LEVY v. LEVY

LEVY v. LEVY. N. Y. Supreme Court, General Term, First Department; June, 1894. . i. Trusts.] Where a will devised the residue of testator’s estate to his executors in trust to divide the same into as many shares as he had sons, and to apply the rents and profits of each share to the use of a son named for life, and upon his death to divide the principal of such share among said son’s children, with a provision, that in event of the death of a son without issue him surviving, the share of said son should be divided among the other sons, the issue of any deceased son to take their parents’ share,—held, that, at testator’s death, the executors took only.an estate in each share for the life of the son for whose benefit it was held, and that the grandchildren then in being were entitled to a vested remainder. Townshend v. Frommer, 26 Abb. N. C. 441; S. C., 125 N. Y. 446, questioned ; and Campbell v. Stokes, 142 N. Y. 23, followed. 2. Parties.] During the life of the beneficiary for whom executors are to hold real estate in trust, those among whom the executors are to divide the same on the termination of the life estate are necessary parties to an action affecting the title. 3. P leading \ Whether in an action for partition by a remainder-man, it can be determined upon demurrer from the description in the complaint that the land cannot be actually partitioned, quere ? Appeal from a judgment of the Special Term of the Supreme Court, first district, sustaining.a demurrer to the complaint. Action for partition brought by Arthur Garfield Levy against Carrie Levy and others. The complaint alleged, among other things, that Adolph Levy died seized in fee of certain described premises, consisting of a house and lot on Forty-second Street in the city of New York; that the premises were encumbered by a mortgage made by said Adolph Levy; that said Levy left a will relating to both real and personal estate, which was duly admitted to probate ; that he left five surviving sons, among whom was Samuel Levy the father of plaintiff; that the mortgage was foreclosed without making the plaintiff and the defendant, Carrie Levy, parties, and the premises purchased by the defendants, ICohn and Herrman, at the foreclosure sale ; that the plaintiff and defendants, other than the defendant Vogel, were tenants in common of a vested remainder in the premises in question; and that plaintiff was entitled to .a one undivided ninth therein. Wherefore, plaintiff demanded judgment that the premises be partitioned among the parties, other than the defendant Vogel, or if it could not be done without detriment, that they be sold and the proceeds divided. The will of Adolph Levy devised the residue of his estate as follows: “ Third. Of the rest, residue and remainder of my estate, wheresoever and whatsoever, I give and devise to my executors hereinafter named, who shall qualify, their survivors and successors, upon trust to receive the rents, income and profits thereof, and to divide the same into five equal parts or shares, and to apply such rents, income and profits in manner following: “ Fourth. To receive the rents, income and profits of one of said shares and apply the same to the use of my son, Samuel Levy, so long as he shall live ; and upon his death to divide the principal of such share equally among his children share "and share alike, provided that if at the time of the death of my said son any of his children shall be under the age of twenty-one years, then the income of such child’s portion of my said son’s share shall be applied by my said trustees towards the support, education and maintenance of such child until he or she become of age, and thereupon the principal of his or her portion of such share shall be paid over to such child.” Similar provisions were made in regard to the shares given the other sons. After such provisions, the will further provided as follows : 11 Tenth. In the event of the death of any of my said sons without leaving issue him surviving, I give and devise the share of said son to and among my other children, share and share alike, the issue of any deceased child collectively taking the share which their parent, if living, would have taken, and to be held by my executors’ during the lives of such children and the minorities of such issue in the manner hereinbefore provided as to the share of each son.” Defendants who claimed under the foreclosure sale demurred on the ground that the complaint did not state facts sufficient to constitute a cause of action. The Special Term overruled the demurrer, holding' that the plaintiff and the defendant, Carrie Levy, were not necessary parties defendant to the foreclosure action, and, therefore, title to the property passed under the foreclosure sale. George Wilcox and Ira Leo Bamberger, for appellants. The allegations of the complaint are sustained by a proper construction of the will (Citing 1 R. S. 723, § 13; Stevenson v. Lesley, 70 N. Y. 515; Townshend v. Frommer, 125 Id. 446, 456: Lyons v. Mahan, 1 Dem. 180, 184; 1 R. S. 730, § 67; Campbell v. Stokes, 142 N. Y. 23). Thomas W. Butts (Horwitz & Hershfield, attorneys), for respondents. I. It was only necessary to make the executors parties defendant to the action of foreclosure (Citing U. S. Trust Co. v. Roche, 116 N. Y. 120; Townshend v. Frommer, 125 Id. 446). II. As a valid express trust was created by the will, the executors were vested with the legal estate, and no action of partition will lie at the instance of this plaintiff either against the trustees under the will or their grantees or the purchasers at the foreclosure sale (Citing Striker v. Mott, 2 Paige, 387; Morse v. Morse, 85 N. Y. 53; Harris v. Larkins, 22 Hun, 488; Sullivan v. Sullivan, 66 N. Y. 37; Hughes v. Hughes, 11 Abb. N. C. 38; aff’d in 30 Hun, 349). For note-on trusts to convey, as preventing the vesting of the gift and altering the rule as to parties, see 26 Abb. N. C. 465. [MAJORITY — Van Brunt, P. J.] Van Brunt, P. J. This action was brought for the partition of certain premises in the city of New York; and