Putnam v. Lincoln Safe Deposit Co.

• Decision Date: 18 February 1908
• Citation: 191 N.Y. 166,83 N.E. 789
• Parties: PUTNAM v. LINCOLN SAFE DEPOSIT CO. et al.
• Court: New York Court of Appeals Court of Appeals

191 N.Y. 166

83 N.E. 789

PUTNAM

v.LINCOLN SAFE DEPOSIT CO. et al.

Court of Appeals of New York.

Feb. 18, 1908.

Appeal from Supreme Court, Appellate Division, Third Department.

Action by Robert M. S. Putnam against the Lincoln Safe Deposit Company, Harry R. Pendrick, as administrator, and others. From a judgment of the Appellate Division (118 App. Div. 468,104 N. Y. Supp. 4) modifying a judgment of the Special Term for plaintiff (49 Misc. Rep. 578,100 N. Y. Supp. 101), the administrator and others appeal. Reversed, and new trial ordered.

See 87 App. Div. 13,83 N. Y. Supp. 1091.

James W. Verbeck, for appellants.

Edgar T. Brackett and Albert Stickney, for respondents.

GRAY, J.

The plaintiff, one of the remaindermen under the will of Robert M. Shoemaker, who died a resident of the city of Cincinnati, in the state of Ohio, in 1885, commenced this action in 1900 to procure the appointment of a substituted trustee to execute the trust created by the eighteenth clause of the will, to have determined the rights and interests in the trust of himself and of the others affected thereby, and to have certain appropriate and incidental equitable relief. The will of Shoemaker, after making certain provisions, which are not now important, in the eighteenth clause, provided for the appointment of his ‘son-in-law, John R. Putnam, as trustee for his wife, my (testator's) daughter Mary,’ and read as follows: ‘It is my will and direction that all moneys, rents and property of whatever kind, under or by authority of this will, advanced, paid to or devised to my daughter, Mary, shall subject to the provisions of this will, as to the management of my estate by my executors, pass to and be managed by my said son-in-law, John R. Putnam, at his discretion, for the benefit of my said daughter, Mary, and her children, including the lineal descendants of any deceased child, and upon the death of my said daughter all of said property and her share in my estate shall pass to and become the property of her children, including the lineal descendants of any deceased child, taking per stirpes share and share alike.’ In the twenty-first clause the will provided that the residuary estate should be held by the executors ‘as the property of the estate entire’ for the period of two years, dividing meanwhile, equally, the net income among the testator's five children, or his surviving children and the children of any deceased child, ‘and then, at the expiration of two years after my decease all the property, real and personal, belonging to my estate, and not in this will otherwise disposed of, and subject to the restrictions and limitations hereinbefore provided, shall be divided, or if sold, the property or proceeds of sale be divided equally among my five children, share and share alike, or their lineal heirs, such heir or heirs taking only the share his, her, or their parent would have taken if alive. Provided that all the bequests and conditions of this item are and shall be subject to the bequests, limitations and conditions of this will as to each of my children.’ The testator had also created another trust in the share of the estate given to one of his sons, for the benefit of the son, ‘and of his wife,’ with remainder upon their deaths to their children. The plaintiff and the defendants John R. and Israel Putnam are the only children of testator's daughter Mary. He left three sons and two daughters, and he appointed his sons to be the executors of the will. After the probate of the will in Ohio the executors brought an action in that state for its construction, and they joined as defendants, among others, this plaintiff, his brothers, and their parents, John R. and Mary S. Putnam; all of whom appeared, individually or by guardians, and answered. The action resulted in a final decree, which, so far as it is of importance at present, adjudged that the share of Mary Putnam in the residuary estate, given by the twenty-first clause of the will, was ‘to be held in trust by her husband, John R. Putnam, in accordance with the terms of the eighteenth item of said will and to devolve on the death of said Mary Putnam as in the said eighteenth item specified.’ An appeal from the decree was not prosecuted by the Putnams. John R. Putnam, appointed in the will as trustee for his wife and their children, died in 1899, and then this action was instituted.

