Court Opinion

ID: 5181246
Source: CourtListenerOpinion
Date Created: 2022-01-06 04:42:26.789856+00
Date Added: 2024-06-11T08:26:34.758350
License: Public Domain

O’Brien, J. (dissenting):
There is no serious dispute about the facts, which are clearly and succinctly stated in the opinion of the .learned judge at Special Term as follows:
“ This is an action for the foreclosure of a purchase-money mortgage. The property originally belonged to-one' Jacob Li-ngsweiler, *163who died in June, 1882, leaving a will which was admitted to probate in August, 1882. By this will he devised the premises in trust to his executors to collect and receive the income, and, after paying the necessary expenses of the estate, to pay the remainder of said income to his widow during her lifetime, and upon her death the real and personal property was directed to be divided and paid over equally between his children named in said will, or the issue of said children if any should die leaving issue. The six children of Jacob Lingsweiler, with the widow, their mother, conveyed the premises to the defendant Loeb by two deeds, each deed containing the usual full covenants. One of the deeds was dated May 10th, 1887, and was signed by the widow and the six children. After this deed was drawn and before its delivery, on May 18th, 1887, Frederick, one of the children, conveyed his share in the premises to his brother Charles. The deed of May 10th not being satisfactory to Loeb, as to its covenants, another deed dated May 27th, 1887, was drawn, the covenants therein being not merely joint, as in the previous deed, but joint and several. Frederick did not join in this deed, having already, as above stated, conveyed his interest to his brother Charles. The two deeds were then delivered to and accepted by Loeb ; and the mortgage and bond for $15,000 now in suit were given back by him. Julia Schoeneman, one of the children of Jacob Lingsweiler, died on the 17th of November, 1888, during the lifetime of her mother, and her estate is represented in this action by the defendant Hart, who succeeded her executor on the resignation of the latter. The mother, Elizabeth Lingsweiler, died on the T5th of August, 1893. Mrs. Schoeneman, the daughter, left three children, who were of full age at the time of the trial and who are parties to this action. In the bond for $15,000, executed by Loeb at the time of the delivery of the deeds aforesaid, the following provision was inserted: ‘And in the event that the title to any share or interest in the said premises shall fail, the said Solomon Loeb, his heirs, executors, administrators and assigns may make such reasonable payment as shall acquire the share or interest which shall so fail, and the amount so paid shall constitute a credit upon the principal sum provided to be paid by this bond; and, in the event that the said Solomon Loeb, his heirs, executors, administrators and assigns shall not acquire such share or interest by payment, the *164reasonable value thereof shall constitute a credit upon the said principal sum, it being understood that any amount of which the said Solomon Loeb, his heirs, executors, administrators or assigns shall .thus obtain the benefit shall correspondingly reduce the liability of the said obligees on the covenants undertaken by them in their said deed and that said covenants shall remain and shall only remain in force for any residue or liability upon their part.’ Julia Schoeneman, having died before her mother, as before stated, the defendant Loeb purchased the interest of her children in the property and paid therefor the sum of $6,000, to which it is conceded that he is entitled as a credit upon the bond, thus reducing the pi-incipal sum to $9,000.”
The legal questions presented are: (1) What, if any, was the interest of Julia Schoeneman in the property at the time she joined in the conveyance to Loeb ? (2) What was the interest of her children upon the death of the 'life tenant, she having died before that event? .(3) Has Hr. Hart, as a trustee or administrator of Hrs. Schoeneman, any interest in the unpaid $9,000 ? (4) Should he be required to pay to the plaintiffs the amounts by which their shares in the mortgage were diminished by allowing a credit of $6;000 on the bond ?
The two first of these questions involve a construction of the will of Jacob Lingsweiler. It will be noted that there is no gift made to the children except by the direction to the trustees to divide and pay over the estate to the children on the death of the wife, and the rule applicable in such case is that the gift to the class includes only those of the class living at the time that the gift takes effect. The testator, apart, however, from any rule, expressly provided that it was only the children “ then ” (i. e., at the death of his wife Elizabeth) surviving among whom his estate should be distributed. The direction to the executors is to divide among the children then surviving “ or issue of children, if any shall die leaving issue, such issue to take the parent’s share.”
