author: Duer, J. Duer, J.

text:
    Astor v. L’Amoreux.
    Whore on a verbal agreement for the purchase of an estate in lands, the consideration money has been paid, the vendor, though retaining the legal title, is a trustee for the vendee, having no beneficial interest, but bound to admit the vendee into possession, and to surrender to him the entire profits.
    Equity regards a vendee in possession, who has paid the price, as the real owner, and will compel a full conveyance of the legal title to him, if withheld on being demanded.
    Where the assignee of a lease, which he has taken in trust for another, ceases to have any beneficial interest, and has yielded the possession to the beneficiary, the privity of.estate between him and the lessor is dissolved, and he is no longer liable upon the covenants in the lease.
    Thus, where J. bid off a lease at a judicial sale, and received an absolute transfer of the same, and then agreed that A. should have the lease on paying the price, and A. immediately took and always kept possession of the demised premises, and subsequently paid J. in full; it was held that after such payment, J. was no longer liable to the landlord as assignee of the lease, although he did not transfer it to A. and was still nominally the assignee.
    Implied and resulting trusts are, from their very nature, excepted from the provisions of the revised statutes relative to uses and trusts.
    The equitable owner of a lease, in actual possession of the demised premises, is liable as assignee for the performance of the covenants in the lease.
    Under the code of procedure, the general term, on reversing a judgment on an appeal from the special term, may and should give such final judgment in the cause as ought to have been given at the special term.
    (Before Duek, Mason, and Campbell, J. J.)
    May 6; June 22, 1850 ; and again, March 19, 20 ;
    April 20, 1851.
    This was an action of covenant, commenced in the supreme court in 1847. The declaration was on a lease made by Henry Astor to William D. Crolius for a lot in the tenth ward of the city of New York, dated June 16,1825, for the term of twenty-one years, at the yearly rent of forty-five dollars, payable quarterly, with a covenant for its payment by the lessee, his executors, administrators, and assigns, together with all taxes and assessments. The declaration averred that on the death of Henry Astor in 1832, and on a partition of his lands, the plaintiff, as one of his devisees, in July, 1837, became seised in fee of the rent and reversion. That on the seventh day of November, 1830, the unexpired term, by an assignment, became vested in the defendant; and while he was assignee, two quarters’ rent became in arrear, and he neglected to pay the taxes for five years.
    The defendant, by his pleas, among other things, denied that he became vested with the term as assignee; and that before any of the rent and taxes claimed became due, and on the seventh day of November, 1830, he assigned to Andrew L’Amoreux, all his estate, interest, and term of years in the demised premises, who then entered upon and has ever since remained in possession, and was accepted as tenant by Henry Astor and by the plaintiff. The plaintiff took issue on the facts last stated. The cause was tried in the supreme court in June, 1848, when the plaintiff proved that through sundry mesne assignments, the lease was fully assigned to the defendant, November 7th, 1830, and that the rent, taxes, and interest in arrear, amounted to $226.13.
    The defendant then called as a witness Andrew L’Amoreux, and proposed and offered to prove by him that he, the defendant, purchased the premises under a mortgage foreclosure sale; that the same were purchased under a verbal agreement between the witness and the defendant, that the latter should purchase the premises for the exclusive benefit of the former; that he, Andrew, had always been in possession since the purchase, up to the time of the expiration of the lease in 1846; that Andrew had always paid the rent and taxes upon the premises, except the taxes and the two quarters of rent claimed by the plaintiff in his declaration; and that the purchase money paid by the defendant for the premises had been repaid to him by Andrew before the year 1840;. and that the agent of the plaintiff had given written receipts to Andrew for the rent, whereby the plaintiff acknowledged him, Andrew, as his tenant and assignee of the lease, and offered to produce such receipts. But the defendant, in connection with such offer, admitted that' the understanding or agreement between Andrew and himself was entirely verbal, and that no writing whatever had ever been made between, them in relation thereto, and that the defendant had never made any written assignment of the premises to Andrew.
    The counsel for the plaintiff objected that the testimony so offered by the defendant was inadmissible, and the j'udge sustained the objection, and refused to permit the defendant to give the same in evidence. To which decision and ruling of the judge the defendant excepted. And the defendant then rested his case.
    The jury thereupon rendered a verdict for the plaintiff. The defendant made a case, which (the cause having been transferred to this court) was argued at May term, 1850, and a new trial, ordered in June following. The following opinion was thereupon delivered by Mr. Justice Duer, after hearing.

      J. L’Amoreux, defendant in person, and

      Jona. Miller, for the plaintiff.
   By the Court.

Duer, J.

The admissions and stipulations of the defendant precluded any defence upon the trial, except under the sixth plea, and after much consideration and careful examination of the authorities, we are of opinion that the evidence offered in support of this plea, and which was rejected by the judge, ought to have been received. The exclusion of this evidence would have been entirely proper, had the offer been limited to proof of the facts that the defendant purchased the lease as a trustee for his brother, Andrew, under an agreement that he would transfer the title upon the repayment of the moneys which he advanced for it. "Waiving the objection that this agreement was only verbal, so long as it remained executory, it would not have had the effect of altering the character and responsibility of the defendant as assignee. Even the possession of Andrew during this period would, in judgment of law, have been the possession of the defendant.

But the offer as made was not thus limited. It embraced the additional facts that the agreement between the brothers was carried into execution by tbe repayment to tbe defendant of all bis advances, before tbe rent and taxes wbicb this suit was brought to recover became due; that from tbe time of this repayment, Andrew was in the actual possession of tbe premises demised as assignee, and was recognized and' accepted as such by tbe plaintiff; and we are convinced that these facts, if proved,- would have amounted to a full defence. They would have been a complete answer to tbe necessary averments in tbe plaintiff’s declaration, that tbe rent and taxes wbicb be seeks to recover became due, and were in arrear, whilst tbe defendant continued to be the assignee of the lease, since they would have shown, that before that time the liability of the defendant as assignee had wholly ceased. It is quite certain .that an assignee is only bound by tbe covenants in tbe lease, so long as be retains tbe possession, by himself or bis tenants, of tbe demised premises. It is not sufficient to show that be has a paper title and a legal right, for be is not liable to the reversioner upon tbe ground of a privity of contract, but solely by virtue of bis actual occupation and beneficial enjoyment. (Eaton v. Jacques, Doug. 459; Taylor v. Shum, 1 Bos. and Pull. 23; Armstrong v. Wheeler, 9 Cow. 88; Bac. Ab. Tit. Covenant, E, 4; Woodfall, L. and T. 348.)

It is needless to inquire whether tbe original agreement between the defendant and his brother was valid or not. It may be admitted that, so long as it remained executory, it created no trust that a court of equity could enforce, or a court of law suffer to be proved, but it is not to be doubted, that from the time that tbe agreement was ..fulfilled upon tbe part of Andrew by tbe payment of tbe consideration, be became tbe equitable owner, and as such, bad an immediate and exclusive right to tbe possession of the premises, and the perception of tbe profits. From that time the beneficial enjoyment was in him and in him alone, and all that remained to the defendant was a naked legal title, tbe conveyance of wbicb Andrew was entitled to demand, and a court of equity, if necessary, would have compelled. Andrew was therefore in possession, not under or as tenant of tbe defendant, but in bis own right, and by a paramount title, and consequently the defendant, being no longer in possession in fact or, by construction of law, was discharged from all liability as assignee.

There would be some inequality and apparent injustice in the application of this doctrine to the present case, if we were compelled to say that Andrew, from the want of a legal title, or a formal written assignment, was exempt from liability, as well as the defendant, but’the law imposes upon us no such necessity. On the contrary, had the plaintiff chosen to sue Andrew, the decisions to which we shall refer render it certain' that he must have succeeded. The declarations of Andrew, that he was in possession as tenant of the plaintiff and assignee of the lease, would have concluded him; he would have been estopped from setting up a title in a third person as a bar to a recovery; and even had an outstanding legal title been shown of admitted, proof of his equitable ownership, joined to his actual possession, would have sufficed to warrant a judgment against him. It is an obvious and necessary conclusion, that the present action, if the defence which was offered to be proved can be substantiated, ought not to be maintained.

The plaintiff had not an election as to the person against whom, as assignee, his suit should be brought. His sole right of action was against the assignee in possession, and if Andrew L’Amoreux was liable as such, the present defendant was discharged. (Sharpe v. Ingraham, 4 Hill, 115 ; Williams v. Woodward, 2 Wend. 492 ; Berry v. McMullen, 17 Sergt. and Rawle, 84; 2 Phillips’ Ev. 89.)

