124 Misc. 709 | N.Y. Sur. Ct. | 1925
James S. Merritt, a resident of Port Chester, N. Y., and former sheriff of the county of Westchester, died April 7, 1919. His will was admitted to probate April 12, 1919. By said will he created certain trust estates for friends, wife and relatives in various portions of his estate. By the 10th paragraph of said will he gave the rest, residue and remainder of his estate to establish and maintain a lodging house in said Port Chester. Said 10th paragraph is as follows:
“ 10. All the rest, residue and remainder of my estate, real and personal, of every kind and nature, wheresoever situate, and which may be subject to my disposal by will, I give, devise and bequeath to my said trustees, their survivor and successors, in trust, nevertheless, to establish and forever maintain in said village, a lodging house, to be named for my mother Emily Merritt, whereat, so far as possible, there shall be provided at all times without discrimination, free, transient sleeping accommodations and shelter for all indigent persons who may apply therefor.
“ I direct that all my pictures be kept intact and thereat Ler placed or hung in said lodging house.”
“ 5. If by and under the terms of the will, deed or other instrument of any person other than myself, the same trust is provided for or created, as is provided for in article ‘ 10 ’ of my said will, to wit, a gift of property in trust as a memorial to my mother, Emily Merritt, and such will, deed or other instrument take effect prior to the time of taking effect of my will, then I direct that the trust provided for by and under said article ' 10 ’ of my will shall be combined with the trust provided for or created by and under the terms of said will, deed or other instrument of such person other than myself, and I do therefor hereby dispose of my said residuary estate accordingly, provided, however it may lawfully be done.”
This paragraph is ineffectual, as no other person provided for a similar trust prior to the taking effect of the testator’s will.
“ 6. In addition to the powers already conferred upon my trustees, I hereby empower them and their survivor, provided it will not in any respect invalidate the provision of my will disposing of my residuary estate, to procure an incorporation under the laws of New York and also to invoke legislative aid, if deemed necessary for the more effectual and convenient carrying out of said provisions. I further direct that no bonds be required of the executors and trustees in my will named.
“ 7. Upon the death, resignation or failure to act of either of my said trustees, I authorize and request my remaining trustees within thirty days thereafter, by an instrument in writing, duly executed and acknowledged by him, and filed to appoint an associate trustee or a successor. I further authorize and empower my said trustees, by like instrument, filed, to appoint a third trustee, or, if there be but one trustee acting, to appoint two trustees. I further authorize and empower my acting trustees, provided it may lawfully be done, by a like instrument, filed, to declare that the trustees hereunder shall be constituted into a board of trustees, with the right for such board, forever thereafter, to fill all vacancies existing therein, the number of trustees constituting the same, however, not to exceed three. Any person so appointed under the terms of this article, shall, without giving any security, have the same rights, powers, discretion and obligations as if he had been originally designated and appointed a trustee by the terms of my will.”
He left surviving him Emma S. Merritt, the widow, and two nephews, James M. Duffy and William J. Duffy, children of his deceased sister. His executors have made their first accounting and show a gross estate of $120,000 with a net estate, with allowance
The 11th paragraph of the will provides for a substitution of a gift in case of failure of prior gifts in these words:
“ 11. Should any gift under this will fail, then I direct that the subject-matter thereof be disposed of as part of my residuary estate, and that failing, I give the same to my said sister or, if she predecease me, to her lineal descendants in equal portions, per stirpes.”
One of the nephews, William J. Duffy, died September 13, 1923, leaving a widow and several infant children, and his death has made the construction of certain paragraphs of the will and codicil a practical question. The 3d paragraph of the codicil gave to the executors certain real estate, in trust, to pay one-half of the net income therefrom to William J. Duffy during his life. The death of William J. Duffy throws the corpus of the trust created for his benefit into the residuary estate, and this is the particular reason why the 10th paragraph of the will must be construed at this time. AE the parties hereto have joined in the request for the construction of said paragraph 10 of the wül. In addition, the executors ask for the construction of the 7th paragraph of the wiE and the 3d paragraph of the codicil.
Section 17 of the Decedent Estate Law, in force at the time of the death of the testator, provided: “ No person having a husband, wife, child or parent, shaE, by his or her last will and testament, devise or bequeath to any benevolent, charitable, Eterary, scientific, reEgious, or missionary society, association, corporation, in trust or otherwise, more than one-half of his or her estate, after the payment of his or her debts, and such devise or bequest shall be vahd to the extent of one-half, and no more.” The law speaks as of the time of the death of the deceased. (Matter of Seymour, 239 N. Y. 259.)
It is the contention of the trustees that the language of the 10th paragraph of the will brings the case within the authority of Allen v. Stevens (161 N. Y. 122), and consequently section 17 of the Decedent Estate Law is not violated and the whole estate in remainder passed to the trustee of the charity trust, subject to the several prior estates created by said will.
The primary question is: Does the instant case fall within the authority of Allen v. Stevens (161 N. Y. 122) (1899)? If it does, section 17 of the Decedent Estate Law does not apply and we need not consider the other questions raised by counsel.