the demurrer to the complaint was upon the ground that it did not state facts sufficient to constitute a cause of action. The complaint alleges that the plaintiff, with the other defendants (except certain lessees), are tenants in common of a vested remainder in and to the premises in question ; and that he is entitled to a one undivided ninth of and in the said premises in fee ; which allegation, how. ever, seems to be at variance with the title of the plaintiff as disclosed in the complaint. Judgment is prayed that the real estate be partitioned, or if that cannot be done without detriment to the several interests so partitioned, the same be sold. It is urged by the defendant that, as the plaintiff is not among those enumerated in § 1532 of the Code as entitled to maintain this action, the demurrer must be sustained. But by §1533 it is expressly provided that the holder of a vested remainder may maintain partition under certain circumstances. It may be suggested that as the premises, according to their description, consist of a single lot of land, with buildings thereon, it is difficult to see how it can be actually partitioned ; and in the case of an action brought by remaindermen there can be no sale, but where actual partition cannot be had, the bill must be dismissed. As perhaps the court may not be able to take judicial notice ■of the fact that, upon the face of this bill, the same must ultimately be dismissed, because of the provisions of § 1533 of the Code, it may be necessary to consider the question as to whether the plaintiff in this action has such an estate as authorizes him in any event to bring an action in partition. The facts out of which the controversy arises are as follows: Adolph Levy died in 1885, owning the premises in question, subject to a mortgage, and leaving a will whereby he devised the residue of his estate, including said premises, to his executors in trust to receive the rents, income and profits thereof, and to divide the same into five equal parts or shares, and to apply such income and profits in the manner following; and so far as respects the alleged interest of the plaintiff herein the provisions of the will are as follows : “ Fourth. To receive the rents, income and profits of one of said shares and apply the same to the use of my son, Samuel Levy, so long as he shall live ; and upon his death to divide the principal of such share equally among his children, share and share alike.” Then follows a provision, that if any of these grandchildren are under the age of twenty-one years, the trustee shall apply such income to the support, education and maintenance of such child until he or she should become of age ; and upon the arrival of the infant at the age of twenty-one years, the principal of his or her portion of such share was to be paid over to such child. Similar provisions were made in regard to the other children. The testator also provided in said will that in the event of the death of any of his said sons without leaving issue him surviving, he gave and devised the share of his said son to and among his other children, share and share alike. The mortgage above referred to was foreclosed in 1892, and all the children and grandchildren of said Levy, except this plaintiff and his sister, were made parties to such foreclosure suit; and such proceedings were had that the premises were sold subject to the rights and interests of the plaintiff and of the said Carrie Levy, his sister, and subject also to a lease of the premises to the firm of Vogel Brothers. The referee conveyed the said premises, subject as aforesaid, to the purchasers as joint tenants ; and the plaintiff, claiming that he, his sister and the purchasers are tenants in common of a vested remainder in and to the said premises, has brought this action for a partition of the same. The question which is presented is whether the rights of the plaintiff and his sister in their grandfather’s estate were cut off by the proceedings in foreclosure. It is urged upon the part of the respondent that they were not necessary parties defendant in the foreclosure action, because the executors and trustees under their grandfather’s will were made parties, and they were vested with the whole legal estate under the will.' And in support of this proposition the cases of U. S. Trust Company v. Roche (116 N. Y. 120), and Townshend v. Frommer (26 Abb. N. C. 441; s. c., 125 N. Y. 446), are cited. If the latter case is to be considered as an authority upon this proposition, it would seem that the position of the respondent is well taken. But, after an examination and comparison of that case with the decision in the case of Campbell v. Stokes (142 N. Y. 23), I have been unable to reconcile the same. And as the rule laid down in the latter case, in respect to the vesting of estates, seems to be that which most clearly conforms to the provisions of the Revised Statutes- defining such estates, it should be followed. And it is evident from the language of the court in the case of Campbell v. Stokes, that the authority of Townshend v. Frommer (supra) is questioned, ánd a distinction between the two cases is attempted to be drawn from the fact that one arose under a trust deed and the other under the will. In the case of Campbell v. Stokes the will directed the executors to divide the testator’s residuary estate into as many shares as the testator had children, and gave for each child surviving him one share to the executors to be held intrust for said child for life ; and upon the death of such child the executors were directed to convey, pay over and deliver the share to his or her lawful issue, if any, and if none, then provision was made for the distribution of the estate. And it was held that the issue of any child living, at his death took a vested remainder in the share held in trust for the parent,.subject to open and let in after-born children, and to be divested by their death before the death of the parent; and that the rights of the grandchildren were not dependent in any way upon the action of the trustee, nor did the vesting of their interest await the exercise by the trustees of their power to convey, transfer, etc., but they took as remaindermen independent of the- power. This definition of the estate under such provisions in a will or in a deed—because I know of no difference in estates whether created by deed or by will —is in accordanee in § 13, p. 723, vol. 1, of the Revised Statutes, which, is as follows: “ Future estates are either vested or contingent. They are vested when there is a person in being who would have the immediate right to- the possession of the lands upon the ceasing of the intermediate or precedent estate.’’ In the case cited it was held that immediately, without any intervention of the trustees, upon the termination of the intermediate estate the grandchildren would have been entitled to possession, and, therefore, they took a vested remainder. It is true that that vested remainder might be cut off by death prior to their termination of the life estate.' But the court say that this did not affect the vesting of the remainder, because it was not a condition precedent, but a condition subsequent; and it is only because of uncertainties arising from conditions precedent that a remainder becomes contingent which otherwise would be vested. In the case at bar the provisions of the will are a devise of the estate to the executor; and there is some ambiguity as to whether they are to divide the principal of the estate or the rent. It would seem that they had the right to divide the principal, as well as the rent, and they are required to receive the rents, income and profits of each of said shares, and apply them to the use of the sons of the testator, and upon their death to divide the principal among their children, share and share alike. In the case of Campbell v. Stokes it was held that language of a* similar character wás a present gift to the children of the son, to be enjoyed by them upon the death of their parent; and in that case, as in the case at bar, there was no intention that the testator should die intestate as to any portion of his estate, because he provides that in the event of the death of any of his sons without issue his estate shall go elsewhere. Without discussing this question further, it would seem to be beyond dispute that the children of the sons of the testator took vested remainders, and the trustees did not represent that part of the estate. The judgment should be reserved, and the demurrer overruled, with leave to the defendants to answer upon payment of the costs of this appeal and in the court below. Parker, J., concurred, It seems hard to assign any substantial reason for the distinction here referred to. But it may be useful to observe that though there be no good authority'for a distinction in “ estates'' there is such authority for a distinction in the interpretation and effect of given language in a will and in a contract, such as a life policy. See Walsh v. Mutual Life Ins. Co., 133 N. Y. 408, holding that the rules which govern the vesting of estates created by will which is not a contract, do not govern the construction of an insurance policy, which is a contract. [CONCURRENCE — Follett, J. [concurring.]] Follett, J. [concurring.] Under the fourth clause of the will of Adolph Levy, the children of Samuel Levy acquired vested remainders in the premises described in the complaint. The plaintiff, Arthur G. Levy, and the defendant, Carrie Levy, are two of the children of said Samuel Levy. Vested legal interests in lands cannot be affected by judgments unless the persons owning those estates are parties to the judgment. Arthur G. Levy and Carrie Levy, having vested legal estates at the time the judgment in foreclosure was recovered, were necessary parties to that action, and not having been made such, the sale under that judgment did not cut off their estates. In United States Trust Co. v. Roche (116 N. Y. 120) it was held that James C. Foster was not a necessary party to that action for the foreclosure of a mortgage, because he had not a vested legal or equitable estate in the land. In that case the legal estate was held by a trustee, who and the beneficiary were parties. In Townshend v. Frommer (125 N. Y. 446) it was held that when a certain mortgage was foreclosed the children of Clarissa Curtis had no vested or legal interest in the land, and, therefore, were not necessary parties to the foreclosure. In that case the legal title was held by a trustee, who and the beneficiary were parties. In Campbell v. Stokes (142 N. Y. 23) it was held that the grandchildren of John Mortimer, Jr., had vested legal estates in the land when it was sold under a judgment in partition, and that they were necessary parties to the action, and not having been such, their titles were not cut off. The opinion in Campbell v. Stokes concluded as follows : “ Whether the remainders in this case were vested or contingent, the persons in being when the partition action was commenced, presumptively entitled to possession on the death of the life tenant, were necessary parties.” This remark is a mere dictum, for the court had decided that the grandchildren had vested remainders at the time the partition judgment was entered. In Moore v. Appleby (36 Hun, 368; aff’d in 108 N. Y. 237), it was held at General Term that the children of Charles Tucker had vested interests in the land when the judgment in partition was entered, and not being parties thereto were not affected by it, in the court of appeals it was assumed, without discussion, that these children had vested estates in the land. It is said: “ But to which action certain persons entitled to the property in remainder were not made parties.” Assuming the premises in the four cases cited to be correct, they are harmonious, and were correctly decided in so far as the question of parties is concerned (Story's Eq. Pldg., § 144, et seq). The judgment should be reversed, and the demurrer overruled, with leave to the defendants to answer upon the payment of the costs of this appeal and in the court below.