[6 NJSuper Page 600] Plaintiff is one of the beneficiaries named in the will of Arnold G. Behn who died on January 19, 1944. She receives one-thirtieth of the income of the residuary estate and is entitled to receive a like share of the corpus upon its liquidation in the two-year period which will commence eighteen years after testator's death. She asks the court to construe the will and declare whether her interest in the income and her interest in the corpus are vested and whether they have merged; whether she is presently entitled to the outright possession of her interest in the estate excepting her residuary interest in the Catherine Mayer Trust; and if so that the trustees be directed to liquidate the estate and distribute it to her and the other similarly situated beneficiaries. There are ten such persons, nine of whom have each a one-thirtieth interest and the other Eleanor L. Williams, one of the trustees, has a two-thirds interest. Alfred Reed, one of the three trustees, has a one-thirtieth interest. All of the above, as well as the other trustee, William B. Taffett are defendants. The trustees, as such, resist plaintiff's application and seek the forfeiture of her interest under a no-contest clause in the will. Miss Williams and Mr. Reed, as individuals, have answered that the complaint does not allege
any cause of action against them. Decrees pro confesso were entered against the other defendants under the old practice. Later Mrs. Mayer was added as a party defendant because of her interest in the Catherine Mayer Trust and a default has been entered against her.
Plaintiff, now receiving income, seeks the acceleration of the payment of corpus. The will directs the payment of the latter not sooner than January, 1962, nor later than January, 1964. Plaintiff argues as follows: "The estate having been completely administered by the executors, the trustees merely hold the assets for the purpose of paying the income until the time for distribution indicated by the testator, and then pay the corpus to the same individuals. There is no preceding life estate in third persons; there is no gift over; there is no discretion in the trustees as to manner, time, or amount of payment of income" -- the trust should be terminated on the authority of Newlin v. Girard Trust Co. , 116 N.J. Eq. 498; Ampere Bank and Trust Co. v. Esterly , 139 N.J. Eq. 33, and Camden Safe Deposit and Trust Co. v. Guerin , 89 N.J. Eq. 556. This argument stems from the rule that a sole trustee who is also the sole beneficiary holds the property free from the trust.
It will be noted that in the Newlin case all the life tenants sought the termination of the trust and the immediate distribution of the corpus to them. With this in mind Vice-Chancellor Backes said: "The entire beneficial interest in the estate being in the four children, and as no one else, now, or in the future, has, or can have, any interest in it, and all being sui juris , they may bring the trust to a close." In this case testatrix gave the income to her husband for life, then to her children for life and upon their death directed the trustee to pay their shares of the corpus to their executors or administrators. The Court held that the legal effect of this was a gift of the corpus to the children of testatrix, observing that the children "were the object of their mother's solicitude; their issue were not within her contemplation."
In Camden Safe Deposit & Trust Co. v. Guerin (supra) , the gift over of the corpus was held invalid and testator died
intestate as to it. And it so happened that the persons entitled to the income for life received the corpus , by inheritance, in the same ratio. The Court, finding that there was no active trust, held that the owners of the corpus were entitled to its possession. The Court said at page 561: "It is not so much a question of merger as of the partial termination of a trust by operation of law."
In the case before us the language of testator, delaying the distribution of the corpus , is plain. It is to ignore reality and to distort unmistakable language to contend that when testator provided that plaintiff should receive annually one thirtieth of the income of his estate and some time between January, 1962, and January, 1964, in the discretion of the trustees, a like share of the corpus , he intended, in legal effect, an outright and immediate bequest of the corpus. A competent person may, by will, make any disposition of his property that pleases him provided it is not contrary to law or public policy. While it may not be necessary to consider testator's reasons for delay in paying over the corpus , his will suggests several. For one thing he desired to favor his faithful employee George Jackson and gave him a five-year option to purchase testator's business on liberal terms, one of which was the spreading of the payment of the consideration, by unsecured notes, over a fifteen-year period. It so happened that Mr. Jackson exercised his option in 1945 and the trustees hold his notes, at this time, for $43,435.91; the last note being due and payable in April, 1960. It is a matter of common knowledge that such notes are not readily marketable and if liquidation were necessary they would probably bring less than their face value. Nor do they lend themselves to distribution in kind. And above this it was probably the intention that these notes remain in friendly hands, that is to say, in the trustees.
In my opinion it is unmistakably clear that testator intended that the distribution of corpus should be delayed until at least 1962. And it was his unquestionable right to do so.
Plaintiff contends the trust is not an active one. This is not so. The trustees are charged with many duties that require the use of their discretion. Fidelity Union Trust Co. v. Mintz , 125 N.J. Eq. 52.
In the matter of terminating a trust the intention of the testator or settlor is paramount to the wish of the beneficiary. In this connection it is interesting to note the following statement by Chief ...