Newhouse's Estate, In re

• Decision Date: 15 November 1960
• Citation: 29 Misc.2d 1021,212 N.Y.S.2d 2
• Parties: In re ESTATE of Mott I. NEWHOUSE. Surrogate's Court, New York County
• Court: New York Surrogate Court

Page 2

212 N.Y.S.2d 2

29 Misc.2d 1021

In re ESTATE of Mott I. NEWHOUSE.

Surrogate's Court, New York County.

Nov. 15, 1960.

White & Case, New York City (John E. MacKenty, New York City, of counsel), for Bankers Trust Company, trustee.

Debevoise, Plimpton & McLean, New York City (Charles I. Pierce, Jr. and H. Richard A. Kimball, Jr., New York City, of counsel), for Mary A. McCaskell.

Hardy, Peal, Barker & Rawlings, New York City, for Ella M. Langfeld and others.

Boal, McQuade & Fitzpatrick, New York City, for Legatees Funding Corp.

Gullie B. Goldin, New York City, for Edwin K. Merkely.

Loeb, Churchill & Lawther, New York City (Cecil L. Head and F. Martin Bowne, New York City, of counsel), for Milan V. Petrovic.

Victor D. Werner, New York City (Akim M. French, New York City, of counsel), for Guardian Life Ins. Co. of America.

Romanoff, Kellner & Borut, New York City (H. Herbert Romanoff, New York City, of counsel), for Everett A. Mayer as administrator of the estate of Ruth B. Mayer, deceased.

Elmer M. Olson, New York City, for Citizens Savings Bank & Trust Co. and for Margaret M. Longtin.

S. SAMUEL DI FALCO, Surrogate.

This is an intermediate accounting of the successor trustee. Testator died on April 22, 1910. He was survived by his mother, Babette Newhouse, who was 83 years of age; his sister Kate Newhouse, aged 58; brother Samuel, aged 56; sister Hattie Newhouse, aged 55; sister Jennie Newhouse, aged 48; sister Ella Newhouse Langfeld, aged 44; sister Laura Newhouse Irwin, aged 41; and two nieces, Carrie Kingsberry Merkley, aged 29 and Ruth T. Petrovic, aged 22.

In Paragraph Second of his will which is dated November 4, 1904 testator provided as follows:

'Second: I hereby direct my executors and Trustees hereinafter named, or such of them as may qualify, to set apart a certain sum of money out of my estate and invest the same so that it will yield an income of Ten Thousand ($10,000.) Dollars per year net, and to pay the said sum of Ten Thousand Dollars per year to my beloved mother in equal monthly installments during the term of her natural life. After her death I direct that the aforesaid principal sum and any accumulated income shall revert to and become a part of my residuary estate.'

In Paragraph Third he directed that 'all the rest, residue and remainder of my estate, whether real, personal or mixed, and wheresoever the same may be situated' be divided into five equal shares or parts. He directed in subdivision (a) thereof that one-half of such part be paid to his sister Hattie outright and the other half thereof be held in trust and the income paid to her during her life. He then provided that 'Upon her death, in the event that she shall have married during her life and leave lawful issue her surviving, then I direct that such one-half share or part shall be divided among her lawful issue, share and share alike. In the event that she dies without leaving lawful issue her surviving, then I direct that such one-half share or part shall become part of my residuary estate and follow the distribution hereinafter provided.'

He made the same provision for his sister Jennie in subdivision (b). In subdivision (c) he directed that one of the shares be held in trust for his sister Ella during the term of her life. He directed that:

'(U) upon her death such share or part shall be divided among her lawful issue her surviving, share and share alike. In the event that she dies leaving no lawful issue her surviving, then I direct that such share or part of my estate in this subdivision mentioned shall revert to and become a part of my residuary estate.'

A similar provision of one share being held in trust was made in subdivision (d) for the life of his sister Laura with the same direction for the disposition of the principal upon her death. The remaining one-fifth share was then to be divided into two parts and each held in trust for the benefit of a niece. These two trusts also contained the same provision as made for his sisters Ella and Laura for the disposition of the principal upon the death of a niece . Paragraph Fourth of testaor's will reads as follows:

'Fourth: All the rest, residue and remainder of my estate I direct my Executors and Trustees hereinafter named, or such of them as may qualify to invest and keep invested in such manner and form as to them may seem best and most advantageous, and to pay over the income thereof in equal shares to my sisters and nieces me surviving . Upon the death of my sisters, Ella Newhouse Langfeld and Laura Newhouse Irwin, I direct that said trust shall cease and that said residuary estate so invested as aforesaid shall be distributed according to the Laws of the State of New York as though I had died intestate as to said residuary estate.'