The objections that parol evidence was inadmissible to prove the equitable ownership of Andrew L’Amoreux, and therefore that in judgment of law he was in possession only as tenant at will of the defendant, are founded upon a singular misapprehension of the existing law, and are plainly untenable. Although a verbal agreement for the purchase of any estate or interest in lands is wholly void, yet when by the payment of the consideration money it has been partially executed, the vendee acquires a perfect title in equity, and the vendor, although retaining the legal title, is converted into a naked trustee. He has no beneficial interest, but is bound to admit the vendee into possession, and to surrender to him the entire profits. The trust in these cases is not necessary to be declared in writing, but arises by implication of law, upon proof of the facts, and we refuse to cite any authorities in support of positions that no judge has ever doubted, and every lawyer is presumed to know. Implied and resulting trusts are excepted from the provisions of the revised statutes from their very nature. Their existence, generally speaking, can only be established by parol evidence, and the powers of the court of chancery to compel their performance, and protect the rights and interests of the cestui que trust, have in no respect been abridged or impaired. (1 R. S. 728, § 50; 2 R. S. 85, § 10.) We therefore repeat, that assuming the truth of the facts that were offered to be proved, Andrew L’Amoreux was in possession, not as tenant at will, but in his own right as assignee, and could never have protected himself from his liability as such, by showing that the legal title remained in the defendant.

The learned counsel for the plaintiff referred us to the case of Port v. Jackson, (17 John. 239,) as an express decision, and therefore a controlling authority, upon the questions that we have considered, but the cases are in reality very distinguishable, and the resemblance, which at first view they seem to exhibit, is found upon a near approach wholly to vanish. That the essential difference betweeii the cases may be understood, it is proper to advert to an important distinction between the liability of the original lessee and of a subsequent assignee. The lessee, although he may have parted wholly with the title and the possession, continues to be bound by the covenants of the lease, while the assignee, as we have already seen, is liable only while he retains the possession. The reason of the distinction is, that the liability of the former is founded upon a privity of contract; that of the latter upon a privity of estate, which in all cases requires an actual occupation to gender it binding. In Port v. Jackson, the action was brought by the original lessee against his immediate assignee - to compel the payment of rent. It was founded, however, upon the peculiar terms of the' assignment, winch was not a simple transfer of title, but a special contract, containing an express stipulation upon the part of the assignee, that he would perform and fulfil all the covenants in the lease, including therefore the covenant for the payment of rent; thus placing the parties in the same relation to each other as that which exists between the lessee and the owner of the reversion. Among other defences, the defendant pleaded that he had assigned the lease, and that his assignee had entered into possession and had been accepted as tenant by the reversioner, and this plea, upon demurrer, was held to be bad. The decision, however, was rested upon the single ground, that the defendant had rendered himself personally liable by the terms of his own contract, and that a liability thus created is not affected by the change of title and possession; and the reasoning of the learned judge who delivered the opinion of the cburt plainly admits that had the suit been founded upon a privity of estate and not of contract, the sufficiency of the plea as a bar to a recovery could not have been impeached. This case, therefore, so far from contradicting, is in perfect harmony with the present decision.

The other question that was raised upon the trial, namely, whether the plaintiff could recover for the taxes without proof of their actual payment, we think was rightly decided in favor of the plaintiff; but as we are satisfied that the evidence which was excluded ought to have .been received, as constituting a valid defence, there must be a new'trial with costs to abidé the event.

The cause was again tried before Oaklet, Ch. J"., without a jury, in December, 1850. On this occasion, the plaintiff’s testimony was as before. Andrew L'Amoreux, for the defendant, testified that the defendant bid off the lease at a master’s sale, and paid the price, $725. He and Andrew went to look at the place before the sale, and Andrew said it would be a nice little home for him. After the sale, Andrew asked the defendant if he intended him, A., to take possession of it, and he observed that he did, and asked how A. could pay the money. A. told-him he could pay it in small instalments. A. took possession of tbe premises tbe next spring, (1881,) and bas been in tbe exclusive possession ever since. He paid to the defendant, before 1840, tbe entire purchase money. (Tbe statement of the witness on this point was a little confused.) A. paid all tbe rent and taxes that were paid, from tbe time of tbe master’s sale. There was no writing whatever executed by the defendant, or between him and A., or by A. as to tbe premises or tbe money to be paid; A. never asked him for a transfer of tbe lease, and be never promised or agreed to give him one. When tbe lease expired in 1846, A. applied to tbe plaintiff for a new lease, and was told be must give up tbe old lease, and in lieu of that be sent to the defendant, procured tbe master’s deed and delivered it to tbe plaintiff, who thereupon gave a new lease for ten years to Daniel L’Amoreux, another brother of A. Ever since tbe master’s sale, A. bas -been insolvent.

J. L’Amoreux, defendant in person.

Jona. Miller, for the plaintiff.

Tbe defendant then proved twenty-two receipts for tbe rent, from August, 1881, to August, 1845, all expressing tbe rent to have been received from Andrew L’Amoreux, and not mentioning or referring to tbe defendant.

Tbe judge gaye a pro forma judgment for tbe plaintiff, in order to have tbe case presented to tbe general term for decision.

By the Court.

Duer, J.

Our further examination of this case bas confirmed us in tbe views that we expressed in granting a new trial.

It is true that tbe defendant has failed to prove all tbe facts that be offered to prove upon tbe first trial; but be bas proved all that were essential to bis defence — all that were necessary to show that be bad ceased to be liable as assignee, when the rent and taxes accrued that are now sought to be recovered. He bas proved that tbe whole of tbe purchase money which he bad originally advanced had been repaid to him by bis brother Andrew, who, from the time of such payment, was in the possession of the demised premises, not as tenant of the defendant, but in his own right as equitable owner.

It has, indeed, been strenuously insisted that Andrew had no estate or interest whatever, and that it is a mistake to suppose that the relation of cestui que trust and trustee subsisted between him and the defendant; but we must still deem it unnecessary to cite authorities to prove that he in whom the legal title is vested is a mere trustee, when another person has an exclusive right in equity to the possession and profits, and may, when he pleases, demand a conveyance. It is familiar law, that in all cases where there is a valid contract for the sale of lands, whether valid in the first instance, or rendered so by a part performance, a trust arises between the vendor and the pur-. chaser; this trust, so long as the consideration money remains unpaid, is inchoate and contingent; but it beco'mes absolute when the contract has been fulfilled by the purchaser, and from that time the vendor, until he executes and delivers a deed, is, in the strongest sense of the term, a mere or naked trustee, bound to convey upon request, having no power of disposition or control, and no right of enjoyment. He is the nominal, the purchaser, the real owner; and so far is it from being true that the latter has no interest in the land, that, in the judgment of a court of equity, he has an estate which, when the purchase embraces the fee, is not merely assignable, but descendible and devisable. We content ourselves with referring to chapter 4t in Sir Edward Sugden’s learned wprk, where the subject is largely and ably treated, and all the authorities collected and explained. (1 Sugden’s Vendors, 171.)

It was urged upon the hearing, although the objection is not distinctly stated in the printed points, that there was, in reality, no such part performance of the unwritten agreement between Andrew L’Amoreux and the defendant as could have justified a court of equity in decreeing its specific execution, and that the sole remedy of Andrew, had the defendant chosen to eject him, was to recover back in a suit at law, the moneys he had paid ; and it must be admitted that, if these positions are true, Andrew held the possession, not in his own right, but by tbe mere sufferance of tbe defendant, and consequently as bis tenant. But tbe cases to wbieb we were referred are very far from sustaining tbe argument tbat was founded upon them; they are all cases in which tbe possession bad not been taken by tbe purchaser, and a part only of the consideration money bad been paid. Where tbe whole of tbe purchase money has been paid, and tbe purchaser has been admitted into tbe possession, it has never been doubted tbat equity regards him as tbe real owner, and if a full conveyance of tbe title, when demanded, is withheld, will compel its delivery. (2 Story’s Eq. Jur. p. 66, §§761 and 762 ; Sugden’s Yendors, 79, 80,) •

Hence there is no ground for tbe assertion tbat Andrew, bolding the possession in bis own right, and receiving tbe rents and profits to bis own use, was, in any sense of tbe term, tbe tenant of tbe defendant, and if not bis tenant, unless be was altogether discharged from tbe payment of rent, which it would be absurd to suppose, be was tbe immediate tenant of tbe reversioner, and liable for tbe rent as an assignee in possession. We have never denied tbat tbe liability of an assignee is founded upon tbe privity of estate; but tbe error of tbe learned counsel for tbe plaintiff consists in supposing tbat this privity must continue to exist so long as tbe assignee retains tbe legal title. We, on tbe contrary, have beld, and must continue to bold, tbat tbe privity is dissolved when tbe assignee has parted with all bis beneficial interest, and has yielded the possession to tbe beneficial owner. The privity is dissolved, for tbe plain reason that tbe beneficial owner then becomes tbe immediate tenant of tbe lessor or reversioner, and, as such, directly liable to him upon tbe covenants in tbe lease.

It is, however, alleged, tbat tbe cases upon which we relied in support of our opinion, and especially tbe leading case of Eaton v. Jacques, have been overruled, and can no longer be referred to as evidence of tbe existing law; and it is further insisted tbat if these cases are admitted to be law, there is no such analogy between them and tbe present as ought to control our decision. These positions we shall briefly examine.

