Gregan v. Buchanan

—In cases involving the acts of persons long dead, - it is well for the court to primarily consider the evidence, with the intent of deducing therefrom the relation of such parties in their lifetime, and the acts and circumstances surrounding the transactions between them, for the purpose of more clearly understanding and appreciating their actions. While this course may not of itself enable the court to render judgment, it still serves to throw, light upon the subject-matter involved, and so guides to correct conclusions.

The action is brought to set aside certain conveyances of realty, both fee and leasehold,.situate on the northwesterly corner of Forty-Second street and Seventh avenue, in this city. Prior to the year 1868 the title was in Thomas Gregan, who died intestate and insolvent on January 4,1868, leaving, him surviving, a widow and one son, Edward T. Gregan. The defendant’s testator, John McB. Davidson, was appointed and qualified as administrator of his estate, and as guardian of the person and estate of the son, in January of same year. At the decease of Thomas Gregan, the premises held by him in fee were incumbered by mortgages assumed and executed by him, with taxes and more or less interest '

It may be advisable to here refer to.the facts proven in the record tending to show the relationship which would seem to have existed between Thomas Gregan and John McB. Davidson, when the former held the title to and possession of the premises. On May 24, 1867, after the foreclosure suit was brought by the Albany Qity Fire Insurance Company against Thomas Gregan and others, Thomas Gregan conveyed the premises in fee to Davidson,

I do not find in the record any proof of fraud practiced by Davidson in the course of the foreclosure suits and the proceedings for sale of the leasehold. In the latter the allowances were excessive, but the court had power to make them, and their grants do not in any degree tend to establish actual fraud. The court had undoubted jurisdiction in the proceedings, and, although counsel for plaintiff declares the orders to be void, he fails to support the assertion by giving specific reasons in fact, or citing authorities to support the contention. There is no evidence in the case to show but what the properties on public judicial sales brought their full value. On the part of defendants, the evidence of Harnett supports the conclusion that all they were then worth was realized. It seems undisputed and indisputable that Thomas Gregan, at his death, was insolvent. The counsel for plaintiff fervently depicts the position of the ward, Edward T. Gregan. From the testimony, the position of Davidson seems to have been one of difficulty. He was the administrator of an insolvent’s estate, himself the holder of large claims, and under large liabilities as guarantor of the bond and mortgage held by the insurance company in process of foreclosure, as indorser of the series of notes covered by the collateral agreement, and holder by assignment of judgments recovered against the intestate in his

The primary inquiry is whether the conveyances to him were void or voidable by his ward, Edward T. Grregan, after becoming of age. The rule is definitely fixed. Purchase made by a trustee of trust property, for his own interest, is not void ab initio, but voidable at the election of the cestui que trust. Dodge v. Stephens, 94 N. Y. 209 ; Munson v. Syracuse, G. & C. R. Co., 103 id. 58; 3 St. Rep. 31 ; Barr v. N. Y., L. E. & W. R. Co., 125 N. Y. 263 ; 34 St. Rep. 743 . While such purchase is so voidable, the liability to such result does not rest indefinitely upon the trustee. It may cease from acquiescence, lapse of time, or express act of the cestui que trust. Johnson v. Bennett, 39 Barb. 237 ; Kahn v. Chapin, 84 Hun, 541 , 66 St. Rep. 311 ; Harrington v. Bank, 101 N. Y. 257 . For an application of these principles, it is needful to briefly consider some facts clearly appearing by the proof. -Davidson acquired title to and possession of the premises held in fee in the year. 1868, and to the leasehold in 1869. It is conclusively established that the parents of Edward T. Grregan were married in this state August 13, 1849, and that he was baptized in the same parish on or about May 15, 1850 ; that in the formal paper of his enlistment in the militia of this state, verified by his signature and oath, in June, 1870, he gave his age as twenty-one years. He was married-in this city April 7, 1872, and then certified his age as-twenty-two years. The entry in his family Bible,' made by himself, shown since to have been changed, stated the date of his birth as May 12, 1850. He therefore became of age May 12, 1871. He died January 11, 1877. The record fails to show any action whatever by him in the way of exercising his right to avoid the title during the five years between his majority and death. On the contrary, it appears that by deed dated April 15, 1872, and delivered three days thereafter, Edward T. Grregan, the cestui que trust, conveveyed to Davidson all his right, title, and interest to the premises held in fee. It is true Davidson had not then accounted as guardian, but there is lack of proof that the conveyance was procured by any fraudulent act or misrepresentation. Grregan was then about twenty-two years old, and to his death, over four years thereafter, never questioned the validity of the grant. In the absence of fraud, this conveyance is unassailable.

