13 Misc. 2d 1040 | N.Y. Sup. Ct. | 1958
This application (Civ. Prac. Act, art. 79) is granted and the account of the trustee is settled and allowed. The indicated balance of commissions for the trustee is approved for payment and the amounts requested by counsel for their fees and disbursements shown in the affidavit of Edmund M. Beeeroft, sworn to May 21, 1958, are likewise approved, there being no objection.
Various questions are presented for judicial construction. The trust indenture was executed by the settlor in New York on March 31,1922. In it, she is described as a resident of Honolulu.
The remaining questions are as to the validity of amendments to the indenture in two successively executed instruments on December 21 and 27, 1935, 13 years after the creation of the trust. Particular note is made here that the petition has been supplemented by the affidavit of counsel, Edmund M. Beecroft, sworn to August 6,1958. The petition and exhibits read together with this affidavit, poses questions of the meaning of paragraph Twelfth of the indenture, here quoted in part: “ [settlor] may, from time to time, during the continuance of the trust, * * modify or alter this indenture and the trusts then existing, and the estates and interests in property hereby created to the extent of changing the beneficiaries thereof, as to either principal or income, in whole or in part, or time, terms and manner of payment thereof, save that [settlor] shall not have the right or power in any way to modify or alter the same so as to designate herself or her estate as the recipient of any part or portion of the principal or income thereof, (it being distinctly understood and agreed that the party of the first part reserves no power in any event to revoke the trust in favor of herself or her estate), * * * and no one shall have any rights, interest or estate under this indenture except subject to the proper modification or alteration thereof. ’ ’
The affected portions of the indenture for amendment are summarized now. Paragraph First grants a power of testamen
The first amending instrument of December 21, 1935, wipes out the power of appointment in paragraph First of the indenture and disposes of the principal of the trust upon its termination to the daughter life tenant’s children and issue, determinable by New York law, and also strikes the precatory Thirteenth paragraph. Paragraphs Second and Ninth were to be changed to enlarge the trustee’s powers of management and investment of the corpus by striking the provisions which call for supervision today by the daughter life tenant. The stricture for retention of original property, intact, is modified to voice the settlor’s precatory views for retention in the trust of Eastman Kodak Company stock but nevertheless new power would be granted to convert into cash and securities legal for trust investment in New York. Paragraph Twelfth is changed to make the trust irrevocable and surrendering all power further to modify.
The second amending instrument of December 27, 1935, six days after the first, in its recitals makes reference to the indenture but is notably silent as to the recently executed amendatory instrument. This time in language identical to that in the first amendment, the same changes were to be made in paragraphs First and Thirteenth, termination of the power of appointment and paragraph Twelfth relinquishing all power further to modify. Notably too, nothing was now said regarding the original strict investment and management powers and their supervision.
It is quite clear that the provision in both amending instruments which removes all right of future amendment is valid. The settlor here could always yield any powers which had been reserved. (Bogert, the Law of Trusts and Trustees, § 994; Commissioner of Internal Revenue v. Prouty, 115 F. 2d 331.) That provision in the first amending instrument concludes all subsequent change. The second amending instrument dated December 27,1935, is invalid.
The changes made in the trust in the first amending instrument of December 21, 1935, are only partially valid. The language employed by the settlor in paragraph Twelfth, despite the argument about its broad effect, is in fact limited to the specific subjects mentioned which, ejusdem generis, qualify the general language. The initial reservation to permit amendments affecting beneficiaries and their interests and furthermore the concluding language of the paragraph which subordinates the interests of the original beneficiary to any future action, demonstrates the limited extent of the original reservation — confined to beneficiaries and their interests. Contrastingly, there is nothing stated to suggest any intention of future departure from the expressly mandated requirements for maintaining corpus and for the supervision of the trustee’s administration of the estate in respect to corpus and future investments.
Articles First, Twelfth and Thirteenth of the indenture are held to have been validly amended by the instrument executed
Settle order.