author: Nov. 20. Bosworth, J.,

text:
    Sweezy and wife, and Webster and wife, Respondents, v. Thayer, Public Administrator, Appellant.
    (Before Duer, Campbell, and Bosworth, J.J.)
    October 20;
    November 20
    When at the time of the sale of mortgaged premises under a decree of foreclosure, the equity of redemption therein is owned by a minor, and a surplus arises from the sale, his interest therein is deemed real estate, and will be disposed of as such at his death, if he dies under age.
    Such surplus will not be converted into personalty, even when it has been invested by the court in personal securities for the benefit of the infant.
    When an infant’s real estate is converted into money for a particular purpose, the whole surplus,'after satisfying such purpose, will be regarded as land.
    The law will not allow a conversion thus produced'to have the effect of altering' his power of disposition over the property, so as to enable him to dispose of it as money, where he could not as land.
    The court will so control the proceeds until he becomes of age, that he may take it as money or land, as he may then elect.
    If he dies under age it will be subject to the same law of succession, as the property which produced it.
    This action was brought to recover a fund in the hands of the public administrator, as the administrator, &c., of a deceased infant, Charles W. Willis. The plaintiffs, Mrs. Sweezy and Mrs. Webster, claimed to be entitled to the fund as the next of kin and heirs at law of the infant, but the answer of the defendant denied their title and set np as preferable, that of John Willis, the grandfather of the deceased. The question raised by the pleadings was whether the fund, at the death of the infant, was real or personal estate.
    The cause was referred to Murray Hoffman, Esq., who in May term, 1852, made the following special report, accompanying the report with the opinion subjoined:

      In pursuance of the rule of this court in the premises, and upon the application of the defendant, I submit to this . court the following special report.
    Upon the reference before me, I found from the pleadings and admissions the following facts:
    That Joseph O. Bogert, formerly of the city of New York, was seized of certain premises situated therein, and while so seized, mortgaged the same prior to the year 1835, and that such mortgage came by assignment to the mayor, aldermen, and commonalty of the city of New York.
    That said Joseph O. Bogert died seized of such premises subject to such mortgage, and that the same descended, upon his death, to his daughter Jane L., afterwards married to John A. Willis.
    That the said Jane L. Willis died seized of such premises some time in the month of October, 1842, leaving her husband her surviving, and one child, Charles Henry Willis, an infant under the age of twenty-one years, and that the title to and estate in such premises descended to the said infant, subject to said mortgage.
    That John A. Willis, the husband of the said Jane L., departed this life in the year 1845.
    That on or about the 1st day of January, 1844, proceedings were instituted for the foreclosure of such mortgage, and a decree of sale having been obtained, the same were sold at some time previous to the 28th of September, 1844, and that after paying the' costs and the amount due upon such mortgage, there remained a surplus of $4,175, which sum was paid into the hands of the assistant register or clerk of the Court of Chancery to abide .its order.
    That upon an order of reference for that purpose such surplus was reported to belong to the said infant, Charles Henry Willis, and the balance, being -forty-one hundred dollars, was invested by order of the Court of Chancery in a bond and mortgage for the benefit of the infant, and the interest thereof paid from time to time to his guardian for his use.
    That such infant died on or about the 27th day of November, 1850, in the city of New York, where he then resided, still under age, viz. of the age of eighteen years, unmarried and leaving no issue, nor father, mother, brother, or sister, neither a grand-parent on the mother’s side.
    That such infant left him surviving the plaintiffs, Sarah Sweezy and Josephine O. Webster, the only sisters of his said mother, Jane L. Willis, and his maternal aunts—and also John Willis, his grandfather on the paternal side, who is now living.
    That the mortgage hereinbefore mentioned, as given by the said Joseph O. Bogert, was in the usual form with a power of sale, and covenant to render the surplus of-a sale, if any, to the mortgagor, his heirs, executors, administrators, or assigns..
    And that the defendant, the public administrator, was, on the 29th of April, 1851, appointed administrator of the said Charles Henry Willis, and took possession of the securities in which such surplus money was invested by order of the Court of Chancery, as-aforesaid.
    Upon which facts my conclusions of law were, that if the fund was at' the death of the infant to be regarded as personal estate, it belonged to John Willis, the paternal grandfather, as the next of kin. But that such fund had not, for the purposes of descent and devolution, been converted into personal estate; but was to be considered for such purposes as real estate,'and therefore belonged' to the plaintiffs, the maternal aunts of the infant.
    All which I respectfully submit.
    Muebay Hoffmax, Eeferee.

      New York, May 3d, 1852. . .
    opinion OF BEFEEEE.
    I. I cannot entertain the slightest doubt that if the fund in • court was, at the death of the infant Charles Henry Willis, personal estate, the grandfather is entitled to it. He undoubtedly is nearest of kin, he is in the second, and the aunts in the third degree. (Kent’s Commentaries, vol. ii., page 424. Bogert v. Furman, 10 Paige, 500.) The important question then is, What was the nature of the fund in question at the time of the death of the infant?
    H. 1st. The great mass of cases connected with this point depend upon the provisions of a deed or will, and upon the solution of the .question, whether the testator or grantor meant to impress upon money the character of land, or upon land the • character of money.

