This action was brought for the construction of the will of Peter S. March, who died in the city of New York on February 11th, 1899. The questions litigated arise under the fifth clause of the will, by which the testator devised the residue of his estate, real and personal, to his executors and trustees in trust:
"First. That my Executors and Trustees sell, convey and dispose of the same at public or private sale at such times and on such terms as they may think proper.
"Second. That my Executors and Trustees invest and keep invested during the life of my wife one-third part of such residue of my estate, or the proceeds thereof, and pay or apply the rents, interest and income thereof to the use of my wife so long as she shall live.
"Third. That my Executors and Trustees divide the remainder of such residue (and on the death of my wife the one-third part held for her benefit) into six equal parts or shares, and convey, pay and assign one of such shares to my son Edwin P. March, first deducting the said sum of Fifteen thousand Dollars as herein directed; that they convey, pay and assign one other of such shares to each of my sons, Frank P. March and Egbert G. March, absolutely; that my Executors and Trustees set aside and designate one of the remaining three shares for each of my daughters, Virginia A. March and Laura J. Adams, and son Seth S. March, and hold, invest and keep invested the share of each child last named during his or her life, and collect and receive and pay or apply the rents, interest and income of the share of each child to the use of such child during his or her life, and upon the further trust,
"Fourth. That in the event of the death of any of my children before the conveyance and payment to him of the *Page 121 share of my estate herein given to him, or of either of my children whose share of my estate is held in trust, that my executors convey, pay and assign the share of the one so dying to his or her issue absolutely, and if he or she shall leave no issue, then that they convey, pay, assign and divide such share or the proceeds thereof to and among my surviving children and to the issue of any deceased child, such issue to take by representation the part or share his, her or their parents would have been entitled to, if living."
The testator's wife predeceased him. The testator's son Frank P. March died testate on May 10th, 1900, leaving a widow and daughter, Mary M. Kennedy, his only heir at law and next of kin. Peter March, at the time of his decease, was the owner of real property in the state of Virginia which was not sold by the executors and trustees until after the death of Frank March, but the latter received during his lifetime his share of the other parts of his father's residuary estate. The present contest is between the personal representatives of Frank March and his daughter, Mary Kennedy, and the most important question is as to their respective rights in Frank's share, or what would have been his share had he lived, in the proceeds of the sale of the Virginia property, the personal representatives of Frank claiming it under the third subdivision of the fifth clause of Peter March's will, the daughter claiming under the gift over or substitutional gift contained in the fourth subdivision. As to two propositions there is no dispute: First, that the power of sale was mandatory, and hence there was an equitable conversion of the lands in Virginia into personalty; second, that under the fourth subdivision, standing alone, Frank would have acquired on the testator's death an indefeasible title to his share of the estate. The respondent, however, contends that the proceeds of the Virginia property not having been paid to Frank, she is entitled under the fifth clause, which directs that in case of the death of any of the testator's children "before the conveyance and payment to him of the share of my estate herein given to him," the executors shall convey, pay and assign *Page 122 such share to his or her issue. This branch of the controversy turns wholly on the interpretation to be given to the words "conveyance and payment." If those words mean the actual payment in hand to the son in money, then the respondent, the daughter, is entitled to the fund, and so the courts below have held. On the other hand, if, as the appellants contend, the words are to be construed as meaning before the son is entitled to the fund or the same is payable to him, then the fund should be paid to the personal representatives of the son.
