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Marx v. Rice

Decided: March 28, 1949.


On appeal from the former Court of Chancery.

For affirmance: Justices Case, Heher, Wachenfeld, Burling and Ackerson. For reversal: None. The opinion of the court was delivered by Ackerson, J.


We are concerned here with appeals from two orders of the former Court of Chancery striking out successively two causes of action asserted in the amended complaint filed herein by heirs at law and next of kin of Bernard Strauss, deceased.

The first appeal concerns the nature and effect of a power of appointment given in his will to his wife, Florence Rice Strauss. The second involves the effect of a forfeiture clause contained in the will. A collateral question is presented with respect to the propriety of the court's refusal to award counsel fees to the complainants payable out of the estate.

Bernard Strauss died in 1906 leaving a will, which was duly probated, in which he gave one-half of his residuary estate to his wife Florence absolutely, and the remaining half to his only child, Irving Strauss, for his life with remainder to Irving's issue, and in default of issue to Florence in fee, should she survive Irving; otherwise, "to such person or persons as my said wife Florence, shall by her last will and testament appoint, and in case she shall fail to make such appointment," then to Bernard's heirs at law and next of kin. A subsequent paragraph of the will requested the donee of the power to make such donations as she might "deem proper" to such "charitable institutions" in Essex County, New Jersey, as she might select, and then appears the litigious clause, which forms the basis of the first cause of action in the stricken complaint, i.e., "and I do further request her in case she shall exercise the power of appointment by will which I have hereinabove given her, to include among the beneficiaries by her to be designated such of my own blood relations as she may deem worthy to be the recipients of her bounty".

Mrs. Strauss died on January 31, 1918, never having remarried, predeceasing her son, Irving, who died in October of 1947, at the age of 57, without issue. She left a will which was duly probated, in which, after disposing of her own personal estate, she exercised the power of appointment given to her by the will

of her deceased husband. The real and personal property subject to the power was worth about $500,000 in 1918 when she died, and at the time of this litigation was valued around $2,000,000. Mrs. Strauss appointed all of this property to her executors upon certain trusts. Two funds, one of $10,000 and the other of $24,000 were placed in trust for certain selectees from her deceased husband's kindred. The remainder she directed to be sold and the proceeds divided into four equal shares for the benefit exclusively of her own kindred as follows: one share to be held in trust for her sister-in-law, Bertha J. Rice, widow of her deceased brother Jonas, income for life, remainder to testatrix' nephew Joseph Rice; the other three shares in trust, income for life to her brother Alexander S. Rice and sisters Rose R. Siegel and Leah R. Fuld, remainder to the children of said Rose and Leah. The children of Rose are Helen S. Simpson and Alice S. Hannoch, and the children of said Leah are Florence F. Vogel and Abram L. Fuld. All of these persons are made parties defendant herein, including Mildred N. Fuld, wife of Abram Fuld, Harold E. Grotta, substituted sequestrator for Mildred Fuld, and many judgment creditors of Abram L. Fuld.

The complaint herein was filed by those of Bernard's own kindred who were not benefited by the aforesaid appointments. In the first cause of action they seek the construction of his will to the end that the exercise of the power of appointment by Mrs. Strauss be decreed to be contrary to the true meaning of the will and therefore null and void; that an accounting be taken and the estates thus attempted to be appointed be decreed to be vested solely in Bernard's own kindred. The second cause of action seeks a decree vesting in complainants the estates appointed to Florence's own kindred on the ground that certain alleged conduct by them was an attempted "avoidance" of her will and therefore subject to the forfeiture or no-contest clause contained therein.

On separate motions by the defendants each of the aforesaid causes of action was stricken as not disclosing cause for equitable intervention, hence these appeals.

In support of their first appeal the complainants insist that under the terms of Bernard's will, and the pleaded circumstances, the power of appointment by his wife was restricted solely to his own heirs at law and next of kin (or his blood relations) other than his wife and son.

A power is said to be general when it is exercisable in favor of any person the donee may select, and special, limited or particular when it is exercisable only in favor of persons or a class of persons designated or described in the instrument creating the power. Brown v. Fidelity Union Trust Co., 126 N.J. Eq. 406, 422 (Ch. 1939); The Pennsylvania Co., etc., Annuities v. Kelly, 134 Id. 120, 131 (Prerog. 1943); 41 Am. Jur. (Powers) ยง 4, p. 808. In the construction of a testamentary power, like other parts of the will, the intention of the donor always governs. U.S. Trust Co. v. Montclair Trust Co., 133 N.J. Eq. 579, 583 (Ch. 1943).

The complainants' theory is that under Bernard's will what would otherwise be a general power must be cut down to a special or limited one for the sole benefit of his heirs at law and next of kin because of the gift over to them in the event of no appointment. They rely upon the old English case of Bristow v. Warde, 2 Vesey Jr. 336, 21 E.R.C. 356 (1794), and some early American cases, primarily Morgan v. Halsey, 97 Ky. 789, 31 S.W. 866 (1895), 36 L.R.A. 716, to support this view. In Bristow v. Warde, by marriage articles, funds of each party were agreed to be settled on the husband and wife for their joint lives, and then as the husband might appoint, and in default of appointment to the children of the marriage. Lord Chancellor Loughborough held that the children were the primary objects of the marriage articles, saying "particularly here where equal sums were brought in by both parties to be settled for the family", the husband did not have an indefinite power to appoint, and his creditors could not attach the fund as in the case of a general power.

However in later cases the same English and American courts refused to follow their earlier holdings, ...

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