County of Oakland v. Mack , 243 Mich. 279 ( 1928 )

The bill of complaint is filed by the county of Oakland to quiet its title to lots 117, 134, and 135 of the original plat of the village, now city, of Pontiac. The lots are the site of the county courthouse and jail. Plaintiff had decree. Defendants have appealed.

On November 5, 1818, Stephen Mack and 14 other men entered into a voluntary association, which they designated as Pontiac Company, to purchase lands. Mack was appointed trustee of the company and title to lands was to be taken in his name as trustee; 1,280 acres were purchased accordingly. Mack executed a declaration of trust to the company. After acquiring the lands the company made provision for laying out a town to be known as Pontiac. To advance their interests, members of the company solicited of Hon. Lewis Cass, governor over the territory of Michigan, that the county of Oakland be set off and that the prospective village of Pontiac be selected as county seat, and, to give weight to their solicitations, offered to donate a site or sites for a county jail and a courthouse, and to donate funds.

They were successful. On June 30, 1823, Mack as trustee deeded the lots to certain commissioners for the county. We quote from the deed:

"To have and to hold the above granted and conveyed lots and premises, each and every of them and every part and parcel thereof with the appurtenances unto them the said Enoch Hotchkiss, Ziba Swan and Jonathan Perin, being county commissioners as aforesaid in and for the said county aforesaid, and to their successors in office forever upon trust and confidence nevertheless that the said county commissioners or their successors in office shall cause to be erected on the aforesaid lots numbered 134 and 135 a courthouse for the use of the said county of Oakland and that the said two lots shall be appropriated to no other use or purpose whatever, and that the said county commissioners or their successors in office shall cause to be erected on the said above mentioned lot numbered 117, a jail for the use of the said county, and that the said last mentioned lot shall be appropriated to no other use whatever, and that the said county commissioners and their successors in office shall hold, occupy, possess, rent, lease or sell and convey all or each and every of said lots numbered 29, 30, 31, 32, 33 and 34, to and for the sole use and benefit and behalf of the said county of Oakland and not otherwise. And if the above granted and described lots of land or any or either of them be at any time used, appropriated or sold otherwise than is herein expressed, limited and declared, then the same shall revert back to the said Stephen Mack, trustee, trustee of the said Pontiac Company as above mentioned."

The county promptly caused to be erected a jail on lot 117 and a courthouse on the other lots.

Mack died in 1826. No provision had been made for a successor as trustee. He left a widow and children. The legislative council of the territory passed an act (2 Terr. Laws, p. 329), approved March 31, 1827, from which we quote:

"Be it enacted by the legislative council of the Territory of Michigan, that Almon Mack, and John M. Mack, administrators of the estate of the said Stephen Mack, deceased, be and they are hereby authorized and empowered to make good and valid conveyances, in fee simple, of all and every part of the above described lands, not heretofore conveyed by the said Stephen Mack, deceased, and of all other lands by him, the said Stephen Mack, held in trust for the said association, called 'The Pontiac Company,' to Elon Farnsworth, in trust for and to the use of said Pontiac Company, and the members thereof, and the respective assignees of the several members thereof, being the present proprietors; and said deed of said administrators shall be good and valid in law, for the purposes therein expressed, and taken and received as such in all courts of law and equity in this Territory.

"SEC. 2. That the said Elon Farnsworth, trustee of said Pontiac Company, as aforesaid, be and he is hereby authorized and empowered to make good and valid conveyances, in fee, of all and every part of said lands which may be conveyed to him as trustee, as aforesaid, by the said Almon Mack and John Mack, administrators, as aforesaid, to the several persons to whom they may equitably and justly belong and appertain, as the said association, or a majority thereof, shall from time to time direct."

Pursuant to such legislative act, and on April 15, 1827, said John M. Mack and Almon Mack, sons and administrators of deceased, gave to Farnsworth, as trustee, a deed, executed also by the widow of Stephen Mack and by the wives of said grantors, which deed purported to convey:

"Being all the lands not heretofore conveyed by the said Stephen Mack in execution and in pursuance of his said trust which are included in section twenty-nine, the northeast quarter of section thirty-two, the northeast, northwest and southwest quarter sections of section twenty-eight and the southeast quarter of section twenty, all in township number three north of range ten east and all lying in that part of the Territory of Michigan now included in the county of Oakland. And also all other lands which were held by the said Stephen Mack at the time of his death in trust for the said association called the Pontiac Company, together with all the privileges and appurtenances to the said lands in anywise appertaining and belonging."

