Court Opinion

ID: 5481180
Source: CourtListenerOpinion
Date Created: 2022-01-10 01:56:02.670023+00
Date Added: 2024-06-11T08:33:36.934252
License: Public Domain

Desmond, J.
(dissenting). One question only is before us: is the income of the two trusts hereafter described to be paid, by the terms of the indentures and under the existing facts, to the father, or to the mother, or is such income to be accumulated for the benefit of the two infant beneficiaries? Despite much discussion in the record and briefs, about a separation agreement, and past litigations between the parties in this State and Florida, we are not here construing or applying that separation agreement, nor are we determining questions of custody or support, nor are we passing on the effect of, or bound by, the Florida judgment hereafter mentioned. The parties agree, on this appeal, that the case is, in its present form, a proceeding to construe two inter vivos trusts, and nothing more.
*139Petitioner Angela Stevenson Morgan and respondent Lewis McComb Herzog, Jr., were married in 1928, had two children born, respectively, in 1930 and 1932, and then, in 1933, signed a separation agreement. By that agreement the father agreed to pay the mother $2,500 per year for the support and maintenance of each child, the income from a trust created by the father for the benefit of that child to be, to the extent of such income, in full discharge of that support obligation. In another paragraph of the separation agreement it was recited that the father had set up a $125,000 trust fund, with respondent United States Trust Company as trustee, for each child, the income from the trusts to be received, as directed in the trust indentures, in discharge of the father’s liabilities to his wife for the support of the children. Elsewhere in the separation agreement the mother accepted the foregoing arrangements in lieu of any other provision for the support of the children, and agreed to care for the children out of the income so provided for them, there being another direction as to payment of trust income to the father, in the event the mother should fail to pay any bills incurred by her for the children’s needs. Finally, the mother was, by the separation agreement, given the custody of both children, and it was agreed that she was to be appointed guardian of the person of the children, the United States Trust Company to be the guardian of their property (such guardianship appointments were so made, and are still in effect). The father was, by the separation agreement, to have certain rights as to visiting the children, and was to have their custody during summer and Easter school vacation periods. In that part of the separation agreement it was stipulated that, when the children were thus with their father during their school holidays, the father’s obligation to pay the mother for the children’s maintenance should cease (except for rent) and that during such periods the trust income should go to the father. However, no such provisions appear in either trust.
The trust indenture for the son’s benefit (that for the daughter is identical) contains a recital that under the separation agreement above summarized, the father had agreed to make certain payments to his wife for his son’s support, and that the father is “ desirous of securing the said payments ” by the creation of this trust fund. Having thus made it clear *140that the sole purpose of this trust was to guarantee the agreed annual payment, by father to mother, of $2,500 per year to be used by her for the boy’s care, the trust document gave the following directions to the trustee: “ to invest and reinvest the same, to collect and receive the income thereof and after the payment of all necessary expenses, to pay the net income thereof to the extent of Two thousand five hundred (2,500) Dollars per annum during the minority of the said Lewis McComb Herzog, Jr. to Angela Stevenson Herzog in equal monthly instalments to be applied by her as quardian of the person for the maintenance, education and support of said Lewis McComb Herzog, Jr.; provided, however, that if the Grantor shall at any time be called upon to pay and discharge, any debt or liability created or incurred by said Angela Stevenson Herzog for account of the said Lewis McComb Herzog, Jr., the Trustee shall out of said net income of Two thousand five hundred (2,500) Dollars reimburse the Grantor for any payments so made as provided in said separation agreement, and so accumulate the balance of the said income until said Lewis McComb Herzog, Jr. attains the age of twenty-one years, and upon that event to pay over the said accumulated income to said Lewis McComb Herzog, Jr., provided, however, that there shall be paid by the Trustee out of said accumulated or surplus income, when sufficient for the purpose, all bills for school tuition, board and extras incurred in the education of the said Lewis McComb Herzog, Jr., which said bills shall be rendered to and paid by the Trustee and be subject to its supervision and control.”
