In re McManus' Will

• Decision Date: 16 April 1940
• Citation: 26 N.E.2d 960,282 N.Y. 420
• Parties: In re McMANUS' WILL.
• Court: New York Court of Appeals Court of Appeals

282 N.Y. 420

26 N.E.2d 960

In re McMANUS' WILL.

Court of Appeals of New York.

April 16, 1940.

Appeal from Supreme Court, Appellate Division, Second Department.

Proceeding in the matter of the accounting of the Brooklyn Trust Company, as successor to the Mechanics Bank, as substituted trustee of the trust for the benefit of Edward Whitaker under the last will and testament of Ellen C. McManus, late of the County of Kings, deceased. From an order, excepting a clause therein awarding costs, of the Appellate Division, 258 App.Div. 901, 16 N.Y.S.2d 320, in which reargument was denied in 258 App.Div. 966, 17 N.Y.S.2d 1000, reversing upon the law a decree of the Surrogate of Kings County construing the will of Ellen C. McManus, and directing as to the distribution of certain trust funds, Jane F. Whitaker, individually and as executrix of the estate of Edward Whitaker, deceased life beneficiary, appeals.

Judgment in accordance with opinion. Francis D. Higson, of New York City, for appellant.

Theodore Berger, of New York City, for respondent.

LEWIS, Judge.

We are to determine whether an express stipulation against apportionment, under section 204 of the Surrogate's Court Act, is present in the following clause of the will of Ellen C. McManus, deceased: ‘The remaining one of said equal one-twelfth parts, I give, devise and bequeath to my executors hereinafter named or their successors in trust nevertheless, to receive, hold, manage, invest, re-invest and keep invested, to collect and receive the income therefrom and after deducting the necessary and proper charges and expenses of this trust to pay the net income thereof to my grand nephew Edward Whitaker during his life and upon his death to divide the principal of said trust together with any accrued income thereof equally among and to pay the same to my nieces and nephews who may be living at the time of the expiration of said trust * * *.’

The life beneficiary, Edward Whitaker, died June 22, 1938, leaving a widow, Jane F. Whitaker, the appellant herein, who appears in this proceeding individually and as executrix of her deceased husband's estate. The respondent, Annie M. Verry, a niece of the testatrix, is the sole remainderman.

Upon the trustee's petition for an accounting and for a construction of the will the Surrogate ruled that the clause quoted avove did not contain an express stipulation against apportionment and that all income accruing upon the principal of the trust up to the date of death of the life beneficiary was payable upon his death to his personal representatives. The order of the Appellate Division, which is now before us for review, reversed on the law the Surrogate's decree and remitted the proceeding to Surrogate's Court with directions that a decree be entered adjudging that the clause in controversy constitutes in effect an express stipulation that accrued income should not be apportioned, and that the testamentary trustee account accordingly.

In administering the trust, with special reference to the disposition of income between the estate of the deceased life beneficiary and the remainderman, the trustee was governed by section 204 of the Surrogate's Court Act which, so far as material here, provides as follows: ‘s 204. All rents * * * and other payments of every description made payable or becoming due at fixed periods * * * shall be apportioned so that on the death of any person interested in * * * such payments * * * shall be entitled to a proportion of such * * * payments, according to the time which shall have lapsed from the commencement or last period of payment thereof, as the case may be, including the day of the death of such person, or of the determination of his or her interest, after making allowance and deductions on account of charges on such * * * payments. * * * This section shall not apply to any case in which it shall be expressly stipulated that no apportionment be made * * *.’

The language employed by the testatrix serves clearly to fix the date when payment of income to the life beneficiary shall cease and payment thereof to the remainderman shall begin. It was only ‘duringhis life’ that the life beneficiary was to receive the net income from the trust fund created in his favor. ‘Upon his death’ the principal of that fund ‘together with any accrued income thereof’ was directed to be paid to certain named remaindermen of whom concededly the present respondent is the only one entitled thereto. The language thus chosen is clear and unequivocal and leaves us in no doubt as to the decedent's testamentary intent. It constitutes an express stipulation against apportionment within the statutory exception to be found in section 204 of the Surrogate's Court Act. Matter of Juilliard's Will, 238 N.Y. 499, 506, 508, 510, 144 N.E. 772. See, also, Matter of Dreicer's Estate, 155 Misc. 817, 818, 280 N.Y.S. 535;Matter of Dexter's Estate, 134 Misc. 195, 196, 235 N.Y.S. 763.

It is not disputed that prior to his death there had been paid to the life beneficiary all net income actually received by the trustee. Among the investments made by the trustee are bonds and mortgages which were not in default on the date of the life beneficiary's death and upon which interest was accruing but had not been received by the trustee. Such interest...