Plainfield Trust Co. v. Hagedorn

147 A.2d 254, 28 N.J. 483, 1958 N.J. LEXIS 179

• Court: Supreme Court of New Jersey
• Decided: December 22, 1958
• Status: Published

Opinions

The opinion of the court was delivered by

BuelijStg, J.

This is an appeal and cross-appeal from a judgment of the Superior Court, Chancery Division, construing the terms of a will. We certified the cause on our motion while it was pending and yet unheard in the Superior Court, Appellate Division. The parties have agreed on a statement of the facts in lieu of a record. B. B. 1:6—2.

On May 5, 1891 Otto Arens, a resident of Plainfield, New Jersey, executed his last will and testament. The testator’s family at the time he made his will consisted of his wife, Mary Louise Arens, and their two children, Siegfried EL Arens, age 14 years and Edith Mary Arens (now Hagedorn) age 10 years.

The testamentary plan was as follows: After making certain specific bequests, the residue of the estate by Article “Third,” paragraph “1st,” of the will was given in trust to his executors, the income to be paid to his wife for life. In the event of the wife’s remarriage the income from two-thirds of the trust was to be distributed equally among the testator’s children living at the time “and the lawful issue (if any) of any deceased child per stirpes and not per capita, that is to say to pay to such lawful issue only the portion of such income which its parent would if living have taken, and to continue the payment of such portion to the lawful issue of any child who may die during the life of my Wife leaving such issue,” and in default of such issue to distribute the income to any surviving children. In default of all lineal descendants the testator provided that the trustees were to pay the income “to and among my brothers and sisters as well of the half blood as of the whole blood and the lawful issue of any deceased Brother or Sister, excepting the lawful issue of my Widowed Sister Doris per stirpes and not per capita.”

On the death of the wife the testator directed by paragraph “2nd” that the corpus be divided into two equal portions. One-half was to be given to his son Siegfried, if he be living, “and if he be dead, then to his lawful issue, if any,”. In default of such issue Siegfried’s portion was to remain in trust. The remaining portion of the corpus was by Article “Third,” paragraph “3d,” of the will directed to be held in trust for the benefit of testator’s daughter Edith for life and upon her death “then to convey pay over and distribute the whole capital of such remaining part so held in trust with all accumulations, to and among her lawful issue, if any, and in default of such issue, then to convey and pay over' the same to my son Siegfried H. Arens if then living, and if he be dead, then to his lawful issue if any.”

By Article “Fourth” of the will, in the event of a complete failure of issue, then the residuary estate was to be divided into nine equal shares—one share for each of testator’s brothers and sisters “and to the lawful issue of any deceased Brother or Sister excepting to the lawful issue of my Sister Doris the share or part which would have been allotted to its parent if then living, and to convey and pay over to each Brother and Sister and to the lawful issue of any deceased brother and sister excepting to my widowed Sister Doris and her lawful issue the whole capital of the share or part so to be allotted to them.” The share allotted to testator’s sister Doris was to be held in trust, the income to be paid to her for life and upon her death the corpus was to be distributed, “to and among her surviving brothers and Sisters as well as of the half blood as of the whole blood and the lawful issue of any such deceased Brother or Sister per stirpes and not per capita, hereby excepting the children of said Sister Doris or their lawful issue from any part or portion thereof.”

The testator died August 26, 1910 and his will was probated by the Surrogate of Union County. His widow received the income of the trust set up pursuant to Article “Third” of the will, for her life. She died on November 25, 1920. Shortly thereafter one-half of the corpus was distributed to testator’s son Siegfried H. Arens. The remainder was continued in trust for testator’s daughter Edith Arens Hagedorn, who is now 77 years of age and constitutes the estate presently before the court. She is a widow and has no children. Testator’s son Siegfried died November 21, 1954, leaving two children, Otto Siegfried Arens, born March 30, 1911, and John Edward Arens, born May 14, 1912. Otto Siegfried Arens has one child, Mary Arens "Woolley, born July 26, 1936, and she has one child, Cheryl Ann Woolley, born September 1, 1957. Testator’s other grandchild, John Edward Arens, has three children: John Arens, born December 8, 1937; William Arens, born September 7, 1941, and Barbara Arens, born July 27, 1947. The issue of testator’s son Siegfried constitute the class who will in all probability take the remainder in the event of the death of the present life tenant.

