Case ID: abbn-cas_25/html/0166-01.html
Source: Caselaw Access Project
Author: {"author": "O’Brien, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

CROSS v. UNITED STATES TRUST CO.
    
      N. Y. Supreme Court, First District, Special Term;
    
    
      June, 1890.
    
      Wills ; validity of provisions as to p>ersonalty controlled, by the law of testator's domicil.] Where a testatrix who was a resident of Rhode Island, died there and her will was admitted to probate and her estate there administered, and the will created in a New York corporation certain trusts in a large amount of personal property, viz., railroad bonds in the hands of said corporation in this State, and these trusts were invalid by the law of this State, but valid by the law of Rhode Island,—-HeId, that the validity of the provisions of the will as to such property, was to be governed by the-law of the State of Rhode Island, and not by that of this State-
    [Distinguishing Chamberlain v. Chamberlain, 43 N. Y. 424.]
    
      The same.] The fact that the trustee is incapable of executing a trust not valid under the laws of this State will riot defeat the trust itself, but the courts here will remit the property for administration in the foreign tribunal.
    Trial by the court in an action for the construction of a will.
    The opinion states the facts.
    
      Fdward C. James, for plaintiff.
    
      Stewart & Sheldon, and M. T. McMahon, for defendants.
   O’Brien, J.

This action is brought to obtain a judicial-construction of certain provisions of the will of Pliebe Jane Cross, deceased, which creates certain trusts in the defendant over $700,000 of railroad mortgage bonds, now in the hands of the trust company. The testator had her domicil in Rhode Island. She made her will there, and it is in all its-provisions valid by the law of that Stated

When the testatrix died, in 1878, her will was probated; in Rhode Island, and for seven years the plaintiff executors themselves administered these trusts under the supervision of the courts of that State. It is conceded that the trusts, though valid under the laws of Rhode Island, are in part or wholly void under the laws of the State of New York.

The fund, consisting entirely of personal property, is in the possession of the trust company, a New York corporation. Is the validity of the provisions of the will, as to property thus held, to be governed by the laws of this State or those of Rhode Island ?

It may be stated as a general rule of law, sustained by numerous decisions, that the law of domicil, governs in the disposition of personal property. In the case of Chamberlain v. Chamberlain (43 N. Y, 424) the question was whether a charitable bequest of personal property by a citizen of New York to a corporation of Pennsylvania, upon a trust to be administered in Pennsylvania, was void because contrary to the law of New York, where the testator was domiciled and the will was executed.

Allen, J., in delivering the opinion of the court, says ; <c The law of the testator’s domicil controls as to the formal requisites essential to the validity of the will as a means of transmitting property, the capacity of the testator and the construction of the instrument. Personal property has no locality, and, therefore, the law of the domicil of the owner governs its transmission, either by last will and testament or by succession in ease of intestacy. But if within the lex domicilii, a will has all the forms and requisites to pass the title to personalty, the validity of the particular bequests will depend upon the law of the domicil of the legatee, and of the government bo which the fund is, by the terms of the will, to be transmitted for administration, a/nd the particular purposes indicated by the testator. Whatever may be the law of Pennsylvania, a testator domiciled in that State cannot establish by bequests of personalty to citizens or corporations of this State, a charity in trust to be administered here, inconsistent with the policy or the laws of this State. ... So far as the validity of bequests depends upon the general law and policy of the State, affecting property and its acquisition generally, and relating to its accumulation and a suspension of ownership, and the power of alienation, each State is sovereign as to all property within its territory, whether real or personal?

This language is broad enough to apply to all testamentary dispositions of personal property, and, so considered, would work a substantial modification, if not an entire abrogation, of the well and long established rule that the law of the testator’s domicil governs the disposition of personal property, and, so considered, would be conclusive of the questions here involved. Subsequent decisions, however, expressly recognize the former cases, reannounce the original rule,.and thus confine the Chamberlain caseto stated conditions.

