Stewart v. Chambers

2 Sand. Ch. 382, 1845 N.Y. LEXIS 496, 1845 N.Y. Misc. LEXIS 30

Opinion

The Assistant Vice-Chancellor.

No one can read this will without being satisfied that the great and principal intent of the testator, was to provide for the support of his wife, and the maintenance and education of bis two infant children. His other children appear to have been adults, and are with one exception, provided with legacies, which have been paid in full.

The gift under which their representatives now claim, is of the surplus interest and income of the estate, after paying the lega~ cies and annuities previously bestowed. Those annuities being for support and maintenance, it would be doing violence to the plain intent of the testator, to declare that there was. a surplus income to be divided, as long as any portion of the annuities remained unpaid. This was my first impression of the case, and subsequent reflection has confirmed it. The argument against making good from the surplus of later years, the arrears of the annuities which accrued in the earlier stage of the administration, rests wholly upon the fact that they were payable out of the interest and income, and were to be paid semi-annually.

In truth, it stands upon the latter provision, because if there were a mere direction to pay out of the income, certain sums, without reference to time ;■ the whole of those sums would ultimately he payable, if the income ever became adequate.

Then as to the effect of the clause that the annuities shall be paid half yearly. It is clearly a direction to the trustees regulating the time of payment, so as to provide for the seasonable support of the wife and infant children. It is not a direction that at the end of every six months, they shall strike a balance, and dispose of the income then received, without reference to the past or the future; if nothing had been collected, then to pay nothing, for the preceding six months annuities, even if in the ensuing six months the income should come in to double their amount. This cannot be a reasonable construction of the will.

Yet it is the construction for which the representatives of the elder children contend. They insist that the trustees were to apply the income, divide it and close it finally and forever, at the end of each six months. • If at that time, there were less than enough to pay the annuities, the wife and young children were to receive what there was, in full for that six months, and lose the residue. And if at the end of any half year, there were a surplus after paying the annuities, that surplus was to be divided at once among the residuary legatees of the same under the will; although the annuitants during the year next previous had not received half of their annuities. •

These inequalities in the half yearly income would necessarily be frequent. If the estate stood in bank or insurance stocks, some casuality in business might prevent a dividend for a year. If invested on mortgage, the death of the mortgagor, his bankruptcy, or some other event, might delay the payment of interest for a considerable period.

So in converting into money and investing an estate consisting of bills receivable or other debts due, there would inevitably be great and unequal delays in realizing the same and putting them out upon securities producing a stated income.

The construction claimed, would throw the burthen of all these contingencies upon the widow and infant children, inflicting upon them a heavy loss and a straitened maintenance; and the legatees of the surplus would ultimately become the gainers to the amount of the loss thus sustained by the annuitants.

The will does not give the annuities out of each year's specific income, as was urged by the counsel claiming the surplus. They are given out of the whole interest and income of the estate; and the residuary legatees are to have nothing until after the payment of all the annuities.

There would be no surplus income to divide, according to the terms of the will, until all the annuities were paid; and payment of all, is only accomplished by full payment.

This obviates the objection raised, that under the construction claimed by the two infants, the legatees of the surplus would be liable to refund what they had received in a productive half year, to make up the deficiency of some less fortunate term of six months.

The trustees could not divide any surplus on this construction, until all the annuities were paid in full. When they were thus paid the will became imperative that the trustees should divide the surplus, and whatever the legatees received on such a distribution, would be their own, rightfully paid, and not revocable. If in the ensuing six months, there should be a deficiency, the annuitants would necessarily wait until it could be made up from the future income.

The established principles of construction, it appears to me, sustain the view which I have taken upon the intent of the testator. A residuary legatee cannot call upon a general legatee to abate. (2 Will, on Exec. 837: 1 Roper on Leg. 355.),

And annuities, given for the maintenance of a wife and children who are otherwise unprovided, which is precisely this case, are held not to abate in proportion with the general legacies. (Lewin v. Lewin, 2 Ves. sen. 415;) a decision which goes far beyond what is requisite to restore the arrears to these two children.

