Summary
In Matter of Raab (79 Misc. 185) it was held that a contingent remainder limited upon an invalid trust term is invalid. (Also, see, Knox v. Jones, 47 N.Y. 389; Bindrim v. Ullrich, 64 App. Div. 444, 449.)
Summary of this case from Matter of ConklinOpinion
January, 1913.
Kauthoff, Harmon Mathewson (Edward J. Patterson, of counsel), for will and codicil and for United States Mortgage Trust Company.
Forster, Hotaling Klenke, for George Thomas Raab, contestant.
Taylor, Jackson Brophy, for New York Post-Graduate Hospital and Medical School.
John C. Stemmermann, for Wartburg Home for the Aged and Infirm.
Jeremiah A. O'Leary, special guardian.
The last will of Charles Raab being entitled to probate, irrespective of the alleged invalidity of some of its provisions (Matter of Davis, 182 N.Y. 468; Matter of Trumble, 199 id. 454), is now here for construction, pursuant to section 2624, Code of Civil Procedure. Prior to the amendment of section 2624, in the year 1910 (Laws of 1910, chap. 584), the surrogate was without jurisdiction to construe devises or other provisions relating to real property contained in a will. Matter of Trotter, 182 N.Y. 465. Since that amendment it would appear to be otherwise, and the surrogate has such jurisdiction. Bollinger v. Taylor, 144 A.D. 851; Matter of Randall, 77 Misc. 41. Unless the amendment of 1910 had such effect, its scope and purpose is not apparent. As the surrogate's jurisdiction is not questioned in this proceeding, it will be taken for granted for the purposes of the present cause, although some points of the general legislation of 1910, touching the surrogate's jurisdiction over devises, may be, perhaps, open to serious contention ultimately in the higher courts of the state. Those points are not, however, involved here, and, consequently, need not be noticed at large by the surrogate.
Where the meaning of a will is apparent from its language, the plain import of the language cannot be departed from, even though that import result in rendering the will invalid. Van Nostrand v. Moore, 52 N.Y. 12. Courts of construction are not permitted to wrest the language of a will from its natural import in order to save it from deserved condemnation. Cottman v. Grace, 112 N.Y. 299. The first duty of a court of construction is to interpret the testamentary disposition which the testator intended to make, and when that is done the validity or invalidity of the disposition must be adjudged regardless of consequences. The court cannot, where there is no ambiguity or doubt, make a new will for the purpose of applying the maxim " ut res magis valeat quam pereat." Central Trust Co. v. Eggleston, 185 N.Y. 23. It is only where there is uncertainty, doubt or equivocation on the face of a will that that established maxim of construction is to be applied.
Where the intention of testator is clear on the face of the will itself no resort to extrinsic circumstances is permissible. It is not accurate to say in such a case that the court may always consider circumstances surrounding the testator when he made his will or at the time of his death in order to arrive at his intention. Higgins v. Dawson, A.C. 1; Smith v. Smith, 1 Edw. Ch. 189. Extrinsic evidence is never permissible where the intent of the testator may be gathered from the language of the will itself. To my mind this is such a case. But it is permissible to resort to extrinsic circumstances in order to show who in fact were the objects of the testator's bounty. There is an important distinction between evidence of testator's intention deduced from circumstances surrounding testator, and the evidence of testator's bounty deduced from facts surrounding the objects of such bounty. The latter kind of evidence is, I may say, generally admissible in causes of this character.
The will in this case makes no provision for the testator's only son. It passes over him to the son's children. The grandchildren, on the face of the will, were to be the main objects of the testator's bounty. The testator, being capax, was quite within his rights in making such a disposition of his estate. Jackson v. Betts, 9 Cow. 208; reversed on another point, 6 Wend. 173; Horn v. Pullman, 72 N.Y. 269, 276. In order to carry out the scheme of his will testator bequeathed and devised his estate to a trustee for the benefit of his grandchildren. The trust scheme is asserted to be counter to the statute now directed against perpetuities, and this is the first question in this cause. It may be observed that the statute against perpetuities is of increasing importance at this day, when the wisdom of tolerating express trusts is being more and more challenged in many states and countries. Certainly the correct application of a statute founded on public policy is most important in any case.
