Morgan v. Masterton — 6 N.Y. Super. Ct. 442

Majority

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Morgan v. Masterton and others.

Headnote

A testator devised all his estate, real and personal, after the payment of debts, funeral expenses, and three small legacies, to his executors as trustees, for the term of three years, and directed them to accumulate the rents and profits and income during that period; and at the expiration of the three years, if the moneys in their hands should not be applied to the erection of a statue to the memory of Gen. Washington, or should be found inadequate for that purpose, he ordered them to be equally distributed among three charitable institutions. Held, that the necessary effect of these provisions was to render all the property which they embraced inalienable during the continuance of the trust term. And that the property, being thus inalienably vested in the executors as trustees for a term of years not dependent upon lives ; and the limitation in favor of the charitable institutions being a contingent remainder, which could not take effect, if at all, until the expiration of the trust term, those provisions of the will were illegal and void, as coming within the prohibition of the statute respecting perpetuities,

(Before Dum, Masom, and Oampbem, J. J.)

April 13, 16, 16, 1850;

Jan. 25, 1851.

The complaint in this cause was filed in the supreme court in equity, by James Morgan, as sole heir-at-law, and one of the next of kin, of Alexander Morgan deceased, for the purpose of having a paper, purporting to be the last will and testament of the decedent, executed on the 28th day of June, 1841, annulled and declared void and contrary to law; and the plainfiff prayed that the same might be delivered up to be cancelled. The executors and trustees named in the will, together with the legatees and devisees therein mentioned, and the next of kin of the testator, were made parties defendants. The will was in these words:

“ In the name of God, Amen. I, Alexander Morgan, of the city of New York, machinist, being weak of body but of sound mind, memory, and understanding, do make this my last will and testament. After the payment of all just debts, funeral expenses, and testamentary charges, I do give and bequeath unto each of my executors hereinafter named, the several sums of one hundred dollars, independent of any charges which, as executors,

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they may be entitled to make on my estate. I do will, bequeath, and devise unto my executors hereinafter named, and the survivors or survivor of them, all my estate, real and personal, upon trust nevertheless, to collect the rents, issues, and profits of my estate, real income, interest, and dividends of my personal estate, for the period of three years from and after my decease, to reinvest the same either on bond or bonds secured by mortgage or mortgages on real estate, or in the public stocks of the corporation of this city, or of this state, or of the United States, to repair ■ the buildings on my real estate, to insure the same, against fire, and in case my said executors shall deem it proper or advantageous to my said estate, or .more convenient to sell or dispose of my real estate, and proper conveyances to execute and deliver to the purchaser or purchasers thereof, and invest the proceeds of said sale as above directed for the period above specified, and upon this further trust, annually, in two of the daily newspapers of this city to cause advertisements to be published for three days successively, subscribed by my said executors or the survivors or survivor of them, that they hold in their hands a sum of money (setting forth about the amount) which they will be ready to appropriate towards the erection of a statue to the memory of General George Washington, in the city of New York, on such site as the corporation of this city may assign for that purpose, and which my said executors may approve, and after such design as my said executors may furnish, and also that they will co-operate with any committee who may undertake to raise by subscription, moneys sufficient, in addition to those here appropriated, to make such statue on a scale of magnificence corresponding with the merits of the subject it is intended to perpetuate, and the greatness of the city selected for its location.

