Hotchkiss v. Elting

Hogeboom, J. The deed in question does not convey to the defendant any present or future interest in the premises, nor any right to the possession, use or occupation, or the rents, issues or profits thereof, but expressly reserves the latter to the grantor himself during his life. The trust therein mentioned is simply to convey the premises, subject to the reservation, to such person or persons as the wife of the plaintiff should by writing appoint. This is not one of the trusts authorized by law, and is therefore absolutely void. (1 R. S. 727, 728, §§ 45, 55. Yates v. Yates, 9 Barb. 324, 340. Campbell v. Low, Id. 591. Jarvis v. Babcock, 5 id. 139. Voorhees v. Presbyterian Church of Amsterdam, 17 id. 103. Beekman v. People, 27 id. 273. McCaughal v. Ryan, Id. 376.) The statute further provides that every disposition of lands, whether by deed or devise, shall be directly to the person in whom the right to the possession and profits shall be intended to be vested, and if made to any person in trust for another, no estate or interest, legal or equitable, shall vest in the trustee. (1 R. S. 728, § 49. Boynton v. Hoyt, 1 Denio, 57. Rawson v. Lampman, 1 Seld. 456.) In this case the trustee is not vested with the right to the possession, rents — 45 — or profits for any purpose, either for himself or any other person, and the deed must therefore he regarded as void for that reason, also, under the section last named. The deed makes no disposition of the rents and profits during the life of Mrs. Hotchkiss, in case she survives her husband, before exercising her power of appointment; but I think that does not avail to make the deed valid. The deed vests no title to those rents and profits in the defendant. I think not even by implication; imposes upon him no duty whatever, except in a particular contingency; and is a mere attempt to divest the plaintiff’s title by a naked passive trust. As such trusts were intended to be entirely abolished by the revised statutes, and as no stronger case of a mere passive trust than that presented by this deed can be conceived, except one which imposes no duty whatever upon the trustee in any possible contingency, the instrument in question, so far as it aims to create a trust, must be regarded as inoperative and void. Such a paper, however, if it be wholly void upon its face, would carry its own condemnation with it, and would not be, in a proper and legal sense, a cloud upon the title. (Mayor of New York v. Meserole, 26 Wend. 136. Van Doren v. Mayor &c., 9 Paige, 388. Cox v. Clift, 2 Comst. 118. Heywood v. City of Buffalo, 14 N. Y. Rep. 534.) We must therefore see if it be or ever was apparently valid for any purpose, before we can invoke the interposition of a court of equity to set it aside. And it is insisted by the plaintiff that, though void for the purposes of a pure trust, it was, during Mrs. Hotchkiss’ life, valid as a power in trust; that is, that it conveyed to the defendant under the form of a trust a power to convey lands, which was in itself valid, and under a proper appointment by her would become operative and obligatory upon the grantee of the power. Section 58 of the article of uses and trusts declares, "that where an express trust shall be created for any purpose not therein before specifically enumerated, no estate shall vest in — 46 — the trustees, but the trust, if directing or authorizing an act which may be lawfully performed under a power, shall be valid as a power in trust, subject to the provisions of law in regard to powers. (1 R. S. 729, § 58.) A power is an authority to do some act in relation to lands which the owner granting the power might himself lawfully perform. (Id. 732, § 74.) The power conferred by this deed is a power to convey the farm in question; it is a power which the grantor might lawfully perform, and hence the provision in the instrument in question would seem to have been at its creation a valid power in trust. If the act of appointment had been exercised by Mrs. Hotchkiss during her life, the power vested by the deed in the defendant would have become operative, audits execution on his part imperative; for “every trust power, unless its execution or non-execution is made expressly to depend on the will of the grantee, (in this case the defendant is the grantee of the power,) is imperative, and imposes a duty on the grantee.” (Id. 734, § 96.) But inasmuch as Mrs. Hotchkiss died before her husband, and during the existence of his life estate, and never in any way exercised her power of appointment, that is, her right to designate to whom the conveyance of the lands should be made by the trustee, or more properly the grantee of the power, the power has ceased to exist, and can never hereafter be exerted. Its execution has become impossible, and for all practical purposes it may be regarded as for the future forever extinguished. (Barber v. Cary, 11 N. Y. Rep. 402.) What then becomes of the estate ? Having never passed out of the grantor, it remains in him. His estate was liable to be defeated by the execution of the power, but that has never been done, and now never can be. The result therefore is, that Hotchkiss now holds the property disembarrassed of any condition whatsoever. The only remaining question is, whether this presents a case of equitable cognizance; that is, whether the existence of a power in trust, valid in itself and once capable of exe* — 47 — cution, but now incapable of execution by reason of the death of Mrs. Hotchkiss without an exercise of the power of appointment, presents a case fit for the exercise of the equitable power of the court in removing a cloud upon the title by reason of the necessity of resorting to