Rogers v. Rogers — 19 N.Y. St. Rep. 94

Majority

p. 94

Sarah A. Rogers, Resp’t, v. Georgr W. Rogers, App’lt.^[1]

(Court of Appeals,

Filed November 27, 1888.)

Headnote

1. Executors and administrators—Trustee—To what extent a beneficiary UNDER A WILL MAT ACT AS TRUSTEE.

Where the will did not attempt to unite in the same person the office of trustee and the interest of beneficiary, but by its terms associated with the executrix (who was a beneficiary) four other persons as executors, and to the five or such of them as should' qualify, the residue was given in trust, Held, that the widow could act freely as to the beneficiaries other than herself, and as to herself four remained who could exercise the control and judgment improper for her. Trusts thus constituted are common, and although the trustees other than the beneficiary may die or decline to act, the court has power to supply their place, or, if need be, take upon itself the execution of the trust so far as it ought not to be executed by the trustee who is also beneficiary.

3. Same—Power of court where no trustee remains except benefi; CIARY—HOW TRUST EXECUTED.

Where, as in this case, the emergency Happened the four executors refusing to qualify, leaving the widow (a beneficiary under the will) the sole executrix, Held, that the court was right in substituting its own discretion for that of the trustee, and through its own officers inquiring into the facts and dictating in detail all that should be done. It might have appointed a new trustee, but having itself exercised all the discretion reposed anywhere, it might direct the mere formal act of giving the mortgages and distributing the money in the proportions dictated to the executrix, as the amount going to her was fixed, and that set apart for the minors she could properly apply.

3. Same—Power of trustee to mortgage.

Where there is no express power given by a will to sell or mortgage the estate, but the whole legal estate is vested in the trustee, he may sell or mortgage it, but not in contravention of the trust.

4. Samf,—Appeal—What questions will be considered upon.

Where ten years after the decision, and four years after one of the minors came of age, his attorney was substituted in place of the guardian ad litem and filed objections to the findings of the referee, and appealed from the judgment entered, the court will refuse to consider any question beyond the ones raised and decided by the special term, and will hold the appellant to a rigid and strict observance of the rules of law.

p. 95

Appeal from a judgment of the supreme court, general term, second department, affirming a judgment and order of the special term. The action was brought to obtain a judicial construction of the will of Patrick L. Rogers, deceased. The judgment sustained the trusts mentioned in the will, for the construction of which this action was brought, and the right of the beneficiary in the trust to execute the same as trustee thereof.

C. K. Corliss, for app’lt; S. V. Speyer, for resp’t.

The principal questions argued before us are not in the case, and should not be considered.

The action was brought soon after the death of testator, by his wife as executrix, who had alone qualified. The complaint sought a construction of the will in two respects, about which alone it alleged that doubts had arisen.

The first was whether the executrix was authorized to convert the estate, or any part thereof, into money before distribution; and the second was whether, during the minority of Beatrice, who was the youngest child living at testator’s' death, the executrix could sell any part of the property, and, in case of necessity, apply principal as well as income to her support and that of the minors.

There was no suggestion of the invalidity of the trust for any reason, or that the testator died intestate as to the rest and residue of his estate, but assuming the validity of the trust the questions raised were as to the authority of the executrix under it. The relief asked was a construction of the will in the respects suggested and in any others which might be raised by the answers or properly brought before the court.

The deceased left eleven children, six of whom were minors, at his death, for whom a guardian ad litem was appointed, the adults appearing by counsel of their own. IN one of the answers raised any new questions or suggested any difficulties to be solved beyond those stated "in the complaint. Upon these pleadings the case went to trial. What then occurred we do not know, for this appeal stands alone upon the judgment record, no case having been made. W e are bound to assume that the only questions tried and decided were those raised by the pleadings. In October, 1869, or almost twenty years ago, judgment was rendered. In that judgment there is no trace of any determination founded upon a claim or allegation at any time made that the trust was void.'

Outside of the formal facts, the principal further finding was that of the five persons named as executors and executrix of the will, Mrs. Rogers alone qualified. As she was beneficiary to some extent in the trust, the question raised

