Supreme Court, New York County, New York,
Special Term, Part I
=2E
In re BLISS' TRUST.
Petition of CHEMICAL BANK NEW YORK TRUST COMPANY to render and settle
an account of its proceedings as Successor-Trustee of a Trust created
under an Agreement dated June 4, 1918, between Francis Edward Bliss,
Party of the First Part, as Grantor, Ethel Cicely Mahony, as Party of
the Second Part, and James Howard Bliss and Robert Stanley Paterson,
as Trustees, and for a construction of the aforesaid Deed of Trust.
26 Misc.2d 969, 208 N.Y.S.2d 725
Sept. 30, 1960.
Proceeding on petition of successor trustee for settlement of account
under indenture of trust. The Supreme Court, Special Term, Vincent A.
Lupiano, J., held that where trust agreement in nature of a marriage
settlement was executed in England where all parties to the agreement
then resided, and it provided that all questions of validity,
interpretation and effect of trust should be governed by English law
and trust gave wife a special limited power of appointment after death
of grantor husband, and subsequently the parties moved to the United
States and assets were brought to New York and trust was administered
there, English law governed substance, validity and interpretation of
deed of trust and under English law power of appointment was validly
exercised by wife, who appointed the property to her children, and the
remainders vested and were distributable to her appointees and income
from trust since appointments was payable to the appointees.
Order accordingly.
**726 *970 Morris & McVeigh, New York City, for petitioner.
Coudert Brothers, New York City, and Herbert T. Silverberg, Los
Angeles, Cal. (A. Edward Gottesman, New York City, of counsel), for
respondents Ethel Cicely Bliss, Enid Bliss MacMillan, Cynthia Marjorie
Patricia Corry and Frederick Henry Patrick Mahony.
Jacob M. Blinkoff, New York City, guardian ad litem.
VINCENT A. LUPIANO, Justice.
This is a proceeding by Chemical Bank New York Trust Company to settle
its account as successor trustee under an indenture of trust dated
June 4, 1918 between Francis Edward Bliss, as grantor, Ethel Cicely
Mahony, his intended wife as party of the second part, and James
Howard Bliss and Robert Stanley Paterson, as trustees. The agreement
was in the nature of a marriage settlement, was executed by all the
parties in London, England, where all the parties to the agreement
then resided. The grantor and Ethel Cicely Mahony were subsequently
married.
In 1929, preparatory to moving their residence to the United States,
the grantor and his wife appointed new trustees, two individuals
residing in the United States, and secondly, Fulton Trust Company of
New York, a New York Banking Cor****ation, to succeed the individual
**727 American trustees. Chemical Bank New York Trust Company is
successor by merger to Fulton Trust Company of New York. Since 1929
the assets of the trust have been held in the County of New York and
the trust has been administered here.
The successor trustee previously accounted in this court and requested
a construction of the deed of trust in a number of particulars
including a determination as to the law governing the substance and
validity of the trust. The order of this court, dated June 27, 1955,
in that proceeding provides in part as follows: =911 That all questions
of validity, interpretation and effect of the said Deed of Trust are
governed by and should be determined by the Laws of England * * *.=92
By the terms of the deed of trust the wife, Ethel Cicely Bliss, is
given a special limited power of appointment after the death of the
grantor husband, exercisable during her lifetime or by her will. The
grantor died in 1930, and by certain instruments executed and
delivered to the trustee in December 1959 Ethel Cicely Bliss has
appointed the property, one half to her daughter, Enid Bliss
MacMillan; one fourth to her daughter, Cynthia Marjorie Patricia Corry
and one fourth to her son Frederick Henry Patrick Mahony. Concededly,
the appointees are within the class to which the appointment is
limited. The appointees have accepted the appointments and have joined
with Ethel Cicely Bliss in requesting the trustee to terminate the
trust and pay over the remainders to them.
*971 The attorneys for the trustee, the special guardian for the
infants, (issue of Cynthia Marjorie Patricia Corry) and the attorneys
for the appointees have each independently obtained opinions from
separated eminent English counsel as to whether the appointments are
valid and the trust terminated under English law; by stipulation of
counsel these opinions are in evidence before the court. The opinions
of English counsel are unanimous to the effect that the appointments
are valid, the trust is terminated and the remainder is distributable
to the appointees.
The special guardian for the infants has re****ted that the opinions of
English counsel and his independent research have led him to the
conclusion that English law governs this question of substance and
that any contingent rights his wards may have had were effectively cut
off by the exercise of the power of appointment, and that the
remainders have vested and are now distributable to the appointees.
Whether the prior decree of this court is binding on the infants, who
were not parties to that proceeding, need not be passed upon, as this
court, upon the facts before it, is satisfied that English law governs
the substance, validity and interpretation of the deed of trust. The
court is also satisfied that under English Law the power of
appointment was validly exercised by Ethel Cicely Bliss and the
remainders vested and are distributable to her appointees. It follows
that the income from the trust since the appointments were delivered
to the trustee is payable to the appointees in the pro****tion of the
amount of principal appointed to them.
**728 The trustee has also requested a ruling as to whether it must
retain any reserve for possible United Kingdom Estate Duties which may
be *****sed against the trust. Our courts have consistently held that,
in the absence of a treaty or reciprocal agreement, the courts of New
York will not enforce the revenue laws of other jurisdictions (State
of Colorado v. Harbeck, 232 N.Y. 71, 133 N.E. 357; Matter of Matthews'
Trust, Sup.Ct.N.Y.County, 21 Misc.2d 356, 191 N.Y.S.2d 994; Matter of
Lamar's Estate, 15 Misc.2d 544, 182 N.Y.S.2d 512; Matter of McNeel's
Estate, 10 Misc.2d 359, 170 N.Y.S.2d 893). I do not find, nor has it
been demonstrated, that there is any such reciprocal agreement in that
pertinent phase. I conclude, therefore, that the trustee is not
obligated to reserve any part of the fund for payment of United
Kingdom Estate Duties that may be payable on the death of the life
beneficiary on account of this trust or the interest therein of any
person.
Accordingly the motion is granted. Settle order at which time fees and
allowances will be fixed upon proper affidavits of service which shall
be mutually exchanged prior to the settlement of the order hereon.
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