Rockland-Rockport Lime Co. v. Leary

Upon the death of the lessor, intestate, the real estate in question descended to his heirs at law subject to the dower right of the widow, who did not sign the lease, and subject also to the lease itself and the provision for an option contained therein. As the agreement by its terms bound “ the heirs, legal representatives, successors or assigns ” of the parties, the death of the lessor did not affect the right of the plaintiff to exercise the option. The contract for an option ran with the land and was still in force when the efforts to exercise it were made, and the question presented for decision is whether those efforts were sufficient to satisfy the requirements of the instrument in that respect. • The appellants claim that the notice of intention should have been served upon the heirs at law. The respondents claim that notice to the administratrix and the attempt to make a tender to her as the legal representative of the deceased lessor were sufficient to call for a conveyance, and, if not, that notice to Daniel J. Leary, the heir who acted for all the others and his refusal to carry out the option, entitled the plaintiff to the relief sought.

The action was twice tried, and on the first trial the complaint was dismissed upon the ground that notice should have been given and tender made to the heirs of the lessor, mainly for the reason that they had become the owners of the property and were to make the conveyance. Upon appeal to the Appellate Division that judgment was reversed, and it was held that notice and tender to the administratrix and not to the heirs was required, because the option when exercised worked an equitable conversion ofothe realty into personalty

The mam reliance for this conclusion is Lawes v. Ben-net (1 Cox Ch. 167), decided in 1785 by Lord Kenyon wlien master of the rolls. In that case a lease was made for a long term with an option to the lessee to purchase the demised premises within a limited period for the sum of three thousand pounds. The lessor died, and by his will, made several years before the lease, he devised all his real estate to his cousin, John Bennett, and all his personal property in equal parts to the said John and to Mary, his sister, who were appointed “ joint executors. ” In due time the option was exercised. Bennett conveyed and the purchase price was paid to him. A bill was filed by Mary to compel him to account to her for one-half of the three thousand pounds, and, as the reporter states, the single question was “ whether the premises being part of the testator’s real estate at the tune of his death, but sold afterwards under the circumstances aforesaid, the purchase money should be considered as part of the real or personal estate of the testator. ” It was argued on the one hand that there was no declared intention of the testator to convert the realty into personalty; but it was left to the lessee, a stranger, to work the conversion, with the result that a simple contract creditor might wait many years before he knew whether there were any assets or not. It was contended, on the other hand, that the absolute owner of property may give to a stranger any power over it that he thinks fit and that the testator had ample time before his death to alter his will if he had been so inclined. In a very brief opinion and without much argument, the master of the rolls held that “ When the party who has the power of making the election has elected, the whole is to be referred back to the original agreement, and the only difference is, that the real estate is converted into personal at a future period.” °Accordingly he declared the

This case has heen uniformly, although at times Reluctantly, followed in England, and occasionally, hut not universally, in the United States, not, however, without serious criticism in both countries. (Townley v. Bedwell, 14 Ves. 590; Collingwood v. Rew, 3 Jur. [N. S.] 785; Smith v. Loewenstein, 50 Ohio St. 346 .) The painciple has never been extended, even in England, but has heen limited whenever limitation was possible without overruling Lord Kentyont. (Emuss v. Smith, 2 De G. & Sm. 722; Edwards v. West, L. R. [7 Ch. Div.] 858.) It has been regarded as “difficult of explanation” and as creating “ a very singular and inconvenient state of things. ” The main reason for following it, as an eminent English judge once intimated, is because it was “decided by so great a man as Lord Kenyon'.’'’

The Supreme Court of Ohio, in an important case, refused to follow Lawes v. Bennett upon the ground that it does not rest upon a firm foundation. That learned court said: “The doctrine now most in accord with the general course of authority and principle is, that as between lessor and lessee, with the privilege to the latter to purchase, the conversion will be deemed to have taken place at the time of declaring the option and not from the date of the contract giving the option. * * We see no good reason why the doctrine of relation back to the date of the lease should be applied for the purpose of divesting the heirs who held the freehold title when the option was declared, and handing over the purchase money to the personal representatives. The descent to the heir was in the legal channel which the statute had marked out; and after executing the lease, the lessor did nothing to curtail the rights of the heir, upon whom the law would cast the real estate immediately upon the death of the ancestor. The estate having thus devolved, and the

The doctrine of equitable conversion rests on the presumed intention of the owner of the property and on the maxim that equity regards as done what ought to be done. The conversion usually becomes effective at the date of the instrument expressing the intention, if a deed or contract, and if a will, at the date of the testator’s death. This is the rule when an absolute and not a contingent conversion is intended. In the case before us no conversion was intended unless the option was exercised, and the conversion was contingent for it depended wholly upon a future event which might or might not happen. If it happened, there was a conversion, otherwise there was none and, hence, the date when the contingency was resolved becomes important. The lessor had the power to thus provide and in so providing, what was his intention as presumed from what he wrote, there being no other guide except the surrounding circumstances so far as they bear on his intention ? As he intended no conversion unless the contingent event happened, he is presumed to have intended none until that event happened, for that would be the natural date to have it take effect in order to avoid confusion if not disaster. Upon this theory the heirs would take the land and enjoy it as land, just as the heirs in this 'case have done, until the contingency became a certainty by the exercise of the option when they would take the purchase money instead of

This conclusion, however, does not settle the question whether service of notice upon the administratrix was sufficient in view of the express requirement of the lease that in case the lessee should exercise the option it should notify the lessor, but not necessarily in writing, “or his legal representative of its intent to do so.” The words “legal representative ” ordinarily mean the executor or administrator, although sometimes when required by the context and surrounding circumstances they are held to mean next of kin, but only under rare and peculiar facts, heirs at law. (Sulz v. Mutual Reserve Fund Life Assoc., 145 N. Y. 563 .) The words in question are presumed to mean executors or administrators, and, as Judge Peck-ham said in the case last cited, “ that meaning will be attributed to them in any instance unless there be facts existing which show that the words were not used in their ordinary sense, but to denote some other and different idea.” (p. 574.)

The appellants insist that the heirs were referred to because they only could execute the good and sufficient deed called for. The legal representative was not required to execute the deed but to deliver it or cause it to be delivered. The covenant in express terms bound

If, however, the lessor meant that notice should be given to his heirs instead of to his administratrix, still the requirement was met by notice to one of the adult heirs, the oldest and the managing heir as he may be called, and his refusal to act, which was tantamount to a refusal to convey. No “ good and sufficient deed ” could be given unless all the heirs united therein, and, hence, the refusal by one was the same as a refusal by all. (Blood v.

We find no error in the record and the judgment appealed from should, therefore, be affirmed, with costs.

Cullen, Ch. J., Gray, Haight, Hiscock, Chase and Collin, JJ., concur.

Judgment affirmed.