Opinion
03-09-1891
WILLARD'S EX'R v. WILLARD et al.
Charles Ewan Merritt, for complainant. Mark R. Sooy, for defendant Helen Willard.
(Syllabus by the Court.)
On motion for construction of will.
Charles Ewan Merritt, for complainant.
Mark R. Sooy, for defendant Helen Willard.
BIRD, V. C. By the last will and testament in question the complainant was appointed both executor and guardian of the children of the testator. By one of the clauses in his will the testator directed as follows: "And it is my further will that the testamentary guardian just named shall expend, at his discretion, during the minority of my children, for their benefit, the income of my estate. With full power to receive such, 1 herein empower him." He then directed that a certain forge or manufacturing works should be sold to the person named at a price fixed; but in case the person so named should not elect to purchase he provided as follows: "I empower my executor to run them and conduct the business as now carried on till such time as he can make a satisfactory sale under the present firm name, and for the benefit of my estate, and I as fully empower him to perform all acts he may deem necessary therefor, as I am myself empowered." The testator then directs as follows: "I give and devise all my property not heretofore specified, whether real estate or personal, to my executor, to be sold by him if he deem wise, for such price as he thinks best, hereby giving unto him as full power in the premises as I myself could have, if living, as well for other purposes as to grant and convey the same by deed to the purchasers in fee-simple, free and clear of any trust. * * * I further direct my executor to pay over the balance of money or funds remaining in his hands, and to transfer, deliver to, and give title to all unsold securities, mortgages, real estate, stock, bonds, etc., all my remaining property, except such personal property as horses and carriages, etc., which the children may retain, to the Provident Life & Trust Co. of Philada., trustee under this will." In the next paragraph he gives and directs as follows: "1 give and bequeath all the money or funds, all the real estate, mortgages, stock, bonds, or property of any description, paid or transferred by my executors to the Provident Life & Trust Co. of Philada., and to their successors, in trust, nevertheless, to invest, hold, and to keep invested as it is when received, or in such manner as they deem wise." By the next paragraph he thus provides and directs: "I will and order to promote the distribution of the income and of the principal thus created that my trustee aforesaid apportion the annual income of my estate equally among my five children, * * *and to pay over the same to their guardian till each reaches the age of twenty-one years, and thereafter to pay over the same to each child, during his or her natural life, in his or her own right." The testator died in August, 1877. The personal estate was inventoried at $5,422, and the forge and manufactory at $107,153.70. The person to whom the executor was authorized to sell the forge and foundry for the sum of $25,000 determined not to take it at that figure. As the will gave him power, the executor carried on the business in the said forge and manufactory in the manner in which it had been carried on by the testator in his life-time. By the year 1883 the profits of said business were over $100,000. All of these profits he transferred from his account as executor to his account as guardian, and expended the amount thereof, less $70,000, for the benefit of his wards, children of said testator. The said $70,000 are still credited to his account as guardian. In 1883 the forge and manufactory suffered a loss by fire to an extent of about $10,000, not covered by insurance. Since such fire the business has not been profitable, and the machinery has depreciated in value from use; so that it is now estimated that that portion of the estate which was inventoried at $107,153.70 is not worth as much now as at the time it was so inventoried by $50,000.
The question raised by the bill is whether or not the executor was justified in transferring the income of the said business to his account as guardian, and, if not, whether he can now correct such error, and transfer the balance which remains unexpended back to his account as executor. In other words, were the profits of the forge and manufactory income, within the meaning and purview of the said will, which the children were entitled to, or part of the corpus of the estate, to which the said trustee was entitled? It may be that the question is not free from doubt, yet, from whatever stand-point I have undertaken to examine the question, I have been led to the conviction that the testator only intended that any of the profits or increase of his estate, as well as the income arising therefrom by way of interest, should, in the first place, be paid and transferred by the executor to the Provident Life & Trust Company. The trust company, it is true, is directed to pay the income to the guardian. The executor is nowhere directed or authorized to expend any money for or on account of the said children. Nor is the guardian authorized to expend any money for or on account of his wards, except such as he receives from the said Provident Life & Trust Company. The fact that the executor and the guardian are the same person can make no difference. In the performance of his duties as executor he is obliged to act with the same singleness of purpose as though he were not guardian. Whatever obligations would devolve upon a stranger to the guardianship, but acting as executor, devolve upon this executor. Had a stranger to the guardianship been executor, and conducted this forge, and received these profits, would a fair construction of this will have justified him in paying such profits to the guardian, rather than to the trust company? I can find nothing in the will which supports the affirmative of this inquiry. This, I think, will appear quite conclusively when the testator's language in and by which he gives power or authority to the guardian is considered and contrasted with the language in that part of the will in which he gives power and authority to the executor. It will be seen by what is above quoted that he directs the guardian "to expend, at his discretion, during the minority of my children, for their benefit, the income of my estate. With full power to receive such, I herein empower him." It will be observed from this that he is directed and empowered to expend the income of his estate, and he is authorized also to receive such income. It certainly is of no little significance in the interpretation of this will that the testator has in this clear and unmistakable manner made plain that he used the word "estate" in a different sense, and for a different purpose, than the use of the word "income" in this particular in the same sense, and for the same purpose, that he used it in a subsequent part of his will in giving directions and authority to the said trust company in their disposition of the income of his estate. And in following the thread of the testator's thoughts it must occur to every attentive reader that when he used the word "receive" he had in his mind what he subsequently intended to say and did say respecting the power and authority of the trust company to pay the guardian the income of his estate. In other words, he did not intend that his executor, who was also guardian, should receive any portion of the income of his estate as executor, and should