Court Opinion

ID: 5245391
Source: CourtListenerOpinion
Date Created: 2022-01-06 17:57:29.78364+00
Date Added: 2024-06-11T08:27:51.586848
License: Public Domain

Scott, J.:
Jason Rogers died on August 25, 1868. He left a will, which was duly admitted to probate on September 11, 1868, whereby he undertook to dispose of his property for the benefit of his three children, providing an annuity for his wife. His wife died in 1891, and two-thirds of his estate have been distributed under the terms of his will. The present controversy has to do only with the share of one child, who died in 1913, the other children having predeceased her.
The estate has been the subject of much litigation, and a number of accountings have been had in the Surrogate’s Court and in the Supreme Court. How, nearly fifty years after the death of the testator and the probate of his will, it has been discovered for the first time that, as the respondents say, and as the court at Special Term has found, the whole scheme of the will was invalid and unlawful because it violates the statute against perpetuities.
The scheme of the will in brief was as follows: The widow was given an annuity which was charged upon the income of the estate. Certain property, consisting of stocks, bonds and mortgages, was given outright to a son, Thomas. For each of testator’s daughters, Mary and Flora, the testator created a trust fund consisting of certain specified stocks and bonds. As to each of these trusts he provided that a part only of the income *504should be paid to the beneficiary, until she became of age or married, after which the whole income was to be paid to her for life. At her death the trust estate was directed to be divided equally between her children, and if she died without issue, the said trust estate was to fall into and be a part of the residue of the.estate.
The residue of the estate was given to his executors as trustees, who were to pay out of the income the annuity left to his widow. To the son, Thomas, was to be paid the whole of the income from, his share of said residuary estate “ so long as his mother, the said Mary Ann Rogers, shall live, and until my youngest daughter shall arrive at the age of twenty-one years or shall marry,” when the equal one-third part of the residuary estate was to he paid to him.
As to the daughters it was provided that as each arrived at the age of twenty-one years, or married, she was to be paid during her life the whole income from the share of the estate held, for her. When she died her share of the residuary estate was to be paid to her children, and “ in case of the decease of either or any of my said children without leaving lawful issue, then the share of such deceased child or children shall fall into and be a part of the residue of my estate, and the share of the survivor or survivors or of the lawful issue of my said children be proportionately increased thereby.”
The supposed invalidity in the scheme of the will lies in this, as it is said, that under a possible contingency, which has not, however, happened, there might have been a suspension of the absolute ownership of one of the two trust funds created for the benefit of the two daughters for more than two lives. Under no contingency could there be such a suspension as to both of the trust funds, and it could not be ascertained until one of the daughters died as to which fund such suspension would take place.
The court at Special Term correctly held, as I conceive, that the provision for the annuity to the testator’s widow chargeable upon, the income did not suspend the power of alienation of the residuary estate during the lifetime of .the widow, and had no effect upon the estates created by the will, for the reason that if the children of the testator had all predeceased his *505widow the value of her annuity could have been ascertained and paid over and the remainder distributed free from any trust. (People’s Trust Co. v. Flynn, 188 N. Y. 385; Bailey v. Buffalo Loan, Trust & Safe Deposit Co., 151 App. Div. 166,171; Buchanan v. Little, 154 N. Y. 147.) Speaking for myself alone it seems to me that it is evident that the provision that the share of Thomas should be held by the trustees during the lifetime of his mother was merely intended to insure the payment of the annuity, and that if nothing else stood in the way of the payment of the share over to Thomas, he having arrived at the age of twenty-one years before his father died, there would have been no obstacle, under the authorities above cited, to the immediate payment over to him. There was, however, another limitation upon the payment over to Thomas of his share of the residuary estate, and that was that it should not be so paid until the testator’s youngest daughter (Flora) should arrive at the age of twenty-one years or marry.
The significant feature of this case, which differentiates it from many others which are cited to establish its invalidity, is that upon this construction the only limitations upon the ultimate vesting of any part of the estate are the lives of the testator’s daughters, of whom he left only two so that notwithstanding the cross-remainders, the absolute ownership of no part of the estate could by any •combination of circumstances be postponed longer than for two lives. If he had left more than two daughters, with life estates to each and cross-remainders, a different question would have been presented. (Simpson v. Trust Co. of America, 129 App. Div. 200; affd., sub nom. Simpson v. Simpson, 197 N. Y. 586.)
