Summary
stating that "the law favors the vesting of estates at the earliest possible moment, and it is well settled in Ohio that a remainder after a life estate vests in the remainderman at the death of the testator, unless an intention to postpone the vesting to some future time is clearly expressed in the will"
Summary of this case from In re PughOpinion
No. 28811
Decided March 4, 1942.
Wills — Construction — Will speaks from testator's death — Earliest vesting of estates favored — Remainder after life estate vests at testator's death, when — Payment postponed for convenience of estate — Subject-matter of legacy appropriated to life beneficiary — Request of annual sum for life and unconsumed portion to heirs — Remaindermen ascertained by descent and distribution statutes operative at testators death.
1. Ordinarily, a will speaks as of the death of the testator.
2. The law favors the vesting of estates at the earliest possible moment, and a remainder after a life estate vests in the remainderman at the death of the testator, in the absence of a clearly expressed intention to postpone the vesting to some future time.
3. To the frequently stated general rule that if there is no gift in a will but by a direction to pay at a future time or event, the legacy will not vest in the beneficiary until the time for payment arrives, is the well recognized exception that where the postponement of payment is for the convenience of the estate, as the appropriation of the subject-matter of the legacy to the use and benefit of another for life, the ultimate interest will vest at the death of the testator. Under such exception, the postponement of payment relates merely to the enjoyment of the legacy and is not attached to the substance thereof.
4. Where a testator wills a part of his estate to another, directing that she shall receive therefrom a stipulated sum annually for and during her natural life and further provides that after her death the unconsumed portion shall be paid to "my heirs, share and share alike," the remainder in such portion of the estate as may be unconsumed by the life beneficiary vests at the testator's death in such person or persons as then answer the description of testator's heirs under the statute of descent and distribution in force at such time, unless a contrary design on the part of the testator is plainly apparent.
APPEAL from the Court of Appeals of Franklin county.
This proceeding originated in the Probate Court of Franklin county upon a petition to determine heirship, filed by The Ohio National Bank of Columbus as trustee under item XI of the last will and testament of George W. Bright, deceased.
From the "Stipulation of Facts " it appears that the testator, George W. Bright, a widower, died January 28, 1928, without surviving children and with no grandchildren. He had one sister of the whole blood, Mary E. Pittman, who died intestate in 1939, and several brothers and sisters of the half blood, the last of whom died in 1920.
In 1927 George W. Bright executed his last will and testament. At that time his sister had three living children and there were in existence several nephews and nieces of the half blood. During his lifetime Mr. Bright maintained a friendly attitude toward all his relatives.
A specific bequest of $5,000 was made by the testator to his sister, Mrs. Pittman, "if she be living; if she is not living at the time of my decease, then I direct my executors and trustees to pay to her heirs the sum of five thousand dollars ($5,000)." Other specific bequests, for the most part in much smaller amounts, were made to certain of his nephews and nieces of the half blood and to other persons. Specific bequests were also made to several institutions of a charitable, religious or educational character.
The testator devised and bequeathed to his son-in-law, Sinclair B. Nace, "widower of my beloved daughter," one-third of his entire estate in fee simple.
Item XI of the will, the last sentence of which is now all important, reads as follows:
"I give, devise and bequeath to my beloved foster daughter, Helen M. Quinn, * * * one-third (1/3) of my entire estate * * * which said bequest I direct my executors and trustees to pay to the said Helen M. Quinn the sum of two thousand dollars ($2,000) annually, to be paid in quarterly payments out of the income and principal from said one-third (1/3) of my entire estate. If the income from one-third (1/3) of my entire estate does not produce the sum of two thousand dollars ($2,000) annually, then I direct my executors and trustees to pay to the said Helen M. Quinn * * * such an amount as will make her annual payment the sum of two thousand dollars ($2,000) for and during her natural life. After the death of the said Helen M. Quinn, I direct my executors and trustees to pay the unconsumed portion of this one-third (1/3) of my entire estate, if any, to my heirs share and share alike."
