3 Edw. Ch. 20 | New York Court of Chancery | 1834
The great and leading question is with the defendant James Bogert: whether, by virtue of his purchase and the assignment from Van Buren, he has acquired a right to hold the bond and mortgage and receive the money to his own use ?
That there has been a gross breach of trust committed by Van Burén, cannot be denied. It does not appear that he had any occasion to sell-the bond and mortgage for the purposes of the estate. The whole of the money was, most certainly, not wanted for immediate distribution among the devisees ; and it was safely secured at interest, the principal, not demandable short of about three years, which answered the intentions of the will. Anticipating the money, therefore, by a sale and assignment of the securities was an act of misconduct in itself; and his subsequent misapplication of the fund,
In order to determine which is to be the loser, it is necessary to ascertain, in the first place, in what capacity Van Beuren and Wyckoff held the bond and mortgage ; and how far, separately, they could exercise a power of disposition or control over the same ? And then, to look into the circumstances under which Mr. Bogert made the purchase and took the assignment.
Superadded to the office of executor, which, by law, vested them with the possession and control of the personal estate, was that of donees of' the power of sale of the real estate, the legal title to which passed by the will and vested in the daughters and grandchildren of the testator, as devisees, subject to the power. This was a naked power or a power in trust, not coupled with any interest; and it was to be exercised according to the language of the will “ for the more easy and equal division of the estate.” It was a power, however, which may be said to have attached itself to the office of executor, 'since it was granted to the executors and not to the individuals by name ; and then, by statute, such of them as qualified and took charge of the administration under the will, were competent to execute the power, without the concurrence of others who might be named in the will to fill the office, but who neglected or refused to accept the appointment; 1 L. N. Y. 366, § 11 ; and hence it is that, in the present case, out of five persons nominated, the two who proved the will and took upon themselves the office, alone made the sale and executed a deed to the purphaser, pursuant to the power, which doubtless vested him with a good title ; but this they could not and did not do merely as executors virtute officii.
The act was one requiring a special authority, which, in this instance, was derived from the will; the aid of the statute being invoked to render the acts of the two, who had taken upon themselves the office of executors, as if all had done so and had united in the sale and conveyance. When the sale was consummated, the money arising therefrom did not become assets to be administered as personal estate. It was still realty belonging to the devisees, to whom the land was
This is clear both upon principle and authority. Even where land is devised to executors to be sold for payment of debts or where executors are empowered, by the will, to sell lands for that purpose without any devise to them, or where they proceed to do so under the authority of the statute by virtue of a surrogate’s order, without any authority from the will itself, the surplus money arising from the sale, after satisfying the debts, retains the character and attribute of land and still belongs to the heir or devisee: Leigh and Dalz, 102, 103.
Hence, it follows, that in all such cases as these, the money which comes into the hands of an executor, bearing and retaining the impress of land, is not held by him qua executor to be accounted for as personal estate. Another and distinct cha- . racter, that of trustee, attaches to him in relation to such money. In a recently written treatise on the administration of assets, the author observes that the produce of real estate, sold for the purpose of paying debts, although received by the person who is executor, yet is not received by him as such, but as trustee, to which character the office of administering real estate is more pertinent; Meggison on Assets, 104. This, I think, is a necessary and just distinction ; and if, in converting real estate into assets, legal or equitable, for the payment of debts and in administering the same, the person is to be regarded in the light of a trustee rather than an executor, how much more emphatically is he a trustee of the proceeds of real estate when, instead of a sale for such a purpose, the person takes upon himself the office of executor sells by virtue of a power in the will with a view to a division and settlement among the devisees.
Besides—the will, in the present case, evidently contemplates a trust in relation to the rents and profits of the real estate during the lives of the two daughters of the testator and the minorities of the two grandsons, as well as of the money to arise from the sale of the real estate, until the proper time should arrive for making a division. And there are no persons appointed to execute these trusts except the executors.