extrinsic evidence to establish the extinguishment of the power; that is, to prove, 1. The death of Mrs. Hotchkiss; and, 2. The non-exercise of the power of appointment during her life. The difficulty which presents itself to my mind in entertaining jurisdiction in such a case arises out of the fact, that the d$ed in question is not in itself void; or if so, is void on its face as attempting to create an illegal trust; but is valid in itself as containing on its face a valid power in trust, which has only become extinguished by the lapse of time, or more properly, by default in the execution of the power. It is not therefore the case of a deed void at the time of its execution by reason of matters patent upon its face, or extrinsic facts then existing, such as fraud or duress. I am not aware that the doctrine of setting aside the instrument as a cloud upon the title has, in any of the modern decisions, been extended to cases where the deed has only become ineffectual by reason of subsequent events not impeaching its original validity, but only destroying its future operation, unless there be some circumstances which bring the case under some of the other heads of chancery jurisdiction; such as discovery, injunction or the like. The cases which appear in our own state to have gone farthest in support of the doctrine for which the plaintiff contends, are Hamilton v. Cummings, (1 John. Ch. Rep. 520,) and Pettit v. Shepherd, (5 Paige, 493.) The first case was a bill filed for the cancellation and surrender of a bond on which the defendant had brought an action at law against the plaintiff, which action was at issue and about to be tried. The plaintiff (in equity) alleged that the bond was executed simply to secure the defendant for becoming bail for the plaintiff’s intestate, and that such liability had become ex — 48 — tinguished. The proof that such was the purpose for which the bond was given was contained in an unsealed receipt executed cotemporaneously with the bond. Chancellor Kent held that at law such a paper would not be admissible to contradict the terms of the bond, which was a bond for the payment of money. But that, accompanied by proof that the obligee’s liability as bail had become extinguished, and that the bail had never been damnified, it formed an equitable defense to the bond, and justified a resort to an equitable tribunal for relief. In the opinion of the chancellor, there are some dicta tending to support the idea that jurisdiction exists in a court of equity to set aside a deed as a cloud upon the title, whether void on its face or by reason of extrinsic facts, and also when, although originally valid, it has ceased to be any longer effectual by the operation of subsequent events. But this was not the point in judgment; and if it was, the chancellor’s position, in part at least, is plainly at variance with the more modern cases, and with what is now regarded as the established law on this subject; to wit, that for defects apparent upon the face of the instrument, equity will not interpose. The case itself may be defended, upon the well established ground of giving effect to a meritorious equitable defense unavailable at law. The case of Pettit v. Shepherd (5 Paige, 493) was a bill filed to stay the salo upon execution of the plaintiff’s premises, upon a judgment in favor of the defendant against a party from whom the plaintiff had purchased; the judgment being a lien upon the premises as against such party, but not as against a bona fide purchaser from such party (which the plaintiff claimed to be) by reason of the lapse of more than ten years since the judgment was docketed. The ultimate decision turned on the question of the bona fide character of this purchase; which was negatived by the decision' of the court. But the doctrine was upheld, that if the purchase had been bona fide the suit would have been well brought to restrain by injunction a sale, which would have been followed by a sheriff’s — 49 — certificate and deed, which would have been a cloud upon the title. The language of the chancellor is, “And if a court of chancery would have jurisdiction to set aside the sheriff’s deed which might be given on a sale, and to order the same to be delivered up and canceled, as forming an improper cloud upon the complainant’s tit! ^ to his farm, it seems to follow, as a necessary consequence, that the court may interpose its aid to prevent such a shade from being cast upon the title, when the defendant evinces a fixed determination to proceed with the sale.” (5 Paige, 501.) In the case at bar no such fact appears. The complaint does not charge any intention on the part of the defendant to convey the premises or disturb the plaintiff’s possession, but only with a simple assertion of title on his part in trust for the heirs of Mrs. HotchMss—an assertion emphatically contradicted in contemplation of law by the necessary legal effect of the terms of the deed itself. If Biting, under cover of this pretended title, had actually executed a conveyance to a tMrd person, it may be that a suit would lie to set aside the latter deed as a cloud upon the plaintiff’s title. It may be, also, that if Biting had threatened to execute a deed, under the pretense of the power thus practically extinct, an injunction would lie to prevent it, and the court thus having jurisdiction of the case might retain it for the purposes of complete justice, and declare the power extinct and the injunction perpetual. The plaintiff is in the undisturbed enjoyment of his property, with abundant means at his command to resist successfully any action of ejectment or other proceeding founded upon the instrument in question, which the defendant may institute