« ΠροηγούμενηΣυνέχεια »
(202 N.Y.S.) 2. Courts 99(1)-Prior decision held not res judicata as respects method to
be adopted in subsequent proceeding in apportioning funds between life beneficiary and remaindermen.
Where a referee's apportionment of proceeds of sales of testatrix's property was not based on either of two methods contended for in a subsequent reference, but was based in part on both methods, the prior
decision was not res judicata as respects the method to be adopted. 3. Wills 684(9)-Method stated of apportioning trust funds consisting of pro
ceeds of unproductive realty between beneficiaries,
Where a will created a trust, consisting mostly of unproductive real estate, the income of which was to go to one beneficiary for life, and on her death to petitioner for life, with remainders over, and the will was construed to require payment of income from testatrix's death, the method adopted by the court of apportioning the proceeds of each sale of real estate was to first ascertain what was principal, by determining what sum, if put out at interest at 5 per cent. on the date of testatrix's death, would amount, on the day of such sale, to the amount received by the trustee, the first sum being principal and the rest income, and then to divide the income between the two beneficiaries pro rata according to the number of days, first, between the death of testatrix and the death of the first beneficiary, and, second, between the latter date and the date of
the sale. Application by Julia Watt Lawrence for the apportionment of income from a trust fund created by the will of Mary G. Pinkney, des ceased. From a decree of the Surrogate's Court, confirming the report of the referee, Emery J. Thomas, administrator of the estate of Grace Watt Thomas, deceased, appeals. Affirmed.
The following are the findings of fact of Referee John Godfrey Saxe:
I. Mary G. Pinkney, the testatrix, died on December 8, 1908. In and by her will she directed that her residuary estate, both real and personal, be divided into four equal parts, for the benefit of certain nephews and nieces, who were brothers and sisters. She gave one part to Thomas L. Watt. She gave a second part to Archibald Watt. She gave a third part to her executors, in trust (hereinafter called “the Lawrence trust”), to pay over the income to Julia Morris (later Julia Watt Lawrence) during her life, and, upon her death, to distribute the principal among her descendants. She gave one half of the fourth part to Grace Watt (later Grace Watt Thomas). She gave the other one-half of such fourth part to her executors, in trust (hereinafter called the "Thomas trust"), to pay over the income to Grace Watt during her life, and, upon her death, in case she should die without issue, to distribute the principal among her brothers and sisters (children of any deceased brother or sister to take their parent's share); but the whole of the share which might thus fall to Julia Morris, to be held upon the Lawrence trust thereinbefore set up. She also directed that, in case of the death before her of any of these nephews or nieces, without issue, his or her share should go to his or her surviving brothers and sisters; but the whole of such part as might thus fall to Julia Morris should be held in trust, as thereinbefore provided, and one-half of such part as might thus fall to Grace Watt should also be held in trust as thereinbefore provided.
II. Archibald Watt predeceased the testatrix. Thomas L. Watt survived the testatrix, and died on April 10, 1910, leaving him surviving four children, Annie P. Watt, now Keator, Thomas L. Watt, Jr., Grace F. Watt, now Lopez, and James L. Watt. Julia Morris is the petitioner Julia Watt Law. rence. She has three children, Louis H. Morris, Keith W. Morris, and Hilda O. E. M. Carswell. Grace Watt survived the testatrix, married, and became Grace Watt Thomas. She died intestate and without issue on August 15, 1914.
For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & lodexes
III. On or about November 19, 1912, by an order dated on that day, the Lincoln Trust Company and Adolpho H. Fischer were duly appointed substituted trustees to execute the Lawrence trust. The said Fischer died on October 22, 1915, and from that time, and until the time of its merger into the Lincoln National Bank, the Lincoln Trust Company acted as sole substituted trustee under the said trust. Since the commencement of this action the Lincoln Trust Company became merged in the Lincoln National Bank of New York, and thereafter, in July, 1922, the, Lincoln National Bank of New York became merged in the Mechanics & Metals National Bank of New York. The Mechanics & Metals National Bank of New York has succeeded to all the rights and powers and is subject to all the obligations of the Lincoln Trust Company as such substituted trustee.
