4 Del. Ch. 72 | New York Court of Chancery | 1871
The first question arising in this case is whether the will of Lydia A. McKegney touching the lot, the proceeds of which are the subject of controversy, was a valid execution of the power reserved to her under the deed of Dec. 30th, 1858. It is objected that this disposal of the lot is unwarranted by the power in two particulars—-1st, in creating a trust, whereas the power was to appoint the legal estate, and 2nd, in directing a sale of the premises, whereas the power was to appoint an estate in the land. I am of opinion, however, that in both of these particulars the will is quite within the scope of the power conferred.
In the first place it is to be presumed that a power given to dispose of property by will is intended to be exercised according to the nature of that kind of instrument, and includes ex vi termini any and all modes of disposal which a will is competent to make, except so far as the power of appointing by will is qualified or restricted in the instrument creating it. When therefore the question arises, as here, whether a power to appoint land by will, may be executed by directing a conveyance of the legal estate, not absolutely, but subject to a new trust, or by directing a conversion of the land and a distribution of the proceeds among the appointees instead of the conveyance of it to them,—inasmuch as these are such modes of disposal as may be ‘ made by will,’—we must look into the original instrument,to see whether the power reserved to Mrs. Brown to dispose of these premises by will, is qualified in these particulars, either by the terms in which it was created or by implication from those terms. .We turn then to that clause of the deed which reserves this power. It directs that, after Mrs. Brown’s decease,the trustee shall convey the said premises to “ such person or person, and “for such estate and estates and interest” as she the said Lydia Ann Brown should by her last will and testament &c. “order, direct, limit, and appoint.” These words point
The other objection was that the power reserved, being to appoint estates in the land, did not authorize a direction for the sale of it and a distribution of the proceeds. But the contrary of this has been fully settled by authority.
First is the early case of Roberts vs. Dixwell, 2 Eq. Cas. Abr. 668. The question was whether a father, having a power “to appoint and divide" an estate among younger children, could exercise the power by charging on the estate a gross sum in favor of the only younger child. Lord Hardwicke treats it as unquestionable and admitted in the case, that “ the father might have appointed part of the estate to be sold and the money raised by such sale, and hence concludes that he might raise the money as well by a charge. This case is a high authority for the principle that a power to appoint the land may be executed otherwise than by limiting the lands itself to the appointees, with Lord Hardwicke’s opinion that such a power might be executed by a conversion and distribution of proceeds.
Next is Long vs. Long, 5 Ves. 445, in which Lord Loughborough decided that a power to sell an estate need not be expressly given ; and he went so far as to raise such a power, by implication, from a power given to charge the estate in the hands of the eldest son for the benefit of younger children. That was a stronger case against the sale than the present one; for it was argued with much force that the estate was intended to remain in the eldest son subject to the charge. But it was held, that, as the father might have charged the estate to its full value, he had done only what was equivalent to that. That seems to be going a great way.
The point was very fully examined and all the cases reviewed, both in the argument of counsel and in the opinion of Sir William Grant.
The decision was that “a power to give includes a “ power to sell, for the purpose of giving the money instead “ of the land,” and the devise in trust to sell was held a valid execution of the power to appoint the land. The great principle of all the cases is, that in construing powers, the Court looks to the end and design of the parties and the substantial, rather than the literal execution of them. 5 Ves. 445. In Sumner & Perkins' Ed’n. of Ves. Jr. 6th Vol. 448 note (B). there are cited, from Sugden on Powers (4th Edition), some objections to the decision in Long vs. Long, as to the unlimited power to charge to any value, but in the 6th Edition, p. 553, (15 Law Lib.,) these objections are retracted by Sugden and he expresses his entire acquiescence in Long vs. Long on that point. 4 Kent Com. 344-5.
Taking then the will of Mrs. McKegney to be a valid execution of the power, we proceed to the'question raised under the will, that is, what becomes of that portion of the proceeds of sale bequeathed to Mr. Enos R. Barr, that bequest being void in consequence of Barr’s decease prior to the date of the will. Does this legacy sink into the residue of the fund for the benefit of Mr. Reilly, or does it pass to Mrs. McKegney’s next of kin as undisposed of personalty, or does it result to her heir at law, the power to that extent being treated as unexecuted ?
