30 N.Y.S. 177 | N.Y. Sup. Ct. | 1894
After a careful examination of the pleadings, evidence and elaborate briefs of counsel I have reached the following conclusions:
First. The court has jurisdiction of the action. The plaintiffs and the defendant trustees. are residents of this state. Hr. E. W. S. Johnston has been duly appointed guardian ad litem of the infant William E. J ones. The complaint states that Mrs. Macfie has refused to become a plaintiff, and is, therefore, made a defendant.
All the parties in interest are before the court, and the court has jurisdiction, if it should see fit to exercise it, to the extent even of compelling the defendant trustees to convey the real estate and personalty, although both are situated in the state of Illinois. It certainly has jurisdiction to compel the resident, trustees to account and to pay over any income which shall come into their hands. That the law is as above stated has been decided in many cases.
Secondly. The court will not decline to entertain jurisdiction of this action, because to do so would be a gross injustice to the plaintiffs.
In that action the defendant trustees claimed that the will and codicil did not establish a trust for the benefit of the children of William Ogden Jones, deceased, hut that the one-fifth part of the estate of Mrs. McCagg which had been held in trust for said William Ogden Jones was given to said trustees absolutely and free from any trust in favor of the plaintiffs and Mrs. Macfie. The claim on the part of the defendant trustees was not. sustained by said Circuit Court, which held, on the contrary, that the will and codicil did establish a trust in favor of the plaintiffs and Mrs. Macfie, and that said one-fifth part of the estate of Mrs. McCagg was held in trust by said trustees upon the trusts set forth in the codicil to said will.
Counsel for the defendant trustees now claims that, as the real estate so held in trust is located in the state of Illinois, and the personal property is also held in that state, the validity of the will and codicil and the interpretation thereof must be determined according to the laws of that state.
It must be conceded, for the purposes of this case, that this claim is well founded. The property, both real and personal, is undoubtedly situated in the state of Illinois, and although Mrs. McCagg had been separated from her husband for many years before her death, and had resided in New York and Newport, and although her will recites that she is a resident of the state of New York, still, as she had never been divorced from Mr. McCagg, and as he resided in the city of Chicago, it must be conceded that she had no domicile separate from her husband, and that, not only so far as the real estate, but also so far as the personal property is concerned, the validity and interpretation of her will must depend upon the laws of the state of Illinois.
Counsel for the defendant trustees further claims that the court should not entertain jurisdiction of the action, because
Counsel for the defendant trustees also claims that the court ought not, even if it has the power, to compel the trustees to convey the real estate and personal property in question, as prayed for in the complaint, because the Supreme Court of Illinois has decided that they hold such real estate and personal property in trust, and that although such trust is void under the statutes of New York a decision in this action compelling them to make such conveyance would conflict with the decision of the courts of Illinois in Jones v. Jones, 124 III. 254. The answer to this contention is that this court is well aware that the judgment in Jones v. Jones, 124 III. 254, is binding on all the parties to this action, and will not disregard the judgment in Jones v. Jones, 124 III. 254, and compel the defendant trustees to make such a conveyance. I see no reason, however, why, if a proper case has been made out, this court should not compel the defendant trustees to account, and to pay over to the plaintiffs a portion of the income of the property held in trust by them. It is not necessary in disposing of the question of an accounting, and of the payment o‘f income, for this court to determine what the common or statute law of the state of Illinois is in regard to the creation and validity of trusts. The only questions which the court will determine are, whether the defendant trustees have performed their duties in accordance with the judgment rendered in Jones v. Jones, 124 III. 254, and whether, if they have not, it will compel them to do so. There was a long litigation in the courts of Illinois, and, as above stated, the defendant trustees contended that no trust existed in favor of the plaintiffs and Mrs. Macfie, but such contention was not sustained, the
Thwdly. The defendant trustees admit that the decision of the courts of Illinois was as above stated, but their views and intentions as to the execution of the trust devolved upon them by the will and codicil are set forth at page 65 of the brief of their counsel in the following language: “We intend to execute it in the following manner, namely, by retaining all of the corpus in our hands, and investing and reinvesting it, as we think it best not to give any part of the corpu,s to the children of William Ogden Jones. W® intend to pay all or part of the income, as to us seems wisest, to any one of the children to the exclusion of the other two, and to accumulate the balance, or,' as to us seems wisest, to pay all or part of it to any two, in equal or unequal shares, to the exclusion of the other, and accumulate the balance, or we intend, as to us seems wisest, to pay all of it or part of it to all three, in equal or unequal shares, and accumulate the balance. For the present, however, we propose to pay all of it to Mrs. Macfie, if it seems wisest.”
