Louisville Presbyterian Theological Seminary v. Fidelity Trust & Safety Vault Co.

113 Ky. 336 | Ky. Ct. App. | 1902

Opinion of te court by

JUDGE DURELLE

Affirming.

The Fidelity Trust & Safety Vault Company, as executor of the will of Florence Irvin Botto, brought suit for the construction of certain clauses of her will. By the will of James F. Irvin his widow, Florence, was given power by last will to dispose of his estate. She executed a last will under this power of appointment, married William M. Botto, died childless, and her will was duly admitted to probate. Slie left legacies to 21 persons and corporations, aggregating $236,000. Clauses 1 and 2 direct the payment of debts and care of family vault. Clause 3,makes various specific legacies of jewelry and other personalty. Clauses -1-1!) give 16 general or pecuniary legacies, aggregating $182.-000, as follows. Bell C. McVay, $15,000; Philip T. Chinn, $3,000; Second Presbyterian Church, $10,000; Chas:.. R*, Hemphill, $15,000; Home of the Innocents, $5,000; Young Men’s Christian Association, $10,000-; Louisville Presbyterian Theological Seminary, $10,000; Polytechnic Society of Kentucky,' $.10,000 Cloteal B. Botto, $15,000; Rodman Grubbs, $15,000; Irvin Lindenberger, $10,000; Anna Foster, $8,000; Louisville Presbyterian Orphanage (in trust), $10,-000; Home for Infirm Colored People (in trust), $1,000; Norton Memorial Infirmary (in trust), $10,000; Wm. M. Botto (in trust), $35,000 — $182,000. Clause 20 gives to the Fidelity Trust & Safety Vault Company, as trustee, $6,000, in trust, to pay the income thereof to Jane Ballard during her life, with the further provision that “at her death said fund shall go to Mrs. Belle McVay, Mrs. Cloteal Botto, and the Louisville Presbyterian Theological Seminary, as part of the residuum under the 26th clause of this will.” Clauses 21 to 24, inclusive, in exactly similar language to that used in clause 20, provide for like trusts to the Fidelity Trust & Safety Vault Company in favor of Alex. McHarry, Jane Jackson, Jemima Johnson, and Mary Costello, to pay them the income upon $12,000 each during their respective lives, with the same provision for the disposition of the fund at their deaths, respectively. Clause 26 is as follows: “All the balance of said estate in possession, reversion, and remainder, including both my own and the estate which I have the right to dispose of under the will of my said husband, ■I devise and bequeath to Mrs. Belle McVay, Mrs. Cloteal Botto, and the Louisville Presbyterian Theological Seminary, in fee simple absolute, in the proportions of one-eighth to Mrs. Belle McVay, One-eighth to Mrs. Cloteal Botto, and three-fourths to the Louisville Presbyterian Theological Seminary.” Jane Jackson, the cestui que, trust under clause 22, died before the testatrix. Alex. McHarry, the cestui que trust under clause 21, died after the testatrix, and after the original petition was filed in this case. The other cestui que trustent are still alive. While the legacies given to the 21 legatees aggregate $236,000, it appears that the net value of the estate, after the payment of debts, costs, etc., will be less than $160,000. The legacies must, therefore, abate.

