Opinion
Submitted May 23, 1916
Decided July 11, 1916
Charles Meyers for appellants. Clifford C. Roberts and Frederick N. Gilbert for Ellen Leonard et al., respondents. Albert Ritchie for Thomas J. McCahill, individually and as executor of Thomas J. McCahill, deceased, respondent.
Bryan McCahill died leaving him surviving a widow, no children or descendants of children, and sixteen nephews and nieces. He left a will which in addition to making certain specific bequests contained clauses which are of varying importance in the disposition of the questions presented on this appeal.
One of these provided as follows: " Second. I give and bequeath unto my wife Bridget McCahill the house and lot owned by me known as Number One Hundred and Forty-five East Forty-ninth Street, in the City of New York, together with all the household furniture * * * during the natural life of said Bridget McCahill, and on her decease the proceeds arising on the sale of said house and furniture to be divided equally between my nephews and nieces hereinafter named, the survivor or survivors of them. I also give and bequeath to my wife Bridget McCahill an annuity of one thousand two hundred Dollars per annum to be paid by my executors, quarter-yearly in advance commencing at my decease."
The ninth clause provided: "I give, devise and bequeath to my executors and survivor or survivors of them, the sum of Fifteen hundred dollars per annum during the lifetime of my executors James Brady and Thomas J. McCahill and the survivor of them, in trust nevertheless for them to pay for the education of young men who wish to study for the Catholic Priesthood, such young men to be selected by my executors."
The eleventh clause, most important of all, provided: "Immediately after my decease, I direct that all my real and personal estate be sold at public auction by my executors hereinafter named and after paying the legacies above mentioned, the proceeds thereof be divided equally between my nephews and nieces, etc., Ellen McCahill and Mary McCahill, the children of my brother James, deceased; Mary McMahon, Kate McMahon, Margaret McMahon, Philip McMahon, Jr., Annie McMahon and Ellen McMahon, children of my sister Margaret McMahon; Thomas J. McCahill, Margaret T. Mullane, Bernard F. McCahill, Terrence J. McCahill and Ellen McCahill, children of my brother Terrence, deceased; James Brady and Terrence Brady, children of my sister Rose Brady; James McCahill, son of my brother Patrick, deceased, in equal shares, share and share alike. My nephew Terrence Brady, being now absent and should he remain so absent for the next five years his share is to go to his brother James Brady. The shares, however, of my nieces, Ellen McCahill, now Ellen Leonard; Mary McCahill, now Mary Curtin, Mary McMahon, now Mary Dorian; Kate McMahon, Margaret McMahon, Annie McMahon and Ellen McMahon, I direct my executors to invest in bond and mortgage, and the interest thereon of the several shares to be paid them semi-annually, and in case of any of the above named nieces dying without issue, then her share shall be divided equally among her brothers and sisters, and in case of the death of any of them leaving issue, the interest on her share shall be divided equally between her said children, and upon their attaining the age of twenty-one years the principal shall in the same manner be divided equally between them. Should any of my nieces, however, die without leaving issue or brothers and sisters, then her share is to revert to the general fund of my estate, to be divided equally among my remaining nephews and nieces. I direct, and it is my will, however, that my nephew, Bryan McCahill, shall not receive any share of my estate, real or personal, at my decease, he having already received what I consider his just share of the same."
After the death of the widow one of the seven nieces mentioned in the will, Annie McMahon, died leaving her surviving no issue or brothers or sisters, but leaving her surviving descendants of brothers and sisters who had died after the testator, and certain of the sixteen nephews and nieces mentioned in the testator's will, and also issue of some of said nephews and nieces respectively who had died intermediate the deaths of the testator and of said Annie McMahon. Under these conditions the two questions are presented, first, as to the disposition of the share created for the benefit of said Annie McMahon under the eleventh clause of her uncle's will as an original and open question, and, second, whether such disposition is now controlled either by two decrees in Surrogate's Court or a judgment of the Supreme Court as binding adjudications even though we should disagree with the conclusions embodied in said decrees or judgment.
