Opinion
Argued June 6, 1895
Decided October 8, 1895
Hector M. Hitchings for appellants. Michael H. Cardozo and Edgar J. Nathan for Horatio Gomez, trustee, respondent. John A. Straley and Thomas McMahon for Tracy et al. respondents.
The demurrers interposed were upon the ground that the complaint did not state a cause of action. It, in substance, alleges that on the 2d day of May in the year 1821, one Harmon Hendricks, being then the owner in fee of the lands in question, executed and delivered a deed of the same to Solomon I. Isaacs, Uriah Hendricks and Hetty Hendricks upon the following trust: "To pay over into the hands of Hetty Hendricks, at such dates and times as she might fix for the payment thereof, all the rents, issues and profits of the above bargained and described premises and to convey the said premises by a full and sufficient conveyance in law to such persons as she, the said Hetty Hendricks, might in and by her last will and testament, or by appointment in nature thereof, nominate and appoint, and in default of such last will and testament or appointment, then to all the lawful issue of said Hetty Hendricks then living, as tenants in common and not as joint tenants." Hetty Hendricks subsequently married Aaron L. Gomez, and on the 17th day of May, 1831, they brought an action in the Court of Chancery of New York against their then living children, including the plaintiffs in this action and the trustees, in which it was adjudged and decreed that the trustees, or the survivor or survivors of them, and any trustee or trustees hereafter substituted, shall have full power, with the consent and approbation of the complainants, or the survivor of them, to be expressed by their, his or her legal execution and acknowledgment of the leases hereinafter mentioned, to make and execute valid leases of the premises, or any part thereof, for the term of twenty-one years, with covenants of renewal for several successive terms of twenty-one years, not exceeding three such additional terms, etc., with such other covenants and upon such conditions as the trustees in their discretion shall deem proper and shall consider most advantageous to the interest of Hetty Gomez and her children. After the making of such decree the trustees, acting upon the authority thereof, executed and delivered to one John R. Peters five leases of separate parcels of the lands in question for a period of twenty-one years each, with covenants for three renewals of twenty-one years each, with an annual rent reserved of five per cent on the value of the property, to be determined by appraisal thereof at each renewal. On the 15th day of August, 1855, Hetty Gomez made her last will and testament, and in February thereafter died, leaving six children her surviving, her husband having in the meantime died. Her will was duly proved and admitted to probate by the surrogate of New York county as a will of real and personal property. In it she exercised the power of appointment given her by the deed of Harmon Hendricks by directing a conveyance of the property described in the deed by the trustees therein named to Horatio Gomez, one of the defendants herein, and Hyman N. Hart, and the survivor of them, as joint tenants and not as tenants in common, but in trust, to pay to her husband during his life all the rents, issues and profits thereof, and then to pay the rents, issues and profits of a one-sixth part thereof to each of her surviving children, and upon the death of such child to convey the fee simple absolute to the heir at law of such child. Horatio Gomez alone qualified as such trustee. There have been two renewals of the leases. The last expired on the first day of November, 1894. The defendants, Tracy and others, as the successors of Peters, demanded another renewal of the leases, which is the third and last provided for. This action is brought to obtain an adjudication that they are not entitled as matter of law to a further renewal of the leases, and that Horatio Gomez, as trustee, etc., be enjoined and restrained from executing to them a renewal of such leases.
It may not be important to determine whether Horatio Gomez, as trustee under the will of Hetty Gomez, has the power to execute a renewal of the leases, for if the tenants, Tracy and others, are entitled to such a renewal, this action cannot be maintained. Horatio Gomez is, however, as we have seen, the trustee appointed by the will of Hetty Gomez to carry out the trust therein created; that trust requires him to rent the property and to pay over the rents, issues and profits thereof to her children. The trust created by the deed terminated with her death, and with the termination of the trust the powers of the trustee became extinct except to turn over and convey the trust property as in and by the deed they were required. Strictly speaking, Horatio Gomez may not be a survivor of or a substitute to the trustees appointed by the deed. He derives his power from the will. They derived theirs from the deed. His power commenced when theirs terminated. He takes title to the property in trust under the will, and has the control and management thereof. He takes it, however, subject to the rights acquired of other parties, and if the defendants, Tracy and others, as tenants are entitled to renewal leases, we see no reason why he may not be compelled to execute them.