Thus, in every view of the case, both as to the capital of the real estate and the rents and profits, there is manifestly a trust created by the will and the executors are constituted trustees. They stood, then, in a different relation from that of mere executors; and when the money and the securities arising from the sale of the two lots came to the hands of Van Buren and Wyckoff, they must be considered as taking the same in the character of trustees distinct from that of executors of the personal estate. Describing themselves in the bond and mortgage as executors can make no difference.
They could not, by so doing, vest themselves with the property in that capacity; and it must be considered a misdescription, not affecting the true character in which they stood in relation to the real estate.
This distinction—between executors as such and trustees— is all important in the present case.
The objection to the assignment of the bond and mortgage is based upon such distinction. The objection is this, that the assignment purports, upon its face, to have been made by Van Buren, as one of the executors, when, so far as concerns this property, he was not an executor and therefore, as such, could pass no title to the purchaser; and that, as trustee, he could not, by his separate act or deed, without the concurrence of his co-trustee, lawfully dispose of the bond and mortgage to a third person or confer a right to hold the same against the beneficial owners.
The law, with respect to the power and authority of executors, where several are appointed to the office, is very plain. Each and every executor has, in himself, the entire power to dispose of all the property which they take as such by virtue of their office—there are no parts or moieties between them— as they all represent the testator and fill one office—they are but as one person in the eye of the law. The principle is thus exemplified: “if a horse come to four executors, each
With respect to trustees, where there is a plurality, the law is very different, for they have, unless otherwise expressed in their appointment, only a joint power, interest and authority in which they are all equal. One of them cannot act separately and independently of the others. In the sale of property, the receipt of money, the discharge or release of debts, all the trustees living must join or concur in the act, for one cannot sell without the other or desire to receive more of the consideration money or to be more a trustee than his fellow : Fonbl. Eq. Book 2, ch. 7, § 5.
Chancellor Jones, in delivering the unanimous opinion of the court for the correction of errors in Sinclair v. Jackson, 8 Cow. 582, states it to be a settled rule that when a trust or authority is delegated for mere private purposes, the concurrence of all who are entrusted with the power is necessary to its due execution ; and that this rule applies as well to trusts coupled with an interest or surviving trusts as to naked powers ; and, therefore, a lease not-being executed by all the trustees who were living, was, in that case, held to be absolutely void.
This rule applies to the present case. As already observed, the power to sell was delegated to the executors of the will. The two who qualified were competent, by the statute, to execute the power ; and, for the purpose of a sale and division, became trustees. Being so constituted, one alone could not sell and execute the conveyance. To give a title to the purchaser, it was necessary that the sale should be the result, as it in fact was, of their united judgment and action and that both should execute the deed : Berger v. Duff, 4 J. C. R. 368. So, for the sake of conformity, it was necessary, upon payment of the purchase money, that they should unite in the receipt or discharge to the purchaser; and, hence, it was proper to take the bond and mortgage in their joint names. Having thus taken the securities, one could not, alone, give a dis
Upon the same principle and foythe same reasons, an assignment or transfer of the bond and mortgage or of the trust property, by one of several trustees, without the assent and concurrence of the other, cannot be allowed to pass a valid title to the assignee. He who takes in breach of a trust and without acquiring a good title becomes himself a trustee: Wilson v. Moore, 1 Mylne and K. 127. S. C. 8 Legal Observer, 105.
An expression of Lord Ellenborough’s in Denne v. Judge, 11 East, 288, has been used in argument by the defendant’s counsel, to show that no distinction should be made between executors and trustees in relation to the proceeds of real estate, where the same person would seem to represent both characters. After adverting to the circumstance in the case cited, that the devise was to five trustees named in trust to sell and not to them as executors to be sold, though the same persons were also appointed executors, the Chief Justice, Lord Elienborough, observes, they had nothing to do with the land as executors ; and he is then reported to have said, “ if indeed the fund, when raised, had been distributable by them in the character of executors, that might have brought the case within the rule contended for.” I apprehend, that this remark can hold good only in the case of a power or devise to executors to sell real estate by way of a conversion out and out; and which is so intended by the testator for the purpose of paying debts or satisfying pecuniary legacies. There would, then, be a distribution by them in their character of executors ; and the fund being assets would be taken by them in that capacity and not as trustees. That, however, is not the present case and the remark of Lord Ellenborough cannot apply.
