Bailey v. Buffalo Loan, Trust & Safe Deposit Co.

shall be divided and paid over, share and share alike to the heirs of my said sister, Caroline E. Blair, of Madison, Ohio. But if there be a child of my said son, Harlow W. Bailey, living twenty-five years from the date of this will, though born after my decease, then said trust hereby created shall continue for the benefit of such child.”

The plaintiff attacks the validity of the foregoing clause, contending that, by its terms,'the absolute ownership of the fund is suspended for a period beyond the extent of two lives in being at the death of the testator, in violation of section 11 of the personal property law.

It is plain that the testator intended that the absolute ownership of the trust fund should be suspended until the children of Harlow W. Bailey living at the death of the testator and those born thereafter . should, respectively, reach the age of 21 years. No such child was to receive a share until it reached its majority, and its share could only be determined by the number of minor children then living. The share of each child depended upon the contingency of its reaching the age of 21, and the amount of such share depended upon the further contingency as to the number of minor children then living. If it could be said that the trust fund vested in the children of Harlow-W. Bailey upon the death of the testator and the payment of a certain share was to be postponed until each child reached its majority, a legal, vested remainder would have been created; but the clause provides that each child shall have his proportion of said trust fund upon his arriving at the age of 21, such share being such proportion as the number of minor children then living shall bear toward the principal, so that, if there be three children living when the oldest becomes twenty-one, such oldest child shall receive one-third, and, if another child be then born, then the second child, upon reaching 21, shall receive one-third of the balance. It is plain that, upon the death of Harlow VV. Bailey, the interest of each of his children in the trust fund is simply a contingent one, depending upon his reaching his majority. It is equally plain that, upon the death of Harlow W. Bailey, it will be unknown whether any of his children will ever be vested with the title to the fund. Harlow W. Bailey had one child living at the death of the testator and now has three others, born after testator’s death. The daughter of Harlow W. Bailey, living at testator’s death, did not take the trust fund. She had no interest in it whatever except as based upon the contingency that she should live to attain her majority-It was not a vested interest, subject to the rights of after-born brothers or sisters. It was a contingent interest that would be defeated by her death during her minority. It is not a bequest to the children of Harlow W. Bailey, when they shall come of age. It is not a bequest to any specified child, to be paid to it on reaching its majority. It is a bequest to only such children as live to be 21.

[2] The law undoubtedly is that, where nothing is interposed between the infant and his enjoyment of the possession of the estate except his own minority, he has a vested estate, subject to be defeated by the condition subsequent of his dying under age. Manice v. Manice, 43 N. Y. 380 . But, before this trust fund could vest in the one

[3] A vested remainder in an infant will pass to the infant’s heirs. No one would claim that any share in this trust fund would pass to the heirs of any of the children of Harlow W. Bailey dying during their minority. No provision is made showing that testator ever intended that upon the death of the minor child of Harlow W. Bailey living at testator’s death any share of the trust fund would go to its heirs. Upon the death of such minor child, it simply drops out of all calculations and consideration as to the disposition of the fund. The youngest of his children may be vested with the entire trust fund, depending upon the death of her three brothers and sisters, and also depending upon her reaching her majority. The absolute ownership of this fund by the youngest child is suspended for three lives, only one of which was in being at the time of the testator’s death, and also for the minority of this youngest child. The main difficulty is that the testator intended, and has provided, that the trust fund shall remain in trust until the oldest child of Harlow W. Bailey reaches 21 years of age, and that the fund then shall go to persons who are not even ascertainable upon the happening of that event. The one reaching 21 years can then be ascertained, and the amount of his share determined. 'As to the balance of the trust fund, it remains in trust until the second child reaches 21, and then shall go to persons who are not even then ascertainable. The second child’s share can be ascertained. The balance is to remain in trust until the third child reaches 21, and then his proportion shall go to him, such proportion to be ascertained by the number of minor children then living, and so on and on as long as Harlow W. Bailey shall live and have children. It is plain that no specific interest in this trust fund can ever vest in any child prior to its arrival at its majority, and that the testator so intended; and it is equally plain that the testator has provided that in the event that Harlow W. Bailey dies leaving four minor children, and the three oldest of the children should die before reaching 21 years of age, the absolute ownership of the trust fund should be suspended during the lives of Harlow W. Bailey, his three oldest children, and also during the minority of the youngest child.

In Jennings v. Jennings, 7 N. Y. 547 , the will provided:

“As soon as the eldest surviving child by my present wife becomes'of the age of twenty-one years the whole of the property to be fairly appraised and valued, and his or her equal share of the property apportioned, and if required, paid to him or her, and in like manner the same course shall be pursued in respect to the rest of my surviving children by her.”

In speaking of this provision, Gridley, J., said:

“It will be seen that the power of alienation was suspended, or, which is the same thing, might be suspended during three lives. Suppose the three

eldest, of the four children living at the testator’s death should die, and the remaining child, after their death, arrive at the age of 21 years; it is clear that by the terms of the will the estate must be kept together and the power of alienation must be suspended during three lives. * * ® But the estate is not to be divided at the majority of the eldest child. The residue is still kept together and undivided until the last of the children shall arrive at the age of 21 years. So that the power of alienation is suspended as to all but the portion of each successive child who arrives at 21 years of age, until the last shall reach that age.”

Such provision was held illegal.