IV. On or about June 18, 1913, by an order of the Supreme Court dated on that day, the United States Mortgage & Trust Company was duly appointed substituted trustee to execute the Thomas trust.
V. By reason of the death of Archibald Watt prior to the testatrix, the said Thomas L. Watt became entitled to one-third, instead of one-fourth, of the testatrix's residuary estate; the trustee under the Lawrence trust became entitled to one-third instead of one-fourth thereof; the said Grace Watt Thomas became entitled to one-sixth, instead of one-eighth, thereof; and the trustee under the Thomas trust became entitled to one sixth, instead of oneeighth thereof.
VI. By reason of the death of Grace Watt Thomas on August 15, 1914, the descendants of Thomas L. Watt became entitled to one-half of the principal of the one-sixth of the residuary estate of the testatrix held under the Thomas trust, and the trustees under the Lawrence trust became entitled to the other half of such one-sixth of principal. The fund which is the subject of this reference is the one-half of such one-sixth which belongs to both the Lawrence and Thomas trusts.
VII. The testatrix left an estate consisting largely of real property situated in the counties of New York and Westchester, N. Y. Such real property was largely unproductive. The carrying charges at all times since the death of the testatrix have exceeded the income, except that portion of the proceeds of sale which is to be regarded as income. It was not possible for decedent's executors or administrators with the will annexed to sell the whole, or a substantial part, of such realty, at or immediately after the death of the testatrix, except at an undue sacrifice, and, in the exercise of a sound discretion, they postponed the sale of various parcels of said property.
VIII. On or about May 23, 1911, Curtis B. Pierce, as sole surviving executor and trustee under decedent's will, brought an action in the Supreme Court against Grace Watt Thomas and others, in which he sought a construction of the will. The children of the petitioner were duly made parties to the action, and jurisdiction of the person of each of them was duly obtained by service of process or appearance. On March 2, 1912, judgment was duly entered in said action, providing, among other things, as follows:
"Adjudged that by the provisions of the last will and testament of Mary G. Pinkney, deceased, there was a blending of realty and personalty into a common fund to carry out an express purpose of exact division, which purpose could not be effected in any practical manner without a sale of the real property whereof said Mary G. Pinkney died seized, and the power of sale of real property created by the said Mary G. Pinkney in and by her said will, and thereby conferred upon and granted to the executors of said will, is an imperative power to sell all the real property whereof the said Mary G. Pinkney died seized, other than that specifically devised by said will. And it is
"Adjudged that the true construction and effect of the said last will and testament of the said Mary G. Pinkney, deceased, is that the said will worked and effected, at the time of her death, an equitable conversion into personal property of all of the real property whereof she died seized, other than that specifically devised by said will."
IX. Thereafter the said Curtis B. Pierce, as such sole surviving executor and trustee, brought a further action in the Supreme Court for the settle
(202 N.Y.S.) ment of his account as such executor and trustee. In that action the children of the petitioner were duly made parties, and jurisdiction of the person of each of them was duly acquired. On or about June 14, 1912, judgment was duly entered in said action. That judgment, among other things, referred to the judgment in the former action and contained the following finding in respect thereto:
"Said judgment was and is a judgment valid and binding on each and all of the defendants in said action and upon each and all of the defendants in this action. No appeal was taken from said judgment and the time within which an appeal therefrom could be taken has expired."
X. Curtis B. Pierce died on October 22, 1912. Thereafter Grace Watt Thomas and Charles E, Littlefield were duly appointed administrators with the will of the testatrix annexed. They also died, and on July 26, 1915, Clarence H. Kelsey was duly appointed such administrator, and since then has been and now is acting as such.
