Allen v. Watts

98 Ala. 384

• Court: Supreme Court of Alabama
• Decided: November 15, 1893
• Status: Published

Opinion

WALKER, J.

The question in this case is, whether the will of Wade H. Allen was effectual to pass his interest under tlie codicil to the will of his father, Wáde Allen. Wade H. Allen executed his will on the 5th day of January, 1857, when he was more than eighteen, but less than twenty-one years of age. If his interest in question was personal property it passed by his will, as all persons over the age of eighteen years, of sound mind, could then, as they can now, by their last will, dispose of all their personal property.— Code of 1852, § 1595 ; Code of 1880, § 1951. If that interest was real property it did not pass by the will, as the law was at that time, as it is now, that only persons of the age of twenty-one years, of sound mind, may devise, by last will, lands, tenements or hereditaments, or any interest therein. Code of 1852, § 1589 ; Code of 1886, § 1945.

By the codicil to the will of Wade Allen, who died in 185Í, he gave and bequeathed to his wife, Eliza Allen, his residence and the lot on which it was situated, in the city of Montgomery, “to be held, used and enjoyed by her during the term of her natural life, and at her death to be sold and the proceeds of said sale equally divided between all my children named in the will, to-wit, &c.; Wade H. Allen was ■one of the children named in this provision. The executors were empowered and enjoined to carry out the provisions of this codicil. The widow of Wade Allen died in January, 1892, more than thirty years after the death of Wade H. Allen.

The provision made by the codicil for the children was certain, not dependent upon the happening or not happening of any future event; only the time of enjoyment was postponed. It is not denied that their several interests were vested, and not contingent.—Higgins v. Waller, 57 Ala. 396; Foster v. Holland, 56 Ala. 474; High v. Worley, 32 Ala. 709; Tazewell v. Smith, 1 Rand. 313; s. c. 10 Am. Dec. 533.

Nor is it denied that the codicil presents a case for the application of the equitable doctrine of conversion. For the purposes of the provision in behalf of the children the land directed to be sold and turned into money is to be considered as money. The contention of the appellants is, that the testator gave his wife a life estate in the land, and authorized a sale of it only after her death, he clearly manifested an intention that it should remain and be considered and treated as real estate so long as she might live ; that the intention of the testator is to prevail,, and' that, therefore, the land can not be considered and treated as personal property during the pei'iod when, according to the express directions of the testator, it was to-be held, used and enjoyed as land. It is insisted 'that the testator postponed the date of tbe conversion until after tbe expiration of. tbe life estate given to tbe wife.

Mr. Pomeroy says: “Conversion bas been briefly and accurately defined as tbat change in tbe nature of property by wbicb, for certain purposes, real estate is considered as personal, and personal estate as real, and transmissible and descendible as sucb.”—3 Pomeroy Eq. Jur., § 1159. In tbe note to Ford v. Ford, 5 Am. St. Eep., 117-141, it is said: “It is so well established as to be at this time beyond controversy tbat an estate will be considered as of that bind of property into wbicb it is directed to be converted; tbat is, a direction in a will to convert realty into money operates as an equitable conversion, and tbe realty is thereafter to be deemed personalty in equity; and money directed to be converted into land, in equity, considered as sucb for all intents and purposes, and passes therefore by devise, and descends to tbe heirs.” Tbe doctrine of conversion is an application of tbe maxim tbat equity regards tbat as done which ought to be done. Tbe purpose at the foundation of tbe doctrine is to give effect to tbe intention disclosed in tbe will, deed, or contract, as tbe case may be. If from tbe terms of tbe provision in question an intention is manifested tbat tbe original form of tbe property shall be changed and tbat tbe beneficiary is to have tbe property in another form, equity proceeds upon tbe theory tbat tbe change bas already been made, and considers tbe beneficiary as entitled from tbe beginning to tbat kind of property wbicb will remain when tbe change shall have been actually made. Tbe practical questions growing out of tbe operation of tbe doctrine are generally presented in controversies in reference to tbe devolution of the interest of tbe original beneficiary, as where tbat interest is claimed by bis heirs, or by his distributees, or by bis personal representatives, or by the holders of demands sought to be enforced against it, or under transfers from tbe beneficiary himself. Tbe result of sucb controversies frequently depends, as in tbe present case, upon whether tbe interest is to be regarded as real or personal property. As in equity, by tbe operation of tbe doctrine under consideration, property is treated as being already what it was intended to become, tbe character of the interest acquired by tbe beneficiary is to be determined by tbe kind of property wbicb be is to receive, though the source from wbicb it is to be obtained is another kind of property. If be is to receive money or other personal property, though land wbicb is particularly described and designated for this purpose must be sold to obtain tbat wbicb is to come to him, bis interest is in tbe money or other personal property, and not an interest in the land. If he is to receive land, though the land remains to be acquired and a specified fund or other personal property is set apart to be used for that purpose, his equitable claim is to land, and not to the personal property so used in its acquisition. — -3 Pomeroy’s Eq. Jur., §1159 et seq.

