Summary
In Kalish v. Kalish (supra) the Court of Appeals, after an exhaustive review of the authorities in this country and England, approved a construction of a will which lifted bodily out of it an invalid trust provision, leaving the antecedent and subsequent provisions standing, although the effect was to accelerate the ultimate vesting of the estate.
Summary of this case from Ripley v. Guaranty Trust Co.Opinion
Argued February 5, 1901
Decided March 26, 1901
George H. Starr for appellant. Edward W.S. Johnston and Edward H. Kelly for respondents.
The plaintiff asserts the invalidity of all the provisions of the will herein, except those which relate to the widow's life estate and to the process of administration. The defendants primarily defend the will as a whole, and secondarily upon the theory that if any of its provisions are void these can be eliminated without destroying the testamentary scheme or creating partial intestacy. The complaint was dismissed at Special Term, and this ruling was affirmed by the Appellate Division upon the ground that plaintiff's claim presents a purely legal question, which has no place in a court of equity. While concurring in the result reached by the learned Appellate Division, we do so upon other grounds than those stated in its opinion. We think that under the cases of Brady v. McCosker ( 1 N.Y. 214), referred to with approval in Anderson v. Anderson ( 112 N.Y. 108), and Read v. Williams ( 125 N.Y. 560), the complaint herein states facts which justify equitable interference. The existence of an intervening life estate, under which the life tenant is in possession, and of a trust which requires construction, present such an impediment to the maintenance of an action at law as to give jurisdiction to a court of equity. Although we are constrained to differ from the Appellate Division upon the question which was made the basis of its decision, we think there are other obstacles to the plaintiff's recovery which cannot be removed and which would render fruitless another trial and appeal. We, therefore, deem it our duty to end this litigation by deciding the controlling and unchangeable questions involved. The testator, Julius Kalish, died in October, 1897, leaving a will which was dated March 2d 1895, and admitted to probate January 11th, 1898. His widow and nine children, of whom the plaintiff is one, survive him. Under this will the widow receives all the testator's property, both real and personal, during her life. After her death, and until the final distribution of the estate, the daughters Annie and Bertha were each to receive an annuity of $700.00, and the daughter Fannie an annuity of $400.00. The executors are given a power of sale of the real estate during the lifetime of the widow, with the widow's consent, as well as an absolute power of sale during the period between her death and the final settlement of the estate. In the event of a sale of any of the real estate the executors are directed to re-invest the proceeds in other real estate. Upon the widow's death the executors are directed to hold the property in trust until the final distribution of the estate, with power to collect the rents, issues and profits, and after payment of the annuities above mentioned, taxes and charges, to invest the surplus in real estate. The eighth clause of the will contains a direction that the estate shall not be distributed or settled for a period of five years after the widow's death, such final settlement and distribution to be made as soon after that event as in the opinion of the executors will be for the best interests of the estate and those who are to be sharers therein. This clause also contains a general power of sale in aid of such final settlement. Upon the final distribution of the estate the plaintiff is to receive $100.00 in cash; the executors are to take $8,000.00 in trust for the daughter Fannie, who is to have the income thereof during her life, and after her death the principal of this fund is to go to her surviving child or children, and in case of her death leaving no surviving child or children, the principal of such fund is to be divided among the testator's children in the proportion of four-thirteenths to each of his daughters Annie and Bertha, and one-thirteenth to each of his sons, Julius, Brono, William, Richard and George, to be paid as soon as convenient after the death of the daughter Fannie. The eleventh clause directs that after the payment of said legacy to the plaintiff, and after deducting such trust fund for the daughter Fannie, the balance of the estate is to go to the testator's daughters Annie and Bertha, and his sons, Julius, Brono, William, Richard and George, in the following proportions: To Annie and Bertha, four-thirteenths each; to Julius, Brono, William, Richard and George, one-thirteenth each. It is conceded by all concerned that the will gives the widow a valid life estate. It cannot be doubted that the intermediate trust provided for in the seventh and eighth clauses is invalid because it is in contravention of the statutes against perpetuities and unlawful accumulations of rents and income. (Secs. 32 and 50, Real Property Law, and secs. 2 and 4, Personal Property Law.) The trust as to both realty and personality is to continue for a definite period of five years after the widow's death, and for such indefinite period thereafter as the trustees may deem