Opinion
March 20, 1914.
John Ewen, for the appellant.
Howard W. Ameli, for the respondent, executor and trustee.
Thomas F. Murtha, for the respondent, Marion Chase Currey.
John V. Judge, guardian ad litem, for the infant respondents Milward S. and Ruth Muchmore.
It is within the jurisdiction of a court of equity to entertain a suit, at the instance of one of the next of kin of a testator not interested under the will, for the construction of the will involving the annulment of a trust or other disposition of personal property by will, and to declare a resulting trust in favor of the next of kin as against the executor who holds the property. ( Read v. Williams, 125 N.Y. 560; Tonnele v. Wetmore, 195 id. 436; Kalish v. Kalish, 166 id. 368.) The executor and trustee, who is a member of the bar in New Jersey, testified that voting trust agreements with respect to capital stock are lawful in that State, and that there is no limitation with respect to the period for which they may be created. But we are not concerned with the validity or effect of the directions, with respect to the management of the corporation through stock control, given by the testator, by paragraph 3 of the will, to his trustees. If the trustee should fail or refuse to observe the directions then those questions might arise between him and those beneficially interested in the stock, but they are not presented for decision now. We have merely to decide whether any attempted disposition of property by the testator is invalid. It is stated in the will that he gives and bequeaths this stock to his executors in trust for the period of twenty-five years. He not only attempted to make them voting trustees of the stock for that period, but he expressly authorized them to collect and distribute the income, if any, from the stock during that period and to pay the same to the legatee Currey so far as necessary to make up the amount of $2,100 given to her by paragraph 4, and to divide the surplus, if any, and all of it in the event of said Currey's death before the expiration of twenty-five years, between the testator's sister Florence and his nephew until the determination of the trust period of twenty-five years, with a proviso that on the death of Florence, her husband, if living, and if not, her children, should take her share, and if the nephew should die his share of such income was to go to the sister if living, and if not, to her husband, and if he should not be living, then to her children. In order to accomplish his purpose with respect to the development of the corporation, for the future financial success of which he evidently had high hopes, he attempted to suspend the absolute ownership, which includes the power of alienation of the stock, for a period not limited by two lives in being, but for a definite fixed period of twenty-five years in any event, in contravention of our statute against perpetuities. (Pers. Prop. Law [Consol. Laws, chap. 41; Laws of 1909, chap. 45], § 11; Hagemeyer v. Saulpaugh, 97 App. Div. 535.) The trust in one contingency was to be limited by the life of Mrs. Currey, but the testator expressly, clearly and pointedly declared it to be his intention that the trust should, even in the event of Mrs. Currey's prior death, continue until the expiration of twenty-five years. The will makes it as plain as meaning can be expressed that he intended to create a trust for the period of twenty-five years in any event, and since that is not a limitation to two lives in being it is void, at least in so far as it purports to be for twenty-five years. ( Herzog v. Title Guarantee T. Co., 177 N.Y. 86; Matter of Wilcox, 194 id. 288; Haynes v. Sherman, 117 id. 433.) The learned counsel for the appellant contends that the testator attempted to create but a single entire trust and that it must all stand or fall together. Counsel for respondents argue, however, that if the attempted suspension of absolute ownership for the period of twenty-five years be void, the trust may be sustained as one for the life of Mrs. Currey, on the theory that the trust provisions for her benefit are independent of and separable from the provisions for continuing the trust after her death until the expiration of the trust period of twenty-five years. The rule is well settled that that construction of a will which will sustain its validity in whole or in part and avoid either partial or total intestacy, is favored ( Kalish v. Kalish, supra), and, therefore, where a will contains one or more invalid trusts and one or more valid and independent lawful trusts, not forming an essential part of the general scheme of the will as a whole, the invalid provisions may be annulled and the valid ones sustained ( Simpson v. Trust Co. of America, 129 App. Div. 200; affd., sub nom. Simpson v. Simpson, 197 N.Y. 586; Matter of Wilcox, supra; Central Trust Co. v. Egleston, 185 N.Y. 23; Benedict v. Webb, 98 id. 460; Knox v. Jones, 47 id. 389; Hooker v. Hooker, 166 id. 156); and on the same theory invalid provisions which relate to and are connected with valid provisions, but not dependent thereon, will likewise be excised and the valid provisions to which they relate retained. ( Hascall v. King, 162 N.Y. 134.) It is argued that the provisions for Mrs. Currey may be sustained as an annuity and charge upon the residuary estate, even though they cannot be sustained on the theory of a trust. If the testator directed the payment of an annuity in a fixed amount to Mrs. Currey, it would be deemed a charge on the residuary estate without the intervention of a trust, even though he directed it to be paid out of income ( Clark v. Clark, 147 N.Y. 639; Dunham v. Deraismes, 165 id. 65; People's Trust Co. v. Flynn, 188 id. 385, 391, 393); and the lien on the residuary estate might be discharged by payment of the present value of the annuity ( Buchanan v. Little, 154 N.Y. 147; People's Trust Co. v. Flynn, supra); or sufficient of the residuary estate, if there were sufficient, might be set apart and retained by the trustee to produce and pay the annuity ( Clark v. Clark, supra); but here the annuity is not given absolutely, but it is expressly limited to income and made dependent upon the amount and sufficiency of the income. It is not, therefore, a charge upon the residuary estate in the sense that it may be paid out of the corpus thereof. The validity of the trust would seem, therefore, to be necessary to give Mrs. Currey the benefit of the provision the testator intended to make for her. A trust, however, for the life of Mrs. Currey to enable her to receive the income of the residuary estate to the extent specified in the will is one which was clearly authorized by law, and the trustee may hold the legal title for the purposes of that trust, even though with respect to the remainder the testator died intestate and it passed to and vested in his next of kin. ( Kennedy v. Hoy, 105 N.Y. 134; Matter of Wilcox, supra; Schlereth v. Schlereth, 173 N.Y. 444, 449.) On this theory the testator lawfully disposed of the entire income of the residuary estate during the life of Mrs. Currey. She takes it all, unless it shall exceed $2,100 per annum, and the surplus, if any, over that amount goes to the nephew and sister, and in the event of the death of either or both of them to the substituted beneficiaries specified in the 4th paragraph of the will. ( Schermerhorn v. Cotting, 131 N.Y. 48.)
