On cross-appeals from the Superior Court, Chancery Division, Essex County.
For reversal -- Chief Justice Weintraub, and Justices Wachenfeld, Burling, Jacobs, Francis and Proctor. For affirmance -- Justice Heher. The opinion of the court was delivered by Wachenfeld, J. Heher, J. (dissenting).
As testamentary trustee under the will of William Byrd, deceased, the Bank of New York brought this action principally for the purpose of having the court determine to whom it should distribute some $334,000 in trust funds now that the trust in question has expired. Various relatives of the settlor, William Byrd, and his wife, Julia Byrd, were joined as parties-defendant.
The Chancery Division of the Superior Court decided Julia Byrd did not intend, by her last testament, to exercise the general testamentary power of appointment which she had over the subject personalty and, further, that the fund now constituted intestate property which should be equally divided among William Byrd, Jr., Lucy Carter Bredin and the estate of Julia Byrd.
Mary Martin Black appealed and Anne Syfret and Mark Bredin cross-appealed. On our own motion, we granted certification to the Appellate Division.
William Byrd died on August 6, 1952 while domiciled in Short Hills, New Jersey. His will was admitted to probate in the Essex County Surrogate's Court on August 19, 1952, and letters of trusteeship were issued thereunder to the plaintiff Bank of New York. The testator left surviving his wife, two children (William Byrd, Jr., and Lucy Carter Bredin), two grandchildren (Anne Syfret and Mark Bredin), and his stepdaughter (Mary Martin Black).
The residuary clause of William Byrd's will provided:
"ELEVENTH: I give, devise and bequeath all the rest, residue and remainder of my estate, real and personal and wherever situated as follows:
If my wife, JULIA KINGSBURY BYRD shall survive me, one third thereof to BANK OF NEW YORK AND FIFTH AVENUE BANK, a corporation of New York, having its principal office at 48 Wall Street, New York City, duly qualified to act in the State of New Jersey, IN TRUST to invest and reinvest the same and to pay the net income thereof to my wife so long as she shall live and upon her death to pay the principal as my wife shall appoint by her last Will and Testament. In the event that my wife shall die before me I give, devise and bequeath said one third share absolutely to my stepdaughter MARY MARTIN BLACK. If both
my wife and Mary Martin Black die before me, I give such share to my issue per stirpes. I give to my wife, if she shall survive me, full power and authority to withdraw the whole or any part of the capital of said trust during her lifetime and to use the same for her own benefit.
One third thereof to my son WILLIAM BYRD, JR., absolutely and forever. If my said son shall die before me I give his share to his issue me surviving per stirpes.
One third thereof in equal shares to my daughter LUCY CARTER BREDIN of 21 Camden Crescent, Bath, England, my granddaughter ANNE SYFRET of Wolverley near Kidderminster, Worcestershire, England, and my grandson MARK BREDIN. If my said grandson has not attained the age of twenty-five years at the time of my death I direct my Executors to pay him the income of his share until he attains that age and then to pay him the principal. If my said daughter or either of my said grandchildren shall die before me, I give, devise and bequeath the share of the one so dying to her or his issue me surviving per stirpes, and in default of such issue to the survivor or survivors of them."
Julia Byrd died on January 10, 1956 while domiciled at Mary Martin Black's home in Warrenton, Virginia. Mrs. Black is Mrs. Byrd's daughter by a marriage antedating her union with William Byrd in 1941. The last will and testament of Mrs. Byrd was admitted to probate by the Circuit Court of Fauquier County, Virginia. It did not by exact and specific words exercise the general testamentary power of appointment which Mrs. Byrd had over the trust fund established by William Byrd's will, and thus is provoked the present controversy among the defendants over who is entitled to the trust principal now that the trust itself has terminated.
Mrs. Byrd's will was drawn by a Virginia practitioner two months after her husband's demise. It is short and in so far as relevant provides:
"SECOND: I give, bequeath and devise all of my estate, both real and personal, or mixed, wheresoever situated, whether in being or in expectancy, to my daughter MARY MARTIN BLACK of Warrenton, Virginia. Should my said daughter MARY MARTIN BLACK predecease me, I give, bequeath and devise all of my estate, both real and personal and mixed, in equal share to my grandsons, namely JOSIAH MACY, JR., ARCHER MARTIN MACY, and NOEL EVERIT MACY, and I hereby request said
grandsons to equally share the responsibility of the care and maintenance of AUBREY HENRY MARTIN, JR."
