Opinion
No. 158/83.
05-07-1948
HOYT et al. v. ORCUTT et al.
Frank W. Hastings, of Jersey City (Archibald F. Slingerland, of Newark, of counsel), for complainants.Young, Shanley, Foehl & Fisher, of Newark, for defendants Brent Good Orcutt and Ethel Burton Orcutt, his wife.Eugene F. Hoffmann, of Newark, for defendant Anna O. Hoyt.Albert R. Jube, of New York City, pro se, guardian ad litem for infant defendants.
Proceeding by Henry H. Hoyt, Donald R. Baldwin and Curtis Colwell, executors etc., against Brent Good Orcutt and others, for construction of the will of Brent Good, deceased, and for instructions as to the duties of complainants as executors and determination of rights of all parties interested.
Decree in accordance with opinion.
Frank W. Hastings, of Jersey City (Archibald F. Slingerland, of Newark, of counsel), for complainants.
Young, Shanley, Foehl & Fisher, of Newark, for defendants Brent Good Orcutt and Ethel Burton Orcutt, his wife.
Eugene F. Hoffmann, of Newark, for defendant Anna O. Hoyt.
Albert R. Jube, of New York City, pro se, guardian ad litem for infant defendants.
STEIN, Vice-Chancellor.
This bill of complaint is brought by Henry H. Hoyt, Donald R. Baldwin and Curtis Colwell, executors and trustees under the will of Kate Good Orcutt, and by Henry H. Hoyt, individually, to construe the will of Brent Good, deceased, and for construction and instruction as to the duties of said executors and a determination of the rights of all parties interested in the estate of Brent Good. It also prayed determination as to the necessity for the appointment of a substituted trustee under the will of Brent Good and for leave to have settled in this court the account of the testatrix Kate Good Orcutt, as the last surviving trustee under the will of Brent Good, which matters have been disposed of by the appointment of Fidelity Union Trust Company substituted trustee, and by the filing of such account and its approval. Upon the appointment of the Fidelity Union Trust Company as substituted trustee, it was admitted as a party complainant herein.
Brent Good died on November 10, 1915. His will dated July 30, 1913 was probated in the Prerogative Court November 23, 1915. At the time of the execution of his will and for more than two years after his death his family consisted of his second wife, Frances C. Good, his son, Harry H. Good, and his daughter, Kate Good Orcutt, children of his first wife, Anna H. Good, then deceased, and his only grandchildren, Brent Good Orcutt and Anna Clark Orcutt, born October 22, 1901 and January 11, 1903 respectively. Also living at that time was the testators' son-in-law, Charles C. Orcutt, and a daughter-in-law, Mabel Good, the second wife of Harry F. Good, whom he married in 1912. Harry F. Good had no children, but his wife, Mabel, had one child, a daughter by a previous marriage.
When he executed his will the testator was 76 years of age, his wife 50, his son 40, his daughter 34 and the grandchildren, Brent and Anna, 12 and 10 years respectively. He was then living in Long Branch, this State, where he lived from the acquisition of the property in Long Branch in 1904. Until his death his daughter and the two grandchildren, Brent and Anna, lived with him each year during the summer months.
In his will the testator made bequests of personal property to his wife and daughter after which he gave the residue of his estate to his executors and trustees as follows:
‘I give, bequeath and devise unto my Executrices and Executor hereinafter named, and to the survivors and survivor of them, all the rest, residue and remainder of my estate, real, personal or mixed of which I may die seized or possessed, wheresoever situated or being, to have and to hold the same in trust for the uses and purposes following, to wit; from time to time, to sell, convey, lease, exchange or assign any of such real or personal property, whether or not divided into shares or parts as hereinafter directed, in such manner, for such sum or sums of money or its equivalent and upon such terms as they or the survivors or survivor of them may elect, and make, execute and deliver good and sufficient agreements, deeds, bills of sale, assignments or other instruments in writing, or otherwise, for any or all of said purposes, provided however that my homestead property at Long Branch aforesaid shall not be sold during the lifetime of my said wife, excepting by and with the written consent of my said wife, and provided further that if any property belonging or credited to any share or part of my estate, set apart as in this will directed, be sold, then the net proceeds of such sale, or its equivalent, shall be restored, continued and credited as principal, interest or income as the case may be, to the share or part of my estate to which the property disposed of belonged, was or is credited, excepting as hereinafter set forth: to invest or reinvest all principal sums of money belonging to my estate whether or not divided into shares or parts, and not required for claims or charges against my estate, or other purposes of my will, in such securities only as hereinafter set forth.
