4 Lans. 230 | N.Y. Sup. Ct. | 1870
Lead Opinion
By the Court
This is an appeal by the plaintiff from a judgment at Special Term, dismissing the complaint in this action. The object of the suit was to set aside three several deeds (or instrument purporting on their face to be such) by the plaintiff to the defendant of all the plaintiff’s real and personal property for certain purposes therein declared, or more correctly speaking, two of them purporting to be such deeds, and the third purporting to make a distri
1. That the deeds themselves were neither absolute conveyances nor valid conveyances in trust, but mere powers of attorney, and revocable in their nature; and, in fact, revoked by the grantor.
2. That at all events the plaintiff supposed them to be so, and was encouraged, or, at least, not undeceived in that belief by the defendant; and having acted under an uncorrected misapprehension of their legal effect, was entitled to relief against them; and, in fact, to have them revoked and annulled.
3. That the defendant, in addition to the non-disclosure by him to the plaintiff of the true legal character and effect of the conveyances, practiced undue influence and positive fraud upon the plaintiff, in procuring their execution.
These grounds of relief will be severally examined ; and in doing so, the questions considered. 1. How far the plaintiff" is entitled to relief upon the face of the instruments themselves; and, 2, upon extrinsic facts. To determine these questions it will be necessary to examine, critically, the contents of these instruments.'
The first is dated on the 3d day of October, 1868 ; and after reciting that the plaintiff, from his infirmities and advanced age, deemed it expedient to convey to his nephew, the defendant, all his property, proceeds in consideration of the premises, and of one dollar to grant and convey to the defendant, his heirs and assigns, all his real and personal estates, by general words of description, with a proviso that he should sell the lands, by retail, for the best prices obtainable, and convey the same, in fee simple, to the purchasers, with covenants, binding his heirs to warrant and defend the
2d. Afterward to apply the same, first, to the payment of his just and legal debts and the expenses of the trust, and then to distribute the residue as directed in a subsequent writing to be executed by the plaintiff, or, in default thereof, to his heirs.
The second instrument, which seems to have been executed to supply a supposed defect in the first, and, mainly, an omission to provide for the disposition of the rents and profits of the real estate until sold (the first instrument having been canceled, or attempted to be, by the grantor, and his signature thereto erased), bears date on the 10th day of October, 1868, and is substantially similar-to that of the 3d of October, except that it contains this clause: “ And until the said lands shall be sold as aforesaid, he shall rent such of them as can be rented for the best prices that can be gotand except, also, that, after providing that the avails of the property should be paid and distributed, first, to defray the expenses of the trust, he provides, secondly, that, during his life, “ the residue of all moneys received shall be paid over to me, or appropriated to my uses, under my direction.”
The third instrument bears date the 15th day of October, 1868, and seems to have been executed simply as the supplementary paper for distribution provided for in the deed of the 10th of October. It refers to the paper of the 10th by its date; recites the substance of its provisions; declares this to be executed, as supplementary to that, and explanatory of his intention thereby; and then proceeds to direct the defendant, describing him as “ trustee as aforesaid,” “ to distribute the aforesaid moneys and property,” first, to the payment of certain annuities (specifying them); secondly, to convey certain specific portions of real estate to particular persons; and, thirdly, to divide the residue of the avails among certain nephews and nieces (naming them).
The deed of the 3d of October, though attempted to be canceled, probably could not be, even with the consent of both parties to the instrument, unless it was, in legal effect, a power of attorney, and revocable in its character. For the grantor and the grantee were not the only persons interested in its provisions. The beneficiaries under it had, I think, a vested interest; and, although they have not yet been named (for the paper of the 15th of October seems to be simply in execution of that of the 10th), I think they still may be, if the instrument of the 3d of October confers a valid trust, or a valid power in trust. And such a supplementary paper, inasmuch as no time is limited for its execution, will, as it seems to me, be, in such event, a valid execution of the power of. distribution therein reserved. It will be necessary, therefore, to consider the question, whether it contains a valid trust, or valid power in trust. This .question is ,ono of some interest in the case, and, I think, calls for a decision, although it is undeniable that it has not such cl,ear and definite characteristics as the subsequent instrument of October 10th,
As an express trust, I incline to think the instrument is void, for it is neither a trust.
