Montignani v. Staats Blade — 64 N.Y. St. Rep. 558

Majority

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John F. Montignani, as Administrator with the Will Annexed, App’lt and Resp’t, v. Mary Y. Staats Blade et al., App’lts and Resp’ts.^[1]

(Court of Appeals,

Filed February 26, 1895.)

Headnote

1. Will—Construction—Heirs.

Where the will shows on its face that the person, whose heirs are referred to, is, to the knowledge of the testator, at that time living, the term, “heirs” is not used in its strict technical sense, but means, in the case of land, heirs apparent or those who would be the heirs were the living ancestor deceased, and. in the case of personal property, those who would be next of kin, were the ancestor deceased.

3. Same—Perpetuities.

Where the trust is, in substance, for two lives or a shorter period and cannot, in any event, exceed their duration, the bequest is not invalid.

3. Same.

The addition of a provision, intended merely to aid and assist in reaching the ultimate result of a satisfactory division of the bequest among the legatees, and not at all to mar or defeat it, does not affect such validity.

4. Action eor construction oe will—Jurisdiction.

In an action simply for the construction of a will, the court has no power to go outside of it and construe an independent business agreement.

Gross-appeals from judgment of the general term of the supreme court in the third judicial department, entered upon an order which modified and affirmed as modified a judgment construing the will of Bernardus E. Staats, deceased, entered upon a decision of the court on trial at special term.

This action was brought for a construction of the will of Bernardus E. Staats, deceased. The provisions of the will in question are as follows:

“I hereby bequeath and give to my son, Bernardus E. Staats, all my shares of stock in Wells, Fargo & Company Express, to be held in trust by-my executors ten years from and after my decease, then to be delivered and transferred to him, if deceased do and continue the same to his son William, now in his eighth year of age. The dividends shall be collected, when and as declared, by my executors until transferred and delivered and paid to "my son, or, if deceased, to his son William ; if both are deceased before the ten years have expired, then transfer and deliver the said shares to my daughters, Lydia Ann Staats, and Mary Yates Staats, each share and portion equal. If either daughter is deceased, her portion shall be transferred and delivered to the remaining daughter. If both are deceased, then this bequest shall be given to my daughter-in-law, wife of my son John H. Staats,' or their heirs, and my daughter-in-law Harriet Staats, or her heirs, each share and portion equal.

“I bequeath and give to my daughter-in-law Harriet Staats, Widow of my deceased son, William Staats, fifty shares of American Express Company stock, to be held in trust seven years from my decease, for my grandchild, her daughter, Bella T. Staats, then to be transferred and delivered to this daughter ; the income,

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i. e., dividends, shall be collected by and paid to either mother or daughter, for mutual support and benefit; if the said daughter is deceased before the expiration of the seven years, then this bequest to her shall be given and transferred to her mother; if both mother and daughter arc deceased before the seven years have expired, then this bequest shall be transferred and delivered to the heirs of rny son, John H. Staats.

“I hereby bequeath to my daughter, Mary Yates Staats, the house and lot No. 52 Elm street, now occupied by myself, also all the furniture and housekeeping articles and utensils therein, for her own occupancy and use, to be held in trust by my executors seven years from and after my decease. I also bequeath to said daughter all my shares of stock in the New York Central and Hudson River Railroad Company; the dividends, when declared, shall be collected by my executors and paid to said daughter. At the expiration of,the seven years the.foregoing bequests shall be transferred and delivered to said Mary Yates Staats, as and when, so requested by her and practicable. If this daughter is deceased before the expiration of the seven years these bequests shall be delivered to, or disposed of, as my daughter, Lydia Ann Staats, and rny son, John H. Staats, shall request and direct; the proceeds shall he paid to my daughter, Lydia Ann Staats, and my son, John H. Staats, shall request and direct; the proceeds shall be paid to my daughter, Lydia Ann Staats, and my daughter-in-law, Willa F. 0. Staats, and my daughter-in-law Harriet Staats, each share and portion alike, as near as can be done and satisfactory to all concerned.”

