SMITH v. LONG

SMITH v. LONG. [Reversing 9 Daly, 429.] N. Y. Court of Appeals, 1882. Ejectment in Name of Grantor ; Action by Remote Grantee.— Pleading in Ejectment by Tenant in Common.—Amendment.—Partition ; Affirmance or repudiation BY ONE NOT A PARTY.—BANKRUPTCY; SALE of Lands by Assignee ; Requisites of Order for Sale. Certain lands of which M., a bankrupt, was the owner, as tenant in common of an undivided interest, were partitioned in an action in which M., but not his assignee in bankruptcy, was a party, M. being treated as still the owner of such undivided interest. M. went’ into possession of the portion set apart for him, and subsequently conveyed a part thereof to defendants. The assignee in bankruptcy subsequently, under an order of the bankruptcy court, assumed to sell the interest of M. in the estate,—describing the entire property and ignoring the partition,—to plaintiff’s remote grantor. Held, in ejectment, for the recovery of the parcel held by defendants, that the partition was not binding upon the assignee; that even if the judgment was merely voidable, it was for the assignee to affirm or disaffirm the partition, a right which he was bound to exercise within a reasonable time, and by an unequivocal act; that the attempted sale of the bankrupt’s interest in the whole property amounted to a disaffirmance, the assignee being presumed to know the condition of the estate at the time of such sale, and the purchaser obtained, at most, but an undivided interest in the lands in question, and not the entire fee in the portion set apart to M. A plaintiff in ejectment, who claims the entire property, cannot, without amending his complaint, have judgment for an undivided interest as tenant in common. It seems, however, that if this were the only objection to a judgment, the complaint might be amended upon appeal. The section of the Code [Code of Pro. § 111; same provision, Code Civ. Pro. § 1501]—which permits a grantee of land to maintain an action in the name of his grantor, where the grant or grants are void by reason of the actual possession of a person claiming under a title adverse to that of the grantor at the time of the delivery of the grant—is limited to the first grantee and does not extend to a remote grantee of the premises. The grantee must bring the action in the name of his immediate grantor and must stand or fall on the validity of his title. Under the Bankrupt Law of 1841, an assignee in bankruptcy had no power to dispose of the real estate of the bankrupt, except in pursuance of an order of the bankrupt court, fixing the time and manner of such sale. If the order did not fix the time of sale, the omission was jurisdictional and a sale thereunder void. Appeal from a judgment of the general term of the court of common pleas, for the city .and county of New York, affirming a judgment in favor of the plaintiff, entered upon the report of a referee [Reported below, 9 Dalyy 429J. The action was brought by James M. Smith, as grantor for the benefit of William H. Adams, against John Long, and others, to recover a lot of land, conveyed by Jordan Mott, to Job Long, in the year 1865. Jordan Mott, the grantor, derived title to said lot as follows ; John Hopper, his great grandfather, died in 1819, leaving a will, by which he devised a large tract of land situate in the city of New York, and designated herein as the Hopper farm, (of which the lot in question is a part) to his three grandchildren, Garrett H. Stryker, Ann Stryker and Winifred Mott, for life, and the remainder to their heirs ; and providing that if either of said grandchildren should die without issue, then the interest of the one so dying should go to the survivors. Winifred Mott died in 1862, leaving surviving her four sons, Garrett S. Mott, James S. Mott, Jordan Mott (the above grantor of Job Long), and Hopper Mott. The plaintiff claims title to the same lot as follows. Jordan Mott was declared a bankrupt in 1842, and whatever interest he then had under John Hopper’s will passed to and became vested in, William Coventry H. Waddell, as assignee in bankruptcy, In 1862, an action in partition was commenced in the supreme court, to effect a partition of the real estate, of which John Hopper died seized among the owners thereof ; Waddell, the assignee in bankruptcy, was not made a party to this action, but Jordan Mott was, and was treated as still the sole owner of the interest in question, which interest was set apart to him in severalty. Immediately after this judgment in partition, Jordan Mott, entered into possession of the part thus set off to him in severalty, and claimed to be the owner thereof in fee, and then sold the lot mentioned, and described in the complaint—the same being a portion of the land set apart to him in severalty—to Job Long. On the 13th day of June 1868, the assignee in bankruptcy, obtained an order from. Judge