200 Misc. 858 | N.Y. Sur. Ct. | 1950
The testator died on March 16, 1949, and his will was duly admitted to probate on March 31, 1949. The second paragraph of the will disposed of the stock of a corporation of which the testator was the sole owner. Half the shares were set up in trust for the life use of the widow, with remainder to the brothers and sisters of the testator. The remaining shares were given outright to the brothers and sisters except for ten shares bequeathed to employees. All of the outright gifts were subject to the condition that each of the legatees shall agree to vote for and elect ’ ’ the widow as a director of the corporation and that “ they shall further agree that they will instruct and direct ” the corporation to employ the widow as an executive at a stated salary. The agreement was to be executed within such reasonable time as may be fixed therefor ” by the executor. The executor was authorized to take from the legatees “ such agreements as, in his judgment, shall be necessary to carry out effectually the terms and provisions of the bequests, the form thereof to be exclusively determined ” by the executor.
The executor entertained some doubts .as to the validity of the conditions, and he petitioned this court for a construction of the will, a determination of the validity and effectiveness of the conditions and instructions as to the effectiveness of directions given to the testamentary trustee respecting voting the shares of stock. The court held that the agreements required by the will were valid to the extent that it would direct the executor to carry out the terms of the will (see Matter of Feinson, 196 Misc. 590). The court also held that the legacies were subject to a condition precedent.
The citations in the construction proceeding were returnable on May 3, 1949. Three days later, on May 6, 1949, one of the specific legatees died. He was a brother of the testator and of the executor. Prior to the legatee’s death the executor had not decided upon a definitive course of action respecting the agreements. Indeed he was then preparing to submit the matter to the court for judicial instructions. A few days after the petition in the construction proceeding was filed, the executor and another brother visited the now deceased legatee for the purpose of obtaining from him a waiver of citation. The terms and conditions of the will were discussed by them. The executor told the legatee that they could not draw an agreement at that time, as far as the stock was concerned, but on the basis of the terms of the will he gave the legatee the substance of the requisite agreement. The executor said to Ms brother; 66 Everybody
Shortly after the decision was rendered by the court, the executor requested the execution of a written agreement by the legatees in accordance with the court’s instructions. That agreement was executed by the executrix of the deceased legatee and the shares of stock were delivered by the executor to the estate of the legatee.
The widow of the testator challenges the acceptance of the agreement and the payment of the legacy. She contends that the legatee did not comply with the conditions precedent during his lifetime, that the legacy never became effective and is revoked by the terms of the will and that, therefore, the shares of stock pass either under the residuary clause of the will (one half to the widow and one half to the brothers and sisters) or as intestate property.
The court holds that there was compliance with the conditions imposed by the will and that the estate of the deceased legatee is entitled to the shares of stock.
It is often stated as a general rule of law that a condition precedent to vesting of a legacy must be strictly performed. In other cases a substantial performance is all that is required. It seems generally that the apparently different results are dictated largely by the intention and purpose of the particular testator as revealed in his will. (Williams on Executors and Administrators [10th ed.], p. 1013; 3 Page on Wills, § 1288; 1 Boper on Legacies [2d Amer. ed.], p. 766.) Professor Page states the rule thus: “ Whether substantial performance, as distinguished from literal performance, is sufficient, is a question upon which there is a conflict of authority, which can be reconciled, in part, by determining in each case from the will what degree of performance testator intended to exact ” (3 Page on Wills, § 1288, p. 768).
Here the legatee complied with the condition as far as the executor would permit him to do so. The executor had the power to fix the time for the making of the agreement and to determine the form and contents of the agreement. He orally requested an assent to the terms of the will and was satisfied with a verbal agreement in general terms. In his answer in this proceeding the executor alleges that this oral assent constituted an acceptance of the conditions.
The main purpose of the testator in imposing the conditions was to make additional provision for his widow. It was Ms intent not only to bind the legatees but to subject all of the stock to the burden of the conditions. The will expressly states that each of the certificates issued to the legatees shall bear the words: “ this certificate is subject to the terms and conditions set forth in paragraph1 Second ’ of the Last Will and Testament of Mac B. Feinson.” The testator probably realised that any of the legatees would have power to dispose of the stock immediately and doubtless he desired to give notice to any transferees of the conditions under which the stock was held. How effectively he could hind the transferees to the conditions is a question not now necessary to discuss. There can be no doubt that he could effectively bind Ms own legatees. His purpose cannot he fully effectuated if the stock passes, free of any conditions, to Ins residuary legatees or to Ms distributees. His purpose can he realized only if all the stock is taken by Ms legatees subject to the burden of the conditions.
There is sound authority for the executor’s acceptance of the agreement executed by the executrix of the deceased legatee. A ease particularly in point is Matter of Goodwin ([1924], 2 Ch. 26). There the testator bequeathed to Ms trustees an annuity of £500, payable quarterly to his wife during her life. The will declared “ that the said annuity is intended to be in lieu of and in substitution for the annuity of 70 l. per annum which I have covenanted by deed to pay to my said wife and that the bequest thereof herein contained and the í rusts thereof hereby declared shall become muí be absolutely void and of no off. cc (except as regards any money actually paid to iny said wife on account
The same principle was applied in Matter of Sage ([1946] Ch. 332). By a settlement dated October 26, 1926, the settlor transferred certain stocks to his trustees with directions to pay the income to his daughter from and after the date of the execution and delivery by her of transfers to the settlor of certain shares which were then in their joint names. After her death and during the period prior to the execution of the transfers, the trustees were to hold the funds on other trusts. The settlor died in 1942 and up to that time the daughter had not executed the transfers. Thereafter the daughter desired to transfer the shares to the settlor’s executors and the latter asked the court to determine whether such a transfer would constitute a transfer within the meaning of the settlement. Although the facts are somewhat differing in that case from the facts in the Goodwin case (supra) and in the pending one, the court used the Goodwin decision as furnishing the key for solution of the problem. The fundamental question was ££ whether the act of transfer was intended to be something personal to the transferee, or whether a transfer to the settlor’s executors will put the parties in the position which the settlor intended them to occupy.” For reasons stated at length in the decision, the court held (p. 336) that the transfer to the executors ££ would place all parties beneficially interested in the position which the settlor intended them to occupy and would be a sufficient compliance.”
In the pending case, we have not only the formal execution of the agreement by the executrix of the deceased legatee, but assent to the conditions by the legatee during his lifetime and his willingness to go as far toward compliance as the executor of this estate would then permit him to go. The court is satisfied that what has been done constitutes substantial compliance with the terms of the will and that such compliance effectuates the intent and purposes of the testator. The legacy did not lapse but was properly paid to the estate of the deceased legatee.
Submit decree on notice construing the will accordingly.