In re the Judicial Settlement of the Account of Tatum

2 Mills Surr. 125 | N.Y. Sur. Ct. | 1901

Abbott, S. —

■ Tbe will of Maria E. Iiibbler, after making several specific and general bequests not material to tbe questions before me, disposes of ber residuary estate as follows:

“ Eleventh. All tbe rest, residue and remainder of tbe property and estate, real and personal, of every description and wheresoever situated, of wbicb I may be seized or possessed, or to wbicb I may be entitled, at tbe time of my decease, 1 give, devise and bequeath unto my grandchildren, Anna H. Tatum, Albert H. Tatum and Frederick C. Tatum, children of my deceased daughter Alice H. Tatum, for their own use and benefit forever, share and share alike. But if any of my grandchildren hereinbefore named shall not be twenty-one years of age at tbe time of my decease, the share in my estate hereinbefore bequeathed or devised to such grandchild shall be held by the trustee hereinafter named or his successor, in trust to invest the same and keep the same invested, until such grandchild shall attain the age of twenty-one years, and then to pay over to such grandchild the said principal sum with the interest and accumulations thereon; and in the event that such grandchild shall die before attaining the age of twenty-one years, then to pay the said principal sum and the interest and accumulations thereon to the survivor among the said grandchildren in equal proportions, the share in such fund of such survivor as shall then be of the age of twenty-one years to be paid forthwith; and if either survivor shall then be under the age of twenty-one years, his share therein to be paid when he shall become of such age.”

She then gives to her executor a power of sale of real property in the following terms:

“ Thirteenth. I constitute and appoint my son-in-law Charles A. Tatum, the executor of this my will, and trustee of the several trust estates hereinbefore created; and I hereby authorize and empower my said executor and trustee to sell, at public or private sale, and at such time or times and in such manner, and for such sum or sums, and upon such terms as to him, in the exercise of his best judgment, may seem most expedient, and to convey all or any part of my real and personal estate as he may consider it necessary or proper to do for the payment of my said debts and of said legacies, and for any other purpose or purposes whatsoever.”

The testatrix left surviving her the three grandchildren named in the above-quoted paragraph of her will. Anna H. Tatum and Albert U. Tatum were both over twenty-one years of age, and Frederick C. Tatum was an infant about twelve years of age.

At the time of Mrs. 'Hibbler’s decease, Anna H. Tatum had married and was the wife of Frederick D. Preston. On June 30, 1900, Anna H. Preston died intestate, without issue, leaving her husband and, as her only heir-at-law, her father, Charles A. Tatum, surviving her. Letters of administration were issued to Frederick D. Preston. Mrs. Hibbler’s estate consisted entirely of personal property, except one house and lot and stable, which were sold by the executor under the power of sale on August 22, 1900, about two months after the decease of Mrs. Preston.

The contention before me involves the disposition to be made of the one-third share of the proceeds of sale of the real property to which Anna H. Preston would have been entitled if living at the time of the sale.

Charles A. T'atnm claims that share of the proceeds of sale as heir-at-law of his daughter, Mrs. Preston, while Frederick D. Preston claims it on the theory that the provisions of Mrs. Hibbler’s will, effected an equitable conversion of her real into personal property as of the date of her decease, and that the share of Mrs. Preston in the real estate passed to him as her husband upon her decease, as personal estate, even though there had been no actual conversion until after her decease.

The solution of the questions thus presented necessitates a construction of the “ eleventh ” and “ thirteenth ” paragraphs of the will of Maria E. Hibbler.

By the eleventh paragraph she gives, devises and bequeaths “ all the rest, residue and remainder of the property and estate real and personal ... of which I may be seized or possessed . . . unto my grandchildren Anna H. T'atum, Albert H. Tatum and Frederick 0. Tatum . . . for their own use and benefit forever, share and share alike.”

If the will stopped here there would be no possible occasion for construction. Each of the three grandchildren named would have become vested in fee with an equal undivided one-third share of the real estate as tenants in common. As to the shares thus absolutely devised to Anna H. Tatum (Preston) and Albert H. Tatum, both of whom were of full age at the time of the decease of Maria E. Hibbler, there is no express provision of the will which suggests any intention on the part of the testatrix to divest the same upon any contingency whatever.

But it is argued in behalf of Mr. Preston that the subsequent portions of the will imply an imperative direction to the executor to sell and dispose of the real property, and that such implied direction to sell effected an equitable conversion of the real estate, as of the date of the decease of the testatrix.

After the absolute devise and bequest of her real and personal property to her three grandchildren, the testatrix provides : “ But if any of my grandchildren hereinbefore named shall not be twenty-one years of age at the time of my decease, the share in my estate hereinafter bequeathed or devised to such grandchild shall be held ... in trust to invest the same and keep the same invested, until such grandchild shall attain the age of twenty-one years and then to pay over to such grandchild the said principal sum with the interest and accumulations thereon.” In the event of the decease of such grandchild before arriving at the age of twenty-one years, the trustee was directed to pay the said principal fund with the accumulations to the survivor among the grandchildren.

