Vail v. Vail

| New York Court of Chancery | Jan 28, 1834

The Chancellor.

The principal, if not the only question in this case, is as to the disposition of the rents and profits of the real estate of the testator, and the interest or income of the general residue of the personalty, which may accrue before the time appointed for the distribution or apportionment of the residuary estate among the children. So far as the income of the real estate is concerned, the case admits of very little doubt. For it is a general rule of law, that so much of the real estate of a testator as is not legally and sufficiently devised to some other person, either in express terms or by necessary implication, descends to the heirs at law. The will in the present case does not devise the real estate to the executors in terms; although it authorizes them to sell the estate, at a future time, for the purpose of distributing the proceeds of such sale among the testator’s children. This of itself is a mere devise of a power in trust; and the legal estate descends to the heirs at law until it is divested by the execution of the power. There is, however, a devise of the rents and profits to the executors, by implication, during the minority of the children, or while they remain unmarried. By the sixth clause of the will, the testator orders and directs his executors, from the income of his estate either real or personal, to pay and appropriate such sums as may be necessary for the respectable support and education of his minor children, until they shall severally attain the age of twenty-one years, or shall marry; and that on the happening of either of those events, this provision shall cease. Under this provision of the will, the executors are authorized, in their discretion, to support the minor children out of the rents and profits of the real estate, if they should think proper so to do. And this being a valid trust, the executors, by implication, take an interest in the land, to enable them to receive and apply the rents and profits for the purposes of the trust. (Courthope v. Heyman, Carter’s Rep. 25. Stile v. Tomson, 2 Dyer's Rep. 210.) But although the executors take the legal estate in the land, for a term of years which will end when the youngest child arrives at the age of twenty-one, or marries, there is a resulting trust in favor of the heirs at law of the testator, for the surplus rents and profits, which may accrue during the term, beyond what shall be actually applied for the support and education of the minors. One sixth part of such surplus, therefore, belongs to each of the children as a vested interest, and must be paid to them or their personal representatives, by the executors, at or before the termination of that particular trust. After the youngest child is of age, or married, the children will be entitled to the rents and profits of the real estate, as tenants in common. And from that time they will also have the legal interest in such real estate, during the life of the mother, and until the youngest child arrives at the age of twenty-five years ; at which time the power in trust is to be executed by a sale of the estate.

The questions as to the income of the personal estate, over and above what may be necessary for the support and education of the infant children, would have been equally easy of solution were it not for the provisions of the revised statutes which prohibit the accumulation of the rents and profits of real estate, or the interest or income of personal property, except for the benefit of infants, and during their minorities only. (1 R. S. 726, 773.) Two questions arise, under the statute, in this case. The first is, whether the interest or income of the residuary estate was intended by the testator to accumulate until the time appointed for the division or apportionment of the fund among the children, or their representatives, after the death of the widow; so as to bring it within the prohibition of the statute. And the second, which is still more difficult and equally important in the present case, is, who are entitled to this interest and income, if there is a trust of accumulation which is rendered void by the statute. The first of these questions has been fully argued, by the counsel for the complainants and for the executors, and their written briefs are before me. I regret, however, that I am compelled to decide the important principle involved in the second question, with so little aid from the learned counsel who have so ably argued the first. Especially as the executors have permitted this cause to be brought to a hearing, without having the widow and next of kin of the testator made parties ;• so that the decree which may be made between the present parties, if I should happen to err on the question of law, would npt be binding upon those who are not represented in the cause.

