In Fowler v. Coates (201 N.Y. 257) the court said (at p. 262): "West's conveyance to Conover was upon condition subsequent and, in such case, the legal presumption being that the condition will be performed, the grantee took every interest and estate in the real property. Nothing remained in West except the right to take advantage of a breach of the condition subsequent; which is neither an estate, nor an interest, in real property, nor an assignable chose in action."Summary of this case from Matter of Smallman
Argued February 27, 1911
Decided March 21, 1911
E.J. Boshart for appellants. C.S. Mereness for respondents.
This action was brought to remove, as a cloud upon the title of the plaintiffs, a mortgage held by the defendants upon certain real estate described in the complaint. The ground of the complaint is, in substance, that the mortgagor's title was upon condition; that it had been forfeited for failure to perform the condition of his deed and that the plaintiffs had become vested with the former title and could take advantage of the breach of the condition. It appears that, in April, 1901, a number of the inhabitants of the village of Lowville, in this state, by popular subscription, raised upwards of $4,000 for the purpose of inducing William G. Conover, who was operating a canning factory in the state of Delaware, to move his manufacturing plant to their village. An agreement was made with Conover by five persons, styling themselves a committee of citizens of the village of Lowville, by which Conover agreed to remove his canning plant, including buildings, machinery and other appliances, to Lowville and to place the same upon a site to be provided for him by the committee. The committee agreed to procure the conveyance to him of a certain parcel of real estate and to pay to him the sum of $3,285, at times specified. The owner of the site, which was selected for the erection of the plant, conveyed the same to De Witt C. West, in May, 1901, for the consideration of $1,000; the grantee being described in the deed "as trustee for the subscribers to the fund to establish a canning factory at Lowville, N.Y." On the same date, West, as trustee with the same description as in the previous deed, by warranty deed, granted to Conover the land. His deed was upon condition that Conover remove his plant and erect the same, on or before August 1st, 1901, and, "upon the further condition that said Conover, or his heirs or assigns, shall in good faith run and operate the same as a canning and preserving factory, or some other manufacturing enterprise upon said premises that will utilize said buildings erected thereon for and during the period of ten years from the said first of August, 1901, and the title of said Conover to said real estate and rights hereby conveyed, hereunder, to be and become absolute only at the expiration of said period of ten years." A further clause in the deed was to the effect that "in case said Conover, or his heirs or assigns, shall * * * fail or neglect in good faith to operate said manufactory at any time within said period of ten years then all interest of said Conover * * * and rights shall * * * revert to said party of first part, who may at once re-enter," etc. Conover carried out his part of the contract, duly transferred his plant to Lowville and commenced to operate it. In June, 1904, Conover executed to the defendants the mortgage for $25,000, sought to be invalidated in this action; no part of the principal or interest of which has been paid. In November, 1904, the buildings and machinery were destroyed by fire. There was no insurance and they were not rebuilt. In March, 1905, Conover was adjudged a bankrupt and, pursuant to order, his trustee in bankruptcy sold and conveyed the premises, in April, 1906, to these plaintiffs, "as trustees for the subscribers to the fund to establish a canning factory at Lowville," subject to the mortgage of these defendants. Thereafter, in July, 1906, West "individually, and as trustee for the subscribers to the fund to establish a canning factory at Lowville" and his wife, for a nominal consideration, deeded to these plaintiffs the same land. There is nothing in the record to indicate the nature of West's, or the plaintiffs', trusts mentioned in these different conveyances; or who were the subscribers to the fund; or what, if any, formal agreement, or associate action had ever been taken. The plaintiffs had judgment in their favor for the relief asked; declaring the forfeiture of Conover's title and removing the lien of the defendants' mortgage. That judgment has been affirmed by the Appellate Division, by a divided vote of the justices.
I think that the judgment should be reversed. I am quite unable to perceive how the plaintiffs have ever acquired any right to maintain such an action. Whatever title, or right, they obtained from the trustee in bankruptcy was, of course, subject to the mortgage held by the defendants. If they claim through West's deed, that, at most, could only transfer what individual interest he may have had as one of the committee of subscribing citizens. Individually, he could not confer any right of entry for condition broken and if a trustee, he could not transfer his duties to others. Though he took title as trustee for the subscribers to the fund, he, simply, got title as the individual. It may be that his relations to the subscribers to the fund were such as to render him liable to account for his acts; but there was no trust which limited the beneficial interest in him, or his right to convey to Conover. A trust to be valid must be created in accordance with the provisions of the statute and it must be manifested by some writing, wherein its nature and conditions appear. We, certainly, know nothing of any trust here; other than the assumption by West, and by these plaintiffs, of the description of trustees. That was matter of description and not of substance. If the deed to him was for the benefit of others, he, nevertheless, held the legal title and could convey it to a purchaser. ( King v. Townshend, 141 N.Y. 358.) West's conveyance to Conover was upon a condition subsequent and, in such case, the legal presumption being that the condition will be performed, the grantee took every interest and estate in the real property. Nothing remained in West except the right to take advantage of a breach of the condition subsequent; which is neither an estate, nor an interest, in real property, nor an assignable chose in action. The right to re-enter and to insist upon a forfeiture of the estate upon breach of such a condition can only be reserved for the benefit of the grantor and his heirs, and an assignee, as a stranger to the title, cannot take advantage of it. ( Upington v. Corrigan, 151 N.Y. 143.) If, therefore, there had been a breach, it would not operate, of itself, to divest Conover's title; to that end action was required by West himself.
Personally, I am inclined to the view that no breach of the condition was shown. The obligation was imposed upon Conover, or his heirs or assigns, as a condition of acquiring an absolute title, in good faith, to run and operate his plant "as a canning and preserving factory, or some manufacturing enterprise upon said premises that will utilize said buildings erected thereon, for and during the period of ten years." When the plant was destroyed, some three years of the period, only, had run and it was without fault on his part that he was prevented from continuing his operations. He was not insured and his losses were followed by bankruptcy. There was no provision for operating in any other buildings and when he was deprived of his interest in the premises, as the result of the bankruptcy proceedings, the failure of Conover to comply with the condition of his deed was in no sense willful. He had complied with the condition as long as he was able to do so and if there was an omission to provide in the deed for the event of a destruction of the premises by fire and the subsequent inability to "utilize the buildings," which had been transferred by Conover to Lowville, for "some other manufacturing enterprise upon the premises," I think the grantor of the land, along with the donors of the moneys, must suffer, in consequence.
But if we should assume that there was a breach of the condition, then, it is certain that the plaintiffs cannot assert the right to enter; for that was reserved to West by the deed and is by law. As already observed, all that the plaintiffs ever got by way of an estate in the land was Conover's interest, through the deed of the trustee in bankruptcy, and West's individual interest, if any, as one of the committee of citizens. Thus they must fail in their action. In no conceivable way, in my opinion, could it be maintained. West could not substitute them as trustees, for the purpose, and that the Supreme Court could appoint a successor in his stead to carry out whatever the trust may have been, I do not believe. But that question is not here.
I advise that the judgment be reversed and the complaint dismissed; with costs in all courts to be paid by the respondents.
CULLEN, Ch. J., WERNER, WILLARD BARTLETT, HISCOCK, CHASE and COLLIN, JJ., concur.
Judgment reversed, etc.