equitable conversion doctrine in New York

1901In Phelps v. Pond ( 23 N. Y. 69 ) it was expressly held that, where the testator intended that the whole real estate should be sold and converted into money prior to the general distribution, the doctrine of equitable conversion applied, and this although, as in that case, a final division of the estate was postponed during the two lives.

1890In Phelps' Ex'r v. Pond, 23 N. Y. 69 , it was said that, where a testator authorizes his executors to sell real estate, and it is apparent from the general provisions of the will that he intended such estate to be sold,' the doctrine of equitable conversion applies, although the power of sale is not in terms imperative.

1901And in Savage v. Burnham ( 17 N. Y. 561 ) it was held that where a valid trust was created during the life of a widow, with a direction upon her death to sell the property and convert it into personalty, “ when that period arrives, the estate will be deemed to undergo the change directed by the will, whether then actually sold or not.” Upon the arrival of age, therefore, of the surviving infant daughter of the testator, the property became by operation of law, under the doctrine of equitable conversion, personalty in the hands of the trustees to be distributed as directed by the testator.

1874It was said in Savage v. Burnham, 17 N. Y. 561 -569, that “the doctrine of equitable conversion, according to which real estate is deemed to be changed into personal, directed and provided for in a will or. other instrument, must be taken with the qualification that the change does not take place in theory until the period arrives or event occurs, when the conversion ought to he made.

1967If the will of John Matous had contained a mandatory power of sale or if his testamentary plan required a sale of the real property then, according to the doctrine of equitable conversion, the realty would be considered personal property whether it was in fact sold or not (Lent v. Howard, 89 N. Y. 169 ).

1888(Phelps v. Pond, 23 N. Y., 69 ; Bogert v. Hertell, 4 Hill, 495 ; Lent v. Howard, 89 N. Y., 169 .) But aside from this doctrine it has been held that a trust continues notwithstanding the expiration of the time limited for its execution. ( Van Vechten v. Van Veghten, 8 Paige, 105 ; Mott v. Ackerman, 92 N. Y., 539 ; Phillips v. Davies, id., 200.) In Mott v. Ackerman the testatrix left both real and personal property which her executors were authorized, empowered and directed to convert into money within three years after the probate of the will.

1915(Moncrief v. Ross, 50 N. Y. 431, 436 ; Delafield v. Barlow, 107 N. Y. 535, 540 ; Graham, v. Livingston, 7 Hun, 11 , 14; Stagg v. Jackson, 1 N. Y. 206, 212 ; Hood v. Hood, 85 N. Y. 561, 570 ; Finley v. Bent, 95 N. Y. 364, 367 .) I, therefore, see no reason why the doctrine of a conversion at the time of the testator’s death should not be applied in aid of the rule now being. invoked as well as for other purposes of the will.

1896(Stagg v. Jackson, 1 N. Y. 206 ; Horton v. McCoy, 47 id. 21; Taylor v. Dodd, 58 id. 335; Kalbfleisch v. Kalbfleisch, 67 id. 354; Le Fevre v. Toole, 84 id. 95 ; Shipman, v. Rollins, 98 id. 311; McCorn v. McCorn, 100 id. 511.) Appellant calls our attention to Bevan v. Oooper ( 72 N. Y. 317 ), in which case the general rule was laid down that the personal estate is the primary fund for the payment of legacies, and that it is the only fund unless express direction or clear intent is found in and may be gathered from the will, in connection with the surrounding circumstances.

1974The court in the ease of Conners v. Winans ( 122 Misc. 824 ), sets forth the applicable principles in some detail and quotes Pomeroy on Equity Jurisdiction ([4th ed.], vol. 3, § 1261, p. 3042) as follows: “ The position of the vendor prior to conveyance is defined and determined by the doctrine of equitable conversion * * * In equity, his real interest is personal estate; he becomes by equitable conversion the owner of the purchase-money, of which the vendee is trustee ” (Conners v. Winans, supra, p. 827 ; see, also, 55 Am.

1974The court in the ease of Conners v. Winans ( 122 Misc. 824 ), sets forth the applicable principles in some detail and quotes Pomeroy on Equity Jurisdiction ([4th ed.], vol. 3, § 1261, p. 3042) as follows: “ The position of the vendor prior to conveyance is defined and determined by the doctrine of equitable conversion * * * In equity, his real interest is personal estate; he becomes by equitable conversion the owner of the purchase-money, of which the vendee is trustee ” (Conners v. Winans, supra, p. 827 ; see, also, 55 Am.

