39 N.Y.S. 793 | N.Y. App. Div. | 1896
William Campbell died in the city of New York on the B'Tth day of April, 1888. the owner of two houses, numbered respectively 62 and 64 South Fifth avenue, New York city, leaving a last will and testament, by which he gave to his executors all the residue of his estate, after making three legacies aggregating $4,000 — “ in trust, however, that they shall take possession of, manage and control the same, and receive the rents, income and profits therefrom for and during the natural life of my wife Sarah; and I instruct and direct that they shall, out of such rents, issues and profits, during the life of my said wife, maintain and carry on my said household,and support my family as it now exists,” and disposing of any income not necessary to carry out this provision during the life of his wife. The will further provides that from and after the death of his wife six-sevenths of Ms estate, real and personal, shall be divided among his six children, the remaining one-seventh being given to his executors in trust, to apply the income thereof to the support and maintenance of his daughter Hannah. By the ninth clause of the will the executors were authorized to collect the rents, issues and mcome of his estate, to sell and dispose of any bonds or stock, or other personal property, to reinvest the proceeds thereof, and to make and execute leases of his real estate for a term not exceeding three years. By the tenth clause of the will a power of sale is given to the trustees in the followmg language : “ If at any time my executors * * * shall deem it for the best interest of my said estate that any part or parts, or all of my real estate, should be sold, then I authorize and empower my executors, as such, and the survivors and survivor of them, to sell and dispose of any real estate of which I may die seized or interested in, and any part or parts thereof, upon such terms and in such manner as they shall deem best.” No disposition was expressly made of the proceeds of this real estate, but they would clearly vest with the executors as trustees under the general trust contained in the fourth and subsequent clauses of the will, and upon the death of the testator’s wife would be divided under the seventh and eighth clauses of the will.
There can be no question but that there was here created a valid express trust by which the title of this real estate vested in the executors as trustees, with a power of sale by which they were
The executors- of this estate were Joseph Campbell, a son óf the deceased, Emma Campbell and Martha Campbell, two daughters of' the deceased. The evidence shows' that they were extremely simple people, with little business capacity or experience.
Mr. Arnoux and his firm disclaim the position of acting at. this-time as attorneys or advisers 'of the executors. It is. undisputed, however, that during all this proceeding- they were without legal, advisers at all, except for the advice that they received from Mr. Arnoux.
It seems that certain property known as the Ninety-eighth street property was or had been owned by the wife of Mr. Phyfe, who had instigated this negotiation; and about this time Mrs. Phyfe had offered to convey to Mr. Arnoux the title to the Ninety-eighth street property as security for this judgment, which had been
After this interview between Mr. Arnoux and" Mr.- Phyfe, Mr. Arnoux wrote a letter to Mr. Joseph Campbell, one of the trustees, as follows:' “ Dear Sir: Mr. Phyfe has made' me a proposition which, if you join in, I will carry out, and, I believe, it. will relieve your property from the lien of my judgment.” In response to- this lettéí Mr. Campbell called Upon Mr. Arnoux and advised with him. about the proposition discussed between , Mr. Arnoux and Mr. Phyfe; and subsequently the other executors- had interviews with Mr. Arnoux. The proposition which had been discussed between Phyfe and Mr. Arnotix was discussed with the- executors,- and the defendants swore that they relied entirely Upon the advice given by Mr. ArUoUx as to What was- proper and legal for them to do at any rate under the direction and management of Arnoux or his firm the conveyances were made,- and the mortgage to foreclose which this action was brought was- executed. What' Mri Arnoux advised these executors fo do, and what, under his advice, they did do, was as follows-: The executors and trustees executed a deed conveying the property covered hy this mortgage to one George T. Arnoux, a brother of Mr. William H. Arnoux, expressing a consideration, of $30,000. Mr. George T. Arnoux at once executed ,a mortgage to the plaintiffs- testator to secure the sum of $16,500. Four checks aggregating that amount Were drawn hy Arnoux, Bitch & Woodford .to the order of George T. Arnoux. One for $7,521.47 was indorsed hy George T. Arnoux to the defendant Joseph Campbell, executor, and by him indorsed to Arnoux, Riteh .& Woodford.. One for $8,000 was indorsed by George T. Arnoux to Joseph Campbell, executor, and by him indorsed to William H. Arnoux. One for $300 was indorsed by George T.- Arnoux .to Joseph Campbell, executor, and by him indorsed to Arnoux, Pitch & Woodford. At the same time there was executed a mortgage to
We can now consider just what proposition was discussed between Phyfe and Mr. Arnoux which Mr. Arnoux has referred to in his letter to Campbell as a proposition which Mr. Phyfe had made to him, and “ which, if you join in, I will carry out, and, I believe, it will relieve your property from the lien of my judgment.” This proposition was that the sum of $16,500 was to be raised by the mortgage to be made by this “.purchaser,” and .that that money was to be applied to 'the improvement or completion of the unfinished houses upon the Ninety-eight street property, the title to which was in Mr. William TI. Arnoux.
We fail to find any testimony tending to show that any agreement existed, either verbal or written, by which, as between Mr. Arnoux and the estate, the estate could enforce any obligation of Arnoux to hold this property as security for the payment of this judgment, or as security for the repayment to. the estate of the amount which the estate had paid to Mr. Arnoux to be used in the completion of these buildings. Mr. Arnoux did not agree to repay to the estate that sum of money, the proceeds of this mortgage. The proceeds were
■ It seems to us entirely clear that there was no sale; that no, sale was ever contemplated or attempted between the parties; that no possession of the premises was ever delivered, and that it was known to every party connected with the transaction' that this was to be a mere conveyance which would apparently execute■ the power of sale,but which would in reality be a mortgage to secure this $16^500 to-be'expended upon this property owned by Hr. Arnoux. "We think, -therefore, on this uncontradicted evidence, there-' was -never an ■exercise of the power of sale ; - that ho title passed, to the grantee.in ■the deed from the executors, and that the property.is still the 'property of this estate. .
But in what position do the defendants stand? For it is quite clear that if the plaintiffs’ testator, without notice, made a loan, rely
He, therefore, acquired no interest in the property in cpnse
It seems to us clear, therefore, that the sale and conveyance to' George T. Arnoux was not a- valid exercise of the power conferred by this will; and the deed by which the executors purported to exercise that power was not a valid deed by which any property of the estate was conveyed to George T. Arnoux; that George T. Arnoux never thereby acquired any title to this property; and that the plaintiffs’ testator, being chargeable with full knowledge of all the facts when the mortgage was executed, did not acquire as against these defendants, the trustees and beneficiaries of the estate,, any lien upon the property.
The judgment must, therefore, be reversed, and judgment entered, dismissing the complaint as to these appellants, with costs of this court and in the court below.
arrett and Rumsey,. JJ., concurred; Williams, J., concurred in result.
Judgment reversed, and judgment entered dismissing complaint as to appellants, with costs of this court and in the court below.