It does not seem possible to bring this will within the ruling of such decisions as Warner v. Durant ( 76 N.Y. 133), and Matter of Lincoln Trust Co. ( 76 Misc. 421), and treat the gift to each grandchild as severed instantly from the general estate, and to be paid to him in any event at majority, meanwhile giving him the income from the fund. This is just what the late Mr. Raab does not do. On the contrary, he provides that the trust property shall be kept by the trustee intact until the happening of an event specified.
Is the trust term prescribed too long? The will directs the trustee to collect the rents, issues and profits of the residuary estate during the minority of testator's grandchildren, who at his death were four in number, ages eight, seven, four and two years, respectively. It will be observed that there is no direction to pay any portion of such rents, issues and profits to the grandchildren during their minority, but the same are to be accumulated and invested by the trustee. Upon the arrival at the age of twenty-one years of any of said grandchildren the trustee was directed to pay and distribute to such grandchild his or her proportionate share of the residuary and its accumulations. Then follows a provision of the will providing for the death of any grandchild before attaining the age of twenty-one years. These clauses must be read together. The real question then raised by the peculiar language of Mr. Raab's will is this: Does the trust term which he prescribes necessarily involve four actual minorities?
On the face of the will there is no direction for division or distribution of the property before the arrival at the age of twenty-one of "the oldest living grandchild." Nor is there any direction to limit the division to the number of grandchildren who were living at the death of the testator and who would be living at the time of the division or would have died before that time leaving issue. On the contrary, there is an express direction to divide the property into as many shares as there may be children or representatives of children of his son, George Thomas Raab, living at the time of division. At what time or upon the occurrence of what event did the testator intend that such division should be made? Was it when the eldest grandchild living at the time of his death should arrive at the age of twenty-one or died before reaching that age, or was it when the eldest grandchild who survived should reach the age of twenty-one? If it be assumed in arguendo that testator intended the division of the trust estate to be made when the eldest grandchild living at the time of his death reached the age of twenty-one or died before that time, this will be contradictory of the direction contained in the first part of the paragraph to distribute and pay "upon the arrival at the age of twenty-one years of any of my grandchildren." If, however, the testator is taken to mean by the words "at the time the oldest living grandchild arrives at the age of twenty-one years," the eldest of his grandchildren who survived until he reached the age of twenty-one years the different phrases of the paragraph harmonize and express a definite conception, namely, that the trust was to continue until the eldest grandchild who survived until he was twenty-one should reach that age. "The arrival of the age of twenty-one years of any of my grandchildren" necessarily means the first of his grandchildren who arrived at that age, or the eldest living grandson who survived to that age, and is entirely inconsistent with an interpretation which would ascribe to the testator an intention that the division should be made when the eldest grandson living at the time of his death arrived at the age of twenty-one or died before reaching that age. It would therefore appear that it was the intention of the testator to create a trust; that the trustee was to accumulate the rents and profits of the trust fund until the eldest living grandchild who survived until he was twenty-one reached that age, when the corpus of the trust was to be divided into as many shares as there were living grandchildren or issue of deceased grandchildren; that the share of the one who had reached twenty-one was to be paid to him at that time, and the share of any one who had died leaving issue was to be paid to such issue; that the remainder of the trust property was to be held by the trustee and the rents and profits accumulated until the next grandchild reached twenty-one or died before that time leaving issue, when the share of such grandchild would be paid to him or his issue, and that such accumulations and payments were to continue until all the grandchildren living at the time of the division reached twenty-one or died before reaching that age, and if all the grandchildren died before reaching twenty-one without leaving issue the corpus of the trust fund, with the accumulations, was to be paid to the corporations mentioned in the sixth clause of the will. Such, I think, is the apparent intent of the testator in regard to the duration of the trust term. No other interpretation seems possible under settled canons of interpretation
According to my interpretation of this will, already indicated, the provisions of the fifth and sixth clauses of the will must be adjudged invalid. These clauses create a trust which suspends the power of alienation of real property for more than two lives in being and a possible minority, and which suspends the absolute ownership of personal property for more than two lives in being at the time of the creation of the estate. Real Property Law, § 42; Pers. Prop. Law, § 11; Jennings v. Jennings, 7 N.Y. 547; Schettler v. Smith, 41 id. 328; Benedict v. Webb, 98 id. 460; Greenland v. Waddell, 116 id. 234; Schlereth v. Schlereth, 173 id. 444; Central Trust Co. v. Egleston, 185 id. 23; Leach v. Godwin, 198 id. 35. The direction for accumulations are by the adjudications of this state also invalid (Real Property Law, § 61; Pers. Prop. Law, § 16), as I shall hereafter show.