1. To sell lands for the benefit of creditors; nor,
-2. To sell lands for the benefit of legatees; nor,
. -3d. To receive (expressly) the rents and profits of lands, and apply them to the use of a person for life, or for any shorter time (although I do not see why a conveyance of the lands, with directions to sell and pay over the avails, do.es not carry with it an implied power to receive the rents until an .actual sale); nor,
4. To receive the rents and accumulate the same. (1 R. S., 729; 3 R. S., 5th ed., 16, § 55.)
But I am inclined to think it confers a valid power intrust, for it is a power to sell lands which the grantor plight lawr fully perform (1 R. S., 732, § 94,) [74] ; an.d a genej'al power authorizing the alienation, in fee, to any person whonisoever
This aspect of the case has not been particularly discussed ; but such are my views, without the benefit of an argument of the question.
But whatever doubts may exist as to the character of the paper of the 3d of October, that of the 10th seems to be reasonably clear as to its true construction and legal effect. It contains, in the first place, a conveyance for a specified consideration of the property to the defendant; next a direction or provision for the grantee to sell the same, by retail, with covenants of warranty; and, until sale, to rent the real estate, so far as practicable, for the best prices obtainable; next a direction to collect his debts ; and, lastly, a provision to pay and distribute the avails of the real and personal estates: First, to defray the expenses of the trust. Secondly, to pay to the grantor, during his life, or appropriate to his use, under his direction, the residue of all moneys received. Thirdly, after his decease, and the payment of his debts and the expenses of the trust, to distribute the residue, as directed in a supplementary writing, to be thereafter executed; or, in default of such writing, to his heirs.
A supplementary writing referring to the paper of the 10th of October, and in strict accordance therewith, is found in the paper of the 15th of October, 1868.
It is not, as I understand, denied that the deed of the 10th of October, so far as it directs, the receipt of the rents and profits of the lands, and their application to the use of the grantor during his life, or the shorter term which should intervene before a sale of the real estate would, if it stood alone, without other provisions in the deed, constitute a valid trust within subdivision 3, of section 55, of the article in the Revised Statutes on uses and trusts. (1 Rev. Stat., 729.)
The doubt which was once entertained whether a trust “ to pay over ” was equivalent to a trust “to apply to the use of;”
But I understand it to be claimed, first, that the provision, as to the rents and profits, is not the main, but only a subordinate purpose of the grant, and, secondly, that there is not a suspense of the power of alienation which is deemed indispensable to constitute a valid trust.
As to the first objection, it is not quite certain (though I admit it is probable) that sales, and not leases, were the chief objects of the grantor. We have no adequate means of determining how rapidly advantageous sales of the plaintiff’s property had theretofore, or could be thereafter, effected, or whether the resources arising from rents would or would not exceed those arising from sales during the comparatively brief period to which the plaintiff’s life could possibly be protracted. But I think it no sound argument against the application of the law of trusts to the clause disposing of the rents and profits, that the clause in regard to sales was (if it was) inoperative as a trust. The two clauses are not, in their nature, inconsistent, but entirely harmonious; and if both cannot stand as trusts, or trust powers, it is no new thing that parts of an instrument are sustained as valid, while other portions are condemned as inoperative and ineffectual. To sustain the one, and overthrow the other, would not seem to me to be so utterly subversive of the general scheme or purpose of the grantor as to require it to be done; and, hence, if we were obliged to regard' the provision for renting or leasing the property until a sale, or until the plaintiff’s decease, as probably entirely subsidiary and subordinate to the other, I should not feel compelled to erase from the deed this provision for the temporary disposition of the property.
Again, it is said there is no valid trust, because no suspense of the power of alienation. There being a direction to sell and alienate the lands, there could not be, it is argued, a suspense of the power of alienation. In my opinion, such a
But if it should be held that the instrument in question does not create a valid trust, then, it seems to me, there is a Valid power in trust; and such an instrument is equally incapable of revocation. It is a valid power in trust, because it calls for the execution of a power which the grantor possessed, to wit, the alienation of his property, without restriction as to the persons who should be alienees for certain designated purposes, to wit, for distribution of the avails to the grantor as to such moneys as should be received during his life, and to
It is argued that there is no valid power in trust, because a power must either be granted by a clause in a last will and testament, or by a clause in a conveyance of some estate in the lands to which the power relates. (1 R. S., 735, § 106.) And that as the trust is void, the attempted conveyance does not take effect, and is not valid as a trust deed; and hence the title remains in the granter ; and, therefore, it does not come within the definition above quoted, and is not contained in a conveyance of some estate in the lands. But we are not permitted to overlook the other section of the statute which expressly declares that the attempted trust, failing to take effect as such, by reason of not coming within the enumerated classes; and, therefore, passing no estate to the trustees shall be valid as a power in trust of directing or authorizing the performance of an act which may be lawfully performed under a power. (1 R. S., 729, § 58.) These two sections must both have effect, and must be construed accordingly. The section declaring the instruments in which a power might be contained, "was general; and the other must be regarded, if necessary, as an exception to the general rule. But the conveyance is, in fact, of the nature of the conveyances specified in the statute; though, for a particular reason, it is not permitted to take effect as a transfer of title. Nevertheless, it is, in form, a conveyance of lands and for certain
There is also, I think, a valid trust in regard to the personal property. The Revised Statutes do not apply to trusts of personal property, except as to future and contingent interests therein, and except that the absolute ownership of personal jDroperty shall not be suspended for a longer period than the continuance of two lives in being at the creation of the trust. (1 R. S., 773, §§1, 2; Kane v. Gott, 24 Wend., 641; Brown v. Harris, 25 Barb., 134.)
