Cruikshank v. Parker

51 N.J. Eq. 21 | New York Court of Chancery | 1893

The Chancellor.

I considered this will in the case of Story v. Palmer, 1 Dick. Ch. Rep. 1. The questions of construction there presented concerned the division of the estate among the children of Mr. Story, and I decided that the testator’s express direction to sell did not imperatively require a conversion of his real estate into money, but that, taken with the additional direction to divide, and also with other expressions of the will, it manifested an intention that the executors, in apportioning four equal shares of the residue of the testator’s estate, were to act upon the several parcels of land and personalty and divide or sell them, respectively, as in their judgment should appear proper.

Now, the further question arises, whether, after the executors shall have made the division of the estate into four shares, and shall have taken the share apportioned for Emily L. Paret in separate trust as the will contemplates, they have yet remaining power to sell the several parcels of land of which that share is partially constituted.

It is observed that the testator contemplated two trusts — -first, a trust to divide his residuary estate into four equal portions, from one of which the sum of $49,539.28 maybe deducted; and, second, after the transference of three of those portions and .$49,539.28 of the fourth share to beneficiaries, the retention of the remainder of the last-mentioned share, during the life of one of his daughters, in such manner that the daughter shall have the income while she lives and her issue shall have the corpus at lier death.

As I have formerly decided, the express direction to sell is mot imperative, but stands as a power by means of which the ■intended division of the residuary estate may be accomplished. ‘That it is intended for use in and is applicable to the first trust only, I think is manifested in the sixth paragraph of the will, <by which provision is made for the preservation and protection ■of the estate “ until sale or division thereof ” and “ until such -sale or division.” There, it is observed, both powers — to sell .and to divide — are treated as relating to the creation of the four .shares, impliedly excluding their further application.

It is especially worthy of note that to make those four shares ■the executors were equipped with the double power to sell and to divide, so that it became with them feasible and a matter of wise discretion, in view of the second trust, to determine of what kinds of property the several shares, and particularly the share ■of Mrs. Paret, should consist — whether the shares should be constituted by the mere division of the parcels of the testator’s •estate in kind, real or personal, as he left it, or by division after partial sale, or of money after complete conversion of the estate into cash.

Did the testator intend that after the executors had exercised ■their discretion in creating the share of Mrs. Paret and setting it apart in trust, they should yet possess power to sell the real -estate of which it might be partially constituted ?

If such a power exists, I think it must be found by implication from the language which creates the second trust. It is not expressly given. The concise statement of the rule touching •such implication, by Chief-Justice Shaw, in Going v. Emery, 16 Pick. 107, 112, was approved in the opinion of the court of -errors and appeals of this state, written by Mr. Justice Depue, an Lindley v. O'Reilly, 21 Vroom 649. It is this: “ If a testator having a right to dispose of his real estate, directs. that should be done by his executor which necessarily implies that the estate is first to be sold, a power is given by this implication to the executor to make such sale and execute the requisite deed of conveyance.”

The application of this rule is illustrated in the case of Haggerty v. Lanterman, 3 Stew. Eq. 37, where the direction was that the testator’s entire estate should be divided into seven" shares, and that two of those shares should be invested for the use of two of the testator’s daughters, to which direction, after the appointment of an executor, this language was added: “ My will and wish is to consult the heirs, whether it will be best to sell it or otherwise — the homestead property.” In that case it was clear that the testator intended that the w'hole of the shares set apart to the two daughters was to be invested, and, as a necessary consequence, that those shares should be first reduced,, by sale, to money, which could be invested, and, under the additional clause, that he had in mind that there would be a sale to-accomplish the division he intended, for he manifests his purpose by the use of the word “ sell,” when he leaves it to his-children to determine whether the homestead shall be parted with. And in Belcher v. Belcher, 11 Stew. Eq. 126, where property was given to executors in trust to be equally divided among the testator’s children, with a direction to “ pay ” the-sons their shares and to retain the daughters’ shares and “ pay the daughters the income thereof for life, it was decided that the-directions to “ pay ” the sons’ shares necessarily implied a direction to convert them into money — that which could be paid— and that the direction to “ pay ” the income of the daughters’" shares implied a direction to invest, which involves the necessity of converting the land into money. And so, also, in Naar v. Naar, 14 Stew. Eq. 88, the gift of all the decedent’s interest in all the real and personal property of a partnership of which he-was a member, in trust, “ to invest as fast as realized,” was held to imply a trust to convert to money, and, therefore, necessarily to sell.

