ARTICLE 4 Executors, Administrators and Testamentary Trustees Section 110. Sales of real estate by executors under authority of will. III. 1Investment of trust funds by executor or administrator. 112. Executors de son tort abolished. 113. Special promise to answer for debt of testator or intestate. 114. Liability of executors and administrators of executors and administrators. 115. Rights of administrators de bonis non. 116. Actions upon contract by and against executors. 117. Administrators to have same rights and liabilities as executors. 118. Actions of trespass by executors and administrators. 119. Actions of trespass against executors and administrators. 120. 2Actions for wrongs, by or against executors or administrators. § 110. Sales of real estate by executors under authority of will. Sales of real estate situate within the state of New York, made by executors in pursuance of an authority given by any last will, unless otherwise directed in such will, may be public or private and on such terms as in the opinion of the executor shall be most advantageous to those interested therein. Formerly Laws of 1883, chap. 65, § 1: 1. Sales of real estate situate in the city and county of New York, or at any other place within the State of New York, made by executors in pursuance of an authority given by any last will, unless otherwise directed in such will, may be public or private and on such terms as in the opinion of the executor shall be most advantageous to those interested therein.3 Comment. As a general proposition of law, where executors do not expressly take a fee, they have nothing to do with the real 1 So in original. Cf. title, § 111, Decedent Estate Law. 2 As amended by chap. 240, Laws of 1909. 3 Repealed by § 130, Decedent Estate Law. 5 estate of the testator, unless there is a conversion made by the will, or an express devise to them of a power of sale. But by provision of the statute, executors and administrators may have recourse to the real property of testators when it is necessary for the discharge of debts. Where there is a mandatory power of sale in a will, the statute relating to sale for payment of debts is not however relevant." A power of sale is a trust of a power, or as it is now called by statute a power in trust," and it can be executed only in the manner and for the precise purposes declared and intended by the donor." 66 In the absence of express directions in the will itself, sales pursuant to trusts of powers are as a general rule subject to the rules regulating other trusts, and the executor or trustee of a power is subject to those rules which a court of equity follows, and the conscience of the court furnishes the exacting standards for the execution. It was for a long time a question, whether a trustee for sale simpliciter was not absolutely bound to sell in all cases at public sale. It was finally held that such sale may be by public auction or private contract, according as one or other mode is most advantageous under the circumstances. But this vague ruling leaves so many questions open that trustees usually are advised to sell at public auction.10 Occasionally acts of the Legislature direct the mode of sale," and then the statute is controlling. 12 This section of the Decedent Estate Law, now under consideration, is certainly calculated to relieve from some embarrassment those executors who act under a power of sale which does not in its limitation expressly regulate the manner of the sale.13 This section affords to such executors a wider and more liberal margin of discretion than 4 Russell v. Russell, 36 N. Y. 581, 583. See Fowler's Real Prop. Law (3d ed.), 469. 588 2472, 2750, Code Civ. Pro.; In re Place, 1 Redf. 276. 68 2749, Code Civ. Pro.; Matter of Gantert, 136 N. Y. 106; Holly v. Gibbons, 176 id. 520, 526. 78$ 99, 172, Real Prop. Law; Hetzel v. Barber, 69 N. Y. 1. 82 Spence, Eq. Juris. 917; 2 Sugden, Pow. 487; Lewin on Trusts, 484; Minuse v. Cox, 5 Johns. Ch. 441, 446. 9 Lewin on Trusts, 434; Perry on Trusts, $$ 780, 782. 10 Perry on Trusts, § 781. 11 See Insolvent Debtors' Act, 7 Geo. IV, chap. 57, § 20, and 2 R. S. 545. 12 Lawrence v. The Farmers' Loan and Trust Co., 13 N. Y. 200. 13 § 172, Real Prop. Law. did the stricter rules administered in courts of equity.14 Under this section executors acting under a power or authority to sell have statutory authority to sell either by public, or by private, sale, unless the grant of the power expressly prescribes the mode of sale. Formerly when the terms of such sale were left to the executors' sole discretion, the discretion of the executors was the discretion which the chancellor thought equitable.15 Thus it is apparent that this section is a very important qualification of the former rules in equity. In any charge of a breach of trust by executors by reason of a private or improvident sale for an inadequate price, this section is entitled to receive great consideration, and its precise meaning determined. That it is not intended to be declaratory of the former law on the subject seems apparent. That its application may be subject to very important qualifications in cases of actual fraud or negligence is also evident. But its precise reference to the older doctrines relating to the execution of trusts to sell does not seem to be fully deter mined by the adjudications of this State. 