Court Opinion

ID: 5292563
Source: CourtListenerOpinion
Date Created: 2022-01-08 02:33:41.130353+00
Date Added: 2024-06-11T08:28:57.500281
License: Public Domain

Clark, J. (dissenting).
I am unable to concur in the disposition about to be made of this case.
The plaintiffs are the administrators of the estate of Charles A. Bruff, a former resident of Monroe county, who died on the 7th day of January, 1920. His wife, Ardelia Bruff, died on the 19th day of February, 1918, leaving a last will and testament, which was duly admitted to probate in the Surrogate’s Court of Monroe county.
The Fidelity Trust Company of Rochester was named as executor of said will, and it qualified as such and entered on the discharge of its duties. Subsequently the Fidelity Trust Company was merged with this defendant, the latter assuming the liabilities of the former and proceeding with its business.
Mrs. Sarah L. Willis, who had resided in Rochester many years, was an acquaintance and close friend of both Mr. and Mrs. Charles A. Bruff, and she desired to provide in a measure for their maintenance and support. To that end, on or about -the 20th day of January, 1910, Mrs. Willis entered into an agreement with the Fidelity Trust Company, the predecessor of this defendant, to the effect that the said Willis “ is desirous of creating a trust to provide an income for the support and maintenance of her friends, Charles A. Bruff and Ardelia Bruff, his wife, during their lives.” To carry out that purpose Mrs. Willis transferred to the Fidelity Trust Company of Rochester fifteen $1,000 bonds, in trust, “to use and expend the- net income of said bonds * * * for the support and maintenance of said Charles A, Bruff and Ardelia Bruff *73during their joint lives and thereafter for the support and maintenance of the survivor of them during the life of each such survivor.”
The said agreement further provided that while said Ardelia Bruff was living such income should be paid to her, except that if she and the said Charles A. Bruff should cease to live together as husband and wife, then such entire net income should be divided between and paid over to them, or expended for their benefit in equal parts.
Mr. and Mrs. Bruff lived together as husband and wife until the death of Ardelia Bruff, February 19, 1918, and the income from the trust fund was paid to her while she lived. None of this income was ever used, for the husband was supporting his wife and himself and the fund was kept on deposit in the wife’s name until her death in the Fidelity Trust Company of Rochester, and at the time of her death it amounted to the sum of $6,199.56, made up exclusively of income payments from this trust fund.
It is the contention of plaintiffs that on the death of Mrs. Bruff her husband, as survivor, became entitled to this entire fund, they not having used it, and that plaintiffs, as his administrators, are entitled to receive it as part of his estate.
The defendant, on the other hand, contends that the husband never had any interest in this fund, and that it belongs to the wife’s estate.
It will be observed that while the trust agreement provided that the net income derived from this trust fund was to be paid to the wife during her lifetime, it was for the express purpose of providing for the support and maintenance, not of the wife alone, but for the support and maintenance of both Mr. and Mrs. Bruff during their joint lives.
The intention of the donor must be found in the language of the trust settlement, and in the surrounding circumstances. It is clear that it was her purpose to provide for the support of the Bruffs jointly, or in case they separated, then there was to be separate support for each. The custodian of the fund is of no significance. It might have been a stranger. The right to benefit is the important element in determining where it was intended the title to the fund should vest. She contemplated the income would be spent, not saved. Likewise as between the Bruffs their intent as to the title of the savings depends upon the agreement they reached. They had two funds, one Bruff’s earnings, the other the trust fund applicable to their support. They could have used both, or one or a part of both. They made choice of the trust fund for savings. This must have been by agreement between them. There is no direct evidence on the subject. We must seek it in the surrounding *74circumstances, for it is inconceivable that a husband and wife would not have talked over the policy of diverting this money from the purpose for which it was provided. They were free to act. The trustee had no discretion but to pay it over. Why did they decide to accumulate a fund for emergencies from this source?
Bruff could have insisted on its use and saved his earnings in whole or in part. The other choice was made. It became possible by the use of Bruff’s earnings for their support in lieu of the money provided for that purpose. They might just as well have put Bruff’s money in the bank in a joint account; their interests were identical, and their purposes were to provide for the emergencies of the future.
The fact that Mr. Bruff was fortunate enough and sufficiently thrifty to support himself and wife comfortably without resorting to the trust income which they were saving against a time when perhaps the husband would be unable to provide support for himself and wife, should not be used to penalize him for supporting his family when he had the strength and ability to do so.