Here is, plainly, no illegal suspense of ownership; and, as to the personal property, so far, at least, as it existed in money or was converted into money by the collection of debts, it seems to me, the disposition of the personal property was lawful and irrevocable. Whether the whole estate, real and personal, being directed to be sold and converted into money, should not be regarded, upon the principle of equitable conversion, as money, is a question which has not been, to any extent, discussed, and is not, perhaps, absolutely necessary to be now determined. It seems to me, however, that if, as it is claimed, the obvious purport of this instrument was to have all the grantor’s property converted into money with all reasonable dispatch, we may properly treat it as money for the nurpose of construing the trust. “ Courts of equity often regard things agreed or ordered to be done as actually performed. And as the testator has, in effect, directed all his
It is said that the provisions for turning this property into money are imperfect and indefinite; that there is no provision for collecting the principal or interest of securities, or of dividends on stock, or for reinvestment of money or assignment of securities, or for sales of stock or securities. I think otherwise, and think all these powers are covered by the direction to make sales, and give deeds, and collect debts, and convert into money. It is not necessary that all the details should be severally specified, item by item. They seem to me to be embraced in the powers actually conferred and specifically enumerated. Hence, it seems to me, that, if necessary to resort to this construction, the instrument may be sustained, as a valid trust of personal property, and capable of enforcement as such. ■
I regard, therefore, the instruments in question, not as mere powers of attorney, and revocable by the principal, but as creating valid and irrevocable trusts, or powers in trust.
There is apt to arise in the mind, I think, a strong disposition to afford the party relief, under such circumstances, because the property was wholly his own, the disposition of it substantially voluntary and gratuitous (whether so, legally speaking, or not), and, in this case, the persons provided for not those who had any absolute claim on his bounty by reason of being his offspring. But, nevertheless, the law must be administered upon certain permanent and established rules; and legal instruments, in their very nature, have a certain solemnity and importance which should forbid their being executed except upon the theory that they are to have efficacy and effect.
The instruments in question are supported by a sufficient legal consideration. They acknowledge the receipt of one dollar as a pecuniary consideration. They recite sufficient reasons and inducements for their execution on the part of the grantor ; and the acceptance of them by the grantor, carries with it an obligation to perform the services therein required, and to appropriate the moneys and property as therein directed.
It is now claimed that there was a misconception, on the part of the plaintiff, as to their legal effect. This fact is substantially found by the justice who decided the cause. It is not claimed, as I understand it, that this idea was ever present to his mind at the time the papers were drawn or executed, or that it influenced his action, in any way whatever, or tliat the papers, as executed, did not fully express his wishes and instructions at the time, or that he would have made any different disposition of his property at the moment, as to the persons who were to participate in it, if he had' known or
“ Courts do not undertake to relieve parties from their acts and deeds, fairly done, on a full knowledge of the facts, though under a mistake of the law. Every man, at his peril, is to be charged with a knowledge of the law. There is no other principle which is safe and practicable- in the common intercourse of mankind,” (Lyon v. Richmond, 2 Johns., Ch. Rep., 60.)
When parties make just such instruments as they intend to make, and without fraud, surprise, undue influence or mistake of their rights, but labor under error as to the mere legal effect; that alone will not authorize a correction by this court. (Storrs v. Barker, 6 Johns., Ch. Rep., 166.)
“ Courts of equity may grant relief against acts done, and contracts executed under mistake, or in ignorance of material facts / but it is otherwise, I think where a party wishes to avoid his act or deed, on the ground that he was ignorant of the law. All men are presumed to know the law of the land. And although the presumption may often be at variance with the fact, it is impossible, without indulging it, to maintain the order or the institutions of society.” (Bronson, J., in Champlin v. Laytin, 18 Wendell, 412.)
