Schreyer v. Schreyer

This is an action for the partition of certain real property, in which, as permitted by section 1543 of the Code of Civil Procedure, the titles of the respective parties are controverted, and may be determined. The plaintiff claims an undivided three-fourths interest therein in fee, as tenant in common with the defendant Schreyer, which assertion of title all of the defendants except the defendants Gibbins, being mortgagees of the plaintiff, are jointly interested in upholding, while the defendants Gibbins, one of whom is an infant, claim to be the owners, as tenants in common, of the entire fee in the premises. It is conceded by all that on July 8, 1889, one Henrietta E. Guldenkirch (formerly Gibbins), the devisor of the grantor of the plaintiff, and the mother of the defendants Gibbins, was the owner in fee of the premises. On that day, by deed duly acknowledged and subsequently recorded, she conveyed the premises, for a nominal consideration, to one James L. Lowrey, in trust to receive the rents, issues, etc., thereof, to repair and improve the same, to insure them against loss by fire, to discharge liens and incumbrances thereon, to borrow money on the security thereof for that purpose, and to pay the net income therefrom to the grantor during her natural life, and upon her death to convey the property to such of her children as she might leave surviving, and to the issue of any predeceased child or children; the said issue to take the shares their respective parents would have.taken if living at the death of the grantor. The grantor in the said deed expressly reserved to herself the power of revocation and termination of the said trust by written notice executed as conveyances of real estate are required to be executed, but, however, upon the written consent thereto of her husband, executed in the same manner; and the trustee agreed, on receipt of such notice and consent, to convey the premises to the person or persons appointed and designated therein, in which event it was provided that he would be relieved from further liability under the trust without judicial authority or resort to legal proceeding. The trust was accepted upon the reservation and condition expressly stated in the deed that the trustee might, at any time he desired, resign and surrender the trust, and reconvey the property to the grantor, without judicial authority or resort to legal proceeding, and thereby relieve himself from any liability thereafter by reason of the trust.

The husband of the grantor died January 6, 1890, without having given the written and formally executed consent to the exercise by the grantor of. the power of revocation and termination prescribed by the terms of the deed of trust. Subsequently the trustee, describing himself as such, undertook to reconvey to the grantor of the trust individually, for a nominal consideration, the premises in question, by a deed dated, acknowledged, and recorded on August 4, 1891, reciting the former conveyance to him in trust; stating that the trustee desired to-

The plaintiff contends that, either by the failure of the trust deed to become operative because of the neglect of the trustee to do anything under it, and because of the grantor’s continued exercise of control over the property, some evidence of which was offered, or by the terms of the trust deed, reserving the power of revocation and termination by the grantor thereof, and providing for a reconveyance by the trustee, and by the deed of reconveyance delivered by the trustee to the grantor of the trust, in which the exercise of the- power of revocation and termination of the trust is recited, the latter individually remained or again became the owner of the entire fee in the premises, which she could and did devise by will to her executor and trustee in trust for her children, who are now estopped, by their acceptance of the income from the purchase money paid for said premises by the plaintiff to the said executor and trustee, from questioning the validity of the title on the conveyance thereof to the former by the latter under the power of sale contained in the will of the grantor and testatrix. On the other hand, the defendants Gibbins contend that the trust deed created an express trust for the benefit of the grantor and a power in trust for themselves, her children; that, in view of the failure (other than as appears from the mere recital in the deed of reconveyance) of the grantor of the trust to exercise, with the consent of her husband, in the form and manner prescribed by the deed of trust, the right and power of revocation were lost, and that the express trust and the power in trust became irrevocable on the death of the husband; that the trust deed did not contemplate that the deed of reconveyance should, and the deed of reconveyance did not and could not, terminate the trust or affect the power in trust, but, being in contravention of the trust, was utterly void and ineffectual to pass title; that whether the reconveyance by the trustee to the grantor did or di'd not constitute the latter a substituted trustee of the power in

