In Re Bumsted's Estate., 3822.

• Decision Date: 30 January 1948
• Docket Number: No. 3822.,3822.
• Citation: 56 A.2d 725
• Parties: In re BUMSTED'S ESTATE.
• Court: New Jersey Prerogative Court

56 A.2d 725

In re BUMSTED'S ESTATE.

No. 3822.

Prerogative Court of New Jersey.

Jan. 30, 1948.

Proceeding in the matter of the estate of Minnie G. Bumsted, deceased, for a decree of distribution.

Decree is accordance with opinion.

Syllabus by the Court

1. It is well established law that in construing a will the court's function is to determine the intent of the testator from the four corners of the will.

2. The law is well settled that where an estate or interest is given in one clause of a will, in clear and decisive terms, the interest so given cannot be taken away or cut down by raising a doubt upon the extent and meaning of a subsequent clause, or by inference therefrom; but to justify a rejection of the first clause the language of the subsequent clause must be as clear and decisive as that of the first clause. Commercial Trust Co. of New Jersey v. Kohl, 131 N.J.Eq. 233, 24 A.2d 809.

3. In April, 1934, the executors and trustees represented to the general legatees under the will, that the estate's financial position would not permit the payment in full of legacies to such legatees, including trust legatees; whereupon the interested parties entered into an agreement that the assets of the estate should be applied pro rata to the payment of the general legatees, including trust legatees. Pursuant thereto, the general legatees, including trust legatees, received approximately 36% of the face amount of their legacies. Subsequently, the beneficiaries of two of the trust legacies died. The executors and trustees filed a petition for an order of distribution to determine whether the corpus of said trusts should be applied to the satisfaction of the general legacies or should be paid over to the residuary legatee, which claimed the same as remainderman of such trusts, or general legatee or specific legatee. Held, that under the terms of the will, the residuary legatee was not the remainderman of said trusts or a general or specific legatee, and that the corpus thereof and the interest which accrued thereon subsequent to the date of death of the life tenants shall be applied toward the balances due the general legatees.

Anderson, Rugge & Coleman, of Jersey City, for petitioners.

Stryker, Tams & Horner, of Newark (Emory C. Risley, of Newark, of counsel), for respondent Trustees of Phillips Academy.

John I. O'Neil, of Jersey City (Edward J. O'Mara, of Jersey City, of counsel), for executors of Pierre F. Cook.

Gross, Blumberg, Mehler & Goldberger, of Newark (Max Mehler, of Newark, of counsel), for respondent Guaranty Trust Co. of New York.

EGAN, Vice Ordinary.

A petition for a decree of distribution was filed by James J. Reardon and the Commercial Trust Company of New Jersey, surviving executors and trustees under the last will and testament and codicil thereto of Minnie G. Bumsted, who died on or about October 6, 1930. The will and codicil were admitted to probate in this court on October 22, 1930. One of the executors and trustees, Pierre F. Cook, who qualified as such, died June 16, 1943.

The decedent testatrix, Minnie G. Bumsted, left an estate of an approximate value of one and a half million dollars. Under paragraphs Second to Fifth inclusive and Seventh and Ninth of her will, and paragraph Second of her codicil, she bequeathed money legacies totaling $476,000 to twenty-two people and institutions. She also provided for the establishment of four trusts, the total principal of which amounted to $435,000, as follows:

Under paragraph Sixth thereof a trust in the sum of $10,000 for the benefit of Clara H. Stoddard with income to her for life.

Under paragraph Eighth thereof a trust in the sum of $200,000 for the benefit of Minnie A. Dimse with income to her for life.

Under paragraph Tenth thereof a trust in the sum of $25,000 for the benefit of James A. Noble with income for the education and support of James A. Noble during his life.

Under paragraph Eleventh thereof a trust in the sum of $200,000 for the benefit of James J. Reardon with income to him for life.

