194 N.Y. 288 | NY | 1909
Lead Opinion
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *290 Bethuel McCoy died testate in 1874. He left him surviving three children, William McCoy, Charles McCoy and Frances D. Wilcox. A daughter, Maria E. Sanders, predeceased him, leaving a husband and two children. This controversy relates to the validity and effect of the seventh clause of his will, which is as follows: "I give, devise and bequeath all the rest, residue and remainder of my estate, both real and personal, as follows: * * * and the remaining third thereof to my said executors in trust for the purpose of paying the income thereof to my daughter, Frances D. Wilcox, for and during the term of her natural life, *292 annually, and at her decease I give, devise and bequeath to her issue, share and share alike, such income, and as each of her said issue shall attain the age of 21 years, I give, devise and bequeath to it one equal undivided share of the principal of said remaining third, and in case my said daughter, Frances D. Wilcox, shall die, leaving no issue born to her, which shall attain the age of 21 years, then and in such case, said remaining third of my residuary estate, I give, devise and bequeath to my daughter, Maria E. Sanders, and my son Charles McCoy, share and share alike forever." By the will the testator's son Charles McCoy was appointed executor thereof.
By one of the codicils the provisions of his will in favor of Maria E. Sanders was modified so as to give her the income of this share for life, and on her death the principal to her husband and children. Maria, as already said, died before the testator. The will was proved and the executor qualified. On the settlement of the executor's accounts in 1880 it was found that the fund for the benefit of Frances D. Wilcox under the seventh clause of the will amounted to $7,512. The executor was directed to invest said sum and apply the income to said Frances during her life, and upon her death to distribute it in accordance with the provisions of the will. The executor died in 1898, when the beneficiary Frances was appointed trustee of the fund. She received the income during her lifetime. On her death in January, 1906, the executor of her will instituted these proceedings for the settlement of her accounts as trustee.
Frances was married at the decease of her father, the testator. She left no issue her surviving, having had but one child, who was born March 6th, 1859, and died on the 3rd of June following. The contest is between Charles B. McCoy and Frank G. McCoy, the children of the testator's son William McCoy, who contend that the whole of the seventh clause of the will is invalid and that the fund passed, as in case of intestacy, and the legatees to whom by that clause the fund is bequeathed on the contingency that Frances should leave no issue who should reach majority. These legatees contend that *293 the gift over is valid regardless of the invalidity of any provisions directing the prior disposition of the fund. The surrogate decided in favor of the legatees. That decision has been affirmed by the Appellate Division by a divided court, and the next of kin now appeal to this court.
It is conceded by both the learned courts below that the provision creating a trust in favor of the issue whom Frances might leave surviving until such issue respectively should reach their majority was illegal and invalid, in that it might suspend the absolute ownership of personal property during lives not in being at the death of the testator. This conclusion was undoubtedly correct (1 R.S. p. 723, § 15), though it would have been valid in the case of real estate if it could be assumed that the trust was several as to the share of each issue. (Manice v.Manice,
It is said by Professor Gray in his work on Perpetuities (§ 331): "Very often, indeed generally, a future contingency which is too remote may in fact happen within the limit prescribed by the rule against perpetuities, and a gift conditioned on such contingency may be put into one of two classes according as the contingency happens or does not happen within those limits; but unless this division into classes is made by the donor, the law will not make it for him, and the gift will be bad altogether. * * * (§ 331.) This is the law even when the division is of the most obvious character. Thus a gift to B, if no child of A reaches twenty-five is bad, although A dies without children; while if the gift over had been if A dies without children, or if his children all die under twenty-one, then on A's death without children the gift over would have taken effect." It was said inIn re Bence (L.R. [3 Ch. Div. 1891] 242, 251), alluding to another decision: "The case is, therefore, no authority for the proposition that every gift over may be analyzed into as many events as are included within its language, and be held good or bad as the events happen."