The instant action was commenced by the substituted trustee, the Plainfield Trust Company, to have construed the investment powers under Article “Fifth” of the will.

Defendant Mary Louise Arens Woolley, individually and as guardian ad litem of Cheryl Ann Woolley, counterclaimed (1) to compel the trustee to invest in “legal investments”; (2) to diversify the trust portfolio; (3) for a construction of the word “issue” in Article “Third” of the will.

The trial court held that the trustee was not restricted to “legal investments”; that diversification should be decreed, and that the intended meaning of the word “issue” was that distribution of the corpus of the life estate was to be per capita and not per stirpes. John and Otto Arens have appealed from that portion of the determination below relating to the construction of the word “issue,” and Mary Louise Arens Woolley has cross-appealed from that portion of the judgment declaring that the trustee is not restricted to “legal investments.”

The question raised on the appeal of John and Otto Arens is whether the gift over to the “issue” of the testator’s son or daughter, following the termination of the daughter’s beneficial life estate under Article “Third,” paragraph “3d,” of the will, is to be distributed per capita or per stirpes.

Comparatively few doctrines of the common law of this State are as firmly settled as the one which declares that the unqualified word “issue” in a will signifies progeny to the remotest degree and carries with it a rebuttable presumption that the distribution of a testamentary gift shall be per capita. See e. g., In re Wehrhane, 23 N. J. 205 (1957); Stickel v. Douglass, 7 N. J. 274 (1951); Hoyt v. Orcutt, 1 N. J. 454 (1949); Lawrence v. Westfield Trust Company, 1 N. J. Super. 423 (Ch. Div. 1948); Fidelity Union Trust Co. v. Graves, 139 N. J. Eq. 571 (Ch. 1947); In re Fisler, 133 N. J. Eq. 421 (E. & A. 1942); Dennis v. Dennis, 86 N. J. Eq. 423 (E. & A. 1916); Tantum, v. Campbell, 83 N. J. Eq. 361 (Ch. 1914); Security Trust Co. v. Lovett, 78 N. J. Eq. 445 (Ch. 1911); Coyle v. Coyle, 73 N. J. Eq. 528 (Ch. 1907); Inglis v. McCook, 68 N. J. Eq. 27 (Ch. 1904); Weehawken Ferry Co. v. Sisson, 17 N. J. Eq. 475 (E. & A. 1864). Cf. Den ex dem. Rodman’s Heirs v. Smith, 2 N. J. L. 7 [Reprint p. 3] (Sup. Ct. 1806). But cf. N. J. S. 3A :3A-1 and 2 (L. 1952, c. 221, p. 756), which provide that in the will of any person dying after the effective date of the act (May 17, 1952), the word “issue,” in the absence of an expressed contrary intention, shall be construed as requiring a per stirpes distribution.

“Issue” is a technical term in the legal lexicon'—a word of art, and there is therefore a judicial bias that a scrivener employs it in its precise sense. Context or collateral circumstances may belie the fact that the symbol correctly translates the testator’s most probable intention concerning the distribution of his estate. If so, as the above cited cases declare, the contrary intention governs.

But in the instant case we can perceive no legitimate basis for concluding that the word “issue” should not be given its presumptive legal meaning.

