Greenland v. Waddell — 26 N.Y. St. Rep. 667

Majority

p. 667

Thomas E. Greenland, App’lt., v. John A. Waddell and Richard Major, Resp’ts.^[1]

(Court of Appeals, Second Division,

Filed October 8, 1889.)

Headnote

1. Will — Equitable conveesion — Title to heal estate.

Defendant refused to accept title of real estate on the ground that the executor and also the trustee of a former owner of one-third had not joined

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in the deed. Said owner had devised her entire estate to executors, with power to receive the rents and profits; and to sell the real estate and divide the proceeds. One executor died, and the other resigned in due form, and one Mrs B., an heir, was appointed trustee under the will in, his place, and she deeded the premises to plaintiff individually and as trustee. JZeld, that the will was productive of equitable conversion, that the executors took the real estate with power of sale, though no title passed to them of the land as such, hut that the power to make the sale and conveyance remained in the executor, and that Mrs. B. did not through her appointment as trustee take such power.

3. Same.

But that the direction of the testatrix, giving the income of one-third to Mrs. B. while she remained the wife of her then husband, and if she survived him to take the corpus of the fund,- if not, to go to her lawful issue living until they came of age, otherwise to two others named, was in contravention of the statute and void, and as a consequence that the brother and sister of Mrs. B. were the only heirs, and they having conveyed their interest to Mrs. B., defendant cannot refuse her individual deed.

Appeal from an order of the general term of the city court of Brooklyn, reversing-judgment entered upon decision of the court in favor of the plaintiff, and granting a new trial.

The action was brought to recover a certified bank check representing the balance alleged to be due of the purchase price of real estate sold and conveyed in March, 1885, by the plaintiff to the defendant Waddell, which bank check the latter had deposited with the defendant, Major. It appears that, at the time of the delivery of the deed to the defendant Waddell, he paid all the purchase money except $1,000, for which amount he delivered his check to Major pursuant to an understanding with plaintiff that it be held until the title was examined, and if found to be “such as a party could be compelled to accept under a contract assuring a title in fee ’’ then the check should be delivered to the plaintiff. After examination, the defendant Waddell notified the plaintiff that the deed did not convey a good title to one-third of the premises, and thereupon tendered reconveyance to the plaintiff and demanded -repayment of the money he had paid. This was refused, and' the action was thereafter commenced. The title to the one-third in question was in Agnes Boerum, who died in the year 1875, leaving a will, which was admitted to probate and recorded. By it she appointed her brother, Fulkert B. Boerum, and Charles H. Vanderveer executors, to whom letters testamentary were issued. So far as essential for reference here, her will was as follows : “ After all my lawful debts are paid and discharged, I give and bequeath and devise unto my executors * * * and the survivor of them, all and singular my estate and property real and personal * * * to have and to hold the same in trust to rqceive and collect the rents, issues and profits, interest and income thereof, and as soon after my decease as in their judgment they shall deem expedient and for the best interest of my estate to sell, assign,-transfer, dispose of the same either at public or private sale * * * and to divide, pay and distribute the proceeds thereof together with the whole of my estate as follows :

To my sister, Susan Vanderveer, wife of Charles' H. Vanderveer, one equal third part thereof; to my brother, Fulkert B. Boerum,- one équal third, part thereof. The remaining one equal