I cannot agree with the contention of the counsel for Mr. Preston. I find no provision of this will which renders necessary any implication of a peremptory direction to sell. The only limitation or qualification of the absolute devise of real estate, relates to the undivided one-third part thereof devised to Frederick C. Tatum. It is “ the share in my estate herein-before bequeathed or devised to such grandchild ” which is to be held in trust and paid over to “ such grandchild ” when he arrives at the age of twenty-one years.

There was no necessity of any sale of the real property at all to carry out the intention of the testatrix. , The real property could have been held as real property during the period of the minority of Frederick C. Tatum, when the fee would have vested in him absolutely under the termsi of the residuary clause of the will. The trust as to the infant’s share was to continue only during his minority.

The mere use of the words “ to pay ” contained in this provision is insufficient to-warrant t’hé implication of an intention to convert the teal into personal estate. Chamberlain v. Taylor, 105 N. Y. 185, 191.

The rule is well- settled that a mere discretionary power of sale in executors or trustees does not affect the character or attributes of real property as real property until such time as it has been in fact sold and converted into cash. Chamberlain v. Taylor, 105 N. Y. 185; White v. Howard, 46 id. 144-162; Wilder v. Ranney, 95 id. 7; Clift v. Moses, 116 id. 144.

A direction to convert is sometimes implied, but “ only when the design and purpose of the testator is unequivocal and the implication so strong as to leave no substantial doubt.” Hobson v. Hale, 95 N. Y. 588.

The case of Salisbury v. Slade, 160 N. Y. 278, relied upon by counsel for contestant, is not in point.

In the will then Tinder consideration by the court, there ivas first created a life estate in testator’s widow, as to a part of his real property, and the rest was vested in trustees to collect and pay over rents during the widow’s life. The remainder was given to seven children “ to be divided equally between them, . . . except that the shares to my daughters, four in number, were to be held by the executors in trust during the life of each, income . . . to be paid to each, and upon the decease of the daughters, respectively, her share was to be paid to her children.” The share of testator’s real estate not given to his wife for life he directed should “ not be sold or divided up during her natural life.”

It was held by the court, Babtlett, J., writing, that the general scheme of the testator, under the facts of that case, clearly contemplated a sale of the real property, and that such a sale was necessary to carry out the plan of the testator, and that an equitable conversion of the real estate was implied. At page 288, “ the language and general scheme of this will raise an implied and imperative power of sale in order to cany out its provisions. This being so, there was an equitable conversion of the real estate into personalty. ... It has been remarked that ‘ precedents are not very valuable where the decision must be based on the peculiar phraseology of the entire will” (107 N. Y. 540), and again, at page 289-290, “ It is difficult to lay down a hard and fast rule in cases of this kind. We have on the one hand the general principle that where the gift is absolute, and the time of payment only postponed, time, not being of the substance of the gift, but relating only to the payment, does not suspend the gift, but merely defers the payment. On the other hand, we have a class of cases, which is illustrated by the case at bar, where the entire 'corpus of the estate is not bequeathed and devised to remain-dermen, subject to life estates in trust, whose beneficiaries receive the income and rents, but on the contrary the corpus of the estate is to be divided into seven shares, three of which are disposed of absolutely and. at once and four of which may be held in four distinct trusts for many years, subject to life estates falling in at different times.”

The facts of the Salisbury case are not at all like those under the will before me. In that case there was an antecedent life estate, before the termination of which the property was “ to be divided,” and the respective shares paid over at different times extending over a long period of time.

In the case before me, there was an absolute devise of the real estate to take effect in enjoyment immediately, upon the testator’s decease, except that an undivided one-third share was to be held by a trustee during the minority of the devisee of that share, accompanied by a discretionary power of sale of the entire real estate.

Other questions of minor importance have been raised by the special guardian.

■ The executor, with the consent of the beneficiaries, paid to an old servant of the testatrix the sum of $200, the amount of a legacy to her deceased sister, which had lapsed. Of course, neither the infant beneficiary nor his guardian had any legal power to assent to such payment. The executor must, therefore, be charged with one-third of that amount to be paid to himself as trustee of the infant’s share of the estate.

It appears from an affidavit of the executor, filed since the filing of the account, that the statement contained in Schedule D of the account, to the effect that the infant’s share of the estate had been paid to Charles A. Tatum as guardian, was an error. The mortgage turned over to him was, in fact, assigned to him in -his capacity as trustee, and the remainder of the infant’s share was invested in mortgages to Charles A. Tatum as trustee for his son, Frederick 0. Tatum.

The exceptions are overruled, except as to the items of $200.

Let decree be presented on two days’ notice, in accordance with the views herein expressed.

Decreed accordingly.