On behalf of Mrs. McVay and the seminary, who may be •termed remainder-men in clauses 20 to 24, inclusive, it is insisted that at the death of Jane Jackson and the other ■cestuis que trustent, who may be termed life tenants, the remainder, after abatement, on account of the deficiency in the estate, of the funds wherein they take a life interest', should go absolutely to Mrs. McVay, Mrs. Cloteal Botto, and the seminary, in the proportions designated in clause '26, viz., one-eighth to Mrs. McVay, - one-eighth to Mrs. Cloteal Botto, and three-fourths to the seminary. On the other hand, the other legatees insist that, as each life tenant dies, the principal fund must go to pay the deficiency in the remaining legacies, including the other trust funds, under clauses 20 to 24, inclusive, and that it is only after the whole $236,000 of legacies are paid in full that the three remainder-men are entitled to any part of the funds held in trust under those clauses. As the estate is sufficient to pay only about 60 per cent, of the legacies, independent of the sums named in these live cliiuses, and only about 78 per cent, if those funds are used to pay the deficiency in the general legacies, it is evident that, if the second contention is sustained, the remainder-men will take nothing by virtue ■of these clauses, except in so far as the legacies directly to them are increased by those funds being used to make up the deficit. The question for decision is the construction of these five clauses, — 20 to 24, inclusive. The chancellor decided that Belle McVay, Cloteal Botto, and the seminary were not entitled, under the twenty-second clause of the will, to the fund devised to Jane Jackson for life, and that no fund should be set aside for distribution under that clause; that they were not entitled under the twenty-first clause to the fund devised to Alex. McIIarry for life, and that the fund devised to him is to be treated, from the date of his death, as a part of the estate for general distribution among'all the legatees under the will; and that, at the respective deaths of Jane Ballard, Jemima Johnson, and Mary Costello, the funds held for their benefit should be applied, ratably, to the payment in full of all the other legacies, including those of such life tenant or tenants as may be alive at the date of such death; and after the payment in full of all such legacies, with interest, the surplus is to pass as residuary estate under the twenty-slixth clause of the will. As before stated, there will be no surplus. Mrs. McVay and the seminary have appealed. Mr.s. Cloteal Botto did not unite in the appeal, but by her counsel asks the same construction which is desired by appellants.

The question for decision is, in what capacity do Mrs. ■McVay and the seminary take the remainders after' the death of the life tenants? Do they take as residuary legatees, receiving no part of the remainder left to them? or do they, as remainder-men, take the remainders free from the claims of the other general legatees? The thanks of the court are due to counsel for the manner in which they have, presented both sides of this question. With great ability counsel for appellants maintain the proposition that Mrs. Florence Botto believed the estate devised would pay in full all the legacies and leave a substantial residuum, independently of the principal of the five trust funds, and that the bequest of these funds to the three remainder-men named was intended to be' a gift thereof as a whole, in addition to that indeterminate, but certain, residuum.

The difficulty of the question before us arises in great-part from the fact that the testatrix did not believe the estate to be insufficient to pay the legacies in full and leave a residuum, and therefore made no provision to show what legacies she desired to abate, or the proportion in which she wished them to be abated, in the event the estate should prove insufficient. Her intention was, undoubtedly, that each of the legatees should be paid in full. She intended that there should be a residuum, and that the residuum should be apportioned between the residuary legatees in the proportions stated. But the estate was insufficient to pay even the general or pecuniary legacies, and the court is, therefore, confronted with a condition which the testatrix did not consider at all. The general rule of construction in such cases is thus stated in Page, Wills, sec. 772: “Testator’s will does not, however, often contain provisions directing the course in which legacies given, 'shall abate, since testator rarely contemplates the jpossibility of his estate failing to pay his debts and legacies in full. In the absence of specific provisions in the will, the law must provide in what order the different classes of legacies shall abate. This result is reached by general rules which are ini ended to-express and enforce the probable intention of the average testator. It is another of those difficult cases where the courts must determine the intention of testator upon a subject upon which he never had any intention. If testator’s estate is sufficient to pay off all his legacies and devises in full after paying debts, the legacies given in the residuary clauses abate first. No payment can be made to residuary legatees until al’1 other legacies have been paid in full. . . . The reason underlying this rule is that, as testator bequeaths in a residuary clause only that part of his property left after the payment of the bequests and devises previously given, his intention will be best given effect by using the- residuum first in paying testator’s debts. The purposes of all these rules is to approximate testator’s intention as it would probably express itself if he had been aware of the actual relation of the value of his property to the amount of his debts, since it is- impossible to give literal effect to the testator’s intention.” Now, it is contended for appellant that, in construing the word “residue” or “balance,” the opinion of the testator that there would be a balance is sometimes given controlling influence. The case of In re Pittman’s Estate, 182 Pa., 355, 38 Atl., 133, is cited as an illustration. There, the testator, owning a 135-acre farm and other estate, devised to Pittman 20 acres, to Johnson 30 acres, and 'to his widow the “balance” of all his property. Unexpected debts being proved against the estate, it was contended that the devise to the widow was a residuary one, whereas the devise to Pittman and Johnston were specific. But it was held that' “the word ‘balance’ ' left to her the 85 acres of the farm, and every article of personal property, as specifically as if enumerated and described at length. He does not leave to her ‘a’ balance, in the sense that she was to have what remained after payment' of debts and legacies. She was to have ‘the’ balance, distinct and specific, after cutting off the two fields.” So in Page v. Leapingwell, 18 Ves., 463, the testator directed that Mitford Castle should be sold for not less than £10,000; that £7,800 should' go to various named objects, and the “overplus moneys” to Ann Pugh and T. H. Page. The castle brought only £7,000, and the court held that the gift of “overplus moneys” was not a mere residuary estate, but a specific gift of the difference between £7,800 and the £10,000 which the testator expected the castle to bring. It may be said that in neither of these cases are) there used the words “residue,” “residuum,” or “residuary estate,” which are recognized words of art having a distinct, legal meaning. In the Pittman ease, moreover, there was presented the question of abating the provision which the testator had made for his widow ip favor of comparative strangers.