In my opinion this claim as to the manner in which the defendant trustees are entitled to execute the trust reposed in them finds no support whatever either in the language of the will or codicil, or in the judgments of the courts of Illinois, or in the opinion rendered by Mr. Justice Shops of the Supreme Court of that state, or in the general rules which obtain in the courts of Illinois, and in this and other states, for the construction of wills, or in the circumstances surrounding the execution of the will and codicil of Mrs. McCagg.
It seems to me that the meaning of the codicil as to the
It is not necessary, however, to rely upon my own views as to the meaning of the codicil in question, for, as above stated, the question as to the meaning of the codicil has been passed upon by the Circuit Court of Cook county and the Supreme Court of the state of Illinois, and the judgment of the former court, which was affirmed by the higher court, is, as I read it, entirely in accordance with the views above expressed. The decree of said Circuit Court, which is to be found at page 258 of 124 Illinois Reports, contains the following: “ On hearing in the Circuit Court, the court, in fixing the rights of the children of "William Ogden Jones, deceased, decreed as follows: And that, under the terms and conditions of said will and the codicil thereto, one equal fifth part of the said estate of Caroline Ogden McCagg, including the real estate owned by her at her decease and hereafter described, is to be given to the said Caroline Ogden Jones and Frances Ogden Jones jointly as trustees, for them and the survivor of them to use for the benefit of the said defendants Alexander M. Jones, Julia IT. Jones and William E. Jones, the children of William Ogden Jones, deceased, with power as such trustees and as such survivor to use the said one-fifth part or share either wholly for the benefit of said children, in egual parts or shares, or to use the same in such parts or shares for the benefit of said children respect
The question which the Circuit Court and the Supreme Court had before them was whether the codicil established a' valid trust, and if so, what was the nature of that- trust, but
It has been decided over and over again, in this and other states, that when a legacy is given directly to, or in trust for, several persons, the beneficiaries, being of the same class, take in equal shares, and I see no reason why the rule so universally laid down is not applicable to the present case. Moreover, the circumstances surrounding the making of the codicil, if they are to be taken into account, indicate that the true construction of the codicil is as above stated. "William Ogden Jones, the father of the plaintiffs and the defendant Mrs. Macfie, had died, and, according to the terms of the original will of Mrs. McCagg, his children would have received nothing. Thereupon, the testatrix executed the codicil for the express purpose, among other things, of making provision for the three children of her said deceased son. With regard to this point Mr. Justice Shops, in his opinion, states as follows : “ If the testatrix had intended no provision for the benefit of the children of her deceased son, there was no necessity for revoking the sixth clause of the will or of changing the fourth. The precise result contended for by appellants would have occurred if the codicil had not been made, so far as the effect upon the children of the deceased son is concerned. The will
It is incredible to me that the testatrix, while making this codicil for the express purpose of providing for the three children of her deceased son, .should have intended to so discriminate between them as to put it in the power of the trustees to use the one-fifth of her estate given to them in trust, principal and interest, for the sole benefit of one of said three grandchildren, to the entire exclusion of the other, two, and I do not believe that the language of the codicil ought to be, or can be, so construed. The trustees, as above stated, undoubtedly have a discretion as to how much of the principal and income shall be used from time to time, but whatever amount is used, whether of principal or income, must be divided equally between the three children.
Fourthly. The counsel of the defendant trustees claims that the exercise of the discretion vested in them by the codicil cannot be interfered with or controlled by the courts, but I regard this position as wholly untenable.
The defendant trustees profess great anxiety that their rights in all respects shall be determined according to the laws of the state of Illinois, and not according to those of the state of New York. It is well, therefore, to refer to what Mr. Justice Shops of the Supreme Court said upon the subject. At page 264 his opinion reads as follows : “ The share thus set apart was not to be paid over to the daughter’s absolutely, or for their own benefit, but for the use designated by the donor in the creation of a trust. The daughters, as trustees of this share, are not invested with discretion to withhold the trust fund absolutely from the cestuis que trust. The fund is not theirs in equity, and they cannot make it so by a refusal
Many pages of the brief of the learned counsel of the defendant trustees are occupied with quotations from decisions in cases where it has been held that courts of equity would not interfere with the exercise of the discretion vested in trustees. These cases, although cited on behalf of the defendant trustees, are the very best authorities that could be cited on behalf of the plaintiffs, for in every case it is expressly stated, or it is to be fairly implied from the language used, that the rule invoked on behalf of the defendant trustees has no application in cases where trustees either abuse the discretion vested in them or act in bad faith.
