
    Mary Culross, App’lt, v. Arthur J. Gibbons et al., Resp’ts.
    
    
      (Court of Appeals, Second Division,
    
    
      Filed January 20, 1892.)
    
    1. Trust—Validity.
    Plaintiff’s husband, in 1876, fearing that he would1 squander his property, deeded certain real estate through a third party to his wife, site to defendant, and the latter gave an instrument in which he declared that he held the premises in trust (1) for the support of the plaintiff during life; (2) in case of her death for her husband’s support; (3) after their deaths to divide between their children, (4) with right to mortgage or otherwise dispose of the premises for the benefit of the trust. Si 1887, upon defendant’s petition, the court relieved him from the trust and directed that he should not interfere further with the same, and appointed Crooks in his place as trustee. In this action to have the trust cancelled and the property restored to plaintiff, Held, that as the trust for the benefit of the husband and wife is conceded to be valid, it is not necessary to consider the other two, as it can be upheld without doing injustice to the intention of the creator of the trusts.
    8. Same.
    The several instruments by which the transfer of title was effected were drawn pursuant to the direction of James R. Culross, and were intended by the several parties thereto as one transaction, for the purpose of transferring the title from him to Gibbons.
    3. Same—Res adjudicata.
    Gibbons, the trustee, purchased certain real estate in Ambrose street, paying a part of the consideration from the surplus income, giving mortgages and taking title in his own name, but executing an instrument so as to enlarge the trust and bring this property within it. Upon petition his accounts .including said property were settled and adjusted, all persons interested being made parties to the proceedings, and all appearing and consenting to the order parsing his accounts, which relieved him of his trust and directed him “ not to interfere further with the same or either of them.” Held, that this was a determination that he held the Ambrose street property as well as the other, and that the provisions of the order indicates that it was a subject of consideration. And while the order stands unreversed, actions cannot be brought by the parties interested to determine matters which should have been passed upon.
    Appeal from a judgment of the general term of the supreme court, fifth judicial department, entered on an order affirming a judgment of the supreme court, entered upon the report of Hon. James C. Smith, referee, dismissing the complaint, with costs.
    
      Eugene Van Voorhis, for app’lt; George F. Yeoman, for resp’ts.
    
      
       Affirming 28 St. Rep., 985.
    
   Parker, J.

By this suit in equity it was sought to compel the defendant Arthur J. Gibbons, to convey to the plaintiff certain real estate, the legal estate of which was vested in him under the following circumstances:

Prior to the 13th of December, 1876, James E. Culross, the husband of the plaintiff, was the owner of the major portion of such real estate, and by deed of that date, in which his wife joined, he quit-claimed it to Thomas P. O’Kelley, an attorney at law; O’Kelley quit-claimed the same premises to the plaintiff, by deed dated the 14th of the same month; the plaintiff by deed of the same date quit-claimed such premises to the defendant, Arthur J. Gibbons: and Gibbons executed an instrument in writing, bearing date the 15th of the same month, in which it was declared that he held said premises upon certain trusts therein expressed.

These several instruments were drafted by O’Kelley; subscribed at his office; acknowledged on the 15th day of December, 1876, and recorded in the proper county clerk’s office at the same minute of time. At the time of the execution of these instruments, James E. Culross had a family, consisting of his wife and several children, among whom was his daughter Minnie, then, as now, the-wife of the defendant Gibbons.

Culross had become so irregular in his habits as to excite apprehension in the minds of several of the members of his family that he might squander his property, which was then of the value-of about $40,000. These apprehensions were made known to-Mr. Culross, to whom a wish was also expressed that he make-some disposition of his property, to the end that it might be saved from waste. He readily acquiesced in the suggestion, and the result was the execution of the instrument already referred to.

In the declaration executed by Gibbons it was declared that beheld the premises in trust, the terms of which may be briefly stated, as follows: (1) To collect the rents and profits of the real estate, and after payment of taxes,' insurance and other liens,, apply the balance to the support and maintenance of the plaintiff during her life. (2) In the event of her death before that of her husband, to apply such balance for his benefit during life. (3)/ After their deaths, and after paying all liens and incumbrances on the property, to divide the premises, or the avails thereof,, within eighteen months, equally between their, children; the descendants of any deceased child to take his or her share. (4) Eeserving to the trustee power to mortgage or otherwise dispose of' the premises for the benefit of the trust.

Immediately after the execution of the instrument drawn by O’Kelley, Gibbons took charge of the real estate and cared for the financial affairs of the business in which Mr. Culross was-engaged.

September 1, 1884, Gibbons purchased certain real estate ore ’ Ambrose street in the city of Eochester, paying a part of the consideration from the surplus income and executing mortgages upon such property for the remainder. The title he took m his own name, and on the same day executed an instrument in writing, purporting to enlarge the trust created December 15, 1876, so as to bring such property within it, and this instrument was also executed by the plaintiff and eacli of her children, except David , J. Culross. Thereafter Gibbons managed the Ambrose property as he did the property first conveyed to him.

Subsequently, and on the 8th of June, 1887, pursuant to a petition presented by Gibbons, all the parties to this action and the sons of the plaintiff (who have since assigned their interests to her) consenting, the court made an order declaring the allegations in the petition to be true; settling his accounts as trustee; removing him and relieving him from the trusts, and directing that he should not interfere further with the same, or either of them. On the same day, and on the application of the plaintiff, the court by an order duly made appointed Alexander B. Crooks “ trustee of all the real estate described in said petition, with all the powers and duties contained in a certain declaration of trusts dated on the 15th day of December, 1876.”

