1. Where, by the terms of a will creating a trust estate for named beneficiaries, the executor-trustees are empowered and directed to invest, reinvest, sell, lease, or transfer any of the property of the estate upon such terms as to them seem best, at public or private sale, without any order of any court and without reporting to any court, the power granted by the will, not having expressly included the right of the executor-trustees to encumber real property of the estate by a long-term option to purchase, will ordinarily not be enlarged to include such right.

2. No such estoppel was shown as could have the effect of enlarging the power of sale so as to include the power to grant an option.

ARGUED NOVEMBER 14, 1960 — DECIDED FEBRUARY 9, 1961.

Leopold Adler of Savannah, a man of considerable business acumen and wealth, died testate in that city in 1948. After disposing by his will of certain of his property by specific bequests, he devised the major portion of his estate to two named executor-trustees, his youngest daughter, Miss Olga H. Adler, and Savannah Bank Trust Company, to be held in trust for designated beneficiaries, providing that, at the end of ten years from the date of his death, one-half of the corpus of the trust should be divided among his beneficiaries, and that, at the end of fifteen years from the date of his death, the remainder of the corpus of the trust should be distributed. Provision was made in his will that the two executor-trustees should operate and manage his business interests, the largest and most lucrative of which was the Leopold Adler Company. The entire capital stock of this company was owned by the testator and this business was operated in two adjoining and connecting buildings, one of which the testator owned outright in fee simple, and upon the other of which, known as the Altmayer Building, he held a lease for a term extending until January 31, 1956, with a provision for a renewal for a period of six years. The executor-trustees were empowered and directed to invest, reinvest, sell, lease, or transfer any of the property of the estate upon such terms as to them seemed best without any order of any court and without reporting to any court.

Following the death of the testator, Miss Olga H. Adler was made president of Leopold Adler Company, and it was operated under her guidance until the entire capital stock was sold to her brother, Sam G. Adler, and the two buildings which the company occupied were leased to him, on January 2, 1952, by an agreement signed by both the executor-trustees.

The salient question in this case grows out of the grant by the executor-trustees of an option to purchase one of the buildings in which Leopold Adler Company carried on its business. The particular building involved in this litigation is the one owned by the Adler estate and known as the Weil Building. Under the lease mentioned above, this building was on January 2, 1952, leased to Sam Adler for a period of ten years and six months at the rate of $1,250 per month, providing also that he should pay all State, county, and city taxes, pay fire and extended-coverage insurance premiums, insuring the building for $130,000, keep the premises in repair, and he was given an option to purchase the building at any time prior to six months before July 1, 1962, for $300,000, it being also provided in the lease that the option is assignable, and that, "in the event of damage or destruction of improvements, this option may be exercised for the sum of $300,000 less any amount the executors may have received from insurance on said improvements in fixing and receipt of insurance by landlord [the executors]." In December 1957, at the request of Miss Olga H. Adler, the executors placed an additional $50,000 worth of insurance on the Weil Building and paid the premium therefor out of funds of the estate. On May 30, 1958, the Weil Building was destroyed by fire, and insurance proceeds in the amount of $180,000 were paid to the estate. On September 17, 1958, Sam G. Adler gave the executors notice of his exercise of the option and stated that he would tender $120,000 on September 25, 1958, in full satisfaction of the alleged option, thereby taking credit for the $50,000 worth of insurance for which he had not paid. On September 23, 1958, the executors filed a petition for declaratory judgment, seeking to determine two questions: (1) Could the executors under the provisions of Leopold Adler's will execute an option; and (2) was Sam Ga. Adler entitled under the provisions of the option to credit for the $50,000 worth of insurance on the Weil Building for which he did not pay the premium as he had for the $130,000 worth of insurance under the provisions of the lease. The trial court, without a jury answered the second question in the negative, and Sam G. Adler sued out a writ of error to the Court of Appeals, where that part of the case is still pending following a refusal by this court to permit that case to be transferred to this court and consolidated with the present case. See Case No. 21046, transferred to Court of Appeals on October 10, 1960.

As to the first question, whether the Adler will permitted the executors to execute an option for the purchase of the Weil Building, the trial court answered in the affirmative, and Miss Olga H. Adler, individually and as coexecutrix of the will, has sued out the present writ of error to this court.

