87 S.E. 502 | N.C. | 1916
After stating the case: The levy of the sheriff was not upon personalty, but upon land, as realty; so that if he could have levied upon it as personalty, he did not do so. In order for such a levy to be validly made the personalty must be taken into the sheriff's possession or placed under his control. Gilkey v. Dickerson,
It is said in 9 Cyc., at p. 852, that "Where a testator directs his executor to sell his land and divide the proceeds among designated legatees, it is well settled that such legatees have no estate in the land which is the subject of lien or execution, and that an obvious (612) result of conversion is the right of the beneficiary to deal with the property as in its changed form before such change has been actually affected." It may be asked, If this be so, what is the creditor's remedy? It is as fully decided as the other proposition. Conversion is *693
altogether a doctrine of equity; in law it has no being, and it is admitted only for the accomplishment of equitable results, and, of necessity, it must be limited to its end. Foster's Appeal,
Before leaving this part of the case, we will again emphasize the fact that the sheriff has not attempted to levy upon this property, as personalty, and he could not do so, for such a thing is physically impossible, it not being anything that he can seize and take into his possession or bring under his control; but he has levied only on the land itself, when the judgment debtor plainly has no interest therein, for he takes not that under the will, but the proceeds of its sale. As to the lien of the creditor, it does not exist under the judgment, as there was no land for it to rest upon, but by filing his bill in equity (now his complaint in a civil action), the judgment creditor acquires what is equivalent to a lien as against other creditors from the date thereof, it being regarded and treated as in the nature of an equitable fi. fa., which gives priority or preference to the suing creditor and prevents the debtor from defeating, by a conveyance, the object of the suit. Dixon v. Dixon,
Having disposed of these preliminary matters, the way has been cleared for an approach to the remaining and pivotal question in the case, which we will now consider, viz., Whether there has been a conversion of the land into personalty by this will.
Equitable conversion is a change of property from real into personal, or from personal into real, not actually taking place, but presumed to exist only by construction or intendment of equity. "Nothing," it has been said, "is better established than this principle, that money directed to be employed in the purchase of land, and land directed to be sold and turned into money, are to be considered as that species of property into which they are directed to be converted, and this in whatever (614) manner the direction is given, whether by will or by way of contract, marriage articles, settlement, or otherwise; and whether *695 the money is actually deposited or only covenanted to be paid, whether the land is actually conveyed or only agreed to be coveyed [conveyed], the owner of the fund, or the contracting parties, may make land money or money land. . . . By this and similar declarations the judges do not mean to assert a solemn piece of legal juggling without any foundation of common sense, but simply to lay down the practical doctrine that for certain purposes of devolution and transfer, and in order that the rights of parties may be enforced and preserved, it is sometimes necessary to regard property as subject to the rules applicable to it in its changed and not in its original state, although the change may not have actually taken place." Bispham's Equity (6 Ed.), sec. 307. Conversion may arise not only under a trust in a will, but also under settlements and other instruments intervivos, as we have seen. In order to effect a conversion, it may be stated generally, that in a trust the direction to convert must be imperative, and in a contract the agreement must be binding. In the case of a trust created by will or otherwise the duty to convert must be mandatory and not left merely to the option or discretion of the executor or trustee, and this imperative quality may be impressed upon the trust either expressly or by the use of direct words of command, or impliedly or indirectly by a disposition of the property on such limitations as necessitate a change in character of it. "If a testator devises land to be sold, or orders or directs that the same shall be sold, it is obvious that it is the imperative duty of the trustees to make the sale. They have no discretion in the matter. They are simply to turn the real estate into personalty and to apply the money thus realized to the purpose designated in the will. This is the plainest case of conversion." Bispham's Equity, p. 426.
