Shindler v. Robinson

This is an appeal from a judgment foreclosing a mortgage on certain real estate in the village of Tarry town and

“And upon the further trust on the death of my said' daughter Cornelia Caroline * * * to convey the property in this. article of my will mentioned to Simon W. Sencerbox, James W. Danforth, Cornelia Jacobina Robinson and Clarence R. Robinson, the children of my said daughter Cornelia Caroline, or such of them and such other children as she may leave her surviving at the time of her death in fee simple absolute in equal portions.”

Then follows a power of sale to the executors during the term of the life estate, with provisions amounting to a direction to hold the proceeds upon the same trust as that under which the realty was to be held.

By the sixth article of the will, the Point Dock property was devised in trust to the executors to pay the income to the testator’s daughter, Cornelia C. Robinson, during her lifetime, and upon her death the corpus of the trust estate was to be disposed of in the same manner as the corpus of the trust estate created by the fourth article.

By the fifth article, the testator directed the executor to sell the Stone Yard property, and to apply the proceeds of such sale to the payment of any mortgage on the property devised in 'trust by the fourth article of thq will. There was a mortgage of $5,000 on that trust property. The Stone Yard property has never been sold, and the mortgage on the trust estate has never been satisfied.

By the seventh article of the will, the testator gave another son, James Shindler, “all the rest and residue” of his estate, “real and personal and effects whatever of whatever description and wherever situated not hereinabove otherwise devised, bequeathed or appropriated.”

On the 27th day of March, 1893, Cornelia C. Robinson, the life beneficiary of said trust estates, and the remaindermen, executed the mortgage in question upon the trust real estate and the Stone Yard property to James Shindler.

On-the 5th day of April, 1893, James Shindler and his wife, the plaintiff herein, executed a deed to Cornelia C. Robinson and the remaindermen. By this deed James Shindler granted and-released unto them so much of the real estate heretofore referred tp as vested "in him under and by virtue of the residuary clause of the-will. The habendum clause provided that Cornelia C. Robinson was to' have and to hold the premises for and during her natural life, and that upon her death

On May 24, 1898, James Shindler duly assigned the mortgage, to his wife, Juliette Shindler, who thereafter instituted this.action to foreclose the same. From the judgment of foreclosure directing a sale of the mortgaged premises, said Cornelia C. Robinson, life beneficiary of the trust estates, and the living remaindermen and the representatives of all the deceased remaindermen, have appealed, claiming that the mortgagors had no mortgageable interest in the premises covered by the mortgage.

The learned trial court in its first conclusion of law held that the Stone Yard property had been equitably converted to personalty by the peremptory direction for its sale, contained in the fifth article of. the will. All the parties to this appeal concede the correctness of that conclusion. Nevertheless, the counsel for the plaintiff, respondent, claims that the appellants had a mortgageable interest in that property, and that the property could be sold upon the foreclosure of the mortgage, subject to the power of sale in the executors. Neither the property directed to be sold by the will nor the proceeds thereof is specifically given to any of the mortgagors by the terms of the will.

[1] The executors are directed to sell the property and apply the proceeds to the payment of a mortgage on the trust estate. None of the appellants have sufficient interest in such property to create a mortgage lien upon it enforceable by foreclosure and sale. Stake v. Mobley, 102 Md. 408 , 62 Atl. 963 ; Walker v. Killian, 62 S. C. 482 , 40 S. E. 887 ; Chick v. Ives, 2 Neb. (Unof.) 879 , 90 N. W. 751 . In State v. Mobley, supra, the facts were much more favorable to the validity of the mortgage» than they are in the case at bar. There the mortgage had been executed by one to whom the proceeds of the equitably converted real estate had been given by the will. Nevertheless the court held that such beneficiary could not create a mortgage lien upon the realty which had been converted-to personalty by a power of sale. Of course, in the case at bar it may be that the mortgage would operate in equity as an assignment of any interest that any of the mortgagors may have in a surplus, if any, left after the payment of the mortgage directed to be paid. It is not, however, necessary to determine in this case whether such surplus would pass to the testator’s heirs at law, next of kin, or residuary devisee, as none of them has a present mortgageable interest in the equitably converted real estate.

