Case Name: SMITH et al. v. FLOYD et al.
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1908-02-07
Citations: 108 N.Y.S. 775
Docket Number: 
Parties: SMITH et al. v. FLOYD et al.
Judges: 
Reporter: West's New York Supplement
Volume: 108
Pages: 775–782

Head Matter:
SMITH et al. v. FLOYD et al.
(Supreme Court, Appellate Division, First Department.
February 7, 1908.)
'Trusts—Sate op Property—Authority oe Substituted Trustee.
Where testatrix’s will created a trust for the payment of income to her daughter, and gave the trustees power to apply to the use of the daughter such portion of the capital as they might deem advisable, and no condition was suggested by the will as a criterion by which their discretion was to be controlled, substituted trustees had no authority to apply any of the capital to the daughter’s use.
Houghton and Ingraham, JJ., dissenting.
Appeal from Special Term.
Action by the Van Norden Trust Company against Richard L. Floyd and others. From a portion of a judgment (56 Mise. Rep. 196, 107 N. Y. Supp. 231), construing the will of Sarah Smith, deceased, the Van Norden Trust Company appeals. Affirmed.
Argued before PATTERSON, P. J., and INGRAHAM, CLARKE, HOUGHTON, and SCOTT, JJ.
John Nicolson, for appellants.
David Asch, for respondents.

Opinion:
SCOTT, J.
The only question involved in this appeal is whether or not'the plaintiff Van Norden Trust Company, as substituted trustee under the will of Sarah W. F. Smith, can exercise the discretionary power vested by the will in the trustees named therein to apply a portion of the capital of the trust fund to the use of the plaintiff Alice L. S. Smith. It appeared to the court below, and appears to us, that the circumstances of the case are such that it would be a wise exercise •of discretion to so apply a portion of the principal of the estate, if any discretion so to do has passed to the present substituted trustee. The will named as executors Thomas S. Mount and Morgan Blydenburgh, and to them was left in trust substantially all of the estate of the testatrix, with instructions to apply the income, rents, issues, and profits to the use, maintenance, and support of the testatrix's husband, Nathaniel Smith, and her daughter, Alice (the plaintiff), for and during the life of the survivors of them. Power was given to the daughter to dispose of the estate by a last will and testament. The fourth clause of the will provided as follows:
"I hereby authorize and empower my said executors, or such of them as •shall qualify, in their discretion, and with the approval of my said daughter Alice expressed In writing, either to sell or to mortgage, or both, the whole, or any part of my said estate as they may deem necessary from time to time, and to invest the proceeds arising therefrom, and to pay and apply the income thereof towards the use, maintenance and support of my said daughter Alice, and my said husband Nathaniel as aforesaid, with full power to my said executors to apply such portion of the capital of the trust funds as they may deem advisable to the use of my said daughter and husband."
The learned justice who wrote at Special Term has carefully collated a number of authorities to support the well-established rule that, when a power given to trustees is of a nature indicating that the donor of the power intended to repose a personal confidence in the donee of the power, it will be held that the power does not, except by express, words, pass to others who may succeed to the general administration of the. trust to which the power is attached. It would be unnecessary to add to his opinion, except that it is suggested that this particular case falls within a class of cases which seem to form an exception to the general rule. The question to be determined in each case is as to the test which the donor of the power intended should be determinative as to its exercise. If she made that test solely the personal discretion of the trustees, it is clear that the power cannot be delegated or passed to another, for that would be to substitute the discretion of another for that discretion which the donor relied upon. If, however, the test upon which the exercise of the power is made to depend is some fact which can be as well ascertained by the court, or by a substituted trustee, as by the trustee originally named, it may well be held that the power may be devolved for thus can the intention and desire of the donor be fulfilled. This distinction is well illustrated in Hull v. Hull, 24 N. Y. 647. In thát case a testator had given his estate to his executors with instructions to pay to his son the sum of $500 per annum, which might be, in the discretion of the executors, increased to any sum not exceeding $1,000 per annum. When the son should reach the age of 30 years, the executors were to pay over to him the entire estate in their hands, "provided, however, and upon the express condition that the son was then, in the opinion of the executors, solvent and able to pay all his debts of every kind." The executors having renounced both as executors and trustees, another was appointed in their place, and the question arose as to the power of the substituted trustee to exercise the power given by the will to the executors. It was held that the discretionary power to increase the income from $500 to $1,000 was personal to the executors, and died with their renunciation, but the authority to pay over the estate had been made dependent, not on the discretion of the executors, but upon the existence of the fact of solvency. The court said:
"It may be conceded that when a matter or thing is to be determined or decided entirely by the personal discretion of one or more parties, and they die or refuse to exercise this discretion, there is no way any determination or decision can be made. That provision of the will which confides to the discretion of the executors an increase of the annual allowance to the son is of this description. But, where a direction in a will is that the executors or trustees are to do, or determine upon, any particular thing, and a rule is given, based upon facts readily ascertainable in the usual manner of the legal determination of facts, then it is not a case of pure personal discretion, and the courts will uphold the will and order the facts, If disputed, to be determined in the usual way."
In Rogers v. Rogers, 111 N. Y. 228, 18 N. E. 636, the authority given to the trustees to appropriate part of the principal to the support of the testator's wife and mother, and to the maintenance and education of the children was conditioned upon the income proving to be insufficient for these purposes, and the court had from time to time passed upon the question of insufficiency, and directed that portions of the principal be so applied. The fact of insufficiency was made the test, and not the judgment or discretion of the trustees. In the present case the testatrix has established no test except the personal discretion of the two executors named in her will. So much of the capital may be applied "as they may deem advisable" to the use of the husband or daughter. No condition is suggested as the criterion by which their discretion was to be controlled. It was when they deemed it advisable, not when some one else, even the Supreme Court, should so deem it. There are undoubtedly cases in which a substituted trustee has been permitted -to exercise power of sale and other powers incident to the execution of the trust, which have involved the element of personal discretion. Haendle v. Stewart, 84 App. Div. 274, 82 N. Y. Supp. 823; Lahey v. Kortright, 132 N. Y. 450, 30 N. E. 989; Matter of Wilkin, 183 N. Y. 104, 75 N. E. 1105. In all of these cases, however, it was necessary that the power should be exercised in order that the trust might be executed, and the devolution of the power has been upheld in furtherance of the trust. In the present case the execution of the power will pro tanto destroy the trust, for so much of the principal as is paid over to the beneficiaries will of necessity be withdrawn from the trust.
The judgment should be affirmed, with costs to all parties separately appearing and filing briefs payable out of the estate.
PATTERSON, P. J., and CLARKE, J., concur.