Opinion
January, 1915.
Edward M. Grout and Paul Grout (Edward M. Grout and Charles B. La Voe, of counsel), for petitioner.
Bond Babson (Walter H. Bond, of counsel), for respondent.
Upon the accounting of the representative of a testamentary trustee, deceased, objection is made that the account does not report the deceased trustee's acts with respect to his receipt and disposition of the rents of an undivided one-fourth part of certain lands which were devised to him in trust.
Under the terms of the will the trust as to one-half of the premises so devised expired upon the death of a beneficiary, on whose life the trust as to such one-half was limited. The one-half thus released from the trust vested one-half thereof, or one-fourth of the aggregate estate, in the objectant, and one-half thereof, or one-fourth of the aggregate estate, in the trustee as his own, while as to the remaining one-half of the lands the trust continued.
During the period while this was the state of the title, the trustee collected the rents of the objectant's one-fourth share of the lands, and his acts in this respect provoke the present controversy.
When the trust came to an end as to a portion of the lands, it was impossible that the rents of such portion could be collected by the trustee through the exercise of any duty or power committed to him by the will. Real Property Law, § 109; Watkins v. Reynolds, 123 N.Y. 211; Matter of Murray, 124 A.D. 548; Fogarty v. Stange, 72 Misc. 225; Kahn v. Tierney, 135 A.D. 897.
These cases dealt with estates which, when they escaped the trust created by the will, vested in strangers to the trust by a devise contained in the same instrument. More clearly will the trustee be estranged from an estate in the lands, which he has primarily held in trust, when the remainder is created, not by the will of the creator of the trust, but by the superior operation of the laws relative to intestacy.
There is nothing against these views in Deering v. Pierce, 149 A.D. 10. That case was concerned with the relation between the trustee and the remainderman as to a fund which had come into the hands of the trustee during the life of the trust and was held against the remainderman after the trust period had passed.
Hence, in the case at bar, demand for an accounting as to the lands in question could not prevail if it were narrowed by the claim that they were received under the testamentary warrant and were, therefore, the proper subject of inquiry in this proceeding. It is only because the trustee cannot in his character as such be called to account for his dealing with property as to which his trust has ceased, that the device of constructive trusts has been resorted to where the trustee has acquired property by transferring his defined powers. In such cases the constructive trust has no reason for its being, except that redress cannot be had against the offender in his original relation to the property.
Can the doctrine of constructive trust avail the objectant?
Such trust could arise in this case only upon a finding that the person whose trust had terminated continued by a false, or at least unfounded, assumption to assert and exercise dominion over the property in question and collect its rents, and that in receiving the rents, and especially in retaining them, he acted with fraud, either actual or constructive.
The decedent was himself a tenant in common of the premises. As trustee of a still active trust he was also a tenant in common. As tenant in common he had the right to receive the rent of the entirety. As trustee under the will he had no right to receive the rents of the objectant's share. There is no evidence to dispute the presumption that he acted lawfully rather than unlawfully. The law approved his receipt of the rents as tenant. It forbade him to take them as trustee.
Moreover, this presumption is supported by the evidence. The objectant acquiesced for years in the collection of his rents by the decedent. He availed himself at intervals of the sums paid to him as his own share of the rents. He frequently thereafter asked for an accounting. His own estate came from a title superior to the will. He was never a beneficiary under the trust which it contained. He took no relation to the property under the trustee or through the trust. Except as tenant in common he had nothing to do with the property or its rents.
The only attitude which the collector of the rents bore toward him was that of tenant in common with him.
These facts reinforce the presumption that it was as tenant in common and not as trustee that the decedent received the rents. They, together, require a finding that the only cause of action which the objectant has is not within the cognizance of this court.
Decreed accordingly.