14 §§ 770, 780, 781, Perry on Trusts. 15 See above under this section, p. 491. § 111. Investment of trust funds. An executor, administrator, trustee or other person holding trust funds for investment may invest the same in the same kind of securities as those in which savings banks of this state are by law authorized to invest the money deposited therein, and the income derived therefrom, and in bonds and mortgages on unincumbered real property in this state worth fifty per centum more than the amount loaned thereon. Any executor, administrator, trustee or other person holding trust funds may require such personal bonds of guaranties of payment to accompany investments as may seem prudent, and all premiums paid on such guaranties may be charged to or paid out of income, providing that such charge or payment be not more than at the rate of one-half of one per centum per annum on the par value of such investments. But no trustee shall purchase securities hereunder from himself. Transcribed from § 21, Personal Property Law of 1909. § 21. Investment of trust funds. A trustee or other person holding trust funds for investment may invest the same in the same kind of securities as those in which savings banks of this state are by law authorized to invest the money deposited therein, and the income derived therefrom, and in bonds and mortgages on unincumbered real property in this state worth fifty per centum more than the amount loaned thereon. A trustee or other person holding trust funds may require such personal bonds or guarantees of payment to accompany investments as may seem prudent, and all premiums paid on such guaranties may be charged to or paid out of income, providing that such charge or payment be not more than at the rate of one-half of one per centum per annum on the par value of such investments. But no trustee shall purchase securities hereunder from himself. Formerly 9 of the "Personal Property Law," chap. 47, General Laws, as amended by chap. 295, Laws of 1902 and chap. 669, Laws of 1907, as follows: 8 9. Investment of trust funds.-An executor, administrator, guardian, trustee or other person holding trust funds for investment may invest the same in the obligations of a city of this state issued pursuant to law.16 16 Repealed except part relating to guardians and executors, administrators and other trustees of deceased persons by 80 of art. 5 of Pers. Prop. Law of 1909. CHAP. 295. AN ACT to amend the personal property law, relative to investment of trust funds. Became a law, April 2, 1902, with the approval of the Governor. Passed, three-fifths being present. The People of the State of New York, represented in Senate and Assembly, do enact as follows: Section 1. Section nine of chapter four hundred and seventeen of the laws of eighteen hundred and ninety-seven, entitled "An act in relation to personal property, constituting chapter forty-seven of the general laws" is hereby amended to read as follows: § 9. Investment of trust funds.-An executor, administrator, guardian, trustee or other person holding trust funds for investment may invest the same in the same kind of securities as those in which savings banks of this state are by law authorized to invest the money deposited therein, and the income derived therefrom, and in bonds and mortgages on unincumbered real property in this state worth fifty per centum more than the amount loaned thereon. 8 2. This act shall take effect immediately.16a CHAP. 669. An act to amend the personal property law, relative to holders of trust funds requiring personal bonds or guaranties of payment. Became a law, April 20, 1907, with the approval of the Governor. Passed, three-fifths being present. The People of the State of New York, represented in Senate and Assembly, do enact as follows: Section 1. Section nine of chapter four hundred and seventeen of the laws of eighteen hundred and ninety-seven, entitled "An act in relation to personal property constituting chapter forty-seven of the general laws," as amended by chapter two hundred and ninety-five of the laws of nineteen hundred and two, is hereby further amended to read as follows: § 9. Investment of trust funds.--An executor, administrator, guardian, trustee or other person holding trust funds for investment may invest the same in the same kind of securities as those in which savings banks of this state are by law authorized to invest the money deposited therein, and the income derived therefrom, and in bonds and mortgages on unincumbered real property in this state worth fifty per centum more than the amount loaned thereon. Any executor, administrator, guardian, trustee or other 16a Repealed except part relating to guardians and executors, administrators and other trustees of deceased persons by 80 of art. 5 of Pers. Prop. Law of 1909. |