It is contended, also, that the construction given! by the chancellor compels the rejection as surplusage of the words “at her death said fund shall go to Mrs. Belle McVay, Mrs. Oloteal Botto, and the Louisville Presbyterian Theological Seminary, as part of the residuum, under the 26th clause of this will,” because, without that language, five times repeated in clauses 2(Lto 24, inclusive, the remainder would have been undisposed of, except by the residuary clause, but would be effectually disposed of by that clause, the legatees thereunder taking such part as might not be required for the payment of other legacies; that each clause, each paragraph, and each word in the will should, if possible, be given .some effect (Sneed v. Reardon, 1 A. K. Marsh, 217; Churchill v. Reamer, 8 Bush, 260); that the use of the same language five times, in five distinct clauses indicates conclusively that they were expressive of some intention on the part of the testatrix other than that expressed in the residuary clause. It is further urged that the funds in which life estates were given in the five clauses (20 to 24, inclusive) were specific sums set aside, separate and distinct, from her other estate, and held by a trustee, with the direction that, at the death of the life tenants, “said fund shall go to Mrs. Relie Mc.Vay, Mrs. Cloteal Rotto, and the Louisville Presbyterian Theological Seminary, as part of the residuum under the 26th clause of this will;” that without the limiting clause, “as part of the residuum,” this would constitute a clear and unqualified gift of the principal funds as a whole io the parties named; that this manifests an intention that those persons shall have those particular funds, as definite, separated, and identified parts of the estate, and therefore the qualifying clause “as part of the residuum,” must be construed as a reference to the twenty-sixth clause, for the purpose, merely, of ascertaining the proportions in which the legatees are to take; and, further, that when in the residuary clause she disposed of “all the balance of said estate,” she obviously meant the balance left after paying in full the legacies before provided for, including the $54,000 of trust funds. And it is further urged that, whereas she had given general legacies to the Christian Association, to the Polytechnic Society, to the Presbyterian Orphanage, to the Norton Infirmary, to* the Second Presbyterian Church, and to the appellant seminary of like amounts in the preceding clauses of her will, the appropriation of the greater portion of these trust funds to the seminary showed a desire upon her part to make the seminary a favored legatee; and it is unreasonable to con-elude that, in tlie event of a deficiency of the estate, she intended to apply the whole of the trust funds, which formed the distinguishing mark of her favor to making the less-favored legatees equal with the one which she evidently intended to make superior.

The answer to many of these contentions is to be found in the fact that the will was drawn by a person .skilled in such labors, and familiar with legal nomenclature; that technical terms are used, presumably with knowledge on the part of the testatrix and her advisers of the effect given to such language by the general rules of construction, in the (>vent there should prove to be a deficiency of the estate. It is quite possible — it is, in fact, probable — that if she had known of the deficiency she might have cut out entirely a number of the general or pecuniary legatees. But she provided for all of the legatees in language which indicates an equal desire that each should have in full the legacy 'specified. So far as the general legacies are concerned, they must be placed upon the same footing, and share ratably in the estate.

