In re Tracy

• Decision Date: 29 November 1904
• Citation: 179 N.Y. 501,72 N.E. 519
• Parties: In re TRACY et al.
• Court: New York Court of Appeals Court of Appeals

179 N.Y. 501

72 N.E. 519

In re TRACY et al.

Court of Appeals of New York.

Nov. 29, 1904.

Appeal from Supreme Court, Appellate Division, Fourth Department.

In the matter of the accounting of William G. Tracy and others, executors and trustees under the will of George N. Kennedy, deceased. From an order of the Appellate Division affirming a decree of the Surrogate's Court settling the accounts of the executors, and sustaining objections of the Syracuse University and others (83 N. Y. Supp. 1049), the executors appeal. Reversed.

James G. Tracy, for appellants.

John W. Church, for respondent Syracuse University.

Oliver D. Burden, special guardian, for respondent Eunice Standart.

BARTLETT, J.

The executors and trustees under the last will and testament of George N. Kennedy, deceased, attack the decree of the Surrogate's Court of Onondaga county, entered upon the judicial settlement of their accounts, in three particulars, to wit: (1) Wherein it adjudges that the taxes on life estates created by the will assessed under the state transfer tax law and the United States war revenue tax law should be deducted from the income and rents, to which each of said life tenants were respectively entitled, before any part of the same should be paid to them; (2) wherein it is adjudged that out of the income of the personal property of the deceased now in the hands of said executors they pay to James Rohm the sum of $350 for and on account of his annuity from the death of the testator up to the 4th day of November, 1902, from which shall be deducted the state tax of $146.34, and that said annuity be paid by deducting the same from the wages of said Rohm, paid to him by said executors, amounting to $65 a month; (3) wherein it is adjudged that the taxes, repairs, and insurance upon the residence No. 601 West Genesee street, in the city of Syracuse, paid by the executors up to December 1, 1902, shall be charged against and paid out of the income of the personal property of the deceased.

The will is lengthy, containing numerous provisions, but its general scheme can be briefly stated. The entire property, real and personal, after the payment of debts and legacies, is converted into trust estates for the benefit of life tenants and remaindermen; all of the latter being contingent, depending upon the status at the death of the life tenant, except the defendant the Syracuse University, which takes its estate in remainder upon the death of Elizabeth K. Freeman, a daughter of the testator. In the second subdivision of the will the testator provides in part as follows: ‘First, out of my estate remaining I give and devise to [naming the executors and trustees] eighty thousand dollars as a trust estate and in trust for my daughter, Jessie B. Kennedy, to collect and receive the rents, issues and profits arising therefrom and to pay the same over to the said Jessie B. and disburse the same for her support and maintenance during her natural life. In providing for the corpus of this estate I direct that same shall be the first charge upon my estate and shall be made up from such securities as I shall leave of my estate as are of the most intrinsic value and such as yield the largest rate of interest or pay the largest dividend, to the end that said trust estate shall yield the beneficiary, said Jessie B., the largest income for her support and maintenance. * * * The trust estate above provided for I make the first lien and charge upon my whole estate, both real and personal, and is to be first provided for out of my said estate in the first instance.’ In this connection the testator expresses the wish that his daughter Jessie B. should not marry. In the event, however, that she marries, and dies leaving lawful issue, the sum of $30,000 of the corpus of the trust fund is to be divided equally between said issue. In the event of her dying without lawful issue, the corpus of the trust is to be added to the residuary estate. In the twenty-second subdivision of the will the residue of the estate is given and devised to the trustees in trust to collect and receive the rents, issues, and profits, and pay onehalf thereof over to said Jessie B. semiannually for her support and maintenance during life, or so long as she remains unmarried; upon her marriage or death, one half of said residuary estate to be paid to certain persons named, or to their respective children, if any have died. The rents, income, and profits from the other half of the residuary estate are payable one-third to the testator's daughter Elizabeth K. Freeman, one-third to the children of Dr. Nathan R. Tefft living at the time of testator's death, for and during the life of his daughter Elizabeth K. Freeman, and, if all of the children die before the last named, the third of the income is to be added to the corpus of the trust estate during the life of said Elizabeth K. Freeman. The remaining third of the income is directed to be paid over to Margaret D. Kennedy and her daughter Louise Green equally during the life of said Elizabeth K. Freeman. If either Margaret or Louise shall die before Elizabeth K. Freeman, the survivor takes and receives the whole third of the income. The testator stated in this connection: ‘The last foregoing provision in behalf of said Margaret D. and Louise is made as an additional inducement for them and each of them to kindly nurture and properly care for and protect the interests and promote the welfare and happiness of my daughter, said Jessie B. Kennedy.’

Upon the death of Elizabeth K. Freeman the testator disposes of this half of the residuary estate in three equal parts. Two of these thirds are to be paid to certain individuals named, or to their issue in case they do not survive. The remaining third, after the death of said Elizabeth K. Freeman, is to be paid to the defendant the Syracuse University. It will thus be observed that all of the remainders are contingent, except the one passing to the defendant the Syracuse University, as above stated. In subdivision 3 of the will the testator provided as follows: ‘I give to my said daughter, Jessie B., the use of my dwelling house or homestead, including the stable on the corner of Genesee and Plum streets, in the City of Syracuse, for and during her natural life, provided she shall desire or it shall be thought for her interest by my said executors to occupy the same as a dwelling house for herself and those whom she may select to occupy the same with her as her home.’ In this connection the testator further provides, in subdivision 24, as follows: ‘During the time my said daughter, Jessie B., shall occupy my dwelling house as hereinbefore provided, I direct my said executors to pay all taxes which for any purpose may be levied thereon, and that they also keep the premises in repair at the cost of and from my estate, as well also that they pay any insurance thereon.’ Subdivision 16 reads as follows: ‘I give to my faithful servant, James Rohm, an annunity of three hundred dollars to be paid to him semiannually out of my estate for and during his natural life, provided that he remain with and serve my said daughter, Jessie B., as faithfully as for years he has served me. If for any reason he shall leave the service of said Jessie during her lifetime such annuity shall cease; so long as he shall remain in the service of Jessie I direct that he be paid by my executors a reasonable...