Opinion ID: 2336142
Heading Depth: 1
Heading Rank: 2

Heading: the price trust

Text: Thomas Price died on September 24, 1933, leaving a will dated February 24, 1928. The testator bequeathed his residuary estate in trust, with the Fidelity Union Trust Company as trustee, with directions to pay the net income to his widow Esther K. Price for her life; on her death the corpus to be distributed between two charities, the Orange Orphan Society and the Board of Social Service of the Diocese of Newark. As to the trustee's authority to make investments, the will provides as follows: SIXTH: My executor and trustee is expressly authorized and empowered to hold as part of my estate and of the trust hereby created any investments made by me in my lifetime which shall come into its hands as part of my estate and of said trust, notwithstanding they may not be such as are legal for trust investments under the laws of the State of New Jersey; nevertheless authorizing and empowering said executor and trustee, whenever in its judgment such action shall be either necessary or advisable for the safety or enhancement of my estate or of said trust, to sell and dispose of the same from time to time, and the proceeds of such sale or sales shall be invested and reinvested in such securities as are lawful for trust investments under the laws of the State of New Jersey. In determining the application of the Prudent Man Investment Statute to the Price Trust, the trial court held as follows: Under the proper construction of the last will and testament of Thomas Price, deceased, plaintiff, Fidelity Union Trust Company, as Trustee under the last will and testament of Thomas Price, deceased, is authorized to invest in securities on the list of legals at the time the investment is made, excluding `limited legal investments' and any investments which are qualifiedly legal. It is the contention of Esther K. Price and the Orange Orphan Society on their cross-appeal that the trial court was correct in holding that the Prudent Man Investment Statute was not rendered unconstitutional by virtue of its retrospective provisions, but that it erred in holding that the trustee cannot invest in `limited legal investments' and any investments which are qualifiedly legal. They contend that the trust is governed by the statute and that the trustee may invest in any investments whatsoever provided that the aggregate value of investments not appearing on the so-called legal list do not exceed the 40% limit imposed by the statute. The Board of Social Service of the Diocese of Newark, on the other hand, takes the position that the trial court's construction of the will was correct and that the trustee's power is limited thereby to investing in securities on the legal list with no power to invest under the provisions of the Prudent Man Investment Statute. We agree with the contention of the cross-appellants Esther K. Price and the Orange Orphan Society. Here the testator, Thomas Price, by paragraph Sixth of his will authorized his trustee to hold such investments which should come into its hands as part of the trust estate notwithstanding they may not be such as are legal for trust investments under the laws of the State of New Jersey, and to invest and reinvest in such securities as are lawful for trust investments under the laws of the State of New Jersey. There is no expressed intention to fix the investment powers of the trustee with respect to the laws in effect at any particular time, and therefore, as hereinbefore pointed out, it is presumed that the testator intended that the trustee should be controlled by the statutes in effect at the time that the investment is to be made. As we have already indicated, under the Prudent Investment Man Statute a trustee is authorized to invest in securities other than those on the so-called legal list to the extent of 40% of the principal of the trust. Since such investments are plainly lawful for trust investments under the laws of this State, the trustee is therefore clearly authorized by the terms of the will to invest therein within the limits prescribed by the statute.