Court Opinion

ID: 5499711
Source: CourtListenerOpinion
Date Created: 2022-01-10 02:57:40.658852+00
Date Added: 2024-06-11T08:33:53.867147
License: Public Domain

Merwin, J.
By the statute of this state in regard to real property, (4 Rev. St., 8th Ed., p. 2432, § 15,) it is provided that the absolute power of alienation shall not be suspended for a longer period than during the continuance of not more than two lives in being at the creation of the estate. That the provisions of the will in question are repugnant to this statute, and the trust therefore invalid, as one relating to real estate, (Brewer v. Brewer, 11 Hun, 147, 72 N. Y. 603; Amory v. Lord, 9 N. Y. 413,) is practically conceded by the defendants. They, however, claim that this is a case where the doctrine of equitable conversion should be applied, so that the will should be construed as if the whole estate was personalty, and that upon this theory the law of the state of Pennsylvania would govern in the construction, and the trust under that law be valid. Phillips Appeal, 93 Pa. St. 45. It seems to be conceded on the part of the plaintiffs that, if there is an equitable conversion, the will is governed by the law of Pennsylvania, and therefore valid. The question to be determined therefore is whether or not there is here an equitable conversion. The general rule on this subject, as stated in White v. Howard, 46 N. Y. 162, is that, to constitute a conversion of real estate into personal, it must be made the duty of, and obligatory upon, the trustees to sell it in any event; that such conversion rests upon the principle that equity considers that as done which ought to have been done; that a mere discretionary power of selling produces no such result. There is here no express direction to sell, but the point of the defendants is that the evident design and intention of the testator, as shown by the whole scheme of the will, and particularly by the directions as to the immediate investment of the whole of the capital of the estate, and as to the ultimate division of the capital, in connection with the terms employed, point to the immediate conversion of the estate into money. In Phelps' *246Ex'r v. Pond, 23 N. Y. 69, it was said that, where a testator authorizes his executors to sell real estate, and it is apparent from the general provisions of the will that he intended such estate to be sold,' the doctrine of equitable conversion applies, although the power of sale is not in terms imperative. In the same case in the supreme court, (28 Barb. 121,) the subject is more fully discussed, and the same conclusion reached, it appearing that the most important purposes and provisions of the will called for such conversion, and to be incapable of execution without it. In Fisher v. Banta, 66 N. Y. 468, there was an absolute direction to sell. In Power v. Cassidy, 79 N. Y. 602, the testator gave all his estate, real and personal, to his executors in trust, with power to sell, and out of the proceeds of sale, or of the income, to pay to his wife a specified annuity for life, in lieu of dower, and his residuary estate he gave one-third to his wife, one-third to a nephew, and the balance to his executors, to be divided by them among such institutions of a certain class as the executors should decide, and in such proportion as they should think proper. It was held that there was an equitable conversion, it being said by Miller, J., that the estate could only be effectually divided, and the purposes of the will efficiently carried out, by converting the real into personal, and that any other construction would necessarily interfere with the accomplishment of the benevolent designs of the testator. In Lent v. Howard, 89 N. Y. 169, it was. held that, when the general scheme of the will requires a conversion, the power of sale, although not in terms imperative, operates as a conversion, and this will be deemed to be immediate, although the donee of the power is vested, for the benefit of the estate, with a discretion as to the time of the sale. In. this case, the executors, after paying debts, and carrying out certain specified, provisions, were directed to invest all the balance and remainder of the estate in personal securities. In Newell v. Nichols, 75 N. Y. 78, the testatrix gave her residuary estate to trustees, in trust, to set apart, sell, or otherwise dispose of the same, at their discretion, and invest the proceeds so as to make two funds of $15,000 each, and one of $30,000, the income of each fund to be paid to different parties during life, and, at the death of each respectively, the principal to be paid to certain parties as in the will specified. The estate was not fully adequate to create the contemplated trust fund of $60,000. It was held that there was not an equitable conversion at the death of the testatrix, the power to sell being discretionary. In Hobson v. Hale, 95 N. Y. 588, the will, after Various legacies and devises, and after providing for the payment of life annuities to 12 different persons, contained this provision: “As to the residue and remainder of all my estate, both real and personal, not herein otherwise disposed of, it is my will that the same be and remain in the care and custody of my said executrix, and executors, and trustees, and their successors, well and safely invested until the decease of the last survivor of the life annuitants; and that then the said residue and remainder, with all the accumulated interest thereof, shall be divided equally among my grandchildren, per stirpes.” There was no express direction, for the conversion of the real estate into personalty, or for its sale. It was held that there was no equitable conversion, it being