It is undoubtedly true, that the decision of Lord Mansfield and his. brethren, in Eaton v. Jacques, after having been considered as law in England for more than half a century, was at last overruled by the opinion of a majority of the judges, in Williams v. Bosanquet, (1 Brod, and Bing. 238.) But it is equally true, that, for a long period of time, it has, in this state, been the settled and established law; established as such by a series of decisions which, whatever may have been done in England, we deny that this court, or any other tribunal, in the legitimate exercise of its powers, can now reverse or refuse to • follow. Chancellor Walworth says, (2 Paige, 70,) that Eaton v. Jacques is the settled law in this state. (And see Astor v. Miller, 5 Wend. 603.) That such was the settled law at a much earlier date, we may cite McIntyre v. Scott, (8 John. 159,) which was decided upon the same principle as Eaton v. Jacques, and partly upon its authority.

It is not denied that the court of King’s Bench, in Eaton v. Jacques, seems to have held that an assignee, out of possession, is not liable upon the covenants in the lease; but it is contended that as the assignment in that case was not absolute, but only by way of mortgage, the decision must have proceeded upon the ground that the mortgage was a mere security for a debt, and had not operated to change the title; in other words, that a mortgagor, so long as he retains the possession, retains the title, and is to be regarded not merely as the equitable, but the legal owner. It may be admitted that such is the reasoning of our supreme court, in one or two of the cases in which Eaton v. Jacques has been followed, but it is very certain that it was not, and could not have been, the ground of the original decision. There never has been a period in the history of the law in England, when a mortgage has not been held to pass the legal title to the lands which it purports to convey, never a period when the mortgagee has not been held, in a court of law, to be the real, and, when the mortgage is forfeited, the absolute owner.

It is true, that Lord Mansfield, in Eaton v. Jacques, spoke of the mortgage as a mere security; but this was for the sole purpose of showing that the mortgagor, so long as he was suffered , to remain in possession, and receive the rents and profits to his . own use, was to be regarded, not as the tenant of the mortgagee, . but as the real, because the beneficial owner; and it was in en-, tire conformity to this view, that Mr. Justice Buller stated the question to be, whether “ mere nominal assignees with the naked right, or only substantial assignees in the actual enjoyment of the estate, shall be liable for the rent,” which is precisely the question that we are now called upop to decide. When the rent accrued which the plaintiff seeks to recover, this defendant had only the naked right; his brother was the real owner, in the actual enjoyment of the estate. Eaton v. Jacques is by no means the only case in which an equitable owner, in possession, , has been held to be liable upon the covenants in the lease, in preference to the person out of possession, in whom the legal, title is vested, and it is not a little remarkable, that one of the cases in which this doctrine has been held, has been referred to , by Mr. Powell, (Powell on Mortg. 241,) not as confirming, but as contradicting and overruling the prior decision of Lord Mansfield and his associates. In Lucas v. Commerford, the case to which we allude, and which is reported in 1 Ves. Jun. 235, and also 3 Brown’s Ch. Ca. 166, it was determined by Lord Thurlow. that a mortgagee of a lease was bound by all the covenants running with the land, and it is doubtless for this reason that Mr. Powell considers the judgment as in conflict with that of the King’s Bench in Eaton v. Jacques ; but it escaped his attention, as Chancellor Walworth remarked, and as is manifest by comparing the two reports of the case, that the mortgagee whom Lord Thurlow held to be liable, was in the actual possession of . the demised premises, and what is still more material, as bearing upon the present ease, that he had not a legal, but only an equitable title; the lease had not been assigned to him at all, it, had merely been deposited with him as a security, and his only-estate and interest in the lands was founded upon the English, doctrine that in equity such a deposit is equivalent to an actual mortgage. It seems to us impossible to trabe the faintest line of distinction between Lucas v. Commerford and the present case. Tbe mortgagor, who,, as a necessary consequence of the decision, was discharged, held the legal title as assignee, but was out of possession. The title of the person who, upon the ground of his possession, was held to be liable, was purely equitable, and rested solely in parol.

It is now settled in England, that a mortgagor m possession is to be regarded as the tenant of the mortgagee, (Partridge v. Beri, 1 Dow. and Ryl. 272,) and it is chiefly, we conceive, upon this ground, that Baton v. Jacques has been overruled; but the doctrine of Lord Thurlow in Lucas v. Commerford, that an equitable owner in possession, and holding therefore in his own right, and not as .tenant of the legal owner, is bound by the covenants in the lease, has certainly not been overruled, nor, so far as we have been able to discover, has it ever been drawn in question.

Nor have all the decisions in this state, in which a mortgagee, out of possession, has been held not to be liable as assignee, proceeded upon the ground that no legal title was vested in him by force of the mortgagee. Such could not have been the ground of the decision in Walton v. Cronly, (14 Wend. 63,) for the deed, which in that case, by the introduction of parol evidence, was converted into a mortgage, was absolute upon its face, and hence its necessary effect was to pass the legal title; and this the court plainly admitted, by saying that a purchaser, without notice, would have acquired an absolute estate. No estate whatever could have passed to a purchaser unless- by force of the deed; thp legal title was vested in the mortgagee.

There are other cases which, in principle, are not distinguishable from the present. The owner of a ship, by the mercantile law, is personally liable for all necessaries furnished to the master, but it is certain that a mortgagee of the ship, when out of possession, is not thus liable. He is not liable even when, by the forfeiture of the mortgage, he has become, in judgment of'law, the absolute owner, and nothing remains to the mortgagor but a mere equity, which, in other cases, a court of law must refuse to notice or enforce. (Jackson v. Vernon, 1 Black. 104; McIntyre v. Scott, 8 John. 159.) The ground of these decisions is, that the expenses of the ship ought to be defrayed from its earnings, and consequently that the mortgagor, so long as he is permitted to retain the possession and receive the freight, is to be considered as the owner, and, as such, exclusively liable.

This reasoning would have applied to the present case, even had a portion of the purchase money which the defendant advanced remained unpaid, and he had continued to hold the title, not as a mere trustee, but for his own security ; but it applies with a force which we feel is not to be resisted, when we reflect that he had parted with all his interest, and that the title which he retained was purely nominal, while his brother enjoyed the-possession in his own fight, and for his own exclusive benefit. The rent and taxes covenanted to be paid in a lease are the consideration of the demise. They are the charges, to which the possession and enjoyment of the lands, it is meant, shall be subject, and it is manifestly just that he who alone receives the benefits which the lease secures should alone sustain the burden which it imposes. The maxim emphatically applies, qui commodum sentit débet sentiré et onus.

We must therefore adhere to the opinion, that Andrew L’Amoreux, from the time he became the equitable owner, was exclusively liable for the rent and taxes, which the plaintiff seeks the aid of the court to recover from the defendant. Unless we mistake entirely the import of the authorities, the law is far from compelling us to grant the aid which he seeks, and we are unable to discover any equity in the claim that should induce us to favor it. The judgment appealed from must therefore be reversed.

It was suggested by the counsel for the plaintiff, that in the event of the reversal of the judgment, the cause must necessarily go back for a new trial, but, upon examining the provisions of the code, we are satisfied that no such necessity exists. This suit, it is true, was commenced before the adoption of the code, but it is by the provisions of the code that all proceedings upon an appeal are regulated, and under it we have exactly the same powers in reviewing upon an appeal, the decisions of a single judge, that belong to the court of appeals in reviewing our own. We are empowered, not only to reverse or affirm, but to modify the judgment which is the subject of appeal.

The court of appeals has determined that the term “ modify” confers the same jurisdiction that was formerly possessed and exercised by the court of errors, and therefore includes the power, not only of altering partially the judgment which is appealed from, but of substituting in its place the exact judgment which the inferior court ought to have rendered. Considering the importance of this question of practice, and the material influence of its determination upon the future proceedings of the court, we felt it our duty to submit it to the consideration of all the judges, and it is their unanimous opinion, not only that we possess the jurisdiction that has been stated, but that, looking to the interest of suitors, its exercise in cases like the present is plainly and highly expedient. There is no conflict of witnesses in this case, nor any reasonable doubt as to the import of the evidence that has been given; nor has it been suggested that this import can be varied by any explanatory or counteracting proof on the part of the plaintiff. We can perceive no reason, therefore, for subjecting the parties to further expense and delay, by sending them to a trial, which, so far as this court is concerned, we know must result in the same judgment that we are now ready to pronounce.