There are two reasons why I cannot grant to these plaintiffs the decree they seek, to set aside the whole of this trust deed. First. It was a voluntary conveyance on their part; and they seek to vacate it, not on the ground of a mistake as to matter of fact, but because they were ignorant what -would be its legal effect and operation, and had made a mistake in a point of law. How courts do not under
■ Was the defendant in such a relation of trust and confidence to the plaintiff as called upon him to take the position of legal adviser and confidential friend, and inform him as to the legal effect of these conveyances ?
■ As a matter of fact, the evidence does not show that he stood in that relation. He was simply a hired clerk, or servant, not having the general custody or charge of his business, but doing such work, and performing such services as he was from time to time called on to perform. The plaintiff took charge of his own business, and gave his instructions to the defendant; and- although he occasionally sought his advice or opinion, it was, as a principal or superior often seeks, the suggestions or aid of his subordinate or clerk. The plaintiff was a lawyer; the defendant (so far as the case shows) was not. The plaintiff was skilled and practiced in the drawing of conveyances ; and in cases where he' had large responsibilities and interests, the defendant, so far as such business was concerned, was a mere draughtsman or copyist, performing useful services, doubtless, but in a subordinate capacity. The defendant was not called upon, I think, to volunteer his suggestions or advice, nor did the plaintiff rely upon him as his confidential adviser. For a long series of years he had relied Upon his own mature and practiced judgment, and there is nothing to show that the defendant knew, or had reason to believe, that the plaintiff had any erroneous conception of the legal effect of these instruments. The plaintiff had drawn, or had procured to be drawn, quite a number of different instruments designed to-be expressive of his intentions
Nor, in my opinion, was there any undue influence or fraud practiced by the defendant upon the plaintiff. A certain degree of influence was incident to the relation in which the parties stood to each other, and was perfectly proper to be exercised; and I do not think the evidence is sufficient to show that it was abused. The defendant obtained no larger share of the plaintiff’s property than others related to him in the same degree of consanguinity; and it was certainly to be expected that, in any disposition of his property which the plaintiff might make, the defendant would naturally be permitted to share largely, if not exclusively, in its management and control. It would have been strange, if the plaintiff communicated with him on that subject, that the defendant should not have expressed his mind freely to him, and even sought a private interview to have had fuller opportunity for the
I do not propose to go into any minute' reference to the testimony on that subject. The casé was heard at Special Term by a learned justice of this court, who himself heard the witnesses testify, and who was well qualified to give the proper weight to their testimony; and he has hot only found against the existence of any such undue influence or fraud as is alleged, but has pronounced a very learned and able opinion oh this whole case, which seems to make it almost a work of supererogation to write upon it further, and almost inquires an apology for making the attempt to do so.
But the subject was so learnedly discussed in the arguments at General Term, and has not been viewed in precisely the same light by all of us who have to adjudicate upon the same, and the subject is withal so interesting in itself, and involves so large ah amount of property, that I have, though with some hesitation, ventured upon its discussion.
I do not deem it necessary to discuss the exceptions to evidence. I think, in regard to them, that the rulings of the court below were either right or not prejudicial to the plaintiff to such a degree, or in' any such sense, as to demand a new trial.
In reaching á conclusion in accordance with the opinion of the court below, and unfavorable to the relief which the" plaintiff asks, I feel the less reluctance, because, if the affairs of the trust are properly and diligently administered, I see no reason to doubt that they may be so far advanced, and the property converted into money within a reasonable time, as to give to the plaintiff, and to place within his personal disposal, the avails of much the greater portion of his estate, and thus to enable him, independently of this trust, to dispose of the
I am of opinion that the judgment of the Special Term should be affirmed, with costs.
Parker, J., concurred.
Dissenting Opinion
dissenting. This action was brought to set aside certain instruments bearing date 10th and 15th October, 1868, and was tried at Steuben Special Term in June, 1869.
It appeared upon the trial that on the 3d day of October, 1868, the defendant having drawn, the plaintiff executed an instrument of that date, employing terms of conveyance to defendant all of plaintiff’s estate, real and personal, in the States of Hew York, Pennsylvania, Michigan, Wisconsin, Indiana, Ohio, Illinois and West Virginia, in trust, to sell the lands, &c., and pay over all proceeds and avails of the property, real and personal, to the plaintiff during his life, and after his death the residue (if any) to be distributed, as directed, in writing, to be subscribed and executed by the plaintiff; and in case writing was not executed, then the residue to be distributed to the heirs of the plaintiff, according to the laws of the State of Hew York.