There is no force in the plaintiff’s contention that the trust deed never became operative because of a failure to deliver it, or of the trustee’s neglect to do anything under it, and of the grantor’s continued exercise of complete control over the property. ■ Indeed, the plaintiff cannot be heard to question it, to deny the existence of the facts assumed by it, or of the creation of the trusts declared thereby, for in his complaint he made it one of the foundations of his title, and he introduced it in evidence as part of his case. Bennett v. Garlock, 79 N. Y. 302 , 316, 35 Am. Rep. 517 . However, there is no proof that it was not delivered. • On the other hand, the recital therein that it was sealed and delivered in the presence of two witnesses, the. acknowledgment of its execution by the grantor and the trustee, and the subsequent recording thereof at the request of a stranger thereto, indicate conclusively, in the absence of proof to the contrary, its delivery. Adams v. Adams, 21 Wall. 185 , 22 L. Ed. 504 ; Rathbun v. Rathbun, 6 Barb. 98 . Nor can the continued control of the property and the collection of the rents thereof by the grantor of the trust be urged by the plaintiff against the operation of the trust deed, for these may have been done “at the request or with the permission of the trustee—a very natural agency, since the rents were to be paid to her.” Bliss v. West, 58 Hun, 71 , 11 N. Y. Supp. 374 , affirmed in 132 N. Y. 589 , 30 N. E. 868 ; Wallace v. Berdell, 97 N. Y. 13 , 25. Nor can it be successfully claimed that the express trust and the power in trust were revoked and terminated by the notice from the grantor and the consent of her husband, in the form and manner prescribed by the trust deed. That notice and consent were, by the deed of trust, required to be in writing, and executed by the grantor and her husband “in the same manner as conveyances of real estate are required by law to be executed”; that is, under seal, and subscribed by the party or parties making the same. Furthermore, under the Revised Statutes (1 Rev. St. [1st Ed.] p. 736, part 2, c. 1, tit. 2, § 122),the consent of the husband to the execution of the power of revocation must have been expressed in the instrument executing the power, or in a written certificate thereon, which instrument or certificate must have been signed by the husband, whose consent was made necessary; and by section 273 of the real property law (Laws 1896, p. 617, c. 547) the instrument containing the revocation must have been recorded in the office in which the instrument containing the power was recorded. No such written consent signed by the husband of the grantor, and no record thereof, were produced by the plaintiff; and it must be held, upon the evidence, that the husband died without giving the same. It cannot be contended that because the husband’s connection with the deed of trust may be said to be merely nominal, because he was not a party thereto, took no beneficial interest thereunder, and never assented to the conditions thereof, including that requiring his consent, his

Again, apart from the question of the necessity of the consent of the husband,-the mere recital in the deed of reconveyance that the grantor of the trust had notified the trustee that she had revoked and terminated the trust raises no presumption of the exercise of the power of revocation in the form and manner prescribed by the trust deed. It is the fact of the exercise of the power, and not the mere recital of it, that counts, and the latter is immaterial. Briggs v. Davis, 20 N. Y. 15 , 22, 75 Am. Dec. 363 . Again, because of their infancy at the time of all of the transactions, and in the absence of any fraud or misrepresentation on their part, the defendants Gibbins, one of whom is still an infant, are not estopped from asserting title to the premises by their receipt from their trustee and acceptance of the income of the purchase moneys paid by the plaintiff for said premises. In Ackley v. Dygert, 33 Barb. 176 , it was held that “an infant heir is not, by accepting the money arising from her sale of her estate, and saying she is satisfied with it, after becoming of age, estopped from denying the validity of .the sale.” It is true that in that case (an action of. ejectment) the court said it was unnecessary to determine what a court of equity would decree in a proper action in relation to the moneys received by the infants. See, also, Smith v. Baker, 42 Hun, 504 , 505; Spencer v. Carr, 45 N. Y. 406 , 6 Am. Rep. 112 .

Under our statutes, the effect of the trust deed was to create an express trust for the benefit of the grantor, and a power in trust for the benefit of her children; the latter result being declared by 1 Rev. St. (1st Ed.) p. 729, part 2, c. 1, tit. 2, §§ 58, 59 (Real Property Raw, p. 572,' § 79). The trústee was vested with the whole title, subject to the execution of the trust, which the grantor could enforce in equity (1 Rev. St. [1st Ed.] p. 729, part 2, c. 1, tit. 2, § 60), but which she could not alienate (Id. p. 730, § 63), even with the authority of the court. Lent v. Howard, 89 N. Y. 169 . She retained, however, every estate or interest embraced in the trust and not otherwise disposed of (1 Rev. St. [1st Ed.] p. 729, part 2, c. 1, tit. 2, § 62), with the right of declaring to whom the property should belong in the event of the failure or termination of the trust, or to grant or devise the property, subject to the execution of the trust, to a grantee or devisee who would have a legal estate as against all persons, and, except the trustee, those claiming under him (1 Rev. St. [1st Ed.] p. 729, part. 2, c. 1, tit. 2, § 61).