‘So soon as practicable after the expiration of fifteen months after my decease to divide my entire residuary personal propery into three equal shares or parts, so nearly as may reasonably be done, and from time to time thereafter to add proportionately to each of said shares or parts the net proceeds of the sale of real or personal property or other property suitable for division, the same, as added, to form a part of each share or part of my estate with the same effect as if such respective additions had been included in the original formation of said shares or parts, and also to add proportionately to the income account of each of said shares or parts, all the net rents, issues and income of any unsold real or personal property, not already forming a part of said shares or parts, the same to be applied and paid in the same manner as if such rents, issues and income had been derived from the principal of said shares or parts; to set apart one of said shares or parts of my estate and pay unto my said wife, Frances C. Good, for her own use and benefit, for and during the term of her natural life the sum of ten thousand dollars per annum from the net income derived from said share or part or credited thereto, and pay the balance of the net income derived from or credited to said share or part unto my said daughter, Kate Good Orcutt, for her own use and benefit, till the death of my said wife, but should my said daughter predecease me or my said wife, then, in either event, to the surviving issue of my said daughter, for his, her and their use and benefit. Upon the death of my said wife, or should she predecease me, to assign, convey, transfer, set over and deliver said share or part of my estate, with all accumulaltions thereon, unto my said daughter, Kate Good Orcutt, as and for her absolute property, but should my said daughter predecease me or die before the decease of my said wife, then to assign, convey, transfer, set over and deliver said share or part to the surviving issue of my daughter as and for his, her and their absolute property. To set apart one other of said shares or parts of my estate for the use and benefit of my said daughter, Kate Good Orcutt, and to pay unto her during the term of her natural life the entire net income derived from or credited to said share or part, and upon her death, or should she predecease me, then, in either event, to assign, convey, transfer, set over and deliver, absolutely said share or part to the surviving issue of my said daughter. To set apart the remaining share or part of my said personal estate and pay unto my son, Harry H. Good, from the net income derived therefrom or income credited thereto, the sum of five thousand dollars per annum, for his own use and benefit, and to pay the remainder of the net income derived from or credited to said share or part unto my said daughter, Kate Good Orcutt, during the lifetime of my said son, but should my said daughter predecease my said son, then to the surviving issue of my said daughter, for his, her and their own use and benefit. Upon the death of my said son, Harry H. Good, or should he predecease me, to assign, convey, transfer, set over and deliver said share or part of my estate, with all unpaid accumulations thereon, if any there be, unto my said daughter, Kate Good Orcutt, as and for her absolute property, but should my said daughter depart this life before my decease or before the decease of my said son, then, and, in either event, to assign, convey, transfer, set over and deliver said share or part of my estate unto the surviving issue of my said daughter, as and for his, her and their absolute property.’
Kate Good Orcutt left her surviving as her next of kin and only heirs at law her husband, Charles C. Orcutt, her son, Brent Good Orcutt who is married and whose wife is Ethel Burton Orcutt, and her daughter, Anna Orcutt Hoyt who is the wife of Henry H. Hoyt, one of the complainants herein, and they have three children, namely, Henry H. Hoyt, Jr., Charles O. Hoyt and Suzanne Kate Hoyt, all of them minors represented by Albert R. Jube their guardian ad litem appointed in these proceedings.
Kate Good Orcutt, having survived her brother and mother, became entitled to the corpus of the two shares of the residuary personal property set apart during their lives pursuant to the will whose shares were delivered to her; that the share set apart for her benefit during her lifetime continued to be held by her in trust until her death, and by the terms of the will of Brent Good this share has become distributable to the ‘surviving issue’ of Kate Good Orcutt.
