author: Yaw Bruwt, P. J. Barrett, J. O’Brien, J.,

text:
    Franklin D. Locke et al., Ex'rs, Resp'ts, v. The Farmers' Loan & Trust Co. et al., App'lts.

      (Supreme Court, General Term, First Department,

      Filed December 16, 1892.)

    1. Will—Tbust.
    Testator, by liis will, directed Ms executors to carry out the provisions of a certain deed of trust executed by him, but should it be deemed invalid, that they set aside from his estate a certain sum and pay the income thereon to the beneficiaries named in the trust deed, in the proportions therein named. Held, that no trust was created by the will, because the deed of trust was not incorporated therein, nor was it authenticated according to the statute of wills, and the will, by itself, made no disposition whatever of the property referred to therein.
    2. Trust—Perpetuities.
    Where a trust deed recited that the maker set apart the net income of certain stock owned by him to be received in trust, to be paid, in a certain way, to certain persons until certain events occurred, and then the income paid to two religious corporations, Held, that no valid trust was created, as it violated the statute against perpetuities.
    (O’Briem, J., dissents.)
    Appeal by Magdalen Rings and others from a decree in an action for construction of a will.

      John (?. Milburn, for app’lts ;

      Sherman JEvaris, for resp’ts.
   Yaw Bruwt, P. J.

This action was brought by the executors of the will of Jonathan Scoville, to obtain the determination of the court as to the validity of a certain trust attempted to be created by the testator by an instrument in the form of a declaration of trust, and as to the effect and validity of the will of the testator in relation to such attempted trust, and the property affected thereby. In January, 1887, the testator executed in triplicate a paper in the following words:

“ Be it remembered, that I, Jonathan Scoville, of the city of Buffalo, county of Erie, and state of New York, owner of four hundred shares of the capital stock of the New York & Harlem Railroad Company, of fifty dollars each, and evidenced, by four certain certificates thereof, numbered 21,815, 21,816, 21,817 and 21,818, respectively, have and do hereby dedicate and set apart, from and after the date hereof, in whose possession soever the said several certificates of stock may come without actual transfer, all and singular the net income and dividends hereafter to accrue and become due and receivable from time to time thereon, in trust to myself, or to any custodian in whose hands the said certificates of stock may be deposited, by me or by my order, for the like purpose, and to and for the following uses and purposes, that is to say: The said net income or dividends of the said stock, as often as received, from time to time, shall be apportioned into ten equal parts, three of which parts shall be paid over to the use and benefit of Magdalena Rings, of Buffalo, N. Y,; three parts thereof shall be paid over to the use and benefit of Anna M. Rings, of the same place ; two parts thereof shall be paid over to Henry G. Rings, of the same place, for and during his natural life; and two parts thereof shall be paid over to Minnie M. Rings, of the same place, for and during her natural life; provided, however, that in case of the decease or marriage of the said Magdalena Rings, or the decease of the said Anna M. Rings, whichever event shall first happen, then the portion so allotted to such person shall, from and after the happening of such event, be paid over to the use and benefit of the St. John’s Episcopal Church and Society of the town of Salisbury, state of Connecticut, and the portion allotted to the other shall, after her decease (or marriage, if it be the said Magdalena) be paid over to the use and benefit of the Buffalo Orphan Asylum (Protestant) of the city of Buffalo, and, upon the decease of the said Henry C. Rings, the portion so allotted to him shall thenceforth be paid to the use and benefit of the St. Vincent's Female Asylum of the city of Buffalo; and, upon the decease of the said Minnie M. Rings, the portion so allotted to her shall be thereafter paid to the use and benefit of the Buffalo Hospital of the Sisters of Charity. And it is hereby expressly provided, from and out of the said income so apportioned to the said Magdalena and Anna M. Rings, they shall each bear and pay an equal portion of the taxes, repairs, and insurance of the premises this day leased to the beneficiaries herein named. For the purposes of this instrument, the said Magdalena Rings shall be considered the guardian of the property and rights of the said Henry C. Rings and Minnie M- Rings during minority, and, upon her marriage or decease, then the said Anna M. Rings, if surviving and unmarried, shall be deemed such guardian ; otherwise, a guardian for the said minors shall be duly appointed. The right to cancel or otherwise modify this instrument, at any and all times, is hereby expressly reserved to me, notwithstanding any provision herein contained.

“ Witness my hand, this 5th day of January, A. D., 1887.

“Jonathan Scoville.”

One of the originals, and the certificates of stock mentioned in it, and which are the subject-matter of the trust, were then deposited, in a sealed envelope, in the box of Scoville in the Mercantile Safe-Deposit Company of the city of Hew York; another of the originals was delivered to the beneficiaries named in the trust; and the remaining one was delivered to and deposited with one M. A. Whitney, a lawyer in the city of Buffalo. Scoville died on the 4th of March, 1891, leaving a last will and- testament dated the 27th of December, 1890, and a codicil thereto, bearing date the 21st of February, 1891, which were duly admitted to probate, and letters testamentary issued thereon. At the time of the death of said Scoville, the deed of trust and certificates still remained in the envelope, with the seal unbroken, and deposited with the Mercantile Safe-Deposit Company. ' The sixth article of Scoville’s will refers to this deed of trust, and is as follows:

“Article Sixth. I have executed and deposited in the Mercantile Safe-Deposit Company of the city of Hew York a certain deed of trust, which affects a portion of my estate, which portion is more particularly described in a paper inclosed with such deed of trust. I direct my executors to carry out the provisions of this deed of trust, so far as they can; but, in case any unforeseen circumstances should prevent its performance and execution in full, then I direct that the sum of two thousand dollars per annum be paid by my executors to the beneficiaries named in such deed of trust, in the proportions mentioned in such deed of trust, and I direct that my executors set apart a sum sufficient to produce the net annual income of two thousand dollars, and to invest and reinvest the same, and out of the income fulfill my directions in that regard. Should any unforeseen circumstances prevent the carrying out of the terms of said deed of trust, then the securities mentioned and connected therewith are to be deemed a portion of my residuary estate (but under no circumstances, in case it is deemed invalid, shall it affect this article).”

By the codicil the Farmers’ Loan & Trust Company and one Locke were appointed trustees of the trusts expressed in or created by the said article 6 and other articles of the will. The court at special term held the deed of trust invalid as to all the beneficiaries, and from the judgment thereupon entered this appeal is taken.

It is clear that there-was no trust, valid or otherwise, created by the sixth article of the will, because the deed of trust is not incorporated in the will, and the sixth article by itself make no disposition whatever of the property mentioned or referred to therein, and it can receive no validity by its reference to the deed of trust, because such deed was not incorporated in such will; it being the law of this state that an unattested paper, which is of a testamentary nature, cannot be taken as a part of the will, even though it be referred to by that instrument In order that such a paper may have the force of a testamentary disposition of property, it must be authenticated according to the provisions of our statute of wills, and the deed of trust, not being so authenticated, cannot be sustained as part and parcel of the will. But we think that the separation by Mr. Scoville of those shares of stock from the bulk of his estate, and the execution by him of the declaration of trust (and by “ execution ” we include all that is a necessary element to a complete execution of an instrument), were sufficient to subject the shares of stock to the trusts set forth in such declaration, provided that a trust such as was attempted to be created was permitted by our statutes. As was said in the case of Barry v. Lambert, 98 N. Y., 306 :

“ It is well settled that a trust in personal property may be created by paroi, and that no particular form of words is necessary for its creation, but the words or acts relied on to effect that object should be unequivocal, and plainly imply that the party making them intended to divest himself of the interest in the property and to hold it thereafter for the use and benefit of another. This is all that is required to create a trust, even as against the owner, and although he continues to retain possession of the property devoted to the trust.”

This brings us to the question whether the trust attempted to be created was one in contravention of the statute forbidding perpetuities. A very brief examination of the deed of trust will show what the intention of the creator of the trust was. He refers to 400 shares of the capital stock of the Hew York & Harlem Eailway Company represented by 4 certificates of which he is the owner; and he," by said deed of trust, dedicates and sets apart, from and after the date thereof, in whose possession soever the said several certificates of stock might come without actual

transfer, all and singular the net income and dividends thereafter to accrue and become due and receivable, from time to time, thereon. This net income or dividends he directs to be apportioned into 10 equal parts, 3 of which shall be paid to the use and benefit of Magdalena Rings, of Buffalo, N. Y.; 3 parts thereof to the use and benefit of Anna M. Bings, of the same place ; 2 parts thereof to Henry C. Bings, of the same place, for and during his natural life ; and 2 parts to Minnie M. Bings, of the same place, for and during her natural life, with a proviso that in case of the decease or marriage of said Magdalena Bings, or the decease of said Anna M. Bings, whichever event should first happen, the portion allotted to such person should, from and after the happening of such event, be paid over to the use and benefit of a certain Episcopal Church in the town of Salisbury, Conn., and that the portion' allotted to the other should, after her decease (or marriage, if it were the said Magdalena Bings) be paid over to the use and benefit of an orphan asylum in the city of Buffalo, and that upon the decease of said Henry C. Bings the portion so allotted to him should thenceforth be paid to the use and benefit of the St. Vincent’s Female Asylum of the city of Buffalo, and upon the decease of said Minnie M. Bings the portion allotted to her should be paid over to the use and benefit of the Buffalo Hospital of the Sisters of Charity. It will thus be seen that there is no disposition of the principal forming the corpus of this trust fund ; and it is perfectly clear that there was no intention upon the part of the creator of the trust to make any disposition of such principal, because, as soon as the first beneficiaries died, the direction is that the income should be paid to a corporation, which is supposed never to die, and it is income which is treated of all the time. It is plain that it was his intention that the trust fund should be kept in solido during all this time, because otherwise there could be no division of the income into 10 parts, as is directed. It is thus manifest that the absolute disposition of the whole corpus of this fund is suspended for more than two lives in being, and such was the intention of the creator of the trust.

