Cott v. Prentice

• Decision Date: 18 January 1887
• Citation: 10 N.E. 257,104 N.Y. 45
• Parties: VAN COTT v. PRENTICE and others.
• Court: New York Court of Appeals Court of Appeals

104 N.Y. 45

10 N.E. 257

VAN COTT

v.PRENTICE and others.¹

Court of Appeals of New York.

January 18, 1887.

Appeal from general term, suprme court.

The suit was brought against John Prentice, Theron G. Strong, William S. P. Prentice, Henry D. Brookman, as executors of the last will and testament of John H. Prentice, deceased, to enforce an alleged voluntary settlement by John H. Prentice of personal securities to the amount of about $50,000. The plaintiff in his complaint claimed that, as trustee of an express trust, he owned the several chattels and securities, and the interest thereon, described in the complaint, and was entitled to the possession thereof for the purposes of the trust, and that the defendants had possession thereof, and wrongfully withheld them; that the trust was created by two instruments in writing under seal executed by John H. Prentice, defendants' testator, March 4, 1871, as follows:

‘This indenture, made this fourth day of March, 1871, between John H. Prentice, of the city of Brooklyn, of the first part, and Joshua M. Van Cott, of the same place, of the second part, witnesseth:

‘For good and sufficient consideration the said Prentice hereby grants and assigns to the said Joshua M. Van Cott the securities enumerated in Schedule A hereto subjoined, upon the trusts hereinafter more fully set forth, to-wit:

‘ First. To collect and receive the sums due, and to become due thereon, for principal and interest, and to discharge the same, respectively, as paid.

‘ Second. From time to time to invest and reinvest the sums received thereon for principal in good bonds and mortgages, or in public securities, subject to my direction or approval.

‘ Third. To pay over the interest from time to time received on such securities or investments and reinvestments to Clarence King, of New Haven, in the state of Connecticut, or to such other person or persons as I shall from time to time direct,-the said King having no title to or beneficial interest in said payments; and the said King shall pay over said interest, as received, to the person and for the uses speeified in confidential written instructions, bearing even date herewith, signed in duplicate, and to be delivered to the said Van Cott and the said King; and it is hereby declared and made a condition of these trusts that the beneficiaries thereof have no legal or equitable right to the principal or income of said securities or investments, but receive the same only as herein provided, as proceeding solely from the bounty of said Prentice, and subject to his power to revoke the trusts hereby created.’

‘ Fifth. The said Joshua M. Van Cott shall hold the principal sums represented by the said securities and investments and reinvestments subject to the directions of the said Prentice contained in a private and confidential paper bearing even date herewith, delivered to him in a sealed envelope, to be opened by him at my death if he shall survive me, subject in the mean while to my direction and pleasure, and to be returned to me in the event of my surviving him, and absolutely subject to my direction and control until the event of my death.

‘ Sixth. In the event that the said Clarence King, or that the said beneficiaries, or that any person or persons whatever, shall, by any suit or proceeding at law or in equity, interfere with the execution of the trusts herein declared, clared, or make any claim against the said Prentice or the said Van Cott to the said securities or investments or reinvestments, or the income thereof, contrary to the provisions or conditions of the said trusts, then and thenceforth the said trusts shall cease, determine, and become wholly void, and the said securities, investments, and reinvestments, with all the interest, income, and increase thereof, shall thenceforth belong wholly to me discharged of the said trusts.

‘In witness whereof I have hereunto set my hand and seal the day and year first above written.

JOHN H. PRENTICE.' [L. S.]

‘Private and confidential declaration of the circumstances under which a deed of trust, of even date herewith, is executed by me to Joshua M. Van Cott, and directions to him as to the disposition to be made by him of the capital or principal sum in such trust, in the event of his surviving me, without my making any express testamentary or other disposition thereof in accordance with the condition of said trust.

‘The late George S. Howland was provisionally interested with me in a real-estate speculation in the city of Brooklyn. He failed to make the payments stipulated on his part, and thereby was disentitled to share in the nominal profits eventually made. By reason of his failure to pay as stipulated, I collaterally and incidentally lost and was damaged beyond his nominal share of such profits if he had legally been entitled to them. Mr. Howland's affairs became involved, and he died apparently insolvent, leaving a widow and three children surviving him. Neither they nor the creditors of Mr. Howland's estate have any legal claim upon me. But I am moved by my sympathy for Mrs. Howland and those three children, for whom Mr. Howland left no provision, to set apart the securities mentioned in said deed of trust, and devote the income thereof for their benefit, according to the terms of the said trust. And I now direct that, unless I shall otherwise provide in my life-time or by testamentary disposition, the said trustee shall, after my death, devote any further income from the said securities, or the reinvestments thereof, to the use of the said Mr. Howland and three children,-one-third to her, and the residue equally to the said children, or the survivors or survivor of them; and the principal of said securities, or the reinvestments thereof, shall be delivered to the said persons, or survivor or survivors, in the same proportion, when the youngest of said surviving children shall come of legal age, unless, in the exercise of his discretion, he shall sooner make such distribution of said principal. And he shall be held harmless for all he shall do in good faith in carrying out my intentions as herein declared, or as in said trust deed provided.

‘In witness whereof I have hereunto set my hand and seal this fourth day of March, 1871.

JOHN PRENTICE.' [L. S.]

Aaron J. Vanderpoel, for appellants.

Joshua M. Van Cott, for respondent.

FINCH, J.

The objection that the trust here sought to be enforced was voluntary and without consideration has no weight, if it was in fact fully and completely constituted. Young v. Young, 80 N. Y. 437;Jones v. Lock, L. R. 1 Ch. 25. By what the grantor denominated his deed of trust he transferred to the trustee named and appointed in the instrument the securities and funds now in question, directing the income, during his life, to be paid to Clarence King, to be by him appropriated to the use of Mrs. Howland and her three daughters, in specified proprotions, and at his death the principal to be disposed of in accordance with sealed instructions therewith delivered, but not to be opened till that event. A full power of revocation was reserved, and it was provided, as a condition of the grant, that the beneficiaries should have no legal or equitable right to the principal or income; that the trustee should hold subject to the grantor's direction and control until the event of his death; and that if any attempt should be made to interfere with the execution of the trust, or to claim the securities contrary to the conditions imposed, then the trust should at once cease and determine.

Neither the power of revocation, nor the provisions determining the trust in the event of a legal interference, or the death of the trustee in the life of the settlor, are in the least inconsistent with the trust as completely and perfectly constituted. They both assume its separate and effective existence, and provide merely for its termination upon the happening of specified contingent events. But attention is called to the clauses in the deed which require the trustee to hold and manage the fund subject to the direction and control of the settlor, and deny to the beneficiaries any legal or equitable right to either principal or interest. The...