Case ID: mills-surr_16/html/0096-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Clarke, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

In the Matter of the Judicial Settlement of the Account of Ellen Leonard, as Administratrix with the Will Annexed of Bryan McCahill, Deceased. Katherine Major, Individually and as Administratrix with the Will Annexed of Annie V. McMahon, Deceased, and Others, Appellants, Respondents. Ellen Leonard and Others, Appellants; Edmund S. Dorian and Others, Respondents.
    
      (Supreme Court, Appellate Division, First Department,
    
    
      June 4, 1915.)
    Will construed—Trust—Executors directed to exercise duties of trustees—Bequest in trust with remainders to pass under residuary CLAUSE ON DEATH OF BENEFICIARY—WHEN NEPHEWS EXPRESSLY DISINHERITED DO NOT TAKE—WHEN SURROGATE’S DECREE NOT RES ADJUDICATA.
    Where a testator in conveying personal property to his executors as such imposes on them the continuous active duty of investing the same and paying the income over to specified heneficiaries for life, with remainders over on the death of the beneficiaries respectively, an express trust is created, although not so termed by the testator. Where all the elements of a trust are present, a trust will be implied, especially when no illegal suspensions will be created and no injustice done.
    Where a testator provided that after the death of his widow properties from which she was given the income for life should be sold and the proceeds divided equally between the testator’s nephews and nieces, "the survivor or survivors of them, and by a subsequent clause provided that all the residue of his estate should be divided equally among his nephews and nieces whose names he specifically set forth, with the exception of two nephews whom he expressly disinherited, but distinguished the shares left to the nieces in that his executors were directed to invest their shares in securities and pay the income therefrom to the nieces for life, with the further provisio that should any niece die, without leaving issue or brothers or sisters1, her share was to revert to the general fund of the estate, to be divided equally among the remaining nephews and nieces, the testator, by the words “ remaining nephews and1 nieces,” meant the survivors of those nephews and nieces named in the residuary clause. Hence, on the death of a niece without issue and without brothers and sisters her surviving, her share reverts to the residuary- estate, to be divided among the nephews and nieces or their descendants- who were living at the testator’s death, they having a vested remainder to the exclusion of the two- nephews who were expressly disinherited.
    A surrogate’s decree respecting the division of an estate is not res adjudicada as to questions which subsequently arise byi reason of unforeseen events.
    Appeal by Katherine Major, individually and as administratrix with the will 'annexed of Annie V. McMahon, deceased, and others, from parts of a decree of the Surrogate’s Court of the county of New York, entered in the office of said Surrogate’s. Court on the 6th day of March, 1915, directing the distribution of the estate of Bryan McOahill, deceased.
    John W. Weed of counsel (Charles Meyers with him on the brief), Weed, Henry & Meyers, attorneys, for the appellants Katherine Major and others.
    Frederic N. Gilbert of counsel (Clifford C. Roberts, attorney), for the appellants Ellen Leonard and others.
    Albert Ritchie of counsel (C. H. & J. A. Young, attorneys), for Thomas J. McCahill, individually and as executor, appellant and respondent.
    John V. Judge, attorney for the respondents Thomas J. McCahill and others.
    Gilbert W. Minor, attorney for the respondent Carrie C. Griggs, as administratrix, etc.
    Abraham Finelite of counsel (Adlerman & Adlerman, attorneys), for the respondent Edmund S. Dorian.
    John Patrick O’Brien, special guardian for the respondent Francis P. Brady, an infant.
    
      
       See note Vol. 13, p. 545.
    
   Clarke, J.

—Bryan McCa-hill made his last will and testament on the 30-th day of November, 1870, died on the 14th of January, 1871, and his will was admitted to probate December fourth of the same year. The principal questions presented arise under the 11-th clause of said will -and with respect to the share of his estate-therein bequeathed to Annie McMahon.

By the will he gave- to his wife the house and lot 145 East Forty-ninth s-treet, together with the household furniture, etc.,

. contained therein during her natural life and on her decease the proceeds arising from the sale of the said house and furniture to be divided equally between his- nephews and nieces thereinafter named, the survivor, or survivors of them. He also provided for an annuity to his widow of $1,200 per annum. He then made certain specific bequests. He then gave to his executors and survivor or survivor of them the sum of $1,500 per annum during the lifetime of his executors James Brady and Thomas J. McOahill and the survivor of them, in trust nevertheless-for them to pay for the- education of young men who wish to study for the Catholic priesthood, such young-men to be selected by the executors.

