Underwood v. . Curtis

28 N.E. 585, 127 N.Y. 523, 40 N.Y. St. Rep. 255, 82 Sickels 523, 1891 N.Y. LEXIS 1808

• Court: New York Court of Appeals
• Decided: October 6, 1891
• Status: Published

Opinion

Parker, J.

The will and codicil are to be construed together as if they were one instrument. ( Ward v. Ward, 105 N. Y. 68.)

And in the construction now to be made we shall consider first whether the instrument operated to convert testator’s real estate into personalty. It has long been the established rule that where executors are clothed with the power and duty to sell a testator’s real estate and distribute the proceeds in the manner provided by the will that the real estate will be deemed converted into personalty. (Everitt v. Everitt, 29 N. Y. 39 ; Power v. Cassidy, 79 id. 602.) A consideration of the principles which led courts of equity to lay down this rule need not be indulged in in view of the long line of authorities establishing that property which passes by an instrument, whether will or contract, takes on the character which such instrument has impressed upon it.

It is necessary, of course, that the direction to convert be positive and explicit irrespective of all contingencies and independent of all discretion on the part of a donee of the power. Turning to the 'will and codicil it will be observed that the testator commanded the executrices to sell all his real estate, and not until the happening of that event is any distribution of the avails authorized.

There are other provisions relating to the disposition of income and postponing division of proceeds until after the death of testator’s widow, but they need not be considered in this connection, for we are now only concerned in ascertaining whether it was the intent of the testator that all of his real estate should be converted into money and the avails distributed as personal estate.

That such was his intention is apparent from the provisions already alluded to, taken in connection with the direction that after the death of testator’s widow and the sale of all the real estate, the proceeds thereof, with all personal estate not specifically bequeathed, shall be divided into four equal shares, one of which shall be given to Helen C. Waters, another to Harriet S. Curtis, and “ the remaining two shares or portions of my estate I give and bequeath to my said executrices in trust for them to hold and invest in good, permanent, well-paying securities, and the use, income and proceeds of one of said shares or portions are by then! to be paid to, and for the use and benefit of my daughter Mary A. Underwood,” and a like disposition of the other share for the benefit of Theresa L. Brown.

Respondent’s counsel insists that the conversion will not take place until the land is actually sold, unless the executrices fail to execute the power within the limitation prescribed by the testator, in which event it will be deemed to take place as of the time when the sale is imperatively required to be made, which is at the end of ten years after the death of testator’s widow,- and he cites in support of his position Savage v. Burnham (17 N. Y. 561).

Whether the conversion shall be deemed to fake place on the death of a testator or at some later period, depends on his intention as manifested by the provisions of the will.

If it provides in terms that a sale shall be made at some ■specified future time, or creates a trust with direction to sell only on the happening of a designated event, which might or might not happen, then the conversion would only take place on its occurrence, otherwise the general rule is that real estate will be deemed converted into personalty as of the date of the death of a testator. (Pomeroy’s Eq. Juris, vol. 3, § 1162; Fisher v. Banta, 66 N. Y. 468.)

In Moncrief v. Ross (50 N. Y. 431), the sale was directed to be made after the death of testator’s mother, and the court held that it was clearly the intention of the testator that the conversion should not take place until the happening of that ■ event.

So in Savage v. Burnham (supra) cited by respondent, the will provided that the sale should^ not take place until after the death of testator’s widow, and it was held that the character of the estate would not be regarded as subjected to the change provided for in the will until such occurence, and in the argument supporting that conclusion the court said, “ thus, in the present case, the real estate is to be sold and the proceeds to become personalty after the decease of testator’s widow, and not before. When that period arrives the estate will be deemed to undergo the change directed by the will, whether then actually sold or not. Until then, the testator not only contemplated no change, but on the contrary, forbid it.”