The real estate of which Brent Good died seized has not been sold or set apart to any of the shares of the residuary personal property, but the income therefrom has been accounted for and paid over to the beneficiaries named in the will. The undistributed and undivided remaining portion of his estate consists of both personal and real estate located in the States of New Jersey, New York and Colorado.
Another provision in testator's will reads: ‘In order that there shall be no lapsed legacies or devises, and to prevent failure of disposition of my entire estate in and by this my will, I give, bequeath and devise unto my daughter, Kate Good Orcutt, all real and personal property of which I may die seized or possessed, or which may at any time belong to my estate, not bequeathed or devised in and by this my will, or where the bequest or devise may fail or become ineffective because of the death of the legatee, devisee, or for any other cause whatsoever, to have and to hold the same unto her, her heirs and assigns forever.’
The questions specifically presented by the bill of complaint are:
I. Does the expression ‘surviving issue of my said daughter,’ as used in said will, include every living descendant of Kate Good Orcutt at the time of her death, per capita, namely, Brent Good Orcutt, Anna Orcutt Hoyt, Henry H. Hoyt Jr., Charles O. Hoyt and Suzanne Kate Hoyt, and does each of said persons take an equal one-fifth portion of the remaining residuary personal estate?
II. Did said will fail to beneficially dispose of the real estate not sold and not converted into cash proceeds, and, therefore, vest in Kate Good Orcutt under the later clause designed to prevent failure of disposition of the entire estate?
III. If said real property did not pass to Kate Good Orcutt, subject to disposition under her will, then in whom is the title to said real estate now vested? IV. Do Charles C. Orcutt, surviving husband of Kate Good Orcutt, and Henry H. Hoyt, husband of Anna Orcutt Hoyt, have any curtesy or other interest in such real estate, and does Ethel Burton Orcutt, wife of Brent Good Orcutt, have any dower right or other interest in said real estate?
V. Should these complainants institute proceedings in the States of New York and Colorado to determine the effect of said will upon title to land situated in said States?
VI. Is the power of sale granted under said will extinguished, or does the same still subsist, and is the exercise thereof mandatory, and did the testator intend that his real estate should be converted into personalty before final division and distribution among the persons entitled thereto?
The matters presented by the questions raised will now be treated in the order raised by the bill of complaint.
I. It is the contention of the guardian ad litem for the three infant defendants that by the use of the words ‘the surviving issue of my said daughter’, the testator intended to include every descendant of Kate Good Orcutt living at the time of her death and that each of said descendants take an equal one-fifth portion of the share set aside for the said Kate Good Orcutt including any share of the real estate which had not been disposed of. The remaining defendants join in the prayer of the bill that the Court construe the will and that construction be given as to the rights and interests of the various parties. The main question therefore is as to the distribution to be made of the third share of the estate continued in trust for the benefit of Kate Good Orcutt until her death.
Unless a contrary intention appears from the will under construction it is the well established rule that the word ‘issue’ includes grandchildren as well as children and the distribution is per capita, not per stirpes. Weehawken Ferry Co. v. Sisson, 17 N.J.Eq. 475; Dennis v. Dennis, 86 N.J.Eq. 423, 99 A. 889; In re Fisler, 133 N.J.Eq. 421, 30 A.2d 894; Fidelity Union Trust Co. v. Graves, 139 N.J.Eq. 571, 52 A.2d 750. This general rule is subject to qualification.
Treating with the meaning of the word ‘issue’ and its meaning our courts have adopted two general rules: first, that it means a descendant of every degree, and second, the distribution is per capita rather than per stirpes. Both rules are subject to qualification. A different result may be reached if such was the intention of the testator. Fidelity Union Trust Co. v. Graves, supra (and cited cases). The intention of the testator is to be arrived at from a consideration of the will as a whole. As stated by Mr. Justice Heher in National State Bank of Newark v. Stewart, 135 N.J.Eq. 603, 39 A.2d 435, 436: ‘* * * And blind adherence to precedent as respects the meaning of a particular phrase is fraught with peril to the testamentary design, * * * it rarely happens that the wills are substantially alike.’