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third part thereof I hereby order and direct my said executors safely and securely to invest and reinvest from time to time in their discretion, upon such security and in such manner as they shall deem advisable and proper, to receive and collect the interest or income thereof, and as the same shall by them be so collected, to pay the same to my sister, Adrianna Bush, wife of Charles Bush, for and during the joint lives of her and her husband, * * * and in case my said sister, Adrianna Bush, shall die before her said husband leaving lawful issue her surviving, then my executor shall, from and after such death, pay such interest or income thereof or such portion of such interest or income as may be necessary towards the support, maintenance and education of the child or children of my said sister Adrianna Bush until the youngest child shall arrive at the age of twenty-one years, and, on said youngest child arriving at such age, my said executors shall pay and transfer to the child or children that shall then be living the whole of said remaining one-third with its accumulations, and on the death of all said children before arriving at such age, or on the death of my said sister Adrianna without leaving lawful issue her surviving, my executors shall pay the remaining one third with its accumulations to my brother Fulkert R. Boerum and my sister Susan Vanderveer, to be divided equally between them share and share alike, and in case my said sister Adrianna Bush shall survive her husband Charles Bush, then on the death of her said husband the said remaining one-third with its accumulations shall be paid and transferred to my said sister Adrianna Bush absolutely in preference to any other disposition thereof.”

In 1883 the executor, Vanderveer, died leaving Boerum the sole surviving executor. In February, 1884, Fulkert R. Boerum and Susan Vanderveer conveyed all their interest in the premises in question to Mrs. Bush. And shortly thereafter, upon the petition of Boerum and with the consent of Mrs. Bush and Mrs. Vanderveer, an order was made by the supreme court accepting the resignation of Boerum, as trustee of such will, and discharging him accordingly, and from all obligation to account further, etc. And by the same order Mrs. Bush was appointed trustee under the will and directed to file security, etc. Shortly afterwards Mrs. Bush, as trustee, made to one Joslyn a deed of the premises, which he thereupon reconveyed to her. And she individually made deed ■of conveyance to the plaintiff. This was the evidence of the title claimed by plaintiff to the one-tliird in question at the time of the commencement of the action to have been conveyed to the defendant, but before final judgment a further deed was made by Mrs. Bush as such trustee to the plaintiff, which was treated as effectual for purposes of the action as if made before its commencement. The judgment directed by the trial court for the plaintiff was reversed, and new trial granted, by the general term.

Jesse Johnson, for app’lt; A. B. Carrington, for resp’ts.

The question is, whether or not the deed of conveyance made by the plaintiff to the defendant Waddell, was effectual to convey a perfect title to the one-third of the premises

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of which Agnes Boerum died seized. And that depends upon the result of the inquiry whether the deeds of Mrs. Bush, individually, and as trustee of the will of Agnes Boerum, to plaintiff, conveyed such title to him.

The "will was productive of an equitable conversion of the real estate of the testatrix into personalty; and, for the purpose of the execution of the trusts created by the will, it must be so treated. Kane v. Gott, 24 Wend., 641 ; Stagg v. Jackson, 1 N. Y., 206 ; Everitt v. Everitt, 29 id., 39.

By the terms of the will the entire estate of the testatrix was devised and bequeathed -to the executors, and they were given the power of sale for the purpose of distributing the proceeds as directed, that is to say, two-thirds of the amount to be paid to two distributees, and the income of the other third to Mrs. Bush while she remained the wife of her then husband. If she survived him, she was to take the corpus of the fund; and, if she did not, it was to go to her lawful issue, if she left any surviving her, who reached the age of twenty-one years; otherwise it should go to her brother, Mr. Boerum, and her sister, Mrs. Yanderveer.

The executors took no title to the real estate as such. They were vested with a power to deal with it as personal estate for the purposes of the execution of trusts created by the will. And one question presented is whether the power of sale came within the duty of a trustee, as distinguished from that of an executor. The question as to where is located the line between the duties which fall upon an executor, and may be discharged by an administrator with the will annexed, and the power which must be executed by a trustee, has been involved in some uncertainty in view of the apparent want of harmony in judicial opinion upon the subject. The theory upon which the distinction seems to have been founded is, that the duties of an executor pertain to the office, and those of a trustee to the person; that the character given to a trustee has relation to a personal trust, while that of an executor is official solely. Hence it has in the more recent case of Mott v. Ackerman, 92 N. Y., 553 , been said by Judge Finch, in speaking for the court, that " where the power granted or duty involved imply a personal confidence reposed in the individual over, above and beyond that which is ordinarily implied in the selection of an executor, * * * the power and dirty are not those of executors virtute officii, and do not pass to the administrator with the will annexed.” And when a discretionary power of sale is given to executors, or when in the sense as applied to trusts, the duties imposed are active, the executors will be deemed trustees, and such powers cannot be executed by an administrator with the will annexed. Cooke v. Platt, 98 N. Y., 35 ; Ward v. Ward, 105 id., 68 ; 6 N. Y. State Rep., 798.

