151 N.Y.S. 12 | N.Y. App. Div. | 1914
Lead Opinion
The sole question of law presented by this appeal is as to the validity in whole or part of the attempted disposition in the will of Harry Dillon Bipley of the fund which he had assigned in trust to the Knickerbocker Trust Company and Sidney Dillon Bipley, as trustees, and which is now held by the. Guaranty Trust Company, as trustee. The' facts have been so fully and clearly stated by Mr. Justice Laughlin that it will be unnecessary to recapitulate them, and we can accordingly proceed at once to the consideration of the will in controversy. We pass, without deciding, the question whether or not the decree in the Surrogate’s Court referred to by Mr. Justice Laughlin is res adjudicata so; far as concerns the question here, since we are not agreed on that point, and proceed to consider the validity of the will de novo.
The objection urged against the will is that, so far as it relates to the fund involved in this proceeding, it undertakes to suspend the absolute ownership of the personal property, of which the trust fund consists, for more than two lives in being at the date of the instrument containing the limitation in violation of what is commonly known as the statute against perpetuities. (See Pers. Prop. Law [Consol. Laws, chap. 41; Laws of 1909, chap. 45], § 11.)
It is perfectly well settled that, with regard to personal property as well as with regard to real estate, the validity of. the provisions of a. will executing a power of appointment contained in an earlier instrument must be tested by reading the provisions of the will into the instrument which created the power. (Fargo v. Squiers, 154 N. Y. 250, 259.) So, reading the deed of trust and the will conjointly, it is apparent that one of the lives mentioned in the statute was that of Harry
The rule to be followed in such a case is thus declared in Kalish v. Kalish (166 N. Y. 368): “This necessity [of deciding whether as to certain wills the void provisions may be excised] has led to the rule which is now firmly established in this State, that when the several parts of a will are so intermingled or interdependent that the bad cannot be separated from the good, the will must fail altogether; but when it is possible to cut- out the invalid provisions, so as 'to leave intact the parts that are valid, and to preserve the general plan of the testator, such a construction will be adopted as will prevent intestacy, either partial or total, as the case may be.” (See, also, Davis v. MacMahon, 161 App. Div. 458, 464, and cases cited.)
When the testator made his will he had one child, the appellant here, then an infant of tender years, and, as the event proved, his only surviving child. The general scheme of the residuary (9th) clause of the will was that the property should be held by the executors as trustees during the lifetime of the widow, with the proviso that one-half of it should be paid over
We think it quite clear that this created but a single trust term, limited upon the life of the widow, subject to terminate as to one-half of the fund when the child arrived at the age of thirty years, and terminating as to the whole fund on the death of the widow. That this is the true construction of the will is indicated, as we think, by the 11th subdivision of the 9th clause, wherein the testator attempts to dispose of the remainder after the death of his widow. That subdivision reads as follows: “ (11) Upon the death of my said Wife then to hold the remaining moiety of my said estate upon trust for all or any [of] my children or child who being sons attain the age of twenty-one years or being a daughter or daughters attain that age or marry if more than one in equal shares but subject to the trusts and powers hereinafter declared concerning the same. ”
This provision is clearly invalid, but it serves to illuminate and emphasize the intention of the testator that the first gift to his trustees was to last for the lifetime of his widow and be limited thereby.
There are in effect two separate and successive gifts to the trustees. - The first expires on the death of the widow. The second was intended to go into effect at her death. If this be the proper construction of the will, it is of no consequence that the whole income is not to be paid to the wife during the full term of the trust. The validity of the will depends upon the hmitations of the trust estate, and not upon the manner in which the income is disposed of. “A testator may suspend the absolute power of alienation for a period of two selected lives in being at the creation of the estate, and during that time he
The above quotation exactly fits the case at bar. Here the testator has. created a trust term limited upon the life of his wife, and which must end at her death, because upon the happening of that contingency a new trust estate was provided for in the 11th subdivision of the 9 th clause of the will. Within the term of the first trust, differing dispositions are made of the income, depending upon the age of the son. The circumstance that when the son reaches thirty years of age a portion of the fund is to be withdrawn from the trust and paid over to him does not affect the validity of the trust. All that is invalid in the 9th clause is the 11th subdivision, undertaking to create a new trust in the remainder after the death of the wife. The only effect of deleting this provision will be that the remainder will be undisposed of and pass as if no such provision had been attempted to be made. It is true that the absolute vesting of the estate in the- son may be accelerated if the widow should die before he attains the age of thirty years, and to this extent the intention of the testator may be defeated, but it will be much more decisively defeated if the whole 9th clause be declared invalid and the testator held to have died wholly intestate. In Kalish v. Kalish (supra) the Court of Appeals, after an exhaustive review of the authorities in this country and England, approved a construction of a will which lifted bodily out of it an invalid trust provision, leaving the antecedent and subsequent provisions standing, although the effect was to accelerate the ultimate vesting of the estate.
