Summary
In Matter of Velie, 119 Misc. 15, 194 N.Y. S. 891, a will analogous to the one here directed the executors and trustees to set aside a fund sufficient to "guarantee" an annual "dividend" of $12,000, to pay the "income" from the fund to testator's widow in their discretion to keep the fund itself "intact," and at the widow's death to pay the fund in specified shares to his widow's heirs and to his two sons.
Summary of this case from In re Trust Under Will of CosgraveOpinion
June, 1922.
Stuart McNamara, for executors.
Harold E. Lippincott, special guardian.
In this proceeding a construction is asked of the following provisions of the will:
"Item 1. I will and decree that all my just debts and funeral expenses shall be paid out of my estate. Such a portion of my entire estate as is necessary to guarantee an annual dividend of Twelve Thousand Dollars ($12,000) a year, is to remain intact so long as my wife, Cordelia C. Velie shall live. The income created from this fund shall be paid to my wife, Cordelia C. Velie, at the discretion of the executors."
The total amount of the estate is $143,000, and the income thereon is insufficient to pay annually the amount directed by the testator. The question to be determined is whether the income only on the total fund is to be paid to the widow, or whether the executors and trustees may invade the corpus of the fund to make up the deficiency between the net income and the sum of $12,000 per year. The intention of the testator is first to be sought and when that intention is ascertained it is to be carried into effect. It would seem clear from the context of the will that the gift of the amount fixed was not an annuity, but was a direction to pay the net income. Matter of Gurnee, 84 Misc. 324, affd., without opinion, 165 A.D. 920; Matter of Dewey, 153 N.Y. 63; Booth v. Ammerman, 4 Bradf. 129, 133; and the discussion of the difference between annuity and income in Matter of Kohler, 193 A.D. 8. Without doubt the testator believed at the time of the execution of the will that his estate would be sufficient to assure the payment of the fixed sum. By a subsequent paragraph of the will he directed that upon the death of his wife "such portion of my estate as has been set aside to guarantee the payment of $12,000 income, shall be divided into three parts equally as follows: One-third to the heirs of my wife, Cordelia C. Velie; One-third to my oldest son, Craig C. Velie; One-third to my youngest son, John Deere Velie."
The language used in this will is quite similar to that in the wills construed in Delaney v. Van Aulen, 84 N.Y. 16, 20, and Spencer v. Spencer, 38 A.D. 403. In Delaney v. Van Aulen, supra, there was a direction to pay a specified sum a year as income. It was held that the provision for the life beneficiary was not a demonstrative legacy and was, therefore, not payable from the corpus of the fund in case of a deficiency of income to satisfy the full sum directed to be paid by the will. In Spencer v. Spencer, supra, the testator directed that his executors set apart a certain portion of his real estate sufficient to "yield at all times a yearly net income of $25,000" to be paid to his wife during her life. Chief Judge Cullen was of the opinion that the gift was neither a demonstrative legacy nor an annuity, but a gift of rents and profits up to a specified sum. So here, the testator's intention is evidenced by the use of the words "such a portion of my estate as is necessary to guarantee an annual dividend of $12,000," and by the words " income created from this fund" in item 1. It is to be noted, also, that the word " income" was repeated by him in the 3d paragraph of the will. The provisions of the will indicate no intention to prefer the widow over his children, who are designated as the remaindermen of this fund. If the corpus was permitted to be invaded to make up the deficiency, the entire fund would, in all probability, be exhausted before the death of the widow.
Submit a decree, therefore, construing the will accordingly, and directing the payment of the net annual income only to the widow for life.
Decreed accordingly.