against him. If the plaintiff wishes to have the question definitively settled, at once, he can proceed under the statute “to compel the determination of claims to real property in certain cases.” (2 R. S. 313.) And he may also preserve the evidence of Biting, as to the non-exercise by Mrs. HotchMss of the power of appointment, under the statute, entitled “Of proceedings to — 50 — perpetuate testimony.” (2 R. S. 398.) It is possible that some party may have a conveyance from the grantee of this power under an appointment from Mrs. Hotchkiss. In the present suit, upon this demurrer, it must be taken to be otherwise. But the courts should not lightly set aside an instrument valid in itself—valid at least as a link in the chain of title—which may by possibility be needed by some party not now before the court. Ho one would think' of applying to set aside a will which contained a power of sale to executors for the purpose of paying certain debts or certain legacies, simply because the executors had fully administered the estate, and those debts and those legacies had been fully paid without an exercise of the power. Hor do I suppose an equity suit would lie to set aside a judgment as a cloud upon the title, simply because the judgment had been paid. One reason would be, that the judgment, although paid, might be wanted for the purpose of establishing a necessary link in the title to real estate. Another reason would be, that a perfect defense would always exist at law against any attempt to enforce the judgment. (Livingston v. Hollenbeck, 4 Barb. 9. Van Rensselaer v. Kidd, Id. 19. Van Doren v. Mayor &c. of New York, 9 Paige, 388.) If a party received a sheriff's deed under a sale upon the satisfied judgment, it is quite possible a suit in equity would lie to set. aside such sheriff's deed as a cloud upon the plaintiff's title. (Heywood v. City of Buffalo, 14 N. Y. Rep. 541. Lounsbury v. Purdy, 18 id. 520. Ward v. Dewey, 16 id. 522.) A suit in equity would scarcely lie to surrender and cancel a paid note—over due—for there would be an ample defense at law. But if the note was negotiable and had not reached its maturity and was about to be transferred to a third party, there might be ground for an injunction and a surrender of the note. It is suggested, however, that this objection is substantially one of want of jurisdiction, and not having been taken — 51 — specifically for that cause, under subdivision 1 of section 144 of the code, but the objection being under subdivision 6, for a different cause, it cannot now be entertained, on demurrer. (Code, §§ 144, 145, 148.) Several cases in the New York common pleas and superior court are cited in support of this position. (Viburt v. Frost, 3 Abbott, 119. Hobart v. Frost, 5 Duer, 672. Wilson v. Mayor &c. of New York, 1 Abbott, 4. 6 id. 6.) These cases are not conclusive authority in this court; and if they are intended to apply to a case like the present, I cannot yield my assent to them. The question here is not one of jurisdiction, either of the person or subject matter, hut of the legal sufficiency of the matters in the complaint to constitute a cause of action. This court has unquestionably jurisdiction of an action to remove a cloud upon the title to land; and the point is, whether the matters alleged in the complaint are sufficient to constitute a cause of action of that description. It seems to me to come within the very terms of subdivision 6 of section 144, and that a demurrer for that cause is the appropriate one to present the question. If the question were one of jurisdiction, and in its nature incurable, I should have great doubt whether it would not be within the duty and at all events within the power of the court to entertain it by the provisions of § 145, although the demurrer was under subdivision 6 of section 144. If the complaint, on its face, showed a want of jurisdiction, it would necessarily show that the facts therein stated did not constitute a cause of action in favor of the plaintiff against the defendant, in the tribunal in which the suit was brought. Section 145 requires the defendant to specify the grounds of demurrer, and authorizes the court to disregard it, if it does not. But by section 148 the omission to make the specific objection does not waive it, and it is difficult to see why the court should refuse to entertain an objection in its nature insuperable, when at a subsequent stage of the action it would be obliged to give effect to it. There are cases, undoubtedly, where an omission to object to the juris — 52 — diction of the court, in due season, may give the court jurisdiction of the person of a party before it; and perhaps the cases cited from the superior court of New York are of that class. To which it may be proper to apply the doctrine that non-objection implies consent, and to refuse to give effect to the objection unless plainly specified in the demurrer. But to a case like the present, where, if I am right, the court would refuse to. give the plaintiff relief although he proved every allegation in his complaint, the doctrine is inapplicable. It is, in my opinion, a misnomer to call this an objection to the jurisdiction of the court, in the proper and legal sense of that term. (See Hillman v. Hillman, 14 How. 456; Richards v. Edick, 17 Barb. 260.) [Columbia Special Term, September 16, 1861. Hogeboom, Justice.] I am therefore of opinion, without considering the question whether all the necessary parties are before the court— which is not presented on this demurrer—that the demurrer is well taken, and that judgment must be entered for the defendant, thereon, with costs, with leave to the plaintiff to amend his complaint on payment of costs.