If, however, the provisions of this will were ambiguous and equally susceptible of some other interpretation which makes the limitation in trust valid it would be the surrogate's duty to adopt such interpretation. Jacoby v. Jacoby, 188 N.Y. 124. But in arriving at such an interpretation the court cannot make a new will for the testator nor sanction a plain attempt on the part of a testator to make a testamentary disposition of property in a manner prohibited by statute. Let us, then, consider in detail the contentions of counsel that no perpetuity exists in this will.
It is contended by the learned counsel for the proponent that at the death of the testator each of the grandchildren then living took a vested interest in one-fourth of the corpus of the trust. As the only words of gift used by the testator were a direction to divide or pay at a future time the gift is not vested, but future and contingent. Salter v. Drowne, 205 N.Y. 215; Matter of Crane, 164 id. 171; McGillis v. McGillis, 154 id. 532. It is also contended that the testator intended to limit the beneficiaries of the trust fund to the grandchildren who were living at the time of his death. The testator having created a trust and directed that it should be held in solido, no division or distribution to be made until a grandchild arrived at the age of twenty-one, when the trust fund was to be divided into as many shares as there were grandchildren then living, the issue of any deceased grandchild to take its parent's share, the bequest was to a class, and the children born to George Thomas Raab after the testator's death would be entitled to share in the estate if they were living when the time for division arrived. Matter of King, 200 N.Y. 189; Matter of Baer, 147 id. 348; Matter of Crane, 164 id. 71.
The special guardian for the infants contends that the trust was only for the benefit of those grandchildren who survived the testator; that the latter intended that the trust should continue during the minority of the eldest grandchild living at his death, and that it should terminate upon the arrival of such grandchild at the age of twenty-one years, or by his death before reaching that age; and that at the time when the first of these events occurred the trust estate was to be divided into as many shares as there were grandchildren then living who survived the testator and the issue of any such deceased grandchildren. The objection to this contention is that it requires for its support two assumptions not warranted either by authority or by the language of the testator: First, that the testator intended the division to take place when the eldest grandchild living at his death reached twenty-one, or died before reaching that age; and second, that the testator intended to limit his bounty to such of his grandchildren as were living at the time of his death. Remembering that at the time the testator made his will his son, George Thomas Raab, had only two children, and that at the time of testator's death his son had four children, the youngest of whom was only two years of age, it would seem an entirely unjustifiable assumption that the testator intended to exclude from participation in his estate those grandchildren who might be born after his death, while evidencing such a keen desire to provide for the maintenance of those who were living at the time of his decease. According to the special guardian's interpretation, if the eldest grandchild living at the time of testator's death died one day thereafter, the corpus of the trust fund would vest in the grandchildren then living to the exclusion of any after born grandchildren. But the words of the testator directing the trust to continue "during the minority of my grandchildren," directing payment "upon the arrival of the age of twenty-one years of any of my grandchildren," and directing a division of the trust estate "into as many shares as may be children of my son George living when the oldest living grandchild arrives at the age of twenty-one," are so clear and comprehensive and so evidently meant to apply to any children of his son George who would be living at the time when the eldest grandchild arrived at the age of twenty-one, that their signification cannot be limited by any mere assumption which would impute to the testator an intention to exclude from participation in his estate those grandchildren who might be born after his death. The plain language of the testator negatives the first assumption. The cases above cited show that authority is against the second.
If we assume, for the sake of argument, that the testator intended that the division of the property held in trust should be made when the eldest grandchild living at the time of his death reached his majority, or died before that time, we get the following result: If such grandchild died before arriving at the age of twenty-one without leaving issue, and if the other grandchildren who survived the testator were then living, the trustee could divide the trust fund into four shares and pay the one-fourth of the one who had died to the survivors as their absolute property. If the second eldest died before his majority without leaving issue, his share of the trust property would be paid to the survivors. Upon the death of the third grandchild before arriving at the age of twenty-one without leaving issue, his share would be paid by the trustee of the surviving grandchild; and, if the latter died before twenty-one without issue, his share, i.e., the remaining one-fourth of the trust estate, would be paid by the trustee to the corporations mentioned in the sixth clause of the will. The four grandchildren would then have died during minority without leaving issue, which is the contingency mentioned by the testator in the sixth clause of his will upon which the corporation therein mentioned became entitled to "my estate and all accumulations thereof." But according to this interpretation, not his estate, but only one-fourth of his estate would then be available for payment to the corporations. Therefore it appears conclusively that the interpretation contended for by the special guardian and the counsel for the proponents does not accord with the manifest intention of the testator.
