77 N.Y.S. 687 | N.Y. App. Div. | 1902
Lead Opinion
I concur in the views expressed by the learned judge at Special Term
The allowance of eight per cent to Harriet A. Hume (Whitmore)
I am of the opinion that it appears from this will that it was the intention of the testator that Harriet A. Hume (Whitmore) should receive only net income to be derived from a fund to be invested by a trustee, which fund was to be constituted out of the general estate of the testator after administration, and that this case is distinguishable from those upon which the respondent Harriet A.
As so modified the judgment should be affirmed, without costs.
O’Brien, Ingraham and Hatch, JJ., concurred ; McLaughlin,, J., dissented.
The following is the opinion of Scott, J., delivered at Special Term:
Scott, J.:
Charles L. R. Hutchinson died on September 28, 1890, leaving a will and two-codicils, which have been duly admitted to probate. Administrators with the will annexed were appointed, who so far administered his estate as to pay all his. debts and dispose of all his estate, except a certain contract or claim against parties residing in France for the sum of 629,200 francs. Thereupon an order was made by the surrogate, upon consent of all parties in interest, directing said administrators to assign such contract or claim to the defendant, the Continental Trust Company, in trust to hold the same and to pay over to the defendant. Henry Southgate, trustee for Harriet A. Whitmore, whatever may be received or collected thereon, either principal or interest, until the full amount of the-trust fund directed to be paid to him by the terms of said will, as such amount may hereafter be determined, shall have been received by him, and then to assign said debt or whatever balance may remain unpaid thereon to the persons entitled thereto under the said will of O. L. R. Hutchinson, deceased. The administrators having made the assignment thus directed were duly discharged. The-' first question which presents itself is as to how much is to be paid to Henry Southgate as trustee for Harriet A. Whitmore. The testator’s will, which was. dated December 10, 1884, gave all his estate in trust to his brother, Alcander Hutchinson, who was appointed sole executor. It provided that there should be set apart three separate funds, each capable of producing at the time of such separation an annual income of §500, which was to be paid, respectively, for
“ Fist. If my friend Harriet A. Hume shall be living at my decease, I give and '¡bequeath to my nephew Henry Southgate the sum of Twenty thousand dollars "in trust, to invest and reinvest the same, collect the income thereof, and to pay the net annual income in equal quarterly payments to her, the said Harriet A. Hume, during her life; * * * and I further direct that said sum of Twenty thousand dollars be taken to be held by the said Henry Southgate,- as ¡aforesaid, out of my estate- before and' in preference to any division or distribution thereof in my said will directed.
“ Second. And upon the death of the said Harriet A. Hume after my decease, ¡said trust in respect to said sum of Twenty thousand dollars shall cease and -determine; and I do hereby direct and declare that said sum of Twenty -•thousand dollars shall thereupon be and become a part of the rest and residue •of .my estate, and be disposed of as in my will and this codicil directed in' respect to. such residue.” The 8d clause of the codicil revoked the provision made in the will for the benefit of the person named Eugenie, whose last-name- is not given. Two months later, on November 19, 1887, the testator exe-' •outed another codicil, by which he ratifies and confirms his will, except' as •changed, modified or qualified by said codicil, but makes no reference to the former codicil executed by him. The 1st clause and part of the 2d clause of this codicil is in precisely the same language as the 1st and 2d clauses of the •earlier one, except that in place of the sum of §20,000 there is written the sum of $50,000. The 2d -clause, which provides that upon the death of Harriet A. Hume the sum held in trust for her shall fall into the residuary estate, also contains in the second codicil the following proviso: * ‘ Provided, however, that should there be a child of the said Harriet A. Hume born after my decease of which I am or may be the father or reputative father, and which by reason of my'rela-' tians with her existing at the time of my decease would by legal implications •be a posthumous child of mine, although' illegitimate, it is my will and I hereby direct that in lieu of my said Trustee, Henry Southgate, turning over said fund'' •of Fifty thousand dollars as above provided upon the death of the said Harriet' A. Hume, that then and in that case he do further retain, have and hold said ¡gum of Fifty thousand dollars during the minority of such posthumous child
The next question to be considered is as to the amount of interest which should be credited to the trustee for Harriet A. Whitmore upon the amounts bequeathed to him. At the time of the testator’s death, the bulk of his estate, and indeed all that now remains of it, was loaned to the firm of A. Hutchinson & Co., of Paris, France, under a contract between the testator and the children of his deceased brother. This is the same contract which is now.held by the defendant trust company. By its terms the loan was to bear and pay interest at the rate of eight per cent per annum, and it is only by enforcing prepayment of this loan that anything has been or can hereafter be paid to the trustee for Harriet A. Whitmore. It seems to be clear under the authorities in this State that such trustee was entitled not only to receive interest upon ihe funds bequeathed to him in trust from the date of the testator’s death, but to receive that interest at the rate upon which the funds were invested when the testator died. (Matter of Stanfield, 135 N. Y. 292; Matter of Baker, 57 App. Div. 44; Matter of Slocum, 60 id. 441.) The last case is very similar in its facts, so far as concerns the rate of interest to be received. The estate of the decedent consisted chiefly of moneys invested in a business, from which it was drawing interest at the time of his death at a certain rate. He gave his estate to his executor in trust to convert it into money and invest it in certain specified securities, and directed that the income of his estate should be paid to certain persons during their lives. It Was held that the life beneficiaries were entitled to all the income accruing from the date of the testator’s death, including as well the interest received from the business in which it was invested at the time of the decedent’s death as that derived from the specified securities after the estate had been converted into money and invested as directed by the will. It appears that Mrs. Whitmore has already received direct on account of this contract the sum of $9,301. Henry Southgate, her trustee, has received at various times from the estate §48,420.47. For the purpose of ascertaining the amount still due from the estate it will be convenient to treat all the payments, whether made direct to the cestui que trust
