In re the Final Judicial Settlement of the Account of Whalen

| N.Y. App. Div. | Mar 8, 1911

Robsoh, J.:

The proceeding which resulted in the decree from which this appeal is taken was begun by filing in Surrogate’s Court the petition of the executor and trustee stating that petitioner is desirous of accounting for the fund held by him as trustee under the provisions of the 3d paragraph of the will of Patrick Quinn, deceased, and distributing the said fund to those entitled thereto, and asking the direction of the court as to the proper distribution of the fund and a determination of the persons and corporations entitled thereto. Answers were interposed by certain of the interested parties questioning the validity, force and effect, not only of the 3d paragraph of the will, but also of the 4th and 5th paragraphs thereof, and asking that the said paragraphs be set aside as indefinite and contrary to law and that-the funds held by said trustee under-tliese clauses be distributed as if the testator had died intestate as to them. It appears that in prior proceedings in the Surrogate’s Court the executors fully accounted for the funds of the estate, and distributed the same, except the three several funds established by these three items of the will, and received as trustees to fill the trusts established by said items the sum of $17,057.48. Thereafter one of the executors and trustees died and the surviving executor had an intermediate accounting in Surrogate’s Court in which a decree of settlement was entered by which the surviving trustee was directed to keep invested the total amount of the trusts set forth in these three items of the will and distribute the same in accordance with the provisions of the will. Apparently the surviving-trustee thereafter managed the several funds as,, directed by the'will and paid the income as thereby directed to the several persons entitled thereto up to the time this proceeding was begun. .

Patrick Quinn, the testator, died February 11, 1885, and his will, with one codicil thereto, both executed in 1884, was admitted to probate on the 26th of February, 1885. He left him surviving Ann Quinn, his widow, and Mary Clark, Ann Quinn and Elizabeth A. Quinn, his daughters, and Edward J. McGarry, Anna J. McGarry and Daniel P. McGarry, children of a deceased daughter, his only heirs at law and next of kin. Thereafter the widow, Ann Quinn, died intestate, leaving as her only next of kin her children and grandchildren, who are the children and grandchildren of the testator above named. After the death of the widow, Ann Quinn, her grandson Edward J. McGarry died, leaving two children, Donald F. and Kathleen McGarry. Thereafter and in December, 1907, Mary Clark died intestate, leaving her surviving her husband, Bernard Clark, and no descendant or ancestor in the direct line.

Testator’s will first directs the sale of all real estate he might own at his death, the proceeds to be added to all his other property, “ thereby constituting one fund,” which after payment therefrom of debts and expenses the executors are directed to distribute in accordance with the provisions of the will following. The succeeding clauses of the will now in question are as follows:

“ Third. I direct my executors to safely invest the six-fortieth (6-40) part of the fund above named and pay the interest thereof half yearly to my daughter Mary, wife of Bernard Clark. In case she should die, however, before my death or before the death of her said husband, Bernard Clark, I then direct my executors to pay over said sum so invested to my wife, Ann Quinn, and my daughters Ann and Elizabeth, share and share alike, the shares hereby in that event given to my said daughters to be subject to the same regulations and restrictions as are hereinafter imposed on bequests to them; but in case she should survive her husband, said Bernard Clark, I direct my said executors to pay over said sum so invested to her my said daughter Mary, absolutely and without restrictions, on the death of her husband.

“ Fourth. I direct my executors hereinafter named to safely invest the six-fortieth (6-40) part of the fund above named, and pay the interest thereof half yearly to my daughter Ann, now a member of the order known as the Sisters of Mercy and named therein Sister M. Xavier, during the term of her natural life, and at her death to pay the principal sum so invested together with any accrued interest then remaining to the said order of the Sisters of Mercy to which my said daughter now belongs and to that house or branch of said order wherein she shall be next prior to her death.

“ Fifth. I direct my said executors to also safely invest another six-fortieth (6-40) part of the fund above named and pay the interest thereof half yearly to my daughter Elizabeth A. Quinn, now a member of the religious community known as the Ladies of the Sacred Heart during the term of her natural life; and at her death to pay the principal sum so invested together with any accrued interest then remaining, to the said Ladies of the Sacred Heart to which community I, at the death of my said daughter give, and bequeath the same.”

The determination of the Surrogate’s Court in respect to the several trust funds which the testator sought to create by these provisions of the will is that, as to the fund established by the 3d item of the will, the widow, Ann Quinn, took a vested contingent remainder in two of the six-fortieths of the estate set apart by that clause subject to the life estate therein of Mary Clark, and the life estate having terminated this portion of the fund is directed "to be paid to the administrator of the estate of Ann Quinn when one shall be appointed.' That as to the two-fortieths given in that item to each of the daughters, Ann and Elizabeth A. Quinn, they are subject to the same regulations and restrictions as are imposed upon legacies given them by the subsequent clauses of the will. That the trusts attempted to be created by the subsequent clauses, thus referred to, being the 4th and 5tli clauses thereof, are each invalid and void, and the fund referred to in each clause, together with the share of the fund given the legatee by the 3d clause, passes to the next of kin of the testator to be distributed as unbequeathed assets.