It is in this respect that the case before us differs essentially from that of Schettler v. Smith (
The first question is, what is the effect of the invalidity of the trust which the testator attempted to create or continue during the minority of the issue of his daughter Frances. The words of the will are "and as each of her said issue shall attain the age of 21 years, I give, devise and bequeath to it one equal undivided share," etc. The general rule is that such terms, although apparently making the gift depend on a contingency, should be construed as applying merely to the futurity of possession. So also the presence of a gift over in case of failure to attain the age of twenty-one years confirms the construction that the gift is vested. It was decided in Manice v. Manice (supra), where the trust during the minority of the issue of the daughter was held invalid as to personalty, that such personalty vested in the daughter's issue on the death of their mother. In this case, therefore, on the death of the testator's daughter Frances her issue would have been entitled to the principal of the trust fund subject only to the limitation in favor of the testator's two children Maria *296 Sanders and Charles McCoy if that limitation is valid. It must be here remembered that the gift over is only in case of Frances leaving no issue who should attain the age of twenty-one years, and that there might have been issue some of whom might arrive at the age of twenty-one years and some of whom might fail to attain that age, in which case the gift over would not take effect.
The remaining question is as to the validity of the gift over. That this gift was contingent, not vested, was settled by the decision of this court in Hennessy v. Patterson (
At common law the suspension of the power of alienation was no factor of the rule against perpetuities either as to real estate or personalty. That rule was against remoteness in vesting and certain future estates were held bad for remoteness, though they did not affect the power of alienation. (Gray on Perpetuities, §§ 1-4, 268, et seq.) That rule was that a future estate must vest, if at all, within lives in being and the term of twenty-one years. Under our Revised Statutes a new rule was substituted for that which had been evolved at common law by the courts and with us, of course, the only question is what does our statute forbid. In the first place it substituted two lives in being for any number of lives in being, and as to real estate a minority instead of a definite period of twenty-one years and for the prevention of perpetuities in real estate beyond the prescribed limit the first and chief enactment of the statute is found in sections 13, 14 and 15 of chapter 1, part 2 of the Revised Statutes, the last of which provides that "the absolute power of alienation, shall not be suspended by any limitation or condition whatever, for a longer period than during the continuance of not more than two lives in *297 being at the creation of the estate, except in the single case mentioned in the next section." That it is the application of this provision which has most frequently come before the courts in the determination of the legality of testamentary dispositions is unquestionable, and this fact has led at times to the assertion that since the enactment of the Revised Statutes there is only one rule against perpetuities in this state and that is that the absolute power of alienation shall not be suspended for more than two lives in being. There are, to me, two unanswerable objections to such contention. The revisers were men of great erudition and professional experience. They understood thoroughly the common-law rule under which they had been educated and had practiced and also the result of the alterations in that rule which they intended to effect. Section 17 prohibits the creation of successive life estates to more than two persons in being and renders all subsequent life estates limited thereon void. It was common knowledge then, as now, that no number of legal life estates of persons in being could suspend the absolute power of alienation for a single instant of time. At least in this respect the revisers intended to enact some further limitation on the power to create future estates than the provision that they should not suspend the power of alienation.
Secondly, we have the provisions of section 18 to 24 with reference to the creation of remainders. The last of these sections prescribes, "subject to the rules established in the preceding sections of this Article, a freehold estate as well as a chattel real, may be created, to commence at a future day; an estate for life may be created, in a term of years, and a remainder limited thereon; a remainder of a freehold or chattel real, either contingent or vested, may be created expectant on the determination of a term of years; and a fee may be limitedon a fee, upon a contingency, which, if it should occur, must happen within the period prescribed in this Article." (Id. § 24.) If the revisers intended, as is claimed, to establish the single rule that the power of alienation should not be suspended for more than two lives in being, it is *298 impossible to understand why these elaborate and minute provisions for the creation of remainders were enacted. Sections 14 and 15 covered the whole subject. Their provisions were absolute and unqualified that the absolute power of alienation should not be suspended by any limitation or condition whatever for longer than the prescribed period. If suspension of the power of alienation was the only rule, what possible object was to be gained by the provisions of the later sections? They added nothing to the efficacy of the former inhibitions, and we can hardly credit the idea that the revisers were under delusion as to their necessity. It seems to me clear that the revisers did intend, so far as remainders were concerned, in addition to the provision against inalienability, to provide against remoteness of vesting which, as already said, was the test of validity under the common-law rule, with which they were familiar. It may be said that this view also accords with that entertained by Mr. Chaplin in his text book on Suspension of the Power of Alienation, where he says (p. 1): "The provisions of the Revised Statutes furnish two rules concerning the alienability and the vesting of estates. These rules may be stated as follows:
"Rule I. Alienability. The power of conveying the absolute fee, in possession, shall not be suspended beyond the statutory period. * * *
"Rule II. Vesting. Estates in remainder shall be so limited that within the statutory period, if ever, they must vest in interest.
