Equitable Guarantee & Trust Co. v. Bowe

The Chancellor: The question is whether Margaret Bowe had a vested or contingent legacy. If vested, it is now payable to her administrator; and if contingent it is payable to the executor of William Bowe for distribution among bis next of kin as intestate property, the residuary cláuse of the will of William Bowe having heretofore been declared to be invalid. On behalf of the administrator of Margaret Bowe it was urged that the legacy was vested, there being a direct gift, the time of payment only being postponed. 1 Jarmon on Wills, *760; Richardson v. Raughley, 1 Houst. 561; Conwell’s Adm’r. v. Heavilo’s, Adm’r., 5 Harr. 296. It was urged on behalf of the next of kin of William Bowe, the testator, that Margaret Bowe did not at any time have a vested interest in the gift, because there was in the will no gift to her, directly, 'either of principal or of income for main [341] tcnancc, other than in the direction given to the trustee to pay the grandchildren as they should respectively arrive at the age of thirty years; and because there was no antecedent estate or interest given to another person, thereby postponing the enjoyment of the fund for the benefit of the estate, or to let in a prior estate. In support of this contention there was cited Leake v. Robinson, 2 Meriv. 363; Batsford v. Kebbell, 3 Ves., Jr. 363; Bevan’s Trusts, 34 Ch. Div. 716, 719; 2 J armon on Wills, (5th ed.) 457; Newman v. Newman, 10 Sim. 51; Ford v. Rawlins, 1 Sim. & St. 328; Frost v. McCaulley. 7 Del. Ch. 162, 44 Atl. 779; Billingsley v. Wills, 3 Atk. 219; Seibert’s Appeal, 13 Pa. St. 501; King, Adm’r., v. Crawford, 17 Serg. & R. (Pa.) 118; Moore v. Smith, 9 Watts (Pa.) 403; Walker v. Mower, 16 Beav. 365; Pleasonton’s Appeal, 99 Pa. St. 362; Dougherty v. Thompson, 167 N. Y. 472, 60 N. E. 760. In Conwell’s Adm’r. v. Heavilo’s Adm’r., 5 Harr. 296, Booth, C. J., laid down a rule which is well settled elsewhere, as well as here: “When a legacy is directed to be paid at a future time or on a future event it is vested or contingent according to the intent and meaning of the testator as expressed in his will. If the time or event is annexed to the payment of the legacy it is vested; if to the substance or gift of legacy it is contingent; because such appears to be the intention of the testator.” But there is in this case an additional feature, not included in the above rule, and everywhere considered an important and determining one. Here there is a present gift in trust, with a postponement of payment until the beneficiary attains the age of thirty years, and with a gift of the whole income in the meantime for the maintenance and education of the beneficiary. True, the income is not by express words made payable to the beneficiary, and the will does not specifically declare to whom the payment of income is to be made; but it does distinctly appear that the whole of it is to be so applied, and the intention to benefit the grandchild prior to the time she arrives at thirty years is surely indicated thereby. Indeed, no reason appears why the whole of the net income is not payable to the grandchild, or, during her minority, to her guardian. There is no. discretion in the trustee to apply all or part only of the income [342] towards the maintenance and education of the grandchild, nor is the trustee limited in so applying a designated portion or share of the income, or a certain sum as part of it. It is the whole of the net income which is to be so paid and applied. The amount to be so applied is not so large as to indicate an intention of the testator to restrict the trustee in paying over all of it for the grandchild. The evident and expressed intention of the testator is to aid certain named sons, including William S. Bowe, by giving a certain sum of money for each of his children, to be held by a trustee, the income received from the investment thereof to be used for the maintenance and education of each grandchild until they severally attained thirty years of age, and the principal to be then paid to the several grandchildren. It is not a gift of $90,000 (a sum of money arrived at by multiplying the sum of $10,000 by nine, the aggregate number of the children of the three sons of the testator named in the will), to be held in trust for a class, viz., grandchildren of the testator, children of his said three sons. It is a gift of $10,000 to each such grandchild to be held in trust for him or her. With respect to Margaret Bowe, the child of William S. Bowe, the gift is in effect this: “I give to The Equitable Guarantee and Trust Company the sum cf $10,000 to hold and invest the same and pay over the net income thereof for the maintenance and education of my grandchild, Margaret Bowe, daughter of William S. Bowe, until she arrives at the age of thirty years, and then to pay over the principal sum to her free and discharged from all trusts.” The principles of law applicable to such a gift are clear and well settled. In bequests of personal estate, a gift of the whole interim interest to or for the benefit of the legatee prima facie vests the principal, though if such words had not been used thé legacy would not have been treated as vested. Thus a bequest to A., when he attains a given age, the interest to be paid to him in the meantime, is vested, and if A. dies under that age, his representative will be entitled to the legacy. The rule is the same where the interest is given to other persons to be applied for the benefit of the legatee. Hawkins on Wills, *227; 2 Williams on Executors, *1097, et seq., Hanson [343] v. Graham, 6 Ves., Jr. 239; Hammond v. Maule, 1 Coll. 281; Re Hart’s Trusts, 3 De G. & J. 195; Frost v. McCaulley, 7 Del. Ch. 162, 44 Atl. 779; Provenchere’s Appeal, 67 Pa. St. 463. In Frost v. McCaulley, supra, the gift was of a share of an estate to trustees in trust, in substance: “The income I give to A. [a granddaughter], payable one-half yearly for ten years, after which I give the same to her.” It was held that the words “the same" meant the principal, and that she took a vested interest from the testator’s death. Th •. Court said: “The gift-to her of the principal, without the gift of the income, during the interval between the death of the testator and the expiration of ten years thereafter, would have made her share a contingent legacy, but the appropriation of the accruing interest during that interval for her benefit makes the gift, in substance, an absolute vested legacy, divided into two distinct portions or interests, for the purpose of postponing not the vesting but the possession only.” Judge Sharswood, in Provenchere’s Appeal, supra, (page 466), thus states the rule: “Thus it is true, as a general rule, that where the time or other condition is annexed to the substance of the gift and not merely to the payment, the legacy is contingent; but a well recognized exception to this rule is that where interest, whether by way of maintenance or otherwise, is given to the legatee in the meantime, the legacy shall, notwithstanding the gift itself appears to be postponed, vest immediately on the death of the testator.” These settled general principles are said to be inapplicable here because the income is payable to the father of Margaret Bowe and not to her, the gift having been made “to provide for some of my sons,” naming them. But this is not a reasonable view. The gift is to the grandchildren primarily and the reason for the gift is that the testator’s sons would be so helped, for they would otherwise be obliged to maintain and educate their children. This indirect way the testator adopted in order “to provide for” his three sons. It is clear then that the gift in trust for Margaret Bowe was a direct gift of the principal, the payment thereof being postponed until her arrival at thirty years of age, and so it was a vested legacy in trust. But even if the only gift be in the direction to pay, the gift would other [344] wise be contingent on her attaining the specified ago, the gift in the interim of the whole of the nc-t income for her maintenance and education clearly makes the gift a vested one, and, though she died under thirty years of age, the principal is now payable to her administrator. Let a decree be entered accordingly.