In The Matter of Baer (147 N. Y. 348), where the will directed the trustees to apply the rents, etc., to the use of the life tenant, “and upon her death to convey the remainder ‘to the children and lawful heirs of my brother, Harmon Hendricks, deceased, to share and share alike,per stirpes,’ ” the court said: “Where final division *165and distribution is to be made among a class, the benefits of the will must be confined to those persons who come within the appropriate category at the date when the distribution or division is directed to be made. * * * In such cases the gift is contingent upon survivorship, and if it vests at all before the date of distribution, it is subject to be divested by the death before that time of a person presumptively entitled to share in the distribution. While this rule is sometimes made to yield to indications of a contrary intent in the will, yet it may be said to be a general rule, and there is nothing to be found in the will in question to prevent its full application. Moreover, there is not in this devise any words of direct and immediate gift to the children or heirs of the brother, but a direction that the trustees should convey to them at a future time on a certain contingency. They were to take through the medium of a power in trust, and the time of the vesting of the interest was thus deferred, in form at least, until the time of distribution. It is a case then where, as the cases express it, ‘ futurity is annexed to the substance of the gift ’ and warrants the application of the principle that where a future interest is devised, not directly to a given person, but indirectly through the exercise of a power conferred upon trustees, the devise is designed to be contingent, and survivorship at the time of distribution is an essential condition to the acquisition of an interest in the subject of the gift.” (See, also, Campbell v. Stokes, 142 N. Y. 23.)
It will thus be seen that the construction here given to the will is similar to that given to it by the learned trial judge, that Mrs. Schoeneman was vested with a remainder dependent upon the precedent life estate in her mother, and that by her death prior to her mother’s her interest ceased and her children succeeded as remaindermen under the will. The estate, however, of Mrs. Schoeneman and of all the other children of Jacob Lingsweiler, of which they became possessed at the death of their father, was, nevertheless, an estate which belonged to them, and was none the less alienable, even though liable to be defeated by the death of any of them before the death of their mother. (Sheridan v. House, 4 Keyes, 569; Moore v. Littel, 41 N. Y. 66; Woodgate v. Fleet, 64 id. 566 ; Ham v. Van Orden, 84 id. 257; Surdam v. Cornell, 116 id. 305.) The complaint correctly alleges, therefore, that under the *166will the six children of Jacob Lingsweiler became vested with equal undivided remainders in fee in said premises, each undivided remainder being defeasible by the death of its owner before the death of Elizabeth Lingsweiler, the widow and life tenant; “ that the interest of each child was alienable by such child ; that being so vested with such estates in remainder, said six children, together with their mother, the said widow of Jacob Lingsweiler, * * * by a written contract under their hands and seals, agreed with said Solomon Loeb to convey to him the said premises for a consideration of $35,000; ” and that pursuant to this contract they did execute and deliver two deeds purporting to convey the said premises to said Loeb with the usual full covenants; that by one deed they jointly covenanted, and by the second they jointly and severally covenanted, that they “were lawfully seized in their own right of a good, absolute and indefeasible estate of inheritance in fee simple of and in said premises ; ” and jointly and severally covenanted with said Loeb “that they had good right, full power and lawful authority to grant, bargain, sell and convey said premises; ” and jointly and severally covenanted with said Loeb “ that the said premises were free and clear of and from all former and other grants, titles, estates and encumbrances; ” and jointly and severally covenanted with said Loeb in the usual form “ that they would forever warrant and defend to said Loeb, the said premises against every person lawfully claiming the same.” .
