Dougherty v. . Thompson

60 N.E. 760, 167 N.Y. 472, 5 Bedell 472, 1901 N.Y. LEXIS 1095

• Court: New York Court of Appeals
• Decided: June 11, 1901
• Status: Published

Opinions

Landon, J.

The testator died in the city of Hew York in 1874, without descendants. The controversy in both actions arises because of the death of Stephen Jay Thompson in 1897, of full age, without widow or issue surviving him, leaving a will which has been duly probated, by which he gave all his property to his mother, the Josephine L. Thompson mentioned in the third article of William D. Thompson’s will. Josephine L. Thompson is still living. William D. Thompson, Jr.,' died in 1875, leaving issue of himself and Josephine, his wife, the said Stephen Jay Thompson, and daughters, Hina and Marie, now living, all of whom were living at the testator’s death. Stephen Jay Thompson was one of the unnamed grandnephews of the testator mentioned in the ninth article of the will. It is obvious that if Stephen Jay Thompson took a vested estate under the will in the income which accrued after his death which was not divested by his death in the lifetime of his mother, that estate passed to his mother under his will. The judgment of the Special Term was that it did so pass. But if he took no vested estate under the testator’s will, or if he had a vested estate under it subject to be divested and defeated, if he should die in her lifetime, then it was divested by his death, and no part of it passed under his will to his mother, the plaintiff. And so the Appellate Division held.

The testator by the third article of his will first made a disposition of the income of the corpus of the fund during the lives of William D. and Josephine L. Thompson, and of the survivor of them, giving a part to William D., the whole residue to Josephine, for her use and the support of their children during their minority, and directed that as each child should attain majority, he or she should be entitled to receive one equal share of such surplus, “ the same being divided into as many equal shares as there shall be children,” and one more share for their mother; increasing the shares of Josephine and the children if William D. should die in Josephine’s lifetime. William D. died soon after the testator, and Josephine is still living and has not remarried.

We shall first ascertain whether the share of the income which Stephen J. was to be entitled to after his majority was given to Mm for the full balance of the trust term, so that what has accrued since Ms death, and will accrue during the lifetime of his mother, passed under his will to her, or terminated with Ms death. This depends upon whether the testator so framed his gift or intended to frame it as to continue to the estate of any child the gifts of income to such child after its death during the existence of the trust estate. We think he did not. The children were infants, and living at the testator’s death. The testator gives no part of the income to the children during their minority. After directing Ms trustees “ out of the net income to apply to the use of my nephew William D. Thompson, Jr.,” the annual sum of $700 during his life; “ and the whole residue of such net income to apply to the use of Josephine, the wife of said William D. Thompson, Jr., and their children, by paying the same to her for the support of herself and her children during their minority,” he proceeds, “and as each child attains the age of twenty-one, he or she shall be entitled to receive one equal share of such surplus of income above $700 per annum, the same being divided into as many equal shares as there shall be children of the said William D. Thompson, Jr., and Josephine, his wife, and one more share for the said Josephine, which she shall be entitled to receive for her own use during her own life, after the said children shall have attained the age of twenty-one.” The testator does not name or number the children; he makes no gift of income to them except by saying that as each attains the age of twenty-one he or she shall be entitled to receive one equal share. All the children living at the death of the testator might die before majority, and the afterborn, if any, ultimately take it; the share of each child is to be adjusted as each attains majority, thus requiring successive readjustments to maintain the required equality, and thus implying that the number making the divisor may change by birth or death after one child attains majority and before the other reaches it. If the share of the living child should, after his death, be allotted to his estate, then the share of the child thereafter attaining majority would not be adjusted upon the basis of “ as many equal shares as there shall be children,” when such child attains majority. This was future; income; it was no part of his estate at his death. It might be twenty-one years or more after his death before his trustees would receive it. The intervening trust is a proper and necessary provision to enable the children to receive it in its allotted variable proportions, and, therefore, the trustees held the title, and the children could only enforce the execution of the trust as to the income. The title of the trustees extends beyond the life of .the deceased child, and their duty to pay to the children in “ as many equal shares as there shall be children ” continues. It is true that he made no express gift of this income over to the surviving children in case of the death of any child after attaining majority. But why should he ? He intended that both the parents and their living children should be provided for, not out of his personal estate, but out of its future income, during the lifetime of the longest liver of the parents, and his purpose is manifest that if any should die the share of the living should thereby be increased as it should be diminished if more should be born. True he did provide with respect to the income to be applied under the ninth article to the use of his grandnieces and grandnephews that the issue of any deceased should take their parents’ share. But in that case he gave a life estate first to his nephew John B. Thompson for his life, and upon his death the income for the further life of John C., son of the first taker. The suspension is for the lives of both father and son, that is, for two generations, while under the third article the ultimate estates in the corpus are suspended for the lives of husband and wife, and thus practically for only one generation. Besides, the ultimate legatees under the ninth article embrace the children mentioned in the third article, and others., It was natural that he should think that some of the more numerous and longer delayed class under the ninth article would die during the intermediate life estates, leaving issue to be provided for, while the same condition might seem less likelyto occur under the third article. All the conditions present to his mind, and all which have since occurred under the third article, could be satisfied by terminating the allotment of income to any child upon its death during the existence of the trust. This annual gift of shares of the net income to the children, though not in strictness an annuity, like the $700 per year given to their father, has some resemblance to it, because it is net and not gross income, and, therefore, exempt from deduction for taxes or charges. ( Whitson v. Whitson, 53 N. Y. 479.) . An annuity is a yearly payment of a certain sum of money granted to another in fee for life or years. (Kearney v. Cruikshank, 117 N. Y. 95.) Its duration is dependent upon the construction of the instrument by which it is created, and is for life, unless a different intention is manifest. (Am. & Eng. Ency. Law, title Annuities.) This resemblance is not decisive, but is persuasive of the like construction so far as the reason for it is the same.

