Summary
In Isham v. New York Assn. for Improving Condition of Poor (177 N.Y. 218) the court held that the executor of an estate had no right to appeal a determination of the Surrogate that a transfer tax was to be paid out of the residuary estate when the sole residuary legatee had decided not to appeal (see, also, Ross v. Wigg, supra).
Summary of this case from Matter of DelongOpinion
Argued December 17, 1903
Decided January 12, 1904
Henry W. Simpson for appellants. Edward E. Sprague and John L. Cadwalader for The New York Association for Improving the Condition of the Poor, respondent.
Charles T. Payne, for Lincoln Hospital and Home, respondent.
Charles L. Jones and Russell E. Burke, for the Orphans Home et al., respondents.
Edward W. Sheldon for New York Society for the Relief of the Ruptured and Crippled, respondent. Harry N. Avery for New York Institution for the Blind, respondent.
Charles E. Sentell for Home for Old Men and Aged Couples, respondent.
Stanley W. Dexter for Children's Aid Society, respondent.
John H. Cole for Society of St. Johnland, respondent. George C. Kobbe for Home for Incurables, respondent.
Hoffman Miller for St. Luke's Hospital, respondent.
The parties to this action united in submitting the controversy between them upon an agreed statement of the facts. The question in difference was whether, under the 23d clause of the will of Mary J. Walker, the transfer tax payable upon a fund of $500,000, theretofore held in trust for her during her life and which she disposed of in her will by the exercise of a general power of appointment, should be paid out of the trust fund, itself, or out of the residuary estate.
The trust fund had been created for her by her father's will; which directed the trustee to pay over the principal, as she might by will direct, and which authorized her to so dispose of the same. When she made her will she, first, proceeded to "give and bequeath" the trust fund, over which she was given the power of disposition by will, to various charitable institutions and, then, she made bequests to various persons, aggregating a very large sum of money: her individual personal estate amounting to some three millions of dollars. Having made these bequests, she, next, directed and authorized her executors, in the 23d clause, "to pay out of my residuary estate any and all transfer or inheritance taxes that may be imposed or become due upon any of the legacies hereinbefore made, whether such taxes be State or Federal." In the succeeding clause, she constituted her sister, Emily A. Watson, her residuary legatee; including in that disposition any of the legacies which might lapse and all of her estate not effectually disposed of.
Upon the question arising as to how the transfer tax upon the trust fund should be paid, the executors instituted this proceeding and joined as parties defendant Emily A. Watson and all other persons interested in the result. All appeared by their attorneys and, upon the submission of their controversy to the Appellate Division, that court determined it by ordering the executors of Mary A. Walker to pay the transfer taxes in question out of her residuary estate. From the judgment of that court, the executors have appealed to this court; but Emily Watson has not appealed herself, nor has she requested the executors to appeal.
In my opinion, the executors were not authorized to take this appeal and to continue the controversy; when those directly concerned in the determination of the question had acquiesced therein. I do not think they have any standing in court to complain, further, as to a result, which did not affect them. They performed their duty in presenting to the court the question of how the will should be construed and they did so in such a way as that all interested therein would be bound by the determination made. When a judgment was reached, directing them how to act, they were protected and they were under no obligation to proceed to champion the right of Emily Watson; who submitted to the judgment and did not appeal at all. If appeals are allowed by statute, they are to be taken only by those who are aggrieved, in the sense that they had a direct interest in the controversy, which was affected by the result. This must be so in reason and the proposition, as it relates to executors, or administrators, of the estates of deceased persons, is supported by authority. ( Bryant v. Thompson, 128 N.Y. 426; Matter of Hodgman, 140 ib. 421; McLouth v. Hunt, 154 ib. 179; Matter of Richmond, 63 App. Div. 488.)
Upon the merits of this controversy, I do not think any reasonable doubt can be entertained as to the correctness of the determination made below. Whether we regard the intention, as exhibited by the comprehensiveness of the language used by the testatrix in directing the payment of "any and all transfer or inheritance taxes" out of her residuary estate; or whether we regard the effect and nature of the exercise by her of the power of appointment, it must be very clear that the appointees of the fund were to take their shares thereof without diminution through imposition of Federal or State taxes upon the transfer. It may be true that they take under the execution of the power of appointment and, therefore, through a source of title emanating from the will of this testatrix' father; but that does not affect the question presented, which is whether, in exercising the power, she has made a gift, or a legacy, to the extent of its exercise. She, evidently, supposed she was doing precisely that; for she used the words "I give and bequeath," and the authorities are to that effect. In Matter of Dows, ( 167 N.Y. 227), and in Matter of Delano, (176 ib. 486), we have held that it is the execution of the power that gives to the person the property passing under it. The effect of conferring a general power of appointment is to invest its donee with a power of disposition as broad as though she was disposing of her own property. In its exercise she, in fact, makes a gift, or bequest, to persons of her own selection. In addition to the Delano case, reference may be profitably had to the English cases of Attorney-General v. Marquis of Hertford, (3 Exchequer, 670, 683), and of Freme v. Clement, (L.R. [18 Ch. Div.] 499, 508); where that is held to be a gift, or bequest, which passes by the exercise of a power of appointment. A legacy is a disposition of personal property by will and when this testatrix directed her executors to pay the transfer taxes, that might be imposed upon any of the legacies which she had made, she meant, and she must be assumed, in law, to have meant, all the preceding dispositions by her, whether of the trust fund, or of her individual estate.
I advise the affirmance of the judgment appealed from; with costs to the respondents, who have appeared in this court by attorney, payable by the appellants personally.
PARKER, Ch. J., HAIGHT, MARTIN, VANN and WERNER, JJ., concur; BARTLETT, J., concurs in result on the merits, but dissents as to the costs payable personally by executors, being of opinion that the executors were entitled to appeal and should be awarded costs with the respondents.
Judgment accordingly.