Summary
In Reid v. Sprague (72 N.Y. 457) the testatrix devised and bequeathed her entire estate to her daughter Catherine with directions that during the life of her daughter Helen, who was an incompetent, its income should be expended for her benefit and on her death the principal should become the absolute property of Catherine. The latter conveyed a parcel of the property, the deed containing a recital to the same general effect and received a purchase-money bond and mortgage.
Summary of this case from Matter of GrubeOpinion
Argued January 30, 1878
Decided February 12, 1878
M.M. Waters, for appellant. Martin McMartin, for respondent.
The bond and mortgage, which is the subject of controversy in this action, was executed upon certain premises sold and conveyed to one Rodney H. Johnson by a deed from Catharine Barber and her husband on the 3d day of March, 1852, to secure the purchase-price of said premises. The deed recites that Jane Chamberlain, by her will, devised and bequeathed to said Catharine Barber all her real estate in confidence that the income of the same should be expended for the support of Helen Reid, her daughter, during her life, and after her death the same was to belong to the said Catharine Barber, her heirs and assigns, with power to convey the real estate so devised. In pursuance of the power and authority contained in the devise, Catharine Barber sold and conveyed the premises described to the defendant Johnson. A bond and mortgage was executed to secure the consideration money of such conveyance. The bond was conditioned for the payment of the sum secured in two equal annual payments, from and after the death of said Helen Reid, with annual interest; and the mortgage was in the usual form, and without any recitals except a reference to the condition of the bond as to the time of payment. The interest on the bond and mortgage was paid annually every year, including and up to March, 1872, and indorsed upon the bond and applied to the support of said Helen. On the 17th day of April, 1872, the bond was assigned to the defendant Sprague as collateral security for a note of the husband of said Catharine Barber.
The foregoing statement of the facts presented on this appeal shows, beyond question, that up to the time of the assignment of the bond and mortgage to the defendant Sprague, that the parties considered and acted upon the idea that the proper construction of the will created a trust in Catharine Barber for the benefit of Helen Reid while living, with the reversion to said Catharine Barber. The premises were conveyed, the bond and mortgage executed, and the interest indorsed on the bond and applied from year to year towards the support of Helen Reid, upon this hypothesis, and in accordance with the intention of the parties. The parties having acquiesced in this construction of the will of Jane Chamberlin for a period of twenty years, it is too late now to claim any other or different interpretation. In fact, Catharine Barber had a right to assign only her own interest in the bond and mortgage, except for purposes connected with the trust, which she had agreed was created by acting under the same.
The assignment, therefore, so far as it affected the interest of the cestui que trust, was without authority or right and in violation of the trust. Even if it be assumed that the right existed to dispose of the same, it could only be assigned as a bond and mortgage given to secure trust-money arising from the conveyance of the premises under the trust, which it was conceded was contained in the will, and the assignee could only receive it in that form, and therefore is now precluded from claiming that there was no trust under the will or that the premises conveyed were not trust property. This has been settled and determined by the acts of the parties to the conveyance and to the bond and mortgage, and the assignee cannot change the purpose for which these instruments were executed or divest them of their real character. It therefore is not necessary to determine whether a trust was created by the will of Jane Chamberlin or to place a construction upon that instrument, for we have seen this has already been done, and the defendant is in no position to question the legality of the trust created or to demand any other or different interpretation. We think that the case may very properly be disposed of upon the ground already stated; but even if it be assumed that the defendant Sprague is a lawful assignee of the bond and mortgage, he occupies no better or different position than his assignor and is subject to the same equities which attended the original transaction. ( Greene v. Warwick, 64 N.Y., 220; Trustees of Union College v. Wheeler, 61 id., 88, 105.) The assignee has no greater rights than the assignor, and the bond and mortgage having been given for the benefit of Helen Reid as cestui que trust, she has a claim for protection, and the defendant Sprague cannot interfere with her right. The interest belongs to Helen Reid, and must be applied for her support, and the bond and mortgage placed in the hands of her committee, to be held for her benefit, and until her death, when the defendant Sprague, as assignee, will be entitled to the principal.
In accordance with the views expressed the judgment was right and should be affirmed.
All concur.
Judgment affirmed.