Commercial Trust Co. Of N.J. v. Adelung

• Decision Date: 14 December 1944
• Docket Number: 149/636.
• Citation: 40 A.2d 214
• Parties: COMMERCIAL TRUST CO. OF NEW JERSEY v. ADELUNG et al.
• Court: New Jersey Court of Chancery

40 A.2d 214

COMMERCIAL TRUST CO. OF NEW JERSEY

v.ADELUNG et al.

149/636.

Court of Chancery of New Jersey.

Dec. 14, 1944.

Suit by Commercial Trust Company of New Jersey, trustee, etc., against George Adelung and others for instructions as to who is entitled to corpus of trust fund held by plaintiff and as to payment of state and federal inheritance and estate taxes.

Order advised in accordance with opinion.

1. Where the provisions of a trust indenture are not clear, to gather the intention resort should be had to the language used in the light of the surrounding circumstances existing at the time of the creation of the trust.

2. ‘Next of kin’ cannot be determined until the death of the settlor or testator.

3. It is a general rule of construction that when the class of beneficiaries is described as next of kin of the settlor or testator, the class must be determined as of the death of the settlor or testator, unless the indenture or will plainly indicates otherwise.

4. J. N. by an indenture of trust dated October 3, 1924, reserved to himself the income of the trust for the period of his life. On his death the corpus was to be paid to his wife L.; if she predeceased him, then, upon his death, the fund was to be paid to the ‘next of kin of settlor according to the laws of the State of New Jersey in force at this date providing for the distribution of the personal estate of persons dying intestate.’ The settlor's wife L. died before him. There were no children born of the marriage. On December 31, 1940, the settlor adopted G. A., who then was an adult of the age of approximately 30 years. Later he adopted G. A.'s daughter, B., an infant of the age of 4 1/2 years. The settlor died October 7, 1943. G. A. claims an interest in the fund as one of the next of kin. Held: that G. A. is not entitled to share in the fund. The settlor limited his ‘next of kin’ to those who were so regarded under the provisions of the statute of distributions as of October 3, 1924, the date of the indenture. The statute permitting the adoption of adults in New Jersey did not become effective until March 13, 1925, which was subsequent to the date of the trust indenture; therefore G. A. is not a ‘next of kin’ of the settlor as comprehended by the statute of distributions in force as of the date of the indenture. Held, further, G. A.'s daughter B. is the next of kin entitled to the fund.

Anderson, Rugge & Coleman and J. Fisher Anderson, all of Jersey City, for complainant.

Collins & Corbin and Raymond J. Lamb, all of Jersey City, for defendant, George Adelung.

Milton, McNulty & Augelli and John Milton, Jr., all of Jersey City, for Louise Adelung, guardian ad litem of Barbara Louise Adelung.

Edward A. Markley, of Jersey City, as executor of and trustee under will of John F. W. Noe, deceased, solicitor pro se.

John D. Craven, of Jersey City, for Commercial Trust Co. of New Jersey as executor of will of Mary Jenkins, deceased.

Parsons, Labrecque & Borden and Theodore J. Labrecque, all of Red Bank, for John J. Quinn, Theodore D. Parsons and Thomas P. Doremus, formerly partners trading as Quinn, Parsons & Doremus.

Mark A. Sullivan, of Jersey City, for John E. W. Mangels, James Mangels and Gertrude Mangels Johnson.

EGAN, Vice Chancellor.

The complainant seeks instructions as to who is, or are, entitled to a trust fund held by it under an indenture of trust dated October 3, 1924, made by John F. W. Noe, who died on or about October 7, 1943.

Under the indenture, Noe, the settlor, reserved to himself the income of the trust for the period of his life. The pertinent part of the indenture reads as follows: ‘* * * and upon the death of the Settlor, his wife, Lillian L. Noe surviving him, then to pay over, assign and transfer to her the corporate stocks, securities, and other personal property then constituting said trust fund, including any accumulated income then in hand. In case the said Lillian L. Noe does not survive the Settlor, then upon his death to pay over, assign, transfer and set over the money, corporate stock, securities, and other personal property constituting said trust fund, including any accumulated income then in hand, to the next of kin of the Settlor according to the laws of the State of New Jersey in force at this date providing for the distribution of the personal estate of persons dying intestate.’

The settlor's wife, Lillian L. Noe, died before him, on or about December 18, 1940, without having borne any children of their marriage.

Noe was the only child of his parents, who predeceased him. He was survived by two adopted children, namely, George Adelung, adopted as an adult on December 31, 1940, when he was of the age of approximately thirty years, and George's daughter, Barbara Louise Adelung, adopted on February 7, 1942, when she was of the age of four and a half years. George is the son of the settlor's wife, Lillian, by a prior marriage, and Barbara Louise is her granddaughter.

