Case Name: FRANKLIN D. LOCKE and Others, as Executors of JONATHAN SCOVILLE, Deceased, Respondents, v. MAGDALENA RINGS, Individually and as Guardian of HENRY C. RINGS, and Another, Appellants, Impleaded with Others, Dependants
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1892-12
Citations: 73 N.Y. Sup. Ct. 428
Docket Number: 
Parties: FRANKLIN D. LOCKE and Others, as Executoes of JONATHAN SCOVILLE, Deceased, Respondents, v. MAGDALENA RINGS, Individually and as Guardian of HENRY C. RINGS, and Another, Appellants, Impleaded with Others, Dependants.
Judges: 
Reporter: Supreme Court Reports (Hun)
Volume: 73
Pages: 428–443

Head Matter:
FRANKLIN D. LOCKE and Others, as Executoes of JONATHAN SCOVILLE, Deceased, Respondents, v. MAGDALENA RINGS, Individually and as Guardian of HENRY C. RINGS, and Another, Appellants, Impleaded with Others, Dependants.
Declaration of trust — effect of a reference thereto in a will — violation of the statute against perpetuities.
In 1887 Jonathan. Scoville executed an alleged declaration of trust relative to four certificates of stock, and therein stated that he set apart these certificates for the following purposes, to wit: That the net income or dividends should, from time to time, he apportioned into ten equal parts, of which three should he paid over for the use and benefit of Magdalena Rings, three for the use and benefit of Anua M. Rings, two to be paid to Henry C. Rings during life and two to be paid to Minnie M. Rings for life; that in case of the decease or marriage of Magdalena Rings, or of the decease of Anna M. Rings, whichever event should first happen, the portion allotted to such person should be paid over to the use and benefit of St. John’s Episcopal Church, and the portion allotted to the other should, after her decease (or marriage, if it he the said Magdalena), he paid over to the use and benefit of the Buffalo Orphan Asylum; that, upon the decease of the said Henry O. Rings, his portion should thenceforth he paid to the use and benefit of the St. Vincent’s Female Asylum, and that, upon the death of Minnie M. Rings, her portion should thereafter be paid to the use and benefit of the Buffalo Hospital of the Sisters of Charity.
•One of the original declarations of trust was deposited, with the certificates of stock, with a safe deposit company, and another, original, was delivered to the beneficiaries.
Scoville died in 1891, and in the sixth article of his will he referred to the trust which he had attempted to create, directed his executors to carry out its terms, if possible; made a provision for the beneficiaries in case it could not be carried out, and in that event directed that the securities he deemed a portion of his residuary estate.
In an action brought for the construction of the declaration of trust, and for a direction as to the effect of the will upon it, the court held that the declaration was invalid as to all the beneficiaries and they appealed.
Held, that no trust whatever was created by the sixth article of the will, because the deed of trust was not incorporated in it, and no disposition of the property was made other than by reference.
That an unattested paper of a testamentary character could not be taken to be a part of a will, although referred to in the will.
That the separation of the shares by Scoville and his execution of the declaration were sufficient to subject the shares to the trusts, provided that the latter were valid under the statute.
That the trusts were void for the reason that they violated the statute against perpetuities.
That nothing was disposed of by the declaration except income; and that there was no disposition of the principal at any time, the income after the death of the first beneficiaries being directed to be paid to corporations which are supposed never to die.
That it was the testator’s intention that the principal should always be kept in solido, and should never be released from the trust.
It was admitted that the gifts of income to the corporations were void.
Held, that the fact that upon the death of a beneficiary there would be a severance of a proportional part of the principal, made necessary because that part could no longer be employed for trust purposes, did nut imply upon the part of Scoville an original intention to create for each beneficiary a separate trust in the principal proportioned to his interest. (Per Barrett, J.)
O’Brien, J., dissenting, holding that the trusts in favor of the Rings were valid and severable, and those in favor of the corporation were void.
