Central Trust Co. v. . Egleston

185 N.Y. 23 | NY | 1906

Lead Opinion

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.]

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.]

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] This will, written by the testator himself, evidences, in the confusion of its language, an effort to make a definite testamentary disposition of his estate, without the aid, or the advice, of legal counsel; which might be ascribed to an exceeding confidence in his own ability, or, as may be gathered in some expressions, to an unhappy distrust of lawyers. The result, in my opinion, has been disastrous to the instrument. We cannot hold that the intended testamentary disposition is sanctioned by our statutes. The court below has made a commendable, if not an heroic, effort to uphold it in part; but, when analyzed, the result is to reveal the purpose of the testator to tie up his estate in a trust, which might suspend the absolute ownership beyond the statutory period. He intended to place it in a trust for the three lives of his sons; subject to an annuity for his widow. It is the very plain duty of the court to find out what a testator has meant to do with his property after his death and, then, if it be possible to give his plan effect by a construction which will validate it, to do so. But the court cannot make a new will for him; nor should it be expected to resolve into lawfulness of disposition some tangle of desires to provide for future contingencies. The inquiry, in each case, must be what provisions has the testator intended to make for the disposition of his estate and not whether he intended to dispose of his estate according to the statutory rules governing testamentary dispositions. When the provisions are ascertained and understood, then is their legality to be determined. (Colton v. Fox,67 N.Y. 348.) Take this will as an illustration of what has been done by the judgment. The court below has made three separate trusts for the testator's sons and has directed the accumulation of income to cease upon each attaining his majority. A very simple expedient, effecting lawful results, as far as the court was able to go; but it is exactly what the testator did not wish to have done with his estate and it, totally, upsets his testamentary plan.

Each will must be read and considered with reference to its peculiar provisions and to the circumstances attendant upon its making, and precedents are, rarely, of avail. In this will, we can see that a trust was intended. So much is clear. No particular formula of words, or terms, is ever necessary to constitute a trust and it suffices for the plan, if, upon a consideration of the instrument, the purpose of a trust is manifest. Nor will it militate against the constitution of several trusts that the capital of the estate is to be kept together and administered as one fund for convenience; provided that it shall appear that the shares and interests of the beneficiaries are made, or, clearly, intended to be made, distinctly several. (Tobias v. Ketchum, 32 N.Y. 319; Morse v. Morse, 85 ib. 53; Ward v. Ward, 105 ib. 68; Vanderpoel v. Loew, 112 ib. 167, 180.) In this will the testator, at the outset, appoints a trustee for his will and there are active duties imposed with reference to the administration of the estate, which renders its possession by the appointee necessary. It is not in doubt that the testator intended to place his property in the hands of a trustee and the question, simply, is whether more than one trust was intended and provided for by him. I think the question must be answered in the negative. If any purpose is manifest in this instrument, it is that of keeping the property together as one trust fund, without severability, or termination, from the income of which the widow and the sons are to be provided for. Before making provision for them, he expressly declares that he "has thought it advisable to place all property in trust for my sons." This declaration is to be taken as expressive of what the testator is attempting and indicates, by its language, not conclusively, of course, a provision for a single trust. It is the very unmistakable notion of the testator, though confusedly worded, that the principal of his estate would be perpetuated. When he speaks of placing it in trust for his sons, it is "that it may pass on to my grandchildren. My most earnest desire is to perpetuate the name, which it is trusted may be for a good name in all generations." Subsequently, when providing for the "event of the death of his wife, and his children without issue," (which, from its place in the will, must be taken as referring to their death in his lifetime), by bequeathing "to his brothers, or brother equally," or, "if they are not alive, to the children, or children's children of my late sister Sarah," he adds "to be used by them for life and still deeded on to their children." Having developed this idea of perpetuity in his mind, he proceeds to make his provisions for his wife and three minor sons. In quoting any part of the will, the language has been given here as in the record. In the first place, he gives to her, during widowhood, "for the first year, or year and a half, while the estate is provided for, $2,000 per annum" and, thereafter, $4,000 in each year. Then he gives to his sons "during the year, or one and half years during settlement, the sum of $2,000 each, at least 100 pounds going with their mother to maintain the home, if called for." After that period, he increases the income of each son to $3,000 a year; but the sum of 200 pounds, or $1,000 are then to be "passed over for the maintenance of the house." Then, as to the further distribution of income, he becomes somewhat vague; for he says: "At the age of 25 years, when each child shall reach that age, not before, or when the three children are 25, or the youngest 25 years old — I donate and give to the three sons * * * 75 per cent. of the income of the estate after payments to my wife and deductions for charges — the balance of 25 per centum of the net income being held and invested, until each child has arrived at the age of 30 years of age (30), when I bequeath to them, after all deductions, 98 per cent. of the net income — the balance of 2 per cent. keeping the estate in heart and to be invested. My son Vivian (the youngest) to attain the age of 25 and 30 years before the divisions" etc. What he meant, we may fairly assume, was that the youngest son must have attained the ages of 25 and 30 years, before the new divisions were to be made of the income; but the very pregnant words of this paragraph are in the gift to the sons, at certain periods, of 75, or 98, per cent. of the incomeof the estate and in the direction that the balance of 25, orof 2, per cent. is to be held and invested, without limitation of time. We have, then, as the plan provided by the testator, a gift to his wife of an annuity during widowhood and of varying sums, annually, to each son, until the youngest shall be 30 years old; with a charge upon each son's allowance of a certain sum in favor of the widow for the maintenance of the home. As the earlier declaration was of the intention "to place all property in trust for my sons" and the later gift of income to the sons, after they all were 30 years old, was "after all deductions" etc. the result is that the annuity to the widow is made a charge upon the whole estate held by the trustee, with additional allowances to her from each son's income, while under 25 years of age.