Counsel for appellants urges that the surrogate’s determination as to the share of the widow, Ann Quinn, in the fund established by the 3d clause and the disposition thereof which he has directed are erroneous. The theory upon which this claim is based is that the interest in remainder in this fund did not vest until the contingency, by which its ultimate destination was to be determined, should be decided, either by the death of the life beneficiary before her husband, or by the death of her husband leaving her surviving. The widow, Ann Quinn, having died before the life beneficiary, it is claimed she never had a vested interest in any part of the fund; and the two surviving daughters, being at the time the contingency was decided by the death of the life beneficiary leaving her husband surviving the only survivors of those to whom in that event the fund was directed to be paid, are now entitled to the whole fund. A sufficient answer to this claim would seem to be that the testator’s intention does not seem to be thus expressed. The contingent interest in remainder in this fund is given to the widow and the daughters, Ann and Elizabeth, as individuals whose right to take is neither limited nor enlarged by words of survivorship. Mor are they designated nor could they properly be considered as forming a class of contingent legatees the membership of which was intended by the testator to be determined when the contingency determining the disposition of the fund occurred.

That the widow, Ann Quinn, took a vested contingent interest in this fund, which on her death would pass as a part of her estate, seems also to be supported by authority. (Hennessy v. Patterson, 85 N.Y. 91" court="NY" date_filed="1881-04-19" href="https://app.midpage.ai/document/hennessy-v--patterson-3601558?utm_source=webapp" opinion_id="3601558">85 N. Y. 91.) But whether it be held that this share of the fund is a part of her estate, or should be treated as a lapsed legacy, the interests of the parties now entitled to share therein would apparently not be materially changed, since it appears that the same persons are the next of kin of the testator and of his widow.

The surrogate decides that the interests of Ann and Elizabeth in this fund are respectively subject to the same regulations and restrictions contained in the 4th and 5th clauses of the will by which the principal legacies to these beneficiaries are given ; and, having determined that these regulations and restrictions are illegal and make void the legacies severally given by thgse clauses, the same result follows as to their interests in this fund. It would seem that, if the regulations and restrictions sought to be imposed upon this direct gift of shares in this fund to the legatees are invalid and illegal, each of the legatees would take her share freed of these invalid restrictions and regulations, instead of the bequest itself being thereby made void and the whole interest of the beneficiary in the legacy swept away because of that fact alone. (Oxley v. Lane, 35 N.Y. 340" court="NY" date_filed="1866-03-05" href="https://app.midpage.ai/document/oxley-v--lane-3588260?utm_source=webapp" opinion_id="3588260">35 N. Y. 340, 349.)

In the 4th clause of the will testator makes evident his intention to establish a fund to be held and managed by his executors as trustees during the life of his daughter Ann, the income of which to be paid to her by the trustees half yearly. So much of his testamentary intention cannot be questioned as in any way illegal, unless it is clear that he has made this provision for his daughter dependent upon some other illegal disposition of the fund to such an extent that his intended testamentary disposition thereof as a whole would be thwarted if this provision be given effect and the illegal portion excluded. If the legal purposes of a trust are separable from ‘the illegal portion thereof, the former may be sustained, though the latter cannot. This principle is consistently stated and applied in numerous cases. That the life interest of Ann Quinn is in no way made dependent upon the ultimate disposition of the remainder, beyond the fact that it is to be derived as income from investment of the fund, is apparent. It is the principal provision for this daughter made by the will. If that fails, her personal benefit from the estate under the terms of the will is practically eliminated. Such result should be avoided unless its attainment is possible only .by'a palpable violation of legal principles. It also appears inferentially at least that for many years she has received the income of this fund, and such payments of the income have received the approval of the Surrogate’s Court on settlement of the accounts of the trustees. The suggestion that it is apparent that testator intended this income to go to the daughter knowing that it would be used by her only for the benefit of the residuary legatee of the fund, the religious community of which she was and is a member, and that the testator’s intention w'as manifest to give in this way the whole fund to the residuary legatee is not persuasive. The income is given to her as an individual. The use to which it is to be applied she determines. It is her property, not subject or subjected to the control of the residuary legatee. Her life estate in this fund is a legal and subsisting interest therein.

The similar interest of the daughter Elizabeth A. Quinn in the trust fund provided for by the 5th clause is for like reasons equally valid and subsisting.

The conclusions indicated above necessarily require a modification of the surrogate’s decree so far as it directs immediate distribution of these funds to the next of kin as property of the testator not effectually bequeathed by his will.

Whether the legatees to which these funds, subject to the life estates therein, are given by the terms of the will can take the several remainders on the termination of the life estates therein it is, perhaps, unnecessary now to determine. The stipulations of fact and the evidence in the record now before us are so incomplete and unsatisfactory that the past and present legal status of these corporations, or associations, and their several legal capacities to take these legacies are so uncertain that it is difficult, if not impossible, to pass intelligently upon their present rights as legatees. In view of the fact that these funds must continue to be held and managed by the trustee for the life of the several life beneficiaries therein decision as to the ultimate disposition of the funds may well abide until in some subsequent proceeding the rights of the parties in interest may be ascertained upon a more complete and satisfactory presentation of the necessary facts.

The decree should be modified so as to provide in effect that the trustee, during the life of Ann Quinn, hold, manage and invest the fund established by the 4th clause of the will together with one-third of the fund established by the 3d clause, and pay over the income thereof to her during her life; that he in like manner hold, manage and invest, during the life of Elizabeth A. Quinn, the fund established by the 5th clause of the will together with one-tliird of the fund established by the 3d clause, and pay over the income thereof to her during her life; that the rights of the parties to the remainder in said several funds are not now passed upon, nor determined ; and that the decree as modified be affirmed, with costs of this appeal to all parties appearing by separate attorneys, payable out of the estate.

All concurred.

Decree modified in accordance with opinion, and as' modified affirmed, with costs and disbursements to each party appearing by separate attorney, payable out of the estate.