" Eleventh. Immediately after my decease I direct that all my real and personal estate be sold at public auction by my executors hereinafter named and after paying the legacies above mentioned, the proceeds thereof to be divided equally between my • nephews and nieces, etc., Ellen McOahill- and Mary McOahill, the children of my brother James, deceased; Mary McMahon, Kate McMahon, Margaret McMahon, Philip McMahon, Jr., Annie McMahon and Ellen McMahon, children of my sister Margaret McMahon; Thomas J. McOahill, Margaret T. Mullane, Bernard F. McOahill, Terence J. McOahill and Ellen McOahill, children of my brother Terence, deceased; James Brady and Terence Brady, children, of my sister Rose Brady; J-ames McOahill, son of my brother Patrick, deceased, in equal shares, share and share alike. My, nephew Terence Brady, being now absent and should he remain so absent for the next five years his share is to go to his brother James Brady. The shares, however, of my nieces, Ellen McCahill, now Ellen Leonard; Mary McCahill, now Mary Curtin; Mary McMahon, now Mary Dorian; Kate McMahon, Margaret McMahon, Annie McMahon and Ellen McMahon, I direct my executors to invest in bond and mortgage, and the interest thereon of their several shares to be paid to them semi-annually, and in case of any of the above nieces dying without issue, then her share shall be divided equally among her brothers and sisters, and in case of the death of any of them leaving-issue, the interest on her share shall be divided equally between her said children, and upon their attaining the age of twenty-one years the principal shall in the same manner be divided equally between them. Should any of my nieces, however, die without leaving issue or brothers or sisters, then her share is to revert to the general fund of my estate, to be divided equally among my remaining nephews and nieces. I direct, and it is my will, however, that my nephew, Bryan McCahill, •shall not receive any share of my estate, real or personal, at my decease, he having already received what I consider his just share of the,same.

Twelfth. I further direct that my nephew, Peter Brady, shall have no part of my estate, except that I direct my executors to pay over or apply from the general fund in their hands Seven Dollars a week for his support and maintenance.”

Lastly, he appointed as his executors Rev. James McMahon, Thomas J. McCahill and James Brady, “with power to sell and dispose of all my real and personal estate, and further to act as the guardians and guardians ad litem of all my nieces and nephews and the offspring of my nieces above named during their minority.

This has been the subject of two former decisions in the Surrogate’s Court, one in 1873 and one in 1899, and one by tHe Supreme Court in 1878.

By the decree of 1873 made by Surrogate Hutchins on an accounting, it was provided that the executors invest' the sum of $17,100 to provide the annuity of $1,200 for the widow, and the sum of $21,500, known as the Priesthood fund, to produce the annuity of $1,500. It was also provided that the executors divide all the residue into sixteen equal shares and that they pay over the -said shares to each of the following persons, that is to say: Philip McMahon, Jr., Thomas J. McCahill, Ellen McCahill, Margaret J. Mullane, Bernard F. McCahill, Terence John McCahill, James- Brady, Terence Brady -and James McCahill, and that as respects the others of said shares the said executors are directed to invest the same respectively in bonds and mortgages of real estate and apply the interest and income therefrom as follows, viz.: To Ellen Leonard, Mary Cur-tin, Mary Dorian, Kate McMahon, Ellen McMahon, now Ellen Kelaher, Rose Ann McMahon and Margaret McMahon,- Jr., each one of said shares during their respective lives and on their deaths, respectively, that they pay the share of the party so dying with the accumulations, if any, to her lawful issue should she leave issue her surviving, but should she leave no issue her surviving, then to-her brothers- 'and sisters then living and the -descendants of any deceased brothers- or sisters who shall have died leaving children according to the Statute of Distributions, as in cases of intestacy.

