153 N.Y.S. 1041 | N.Y. App. Div. | 1915
The testatrix, Annie K. Dale, was the widow of Ansel N. Kellogg when she married plaintiff. By her last will and testament she had left the sum of $150,000 to her executor in trust to invest the same and apply the net income thereof to the use of her husband, the plaintiff, during the term of his natural life, in quarterly payments, and the principal upon his death was to become part of her residuary estate. By a codicil she revoked this provision and substituted therefor the following: “ First. I revoke the first clause of my said will which makes provision for a trust fund for the benefit of my husband, and in lieu thereof, I give and bequeath tó my executor the sum of Fifty thousand dollars in trust to invest and keep the same invested and to apply the net income thereof to the use of my husband Alfred G. Dale, during his natural life, said fund upon his death to revert to my estate.”
The residuary clause of her will was as follows: “Seventh.
The defendant is executor and trustee of and under said will. Plaintiff was dissatisfied with the terms of the will in so far as it made provision for him, and announced his intention of filing objections to the probate thereof. He had a personal claim against the estate in the sum of $125,000. Thereupon a settlement was entered into between plaintiff as party of the first part and all the residuary legatees and remaindermen as parties of the second part, whereby plaintiff was to be paid the sum of $115,000 out of the funds of the estate, and in addition the parties of the second part sold, assigned, transferred and set over unto plaintiff “all their and each of their right, title and interest in and to said trust fund of $50,000 under said will and codicils, of which trust fund the party of the first part has the life use. The parties of the second part hereby intend to and hereby do convey, transfer and release to the party of the first part all and every right, title and interest which they have, or may have, to said trust fund and furthermore authorize, empower, and direct the executor of the will of said Annie Kellogg Dale or. its successors, or any administrator appointed by the court, to pay over said fund of $50,000 to the party of the first part absolutely. ” In consideration of such compromise plaintiff consented to the probate of the will and codicils.
Plaintiff has been paid the sum of $115,000, but the defendant trustee refuses to pay over the trust fund of $50,000 on the ground that it cannot lawfully do so, but must continue to hold it and to pay over the income therefrom to plaintiff during his life, and that it cannot lawfully pay over the principal of said fund until plaintiff’s death. Plaintiff contends that the trust should be dissolved and the amount thereof paid to him at once.
The earlier state of the law on the question of the abrogation of continuing trusts is stated in Lent v. Howard (89 N. Y. 169): “Whatever view may be taken of the general jurisdiction of courts of equity, in the absence of any statutory or legislative policy, to abrogate continuing trusts, created for the purpose of providing a sure support for the widow or children of a testator, or other beneficiary, the indestructibility of such trusts here, by judicial decree, results, we think, from the inalienable character impressed upon them by statute. The beneficiaries, of trusts for the receipt of the rents and profits of land, are prohibited from assigning or disposing of their interest (1 R. S. 729, § 63),
The second sentence of this statute would have been applicable to the state of facts here present, and would have justified the plaintiff’s contention that he was entitled to the trust fund upon executing the release provided for.
But this section was amended by chapter 87 of the Laws of 1903 so as to read as follows: “§ 3. The right of the beneficiary to enforce the performance of a trust to. receive the income of personal property, and to apply it to the use of any person, can not be transferred by assignment or otherwise. But the right and interest of the beneficiary of any other trust in personal property may be transferred. ” The same provision, in the identical language, is embodied in the present Personal Property Law (Consol. Laws, chap. 41 [Laws of 1909, chap. . 45], § 15, as amd. by Laws of 1911, chap. 327).
The effect of the amendment of 1903 is thus stated in Fowler’s Personal Property Law (2d ed. p. 89): “ The interests of a beneficiary in a trust to receive and apply the income of personal property have, since the passage of chapter 87 of the Laws of 1903, again become as inalienable as they were held to be under the Revised Statutes, and section 83 of the former Real Property Law.* This section is now an explicit restoration of the former law of this State making certain trust interests inalienable, as we have before noticed at length. But this section, it will be observed, applies only to trusts to receive and apply income to the use of beneficiaries specified and not to other trusts.” (See, also, Metcalfe v. Union Trust Co., 181 N. Y. 39.)
As under the law in existence at the time of decedent’s death and the probate of her will, the interest of plaintiff was inalienable, either by assignment or otherwise, not even his acquisition of the remaindermen’s interest could operate to destroy the trust under which he was entitled to the life estate only, nor terminate in any way his life estate, nor enlarge it into absolute ownership of. the whole fund. He is entitled to the life estate; he owns the remainder; but there is no merger
Judgment is, therefore, directed in favor of defendant dismissing the claim of the plaintiff, without costs.
Ingraham, P. J., Clarke, Scott and Hotchkiss, JJ., concurred.
Judgment directed for defendant dismissing plaintiff’s claim, without costs. Order to be settled on notice.
1 R. S. 730, § 63. Amd. by Laws of 1893, chap. 452.— [Rep.
See 1 R. S. 773, §§ 1, 2.— [Rep.
See G-en. Laws, chap. 46 (Laws of 1896, chap. 547), § 88, as amd. by Laws of 1908, chap. 88; now Consol. Laws, chap. 50 (Laws of 1909, chap. 53), § 108.— [Rep.