Summary
In Matter of Tienken (131 N.Y. 391) Judge FINCH said: "I have observed in general that where it [the divide and pay over rule] has prevailed, it has been where no contrary intention was fairly indicated and where its own force was somewhat strengthened and its indication corroborated by further facts."
Summary of this case from Matter of KingOpinion
Argued February 9, 1892
Decided March 1, 1892
Treadwell Cleveland for appellants.
George F. Martens for appellant John H. Tienken.
Theodore N. Melvin for respondent.
The fundamental question upon which the construction of this will turns is whether an estate in remainder vested in the children of the testator at his death, or in such of them as should survive the death of the widow and consequent termination of the trust. The general scheme of the will contemplated two essential results; a provision for the widow during her life through the operation of a trust securing income for her support, and, subject to that, a gift of all the property to the testator's children; but the details of that general plan have been formulated in the terms of the will with such a degree of ambiguity and uncertainty as to have evoked a difference of opinion in the courts below, and to justify a careful consideration of the question presented.
The trust for the benefit of the wife was created by the fourth clause of the will. By the third clause the testator had given his homestead in Flatbush to his wife for life, together with the furniture and household appurtenances, absolutely and forever. His will then gives, devises, and bequeaths to his executors all the rest, residue and remainder of his real estate in trust during the life of his wife for certain stated uses and purposes. These were to pay to his wife two thousand dollars each year in quarterly payments of five hundred dollars, and out of the income remaining to pay all taxes, water-rates and assessments and all necessary repairs, and, in the final words of the clause, "apply the balance or remainder once a year, between my children, share and share alike, for their use, benefit and maintenance." The controversy between these parties begins with this clause. The appellants contend that it vested the whole and entire estate, except the life estate of the widow in the homestead, in the executors as trustees; that there was no estate in remainder created by the will, or which could descend without it; and that there were and could be no ultimate rights in the children except by and through the trust. So far as this clause is concerned, considered by itself and without reference to the later provisions, which are claimed to explain or qualify it, there would seem to be no ground for enlarging the legal estate of the trustees beyond one for the life of the widow. It is devised with that precise and definite limitation in the terms of its creation, and no purpose of the trust, as thus far indicated, requires in the trustees a legal estate beyond, or superior to, one for the life of the widow alone. The rule is settled in this state that the trustee takes a legal estate commensurate with the equitable estate, and that outside of that there may be remainders and future estates, or powers of sale adequate to terminate the trust. ( Crooke v. County of Kings, 97 N.Y. 421.) In the present case, under and by force of the fourth clause, the equitable estate bounded by the life of the wife dictated a legal estate in the executors having the same limitation, and the terms of the devise, as expressed in the will, correspond with the necessary legal result. There was, therefore, outside of the trust, a remainder in fee which went somewhere, and which either descended to the heirs at law upon the death of the testator, or was devised by the further terms and provisions of the will; and we cannot, under the fourth clause at least, get rid of the inquiry, upon the appellant's theory, that the entire legal estate vested in the executors and no remainder existed. It is further to be observed that in this clause the phrase "my children" plainly refers to the testator's four living children, who were then in his mind, and who were to share equally in the balance of income when his will should take effect.
The fifth and sixth clauses which follow serve to modify the trust in the discretion of the trustees, as it respects two specific parcels of the real estate. The executors were entrusted with a power of sale, which they were at liberty to exercise during the life of the widow and before the original period fixed for the termination of the trust. But upon such sale one-third of the net proceeds realized was to remain as a trust fund in the hands of the executors for the benefit of the wife, and the remaining two-thirds was to be divided, as the words are, "equally among my children, share and share alike." This power of sale in no manner enlarged or changed the quality of the estate vested in the trustees by the fourth clause. It was a power in trust which, in and of itself, and although perhaps connected with a right to receive the rents and profits, did not vest title in the trustees. ( Cooke v. Platt, 98 N.Y. 35; Chamberlain v. Taylor, 105 id. 192.) Of course it could add nothing to the scope and extent of the legal title vested in the executors for the life of the wife. Two things about this discretionary power, however, are worthy of consideration. It is again "my children" to whom the testator refers as distributees, and the expression does not mean and cannot mean such of them only as should be living at the death of his wife, for the precise purpose of the authority conferred was a possible distribution earlier than that event. The second thing demanding our attention and to rest in our memory is that, outside of the trust provision for the widow, the balance of proceeds of the sales goes at once and absolutely to the use and benefit of the children.