We are, therefore, of the opinion that the trust provision for the life of Mrs. Ripley was and is valid and should be upheld, notwithstanding the obvious invalidity of the provision for the disposition of the remainder after her death.
It follows that the judgment appealed from must be affirmed,
Ingraham, P. J., and McLaughlin, J., concurred; Laughlin and. Dowling, JJ., dissented.
Dissenting Opinion
This is a suit' in equity by the executrix and executor of Harry Dillon Eipley to compel defendant Guaranty Trust Company to account to them for property held in trust under a deed of trust made by their testator on the 27th day of April, 1899. The testator, after making the deed of trust, and on the thirtieth day of November the same year, married the defendant Alice Louisa Eipley and the appellant was born as the issue of the marriage on the 23d day of October, 1908. The testator died on the 8th day of February, 1913, leaving a last will and testament, executed on the 9th day of November, 1909, which was duly aclmitted to probate in the county of New York on the 5th day of May, 1913. The testatbr by the deed of trust conveyed certain property to the trustees in trust to pay in their discretion out of the principal or income his debts and taxes and all other charges, including the compensation of the trustees, and to apply the surplus income to his use during his life, and upon his death to convey the corpus as it should then exist, together with any unexpended income, to such person or persons as he should by his last will- and testament, or by any instrument in the nature thereof, direct and appoint, and in default of such direction or appointment, “or in so far as such direction or appointment, if made by him, may not extend or be effectual, then to such person or persons as would be entitled to take the same according to the now existing Laws of the State of New York, if he should die possessed of the same and intestate, and the same. were all personal property, in such shares or proportions as they would be entitled to take. 7
The claim of the plaintiffs is that by his will he appointed the remainder of the trust property to them as his executrix and executor , and trustees to administer as part of his estate and in trust as therein provided; and they also claim that a decree of the Surrogate’s Court made in another proceeding relating to another trust, but to which the appellant and his
The appellant, .by his answer, as amended on the reference, claims that the attempted execution of the power of appointment was void and ineffectual for any purpose, and that the trustee should account to him for two-thirds and to his mother for one-third of the property. One of the original trustees died and the other resigned. The Morton Trust Company was thereupon duly appointed trustee by the testator, pursuant to a reservation in the deed of trust, and it was merged into the defendant trust company on the 3d day of January, 1910.
The decree of the Surrogate’s Court, which the plaintiffs claim and the referee found, was res adjudicata with respect to the construction of the testator’s will, was made on an application by the Bankers Trust Company, as substituted trustee under the will of Sidney Dillon, the testator’s grandfather, who died on the 10th day of June, 1892, and whose will was duly admitted to probate in the county of New Tork on the seventh day of July of that year. By that will the testator was given the life use of a particular share of the estate of his grandfather, and the corpus of that trust fund was given to the issue, if any, of the testator him surviving, unless otherwise appointed by his last will and testament. After the death of Sidney Dillon the Bankers Trust Company, applied to the Surrogate’s Court for the judicial settlement of its accounts with respect, among other things, to the fund, the life use of which was given to the testator, and for its discharge. All parties in interest were duly cited, and the decree was made on the 21st day of November, 1913. On that accounting the same points with respect to the validity of the exercise of the power of appointment as are now made by the appellant were presented by the trustee; but the guardian of the appellant joined in the claim of the plaintiffs, which was "then the same as now, and recommended that the exercise of
We are of opinion that the decree of the Surrogate’s Court construing the will of the testator with respect to his exercise of the power of appointment given hy the will of his grandfather is not res adjudicaba with respect to the construction of the provisions of the will of the testator by which he attempted to appoint the trust fund now in question in precisely the same manner and by the same clause of his will as he appointed the fund left in trust by his grandfather. That decree should be regarded in the Surrogate’s Court as store decisis with respect to the construction of the will of the testator; hut it could have no other" effect on the trust now in question, for manifestly the Surrogate’s Court -had no authority to adjudicate in that proceeding with respect to this trust fund, and, as already indicated, the true construction is not necessarily the same in each case, for here the wife would take one-third if the power of appointment has not been effectually exercised, while in the Other instance she would in such event take nothing. It becomes necessary, therefore, to construe the will of the testator in so far as he thereby attempted to exercise the power of appointment reserved to himself hy the trust deed, and in so doing ■ we express no opinion with respect to the effect of section 34 of the Personal Property Law (Consol. Laws, chap. 41; Laws of 1909, chap. "45) upon the deed of trust, for no creditor or representative of a creditor of the settlor of the trust is here attempting to impeach 'it in whole or in part. The claims of both the plaintiffs and the appellant are made upon the assumption that the deed of trust was valid in its entirety; and we do not, by failing, to express an opinion thereon, intend to question the validity of the deed of trust.
