101 N.Y.S. 1093 | N.Y. App. Div. | 1907
Lead Opinion
John Sullivan died leaving a last will and testament,-admitted to probate on the 9tli day of March, 1886, by which he gave to his executors and trustees, these defendants, all of his property in
At the time of testator’s death the mortgages upon his real property aggregated $32,960. Following these directions of the will, the defendants as trustees, from the surplus income received by them from time to time, have paid off mortgages" upon the decedent’s real estate, aggregating $18,213.27, and have invested in bond and mortgage from such surplus income the sum of $10,500.
On the 23d day of August, 1887, the defendants presented to the Surrogate’s Court of the county of Mew York, where the will of testator was probated, a petition praying that their account as filed might be settled. A citation was duly issued and all parties interested under the will, including these plaintiffs, were duly cited, special guardians being appointed for such as were infants, and, without objection, the accounts were passed and a decree entered on the 3d day of Movember, 1887, judicially settling and allowing the same, and discharging the defendants in their capacities of executors. The account so judicially settled and allowed showed the payment of specified sums from surplus income toward liquidation of the mortgages upon testator’s real property. On the 16th day of April, 1890, the defendants as trustees filed an account which showed further payments from surplus income, in liquidation of such mortgages, together with a petition praying that the same be judicially settled. All parties were duly cited and appeared, none objecting except plaintiff John Kirk, who objected on the ground that the provisions of the will authorizing the extinguishment of mortgages out of surplus income constituted an unlawful accumulation. The issues raised by this objection were referred by the
_ and his report was confirmed by the Surrogate’s Court by decree entered the 15th day of March, 1891, which judicially settled and allowed the accounts as filed. On the ,31st day of May, 1895, another judicial decree was made settling and adjusting defendants’ accounts containing payments from surplus income in- liquidation of such mortgages, upon which all parties were duly cited and no objection made. ' This decree did, however, contain a provision reserving to any party the right to take such proceeding and action in reference to surplus accumulations as he might deem proper, either at the foot of the decree Or otherwise. Mo action, however,., was taken, and on the 1st of April, 1901, a further decree of judicial settlement of accounts containing items of disbursement in liquidation of mortgages and investment in bond and mortgage from . surplus income-was made, upon the rendering of which all parties.' were cited and no objection made.
The plaintiffs now claim that the direction of the will-to accumur late income and apply the same to the payment of existing mortgages Upon the testator’s real property constitutes an unlawful accumulation, and desire a judgment directing the defendants to restore to them such sums as they have applied to the liquidation of such mortgages and to pay over to them such sums as they ' have invested in- bond and mortgage out of the surplus income; and insist that the- various decrees of the Surrogate’s Court entered on the several judicial accountings to which they were made parties are not a bar to such a claim.
Under the decision of Hascall v. King (162 N. Y. 134) the direction of the will to apply the surplus income to the payment of mortgages upon the real estate of which the testator died seized, constituted án unlawful accumulation and was invalid. The direction to • invest the siirplus income in bond and mortgage Until the termination of the two lives1 upon which the- trust depended is also plainly an unlawful accumulation and invalid.
So far, however, as either has been done and passed upon by the various decrees'óf the Surrogate’s Court on judicial settlement of defendants’ accounts, the plaintiffs are precluded from now raising any question. These .accounts showed certain sums from surplus
With respect, however, to any surplus income now in the hands of defendants not yet'applied-to the payment of mortgages upon testator’s real property or not invested in bond and mortgage and approved by the various decrees of the Surrogate’s Court, the plaintiffs are entitled to relief. None of the various decrees which were entered purported to direct the defendant trustees with respect to the manner in which surplus income should be thereafter applied. They simply approved the manner in which they had theretofore been applied, as set forth in the various accounts. A Surrogate’s Court has no inherent power to construe the provisions of a will, except as a necessary incident to its general powers to control executors or testamentary trustees and to direct the payment or charging of legacies and the like. (Code Civ. Proc. § 2472, subds. 3, 4, § 2481, subd. 11; Washbon v. Cope, 144 N. Y. 287; Matter of Davis, 105 App. Div. 221.) Although the decrees of a Surrogate’s Court made upon the accountings of trustees are conclusive as to the transactions and payments covered by such accountings they form no bar to the proper decision of the question so far as it relates to property coming to the hands of the trustee subsequent to the accounting and still in his hands. (Bowditch v. Ayrault, 138 N. Y. 222; Matter of Hoyt, 160 id. 607; Rudd v. Cornell, 171 id. 114.) In Rudd v. Cornell (supra) there had been a judgment in an action for an accounting and a specified share of the accrued income then in the hands of the trustees had been decreed, and it was claimed that that judgment was res adjudieata with respect to the claimant’s share in any subsequently acquired income. In delivering the, opinion the court, Martin, J., says : “ While that.
To such extent, therefore, as indicated, the plaintiffs are entitled tó judgment against the defendants.
Patterson, P. j., and Clarke, J., concurred; Ingraham and McLaughlin, JJ., dissented.
Dissenting Opinion
I think the decree of the surrogate upon the accounting by the testamentary trustee entered on the 15th of March, 1891, involved an adjudication that the provision of the will directing the application of the surplus income to the payment of the mortgages upon the testator’s real property was valid and not an unlawful accumulation of income prohibited by the law. There was presented on that accounting by one of the plaintiffs a question as to the validity of this provision of the will. He claimed that the application of the surplus income to the payment of the mortgages upon the testator’s real estate was invalid, as an Unlawful accumulation of income. This-question, with the other questions that were presented’ upon the accounting, was.referred to áreferee, who reported that the provisions of the will were valid and not an unlawful accumulation of income, and his report was confirmed by the surrogate and a decree entered in conformity with this report. The surrogate has authority to construe wills when a party expressly puts in issue, before the surrogate, the validity, construction or effect of any disposition of personal property contained in a will of a resident of the State (Code Civ. Proc. §§ 2624, 2812), and a decree made upon a judicial settlement of the accounts of a testamentary trustee has the same force as a judgment of the Supreme Court to the same effect as against each party who was duly cited or has appeared, and every person who would be bound by such a judgment rendered in'an action between the same parties. (Code Civ. Proc. § 2813.)
There can be no doubt that if an action had been commenced in, the Supreme Court for a judicial settlement of the surplus income andan issue as to the validity of this provision of the will had been presented by the pleadings and the court had adjudicated that the
McLaughlin, J., concurred.
Judgment ordered for plaintiffs. Settle order on notice.