Dickerson v. Sheehy

McLaughlin, J. Action to partition certain real estate in the city of New York. Two of the defendants demurred to the complaint upon the ground that it did not state facts sufficient to constitute a cause of action. The demurrer was sustained and from a final judgment dismissing the complaint the plaintiffs and two of the defendants appeal. Whether the complaint states a cause of action depends entirely upon the construction to be put upon the will of Patrick Sheehy. He died on the 24th of February, 1896, leaving him surviving a widow, two sons and three daughters. By his will, after certain specific legacies not necessary to be here considered, he gave, devised and bequeathed all the rest, residue and remainder of his property, both real and personal, to his executors in trust for the following purposes, among others, to collect the rents, issues and profits of his real estate and pay two-fifths thereof to his widow during her life; to divide the other three-fifths into two equal parts and apply so much of one part as his executors deemed proper to the maintenance and education of his son Edward until he attained the age of twenty-one years; and upon his attaining that age, to pay over to him such part from time to time until he attained the age of twenty-five years. Then the will provided: “ Upon my said son attaining the age of twenty-five years, to convey, transfer and pay over to him three-tenths of all the rest, residue and remainder of all my real esate and one-half of all the rest, residue and remainder of all my personal estate, together with all unexpended interest, income and profits of the said one of the said two equal parts mentioned in said paragraph ‘ 6 ’ to my — 163 — said son Edward C. Sheehy, his heirs, representatives and assigns forever. ® ® ® Upon the decease of my said wife, if my said son be then twenty-five years of age, to convey and transfer to my said son Edward C. Sheehy, one-fifth of all the rest, residue and remainder of my estate; if my said son be not then twenty-five years of age, then upon his attaining that age.” A similar provision was made by the testator for his other son Frank, so that the two sons and the widow were the only ones mentioned in the will who had or took a beneficial interest in the real estate. One daughter was given a legacy of $500, another a legacy of $1,000, and a third the income for life on a trust fund of $5,000. The son Edward died on the 16th of January, 1901, and he was then twenty-four years, seven months and two days old. He left a will by which he devised all his real estate in trust for his mother and brother Frank. The mother died on the 6th of March, 1904. Frank is now over twenty-five years of age and all of the trusts created by the will of Patrick Sheehy have terminated. The action is brought by two of the daughters of Patrick Sheehy to partition the réal estate upon the theory that the son Edward was, by his father’s will, given only a contingent interest in the real estate therein mentioned up to the time he became twenty-five years of age, and he having died before reaching that age, as to that interest Patrick Sheehy died intestate, and the same belongs to his heirs at law. The question then is whether the interest which Edward took in the real estate was contingent or vested. There are, in the will, no direct words of gift to him. The entire residuary estate is given to the executors, with direction to them, upon his reaching the age of twenty-five years, “ to convey, transfer and pay over to him ” a portion of the estate. The will will be searched in vain to find any words indicating an intention that the son Edward, until he reached twenty-five years of age, should have — 164 — any interest in the real estate itself, other than the income derived therefrom. It is only upon his attaining that age that the executors are directed “ to convey, transfer and pay over.” Upon the death of the widow the executors were to convey and transfer a certain interest if Edward “ be then twenty-five years of age,” and if he were not then twenty-five years of age, “ then upon his attaining that age ” —clearly showing, as it seems to me, that the testator’s purpose was that Edward’s interest should not vest until he became twenty-five years of age. The general rule, under such circumstances, as I understand it, is that the testator is presumed to have intended a gift which should not vest until the time set for the transfer or payment to the beneficiary. What was said in Matter of Baer (147 N. Y. 348) is quite applicable here. The court said: “ Moreover, there is not in this devise any words of direct and immediate gift to the children or heirs of the brother, but a direction that the trustees should convey to them at a future time on a certain contingency. They were to take through the medium óf a power in trust, and the time of the vesting of the interest was thus deferred in form, at least, until the time of distribution. It is a case then where, as the cases express it, ‘ futurity is annexed to the substance of the gift,’ and warrants the application of the principle that where a future interest is devised, not directly to a given person, but indirectly through the exercise of a power conferred upon trustees, the devise is designed to be contingent and survivorship at the time of distribution is an essential condition to the acquisition of an interest in the subject of the gift.” I am aware of the existence of a rule which favors the vesting of estates, but that rule is never applied when the intention of the