In re Estate of Pulitzer - 139 Misc. 575, 249 N.Y.S. 87 (Sur. Ct. 1931)

Rule:

The law, in the case of necessity, reads into the will an implied power of sale.

Facts:

Joseph Pulitzer’s will contained an express denial of the power by trustees to sell certain stock of a newspaper company, which made up a substantial portion of the assets of the trust. Trustees sought judicial determination authorizing the sale, alleging that a serious and imperative emergency threatened the trust and its beneficiaries.

Issue:

Under the circumstances, could the trustees be permitted to sell certain stock of the newspaper company, notwithstanding the express prohibition in the testator’s will? 

Answer:

Yes.

Conclusion:

The court noted that substantial evidence existed to show that rapid deterioration of the value of the newspaper company threatened substantial assets of the trust. In such case of necessity, an implied power of sale was read into testator's will. The court charged testator with sufficient foresight to realize that securities bequeathed to trustee might become so unproductive as to permit their sale in a time of such crisis. However, the court lacked jurisdiction to approve the conditions of the sale, since both the estate and individuals owned stock in the corporation. According to the court, estate owning some stock did not justify intrusion into corporation's internal affairs.