It will be observed that as a result of the orders of June 8th, Crooks became trustee in the place of Gibbons, removed, but the legal estate remained in him, and he was enjoined from further interference.

As we have already remarked, the plaintiff seeks to have any trust that may have been created cancelled, and the property restored to her. She assigns in support of her position the following grounds: (1) That the deed from her to Gibbons was fraudulently procured. (2) If it be otherwise determined then that the trusts sought to be created are invalid (3) If valid then the trusts having been created by the plaintiff, and being voluntary, may be revoked, because the grantor did not understand that she was putting the property beyond her control.

Her contention with reference to the Ambrose street property purchased subsequently rests on somewhat different grounds, and will be considered later.

As to the first ground, it is sufficient to say that the learned referee found as a fact, that the plaintiff acted understandingly and freely, and that no fraud, deception, undue influence, or abuse of confidence was practiced upon her.

As to the second ground, it is apparent that an attempt was made to create a trust, providing for the collection of the rents and profits of the real estate, and their application in payment of insurance, taxes, and other charges on the property, and to use the remainder in the support and maintenance of the- plaintiff during her life, and for the benefit of her husband after her death.

(2) To divide the premises or the avails thereof among the issue of plaintiff, after her death and that of her husband.

(3) To mortgage the property, or dispose of it, if it should appear for the benefit of the trust

The trust first mentioned is conceded to be valid, and whether the other two attempted trusts, while invalid as trusts, may be valid as powers in trust, and employed as- aids to the execution of the valid trusts, as contended by one- side, and denied by the other, need not be considered, for they are so easily separable from the valid trust that it may be upheld without doing injustice to the intention of the creator of the trusts.

Indeed it would be in furtherance of the trust maker’s general scheme to do. so, should the latter two be held illegal and the court would so decree. Underwood v. Curtis, 127 N. Y., 523; 40 St. Rep., 255.

The third ground is based on the assumption that the plaintiff was the creator of the trusts, and if that assumption could be allowed, the appellant would in this court be confronted with the difficulty that the record contains a finding of fact, controlling here, that the plaintiff acted understandingly.

But the learned referee was of the opinion, and he found the fact to be, that the several instruments by which the transfer of title was effected including the declaration of trust were drawn pursuant to the direction of James R. Oulross, and were intended by the several parties thereto as one transaction, for the purpose of transferring the title from Oulross to Gibbons in trust, O’Kelley and the 'plaintiff being mere instruments of conveyance. The reasoning of the learned referee in support of the conclusion reached, is satisfactory, and so fully presented in his opinion as to render further discussion on that point wholly unnecessary.

There is yet another ground which requires an affirmance of the judgment dismissing the complaint, and it is alike applicable to the original transaction, and to the matter of the Ambrose street premises, which the plaintiff contends was purchased with the income belonging to her, and therefore equitably her property.

By statute it is provided that, “ Upon the petition of any trustee, the court, of chancery may accept his resignation and discharge him from the trust, under such regulations as shall be established by the court for that purpose, and upon such term's .as the rights and interests of the persons interested in the execution of the trust may require.” Birdseve’s Statutes, vol. 3, p. 3180, § 25.

An order made upon petition authorized by statute is conclusive as to the parties before the court, and can only be reviewed upon appeal. Livingston's petition, 34 N. Y., 555.

Under this statute, the court had power to pass the accounts of the trustee, and to impose such terms as the interests of the parties required as a condition of relieving the trustee from a further execution of the trust. x

Kecessarily it could have required him to convey the real estate to the newly appointed trustee, if it was deemed for the best interest of the parties that it should be done.

It is a well established rule, that where a matter has been submitted to an authorized judicial tribunal, its decision thereon is final between the parties until it has been reversed, set aside, or vacated; and the rule of res adjudícala applies to all judicial determinations, whether made in actions or in summary or special proceedings, or by judicial officers in matters properly submitted for their determination. People v. Barnes, 114 N. Y., 317; 22 St. Rep., 164; 23 id., 795; Leavitt v. Wolcott, 95 N.Y., 212; People v. Hall, 80 id., 117: Demarest v. Darg, 32 id., 281; Sibley v. Waffle, 16 id., 180; Supervisors v. Briggs, 2 Denio, 33.

Gibbons, in his petition to the court praying that his accounts be settled and adjusted, and he be relieved from the further execution of the trust, alleged the original declaration of trust, and its provisions; the subsequent purchase of the Ambrose street property, and its terms; the enlargement of the original trust so as to include that property, and an account of his receipts and disbursements as such trustee.

Every person interested in the estate including the plaintiff were made parties to that proceeding. They all appeared, and consented to the order made, which determined the allegations in the petition to be true; passed the accounts of the trustee as stated by him; relieved him from the trusts and each of them; and directed him “ not to interfere further with the same or either of them.” The order thus made was necessarily a determination that Gibbons held the Ambrose street property, as well as the other real estate, in trust, and he was allowed in his accounts what he had paid for it out of the income of the property.

On the making of this order, the occasion was properly presented for determining whether Gibbons should retain title to the real estate, or convey it to his successor, who was appointed on the same day. And the provision directing Gibbons “ not to interfere further with said trust,” indicates that it was a subject of consideration, otherwise such direction was without a purpose.

If that question was not raised or passed on, the proper practice was to present a petition to the court as in that proceeding for a modification of the order. But, while the order stands unreversed, actions cannot be brought by the several parties interested, to procure determinations to which they may deem themselves entitled as to matters which should have been and may have been passed upon.

The judgment should be affirmed.

Judgment affirmed, with costs.

All concur.  