“From the cash funds belonging to myself in the First National Bank, Albany, pay funeral and burial expenses and other just claims against myself, the residue or balance, if any, pay to my daughter, Mary Yates Staats.”

Eugene D. Flanigan for Harriet Staats el al., app’lt and resp’ts; George H. Stevens for Mary Y. Blade, app’lt and resp’t; Isaac Maynard and Robert G. Scherer for Willa F. C. Staats, app’lt and resp’t; George H. Mallory for resp’t and app’lt.

This action is brought to settle the construction of the last will of Bernardus E. Staats, deceased. The validity of the first disposing clause, which gives to his daughter Lydia Ann his stock in the Fourth National Bank of New York, is not disputed or open to. any doubt. But several of the bequests following have been declared invalid.

Thetestator’s second bequest is to his son Bernardus, and consists of Wells, Fargo & Co. Express stock, but with the following limitation, viz.: “To be held in trust by my executors ten years from and after my decease, then to be delivered and transferred to him; if deceased, do and continue the same to his son William, now in his eighth year of age. The dividends shall be collected when and as declared by my executors until transferred and delivered and paid to rny son, or, if deceased, to his son William; if both are deceased before the ten years have expired, then transfer and deliver the said shares to my daughters Lydia Ann Staats and

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Mary Yates Staats, each share and portion equal. If either daughter is deceased, her portion shall be transferred and delivered to the remaining daughter. If both are deceased, then this bequest ghall be given to my daughter-in-law, wife of my son John H. Staats, or their heirs, and my daughter-in-law Harriet Staats or her heirs, each share and portion equal.” The testator drew his own will, and this disposition is, in some respects, awkwardly expressed, and yet is not of doubtful meaning. The special term pronounced the bequest invalid upon the ground that a trust for ten years was created which suspended the absolute ownership of the stock for a longer period than two lives in being. The general term reversed that conclusion and adjudged the disposition to be valid and effectual. The appellate tribunal was clearly right. The suspension was not for an arbitrary or fixed period, nor was the trust so limited. Both were bounded by the two lives of Bernardas, the son, and William, the grandson. Explicitly and in terms it is declared that, if both die within ten years, then the stock is to vest at once in certain named persons. The trust in such event necessarily ends, although the ten years have not expired, and is inevitably terminated by the expiration of the two named lives, both in being when the will took effect. In substance, the trust is for two lives or a shorter period, and cannot, in any event, exceed their duration. It can run for ten years only on condition that one or both of the selected lives continue so long. If they do, the trust ends and the gift vests during such lives, but at the end of the fixed period; if they do not, the vesting at once occurs, although the fixed period has not expired. There is, therefore, no undue suspension of the absolute ownership of the stock as a consequence of the trust created, and the general term correctly decided that the bequest was valid and effectual. Schermerhorn v. Cotting, 131 N.Y.48; 42 St. Rep. 608 . The dividends declared upon the stock are to be' collected by the administrator and paid over when collected to the beneficiaries, as directed; to the son Bernardos, if living, and, if not, to the grandson William; such payments to continue during the running of the trust. If at the end of ten years Bernardos is living the stock becomes his ; if he is dead at that date, but the grandson is living, the stock will be his; if both be dead at that date or earlier, it will go absolutely to the remaindermen. The interests of Lydia and Mary appear to be contingent upon their survival respectively at the period which shall end the trust If at that date the one be dead the remainder goes to the other; if both are dead it goes over to the daughters-in-law and their heirs respectively, and in equal shares.