Helen M. Quinn died in 1940, and that part of the testator's estate set aside by him for her benefit during her lifetime then amounted to approximately $60,000 in "funds and investments."
It was decided by the Probate Court that the interest in remainder under item XI of the will vested at the death of the testator in his sister, Mary E. Pittman, as his sole heir at law, and judgment was entered in accordance with such determination.
Upon appeal to the Court of Appeals, the judgment below was reversed by a divided vote, the majority holding being to the effect that the estate in remainder did not vest until the death of Helen M. Quinn in 1940, and hence distribution should be made by the trustee to the heirs of the whole and half blood within the terms of Section 10503-4(6), General Code.
Two of the individual parties favored by the judgment of the Probate Court filed a motion in the Court of Appeals to dismiss the appeal, upon the ground that the last paragraph of Section 10501-56, General Code, relating to appeals from the Probate Court, and under which section it was asserted the appeal had been taken, was unconstitutional. This motion was overruled.
Two children and a grandchild of Mary E. Pittman, disappointed by the judgment of reversal in the Court of Appeals, filed an appeal as of right and a motion to certify in the Supreme Court. The appeal as of right was dismissed for the reason that no debatable constitutional question was involved, and the motion to certify allowed. Ohio Natl. Bank, Trustee, v. Boone, 138 Ohio St. 629, 37 N.E.2d 544.
Messrs. Wilson Rector, for appellee, Helen Bright Boone.
Messrs. Pretzman Dillon, for appellee, Louise M. Drennen.
Mr. Wilbur E. Benoy, Mr. Russell G. Saxby and Mr. H. Leonard DeKalb, for appellants.
The question arising on this appeal is whether the remainder to the testator's "heirs" under item XI of the will vested in interest at the testator's death, or was postponed until the demise of the life beneficiary. If the vesting was immediate, the provisions of the statute of descent and distribution in force when the testator died are applicable and those of the whole blood alone benefit. If vesting was delayed until the death of the life tenant, then Section 10503-4, General Code, effective September 2, 1935 (116 Ohio Laws, 388), is controlling and distribution would be among those of both the whole and the half blood.
Ordinarily, a will speaks as of the death of the testator. Judy v. Trollinger, 110 Ohio St. 576, 583, 144 N.E. 44, 46. The criterion of a vested remainder is a present capacity to take. So, when there is a person in being who would have the right to possession immediately upon the determination of the particular intervening estate, the remainder is vested. In re Hutchinson, 120 Ohio St. 542, 549, 166 N.E. 687, 690. It is not the uncertainty of actual enjoyment, but the uncertainty of the right to enjoyment that makes a remainder contingent. Smith v. Block, 29 Ohio St. 488, 497. The law favors the vesting of estates at the earliest possible moment, and it is well settled in Ohio that a remainder after a life estate vests in the remainderman at the death of the testator, unless an intention to postpone the vesting to some future time is clearly expressed in the will. Bolton v. Bank, 50 Ohio St. 290, 33 N.E. 1115; Tax Commission v. Oswald, Exrx., 109 Ohio St. 36, 141 N.E. 678.
The devise or bequest of an estate for life, followed by a direction to divide or distribute such estate among others after the death of the life beneficiary, does not defer the time of vesting unless an opposite intention plainly appears. Linton v. Laycock, 33 Ohio St. 128; Collier v. Grimesy, 36 Ohio St. 17; Bolton v. Bank, supra; Johnson v. Johnson, 51 Ohio St. 446, 38 N.E. 61. In the cases of Sinton v. Boyd, 19 Ohio St. 30, 2 Am. Rep., 369; Richey, Exr., v. Johnson, 30 Ohio St. 288; and Hamilton v. Rodgers, 38 Ohio St. 242, words of survivorship or other compelling language was present evidencing a well defined purpose on the part of the testator that the remainder should not vest until the time of division or distribution arrived.
