Case ID: ad_159/html/0803-01.html
Source: Caselaw Access Project
Author: {"author": "Laughlin, 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 Title Guarantee and Trust Company, as Executor, etc., of William Buchanan, Deceased. Charles L. Buchanan and J. Roderick Buchanan and Adelaide Buchanan Baldwin, Appellants; Title Guarantee and Trust Company, as Executor, etc., and Others, Respondents.
    First Department,
    December 19, 1913.
    Will — trust — when beneficiaries take as a class and not per stirpes — application of words “ per stirpes ” — transfer tax.
    A testator bequeathed money in trust, the income to be paid to a designated beneficiary during his life and at his death said sum to be paid to the children then living of the testator’s sons “ and the issue of such as may have died leaving issue then surviving, per stirpes and not per capitaThe beneficiary of the life estate died before the testator. One of the testator’s sons survived him and at that time had three children living. The other son died during the lifetime of his father and left two children who survived their grandfather. The provisions of the will examined, and held, that it was the intention of the testator to give the fund to his grandchildren as a class and that the clause 11 per stirpes, and not per capita'''' has no application to the bequest to the grandchildren and was intended to be confined to the bequest to their issue in case of the death of any of the grandchildren during the lifetime of the testator.
    The words “per stirpes ” are not strictly applicable to named legatees or legatees designated as a class and are ordinarily used with respect to substituted legatees.
    The transfer tax should be deducted from each grandchild’s share of the fund in the proportion which it bears to the total bequests to such grandchild. The transfer tax on the remainder of their respective interests in the estate should be paid out of other trust funds in which they are interested as remaindermen.
    Separate appeals by the legatees, Charles L. Buchanan and J. Roderick Buchanan and by the legatee, Adelaide Buchanan Baldwin, from parts of a decree of the Surrogate’s Court of the county of New York, entered in the office of said surrogate on the 24th day of June, 1913, distributing the fund bequeathed by the 10th paragraph of the will of William Buchanan, deceased, and apportioning a transfer tax as aforesaid.
    
      William B. Symmes, Jr. [George G. Schreiber with him on the brief], for the appellants.
    
      Edward R. Greene [Thomas Garrett, Jr., with him on the brief], for the respondents.
   Laughlin, J.:

The testator appointed the Title Guarantee and Trust Company executor of his will. On filing its account the trust company asked for a construction of the 10th paragraph of the will, to enable it to distribute the part of the estate thereby bequeathed. That paragraph is as follows:

“I give and bequeath unto the Title Guarantee & Trust Company, a corporation organized under the Laws of the State of New York, the sum of Twenty Thousand ($20,000.00) Dollars, in trust, nevertheless, to invest and reinvest the same, and receive the proceeds thereof, and to pay over the net annual income thereof unto William N. Clem, (in recognition of his thirty years’ faithful service), for and during his natural life, and at the death of said William N. Clem, I give and bequeath the said sum of Twenty Thousand ($20,000.00) Dollars, unto the children then living of my sons, Charles P. Buchanan and William C. Buchanan, and the issue of such as may have died leaving issue then surviving, per stirpes and not per capita.

“I direct that my Executor shall pay out of my estate, to the said William 1ST. Clem, from the time of my decease, a sum equal to interest at the rate of Five (5%) per cent per annum, upon the amount of said fund, from the time of my decease, until such fund is set apart in trust.”

The beneficiary of the life estate predeceased the testator. The testator’s son Charles survived him, and at that time had three children living. The other son died during the lifetime of his father, and left two children, who survived their grandfather. On the death of the testator this fund immediately vested in his five grandchildren.

The question arising on the construction of the will is whether they took share and share alike as a class, or per stirpes, so that the two surviving children of the one son took one-half of the fund in equal shares, and the three surviving children of the other son took the other half in equal shares. That question depends on the intention of the testator, to be ascertained from a consideration not only of these particular provisions but of all of the provisions of the will and codicils. If the testator intended that his grandchildren should take as a class, and he has so drafted the will as to make evident such intention, it should be given effect accordingly.