When, therefore, we take the point actually decided in that case, apart from, the language used, we find that the questions involved were charitable bequests and the capacity of a legatee to take. The capacity of a legatee to take must necessarily go to and affect the validity of a bequest. If made to one incapable of taking, the will, so far as that legacy is concerned, must fail, and such a question must be judged, not by the laws of a testator’s domicil, but by those of the legatee’s, for by the latter alone is his capacity created, limited and defined. Applied to charitable bequests, when we recall the jealousy with which they are watched, the restrictions imposed by statute, and the disabilities and limitations placed on charitable associations or corporations to take, the reason for the application of the rule that the law of the domicil of the legatee must govern is apparent.

That the Chamberlain decision is to be thus limited is shown by the cases of Manice v. Manice (43 N. Y. 387-91), Draper v. Harvard College (57 How. Pr. 269) and Mapes v. American Home Missionary Society (33 Hun, 360). In Manice v. Manice (supra) there was a bequest by a citizen of this State of $5,000 to Yale College to be accumulated as a trust fund for a purpose invalid under the laws of New York. The court, however, held the bequest effectual so far as requiring the payment of the fund to the legatee in Connecticut. As to the questions arising upon the validity of the trust, the court says : “These a/t'e questions, however, which ■must necessarily he determined hy the courts of the State in which the corporation legatee is situated. The fund is to ■go there and he there administered. The will of the testator, ■so far as the courts of this State can act upon it, is fully executed when the money is paid to the proper officer of the foreign corporation.”

In Draper v. Harvard College (supra), Justice Van Voust says of the bequests to the trustees of the college: -<c The college being legally authorized to take the gifts, the -question as to the validity of the directions and conditions imposed by the testator as to holding, investing, accumulating and applying is for the consideration of the courts of Massachusetts, hy whom their validity under the laws of ■that State is to he determined.” In Mapes v. American Home Missionary Society (supra), General Term, Second Department, it is said : “ A testator, domiciled at the time -of his death in the State of Connecticut, left a will by which he gave one-third of his residuary estate to the American Home Missionary Society. This was an association of persons organized for charitable and religious purposes, domiciled in the State of New York ; but unincorporated at the time of the testator’s death. By the laws of the State of New York the bequest was void ; by the laws of Connecticut it was good. Held, that the bequest was governed by the laws of New York, and was, therefore, void.” Barnard, P. -J., says : “ The general rule is that, while the execution of the will and the capacity of the testator, and the construction of the instrument is governed by the law of the domicil of the testator, yet the law of the domicil of the legatee governs the validity of the bequest.”

This rule, peculiarly applicable to charitable bequests, when applied to bequests to individuals with capacity to take fails, because the reason and the foundation upon which the-rule itself is supported are wanting. In the present case thebeneñeiaries are in law capable of taking—the property is personal—no charity is created by the trust, no principle or-policy is involved which can be urged against the application of the old established rule of lex domicilii. In this connection the distinction between real and personal property must always be observed, as clearly pointed out in White v. Howard (46 N. Y. 144). In that case the testator was a resident of Connecticut, and Grover, J., says: “The validity of the-bequests of his personal property and all questions of succession thereto, or rights therein, must be determined under the laws of that State and by the courts of that State. . . . In addition . . . the testator was seized of real estate situated' in the City of New York. The validity of the devise of the-latter property . . . must be determined by the laws and courts of New York.” See, also, Moultrie v. Hunt (23 N. Y. 394).

The trust here involved, as before stated,relates solely to-personal property, and was created in Rhode Island, pursuant to the law of that State, by one domiciled there, who appointed as her trustee a New York corporation. Although the-trust is valid in Rhode Island, it is claimed that as the provisions thereof contravene our statute against perpetuities,, and the fund and trustee are here, that it becomes necessary to declare the same void and decree a distribution under the-laws of New York.