It is undoubtedly true that income and principal given in equal shares out of one fund, kept in solido for mere convenience of investment, may be severed, and independent trusts created for the several beneficiaries ; and thus the shares and interests will be several, even though the fund remain undivided. Schermerhorn v. Cotting, 131 N. Y., 60; 42 St. Rep., 608. But upon an examination of the facts of that case, it will be seen that the suspension of the power of alienation of the share of each of the beneficiaries was made to depend upon two lives in being, only, and it was the plain intention of the testator that the principal should descend absolutely upon the termination of such two lives in being. In the case at bar, we look in vain for the expression of any such intention. Upon the contrary, there is no provision whatever for the vesting of the principal at any time ; and the very fact that the creator of the trust provided that the second beneficiary of each one of those shares should be a corporation, and the gift is only of a certain share of income, and not of principal, shows that all that he intended to give the corporation was the income, and not the principal. It also shows the intention that none of the principal was to be released from the trust, and that only income, under any circumstances, was to be paid over. It seems to us that it is so plain that this was the intention of Scoville, that if the courts are to construe an instrument of this character as exhibiting an intention to create separate and distinct trusts, rather than to put one undivided fund in trust, then it will be impossible for the creator of a trust, however much he may desire to do so, to express any intention to have a fund remain in solido. The rule undoubtedly is, with respect to instruments of this character, that, where it can be done without violence to the intention of the creator of a trust, that construction will be given to the clause which will sustain the intended trust, rather than one that will defeat it. But where the general meaning of the language of the instrument shows that there was an intention to provide for an illegal extension of the trust term, and that any other construction will do violence to the plain language of the instrument, then the court can only found its judgment upon the manifest intention of the creator of the trust. In the case at bar, as we have already seen, it was beyond question the intention of Mr. Scoville that the corpus of this fund should remain for an unlimited period yielding income, which he gave to the numerous beneficiaries mentioned in the trust deed; and this was a clear violation of the statute against perpetuties.

The judgment should be affirmed, with costs.

Barrett, J.

The appellants say that there must necessarily be an actual severance of a proportionate part of the principal upon the death of each of" the first beneficiaries, because the gift of income to the second beneficiaries cannot take effect; such secondary gifts of income to the corporations being void. Upon this, they contend that an original severance in law is to be implied, because so much of the principal as may be thus released from the production of income must go somewhere. This amounts to saying that, even if Mr. Scoville intended no severance, and although he certainly made no provision with regard to the principal, yet the law will insist upon and declare a severance, for the purpose of sustaining the trust. This is carrying the doctrine of severance to an impossible extreme. There was here, in reality, no “ severance ” of principal, and that expression is misapplied. What the appellants mean is that, upon the death of each original beneficiary, a proportionate part of the principal will be incidentally released. But that release would not result from an original' severance, but simply from the further non-employment of principal for the trust purpose. I do not mean to say that the appellants concede that Mr. Scoville intended no severance. They do insist that his intention was to create separate trusts of properly proportioned principal. Where I essentially differ from them, however, is in finding such intention from the release of principal which may result from the void gift of income to the corporations. No such intention can be inferred from a condition resulting solely from the trustor’s illegal purpose. On the contrary, the secondary gift of income to corporations plainly indicates an intention to keep the principal permanently employed, and. to keep it, while so employed, in solido. I agree with the presiding justice that the judgment of the special term was correct, and should be, in all respects, affirmed, with costs.

O’Brien, J.,

(dissenting.)—This action is brought by the executors of the will of Jonathan Scoville, deceased, to obtain a determination of the court as to the validity of a certain trust created by the testator by an instrument in the form of a declaration of trust, and as to the effect and validity of the will of the testator in relation to such trust, and the property affected thereby. In ■January, 1887, the testator executed a paper in the following words:

“Be it remembered, that I, Jonathan Scoville, of the city of Buffalo, county of Erie, and state of New York, owner of four hundred shares of the capital stock of the New York & Harlem Railroad Company, of fifty dollars each, and evidenced by four certain certificates thereof, numbered 21,815, 21,816, 21,817 and 21,818, respectively, have and do hereby dedicate and set apart, from and after the date hereof, in whose possession soever the said several certificates of stock may come without actual transfer, all and singular the net income and dividends hereafter to accrue and become due and receivable, from time to time, thereon, in trust to myself, or to any custodian in whose hands the said certificates of stock may be deposited by me or by my order for the like purpose, and to and for the following uses and purposes, that is to say : The said net income or dividends of the said stock, as ■often as received, from time to time, shall be apportioned into ten ■equal parts, three of which parts shall be paid over to the use and benefit of Magdalena Rings, of Buffalo, N. Y.; three parts thereof shall be paid over to the use and benefit of Anna M. Rings, of the same place; two parts' thereof shall be paid over to Henry 0. Rings, of the same place, for and during his natural life; and two parts thereof shall be paid over to -Minnie M. Rings, of the same place, for and during her natural life; provided, however, that in case of the decease or marriage of the said Magdalena Rings, or the decease of the said Anna M. Rings, whichever event shall first happen, then the portion so allotted to such person shall, from and after the happening of such event, be paid over to the use and benefit of the St. John’s Episcopal Church and Society of the town of Salisbury, state of Connecticut ; and the portion allotted to the other shall, after her decease {or marriage, if it be the said Magdalena) be paid over to the use and benefit of the Buffalo Orphan Asylum (Protestant) of the ■city of Buffalo; and upon the decease of the said Henry C. Rings, the portion so allotted to him shall thenceforth be paid to the use and benefit of the St. Vincent’s Female Asylum of the ■city of Buffalo; and, upon the decease of the said Minnie M. Rings, the portion so allotted t.o her shall be thereafter paid to the ■use and benefit of the Buffalo Hospital of the Sisters of Charity. And it is hereby expressly provided, from and out of the said income so apportioned to the said Magdalena and Anna M. Eings, they shall each bear and pay an equal portion of the taxes; repairs and insurance of the premises this day leased to the beneficiaries herein named.' For the purposes of this instrument, the said Magdalena Eings shall be considered the guardian of the property and rights of the said Henry C. Eings and Minnie M. Eings during minority, and, upon her marriage or decease, then the said Anna M. Eings, if surviving and unmarried, shall be deemed such guardian ; otherwise, a guardian for the said minors shall be duly appointed. The right to cancel or otherwise modify this instrument at any and all times is hereby expressly reserved to me, notwithstanding any provision herein contained.

“ Witness my hand, this fifth day of January, A. D., 1887.

“Jonathan Scoville.”

This, with the certificates of stock therein mentioned, was deposited in the Mercantile Safe-Deposit Company, of New York; and duplicates of the trust deed were deposited with the beneficaries therein named, and with one M. A. Whitney, of Buffalo. By the sixth article of the testator’s will, he provided as follows :

“ Article Sixth. I have executed and deposited in the Mercantile Safe-Deposit Company of the city of New York, a certain deed of trust, which affects a portion of my estate, which portion is more particularly described in a paper inclosed with such deed of trust. I direct my executors to carry out the provisions of this deed of trust, so far as they can, but, in case any unforeseen circumstances should prevent its performance and execution in full, then I direct that the sum of two thousand dollars per annum be paid by my executors to the beneficiaries named in such deed of trust, in the proportions mentioned in such, deed of trust, and I direct that my executors set apart a sum sufficient to produce the net annual income of two thousand dollars, and to invest and reinvest the same, and out of the income fulfill my directions in that regard. Should any unforeseen circumstances prevent the carrying out of the terms of said deed of trust, then the securities mentioned and connected therewith are to be deemed a portion of my residuary estate (but under ho circumstances, in case it is deemed invalid, shall it affect this article).”

