
    Bernhard Freund, Appellant, v. Louis Biel and Rose Biel, Respondents.
    First Department,
    July 12, 1906.
    Real property—reservation by grantor of claims against trespassers taking easements — resulting trust between grantor and grantee.
    When the grantor of lands reserves the right to receive any damages for taking easements therein by an elevated railway, the reservation though inoperative to create a trust in or to give the grantor a property right in the land itself, operates nevertheless so as to create a resulting trust between the grantor and grantee whereby the latter, who alone is entitled to sue trespassers, holds any damages recovered in trust for his grantor who is entitled to recover the same,
    The rule holds as to sums received hy the grantee on a settlement of his claims as well as to damages recovered hy action.
    McLaughlin and Clarke, JJ., dissented, with opinion.
    Appeal by the plaintiff, Bernhard Freund, from a judgment of the Supreme Court in favor of the defendants, entered in the office of the cleric of the county of New York on the 11th day of April, 1905, upon the decision of the court rendered after a trial at the New York Special Term dismissing the complaint upon the merits.
    
      A. J. Skinner, for the appellant.
    
      Samuel Heyman, for the respondents.
   Patterson, J.:

The practical question arising on this appeal relates to an asserted right of the plaintiff to recover from the defendants a sum of money received by them as consideration for a conveyance of easements appurtenant to the premises known as No. 1926 Third avenue in the city of New York, and a release from all claims, damages and causes of action which existed in the defendants’ favor, including all claims, damages and causes of action for depreciation in the value of the premises, loss of rents or rental value claimed, and the annoyance or injury to the owner or occupant and interference with the use of the premises or the easements appurtenant to the same produced by the construction, maintenance or ojieration of an elevated railway in front of the said premises. The facts of the case are undisputed. Prior to October 30,1895, the plaintiff was the owner in fee of the premises above mentioned. On that day he conveyed the same to the defendant Louis Biel, who afterwards, in 1899, conveyed them to his wife, the defendant Rose Biel, who subsequently, and on May 5, 1902, reconveyed them to her husband. In the deed from the plaintiff to Louis Biel is contained the following clause: “ Saving, reserving and excepting, however, the easements in the street which may have been heretofore taken and are now being used by the New York Elevated Railroad Company and the Manhattan Railway Company in the construction, maintenance and operation of their elevated railroad in Third Avenue, as now constructed, maintained and operated. This reservation is not intended to- operate as a conveyance of the said easements to said companies, but to enable the party of the first part to carry out the provisions of any judgment that he may hereafter procure against said companies, whereby he may be directed, in the event of a tender to him or his attorneys of a certain sum of money, to make a conveyance of a right to use the street in front of said premises for the maintenance of the present structure and the operation of the railroad as now operated by the defendants, and to deliver a release from the plaintiff in said action of all future damage to be incurred by him from the maintenance of the structure and operation of the present railroad in front of said premises as at present operated and maintained.”

In October, 1902, the defendants made an arrangement with the railway companies by which they received compensation for a conveyance of easements appurtenant to the premises in question and for damages to the rental value thereof. The easements and property rights appurtenant to the premises which passed by the eon•veyance to the Manhattan Bailway Company and the Hew York Elevated Bailroad Company are substantially the same easements and property rights appurtenant to the said premises which are referred to in the reservation contained in the deed from the plaintiff to the defendant Louis Biel. That was specifically found by the court on. the trial of this action. The plaintiff claimed at the trial, as he does now, that he is entitled to the money received by the defendants from the railway companies as a consideration for the conveyance and release. The learned justice at Special Term held that the reservation contained in the deed of the jdaintiff to the defendant Louis Biel was inoperative for any purpose and that it was merely an attempt to reserve from a grant of land the easements that pertained thereto. Thereupon the complaint was dismissed on the merits, and from the judgment entered upon that decision the plaintiff appeals.