Taking up these questions in the order stated, the first inquiry is as to the nature of the interest which Annie McMahon took in the share created for her benefit by said clause, it being urged by some of the appellants that she took an absolute and unqualified interest which permitted her to dispose of the same by will, while other parties insist that her only interest was under a trust of the share which directed the interest thereof to be paid to her for life. We do not think that there can be any serious dispute over this question. While the first words of the eleventh clause do by themselves import a division amongst the nephews and nieces including Annie McMahon of shares with absolute ownership, these words are so intimately connected with subsequent ones applicable to the cases of the nieces that all are to be considered as a single provision in determining the interest taken by a niece, and there is no opportunity for the application of the rule which declares that where an absolute estate has been given under one complete provision of a will it will not be regarded as cut down by another and subsequent one unless the intent so to do is very clear. Here there is not one provision giving an absolute estate and another one purporting to cut it down, but various directions embraced in the same clause and all of which are to be construed together as one provision in determining the interest of a niece. Thus construed we have no hesitation in determining that the provision for the various nieces named in this clause did not give them an absolute interest in the shares created for them respectively, but simply created trusts for life with the principal to be disposed of at death as in said clause provided.
It is true that the specific word "trust" is not employed in dealing with these shares, but it has often been said that this is not essential to the creation of a trust and that the question whether a trust has been created by a given provision or not is to be determined by a consideration of the substance of such provision and of the steps and duties which are imposed thereby. When we apply this test to the clause in question it is very evident that the share of Annie McMahon was bequeathed to the persons designated as executors in trust to hold and invest and pay the income to the beneficiary during life.
Adopting this theory, we then come to a more difficult question involving the disposition of said share on the death of said life beneficiary. Both the surrogate and the Appellate Division took the view with which we agree, that the contingent provision in favor of surviving brothers and sisters of a niece leaving no issue did not extend to issue of such a brother and sister who died before her. But, passing to the next contingency, the learned surrogate reached the conclusion that the principal was to be distributed amongst the issue of such of the testator's nephews and nieces named in this clause as died prior to Annie, leaving such issue, as well as amongst surviving nephews and nieces. The Appellate Division, on the other hand, took the view that the principal was to be paid over to such nephews and nieces as survived Annie McMahon and that the issue of one who had predeceased her did not take the share which his parent would have taken if surviving.
We agree with the latter view. The only provision in favor of said nephews and nieces is contained in the clause "Should any of my nieces, however, die without leaving issue or brothers or sisters, then her share is to revert to the general fund of my estate, to be divided equally among my remaining nephews and nieces."
If, as we think to be the case, this entire clause is to be construed as an ordinary provision directing conversion of an estate into money and payment to and distribution thereof among a certain class on the death of the beneficiary for life under a trust estate, it is well settled that no interest vests until the death of the life tenant occurs and that the distribution will be to those of the class then surviving. ( Matter of Crane, 164 N.Y. 71; Salter v. Drowne, 205 N.Y. 204.)
It is argued that within the terms of the entire will are to be found indications of an intent upon the part of the testator which renders the ordinary "pay over" rule, as it is called, inapplicable and that the purpose of the testator was that this principal should be distributed amongst all of his nephews and nieces named in this clause, the share of any one dying before the time arrived for distribution to be paid to such issue. Without discussing these arguments at length it may be said that they do not seem to us to present sufficiently substantial and satisfactory reasons for making this case an exception to the general rule which has been stated. On the other hand, if we follow them we fear we should build up some more artificial and visionary distinctions and add some more perplexities to those which already surround the interpretation of wills. The will before us was unskillfully drawn and in various places it contains words which are not entirely appropriate to any theory which ought to be applied to its interpretation and this condition perhaps gives weak support to some interpretation other than that being adopted by us. But we think that the will as a whole does better sustain the application of the general rule which we have stated than of any recognized exception to that rule, and this being so the general rule should be applied rather than an unnatural exception engrafted upon it.
