Provident Trust Co. Of Philadelphia v. Osborne

• Decision Date: 23 July 1943
• Docket Number: 149/139.
• Citation: 33 A.2d 103
• Parties: PROVIDENT TRUST CO. OF PHILADELPHIA et al. v. OSBORNE et al.
• Court: New Jersey Court of Chancery

33 A.2d 103

PROVIDENT TRUST CO. OF PHILADELPHIA et al.

v.OSBORNE et al.

149/139.

Court of Chancery of New Jersey.

July 23, 1943.

Suit in equity by the Provident Trust Company of Philadelphia and others as executors under the will of William Osborne, deceased, against William Osborne, Jr., and others for construction of the will.

Decree construing the will.

1. Testator created a life estate for the benefit of a son and on his death a life estate therein to grandsons, with the remainder over to great grandchildren, with a provision against contesting the will by any beneficiary therein under penalty of forfeiture. Held, that such provision against contest is enforceable and that the first life tenant, having contested probate, forfeited his life estate.

2. That the forfeiture of the life estate by the son did not work a forfeiture of the vested interest of the grandchildren or the great grandchildren.

3. That upon the forfeiture of the son's life estate, the estate of the grandchildren being vested in them, was thereby accelerated and they are therefore entitled to the income from the corpus of the estate and its accumulations.

4. Abatement of legacies being necessary, it should be accomplished in the following manner: (1) residuary estate; (2) other general legacies, pro rata; (3) specific bequests or devises, or, where demonstrative legacies are classed as specific under the circumstances of the case, the last in order of abatement will be specific and demonstrative legacies ratably.

Russell L. Browne, of Atlantic City, for complainants.

Albert A. F. McGee, of Atlantic City, for defendant William Osborne, Jr.

J. Albert Homan, of Trenton, for defendant in military service and guardian ad litem for infant defendant, pro se.

SOOY, Vice Chancellor.

Complainants, as executors and executrix, seek a construction of the will of William Osborne, late of the City of Ventnor City, who died on August 22, 1938.

Paragraph 7, in conjunction with paragraph 14 of the will, gives rise to the requested aid of this Court. Paragraph 14 reads as follows: ‘Fourteenth: I will and direct that if any Legatee or Beneficiary named or set forth in this my Will shall take or institute any legal proceedings whatsoever to contest this may Will or to invalidate the force or effect of any of the provisions thereof, then and in such case, the legacy, devise, bequest or provision given or established by this my Will unto or for the benefit of such Legatee or Beneficiary so taking or instituting such proceedings shall be null, void and of no effect, and the legacy, devise, bequest or provision given or established by this my Will unto or for the benefit of such Legatee or Beneficiary so taking or instituting such proceedings shall go to and be divided among or held for the use and benefit of the remaining Legatees and Beneficiaries in this my will, proportionately to their respective interests and ownerships in this my Will set out.’

Under paragraph 7 a trust fund of $10,000 is created, to be used by the trustees as follows: (a) to pay the net income to William Osborne, Jr., son of decedent, for his lifetime; (b) upon the death of William Osborne, Jr., to pay said net income to decedent's grandsons, William Frederick Osborne and John Chamberlain Osborne (sons of William Osborne, Jr.), in equal shares during their lifetime; (c) upon the death of each of said grandsons of decedent, to pay the principal to their issue or issue of their deceased children, with provision if either grandson dies without issue the income is to be paid to the surviving grandson; (e) to hold the share of any minor distributee until 21 years of age, with certain instructions as to use of income for their maintenance.

The proofs show that William Osborne, Jr., son of the testator, did file a caveat against the probate of the will, that a hearing was held thereon before the Orphans Court of Atlantic County, resulting adversely to the contestant and in a decree admitting the will to probate; that the son appealed from the decree of the Orphans Court but that appeal was dismissed by the Prerogative Court.

The first question is, should this Court give effect to paragraph 14 of the will and decree that William Osborne, Jr., may not take under the provisions of his father's will?

The general rule sustaining the validity of provisions of a will for forfeiture of the share thereunder of a beneficiary who contests the will seems to be well established in this State, and it would appear that we do not recognize, as do some jurisdictions, exceptions or limitations of the rule, depending on whether the gift is of realty or personalty, and if of personalty, whether there is a gift over and whether the contest is in good or bad faith or on probable cause.

The leading case in support of the validity of a no-contest clause in wills is Hoit v. Hoit, 42 N.J.Eq. 388, 7 A. 856, 857, 59 Am.Rep. 43, in which the Court of Errors and Appeals refers to the exceptions or limitations of the rule that such conditions are valid, and said, in effect, that they are ‘artificial distinctions' and in that case further held: ‘It is not material to determine in this case whether, in bequests of personalty, the artificial rules above named would be applied in this state.’

The Court went further, however, and held: ‘Upon another and a broader principle of equity the appellee should not be allowed to defeat the intention of the testator that there should be no litigation over his will at the expense of the estate, or, in this case, at the expense of his widow, the legatee of the portion of his property charged with the payment of debts and expenses. This is not strictly the doctrine of election between repugnant gifts, but a rule of equitable construction that a person cannot accept and reject the same instrument, and that there is an implied condition that he who accepts a benefit under it shall adopt the whole by conforming to all its provisions.’

After the decision in the Hoit case, the Court of Errors and Appeals had occasion to review the decree in Cross v. French, 118 N.J.Eq. 85, 177 A. 456, and affirmed the principles therein annunciated by Vice Chancellor Stein, whose opinion appears in 118 N.J.Eq. 85, 177 A. 456, the affirmance being found in 119 N.J.Eq. 563, 182 A. 834. There was a modification by the...