In 1900 the plaintiff's mother, who had been made a defendant in the action, died, leaving all of her property, except a small bequest, to her son, the defendant Israel Putnam. In consequence of her death and of subsequent proceedings relating to her estate and the execution of her will, changes were necessitated in this action in the addition of new parties defendant and in the service of supplemental pleadings, until finally the action was brought to an issue between the plaintiff and parties defendant, who represented the plaintiff's two brothers, the estate of Mary Putnam, and John R. Putnam, the trustee, and the Lincoln Safe Deposit Company, where the estate securities had been kept. The answers of the representatives of the two estates and of the plaintiff's brother Israel Putnam denied the creation of any trust by the provisions of Shoemaker's will and any liability on the part of Mary Putnam's, or of her husband's (John R. Putnam's), estate to account, or to make discovery, as to the property constituting the estate devised to the testator's daughter Mary Putnam. The latter's representative, an administrator with will annexed, also pleaded in bar of any recovery against her estate the provisions of the statute of limitations. The defendant, plaintiff's brother John R. Putnam, joined in the prayer for judgment contained in the complaint. A trial at Special Term resulted in an interlocutory judgment, which, in effect, upheld the trust, and adjudged that the plaintiff and his two brothers, upon the death of their mother, Mary Putnam, became the absolute owners, as tenants in common, of all of the estate devised or bequeathed by Shoemaker's will to her, or to John R. Putnam in trust for them, under the eighteenth clause of the will. A reference was ordered to state the accounts ‘of all the parties, one with another, and with each other, of all the assets and property constituting a part or representing the proceeds of the property devised and bequeathed’ under the eighteenth and twenty-first clauses of the will and affected by the action, and to investigate into the nature, extent, and disposition thereof. The interlocutory judgment was affirmed by the Appellate Division. Thereafter a report by the referee was confirmed; but the order of confirmation was reversed by the Appellate Division, for error in the admission of certain evidence, and a new hearing was ordered to be had of the matters directed to be tried by the interlocutory judgment. The new hearing came on at Special Term, where, upon a decision, formulated in findings of fact and conclusions of law, a final judgment was entered, which adjudged specifically the several rights and interests of the plaintiff and of his brothers to and in various assets of the trust estate, and determined the respective liabilities of the estates of John R. Putnam, the trustee, and of his wife, Mary, with respect to certain securities and to claims made against them for the use and disposition of the proceeds of others. As to some of the claims against the estate of Mary Putnam, it was adjudged that they were barred by the statute of limitations. Appeals were taken by all the parties, plaintiff and defendants, to the Appellate Division, where the judgment was ordered to be ‘modified both upon the law and the facts as hereinafter set forth, and, as so modified, affirmed both upon the law and the facts.’

The order, in the form in which it was made, was unanimous upon all questions except as to one item of a charge against Mrs. Putnam's estate; for, contrary to usual practice, the written dissent of Mr. Justice Cochrane as to such item was incorporated in the order and also in the judgment which followed in all details the order. As to all other questions involved, Justice Cochrane therein expressed his agreement with the court. If, therefore, it were possible for us to regard this determination of the Appellate Division, as expressed in both order and judgment, as a mere modification of the judgment of the trial court, this court being precluded from reviewing all questions of fact in the case, could affirm the same. But the difficulty with the disposition made by the Appellate Division is that it is an unqualified reversal of material parts of the judgment directed by the trial court upon its findings as to disputed questions of fact. The power conferred upon the Appellate Division to modify a judgment, upon appeal, is improperly exercised, when, upon different views of, or inferences from, the facts in evidence, it determines the controverted questions for itself, incorporates such determination in its order, and renders final judgment accordingly. This precisely has been done in this case. In the guise of what are termed ‘modifications upon the facts,’ the Appellate Division has made, and has inserted in its order and judgment, new statements, or what are really findings of facts, which are contrary to findings made upon the trial, and which very seriously affect the result. This was an error which affects the whole of the original judgment, and requires that we rverse the determination below. This was not a case where the facts were undisputed. It was one where it was sought to establish a liability upon facts showing confusion, or commingling, of trust moneys. It was sought to trace them and the proceeds of particular securities, and it was claimed that Mrs. Putnam, the life beneficiary, had so intermeddled with the trust property as to invest herself with the full and continuing responsibility of a trustee de son tort.

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