United States Trust Co. v. Terry — 167 A.D. 152

Majority

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United States Trust Company of New York, as Trustee of a Trust Created by the 12th Paragraph of the Will of Ambrose M. McGregor, Deceased, for the Benefit of Tootie McGregor Terry, Respondent, v. Marshall O. Terry and Frank L. Hall, as Executors, etc., of Tootie McGregor Terry, Deceased, and Others, Appellants, Impleaded with Union Trust Company of New York, as Trustee of a Trust Created by the 12th Paragraph of the Will of Ambrose M. McGregor, Deceased, for the Benefit of Tootie B. McGregor, Afterwards Tootie McGregor Terry, Respondent, and The Cleveland Trust Company, as Trustee of a Trust Created by the 6th Paragraph of the Will of Ambrose M. McGregor, Deceased, for the Benefit of Ambrose Morrison McGregor, and Others, Defendants.

Second Department,

April 23, 1915.

Headnote

Will construed—trust for life, with remainders to testator’s widow, son, or issue of son, if living, at his death—when collaterals do not share in residuary estate — when bequests not payable in duplicate from separate trust estates—when issue of deceased legatees take per capita.

A testator placed certain specific shares of stock in trust, income and profits therefrom to his wife for life, and by the same clause of his will he gave other shares of the stock to another trustee upon a similar trust, with a provision that upon the death of his wife the trusts should end and a portion of the corpus be paid to the testator’s brothers and sisters then living in addition to specific sums bequeathed to them in another paragraph of the will, similar bequests being made to nieces and nephews. The clause of the will relating to the specific bequests provided that the issue of deceased brothers and sisters should take the share which their parents would have taken if living at the time of the testator’s death, and the bequests to nieces and nephews provided that if they should not be living at the testator’s death, their issue should receive the share the parent would receive. The will provided that on the termination of the trusts the balance should fall into the residuary estate which was then bequeathed to the testator’s wife, if living at his death, or to his son should the wife be dead, and to the issue of the son, if he had died, with a further provision that if the son died without issue, the residuary estate should go to the testator’s heirs and next of kin living at his death.

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Held, that as the wife survived her husband, after her death the surplus remaining after the payment of the specific legacies should be paid to her executors, and did not pass to the brothers and sisters of the testator, or to the issue of deceased brothers and sisters living at his death, for such construction avoids intestacy as to the surplus of the trust fund;

That the specific legacies should not be paid in full from each of the two trusts created by the testator, but one-half should be paid from one trust and one-half from the other, for the testator had precisely fixed the amount of each bequest;

That where the specific legatees died leaving issue, the latter took per capita, not per stirpes.

Under the will aforesaid the collateral relatives do not share in the residuary estate, if the testator’s widow, or son, or the issue of a son were living at his death, and hence such collaterals have no claim other than the specific bequests, where both the widow and the son survived.

Appeals by the defendants, Marshall 0. Terry and another, as executors, etc., and others, from, parts of a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Westchester on the 8 th day of July, 1914, upon the decision of the court after a trial at the Westchester Special Term.

The judgment construed the will of Ambrose M. McGregor, deceased, and the various appellants appeal from different parts thereof.

Ernest P. Hoes, for the appellants, executors of Tootie McGregor Terry, deceased.

Paul R. Towne, for the appellants, sisters and nephews and nieces of testator. .

Charles W. McKelvey and William G. Barr, for the respondents.

The object of the plaintiff’s action is a judicial construction of the will of Ambrose M. McGregor, deceased, in relation to clauses as to the meaning of which plaintiff professes to be in doubt. The plaintiff is a trustee of a trust created by the will. The defendants are the trustees of a similar trust; the execu

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tors named in the will of the testator’s widow, now deceased; the executor of the will of the testator’s son, now deceased; adult and infant collateral relatives of the deceased, who are legatees; and certain other persons, in whom we are not interested in the disposition of this appeal.

The testator died on the 31st day of October, 1900. His will was executed on the 27th day of January, 1897. A codicil was executed on January 20, 1899. The will was probated in this State, in the county of Westchester. The testator was survived by his widow, Tootie, and his son, Bradford. At the time of his death he had two brothers (John A. and Alexander H.) and three married sisters (Margaret J. Coleman, Mary A. Kendall and Jane Drake). The son Bradford died on the 7th day of September, 1902. He devised and bequeathed the bulk of his estate to his mother, the testator’s widow. The widow of the testator remarried. Her husband’s name is Terry. She died on the 17th day of August, 1912. She left a will in which she provided generously for her kin and her surviving husband, and in which she munificently endowed an Ohio corporation named “A. M. McGregor Home,” having among its purposes the care of destitute aged men and women in the village of East Cleveland, Ohio.

