Summary
In Farmers' Loan Trust Co. v. Ferris, 67 App. Div. 1, where the New York court seems to have been applying South Carolina law, it said that the Blount case should be limited to its peculiar facts.
Summary of this case from Champagne v. FortinOpinion
December Term, 1901.
John R. Abney, for the appellant Amelia J. Emanuel.
M. Cleiland Milnor, for the appellant Henry S. Holmes, as executor of James S. Gibbes, Jr. John J. Crawford, for the appellant Henry S. Holmes, as administrator of James Gibbes Haile.
James P.R. Bryan, for the appellants Charles H. Gibbes and Arthur B.M. Gibbes.
Charles Stewart Davison, for the appellants James S. Wilson and Henry S. Holmes, as trustee of said Wilson.
Antonio Knauth, for the respondents H. Stuart Gibbes and others.
Herbert B. Turner, for the plaintiff, respondent.
William D. Guthrie, for the respondents Charles H. Simonton and J. Adger Smythe.
This action was commenced on the 27th day of May, 1899, by the Farmers' Loan and Trust Company for a judicial settlement of its accounts as trustee under the will of James S. Gibbes, Sr., and to obtain a construction of certain provisions of the will. The testator was a resident of Charleston, S.C., and died in that city on the 26th day of April, 1888. His will with codicils annexed was duly admitted to probate by the Probate Court of the county of Charleston on the 1st day of May, 1888. At the time of making the will, the testator had a wife, two sons, James S. and George E. and a grandson, James Gibbes Haile. The testator left him surviving his widow and his son James S. and said grandson, as his only heirs at law and next of kin, the son George E. having previously died. The widow died on the 2d day of May, 1888. The entire estate was of the value of about $600,000.
By the 7th section of the will the executors were directed to forthwith transfer and deliver unto the plaintiff as trustee securities amounting at their face value to the sum of $100,000 in trust, to pay the income thereof to the testator's son James S. during his life. The 8th and 9th sections respectively contained similar directions with reference to the delivery of a like amount to plaintiff as trustee to pay the income of $100,000 to testator's son George E. during his life, and of another $100,000 to testator's said grandson. Upon the death of either of the sons or grandson leaving issue him surviving, such issue was to take the $100,000 principal. Upon the death of one of these three specified descendants of the testator without issue, the survivors were to take in equal shares the income of the fund set apart for his benefit, and upon the death of two, the survivor was to take the entire income. In the event of the death of any of them without issue, the principal, of which he received the income, was to go to the issue of the survivors per stirpes in equal shares; but in case of the death of the sons and grandson of the testator without issue, the entire principal fund of $300,000 was to be held by the plaintiff and applied as provided in the 29th section of the will.
After making certain bequests and leaving part of his estate in trust for the benefit of his wife, the testator provided in the 23d section of his will that the executors should transfer and deliver the rest, residue and remainder of his estate to the plaintiff as trustee to hold and pay the income thereof to each of his said children and grandchild during their lives respectively, and the income and principal thereof to be held in all other respects subject to the uses, trusts, purposes and limitations prescribed in said 7th, 8th and 9th clauses of the will respectively.
The testator's surviving son and grandson both died without issue prior to the commencement of this action. We must, therefore, look to the 29th clause of the will to ascertain who are entitled to share in this residue of the estate, as that is the question presented.
At the outset the jurisdiction of the courts of this State over the subject-matter of the litigation is challenged. It appears that all the parties have been personally served or have voluntarily appeared, and the appellant Amelia J. Emanuel is the only one who raises the jurisdictional question. She has appeared generally and answered. Her interest is as a beneficiary for life of one-third of the income of the residue after the payment of certain legacies. As already stated, the trustee is a domestic corporation and the fund is within this State. The trustee received the fund by virtue of the will of the testator, although it was delivered under an order of the court made in an action brought by the executors in South Carolina for instructions with reference to their turning the funds over to plaintiff as directed in the will. The order was in accordance with the clause of the will and contained no additional condition. The courts of South Carolina cannot obtain jurisdiction over the plaintiff except by its voluntary appearance. The trust fund and its administration being here, the trustee being a corporation of this State, and the court having obtained jurisdiction of the parties, it may properly exercise jurisdiction and direct how the fund shall be distributed, and its decree, when complied with by the plaintiff, will relieve it from further liability. ( Cross v. U.S.T. Co., 131 N.Y. 330.)
