Trask v. Sturges

• Decision Date: 08 April 1902
• Parties: TRASK et al. v. STURGES et al.
• Court: New York Court of Appeals Court of Appeals

170 N.Y. 482

63 N.E. 534

TRASK et al.

v.STURGES et al.

Court of Appeals of New York.

April 8, 1902.

Appeal from supreme court, appellate division, First department.

Action by Gustavus D. S. Truask and others, executors of Benjamin I. H. Trask, against Sadie Trask Sturges and others. From a judgment of the appellate division (68 N. Y. Supp. 1149), except so far as it affirms so much of the former judgment as adjudged that the complaint herein be dismissed, that the first counterclaims in the amended answers be dismissed, and that no costs be allowed defendants against the plaintiffs, and affirming a judgment of the special term, defendants appeal. Reversed.

William B. Hornblower and William R. Wilder, for appellants.

Charles Howland Russell, for respondents.

MARTIN, J.

The original purpose of this action was to compel the defendant Sadie Trask Sturges, one of the executors of the last will and testament of Benjamin I. h. Trask, to unite with the plaintiffs, her coexecutors, in selling certain real estate mentioned and described in the third clause of the testator's will. The defendants appeared and answered, admitting some and denying other allegations of the complaint, and then set up two counterclaims,-one to procure the removal of the plaintiffs as executors, and the other to obtain a judicial construction of the testator's will. Upon the trial the relief demanded by the plaintiffs was denied, and their complaint dismissed, upon the ground that the defendant Sadie Trask Sturges ought not at that time to be compelled to join in the sale of the real estate described, as it would be against the best interests of the estate. The court likewise decided that the first counterclaim of the defendants should be dismissed, as there was no such misconduct on the part of the plaintiffs as would justify their removal. It also construed the testator's will, which, in substance, is as follows: After he declared the instrument executed by him to be his last will and testament, the testator designated three persons, whom he denominated ‘trustees,’ to carry it into effect. He then directed: (1) That they first pay out of his personal estate all expenses pertaining to his last illness and funeral expenses; (2) that they pay his wife, during life, out of the personal estate of which he might die possessed, or which might accrue from interest, rents, profits, sales, or any other source, such sums at such periods as she might need or desire for her own use; (3) that they should, as soon after his death as might in their judgment seem fitting, dispose of his Fifth avenue property at public sale, and deposit the cash proceeds with the Manhattan Bank Company to their joint credit, to be used as thereafter and theretofore provided; (4) that they pay his brother $75,000 out of the proceeds of the sale of the Fifth avenue real estate, or any other moneys on hand, such payment to be made as soon as his trustees should determine the condition of the trust fund would permit; (5) that they pay Antonio Casello $1,000. Then follows the sixth paragraph: ‘Sixth. After the death of my beloved wife, Harriet N. Trask, I hereby direct that my said trustees shall in their discretion, within a period of five years after her death, sell and convert all my remaining estate, real, personal, and mixed, into cash, and shall deposit one-half of the net proceeds of the same in a trust company, to be by them selected, at the best rate of interest obtainable, to be held as a trust fund by said trust company, the principal sum not to be withdrawn by either of the beneficiaries of this trust. The fund is to be the property of my two granddaughters, Sadie Trask Sturges and Adele Sturges, in equal proportions, who may by will devise and bequeath the same, or, failing to make will, it shall go to their heirs at law. Said trust company shall pay the interest on this trust fund so deposited quarterly in equal proportions to my said granddaughters, Sadie Trask Sturges and Adele Sturges. The other half of my estate so converted as specified in this article shall be paid to my daughter Sarah S. S. Sturges, for her own separate use and benefit.’ By the seventh and last clause he directed that his said trustees should not be required to give bonds, and, in case either or both trustees designated die or fail to act during the existence of the trust, the surrogate of New York should designate a trustee or trustees to fill the vacancy and carry out his will in the spirit in which it was made.

