Opinion
July Term, 1903.
George A. Strong, for the executors and trustees, appellants.
John Notman, for the appellants Jennings Scott McComb and others. Robert L. Harrison, for the plaintiff, respondent.
Edward M. Scudder, guardian ad litem, for the respondent Edward Rayne Herzog.
This is an action for the construction of the last will and testament of James Jennings McComb who died on the 31st day of March, 1901. By the judgment from which the appeal is taken it is adjudged and decreed that the 9th clause or article of the 3d codicil to the will construed in connection with the trust created by the 15th clause or article of the will is illegal, inoperative and void. The correctness of this decision is the question now presented. As appears by the decision this conclusion was reached upon the theory that the provisions of that part of the codicil in question construed in connection with the trust created by the 15th clause or article of the will constitute a trust which suspends the absolute power of alienation of real property and the absolute ownership of personal property for a longer period than during the continuance of two lives in being at the creation of the estate. By the first fourteen clauses or articles of the will the testator made numerous specific legacies and devises of both personalty and real property. Some of the legacies were payable out of the gross income of the residuary estate and were annuities for life, and it was expressly provided in the will that in case the residuary estate should be divided, as directed in the 15th clause or article, before the termination of the annuities, the trustees should set aside and separately invest and hold a fund sufficient to provide an income to pay the same and at the termination of the annuity should distribute everything thus set aside in the manner provided in the will for distributing the residuary estate. Other life annuities were given in the clauses of the codicil preceding the 9th which might continue beyond the period of distribution. He also, in the will as originally executed, gave the use of his homestead at Dobbs Ferry to his wife and children during the life of his wife and thereafter during the life of the one of his children surviving him who should be the youngest at the time of his death, and directed that the trustees should pay the taxes, assessments and insurance thereon from the residuary estate and provided that the remainder should become part of the residuary estate or be disposed of as directed in respect to the residuary estate. He also provided that the executors and trustees should pay to his wife or children who should occupy the homestead, as long as they were given the use thereof, a sum not exceeding $30,000 per annum for their costs and expenses of living therein, and further provided that in the event that the residuary estate should become distributable before the termination of such trust, the executors and trustees should set apart and separately invest a sum sufficient to yield an annual income equal to the annual expenses incurred during the preceding year for such cost and expense of living in said homestead, and at the termination of the trust to distribute the fund as provided for the distribution of his residuary estate. The 15th clause or article of the will, so far as material, is as follows:
"All the rest, residue and remainder of my estate of what kind soever, whether real or personal, and wheresoever situated, I give, devise and bequeath to my executors and trustees and to their successors in trust to hold, invest, maintain and manage during the lives of those two of my children who, surviving me, shall be the youngest of my children at the time of my death, and for such time thereafter if any as may be permissible by and under the laws of the State of New York upon the trusts and for the purposes stated below, to wit:
"1 st. To raise and set aside such sums as may be required and may not otherwise have been provided to secure and meet the payments directed in the preceding clauses of this my will and to make such payments in accordance with the terms of said will.
"2 nd. To set aside and separately invest a sum sufficient to insure an annual income of twelve thousand dollars and to pay such income in monthly, semi-annual or quarterly installments as she may request to my wife Mary Esther McComb during her life, and upon her death to dispose of said sum as is hereinafter directed in respect to the principal of my residuary estate.
"3 rd. From the income of said residuary estate not otherwise disposed of, to pay the sum of six thousand dollars per annum, in semi-annual or quarterly installments, to each one of my four children, to wit, Mary Alice, Fanny Rayne, Lillie and Jennings Scott, and to apply the remainder of said income during the continuance of this trust to the payment and satisfaction of all liens or mortgages upon the aforesaid Central Park Apartment Buildings until all said liens and mortgages shall have been paid off and satisfied and then to divide the said remaining income equally among and pay the same in equal parts to my four children above mentioned, paying to the issue or devisee of any child dying before the termination of said trust, the parent's share and distributing equally among the surviving children the share of any who may have died without issue, and intestate.
"4 th. Upon the termination of said trust, to pay and satisfy any liens or mortgages upon said Central Park Apartment Buildings then remaining unpaid and thereupon to pay, transfer and convey said residuary estate in equal parts, share and share alike, to my said children above named, or to their respective heirs, legatees, devisees, next of kin, executors, administrators or assigns."
This article or clause further provided that should the trusts therein created terminate while any one of his children was less than forty years of age, the executors and trustees should, if the laws of the State permitted them to do so, defer the payment of one-half the principal share of each child under such age until the beneficiary attained the age of forty years. The testator's four children survived him. The 9th clause or article of the 3d codicil to the will was as follows:
"It is my will, and I hereby direct, that in case my daughter Fanny shall marry Mr. Louis Herzog, the provision which she shall enjoy from my estate shall be as follows: An annuity of Fifteen ($15,000) thousand dollars per year shall be paid to her so long as she shall live, free and clear from any enjoyment or interference therewith on the part of her husband. Upon her death the sum of Three hundred ($300,000) thousand dollars shall be divided between her children who may survive her and the issue of any child of hers who may have previously died, such issue to take the parent's share. The principal so to be divided upon her death shall be Three hundred ($300,000) thousand dollars."
