Opinion
February 23, 1971
Decree of Surrogate's Court, Bronx County, entered July 22, 1970, unanimously reversed, on the facts and the law, the petition granted, and the will of the late Renato Sacchi construed to provide that the income heretofore payable to the late Rose Feria, income beneficiary of the testamentary trust established by the said will, is payable, in the place and stead of the said deceased Rose Feria, to respondent-appellant Maria Feria, sole surviving heir of the said Rose Feria, with $50 costs and disbursements payable out of the trust estate to all parties filing briefs. The will set up two trusts (here treated as one, the first named beneficiary of each having died prior to the events involved in this proceeding, all other provisions as to beneficiaries, corpus, and remainder being identical), the youngest of his four siblings, John, to be sole trustee. Income was directed to be paid in equal shares to "or applied for the benefit of" the testator's brothers John and Rudolph and sisters Rose and Romilda during John's life, the remainder to be distributed upon John's death in stated shares to the three surviving siblings and niece Janice, daughter of the trustee. Further: "Should any of the aforesaid remaindermen * * * be not living on the date of the termination of the trusts * * * then their shares shall go to their issue per stirpes". No specific words delineate the disposition made, in the event of death of one of the income beneficiary siblings during the trustee's life, of that deceased beneficiary's share of income. Upon the death of sister Rose, trustee John continued to pay the share that had gone to Rose during her life to her sole surviving heir, respondent-appellant Maria, until this was challenged as improper. The construction proceeding ensued, culminating in a decree, apparently in reliance on EPTL 9-2.3, directing payment of Rose's income share to the remaindermen other than Rose's issue. We consider this construction strained, and hold instead, on a reading of the entire will, that the trustee's original procedure had been the correct one in pursuance of the decedent's manifest testamentary scheme, which provided a continuing testamentary benefit to each sibling and their issue, first as income beneficiaries, and then, on termination of the trust, as remaindermen. Quite obviously, it was never testator's intention to place his sister's child in some sort of limbo during John's life, only to be restored as remainderman on John's death. Indeed, it is stated in the record, without contradiction, that respondent brother Rudolph, "concerned that in the event of his death [prior to that of the trustee] there would be no income payable to his surviving children" and even though the Surrogate's construction means financial benefit to him at once, has taken the position, contrary to that of his lawyer, that income should be paid, during the term of the trust, as the trustee did following the death of Rose. The interpretation urged by the other respondent, Romilda — i.e., that given by the Surrogate — could, should trustee John survive all his siblings, lead to the obviously unintended result that John and his daughter Janice would then share between them, to the exclusion of everyone else and to the day of his death, all the income of the trust estate. It is hinted in the papers that the testator demonstrated an intention to achieve this ludicrous end by naming his youngest sibling as trustee, but this is negated by the will's clear indication that the motivating consideration in designating John was that he was his brother's trusted employee, expected to carry on his business. Thus, we hold that the will is complete, that there is no "income not disposed of", and that it is unnecessary to look to "the next eventual estate" (§ 9-2.3).
"§ 9-2.3 Undistributed income. When income is not disposed of and no valid direction is given for its accumulation it passes to the persons presumptively entitled to the next eventual estate."
Concur — Markewich, J.P., Nunez, Steuer and Tilzer, JJ.