Opinion
No. 49/605.
04-27-1921
SCHLOSSTEIN v. HENRY R. WORTHINGTON.
Schlosstein & Steinhardt, of Newark, for complainant. Davis & Hastings, of Jersey City, (William J. Davis, of Jersey City, of counsel), for defendant.
Bill by Frederick W. Schlosstein against Henry R. Worthington, a corporation for specific performance. Motion to strike out bill denied.
Schlosstein & Steinhardt, of Newark, for complainant.
Davis & Hastings, of Jersey City, (William J. Davis, of Jersey City, of counsel), for defendant.
FOSTER, V. C. This bill is filed to secure the specific performance of a contract between the parties, dated September 20, 1920, for the sale of certain lands in Harrison, this state; and, also, to obtain a declaration of the rights of the complainant to the premises in question under the authority of section 7 of the Chancery Act, P. L. 1915, p. 184.
The cause comes before the court at this time on defendant's motion to strike out the bill for want of equity, and because the allegations of the bill show that complainant cannot perform his agreement by conveying the premises under a valid title.
The facts on which the motion rests are: That complainant's title to the property is by a deed from the executors of George H. Phillips, deceased, who died testate, seized of the premises in question, some time prior to September, 1920 (and from others named therein), as grantors.
Defendant contends that under the will of George H. Phillips, his executors and trustees were without power and authority to sell and convey the premises to complainant; and that in consequence complainant is unable to give defendant a marketable title to the property, and is therefore not entitled to the relief he seeks.
By the will of Mr. Phillips, the residuary estate is bequeathed and devised to the executors in trust, and the executors are first directed to pay all debts, funeral and testamentary expenses; by the second paragraph, testator orders and directs:
"That all inheritance and transfer taxes on my estate and on any legacy and devise herein contained be paid by my executors out of the residue of my estate."
After disposing of personal and household effects and canceling certain debts and obligations, testator disposed of the residue of his estate, as follows:
"Fifth. All the rest, residue and remainder of my estate, real and personal, wheresoever and whatsoever, I give, devise and bequeath to my executors, to hold the same in trust, with full power to invest and reinvest the same, and the proceeds thereof, expressly authorizing them to continue any investment made by me and to dispose of the same as follows:"
(1) To pay the entire net income therefrom to his sister and brother for life.
(2) Upon the death of either sister or brother, to pay the entire net income to the survivor of them for life.
(3) If both the sister and brother named pre deceased him, then to pay such income to his other brothers and sisters and the survivor of them for life; and then testator directed:
"(4) On the death of the last surviving brother or sister, or upon my death, if they all predecease me, to pay and make over the corpus of said estate in equal shares to such of the children of my deceased brother Edward L. Phillips, and my sister Helen Phillips Tompkins as shall then be living. If there be no such children, then to pay and make over said corpus in equal shares to such of the children of my sister Josephine Phillips Skinner as shall then be living."
The sixth paragraph of the will appoints a brother and sister as executors of and trustees under the will.
It will be observed that no express power of sale is given to the executors or trustees, and there is nothing in the record to show the nature or extent of the residuary estate. From the provisions of the will, it is clear that various duties with respect to the residuary estate are placed upon the executors and trustees.
The determination of the present controversy in favor of the complainant must depend upon the finding that the duties thus imposed upon the executors and trustees necessarily carry with them a power of sale, in order to enable them to execute these trusts or to perform these duties.
The rule applicable to the situation is laid down by the Court of Errors and Appeals, in Chandler v. Thompson, 62 N. J. Eq. 723, 48 Atl. 583, as follows:
"Where no express power to sell lands is given in a will to the executor, such power will not arise by implication, unless the implication is clear from the terms of the entire will, and it must be found that some duty has been imposed by the testator upon the executor, which necessarily carries with it a power of sale, in order to enable him to perform the duty."
Illustrative of the class of duties, the performance of which necessarily implied a power of sale, is the case of Haggerty v. Lanterman, 30 N. J. Eq. 37, where, among other duties, the executor was directed to divide the estate, and also, to invest shares in part of the estate, such direction was regarded as contemplating a conversion of the real property into cash, with an implied power of sale for such purpose.
In Lindley v. O'Reilly, 50 N. J. Law, 649, 15 Atl. 379, 1 L. R. A. 79, 7 Am. St. Rep. 802, from the various duties imposed upon the executors, by the will, the court found an implied direction and power in the executor to sell the lands.
In Belcher v. Belcher, 38 N. J. Eq. 126, directions to pay some shares and implied directions to invest other shares involved the necessity of converting the land, and therefore an implied power of sale.
In Wurts' Ex'rs v. Page, 19 N. J. Eq. 365, it was held that a direction for the trustees to invest the proceeds of the estate indicated that a conversion of lands into money was intended, as the word "proceeds" implies a sale of the real estate.
In the recent case of Moore v. Wears, 87 N. J. Eq. 459, 100 Atl. 563, the trustee was expressly given the right to change investments, and was further directed, on the death of the life beneficiaries, to pay over the principal of part of the estate; and it was held that these duties imposed upon the trustee indicated an intention that the real estate was to be converted, to accomplish which an implied power to sell was found in the trustee.
In the present case the residue is expressly devised to the executors, in trust; they are directed to pay certain taxes therefrom; they are also to invest and to reinvest it, and the proceeds of (the sale of) it; and finally they are directed to pay and make over the residue in the manner and to the parties designated by the testator. To enable the executors to effectuate these objects and purpose of the testator in the disposition of his residuary estate, all powers necessary and indispensable to the execution of the trusts will, if possible, be implied, including a power of sale of the real estate. And as it is clear from the terms of the trust that the executors cannot perform their duties there-underwith respect to all of the objects testator had in view in the disposition of his residuary estate, without an estate in his lands, or power to convert them into money, then it follows that at least a power to sell the lands must necessarily be implied under these circumstances, and must be found in these executors; and in the exercise of this power they were authorized to convey the premises in questions to complainant; and he, as the holder of a valid title to the property, under this conveyance from the executors, can perform his agreement to sell and convey the same to defendant.
I will therefore advise that the motion to dismiss be denied.