In re Welch

| N.Y. App. Div. | Aug 15, 1897

Ingraham, J.:

By a trust deed executed on the 20th day of October, 1884, and recorded in the office of " the register of the county of New York on the 2d day of November, 1884, Virginia L. Welch conveyed certain real estate within this county to one Henry A. Bassford in trust, to collect the rents, issues and profits of such real estate, and pay over the income thereof to one Edwin. V. Welch during his life, and upon his death the said trust estate was to become the property of the children of the said Edwin V. Welch and Elizabeth J. Murray. Edwin V. Welch is still alive, but on the 19th day of February, 1897, Henry A. Bassford, the trustee named in such trust deed, died. On the 29th day of March, 1897, upon the application of Edwin V. Welch, who was entitled to the rents, issues and profits during his life, and without notice to the remainderman, or others interested in the trust, the court, by an ex parte order, appointed one George F. Elliott “ trustee in the place of the said Bassford.”. A copy of this order is not annexed to the papers, or a part of the record before us. It is conceded, however, that the order was entered ex parte, without notice to any one interested in the trust, except the petitioner who was the life tenant. By those entitled to the remainder in the property after the death of Edwin V. Welch, a motion was made to vacate that order, so that the remaindermen could be heard upon the appointment of the new or substituted trustee. Upon that motion coming on to be heard, Edwin V. Welch, the life tenant, and Elliott alone opposing, the ex parte order of the twenty-ninth of March was vacated and set aside, and from the order vacating such order of the 29th of March, 1887, Edwin V. Welch, the life tenant, and said Elliott appeal.

By section 91 of the Real Property Law (Laws of 1896, chap. ■547) it is provided that, “ on the death of the last surviving or sole trustee of an express trust, the trust estate shall not descend to his heirs nor pass to his next of kin or personal representatives, but in the absence of a contrary direction on the part of the person creating the same, such trust, if unexecuted, shall vest in. the Supreme Court, with all the powers and duties of the original trustee, and shall be ■executed by some person appointed for that purpose under the direction of the court, who shall not be appointed until the beneficiary thereof shall have been brought into court by such notice in such manner as the court or a justice thereof may direct.”

The evident intent of this provision is 'that those interested in the ■execution of a trust should have notice of 'an application to appoint .a person to execute the trust, so that they could be heard as to the individual to be selected by the court under the power given in this ¡section of the- statute. Whether the term “beneficiary thereof” would include all of those contingently interested in the execution •of the trust, it is not necessary now to determine; .but it seems clear that a person in whom is vested a remainder in real property, and whose rights may be most seriously affected by the execution of a trust which has vested in the court, is a beneficiary of the trust, within the provisions of this statute. A trustee in whom, is vested real estate held in trust for a person during life has certain duties as to the corpus of the estate for the protection of the remaindermen. It is his duty to see that the taxes and other charges are paid; that the estate is kept in repair, waste prevented, and the condition -of the estate as it came into his hands protected. To such extent, at least, the trustee occupies a trust relation to the remaindermen, and, independent of the statute, we think that it would be proper for the ■court, before it should make any order as to the method.of executing the trust, or designate any person to execute it, to give the remaindermen an opportunity to be heard. Even if we assume that the. court had the power-to make this order without such notice, it clearly had the power to vacate the order upon the application of any one interested in the estate who had not had notice of the original application, so as to give such person an opportunity to be heard as to either the method of executing the trust or the person designated to execute it. There can be no doubt of the power of the court over a person thus appointed, who is an officer of -the court selected to execute the trust which has vested in the court; and no one interested in such a trust has the right to require that the court should select any particular individual to execute the trust on its behalf. Just what notice of the application should be given to a beneficiary and how given must be in the discretion of the court. If . notice can be given, even if out of the jurisdiction, want of notice should not be encouraged. There are many cases where an individual may be so intimately connected with the person entitled to the income of the trust during his life that it would be improper, against the objection of those interested, to appoint him the trustee or the one to execute the trust vested in the court. Where such an objection appears, the court is certainly justified in selecting some other person who can execute the trust in such a way that the interest of the remaindermen shall be considered.

The facts in this case show, from the affidavit of Mr. Elliott, that he has been in the employ of the person entitled to the income of the trust for life and was appointed at his suggestion. It also appears that, in addition to the real estate which was conveyed to the trustee, there is a sum of money now in the hands of the executor of the deceased trustee which constitutes a portion of the trust estate, being the proceeds of real estate sold for the former trustee; and it appears that there is to be a contest between the remainder-men and the person entitled to the income of the trust estate for life as to the administration of the trust. Under those circumstances it would be quite improper that a person occupying the relation that Mr. Elliott occupies towards the person entitled to the life interest should be the person designated to execute the trust.

We think, therefore, that, upon these facts appearing to the court below, it was the duty of the court to vacate its order appointing Mr. Elliott, and the order appealed from is affirmed, with ten dollars costs and disbursements.

Van Brunt, P. J., Rumsey and Parker, JJ., concurred.

Order affirmed, with ten dollars costs and disbursements.