Case Name: Woodside Presbyterian Church, Respondent, v. I. Townsend Burden, Appellant, Impleaded, with Evelyn Burden, Defendant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1934-01-23
Citations: 240 A.D. 43
Docket Number: 
Parties: Woodside Presbyterian Church, Respondent, v. I. Townsend Burden, Appellant, Impleaded, with Evelyn Burden, Defendant.
Judges: 
Reporter: Appellate Division Reports
Volume: 240
Pages: 43–56

Head Matter:
Woodside Presbyterian Church, Respondent, v. I. Townsend Burden, Appellant, Impleaded, with Evelyn Burden, Defendant.
Third Department,
January 23, 1934.
Joseph C. Behan, Jr. [John T. Norton of counsel], for the appellant.
James Farrell, for the respondent.
Appeal dismissed, 264 N. Y. 690.

Opinion:
Crapser, J.
On May 28, 1910, Margaret E. Proudfit wrote to I. Townsend Burden and Evelyn Burden a letter which referred to the codicil of a previous will drawn approximately three years before the execution of her last will and testament.
" My dear Nephew and Niece: It is my express desire and purpose in giving to you Twenty Five Thousand Dollars by the codicil to my will, although I do not make it a trust and condition, that you should with it create a trust of that amount with the Knickerbocker Trust Company, or if for any reason that shall be impracticable, then with some other solvent and appropriate corporation, by which such company or corporation shall take and hold the same in trust, to invest the same and keep the same invested, and to collect and receive the rents, income and profits thereof and to pay and apply the same to keeping the buildings of the ' South Presbyterian Church of Troy,' commonly known as the ' Woodside Presbyterian Church,' and the grounds about the same and used in connection therewith, in good order and repair, so far as the money so applicable thereto will permit; but no part thereof to be applied to any alteration or enlargement thereof; payment to the persons named in my will as executors, and to the survivor of them, and after the decease of both of them, to the Treasurer of said Church, to be and to be held to be a sufficient application of such rents, income and profits to the purposes of this trust, and a receipt by them with a statement that the said moneys have been or are to be applied for such purposes shall be conclusive evidence thereof, and of a full discharge of the trustee for the moneys so paid."
On September 14, 1915, Margaret E. Proudfit died leaving a last will and testament which was duly admitted to probate and by the first clause it was provided as follows: " I give and bequeath to my nephew, I. Townsend Burden, Junior, and to my niece, Evelyn Burden, children of my brother, I. Townsend Burden, or to the survivor of them, the sum of Twenty Five Thousand Dollars."
Upon the judicial settlement of the will of Margaret E. Proudfit a legacy of $25,000 was paid to I. Townsend Burden and Evelyn Burden and on October 2, 1916, I. Townsend Burden wrote the following letter to the pastor of the plaintiff:
" Dear Sirs: As you probably know, my beloved Aunt, Mrs. Margaret E. Proudfit, in a letter written to me and found with her will, requested that I set aside the sum of $25,000, the income of which should be applied for the benefit of the Woodside Presbyterian Church.
" In accordance with her wishes I have invested this amount so as to yield for the benefit of the Church 4|% annually, which amounts, as you will see to the sum of $1,125. I will arrange to send you this money in quarterly installments, beginning the 11th of October, 1916, which is just three months time from the day when the estate was distributed. This quarterly payment will amount to the sum of $281.25.
" My aunt, as you know, always had a deep and enduring interest in the welfare of the Church which was founded and built by her Father, and it is a great pleasure for me to be able to administer the income of this generous donation for its welfare."
On October 11, 1916, I. Townsend Burden sent a check for $281.25 to the trustees of the church with a letter which in part said: In payment of the first quarter's interest on the trust fund authorized by Mrs. Proudfit." Payments of like amount were sent quarterly by I. Townsend Burden to the trustees of the church until January, 1931, when the defendant stopped paying.
He paid the interest on the $25,000 at four and one-half per cent to the church from October, 1916, until the semi-annual payment due in July, 1931.