Chief Judge Parker wrote a comprehensive and illuminating opinion in Allen v. Stevens (supra), upon the law relating to charitable trusts. It restates the law, then in much confusion, regarding charitable trusts. It deals with the practice governing administration of charitable trusts and holds that a corporation is not necessary for the execution of a permanent trust for charitable use since the adoption of the act of 1893; that trustees may be named who have control of a charitable trust, and that the Supreme Court in a proper case must take upon itself such execution over which it shall have control where a trustee is not named for the purpose. The court held that the act of 1893 (Chap. 701, as amd.), known as the Tilden Act, restored the ancient law touching charitable uses for indefinite beneficiaries. The 10th paragraph of the will in the case of Allen v. Stevens (supra) gave all the rest and residue of the property to trustees for the purpose of founding, erecting and maintaining a home for the aged. The will contained no authority nor direction regarding the formation of a corporation
It was further claimed that the tenth provision of the will in Allen v. Stevens (supra) was void as to one-half of the remainder of the testator’s estate under section 1, chapter 360 of the Laws of 1860, which is identical with section 17 of the Decedent Estate Law as it existed at the time of the death of the testator in the instant case. With reference to this contention, Chief Judge Parker said: “The testator gives about twenty-five thousand dollars, or less than one-seventh of his estate, to organizations that are within the description of the statute, and in addition to that the residuary devises and bequests are charitable, and, therefore, within the general description of the statute; but as such devises and bequests are not to a ‘ society, association or corporation in trust or otherwise,’ but instead to trustees, they are not within its prohibition.”
Judge Crane, writing for the court in Decker v. Vreeland (220 N. Y. 326, 334) (1917) differentiates the case of Allen v. Stevens (supra), and says: “I think that the words of the Allen case, peculiarly applicable to the Graves will, were not intended to apply to an express trust for the benefit of a charitable corporation or association. There would be no reason for making the beneficial provisions of section 17 apply to a direct gift to charity but not to' an express trust for such a charity. In fact, reason would be against such a construction, as it would appear to be an attempted evasion of the law.”
It is clear that in the instant case an express trust for the benefit of a corporation or association was not attempted nor created. In Jones v. Kelly (170 N. Y. 401) (1902), the opinion being written by the same chief judge, it was held that where the trustees- named are to turn over the subject of the trust to charitable corporations, such beneficiaries are virtually legatees, and a different rule applies than the one laid down in Allen v. Stevens (supra).
In the instant case the learned counsel for Duffy contends that
If the contention of the learned counsel for the heirs at law is sound — that the words “ authorize and empower ” are as forceful as words of express direction — paragraph 6 of the codicil must fail. It would invalidate the provision of the will disposing of the whole residuary estate to charity trustees, and nullify the expressed intention of the testator. This paragraph is self-eliminating.
The term “ authorize and empower,” as used in paragraph 7 of the codicil, is to be construed as vesting a discretionary power in the trustees. These words should be read in their natural and ordinary sense. (Matter of Armstrong v. Murphy, No. 1, 65 App. Div. 123.) It is a grant of authority, not a direction or command to exercise it, nor does it impose an imperative duty. (Commonwealth v. Heller, 219 Penn. St. 65.)
The word “ corporation ” has a definite legal meaning and differs essentially from an “ association,” which may or may not be incorporated. (Matter of Graves, 171 N. Y. 40, 47.) It cannot be soundly or logically argued that two or three trustees of a charitable trust become an “ association ” as the word is used in section 17
Nor can the court agree with the learned counsel for the heirs at law that the authority to declare that the trustees shall become constituted a “ board of trustees,” creates a “ corporation,” as the word is used in section 17 of the Decedent Estate Law. Such a board would not come within the legal classification of corporations as defined by the General Corporation Law (§2, and the subsequent sections thereof). But here there is no direction to form a board of trustees. There is only authority granted, provided it may lawfully be done.
I do not understand that the rule laid down in Allen v. Stevens (supra) has been modified except by the Legislature, when it amended section 17 of the Decedent Estate Law by chapter 301 of the Laws of 1923 by adding after the word “ corporation ” the words “ or purposes.” The court did not overrule, change or modify its decision; the lawmakers did, however, by statute law. Obviously, such legislative enactment was to overcome the rule of law laid down in Allen v. Stevens (supra).
It is my opinion that the gift to trustees for the public charity under testator’s will falls within the rule laid down in Allen v. Stevens (supra) and the gift being to trustees is not in contravention of section 17 of the Decedent Estate Law, as it existed at the date of the testator’s death.
We have a gift to individuals for charitable uses, and not within the purview of section 17 of the Decedent Estate Law, as it existed in 1919. The property is permanently in the trustees, the income to be used for specific purposes. The will directs the trustees named to execute themselves a continuing trust and vests in the trustees a lasting title to the property so devised. The legal title is in the trustees, and in the event of their death, resignation or inability to act the execution of the trust devolves on the Supreme Court. (Allen v. Stevens, supra; Matter of Groot, 173 App. Div. 436; affd., 226 N. Y. 576; Stewart v. Franchetti, 167 App. Div. 541, 547; Matter of LeFevre, 233 N. Y. 138, 142, which carries the same into
Having resolved the primary question in favor of granting the whole remainder estate to the trustees of the charity trust, it becomes unnecessary to take up for consideration the secondary questions raised by the learned counsel for the heirs at law.
Submit decree upon notice to all counsel appearing.