Under the residuary clause of the will of Ambrose M. McGregor his widow received $1,046,535.36 out of a total estate of $1,512,274.51. The questions before the court involve the distribution by the two trustees of about $273,000. The executors of the testator’s widow have also contended that in any event a large part of the fund now held as principal includes the proceeds of certain subscription rights and stock dividends and the proceeds of stock of subsidiary corporations received by the trustees in connection with shares of the Standard Oil Company of New Jersey, which proceeds constitute income due the estate of the widow. A motion on their behalf was granted, reserving their rights in these issues in view of the fact that such issues become immaterial under the construction of the will adopted by the trial court.

The testator’s two brothers and his sister Margaret Coleman died before the death of the widow. The facts as to the testator’s brothers and sisters and their descendants are mani

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fested by this classification of persons and reference to periods of time:

Ambrose M. McGregor had two brothers and three sisters, all of whom survived him, viz.:

1. John A. McGregor

2. Alexander H. McGregor

3. Mrs. Margaret J. Coleman

Died prior to deat Mrs. Terry.

4. Mrs. Mary Kendall )

5. Mrs. Jennie Drake )

Now living.

I. John A. McGregor died July 25, 1910 (Le Roy L. McGregor is executor). His descendants are:

1. Alanson A. McGregor.

2. Le Roy L. McGregor.

(1) John A. McGregor) )

T (2) Joe F. McGregor )

j Both infants under fourteen.

II. Alexander H. McGregor died September 20, 1904 (Frank McK. Biggar is administrator). His descendants are:

1. Charles J. McGregor, died August 8, 1907 (Sara G. Mergenthal is executrix). His descendants are:

(1) Dorothy is over fourteen.

(2) Donald )

(3) Mary Isabelle )

Under fourteen.

2. Ambrose Morrison McGregor. His descendant is:

(1) Robert McGregor — under fourteen.

3. Mrs. Susie F. Durey. Her descendants are:

(1) Thane Durey — over fourteen.

(2) Donald Durey — under fourteen.

(3) Gerald Durey — under fourteen.

4. Mrs. Elizabeth Isabelle Giles. Her descendant is:

(1). Marshall McG. Giles—under fourteen.

5. Mrs. Nellie Kimball. No descendants.

6. Mrs. Elsie Biggar. Her descendant is:

(1) Jane B. Biggar — under fourteen—(died after beginning of action, leaving her father, Frank McK. Biggar, her only next of kin).

1. Mary L. McGregor (now Mrs. Warren).

(Mrs. Warren has one child, born December, 1913, who has no interest in the fund.)

8. Margaret Mildred McGregor (now Mrs. Woodworth).

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III. Mrs. Margaret J. Coleman, died in February, 1912 (Margaret J. Coleman is administratrix). Her descendant is:

(1) Margaret J. Ooleman.

IV. Mrs. Mary A. Kendall. Her descendants are:

(1) John Alexander Kendall.

(2) William H. Kendall.

(3) Maude B. Kendall.

(4) Claude G. Kendall, died May 9, 1901, without issue (Mary A. Kendall is administratrix).

V. Mrs. Jennie Drake. Her descendant is:

(1) Mrs. Edna M. Fontaine.

The clauses of the will presented for construction, and which are of controlling importance, read:

“ Twelfth :

“To the United States Trust Company of Hew York, I give the proceeds of One hundred and twenty-five shares of Standard Oil Trust Certificates, to have and to hold the same in trust, . to invest and reinvest as trustee for my wife Tootie B. McGregor, for and during her natural life, to collect and receive the interest, income and profits thereof and to pay the same to my said wife Tootie B. McGregor, and to and for her use and benefit for and during hr natural life; and unto the Union Trust Company of New York I give the proceeds of one hundred and twenty-five shares of Standard Oil Trust Certificates on the like trust for my said wife Tootie B. McGregor, to have and to hold in trust to invest and re-invest, collect and receive the interest income and profits thereof and pay the same to my said wife for her use and benefit, and for and during her natural fife; and upon the death of my said wife said trusts shall' cease, and then the funds thereof, principal and unexpended income and whatever may be in the trusts after deducting legal charges and commissions shall be paid and applied as follows •— to each of my sisters and brothers then living in addition to the sum bequeathed to them each in the 3rd paragraph of my will I give the further sum of twenty-five hundred dollars, and unto each of my nieces and nephews the children of my said sisters and brothers, I give the further sum of One thousand dollars, such additional sums and legacies to go in like manner as in such 3rd paragraph provided in case of decease of