In the case of a will made in execution of a power, it results to the party entitled to take the land under the instrument creating the power in default of a due execution of the power. In this case the parties so entitled are the heirs at law of Mrs. McKegney, by way of resulting trust to her, as the grantor in the deed, there being no express limitation over in default of the execution of the power. The ground of the rule is, that, this being a distribution of a specific fund among several objects, what is given as a residue in terms is construed as a gift of such sum only as shall remain after deducting the amounts before given ; as, if out of the proceeds of real estate directed to be sold, one thousand dollars were bequeathed to A. and the residue to B. the gift to B. is only of so much of the purchase money as remains after deducting $1000. B. taking
The rule as thus stated has been applied in a great variety of cases: and it does not seem to matter through what cause the attempted disposal of part of the fund failed, whether from the testator’s failure to designate an object to take a portion of the fund, or from the gift being illegal or void, or whether from lapse. This rule in the breadth of its application in favor of the heir is most fully stated and illustrated in Leigh & Dalzell on Conversion (5 Law Lib.) p.p. (93) and (106), a book accepted as the best authority on this subject. On p. (93) the general rule is thus stated :—
“ Where a testator means with regard to a particular “ purpose to convert his real estate into personal, if that “ purpose cannot be served, the Court will not infer an in“tention to convert the estate for any other purpose not “ expressed, it being a rule in equity, that, where real estate “ is directed to be converted into personal for a purpose “expressed, which purpose fails, either wholly or partially,
“ Hence, whenever for any specific or general purpose “ contained in a will, land is thereby directed to be con- “ verted into money and the intention of such conversion is “ either wholly or partially disappointed, whether by silence “ or inefficacy of the will or by lapse in the testator's life-time, “the consequence will be a resulting trust for the heir at “ law of so much of the produce as is inapplicable from any “ of the preceding causes to effectuate the testator’s purpose; “for as the reason of the purpose has ceased, the purpose “ itself should be taken to have ceased.” The authors then proceed to consider the rule as applied to the several caues of failure to effectuate, in whole or in part, the testator’s object in the conversion, among which causes, the one which concerns the present case is the one treated of on p. (106) where, after having shown the rule to be applicable in favor of the heir in the case of a failure of the testator’s purpose, from the silence of the will as who should take, they say;—“ It must be equally clear, that, “where the particular purpose fails from inefficacy, the residuary legatee will not be entitled to it, but this surplus “ must also result to the heir at law. As where a testator “devised lands to be sold and part of the money arising “by the sale to go to a charitable purpose and the resi- “ due of the money was given over, it appearing that the “ devise to the charity was void the produce to be applied “ to it was not considered as forming part of the residuary “ estate, but resulted to the heir.” Again, on p. (103,) the authors more distinctly state the doctrine of a resulting trust in favor of the heir, under a qualified conversion, as being wholly unaffected by the consideration that the claim against him is by a residuary legatee. After stating
The doctrine, thus stated, is fully supported and illustrated by the course of decisions upon the effect of qualified conversions.
The first case in which the doctrine came to be very fully discussed and considered was in 1790, Hutcheson vs. Hammond, 3 Bro. C. C. 128-148. Under a will made by a feme covert, in execution of a power, lands were devised to be sold and the proceeds invested for her husband during his life, and after certain sums were to be paid out of the principal, including ^1000 to one Grace Parker, then in trust to pay all the residue of said principal money “ together with the interest, or dividends, which might be “due thereon,” unto, &c. Grace Parker dying in the lifetime of the testatrix, and the legacy of ^1000 to her out of the proceeds having lapsed, it was held, first, by Mr. Justice Buller sitting for Lord Thurlow, and, afterwards, on a rehearing by the Lord Chancellor himself, that the lapsed sum descended, as lands, to the heir. The doctrine thus established was never considered as confined to the
In several cases the rule was applied to bequests made to charitable'uses, void under the statutes of mortmain.
An early case of this class was Gravenor vs. Hallum, Ambler 643, in 1767, before Lord Camden, where, under a devise of lands to be sold, part of the money arising by sale was bequeathed to charitable uses,and the residue of the money to be raised was given over. It was held, that, the gift to charitable uses being void,' that portion of the money should result to the heir and not pass to the residuary legatees. In a similar case before Sir William Grant, Gibbs vs. Rumsey, 2 V. & B. 293, in 1813, he treated the point as too clear for any discussion.
A still later case of this class was Jones vs. Mitchell, 1 Sim. & Stu. 290, in 1823, where lands were devised to be sold and, out of the proceeds, certain legacies to be paid, including ¿6800, for certain charities, “and all the “ rest, residue and remainder of the monies to arise from “the sale of the real estate unto I. R. for his own use “and benefit.” This was a case of a void bequest as to the £800, and is closely analogous to the present one.
