Silverman v. Kristufek

The position taken by the appellant in this case is, that block 60, of which the property here in controversy is a part, was conveyed by Walter L. Newberry to Elijah K. Hubbard in trust for Nevins, Townsend Co., and C. T. Moulton, H. L. DeKovan and Elijah Hubbard; that the deed did not state the objects of the trust; that the trust was merely passive; that the use was executed by the Statute of Uses; that the legal title passed through Elijah K. Hubbard, and vested immediately in the parties for whose use it was conveyed; and that, as plaintiff deraigned his title from Elijah K. Hubbard, and not from the cestuis que usent, he is not entitled to recover.

The original deed from Newberry to E. K. Hubbard had been lost or destroyed, and there was no evidence of its contents, except such imperfect memoranda as had been made before its loss or destruction from the original instrument or the record thereof. Such evidence of this kind as the plaintiff produced showed, that the deed as executed by Newberry to E. K. Hubbard was a simple warranty deed, and not a deed containing any provision as to the property being held in trust. Such evidence as the defendant introduced tended to show, that the property was conveyed in trust for certain persons, and that it was not an absolute conveyance without trust qualifications. As both parties, by their instructions whether those instructions were right or wrong, left it to the jury to determine whether the original deed was one without a trust provision as plaintiff claimed, or whether it was a deed with a trust provision as defendant claimed, and as the jury found for the plaintiff upon this issue, there would seem to be no ground for a reversal of the judgment of the trial court.

Appellant claims, however, that the verdict is against the weight of the evidence. It is contended, that the proof of a conveyance by Newberry to E. K. Hubbard in trust for the persons above named is of a more conclusive character than the proof which supports the opposite theory. Let it be admitted that this contention is well founded, what then?

"Under the Statute of Uses, where an estate is conveyed to one person for the use of another, or upon a trust for another, and nothing more is said, the statute immediately transfers the legal estate to the use, and no trust is created although express words of trust are used." (Kirkland v. Cox, 94 Ill. 400). "Under the Statute of Uses a feoffment to A for the use of or in trust for B, would pass the legal title to B." (Witham v. Brooner, 63 Ill. 344). This, however, has reference only to what are called passive or dry trusts. In the case of a merely passive trust the legal estate never vests in the feoffee, but is instantly transferred to the cestui que use as soon as the use is declared. (Kellogg v. Hale, 108 Ill. 164). By a conveyance to A in trust for B the latter takes both the legal and equitable estate, and A takes nothing. (Roth v. Michalis, 125 Ill. 325). In case of a merely passive trust, the trustee acquires but a momentary seizin to serve the use which the statute executes by transferring the legal estate to the beneficiary named (O'Melia v. Mullarky, 124 Ill. 506).

But where the trust is an active one, the statute does not execute the use. A conveyance is withdrawn from the operation of the statute where such powers or duties are imposed with the estate upon a donee to uses, that it is necessary for him to continue to hold the legal title in order to perform his duty or execute the power. Special or active trusts are not within the purview of the statute. (Kirkland v. Cox,supra). Where the trust is of such a character that the trustee is required to convey the estate, the trust is an active one. (1 Perry on Trusts, — 3d ed. — sec. 305). "If * * * the trust is created for some special purpose, as to convey the estate * * * it is a trust which the statute will not execute, and of course it leaves the legal estate in the trustee." (2 Washburn on Real Prop. — 5th ed. — marg. page 163). So, the operation of the statute is excluded, and the trust or use remains a mere equitable estate, if the purpose of the trust is to protect the estate for a given time. (Kirkland v. Cox, supra). As Lord Chadwicke said in Chapman v.Blisset, Forrest, 145: "Where particular things are to be done by the trustees, it is necessary that the estate should remain in them so long at least as those particular purposes required it." (1 Hill, (S. C.) 413).

"In order to bring an estate within the operation of the Statute of Uses, so as to execute the use in respect to the same, there must be a concurrence of three things, first, a person seized to a use; second, acestui que use in esse; and third, a use in esse either in possession, reversion or remainder." (2 Washburn on Real Prop. marg. p. 113;Witham v. Brooner, supra; 27 Am. Eng. Ency. of Law, p. 911). The third section of our Conveyance act, which is substantially the same as the Statute of Uses of 27 Henry VIII, provides, that "where any person shall stand seized of and in any lands to the use or trust of any other person or persons or of any body politic," etc. (1 Starr Curtis, p. 569). Thecestui que use must be a person or body politic — a natural person, or an artificial person, like a corporation. Where the estate is limited to the use of a person not in esse, or capable of being ascertained, the statute will have no operation until the cestui que use comes into being, or is ascertained. Where there is no determinate person to claim as beneficiary there is wanting an essential element of a trust, and where the trustee must hold the legal title until the beneficiaries are determined, the case is not one where the statute transfers the legal estate to the use. (2 Washburn on Real Prop. — 5th ed. — marg. pp. 115, 116, 163; Preachers' Aid Society v.England, 106 Ill. 125; Dean v. Long, 122 id. 447).