She provides a residuary clause. That disposes of what is left after payment of the general legacies. If nothing is left, nothing is thereby disposed of. We are bound to presume that she knew this. In the five clauses under consideration, she provides that the residuary legatees are to take the remainders “as part of the residuum.” It is of no use to speculate upon what she would have intended had she contemplated the deficiency which confronts the court. She had no intention about it. She did not consider the contingency. We must construe what she said, and we must construe it in the light of the recognized rules' of construciion, and hot by speculation as to what she-would have intended had she foreseen the present situation. What she-said was that these funds should go as part of the residuum. She said, further, they should go under the twenty-sixth clause of the will.' If they go under the twenty-sixth clause of the will, they go as residuum, and'only after payment in full of the general legacies. This was not a mere reference to that clause to fix the proportions in which the legatees were to take. , Such a construction involves the absolute rejection of the last phrase, “under the 26th clause of this-will.” We must assume that if her intention had been merely to fix the proportions, she would have used language-which -would obviously have indicated such intention. These words are in the will, “and no word is to be rejected, unless there can not be a rational construction given to- the instrument with the words as they are found.” Churchill v. Reamer, 8 Bush, 260; Childers v. Logan, 23 R., 1239, 65 S. W., 124. Nor is there anything to 'indicate a different intention as to the disposition of these trust funds when they become part of the residuum from that expressed in ■the thirtieth clause, where the testatrix, provides for the mode of dividing the residuum; or from that of the thirty-second clause, where -she provides for the contingency of the natural persons named in the twenty-sixth clause dying; without leaving descendants. The authorities which bear upon this question are few', and not all of those cited shed light upon the question. In Nickerson v. Bragg, 21 R. I., 296, 43 Atl., 539, the testator, after making certain legacies,, provided: “If any of the persons named above in this, seventh item be not living at the time of the settlement of my estate, then the share of that person or persons shall’ be placed with the remainder of my estate.” Two legatees had died. There was a deficiency of funds. The court,, construing tlie will, said: “We see no reason to infer that these' legacies were to be taken out of the general rule and made specific gifts to the remainder-men. The gift of a residue is subject to the precedent claims upon the estate. It is a gift of what remains after the debts and legacies are paid. Tomlinson v. Bury, 115 Mass., 346, 14 N. E., 137, 1 Am. St. Rep., 464; Derby v. Derby, 4 R. I., 419. The amount, therefore','of the lapsed legacies will go to the fund for the general pecuniary legatees.” The various cases which arose in New York over the will of Mary I-Iopeton Drake are much relied on by counsel for appellants. The will was five times construed by various courts. It disposed of a very large estate, and contained many apparently conflicting provisions. The executor became a defaulter and absconded. The estate proved insufficient to pay all the sums bequeathed. One of the questions decided upon the construction of a.provision that, upon the death of the life tenant of certain property bequeathed in the trust, the property was “to fall into and be disposed of as part of my residuary estate.” Said Judge Yan Brunt, in his opinion in one of the cases (Wetmore v. Hospital, 56 Hun, 313, 9 N. Y., Supp., 753): “The question necessarily presented here is, wdiat residuary estate did the testatrix intend? There seems to be in this will three residuary estates. The first one mentioned is in the seventh clause, the next one is in the comniQncement of the eighth clause, and in the same clause, at the end thereof, we find the final residuary clause.” The cases are too long and complicated to be here discussed with any degree of particularity. There are some expressions used in the various opinions which seem to favor appellees’ contention. But it is sufficient to say that, under the language used in that will, and by arguments drawn from its various provisions as to the probable intention of the testatrix, the various courts which construed it reached a conclusion which, on the whole, favors the contention of appellants here, and held that the remainder, which was directed to “form part of my residuary estate,” was a gift of the remainder to four infants named in the latter portion of the eighth clause as “residuary legatees.” Said the New York court of appeals, through Judge Peekham: “We can not say, as a matter of law, that testators always mean precisely and definitely the same thing when they use the same expression in different parts of their wills. It is a good rule to say that generally they do. It is always, however, a question of intention, and that intention the context or the facts surrounding the subject may show to be different in different places, although the same expression may be used in both.” Some of the arguments by means of which the New York court reached its conclusion find no basis in the case before us. The reasons there given for the decision do not here exist, and in view of the peculiar circumstances of these cases we do not regard them as authority for us to depart from the general rule of construction in such cases. In the case of Porter v. Howe, 173 Mass., 521, 54 N. E., 255, the decision merely illustrates the general principle that a residuary estate is the residue which remains after the payment of the general legacies. An annuity was given by one clause of the will for life. There was a residuary clause, by which the remainder of the estate was to 'be distributed to two charities. The estate was insufficient to pay the general legacies. The court held that the gift to the residuary legatees was only of such part of the estate, if any, as remained after the payment of all the previous legacies in full, and that the fund retained for the payment of the annuitant was to be used, upon her death, to make up the deficiency. These are all the American cases relied on.