The provision for the final disposition of the corpus of the fund confirms the construction already given, for if the gift of the corpus was defeated by Stephen Jay Thompson’s death, the gift of income to him could hardly be presumed to continue after the gift of the corpus had failed, since the first gift of a part of the incident was anticipatory of the final gift of the principal, and if the corpus failed, it is improbable that it was intended that its partial fruits should survive. The provision for final distribution is :

“ Upon the death of the longest liver of them, the said William D. Thompson, Junior, and Josephine, his wife, this trust shall cease, and the trustees shall forthwith transfer and pay over the whole of the trust property and the proceeds and increase thereof to the children of the said William D. Thompson, Junior, and Josephine, his wife, and if any of said children shall have died leaving issue, such issue shall receive their parent’s share.”

There is no other disposition of the corpus except in this direction to “ transfer and pay over ” the same upon the termination of the trust. It is to be paid to the children of Wil liara D. and Josephine, and the issue of any of such children as shall have died leaving issue, and to no others. JSTo representative or legatee of any such deceased child is to take his or her share. It may be conceded that the gift over to the issue of such deceased child as leaves issue is not necessarily the exclusion of such deceased child as leaves no issue, but it will appear, we think, that the scheme and intent of the will exclude a child wrho “ shall have died ” leaving no issue.

The testator intends to provide for the support of William D. Thompson, Jr., his wife and their living children, be the latter “ as many as there shall be,” during the parents’ life, and “ upon the death of the longest liver ” of the parents to transfer and pay over the corpus to such of their children as shall not have died during the existence of the trust estate, and to the issue of such as shall have died leaving issue. This he directs to be transferred and paid over to a class which he can describe, but whose members he cannot name or number, but who can be named and numbered upon the termination of the trust estate, when the transfer and payment over are directed to be made. The phrase “ If any of said children shall have died leaving issue,” standing alone, means a death during the existence of the trust, and thus after the death of the testator, and this meaning is emphasized by the provisions already considered respecting the income.

It is true that the law favors the vesting of legacies as early as possible, but it does so to avoid perpetuities, intestacy, illegal suspension of the power of alienation, and to effect an intent which might otherwise be defeated. But when the intent is clearly otherwise and not violative of any statutory restriction, it must prevail. The intention is the paramount rule of construction. Most of the other rules are aids to the discovery of the testator’s intention, or to the application of it. One of the subordinate rules is that when the only gift is found in the direction to pay or distribute at a future time, the gift is future and not immediate; contingent, but not vested. Its reason is plain ; the direction has no reference to the present, and can be executed only in the future, and if in the meantime the donee indicated shall die, the direction cannot be executed at all. If the testator should ■ say, “ I give to be delivered later,” or use equivalent words, the delivery only is postponed. The gift is complete at the testator’s death, and if the donee shall die before delivery, delivery can be made to his representative or assignee. Of course, if there is in other parts of the will an indication of an intent to make a present gift, the indication which the rule as to a direction for future delivery supposes is weakened, and the rule itself yields to clearer evidence of the contrary intent. In many reported cases the search for clearer evidence has resulted in finding it, sometimes in single expressions and sometimes in the collective phrases of the will. (Goebel v. Wolf, 113 N. Y. 405; Matter of Young, 145 ib. 535; Bowditch v. Ayrault, 138 ib. 222; Matter of Brown, 154 ib. 324 ; Loder v. Hatfield, 71 ib. 92; Bushnell v. Carpenter, 92 ib. 270; Matter of Tienken, 131 ib. 391.) In the case last cited Judge Pinoh said, “ I have obsei-ved in general that where it (the rule) has prevailed, it has been- where no contrary intention was fairly ndicated, and where its own force was somewhat strengthened and its indications corroborated by further facts.” A just remark. If the income intended for Stephen Jay Thompson had been the precise income of the share of the corpus intended for him, that would have been an indication of a vested gift of both. In Warner v. Durant (76 N. Y. 133), out of a fund of $275,000 bequeathed to the executors in trust, they were directed to .pay the interest to Oliver Blush for five years, and then to pay Mm the principal. Blush died during the five years. It was held that the legacy did not lapse because the entire fund of $15,000 was severed from the estate for the benefit of the legatee, and the indication was clear that as no one else had anyT share of it, or of its income, he was given it all at the death of the testator.

