Cross v. United States Trust Co.

Barrett, J.

I am unable to concur in the conclusion arrived at by the presiding justice. I agree, however, that the Rhode Island executors have no standing to obtain a judicial construction, in the courts of this state, of a Rhode Island will. But the presiding justice sustains the complaint because certain individual plaintiffs are joined with these executors. The question at once arises, who are these individual plaintiffs, and what rights are they here seeking to enforce? They are children of the testatrix, and they make a direct attack upon certain of the trusts created by her will. If these trusts are declared to be void* then these individual plaintiffs claim to take under the residuary clause of the will. Their complaint proceeds solely upon this theory. The trusts are alleged to contravene our statute-against perpetuities, -and judg*143rnent is demanded that the corpus of the trust-estate be delivered over by the trustee to the Rhode Island executors for distribution under the residuary clause of the will. We are thus asked, not to aid the trustee to execute the trust, but directly and affirmatively to destroy the trust. We are asked to do this, too, with regard to a trust perfectly valid by the law of the testatrix’s domicile; and, having done it, to turn over the corpus of the destroyed trust-estate to the foreign executors tor distribution under the terms of the very will which we shall have thus emasculated. It must not be overlooked in this connection that, so far as the executors are concerned, the will has long since been fully executed. The executorial duties were, in fact, completed in 1885, and the estate was then fully administered. The corpus of this trust-estate had previously been reduced to possession, and, in July, 1885, it was delivered by the executors to the trustee named in the will. In November, 1885, the final account of the executors, showing all their proceedings, was presented to the proper probate court of Rhode Island, and in January, 1886, such final account was duly allowed. Mr. Norman F. Cross testified that thereupon the executors “had their releases from the probate clerk of Rhode Island at Westerly. ” He added that the other provisions of the will had been carried out, so that “there is nothing remaining under the will.”

For the last five years, then, the executors have been functi officio, and the United States Trust Company has pursued the even tenor of its way as a legatee under the trust directions contained in the will. If this trustee were incompetent to take the property so bequeathed to it in trust, or if some of the trusts were void under the laws of this state, the proper time to raise that question was before the will was executed, and the property turned over to the trust legatee by the Rhode Island executors. The question discussed in the eases in this state, to which we have been referred, (notably Chamberlain v. Chamberlain, 43 N. Y. 424; Manice v. Manice, Id. 303; and Despard v. Churchill, 53 N. Y. 192,) was whether the legacies should or should not be paid over in the first instance to the legatees. In no case does there seem to have been an attempt, after payment, to compel the legatee to restore his legacy upon the theory that, if personal, it should not have been paid to him at all, or, if in trust, that so much of the trust as was valid under our laws had terminated Here, then, we have a trust-estate created by a Rhode Island will, and entirely valid by the law of the testatrix’s domicile, sought, not to be frustrated in its origin, but to be destroyed while in due process of execution, because of the incident that the trustee happens to be a New York corporation. The fact that the property, which is entirely personal, may be here, •and that the beneficiaries live here, can have no bearing upon the question. The residence of the beneficiaries is wholly immaterial, and, as personal property has no locality, the law of the owner’s domicile governs its transmission, either by last will and testament, or by succession, in case of intestacy. Indeed, if the testatrix had bequeathed this property to a Rhode Island trust ■company upon these same trusts, we would hardly have heard of these present complaints, even if the foreign trust company had thought it more prudent to keep the bonds in one of our safe-deposit companies, and to send an agent here semi-annually to detach the coupons and distribute the proceeds among the local beneficiaries. But what difference would there be in principle if the testatrix had bequeathed the property, still upon the same trusts, to a Rhode Island individual, who should subsequently come here to live and bring the property with him? Or to a Massachusetts individual, who should ■do the same thing? Or even to a New York individual, who should keep the property locked up in a Boston safe-deposit company? The fallacy of the position, as it seems to me, lies mainly in regarding the locality of the subject, —that being exclusively personal property,—rather than the domicile of the testatrix. In the case at bar, the testatrix certainly conferred upon the trustee the legal title to the property in question. The trust company is thus the *144owner of such property subject to its trust duties. Shall we, notwithstanding an undoubted legal- title, take property from its owner, and hand such property over to others? If so, by what authority? And to whom shall we hand it, and for what purpose. The only authority suggested is our statute against perpetuities.