By a codicil to the will, the plaintiffs above named were made executors, and it was also provided as follows :

“ I make, constitute, and appoint the Farmers’ Loan & Trust Company of the city of New York, and Franklin D. Locke, of the fiity of Buffalo, trustees of each and all the trusts expressed in or created by article second, article third, article sixth, and article eleventh of my said will, as fully as if the said trust company and the said Franklin D. Locke were named as my donees or legatees in trust in said articles; and I direct my executors to do such acts as shall be necessary to effectuate this intent.”

By the eleventh article of the will, the above-named infant defendants Scoville are made residuary legatees in trust. In so far as the provisions of the deed of trust and the will are ineffectual to create a valid trust, the above-named infant defendants are entitled to share in the property covered thereby, as residuary legatees. The court decided adversely to the trust created by the trust deed and the will, and the beneficiaries mentioned therein have appealed to this court

The questions presented are: (1) Whether the will, by the sixth article, either with or without the aid of the deed of trust, creates a valid trust under the laws of this state; and (2) whether the deed of trust, by itself, creates a valid trust.

We think that article sixth of the will, standing alone, creates no valid trust, because it makes no disposition of the property mentioned or referred to therein, and is, therefore, valueless as a disposition of property. Nor do we think it receives any support, or can be upheld, by its reference to the deed of trust, because the latter cannot be regarded as incorporated in, or as a part of, the will itself. This latter conclusion follows from the rule laid down in Booth v. Baptist Church, 126 N. Y., 215; 37 St. Rep., 79, wherein the court says:

“ It is unquestionably the law of this state that an unattested paper, which is of a testamentary nature, cannot be taken as part of the will, even though referred to by that instrument.”

Disregarding, then, altogether, the will, the question still remaining for our determination is as to whether the deed of trust, by itself, creates a valid trust. It is insisted that, when taken by itself, it offends against the statute of perpetuities, and that, at most, it is but an expression of a voluntary promise or intention to do something in the future, and, therefore, does not create a valid trust. The former, viz., that the deed of trust was void, because it unlawfully suspended the power of alienation for more than two lives in being, was the view adopted by the learned trial judge. This conclusion, and the question relating to the insufficiency of the deed as a declaration of trust, may be considered together. In Barry v. Lambert, 98 N. Y., 306, it is said:

“ It is well settled that a trust in personal property may be created by paroi, and that no particular form of words is necessary for its creation ; but the words or acts relied on to effect that object should be unequivocal, and plainly imply that the party making them intended to divest himself of the interest in the property, and to hold it thereafter for the use and benefit of another. This is all that is required to create a trust, even as against the owner, and although he continues to retain possession of the property devoted to the trust.”

Following in the wake of Martin v. Funk, 75 N. Y., 134, are Willis v. Smyth, 91 id., 297; Mabie v. Bailey, 95 id., 206; Barry v. Lambert, 98 id., 300; Van Cott v. Prentice, 104 id., 45; 5 St. Rep., 654; McPherson v. Rollins, 107 N. Y., 316; 12 St. Rep., 488. Applying the above rule to the deed of trust, we think that the instrument cannot be regarded as a mere expression of a voluntary promise or intention to do something in the future, but is an explicit declaration of a trust, which, under the authorities, is all that is necessary to create the soma The power to revoke contained therein did not destroy it while it was unexercised, and Mr. Scoville died without exercising it. It is true that this declaration of trust does not deal with the principal, but with the-income. But we do not regard this as material, because no valid distinction can be made, in respect to the creation of a trust, between the principal of a fund and the income of a fund, and we agree with the appellant in his view that:

“ A person is clearly at liberty to create a trust with respect to-the property itself, or to the income derived from it, or both, and a declaration of trust which is efficacious to create a trust as to-the property itself is equally efficacious, if apt words are used, to create a trust as to the income.” McArthur v. Gordon, 126 N. Y., 597; 38 St. Rep., 667; Fagan v. Gurney, 14 N. Y. W. Dig., 468; Rosenburg v. Rosenburg, 40 Hun, 91; Stone v. Hackett, 12 Gray, 227.

We think, therefore, that the instrument under consideration was a sufficient declaration to establish a trust, and a valid one,, unless it contravenes some statute. This brings us to the consideration whether it did violate the statute against perpetuities. To decide this question, it is important, at the outset, to determine what Mr. Scoville intended to accomplish. There were 400 shares of stock, which were given to trustees, with directions-to receive the income, and divide the same into ten parts. Certain of these parts, so divided, he gave to certain persons during their respective lives, and to one until her marriage; and after the death (and, in the one case, marriage) of each of these beneficiaries, the portion so allotted to him or her waste go to a specific institution for an unlimited period of time. It should be noticed, however, that on the marriage of one,, and the death of the others of the beneficiaries, the portion allotted to each beneficiary goes to a new beneficiary, and not to the survivors among the first beneficiaries named; As said in Vanderpoel v. Loew, 112 N. Y., 167; 20 St. Rep., 654:

“ The pivotal question in this case is the inquiry whether the-testator meant to create one trust, enveloping the interests of all the beneficiaries, and holding them-in its grasp until a final or ultimate division, or whether he intended to constitute five separate-trusts, each to be measured by its own terms, and having its own several purposes to accomplish.”

Applying this test, we do not think there is here presented the case of the creation of a trust with reference to a single fund, the income of which is to be divided among four persons, or the survivor of them, as long as any of them is alive; but, as stated, upon the termination of the interest of each primary beneficiary, his-portion goes to a new beneficiary, whose interest then, for the first time, begins. It is true that there is no final and absolute gift to-any person of the corpus of the fund covered by the trust; but. we think that one of two views must be held, either one of which is inconsistent with the conclusion reached by the learned trial judge, that there was a suspension of the power of alienation with respect to the corpus or principal of the fund for more than two-lives in being. Either the gift over is valid, and the institution designated is a new beneficiary, or, if invalid, then the parties who take the residuary estate under Mr. Scoville’s will succeed: In other words, upon the death (and, in one case, marriage) of any of the first beneficiaries, the portion of the fund out of which the income was derived must go to the new beneficiary, the institution designated, or the residuary legatees, and thus that portion be severed from the general fund. As was said in Savage v. Burnham, 17 N. Y., 561, at page 571:

There is, indeed, but one fund, which is embraced in a single trust, but the interests carved out of it are entirely distinct. The trust itself is necessarily divisible as often as the beneficial dispositions of the will call for the division and separation of any portion of the estate from the residue.”

And in Schermerhorn v. Cotting, 131 N. Y., 60; 42 St. Rep., 608, the court say:

“ Income and principal given in equal shares out of one fund, kept in sólido for mere convenience of investment, may be severed, and independent trusts created for the several beneficiaries; and thus the shares and interests will be several, even though the fund remain undivided.”

It will thus be seen that the circumstance of the fund being kept in solido is not controlling ; and, where an instrument creating a trust is susceptible of two constructions, the decisions show that the court always inclines to that one which will sustain, rather than destroy, the trust, and to that end will construe the instrument as being several, in preference to regarding it as a single and indivisible trust. We think, therefore, that the appellants are right in the contention that, upon the death of each life beneficiary, the specific portion of the fund yielding the specific share of the income to which he or she was entitled is absolutely set free from any trust, and is at once subject to separation and distribution; that there is nothing in the declaration of trust requiring or permitting the fund to be kept entire during the four lives. In our view, therefore, the trusts created in favor of the Bings are not void, as offending against the statute of perpetuities.

The remaining question relates to the validity of the trust in favor of the institutions or secondary beneficiaries. As well stated by the appellants, one of two views may be taken. One is that the title to the shares of stock is vested in a trustee other than the institution to receive the income, and on the death of each life beneficiary to pay the share -of the income which was payable to him or her to the institution named during an unlimited period. If that be the true view, the trusts in favor of the institutions are invalid, as it is settled that a transfer of property to a party in trust to pay the income forever to a charitable institution, the institution not being the trustee, is invalid, as an unlawful suspension of the power of alienation. Adams v. Perry, 43 N. Y., 487; Cottman v. Grace, 112 id., 299; 20 St. Rep., 783. The other view is that the gift over to each institution is a gift of a specific portion of the income direct to the institution, without the intervention of a trustee; in which case, the gift being unlimited, as to time, it would operate as a gift of the principal. Earl v. Grim, 1 Johns. Ch., 494; Hatch v. Bassett, 52 N. Y., 359; Wells v. Wells, 88 id., 331; Garret v. Rex, 6 Watts, 14; Van Rensselaer v. Dunkin's Ex'rs, 24 Pa. St., 252; Greene v. Wilbur, 15 R. I., 251. We think, upon .the construction to be given to the deed of trust, the first view should prevail, for the reason, as stated by the learned judge at special term, that:

“ The principle that a general gift of the income of a fund, making no mention of the principal, is a gift of the fund itself, is not applicable. Hatch v. Bassett, 52 N. Y., 359. There is a mention of the principal, which is given to the trustees named, and I also think the income, subject to the duties, as to it, of division and payment.”