We now come to the second question whether we are prevented from giving to this will the construction which we think it should receive because certain surrogate's decrees and a judgment of the Supreme Court hereinbefore referred to or either of them are binding adjudications upon the questions now before us and embody different determinations thereof than those just stated.
It does not seem to be very seriously contended by any of the parties that the two decrees made in Surrogate's Court affecting this estate are such adjudications. They were respectively made on accountings by the executors in respect of other interests under the will, and it is conceded by the appellants that such adjudications would not be controlling upon a future accounting for another share. Moreover, the last of these decrees if binding at this time would be in support of the views which we entertain rather than of opposing ones.
In the determination of this question of a prior adjudication we are, therefore, substantially left to a consideration of the judgment of the Supreme Court. An action was brought by the executors of McCahill setting forth the clauses already quoted in favor of his wife, the latter's death, the disposition by them of the house and lot in which she had a life estate, and that there remained in their hands a certain sum of money realized upon such sale and also the principal sum invested to provide for the payment of the annuity created for her under the will, and which moneys on account of her death they were anxious to distribute and also setting forth the eleventh clause of said will hereinbefore considered and various facts arising thereunder in connection therewith and asking instructions of the court as to the distribution of the proceeds of the sale of the house and lot and of the principal created for the purposes of the annuity given to the wife, and whether said latter fund became part of the residuary estate to be paid over to the nephews and nieces under the eleventh clause of the will, and if so, in what manner, and also whether the interest of the nieces in said funds could be paid to them or should be held in trust for life.
The court found various facts covered by the allegations of said complaint, and also that a fund had been created for the purpose of carrying out the provisions of the ninth clause of the will hereinbefore quoted for an annual sum of $1,500 to be expended for the education of young men for the priesthood, and then the conclusions of law were, and the judgment provided, so far as is material here, that the proceeds of the sale of the house and lot and the principal of the annuity created for the benefit of the wife should be distributed amongst nephews and nieces and the respective issue of nephews and nieces, and which nephews and nieces were amongst those named in the eleventh clause, although they were not described as such in the judgment and findings, and no reference in the latter was made to said clause. Of course this action related to and provided for the distribution of different funds than those which are in terms covered by the eleventh clause, which we are now considering. It is possible that in adjudging the distribution of said funds said judgment might have passed at least one of them, the principal for the widow's annuity, into and through the residuary estate created by the eleventh clause, and thus have necessitated an interpretation of that clause. On the other hand, it is conceivable that the trial judge may not have deemed this to be necessary. He may have decided that the principal of the annuity which was created by the same clause as that which gave the use of the house and lot to the wife was to be distributed in the same manner as the proceeds of the house and lot, and which distribution was provided for by the same clause which gave the house and was not at all dependent on the eleventh clause. As a matter of fact it is difficult to determine on what theory the judgment which was rendered could have been reached. It is sufficient to say that it does not appear on the face of the findings or of the judgment that the eleventh clause now before us was construed in reaching the results which were adopted. If we are at all correct in our views of the clause it never could have been adopted as the guide and authority justifying the distribution which was then made. Under these circumstances, we think that the appellants upon whom the burden rested of showing that there was a prior adjudication of the questions now before us have failed in their attempt so to do. As confirming this view it is significant that one of the decrees in Surrogate's Court, made after the judgment in the action, and which unquestionably involved a construction of the eleventh clause adopted a method of distribution radically opposed to that adopted in the action in Supreme Court and it is not to be believed that such a course would have been followed by the surrogate if it had appeared or had been understood that the questions which he was considering had already been passed on and the clause interpreted in such action.
In accordance with these views, we think that the order of the Appellate Division should be affirmed, with costs, and the case remitted to the Surrogate's Court for distribution of the share here involved in accordance with the views expressed.
WILLARD BARTLETT, Ch. J., CHASE, CUDDEBACK, HOGAN, CARDOZO and POUND, JJ., concur.
Order affirmed, etc.