Some English cases cited seem to have more or less application, though none of them is directly in point. In Farmer v. Mills, 4 Russ., 86, relied upon by both sides, annuities were given, to be respectively secured by investment of sufficient principal funds, with a, direction that, “as the annuitants should die, the sums by which the annuities were secured should sink into and become a part of the residue of-his estate.” The residue of the estate was then devised to certain named persons. By a codicil it was directed that, in case there was not sufficient property to produce interest sufficient to pay the annuities, “an equal deduction be made from each annuity, ratably, according to its amount.” The estate proved inadequate, and the court held that, on the death of an annuitant, the principal did not go to increase the other annuities to the amount specified in the will, but went direct to the residuary^ legatees, because the codicil showed that the annuitant who received a reduced annuity received all the testator intended he should receive in case of deficiency, and the principal sum which produced his annuity went to the residue, as it would have done if the property had been adequate to produce the sums given by the original will. The court said: .“If the case had rested upon the will, the residuary legatees could have taken no benefit until the annuities were fully pro-, vided for,” In Re Lyne’s Estate, L. R., 8 Eq., 482, also cited by both parties, the testator made several general bequests, and gave to trustees £1,000, to be held for the benefit of Sarah Sands during life, and at her death, if childless, to “fall into and become part of his residuary estate.” The “residue” was devised to named persons. By a codicil . it was provided that, if the estate should be insufficient to pay all the legacies in full, such legacies should abate* proportionately. The estate was insufficient, the £1,000 legacy was abated to £508, the life tenant died, and it was held that the fund must be paid to the legatees whose legacies had abated, to the exclusion of the residuary legatees.

It will be observed that in both of the English cases we have referred to the testator, by his codicil, showed that he contemplated and provided for the contingency of a deficit in the estate. In the one case this provision was held to alter the rule which would have applied had the provision for a deficit not been made, and to give effect to the will as if it had given the reduced sums specifically to the general legatees. . In the Lyne case, however, the codicil providing for the case of a deficit was apparently held to merely emphasize the general rule. The court there said: “In this case the language of the testator that the sum of £1,000 and all securities for the same, shall fall into and become part of his residuary estate, would be plain enough if there* had been any residue; but, there being none, it is not so plain. The words of the codicil simply amount to this: That if the estate should be deficient, there should be perfect equality amongst all the pecuniary legatees. He contemplated the exclusion of the residuary legatees altogether where he said, in case his moneys or securities for them at the time of his decease should be insufficient for the payment of the legacies, they should abate proportionately. The testator has excluded the residuary legatees from taking anything until there should be a residue, and. there being no residue until the legacies have been paid in full, this fund belongs to those whose legacies have been abated. Upon the whole, I think thalt this fund must go amongst the legatees proportionately.” While apparently in conflict, both cases seem to support the contention of appellee in the case now being considered. Nor are 'we able to see such distinction between the setting apart of a fund with a gift of the income thereof for life and the gift of an annuity with a provision for isetting apart and investing a fund sufficient to produce it as should make any difference in the rule of construction to be applied.

