Summary
In Booth v. Baptist Church (126 N.Y. 215, 248) an attempt was made to give effect to an unauthenticated memorandum by reference.
Summary of this case from Matter of BouvierOpinion
Argued March 16, 1891
Decided April 14, 1891
Henry M. Taylor for Matthew Vassar, Helen M. Haight and others, appellants.
Hannibal Smith for John Harbottle and Mary Ann Huntington, appellants. Joseph Fettretch for Caroline Vassar, administratrix, and Charles G. Vassar, appellants.
Hackett Williams for Robert G. Vassar, appellant. Charles Herrick for Vassar Brothers Institute, appellant.
Walter Farrington for First Baptist Church, respondent. Frank Hasbrouck for Vassar Orphan Asylum, respondent.
Homer A. Nelson and Frank B. Lown for executors, respondents. Allison Butts for Vassar Brothers Hospital, respondent.
John P.H. Tallman for Vassar Brothers Home for Aged Men, respondent.
John Guy Vassar made his last will and testament, declaring his general purpose at the beginning of his dispositions in these words: "Having no lineal heirs my desire and aim in the disposition of my property are to do the most good, and to forward the cause of humanity." His collateral relatives, mostly cousins, and to the number of about fifteen, availing themselves of their legal right to warp his purposes and divert to their own use what he devoted to charity, have assailed all the substantial dispositions of the testator as illegal and invalid. The provisions for the benefit of Vassar College have in part been saved from the risks of the litigation by a compromise, and have been withdrawn from the peril to which they were originally exposed; but enough of the dispositions remain to involve a very large portion of the estate, and to require of us a determination as to their construction and validity.
The testator attempted to give to the "John Guy Vassar Orphan Asylum" a large amount of real and personal property. When he made his will and at the date of his death no such institution had been incorporated or come into existence. To meet that difficulty the will directed that the executors, as soon as practicable, should procure from the legislature an act of incorporation under which the institution should be organized, and thereupon the property devised and bequeathed should be transferred to it. The executors obeyed the direction. Such an act was passed about four months after the testator's death, and the corporation at that time created claims to be entitled to receive his intended bounty. The collaterals object that the devise and bequest are void as suspending the power of alienation of real, and the ownership of personal property for an indefinite period, not measured by lives in being. The authorities in this court from Leonard v. Burr ( 18 N Y 107) to Cruikshank v. Home for the Friendless (113 id. 337), fully support the contention of the next of kin. They hold in substance that such suspension may be effected either by the creation of a trust which renders the property inalienable while the trust estate continues, or by creating a future estate by way of executory devise or contingent remainder. Of the latter class of cases it was said that "as it cannot be known in whom the future estate will ultimately vest, and as the person in whom it will so vest may not be in existence, no person can convey an absolute fee." Under the present will the attempted gift was both executory and contingent. The devisee and legatee was not in existence. The will contemplated its future creation, but by an independent authority, which neither the testator nor his executors could control, and which might for fifty years or forever refuse an act of incorporation. During all that period the power of alienation and the absolute ownership would be suspended, for no person could convey a perfect and absolute title.
Two efforts in this case have been made to obviate the difficulty and answer the objection; one by the Special Term, whose opinion was adopted by the General Term on appeal; and the other by the counsel for the orphan asylum on the argument at our bar. The learned judge at the Special Term maintained, as I understand his opinion, that upon the death of the testator the property went to the executors in trust to pay debts and funeral expenses, then to pay legacies, and finally to distribute; that the testator had not extended the time for distribution; that the legal title remained in the executors for the purposes of the trust until the time for distribution came; and that it then went to the orphan asylum, which, at that time, was incorporated and capable of taking. Without attempting to discover the exact doctrine intended to be expressed, it is at least obvious that no trust in the executors was created and no trust estate vested in them; that they held the property simply as executors, without title to the land or ownership of the legacies. In one sense their position was that of trustee because of their official agency, but it is a novel suggestion that where no express trust has been created the executor nevertheless takes one by implication in order to pay debts and legacies and make distribution. We need not pursue the subject, however, since the counsel for the orphan asylum not only admits, but vigorously asserts, that the testator created no trust in the executors and vested in them no estate, and that they held simply in their official capacity and under the law. The Special Term opinion seems further to be founded upon an idea that the will postponed the vesting until the time of distribution, and so, the case is like Shipman v. Rollins ( 98 N.Y. 311). The will did postpone the vesting for some indefinite period of time, and that is the exact difficulty which we encounter. During that period the ownership of the fund bequeathed is in abeyance. It is not in the executors, of course; it is not given to the next of kin, but bequeathed away from them; they do not take it by descent, unless the bequest is void; the legatee had not come into existence; and so, if we assume the validity of the legacy, its ownership is left in abeyance for an indeterminate period not measured by lives. That it is measured by the time given the executors for the performance of official duty does not help the situation. Whatever the measure provided, the title to the land and the ownership of the fund is in abeyance; their vesting is postponed; there is a suspension not permissible because not within the statutory allowance. It is exactly in that respect that the present case fatally differs from Shipman v. Rollins, since there the vesting was postponed for a single life, and the court held that a bequest limited to the use of a corporation to be created within the period allowed for the vesting of future estates and interests is valid. The vesting here was put outside of the permitted period.
