Opinion
March 4, 1908.
George H. Ansley and D.W. Congdon, for the appellants.
E.D. Northrup, Rodney R. Crowley, A.R. Conley, James O. Clark and William G. Laidlaw, for the respondents.
The decree should be modified so as to allow the estate of Mrs. Wilcox full commissions on the corpus of the fund, and as so modified affirmed, with costs to respondents represented by Attorneys Laidlaw, Crowley and Conley, payable from the fund involved.
The main controversy here is over the latter part of the 7th clause of the will of Bethuel McCoy, as modified by the 2d codicil to such will.
The will was executed August 1, 1872, and the 2d codicil August 6, 1875. The decedent died May 12, 1876. His daughter, Mrs. Saunders, died intestate December 23, 1875, before her father's death. At decedent's death he left two sons, William and Charles, and one daughter, Mrs. Wilcox. By the 7th clause of the will as modified by the 2d codicil decedent disposed of the residuary of his estate after making several devises and legacies, viz.:
By the first provision thereof he gave one-third of such residuary estate to his daughter, Mrs. Saunders, for life, and then to her two children each $2,000, and the balance to the husband of Mrs. Saunders.
By the second provision thereof he gave another one-third of such residuary estate to his son Charles for life and then to his two children Maggie and Mary.
And then by the third provision thereof he gave the remaining one-third of such residuary estate to his executor in trust for the purpose of paying the income to his daughter, Mrs. Wilcox, for life, and then to her issue, the income thereof during their minority, and as each arrived at the age of twenty-one years he gave his share of the principal to him absolutely, and in case Mrs. Wilcox should die without issue who arrived at the age of twenty-one years then he gave to his daughter, Mrs. Saunders, the one-half thereof during her life and then to her two children any balance of the $2,000 each aforesaid, and balance to her husband, and to his son Charles the remaining one-half.
This latter provision is the one over which the controversy arises.
Mrs. Wilcox survived the decedent, her father. She had had one child before the will was executed, who died in infancy, but had no children after her father died. Charles McCoy, executor and trustee named in the will, acted as such until he died, about 1898, and then Mrs. Wilcox was appointed such trustee of the fund under the will and remained such until she died. She received the income therefrom for thirty years after her father died, and January 6, 1906, herself died, leaving the fund then amounting to $7,583.77. She left a will, and the decree in question was made upon an accounting by her executor for this trust fund. The surrogate decided that the provision in favor of Mrs. Wilcox was valid, that in favor of her issue was void, and that in favor of Mrs. Saunders, her children and husband and Charles McCoy was alternative in its nature and as such was valid.
The appellants are the children of William McCoy, now deceased, and Congdon, a residuary legatee under Mrs. Wilcox's will. Their claim is that the whole of the provision as to the last one-third of the residuary estate was void, and that decedent died intestate as to such one-third. It is conceded that the provision as to Mrs. Wilcox's issue was void, and the principal question here is whether the alternative provision was properly upheld, in view of the invalidity of the provision as to issue.
The estates here provided for were alternative under the provisions of the Revised Statutes and the Real Property Law, viz.: "Two or more future estates may also be created, to take effect in the alternative, so that if the first in order shall fail to vest, the next in succession shall be substituted for it, and take effect accordingly." (1 R.S. 724, § 25; Real Prop. Law [Laws of 1896, chap. 547], § 41.)
The same rule applies to personal property. (See 1 R.S. 773, § 2; Pers. Prop. Law [Laws of 1897, chap. 417], § 2.)
In this case the first one failed to vest, Mrs. Wilcox left no issue whatever and thereupon the second one was substituted for it, and took effect accordingly. There can be no doubt as to the intention of the testator and the real scheme of the will. The first alternative estate provided for was illegal. It suspended the power of alienation too long. But there was never any occasion to apply that provision, there never having been any issue of Mrs. Wilcox. It is claimed nevertheless that the whole provision as to the disposition of this one-third of the residuary estate must fail because the provision as to Mrs. Wilcox's issue was illegal. It was said in Brown v. Quintard ( 177 N.Y. 75, 85): "`Where a trust is a part of a single scheme, the principal object of which cannot be carried out, the whole scheme falls and no effect can be given to any part of it.'" That principle was of course sound and was properly applied to the facts of that case; but it is not applicable in this case because here the scheme and object of the testator and of the will can be precisely carried out. There having been a failure of issue of Mrs. Wilcox, the property goes to the persons the testator intended should have it. No injustice will result from upholding this provision of the will such as was pointed out in the case cited. No injustice of any kind to any one.
In Schettler v. Smith ( 41 N.Y. 328) this question was considered and Judges GROVER and DANIELS agreed that "Where a limitation is made to take effect on two alternative events, one of which is too remote, and the other valid as within the prescribed limits, although the gift is void so far as it depends on the remote event, it will be allowed to take effect on the happening of the alternative one."
There, as here, the first alternative provision was invalid, as suspending the power of alienation for too long a time, but as it resulted, only the second alternative became applicable, and that was upheld, notwithstanding the invalidity of the first one.
GROVER, J., said: "But for the prohibition of the statute, both dispositions would have been lawful and valid and either would have taken effect according to the happening of the events giving it vitality. The statute comes in and avoids one of the dispositions, leaving the other unaffected by its provisions. Why should not the latter take effect upon the occurrence of the events upon which it was made to depend? The authorities sustain its validity."
DANIELS, J., said: "Two distinct and independent limitations were provided for the final vesting of the remainder. One dependent upon an event allowed by law, the other upon an event falling within the statutory prohibition. The former being valid, could no more be impaired by the latter than it would have been if the latter had been entirely omitted by the testator. * * * It is well settled that the limitation lawfully made shall be sustained, even though that depending upon the other contingency may be altogether inoperative and void." These judges referred to the cases theretofore decided, and the text-book writers, in support of their views so expressed.
This was the law as laid down by the Court of Appeals then, and I am not aware that it has ever been changed or varied, though the case has been frequently cited by the Court of Appeals since, and not always correctly quoted from. (See Hascall v. King, 162 N.Y. 152, 153, and cases there referred to.) It must control the determination of this question in the present case.
The surrogate refused to allow the estate of Mrs. Wilcox full commissions on the corpus of the fund, but allowed only one-half commissions. She had the whole income and, therefore, had any commissions to which she would otherwise have been entitled thereon. The one-half commissions on the corpus of the fund were allowed for receiving it. She never paid it out, but died with it in her possession. The commissions allowed in name for receiving and paying out the fund are really for the care and management of the same, and inasmuch as Mrs. Wilcox was properly made trustee and performed the service of caring for the fund, and her executor will have to distribute and pay over the same to the parties held entitled thereto, I think the estate is entitled to the full commissions for receiving and paying out the fund.
No separate commissions are given for receiving or paying out the fund, but the whole commissions are given for receiving and paying out the same.
All concurred, except SPRING, J., not voting, and ROBSON, J., who dissented and voted for reversal.
Decree modified so as to allow the estate of Mrs. Wilcox full commissions on the corpus of the fund, and as so modified affirmed, with costs to respondents represented by Attorneys Laidlaw, Crowley and Conley, payable from the fund involved.