“ And upon this further trust, in' case my said executors or the survivors or survivor of them shall, at the expiration of the said three years, find the said funds inadequate, or that they have not been able to induce any committee to unite with them and procure subscriptions, at least equal to the moneys in their hands, or that the corporation have neglected to provide a suit

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able site for the erection of said statue, then and in such case, upon this further trust, after delivering my turning lathe with a rose engine, with all the articles belonging thereto, to the New York Institution for the Instruction of the Deaf and Dumb, to divide the said moneys with the accumulations thereon, or the bonds secured by mortgages, or the stocks in which the same may be invested, into three equal parts, and pay and deliver one-third part thereof to the New York Institution for the Blind, one other third part thereof to the society of the New York Hospital, to be applied by said last-named society to the procuring and paying for night and day watches, for the poor maniacs under their care, and otherwise for the care and comfort of these unfortunate beings, and the remaining one-third part thereof to the New York Institution for the Instruction of the Deaf and Dumb. Lastly, I do hereby nominate, constitute, and appoint my friends, Alexander Masterton, of Eastchester, in this state, stone-cutter, John Buchanan, of this city, soap-boiler, and Grassett Launy, of this city, coppersmith, executors of this my will, and trustees of my estate. In witness whereof,” &c.

The executors, and two of the charitable institutions named in the will, put in answers, insisting on its validity.

J. T. Brady, for the plaintiff.

I. The testator made no valid testamentary disposition of any part of his estate, real or personal. (1st.) As to the real estate. It is not disposed of at all, except by the devise in trust to the executors. Assuming the trust to be void, and that the devise is not valid as a power, the heir must take this estate. Even if the trust could be sustained, yet the real estate itself is not disposed of, and the trust and ultimate disposition in the will relate only to the rents, profits, or income of that estate. A sale of the real, estate not being absolutely directed, but- made dependent on the discretion of the executors, or the occurrence of a contingency, it retains its character as real estate, and even if it were sold by the executors, that which represented the fee

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in the proceeds would belong to tbe beir. (Wright v. Trustees of Methodist Church, 1 Hoffman’s Ch. Rep. 202; Ackroyd v. Smithson, 1 Br. Ch. Rep. 503; Mr. Cox’s note in 3 P. Wms. 22; Jarman on Wills, 526, 529, 553; Amphlett v. Park, 2 R. & M. 221.) (2d.) As to tbe personal estate, Tbe will merely directs tbe investment and disposition of tbe income and dividends of tbe personal estate. Tbe principal of that estat§ is not disposed, of. Tbe cases above cited present tbe legal principles which are to be applied under this point. The language of tbe will admits of no sound construction except that here suggested. If tbe second point be sustained, then tbe court have only to consider tbe question of the validity of tbe will in reference to tbe income and profits of tbe real and personal estate, and would be required to declare that no other part of either was disposed of by that instrument, so as to cut off tbe beir or next of kin.

II. Tbe will is void as to both the real and personal estate. (1st.) Tbe trust to accumulate tbe income of tbe real or personal estate -for three years, either with tbe view to have a statue erected, or for tbe benefit of tbe ultimate devisees, (who are adults,.) is contrary to tbe provisions of the revised statute, and void. (1 R, S. 728, § 55; 4 Kent’s Com. 310; 1 R. S. 726, § 37; p. 761, § 2, 3, 4, 5.) (2d.) Tbe trust, as to tbe primary object of tbe testator in reference to tbe statue, is unquestionably void. (3d.) Tbe trust being for an absolute term is for that reason also void. (Bronson, J., in Hawley v. James, 16 Wend. 65 .)

III. The provisions in the will designed as trusts, do not create a valid power, because the accumulations directed are contrary to law, and because such provisions relate to a design of the testator impracticable, if not. illegal in its nature. And it is also insisted that where tbe testator attempts to create a trust eo nomine, and tbe attempt fails, a power cannot by judicial construction be substituted to accomplish indirectly what the law condemned.