It would seemingly be a harsh rule of law that a citizen of' another State, who had made a valid will according to the law of that State, should, by selecting a trustee in another - State, to whom the personal property was sent, render the-will void and entail the penalty of having the property distributed, not according to the terms of his will, but, under-the laws of the foreign State, as though he had died therein; intestate. That the courts of this State will not administer the estate of a foreign citizen here in controvention of the-laws of this State is true, and, from reasons of policy and. principle, will apply its own laws to questions affecting real estate here, is equally true; but in reference to personal property and the testamentary disposition thereof, it will remit all questions relating thereto, and, in case of necessity, the property itself, to the domicil of the testator, to be there-dealt with under the lex domicilii.

It will be thus seen that I do not agree with plaintiffs5 contention that the case of Chamberlain v. Chamberlain (supra) is controlling upon the case at bar.

This case, both in its facts and in principle, is more like Despard v. Churchill (53 N. Y. 198). As therein said s “ The testator had his domicil in the State of California. He made his will there. Ho question is made but that it is-in all its provisions valid by the law of that State. It, however, by its terms, disposes of certain property in this State, and by provisions which are invalid here, inasmuch as they run counter to our statute law (1 R. S. 723, § 15; Id. 773,. § 1). The statute law here referred to embodies the policy of this State in relation to perpetuities and accumulations-As this sovereignty will not uphold a devise or a bequest by one of its citizens in contravention of that policy, it will not. give its direct aid to sustain, enforce or administer here such a devise or bequest made by a citizen of another sovereignty (Chamberlain v. Chamberlain, 43 N. Y. 424). Yet it is no-part of the policy of this State to interdict perpetuities or accumulations in another State (Id. 434). . . . Personal property is subject to the law which governs the person of its-owner, as to its transmission by last will and testament; and this principle, though arising in the exercise of international comity, has become obligatory as a rule of decision by the-courts. And, as a general rule, the distribution of personal property, wherever made, must be according to the law of the-place of the testator’s domicil. . . . As has been stated, the courts of this State may not directly aid in carrying out here-a bequest which is in violation of its statute law, and contrary to a policy of which it is tenacious. And yet they may not hold the bequest void, when it is valid by the law of the-¡State by which the disposition of the property is to be governed. The one would be to transgress the written law of this State ; the other would be to disregard an unwritten rule of law, well settled, and of extensive and frequent application.”

While, therefore, the courts of this State will not directly aid in carrying" out here the trust which is in violation of its ■ statute law, no valid reason is presented why it should assume jurisdiction over the property and the persons interested and .give a construction of the provisions of the will which will render void the testamentary disposition of property which was valid in the State where the testatrix was domiciled. The •only illegality or disability in this case is not as to any inherent illegality in the trusts themselves, but rather to the disability of the trustee to take and administer the trust. By the charter terms of the defendant trust company it is incapable of executing any trust not valid by the laws of New York ; but it is a well settled principle that equity never wants any trustee, or, in other words, as stated in Perry on Trusts (4 ed. § 38) : “If a trust is once properly created, incompetency, disability, death, or non-appointment of a trustee shall not defeat it.”

The selection, therefore, of the defendant as trustee, which cannot, under its charter, execute the same, because not a valid trust, under the laws of this State, is no reason for holding the trust itself invalid. I have been referred to no ■ authority in which it has been held that the incapacity of the-trustee, from either private domicil or personal or corporate disability, destroys the trust itself. In this very case the trusts were carried out for more than seven years, without the intervention of the trustee designated. An account •of the administration of the trusts during those seven years was rendered to and passed upon by the Bhode Island court, ■and, had it been so desired by plaintiffs, the very question now presented could have been passed upon in that State. In my opinion, therefore, the proper course for the court tto here take is to refuse to assume jurisdiction, and to remit the property, and, if needs be, the persons, to the Rhode Island courts, to the end that the law of the testator’s domicil may be applied in determining the validity of the will as a means of transmiting property, and to the construction, of the instrument itself.

There should be judgment, therefore, in favor of the defendants, dismissing the complaint.