1962Co., 79 So. 2d 517 [Fla.]; Trotter v, Van Pelt, 144 Fla, 517; Christopher v. Mungen, 61 Fla. 513 ; cases cited in Matter of Charles, supra, and Decedent Estate Law, § 14.) Based on the testator’s intent as found herein and the applicability of the doctrine of equitable conversion, the court holds that the after-acquired property passed to the widow in accordance with the language of Paragraph SECOND of the will.

1962Co., 79 So. 2d 517 [Fla.]; Trotter v, Van Pelt, 144 Fla, 517; Christopher v. Mungen, 61 Fla. 513 ; cases cited in Matter of Charles, supra, and Decedent Estate Law, § 14.) Based on the testator’s intent as found herein and the applicability of the doctrine of equitable conversion, the court holds that the after-acquired property passed to the widow in accordance with the language of Paragraph SECOND of the will.

1951In Matter of Rowland (supra, p. 106 ) the rule was stated as follows: “ When the character of the trust property, the circumstances surrounding the execution of the will and the relationship of the testator to the beneficiary are such that intent to that effect on the part of the testator may be presumed, a discretionary power of sale will be deemed in certain circumstances a mandatory power for the purpose of effecting an equitable conversion.” Under the law of this State the facts are sufficient to bring the situation within the doctrine of equitable conversion and to require an apportionmen

1950The pre-eminent case in this jurisdiction on the question of the applicability of the general theory of conversion in the field of taxation is Matter of Swift ( 137 N. Y. 77).

1950Finally, in Matter of Baker ( 67 Misc. 360 , supra), it was said (pp. 361-362): “ The doctrine of equitable conversion, in its application to a decedent’s estate, concerns only those who have come into relations of contract or privity with the decedent or his estate.

1938To invoke it would not only ignore the intention of the parties at the time they acquired the property but destroy the legal rights of the survivor inherent in a tenancy by the entirety.” The court, in its opinion, refers to a decision in the Supreme Court of Michigan (Detroit & Security Trust Co. v. Kramer, 247 Mich. 468 ; 226 N. W. 234 ) in which the court held that where a husband and wife owning real estate by the entirety enter into an executory contract for its sale, that they do not thereby divest themselves of the right of survivorship.

1938To invoke it would not only ignore the intention of the parties at the time they acquired the property but destroy the legal rights of the survivor inherent in a tenancy by the entirety.” The court, in its opinion, refers to a decision in the Supreme Court of Michigan (Detroit & Security Trust Co. v. Kramer, 247 Mich. 468 ; 226 N. W. 234 ) in which the court held that where a husband and wife owning real estate by the entirety enter into an executory contract for its sale, that they do not thereby divest themselves of the right of survivorship.

1937The rules respecting apportionment in Furniss v. Cruikshank (supra); Matter of Marshall ( 43 Misc. 238 ), and Restatement of the Law of Trusts, American Law Institute (§ 241), should be applied in making such apportionment.

1935(Citing Spencer v. Spencer, 219 N. Y. 459 .) The next case in the development of the equitable conversion doctrine now under consideration is Matter of Jackson ( 258 N. Y. 281 ), where the court said that the general rule is laid down in Matter of Albertson ( 113 N. Y. 434 ), where the purpose of the testator is to give the beneficiary the net income and to preserve the corpus intact until the termination of the trust.

1935(Citing Spencer v. Spencer, 219 N. Y. 459 .) The next case in the development of the equitable conversion doctrine now under consideration is Matter of Jackson ( 258 N. Y. 281 ), where the court said that the general rule is laid down in Matter of Albertson ( 113 N. Y. 434 ), where the purpose of the testator is to give the beneficiary the net income and to preserve the corpus intact until the termination of the trust.

1935(Citing Spencer v. Spencer, 219 N. Y. 459 .) The next case in the development of the equitable conversion doctrine now under consideration is Matter of Jackson ( 258 N. Y. 281 ), where the court said that the general rule is laid down in Matter of Albertson ( 113 N. Y. 434 ), where the purpose of the testator is to give the beneficiary the net income and to preserve the corpus intact until the termination of the trust.