QUILLIAN, Justice.

1. By the terms of the will, the executor-trustees were empowered and directed to sell or to lease the realty devised to them for the trust estate at either public or private sale and upon such terms as to them seemed best. No reference whatsoever is made in the will as to any power being conferred upon them to grant an option to purchase the property. It has long been the rule, both in America and in England, until changed by statute in England (Law of Property Act, 15 Geo. V, ch. 20, § 28, 1925), that "A trustee who has a power to sell in addition to a power to lease, whether the latter is express or implied, does not ordinarily have the power to give a lessee an option of purchase for a definite sum during the term of the lease. The purpose of this rule is to compel the trustee to exercise his judgment at the time of the sale and not at the time of the making of the lease as to whether the sale is beneficial to the trust estate." 4 Bogert On Trusts and Trustees, § 796: 21 Am. Jur. 722, Executors and Administrators, § 606; 2 Scott On Trusts, 1439, § 190.8; 7 Thompson On Real Property, 348, § 3892; 30 Columbia Law Rev. 870; Clay v. Rufford, 5 De G. Sm. 768, 780, 64 Engl. Rep. 1337, 1342 (1852); Oceanic Steam Navigation Co. v. Sutherberry, L. R. 16 Ch. Div. 236, 243 (1800); In re Armory Board, 29 Misc. 174 ( 60 N.Y. Supp. 882); Hickok v. Still, 168 Pa. 155 ( 31 A. 1100); Moore v. Trainer, 252 Pa. 367 ( 97 A. 462); Midland County v. Slaughter, 61 Tex. Civ. App. 328 ( 130 S.W. 612); Cozad v. Johnson, 171 N.C. 637, 643 ( 89 S.E. 37, 40); Swift v. Erwin, 104 Ark. 459 ( 148 S.W. 267, 269); Tibbs v. Zirkle, 55 W. Va. 49 ( 46 S.E. 701, 104 Am. St. Rep. 977); Trogden v. Williams, 144 N.C. 192 ( 56 S.E. 865); Hedgecock v. Tate, 168 N.C. 660 ( 85 S.E. 34).

In Campbell Coal Co. v. Baker, 142 Ga. 434 (1) ( 83 S.E. 105), with all the Justices concurring, it was held: "In the absence of any authority for that purpose conferred by a will, the executor nominated therein and subsequently qualified has no authority to enter into a contract granting an option to a certain person to purchase at private sale land belonging to the estate for a specified price." This case has been cited as authority in Walker v. General Insurance Co., 214 Ga. 758, 762 ( 107 S.E.2d 836); and in Fisher v. Pair, 69 Ga. App. 492, 497 ( 26 S.E.2d 187), in which latter case the following cases were also relied on: Neal v. Patten, 40 Ga. 363; Miller v. Hines, 145 Ga. 616 (3) ( 89 S.E. 689); Turner v. Peacock, 153 Ga. 870 (3) ( 113 S.E. 585); and Blumenthal v. Cain, 22 Ga. App. 596 ( 96 S.E. 710), in which these additional cases were relied on: Logan v. Gigley, 9 Ga. 114; Bond v. Watson, 22 Ga. 637; Downing v. Peabody, 56 Ga. 40.

It is well established and a matter of first principle, that "nothing can be tolerated which comes into conflict or competition with the interest or welfare of those interested in the estate. Lowery v. Idelson, 117 Ga. 778 ( 45 S.E. 51)." Hall v. White, 215 Ga. 144 ( 109 S.E.2d 516). From the statement of the general rule inhibiting the grant of an option to purchase trust property, even under a power of sale conferred by the will, which we have quoted from Bogert at the beginning of this opinion, it is obvious that, in most cases, the courts have considered the granting of an option not to be in the best interest of the estate and the beneficiaries thereunder, as is aptly stated in Moore v. Trainer, 252 Pa. 367, supra: "An executor or other trustee acts in a representative capacity and for the benefit of the cestui que trust. Persons dealing with him are bound to know the extent of his powers and, in absence of ratification by the cestui que trust the latter is not bound by the executor's acts in excess of his authority. . . This rule is necessary for the protection of the cestui que trust against unlawful acts of the trustee. When such acts are committed, the relation between the third person and the cestui que trust is not that of two persons contracting with each other but of one person dealing with another who has limited power to act for a third person, and of the extent of which power such third person has knowledge. . . Giving the option without requiring the other party [to the lease] to purchase was not an exercise of the power [under the will] to sell, but a surrender of it for the period of the lease, and therefore, the option was invalid. The executor was bound to sell for the price stated, without exercise of discretion at the time of the sale, and regardless of the question of possible increase in the value of the property between the beginning and expiration of the lease." And this is stated to be the rule in American Law Institute's Restatement of the Law of Trusts (2d Ed.), p. 422, § 190 (k) "whether the purchase price is fixed at the time of the giving of the option or is to be fixed by appraisal at the time of the exercise of the option." And the reason there stated is "that when a power of sale is conferred it is usually contemplated that the trustee exercise discretion at the time of sale and not at some prior time."