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any of such classes of legatees or of any of such legatees, the issue of any deceased to take the share its parent would have received; and in addition to the five thousand, dollars in the sixth paragraph of this my will trusteed for the benefit of Ambrose Morrison McGregor I give unto said Cleveland Trust Company upon the like trust the further sum of five thousand dollars, to invest and re-invest, collect and receive the interest, income and profits and pay and apply the same to and for the use and benefit of said Ambrose Morrison McGregor until he attains the age of thirty years, and then and so soon as he reaches his thirtieth year of his age to pay to bim the principal and any unexpended income, and in case of his death before he shall have reached his thirtieth year of age then to pay the principal and any accumulation of income to the next of kin of said Ambrose Morrison McGregor; And unto Ed. L. Barber, I give the sum of Sixty-five hundred dollars as a further legacy, and if he shall have died leaving issue, then the same shall be paid to such issue; and unto Adelaide Louise Barber, I give a further legacy of sixty-five hundred dollars if then living, and if she shall have died leaving issue then the same to be paid to such issue then living if any;

“And unto James McCrosky, if then living at the time of such division of such funds, then I give a further legacy of Twenty-five hundred dollars.”

“ Fourteenth:

“ If after paying the additional legacies, at the termination of the trusts, as provided and directed by me, in the Twelfth paragraph of my will, there remain any balance and funds, over and above the sums required to meet, pay and discharge the said legacies, and the bequests and the trust provided for Ambrose Morrison McGregor, then such balances and surplus of such funds shall be paid and belong to my residuary estate, and pass thereafter according to the provisions hereinafter in respect to the residue of my estate.”

“ Sixteenth:

“ All the rest, residue and remainder [of] my property and estate, both real and personal, of every name and nature and wherever situated, I do hereby give, devise and bequeath unto my said wife Tootie B. McGregor, if living at the time of my

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decease; and in the event of the death of my wife prior to my decease, then I give, devise and bequeath said rest, residue and remainder of all my property and estate real and personal to my said son Bradford B. McGregor, and if he shall have died, also prior to my decease, leaving issue living at the time of my decease, then I give,-devise and bequeath the same to such issue of my said son then living if any, but if both he, my said son Bradford and my said wife Tootie B. McGregor, shall have died prior to my decease, and my said son Bradford shall leave no issue, living at the time of my decease, then I give, devise and bequeath all the said rest, residue and remainder of my property and estate, real and personal, aforesaid, unto my heirs at law and next of kin, living at the time of my decease.”

The 3d paragraph of the will, to which reference is made in the 12th, is reproduced:

“ Third :

“ To each of my three sisters and two brothers, who may he living at the time of my decease, I give and bequeath the sum of Two Thousand Five Hundred Dollars, the issue of any deceased brother or sister of mine to take the share to which such deceased brother or sister of mine would have been entitled under this provision of my will if living at the time of my decease, and unto each of my nieces and nephews, the children of my said brothers and sisters, I give and bequeath the sum of One Thousand Dollars, and in case either of them shall have died leaving issue, then the issue of any of them so dying to receive the share the ¡'parent would have received if living at the time of my decease.”

The questions presented for solution are:

1. Should the surplus remaining after the payment of the particular legacies mentioned in the 12th paragraph he paid to the executors of Tootie B. Terry, or does such surplus pass to the living brothers and sisters and the issue of deceased brothers and sisters of testator ? The trustees contend and the trial court held that the former alternative presents the proper construction.

2. Should each legacy be paid in full from each trust, or should such legacies be paid in the amount of one-half from

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one trust and one-half from the other trust % The trustees contend and the trial court held that the latter alternative presents the proper construction.

3. Where legatees have died leaving issue, do such issue take per capita or per stirpes f The trustees contend and the trial court held that such issue take per capita.

We approve the decision of the learned trial court in the three instances. As to the second question we are content to say that in the words used by the testator there is no foundation for the claim that the demonstrative legacies should be duplicated. He made a precise fixation of the sum of his benefaction. To support our affirmance of the learned trial court’s decision of the third question it is sufficient to cite Schmidt v. Jewett ( 195 N. Y. 486 ); Soper v. Brown (136 id. 244). In recording our affirmance of the learned trial court’s decision on the first question a statement may be desirable. The construction of the trial courto did not overstep the bounds of interpretation and invade the domain of will making. The construction gave effect to the intent of the testator, plainly and unequivocally expressed; the intent not being in contravention of a statute or of public policy. It favored the vesting of the remainder. It avoided intestacy as to the surplus of the trust fund. The result has the approval of authority. (Cammann v. Bailey, 210 N. Y. 19 , 30; Salter v. Drowne, 205 id. 204, 212; Herzog v. Title Guarantee & Trust Co., 177 id. 86, 92; Haug v. Schumacher, 166 id. 506, 513.) By the 14th clause it is definitely provided that the surplus of the trust fund created by the 12th clause, over and above the amounts of the legacies to collateral relatives, shall “be paid and belong to my residuary estate, and pass thereafter according to the provisions hereinafter in respect to the residue of my estate.” The meaning of these words is plain. The collateral relatives do not assert that this surplus was not disposed of under the residuary clause. Their contention is that they are the residuary legatees. By the 16th or residuary clause of his will the testator gives all of his residuary estate, “of every name and nature, ” to his widow “if living at the time of my decease. ” The collateral relatives are not to participate in the residuary estate if the widow or his son or the issue of his son

