Opinion
Argued November 20, 1935
Decided January 7, 1936
Appeal from the Supreme Court, Appellate Division, First Department.
Charles H. Griffiths and Pearce H.E. Aul for appellants. John J. Cunneen for William P. Cavanaugh, individually and as executor and trustee, defendant.
John G. Dyer, as guardian ad litem, and Emmanuel Lewin for Samuel S. Thorton, II, an infant, defendant. Arthur T. O'Leary and Edward W. Rooney for plaintiff-respondent.
Townsend Morgan, as guardian ad litem, and Gregory A. Lee for Lucien Looram, an infant, respondent. C.O. Donahue and Lawrence Morris for Bank of New York and Trust Company, as general guardian of the property of Lucien Looram, an infant, respondent.
On December 31, 1928, Matthew M. Looram by a written instrument conveyed to himself as trustee personal property described in a schedule thereto annexed. He was then a widower having three children therein named as primary beneficiaries. Thereafter Mr. Looram married the plaintiff who, on his death, brought this action against the respective parties in interest under the trust indenture. Judgment is demanded declaring the instrument void as suspending the absolute ownership of personal property for a longer period than during the continuance and until the termination of two lives in being at its date (Pers. Prop. Law [Cons. Laws, ch. 41], § 11).
The principal defendants moved for dismissal of the complaint as insufficient in law. An order denying the motion has been affirmed by the Appellate Division. That court allowed this appeal, certifying to us the question whether the pleading states facts sufficient to constitute a cause of action. The answer turns on the effect to be given to some of the provisions of the trust instrument.
Before these are stated, it may be noticed that the action is not one for a construction of the trust that would separate what is valid from what perhaps is not. Plaintiff assails as wholly bad an instrument that makes no mention of her. To sustain that position she must establish that the challenged provisions offend the statute in a contingency so vital to the grantor's purpose that his plan in its entirety is void. This necessary premise plaintiff accepts, and her argument goes as far as the necessities of her case.
The trust provisions to be considered are these:
"The Trustee shall divide the whole of the principal hereafter into three equal shares or parts, one share for my daughter Dorothea Looram, one share for my daughter Alice Looram and one share for my daughter Alvina Looram, and shall dispose of the principal and income of the said shares as follows:
"To pay the income from each share at such time in which sums and in such manner as the Trustee may see fit to my daughter Dorothea Looram, Alice Looram and Alvina Looram, as long as my said daughters shall live and upon the death without leaving lawful issue by birth surviving of any of the said beneficiaries to divide the share held for the one so dying equally between my surviving daughters, in Trust, nevertheless, until the death of my second surviving daughter, or in the event of the death of any of the beneficiaries herein leaving lawful issue surviving their share to be divided between such surviving issue per stirpes, in trust, until the death of my second surviving daughter, when this trust shall terminate as to her share and the Trustee will convey, assign, transfer, pay over and deliver absolutely to my surviving daughter or any surviving issue of my daughters in equal shares per stirpes, all securities, cash, real estate and other property then constituting the principal of the trust fund. Upon the death of my surviving daughter without lawful issue being left surviving her or any of my said daughters this trust shall terminate and the principal then remaining in the hands of the Trustee will be paid over absolutely as follows: One half of the principal to my son Lucien Looram, if living; or if dead leaving lawful issue him surviving by birth, his share to his issue per stirpes, the remaining half to be divided equally between the New York Foundling Asylum and The Little Sisters of the Poor Home for the Aged or their successors in the event that my son Lucien be dead without lawful issue by birth him surviving, then the whole of said remaining principal to be divided equally between the above named New York Foundling Asylum and The Little Sisters of the Poor Home for the Aged or their successors."
It is not asserted that any term of suspension is invalid if it is limited to continue during the lives of such two of the three designated daughters of the grantor as shall be the first two of them to die. "Such a term cannot last longer than if the instrument had confined it to the life of any particular two of the group, and it may end earlier." (Chaplin on Suspension of the Power of Alienation [3d ed.], § 108.) What is contended is that the dominant purpose of the grantor was the creation of a single trust to subsist at least as long as any of his three named daughters should live.
On the contrary, as we think, the grantor plainly spoke first and predominately of three separate trusts each with a capital of one-third the whole and each limited on the life of one of his daughters nominatim for a primary life estate. All that is said against this construction is that the word "trusts" is not found in the writing. That technical suggestion fails to commend itself to us as we follow the several events that were to control the disposition of the fund. For the moment the question is not validity but intention, "and upon that question even a void provision * * * may be looked to for light." ( Lougheed v. Dykeman's Baptist Church, 129 N.Y. 211, 217.) The "three equal shares or parts" into which the grantor directed division to be made were dealt with by him as such and accordingly exist as shares. ( Matter of Horner, 237 N.Y. 489.)
It is perhaps enough to say that each of the three separate primary trusts limited on the life of a named daughter of the grantor is valid. The plaintiff is not aided, however, when we take up the directions for later subdivision of the original shares. Each separate primary trust is validly limited on a second life, i.e., the life of the first to die of the other two daughters of the grantor.
Excluding now the possibility of living issue of the deceased life beneficiary of a primary trust, the fund to be held for each of the two secondary life estates is an original one-third set apart for each of the survivors plus one-half of the third theretofore in trust for the daughter of the grantor who first dies. On the death of the daughter second to die there must be distributed the whole of her trust principal then constituted of her original one-third share plus the one-sixth of the original whole that came out of the share of the sister who predeceased her; and at least all but the original principal of the share for the surviving third daughter.
Should issue survive the beneficiary of a primary life estate first to die, a secondary trust is erected for her issue. The capitals of these secondary trusts are respectively the fractional shares of her primary trust established by the number of her surviving issue. Distribution of these secondary trust principals must be made on the death of the second daughter of the grantor to die.
We need not now be concerned with the interests of issue of any daughter of the grantor other than his daughter first to die or with the provisions for repeated deposit of parts of the original whole if the first two to die of the grantor's daughters leave no issue (See Vanderpoel v. Loew, 112 N.Y. 167). Nor need we consider the matter of distribution of the subdivided fractions set up for issue of the daughter first to die should any of such issue die while the second limiting life continues. Nor need we consider the implications of the instrument in the event the daughter last to die leave no issue, but be survived by issue of either of her predeceased sisters. Nor need we consider when the original share of the last survivor must be distributed. The possibilities inherent in these aspects of the instrument cannot save the present pleading of this plaintiff. (See Matter of Mount, 185 N.Y. 162.)
There remains the contention that one of the measuring lives was that of the grantor himself. By the trust instrument, "The grantor directs that upon his death the trust herein created shall be continued," and that other named persons then "shall act as the trustees in his place and stead." This was no more than a designation of substitutes for the grantor as trustee. The idea that the life of the grantor was thereby made a limiting life is unsound.
The orders should be reversed and the motion granted, with costs in all courts, and the question certified answered in the negative.
CRANE, Ch. J., LEHMAN, O'BRIEN, HUBBS, CROUCH and FINCH, JJ., concur.
Orders reversed, etc.