Appeal by the defendants, Magdalena Rings, individually and as. guardian of Henry O. Rings and Minnie M. Rings, Anna M. Rings, Henry C. Rings, Minnie M. Rings, tbe Buffalo Orphan Asylum, the St. Yincent’s Female Orphan Asylum and the Buffalo Hospital of the Sisters of Charity, from the whole of a judgment of the Supreme Court, entered in the office of the clerk of the city and county of New York on the 26th day of July, 1892, declaring a declaration of trust executed by Jonathan Scoville, deceased, void; that the will of Scoville did not create a valid trust in favor of the beneficiaries mentioned in the declaration, and that the ¡property mentioned in the declaration must be deemed a part of Jonathan Scovill’s residuary estate, excepting, however, that part of said judgment allowing costs to the attorneys out of the fund.
The case was tried by the court at the New York Special Term.
J. G. Milbiirn, for the appellants.
S. Evarts, for the respondents.

Opinion:
YaN Bp.uNt, P. J.:
This action was brought by the executors of the will of Jonathan bcoville, to obtain the determination of the court as to the validity of a certain trust attempted to be created by the testator, by an instrument in the form of a declaration of trust, and as to the effect and validity of the will of the testator in relation to such attempted trust, and the property affected thereby.
In January, 1887, the testator executed, in triplicate, a paper in the following words:
"Be it remembered that I, Jonathan Scoville, of the city of Buffalo, county of Erie and State of New "York, owner of fcur hundred shares of the capital stock of the New York and Harlem Railroad Company, of fifty dollars each, and evidenced by four certain certificates thereof, numbered 21,815, 21,816, 21,817 and 21,818, respectively, have and do hereby dedicate and set apart, from and after the date hereof, in whose possession soever the said several certificates of stock may come without actual transfer, all and singular the net income and dividends hereafter to accrue and become due and receivable from time to time thereon, in trust to myself, or to any custodian in whose hands the said certificates of stock may be deposited by me, or by my order for the like purpose, and to and for the following uses and purposes, that is to say:
"The said net income or dividends of the said stock, as often as received, from time to time, shall be apportioned into ten equal parts, three of which parts shall be paid over to the use and benefit of Magdalena Rings, of Buffalo, N. Y.; three parts thereof shall be paid over to the use and benefit of Anna M. Rings, of the same place; two parts thereof shall be paid over to Henry C. Rings, of the same place, for and during his natural life, and two parts thereof shall be paid over to Minnie M. Rings, of the same place, for and during her natural life, provided, however, that in case of the decease or marriage of the said Magdalena Rings, or the decease of the said Anna M. Rings, whichever event shall first happen, then the portion so allotted to such person shall, from and after the happening of such event, be paid over to the use and benefit of the St. John's Episcopal Church and Society of the town of Salisbury, State of Connecticut, and the portion allotted to the other shall, after her decease (or marriage, if it be the said Magdalena), be paid over to the use and benefit of the Buffalo Orphan Asylum (Protestant) of the city of Buffalo, and upon the decease of the said Henry C-Rings, the portion so allotted to him shall thenceforth be paid to the use and benefit of the St. Yincent's Female Asylum of the city of Buffalo, and upon the decease of the said Minnie M. Rings, the portion so allotted to her shall be thereafter paid to the use and benefit of the Buffalo.Hospital of the Sisters of Charity; and it is hereby expressly provided, from and out of the said income so apportioned to the said Magdalena and Anna M. Rings, they shall each bear and pay an equal portion of the taxes, repairs and insurance of the premises this day leased to the beneficiaries herein named.
" For the purposes of this instrument, the said Magdalena Rings shall be considered the guardian of the property and rights of the said Henry C. Rings and Minnie M. Rings during minority, and upon her marriage or decease then the said Anna M. Rings, if surviving and unmarried, shall be deemed such guardian; otherwise, a guardian for the said minors shall be duly appointed.
" The right to cancel or otherwise modify this instrument at any .and all times is hereby expressly reserved to me, notwithstanding any provision herein contained
" Witness my hand, this fifth day of January, A. D. 1887.
" JONATHAN SGOYILLE."
One of the originals, and the certificates of stock mentioned in it* .and which are the subject-matter of the trust, were then deposited in a sealed envelope in the box of Scoville in the Mercantile Safe Deposit Company, of the city of New York. Another of the originals was delivered to the beneficiaries named in the trust; and the remaining one was delivered to and deposited with one M. A. Whitney, a lawyer in the city of Buffalo. Scoville died on the 4th of March, 1891, leaving a last will and testament dated the 27th of December, 1890, and a codicil thereto bearing date the 21st of February, 1891, which were duly admitted to probate and letters testamentary issued thereon. At the time of the death of said Scoville the deed of trust and certificates still remained in the envelope with the seal unbroken, and deposited with the Mercantile Safe Deposit Company.
