Van Deusen's Will, In re

• Decision Date: 15 July 1960
• Citation: 203 N.Y.S.2d 263,24 Misc.2d 686
• Parties: In re VAN DEUSEN'S WILL. In the Matter of the Judicial Settlement of the Accounts of Proceedings of The HANOVER BANK as Sole Surviving Executor of and Sole Surviving Trustee under the Last Will and Testament and Codicils of Robert T. Van Deusen, Deceased. Surrogate's Court, Columbia County
• Court: New York Surrogate Court

Page 263

203 N.Y.S.2d 263

24 Misc.2d 686

In re VAN DEUSEN'S WILL.

In the Matter of the Judicial Settlement of the Accounts of

Proceedings of The HANOVER BANK as Sole Surviving Executor

of and Sole Surviving Trustee under the Last Will and

Testament and Codicils of Robert T. Van Deusen, Deceased.

Surrogate's Court, Columbia County.

July 15, 1960.

Kelley, Drye, Newhall & Maginnes, New York City, by Francis S. Bensel, Leland J. Markley and Robert Ehrenbard, New York City, of counsel, for petitioner, Hanover Bank.

Gasser & Hayes, New York City, by Chauncey L. Grant and George A. Dickinson, New York City, of counsel, for Harriett H. Church and Marilynn Elizabeth Dickinson.

Coffin, Coffin & Imman, Hudson, by George C. Imman, Hudson, of counsel, for Louise Van Deusen, as Executrix of the Last Will and Testament of Robert Wendover Van Deusen, deceased.

R. Waldron Herzberg, Hudson, Special Guardian for Eve Elizabeth Dickinson and Prudence Jane Dickinson, infants.

Charles E. Taylor, Middletown, for Anna Wendover Conklin and Sanford R. Wendover, sole distributees of William Wirt Wendover, and contingent beneficiaries.

WILLIAM F. CHRISTIANA, Surrogate.

The will of Robert T. Van Deusen and two codicils thereto, disposing of an estate exceeding one million dollars, were admitted to Probate in this Court by decree dated April 14, 1920.

The first forty-eight items of the will as modified by the codicils contained numerous legacies and set up several trusts.

Article 49th of the will is summarized as follows:

'Form and out of what remains of my property I give, devise and bequeath the sum of One Hundred Thousand Dollars ($100,000.00) * * *', such sum being given to named executors and trustees in trust for the benefit of a son, Robert Wendover Van Deusen, for his life, and another $100,000. in trust for the benefit of a daughter, Harriett Huyck Van Deusen, for her life. Remainders in each trust were limited to the children of the above named life beneficiaries. If either should die without children, the income from both funds was continued during the life of the surviving life beneficiary with the ultimate remainders vesting equally in the children of such surviving life beneficiary, and if no such children survived, then to William Wirt Wendover, if living, or if dead, then to his issue share and share alike.

Article 50th of the will is summarized as follows:

'I give, devise and bequeath all the rest, residue and remainder of my property, real and personal, or whatsoever name or nature and wheresoever situated, including also any and all of such sums as may come to such residuary by reason of any foregoing provision of this will to my executors and trustees * * *' and thereupon follow provisions creating two trusts, both measured by the life of testator's second wife Harriet L. Van Deusen, one trust being for the benefit of their son, Robert Wendover Van Deusen and his issue, and the other being for the benefit of their daughter, Harriett Huyck Van Deusen and her issue.

Both of the Article 50th trusts terminated upon the death of Harriet L. Van Deusen, on September 19, 1944, and their corpora thereby became payable to the son and daughter.

The assets of testator's estate were insufficient to pay fully all the legacies contained in his will and codicils. After paying the bequests in the first forty-eight articles of the will, and those contained in the codicils, there existed a substantial deficit in the trusts contained in Article 49th and no funds were available to allocate to the residuary estate.

Inter vivos trusts had been created by testator during his lifetime. One of such instruments, dated January 18, 1918 provided, among other things, that upon the death of Robert Wendover Van Deusen, the son of the settlor, without issue, one-half of the principal should revert to the settlor's estate. The son died without issue on April 21, 1951. One-half of the trust corpus thereby flowed into decedent's estate. The Hanover Bank, as sole remaining executor of decedent, transferred such monies, in equal shares, to fund in part the existing deficiency in the trusts created under Article 49th of the will.

This proceeding is the fifth executorial accounting on decedent's estate. The estate of the son, Robert Wendover Van Deusen, by answer to the petition herein, has instituted a construction proceeding, contending that the monies accruing from the 1918 inter vivos trust deed should be adjudged to form part of the residuary estate and should not be allocated to the satisfaction of other legacies.

