Villard v. Villard

Citation114 N.E. 789,219 N.Y. 482
PartiesVILLARD et al. v. VILLARD et al.
Decision Date28 December 1916
CourtNew York Court of Appeals

OPINION TEXT STARTS HERE

Appeal from Supreme Court, Appellate Division, Second Department.

Action by Fanny Garrison Villard, individually, and others, against Fanny Garrison Villard, as executrix, and others, as executors, etc., of Henry Villard, deceased, and others. From a judgment of the Appellate Division (166 App. Div. 203,151 N. Y. Supp. 1027) affirming a judgment of the Special Term against the Farmers' Loan & Trust Company, as trustee, the trust company as trustee and also in its own right appeals. Affirmed.

The facts, so far as material, are stated in the opinion.

Charles F. Brown, of New York City, for appellant.

James Byrne, of New York City, for respondents executrix and executors.

William M. Wherry, Jr., of New York City, for respondents plaintiffs.

Frederic E. Mygatt, of New York City, for respondents Helen Villard Bell and others.

CHASE, J.

Henry Villard died November 10, 1900, leaving a will which was duly probated December 29, 1900, and his widow, Fanny Garrison Villard, his friend, Horace White, and his late private secretary, Charles A. Spofford, were duly named as executrix and executors and qualified as such. The will, so far as now material, provides as follows:

‘Sixth. I give and bequeath to my daughter Helen, an annuity or yearly sum of six thousand dollars, to be paid to her in equal quarterly installments from the time of my death during her natural life, the first of such installments to be paid to her at the expiration of three months next after my death, and in order to provide for such annuity I direct that the executors of this my will hereinafter named as soon as practicable after my death, set apart a sum of money or securities to an amount or of value in their judgment amply sufficient to provide from the annual income thereof the sum of six thousand dollars in each year over and above all taxes, charges, commissions and expenses lawfully chargeable against or in respect of the said fund or the income thereof, and transfer, deliver and pay over the same to the Farmers' Loan & Trust Company of New York, to which company I give and bequeath the same to be had and holden by the said company and its successors in the trust, as trustee, in trust during the natural life of my said daughter Helen, to invest and keep invested the same, with power to call in and change the investments thereof from time to time and to collect and receive the income thereof, and after paying thereout all lawful expenses and charges, to pay to my said daughter the said sum of six thousand dollars free from all deductions, in each year during her natural life in equal quarterly installments as aforesaid; and until such sum or fund shall be set apart, transferred and delivered to the said the Farmers' Loan and Trust Company of New York as aforesaid I direct that such annuity be paid by the executors of this my will out of the general income of my estate; and I direct that if in any year the net income of the sum or fund set apart to provide such annuity shall be insufficient to pay the amount of such annuity the trustee for the time being of such trust, shall make up and pay the deficiency out of the capital of the said trust fund; and I direct that any and all surplus income of the said fund in any year, after the full payment and satisfaction of the said annuity, shall be paid by the trustee for the time being of the said trust to the persons to whom by the twenty-first article of this my will I have given and bequeathed my residuary estate in the like shares in which I so give and bequeath to them my residuary estate and I give and bequeath such surplus income to them accordingly; and upon the death of my said daughter I direct that the trustee for the time being of the said trust, convey, transfer, deliver and pay over the capital of the said trust estate or fund, with all gains, and increase of capital, if any, of my sons Oswald Villard and Harold Villard as shall survive my said daughter and the issue who shall survive my said daughter of such of them as shall have previously, died in equal shares per stirpes, and not per capita.’

Seventh. (The testator gave and bequeathed to his sister Emma, the wife of Lieutenant General Von Xylander of the city of Munich in Bavaria, an annuity or yearly sum of twenty thousand reichsmark. The gift is made in exactly the same language and upon exactly the same trusts provided in his gift to his daughter Helen, as quoted, except that the final clause directs that after the death of his sister the trustee for the time being of the said trust ‘convey, transfer, deliver and pay over the capital of the said estate or fund with all gains and increase of capital thereof, if any, to the persons to whom, by the twenty-first article of this my will, I give, and bequeath my residuary estate and in the like shares in which I so give and bequeath to them my residuary estate and I give and bequeath the same to them accordingly.’)