An examination of the provisions of the will reveals that it is a tightly drafted legal instrument with virtually all contingencies provided for. The scrivener did not employ language loosely and there is nothing to indicate that when he used the unqualified term “issue” he meant it in other than its primary signification. Quite the contrary, for it is clear that he well understood the legal effect given to the word “issue” when not further explained. In Article “Third,” paragraph “1st,” he twice expressly qualified the word “issue” by adding that the “issue” were to take “per stirpes and not per capita.” And in case that instruction was not sufficiently clear he spelled out what he meant by a stirpital construction, after first using the term “per stirpes,” by adding “that is to say to pay to such lawful issue only the portion of such income which its parent, if living, would have taken.” But in paragraphs “2nd” and “3d” he simply-used the word “issue.” Again in Article “Fourth” however, dealing with the contingency of a complete failure of lineal descendants, he indicated an awareness that “issue” alone signalled a per capita distribution. Thus, in directing a division of the residuary estate among testator’s brothers and sisters or their issue, a stirpital construction was twice spelled out with particularity.

We can find nothing which significantly differentiates this will from that construed in Stickel v. Douglass, supra. There, Mr. Justice Oliphant, speaking for a unanimous court, laid down the following rule of construction:

“Since the testatrix did, in other parts of the will, circumscribe the word ‘issue’ when used there, it seems to us more reasonable that she understood the implication of the word ‘issue’ and therefore if she wished to restrict its meaning in the second paragraph of her will she would have done so. To put it another way the omission of limiting words in one paragraph is significant in light of the fact that where ‘issue’ appeared elsewhere it was qualified so as to restrict its meaning, and therefore we conclude it was the intention of the testatrix that the word ‘issue’ in the second paragraph be interpreted according to its ordinary legal meaning.” (7 N. J. at page 277)

To the same effect, see Inglis v. McCook, supra.

It is urged that the testator, having defined “issue” in a stirpital sense in Article “Third,” paragraph “1st,” meant thereby that the word, when subsequently utilized alone in paragraphs “2nd” and “3d,” was to gain meaning from its initial qualification. This is inconsistent with the fact that in Article “Fourth” the testator twice expressly qualified “issue” by words indicating a stirpital distribution.

The pattern of the language is consistent only with the proposition that when the testator used “issue” alone he intended that it would be afforded its settled meaning and that when he intended otherwise he said so expressly.

A per capita distribution of the corpus of the testator’s daughter’s life estate among the grandchildren, great-grandchildren and great-great-grandchildren was a reasonable and consistent testamentary scheme. There were valid reasons for desiring a stirpital distribution of income where the triggering event is the remarriage of the wife, and at the same time desiring a per capita distribution of corpus where the event triggering the gift over is the death of the testator’s daughter. In the former instance, great-grandchildren, if any, would in all probability be infants during the wife’s lifetime and hence their care and maintenance would be provided for by having the grandchildren take to the exclusion of the great-grandchildren. Rut there is no reason to suppose that when it came to the distribution of corpus, either at the wife’s death or the daughter’s death, the testator intended to prefer grandchildren over more remote lineal descendants as the natural object of his bounty; especially, when it is recalled that at the time the will was drafted the children were aged 10 and 14 years respectively, and that the testator died before the birth of his grandchildren. The only expressed preference was for his children.

The issue raised on the cross-appeal, i. e., whether the corporate trustee is, by the terms of the will, limited to such investments presently' authorized by N. J. S. 3A :15-1 or N. J. S. 3A :15-18 et seq., is without merit. Article “Eifth” of the will specifically empowers the trustees to “put, place, invest and keep invested the principal of my residuary estate in Bonds secured by Mortgages of real estate, the Public Debt of the United States or of any of the States thereof, or in such other dividend or interest paying stocks, Bonds or other securities as to them may seem best and may from time to time change such investments.” The language is crystalline and clearly evinces an intention on the part of the testator that the trustees are to exercise discretion concerning the kind of securities in which investments are to be made and are not limited to “legal investments.” The standard for the measure of the trustee’s duty is that degree of care, prudence, circumspection and foresight that an ordinary prudent person would employ in like matters of his own. Commercial Trust Co. of New Jersey v. Barnard, 27 N. J. 332, 343 (1958). The substituted corporate trustee may exercise the powers given to the original trustees. N. J. S. 3Á :6-51.

The judgment appealed from is affirmed.