A testamentary gift of money which is to be realized from the sale of land is, throughout, a legacy of money, because it was the intention of the testator to give money and not land. It is by indulging the presumption that the original form of the property has already been changed, when there has been no change in fact, that the transaction can be considered as one entirely in reference to that hind of property which the beneficiary is to receive. Equity gives to the act of the testator in setting apart the land and directing it to be converted into money the effect of stamping upon it the qualities of money, so that the interest in it of the person to whom the money is to be paid will accrue to him as an interest in money, and may pass as money, though the land has hot been actually converted into money. In other words, the land is considered as money so far as this is necessary to give effect to the provision as a legacy of money and to treat the interest of the legatee as altogether an interest in money. It being the act of the testator which imparts to the land the qualities of money for all the purposes of the provision in question, it would seem that such quantum of interest or estate in the land as must follow the direction given to it by the testator takes on the qualities of money from the time when the direction which it is to take is fixed and determined. As it is the command of the testator which works the conversion, the land becomes money, in the view of equity, when the provision for the appropriation of the proceeds of its sale, is made. It is not the actual appropriation of the proceeds of the sale, but the direction or provision that such appropriation shall be made, that supports the fiction of a conversion. When the fact that the land must be sold and the proceeds of its sale paid to the beneficiary is definitely and finally settled, equity regards the change in the form of the property as already consummated. • If the fiction of a conversion becomes operative from the time the testator fixes the direction in which the land shall go, and not from the time when the land is to be actually sold and the proceeds of its sale applied on the legacy, it follows that the interest of the legatee in the land must in equity be treated as an interest in money from the time the legacy becomes a vested interest in the legatee. In Cropley v. Cooper, 19 Wal. 167, a case involving substantially tbe same question as tbe one now under consideration, it was said: “Tbe real estate having been directed by tbe will to be converted into money, it is to be regarded for all tbe purposes of tbis case as if it were money at tbe time of tbe death of tbe testator. That it was not to be sold-until after tbe termination of two successive life estates does not affect tbe application of tbe principlei Equity regards substance and not form, and considers that as done which is required to be done. Tbe sale being directed absolutely, tbe time is immaterial. Tbe proposition here announced is supported by many authorities. Reading v. Blackwell, 1 Baldwin, 166; Rinehart v. Harrison, Ib. 177; Fairly v. Kline, 3 N. J. Law, 322; Wurts v. Page, 19 N. J. Eq. 365; Hocker v. Gentry, 3 Met. (Ky.) 463; Tazewell v. Smith, 1 Rand. 313; s. c. 10 Am. Dec. 533; Bright’s Appeal, 100 Pa. St. 602; Jones v. Caldwell, 97 Pa. St. 42; Parkinson’s Appeal, 32 Aa. St. 455; Loftis v. Glass, 15 Ark. 680; Dodge v. Williams, 46 Wis. 70; 3 Pomeroy Eq. Jur. § 1162; 6 Am. & Eng. Encyc. of Law, 670. There are cases opposed to this view. See 3 Jarman on Wills (Randolph & T.’s Ed.) 179, note 3. That tbe proper application of tbe principle works tbe result above stated in a case like tbe present one seems to have been recognized by tbis court in tbe case of High v. Worley, 33 Ala. 197. By tbe will under consideration in that case tbe testator directed that tbe land in controversy should be retained by tbe executor, for tbe use and support of bis wife and children, until bis daughter Eanny Ann attained tbe age of sixteen years; that it should then be sold, and that the proceeds of sale should be equally divided between bis wife and children, share and share alike. Tbe land was considered as money, as it did not appear that it bad been reconverted into realty by tbe election of all tbe beneficiaries to take tbe land itself. Tbe court said: “Tbe postponement of tbe sale, to'the time of tbe daughter’s becoming sixteen years of age, does not prevent tbe operation of tbe principle.” As it appeared that tbe daughter bad been married, and tbe case was in tbis court twenty-eight years after tbe death of tbe testator, it may be supposed that when tbe bill was filed tbe time bad already passed when tbe actual sale and division should have been made. Tbe case does not clearly show that tbe court regarded tbe equitable conversion as having taken effect from the date of the testator’s death. That such, however, was tbe view of tbe court is indicated by tbe cases which were cited in support of the proposition above quoted. Tbe only cases cited in that connection are tbe two reported in 1 Baldwin, which fully sustain tbe proposition in support of which they have already been cited in this opinion.

