Deane's Will, In re

• Decision Date: 08 May 1958
• Citation: 151 N.E.2d 184,175 N.Y.S.2d 21,4 N.Y.2d 326
• Parties: , 151 N.E.2d 184 In re DEANE'S WILL. In the Matter of the Intermediate Accounting of HANOVER BANK, as a Trustee of aTrust Created by Albert L. Deane, Appellant. In the Matter of the Construction of the Will of Claire C. Deane, Deceased; Lyttleton Deane et al., Appellants; Lyttleton N. Deane, an Infant, by HisGuardian ad Litem, Malcolm Wilson, Respondent.
• Court: New York Court of Appeals Court of Appeals

Page 21

175 N.Y.S.2d 21

4 N.Y.2d 326, 151 N.E.2d 184

In re DEANE'S WILL In the Matter of the Intermediate Accounting of HANOVER BANK, as a Trustee of aTrust Created by Albert L Deane, Appellant In the Matter of the Construction of the Will of Claire C Deane, Deceased; Lyttleton Deane et al., Appellants; Lyttleton N. Deane, an Infant, by HisGuardian ad Litem, Malcolm Wilson, Respondent.

Court of Appeals of New York.

May 8, 1958.

John L. Freeman and Theodore W. Adler, New York City, for the Hanover Bank, appellant.

William A. Walsh, Jr., and William A. Walsh, Yonkers, for Lyttleton Deane, appellant.

Joseph R. Kelley and William R. White, New York City, for Ouida Courteol Ford, appellant.

Malcolm Wilson, White Plains, as guardian ad litem for Lyttleton N. Deane, infant respondent.

DESMOND, Judge.

The proceeding is for judicial settlement of an intermediate account of the trustee of a living trust made by Albert L. Deane in 1932. The accounting bank asked also for a construction of the will of Claire Courteol Deane to determine whether Mrs. Deane, the former wife of the trust's settlor, had in that will exercised the power of appointment granted to her by the trust agreement. The trust corpus of which that testatrix was during her lifetime the income beneficiary consists of personal property and the question of law is as to whether the will, which did not mention the power of appointment at all, constituted an exercise of that power. Section 18 of the Personal Property Law states the applicable rule as follows: ' § 18. Power to bequeath executed by general provision in will. Personal property embraced in a power to bequeath, passes by a will or testament purporting to pass all the personal property of the testator; unless the intent, that the will or testament shall not operate as an execution of the power, appears therein either expressly or by necessary implication.' Under that statute (which changed the common law in this respect, Lockwood v. Mildeberger, 159 N.Y. 181, 187, 53 N.E. 803, 804) a will which bequeaths all the testator's personal property (as to real property see similar statute Real Property Law, § 176) constitutes an exercise of a power of appointment unless a contrary intent appears 'therein' (that is, in the will) either expressly or by necessary implication. Long ago, in Lockwood v. Mildeberger, supra, 159 N.Y. at page 186, 53 N.E. at page 804, we emphasized that the intent not to execute the power must appear in the will itself either expressly or by necessary implication and that such a 'Necessary implication results only where the will permits of no other interpretation' (see, also, Low v. Bankers Trust Co., 270 N.Y. 143, 150, 200 N.E. 674, 677). Finding in this will of Mrs. Deane neither an expression of intent not to exercise the power nor anything raising a necessary implication of such an intent, the courts below correctly held that the bequest by Mrs. Deane, hereafter described, of all her personal property was under the statute an exercise of the power to appoint.

The appellants here, in addition to the trustee of the inter vivos trust, are the only child of the testatrix and her sister who together would, in default of the exercise of the power of appointment, have taken the whole of the trust corpus (two thirds to the son, one third to the sister). The respondent is a special guardian representing Mrs. Deane's sole legatee who was her infant grandson and the only child of her only son.

At the time of the making of the living trust the settlor Albert L. Deane (who was then the husband of our testatrix Mrs. Deane but was divorced in 1942 and who is living and since the death of Mrs. Deane the income beneficiary of the living trust) was a resident of Westchester County in this State. The trust agreement provides that the validity of the construction of the trust indenture shall be determined by the laws of the State of New York. Appellants attempt to argue that the will of testatrix Mrs. Deane is to be construed (and the question as to the exercise of the power decided) according to the laws of Texas where the will was executed or of New Jersey or Hawaii, of one or the other of which jurisdictions testatrix might have been considered a resident at the time of her death, or of some other 'common-law' jurisdiction. On the contrary, it was settled by our decision in Matter of New York Life Ins. & Trust Co., 209 N.Y. 585, 103 N.E. 315, 316, that the construction of a will insofar as it involves the exercise or no of a power of appointment 'is governed by the law of this state, the domicile of the donor of the power and the situs of the property'. Our court in the Per Curiam opinion in the New York Life case, supra, stated that it was adopting the Massachusetts rule as found in Sewall v. Wilmer, 132 Mass. 131, but the same rule had been applied in many earlier decisions in the lower courts of New York State and has been followed many times since in our lower courts (see City Bank Farmers Trust Co. v. Meyn, 263 App.Div. 671, 674, 34 N.Y.S.2d 373, 375). It is based on the fact or theory that the property being disposed of is that of the donor of the power, not of the donee. The English cases are in accord (see as described in Matter of Harriman's Estate, 124 Misc. 320, 326, 208 N.Y.S. 672, 678). Chancellor Kent pointed out that the estate created by the execution of a power takes effect as if created by the deed which created the power and that the party who takes on the execution of a power does so under the authority of the grantor, not the grantee, of the power (see as quoted in Matter of Harbeck, 161 N.Y. 211, 218, 55 N.E. 850, 852). This rule applying the law of the domicile of the donor of the power seems to be followed generally in the United States and it is the law of New Jersey, the State which is recited in Mrs. Deane's will as being her domicile (Farnum v. Pennsylvania Co., 87 N.J.Eq. 108, 99 A. 145, affirmed 87 N.J.Eq. 652, 101 A. 1053). Application of Spitzmuller, 304 N.Y. 608, 107 N.E.2d 91, is not and cannot be authority to the contrary since there the same person was both creator and donee of the power and never had a domicile in New York.

This will of Mrs. Deane Does make further provisions as to disposition of the estate in case the grandson should not be living at the death of testatrix but, of course, these alternative provisions never came into effect. The Will further appoints Lyttleton Deane, the son of testatrix and father of the infant beneficiary of the will, as the sole executor with provisions for substitution in case he...