Reading these covenants in the light of the conditions inserted in the mortgage and bond, it is evident as to what was the intent of the covenantors, and in what sense they were understood by the covenantee Loeb ; because, not only did they not have at that time an “ indefeasible estate of inheritance in fee simple,” but they knew it and Loeb knew it, and the provision was made that in the event of any of the children who were covenantors dying before the life tenant, then Loeb should purchase the interest which had thus jiassed to the issue of the child dying, and provision was also made for his being reimbursed for any moneys so paid, and for crediting the same upon the principal sum due on the mortgage. That this was the understanding of all the parties is further evident from the fact that Loeb had taken a lease of the premises for twenty-one years; that the deeds to him were expressly subject to such lease ; *167and, in addition, that the mortgage b.y its terms was not payable until the death of the ividow and life tenant.
Having thus in view the situation of the parties to each other respectively, it is not difficult to determine just what was the contract and the purpose of these several instruments. Loeb wanted to purchase the property, and the others were willing to sell; but there was the one difficulty in the way — that as the interest of any child was liable to be divested by his or her death before that of the life tenant, provision had to be made to protect Loeb for any amount that lie might be obliged to pay to secure the interest so failing — and as a result, we have the lease, the two deeds referred to, and the mortgage and bond, with similar provisions to protect Loeb, one of which extended the time for the payment of the principal of the mortgage until the death of the life tenant, when only it could be determined who had an indefeasible estate in fee simple in these premises. This estate of the children of Jacob Lingsweiler, which was a vested, alienable, future estate, and a separate and distinct interest from that of the contingent remaindermen, was what was jrarchased by the defendant Loeb and conveyed to him by the two deeds. This estate the children had a right to sell and Loeb to purchase; for, though it was but a future estate, whether vested or contingent, it was “ alienable in the same manner as an estate in possession.” (1 R. S. 723, § 13; id. 725, § 35; 3 Birdseye’s R. S. 2526, § 80 ; id. 2529, § 102.) Having, therefore, an estate or interest to sell, the consideration thereof, including the bond and mortgage, became at once the property of the six children, except that Charles was entitled to two-sixths by reason of the conveyance to him of Frederick’s interest.
Unquestionably, Loeb understood that he was not purchasing all the outstanding estates in the land, and the children, one and all, understood that they were selling them own interest, and did not purport to sell, and could not sell, the interest of any contingent remaindermen, and, hence, the agreement in regard to the reduction of the mortgage. This agreement embodied in the bond is, that in “ the event that the title to any share or interest in the said premises shall fail,” Loeb should make such reasonable payment as should be necessary to acquire a good title, and that the amount of money so paid should be credited upon the bond and mortgage. This is the *168whole agreement. All of the six children, except Frederick, who had conveyed to Charles, might have further agreed that in case any of them should die before their mother, and Loeb should acquire by purchase the interests of those who would then take an estate in possession in the lands on the death of the widow, and thus become entitled to a credit on the bond and mortgage, then the estate of the child so dying should not have any interest in the bond and mortgage and should repay to the surviving children the amount by which the said bond and mortgage was so reduced. ■ It was upon the theory that such an agreement should have been made, and because deemed by him to be entirely equitable, that the learned trial judge reached the conclusion that the defendant Hart, as trustee of Mrs. Schoeneman’s estate, had no interest in the bond and mortgage, and should repay to the plaintiffs the amount which they lost by the payment which Loeb had to make.
The difficulty with this conclusion is, that there is no evidence of any such agreement having been made between the parties, and the mortgage and bond are payable to all the children by name, respectively, and to “ their executors, administrators or assigns.” Moreover, the cash purchase money was paid to the children; and it would be just as equitable for the estate of Mrs. Sclioeneman to pay back to the others what she received of this cash as to take away from her estate the legal interest which she undoubtedly had in the bond and mortgage. What Loeb purchased and paid cash and gave a mortgage for was the estate which the children then had in the property; but having been undoubtedly advised of, and having in mind the contingency of the death of one or more or all of these children before their mother, provisions were inserted in the bond and mortgage, and covenants in the deed, which were intended to protect Loeb. He took the risk of the children dying and bought all that he could then purchase, and gave therefor the cash and mortgage to those who sold him all they then had to sell. The latter then acquired for the interests which they parted with as good a legal title to the bond and mortgage as they did to the cash purchase money. The agreement between themselves was that they should all stand equally, all receive an equal amount of the proceeds, all be equally interested in the mortgage, all be liable on the covenants in the deed, and that any reduction of that liability should inure to the *169benefit of all. Such an agreement is not one which a court of equity would be warranted in setting aside, even though we conclude that it would have been fairer, in view of what has transpired, if some provision had been made by which, upon the death of one of the children, her interest in the mortgage would have ceased, and the others be entitled to be reimbursed for anything that Loeb should have been required to pay to secure the interest which by death thus failed.