The 1st, 2d 5th and 6th subdivisions of section 29 of the will provided for the payment from said residue of certain legacies which have been paid and are not in controversy. The 3d subdivision directed that $5,000 of said residue should go to Dr. Henry P. Gibbes, a son of testator's uncle Reeves Gibbes, and the 4th that $50,000 should go to John Haile, testator's son-in-law.
The first question relating to the construction of the will arises concerning these legacies. These legatees survived the testator, but died before the happening of the contingency upon which they were to take under the 29th section of the will. It is contended that these legacies, therefore, lapsed; but the administrators of the legatees are parties to the action, and their claim is that the legatees took a contingent legacy upon the death of the testator which passed to them on the death of the legatees. It will be observed that neither at the time of the death of the testator nor at any time since was there any one in being as the issue of his children or his grandson in whom this estate vested under either the 7th, 8th, 9th or 22d sections of the will. We are, therefore, of opinion that the learned trial justice was right in holding that upon the death of the testator a contingent estate vested in the legatees, and inasmuch as no issue was born to either of testator's sons or his grandson it never became divested. ( Clark v. Cammann, 160 N.Y. 315.)
The second question of construction presented by the trustee is as to the validity of the 7th subdivision of the 29th section of the will as subsequently modified or superseded by section 4 of a codicil duly made on the 12th day of May, 1885. This 7th subdivision is as follows:
"To Charles O. Witte, Henry A.M. Smith and such person as may at the time be Mayor of the City of Charleston, seventy-five thousand dollars, to have and to hold the same in trust, for the erection and endowment of an Art Gallery and Ladies' Library in Charleston, and I empower said trustees to provide as they see fit and practicable for the future regulation and perpetuation of the same. Should any arrangement be hereafter made during my lifetime, whereby a building shall be erected on the lot on the northeast corner of Meeting and George Streets by the Art Union Association for its purposes, then I direct the said seventy-five thousand dollars to be by said trustees transferred to said Association under such agreement, for its future use and application to the purposes aforesaid as shall be sufficient and suitable."
The 4th subdivision of the codicil is in the following language: "I strike out and annul subdivision seven of section twenty-nine of my said will, with relation to the Art Union, and direct in lieu thereof as follows, viz.: In the event of the happening of the contingency referred to in said section, to wit: That there should be no descendant of mine, within the period limited by law, to take my property, then I give and bequeath the sum of one hundred thousand dollars to the Mayor of the City of Charleston, at the happening of such contingency (and his successors in office) and Gabriel E. Manigault, Charles E. Simonton and F.W. Dawson to have and to hold the same in trust for the erection or purchase of a suitable building to be used as a hall or halls for the exhibition of paintings and for necessary rooms for students in the fine arts, a ladies' library, and it might also be amalgamated with a Musical Hall for a conservatory of music. I think, with economical alterations, the present Mills House may be bought and altered to suit. I call on my fellow citizens to contribute fifty thousand dollars more to carry out my plan to cultivate and aid in educating the young of our beloved city in painting and music."
