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Bankers Trust Co. v. New York Women''s League for Animals

Decided: November 12, 1952.

BANKERS TRUST COMPANY, A CORPORATION OF THE STATE OF NEW YORK AUTHORIZED TO TRANSACT BUSINESS IN THE STATE OF NEW JERSEY, SURVIVING EXECUTOR OF THE LAST WILL AND TESTAMENT OF WILLIAM J. BERG, DECEASED, PLAINTIFF-RESPONDENT,
v.
NEW YORK WOMEN'S LEAGUE FOR ANIMALS, A NON-PROFIT CORPORATION OF THE STATE OF NEW YORK, DEFENDANT-APPELLANT, AND DOROTHY K. FUGUET, EXECUTRIX OF THE LAST WILL AND TESTAMENT OF WILLIAM D. FUGUET, DECEASED, AND GEISSE FUGUET, DEFENDANTS-CROSS-APPELLANTS, AND THE UNKNOWN HEIRS AND NEXT-OF-KIN OF WILLIAM J. BERG, DECEASED, AND THE STATE OF NEW JERSEY, DEFENDANTS-RESPONDENTS



On appeal from the Superior Court, Chancery Division, whose opinion appears at 17 N.J. Super. 398.

Eastwood, Goldmann and Francis. The opinion of the court was delivered by Goldmann, J.A.D.

Goldmann

Involved in the appeal and cross-appeal taken from the final judgment of the Chancery Division of this court is the proper construction of the will of William J. Berg who died on March 13, 1950, a resident of New Jersey. His wife, Rita Fuguet Berg, predeceased him. No children were born of the marriage and decedent left no known heirs-at-law or next-of-kin him surviving.

Berg's last will and testament was duly admitted to probate by the Surrogate of Essex County on April 21, 1950,

and letters testamentary thereon were issued to plaintiff and William D. Fuguet, two of the executors named therein. Clarence M. Tappen, the third executor named in the will, predeceased the testator. William D. Fuguet died June 21, 1950, and plaintiff has continued to act as sole surviving executor. Decedent had also designated plaintiff, Tappen and Fuguet as trustees under the will.

By the provisions of his will (to take effect upon his surviving his wife) decedent made a number of cash bequests, among them a gift of $10,000 to the New York Women's League for Animals (hereinafter called "League"). By paragraphs 13 and 14 of Article III of the will he disposed of his residuary estate as follows:

"13. All the rest, residue and remainder of my property, of whatsoever nature and wheresoever situated, of which I shall die seized or possessed, or in which I shall have any right or title whatsoever, or over which I shall have any power of appointment at the time of my death, up to Two Hundred Thousand Dollars ($200,000.) (free of tax), I give, devise and bequeath unto the New York Women's League for Animals, Inc., a corporation organized under the laws of the State of New York, it being my desire that this money should be used for the purchase of a farm in a rural district which shall be used for the care of animals that may come under its care.

14. Should my residuary estate exceed the sum of Two Hundred Thousand Dollars ($200,000.) after the payment of all charges, taxes, expenses of administration, commissions, etc., then such excess shall be distributed to the survivor or survivors of the following persons in equal proportions: -- Rita Fuguet Laws, William D. Fuguet and Geisse Fuguet."

Rita Fuguet Laws, a niece of testator's wife, predeceased the testator. Since she is not within the class of persons referred to in R.S. 3:2-18 (now N.J.S. 3 A:3-13), the bequest to her of a share in the residuary estate has lapsed. William D. Fuguet, as already noted, survived the decedent; he died testate and letters testamentary were duly issued to his widow Dorothy K. Fuguet by the Surrogate of New York County, New York, upon the probate of his last will and testament in that court. Geisse Fuguet, a nephew of decedent's wife, also survived decedent.

The residuary estate, before costs of these proceedings (in excess of $4,500), is estimated at about $55,000. There is also a trust for the life benefit of Louise Pomme, maid to decedent's wife, and her mother, having a value at the time of the trial of approximately $30,000. Under the will this fund will fall into the residuary estate upon the death of the survivor of the two life beneficiaries. Thus, some $50,000 is presently available to the League under paragraph 13, to be augmented at a future undetermined date by an estimated $30,000.