In the present case the real estate of which the testatrix died seized became, by virtue of the direction in her will to sell for the purposes there mentioned, personalty as of the time of her death upon the principle applicable to such case, that what is directed to be done by the will may be regarded as done at the time directed. The doctrine of equitable conversion rests upon that principle.

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Pomeroy Eq. Jur., § 161. The power to receive the rents and profits of the land intermediate the death of the testatrix and the sale did not qualify the character as personalty of the land in the hands of the executors. That is incidental to the direction to sell, and the rents and profits so received also have the character of personalty, and are assets in the hands of the executor. Stagg v. Jackson, I N. Y., 206; Lent v. Howard, 89 N. Y., 169 . The title to the personalty vested in the executors by operation of law, and to accomplish the purposes of the imperative direction in the will in that respect it was within their power and imposed upon them as a duty, by virtue of their office, to execute the power of sale. Lockman v. Reilly, 95 N. Y., 64 ; Meakings v. Cromwell, 5 id., 136 ; Bogert v. Hertell, 4 Hill, 492 . As the consequence of this, the proceeds of the sale, when received by the executors, would be legal assets in their hands, for which they would Be required to account. Hood v. Hood, 85 N. Y., 561 . And if any duties were to follow in respect to one-third of the fund, which would require the function of a trustee to execute, the executors, as such, would remain responsible for it until the severance in some manner by them of the trust fund. In re Hood, 98 N. Y., 363 .

We have proceeded far enough to show the relation of the executors, as such, to the powers given by the will sufficiently for the purpose of the question here. And it is unnecessary to consider the nature of the duties which would be assumed after the sale, in the management of the fund, the income of which they were directed to pay Mrs. Bush.

The power of sale was vested in the executors; and in view of the later authority giving construction to the statute in that respect, 2 R S., 72, § 22, that power of sale would be taken by an administrator with the will annexed. Mott v. Ackerman, 92 N. Y., 539 . It is, however, contended by the plaintiff’s counsel that notwithstanding the correctness of the proposition just stated, the power given to sell created a trust for that purpose, and, as such, came within the jurisdiction of the supreme court, and therefore the acceptance of the resignation of Boerum as trustee, and the appointment of Mrs. Bush as such by the court pursuant to the statute, was effectual to vest in the latter the power to make the sale. 1 R. S., 730, §§ 69, 70, 71. There is no doubt about the power of the court to provide the means for the execution of a trust when there ceases to be a trustee to complete it. The statute provides that in case of death of a trustee of an unexecuted express trust, the trust shall vest in the court of chancery (now in the supreme court) with all the powers and duties of the original trustee, and shall be executed by some person appointed for the purpose under the direction of the court. Id., § 68. And that provision is applicable to powers in trust. Id., 734, § 102. It is said by text and judicial writers, to the effect that the court of equity will not permit a trust to fail Mr want of a trustee to execute it. This means that the power of appointment of a trustee will be exercised by the court when occasion properly arises requiring it. Such were the cases of Leggett v. Hunter, 19 N. Y., 445 ; Delaney v. McCormack, 88 id., 174; Farrar v. McCue, 89 id.,

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139; Cooke v. Platt, 98 id., 35; Rogers v. Rogers, 111 id., 228; 19 N. Y. State Rep., 94. And they are cited by counsel to support the contention that the trustee appointed by the court in the present case was vested with the power to make the sale and conveyance in question. It may be observed that those cases presented i express trusts and powers in trusts within the Revised Statutes, and therefore came within the statute before referred to providing for the appointment of trustees- to execute such trusts, and the appointments were essential for the execution of the trusts. The power of sale given by the will in question is not within the statutory term of express trusts, and no title passed to the executor of the land, as such; and “a general power is in trust when any person or class of persons other than the grantee of such power is designated as entitled to the proceeds or any portion of the proceeds or other benefits to result from the execution of the power.” 1 R. S., 734, § 94.

