Case Name: SOUTHGATE et al. v. CONTINENTAL TRUST CO. OF CITY OF NEW YORK et al.
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1902-07-08
Citations: 77 N.Y.S. 687
Docket Number: 
Parties: SOUTHGATE et al. v. CONTINENTAL TRUST CO. OF CITY OF NEW YORK et al.
Judges: 
Reporter: West's New York Supplement
Volume: 77
Pages: 687–691

Head Matter:
(74 App. Div. 150.)
SOUTHGATE et al. v. CONTINENTAL TRUST CO. OF CITY OF NEW YORK et al.
(Supreme Court, Appellate Division, First Department.
July 8, 1902.)
1. Trusts—Creation—Substitution—Addition.
Where a testator created a trust, by a first codicil, for the benefit of a woman with whom he was living, and two months thereafter created another trust, by a second codicil, for the benefit of the woman and any child that might be born of their intimacy, the second trust should he regarded as an addition to, and not in substitution for, the first trust; there being nothing in the second codicil tending to show an intended revocation of the first.
2. Same—Investment—Interest.
Where a will provided for the creation of a trust fund out of testator’s general estate before any distribution or division thereof, and that the net income of the fund should he paid to one for life, and it was necessary for the creation of the fund to resort to assets of the testator which were drawing interest at 8 per cent., the beneficiary was not entitled to interest at 8 per cent, from the date of testator’s death, but only to the interest which it was shown might reasonably be earned.
McLaughlin, J„ dissenting in part.
Appeal from special term, New York county.
Action by' Hutchinson Southgate, as trustee, etc., and another, against the Continental Trust Company of the City of New York and others, for the construction of the will of Charles E. R. Hutchinson, deceased. From the decree (73 N. Y. Supp. 718), plaintiffs and certain defendants appeal. Modified.
Argued before PATTERSON, HATCH, McLAUGHLIN, O’BRIEN, and INGRAHAM, JJ.
O. J. Wells, for appellants Southgate.
Franklin Bartlett, for other appellants.
Sherman Evarts, for respondent Harriet A. Whitmore.
Percival S. Menken, for respondent Henry Southgate, as trustee.

Opinion:
PATTERSON, J.
I concur in the views expressed by the learned judge at special term upon all the questions involved in this case, with the single exception of that relating to the amount of interest to which the defendant Harriet A. Hume (Whitmore) was adjudged to be entitled. I think the two legacies to Harriet A. Hume (Whitmore) were cumulative, and that the specific legacy of $50,000 did not supersede and cancel or displace that of $20,000 previously made by the testator to her. I am also of the opinion that the learned judge at special term properly disposed of the question concerning the rights of the children of Alcander Hutchinson, and their exclusion from any share of the estate until Henry Southgate, as trustee for Harriet A. Hume (Whit-more), and Hutchinson Southgate, as trustee for Sarah E. Southgate, shall have received what is due them,—the latter upon the contract by which the children of Alcander Hutchinson assumed the indebtedness of their father to the firm of Hutchinson & Co.
The allowance of 8 per cent, to Harriet A. Hume (Whitmore) upon the legacies of $70,000 given to her, it seems to me, is altogether improper. That award proceeds upon the theory that, inasmuch as the testator made these two legacies preferential, they are entitled to draw interest at the rate of 8 per cent., because some of the testator's property out of which the fund is to be constituted consisted of an indebtedness that was drawing by contract 8 per cent, interest. This claim is-made under the authority of what was held in Re Stanfield, 135 N. Y. 292, 31 N. E. 1013; In re Baker's Estate, 57 App. Div. 44, 68 N. Y. Supp. 44; and in Re Slocum, 60 App. Div. 441, 69 N. Y. Supp. 1036. It seems to me, however, to be clear that what was held in those cases does not apply here, because there is nothing to indicate an intention on the part of the testator to do otherwise than have the trust for the benefit of Harriet A. Hume (Whitmore) constituted out of his general estate, after it should have been fully administered by his executors. There is nothing to indicate that he meant anything other than he said,, viz., that the trust fund was to be created for the benefit of Harriet A. Hume (Whitmore) out of his general estate, before any distribution, or division thereof was had, and the net income of the fund thus created was to be paid over to her. The trust was to be constituted as an entirety. There is nothing in the will to justify the assumption that because, after administration of the estate, it turned out that certain of the assets were earning interest at a certain rate, and that it is necessary to resort to those assets to constitute the fund, therefore all that those assets earned by way of interest must go to the beneficiary of the trust to be created. The gifts were not specific, and there is no right of selection given either to the trustee or the beneficiary.
I am of the opinion that it appears from this will that it was the intention of the testator that Harriet A. Hume (Whitmore) should receive only net income to be derived from a fund to be invested by a trustee, which fund was to be constituted out of the general estate of the testator after administration, and that this case is distinguishable from those upon which the respondent Harriet A. Hume (Whitmore) relies. I think that the judgment of the special term in this respect was erroneous, and that it should be modified by allowing to the respondent Harriet A. Hume (Whitmore) interest only at such rate as might be reasonably earned thereon, which, according to the evidence* is 4 per cent., and that the provisions of the judgment relating to the interest to be paid by the Continental Trust Company to Harriet A. Hume (Whitmore) should be modified to correspond with the views-expressed herein.
As so modified, the judgment should be affirmed, without costs.
O'BRIEN, INGRAHAM, and HATCH, JJ., concur.