said by Miller, J., that, in order to uphold a conversion of real estate into personalty in the absence of express words, there should be such an implication of the testator’s desire as to leave no question in regard to it. In Chamberlain v. Taylor, 105 N. Y. 194, 11 N. E. Rep. 625, it is said that equity will never presume a conversion, unless it is demanded to accomplish the lawful purposes expressed in the will of the testator. In Asche v. Asche, 113 N. Y. 235, 21 N. E. Rep, 70, it is said that the necessity of a conversion to accomplish the purposes of a will is equivalent to an imperative direction to convert, and effects an equitable conversion. In Scholle v. Scholle, 113 N. Y. 270,21 N. E. Rep. 84, it is said that, to justify such a conversion, there must be a positive direction to convert, which, though not expressed, may be implied, but, in the latter ease, only when the design *247and purpose of the testator is unequivocal, and the implication so strong as to leave no substantial doubt. Many other cases are cited in the elaborate briefs of counsel upon either side, but it is not important to consider them in detail. Enough have been referred to to indicate the general principles applicable to the subject. It is a question of intention, and in such a case, as said, by Judge Earl in Delafield v. Barlow, 107 N. Y. 540, 14 N. Y. Rep. 498, precedents are not very valuable when the decision must be based upon the peculiar phraseology of the entire will.
In the present case the testator was the owner of a large estate, real and personal, and very evidently designed to have the body of it kept together as long as it could legally be done. The income was only to be used, for the benefit of his widow and lineal descendants, until a period that, under ordinary circumstances, would be far in the future. After making partial provision for his wife in connection with his dwelling-house, and the property connected therewith, all the rest of his property was placed in trust. He called it “his residuary estate,” and jn his mind it was separated into “capital” and “income.” The capital or principal was to be held and preserved, the income was to be distributed from time to time among the beneficiaries. The trustees were directed to hold, manage, and appropriate the estate, collect the rents, issues, profits, income, dividends, and gains, invest and keep invested the capital, so as to make it as productive as reasonably could be. They were directed to preserve such investments and securities as he should leave standing in bis name, so long as they deemed it prudent, and might make such new investments as they, in their best judgment and discretion, should deém advisable and advantageous to the estate, without being confined to such investments as the law directed for the investment of trust funds, and they were given full power to select any investments or securities they might approve, except the capital stocks of corporations, and obligations not accompanied with reasonable securities. They were given full power to change any such investments, whether left by him or made by them, and to convert and reinvest the proceeds whenever and as often as they thought most to the advantage of the estate. He directed that any rents or royalties, which his trustees might receive from his coal or ore lands, as well as any moneys received by them from and out of any corporation or land association in which he had an interest, and out of dividends declared by any ore or mining company in which, he was interested, should be deemed part of the capital of the estate, and that his trustees should not sell or dispose of any of his anthracite coal lands while they shall be producing rents or royalties, unless exceptionally full prices should be obtained, or some unforeseen contingencies arise, which should make it plainly unwise for them to retain the property, and, before any sale or disposition of the same, a majority of the beneficiaries then living, and over age, shall give their consent in writing. He gave his executors and trustees power to sell any of his real estate within any state or territory, except that the house and lot devised to his wife for life should not be sold without her written assent, and except that he requested them to observe his requests as to sale of his coal lands. He requests that the books of the estate shall continue to be kept as he has kept them in his life-time, by a continuation of the same accounts that he has kept, so as to show what shall be derived from each specific property or investment. He provided that the office building and lot, if not used by the trustees, might be rented or sold. At the termination of the trust, he directed the division of the capital of the residuary estate among all his lineal decendants then living, to each an equal fractional share thereof. These are the main provisions of the will, so far as the question before us is concerned. There is an evident design that the management of the estate should be continued in the same line upon which it had been managed. The accounts kept by him are to be continued. ITo radical change was contemplated. They were required *248to invest and keep invested the capital of the estate, so as to make it as productive as it reasonably could be, and still, in doing so, they were directed to preserve, as long as they deemed prudent, such investments and securities as the testator should leave standing in his name. In making new investments, they were not restricted to personal securities, but might select any investments or securities they approved, except capital stocks of corporations and certain obligations. They could change and reinvest in their discretion.