The sixth article of Scoville's will refers to this deed of trust and is as follows:
" Article Sixth. I have executed and deposited in the Mercantile Safe Deposit Company of the city of New York a certain deed of trust, which affects a portion of my estate, which portion is more particularly described in a paper inclosed with such deed of trust. I direct my executors to cany out the provisions of this deed of trust so far as they can, but in case any unforseen circumstances should prevent its performance and execution in full, then I direct that the sum of two thonsand dollars per annum be paid by my executors to the beneficiaries named in such deed of trust, in the proportions mentioned in such deed of trust and I direct that my executors set apart a sum sufficient to produce the net annual income of two thousand dollars, and to invest and reinvest the same, and out of the income fulfill my directions in that regard. Should any unforseen circumstances prevent the carrying out of the terms of said deed of trust, then the securities mentioned and connected therewith are to be deemed a portion of my residuary estate (but under no circumstances, in case it is deemed invalid, shall it affect this article)."
By the codicil the Farmers, Loan and Trust Company and one Locke were appointed trustees of the trusts expressed in or created by the said article 6 and other articles of the will.
The court at Special Term held the deed of trust invalid as to all the beneficiaries, and from the judgment thereupon entered this appeal is taken.
It is clear that there was no trust, valid or otherwise, created by the sixth article of the will, because the deed of trust is not incorporated in the will, and the sixth article by itself makes no disposition whatever of the property mentioned or referred to therein, and it can receive no validity by its reference to the deed of trust, because such deed was not incorporated in such will; it being the law of this State that an unattested paper, which is of a testamentary nature, cannot be taken as a part of the will, even though it be referred to by that instrument. In order that such a paper may have the force of a testamentary disposition of property it must be authenticated according to the provisions of our statute of wills, and the deed of trust not being so authenticated cannot be sustained as part and parcel of the will.
But we think that the separation by Mr. Scoville of these shares of stock from the bulk of his estate, and the execution by him of the declaration of trust (and, by execution, we include all that is a necessary element to a complete execution of an instrument), were sufficient to subject the shares of stock to the trusts set forth in such declaration, provided that a trust, such as was attempted to be created, was permitted by our statutes.
As was said in the case of Barry v. Lambert (98 N. Y., 306): " It is well settled that a trust in personal property may be created by parol, and that no particular form of words is necessary for its. creation, but the words or acts relied on to effect that object should be unequivocal, and plainly imply that the party making them intended to divest himself of his interest in the property, and to. hold it thereafter for the use and benefit of another. This is all that is required to create a trust even as against the owner, and although, he continues to retain possession of the property devoted to the trust."'
This brings us to the question whether the trust attempted to be' created was one in contravention of the statute forbidding perpetuities.
A very brief examination of the deed of trust will show what the intention of the creator of the trust was. He refers to 400 shares, of the capital stock of the New York and Harlem Railway Company, represented by four certificates, of which he is the owner; and he, by said deed of trust, dedicates and sets apart, from and after the. date thereof, in whose possession soever the said several certificates-of stock might come without actual transfer, all and singular the, net income and dividends thereafter to accrue and become due and receivable from time to time thereon. This net income or dividends-he directs to be apportioned into ten equal parts, three of which: shall be paid to the use and benefit of Magdalena Rings, of Buffalo,, N. Y., three parts thereof to the use and benefit of Anna M. Rings,, of the same place, two parts thereof to Henry C. Rings, of the same, place, for and during his natural life, and two parts to Minnie M. Rings, of the same place, for and during her natural life, with a. proviso that in case of the decease or marriage of said Magdalena, Rings, or the decease of said Anna M. Rings, whichever event, should first happen, the portion allotted to such person should, from and after the happening of such event, be paid over to the use and benefit of a certain Episcopal church in the town of Salisbury, Conn.,, and that the portion allotted to the other should, after her decease (or marriage if it were the said Magdalena Rings), he paid over to-the use and benefit of an orphan asylum in the city of Buffalo; and that upon the decease of said Henry C. Rings, the portion so allotted to him should thenceforth be paid to the use and benefit of the St. Yincent's Female Asylum of the city of Buffalo; and upon the decease of said Minnie M. Rings, tlie portion allotted to her should be paid over to the use and benefit of the Buffalo Hospital of the Sisters of Charity.