Our decision therefore is, that the same judgment must now be entered, that ought to have been rendered at the special term; that is, a judgment for defendant with costs.


source: Caselaw Access Project

author: Oaklet, Ch. J.,

license: Public Domain

text:
    Thomson v. Livingston.
    A testator who died in 1825, gave his personal estate to his executors, in trust, to pay out of the income certain annuities, also an annuity to his son for life, and if he should marry and die before his wife, then to pay to her an annuity for her life, and to accumulate the surplus income; and on the death of the son to set apart enough to secure the annuity to his widow, if she survived him, and the residue, (and on her death, the fund set apart, in like manner,) to pay and transfer to all, or such one or more of the son’s children and grandchildren, at such time or age, in such manner, and in such shares and proportions as the son should by his will appoint. And in default of such appointment, then to his children and grandchildren, per stirpes, and if none, to the testator’s brothers and sisters and their issue.
    The son married and died, leaving a widow and two sons, the eldest being only nineteen years of age. By his last will, he directed that half the estate should be kept by the trustees till the eldest son became forty-five years of age, or till his death, if he died under that age, applying the income for his benefit, and on his attaining that age, to transfer the capital to him absolutely. If he died before that, to transfer the estate to his next of kin. The like provision was made for the younger son in respect of the other moiety. Held,

    1. That the will of the first testator and the appointment by his son, were to be considered, in respect of the validity of the latter, as if they were contained in the same instrument, and were a single disposition of the estate made at the death of the first testator.
    2. That the appointment was void, because it suspended the absolute ownership of the personalty bequeathed, beyond the period allowed by law before the revised statutes.
    3. That assuming personal property was, before those statutes, analogous in this respect to real estate, the utmost limitation permitted by law, was for a life or lives in being at the death of the testator, and twenty-one years and the longest period of gestation, after.
    4. That the will of the testator, and the appointment combined, tied up the personal property during several specified lives, and for a period of more than twenty-five years after the death of the last life specified. •
    (Before Oakley, Oh. J., and Sanotokd and Paine, J. J.)
    Feb. 18;
    April 19, 1851.
    This was a suit for an account and payment to tbe plaintiff, of a moiety of the personal estate of his grandfather, James Thomson, deceased.

      The complaint stated that in or about the year 1825, James Thomson being a resident of the city of New York, departed this life, leaving a large amount of real and personal property, and by his last will and testament, the testator devised all his personal and real estate to his wife Eliza Thomson, as executrix, and his friends, Peter Augustus Jay and Peter W. Eadcliff, as executors, in trust; 1st. To pay out of the personal estate certain legacies. 2d. To collect and receive the rents and profits of the real estate, and to apply the same to the use and benefit of certain tenants for life, and also to support certain other estates therein named. After which, the testator devised all the rest and residue of his personal estate as follows:—
    “ Item. — I hereby direct and declare that my personal estate, bequeathed to my executrix and executors in trust, as aforesaid, and the proceeds of my real estate at Ehinebeck, directed to be sold as aforesaid, shall be held and disposed of by my executrix and executors for the purposes and upon the trusts following, that is to say: in trust first, to pay the legacies hereinbefore bequeathed, and to invest the residue in stock of the United States of America, or in stock of the Bank of the United States, or in bonds and mortgages, and from time to time, to sell the said stock and collect the money due on the said bonds and mortgages, and to re-invest the said money, and to change the said securities, according to their discretion; and out of the dividends, interests, and profits of the said moneys, to pay the said annuities heretofore given and bequeathed; and also, an annuity to my said son James of eight hundred dollars, to be paid to him by my said executrix and executors, every year in quarterly payments, so long as he shall continue unmarried, during the lifetime of my wife. And as soon as my said son shall marry, then to pay to my said son, during the lifetime of my wife, an annuity, or yearly sum of three thousand dollars, to be paid to him every year by my executrix and executors, in quarter-yearly payments. And further, in trust, after the death of my said wife, to pay such sum or sums of money as she may have bequeathed or appointed to be^ paid, by virtue of the power hereinbefore given her, as aforesaid, and not exceeding in the whole twelve thousand dollars; and also, to pay to nay said son James, after the death of my said wife, and during his natural life, an annuity or yearly sum of six thousand dollars, to'be paid to him every year, in quarter-yearly payments. And if my said son shall marry and die before his wife, then to pay to his widow, during her natural life, an annuity or yearly sum of five hundred dollars, to be paid to her every year, in quarter-yearly payments, if she shall, have no children by my said son living, at the time óf his decease; but if she shall have a child or children by him living at the time of his decease, then to pay to her, in lieu of the annuity last aforesaid, an annuity or yearly sum of two thousand dollars, to be paid to her yearly, and every year during her natural life, in quarter-yearly payments. And further, in trust, that if the dividends, interests, and profits of the said moneys shall be more than sufficient for the purposes aforesaid, from time to time, as it shall accrue, to invest the surplus in stock or mortgages, as aforesaid, and suffer the said trust fund to accumulate. And further, in trust, after the death of my wife, and of my said son, to set apart such portion of the said trust fund as will be sufficient to secure the payment of the said annuity to which his widow, if he leaves one, will be entitled, and to dispose of the residue of the said funds immediately, and after «the death of the said widow, to dispose of the part set aside to secure her annuity, as follows, to wit, to pay and transfer the same to all or such one or more of the children and grandchildren of my said son, at such time or age, in such manner and in such shares and proportions, as, my said son shall, by his last will and testament, or by any codicil thereto, direct and appoint. And if my said son shall not make such direction or appointment, and so far as such direction or appointment, if incomplete, shall not extend, then in trust to pay and assign the said trust fund to all and every the child and children of my said son, who shall be living at the time of his decease, or born in due time afterwards, and the children of any and every child of my said son, who shall have died leaving children in his lifetime, the children of such child so dying, taking the same share or proportion wbiob. tbe child so dying would, if alive, be entitled to; and if there be no child or descendant of my said son James who shall survive him, then in trust to pay and assign the said trust money to my said brothers and sisters, and their issue, exactly in like manner as the moneys arising from the sale of my real estate are hereby directed to be paid over.”
    The complaint further stated that all the legacies and charges upon the personal and real estate have been discharged and paid; that the executrix and executors are dead; that Anson Livingston, and James Thomson, the son of the testator, were, by an order of the late court of chancery, made the 17th day of April, 1843, appointed trustees of the last will and testament in the place and stead of the deceased executrix and executors, and the estate, both personal and real, in pursuance of the order, was assigned and transferred to the new trustees.
    That James Thomson, the son of the testator, intermarried with Mary L. Livingston, by whom he had issue, the plaintiff and Henry Livingston Thomson, and no other children, but who were not born in the lifetime.of the testator, but several years afterwards; that James Thomson, the son of the testator, died •in the autumn of 1847, leaving him surviving Mary L., his wife, and his two sons, and that he never had any other wife, or any other children. That the plaintiff further is now of the age of twenty-one years and upwards, but was only of the age of nineteen years when his father died.
    That his father, James Thomson, in pursuance of the powers contained in the will of James Thomson, the testator, executed his will, by which he made the following appointment relative to the personal estate mentioned and devised as above set forth.
    “ Whereas, the said property at Rhinebeck was sold and the proceeds thereof added to the personal estate whereof my said father was possessed at the time of his death, and out of the fund thus constituted, the debts of my father and the legacies bequeathed by said will were paid. And, whereas, there remains of the said fund a considerable sum of money, which is invested in bonds and mortgages and other securities and property, in the name of Anson Livingston and myself, as trustees of the personal estate of my said father, appointed by the court of chancery of the state of New York such trustees under said will in the place of the executrix and executors named in the said will, who are all deceased — Now, I do also by this my last will and testament, in pursuance and execution of the further powers vested in me by my said father’s last will and testament as last above recited, declare it to be my will that the said personal estate of my deceased father, bequeathed to his executrix and executors as aforesaid, upon the trusts above mentioned, and the bonds, mortgages, securities and property of every kind and description in which said personal property now is, or shall be invested, be disposed of for the benefit of my two sons, in manner and form following; that is to say, upon and immediately after my death, I direct that the whole of the said personal property, in case my wife shall not survive me, but if she should, then the whole except such portion thereof as shall be reserved according to the provisions of my said father’s will, to provide fox the payment of the annuity therein bequeathed to hex after my death, and after her death, the portion so reserved, be, together with the securities representing the same, and all vouchers and papers connected therewith, kept and retained by the trustees for the time being under my said father’s will, and disposed of and paid out to and for the use and benefit of my said two sons, in the manner hereinafter specifically declared in relation to the same. 5th ly. I do hereby direct and declare that one equal half part of the said personal property in the preceding fourth section of this my will, mentioned and referred, be held by the said trustees under my said father’s will upon trust for them the said trustees, until my said son James Thomson, Jun., shall arrive at the age of forty-five years, provided that he shall live to attain that age, but if he should not, then until the time of his death, to collect the interest, issues, income, and profits which shall accrue or be derived from the said moiety of said personal estate, and after paying therefrom all charges and expenses connected with the management of the said moiety of said personal estate, to apply the balance and surplus, of such interest, issues, income, and profits, to the use of my said son, James Thomson, Jun., yearly, or every year, until he shall attain the age of forty-five years, provided he shall live to attain that age, and upon the further trust for the said trustees, when my said son, James, shall attain the age of forty-five years, to convey and deliver over the said moiety of said personal estate, and also all the said accumulations of the said moiety, if any there shall be, to my said son James, to have and to hold to him, his executors, administrators, and assigns, forever, absolutely and unconditionally from that period. But if my said son, James, should die before attaining the age of forty-five years, then and in that case upon the further trust for them the said trustees, upon and immediately after the death of my said son, James, to assign and deliver over the said moiety of said personal estate, and also the said accumulations, and to divide and distribute the same between and amongst the next of kin of my said son, James, living at the time of his death, according to the statute of the state of New York, relating to the distribution of the personal estate of persons dying intestate. 6thly. And as to the other equal moiety or half part of the said personal property in the preceding fourth section of this my last will, and mentioned and referred to, it is my will, and I do hereby direct and declare that the same shall be held and disposed of by the trustees for the time being of my said father’s will, upon the trusts following, that is to say, in trust for them my said trustees, until my son, Henry 'Livingston Thomson, shall arrive at the age of forty-five years, provided that he shall live to attain that age, but if he should not, then until the time of his death, to collect and receive the interest, issues, income, and profits, which shall accrue and be derived from the said last-mentioned moiety of said personal estate, and after paying therefrom all charges and expenses connected with the care and management of the said last-mentioned moiety of said personal estate, to apply the balance and surplus of such interest, issues, income, and profits, to the use of my said son, Henry Livingston Thomson, yearly or every year, until he shall attain the age of forty-five years, provided he shall live to attain that age, and upon the further trust, when my son Henry shall attain that age, to convey and deliver over the said last-mentioned moiety of said personal estate, and also all the accumulations of the said last-mentioned moiety, if any there shall be, to my said son Henry, to have and' to hold to him, his executors, administrators, and assigns, forever, absolutely and unconditionally, from that period. But if my said son, Henry, should die before attaining the age of forty-five years, then and in that case, upon the further trust, for them the said trustees, upon and immediately after the death of my said son, Henry, to assign and deliver over the said last-mentioned moiety of said personal estate, and also the said accumulations, and to divide and distribute the same between and amongst the next of kin of my said son Henry, living at the time of his decease, according to the statutes of the state of New York relating to the distribution of personal estate of persons dying intestate.”
    The complaint further stated, that the personal estate is of the value of one hundred and sixty thousand dollars, and is held by Anson Livingston, as the surviving trustee of the estate of the first testator, James Thomson. That he, the plaintiff, claims that the appointment made by his father, James Thomson, is illegal and void, and that he is entitled to his portion of the personal estate in like manner as if his father had died without making any appointment, and that he has demanded the same of the surviving trustee, which he refused to give and assign over to the plaintiff.
    The defendant demurred to the complaint, insisting,
    1st. That James Thomson, the second, the father of the plaintiff, had the right and power, under his father’s will, by law, to make the will and appointment alleged in the complaint to' have been made by him. 2d. That the will and appointment alleged in the complaint to have been made by James Thomson, the second, is a valid will and appointment in law, and the plaintiff is not entitled to the relief sought and demanded by him.
    The cause by consent was referred to Hon. Samuel Jones, late chief justice of this court, as sole referee, to hear and determine the same.
    The referee reported, that the complaint does state facts sufficient to constitute a valid cause of action; that James Thomson, the father of the plaintiff, had no power under his father’s will to make the appointment set forth in the complaint; that the appointment of James Thomson, the father of the plaintiff, set forth, in the complaint, is an invalid appointment and'utterly illegal and void; and that the plaintiff is entitled to the relief demanded in the complaint.
    Judgment having been entered on this report, in favor of the plaintiff, the defendant appealed to the general term. ■

