Case ID: ad_70/html/0598-01.html
Source: Caselaw Access Project
Author: {"author": "O’Brien, J.: Van Brunt, P. J. (dissenting):", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Hermann H. Cammann and Others, Surviving Executors of and Trustees under the Last Will and Testament of Nathaniel Platt Bailey, Deceased, Respondents, v. Sidney Smith Whittlesey and Others, Appellants, Impleaded with Alletta R. Bailey and Others, Defendants, and Alletta Nathalie Bailey, Respondent.
    
      Will — a gift of two mortgages, one held by the testator at Ms death and the other directed by him to be purchased by the executors—both treated as specific legacies, in order to carry out the testator's intention.
    
    The will of á testator provided in the 12th clause thereof: “As- the largest part of my property consists of lands at Fordham Heights * * * and said lands, at the time of my .death may yet be unsold and, therefore, unproductive of income, and my wife may desire to occupy the property or some part thereof during the term of my son’s and granddaughter’s lives —upon whose lives I . have, limited her enjoyment of mine estate, or any other'good reasons may then ' exist why the same should not all be forthwith sold, and as my other property will be sufficient to pay the taxes on said Fordham lands and most, if not all, the other charges and legacies hereinbefore provided in the first to the eleventh • inclusive, sections of this my will, and as the following legacies cannot be paid unless said Fordham lands or some portions thereof’ are sold and a part of the avails thereof used for that purpose, I hereby direct my executors to pay the following legacies out of the body of my estate as soon as it can be done without embarrassment to my wife’s comfort and an undue sacrifice of said lands, but at any time within the lives of my son and granddaughter or the survivor of them should my wife, if she then be living, consent in writing thereto; but should any two of the three beneficiaries who are to receive, the income of the: trust estate created under the succeeding sections of my will die, then I direct such sale to be forth with made, whether my said wife be living or not, and after the provisions of the foregoing and succeeding sections of this my will have been duly complied with, then I hereby give and bequeath the following sums to the following persons hereby charging the estate of my said son and granddaughter and the residuary estate or estates hereby created with the payment-of the following legacies. Subject, therefore, to the above restrictions, I hereby give and bequeath unto the following persons the following sums, viz.: •* * * To my niece Catherine Whittlesey, Twenty thousand dollars (§20,000), payable as follows: Ten thousand 00/100 dollars (§10,000) thereof by transfer to herself personally in her own right of a mortgage for that amount made by ' her and her husband in favor of my wife and in case said mortgage shall not belong to me at my decease then my executors are hereby directed to purchase the same in order to comply with this bequest or otherwise to pay said legatee that amount in money; six thousand, dollars ($6,-000). thereof to be paid by transfer to her in her own right by executors of a mortgage made by her and her husband'in my favor for that, amount and the balance of said legacy, the sum of-four thousand dollars (§4,000) in. money.”
    At the time of the testator’s death, which occurred October 12, 1891, he owned the §6,000 mortgage alluded to and his wife owned the §10,000 mortgage. Letters testamentary were issued upon the testator’s estate, January 8, 1892. December 1, 1899, the testator’s executors purchased the §10,000 mortgage from the testator’s wife and on that day, the Fordham Heights property still remaining unsold, assigned both mortgages to the next' of kin of Catherine ■ Whittlesey, who had died intestate. ...
    
      Held, that the next of kin of Catherine Whittlesey should be charged with interest on both the mortgages for a year following the granting of the letters testamentary on the testator’s estate, and not for any period thereafter;
    That, although it appeared that the bequest of the §10,000 mortgage was not a specific legacy (the testator not having owned it at the time of his death), and that the bequest of the §6,000 mortgage was a specific legacy, the artificial rules relating to the allowance of interest upon specific, demonstrative and general legacies did not apply, as the testator did not intend to make any distinction between the benefits the legatee was to receive from the transfers of the two mortgages.
    Van Brunt, P. J., dissented.
    Appeal by the defendants, Sidney Smith Whittlesey and others; from the following portions of a judgment of the Supreme Court in favor of the plaintiffs and the defendant Alletta Nathalie Bailey, entered in the office of the clerk' of the county of New York on the 17th day of December, 1900, upon the report of a referee:
    
      First. From the summary statement of said judgment.
    