An additional, although related problem, is presented by reason of the provisions contained in the 21st article of the will and the fourth paragraph of its first codicil. Article 21st provided that the executors and trustees should set aside securities in trust sufficient to yield an annual income of $500 to be paid to one Martha Ganson during her lifetime and upon her death such securities were to become part of decedent's residuary estate. Article 21st was revoked by the fourth paragraph of the first codicil which directed in effect that the bequest contained in Article 21st should fall into and form a part of decedent's residuary estate. The son's estate contends that the legacy given under paragraph fourth of the first codicil should have been paid into the residuary estate and that an amount equal to such legacy should now be recouped from the trusts created under Article 49th of the Will and paid to the residuary legatees.

The contingent remaindermen of the trusts under Article 49th of the will, who are children of William Wirt Wendover, deceased and the Special Guardian appointed on their behalf contend that testator's will requires an interpretation to the effect that the trust legacies created under Article 49th should be paid in full before any assets can pass to the residuary legatees. Harriett Huyck Van Deusen, now Harriett Church, appears in this proceeding but takes no position on the questions to be determined. The Hanover Bank appears in a neutral role submitting however a memorandum in support of its executorial actions.

A residuary clause of a will is that provision therein which effectively devises and bequeaths all of a decedent's testamentary estate not otherwise legally bestowed by the terms of such will. Vol. 96 C.J.S. Wills § 796; Morton v. Woodbury, 153 N.Y. 243, 257, 47 N.E. 283, 287; Riker v. Cornwell, 113 N.Y. 115, 124, 20 N.E. 602, 604; Matter of Osborn's Estate, 150 Misc. 169, 174, 270 N.Y.S. 54, 59, 60; Matter of Hoffman's Will, 140 App.Div. 121, 130, 124 N.Y.S. 1089, 1095; Matter of Mahlstedt's Estate, 140 Misc. 245, 256, 250 N.Y.S. 628, 644; Matter of Brooklyn Trust Company, 179 App.Div. 262, 264, 166 N.Y.S. 513, 515; Hewes v. Mead, 81 Ohio App. 489, 80 N.E.2d 212.

Article 50th of decedent's will concededly embodied its residuary provisions. Hence we move to the crux of the problems presented.

The preponderant weight of authority holds that a residuary clause of a will becomes operative only after the debts, administration expenses, taxes and legacies have been fully paid and satisfied. Surrogate Foley concisely affirmed this principle in Matter of Gray's Estate, 176 Misc. 829, 831, 29 N.Y.S.2d 123, 125, 126, affirmed 266 App.Div. 732, 41 N.Y.S.2d 949, 292 N.Y. 532, 54 N.E.2d 380, where he stated that a residuary estate '* * * is what remains after deducting debts, legacies and expenses of administration'.

Language of similar purport is contained in Page on Wills Volume 4, Section 1428, pages 193, 194, where it is said:

'* * * a residue does not exist as long as there are debts which are unpaid or other legacies which are unsatisfied. Even if the will provides that a lapsed legacy shall be distributed in accordance with the residuary clause, it will be applied first to the satisfaction of other legacies.'

And in Warren Heaton's Surrogate Court Practice Volume 7, Section 69, page 446, there is this confirming statement:

'A residue is what remains of the testator's estate after debts, bequests and devises have all been deducted. The purpose of a residuary clause is to make a disposition of whatever property remains undisposed after debts and particular gifts have been satisfied.'

The leading case authority is Matter of Title Guarantee & Trust Co. (Will of Alfred T. Baxter), 195 N.Y. 339, 88 N.E. 375. There the will bequeathed a fund in trust for testator's wife, and provided that upon her death, the corpus should be paid to and become part of the residuary estate. A similar trust was created for the benefit of a daughter. The will contained numerous general legacies and the residuary clause was in favor of certain charities as well as relatives of the decedent. The assets of the estate were insufficient to pay the general legacies in full, and upon the death of the widow, the question arose as to whether the funds of which she was the life income beneficiary should be used to pay general legacies or be appropriated to the residuary estate. In language frequently quoted (195 N.Y. at pages 344-345, 88 N.E. at page 377) the court held that the funds should be used in payment of the general legacies:

'It should be assumed that the testator in framing his testamentary scheme contemplated that his property was sufficient in amount to carry it out in all details. It seems perfectly clear that the testator never anticipated that the placing of these amounts in the residuary estate would, in case of insufficient assets, lead to the abatement of general legacies and the partial destruction of his main testamentary scheme.'

The rule laid down in Guarantee Trust has been consistently followed in cases involving the disposition of reversionary trust interests where there has been a deficiency of assets to pay general legacies. Matter of Thompson's Estate, 126 Misc. 99, 213 N.Y.S. 422, affirmed 218 App.Div. 130, 217 N.Y.S. 865; Matter of Warschauer's Estate, 136 Misc. 433, 240 N.Y.S....