      Thus the great case of Archroyd v. Smithson (1 Br. C. R. 506) was determined for the heir-at-law on the principle, that although the testator had directed the fund to be converted, he had done so with an intent to give it to particular persons, and if the shares did not go to these persons, they should not be considered as converted, but that the testator as to them died intestate,

      Robinson v. Taylor (2 Br. C. R. 589), another leading case is of the same class. The devisor gave all the residue and remainder of his real and personal estate, after certain legacies,, to his executors thereafter named, upon trust, to sell and dispose of his houses and lands for the best price, &c., and out of the moneys arising therefrom, as well as out of the remaining part of his personal estate, to pay certain annuities and certain legacies. The interest of the residue was given for life, and no disposition made of the capital by a residuary devise or otherwise.
    All the real estate was sold. The heir-at-law insisted that although the real estate was by will directed to be sold, yet inasmuch as the money arising therefrom was not disposed of, such money should be considered as of the nature of land and as belonging to him, and so it was decreed.
    Sir John Leach, in Smith v. Caxton, (4 Mad. Rep. 484,) took great pains in classing the cases and stating the result.
    “Where the devisor directs his real estate to be sold and the produce applied to particular purposes, and those purposes fail partially, the heir-at-law is entitled to that part of the produce which in the events is thus indisposed of. The heir-át-law is entitled to it, because the real estate was land at the devisor’s death, and the part of the produce is an interest in that land not effectually devised, Under every will, when the question is whether the devisee, or the heir failing the devisee, takes an interest in land, as land or money, the true inquiry is, whether the devisor has expressed a purpose that in the events which have happened the land shall be converted into money.”

      Cogan v. Stephens, (Rolls, 24, Nov. 1835. 1 Beavan, 482 N.) Lewis Stephen by his will directed his executors to lay out immediately the sum of £30,000 in the purchase of an estate, the income of which he gave to one for life, with remainder tq others in tail, subject to which to go to a charity. The money was not paid out, when the limitations prior to that to the charity became exhausted, and the gift of the charity being void under the statute of mortmain, it was held, that the next of kin, and not the heir-at-law of the testator, was entitled to the funds. See the ease at length, Lewin on Trustees, p. 366, Appendix.
    One other case may be usefully referred to, as it went to the House of Lords. Cookson v. Reay, (5. Beavan, 21 Clark and Finelly, 121.) The question was whether a sum of money ought to be considered as real or personal estate. Whether it belonged to the heir or personal representative of Isaac Cook-son. And the principle upon which the decision was made is thus stated by Lord Cottenham.
    “ AH the cases estabhshed this—That where the conversion has not, in fact, taken place, and the interest vests absolutely, whether in land or money, in one person, any act of his' indicating in which character he takes or disposes of it, will determine the succession between his personal and real representatives.”
    It is too late at this day to sustain the dictum of Lord Bosslyn, that the court had nothing to do but to dispose of the fund according to its existing nature. It is contrary to the whole doctrine of equitable conversion, and Lord Eldon and a host of cases overthrow it. What the fund ought to be, not what it is, is the question, (7 Hare, 299.)
    This class of authorities do undoubtedly furnish a rule by analogy. Tet none of them supply one entirely decisive, because we have nothing to indicate any intention whatever on the part of the creator of the charge and of the power to sell, as to the intent of his will for the change of property.
    The mortgage in the present case was in the usual form, the power of sale had the usual clause for the payment of the surplus purchase money, to him, his«heirs, executors, or assigns. The creator of the charge thus left the disposition of the surplus to the operation of the law.
    2. Again, in the case of Wright v. Rose, (2 Sim. and St. 323,) we have the law laid down in case of a sale under a mortgage. A mortgage deed contained a power of sale, and the surplus was to be paid to the mortgagor, his executors or administrators. After the mortgagor’s death the property was sold under the power, and a considerable surplus remained. ' The vice-chancellor said, “ If the estate had been sold by. the mortgagee in the lifetime of the mortgagor, then the surplus money would have been personal estate of the mortgagor. But being unsold the equity of redemption descended to the heir, and he is entitled to the surplus.” Recognised in Cox v. McBurney, 2 Sand. Sup. C. Rep. 562.
    On what does the decision in this case upon both points depend? On a consideration applicable to the case of an adult only.
    If the mortgagor submits to a sale, the inference is that he does so because he deems it expedient to convert the land into money.
    The. case supposed is one of an estate of undoubted value beyond the charge. He does not choose to pay the amount from other funds if he have them, or to raise the amount by a transfer of the mortgage, This reasoning is of course inapplicable to an infant.
    So if the heir is an adult, and the land is sold under a mortgage after the mortgagor’s death, the heir or devisee is the owner, and virtually elects a conversion of the property into money. He takes the surplus because he is owner, but he takes it in the character of money by his own act or consent.
    3. Again, the cases to which I called the attention of coun- . sel, after the argument, have much weight upon the question.

