Knapp v. Nissley

Opinion by Mr. Justice Moschzisker, This is an appeal by the defendant from a judgment for the plaintiff, entered on a case stated. The points involved are: (1) Can a testamentary power to sell real estate after the death of a life tenant be exercised by a trustee before that event, if done with the former’s consent, and for the purpose of an ultimate distribution of the testator’s estate? (2) When the life tenant, himself, purchases the. property in question from the trustee, should such a sale be declared invalid in an action of assumpsit instituted more than 23 years thereafter by the administrator c. t. a. of the then deceased cestui que trust, to recover purchase-money from one who subsequently bought the premises at a public vendue duly ordered in a judicial proceeding, such personal representative being authorized and directed to execute a deed and collect the fund; there being no attach in the suit at bar upon the sufficiency of the consideration paid by the life tenant at the time of the sale to him, and no allegation or proof of a fraudulent purpose to defeat or destroy the trust; it appearing, moreover, that, “immediately after acquiring the property, Sprenger (the life tenant) made extensive improvements” thereto, and that the purchase-money paid by him had been distributed to those ultimately entitled to the testator’s estate under the provisions of the will containing the power of sale? The governing facts set forth in the case stated are as follows: Adaline Sprenger, who was the wife of John Abraham Sprenger, died, testate, June 5, 1892; she willed all her estate to Frank R. Diffenderffer, her executor, in trust, to pay the income therefrom to her husband for life and, after his death, to sell the property and divide the proceeds among certain designated legatees. At the death of the testatrix, she owned, inter alia, a property, No. 142 East Chestnut street, in the City of Lancaster. On July 28,1892, Diffenderffer, the trustee, sold [382] and conveyed these premises to Sprenger, the life tenant, for the price or sum of $3,000, $1,500 thereof being secured by a purchase-money mortgage, which was subsequently paid off, and the remaining $1,500 being paid by the purchaser assuming an existing encumbrance against the property, in that amount. It was, in effect, conceded that the consideration paid by the life tenant represented a fair price for the property at the time of the conveyance to him, and there was no allegation of any fraudulent intent or purpose to overcome or destroy the trust. The legatees who, upon the death of the life tenant, were entitled to the proceeds of testator’s real estate, never objected to the sale in question, and, when the latter’s executor and trustee filed his final account, charging himself, inter alia, with the proceeds therefrom, the “money was distributed to (such) heirs.” Sprenger, himself, occupied the property from the time of its purchase, July 28, 1892, to the date of his death, September 28, 1914, and, during such occupancy, he spent considerable money in improvements, which greatly enhanced its value. The clause of the will under which the trustee was empowered to sell is as follows, viz: “Item. After the death of my said husband, J. Abraham Sprenger, it is my will and I do hereby direct that my executor shall sell all my real and personal estate that shall remain in the hands of the said trustee and the proceeds of such sale or sales and all other moneys that may belong to the estate shall be divided into four shares; one of which I give and bequeath to the children of my sister-in-law, Martha Connell, in equal shares; one to the children of my brother-in-law, George F. Sprenger, in equal shares; one to the children of Anna Sarah Diffenderffer, wife of Frank R. Diffenderffer, in equal shares, and one to Herbert E. Eicholtz.” In holding that the clause just quoted sufficiently empowered the trustee to make the sale here under attack, and that it should not now be declared invalid, the court [383] below said: “It is well settled, as stated by Justice Mitchell, in Hamlin, Admr., v. Thomas, et al., 126 Pa. 20, that ‘powers must be strictly pursued, and a power to be exercised upon a given event cannot be properly executed before the happening of that event; but the exception is equally well settled that, where the power is complete, but its exercise is postponed for the benefit of a particular person, the consent of that person will be equivalent to the happening of the stipulated contingency.’ In the case at bar the power of the trustee to sell is complete, though its exercise is postponed for the benefit of J. Abraham Sprenger until his death; that it is done for his benefit is clearly shown in the will where the 'testatrix says that she puts the property in trust for the benefit of her husband only because she does not want it made liable for debts incurred by him in some previous unfortunate (business) ventures. He (the life tenant) consented to the sale by the trustee to himself for the purpose of distribution, as is shown by the fact that he took the deed, gave a mortgage for the portion of the purchase-money which he subsequently paid off, and took possession of the property, making valuable improvements upon it. Consent in such case need not be shown by deed, but can be proven by the words or actions of the parties implying it: Gast v. Porter, 13 Pa. 533; Brown’s App., 27 Pa. 62; Hamlin v. Thomas, 126 Pa. 20...... We are of the opinion that the trustee sold for the purpose authorized in the will, that is, for the purpose of distribution, and it does not matter whether the distribution was to be at once or not; this view is supported by the case of Styer v. Preas, in 15 Pa. 339, and Styer’s App., 21 Pa. 86......The sale was for the purpose of distribution, though it does not appear that an immediate distribution was intended......; this, however, was a matter between the trustee and those to whom the proceeds of sale were to be paid according to the terms of the will of Adaline Sprenger, deceased. We do not think, however, that the intent of the trustee, or of J. Abraham [384] Sprenger, as to -whether the distribution was to be immediate, affects the title conveyed by the sale. The rights of those interested were fixed by law when the sale was made. If the consent of J. Abraham Sprenger to the sale was a relinquishment of his right to enjoy the property during his lifetime, which is contrary to the dictum in Styer’s Appeal, supra, an immediate distribution should have been made, and it was the duty of the trustee to have made it, or the persons interested could have compelled him to do so. The money was not distributed for twenty-three years after the sale, which was after J. Abraham Sprenger’s death. Of this certainly no one can complain but those entitled to receive it. They have not complained, though they had opportunity to do so, having-been given due notice that the proceeds of the sale were to \be distributed in the Orphans’ Court. On the contrary, each one has accepted his or her share in the purchase-money, and released the trustee from any liability because of it; they have, therefore, acknowledged the legality of the exercise of the power of sale of the land in question by the trustee, at the . time and under the circumstances under which he exercised it, and are es-topped from ever questioning it.” Rife v. Geyer, 59 Pa. 393, relied upon by the appellant, may readily be distinguished from the present case. The real questions there determined concern the character of the trust then before the court — whether active or passive — and the applicability of the Rule in Shelley’s Case. Moreover, the report of Rife v. Geyer indicates that there was no consideration given by the life tenant when the trust property there involved was conveyed to him, and that the conveyance was for the very purpose of destroying the trust created by the testator; whereas, here there was no such intention, and the price paid, the sufficiency of which is not questioned, was immediately substituted for the real estate. Mr: Chief Justice Brown took no part in the decision of this case, since, while at the bar, he at one time acted [385] as attorney in matters connected with, the property now in controversy, and his name appears as a witness on the deed to the life tenant. We conclude that the questions stated at the head of this opinion were correctly decided by the court below. The assignment of error is overruled, and the judgment is affirmed.