On the 10th day of October, 1868, the defendant having drawn another instrument as a substitute for that of the 3d October, the plaintiff executed that, in which, in addition to those in the previous one, were inserted provisions for renting land until sold, and for compromising disputed and doubtful claims, whereupon the first instrument was canceled.
On 15th October, the defendant having prepared a supplementary instrument of that date, the plaintiff also executed that, containing provisions simply for distribution after his death of any residue there might then be.
At the time these papers were executed the plaintiff had reached the age of eighty-seven years, and his property waa
It appeared that up to the time at which the papers were executed and for several years previous the defendant (who was his nephew) had been engaged for the plaintiff in his office as clerk, having charge of his books, and was with the plaintiff daily aiding him generally, and had acquired the confidence of the latter. That for the purpose of procuring the plaintiff’s promise to make the papers, and the execution of them, the defendant induced the plaintiff to leave his own house and office, and go to the dwelling of the defendant on the 29th day of September. The defendant testifies that he invited him there for the purpose of consulting with him on this subject, and wanted a private interview because he wanted him to fix something. That when he took him to his house he contemplated having a paper executed for the purpose of getting control of the property if he would do it. And defendant added that he did not want to undertake his purpose in any room at the house or office of the plaintiff, because somebody would be sure to bolt in, and he didn’t want anybody to hear. He was not afraid of everybody in general, but of somebody in particular, and of one Joseph F. Hill. Hill was not
Immediately after the interview on the 29th September, the defendant prepared a paper of that date, as he says, pursuant to the arrangement, and the plaintiff refused to execute, and repudiated it. A will was also drawn, which appears in the handwriting of the defendant of date of 30th September, which was also witnessed by the said George and his partner Preston, and the defendant testified that it was made as a temporary instrument, and he kept it. The defendant continued to draw papers for the plaintiff to execute, and the latter not being satisfied, prepared and executed a will on the 2d day of October, 1868. But, in the meantime, the defendant had drawn up a paper which the plaintiff reduced to a will by alterations.
Immediately after the papers of the 10th and 15th October were made, the defendant caused them to be recorded without the consent of the plaintiff, who made that a subject of complaint as soon as it came to his knowledge. And not long after this the defendant claimed the right to assume control and management of the property and business in defiance of the plaintiff. And thereupon the plaintiff distinctly declared his right to revoke and terminate, and did revoke all the power of the defendant under the instruments, and claimed to resume the entire and exclusive control and management of his property and business.
The court at Special Term concluded :
2. That the instrument was made without undue influence of fraud.
3. That the relation between the parties was that of master and servant.
4. That the instrument of the 10th October, 1868, created a valid trust.
5. That the instrument of 16th October, 1868, also created a valid trust.
A judgment was entered upon the decision, and the plaintiff appealed.
One of the principal questions to be determined in this case is, whether the instrument executed by the plaintiff to the defendant, bearing date the 10th day of October, 1868, created a valid trust, within the provisions of the Revised Statutes in regard to uses and trusts. They are abolished, except as authorized and modified by the statute. (1 R. S., 127, §45.) According to the statute, express trusts may be created for certain purposes therein named, and, among other purposes, “to receive the rents and profits of lands, and apply them to the use of any person, during the life of such person, or for any shorter time, subject to the rules prescribed in the first article of this title.” (1 R. S., 728, § 55, subd. 3.) The instrument in question provides for a sale and conveyance of the lands by warranty deeds, and, until they are sold, authorizes the defendant to rent such of them as can be rented for the best prices which can be obtained. The whole avails are then to be distributed, after deducting commissions, by paying over the same to the plaintiff, or under his direction.
It is evident that the main object to be accomplished by the instrument was to sell the real estate and pay over the avails, and the renting of the property was merely incidental and collateral to that object. It simply provided for its use while waiting for a sale, and for the disposition of
Pending the negotiations for a sale, and while engaged in disposing of so large an amount of property, some portion of it would necessarily lie idle, and, therefore, as a financial matter, dictated by sound judgment, the provision appears to have been made for the renting of those portions which could thus be disposed of, until a sale was had. Upon a fair interpretation of the statute, it would seem to be quite apparent that such a renting of property as is thereby authorized was not contemplated by the instrument, for it makes no provision for the receiving of the rents and profits, and the application thereof for the use of the plaintiff for life or a shorter term, as the statute requires in order to create a trust. The object of the instrument was to sell, and not to rent, the property; to pay over the avails of sales and all moneys received, and not to apply them to the use of the plaintiff. This construction of the instrument is supported by the principles laid down in numerous adjudicated cases. (Wright v. Delafield, 23 Barb., 516 ; Hotchkiss v. Elting, 36 id., 44; Downing v. Marshall, 23 N. Y., 379.) If no trust was created under section 55, then no title vested in the trustee. (1 R. S., 729, § 60.)