It is urged, however, that the covenants into which Mrs. Schoeneman entered with the others are sufficient to justify the court in withholding her estate from any participation in the mortgage, and in compelling it to make good to the others what they have lost by reason of her death and consequent failure of title; that while conceding that Mrs. Schoeneman had, and that Mr. Hart now has, the legal title to a one-sixth interest in the bond and mortgage, he should in equity be debarred from ever asserting or enforcing such ownership.
The argument presented to support this view is that, by their confirmatory deed to Loeb, the children jointly and severally covenanted that they were seized of the premises in fee, and had full power and authority to convey them; that, as it is now found that Mrs. Schoeneman was not seized of her one-sixth, and could not and did not convey it, it became necessary for Loeb to pay, and he did pay, the sum of $6,000 for such interest; that by the credit for this amount given to Loeb in this action, the four surviving covenanting children have paid it and discharged the obligation of their covenant; and that, since it was the title to the share of one of the joint and several obligors, Mrs. Schoeneman, that failed, those who paid are entitled to be subrogated to the right of Mr. Loeb, and are entitled to recover $3,500, the difference between the $6,000 damages payable by Mrs. Schoeneman and her one-sixth of the $15,000 mortgage. And in this connection the principle is invoked that “if as between joint debtors it has become the duty of one of them to pay the entire debt, the others, if they shall be compelled to pay it, will be subrogated to the securities and means of payment held by the creditor against the former, just as if they had been sureties of the former eo nomine.” (Sheld. on Sub. § 170.)
*170The principle invoked, it will be noted, is applicable only to joint debtors in a case where -it has become the -duty of one of them to pay the entire debt, which is not this case, nor do we think the principle of subrogation applicable. The obligation, which was joint aiid several, was coneededly discharged by the payment of the $6,000 ; and it was provided in the bond that any payment so made should go in reduction of the liability and inure to the benefit of all. After the purchase of the estate of the Schoeneman children Loeb acquired perfect title, and he did this by -purchasing from them at an agreed price, and there is, therefore, no liability of any one on these covenants of warranty. But granting that such liability did exist, still the reduction of such liability is shared equally by all the children. The covenants in the deed, moreover, were to the defendant Loeb, his heirs and assigns, and were not covenants in favor of the co-covenantors as against each other. Neither Loeb nor any one claiming under or through him is here asking for the enforcement of any of these covenants, or claiming damages for any breach of them. The intent in making them joint and several was to enable Loeb, upon a breach, to recover against all jointly or against any individual covenantor. This, however, does not make them effective as between the co-covenantors, nor is there any language in any of the instruments from which a covenant can be spelled out on the part of Mrs. Schoeneman to her co-covenantors creating any obligation in their favor against her estate.
Much of the obscurity' concerning the real legal relations of the parties is due to the fact that the $6,000 was paid to the children of Mrs. Schoeneman, who by her will will be entitled to receive what her administrator may recover in this action as part of the proceeds of the mortgage, and it is this feature of their receiving more than any of the others that inclined the court to seek some principles upon which it could debar Mrs. Schoeneman’s estate from participating in the mortgage, and to find a way to compel it to pay what the other children of the testator have lost by reason of the payment which Loeb was obliged to make to Mrs. Schoeneman’s children. -1 think, however, that if, instead of regarding such payment as having been made to the latter, we were to substitute entire strangers, and keep entirely separate and distinct the legal entities, viz., the administrator representing the estate of Mrs. Schoeneman, *171and the third parties who by her death had acquired the interest which Loeb had purchased, we can divest ourselves of the equitable views which are necessarily forced upon us when considering this as a contest between Mrs. Schoeneman’s children and the surviving children of the testator.
