p. 174proceeds of the real estate in her capacity of devisee. But she ■would have taken such surplus as money, not as land. And the devolution from .her would be altered accordingly. (Dixon v. Dawson, 2 Sim. & Stu. 327. Smith v. Claxton, 4 Mad. Rep. 484.) “ I adhere,” says Sir John Leach, “ to the principle which I stated in the case of Smith v. Claxton, that where the land is properly sold by trustees, and there is only a partial distribution of the produce of sale, there the surplus belongs to the heir as money, not as land.” The testator devised real estate in trust to sell, and out of the proceeds to -pay various "charges and legacies. The sale was made in the lifetime of her heir at law, and there was a surplus. He was held entitled, as against a residuary legatee. But he died before the trusts of the will were completed. And the surplus was held to have vested in him as money, and to belong to his personal representative. The case of Flanagan v. Flanagan, before -Lord Camden, (Leigh & Dalzell, 164, 1 Bro. C. Rep. 500,) goes upon a similar principle. The surplus "proceeds were decreed -to go, and of course must have.gone, to the devisees of the real estate. But although they would have the character of realty, ■so as to let in all his real charges, such as judgments, yét it so vested in him as upon his death to go to his personal representatives. And this distinction meets and reconciles the case of Banks v. Scott, (5 Mad. Rep. 493,) so much relied upon. The avails of the estates sold after the bankrupt’s death, went to his heir at law, being unnecessarily sold, .as it turned out. The decision was placed upon the ground that the property descended, subject'to the charge of the bankrupt laws. The heir was living. The question would have been very different if that heir had been dead, and the contest had arisen"béfwéeíx his heirs and personal representatives. Then the cases I have referred to would have applied. The complainant is entitled to his share of the fund.
John Anthon, for the appellants.
In all cases the inten tiop of the testator must be respected, and technical rules of‘the court of equity cannot be allowed to control it. !It -was clearly
p. 176been the rule of equity, had the testator directed the sale; a fortiori it must be so when the occurrence of unforeseen circumstances has so far affected the will of the restator. On every ground therefore the fund in question belongs to the heirs.
H. P. Edwards & Geo. Wood, for the respondent.
The real estate in the city of New-York, though liable to the payment of the testator’s debts, under the will, was not made the primary fund for that purpose. The real estate having been taken and applied to the payment of such debts, the devisees thereof are entitled to claim the personal estate since recovered, and a portion of which is claimed in this suit, in exoneration of the real estate thus disposed of, and applied to the payment of the said debts. In this construction of the law as applicable to this branch of the case, all parties agree : and, in pursuance of this construction, the executors have distributed the money received by them under the French treaty amongst the devisees, with two exceptions. That the devisees of the real estate sold to pay debts, are entitled to the money, is not disputed; and the only 'question is, whether on the death of Catharine Ann Graham, one of the devisees, before the distribution of the money by the executors, the same goes to her heirs at law, or to her personal representatives. The property claimed in this suit being personal estate, and claimed as such in equity, the complainant, on the death of his wife, is entitled to it as her administrator. If this personal estate were even to be considered in the light of the proceeds of the real estate, sold under the order of the court for the payment of debts, the conversion into personalty being made by the court, in a course of law, without fraud, the proceeds would be considered as personal estate, and as such pass to the personal representative. The rule is universal, that when real estate has been converted into money, either in pursuance of a power contained in the will of the testator, or under the order of a court having authority to make such order, and where there is no fraud, such proceeds of real estate are considered in equity as personal estate, and follow the order of, distribution of personal estate. This is
p. 181dent in the lands, but) to such portion of the said rents, issues and profits as the person they shall represent would have been entitled to if living.” If this clause announces any thing in relation to the testator’s intention, it clearly announces this: that he intended that the lands should always descend to the heirs at law of the devisees, but that the rents and profits might, in the event of the death of the devisee, go to the executor of such devisee, while the lands descended to the heirs. I think the force of this position, drawn from the will, was before the mind of my learned opponent, while framing this part of his argument. I cannot otherwise account for his careful omission of the words rents, issues and profits, after the word portion ; words which so decidedly limit its meaning. In conclusion, all that the appellants insist upon in this case, is that the will of the testator be observed, and that such will be not defeated by any perverted application of arbitrary rules, adopted by the court of chancery for a very different purpose, viz. to reach the intent and not to defeat it.
