
    Louis Merolla, Appellant, v. Margaret Lane, Respondent.
    First Department,
    December 6, 1907.
    Deed of trust — remainder divested by birth of issue — conveyance by remainderman — grantee’s title not marketable when remainder divested — conveyance by one having power coupled with interest — when possession not adverse to tenant in common.
    When one of four tenants in common, together with his wife, conveys his undivided share to a cotenant, who thereupon reconveys to the grantor in trust to pay the income to each of the trustee’s three children for life and upon the ■ death of each child to convey his share 'in fee simple to his issue if living, or if none, to the survivors, and. in the event of failure of issue of all three children, then the trustee to- convey to himself, with a power in the trustee to convey the fee to the beneficiaries, or in his discretion to sell in .fee simple and reinvest the proceeds on the same trust, there is created a trust for the life of the three children with remainder to their issue, if any, and if not, a remainder to the trustee. '
    When such trustee and remainderman, together with his wife, at a time when his three children were without issue, unites with the other cotenants holding undivided interest in the same lands in an ordinary warranty deed not reciting the trust or purporting to exercise his discretionary power of sale as trustee, the deed is effective only to convey his individual remainder in the lands, and, on the subsequent birth of issue to one of his children, the remainder which the trustee conveyed is divested and vests in such issue. Hence, a subsequent title obtained through the trustee’s grantee is not marketable, being subject to a remainder not passing by the trustee’s deed.
    Although a deed by one holding a power is presumed to he made in the exercise of that power, though not referred to, yet when the power is coupled with an interest, legal or equitable, the presumption is that a deed not referring to the power conveys-the interest only.
    As under the conveyance aforesaid, the grantee became a tenant in common with the trustee, his possession was not adverse in the absence of express evidence of ouster of his cotenant, and a title claimed by adverse possession is too doubtful to he marketable.
    Appeal by the plaintiff, Louis Merolla, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of New York on the 16th day of April,' 1907, upon the decision of the court, rendered after a trial at'the New York Special Term, dismissing the complaint upon the merits.
    
      Max L. Schallek, for the appellant.
    
      Claude V. Pallister, for the respondent.
   Ingraham, J.:

The defendant agreed to sell to the plaintiff certain real property the title to which the plaintiff 'refused- to accept upon the ground that the defendant could not give a marketable title. ' This action was then brought for a specific performance of the contract. The court found that the defendant had a marketable title and dismissed’ the complaint. The property was owned by one Elihu Phinney, who died, leaving a last will and testament by which he devised the property to his four surviving children, One of these children, Henry F. Phinney, and his wife conveyed an undivided fourth interest in this property to Annie W. Phinney, his sister, by a deed dated the 30th of December, 1863, which was duly recorded on April 5, 1864; whereupon the grantee, Annie "W. Phinney, by a conveyance dated the 30th day of January, 1864, which, reciting the conveyance to her from Henry F. Phinney and wife, conveyed the said property to the said Henry F. Phinney in trust, to receive the rents and profits of the property conveyed and to apply the rents, incomes and profits, one-third part thereof to each of his three children during their lives, and upon the death of each child, as to the one-third part held for each child, to assign, transfer and convey the same in fee simple absolute as to the real estate and in absolute ownership as to' the personal property to the issue then living of srich child, but in default of issue, to the survivors, the issue of any one child to take the parent’s share ; and in the event'of failure of issue of all three children, then to convey the said property to Henry Frederick Phinney to his own use and benefit forever, with power to convey and transfer the fee of the said property to the beneficiaries, and with the further power, within his discretion, from time to time whenever he should deem it expedient and proper, “ to sell, grant and convey in fee simple absolute as to the real property and as to the personal property so as to vest the absolute ownership thereof in "the purchase & upon such terms as to price and credit and if on credit as to security as to him shall appear judicious, any property real or personal which shall be held by him upon trust to receive and apply the'rents and profits thereof as herein mentioned, and upon any such sale, grant or conveyance to reinvest the proceeds- in any way he may think judicious such proceeds when so reinvested to be held respectively upon the same trusts as the property from whose sale, grant or conveyance they arose & subject to the same powers and to the same limitations' over as such property would have been if not so sold, granted or conveyed; ” and containing the following declaration: “ I further declare that the true construction of this deed in that respect is that it divides the property thereby granted & conveyed into three parts to be held on separate trusts and that the trust as to each part ceases oh the death of the child above named of said Henry Frederick Phinney to whose use its. rents and profits are directed to be applied and such part is then to belong absolutely to the issue of such child if any living, if none then to the living brothers & sisters of such child and the issue of its deceased brothers and sisters in the proportions mentioned in this deed, and if none such then to Henry Frederick Phinney so that the absolute ownership of no .part of the property is suspended.for more than one life now in being. The trusts as to each part may also be terminated under the discretionary powers given as above mentioned even before the decease of the respective cestui que trust ; ” and this conveyance was duly recorded on April 5, 1864. -