      Geo. S. Stitt, for the defendant.
    I. The complaint asks that defendant be ordered to assign to the plaintiff, his portion of the personal estate, the same as though James Thomson the 2d had made no appointment. Is the appointment valid ?
    This question involves two others. 1st, does the appointment 'contravene the intention of the testator, James Thomson the elder ? or 2d, does it create a perpetuity or an unlawful limitation?
    As to the 1st question:
    II. The will gives the power to James Thomson the 2d, to select any of his children or grandchildren as the persons to whom certain funds shall be transferred, and to fix the “ time or age” and “ manner” and “ shares,” &c., when and in which such transfer shall be made.
    III. The appointment in question designates the time or age, by directing the trustee to convey to each son a moiety, when each shall have attained a certain age, (45.) This is the appointment, or clause in the appointment, on which this case depends. The subsequent clause, providing for the contingency of the death of the son of the appointor, has nothing to do with this case. The complaint asks for a present vested right. Now 'as the will of the elder James gives the son unrestricted power as to Eie designation of the age at which his child shall be entitled to a transfer of the fund, the appointment is plainly in accordance with the will.
    IY. To consider the 2d question. Is the appointment illegal, as creating an illegal limitation ?
    In Cruise’s Digest, the rule is laid down in sections 32 to 35 of Oh. 24, Title 32, that a valid remainder may be limited upon an estate for life given to an unborn person, and that a limitation for life to one, and at his death, for life to an unborn person, is good.
    Y. The power in James Thomson the 2d, is a power in gross, and could be barred and extinguished by a fine and other modes of conveyance. (See Sugden on Powers, pp. 71, 73.) Therefore there was not an absolute limitation of the estate, beyond one life in being. We must bear in mind that the will and the appointment are to be construed and governed by the laws in existence at the death of the testator, James Thomson the elder.
    YI. The estate given to James Thomson the 2d was not a mere life estate. The power of appointment given to him by the will, in connection with the life estate, vested in him an interest, different from, and of more value, than the life estate, in the benefits which the exercise of the power enabled him to bestow. (Sugden on Powers, 72.)
    YII. If the clause in the appointment providing for the contingency of the sons not living to the age of 45 years, be bad and invalid, then the sons have a vested interest in the funds in question, and the appointment in question in this case is valid. (Burrill v. Sheil, 2 Barbour’s Rep. 457.)
    . YIII. Where a perpetuity is attempted in a will, the courts will not, if they can avoid it, construe the devise void, but expound the will in such a manner as to carry the testator’s intentions into effect as far as the rules respecting perpetuities will allow.
    This is the doctrine of cy prés. (Bouvier’s Law Diet., Cy prés.) This doctrine applies to wills of personal as well as real estate. (Attorney General v. Baxter, 1 Vern. R. 248; Story’s Eq. Juris. 1169; Inglis v. The Trustees, &c., 3 Peters R. 99; 3 Ves. Jr. 141, Attorney General v. Whitchurch; Gott v. Cook, 7 Paige, 535.)