In 1841 the county desired to erect other buildings on lots 134 and 135 and Farnsworth as trustee gave to the county a quitclaim deed of such lots, but it was recited in the deed:

"The interest here intended to be conveyed is the right to erect upon said lots public offices for the use of said county of Oakland by the said county commissioners and their successors in office and it being hereby expressly understood that this conveyance shall not in anywise divest the company of said land, but on the contrary it is declared if said premises are used and occupied for any purpose whatever other than mentioned in the deed to said county commissioners dated the thirtieth of June, A.D. 1823, and recorded in the register's office for said county in Liber A, Folios 83, 84, 85, 86 and 87 and for the erection of public offices as hereinbefore mentioned, that the same shall revert to said Pontiac Company as mentioned in said deed hereinbefore referred to. The reversionary in trust in said lots being part of the said lands held in trust, as aforesaid."

From 1823 to the present time the county has had and occupied the lots for the said uses and purposes. Now, it is stated, greater buildings are required, the lots are not sufficient in size and are not well located, the particulars of which need not be discussed. The county, it seems, desires to dispose of the lots and buildings now near the center of an active business and industrial district and to acquire a new location for its county buildings, and it seeks to be relieved of record of the reverter in the deed of Mack, trustee.

The lots were conveyed to the county on condition subsequent with right of reverter in Mack as trustee on breach of condition. This right before breach was not assignable.Halpin v. School District, 224 Mich. 308; 23 Rawle C. L. p. 1104. Under the general rule a trust cannot be created in a right of reverter, because only valuable property that can be assigned may be the subject-matter of a trust. 1 Perry on Trusts (6th Ed.), § 67. But as this right of reverter accrued to the trustee after the creation of the trust relation and as it was carved out of trust property Mack, as trustee, might have asserted the right during his trusteeship had there been breach of condition, for the reason that no assignment of the reverter would have been there involved.

Counsel seem to agree that when Mack died in 1826 the trust was subject to the rules of the common law. Defendants' counsel say that under such rules, and on the death of Mack, sole trustee, the title to the real estate held by him in trust devolved upon his heirs at law; true, but with the trust impressed upon it. 1 Perry on Trusts (6th Ed.), § 343; Cameron v. Hicks, 141 N.C. 21 (53 S.E. 728, 7 L.R.A. [N. S.] 407); 26 Rawle C. L. p. 1277. Had Mack conveyed by deed his own land and reserved to himself and inserted in the deed a condition subsequent, the right of reverter, or the right to take advantage of the condition would have belonged to him and to his heirs. Although such right may not be assigned, it will pass to heirs.Wagner v. Wallowa County, 76 Or. 453 (148 P. 1140, L.R.A. 1916F, 303). So in the case before us, the legal title to the real estate having devolved upon Mack's heirs at his death, the right of reverter, or of re-entry on condition broken, also passed to his heirs, all impressed with the trust.

By the deed of Mack's representatives, and others, it was intended to assign and convey to Farnsworth, trustee, all lands remaining as well as all rights and privileges in Mack as trustee at his death. It was intended that Farnsworth be trustee. It was not intended that Mack's heirs be trustees in any way or of anything. That was the understanding of Farnsworth, trustee and grantee in such deed, as shown by the recitals in his later deed to the county, purporting to surrender, partially, the right of reverter. We agree with the opinion of the trial judge, with respect to the deed to Farnsworth, of the purport of its terms:

"This conveyance carried with it all rights, privileges and appurtenances, which might be in anywise resting in the trust estate, held by Stephen Mack, at the time of his death, in any of the lands and premises of which he had been trustee for the use and benefit of the Pontiac Company."