testator, as gathered from the whole will, is that the estate shouldsnot vest; in other words, all of the rules laid down — 165 — for the construction of wills yield to the actual intent of the testator if that can be ascertained from the will itself, A will similar in some respects to the one under consideration is considered in Lewisohn v. Henry (179 N. Y. 352). In holding that there was no vesting until the beneficiary reached a certain age, the court said: “■ The trustees took the legal title with the usual power of management and with the duty of applying the net income to the use of the respective beneficiaries. They were to have and to hold ’ each share until the child for whose benefit it had been set apart should reach a certain age, and upon arrival ’ at- that age they were to convey and pay over to him or her a part of the capital ‘ in fee simple and absolutely.’ The use of the word upon,’ followed by a direction to convey, indicates that until the contingency named should happen there was to be no vesting. ® * ® No part of the capital was to go to the children until the time fixed for absolute transfer to them should arrive. The direct gift to the executors and the absence of any gift of capital to the children in the first instance, show that there was no intent to vest title in them prior to the date named for distribution. The gift of capital to the children was through the direction to convey and there was no vesting until the time to convey came around.” In Schlereth v. Schlereth (173 N. Y. 444) the will gave all the property to the executors in trust to pay the income to testator’s only daughter during her life, and after her death, leaving issue, to pay over the income to such issue in equal shares until the youngest should attain the age of twenty-one years, and then to divide and distribute the whole trust fund among such issue in equal shares. It was held that the estate did not vest until the time arrived for distribution. In Brooklyn Trust Co. v. Phillips (134 App. Div. 697; affd., 201 N. Y. 561) the testator gave $10,000 to his executors in trust for a beneficiary for life and after her death to divide the same equally between her two children upon their respectively — 166 — arriving at the age of twenty-one years. It was held that the vesting depended upon two contingencies, survival of the beneficiary and the arrival at the specified age. Upon the failure of either the estate failed to vest, the court saying: “There are not in this devise any words of direct gift to the children of Mrs. Phillips, but a direction that the executors should convey to them, at a future time, on certain contingencies. They were to take through the medium of a power in trust, and the time of the vesting of the principal of the legacy was thus deferred until the time of distribution.” In National Park Bank v. Billings (144 App. Div. 536; affd., 203 N. Y. 556) it was held that a gift to trustees, among other things, to hold until testator’s son attained the age of twenty-five years and then convey to him, gave to the son only a contingent interest. It is true there are certain exceptions to the rules thus laid down with reference to vesting. In Matter of Crane (164 N. Y. 71) these exceptions are classified under two heads: (a) Where the postponement of the transfer or payment to the beneficiary is for the purpose of letting in an intermediate estate; and (b) where there are words in the will, aside from the direction to the trustee to pay over, which import a gift vested in interest prior to the time for payment. But a careful consideration of all of the provisions of this will shows that these exceptions have no application. There is no intervening estate which necessitated the postponing of the transfer of the estate to Edward until he arrived at twenty-five years of age. Nor are there any words in the will which indicate an intention to make a present devise to him; on the contrary, the entire scheme of the testator indicates, as it seems to me, an intention to withhold from the son the power of disposition over the corpus of the estate until he became twenty-five years of age. An illustration of the second exception mentioned in the — 167 — Crane case is found in Warner v. Durant (76 N. Y. 133). There the court said: “ Where the gift is to be severed instant er from the general estate for the benefit of the legatee, and in the meantime the interest thereof is to 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 for the payment until the day fixed.” But in the present case there was no immediate severance. The executors were directed to collect the rents, issues and profits from the entire residuary estate and divide them in certain proportions among the beneficiaries named. It was not until Edward reached twenty-five years of age that there was to be a division and a severance of his' share from the estate, and until that time arrived his interest in the real estate was contingent merely. My conclusion, therefore, is that the interest of Edward was contingent upon his reaching twenty-five years of age, and that he having died prior to that time the interest which he otherwise would have taken passed to the heirs at law of Patrick Sheehy, two of whom are the plaintiffs; that the complaint states a cause of action, and for that reason the judgment appealed from is reversed, with costs, and the demurrer overruled, with costs, with leave to the respondents to withdraw demurrer and interpose an answer on payment of costs. Clarke and Dowling, JJ., concurred; Ingraham, P. J., and Laughlin, J. dissented.