Other language in the indenture provides for the payment, to the son after he shall attain his majority, of the whole net income during his life, and for the disposition of the remainder, after the son’s death. The trust deed nowhere contains any direction for the payment of any of the income to the father (except when and if the mother fails to pay debts she has incurred on behalf of the infant, a situation' which has not arisen). In other words, the father made an absolute transfer, to the trustee, of $125,000, with the command that the income be paid by the trustee to the mother, as guardian of the son, for the latter’s support. By no conceivable method of construction or interpretation could such language be made to mean that *141the father himself, not the mother, was to have the trust income. Nevertheless, the father now insists that such is his legal right, because of occurrences since the creation of the trusts.
In 1945, while the two children were visiting their father in Florida whither he had moved his residence in 1941 (the father and mother have been divorced and both are remarried), the father brought a custody proceeding in a Florida court, in which the mother appeared, and which resulted, in 1947, in a decree awarding the custody of the children to the father for nine and one-half months each year, the mother to have them during the summer. The Florida decree ordered also that the mother pay to the father, so much of the trust income as should be proportionate to the time he has the children. The trustee was not a party to that Florida litigation and its directions as to turning over the income could not, of course, have any effect on the trustee, or on the trusts. The father, however, called the trustee’s attention to the Florida judgment, and the trustee refused thereafter to pay the income to either parent. The present proceeding was then begun by the mother. The courts below have made, and affirmed, an order which, so far as is here material, adjudges that it is the intent and meaning of the trusts that, during the minority of each child, the income derived from that child’s trust, to the extent of $2,500 per year, shall be paid to the petitioner mother, as guardian of the person of that child, but only " during and in proportion to such time of each year as petitioner actually has custody of said infant and to apply said sum for the maintenance, support and education of said infant, and, to the extent that it exceeds the amount so paid to petitioner, the same to be accumulated and applied by the trustee pursuant to the * * * trust indenture ”, such accumulations to be paid to each infant, on reaching the age of twenty-one. Both father and mother have appealed therefrom to this court.
The courts below, called upon to construe these trusts, each of which directed that the trust income up to $2,500 per year be paid to the mother as guardian, with no direction of any sort that such income be paid to the father (except in the event of default of the mother in paying the children’s bills), and faced with the fact that the child’s custody, for nine and one-half months each year, is now with the father, have, by the *142order here appealed from, held that, under such circumstances, the indentures give the mother the right to no more than two and one-half twelfths of the income, and give the father no corresponding right to the balance of income, which balance must, therefore, be accumulated for the children. We do not see how such an interpretation of the trusts could be held, as matter of law, to be erroneous.
To order payment of any part of the income to the father would be to write in something not found, expressly or impliedly in the deeds, and something the parties themselves, therefore, never intended. The language of the indentures, as to disposition of income, is clear and complete. So much for the father’s appeal.
The mother’s claim to the whole of the income is likewise untenable. The payments to her were for the children’s, not for her own, benefit, and she is accordingly entitled to those payments only when, and to the extent, that she is in a position to use the money for the benefit of the children (see Chase v. Chase, 84 Mass. 101, 104). From all this it follows that, since the father is entitled to none of the income, and the mother to only a part thereof, the balance should be accumulated for the children, just as other surplus income was so to be accumulated, by the express language of the .trusts.
The fact that the mother, in the years before the Florida litigation, paid over to the father part of the trust income, after she had received it from the trustee, could not operate to change, or add to, the plain language of the trust deeds.
It should be noted that this is not one of those cases, where, because of dire necessities of children, the courts may direct application of income to relieve those necessities, despite or beyond the provisions of trust instruments (see Matter of Bostwick, 4 Johns. Ch. 100; Personal Property Law, § 17).
The order should be affirmed, with costs to the third-party respondent (special guardian), and disbursements to the petitioner (mother) and respondent (father), payable out of the trust funds.
Conway, Fuld and Froessel, JJ., concur with Dye, J.; Desmond, J., dissents in opinion in which Loughran, Ch. J., and Lewis, J., concur.
Ordered accordingly.