Kernochan v. . Marshall

| NY | Feb 1, 1901

Lead Opinion

The trustees of the separate trust created by the will of John R. Marshall, deceased, for the benefit of Marie Marshall, his daughter, have brought this action for the settlement of their accounts and for the direction of the court as to the disposition of the trust estate in their hands. The construction of the fourth clause of the will is involved, wherein the testator disposes of his residuary estate upon certain trusts. The executors, as the trustees, are directed to apply the net income to the use of the testator's wife during her life and, upon her decease, to divide the estate into as many shares as there shall be daughters of the testator; allotting, in the event of any daughter having died leaving issue, one share to such issue. The trustees were to hold each share, in trust to apply the net income thereof to the use of the daughter, during the period of twelve years from the decease of the testator's widow, or for the period of her life, if she should not live so long. Upon the expiration of the trust period of twelve years, or upon the sooner decease of the daughter, the testator provided that the share "shall go and belong and I hereby give such share to such daughter if living and her heirs forever." Provisions are then made for the event of the decease of a daughter, either before the expiration of the period of twelve years, or before the decease of the testator's widow, by giving her share to her surviving lawful issue, heirs at law, or next of kin, as the case might be. The testator then concluded the residuary clause by providing. "That if at the expiration of the period of twelve years herein specified for the continuation of the trust or trusts in their favor, it be found by my executors or their successors that either of my said daughters is unable or incompetent to attend to or manage her estate, then they may continue to hold and manage the same upon the trust for such daughter so long as such inability or incompetency shall continue, the estate of such daughter meantime to become legally vested in like manner as if such trust were not so continued as last aforesaid." When his will was made, Mr. Marshall had three daughters; which fact he expressly notes in this clause. His daughter Marie, the disposition of whose estate is now in question, was at the time mentally unsound. After Mr. Marshall's death, in 1881, his widow survived him and died in 1885. The three daughters, further, survived her and upon the expiration of the trust period of twelve years, in 1897, the trustees of each of the three trusts created by the will have accounted for their management, in actions of which the present is one.