It is provided in the paragraphs creating the trusts that upon the death of the life tenants named therein, the principal thereof shall pass into and form a part of testatrix' residuary estate. The residue of the estate is given, devised and bequeathed to Phillips Academy at Andover, Massachusetts, in the following language:

‘Fifteenth. All the rest, residue and remainder of my estate, both real and personal, of every nature and kind, and wheresoever situate, of which I shall die seized and possessed, or in any manner entitled to, including the trust funds hereinbefore set apart for the benefit of my sisters-in-law, Clara H. Stoddard and Minnie A. Dimse, and said James A. Noble and James J. Reardon, from and after their respective deaths, after the payment of said inheritance taxes, I give, devise and bequeath to the corporation, by whatever name or corporate title the same may be known, conducting the educational institution known as Phillips Academy at Andover, Massachusetts, for the general purposes of such institution, to have and to hold the same unto the said corporation, its successors and assigns forever.’

Clara H. Stoddard and Minnie A. Dimse, the life tenants of two of the trusts aforesaid, are dead, and the trusts established for them have ‘fallen in,’ and are now distributable.

It appears that during a nationwide depression in the early 1930's, there was a substantial depreciation in the values of the assets of the estate, which created a doubt in the minds of the estate's administrators that a liquidation of the estate would produce moneys sufficient to pay in full the money legacies and trust funds under the will and codicil. Thereupon, the executors contacted the beneficiaries and informed them of the estate's condition and discussed with them the advisability of entering into an agreement for the postponement of the payment of their legacies and trust funds and for a postponement of the liquidation of the estate in the hope that there might subsequently be an appreciation in the value of the assets of the estate, the benefit of which would enure to the beneficiaries. The beneficiaries presumably were persuaded by the representations of the executors and trustees, and consented to a postponement of the payment of their legacies and trust funds and of the liquidation of the estate. An agreement to that effect was executed by the beneficiaries and the executors on April 6, 1932. It is entitled ‘Agreement postponing payment of legacies and trust funds,’ and provides among other things for the postponement to April 6, 1934, of the payment of the money legacies and the trust funds. Paragraph tenth thereof reads as follows:

‘10. If and when the real and personal estate of Minnie G. Bumsted, deceased, is liquidated sufficient funds (including income in hand) are not available after payment of all proper charges to pay in full the principal of the various legacies and trust funds, the same shall be paid proportionately without reference to the interest paid under this agreement; provided, however, that the executors may from time to time as and when funds become available make proportionate payments on account of the various legacies and trust funds.’

On April 6, 1934, the estate's assets were still insufficient to meet the amounts due under the legacies and the trusts. The parties then entered into another agreement dated April 6, 1934, entitled ‘Agreement relative to distribution of estate.’ Paragraph second thereof provides that the assets of the estate, except certain stocks referred to therein, should be sold. Paragraph third thereof provides among other things, as follows:

‘3. The net proceeds of sale of said personal property assets so to be sold under paragraph 2 hereof and any moneys now in or otherwise coming into the executors' hands shall be paid and applied by the executors to the following items: * * *

‘(f) To the payment to the legatee, The Woodlawn Cemetery, of the full principal amount of its legacy of Five Thousand Dollars ($5,000.). * * *

‘(g) The remaining net proceeds of sale of said personal property assets shall, by the executors, be paid to the various legatees, under said will and codicil, including the trustees of the trust fund legacies and (excluding the residuary legatee and devisee and excluding the legatee The Woodlawn Cemetery) proportionately, in the ratios that the principal amounts of said respective legacies, including trust fund legacies, bear to the total of all said legacies, including trust fund legacies, upon execution and delivery to the executors of duly executed proper refunding bonds and releases; subject, however, to any legatee's share being charged with such amount as may be necessary under paragraph 4(d) hereof in cases where such legatee may take over from any other legatee any fractional share or shares of the stocks to be distributed in kind under paragraph 4 of this agreement.’

Paragraph fourth of the agreement provides as to the division and distribution of the shares of stock referred to, as follows:

‘4. The remaining personal property assets, namely, 250 shares of the stock of Colonial Life Insurance Company, 1,368 shares of the stock of Joseph Dixon Crucible Company and 2,860 shares of the stock of New Jersey Title Guarantee & Trust Company shall by the executors be divided and distributed in kind, in so far as practicable (each of said three groups of stock to be treated as a unit for the purposes of such division and distribution), among and to the legatees under said will and codicil, including the trustees of the trust fund legacies (excluding the residuary legatee and excluding also the legatee The Woodlawn Cemetery); and, subject to all the terms and conditions of this paragraph 4, such division and distribution in kind shall be pro rata in the ratios that the principal amounts of said respective legacies bear to the total amount of all said legacies. * * *.’

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