103 N.Y.S. 403 | N.Y. App. Div. | 1907
This action was brought for the judicial settlement of the accounts of the plaintiff as surviving trustee of a trust contained in a deed executed on the 8th of June, 1892, whereby the defendant Mary E. Wright conveyed certain property to Gunning S. Bedford, 2d, and Eugene L. Bushe as trustee for Gunning S. Bedford, 3d. The complaint asks the court to construe the deed of trust and to determine its effect with reference to any and all questions that may arise upon the accounting had in this action concerning the validity, construction or effect of the said deed; and also to determine the various interests of the parties to this action in the trust estate and funds, and to determine the ultimate disposition of the trust property. By this deed certain real property situated in the county of Hew York was conveyed to Gunning S. Bedford, described as 2d, and Eugene L. Bushe as trustee for Gunning S. Bedford, Jr., hereinafter described as Gunning S. Bedford, 3d. The property conveyed was in trust “ to receive the rents, issues and profits thereof, and after the payment of all charges and expenses to apply the net .income thereof to. the use, maintenance and support of the said Gunning S. Bedford, Jr., in a style and manner befitting his station in life,” with power to the trustees during the lifetime of the said Gunning S. Bedford, 3d, “ to apply such portion of such net rents, income and profits, as they may deem proper, to the use, maintenance and support of the wife of said Gunning S. Bedford, Jr., in case he shall marry, and to the use, maintenance, support and education of any lawful issue of said Gunning S. Bedford, Jr.; ” that “ upon the death of said Gunning S. Bedford, Jr., said trustees shall convey, pay and make over the whole of said trust estate then in their hands to the then living lawful issue of said Gunning S. Bedford, Jr., and to the descendants of any such lawful issue of his who shall have died leaving descendants him or her surviving; * * and in
Tlie complaint alleges, and it is admitted, that -Gunning S. Bed-ford, 3d, died in the city of Paris on or about the 17th day-of February, 1903,-without lawful issue him surviving; leaving the defendant Helen M. Bedford as his widow, and leaving a last will and testament by which he gave, devised and bequeathed all his property,, real and personal, to his widow, the defendant Helen M., Bedford, and appointed her sole executrix, which last will and testament- was duly admitted to probate by the surrogate of the county of .Hew York, and letters testamentary duly issued to her. She appeared individually and as executrix of Gunning S. Bedford, 3d: Her.answer, after admitting the execution of the deed under which the plaintiffs • claimed to act as trustees," alleges .that- Gunning S. Bedford, 3d, was- the only child of M. Amelia and Dr. Frederick Bedford ; that M. Amelia Bedford died on or about the 14th day of July, 1871, leaving a last will and testament which was admitted,to probate by the surrogate of the county of Hew York on the 31st day of July, 1871, and in which will she appointed her husband, Frederick Bedford, as executor and trustee of her estate ; ' that by that will the property of the testatrix,' M. Amelia Bedford, was devised and. bequeathed, one-half thereof to her husband, Frederick. Bedford, absolutely, and the other half to her husband iff trust for her child Gunning S.-Bedford, 3d, to apply the rents, income and profits to the support and education of the child, during minority, and to assign the principal óf said share, with ail accumulations, to such child on his attaining lawful age; that .the said-
It appeared that Gunning S. Bedford, 3d, was over twenty years of age at the death of his father. Apparently he had lived with his father from the death of his mother. It is stated that after his
It is an elementary principle that a deed or conveyance by which a trustee, or one occupying a position of confidence and trust, acquires an interest in the property conveyed isznot absolutely void, but voidable at the election of the beneficiary or cestui' que tr ust / that until such beneficiary or cestui que trust elects to avoid it, the deed is valid ; and from this it follows that such a deed may be ratified, and when once ratified, an action cannot be maintained by the grantor or his personal representatives who avoided it. (Dodge v. Stevens, 94 N. Y. 209.) In that case it is said: “ But a purchase by a trustee, for himself, of trust property, in respect of which he has a duty to perform inconsistent with the character of purchaser, is voidable at the election of the cestui que trust, and not absqlutely void. The cestui que trust may affirm the transaction and treat the trustee as purchaser, or he may disaffirm the purchase; and in case of real estate, if the title has become vested in the trustee by a conveyance, may „ compel the trustee to convey to him, or in trust for him, as the case _may require.” In Harrington v. Erie County Savings Bank (101 N. Y. 257) the same principle was applied, the court saying: “ The appellant, relies upon the well-established doctrine that a trustee cannot purchase or deal in the trust property in his own behalf, or for his own benefit, directly or indirectly. This is a rule of equity and is not to be impaired or weakened. Such a purchase, however, is not void db ot'igine, but voidable only, and at the instance of the cestui que trust, or of a party who has acquired the rights which belong to one in that relation. Even while in the hands of the trustee the title may be confirmed as well by acquiescence and lapse of time as by the express act of the cestui que trust; ” and Kahn v. Chapin (152 N. Y. 305) was determined by the application of the same principle, and the same principle has been applied in the case of a conveyance by a person of unsound mind.
I think the conduct of the grantor during the eleven years of his life after the execution of this deed, his receipt of the income of the trust' property conveyed by the deed and his dying without electing to avoid it was a ratification which estopped his personal
My conclusion, therefore, is that the judgment appealed from should be affirmed, with costs.
Patterson, P. J., Laughlin, Clarke and Soott, JJ., concurred.
Judgment affirmed, with costs. Settle order on notice.