In Paragraph Sixth testator stated that he made no provision for his brother Samuel because he considered that he had ample means of his own. Samuel was appointed one of the executors and trustees. The will contains no mention of testator's sister Kate although she would be one of the income beneficiaries as a sister in the trust of the residue set up in Paragraph Fourth as aforesaid.

Kate died on November 15, 1913, intestate and without issue. Testator's mother died intestate on March 15, 1916. Testator's brother died intestate on September 23, 1930, survived by his wife who has since died. His niece Ruth died intestate on April 18, 1938 survived by her husband and a daughter. The husband is still living. The daughter died on August 31, 1953 survived by her husband. They are parties to this proceeding. Testator's sister Jennie died testate on March 7, 1950 without issue . Her will gave all of her property to her sister Hattie. The latter died testate on July 9, 1950 without issue. Her will gave all of her property in equal shares to her sisters Ella Newhouse Langfeld and Laura Newhouse Irwin. The latter died testate on December 15, 1950 without issue. Her will gave all of her property to her sister Ella who is still living and a party to this proceeding. Testator's niece Carrie died intestate on May 30, 1948, survived by her son Edwin K. Merkley who is also a party to this proceeding.

It appears that after the death of testator's mother in 1916 an agreement dated June 2, 1961 was executed between Louis N. Kramer and Samuel Newhouse as trustees and testator's four sisters, Hattie, Jennie, Laura and Ella and his two nieces, Carrie and Ruth. That agreement recited that testator's will provided that a certain annuity be paid to his mother and upon her death the principal which was invested to yield the amount of the annuity should revert to his residuary estate. It further recited that Paragraph Fourth of the testator's will provided that said principal be invested by the trustees and the net income be divided in equal proportions among the parties of the second part, i. e. the sisters and nieces of the testator. The agreement then provided that the income earned by the trust created in Paragraph Fourth of the will be paid one-fifth to each of the four sisters and one-tenth to each of the two nieces. The parties of the second part authorized the trustees to continue the payment of the fund as therein arranged so long as it shall remain a trust and until it has been dissolved by 'reason of the happening of the event provided for in Paragraph 'Fourth' of the Will' of decedent.

On May 5, 1938, which was after the death of testator's niece Ruth, another agreement was executed between Hattie Newhouse, (who had qualified as a trustee on November 14, 1930), as sole surviving trustee and testator's four sisters, Hattie, Jennie, Laura and Ella, his niece Carrie and Babette Townsend, the daughter of testator's deceased niece Ruth. This agreement recited that Babette Townsend was then entitled to receive the principal of the trust held for the benefit of her mother pursuant to subdivision (f) of Paragraph Third of the will and claimed the right to receive during the lifetime of Ella Newhouse Langfeld and Laura Newhouse Irwin, the share of the income of the trust under Paragraph Fourth of the will which her mother had received prior to her death. The agreement then provided that $500 would be paid to said Babette Townsend on account of the principal of the trust for the benefit of her deceased mother and she consented that the balance of the principal of said trust shall remain part of the fund held by the surviving trustee pursuant to Paragraphs Third and Fourth of the will until there shall be a general division and distribution thereof. Until the termination of the trust under Paragraph Fourth of the will, the surviving trustee and her successor, was authorized to pay the net income of the fund held pursuant to Paragraphs Third and Fourth in the following proportions: 17% each to sisters Hattie and Jennie; 23% each to sisters Laura and Ella and 10% each to niece Carrie and grandniece Babette.

The transfer tax was fixed by order of September 12, 1911. The provision for decedent's mother was considered a life annuity of $10,000 and valued at $25,105 as of the date of decedent's death by the Superintendent of Insurance of the State of New York.

The account of the executors was settled by a decree dated January 16, 1913. The decree authorized the executors and trustees to retain a mortgage of $215,000 with interest at the rate of 5% per annum for the payment of $10,000 per year net to decedent's mother.

The account of Louis N. Kramer, deceased executor, as rendered by his executors, was settled by decree dated February 26, 1932. The petition therein described decedent's mother as a life beneficiary under his will. A copy of the agreement dated June 2, 1916 was included in the account.

Hattie Newhouse named as an executor and trustee did not qualify as an executor but qualified as a trustee on November 14, 1930 after he deaths of the two original trustees. She died on July 9, 1950 and her account as surviving trus...