p. 96

was whether she could act also as trustee, and could sell and convey the property and appropriate not only income but principal. The court adjudged that she could, but since she was one of the beneficiaries, took upon itself the execution of the trust so far as her discretion was concerned, and sent it to a referee to ascertain and report what had been done with the personal estate and income received; what sum was needed for the widow and the support and education of the minors, and what was the net value of the estate and its income, and what part or parts could be sold or mortgaged. The judgment also authoi’ized any of the parties upon the foot of the decree to apply for further instructions. All this assumed, as did the pleadings, the validity of the trust and determined only the authority of the executrix in the emergency which had occurred. The referee reported, and upon the filing of his report, and after hearing all parties, the court ordered that the executrix borrow, upon mortgage, $15,000 of the Mutual Life Insurance Company of New York, and directed how much of it annually should be applied to the use of the widow, and how much to the support of the minors and their education. The present appellant, George W. Rogers, now of full age, was then one of the minors, and reaped his share of the benefit of the loan. This order was made in February, 1870. In August, 1871, under another order of the court, the executrix borrowed, on bond and mortgage of Fernando Yznago, $21,000 with which the previous loan was paid off, and the surplus applied to the use of widow and minors as directed. In May, 1872, she borrowed, under a similar order, $15,000, of Elizabeth Rapelye. In October, 1873, she presented a further petition, showing that the real estate by reason of railroad improvements, had increased in value $50,000 or more than the amount of the incumbrances; that taxes, interest, legal expenses, etc., added to medical bills for sickness in the family, and the support and education of the minors made it necessary to borrow an additional $10,000.. A reference was ordered to ascertain the facts. Upon the coming in of the report, and upon a stipulation signed by all the adult children, at that time eight in number, leaving but three minors, of whom George W. Rogers was one, and had reached the age of nineteen years, an order was made permitting such new loan. The record does not show whether it was obtained, though it probably was. Two years later, or in 1875, George W. Rogers became of full age.

For* four years thereafter, or until March, 1879, he appears to have remained silent, but at that date an order was entered substituting as his attorney in the case Cyrus K. Corliss, in the room of the guardian ad litem, and thereupon, ten years after the decision was rendered, an undated paper was filed, signed by the new attorney, containing ex

p. 97

ceptions to the findings of the trial judge. This paper is the first trace of anything like an objection or exception along the line of the proceedings; and upon its basis it is now sought to overthrow and invalidate the trust, to break down with it the power of sale, and sweep away utterly about $50,000 of loans upon which this family have lived and this appellant has been supported and educated. His adversary raises no question as to the regularity of the exceptions filed, but looks with sufficient cheerfulness upon the effort to sign a stipulation waiving any undertaking oil appeal to this court or any deposit of money in lieu thereof.

Under these circumstances, I think it our duty to refuse to consider any question beyond the single one raised and •decided hy the special term, and hold the appellant to a rigid and strict observance of the rules of law. All his exceptions, save one, should be disregarded because too general and taken to the whole of conclusions, of law specified by their number, some portions of which at least were beyond question correct, and what portions it was intended specifically to assail it is impossible to say; and none of them can raise a question not involved in the case, but they must all stand upon the assumption that the trust was valid in its creation, but leaving open the inquiry whether it could be administered by Mrs. Rogers under the emergency which had arisen.

Two questions, and only two, are therefore presented by this appeal. First, whether Mrs. Rogers being beneficiary, could also act as trustee; and second, whether the orders directing the mortgages were legal and valid.

The will did not attempt to unite in the same person the office of trustee and the interest of beneficiary. Its terms associate with the executrix four other persons as executors, and to the five or such of them as should qualify, the residue was given in trust. The widow could act freely as to the beneficiaries other than herself, and as to herself four remained who could exercise the control and judgment improper for her. Trusts thus constituted are quite common, and although the trustees other than the beneficiary may die or decline to act, the court has power to supply their place, or, if need be take upon itself the execution of the trust so far as it ought not to be executed by the trustee, who is also beneficiary. In this case the emergency happened. The four executors refused to qualify, and Mrs. Rogers became sole executrix, and that raised the question upon which the special term passed; not of the validity of the trust in its creation, but how it could or should be executed in view of the emergencv which had,

p. 98

arisen. ' The court substituted its own discretion for that of the trustee. Through its own officers it inquired into the facts, and dictated in detail all that should be done.

It might have appointed a new trustee, but having itself exercised all the discretion reposed anywhere, it might direct the mere formal act of giving the mortgage and distributing the money in the proportions dictated to Mrs. Rogers; for the amount going to her was fixed, and that set apart for the minors she could properly apply. We discover no error in the ruling in this respect.

But the appellant objects that there was no power under the will to mortgage the property, but, if anything, only a power to sell: It is to be observed that neither power was expressly given, but the whole legal estate was vested in the trustee who might sell or mortgage it, but not in contravention of the trust. The mortgages directed were not in contravention of the trust, but in accordance with it, and to, accomplish its performance.

The will directed the income of the estate to be paid to his wife, so far as necessary, for the support of herself and his mother, and the maintenance and education of the minors,, and if the whole income was insufficient, to apply so much of the principal as should be needed to make up the deficiency. The personal estate was small and swiftly exhausted. Resort to the real estate required either a sale or a mortgage, and the latter was wisely chosen since the land was steadily increasing in value, and by the choice, the benefit of that increase was preserved to those ultimately entitled in remainder.

In all this we find no error, but a prompt appeal by the widow in the emergency which arose to the aid and discretion of the court, and a series of orders which were lawfully made and both prudent and just.

The judgment and order should be affirmed with costs.

All concur.