In re the Construction of the Last Will & Testament of Beale

Slater, S.: The last will and testament of Joseph Beale was admitted to probate April 16, 1900. The petitioners are two of his children and beneficiaries of trusts created in his will. Construction is sought of paragraph 2, which is as follows: “ Second. I give and devise all my real and personal estate of what nature or kind soever, to my wife Emma Beale and my brother Dr. James M. Beale, my executors hereinafter appointed, in trust with power to sell and dispose of the same, at public or private sale, at such times and upon such terms, and in such manner as to them or the survivor of them shall seem meet and to invest the same and to pay over and apply the rents, issues, incomes and interest and profits arising therefrom and from all [97] my estate equally to the support and maintenance of my three Children to wit, Clara E. Beale, James L. Beale and Clarence J. Beale, during their natural lives, and upon the death of either of said children to pay over one third of the principal sum of my estate to the lawful children or issue of said deceased child, if any; and if any of my children should die without issue, then said interest, income and profits arising from my estate shall be divided equally among the survivors, during their lives.” The sole point is whether the trusts in paragraph 2 of the will are valid. The trusts were created for the testator’s three children, with remainder to possible children or issue and in default of such, with cross-remainders to the surviving children. The petitioners contend that only one trust was created which was for three lives in being and that the same is invalid as improperly suspending the power of alienation. If the dominant purpose of the testator is the creation of a single trust subsisting during three fives, absolute ownership is illegally suspended (Pers. Prop. Law, § 11; Real Prop. Law, § 42); and the trust in its entirety is void. (Leach v. Godwin, 198 N. Y. 35.) If the trusts in the instant case can be held valid, it must be upon the theory of the intention of the testator to create three separate trusts. Judge Cardozo, speaking for the whole court in Matter of Horner (237 N. Y. 489, 493), said: “ If the dominant purpose in the creation of the trust is that of division into separate shares terminable by separate minorities or fives, the trust to that extent may be upheld * * *. We must say whether unity or pluralism is the preponderating note.” In the instant case, can pluralism be charged as the intention of the testator? In my opinion, pluralism is intended by the testator in the use of his words in the paragraph in question. He provides that “ upon death of either of said children to pay over one third of the principal sum of my estate to the lawful children or issue of said deceased child, if any.” Payment over to issue of a deceased child could not be made unless the estate was intended by the testator to be divided into three separate shares. I believe that in this expression of the testator we find a well-defined purpose to divide the estate into three separate trust funds. The petitioners submit the case of Matter of Magnus (179 App. Div. 359) as upholding their views. A study of that case discloses that the gift was only of income out of a fund kept in solido and payment of principal is only made in the event of the death of all of the beneficiaries. In the instant case, upon the death of any of the children leaving children or issue, the share is segregated [98] from the general mass with the payment over of the principal of such share, by which the amount then defined escapes from the trust. As to such separate share the trust then terminates. In the Magnus case the will provided otherwise. By the death of one of the beneficiaries before the death of the last survivor, only, income and not principal is disposed of. (Leach v. Godwin, supra.) In my opinion, the trusts created by the 2d paragraph for the three children can be sustained. The latter part of paragraph 2 provides that if any of the children die without issue, the income shall be divided equally among the survivors during their lives. In support of this clause, the trustee cites the case of Matter of Fidelity Trust Co. (94 Misc. 533). In that case the principal of the residuary estate was given over to the owners of the other shares. In the instant case, only the income is to be divided equally among the survivors during their fives. This latter clause of paragraph 2 does not affect the legality of the trust and this “^epidermal callosity,” using the words of Judge Pound in Matter of Trevor (239 N. Y. 6), may be harmlessly eliminated. The result is that as to the principal of these trusts the decedent died intestate. One child has died without issue. The two surviving children have a right to the immediate possession of said share held for the life of the deceased child.