The widow died in-1-876. Her death- left in the hands of the executors- for distribution the residence and household furniture which realized- on the sale thereof $9,500, and the trust fund of $17,100 created to produce her -annuity. An action was t-herelipon brought in the Supreme Court by the executors against the sixteen neices and nephews or their representatives. The relief demanded was as follows-: (1) Whether the distribution of the proceeds of sale of said house and lot and furniture is to be confined to such of the said nephews and nieces of the said testator who survived the said Bridget McOahill or whether the children or other representatives of such of said nephews and nieces who died before the said Bridget McOahill are entitled to share in said proceeds, and if so in what shares or proportions. (2) Whether the fund set apart to create the annuity for the said Bridget McOahill became on her death part of the residuary estate to be paid over to the nephews and nieces, and if to them is the distribution confined to the nephews and nieces who survived the widow, or do the children and representatives of such who died before the widow take any and what portion thereof, or is the same to be distributed among the next of kin of .the said testator as in ■ case of intestacy. (3) Whether the shares of either of said funds of the said nieces named in said will who are therein directed to be paid only the interest or income can now be paid to them or whether these plaintiffs are required to invest their shares and pay over the interest to them for life and on their death to pay over the principal as directed by said will.

The court found as conclusion of law that the trust created by the 9th clause was a valid trust and that the principal on the death of the survivor of the .said plaintiffs be paid over as directed by the 11th clause of the said will; that the proceeds of sale of said house and lot and furniture and the said sum invested to. produce the annuity' for the widow are to be distributed and paid over by the said plaintiffs to the nephews and nieces of the testator as follows:

One share thereof to each of the following parties (naming ten), and that the shares of the minor children of the deceased nephews and nieces as follows: The children of Mary Curtin (naming them) have each one-third of one share; that the children of Margaret T. Mullane (naming them) have each one-sixth part of one share; that the children of Mary Dorian (naming them) have each one-fifth of one share and that the daughter of Philip McMahon (naming her) one share, is to be retained by the said plaintiffs and invested for the use of said minors and on their attaining the age of twenty-one paid over to them. The judgment followed 'the decision and it will be .noted that it directed that- the fund be divided into fifteen shares, no share being set aside for Kate McMahon who had died intermediate the death of testator and his widow without leaving issue.

There is nothing to indicate upon what theory the distribution was made, whether (1) as part of the residuary estate, or (2) as provided in paragraph 2, which provided that “ on her decease tire proceeds arising on the sale of the said house and furniture * * * be divided equally between my nephews and nieces hereinafter named, the survivor or survivors of them.” It seems clear that the court considered that the annuity trust fund should be distributed in the same manner as provided in paragraph 2 for the disposition of the proceeds of the house and furniture, and that it treated the words “ survivor or survivors ” as referring to the nieces who survived the testator and not those who survived the widow, for the judgment gave to each niece, or her issue, his or her share absolutely, which could not have been done had the property been disposed of under the 11th article without overruling the decree of 1873 of the Surrogate’s Court which provided that the shares of the seven nieces be held and invested. It is not reasonable to suppose that there was any intention of overruling the surrogate’s decree sub silentio. The, judgment must, therefore, be held to have disposed of the matters passed on under the 2d paragraph. I do not think that that judgment is res ad judicata, or of an.y force and effect upon the question now before the court. The questions there con- / o sidered arose under different clauses of the will and do not seem to me to touch the question here involved.

In 1895 Margaret McMahon,'-one of the seven nieces for whose benefit the sum of $9,899.11 was to have been invested during her life as provided for by the 11th clause of the will, had died. Prior to her death a brother and sister had died, leaving no-children. She left her surviving her sister Annie Y. McMahon, five children of a deceased sister, Ellen Kelaher, two children of Mary Dorian and two grandchildren, the children of deceased children of Mary Dorian, all of whom were represented in the proceedings. Margaret McMahon died unmarried and left no issue her surviving. The question of what disposition should be made of her.share was, therefore, before the court. (Matter of McCahill, 29 Misc. Rep. 450.) Surrogate Varxum said: li It appears that one of these nieces died without issue, leaving one sister her surviving. The question raised is whether this sister is alone entitled to the share of the deceased niece, or whether the children of deceased brothers and sisters are also entitled to participate therein. * * The attention of the court is now called to a decree entered in this estate in the year 1813, in an accounting, under the terms of which the executors are directed to- make distribution of the shares in qitestion, after the. death of the respective life beneficiaries, by paying the share of any niece so dying to her lawful issue; hut if she leave no issue her surviving, then to her living brothers and sisters, and the descendants of any deceased brothers or sisters. It is contended that this direction is in th-e nature of a final adjudication, and that no other construction can be placed upon the will. * * * It is a well-settled doctrine that, upon an accounting, the surrogate has jurisdiction to- construe a will when such construction is necessary to enable distribution to be made. But where no question of distribution is before the court, any direction fixing the future attitude of executors or trustees, or pointing out the manner in which the funds should be distributed by them in the happening of a remote event, is not germane to the proceedings and is, therefore, entirely superfluous so far as the making of a complete- decree is concerned. Such an unsought for construction does not stand in the way of procuring further or other directions when the question of distribution becomes a present one and the court has the right to look upon the same as null and inoperative. (Citing cases.) Under the authorities, I am not, therefore, bound by the opinion expressed in the former decree.” He, therefore, held that the surviving sister, Annie V. McMahon, was entitled to the fund. The Supreme Court judgment was not alluded to, which tends to show that it was not regarded as res ad judicata at that time. Each of the seven trusts, for ,the seven nieces has now terminated and the trust fund distributed except the Ellen Leonard fund and the Annie V. McMahon fund. Ellen Leonard is living.