It must be conceded, under the authority of Watkins v. Reynolds, 123 N. Y. 211 , 25 N. E. 322 , that, in the absence of any provision for, and of the actual execution and delivery of, a deed of reconveyance to her by the trustee, and in view of her failure to exercise the power of revocation with the consent of her husband, the statute would, upon her death, immediately execute the power, and vest the legal and equitable title in her children, without the necessity of an actual, formal conveyance to them by the trustee. It seems to me, however, that the provision in the trust deed for a reconveyance by the trustee, and an actual reconveyance, in accordance therewith, before the death of the grantor, render the principle of the last-cited case inapplicable, and prevented the operation of tide statute, and the subsequent devise of the property by the grantor of the previous trust therein make the following language of the court in Townshend v. Frommer, 125 N. Y. 466 -468, 26 N. E. 810 , applicable:

“From the language of the trust clause, it is evident that the grantor, Mrs. Curtis, desired, in the first place, to assure to herself, by placing the estate in another’s hands as trustee, beyond the risks attendant upon her husband’s acts or business, and beyond his influence and control, a life income from the estate; and, in the next place, after her life had ended, if any of her children should then be living, or any survivors of deceased children, that they should have .it divided among them. She could have effected this latter purpose by a direct gift, or grant in remainder, contained in the instrument, or she could do it, as it was done, by adding another trust to that already created, namely, by empowering her trustee to convey the lands after her decease, in the due proportions, to her children. There does not seem to be any confusion in the thought that she as deliberately purposed, as she as deliberately’ expressed herself in language, that during her life the whole estate should be in the trustee, for her sole use and benefit, and that all other interests should be in abeyance until the happening of her death, by which the trust estate would terminate, as the event upon which limited, and when her trustee might dispose of it by conveying it to the then ascertained members of a class named. Has she not intended, in so alienating her estate, while securing to herself a life income, as well, to assure herself that after her death, and not until then, those of her children who survived her, or the descendants of any pre

deceased children, should be -benefited by it, and derive enjoyment or support from its possession ? What rule of law prevents our affectuating an intention which is so cogent and coercive, and compels us to hold that, from the delivery of the grant to the trustee, the children of the grantor were vested with a- legal estate in remainder? Why shall we not say that here the grantor intended to, and did, create a trust to convey the estate to certain persons, who were only to be determined upon the happening of the event of her death —a disposition executory, and not executed, in its nature, in the ordinary use of these terms, and enforceable as a power in the trustee, however unnecessary to the vesting of the estate, at the time when the power might be exercised by the trustee, the actual exercise of the power would be? Because the statute would operate to execute the use in the intended beneficiaries of the power does not answer the question. Though the statute will execute the use, when the trustee might or should execute the power, the statute does not operate before that time. If the trustee cannot, by the terms of his trust, exercise his power until the happening of the event which liberates it, the statute is not previously moved. It cannot operate upon the subject of the power before the power, by its terms, is itself operative. Now, this is just the difficulty which such a power in trust raises in the way of the vesting of a future estate. It is executory, in the sense of calling for the performance of an act in the future which the donor might have performed, but which he directs to be done after his death by the trustee, in a certain mode, to be determined at the time of performance by the facts then ascertained. It is necessarily inoperative until the happening of the future event.”

The court further says at page 469, 125 N. Y., page 811, 26 N. E.:

“Where such a power in trust follows in a grant upon the creation of an authorized express trust, I think the true principles of construction underlying the question of interests to be that during the continuance of the preceding trust estate the whole title is in the trustee, subject to the execution of the trust, and that the reversion is in the grantor and his heirs, subject to the execution of the power in trust; that the disposition of the estate after the grantor’s death, by way of a power in trust to convey to members of a class who may then be ascertained, gives to any then existing individuals who might fall within the description of the class an interest purely contingent as well as future in its nature; and that the destruction of the estate in the grantor and trustee, as by proceedings in equity to foreclose a prior mortgage, destroys it, as to the intended beneficiaries of the power in trust, by preventing the operation of both power and statute, through which alone their interests would come.”

