Matter of Berrien, 194 N.Y. 327 (1909)

When a trustee of a personal property trust dies, the trust vests in the Supreme Court, which has the authority to appoint a successor trustee and need only provide notice of the application to the beneficiaries as it deems appropriate.

Summary

This case concerns the appointment of a trustee for a personal property trust after the original trustees had died. The New York Court of Appeals addressed whether the Supreme Court had jurisdiction to appoint a new trustee upon the petition of the life tenants, without providing notice to the remaindermen. The Court held that the Supreme Court did have jurisdiction, as the Personal Property Law only requires the court to provide such notice to the beneficiaries as it deems appropriate, unlike the Real Property Law which mandates notice to beneficiaries. The court reversed the lower court’s decision that had vacated the trustee’s appointment.

Facts

Joseph Corlies, Sr., died in 1860, leaving a will that created a trust for his two daughters, Cornelia and Emily, with the remainder to their children. The will named his widow and three sons as executors and trustees, granting them the power to sell real estate and convert a portion of the estate into cash for investment. The executors sold a property in 1868, but one executor was absent, leading to questions about the validity of the title. After the deaths of all original executors and trustees, Cornelia’s husband, Earnshaw, was appointed trustee but later died. Years later, in 1907, Edward Berrien was appointed trustee upon the petition of Cornelia and Emily. Emily later sought to remove Berrien, alleging fraud, but the court found no fraud. A dispute arose between Stern (the property owner) and Corn (a potential buyer) regarding the title, leading to further litigation and challenging Berrien’s appointment.

Procedural History

Emily Beese petitioned the court for the removal of Berrien as trustee, alleging fraudulent inducement in his appointment. The Special Term found no fraud but vacated the order appointing Berrien, concluding that the court lacked jurisdiction to make the appointment. This order was appealed. The Appellate Division affirmed. The case then went to the New York Court of Appeals.

Issue(s)

Whether the Supreme Court had jurisdiction to appoint a trustee for a personal property trust under Section 8 of the Personal Property Law without providing notice to the remaindermen.

Holding

Yes, because Section 8 of the Personal Property Law vests the trust in the Supreme Court upon the death of a surviving trustee and authorizes the court to appoint a successor, requiring only such notice to the beneficiaries as the court deems appropriate, unlike the Real Property Law which mandates notice.

Court’s Reasoning

The Court reasoned that the testator’s will contained an imperative power to sell, effectively converting the real estate into personalty as of the date of his death, citing Doane v. Mercantile Trust Co., 160 N.Y. 494. Therefore, the trust should be treated as one involving personal property. Section 8 of the Personal Property Law dictates that upon the death of a surviving trustee, the trust vests in the Supreme Court, which can then appoint a successor. Unlike the Real Property Law, the Personal Property Law does not mandate that the remaindermen (beneficiaries) be brought into court with notice before a trustee is appointed; it only requires “such notice as the court may direct.” The Court emphasized that the statute gives the court discretion to determine what notice is appropriate under the circumstances. The court stated, “It appears to me that the design of the statute was to give the court that power.” While the court acknowledged that providing notice to the remaindermen is generally good practice, it declined to make it a jurisdictional requirement. The Court reversed the lower court’s decision, finding that the Supreme Court did have jurisdiction to appoint Berrien as trustee.