Uncertainty as to the amount of the remainder does not make such remainder contingent ( Min Young v. Min Young, 47 Ohio St. 501, 25 N.E. 168; Johnson v. Johnson, supra), and a gift for life, with power to invade the principal in whole or in part, is regarded as a life estate. Tax Commission v. Oswald, Exrx., supra. The use of adverbs of time, such as "after" and "when," in the bestowal of a remainder limited upon a life estate, is generally considered to relate to the enjoyment of the estate rather than to the time of its vesting in interest. Furthermore, "the fact that a devise or legacy is given through the intervention of a trustee is without bearing on the question whether it is vested or contingent. " L.R.A. 1918E, 1127.
It is earnestly contended by the appellee that the present controversy is controlled by the decision in Barr v. Denney, 79 Ohio St. 358, 87 N.E. 267, wherein to carry out the intention of the testator as interpreted by the court, the so-called "divide and pay over" rule was invoked to confer a contingent interest on the remaindermen, which did not become vested until the death of the testator's widow to whom the estate had been given for life. The fact that the gift over was of a fund to be created at the termination of the life estate was apparently an element influencing the holding.
Discussing the "divide and pay over" rule, it is said in 69 Corpus Juris, at pages 605 and 606, Section 1687:
"* * * if the only words of gift are in a direction to pay or distribute, or divide and pay over, at a future time or event, the futurity is usually regarded as being annexed to the substance of the gift and vesting is postponed until the time or event named. This, however, is a mere rule of construction, which will be applied only in subordination to the established rule that an estate or interest will be construed to be vested rather than contingent if possible, * * * numerous exceptions have been created to the rule just stated, and, because of this, it has been commented that the courts are much more disposed to admit the divide and pay over rule as a rule of law than they are to follow it."
Largely for the reason that the "divide and pay over" rule has lost its significance by engrafted exceptions, its validity is denied in 3 Restatement of Property, 1312, Section 260. Compare Section 308, at page 1722.
Attention is next directed to the case of Carter v. Carter, 234 Ill. 507, 513, 85 N.E. 292, 295, where the court remarks in its opinion:
"The appellants invoke the general rule that where the devisees compose a class and there are no words of devise except a simple direction to divide the property at a specified time, the gift will not vest until the time of division. * * * But conceding that the devise is to a class and is simply a direction to divide the property at an appointed time, it is said in Knight v. Pottgieser, 176 Ill. 368, that this 'general rule is subject to an exception so well established and universally recognized as to practically constitute another general rule, which is: Though a gift arises wholly out of directions to pay or distribute in futuro, yet if such payment or distribution is not deferred for reasons personal to the legatee, but merely because the testator desired to appropriate the subject-matter of the legacy to the use and benefit of another for and during the life of such other, the vesting of the gift in remainder will not be postponed but will vest at once, the right of enjoyment only being deferred.' "
Much the same thought is expressed by Judge Summers in the case of Exrs. of Eury v. State, 72 Ohio St. 448, 454, 74 N.E. 650, 651, when he says:
"For it is the rule no longer that where there is no gift but by a direction to pay, or divide and pay, at a future time, or on a given event, the vesting will be postponed until after that time has arrived, or that event has happened, but the test is the reason for the postponement, and if that was that the property had been given to another for life the bequest vested."
Again, in Blackstone v. Chandler (Del.Ch.), 130 A. 34, 35, this statement appears:
"It is sometimes stated as a general rule also that if there is no gift but by direction to trustees to pay at a future time, the legacy will not vest in the beneficiary until the time for payment arrives. * * * But * * * there is one well defined exception to its application * * *. It is this: That where the postponement of payment is for the convenience of the estate, as to let in an intermediate estate, the ultimate interest is regarded as in the nature of a vested remainder."
Every will construction case stands in large measure on its own bottom. The paramount rule to be followed is to try to ascertain the intention of the testator as found in the will, and to give it expression.