Annie V. McMahon died unmarried, February 19, 1911, without issue, leaving a will of which Katherine Kelaher Major is administratrix with will annexed. She left no brothers or sisters her surviving. But of the other nephews and nieces named in the 11th clause of the will there survived her Ellen. McOahill, Terence J. McOahill, Ellen McOahill Leonard and Thomas J. McOahill. The question before the court isj who are the persons entitled to the Annie Y. McMahon fund ? The surrogate in his first opinion herein said: “ In regard to the Annie Y. McMahon Trust, amounting to $9,201.33, created in the eleventh clause of the will, the executors, in obedience to the testator’s command, converted his estate into money. The personal property thus bequeathed vested in the legatee at the testator’s death, and thereafter became her sole property. Annie Y. McMahon having left a will, her interest in the fund named for her and her share in the proceeds, pass by her will.” But in his second opinion he said after reargument: I am now reasonably assured that the construction which I ought to give to the will is as follows: Under the terms of the eleventh paragraph of the testator’s will each of the sixteen nephews and nieces first named therein, except those whose legacies were left in trust, took a vested interest in their share at the time of the death of the decedent. The shares of seven nieces, however, were to be held in trust (quoting the will). The share of Annie McMahon, she having died without issue' or brothers or sisters, falls into the residuary estate. The residuary estate should- now be distributed equally to the nephews and nieces who took a vested interest, as above stated, or, if dead, to their next of kin or representatives, and to the trustees of each of the several nieces for whom trusts were created, or to the issue or brothers or sisters, as the case may be, of such of the cestuis que t'i'ustent as are dead, according to the terms of the said eleventh paragraph' of the will. And in case of the death of any of such cestuis que trustent without issue or brothers- or sisters, their share is to go to the residuary estate.”

I. am unable to agree with the conclusion of the learned surrogate. I think this is a perfectly plain will. The testator excepted two nephews by name from taking any part of the estate disposed of. The testator by the 11th clause vested nine of the shares of his estate in his- enumerated nephews and nieces. -Such shares being vested at the time of his death, of course those shares descended. But in regard to the shares left to the seven enumerated nieces, he left clearly defined separate trust estates which determined upon the death of the ■cestuis que trustent. Each of the seven nieces is a beneficiary. Each of the seven shares is a res. The direction to the executors to invest the share in bond and mortgage, and to pay over the income semi-annually imposed upon them continuously active duties both of investments and of payment over of the income.

“ This duty was imposed upon them as executors. It was an active duty and such as usually pertains to the office of trustees, and such they must be deemed to be for the performance of these duties.” (Matter of Dewey, 153 N. Y. 63.)

“ The duty of investing and administering the share in question it is true is imposed upon persons wílo are designated as executors rather than trustees, but it is a very familiar rule that the duties imposed upon a person rather than the name applied to him in the will should measure his office and position, and that where the duties of a trustee are imposed upon a person he will be regarded as a trustee rather than an executor. (Tobias v. Ketchum, 32 N. Y. 319, 327 ; Ward v. Ward, 105 N. Y. 68, 74.)” (Mee v. Gordon, 187 N. Y. 400.)

The bequest over upon the death of each of the seven 'nieces who have the income limits their interest in their shares to an interest in the income for life. All the elements of an expressed trust for personal property are thus present. Where a trust is in fact created it will be called so by the courts though not termed such by the testator. When all the elements of a trust are present a trust will be implied especially when, as here, no illegal suspension will be created and no iniu'stice done. (Close v. Farmers’ Loan & Trust Co., 95 N. Y. 92.)