This right or privilege of reverter (Wagner v. WallowaCounty, supra), carved out of trust property, was in Mack as trustee when he died and it was one of the rights or privileges attempted to be conveyed. The act of the legislative council did not attempt to declare that the condition before breach was an estate or interest in land, it did not attempt to give substance to something which had no being, neither did it abrogate the settled rule of law respecting conveyance of such right before breach. It seems clear that the beneficiaries of the trust (and heirs of Mack would succeed to his interest as beneficiary) who accepted benefits because of the trust and under Farnsworth's trusteeship were, long since, estopped to question the validity of the instruments by which he was appointed and by which he acquired title. And at this time for other considerations which will suggest themselves, such validity could not well be challenged. It is admitted that the deed conveyed to Farnsworth, trustee, all lands which had not been conveyed by Mack, trustee. The attempted transfer or conveyance of the right of reverter did not convey. The right before breach cannot be conveyed. And the attempt to convey extinguished the right itself. SeeHalpin v. School District, supra, and we quote from 1 Tiffany on the Modern Law of Real Property, § 75, cited with approval in Wagner v. Wallowa County, supra:

"The right to take advantage of a condition subsequent belongs, at common law, exclusively to the grantor or lessor and his heirs, and he cannot reserve such right to others, even by express stipulation. Nor can the right to enforce a forfeiture, or, as it is usually called, the right of re-entry, be, at common law, assigned or transferred by the grantor to a third person before entry for the breach; this being in conformity with the common-law rule that 'nothing' in action, entry, or re-entry can be granted over. These restrictions as to the persons able to take advantage of a breach, and the inability to assign the right, have been generally recognized in this country, and not only will an attempted assignment of the right of re-entry be void, but it will have the effect of destroying the grantor's right to enforce the condition, which is thereafter in effect nonexistent."

Conditions subsequent are not favored by the courts, nor by statute (3 Comp. Laws 1915, § 11564). Frequently the condition survives any substantial or actual benefit to the grantor and his heirs and becomes an onerous burden upon the grantee and his assigns, whose prayer for relief is appealing. This, in some degree, may account for the arbitrary rule that an attempt to convey destroys the right. And the author of a note in 38 A.L.R. 1112 states with ample citation of cases:

"It may be also noted in this connection that, where-ever the point has directly arisen, it has been held that the effect of a subsequent conveyance by the grantor of the property, subject to the condition, is to destroy the condition."

In a note L.R.A. 1916F, 311, 312, there is criticism of the rule, but the author says:

"All the American courts which have had occasion to pass upon the question have, practically without dissent, decided it in the same way."

The rule is settled in this jurisdiction. Halpin v. SchoolDistrict, supra. It should be understood that in the case at bar there was something more than the appointment of one trustee to succeed another, as practiced and understood under the present state of the law. The title to the land charged with the trust passed under the then rule of law to Mack's heirs on his death. It was necessary, in order to pass title to Farnsworth, that a conveyance be made. The deed or assignment was before condition broken, when there was nothing in respect of the condition capable of assignment, and, as we have stated, under settled law the attempt to convey destroyed the right.

Relative to the suggestion that an exception to the rule ought to be made here because of the relation of the parties interested, we call attention to a leading case (Rice v.Railroad Co., 12 Allen [Mass.], 141), where it was held, quoting syllabus:

"The right or possibility of reverter which belongs to a grantor of land on condition subsequent is extinguished by a conveyance thereof by deed to a third person before entry for breach of condition; even though such conveyance be to a son of the grantor, who upon the grantor's death becomes his heir."

In Hooper v. Cummings, 45 Me. 359, a father conveyed to his son before breach lands to which such a condition was attached. It was held that the grantor could make no entry or claim as he had no interest, neither could the son, as he was a stranger to the condition.

In Southard v. Railroad Co., 26 N.J. Law, 1, it was said that the grantor's devisee, who was his widow, could not avail herself of a breach of the condition for she claimed as devisee and not as heir.

In Walker Branch v. Wesleyan Cemetery Directors, reported in 29 Ohio Law Journal, 397, it was held, citing many authorities, that the right is not transferable by "alienation or devise." The right may be exercised only by the grantor "or his heirs — not by a stranger." Craig v. Inhabitants of FranklinCo., 58 Me. 479. The beneficiaries of the trust had no power to avoid the conveyance on breach of condition; that right could be exercised only by the trustee or his heirs. Welch v.Silliman, 2 Hill (N.Y.), 491.

The right of reverter having been extinguished, we need not consider the effect of the deed or release of Farnsworth to the plaintiff, nor need we discuss the effect of the recital therein that the right of reverter was in the Pontiac Company rather than in the trustee.

Decree affirmed. No costs.

FEAD, C.J., and NORTH, McDONALD, and SHARPE, JJ., concurred with CLARK, J.