It is contended by some of the appellants that this bequest is void for uncertainty and that it is imperfect and ineffectual under the laws of South Carolina which by an express provision of the will govern. It is claimed that in the 7th clause the trustees were invested with discretion to provide for the future regulation and perpetuation of the trust, as well as to provide for the erection of the art gallery and ladies' library, and that significance should be attached to the phraseology of the 4th clause of the codicil giving the increased fund "in trust for the erection or purchase of a suitable building to be used as a hall or halls for the exhibition of paintings and for necessary rooms for students in the fine arts, a ladies' library and it might also be amalgamated with a Musical Hall for a conservatory of music." It is claimed that this provision — construed in connection with the other clauses by which the testator calls on his fellow-citizens to contribute $50,000 more to carry out his plan to cultivate and aid in educating the young of his native city — indicates an intention on his part that the entire fund should be used for the erection or purchase of a suitable building. We do not think that the will and codicil should be so construed. It should be observed that the testator does not by the 4th clause of the codicil annul the entire 7th subdivision of the will. He merely strikes out and annuls that part thereof relating to the art union and makes a direction in lieu thereof. By turning to the 7th subdivision it will be seen that he first specifically gave to the trustees there named $75,000 "to have and to hold the same in trust for the erection and endowment of an Art Gallery and Ladies' Library," and empowered the trustees "to provide as they see fit and practicable for the future regulation and perpetuation of the same;" then follows the reference to the art union, and he authorizes the trustees to deliver the trust fund to that union, provided an arrangement should be made during his lifetime whereby a building should be erected by the art union on the lot therein specified. The purpose of the 4th clause of the codicil was to annul the provision relating to the art union, to make a different designation as to trustees on account of deaths intervening and to increase the fund. It is not a strained construction to hold that the provision of the 7th subdivision of section 29, expressly conferring discretion upon the trustees to use part of the funds for the future regulation and perpetuation of the trust, is still of force and that the 4th clause of the codicil should be read in connection therewith. In this view there can be no question as to the validity of the bequest. If the 4th clause of the codicil should be construed, however, as annulling all of the provisions of the 7th subdivision of section 29, then we think a discretion was vested in the trustees to not only purchase or construct but to suitably equip a hall for the purposes therein specified to effectuate the intent of the testator. This would constitute a charitable use within the authorities in this State and within the doctrine of the courts of South Carolina as well. The rule is that such bequests are sustained by courts of equity. In Dye v. Beaver Creek Church ( 48 S.C. 444), where a devise to the Beaver Creek Church for poor children for their tuition was sustained, the court states the rules of law by which the validity of such devises is to be determined as follows: " First. If a trustee is appointed by the testator, and the will shows that the object of the devise, though expressed in general terms, is for a charitable use, the trust will be declared valid. In such a case the duty devolves upon the trustee of devising a scheme for carrying the trust into effect. Second. If a trustee is not appointed by the testator, and the will does not declare the manner in which the devise is to be made effectual, equity will not administer the trust. The reason a trustee is allowed to enforce a trust, the object of which is only expressed in general terms, is that in exercising his discretion he carries out the intention of the testator. But when there is no trustee appointed to exercise this discretion in devising a scheme for the execution of the trust the court of equity can look alone to the will, and if it does not show the intention of the testator parol testimony is inadmissible and the trust must fail."
It is also claimed that this bequest is void as being in contravention of that provision of the Constitution of South Carolina (Art. 11, § 7), adopted in 1895, which provides that "separate schools shall be provided for children of the white and colored races, and no child of either race shall ever be permitted to attend a school provided for children of the other race." The bequest in question vested prior to the adoption of that provision of the Constitution, and by the express terms of the will its validity was to be determined by the law of South Carolina as it existed at the time of the testator's death. It might well be, however, since the custody of the fund has not passed to the trustees, that if the purpose of the bequest was clearly in contravention of the Constitution, though subsequently adopted, the fund should not be delivered to the trustees; but it is not clear that the constitutional provision quoted relates to private schools; and if it does, it by no means follows that the purpose of the bequest cannot be carried out. We fail to find that any school, within the ordinary acceptation of that term, is provided for or required to be established by the trustees. The trustees are directed to provide facilities for art students, but they are not required to provide teachers. It is entirely consistent with the intention of the testator, as gleaned from the provisions of his will and codicil, that no school was to be established and no teachers were to be employed, but that accommodations and facilities were to be provided for those interested in the study of literature and art to visit the art gallery and library and conduct their studies individually and without the instrumentality of what is understood to be a school. Our conclusion, therefore, is that it has not been shown that the trust may not be executed without infringing upon the Constitution and public policy of South Carolina.