The appellants contend that the decision in the later case of Massey v. Modawell, 73 Ala. 421, settles the proposition that when land is directed to be sold and converted into money at some future time there is- no equitable conversion until the arrival of the time when the sale and conversion should actually take place. This contention finds apparent support in some of the expressions used in the opinion in that case. But the decision itself can not be regarded as establishing the doctrine contended for. The right of complainants in that case to maintain their bill was denied on several separate and distinct grounds. The complainants sought to support their right to sue in equity for the recovery of the land on the ground that by the provision of the will which disposed of it it was to be converted into money. That will directed that when the testator’s youngest child became of age or married, the entire property was to be sold and converted into money. One of the complainants who was a son of the testator ivas a minor at the time the bill was filed, and it did not appear that he was then married. The time had hot arrived when a valid sale could be made under the power and direction in the will. But the executor had attempted to make a sale, without any decree or order purporting to give him authority to do so ; and the land was then held under this void sale. It was properly held that the conversion provided for by the will had not then taken effect so as to give the beneficiaries the right to sue in equity for the recovery of the land as money. The doctrine of equitable conversion could operate only upon such estate in the land as was designated or set apart by the testator do be converted into money. In that case, the direction in the will was in effect for the sale and conversion of the remainder in the land which would be left after the term which would expire when the youngest child attained majority or married. The term extending to that date was not within the influence of the testator’s direction to convert, and was not disposed of by the provision on that subject. That term was still running and the persons entitled to it were entitled to recover the possession of the land from a wrongful holder. The title was in the heirs by descent. In their characters as the legal holders of that term they were entitled to the possession of the land as land, and could sue at law to recover possession. The right of the legal holder of that term was a right to hold and possess the land as realty, with all the rights and incidents which attach to land. The complainants could not then sue iu equity to recover the land as money, because they were not then entitled to take it as money. The term, the legal ownership of which gave the right of present possession, was never intended by the testator to be converted. It was proper to hold that a provision for the conversion of the remainder only could not operate to work a conversion of the intermediate term also. Referring the expressions in the opinion to the matter then in hand, the court is to be understood as asserting that a conversion of the entire estate in the land could not and did not take effect while a term was outstanding which was not within the influence of the direction to convert. When land is directed to be sold and converted into'money, it is not necessarily the whole estate in the land that is in equity to be treated as money. The fiction of a conversion is to be indulged only so far as this is necessary to give effect to the intention of the testator to make the gift one of money. If only a remainder in land after a particular estate, is to be sold and converted into money, it is only upon such remainder that the character of personal property is stamped. There is no incompatibility in the existence at the same time of a particular legal estate in land over which a court of equity can exercise no control whatever, and an independent right to have the remainder interest in the same land converted into money, so that a court of equity may treat that interest as money. In such case the holder of the particular estate must be treated everywhere and for all purposes as the owner of a legal interest in land as such. The equitable doctrine of conversion is to be invoked merely to determine the character of the interest in that estate in the land which is to be converted. The conclusion that the interest of the children in the remainder, which alone was directed to be sold and converted into money, was not in equity an interest in money, and transferrable and descendible as such, from the date of the death of the testator, was not involved in the decision of Massey v. Modawell. Only their equitable right to the present possession of the land was denied. Savage v. Burnham, 17 N. Y. 561, is another case principally relied on in the argument for the appellants. By the will then before the court the testator had devised all his real and personal estate to trustees, upon trust to hold during the life of the widow and apply the rents’ and profits as directed, and at her death to sell the real estate and apply the proceeds to a fund, for the distribution of which among the testator’s children and grand children provision was made, It was held that during the life of the widow the trustees held the land as land. This was manifestly proper. In determining the character of the estate of the trustees in the land during the life of the widow, the court by no means asserted that the interests of the children and grand children in the remainder were not to be regarded' as interests in personal property from the date of the testator’s death. That question was not involved! The trustee could hold the land as land so far as the life estate was concerned, while as to the remainder, the land would be regarded as personalty, because only the remainder was within the influence of the direction to convert.

