In re the Estate of Edwards

274 A.D. 244, 80 N.Y.S.2d 801, 1948 N.Y. App. Div. LEXIS 3050
CourtAppellate Division of the Supreme Court of the State of New York
DecidedJuly 8, 1948
StatusPublished
Cited by14 cases

This text of 274 A.D. 244 (In re the Estate of Edwards) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re the Estate of Edwards, 274 A.D. 244, 80 N.Y.S.2d 801, 1948 N.Y. App. Div. LEXIS 3050 (N.Y. Ct. App. 1948).

Opinion

Larkin, J.

Petitioners appeal from an order of the Surrogate of Onondaga County dismissing the entire so-called first cause of action and certain allegations of the so-called third and fourth causes of action, which alleged therein, by reference, allegations of the first, all contained in a petition seeking the removal of respondent as one of the four trustees of a testamentary trust created by the will of Daniel M. Edwards.

The will was executed June 19,1928. Testator died a resident of Onondaga County, May 29,1929. Outside of a small bequest of furniture, automobiles, and jewelry, decedent gave by his will, all of his estate to four executors and trustees named therein to hold the same in trust for the members of his family, paying the income for life to his widow and children as directed by the will, with the next of kin of his children as the ultimate remaindermen. At his death, testator left his widow and four children surviving. Three of the four children are now living, [246]*246and this proceeding was begun by two of them, Dorothy E. Slocum, and Mary E. Rodormer, and their children, thus representing two thirds of the beneficial interest in the entire trust estate.

The principal assets of the estate consist of shares of stock in two corporations. The testator, through ownership of all, or substantially all, of the stock of the E. W. Edwards & Son Corporation and the Murray Realty Corporation, operated three large department stores, one in each of the cities, Syracuse, Buffalo and Rochester. The Murray Realty Company owned the greater part of the real estate which the Edwards Corporation used in the transaction of its entire merchandising business. As authorized by the will the trustees have retained his stock and now control the directorate of the two corporations by virtue of it. Therefore, the trustees now control the policy of each corporation by their power to elect directors competent to formulate the policy or to carry out the policy formulated by the trustees.

At the time the will was drawn the respondent was the husband of the petitioner Dorothy E. Slocum, daughter of the testator. He was a director of the Edwards Corporation, and associated with the Rochester store, living in Pittsford, close to Rochester, with his wife and children. In paragraph “ Eleventh ” of his will, which named the trustees, testator designated “ my son-in-law James A. Slocum ” as a trustee. Following the death of testator, respondent was made manager of the Rochester store and a vice-president of the corporation.

Apparently the matrimonial life of the Slocums was harmonious for a number of years, but domestic difficulties caused them to separate on or about January 1, 1944. Mrs. Slocum continued to live with her children in Pittsford, but respondent took up residence at a hotel in Rochester.

On February 7,1944, Slocum, by action of the board of directors of the Edwards Corporation, ceased to be manager of the Rochester store. On the same day he ceased to be a director and vice-president of the corporation. Caroline W. Edwards, widow of the testator, was then one of the trustees of the Daniel Edwards estate. She died in 1945.

In substance, the allegations of the first so-called cause of action are: On December 18, 1944, Mrs. Slocum obtained in Nevada a decree of divorce from respondent, who in April, 1946, remarried and now resides in the State of California where he is engaged in business. Respondent, after the divorce and before his remarriage, made oral and written representations to [247]*247his former wife, expressing regret and repentance for his conduct which had resulted in the separation and divorce. He assured his wife that his misconduct had ended. She believed him and convinced the other members of her family of his sincerity. As a result, her attitude and that of the others of her family, changed from one of resentment to one of friendliness. Petitioner, his former wife, believed respondent, when he told her that, he was, again, wholly devoted to her interests and those of his children. She persuaded the other members of her family that respondent’s protestations were sincere. However, when the respondent married in April, 1946, the petitioners then knew for the first time that respondent had been insincere and deceitful with the result that ill-feeling again developed, aggravated by the deception. This ill-feeling has reached such a point that the relations between the petitioners and respondent are so strained that it is no longer possible for them to work in harmony with him as trustee because they have lost all confidence in his integrity and are hostile to him, and he in turn, is hostile to his former wife. Such a condition is detrimental to the proper execution of the trust by Slocum as one of the trustees.

Some of the allegations of the first are incorporated by reference into the third and fourth so-called causes of action.

It is unnecessary to go into detail as to the allegations of the so-called second, third and fourth causes of action. Again, stating generally, the second contains allegations that, by reason of respondent’s residence and business activities in California, far removed from the area in which the essential part of the activities of the trust are conducted in the State of New York, he is no longer a suitable person to act as trustee, because he does not, and cannot, give proper attention to the administration of the trust, and is not available for consultation in reference to it, if the beneficiaries or the other trustees were.minded to consult with him, except at added expense to the trust estate. The third pleads that respondent has personally filed and sought to collect unfounded claims from the trust estate. The fourth alleges that the relations between respondent and the other trustees are not harmonious, with the result that such lack of harmony interferes with the proper administration of said estate.

It is true that, normally, mere friction between a trustee and a beneficiary is not sufficient ground for removing a trustee, unless that friction interferes with the proper administration [248]*248of. the trust. (1 Restatement of Trusts, § 107, comment C; 1 Scott on Trusts, § 107, p. 559.) Although there is no specific allegation in this so-called first cause of action of any harmful result to the trust from the existence of this hostility, still, there is a general allegation that the ill will is of such a nature that it is detrimental to the execution of the trust. Professor Scott in section 107 (Vol. 1, p. 559) recognizes that where the hostility between cestui and trustee seriously impedes the performance of the trust, especially if the trustee is at fault, the trustee may be .removed. We are not called upon at this time to determine what would constitute an impairment of the execution of the trust.

These trustees holding the stock of the two corporations and directing their business policies are in a situation not ordinarily found in a trust estate. Practically the only income which will be distributed to the beneficiaries is that received from these two corporations, the directorate of which may be said to be under the absolute control of the trustee's. These trustees are four in number. The ordinary rule is that trustees act collectively unless authorized by the instrument creating the trust to act otherwise. That would seem to.be true as to these trustees except in the selection of a successor trustee when the remaining trustees elect by majority vote.

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Bluebook (online)
274 A.D. 244, 80 N.Y.S.2d 801, 1948 N.Y. App. Div. LEXIS 3050, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-the-estate-of-edwards-nyappdiv-1948.