We think that the option to purchase contained in the ten-year lease of the realty, which was entered into between the parties pursuant to the sale of the capital stock of Leopold Adler Company, is invalid under the general rule.

2. The defendants in error insist that the plaintiffs in error received for the trust estate the benefit of the lease which contained the option, and were for that reason estopped to set up their want of authority to execute the option. In making this contention they have overlooked the principle that an executor cannot by his conduct expand or enlarge his power. "The intent of the testator, as the donor of a power governs. Mackay v. Moore, Dudley 94, 96; Berrien v. Thomas, 65 Ga. 61; City Council of Augusta v. Radcliffe, 66 Ga. 469, 474; Taylor v. Atkyns, 1 Burr. 60, 121; Thorley v. Thorley, 10 East. 442, 443; Daly v. James, 8 Wheat. 535, 536 ( 5 L. Ed. 670); 4 Kent's Com. (12th Ed.) 345. Consequently, a person claiming title under the execution of a power takes under the authority of that power. (Ib.; Bradish v. Gibbs, 3 Johns. Ch. M. P. 550; Doolittle v. Lewis, 7 Ib. 48); for an act done under a power must have its validity from the grantor of the power, and not from the person that executes it. Ibid.; Middletown v. Crofts, 2 Atk. 662. . . The authority to sell being derived from the power, it follows that the purchaser is bound to look for and to understand the extent of the power, or, as elsewhere expressed, `taking under the power, he is bound to see that its terms are complied with.' Ormsby v. Tarascon, 3 Litt. 410. And, of course in this, as in all other contracts, the object and design of the parties should be kept strictly in view, in ascertaining the nature and extent of the power.'" Satterfield v. Tate, 132 Ga. 256, 260, 261 ( 64 S.E. 60); Regents of the University System v. Trust Co. of Ga., 186 Ga. 498, 506 ( 198 S.E. 345); Newton v. Bullard, 181 Ga. 448, 453 ( 182 S.E. 614). The defendant in error was a legatee under the will and had full knowledge of the powers granted thereby, and he cannot claim an estoppel by conduct or in pais against the plaintiff in error, for her having signed the lease containing the option or accepting the benefits of the lease, which was, omitting the option, perfectly legal. See Coker v. Atlanta, K. N. Ry. Co., 123 Ga. 483 ( 51 S.E. 481); Bennett v. Davis, 201 Ga. 58 ( 39 S.E.2d 3, 7); City of Atlanta v. Anglin, 209 Ga. 170 ( 71 S.E.2d 419). Nor would the fact that, following the signing of the lease containing the option, one of the plaintiffs in error effected a dismissal of an action to remove her as co-executor — which had been instituted in the court of ordinary, appealed to the Superior Court of Chatham County, and there delayed upon condition that she agree to a sale of the capital stock of the Leopold Adler Company — estop the plaintiffs in error to deny that they were authorized to execute the option. This latter action had no bearing on the defendant in error's conduct in signing the contract for the purchase of the stock or the lease containing the option. It was not in any manner misleading, nor does it appear from the record that he was induced to pursue any course of action different from what he otherwise would have pursued had the action to remove the single plaintiff in error not been delayed or dismissed. Harris v. Woodard, 142 Ga. 297 ( 82 S.E. 902); 31 C. J. S. 239, Estoppel, § 59 (b); 19 Am. Jur., Estoppel, §§ 83-86.

For the foregoing reasons the trial court's decree is erroneous and must be.

Reversed. All the justices concur.