Warner v. . Durant

Folger, J. This case presents the question, whether a legacy became vested in the legatee in his life-time, though he died before the time fixed for the payment. It is a general principle, that where the gift is absolute, and the time of payment only, postponed ; time, not being of the substance of the • gift, but relating only to the payment, does not suspend the. gift, but merely defers the payment. This principle will not act in this case to vest the legacy; for the gift was not, in the outset, to the legatee; and another rule is to be noticed. It is this: Where there is no gift but by a direction to executors or trustees to pay or divide, and to pay at a future time, the vesting in the beneficiary will not take place until that time arrives. Here the gift was at first to executors, to hold in trust for five years ; and at the expiration of that period, to pay over to the legatee. But this rule does not- act in this case ; for there has been a distinction grafted upon it. It is this : Where the gift is to be severed instanter from the general estate, for the benefit of the legatee ; and in the meantime, the interest thereof is to *137 be paid to him; that is indicative of the intent of the testator that the legatee shall, at all events have the principal, and is to wait, only for the payment, until the day fixed. We may treat the will as though there were in the thirtieth clause of it but one bequest, that to Oliver Blush. Though that legacy is provided for, in connection with many others, it docs not depend upon them, nor is it affected by them. It.is named with them, in the same clause, to save from prolixity, inasmuch as the same form of words would do for all. The taking of the fund needful for all the bequests out of the residue of the estate, is the taking out also the fund needed for each of them. So treating it, it is as if the testator had directed that $15,000 worth of his personal property, invested in a specified manner, be held in trust by his executors for five years, and at the end of five years, be paid to Oliver Blush. The gift, though made to the executors in the first instance, is at once severed from the bulk of the estate, and made a distinct fund. But there is, as far as we have gone, no gift to Oliver, save in the direction to pay, at the end of a given time. The will however continues, and directs that there be paid annually to the legatee seven per cent interest upon the $15,000. Thus it appears that the property given is severed at once from the general estate, for the benefit of the legatee. The interest upon it is to be paid to him, for the time it continues to be held in trust. Such seems to us the meaning of the testator, and that the indication therefrom is that the legacy should vest at once, and the time of payment alone be postponed. It is urged that the interest to be paid is not necessarily that, and that alone, which shall be had from the $15,000. The reason given for this claim is, that it could not have been certain, when the testator made his will, that that sum, invested according to his direction, would always yield interest at seven per centum per annum, the rate named by him ; and that if it did not, that then what it lacked in yielding, at that rate, would need to be made up from the residuum of the estate. It is then urged, that as this would be paying the *138 interest from other property of the estate, and not from the legacy alone, it would not bring this case within the distinction above noted. It has been held, that if the intermediate gift of -interest is not co-extensive with the whole amount of the interest on the legacy provided for, or is made out of another fund, the legacy will not vest, before the day fixed for payment of the legacy itself. (Watson v. Hayes, 5 Myl. & Cr., 125; Batsford v. Kebbell, 3 Ves. Jr., 363.) But if it be granted that it has turned out, or might have turned out, that interest at the named rate was not yielded by the securities in which the money given was invested ; yet was not all that they did yield given to the legatee ? Is not that a gift of the whole interest received from the legacy ? So much of the seven per cent as was yielded by those securities was not to be got from another fund ; and if any part of it was, it did not alter the fact that all of the interest that was derived from them was to be paid to the legatee, and to be paid to him as the interest from or upon his legacy. But aside from that view; the direction is to pay to the legatee seven per cent interest on the amount of the legacy. Wherever the money was to come from with which to make the payment, the sum which was to be paid as interest, was one to be made at that rate of interest on the principal sum bequeathed. And it is that same principal sum, on which an amount of interest at that rate was to be paid, which was to to be paid over at the end of five years. Thus the legacy and the interest on the legacy, were connected in the will, as gifts to the legatee. It was the income which the legacy was capable, at the legal rate, of yielding ; a sum which the use of money to that amount was yearly worth, that was to be paid yearly to the'legatee. It was to be paid as and for the