
    William A. Connolly and Mary Ellen McDonnell, Plaintiffs, v. Daniel Connolly, Individually and as Trustee of the Last Will and Testament of Patrick Connolly, Deceased, and Others, Defendants.
    Second Department,
    November 29, 1907.
    Will— trust of personal property — when, trust extinguished by release of interest -^-unexecuted power of appointment.
    A bequest of a residuary estate, consisting wholly of personalty, in trust, for the: benefit of the testator’s wife for life, at her death the income to be divided equally among five children for their lives, with a power to each child to dispose of his share of the principal, which bequest by consent of parties is construed to mean that each child had a power of appointment by will as to the share from which he was entitled to a life income, vests the children, who arc also next of kin, with vested remainders by operation of law on their failure to exercise their power of appointment by will.
    Hence, when, during the operation of section 3 of chapter 417 of the Laws of 1897 (since repealed) allowing the beneficiary of a trust of personal property to release his interest in the income and terminate the trust, the said children, after the expiration of their mother’s life estate,.mutually released to each other their right to income from the trust and then released to themselves as remaindermen said right to income, the trust is terminated and they become entitled to receive the property.
    The fact that said children were also beneficiaries of the trust created for their respective lives is no obstacle to their taking vested remainders limited upon the trust estate; nor does the existence of an unexecuted power of appointment interfere with -the vesting of the remainders.
    Under the circumstances it is immaterial that the remainders were not created by will, but vested by operation of law.
    Although by the exercise of their power of appointment the remaindermen might divest themselves of their remainders acquired by operation of law, yet by their mutual releases of the income to themselves as remaindermen, their power of disposition was merged in the greater estate so acquired.
    Submission of a controversy upon an agreed statement of facts pursuant to section 1279 of the Code of Civil Procedure.
    
      John J. Fitzgerald, for the plaintiffs.
    
      William D. Veeder, for the defendants.
   Miller, J.:

This is a submitted controversy. Patrick Connolly died December' 18, 1898, leaving a last will and testament made October 27, 1897, containing, among others, the following provisions: “ Third. I give devise bequeath all the rest, residue and remainder of my estate to my beloved wife Catharine for and during her natural life. Fourth. On the decease of my wife Catharine I give, bequeath and devise my estate as follows: I direct my executor to convert all my estate into personalty and' to take the sanie, into the possession of my said executor which I hereby give and bequeath to him upon "the following trusts, to apply and divide the income of said estate equally for the benefit of each of my children during their.life, with "power of disposition to each of my children of one-fifth thereof, it being my intention that my Executor and Trustee,; Daniel Connolly, shall divide my estate into five equal' parts on the’ decease of my ■ wife Catharine,' and to apply the income of one said fifth parts to , my son Daniel during.his life, with power of the disposition of the ’principal of a one-fifth' part to him, and also the same power of' application of the income and disposition of principal of one-fifth part of my estate to each of my children, Thomas, "William and Catharine. Cqnnolly and Mary Ellen McDonnell, respectively.”'. The testator’s estate consisted solely of personalty. By the/consent and with the acquiescence of all parties the will, was construed by the decree admitting it to probate. The following is the material provision qf said decree, viz.: “ And it is further Adjudged- and '; Decreed that the testator meant and intended that none of Said children aforesaid, namely, Daniel, Thomas, William and Catharine • Connolly and Mary Ellen McDonnell, should have the fight or . power to dispose of so much of the said estate as is adjudged to be held in trust as aforesaid for such child.” The testator was survived by his- wife and said five children. The widow died intestate March 15, 1900. On August 29,1906, said children executed assignments. so as to vest in each all the right, title and interest of the others in and to. the one-fifth part of the estate of which each was respectively entitled to the income during his life, and then each released to himself as the person entitled to the remainder his interest in the income of said fifth part; and the. plaintiffs now ask that the trustee. pay over to them their respective shares, on. the theory that the trust estate has terminated and become ’ merged in the remainders, ■ pursuant to Laws of 1897, chapter 417, section 3. .

The contention of the plaintiffs is that the testator failed to dispose of the residue of the trust estates created by him,. and that'' such residue vested in liis next of kin' as of the time qf - his death ;. while thé trustee contends that there was no intestacy, and that he would not be protected in the event of the exercise of tlie power of disposition.