So it is said that the doctrine of conversion is not confined to those testamentary dispositions only in which imperative words are used, or wherein limitations which can only be effectuated by a conversion exist. It is to be applied to all those cases in which a general intention of the testator is sufficiently manifested to give the property to the donee in a condition different from that in which it exists at the time when the will goes into effect. A mere testamentary power of sale, vested in executors to sell real estate, will not work a conversion; but if to the power there is added a direction, a conversion will be effected. There must be an intent to convert, either express or implied. The question always is, Did the testator intend to give money or to give land, and has that intention been sufficiently expressed? Once arrive at the intention, by proper rules of interpretation, and the property will then be considered as impressed with that character which the testator designed it should have when it reached the hands of the beneficiary. While a discretion in the trustees as to whether a sale shall or shall not take (615) *696
place will of course prevent a conversion, yet a mere discretion as to thetime or manner of sale will not hinder a conversion. Bispham's Equity, p. 426, sec. 312. Benbow v. Moore,
The correlative doctrine of reconversion is well understood to be the imaginary process by which a prior constructive conversion is annulled and taken away, and the property restored, in contemplation of equity, to its original actual quality, or where the direction to convert is revoked by act of law, or by the parties entitled to the property, which they may elect to do (Snell's Equity, 160), but where there are several beneficiaries they must all, as a general rule, unite in the election in order to make it effectual. Bispham, sec. 323; Holloway v. Radcliffe, 23 Beav., 163; Beatty v. Byers,
Reconversion sometimes takes place by operation of law. This occurs when a fund directed or covenanted to be laid out in real estate comes into the hands of the person for whose benefit the purchase is to be made, and in whom the entire right is vested, and he dies without making any declaration of his intention. The fund is then said to be "at home," and "being in the hands of one without any other use, but for himself, it will be money, and the heir cannot claim."
There is some analogy between the equity of a creditor to subject the interest of his debtor who is entitled to a part of the proceeds of sale in the case of a conversion and that of a creditor to enforce his claim against a debtor having only a "right in equity," in respect of land, instead of an equitable interest or estate therein, as in Nelson v. Hughes,
The will in this case gives a life estate in the land to the mother, and an estate, by way of remainder, to the children and grandchildren after her death, when it is to be sold and the money divided as directed. Under this provision of the will the conversion will not take place until the life estate has been determined by the death of Mrs. Clifton. The creditor of one of the legatees is as much bound by the terms of the will as the legatee would be had there been no debt, and can only subject to the payment of his claims the interest of his debtor. They both must take, if at all, per forman doni (according to the form of the gift), and the mere fact that one of the beneficiaries has become indebted does not alter the rights of the parties under the will. As the testator directed a sale of the land after the death of his widow, the equitable conversion of the land into money will take place at that time. "When there is an imperative direction to sell, unless the conversion is expressly directed to be made at a specific time in the future, or upon the happening of *698
some particular event, the conversion takes place as from the (617) death of the testator. 9 Cyc., 839. In this case the time for the conversion to take place is distinctly specified, viz., at the death of the widow, which is sure to happen sooner or later, and the conversion will therefore take place only at that time. It is said in 9 Cyc., 838, that there is some conflict upon this question between the cases, but this Court is placed among those which have adopted the rule stated above.Brothers v. Cartwright,
But if the conversion took place from the testator's death, according to the majority rule, we think there would be no practical difference in this case, for the sale, under the direction of the will, could not be made until the time for it as fixed by the will had arrived. In the meantime the naked legal title is vested in the devisees named, as it would have been in the heirs by descent if there had been no devise to them. Ferebee v.Proctor,
It is not an interest in land which is subject to sale under the provisions of our statute. Revisal, secs. 629 and 630. The heir or devisee has but the naked legal title, and no beneficial interest in the land out of which his creditor could realize anything, and it would be vain and idle to sell it, and for that reason our statute does not provide for its sale. The heir or devisee does not hold the land in trust for the party entitled to the proceeds of sale under the direction for conversion, in the sense that the latter has any equitable estate in the land which would have a salable value, but the legal title is left in the devisee or heir, as it cannot be suspended until the conversion takes place, when *699 it automatically passes to the purchaser at the sale. This being so, the creditor of a party entitled to the proceeds of sale, or a part thereof, cannot levy or sell the land, as land, as his debtor has (618) no beneficial interest therein, because he takes it as personalty, nor can he now proceed in equity, nor until the conversion takes place at the death of the tenant for life, according to the will of the testator and the form of the gift. If the conversion had taken place as from the death of the testator, according to the majority rule, the actual conversion by a sale of the land could not have been made until after the death of the widow, as that is the time fixed by the will for the land to be sold. The testator had the right to annex any lawful condition to his gift and to prescribe the manner and time of its enjoyment.
The result is that the court erred in its judgment directing a sale of the land by the sheriff. His levy, sale, and deed to the purchaser are all void and of no effect, and will be so declared, and further, the deed will be set aside and properly canceled, so as to remove any cloud from the title and to untrammel the regular conversion of the land as directed in the will. It will be further declared that the defendant A. L. Owens is not now entitled to have a sale of the land for the purpose of its conversion into money under the will, and the subjection of plaintiff's share thereof to his claim, but this will be done without prejudice to his right to proceed hereafter, and at the proper time, to enforce his equity. There was error in the judgment of the court.
Reversed.
Cited: Broadhurst v. Mewborn,