Court Opinion

ID: 5366182
Source: CourtListenerOpinion
Date Created: 2022-01-08 07:48:27.041538+00
Date Added: 2024-06-11T08:29:57.140677
License: Public Domain

Martin, P. J.
John Lynn died a resident of the State and county of New York, leaving a last will and testament which provided for a trust of $100,000, the income payable to his son, Edgar Allan Lynn, during his life, with power to dispose of the principal by his last will and testament. Edgar Allan Lynn died, leaving a will which has been duly admitted to probate in the Surrogate’s Court of Kings County. This will makes no mention of the power of appointment granted to him by the will of his father.
By his last will and testament, Edgar Allan Lynn bequeathed to his sister,. Ethel Lynn McCarthy, a legacy of $75,000, and to a friend, Eric Victor Smaje, a similar legacy of $75,000. He then directed his executor to pay to his friend, Mariano Rodrigues, the sum of forty dollars per week out of funds remaining in his estate after the bequests of $75,000 each had been paid to his sister and to Eric Victor Smaje. In the event that the funds remaining after payment of the legacies to his sister and Smaje were insufficient to pay forty dollars a week, then it was directed that a fund should be set up of such sum as might remain over and above the preferred pecuniary bequests and the income should *515be paid to Rodrigues, and upon the death of Rodrigues the principal of the fund was to become part of the residuary estate. The residuary estate was given to the testator’s sister and his friend Smaje in equal shares. The personal estate of Edgar Allen Lynn amounted to approximately $118,000, an amount insufficient to pay in full the preferred pecuniary legacies amounting to $150,000.
In the proceeding for the settlement of the account of the trustees under the will of John Lynn, the Surrogate’s Court has held that the power of appointment was effectively exercised by Edgar Allan Lynn in the residuary clause of his will and that no part of the $100,000 over which he had the power of appointment was available to the general legacies. With this result we are unable to agree.
Section 18 of the Personal Property Law reads as follows: “ Personal property embraced in a power to bequeath, passes by a will or testament purporting to pass all the personal property of the testator; unless the intent, that the will or testament shall not operate as an execution of the power, appears therein either expressly or by necessary implication.”
In England there is a similar provision (Wills Act, 1837 [7 Will. 4 & 1 Viet. chap. 26], § 27). In 25 Halsbury’s Laws of England ([2d ed.] p. 545) it is said: “ The provision applies only to general powers, not to limited powers; and its language confines its operation to property described in a general manner, and does not include gifts of particular property. General pecuniary legacies are bequests of personal property described in a general manner, and, if no fund is indicated out of which they are to be paid, money over which the testator had a general power of appointment is made available by the provision above referred to to the extent to which the testator’s own property is insufficient for this purpose. A gift of ‘ stocks, shares, and securities,’ or of ‘ all stocks, shares and securities which I possess or to which I am entitled,’ is within the provision. So also is á gift of ‘ all my shares ’ in a certain undertaking. A gift of ‘ my real estate ’ or ‘ my personal estate ’ is not the less general because the testator uses the word ‘ my.’ So, too, the appointment of á residuary legatee, without any words of gift, is equivalent to a general residuary bequest and consequently has the same operation as such a bequest under the above provision; and the appointment of an executor, coupled with the gift of pecuniary legacies, operates as an appointment of a fund the subject of a general power of appointment to the extent of the amount required for the payment of the legacies, and also of the debts which must be discharged before the legacies can be paid; and a direction for the payment of the debts, without more, is *516also sufficient, but it has not yet been decided that an appointment of an executor, without more, would make the fund assets for all purposes.”
Ordinarily the intention of a testator to dispose of all of his property may be evidenced by a residuary clause. There is language in some of the cases which gives the impression that property embraced within a power of appointment passes under the residuary clause of the donee’s will, unless the will, either in express terms or by necessary implication, discloses a different intention on the part of the testator. There is, however, no definite rule. In Lockwood v. Mildeberger (159 N. Y. 181) it appeared that the testatrix had both a private estate and a power of appointment, and the question involved was whether the power of appointment had been exercised. The court said (at p. 186): “ It was held by this court in Hutton v. Benkard (92 N. Y. 295) that the rule laid down in section 126  (supra), touching the execution by will of a power as to real estate, should be applied to personal estate also, and it follows, therefore, that it is the law of this State that by the residuary clause, by which Mrs. Mildeberger gave to her husband all the rest, residue and remainder of her estate, she executed the power of appointment given to her by her grandmother’s will, unless it appears expressly, or by necessary implication from the language of the will, that it was not her intent that the will should operate as an execution of the power. * * *.”