Blatchford, of the district court, of the United States, to sell the interest of Jordan Mott, in the estate of John Hopper, deceased, describing the property by the old farm boundaries, and ignoring the fact that public streets and avenues had been located over the whole of said estate, and also ignoring the partition of the property. The order directed the sale of the right-title and interest of' said bankrupt, in and to any and all real estate described in the will of John Hopper. No time of sale was fixed in such order, but the assignee was directed to sell “at public auction, and for cash, by advertising the same one time, fourteen days prior to the date of the day of the sale, in the newspaper called ‘ The Times,’ published in the City of New York.” On the 18th day of July, there appeared in the New York Times a notice that the said interest would be sold at public auction for cash on Tuesday, the 4th day of August 1868, at the United States court building, No. 41 Chamber's St., N. Y. On that day the sale was adjourned to the 10th of September, at the same hour and place, and on August 6th, there appeared in the New York Times the following notice: “In Bankruptcy. The sale advertised in the Times of the 18 th of July for Thursday is hereby adjourned till the 10 th of September next, at the same hour and place. Bated the 4th day of August, 1868. William Coventry H. Waddell, official and general assignee.” The property was not sold on the 10th of September, in pursuance of the last notice. On September 11, 1868, there appeared in the N. Y. Times, a notice of which the following is a copy : ‘6 In Bankruptcy. The sale advertised in the Times of the 18th of July, and 10th of September, is hereby adjourned till the 11th day of September, at the same hour and place,” On the last named day the interest of Jordan Mott was sold, and bought by James M. Smith, Jr. No other notice of sale was given. A deed was executed by the assignee to Smith, the purchaser, describing the property by the old farm boundaries. On June 23, 1871, Smith, the purchaser, conveyed to Talmage the interest he then purchased, and by the same description, describing it as ££the interest of the said bankrupt Jordan Mott in and to any and all real estate described in a certain will of John Hopper.” On February 15, 1872, said Talmage conveyed the same premises to Veeder Gf. Thomas, excepting and reserving sixteen lots which had heretofore been sold and conveyed by deed of said Talmage to Charles Bnckhalter and John Castor. On June 24,1873, said Thomas conveyed to William Henry Adams, the plaintiff herein, the interest which he acquired by the deed from Talmage, excepting said sixteen lots mentioned in said last named deed. The said last named conveyance was subject to a mortgage made by David Talmage and wife to John Townsend, June 27, 1872, and the grantor therein covenants against his own acts, excepting certain releases, made and executed by him, of a certain portion of the premises described in the deed. The deed then proceeds to enumerate eight instances in which Yeeder Gf. Thomas had made conveyances of parts of said property. By these several conveyances, it is claimed, that the title to the lot in question was vested in the plaintiff, Adams. William Fullerton and Aaron J. Vahderpoel, for appellants. E. W. Paige, for respondent. See Smith v. Schlotz, 68 N, Y. 41. See Throop's Code Civ. Pro. 1881, § 1501, note. [MAJORITY — Tracy, J.] Tracy, J. The plaintiff’s right to recover in this action is resisted upon the ground,—First, that if he has any title whatever to the premises in question, it is to an undivided twelfth interest thereof, and not to the entire lot; and, having claimed the whole of the premises, cannot have judgment for an undivided part without amending his complaint. Second, that the section of the Code which permits a grantee of land to maintain an action in the name of a grantor, where the grant or grants are void by reason of the actual possession of the person claiming under a title adverse to that of the grantor, at the time of the delivery of the grant, is limited to the first grantee, and does .not extend to a remote grantee of the premises. Third, that the assignee in bankruptcy had no power to convey or dispose of the premises, except in pursuance of an order of the bankrupt court which should-fix the time and manner of such sale ; that the assignee’s sale to Smith, not having been made in pursuance of such an order, is therefore void. We will consider these questions in the order stated. The plaintiff’s right to recover the entire lot was placed by the learned referee before whom the case was tried, upon the ground that the plaintiff had the right to affirm the partition made between the heirs of John Hopper in 1865, and, having affirmed it, was entitled to recover that portion of the premises set apart to Jordan Mott in severalty. We