Low v. Bankers Trust Co.

CourtNew York Court of Appeals
Writing for the CourtCRANE
Citation200 N.E. 674,270 N.Y. 143
Decision Date03 March 1936
PartiesLOW et al. v. BANKERS TRUST CO. et al.

270 N.Y. 143
200 N.E. 674

LOW et al.
v.
BANKERS TRUST CO. et al.

Court of Appeals of New York.

March 3, 1936.


Action for an accounting by Ethelbert Ide Low and others, as executors of, and trustees under, the last will and testament of Lyman N. Hine, deceased, against Bankers Trust Company, as successor trustee under deed of trust made by Francis L. Hine under date of March 13, 1914, and others. From a judgment of the Appellate Division (241 App.Div. 731, 270 N.Y.S. 917), which affirmed a judgment of the Special Term (146 Misc. 480, 261 N.Y.S. 474), Francis L. Hine, 2d, an infant of the age of fourteen years, and Sibyl Young Hine, an infant under the age of fourteen years, by Sibyl Y. Hine, their guardian ad litem, appeal by permission of the Court of Appeals.

Judgments reversed, and judgment directed in accordance with opinion.

See, also, 265 N.Y. 264, 192 N.E. 406.

[200 N.E. 675]


Appeal from Supreme Court, Appellate Division, First Department.

[270 N.Y. 144]George W. Whiteside, Leonard P. Moore, and David S. Hecht, all of New York City, for appellants.

270 N.Y. 145]M'Cready Sykes and James J. Mennis, both of New York City, for respondents Ethelbert Ide Low and others.
Frank Sowers, of New York City, for respondent Bankers Trust Co.

John A. Mullen and Jerome Heffer, both of New York City, for respondents John Doe and others.

[270 N.Y. 146]CRANE, Chief Judge.

This is an action for an accounting brought by the plaintiffs, as executors of the will of Lyman N. Hine, to secure possession for the estate of the principal of a trust fund set up by Francis L. Hine, and over which Lyman N. Hine was given power of appointment. The courts below have held that the appointment was illegal in effect and have charged the entire principal with the debts, legacies, and taxes primarily chargeable to the estate of the testator. We do not agree with this disposition of the property for the following reasons, to state which requires an examination of the will and the estate disposed of:

On March 13, 1914, Francis L. Hine executed a deed of trust for the following purposes:

[270 N.Y. 147](a) To pay the income therefrom to his wife, Mary I. Hine, for life;

(b) Upon her death, to pay the income therefrom to her son, Lyman N. Hine, for life; and

(c) Upon the death of Lyman N. Hine, to pay over and transfer the principal to ‘such person, persons or corporations, and in such shares and proportions as the said Lyman N. Hine shall, in and by his duly executed and probated Last Will and Testament direct and appoint; or in default of such appointment, or in so far as the same, if made, shall not be effectual, to the issue of said Lyman N. Hine, per stirpes and not per capita.’

Mary I. Hine, the first life beneficiary, died May 11, 1927; Lyman N. Hine, the second life beneficiary, died March 5, 1930, leaving a last will and testament wherein he sought to execute his power of appointment and naming the respondents as his executors and trustees. The will was executed by Lyman N. Hine on May 22, 1929, at which time he had a personal net estate, exclusive of the power of appointment in the Francis L. Hine trust, of the value of at least $8,189,933.64. On this same date the value of the Francis L. Hine trust was $786,011.37.

On the date of his death, March 5, 1930, Lyman N. Hine's net personal estate, after deducting all expenses, amounted approximately

[200 N.E. 676

to $5,200,000, and the Francis L. Hine trust to $675,264.49.

Upon his death, Lyman N. Hine left as surviving his issue, the appellants herein, neither of whom was in being on March 13, 1914, the date of the creation of the trust by Francis L. Hine. The son, Francis L. Hine, 2d, was fourteen years old, and the daughter, Sibyl Young Hine, under fourteen when this action was begun on December 26, 1930.

The will of Lyman N. Hine, admitted to probate on the 21st day of April, 1930, makes no specific mention of the power of appointment given to the testator by the deed of Francis L. Hine. As, however, the will passes all the [270 N.Y. 148]personal property of the testator, it is, by reason of section 18 of the Personal Property Law (Consol.Laws, c. 41), a proper execution of the power, or a proper attempt at execution.

