45 N.Y.S. 333 | N.Y. Sup. Ct. | 1897
The fourth clause of the second codicil of the will of Daniel Devlin, deceased, gave two-sixths of his estate in trust to his brothers Jeremiah and William, to invest the same as provided
The trustees paid the said Jeremiah Crolly, James Crolly, Benedict Devlin and Foster J. Devlin a portion of the income "of the two-sixths of the estate of Daniel Devlin, under the fourth paragraph of the second codicil. . Another portion they paid into the body of the estate of Daniel Devlin.
I am of the opinion that it was the duty of the trustees to pay such portion of said income as remained after the payment to said Jeremiah Crolly, James Crolly, Benedict Devlin and Foster J. Devlin into the body of the estate; that the words “ as they may see fit ” gave no discretion to them to. withhold the undisposed of income from the body of the estate, but they mean such part of the estate as the trustees had not disposed of for the use of the persons named in said fourth clause should be paid into the body of the estate. bTow, if it went into the body of the estate it went into the hands of the executor, and as to it the testator died intestate. But if I am wrong in this opinion it makes no difference in the result. There is no express provision in said fourth clause that said undisposed of portion of the income should be added to the fund mentioned in said fourth clause, and no such provision will be implied, because to do so would make the clause obnoxious to that provision of the Revised Statutes relating to the accumulation of income of personal property, and the undisposed of accumulated income would belong to the person presumptively entitled to the next eventual estate. Kilpatrick v. Johnson, 15 N. Y. 322.
That is, those persons mentioned in said fourth clause as beneficiaries were to entitled to whatever the trustees gave them; the rest of the income of that portion 'of the estate remained undisposed of and, under 1 Revised Statutes, 726, section 40, went to those persons who were entitled to the next eventual estate. Those persons were, on the 1st day of December, 1878, up to which time all of said income had been duly distributed, Mary Josephine Meldon and Jeremiah Doherty, each of whom was entitled to one-eighth
On the death of William Devlin on the 27th day of July, 1892, his executor became entitled to that portion of said income due said William Devlin which hadnot been paid, and his children became entitled to the one-fourth income of said trust fund thereafter accruing; and on the death- of Jeremiah Devlin on the 11th of August, 1893, his executor and executrix became entitled to that portion of said income remaining unpaid which was due the said Jeremiah Devlin, and his children became entitled to the incomó thereafter accruing on said.one-fourth of said estate.
It is true that the power to dispose of the income of the trust estate ended upon the death of William Devlin, but this fact does not affect the result,. because there is no provision in' the will or codicils disposing of said income after the death of William Devlin, and under the provisions of the Revised Statutes above referred to, such income would go to the persons to whom I have given it, viz., the persons presumptively entitled to the next eventual estate.-
That the persons presumptively entitled to the next eventual estate are not necessarily those who, in fact, afterwards get that estate is shown by the case of Schettler v. Smith, 41 N. Y. 328. In that case the testator gave one-fourth of his residuary estate to-his executors in trust to receive the income and pay therefrom $800 per year to testator’s daughter Cornelia until her. marriage, and upon" her marriage with any person other than Schettler, or upon his decease, to pay her all the income arising from the death of the testator, but in case the daughter married Schettler, all her interest in.the estate was to cease during the coverture, and the same was given to other children of the testator. , The daughter received the $800 a year for some time, and then married Schettler. She died, leaving him surviving, and leaving one child by him. Schettler administered upon her estate, and brought the action,. as her administrator; to recover the balance of the income accrued up to the time of her marriage with him. It was held that he was-entitled to this accumulation; that until her marriage with Schettler she was presumptively entitled to the next eventual estate, and that under the statute the income belonged to her, even though by marriage she had lost the next estate. See also Delafield v. Shipman, 103 N. Y. 469; Embury v. Sheldon, 68 id. 237; Gilman v. Reddington, 24 id. 19; Gould v. Rutherford, 79 Hun, 280.
