgment in an action for partition, and for the appointment of a trustee in place of those who had so renounced, Benjamin Collins was appointed such trustee; and lot 434 West Thirty-Fourth street, with other land, was set off to Collins as trustee of Lawrence M. Kortright, and lots 430 and 432 West Thirty-Fourth street, with other land, were set off to him as trustee of Gouverneur Kortright. Several years afterwards, upon petition of Collins, in which the beneficiaries joined, he was by the court permitted to surrender the trusts, and was released and discharged therefrom. And subsequently Lawrence M. was appointed trustee of the share of his brother, Gouverneur Kortright, and the latter was appointed trustee of the respective shares of the widow and Lawrence M. Kortright, and conveyance was made to them as such trustees by Collins, their predecessor in the trust, of the lands not disposed of while he was trustee. These proceedings were regularly and duly had to invest the new trustees with the title to the lands which were the subject of the trust, and embraced in them were lots 430, 432, and 434 West Thirty-Fourth street, the lands in question; and the defendants, as such trustees, caused to be made the sale from which the plaintiff seeks to be relieved. He is entitled to such relief, unless the trustees are able by their conveyance to give him a marketable title, which is a title free from reasonable doubt. Fleming v. Burnham, 100 N. Y. 1, 2 N. E. Rep. 905; Irving v. Campbell, 121 N. Y. 353, 24 N. E. Rep. 821; Kilpatrick v. Barron, 125 N. Y. 751, 26 N. E. Rep. 925.

The well from which the power of the trustees is derived created an express trust, within the meaning of the statute, as it provided for the receipt by them of the rents and profits or income of lands, and the payment of the same over to the beneficiaries during their lives. 1 Rev. St. p. 728, § 55. And for that purpose the trustees took title to the landsembraced within the trust. Id. p. 729, § 60; Brewster v. Striker, 2 N. Y. 19; Leggett v. Perkings, Id. 297. This was the situation of the shares in the lands set apart for that purpose. The trustee Collins was succeeded in the title by the new trustees to the lands so held by him at the time he reiinquished the trust.

It is, however, insisted on the part of the plaintiff that neither the trustee Collins nor his successors in that relation took any power of sale under the will. The determination of this question depends upon the construction and application of...