"This rule is thus seen to apply to only one class of future estates, namely, `remainders;' but to insist not only on absolute alienability, but also on vesting, which is a broader term, and (except in certain cases of vesting in trust) includes alienability."
That section 17 imposes an additional restriction on the power to create future estates in land is settled by the decision of this court in Purdy v. Hayt (
Section 24, already quoted, concludes "and a fee may be limited on a fee, upon a contingency, which, if it should occur, must happen within the period prescribed in this Article," i.e.,
within two lives in being. This statutory authority for limiting a fee upon a fee is necessarily exclusive; otherwise, why should the statute declare that the contingency must occur within the specified period? It has no necessary connection with the provision restricting the suspension of the power of alienation. It is under this provision that the present case would fall if it were real estate. I have said that the remainder in the present case would on the death of Mrs. Wilcox vest in her issue absolutely, subject to the gift over, but if I err in this view (See Greenland v. Waddell,
Though this case is governed by the statutory provisions relative to estates in personal property, I have discussed the provisions relating to real estate, 1st, because by sections 1 and 2 of the Revised Statutes (1 R.S. 773) relative to expectant estates in such property, it is provided that "The absolute ownership of personal property shall not be suspended by any limitation or condition whatever, for a longer period than during the continuance and until the termination of not more than two lives in being at the date of the instrument containing such limitation or condition; or, if such instrument be a will, for not more than two lives in being at the death of the testator.In all other respects, limitations of future or contingentinterests in personal property" shall be subject to the rulesgoverning future estates in land. And, 2nd, if it were established that the sole statutory restriction on the power to create estates in realty was that the creation of such estates should not suspend the absolute power of alienation beyond the prescribed period, there would be force in the position that the absolute ownership of personal property was not suspended when there were persons in being, no matter in what manner or what the nature of their interests, who acting conjointly could transfer an indefensible title. But if the proposition is established, as I think it is, that the inhibition on the suspension of the power of alienation is not the sole rule against perpetuities as to realty, it is evident that the term "absolute ownership" as applied to personalty must be interpreted in its ordinary and natural sense, and that the same is suspended where the title of one is defeasible in favor of another, and that neither one can be said to possess absolute ownership, even though both are in being at the time.
I have said that testamentary dispositions have been usually attacked in the courts of this state as suspending the power of alienation, but there are some cases in which the limitation of estates has been condemned, even where the power of alienation was not unduly suspended. Oxley v. Lane (
In Knox v. Jones (
In Robert v. Corning (
The question again came up in Henderson v. Henderson
(
Finally, we have the case of Greenland v. Waddell (
It may be well to consider to what the claim, that the suspension of the power of alienation is our sole rule against perpetuities, might lead. A testator might give his estate to *305
a trust company for a thousand years, in trust, to apply the income to his eldest son during life, and on his death to the eldest son of that son, and so on indefinitely during the whole of the trust term, and at the expiration of such term to transfer the corpus to the testator's eldest male issue then living descended from him in the main line. Standing alone this testamentary scheme would be plainly bad, because the trust would render the property inalienable during the trust term which might extend for lives not in being. But if the testator should add to the provisions suggested the further provision that the trustee should have the power at any and all times during the trust term, with the consent of the then existing equitable life tenant, and the person in being who at the time would be presumptively entitled to the next life estate, to terminate the trust and transfer the proceeds to such persons, would the scheme then illegally suspend the power of alienation? It seems to me that under the decisions in the Robert and Henderson cases plainly it would not, for, as said by Chief Judge ANDREWS in the earlier case: "When a trust for sale and distribution is made, without restriction as to time, and the trustees are empowered to receive the rents and profits, pending the sale for the benefit of beneficiaries, the fact that the interest of the beneficiaries is inalienable by statute, during the existence of the trust, does not suspend the power of alienation, for the reason, that the trustees are persons in being, who can, at any time, convey an absolute fee in possession." (
I am, therefore, of opinion that for a contingent limitation of a remainder in personal property to be valid, the contingency must be such as necessarily to occur within two lives in being at the death of the testator. The limitation contained in this will on the death of all issue of the testator's daughter before arriving at the age of twenty-one years is, therefore, void.