      Second. From so much and such part of said judgment as decides that none of the legacies under the 12th clause of the will of the testator, excepting in regard to the partial payment" of the legacy to Catherine Whittlesey by transfer of the $6,000 mortgage were payable until the sale of the Fordham Heights property, and the receipt from such sale of funds applicable to the payment of such legacies; and from so much and such part of said judgment as decides that the said legacies only became payable at the date of the death of Eliza Meier. Bailey and only began to draw interest from that date.
    
      Third. From so much and such part of said judgment as decides that the provisions regarding the $10,000 mortgage mentioned in the legacy to Catherine Whittlesey in the 12th clause of the will of testator did not establish a specific or demonstrative legacy of the same, and from so much and such part of said judgment as decides that the purchase of said mortgage could only be made with funds raised in the samé manner and at the same time as those from which payment of the other legacies in said clause was to be made, and that the provision in that regard was subject to all the limitations'attached to such other legaciesv and from so much and such part as decides that the amount of the legacy paid by transfer .of said mortgage was not payable until the death of Eliza Meier
    
      Fourth. From so much and such part of said judgment as decides that the provisions in regard to the $6,000 mortgage contained in said legacy to Catherine Whittlesey did not establish a specific gift of the same, but simply indicated and set apart ■ the mortgage as a fund from which $6,000 of said legacy was primarily to be paid by transfer to the legatee, and from so much and such part as decides that the time for this transfer was at the expiration of one year after the issuance of letters testamentary, and from so much and such part as decides that the appellants are only entitled to receive the income earned and paid to the executors upon said mortgage after that date.
    
      Fifth.. From so much and such part of said judgment as decides and states the account of the amount due to these appellants upon said legacy, which account is stated as follows :
    “ Amount of legacy................. $20,000 00
    “ Amount of interest due on $6,000
    mortgage...................... 2,184 00
    $22,184 00
    “ Amount paid by transfer of $10,000
    mortgage.............'.......... $13,450 00
    “ Amount paid by transfer of $6,000 mortgage.. ..................... 6,000 00
    “ Balance remaining due
    $19,450 00
    $2,134 00”
    