It is plain that there was one indivisible trust constituted by the plan, to endure for the three lives of the sons, contrary to the provision of the statute, which limits the suspension of the absolute ownership of property to two lives in being at the testator's death; a provision which is violated when there is the possibility of such an occurrence. (Schettler v. Smith,41 N.Y. 328; Haynes v. Sherman, 117 ib. 433.) This is plain; because there is lacking not only a direction in the instrument for a division of the principal into several shares for the sons, but because, when there is a gift from income, it is made from the income as an entirety. When he arranges for incomes, after his three sons have all passed the age of 25 years, the gift to them then, is of "seventy-five per cent. ofthe income of the estate * * * the balance of 25 per centum of the net income being held and invested," and when they are all 30 years old, they are given "98 per cent. of the net income — the balance of two per cent * * * to be invested." It is the income of the whole estate, which is dealt with, and not the income of respective shares and if handled otherwise the purpose is frustrated. The testator was not a lawyer and, doubtless, being unfamiliar with the statutory restrictions upon the power of testamentary disposition, had only in mind a plan which he had thought out. That plan was to preserve the corpus of the estate intact; the apportionment of its income among his wife and sons, varying at times and in amounts, and an increase of the principal by additions from unexpended income, which, after his sons became 30 years old, was to be continuous by the addition, annually, of two per cent. of the entire income. There is nothing to indicate for whose benefit the accumulation is to be made and the only reasonable inference is that it was to go to increase the principal of the trust. When the testator proceeds to make provision for the two older sons, while "waiting for their brother to reach the ages of twenty-five and thirty years," he makes it clear that he contemplates but one indivisible trust, whose income he is distributing; for he gives, in that situation of affairs, to Thomas and Harold $500 each "extra" from the time they become twenty-five years old, till Vivian arrives at that age and till he "arrives at thirty years, when they share alike." This means that the two older sons were to have a larger share of the general income of the estate; for the $500 are given to each as "extra" and those sums would not come from shares. They share unequally up to a certain time and, only, afterwards do they share alike. A single trust being within this plan, the testator could arrange such a provision; but, if separate trusts were to be carved out of his estate, such an unequal division would be impossible. Nor can it be successfully argued that such provisions of the will may be lopped off, without prejudice to the testator's plan. The question is, as I have before suggested, what provisions the testator intended to make and to determine their validity as made. As it was observed by Judge MARTIN, inHerzog v. Title Guarantee Trust Co., (177 N.Y. 86), "the intent to be discovered is not whether he intended to make a valid disposition of his estate; but what provisions he in fact intended to make. When that is found, it is for the court to determine whether such intended provisions are valid, or otherwise." "The duty of the court," as the learned judge, further and appositely, remarked, "is not to make a new will, to carry out some supposed, but undisclosed purpose * * * The duty of the court is to interpret, not to construct." We have seen what this testator wished to accomplish and we cannot subtract from his provisions without frustrating his purpose. His scheme must stand, or fall, as a whole, if we are not to construct a new will for him; for he has enveloped his estate in a single trust, which, as he intended, should care for and advantage it for defined purposes, relating to the maintenance and welfare of his family. Furthermore, the absence of any direction for the ultimate disposition of the corpus of the estate furnishes the inference that the testator had supposed that his plan took care of his estate to a time, when the "grandchildren," to whom he had referred in the earlier part of his will, might, naturally, be expected to come in for the inheritance. Again, to illustrate his intention to constitute but the one trust for all; if one of his sons should predecease his brothers and the widow, without leaving issue, that which would happen under this will would be that the trust would remain as it was and that the income would be shared by the survivors. Was that not his obvious purpose? He could not have intended that there should be three distinct trusts for his sons, when, in such an event as I have suggested, the share held in trust for the one so dying and its income would become released. He has made no disposition in any such event. His whole scheme was that the trust term should continue for the purpose of paying the widow's annuity and the certain proportions of the net income to his surviving sons, determined by their ages.