It has been often said that it is against public policy to restrain a man in the use or disposition of his property in which no one has an interest but himself. (Gray on Perpetuities, '76.) But in this case Stephen’s share of the income was less than the income of his ultimate share in the corpus. In Smith v. Edwards (88 N. Y. 92) the court explored the will in vain to take legacies given only by a direction for future payment to four children and four grandchildren named in the will out of the operation of the rule. The court sought for words of gift in addition to the direction to pay over, and found none ; it tested the gift by the exception in Warner’s Case (supra), but as the whole income of a share was not given to the donee of the share that exception afforded no help. The will provided that in case any legatee should die before final distribution, his “ share ” or “ portion ” should go to his issue; or in default thereof to the survivors. It was urged that the word “ share ” or “ portion ” indicated a gift already made. The court said, not so, for the testator intended to give it over in such event; besides, the words “ share ” and “ portion ” are eqrdvocal, and may mean immediate gifts, or be merely descriptive of gifts to be made in the future. (See, also, Delaney v. McCormack, 88 N. Y. 174; Vincent v. Newhouse, 83 ib. 505; Teed v. Morton, 60 ib. 506 ; Clark v. Cammann, 160 ib. 315 ; Delafield v. Shipman, 103 ib. 463; Hobson v. Hale, 95 ib. 588.) In Matter of Crane (164 N. Y. 71) the rule controlled the decision. In that case Chief J udge Parker, after stating the rule and the further one, namely, where the gift is of money and the direction to convert the estate is absolute, the legacy given to a class of persons vests in those who answer the description and are capable of taking at the time of the distribution, instanced the exception recognized by the cases, “ If toe postponement of the payment is for the purpose of letting in an intermediate estate, then the interest shall be deemed vested at the death of the testator, and the class of legatees is to be determined as of that date, for futurity is not annexed to the substance of the gift.” The reason for the rule is that where it is plain that the testator intended successive gifts to persons named by him, or ascertainable at the time of his death, the last gift is just as direct as the first. In determining whether the future gift to a class is postponed to let in the intermediate estate, or in order ultimately to bestow the corpus or remainder upon persons who shall then be living to enjoy it, and cannot be ascertained at the testator’s death, the testator’s intention is as decisive as it is in other questions of construction. If the postponement is simply for the benefit or convenience of the estate, that indicates that the gift itself is not intended to be postponed, but that it is not presently payable, and it will be more convenient to pay it after an intermediate or trust estate has expired. (Robert v. Corning, 89 N. Y. 225.) But if it is postponed for the benefit of a legatee as if he is an infant, and payment is to be made to him at his majority, then the gift is future and conditional. (Sweet v. Chase, 2 N. Y. 75.)

It is obvious that when there is a direction to pay to a class of children after their parents shall have completed their enjoyment of it for life, and the children are deprived of their parents’ care, it is a strong indication of an intent to postpone for the benefit of the children, and also in order to ascertain who survive to need it. There is no indication here that the estate was to be benefited by the postponement, or its convenience further promoted by it than to facilitate the intermediate partition and application of the income, and the indications are strong that the postponement was both for the benefit of the children and to find out to whom and to how many, the direction to transfer and pay over could be made on the appointed day. That the testator did not intend that any share should in any event be withheld from the corpus to be finally distributed under the third article seems to be clear.