It is fully recognized by the authorities that equity does not regard the conversion as taking effect from the date of the testator’s death unless there is an imperative and unequivocal direction, express or clearly implied, to sell and convert, so that a sale is inevitable to carryout the will. If the sale is or is not to take place as a particular event may or may not happen, or is made to depend upon the will or discretion of the executor or trustee, the conversion will not be consummated in law until the prescribed event happens, or until the executor or trustee exercises the power to sell, as the case may be; and in such case the conversion in fact does not necessarily result from the execution of the command of the testator, but is dependent upon the happening of the prescribed event, or the exercise by the executor, or trustee of the power vested in him to change the form of the property. There is no notional conversion until it is settled that the original form of the property shall be changed. If the testator does not himself settle that fact, but leaves it to be settled in the future in a manner prescribed by him, there is no room for the operation of the fiction of a conversion until the direction the property is to take is fixed. Equity does not consider a thing as done until it is determined that it ought to be done.—King v. King, 13 R. I. 501; Keller v. Harper, 64 Md. 74; Parker v. Glover, 42 N. J. Eq. 559; Haward v. Peavey, 128 Ill. 430; s. c. 15 Am. St. Rep. 120; Ford v. Ford, 70 Wis. 19; s. c. 5 Am. St. Rep. 117. The following is Mr. Pomeroy’s statement of the rule as to the time from which the conversion takes place: “The instrument might in express terms contain an absolute direction to sell or to purchase at some specified time; and if it created a trust to sell upon the happening of a specified event, which might or might not happen, then the conversion would only take place from the time of the happening of that event, but would take place when the event happened exactly as though there had been an absolute direction to sell at that time. Subject to this general modification, the rule is settled that a conversion takes place in wills as from the death of the testator, and in deeds, and other instruments inter vivos, as from the date of their execution.” — 3 Pomeroy Eq. Jur., § 1162:

Our conclusion from the authorities, and from a consideration of the reasons which support the equitable doctrine of conversion, is that that interest or estate in the land which the will requires, absolutely and without contingency, shall be sold and converted into money which is to be paid to certain beneficiaries, is, for the purposes of that provision, to be considered as money from the date of the testator’s death. It is as if the testator had taken that interest or estate in theTand within his grasp and transformed it under his own hand into another kind of property. It is none the less a gift of personal property from the beginning because there is a postponement of the time when the legatees can come into the enjoyment of the legacies. A contingency as to the time when the actual change in the form of the property shall take place, does not lessen the effect of the act of the testator in making the land money by directing the appropriation of the proceeds of its sale to the satisfaction of a gift of money. If the testator is the owner in fee of the land, he may carve out any interest or estate he pleases and direct that alone to be sold and the proceeds applied on a legacy. As to the remaining interest or estate in the land, to which the testator does not undertake to impart the qualities of money, the land continues land with all the incidents which attach to such estate at law.

The result in this case is, that though the testator’s widow had a life estate, and so long as she lived, held, used and enjoyed the land as such, yet, for the purposes of the provision made for the children, the remainder, after such life estate, is to be considered in equity as money from the date of the testator’s death. Wade H.’ Allen’s interest in such remainder is to be treated as a vested interest in personal property. It follows that that interest passed by his will. The City Court so held and decreed accordingly. Its decree must, therefore, be affirmed.

Affirmed.