The testator's daughter Fanny, who was not one of the two youngest children of the testator, married Louis Herzog, mentioned in this clause of the codicil, on the thirty-first day of December, after the death of the testator, and a son has been born to them, who is still living.
The theory upon which it is contended that this provision of the codicil constitutes an unlawful suspension of the power of alienation and ownership is that in the event that Fanny married Herzog, which has transpired, the trust provided for in the 15th clause was continued until her death, even though that might not occur during the lives of the testator's two youngest children, who survived him. If this were the effect of the codicil, the disposition therein made would undoubtedly be repugnant to the statutes (Laws of 1896, chap. 547, § 32; Laws of 1897, chap. 417, § 2) and void; but we are of opinion that such is not the proper construction of the will and codicil. It was manifestly the intention of the testator to modify the 3d and 4th subdivisions of the 15th clause or article in the event that Fanny should marry Herzog by providing that she should then receive $15,000 per annum as a life annuity, instead of a share in the income of the residuary estate during the continuance of the trust and in the principal thereof at the termination of the trust, and that upon her death her issue should receive $300,000. It is significant that the testator in the 9th clause of the 3d codicil, after expressly providing that upon the death of Fanny $300,000 should be divided between her issue, further expressly states: "The principal so to be divided upon her death shall be Three hundred ($300,000) thousand dollars." This clearly indicates that it was his intention that should there be a distribution of his residuary estate as provided in the 15th clause or article of the will, the principal sum of $300,000 should be held and reserved — as he had provided as has been seen in the case of other annuities continuing beyond the time fixed for distribution of the residuary fund — for Fanny's issue and doubtless to provide her annuity which would be five per cent upon that amount, although her income was payable absolutely and not limited to the income of the residuary estate; and it is undoubtedly the duty of the trustees to reserve from the distribution, should distribution take place before Fanny's death, a sum sufficient to provide for the payment of her annuity and to leave a principal sum of $300,000 for her issue. The ownership of or power of alienation over this principal sum is suspended only during Fanny's life, and it, therefore, became a valid devise to her issue, or the children of her issue. The other provisions of the 15th clause or article of the will with reference to the division of the income and distribution of the residue of the trust estate readily accommodate themselves to this construction. Upon the marriage of Fanny the testator's three other children would each receive from the income of the residuary estate annually, in the first instance, the sum of $6,000 under the 3d subdivision of the 15th clause or article, and they would receive, in equal shares, the surplus of such income which would have been received by the four children, had she not married Herzog. It appears from the 15th clause or article that the testator understood that he could not suspend the absolute power of alienation or ownership of any of his property for a period longer than the duration of two lives in being at the creation of the estate, and this is further shown in substantially the same manner by several other provisions of the will. It is not reasonable, therefore, to infer that by the 9th clause of the 3d codicil he intended to make a disposition of his property which would be in violation of the statutes in that regard. The provisions of the will and codicil are susceptible of the construction which we have indicated and, under the well-known rule which favors a construction that will render the testamentary provisions valid rather than one which will render them invalid, that construction should be given.
We have not overlooked the contention of counsel for the respondents that the substitutionary provision for Fanny in the event of her marrying Herzog is invalid because it leaves undisposed of the fourth of the income and residuary estate originally given to her by the will, but we construe the codicil as a modification of the 15th clause or article of the will and a gift over of this share to the other children, and, therefore, it is unnecessary to consider the doctrine upon which this claim is based.
The judgment should, therefore, be modified by striking out the provision adjudging that the 9th clause of the 3d codicil of the will is invalid and directing the trustees to pay the plaintiff a share of the income of the residuary estate as provided in the 3d subdivision of the 15th clause or article during the continuance of the trust and to her or to her heirs, legatees, devisees, executors, administrators or assigns one equal fourth part of the residuary estate, and by decreeing in place and stead thereof that the said 9th clause or article of the 3d codicil of the will is valid and directing the trustees to pay to the plaintiff the annuity for life therein provided and upon her death to pay, transfer and convey to her issue, or the issue of her children, the principal sum of $300,000, as therein provided, with costs to all parties appearing separately and an allowance to the guardian ad litem payable out of the residuary estate.
VAN BRUNT, P.J., PATTERSON and HATCH, JJ., concurred; INGRAHAM, J., concurred in result.
Judgment modified as directed in opinion, with costs to all parties appearing, and an allowance to the guardian ad litem payable out of the residuary estate.