The appellants invoke the statute which declares that future estates are vested “ when there is a person in being, who would have an immediate right to the possession of the lands, (here personal property) upon the ceasing of the intermediate or precedent estate. They are contingent, whilst the person to whom, or the event upon which they are limited to take effect, remains uncertain.” (1 R. S. 723, sec. 13; Real Property Law, ch. 547, L. 1896.) If we construe the second clause of this statute apart from the first, it is not difficult to show that the gift was contingent, for although when the testator died it was certain that Josephine L. Thompson would die, yet it was uncertain whether Stephen Jay Thompson would survive her, and thus the event was uncertain upon which the corpus was limited to him, and it remained uncertain all of his life, and also during his life the person to whom was given the share he would take if he should survive his mother, remained uncertain, and, therefore, was contingent, (Hennessy v. Patterson, 85 N. Y. 91; McGillis v. McGillis, 154 ib. 532; Purdy v. Hayt, 92 ib. 446.)

But we must also consider the first clause of the statute. It is true that at any time during Stephen J ay’s life he would have had an immediate right to' the possession of a share upon the then ceasing of the precedent estate.

Moore v. Littel (41 N. Y. 66) is a leading authority, although it has been criticised upon common-law lines. It is to the effect that a remainder limited to the heirs of A upon the determination of a life estate in A is vested in his lifetime in his living children, although — and this is the point of the criticism — A’s heirs cannot be ascertained until his death. But the case also holds that the death of any child in his father’s lifetime defeats his interest and divests the remainder, the effect of the statute being; to abolish the common-law condition pi-ecedent to the vesting of the remainder, namely, the child’s survivorship of his father, and to substitute for it a condition subsequent, which may divest and defeat the remainder after it is vested, namely, the child’s death in his father’s lifetime.

It was held in subsequent cases founded upon the same title that the deed of a child who' predeceased his father conveyed no part of the remainder. (Jackson v. Littell, 56 N. Y. 108; House v. McCormick, 57 ib. 310 ; House v. Jackson, 50 ib. 161.) Thus a remainder vests subject to be divested if such is its tenure; and the condition subsequently occurring upon which the divesting depends the remainder is thereby divested. The same rule must be applicable to future limitations of personal property, especially when' the property is held in trust to await the result of conditions subsequent, The result is the same in this ease whether the gift of income and of corpus failed because contingently given to Stephen Jay Thompson, or given upon a tenure subject to be defeated by his death during the existence of the trust. In either event he took nothing which passed under his will.

■What has been said assists in the construction of the ninth article of the will. It presents less difficulty as to the income since there is an expliet direction that the issue of any deceased grandnephew or grandniece shall be admitted to the class among whose members final distribution' is directed to be made. The testator gave by words of present gift the lot No. 139 Broadway in the city of New York to another nephew, John B. Thompson, for life This nephew survived the testator, and died in 1886. ■ The will gave upon his death the same property to his executors upon trust to receive the income during the life of John C. Thompson, son of John B., and apply one-quarter to the use of John C., another quarter to the use of his mother, the wife of John B., unless she should die or remarry during said term (John 0. and his mother are still living), and to apply the other half during John O.’s life to the use of all the other grandnieces and grandnephews of the testator, “the issue of any deceased taking their parents’ share,” and “ upon the death of the said John G. Thompson, to sell and convey the said property in fee, and to distribute the proceeds among all my grandnieces and grandnephews in equal shares, the issue of any deceased grandnephew or grandniece taking their parents’ share.”

Eight grandnephews and nieces, including Stephen Jay Thompson and John 0. Thompson, were living at the testator’s death; two have been born since. Stephen Jay Thompson survived John B. Thompson, the first taker. Ye think the testator intended that the one-half of the entire income accruing after the death of John B. Thompson and until the death of John C. Thompson should be applied during that period to the use of all his living grandnieces and grandnephews, excluding John' 0. Thompson, and substituting in the class in place of the parent the issue of any deceased whenever before the end of the trust term any parent in the class should die leaving issue, whether such decease should occur in the testator’s lifetime or at any time afterwards up to the date of the final distribution of the corpus. He did not intend to substitute the estate of a deceased nephew leaving no issue in the class in the place of such deceased, and he did not intend to permit to be withdrawn from the entire one-half of the income to be-thus applied any part of it for the benefit of such substituted estate. He intended the class to be composed of the living grandnephews and grandnieces, and the issue of any deceased. He would not exclude the issue of those that might die in his lifetime, and thus discriminate against them, nor exclude such grandnephews and grandnieces as might be born after his death before the date o’f final distribution, and thus discriminate against them. He did not intend to give any part of the corpus of the estate to any deceased grandnephew not living to share in the final distribution, but did intend .its distribution among the survivors and the issue of any deceased.

The judgments of the Appellate Division in both actions should be affirmed, with costs to both parties out of the corpus of the estate.