There was here created a trust'for the life of the three children of Henry, with a remainder to the issue of such children, and in default of issue, with a remainder to Henry Frederick Phinney. By indenture dated the • 22d of February, 1867, Henry Frederick Phinney and wife united with the other owners of the estate of Elihn Phinney in a conveyance of the property in question to Edward Birmingham. This was the usual form of a conveyance of the grantor’s individual property without reciting the. trust, or without purporting to exercise the power, with a covenant of quiet enjoyment aiid a general covenant of warranty. This was acknowledged with the usual form of acknowledgment for an individual conveyance. The consideration was stated to be $1,800- and the conveyance was recorded on March 25, 1867. There was evidence' that Susan Cooper Irving, a daughter of Henry-Frederick Phinney, and her son were alive at the time of the trial. It also appeared that on the 28th of January, 1905, there was presented to the Supreme Court a petition of Susan Cooper Irving, formerly Susan Cooper Phinney, in which she set out these various conveyances by which a trust was created for her benefit, alleging that on the 21st of October, 1874, the petitioner was married to Jacob .Sutherland Irving, who died on the 1st day of April, 1881, leaving one. son, . Henry Sutherland Irving, who was born oh the 2d of August, 1875 ; that on the 28th day of October, 1875, Henry Frederick Phinney died without having released, assigned, transferred or conveyed to either .of. his said children for whom this property was held in trust any of the rights or interests under said share so held in trust for each of them under the deed of trust, leaving him surviving Susan Cooper Irving, the petitioner, Frederick Phinney and Charles John Phinney, his three children for whom the trust was created, his next of kin and heirs at law, and leaving a last will and testament which was duly admitted to probate whereby he appointed one Charles K. McHarg his successor in the trust created in the said deed of trust; that on the 30th day of July, 1903, McHarg died without having exercised any of the powers as trustee under the said deed of trust; that on the 14th day of December, 1892, Frederick Phinney, one of the children of Henry Frederick Phipney, died unmarried and without issue; that on the 6th day of November, 1902, Charles John Phinney, one of the children of Henry Frederick Phinney, died unmarried, without issue and without having assigned, transferred or conveyed any of the property that vested in him and the share or interest of said Charles John Phinney under said deed of trust; and upon this petition an order was entered appointing Henry Sutherland Irving, the only son of the petitioner, as trustee to execute the trusts and powers remaining unexecuted under and by virtue of this deed of trust of Annie W. Phinney to Henry Frederick Phinney, dated January 30, 1864. There was no evidence that Henry Frederick Phinney received the consideration named in this deed in the conveyance to Birmingham in 1867. If this petition can be taken as proof of the facts stated therein, it would appear that at the time of the conveyance to Birmingham there were no children of either of the beneficiaries of the trust and Henry Frederick Phinney, therefore, was vested with a remainder in the property which was subject to be divested by the birth of a child to either of his children, and that such remainder was not so divested until the 2d of August, 1875, when Henry Sutherland Irving was born.. Upon the birth of Henry Sutherland Irving, in August, 1875, he became vested with a remainder in all of this property held in trust. Henry Frederick Phinney died on the 28th -of October, 1875, after this remainder had vested in his grandson. He appointed as his successor in trust McHarg, who died on the 30th of Julv, 1903.

The title .of the defendant to the property must rest upon one of two propositions: First, that the conveyance to Birmingham in which Henry Frederick Phinney and his wife joined was an exercise of the power of sale contained in the trust deed; or, second, adverse possession. The conveyance to Birmingham did not recite the trust, nor did the grantors or either of them purport to exercise the powers or to convey anything, except their individual interests. The conveyance is a simple, bargain and sale, with a covenant of quiet enjoyment and a general covenant of warranty. There can be no question but that Henry Frederick Phinney had a vested remainder at the time he executed this conveyance which he could convey and which would entitle him to the fee of the property upon the death of his three children without issue.