When the testator executed his will the natural object of his bounty consisted of his wife, his son, his daughter and his two grandchildren. And so when he in his will directed distribution to ‘the surviving issue of my said daughter’, it seems reasonable to conclude that he was then thinking primarily of his two grandchildren then living with whom he was, according to the evidence in close contact. The will indicates that in determining the needs of the members of his family he considered each of them individually. First he provided security for his wife by specific provisions, such as that she should occupy his residence at Long Branch, the use of its furnishings and an annuity of $10,000 during her life. He made a definite testamentary gift to his son, an annuity of $5,000 of life, after which he gave the balance of his estate to his daughter and her surviving issue. He limited the persons who were to share in his estate after providing for his wife, son and daughter, to ‘the surviving issue of my said daughter’, and in so doing it seems to me that he must have had in mind his daughter's two children who were then the only other members of the family living at the time he made his will. He made no provision for possible issue of his son, Harry H. Good, although the son less than a year before the will was made had married for a second time when he was only 40 years of age.
And the word ‘surviving’ used by the testator is significant. In Pierson v. Jones, 108 N.J.Eq. 453, 155 A. 541, 544, affirmed. 111 N.J.Eq. 357, 162 A. 580, it was held: ‘* * * And the word ‘surviving’ following the word ‘issue’ must be given some significance. It will not be assumed that the testator intended it to have none, and it has none unless it is a word of limitation. If remote descendants are included in the word ‘issue,’ then the word ‘surviving’ must be elided as surplusage.'
The effect to be given words qualifying ‘issue’ is also set forth in Skinner v. Boyd, 98 N.J.Eq. 55, 130 A. 22, 23, affirmed. 100 N.J.Eq. 355, 134 A. 919, where it is said: ‘* * * In the interpretation of wills every word must be given due consideration, and where, as here, in a gift to a class, such as issue or descendants generally, superadded words tending to define or limit the class must be given significance, and when the ordinary meaning of issue clearly appears to have been modified, effect must be given to the modification in the sense in which it carries out the intention of the testator.’ And in Johnson v. Haldane, 95 N.J.Eq. 404, 124 A. 63, 65, Vice Chancellor Backes in a situation not unlike the one presently before the Court said: ‘* * * The prominent thing in the testator's mind, and his predominant intent and purpose as expressed, obviously, was that the children of his grandson Charles H. Johnson (there were none other living at the time of the will) were to share his estate with the children of his son William. The greatgrandchildren then in being were his chief concern. The possibility of the coming of others, of a different branch was not mentally visualized.’
It is concluded that the testator, Brent Good, used the words ‘the surviving issue of my said daughter’, in the sense of the succeeding generation taking by right of representation, so that remote descendants are not entitled to participate in the distribution of the estate while their ancestors are living. The testator had his two living grandchildren in mind, and used ‘issue’ not in its normal technical meaning, but in the restricted sense that such grandchildren should take the income and corpus if both were living at their mother's death and that more remote descendants should not be permitted to share with their living parents.
II, III, IV, V and VI. The testator in his will said ‘I give, bequeath and devise unto my executrices and executors hereinafter named and to the survivors and survivor of them all the rest, residue and remainder of my estate, real, personal or mixed of which I may die seized or possessed * * *.’ He gave them the power ‘from time to time to sell, convey, lease, exchange or assign any of such real or personal property whether or not divided into shares or parts as hereinafter directed’. He also provided in his will as follows: ‘In order that there shall be no lapsed legacies or devises and to prevent failure of disposition of my entire estate * * * I give, bequeath and devise unto my daughter, Kate Good Orcutt, all real and personal property of which I may die seized or possessed or which may at any time belong to my estate not bequeathed or devised in and by this my will, or where the bequest or devise may fail or become ineffective because of the death of the legatee, devisee, or for any other cause whatsoever, to have and to hold the same unto her, her heirs and assigns forever.’
The testator by his will disposed of the real estate, and the title to the real estate unsold did not vest in Kate Good Orcutt. The direction to sell the real estate is mandatory, subject only to the consent of the widow as to the property located in this State at Long Branch while she lived, the time and the terms are left to the discretion of the executors. ‘When land’ said Chancellor Zabriskie in Cook's Executor v. Cook's Administrator, 5 C. E. Green, N.J., 375, 377, ‘is directed to be sold * * * without any time fixed for the sale, it is considered as converted into money from the death of the testator; but for this, the direction must be imperative.’ Dutton v. Pug, 45 N.J.Eq. 426, 428, 18 A. 207. The direction in the will is positive to the executrices and executor to sell from time to time. It is elementary that the intention of the testator to convert his realty into personalty can be shown by either a positive direction to sell, an implied direction or by absolute necessity to sell in order to carry out the provisions of the will. Camden Trust Co. v. Haldeman, 133 N.J.Eq. 427, 33 A.2d 611.