How in this will, as modified by the codicil, the time of sale is not necessarily postponed to á specified future time, or until the happening of any event. The executrices are directed to sell all of the real estate, and the time of sale rests in their discretion. They are authorized to sell a part or the whole of the real estate at once, and they are not required to make the sale until ten years after the death of testator’s widow. It will readily be seen, therefore, that the language of the testator does not indicate an intention to make this an exception to the general rule that a conversion must be deemed to take place at a testator’s death.

The decision of this court in Robert v. Corning (89 N. Y. 225-239) seems to render further discussion unnecessary, as it is not seen how this feature of the two cases can be distinguished. In Roberts case the testator required his executors to sell all his real estate, but authorized them in their discretion to delay the sale for a period of three years. And the court held that this was an absolute conversion of the real estate into personalty as of the time of testator’s death, the several distributees taking their interests as money, not as land.

In this case the testator also authorized a delay in making sale, and for a longer period it is true, but the fact that more time was given in which the donees of the power to sell could exercise their discretion does not affect the situation.

On the death of the testator, then all of his property became for the purposes of testamentary disposition, personal -estate, and in the further consideration to be given to the questions presented, it must be steadily borne in mind that while frequent reference may be made to the provision relating to a sale of the real estate, and the time within which it is required to be done, still in legal effect the sale is of personal property. The will converted the real estate into personalty and the same instrument now directs the executrices to convert such property into money for the purposes therein designated.

We are thus conducted to a consideration of the question whether the provisions of the will and codicil relating to the disposition of the estate are in contravention of that part of the Revised Statutes, 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 snch instrument be a wall, for not more than two lives in being at the death of the testator.”

An examination of the will discloses that the testator, at the time of its execution, intended first to have the income of all his property devoted to the use of his wafe and two unmarried daughters'during the life-time of his wife. Second, that thereafter his two unmarried daughters should each receive onefourtli of his entire estate, the remaining one-half to be retained by the executrices in trust for the benefit of his two married daughters, the income of one-fourth to be paid to each during life, and after death the principal to go to her heirs.

The tw-o unmarried daughters were appointed executrices, and authorized in their discretion to sell all the lands of testator, either during the life-time of testator’s widow or subse quently. Within ten years after the death of the testator’s widow they were directed to divide all the estate, both real and personal, into four equal shares or portions, for distribution in the manner already alluded to. The testator declaring that his purpose in allowing the executrices ten years before requiring them to make a division was to prevent a sacrifice of the estate. He further provided that during such time as should elapse between the date of the death of his widow and the division, that his married daughters should have the income from the share or portion of the estate named for them, the income to be paid to them at least once a year. The important modifications of the will effectuated by the codicil are three in number.

First. It commands the executrices to sell all the real estate, but authorizes them to exercise their discretion whether a sale should be made during the life-time of the testator’s widow or during a period of not exceeding ten years thereafter. Second. It provides that the division shall not take place until after the real estate shall all have been sold. Third. It declares that until such sale and distribution the married daughters shall not have the interest, benefit or income from the portion of the estate as provided in the will, but it shall belong absolutely to the widow and two unmarried daughters during the widow’s life, and after her death and until the distribution, to the two unmarried daughters.

The will, as modified by the codicil, therefore, manifests the purpose and intention of the testator to be (1) that his executrices shall take possession of the entire estate and convert the real estate into money at such time as they shall deem proper during a period not exceeding ten years after the death of testator’s widow.

(2) That during the life-time of the widow and until the real estate is sold, the executrices shall collect the interest and income of the estate and apply the same to the use and benefit of the widow and executrices, or the survivor of them, and after her death to the use and benefit of the executrices, or the survivor of them.

(3) That immediately thereafter the estate shall be divided into four equal shares, one of which each of the executrices shall receive personally. The remaining two shares to be retained by the executrices in trust, the interest and income of one of such shares to be paid to Mary E. Underwood, during her life, and at her death the principal to go to her heirs at law, and the interest and income of the other share to he paid to Theresa L. Brown during life, and at her death the principal to be paid to her heirs at law.