Fifthly. I have carefully examined the evidence in this case, and I feel constrained to say that, in my opinion, it is abundantly proven that the defendant trustees have not only abused the discretion vested in them by the testatrix, but that they have also acted in bad faith in withholding all income from the plaintiffs.
With regard to the plaintiff Alexander MeK. Jones, it appears that all income has been withheld from him for a number of years, because he married contrary to the wishes of the trustees. His account of the matter is somewhat different from that given by.Miss Caroline Ogden Jones in her deposition. He testified in open court that he consulted his aunt in reference to his proposed marriage, and that she con sented to it, and said that she would do whatever she could for him; but that afterwards, and when he had become engaged to the lady whom he afterwards married, the aunt forbade the marriage; that under the circumstances, feeling
With regard to the plaintiff William E. Jones, there are some slight variances between the testimony given by his mother in court and that given by Hiss Caroline Ogden Jones in her deposition. They both testify, however, in substance, that Hiss Jones and the mother of William E. disagreed in regard to the schooling and residence. The mother desired that he should reside with her, and should go to schools of her selection. The aunt desired that he should be sent áway to school with a tutor, and the aunt testified that, because her wishes in this regard were not respected, she withheld all income from the said William E. Jones.
Leaving out entirely the testimony given by Alexander HcK. Jones and his mother and William E. Jones, and assuming that the evidence given by Hiss Caroline Ogden Jones in her deposition is strictly true, I regret that I am obliged to say that her evidence conclusively shows that her refusal to pay any income to the plaintiffs, and her proposal
In my opinion this conduct on the part of the trustees would have justified the court, ujjon a proper application, in summarily removing them and in appointing others in their places, and it now makes it the duty of the court to exercise all the powers it possesses to redress this great wrong on the part of the trustees.
Sixthly. The next question is as to what power the court possesses in this regard, and upon this point I am compelled * to differ with the learned counsel for the plaintiffs, whose contention that the court has the power to compel the trustees to convey the entire trust property to the plaintiffs and Mrs. Maefie seems to me to be wholly untenable.
As above stated, the property consists in part of real estate situated in the state of Illinois, and in part of personal property which is also held in that state.
Counsel for the plaintiffs claims that the fee of said real estate, and the title to such personalty, is vested in the three children of William Ogden Jones. This view, however, is contrary to the plain meaning of the codicil and the decision of the courts of Illinois. The codicil provides, among other things, that upon the death of William Ogden Jones, the father of the plaintiffs and Mrs. Maefie, the trustees named in the will shall give the part or share set apart for the use and benefit of the said deceased son to the defendant trustees to be used for the benefit of his children. Moreover, the said
It is true that the codicil does not in terms state what disposition is to be made after the death of the surviving trustee, nor does it, in terms, provide what shall become of the property in case of the death of one or more of the children. The failure of the codicil to expressly declare what shall become of the property in these two events does not affect the fact that at the present time the title of the real and personal property is vested in the defendant trustees, upon certain trusts, and with certain powers, and that the plaintiffs and Mrs. Macfie have no present right to have the property conveyed to them. The question as to the final disposition of the property upon the death of the surviving trustee, and as to what shall become of it in case of the death of one or more children, will not, I imagine, prove to be questions of difficulty when they shall arise, but they are not involved in the present inquiry, and I express no opinion in regard to them, but leave them for future determination when they shall arise.
Seventhly. It does not follow, however, that the court is
Upon the coming in of the report of the referee, the court will also have the power, if it sees fit, under the prayer of the complaint for further relief, to remove the trustees and appoint others in their stead, and to direct payment of such amount as shall be necessary for the support of the plaintiffs; or it may leave the present trustees in office and compel them to make payment of such amount. Moreover, as the trustees admit that they have on hand many thousand dollars of unapplied income, and as it does not require any further testimony to satisfy me that it is absolutely necessary that the plaintiffs should receive something at once for their support, I see no reason why the interlocutory judgment to be entered should not direct the immediate payment of some amount.
Eighthly. As plaintiffs’ findings are not all drawn in accordance with this opinion, their counsel may submit further findings if they see fit, or, if they do not desire to do so, they can so notify me, and I will then dispose of the case upon the findings already submitted.