think the plaintiff had no such right of election. The partition made in the action to which the assignee in bankruptcy was not a party, and in which he did not appear, was not binding upon him. If the judgment in that case was not absolutely void but voidable, it was for the assignee either to affirm or disaffirm such partition. It was a right possessed by him, and which he was bound to exercise within a reasonable time and by an unequivocal act. Such a right, affecting the title to a large and valuable real estate, having many owners, is not one that can be kept afloat for a series of years, and transferred from person to person, to be exercised at the pleasure of the last transferee. It is conceded that the assignee never affirmed. the partition, and we think the sale made by him in 1868, amounts to a disaffirmance thereof. The assignee, as owner of the estate, is presumed to have known its condition at the time of sale. He knew, therefore, that the Hopper farm had been mapped and divided into lots and streets. He knew that the same had been partitioned by the heirs of Hopper, and that Jordan Mott was in possession of that portion which had been set off to him in severalty. Assuming that he had a right to affirm the partition, when he was about to offer the interest of Jordan Mott in the Hopper farm, he was called upon to determine whether he would sell the whole of that portion set off to Jordan Mott in severalty, or whether, ignoring the result of the partition, he would sell the interest of Jordan Mott in the entire farm as.it existed at the time of his bankruptcy in 1843. If he affirmed the partition, then he would not sell the interest of Jordan Mott in the whole of the Hopper farm, for his entire interest in such farm had been divested by the partition, éxcept as to that portion set off to him in severalty. He would therefore sell the interest of Jordan Mott in that portion of said farm, and the purchaser would take Jordan Mott’s title thereto, whatever it might prove to be. But he elected to sell Jordan Mott’s interest in the entire Hopper farm, which farm is described in the notice of sale by metes and bounds. It is conceded by the learned counsel for the plaintiff that, had the assignee offered for sale and sold Jordan Mott’s interest as an undivided twelfth part in the Hopper farm, this would have been a disaffirmance of the partition and an election by the assignee not to be bound by it. But this is precisely what he did do. As the assignee had neither affirmed nor dis-affirmed the partition, the only interest he had to sell, was the interest of Jordan Mott in the Hopper farm as it existed at the time of his bankruptcy, and that was an undivided one twelfth interest in the entire farm. However described, the interest which was sold was, in fact, an undivided interest. Smith purchased a certain and definite interest in that property, and not an uncertain and unknown interest which could only be made definite and certain by some subsequent act of his, or his grantee. We are of opinion, therefore, that Smith at most obtained only an undivided one twelfth interest in the land in question. The plaintiff’s right to recover is placed by the referee upon his right to affirm, and his affirmance of the partition. He does not find that the acts of the defendant as co-tenant amount to an ouster of the plaintiff as tenant in common (Edwards v. Bishop, 4 N. Y. 61). The plaintiff having claimed to recover the entire lot, he cannot, without amending his complaint, have judgment for an undivided part (Holmes v. Seely, 17 Wend. 75; Gillett v. Stanley, 1 Hill, 121; Cole v. Irvine, 6 Id. 634 ; Cook v. Wardens, &c. of St. Paul’s Church, 5 Hun, 296 ; affirmed in 67 N. Y. 594). If this, however, were the only objection to the judgment, the complaint might be amended upon appeal. We think the second objection to the validity of this judgment is also well taken. It has long been the policy of the laws of this state to discourage and prevent dealings in pretended titles to real estate by persons out of possession. By the Revised Statutes of this state it is provided “ that every grant of lands shall be absolutely void if at the time of delivery thereof such lands shall be in. the actual possession of a person claiming under a title adverse to that of the grantor” (1 R. S. 739, § 147; same statute, 3 Id. 7th ed 2196). “No person shall buy or sell, or in any manner procure or make, or take any promise or covenant to convey any pretended right or title to any lands or tenements, unless the grantor thereof, or the person making snch promise or covenant shall have been in possession, or he and those by whom he claims shall have been in possession of the same, or of the reversion or remainder thereof, or have taken the rents and profits thereof for the space of one year before such grant, conveyance, sale, promise or covenant is