      W. H. Jansen, for the plaintiff.
    I. The appointment of James Thomson, under the will of his father, is bad, because it suspends the power of alienation beyond the period the testator could haye tied up his estate.
    At common law, there could be no limitation of chattels personal, but the gift of them carried the absolute property. (2 Black. Com. 897; 2 Kent’s Com. 352, 420.) But this rule had been so far relaxed, that a limitation over might be made previous to the revised statutes, but such limitations were always more jealously watched than limitations of real estate. The utmost extent to which they had gone was to limit a remainder upon a life estate, although there was a general disposition in the courts to place limitations of real and personal property upon the same foundation, and which since, the revised statutes have done. (Vide Jackson, ex. dem., Livingston v. Robins, 16 John. 585, 586.)
    The position is then taken, that the law relating to the two kinds of estates, which is to govern in the decision of this question, is the same, and is argued upon that assumption. As the testator died in 1825, the law existing previous to the Rev. Stat. will govern in a great measure, if'not entirely.
    By the law, as it then existed, real estate could only be tied up for one or more lives in being, and 21 years and 9 months after the time of the testator’s death. (Cruise’s Dig. vol. 4, page 1.61; 2 Cow. 333.) Assuming that personal property could be limited only in the same way, the testator could only in this case render inalienable the fund during that time — and his son, James Thomson, by appointment, could do no mo re.. But in this case, by the appointment of the son, the estate has been rendered inalienable during the lifetime of the appointor and his mother, and from and after their death, until the plaintiff and his brother arrive at the age of forty-five years, which will be about twenty-six years after the death of the appointor and His mother, in the case of the plaintiff, and of twenty-eight years in the case of the plaintiff’s brother Henry, which is, as before said, a longer period than'an estate at that time could be rendered inalienable. (Routledge v. Dorrell, 2 Ves. Jr. 359 ; 1 R. S. 724, § 65.)
    When a trustee has the legal estate, and there is a duty to perform which would carry the inalienability of the fund beyond the time permitted, the estate in him is illegal and void, and those entitled to it take as if no such term existed. Estates can no more be rendered inalienable through trustees than in any other manner. (14 Wend. Rep. 265; 16 Ibid. 61; 7 Paige, 221, 521, 542; 1 R. S. 723, §§ 60, 68.)
    Whether we consider the law in regard to the legal estate in this fund,- and the power of alienating it by those who hold the legal and equitable estates, either as it existed previous to the revised statutes, or under the revised statutes if they affect the question, the absolute power of alienation has been suspended longer than for one or more lives in being, and twenty-one years and nine months afterwards, and consequently is void. The fact that the sons may die under the age of 45 years, does not alter the case. The possibility of the trust continuing makes the limitation void. (Hawley v. James, 16 Wen. 171; De Barante v. Gott, 6 Barbour, 503; Sugden on Powers, 353.)
    The limitation here is thus: “ To trustees, during the life of my son James, and my widow; then an estate in trust, for years to the unborn sons of my son James, ending when they become forty-five years; then and thereafter, provided they reach the age of forty-five years, I give them the fund in fee; but if they die under the age of forty-five, I give the said fund to the next of kin, living at the time of their death.” Here, then, wre have two life estates — a term of years to unborn children, an absolute estate fixed upon, the contingency of their living out that term, and a further remainder limited to next of kin, provided they do not live out the term of years. The sons get the property and vested interests therein, only provided they become forty-five years of age. Until that time the trustees are directed to keep it. (Coster v. Lorillard,
      14 Wend. 265, 316, 322 ; Garrick v. Lord Camden, 14 Ves. 372.)
    If the sons do not live to that age, the next of kin take it, not by the law of the statute of distribution, but by power of the appointment. The distribution over to such next of kin, then, not coming by inheritance, through the sons, or by any vested interest of theirs, is a limitation over or contingent estate, and the next of kin take as purchasers and not by the statute of distributions. They take the fund from the hands of the testator, by the appointment of his son James, with his authority. As before said, according to the rule laid down by Sugden, such a limitation upon an estate to an unborn person, is void.
    II. The appointment is also bad, because it gives a different estate to the sons from that directed by the testator. In his will he directs that the trustees shall transfer and pay over the fund to the sons, “ at such time and age, in such manner and in such shares and proportions” as his son James should appoint. Here, then, it is clear that the testator intended the fund should go to the children of his son James, in any event. He intended that there should, immediately upon the death of his son James, be a vested and absolute property in the children who survived him, capable of being transmitted by inheritance or disposed of by will or deed; and for fear that there might be no such children in whom the fee could vest, he limited a remainder to his brothers and sisters, and their children. Instead of this, the appointor has made a new estate; he has created a new trust term. He has directed the trustees to keep the property for a period of years, upon an active trust, and if the plaintiff die under 45 years of age, then to transfer and pay over the fund to his next of kin, living at the time of his death. This is a new estate, a new trust term, given to the trustees, quite different and more extensive than the one given under the will of the testator. The appointor has given the fund, not to the children, but to the trustees. Their interest in the fund is contingent ; until the happening of that contingency, their right is only to the income and profits. Even upon that contingency they do not get tbe fund, tbe estates limited thereupon being void. The estate appointed to the children, on condition of, their attaining the age of 45 years, and in default thereof, the remainder to their next of kin, living at the time of their death,, are contingent remainders, limited upon an estate for years. A contingent remainder cannot bé so limited. (2 Black. Com. 171.) They are also void as being too remote. The remainder, to the next of kin is .void, because it depends upon two contingencies. The one that James Thomson should have sons; the, other that they should die under 45 years of age. (2 Black. Com. 170.)
    As to sustaining the appointment cy prés, see 2 Ves. Jr. 357 Alexander v. Alexander, 2 Ves. 640; and Campbell v. Leach, Ambl. 740.
    III. The appointment is bad, because it is upon condition, which the will does not authorize. (Vide Pawlet v. Pawlet, 1 Wils. 224; Roe v. Dunt, 2 Ibid. 337.) .Here the fund is not left to one merely upon condition, but to both. A life estate might have been given possibly to one, had the remainder been absolutely given to the other. But it is not so left; the fund is given to both, upon condition.
    IY. The appointor undertakes to appoint the whole fund, and yet, but contingent interests are ■ given to the children, which is bad. (Snape v. Turton, Cro. Car. 472; also 1 Vern. 84.) And he has appointed to persons not the object of the power. (1 Atk. 561, 63, 64.)
    Y. The term at “ such time and age,” was intended by the testator to refer to a time or age under 21 years. The term, 21. years and 9 months, must be taken in connection with birth and infancy. (See Sugd. Purch. 2d ed. page 556 and. authorities.)
    It may be proper to suggest to the court, that the real estate of the testator was devised and appointed precisely in the same way as the personal, except that the widow of the appointor has a life estate therein; that it is perhaps of the value of $300,000 ; that it is spread over this city and other places, diminishing in value in some places, though rising in others; and that the suspension of the power to sell, to give leases for any considerable time, and to build upon unimproved or badly improved property, is of great detriment. That, although .in this action the court cannot decide upon that part of the will, yet the principle will be decided.
   Oaklet, Ch. J.,

delivered the opinion of the court, affirming the decision of the referee and the judgment at the special term, on the grounds stated in the syllabus of the case. T^he Chief Justice’s opinion was oral, and accidentally there was no note of it taken when it was delivered. The argument which led the court to the conclusion adopted, is contained in substance in the points of the plaintiff’s counsel.


author: Campbell, J. Duer, J.

text:
    Anderson v. Lemon.
    "Where one of two partners, in his own name and with his own funds, purchased in fee the premises on which the firm, under a lease, was conducting its business, (after the term limited for the partnership had expired, but before an actual dissolution,) such purchase being made, not fraudulently, but without the con- ' gent or knowledge of his copartner, and the purchase of real estate not being any part of their ordinary business; it was held that the latter could not, at his • election, claim that the premises so bought were to be deemed partnership property.
    A partner will, in respect of a renewed lease, be held to stand as a trustee for the firm, where he would not be so deemed in respect of a purchase of the reversion.
    Two partners had been conducting business as tobacconists on leased premises. The term limited for their connection had expired, but the business was continuing with a view to arrange for a further term. One of them, with the other’s . knowledge, was treating with the owners of the reversion for its purchase, professedly intending the premises for the use of the firm, if it continued, and consulting his copartner as to the price demanded. The latter privately, without the knowledge of the former, went and bought the premises with his own means, and in his own name, and then refused to continue the firm permanently. Meld, that the purchase was not made fraudulently as against the purchaser’s partner, and that the premises were not to be deemed partnership property.
    (Before Duer, Mason, and Campbell, J. J.)
    March 3,14, IT, 18;
    May 10, 1851.

      This was a suit in equity commenced in tbe supreme court in October, 1847. The plaintiff was a tobacconist in tbe city of New York; tbe defendant, in September, 1840, became bis clerk, and on tbe first of August, 1842, became bis partner in tbe business, for a term of five years, with an interest of one-fourth in tbe profits and losses. During all these periods, and t'o tbe end of their connection together, tbe business was conducted at tbe premises known as No. 4 Wall-street. Tbe lease was in tbe name of tbe plaintiff. On tbe 1st May, 1843, a new lease for five years commenced in bis name, determinable sooner, on tbe death of W. Roberts, a lunatic. This occurred on 1st August, 1846, when R.’s heirs continued tbe lease at an increased rent to May 1st, 1848.
    On Roberts’s death, bis heirs commenced proceedings in partition, which led to negotiations for tbe purchase of tbe premises, both by tbe plaintiff and tbe defendant; and on tbe first of September, 1847, tbe defendant bought tbe same in bis own name, and for bis sole benefit. Tbe heirs of Roberts conveyed tbe same to him on tbe first of October, 1847. Tbe plaintiff claimed that be was negotiating for them in good faith for tbe mutual benefit of tbe parties, consulting and advising with tbe defendant, and that tbe latter secretly and fraudulently obtained tbe purchase, and sought to deprive him of its benefit. Tbe partnership term expired on tbe 1st of August, 1847, but tbe business was still going on when tbe defendant purchased, without any agreement as to time, tbe parties in fact, being engaged in negotiating respecting a further term. They failed to agree upon its terms, further than that on tbe 27th of September, 1847, they agreed to continue tbe business as before until the first day of May, 1848. Some other facts appear in tbe decision of tbe court. Tbe bill prayed that there might be a partition of tbe premises between tbe parties, or a sale, or that tbe defendant be decreed to pay to tbe plaintiff three-fourths of tbe yalue of tbe same over and above tbe price paid by tbe defendant; and for various other relief.
    Tbe cause was transferred from tbe supreme court, and was* brought to a bearing on tbe pleadings and proofs.

      W. G. Russell and F. B. Gutting, for the plaintiff.
    I. The purchase of the land and premises known as No. 4 Wall-street, by William C. Lemon, and the procuring to himself individually of a conveyance thereof to the exclusion of. the plaintiff, was a fraud upon' the latter.
    The purchase of the premises by the defendant, should be declared to be for the account and benefit of the partnership. (Pickett v. Loggin, 14 Ves. 234; Brown v. Lynch, 1 Paige, 147, 158; 1 Story’s Eq. Jur. § 218, § 219, § 323; 2 Ibid. § 1207, § 1261.)
    A partner may not make secret stipulations with third parties, in anticipation of the formation or of the dissolution of copartnership. (Fawcett v. Whitehouse, 1 Russ & Mylne, 132; Fenwick v. Featherstonhaugh, 17 Ves. 298; Hitchens v. Congreve, 1 Russ & Myl. 150, n. b; Eliot v. Brown, 3 Swanst. 489 n.; Gow on Part. ch. 5, § 4, p. 349; Story on Part. § 174, § 331; Collyer on Part. B 2, ch. 2, § 1, p. 120, 2d ed.; Alder v. Fouracre, 3 Swanst. 489; 2 Spence Equit. Juris. 208, 299.)
    II. The defendant ought to be considered a trustee of the premises for the plaintiff. Standing in the relation of a partner, and confidential friend and adviser, he took an unconscientious and fraudulent advantage of his position, to obtain the title to. the. premises for his individual benefit, to the exclusion of the plaintiff. (Lees v. Nutall, 1 Russ. & Myl. 53; Taylor v. Solomon, 4 Mylne & Craig, 139; Rings v. Binns, 10 Peters R. 269; Carter v. Palmer, 11 Bligh, 397, 418, 419 ; Brown v. Lynch, 1 Paige, 147; Giddings v. Eastman, 5 Paige, 565; 1 Story’s Eq. Jurisp. § 316; 2 Ibid. § 1207, § 1211 a.)
    III. The defendant, having by artifice and fraud obtained possession of the place of business of the partnership, and of the custom appertaining to it, ought -to be compelled to pay to' the plaintiff the reasonable value of the good-will.
    The good-will of a trade is partnership property, and must be disposed of like other partnership effects. (Dougherty v. Van Nostrand, 1 Hoff Ch. R. 68; Story on Part. § 99.) Upon dissolution, the real estate of a partnership should be sold to ascertain its value. (Cook v. Collingridge, Jac. R. 607; Crawshaw v. Collins, 17 Ves. 218, 227; Story on Part. § 850.)
    IY. If the defendant was authorized to make private arrangements for his exclusive benefit in contemplation of a dissolution, the plaintiff, by virtue of the lease for three years, from 1st May, 1848, is entitled to a proper allowance for the use of the premises by the copartnership, and for the cost of the building.

