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Guaranty Trust Co. v. Stevens

Decided: November 17, 1958.

GUARANTY TRUST COMPANY OF NEW YORK, AS SUBSTITUTED AND SURVIVING TRUSTEE OF THE TRUST CREATED IN AND BY THE NINTH PARAGRAPH OF THE LAST WILL AND TESTAMENT OF JOSEPH H. OUTHWAITE, DECEASED, PLAINTIFF-RESPONDENT, AND PHILIP J. STEVENS, ET AL., DEFENDANTS-RESPONDENTS,
v.
PHILIP J. STEVENS, JR., ET AL., DEFENDANTS-APPELLANTS



On certified appeal from the Chancery Division to the Appellate Division of the Superior Court.

For affirmance -- Chief Justice Weintraub, and Justices Heher, Wachenfeld, Burling, Jacobs, Francis and Proctor. For reversal -- None. The opinion of the court was delivered by Heher, J.

Heher

At issue here is the legal sufficiency of the donee's appointment by an unwitnessed holographic will valid and judicially proved as such in California, the state of the donee's domicile, under a power to appoint a trust res consisting of intangible personal property created by the will of the New Jersey domiciled donor, established as such in the state of his domicile.

The essential question is stated to be whether the "formal requisites" governing the execution of a testamentary power of appointment are determined by the law of the donor's or the donee's domicile. It is said that the law of the donor's domicile controls "both as to the execution of the power and the interpretation of it," citing Farnum v. Pennsylvania Company for Ins., etc., 87 N.J. Eq. 108 (Ch. 1916), affirmed 87 N.J. Eq. 652 (E. & A. 1917).

The case is here by our certification, at the instance of the guardian for the infant defendant appellants, of an appeal to the Appellate Division from a summary judgment of the Chancery Division of the Superior Court sustaining the execution of the power. The appointed trust res aggregates $828,986.76; and the grounds advanced for immediate certification were "economy of judicial effort and expense to the Estate," and the need for the determination by this court of a "question of public policy and statutory construction."

The issue is raised on a stipulation of facts. The donor, Joseph H. Outhwaite, died November 15, 1902, resident and

domiciled in Lakewood, Ocean County, New Jersey. His last will and testament, dated October 24, 1902, was duly admitted to probate by the Surrogate of the County of Ocean on December 4, 1902. The testator was survived by his wife, Annette B. Outhwaite (who became Annette O. Jennings by a later marriage), and a son, Leonard Outhwaite, age 7, and daughter, Margaret Outhwaite, age 5, who married and then remarried and died in California, August 17, 1956, as Margaret Outhwaite de Wolfe.

Upon the death of Margaret leaving issue her surviving, the principal of the trust estate therein created for her benefit during life, one-third of the residue, was by the ninth paragraph of the will given, devised and bequeathed "* * * unto such persons and in such interests and proportions as [his] said daughter shall in and by her last will and testament in that behalf direct, limit and appoint, and in default of such direction, limitation and appointment, then absolutely unto her issue her surviving in equal shares."

On August 31, 1950 Margaret, then Margaret Outhwaite de Wolfe, resident and domiciled in California, there executed a "partial release of the power of appointment" given her by the will, to the end that "[t]hereafter such power of the undersigned to appoint such property shall be so limited as to constitute an excepted power described in Section 811(f)(2)(A) of the Internal Revenue Code, the existence of which on the undersigned's death will not result in the imposition of a Federal estate tax upon or on account of the property subject to such power to appoint."

At the time of her death, August 17, 1956, Margaret was still resident and domiciled in San Diego County, California. A holograph writing dated January 5, 1954, wholly in the handwriting of Margaret, whose testamentary act it purports to be, unattested by subscribing witnesses, was admitted to probate as Margaret's last will and testament in the Superior Court of California, in and for the County of San Diego, on September 28, 1956, and letters testamentary were issued to the deceased's husband, Walter C. de Wolfe, named in the writing as executor of what the writer described as "this

will, to serve without bond." An exemplified copy of the order admitting the will to probate and appointing the executor was received in evidence in this action.

The will has this provision:

"4. The trust fund established by my father Joseph H. Outhwaite and administered by the Guaranty Trust Company of New York -- will now terminate and the principal to be divided equally between my sons Philip J. and Jerome Stevens after all expenses and taxes are paid."

Margaret left her surviving her sons, Philip J. Stevens and Jerome Stevens, the "appointees," and six grandchildren, Philip J. Stevens, Jr., Hope A. Stevens and Edward A. Stevens, all infants, children of Philip J. Stevens, and Jeffry Outhwaite Stevens, Susan Beven Stevens and Jerome Stevens, Jr., all infants, children of Jerome Stevens. All the infants are represented by the appellant guardian ad litem. On January 13, 1958, after the institution of this suit, a fourth child, Timothy Blair Stevens, was born to Philip J. Stevens. Margaret had another son, Edward Stevens, Jr., who died January 20, 1951, without issue him surviving.

Judge Wick ruled that the holographic will constituted a valid exercise of the power of appointment; and that, even on the contrary hypothesis, the bequest of the trust res, in default of appointment, to the "issue" of Margaret "her surviving, in equal shares," did not include grandchildren, and the entire fund would vest in Margaret's children, ...


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