Benz v. Fabian

| New York Court of Chancery | May 15, 1896

Grey, Y. C.

There are two well-defined rules which have been recognized and applied in this state in the construction of wills in cases where there is a gift of property and also a donation of a power of disposal to the beneficiary.

In one class of cases, where there is a gift without definition of the estate given and also an unlimited power to dispose of the property, the generality of the gift and the unrestricted power of disposal are construed to pass an absolute estate to the beneficiary, and any subsequent gift over is held to be void, because such a limitation over is inconsistent with the complete estate given to the first taker.

In this class supporting this rule may be found the following-named cases : Robinson v. Dusgale, 8 Vern. *181; Maskelyne v. Maskelyne, Amb. *750; Hixon v. Oliver, 13 Ves. *108; Dutch Church v. Smock, Sax. 153; Den, ex dem. Sharp, v. Humphrey, 1 Harr. 25; Annin v. Van Doren, 1 McCart. 143; Borden v. Downey, 6 Vr. 74, affirmed on error; Downey v. Borden, 7 Vr. 461; McClellan v. Larchar, 18 Stew. Eq. 17.

The other construction is sometimes called an exception to the foregoing rule, and is applied when the estate given is, by the express terms of the will, defined to be a life estate, and, if a power of disposal be added, the beneficiary will take a life estate only, and the added power of disposal will be held to be a separate and distinct gift, which has no effect to enlarge the life estate into a fee or to prevent a limitation over.

Supporting this doctrine, but recognizing the force of the former construction when circumstances call for its application, are the following cases : Tomlinson v. Dighton, 1 P. Wms. *149; S. C., 1 Salk. *239 ; Cory v. Cory, 10 Stew. Eq. 200; Pratt v. Douglas, 11 Stew. Eq. 516; Wooster v. Cooper, 8 Dick. Ch. Rep. 683.

In the case of Kent v. Armstrong, 2 Hal. Ch. 637, the construction limiting the estate given to be a life estate only was carried further than in any other case in this state. The terms of the devise were that the testatrix gave the lands “ to my beloved daughter E. R. A., to be by her possessed, enjoyed and occupied to her and her heirs forever, * * * but if my said daughter should die without heirs and intestate,” then &c. over to others. The case was certified into the supreme court for its opinion as to the effect of this devise. That court reported its unanimous opinion that the devise gave E. R. A. an estate in fee-simple;' that the words “ without heirs and intestate” implied a power of disposition, and are inconsistent with and avoid the limitation over. There was a decree accordingly. On an appeal from this decree, the court of errors recognized the rule that the gift of an estate generally, with an unlimited power of disposal, would vest a fee, but held that in the case before the court the power of disposal was not absolute; that the words “ and intestate ” so limited the power that it could only be exercised in the mode prescribed, i. e., by will, and that this was such a restriction that it could not be presumed that the testatrix, by creating the power, intended to give an absolute estate. On the contrary, these “ qualifications and additions were annexed to the devise to limit what would otherwise have been an absolute interest.” On this ground it reversed the decree, and construed the devise to give a life estate only to E. E.'A., and that on her dying without issue and intestate, the executory devise over operated.

The case stands as the law of this state to establish the construction that where there is a devise in terms in fee, with a limitation over on the death of the devisee without issue and intestate, the power of disposition is limited to be exercised by the making of a will, and this is such a restriction of the power that the intention of the testator will be deemed to be to give a life estate only, with an added, though distinct and separate, power of disposition by will.

The declaration of Mr. Justice Eandolph (at p. 642), that words conferring a power of disposal will be held to give a mere .power, not only where an estate for life is given in express words, but also where the life estate arises by necessary implication or construction, was subsequently disapproved of in Downey v. Borden, 7 Vr. 468, by the court of errors, but the general rule of construction in this state of such devises, as established in Kent v. Armstrong, was fully accepted and declared by that court in the case of Cantine v. Brown, 17 Vr. 601.

The same rules of construction declared in the above-cited New Jersey cases are held to be equally applicable to bequests of personal estate and to devises of real estate. Pratt v. Douglas, 11 Stew. Eq. 516; Wooster v. Cooper, 8 Dick. Ch. Rep. 683.

Applying the law as declared in these cases to the construction of the devise to Elizabeth Fabian (the mortgagor) in the will of Nicholas Fabian, the subject-matter of the gift is found to be the house, the furniture &c. These things themselves are given, not merely the use and enjoyment of them.