But the counsel for the orphan asylum presents for our consideration a different theory. He holds that there was no suspension at all for any time, because the fee of the land and the ownership of the fund devolved upon the heirs and next of kin, and subject to be divested by the execution of a power in the executors to convey to the orphan asylum. He argues that the power unexecuted is not an estate, but amounts only to a lien, which does not suspend the power of alienation or the absolute ownership, and so, the title may go to the legatee, when incorporated through the execution of the power. But, so far as the personal property is concerned, I doubt if any special power remained when the will took effect. The provisions of that instrument which authorized the executors to purchase land for the asylum and expend money in repairs or a new construction were rendered needless by the testator's own act in purchasing the college hill property and fitting it up for use. What remained was simply the duty of paying over the legacies bequeathed at the proper time, and such payment was merely the duty of an executor and not at all the execution of a power. But if, to some extent, a special authority remained, which affected the personal estate, and could be treated as a power it is exposed to the same difficulty which, as we shall see, attends the power framed for the transfer of the real estate. That was not in terms specifically devised, and it may be that under the will and codicil read together the asylum was to get its title through the execution of a power of transfer given to the executors. Assuming that to be so, the power was, as the respondent's counsel describes it, a mere naked power to transfer the title. The law would execute it without a conveyance, and by either process it still remains that the will contemplated and planned a future and contingent estate in the corporation to be created which should vest at an indefinite future period not measured by lives. It is not lawful to create a perpetuity by means of a power in trust any more than by a direct limitation, and even on the learned counsel's theory one was created. Assume that the fee of the land and the title to the fund descended to the heirs and next of kin, and they held it subject to the execution of the power, does it at all follow that they could transfer an absolute fee in possession? Possibly they might be deemed to hold a defeasible title, a base or determinable fee, but that is very different from an absolute fee. They could not convey such an interest or title for they did not have it. The case upon which the learned counsel relies on this branch of his argument is that of Blanchard v. Blanchard (4 Hun, 289), affirmed in this court without an opinion. ( 70 N.Y. 615.) The power in that case was described as a mere lien or incumbrance which did not lessen or weaken the absolute fee of the holders of the residue. But the power there was simply a power of sale which might, indeed, change the form of the property, but not its ownership. The court held that on a sale the owners would have the proceeds just as they had possessed the land; that they could transfer the entire estate, whether real or changed by the power into personal, and used this language to describe the situation, viz.: "In the case before us the residuary devisees took an estate in fee which, notwithstanding the incumbrance of the power, is neither defeasible nor conditional, and they may alienate it at pleasure." Here the power is of a very different sort. It is one which makes the supposed estate in the heir both defeasible and conditional; which operates not merely to change the form of the property without touching the ownership, but takes away and destroys the ownership itself; which strips the heir and vests the estate elsewhere. Such a power is vastly more than a mere lien or incumbrance. It operates to create a future contingent estate in the beneficiary whenever the latter should become incorporated and be capable of taking, and creates an estate which, when referred back to the donor of the power, is a future and contingent estate suspending alienation and ownership until the contingency happens which enables the estate to vest. Sections 128 and 129 of the chapter regulating and defining powers bring them within the rules forbidding a perpetuity. The first requires us to compute the period during which the absolute power of alienation may be suspended by any instrument in execution of a power from the date of the creation of the power; and the second, that no estate or interest can be given to a person by an instrument in execution of a power which such person would not have been capable of taking under the instrument by which the power was granted. It follows that if the testator, by a direct devise, could not have carried the estate to the devisee except by limiting the necessary suspension to not more than two lives, neither could he do so through the agency and intervention of a power. I do not see, therefore, that the devise and bequest to the orphan asylum can be saved by any of the theories framed for that purpose.