The eighth clause of the will has been quite prominent in the controversy, and two very different interpretations have been given to it, either of which its language will possibly bear. It reads thus: "Whereas, in this will is mentioned and described gifts, devises and bequests to my children, if any of them should be dead leaving issue surviving them, I do direct that the issue of any of my children deceased shall take the same share their parent would have received had such parent remained living, and to be divided among them, the said issue, share and share alike." I think its true meaning and office was to put in the place and stead of a child who should die before the testator, but leave issue surviving, such surviving issue as recipients of the parent's share, standing collectively in his or her place as one of the children to whom property is given. The general rule is that the death referred to, in the absence of any other named period, is one in the testator's life-time ( Vanderzee v. Slingerland, 103 N.Y. 53); and while the provision made was probably needless, in view of the protection afforded by the statute (2 R.S. 66, § 52; Matter of Wells, 113 N.Y. 400), that fact will not alter the construction, unless some other, making the clause necessary and effective, should be found to be both a possible one and within the testamentary intention. I am inclined to think, therefore, that the eighth clause of the will, instead of dictating our conclusion, must itself receive interpretation from our final view of the testator's intention. It is, however an argument of some force that the clause itself was needless, except upon a construction which postponed the vesting until the death of the widow. Granting its force in that respect, we shall see, I think, that it is more than balanced by other inferences founded upon the language of the same clause, and to which I shall later recur.
We come now to the tenth clause, which is the one mainly relied on by the appellants, and which reads thus: "After the death of my wife, I empower and direct the surviving executors to sell all of my real estate remaining unsold at public or private sale, in fee simple absolute by deed under seal, at the best possible price, and divide the proceeds equally among my children, share and share alike." The argument founded upon this provision is that there was an equitable conversion of the land into money at the date of the widow's death, and a gift over at that date of personal property merely; that the legacy given was not to come into existence until the prescribed event; and that the rule applicable is that where there is no gift except in the direction to divide at a future period, time enters into the substance of the gift, and the vesting rather than the enjoyment is postponed.
It is certain that there was no equitable conversion out and out and operating from the death of the testator, and none can be implied at an earlier date than the death of the widow, for none was directed prior to that event. The land, therefore, remained real estate at the death of the testator, unconverted in fact or in equity, so that the remainder in fee descended or passed by the will, and must be accounted for. We have already seen that it did not go to the executors whose legal estate was solely for the life of the widow, and was not at all enlarged by powers of sale which themselves conferred no title; and it seems imperative to say that the remainder passed by descent or devise to the four children who survived the testator, and were identical as heirs or devisees. In either case it passed subject to the trust and the powers of sale, and the appellants' position must necessarily be that the legal title to one-fourth of the estate which vested in the son Henry M. was defeasible and contingent, and subject to be defeated by his death in the life-time of the widow without issue, through the exercise of the power of sale imperatively commanded and the inevitable division of the proceeds among the children surviving the widow. The question thus becomes simply whether the power of sale and distribution of proceeds was a postponement of the time of enjoyment of an estate already vested and merely a plan or mode of division of such estate among those fully entitled, or a scheme to divest the estate of one or more dying without issue before the widow in favor of those who should survive that event. And thus, while disagreeing with the appellants as to the scope of the legal estate vested in the trustees and pursuing a somewhat different route, we are confronted with the same substantial question, which has been the pivotal point of the argument, in the form of an inquiry whether Henry M. took an absolute remainder in fee, or one contingent upon his survival of the widow and which by his earlier death was defeated so that nothing beneficial could pass to his widow by his will.
One other provision of the will and one contained in a later codicil should first be brought into view as bearing upon a correct conclusion. By the eleventh clause of the will the whole residue and remainder of the testator's personal estate was given one-third to the widow and two-thirds to the four children absolutely at his death vesting in them at that date, the designation used being still the one uniform and familiar phrase, "my children."
The material portion of the codicil reads thus: "Whereas, I have advanced to my son, John H. Tienken, for business purposes since the making of my aforesaid last will and testament, the sum of fifteen thousand dollars which he promises and agrees to refund with interest at five per cent per annum. Now, in the event that he fails to pay the same, I order and direct that the amount of said sum with interest thereon which is not paid at the time of my death, or at the time a division is made of my property as my will directs, shall be deducted from his share and benefit in my property as in my said will mentioned, and if he be dead, to be deducted from the share his issue would receive and the sum so deducted to be divided between my wife and children in manner as in said will mentioned, but excluding my son John or his issue from sharing in the sum so deducted."
Now, taking this will as a whole, in all its parts, and in view of its clear and obvious purposes, we deem it impossible to resist the conviction, which even impressed itself partially upon the surrogate and controlled the conclusion of the General Term, that the testator's intention and design, which he supposed himself to have accomplished, was to vest the whole of his estate in the four children living at his death, with a substitution of their issue for those who should then be dead, but postponing the possession and enjoyment of the real estate during the life of his wife so far and so far only as to secure for her the necessary annual income for her support. Whenever and wherever, consistently with the trust for her benefit, it was possible to give to the children an immediate possession without deferring it in the least degree, that possession is given at once and absolutely. In the fourth clause the entire balance of income, after the annuity to the wife and the current expenses of the real estate, is given to the children absolutely and without contingency or delay. Under the discretionary powers of sale one-third is invested to produce a trust income for the widow, but the remaining two-thirds escapes from the trust and goes to the children. Two-thirds of the whole residue of the personal estate is given to them immediately and without postponement because that provision in no manner harms or affects the trust for the wife, and when that trust ends, everything in equal proportion is to be divided among the children.