The adopted children claim the corpus of the trust estate as ‘next of kin’; as also does the Commercial Trust Company of New Jersey, executor of the estate of Mary Jenkins, deceased, which alleges its decedent was a sister of settlor's mother and the nearest next of kin living at the time of the creation of the trust. A claim to the fund is made also by John F. W. Mangels, James Mangels and Gertrude Mangels Johnson, the children of Henry L. Mangels, deceased, a brother of settlor's mother.

It is contended by the Jenkins estate and the Mangels that it was the intention of the settlor to vest the corpus of the trust in the nearest next of kin living at the time of the execution of the trust indenture and that they then occupied that status.

The law firm of Quinn, Parsons & Doremus claim to have a $2500 interest in the trust corpus by reason of an alleged assignment from the settlor and his wife dated April 26, 1928.

The complainant trustee alleges that the settlor's language expressed in the indenture is ambiguous and uncertain, and asks the court to clarify the situation and ascertain the settlor's intention.

Where the provisions of a trust indenture are not clear, to gather the intention resort should be had to the language used in the light of the surrounding circumstances existing at the time of the creation of the trust. DeBrabant v. Commercial Trust Co., 113 N.J.Eq. 215, 166 A. 533.

Who did the settlor have in mind when he used the phrase ‘next of kin’? It may be stated at the outset that ‘next of kin’ cannot be determined until the death of the settlor or testator. The law is well defined in this respect. Chancellor Walker so decided in Smith v. Robinson, 83 N.J.Eq. 384, 90 A. 1063, 1065, when he said among other things: ‘Morton P. Robinson, the life tenant, is still living, and it cannot be said who will be his heirs at law or next of kin at the time of his death. He has children who, if they survive him, will be both his heirs at law and next of kin, but he may survive them, and therefore neither his heirs at law nor next of kin can be ascertained until his decease.’ (Italics mine.)

Tiffany's work on real property (Two Vols. in one-1912) Section 120, p. 282, refers to vested contingent remaindermen as follows:

‘Ascertainment of remaindermen.

‘That a remainder cannot be vested unless there be some certain person or persons in being in whom it can be regarded as vested, is a proposition as to which, upon principle, it would seem that there could be little doubt, and that such is the law is recognized by the most authoritative writers, and by numerous decisions. In a few cases, however, in this country, the courts have failed to recognize this certainty of the remainderman as an essential characteristic of a vested remainder, the error arising from oversight, apparently, and not from any purpose of departing from the established line of distinction on the subject.

‘A very common instance of a remainder contingent because of uncertainty in the remaindermen is presented by the limitation of a remainder to the heirs, or to the heirs of the body, of a living person named, in which case the heirs cannot be ascertained till such person's death, on the principle that there can be no heir to a living person, as expressed in the maxim, Nemo est haeres viventis.’

In the instant case the estate in the settlor's ‘next of kin’ during his lifetime was unquestionably contingent for two reasons: (1) the identity of the taker or takers was not established; and (2) the event upon which they were to take, viz., Lillian's predeceasing John, was uncertain. Teets v. Weise, 47 N.J.L. 154; Kahn v. Rockhill, 132 N.J.Eq. 188, 28 A.2d 34, affirmed 133 N.J.Eq. 300, 31 A.2d 819. In Clapp on Wills and Administration in New Jersey, Sec. 179 and Note, appears the following:

‘A gift is contingent as to the person where the taker is not born or not ascertained. Persons are unascertained when no one can point out which among living persons, will be surely the sole taker or takers of the gift.’

Note (4)-‘This may be illuminated by a comparison of a gift to A for life and over to those of his children surviving him; and a gift to A for life and over to his child B if he survives A. In the former case the class of persons who will take cannot be ascertained until A's death, the gift being contingent both as to the persons who take and as to the event of their survivorship; in the latter case the person is definitely ascertained and the gift is contingent solely on an event.’

Noe, the settlor, left no doubt of the sense in which he used the words ‘next of kin’. They are to be determined ‘ according to the laws of the State of New Jersey in force at this date’, (October 3, 1924), ‘ providing for the distribution of the personal estate of persons dying intestate.’ (Italics mine.) See Duffy v. Hargan, 62 N.J.Eq. 588, 50 A. 678, affirmed 63 N.J.Eq. 802, 52 A. 1131; Apgar v. Hoffman, 113 N.J.Eq. 233, 166 A. 159, affirmed 115 N.J.Eq. 171, 1169 A. 690.

In the Apgar v....