The statute upon the subject of trusts is not applicable to that created by this will, although analogous principles, to some extent at least, are applied to those of personal property. Kane v. Gott, 24 Wend., 641 ; Cutting v. Cutting, 86 N. Y., 545 . It may be assumed that the power is inherent in the supreme court, without, the aid of the statute, to administer trusts, in so far that it may, upon the death or disability of a trustee of an unexecuted trust, appoint another to execute it; and for adequate cause may remove a trustee and supply his place with another to complete the execution of a trust. This proposition is not applicable to an executor so far as relates to the duties of his office, as such. As applied to‘ him the power is exclusively in the probate court.

The acceptance of the resignation, as trustee, of the person named as executor in the will did not therefore have the effect to relieve him from the execution, so far as it remains unexecuted, of the trust which was devolved upon him by virtue of the office of executor. 1 Perry on Trusts, § 281; In re Van Wych, 1 Barb. Ch., 565 ; Quackenboss v. Southwick, 41 N. Y., 117 . While his relation as trustee, as distinguished from that of executor, may be treated as terminated by force of the order of the court, that of executor remained. And as held in Mott v. Ackerman, supra, the power to make the sale being within the functions of the office of the executor, there is no occasion to extend the inquiry whether it would be in the jurisdiction of the supreme court to appoint a trustee to execute such a trust or power as that in question, in the event of a vacancy in the office of executor, or whether the power must in such case necessarily be executed by an administrator with the will annexed. While the executor remains in his relation as such, the court cannot appoint a trustee to supersede him in the exercise of his functions as executor. It cannot be assumed upon the findings of the trial court that all the duties of that officer had been discharged by him at the time his resignation of trustee was accepted by the court.

The conclusion must follow that the power to make the sale and conveyance remained in the executor, and that Mrs. Bush did not through her appointment as trustee take such power. This was

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tlie ground upon wldcli the general term placed its determination, and, so far as appears, the inquiry there was not extended further than that.

There is a further question having relation to the validity of the-provisions of the will, by which the testatrix sought to give the fund to the children of Mrs. Bush, if she left any surviving her, and in the event there mentioned. This question arises upon the statute which provides that “ the absolute ownership of personal property shall not be suspended by any limitation or condition whatever, for a longer period than during the continuance and until the termination of not more than two lives in being at the,date of the instrument containing such limitation or condition; or if such instrument be a will, for not more than two lives in being at the death of the testator.” 1 R. S., 773, § 1. At the time of the death of the testatrix, Mrs. Bush had no children living, and she never has had any. But assuming that she does not survive her husband, and that on her death she leaves children surviving her, under the age of twenty-one years, the inquiry arises whether the limitation over to them is valid, and that depends upon the determination of the further question whether the absolute ownership would then vest in such children. If it would, there would be no unlawful suspension. Otherwise it is difficult to see how the provision made for them by the will can be supported. The-will does not in terms give the fund to the children, but directs, the executors in the events mentioned to pay it to them. The postponement of the time of payment of a gift is not important r that alone will not qualify the absolute character of the ownership. The vesting of it is suspended if some period in the future is annexed to the substance of the gift. In the present case the conditions upon- which the right of the children to take the fund depend are to or may arise in the future, beyond the time of the-death of the mother, and the contingency is uncertain. The children must reach the age of twenty-one years, and if they do not, the fact that the direction is that the fund go to Mrs. Boerum and Mrs. Vanderveer is not consistent with the vesting of the absolute ownership in the children on the death of their mother.