      H. Nicoll and C. O’Conor, for the defendant.
    I. There is no ground for this suit under the head of contract. *
    1. The bill does not allege an agreement to purchase the fee of the premises in question, in the names or on the account of John Anderson and William C. Lemon, and therefore no recovery can be had on that ground.
    An agreement to take a deed in Anderson’s name for the benefit of himself and Lemon, would have been absolutely void by statute, if it had existed. (2 E. S. p. 18, § 51, 3d ed.; Norton v. Stone, 8 Paige, 222.) If such agreement had existed and been carried into execution, no title, legal or equitable, would have vested in any one except Anderson, even if the funds of Lemon, in whole or in part, had been applied to the purchase. The complaint does not pretend an intent to purchase otherwise than in Anderson’s own name, and the existence of the intent to purchase in that form is affirmatively proved.
    2. An agreement to purchase lands on joint account, orto purchase lands for another, is- absolutely,.void, unless in writing ; and, therefore, if such an agreement had been made and averred in the bill, it would have been void, by the statute of frauds. (Smith v. Burnham, 3 Sumner, 434.) .
    3. The only agreement pretended in the complaint is, that John Anderson should purchase and give the firm, during any renewed term which might be agreed upon, the benefit of the purchase, that is to say, that the rent of the part occupied by the firm should be no more .than might be necessary to save Anderson, as landlord, from loss.. The complaint.is indefinite as to details, but must be understood- to mean, that during the term, Anderson would make no profit.
    This agreement is denied in the answer, and such denial is no way contradicted. The answer states an entirely different understanding. And,.indeed, the plaintiff’s own witness confirms the answer in this respect.
    ' This agreement was purely conditional, and never could have any operation unless a renewal of the partnership should be agreed upon.
    There is no pretence in the bill, that by the agreement or understanding which- existed, Lemon was to have any interest «in the purchase, in case Anderson and himself failed to agree upon a renewal- of the partnership.
    II. .If it were possible to find the existence of .a contract between the parties, it would be impossible to determine, from the allegations of the bill or. from any proofs in the case, the proportions in which they were to o.wn the premises.
    1. The ordinary form.’ of a deed, even if executed to both, would give to each an equal moiety.. But the plaintiff claims that the arrangement entitles him to three quarters. Such an unequal division could not legally exist.unless the deed was so drawn as to express it. (2 R. S. p. 13, § 51, 3d ed.)
    2. This total uncertainty as to the relation in which the parties would stand, if Anderson had purchased, shows that this is the only consistent construction which can be given to the loose allegations of the bill.
    III. There is .no ground of recovery under the head of fraud.
    1. -During the treaty for the purchase, and at its consummation, Anderson and Lemon were each seeking to renew the copartnership upon better terms than the other, would, as yet, assent to; and each must have contemplated a failure to make 'such a renewal as a possible event.
    Under these circumstances, the actual existence of a copartnership drawing nigh to its termination did not create a fiduciary, relation between them. On the contrary, they were in an .attitude of contest .essentially adverse, which necessarily. placed each upon his guard against the efforts of the other. They stood emphatically “ at arm’s length,” each warned of the motives of the other, and seeking, for his own private interest, all legitimate advantages in the pending negotiation.
    2. The worst construction that the plaintiff himself attempts to put upon the conduct of the defendant, and which is wholly denied by the answer, if proved, would merely place the parties in pari delicto, in which case the plaintiff must fail.
    The answer of the defendant denies all fraudulent conduct and motives, and it is not effectually disproved.
    IY. The only equity which could fairly be grounded in any view of the facts alleged or proved, is that the partnership, had it been formed for a renewed term, might claim the use of the premises on the terms specified in the first point. This advantage was freely offered by the defendant. (Norris v. Le Neve, 3 Atkyns, 38; Randall v. Russell, 3 Meriv. 197; Hardman v. Johnson, Ibid. 347; Lesley's Case, 2 Freeman, 52; Stokes v. Clarke, Colles, P. C. 193.)
    Y. The premises purchased by Lemon were in no sense of the word partnership property. He bought in fee simple, a house and lot, of which the parties, as members of the old firm, their lease having expired, were merely tenants at will or by sufferance, with no pretence of any right or expectation of a renewal of their lease. The premises were offered in the market for sale, and were, in fact, absolutely to be sold by a day certain, as was well known both to the plaintiff and defendant. ■
   By the Court.

Campbell, J.

The parties were copartners engaged in the manufacture and sale of tobacco. Their place of business for the sale of their tobacco was at No. 4 Wall-street, in the city of New York. These premises were occupied by the parties under a lease from a committee of the estate of a lunatic, which lease was to continue for five years, if not sooner terminated by the death of the lunatic. This lease was in the name of the complainant as lessee, though the advantages arising from it were enjoyed by the firm of John Anderson & Co., composed of the parties to this suit. The lunatic had died before the expiration of the five years, but the heirs had extended the lease. Improvements had been made by the copartners upon the premises, but which would belong to the owners of the fee at the expiration of the lease.

In the summer of 1847, the copartnership term being about expiring, the parties entered into a negotiation for a renewal, and at the same time the heirs, owners of the fee of the premises above mentioned, offered the same for sale. The extended lease of the premises would expire in the following spring. Thereupon the complainant, with the' knowledge, and, as is charged, with the approbation of the defendant, opened an egotiation with the agent of the heirs for the purchase of the fee of the premises, and from time to time reported 'to the defendant the progress of such negotiation. But whether the complainant intended to purchase the premises for the copartnership and to be held as copartnership property, or whether he intended to purchase in his own name, and to be held as his individual property, simply giving to the copartnership the'benefit of the purchase during the existence of the new term, if one should be agreed upon, is a question in dispute between the parties. According to the agreement for the copartnership during the term which was about expiring, the parties were not equal copartners, the complainant receiving three-fourths and the defendant one-fourth of the profits. In the negotiation for the new term", the complainant insisted upon the same division of profits, and the defendant, on the other hand, insisted that in the new term he should become an equal copartner.

• Under this state of things the defendant obtained from the agent of the owners of the premises a promise not to sell to the complainant without notice to the defendant, and the defendant agreed to become a secret bidder against the complainant. Both of the negotiations, for the purchase of the premises and for the new copartnership, were continued for some time. The original term of copartnership had in the mean time expired, and the copartnership continued from day to day at the will of .the parties. The defendant failing, as he owns, to make an arrangement satisfactory to him for a new copartnership, without the knowledge of the complainant, succeeded in effecting a purchase of the premises in question, and obtained a conveyance to himself individually. No new copartnership between the parties was ever formed. ■ The complainant now seeks to have the property in question decreed to be copartnership property, and asks that the same may be sold for the benefit of the original copartnership; and failing that, then that the defendant pay for the improvements erected upon the premises by the copartnership during the continuance of the lease.

It seems to me that two important questions present themselves in this case for our consideration.

1st. Whether the fee of real estate, where a portion of the business of a copartnership is carried on, purchased by one partner and paid for out of his individual property without the knowledge or consent of his copartner, can, at the election of his copartner, be decreed to be partnership property, it being no part of the ordinary business of such copartnership to engage in the purchase of real estate. 2d. Whether under the particular circumstances of this case, looking at the relation which these parties sustained to each other at the time of the commencement of the negotiation for the purchase by the complainant, and at the ■time of the actual purchase by the defendant, we may consider that the defendant acted fraudulently in making the purchase, and on the ground of fraud may decree the purchase made for the benefit of the copartnership.