In Beeston v. Booth, (4 Madd. 161, 170,) the Vice-Chancellor speaking of legacies similar to those of the residue here, says, “ they are expressly given out of such uncertain residue or surplus as shall remain after providing for the two first sets of legacies, and the intention of the testator that' they are to be payable only in case there be a surplus, is too plain to admit of question.”

And in Farmer v. Mills, (4 Russell, 86,) the Master of the Rolls gave his opinion, that where there was a direction to pay-annuities out of investments, and residuary bequests were then given, and the estate fell short; the arrears of annuities were to be made up on some of the annuitants dying, before the residuary legatees would be entitled.

Both of these cases, together with Page v. Leapingwell, (18 Ves. 463,) were cited by the legatees of the surplus, but I do not think the cases sustain their position.

The decision of Vice-Chancellor Shadwell in Boyd v. Buckle, (10 Simons, 595,) is a strong authority for the payment of these arrears. In that case, the testator by his will, after reciting that he had settled on his wife for her life at their marriage, the yearly rent of a leasehold estate and the dividends of £4000 of stock ; that the leasehold estate on her- surviving him would form a material part of her income; and that the lease under which he held the same might expire in her lifetime; directed his trustees in that event, out of and from the dividends and interest arising from a sufficient part of his personal estate, at their discretion, to pay to his wife, so much per annum as would be equivalent to the rent so lost by such lease having expired. He also gave to her an immediate legacy of £500; and gave to his trustees certain stocks, of which the interest was to be paid to her. After givkfg some pecuniary legacies to others, he bequeathed to the trustees all his remaining personal estate, to be invested, and to accumulate the income until the lease expired; and then upon the lease expiring, during the residue of his wife’s life, to pay to her the annual income of the-investments and of the accumulations ; and after her death the residuary fund and accumulations, if any, were to go the testator’s grandchildren who were living at his decease, equally. The lease expired in the lifetime of the widow, about three years after the testator’s death; and the annual income of the residuary fund including therein the accumulation, was not sufficient to make good to her the loss of income occasioned by the termination of the lease. It was held that she was entitled to have the deficiency of her income made-good out of the capital of the residuary fund.

The case of Dyose v. Dyose, (1 P. Will. 305,) .decided by, Lord Cowper, and cited by the legatees of the surplus, was disapproved by Lord Thurlow in Fonnereau v. Poynts, (1 Bro. C. C. 478,) and by Sir William Grant, in Page v. Leapingwell, (18 Ves. 466.)

The legatees relied much upon Scott v. Salmond, 1 M. & Keen, 363, decided by Sir John Leach, and affirmed by Lord Brougham. But it will be seen that the judgment of the latter, was placed upon the ground that the testator set out with a knowledge that there was to be a deficiency in the rents of the ¡real estate paying the two annuities charged on those rents, and then gave over the surplus of the rents that there would be whenever the one annuitant died, “ after payment of the annuities for the time being in existence payable out of the rents,” to a third person. And by the will he called in aid his personal estate, which he erroneously supposed was ample, to make good both of the specific annuities. In that case the rents had never proved inadequate to pay all that the testator intended that they should pay.

My conclusion is that the trustees must make good from the surplus which has accrued since the death of Mrs. Chambers, the whole amount of the unpaid annuities to Isabella and Grace Chambers.

A distinction was drawn between these arrears, and the unpaid annuity of Mrs. Chambers, on the ground that the testator never intended to give her any interest in any income which should accrue after her decease.

This is probably true, as to any actual intention present in his mind, because he evidently supposed his estate was much larger than it proved to be. At the same time, I am persuade4 from the language of the will, that if he had anticipated the existing state of things, he would have imperatively enjoined such payment.