      Dixon v. Dawson (2 Sim. and St. 327) was the case of lands vested in trustees to sell, and out of the proceeds to pay her testamentary expenses -and a certain class of legacies. Philip Dixon was the heir-at-law of the testator, and the trustees sold the real estate in his lifetime. . He died, leaving three children his executors. The oldest was also dead, leaving Sarah, his heir-at-law, and personal representative.
    The claim to the surplus proceeds, after discharging the amounts directed to be paid, was between the residuary legatee and the heir-at-law.
    It was held, that the residuary clause was not sufficient to carry the surplus, whiph therefore belonging to Philip Dixon, in Mg life, as he died after the sale and before the trusts of the will were completed, the question was, whether the surplus vested in him as land or money. The vice-chancellor said,"“I adhere to the principle which I stated in Smith v. Caxton, that where the whole land is properly sold by the trustees, and there is only a partial disposition of the produce of the sale, then the surplus belongs to the heirs as money; not as land." The surplus in the present case therefore belongs to the personal representative of PMlip Dixon.”
    I have stated tins case particularly, as it was probably the main authority on wMch the case of. Graham v. Dickinson, (3 Barb. Ch. Rep. 180,) was determined. The real estate of devisees had been sold by order of the surrogate, upon a deficiency of personal property, for payment of debts. Many years after, a fund arose from the adjustment of the Erench claims, and was in the hands of the executors. ' A child of the devisor, one of the devisees, died before the reception of the money, leaving a husband but no cMldren. The question was whether her share went to her husband as admmistrator, or to her heir-at-law, and it was decreed to the former.-.
    The case went to the Court of Appeals, and was affirmed: no opimon was .delivered.
    The naked point decided, in this case was: that the devisees upon the land being sold, became entitled to a right of recovering out of any personal estate afterwards received, enough to remunerate them.
    Theft right was one in personal estate, and as such would they have taken it, had it been recovered in. their lifetime, as such it would devolve when actually recovered.
    An observation here arises of some moment before the revised statutes; there was a right in. the heir or ■ devisee of mortgaged premises to have the personal estate applied in discharge of the debt; that right is abolished, and he must pay it out of the land, (2 R. S. 33, 2d ed., §4, 3d page, 404.) TMs makes a proceeding of foreclosure against an infant even more marked by in i/mit/wm than before.
    4. Nevertheless, I should feel bound, under all the authorities I have noticed, to hold that the right to the fund must depend upon its nature, as it is found, and go to the next of kin represented by the public administrator, but for the circumstance of the heir-at-law being an infant. He was an infant when the equity of redemption descended, when the property'was sold; and at his death, a very different and new question is thus raised. I do'not understand the case of Bogert v. Furman, (10 Paige, 496,) as deciding it. I do not find that any of the owners of the equity were infants at the sale, and the point was not raised.
    There are several important cases connected with this point which I shall notice.

      Can v. Ellison, (2 Br. Ch. Rep. 56.) By a private act of Parliament, money which had been received as the price of land, sold for the purposes of a division, was ordered to be laid out in the purchase of lands under the direction of the Lord Chancellor. Under the uses declared by the act, a female infant might have elected to take it as money absolutely, but while it continued land, it was subject to a remainder over. By her will she disposed of it both ways, as money and as land. The will was attested to pass real estate, but as land it could not pass from her incompetency to devise, yet it could pass as money. The plaintiff claimed as heir-at-law expa/rte matemA. The master of the Rolls, “ Money to be laid out in lands must descend as land from generation to generation. The infant was seized of this as of real estate; during her infancy she could not vary the nature of the estate; a petition must be presented to the Lord Chancellor under the act of Parliament.”
    This was done, and the order declared, that the plaintiff as heir ex pa/rte mat&rnd of the infant E. deceased, was entitled under the act of Parliament to the sum in question, and he electing to take it instead of its being laid out in land, it was, paid over to him.
    In Ware v. Pollhill, (11 Vesey, 278,) Lord Eldon said, “I have uniformly made it a rule where property of one nature has been applied for the benefit of an infant to property of another nature, to have an express provision, that if he shall not attain the age at which he will have a disposable power, the representatives shall not be prejudiced in any way by the act done by the court in contemplation of the infant’s benefit. It is said this is the effect of the.court’s declaration. That is not correct, for the declaration is made because that is the law applicable .to the case of an infant, and it is of course to reform the order. It does not create the right, but it is a declaration of a pre-existent right to have the property secured.”

