
    Edward Kemp et al., Individually, and as Surviving Executors, etc., Plaintiffs, v. Arthur Tyron Kemp et al., as Executors, etc., et al., Defendants.
    (Supreme Court, New York Special Term,
    October, 1901.)
    Testamentary power of appointment — Construction—Extrinsic evidence — Creation of trust under the power — Family arrangement — Power when not imperative — Onerous stipulation as to payment of trust income.
    A testator excluded his son George and his issue from any benefit in his residuary estate, gave all of it to trustees for his wife and three other children and also gave his wife power to appoint-two-fifths of it among all four of the children. By her will and under-the power she created a trust therein for George but excluded him. and his issue from any share in the residue remaining after the trust. She directed that he was not to be paid any installment of trust income unless he satisfied his trustees that he had applied a certain proportion of his last previous installment to the maintenance of his children. It was shown that the testator had great confidence in his wife’s judgment, but that neither he nor she had any confidence in George’s ability to control money if given him outright and that his general conduct had been unsatisfactory to both of his parents.
    Held, that George’s claim, that, in addition to his trust interest, he was entitled to share equally with his three brothers and sisters in the residue of the two-fifths, was untenable.
    That the power of appointment was a special power in trust, the validity of whose exercise must be determined as if the appointment made under it had been incorporated in the donor’s will.
    That, although the power was limited to a class, the donee might create under it a valid trust for George and was not limited to appointing the whole sum to a single child.
    That an instrument under seal, executed and acted upon by all the parties in interest, recognizing the validity of the appointment to or trust for George, would, although without valuable consideration, be enforced as a family arrangement, not invalidated as to any party thereto by George’s subsequent eláim of a right to share in the residue of the two-fifths.
    That the power was not imperative, as its execution or non-execution was left to the discretion of the donee.
    
      Semble, that, had George attacked it, the stipulation requiring him to satisfy his trustees that he had applied a certain proportion of his last installment of income to the support of his children before he could become entitled to another, would have been declared invalid.
    Action for the construction of a will. The clause, in the will of Juliet Augusta Kemp, stated in the opinion as recited at folio 133 of the complaint, was as follows: “And all the residue of such two-fifth parts of such residuary estate of my said deceased husband George Kemp by his will devised and bequeathed to be held in trust for my benefit during my life, which shall not be required to be set apart and' held by' virtue of this my will to produce the aforesaid net annual income of nine thousand dollars, I give, devise, bequeath and appoint upon my death/ in fee simple and absolutely, to such of the children of my said deceased husband George ‘ Kemp as shall survive me and the issue who shall survive me of such of the children of my said deceased husband George Kemp (other than my said son George Kemp), as shall have previously died, in equal shares, per stirpes and not per capita, such then living issue of any deceased child of my said deceased husband (other than my said son George Kemp), to take together in equal shares, per stirpes and not per capita, the share of such residue of such two-fifth parts of such estate which the parent of such issue would have taken if living; but if my said son George Kemp shall survive me and shall die before the expiration of three months next after my death, or if for any reason the exercise by this article of my will of the power of appointment by the will of my said deceased husband George Kemp granted unto me in respect •of the part of the said two undivided fifth parts of the residuary estate, real and personal, of my said deceased husband George Kemp required to be set apart and held to produce such annual net income of nine thousand dollars, shall be invalid; or if my said son George Kemp shall die before me, then and in either of such cases, upon my death, if for any reason such exercise by this my will of such power of appointment be invalid, or if my said son George Kemp 'shall die before me, and upon the death of my said son George Kemp if he shall survive me and shall die before the expiration of three months next after my death, I give, devise, bequeath and appoint all of the capital of the said two-fifth parts' of such residuary estate, real and personal, and in case my said son George Kemp shall have survived me and shall have died before the expiration of three months next after my death, likewise all .income thereof which shall have accrued after mv death * f ** unto such of the children of my said deceased husband George Kemp (other than my son George Kemp), as shall then be living and the issue then living of such of the children of my said deceased husband George Kemp (other than my said son George Kemp), as shall have previously died, in .equal shares, per stirpes and not per capita, the issue then living of any child of my said deceased husband (other than my said son George Kemp), who shall have died before me, to take together in equal shares, per stirpes and not per capita, the share which the parent of such issue would have taken if living.”
    Evarts, Choate & Beaman (Treadwell Cleveland and William V. Rowe, of counsel), for plaintiffs.
    T. T. Sherman, for defendant executors, of Juliet Augusta Kemp, Emma Mears and V. G. Kent.
    John Larkin (John M. Bowers, of counsel), for defendants A. T. Kemp and wife, Marion M. Kemp, Juliet A. Tyng and Stephen H. Tyng.
    E. G. Stedman, for defendant Stephen H. Tyng.
    Smith, Conway & Weed, for defendant George Kemp.
    W. H. Hamilton, guardian ad litem for defendants Chouteau Kemp and Gladys Kemp; also counsel for defendant Lilia Kemp.
    Clarke & Culver (T. G. Lewis, of counsel), for defendant Eliza Caldwell.
    Emmet & Robinson, for New York Life Insurance and Trust Company.
    John M. Bowers, guardian ad litem for Mary L. Kemp, the younger.
   Fitzgerald, J.

