New York Life Ins. & Trust Co. v. Winthrop

• Decision Date: 20 November 1923
• Citation: 142 N.E. 431,237 N.Y. 93
• Parties: NEW YORK LIFE INS. & TRUST CO. v. WINTHROP et al.
• Court: New York Court of Appeals Court of Appeals

237 N.Y. 93

142 N.E. 431

NEW YORK LIFE INS. & TRUST CO.

v.WINTHROP et al.

Court of Appeals of New York.

Nov. 20, 1923.

Action by the New York Life Insurance & Trust Company, as trustee under the will of Jabez A. Bostwick, deceased, against Egerton L. Winthrop, Jr., as executor, etc., and others. From judgment of Appellate Division (204 App. Div. 803,198 N. Y. Supp. 755) reversing judgment entered on report of referee, defendants appeal.

Judgment of Appellate Division reversed, and judgment on referee's report affirmed.

Appeal from Supreme Court, Appellate Division, First Department.

Frederick W. Stelle, Arthur E. Pettit and Robinson K. Bissell, all of New York City, for appellant Winthrop.

Albert Ritchie, of New Rochelle, for appellants New Rochelle Trust Co. et al.

James A. Dilkes, of New York City, for appellants Albert C. Bostwick et al.

Charles Angulo, of New York City, for respondent trustee.

Charles S. McVeigh, of New York City, for respondents De Pret.

Charles Green Smith and Lawrence Atterbury, both of New York City, for respondent Gilbert.

Garrett A. Brownback, of New York City, for respondents Francis et al.

CARDOZO, J.

The action is brought for the settlement of the accounts of a trustee and for the construction of a will.

Jabez A. Bostwick, who died in August, 1892, divided his residuary estate into three equal parts.

One of ‘said equal third parts' he devised and bequeathed to the New York Life Insurance & Trust Company in trust to pay the income thereof to his wife, Helen C. Bostwick, during life, and ‘upon her death to pay the same’ to his daughter Mrs. Nellie Bostwick Morrell during life, and upon the death of his ‘said wife and daughter to convey, assign and deliver the said estate real and personal so held in trust to the lawful issue of Mrs. Nellie Bostwick Morrell share and share alike, or in default of such issue to the next of kin of Mrs. Morrell.’

A second share was given to another trustee upon like trusts, but for the benefit of another daughter.

A third share, disposed of upon trusts for the benefit of a son, was the subject of a litigation recently before us. Matter of Bostwick, 236 N. Y. 242, 140 N. E. 576. The trusts for the son were substantially the same as those for the daughters, except that one-half of the principal was to be paid to him when he attained the age of 21. We held that his right to this half, ‘whether it be classified as vested or contingent, was subject to be divested by his death before his mother.’ 236 N. Y. 242, at page 245 (140 N. E. 576). ‘The trustee at the appointed time was not merely to convey and assign. It was also to deliver. Conveyance and delivery were impossible while the trust for the mother was outstanding.’ 236 N. Y. 242, 246, 140 N. E. 576. ‘Majority did not give an indefeasible title to the half without survivorship at the end of the primary trust, and survivorship did not give it, without the attainment of majority.’ 236 N. Y. 242, 246, 140 N. E. 576, 577.

[1] The first of the three shares is the subject-matter of this action. Nellie Bostwick Morrell died without issue in January, 1906. Her mother, the testator's widow, died in April, 1920. The trustee was then under a duty to distribute the estate so held in trust among the next of kin of Mrs. Morrell. We are to determine the point of time which the testator had in mind as the one for the ascertainment of the class. On the one hand, it is asserted that the next of kin in being at the death of Mrs. Morrell acquired a title that was indefeasible though they died before the end of the trust and so before the date of distribution. This was the view of the Appellate Division. On the other hand, it is asserted that the class was to be ascertained when there was a duty to convey and deliver, and that survivorship at that time was one of the conditions of the gift.

Much that was said in construing the trust for the benefit of the son is applicable here. The testator was mindful of the possibility that the daughter might die before the wife. Accordingly, he was careful to provide that only upon the death of both-‘upon the death of my said wife and daughter’-was the trustee to convey and deliver the subject-matter of the trust. The mandate is to distribute among issue, and ‘in default of such issue’ among next of kin. But in default of issue when? It happens that none were born. Plainly, if any had been born, their interests would have been defeasible, at least until their mother's death. This, indeed, is conceded by counsel for respondents. The very provision for the substitution of another class, the class of next of kin, is a token that survivorship was thought of as a condition of the gift. Salter v. Drowne, 205 N. Y. 204, 213,98 N. E. 401; Bowman v. Bowman, 1899 A. C. 518, 523, 526. No doubt, it would have been possible by appropriate words, as, for example, by words of direct gift, coupled, it may be, with other tokens of intention (Matter of Bump's Will, 234 N. Y. 60, 136 N. E. 295), to clothe the issue, if any, with an indefeasible interest, which would have passed to their own successors in title, though they died before their mother. That is not what the testator did. We deal, therefore, with a gift which, at least up to a certain point, was contingent and defeasible, a gift to which survivorship at some time in the future was annexed as a condition. Since a contingency existed, since the testator did not intend that the interests of issue should vest as soon as they were born, his expectation must have been that the vesting would be postponed until the trust was at an end. Bowman v. Bowman, supra; Young v. Robertson, 4 Macq. 314, 319, 320; Vincent v. Newhouse, 83 N. Y. 505, 511. If it was postponed till then for issue, it was postponed for next of kin.