      Webb v. Lord Shaftsbury, (6 Mad. Rep. 100.) Lands vested in trustees in trust out of the surplus rents, to make certain payments, and invest the residue upon mortgage or government securities.
    An infant was interested; on- an application by the trustees they were permitted to purchase a contiguous real estate, the estate to be conveyed with declaration that the character of personal estate should remain unchanged. The infant at twenty-one might elect to consider it as réal estate. It was needless to say in the order that it should remain personal estate till he attained twenty-one. Weld v. Sew, (1 Beatty’s Ch. Rep. 266,) (Ireland.)
    A lunatic was seized by descent of a freehold estate encumbered by a mortgage given by his ancestor. A bill for foreclosure and sale was filed, on petition an order was made that the mortgage debt be paid out of the personal estate of the lunatic not connected with the descended freehold, and the mortgaged premises were conveyed to the committee to be held in trust for the lunatic, her heirs, executors, and assigns.
    The lunatic' afterwards died unmarried and without issue. The question was between the plaintiffs, as next of kin, and the defendants, as heirs-at-law, as to the amount of the mortgage Lord Manners determined for the heirs-at-law. On a re-hearing Lord Hart reversed his decision and gave it to the next of kin.
    He said, “ The first and paramount rule to be observed was the comfort of the lunatic; the next not to vary the nature of the property, so as to affect the right of succession,-unless it be necessary for the benefit of the lunatic.”
    He relied on Lord Hardwick’s clear authority in the matter of Hogan in 1771, where personal estate of a lunatic was applied in payment of a mortgage, and the amount was declared a lien upon the premises in favor of the next of kin.
    .He then examines the opposite decisions of Lord Morthington and Lord Rosslyn in G-uinstone’s case, and shows that they are not law.
    The decree declared the next of kin entitled to have the amount paid to discharge the mortgage a lien on the real estate, and that it be raised accordingly.
    Although the rulés as to lunatics are stated to have been originally derived from the Statute 17 Ed.' II., yet I consider that in our state the question both in lunacy and infancy will rest upon the same principles. *
    This well considered case then settles, that if a lunatic’s (and the reasoning is the same as to infants) personal property is applied to discharge an ancestor’s mortgage, the amount is considered a lien on the estate thus relieved, and the next of kin has the benefit of such lien upon the lunatic’s death. It does not descend, as> it is found.
    It'would be impossible, I think, to resist the converse conclusion that, if through the intervention of a Court of Equity, land descended upon a lunatic or infant is sold and a surplus beyond what is requisite for the purposes of the sale, remains at his death, the primary character is unchanged, as respects a devolution.
    If it is said that in such cases the preservation of the property in its original nature is effected by force of the orders of the -court, the answer of Lord Eldon is decisive : “ The declaration (in the order) is made because that is the law applicable to the case of an infant. It does not create the right, but is a declaration of a pre-existing right to have the property so secured.”
    The Legislature, in the statute respecting the sale of infant’s estates, has embodied this principle. I look upon it as a cautious declaration of the law, not as the establishment of a new principle (2 R. S. 268, §. 180). See Reviser’s notes as to effect of the clause omitted by the Legislature.
    The case of Gillespie v. Foy, (1 Iredell’s Eq. Rep. 281,) in North Carolina, was very similar to the present, but it was decided under the provisions of their statute (1 R. S. 314, § 27).
    The land descended to the infant children from their- father; and one dying, the whole vested in the survivor. A sale was made under the direction of a court for the benefit of the infant, under a statute similar to our own. The funds were in the hands of the guardian, and upon the infant’s death were decreed to his paternal aunt, who would have taken the land had it remained unsold.

      5th. There remains the question whether the sale in the present case was so far made under the authority of the Court of Chancery as to justify the application of that rule as to conversion, which Lord Eldon declared to be a settled rule of the court..
    The mortgagee had the right, under his power of sale, to resort to an advertisement and sale under the statute. He preferred resorting to a Court of Chancery, and filed his bill.
    I have heretofore supposed, that the power of our court to make a sale had grown up as part of its colonial jurisdiction, sanctioned by statutes, and was" independent of the power of sale in the mortgage, and was not derived from, the power of the English courts. (See 2 Hoffman’s Ch. Pr. 95, Note 2.)
    In exercising the power of decreeing a sale, where infants are concerned, the court carefully inquires beforehand, whether a sale of the whole is necessary; if not absolutely necessary, then whether it would be most beneficial for the infant that the whole should be sold or part only, and what part, to raise the amount due. The mortgagee can call for nothing but a sale of enough of the property to pay his demand. The sale of any portion of the property beyond that is the act of the court founded upon" the conclusion that it is for the infant’s benefit.
    We find therefore a conversion, by authority of a Court of Chancery, of land into, money, purely and solely because the interests of the infant require it.
    It seems to me the case is brought within the principle of the cases I have cited, and that the act of the court ought not to work a change in the character of the surplus, but that during the infant’s life it should retain its original nature, as land. -
    With much diffidence upon a question, in many respects new and grave,’ I have come to the conclusion that the heirs-at-law of the infant- are entitled to the fund.
    ' . Murray Hoeemaw, Referee.

    The general report of the referee was as follows:—■
    In pursuance of an order of this court, dated the 26th day of February, 1852, I, the subscriber, the referee named therein, having heard the parties to this action, do report, determine, and adjudge, that the costs of hoth parties, with a reasonable counsel fee to each, and the fees of the referee, be paid out of the funds in the hands of the said defendant, and which is the subject matter of this action, and that the residue of such fund be paid over to the plaintiffs in this suit as belonging to them, that is to say, one half part thereof to Calvin Sweezy, and Sarah his wife, on their joint receipt and discharge, and the other half part to Daniel A. Webster and Josephine O. his wife, on their joint receipt and discharge.
    Murray Hoffman, Referee.
    New York, April 15th, 1852.
    At the special term in May this report was affirmed, and judgment entered thereon. The defendant appealed from this judgment, and the appeal was now heard.

