Court Opinion

ID: 3577722
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:29:32.491531+00
Date Added: 2024-06-11T13:52:21.925529
License: Public Domain

The right of the plaintiff to maintain this judgment, depends primarily upon the question whether *Page 193 
the judgment recovered by Guernsey against Smith, in October, 1838, was a lien upon the lands from which the fund in controversy was derived.
It is clear that the conveyance of the premises in question on the 1st of March, 1838, by Townsend and wife to Nevins  King, taken in connection with the agreements executed by the latter to Smith, Townsend and others, and to the New York and Erie Railroad Company, although invalid as a trust, it not having been made for either of the purposes for which alone express trusts are permitted (see Statute of Uses and Trusts, §§ 45, 55), was nevertheless valid as a power in trust, under section 58 of the same statute. This is conceded by the counsel on both sides. Under this conveyance, therefore, Smith in common with his associates, had a contingent equitable right to his ratable proportion of the proceeds of the lands. It is not claimed that this equity could be seized and sold upon execution. The mode of reaching such an interest is prescribed by the statute. (1 R.S. p. 734, § 93; p. 735, § 103.)
But the counsel for the respondent contends that, aside from this mere equity, Smith had, subsequently to the creation of the power, a legal title to, or interest in the lands, upon which the judgment in favor of Guernsey might attach as a lien; and in support of this position he cites and relies upon sections 47 and 49 of the statute of uses and trusts. (1 R.S. pp. 727, 728.) He also cites section 58 of the same statute, and insists, no doubt justly, that this case falls directly within the latter section. His argument is, that as, under this section, no estate could vest in Nevins and King, the trust to them being valid simply as a power, Smith, as the beneficiary of the power, became, by virtue of section 47 of the statute, vested with a "legal estate in the land." But this is an entire misapprehension of the statute. A very clear exposition of these provisions of the statute concerning trusts, is given by COMSTOCK, J., *Page 194 
in the case of Downing v. Marshall (23 N.Y.R. 366, 379). Section forty-seven refers exclusively to a class of passive trusts where the immediate possession and whole beneficial use of the land is given directly to the cestui que trust, the trustee being made by the deed the depositary of a mere naked title, with no active duties to perform in respect to the property. In such cases this section, in connection with section forty-nine, vests the whole estate in the beneficiary. The deed takes effect upon the title, but not according to its terms.
Section fifty-eight, on the other hand, applies to cases where active duties are imposed upon the trustee, and where no rights are given to the beneficiary except through the execution of the trust. In cases of this class, if the trust is not one which is authorized by section fifty-five, no estate whatever passes under the deed, either to the trustee or the cestui que trust, but the title remains in the grantor, the grantee becoming, if the duties imposed upon him are such as can be legally and properly executed, the mere trustee of a power. A case might perhaps be supposed, which would belong partly to one and partly to the other of these classes; as where, by the same instrument, the immediate possession and use is given to the beneficiary, while certain powers in relation to the property are at the same time conferred upon the trustee; but this is not such a case. Here no possession or pernancy of the profits is given to the beneficiaries, or either of them, and consequently they can take no title whatever under section forty-seven. The case falls entirely within section fifty-eight of the statute, and by virtue of the next section, viz: section fifty-nine, the estate in all such cases remains in "the persons otherwise entitled, subject to the execution of the trust as a power."
This language excludes the idea that any title passes to any one by virtue of the deed. The title does not pass; it "remains." The persons "otherwise entitled," must be *Page 195 
those in whom the title would rest independently of the deed, being of course the grantors themselves. It is clear, therefore, that Smith had no title to the lands in question, under section forty-seven, as the beneficiary of the trust attempted to be created.
There is, however, another view of the case which, although not very distinctly presented, is perhaps hinted at in the brief of the respondent's counsel. It claims that the several deeds from Smith to Nevins, from Nevins to Townsend, from Townsend to Nevins and King, and the counter agreements executed by the latter, being all parts of one and the same transaction, are to be read and construed together as one instrument. Assuming this to be so (as perhaps it is, so far as the papers executed on or about the 1st of March, 1838, are concerned), it might be urged with much apparent force that as the conveyances from Smith to Nevins, and Nevins to Townsend, were merely preliminary to that from Townsend to Nevins and King, and designed solely as a means of conveying from Smith to Nevins and King the powers which were ultimately vested in them, no other or greater effect ought to be given to the two previous deeds than to the final deed from Townsend to Nevins and King. That deed conveyed no title, but simply a power. Why, then, it might be asked, should the prior deeds which, so far as the trust to Nevins and King was concerned, were merely intended to give effect to that deed, be held to have done more?
It would indeed seem that if the whole object of this series of deeds was to create the power vested in Nevins and King, then no title could have passed to any one under them, or either of them; in other words, that the effect would have been the same as if the conveyance had been directly from Smith to Nevins and King, in which case the title to such undivided portion of the lands as was conveyed by Smith on the 1st of March, 1838, would, under section fifty-nine of the statute, have remained in Smith; *Page 196 
and in that case, if it could be fairly maintained that as to the ten thirty-eighth parts belonging to Smith, the fund in controversy should be held to have been derived from that portion of the lands, the plaintiffs would be entitled to the money they have received. There is, however, an insurmountable objection to this conclusion. The reasoning by which it is reached assumes that the sole object of the deed from Smith to Nevins on the 1st of March, 1838, was to create the power in Nevins and King, in which the series of conveyances resulted. But such was not the fact. That conveyance was given in part execution of the plan adopted to carry into effect the division and distribution of the lands among all the joint proprietors which had been agreed upon. It was thought proper for that purpose to vest the whole title and interest, both legal and equitable, in Nevins, and the deed from Smith was essential to that object. Unless that deed is held to have taken effect according to its terms, the whole scheme of distribution was a nullity. There was nothing whatever to prevent its taking effect as designed, and hence Smith, by its execution, was completely divested of all legal title to the lands, and as it has been shown that he could derive no such title under the trust, it follows that the judgment of the supreme court was erroneous, and should be reversed.
HOGEBOOM, J., was absent. All the other judges concurring, judgment affirmed. *Page 197