It will thus be seen that there is no disposition of the principal forming the corpus of this trust fund, and it is perfectly clear that there was no intention upon tlie part of the creator of the trust to make any disposition of such principal, because, as soon as the first beneficiaries died, the direction is that the income should be paid to a corporation, which is supposed never to die, and it is income which is treated of all the time. It is plain that it was his intention that the trust fund should be kept m solido during all this time, because otherwise there could be no division of the income into ten parts as is directed. It is thus manifest that the absolute disposition of the whole corpus of this fund is suspended for more than two lives in being, and such was the intention of the creator of the trust.
It is, undoubtedly, true that income and principal given in equal shares, out of one fund kept m sólido for mere convenience of investment, may be severed and independent trusts created for tlie several beneficiaries, and thus the shares and interests will be several, even though the fund remain undivided. (Schermerhorn v. Cotting, 131 N. Y., 60.) But upon an examination of the facts'of that case it will be seen that the suspension of the power of alienation of the share of each of the beneficiaries was made to depend upon two lives in being only, and it was the plain intention of the testator that principal should descend absolutely upon the termination of such two lives in being. In the case at bar we look in vain for the expression of any such intention. Upon the contrary, there is no provision whatever for the vesting of the principal at any time; and the very fact that the creator of the trust provided that the second beneficiary of each one of these shares should be a corporation, and the gift is only of a certain share of income and not of principal, shows that all that he intended to give the corporation was theincome and not the principal. It also shows the intention that none of the principal was to be released from the trust, and that only income, under any circumstances, was to be paid over. It seems to us that it is so plain that this was the intention of Scoville that, if the courts are to construe an instrument of this character as exhibiting an intention to create separate and distinct trusts rather than to put one undivided fund in trust, then it will be impossible for the creator of a trust, however much he may desire to do so, to express any intention to have a fund remain in solido.
The rule undoubtedly is, with respect to instruments of this character, that, where it can be done without violence to the intention of the creator of a trust, that construction will be given to the clause which will sustain the intended trust rather than one that will defeat it. But where the general meaning of the language of the instrument shows that there was an intention to provide for an illegal extension of the trust term, and that any other construction will do violence to the plain language of the instrument, then the court can only found its judgment upon the manifest intention of the creator of the trust.
In the case at bar, as we have already seen, it was beyond question the intention of Mr. Scoville that the corpus of this fund should remain for an unlimited period yielding income, which he gave to the numerous beneficiaries mentioned in the trust deed. And this was a clear violation of the statute against perpetuities..
The judgment should be affirmed, with costs.
BabRett, J.:
The appellants say that there must necessarily be an actual severance of a proportionate part of the principal upon the death of each of the first beneficiaries, because the gift of income to the second beneficiaries cannot take effect, such secondary gifts of income to the corporations being void.
Upon this, they contend that an original severance in law to be implied, because so much of the principal, as may be thus released from the production of income, must go somewhere. This amounts to saying that, even if Mr. Scoville intended no severance, and although he certainly made no provision with regard to the principal, yet the law will insist upon and declare a severance for the purpose of sustaining the trust. This is carrying the doctrine of severance to an impossible extreme. There was here, in reality, no "severance" of principal, and that expression is misapplied. What the appellants mean is that, upon the death of each original beneficiary, a proportionate part of the principal will be incidentally released. But that release would not result from an original sever anee, but simply from the further non-employment of principal for the trust purpose.
I do not mean to say that the appellants concede that Mr. Scoville intended no severance. They do insist that his intention was to create separate trusts of properly proportioned principal. Where I essentially differ with them, however, is in finding such intention from the release of principal, which may result from the void gift of income to the corporations. No such intention can be inferred from a condition resulting solely from the testator's illegal purpose. On the contrary, the secondary gift of income to corporations plainly indicates an intention to keep the principal permanently employed, and to keep it, while so employed, in solido.
I agree with the presiding justice that the judgment of the Special Term was correct and should be, in all respects, affirmed, with costs.