‘Twenty-Third. I hereby will and declare that the executors of this my will may in their discretion retain unsold for so long as they shall think fit, any and all stocks and bonds and other securities and other personal property or assets which shall belong to me at the time of my death and not by this will specifically bequeathed, and for any loss resulting from any such retention such executors shall be in no wise liable or responsible.

‘Twenty-Fourth. I hereby will and declare that the trustees or trustee for the time being of any trust by this my will created may in the discretion of such trustees or trustee retain as investments of the trust estate or fund for so long as such trustees or trustee shall think fit any bonds or other securities belonging to me at the time of my death which may be received by such trustees or trustee from the executors of this my will as part of the trust estate or fund although the same may not be of such character as is permitted for investments by trustees by the general rules of law, and I do hereby will and declare that investments and reinvestments of moneys at any time belonging to or forming part of any trust estate or fund by this my will created may be made by the trustees or trustee for the time being of such trust in bonds or stocks of the United States or in bonds of any state or of any city in the United States or in bonds secured by first mortgages on real estate in the United States or in first mortgage bonds of any railroad or railway company, or in productive real estate situated within the United States and for any loss resulting from any investments so made the trustees or trustee making the same shall not be liable or responsible.’

The testator gave one-half of his residuary estate to his wife, and one-fourth each to his two sons. He left a personal estate amounting to about $3,000,000, of which about $530,000 was in cash. A gift by the will to his wife of $250,000 was paid to her in cash, January 10, 1901, and a gift to his son Oswald of $50,000 was paid December 30, 1901, partly in cash and partly in securities. Substantially all of his gifts to institutions and persons other than as provided by said paragraphs 6 and 7 of the will and of the residuary estate were paid by the executors by January 7, 1902.

The deceased's indebtedness other than a claim of one Wetmore aggregated about $34,000. One Wetmore presented a claim against the estate of several hundred thousand dollars. The executors attempted to compromise such claim, but were unable to make a settlement for several years. The claim was finally settled in 1910 for $5,000. In March, 1901, the residuary legatees delivered to the executors a letter, the material part of which is as follows:

We hereby request you to sell as many of the bonds belonging to the estate as can be disposed of to advantage at the present market prices and to invest the proceedsarising therefrom in the following named and such other dividend paying stocks as you deem safe: * * * Baltimore & Ohio, * * * Preferred. * * * Metropolitan Street Railway. * * *’

The executors and executrix in compliance with such request prior to March 3, 1902, sold bonds and stocks belonging to the estate at the market price and purchased other stocks, paying therefor in the aggregate $1,028,528.42. Included in the stocks so purchased was 500 shares of the Metropolitan Street Railway Company, and 1,000 shares of the Baltimore & Ohio Railroad Company preferred stock.

On or prior to January 9, 1902, one of the executors went to the Farmers' Loan & Trust Company, and there talked with its secretary and told him what securities the executors proposed to place in the trusts provided by the sixth and seventh paragraphs of the will, and asked if the securities proposed were satisfactory, and he was told by the secretary that such securities would be satisfactory for said trusts. On the 9th day of January, 1902, the executors delivered to said Farmers' Loan & Trust Company a letter, the material parts of which are as follows:

‘In compliance with the direction contained in article sixth of the last will and testament of Henry Villard, deceased, a copy of which we have furnished you, we herewith deliver to you: Five hundred (500) shares of the preferred capital stock of the Milwaukee Electric Railway & Light Company certificates Nos. A 46, 47, 48, 49, 50, all registered in the name of H. Villard; and five hundred (500) shares of the capital stock of the Metropolitan Street Railway Company certificates Nos. 16336, 17507, 17508, 17509, 17510, all registered in the name of C. A. Spofford-to be held by you as trustee for the purposes of the trust, thus created. We have paid to the beneficiary under this trust, viz. Mrs. Helen V. Bell, Bergstrasse 38, Dresden, Germany, all quarterly installments of the annuity provided for, up to and including November 12, 1901. The next quarterly installment, therefore, will...

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