The principal questions to be decided are:

First. The construction of the clause in the will of Juliet " Augusta Kemp, recited at folio 133 of the complaint.

Second. The validity of the trust created by her will for th© benefit of her son George; and

Third. Was the power granted her to set apart in her lifetime or appoint by will an imperative power?

To properly determine these propositions it will be necéssary to consider together the wills of the father and mother, as both instruments appear in many respects to have sprung from a common inspiration, and the same underlying purpose manifests itself in frequent and marked degree throughout each of these testaments.

The family of George Kemp, the elder, at the time of the execution of his will, consisted of a wife and four children, and in this connection let it he noted that his residuary estate is divided into five parts. Three separate trust estates, consisting of one-fifth part each, are created for the benefit of three of his children, and the remaining two-fifths he devises in trust, the net income to be applied to the separate use of his wife during her life.

There must have been some reason operating in the mind of the testator for the discrimination shown against one of his childrm, and when it is remembered that the one so discriminated against was the eldest son, the bearer of his father’s name, it will be realized the controlling cause could not have been slight. The testator must have entertained serious apprehension as to George’s worthiness, and' yet that he was very much, concerned about him and anxious that he should partake fully with the other children in the equal enjoyment of the paternal estate is evident from the very scheme of its division. Power to dispose of the capital of these two-fifths was granted Mrs. Kemp under certain limitations which later on will be more fully discussed, but for the purpose of reasoning therefrom, the question of her intent in employing the excluding phrase in the clause disposing of the residue of the capital, after making provision for George by the creation of a trust, it will be sufficient to state that by the terms of the original will of her husband it was provided that in the event of failure upon her part to exercise the power, that then, upon her death, such capital was to be distributed amongst all of his children, but by the fifth paragraph of the second codicil, executed some years later, George and his issue were, under such circumstances, absolutely excluded from any participation therein. There is certainly strong ground for assuming that something must have occurred meanwhile to account for this radical alteration of plan; the father’s doubts, regarding the character of his son, it is fair to assume, had been increased, and yet that he had not positively lost all confidence in his possible future reformation is also very plain, for the reason that the power, as created by the will, is neither curtailed nor limited by the codicil, but to the donee’s judgment is entirely left the determination of the question whether, or not at all, and, if at all, to what extent George should participate in the estate. There was still a lingering hope that time might set in operation some hidden spring — suppressed in the nature of his first born — which woiild prompt him to worthier conduct, and to a wife’s sense of duty and a mother’s love was confided the power in such a wished for happening to bestow upon the discarded one that generous treatment, the denial of which it requires but superficial insight to discern .was the chief sorrow of the "testator’s declining years.