Of the investments left by the testator, the real estate in this state is apart. It consists of farming lands, city and village property. Under the terms of the will, the trustees had a right, if they deemed it prudent, to preserve this investment during the entire continuance of the trust. The anthracite coal lands, independent of the discretion of the trustees, could not be sold without the consent of a majority of the beneficiaries, at the time, of age. This property might therefore remain till the end of the trust. The office building and lot might be rented or sold. A large amount of western lands was held by the testator, said to be chiefly undeveloped. There is no specific reference to them in the will. There is nothing from which the inference can be fairly drawn that the testator designed an immediate sale of these. They were a portion of the corpus or capital of the estate, a part of the testator’s investments. It was for the trustees to say when it was prudent to sell. But it is said that the direction for a division at the close of the term is a controlling circumstance. It is not stated who shall make the division. Nor is the direction to divide and pay, as in some of the cases cited. Even then it would not necessarily follow that a conversion was intended. Chamberlain v. Taylor, 105 N. Y. 191, 11 N. E. Rep. 625. A sale of the coal lands might be prevented by the parties in interest. Whether or not a sale of the whole or a portion of the estate would be convenient for the purpose of division among the beneficiaries would depend upon the number then of the beneficiaries, and the condition then of the estate. A sale might or might not be desirable. We cannot assume that the testator would or did determine in his own mind those contingencies, in the absence of an express statement to that effect. The form of investment was left optional with the trustees, so that the testator could not intelligently determine that a conversion was proper or necessary in the distant future. The estate was large; the capital was likely to be increased in the accumulation as capital of rents and royalties of coal lands. It is not probable that the testator would design to have thrown upon the market, for conversion, simply for the purpose of division, such an estate as his trustees then might have in hand. The will was carefully drawn, and it may be said, with a good deal of force, that the testator expressed all he designed in the matter of sale, and that, if he had intended a conversion, at all events he would have said so. The foregoing considerations lead to the conclusion that there is here no sufficient basis for saying that the testator intended that his real estate should at all events be sold and converted into personalty. It was designed by him to be left discretionary with his trustees, and therefore there is no equitable conversion.
We are further called upon to determine the right of dower of the widow of the testator, and her interest in said property. The submission states that she has accepted the provisions of the will in lieu of dower. Under the will, she was entitled to receive during her life two-fifths of the net income of the estate. That, in substance, would have given her two-fifths of the income or rents of the real estate in question. Of that, she is deprived by the result of this action, and the question is whether, as against the heirs, she should not be restored to her legal rights, so far as this property is concerned. This would be in accordance with the views of the chancellor in Hone v. Van Schaick, 7 Paige, 233, and of the supreme court in Manice v. Manice, 1 Lans. 378. The case would be somewhat analogous to the eviction of a widow of her jointure when, it is said, the effect is to remit the widow to her dower pro tanto. *2492 Scrib. Dower, (2d Ed.) c. 15, § 84. I am of the opinion that the heirs are not in a position to enforce against the widow her election. Having, as to this property, repudiated the trust to the lessening of the widow’s income to the extent of more than the benefit of her dower, they have no right to say that, ■although their estate as heirs is restored, her estate as widow is not. Their repudiation of the trust to her loss places her in a position to insist, as against them, upon her legal right in order to retrieve her loss. They cannot take away the consideration for her election, and still say she is bound by it; They are restored to their rights as heirs, and those rights are subject to her dower. It follows that, in accordance with the submission, judgment should be rendered in favor of the heirs, declaring that the provisions of the will, so far us they apply to and affect the real property in this state, are invalid, and that the said real property descends to the heirs at law of the deceased, as if he had died intestate; and also declaring that the widow is entitled to dower in the said real estate. Each party to have costs, as provided in the submission.
All concur.