XI. During the year 1917 the petitioner herein commenced a prior proceeding for the apportionment of the proceeds of earlier sales of the real estate of the testatrix which had at that time been paid to the trustees under the Thomas and Lawrence trusts. Cornelius J. Sullivan, Esq., was duly appointed referee to hear and determine the issues in such proceeding, and on or about July 9, 1920, he duly filed his report. On May 2, 1921, the Surrogate's Court made a decree finally determining the issues raised in the said proceeding, and, upon appeal, such decree was affirmed by the Appellate Division of the Supreme Court in and for the First Department.
XII. At all the times covered by this report it was possible for a testamentary trustee in the state of New York to obtain an income return of 5 per cent. from the loan of trust funds, while obtaining for the loan safe security of a kind sanctioned by law. Such rate of 5 per cent. was a fair and reasonable income return from trust funds in the state of New York during such period.
XIII, All parties interested in the apportionment prayed for herein are parties to the present proceeding. They are all adults, except Louis II. Morris, Jr., Charlotte M. Carswell, Shirley Watt Carswell, Grace F. Lopez, and Manuel Lopez, Jr., who are infants under 14 years of age, and are represented herein by William J. Burke, Esq., their special guardian.
XIV. The trustee of the Lawrence trust on the following dates received the following amounts which are subject to apportionment herein. If calculated pursuant to conclusions I and II of this report, it is stipulated that the apportionment thereof is as follows:
Apportioned Date of Receipt.
Received. Principal, Income. August 1, 1919
$ 8,000.00 $ 5,220.23 $ 2,779.77 November 15, 1919
4,000.00 2,585.98 1,414.02 December 24, 1919
8,000.00 5,153,90 2,816.10 February 28, 1920
8,000.00 5,124.55 2,875.45 May 25, 1920
10,000.00 6,356.50 3,613.50 June 26, 1920
11,666.67 7,395.67 4,271.00 July 18, 1920
10,666.67 6,748.69 3,917.98 October 23, 1920.
23,083.33 14,483.66 8,599.67 January 18, 1921
50,000.00 31,141.87 18,858.13 July 15, 1921
98,961.19 60,707.21 38,253.98 November 26, 1921
15,333.34 9,302.33 6,031.01 February 1, 1922
29,233.33 17,637.00 11,596.33 February 6, 1922
9,416.67 5,678.87 3,737.80 February 21, 1922
8,000.00 4,818.88 3,181.12 May 10, 1922
4,800.00 2,872.34 1,927.66 July 1, 1922
10,000.00 5,938.79 4,041.21 July 28, 1922
5.000.00 2,972.76 2,027.24 August 15, 1922
60,000.00 35,623.00 24,377.00 August 25, 1922.
14,283.33 8,473.26 5,810.07
$388,144.53 $238,255.49 $150,189.04
XV. The trustee of the Thomas trust on the following dates has received the following amounts which are subject to apportionment herein:
Amounts Date of Receipt.
Received. August 1, 1919
$ 2,000.00 November 15, 1919
1,000,00 December 26, 1919
2,000.00 February 28, 1920
2,000.00 May 25, 1920
2,500.00 June 28, 1920
2,916.67 July 17, 1920
2,666.67 October 22, 1920
5,770.83 January 18, 1921
12,500.00 February 1, 1922
7,308.33 February 6, 1922
$43,016.67 XVI. If calculated pursuant to conclusions I, II, and III of this report, it is stipulated that the apportionment of the said receipts specified in finding XV is as follows:
Amounts tioned of Mrs. Due Mrs. Date of Receipt.
Received. Principal. Thomas. Lawrence. Aug. 1. 1919......
$2,000.00 $1,305.06 $ 371.04 $ 323.90 Nov. 15, 1919.
646.49 183.80 169.71 Dec. 26, 1919.
2,000.00 1,288.26 366.17 345.57 Feb. 28, 1920.
2,000.00 1,281.14 364.23 354.63 May 25, 1920.
2,500.00 1,589.12 451.79 459.09 June 28, 1920.
2,916.67 1,848.60 525.57 542.50 July 17, 1920.