Ninthly. Some of the testimony given by Charles H. Holt, under the commission which was put in evidence, seems to me to be immaterial, and some of it seems to me to be incompetent, but, in view of the disposition which, as indicated in the foregoing opinion, I think, should be made of the case, I have concluded to overrule the objections of plaintiffs’ counsel to the eighth, ninth, tenth, eleventh, twelfth, fourteenth, fifteenth, sixteenth interrogatories, which were administered to said Holt, and to deny the motion to strike out the several
Ordered accordingly
Subsequent to this decision a judgment was entered removing these trustees, and then the defendant trustees and also the defendant Macfie made motions to vacate this judgment, and the following opinions were handed down:
This is a motion made by the defendant' trustees to vacate the judgment heretofore entered.
First. It is claimed that this motion should be granted because said trustees were removed entirely on ex jparte proceedings, without being given a day in court, and without being permitted to offer any evidence in justification of .their acts.
I am wholly unable to understand upon what ground this claim is made by the counsel for the defendant trustees.
The complaint in this case did not charge that the defendant trustees had appropriated any of the trust funds to their own use, but it did charge gross misconduct on their part in refusing, for frivolous reasons, to pay over to the plaintiffs any portion of the principal of the trust funds in their hands, or the interest received by them thereon. The prayer of the complaint was that the said trustees should be compelled to pay over to the plaintiffs and the defendant Mrs. Macfie the whole of such trust fund. This was not, in terms, a prayer for the removal of the defendant trustees, but it was equivalent to such a prayer, for if the defendant trustees had been compelled by the court to turn over the whole fund to the plaintiffs and the defendant Mrs. Macfie they would have been, in effect, removed from their position as trustees, for they would have no further functions for them to perform as such trustees.
The case was brought on for hearing at the regular Special Term and testimony was taken upon both sides. The deposi
Second. It is claimed that the judgment should be vacated because the action was not to bring about the removal of the trustees, but simply one to compel them to perform a-trust.
Thwdl/y. It is also objected that this court has no power to remove a trustee created by the will of a citizen of a foreign state never proved in this state.
It is true, as claimed by counsel, that the courts of this state cannot remove or exercise disciplinary control over a foreign executor. The rule, however, is otherwise as to trustees, appointed by a will which has been proved in another state, who reside in this state. Thus the doctrine is laid down in Perry on Trusts, and is fully supported by the cases there cited.
Fowribdy. It is objected that the New York Supreme Court has no power to remove the defendants, because such power is given by statute, and is expressly limited to the cases covered by the statute, and that the case at bar is not one of them.
The answer to this proposition is that the defendant trustees were not removed under and pursuant to the power given by statute, but under the general inherent power which courts of equity have over trusts and trustees.
Fifthl/y. The judgment herein was duly and regularly entered, after a trial at the Special Term, and the remedy of the defendant trustees, if they "feel aggrieved thereby, is not
Sixthly. The motion should in all respects be denied, without costs. The order will be settled on notice.
This is a motion made by the defendant Mrs. Mache to vacate the judgment heretofore entered herein.
The .general objections to such judgment made by the counsel for Mrs. Mache have been answered in a memorandum hied herewith upon the motion made on behalf of the defendant trustees to vacate such judgment, and it is unnecessary to repeat what is stated in that memorandum.
The counsel of the defendant Mrs. Mache makes a further objection to the persons who have been appointed trustees in place of the original trustees. No suggestion whatever is made against the personal character or ability to discharge the trust of either of such new trustees, nor is any suggestion made that the bond of $250,000, which they have been required to give, is not amply sufficient to protect the interests of all the cestuis que trust. It is objected, however, that such new trustees are not friendly to Mrs. Mache, but, after examining all the papers which have been submitted on this motion, I am satished that this objection has no foundation, and is not made in good faith. It appears that Dr. L. White, since the commencement of this action, has acted as the physician of Mrs. Mache, and has been and is now on friendly terms with her. I am also satished that Mr. Johnston has no personal ill-will against Mrs. Mache, and has heretofore been upon friendly terms with her, and that he can and will act with entire impartiality as between her and the plaintiffs.
It is, moreover, impossible for me to see how the new trustees, if they were so disposed, could do any injustice to Mrs. Mache.
The judgment entered herein adjudicates that each of the plaintiffs and Mrs. Mache have" equal rights to the trust fund, both principal and interest, and that while the trustees have a certain discretion as to the amount which they will pay-over
The motion will be denied, without costs, and the order will be settled on notice.
Motion denied, without costs.