Returning to the will considered, it is found that the second, trust is created in the fifth paragraph, in this language:

“And hold, retain, invest and keep invested the share of my daughter Emily L. Paret, and collect and receive and pay or apply the rents interest and income arising therefrom to the use of my said daughter during her life.”

The expressed object of the second codicil of the will is to make certain the amount to be deducted from the trust share. After it accomplishes that purpose it restates the trust for Mrs. Paret, in these words:

“Shall be held and invested and kept invested during her life by my -executors and trustees, who shall collect and pay or apply the interest and income thereof to the use of my daughter Emily sp long as she shall live, and if she be not living or on her death that my executors and trustees convey, pay and assign said residue of such share to her issue absolutely.”

Upon this language it is argued, under the rule I have stated, that implied power to sell is to be found in Mr. Story’s direction to “ invest and keep invested,” because only money is invested, and sale is necessary to convert real estate into money.

The objection to that argument is, that it assumes that the direction to invest applies to the entire share of Mrs. Paret, and not merely to that part of it which already is, or by the maturing of existing securities may become, money, and this objection ■resolves the vital question in the present inquiry to this: Does the direction to invest extend to the entire share of Mrs. Paret ?

As the trust is stated in the fifth paragraph of the will, the executors are not only to retain that share, but are also to hold it and invest it, taking from it, not interest alone, the product of investment, but also rents, the product of real estate, and income which may arise from any species of property. It is impossible to say, from such language, that investment of the entire share was contemplated. I think that it much more clearly appears that the testator intended that the trustees should hold the realty, taking its rents, and invest the personalty, receiving its interest. Such an interpretation of his intention is certainly more easily reconciled with his language. And such interpretation does not appear to be defeated by the codicil. That instrument was not made to declare another and different trust. Its object was expressly declared to be the purpose which I have .already indicated. It merely restated the trust which the fifth paragraph had previously declared. I do not overlook the circumstance that in such restatement the word retain is dropped, and for that reason room is given for contention that the word hold was originally used in the sense of retain and not to characterize any species of property, and that the word rents is like** wise omitted, affording a loop-hole for argument that the testator wished to exclude the idea of retained realty. The answer to •such contentions is, that their strength must rest in the hypothesis that the words referred to were intentionally dropped, and ¡not in the fact that they are merely absent, for the language which remains is entirely consistent with the retention of the whole share in the several species of property of which it originally consists, for the word ineome is comprehensive enough to include rents, and the last direction of the codicil defeats the (hypothesis by the language of its provision, that when Mrs. Paret shall die the trustees are to “ convey, pay and assign.” They are to convey realty, pay money and assign securities. All ■species of property are thus in contemplation.

I think that the direction to invest is not intended to be applied to more of Mrs. Paret’s share than is already investible and invested, and hence that, as obedience to it does not involve the necessity of sale, the direction does not imply the power to sell.

But if I am wrong in my conclusion, I apprehend that the objection that the trustees are without power of sale is at least a serious one, which rises above mere speculation, theory and possibility, and hence so fairly stands in the way of free alienation •of the land in question, that that land should not be forced upon the defendant, especially as neither Mrs. Paret nor her issue are parties to this proceeding to be bound by the decree I may make. The case is one in which specific performance should not be decreed. Paulmier v. Howland, 4 Dick. Ch. Rep. 364, 372.

I will sustain the demurrer.