In Mutual Life Ins. Co. v. Shipman (119 N. Y. 324) it was held that the provision of the Revised Statutes (1 R. S. 737, § 124) in relation to the execution of a power in trust by which every instrument executed by the grantee of a power, conveying an estate or creating a charge, which such grantee would have no right to convey or create, unless by virtue of his power, shall be deemed a valid execution of the power, although such power he not recited or referred to therein,” was not intended to change the then existing rule;, that whenever, in addition to a power, the grantor, is also invested with other independent interests or powers, whether legal or equitable, with respect to the same property, the rule of the statute does not apply. In that case the testator died leaving him surviving a widow and seven children, and owning real estate which he devised to his wife so long as she should remain his widow, and upon her death or marriage to the children born to him by her. The widow was made executrix of the will, and "was authorized, and empowered to mortgage, lease and dispose of such property for the purpose of carrying into effect the provisions of the will. After the death of the testator the widow married again and subsequently executed a mortgage in her individual name to secure the repayment to the mortgagee of a loan of money. The mortgage contained no reference to the character of the mortgagor as executrix, or to the'power to mortgage contdined in the' will, but appeared on its face to be the individual obligation 'of the widow. The question in that case was' whether the mortgage was an execution of the power conferred by the will to mortgage the whole estate, or was to be restricted to the individual interest which the mortgagor had as doweress in such lands. It was held that bnt for the provisions of the Revised Statutes relating to powers, there could be but little doubt that it would be held to convey only such interest as the mortgagor possessed in her individual right, citing Perry on Trusts (§ 511c); Sugden on Powers (3d Am. ed. 477); Kent’s Commentaries (Vol. 4 [11th ed.], p. 371), and it was said, referring to the statute: The rule was founded in reason and good sense and was intended to provide that whenever a single power exists, under which a grantor may convey or mortgage real estate, his conveyance is attributable to the exercise of the power actually possessed by him; but that whenever, in addition to a power, he is also invested with other independent interests or powers, whether legal or equitable, with respect to the same property, under the authority of either of which he may lawfully act, the rule of the statute should not apply; ” and it was held that, where a woman has a right of dower and a power to sell or mortgage real property, a conveyance or mortgage which does not purport to be in execution of the power only related to the individual interests of the mortgagor or grantor. It was then further said: “ Although this right, while unassigned did not give her a legal estate in the land, it is now well settled that it was a legal interest and constituted property which was capable in equity of being sold^ transferred and mortgaged by the doweress, and liable to be reached by creditors in payment of her debts. * * * The real question under the statute would seem to be whether the mortgagee had a transferable interest in the mortgaged premises; one which would be available in the hands of her transferee as security for a debt. If so, then her interest was sufficient to bring her within the reason and meaning of the statute. * * * It is quite obvious that an interest possessed by a grantor in real estate, whether legal or equitable, that is effectual to create a transfer of property, is equally persuasive as any other in furnishing a motive or reason for making or receiving a particular conveyance, and would furnish an equally strong circumstance from which the imputation of a legal intent might be derived. Both equitable and legal interests in real estate are valuable and capable of transfer and are equally effective in determining the intent with which a particular conveyance is made,” and this case was followed-in Weinstein v. Weber (58 App. Div. 112; 78 id. 645; affd., 178 N. Y. 94).

.Certainly, in this ease, a vested remainder in real property which, as the record- then stood, would entitle the grantor' to the fee. upon the death of his three children, was as substantial an interest in the property as an unadmeasuréd right of dower. The fact that the trustee joined with other persons, who were owners of interests in this property, in a conveyance of it which on its face conveyed only the grantor’s individual interest, is inconsistent with the conveyance being the execution of the power of sale. Upon the question of the adverse possession, I do not think a title was established which a purchaser was bound to take.. Under the conveyance the grantee would be entitled to three-fourths of the .property^ and he thereby became tenant in common with Henry Frederick Pliinney as trustee. The trust as to one-third terminated in 1892, as to another one-third in 1902, and as to another one-tliird it had not terminated at the time of the trial. . The possession under this conveyance was found to have commenced in 1870, when the trust still existed as to all the property. It does not appear when either of these cestuis que trustent were born, but they were all apparently alive on the 30th of January, 1864, when the trust deed was executed. Generally the possession of one tenant in common is the possession .of his cotenant,'and to justify a claim of adverse possession there must be express evidence of ouster of the tenant in common against whom adverse possession is claimed. There is no evidence of such ouster, or any claim that the title held was adverse to the trust estate. It does not appear that a new trustee has been appointed who claims an interest in the property, and in view of this claim and uncertainty as to the possession as adverse to the trust estate, I do not think that the title was marketable.

The judgment should, therefore, be reversed and a new trial ordered, with costs to the appellant to abide the event.

Patterson, P. J., Lattghlin, Clarke and Scott, JJ., concurred.

Judgment reversed, new trial ordered, costs to appellant to abide event. '• ’. 
      
      
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      Revised in Real Prop. Law (Laws of 1896, chap. 547), § 155.— [Rep.
     