Cushman v. Cushman

116 A.D. 763, 102 N.Y.S. 258, 1907 N.Y. App. Div. LEXIS 21

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: January 18, 1907
• Status: Published

Opinion

Jenks, J.:

The defendants demurred to the complaint with success at first, but this court reversed the interlocutory judgment. They pleaded anew and have succeeded upon the trial before the referee. ( The opinion of the court upon the first appeal, written by Willabd Bartlett, J., states the preliminary facts and defines the issues. (102 App. Div. 377.) The opinion of the learned referee upon the trial also lightens my labor.

The scheme of the testator Robert S. Cushman dealt with his three sons alike. Generally speaking, it gave the residuary estate to his executors in trust to pay the income to the sons. At a fixed period, if any of the sons, in the judgment of the executors, showed certain qualities, it empowered the executors to pay over the corpus to him, otherwise it continued the trust. If, however, at any time subsequent thereto, any son who had not been qualified at the fixed period should in the judgment of the executors reveal those qualities, it then empowered the executors to pay over the corpus, otherwise it continued the trust. The plaintiff does not contend that the son Thomas (with whom alone we are dealing)_ was qualified to receive the corpus at the fixed period, but that about 10 years thereafter (while the executor was alive) and ever after, Thomas became qualified, not only in fact, but also in the judgment of the executor, within the purview of the scheme to receive the corpus. The suit, in brief, is to recover the corpus and for an accounting as to it.-

There is no proof whatever against the finding that this son never so reformed his habits and so conducted himself as rendered him in the judgment of the executor of the said will, Paul Cushman, competent to manage and properly use and dispose of the share of his estate.

