Court Opinion

ID: 6122445
Source: CourtListenerOpinion
Date Created: 2022-02-04 20:06:47.599143+00
Date Added: 2024-06-11T08:23:49.574153
License: Public Domain

BocKes, J.:
There can be no question, I think, but that the bond and mortgage became, or represented a trust fund in the hands o.f Catharine Barber, as to which Helen Reid was the beneficiary for and to the extent of the interest which should accrue thereon during her life. Those instruments were given to secure the purchase-price of trust property, sold by the trustee pursuant to the power conferred on her under the trust; and the sum secured to be paid thereby was made payable in terms substantially in accordance with the requirements of the trust, thus indicating, in addition to what equity and the law would declare, a purpose on the part of the trustee that such securities were dedicated to the trust. But it is sufficient that the bond and mortgage were given on the purchase of trust property. This alone made it a trust fund in the hands of the trustee; certainly would this be so to the extent necessary for the protection of the interest and rights of the cestui que trust. Therefore the eestui que trust (Helen) could have taken proceedings against Catharine, while the latter held the bond and mortgage, to protect the fund, if proceedings were necessary for its protection or preservation, with a view to save the trust, and her rights as beneficiary thereunder. If proceedings for that purpose could have been maintained against Catharine, they may also be maintained against her assignee. It is now the settled rule that an assignee of a bond and mortgage occupies precisely the position of his assignor in *33regard to the securities, with no better rights or equities. (Bush v. Lathrop, 22 N. Y., 535; Sheldon v. Edwards, 35 id., 283; Mason v. Lord, 40 id., 487; Ingraham v. Disborough, 47 id., 421, 423; Union College v. Wheeler, 61 id., 88.) In the last case cited, it was said {semble), that an assignee of a bond and mortgage, in good faith and without notice, occupied simply the position of the assignor, and took subject to the same rights and equities. It must follow therefore that Helen, the beneficiary in this bond and mortgage, is entitled to be protected in her rights therein. The defendant Sprague must be held to have taken those instruments subject to Helen’s rights.
But the appellant’s counsel may insist that this conclusion is based on a misapprehension of the facts. He insists' that Catha-rine w?.s not a trustee with power to convey the trust estate. In this, however, I think he is under mistake. On referring to the will of Jane Chamberlain, it will be seen that she devised to Catharine the entire estate, that is, all her real estate of which she was possessed, and then declared how it was to be enjoyed. The income thereof was to be expended for the support of Helen during her life. Thus, holding the entire estate, the duty devolved on Catharine to apply the rents and profits as was directed. She became trustee, therefore, ex necessitate rei, as much trustee as if named as such; and this was the plain intention of the testatrix, as she afterwards alludes to “ my trustee,” with manifest reference to Catharine, the devisee. Then she directs “ my trustee ” to convey the real estate, evidently intending the passing of the absolute and entire title, according to the terms of the devise, that is, so as to give Helen the income thereof during life. This construction of the will is obviously in accordance with the intention of the testatrix, and is within the fair meaning of the language employed in the instrument, arid certainly, under this construction of it, the rights of the beneficiary may be fully protected.
In the view above taken of the case, the judgment directed at Special Term was right, and it must be affirmed, with costs against the appellant, but without recourse by the latter to the bond and mortgage as his indemnity therefor.
Judgment affirmed, with costs.
*34BoaedMAN, J.:
I think the will of Jane Chamberlain gives to Catharine Barber, her devisee and legatee, the power to sell the real estate devised. The income from the real estate till sold and the interest upon the proceeds after sale, were to be received by Catharine in trust for Helen, and applied by her to Helen’s use. In pursuance of such a construction Catharine, in March, 1852, sold the real estate described in the complaint to one Johnson, and took back his bond and mortgage, secured upon this and other real estate, for $1,500, payable in two equal annual payments, after the death of Helen Reid, with annual interest. For more than twenty years the interest was annually paid to Catharine, and by her applied to the use of Helen, under the provisions of the will. In 1872 Cath-arine assigns the bond and mortgage to defendant Sprague, as collateral to a debt of her husband.
Now, the will may not clearly bear the construction which I have given it upon the language therein used. But we have, in case of ambiguity, a right to resort to surrounding circumstances and the conduct of the parties, to aid in its interpretation. There is no evidence that any property was held in trust for the testatrix, or that there was a trustee for any such property. The clause in the will would lead us to suppose the testatrix thought she had such property, but it is far from being evidence of the fact. The will was evidently drawn up by an inexperienced person, and the language used is uncertain in its meaning and wholly defective in its description of property. If Jane Chamberlain had no property held in trust for her by a trustee, then it follows almost inevitably, that Catharine Barber was the person designated by the words “ my trustee,” in the will. To Catharine was given the fee charged with the direction to sell, and she was charged with the supjoort of Helen out of the income or interest derived therefrom. So, the deed from Catharine assumes to sell, and in form does sell to Johnson the entire title to the land. The whole value is secured by Johnson’s bond and mortgage, payable after Helen’s death. This is thereafter treated as the trust fund ; and for over twenty years the trustee and the cestui que trust treat the $105 interest derived from this mortgage security as the fund, and only fund, applicable to the support of Helen. During the same time the real estate is *35held by the purchaser free and discharged from its trust character. This conduct of the parties for so long a period, without objection, and with apparent acquiescence on all hands in the disposition of the trust property, goes very far towards aiding in the interpretation of the ambiguous language used in the will. The condition of the plaintiff, a lunatic, forbids the idea of a confirmation or ratification unless it arises from the act of her committee. But it does not appear when he was appointed or what he has done that could by possibility have that effect.
In this view of the case the findings of facts and the conclusions of law of the learned judge are correct, and the judgment should be affirmed.
I therefore concur in the conclusion of Mr. Justice Bookes upon this appeal.