But apart from the foregoing suggestion, which is that of the writer alone, we are agreed that, even if it be considered that Thomas’ right to possession of his share of the residuary estate is limited by the fife, of his mother, as well as by the life, non-age or spinsterhood of his sister, the testator’s youngest daughter, still the will was not necessarily invalid. The case supposed by the Special Term was that both sisters should die without issue, during the lifetime of their mother. Assuming that Flora were the first to die, the court said: “ Then had *506Mary Rogers in turn predeceased her mother and brother, the half of Flora’s trust fund held in trust for Mary during her life would again in turn be held in trust for Thomas during the life of his mother. * * * The absolute ownership of the personal property would thus be suspended during three lives.” This argument assumes that if both sisters died in succession before Thomas died, the sub-share of the one first dying, which at her death went into the residuary to swell the share of the second daughter, would upon her death again go into the residuary to be held under the trust for Thomas. Thus if Flora died first, her share would go into the residuary estate, one-half for the benefit of Mary to be held for her life, and one-half for the benefit of Thomas to be paid to him when his mother died. When Mary subsequently died the share originally left to her by the will would go into the residuary to be used for the benefit of Thomas until his mother died. As to this share the postponement of Thomas’ right to absolute possession would be limited by only two lives, to wit, Mary’s and the mother’s. As to the one-sixth of the estate which came into the residuary for Mary’s benefit when Flora died, the will does not in terms provide that it shall again fall into the residue. The language of the will both in the sixth and eighteenth' clauses will be abundantly satisfied if the provisions that upon the death of a child the share held in trust for her shall fall into the residuary estate be limited to the shares first provided for by the will, and not extended to the sub-shares. This presents the same question which was involved in Chastain v. Tilford (138 App. Div. 746; affd., sub nom. Chastain v. Dickinson, 201 N. Y. 538). The language of the will in that case was substantially like the language in this to the effect that upon the death of a life beneficiary the principal held in trust for him or her should again become a part of the residuary estate. The question was whether this applied to a sub-share resulting from the death in succession of two life beneficiaries. We said: “The will makes no disposition of this sub-share upon the termination of the second life interest. The will by its terms provides only for a division and distribution of the original share given for the life of each of the children to whom life interests are given. It is not expressly provided, and we are not *507called upon to so construe the will, that the sub-shares arising upon the termination of one life estate shall be added to and become a part of the principal share given by the will to the other life beneficiaries. (Schey v. Schey, 194 N. Y. 368; Vanderpoel v. Loew, 112 id. 167.) * * * So long as the general scheme can be carried out, the fact that it may be found in the end that as to a minor portion of her estate the testatrix has died intestate, does not materially interfere with her general plan.” These words apply with precision to the case we now have before us. The general scheme of the testator was that if two of his children died without issue the beneficial enjoyment of his whole estate should pass to his surviving child, in trust if it was a daughter, in possession if a son. We certainly are not to convict him of having intentionally created an unlawful suspension of the absolute ownership of any portion of his estate. If we construe the will as it is written, without attempting to carry it further than the testator himself carried it, the result might have been (but was not) that on the death in succession of both of his daughters the sub-share consisting of one-sixth of the estate would pass directly to Thomas, instead of being held in trust for him during his mother’s lifetime. There is nothing contrary to this view in Simpson v. Trust Co. of America (supra). The will considered in that case was quite different from the one we have to consider here, and could have been saved only by departing from what was deemed to be the clear intention of the testator.
Finally, if neither of the foregoing constructions he adopted, still we think that the validity of the will should be sustained upon the authority of Purdy v. Hayt (92 N. Y. 446), which is clearly sufficient for the purpose if it be accepted as an accurate statement of the law, and I am aware of no reason why it should not be. The Special Term refused to follow it because (1) the estates dealt with there were ‘ life estates, whereas the estates dealt with here are trust estates, and (2) because that case dealt with devises of real estate while this deals with trusts, partly, at least, composed of personalty. I concur with Hr. Justice Dowling that neither of these reasons is sufficient. But neither do I think that the reason which leads him to distinguish Purdy v. Hayt is sufficient, which is that *508the Court of Appeals has never since reiterated the rule it then laid down. The opinion was written by a very careful and experienced judge and was concurred in by all of his associates, and it has never been overruled or repudiated, perhaps because the precise question has not since been presented to that court, as it is now presented to us. I do not understand that considered opinions of the Court of Appeals lose their authority by age alone, and are not to be followed unless' that court from time to time takes occasion to reiterate them. Indeed, the Court of Appeals has, in effect, applied the rule of Purdy v. Hayt (but without citing it) when it affirmed, on the opinion below, the decision of the Appellate Division of the Fourth Department in Church v. Wilson (152 App. Div. 844; affd., 209 N. Y. 553). If we place ourselves in imagination at the point from which, as the respondents contend, we must consider the question of the validity of the will, that is, at the date of Jason Rogers’ death, we should find practically the same situation which was considered by the Court of Appeals in Purdy v. Hayt. Identical trust provisions were made for the daughters, Mary and Flora. Under a possible combination of circumstances to occur in the future, one of these trusts might, as the respondents claim, but not necessarily would, extend beyond two lives and thus be void. Whether either trust would offend against the statute, and if so which, could not be determined until one of the sisters died, but must be then determined, i. e., within the limit of a single life. Indeed, the case of Purdy v. Hayt was stronger against the validity of the trust than the present, for in that case there was a certainty that one of two trust terms would extend beyond two lives, while here it was uncertain that either would so extend, and in fact neither has. Unless we are to overrule and ignore Purdy v. Hayt for no better reason than that it has never been reaffirmed, I think we should apply its rule to the present case.