Inasmuch as the testator had constituted the executors the judges of such competency, it was not enough for the plaintiff to establish to the satisfaction of the court that this son had .so reformed and had so conducted himself as to be competent. If this sufficed, then in effect, contrary to the express requirement of the testator, the court and not the executors is the judge of such competency. Hill on Trustees (4tlx Am. ed. p. *490) says: “ If the trustees refuse or noglect to exercise it (the power) the gift cannot be enforced. And in such cases the court cannot decide upon the propriety or impropriety of the refusal by the trustees to give their assent. Unless the refusal be shown to proceed from a vicious, corrupt, or unreasonable cause. And it will rest with the other party to prove the existence of an improper motive, and not with the trustees to show a reason for their refusal.” This decision, if made in good faith in the fair exercise of discretion, should not be disturbed by ■ the court. (See Perry Trusts [5th ed.], §§ 507-519, especially § 508 ; Ha/wley v. James, 5 Paige, 468 ; Colvin v. Young, 81 Hun, 116.) I think that the rule obtains to the extent expressed in the first sentence quoted from Hill (supra): “ If the trustees refuse or neglect.” And hence it matters not that there is no express proof of any application by this son to the executor. There was no fixed period (after the expiring of the first period) when the executor should determine as to the son’s habits and competency, and hence the executor was not called upon at any definite time to decide that question. If the son thought at any time that he met the conditions, it was his duty to call for the exercise of the power by the executor. His neglect to do so for ten years _ after it is asserted that he was entitled to the exercise of the power should not now make for him or his representatives so as to secure the judgment of the court in place of the judge constituted by the testator. Without consideration of all absence of proof that the executor at any time was requested to make over the fund, if I am right in my view, the plaintiff cannot virtually depose the judge chosen by the testator, set up the court in his place and contend that if the court is satisfied that the son had reformed and had become competent, it is enough to remove the condition. It seems to me that the plaintiff must show that the failure of the executor to act is attributable to selfish, corrupt or improper motives and could not be attributable to a fair exercise of discretion upon the facts. However this may be, I am convinced that even if the court were the tribunal of the first instance to determine this questian, there is no evidence which would justify a finding for the plaintiff. The expressions of the testator with reference to the first period are: “ Provided, however, that such sons are then or shall at that time, be of good moral habits and shall be in the judgment of my said executors competent to take charge of and prudently use, manage and dispose of such shares, * * * but in case * * * shall * * * be of so immoral, prodigal or improvident habits and character as shall render him * * " incompetent to properly and prudently use and manage * * * in the judgment and opinion of my said executors.” As to the second period they are: “In case either of my said sons who shall or may be incompetent at the period above mentioned in the judgment of my executors to receive and properly manage his share or portion of my estate, shall at any time afterwards so reform his habits and so conduct himself as td render him in the judgment of' my said executors competent to manage and prudently use and dispose of his said share or portion of my estate, that then and in such case” the executor might pay over. And then finally: “ It is hereby expressly declared to be my desire, wish and intention, to vest my said executors and their survivor with the discretion of judging in regard to the capacity, moral character and habits of my said sons in respect to their competency respectively to properly and prudently manage and dispose of their respective shares in my residuary estate, and to withhold the said principal of said shares from either or any or to convey and transfer the same to either or any of my said sons, as the exercise of their sound discretion and honest judgment in the premises shall deem fit and proper, and in accordance with my will herein expressed in regard to my sons but neither of my said executors shall in any manner be held liable for any error of judgment in the premises.” The scheme of the testator is not one of punishment for immorality and’reward for reform by withholding or bestowing the corpus of the fund. His main intention is to make secure provision out of his estate for his sons. To that end lié fastens a trust upon the fund which may cease if provisions may be made reasonably secure without it. The conditions of cessation of the trust are moral character and competency prudently to use, manage and dispose of the fund itself. Moral character alone. does not satisfy the conditions, for the testator is not satisfied that this alone will preserve the estate, but there must be business capacity. Moral character might assure that the money would not 'be dissipated in immoral ways,, but it would afford no assurance — (the examples to the contraryare countless) — that however ascetic and unspotted from the world the son might be,: he had the capacity properly and prudently to manage and to dispose of the corpus. The testator does not regard alone how the money may be expended, of which" morality may assure propriety, but whether it may be managed and prudently used and disposed of. If there be no assurance of this, then .the" property is. to be preserved by the trust fastened upon it. The case as presented may be "thus summarized: At the first' fixed period tins son was not qualified in any -way to 'receive the corpus,, Some time in 1888 he became temperate and thereafter was a total abstainer. His habits of private life were good, He did* not gamble, he did not make reckless expenditures, and he was a careful buyer of cigai-s for his business as an innkeeper. On. the other hand, he h,ad been in the receipt of tire income of $50,000 for a period beginning before his majority until he was- 44 years old,. arid he was not required by his station- in life or by claimants upon his bounty to make any expenditures. He had little to. show for the income of -those'mhny years! . He had ventured in th'e coal business and had lost from $14,000 to $40,000, and had spent liis * e ' i , money foolishly, as he admitted.. When he was set up' in business as a hotelkeeper lie. had failed to make the business profitable. These were .all of his business Undertakings. He had at different times expressed washes to venture in the ice business, in a. brew-cry, in farming, but nothing Caine of them. -He seems to have .drifted-along without exertion or energy, enterprise ■ or business achievement, dependent upon his income, which in the latter years of his life-he often outran. With this, history before us can it be said that a. fair-minded executor, or,.disregarding the judge selected by the testator, that any person in the -exercise of said judgment could conclude that the fund should be freed from the trust because the cestui que trust had revealed liis capacity prudently to use, manage and dispose of a fund of $50,000 ? ' Upon the facts I can see-no ground for disturbing the decision of the learned referee; (Lowery v. Erskine, 113 N. Y. 52.)

The point is made first in this court that the trust made by the 8th clause of the will is invalid, for the reason that it suspends the power of alienation for more than two lives in being. The argument is that as the trust cannot terminate until the “ youngest child now living shall attain the age of twenty-five years, or until such time as such youngest child would if living have attained to the age of twenty-five years,” the trust is not for the life of this son, but is to continue until a definite period, namely, that when the youngest son would if living be twenty-five years old. Although- the estate was consolidated into one trust, it was for the purpose of dividing and paying over the income to the three sons equally — to each oñe-third. Moreover, the testator expressly provides that if the share had not -been theretofore paid over, “ in case of the death of such child or of either of such children or of either of' my said three children leaving no lawful issue surviving before receiving actual possession of his share or portion aforesaid of my estate, then and in such case, I give and bequeath the share or portion of such child or children so dying to my brother Paul and to his heirs forever, but otherwise ■then to the lawful issue of such of my children as may die leaving such-lawful issue him or them surviving.” It seems to-me, then, that the interests are “separable and distinct and the will is to be construed as though in terms it had created a separate trust for each child and the issue of each child,” if any, within the principle laid down in Wells v. Wells (88 N. Y. 323) and the authorities therein cited. The utmost period of the suspension of the ownership so far as Thomas is concerned is Iris' life. The period fixed by the testator as that when the youngest child would be or would have been if living twenty-five years old, is ."the fixed period when the executors might as to any child then qualified terminate the trust by bestowal of the corpus. It is not the period during Which the trust must exist inasmuch as the plain subsequent direction of the testator is-that as .to each child’s share it shall upon his death go to his issue, or that failing, to the testator’s brother or his heirs. The trust then ended at the death of Thomas. (Montignani v. Blade, 145 N. Y. 111.)