      S. A. Crapo, for the defendant, the appellant,
    relied upon the following points and authorities, which he discussed at large.
    I. By the foreclosure of the mortgage, the title of Charles A. Willis was extinguished, and the whole premises were converted into personal property, to be applied by the court, first to the payment of the mortgage debt, and afterwards according to the rights of other parties. The right of the intestate Charles A. Willis to the surplus, was one to personal property, and he being dead, the defendant as his administrator is entitled thereto for the benefit of creditors and next of kin. (Bogert v. Furman, 10 Paige, 496; Wright v. Rose, 2 Sim. and Stuart, 323; Graham v. Dickinson, 3 Barbour Ch. 173; 3 P. Wms. 341; 3 Bac. Ab. 58; Blackborough v. Davis, 1 P. Wms. 41; Woodruff v. Nickworth, Prec. in Ch. 527; Mentuay v. Pelty, id. 596.)
    II. The conversion of the realty into personalty, in this case, was effected by the Court of Chancery in the legitimate exercise of its jurisdiction, and in pursuance of a contract made by the ancestor of the intestate. The sale therefore was a legal and statutory conversion of realty into personalty.
    III. The interest of the intestate in the mortgaged premises was subject to the contract made by the ancestor that the whole estate should be converted into money, if it should become necessary for the payment of the mortgage debt. It having been so converted, the right of the intestate to the surplus was one to personal property.
    IY. The same principle must prevail where the conversion of land into money is made by contract inter vivos, as in cases of testamentary powers; namely, “ when the purpose of the testator requires the sale of the whole land, and there is only a partial disposition of the produce, the surplus belongs to the heir as money and not land, and will go to his personal representative.” (1 Williams on Executors, 456, and cases there cited.)
    Y. In this case the mortgage was upon a single lot of land, and the payment of the mortgage debt required the sale of the whole land.
    YI. The sale in this case having been made by authority of the Court of Chancery, in pursuance of a contract made by the ancestor of the intestate, and in order to enforce the payment of a mortgage debt, the cases cited by the referee of applications máde on behalf of lunatics and infants to change the condition of their property from realty into personalty, &c., have no applicability.
    YII. The intestate, Charles Henry Willis,' having died unmarried, without leaving descendants, father, mother, or sister, his paternal grandfather, John Willis, is, by the rule of the civil law, which must govern in this case, the sole surviving next of kin, and is entitled to the estate.
    See the decision of the Surrogate on the application for letters of administration in this case. (Sweezy v. Willis, 1 Bradford (Surrogate) B. 495; Bogert v. Furman, 10 Paige, 500; 2 Kent. Comm. 424; 2 Bl. Comm. 32.)
    G. Clarke, for the plaintiffs,
    made and argued the following points:
    I. Under the circumstances of this case, the property in question must be considered as real estate,—and having come to the intestate on the part of his mother, must descend to the two sisters of the mother according to the statute of descents. (1 R. S. 751, old ed. § 12.) 1. The real estate—of which the fund in question is part of the proceeds—descended to the intestate from his mother; and had it remained in fact real estate, must have descended to the two sisters of the mother as his heirs-at-law. 2. The intestate, being an infant, could not have alienated it; and even if it had been sold, pursuant to the “ Statute for the Sale of the Eeal Estate of Infants for their Benefit,” the proceeds would not have lost the descendible quality of real estate, but would have gone to the same persons as the estate itself. (2 R. S. old ed. 195, § 180.) 3. If the proceeds of the real estate of an infant sold for his benefit, and by proceedings instituted in his behalf, retain the same devolutionary quality which the estate itself had,—a fortiori will the surplus proceeds retain the same character when the estate is-sold by proceedings m i/mitnm $

    II. The conversion in this case was made by a Court of Equity, which had no power to decree a sale of any more of thé mortgaged premises than was, sufficient to pay the mortgage debt, and consequently no power to change the quality or character, of what remained; and if more was sold ex necessitate, the surplus not wanted for the purpose of sale was a resulting trust in favor of the infant intestate—who was incapable of making an election, and the Court of Chancery consequently held such surplus as a resulting trust until his death—and then it went to his heirs-at-law, in like manner as if it had actually remained real estate. (5 Whart. R. 60, in re Tighlman; 2 Dev. and Battell, E. R. 144, Scull v. Penigen; 2 Yeates R. 261, Diller v. Young; 3 Wheaton, 582, Craig v. Leslie; 4 Maddox R. 491, 492, Smith v. Caxton; 1 Brown, C. R. 504, Akroyd v. Smithson; 11 Ves. 278, Ware v. Polhill; 1 Ves. and B. 173, Hill v. Wood; 8 Ves. 235, Wheldale v. Partridge; 2 Ves. 12; 4 Ves. 149; 1 Whart. 162; Adams’s Doctrine of Equity, 136, 138, 139, 285-297.)
    III. The infant intestate was seized of land,—he could not vary the nature of the estate during his infancy. If it had been sold for his benefit pursuant to the statute, it would still retain the character of real estate (2 R. S. 268, § 180); and if sold by proceedings in immiimm, such proceedings would not change the character of any more of the infant’s estate than was necessary for the legitimate purposes of the sale,—the surplus must retain its original character,. (See the cases above cited. Also 2 Br. C. R. 56, Can v. Ellison; 11 Ves. 278, Wase v. Polhill; 1 Beatty, Ch. R. 266, Well v. Sew; 1 P. Will. 389, Seely v. Jago. See also the cases cited in referee’s opinion.)
    IV. The report of the referee is correct; is sustained by long established authority; and the judgment entered thereon should be affirmed. .
   Nov. 20. Bosworth, J.,

now delivered the judgment of the Court, and after stating the facts, proceeded as follows;

Murray Hoffman, Esq., the referee to whom the action was referred, decided, on these facts, that the securities in which the surplus was invested must be regarded as real estate for the purposes of descent and devolution, and, therefore, belonged to the plaintiffs, his maternal aunts. A judgment was entered on the report directing the moneys in the defendant’s hands to be paid to the plaintiffs-. The defendant appeals from the judgment, and the question presented on the appeal is, were these securities, on the death of Charles Henry Willis, to be regarded as real, or, as between his heirs and next of kin, as personal estate?

