Case Name: Alice L. S. Smith and The Van Norden Trust Company, as Substituted Trustee under the Last Will and Testament of Sarah W. F. Smith, Deceased, Appellants, v. Richard S. Floyd and Others, Respondents
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1908-02-07
Citations: 124 A.D. 277
Docket Number: 
Parties: Alice L. S. Smith and The Van Norden Trust Company, as Substituted Trustee under the Last Will and Testament of Sarah W. F. Smith, Deceased, Appellants, v. Richard S. Floyd and Others, Respondents.
Judges: 
Reporter: Appellate Division Reports
Volume: 124
Pages: 277–287

Head Matter:
Alice L. S. Smith and The Van Norden Trust Company, as Substituted Trustee under the Last Will and Testament of Sarah W. F. Smith, Deceased, Appellants, v. Richard S. Floyd and Others, Respondents.
First Department,
February 7, 1908.
Trust — when discretionary power does not pass to substituted trustee.
Personal discretion given to trustees cannot, in the absence of words giving express authority, be delegated to or exercised. by a substituted trustee appointed by the court, unless the exercise of the power depends upon some fact which can as well be ascertained by the court or the substituted trustee as by the trustees originally named.
Thus, when testamentary trustees are empowered “to apply such portion of the capital of the trust funds as they may deem advisable to the use ” of beneficiaries named, the discretionary power does not pass to a substituted trustee appointed by the court, for the discretion was wholly personal to the trustees first named and the exercise thereof is not necessary to the execution and furtherance of the trust.
Ingraham and Houghton, JJ., dissented, with opinion.
Appeal by the plaintiffs, Alice L. S. Smith and another, from part of a judgment of the Supreme Court, entered in the office of the clerk of the county of New York on the 18th day of Novemx her, 1907, upon the decision of the court rendered after a trial at the New York Special Term in an action for the construction of a will.
John Nieolson, for the appellants.
David Asch, for the 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' off the estate by a last will and . testament. The 4th 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 or parts 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. (56 Misc. Rep. 196.) 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 seems 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 tlie 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 delégated or pass 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 that 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 thirty years the executors were to pay over to him the entire estate in their hands, " p'rovided, 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 and liabilities 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 present 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 to determine upon any particular thing, and a rule is given, based upon facts readily ascertainable in the usual manner of 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) 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 disci'etion of the trastees. 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. Ho condition is suggested as the criterion by which their discretion was to be controlled. It ivas 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; Lahey v. Kortright, 132 N. Y. 450; Matter of Wilkin, 183 id. 104.) 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., concurred; Ingraham and Houghton, JJ., dissented.