      Sixth. From so much and such part of said judgment as decides that only the sum of $2,134, with, interest from. May 23, 1900, is due these appellants upon said legacy.
    . Seventh. From so much and such part of said judgment as decides that by the transfer of the said '$10,000 mortgage the sum of $13,450 was paid to appellants on account of said legacy.
    The action was brought by executors and trustees of the will of Nathaniel P. Bailey, who died October 12,1891, for the construction thereof, and a determination of the rights and interests of the beneficiaries.
    The testator left surviving him as heirs at law and next óf kin his widow, Eliza M. Bailey, who subsequently died May 23, 1900, and a son, James M. Bailey, who died February 27, 1897, leaving a widow and a daughter. By his will, which was dated January 24, 1891, and was admitted to probate December 31, 1891, letters testamentary being issued January 8, 1892, the testator disposed of his estate, which amounted to over $800,000, both by specific bequests and by the creation of trusts. The sum of $325,669.77 was thus given in the first eleven paragraphs. The more important of these legacies were those named in the 3d paragraph, directing the executors to set aside $100,000 for the widow, and in the 5th, creating a trust of $150,000 for the benefit of his son with remainder over for the benefit of the son’s wife and daughter.
    The 12th clause, wherein legacies amounting to $221,000 were given, among which was one of $20,000 to the testator’s niece, Catherine Whittlesey, the mother of the appellants, provided: “ As the largest part of my property consists of lands at Fordham Heights * * * and said lands at the time of my death may yet be unsold and, therefore, unproductive of income, and my wife may desire to occupy the property or some part thereof during the term of my son’s and granddaughter’s lives — upon whose lives I have limited her enjoyment of mine estate, or any other good reasons may then exist why the same should not all be forthwith sold, and as my other property will be sufficient to pay the taxes on said Fordham lands and most, if not all, the other charges atid legacies .hereinbefore provided in the first to the eleventh inclusive sections of this my will, and as the following legacies cannot be paid unléss said Fordham lands or some portions thereof are sold and a part of the avails thereof used for that purpose, I hereby direct my executors to pay the following legacies out of the body of my estate as soon as. it can be done without embarrassment to my wife’s comfort and an Undue sacrifice of- said lands, but at any time within the lives of my son and granddaughter or the survivor of them should my wife, if she then be living, consent in writing thereto; but should any two of the three beneficiaries who are to receive the income of the trust estate created under the succeeding sections of my will die, then', I direct such sale to be forthwith made whether my said wife be living or not and after the provisions of the foregoing and sue-;, ceeding sections .of this iny will have 'been duly complied with, then I. hereby give and bequeath the folio wing, sums to the following persons hereby charging the estate of my said son and granddaughter and the residuary estate or estates hereby created with the payment of the following legacies.. Subject, therefore, to the above restrictions, I hereby give and bequeath unto the following persons the following sums, viz.: * * * To my niece Catherine Whittlesey, Twenty thousand dollars ($20,000) payable as follows: Ten thousand 00/100 dollars ($10,000) thereof by transfer to herself personally in her own right of. a mortgage for that amount made by her and her husband in favor of my wife' and in case said mortgage shall not belong to me at my decease then my executors are hereby directed to purchase the same in order to comply with this bequest or otherwise to pay Said legatee that amount in money; six thousand dollars ($6,000) thereof to be paid by transfer to her in her own right by executors of a mortgage made by her and her husband in my favor for that amount and the balance of said legacy, the sum of four thousand dollars ($4, 000) in money.”
    The trust estate referred to as “ created under the succeeding sections.” for the benefit of three beneficiaries, is stated in the; l-4th clause which disposes of all the rest and remainder of the-testator’s real and personal property.
    ■ The Fordham Heights property was occupied and held by the widow down to the time of her death, May 23, 1900. Meanwhile,, on February 12, 1895, Catherine Whittlesey died intestate leaving as her heirs at law the appellants herein. The $10,000 mortgage was not owned by testator at his death, but belonged to his wife, and interest was paid on it by Mrs. Whittlesey up to March 1,1894. It was purchased by the executors from Mrs. Bailey for $10,000 on December 1,1899, the unpaid interest at that time amounting to $3,450. Mrs. Whittlesey paid as interest oh the $6,000 mortgage after the. death of the testator $2,631, of which $447 was for interest. for the year after letters testamentary were granted. ■ Both mortgages were assigned to these appellants on December 1, 1899. '
    The referee in his report determined with regard to the sum which the appellants were entitled to receive from the executors in' payment of what remained due under the legacy, that the legatees were to be charged with $3,450 interest due and unpaid on the $10,000 mortgage when it was purchased .from the widow and that they were not to receive back the interest which had been paid thereon from the time of the testator’s death to March 1, 1894; that they were to be charged with interest on the $6,000 for the year following the death of the testator but were to be credited with $2,184 earned and collected on that mortgage after January 8,1893. From the judgment entered on the report the legatees referred to appeal, claiming that the referee erred (1) in charging them with interest of $3,450 unpaid when' the $10,000 was assigned ; (2) in not crediting them with $1,500 paid thereon prior to March 1,1894, and (3) in charging them with $447 interest on the $6,000 mortgage for the year following the granting of letters testamentary.
    
      Thomas F. Conway, for the appellants.
    
      Fordham Morris, for the executors, respondents.
    
      Stephen H. Olim, for the respondent Bailey.
   O’Brien, J.:

We concur writh the referee in his conclusion and for the reasons stated by him, that interest should be charged on the $6,000 mortgage for the year following the granting of letters testamentary. It seems anomalous, however, that he should have reached the further conclusion that the legatee was chargeable with interest that accrued on the $10,000 mortgage beyond that time.