In the eighth clause the testator declares that there are in his will "devises" to his children. There are none upon the appellants' construction; only legacies, and those deferred. The word is used early in the will, before the final dispositions, but when those were in his mind and evidently contemplated. The word was not used negligently or carelessly, for the phrasing of the will indicates legal intelligence and fitness in technical expressions; and we are, therefore, bound to infer that in the thought of the testator there was a devise to his children which could only have been of the real estate subject to the trust.
It is significant also that the distribution in the tenth clause is in terms "among my children" share and share alike. It is not among my surviving children, among those who shall then be living, or among those and the issue of such as shall have previously died, but among "my children;" an expression already many times previously used and invariably in one definite sense, as meaning the four children living at his death, or represented by their issue if earlier deceased. The provision too is one merely for division and intended not so much to create a right as to sever an existing one. It is quite difficult to conceive that the testator used the words "my children" in an ambulatory, changing or ambiguous manner; that in his thought it meant or might mean four of them at his death, three of them upon a sale under the fifth clause, two of them at a sale under the sixth clause, and one or none at the end of the trust if such deaths should occur along the line; and that without any specific words of survival or any appropriate provision for the emergencies. It is more reasonable to say that the phrase used in one sense at the beginning and at the end of the will was used in the same sense in the clause of distribution.
In the eighth clause and in the codicil the testator refers to the share of a child, the share such child would have had if death had not intervened, and as belonging to or devolving upon the son or daughter at the moment when the will should take effect. The manner of its use indicates that it referred to a child's share in the whole estate rather than in some undefined part of it; and when direction is given that John's debt, if not paid at testator's death shall stand deducted from his share unless paid before the final distribution, and giving the wife a part of the deduction, there is contemplated as existing in John a share in the whole estate, his share, while the wife is living and before the ultimate distribution. If the testator had meant merely John's share in the personal estate he would have said so, since that might have been and possibly was insufficient to cover the debt.
In this connection, recurring as was promised to the phrasing of the eighth clause, it is worthy of notice that upon either of the suggested constructions it contemplates a share in the whole estate belonging to a child at the death of the testator and vesting in him at that date. Upon the construction which we have adopted of a death in the testator's life-time, it substitutes for the share which a child would have had at that date the same share vesting in his or her issue, and omits any provision for issue upon the parent's later death, because such issue would take it by inheritance at least. Upon the appellants' construction that the death referred to means a death before or after that of the testator and at any time preceding the death of the widow, it necessarily contemplates a share existing in each child at every moment of the prescribed period, and so as well at the death of the testator as at any succeeding day prior to the decease of the widow.
In the respects discussed the will very much resembles that upon which we passed in Goebel v. Wolf ( 113 N.Y. 405). There, as here, there was no direct gift of the residue to the children living at testator's death; there, as here, there was a trust for the support of the widow, followed by a direction to divide among the children; there, as here, the uniform words of designation were "my children," without words of survivorship or terms indicating selection among them; there, as here, there was a gift of personalty outright and advances made chargeable as against the share of a child. We held in that case that the estate, subject to the trust, vested in the children at the death of the testator, drawing that conclusion from the collective provisions of the will. I think the inference is quite as strong in the present case. The provisions of the will indicate a purpose to follow the legal rules of descent and distribution, modified only by the trust for the support of the widow. Of the proceeds of the discretionary sales one-third is held for the widow and two-thirds go to the children; the personalty is given in the same proportions; the trust estate is in lieu of dower, and at its close the proceeds go to the children.
The clause of sale and distribution must, therefore, be regarded as a direction and authority given for the convenience of division, and solely for that purpose. Having no other, it may become unnecessary and the devisees hold and retain the land in its real and actual character. The fiction of an equitable conversion is adopted only where it is a needed element to determine ownership. Equity will not resort to the fiction where the same right devolves upon the same persons whether the property be treated as money or land, and where no rights of third persons depend upon the conversion. When we have determined from a view of the whole will that the four children of the testator living at his death took vested interests in the property, subject only to the prior life estates of the widow and the executors, and subject also to the exercise of the powers of sale, we have rendered the question of an equitable conversion quite immaterial. If the gift was a bequest, it vested in the children living at the testator's death, because the fund given was certain to be created, resting upon no doubtful contingency, dependent upon no possible discretion, and sure to exist and devolve in enjoyment at the appointed time.
We have heretofore said that the rule of construction founded upon a gift flowing only from a direction to divide has many exceptions, and is to be used as an aid to ascertain the intention and not as a force to pervert it. I have observed in general that where it has prevailed it has been where no contrary intention was fairly indicated, and where its own force was somewhat strengthened and its indication corroborated by further facts. We feel quite satisfied in the present case that the trust postponed only the period of enjoyment and the sale was intended to conveniently sever the interests of those already entitled.
The judgment of the General Term should be affirmed, with costs.
All concur.
Judgment affirmed.