interest on the amount of the legacy. Even if the payment directed is not called interest, but the sum to be paid is precisely what the interest on the amount of the legacy would be, and such payment is to cease when the principal of it is paid, it is, in effect, so as to bring the above mentioned distinction into operation," substantially the same as if it was named in the *139 will as strictly the interest on the legacy: (Fuller v. Winthrop, 2 Allen, 51.) The distinction is based, not upon the fact that the income which the particular legacy really yields is directed in the interim to be paid to the legatee, but on the fact that an amount equal to all which it is capable of yielding, or may be expected, in the use of legal methods, to yield, is thus given; In re Hart’s Trust, 2 De Gex & Jones, 195. It is the giving, ad interim, directly and at once to the legatee, of the whole yearly profit of the legacy, which indicates the purpose to be to vest the legacy at once. Moreover, we are of the opinion that the testator meant to give to the legatee the interest which for the five years was derived from that specific $15,000. It is an interpretation of the will, which we cannot adopt, that finds an intention that interest shall be paid yearly at the rate named, whether or no the specific property set aside does yield income at that rate. The $15,000 is to be got from a kind of property which we may assume yielded interest at that rate, at the time when the will was executed. The executors were directed to hold that property as it then was, for the five years of their trust; though there was a further direction, that if any of the investment fell in, another kind of security should be obtained. That kind was not one necessarily yielding a lower rate of interest. We see no indication in the will that the testator had in his mind that any portion of his estate, other than this specific property, would be called upon to keep up the interest upon the amount of this legacy at the rate named. In whatever view the will is placed, there is indicated the purpose that Oliver Blush, the legatee, shall have a yearly sum, to be measured by the amount of income which the legacy given to him will yield, at interest at seven per centum per annum. He is to have the immediate benefit of the profit which that sum is likely to yield each year ; and is to have it continuously, yearly, until the time fixed for payment arrives. So also, all the probabilities existing when the will was made were, that the principal sum given would of itself, unaided, yield the annual amount thus to be paid, *140 and yield it in the particular shape named ■, that is, in interest. There was then a gift, though to executors in the first instance, of specified property at once to be severed from the bulk of the testator’s estate for the benefit of the legatee, to be paid to him at the end of five years ; and, in the meantime, the interest thereon to be paid to him. The intent of the testator, thus indicated, was, that the legacy should vest in Oliver Blush at once. The appellant puts some reliance upon other clauses of the will, as indicating an intention different from that which we have deduced. Thus the testator made to Oliver Blush a bequest of $10,000, to be paid to him within one year after the testator’s death, He also devised to him valuable real estate, with the appurtenances and fixtures, to be enjoyed by him at once. It is argued from this, that if the testator had meant that Oliver Blush should have a vested interest in the $15,000 legacy, he would not have deferred the payment of it for five years, and given it in trust for the meantime, but would have given it to Oliver at once. This difference in the terms of the íavo bequests and the devise is not in itself conclusive. It might have been caused by a consideration of other circumstances. This legacy was to be got from a specified kind of securities ; and it may be that the testator did not Avant them called in at once. But there is a more convincing circumstance than that. The same thirtieth clause contains bequests, in large sums, to three legatees, Avho are also named as the residuary legatees of the testator. If the legacy to Oliver Blush Avas not vested at once, then the legacies to those three Avere not. But if the legacy to Oliver Blush was not vested, in some Avay, Avhat became of it on his death ? It fell into the residuum of the estate, and went to those three residuary legatees. But the legacies to them, in the thirtieth clause, ■ are given in the the same terms as that to Oliver. If then they had died before the end of the five years, the legacies to them were not vested, if that to him was not. These legacies too, on their death, would have fallen into the residuum, and with *141 what result ? To go, with the residuum, to the representatives of the three in whom they had not vested. It is not to be supposed that the testator, if he had the forecast to so frame his bequests as that these legacies should not vest, would have carelessly defeated his own purpose, by the residuary clause of his will. We are of the opinion that the legacy to Oliver Blush vested ; and that the judgment should be affirmed. All concur. Judgment affirmed.