Its counsel cites at length in his brief two cases sustaining his contention. ( Burrill v. Boardman, 43 N.Y. 254, and Inglis v. Sailors' Snug Harbour, 3 Peters, 99.) The first states the question to be decided thus: "Whether an executory bequest limited to the use of a corporation to be created within the period allowed for the vesting of future estates and interests is valid." And the doctrine stated in the other is that "a limitation contingent upon the competent exercise of legislative power, within the period of the lawful suspension of the ownership of property, cannot be said to be unlawful although the contemplated action of the legislature may not be in accordance with any existing law." I have found no case and no doctrine which would sustain the devise and bequest assailed. It must, therefore, be declared invalid.
What has been said renders inevitable a similar disposition of the bequest to the Baptist Church. The provision of the will for the benefit of that corporation is expressed thus: "I give to the Baptist Church of Poughkeepsie, situate in Mill street, in the city of Poughkeepsie, the sum of ten thousand dollars in ten one-thousand dollar bonds towards paying the mortgage and other debts of the church, provided said church shall raise a sum sufficient, with this legacy, to pay off such mortgage and other debts of said church within two years of my decease; and in case of failure to do this, then this legacy shall lapse and go into the residuum of my estate." If the condition which qualifies this bequest is a condition precedent and the contingency contemplated must happen before the legacy can vest, we have another instance of a perpetuity and another invalid bequest. In that view of the provision of the will the case is like Rose v. Rose (4 Abb. Ct. App. Dec. 108), in which a legacy was directed to be paid to a charitable society whenever, within five years, an additional sum of three hundred thousand dollars should be raised for its purposes, and was deemed to have fallen under the ban of the statute. The result is resisted in the present case by raising a question of construction. We are asked to say that the legacy vested at the death of the testator, and that the condition imposed was both a condition subsequent and within the power of the legatee to perform through the action of its own members. In the Rose case it was decided that the gift did not vest at the death of the testator, and while the language used was not identical with that employed in the will before us, the difference is not favorable to the claim of the church. In the former case the expression was "whenever" within five years the sum should be raised, and the words here are "provided" that within two years the sum should be raised. There are no technical words which indicate the difference between conditions precedent and subsequent, and the question is always one of intention. ( Nicoll v. N.Y. Erie R.R. Co., 12 N.Y. 130.) In the present case it is quite clear that the proviso qualified the vesting of the gift. The testator's purpose was not to give at all unless by the process the church debt could be effectually wiped out. He meant that his proposed legacy should serve as an inducement or stimulant to open the purses of the church members, and to withhold his liberality unless they manifested theirs. He makes it quite clear that there is to be no gift until his condition is fulfilled, for he treats the fund as belonging to his estate and subject to his absolute disposition if the condition is not performed. He provides that in such event the "legacy shall lapse and go into the residuum" of his estate. A lapsed legacy is one which has never vested or taken effect. It has been defined as "one which, originally valid, afterwards fails because the capacity or willingness of the donee to take has ceased to exist before he obtained a vested interest in the gift." (13 Am. Eng. Encycl. of Law, 28.) The provision for a lapse is the reverse of a forfeiture. The words "shall go into the residuum" further indicate the testator's understanding that until condition performed, and within the specified period, he could dispose of the fund as he pleased, and without resort to proceedings for a forfeiture. He perfectly understood and appreciated the vital difference between the two kinds of conditions and discriminated between them by the use of appropriate language. When, in another provision, he gave principal sums to a legatee upon conditions to be afterwards performed according to the terms of an existing contract, he fully comprehended that the gift was upon condition subsequent, and in giving it over for failure of performance, he said: "And in case the said terms and conditions are not kept and performed, then, on such breach and forfeiture, I give," etc. And so, drawing the distinction between a lapse in one case and a forfeiture in the other, he plainly distinguished between precedent and subsequent conditions. The gift to the church, therefore, was upon a condition precedent, did not vest at the date of the testator's death, but the ownership was left in abeyance awaiting the result of a contingency, and effected a suspension not measured by lives. We must, therefore, declare it invalid.