Another, and, in my opinion, a strong and unanswerable ground for holding that no trust was created within the third subdivision of section 55 before cited is, that, when such is the case, although title is vested in the trustee for the purposes named, the power of alienation is suspended, and every sale or conveyance is absolutely null and void. (1 R. S., 730, §65; Boynton v. Hoyt, 1 Denio, 53; Cruger v. Jones, 18 Barb., 471; Hawley v. James, 16 Wend., 164; Coster v. Lorillard, 14 Wend., 303.) In the instrument of the 10th of October, unlimited authority is given to sell and convey the property, and there is no restraint whatever upon the alienation thereof at any time or under any circumstances. The power of sale is in no respect restricted by the direction to rent, but entirely independent of it. The duty to sell is
2sTo one but the plaintiff is interested in the price to be obtained. The parties named in the instrument of October 15th are not in any event entitled to any property except such as may remain in the hands of the trustee after the death of the plaintiff. They have no interest in the sales or collections, and ho equitable rights to obstruct or delay them for any purpose.
It is said that the power to sell was not inconsistent with the trust to receive the rents and profits, and apply them to the use of any person who was entitled to the same. Conceding that this position may be a sound one, where the power to sell is incidental to the receipt of the rents and profits and their application; yet when the sale is the main object of the trust designed to be established, and this is evi dent from the instrument itself, I think that the rule contended for has no application, and is in conflict with the principle established by the authorities to which I have before referred.
In support of the doctrine contended for, the learned judge before whom the case was tried cites the case of Belmont v. O’Brien (12 N. Y., 394), which ease, it is insisted by the counsel for the defendant, overrules any authorities cited by the plaintiff which can be regarded as holding that a trust estate is inconsistent with an ultimate power of sale, and thereby rendered invalid.
In the case last cited, it was held that where, in contemplation of marriage, lands were conveyed to trustees, to receive the rents and profits and apply them to the separate use of the wife during life, and the trust deed contained a power to the trustees to sell the lands and reinvest the proceeds, and hold them so reinvested to the same use, that the power was valid, and that a conveyance by the trustees passed a good title. The opinion of the court cites the case of Haw
Tt will be seen that the case cited is entirely different from the one- at bar. The power to sell was incident to the main object of the trust created, which was to receive the rents and profits, and apply the avails; while here the renting of the property is incident to the main object, which was the sale and disposition of the avails. Hor is there anything in the instrument executed by the plaintiff which presents an exceptional case, similar to an ante-nuptial agreement which prevents the application of the statute prohibiting a sale in cases of trusts under the third subdivision of section 55. I cannot, therefore, consider this case as establishing any new doctrine in conflict. with the cases before cited.
The other cases relied upon do not sustain the doctrine contended for. In The Matter of the Petition of Livingston (34 N. Y., 555), it was held that where the rents and profits of the real estate were, by the terms of the trust, to be paid over to the grantor or creator of the trust himself, the trust was valid, and that so far as the deed requires the trustee to assign and convey the legal estate to those entitled to the remainder, his services would be useless; as the transfer would be made, if at all, by operation of the statute of uses, and his office of trustee would then cease. There is nothing in this case which sustains the position that a trust to receive
In Wright v. Miller (4 Seld., 9), the trust deed was made in 1809, and the Revised .Statutes have no application to it. Ho question of trust under the statute was presented. It may also he remarked that the power of sale conferred by the deed was consistent with and incidental to the trust, as it provided for the payment of so much as was necessary for the support of the cestui que trust and the accumulation of the surplus for the purposes of the trust.