Having ascertained what disposition the testator intended to make of his property, we are to determine whether such disposition is in accordance with law. It will be observed that there was not in terms a devise or bequest to the executrices in trust, but the testator converted his real estate into personalty, directing the executrices to effectuate his purpose by a sale of the lands. Such estate he authorized them to enter upon and take possession of, collect the income and interest thereof, apply the proceeds for the use and benefit of the widow and executrices for a prescribed term, and at the expiration thereof make division of the avails in the manner directed.

Thus was vested in the executrices in trust the legal estate of all testator’s property. (Ward v. Ward, 105 N. Y. 68; Marx v. McGlynn, 88 id. 357-375 ; Vernon v. Vernon, 53 id. 351; Leggett v. Perkins, 2 id. 297.) And it must continue to reside in them until the purposes of the trust, if legal, shall be accomplished.

The objects of trusts concerning personal property are not defined by statute, but they may be created for any of the purposes for which a trust in lands is authorized by statute, subject to the statutory rule against the suspension of ownership for not more than two lives in being at the death of the testator. And if a trust be created, by which the possession of personal property and the legal estate therein is vested in the trustees during the continuance of the trust, an absolute ownership of personal property is suspended within the meaning of the statute. (Converse v. Kellogg, 7 Barb. 597.) The absolute ownership of personal property being suspended by the creation of a trust in the same manner as alienation of real estate. (Hone v. Van Schaick, 7 Paige, 233 ; Graff v. Bonnett, 31 N. Y. 9; Cutting v. Cutting, 86 N. Y. 522; Genet v. Hunt, 113 id. 158-168.)

And the duration of the suspense in a trust of personal property, like a trust in real estate, must be founded on lives. No term of years, however short, will satisfy the statute. (Schettler v. Smith, 41 N. Y. 328.)

Every trust has three elements closely connected it is true,, but nevertheless susceptible of independent consideration. These are the trust, property, the trust objects and the trust term. The statute under consideration deals only with the last. The trust objects in this case are the widow and two unmarried daughters to whom, or the survivors of whom during the continuance of the trust is to be paid the income of the property.

The fact that there were in being at testator’s death three persons to whom, or to the survivors of whom the income was to be paid, does not bring the trust within the condemnation of the statute, for there may be as many beneficiaries of the income of a trust as the testator may see fit to designate, provided the duration of the trust term does not extend beyond two lives in being at the time of his death. (Crooke v. County of Kings, 97 N. Y. 421.) In this case the trust term was not made dependent in any degree whatever upon the duration of the lives of the executrices or either of them. They were trust objects, entitled, to share in the income, but not in any sense term measurers.

In the consideration of the duration of the trust term, as to' the whole of the estate, and the trust term for one-lialf of the estate after division, we will first refer to the position' of the respondents.

They concede that a trust was created comprising the entire estate, to continue during the life of the widow, but insist that on the happening of that event the active trust is to cease and the executrices thereafter are to act under a power in trust, which requires them to convert the land remaining unsold into-money,' for the purposes of distribution in the manner provided by the will. That from the time of the division there-is a further trust embracing one-fourtli, to last during the life-of Mary A. Underwood. And a like trust as to another onefourtli, to continue until the death of Theresa L. Brown. They urge that the period which may intervene between the death of the widow and that of Mary A. Underwood or Theresa L. Brown should be carved out of their respective lives, thus limiting the duration of the suspension of ownership of any portion of the estate to two lives.

Robert v. Corning (89 N. Y. 225) is invoked by respondents as an authority for the proposition that the authorization to sell at any time within ten years after the death of testator’s-widow is not a suspension of the power of alienation, because-the power of sale was not fettered by the discretion conferred, by the will.