Aubrey Henry Martin, Jr., is another grandson of Mrs. Byrd's. William Byrd, Jr., Lucy Carter Bredin, Anne Syfret, Mark Bredin and Mary Martin Black all survive the testatrix.
During the course of this litigation, the defendants have made various concessions and reached certain accommodations respecting the principles of law which they deem relevant to their claims. A brief resume of these will serve to illuminate the import of the parties' several contentions.
Initially, we are not confronted with the necessity to resolve any problems in conflict of laws because defendants agreed in the trial court that New Jersey law should completely govern the disposition of this case. During oral argument we requested the respective attorneys to submit authorities on the question of whether the existence of an intent to execute the power should be gauged by Virginia or New Jersey law, but in reaching our decision we abide by the parties' original understanding that New Jersey law applies. It is conceded that under the statutory law of Virginia a general residuary clause is presumed to exercise a general power of appointment, but that New Jersey observes the converse of this rule.
Mary Martin Black first contends that an intention to appoint the corpus of the trust to her is implicit in the residuary clause of her mother's will. Failing this, she urges us to overrule our previous cases holding that a general residuary clause is not presumed, ipso facto, to exercise a general testamentary power of appointment. If she does not succeed on either of these two points, she then proposes that William Byrd's will be construed to establish an implied gift of the trust principal to her in default of appointment by Mrs. Byrd.
Anne Syfret and Mark Bredin oppose all of Mrs. Black's contentions and argue that the trust fund held by the bank should be divided among the residuary beneficiaries under
the will of William Byrd in proportion to their respective shares in the residue of his estate, citing N.J.S. 3 A:3-14. This statute provides that when a residuary devise or bequest cannot take effect due to lapse or some other cause, it shall thereupon vest in the remaining residuary beneficiaries, if any.
William Byrd, Jr., and Lucy Carter Bredin, who were successful below, deny the validity of Mrs. Black's arguments and also contest the applicability of N.J.S. 3 A:3-14, maintaining that the trust fund has now become intestate property belonging to William Byrd's next of kin under N.J.S. 3 A:4-2.
In order to elucidate the dispositive intentions of William and Julia Byrd, evidence was adduced of the circumstances which probably motivated them at the times when they executed their respective testaments. As a result of examining the terms of Julia Byrd's will in the revealing context of her personal relationships with the parties involved and other extrinsic circumstances, we are persuaded that the relevant factors adequately combine to demonstrate an intention by the testatrix to appoint the trust property to her daughter Mary Martin Black. This conclusion makes it unnecessary to adjudicate the further conflict between the claims of Anne Syfret and Mark Bredin, on the one hand, and William Byrd, Jr., and Lucy Carter Bredin, on the other.
The general rule in our jurisdiction is that a residuary clause, general in its nature, will not ordinarily suffice to exercise a power of appointment. E.g., Lippincott v. Haviland, 93 N.J. Eq. 585 (Ch. 1922); Farnum v. Pennsylvania Co., 87 N.J. Eq. 108 (Ch. 1916), affirmed 87 N.J. Eq. 652 (E. & A. 1917).
The testator must in some way express or indicate a conscious intention to execute it. In many instances the intention exists and, although imperfectly expressed, is aided and supported by surrounding circumstances and their reasonable and logical implications, while in other cases the intention is not expressed at all. Our responsibility, within
the recognized rules of construction, is to distinguish between the classifications, keeping in mind the basic principle hereinafter alluded to.
The rule has been expressed many times in varying language. In its simplest form, it appears in the early case of Munson v. Berdan, 35 N.J. Eq. 376, 378 (Ch. 1882), where the court said:
"* * * but it is not necessary that under such a power of appointment the intention to execute the power should appear by express terms or recital in the instrument -- it is sufficient if the act shows that the donee had in view the subject of the power."
Some years thereafter, in Wooster v. Cooper, 59 N.J. Eq. 204, 223 (Ch. 1900), the above expression was adopted ...