There is no reported case which goes to the extent of holding that where the principal object of the trust is to sell lands and pay over the avails, .the authority .to rent in the mean time can .take the ease out of the statute. If such was the law, then the statute might be easily evaded, and its purpose entirely set at naught. The true question is, what was the main and principal object of the trust ? If to sell lands and pay oyer the proceeds, then clearly it is not yd thin the statute. It is no answer, in my opinion, to the invalidity of the authority to sell lands and pay oyer the avails, that a further and subordinate purpose, which was valid, is added, to carry out. the main object. The two purposes are not in conformity with the spirit of the statute, and the subordinate one must-yield to the greater, and .be considered as merely auxiliary to it. I think it cannot be maintained, upon any sound principle, that an instrument authorizing a sale of lands in express violation of the statute of uses and trusts is saved from the operation of the statute, because, until the lands are sold, authority is given to rent the same. It -is plain that the statute never was intended to confer any such authority, and would be of no practical utility if it could be thus perverted from its purpose. If the real object of the instrument in question was to create a trust for the sale of real estate and the payment of the avails arising therefrom, then the clause which provides for the renting of the premises until sold is a mere appendage attached to it for the purpose of carrying into effect the principal object in view. It cannot save the
Ho valid trust being created under the Revised Statutes, the question arises whether a power in trust is not created under section 58, of the title referred to, which provides: “ When an express trust shall be created for any purpose not enumerated in the preceding sections, no estate shall vest in the trustees; but the trust, if directing or authorizing the performance of any act which may be lawfully performed under a power, shall be valid as a power in trust, subject to the provisions in relation to such powers contained in the thud article of this title. (1 R. S., 729.) The next section (59) declares that when the trust is valid, as a power, the lands to which it relates shall remain in or descend to the persons otherwise entitled, subject to the execution of the trust as a power. By the third article of the Revised Statutes referred to, powers are abolished, as they then existed (1 R. S., 782, §73), and certain kind of powers were authorized. These were general or special, and beneficial, or in trust. (§ 76.) A power is general when there is a general authority to convey, in fee, to any alienee. (§ 77.) Special powers are limited to persons designated, and any alienation authorized of an estate
A general power is in trust when any other person than the grantee has an interest in the proceeds, or the benefits to be derived from it. (§ 94.) Under these provisions, if any power was created by the instrument it was a general power. The statute also provides in what manner a power may be created, and that it may be granted : “ 1. By a suitable clause contained in a conveyance of some estate in the lands to which the power relates. 2. By a devise contained in a last will and testament.” This provision excludes all other methods of creating a power; and as the instrument in question, as we have seen, conveys no estate, and it is still vested in the grantor, it does not contain the requisites of a power in trust.
A power in trust is defined to be a mere authority, or right; to limit a use. (F. L. and T. Co. v. Carroll, 5 Barb., 652. Sterricker, v. Dickinson, 9 Barb., 519.) In case of a power in trust, the beneficiary must be some person besides the grantor. There must be some third person besides the devisee or grantee of the power, who is called the appointee. The parties concerned in creating a power in trust, are the donor who confers the power, the appointee or donee who executed it, and the appointee or person in whose power it is executed. (4 Kent, 316.) The grantor is not a third person who has an interest in the performance of the stipulations and provisions of the agreement. (5 Barb., 653.)
An appointee is wanting to constitute a power in trust, unless the donor or grantee can be considered as such, which is in conflict with the rules laid down in the cases cited: It may also be observed that the appointee, under the power, derives his title from the instrument by which the power of appointment was created; and the statute expressly provides that no person can take under an appointment, who would not have been capable of taking, under the instrument by which the power was granted. (1 R. S., 737, § 129 ; 4 Kent,
If it be conceded that a trust may be created by a grantor for his own benefit, yet the doctrine that the grantor of a power in trust may be himself the appointee or beneficiary, cannot be sustained either upon principle or authority. In Wright v. Delafield (23 Barb., 498), which is cited' by the defendant’s counsel to sustain a different principle, the judgment of the Supreme Court was reversed by the Court of Appeals ; and the point now considered was not material in the decision of the case. So far as the opinion of the Supreme Court can be considered as upholding the doctrine contended-for by the defendant’s counsel, it is decidedly adverse to the general current of authority, and in conflict with the principles of law applicable to powers.
The instrument of October 10th being insufficient to create a power in trust, because it failed to designate an appointee, and being invalid of itself, the deficiency is not supplied by the provision for the distribution to be made after the decease of the plaintiff; and the instrument, executed on the 15th of October, which designated the persons to whom the property was to be distributed after the decease of the plaintiff.
As it was originally invalid and void on its face, it could not, I think, be resuscitated and rendered effective by the instrument subsequently executed, even if that had been legal and valid.