It is, as has been stated, urged by counsel for appellant, that the trusts are entire and inseparable, and that, therefore, under the well-settled rule (See Central Trust Co. v. Egleston, supra), all must stand or fall together. I am unable to agree with that argument. To sustain the trust for the benefit of Mrs. Currey does not conflict with any part of the scheme or plan of the testator with respect to the disposition of the remainder, for the provisions for her benefit are not dependent upon or interwoven with the other provisions; nor is there anything to indicate that the testator would not have so provided for her had he known that he could not dispose of the remainder as he did dispose of it, but, on the contrary, it would seem that to properly provide for her was his primary consideration. It cannot be reasonably inferred that he only intended that she should have the income of the residuary estate to the extent of $2,100 per annum during her life in the event that he could lawfully continue the trust for the period of twenty-five years if she should die sooner. It is manifest that whether the law forbade or permitted the trust for twenty-five years he intended to provide an annuity for this woman for life from the income of his residuary estate. Therefore, giving effect to those provisions of the will designed to afford Mrs. Currey an annuity for the period of her natural life gives effect to the plain intention of the testator, and the fact that owing to his failure to follow the requirements of law we are unable to give further effect to the provisions of his will, does not preclude the court from giving it effect as contemplated by the testator until the death of Mrs. Currey. (See Kennedy v. Hoy, supra.)
I am of opinion, therefore, that there was a valid trust created during the life of Mrs. Currey, but that the trust attempted to be created for the period of twenty-five years was void.
Counsel for the executor respondent contends that if the testator contemplated a trust for the period of twenty-five years which would be invalid, that provision may be disregarded, and the trust sustained as one for the life of Mrs. Currey, and the will upheld as a valid disposition of the remainder at that time, and counsel for all the respondents contend that, in any event, in order to sustain the will as a disposition of the residuary estate it should be construed as creating a trust only during the life of Mrs. Currey. As already observed, the intention of the testator to have the trust continued in any event for twenty-five years, no matter how long prior to that time Mrs. Currey may die, is quite plain, and it is equally plain that the testator has not attempted to dispose of the remainder until the expiration of the trust, whether it shall terminate with the death of Mrs. Currey after the expiration of the twenty-five-year period or by the expiration of that period should she die before. Moreover, the remainder is contingent, and those who would take now if Mrs. Currey should die presently if the testator had provided for distribution on her death, might not be the same persons as those who would take at the expiration of the twenty-five-year period. If Mrs. Currey should die presently the defendant Davis, the nephew, would take one-half of the residuary estate; whereas, he may die before the end of the twenty-five-year period prescribed in the will without leaving issue, and in that event if the remainder were to vest at the expiration of the twenty-five-year period, as contemplated by the testator, his sister, if then living, and if dead her children, would take the one-half that the nephew was to take if then living. If Mrs. Currey should die before the expiration of the twenty-five-year period, and the testator's nephew and sister should survive her and the disposition of the remainder could be sustained they would take, and yet they might die within the twenty-five-year period and leave none of the property to their issue who would have taken if the will were sustained as made by the testator. There can, therefore, be no doubt but that if the will could be sustained as made, the remainder would not vest until the expiration of the twenty-five-year period, even though Mrs. Currey should die before that time, and, therefore, it could not be definitely known until the time for distribution who would take the remainder. ( Schlereth v. Schlereth, supra; People's Trust Co. v. Flynn, supra.) If it were certain that identically the same remaindermen would take whether the remainder vested in possession at the death of Mrs. Currey or at the expiration of the twenty-five year period, then, under the statute and authorities the will might be sustained as a valid disposition of the remainder. (Real Prop. Law [Consol. Laws, chap. 50; Laws of 1909, chap. 52], § 42; Purdy v. Hayt, 92 N.Y. 446; Kalish v. Kalish, supra; Matter of Wilcox, supra; Rice v. Barrett, 102 N.Y. 161; Knox v. Jones, supra.) Since, however, by the clear and explicit provisions of the will, the remainder is contingent and it cannot be known who will take until the expiration of the trust which the testator directed should continue for twenty-five years in any event, the court cannot eliminate those provisions and decree that the remainder shall vest in possession upon the death of Mrs. Currey, for that would not be construing the will as made, but would in effect be constructing a will for the testator. ( Simpson v. Trust Co. of America, supra.) The observations already made sufficiently answer the contention that the will may be construed as creating a trust for the life of Mrs. Currey only.
It follows, therefore, that the judgment should be reversed, with costs to appellant and to the executor, payable out of the estate, and judgment should be entered in favor of the plaintiff to the effect that the trust in the 4th paragraph of the will is valid for the life of Mrs. Currey, and that the provisions thereof disposing of the income of the residuary estate during that period are valid, but that the further trusts with respect to income until the expiration of the twenty-five-year period and the disposition of the remainder of the residuary estate are void, and that upon the death of Mrs. Currey the next of kin of the testator will be entitled to take in possession the residuary estate as intestate property.
INGRAHAM, P.J., McLAUGHLIN, SCOTT and HOTCHKISS, JJ., concurred.
Judgment reversed, with costs to the appellant and to the executor, and judgment ordered for plaintiff as directed in opinion. Order to be settled on notice.