expend it as guardian, but that his whole estate, as distinguished from such income, should be transferred to the trust company, and the guardian receive it only through the trust company. I have said that the testator used the words "estate" and "income" in a different, and not in the same, sense; and it requires no argument to show that he did so understandingly, and for a purpose. Doubtless he used the word "estate" in its very largest sense, meaning thereby everything that he was possessed of; and when this word is used without restrictions or limitations of any kind, by the immediate context, it seems to have always been regarded as having all the comprehensiveness which I have attributed to it. I have been unable to find any distinction in this respect, either at law or in equity. If the very general doctrine that technical words are used in a technical sense be applied, the interpretation which I have given would be sustained thereby, (Den v. McMurtrie, 15 N. J. Law, 277; Sims v. Conger, 39 Miss. 231; Kean's Lessee v. Hoffecker, 2 Har., Del., 103;) or if the rule that full effect must be given to plain, clear words of the testator, the same conclusion must be reached, (Courter v. Stagg, 27 N. J. Eq. 305; Bacot v. Wetmore. 17 N. J. Eq. 250; 3 Greenl. Cruise, 288; Doe v. Chapman, 1 H. Bl. 223; Kellog v. Blair, 6 Mete, Mass., 322; Hunt v. Hunt,4 Gray, 190; Tolar v. Tolar, 14 Amer. Dec. 576,note; Archer v. Deneale,1 Pet. 585; Curteis v. Kenrick, 9 Sim. 449; Pippin v. Ellison, 12 Ired. 61; Turbett v. Turbett's Ex'rs, 3 Yeates, 187.) Not being embarrassed by the consideration that the testator may have used the word "estate" in any doubtful sense, the way is made more easy to reach a proper understanding of what he intended when he authorized his executor to run and conduct "the business as now carried on till such time as he can make a satisfactory sale under the present firm name, and for the benefit of my estate, and I as fully empower him to perform all acts he may deem necessary therefor, as I am myself empowered." I think the judgment must be that that power was conferred, not for the purpose of creating an income to be applied to the same purpose as income created in a subsequent part of the will was to be applied, but for the purposes expressed,—the benefit of the estate of the testator; and that profits derived from the manufactory after the death of the testator were, by force of the said clause, a part of the corpus of the estate. It cannot be successfully maintained that the phrase "and for the benefit of my estate" applies only to the power to sell, if it applies to the power to sell at all. He gave the power to make the sale to Mendenhall in a former part of the will. But if it should be concluded that the sale was to be for the benefit of the estate, I think no one can read the clause without being equally impressed with the conviction that the testator also had in his mind the running or conducting the business; and, so far as the punctuation may be taken into account as a help, it favors this latter view.
But the further directions of the testator seem to be equally conclusive as to the correctness of this interpretation. He gave all his books, and his household furniture, and very many other articles, to his children, and then ordered, as will be seen by the quotations above, that his exectutor should sell the property not before disposed of, and "to pay over the balance or funds or moneys remaining in his hands, and to transfer, deliver to, and give title to all unsold securities, mortgages, real estate, stock, bonds, etc., all my remaining property, * * * to the Provident Life & Trust Co., of Philada., trustee under this will." All of the estate thus paid and transferred to the trust company was to be invested by it, to invest and keep invested, for the purpose of creating a principal fund from which should flow the income designed by him for the benefit of his children. This was the object he had in his mind from the beginning,—the creation of a principal fund, which should beyond peradventure secure a certain income for his children during the term of their lives. The important fact that the testator directs his executor to transfer all the funds or moneys remaining in his hands to the said trust company removes every doubt. This must certainly include all funds resulting from the continuance of the said business. In other words, there does not seem to be the slightest semblance of discretion or power in the executor to transfer any portion of this estate to himself as guardian, but the plainest and fullest direction to him to transfer every parcel of the estate, of whatever nature, to the said trust company. And that this view is expressive of the intention of the testator is made more manifest by the explanation which the testator and father makes in a subsequent clause of the will to his children for giving them the income only. The language to them is: "I wish my dear children distinctly to understand that I make this disposal of my property not from any want of confidence in them, but from the sincere desire to provide something amid possible changes of fortune. I do this the more willingly, as it is possible that my children will have a competency from their mother's estate." I think, therefore, upon the genera] principle that when the testator directs the person whom he has appointed testamentary guardian and executor to expend all of the income of his estate for the benefit of his children, and afterwards directs such executor to pay the rest and residue of his estate, real and personal, and all of the securities that he may hold, and also all the money and funds, to another person as trustee, who is directed to invest the same, and to pay all of the net income to such testamentary guardian, who is again directed to pay the same to the children of the testator during their lives, and also directs the executor to carry on a certain business in which the testator was engaged at the time of the making of his will until such time as he could sell the premises in which the said business was carried on for the benefit of his estate, and large profits inure from such business, such profits, in the hands of the executor, are not income within the meaning of the will. It is not to be applied by him as testamentary guardian for the benefit of the legatees for life, but to be paid by him as executor to the trustee, whose duty it is to invest it as capital. The conclusion thus reached is not inconsistent with the doctrine laid down in the well-considered case of Van Doren v. Olden, 19 N. J. Eq. 176, and many kindred cases, both in this country and England; nor with the case, somewhat like this as to the facts, of Heighe v. Littig, 63 Md. 301. In this case, the profits of the partnership business, which the testator had agreed should be carried on for a fixed period of time whether he survived or not,—the profits arising from this business after the testator's death,—were declared to be income, and payable to the legatee for life. The testator gave directly to his wife in trust (she being the legatee) all the rest, residue, of his estate, for and during the term of her natural life. No third person was created trustee, to whom all the estate should be transferred, with power to invest the same and to pay the income thereof to the widow. I will advise a decree that the complainant transfer from bis account as guardian the whole amount of the income of said business carried on in the forge and manufactory remaining in said account to his account as executor.