The said fourth clause of the codicil also gave the said trustees and the survivor of them the power at any time to pay over, in their discretion, any part of the principal of the trust estate mentioned in said fourth clause to certain persons named therein. The said Jeremiah Devlin, one of the trustees, after the death of William Devlin, another of such trustees, sought to avail himself of this provision of said fourth clause by giving certain portions of said trust estate to one Jeremiah CX. McAndrew. This power related only to the principal, and did not relate to any interest due on the principal or any portion thereof. Whether it was exercised in good faith or not is immaterial to the plaintiff as far as the principal is concerned, because of the exercise of the power of appointment above referred to. The will of Daniel Devlin directed his trustees to invest the trust estate mentioned in said fourth clause of the second codicil in public stocks of the United States or of the state of New York, and not otherwise. ■ Such investment was not made, but said portion of said estate was invested in part in certain bonds and mortgages which were turned over by said Jeremiah Devlin to said Jeremiah C. McAndrew. Some of these mortgages covered property belonging to said Jeremiah Devlin, and others property belonging to his wife. Such investments were a fraud upon the trust estate, and any loss that arises from them should
This provision, however, cannot and does not affect any portion of said property that was sold to a bona fide purchaser for value after the satisfaction of the mortgages by McAndrew and before the filing of the lis pendens herein. It affects the property of the wife of Jeremiah Devlin, except as above stated, because she paid no consideration for such satisfaction'. But any portion- of the estate of Daniel Devlin, deceased, to which Jeremiah Devlin was entitled at the time of his death should first be applied for the payment of the claims of the persons entitled to payment. If anything is left after such payment it belongs to the estate of Jeremiah Devlin.
The evidence shows that Bridget Devlin, as executrix of the 'estate Of Daniel Devlin, deceased, has in her possession a certain sum of money for which she is willing to account. She should account for it, and it should be distributed in accordance with this opinion. The evidence shows that at various times between the 19th day of December,’1818, and the lYthday of April, 1888, inclusive, various sums of money, amounting in the aggregate to $101,000, were paid by the trustees back into the body of the. estate. This sum should have been divided among the persons entitled thereto. The plaintiff, as assignee of Jeremiah Doherty, is entitled to otie-eighth thereof, and is entitled to recover said one-eighth, less the amounts which have been paid to said Doherty. He is also entitled to interest, but interest should not begin until one year from the date when
Judgment is ordered for said Eelix, as aforesaid, with costs of this action; which said costs are to be deducted from the amount owing by him on the purchase of the property referred to in his answer.
I am of the opinion that the estate of William Devlin, deceased, is not responsible for the acts of Jeremiah Devlin, deceased. The evidence shows that the trust was managed alone by Jeremiah Devlin (Nanzv. Oakley, 120 N.Y. 89); but the evidence also shows that certain of the mortgages held by the trustees of Daniel Devlin, deceased, were assigned by Jeremiah Devlin, as surviving trustee of Daniel Devlin, deceased, to Jeremiah Devlin, as executor of William Devlin, deceased. - I have held that the disposition of a certain portion of the trust estate made by Jeremiah Devlin to Jeremiah 0. Me-Andrew was not a valid exercise of the power given by the will of Daniel Devlin. If this be so, McAndrew, who was acting in collusion with said Jeremiah Devlin, never acquired, a valid title to the property turned over to. him, and could only give title to a bona ficle purchaser for value "without knowledge of the facts. Now, Jeremiah Devlin, executor of Daniel Devlin, was not such a bona fide purchaser, and the estate of William Devlin should account for the property thus turned over to it by Jeremiah Devlin as trustee of Daniel Devlin; but this should only be done in case the estate of Jeremiah Devlin is not sufficient to pay the amounts that may be hereafter found due herein.
A referee will be appointed to ascertain the amounts due as aforesaid. The costs to be in abeyance until the coming in of the referee’s report.
' Ordered accordingly.