Case ID: ad_44/html/0169-01.html
Source: Caselaw Access Project
Author: {"author": "Rumsey, J. : McLaughlin, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Ida Seidelbach and Alveine C. Speiss, Respondents, v. Robert L. Knaggs, Appellant.
    
      Specific performance — marketable title — a deed to one “as trustee” of others, no trust being defined— it rests the title in fee in the beneficiaries.
    
    A deed which describes the grantee as “ George Henry Thaule, as trustee of Ida Thaule and Alveine Thaule, sometimes heretofore improperly designated ‘ administrator ’ for said persons, of the second part,” and the habendum clause of which is as follows, ‘‘to have and to hold all and singular the premises * * * imto the said party of the second part and assigns, to his and their only proper use, benefit and behoof,” but which imposes no duties on the person mentioned as trustee, vests, under the Statute of Uses, the legal and equitable title to the premises in fee simple in the persons mentioned as beneficiaries, and a deed from the beneficiaries conveys a marketable title which a purchaser will be required to accept.
    Assuming that the recital in the deed creates a presumption that the grantee was the trustee of an active trust in favor of the beneficiaries of the deed, the presumption is rebutted by proof that the beneficiaries received the deed, immediately went into possession of the property, received the rents and profits, and that the only relation between them and the grantee was a guardianship relation.
    Van Brunt, P. J., and McLaughlin, J., dissented on the ground that the title was not marketable.
    Appeal by the defendant, Robert L. Knaggs, from' a judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of New York on the 17th day of April, 1899, upon the decision of the court rendered after a trial at the New York Special Term.
    
      Abraham Cohen, for the appellant.
    
      G. S. Espenscheid, for the respondent.
   Rumsey, J. :

The action ivas brought for the specific performance of a contract for the sale of land by the plaintiffs to the defendant. By the terms of the contract the plaintiffs agreed to sell to the defendant ■certain premises and to execute to him a deed containing a general warranty, with the usual full covenants, for conveying and assuring to him the fee simple of the premises free from all incumbrances, except a certain lease which it is not necessary to consider. The defendant complied with all the terms of the contract except making the last payment of $1,350, but at the time of closing the contract he refused to make that payment and take a deed for the reason that the plaintiffs had not a title in fee to the premises, and, therefore, could not convey a good title to him. The plaintiffs thereupon brought this action to compel a specific performance, and after the trial at Special Term a decision was made requiring the defendant to perform the contract and accept the deed, the learned justice at the Special Term having concluded that the title offered by the plaintiffs was a marketable one.

The facts are not in dispute. The defendant’s objection to the title arises upon a certain deed under which the plaintiffs claimed to take the fee in the land. The deed was made on the 13th day of Fov ember, 1875. There is no dispute that if this deed transferred a good title to the plaintiffs they were in a situation to perform the contract. The deed was made, apparently, upon a foreclosure sale by the referee, who is described as the party of the first part, and the grant was to “ George Henry Thaule, as trustee of Ida Thaule and Alveine Thaule, sometimes heretofore improperly designated ‘administrator’ for said persons, of the second part.” The habendum clause is “to-have and to hold all and singular the premises > ^ unto the said party of the second part, and assigns, to his and their only proper use, benefit and behoof.” The persons named in the deed as Ida Thaule and Alveine Thaule are the plaintiffs.

Although the deed was made to George Henry Thaule, as trustee, no duties are imposed upon him as such, and the trust is a passive one merely. The plaintiffs received the deed and immediately went into possession of the land and received the rents and profits of it, and have continued so to receive them. George Henry Thaule was the uncle of the plaintiffs, and it appears from the testimony that he was acting as a sort of guardian for them. These facts are entirely undisputed, and upon them the question arises whether the plaintiffs took any estate whatever in the land, and if so, what the nature of that estate was. The Statute of. Uses and Trusts prescribes that every disposition of land by deed shall be directly to the person in whom the right to the possession and profits shall be intended to be invested and not to any other, to the use of or in trust for such person ; and if made to one or more persons to the use of or in trust for another, no estate or interest, legal or equitable, shall vest in the trustee. (1 R. S. 728, § 49; Real Prop. Law, § 73.)

It is further provided by the statute that every person who, by virtue of any grant, now is, or hereafter shall be, entitled to the actual possession of lands and the receipt of the rents and profits-thereof, in law or in equity, shall be deemed to have a legal estate-therein of the same quality and duration, and subject to the same-conditions as. his beneficial interest. (1 R. S. 727, § 47; Real Prop. Law, § 72.)