Whether the same construction would be appropriate if the ultimate remainder had been given, not to the next of kin of the daughter, but to those of the testator, we need not now determine. Such a gift is more readily interpreted as a declaration that the law shall take its course, that the estate shall be disposed of as if a will had not been made. Matter of Bump, supra; Whall v. Converse, 146 Mass. 345, 348, 15 N. E. 660; cf. 2 Jarman Wills, 138. Distinctions are also drawn, how effectively we need not say, between a gift to next of kin in substitution for another class, and a gift to next of kin as primary donees. At present, we confine ourselves to the holding that the point of time which fixes the ascertainment of the class of issue and the vesting of their interest, is the one to which we must look in defining the substituted class described as next of kin. Hutchinson v. National Refuges for Homeless & Destitute Children, 1920 A. C. 794. When we speak in this connection of the vesting of an interest, we mean, of course, a vesting that is absolute and final. The statutory definition of vested and contingent estates sheds little light upon the problem, for an estate may be vested within the definition of the statute, though defeasible by death before the moment of division. Moore v. Littel, 41 N. Y. 66;Campbell v. Stokes, 142 N. Y. 23, 30,36 N. E. 811;Clowe v. Seavey, 208 N. Y. 496, 502,102 N. E. 521,47 L. R. A. (N. S.) 284;Doctor v. Hughes, 225 N. Y. 305, 310,122 N. E. 221. The only significant distinction for the purpose now in view is between an estate that is absolute and one subject to conditions. Matter of Curtis, 142 N. Y. 219, 223,36 N. E. 887;Matter of Seaman's Estate, 147 N. Y. 69, 75,41 N. E. 401.

Survivorship being a condition, we hold that it is survivorship at the time of distribution. Vincent v. Newhouse, supra; Teed v. Morton, 60 N. Y. 502;Miller v. McBlain, 98 N. Y. 517; Bowman v. Bowman, supra; Young v. Robertson, supra; 2 Jarman Wills, pp. 733, 734, 736; 28 Halsbury's Laws of England, p. 725, § 1351. We are not blind to the fact that other readings of the will are possible and plausible. In such a situation, the canon of construction which distinguishes between a direct gift and one through the medium of a mandate to deliver and convey may fairly turn the scale. Matter of Bostwick, supra; Matter of Baer, 147 N. Y. 348, 41 N. E. 702;Salter v. Browne, supra, 205 N. Y. 204, at page 215,98 N. E. 401;Fulton Trust Co. v. Phillips, 218 N. Y. 573, 583,113 N. E. 558, L. R. A. 1918E, 1070;Wright v. Wright, 225 N. Y. 329, 122 N. E. 213. A faint suggestion is in the briefs that the gift to next of kin, even though contingent upon survivorship at the date of distribution, must be confined, subject to that contingency, to those who were next of kin at the death of Mrs. Morrell, the person named as ancestor, with the result that the class might thereafter be diminished, but could not be enlarged. Brook v. Whitton, 1910, 1 Ch. 278. This construction, even if it could otherwise be accepted, becomes inadmissible when we consider that the next of kin are to take in substitution for the issue. Issue living at the daughter's death, had there been any, would themselves have been next of kin, if the class of next of kin was to be determined at that time. The result would be that in the event of their death before the trust was ended, the substitutionary gift would fail. That is not what the testator meant. The next of kin were to be ascertained as if the daughter had lived up to the time prescribed for distribution. Hutchinson v. National Refuges for Homeless & Destitute Children, supra; Matter of Mellish, 1916, 1 Ch. 562; Salter v. Drowne, supra. ‘Where a testator gives property in trust for the benefit of the persons who at a time subsequent to his own death shall by virtue of the statute of distributions be his next of kin the class is an artificial class to be ascertained on the hypothesis that the testator had lived up to and died at the subsequent period of time.’ Per Viscount Finley in Hutchinson v. National Refuges for Homeless & Destitute Children, supra, 1920 A. C. 794 at page 805. The will, when read in its...