IY. The ultimate disposition of what is given by the will cannot, in any view of the case, be sustained, for reasons already suggested in these points, and also because — (1st.) That ulti

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mate disposition is predicated of the attempt to execute the trust, and the failure for certain specified reasons. It is not limited on the trust itself, being from its own nature and by law defeated. (2.) The trusts are in the alternative, and mixed and complicated together, so that the separation of them is not either obvious or practicable, and the trust, though composed of several parts, is single. (Darling v. Rogers, 22 Wend. 483 , 494; Coster v. Lorillard, 14 Wend. 265 ; Hawley v. James, 5 Paige, 318; 16 Wend. 61 , and page 144; Hone’s Executors v. Van Schaick, 20 Wend. 564 ; Van Kleeck v. New York Dutch Church, 20 Wend. 451 ; Sharpstein v. Tillou, 3 Cow. 651 ; Jarman on Wills, pp. 301, 553, 555, 568; Schauber v. Jackson, 2 Wend. 13 .)

D. D. Lord and B. F. Butler, for the defendants, the executors and the charitable institutions.

I. The executors being authorized to sell the real estate, there is an equitable conversion, and the whole property is, therefore, to be viewed as personalty. (Gott v. Cook, 7 Paige, 534; S. C. 24 Wend. 641 ; Stagg v. Jackson, 1 Comstock, 212.)

II. ' Trusts of personal estate, and of the income thereof, not being enumerated in the section of the revised statutes which defines the purposes for which express trusts may be created of lands, the bequest in trust to the executors, in the present case, is not affected by that section, and will be upheld if otherwise lawful. (2 R. S. 728, § 55; Gott v. Cook, 7 Paige, 534; S. C. 24 Wendell, 641; Van Vechten v. Van Veghten, 8 Paige, 104.)

III. There is no suspense of the absolute ownership of the property, in the present case, unless it be produced by the direction to invest and accumulate the funds for three years, with a view to the contingent application thereof, at the expiration of that period, to the erection of the. statue mentioned in the will.

IV. If it be conceded that this direction involves, for the period named, a suspense of the absolute ownership of the property ; and if it be further conceded, that the direction for the

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accumulation of the income during said period is also unauthorized and void; jet the last trust created by the will, in respect to the capital or principal bequeathed to the three institutions therein specified,, is valid, because for a lawful purpose, and totally distinct from the objectionable provisions which precede it. (Darling v. Rogers, 22 Wendell, 483; Van Vechten v. Van Veghten, 8 Paige, 104; Parks v. Parks, 9 Paige, 107 ; Irving v. De Kay, 9 Paige, 521.)

Y. Even if the principle of equitable conversion be not applicable to this case, and though it be conceded that the trust estate in the realty is void, yet the power of division between the three institutions is valid as to the realty, as a power in trust. (2 R. S. 729, § 56, § 58; 2 R. S. 724, § 24.)

YI. Whether, therefore, the estate be regarded as consisting wholly of personalty, or as consisting in part of realty also, the executors and trustees should be directed to divide the capital or principal thereof, at the expiration of three years from the testator’s death, between the three institutions mentioned in the will.

By the Court.

It is scarcely possible to extract a consistent meaning from the provisions of this very obscure will, and were it necessary to make the decision, we should be greatly at a loss to determine whether the fund which is to be applied or distributed in the manner stated in the will, at the end of three years from the death of the testator, must be construed to embrace the entire capital of his estate, real and personal, (the real being converted into money or securities by a sale,) or must be limited to the accumulated rents, profits, and income. It is not necessary, however, to decide the question, since whichever may be the true construction, we are clearly of opinion that the dispositions in the will cannot be sustained.

The testator devises all his estate, real and personal, after the payment of debts, funeral expenses, and three small legacies, to his executors as trustees for the term of three years from the time of his death, and directs them to accumulate the rents, profits, and income, during that period; and at the expiration