It is, therefore, clear that in the case supposed, and which may arise, if Mrs. Bush should leave children her surviving, the observance of the direction of the will will operate to suspend the absolute ownership of the fund for some period of time after her death. Batsford v. Kebbell, 3 Ves., 363; Patterson v. Ellis' Ex'rs, 11 Wend., 259 ; Warner v. Durant, 76 N. Y., 133 ; Delaney v. McCormack, 88 id., 174 . 183. Such suspension being for a time not dependent upon lives, and not more than two in being at the time of the death of the testatrix, renders the limitation over void, unless it is saved by some provision of the statute. We find none in its- support. While the suspension of the absolute power of alienation of real estate may be extended beyond two lives limited, so as to embrace the period of minority of a child to whom the remainder is limited, and such suspension may be created by a contingent limitation of the fee, 1 R. S., 723, §§ 15, 16; id., 726, § 37, our attention is

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called to no statute qualifying in that or any manner the effect of the provision before referred to limiting the time of suspension of the absolute ownership of personal property. The consequence seems to be, that the direction of the testatrix, by her will, to pay the fund to such children in the event mentioned, or on their failure to arrive at the age of majority to pay it to Mr. Boerum and Mrs. Yanderveer, was in contravention of the statute and void. Manice v. Manice, 43 N. Y., 303 . It follows that if Mrs. Bush does not survive her husband, the testatrix will have died intestate as to that fund, or in case the power of sale is not exercised by sale of the land during her life the intestacy may be applicable to it as real estate ; and such property either as land or personalty will, unless given other direction in the meantime by those having a contingent interest in it, go to the heirs or next of kin of the testatrix, those who were such at the time of the death of the testatrix, and not to those who will be such at the time the contingency occurs which produces the intestacy. 1 R. S., 751; 2 id., 96; Hoes v. Van Hoesen, 1 Barb. Ch., 379 ; In re Kane, 2 id., 375.

Such issue of Mrs. Bush, if she should leave any her surviving, will, therefore, have no interest in this fund or property derived from the provisions of the will; and in the event she does not survive her husband her interest is limited to a life estate, or to the income of the fund during her life.

As a consequence then, and in that case her brother and sister will be the only heirs and next of kin of the testatrix. They have conveyed and transferred then unconditional and contingent interest in the property to her. By that conveyance Mrs. Bush acquired the entire beneficial interest in the property. This enabled her individually to convey it to the plaintiff. Her deed to the plaintiff had the effect to vest in him the title to the land. Since all the parties having any beneficial interest in it, or its proceeds, have thus joined in and made the conveyance, there remains no occasion for the exercise of the power of sale given by the will; and upon the principle that the beneficiaries in the equitable conversion of real property into personalty may effectually elect to have a reconversion into realty, and take it as land, rather than the proceeds of it, we think the exercise of such power of sale may be deemed dispensed with and defeated. Story Eq. Jur., § 793; Hetzel v. Barber, 69 N. Y., 1 ; Prentice v. Janssen, 79 id., 478; Armstrong v. McKelvey, 104 id., 179; 5 N. Y. State Rep., 611.

In this case the beneficiaries are in a situation to do so, as the title of the property, treating it as land, was in those three, brother and two sisters, or some of them, and was nowhere else. There is, therefore, no intervening right of any other party to be prejudiced. The contingent and unconditional estates were united in Mrs. Bush by the conveyance to her.

These views lead to the conclusion that the defendant has taken by the conveyance to him the title which the plaintiff undertook to convey. But as the determination is made upon a ground not presented to or considered by the court below, the plaintiff should not have costs.

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The order of the general term should he reversed, and the judgment entered upon the decision of the trial court affirmed.

All concur.