The grammatical construction of this paragraph, according to the manner in which it is punctuated, is that both the grandchildren and the issue of any deceased grandchild shall take per stirpes and not per capita. The reference to the death of a grandchild leaving issue surviving is set off by commas in a clause by itself. The ordinary grammatical construction of the sentence, therefore, with respect to the bequest to the testator’s grandchildren is the same as if the clause referring to the death of any of them and to their issue were omitted. The bequest would then be to the children of the testator’s two sons living at the time of his death per stirpes and not per capita. That would be an unusual use of the words per stirpes, and such a bequest might indicate that it was not made to the grandchildren as a class with a view to having each take an equal share, but that it was intended that the descendants of one son should together take the same share as the descendants of the other son.

An examination of the entire will and codicils shows, what is usually the case, that too much reliance cannot be placed upon the punctuation. By the 9th paragraph of the will the testator set apart a fund of $25,000 for the benefit of another servant for life, with the remainder over to the same grandchildren as take the remainder under the 10th paragraph; and, while the phraseology of the bequest to the children of the two sons is precisely the same, the punctuation is not the same, and we find an additional comma between the words “ died ” and “ leaving ” in the clause relating to the death of a grandchild. We find in the 17th paragraph of the will two important provisions which aid in the construction of the clause in question. By that paragraph the testator set apart eight twenty-eighths of his residuary estate for the benefit of his son Charles and the latter’s children in the proportions therein stated during life with the remainder over to said children. The bequest of that remainder was in the form of a direction to the trustee as follows: “And at the death of the said Charles P. Buchanan, to pay over the principal thereof unto the children of the said Charles P. Buchanan, then living, and the issue of such as may have died leaving issue then surviving, per stirpes and not per capita.” The testator by the same paragraph also set apart thirteen twenty-eighths of his residuary estate as a trust fund for the benefit of his son William during life with a direction to the trustee upon the death of William or at the death of the testator, should William predecease him, “to pay over the principal thereof, unto his children then living, and the issue of such as may have died, leaving issue then surviving, per stirpes and not per capita

It will be observed that in each of these instances the clause by which, in the event of the death of one of the children of the testator, the bequest was to the issue of such child was set apart by commas in a clause by itself, the same as in the 10th paragraph with reference to the death of a grandchild leaving issue.

By a second codicil the testator revoked the 17th paragraph of his will and substituted a provision making the trust fund for the benefit of his son Charles and the latter’s children nine twenty-eighths of the residuary estate, and he bequeathed the remainder to the children of Charles and the issue of any-deceased child hy precisely the same phraseology and punctuation as is contained in the 10th paragraph of the will. At the time of the execution of the second codicil the testator’s son William had died, and by the codicil a trust in six twenty-eighths of the residuary estate was created for the benefit of the testator’s grandson Howard Buchanan, the son of William, and the corpus was bequeathed to the grandson’s children, and the issue of such of them as may have died, by precisely the same phraseology and punctuation as is contained in the 10th paragraph of the will; and in the event that this grandson should die without issue, the testator gave the corpus of the fund to Adele Buchanan, the sister of the grandson, if living, and if dead leaving issue then surviving, the testator gave and bequeathed the principal to such issue, per stirpes and not per capita.” The testator’s son William left only these two children; and with respect to this trust fund for their benefit, the testator provided in the codicil that, in the event of the death of both of them without issue, it should be divided “per stirpes and not per capita among those persons who at that time answer to the description of my next of kin.” The codicil also contained a like provision setting apart six twenty-eighths of the residuary estate primarily for the benefit of the testator’s granddaughter Adele Buchanan, and the corpus of that fund was bequeathed to her issue, and in the event of her death without issue, to her brother, or to his issue, by like phraseology as in the case of the like trust fund primarily for the benefit of her brother.

