Summary
In Matter of Bird (241 N.Y. 184, 187, 188) the court said: "When is a trust created? The answer depends upon the intentions of the testator as expressed in his will — not upon the action or nonaction of executor or trustee — not upon their caprice or diligence. It may be upon the testator's death. It is if there is nothing to indicate a contrary design.
Summary of this case from Matter of BremerOpinion
Submitted October 5, 1925
Decided November 24, 1925
Appeal from the Supreme Court, Appellate Division, First Department.
John J. Robinson for appellant.
George F. Canfield and Frederick C. Bangs for trustee, respondent. Irwin Untermyer for Wallace C. Bird, respondent.
Arthur B. Smith for Ada V. Bird et al., individually and as executors, respondents. J. Daniel Dougherty for Willard Fisher, as executor of Marie L.B. Fisher, respondent.
Andrew S. Hamersley for Florence B. Ford, respondent.
John V. Downey and James J. Walker for Walter G. Bird et al., respondents.
The apportionment of extraordinary dividends as between life tenants and remaindermen is to be made as of the time of the creation of the trust. ( Matter of Osborne, 209 N.Y. 450.) When is a trust created? The answer depends upon the intentions of the testator as expressed in his will — not upon the action or non-action of executor or trustee — not upon their caprice or diligence. It may be upon the testator's death. It is if there is nothing to indicate a contrary design. Where a sum is left in trust with the direction that the income be paid to A, then A is entitled to income from the death of the testator. ( Cooke v. Meeker, 36 N.Y. 15; Matter of Benson, 95 N.Y. 503, 511; Matter of Stanfield, 135 N.Y. 292.) The trust certainly is created from the date when the cestui becomes entitled to its benefits. Being so able to claim the income from the testator's death it is immaterial whether this income earned after that date be large or small; whether the trustee receives it by way of ordinary or extraordinary dividends. Such was the situation in Matter of Osborne ( 209 N.Y. 450); in Matter of Megrue ( 217 N.Y. 623); in Matter of Schley ( 234 N.Y. 616), and in Bourne v. Bourne ( 240 N.Y. 172).
The testator, however, may expressly postpone the creation of a trust to a later date as "when my youngest child becomes twenty-one." Here that date governs, not the date a year or so later when the trust securities are actually segregated. ( Macy v. Ladd, 227 N.Y. 670.)
Again, at times, we may discover an intention not stated in so many words to postpone the creation of the trust as when executors and trustees are directed to do some act upon which the principal of the trust estate depends — such for instance as the selection in their discretion of the securities of which it is to consist. This was the situation in U.S. Trust Company v. Heye ( 224 N.Y. 242). Mr. Heye gave his residuary estate to a trustee who was to divide it into three equal parts, appraising the value of the various items according to its own judgment and selecting the securities to compose each share. Its action was to be conclusive and "each of said shares shall be constituted accordingly." Obviously the creation of the trust was here to be postponed beyond Mr. Heye's death, which occurred on February 8, 1899. But as soon as the securities came into the hands of the trustee on May 10th of the same year it was called upon to act promptly and we fixed upon that day as the date of the creation of the trust. We certainly did not hold or intend to hold that in all cases the date of the creation of the trust was fixed by the time the executors actually delivered the trust funds to the trustee or if executors and trustees were one, the time when they segregated the trust funds or made appropriate entries on their books. ( Matter of Kohler, 231 N.Y. 353, 373.)
Mr. Bird, after various bequests devised and bequeathed the residue of his estate to the United States Trust Company in trust. He directed the disposal of the income by the trustee and at the termination of the trust provided for the distribution of the principal. The executor was told to turn over to the trustee any of the property, securities or investments of which Mr. Bird died seized and possessed, but he was given the power to sell the same. We fail to find in this will any indication such as existed in the Ladd and Heye cases of an intention to postpone the creation of the trust to some future date. On the other hand, the clear intent was that the beneficiaries should receive the income from the testator's death. Therefore, the trust was created as of that time and the apportionment should be made as of the same day.
The order of the Appellate Division in so far as it modifies the decree of the Surrogate's Court should be reversed and the decree of such Surrogate's Court affirmed, with costs in this court and the Appellate Division to the appellants payable out of the estate.
HISCOCK, Ch. J., CARDOZO, POUND, McLAUGHLIN, CRANE and LEHMAN, JJ., concur.
Ordered accordingly.