The conveyance in this deed to George Henry Thaule “ as trustee ” for the plaintiffs had the same effect, so far as the statute was-concerned, as though the phrase in trust for ” had been used in it, (Wright v. Douglass, 7 N. Y. 564.) It follows as a necessary conclusion that by the deed no estate, legal or equitable, vested -in George Henry Thaule, but the passive trust was at once executed by the vesting of the fee in the plaintiffs, and, therefore, they took by the deed an estate in fee simple which they were able to convey to the defendant. But it is said that, while this particular deed-declared no active trust in George Henry Thaule, making it necessary that the legal estate in the land should vest in him, yet that-it may be that' he did actually occcupy such a relation to the plaintiffs, and, therefore, that it is possible that he was a trustee and he took the legal estate by virtue of the deed. We are of the opinion that no such presumption exists. The statute had in view the establishment of the legal title to property which was conveyed-upon a mere passive trust, and when the only thing that appears in the deed is the existence of such a trust, the necessary implication follows the delivery of the deed and the reception of the rents- and profits by the person who is named as eesimi que trust, and that-necessary implication is that he becomes vested with the fee in the land just as though the deed had been made directly to him. But-in this case, even if there were a presumption, it is overcome by the-undisputed facts' which are, that the plaintiffs went into possession of the premises, received the rents and profits of them, and that the only relation between them and George Henry Thaule was, that he was a sort of a guardian for them. If he were guardian he certainly ,could have no interest in the estate, but simply the right to controljt during their minority. Therefore, upon the undisputed evidence iis it appears in this case, the conclusion of the learned justice at the Special Term was correct, and the plaintiffs were seized of an estáte jn fee in the premises and could convey a good title to the defendant, and the direction that the contract should be specifically performed was correct.

The judgment should, therefore, be affirmed, with costs.

Barrett and Ingraham, JJ., concurred; Van Brunt, P. J., and McLaughlin, J., dissented.

McLaughlin, J.

(dissenting):

I cannot concur in the conclusion reached by Mr. Justice Rumsey. ■The plaintiffs were not entitled to a. judgment directing the specific performance of the contract of sale unless the title which they -tendered was in fact a good or marketable one. . A good or marketable title is one which a person of reasonable prudence and caution would purchase or accept as security for the payment of money loaned. (Moore v. Williams, 115 N. Y. 591. See, also, Ruess v. Ewen, 34 App. Div. 484, and cases there cited.) Would a person .of reasonable prudence and caution accept this title ? It seems to me not. The record title is not in the plaintiff, it is in one “ George ¡Henry Thaule, as trustee ” of plaintiffs, “ sometimes heretofore Improperly designated ‘administrator’” for them. The habendum Manse of the deed is “to have and to hold all and singular the premises _ * * * unto the said party of the second part, and .assigns, to his and their only proper use, benefit and behoof,” It is true that this deed to Thaule, as-trustee, does not of itself .create a valid trust within the statute, or define the extent or .duration of the duties of the trustee, but that could have been .done by a separate" instrument. The statute prescribes no particular form by which a trust in land may be created or declared .except that it shall be by deed or conveyance in writing and subscribed by the parties creating or declaring it. It may he contained -jn the recital of a conveyance to which the trustee and the cestui que trust are parties, or it may be by another instrument. It is not •even necessary that the trust should be expressed upon the face of •the conveyance itself, or mentioned or referred to therein, to bring -the. case within the statute, but it is sufficient to answer all the requirements of the statute that the trust actually exists, and that fact may he established by another instrument. (Wright v. Douglass, 7 N. Y. 564.) While-the recital in the deed to Thaule is-insufficient to create a valid trust, nevertheless it is a sufficient notice if such trust does in fact exist, no matter when or hov/ created. It is sufficient to put a purchaser upon his guard, and if such a trust does in fact exist it would be binding upon him, and he.would make his purchase subject to it. Before the defendant could be expected to take title it was incumbent upon the plaintiffs to show that the trust never, existed, or, if so, that if had been terminated. This they failed to do. In other words, the burden was upon them to show that Thaule as trustee did not at the time the contract was made or at the time of the trial have any interest in the lands contracted to be conveyed, and they having failed to negative that possibility, I do not think the title ivas a marketable one. (Simis v. McElroy, 160 N. Y. 156.) With the possibility of a claim of this character at some time being asserted, the title cannot be said to be a marketable one which a reasonably prudent man would purchase, or which he would accept as security for the payment of money loaned. For these reasons I think the judgment should be reversed.

Van Beunt, P. J., concurred.

Judgment affirmed, with costs.