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of the time, if the moneys in their hands (whether including the proceeds of a sale of the real estate is uncertain) shall not be applied to the erection of a statue to the memory of General Washington, or shall be found inadequate for that purpose; he orders them to be equally distributed .among three of our charitable institutions — The New York Hospital, and the Institutions for the Deaf and Dumb, and for the Blind, It is needless to state the proyisions of the will with more particularity, since it cannot be denied that their necessary effect is to render all the property which they embrace, inalienable during the continuance of the trust term; and whether that property be partly real and partly personal, or by an out and out conversion of the real, wholly personal, .is immaterial, since the distinction cannot prevent or vary the application of the statutory rule in relation to perpetuities. The rule is the same, whatever may be the description of the property to which it is applied. Whatever in this case may be the nature of the property, it is vested in the executors as trustees, for a term of years not dependent upon lives, and wholly suspending, during its continuance, the power of alienation, and the limitation in favor of the three institutions that have been named is a contingent remainder, which from the terms of its creation could not take effect, if at' all, until the expiration of the trust term. We have struggled in vain to escape from the conclusion that the term and the remainder are equally and wholly void. The decision of the court of errors in Hawley v. James,^[1] has settled the law that under the revised statutes there can be no suspense of the power of alienation for an absolute term of years, however short in its duration. Unless the continuance of the term is made to depend upon not more than two specified lives in being, it is wholly void,.and as we' understand the decision, every remainder which is only to take effect at the expiration of the term as too remóte, is equally void. It is possible that there may be a distinction in these cases between a vested and a contingent remainder, but the distinction,’if it exists, is not applicable to the préseñt case,

(a) (a) it) 16 Wend. 61 '.

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since the remainder here is plainly contingent. It is probably a subject of just regret that the opinion of Chancellor Walworth, allowing a suspense of the power of alienation during a moderate term of years, was not followed in the court of errors, but we are bound by that interpretation of the revised statutes which the court of ultimate resort has adopted and to which it has constantly adhered. We certainly think that the law in its present state is defective, and a source of frequent and serious inconvenience', but it is only by an exercise of legislative power that it can now be altered and amended.

It was suggested that we might get over the difficulty in the present case by holding the trust term, the direction to accumulate, and the discretionary power given to the executors to apply the moneys in their hands to-the erection.of a statue, to be alone void, and. thus give effect to the remainders as a vested and immediate interest, but-we think that by converting a future into a present estate, and a contingent into a vested interest, we should make a will for the testator, instead of expounding that which he has himself made. It is possible that had the testator known or anticipated that the prior limitations in his will would be adjudged to be void, he would have made an immediate and absolute devise of his estate to the institutions which are conditionally the objects of his bounty; but no such intention can be deduced from the language of the will, and upon a mere conjecture, however probable, we cannot disinherit the heir-at-law, nor deprive the next of kin of their rights in the personalty. It fortunately happens that the heirs and next of kin of the deceased are his near relatives, whose reasonable expectations as the natural objects of his bounty, from some unexplained cause in making his will, he wholly disregarded. Under the Roman law, such a will would have been set aside as inofficious, that is, as violating the moral obligation which the ties of kindred create.

This imperfect obligation is not enforced by our own law, but it is not the less true that it exists.

There must be a decree declaring that all the provisions of the will, except those which relate to the payment of debts and

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funeral charges, and the appointment of executors and the payment of their legacies, are illegal and void, and that the real estate has descended to the heirs-at-law, and that the next of kin are entitled to the residue of the personal. There must also be a reference to a suitable' person to take and state the accounts of the executors, and to ascertain and report who, as next of kin, are entitled to distributive shares in the personal estate.

The costs of all the parties, and reasonable counsel fees of the executors, are to be paid out of the fund in their hands.

Further directions are reserved until the coming in of the report of the referee.

Cases cited

Darling v. Rogers & Sagory 22 Wend. 483 N.Y. at 494 p. 446
Coster v. Lorillard 14 Wend. 265 N.Y. p. 446
Hawley v. James 16 Wend. 61 N.Y. p. 446
Hone's Executors v. Van Schaick 20 Wend. 564 N.Y. Sup. Ct. p. 446
Sharpsteen v. Tillou 3 Cow. 651 N.Y. Sup. Ct. p. 446
Schauber v. Jackson 2 Wend. 13 N.Y. p. 446