The League advised the surviving executor that it could not accept the gift if it were determined that paragraph 13 imposed a condition that the fund was to be used for the indicated purpose only, since this would require the League to embark upon an entirely new project involving expenses substantially greater than any amounts which it might receive. The executor thereupon instituted this action to construe the will and, in particular, to obtain a judicial determination as to the distribution of the residuary estate under paragraph 13 and of the remainder of the Pomme trust. It joined as defendants the League, Geisse Fuguet and Dorothy K. Fuguet, as executrix of the last will and testament of William D. Fuguet. The State of New Jersey was made a party defendant because of the possible escheat of the property (R.S. 2:53-15 et seq. , now N.J.S. 2A:37-11 et seq.). Decedent's unknown heirs and next-of-kin were brought in as defendants under an amendment to the original complaint. All defendants except the State have answered, the substituted guardian ad litem appointed by the court (Rule 3:17-3) answering on behalf of the unknown heirs and next-of-kin.

The pleadings define the positions taken by the several answering defendants. The League contends that the language of paragraph 13 is merely advisory and precatory, and decedent did not intend to impose a condition or limitation. If, however, the language be held mandatory, the League claims the residue should be distributed to it under the

cy pres doctrine. On the other hand, Dorothy K. Fuguet, as executrix, and Geisse Fuguet, the contingent residuary beneficiaries, maintain that paragraph 13 constitutes a mandatory direction and, since the League refuses to accept the gift so conditioned, the trust must fail; that the doctrine of cy pres is inapplicable, and that paragraph 14 of the will is sufficient to pass to them the legacy bequeathed under paragraph 13 as well as, eventually, the principal of the Pomme trust. The substituted guardian ad litem agrees with the Fuguets up to the point where they claim the funds; he argues they do not take, but that decedent died intestate and the funds escheat to the State.

After a hearing, the Chancery Division judge filed his opinion (17 N.J. Super. 398 (Ch. 1952)) and entered the judgment under appeal. That judgment holds: (1) the trust created by paragraph 13 of the will is a charitable trust; (2) the provisions of that paragraph are "mandatory and imperative"; (3) the gift did not lapse by reason of the League's refusal to accept it; (4) it did not become part of the residuary estate to be disposed of under paragraph 14 of the will; (5) decedent did not die intestate with respect to the legacy bequeathed by paragraph 13 or the principal of the Pomme trust, and these funds did not escheat; (6) the will exhibits testator's general intention to make gifts to charity, particularly to those connected with the care of animals; and (7) testator's intention can be effectuated "as nearly as possible" by awarding the legacy under paragraph 13, as well as the principal of the Pomme trust upon the death of the life beneficiaries thereof, "to such charitable institution or institutions as shall have among their objects the care of animals and which maintain, or are willing to purchase and maintain, a farm in a rural district for the care of animals." The plaintiff, as trustee, was directed to retain these funds until the court approved distribution to such organization or organizations as it deemed qualified to receive them, for the purposes stated in paragraph 13 of the will.

We turn our attention, then, to the language of Article III, paragraph 13 of the will:

"* * * it being my desire that this money should be used for the purchase of a farm in a rural district which shall be used for the care of animals that may come under its care." (Italics ours.)

For almost a century it has been the settled doctrine in this State that unless a will indicates otherwise, the expression of a desire on the testator's part that a bequest be applied to a particular purpose, creates a trust.