made, and every person violating this provision shall be deemed guilty of a misdemeanor” (2 R. S. 691, § 6; same statute, 3 Id. 7th ed. 2516). The Code of Procedure, § 111, provides as follows : 6i Every action must be prosecuted in the name of the real party in interest, except as otherwise provided in section 113. But this section shall not be deemed to authorize the assignment of a thing in action not arising out of contract. But an action may be maintained by a grantee of land in the name of a grantor, or his or her heirs or legal representatives, when the grant, or grants are void by reason of the actual possession of a person claining under a title adverse to that of the grantor at the time of the delivery of the grant. And the plaintiff should be allowed to prove the facts to bring the case within this provision.” The Code of Civil Procedure, which went into operation after the commencement of this action, contains the following provision in relation to the same subject matter: 6 £ Sec. 1501. Such an action (that is, an action of ejectment), maybe maintained by a grantee, his heir or devisee, in the name of the grantor or heir, where the conveyance under which he claims is void because the property conveyed was held adversely to the grantor. The plaintiff must be allowed to prove the facts to bring the case within this section.” It is now insisted that, by the true construction of the Code, the right to prosecute such an action in the name of a grantor is limited to the first grantee. In this case the property, while held adversely, was conveyed by Smith to Talmage, by Talmage to Thomas, and by Tilomas to the present plaintiff Adams. To hold that a remote grantee can bring such an action in the name of the original grantor would be to encourage dealings in such claims to real estate and nullify the statute which was intended to prevent the party out of possession from transferring his right to litigate the validity of the title. Sands v. Hughes, 53 N. Y. 287,296. We think a grantee bringing such an action, must bring it in the name of his immediate grantor, and must stand or fall on the validity of his title. We are referred to no case where the action has been maintained by or for the benefit of any one but the first grantee, and we think that a construction which so limits the right of action best accords with the public policy which has so long prevailed in this state relative to this class of assumed titles to real estate held by persons out of possession (Tyler on Ejectment; Violett v. Violett, 2 Dana, 325 ; Dubois v. Marshall, 3 Id. 336; Webster v. Van Steenbergh, 46 Barb. 211; Hamilton v. Wright, 37 N. Y. 502, 507; 2 Hill, 526; Chamberlain v. Taylor, 14 Weekly Dig. 336. Stevens v. Hauser, 39 N. Y. 302, 306, decides nothing to the contrary. The remaining question to be considered is whether the sale made in 1868; by the assignee in bankruptcy of the interest of Jordan Mott in the Hopper farm to Smith was valid. Upon this question we are unable to distinguish the present case from that of Osborn v. Baxter, 4 Cush. 406. The assignee in bankruptcy held a statutory title to the real estate of the bankrupt as trustee, not only for the creditors but for the bankrupt also. His power to deal with the estate was limited and defined by the statute. He had no authority to sell such estate except upon an order of the bankrupt court, in which the time and manner of sale should be fixed and determined. Section 9 of the bankrupt act of 1841 reads as follows : “ And be it further enacted, that all sales, transfers and other conveyances by the assignee of the bankrupt’s property and rights of property shall be made at such times, and in such manner, as shall be ordered and appointed by the court in bankruptcy.” In the present case the order under which the assignee sold the property did not fix the time of sale. That was fixed and determined by the assignee, and not by the court. In Osborn v. Baxter (supra), Shaw, Ch. J., in delivering the opinion of the court, says :—“ In general, when a sale is made under a statute power, it must appear that the requisitions of the statute as conditions precedent to the operation of the power to pass the estate had been complied with ” (Hogan v. Hoyt, 37 N. Y. 300). As the order. in that case failed to fix the time and manner of sale, it was held that the sale by the assignee was void and no title passed to the purchaser. We think ■ the case of Osborn v. Baxter well decided, and for the reasons there stated, the sale in the present case should be held void. It is not a question of mere regularity, but of want of power in the officer making the sale. No subsequent act of the court could cure this defect. It is jurisdictional and may be raised whenever and wherever the title claimed under such sale is brought in question. All concur (Andrews, Ch. J., in result), except Earl, J., who dissents.