On appeals from the former Prerogative Court.
Nos. A-207, 209, 210: For modification: Chief Justice Vanderbilt and Justices Case, Heher, Wachenfeld, Burling, and Ackerson. Opposed: None. No. A-211: For affirmance: Chief Justice Vanderbilt and Justices Case, Heher, Wachenfeld, Burling, and Ackerson. For reversal: None. The opinion of the court was delivered by Burling, J.
[1 NJ Page 389] These are four separate appeals arising out of the same cause which were consolidated for argument in this Court. No. A -- 207 is the appeal of The Trustees of Phillips Academy, the residuary legatee under the will of Minnie G. Bumsted, deceased; No. A -- 209 is the appeal of James J. Reardon and Commercial Trust Company of New York, surviving Trustees under the said Will; No. A -- 210 is the appeal of the
Guaranty Trust Company of New York, administrator c.t.a. of the Estate of William L. Casey, deceased, a general legatee under the said will, and No. A -- 211 is the appeal of the First National Bank of Jersey City, it being the executor of the will of Pierre F. Cook who was the administrator and next of kin of Marie C. Cook, another deceased general legatee thereof. In each appeal the remaining named parties in this paragraph are respondents.
The matter originated in the Prerogative Court when James J. Reardon and the Commercial Trust Company of New York, as surviving Executors and Trustees under the will and codicil of Minnie G. Bumsted, deceased, filed a petition for a decree of distribution of the balances of corpora of certain trusts created by the will and hereinafter referred to. The statement of questions involved requires a construction of four trust clauses thereof and the residuary clause.
The testatrix, Minnie G. Bumsted, who died on or about October 6, 1930, left an estate approximated to be $1,500,000.00 in value at the time of her death. In her will and codicil, she bequeathed pecuniary legacies in the amount of $476,000.00 to 22 beneficiaries. She also provided for the establishment of 4 trusts in the total designated principal amount of $435,000.00, the income of which was directed to be paid to specified beneficiaries for life. The principal amounts of these respective trusts were as follows:
a -- Clara H. Stoddard Trust -- $10,000.00
b -- Minnie A. Dimse Trust -- $200,000.00
c -- James A. Noble Trust -- $25,000.00
d -- James J. Reardon Trust -- $200,000.00
The clauses creating each of the above trusts provide that upon the death of the respective life tenants the principal of that trust shall pass into and form a part of the residuary estate. The residuary clause reads as follows:
"Fifteenth. All the rest, residue and remainder of my estate, both real and personal, of every nature and kind, and wheresoever situate, of which I shall die seized and possessed, or in any manner entitled to, including the trust funds hereinbefore set apart for the benefit of my sister-in-law. Clara H. Stoddard and Minnie A. Dimse, and said
James A. Noble and James J. Reardon, from and after their respective deaths, after the payment of said inheritance taxes, I give, devise and bequeath to the corporation, by whatever name or corporate title the same may be known, conducting the educational institution known as Phillips Academy, at Andover, Massachusetts, for the general purposes of such institution, to have and to hold the same unto the said corporation, its successors and assigns forever."
As a result of the nationwide depression of the early 1930's there was a substantial depreciation in the values of the assets of the estate, making it apparent early in the course of the administration of the estate that liquidation of the estate would probably produce insufficient money to pay in full the money legacies and trust funds under the will and codicil. Accordingly the executors informed the beneficiaries of the condition of the estate and submitted to them, before undertaking to liquidate the estate, the advisability of the beneficiaries entering into an agreement for the postponement of the payment of legacies and trust funds under the will and codicil and for the postponement ...