In Deacon v. Cobson , 83 N.J. Eq. 122 (Ch. 1914), Vice-Chancellor Leaming held that the words "wish," "desire," and "request" used in the will and codicil which he was called upon to construe, were imperative and created a trust. He said (at page 124):

"A rule of construction early adopted by the English court of chancery was to the effect that when, by will, property is given absolutely to a person, and the same person is by the testator 'recommended,' 'entreated,' 'requested' or 'wished' to dispose of that property in favor of another, the recommendation, request or wish will be held to be imperative and to create a trust, if the subject and objects of the trust are certain. That rule of construction was adopted by our court of last resort more than half a century ago, and has since been uniformly recognized by the courts of this state; it cannot be now questioned in this court. Van Duyne v. Van Duyne , 15 N.J. Eq. 503; Eddy v. Hartshorne , 34 N.J. Eq. 419; Wood v. Camden Safe Deposit & Trust Co. , 44 N.J. Eq. 460; Eberhardt v. Perolin , 48 N.J. Eq. 592; S.C. (reversed on appeal, but soundness of rule not questioned), 49 N.J. Eq. 570; Cox v. Wills , 49 N.J. Eq. 130; S.C. (reversed only as to method of accounting), 49 N.J. Eq. 573. It necessarily follows that the requests of testatrix in the will and codicil here in question must be given the same force as though the language adopted by testatrix had been, wherever the word 'request' occurs, it is my will and I do hereby order and direct. With this rule of construction uniformly recognized by our courts for so long a period of time, testators and scriveners may be said to have been privileged to rely upon its existence and future recognition."

Other New Jersey cases applying or recognizing the former English doctrine which stemmed from Malin v. Keighley , 2 Ves. Jr. 333, 30 Eng. Repr. 942 (1794), are Ryder v. Myers , 113 N.J. Eq. 360 (Ch. 1933), affirmed 115 N.J. Eq. 169

(E. & A. 1934) and First-Mechanics National Bank, etc. v. First Mechanics National Bank, etc. , 137 N.J. Eq. 106 (Ch. 1945).

The early English view was never actually passed upon by the former Court of Errors and Appeals. In Van Duyne v. Van Duyne , 14 N.J. Eq. 397 (Ch. 1862), Chancellor Green rejected that view and accepted the modern rule. His decision was reversed on appeal, but without opinion, 15 N.J. Eq. 503 (E. & A. 1863), and it was therefore assumed that our highest court adhered to the old English rule. See, for example, Eberhardt v. Perolin , 48 N.J. Eq. 592, 599 (Prerog. 1891), reversed on other grounds 49 N.J. Eq. 570 (E. & A. 1892). The Chancery Court reiterated the doctrine in Ryder v. Myers , above, affirmed by the Court of Errors and Appeals for the reasons stated by Vice-Chancellor Sooy, 115 N.J. Eq. 169 (E. & A. 1934).

The English courts have overruled the doctrine established in their earlier cases. Lambe v. Eames, L.R. 6 Ch. 597, 25 Eng. Rul. Cas. 471 (1871), and the overwhelming majority of the courts in the United States have accepted the more modern view. 1 Scott on Trusts (1939), § 25.2, p. 155. The majority view is that mere precatory expressions are held not to carry the force of command; to determine whether the testator intended to impose enforceable duties, one must not strain his words but look to manifestations of interpretation contained in the will construed under general principles. Restatement of the Law of Trusts (1935), § 25, p. 76; 6 New Jersey Practice (Clapp, Wills and Administration) (1950), § 264, p. 12. The more recent cases have expressed disapproval of the earlier rule and noted that its application frequently defeated what was evidently the real intention of the testator. Eighty years ago James, L.J., said in Lambe v. Eames , above, that "in hearing case after case cited, I could not help feeling that the officious kindness of the Court of Chancery in interposing trusts where in many cases the father of the family never meant to create trusts must have been a very cruel kindness indeed."

The League in its main brief intimates that the case of Marx v. Rice , 1 N.J. 574 (1949), cited by the judge below overturns the English doctrine adopted and followed in this State for so many years. In that case testator gave his wife a general power of appointment. By a subsequent paragraph of his will he "requested" the donee to make such donations as she might "deem proper" to such charitable institutions in Essex County, New Jersey, as she might select. The will then uses the following words:

"* * * 'and I do further request 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.'" (Italics ours.)

She appointed part of the fund in favor of testator's blood relations. It was contended that the quoted provision was mandatory and converted what would otherwise be a general power into a power in trust for the collateral line of the donor, thereby prohibiting the donee from designating any beneficiaries who were not of that line. The ...


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