By the law as it existed previous to the late revision, thé testator could suspend the absolute vesting of his real or personal estate, until the -termina ton of the minority of a child who might be born, or begotten, during the existence of any number of lives in being at the death of the testator. And it had also been decided by the highest judicial tribunal in England, that the interest or income of the estate might be accumulated for the same period; so as to go to the same person to whom the estate was ultimately given. (Thelluson v. Woodford, 11 Ves. Rep. 112.) Where the legatee took a vested interest in the principal of a residuary bequest, payable'at 'a future time ; although it was bequeathed over, or was subject to be divested by his death before the time appointed for the' payment thereof, the interest or income of the legacy followed the principal sum, and belonged to the legatee, .unless it was otherwise disposed of by the will. (Nichols v. Osborn, 2 P. Wms. 420.) But where a particular direction was given in the will, as to the application of the income dining the time in which the payment of the legacy was suspended, the residue of the income fell into the general residue. (Lownd. on Leg. 434.) Here, the testator has appropriated a part of_ the income for the support and education of such of the children as were infants. From this, it is evident he did not intend they should take the whole income, as that provision would have been wholly unnecessary in that case; the income of their shares of th'é general residue being much more than" could have been supposed necessary for their support and maintenance. Another substantial objection to the construction contended for by the complainants’ counsel, is that the children were not in any event to take the principal of this residuary fund. Even after the death of the widow, they are only to have a life estate in the income of the fund; the principal is given over to their issue. As the testator has given them merely a contingent interest in the income of the fund after the death of the widow, it cannot reasonably be presumed that he intended to give them an absolute interest in the Whole income previous to that time; except so far as he has directed a portion of that income to be applied for their support during their infancy. ^(a) I have no doubt, therefore, that the intention of the testator was, that the income previous to that time should accumulate for the benefit of the issue of his children, to whom this residuary fund is ultimately given. This is such an accumulation of the income as the statute has prohibited, and declared void. Does this income, then, go to the children of the testator, contrary to his obvious intention 1 or is it a surplus which is not legally bequeathed by the will, and which is to be disposed of by the statute of distributions 1 . That statute directs that the surplus of the testator’s estate which remains after paying debts and legacies, if the same is not bequeathed, shall be distributed to his widow and children—one third to the former and two thirds to the latter. (2 R. S. 96, § 75.) From the best lights I have been able to obtain, I have arrived at the conclusion that the interest and income of the residuary estate, previous to the- death of the widow, except so much as may be applied by the executors for the maintenance and education of the minor children, is a residue, or surplus of the estate, which was not legally bequeathed to any person by the testator. It must therefore be distributed by the executors, to the widow and next of kin, as in cases of intestacy. Such also appears to have been the opinion of Lord Eldon, upon the construction of the English statute, prohibiting the accumulation of the income of estates except for a limited period. (See 9 Ves. Rep. 133.) It is very evident that the testator did not intend his widow should enjoy the income of one third of his personal estate after bis death. Neither did he intend the children should have it during her life. He probably was not aware of the existence of the statute prohibiting trusts of accumulation; but, by the will, it appears he intended to dispose of this income in a manner which the laws of the state do not allow.

It is said to be inherent in the nature of man to desire that his property should be perfectly free, and subject to his absolute control, during his life, and to tie it up from the control of his children and heirs forever afterwards. But there are no surer means of paralyzing the exertions and destroying the future usefulness of a legatee, than to hold out to him the prospect of great wealth, for himself or his children, at some distant period, without the exercise of ordinary industry and enterprise in obtaining it. This law against accumulations is, therefore, a salutary provision in the revised statutes; as no man should be encouraged, or even permitted, to withhold the mere income of his estate from those who should be the first objects of his bounty, for the sole purpose of hoarding up wealth, by compound interest after his death, to provide for a second or a third generation, of whom he can know nothing. Neither is it necessary that he should be permitted to accumulate a fortune, after his death, even for his immediate descendants, to be given to them at the close of their lives, when they are no longer in a situation to enjoy it. It is the duty of the court, therefore, to carry this law into effect, according to its spirit and intent; and in such a'manner, if possible, as to correct those evils against which .the revisors and the legislature intended to guard. And if the decedent does not make such a testamentary disposition of his whole property as is allowed by the laws of the state, so much thereof as is not legally and effectually disposed of, mtist be distributed among those upon whom the law would have cast it in case of an intestacy.

There must be a decree declaring, the construction of the will in conformity, with this decision. And the costs of both parties should be paid out of that part of the income of the personal estate which is not disposed of by the will.

(a) See Green v. Elkins, 2 Atk. 473 ; Butler v. Freeman, 3 Id. 58 ; Trevanion v. Vivian, 2 Ves. sen. 430.