Hobson v. Hale

This action is brought to obtain a construction of certain provisions of the last will and testament of Ezekiel J. M. Hale who died at his residence in the State of Massachusetts, June 4, 1881, and whose said last will and testament was executed in that State. At the time of his death the testator was the owner of valuable real estate situated in the city of New York. The larger part of his estate was, however, in

The questions arising upon this appeal relate to the validity of the above twenty-second article of the testator’s will so far as it affects the testator’s real estate in this State. The appellants’ counsel claims that the testator, by implication, in this twenty-second clause of his will, directs his executors to sell his lands wherever situated, and to convert them • into money for the purpose of investment and distribution, and that thereby a case of equitable conversion is presented from the moment of the testator’s death. The correctness of this position must depend on the construction to be placed upon the language of the clause in question and the intention of the testator to be derived from the various provisions of the will. The will on its face contains no direction for the conversion of the real estate into personalty, and if such a construction can be placed upon the clause cited it must arise from implication only. There is no doubt of the correctness of the rule claimed by the appellants’ counsel, that equitable conversion may take place by implication as well as by express words. It is conceded that

The learned counsel for the appellants lays considerable stress upon some of the words employed by the testator in the twenty-second clause of his will, and insists that if properly interpreted they contain unmistakable evidence of his intention to convert his real estate into personalty. It is no doubt true, as is claimed, that the words, “ it is my will,” comprehend a plain and positive direction, and a command to carry into effect the purpose of the testator, and courts of equity cannot be too vigilant and astute in enforcing this imperative mandate in accordance with the directions given. The direction as to the residue and remainder of the testator’s estate, both real and personal, that it shall be and remain in the care and control of his executors well and safely invested, involves the inquiry whether the testator intended thereby to direct a sale and distribution of his real estate and an investment of the avails arising therefrom in personal securities. The language employed vests the executors with a power over the estate which shall be in their hands at any time. It does not direct any change in the character of the property or prescribe the nature

We are referred to several cases in regard to the effect of the use of the word “ invested ” upon the doctrine of an implied equitable conversion, but none of them, we think, .sustain the rule that such an implication can be upheld where the language employed, of itself, does not show a plain and clear intention to that effect and where the terms employed are not more specific, clear and palpable than the language cited from the testator’s will.

In Mower v. Orr (7 Hare, 473), which is specially relied upon, the will provided for a division of the testator’s estate into different parts and a disposition of the same in shares, two shares thereof to'be invested in government funds, in the name of his executors, for the use of the children of his daughter who is named, the interest to be appropriated among them, and the principal to be divided between them at the age of twenty-one years. In that case the vice-chancellor said “he was of opinion that the testator-must be understood as directing the conversion of his copyhold estate into personalty. The division of the entire property into a number of shares, and the direction contained in the will as to the investment and disposition of some of such shares, precluded the supposition that the testator intended the copyhold should remain unsold.” It will be noticed that here was a distinct direction that a portion of the estate should be invested for the benefit of the persons named and that the interest should be appropriated for their education and the principal to be divided among them at the time specified. These requirements could not be carried out without a sale of the copyhold estate, and hence it might well be implied that such was the intention of the testator. In the case at bar there is no direction as to the

In Cockson v. Reay (5 Beavan, 22), the testator directed that a sum of money be invested “ in land or some other securities ” for the benefit of one for life with remainder to his children, “ and in failure of these to A. and his heirs forever,” which money had not been invested in land, held to have originally been impressed with the character of real estate, but, by the subsequent dealings therewith by the parties beneficially interested, to have acquired the quality of personalty. It was also decided that the words “ other securities ” applied to an ad interim investment before a purchase of land could be procured. It will be seen that the question was whether the direction included both kinds of securities, and the court confined the final investment to the land alone. As the case turned upon the words used and the direction was distinct as to the land, it can hardly be regarded as involving a question of equitable conversion, nor is it analogous to a case where there are no explicit directions from which it may be implied that a conversion was intended.

- In Earlom v. Saunders (Ambler, 241), the testator directed £400 to be invested in the purchase of land or any other security as the trustee should think fit and convenient, to be settled as his last devise. The estate having passed to an infant who made a will, and the £400 not having been laid out as directed, it was held that it did not pass by the will as money and that the trustees had no right to consider it as money or land and the infant could not, and that the true construction was that it was to be invested in securities until lands could be purchased. We do not see that this case directly bears upon the question involved in the consideration of the words last cited from the clause of the will in controversy.