By the will of the testatrix a trust is created for the benefit of George, and her executors are directed to set apart a sum out of the two-fifths parts of her husband’s estate, the income of which she enjoyed for life, sufficient in their judgment to produce an annual income of $9,000, and that such sum be paid in quarterly installments to her son, George, upon his furnishing satisfactory proof to the trustees that he had properly provided within the preceding quarterly period for the maintenance and education of his children. It is impossible to read the provisions of this trust without being convinced of the mother’s want of confidence in her son. How can they be construed otherwise than as declarations upon her part that he could net be relied upon to discharge the most sacred of obligations,— a parent’s duty to his offspring? ¡Nothing can be predicated upon the idea that she was devoid of affection for her grandchildren, for the contrary has been proven. Did she not, by her will, make an absolute gift of $10,000 to each of them from her own estate? Was not her love for them breathed in every line of the letters read in evidence, and was not this" love the inspiration of her precaution to guard them against possible parental dereliction? Were they not in her thoughts when she provided for George’s income, and was not this income to be reduced in the 'event of both dying during his life? Is it supposable that she intended to include him in and exclude them from any benefits she designed conferring under such circumstances? Was it her purpose to entrust the untrammeled disposition of hundreds of thousands of dollars to the identical person that in another clause of the same instrument she limits in the administration of the comparatively small revenues of a trust fund? Was it her intent to appoint George to receive at her death one-fourth part of the two-fifths parts of her deceased husband’s estate, when she directs that if he (George) shall die within three months thereafter, all of the capital of the said two-fifths parts, together with all accrued income thereof, shall go-to these children other than George? Is her recital of the extent of the power which she understood was granted by the terms of her husband’s will not a marked indication of her intent? That her understanding thereof was erroneous is immaterial when it. is considered only as an aid in determining the single issue of intent. How does the extrinsic evidence given upon the trial bear upon the question of construction? “ It must be considered for the purpose of enabling the court to see the facts as the testator saw them” (Morris v. Sickly, 133 N. Y. 456; Stuart v. Brown, 11 App. Div. 492), and to apply his language as he understood and intended it. Page Wills, 973, 974, § 817.

It was said by Earl, J., in Stimson v. Vroman, 99 N. Y. 79, “We must arrive at the intention of the testator as well as we-can; and for that purpose in such a case we may consider all the circumstances surrounding the testator when he made the will * * * not to put new language into the will, but to get out of the language the sense which the testator really meant to embody therein. Doe v. Provoost, 4 Johns. 61; Shulters v. Johnson, 38 Barb. 80; Goodhue v. Clark, 37 N. H. 525.”

The intention of the testatrix (as was said in N. Y. Life Ins. Co. v. Baker, 165 N. Y. 488) must be regarded “ as the polar star of construction ”.

It clearly appears from the scheme of the wills of the donor and donee, particularly in the light of the facts and circumstances presented, that neither of them had any confidence in the. capacity of George to manage an estate of which he had absoluto control, and the conviction is forced upon the court, after careful deliberation, that the testatrix understood and-intended the excluding phrase, as used in the disputed clause, *to apply to George as well asAo his issue, and that his claim, under the terms of his mother’s will, to a one-fourth part of the residue of the two-fifths parts of his father’s estate, devised in trust for her benefit during life, has not been established.

The next question to be disposed of relates to the validity of the trust.

The power conferred upon Mrs. Kemp was a special power, in trust. Real Prop. Law, § 115.

She might, during her lifetime, set apart to George one of the two-fifths parts bequeathed in trust for her benefit, or any portion thereof, and thereupon such fifth part or portion thereof was to be withdrawn and converted into a trust for his benefit, upon like terms with the trust created by the second article of his father’s will in reference to the special bequest of $100,000. This power she did not exercise. She also had the power to appoint by will between and amongst the children of the donor living at the time of her death (all four having survived her) the entire of the two-fifths parts (no portion thereof having been withdrawn) in such proportions and at such time or times as “ by her last will and testament she might direct and appoint to receive the same.”

It is contended by the children of the donor (other than George) that this power has not been exercised, and that the trust created by the donee is invalid. They claim that all she was vested with power to do by will was to direct and appoint the proportions and times when the two-fifths parts should be accounted for, conveyed to and distributed among her children. In other words, that she might give outright to any one of them the whole of the two-fifths parts. That for example, if she appointed George to receive it, the power was beyond all question ample to sustain the appointment, but that it was transcended when out of a part of the estate which she might absolutely give him in its entirety, she attempted to create a trust for his benefit. This attack upon the -trust necessarily remits us to a further consideration of the will of George Kemp, the instrument by which the power was created. That the language thereof must be construed in the light of its general scheme and the extrinsic facts proven on the trial will scarcely be disputed even by those who assail the validity of the trust.

What facts are so established?

That the general scheme of the testator in providing for George was in the form of trust limitations, and in no instance by absolute gift.

That he hadrthe utmost confidence in his wife’s judgment and conscientiousness.

That he was acquainted fully with her views regarding George.

That her views were identical with his own and were based upon common knowledge and experience.