There can be no doubt that the fund in controversy, in equity, must be considered as a substitute for the land in the city of New-York; and that it belongs to those to whom the land was devised, or to those who now represent their rights, exclusively. It is suggested in some of the answers that the real estate in New-Jersey, which was not disposed of by the will of the testator, was also sold for the payment of the debts; that such land descended to all the children of the decedent, and that by the laws of New-Jersey which were then in force, the sons took by descent, from their father, shares which were twice as large as those of the daughters; and that they, or their representatives, are entitled to a part of the fund in controversy, on account of the sale of those lands. The answer to that claim is that the value of the lands which were sold in New-York, far exceeded the amount recovered under the French treaty; and that, by the common law, as between heirs and devisees, the land which is undisposed of by the will of the testator is primarily liable for the payment of the debts of the de
p. 182cedent, and must first be resorted to for that purpose. Here, the whole personal estate of the testator, including the amount subsequently recovered under the French treaty, and the proceeds of the whole real estate undisposed of by the will, were insufficient-to pay the debts of the testator. The devisees of the real estate, in the city of New-York, which was sold to pay debts, exclusively were entitled to the
spes recuperando or hope of obtaining satisfaction from the French government, for the testator’s vessels which had been illegally captured and condemned. For if this fund had been received and applied to the payment of the debts, immediately after the death of the testator, the real estate in New
Jersey, not disposed of by the will, must still have been sold for the same purpose. Not so, however, as to a portion of the real estate in the city of New-York, which was devised to seven of the testator’s children in equal proportions. For if the part of the personal estate which then consisted in the mere hope of obtaining an indemnity from the French government, could have been realized at that time, a part of the real estate in the city of New-York, which was subsequently sold under the surrogate’s order, would have been saved to the devisees. This brings me to the main question in controversy in this cause. Was the hope or chance of obtaining remuneration from the French government, to which the devisees of the city property were equitably entitled the moment their property was sold under the surrogate’s order, real or personal estate, before the money was actually received by the executors, under the treaty
1If either of the devisees had died before the actual sale of the property under the surrogate’s order, even after the order for sale had been made, that land would have descended to the heirs at law of the decedent. And upon a sale of such land they would have been subrogated to the rights of the creditors, as to this French claim, which was a part of the personal estate of Isaac Clason. For in that case the real estate of the heirs of the original devisee, and not the real estate of such devisee, would have been sold for the payment of the debt which was chargeable primarily upon the personal estate of the devisor ;
p. 183and the heirs of the devisee would of course be subrogated to the rights of the creditors as to the personal estate, which was primarily liable. So, if a judgment debtor should die leaving personal property sufficient to pay his debts, and the sheriff, having advertised the real estate of the decedent for sale previous to his death, should afterwards proceed and sell the same, after it had become the real estate of the heirs at law, the heirs would be entitled to be subrogated to the rights of the judgment creditor, as against the personal estate which was primarily liable for the payment of such judgment. This being so, the decision of Lord Camden, in
Flanagan v.
Flanagan, referred to by the counsel of the appellants and by the assistant vice chancellor, was clearly wrong; if the facts of that case are correctly stated by Sir Thomas Sewell in
Fletcher v.
Ashburner, (1
Bro. C. C. 500.) For, from that statement it appears that the land which was sold under the decree by mistake, was not sold until after the legal title had been cast upon the grandson, as heir; the grandfather, to whom that half of the estate belonged, having died subsequent to the decree, but before the sale. It was the property of the grandson, therefore, which was erroneously sold in that case. Consequently he was not only equitably but legally entitled to the proceeds of the erroneous sale.
(Smith v.
Kearney, 2
Barb. Ch. Rep. 551 .) And the same should not have been decreed to the personal representatives of the grandfather, as they properly would have been had the land been actually converted into personal estate by a sale previous to his death.
In the case under consideration, the real estate had actually been converted into personalty, by the sale, fourteen years be fore the death of Mrs. Graham; although the substituted fund was not really received by the- executors until some time aftei her death. The moment the land was sold, the devisees became entitled to the proceeds of the French claim; not as real estate, but as a personal fund to which they had an equitable right to resort to remunerate them for the loss of the land. The right of Mrs. Graham to one-seventh of the French claim was an interest in personal estate which she had at the time of
p. 184tier death. And her real and her personal representatives being equally volunteers, there is nothing to take this case out of the general rule that they must take their estate of the intestate as they find it.
It is true, if the real estate of the devisee had not been sold under the order of the' surrogate, and she had .continued to own it until the time of her death, it would have descended to her heirs at law, and her husband would have been excluded. But there is no legal presumption that a feme covert who is the owner of real estate will not join with her husband in selling it,, for the purpose of converting it into personalty. And the real estate in this case having been converted into personalty, by operation of law, during her lifetime, it must now be disposed of in the same manner as if she had herself converted it into .personal property.
' The cases referred to in the opinion of the assistant vice chancellor fully sustain his decision in .this case; and I do not see how he could have come to a different conclusion without disturbing principles which have been long settled. The decree appealed' from must therefore be affirmed, with costs.