' The third disposition of the will was pronounced void by the general term for reasons which we are unable to appreciate. Its form is almost exactly like that of the previous bequest which was held valid, and differs only in the fact that the fixéd period is seven years instead of ten. It creates a trust for the benefit of the daughter-in-law, Harriet, and her daughter Bella, and provides that for seven years the income shall be paid to them for mutual support and benefit, but if Bella lives to the end of the seven years the stock goes to her; if she dies before that period it goes to Harriet;

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but if both be dead before the expiration of the seven years then it vests at once and absolutely in the heirs of the testator’s son John. Here, again, there is no trust which must continue seven years, but one measured by the two lives of Harriet and Bella, at the end of which it will inevitably vest, but may vest earlier and within those lives by force of' the fixed period which terminates the trust, although the selected lives continue. The same considerations which induced the general term to hold valid the prior bequest should have operated to preserve this one which is equally valid and effectual, it is true that the testator in providing for the ultimate vesting gave the stock to the “ heirs ” of his son John, and since John is living and strictly can have no heirs until his death, it is argued that the vesting is postponed for the further life of John. But where the bequest is of personal property the word heirs is taken to mean those in the line of distribution, or the next of kin; and where the will shows on its face that the person whose heirs are referred to is, to the knowledge of the testator, at that time living, it is obvious that it is not used in its strict technical sense, but means in the case of land, heirs apparent, or those who would be the heirs were the living ancestor deceased, Hearnd v. Horton, 1 Den. 168 , and in the case of personal property, next of kin, w ho would be such were the ancestor deceased. Cushman v. Horton, 59 N. Y. 151 . In this will the son John is twice spoken of as living, and once in a connection which implies his active interference, and since the intent to vest the remainder absolutely is manifest, we must take the word “heirs,” as used by this unskilled testator drawing his own will, to mean those who, if John were dead, would be his heirs or next of kin. There is thus no difficulty in holding that the absolute ownership was not postponed beyond the required two lives.

The fourth disposition of the will was deemed invalid as creating an unlawful suspension both by the special and general term. With one exception it is framed in the same general manner as the two which immediately precede it. It disposes of the house and lot on Elm street and the furniture therein, and also of testator’s Hevir York Central stock, puts them in trust for seven years, provided the single life of his daughter Mary shall continue so long. The trust, therefore, runs for one life or the shorter period of seven years within that life. If Mary lives beyond that term the house and lot and stock become hers', but it is explicity provided that if she dies before the expiration of the seven years the property shall vest in the daughter Lydia, and the two daughters-in-law Willa and Harriet. Although the testator describes his disposition as bequests it evidently covered the real as well as the personal property. During the running of the trust up to its termination at the end of seven years, or its earlier termination by the death of Mary, she is to have the use and occupation of the house and lot, and the dividends on the stock. If she survives the seven years both become hers absolutely, but if she dies before that period the trust does not continue, but ends at once, and the remainder takes effect. I think that is so notwithstanding an inter

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jected clause, not appearing in the previous dispositions and peculiar to this one alone. The whole limitation of the remainder is in these words : “ If this daughter is deceased before the expira-

tion of the seven years these bequests shall be delivered to or disposed of as my daughter Lydia Anna Staats and my son John H. Staats shall request and direct; the proceeds shall be paid to my daughter Lydia Anna Staats, and my daughter-in-law Willa F. (X Staats, and my daughter-in-law Harriet Staats, each share and portion alike as near as can be done, and satisfactory to all concerned.” Obviously the interjected clause which gives some power or authority to the daughter Lydia and the son John cannot be construed as a power of appointment or as conferring upon them any estate, for that would be repugnant to the disposition which the testator himself proceeds to make of the entire estate in remainder to the three persons named. His use of the word “ proceeds” and the situation of the property indicate his real meaning. He foresaw that the house and lot, the furniture and belongings, and the Central stock might not be easy of division into-the contemplated thirds. The devisees might disagree as to the value of the land or the terms on which it should be sold, or the division of the Central stock, and as to whether there should be an actual division or a sale and division of proceeds. The testator desired, without affecting his devise and bequest in remainder, which he proceeds at once to make, to put the necessary division under the advice and direction of Lydia and John, making them arbiters of the differences which might arise, and that is the solb effect of the interjected phrase. Their preferences as to the manner of division, if not unfair to the rights devised and bequeathed, should guide the conclusions of the parties or of the court in the event of disagreement, but their choice will not be conclusive-since it is plainly subordinate to an actual and just division between the three, and is a provision intended merely to aid and assist in reaching that ultimate result and not at all to mar or defeat it. The suggestion is in line with many other similar expressions in the will adding the “ request ” of legatees to the fact- and time of payment, and ordering the division into thirds “ satisfactory to all concerned.” The testator desired peace to follow his death and not war, and sought to reach it. There is no just, reason for destroying this fourth disposition, and we hold it to be valid and effectual.