But that question is not before us, and its consideration only tends in the direction of confusion, for as we have already observed for all testamentary purposes the estate must be treated as personalty, and we are only concerned in ascertaining whether it was the intention of the testator to create a trust of" personalty for a term condemned by statute. In Robert's case-there was not a trust term created of which the power of sale was an incident.

In Manice v. Manice (43 N. Y. 303), the executors were only given authority to apply the income during the life-time-of testator’s widow and the trust was, therefore, limited to the period during which they were directed to be applied.

But in this case it is conceded that a trust was created to continue during the life of the widow, and it is difficult to suggest any reason for holding that the testator did not intend a trust to last not only during the life-time of the widow, but for an indefinite period thereafter, not exceeding ten years, depending upon the exercise of the discretion committed to the executrices.. And it may be observed that the effect of the codicil is to encourage them in the direction of delay, because, until finally sold, they are made the beneficiaries of the income of the entire estate. The executrices were not only put in possession of the whole estate with authority to use and invest, but such possession is to continue after the death of the widow and until the time of division. During the period that may elapse between the time of the widow’s death and the division, as well as before they are to collect and receive the income. And also, during that time as before, they are to apply all the income to the trust objects.

During the life-time of the widow the beneficiaries of the income of the trust fund are the widow and the unmarried daughters, or the survivor of them, and, after her death, the unmarried daughters, or the survivor of them. The power of sale can be exercised by the executrices in whole or in part, ■either during the life of the widow or within ten years thereafter. And until ten years shall elapse after her death, unless the executrices shall, before that time, exercise such power, the trust continues. Clearly then the testator has attempted to ■create a trust term embracing the whole estate not founded on lives, but on one life, and an indefinite period thereafter which may be of ten years duration.

The fact that the trust as to the entire property may, by the action of the executrices, be terminated ,on the death of the widow is of no moment if events may happen so that such estate may be extended beyond the statutory limitation. In the words of Judge Grover, “ to render such future estates valid they must be so limited that in every possible contingency they will absolutely terminate at such period or such ¡estates will be held void.” (Schettler v. Smith, 41 N. T. 328-334.)

It is unnecessary to refer to the cases in which the courts have declared void trusts attempted to be founded for a term ■measured otherwise than by lives, because in violation of the Statute of Perpetuities or the statute relating to accumulations ¡of personal property and expectant estates in such property but a few cases may be cited which serve to illustrate the various efforts which have been made in the past to avoid the rigor of the statute. In Cruikshank v. Home of the Friendless (113 N. Y. 337) and People v. Simonson (126 id. 299) the trusts were to continue until the legislature should authorize by appropriate enactment an incorporation such as testator desired should receive the estate; in Garvey v. McDevitt (72 N. Y. 556) the duration of the trust was sought to be limited to a period of four years immediately after testator’s death ; in Killam v. Allen (52 Barb. 605) until the payment and extinction of certain mortgages; in Moore v. Moore (17 Barb. 257) until the reformation of a person not exceeding three years; and in Thompson v. Clendening (1 Sandford Ch. 387) a trust of personalty was created to continue until a sale and distribution of real estate which could not take place until some one of several children became twenty-one years of age, and need not until the youngest child reached majority.

In addition to the trusts already considered the testator provided for a trust as to one-fourth of the estate for the life of Mary A. Underwood, and a further trust as to another one-fourth of the estate during the life of Theresa L. Brown. These trusts cannot take effect until after the expiration of the trust which is to terminate when the sale of the real estate takes place. That fact, taken in connection with the further fact that the trust as to the entire estate for the indefinite period provided for, will not be terminated by the death of - both Mary A. Underwood and Theresa L. Brown, renders unnecessary any discussion of the suggestion that such indefinite period not exceeding ten years may be carved out of their lives.

Having reached the conclusion that the trust terms sought to be created are in hostility to the statute, we must now consider whether there may be such a separation of the trusts as will preserve the trust authorized for the life of testator’s widow.