In determining Mrs. Kemp’s intent regarding the use of the excluding phrase these facts were very properly urged upon the court as being entitled to great weight, and are they not of equal force in determining the intent of the donor in creating the power, as of the donee in executing it? Can the language of the will of the donor so illuminated be held to have been used to create a power to appoint George to receive a gross sum which might be readily squandered, and prohibit his appointment to receive a fixed income, when according to all the circumstances shown, such limited provision was, in the opinion of the testator, the only provision that could be of the slightest permanent advantage to him?

Van Brunt, P. J.,

in Maitland v. Baldwin, 70 Hun, 270, said: The familiar rule in reference to the validity of appointments under powers contained in wills, seems to be that the appointment is to be read as though it had been incorporated in the original will ”.

It is further claimed that under a power of appointment among a class no trust can be created. Two cases decided in this State are cited in support of this last proposition. Stewart v. Keating, 15 Misc. Rep. 44; Stuyvesant v. Neil, 67 How. Pr. 16, In the former the extent of the decision appears to have been that under a power to appoint among lineal descendants of the donor its attempted exercise so as to include in a contingency not unlikely to happen collateral relatives must be held invalid, and in the latter the learned court seems very properly to have held that where the intent was clearly to grant the power to select the objects out of the class named and apportion the property itself, the trustee could not limit the interest,therein of his appointees.

The other cases referred to hold simply that where a power of appointment is given limited to a class, and there is but one person living belonging to that class at the time of the execution of the power, that such sole survivor takes under the instrument creating the power and not by the act of the donee. Wickersham v. Savage, 58 Penn. St. 365; Pepper’s Appeal, 12 Cent. Rep. 463.

While I cannot find any direct authority in this State upon the point involved, still the weight of the reasoning in analogous cases appears to establish the validity of the trust created by Mrs. Kemp’s will. Beardsley v. Hotchkiss, 96 N. Y. 201; Crooke v. County of Kings, 97 id. 421; Genet v. Hunt, 113 id. 158; Towler v. Towler, 142 id. 372; Hillen v. Iselin, 144 id. 365.

Moreover the action of the only persons who could be at all affected adversely by the appointment as made disposes of any-lingering doubt upon the subject. By a document under seal executed by all of these parties its validity is recognized, and the trustees of the father’s estate are authorized to do all the acts necessary to carry it out. Many payments of quarterly installments have already been made to the trustees appointed by Mrs. Kemp. It is claimed that this consent was revocable and has been revoked; that it was nudum, pactum and merely a direction and without any consideration, but even so, family arrangements may be upheld where, in cases between strangers, like agreements-would not be enforced. Story Eq. Juris. (13th ed.), § 132.

The termination of a family controversy is sxifficient consideration for an agreement” (Pars. Cent. [8th ed.] 455), and' there are abundant authorities to support the proposition that family agreements may be supported without any consideration. Souverbye v. Arden, 1 Johns Ch. 240, and cases cited.

It is possible that in executing this release the parties thereto expected that George would not assert any additional claims, but there is no such recital in the instrument, nor was any pretense made on the argument or in the briefs that the assertion of a further claim by George was necessary to warrant a revocation. What is insisted upon is that this paper was a mere permission which might he revoked at any time, that the trustees were released from responsibility as long as it was extant, but that they were without power and George without redress should even whim or caprice induce its recall. If without action of any kind' upon the part of George this consent could be withdrawn, his subsequent conduct cannot, in fairness, be urged as justifying-such a course, especially when one of the parties so claiming has-actually acted as-a trustee of the trust he now seeks individually to attack.

The last of the disputed propositions that the power granted was an imperative power must be held not established for the-reasons stated in Tilden v. Green, 130 N. Y. 54: Trust powers are imperative, and their performance may be compelled in equity, unless their execution "or nonexecution is made expressly to depend on the will of the grantee ”, and according to the fair and reasonable interpretation of the language used in creating the power in the case at bar, its execution or nonexecution wasentirelv left to the discretion of the donee.

It may be well claimed that the requirement that George satisfy the trustees that he applied a certain amount to the support of his children out of the proceeds of one installment before he should become entitled to receive another is invalid, but if so, George is the only one who could object, and he makes no objection.

Judgment is, therefore, directed as prayed for in the complaint in accordance with the above, except that under the stipulation the question relating to trademarks is for the present withdrawn.

Judgment accordingly.  