
    Matter of the Estate of Sophia L. Cobb, Deceased.
    (Surrogate’s Court — Westchester County,
    October, 1895.)
    In determining, whether there is an equitable conversion of realty under a will, it is the intent that governs and not the practical convenience or expedience of treating the decedent’s estate in one form rather than another.
    The mere fact that the assets, as shown by the inventory, are insufficient to pay all the legacies and trusts provided for in the will, and that a naked power of sale is given to the executors, is not sufficient to show an intent to create an equitable conversion, where a large portion of such legacies have lapsed and it appears that there has been a great depreciation in the valué of the securities.
    ‘ Even if the will works an equitable conversion, such conversion does not take place until after the death of the testator, and such realty is not taxable under the Transfer Act in a case where the realty as such is exempt under section 2 of the act.
    Appeal by the county treasurer from an order of the surrogate, confirming the report of the appraiser under the act in relation, tó taxable transfers of property, and adjudging that the estate of decedent was not subject to the tax.'.
    The following is the opinion of the appraiser:
    Middlebbook, Appraiser. This proceeding to determine the question of the amount of the transfer tax to be assessed upon the legacies under Mrs. Cobb’s will involves a construc.tion .of the will by the appraiser. .It, therefore, seems proper to submit the- reasons for the findings contained in the report' ■filed herewith. ■ - -
    It is claimed by the county treasurer that the will works an' equitable conversion, and that, therefore, the entire estate is Subject to taxation. While there might be questions raised as to whether, under the will, the legacies are charged upon ' the testatrix’ real estate (Lupton V. Lupton, 2 Johns. Oh, 623;' Hoyt Y...Hoyt, 85 1ST. Y. 142, 149, 150;., Briggs v. Carroll.,. 117 id.'288-292; Morris V. Sickly, 133 id. 456; Hogcm v. Ha/oa/naugh, 138 id. 417), that question may be eliminated as not being necessary to the determination sought.
    The questions- then remaining are: 1. Did the will work an equitable conversion; and, 2, if there be an equitable conversion, does the tax attach.? Taking these in order: 1. “Con- ■ version ■ arises only from , an express, clear' and imperative-direction, or from a necessary implication' of such express-, direction. The question of conversion.is one of intention, and ■ the question is, did the testator intend to have, his real estate ' converted into personalty immediately upon his death ? If he did, a court must give such intent - effect, and treat the realty as personal property from that time. If, however, he intended to give the executor or trustee under his will a power to convert, leaving it discretionary with" them to -convert or not,.' the conversion will depend on the will or discretion of the executor or trustee, and will not be regarded as consummated' in law until it is consummated in fact.” ' Clift v. Moses, 116 hi. Y. 144, 157.
    The cases fall, into two classes in accordance with the above definition. Those of the first .class.(where...the-will contains “ an express, clear and imperative direction ”■) are fairly. instanced by Moncrief v. Ross, 50 FT: Y. 431, and McDonald v. O'liara, 144 id. 566, and need no comment. The other class (where the intent to convert is implied) is illustrated by Dodge v. Pond, 23 FI. Y. 69; Power v. Cassidy, 79 id. 602 Lent v. Howard, 89 id. 169, and Délafield v. Bmlow, 107 id.' 535. An examination of these cases shows that in each instance the conversion is jmedicated upon the i/ntent of the testator as evidencing an imperative direction implied as necessary to cany out the scheme of the will. It is the intent that governs, and not 'the practical convenience of treating the decedent’s estate in one form rather than another. While inquiry into the conditions existing at the time of the making of the will is permitted, it is solely for the purpose of aiding the court in arriving at the intent, and convenience and', expedience have nothing to do with .the solution of the question.
    Fío express provision being made in the will for a conversion of the realty into personalty, every intendment is antagonistic to such an intention. If such had been the intention, it is to be presumed that apt and appropriate language would have been used to convey it, commanding and directing that this should be done. It would not have been left to be inferred by the use of ambiguous terms or doubtful phraseology, but the will would have contained positive provisions, indicating the testator’s intention. In White v. Howard, 46 FT. Y. 144, 162, it was laid down by Grover, J.,.that “ to constitute a conversion of real estate into personal, in the absence of an actual sale,, it must be made the duty of and obligatory upon the trustees to sell it in any event. Such conversion rests upon the principle that equity considers that as done which ought to have been done.” Hobson v. Hale, 95 FT. Y. 588, 605. “ While the will should be supported if it can be done upon any fair construction of it’s provisions, this rule has never been carried to such an extent as to hold’ that an-out-and-out conversion is to be inferred in the absence of imperative directions, expressed or necessarily implied, to the executors to sell the real estate.” Id. 608, 609.
    