Sir John Leach thus states and applies the rule ;— “ The will, as to personal estate, speaks at the time of the “death of the testator and the residuary legatee takes, “not only what is undisposed of by the expressions of “the will, but that which becomes undisposed of by dis
The case of Tregonwell vs. Sydenham, 3 Dow's P. C. 194, in the House of Lords, applied the established doctrine, of a resulting trust in favor of the heir at law against a residuary devisee, to the case of a void disposal, in part, of the produce of real estate. That was the case of a portion carved out of a trust term for purposes which were void in law. The House of Lords held, the opinions being delivered by Lord Redesdale and Lord Eldon, that the portion ineffectually disposed of did not go to the devisee of the residue of the estate, but was to be raised for the benefit of the heir as an interest in real estate resulting to him by the failure of the specific devise thereof.
The latest English case on this point is Amphlett, vs. Parke, 2 Russ. & M. 221, in' which legacies given of the produce of real estate had lapsed. Lord Brougham, upon a most elaborate examination of the whole subject', held the doctrine of a resulting trust very strongly in favor of the heir at law against a residuary legatee. That decision was in 1831 and was the last decision of this series prior to the passage of the Act of 1 Viet, which disposed of the whole subject by providing that in all cases, where a contrary intent does not appear lapsed, or void legacies shall pass to the residuary legatee.
There is a case, which perhaps should receive notice here, cited in 1 Jarman on Wills 575, as having diverged from this course of decisions we have been reviewing. It
The case was this;—A testator had directed the produce of certain real estate, devised in trust for sale, to be applied by the trustees for the payment of certain debts, and also to pay out of the proceeds £5000 to his widow, in part satisfaction of £10,000, which had been secured to her by marriage settlement. There was also a small legacy beside to be paid out of the produce. The residue of the produce was directed to be invested for the benefit of two families. The widow died in the testator’s lifetime, whereby the legacy to her lapsed. The Court held that the ¿65000 bequeathed to the widow did not result to the heir but that the legatees over took the whole fund discharged of this legacy, as also of such debts as the personal estate was adequate to pay. The Court proceeded upon the distinction, quite well defined, between a devise of distinct portions of a fund to different persons, with a residue or surplus over, and a devise of the whole to one, charged with the payment of debts or legacies, in which latter case, if the charge fails, the effect is simply to' discharge the estate or fund devised and the whole passes as' though no charge had been originally created. The case was expressly put upon that ground, and it does not appear to me to be a departure from the principle of the cases before reviewed, upon the doctrine of resulting trusts, although, in Jarman, it is so treated and on that account made the subject of severe criticism.
On a question of this .nature, in the absence of any statute of our own, the proper and safest guide for our courts is the settled course of decision in England prior
Our case is free from one question which embarrassed some of the cases before cited and which, in fact, was the question chiefly discussed in most of them ; that was, what expressions in a will are sufficient, so to blend the proceeds of real estate with the general personal estate, as to effect a conversion out and out, subjecting the mixed fund to the rules applicable to personal estate, and so carrying all that undisposed of, under the residuary clause, to the exclusion of the heir. In some of this series of cases there were strong circumstances indicative of such an intent, particularly in Collins vs. Wakeman, Gibbs, vs. Rumsey, and Amphlett vs. Parke; yet the result of these, and of the cases at large touching the rights of the heir in the proceeds of real estate, not effectually disposed of, is, that not even a direction in the will that the proceeds shall be deemed part of the personal, nor their being in terms blended with the personal estate, if they still remain distinguishable, shall take from the heir any portion of the proceeds, ineffectually bequeathed in favor of the residuary legatee, or of the next of kin (when the question is between them and the heir), but, to have this effect, the proceeds must expressly or by necessary implication be made personal estate to all intents and purposes.
