Griswold v. Perry

7 Lans. 98 | N.Y. Sup. Ct. | 1872

Mullin, P. J.

It is not necessary for us to determine whether the executors of the will of John Eastland took a fee by implication under said will in the land devised thereby, or whether they were clothed with a mere power in trust to sell said lands in the event the income therefrom was not sufficient to support the testator and his daughters, Elizabeth and Nancy, as in either case they had power to sell any part of the land described in the will only in the event the income proved insufficient for the support of said persons.

There is great hardship in requiring a liona fide purchaser for value, in order to establish a valid title to land purchased of a trustee who is authorized to convey, on the happening of some future event, to prove that such event had occurred when its occurrence is asserted by the trustee, who alone can know whether it has or has not in fact occurred. But the point seems to be too well and too long established to be considered open to discussion.

In Hill on Trustees, 478, it is said a power of sale, like all other powers, can be exercised only in the mode and subject to the conditions, if any, prescribed by the instrument creating the power. Therefore, when the trust is to sell after the death of the tenant for life, a sale in his lifetime will be bad, even though made under a decree of the court. Upon the same principle, when the power of sale is to be exercised only on some conditional event, such as the deficiency of another estate to answer certain charges, or upon the purchase and settlement of another estate to the same uses, the power cannot be exercised without the literal performance of these conditions.

As regards purchasers from trustees, under powers of this description, there is a material difference whether the conditions annexed to the exercise of the power is precedent or subsequent. If precedent, its performance is essential for giving existence to the power of sale, and no sale under the power can by possibility be maintained, unless the condition be performed. But when the condition is subsequent, the power of sale.will attach independently of the performance of the condition. This distinction between conditions precedent and subsequent is recognized in Tiffany & Bullard on Trustees, 767.

In Richardson v. Sharpe (29 Barb., 222) a sale by executors of real estate was held void, made eight years after the testator’s death, that the will required to be sold within seven years after that event.

In Briggs v. Bavis (20 N. Y., 15), fifteen trustees, holding lands in trust for creditors, reconveyed them to the grantor by deed, which recited that the trust had been executed, when, in fact, there were cestuis que trust entitled to a sale and distribution of the proceeds, and the debtor, after such conveyance, mortgaged the same to one having constructive but not actual notice of the trust and reconveyance, it was held that the mortgagee took subject to the trust. It was said that the purchaser takes no benefit from the recitals in the deed to him that the debts had been paid, but he must ascertain, at his peril, that such is the fact. The reconveyance being contravention of the trust is absolutely void, and the legal estate remained in the trustees. (See, also, Allen v. De Witt, 3 Coms., 276; Cleveland v. Boerum, 27 Barb., 252; Rosehoom v. Mosher, 2 Den., 61; Barber v. Cary, 11 N. Y., 397.)

When the condition is subsequent, such as the application of the proceeds of the sale of land to the payment of debts, the purchaser is by section 85 of 3 R. S., 5th ed., p. 22,-relieved from any obligation to see to the application of the proceeds to such use; and in other cases he is not responsible for the misconduct of the trustee, unless he is colluding with him to defraud the person entitled to the benefit of the proceeds or some part thereof.

The condition-in this case was a condition precedent; and if the cases cited are law, the sale by the executors, under which the overseers claim, is utterly void. The evidence offered by the defendants was properly rejected.

By the will the whole income of' the farm was required to be applied to the support of three of the persons entitled to be supported under the will.

If it was sufficient for the support of three of them, it was surely sufficient for the support of one of them, with a surplus over. From this surplus charges for taking care of the property could properly be paid. But the executors were not required to wait until the beneficiaries were dead in order to apply sufficient of the yearly income to pay such expenses. But before they could justify a sale of the lands to make good a deficiency thus created, it was necessary for them to state an account and show that such deficiency did in fact exist.

The offer does not go that length. The facts proposed to be proved would show that some $250 had been paid out by them ; but how much surplus of income there was to' apply toward it, is not shown or offered to be shown.

It seems to me that it was the duty of the executors to proceed against the oestuis que trust for a settlement of their account before they could assume.to act, on the ground that the income was insufficient to the support of either or all of the beneficiaries.

In dealing with the real estate the executors were not acting as executors but as trustees, and for that reason the surrogate rightly refused to settle their account relating to the real estate.

If the foregoing views are correct, the right of the trustees to be paid their expenses incurred in the preservation of the property is not lost, but may be adjusted in the distribution of the proceeds of the sale amongst the persons entitled.

The judgment of the referee must be affirmed with costs.

Judgment affirmed.