In re Acheson’s Trust, 28 N.Y.2d 155 (1971)
A New York court must give full faith and credit to a California court’s construction of a will executed by a California domiciliary, especially when the interested parties have submitted to the California court’s jurisdiction, even if the will exercises a power of appointment over a New York trust.
Summary
This case concerns the application of full faith and credit to a California court order construing the will of a California domiciliary, Acheson, which exercised a power of appointment over a trust located in New York. Acheson’s will created a trust for his daughter, Linda Belle, potentially violating the rule against perpetuities. The California court construed the will to avoid this violation. Acheson’s other children challenged this in New York. The New York Court of Appeals held that the California court’s construction was entitled to full faith and credit because the California court had personal jurisdiction over the contesting parties, and its interpretation of the testator’s intent was binding.
Facts
Margaret Maher Acheson created a trust in New York with Morgan Guaranty as trustee, providing a life interest for her son, Edward Jr., then a share for her grandson, Acheson, with a power of appointment to Acheson. Acheson, domiciled in California, died in 1965, exercising the power of appointment in his will to create trusts for his wife, Helen, and daughter, Linda Belle. Linda Belle’s trust was to last for 21 years after the death of the last survivor of his wife, daughter, and the daughter’s children living at his death, potentially violating the rule against perpetuities.
Procedural History
Morgan Guaranty initiated a proceeding in New York to settle its account. Acheson’s executor, Bank of America, started an heirship proceeding in California to construe the will to avoid violating the rule against perpetuities. The New York court stayed its proceeding pending the California decision. The California court construed the will to terminate Linda Belle’s trust 21 years after Helen’s death. Acheson’s other children sought relief from the California order, which was denied. The New York Special Term gave full faith and credit to the California order, which the Appellate Division affirmed.
Issue(s)
Whether a California court order construing the will of a California domiciliary, which exercises a power of appointment over a New York trust, is entitled to full faith and credit in New York, where the construction avoids a potential violation of the rule against perpetuities and the interested parties submitted to the California court’s jurisdiction.
Holding
Yes, because the California court had personal jurisdiction over the appellants, and the full faith and credit clause requires New York to respect the California court’s interpretation of the testator’s intent under California law.
Court’s Reasoning
The court reasoned that New York law dictates that the law of the testator’s domicile governs the interpretation of their will regarding personal property. Since Acheson was domiciled in California, California law controls the interpretation of his will. The California Superior Court, with full authority to interpret wills of California domiciliaries, construed Acheson’s will to terminate the trust for Linda Belle within 21 years after Helen’s death, thus avoiding the rule against perpetuities.
The court emphasized that the appellants, Acheson’s other children, had submitted to the California court’s jurisdiction by seeking to vacate the instruction order, constituting a general appearance. This barred them from re-litigating the issue in New York. The court quoted Milliken v. Meyer, 311 U.S. 457, 462, stating that courts in other states are precluded from “any inquiry into the merits of the cause of action, the logic or consistency of the decision, or the validity of the legal principles on which the judgment is based.”
The court also addressed the argument that Morgan Guaranty, the New York trustee, was an indispensable party in the California proceeding. It stated that the California court did not rule on the validity of the trust indenture itself or Acheson’s exercise of his power of appointment, so the trustee was not a necessary party. The California court merely directed the California executor to receive the trust corpus if and when the New York court ordered the turnover.
In conclusion, the court found that the California instruction order, to the extent it interprets the will by finding an intention to limit the duration of the trusts to avoid violating the rule against perpetuities, is entitled to full faith and credit concerning all appellants in the New York proceeding. The court noted, “[P]arties may not a second time challenge the validity of their adversaries’ right which has ripened into a judgment.”