On the part of the plaintiffs it is contended that the fund, being the proceeds of real estate belonging to an infant, will be treated as. land, until some one entitled to it, and of legal capacity, shall elect to take it as money. ,

That the court had no power to decree a sale, for the purposes of conversion, of more of the land than was sufficient to pay the mortgage debt, and costs of the suit; and that having sold the whole, as a matter of necessity, the premises being a single lot, the character of the surplus was not and could not be changed into personalty by the court, but that it was held by the- court as a resulting trust until his death, on which event it descended to his heirs-at-law, as if it had. actually remained real estate.

On the other hand, the defendant insists that the realty having been actually-converted into money in the life-time of Charles Henry Willis, by a court of competent authority in the legitimate exercise of its powers, and in pursuance of a contract made by the ancestor of the estate, and subject to which it had descended to the latter, the surplus, at the time it arose, and the right of Charles Henry Willis to it was determined, belonged to him as the owner of the land which had produced it, but that it belonged to him as money and not as land. That the claims made to it, by his heirs and next of kin, must be determined by the actual character of the property as it existed at his death, and not by the character of the property which had produced it. That, having been lawfully converted into personal property in his lifetime, and being actually such at the time of his death, it must be distributed as personal property, and therefore belongs to John Willis, the paternal grandfather, who was the next of kin.

The argument in support of the plaintiff’s proposition is based partly on the principle established by a long series of decisions in cases arising under wills, by which it is settled that land devised to be sold and turned into money, is treated as money, and money bequeathed to be invested in land, is treated as land, and will descend as such, until some one entitled to it in his own right and capable of electing, has manifested an intention to receive it in the form and character in which it actually exists. Courts of equity treat such property for most purposes precisely as if the directions contained in the will, or the terms of an ancestor’s contract respecting the property, if the rights of parties depend on such a contract, had been specifically executed.

They regard the substance, and not the forms of agreements and other instruments, and will give them the precise effect which the parties intended, and in furtherance of, and for the purpose of executing such intention.

When a Court of Equity is required to determine between persons claiming such property by the right of succession, it treats it as property impressed by the will or act of the party who is the ultimate source of title, with a specific character different from that in which it is found, and disposes of it as continuing to possess that character, until some one entitled to the whole beneficial interest has elected to take it in the form in which it is found, or has received it under a performance of the contract, or in execution of the provisions of the will by which the original right to it was created,

Crag v. Leslie, 3 Wheat. 563; 2 Story’s Equity, §§ 790, 791, 792, and 793, and cases there cited; Law Library, vol. xlix.p. 560, &c.; Stagg, Executor, &c., v. Jackson and Wife, 1 Coms. 206; 7 Hare, 299; Griffith v. Rickets; Same v. Lunell.

It is evident, from these cases, that a Court of Equity will not divest property of the character in which it finds' it, or which it finds impressed upon it, except at the instance of some party having the right to invoke its interposition for such a ■ purpose. The only party who can ask to have this done must be one entitled to the whole beneficial interest in the property, • and who has a right to convert it himself from one form to another, and who is of legal capacity to make an election.

It is the constant rule of Courts' of Equity to hold lands pur- ' chased by the guardian with the infant’s personal estate or with ' the rents and profits of his real estate, to be personal and distributable as such; and, on the'other hand, to treat real property, turned into money, as still for the same purpose real estate. And when the court directs any change of property, it directs the new investment to be made in trust for the benefit of those who would be entitled to it, if it had remained in its original state.

2 Story’s Eq., § 1357.

In Ware v. Polhill (11 Vesey, 278), Lord Eldon said' that such a 'declaration is made because that is the law applicable to the case of an infant. The declaration in the order or decree does not create the right, but it is a declaration of a pre-existent right to have the property secured.”

In exporte Phillips (19 Ves. 122, 123), Lord Eldon said:— “ In the case of the infant, it is settled that as a trustee out of court cannot change the nature of the property, so the court, which is only a trustee, must act as the trustee out of court; and finding that a change will be for the benefit of the infant, must so' deal with it as not to affect the powers of the infant over his property even during his infancy, when he has powers over one species of property and not over the other. It may be for the benefit of an infant, in many cases, that money should be laid out in land, if he should live to become adult; but if. not, it is a great prejudice to him, taking away his dominion, by the power of disposition he has over personal property, so long before he has it over real estate. The court, therefore, with reference to his situation, even during infancy, as to his powers over property, works the change, not to all intents and purposes, but with this qualification, that, if he lives, he may take it as real estate, but without prejudice to his right over it, during infancy, as personal property.”

If this surplus was personal estate for all purposes, from the moment of the sale, the infant might have disposed of it by a will in writing at any time after he became eighteen years of age (2 R. S. 60, § 21). He had attained that age before he died.

If it is to be treated as real estate, he could not devise it until after he attained the age of twenty-one years (2 R. S. 57, § 1).

