178 N.E. 555 | NY | 1931
By the sixth clause of his will Justus Miller provided that the residue of his estate should be held in trust and that the income therefrom should be paid in equal shares to his widow and to his son during their lives. In the event that the son without issue should predecease the widow, he devised and bequeathed by the seventh clause one-half of the trust estate to the widow and the other half to such named nephews and nieces as might survive the son. Among the four executors and trustees appointed by the will were William P. Hale and the widow, Elizabeth Miller. In 1897 the *354 will was probated before the Surrogate of Rensselaer county. Shortly after the death of the son without issue in 1919, the three surviving trustees, including the widow and Mr. Hale, instituted an action in the Supreme Court for a judicial settlement of their accounts. The judgment in that action settled and allowed the accounts to July 24, 1919, directed the payment of certain commissions and expenses and also directed the distribution of the estate among the widow and the nephews and nieces. At the date of entry of that judgment the trust estate consisted of mortgages on real estate, several parcels of real estate which had been purchased on foreclosure sales by the trustees, and several parcels of real estate which had been owned by the testator. Reciting the fact that the trust estate included a large number of parcels of real property and that the distributees thereof were willing that such property should remain under the control and management of the trustees for an indefinite time, the judgment decreed that the trustees should retain control and management of the real estate until the further order of the court and that they should account, whenever required, for the principal of the fund remaining in their hands. After the entry of that judgment, the three surviving trustees liquidated the mortgages and made distribution on account to the widow and to the nephews and nieces. The widow died in 1922, and the second trustee in 1924, leaving Mr. Hale the sole survivor. Until the death of Mrs. Miller, the three trustees continued to collect the rents from realty which had belonged to the testator. They performed the same acts in relation to the real estate which had been purchased on foreclosure and which was regarded as personalty. After the widow's death and until the death of the second trustee, the two survivors managed the property. Subsequent to 1924 Mr. Hale alone administered the estate. In 1928 he filed in the Surrogate's Court an account from July 24, 1919, to March 31, *355 1928, and petitioned for a final judicial settlement and for discharge as executor and trustee. His petition was granted, certain of his accounts were allowed and he was discharged. The Appellate Division has unanimously affirmed the decree on the law and the facts. In all courts, the appellants, residuary legatees under the will of the widow who was owner of one-half of the trust fund, have raised the issue of the Surrogate's jurisdiction.
That the trust erected by the sixth clause in the will terminated with the death of the life tenant in 1919 is certain. (Real Prop. Law; Cons. Laws, ch. 50, § 109; Pers. Prop. Law; Cons. Laws, ch. 41, § 11.) The testator's intent to suspend the power of alienation only during the life of his son is clear. Upon the termination of the trust, the duty remained with the testamentary trustees, as such, to divide the personal property and to distribute it. Included within the fund of personal property was the real estate which had been purchased by the trustees on mortgage foreclosure. Until the act of division and distribution should be fully performed, the administration of the trust would not be complete. Even if the title to this personalty had vested in the beneficiaries under the will and had been wholly severed from the trustees, the duty to divide and distribute continued. (Matter of Thomas,
In respect to the real estate which had been owned by the testator and which by no process of reasoning can be regarded as personalty, the Surrogate was without jurisdiction concerning expenditure, income, commissions or any other item relating to it. Upon the termination of the trust, title to that realty immediately vested in the widow and the other beneficiaries mentioned in the will. (Watkins v. Reynolds,
The personal representative of Mr. Hale, who has died since the Surrogate's decision in this proceeding, is bound to account in the Supreme Court for his management subsequent to July 24, 1919, of the real estate which had *357
been owned by the testator. In such an action the evidence may warrant a finding that during these years Mr. Hale by consent or acquiescence was acting as a trustee of some description other than a testamentary trustee or was an agent for those who were vested with title to the realty. Acquiescence is a question of fact. (Myers v. Bolton,
The reversal of this order will result in a new action for an accounting wherein the allowances may be the same as in the present proceeding. Nevertheless, when the jurisdiction of an important court is the main issue, our duty is plain. The public interest and the interest of jurisprudence might be endangered by permitting this decision to go unchallenged. (Sciolina v. EriePreserving Co.,
The order appealed from should be modified, without costs to either party, and the case remitted to the Surrogate's Court for further proceedings in accordance with this opinion.
CARDOZO, Ch. J., POUND, CRANE, LEHMAN, KELLOGG and HUBBS, JJ., concur.
Ordered accordingly.