[2] The trusts created by the fourth and sixth articles of the will are express trusts to receive the rents and profits of real estate, and to apply the same to the use of Cornelia C. Robinson during her lifetime. She had no interest or estate in the land as such by virtue of the trust (Noyes v. Blakeman, 6 N. Y. 567 ; Laws 1909, c. 52 [Consol. Laws, c. 50, § 100]); and she could not convey her beneficiary interest (Laws 1909, c. 52, § 103).

The property, therefore, if sold under mortgage foreclosure, must be sold subject to the trust estate in the trustees, who are not parties to

[3] The children of the life beneficiary are given contingent remainder interests in the trust estate. ( The language of the will is that upon the death of the life beneficiary the executors are to convey the trust estate to the designated children of the life beneficiary, “or such of them and such other children as she may leave her surviving at the time of her death in fee simple absolute in equal portions.” In reaching the conclusion that "these remainder interests are contingent rather than vested, no special significance has been accorded to the fact that the direction to the executors is “to convey” the property to the remaindermen. Such a direction would not necessarily be inconsistent with the vesting of the remainder interests upon the testator’s death. Campbell v." Stokes, 142 N. Y. 23 , 36 N. E. 811 .

[4] The intention of the testator, as deduced from the entire instrument, is the primary canon of construction in determining whether the interests are vested or contingent. It would seem difficult for the testator in 'the case at bar to have chosen language more plainly indicative of an intention to suspend the vesting of the remainder interests until the death "of the life beneficiary. The executors áre directed to convey to the designated children of the life beneficiary “or such of them and such other children as she may leave her surviving at the time of her death.” - The death referred to is" specifically stated to be the death of the life beneficiary, and the gift is only to those children who shall be living at the time of that death. Under such circumstances it is quite obvious that futurity was annexed to the substance of the gift, and that the remainder interests are contingent rather than vested.

[5] At common law, contingent remainders were interests or possibilities, rather than estates (Fowler, Real Property [3d Ed.] p. 209); andl for a time they were not supposed to be the subject of alienation (Washburn, Real Property [6th Ed.] vol. 2, § 1557). Finally, however, it was held that such interests were inheritable or devisable, could be assigned in equity and released at law to an owner of the land in possession, or transferred to strangers by resort to the doctrine of estoppel. Reeves, Real Property, Special Subjects, § 608.

[6] By the Real Property Law, contingent remainders are classified as expectant future estates and are declared to be “descendible, devisable and alienable, in the same-manner as an estate in possession.” Laws 1909, c. 52, §§ 35, 36, 37, 38, 59. Thus by the mandate of the statute such contingent interests now, with few exceptions, are descendible, devisable, and alienable. See Moore v. Littel, 41 N. Y. 66 ; Hennessy v. Patterson, 85 N. Y. 91 ; and Kenyon v. See, 94 N. Y. 563 . Of course, where the contingency upon which the remainder is to -vest is'iri respect to the p.erson who is to take rather than the event, the

That such a right is alienable, and consequently mortgageable, was held by the United States Circuit Court for the Southern District of New York, in the case of Ward v. Ward (C. C.) 131 Fed. 946 , affirmed 145 Fed. 1023 , 74 C. C. A. 146 . There it appeared that a testator left his residuary estate in trust to his executors with a direction to pay the income to a beneficiary during life and upon the beneficiary’s death to divide the principal equally among three cousins of the testator. The will further provided that the children of any cousin dying before the termination of the trust should take in the deceased cousin’s place, and that, if a cousin should die leaving no children,- the estate should be divided among the surviving cousins or their children. The court held that each of the cousins took a contingent estate in expectancy, and that, although such contingent estate was from the nature of the attached contingency neither descendible nor devisable, it was alienable under the statute and could be mortgaged. Judge Cox, writing for the court, said (page 950 of 131 Fed.):