In re Tootal’s Estate, 2 Ch. Div., 628, the testatrix gave ■several life annuities, and directed the trustees to “set apart in their names sufficient funds to answer the said respective annuities.” She gave the residue of her estate, “including the funds set apart to answer the said annuities” (with one exception), “when and so soon as such annuities shall respectively cease,” to her brother, his heirs, etc, absolutely. The estate was insufficient. The sum set apart to raise M. R. Tootal’s annuity of £50 per annum was only £218. 3s. 2d. He died six years after the testatrix, with arrears unpaid on his annuity exceeding the amount set! apart ■to secure it. The residuary legatee claimed the principal fund as residuary, and M. R. Tootal’s personal representative claimed that it should be applied to pay the unpaid arrears of the annuity. Vice Chancellor Bacon held the residuary legatee was entitled to the fund, as it was a specific gift of the fund set apart to answer1 the annuity, saying that “a gift is not less- specific because it is mixed up in the residue.” On appeal, his judgment was reversed, and it was held that the principal must be applied to pay the arrears. It will be observed that in the opinion of James, L. J., no distinction in principle is recognized between a claim for arrears of an annuity and a claim of a general legatee, as against a residuary legatee, though a difference in priority may exist between the claim for arrears and the general legacy. Said the court: “A pecuniary legatee or an annuitant must be paid in preference to the residuary legatee, who can take nothing till all the legatees and annuitants have been paid in full. It is true that a gift may be so worded as to make the annuitant tenant for life of a fund, the corpus being given over on his decease; but it is impossible to put such a construction on a gift of the residue, ‘including the fund set apart to answer the annuity/ To say that what is included in the residue! is something else than residue is contradicting the plain terms of the will. The residuary legatee is entitled to nothing till the annuitants have been paid in full.” In the opinion of Hellish, L. J., it was said: “The only question is whether, on the death of the annuitant, the funds set apart for’ securing their annuities fall into the residue, or are given to the ■residuary legatee as pecuniary legacies. The testatrix says plainly that they are included in the residue.” In principle this case seems plainly to support appellees’ contention. In Arnold v. Arnold, 2 Mylne & K., 365, testator provided that three legatees should each enjoy during life the interest of £800, the principal to devolve eventually to his residuary legatees; 'by another clause, the whole of his remaining property to be divided into three equal parts, to three named persons. The estate was insufficient, the £800 life estates were proportionately abated, one of the life tenants died, and it was heldi that the surviving annuitants were entitled to have the deficiencies in their annuities satisfied out of the released fund, and that, subject thereto, that fund fell into the residue. The 'court said: “The words used by the testator in the disposition ofl the capital sums, viz., ‘the principal to devolve eventually to my residuary legatees,’ are not expressions likely to be used by any one who meant to give a legacy to any particular person. The word ‘devolve’ especially is an apt expression, if he meant that the capital should fall into the residue; but it is a term not properly applicable to a gift to x>articular legatees. . . . The inference is, therefore, that he intended this sum of £800 to become part of his residuary estate, and that the same persons, whoever they might be, who took the residue, should take this sum as part of his general, estate.”

After a careful consideration of all the authorities, we are satisfied that the proper construction of the language used in the will under consideration is that the trust funds were to become a part of the residuary, and to go under the twenty-sixth clause of the will to the three legatees therein named, and under that clause those legatees can take nothing until the general pecuniary legacies are first ■paid in full. This we think undoubtedly the general rule, and there is no such manifest contrary intention expressed by the testatrix as to prevent its application.

The judgment is affirmed.

Whole.court sitting.

Case Details

Case Name: Louisville Presbyterian Theological Seminary v. Fidelity Trust & Safety Vault Co.

Court Name: Court of Appeals of Kentucky

Date Published: May 16, 1902

Citation: 113 Ky. 336

Court Abbreviation: Ky. Ct. App.