On November 29, 1916, the secretary of the board of trustees of the church wrote a letter to the defendant I. Townsend Burden requesting a copy of the letter which had been written by Mrs. Proudfit in regard to the $25,000 and asking whether the income from the fund was to be for a limited period only or whether it was to be continuous.
In response to this inquiry the defendant wrote a letter to the secretary of the church inclosing a copy of Mrs. Proudfit's letter. In this letter he said, among other things: " My sister and I have decided to carry out my aunt's wishes as expressed in her letter. The income, therefore, from this sum will be a permanent matter, and will be sent to you quarterly as I stated in my former letter to your Honorable Board. However, you will note that this money is to be used to maintain the grounds and church buildings in good condition, and for no other purpose."
On September 10, 1931, in answer to a request from the church authorities for the interest the defendant wrote to the treasurer of the church the following letter:
" September 10th, 1931.
" Mr. Arthur Curthoys, Treas.,
" Woodside Presbyterian Church,
" Troy, N. Y.
"Dear Sir: On my return from my vacation I received your letter dated July 28th in which you state ' It has been your custom in the past to enclose a check for $562 for interest on Mrs. Proudfit's legacy and we are wondering if you overlooked it.at this time.' I regret exceedingly that I am unable any longer to make the semiannual payment of this sum. As you probably know, the Burden Iron Co. in which I hold a substantial amount of stock has ceased to pay dividends and nearly all the investments I have made during the past few years have either cut dividends or omitted them altogether. Consequently I am in no position to continue payments I have made heretofore to the Woodside Church.
" While I have used the words ' Mrs. Proudfit's legacy ' in letters in which I enclosed my check, it has been a misstatement of fact. I myself have always regarded the payment of this sum as a gift and not a legacy. It therefore becomes incumbent on me to set forth as briefly and clearly as I am able to the facts in connection with this payment.
" Under the will of my aunt, Mrs. Proudfit, which is dated July 12th, 1915, of which the subscribing witnesses were J. H. Peck, Samuel S. Williams and Wm. S. Kennedy, it is provided in the first clause thereof as follows: ' I give and bequeath to my nephew I. Townsend Burden and my niece, Evelyn B. Burden, children of my brother I. Townsend Burden or to the survivors of them, the sum of $25,000.' This is the only provision contained in the will itself dealing with this bequest. However, among Mrs. Proudfit's papers there was a letter dated May 28th, 1910, signed Margaret E. Proudfit, which states as follows: 'It is my express desire and purpose in giving to you $25,000 by a codicil to my will although I do not make it a trust and condition that you should with it create a trust of that amount with some trust company the income of said fund to be used to pay and apply same to keeping of the building of the South Presbyterian Church of Troy, in good order and repair.' This letter referred to a prior will which bequeathed this sum of money under a codicil. Mrs. Proudfit's will, as finally probated makes an outright bequest of the entire sum of money to my sister and myself without any conditions or alternatives. The making of this new will automatically revokes any earlier will.
" In order to corroborate my opinion on this question I have submitted the facts to the firm of Peck & Behan who were attorneys in charge of the probating of Mrs. Proudfit's will and the distribution of the assets thereunder. On June 4th, 1931, I received a letter from Mr. Jos. Behan, Jr., which states in effect, ' Since receiving your letter which came while I was out of the city for a few days, I have looked at the papers in the Surrogate's Court, also the records in our office files. There is nothing in either which might support the theory that the bequest to yourself and your sister was upon any condition or trust. It appears that this was an absolute gift, also the accounting by the executors shows this legacy was paid direct to yourself and your sister and the transfer tax paid upon your shares in the estate included the tax against you on this legacy.' Under these circumstances, therefore, I feel no obligation either legal or moral to continue this payment to the Church. My only wish and hope was that I might be able to continue it as a charitable bequest but business conditions and the general depression existing throughout the country has made it impossible for me to do so'
" Yours very truly,
" I. TOWNSEND BURDEN."
After the receipt of this letter the present action was commenced.
It is evident from the record in the case that the defendant did not carry out the exact request made of him and Ms sister in the letter from Mrs. Proudfit. Instead of putting the money in the hands of a trust company he became trustee of the money Mmself.