If it was not the purpose of the donor to vest the title of the income in Mr. and Mrs. Bruff, as joint owners while they lived together, why was it that she distinctly provided in the agreement that in case of their separation the income was to be separated, each to receive one-half? It seems to me clear that it was the donor’s intention to provide for both her friends jointly while they lived together, and that there was no purpose to separate the income unless they should cease to live together as husband and wife — an event that never transpired.
Defendant urges that because on the 8th day of August, 1907, Sarah L. Willis had by the 8th clause of her will provided that the income from $15,000 of her estate should be paid to Ardelia Bruff during her natural life, and that after her death said income was to be paid to Charles A. Bruff during his fife in case he survived his wife, its theory that the entire income under the trust agreement belonged to the wife is sustained.
I reach a different conclusion. By the will executed in 1907 Mrs. Willis provided that the income from $15,000 was to be paid to Mrs. Bruff during her natural life, but the purpose of said payments was not mentioned, and nothing was said about Mr. Bruff’s having any interest in or benefit from such income so long as his wife lived.
By the trust agreement the donor specifically provided that the income from the trust fund therein referred to should be paid to Mrs. Bruff during her lifetime, but for a specified purpose, to wit, the support and maintenance, not of the wife alone, but *75of her friends Charles A. Bruff and his wife Ardelia Bruff during their joint lives, and thereafter to the survivor of them. Mrs. Willis by the trust agreement enlarged and increased the interest of Mr. Bruff beyond the provisions of the will, for by the terms of the trust agreement he had a present interest in the income when paid for his maintenance and support, and- it was not postponed until his wife’s death, as it was under the terms of the prior will.
In my opinion, therefore, if the terms of the will throw any light at all on the intention of the donor under the terms of the trust agreement, it would be to strengthen the claim of plaintiffs to this fund, even though Mr. Bruff had been able to support himself and wife without resorting to the income that had been paid and accumulated.
Under the terms of the agreement he was entitled to his support out of the income all the time, and if he and his wife were able to live without it, owing to 'his industry and her economy, he may not thereby be deprived of what was jointly his with his wife the moment the income was paid. (Holden v. Strong, 116 N. Y. 471; Rezzemini v. Brooks, 236 id. 184.)
The trust was established for a, specific purpose, viz., the support and maintenance of Charles A. Bruff and Ardelia Bruff, his wife, during their joint lives. During her lifetime "the income was to be paid to the wife, but that clause of the trust agreement must be read in connection with the prior statement, that the income was to be used and expended for the support and maintenance of Mr. and Mrs. Bruff during then joint lives. The mere payment of the income to the wife during her lifetime did not give her title to the fund in view of the fact that there was a positive statement in the agreement that it was to be used for the support and maintenance of her husband as well as herself. She received the money from the trustee, not as her own, but in trust for the joint use of herself and her husband, and the fact that she deposited it in a bank in her own name did not operate to make it an individual instead of a joint fund. (Matter of Klenk, 165 App. Div. 917; affd., 214 N. Y. 715; O’Connor v. Dunnigan, 158 App. Div. 334.)
The beneficiaries, Mr. and Mrs. Bruff, took absolute title to the income (Matter of Smith, 86 Misc. 136; Matter of Stanfield, 135 N. Y. 292), and it being by the terms of the trust agreement designed for the maintenance and support of the beneficiaries during their joint lives, they took as joint tenants, and as one family, for the gift was intended for the joint support of Mr. and Mrs. Bruff. They had one estate in the fund, and the survivor took title to the accumulated fund on his wife’s death. (23 Cyc. 488; 33 C. J. 903; 17 Am. & Eng. Ency. of Law, 649.)
The fact that the trust agreement provided that the income *76should be divided in case the beneficiaries, husband and wife, should separate, justifies the inference that it was the intention of the donor that there should be a joint interest while they lived together.
Mr. Justice Stephens well says in his opinion in the court below (125 Misc. 579): “ The provision for a separate interest in the event of their living séparate, points to a joint interest w;hile they were living together.”
The case of Hamilton v. Drogo (241 N. Y. 401), relied on by defendant, does not support its contention. In that case the trustee had an absolute discretion to distribute income among some of or all of the possible beneficiaries mentioned in the trust agreement. When this discretion was exercised if any payments were made to the judgment debtor, one of the possible beneficiaries, it could be reached under a garnishee execution.