It appears that, after the decease of the widow and before the expiration of the trust period of twelve years, Marie Marshall was adjudged to be a person of unsound mind and a committee of her person and estate was appointed by the Supreme Court of this state. The committee claimed to be entitled, as such, to the trust estate in the hands of the trustees and the referee, before whom the trial was had, determined that question is his favor. The referee's report was confirmed and the judgment directed the trustees to transfer to Mr. J.F. Kernochan, as the committee of Marie Marshall, the trust estate remaining in their hands. Upon the trustees appealing, with respect to that direction of the judgment, the Appellate Division modified the judgment by directing that the trust estate should be continued in the trustees' hands, upon the trust created by the will, so long as Miss Marshall's inability and incompetency shall continue. In the opinion of the learned Appellate Division below, the effect of the concluding provision of the residuary clause was to continue the trust therein created for the daughter, who should be found incompetent, and there was deemed to be "no inconsistency between the direction that the trustees should continue to have and manage the estate in trust for the daughter and the direction that the estate of such daughter meantime was to become legally vested in like manner as if such trust were not continued," if the latter direction is construed as "confined solely to thecorpus, or rather the remainder, of the trust estate." I am not able to concur in this view, upon a careful consideration of this residuary clause and of the import which should be attached to its language. The rule of testamentary construction, that the intention of the testator shall be given effect as far as it is legally possible to do so, requires that it be ascertained by reading the language used in its ordinary sense and the testamentary clause, which is in question, as a connected whole. What was the actual intention of the testator, as ascertained from his will, must be decided upon a conviction compelled by the examination of all relevant and material parts. It is clear from this will that, upon the death of Mr. Marshall, each daughter took a vested remainder in his estate. She had then a present interest in the estate; but her enjoyment of its possession was postponed and might be defeated, and the remainder divested, by her death before the time fixed for the termination of the trust. In that event a substitution of her descendants, or of those entitled by law, was provided for. (Livingston v. Greene,52 N.Y. 118" court="NY" date_filed="1873-01-28" href="https://app.midpage.ai/document/livingston-v--greene-3595409?utm_source=webapp" opinion_id="3595409">52 N.Y. 118; Bowditch v. Ayrault, 138 ib. 222.) The duration of the trust for the daughter was fixed at twelve years, or for her life, if she failed to survive that period of time. If she survived the trust period, the testator, in emphatic language, directed that the share held for her, "shall go and belong and I hereby give such share to such daughter if living and her heirs forever." The trust was then determined and all interests in the estate theretofore held in trust were to vest absolutely in the daughter. In order to deprive this gift of an absolute estate to the daughter of its force and to cut down the estate so given, we should find the language relied upon to be unequivocal and to be as clear in that respect, as was the language of the absolute gift. Nothing less will suffice; for the policy of the law favors the vesting in possession of estates and the effort will be in that direction in doubtful cases. Furthermore, the provision, relied upon to lessen the estate given, must be within the sanction of the statute. When the testator provides that his trustees may continue to hold and manage the daughter's estate upon the trust for her, while her incompetency shall continue, and couples with the provision the declaration that the estate of the daughter shall, nevertheless, "become legally vested," it absolutely precludes the notion that the same condition should continue as to the estate; namely, that of a vested remainder; or the belief that the testator intended no change in interest. I should say that there was a careful reaffirmation of the prior gift and that the provision, which, undoubtedly, is very inartificially drawn, is in the nature of a suggestion of a mode of management of his unfortunate daughter's estate; which might be effectuated for want of any objection to it conceivable by him. So apprehensive, however, does the testator appear to have been, lest his direction for a plan of management might affect the quality of the estate to which the daughter had become entitled, by her survival of the trust period, that he, emphatically, adds that her estate was "to become legally vested in like manner as if such trust were not continued." The significance of these words would be lost, if we read them as importing merely an intention to prevent a divesting of the remainder in the daughter, rather than that the estate should be hers, as the law would vest it upon the termination of the trust. That is the ordinary meaning. If the estate was to "become legally vested" as if the trust had ceased, it could only become the absolute estate, already given. But without the legal estate in the trustees, of course, there was lacking one of the essential elements to a continuation of a trust. (Leggett v.Perkins, 2 N.Y. 297" court="NY" date_filed="2004-05-06" href="https://app.midpage.ai/document/real-holding-corp-v-lehigh-2128151?utm_source=webapp" opinion_id="2128151">2 N.Y. 297; Woodward v. James, 115 ib. 346,Greene v. Greene, 125 ib. 506.) That it could not be saved as a power in trust is too clear to require argument. If a trust was intended by the testator, the obvious purpose was to accomplish that for which an express trust is authorized by the statute; but that would require that the whole estate, at law and in equity, should be in the trustees. The testator's direction could not be effectuated as a power in trust; because what was intended was not the authorization to perform some act in relation to the estate, but the whole management of it, as comprehended within one of the four express trusts of the statute. The gift to the trustees of the residuary estate had vested the legal estate in them, subject to the execution of the trust imposed. So far as the performance of that duty required, they had the legal and the equitable estate and only until the termination of the period of twelve years, or until the death of the beneficiary, if she failed to survive the period. To continue the trust beyond that, it was necessary that they should have the same estate. The legal estate could not be subtracted, as it appears to have been here, and the trust continued. Their estate must be commensurate with their trust.

Had the testator intended that the trust existing prior to the termination of the twelve years' period should continue, as it had been created, for the period of the daughter's incompetency, it would have been very easy, and natural, for him to say so and, in unequivocal language, to have qualified his previous absolute gift of the estate to her. Not only has he failed to do this; but he has, in my opinion, by the language of the later provision, reaffirmed his expressed intention that the legal estate should vest in his daughter upon the termination of the trust period. There is, furthermore, this very important consideration in the case, that the Supreme Court has assumed jurisdiction of the estate of Miss Marshall by the appointment of a committee. That fact, of course, is not controlling upon the question of construction; but the committee represents all her temporal interests and, as to any election by the trustees to continue their management of the estate, he is entitled to object that the Supreme Court has intrusted that to him and to say that the solicitude of the testator for the care of the estate given to his incompetent daughter has been met in his appointment.

I think that the judgment of the Appellate Division, in so far as it modified the judgment of the Special Term, should be reversed and that the judgment entered upon the report of the referee should be affirmed, with costs in this court to all parties appearing by separate counsel, to be paid out of the estate.

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Dissenting Opinion

I am of opinion that this judgment should be affirmed. I regard the precise question raised on this appeal as disposed of by the case of Matter of Tompkins (154 N.Y. 634" court="NY" date_filed="1898-01-11" href="https://app.midpage.ai/document/verplanck-v-tompkins-3606434?utm_source=webapp" opinion_id="3606434">154 N.Y. 634, 644, 645).

PARKER, Ch. J., MARTIN, VANN and WERNER, JJ., concur with GRAY, J., for reversal; BARTLETT, J., reads dissenting memorandum; CULLEN, J., not sitting.

Judgment reversed, etc.