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are living at the time of testator’s death. The widow and the son lived after him. The provisions of the residuary clause are substitutional, one person or class being substituted for another. The determinative event in each case is the death of the testator, none other being expressed or implied. Each person or class takes all or none of the residue. It is not convincing to suggest that the testator must have meant something other than his words plainly import upon the assumption that it is an incongruity intolerable in law for the life beneficiary of a trust, the funds of which by the terms of the will and codicil may be invested in securities of fluctuating value, to have a vested remainder in the surplus of the corpus of the trust fund after the payment of demonstrative legacies large in amount to legatees uncertain in number. (Doane v. Mercantile Trust Co., 160 N. Y. 494 ; Riker v. Cornwell, 113 id. 115, 127; Brown v. Richter, 25 App. Div. 239 ; Matter of Asch, 75 id. 486, 495; Connolly v. Connolly, 122 id. 492, 495.)

The cases upon which the collateral relatives rely are distinguishable because of the peculiar language of the wills involved, and the application of a rule inapplicable in the case at bar.

In Delaney v. McCormick ( 25 Hun, 574 ; affd., 88 N. Y. 174 ) the will contained no words of gift in relation to the property in question, and the court applied the rule that where there is no language importing a gift except in the direction to convert real estate into money and then make distribution, time is annexed to the substance of the gift and the vesting is postponed.

In Salter v. Drowne (supra, 215) the court’s decision is epitomized in this paragraph: “ If, instead of holding as we do in this case that the intent of the testatrix as shown by her will was to postpone any possible vesting of the corpus of the trusts until the death of her daughter, we were in doubt about her intention, the rule to be applied in construing the will in this State is that where a gift arises from a direction to divide or convey the trust property among a specified class of persons and such division or conveyance is contingent and dependent upon the happening of one or more uncertain events the gift does not vest until the time for distribution or conveyance arises.”

In the 10th clause of the will before us, when the testator intended to attach a future condition or contingency to the

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substance of the gift, he was reasonably and substantially accurate in the expression of that intention. The clause reads:

“ To the United States Trust Company of New York, I give the proceeds of One hundred and twenty-five shares of Standard Oil Certificates, to have and to hold, in trust, to invest and re-invest, to receive the interest, income and profits, and pay the same to my said son, Bradford B. McGregor, and to and for the use and benefit of my said son Bradford B. McGregor, for and during his natural life, and upon his decease, to pay over the principal and any unexpended income to the issue of my said son Bradford, and in the event of his death leaving no issue, then to pay the same to my next of kin then living.” (Salter v. Drowne, supra, 210.)

The learned counsel for the collateral relatives suggests that “the Fourteenth paragraph was an afterthought, inserted after the Will had been drafted; and, because the person who drew this Will did not in the Twelfth paragraph, as in the Tenth and Eleventh paragraphs, go on and make a complete disposition of the corpus of the Trust fund, but attempted to dispose of it by making its ultimate disposition pass under the residuary clause following,” etc.

The adoption of this hypothesis would lead us into the boundless realm of imagination — a journey to be avoided by those engaged in the prosaic work of interpreting written instruments.

We think the construction of the learned trial court as to the ownership of the surplus of the fund we have been considering was compelled by the plain language of the will, and that it is in harmony with the entire testamentary scheme of the testator.

The judgment should be affirmed, with costs.

Jenks, P. J., Thomas and Rich, JJ., concurred.

Judgment affirmed, with costs.

Cases cited

Schmidt v. Jewett 195 N. Y. 486 N.Y. 1909-06-18 p. 159
Cammann v. Bailey 210 N. Y. 19 N.Y. 1913-12-16 at 30 p. 159
Doane v. Mercantile Trust Co. 160 N. Y. 494 N.Y. 1899-11-21 p. 160
Brown v. Richter 25 App. Div. 239 N.Y. App. Div. 1898-01-21 p. 160
Delaney v. McCormack 88 N. Y. 174 N.Y. 1882-02-28 p. 160