The defendant effectually confirmed a trust of personal property consisting of $25,000, in wMch he as author of the trust Mmself became the trustee. TMs he could legally do. (Martin v. Funk, 75 N. Y. 137; Barry v. Lambert, 98 id. 306.)
The letters written by the defendant to the church authorities followed by the payment of interest for a long number of years constituted a good and valid declaration of a trust and the defendant held the legal title to the moneys for those to whom he had given the income from it.
It is impossible for the creator of a trust, however much he may-desire to do so, to express any.intention to have the fund remain in sólido.
The question, therefore, with the court is whether by the trust created the mere use was intended to be given, or whether we are permitted to say that the gift was absolute and carried the principal itself. Unless this can be answered so as to show it was the intention to give more than the mere use, the trust will fail. We are to consider what the intention was of the defendant in setting up this fund. If it is determined that the disclosed intention was to give the use merely, and that is clearly manifested and undisputed, then there can be no trust. The only rational object of giving the use merely would have been to preserve the principal for some other destination. There is no expression of disposition on the part of the defendant outside of and beyond a corporate beneficiary. He expresses no purpose for the disposition of the trust in case there ceases to be a beneficiary, he contemplated no remainder. The entire beneficial interest was given forever and to a corporation which does not die. It was for cases of such character that the rule was formed which adds the naked and barren legal title to a gift of the entire beneficial interest, because outside of that such title can go nowhere and represents nothing.
There is no clear and expressed intention to give only the use and to otherwise dispose of the remainder. The rule controlling, which regards a gift of the entire income and dividends as a gift of the principal out of which they issue, can be applied to uphold the judgment in this case. (Locke v. F. L. & T. Co., 140 N. Y. 135, at pp. 147 and 149.)
While the transfer of the property to the trustee for the purposes of the settlement may be the surest way to create a trust, yet the same result will be accomplished if the owner declares that he himself holds the property in trust for the person designated, and this trust may be created either in writing or, if relating to personal property, by parol. The declaration need not be made to the beneficiary, nor the writing given to him; in fact, his ignorance of the trust is'immaterial. (Matter of Brown, 252 N. Y. 375.)
The defendant herein created a trust with himself as trustee for the benefit of the plaintiff. The trust was to be a continuous one. He paid the income for many years, when he refused to pay any longer by his letter written in 1931. He, therefore, became liable in a suit for an accounting, not having provided for the disposition of the remainder in creating a trust, and the use having been set aside to a corporation and no beneficial interest having been reserved, he became possessed of the naked legal title held for the benefit of the plaintiff.
The judgment herein should be modified as follows:
First. That between July 6,1916, and October 2,1916, the defendant I. Townsend Burden created and established a trust fund in the sum of $25,000, the net income only thereof being payable to and for the benefit of the plaintiff permanently.
Second. That said I. Townsend Burden is now holding as said trustee said corpus which he has stated was invested, " so as to yield for the benefit of the Church 4|% annually."
Third. The plaintiff is "entitled to an accounting from said I. Townsend Burden for the securities and investments if made in accordance with his assertion, and if no investments were made then plaintiff is entitled to an accounting as to the sum of $25,000 and the income thereon, with interest from January 11, 1931.
Fourth. That on or about September 10, 1931, the defendant I. Townsend Burden claimed to be under no obligation either legally or morally to continue the payment to the church and repudiated any obligation on his part to pay the income from said fund to the church.
And it is further adjudged that the said defendant I. Townsend Burden be and hereby is directed and required to render and file herein an accounting of his proceedings as trustee to said trust within thirty days after the entry of this judgment and the service of a copy thereof with notice of entry, and that upon the judicial settlement of said account final judgment be entered herein directing and requiring the defendant I. Townsend Burden to pay the plaintiff the balance of said trust fund found due upon said accounting, and further adjudged that the complaint be and the same is hereby dismissed as to the defendant Evelyn Burden, with costs as in an action.
The matter should be remitted to Special Term for the purpose of an accounting and for final judgment and the judgment as herein modified should be affirmed.
Hill, P. J., and Bliss, J., concur; Rhodes, J., concurs in the result; Heffernan, J., dissents, with an opinion.