I, therefore, think that we are forced to the conclusion that but one trust was constructed by the testator, which should continue to hold his estate, and it must follow, as it was dependent upon three lives, that it violated the statute against perpetuities. The trust scheme being invalid, the whole will must fail and the estate of the deceased must be divided among the widow and three sons in the statutory proportions prescribed in the case of an intestacy; namely one-third thereof to the widow and to each son two-ninths thereof.

The widow's annuity, necessarily, falls with the failure of the trust scheme, of which it was part. Her claim of a right to enforce the ante-nuptial contract has no place in this action. It affects in no way the question presented. It purported to set aside the sum of 4,000 pounds as a "marriage settlement" and when referred to in the will, it is with reference to its bearing upon the amount of income to be allowed her, in the event that she prefers to have it stand. But the court has found that, at the time of testator's death, there was no specific property real, or personal, to any amount, which had been set aside as a marriage settlement. What, if any, may be the widow's rights under the contract, is a question with which the court, at present, is not concerned.

The judgment appealed from should be reversed and a judgment should be entered in conformity with this opinion; with costs in all the courts to all parties, who have appeared by counsel, to be paid from the fund in the plaintiff's custody.

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Dissenting Opinion

I am of opinion that the testator succeeded in creating three valid separate trusts for the payment of the income of the estate to his three sons for life, subject to an annuity for the benefit of the widow.

The provisions of the will for unlawful accumulation of income can be lopped off without affecting the validity of the separate trusts and the accumulation during the minority of each son.

I also am of opinion that the testator failed to make any lawful disposition of the principal of his estate on the termination of each of the said trusts, and, therefore, died intestate as to it. It follows that the trust company is the proper custodian of the principal during the existence of the respective trusts, and on the termination of each trust one-third of the same will pass under the Statutes of Distribution.

The judgment should be affirmed.

CULLEN, Ch. J., WERNER, HISCOCK and CHASE, JJ., concur with GRAY, J.; EDWARD T. BARTLETT, J., reads dissenting memorandum; O'BRIEN, J., absent.

Judgment accordingly.