I think Surrogate Yaexum was absolutely right in disposing of the estate of Margaret, decreeing that- it all went to Annie, her sole surviving sister. Row Annie has died. She left no issue, she left no brothers or sisters, and this clause of. the will, therefore, is applicable: “Should any of my nieces, however, die without leaving issue or brothers or sisters then her share is to revert to the general fund of my estate, to be divided equally among my remaining .nephews and nieces.” It seems to me that by “ remaining nephews and nieces ” testator meant surviving nephews and nieces; that he had in mind especially the people he knew. v There was no direct gift over of the principal of the trust estate, but instead a direction to divide it on the death of the- cestui que trust. This direction to divide was to classes, first to issue, second to brothers and sisters, and third, in the absence of brothers and sisters, or issue, to a' class to be determined upon the happening of that event and that class was the surviving or, as he has put it, remaining nephews and nieces.

“ Where final division and distribution is to be made among a class the benefits of the will must be confined to those persons who come within the appropriate category at the date when the distribution or division is directed to be made. (Bisson v. W. S. R. R. Co., 143 N. Y. 125 ; Goebel v. Wolf, 113 N. Y. 405, 411 ; Teed v. Morton, 60 N. Y. 506 ; In re Smith, 131 N. Y. 239, 247.) In such cases the gift is contingent upon survivorship."’ (Matter of Baer, 147 N. Y. 348.)

“ In the first place, it will be noted that there is no direct gift of the principal of the trust estate, but instead a direction to divide it on the death of the testator’s widow. * * *

Two well-known rules of construction are applicable to this provision: First. Where the only words of gift are found in the direction to divide or pay at a future time the gift is future, not immediate; contingent and not vested. (Matter of Baer, 147 N. Y. 348, 354 ; Delafield v. Shipman, 103 N. Y. 464 ; Delaney v. McCormack, 88 N. Y. 174, 183.) Second. Where the gift is of money and the direction to convert the estate is absolute, the legacy given to a class of persons vests in those who answer the description and are capable of taking at the time of distribution.” (Matter of Crane, 164 N. Y. 71.)

“ The rule to be applied in construing the will in this State is that where a gift arises from a direction to divide or convey the trust property among a specified class of persons and such division of conveyance is contingent and dependent upon the happening of one or more uncertain events the gift does not vest until the time for distribution or conveyance arises.” (Salter v. Drownc, 205 N. Y. 204.)

The language then her share is to revert to the general fund of my estate, to be divided equally among my remaining nephews and nieces ” means, it seems to me, that as testator had excluded two of his nephews from participating in the distribution of his estate, he intended still to exclue them in ease one of the seven nieces died without issue, or brothers or sisters; that then her share should be divided as he had provided that the general fund, or residuary of the estate should be divided among his nephews and nieces remaining alive at the time, excluding the two nephews.

The will is inartificially drawn. It created trust estates in one paragraph without using the technical terms, while in two other paragraphs testator said “ in trust nevertheless.” He uses issue ” and “ offspring ” interchangeably. He nowhere uses the word “ residue ” but employs “ general fund ” in its' stead in two séparate clauses of the will. He uses the terms survivor,” “ leaving ” and “ remaining ” to express the same meaning.

We are from the will itself to obtain the intent of the testator. ■“ The intent of the testatrix will not be defeated by the injudicious use of punctuation or by the substitution for some perfectly apt word of one less so, providing her meaning can reasonably he found.” (Mee v. Gordon, 187 N. Y. 400, 405.)

We are satisfied that testator intended that on the happening of the contingency here presented the share of the niece should be divided between the surviving nephews and nieces, excluding the two already in terms debarred from taking. The findings and decree should be modified -accordingly. In .other respects we' agree with the surrogate. The decree should he modified as indicated, and as modified affirmed, with costs to Ellen Leonard and others, Thomas J. MeCahill, executor, etc., and the guardian ad litem for infant, Francis P. Brady, payable out of the estate.

Ixg-baham, P. J., Scott, Dowliko and Hotchkiss, JL, concurred.

Decree modified as indicated in opinion und as modified affirmed, with costs as directed in opinion. Order to be settled on notice.