Without quoting this will in full, let us state the point which has arisen in this litigation. Lyman N. Hine passed all his residuary estate to his trustees for the benefit of his two children during their lives. Although no reference was made to the power of appointment, or any expression showing an intent to exercise the power, yet, as the testator disposed of all his personal property, it included an exercise of the power. In other words, the method of exercising the power was legal and proper according to this section 18 of the Personal Property Law, but the effect of its exercise was illegal, as it violated section 11 of the Personal Property Law, which provides that the absolute ownership of personal property shall not be suspended by any limitation or condition for a longer period than during the continuance and until the termination of not more than two lives in being at the date of the instrument containing such limitation or condition, or, if such instrument be a last will and testament, for not more than two lives in being at the death of the testator. This power of appointment relates back to the deed of Francis L. Hine and, for the purpose of measuring lives, becomes a part thereof. Fargo v. Squiers, 154 N.Y. 250, 260,48 N.E. 509. These trusts, therefore, created by Lyman N. Hine were illegal, as suspending the alienation of personal property or the principal of the trust for an additional two lives after the power of suspension had been exhausted by the life of his mother and himself. We, therefore, have a will executing a power of appointment by transferring the property to trustees for an illegal purpose.

A given power of appointment...

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27 practice notes
  • Amerige v. Attorney Gen.
    • United States
    • United States State Supreme Judicial Court of Massachusetts
    • September 30, 1949
    ...appointment is measured from the time when the power is created. Fargo v. Squiers, 154 N.Y. 250, 259,48 N.E. 509;Low v. Bankers Trust Co., 270 N.Y. 143, 148, 200 N.E. 674. 6. Whether the doctrine of capture, as applied in this Commonwealth, obtains in New York is not clear. We have found no......
  • Morgan Guaranty Trust Co. of New York v. Huntington
    • United States
    • Supreme Court of Connecticut
    • March 16, 1962
    ...Bank (Huntington), 140 N.Y.L.J. No. 116, p. 11, col. 5 (Sup.Ct. Dec. 17, 1958) (motion for reargument). See Low v. Bankers Trust Co., 270 N.Y. 143, 148, 200 N.E. 674. This invalidity extended only to the life estates given the cousins after the death of the widow and, of course, only to the......
  • Spencer's Estate, In re, No. 2--57068
    • United States
    • United States State Supreme Court of Iowa
    • August 29, 1975
    ...82, 232 N.E.2d 265, 270, 275 (1967); In Re Ball's Trust, 43 Misc.2d 84, 249 N.Y.S.2d 924, 926 (1964); Low v. Bankers Trust Company, 270 N.Y. 143, 148, 200 N.E. 674 (1936). See also 62 Am.Jur.2d, Powers, § 100 at n. 11 As already shown, we are dealing here with a special power of appointment......
  • Cleveland Trust Co. v. McQuade
    • United States
    • United States Court of Appeals (Ohio)
    • April 26, 1957
    ...1 A.L.R. 365; Bundy v. United States Trust Co. of New York, 1926, 257 Mass. 72, 153 N.E. 337; Low v. Page 245 Bankers Trust Co., 1936, 270 N.Y. 143, 200 N.E. 674; Northern Trust Co. v. Porter, 1938, 368 Ill. 256, 13 N.E.2d 487; Thorne v. Continental Natl. Bank & Trust Co., 1940, 305 Ill.App......
  • Request a trial to view additional results
27 cases
  • Amerige v. Attorney Gen.
    • United States
    • United States State Supreme Judicial Court of Massachusetts
    • September 30, 1949
    ...appointment is measured from the time when the power is created. Fargo v. Squiers, 154 N.Y. 250, 259,48 N.E. 509;Low v. Bankers Trust Co., 270 N.Y. 143, 148, 200 N.E. 674. 6. Whether the doctrine of capture, as applied in this Commonwealth, obtains in New York is not clear. We have found no......
  • Morgan Guaranty Trust Co. of New York v. Huntington
    • United States
    • Supreme Court of Connecticut
    • March 16, 1962
    ...Bank (Huntington), 140 N.Y.L.J. No. 116, p. 11, col. 5 (Sup.Ct. Dec. 17, 1958) (motion for reargument). See Low v. Bankers Trust Co., 270 N.Y. 143, 148, 200 N.E. 674. This invalidity extended only to the life estates given the cousins after the death of the widow and, of course, only to the......
  • Spencer's Estate, In re, No. 2--57068
    • United States
    • United States State Supreme Court of Iowa
    • August 29, 1975
    ...82, 232 N.E.2d 265, 270, 275 (1967); In Re Ball's Trust, 43 Misc.2d 84, 249 N.Y.S.2d 924, 926 (1964); Low v. Bankers Trust Company, 270 N.Y. 143, 148, 200 N.E. 674 (1936). See also 62 Am.Jur.2d, Powers, § 100 at n. 11 As already shown, we are dealing here with a special power of appointment......
  • Cleveland Trust Co. v. McQuade
    • United States
    • United States Court of Appeals (Ohio)
    • April 26, 1957
    ...1 A.L.R. 365; Bundy v. United States Trust Co. of New York, 1926, 257 Mass. 72, 153 N.E. 337; Low v. Page 245 Bankers Trust Co., 1936, 270 N.Y. 143, 200 N.E. 674; Northern Trust Co. v. Porter, 1938, 368 Ill. 256, 13 N.E.2d 487; Thorne v. Continental Natl. Bank & Trust Co., 1940, 305 Ill.App......
  • Request a trial to view additional results

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