An examination of the deed from Newberry to E. K. Hubbard, as its contents are revealed by appellant's testimony, shows that the property was conveyed in trust for "Nevins, Townsend Co." and others. "Nevins, Townsend Co." was a firm or partnership. A partnership is not a legal person either natural or artificial. Hence, a conveyance to a partnership in the partnership name is insufficient to convey the legal title, and is valid only as a contract to convey, and vests only an equitable title in the partnership. The title to land cannot be held by a conventional person not recognized as a distinct entity in the law; hence a deed to "Nevins, Townsend Co." passes nothing at law. In such a deed, there is not only no legal grantee, but certainty in titles is required by public policy. A surname may designate a number of persons. But while a deed to "Nevins, Townsend Co." would be invalid at law because made to an indefinite grantee, it would give rise to an equity in the members of the firm. If the deed here had been made by Newberry directly to "Nevins, Townsend Co.," the legal title would still have remained in Newberry, subject to the right of the firm to obtain a conveyance of the legal title to one or more members of the firm, or to all of them, upon establishing by parol testimony the names of such members and their membership in the firm. When the deed was made to E. K. Hubbard in trust for the firm, Hubbard as trustee also held the legal title subject to the same right. (Tidd v. Rines, 26 Minn. 201;Kelly v. Bourne, 15 Ore. 476; Percifull v. Platt, 36 Ark. 256; 1 Bates on Partnership, sec. 296; Parsons on Partnership, — 1st ed. — p. 333; 17 Am. Eng. Ency. of Law, p. 959).

Thus, it is evident that the deed by Newberry to E. K. Hubbard in trust for "Nevins, Townsend Co." conveyed a legal title to the trustee to be held for the benefit of indefinite and undetermined grantees, and to be conveyed to them upon their ascertainment by parol proof. The statute did not execute the use, because the legal title did not pass at once from the trustee to thecestui que use. After the conveyance to the trustee, there remained an equitable trust cognizable only in a court of equity, and the legal estate remained in him unaffected by the Statute of Uses, and for the accomplishment of a particular purpose.

The proof introduced by the defendant below leaves it uncertain what the interests of Moulton, DeKovan and Elijah Hubbard were intended to be by the grantor, Newberry. It is true, that, as a general rule, where a tenancy in common is established, but no proof is made in regard to the relative interests of the several co-tenants, the presumption of law arises that their shares are equal. (Freeman on Co-tenancy and Partnership, — 2d ed. — sec. 105). But if the firm of Nevins, Townsend Co., and Moulton and DeKovan and Elijah Hubbard are to be regarded as tenants in common, what are their respective interests upon the face of the deeds and independently of outside proof? The second memorandum produced by defendant represents the deed to have been from Newberry to E. K. Hubbard "in trust for Nevins, Townsend Co., and C. F. Moulton of the city of New York, and H. L. DeKovan and Elijah Hubbard of Middletown, Conn." Does this description of the trust indicate, that the firm was to take one-fourth and each of the others one-fourth of the property? But the first memorandum introduced by defendant represents the deed as saying, that the land was conveyed "in trust for Nevins, Townsend Co., and C. T. Moulton, H. L. DeKovan and Elijah Hubbard." Does this description of the trust indicate that the firm was to take one-half of the property, and the others the other half thereof?

If the statute could be said to execute the use as to the interests of Moulton and DeKovan and Elijah Hub- bard, even though the interest of the firm was excluded from the operation of the statute, there yet remains an uncertainty as to the extent and amount of the interests of the cestuis que usent. This would seem to require the legal title to remain in the trustee for the purpose of ascertaining the members of the firm and conveying the interest of the firm, and also for the purpose of ascertaining the extent of the firm's interest in the property. If the legal title is required to remain in the trustee for the purpose of ascertaining and conveying the firm's interest, it must remain as well for the purpose of ascertaining and conveying the interests of all.

But we are of the opinion that, here, the statute did not operate instantly, and vest the legal estate in the cestuis que trustent, because, "if several trusts are created in the same instrument, some of which would be executed by the statute, and others would require the legal estate to remain in the trustees, they will take the legal estate." (1 Perry on Trusts, — 3d ed. — sec. 309).

We think that the decision of the Superior Court of Cook county was correct. The judgment of that court is, accordingly, affirmed.

Judgment affirmed.