The provision of said section 3 of chapter 417 of the Laws of 1897, which allowed a beneficiary in a trust for the receipt of'the income of personal property,, who was.also entitled to a remainder,in the whole or a part of the principal’funds so held in trust,to release hiinterest in said income, and thereby to terminate the trust, was. repealed by chapter 87 of the Laws of 1903, but said repealing act contained the following provision, viz.: “ § 2. The provisions of this act shall not impair or affect any rights existing at the date of its passage; but the act hereby amended shall have the same force and effect with respect to stich existing right as though this amendatory act had not been passed.” It is not disputed that if the plaintiffs had the right to terminate the trust prior to the passage of said chapter 87 of the Laws of . 1903, said right was saved by section 2, quoted supra. In effect the testator created five separate| trusts, and gave each of his children the whole income of one. If, therefore, each had an absolute and indefeasible title to the whole or a part of the remainder, not subject to be divested or to diminution, he had the right to terminate the trust. (See Matter of United States Trust Co., 175 N. Y. 304; Cook v. Straiton, 41 Misc. Rep. 206 ; affd. on opinion below, 96 App. Div. 625.) We must determine, therefore, the nature of the plaintiffs’ interests in the undisposed-of remainders.

According to the literal wording of the provision of the decree construing the will, quoded supra, the life beneficiaries had no power under the will to dispose of said remainders. If that is deemed to be the construction adopted by said decree, the language of the will assuming to confer the power of disposition must be disregarded, and in that case there can be no doubt that the next of kin of the testator took vested remainders as of the' time of his death. Both sides to this controversy assume, however, that the provision of said decree construing the will only related to the power to assign in the lifetime of the beneficiary, and, hence, that each had-the power of appointment by will respecting the share of which he was entitled to the income for life. We will, therefore, treat said decree as having that effect, without deciding that it does have. The testator’s next of kin, therefore, took either vested or contingent remainders. The fact that the five children were also beneficiaries of the trust created for their respective lives is no obstacle to their taking vested remainders, limited upon said trust estate. (Doane v. Mercantile Trust Co., 160 N. Y. 494, and cases cited on p. 499.) Nor does the existence of an unexecuted power of appointment interfere with the vesting of the remainder. (Doe v. Martin, 4 Durn. & East, 39, 65; Smith v. Lord Camelford, 2 Ves. Jr. 698 ; Sandford v. Blake, 45 N. J. Eq. 247; Grosvenor v. Bowen, 15 R. I. 549; Root v. Stuyvesant, 18 Wend. 257, 268.) Section 31 of the Real Property Law (Laws of 1896, chap. 547) provides: “The existence of an unexecuted power of appointment does not prevent the vesting of á future estate, limited in default of the execution of the power.” So far as this question is concerned it cannot matter that the remainders are not created hy the will but arise by operation of law. In default of the execution of the: power of appointment there would certainly be intestacy, and the:, next of kin, who happen in this case to. be the beneficiaries, would take precisely as though the will had in terms limited remainders to them in default of the execution of said powers. There is no uncertainty either as to the persons to whom or the event upon which the remainders are limited (see Real Prop. Law [Laws of 1896, chap. 547], § 30); the persons who take are the next of kin of the' testator, and the event on which the remainders are by operation of law limited is the determination of the precedent estates, and, as we have seen supra, said life beneficiaries may take remainders vested in interest which can only vest in possession in their heirs or next of kin, their devisees, legatees, grantees or assigns.. The only possible effect, therefore, of the power of disposition conferred by the will is to.render it possible for the remaindermen to divest their own interest by the execution of said power, but it seems clear that the power is merged in or absorbed by the greater estate. Having vested remainders, they have the absolute power of disposition thereof and their estate is not cut down by the superfluous .provision of a will purporting to confer a. power. Chancellor Kent said (referring to the English cases) that the weight of authority is in i favor of the conclusion that such a power may subsist with andj .qualify the fee, although the good sense and reason of the thing is j the other way, but that provision is made by the Hew York Revised.' Statutes for the extinguishment of the power in such case. (4 Kent’s Com. 348; and see Real Prop. Law, § 131; also, Grosvenor v. Bowen, supra.) It comes to. this, then, that under the law as it was at the time of the making of this will and of the death of the testator and of his widow, the beneficiaries of the trusts created by him ■ had the right to take the entire estate notwithstanding his intention to the contrary. He could have prevented this by bequeathing remainders limited in default of the execution of the power of appointment.

The plaintiffs should have judgment in accordance with the terms of the submission. -

Woodward, Jenks, Hooker and Rich, JJ., concurred.

Judgment for plaintiffs in accordance with terms of the submission.  