In reference to the first question. In Norris v. Le Neve, (3 Atkyns, 26,) an effort was made to set aside the purchase of a reversion which had been made by a barrister while he was acting as executor and trustee under the will of the original owner. Lord Hardwicke says, “ The case which has been cited of Bumford Market and other cases of leases, (Pierson v. Shore, 1 Atkyns, 480,) are different from this, for there tenant right of renewals are rather a courtesy from the landlord, and cceteris paribus, the relations of the same family who took the original lease from bishops, deans, chapters, &c., are generally preferred, and they have a natural expectation of it.” And he adds in another part of his opinion, “ This is primes impressionia, and no case has been cited in point, but only argued by way of analogy, to cases of leases which I have shown are very different.” And though he declined in that case to interfere, mainly on the ground of great lapse of time, yet the distinction there taken remains, and in many cases where a party from his previous confidential relations might be decreed to-stand as trustee in a renewal lease taken in his own name, he would not be so decreed where he had become the purchaser of the reversion.

Sir William Grant, in Randall v. Russell, 3 Merivale, 190, says truly: “ There never was a stronger case for turning the purchaser of a reversion into a trustee for those who had the antecedent interests in the estate, than that of Norris v. Le Neve. ” And yet he approved and enforced the .doctrine. There the defendant, who was tenant for life, under her husband’s will, of certain leasehold estates, purchased in her own name the reversion in fee, and the bill was filed, among other things, to have her declared a trustee of this estate for the benefit of the heirs of her husband. The Master of the Rolls remarks: “ It is not enough to say that Mrs. Russell’s situation as tenant for life gave her the opportunity of making the purchase. They must go on and show what right ’ or interest of theirs she acquired or defeated by making the purchase.”

So in the case before us, laying out of view all allegations of fraud and circumstances and facts to support them. Whose right or interest did the defendant acquire b.y this purchase ? Not that of the complainant,'for he had none, except a common right with every other man in the community to become the purchaser. The premises were not offered for lease, but for sale to the highest bidder, and there is no evidence going to show any favor to either complainant or defendant; on the contrary, the agent avowed his intention in availing himself of the relative position of these parties to procure as large a price as possible. The death of the original owner, and the descent of the estate, like the change of ownership of the fee in Randall v. Russell, had altered the relation of these parties to the premises in question.

We entertain no doubt as to the right of a partner to make such a purchase, under circumstances free ’ from deception or fraud; and if in this case 'the defendant had made this purchase in his individual name, and with his own money, and without the knowledge of the complainant, and free from any imputation of deception or fraud, that he would be entitled to retain the premises as his individual property, and ought not, at the election of his copartner, to be decreed to stand as trustee for the benefit of the firm. We are not prepared to say, that, under some circumstances, a partner might not be decreed to stand as such trustee of real estate for the firm. Whether, in case of a continuing partnership, he might not be decreed to hold the premises for the benefit of the firm until the expiration of the term of copartnership, is a question perhaps not necessary to discuss in this case, as there was no renewal of the copartnership between the parties.

The general rule is no doubt as laid down in § 1207, 2d Story’s Eq. Jur., and to which we were referred by the complainant,, viz., “ In cases, therefore, where real estate is purchased for partnership purposes and on partnership account, it is wholly immaterial, in the view of a court of equity, in whose name or names the purchase is made and the conveyance is taken, whether in the name of one partner or of all the partners.” But it must appear that the real estate is purchased for “partnership purposes, and on partnership account, and then it is immaterial in whose name it stands, because, quoad hoc the partnership property, each partner is a trustee for the other. It is very evident that the real estate in question was not purchased ostensibly by the defendant for partnership purposes and on partnership account.

If the relations in which these parties stood to each other were such as to constitute the defendant an agent for the complainant, or in this transaction an agent for the firm, then it ■ may well be that the defendant cannot appropriate the property to his individual use. But the mere fact of being a partner, could hardly constitute the defendant such agent. The partnership was organized for the purpose of dealing in tobacco, and not in real estate. The fact that one man is the copartner of another in a specific business, can hardly constitute him the agent of the copartner in all his other business and pursuits. But it is said that the defendant effected the purchase through artifice and fraud; that standing in the relation of partner and confidential adviser, he took a fraudulent advantage, and should therefore be considered a trustee.

In the cases of Lees v. Nuttall, 1 Russ. & Myl. 53, Taylor v. Solomon, 4 Mylne & Craig, 139, and Brown v. Lynch, 1 Paige, 147, the defendants were acting as agents for others, such agency appearing on the face of the papers, or being avowed at the time of the purchase, except in case of Lees v. Nuttall, where the defendant was an attorney, and was instructed by the complainant .to draw the articles of agreement for the purchase of an estate which the complainant had negotiated, and the defendant afterwards procured a deed to himself, having negotiated subsequently with the seller on his own account. In 'Brown v. Lynch, the defendant represented that he was purchasing for the complainants, and prevented competition on their part and others, and throughout the negotiations and transactions avowed himself as their agent. Subsequently, by disavowing the agency which he had previously and repeatedly avowed, he sought to practise a gross fraud, and he was properly decreed to stand as trustee for their, benefit. In Fawcett v. Whitehouse, and Hitchens v. Congreve, 1 Russ. & Mylne, 132 and 150, the defendants, while professedly negotiating for their partners and joint owners, secured large bonuses for themselves, without the knowledge and consent of their copartners, and they were justly decreed to account for the moneys thus received. The other cases are of similar character, either of express or implied agency.

Now, did the parties to this suit stand in that relation of confidence which necessarily constituted such an agency; because it is not pretended that it appeared upon the articles of agreement for the purchase, nor upon the deed, that there was any sucb agency, nor tbat tbe defendant at any time avowed or disclosed tbat he was purchasing for tbe copartnership, but on tbe contrary, he explicitly stated tbat be was purchasing for himself, and negotiated with the agent of tbe owners upon that distinct basis. The term for which the copartnership had been formed between the plaintiff and defendant expired some weeks before the purchase was made, but the copartnership was continued on from day to day for the purpose of seeing whether the parties could agree upon their respective interests for another term. Tbe owner of the premises in question, who had been for many years insane, bad died. Tbe lease under which the parties, occupied, and which bad been extended by tbe heirs, was drawing to a close, and a partition suit had been instituted between the heirs for the purpose of settling the estate, and making a sale of the premises in fee. It can hardly, we think, be contended that, if instead of continuing on the partnership from day to day, it had been allowed to.expire on the day fixed for its limitation, and the defendant had made the purchase as he did, tbat be would not be entitled to bold tbe premises as bis individual property.

But though tbe partnership was continued in this mode, it is very evident tbat tbe parties were treating with each other at arms-lengtb for a future term, tbe defendant insisting that in sucb future term be should be an equal partner, and the plaintiff requiring him to remain and receive only his original fourth of tbe profits. Tbe confidence and joint interest of a partnership could hardly be said to exist.

Again, we think it very manifest, from the whole of the pleadings and proofs in this case, tbat tbe plaintiff intended to .purchase the property on bis own account and in bis own name, giving simply to tbe partnership the benefit of tbe purchase during tbe continuance of a new term, if one should be agreed upon satisfactory to him. And the plaintiff could not have been compelled to stand as trustee for the firm, if he had .purchased, as he proposed, and had made the admissions in an answer, as broadly as tbe allegations are made in bis complaint. As we re.ad bis complaint, it contains no positive averment that he intended to purchase the premises, and hold them as partnership property. His statement to the witness, Pitcher, and which we have no doubt was correct, was, that he intended to purchase the premises for his own use, letting the firm have it at the rate of seven per cent, on the cost. The great contest between the parties was, as to the terms upon which the partnership should be renewed, and the possession and ownership of the premises were undoubtedly considered as important in the adjustment of the conditions of such renewal.

There are imperfect obligations which no court can enforce. The conduct of the defendant may not have been as open and independent as could have been desired. But we are unable to see upon what principle he can be decreed to stand as trustee for the partnership.

He purchased the property in fee, and obtained all the rights of the heirs. The copartnership had no interest in the improvements which had been made upon the premises during the continuance of the lease, nor had the plaintiff.

The bill must be dismissed, but looking at the conduct of the defendant in the matter, which we cannot approve of, we think it must be dismissed without costs.

Duer, J.

It is proper to add to the opinion which our brother Campbell has delivered, that we are not to be understood as saying that cases may not arise in which a purchase by one partner of the fee of the property in which the business of the partnership is conducted may not be justly held to create a trust for the benefit of the firm. Had it distinctly appeared in this case, that the plaintiff intended that the property, if purchased by him, should, in the full sense of the term, be partnership property, and that his intentions had been explicitly declared to the defendant, and were assented to by him, we must not be understood as saying that the secret purchase made by the defendant, might not, in equity, be justly treated as a fraud entitling the plaintiff to the relief which he seeks. Our judgment is founded upon the particular circumstances of this case, the actual dissolution of the copartnership, and the uncertainty of its renewal, the serious doubts which hang over the intentions of the plaintiff, and the obscure and ambiguous manner in which they are stated in the bill, and the strong probability that in consequence of the price which was demanded, he had wholly abandoned his own intentions of becoming thé purchaser before the bargain was concluded. We cannot say upon the pleadings and proofs, that the plaintiff, had he made the purchase himself and taken the deed in his own name, intended, or would have been bound, to make any conveyance whatever to the defendant; if not, it was admitted by his counsel that he can have no right to demand a conveyance from the defendant.