Case Name: In the Matter of the Judicial Settlement of the Estate of Thomas Champion, Deceased
Court: New York Surrogate's Court
Jurisdiction: New York
Decision Date: 1890-12-20
Citations: 39 N.Y. St. Rep. 400
Docket Number: 
Parties: In the Matter of the Judicial Settlement of the Estate of Thomas Champion, Deceased.
Judges: 
Reporter: New York State Reporter
Volume: 39
Pages: 400–402

Head Matter:
In the Matter of the Judicial Settlement of the Estate of Thomas Champion, Deceased.
(Surrogate’s Court, Orange County,
Filed December 20, 1890.)
I. Will—Construction—Devise.
Testator died in 1889, his widow in 1890, and McO., legatee, in 1888. By the will the widow is given the use oí part, and the rents of the rest of the store, for her life, and then it reads: I give to D. the first refusal to rent my store at $30 per month during my wife’s life, and upon her death D. to have first opportunity to purchase said store at such an amount as will pay the mortgage on it, and legacies of $1,000 to McC., $300 to S., $500 to C. and $300 to K. In case D. should not elect to buy said store, my executor is to sell the same, and out of the proceeds pay the mortgage and legacies, and pay over the balance together with all residuary as follows: $1,000 to D., and divide the balance equally among McC., 8., C. and K. Held, that the provision that D. may purchase the property is not a devise to him of the land charged with the various sums to be paid from the proceeds of the sale, and therefore he is not entitled to the lapsed legacy of McC., but that lapsed legacies should pass under the provision relating to the “residuary,” under which D. would take $1,000, if there shall be sufficient remaining upon that settlement.
S. Same—Interest on legacies.
Under such will, if D. concludes to purchase the store, the sale to him must relate back to the death of the widow, and he will therefore be entitled to the rents and use from that time and ^should pay interest on the legacies from the same time.
Thomas Champion, the testator, died August 21, 1889, his widow died in July, 1890, and Mary McCutcheon, the legatee, died October 13, 1888.
By the will the widow was given the use of part, and the rents of the rest, of the store building during her life; the will then reads:
“ Third. I give to John Donohue the first refusal to rent my said store, No. 120 Broadway, at thirty dollars per month during the life time of my wife and upon her death the said John Donohue is to have the first opportunity to purchase my said real estate * * * from my executor at such an amount as will pay the mortgage now existing thereon and the following legacies, viz. : $1,000 to Mary McCutcheon, wife of David McCutcheon $300 to Susan Dolan ; $500 to Richard Champion and $300 to Katie Dowd. But in case said John Donohue should not elect to buy said property on said terms or live to buy the same after the death of my wife, then my executor * * * is hereby empowered * * * to sell said property at public sale * * * and out of the proceeds pay the mortgage and legacies aforesaid and pay over and dispose of the balance together with all residuary as follows: to John Donohue the sum of $1,000, and divide the balance equally among Mary McCutcheon, Susan Dolan, Richard Champion and Katie Dowd, to whom I hereby bequeath the same.
L. S. Sterrit, for exe’r; W. D. Dickey, for John Donohue; N. J. Fowler, for representatives of Mary McCutcheon, deceased.

Opinion:
Coleman, S.
—Mary McCutcheon having died before the testator, and not being " a child or other descendant," the legacy of $1,000 to her lapsed. Van Beuren v. Dash, 30 N. Y., 393; Matter of Wells, 113 id., 396; 22 N. Y. State Rep., 717.
This being so, it is claimed on behalf of John Donohue, that under the will his relation to the property is that of a devisee and that the legacy to Mary McCutcheon, having lapsed, sinks into the land to his benefit.
. The provision that John Donohue may purchase the property is not a devise to him of the land charged with the various sums to be paid from the proceeds of the sale but is simply a beneficial right or privilege, which he can only receive by becoming a purchaser upon the terms prescribed by the will. By the will he is given the "first opportunity " to purchase the property " from my executors at such amount as will pay " the mortgage and legacies.
In order to become the owner of the property he must take a deed for it from the executors and his title to the property will be by the deed and not by the will. As purchaser he has no connection with the disposition of the proceeds of the sale. For these reasons I do not think he takes under the will a beneficial gift of the property charged with the payment of the mortgage and legacies mentioned; if it were so then he would be entitled to the lapsed legacy to Mary McCutcheon. Matter of Smith, 33 N. Y. State Rep., 586. I therefore conclude that if he wishes to purchase the property the consideration will be the amount of the mortgage plus the total of the amounts of the four legacies. 1 am however, of the opinion that John Donohue is entitled to receive this $1,000 as a residuary legatee, if there shall be that amount in the residue upon this settlement
The testator directs a sale to be made of this property; first, to Donohue, if he wants it; if not, then at public sale. A direction to sell real estate does not always- operate as a conversion into personalty, as the expression is "out and out;"as where it is done to effect a gift of personalty where the gift of realty would have been void, Arnold v. Chapman, 1 Ves. Sr., 108, or where it is directed to be sold to produce a fund out of which to pay certain legacies, some of which lapsing, or failing for any cause, thereby, to that extent, disappointing the purpose of the will. Cruse v. Banson, 3 P. Wm., 20; Gravenor v. Hallum, 1 Amb. R., 643.
However, when the sale is made for the general purposes of the will, the residue included, the direction to sell operates as a conversion into personalty. Durour v. Motteux, 1 Ves. Sr., 320; Moncrief v. Ross, 50 N. Y., 431. I think it is fairly clear that such was the intention of the testator and that lapsed legacies, if any, should pass under the provision relating to the "residuary." For the following reasons, this property constituted substantially the whole of the testator's estate. Any residuary estate he would have must come in some way from this property. He clearly intended to give Donohue something more than the mere right to become the owner of the property. First he was given the use of the store at a rental which the testator -evidently considered favorable; next, at the death of the testator's widow, lie was given the'privilege of buying on terms also evidently considered'favorable, and finally, if he did hot buy either because he was too young or did not wish 'to, then, after the payment of the mortgage and the legacies mentioned, he was to receive $1,000, to be paid from what was left of the proceeds of the-sale, tl together with all residuary." If anything was still left it-was to be equally divided among the persons mentioned. Donohue's right to this $1,000 does not necessarily depend upon a sale: had in consequence of his refusal to buy, for by the terms of the-will it could not only be paid from the balance of the proceeds of such a sale, but from " all residuary." In other words, the testator evidently at this point in his will intended to dispose not only of the proceeds of that sale but also to make a complete and final disposition of the residue of his estate, whatever it might consist of.
As to the time from which the legacies to be paid from the sale-of the real estate draw interest, no time for their payment is expressed in the will. From the connection in which they are mentioned it is evident the testator did not intend they should be paid until after the death of his wife and after the sale of the property. Donohue has a reasonable time within which to determine whether he will purchase the property. If he concludes to buy, then the sale to him must relate back to the death of the widow, for there is no other disposition of the property in the meantime. He will, therefore, be entitled to the rents and use from that time, and should pay interest on the legacies from the same time.