Speaking of the Ohio case of Barr v. Denney, supra, the court has this to say in Warner v. Commissioner of Internal Revenue (C.C.A. 2), 72 F.2d 225, 228 ( certiorari denied, 293 U.S. 620, 79 L.Ed., 708, 55 S.Ct., 215):
"There it was held that the remainder did not indefeasibly vest until the termination of the trust. The will directed the trustee after the death of the testator's widow, who was a life beneficiary, to sell the corpus of the trust, and, after paying expenses, 'to distribute equally to my legal heirs.' One of the testator's daughters died during the term of the trust leaving a husband who claimed a share in the remainder interest at the time of distribution. It was hard to suppose that the testator would have intended him to succeed to his daughter's interest and lessen the property distributable to the testator's children by so much. Accordingly it was not unnaturally decided that the remainder was contingent and that the members of the class entitled to take were determined only at the time when the trust ended."
An illuminating case, holding that the remaindermen after a life estate took a vested interest as of the death of the testator and reversing a previous decision to the contrary, is that of In re Roth's Will, 191 Wis. 366, 210 N.W. 826. With reference to the subject under consideration, it is stated in the opinion:
"The fundamental rule seems to be that where a legacy is postponed the time of vesting depends upon whether the postponement relates merely to the enjoyment of the legacy or whether it is attached to the substance of the gift. Where it is attached to the substance of the gift the vesting is postponed, but where the postponement relates merely to the enjoyment of the gift, vesting takes place as of the date of the death of the testator. Whether it is for one purpose or the other is sometimes a difficult question, but it is well settled that where a future gift is postponed in order to let in some other interest or, as it is sometimes expressed, for the benefit of the estate, the gift is vested although the enjoyment is postponed."
For a comprehensive treatment of the question whether a testamentary gift in the form of a direction to pay or divide is vested or contingent, see the note in L.R.A. 1918E, beginning at page 1097. See, also, 14 University of Cincinnati Law Review, 391; 41 Ohio Jurisprudence, 783 et seq., Section 655 et seq.; 49 A. L. R., 174, annotation; 127 A. L. R., 602, annotation; Wilmington Trust Co. v. Bronxville Trust Co. (Del.Ch.), 5 A.2d 248; Fay v. Fay, 336 Ill. 299, 168 N.E. 359; Schrader v. Schrader, 158 Iowa 85, 139 N.W. 160; Markham, Trustee, v. Waterman, 105 Kan. 93, 181 P. 621; Martin, Admr., v. Cook, 129 Md. 195, 98 A. 489; Brown et al., Trustees, v. Spring et al. Exrs., 241 Mass. 565, 135 N.E. 701; Cranstoun, Admr., v. Westendorf, 91 N.J. Eq. 34, 108 A. 776; Jennings' Estate, 266 Pa. 60, 109 A. 544.
Counsel point to a number of circumstances which they say indicate what the testator meant by the word "heirs" in item XI of his will, but his actual intent remains conjectural.
"* * * use in a will of the term 'heirs,' although at the time of the testator's death there is only one 'heir,' does not affect the application of the broad rule that the time for ascertainment of the class is the death of the testator, in the absence of a clear indication of a contrary intent." 127 A.L.R., 612.
Since the law strongly favors the immediate vesting of estates and since no factor stood in the way of realization by the ultimate beneficiaries except the right of Helen M. Quinn to benefit from the estate so long as she lived, it would seem but logical to say that time was affixed only to the enjoyment of the gift in remainder, whatever might be its amount at the termination of the life estate. We are therefore of the opinion that the interest in remainder vested at the death of the testator in such person or persons as then answered the description of his heirs within the statute of descent and distribution existing at such time. 16 Ohio Jurisprudence, 488, Section 107; 3 Restatement of Property, 1706, Section 308; Witty v. Witty, 184 N.C. 375, 114 S.E. 482.
For the reasons announced, the judgment of the Court of Appeals is reversed and that of the Probate Court affirmed.
Judgment reversed.
WILLIAMS, HART and BETTMAN, JJ., concur.
In our opinion this case comes within the principles declared in the case of Barr v. Denney, 79 Ohio St. 358, 87 N.E. 267, and was, therefore, correctly decided by the Court of Appeals.
WEYGANDT, C.J., and MATTHIAS, J., concur in the foregoing dissenting opinion.