necessary. This may be for a longer period than two lives in being, and is, therefore, void. The direction as to accumulation of rents and income is not limited to the minority of any beneficiary, and, as the beneficiaries are all of full age, is also void. We now come to what may be called the third division of this will which embraces the ultimate trust and the remainders. These provisions, standing by themselves, are clearly valid. At this point the question arises whether they are so independent of and separable from the void intermediate trust that the latter may be eliminated from the will and the two valid parts joined together without destroying or changing, in its essential features, the general testamentary scheme embodied in the instrument. What were the prominent features of this scheme? First. A life estate in the widow with power of sale in the executors with the widow's consent. Second. A trust for five years with an absolute power of sale in the executors, during which period the three daughters were to have the annuities above mentioned and two of them together with their brother Richard were to have the use of certain real estate, while the executors were to hold and manage the property and accumulate and reinvest the surplus. Third. A trust for the daughter Fannie during her life, with remainder over after her death; a specific legacy to the plaintiff and remainders of the residue of the testator's estate to his other children. Let us now stop to inquire what will happen if the void trust is lifted out of the will and the first and third sections of the will are held valid. The only part of the testamentary scheme that will fail is that which attempts to defer the time of distribution for five years during which Annie and Bertha are to have their annuities and the use of the homestead or a substitute therefor; and during which the daughter Fannie is to have her annuity. It happens that the annuity to the latter is the exact equivalent of interest at five per cent upon the fund provided for in the ultimate trust in her favor so that she would lose nothing by the change. In the absence of knowledge as to the extent of the testator's estate it is not unfair to assume that the annuities to the other daughters fairly represent the returns which they may expect to receive from their respective shares after distribution. In that event they would sustain no loss except that occasioned by being deprived of the use of the homestead or some other place instead of it. In all other respects the will stands as the testator made it, and the main features of his testamentary plan will be carried out. What will be the result if we decide that the ultimate trust and the remainders are so far dependent upon the void intermediate trust that the former cannot take effect until the expiration of the period during which the latter was to run? It would follow, as a logical sequence, that the testator died intestate at least as to the five-year period fixed for the continuance of the void trust, and possibly as to all of his property, except the widow's life estate. The latter contingency would entail the utter destruction of the testator's plan. The former would create a condition even worse than that. In case of complete intestacy, after the expiration of the widow's life estate, all the heirs at law of the testator would at least be upon an equal footing, and would know just what to expect. But with a valid life estate, followed by intestacy for a term of five years, which in turn is succeeded by an unassailable trust and valid testamentary remainders, who could fore-tell the end as between the disinherited and hostile plaintiff and the heirs at law who, as legatees, are to take the substance of the estate? The question carries its own answer and clearly presents a situation that is possible in theory, but utterly impracticable for any purpose, except to waste this estate in litigation. Having demonstrated, as we think, that it is not only for the interests of all concerned in the estate, except the plaintiff, but also in direct furtherance of the testator's plan, to uphold this will by simply eliminating the void intermediate trust and its necessary incidents, we have now to inquire whether there is any legal obstacle to such a course. It is axiomatic that courts cannot make new wills for testators who have failed to make valid wills for themselves. While recognizing the force of this truth courts have from the earliest times been compelled to choose between the alternatives of setting aside certain wills altogether, or of cutting out simply their void provisions. This necessity has led to the rule which is now firmly established in this state, that when the several parts of a will are so intermingled or interdependent that the bad cannot be separated from the good, the will must fail altogether; but when it is possible to cut out the invalid provisions, so as to leave intact the parts that are valid, and to preserve the general plan of the testator, such a construction will be adopted as will prevent intestacy, either partial or total, as the case may be. This case seems to present a fair opportunity for the application of the latter rule. Here we are not required to make a new will for the testator. We have a valid life estate, followed by a void intermediate trust for five years succeeded by a valid ultimate trust and good remainders. The void