“It may well be that the estate in question is not devisable for the reason that the event which makes the will operative—the death of the testator— defeats the estate. For the same reason it is not descendible; it remains an expectant estate only during the life of the beneficiary, and, as such an estate, it cannot descend because the death of the intestate, before that of the beneficiary, terminates it. But why may it not be alienated? Such an estate has a tangible present value. It may be sold and property which may be sold may be mortgaged. Can there be any doubt, if the complainant had sold his interest for a valuable consideration, that the vendee would not be entitled to complainant’s share? If he had mortgaged or pledged his interest, would not the purchaser on foreclosure be entitled to the same right? The trust estate was in esse, and the beneficiary was well advanced in years. The only risk the purchaser of such an interest would incur would be the chance that the beneficiary would outlive the remainderman. In the due course of nature this would be an unlikely event. Like a life policy, the complainant’s interest possessed an actual existing value. To hold that it was incapable of disposition and worthless in the hands of the transferee seems to run counter to the progressive spirit of the law, the tendency of which is to limit the suspension of the power of alienation within as narrow bounds as possible.”

Thus in the case at bar the remaindermen’s contingent interests, although neither descendible nor devisable, were alienable under the statute, and the mortgagee upon such interests is valid. Of course, such mortgage or the purchaser’s title at the foreclosure sale would be rendered void by the death of the contingent remaindermen before the life beneficiary. See Jones on Mortgages, vol. 1, § 137. That fact, however, only affects the value of the mortgage as security, and -does not impair or destroy the right to its creation as a legal document.

[7] Considerable space has been devoted in the briefs to a consideration of the effect of the deed given to the mortgagors by James Shindler. It does not appear whether he is now living. He is not a party to this action, and consequently will not be bound by any judgment rendered herein. His deed does not in terms purport to convey any interest in the estate that might come to him as one of the heirs at law of the testator. It purports to convey merely such interest in the mortgaged premises as may have vested in him by virtue of the residuary clause of Simon Shindler’s will. Should all the remaindermen predecease the life beneficiary, in view of the inclusive nature of the residuary clause, it may be that the entire trust estate would ultimately pass to James Shindler as residuary devisee (see Matter of Allen, 151 N. Y. 243 , 45 N. E. 554 ; Smith v. Smith, 141 N. Y. 29 , 35 N. E. 1075 ; and Toerge v. Toerge, 9 App. Div. 194 , 41 N. Y. Supp. 244 ), and that his deed has conveyed that right as residuary devisee to the mortgagors. In the discussion of this matter upon the briefs submitted by the appellants and the respondent, it is assumed that James Shindler’s deed was executed prior to the execution of the mortgage. In the record it appears that the mortgage was executed on March 27, 1893, ■ and the deed afterwards, on April 5, 1893. It would seem questionable, therefore, even assuming the deed to have passed any rights in the mortgaged premises to the mortgagors, whether such rights were covered by the mortgage. In any event, as has been said, the judgment in this action cannot bind James Shindler, who is not a party.

[8] Should the trust property, on the other hand, not pass under the residuary clause upon the deaths of the contingent remaindermen prior to the life beneficiary, it would be distributable among the testator’s heirs at.law as of the time of the testator’s death (Van Nostrand v. Marvin, 16 App. Div. 28 , 44 N. Y. Supp. 679 ), and a portion thereof, on that theory, would vest in James Shindler and in said Cornelia C. Robinson, as such heirs at law; and that interest of Cornelia C. Robinson would probably pass by the mortgage.

It follows that the judgment should be modified by excluding the Stone-Yard property from the premises to be sold, and by inserting a provision that the sale be made subject to the trusts created by the fourth and sixth articles of the will of Simon Shindler, deceased; and ■as so modified the judgment should be affirmed, without costs. All concur..