But the "cause of humanity" made one more struggle against the flock of collaterals, and shifted the controversy to the disposition of the funds involved in the defeated legacies. The will contains a residury clause in these words: "I give and devise all the rest and residue of my estate to the John Guy Vassar Orphan Asylum when incorporated, the Vassar Brothers Hospital and Vassar College, equally, share and share alike." This, on its face, is a general residuary clause. The three legatees took the residuum as tenants in common, each being entitled to an undivided one-third. The collaterals contend that the residuary legatee must be a general legatee to take anything that does not pass by the will; that the corporations could not become general residuary legatees unless the residue should be given to them as a class; that the residue here was not given to them in that manner but severally and to each one-third; and that the intention of the testator was to prevent void and lapsed legacies from falling at all into the residuum. To establish this intention they rely upon the thirty-eighth clause of the will, which follows the residuary clause, and is in these words: "In case any of the gifts or devises hereinabove given shall be adjudged void or illegal for any reasons, then I give and devise the property mentioned and described in such void or illegal gifts and devises to my executors hereinafter named in trust for them to carry out and accomplish the end and objects designed by me in such void and illegal gifts and devises." Three things are to be said about this provision. It is conceded to be illegal and ineffective as a devise or legacy and that it carries nothing to the executors. If, nevertheless, it may be considered as disclosing the testator's intent, which is asserted on the part of the collaterals, and indicates an intention not to merge lapsed legacies in the residue, it indicates also a strong and decided intention not to dissipate them among the collaterals. But its reference is to the void devises and bequests "hereinabove" given. The residuary disposition is one of the devises and bequests above given, and I think the testator's meaning was to carry over to his executors only such dispositions as utterly failed; those which were entirely undisposed of; and not those which, failing in one direction, were yet within the scope of the residuary clause, and saved by it. Any other construction must set the two provisions at odds and convict the testator of antagonistic purposes. And so I think that the thirty-eighth clause is not restrictive of the real residuary gifts, and we may construe it as it reads. We know from the testator's express direction that one lapsed legacy, that to the church, was to go into the residue, and so may the others without any added violence to the terms of the will.
Now it is true that some expressions are found in Kerr v. Dougherty ( 79 N.Y. 349), which indicate that a legacy to several as tenants in common of a residue is not to them as a class, and does not make them general residuary legatees. That was said, however, relatively to the rights of the residuary legatees to a residue of a residue, and in a case where, practically, there was no residuary clause at all. The whole subject was at a later period considered in Matter of Accounting of Benson ( 96 N.Y. 509). The clause there was: "All the rest, residue and remainder of my estate, both real and personal, whatsoever and wheresoever, whereof I shall die seized, possessed or entitled unto, I give, devise and bequeath as follows, to wit," two-fifths to his brother William, one-fifth to each of two nephews, and one-fifth in trust for his wife. We described that as an "absolutely general residuary clause," although there was no gift to a class, but severally to the legatees, and we held that all lapsed and void legacies fell into the residue and became part of it. And so we must hold in the present case. The legacy to the church and those to the asylum, whether special or otherwise, fell into the residue and increased its volume. To one-third of that residue, thus swollen by the void legacies, Vassar College is entitled; to another third the Vassar Brothers Hospital has lawful claim; but the remaining third must go the heirs and next of kin. This result follows because the residuary gift to the orphan asylum of one-third itself fails, and the rule appears to be settled that, where by such a failure there is produced a residue of a residue, it does not go in augmentation of the other several shares, but passes to the heirs and next of kin. In Beekman v. Bonsor ( 23 N.Y. 312), it was declared to be clear upon the authorities that a part of the residue, of which the disposition fails, will not accrue in augmentation of the remaining parts as a residue of a residue, but, instead of resuming the nature of residue, devolves as undisposed of. To the same effect are later cases. ( Kerr v. Dougherty, supra; Floyd v. Carow, 88 N.Y. 570.) As to one-third of the increased residue, the testator, therefore, died intestate, and it devolved according to the law.