intermediate trust is for the benefit of the same legatees who take under the ultimate trust and remainders respectively. The excision of the void trust simply gives immediate effect to those ulterior devises which under it were to be postponed for five years. The same persons take in the same proportions as before. By way of recapitulation we, therefore, conclude that equity and the decided cases concur in requiring us to hold that the invalid parts of this will can be expunged without destroying the will as a whole, or creating even partial intestacy. The life estate with the power of sale during its existence, subject to the widow's consent, can stand. The succeeding trust and its accompanying power of sale, with its incidental directions regarding the occupation of the homestead, or its substitute, are declared void. The ultimate trust and the remainders are held valid to take effect at the conclusion of the life estate. That this disposition of the case is within the rule long followed by this court is attested by the following decisions: In Haxtun v. Corse (2 Barb. Ch. 507) it was held that where a power in trust, to executors, to lease the real estate of the testator until it could be sold, would have the effect to suspend the absolute power of alienation in such real estate, and was, therefore, void, the power in trust to sell, created by the same will, was nevertheless valid. So in Van Vechten v. Van Veghten (8 Paige, 105) the chancellor, in discussing the provisions of a complicated will, said: "Where personal estate is vested in trustees upon various trusts, some of which are valid and others void, the courts must sustain those which are legal and valid if they can be separated from those which are illegal and void." In Harrison v. Harrison ( 36 N.Y. 543) the court in taking out of the will certain ulterior limitations, which were declared to be void, held that no difficulty was presented by the fact that all the limitations, the good as well as the bad, were embraced in a single trust. In passing upon that question the court said: "The principle is now well established that the courts lean in favor of the preservation of all such valid parts of a will as can be separated from those that are invalid without defeating the general intent of the testator." Referring to the particular trust there under consideration the court continued: "It is no objection to the application of this rule to the case at bar that the limitations, as well those which are good as the one alleged to be bad, are embraced in a single trust. A single trust created for two purposes, one lawful and the other unlawful, is good for the lawful one, although void for the unlawful one." In Tiers v. Tiers ( 98 N.Y. 568) it was held that a void ulterior contingent limitation did not disturb a primary disposition in trust nor affect other separate parts of the will. In Henderson v. Henderson ( 113 N.Y. 1) the will contained a direction to the executor to make partition as soon after the testator's death as practicable, but reserving to the executor discretion to delay such partition for a period of five years after such death. It was there held that a provision restricting the limitation over to such of the issue of a deceased child "as shall be living at the time of such partition" was void; but as it was inconsistent with the earlier provisions of the same clause, and unnecessary so far as the perfecting of a testamentary scheme for disposing of the residuary estate was concerned, it should not be allowed to prevail over the preceding direction. The court there said: "Courts should endeavor, by every reasonable intendment, and by a liberal construction, to sustain a testamentary disposition of property when, in so doing, they can give actual and just effect to the testator's intent and validate at least the main, if not the true, part of a testamentary scheme which contemplates distinct and severable acts." Analogous to the foregoing cases are Robinson v. Robinson (5 Lans. 168), where it was held that "Wills may be void in part for some illegality or violation of law, and valid as to the residue," and Hotaling v. Terpenning (25 Hun, 485), where a legacy of $400.00, given after one year and one day from the decease of the testator to his daughter, was to be paid to her when she became of age, or at her marriage if she married sooner, and meantime it was to accumulate. The court there said: "There was no trust, because she was married before the probate of the will, probably before the testator's death, and certainly before the one year and one day after his decease provided for in the will, and, therefore, she was entitled to receive the legacy at once without any waiting for accumulations." So in Kennedy v. Hoy ( 105 N.Y. 135), where a question arose as to the validity of certain trusts, this court said: "Where several trusts are created by a will which are independent of each other, and each complete in itself, some of which are legal and others illegal, and the legal can be separated from the illegal and upheld without doing injustice or defeating what the testator might in the emergency be presumed to wish, the illegal trusts may be cut off and the legal permitted to stand." In Weeks v. Cornwell ( 104 N.Y. 336) a litigation arose over the provisions of a long will in which the testator's intention was obscured by much inappropriate and useless verbiage. There