To this little need be added; for, while the learned counsel for the appellants, with much ingenuity, suggests that it would be a fair and reasonable construction to say that each trust terminated with the life of the beneficiary, followed by general and unlimited gifts of income to the various institutions, it will be noticed that there are no words in the instrument divesting the trustees of the title to the fund, but, on the contrary, it provides for a continua- # tian of the original trust, and the payment of the income only forever. ' Moreover, the language is not susceptible of the view that Mr. Scoville intended a general gift of the income to such institutions, but, by express language, he gave such income to trustees, who were to receive and divide the same in the manner provided in the instrument. As such a trust was invalid, we think the conclusion of the learned trial judge on this branch of the case was correct.

Plaving, therefore, reached the conclusion that the provision in favor of the Eings, the primary beneficiaries, was valid, and that relating to the institutions, or secondary beneficiaries, invalid, the the question remains as to what effect the latter will have, if any, upon the former. We think that, although the trusts created in favor of the institutions are invalid, those in favor of the Eings, being severable and legal, can stand. Underwood v. Curtis, 127 N. Y., 533 ; 40 St. Rep., 255. Upon the whole instrument, therefore, we are of opinion that a valid trust "was created in favor of one of the Eings until her marriage, and in favor of the others until their death, and that upon the marriage of one or death of any of the beneficiaries, a portion of the fund yielding the specific share of the income to which he or she was entitled should be severed from the trust, and pass into the residuary estate, and that the judgment should be accordingly modified, without costs.

Judgment affirmed, with costs.


source: Caselaw Access Project

author: Barrett, J.

license: Public Domain

text:
    Lorenz Reich, Resp't, v. The Colwell Lead Company, App'lt.

      (Supreme Court, General Term, First Department,

      Filed December 16, 1892.)

    1. Contract—Damages for delay in delivering material for building.
    In an action to recover special damages for a delay caused by defendant’s refusal to deliver at the agreed time certain material for an apartment house which plaintiff was building, the measure of damage is the difference between the reasonable rental of the building during the time of the delay, and the amount paid by plaintiff for the same period for rent, taxes, interest and attendance.
    2. Same.
    It is error to allow the" reasonable rental value of the building to be shown by the rent received from the building several years after its completion.
    3. Same—Interest.
    The damages awarded in such a case are unliquidated and uncertain, and interest should not be allowed on the award.
    Appeal from judgment in favor of plaintiff, entered on report of referee.

      Tracy, Boardman & Platt, for app’lt;

      Abram R. Kling, for resp’t.
   Barrett, J.

This action is for damages which the plaintiff claims to have sustained because of the defendant’s failure to furnish certain plumbing materials for an apartment house, which plaintiff was building at the corner of Thirty-second street and Fifth avenue, in this city. Two causes of action are set forth in the complaint,— one for failure to deliver all the materials for which the plaintiff paid ; the other for special damages for delay in delivering the materials. It is with the latter alone that we now have to deal, as the referee’s conclusions upon the former head are not questioned upon this appeal. The evidence fully justified the referee’s finding with regard to»the defendant’s delay in delivering the materials under the contract; and his general conclusion, that the plaintiff is entitled to such damages as were actually sustained by reason of the delay, is supported by the cases of Ruff v. Rinaldo, 55 N. Y., 664, and Scribner v. Jacobs, 31 St. Rep., 794. These materials were repeatedly demanded, and complaints of delay repeatedly made, but the defendant continued neglectful to the end; nay, more, it refused to deliver materials for which the plaintiff had actually paid in advance under the contract, because other materials not embraced within the contract had not been paid for. The difficulty, however, is with regard to the proof of damages. The rule laid down in the cases cited, supra, entitled the plaintiff to the value of the use of the building while he was deprived thereof in consequence of the delay. In the present case the value of such use consisted, as was said by Daniels, J., in Scribner v. Jacobs, supra, “ of what would have been , the reasonable rental of the building for the time during which ¡the delay was in this manner caused.” From this, however, should be deducted the rental paid by the plaintiff for the same period, together with his probable outlay for keeping the building up and furnishing proper attendance. The proof was entirely insufficient on this head. It was confined to the plaintiff’s testimony to the effect that the rental value of the building for the year 1887, that is, what it cost him, was about $51,000, and that he lost for four months of that year three tenants, who had agreed to pay him, in the aggregate, $il,850 per annum. There was nothing in this to show that in case the building had been ready for occupancy at the time specified, namely, May 1,1887, the plaintiff could have obtained, therefor, a larger rental during the four succeeding months, that is, down to October 1, 1887; when the building was ready for occupation, than the proper proportionate part of the $51,000, which constituted his running outlay for the year. This latter sum was the rental value of the property for the year 1887, according to the plaintiff’s own testimony; that is, it was the actual amount which he paid for rent, taxes and interest on his capital. It is true that the plaintiff also testified that the present rental value of the building was about $10,000, and that his receipts in June, 1891, when the case was on trial, for rent paid by his tenants, amounted to about $800 a day ;' but this testimony was clearly incompetent, and the exception to its admission was well taken. This exception appears at folios 110 and 111 of the case, as follows:

“ 1Q. Do you know what the rental value per day is of your hotel when occupied ? ’ Objected to as immaterial, irrelevant and incompetent, and as no proof of any damage against the defendant Objection overruled. Exception. ‘A. Yes, sir; the rental outside of the table amounts to about $800 a day; that is, estimating the receipts from the rooms.’ ”

It was expressly held in Scribner v. Jacobs, supra, that proof should be confined to the period of the delay, and that it was error to estimate the loss of rent by the rental value of the building months later. Because of the lack of proper evidence to establish the consequential damages, and because of this admission of incompetent testimony, it is impossible to sustain the referee’s report. There are other questions of a serious nature, but as they may not arise upon a new trial, we need not now consider them all. We should say, however, that it was error to allow interest upon the damages awarded. These damages were clearly unliquidated, and certainly the defendant had no means of ascertaining by computation or otherwise the amount to which the plaintiff was entitled. Mansfield v. Railroad Co., 114 N. Y., 331; 23 St. Rep., 739. We may add that, as the only ground upon which plaintiff can be entitled to recover is that the delay in furnishing the materials prevented the completion of the building at the specified time, it was competent for the defendant to show that noncompletion resulted from other causes than its delay. If, in truth, such delay had no actual relation to the failure to complete the building until the 1st of October, the defendant cannot be held for special or consequential damages which it did not cause. One Archer testified that he did the mason work and plastering on the building, and that he finished such work, as he thought, in August, 1887. We think he should have béen permitted to answer the questions put to him at folios 253 and 254 of the case, as to whether' he met with delays in his work, and whether he could have finished such work any sooner than he did. This bore upon the question whether the defendant’s delay -was material, and whether, apart from its delay, the building could have been ready for occupancy and rental during the period for which damages are claimed against it. The judgment should, therefore, be reversed, and a new trial ordered before another referee, to be appointed by this court, with costs to appellant to abide the event.

Yah Brunt, P. J., and O’Brien, J., concur.


author: O’Brien, J.

text:
    The City of Philadelphia, Resp't, v. The Postal Telegraph Cable Co. et al., App'lts.

      (Supreme Court, General Term, First Department,

      Filed December 16, 1892.)

    1. Constitutional law—Telegbaph companies.
    A city’s right to impose license fees on the poles and wires of a telegraph company within its limits, is not in conflict with the U. S. statutes in relation to telegraph companies, or with the provisions of the constitution in regard to interstate commerce, or deprivation of property without due process of law.
    2. Same.
    The ordinance of the city of Philadelphia, under which such charges were made, clearly showed that the charge was not a tax, but merely an exercise of police power by the city to reimburse itself for expenses incurred in discharging its duty, and, therefore, it was valid, although if a tax it would have been invalid by the law of Pennsylvania.
    3. Same.
    The amount of the license fee. in such cases, rests with the city council in the first instances and it is only when such discretion has been abused that the courts are justified in interfering.
    Appeal from a judgment entered upon the report of a referee in an action to determine the ownership of certain telegraph poles affected by an ordinance of the city council of Philadelphia.

      B. S. Guernsey, for app’lts;

      William Me Michael, Gliarhs F. Warwick, City Sol., and E. Spencer Miller, Asst. City Sol, for resp’t.
   O’Brien, J.

This action was brought by the city of Philadelphia to recover several annual license fees and charges imposed by city ordinances upon each telegraph pole and mile of wire in the streets of Philadelphia. The defendants conceded that plaintiff has power and authority to make and prescribe ordinances for the inspection and regulation of telegraph lines within the city limits, but denied that it has either power or authority to require the payment of any fee or charge therefor, or to charge for a license, or to make any special tax upon their property, or upon each pole or wire permitted within the city limits. This restricts the contention to the question whether a charge for such regulation and inspection is valid, and whether such a charge is an interference with the interstate clause of the United States constitution, or with the rights conferred on telegraph companies by the United States Revised Statutes, § 5263, relating to telegraph companies and the postoffice service. The appellants contend that such a tax or claim is a restraint upon the instruments of interstate commerce and communication, which is placed solely in the hands of congress by the constitution, article 1, § 8, subds. 3, 18, U. S. Const.; that the United States Revised Statutes, § 5263, grant to any telegraph company complying with certain conditions “ the right to construct, maintain and operate lines of telegraph through and over any portion of the public domain of the United States, over and along any of the military or post roads of the United States,” etc.; and that such a tax would impair and destroy the right thus conferred. In the case of Telegraph Company v. Attorney General, 125 U. S., 530, where the question was as to the right of the state to impose a tax upon the property of a telegraph company within its limits, it was held :

“ That the privilege conferred upon telegraph companies by the Revised Statutes, § 5263, carries with it no exemption from the ordinary burden of taxation in a state within which they may own or operate lines of telegraph.”