It is probably a sufficient answer to the suggestion of the respondent that the various proceedings before the surrogate were not an •estoppel so far as the question of the validity of the trust is concerned, that all of the parties' interested were not before the court (Riggs v. Cragg, 89 N. Y. 480), inasmuch as onei of the sons was dead, and it does not appear that his representatives Were made parties. But for this I should be strongly inclined' to the view that. perforce of the petition and proceedings indicated by. the defendant’s Exhibit B, there existed an estoppel. (Thorn v. De Breteuil, 179 N. Y. 64.) But I may consider that the' present action is in repudiation of the long-continued course’of contemporaneous coñstruction, and that its equities do not appeal to the vigilance of a court óf equity. The testator died in 1871. This son became twentyrfive years old. in 1879:, yet no distribution was made nor, so far as it appears, was there'a murmur against it. In 1885 the two survivors united in an accounting proceeding against the executor, which resulted in .a. decree that one-third of the corpus should be paid to the children of the deceased son, and that the trustee should retain the shares of the petitioners. Upon the death of the other son there was another accounting, and various successive accountings in 1889, 1891 and 1894, Wherein the court disposed of the matters Upon the theory that, the trust existed, and throughout this son' acquiesced. (See Thorn v. De Breteuil, supra, 81; Follmer's Appeal, 37 Penn. St. 121; Hagerty v. Albright, 52 id. 274; Wrights v. Oldham, 8 Leigh [Va.], 306.)

I.am of opinion that the one-third of the estate never vested in this son. The scheme of the testator was not to defer the time of possession, but to withhold possession until the son was twenty-five years old, when, if he had reformed,, and was competent, and only in that event, he was to receive the corpus, and likewise is the provision for á subsequent gift thereof. It was an estate in expectancy, a future estate,,and it was contingent because it was uncertain", whether the son would, at the time fixed for possible enjoyment* or at any period thereafter, be so reformed and so competent as to entitle him to the estate under the discretionary power of decision conferred on the executors. (4 Kent’s Comm. [14th ed.} *206.) It is contingent in that the event on which it is limited remains uncertain.. (Real Prop. Law [Laws of 1896, chap. 547], § 30, founded on 1 R. S. 723, § 13.). Because- this son is he who shall take if the condition be met* it does not follow that the person- is certain, It is not Thomas who can take, but Thomas reformed and ■competent. And it was permissible for the expectant estate to be thus hedged in. (Real Prop. Law, § 47, founded on 1 R. S. 725, §§ 32, 33.) As to the feature of contingency, see Hawley v. James (supra, 485, which point was not affected by the reversal in 16 Wend. 61); Caw v. Robertson (5 N. Y. 125); Smith v. Rockefeller (3 Hun, 295); Reeves on Real Property (§ 577 et seq). I agree with the learned referee that the gift over to Paul, in event that Thomas should not become entitled to the corpus, was a contingent estate in remainder vesting in Paul at the testator’s death. (Roosa v. Harrington, 171 N. Y. 341.)

I am of opinion that the power of judgment as to the fulfillment of the condition was lodged in Paul Cushman as executor. (Hill on Trustees, [4th Am. ed.] p. *489.) The will and codicil are to be construed as but one instrument. The will named two individuals' as executors, and the codicil substituted two different individuals. But there is nothing to indicate that the testator cast any duty upon the individuals first named other than perforce of their nomination to the executorships, and there is nothing to indicate that he intended to withhold from the second nominees any of the powers conferred upon the first nominees. And I agree with the learned referee that Paul Cushman alone can exercise the power. (Crawford v. Forshaw, L. R. 2 Ch. Div. [1891] 261; Leggett v. Hunter, 191 N. Y. 456.) If the trust is annexed to the office of executor, then the resignation of the latter office carries the relinquishment of the former place. (11 Am. & Eng. Ency. of Law [2d ed.], 827.) The consent of the acting executor was only necessary. (30 Am. & Eng. Ency. of Law [2d ed.], 805. See, too, 1 Williams Exrs. [7th Am. ed.] 335 ; Schouler Ex. [3d*ed.] § 49.)

The judgment is affirmed, with costs.

Hirsohberg, P. J., Woodward, Rich and Miller, JJ., concurred.

Judgment affirmed, with costs.