Neither the words of the gift nor any other expressions in the will indicate any intention to give Elizabeth a life estate only. No limitation of the estate given her is expressed, either as to the time of enjoyment or the character or the quantity of the estate devised. The limitations over do not in any way define the estate given to Elizabeth. I think it must be held that the estate of Elizabeth in the property given, as expressed in the words of the will, is general and indeterminate, and the terms of the power of disposition must be examined to define it.

Upon examining the power of disposition, the house, lot and furniture &c. appear to be given to Elizabeth to use and occupy, or to dispose of “ as she may think proper.” There is no prescription as to the time when, or during which, or the manner in which, Elizabeth shall exercise this power. She had an unrestricted power to dispose of the property as she might think proper, and no direction as to what disposition she should make of the proceeds arising from her exercise of the power. The provision for the maintenance and education of the children is contingent upon the wife’s dying before' the majority of the youngest surviving, and, even if valid, would affect only the income which might be received from the property, and not the proceeds from any disposition made of the property.

In Mixon v. Oliver, 13 Ves. 108, there was a gift to a wife, “ to be disposed of as she thinks proper; ” the power was held to be unlimited and to vest a fee. The same ruling was declared as to the words “to be at the disposal of my wife * * * to whom she shall think fit to give the same,” in Robinson v. Dusgale, 2 Vern. *182. The rule thus early declared in England has been followed in this state, and a gift “ to my beloved wife” of “ one-third of all my estate * * * for to dispose of as she may see proper,” was held, in Downey v. Borden, ubi supra, to be an indeterminate devise of the third and the power of disposition to be unlimited ; so that a fee vested in the wife, though the power was not exercised and she died intestate, and the fee-simple estate of her heirs therein by descent from her, was sustained. In McClellan v. Larchar, ubi supra, there was given “ full power to alienate, convert or dispose of the same in such manner as she may deem best,” and it was held to be an unrestricted po wer and to vest a fee.

In the case in hand the testator, Nicholas Fabian-, farther shows his intent to give his wife unlimited power to make an absolute disposition of the property, for he predicates the first limitation over upon the condition that his wife should continue in the use, occupation and ownership of the said house and lot &c. until her death, thus showing that he recognized the possibility that by- the exercise of the unlimited power he had previously in his will given her she might, before her death, have ceased to be the owner.

I think the true construction of Nicholas Fabian’s will must be that the general devise to. Elizabeth shall be considered, with the unlimited power given her to dispose of the property, to have vested in her a fee-simple estate in the mortgaged premises; that the limitations over to the children of Nicholas of the house &e. and of the rents are void, because inconsistent with the devise to Elizabeth, under the doctrine fully stated in the cases above cited; that both the complainant’s mortgages are therefore valid liens upon a fee-simple estate in the mortgaged premises; that the defendant Peter Fabian took no estate under the will of Nicholas Fabian because the limitation over to Peter and Nicholas’ other children was void, being inconsistent with the devise in fee to Elizabeth, and Peter took nothing as heir of Nicholas because Nicholas had by his will devised his whole estate to Elizabeth, but on the death of his mother (Elizabeth) Peter did take, by descent from her, an undivided one-third part of her fee-simple estate in the mortgaged premises, subject to the complainant’s two mortgages and also subject to the exercise of the power of sale created in Elizabeth’s will.

The estate of Elizabeth, the mortgagor, being shown to have been a fee-simple at the time of making the complainant’s mortgages, it is of no significance whether she had, under the power to “ dispose of the said house ” &c. “ as she may think proper,” given her by Nicholas’ will, authority to make a valid mortgage on the premises, considering that authority to have been merely a power and not effective to define the estate given.

It was argued that this was but a power to sell, and that a power to sell did not necessarily give a power to mortgage, and that iu this case the will of Nicholas could not be construed to give the latter power.

If the question arose in the case, I should hesitate to hold that a power to dispose of property as the donee may think proper, with no direction as to any disposition to be made of the proceeds arising from such disposal, is limited in its exercise to the making of a sale only. The donor authorizes a disposition to be made of the land; he does not limit the mode in which the power may be exercised nor the extent of the estate which may be created under it; and if the donee does unlimitedly exercise the power so that she ceases to be the owner of the property thereby, the testator gives to no one the right to call upon her or her estate to account for the .proceeds.

By the authorization to the donee to dispose of the property “ as she may think proper,” it may be forcefully claimed that the donor of the power referred the selection of the mode of disposal, whether by sale, mortgage, lease or otherwise, to the discretion of the donee, and that the making of the complainant’s mortgages by the donee was thought by her to be a proper exercise of the power of disposition.

I do not consider it to be necessary to determine this point, inasmuch as the weight of authority seems to settle the primary question in favor of the complainant.

I will advise a decree in favor of the complainant in accordance with the views above expressed.