The case of Cowley v. Hartstonge (1 Dow. 361), was decided upon the intention of the testator as collected from the whole of the will, the terms of which are clearly different

In Hereford v. Ravenhill (5 Beavan, 55), the testator directed his trustees to invest his personal estate in freehold and other kinds of real estate upon certain trusts which were applicable to realty, and it was held that a conversion into real estate was intended. In that case there was a manifest intention to convert into realty, expressed in the will itself, while here the words we have considered do not 'import any such intention.

After a careful examination of the authorities relied upon we cannot resist the conclusion that none of them uphold the rule that the language in the clause of the will which has been cited and specially considered, authorizes the holding that an equitable conversion of the real estate into personalty was intended by the testator.

The use of the term “ accumulated interest ” in connection with the direction to divide may well be held to apply to an investment of personal property. All the residue and re-remainder is to be divided and it embraces real as well as personal estate. That no provision was made specifically in regard to the rents and profits, while it evinces a want of exactness in the draftsman, does not show that the intention existed to convert the real estate into personalty.

The words “ divided equally” are alike applicable to real and personal property and may very appropriately be used in reference to both.

In Burrell v. Baskerfield (11 Beav. 525), which is cited and relied upon by the appellants’ counsel as an authority for the division of both real and personal property as one fund, the testator by his will gave full power to his executors to collect and sell the real estate and convert his funded property into money and then to pay certain legacies and divide the whole of his property as directed, and the court held that the real estate ought to be considered as converted into personalty. It will be noticed that here was express authority and explicit directions as to the conversion of the

The direction that the estate shall be divided among the • testator’s grandchildren and be held by them “so distributed ” may be regarded as referring to the first part of the same clause of the will in which the distribution is made of the residue and remainder of both real and personal estate, and must be interpreted in connection therewith. The real estate as well as the personal is to be divided, and conceding that the power existed in the executors to sell, it could only be exercised at the time when distribution was to take place, as the will provided—at the death of the last life annuitant.

The duty of making the final division of the real estate with the remainder of the residuary estate among those who are entitled to share in it does not create or imply a power to sell and convert it into money even at that time, and in no event is there ground for claiming that by implication a prior power of sale can be raised for the purpose of a subsequent distribution by reason of the power to distribute at the end of the life of the last life annuitant. The conversion, even if directed, might be prevented by a beneficiary, entitled t share in the division, electing to hold the land as it is. (2 Story’s Eq. Jur., § 4793.) It is also an answer to the position contended for that, if the absolute power of alienation was suspended under the statute of this State for a longer period than two lives in being, as is claimed by the counsel for the respondents, an implied or express power of sale given to executors, to be exercised at any time in their discretion, does not cure the invalidity of the limitation. With no particular provision referring to a conversion of the real estate into personalty, or to any fund including the same, it would be a forced construction to hold that any portion of any of the language employed in the twenty-second article of the will contains a power which sanctions and upholds the interpretation contended for. The most that can be claimed for the language employed in this respect is that the phraseology was somewhat imperfect and not selected with that exactitude and nicety which might have been adopted.

So far our examination has been confined to the authorities cited by the appellants’ counsel, which bear generally upon the subject of a conversion of real estate into personalty by implication, and we are now brought to the consideration of the question discussed, having in view the law of this State and the authorities therein which bear upon the subject. While it

It is held in some of the reported cases that a positive direction to convert is required in order to authorize the application of the doctrine of the equitable conversion of real estate into personalty. (Fowler v. Depau, 26 Barb. 224 ; Harris v.

It is manifest that the design of the testator could not have been carried out in the case last cited without such a conversion, and in this respect the ease differs entirely from the one at bar.

In Lent v. Howard ( 89 N. Y. 169 ), the will of the testator, after giving various legacies, authorized the executors to sell the real estate, with the exception of the homestead farm, and to invest the balance of the estate in personal securities for the purpose therein named, and it was held that there was a conversion of the real estate named into personalty as of the time

In Gourley v. Campbell ( 66 N. Y. 169 ), cited by the respondents, the testator, by his will, directed his executors, after closing up his business and the payment of his debts, to place the proceeds of his estate and “all my property, both rpal and personal, at interest on bond and mortgage or otherwise, as in their judgment they may deem best, and the proceeds, rent, income or interest shall be employed and used for the support and maintenance ” of his wife and children and the education of the children. He then directed the payment of certain legacies to his children, as provided, and finally gave all his estate, “ both real and personal,” to be equally divided between them, share and share alike, on the death of their mother. It was held that an intent to convert absolutely the real estate into money did not appear and no such conversion was made by the will. In that case it will be seen that the proceeds of the estate were to be placed at interest, and it was evident that the testator designed his family should receive the benefit of the income arising from such proceeds, but there was no explicit direction to convert the real estate into money, nor was there any power to sell and convey the same for that purpose. The case bears some analogy to the case at bar, and the decision is placed in part upon the ground of a want of explicit directions showing the intention, and that there was no express power to sell, and that it was only by implication that a power to sell could be upheld; also that the provisions were too in