While, literally construed, the words would signify actual payment, the results of such a construction have seemed to the courts so unreasonable that they have refused to accord to them that interpretation unless when the intent of the testator has been expressed in language so clear and positive as to leave no room for possible doubt. The objections to a literal interpretation are that it would not only leave the objects of the testator's bounty subject to accident, which he could in no manner foresee, but also empower those intrusted with the execution of his will to vary or change those objects, at least to some considerable degree, at their own pleasure. If actual physical transfer of the fund into the hands of the legatee is necessary to constitute payment, in default of which the gift over or substitutional gift takes effect, then any delay in carrying the provisions of the will into execution, any litigation over the probate of the will or as to its assets after probate would divert the testator's property from one channel into another. These considerations led Lord THURLOW, over a century ago, to reject the literal interpretation, saying: "Suppose he had given a real estate in the manner you specify, it is clear that it will neither depend upon the caprice of the trustee to sell, for that would be contrary to all common sense, nor upon his dilatoriness; in some way it may be sold immediately; but I should not inquire when a real estate might have been sold with all possible diligence." The respondents' counsel places great reliance upon the case of Johnson v.Crook (L.R. [12 Ch. Div.] 639). There the direction of the will was: "But in case the said Thomas Keeling *Page 123 shall depart this life before he shall actually have received the whole of his share * * * and whether the same shall have become payable or not, I direct * * * such part and parts thereof as he shall not have actually received as aforesaid, shall be paid, assigned and transferred unto the said Joseph Gill." In the face of such language there was no room for doubt as to the intention of the testator. Counsel for the primary legatee did not question the construction of the will, but contended the gift over was void for uncertainty, as whether it took effect or not might depend on the diligence or dilatoriness of the executor. It was the validity of such a gift, not the interpretation of the testator's language, that was considered in that case, and there is nothing contained in the opinion of the master of the rolls inconsistent with the doctrine of the earlier cases. In fact, the master of the rolls concedes the doctrine of those cases as to the interpretation of such a provision in a will, but contends they are not authority for the proposition that if the direction of the testator, to make the gift over depend on the absence of actual payment, is indisputedly expressed the gift would be void.
The argument of Lord THURLOW is presented in substance though very much elaborated in McKinstry v. Sanders (2 Thompson and Cook, 181), which case was affirmed by this court on the opinion rendered in the Supreme Court. There was a direction to sell and convert the real estate, pay debts and certain legacies, provide for certain annuities, and upon the settlement of the estate, if it did not exceed the sum of twenty thousand dollars, pay over the moneys remaining to the trustees of a church, but if upon settling the estate there should remain more than twenty thousand dollars, then divide the excess to the testator's nephews and nieces "who shall then be living, to be equally divided between them." It was held that the representatives of the nephews and nieces who survived the testator, but died before the real estate was converted or the estate settled, were entitled to share in the distribution. It was there said: "In the case of Mrs. Sanders (a niece) the property was all in existence when the testator *Page 124 died, and one year afterward, when she died. Perhaps, with reasonable expedition in the transaction of the business, the executor may have been able to realize from the real and personal estate, so as to have ascertained what the fund was and have been ready to distribute, if the law would allow such distribution, before her decease. Can it be said that because this was not done that she lost her right to the legacy, and it never became vested. I think such a rule would be at war with the intention of the testator, and cannot be upheld upon any legal basis." Again, in reference to the power of sale, it is said: "Strictly construed, he was also at liberty to wait until all died but himself before making a settlement, and thus secure to himself, if he should survive, the whole estate which remained. Conceding that this time should be reasonable, and that the executor might be compelled to distribute, by an action at law, still, before the case could be brought to a final determination, some one or more may have died and by the delay have been deprived of the interest intended to be bequeathed. It cannot be supposed that the testator could have had any intention thus to vest the executor with a power so arbitrary." All this is equally true of the case before us, and though it is conceded that the executors properly discharged their duties (which was equally the fact in the McKinstry case) the question is not what has been done, but what might have been done.
But in my view it is unnecessary to pursue the argument, for in the disposition of this case we are concluded by authority. InFinley v. Bent (95 N.Y. 364) the testator directed his executors to convert his real estate, divide the proceeds thereof into shares and invest the same for the benefit of his children, paying the income to them respectively. At the expiration of one year from his death they were to pay each child out of the principal of his share seven thousand dollars; at the expiration of two years thereafter five thousand dollars, and at the expiration of five years the remainder of the share. The will then provided that in case of the death of any child "before the full payment of the whole of his or *Page 125 her share of such residue" the executors should pay the share of the child, or so much thereof as then remained unpaid, to his or her lawful issue. A child died after the lapse of five years, but the real estate not having been sold at that time, the whole of the share was not received by her. There the contest was, as in the present case, between a grandchild and the representatives of its parent over the proceeds of real estate sold after the parent's death. This court stated the general rule to be: "A limitation over, to take effect in case of the death of the legatee before he has received his share, does not take effect if the legatee lives to become entitled to it, though he die before it has been paid," and held that the representatives of the daughter of the testator were entitled to the fund.