What does the will declare when applied to that state of things ?

The testator’s primary and great intent was a suitable provision for his wife and two children, as I have already stated. To that end, he gave these annuities payable half-yearly. He intended to make a very ample provision for their payment, because he charged them upon the whole income of all his residu ary estate. The clause for the payment of $8000 out of the one-half of this residue on the death of either of these two children without issue, shows that the testator supposed the whole residue would produce an income considerably exceeding the aggregate annuities.

He did not direct a sum or sums sufficient to produce these precise incomes, to be invested, and then give such incomes to the wife and children ; thereby limiting them to the income of such sums, whether they continued to produce the same revenue or not.

But the testator intended to secure to each of them, a fixed yearly sum; absolutely, and without reference to any contingency, or any particular investment or fund which was to produce it.

It is the bequest of an annuity, and as such, vested in Mrs. Chambers a right to receive it every six months, and at the end of each six months the amount then payable became a debt due to her, to be liquidated out of the future income, if it should ever prove adequate for that purpose.

The cases of Davies v. Wattier, 1 Sim. & St. 463; May v. Bennett, 1 Russ. 370; and Arundell v. Arundell, 1 Mylne & Keen, 316, illustrated the extent to which equity will go to main-' tain in their integrity, provisions of this description.

I think I shall best effectuate the whole intention of the testator as it is derived from this will, by declaring that the entire annuity to his widow, as well as those to his two infant children, shall be paid in full, without abatement, before any surplus income can be distributed among the residuary legatees of such surplus.

Footnotes

•

(a)

Isabella H. Chambers claims that her annuity of £50 is to be paid to her until her marriage, or until her sister Grace becomes of full age. The legatees of the surplus income insist that this annuity ceased on the death of Mrs. Chambers.

The bequest is singularly expressed. Isabella was about ten years old at the death of her father. The will first gives her an annuity of £40 until she shall arrive at the age of fifteen, and from that time until the death or marriage of her mother, it gives to her £50 a year unless she shall sooner marry.

Thus on this clause alone, it is apparent that if the mother had married or died before Isabella became fifteen, the annuity of £50 would never have come into existence, and she would have been left utterly destitute at that tender age. The will gave her no part of the capital until her marriage; and unless she married, it gave, to her no part of the capital absolutely, so that she could sell or dispose of it in anticipation of the time of its distribution. She might never have a proposal of marriage. So upon the construction claimed against her, we have the extraordinary spectacle of a father, able and apparently anxious, to make a comfortable provision for his young daughter first by a suitable income from time to time, and finally by giving to her half of his estate, in case she survived till the time fixed for its division ; yet making a will which, on two contingencies that were both in his mind, and were both likely to occur, would leave that daughter at the age of fifteen without a shilling for her support, and deprived of all benefit from her father’s estate for the ensuing fifteen years, unless she could obtain a husband in the mean time and thereby entitle herself to the £1000 provided to be paid to her on her marriage.

' It is impossible to believe that this was the actual intention of the testator. Still if the language of the will, when construed upon all its parts, expresses that intention, it must needs be so .declared and enforced.

There is another singularity upon this construction, which is that the testator should have placed the cessation of his daughter’s annuity upon two such events, as the marriage and death of’ his widow. He seems to have thought that his wife might marry again, and he cut off her annuity upon her so doing. He could scarcely have failed to perceive that such second marriage, while it deprived her of the means, would also diminish her disposition, to aid in the support of her children. And her death would necessarily cut off all aid to her children, if her annuity should, continue till that time.

We are led to expect in his will some guide to his intention, farther than that contained in the bequest upon which I have commented.

In the general scope of the will, there is no indication of any design on the part of the testator to do less for Isabella, than he does for his youngest daughter Grace. Their annuities are the same during the corresponding periods of their youth; the marriage gift is the same to each; and they are to share equally in the ultimate distribution of the estate. Every clause in the will indicates pure and entire equality between them, unless it be disturbed by the construction asked by the surplus legatees.