We see then how far within the limit of adjudged cases, in favor of the heir at law, the present case stnads. For under this will there is no blending of the land with any personal estate of the testatrix ; nor could there be, for, this being the will of a married woman, it operates. only as an execution of the power and can pass only the land or its proceeds, nothing else—nothing whatever as the estate of the testatrix. Hence as we may observe by reading the paper in question the proceeds of sale are disposed of in terms as purchase money; “the purchase “ money to be received by the said Patrick Reilly and to. “ be applied by him, &c.” What is spoken of as the residuary clause is not a disposal of any residue of personal estate of the testatrix, but merely a gift of the surplus of the purchase money, as such, after deducting the legacies of ascertained amounts. The words are, “and what “ remains of the said purchase money after the foregoing “payments, &c., is to be retained by the said Patrick “ Reilly.” It would be difficult to put a clearer case of qualified cbnversion. It is precisely like Hutcheson vs. Hammond, cited from 3d Brown, which was the case of a will made in the execution of a power, directing the lands to be sold by trustees, and the proceeds applied, first, to sundry legacies, “ then in trust to pay all the residue of “ said principal money, &c.” Perhaps no case was ever more thoroughly argued and considered than that case, and the conclusion reached was strongly in favor of the heir.
The chief reliance of the defendant was upon Ferguson's lessee, vs. Hedges, 1 Harring. 524. There, our Superior Court held that the general residuary clause of a will
This decision is .contrary to the strong weight of authority, both English and American, 4 Kent Com, (542) note.
It will be seen then that in cases of qualified conversion such as this is, the question in whose favor the testamentary intent is to be presumed as to the undisposed of proceeds does not arise, as it was held to do in Ferguson's lessee vs. Hedges, where there was not a qualified conversion, but an attempted absolute devise in specie.
Now, without here questioning the decision in Ferguson’s lessee vs. Hedges, as applied to the case then before the Court, it cannot be supposed that that Court, in adopting a rule for the construction of the general residuary clause of a will, intended to overturn the unquestioned rule applicable to the distribution of a particular fund, under a will or power;—or that, in holding the presumption to be in favor of a residuary devise and against the heir, as to land attempted to be absolutely devised away in specie from the heir, the Court meant to overturn the long established doctrine of a resulting trust to the heir under a qualified conversion of real estate. On the contrary the right of the heir, by way of a"resulting trust to the undisposed of proceeds of real estate under a qualified
The conclusion is that so much of the proceeds of the lot sold under Mrs. McKegney’s will as would have been taken by Rnos H. Barr, if living, does not pass with the residue of the fund to Mr. Reilly. Nor, for reasons before
A final decree ought not to be entered until an administrator’s account has been passed, ascertaining what is the net balance in the administrator’s hands, applicable to the legacy, and whether the whole amount of the $3,000 bequeathed to Enos H. Barr, with interest, from one year after the death of the testatrix will remain, or whether the expenses connected with the settlement of the estate, will require any abatement from the legacies. It does not seem probable that any abatement will be required, as the proceeds of the land coming to the administrator’s hands greatly exceeds the legacies, still, the result ought to be ascertained by the proper proceeding, to warrant a decree disposing of the money bequeathed to Barr.
The present decree therefore will be an interlocutory one, directing that the administrator, on or before the ensuing September Term, pass, before the Register of Wills, a final account of his administration, and that he file in this case a certified copy of such account when passed.
February 1st, 1872.
The administrator having passed a final administrative account and filed in this Court a certified copy of the same, pursuant to the interlocutory decree.it appeared that there was an unappropriated balance of the proceeds of the real estate, applicable to the legacies, of $4207,54, which sum was insufficient to pay the legacies in full.
G. B. Rodney, suggested that the legacy of $3,000 to Enos H. Barr, having resulted to the heirs at law, as real
This legacy must abate with the others. The question is not whether a resulting trust to the heir is subject to abatement, but rather what is it that results to him whether the whole sum of $3000 bequeathed to Barr or only so much of it as in the condition of the assets he could have taken had he survived the testatrix.
The effect of a resulting trust is that the heirs at law are substituted in the place oí the intended legatee, and though they take by a different title, that is, by descent and not under the will, yet they take only what, had he lived, would have fallen to him in the distribution of the proceeds, which would have been his proportionable part, after abatement with the other legacies. It is that part which, in the event, becomes actually undisposed of by the will, and which therefore results to the heirs. There is no direct decision to the point, but, in 1 Roper on Legacies(414), a book of good authority, the principle is very clearly stated and illustrated, that the heir at law under a resulting trust can be in no better situation than the legatee or devise, to whose place he is substituted.
This subject has been fully considered and authorities collected in VanKleeck vs. Reformed Dutch Church, 6 Paige 600, affirmed in 20 Wendell 457; Greene vs. Dennis 6 Conn. 292; Lingan vs. Carroll, 3 Har. & McH. 333; Tongue vs. Hutwell, 13 Md. 415; Hayden vs. Stoughton, 5 Metc. 528.