Looking at this clause of the will, in its various parts, we think it is evident that the testator intended that the estate, real and personal, should be and remain in the hands of the executors, to be disposed of as stated, and that no design existed, at the time of its execution, that his real estate was to be converted into money and distributed as such under the provision cited. There is nothing on the face of the will which indicates that the corpus of this large estate was to be converted into money and reinvested until the time of final division after the death of the life annuitants and the payment of the legacies and then again reconverted into money for the purpose of distribution. It would be difficult to arrive at such a conclusion in view of the fact that many years were to elapse before a division could be had, and that a considerable portion of the estate was well invested in real property in this State, and a failure of the testator in his will to indicate any desire that such real estate which, there is reason to suppose was extremely produc tive, should be disposed of and the proceeds reinvested without any restriction whatever as to the character or nature of the reinvestment to be made. Surely no snch intention can be inferred from the language employed or from flic circumstances surrounding the testator at the time of the execution of his will. It may be added that it is by no means apparent that, if the real estate could be sold, there .is any provision in the clause cited which would prevent or interfere with a reinvestment again in real estate of the proceeds for the purpose of holding the same until a final division. While the will should be sup

Even conceding that there was an implied power of sale contained in the will this would not render the provision of the will we are considering valid, so far as it affects the real estate in this State, because the absolute power of alienation, as will be hereinafter shown, was suspended beyond the time limited by theBevised Statutes. This question was distinctly presented in the case of Brewer v. Brewer ( 11 Hun, 147 ), where it was held that a trust which would be otherwise void as suspending the power of alienation for more than two lives in being, is not made valid because of there being given to the trustees power to sell the trust property, the proceeds of such sale remaining subject to the execution of the trust. It is urged that a distinction exists between this case and the one at bar which renders the former inapplicable here. We do not perceive any such difference as would authorize the conclusion that the ease cited is to be disregarded as not in point. This decision was affirmed upon appeal to this court in 72 N. Y. 603 , and we think it may be regarded as a precise adjudication of the question considered. The testator there was a resident and domiciled in the State of Massachusetts, and by the residuary clause in his will, which included real estate in the State of Hew York, made provision for the application of the income during- the lives of three persons, for the use of certain persons therein named. At the death of the last survivor of the three, who might be living at his death, he directed a division. The will contains an express and complete power of sale to the trustee as to all the lands constituting the residue, and the proceeds of the sale were to be held upon the trusts established by the will. Conceding that there was no equitable conversion, as there was a power of sale which authorized such a conversion, the distinct question was presented whether -the statute suspending the power of alienation was suspended, the same as if there was an

There being no conversion of. the real estate into personalty, we are brought to the consideration of the question whether the twenty-second section of the will is valid. It is claimed that the devise, by this clause, of the real estate situate in the State of Hew York is void by reason of the illegal suspension of the power of alienation under the Revised Statutes (1 R. S. 723, §§ 14,15). We think that under these provisions the devise, by the twenty-second section of the will, of real estate situate in New York was void for the reason that it illegally suspended the power of alienation beyond the period fixed bylaw. Under the construction given to these , provisions by the adjudications of the courts of this State it is difficult to see how it can be maintained that the power of alienation was not suspended in violation of the provisions of ■ the statute cited. By the twenty-second clause of the will a future estate is created within the provisions of section 10 of 1 Revised Statutes, 722, which is limited to commence at a future day after the termination of the twelve lives which are named by the testator in his will. Until the death of all these , persons no estate becomes vested in the devisees, and they are not entitled to the enjoyment of the same until that event’ has occurred. The right to the estate being thus held in abeyance during this period, and no estate being vested in any person by which authority was conferred to dispose of the same, it is . very obvious that the power of alienation was suspended during the existence of the twelve lives named. No absolute fee could be conveyed until the death of the last life annuitant. As already shown, the executors have no authority for that purpose, and it is only upon the decease of the last surviving

In the discussion involved as to the construction to be placed upon the twenty-second clause of the will, we have taken into consideration the fact that, by the statutes of the State of Massachusetts, perpetuities are allowed, and that there was no suspension of the absolute power of alienation under the laws of that State.

It is insisted by the appellants’ counsel that the legacies and annuities in the will do not suspend the power of alienation, . and that at most they are but a charge upon the land in jthe nature of a lien, and that the land may be sold subject to

It will also be observed that the real point involved in this controversy is that a future estate does not arise until the determination of the period to be settled by the duration of the life of the last of the twelve annuitants. It is not the annuities which interfere with and prevent the vesting of a future estate but the lives of the annuitants. It depends and rests entirely upon these lives, and when the last of them ceases to exist the estate receives life and vitality and springs into existence.