Now the provisions as to Grace are these. She is to have £20 annually till she is ten years old, £40 from thence till she becomes fifteen, and £50 from thence till she"becomes twenty-one, and until the death or marriage of the widow, unless Grace should sooner marry.

Thus a sure income was provided for her till her marriage, or till the time of distribution. Following this in the will, is the provision for the marriage of Isabella; which is, that in case she marries previous to the time of the final distribution, the executors are to advance to her out of the capital £1000 on the day of her marriage, or as soon thereafter as she shall arrive at the age of twenty-one years, when her said annuity shall cease. This clause shows that there was no intention to have the annuity cease upon any contingency connected merely with the death or marriage of Mrs. Chambers.

The provision for the marriage of Grace, succeeds that for Isabella, and is in the same words.

The codicil furnishes further and conclusive evidence that the testator-had no thought of cutting off Isabella’s income at fifteen, in case his wife died or married before she, attained that age. It declares that'for the purpose of having his two daughters, Isabella and Grace better educated, he wills and bequeaths to each- £20, payable semi-annually, in addition to the aforesaid annuities, until each of them arrives at the age of twenty years.

The codicil declares an intention that the annuity of £50 before given to Isabella, should not be determinate on the death or marriage of the wife of the testator. The only other events with which it was connected in the will, were the payment of her marriage portion and the division of the estate.

I think the true construction of the will is this:

Isabella, exclusive of the £20 in the codicil, was to have £40 annually till she became fifteen ; and £50 annually from thence until the division of the estate. But if she married before that time, then upon her marriage if she were of full age, or on her becoming twenty-one yeafs of age if she married while a minor, she should receive £1000 from the executors, and thereupon her annuity should cease.

The testator as a British subject, directing his annuities to be paid in London, doubtless had in view the English rate of interest ; and the interest at five per cent, on £1000, would continue Isabella’s income after her marriage, without alteration, until the time of the final division.

Probably there was an accidental omission of the words “until my youngest daughter Grace shall arrive at the age of twenty-one years and,” before the words “until the death or marriage of my said wife,” in the paragraph of the will which grants the annuity to Isabella. These words would make it precisely like the subsequent gift of the like annuity to Grace. The intention is sufficiently apparent from the residue of the will, to enable the court to uphold the legacy and carry out the design of the testator.

I refer to Sherratt v. Bentley, (2 M. & Keen, 149,) for an apt instance of the rejection of words used in a will, which were incompatible with the general intention collected from the whole will.

In my judgment, Isabella Chambers is entitled to receive her annuity until her marriage, or until the final division of the estate, if she shall remain unmarried till that time.

The annuities are to be paid in London in British sterling money. Payment here for legatees there, in the currency of the United States, will not be a compliance with the testator’s direction. It is not like the case of a creditor suing in our courts for the recovery of a debt. In those cases the money recovered becomes payable here. Here the trustees are asking the direction of the court in the discharge of their trust; and they can discharge this part of it, only by paying the sums directed, and in the manner directed, by the will. In order to make such payment, they must apply so much of the fund as is requisite to purchase exchange on London for the amount there payable. If payment is to be made to parties here, it must be in the pound sterling at par.

Decree accordingly, with costs to the respective parties out of the fund.

In Foster v. Smith, 2 You. & C. New Cases, 193, where trustees were directed to pay out of the rents and profits of freehold and leasehold estates, an annuity of £200 to the widow during her life, in equal quarterly payments; the income being insufficient for the payment of the annuity. Sir Knight Bruce, V. C., held that the arrears due at the widow’s death were chargeable on the corpus of the estates. See also Cassamajor v. Pearson, 8 Cl. & Fin. 69, where on a different state of facts from those in the text, it was held that the arrears in any given year, were not to be made up out of the surplus of any succeeding years.