In Thompson v. Carmichael, 1 Sandf. Ch. 387 , the trust was to continue until the youngest of testator’s four children should arrive at the age of 21 years. The trust was held void, for the reason that the three oldest children might die before the youngest reached 21, before the ownership, of the residue of the personal property could be ascertained and absolutely disposed of. It was a suspension of absolute ownership of personal property for more than two lives in being.

It is impossible to read the fourth clause in question without reaching the conclusion that the testator has provided and intended that, in the event of the death of Harlow W. Bailey, there should be a trust in favor of the issue whom Harlow W. Bailey might leave surviving until said issue should, respectively, reach their majority. Such provision is condemned in Matter of Wilcox, 194 N. Y. 293 , 87 N. E. 497 , as being invalid, in that it might suspend the absolute ownership of personal property in lives not in being at the time of the death of the testator. This trust cannot terminate until after the death of Harlow W. Bailey, and then only upon the arrival of his then youngest child at the age of 21 years. Its termination is not dependent upon lives in being at the time of testator’s death. In no possible contingency will it terminate by its terms upon the death of two lives in being at testator’s death. If Harlow W. Bailey had but one child, upon its arrival at the age of 21 the trust would terminate; but such a contingency is not provided for in the terms creating the trust. Neither can it be certain to happen in this case.

[4] It is only when by every possible contingency as provided by the terms of the trust that it will terminate at the end of two lives in being at the death of the testator that such a provision can be upheld. The interests of the children of Harlow W. Bailey in the trust fund being mere contingent interests, depending upon so many things, that may or may not happen, it cannot be said that they have any, vested interest that places the power of alienation in them, individually or as a class. There are no persons in being who could convey complete title to this fund. Children may yet be born that may inherit under this clause the entire ownership of the fund.

The fourth clause, attempting to bequeath the principal of the trust fund to the children of Harlow W. Bailey, is void. Matter of Wilcox, 194 N. Y. 288 , 87 N. E. 497 ; Schettler v. Smith, 41 N. Y. 334 ; Morton Trust Co. v. Sands, 122 App. Div. 691 , 107 N. Y. Supp. 698 ; Herzog v. Title Guaranty & Trust Co., 177 N. Y. 86 , 69 N. E. 283 , 67 L. R. A. 146 ; Colton v. Fox, 67 N. Y. 348 ; Knox v. Jones, 47 N. Y. 389 ; Simpson, v. Trust Co., 129 App. Div. 200 , 113 N. Y. Supp-

[5] The provision directing accumulations of income would be valid if the preservation of the principal until each of such children as Harlow W. Bailey may have reaches the age of 21 years could be upheld. The accumulation of income is directed to commence on the death of Harlow W. Bailey for the benefit of his then minor children. As no child could be born after the death of Harlow W. Bailey, unless it was in being at the time of his death, it is seen that the will directs that accumulations shall commence during the minority of the persons for whose benefit it is intended and terminates at the expiration of such minority. That portion of the income payable to Alan-son Bailey and Mary Swain is not directed to be accumulated in any event. It is paid to Harlow W. Bailey upon their death. It becomes the property of Harlow W. Bailey absolutely, and would on his death continue to be payable to his estate. His executor or administrator would be entitled to receive this portion during the continuance of the trust. It is only the share of the income directed to be paid to Harlow W. Bailey — that is, the balance remaining after paying the $50 and $30 a month — that is directed to be accumulated after the death of Harlow W. Bailey. With this portion so directed to be accumulated, the life or death of Alanson Bailey or Mary Swain has no concern. The direction to accumulate the income provides that it shall commence at the expiration of one life in being at the time of testator’s death. The attempted preservation of the principal for more than two lives in being at the time of testator’s death being void,, it can no longer be treated as the basis from which the income can be paid to the beneficiaries or be accumulated as directed. The principal immediately falls into the residue of decedent’s estate, and under the residuary clause becomes the property of Harlow W. Bailey, and, of course, all income therefrom goes with it to the same legatees.

[6] The provision directing that the trust shall continue for 25 years in case the children living at the testator’s death shall die before arriving at the age of 21 is also void, as expressly suspending the absolute ownership of the fund for that period, instead of limiting such suspension upon not more than two lives.

[7] For 17 years this clause has been treated by all parties as valid; its provisions have been complied with; the plaintiff has received his share of the income, and acquiesced in the payment by the trustee of the monthly sums to Alanson Bailey and Mary Swain. The trustee has performed all the duties intrusted to it by the terms of the will. It has earned, and is entitled to, its legal fees for this service! At no time up to the commencement of this action has the plaintiff made any claim that h.e was entitled to such trust fund, or that the trustee was not justified in paying the annuities and fees out of such income. The trust fund is still in the hands of the trustee undistributed. This action is not barred by the statute of limitations. The plaintiff is not estopped from now maintaining it to recover the principal of the trust fund. He is estopped from maintaining it to recover from the trustee the income that has been administered for these- 17 years. He ex

The plaintiff is entitled to judgment declaring the fourth paragraph of the last will and testament of decedent void; that the trustee pay over to plaintiff the trust fund, and accumulations on hand, after deducting the items hereinafter named. The defendant trust company is entitled to its costs and disbursements'. The defendant children of Harlow W. Bailey are entitled to their costs and disbursements. The defendant, Alanson Bailey, is entitled to his costs and disbursements, and the plaintiff is entitled to his costs and disbursements, all payable out of the funds in the hands of the trustee.

Let findings be made.