Kahn v. Chapin

Headnote

Specific performance of a contract for the sale of real estate — purchase by a trustee of property belonging to the trust estate — voidable, not void — tohen beneficia/ries will not be permitted to disturb the title.

Upon the trial of an action brought to compel the specific performance of a eon-tract. to convey real estate, or, in case the defendant was unable to convey a good title, that damages anight be awarded to the plaintiff, it appeared that one Abel Harker died September 6, 1851, seized in fee simple of certain premises subject to a mortgage thereon which, prior to his decease, had been executed by himself and his wife ; that the said Harker left him surviving a widow and four daughters, his only heirs at law and next of kin, and that lie left a last will and testament which was duly admitted to probate. By his will he created a trust covering tlie real property in question, for tlie benefit of his widow and children.

Subsequently one Joseph Harker was appointed a trustee to execute the trust created in tlie will, and after liis appointment as trustee an action was commenced for the foreclosure of the mortgage above mentioned, and all of the

necessary parties were personally served with process. A guardian ad litem was appointed Xor two of the children of Abel Harker, who were then infants, and the usual answer in such case was interposed by him.

Upon the sale of the premises in question, under the judgment of foreclosure, the property was purchased by Joseph Harker individually, and a surplus arising from such sale was afterwards, by order of the court, paid to Harker, as trustee.

The two infant children of the testator became of full age on or before February 28, 1873. Subsequently Joseph Harker conveyed the premises in question, and the same were owned by the defendant at the time of the commencement of the present action.

On the date fixed, by the contract for the sale of the property, made by the defendant with the plaintiff, for the passing- of the title, the plaintiff refused to accept the conveyance tendered by the defendant, alleging that the title -ivas defective because defendant’s title was derived from the trustee, who personally purchased the property at the mortgage sale.

The defendant in this action answered, denying that his title was defective, and demanded judgment that the contract he specifically performed.

At the conclusion of the trial of the action the plaintiff waived his objections to the title and announced that he was ready to take the conveyance tendered and execute the contract; the defendant waived all claim to affirmative relief, and thereupon a judgment was entered directing the defendant to convey the premises to plaintiff by a warranty deed.

Upon appeal by the defendant from the judgment so entered,

Held, that it was too late for the defendant, as a matter of right, to refuse to perform his contract;

That as, at the date of the trial, twenty-eight years had elapsed since the trustee had purchased the premises; twenty-two years had passed since the testator's youngest daughter had become o£ full age, and thirteen years had elapsed since the defendant’s ancestor had acquired his title, all of the daughters of Abel I-Iarlcer being alive, except one, who was not a minor at the date of the foreclosure; as the trustee was living and financially responsible and his action had never been questioned, the premises having been sold pursuant to a mortgage executed by the testator, the mere fact that the trustee, personally purchased the property at the foreclosure sale did not render Ms title void, hut voidable only at the election of the beneficiaries;

That the title of the trustee and his grantee might he confirmed by acquiescence and the lapse of time, as well as by the express act of the beneficiaries; and the beneficiaries, having knowledge of the sale and having received the benefit of it and having acquiesced therein for so many years, would not he permitted io disturb the title of the purchaser, hut would be left to their remedy against the trustee, if they had any cause for complaint against him.

Appeal by tlie defendant, Chester ~W. Cliapin, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 27th day of June,

1894, upon the decision of the court, rendered after a trial at the New York Special Term, directing the defendant to perform specifically a contract to convey real estate.

September 6, 1851, Abel Ilarker died seized in fee of bio. 291 West Twelfth street, subject to a mortgage to secure the payment of $3,500, executed by him and his wife October 6, 1847, and recorded October 7, 1847. Abel Ilarker left him surviving Jane Ann Ilarker, widow, and four daughters, his only heirs and next of kin. lie left a last will and testament, which was duly probated September 25, 1851, by which two executors were nominated, both of whom refused to qualify, and, on the 2d of October, 1851, letters of administration, with the will annexed, were issued to the widow and James Wooley, who accepted the trust and administered the personalty. I>y the will a trust was established over the realty for the benefit of the widow and children. Wooley also assumed the execution of the trust created in the real estate. February 1, 1866, upon the petition of the widow and the four daughters, Joseph Ilarker, a nephew of the testator, was appointed as trustee to execute the trusts created by the will, and entered upon the discharge of his duties. February 27,1866, Cornelius Yanderbilt, the assignee of the aforesaid mortgage, began an action for its foreclosure, in which the widow, the four daughters, the persons named as executors in the will, and the trustee, were make pai-ties defendant, all of whom were served. All of the parties were of full age except Virginia C. Ilarker and Louise E. Ilarker, who were upwards of fourteen, February 28, 1866. A guardian ad litem was appointed for the infants, who appeared and served the usual answer submitting their rights to the court. A judgment of foreclosure was recovered April 30,1866, the premises were sold and conveyed May 22,1866, in pursuance thereof, to Joseph Harker for $9,000. After the payment of the judgment and the costs of sale there was a surplus of $5,038.57, which was paid by the referee to the chamberlain of the city of New York. Afterwards Ilarker applied as trustee for an order directing the payment of the surplus to him, the matter was referred, the infants appeared upon the hearing by their guardian, and the surplus was directed to be paid to Ilarker as trustee. The two infant daughters became of full age on or before February 28, 1873. March 15, 1881, Joseph Ilarker and his wife conveyed the premises

to Chester W. Chapin for $14,000, by a deed recorded March 18, 1881. Subsequently the grantee died, leaving this defendant his sole heir, who acquired the title which his father acquired under the aforesaid deed, and has since remained in possession of the premises.

October 19,1892, the litigants entered into an executory contract, •by which the defendant sold and agreed to convey to the plaintiff, by a warranty deed, said premises in consideration of $16,000. On the date fixed for passing the title the plaintiff refused to accept the conveyance tendered by the defendant, on the ground that his title was defective, because the trustee personally purchased the property at the mortgage sale, and defendant’s title was derived from him. Afterwards this action Avas brought, the plaintiff asking that the contract be specifically performed in case the defendant was able to convey a good title, but, if not, that damages be aAvarded. The defendant answered, denying that his title was defective, and demanding a judgment that the contract be specifically performed. At the conclusion of the trial the plaintiff Avaived his objections to the title, and announced that he was ready to take the conveyance tendered and execute the contract. The defendant Avaived all claim to affirmative relief, and thereupon a judgment Avas entered, directing him to convey the premises to the plaintiff by a warranty deed. No costs were aivarded to either party. The defendant appeals, and insists that the court erred in directing him to convey to the plaintiff and warrant a defective title.