LENA H. OGILBY and ANNE H. OGILBY, Respondents,
CHANDLEE H. HICKOK, Appellant.
APPEAL by the defendant, Chandlee H. Hickok, from an interlocutory judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of New York on the 19th day of December, 1910, upon the decision of the court, rendered after a trial at the New York Special Term, sustaining the plaintiffs' demurrer to a separate defense set forth in the defendant's answer.
Ralph Polk Buell, for the appellant.
Arthur O. Townsend, for the respondents.
The complaint alleges that the mother of the plaintiffs and defendant, in 1905, died intestate, leaving as her sole heirs
at law the parties to this action; that at the time of her death she was seized and possessed of certain real estate situate in the city of New York; that prior to her death, without any consideration, she conveyed the real estate to the defendant upon his promise to hold it for her sole use and benefit and to reconvey to her, or her heirs, whenever she or they so requested; that the deed of conveyance to the defendant was recorded, and some time thereafter he, at her request, reconveyed the property to her, but that the deed of conveyance was never recorded and has been lost; the judgment demanded is that it be decreed that each of the plaintiffs and defendant is seized and possessed, in fee simple, subject to a mortgage now on the premises, of an equal undivided third part thereof; that the premises are so situate that an actual partition cannot be had; that for that reason the premises be sold and the proceeds derived therefrom paid to the parties according to their respective rights therein; that the defendant account for the rents received, and whatever amount may be found due, together with the costs of the action, be deducted from his share.
As a separate defense the defendant alleged that after the death of his mother a dispute arose between the plaintiffs and defendant concerning the premises in question, and in order to settle the same, amicably adjust the claims of the parties and preserve the defendant's rights in the premises, they entered into an agreement in writing, which is annexed to and made a part of such defense. This agreement recites: 'In consideration of the love and affection which the said Chandlee H. Hickok bears to his said sisters, and of the sum of one dollar to him in hand paid by each of said sisters, the receipt whereof is hereby acknowledged, and in consideration of the moral obligation recognized by him to them, and in further consideration of each of his said sisters releasing to him * * * all claims, legal and equitable, which each of said sisters might have upon the property hereinafter described, which she does hereby so release, the said Chandlee H. Hickok agrees to hold the premises known as number 43 East Fifty-ninth Street, Manhattan, New York City, heretofore conveyed to him by his mother, in trust for himself and each of said sisters and their respective heirs, in equal shares, and that
he will upon demand execute and have recorded a deed in proper form showing the interest of his said sisters in said property. Upon the written demand of any two parties hereto, or their legal representatives, the trustee shall be required to sell said premises for sixty thousand dollars ($60,000) or upwards, at any time, and said trustee shall have power to sell the same at a less price upon the written consent of all of the parties hereto, or their legal representatives. * * * In case of the sale of said premises, the proceeds of said sale shall be divided into three equal parts, and shall be paid to each of the respective parties hereto. * * * Upon the death of the survivor of said Lena H. Ogilby and Anne H. Ogilby, this trust shall terminate and the property shall be divided, or the fund from the sale thereof distributed, among the heirs-at-law of the three beneficiaries above named. For the purpose of distribution the interests of said three beneficiaries shall be considered as vesting at the date of this agreement.' The agreement also contains a provision as to the rents and profits derived from the premises, and a division of the same equally among all of the parties thereto.
The plaintiffs demurred to this defense upon the ground that the same was insufficient in law upon the face thereof. The demurrer was sustained, and from an interlocutory judgment to that effect the defendant appeals.
The demurrer was sustained upon the ground, as appears from the opinion delivered by the learned justice sitting at Special Term, that the agreement was ineffectual for any purpose because it made the defendant a trustee for his own benefit. I do not think the agreement is subject to this criticism. The fact that the defendant has a beneficial interest in the real estate in question does not prevent his taking charge of the same for himself and others having a like interest therein. Of course the same person cannot be, at the same time, trustee and beneficiary of the same interest. ( Woodward v. James, 115 N.Y. 346.) Here the defendant is to take and manage the property, at least to the extent of two-thirds of it, not for himself but for the benefit of the plaintiffs. He can, therefore, act as trustee for them, and that trust is over the whole estate for the purpose of its management and disposition. And if it were held
that he was disqualified for any reason from acting, that would not destroy the agreement, because the trust thereby created would then vest in the Supreme Court, which would appoint its agent to carry out the same. ( Rankine v. Metzger,69 A.D. 264; affd., 174 N.Y. 540; Losey v. Stanley, 147 id. 560; Roge ...