Hence, it is obvious that section 180 of the statute entitled of proceedings in relation to the conveyance of lands by infants, and the sale and disposition of their .estates,” was merely declaratory of what was deemed to be a well settled principle of equity jurisprudence. That section declares that no sale made pursuant to that act, “ of the real estate of any infant, shall give to such infant any greater or other interest or estate in the proceeds of such sale than he had in the estate so sold, but the said proceeds shall be deemed real estate of the same nature as the property sold.”

In' this case the infant’s property was not sold under this act. It was sold as a matter of necessity, as the mortgaged property was a single lot. It was real estate of the infant when the law, through the interposition of the Court of Chancery, began to operate upon it. It was no part of the object or purpose of the foreclosure suit to. affect the estate of the infant or the nature of his property, or his power of disposition over it during his infancy. The sole purpose and object were to sell enough to pay the mortgage debt and costs of the suit. If enough and no more could have been sold separately, to satisfy that object, without any prejudice to the owners of the equity of redemption, only so much would have been sold, and the residue, which would have belonged solely to the infant on the death of his father, would have been real estate in which he would have had an absolute estate in fee simple. But having regard to his interests it became necessary to sell the whole premises. Having sold the whole, the court which ordered the sale will hold so much of the surplus as represents the infant’s interest and estate, as real estate until he becomes of age, or will dispose of it as such if he dies before that event happens.

In Moris et al. v. Murgatroyd, et al. (1 J. Ch. R. 119-130), Chancellor Kent held, in a case of a surplus arising from a sale of mortgaged premises, which took place after the death of the mortgagor intestate, and while some of his heirs were infants, that the surplus was part of the real estate, would go to their . heirs, and would be assets in their hands. And although the court applied the surplus to pay debts of the mortgagor .on account of Ms personal estate being insufficient for the purpose, it refused to allow his administrator to .distribute it as personal estate, in which event it would have been absorbed, as the law then was, in paying a judgment which had been confessed by the administrator, but treated ■ the surplus as equitable assets, and distributed them as such, ratably among all the creditors.

The case of Lloyd v. Hart, Admin. &c. of Evans (2 Barr, 473), is a recent one, and was fully considered. If correctly decided, the principle involved in the .decision is conclusive as to the rights of the parties in this case. A sale of the real estate of 'a lunatic was ordered for the purpose of paying his debts, and - was made by his committee pursuant to an order of court, and there was a surplus of over $3,000. ■

After his death there was. a contest between Ms heirs and next of kin in relation to the surplus, and each claimed it. The court below held that it was to be treated as personalty, and that it belonged to the next of kin. -It rested its decision on the principle, contended for by the defendant in this case ; that the conversion had been made by order of a- court of competent authority, and, therefore, could not be taken to be a wrongful conversion-; that the heir had no such equity as would induce the court to inqmre into the origin of the fund; that the parties claiming it must take it as they found it at the time of the death of the intestate.

The act of the Legislature which authorized the sale was silent as to the consequences of a conversion, and made no provision whether the surplus, if any arose, should be deemed personal or real estate.

A writ of error was brought, and the judgment below reversed. The court, after adverting to the leading cases of conversions directed by wills, said that, “ from these it appears that the equitable character of the property when legally converted, depends on the will of the devisor collected from the purpose to be answered by it; but the committee had, in this instance, no will to exercise or power to convert, as a devisor has, from motives of mere caprice, or for any motóme not authorized by statute. The sale was for the maintenance of the lunatic and payment of his debts. Consequently what remained when that was accomplished, retained the impress of real estate.”

(See 2d Yeates R. 261; Deller v. Young in re Tilghman, 5; Wharton, 64; Scull v. Jamegan, 2; 2 Dev. and Bat. Eq. R. 144.)

March v. Berrier (6 Iredell’s Eq. R. 524) was decided by the Supreme Court of N. C. in 1850. It related to a surplus produced by the sale of land which had descended to an infant. The sale was made under the decree of a Court of Equity, to create funds to pay debts owing by one Wilson, the intestate, who died seized of the lands. The sale was made in the lifetime of the infant, and a surplus of $639 64 was actually paid by the clerk and master, who made the sale, to the guardian of the infant. The infant afterwards died under age and unmarried. A bill was filed by her heirs at law to procure a decree that this surplus be deemed land and be paid to them, and a decree to that effect was made.

The court in its opinion said that, “ when a Court of Equity orders a sale of the real estate of an infant, in order to raise money for a particular purpose, it would not, upon its own principles and independent of any provision by statute, allow its decree to affect the rights of succession to a surplus remaining after answering that purpose. The money stands for the land of which it was the proceeds.”

That the fact that the surplus had been paid to the infant’s guardian made no difference, The acts of that person, or the dealings between him and the infant’s administrator, could not change the equitable nature of the fund so as to disturb the rights of the heirs at law. The court decided that the interest which had accrued during the infant’s life-time was personalty, but that the capital and interest that accrued thereon subsequent to her death belonged to the heirs at law.

The purpose of the sale, in the present case, was to satisfy the mortgage debt and the costs of the foreclosure suit. Except as a matter of necessity, the court would not have converted into personalty more of the premises than was sufficient to answer that purpose. That purpose was fully answered by the application of a part of the proceeds.

