Waterman v. New York Life Insurance & Trust Co.

| NY | Dec 27, 1923

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] John C. Carpenter, who died in 1917, left his homestead with its contents to his wife Dora during her life, "giving to her full power of disposing of the same by will to such one of my surviving brothers or to such one of my nephews of my own blood as she may deem fit to receive the same." If the property was sold while the life estate continued, the proceeds of the sale were to be turned over to a trustee and thereafter were to form a portion of the residuary estate. The gift of the residuary estate is to the New York Life Insurance and Trust Company as trustee to pay the income to the wife during life, "and on her decease to divide and pay over said principal trust fund in equal shares to my surviving brothers and sisters; except that in case of the sale of my homestead hereinbefore given to my wife for her natural life, the proceeds of such sale are to be paid over on her death to such one of my nephews of my own blood as she may by her will direct."

The homestead was sold during the life of the wife, but she did not exercise the power to direct the payment of the proceeds to one of the surviving nephews. The plaintiff, a grandson, contends that by force of this omission the testator died intestate to that extent, and that the proceeds belong to him as surviving heir at law. The nephews, eight in number, contend that in default of an appointment to one of them, the law will direct a division equally among them all. The brothers and sisters contend that the proceeds belong to them as donees of the residuary estate.

We think division among the nephews equally is forbidden by the will. Section 160 of the Real Property Law (Consol. Laws, chap. 50) provides: "If the trustee of a power, with the right of selection, dies leaving the power unexecuted, its execution must be adjudged for the benefit, equally, of all the persons designated as beneficiaries of the trust" (cf. §§ 157, 158). Division is to be made in accordance with this section in those cases and those only where some other division is not directed, either expressly or by implication, in default of the appointment. There are other directions here. The nephews as a class are not "the persons designated" by the testator "as the beneficiaries of the trust." He has made it plain that he had no such meaning. The wife is not authorized to select as many nephews as she chooses, one or more than one or all. On the contrary, she is repeatedly admonished that her choice must be confined to one. Division among all the nephews would frustrate the testator's purpose if it were effected through any act of hers. It would equally frustrate his purpose if it were effected by the law. Cases may indeed be found where from slight and dubious tokens, the courts have drawn the inference of "a general intention in favor of a class" (Burrough v. Philcox, 5 My. Cr. 72, 92; Sugden on Powers [8th ed.], §§ 6, 7, 8). In none of them had the intention been distinctly negatived as here. This case finds a parallel to some extent in Brown v. Higgs (4 Ves. 708), where the gift, following an estate tail, was to "one of the heirs of the sons of my nephew Samuel Brown as he shall direct by a conveyance in his life time or by his will." The opinion was expressed, though the point was not decided, that in default of the exercise of the power there could be no division among the sons. Sugden, commenting on the case, puts the underlying principle before us in a sentence: "A power to give to such as a donee may select of a class may be considered as including the whole class, for although any may be selected, yet the whole may be objects of the power; whereas a power to appoint to such one of a class as a person may name, authorizes a gift to one only of the class; no larger number, much less the whole class, can be made objects of the power" (Sugden on Powers [8th ed.], p. 593, § 17; cf. In reLlewellyn's Settlement, 1921, 2 Ch. D. 281, 290). In the will before us now, the restriction of the choice to one is stated with industrious iteration. We cannot disregard it as casual or meaningless.

The power of appointment failing, the question remains whether the proceeds of the sale are to be distributed as upon intestacy or as part of the residuary estate. The latter, we think, is the clear mandate of the will. The heir at law contends that the gift of a residue is not augmented by the failure or lapse of another portion of the residue (Wright v. Wright, 225 N.Y. 329" court="NY" date_filed="1919-01-14" href="https://app.midpage.ai/document/wright-v--wright-3588944?utm_source=webapp" opinion_id="3588944">225 N.Y. 329, 340). The rule, though often deplored, has been thought to be settled by authority (Wright v. Wright,supra). It is without pertinency here. No gift of the residue or of any part of it has failed through the omission to execute the power of appointment. Subject only to the life estate and to the execution of the power, the whole residue was given to the brothers and sisters, and title passed to them at once. Title would, indeed, have been divested if the appointment had been made. The effect of the failure to appoint is merely that title is maintained. The gift of the residue has not lapsed. It has been continued and confirmed.

We cannot doubt that this construction gives effect to the testator's purpose. There is a struggle always to avoid intestacy (Matter of Ossman v. Von Roemer, 221 N.Y. 381" court="NY" date_filed="1917-10-16" href="https://app.midpage.ai/document/matter-of-ossman-v--von-roemer-3622229?utm_source=webapp" opinion_id="3622229">221 N.Y. 381, 387). This testator would surely wish that the struggle should succeed. The heir at law who claims the proceeds is his descendant through a divorced wife. The will reveals his purpose that neither she nor her issue should share in his estate.

The judgment should be affirmed with costs.

HISCOCK, Ch. J., HOGAN, POUND, McLAUGHLIN, CRANE and ANDREWS, JJ., concur.

Judgment affirmed.