The same consideration that supports Mrs. Schoeneman’s title to the mortgage supports her title’ to the cash purchase money paid, and if her estate is to be mulcted in damages by reason of her death and failure of title, she should not only be deprived of any interest in the mortgage and pay what the others lost by reason of Loeb’s payment for the outstanding interest, but by parity of reasoning her estate should also be required to repay the proportion of the cash purchase price which she received upon the delivery of the deed. I think it improbable that Mrs. Schoeneman ever intended to enter into an agreement which would be fraught with such consequences to her estate. At the time the property was sold there were the interests of the life tenant and of the six children to be transferred. Assuming for the purposes of calculation that the interest of the life tenant in the cash purchase money of $20,000 then paid was $5,000, it would leave to be divided among the six children $2,500 apiece. If we could assume, therefore," that the contract was not to sell for $2,500 and her interest in the mortgage what she then had, but was an agreement by which she was to indemnify her co-covenantors in case of her failure to outlive the life tenant, then, as it has turned out, her estate would be entitled to no interest in the mortgage and would be liable for $3,500, the difference between her interest of $2,500 in the mortgage and the $6,000 which Loeb paid for the outstanding interest to her children, arid, in addition, her estate would be liable for the cash purchase money which she received. Or, if we assume that her estate would be allowed to retain the cash paid to her the net result of such an arrangement to Mrs. Schoeneman, would be that her future intereát in the premises, which was concededly a real one, was conveyed to Loeb, and that for such interest Mrs. Schoeneman’s estate was not only to receive nothing, but in addition was to pay damages as the. result of ■ the - transaction. That no such agreement in terms was made is conceded, nor can I see any way in which it can be implied from the documents which the parties used to effectuate their then intention; and *172it. would be giving a forced and unreasonable construction to the covenants in the deed, in the light of what was intended to. be effectuated between the parties, to hold that by the transaction Mrs. Schoeneman intended to speculate upon her outliving the life tenant, and was not only wagering the interest which she then had in the property, and which was valuable — not only risking the increase which years might add to its value, and which had been conveyed to Loeb — but that in addition she wagered that if she did not survive her mother, her estate was to pay the resulting damage. Such an assumption is much more inequitable and unreasonable than the arrangement which I think was undoubtedly made by which the parties sold their then interest for a consideration in which all participated, and from which all benefit and in which all assumed an equal liability.
To summarize, therefore, I think that in selling to Loeb Mrs. Schoeneman acquired an equal interest with the others, not only in the cash purchase money paid at the time, but also in the purchase-money mortgage now in suit, and that the liability created by the covenants and the provisions of the bond was, by the agreement which they made, shared by all, and has been discharged by the credit upon the mortgage of $6,000; that the covenants run to Loeb, his heirs and assigns, and were intended to protect him, and were not intended to protect one covenantor as against the others; that the theory and arguments advanced for holding Mrs. Schoeneman’s estate liable to make good to the others what they have lost by the credit upon the mortgage of the $6,000 would be equally effectual to charge her estate with the cash purchase price which she received at the time of the delivery of the deeds to Loeb; and thence the conclusion would follow that for an interest which she could sell and convey she was not entitled to receive anything.
The decision is in the short, new form allowed by section 1022 of the Code of Civil Procedure, and although the general exception prescribed by that section was not taken, but specific exceptions to portions only of the decision, leaving material parts not excepted to, I think they were sufficient to raise the question as to the interest of Hart as trustee in the mortgage.
Having reached a different conclusion from the learned trial judge, the portions of the judgment appealed from should be reversed, and *173Hart, as administrator or trustee, should be awarded a one-sixth interest in the balance of $9,000 due on the mortgage, and the interests of the other parties should be correspondingly reduced, and the provision for the payment by Hart of any portion of the costs below stricken out, with costs of this appeal to the said Hart.
Judgment affirmed, with costs.