The third question of construction relates to the 8th and last subdivision of section 29, which provides for the distribution of the residue of the fund as follows: "One equal third part of all the residue shall go to and be divided equally among the issue of my niece, Mrs. Josephine Emanuel per stirpes: Provided, that if she be living when the contingency on which this section may take effect shall occur, then and in that case the entire income thereof shall be paid her during her natural life, freed from the debts or control of any husband, and no division thereof among her issue shall be had until her death. The other two-thirds of said residue shall go to and be equally divided among the children and grandchildren of my brother Allen S. Gibbes, per stirpes."
Mrs. Emanuel is still living. She is now fifty-five years of age and has never had issue. The trustee desires a decree of the court with reference to the disposition of the residue of which she is entitled to the income during her life. Objection is raised to the court's determining that question prior to her death. If that were the only purpose of the suit the objection would be well founded, but the court having necessarily acquired jurisdiction at this time for the purpose of deciding other questions, there is no impropriety in passing upon this question also, especially in view of the extreme improbability that Mrs. Emanuel will leave issue. It is contended on the one hand that upon her death without issue this residue should be distributed as in the case of intestacy of the testator, and, hence, would go to those who stood in the relation of his next of kin to the testator at the time of his death, and, on the other hand, that the entire title vested in the trustees, and that by operation of law a trust will result upon the death of Mrs. Emanuel in favor of the next of kin of the testator in being at the time of her death. The case of Blount v. Walker ( 31 S.C. 13) is relied upon as authority for this last contention. That case related to real estate, and the devise was to a trustee "and his heirs" to hold for the sole and separate use of the testator's daughter during her life, with power to the trustee to sell upon the written request of the beneficiary, if he should deem it expedient, and either reinvest the proceeds or turn the same over to her "for her sole, separate and absolute use, freed and discharged of all trusts." Upon the death of the testator's daughter the will devised the property remaining to her issue, and provided that, if she died without issue, she might appoint by will who should take the same. The daughter died without issue and without exercising the power of appointment as therein provided. It was held that, inasmuch as the trustee could not accomplish the purpose of the testator by making a sale and turn over the proceeds to the beneficiary if he took a less estate than a fee, that thereafter the entire fee passed to him, and that upon the death of the testator's daughter a trust resulted in favor of those who were at that time testator's heirs. That case is not necessarily decisive of the question under consideration, and it will, doubtless, be limited to its own peculiar facts. Here the legal estate passed to the trustee, but that did not prevent the reversion remaining in the testator's next of kin at the time of his death subject to being displaced upon the coming into being of any person authorized to take under the will. At no time was there any one in being in whom the residue vested under the will, and we are, therefore, of opinion that the residue, after the expiration of the particular estate of Mrs. Emanuel and upon her death without issue, will revert to those who answer to the description of the next of kin of the testator, to be ascertained as of the time of his death. ( Clark v. Cammann, 160 N.Y. 315.) If, therefore, Mrs. Emanuel shall die without issue, this residue will become intestate property and will vest immediately in those who were such next of kin at the time of the death of the testator.
On this question the learned trial justice held otherwise, but in all other respects the decision is in accordance with our views. The facts being undisputed, the third conclusion of law should be modified, so as to provide that the next of kin of the testator at the time of his death will take the principal of one-third of the residue of the estate held in trust for Mrs. Emanuel upon her death without issue, and as so modified affirmed, with separate bills of costs to all the parties appearing separately to be paid out of the funds.
VAN BRUNT, P.J., PATTERSON and McLAUGHLIN, JJ., concurred; INGRAHAM, J., concurred in result.
Judgment modified as directed in opinion, and as modified affirmed, with separate bills of costs to all parties appearing separately to be paid out of the funds.