We are also of opinion that while the accumulation of income on Flora’s share during her minority and adding it to the principal of the trust fund was undoubtedly unlawful, yet since this disposition of the surplus income has been acquiesced in by all. parties in interest, including Flora herself, who became of age upwards of thirty years ago, and has been confirmed and *509approved by a great number of surrogate’s decrees, and by one judgment of the Supreme Court, we should not now, at this late day, direct a different disposition of it. By thus acquiescing, Flora, in effect, voluntarily increased the corpus of the trust for her benefit. She knew, or must be held to have known, that the accumulation was unlawful and that she was entitled to receive it when she came of age, because it had been distinctly so declared by the Appellate Division in Matter of Rogers (22 App. Div. 428). I know of no reason why a person for whose benefit a trust has been created cannot enhance the corpus of the trust estate by voluntary contributions to it. It should be deemed a part of the trust estate and distributed accordingly.
But beyond all this I am of the opinion that the surrogate’s decrees and the judgment of the Supreme Court are conclusive and res adjudicata as to all surplus income which had accumulated before they were made, and none has been retained since the Supreme Court judgment was issued. The rule in such cases is that decrees and judgments of that character are final and conclusive as to the amounts involved therein, and if the trustees had paid out moneys upon the faith of them there can be no doubt that they would have been protected. Mr. Justice Dowling is of the opinion, however, that because the trustees did not pay out the accumulations, but still held them as a part of the trust estate, they can be required to separate them from the trust estate and pay them over as a part of the estate of Flora E. Rogers. I do not understand this to be in accordance with the rule. In Matter cf Hoyt (160 N. Y. 601) the life tenant objected to the account of trustees because they had charged against income alone the premium upon certain securities which they had bought above par, taking a certain amount each year out of income and crediting it to principal. There had been several annual accountings upon which this fact had been disclosed and decrees entered thereon. The whole trust fund remained in the hands of the trustees, just as the trust fund does in this case, and it would have been a mere matter of bookkeeping to charge the sums which the Court of Appeals held had been illegally paid out of income, back to principal and credit them to income, which is what the Special Term has *510directed to be done here. The Court of Appeals, however, did not so direct. It said: “The decrees in the former accountings are binding upon the daughter of the testator as to the amounts therein involved, and will not be affected by our decision herein, but this does not prevent her from raising the question now as to the distribution of the money in the hands of the trustees.” This court in Sullivan v. McCann (124 App. Div. 132), referring to a former decision in Kirk v. McCann (117 id. 56), said: “We further held, however, that with respect to any surplus income received by the trustees after the accounting under the decrees of the surrogate, that these decrees were not adjudications.” To the same effect are Staples v. Mead (152 App. Div. 751); Hill v. Guaranty Trust Co. (163 id. 380). As to the remark of the Court of Appeals in Bowditch v. Ayrault (138 N. Y. 222, 231), that the former decrees of the Surrogate’s Court “form no bar, however, to the proper decision of the question now presented as to the distribution of thq property now in the hands of the trustee,” it is apparent from a reading of the case that what the court referred to was a sum of money which had been received since the last prior accounting, and as to the disposition of which the direction of the court was sought.
It follows that the judgment appealed from should be modified in accordance with the views herein expressed and as modified affirmed, with costs payable out of the estate to all parties who have appeared and filed briefs.
Smith and Davis, JJ., concurred; Dowling and Laughlin, JJ., dissented.