The fifth disposition of the will makes Willa F. 0. Staats residuary devisee and legatee, and is followed by a clause which the general term has construed in a manner which we approve, but accompanied with a further decision which we do not approve. It reads thus: “ From the cash funds belonging to myself in the First National Bank Albany pay funeral and burial expenses and other just claims against myself; the residue or balance, if any, pay to my daughter Mary Yates Staats.” The extrinsic facts proved were that on the 25th day of November, 1890, the testator borrowed three hundred dollars from the First National Bank of Albany and gave his note therefor. On the 8th of December following he executed, in the usual manner, a formal transfer to Van.

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Allen, the president, and Rowell, the cashier of the loaning bank, of ten shares of the capital stock of the Central National Bank of New York city, and containing the ordinary power of sale. He sent that by mail to the transferees, accompanied by a letter stating the transfer and adding; “ With the proceeds pay my indebtedness to the First National Bank, Albany, N. Y, and the balance to pay my daughter, Mrs. Mary Yates Blade, wife of Wm. Blade, Jr.” The transfer was plainly intended as collateral to secure the bank for its loan. Early in 1891 he paid up the note, leaving the collateral in the hands of the bank, and soon thereafter borrowed again, presumably upon the security of the same collateral. The last loan has not been paid, but the bank has not sold the stock or resorted to its collateral to enforce payment. Mrs. Blade was testator’s housekeeper, and he was in the habit of giving her money to enable her to meet the current household expenses. There was, at the date of his death, a cash balance of about one hundred and thirty dollars standing to his credit on' the books of the bank. The will was executed in November of 1889, and before the transfer of this collateral. On this state of facts the special term adjudged that an express trust was created for Mrs. Blade covering the stocks transferred as collateral, and which constituted Van Allen and Rowell trustees of such trust property. The trial court also adjudged that the “cash funds belonging to testator in the First National Bank, Albany, were only the sum of $130.84 there on deposit to his credit.” This last was a perfectly correct conclusion, and within the scope of the action, because determining the construction of the phrase “cash funds,” as used in the will. But beyond that the court had no right to go. The action was for the construction of the will, and gave no power to travel outside of it and pass upon the construction of an independent business agreement, and that, too without bringing in the bank, which may have rights' against the stock, or the individuals who are burdened with the trust. That part of the judgment impressing a trust upon the stock should, therefore, be reversed; but in view of the situation of the parties, and in the hope of averting needless litigation, we deem it proper to add that, in our opinion, no trust whatever was created in the stock transferred as collateral ; that Van Allen and Rowell were not made, and did not become, trustees of an express trust, and that the claim of Mrs. Blade cannot be sustained upon that ground, nor as a gift, because unexecuted. Young v. Young, 80 N. Y. 438 .

It follows, therefore, that all the dispositions of the will are valid and effectual, that the judgment of the general term so far as it destroys any of them, and so far as it affirms the judgment of the special term impressing a trust upon the stock held as collateral be reversed and judgment be entered in accordance with the conclusions of this opinion, the costs of all parties to be paid out of the estate. The form of the judgment to be entered, in case of disagreement, may be settled before the judge writing the opinion.

All concur.

Judgment accordingly.