The trial court, in effect, held that the will was valid as a will of real and personal property; that the provisions contained in the third paragraph directing a sale of the real property therein mentioned worked an equitable conversion of it into personal property from and after the death of the testator; that such directions constituted a peremptory power of sale, which was required to be made at public auction; and that the interests of Sarah S. S. Sturges in that property were subject to the power contained therein. It was also held that the directions contained in the sixth paragraph in respect to the remaining real estate worked an equitable conversion of it into personal property from and after the death of the testator's widow; that they constituted a peremptory power of sale, and that the interests of said defendant Sarah S. S. Sturges in such real estate were subject in all respects to such power of sale. It was likewise held that two valid express trusts were created by the sixth paragraph, one for the benefit of each of the two grandchildren named, and that said trusts vested in interest immediately upon the death of the widow; that the executors had authority to nominate a trust company to execute such trusts, and that, when selected and it has accepted the trust, it would be clothed with all the powers of a trustee of an active express trust in respect thereto; and that the selection of such trust company might be made at any time, and need not be deferred until the real and personal estate shall be converted into cash. It further held that the defendants Sarah T. Sturges and Adele S. Dodd had no absolute power of disposition in respect to any of the real estate of which the testator died seised, and that none of the defendantspossessed a right to elect to take the real property of the testator, or any part thereof, freed from such powers of sale.

The question first presented is whether the provisions for the sale of the Fifth avenue property contained in the third paragraph of the testator's will survived the death of his widow. It is obvious, and seems to be practically admitted, that her death effected a material change in the testator's estate, and as to the operation and effect of the will, and that thereupon the property belonging to the estate was to be controlled and disposed of under the provisions of the sixth paragraph, except as to the manner in which the Fifth avenue property should be sold. The appellants, however, contend that after her death the manner in which the property was to be sold, as well as the disposition of its proceeds, was controlled by the sixth provision, and not by the third. By the sixth paragraph the testator directed his executors in their discretion, within the period of five years after the death of his widow, to sell and convert all his remaining estate, real, personal, and mixed, into cash, and then directed what disposition should be made of the net proceeds. We are of the opinion that the provision in the sixth clause, requiring the sale and conversion of ‘all my remaining estate, real, personal, and mixed,’ was intended to include such of the Fifth avenue property as was unsold, and, upon the death of the widow, that the provisions in the third clause for its sale were superseded by the provisions in the sixth. It is quite obvious that the purpose of the sale provided for by the third paragraph was to enable the executors to provide a fund from which to supply the necessities or desires of the widow, and to pay the legacy given to the testator's brother. That such was its purpose seems to be practically admitted in the complaint, and that the personal property proved sufficient for both purposes, and that both had been accomplished, is also alleged therein. Therefore, a sale for that purpose became unnecessary, and, consequently, the power was extinguished. Sweeney v. Warren, 127 N. Y. 426, 431,28 N. E. 413,24 Am. St. Rep. 468. In every case where such a power of sale exists there is an implication that, when the purpose for which the conversion was directed has failed or been accomplished, the power should not be exercised. Where a conversion takes place, it is because the purpose of the will requires it. Fisher v. Banta, 66 N. Y. 468, 476. We think that, upon the death of the widow without a sale of the property mentioned in the third paragraph, there being no necessity therefor, it fell into the residue with the other unsold property of the testator, and if now sold by the executors it must be under the provisions of the sixth paragraph, and hence the Fifth avenue property is not required to be sold at auction.

The appellants also contend: (1) That no valid trust is created by the sixth paragraph, but that the legal title to the testator's property vested absolutely, one-half in his daughter and one-fourth in each of his two grandchildren; (2) that this title is subject to the power of sale vested in the executors by that paragraph, and that the real property must be regarded as equitably converted into personalty; and (3) that the beneficiaries, being all of full age, can waive the exercise of the power of sale and elect to take the property as it now is. There is no dispute as to one-half of the residuary estate disposed of by that paragraph, it being conceded that upon the death of the widow it vested in the testator's daughter, subject only to the power of sale. This leads to the inquiry whether a...