Under the will it was the intention of the testator clearly expressed that the proceeds of real estate when sold were to be added to the shares into which he distributed his estate as if originally included therein. The rule is well settled that if the will requires the real estate to be converted into money notwithstanding the executors may have a discretion as to the time, when the real estate is sold, it must be considered as converted into money from the death of the testator.
Testator at the time of his death owned his home in Long Branch, three business properties in New York City and some undeveloped land in Denver, Colorado. These properties remain unsold to the present and no distribution of any interest therein was made to Kate Good Orcutt upon the death of testator's wife, Frances C. Good, or the death of his son, Harry F. Good. The Long Branch property he provided was to be retained as a home for his wife only during her occupancy and he directed that all taxes and other charges should be paid from all of the shares to which the residuary estate was directed to be divided or from income of the real property.
What disposition is to be made of the New York and Colorado real estate is not for this court to decide, that matter is governed by the law of the States in which the property is situated.
Fidelity Union Trust Company v. Ackerman, 123 N.J.Eq. 556, 199 A. 379. The unsold real property in this State constituting part of the undistributed assets should be distributed in accordance with testator's directions disposing of the three residuary shares of the estate.
Reading the provisions of testator's will as a whole, it is clear that he intended to dispose of his entire estate, directing distribution of income and principal of the three equal shares of his residuary estate so long as there was some one in being to whom he directed distribution to be made. He gave everything to his trustees. Under his plan of disposition he did not leave the ultimate beneficiaries of unsold real property to mere conjecture. If under his will it were to be held that the real property did not pass as part of the three shares, it having remained unsold, the intention must be imputed to testator that the ultimate beneficiaries of that portion of his estate were meant to be dependent upon the exercise or non exercise of the power of sale by the trustees. This was not his intention.
It was the intention of the testator as expressed in his will that the real property should ultimately be sold so that disposition of his entire estate could be made to the beneficiaries he named to receive distribution of each of the three shares, for while he directed his residuary personal property to be divided in to three equal parts for the benefit of his children and his widow and further provided that at the expiration of fifteen months after his death his entire residuary personal property was to be divided in three equal shares or parts and that from time to time thereafter there was to be added proportionately to each said share the net proceeds of the ‘sale’ of real or personal property or other property suitable for division, the same, as added, to form a part of each share or part of ‘my estate with the same effect as if such respective additions had been included in the original formation of said shares or parts, and also to add proportionately to the income account of each of said shares or parts, all the net rents, issues and income of any unsold real or personal property, not already forming a part of said shares or parts * * *.’
Thus it appears that the testator had in mind the sale of his real estate in order to make complete disposition of his entire estate. Under such circumstances, his intention would be carried out even though the power of sale was not mandatory. ‘Where a testator devises real property in trust and directs the trustees to sell the property and hold the proceeds in trust or distribute them, the interest of the beneficiaries is personal property, whether or not the trustee has sold the property.’ Scott, Trusts, Section 131. It follows from the foregoing that an equitable conversion of the real estate not yet sold is effected by the will that the interest of the beneficiaries is to be treated not as real estate but as personal property, in which there are no curtesy or dower rights.
The unsold real property in Long Branch constitutes a part of the undistributed assets of testator's estate and should be distributed in accordance with his will. Kate Good Orcutt was at the time of her death vested with a two-third interest in such property as remainderman of the two shares set apart during the lives of Frances C. Good and Harry F. Good. The remaining one-third interest is now vested one-half in Brent Good Orcutt and one-half in Anna Orcutt Hoyt as beneficiaries surviving their mother, Kate Good Orcutt, whom testator intended to receive the principal of the share set apart for the benefit of Kate Good Orcutt during her life.