The next question presented by the pleadings is raised by the administratrix with the will annexed of Hiram Hutchinson, who claims to be entitled to receive-the income on one-third of the residuary estate from the date of -testator’s death to November 1, 1896, the date of the death of said Hiram Hutchinson. After-providing for the annuities to Hiram H. Southgate, Leah Knapp and Eugenie-(the latter having been afterwards revoked) the testator gave the residue of his-, estate to his executor in trust, and directed him “to divide into three equal parts, shares or portions,” and as to one of said portions to further hold it for the* life of Hiram Hutchinson, paying the income to him. The administrator with the will annexed of the testator never did, in fact, divide anything into share» or portions under this clause, because nothing ever came into his hands, except funds which he was required to pay out for debts or for charges upon the estate* which took precedence Of the residuary bequest; consequently Hiram Hutchinson never received any income under this clause of the will. The testator seems to have regarded the division of the residue of his estate into three* separate funds as something which could not take effect at once upon his death,
The last question to be determined relates to the liability of the children of Alcander Hutchinson for the indebtedness which now constitutes the sole .remaining asset of the estate. After the establishment of the trust fund for
A decision and decree in accordance with the foregoing opinion may be settled upon three days’ notice.
Dissenting Opinion
(dissenting):
I concur in the opinion of Mr. Justice Patterson except as to the rate of interest to which Harriet A. Hume (Whitmore) is entitled, and as to that I dissent. I think she is entitled to eight per cent,,, and that the learned justice at Special Term did not err in so holding.
By the codicils it will be observed that the $70,,000 given to Henry Southgate as trustee, “ to invest and reinvest the same, collect the income thereof and to pay the net annual income in equal quarterly payments” to Harriet A. Hume (Whitmore), was tobe, paid out of the testator’s estate “ before and in preference to any) division or distribution thereof in my said will directed.'’ Under this provision, after the payment of debts and expenses of administration, the trustee was entitled to receive from,the executor $70,000 in order that the trusts might be set up, and the executor was bound by the express provisions of the will to pay over to the trustee the first moneys that came into his hands, so that the intent of the testator in this respect might be carried out. When the testator died,, substantially his entire estate — indeed all of it that now remains — as well as that theretofore paid to Harriet A. Hume or her trustee,, was loaned to the firm of A. Hutchinson & Co.,- of Paris, and under an agreement entered into between the testator and the widow and children of Alcander, this loan drew interest at the rate of eight per cent per annum. More than enough of this loan has been paid, to set up, both trusts, together with the interest thereon at the raie of eight per cent to the time of payment.
It seems to me that a slight consideration of the two codicils,.
Matter of Stanfield (135 N. Y. 292) seems to me to be directly in point. There, the testator directed his executors to invest $20,000 in bonds and mortgages or government bonds and pay over the income therefrom to his son for life, and at his death the principal to another. It appeared that the corpus of the estate was so invested at the time of the testator’s death as to produce six per cent interest. The investment directed to be made for the son not having been made, proceedings were taken by the son, in Surrogate’s Court, to compel the executor to pay to him the interest received on the $20,000 and in affirming the order directing the executor to pay a certain sum, the court said : “ Where the income of an estate or of a designated portion, is given to a legatee for life, we think it is clear that he becomes entitled to it whenever it accrues and if the estate is productive of income from the death of the testator, he can require the executor to account to him for the
Matter of Slocum (60 App. Div. 438; affd. as to this point, 169 N. Y. 153) is also in point. There the property of the testator was invested, and at the time of his death was drawing seven per cent interest. By his will he directed that his property be converted into money, invested in bonds and mortgages on, improved farming lands, and that one-third of the income derived therefrom be paid to his son during his life, and two-tliirds of such income be paid to his wife during her life. The court held that the life beneficiaries
Applying the principle laid down in these authorities, if effect is to be given to the testator’s intent, then it seems to me that the Special Term correctly held that the trustee is entitled not only to receive interest upon the fund bequeathed to him in trust from the date of the testator’s death, but to receive interest at the rate at which the funds were invested (eight per cent) when the testator died, until the same had been paid.
I think the judgment should be affirmed.
Judgment modified as directed in the opinion, and as modified affirmed, without costs.