Undoubtedly there is a distinction between the two mortgages growing' out of the fact that the testator held one at his death, while the other, the $10,000 mortgage, was at that time the property of.his wife; and, owing entirely to this consideration, the referee held that while the $6,000 mortgage was a demonstrative legacy, the one for $10,000 wás neither a specific nor a demonstrative legacy, and that as -its purchase could only be made with funds raised through the sale of the Fordham property, it was payable in the same way as the remaining legacies in the 12th- clause; namely, after such sale, and that interest-ran only after the date so fixed. The results of thé decision of the referee are, the legatee receives the $6,000 mortgage as of a date one year after the granting of letters testamentary, but the transfer to her of the $10,000 mortgage is made as of such time as it was purchased by the executors, which purchase could be deferred until the Fordham property was to be sold. The referee has' correctly stated the general rule upon the subject, of when interest runs upon legacies and the distinction made in the cases between specific, demonstrative and general legacies; but we think he has.overlooked what is, after all, the controlling principle in all cases involving the construction of wills, and that is the intention of the testator, blot withstanding the difference in his relation as to the ownership of the. two mortgages, it is reasonably certain that the testator intended to make no distinction as to the benefits which the legatee was to receive from the transfer to her of both mortgages, because he distinctly states that if he did not own the $10,000 mortgage at his decease, then his executors were to purchase it in order to comply with his wishes, which were that in part payment of her legacy of $20,000 his niece should receive the. two mortgages and the remaining $4,000 in money. Although, therefore, this was not, strictly speaking, a specific legacy, it was in the nature of such; and the testator, having in mind the fact that there rested upon thé legatee the obligation of paying not only the principal, but also the interest, of the two mortgages, intended, as is fairly inferable from the context, that these obligations should not be extended, as in the case of the other legacies in the 12th clause, 'until the time arrived for the sale of the Fordham property. He ■thought, no doubt, that at sometime between the making of his will and his death this mortgage of $10,000 would come into his possession, or else that after his death his executors might arrange the matter with his wife ; but, either failing, he gave the express direction to his executors that if he did not at his death own the mortgage, they were to purchase it. Had he owned it at his death, •clearly the rights of the legatee therein would have been the. same ■ as to the $6,000 mortgage.

' In -view; therefore, of the evident intent of the testator, as 'shown'-by the exact provision he made as to the manner of payment of this legacy, we think the referee gave undue weight to legal definitions and artificial rules which, in doubtful cases, are necessarily resorted to for the purpose of construing and administering wills, but which must give way and can play no part where the intent is clear. Our reading of this 12th clause of the will before us, providing, that the Whittlesey legacy of $20,000 is payable in a specified and different manner from all the other legacies embraced in that clause, is, that the testator intended that his niece should receive the benefit of these mortgages and that in this connection he did not intend to make any distinction between the $6,000 and the $10,000 mortgage.

Our conclusion, therefore, is that the referee erroneously charged the legatee with the interest which had accumulated on the $10,000 mortgage during the period beyond the year after the letters testamentary were issued and that the judgment appealed from should be modified in that respect and as so modified affirmed, with costs to the appellant payable out of the estate.

McLaughlin, Hatch and Laughlin, JJ., concurred; Van Brunt, P. J., dissented.

Van Brunt, P. J. (dissenting):

I agree that it is anomalous that the referee did not charge interest on the $6,000 mortgage as well as on the $10,000 mortgage ; and I am of the opinion that he should have charged interest upon both. The mortgagor was bound to pay the interest Upon these mortgages until the legacy of $20,000 became payable, which it is conceded would not occur until the Fordhatn Heights property was sold. It is entirely immaterial as to who held these mortgages. The bonds accompanying the mortgages were debts of the mortgagor, and they naturally drew interest until the time came for their being turned over to the mortgagor in part payment of the $20,000 legacy when such legacy became due. It might just as well be claimed that the mortgagor was entitled to recover interest upon the sum of $4,000 which was to be paid in cash, as that she was not to pay interest upon her debts until, under the terms of the will, it became proper for the executors to discharge the same.

Judgment modified as directed in opinion, .and as modified affirmed, with costs to the appellant payable out of the estate.