Thus far we have been compelled to disagree with the courts below, but we come now to a class of bequests which those courts preserved, and as to which we are glad to be able to concur. The testator gave certain principal sums to the Home, the Hospital and the Institute, respectively, upon condition that each should pay annuities of specified amounts equal to the accruing interest to certain persons for their lives, and it is contended that these bequests are invalid because none of the corporations can take without transcending their charters and applying their property not to the relief of the aged, or the advancement of learning, or the care of the sick, but to the personal benefit of persons not at all within the description of the corporate beneficiaries. Numerous cases are cited of corporate attempts to pass charter boundaries by contracts and conduct ultra vires, but none of which are applicable to the present case. Capacity to take the gifts did not require that the corporations should apply their own money or property to unauthorized purposes, for substantially and in effect the principal only was given them and the interest and income was bequeathed to the annuitants. The latter were tenants for life and the former remaindermen in one and the same fund, and the respective interests, however mingled in fact, were several and distinct in law. It is answered that, if the rate of interest falls, the annuities remaining unchanged, there will be a deficiency which the corporations will be compelled to supply from their own funds. Even that emergency the testator provided against. He selected out the securities intended to be given, describing them in an extrinsic memorandum, and then adds: "But if, for any cause, the securities selected by me for this purpose should fail to realize the amount of said several annuities, then I charge the payment of any and all deficiencies on my several residuary legatees under this my will, equally." In other words, the annuities in every event were to be paid out of funds by him provided and set apart for that purpose, and in no respect and to no extent out of the property of the corporations. That the Institute was also one of those residuary legatees, does not alter its situation, for, in case of a deficiency, it is still the money of the estate which supplies it, and to that extent reduces the residuary gift. It is very certain that the testator might have given the fund to a trustee in trust to pay the income to two annuitants for life, with remainder to the corporation, in which case the latter would have become equitable owner of the principal and the annuitants of the income. But a formal express trust was not necessary. The principal could be given directly to one and the income for life to another, and, to whichever of the two custody of the principal was given, the choice would not alter the ownership, and equity would recognize the several rights, and protect one party from waste of the principal and secure to the other his full income. The corporations were thus not required to appropriate their own property to unauthorized purposes, but preserving the principal for themselves to pay over the income which was not theirs to the true owners. In doing that, they would simply be taking their part of the gift, and not parting with their own property. I do not feel the need of authorities to justify the validity of such action, but if one is needed, it will be found in Matter of Howe (1 Paige, 214).
A further question has been argued at some length and comes up on the appeal of the Vassar Institute which claims that certain legacies decided to be general are made specific by the terms of an extrinsic memorandum referred to in the will, and the sole question is as to the effect of the memorandum. One of the gifts was "of ten thousand dollars in one hundred shares par value one hundred dollars a share of the capital stock of some good railroad or coal company guaranteed, to be selected from my securities as its own." The testator then added: "Among my papers will be found a memorandum of the various securities I have selected for the payment of the several legacies." Such a paper was found preserved with the will. It was entitled in the testator's handwriting: "List of securities which I wish transferred to different institutions under my will of Feb'y '85. John Guy Vassar." The list set apart, among other things, to the Institute "$10,000 or 100 shares N.Y., Lackawanna Western guaranteed R.R. stock a 5 pr. c. for John G. Vassar." The question arising is whether this memorandum is to have effect as an integral part of the will, and so shall convert what by that instrument is either a general or demonstrative legacy into a specific one; and that involves the further inquiry whether the memorandum is a mere identification of the thing given, or is testamentary in its character. It is unquestionably the law of this state that an unattested paper which is of a testamentary nature cannot be taken as a part of the will even though referred to by that instrument. ( Langdon v. Astor's Exrs., 16 N.Y. 26; Williams v. Freeman, 83 id. 569; Matter of the Will of O' Neil, 91 id. 523.) I am satisfied that this memorandum is testamentary in its character. By the will no specific securities were given as is fully conceded. The effect of the memorandum is more than an identification. If the legacy framed by the will had been specific and manifested a purpose to give some particular security or securities, and among these found in the assets there proved to be a larger number, so that doubt arose as to the specific securities intended to be given, an extrinsic memorandum referred to in the will to identify the thing given might be considered. But that is not the case here. The office of the paper, if it shall operate at all, is to give specifically what was not so given by the will; to change its terms in a material respect; to alter a bequest and modify the rights of the legatees. Such a paper, we think, cannot be received as a part of the will to affect and modify its terms, and change what was a general or possibly demonstrative legacy into a specific one.
Other questions raised by the will need not be discussed. We concur with the Special and General Terms as to all the dispositions of the will except so far as we have expressly disagreed. The result is that the judgment of the General Term should be modified by declaring the devise and bequest to the orphan asylum invalid, as also the bequest to the Baptist church herein referred to, and by adjudging that such void gifts fall into the residue and form part of it, but that the one-third of such residue given to the orphan asylum goes to the heirs and next of kin as in the case of intestacy, and as modified the General Term judgment should be affirmed.
I have given some serious reflection to the question of costs. We are required to allow them, if at all, upon equitable principles. The claims of the collaterals compelled this litigation. They put all the other parties upon the defensive and succeeding in some respects have failed in others and claimed more than belonged to them. What they wrest from the charities is against the intention of the testator and in spite of his avowed purpose. What he did give effectually should not be lessened by the success of those whom he meant to exclude in the respects here at issue. And so I think that no costs should be awarded to the orphan asylum or to the Baptist church, but the costs of all other parties in all the courts should be paid out of that portion of the estate as to which the decedent died intestate and which devolves upon the heirs and next of kin.
Judgment should be entered accordingly.
All concur.
Judgment accordingly.