1915(Moncrief v. Ross, 50 N. Y. 431, 436 ; Delafield v. Barlow, 107 N. Y. 535, 540 ; Graham, v. Livingston, 7 Hun, 11 , 14; Stagg v. Jackson, 1 N. Y. 206, 212 ; Hood v. Hood, 85 N. Y. 561, 570 ; Finley v. Bent, 95 N. Y. 364, 367 .) I, therefore, see no reason why the doctrine of a conversion at the time of the testator’s death should not be applied in aid of the rule now being. invoked as well as for other purposes of the will.

1915(Moncrief v. Ross, 50 N. Y. 431, 436 ; Delafield v. Barlow, 107 N. Y. 535, 540 ; Graham, v. Livingston, 7 Hun, 11 , 14; Stagg v. Jackson, 1 N. Y. 206, 212 ; Hood v. Hood, 85 N. Y. 561, 570 ; Finley v. Bent, 95 N. Y. 364, 367 .) I, therefore, see no reason why the doctrine of a conversion at the time of the testator’s death should not be applied in aid of the rule now being. invoked as well as for other purposes of the will.

1915(Moncrief v. Ross, 50 N. Y. 431, 436 ; Delafield v. Barlow, 107 N. Y. 535, 540 ; Graham, v. Livingston, 7 Hun, 11 , 14; Stagg v. Jackson, 1 N. Y. 206, 212 ; Hood v. Hood, 85 N. Y. 561, 570 ; Finley v. Bent, 95 N. Y. 364, 367 .) I, therefore, see no reason why the doctrine of a conversion at the time of the testator’s death should not be applied in aid of the rule now being. invoked as well as for other purposes of the will.

1915(Moncrief v. Ross, 50 N. Y. 431, 436 ; Delafield v. Barlow, 107 N. Y. 535, 540 ; Graham, v. Livingston, 7 Hun, 11 , 14; Stagg v. Jackson, 1 N. Y. 206, 212 ; Hood v. Hood, 85 N. Y. 561, 570 ; Finley v. Bent, 95 N. Y. 364, 367 .) I, therefore, see no reason why the doctrine of a conversion at the time of the testator’s death should not be applied in aid of the rule now being. invoked as well as for other purposes of the will.

1909Clift v. Moses, 116 N. Y. 144, 157 .

1896(Stagg v. Jackson, 1 N. Y. 206 ; Horton v. McCoy, 47 id. 21; Taylor v. Dodd, 58 id. 335; Kalbfleisch v. Kalbfleisch, 67 id. 354; Le Fevre v. Toole, 84 id. 95 ; Shipman, v. Rollins, 98 id. 311; McCorn v. McCorn, 100 id. 511.) Appellant calls our attention to Bevan v. Oooper ( 72 N. Y. 317 ), in which case the general rule was laid down that the personal estate is the primary fund for the payment of legacies, and that it is the only fund unless express direction or clear intent is found in and may be gathered from the will, in connection with the surrounding circumstances.

1890In the same case in the supreme court, ( 28 Barb. 121 ,) the subject is more fully discussed, and the same conclusion reached, it appearing that the most important purposes and provisions of the will called for such conversion, and to be incapable of execution without it.

1888(Phelps v. Pond, 23 N. Y., 69 ; Bogert v. Hertell, 4 Hill, 495 ; Lent v. Howard, 89 N. Y., 169 .) But aside from this doctrine it has been held that a trust continues notwithstanding the expiration of the time limited for its execution. ( Van Vechten v. Van Veghten, 8 Paige, 105 ; Mott v. Ackerman, 92 N. Y., 539 ; Phillips v. Davies, id., 200.) In Mott v. Ackerman the testatrix left both real and personal property which her executors were authorized, empowered and directed to convert into money within three years after the probate of the will.

1872In the case of White v. Howard, ( 46 N. Y. 144 ,) referred to in 4 Lans. 442 , Judge Grover says: “ To constitute an equitable conversion of real into personal, it must be made the duty of, and obligatory upon, the trustees to sell in any event.

1866(See Lang v. Ropke, 5 Sandf. 363 , for a fuller statement of the provisions of the Lang will.) [Albany General Term, September 17, 1866.