With respect to the construction of the 10th paragraph the fact that the bequest was to the children of the two sons leaves some room for argument that it could have been to them per stirpes; but when the two bequests herein quoted, found in the 17th paragraph and in the codicil not to the children of both sons, but each to the children of a different son, are considered, it is quite plain that there could have been no intention to have the clause “per stirpes and not per capita ” apply to the bequest to the children of either son. By each of these bequests in the 17th paragraph and codicil, the testator gave the remainder to the children of one of his sons, and it is perfectly obvious that in such case they would necessarily take per capita. The per stirpes provision, therefore, in those cases was only intended to apply to the issue of deceased grandchildren. The will was executed on the 23d day of October, 1908. The last codicil was executed on the 29th day of June, 1911. The grandchildren of the testator all appear to be of age now. It is to be borne in mind that the bequest of the remainder over in the 10th paragraph is to the grandchildren precisely as if they were named. He did not name any of them in the will. They do not take through their parents, but in their own right. Although they were all grown up, and presumably well known to the testator, it is possible that he thought that other grandchildren might be bom before his demise. That doubtless explains why the grandchildren were not named; but the reason is not important. He intended, we think, to give this fund to his grandchildren as a class, in precisely the same manner as he gave the corpus of the respective trust funds in the ITth paragraph of the will and in the codicil to his grandchildren and the issue, in each case, of a particular grandchild. In that view the clause “per stirpes and not per capitawould have no application to the bequest to the grandchildren, and should be confined to the bequest to their issue in case of the death of any of the grandchildren during the lifetime of the testator. Manifestly the testator intended that if one of his grandchildren should die leaving issue, such issue should share in the corpus of the fund bequeathed by the 10th paragraph of the will; but in order to limit the share that such issue would take to the share that the parent would have taken, it was necessary to provide, as he did, that they should take per stirpes and not per capita. (Matter of Verplanck, 91 N. Y. 439; Ferrer v. Pyne, 81 id. 282; Matter of Keogh, 112 App. Div. 414.) The words “per stirpes ” are not strictly applicable to named legatees, or legatees designated as a class, and are ordinarily, at least, appropriate, and are used with respect to substitutional gifts to substituted legatees in the case of the death of a primary legatee. (Matter of Keogh, supra; Jarman Wills [2d ed.], 1589; Robinson v. Shepherd, 32 Beav. 665; 4 De G., J. & S. 129; Matter of Verplanck, supra; Ferrer v. Pyne, supra.) Where the gift is to a class, the legatees take share and share alike, unless it otherwise clearly appears that the testator intended a different division. (Matter of King, 200 N. Y. 189; 2 Jarman Wills [6th ed.], 1711.) We think that it does not so appear here and, therefore, the punctuation may and should he disregarded. These views require a modification of the decree so as to provide that each of the grandchildren takes one-fifth of the fund.

It is contended in behalf of the appellants that no part of the transfer tax should be assessed against their shares of the fund bequeathed by the 10th paragraph of the will; and that it should be apportioned over and paid pro rata out of the-corpus of the trust funds created in other paragraphs of the will and of the second codicil of which they take in futuro, the remainder. The learned surrogate (81 Misc. Rep. 106) held that the $5,000 exemption to which each of the grandchildren was entitled should be deducted from the value of the entire legacy to each of them respectively, and [that the exemption should be apportioned on each bequest in the proportion that it bears to the total bequests to the particular beneficiary. On that theory the surrogate decreed that the executor should deduct from each grandchild’s share of the fund bequeathed by the 10th paragraph of the will a portion of the transfer tax in the proportion that the bequest bears to the total bequests to such grandchild; and that the transfer tax on the remainder of their respective interests in the estate should be paid out of the respective trust funds in which they are interested as remainder-men. With these views, we agree without further discussion.

It follows that the decree should be modified as indicated, with costs to both parties payable out of the estate, and as so modified afírme L.

Ingraham, P. J., McLaughlin, Clarke and Scott, JJ., concurred.

Decree modified as indicated in opinion, and as modified affirmed, with costs to both parties payable out of the estate. Order to be settled on notice.