It is said that a valid trust was created in respect to the personal estate, which constitutes the largest portion- of the property of the plaintiff. It is held that statutes in regard to trusts, except as to the limitation of future or contingent interests, relate to real estate only; and that trusts in respect
Although the instruments executed by the plaintiff are null and void for the reasons already stated, there is, I think, another ground which is fatal to their validity. At the time of the execution of these papers, the defendant occupied a position of trust and confidence with the plaintiff, in reference to the subject-matter of the transaction, which obligated him to impart proper advice and information as to the plaintiff’s rights, and the legal effect of the instruments which were executed. The defendant had been employed as plaintiff’s clerk and assistant in his business for a number of years, occupying the office of the plaintiff, with him at his residence, and in the habit of daily intercourse with the plaintiff. He was a favorite nephew and confidential friend and adviser, in whose integrity, honesty and fairness, the plaintiff had the most implicit confidence. The plaintiff confided to him the execution of the power conferred, and he was largely interested in the profits arising from the employment, furnished by the papers executed, as well as in the residuary portion of the defendant’s estate. According to the defendant’s own version of the manner in which the transaction was accomplished, he apprehended that another relative might interfere with him; and if this person was tolerated in the office, he states that he knew that it would be so uncomfortable for him that he would not stay, and he invited the defendant to his house for the purpose of consulting with him on the subject, intending, at the time, to have a paper executed that would give him the
From this brief history of the proceedings, prior to the execution of these instruments, it is apparent that the defendant was a prominent actor in the transaction. He instigated and procured the private interview, advised what should be done; either drew or advised as to the drawing of all of the papers; and those which were executed are in his handwriting. He acted, throughout, as the confidential adviser and attorney, and not as a mere agent of the plaintiff, to carry out his views. The plaintiff was in the decline of life, being eighty-six years of age, pressed with bodily infirmities, with his sight, memory, and hearing impaired, although of great intelligence for a man who had passed so far beyond the allotted period of human life. He entertained the idea, as the court has found, that he was merely conferring upon the defendant a power of attorney, revocable at his pleasure, and thus the sales of his property might be continued until he choose to change it. He testifies that he had confidence in defendant’s integrity and skill in business, and it is apparent that he trusted him, not only as a friend and relative, but as his legal adviser.
Under such circumstances, the defendant having assumed the responsibility of procuring the plaintiff to execute the ^papers, he was bound to know, and to advise the plaintiff,
The courts regard, with jealousy, all transactions which involve confidential relationship and the dependence of one party upon another. They seek to protect the weak and infirm, the aged and helpless, who, intrusting confidence, rely upon the advice and assistance of others, from all improper influence which they may possibly exercise, over the acts and conduct of these persons in the disposition of their property. It does not allow an individual to take advantage of confidence reposed in him, either in professional or friendly relations.
A court of equity will exercise its jurisdiction to set aside instruments executed between parties, where one party is so related as to exercise a controlling influence over the conduct, will and interests of another. The nature of the transaction itself is often such, that undue influence may be inferred. In other cases it appears from the transaction, and the exercise of occasional or habitual influence. The authorities which uphold this principle are abundant. In Newton v. Atkyns (3 M. & K., 140), it was held that when the relation is only that of friendly habits or habitual reliance on advice and assistance, accompanied with partial employment in doing some sort of business, care must be taken that no advantage be had of the influence thus acquired.
In Huguein v. Baseley (14 Vesey, Jr., 273), a voluntary settlement by a widow upon a clergyman and his family was set aside as obtained by undue influence and undue confidence in the defendant. The lord chancellor, Eldox, says: “If the proposition (to execute her purpose) was her own, yet the transaction, in a court of justice, has this character, at least, that it was a demonstration to Baseley that she placed confidence in him as high as one individual ever placed in another.” He further remarks: “ And the language of a court of justice has at all times been, that, if a man does not choose to act upon the confidence, appearing in the course of the
The authorities are uniform in their tendency, and lead to -the irresistible conclusion that the instruments in question cannot be upheld. I have examined the -cases cited by the defendant’s counsel which are supposed to sustain a different doctrine:; but I think -that none of them are in conflict with those to which I have referred.
Some other -questions are raised by the plaintiff’s counsel; but, as those already discussed dispose of the case, it is not necessary to discuss them.
After a careful examination I am satisfied that the instruments in question cannot be sustained upon any of the grounds taken by the counsel for the defendant, and the judgment must be reversed, with costs.
As the defendant is not entitled to judgment under any state of facts applicable to the ease, I -think that judgment should be ordered in favor of the .plaintiff, in accordance with the prayer of the plaintiff’s -complaint.
Judgment affirmed.