Upon reference to Hutton v. Benkard (92 N. Y. 295), which Chief Judge Parker cited as authority for the conclusion expressed, it will be found that that case holds that where it appears from the terms of a will taken as a whole and considered in the light of surrounding circumstances that it was the intention of the testator, in the disposition made by him, to execute the power of appointment, such intention will have effect although the power is not referred to in express words.
As we read section 18 of the Personal Property Law, there is nothing which requires an interpretation that property under power of appointment passes only in accordance with the provisions of a residuary clause. In 91 A. L. R. 450 (2) it is said: “ A power of appointment exercisable under a statute by means of a general or residuary devise or bequest has been held to be exercised by the entire will, and not merely by the residuary clause, where the instrument contains both general legacies and a residuary clause.” Nolan’s Trust Estate (251 Penn. St. 309; 96 A. 714); Blackburne’s Estate (290 Penn. St. 55; 138 A. 538); Moran v. Cornell *517(49 R. I. 308; 142 A. 605), and other cases cited, will be found in support of this statement.
In Merwin v. Safe Deposit & Trust Co. of Baltimore (171 Md. 346; 188 A. 803) a factual situation similar to that now before us was considered by the court. The testatrix had a personal estate and a power of appointment. Her will made no mention of the power of appointment. Her own estate was insufficient to pay the pecuniary legacies in full. In applying the statute and holding that the pecuniary bequests were entitled to payment from the trust property, the court said, in part:
“ * * * There is in this will no single provision under which all the property of the testatrix is intended to pass. The will as a whole operates upon the entire estate, but that is not the effect of any one of its several devises or bequests. The statute would have a very limited availability if it were designed to apply only to a ‘ devise and bequest ’ which by itself purported ‘ to be of all real and personal property belonging to the testator/ and to be inapplicable to a will which fully disposed of the estate but only as the combined results of distinct provisions. In our opinion the statute does not have such a restricted meaning and purpose. According to our interpretation, it applies to wills containing devises or bequests which, considered together, purport to exhaust the testator’s property. * * *.
“ It would not be consistent with the design of the statute to give the residuary clause alone the benefit of the presumed intention of the testatrix to exercise her power to make testamentary disposition of the trust estate of which she was the beneficiary during her life. By the residuary clause the testatrix did not devise and bequeath all of her property, but only the ’ portion remaining after the primary legacies were paid. The complete disposition of her estate was accomplished by the combination of pecuniary and residuary bequests.”
It is urged that the Maryland statute is to be distinguished from the statute in this State because the particular section of the New York statute is introduced as follows: “ Power to bequeath executed by general provision in will,” and it is contended that the only general provision of a will is the residuary provision, and the Legislature must have had this in mind when the section was drawn. We are of the opinion that a reading of section 18 in its entirety does not warrant the placing of emphasis on the words “ general provision.” What is intended is that property subject to power of appointment shall pass under the general language of a will purporting to dispose of all of the property of the testator; otherwise, the broad, beneficial effect of the statute would be *518defeated. It is not unusual for an individual, in making Ms will, to first provide for those in whom he is particularly interested, after which he may be willing to have what is left pass to charity under a residuary clause. Adoption of the rule urged by the respondents here could readily occasion hardship and injustice.
It was stipulated on the oral argument in tMs court that the estate of Edgar Allan Lynn, apart from the funds over wMch he had power of disposition, amounted to $118,000 when he executed the will. The testator must be deemed to have known this, as the will has been admitted to probate, and knowledge of the approximate amount and extent of one’s property is essential for testamentary capacity. Light can be tMown upon a testator’s intention from all the surrounding facts and circumstances as well as from the language of the will. (See Matter of Neil, 238 N. Y. 138, at p. 140.) Inasmuch as Ms personal estate was wholly insufficient to pay even the two preferred legacies (not to speak of the additional legacy that was to produce forty dollars a week), the testator must have intended to make available for his preferred and general legatees the property over wMch he has power of appointment, to the extent to wMch Ms own property was insufficient to carry out the expressed intention of Ms will. Otherwise, Ms preferred legacies and the general legacy would be empty gestures and known to be such by the testator at the time he made Ms will. The court should not adopt a construction wMch would frustrate the testator’s intention and make futile the fulfillment of such intention.
We are of opinion that the better rule is that when the power of appointment is deemed exercised tMough the application of the statute, the testator must be taken as exercising Ms general power to the extent to which the fund subject to it is required to make all lawful provisions of the will effective. (Matter of Seabrook [Gray v. Baddeley], [1911] 1 Ch. 151.)
The decree appealed from should be modified, in accordance with tMs opinion, and as so modified affirmed, with costs to the appellant payable out of the estate.
The order denying the motion to vacate said decree and for a new trial on the ground of newly-discovered evidence should be affirmed.
Untermyer and Dore, JJ., concur; Cohn and Callahan, JJ., dissent.