But it was held, both in Chamberlain v. Chamberlain and Despard v. Churchill, supra, that it is no part of the policy of this state to interdict perpetuities or accumulations in another state, and in Despard v. Churchill it was explicitly held that, although a foreign will disposes of property in this state, by provisions which are invalid here as running counter to our statute against perpetuities, yet the courts of this state may not hold the bequest void when it is valid by the law of the state by which the disposition of the property is to be governed. Our courts may, it was intimated, refuse their aid to enforce or administer here such a bequest. But this aid is not now sought. The trustee, in fact, needs no such aid, and the plaintiffs’ sole demand is that we hold the bequest to be void, and take the subject thereof out of the hands in which it is duly and legally vested. This - would be distinctly contrary to the principle enunciated in Despard v. Churchill, and there is nothing to warrant it in Chamberlain v. Chamberlain. In the latter case it was held that a foreign corporation may take personal property under wills executed by citizens of this state, if by the laws of its creation it has authority to acquire property by bequest. The reasoning which led to this conclusion, while recognizing the rule that the validity of •particular bequests will depend upon the laws of the domicile of the legatee, does not conflict with the doctrine of Despard v. Chuichill as to the action or non-action of the courts of such legatee’s domicile in enforcing or annulling a bequest invalid by its laws. . Next, to whom are we asked to give this property? Not, certainly, to the next of kin. Even the individual plaintiffs have not had the hardihood to claim the distribution of the property under our laws as in case of intestacy. It was impossible at this point to-ignore the Rhode Island will, and so, after insisting that it shall be tampered with, where the provisions run counter to our statute law, the plaintiffs would utilize it to find some object in whose favor a successful judgment may run. Thus the executors, who have long since been released, are to be recalled into being by the courts of this state, in order that there may be some one to whom the subject of the destroyed trust may be required to be delivered. This is a most anomalous suggestion. These executors, when officially alive and in the performance of their functions, delivered this very property over to the trustee under the express terms of the will. After the lapse of five years—having meanwhile been judicially released as executors by the courts of Rhode Island—they are to be asked to take the same property back. But suppose they should refuse to accept it? Suppose they should say, “ What have we .to do with this property?” What would become of our decree? And what position would the trust company then occupy? If, however, the executors did accept the property, what could they do with it? Take it to Rhode Island, and ask the instructions of the courts of that state? It is inconceivable that such a course would alter the substance of the situation. It might result in a change of agency or trusteeship, but that is all. It surely would not-result in the courts of Rhode Island altering the testatrix’s will. Those courts certainly would not permit the distribution of the property under the residuary clause, merely because we had ordered the property out of the state, and had forbidden the execution within our borders of a trust created in their state by a person domiciled there, and perfectly valid under their laws. The courts of that state would probably say to the executors: “We long since approved of your course in delivering this property to the trust company, as required by the will, and thereupon we released you from your executorial functions. By what authority have you now officiously attempted *145to aid the courts of another state in subverting the valid testamentary purposes of a citizen of this state? You had no right to accept this property. But, as it is here, we will give it hospitality, appoint a competent trustee, and see that it is applied strictly in accordance with the will of the testatrix.”

I think, therefore, that the complaint was properly dismissed, but not for the reasons assigned by the learned judge at special term. I agree with the presiding justice that there is no just distinction, with regard to the question under consideration, between charitable legacies and legacies of any other kind; and I do not agree with the learned judge at special term in the suggestion that the proper course for the court is to refuse to assume j urisdiction, and “to remit the property, and, if needs be, the persons, to the Rhode Island courts.” How this could be done without assuming jurisdiction, is not apparent. I place my judgment for affirming the dismissal of the complaint upon the distinct ground that we cannot, by an affirmative decree, directly nullify a trust bequest, in due process of execution, which is valid by the law of the testatrix’s domicile. This we would have to do before the property could be remitted to the Rhode Island jurisdiction. And just there is the distinction between this case and Despard v. Churchill. If the subject of the present trust had never been reduced to possession by the executors, or administered, the disposition made in Despard v. Churchill might have served as a guide. The assets which, in that case, were remitted to the California executors, were so remitted expressly for administration. It was upon that theory that the court distinguished between directly aiding the execution of a bequest which is in violation of our statute law, and directly holding such bequest to be void. The difficulty was there avoided by simply remitting to the California executors, for administration in that state, assets which had not yet been reduced to possession. Thus, the court neither directly aided in carrying out the objectionable bequests, nor in defeating them. It neither held them to be valid nor void. It simply remitted them to their proper destination, in the first instance, and left the rest to the law of California. Here, however, the assets were reduced to possession by the Rhode Island executors, and fully administered. The assets were delivered in due course, and in execution of the will, to the trust legatee. It is idle to talk of remitting them anywhere thereafter. In my opinion, the judgment appealed from should be affirmed, with costs.

Bartlett, J.

I agree with the presiding justice that where the question

is properly raised the courts of this state will not permit a trust to be administered here which is contrary to the laws of this state. On the other hand, it seems to me that Mr. Justice Barrett is right in holding that neither the Rhode Island executors nor the individual plaintiffs have any standing to question the validity of these trusts, in this jurisdiction and at this time. As he well says, if the trustee were incompetent to take the property in trust, or if some of the trusts were void under the laws of this state, the proper time to raise that question was before the estate had been administered, and the property turned over to the trust legatee by the executors. Furthermore, I am at a loss to see what benefit the plaintiffs could derive from any judgment which could properly be rendered, even if they are entitled to relief. If we send the fund back to Rhode Island,—and I think we are bound to do so, if we adjudge .the trusts invalid,—the courts there would simply appoint a Rhode Island trustee to do in that state just what the United States Trust Company is doing here, and the plaintiffs would be no better off than they are now. I am in favor of affirming the judgment, on the ground that the plaintiffs did not make out a case entitling them to any relief.