[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 241
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 242 In the case of Fincke v. Fincke (53 N.Y., 528), we held that under the codicil now in question the beneficiaries were not entitled to any thing from the residuary estate, until by a sale of the land devised by the codicil, it should be ascertained that the proceeds did not amount to $30,000, and on that ground we reversed the judgment which gave them interest on that sum from the income of the residuary estate, from the time of the testator's death to the time of sale. The question whether, when the deficiency should be ascertained by a sale, interest should be allowed on such deficiency during the time the sale was delayed, was not decided, but was expressly reserved. (See opinion, p. 535.) That question is now distinctly presented. The sale has been made and the deficiency is ascertained. The appellants claim arrears of interest on the whole fund, but should that not be allowed they urge that they are entitled to interest on the amount necessary to make up the deficiency.
We are of opinion that the claim of interest on the whole *Page 244 fund of $30,000 cannot be sustained. By the original devise contained in the will nothing was given except the two blocks of ground described. These blocks were devised to trustees, in trust to sell and convert them into money, and invest the proceeds for the benefit of the three grandchildren named, in equal thirds, and apply the income to the use of such grandchildren respectively, during their respective lives, with remainder to their heirs respectively, the trustees being vested with a discretion as to time and manner of sale.
Under this clause, it is clear that no claim could, under any circumstances, arise on behalf of the grandchildren, against the personal or residuary estate of the testator. It is true that as between tenant for life and remainder-men, the rule has been adopted that where a testator gives property to trustees with an absolute trust for conversion, and with a discretion as to the time at which the conversion shall take place, if from any cause whatever, arising from the discretion and judgment of the trustees, the conversion is delayed, then the tenant for life is not to be prejudiced by this delay, but is to have the same benefit as if the conversion had taken place within a reasonable time from the death of the testator, which is usually fixed at twelve months from that period. (Yates v. Yates, 28 Beavan, 637, 639; Livingston v. Gray, 2 Sim. Stu., 396.) But that principle is inapplicable to the present case, the question not being between tenant for life and remainder-men.
The only change effected by the codicil was to provide that in case the proceeds of so much of the two blocks devised, as should remain unsold at the testator's death should not amount to $30,000, there should be added to such proceeds a sum of money out of the other portion of his estate sufficient to make such proceeds equal to the sum of $30,000.
This change appears by the codicil to have been occasioned in part, if not entirely, by the fact that after making the will the testator had sold part of the land devised, and contemplated that he might, before his death, make further sales.
We think that the effect of the codicil was to leave the devise of the land, or so much thereof as should remain, *Page 245 standing as in the will, and so far as such land was concerned, the beneficiaries were entitled to have the proceeds, when realized, invested for their benefit, and are not entitled to claim from the personal or residuary estate any arrears of interest on the amount of the proceeds of the land. If thecestuis que trust for life have, by the delay in the sale, sustained any loss of interest on the proceeds, that is a matter between them and the trustees or remainder-men.
But by the codicil there was added to the devise of the land a bequest, payable out of the residuary estate, of a sum of money sufficient to make up the difference between the amount of the proceeds of sale of the land, and the sum of $30,000, and the amount of this deficiency having now been ascertained, the question is from what time it should draw interest.
Several circumstances must be taken into consideration in passing upon this question. It appears by the findings in the case that the residuary estate of the testator consisted of bonds and mortgages, government bonds, stocks and real estate, and produced a large income. So long as the sale of the land in question was delayed, the residuary estate enjoyed the benefit of the income of the sum necessary to make up the deficiency, and the beneficiaries under the trust were deprived of the same amount of income. This has been deemed a sufficient ground for allowing a legatee for life interest on a fund before it was gotten in and invested as directed in the will. (Taylor v.Clarke, 1 Hare, 161.) In the present case there is the additional circumstance that part of the land originally intended to be devised was converted during the life time of the testator, and the proceeds went to swell the residuary estate, which was productive of income, and the bequest now under consideration was intended to stand in the place of the land so converted. Furthermore, the proceeds of the lands, together with the sum necessary to make up the deficiency, were to be invested for the benefit of the three grandchildren, and they were to have the interest upon it during their lives. As to the land it may be said that so long as it remained unsold the rents stood in the place of the interest, but as to the sum *Page 246 necessary to make up the deficiency, the grandchildren cannot be said to have received the income of that during their lives, if interest thereon does not commence until the precise amount is ascertained by a sale, which, in the present case, was postponed for upwards of eight years. In some cases where the amount of the fund cannot be ascertained till a period after the testator's death, but the bequest is of the interest on such fund during the life of the legatee, it has been held that to carry out the intention of the testator the legatee for life must be allowed interest on the fund as afterwards ascertained, to be computed from the death of the testator. (Williamson v. Williamson, 6 Paige, 298; Gibson v. Bott, 7 Ves., 89.) This rule is especially equitable when the fund has all the time been yielding income in the hands of the executors. (See Hilyard's Estate, 5 Watts Serg., 30.)
For these reasons we think that the grandchildren are entitled to interest on the deficiency demonstrated by the sale, from the time of the death of the testator, and that the judgment of the General and Special Terms should be modified accordingly, without costs to either party in this court.
All concur.
Judgment accordingly.