And it was further held therein that a tax upon the property owned and used by the corporation within that state

“Is not forbidden by the fact of the acceptance on the part of the company of the rights conferred on telegraph companies by the Revised Statutes, § 5263, nor by the commerce clause of the constitution.”

In the opinion of the court in that case it was said:

“ While the state could not interfere, by any specific statute, to prevent a corporation from placing its lines "along any of these post roads, or stop the use of them after they were placed there, nevertheless the company receiving the benefit of the laws of the state, for the protection of its property and its rights, is liable to be taxed upon its real or personal property as any other person would be. It never could have been intended by the congress of the United States, in conferring upon a corporation of one state the authority to enter the territory of any other state, and erect its poles and lines therein, to establish the proposition that such a company owed no obedience to the laws of the state in wrhich it thus entered, and was under no obligation to pay its fair proportion of the taxes necessary to its support.”

See, also, Telegraph Co. v. Hess, 125 N. Y., 641; 36 St. Rep., 252.

With respect to the question of interstate commerce, urged by appellants as affecting the right of the city to impose the charges, we think the authorities are abundant to show that, whether the charges in question come under the police or the taxing power, they do not offend against the interstate commerce clause. Leloup v. Port of Mobile, 127 U. S., 640 ; Gibbons v. Ogden, 9 Wheat., 203; Railroad Co. v. Miller, 17 Wall., 560; Robbins v. Shelby Taxing Dist., 120 U. S., 489; Telegraph Co. v. Pendleton, 122 id., 347.

Appellants’ further claim, that it offends against the United States constitution, in that it conflicts with the provision of the fourteenth amendment that no state shall deprive any person of life, liberty or property without due process of law, nor deny to any person within its jurisdiction the equal protection of the laws, is disposed of by the case of New York v. Squire, 145 U. S., 175.

It will thus be seen that we agree with the conclusion reached by the referee*.

“ That the state has power to impose taxes upon the property of such companies, within the state, under the laws of the state, and that a municipality, under its delegated powers from the state, can impose all lawful burdens upon the property of such companies situated within its corporate limits. Therefore, if these license charges upon poles and wires within the, pity limits should be held or found to be legally imposed by the state, they would not be in conflict with the provisions of this act of congress; or if the municipality, under its delegated power of ‘ regulation’ from the state, or what is commonly known as 1 police power,’ should be found to have the right to make such ordinances, and levy such imposts upon the poles and wires within its corporate limits of a company operating an interstate line, such ordinances and charges would not be in conflict with the act, as being neither on the general business of the company, nor an interference with such interstate business.”

This view is consistent with the principle laid down in the case of Leloup v. Port of Mobile, supra, and kindred cases, which hold that:

“ The property of a telegraph company situated within a state may be taxed by the state as all other property is taxed, but its business of an interstate character cannot be thus taxed.”

It was therein held that no state within which a telegraph company sees fit to establish an office can impose upon it a license tax, or require it to take out a license for the transaction of its business; that the telegraphic communications carried on between different states are interstate commerce, and within the power of regulation conferred upon congress, free from the control of state regulations, except such as are strictly of a police character.

A review, therefore, of the authorities will show that the true construction to be given to the constitution of the United States, and the statutes passed relating to telegraph companies, are consistent with the right of the states to tax the property of corporations within their limits, and to subject them to regulations of a police character, and that the United States constitution and statutes prohibit the states from placing any embargo tax upon business of an interstate character, or interfering with, obstructing, or destroying the working or business of such federal agencies. The record makes clear the fact that the plaintiff in no way, by the charge made, attempted to impose a tax upon business of an interstate character. The appellants, however, insist, if this conclusion should be reached, that the charge was, in effect, a tax which was illegally levied upon the property of the companies, contrary to the constitution and laws of Pennsylvania regulating the riglit and mode of taxation. In his argument he correctly presents the view which the courts of that state have adhered to in construing the method which should be adopted under the laws of that state in levying taxes, viz., upon an ad valorem principle; that is to say, that property is to be taxed at a uniform rate according to its value. If it had been shown that this was a tax, then there could be no question but this principle not having been adhered to in levying the same, would have rendered the charges in suit invalid.

We think, however, apart from the disclaimer of the respondent, it is clear that, in imposing the charge sought to be recovered in this action, the city of Philadelphia in no way intended to place a tax upon the business of the defendant companies, nor to impose a tax upon tl^pir property, but its claim is based upon its right, under police power, to levy such a charge. The validity of license fees or similar charges by a municipality under the police power has been frequently asserted, and, so far as Pennsylvania and this state are concerned, the question must be regarded as settled in favor of their validity. As we have already endeavored to point out, charges thus imposed under the police power, and those imposed for revenue, proceed on an entirely different and distinct principle; and, in cases where supposed police regulations come in question, the test must be whether the end in view is one within the regulative sphere, and whether the means are reasonably appropriate. An examination of the ordinances levying this charge, we think, will leave no room for misconstruction as to their true intent and purpose, showing clearly that such charges were for regulation, and not for revenue. The ordinance of January 6, 1881, which was the first ordinance on the subject, begins as follows:

“An ordinance to regulate the erection and maintenance of telegraph poles in the corporate limits of the city of Philadelphia.

“ Whereas, great inconvenience and annoyance have been occasioned to property owners by the placing of telegraph poles in front of their premises ; and whereas, the lives and property of citizens traveling upon the public streets and highways have been imperiled by the erection and maintenance of inadequate or unsound telegraph poles thereon, so that it has become necessary to establish a system for the proper inspection of such poles and for the regulation of the erection and maintenance thereof.”

And the ordinance of March 30, 1883, begins as follows:

“ An ordinance to regulate the introduction and use of underground conduits, wires and cables for electrical conductors in the streets of Philadelphia,” etc.

These ordinances, and the additional fact proved in the case, that all charges were removed from such wires as were placed underground, will show that the object sought was not the raising of revenue, but the reimbursement, to some extent, of the expense made necessary to the municipality in discharging its duty in furtherance of the public safety and convenience, as well as its co-ordinate duty to the defendants, of protecting their property by a proper regulation and inspection of overhead wires. So far as this state is concerned, the case of People v. Squire, 107 N. Y., 593; 12 St. Rep., 832, is authority for the view “that regulations of the character provided for in said acts are strictly police regulations, such are within the legitimate authority of the legislature to delegate the exercise thereof to municipal corporations. That the right to exercise this police power is a governmental function, which cannot be alienated, surrendered, or abridged by the legislature, by any grant, contract or delegation whatsoever.”

So far as the state of Pennsylvania is concerned, the highest appellate court of that state has twice decided these very ordinonces now brought in question to be valid. Telephone Co. v. City of Philadelphia, 12 Atl. Rep., 144; City of Chester v. Telegraph Co. (Pa., 1892), 23 id., 1070; City of Allentown v. Telegraph Co. (Pa., 1892), id. The description given in these cases of the condition of the streets confirms what the observation of every citizen makes evident, that lives and property can only be protected against the dangers threatened by overhead wires by strict regulation and the most careful inspection. In addition, we are referred to the following cases in Pennsylvania distinctly holding that the plaintiff has power to exercise police regulation over telegraph lines. City of Philadelphia v. Telegraph Co., 2 Wkly. Notes Cas., 455, 460; Railroad Co. v. Philadelphia, 47 Pa. St., 321; Branson v. Philadelphia, id., 332.