      The will of Mrs. Cóbb'is simple and" presents no ambiguity., It contains, 1, certain legacies of specific' sums aggregating $3,500- in money ; 2, provisions for two trust funds aggregate $7,000, both of which lapsed by reason of the deaths of the. •beneficiaries before the testatrix; 3, a general bequest and devise of the rest, residue and remainder of her estáte, real, personal and mixed, to four children; 4, a power of sale by the executors. This will was executed November .14, 1885. By Codicils executed in 1890 and 1891 she made a further bequest of $1,500 and revoked one of- $500, so that the total ■ of the .legacies and trust, funds provided for was $11,500. (The legacies amounted at her death to only $4,500, the trusts being eliminated, supra. The inventory of the personal estate ' shows a total of $5,100. Upon these facts, that the will pro-. vides for the distribution of, $11,500 as personalty, and that it contains a naked power of sale, and that the inventory shows only. $5,100 of personalty, it is urged in behalf of-the county, treasurer that there is an equitable conversion. It is difficult to see how this contention, can be supported. The language of the will would-equally apply to fealty and personalty. Hobson v. Hale, 95 N-' Y. 59'8. And, moreover, it seems to recognize the distinction between them by the words employed.' ■ > -
    . The facts are not such as to disclose Such an intent (to convert) on the part of the testatrix. An examination Of. the inventory shows that the par value of the personal- estate would be $10,000, and that the. depreciation in the securities shown therein has occurred since the making of the will and Codicil. It may very well be that testatrix did not change her will in view of the depreciation and. consequent shrinking of her personal estate by reason of the fact that the deaths of the beneficiaries of the $7,000- had produced a lapse of her . bequest to that extent. Outside of the will itself there is lit* tie evidence to show what was in her mind as- evidencing her intent. ■ There is nothing - to indicate but" that at the time of making her-will testatrix’, personal estate fully equaled or. exceeded $11,500-. ' The rulé which might be deduced from' 
      McOorn v. McGorn, 100 E. T. 511, would, therefore, not' apply. The reasoning in Briggs v. Ca/rroll, 111 E. T. 288, 292, on the question as to whether a legacy was charged on real estate, would seem to he equally applicable to this casein that case Judge Finch says: '“We are very far from saying that a residuary clause, blending in its form of disposition both real and personal estate, will produce a charge upon the former for the payment of legacies wherever the personal estate proves insufficient. ' Eo such doctrine can be justified. The deficiency must exist when the will 'is executed, and be sc great and so obvious, as to jireclude any possible inference that the testator did not realize it, or that he may have expected and intended before his death to remove the' difficulty.” This is-especially pertinent in view of the fact that the questions-involved herein do not arise independently of the question whether the legacies, are charged upon the real estate. Eo such deficiency is shown to have existed at the time of the making of the will as, coupled with the will, would warrant the conclusion that the testatrix intended that her real estate should be converted into personalty, and the consequent implications of an imperative direction to convert. There; was, therefore, no conversion as of the daté of testatrix’’ death.
    If the executors did sell under the power, the conversion should not be “ regarded as consummated in law until it is; consummated in fact” (Olift v. Moses, supra), and such sale; does not make the proceeds taxable as personalty, the taxation being of the'date of the death.
    2. It is also our opinion that the estate would not be taxable even if the will did work an equitable conversion of the real estate into personal.
    It must be borne in mind that this proceeding is under a . statute imposing a tax. •• That statute must be reasonably strictly construed against the state. It might be seriously doubted if this equitable theory could be recognized at all in a statutory proceeding such as this. But it has been by a-surrogate of a remote western; county (In re Wheeler, 1 Mise-
    
      Rep. 450), who- says (at pp. 455, 456): . “ It is evident that if decedent.makes suck a testamentary disposition of Ms real estate as to convert it into personalty the shares of the legatees under such a. will are liable.” Satisfactory as his reasons for' so holding may have been to him, although they are not disclosed' in his opinion, diligent search does not disclose that, they have, been followed "by any other court. ■ Since the1 pub-' • lication of that decision the question seems to be necessarily decided by the decision of the Court of Appeals in the íloff-' mam, case, 143' E". Y.. 327. This last case calls our attention very sharply to section 22 of the act (Chap; 399, Laws 1892), which reads: “ The words ‘ estate ’ and £ property,’ as used in • this act, shall be taken to. mean the property or interest therein of the testator * * *" specifically exempted from the provisions of this act, and not as the property or interest' therein . passing or-transferred to individual legatees.” .
    ' The property of the testatrix sought to- be reached was real ' estate, which, by section 2, is exempt in this case. Even if it be. converted and.be distributed as personalty, “ the property or ' interest therein of the testator ■” was realty. The conversion' does not occur until after the death, and until after the dece- - dent parts with all “ estate.” and “ property,”
    It might also be remarked that grave doubt would exist if • it ever entered the> minds of the , legislators by whom this act was passed,, -when they sought to exempt real estate from the operation of the act,- that such things as equitable conversions existed,-still less that the courts would attempt to insert them in the act,' - ■ .
    The purposes and" theory of the exemption of real- estate from'the tax is apparent. ¡Personalty is ordinarily easily converted and can, therefore, "easily respondió such a tax without- - special hardship; ■ On the other - hand, real estate generally is slow'of sale, and its conversion is a matter" of time and.oppor- . tUnity; A tax.on real estate would inevitably work hardship- '-and' sacrifice.. For it must be -borne in. mind" that■ the act applies to ■ the: remotest rural district as well: as to metrovpolitan centres.-..While-' it' might, be an -.easy matter-to raise money in the latter on real estate, it is frequently and almost invariably a matter of difficulty, and not infrequently an impossibility, to do so in the former.
    The fact that probably ninety per cént of' the devises of real estate are to the classes exempt by section 2 of the act would make it all the more evident that the intent of the legislature was to altogether exempt real estate, except as to collaterals,' conversion or no conversion.
    
      James M. Sunt, for county treasurer, appellant.
    
      Leonard A. Bradley, for executors, respondents.
   Silkman, S.

The appraiser in this matter has given the question raised by the appellant careful consideration and has ' aided the court with a very well considered opinion, and the 'conclusion that there was no equitable conversion intended by decedent is correct. Appeal dismissed on the opinion of the appraiser, with ten dollars costs to be paid by. the county, treasurer.

Appeal dismissed, with ten dollars costs to be paid by. county treasurer. .  