The principles upon which the court acts, and by which it is governed, will not allow it to regard the surplus as property of a different nature from that which produced it. If land has been converted, it will treat the proceeds as land, until the infant is capable of electing and actually elects to take it as money. .

If a different rule obtained, the infant, in this case, as he lived until he attained the age of eighteen years, might have bequeathed it as money. If it had not been converted, he could not have devised it until after he was of full age. So, on the other hand, if his money is ordered to be invested in real estate and is so invested, the court will treat the land as money. On any other principle the act of the court would deprive him of a right, created by statute law, to bequeathe his personalty on attaining the age of eighteen years. I am inclined to think that the true ground of the rule is the one stated by Lord Eldon in ex^parte Phillips, and that it is not based upon any supposed equity of the next of kin to succeed to the personal and of the heirs to take the real estate, and to have it retain the character it possessed when the infant’s title accrued, until his death, or until he becomes of age.

But whatever may be the true reason of the rule, Courts of Equity seem to have acted uniformly upon the principle that, in converting the real estate of an infant for a particular pm’pose, they had no power to convert, to all intents and purposes, any more than was required to answer such purpose. And that if incidentally it necessarily happened that more was converted, it was their duty to treat the excess or surplus as property of the same nature as that converted, and to dispose of it accordingly among those claiming by the rights of succession.

We regard this principle to he well settled, and that § 186 of 2 R. S. 195, is but a legislative declaration of this principle. That it must be applied and enforced in all cases of a surplus arising from a sale of his lands under the decree of a court, as well as where a sale is made for either of the purposes Specified in that‘act.

The only case cited apparently in conflict with the rule and the decisions referred to, is that of Bogart v. Freeman, 10 Paige 492. That was a contest in relation to a surplus arising from a sale under a decree of foreclosure. The report of the case states that “ E. Freeman, the elder, widow of the mortgagor (who died before thé sale), was grantee in fee of the mortgaged premises,” when the decree was entered. “ But in fact she was only entitled to dower in the equity of redemption. She held the residue in trust,” one eighth thereof for each of her seven children, and one sixteenth for each of two grandchildren. After her death there was a litigation respecting the surplus. The Chancellor, assuming that certain of the children and grandchildren, who were dead, had died infants, decreed that their shares of the surplus must be deemed personal and not real estate, and that they belonged to their next of Mn.

No authority is cited in support of the proposition. It does not appear from the report what was the nature of the trust, nor whether the instrument by which it was created did not direct the land to be sold after her death, and the proceeds divided as money between the children and grandchildren. If such was the fact, the decision was in harmony with the well settled rules relating to equitable conversion. There is nothing in the facts stated which makes it necessarily conflict with the authorities cited.

In Graham v. Dickinson (3 Barb. Ch. 169), real estate devised was sold after the death of the testator to supply a deficiency in his personal estate. One seventh of the land so sold belonged to the complainant’s wife as such devisee.' Sufficient of the proceeds was applied to pay the debts, and the residue was paid over to the devisees. Hence the whole proceeds were actually disposed of. Complainant’s wife subsequently died without having had any issue, and he was appointed administrator of her estate.

Subsequently to her death, the executors of her father’s estate realized a large sum of money from a claim of the estate against the French Government, and the complainant filed a bill, as administrator of his wife, to recover one seventh of this fund, as a substitute for part of her real estate which had been sold to pay debts primarily chargeable upon the testator’s personal estate.

' The executors resisted the claim on the ground that the fund was to be considered real estate at the time of the death of complainant’s wife, and that it belonged to her heirs at law, and not to her personal representatives. The chancellor decided that the fund must be treated as personalty, and that it belonged to the plaintiff as administrator.

The report of the case states expressly that it did not appear by the pleadings or proofs in the cause whether the marriage of complainant took place before or after the sale of the real estate of his wife. FTeither does it appear that she was then under age. If of full age and a feme sole, and nothing to the contrary appears, then the decision is in harmony with all the eases which hold that where real estate is converted by operation of law, in the lifetime of an adult owner, the surplus, if there be any, will be treated as money, and at his death will be distributed as such. (Banks et al. v. Scott, 5 Mad. 500; Dixon v. Dawson, 2 Sim. and Stew. 327, 329; Flanagan v. Flanagan, Law Lib. p. 578; and what Lord Eldon, in his argument in Achroyd v. Smithson, says of the grounds on which the former was decided.)

Graham v. Dickinson (p. 184) is in conflict with all the authorities, if it is to be deemed a decision that the rule which it asserts applies to a surplus arising from the sale of an infant’s real estate. As the report of the case does not state that 'the heir was either an infant or married at the time of the sale, and as no authorities were cited applicable to a surplus arising from the sale of an infant’s land, it cannot be said to decide a question that does not appear to have arisen or been discussed.

We are of the opinion that there is nothing decided in either of those cases at variance with the rule uniformly acted upon by courts-of equity,—that a surplus arising under such circumstances as this must be treated as land, until the infant to whom it belongs has reached an age at which he is capable of taking it as money, and has elected so to take it. Up to the time of his death, he was in law incapable of making an election. It must, therefore, be regarded and disposed of as it Would have been if it were in fact land. We concur in the opinion that the referee decided the law correctly. The judgment appealed from must be affirmed.