The counsel for plaintiff argues that the trust relation of guardian and ward was subsisting, Davidson not having accounted as guardian. The contention, in my opinion, is not tenable, but, if so, the deed was not questioned by the grantor to the time of his death, nearly five years after its execution and delivery. He

It is also shown that in March, 1875, Davidson, as administrator, filed his petition for final accounting as such with the surrogate’s court of this county; 'that citations issued and were personally served on those interested, and on Edward T. Gregan, March 4, 1875, returnable March 22, 1875. Such accounting was regularly had, and a decree entered passing and allowing the accounts May 25,- 1875. It is too late now, after the lapse of twenty years, to impeach its force and validity by questioning the items of the account or showing errors therein, which, if allowed, would not have prevented the result or in any way affect the position of one in whose behalf the objections are raised. The account filed by the administrator included proceeds of sale of the leasehold, had under the order of this court, which sale was approved by the surrogate’s court. On March 29, 1875, some weeks after the service upon him of the citation and subsequent to the return day, Edward T. Gregan executed and delivered to Davidson, under his hand and seal, a general release, and especially discharging Davidson from all claims and demands which he then had or might be entitled to against Davidson individually or as administrator or as guardian. The case of Bolton v. Gardner, 3 Paige, 273, involved a question of pleading; the learned chancellor stating the rule that, as to a release from a cestui que trust to his trustee, 'the trustee most show that the parties dealt at arm’s length, the cestui que trust having full information. I think that requirement is met by the fact that, at execution of the instrument, Edward T. Gregen had passed his majority four years before. The administrator had then filed his accounts, and Gregan had been personally cited to appear, and the return day had passed. These facts constitute a dealing at arm’s length. There are no limitations by recital in the release, but an extension of the general terms, as between the individual parties, to matters between them existing from Davidson having been administrator and guardian. Being unimpeached by any proof of fraud in its procurement, its stands as a full answer to any attack upon the sale of the leasehold premises. Kirchner v. New H. S. Machine Co., 135 N. Y. 182 ; 48 St. Rep. 24 _ .

_ The proceedings for the sale of this plaintiff’s interest in said premises were based on the petition of her mother and herself,

In view of the conclusions - reached upon other questions, further discussion is needless, but it may be well to consider briefly the question of adverse possession. By the deeds from Felter and wife, Davidson acquired title to the premises in fee in 1868. He and the defendants have since then been in open and notorious-possession, receiving the rents, issues, and profits, and making improvements. There is no fraud shown in the foreclosure proceedings or the procurement of those conveyances. The deed from Edward T. Gregan to Davidson was executed and delivered April 15, 1872, and he became of age about May 12, 1871. The statute began to run in May, 1871 and the title assured in May, 1891. This action was brought in November, 1893, over two years beyond the twenty years succeeding Gregan’s majority. It is true that he died January 11,1877, leaving plaintiff his only heir at law, she being then and to the bringing of this action, under the disability of infancy. This disability did not interrupt the running of the statute, it having began in the lifetime of her father. Fleming v. Griswold, 3 Hill, 85 . Were this otherwise, it is plain that successive disabilities might render the statute ineffective.

A decree is ordered for the defendants, with costs. '