197 N.Y. 304 | NY | 1910
The plaintiff entered into an agreement, in writing, to sell to Louis Frankel the premises known as No. 130 Hooper street, in the borough of Brooklyn, for the consideration of $11,625, upon which contract Frankel deposited the sum of $1,000 on account of the purchase price. Thereafter and on the day fixed by the parties, the plaintiff tendered a duly executed deed of the premises to the defendant Julia Frankel, to whom the contract had been assigned by Louis Frankel, and she refused to accept the same, on the ground that the plaintiff could not convey a good marketable title to the premises under the power of sale given in the will of George W. Weeks, deceased, for the reason that the plaintiff was the sole beneficiary of the income of the trust estate until his oldest child becomes of age and the sole surviving trustee under the will.
George W. Weeks died seized of the premises in question, leaving a will which has been duly proved and admitted to probate, which, so far as is now material, provides as follows:
"Second. I give, devise and bequeath all my real estate wheresoever situate to my trustees hereinafter named, or to their successors, in trust, to collect the rents, issues, profits and income thereof and after expending therefrom such amounts as may be deemed necessary by them in keeping the said premises in good order and repair and properly insured against loss and damage by fire and after the payment of all taxes, Croton Water rents, charges and assessments that may be levied thereon, to pay the remainder of such rents as and when collected to my son, Charles M. Weeks, until my oldest grandchild me surviving shall arrive at majority or until my said son shall die, whichever event shall first occur, and thereafter *307 and until my oldest grandchild me surviving shall arrive at the age of twenty-five years, or shall die, whichever event shall first occur, to pay the remainder of such rents as and when collected to my grandchildren in equal shares, whether born before my death or at any time prior to the termination of the trust, the issue of any grandchild who may have died prior to the termination of this trust to take the share to which his or her parent would have been entitled if living. Upon the termination of this trust, I give, devise and bequeath the said real estate to my grandchildren, share and share alike, whether born before my death or at any time prior to the termination of the trust, the issue of such as may have died to take the share to which his or her parent would have been entitled if living.
"Fifth. In case my son, Charles M. Weeks, or his wife, or his family shall immediately upon my decease so elect, he or they shall be entitled to live in and occupy the house No. 130 Hooper Street, Borough of Brooklyn, City of New York, and shall have the use of the household furniture therein free of rent or charge.
"Sixth. In case no such election shall then be made and my Trustees shall deem it advisable so to do, they are hereby authorized and empowered to rent the said house furnished and to determine what proportion of the amount of the rent so received shall be considered as rent for the use of the said furniture.
"Seventh. I authorize and empower my executors and trustees and their successors in their full discretion to sell any or all of my real or personal property at public or private sale and upon such terms as they shall deem most advantageous and desirable, and to make, execute and deliver good and sufficient deeds and other instruments to carry such sale or sales into effect, and to invest and reinvest the proceeds thereof in such securities as they shall jointly agree upon, and I direct that the proceeds thereof shall take the place of the property sold.
"Ninth. I hereby nominate and appoint my son, Charles *308 M. Weeks, and my friend, Michael J. Collins, executors and trustees of this my last will and testament and direct that neither of them shall be required to give any bond or bonds or other security as such executor or such trustee as aforesaid, whether because of non-residence or for any other cause or reason. In the event of the death, resignation or refusal to serve of both of my said executors and trustees hereinabove named, I hereby nominate and appoint The United States Trust Company of the City of New York executor and trustee."
Charles M. Weeks and Michael J. Collins both qualified as executors and trustees under the will, and Collins continued to serve as such until his death, which occurred on the 20th day of January, 1905, thus leaving Charles M. Weeks the sole surviving trustee. Charles M. Weeks is a son of the testator and has two children living, his only issue, who are Kenneth S. Weeks, born June 23, 1892, and Charles M. Weeks, born July 10, 1899, Kenneth being the oldest grandchild of the testator.
No controversy arises with reference to the power given to the executors and trustees to sell and convey the premises in the exercise of their discretion, the sole contention being that the plaintiff, being a beneficiary of the income under the trust and also a sole surviving trustee under the will of his father, cannot, as such trustee, execute the power of sale given in the will.
Under the Real Property Law (L. 1896, ch. 547), which was in force at the time of the testator's death, "a power may be vested in any person capable in law of holding, but cannot be exercised by a person not capable of transferring real property" (§ 121). "Where the consent of two or more persons to the execution of a power is requisite, all must consent thereto; but if, before its execution, one or more of them die, the consent of the survivor or survivors is sufficient unless otherwise prescribed by the terms of the power." (§ 154.) By referring to the provisions of the will it will be observed that the testator, after appointing his son and his friend Collins as executors and *309 trustees, further provided that in the event of the death, resignation or refusal to serve of both of the persons named by him he then appointed the United States Trust Company of the city of New York to be such executor and trustee. This appointment, however, only becomes effective in case both of the persons named by the testator have died, resigned or refused to qualify. It is, therefore, apparent that, so long as there remains one of the trustees still living and acting, the powers of the trust were intended to devolve upon and be executed by him. It would thus seem to follow that the intention of the testator is in accord with the provisions of the statute and that there is nothing prescribed by the terms of the will which prevents the operation of the act referred to under which the execution of the power by the survivor is authorized.