At the time the will was made the testator had personal property, aside from the property involved in the trust fund created by him and in the trust created by his grandfather in
By the 1st clause of his will the testator directed the payment of his debts and funeral expenses. By the 2d clause he bequeathed to his wife the sum of $100,000. By the 3d clause he devised real estate owned by him in England to his wife for life, and upon her death provided that it should become part of his residuary estate. By the 4th clause he bequeathed a leasehold estate in England to his wife. By the 5th clause he bequeathed his jewelry and personal ornaments to his son, and in the event of his death before attaining the age of twenty-one years, to his wife; and devised and bequeathed to his wife his wearing apparel and certain household furniture and effects, including carriages and horses and stable and garage. By the 6th clause he bequeathed certain other furniture and household furnishings and contents to his trustees for the use of his wife, the same to go into his residuary estate after her death. By the 7th clause he made certain
“(1) To hold invest and reinvest the same with full power to sell any property or securities or change the form of any investment and to invest and reinvest the principal or proceeds in their discretion in properties and securities as hereinafter directed.
“ (2) To pay the rents issues profits interest dividends and other income (all' which premises are hereinafter referred to as the said income) of the said trust estate to my said Wife Alice Louisa Ripley during her life but subject as regards one moiety of the said income to the provisions hereinafter contained in favor of my children and issue.”
The further provisions of the 9th article of the will, so far as material to the question presented for decision, give his child or children, on and after attaining the age of twenty-one years, “ one-fourth part of the said income,” and on and after attaining the age of twenty-five years another, one-fourth part of the said income for life, and further provided", that on any child attaining the age of thirty years he and the issue of any deceased child, per stirpes, shall take in equal shares .one-half the corpus of the residuary estate; and that on the death of the wife the trustees were to hold the other one-half of the
In deciding whether the will violates the statute against perpetuities by suspending the absolute ownership “ for a longer period than during the continuance and until the termination of not more than two lives in being at the date of the instrument containing such limitation or condition; or, if such instrument be a last will and testament, for not more than two lives in being at the death of the testator ” (Pers. Prop. Law, § 11), the will must be read into the deed of trust which created the power of appointment. (Fargo v. Squiers, 154 N. Y. 250; Genet v. Hunt, 113 id. 158.) One of the lives to be considered is that of the testator. It is manifest, therefore, that it was not competent for him, by the exercise of the power of appointment by will, to create a trust for a longer period than one life after his death, for it was not competent for him to suspend the power of alienation of the corpus for a longer period than one other life in being at the date of the deed of trust. It was, however, competent for him to create a trust for the life of his wife, who was in being at that time, and if he had limited the trust to the period of her life it would have been competent for him to have provided for the division of the
These views probably render it unnecessary to consider the contention that the personal representatives of the testator take the fund for the purposes of administration, -and that the remainder only after the payment of debts, legacies and annuities, is subject to the trusts attempted to be created. It appears that the property left by the testator, together with that received by the plaintiffs from the other trusts, is far more than sufficient to pay the debts, legacies and annuities, and, therefore, the plaintiffs do not show or even claim that it is' necessary to have the fund paid over to them for those purposes, even if they would be entitled to recover it if necessary for the purposes of administration. Moreover, it is quite plain, I think, that the testator only intended to give this fund to his executor and executrix and trustees for the purposes of the trusts. The will is unlike that in Fargo v. Squiers (supra) wherein by the opening clause the testatrix manifested an intention to dispose of both her own property and that over which she had a power of appointment. Here there is no attempt to dispose of this fund, excepting in the 9th article of the will, which follows the provisions with respect to debts, legacies and annuities; and the case, therefore, falls within the rule stated in Farmers’ Loan & Trust Company v. Kip (192 N. Y. 266), that the testator’s personal estate, not otherwise disposed of or exempted by his will, “ constitutes the natural and primary fund for the payment of legacies as well as of debts,” which “ is controlling unless the will, either in express terms or by. necessary implication, discloses a different intention on the part of the testator.” It is unnecessary to consider whether this trust fund is covered by the 8th article of the will, by which the testator charges his property in the United States
As already stated, the plaintiffs by their complaint predicate their right to recover on the will and argue in support of the trust for the wife.- Their counsel, however, toward the end-of his brief, seems to take the inconsistent position that the deed of trust in so far as it purports to dispose of the remainder, either by the exercise of a power of appointment or without-, was void, and that the title remained in the testator until his death and then passed to the plaintiffs. I am of opinion that the deed of trust was valid in toto. It is not necessary to decide whether the testator could have revoked it, for he made no attempt to do so, and upon his death the appellant and his mother on the failure of the testator effectually to exercise the power of appointment, took a vested remainder in possession. (Genet v. Hunt, supra; Crackanthorpe v. Sickles, 156 App. Div. 753; Newton v. Hunt, 134 id. 325. gee, also, Whittemore v. Equitable Trust Co., 162 App. Div. 607.)
It follows that the interlocutory judgment should be reversed, with costs to all parties payable out of the fund, and final judgment should be entered requiring the trust company to account to the appellant and to his mother under the deed of trust.
Dowling, J., concurred.
Judgment affirmed, with costs to plaintiffs and guardian ad litem payable out of the estate.