2,666.67 1,687.32 479.71 499.64 Oct. 22, 1920.
5,770.83 3,621.23 1,029.53 1,120.07 Jan. 18, 1921.
12,500.00 7,785.47 2,213.45 2,501.08 Feb. 1, 1922.
7,308.33 4,409.25 1,253.57 1,645.51 Feb. 6, 1922.
2,354.17 1,419.72 403.63, 530.82
XVII. The said Clarence H. Kelsey, as such administrator, received on the following dates and retained as the one-half part of the Thomas trust which reverted on August 15, 1914, to the Lawrence trust, the following amounts:
Retained. July 14, 1921
$25,776.71 November 23, 1921
3,833.34 February 15, 1922
2,000.00 May 9, 1922
1,200.00 June 29, 1922
2,500.00 July 27, 1922
1,250.00 August 14, 1922
15,000.00 August 25, 1922
(202 N.Y.S.) XVIII. If calculated pursuant to conclusions I, II, and III of this report, it is stipulated that the apportionment of the said receipts specified in finding XVII is as follows:
Amounts Received. $25,776.71
3,833.34 2,000.00 1,200.00 2,500.00 1,250.00 15,000.00 3,570.83
743.25 8,906.48 2,118.31
Income. $ 5,466.80
845.83 452.00 277.69 586.46
$55,130.88 $33,321.54 $9,473.49 $12,335.85 XIX. With the consent of all parties to this proceeding, who are all the persons interested in the Thomas trust, the United States Mortgage & Trust Company, as such substituted trustee, filed with the referee an account of its proceedings as such trustee, as to the said funds received by it, from the filing of its last account in December, 1917, to August 30, 1922, and there are no objections thereto. The United States Mortgage & Trust Company, as such substituted trustee, has received as income from the amounts aggregating $43,016.67, specified in finding XV, certain sums amounting on August 25, 1922, to $3,296.24. Of this amount the said trustee has on hand $34; it has paid to Julia Watt Lawrence $2,702.14; it has paid $187.32 for accrued interest on bonds purchased by it; it has credited itself with commissions of $72.78. It is stipulated that the estate of Grace Watt Thomas, deceased, is entitled to a proportionate part of said income amounting to $2,736.14, and that said trustee should pay to Emery J. Thomas, as administrator of Grace Watt Thomas 7642.49/43016.67 of said amount of $2,736.14, to wit, the sum of $486.11, less its commission for receiving and paying out the game. The said trustee has overpaid Julia Watt Lawrence on account of said income, and it is further stipulated that, after making said payment to Emery J. Thomas, as administrator of Grace Watt Thomas, deceased, it is entitled to reimburse itself out of any income in its possession or which may come into its possession to which Julia Watt Lawrence is entitled. It is further stipulated that any and all other income that said United States Mortgage & Trust Company, as such substituted trustee, may receive from August 25, 1922, to the date of the decree to be entered herein, on said sums amounting to $13,016.67, should be paid by it to Emery J. Thomas as administrator of Grace Watt Thomas, deceased, and to Julia Watt Lawrence, the petitioner herein, in the same proportion as said sum of $2,736.14.
XX. The said sum of $43,016.67 has been invested by the United States Mortgage & Trust Company, as such substituted trustee, and it now exists in its possession in the following form: Cash
951.47 Cash by net gain on reinvestments
130.11 United States Liberty Loan 4/4's par value.
8,100.00 United States Liberty Loan 444's, par value
4,500.00 United States Liberty Loan 494's, par value
33,450.00 Out of this amount said trustee has paid $1,000 for attorney's fees. It is stipulated that the said trustee should convert into cash such part of said securities as is necessary with which to pay the sums hereinbefore specified to the administrator of Grace Watt Thomas and to Julia Watt Lawrence, and its said commissions, and deliver the balance of said bonds to the Mechanics & Metals National Bank of the City of New York, as substituted trustee, less its commission for receiving and paying out the same.