It is beyond dispute that the plaintiff could not by a reservation in the deed retain to himself property in the easements. They passed to the grantee with the land. They are inseparable from the land and the reservation is also ineffectual to create a trust in the easements, but as between the grantor and grantee that reservation “ does create a resulting trust by virtue of which the grantee becomes a trustee for his grantor as to all moneys received or judgments recovered for the invasion or destruction of such easements.” (McKenna v. Brooklyn Union Elevated R. R. Co., 184 N. Y. 396.) As between the plaintiff and the defendants the reservation in the conveyance operates to retain in favor of the plaintiff certain rights which the defendants could not and ought not to disregard. (Pegram v. Elevated R. R. Co., 147 N. Y. 147.) There exists in the plaintiff by virtue of the reservation an equitable right to whatever recompense is to be made for the taking of the easements and for injuries done to the premises, and the court may assume that by the reservation the grantor and grantee agreed that part consideration of the conveyance of the land should consist of the damages to be recovered from the trespassers. We think it is clear from the terms of the reservation under consideration in the present case that the grantor should receive the benefit of whatever might be recovered or received as compensation for an invasion of the easements, or damages sustained to the fee value of the premises or the rental value thereof, up to the time of the conveyance, and that when, the defendants received from the railway companies the money paid for the conveyance and release, such defendants held that money as trustees of a resulting trust for the plaintiff. It is unnecessary to consider particularly how that trust arises, as that subject is fully discussed and explained in the opinion of Landon, J., in Western Union Tel. Co. v. Shepard (169 N. Y. 170).

It is said, however, that the reservation in this case differs materially from those contained in the deeds under consideration in McKenna v. Brooklyn Union Elevated R. R. Co. and Western Union Tel. Co. v. Shepard (supra). There is a difference in the phraseology of the several clauses of reservation, but that does not affect the underlying principle of the McKenna case nor its application. If we understand correctly the ruling in that case it is that notwithstanding the inefficacy of the reservation to continue in a grantor any right of property in the easements or any right of action against the trespassers, yet, as between the grantor and grantee, where it is obvious that the equitable right of the grantor to receive the benefit of whatever was to be recovered or secured from the trespassers for the invasion of rights affecting the property previous to the transfer is preserved, the grantee (who alone can enforce a claim against trespassers) if lie receives compensation for the wrongful acts; holds that which he has received as trustee for the grantor under the reservation.

In this view of the case we conceive it to be entirely immaterial whether the grantee sues the trespasser or settles the claim without litigation. In equity he is not entitled to retain the money, and as Judge Landon observed in Western Union Tel. Co. v. Shepard, the defendants ex mquo et bono have no right to withhold the proceeds from the plaintiff. Receiving the proceeds, they take the same as trustees for the plaintiff. The question is one of equities between the parties to this suit and those equities underlie the form of the reservation, the intent of the grantor in making the reservation and of the grantee in receiving the deed with the reservation being apparent.

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

O’Brien, P. J., and Laughlin, J., concurred; McLaughlin and Clarke, JJ., dissented.

McLaughlin, J. (dissenting):

I am unable to concur in the prevailing opinion. The easements appurtenant to the property conveyed were inseparable from it. The conveyance necessarily carried with it the easements, notwithstanding the attempted reservation. As to the damages for the impairment of the easements which had accrued at the time the conveyance was made, these could be reserved as between the grantor and grantee, and if the latter thereafter had a recovery for the same he would hold the same in trust for the former, and this upon the theory that the same was.a part of the consideration. But as to the damages which accrued after the conveyance, they could not be reserved any more than could the easements, because this, in effect, would destroy the conveyance itself.

I do not understand that any different doctrine was laid down in the cases cited in the prevailing opinion.

Here the plaintiff seeks to recover what the railway companies paid to the defendants for the right to operate their railroads in front of his premises, and for damages which had accrued to him by reason of the impairment of his easements of light, air and access subsequent to his acquiring title. In the amount thus paid the plaintiff had no interest, not only because he could not, by reason of his conveyance, Reserve such right, but also because of the wording of the reservation itself.

I, therefore, vote to affirm the judgment.

Olaeice, J., concurred.

Judgment reversed, new trial ordered, costs to appellant to abide event.  