It seems to us, therefore, that, with the legal questions disposed of, all that remained was to determine whether the ordinances and the charges made were a proper exercise of the police power delegated to the plaintiff, or possessed by it; and the referee is sustained by the cases to which he refers in his opinion, in holding that whether there has been a proper exercise by the municipality of this power of regulation is to be determined by a consideration of the reasonableness of the terms of the ordinance, and of the charges imposed. This the referee proceeded to do. As to the expense entailed upon the city of Philadelphia, it was shown that, in order to have it thorough and effective, it was deemed essential to require a morning report, called an “ Electrical Report,” to be made by every policeman on duty at night, of whom there are 1,526, receiving a salary of $2.50 per day. In addition, it was shown that the appropriation for the police bureau in 1891 was over $1,000,000 ; for the bureau of fire escapes, over $600,000; and for the electrical bureau, over $140,000; and that these different bureaus were engaged and took part in enforcing the regulations and ordinances in question, in the public interest. It was also given in testimony by the chief of the fire bureau that if the wires were put underground there would be a saving of one fire station, whose expense annually is about the amount of the total charges on all the companies. Upon such testimony, having regard to the extensive area of a city like Philadelphia, and the range of work and expense involved in the regulation of poles and wires, we think the referee was right in holding that, contrasted with the large outlay made by the municipality, the amounts charged the defendants, and sought to be recovered in this action, are reasonable. We think that the supreme court of appeals in the case of City of Allentown v. Telegraph Co., supra, in considering the particular charges in these ordinances, correctly defined the rule of law to be applied, viz.:

“ The amount of the license fee, in such cases, rests with the city council in the first instance. It is only when such discretion has been abused that we are justified in interfering. We cannot say that discretion has been abused in this case, or that the license fee is unreasonable.”

It will thus be seen that we concur with the view taken by the referee as to the reasonableness of the charges imposed on the defendants. Indeed, we might well have allowed this judgment to stand upon the able opinion of the referee, which thoroughly discusses every question that has been presented upon this appeal. It would serve no useful purpose to go over the same ground, refer to the same authorities, and draw the same conclusions as the referee has done. Though the question, in principle, is an important one, we do not regard it as either novel or difficult. An examination of cases in the United States supreme court, and in the highest appellate courts of this state and Pennsylvania, supports the legal principle invoked by the plaintiff ; and the evidence adduced in this case sustains the conclusion of the referee favorable to plaintiff’s right to recover. In our opinion, the judgment should be' affirmed, with costs.

Yan Brunt, P. J., and Barrett, J., concur.


author: Barrett, J. O’Brien, J. Van Brunt, P. J.

text:
    Leon Blum et al., App'lts, v. Herman Munzesheimer, Resp't.

      (Supreme Court, General Term, First Department,

      Filed December 16, 1892.)

    Sale—Evidence—Charge.
    In an action for goods sold and delivered, the sole issue was whether one Z. was the defendant’s agent in purchasing the goods. Defendant in- . traduced in evidence, over objection and exception, contracts between Z. and third persons for the re-sale of the goods. This fact the judge adverted to in his charge as “ a very strong circumstance ” tending to show that the contracts were Z.’s, and not the defendant’s. Held, that, although no exception was taken to the charge, the original introduction of the evidence was erroneous and the injury thus done was accentuated by the charge and necessitated a reversal.
    (Yon Brunt, P. J., dissents.)
    Appeal from a judgment entered upon the verdict of a jury, and from an order denying a motion for a new trial upon the minutes, in an action to recover an alleged balance claimed to have arisen on account of goods sold and delivered.

      Nathan Bijur, for app’lts ;

      Blumensiiel & Hirsch, for resp’t
   Barrett, J.

The sole question here is whether one Zuckerman was the defendant’s agent in purchasing the goods, for the price of which the action was brought. There is no question as to the amount due, nor as to the assignment to the plaintiffs. Hone was made at the close of the trial, and the learned judge, in Ms charge, distinctly told the jury that if the agency was made out, their verdict should be for the plaintiffs for the specific sum claimed in the complaint; otherwise, for the defendant. Consequently, exceptions taken at stages of the trial when proof of the claim was being put in need not be considered. There was no direct proof of the agency, and the plaintiffs relied upon admissions thereof, which several witnesses testified had been made to them by the defendant. These admissions were denied, and the question of veracity was submitted to the jury, who found for the defendant. We are asked to set this verdict aside, as against the weight of evidence, but, after examining the entire record, we see no reason for disturbing the decision of the jury.

The appellants also present questions of law. The principal point is as to the rejection of testimony. They examined the defendant’s brother, Max Munzesheimer, and sought to prove Zuckerman’s agency by him. Max Munzesheimer was a salesman in the employ of the plaintiffs’ assignors. He was examined by commission, and in his testimony thus taken he professed ignorance as to the agency sought to be established. The plaintiffs then issued a second commission, and endeavored to induce the witness to reconsider his former testimony. It seems that, prior to the commencement of this action, the witness had made an affidavit which was in the possession of the plaintiffs’ attorney. This affidavit does not appear in the case, but we may assume, from the tenor of the inquiry, that it either contradicted the witness, or indicated knowledge upon points with regard to which he expressed ignorance in his testimony. The plaintiffs’ counsel, upon the execution of the second commission, called the witness’ attention to this affidavit, and asked him to refresh his memory therewith, and explain any difference between the statements therein made and his answers given upon the execution of the first commission. This was objected to, and the objection was sustained. So far as the inquiry had for its object the impeachment of the witness, the objection was well taken. There was here no surprise. The counsel knew what had been testified to upon the first commission when he read the witness’ deposition therefrom. If that testimony was put in solely for the purpose of subsequent impeachment, it is quite clear that the rulings with regard to the affidavit were correct. Proof of prior contradictory statements by an adverse witness is one of the cases in which impeachment is prohibited. Becker v. Koch, 104 N. Y., 394; 5 St. Rep., 688. It is true that where a party is taken by surprise, by unexpected testimony, he may be permitted to interrogate the witness in respect to his own previous declarations inconsistent with his evidence. Bullard v. Pearsall, 53 N. Y., 230. This, as was held in the latter case, is for the purpose of probing his recollection, and, by showing the witness that he is mistaken, inducing him to correct his evidence, or, by recalling to his mind the statements previously made, drawing out an explanation of his apparent inconsistency, and also for the purpose of showing the circumstances which induced the party to call him.” Here, however, the plaintiffs were not taken by surprise upon the trial. If they were surprised upon the execution of the first commission, they were not bound to introduce the adverse testimony thereby elicited. Having done so, they certainly could not introduce the prior affidavit of the witness upon any plea of surprise.

It is contended, however, that the questions propounded to the witness upon the second commission were not for the purpose of impeachment, but to refresh his memory and to elicit the truth. In the earlier questions put to the witness upon the execution of the second commission, he was not asked to examine the affidavit, and then to state whether he adhered to his original testimony, or whether, after refreshing his memory, he had any explanation to give of such original testimony. It seems that two pages of the affidavit were actually embodied in the question first propounded to the witness, and he was asked to note particularly the statements thus read to him, to refresh his memory therefrom, and to explain any difference there might be between these statements and certain answers (also embodied in the question) given by him on the former commission. Thus, if counsel had been permitted to read these pages of the affidavit as part of the interrogatory, the witness’ contradictory statements would have been placed before the jury under pretense of seeking an explanation of their difference. A specific objection was interposed to the reading of the affidavit before the jury for the purpose of contradicting the witness, and that objection was not met by an offer to omit the reading, nor even by a suggestion that the purpose was not to contradict the witness. The plaintiffs’ counsel contented himself with reading the remainder of the question, and excepting to the same ruling thereupon as had already been made with regard to the reading of the affidavit. This, however, was followed by an interrogatory which, after reciting that the object of the commission was to explain the difference between the affidavit and the former answers, requested the witness 11 to make such explanation as full and detailed as possible, with a view of eliciting correct answers, and thus establishing the truth, and to state in what respect, if any, you were mistaken in your answers on the former commission, and, if possible, why you were mistaken.”

This question was also objected to, and the objection was sustained, to which ruling the plaintiffs excepted. This latter interrogatory was not objectionable, and we think the plaintiffs were entitled to read the answer thereto. The affidavit referred to was not embodied in the .interrogatory, nor did the question suggest impeachment. The substance of it was a request that the witness examine the affidavit annexed to the commission, and, having thereby refreshed his memory, say whether he was mistaken in his former testimony, and, if so, in what respect. He was simply called upon, after reading his affidavit, to give correct answers and to tell the truth. This did not necessarily involve impeachment. There were several important facts as to which in his previous testimony he had merely expressed a want of knowledge. He might well have testified, in answer to the interrogatory under consideration, that after examining the affidavit he then remembered facts which he had forgotten when previously examined. So far as this interrogatory is concerned, the plaintiffs pursued a proper course. They were bound to read the testimony adduced upon the first commission, as it was a necessary foundation to the interrogatory thus propounded. That interrogatory did not seek to discredit the witness. It rather invoked candor and honesty. The witness, in answer to the interrogatory, might well have said that after his affidavit he remembered certain facts, which he had previously forgotten, tending to show Zuckerman’s agency. Such facts would have been proper for the consideration of the jury, and the witness’ present recollection of them would not necessarily have reflected upon his previous forgetfulness.