In this case Mr. Bruff was not merely a possible beneficiary but an actual beneficiary. This fund was 'established for the maintenance and support of both Charles A. Bruff and his wife, and not for the support of both, or either one of them, as the trustee might determine.
It is urged by the appellant that the plaintiffs are estopped from claiming any portion of the fund in question because their intestate was a party to the proceedings in the Surrogate’s Court which resulted in the probate of his wife’s will and the final judicial settlement of the accounts of her executors.
While Mr. Bruff knew the terms of the trust agreement, it is established that he never .sought the advice of any counsel and he had no knowledge, so far as the evidence discloses, of the legal effect of the trust agreement, or of his rights thereunder.- There is evidence that he had talked with the trust officer of the Fidelity Trust Company, the trustee, about the instrument but the conversations were with reference to the tune when future income payments would be made, but the trust officer, Mr. Keyes, who had talked with Mr. Bruff, testified that' he did not advise him as to his rights in regard to the accumulated income, or that he was entitled to it as the survivor of his wife, or that he had any interest under the trust agreement except that after his wife’s death the income would be paid to him.' It nowhere appears that he was advised by any lawyer as to his rights in the premises, and the trial court found as a fact that Mr. Bruff was never advised by •the Fidelity Trust Company as to his rights in and to said deposit, and was never advised by said trust company that he was the owner of said deposit, or of any part of it, but on the contrary the court found that said Fidelity Trust Company represented to said Charles A. Bruff that said deposit was the exclusive property of Ardelia Bruff and became in its entirety part of her estate.
*77The court further" found that Mr. Bruff relied on the advice of the said trustee with reference to any interest he had under the trust agreement.
He was clearly not acquainted with the law concerning his rights, if any, to this fund. The trust company in advising him knew, or was bound to know, the law and when it undertook to advise him at all it was its duty to advise him correctly as to his rights in the premises.
Under the circumstances the principle of estoppel will not preclude the court from awarding to the representatives of Charles A. Bruff a fund that belonged to him as the survivor of his wife, for there is no evidence that he ever consented to the absorption of this fund by Ms wife’s estate with knowledge of Ms legal rights in the premises. (Adair v. Brimmer, 74 N. Y. 539; Matter of MacNeil, 165 App. Div. 842; Matter of Ungrich, 115 Misc. 762; 39 Cyc. 414.)
The claim of defendant that this was a spendtMift trust is not borne out by the evidence. WMle there was testimony offered by defendant to the effect that at the time the trust agreement was made there were two judgments docketed m the Monroe county clerk’s office against plaintiffs’ intestate and that thereafter two other judgments were obtained against him, it was clearly established on the trial, and without contradiction, that the largest judgment was recovered some twelve years before the trust agreement was made, and some nmeteen years before Mrs. Bruff died, and over twenty years before the death of her husband.
There was no evidence that any effort had ever been made to collect this judgment, while there was ample evidence, and without contradiction, that an unrecorded discharge of that judgment was seen in Mr. Bruff’s possession before his death.
Because of the lapse of time since tMs first judgment was recovered — more than twenty years before the death of the judgment debtor — and in the absence of proof that there had been some effort made in the meantime to collect it, and there being no proof that payments had been made to apply on the judgment and thus keep it in life, there is a legal presumption that the judgment had been paid and satisfied. (Civ. Prac. Act, § 44.) TMs presumption would confirm the testimony of Mr. Maloney that he had seen an unrecorded discharge of that judgment in Mr. Bruff’s possession before his death.
As to the second judgment, it was obtamed nearly ten years before the trust agreement was made, and was satisfied August 23, 1904 (long before the trust agreement was made), and has been discharged of record. The other two judgments were recovered against Mr. Bruff after the trust agreement was made, and both have been discharged of record by one of the administrators of *78his estate to whom they had been assigned the same day they were discharged.
The evidence does not warrant the charge that Charles A. Bruff was a spendthrift, or that the trust agreement was intended to be a spendthrift trust.
From all the evidence it is my opinion that it was the intention of the donor that the beneficiaries named by her in the trust agreement should take the net income from the trust securities as joint tenants, and that the plaintiffs, as administrators of the estate of the surviving beneficiary, are not estopped from maintaining this action by reason of anything that he did or omitted to do in the premises.
The judgment should be affirmed, with costs.