Massachusetts Agencies

Sale Under License to Sell

Deeds and Conveyances: Special Rules Regarding Fiduciaries

The effect of a sale under a license is to give good title regardless of the debts or other claims against the estate. The proceeds of the sale in the hands of the executor or administrator are substituted for the real estate and continue to be liable for the debts, legacies and charges of administration as long as the real estate would have been liable and are to be paid over to those persons who would otherwise have been entitled to the real estate had it not been sold. See Newhall, Settlement of Estates and Fiduciary Law in Massachusetts, Lawyers Co-operative Publishing Co. (Fourth Edition, 1958), §121. The result is that the title is free of any interest of the housekeeper or the deceased's children.

The effect is the same in the case of a sale under a power in the will. See REBA's Title Standard No. 10 and the famous letters between George A. Sawyer and John C. Gray.

Those famous letters are included at length below:

Letter from George Sawyer to John Gray, October 29, 1912

My dear Mr. Sawyer:

May I have your opinion on the subject of executors powers of sale, and as indicated the particular points I will frame several questions.

  1. Does or does not the deed of an executor under a general power in a will to sell real estate, convey to the purchaser a title free from the claims of creditors of the testator and legatees under the will?
  2. Does it make any difference whether or not the executor has at the time in his hands ample personal property from which he might pay the debts and legacies if he was so disposed?
  3. If the estate is not settled and the executor still has something to do in the way of paying debts and legacies on account of pending suit or nonpayment of his own claims or charges or because certain legacies are not yet payable, can the sale be made with the same effect after the expiration of two years from the date of his appointment as before?
  4. See Allan v. Dean, 148 Mass. 594 and Mayo v. Merritt, 107 Mass. 505.

  5. Do you feel that your conclusions are free from reasonable doubt or is there sufficient doubt about them to deter a conveyancer from passing a title on the assumption that they are settled law?

/s/ George A. Sawyer.

Response from John Gray to George Sawyer, November 8, 1912

Dear Mr. Sawyer:

I have considered carefully the question you have asked me in your letter of October 29th.

So far as legatees are concerned, the purchaser must get a good title. Their only claim is under the will, and the will has given the power.

As to the creditors.

Apart from statutes:

The creditors have no claim directly upon the land; they have a claim only upon the proceeds, and that there may be any proceeds there must be a sale. When there is a trust or power to sell and pay the proceeds to a particular beneficiary, a purchaser is bound to see to the application of the purchase money; but when a sale of land makes the proceeds assets to pay creditors, the purchaser is not bound to inquire into then proper application of the assets.

But there are two statutes:

The R.L., c 146, provides that the executor shall obtain a license to sell land for the payment of debts, when the personal property is insufficient. The question is whether this statutory remedy, which applies to all estates, without any reference to the existence of a power, has the effect of revoking or limiting the power given by the will as to its passing a good title. I am of the opinion that it does not revoke the executors authority to exercise the power so as to pass a good title.

. . . "whenever an executor has a power under a will to sell real estate, no license of any court is necessary to, or can give any additional validity to any sale and conveyance which he might make. And it is considered a good reason for refusing such license, that the power already exists." Going v. Emry, 16 Pick. 107, 113.

"As to real estate devised, it is competent for the testator, under the general power of ownership, the jus disponendi, to authorize and empower his executor to sell it and apply the proceeds for the payment of debts, and then no license for that purpose would be necessary. Lee, Appellant, 18 Pick. 285, 289.

The R.L., c. 178, s. 53, provides that on a judgment against an executor by a creditor, the land of the deceased can be set off to the creditor on execution. It is clear that this cannot be done after there has been a sale under a license; and if, as I am of opinion, a sale under a power is good to pass title though the executor has no license, it must be that to pass title a sale under a power is as good as a sale under a license. A power, which if exercised, will prevent a sale by license, I think will, a fortiori, will prevent a sale on execution. The object of this provision is where an executor neglects, either under a power or by license, to get assets for payment of debts, a particular creditor may take matters into his own hands and proceed for himself.

I am, therefore, of opinion that the purchaser under a power gets a good title.

To hold otherwise would practically render such powers very ineffective if not nugatory, for no purchaser could ever be sure that some future claim, on a warranty, for instance, might not turn up.

Assuming that the power is good, I do not think it is affected by the presence or the absence of other personal property; nor do I think the power of sale is confined to the two years. The power to sell may be exercised at such a remote period that it ought to raise a suspicion in the mind of the purchaser; but unless there is an unusual and inexplicable delay, which there is not in the case you put, I think the purchaser is protected.

I think, if I was called upon as a conveyancer to pass title depending upon the exercise of such a power, I should pass it.

The authority of an executor to act under a power contained in a will without the necessity of a license was most recently recognized in Samra v. Yuan, 40 Mass.App.Ct. 934, — N.E.2d — (1996).