It is urged that the proceeds of the real estate could be payable only after the real estate was sold, because until such sale it was physically impossible there should be any proceeds to pay. This argument overlooks the fact that in law the conversion of the real estate is held to take effect as of the instant of the testator's death, and that when actually made the condition of the proceeds relates back to that time. From the moment of the testator's death the conversion took place and the land became money for all purposes of administration. (Horton v. McCoy,47 N.Y. 21; Fisher v. Banta, 66 N.Y. 468.) Nor is this a mere legal fiction; on the contrary, while the land would descend to the heirs at law subject to the execution of the power, such heirs would take only a naked title, and the rents and profits of the land prior to the sale would go, not to the heirs, but to the legatees of the proceeds of the sale. (Moncrief v. Ross,50 N.Y. 431.) Such legatees may, if under no disability, with the concurrence of all, elect to take the land and thus defeat a power of sale. (Greenland v. Waddell, 116 N.Y. 234.) Therefore, until the exercise of the power of sale the testator's son Frank was the equitable owner of his share of the father's real estate, and the transfer and conveyance to him was immediate on his father's death, by the terms of the latter's *Page 126 will. Hence, if we look at what may be termed the physical attributes of the property, the only effect of a subsequent sale under the power was to transmute what Frank already possessed as land into money. But the question was in the Finley case the same as it is in the present one, and there it was as impossible to physically pay over the proceeds of land as it is here. Nor is there any difference in the provisions of the two wills that affect the question. There the payment and transfer was to be made after the lapse of years; here the gift to the testator's sons is immediate, for no formal conveyance by the executors is necessary.
Lastly, it is urged that the construction of the appellants renders the fourth subdivision meaningless or unnecessary. Not so. As to the share of any son dying before the testator, it was intended to vest such share in his issue. It is true that such a provision, in case of the death of a child before the testator, is, under our statute, now unnecessary; nevertheless it is constantly inserted and properly so, because the testator may leave real property in jurisdictions where no such statute exists. Moreover, there was one contingency and that one contemplated by the testator and appearing on the face of his will, in which the provision would be both effective and necessary. Had the testator's widow survived him and any child died before her death, then under this clause such child's share in the trust fund for the widow would go to his issue and not to his personal representatives.
I am of opinion, therefore, that so far as relates to the proceeds of the Virginia real estate the judgment below should be reversed and the fund awarded to the appellants.
A further question was litigated on the trial and has been decided by the judgments below of the rights of the respective parties to share in the trust funds provided for the testator's daughters, in case any such daughter should die without issue; that is to say, whether in such case a share of the fund should be awarded to the appellants or to the respondents. The courts below have held that in that event the respondent will take. We think this decision correct. There *Page 127 is no direct gift in such contingency of the remainder of the share, and the general rule is "where the only words of gift are found in the direction to divide or pay at a future time, the gift is future, not immediate; contingent, not vested." (Matterof Crane, 164 N.Y. 71; Matter of Baer, 147 N.Y. 348; Rudd v.Cornell, 171 N.Y. 114.) It must be confessed that this rule readily yields to anything in a will which appears to indicate a contrary intention, but in the present case, so far from there being anything in the will to indicate such an intention, the application of the rule harmonizes with the general testamentary scheme that interest should not vest until there is a right of present enjoyment.
The judgments of the Appellate Division and of the Special Term should be modified in accordance with this opinion, with costs to both parties payable out of the fund.
O'BRIEN, VANN and WILLARD BARTLETT, JJ., concur with HAIGHT, J.; WERNER and HISCOCK, JJ., concur with CULLEN, Ch. J.
Judgments affirmed.