The learned counsel for the proponents, as well as the special guardian for the infants, cite Matter of Lally, 136 A.D. 781, in support of their position. But Matter of Lally is readily distinguishable from the matter under consideration. In that case the testator gave his property to trustees, with directions to hold and manage it for the support and education of his children during their minority and when the youngest of such children had arrived at the age of twenty-one to divide and distribute the property and accumulated income between such children, share and share alike. There was no gift over or substituted remainder. The court held that it was the intention of the testator that the trust should terminate upon the majority of his youngest daughter who survived him, or upon her death before reaching her majority, and that upon her reaching the age of twenty-one or dying before that time the trust terminated and the duty of the trustees was to divide and distribute. In the matter now before me, even under their interpretation of the will, the trust does not terminate upon the arrival of the eldest living grandchild at the age of twenty-one years or his death before that time; it continues as to part of the trust property until the youngest living grandchild who reaches the age of twenty-one has arrived at that age. Therefore the trust is not, as in Matter of Lally, to terminate when a certain child shall reach its majority or die before that time. Besides, in the matter now here the will provides for gifts over and substituted remainders, and a final contingent remainder to corporations in the event that all the grandchildren die before the age of twenty-one without leaving issue. So that, as the court said in Whitefield v. Crissman, 123 A.D. 233, "there is no method by which the trustees could distribute the property bequeathed to them until the termination of the minority of the four children, nor could there be any alienation of the real property and distribution of the proceeds during a like period." It is true that, under the interpretation contended for by the proponents, there could be a distribution of a part of the trust property, but there could not be a distribution of all the property until the youngest surviving grandchild reached his majority or died before that time.
The proponents rely also upon the case of Seitz v. Faversham, 205 N.Y. 197. In that case the testatrix gave her real and personal property to the issue of her daughter, the rents and profits to be paid to them until they arrived at the age of twenty-one. At the time of testatrix's death her daughter had two children. The court held that a future contingent estate vested in the two infants upon the death of the testatrix, subject to divestment as to either one who should die before he became of age. In the event of such divestment the estate vested absolutely in the survivor, so that the trust was measured by two lives. In the matter under consideration there were four grandchildren living at the death of the testator, so that the period of suspension of alienation may not be measured by two lives as in the Seitz v. Faversham case, but by four lives. The surrogate has now considered all the contentions and arguments of counsel in support of the will, and for the reasons stated he must adhere to the conclusion already reached to the contrary.
The direction for accumulation is void, because upon any interpretation of the provisions of the will these accumulations would inure to the benefit of minors not in being at the time the accumulation commenced, namely, at the death of the testator. Thus if testator intended that the grandchildren born after his death should participate in his estate the direction for accumulation would be invalid. If he intended to limit the beneficiaries to those living at the time of his death and who arrived at the age of twenty-one, or died before the time of division leaving issue, as such issue would be entitled to their parents' share of the accumulation, and as they were not in being when the accumulation commenced, the direction for such accumulation would be invalid. Real Property Law, § 61; Pers. Prop. Law, § 16; United States Trust Co. v. Soher, 178 N.Y. 442. But the invalidity of the direction for accumulation would not of itself render the trust invalid. Cochrane v. Schell, 140 N.Y. 516. In view of the disposition which I intend to make of this matter it is not necessary to decide who would be entitled to the accumulation if the trust were valid.
