Court Opinion

ID: 6416906
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:56:50.42342+00
Date Added: 2024-06-11T15:51:35.932258
License: Public Domain

Weeds, J.
There is one consideration which appears to us to be decisive of the main question in this case. The bequest is not *90to the Clarke Institution directly, but to the trustees, in whom the legal right vests, in the first instance. The gift to them is of fill the residue without limit or restriction.
The testator assumed, correctly, that the residue would be less than $200,000. The right to this residue vested in the trustees at the death of the testator. The executors are charged with no other or further duty or authority in relation to the residue, but to deliver or pay it over to the trustees. As trustees the plaintiffs are charged with no trust, by the will, except that for the Clarke Institution. The directions, out of which this controversy arises, are to them as trustees, prescribing the mode in which they shall administer the trust; not qualifying the trust itself.
Those directions are, 1st. To invest and hold for the purpose of accumulation; 2d. To pay over to the Clarke Institution as soon as the accumulation should reach the sum of $200,000. That sum was named, not as a measure of the gift to the trustees, but as a limit to the accumulation in their hands. That limit being reached, their second duty immediately attached; namely, to pay over the amount to the cestui que trust. It was not to pay $200,000 to the Clarke Institution ; but to pay over the trust fund when that amount of accumulation had been reached.
It is agreed that “ the estate was not and could not have been settled within two years from the appointment of executors, on account of outstanding claims.” But the rights of parties are not to be affected by such delay. They must stand as if the legacy had been paid over when the right to it accrued. This applies as well between the trustees and the Clarke Institution as between the executors and the trustees. The increase of the fund therefore, whether by the addition of income from its investments, or by their appreciation in value, must result to the benefit of the party entitled to the fund itself. There is nothing in the will declaratory of any other trust, and the law will imply this.
We need not consider whether the construction would have been otherwise if the residue had exceeded $200,000 at the death of the testator. Upon the facts of this case we are satisfied that the testator did not intend to limit the amount that the Clarke *91Institution should receive, but only to fix the period during which the fund should be retained for accumulation.
The only other consideration necessary to the decision relates to the point of the limited capacity of the Clarke Institution to take and hold property, at the time this legacy should have vested.
1. As regards the question of intention, we do not see that it has any bearing whatever. If it is to be assumed that the testator knew of the limitation upon the capacity of the corporation, he certainly knew also that it already held his own previous gift of $50,000. If therefore the point of limited capacity presented itself to his mind at all, he must have intended to disregard it; perhaps with the expectation that the limit would be enlarged when it became necessary. If he had intended that the former gift should be included in the total amount, he would, in some way, have made that manifest. There are no words in the will which indicate such a purpose.
2. As to the legal effect. There is no difficulty from the want of a party in whom the legacy may vest; as in Zeisweiss v. James, 63 Penn. State, 465. The trustees take the legal title in the first instance; and the cestui que trust is a corporation already in existence. The purposes and object of the trust are distinctly set forth. If its full execution had been found to be impossible by reason of the continued incapacity of the cestui que trust to take the whole fund, it might have become necessary and proper for the court to declare a resulting trust, as to the excess, in favor of the next of kin, to be implied by law. Chamberlain v. Chamberlain, 43 N. Y. 424. But we cannot doubt that the removal, by the Legislature, of such a restriction upon the capacity of the corporation, before the complete execution of the trust, will enable it to receive the whole fund intended for its benefit, although it could not do so at the time the will took effect.
But in the present case, at the time when the will took effect, the whole bequest, together with the $50,000 previously held, did not exceed the amount which the corporation was authorized to hold. It was the subsequent accumulation which gave rise to this question In that aspect of the case the point would seem to be *92whether the direction to the trustees to hold the fund until it should, with the previous property of the corporation, exceed the limit of the corporate capacity, and then pay it over to the corporation, was such a contemplated violation of law as to defeat the whole trust on the ground of illegality. Such a constraction will be avoided, if any other is reasonably open. That there are others has been already suggested. But even if it was intended to evade or disregard the limit of legal capacity, we are not prepared to hold that it would render the bequest invalid, either in whole, or for the excess. Indeed, until the arrival of the time for paying over the fund, it cannot be known that it will exceed the limit of corporate capacity. Not only an enlargement of the limit before that time, but the loss or expenditure of the fund previously acquired would enable the cestui que trust to receive the entire fund contemplated by the testator. Being entitled to that, the incidental increase by delay of payment would follow the principal, subject only to the right of the Commonwealth to enforce the limit of the charter.
Our decree must therefore be that the Clarke Institution is entitled to the entire fund; subject however to the payment of costs of all parties who have been brought in by the trustees to litigate these questions. Decree accordingly.