The trust created by the deed being for the life of Mrs. Gomez, terminated with her death, and with her death the powers of the trustees were, as we have seen, at an end, except to turn over and convey the trust property as directed by the deed. They, therefore, had no power under the deed to thereafter renew leases, or in the leases executed by them to provide for the renewal of leases after her decease. ( In the Matter of McCaffrey, 50 Hun, 371.) The whole question, therefore, turns upon the decree made by the Court of Chancery in 1831. That decree authorized the leases in question. Had that court jurisdiction of the parties and the power to make the decree ? As we have seen, Mrs. Gomez and her husband were complainants. The trustees under the deed and all of her then living children were defendants. All of the persons then in being having any interest in the premises, either as trustees, life tenant or remaindermen, were parties. The children were represented by a guardian ad litem. The case was referred to a master to determine whether the decree prayed for was for the benefit of the infants. So far as the proceedings are disclosed they were regular and in due form, and if the court had the power to make the decree it must be held to be valid and binding upon them. Upon this question it becomes important to first ascertain the nature of the action or proceeding. The complaint alleges that it was instituted for an adjudication of the rights of the trustees to make leases and renewals of leases for long terms of years. If this allegation is to be taken as the nature and purport of the action, the door is open for a wide field of discussion as to the power and jurisdiction of the late Court of Chancery, but the complaint also alleges that the decree of the Court of Chancery is in writing "dated and filed in the county clerk's office of New York county on the 31st day of October, 1831, a copy of which is hereto annexed, and plaintiffs hereby refer to the same as part of this allegation of their complaint, and as though the same was specifically and at large set out herein." This latter allegation making the decree itself a part of the complaint, we think must be deemed to modify and explain the former allegation alluded to, and inasmuch as the petition or complaint is not before us it becomes our duty to look into the decree for the purpose of determining the nature of the action. Upon referring to the decree its purpose is quite apparent. It determines that the lease of the property was for the benefit of the infant defendants; that the trustees have leave to execute leases for the terms designated, upon such conditions as shall be approved by the father and mother of the infants; in other words, it is a decree granting leave to lease the real estate of infants and nothing more. The power to mortgage, lease or sell real estate of infants, or of any interest therein, at that time vested in the Court of Chancery under the express provisions of the statute. "Any infant seized of any real estate, or entitled to any term for years in lands may by his next friend, or by his guardian, apply to the Court of Chancery for the sale or disposition of his property." * * * "Whenever it shall appear satisfactorily that a disposition of any part of the real estate of such infant, or of his interest in any term for years is necessary and proper either for the support and maintenance of such infant, or for his education, or that the interest of such infant requires, or will be substantially promoted by such disposition on account of any part of said property being exposed to waste and dilapidation, or on account of its being wholly unproductive, or for any other peculiar reason or circumstances, the court may order the letting for a term of years, the sale or other disposition of such real estate or interest to be made by such guardian or guardians so appointed in such manner and with such restrictions as shall be deemed expedient." (2 R.S. [ed. of 1827] p. 194, §§ 170, 175.) The court doubtless had the power to do by action that which it was authorized to do by proceeding. The court had the power to appoint a guardian to execute the leases, but, inasmuch as the trustees under the deed had the power to lease the premises during the lifetime of Mrs. Gomez, the court saw fit to empower them to execute the lease in the place of a guardian.
The plaintiffs alleged that great injustice will be done them by a renewal of the leases, but the renewal has to be upon the basis of an annual rental of five per cent of the appraised value of the property. Possibly a better contract might now be made, but the amount of rent reserved is fair and reasonable. The defendants have erected substantial buildings upon the property greatly improving it and thereby largely increasing the rent to the lessors and the ultimate value of the property. These buildings were doubtless erected by the tenants upon the supposition and understanding that they were entitled to a renewal of the leases. The merits seem to be with them, and, as we construe the decree of the Court of Chancery, there can be no doubt as to its jurisdiction or power to grant the decree in question. Under the deed the infants were conditional remaindermen. They took the fee, subject to the power of appointment by Mrs. Gomez. They, at that time, had an interest which they, if adults, had the power to lease or convey. Being infants, the court could exercise that power for them. Upon the execution of the power of appointment by Mrs. Gomez, given by the deed, they were deprived of their interest as remaindermen, but they were given another and different interest in the premises. This, however, they take under her will and subject to all of the burdens and conditions imposed by her. She joined in the execution of the leases which became binding upon her and her estate. The provisions of the trust created by the deed were fully executed, and we discover nothing in the proceedings had that is any violation of the terms of the provisions of that trust.
The judgment should be affirmed, with costs.
All concur.
Judgment affirmed.