If the provision for the benefit of the widow ‘and the two unmarried daughters, during the life of the widow, is inseparably connected with the other dispositions of the will, and a necessary part of the general scheme for the disposal of testator’s property, then it must fall with them and the testator -.died.intestate. (Benedict v. Webb, 98 N. Y. 460.) But where .•several trusts are created, and those which render the entire ■disposition illegal can be separated and the legal upheld with-cut doing injustice or defeating that which the testator might be presumed to wish, that which is illegal, or which added to •others renders the whole illegal, may be cut off and the inten-tion of the testator given effect so far as the statute will permit. (Kennedy v. Hoy, 105 N. Y. 134; Van Schuyver v. Mulford, 59 id. 426; Manice v. Manice, 43 id. 303.)

In Kennedy's case the will directed the application of the income of a trust estate to the support of testatrix’s son and •family during his life; after his death to his surviving chil- • dren until they reach the age of twenty-one years, when the principal was to be divided among them, with other provisions in case of his son’s death without issue. The trusts were held do be separable and that for the life of the son declared valid.

In Van Sehuyver's case the income of the testator’s entire ■estate was given first to his widow during her life; second, .•after her death to his two daughters during their lives,, and then he devised the estate to the issue of ■ such daughters. The courts declared the trusts separable and the provision for .the wife valid, although the devise over was void.

And within the rule established by those and kindred cases, we think the trust created for the life of the testator’s widow :should be permitted to stand, and the testator held to have died intestate, except as to the estate created for her life.

This can be done without in any manner interfering with the general scheme adopted, by the testator fay the disposition of his property. On the contrary, it is in furtherance of his •wish to as great an extent as the courts may be permitted to go.

It is apparent that his primary purpose was to provide that his widow and unmarried daughters should have the use of his • entire estate'during the widow’s life. Subsequently, he con- ■ eluded to give the unmarried daughters the benefit of such use for an indefinite period, but while effect cannot be given to • such subsequent intention, it .may and should be given to the .first.

The conclusion thus reached requires an affirmance of the judgment dismissing the complaint by which is sought either a partition or a construction of the will.

Partition cannot be had because, in the view'we have taken, the testator has converted his estate into personalty and vested the legal estate in the trustees during the life-time of the widow, and until her death a division of the property cannot be decreed.

¡Respondent cites Chipman v. Montgomery (63 N. Y. 221) as an authority for the assertion that the plaintiffs cannot maintain an action to construe the will because they claim in hostility to it, asserting its invalidity.

As testator’s estate became-personalty at the time of his death, Chipman's case may not be applicable to the situation presented, for courts of equity will often take jurisdiction to construe a will involving the disposition of-personalty, where they would refuse if a judicial construction was sought for the mere purpose of determining title to real estate. ( Wager v. Wager, 89 N. Y. 161.) The reason for it is found in the fact that an executor is regarded as a trustee of the personalty which he holds in trust for the legatees or beneficiaries, so far .as it is disposed of by will and as to the residue for those entitled to it under the Statute of Distributions. (Bowers v. Smith, 10 Paige, 193.) And courts of equity have ever regarded the supervision of trusts and trustees as peculiarly •objects of equitable cognizance.

But we need not inquire whether a complaint might have been so framed as to have authorized a court of equity to assume jurisdiction to construe the will at the instance of next of kin, claiming in hostility to its provisions, for as complete relief can in due time be obtained in Surrogate’s Court, the court was authorized on .that ground, in the exercise of its discretion, to decline jurisdiction. (Wager v. Wager, supra.) And if it should be determined that it might have construed the will, we should be obliged to assume that, in the proper •exercise of its discretion, it declined to do so, for there is nothing in the record to show that the complaint was dismissed because of want of jurisdiction.

Whether the court best exercised the discretion belonging to it, is not a proper subject of inquiry here, but if it were, reasons could readily be assigned sustaining such position.

The judgment should be affirmed.

All concur, except Vahh, J., not sitting.

Judgment affirmed.