There are other exceptions which would also have necessitated a new trial. The goods in question were purchased to enable the vendee, whether he was Zuckerman or the defendant, to fulfil certain outside contracts with strangers to the action. We think the defendant should not have been permitted to introduce these contracts for the purpose of showing that Zuckerman was the contractor named therein, nor should the learned court have adverted to that fact as a very strong circumstance ” tending to show that the contracts were Zuclcerman’s, and not the defendant’s. When the latter observation was made, the plaintiffs’ counsel suggested, in substance, that these contracts were foreign to the controversy; to which the learned judge responded: “ I understand that. They are the contracts which Zuckerman made, upon which he got these supplies and materials, and for which you now seek to render the defendant liable.” The practical effect of these observations was to put it to the jury that, as Zuckerman was the apparent principal in the outside contracts, he probably purchased the goods in question as principal also; that is, to enable him to fulfill such outside contracts. The judgment and order denying the motion for a new trial should, therefore, be reversed, and a new trial granted, with costs to the appellants to abide the event.

O’Brien, J.

I think it was error to admit the contracts between Zuckerman and the Missouri Eailroad Company in evidence over plaintiffs’ objection and exception. The injury thus done was accentuated in the charge, wherein these contracts were referred to as a circumstance militating against plaintiffs’ claim. Although no exception was taken to this part of the charge the exception to their original introduction was good, and should be sustained. Upon this ground I concur in the result reached by Mr. Justice Barrett.

Van Brunt, P. J.

(dissenting.)—I dissent. The question assumed that there were differences between the affidavit and the answers of the witness, and as the affidavit is not, and could not be, before the court, there was no ground for the assumption, and the question was properly excluded. As to the charge, there is no exception raising the question as to the correctness of the charge, and no attempt was made to call the judge’s attention to what is now claimed to have been error.

Judgment and order reversed and new trial granted, with costs to appellants to abide the event.


author: Yan Brunt, P. J.

text:
    Emilie Riendeau, Resp't, v. Henry A. Vieu, Ex'r, App'lt.

      (Supreme Court, General Term, First Department,

      Filed December 16, 1892.)

    1. Pleading—Foreign law.
    In an action on a contract executed in Canada the complaint originally contained no allegationin respect to the law of Canada, but on the trial it was amended by alleging “ that the said contract was made, and subject to, and governed by, the laws of Lower Canada, * * * and that, under said law, the plaintiff is entitled to the relief hereinafter prayed for.” No testimony was offered to show whether the law was statutory or common, or what were its provisions. Held, that the omission to properly allege or prove the law was fatal to the judgment entered on a verdict for plaintiff.
    2. Same—Amendment.
    In such case, it is error to allow, on the trial, the amendment to the complaint in regard to the Canadian law; it should he done on motion at special term, and the defendant allowed to answer.
    Appeal from a judgment entered upon a verdict, and from an order denying a motion for a new trial in an action to recover the sum of £375, claimed under a contract of marriage alleged to have been entered into by the plaintiff and one Eustache Riendeau, in Canada, in the year 1846.

      0. Roremus, for app'lt;

      Richard O'Gorman (Robert Weil, of counsel), for resp’t.
   Yan Brunt, P. J.

This action was brought to recover the sum of £375, claimed to be due under an antenuptial contract, alleged to have been entered into between the plaintiff and one Eustache Riendeau, in Canada, in the year 1846. The validity and interpretation of the contract, therefore, depended upon the law of Canada. The complaint originally contained no allegation in respect to the law of Canada. That such allegation was necessary in order to permit proof of such foreign law seems to have been finally recognized by the plaintiff, who, upon the trial, moved to amend the complaint, and was allowed to so amend, against the objection of defendant, by alleging:

“ That said contract was made, and subject to, and governed by the law of Lower Canada, known as ‘ Contume de Paris/ and that it is governed by said law both as to validity, execution and interpretation, and the rights of the parties thereunder, and that under said law the plaintiff is entitled to the sum of £375, and to the relief hereinafter prayed for.”

This allegation was clearly insufficient, even if the court should have permitted so radical an amendment upon the trial. It was not alleging the law. It was not alleging what the law was, and then leaving it for the court to judge what the plaintiff was entitled to under it. But it was simply the allegation of a conclusion of the plaintiff’s right to recover, bringing it directly within the objection so pertinently pointed out in the case of Rothschild v. Rio Grande Western R. Co., 59 Hun, 454; 37 St. Rep., 44. And, furthermore, upon an inspection of § 942 of the Code, it appears that it may be necessary to allege whether the foreign law is a statute law, or unwritten or common law, because the modes of proof are different and distinct The evidence, in respect to the existence of the law, was equally objectionable. The witness determines as to whether the law is complied with, and not the court

He testifies as to what the objects of the contract were, and what the plaintiff was entitled to thereunder, and that he considers the contract has been made and executed according to the laws of Lower Canada at the date of the passing thereof. He does not state what the Canadian law is, and leave the court to judge as to whether it has been complied with. He does not state whether the Canadian, law is statutory or unwritten or common law, which was necessary in order that it might be ascertained whether his evidence, under any circumstances, could be competent or not. This error seems to have pervaded the whole case, and the witnesses upon the part of the plaintiff determined as to whether the plaintiff is to recover, and not the court and jury.

It is not necessary to discuss at length the various other objections presented upon the argument of this appeal, many of which are well taken, because the error to which attention is called permeates the whole case, and is fatal to the judgment which has been recovered. We think, also, that if the plaintiff is to be allowed to amend her complaint it should be done upon a proper motion made to the special term therefor, and the defendant allowed to answer. The judgment should be reversed, and a new trial ordered, with costs to the appellant to abide the event.

O’Brien and Barrett, JJ., concur.


author: O’Bbien, J.

text:
    Jirah I. Foote et al., Ex'rs, Pl'ffs, v. Lucy F. Bruggerhof et al., Def'ts.

      (Supreme Court, General Term, First Department,

      Filed December 16, 1892.)

    1. Executors and administrators—Accounting.
    Testator, by his will, directed that his estate be divided equally among his children living at his death, such shares to be paid to each child on attaining majority. By a codicil, the executors were given discretion to postpone, for any period not illegal, the payment of the principal of any such share to which such one may be entitled after he becomes twenty-one years of age, and pay only the income therefrom. Testator left five children; the executors accounted and distribution was decreed, the estate being divided into five equal shares, and the executors ordered to file vouchers “for all payments to be made by them under this decree, especially the voucher from themselves as testamentary guardians, when they shall be, and hereby are dischargéd, as such executors until the further order of this court.” Held, that as the estate was never actually divided, it must be accounted for by the executors in different capacities, and as, upon such an accounting, a construction of the codicil would be necessary, the case presented such special facts as would enable the executors to maintain an equitable action for an accounting.
    2. Will—Suspension op power op alienation.
    The provision of such codicil, giving the executors discretionary power to postpone,for any period not illegal, the payment to any child of the principal of his share after he becomes of age, was valid, as it simply might suspend the power of alienation during the lifetime of such child.
    3. Executors and administrators—Commissions.
    Plaintiffs, in such case, are not entitled to commissions upon the same fund held by them, over the same period, in the double capacity of guardians and trustees.

      4. Same.
    Plaintiffs should not be deprived of their commissions because they neglected to make an actual division of the estate into separate funds in accordance with their directions.
    5. Same.
    Each beneficiary is entitled to his proportionate share in the income realized from the investment of the entire fund, less such amounts as can be shown, by the executors, to have been paid to them or for their account, and for which such executors are justly entitled to a credit.

      Appeals from interlocutory judgment in action by executors for an accounting.

      Maclay & Forrest, for pl’ffs ;

      John Henry Mann, for def’ts,
    Lucy F, Bruggerhof, individually and as administratrix, Margaret B. Scrugham and Bessie M. Govell; Robert P. Getty, Jr., for deft Bay F. Otis.
   O’Bbien, J.

This action was brought by the plaintiffs for an accounting in respect to the estate of Horatio N. Otis, deceased. The defendants are the four children of the deceased and the administratrix of a deceased child. Horatio N. Otis died May 7, 1881, leaving a will, which was thereafter proved before the surrogate. In addition to their letters testamentary, the plaintiffs also received letters of testamentary guardianship of the persons and estates of the defendants, Lucy F., Bessie M. and Bay F. Otis, who were under age when the testator died. By his will the testator disposed of his estate as follows :

“ Third. I direct that all my estate that shall remain at the time of my decease shall be divided into as many equal shares as I may leave children surviving me ; provided, that the issue living, at the time of my decease, of any deceased child of mine shall take a share such as the parent of such issue would have taken if living, and I give, devise and bequeath to each of my children that shall survive me, one of such shares, and one share to such issue of each deceased child. * * * Fourth. The portions above provided shall be paid over by my executor and executrix to the several legatees upon their attaining the age of twenty-one years, and not before; provided, that my executor and executrix shall have the time allowed by law for the settlement of my estate, and except as hereinafter provided.”

Subsequently, by a codiciLto said will, it was provided :

“ Second. I direct my executor and executrix named in my said will, and I hereby declare my said executor and executrix shall have a discretionary power to postpone, for any period not illegal under the laws of this state, the payment to any legatee or devisee of the principal of the share, or any portion thereof, to which such one may be entitled under my said will after such one becomes twenty-one years of age, if, in the judgment of either said executor or executrix, such postponement shall be deemed best for such legatee or devisee, but said executor and executrix shall keep such share, or part thereof, remaining in their hands invested, and such legatee or devisee shall be entitled to receive the income annually from the same.”