was a devise for life to the testator's widow, an invalid trust to mortgage the same lands and a remainder over on the termination of the trust. It was held that the devise took effect at testator's death as a vested remainder, subject to the life estate in the widow. While the facts in the case last cited differentiate it from the one at bar, it furnishes an interesting illustration of the extent to which courts have gone to prevent intestacy where a will has been made. In emphasizing this rule the learned writer of the opinion in that case quotes from Jarman on Wills (Vol. 1, p. 643), as follows: "In the construction of wills the most unbounded indulgence has been shown to the ignorance, unskillfulness and negligence of testators. No degree of technical informality or grammatical or orthographical error, nor the most perplexing confusion in the collection of words, will deter the judicial expositor from diligently entering upon the task of eliciting from the contents of the instrument the intention of its author, the faintest traces of which will be sought out from every part of the will and the whole carefully weighed together." In other jurisdictions the same principle has been followed. In Macknet v. Macknet ( 24 N.J. Eq. 277) the testator gave to his wife, as part of the provision made for her in lieu of dower, the use of a house and lot, or the rents thereof, and also the income of certain stocks and bonds during her life, or until marriage, and after her death or marriage to an infant daughter. Held, "That no disposition whatever of such interest of the widow in his estate having been made by the testator, in the event of her refusal to accept the provision in lieu of dower, the devise and bequest vested in the daughter in possession immediately upon the testator's death." In Adams v. Gillespie (2 Jones Eq. [N.C.] 244) the testator gave to his wife certain personal property for life, then to his daughter for life, and then to the daughter's surviving children. It was there held that the wife's dissent from the will removed the interposed life estate, and that the daughter took the property immediately. In Yeaton v. Roberts ( 28 N.H. 459) it was held, "That if the person to whom the property is given for life decline to accept it, it vests in possession in those to whom it was limited in remainder, and the heirs of the testator have no right to the possession during the life of the first devisee." There are many English cases in which the subject of "accelerated remainders" is discussed. But we cannot review them all within the space which can properly be given to this opinion. Jarman, in his work on Wills (Vol. 1, p. 568), says, that the earlier cases are clearly in favor of the acceleration of remainders where an intermediate estate or trust fails. Jull v. Jacobs (L.R. [3 Ch. Div.] 703) decides that a remainder limited upon a void life estate takes effect immediately. To the same effect is Clark v. Randall (L.R. [31 Ch. Div.] 72). An interesting discussion upon this subject is found in the leading case of Tregonwell v. Sydenham (3 Dow's Cases, 194), decided in the House of Lords in 1815. The Court of Exchequer had previously decided that certain term trusts were void and that the term attended the inheritance fixed by the will. The House of Lords reversed this decision upon the ground that if said trusts were, or for any reason became, invalid, they resulted for the benefit of the heir at law. But the decision was based upon technical reasoning which has no application to the facts of this case or to these times. In Sidney v. Shelley (19 Ves. 352) the Court of Chancery held that a devise to trustees upon certain trusts stated to be "hereinafter expressed," but in fact not declared, left the term to attend the inheritance according to the limitations of the will, and no resulting trust for the heir. (See, also, Davidson v. Foley, 2 Brown's Ch. 212.) It must be admitted that there is much confusion and apparent diversity of opinion in the English decisions upon this subject, arising in large part no doubt from the technical refinements which have no place on our own modern real property laws. It has been suggested that the reason for the English rule favoring the acceleration of remainders is that in England the failure of the prior estate almost invariably destroys the remainders limited upon it. It is true that in this State the statute (Sec. 48, Real Prop. Law) expressly provides that no remainder, valid in its creation, shall be defeated by the determination of the precedent estate before the happening of the contingency on which the remainder was limited to take effect. Notwithstanding this statute, cases may arise in which, as in the case at bar, its provisions are rendered partly or entirely nugatory by conditions which demand some practical means to a just and equitable end. There is nothing in this statute which prohibits, even by implication, the rule which we favor herein. On the contrary, it seems to be designed to meet some of the hardships of the old common-law rule which so often conflicted with a contrary testamentary intent.
The judgment herein should, therefore, be affirmed, with costs in accordance with the foregoing suggestions respecting the parts of the will which are held to be valid and those which are declared to be void.
PARKER, Ch. J., GRAY, O'BRIEN, HAIGHT, LANDON and CULLEN, JJ., concur.
Judgment affirmed.