136 N.Y. 106 | NY | 1892
The testator made his will November 28, 1887, and died July 1, 1888. He owed unsecured debts to the amount of $30,000, and the net value of his personal property, after the payment of the expenses of administration, did not exceed $1,025. It is to be inferred that this was the condition of his property at the time of the execution of the will, as it does not appear that any change had occurred intermediate that date and his death. He owned real estate of the estimated value of $73,500, exclusive of the incumbrances upon it. He appointed his wife, one of his sons and a friend, the executors and trustees of his will, and he first orders and directs them to pay all his just debts and funeral expenses as soon after his decease as may be convenient. He then gives all his property, both real and personal, to his executors and trustees upon certain specified trusts for the benefit of his wife and three minor children, and in the concluding paragraph of the instrument appoints the executors and trustees, and couples the appointment with a power in these words: "Giving and granting unto my said executors and trustees full power and authority to sell and convey any and all my real estate either at private sale or public auction, and to make, execute and deliver good and sufficient conveyances therefor." The paragraph closes with a specific authority to mortgage the real estate for certain purposes, which it is not important to consider here. The petitioner is a general creditor to the amount of $3,750, who has been unsuccessful in his efforts to secure *110 the payment of his debt out of the personal estate, because of the deficiency of assets, and has brought this proceeding under the provisions of the Code (§§ 2749-2801), to obtain a liquidation of his demand by the sale of the real estate of the decedent. It is conceded that he is entitled to the relief sought, unless the testator's real property is, by the terms of his will, subject to a valid power of sale for the payment of debts and funeral expenses. (§ 2759, subd. 4.) It is true, as the learned counsel for the petitioner contends, that a power of sale to pay debts, sufficient to defeat the creditor's application under the statute, must be one the exercise of which is imperative and not simply discretionary. The creditor cannot be deprived of his statutory remedy, unless the debtor has, by his testamentary act, provided him with another, which is equally prompt and effective in its operation.
But we think the authority conferred by this will is adequate to secure to the petitioner the accomplishment of the ultimate design of this proceeding. When read in connection with its other provisions, we cannot regard the direction to the executors and trustees to pay all just debts, as an idle and meaningless formula. The testator well knew that his will in this respect could not be obeyed without a sale of some part of his real estate, and it is to be presumed that he intended to clothe them with a power commensurate with the duties and obligations imposed upon them. He evidently had in view a complete adjustment of the affairs of his estate by the agents of his own choice in whom he reposed especial confidence.
Wherever a power or authority to sell is given without limitation, and is not in terms made discretionary, and its exercise is rendered necessary by the scope of the will and its declared purposes, the authority is to be deemed imperative, and a direction to sell will be implied, provided the design and purpose of the testator is unequivocal and the implication so strong as to leave no substantial doubt, and his intention cannot otherwise be carried out. (Scholle v. Scholle,
We are referred to many other cases where it has been held that a power of sale is not available for the payment of debts, but they are all cases where the power was either discretionary, or limited to some other specific purpose, or where it could not be exercised without breaking up and destroying the scheme of the will and frustrating the intention of the testator. (Kinnier v.Rogers,
If the testator has specifically devised designated portions of his realty, or impressed them with separate trusts, the presumption is very strong, and usually controlling, that he did not intend that these dispositions of his property should be overturned by the exercise of a general power of sale. A direction to sell for the payment of debts cannot be implied in such cases, because, in order to sustain the structure of the will, there must be implied a direction not to sell for such a purpose. No difficulty of this kind is in the way here. The real and personal property is blended in one gift to the executors for a common trust in which all the beneficiaries share equally. In such cases the exercise of a general and unlimited power of sale is imperative, and may be compelled in favor of any party who is lawfully entitled, under the provisions of the will, to the proceeds of the real property when sold. A creditor, whose debt is directed by the will to be paid, and for the satisfaction of which the personal estate proves insufficient, belongs in this class. He is beneficially interested in the exercise of the power, and, as to him, it becomes a power in trust, and under the statute every such power, unless its execution or nonexecution is made expressly to depend on the will of the grantee, is imperative and imposes a duty on the grantee, the performance of which may be compelled in equity, for the benefit of the parties interested. (4 R.S. [8th ed.] pg. 2448, § 96.)
Such a power does not interfere with the order in which the assets of a decedent's estate must be marshaled for the payment of debts. The personalty must first be exhausted, and *112 if that fails, the execution of the power may be resorted to and compelled so far as necessary to meet the deficiency.
In a case like the present the debts are not made a charge upon the real estate. It is a naked power to sell for the payment of debts, and the decisions which prescribe the rule to be observed in determining whether there is a charge upon the realty have no application. (Matter of City of Rochester,
It cannot be inferred or implied. In this respect the rule is different as to legacies. (Clift v. Moses, supra.)
It is of some significance that the testator directs his debts to be paid by his executors and trustees, and that the power of sale is given to them in the same dual capacity. The suggestion of a trust seems to pervade the entire instrument and to characterize the duties imposed and powers created by it.
There has been some discussion by counsel and in the opinions of the referee and surrogate as to the validity of the trusts created for the benefit of the testator's wife and minor *113 children, but we are unable to perceive how a determination of that question becomes material upon this appeal. If the power of sale is limited to the purposes of the trust it is not imperative, but discretionary.
There is no direction, express or implied, in the will to sell the real estate and convert it into personalty for the purposes of the trust until the youngest child becomes of age, or until his death if he does not survive his minority. In fact the terms of the will are such that the testator seems to have contemplated that his executors and trustees might deem it expedient to hold the real estate meanwhile, or some portions of it, for he has authorized them to pay the interest on the mortgages and to execute new mortgages for the purpose of retiring those which become due and demandable. They might sell at any time for the advantage of the trust if, in their judgment, it was thought advisable, but they could not be compelled to do so until the expiration of the trust term, and hence the existence of a power limited to such purposes could not be invoked to defeat this proceeding. If the power had been effectually exercised in part the proceeds could be treated as assets available for the payment of debts, and, until exhausted, there could be no recourse against the other lands of the decedent. (Erwin v. Loper,
The order appealed from should, therefore, be affirmed, with costs.
All concur.
Order affirmed. *114