A further point is made to the effect that the twenty-second section does not suspend the power of alienation except as to accumulations, and that these, so far as they are unlawful, are to be rejected and have no effect upon the validity of the gift of the residue to the grandchildren. Under this point it is claimed that the estate became vested in the living grandchildren at the moment of the testator’s death exclusive of any who may be subsequently born. The determination of this question must depend upon the intention of the testator and the

The interpretation we have given is sustained by the decisions of the courts in this State in very recent cases strikingly analogous. In Colton v. Fox ( 67 N. Y. 348 ) the testator devised the residue of his estate in trust to his executors to pay the income and profits to two brothers and sisters during their lives, and after their several deaths to divide the said residuary estate equally among their children. The provision closed thus : “ In case either of my said brothers or sisters shall die, leaving the others surviving, then the income herein intended for the one or the other so dying shall be paid to the issue or the representative of the one or the other so dying.” The question was there distinctly presented whether the estate became vested upon the death of the testator, and Chuboh, Cli. J., cites the rule laid down by Denio, J., in Everitt v. Everitt ( 29 N. Y. 40 ) to the effect that “ the leading in'” ' upon which the question of vesting turns is, whether the is immediate and the time of payment or en joyment only p poned, or is future and contingent, depending upon the be. ficiary arriving of age, or surviving some other person or tin

In Warner v. Durant ( 76 N. Y. 136 ) Folgek, J., states the rule applicable to this case as follows : “ When the only gift is in the direction to pay or distribute at a future time, the case is not to be ranked with those in which the payment or distribution only is deferred, but is one in which time is of the essence of the gift.”

In Smith, v. Edwards ( 88 N. Y. 92 ) the testator directed that $30,000 be kept invested by his executors until his youngest grandchild now born or that may hereafter be born before the final distribution of his estate should be of age. He made various directions as to the distribution of the interest and net income, and authorized the executors to divide and distribute $10,000 of the principal, if they saw fit, between four children and grandchildren named, and also thereafter from time to time to make division and distribution of their interests and incomes between the beneficiaries named; he also directed that in case of the death of either before payment, leaving issue, that his or her share should go to his or her children; if without issue, then to the surviving brothers and sisters. When his youngest grandchild born, and that may within twenty years be born, shall arrive at full age, or if a granddaughter sooner married, he directed a division of the remaining $20,000 into two equal parts, one to be divided equally between his four children and the other between the grandchildren then living, including those born after his death, with a similar provision, in case of a legatee’s death, as was attached to the $10,000. It was claimed that the legacies became vested upon the death of the testator, and this question was distinctly presented. Finch, J., after stating that it has been often held that if futurity is annexed to the substance of the gift, the vesting is suspended ; but where the gift is absolute and the time of payment only is postponed, the gift is not suspended but vests at once, and referring to the rule laid down as to time, in Warner v. Durant ( 76 N. Y. 136 ) and the cases

The appellants’ counsel cites numerous authorities, mostly cases from the British reports, to sustain the position that the estate vested at the time of the testator’s death. We have given due attention to these authorities, and while the cases cited may, we think, be distinguished from the case at bar, none of them hold that, when the intention is manifest that the vesting of the estate shall not take place until the expiration of the life or lives upon which it is limited, it becomes vested prior to that period. Even if any of them may be regarded as sustaining the doctrine contended for, they are adverse to the rule laid down in this State, and established in the cases last cited, and to the weight of authority, and they cannot be followed without overruling the decisions which have been cited and discussed.

Some cases are also cited by the appellants’ counsel from the courts of this State in reference to the effect to be given to the use of particular words employed. (Livingston v. Greene, 52 N. Y. 118 ; Embury v. Sheldon, 68 id. 227 ; McKinstry v. Sanders, 2 Sup. Ct. T. & C. 181.) We do not discover any thing in these decisions which is adverse to the views already expressed.

There is another ground upon which the twenty-second clause of the will must be held to be inoperative and void, and that is that it is repugnant to the provisions of the Bevised Statutes

It follows, from the discussion had, that the final result must be that the devise of real estate in the State of Hew York was void, and that the heirs-at-law of the testator, by reason thereof, were seized in fee of the same and entitled to the rents and profits which have been received by the executors.

Other questions are raised by the appellants’ counsel, but the conclusion arrived at renders it unnecessary to consider them.

The judgment appealed from should be affirmed, with costs of all the parties to be paid out of the estate.

All concur, except Eabl, J., not voting.

Judgment affirmed.