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MATTER ACCOUNTING AMORY L. HASKELL (05/23/69)
SUPREME COURT OF NEW YORK, SPECIAL TERM, NEW YORK COUNTY
1969.NY.41708 <http://www.versuslaw.com>; 300 N.Y.S.2d 711; 59 Misc. 2d 797
May 23, 1969
IN THE MATTER OF THE ACCOUNTING OF AMORY L. HASKELL, DECEASED TRUSTEE, AND ANNE H. ELLIS, SURVIVING TRUSTEE, UNDER AN INDENTURE MADE BY MARGARET R. HASKELL
Winthrop, Stimson, Putnam & Roberts (Peter H. Kaminer, Stephen A. Weiner and Eliot D. Hawkins of counsel), for petitioner.
Milbank, Tweed, Hadley & McCloy (Andrew J. Connick and Kenneth A. Perko, Jr., of counsel), for Blanche A. Haskell, respondent.
Morris & McVeigh (Botein, Hays, Sklar & Herzberg, by Bernard Botein, MacDonald Budd, Arthur Kramer, Paul L. Meaders and Charles A. Stillman of counsel), for Anne H. Ellis and others, respondents.
Hyman Korn, J.
Blanche Haskell, hereafter referred to as "respondent" moves to confirm the Referee's report wherein he found a certain release of a power of appointment by the late Amory Haskell to be invalid.
Petitioner and other children of Amory Haskell cross-move to disaffirm the report.
This controversy arises during the course of an accounting proceeding in which petitioner, as sole surviving trustee of an inter vivos trust created by Margaret Haskell for the benefit of her son Amory, seeks approval of her final account and requests the court to direct to which persons the remaining trust corpus be paid.
Essentially, this is a contest between Amory's second wife, respondent Blanche Haskell, and Amory's children from his first marriage. The determination as to which persons will take the trust principal will turn on whether or not the power of appointment granted under his mother's trust was effectively released by an instrument executed by Amory in October, 1942.
The trust herein was created by Margaret Haskell in 1935. By its terms the settlor's son, Amory, was to receive the income during his lifetime and upon his death the trustees "shall pay over * * * the entire principal * * * to such person or persons * * * said son shall in and by his last will and testament direct and appoint * * * and in default of such appointment * * * deliver the same unto the lawful issue then living of trustor's said son * * * and in default of such appointment by will and of such lawful issue then unto trustor's issue then living." Margaret Haskell and Amory Haskell were named as trustees, and on the death of one, the survivor was "authorized and empowered" to appoint a successor cotrustee. Margaret and Amory acted as co-trustees until Margaret's death on September 17, 1942. After his mother's death, Amory continued as sole trustee until 1948, when he designated his daughter Anne, petitioner herein, as his cotrustee. On October 29, 1942 (shortly following his mother's death) Amory on advice of counsel executed the document which purports to release the power of appointment granted him under his mother's trust.
In 1957, in the petition filed in an interim accounting had herein, Amory recited the fact that he had released the power in 1942 and that his children were the persons interested in the trust remainder. The release executed in 1942 was found among Amory's personal papers after his death in 1966.
On his death, Amory left a 1961 will under which respondent, Blanche Haskell was made sole beneficiary. While this will contains no specific reference to the power of appointment, the law is quite clear that in the event the release in this case is held invalid, the power will be deemed executed under the general residuary clause of Amory's will, and Blanche will receive the corpus of this trust. (Matter of Deane, 4 N.Y.2d 326; Personal Property Law, § 18 [now EPTL 10-6.1], subd. [a], par. ). Thus, the court's finding with respect to the validity of the release will be dispositive of this proceeding.
The court has considered the arguments and briefs addressed by learned counsel to the questions raised. In addition, the court has examined the authorities and findings submitted by the Referee in his extensive and comprehensive report.
Any determination with respect to the validity of Amory's release must first start with an inquiry into the nature of the law relating to release of powers as it existed in our State at the time the document in question was executed.
The power granted Amory under his mother's trust was a general power or power in gross. New York has long recognized that a donee of such power may by written instrument release his right to appoint (Merrill v. Lynch, 173 Misc. 39), and once executed the release is irrevocable (Manville v. Dresselhuys, 181 Misc. 290).
However, beyond some general discussion relative to voluntary extinguishment of powers, there appears to be a dearth of authority on the issue as to what formalities must attend the execution of a release other than its mere signing.
By formalities we mean what other acts, if any, must be performed by the donee to manifest his intent to divest himself of the power. Respondent contends that an executed release will not take effect unless it is delivered to some third person, and that, in this case, no such proper delivery was made.
At the time the release was prepared, and signed, there was an absence of any statutory provision specifically setting forth the manner in which the extinguishment of a power could be effected. The claim, however, is made that section 183 of the Real Property Law (now EPTL 10-9.2), enacted April 14, 1943, and made retroactive to July 1, 1942, applies and governs here. This section sets forth ...