And at page 470, 125 N. Y., page 811, 26 N. E.:

“Our conclusion is that at the time of the foreclosure proceedings the then living children of Mrs. Curtis did not have any estate in the lands in question, and their equitable interests were all in abeyance. The whole estate was transferred to the trustee, and every interest not embraced in the trust remained in the grantor. Until her death terminated the estate in the trustee, no estate could vest in any others. The happening of the event which would render the trust power to convey enforceable in favor of persons then ascertained would set in operation the statute, and vest the estate in those persons; but, as meanwhile she and her trustee had been divested of the estate, none remained to which future interests might attach.”

In Bennett v. Garlock, 79 N. Y. 302 , 35 Am. Rep. 517 , the question concerned the nature and tenure of the plaintiff's interest in a trust estate which her parents had created by deed to trustees upon trusts to sell for the payment of debts, to apply net profits for the support of the grantors during .their lives and the life of the survivor of them, and to hold the residue for such persons as shall be the right heirs of the grantors at the time of the death of the survivor of them. It was held that she took merely an equitable interest in the estate, and that, if the estate of the trustees is defeated in any way, the remainder must be de

It is contended that the provision of the trust deed providing for a reconveyance by the trustee did not contemplate and could not affect a termination of the trust, but only a resignation by the trustee, a surrender of the trust, and a reconveyance by the trustee, with the effect that he would be relieved from any further liability. It is true that the language employed is not as definite as it might have been for a full and accurate statement of the intentions of the grantor. But this contention is overcome by the construction which I have given to the trust deed, as above stated. The resignation and surrender were not to be affected by the reconveyance, which was a separate and independent act of the trustee, and contemplated by the'trust deed. The conveyance, to the parties designated in the notice of and consent to the conditional power of revocation and termination reserved by the grantor, was to relieve the trustee from further liability under the trust, without judicial sanction, and the resignation, surrender, and reconveyance by the trustee were in like manner to free the trustee from all subsequent liability in like manner. The effect upon the liability of the trustee w..-s to be the same, and, indeed, would arise from any resignation and accounting up to the date thereof; and the parties evidently used the other language employed—the power to “revoke and terminate the trust, and to appoint and designate the persons to whom the property should be conveyed,” and the right granted the trustee “to resign and surrender and reconvey the property”—with the intention that they should have the same effect upon the trustee’s liability and the common effect of authorizing a transfer of the title, in one case, however, to the persons designated, and in the other to the grantor. Nor can it be contended that the reconveyance to the grantor by the trustee was contrary to the conditions of the trust, or in contravention thereof, and therefore ineffectual and void. The answer thereto is that, on the contrary, the trust was expressly granted and accepted subject to the condition that he might so reconvey. "It is claimed, too, that the trustee could not resign his trust without leave of the court. It is held, however, in Cruger v. Halliday, 11 Paige, 314, that a trustee, after accepting the trust, must either be discharged from the.trust by virtue of-a special-provision in the deed or will which creates the trust, or by an order or decree of the court of chancery, or with the general consent of all persons interested in the execution of the trust. The deed here does provide for resignation and for discharge from such liability as the court itself could decree, viz., from “further” or subsequent liability after the trustee made -either the conveyance or reconveyance provided for"by trust deed; and the provision for resignation and the rules of law applicable thereto are, •so far as the title is concerned, separate and distinct from those providing for the reconveyance. Finally, there is no force in the contention -of the defendants that the reconveyance to the grantor by the trustee

For these reasons, judgment must be rendered for the plaintiff to the effect that he and the defendant John F. Schreyer have title to the premises in fee simple as tenants in common, in the proportion of three-fourths and one-fourth, subject to the lien of the mortgages of the other defendants, as stated in the complaint, and to the dower right in one-fourth of the defendant Mary Schreyer. Costs must be awarded against the adult defendants Elizabeth and John F. Gibbins, who have so strenuously contested the title.