Court Opinion

ID: 5667933
Source: CourtListenerOpinion
Date Created: 2022-01-12 13:50:29.98654+00
Date Added: 2024-06-11T08:39:30.386972
License: Public Domain

The Surrogate.
At first, I was inclined to think that the legacies, appointed to be paid by the will of Julia Storm, became due only at the time of the final conversion of the real estate, remaining unsold at the time of her death, and that interest was recoverable only from that time ; but on reflection I have come to the conclusion that they became due at her death. The common law rule was that legacies, directly given out of the testator’s own estate, were due one year after the death of the testator; and such is still the rule, the time of payment, only, being changed by our statute (2 H. ¡S., 90, § 43). That statute and the common law rule, I think, are inapplicable to the case of a legacy given by the execution of a power of appointment. The legacy in question vested, and became due and payable, on the death of the donee of the executed power. It seems to me that it is very much the same as if the will of Abraham Storm had be*422queathed the use of $5,000 to his widow for life, with remainder to the Dixons. On her death it would, in that case, have been due and payable to them at once, and the fact, that it might have been necessary to convert real estate, in order to obtain means of payment, I think, can make no difference. The most of the real estate had been converted at the time of the widow’s death, and a large portion of the estate consisted of bonds and mortgages. Having determined that, ordinarily, a legacy given by appointment is due and payable at the death of the person exercising the power, I think it still due and payable then, although all of the real estate had not then been sold (Wood v. Penoyre, 13 Ves., 326 ; Sitwell v. Bernard, 6 Id., 539 ; Wheeler v. Ruthven, 74 N. Y., 428).
'Where real estate is devised to be sold, for the purpose of distributing the money, Lord Thtjrlow says, in Hutchin v. Mannington (1 Ves., 366), “it is clear that it will neither depend upon the caprice of the trustee to sell, for that would be contrary to all common sense, nor upon his dilatoriness : in some way it may be sold immediately ; but I should not inquire when a real estate might have been sold with all possible diligence; for it might the very next day, or that very evening ; and therefore the court always, in such a case, considers it as sold the moment the testator is dead ; for where there is a trust, that is always considered here as done, which is ordered to be done.” This was approved by the Master of the Rolls, in Elwin v. Elwin (8 Ves., 547).
Here, no definite words are used by the testator, with any deliberate purpose of fixing the period at which the enjoyment of the legacies was to commence, other than *423at the death of the widow. By the eighth clause of the will, the executors had power to sell any of the real estate, on the written consent of the widow, and more than half of it was, ánd the whole of it might have been, so sold. By the ninth clause, they were to sell all that remained, “ as soon after the decease of my said wife as may be practicable.” From my examination of the cases, I am satisfied that the language employed indicates such an intention on the part of the testator, as to the time of payment of these legacies, as to bring them within the rule that they vested, and were payable at once on the death of the widow. If I am right as to the time when the legacy became due, the fact that some portion was to be derived from real estate yet unsold, causing some deficiency of assets, would not prevent its being then payable, although payment was impracticable; and interest from that time must be allowed.
Regarding this point as correctly settled, then it follows that the set-off of the judgment against the legacy should be allowed. The bond and mortgage were due before the death of the widow; a foreclosure and sale had been had, and the deficiency ascertained. The claim was therefore liquidated. The Dixons and their assignee had actual or constructive notice of the facts, and the legacy must be reduced by the amount of the set-off (Haskin v. Teller, 3 Redf., 316).
It was alleged, on the argument, and I did not understand it to have been denied, that the Dixons were, at the time of the assignment, insolvent, and made the assignment to pay a debt due the assignee. If that is true, then another and an equitable ground for allowing the set-off is furnished, even if the legacy were not due *424(Smith v. Felton, 43 N. Y., 419). In. view of the novelty of the question above determined, and of the importance of the matter to the parties, if the insolvency of the assignors and the object of the assignment are not conceded, I will so far open the case as to admit proofs upon those subjects only.
I think the executor, Storm, is liable for the $1,200 which he handed over to his executor Haight, on his suggestion that he could use it to the advantage of the estate. Haight misapplied or wasted it, and died insolvent. At the time, he was regarded as solvent and a man of considerable means, although the fact proved to have been otherwise. I am referred to the case of Adair v. Brimmer (74 N. Y., 539), as an authority excusing Captain Storm from liability. In that case, certain stocks and bonds were intrusted to one of the executors, by the others, to sell, on his promise to pay the proceeds into the office where the business of the estate was transacted, which he failed to perform. ‘ ‘ He received these proceeds in his capacity as executor, and they never came into the possession or under the con-, trol of Ms co-executors.” While, here, Storm handed over to his co-executor money which belonged to the estate, and it is lost. There is a marked distinction between the two cases. The case cited does not alter the well-established rule (Redf. Prac. [2 ed.], 506). The executors were also trustees, and as to the latter the rule is even more stringent (Id., 509 ; Bates v. Underhill, 3 Redf., 365).
Decreed accordingly.