In 1888, plaintiffs accounted as executors before the surrogate, and thereafter a decree was made judicially settling their accounts, by which it was found that there was an actual balance in the executors’ hands of the sum of $196,805.68 in cash and securities, and decreeing the distribution thereof in the following language: “ Said amount is hereby divided into five equal shares of $44,887.29 each." Then follow provisions ordering, with respect to the share of each of the persons, that the said executors pay over, retain, and invest the said shares, and concluding with the following paragraph:

“It is finally ordered, adjudged and decreed that said executors file in this court vouchers for all payments to be made by them under this decree ; especially the vouchers from themselves as such aforesaid testamentary guardians, when they, the said executors, shall be, and hereby are, discharged, as such executors, until the further order of this court.”

Since the decree the plaintiffs have never actually separated or divided the fund into the shares to which the five children were entitled, excepting so far as payments of portions of said shares to such persons have effected a separation. Neither has there been a separation or division of the income received from the estate after the accounting proceedings of 1883. But it would appear that the same were used in the expenses of running the household, the members of which household were all the testator’s children, for parts of the time, and also the expenses of educating the children, and for traveling and other similar expenses. It is conceded that the plaintiffs still hold, in its undivided state, portions, if not all, of the shares found by the decree of 1883.

Although many questions are suggested, four principal ones only need be considered: (1) Can the action be maintained? (2) Did the testator, by the codicil, suspend the power of alienation for a period longer than two lives in being? (3) What compensation should the plaintiffs receive? And (4), as incidental thereto, what effect would the retention of the fund, without actual division, have upon such right?

In Blake v. Barnes, 12 N. Y. Supp., 69, which, upon this point, was affirmed by the general term of this court, 45 St. Rep., 130, it was held that a court of equity will not assume jurisdiction of an action for an accounting by executors, disconnected from the enforcement of a trust, unless special reasons are assigned and facts stated to show that complete justice cannot be done in the surrogate’s court, and it is not enough to allege the special facts, but they must be true, and must be established by competent testimony, and that, if any such special fact is established, then the court will assume jurisdiction of the estate, and, in the general accounting, “ will not limit the relief to the single fact which appropriately brought the case within its jurisdiction.” We think in this case that such special facts are made to appear, in that, among other things, the fund, which has been held intact by the plaintiffs, is to be accounted for by them in different capacities, and that upon such accounting a construction of the provisions of the codicil is necessary.

In regard to this last question, the learned judge at special term was of opinion that the provisions of the codicil were void, for the reason that therein the testator suspended the power of alienation during the lifetime of the survivor of three persons. This, we think, was error, as a brief consideration of the provisions of the codicil, taken in connection with the provisions relating to the division of the fund, will show. The testator, in effect, provided for a distribution of his estate into five equal shares, one share to go to each of his children living at his death, and to the issue of any deceased child, the same to be paid over upon such child attaining the age of twenty-one years. By the codicil a discretionary power was conferred upon his executor and executrix “to postpone, for any period not illegal under the laws of this state, the payment to any legatee or devisee of the principal of the share, or any portion thereof, to which such one may be entitled under my said will, after such one becomes twenty-one years of age;” such share to be kept invested, and the legatee or devisee to receive the income annually upon the same. This did not suspend the power of alienation, as assumed by the learned trial judge, during the lifetime' of the survivor of three persons, but made it dependent upon the life of one, namely, the beneficiary alone; because it is evident thaf, while the executors were not obliged to pay over the principal of any one of the shares upon the child to whom such share belonged arriving at age, still there was no possibility of its being' suspended beyond such life. ' It is true that, during the life of the beneficiary, the executor or the survivor could exercise such discretion by withholding, after the child attained its majority, the principal, and keeping it invested, paying over the income annually. But it was not intended to hold, and the idea is expressly excluded of holding, the fund beyond the life of such beneficiary. As, therefore, there was but one life in being during which the power of alienation was suspended, even assuming the executors to have exercised their discretion by withholding the fund during the life and until the death of each beneficiary, the provision was valid and lawful, and, in accordance with the intention of the testator, should be made operative.

The most difficult question relates to the compensation to be awarded the plaintiffs. It appears that, as to the portion of the estate to which the minors were entitled, the decree of the surrogate in 1883 provided that the plaintiffs should hold it as testamentary guardians; and, with reference to tfie shares belonging to the adults, the question is presented whether the plaintiffs took the same and continued to hold it as executors or testamentary trustees. With respect to the fund not embraced in the decree of the surrogate of March, 1883, we think the trial judge was right in holding that the plaintiffs are entitled to commissions, as executor and executrix, upon such funds. He also held that they were entitled “ to commissions, as trustees, on the share of each child, until the child reached the age of twenty-one, and to commissions, as guardians, on the money expended for the benefit of each child during its minority.” If, in awarding commissions upon the share of each child, the learned judge intended to include all the commissions to which they were entitled, not alone for holding and investing, but also for paying over to each of the minors, then we think the conclusion reached by him was correct; because, as trustees, they would be entitled to one-half commissions for holding, and one-half upon paying over the trust funds.

Inasmuch, however, as the executors are vested with discretionary power, and they have not determined upon its exercise in favor of the former minors, who have now all reached majority, we do not think that they should receive, until they have exercised their discretion, more than half commissions ; the payment of the other half being reserved until such time as the share is actually delivered to the beneficiary. To allow them, however, in addition, commissions as guardians on the moneys expended for the benefit of each child during its minority, we do not think warranted; for the reason that, if we assume that since the decree of the surrogate in 1883 the plaintiffs have held the fund which belonged to each minor as testamentary guardians, and not as trustees, they could only claim commissions in one capacity and not in both, for the performance of exactly the same service by the same persons. While, therefore, there might be a question in what capacity commissions should be allowed, we think it reasonably free from doubt that they should not be allowed in both capacities, upon the same fund, held by the same persons, over the same period. In this view as to the right of compensation to be paid the plaintiffs, we are discussing their right to commissions upon the fund, as distinguished from the income. With respect to the income, they are entitled, of course, to commissions, upon paying over the same, at the statutory rate.

As to the failure of the plaintiffs to make an actual division or separation into different funds, and their failure to so hold the same separate and distinct, we do not think, in view of the authorities, that this is a controlling consideration upon the question of compensation. As was said in Blake v. Blake, 30 Hun, 471:

“ The actual division of the estate into five parts is not necessary to initiate the trust. It is for the mutual benefit of all that the estate was kept together, and no one objected at the settlement that there was no actual division. Legally, it is divided. The shares ate separate, and each gets his proper income therefrom." See, also, Laytin v. Davidson, 95 N. Y., 263.

These views as to the compensation to be awarded plaintiffs upon the shares of the minors should also control as to their right to half commissions, as testamentary trustees, upon the shares of Bradford and Margaret, who were adults, and whose shares, under the discretion vested in the plaintiffs, were retained and invested, and to their right to the other half upon their paying over, at any time, the principal of the fund. It will thus be seen that we think the learned trial judge erred in not allowing commissions to the extent of one half upon the shares held by plaintiffs for Bradford and Margaret, and in disallowing commissions upon the annual income of each share held by them in trust, at the statutory rate. Should it, upon the accounting, be shown that the plaintiffs, as executors or trustees, were guilty of any waste or of any wrongdoing, this would affect the question of their right to commissions; and we think that the question as to what commissions should be paid might well have been left until the termination of the account, when, with all the facts before it, the court could fix their compensation. The trial court, however, having gone into the question, we have deemed it proper to state what we regard as the general rules relating to compensation of executors and trustees.

Another conclusion reached by the learned trial judge, we think, should also be modified, namely, that requiring that the plaintiffs should account for each share as a separate and distinct fund, without reference to any other fund ; because upon the trial it appeared, and he so found, that there never was an actual division into shares by the plaintiffs, but that they held the entire fund together. Thus it would be a physical impossibility for them to present accounts having reference to each share, as though there had been a separation, and each share had been separately administered upon by them. This fact, however, that there was not an actual separation into separate and distinct funds, should not prei vent each of the beneficiaries receiving, in the accounting to be had, a statement of the disposition made of the property belonging to each of them. In other words, where executors, without objection, and for the mutual benefit of all interested in the estate, retain the entile fund, and invest the same generally, without reference to each separate beneficiary, each would be entitled to his proportionate share, as his interest might appear, in the income realized from the investment of the entire fund. This, upon an accounting, they would be entitled to receive, less such amounts as it can be shown by the executors have been paid to them, or for their account, and for which such executors are justly entitled to a credit. In accordance with these views, we think the interlocutory judgment should be modified, with costs to the executors, to be paid out of the estate.

Yan Brunt, P. J., and Barrett, J., concur.