As we have seen, under the provisions of the statute, the only limitation upon the capacity to take and exercise the power is that the person shall be capable in law of holding and transferring real property; therefore, the testator could, if he so chose, invest his son Charles with the power to sell and convey the real estate upon such terms as he, in his judgment, should conclude to be wise.
We do not understand that the interest of Charles, in so far as he is empowered to sell and convey the real estate, is in any manner in conflict with the rights and interests of his children. The testator was fully advised as to the relationship existing between them and of the interests which he proposed to give to Charles and to his children, and still he saw fit to vest in Charles the power to determine whether or not a sale should be made, and we are unable to discover any conflicting interests between Charles and his children which would interfere with the discretion which he may exercise or be against the interests of his children or of public policy. It would, therefore, seem to follow that the power was valid and could be exercised by Charles.
It is now contended that the power cannot be exercised by Charles for the reason that he is the sole beneficiary and *310 trustee. As we have seen, under the second clause of the will, Charles is entitled to the use of the real estate until his oldest child becomes twenty-one years of age. Then Charles' beneficial interest ceases and thereafter, during the continuance of the trust, the income goes to the testator's grandchildren. Under the fifth clause of the will the testator has given to Charles, or his wife, or his family the right to elect whether they would live in and occupy the house upon the premises in question, and if they do so elect, that they shall have the furniture therein, with the rent, free of charge. And under the sixth clause it is provided that, in case they do not elect to occupy the house the trustees are authorized to rent the same furnished and to determine what portion of the rent received should be considered for the use of the furniture. Under this provision, the rent received for the realty would go to Charles, while the rent for the furniture, being personal property, under another trust created by the will, not herein involved, would go to the grandchildren. In case Charles should elect to occupy the premises, the effect of these provisions would be to withdraw the premises from the operation of the trust and from any jurisdiction of Collins, the co-executor and trustee over them, and operate to create an estate in Charles of the right to occupy the real estate, rent free, until his eldest child should become twenty-one years of age, but we are not advised by the facts agreed upon as to whether such an election was or was not made. Therefore, we shall consider the question upon the theory that there was no election to occupy the premises and that the only right Charles has with reference thereto is derived from the second clause of the will.
A trust contemplates the holding of property by one for the benefit of another, and, consequently, the same person may not at the same time be both sole trustee and sole beneficiary of the same interest. Under the second clause of the will referred to we find a trust created of all of the testator's real estate. He gives the net income of such property to Charles until his eldest son, the testator's grandson, shall *311 arrive at his majority. The effect of this is to vest in Charles the use of the real estate until the happening of that event. From that time until the eldest child becomes twenty-five years of age the rents and income from the real estate are to be collected and paid over to the testator's grandchildren in equal shares, after which the trust terminates and the real estate is divided among the grandchildren. Under section 72 of the Real Property Law it is provided that "every person, who, by virtue of any * * * devise is entitled both to the actual possession of real property, and to the receipt of the rents and profits thereof, in law or equity, shall be deemed to have a legal estate therein, of the same quality and duration, and subject to the same conditions, as his beneficial interest." The giving to Charles of the use of the real estate during the minority of the eldest grandchild would ordinarily vest in him a legal estate and not constitute a trust were it not for the fact that the possession of Charles in the real estate was shared by his co-trustee; but as soon as that trustee died Charles became entitled to the sole possession as well as to the entire rents and profits, and, therefore, under the provisions of the statute his interest became a legal estate, in which his beneficial estate merged and so continues until the same is terminated by the arrival of the eldest grandchild at the age of twenty-one years, and when that time arrives the trust estate for the benefit of the grandchildren commences and continues until the trust under the provisions of the will is terminated.
If we are correct in thus construing the provisions of the will it follows that there is nothing in the provision that makes Charles a trustee for himself that is inconsistent with his acts as trustee for his own children for the period of time specified in the will. He is given the use of the real estate until his eldest child becomes twenty-one years of age, then he holds the real estate in trust for his children until the eldest arrives at twenty-five years of age, at which time the trust is terminated and the real estate is divided among the children. If he is not a trustee for himself with a beneficial *312 interest, but is the holder of a legal estate, it would follow that there was nothing in the provisions of the trust that would impair his right to exercise the power of sale given by the will.
In the case of Woodward v. James (
In the case of Rankine v. Metzger (
In the case of Robertson v. de Brulatour (
In the case of Greene v. Greene (
In the case of Rogers v. Rogers (
In the case of Rose v. Hatch (
We, therefore, are of the opinion that the judgment of the Appellate Division should be reversed and judgment ordered for the plaintiff upon the submitted controversy, with costs in both courts.
GRAY, VANN, WERNER, WILLARD BARTLETT and HISCOCK, JJ., concur; CULLEN, Ch. J., absent.
Judgment accordingly.