The next inquiry is, whether there are any circumstances to take this case out of the operation of the rule which has been stated ? That the purchaser, Mr. Bogert, has paid his money innocently and in good faith, and under the belief that the bond and mortgage were held by executors in that capacity, and that one of them was competent to make a valid transfer or as
Mr. Bogert’s ignorance of the law (and he says in his answer he was ignorant) may have been such as to disqualify him from distinguishing property likely to be held by trustees from such as executors are by law invested with ; but the mention of heirs or devisees, to whom it was represented the money was to go, connected with the fact that it was secured upon property which had belonged to the testator, was certainly sufficient to have awakened inquiry as to the point, whether the bond and mortgage were held in trust as a trust fund or were apart of the assets or personal estate in the hands of the executors, as such, and over which they and each of them had the power of disposal; Pendleton v. Fay, 2 Paige’s C. R. 202. Indeed, it appears, that for the very purpose of ascertaining whether the bond and mortgage could be lawfully transferred, so as to be a valid security to the defendant Bogert, he referred the whole matter to the advice and direction of his counsel, to whom Van Buren went with the papers, proposing
A point has been made upon the allegation in the answers of the defendants, Van Buren and Wyckoff, of the pendency of a former suit for an account and settlement of the estate, whether a decree for a general account can be made in the present suit, while the former one is depending ?
The objection of a former suit depending has not been made in the proper manner to enable the court to dispose of it, as it ought to have been, in an earlier stage of the cause : Cooper’s Plead., 274; and it cannot now be permitted to prevail. There should be but one accounting, and that under a decree in one suit. I see no difficulty in making that decree here. All parties are before the court in this suit for that purpose, as well as for the purpose of determining the question of the assignment of the bond_ and mortgage. To the former suit the assignee, Mr. Bogert, is not a party, nor are the two present
The reference now to be had must embrace the accounts of the two executors and trustees, with the estate generally, and with the respective devisees ; and, upon the coming in and confirmation of the report, a decree can be made discharging the defendant, Peter Wyckoff, as well as Van Buren, from the trust. All further proceedings in the former suit are rendered unnecessary, and may be stayed. The question of costs, except as to those of Mr. Yates, and all further directions are reserved,
“ The proceedings are to be remitted to the vice chancellor.”
) The great point in this case lias been affirmed on appeal to the chancellor. His honor, in affirming the decree, with costs, added the following: “A slight modification however, may be necessary, in a point not suggested to the vice-chancellor, to enable him to malee a final decree, protecting the rights of all parties on the coming in and confirmation of the master’s report. The appellant, who advanced his money on this assignment, is entitled to protection so far as the money advanced by him was actually applied to the purposes of the trust, and so far as that money or the proceeds thereof can be traced and identified as now existing in available securities, or as being in the hands of the officers of this court, so that it can be thus applied. The decree is probably broad enough now to make it the duty of the master to allow the appellant for any part of the money actually applied for the purposes of the trust, as an offset against the amount received by Bogert on the bond and mortgage. But it may not be broad enough to include any part of the fund paid to the receiver in the former suit, as testified to by Walker, and which may be the avails of the money received from the appellant at the time of the assignment of the bond and mortgage to him. This modification the counsel for the respondents was understood as assenting to on the argument, and must be made accordingly* And the amount and present situation of that fund must be stated in the master’s report, and must be transferred to the credit of this cause, so that it may be disposed of under the final decree made therein.