The condition in which this case is presented to us creates some embarrassment. Any estate or interest in property as to which the testator dies intestate passes to his next of kin or heirs at law, depending on the character of the property, who are to be ascertained at the time of the testator's death. (Clark
v. Cammann,
The decree of the surrogate and order of the Appellate Division should be reversed, and judgment rendered that the testator died intestate as to the remainder in the fund in controversy after the death of Frances, and that the same passed to his next of kin, with costs to all parties appearing in this court, payable out of the fund.
Dissenting Opinion
In the view I take of this case there is no occasion to consider the question whether the learned revisers of the statutes intended, when providing for the creation and division of estates, to establish the single rule that the power of alienation should not be suspended for more than two lives in being, or, in addition, to provide, as to remainders, against remoteness of vesting, following the rule of the common law. I, therefore, express no opinion in regard to the question.
In the seventh subdivision of the testator's will he divided his estate into three shares and dealt with each separately. The disposition of the third share is challenged; the courts below have held it valid after striking therefrom a void provision, and the judgment entered on that decision is now before us for review.
The seventh subdivision of the will relating to the third share reads as follows: "And the remaining third thereof to my said executor in trust for the purpose of paying the income thereof to my daughter Frances D. Wilcox for and during the term of her natural life, annually, and at her decease, I give, devise and bequeath to her issue share and share alike such income, and as each of her said issue shall attain the age of twenty-one years, I give, devise and bequeath to it one equal undivided share of the principal of said remaining third, and in case my said daughter Frances D. Wilcox, shall die leaving no issue born to her which shall attain the age of twenty-one years, then and in such case said remaining third *308 of my residuary estate I give, devise and bequeath to my daughter, Maria E. Sanders, and my son Charles McCoy, share and share alike forever."
It is conceded by all that the provisions made for the issue of testator's daughter, Frances D. Wilcox, attaining the age of twenty-one years are void on their face, as illegally suspending the absolute ownership of personal property. The contention of the respondents, which has been sustained by the courts below, is that the gift over to testator's daughter Maria and son Charles, share and share alike, if the daughter Frances died leaving no issue, is valid as an alternative bequest.
The Real Property Law (Laws of 1896, chap. 547, § 41) provides: "Two or more future estates may be created to take effect in the alternative, so that if the first in order fails to vest, the next in succession shall be substituted for it, and take effect accordingly."
The chronology of this case sheds much light on the intention of the testator. He executed his will in August, 1872; at that time his daughter Frances was married; a child of this marriage died in 1869, aged three months; Frances was childless from 1869 until her death in January, 1906, a period of nearly forty years. When the will was executed in 1872, the testator was undoubtedly impressed with the idea that ordinary prudence dictated that he should provide a gift over, an alternative disposition of the residue, which embraced one-third of his residuary estate, in the event of his daughter dying without issue. The testator was certainly justified in assuming the strong probability was that his daughter would die without issue. I do not rest my opinion on the assumption that the gift over, by itself, implied alternatives. The provision as to the issue of Frances living and attaining majority was absolutely void and of no effect. With this void provision lopped off, the will could stand as providing that in case the testator's daughter Frances died without issue, the gift over should take effect. The greater included the less.
Without regard to the void provision, the testator discloses the clear intention to give to his daughter Frances the income *309 of one-third of his estate for life, and if she shall die childless he gave to his daughter Maria and his son Charles the principal of the residuary estate. The intention of the testator is clear and unmistakable — to provide for the disposition of the residuary estate in case his daughter Frances died childless. The statute already cited was, in my opinion, designed to cover just such a case as is here presented.
It has been many times said, judicially, that the intention of the testator is sought after by a court of equity even in wills drawn by unlearned men, where inadequate and inappropriate language has been employed, in order that the desire of the testator in regard to the final disposition of his property after he has passed away should not be defeated.
Two distinct provisions are found in this will when properly construed in the light of testator's clear intention; first, the death of Frances without issue; second, Frances having issue who should attain the age of twenty-one years. The first is valid; the second is void and of no effect.
The decree of the surrogate and order of the Appellate Division should be affirmed. I dissent from the decision about to be made.
VANN, WERNER, HISCOCK and CHASE, JJ., concur with CULLEN, Ch. J.; EDWARD T. BARTLETT, J., reads dissenting opinion; HAIGHT, J., absent.
Ordered accordingly.