In Jennings v. Jennings, 7 N.Y. 547, the testator directed that his executor should pay to his wife from the income of his estate sufficient for her support and the support and maintenance of his children, and that they should accumulate the remainder of the income until the eldest surviving child reached the age of twenty-one, when such child's portion was to be paid to him, and that the same course should be pursued with respect to his other children. The testator was survived by four children. The court held that the trust was void as suspending the power of alienation for more than two lives in being. In Benedict v. Webb, 98 N.Y. 460, the period of division was designated by the testator as follows: "When all my said children, or the youngest survivor of them, shall have attained the age of twenty-one years." The court held that it was the intention of the testator to suspend the division until all his minor children living at his death should attain their majority. There were two minor children living at his death. The trust was continued in part for the benefit of two daughters during their lives. The court held that the trust was bad as to that part which was continued after the period of minority of the two minors. In Greenland v. Waddell, 116 N.Y. 234, the testator provided that one-third of his property should be held in trust, the income to be paid to his sister during her life, and upon her death the income to be paid to her children "until the youngest child shall arrive at the age of twenty-one years, and, on said youngest child arriving at such age, my said executors shall pay and transfer to the child or children that shall then be living the whole of said one-third, with its accumulations, and on the death of all of said children, before arriving at such age * * * my executors shall pay the remaining one-third to my brother and sister." The court said: "If the children do not reach the age of twenty-one, the fact that the direction is that the fund shall go to a brother and sister of testator is not consistent with the vesting of the absolute ownership in the children on the death of their mother. It is therefore clear that the direction in the will will operate to suspend the absolute ownership of the fund."
In Bindrim v. Ullrich, 64 A.D. 444, testator gave his property to trustees, with directions to pay the income to his widow for life. At the death of the widow to "pay the income and profits from one share thereof to Eva B. * * * during the minority of my grandchildren, the children of my son Julius, to be used by him for the support, maintenance and education of said grandchildren, and when they attain the age of twenty-one years to divide such share among such grandchildren equally, share and share alike." Held invalid as suspending the absolute ownership of property for the life of the widow and five grandchildren. Also because there was a possibility of a grandchild being born after the creation of the estate, and the power of alienation according to the terms of the will would be suspended until all the members of the class arrived at the age of twenty-one. In Whitefield v. Crissman, 123 A.D. 233, the testator gave property to trustees for the benefit of his four children, "the income and such portion of the principal as may be necessary for their maintenance to be used until all shall have reached their majority, when * * * the residue or balance is to be divided share and share alike among them, * * * in the event of the death of any of said children without issue, said share to be divided pro rata among those remaining." Held that the trust violated the statute. In Schlereth v. Schlereth, 173 N.Y. 444, the testator left real and personal property with a power of sale. He directed that the income should be paid to his sister during her life. After her death to pay over such income to her issue in equal shares until the youngest of such issue attain the age of twenty-one, and then to divide and distribute the whole of the trust fund so held among such issue in equal shares. The court said: "It is obvious from the provision to pay over the principal when the issue reached the age of twenty-one, paying to them the income in the meantime, that the testator intended to make a future and not a present gift. It is also obvious that the income and corpus of the estate was intended by the testator to be divided among the persons answering the description contained in the seventh clause of the will at the time when such division was to be made. Thus the time during which the absolute ownership was to be suspended was not measured by two lives in being at the death of the testator." The trust was held invalid. These cases cited are analogous in principle to the matter under consideration. It therefore follows that the trust attempted to be created by the fifth clause of the testator's will is invalid.
The sixth clause provides that in the event of the death of all the children of George T. Raab before arriving at the age of twenty-one without leaving issue, the whole estate with the accumulated rents and profits shall be paid to the corporations therein mentioned. As to the accumulated rents and profits the bequest is void, because profits cannot be accumulated for the benefit of adults. Before the trustee could pay the trust estate or any part of it to those corporations it would be necessary for him to hold the property in trust during at least four lives, because it is only upon the death of the last survivor of the grandchildren without leaving issue that the corporation would be entitled to take. A remainder contingent because of an uncertain event, which cannot vest in possession until after the termination of more than four lives in being at the time of the creation of the estate upon which it is limited, is invalid. Besides, a contingent remainder limited upon an invalid trust term is invalid. Knox v. Jones, 47 N.Y. 389; Bindrem v. Ullrich, 64 A.D. 449; Greenland v. Waddell, 116 N.Y. 234.
As the fifth and sixth clauses of the will are invalid the testator died intestate as to the property which he attempted to dispose of by those clauses, and such property passes to his heirs at law and next of kin. Let the decree be settled accordingly.
Decreed accordingly.